Exhibit 1
RESTRUCTURING AGREEMENT
This Restructuring Agreement (the "Agreement") is entered into as of
December 2, 2004, among Bookham Technology plc, a public limited company
incorporated under the laws of England and Wales ("Bookham plc"), Bookham, Inc.,
a Delaware corporation ("Bookham, Inc." and, together with Bookham plc and its
other subsidiaries whose names appear on the signature pages hereto, the
"Bookham Parties"), Nortel Networks UK Limited ("NNUKL") and Nortel Networks
Corporation ("Nortel Networks").
WHEREAS, Bookham plc has issued a Series B Senior Secured Note dated
November 8, 2002 in aggregate principal amount of $30,000,000.00 (the "Series B
Note"), which is currently held by NNUKL;
WHEREAS, Bookham, Inc. issued to NNUKL a Series A-1 Senior Unsecured
Convertible Note dated September 10, 2004 in the principal amount of
$20,000,000.00 (the "Series A-1 Note");
WHEREAS, Bookham plc and NNUKL desire to amend and restate the Series B
Note in the form of Exhibit A hereto (the "Series B-1 Note");
WHEREAS, Bookham, Inc. and NNUKL desire to amend and restate the Series
A-1 Note in the form of Exhibit B hereto (the "Series A-2 Note");
WHEREAS, the parties desire to amend certain security agreements and
enter into certain new agreements to provide that the collateral pledged to
secure the obligations under the Series B Note shall also be pledged to secure
the obligations under the Series B-1 Note and the Series A-2 Note and that
Bookham, Inc. and its subsidiaries pledge certain additional assets to secure
the various obligations of Bookham, Inc., Bookham plc and the guarantors under
each of the Series A-2 Note and the Series B-1 Note; and
WHEREAS, the parties desire that Bookham plc pledge certain real
property located at Caswell, U.K. to secure the obligations under the Series A-2
Note and Series B-1 Note;
NOW THEREFORE, in consideration of the mutual premises hereinafter set
forth and other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto hereby agree as follows:
1. Agreements. Contemporaneously with the execution and delivery of
this Agreement:
(a) Bookham plc shall deliver to NNUKL the Series B-1 Note
which amends and restates the Series B Note;
(b) Bookham, Inc. shall deliver to NNUKL the Series A-2 Note
which amends and restates the Series A-1 Note;
(c) Each of the Bookham Parties and Nortel Networks shall
execute and deliver an agreement that amends and restates the U.S. Security
Agreement dated as of November 8, 2002 between Bookham plc, certain subsidiaries
of Bookham plc and Nortel Networks in the form attached hereto as Exhibit C (as
amended, the "U.S. Security Agreement");
(d) Bookham plc and NNUKL shall execute and deliver a
Debenture relating to the real property at Caswell, U.K., in the form attached
hereto as Exhibit D;
(e) Bookham plc, NNUKL and Nortel Networks shall execute an
amendment to the Debenture relating to real property at Paignton, U.K. dated
November 8, 2002 between Bookham plc and Nortel Networks in the form attached
hereto as Exhibit E;
(f) Bookham, Inc. shall cause Bookham (Canada) Inc. to execute
and deliver and Nortel Networks shall execute and deliver, and shall cause NNUKL
to execute and deliver, an agreement that amends and restates the Security
Agreement dated as of November 8, 2002 between Bookham (Canada) Inc. and Nortel
Networks, in the form attached hereto as Exhibit F.
2. Post-Signing Actions. (a) Within 14 calendar days of the
execution and delivery of this Agreement, and to the extent permitted by
applicable law, Bookham, Inc. shall (i) cause all of the outstanding capital
stock or other equity interests of Bookham International Ltd., a company
organized in the Cayman Islands that is a wholly-owned subsidiary of Bookham,
Inc., to be pledged, in favor of NNUKL, on a first priority basis (to the extent
such priority is contemplated by applicable law) as security for the Obligations
(as defined in the U.S. Security Agreement) of Bookham, Inc. and its
subsidiaries under the Series B-1 Note and the Series A-2 Note and the Security
Agreements, pursuant to an agreement reasonably acceptable to Nortel Networks,
(ii) cause such pledges to be perfected under the laws of the Cayman Islands and
(iii) deliver to NNUKL an opinion from Xxxxxx and Xxxxxx, Cayman counsel to
Bookham, Inc., addressed to NNUKL in substantially the form of Exhibit G.
(b) As soon as reasonably practicable after the execution of
this agreement, and to the extent permitted by applicable law, Bookham, Inc.
shall cause the property, plant and equipment (including real property) located
in China that is owned by subsidiaries of Bookham, Inc. (including Bookham
Technology (Shenzhen) (FFTZ) Co. Ltd. and New Focus Pacific (SHIP) Co. Ltd.) to
be mortgaged or pledged on a first-priority basis (to the extent such priority
is contemplated by applicable law) for the benefit of NNUKL as security for the
Obligations of Bookham, Inc. and its subsidiaries under the Series B-1 Note and
the Series A-2 Note and the Security Agreements to the extent that such assets
may be legally pledged and to perfect such security interests (to the extent
perfection is contemplated by applicable law) pursuant to agreements and
documents in each case reasonably acceptable in form and substance to Nortel
Networks. Such agreements and documents shall limit the sales and transfers of
such assets consistent with the restrictions set forth in the U.S. Security
Agreement, except that they shall permit Bookham, Inc. and its subsidiaries to
enter into one or more "sale-leaseback" or similar transactions relating to such
assets on the terms and conditions set forth in Section 2.06(d) of the U.S.
Security Agreement.
(c) Within 5 Business Days after Bookham, Inc. complies with
its obligations under Section 2(b) of this Agreement, Nortel Networks shall
cause NNUKL to waive, release or take such other action as is necessary to
discharge any lien or equitable charge over the capital stock or other equity
securities of Bookham International Ltd. granted for the benefit of NNUKL.
(d) Within 5 Business Days of a request from Nortel Networks,
Bookham, Inc. shall, and shall cause its subsidiaries to, execute and deliver
such English law security documents (together with all other connected or
ancillary documents required for the creation and perfection of the security
interest created thereunder) as Nortel Networks may reasonably request. Such
security documents shall be on terms and conditions satisfactory to Nortel
Networks (acting reasonably) and only create security interests in favor of
NNUKL over assets that are expressly stated as being the subject of the security
interests under the U.S. Security Agreement.
(e) As soon as reasonably practicable after the execution of
this Agreement (but in no event later than 30 calendar days after the execution
of this Agreement), and to the full extent permitted by applicable law, Bookham,
Inc. shall cause Bookham (Switzerland) AG to execute and deliver and Nortel
Networks shall execute and deliver, and shall cause certain of its subsidiaries
to execute and deliver, an agreement pursuant to which, to the full extent
permitted by applicable law, the Swiss Assets (as defined in the Xxxx of Sale
dated November 8, 2002 by and among Bookham (Switzerland) AG, Nortel Networks
and certain subsidiaries of Nortel Networks), all Improvements (as defined in
the Intellectual Property Agreement) to the Intellectual Property and all
property, plant and equipment that is then or thereafter owned by Bookham
(Switzerland) AG, excluding Excluded Equipment (as defined in the U.S. Security
Agreement) and leasehold improvements, shall be pledged (or otherwise made
available as collateral to the full extent allowed under Swiss law) on a first
priority basis (to the extent such priority is contemplated by applicable law)
for the benefit of Nortel Networks and certain of its subsidiaries as security
for the Obligations of Bookham, Inc. and its subsidiaries under the Series B-1
Note and the Series A-2 Note and the Security Agreements to the full extent that
such assets may be legally pledged and to perfect such security interests (to
the extent perfection is contemplated by applicable law) pursuant to agreements
and documents in each case reasonably acceptable in form and substance to Nortel
Networks. Such agreements and documents shall limit the sales and transfers of
such assets consistent with the restrictions set forth in the U.S. Security
Agreement.
