SUBORDINATED GUARANTY
Exhibit 4.1.4
SUBORDINATED GUARANTY
THIS SUBORDINATED GUARANTY is made as of this ___day of ___, 2006, by ALCATEL1, a
French société anonyme (“Guarantor”) in favor of the Guarantied Parties referred to
below.
W I T N E S S E T H:
WHEREAS, Lucent Technologies Inc., a Delaware corporation (the “Issuer”) is the issuer under
an Indenture dated as of June 4, 2003, as supplemented by the First Supplement thereto dated as of
June 4, 2003 (as such Indenture may be further amended, restated, modified or otherwise
supplemented, the “Indenture”) with The Bank of New York as the trustee thereunder (in such
capacity, the “Trustee”), pursuant to which the Issuer issued its 23/4% Series A Convertible Senior
Debentures due 2023 (the “Series A Debentures”) and its 23/4% Series B Convertible Senior Debentures
due 2025 (the “Series B Debentures” and together with the Series A Debentures and any other Series
of debentures issued under the Indenture, the “Debentures”);
WHEREAS, the Issuer, Guarantor and Aura Merger Sub, Inc., a Delaware corporation and a wholly
owned subsidiary of Guarantor (“Merger Sub”) entered into an Agreement and Plan of Merger dated as
of April 2, 2006 (as such agreement may be amended, restated, supplemented or otherwise modified,
the “Merger Agreement”), which provides, inter alia, that upon satisfaction of the conditions set
forth in the Merger Agreement, Merger Sub shall merge with and into the Issuer, with the Issuer
being the surviving corporation (the “Merger”) and upon consummation of the Merger, the Issuer will
be a wholly owned subsidiary of Guarantor; and
WHEREAS, Guarantor and the Issuer are making a joint consent solicitation (the “Consent
Solicitation”) to amend certain provisions of the Indenture (the “Indenture Amendment”) and in
consideration for the Holders (as herein defined) agreement to the Indenture Amendment, Guarantor
shall, subject to the terms and conditions set forth herein, guaranty the prompt payment and
performance of the Debentures as set forth herein.
NOW, THEREFORE, in consideration of the premises and in order to induce the Holders to consent
to the Indenture Amendment, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Guarantor hereby agrees as follows:
1. Definitions. The following defined terms used herein shall, unless the context
otherwise requires, have the meaning specified below for purposes of this Guaranty, the Indenture
and the Debentures. Capitalized terms used herein which are not otherwise defined herein are used
with the meanings ascribed to such terms in the Indenture.
| 1 | It is currently contemplated that following the consummation of the merger, Alcatel will change its name to Alcatel-Lucent. As a result, depending upon the timing of the name change, the guaranty may be issued in the name of Alcatel Lucent. |
“Equity Securities” means Capital Stock and all warrants, options or other rights to acquire
Capital Stock (but excluding any debt security that is convertible into, or exchangeable for,
Capital Stock).
“Hedging Agreements” means any and all transactions, agreements or documents now existing or
hereafter entered into that provides for an interest rate swap, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap, equity or equity index
option, bond option, interest rate option, foreign exchange transaction, cap transaction, floor
transaction, collar transaction, forward transaction, currency swap transaction, cross-currency
rate swap transaction, currency option, or any other similar transaction (including any option with
respect to any of these transactions) or any combination thereof, whether linked to one or more
interest rates, foreign currencies, commodity prices, equity prices, or other financial measures
for the purpose of hedging the a Person’s exposure to fluctuations in interest or exchange rates,
loan, credit exchange, security or currency valuations or commodity prices.
“Guaranty” means this Subordinated Guaranty dated as of ______, 2006, as amended,
restated, supplemented or otherwise modified from time to time.
“Permitted Junior Securities” means (1) Equity Securities of Guarantor or the Issuer or (2)
debt securities that are subordinated to Senior Debt (and any debt securities issued in exchange
for Senior Debt) to substantially the same extent as, or to a greater extent than, the Debentures
and this Guaranty.