3. Representations and Warranties. The Bookham Parties hereby jointly
represent and warrant to NNUKL and Nortel Networks as follows:
(a) Each Bookham Party is a corporation or legal entity duly
organized and validly existing under the laws of the jurisdiction of its
organization and is duly qualified or licensed to do business and is in good
standing (if and to the extent such term is recognized in the relevant
jurisdiction) in each jurisdiction in which the property owned, leased or
operated by it or the nature of the business conducted by it makes such
qualification or licensing necessary, except where the failure to so qualify
would not reasonably be expected to result in damages to the Bookham Parties of
more than $1,000,000 in the aggregate.
(b) Each Bookham Party has the requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as currently conducted and the requisite corporate power and authority to enter
into and perform this Agreement and all other agreements and documents
contemplated hereby (the "Additional Documents") and to carry out the
transactions contemplated by this Agreement and the Additional Documents.
(c) This Agreement has been, and the Additional Documents when
executed will be, duly executed and delivered by the applicable Bookham Party,
and constitute valid and binding obligations of such Bookham Party, enforceable
in accordance with their respective terms, except that no such representation
and warranty is made herein with respect to the law of any jurisdiction outside
of the United States.
(d) Other than (A) as set forth on Exhibit H, (B) Indebtedness
secured by purchase money security interests, (C) the Series A-2 Note, (D) the
Series B-1 Note and (E) capitalized leases, letters of credit, indemnity
obligations and performance bonds not exceeding U.S.$2,000,000 in the aggregate,
the Bookham Parties do not have any Indebtedness. "Indebtedness" means any
obligation in respect of (i) borrowed money (excluding intercompany loans), (ii)
capitalized lease obligations, (iii) obligations under interest rate agreements
and currency agreements, (iv) guarantees of any obligation of any third Person,
(v) letters of credit and (vi) indemnity obligations or performance bonds.
(e) The amendment and restatement of the Series A-1 Note and
the authorization, issuance, execution and delivery of the Series A-2 Note has
been duly authorized by all requisite corporate action on the part of the
Bookham, Inc.
(f) The amendment and restatement of the Series B Note and the
authorization, issuance, execution and delivery of the Series B-1 Note has been
duly authorized by all requisite corporate action on the part of Bookham plc.
(g) Neither the execution or delivery by any Bookham Party of
this Agreement, the consummation of the transactions contemplated hereby, nor
the compliance by the Bookham Parties with any of the provisions hereof will (i)
conflict with, violate or result in the breach of, any provision of the
certificate of incorporation or by-laws or other organizational documents of any
Bookham Party; (ii) conflict with, violate, or result in the breach by any
Bookham Party of any applicable law; (iii) conflict with, violate, result in the
breach or termination of, or constitute a default or give rise to any right of
termination or acceleration or right to increase the obligations or otherwise
modify the terms under any contract, agreement or understanding to which any
Bookham Party is a party or by which any Bookham Party or any of its assets is
bound; or (iv) result in the creation of any lien upon any of the assets of the
Bookham Parties (other than the liens created pursuant to the transactions
contemplated hereby), in each case, with respect to the foregoing, except for
such conflicts, violations, breaches, terminations, defaults, rights or liens
that have not had and would not reasonably by expected to have, individually or
in the aggregate, a material adverse effect on any Bookham Party.
(h) No consent, approval or authorization of, permit from, or
declaration, filing or registration with, any governmental authority or any
other person is required to be made or obtained by any Bookham Party in
connection with the execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby, except where the
failure to obtain such consent, approval, authorization or permit, or to make
such declaration, filing or registration, has not had and would not reasonably
be expected to have, individually or in the aggregate, a material adverse effect
on any Bookham Party.
(i) As of the date hereof, other than Bookham (Canada), Inc.
neither Bookham, Inc., nor any of its subsidiaries owns, leases or operates any
assets in Canada, except for any Intellectual Property registered in Canada. The
aggregate fair market value of the assets of Bookham, Inc. and its subsidiaries
in Canada does not exceed $1,500,000 as of the date hereof. "Intellectual
Property" means trademarks, service marks, brand names, distinguishing guises,
trade dress, trade names, words, symbols, color schemes, business names,
internet domain names and other indications of origin, patents and pending
patent applications, utility models, inventors' certificates and invention
disclosures
(j) Bookham Technology (Shenzhen) (FFTZ) Co. Ltd. and New
Focus Pacific (SHIP) Co. Ltd. are the only entities organized under the laws of
China in which Bookham, Inc. or any of its subsidiaries holds an equity
interest; and Bookham International Ltd. owns all the outstanding equity
interests of Bookham Technology (Shenzhen) (FFTZ) Co. Ltd. and New Focus Pacific
(SHIP) Co. Ltd. free and clear of all Liens.
(k) Each Principal Subsidiary (as defined in the U.S. Security
Agreement) of Bookham, Inc. is a party to the U.S. Security Agreement and is a
Guarantor (as defined in the Series A-2 Note) of the obligations of Bookham,
Inc. under the Series A-2 Note and the obligations of Bookham plc under the
Series B-1 Note and is a Pledgor Party under the U.S. Security Agreement or the
Canadian Security Agreement.
4. Appraisals. Bookham, Inc., at its own expense, shall engage a
certified appraiser to appraise the value of all material Collateral (as defined
in the U.S. Security Agreement). Bookham, Inc. shall cause such certified
appraiser to issue a valuation report with respect to such material Collateral
to NNUKL and Nortel Networks within 90 calendar days of the date of this
Agreement.
5. Miscellaneous.
(a) Parties in Interest. All covenants, agreements,
representations, warranties and undertakings in this Agreement made by and on
behalf of any of the parties hereto shall bind and inure to the benefit of the
respective successors and permitted assigns of the parties hereto.
(b) Amendments and Waivers. Except as set forth in this
Agreement, changes in or additions to this Agreement may be made, or compliance
with any term, covenant, agreement, condition or provision set forth herein may
be omitted or waived (either generally or in a particular instance and either
retroactively or prospectively), upon the written consent of all of the parties
to this Agreement.
(c) Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York (without
reference to the conflicts of law provisions thereof).
(d) Notices. All notices, requests, consents, and other
communications under this Agreement shall be in writing and shall be deemed
delivered (i) two business days after being sent by registered or certified
mail, return receipt requested, postage prepaid or (ii) one business day after
being sent via a reputable nationwide overnight courier service guaranteeing
next business day delivery, in each case to the intended recipient as set forth
below:
(i) If to any Bookham Party, at Bookham Technology plc,
Caswell Xxxxxxxxx, Xxxxxxxxxxxxxxxx XX00 0XX, Xxxxxx Xxxxxxx, Attention:
Corporate Secretary, with a copy to Xxxxxx X. Xxxx, Esq., Xxxxxx Xxxxxx
Xxxxxxxxx Xxxx and Xxxx LLP, 00 Xxxxx Xxxxxx, Xxxxxx, XX 00000; and
(ii) If to NNUKL or Nortel Networks, at Nortel Networks
Corporation, 0000 Xxxxx Xxxx, Xxxxxxxx, XX X0X 0X0, Xxxxxx, Attention:
Secretary, with a copy to Xxxxxx Xxxxxxx, Nortel Networks Corporation, 0000
Xxxxxxxx Xxxxxxxxx, Mail Stop 991-14-B40, Xxxxxxxxxx, XX 00000-0000.
(iii) Any party may give any notice, request, consent or
other communication under this Agreement using any other means (including,
without limitation, personal delivery, messenger service, telecopy, first class
mail or electronic mail), but no such notice, request, consent or other
communication shall be deemed to have been duly given unless and until it is
actually received by the party for whom it is intended. Any party may change the
address to which notices, requests, consents or other communications hereunder
are to be delivered by giving the other parties notice in the manner set forth
in this Section 3(d).
(e) Entire Agreement. This Agreement and the exhibits hereto
together with any other agreement referred to herein constitute the entire
agreement among the parties with respect to the subject matter hereof. This
Agreement supersedes all prior agreements between the parties with respect to
the note purchased hereunder and the subject matter hereof.
(f) Severability. The invalidity or unenforceability of any
provision hereof shall in no way affect the validity or enforceability of any
other provision.
(g) Counterparts; Facsimile Signatures. This Agreement may be
executed in any number of counterparts, each of which shall be deemed to be an
original, and all of which shall constitute one and the same document. This
Agreement may be executed by facsimile signatures.
(h) Legends. It is understood that the Series A-2 Note and the
Series B-1 Note shall bear a legend substantially in the following form and such
other legends that may be required under the laws of any applicable
jurisdiction:
"The security represented by this instrument has not been
registered under any applicable securities law. This security
cannot be sold or otherwise transferred unless it is
registered under the U.S. Securities Act of 1933 or the
borrower is furnished with an acceptable opinion of counsel
that an exemption from registration is available.
This note has not been qualified by the filing of a prospectus
under applicable Canadian securities laws. By its acceptance
of this note, the holder represents that it is an accredited
investor, as such term is defined in Ontario Securities
Commission rule 45-501, and agrees that this note is not being
acquired with a view to distribution."
(i) Expenses. Bookham, Inc. shall pay the reasonable fees and
disbursements of external legal counsel to NNUKL and Nortel Networks and any
filing fees incurred by NNUKL or Nortel Networks relating to the transactions
contemplated hereby up to a maximum of $75,000 in the aggregate. Except as
otherwise expressly set forth in this Agreement, each party shall otherwise bear
all of its own expenses incurred in connection with the transactions
contemplated hereby.
* * * * *
[SIGNATURE PAGE TO RESTRUCTURING AGREEMENT]
US1DOCS 4829375v4
IN WITNESS WHEREOF, this Restructuring Agreement has been executed by
the parties hereto as of the day and year first written above.
BOOKHAM TECHNOLOGY PLC
By: /s/ Xxxxxxx Xxxxx
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Name: Xxxxxxx Xxxxx
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Title: Director
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BOOKHAM, INC.
By: /s/ Xxxxxxx Xxxxx
--------------------------------
Name: Xxxxxxx Xxxxx
--------------------------------
Title: Chief Financial Officer
--------------------------------
NEW FOCUS, INC.
By: /s/ Xxxxxxx Xxxxx
--------------------------------
Name: Xxxxxxx Xxxxx
--------------------------------
Title: President
--------------------------------
XXXXXX, INC.
By: /s/ Xxxxxx Xxxxx
--------------------------------
Name: Xxxxxx Xxxxx
--------------------------------
Title: President
--------------------------------
IGNIS OPTICS, INC.
By: /s/ Xxxxxxx Xxxxx
--------------------------------
Name: Xxxxxxx Xxxxx
--------------------------------
Title: President
--------------------------------
BOOKHAM (CANADA), INC.
By: /s/ Xxxxxxx Xxxxx
--------------------------------
Name: Xxxxxxx Xxxxx
--------------------------------
Title: Director
--------------------------------
By: /s/ Xxxxxx Xxxxx
--------------------------------
Name: Xxxxxx Xxxxx
--------------------------------
Title: Treasurer
--------------------------------
BOOKHAM (SWITZERLAND) AG
By: /s/ Xxxxxxx Xxxxx
--------------------------------
Name: Xxxxxxx Xxxxx
--------------------------------
Title: President and Director
--------------------------------
NORTEL NETWORKS UK LIMITED
By: /s/ Xxxxxxxx Xxxxx
--------------------------------
Name: Xxxxxxxx Xxxxx
--------------------------------
Title: Director
--------------------------------
NORTEL NETWORKS CORPORATION
By: /s/ Khush Dadyburjor
--------------------------------
Name: Khush Dadyburjor
--------------------------------
Title: Attorney-in-fact
--------------------------------
Exhibit A
AMENDED AND RESTATED
SERIES B-1 NOTE
THE SECURITY REPRESENTED BY THIS INSTRUMENT HAS NOT BEEN REGISTERED UNDER ANY
APPLICABLE SECURITIES LAW. THIS SECURITY CANNOT BE SOLD OR OTHERWISE TRANSFERRED
UNLESS IT IS REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933 OR THE BORROWER IS
FURNISHED WITH AN ACCEPTABLE OPINION OF COUNSEL THAT AN EXEMPTION FROM
REGISTRATION IS AVAILABLE.
THIS NOTE HAS NOT BEEN QUALIFIED BY THE FILING OF A PROSPECTUS UNDER APPLICABLE
CANADIAN SECURITIES LAWS. BY ITS ACCEPTANCE OF THIS NOTE, THE HOLDER REPRESENTS
THAT IT IS AN ACCREDITED INVESTOR, AS SUCH TERM IS DEFINED IN ONTARIO SECURITIES
COMMISSION RULE 45-501, AND AGREES THAT THIS NOTE IS NOT BEING ACQUIRED WITH A
VIEW TO DISTRIBUTION.
Series B-1 Senior Secured Note Due 2006
U.S.$30,000,000.00 Date _________
Section 1. General.
(a) Bookham Technology plc, a public limited company incorporated under
the laws of England and Wales (the "Borrower"), for value received, hereby
promises to pay, subject to the further provisions hereof, to Nortel Networks UK
Limited (the "Lender"), the principal amount of THIRTY MILLION U.S. DOLLARS
(U.S.$30,000,000.00), as such principal amount may be reduced by prepayments
pursuant to Section 3 and Section 4 of this Note (as defined below), on November
8, 2006 (such date, the "Maturity Date"), on presentation and surrender of this
Note to the Borrower, in such coin or currency of the United States of America
as at the time of payment shall be legal tender therein for the payment of
public and private debts.
(b) The Borrower further agrees to pay interest on the outstanding
principal amount hereof from time to time from the date hereof at the Interest
Rate (as defined below), payable in arrears on each Interest Payment Date (as
defined below) and on the Maturity Date. Interest shall be calculated on the
basis of a 360-day year of twelve 30-day months.
(c) The Lender shall act on behalf of and as agent for all present and
future Holders (as defined below) and shall exclusively exercise or enforce any
and all rights, powers, privileges and remedies hereunder. If the Holder is not
the Lender, the Borrower and the Guarantors shall satisfy any requirement
hereunder to deliver to the Holder any notice or payment by delivering such
notice or payment to the Lender rather than the Holder.
Section 2. Security Interest, Retention of Title and Limitation on
Liens.