“Senior Debt” means (a) Guarantor’s indebtedness for money borrowed (including indebtedness
secured by a lien on any property or assets of Guarantor), including the principal of, premium, if
any, penalties, reimbursement or indemnification amounts, fees, expenses and accrued and unpaid
interest thereon (including interest accruing on or after the filing of any petition in bankruptcy
or for reorganization relating to the Guarantor, whether or not a claim for such post-petition
interest is allowed in such proceeding), whether outstanding on the date of execution of the
Indenture or thereafter created, incurred or assumed; (b) guaranties by Guarantor of indebtedness
for money borrowed, including the principal of, premium, if any, and accrued and unpaid interest
thereon, by any other Person, whether outstanding on the date of execution of the Indenture or
thereafter created, incurred or assumed; (c) obligations of Guarantor under any agreement to
lease, or lease of, any real personal property (including sale-leaseback transactions), whether
outstanding on the date of execution of the Indenture or thereafter created, incurred or assumed;
(d) obligations of the Guarantor in respect of letters of credit, performance bonds, surety bonds
and similar obligations whether outstanding on the date of execution of the Indenture or
thereafter created; (e) obligations of Guarantor in respect of Hedging Agreements whether
outstanding on the date of execution of the Indenture or thereafter created; (f) modifications,
renewals, extensions, deferrals, refinancings (including any tender premium) and refundings of any
such indebtedness, liabilities or obligations described in
(a) through (e) above unless, in the case of any of
(a) through (f) above, the instrument creating or
evidencing the same or pursuant to which the same is outstanding
provides that such indebtedness, liabilities or obligations, or such
modification, renewal, extension or refunding thereof, or the
Guarantor’s obligations pursuant to such guarantee, are not senior in
right of payment to the Guarantied Obligations or if the instrument
creating or evidencing such indebtedness expressly and specifically
provides in the terms thereof that such indebtedness ranks “pari
passu” or “junior” to the Guarantied Obligations; (g) indebtedness
evidenced by a note, debenture, bond or other instruments of indebtedness for the payment of which
Guarantor is responsible or liable, by guarantees or otherwise, and
-2-
such indebtedness is not otherwise covered by clause (a) above, whether such other
indebtedness was outstanding on the date of execution of the Indenture or thereafter created,
incurred or assumed; (h) any other liability or obligation, contingent or otherwise other than
those described in clauses (a) — (e) and (g), of Guarantor and any guarantee, endorsement or other
contingent obligation in respect thereof, whether outstanding on the date of execution of the
Indenture or thereafter created, incurred or assumed; and (i) modifications, renewals, extensions,
deferrals, refinancings (including any tender premium) and refundings of any indebtedness,
liabilities or obligations described in clauses (g) or
(h) above, if, in the case of any of clauses (g), (h) or
(i) above, the instrument creating or evidencing the same or pursuant
to which the same is outstanding expressly provides that such
indebtedness, liability or obligation is senior in right of payment
to the Guarantied Obligations. Notwithstanding the foregoing,
the term Senior Debt shall not include any indebtedness of Guarantor to any Subsidiary of
Guarantor. If any payment made to any holder of any Senior Debt or its Senior Debt Representative
with respect to such Senior Debt is rescinded or must otherwise be returned by such holder or
Senior Debt Representative upon the insolvency, bankruptcy or reorganization of Guarantor or
otherwise, the reinstated indebtedness of Guarantor arising as a result of such rescission or
return shall constitute Senior Debt effective as of the date of such rescission or return.
“Senior Debt Representative” means (a) the indenture trustee or other trustee, agent or
representative for holders of Senior Debt or (b) with respect to any Senior Debt that does not have
any such trustee, agent or other representative, (i) in the case of such Senior Debt issued
pursuant to an agreement providing for voting arrangements as among the holders or owners of such
Senior Debt, any holder or owner of such Senior Debt acting with the consent of the required
persons necessary to bind such holders or owners of such Senior Debt and (ii) in the case of all
other such Senior Debt, the holder or owner of such Senior Debt.