(a) As security for the Indebtedness (as defined below), and as
security for the agreements and other obligations of the Borrower and the
Guarantors (as defined below) hereunder and in order to secure the full and
punctual payment of their respective obligations hereunder in accordance with
the terms set forth herein, (i) the Borrower has pledged, and Bookham, Inc. has
caused certain of its Subsidiaries to pledge, and the Borrower will pledge and
Bookham, Inc. will cause certain of its Subsidiaries to pledge, the Collateral
(as defined below) pursuant to the Security Agreements and the documents
delivered pursuant thereto and pursuant to certain other documents delivered or
to be delivered, as applicable, pursuant to the Restructuring Agreement, and
(ii) the Seller (as defined in the Acquisition Agreement) and its Subsidiaries
have retained title to certain of the Assets (as defined in the Acquisition
Agreement) pursuant to the Xxxx of Sale, dated as of November 8, 2002 delivered
by Seller and certain of its Subsidiaries to Bookham (Switzerland) AG (as such
title retention arrangements have been modified by certain documents and
agreements delivered or to be delivered, as applicable, pursuant to the
Restructuring Agreement).
(b) None of the Borrower and the Guarantors shall (and none of them
shall permit any of its Subsidiaries to) create, incur, assume or permit to
exist any Lien on any of the Collateral, except for Permitted Liens.
Section 3. Voluntary Prepayment.
This Note shall be prepayable, at the option of the Borrower, in whole
or in part, on one or more occasions, on not less than two (2) Business Days (as
defined below) and not more than twenty (20) calendar days prior written notice
to the Holder, at a price in cash equal to 100% of the outstanding principal
amount to be prepaid, plus accrued and unpaid interest to such prepayment date.
Section 4. Mandatory Prepayment.
(a) Within one (1) Business Day after the consummation of any Qualified
Financing (as defined below), the Borrower shall prepay in cash on a pro rata
basis by wire transfer of immediately available funds the outstanding
obligations under the Series B-1 Note in an amount equal to 20% of the Net
Proceeds (as defined below) of such Qualified Financing to the extent such Net
Proceeds constitute all or part of the Initial Net Proceeds (as defined below).
(b) Within one (1) Business Day after the consummation of any Qualified
Financing, the Borrower shall prepay in cash on a pro rata basis by wire
transfer of immediately available funds the outstanding obligations under the
Series B-1 Note in an amount equal to 40% of the Net Proceeds of such Qualified
Financing to the extent such Net Proceeds constitute all or part of the
Subsequent Net Proceeds (as defined below).
(c) Within one (1) Business Day after the consummation of any sale,
distribution, assignment, lease, transfer or other disposition in violation of
Section 7(d), the Borrower shall prepay on a pro rata basis by wire transfer of
immediately available funds the outstanding obligations under the Series B-1
Note in an amount equal to the Net Proceeds of such sale, distribution,
assignment, lease, transfer or other disposition
(d) Within one (1) Business Day after a Change of Control (as defined
below) of Bookham, Inc., the Borrower shall prepay the Series B-1 Note in full
at a price in cash equal to 100% of the outstanding principal amount, plus
accrued and unpaid interest to such prepayment date.
Section 5. Replacement of Note.
At the request of the Holder upon receipt by the Borrower of evidence
satisfactory to it of the loss, theft, destruction or mutilation of this Note
and, in case of loss, theft or destruction, of indemnity reasonably satisfactory
to it, or, in the case of mutilation, upon surrender and cancellation of this
Note, and in all cases upon reimbursement to the Borrower of all reasonable
expenses incidental thereto, the Borrower and the Guarantors shall make and
deliver to the Holder a replacement Note of like tenor in lieu of this Note.
Section 6. Amendments, Modifications and Waivers.
No covenant, agreement or condition contained in this Note may be
amended or modified and no right hereunder may be waived (either generally or in
a particular instance and either retroactively or prospectively) other than by a
written instrument or agreement executed by the Holder and the Borrower. Any
such amendment, modification or waiver shall be binding upon each present and
future holder of this Note and upon the Borrower. Upon the request of the
Borrower, the Holder shall submit this Note to the Borrower so that this Note be
marked to indicate such amendment, modification or waiver, and any Note issued
thereafter shall bear a similar notation referring to any such amendment,
modification or continuing waiver.
Section 7. Existence; Conduct of Business; Report on Cash Balance and
Forecast of Cash Flows; Sales of Assets; Confidentiality; Trading in Securities.
(a) Each of the Borrower and the Guarantors shall do or cause to be
done all things necessary to preserve, renew and keep in full force and effect
its legal existence and the rights, contracts, licenses, permits, privileges,
franchises, patents, copyrights, trademarks and trade names that are, in the
Borrower's reasonable judgment, material to the conduct of its business.
(b) Provided that from time to time the Holder may instruct the
Borrower to discontinue the delivery of reports pursuant to this Section 7(b),
Bookham, Inc. shall deliver the following reports to the Holder via email to
xxxxxxx@xxxxxxxxxxxxxx.xxx and via facsimile at 000-000-0000 (or such other
email address or facsimile number as the Holder shall designate in writing):
(i) By Tuesday of the following calendar week, for each calendar
week ending after the date of this Note, Bookham, Inc. shall provide the Holder
with a report, on a consolidated basis, of the amount of Bank Cash (as defined
below), as of the end of the day on Friday of such calendar week.
(ii) By the 10th day of each calendar month ending after the date
of this Note, Bookham, Inc. shall provide the Holder with a report stating the
Cash Balance (as defined below) of Bookham, Inc. and its Subsidiaries, on a
consolidated basis, as of the end of the prior calendar month (or the nearest
Business Day thereafter if the end of the calendar month is not a Business Day).
(iii) By the 25th day of each calendar month ending after the
date of this Note, Bookham, Inc. shall provide the Holder with a report stating
the Cash Balance of the Borrower and its Subsidiaries, on a consolidated basis,
as of the 15th day of the then current calendar month or, if the 15th day is not
a Friday, the nearest Friday to the 15th day.
(c) Within 15 Business Days of the end of each calendar month ending
after the date of this Note, Bookham, Inc. shall provide the Holder with (i) a
statement of operations, balance sheet and statement of cashflows prepared in
accordance with Bookham, Inc.'s internal format for Bookham, Inc. and its
Subsidiaries, on a consolidated basis, for the previous calendar month and (ii)
a financial forecast of Bookham, Inc. and its Subsidiaries, on a consolidated
basis, for the current quarter and for the four subsequent quarters, consisting
of a statement of operations, balance sheet and statement of cashflows prepared
in accordance with Bookham, Inc.'s internal format, as well as qualitative
analysis of such forecasts and any changes from prior forecasts provided to the
Holder in accordance with this Section 7(c); provided, however, that from time
to time the Holder may instruct the Borrower to discontinue the delivery of
reports pursuant to this Section 7(c).
(d) Neither the Borrower nor any Guarantor shall distribute, sell,
assign, transfer or otherwise dispose of any Collateral without the prior
written consent of the Holder while the Guaranteed Obligations are outstanding,
except for the disposition of equipment having a fair market value not to exceed
$5,000,000 in the aggregate.
(e) The Holder and its Representatives shall hold in confidence, and
shall not disclose to any person outside its organization, any of the
information provided by Bookham, Inc. pursuant to Section 7(b) or Section 7(c)
without the prior written consent of Bookham, Inc.. The Holder shall disclose
such information only to persons within its organization who have a need to know
such information in the course of the performance of their duties. The Holder
will promptly report to Bookham, Inc. any actual violation of the terms of this
Section 7(e) and will take all reasonable further steps requested by Bookham,
Inc. to prevent, control or remedy any such violation. The obligations of the
Holder in this Section 7(e) shall not apply, and the Holder shall have no
further obligations, with respect to (i) any information that is known to the
Holder prior to the date of disclosure of such information pursuant to Sections
7(b) or 7(c) hereof or is publicly available when provided or that thereafter
becomes publicly available other than through a breach by the Holder of this
Section 7(e), or (ii) any information that the Holder or its Representatives are
required to disclose to or by a court, governmental or regulatory agency, stock
exchange or similar body, or as otherwise required by applicable law, provided
that the Holder exercises its reasonable efforts to preserve the confidentiality
of the information, including, without limitation, by cooperating with Bookham,
Inc. to obtain an appropriate protective order or other reliable assurance that
confidential treatment will be accorded the information by the person or entity
receiving such information.
(f) The Holder acknowledges that it is aware applicable securities laws
prohibit any person who is aware of material, non-public information about a
company obtained directly or indirectly from that company from purchasing or
selling securities of such company or from communicating such information to any
other person under circumstances in which it is reasonably foreseeable that such
person is likely to purchase or sell such securities and agrees that it will not
do so while in possession of any material nonpublic information about Bookham,
Inc..
Section 8. Guarantees.
(a) Each Guarantor hereby jointly and severally unconditionally
guarantees, as a primary obligor and not merely as a surety, to the Holder the
full and punctual payment when due, whether at the Maturity Date, by
acceleration, by prepayment or otherwise, of all obligations of the Borrower
under this Note, whether for payment of principal or interest (including
interest accruing during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding) in respect of the Note and all other monetary
obligations of the Borrower under this Note, whether for fees, expenses,
indemnification or otherwise (all the foregoing being hereinafter collectively
called the "Guaranteed Obligations"). Each Guarantor further agrees that the
Guaranteed Obligations may be extended or renewed, in whole or in part, pursuant
to the terms of Section 6, without notice to or further assent from each such
Guarantor, and that each such Guarantor shall remain bound under this Section 8
notwithstanding any extension or renewal of any Guaranteed Obligation.
(b) Each Guarantor waives presentation to, demand of payment from and
protest to the Borrower of any of the Guaranteed Obligations and also waives
notice of acceptance of its guarantee and notice of protest for nonpayment. Each
Guarantor waives notice of any default under this Note. The obligations of each
Guarantor hereunder shall not be affected by (i) the failure of the Holder to
assert any claim or demand or to enforce any right or remedy against the
Borrower or any other Person (as defined below) under this Note or any other
agreement or otherwise; (ii) any extension of the repayment terms of the
Guaranteed Obligations; (iii) any rescission, waiver, amendment or modification
of any of the terms or provisions of this Note or any other agreement; (iv) the
failure to perfect any security interest in, or the release of, any security
held by the Holder for the Guaranteed Obligations or any of them; or (v) the
failure of the Holder to exercise any right or remedy against any other
Guarantor. In the event that there is a Change in Control with respect to any
Guarantor, all obligations of such Guarantor hereunder shall be relieved in full
and such Guarantor shall cease to be subject to any obligation hereunder or to
be deemed a "Guarantor" upon the effectiveness of such Change in Control.
(c) Each Guarantor hereby waives any right to which it may be entitled
to have its obligations hereunder divided among the Guarantors, such that such
Guarantor's obligations would be less than the full amount claimed. Each
Guarantor hereby waives any right to which it may be entitled to have the assets
of the Borrower first be used and depleted as payment of the Borrower's or such
Guarantor's obligations hereunder prior to any amounts being claimed from or
paid by such Guarantor hereunder. Each Guarantor hereby waives any right to
which it may be entitled to require that the Borrower be sued prior to an action
being initiated against such Guarantor.
(d) Each Guarantor further agrees that its guarantee herein constitutes
a guarantee of payment when due (and not a guarantee of collection) and waives
any right to require that any resort be had by the Holder to any security held
for payment of the Guaranteed Obligations.
(e) The obligations of each Guarantor hereunder shall not be subject to
any reduction, limitation, impairment or termination for any reason (other than
payment of the Guaranteed Obligations in full), including any claim of waiver,
release, surrender, alteration or compromise of any Guaranteed Obligation, and
shall not be subject to any defense of setoff, counterclaim, recoupment or
termination whatsoever or by reason of the invalidity, illegality or
unenforceability of the Guaranteed Obligations or otherwise. Without limiting
the generality of the foregoing, the obligations of each Guarantor herein shall
not be discharged or impaired or otherwise affected by the failure of the Holder
to assert any claim or demand or to enforce any remedy under this Note or any
other agreement, by any waiver or modification of any provision thereof by any
default, failure or delay, willful or otherwise, in the performance of the
Guaranteed Obligations, or by any other act or omission or delay to do any other
act that may or might in any manner or to any extent vary the risk of any
Guarantor or that would otherwise operate as a discharge of any Guarantor as a
matter of law or equity.
(f) Each Guarantor agrees that its guarantee shall remain in full force
and effect until payment in full of all the Guaranteed Obligations. Each
Guarantor further agrees that its guarantee herein shall continue to be
effective or be reinstated, as the case may be, if at any time payment, or any
part thereof, of principal of or interest on any Guaranteed Obligation is
rescinded or must otherwise be restored by the Holder upon the bankruptcy or
reorganization of the Borrower or otherwise.
(g) In furtherance of the foregoing and not in limitation of any other
right which the Holder has at law or in equity against any Guarantor by virtue
hereof, upon the failure of the Borrower to pay the Guaranteed Obligation when
and as the same shall become due, whether at maturity, by acceleration, by
prepayment or otherwise, each Guarantor hereby promises to and shall, upon
receipt of written demand by the Holder, forthwith pay, or cause to be paid, in
cash, to the Holder an amount equal to the sum of (i) the unpaid amount of such
Guaranteed Obligations and (ii) accrued and unpaid interest on such Guaranteed
Obligations then due and owing (but only to the extent not prohibited by law).
(h) Each Guarantor agrees that it shall not be entitled to any right of
subrogation in relation to the Holder in respect of any Guaranteed Obligations
guaranteed hereby until payment in full of all Guaranteed Obligations. Each
Guarantor further agrees that, as between it and the Holder, (i) the maturity of
the Guaranteed Obligations guaranteed hereby may be accelerated as provided in
Section 9 for the purposes of any guarantee herein, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of the
Guaranteed Obligations guaranteed hereby, and (ii) in the event of any
declaration of acceleration of such Guaranteed Obligations as provided in
Section 10, such Guaranteed Obligations (whether or not due and payable) shall
forthwith become due and payable by such Guarantor for the purposes of this
Section 8.
(i) Each Guarantor also agrees to pay any and all costs and expenses
(including reasonable attorneys' fees and expenses) incurred by the Holder in
enforcing any rights under this Section 8.
(j) Bookham, Inc. shall cause each of its Subsidiaries that (i) has not
executed and delivered this Note "as Guarantor" and (ii) is or becomes a
Principal Borrower Subsidiary to execute and deliver such instruments and do
such acts as may be necessary for such Principal Borrower Subsidiary to become a
Guarantor under this Section 8.
(k) Upon request of the Holder, each Guarantor shall execute and
deliver such further instruments and do such further acts as may be reasonably
necessary or proper to carry out more effectively the purpose of this Note.