2. Guaranty of Payment.
(a) Upon the effectiveness of this Guaranty as provided in Section 5 hereof and subject to the
other provisions of this Guaranty, Guarantor hereby unconditionally guaranties to each holder of a
Debenture authenticated and delivered by the Trustee (each a “Holder”) and to the Trustee and its
successors and assigns (collectively, the “Guarantied Parties”), the principal of, premium, if
any, interest on, and all other monetary obligations arising under the Debentures, will be promptly
paid in full when due, whether at maturity, by acceleration, redemption or otherwise, and interest
on the overdue principal of and interest on the Debentures, if any, if lawful, will be promptly
paid in full, in accordance with the terms hereof and thereof (collectively, the “Guarantied
Obligations”). Failing payment when due of any amount so guarantied for whatever reason upon
receipt of written notice from Trustee of such failure, Guarantor will be obligated to pay the same
immediately. By giving any such written notice, Trustee shall be deemed to have accepted the terms
and conditions of this Guaranty. Guarantor agrees that this is a guarantee of payment and not a
guarantee of collection or collectibility. The guaranty provided in this Section 2 is in all
respects subject to, and limited by, the provisions of Section 4 hereof.
(b) Guarantor hereby agrees that its obligations hereunder are absolute and unconditional,
irrespective of the validity, regularity or enforceability of the Debentures or
-3-
the Indenture, the absence of any action to enforce the same, any waiver or consent by any
Holder with respect to any provisions hereof or thereof, the recovery of any judgment against the
Issuer, any action to enforce the same or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a guarantor (other than payment of the Guarantied
Obligations). Guarantor hereby waives diligence, presentment, demand of payment, filing of claims
with a court in the event of insolvency or bankruptcy of the Issuer, any right to require a
proceeding first against the Issuer, protest, notice and all demands whatsoever and covenant that
this Guaranty will not be discharged except by complete performance of the obligations contained in
the Debentures and the Indenture or payment in full of the Guarantied Obligations.
(c) If any Holder or the Trustee is required by any court or otherwise to return to the
Issuer, Guarantor or any custodian, trustee, liquidator or other similar official acting in
relation to either the Issuer or Guarantor, any amount paid by either to the Trustee or such
Holder, this Guaranty, to the extent theretofore discharged, will be reinstated in full force and
effect.
(d) Guarantor agrees that it will not be entitled to any right of subrogation in relation to
the Holders in respect of any Guarantied Obligations until payment in full of all Guarantied
Obligations. Guarantor further agrees that, as between the Guarantor, on the one hand, and the
Holders and the Trustee, on the other hand, (1) the maturity of the Guarantied Obligations may be
accelerated as provided in the Indenture for the purposes of this Guaranty, notwithstanding any
stay, injunction or other prohibition preventing such acceleration in respect of the Guarantied
Obligations, and (2) in the event of any declaration of acceleration of such obligations as
provided in the Indenture, such obligations (whether or not due and payable) will forthwith become
due and payable by Guarantor for the purpose of this Guaranty.
3. Limitation on Guarantor Liability. It is intended that this Guaranty not
constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform
Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal, state or
foreign law to the extent applicable to this Guaranty and that the obligations of Guarantor
hereunder will be limited to the maximum amount that will, after giving effect to such maximum
amount and all other contingent and fixed liabilities of Guarantor that are relevant under such
laws, and after giving effect to any collections from, rights to receive contribution from or
payments made by or on behalf of Guarantor in respect of the obligations of Guarantor under this
Guaranty, result in the obligations of Guarantor under this Guaranty not constituting a fraudulent
transfer or conveyance.
4. Subordination of Guaranty.
(a) The Guarantied Obligations shall be subordinated to Senior Debt to the extent set forth in
this Section 4.
(b) Upon any payment or distribution of the assets or securities to creditors of Guarantor in
a liquidation or dissolution of Guarantor or in a bankruptcy, reorganization,
-4-
insolvency, receivership or similar proceeding relating to Guarantor or its property, in an
assignment for the benefit of creditors or any marshaling of Guarantor’s assets and liabilities:
(1) holders of Senior Debt will be entitled to receive payment in full in cash of all
obligations due in respect of such Senior Debt (including interest after the commencement of any
bankruptcy proceeding at the rate specified in the applicable Senior Debt whether or not a claim
for such interest would be allowed in such proceeding) before the Holders will be entitled to
receive any payment with respect to the Debentures (except that Holders may receive and retain
Permitted Junior Securities), as their interests may appear; and
(2) until all obligations with respect to Senior Debt (as provided in clause (1) above) are
paid in full in cash, any distribution to which Holders would be entitled but for this Section 4
will be made to holders of Senior Debt (except that Holders may receive and retain Permitted Junior
Securities), as their interests may appear.