(l) In the case of any payments made by a Guarantor pursuant to this
Section 8, the following shall apply:
(i) All such payments shall be made to the Holder without
withholding or deduction for, or on account of, Taxes (other than those
withholdings or deductions to which payments by the Borrower are subject). In
the event any withholding or deduction for Taxes is required by law or by the
interpretation or administration thereof by the relevant governmental authority,
such Guarantor shall pay such additional amounts as may be necessary in order
that the net amounts received by the Holder after such withholding or deduction
may not be less than the net amount that would have been received by the Holder
from the Borrower.
(ii) If the Holder is entitled to claim an exemption from, or a
reduction of, any withholding or deduction for or on account of Taxes under any
applicable law or treaty, the Holder hereby covenants and agrees that it will
take all reasonably necessary steps to secure the benefit of such exemption or
reduction. Further, if the Holder is entitled to claim a refund of any
withholding or deduction of or on account of Taxes under any applicable law or
treaty, the Holder hereby covenants and agrees that it will take all reasonably
necessary steps to secure such refund, and (to the extent that such Guarantor
has made a payment of an additional amount pursuant to this Section 8(l))
account for such refund to such Guarantor.
(iii) If (and for so long as) the Holder fails to satisfy its
obligations under clause (ii) of this Section 8(l), such Guarantor shall not be
required to make any payments under this Section 8 to the extent that such
payments could have been avoided if the Holder had complied with its obligations
under clause (ii) of this Section 8(l). For example (and solely for purposes of
illustration), if payments by such Guarantor are subject to a withholding tax of
15%, but under the applicable tax treaty the Holder is entitled to claim a
reduction of withholding tax from 15% to 10%, then, if the Holder fails to
comply with its obligations under clause (ii) of this Section 8(l), such
Guarantor shall be obligated to make payments under clause (i) of this Section
8(l) on the reduced 10% withholding tax and shall have no obligation under
clause (i) of this Section 8(l) with respect to the 5% withholding tax that
could have been avoided if the Holder had complied with its obligations under
clause (ii) of this Section 8(l).
Section 9. Events of Default.
(a) An "Event of Default" occurs if:
(i) any default shall be made in the payment of the principal of
or cash interest on the Series B-1 Note, when and as the same shall become due
and payable, whether at the due date thereof, upon acceleration thereof or
otherwise;
(ii) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity; provided that this
clause (ii) shall not apply in the case of (A) voluntary or mandatory
prepayments under the Series A-2 Note or the Series B-1 Note that are paid in
full when due or (B) any secured Indebtedness that becomes due as a result of
the voluntary sale or transfer of the property or assets securing such
Indebtedness;
(iii) an Event of Default (as defined in the Series A-2 Note)
occurs with respect to the Series A-2 Note;
(iv) Bookham, Inc. or any of its Subsidiaries defaults in any
material respect in its obligations hereunder (other than any obligations for
the payment of principal or interest) or in any of the Security Agreements, the
Restructuring Agreement or the agreements delivered pursuant thereto; provided
that such default shall not have been cured within twenty (20) Business Days
after written notice of such default;
(v) Bookham, Inc. or the Borrower becomes subject to a Bankruptcy
Event;
(vi) (A) except as permitted by this Note, any of the Security
Agreements or other documents delivered pursuant thereto or pursuant to any
other documents delivered or to be delivered, as applicable, pursuant to the
Restructuring Agreement shall be held in any judicial proceeding to be
unenforceable or invalid, or shall cease for any reason to be in full force and
effect and such default continues for twenty (20) Business Days after written
notice, or (B) the Borrower or any Guarantor, or anyone acting on behalf of the
Borrower or any Guarantor, shall deny or disaffirm its obligations under any of
the Security Agreements or other documents delivered pursuant thereto or
pursuant to any other documents delivered or to be delivered, as applicable,
pursuant to the Restructuring Agreement;
(vii) Bookham, Inc. and its Subsidiaries, on a consolidated
basis, fail to maintain a Cash Balance of at least U.S.$25,000,000, as reported
pursuant to Section 7(b)(ii) or Section 7(b)(iii), and Bookham, Inc. receives
written notice from the Holder of such failure;
(viii) Bookham, Inc. fails to provide the information required by
Section 7(b)(ii) or Section 7(b)(iii) within the time periods set forth in such
sections; provided that Bookham, Inc. may cure such default by providing the
information required by Section 7(b)(ii) or Section 7(b)(iii), as applicable,
within 3 calendar days of such default if the most recent report delivered by
Bookham, Inc. pursuant to Section 7(b)(i) both (A) was delivered within the time
period set forth in such section and (B) reported an amount of Bank Cash in
excess of U.S.$35,000,000;
(ix) Bookham, Inc. fails to provide the information required by
Section 7(c) within the time period set forth in such section; provided that
Bookham, Inc. may cure such default by providing the information required by
Section 7(c) within 10 calendar days of such default.
(b) If an Event of Default occurs, then the Holder of this Note may, by
written notice to the Borrower, declare this Note to be forthwith due and
payable, whereupon this Note shall become forthwith due and payable, both as to
principal and interest, without presentment, demand, protest, or other notice of
any kind, all of which are hereby expressly waived.
Section 10. Notices of Material Events.
(a) The Borrower shall furnish the Holder written notice of the
occurrence of any Event of Default or any development or circumstance that has,
or could reasonably be expected to have, a Borrower Material Adverse Effect (as
defined below) promptly upon the Borrower's obtaining knowledge thereof.
(b) Each notice delivered under this Section 10 shall be accompanied by
a statement of an executive officer of the Borrower setting forth the details of
the event, development or circumstance requiring such notice and any action
taken or proposed to be taken with respect thereto.
Section 11. Extension of Maturity.
Should the principal of and interest on this Note become due and
payable on other than a Business Day, the maturity hereof shall be extended to
the next succeeding Business Day, and interest shall be payable at the rate per
annum herein specified during such extension.
Section 12. Successors and Assigns.
The provisions of this Note shall be binding upon and inure to the
benefit of the Borrower and the Guarantors and their respective successors and
permitted assigns and the Holder of this Note and its successors and assigns.
None of the obligations of the Borrower or any Guarantor hereunder may be
assigned without the prior written consent of the Holder. Subject to applicable
federal and state securities Laws, this Note is transferable and assignable by
the Holder (or its successor) only to a Subsidiary of the Holder (or back to the
Holder). Any transfer of this Note may be made only upon surrender of the
original Note for registration of transfer, duly endorsed, or accompanied by a
duly executed written instrument of transfer.
Section 13. No Waiver.
Neither a failure nor a delay on the part of the Holder in exercising
any right, power or privilege under this Note shall operate as a waiver thereof,
nor shall a single or partial exercise thereof preclude any other or further
exercise of any right, power or privilege. The rights, remedies and benefits of
the Holder herein expressly specified are cumulative and not exclusive of any
other rights remedies or benefits which either may have under this Note at law,
in equity, by statute or otherwise.
Section 14. Governing Law.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK. This Note was negotiated and executed in the
State and County of New York. All actions, suits and proceedings arising out of
relating to this Note shall be heard and determined exclusively in a New York
state or federal court sitting in the County of New York, and the Holder, the
Borrower and the Guarantors hereby irrevocably submit to the exclusive
jurisdiction of such courts in any such action or proceeding and irrevocably
agree to the laying of venue in such courts and waive the defense of an
inconvenient forum to the maintenance of any such action, suit or proceeding.
Section 15. Titles and Subtitles.
The titles and subtitles used in this Note are used for convenience
only and are not to be considered in construing or interpreting this Note.
Section 16. Definitions. All accounting and financial terms not defined
herein shall be construed in accordance with U.S. generally accepted accounting
principles, as in effect from time to time. In addition, as used in this Note,
unless otherwise specified, the following terms have the meanings specified
below:
"Acquisition Agreement" means the Acquisition Agreement between Nortel
Networks Corporation and the Borrower dated as of October 7, 2002 (as amended
through the date hereof).
"Bank Cash" means cash held in any deposit account in the name of
Bookham, Inc. or any of its Subsidiaries.
"Bankruptcy Event" has the meaning set forth in the Acquisition
Agreement.
"Borrower" has the meaning set forth in Section 1(a).
"Borrower Material Adverse Effect" means any long-term or short-term
effect that is or is reasonably likely to be materially adverse to (i) the
business, results of operations, assets, liabilities or condition (financial or
otherwise) of the Borrower and its Subsidiaries, taken as a whole, or (ii) the
ability of the Borrower and its Subsidiaries to perform their respective
obligations under the Security Documents and the Supply Agreement between the
Borrower and Nortel Networks Corporation dated as of the date hereof, but in
each case shall not include any effect arising out of or resulting from (A) a
change in general economic or financial conditions (provided that such changes
do not affect the Borrower and its Subsidiaries, taken as a whole, in a
materially disproportionate manner in comparison to other companies engaged in
the same industry) or (B) a change, condition or circumstance in the industry in
which the Borrower and its Subsidiaries operate (provided that such changes do
not affect the Borrower and its Subsidiaries, taken as a whole, in a materially
disproportionate manner in comparison to other companies engaged in the same
industry); provided, however, that (1) any decrease in the market price or
trading volume of the Borrower's securities or any shareholder litigation
resulting therefrom shall not, in and of itself, constitute a Borrower Material
Adverse Effect and (2) the failure of the Borrower to achieve internal or
external financial forecasts or projections shall not, in and of itself,
constitute a Borrower Material Adverse Effect.
"Business Day" means any day that is not a Saturday, Sunday or other
day on which banks are required or authorized by law to be closed in New York,
New York; London, England or Xxxxxxx, Xxxxxxx, Xxxxxx.
"Cash Balance" of any party as of a reference date means the amount of
Bank Cash, marketable securities and other cash equivalents of such party as of
the reference date (which, for the avoidance of doubt, shall be less any bank
checks issued and not cleared as of such reference date).
"Change of Control" has the meaning set forth in the Acquisition
Agreement.
"Collateral" means all of the collateral described in the Security
Agreements and the documents delivered pursuant thereto and pursuant to certain
other documents delivered or to be delivered, as applicable, pursuant to the
Restructuring Agreement.
"Control" or "Controlled" means, as to any Person, the power to direct
or cause the direction of the management and policies of such Person, whether
through the ownership of voting securities, by contract or otherwise.
"Equity Interest" of any Person means any and all common stock,
preferred stock and any other class of capital stock of, and any partnership or
limited liability company interests in, such Person or any other similar
interests in such Person if such Person is not a corporation, partnership or
limited liability company and includes any interest that is convertible into or
exchangeable or exercisable for any Equity Interest and any other right to
acquire any Equity Interest.
"Event of Default" has the meaning set forth in Section 9(a).
"Guaranteed Obligations" has the meaning set forth in Section 8.
"Guarantors" means (i) subject to the last sentence of Section 8(b),
those Subsidiaries of Bookham, Inc. that have executed and delivered this Note
on the date hereof "as Guarantor" and (ii) such other Subsidiaries of Bookham,
Inc. that have guaranteed the Series B-1 Note pursuant to Section 8(j).
"Highest Lawful Rate" means the maximum non-usurious rate of interest,
as in effect from time to time, which may be charged, contracted for, reserved,
received or collected by the Holder in connection with this Note under
applicable law.
"Holder" means the Person named as the Lender or such Person's
permitted transferee or assign.
"Indebtedness" means any obligation in respect of (i) borrowed money,
(ii) capitalized lease obligations, (iii) obligations under interest rate
agreements and currency agreements, (iv) guarantees of any obligation of any
third Person, (v) letters of credit and (vi) indemnities or performance bonds.
"Initial Net Proceeds" means the first $50,000,000 of the aggregate Net
Proceeds of all Qualified Financings consummated after the date hereof.
"Interest Payment Date" means each February 8, May 8, August 8 and
November 8 beginning on February 8, 2003.
"Interest Rate" means 7.00% per annum; provided that such interest rate
shall increase by 0.25% on each Interest Payment Date, up to a maximum rate of
10.00% per annum; provided further that anything herein to the contrary
notwithstanding, if during any period for which interest is computed hereunder,
the amount of interest computed on the basis provided for in this Note, together
with all fees, charges and other payments that are treated as interest under
applicable law, as provided for herein or in any other document executed in
connection herewith, would exceed the amount of such interest computed on the
basis of the Highest Lawful Rate, neither the Borrower nor any Guarantor shall
be obligated to pay, and the Holder shall not be entitled to charge, collect,
receive, reserve or take, interest in excess of the Highest Lawful Rate, and
during any such period the interest payable hereunder shall be computed on the
basis of the Highest Lawful Rate.
"Lender" has the meaning set forth in Section 1(a).
"Liens" means any mortgage, easement, tenancy, right-of-way,
restriction, deed or trust, pledge, hypothecation, security interest,
encumbrance, claim, lien, license, lease or charge of any kind.
"Material Indebtedness" means any Indebtedness of Bookham, Inc. or any
of its Subsidiaries having an outstanding principal amount of at least
U.S.$5,000,000, individually or in the aggregate, whether such Indebtedness now
exists or shall hereafter be created.
"Maturity Date" has the meaning set forth in Section 1(a).
"Net Proceeds" means, with respect to the sale, transfer or other
disposition of any asset, the issuance of any security or any financing, the
aggregate amount of cash proceeds (including any other consideration that is
converted into cash) therefrom, in each case net of any customary attorneys'
fees, accountants' fees, underwriters' or placement agents' fees, discounts or
commissions and brokerage and consultant fees actually incurred in connection,
and contemporaneously, therewith.
"Note" means this Note and any replacement Note executed and delivered
by the Borrower and the Guarantors pursuant to Section 5 hereof.
"Permitted Liens" has the meaning set forth in the Security Agreements.
"Person" means any natural person, general or limited partnership,
corporation, limited liability company, firm, association or other legal entity.
"Principal Borrower Subsidiary" means any Subsidiary of Bookham, Inc.
the assets of which have an aggregate fair market value equal to or greater than
$1,000,000.
"Qualified Financing" means (i) any issuance by Bookham, Inc. or any of
its Subsidiaries of any Equity Interests and any Indebtedness incurred by
Bookham, Inc. or any of its Subsidiaries that is convertible into or
exchangeable or exercisable for any Equity Interests (other than the issuance of
shares of common stock of Bookham, Inc. or options with respect thereto to
employees, directors or officers of Bookham, Inc. or any Subsidiary of Bookham,
Inc. in the ordinary course consistent with past practice) and (ii) any
"sale-leaseback" or similar transaction involving the Collateral located in
Shenzhen, China.
"Representatives" means, with respect to a Person, such Person's
directors, officers, employees, agents or advisors (including, without
limitation, attorneys, accountants, consultants, bankers, financial advisors and
members of advisory boards).
"Restructuring Agreement" means the Restructuring Agreement among
Bookham Technology plc, Bookham, Inc., the subsidiaries of Bookham, Inc. whose
names appear on the signature pages thereto, Nortel Networks UK Limited and
Nortel Networks Corporation, dated as of December 2, 2004.