(c) Guarantor shall not make any payment or distribution to the Trustee or any Holder in
respect of the Debentures and shall not acquire from the Trustee or any Holder for cash or property
(other than Permitted Junior Securities) any Debenture or other obligation arising under the
Indenture until all principal and other obligations with respect to the Senior Debt have been paid
in full if:
(1) a payment default on any Senior Debt occurs and is continuing beyond any applicable grace
period in the agreement, indenture or other document governing such Senior Debt; or
(2) any other default occurs and is continuing on any series of Senior Debt that permits
holders of that Senior Debt to accelerate its maturity and the Guarantor or the Trustee receives a
notice of such default (a “Payment Blockage Notice”) from the holders of any Senior Debt or any
trustee, agent or other representative thereof. If the Guarantor or the Trustee receives any such
Payment Blockage Notice, no subsequent Payment Blockage Notice will be effective for purposes of
this Section 4(c) unless and until at least 360 days have elapsed since the effectiveness of the
immediately prior Payment Blockage Notice.
No nonpayment default that existed or was continuing on the date of delivery of any Payment
Blockage Notice to the Guarantor or the Trustee may be, or may be made, the basis for a subsequent
Payment Blockage Notice unless such default has been waived for a period of not less than 90 days.
(d) Guarantor may and will resume payments on and distributions in respect of the Debentures
and may acquire them (so long as this Section 4 otherwise permits the payment, distribution or
acquisition at the time of such payment or acquisition) upon the earlier of:
(1) in the case of a payment default on any Senior Debt, upon the date upon which such default
is cured or waived, or
-5-
(2) in the case of a nonpayment default on any Senior Debt, upon the earlier of the date on
which such nonpayment default is cured or waived or 179 days after the date on which the applicable
Payment Blockage Notice is received, unless the maturity of such Senior Debt has been accelerated.
(e) By its acceptance of this Guaranty or the acceptance of a Debenture following the
effectiveness of this Guaranty or acceptance of any payment thereunder, Trustee and each Holder
agrees that in the event it receives any payment of any obligations with respect to the Debentures
(other than Permitted Junior Securities) at a time when the Trustee or such Holder, as applicable,
has actual knowledge that such payment is prohibited by Section 4(c) hereof, such payment will be
held by the Trustee or such Holder, in trust for the benefit of, and will be paid forthwith over
and delivered, upon written request, to, the holders of Senior Debt as their interests may appear
or their Senior Debt Representative under the agreement, indenture or other document (if any)
pursuant to which Senior Debt may have been issued, as their respective interests may appear, for
application to the payment of all obligations with respect to Senior Debt remaining unpaid to the
extent necessary to pay such obligations in full in accordance with their terms, after giving
effect to any concurrent payment or distribution to or for the holders of Senior Debt.
(f) Nothing set forth in this Section 4, and no implied covenants or obligations with respect
to the holders of Senior Debt will be read into the Indenture against the Trustee. The Trustee
will not be deemed to owe any fiduciary duty to the holders of Senior Debt, and will not be liable
to any such holders of Senior Debt if the Trustee pays over or distributes to or on behalf of the
Holders or the Issuer or any other Person money or assets to which any holders of Senior Debt are
then entitled by virtue of this Section 4 shall impose upon Trustee any obligations other than
those expressly provided for herein, except if such payment is made as a result of the willful
misconduct or gross negligence of the Trustee.
(g) The Guarantor will promptly notify the Trustee of any facts known to the Issuer that would
cause a payment of any obligations with respect to the Debentures to violate this Section 4, but
failure to give such notice will not affect the subordination of the Debentures to the Senior Debt
as provided in this Section 4.
(h) After all Senior Debt is paid in full and until the Debentures are paid in full, Holders
will be subrogated (equally and ratably with all other indebtedness pari passu with the Debentures)
to the rights of holders of Senior Debt to receive distributions applicable to Senior Debt to the
extent that distributions otherwise payable to the Holders have been applied to the payment of
Senior Debt. A payment or distribution made under this Section 4 to holders of Senior Debt that
otherwise would have been made to Holders is not, as between the Issuer and Holders, a payment by
the Issuer on the Debentures.
(i) This Section 4 defines the relative rights of Holders and holders of Senior Debt. Nothing
in the Indenture will:
-6-
(1) impair, as between the Issuer and Holders, the obligation of the Issuer, which is absolute
and unconditional, to pay principal of, premium and interest on, the Debentures in accordance with
their terms;
(2) affect the relative rights of Holders and creditors of the Issuer other than their rights
in relation to holders of Senior Debt; or
(3) prevent the Trustee or any Holder from exercising its available remedies upon a Default or
Event of Default, subject to the rights of holders and owners of Senior Debt to receive
distributions and payments otherwise payable to Holders.
If the Issuer fails because of this Section 4 to pay principal of, premium or interest on, a
Debenture on the due date, the failure is still a Default or Event of Default.
(j) No right of any holder of Senior Debt to enforce the subordination of the obligations
evidenced by the Debentures may be impaired by any act or failure to act by the Issuer or any
Holder or by the failure of the Issuer or any Holder to comply with the Indenture.
(k) Whenever a distribution is to be made or a notice given to holders of Senior Debt, the
distribution may be made and the notice given to their Senior Debt Representative. Upon any
payment or distribution of assets of the Issuer referred to in this Section 4, the Trustee and the
Holders will be entitled to rely upon any order or decree made by any court of competent
jurisdiction or upon any certificate of such Senior Debt Representative or of the liquidating
trustee or agent or other Person making any distribution to the Trustee or to the Holders for the
purpose of ascertaining the Persons entitled to participate in such distribution, the holders of
the Senior Debt and other indebtedness of Guarantor, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this
Section 4.
(l) Notwithstanding the provisions of this Section 4 or any other provision of the Indenture,
the Trustee will not be charged with knowledge of the existence of any facts that would prohibit
the making of any payment or distribution by the Trustee, and the Trustee may continue to make
payments on the Debentures, unless the Trustee has received at least three Business Days prior to
the date of such payment written notice of facts that would cause the payment of any obligations
with respect to the Debentures to violate this Section 4. Only the Issuer or a Senior Debt
Representative may give the notice. Nothing in this Section 4 will impair the claims of, or
payments to, the Trustee under or pursuant to Section 7.07 of the Indenture. The Trustee in its
individual or any other capacity may hold Senior Debt with the same rights it would have if it were
not Trustee.
(m) By its acceptance of this Guaranty or the acceptance of a Debenture following the
effectiveness of this Guaranty, each Holder shall be deemed to authorize and direct the Trustee on
such Holder’s behalf to take such action as may be necessary or appropriate to effectuate the
subordination as provided in this Section 4, and appoints the Trustee to act as such Holder’s
attorney-in-fact for any and all such purposes. If the Trustee
-7-
does not file a proper proof of claim or proof of debt in the form required in any proceeding
referred to in Section 6.09 of the Indenture at least 30 days before the expiration of the time to
file such claim, the Senior Debt Representatives are hereby authorized to file an appropriate claim
for and on behalf of the Holders.
(n) The provisions of this Section 4 may not be amended or modified without the prior written
consent of the holders of a majority of all Senior Debt other than clarifying changes or changes
that do not have an adverse impact upon holders of Senior Debt.
5. Effectiveness of Guaranty.
(a) The obligations of Guarantor under this Guaranty shall become effective upon execution by
the Guarantor hereof.
(b) For the avoidance of doubt, upon effectiveness of this Guaranty, (1) Trustee and (2) each
Holder, regardless of whether such Holder affirmatively consented to
the Indenture Amendment, shall
be deemed to have accepted this Guaranty on the effective date hereof.
6. Ranking. This Guaranty constitutes unconditional, unsecured and subordinated
indebtedness of the Guarantor and will rank pari passu without preference among themselves and (with
the exception of indebtedness preferred by law) equally and ratably with all other unsecured and
subordinated present or future indebtedness of the Guarantor for money borrowed or any guarantee
thereof which is not Senior Debt.
7. Release. Guarantor may be released from this Guaranty upon the sale, transfer or
other disposition, of all or substantially all of the Capital Stock of Issuer or of all or
substantially all of the assets of Issuer to one or more persons or entities who are not either the
Guarantor or a Subsidiary of the Guarantor, whether by sale, merger, recapitalization, dividend or
distribution or similar transaction, which release shall be effective (a) only upon written notice
by the Issuer to the Trustee accompanied by an Officer’s Certificate certifying as to compliance
with this Section 7, and (b) without any further action on the part of the Trustee or any Holder.
Upon any such release in compliance with the above requirements, the Trustee shall deliver an
appropriate instrument evidencing such release. Any actions taken pursuant to this Section 7 shall
not release Issuer as a primary obligor under the Indenture or the Debentures.
8. Termination. This Guaranty shall remain in full force and effect until all of the
Guarantied Obligations (other than contingent indemnification obligations to the extent no claim
giving rise thereto shall have been asserted) shall be paid in full (which shall include a
conversion of the Debentures in accordance with the Indenture) and the Indenture shall have been
terminated.
-8-
9. Miscellaneous.
(a) This Guaranty shall inure to the benefit of the Holders, and their respective successors
and assigns, to the extent such assignments are permitted under the Indenture.
(b) Captions of the sections of this Guaranty are solely for the convenience of the Holders
and Guarantor, and are not an aid in the interpretation of this Guaranty and do not constitute part
of the agreement of the parties set forth herein.
(c) If any provision of this Guaranty is unenforceable in whole or in part for any reason
(other than by reason of the failure of one or more conditions precedent set forth in Section 5 not
being satisfied), the remaining provisions shall continue to be effective.
(d) Guarantor and Trustee (upon Trustee’s giving of written notice regarding any demand
hereunder pursuant to Section 2) hereby irrevocably submits to the non-exclusive jurisdiction of
any United States federal or New York state court sitting in New York in any action or proceeding
arising out of or relating to this Guaranty and Guarantor hereby irrevocably agrees that all claims
in respect of such action or proceeding may be heard and determined in any such court and
irrevocably waives any objection it may now or hereafter have as to the venue of any such suit,
action or proceeding brought in such a court or that such court is an inconvenient forum. Any
judicial proceeding by Guarantor against any Holder or any affiliate thereof involving, directly or
indirectly, any matter in any way arising out of, related to, or connected with this Guaranty shall
be brought only in a court in New York, New York.
(e) This Guaranty and the transactions evidenced hereby shall be construed under the internal
laws (as opposed to conflict of laws provisions) and decisions of the state of New York.
(f) Notices. All notices, approvals, requests, demands and other communications
hereunder shall be in writing and delivered by hand or by nationally recognized overnight courier,
or sent by first class mail or sent by telecopy (with such telecopy to be confirmed promptly in
writing sent by first class mail), sent:
If to Guarantor, to :
|
Xxxxxxx 00, xxx Xx Xxxxxx 00000 Xxxxx Attention: Telephone: Facsimile: |
-9-
If to Trustee, to :
|
The Bank of New York 000 Xxxxxxx Xxxxxx, Xxxxx 0X Xxx Xxxx, XX 00000 Attention: Corporate Trust Division—Corporate Finance Unit Telephone: Facsimile: |
or to such other address or addresses or telecopy number or numbers as any party hereto may most
recently have designated in writing to the other party by such notice. All such communications
shall be deemed to have been given or made (i) if delivered in person, when delivered, (ii) if
delivered by telecopy, on the date of transmission if transmitted on a Business Day before 3:00
p.m. New York time, otherwise on the next Business Day, (iii) if delivered by overnight courier,
two (2) Business Day after delivery to the courier properly addressed and (iv) if mailed, five (5)
Business Days after deposited in the United States mail, certified or registered.
[Signature Page Follows]
-10-
IN WITNESS WHEREOF, Guarantor has executed this Guaranty as of the date first written above.
| ALCATEL |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
ACKNOWLEDGED AND AGREED:
LUCENT TECHNOLOGIES INC.
| By: | |||
| Name: | |||
| Title: | |||