"Security Agreements" means the Security Agreements (as defined in the
Acquisition Agreement), each as amended and restated as of the date hereof.
"Series A-2 Note" means the Amended and Restated Series A-2 Senior
Secured Note due November 8, 2007 in an original principal amount of
U.S.$20,000,000 issued by Bookham, Inc.
"Series B-1 Note" means the Amended and Restated Series B-1 Senior
Secured Note due November 8, 2006 in an original aggregate principal amount of
U.S.$30,000,000 issued by Bookham Technology plc.
"Subsequent Net Proceeds" means the excess over $50,000,000 of Net
Proceeds of all Qualified Financings consummated after the date hereof.
"Subsidiary" of any Person means any corporation, partnership, joint
venture, limited liability company, trust or estate of which (or in which) more
than 50% of (a) the issued and outstanding capital stock (or other Equity
Interest) having ordinary voting power to elect a majority of the board of
directors (or similar governing body) of such entity or (b) the interest in the
capital or profits of such entity is at the time directly or indirectly owned or
Controlled by such Person, by such Person and one or more of its other
Subsidiaries or by one or more of such Person's other Subsidiaries.
"Taxes" has the meaning set forth in the Acquisition Agreement.
IN WITNESS WHEREOF, each of the Borrower and the Guarantors
has duly executed and delivered this Note as of the date first written above.
BOOKHAM TECHNOLOGY PLC, as Borrower
By:
-------------------------------------
Name:
Title:
NEW FOCUS, INC., as Guarantor
By:
-------------------------------------
Name:
Title:
XXXXXX, INC., as Guarantor
By:
-------------------------------------
Name:
Title:
BOOKHAM (US) INC., as Guarantor
By:
-------------------------------------
Name:
Title:
BOOKHAM (CANADA) INC., as Guarantor
By:
-------------------------------------
Name:
Title:
BOOKHAM (SWITZERLAND) AG, as Guarantor
By:
-------------------------------------
Name:
Title:
IGNIS OPTICS, INC., as Guarantor
By:
-------------------------------------
Name:
Title:
BOOKHAM, INC., as Guarantor
By:
-------------------------------------
Name:
Title:
Exhibit B
AMENDED AND RESTATED
SERIES A-2 NOTE
THE SECURITY REPRESENTED BY THIS INSTRUMENT HAS NOT BEEN REGISTERED UNDER ANY
APPLICABLE SECURITIES LAW. THIS SECURITY CANNOT BE SOLD OR OTHERWISE TRANSFERRED
UNLESS IT IS REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933 OR THE BORROWER IS
FURNISHED WITH AN ACCEPTABLE OPINION OF COUNSEL THAT AN EXEMPTION FROM
REGISTRATION IS AVAILABLE.
THIS NOTE HAS NOT BEEN QUALIFIED BY THE FILING OF A PROSPECTUS UNDER APPLICABLE
CANADIAN SECURITIES LAWS. BY ITS ACCEPTANCE OF THIS NOTE, THE HOLDER REPRESENTS
THAT IT IS AN ACCREDITED INVESTOR, AS SUCH TERM IS DEFINED IN ONTARIO SECURITIES
COMMISSION RULE 45-501, AND AGREES THAT THIS NOTE IS NOT BEING ACQUIRED WITH A
VIEW TO DISTRIBUTION.
Series A-2 Senior Secured Note Due 2007
U.S.$20,000,000 Date ___________
Section 1. General.
(a) Bookham, Inc., a Delaware corporation (the "Borrower"), for value
received, hereby promises to pay, subject to the further provisions hereof, to
Nortel Networks UK Limited (the "Lender"), the principal amount of TWENTY
MILLION U.S. DOLLARS (U.S.$20,000,000.00), as such principal amount may be
reduced by prepayments pursuant to Section 3 and Section 4 of this Note (as
defined below), on November 8, 2007 (such date, the "Maturity Date"), on
presentation and surrender of this Note to the Borrower, in such coin or
currency of the United States of America as at the time of payment shall be
legal tender therein for the payment of public and private debts.
(b) The Borrower further agrees to pay interest on the outstanding
principal amount hereof from time to time from the date hereof at the Interest
Rate (as defined below), payable in arrears on each Interest Payment Date (as
defined below) and on the Maturity Date. Interest shall be calculated on the
basis of a 360-day year of twelve 30-day months.
(c) The Lender shall act on behalf of and as agent for all present and
future Holders (as defined below) and shall exclusively exercise or enforce any
and all rights, powers, privileges and remedies hereunder. If the Holder is not
the Lender, the Borrower and the Guarantors shall satisfy any requirement
hereunder to deliver to the Holder any notice or payment by delivering such
notice or payment to the Lender rather than the Holder.
Section 2. Security Interest, Retention of Title and Limitation on
Liens.
(a) As security for the Indebtedness (as defined below), and as
security for the agreements and other obligations of the Borrower and the
Guarantors (as defined below) hereunder and in order to secure the full and
punctual payment of their respective obligations hereunder in accordance with
the terms set forth herein, (i) the Borrower has pledged, and has caused certain
of its Subsidiaries to pledge, and will pledge and cause certain of its
Subsidiaries to pledge, the Collateral (as defined below) pursuant to the
Security Agreements and the documents delivered pursuant thereto and pursuant to
certain other documents delivered or to be delivered, as applicable, pursuant to
the Restructuring Agreement, and (ii) the Seller (as defined in the Acquisition
Agreement) and its Subsidiaries have retained title to certain of the Assets (as
defined in the Acquisition Agreement) pursuant to the Xxxx of Sale, dated as of
November 8, 2002 delivered by Seller and certain of its Subsidiaries to Bookham
(Switzerland) AG (as such title retention arrangements have been modified by
certain documents and agreements delivered or to be delivered, as applicable,
pursuant to the Restructuring Agreement).
(b) None of the Borrower and the Guarantors shall (and none of them
shall permit any of its Subsidiaries to) create, incur, assume or permit to
exist any Lien on any of the Collateral, except for Permitted Liens.
Section 3. Voluntary Prepayment.
This Note shall be prepayable, at the option of the Borrower, in whole
or in part, on one or more occasions, on not less than two (2) Business Days (as
defined below) and not more than twenty (20) calendar days prior written notice
to the Holder, at a price in cash equal to 100% of the outstanding principal
amount to be prepaid, plus accrued and unpaid interest to such prepayment date.
Section 4. Mandatory Prepayment.
(a) Within one (1) Business Day after the consummation of any Qualified
Financing (as defined below), the Borrower shall prepay in cash on a pro rata
basis by wire transfer of immediately available funds the outstanding
obligations under the Series A-2 Note in an amount equal to the Net Proceeds (as
defined below) of such Qualified Financing to the extent such Net Proceeds
constitute all or part of the Threshold Net Proceeds (as defined below).
(b) Within one (1) Business Day after the consummation of any sale,
distribution, assignment, lease, transfer or other disposition in violation of
Section 7(d), the Borrower shall prepay on a pro rata basis by wire transfer of
immediately available funds the outstanding obligations under the Series A-2
Note in an amount equal to the Net Proceeds of such sale, distribution,
assignment, lease, transfer or other disposition to the extent such amount is
not required to be applied to prepay the Series B-1 Note.
(c) Within one (1) Business Day after a Change of Control (as defined
below) of the Borrower, the Borrower shall prepay the Series A-2 Note in full at
a price in cash equal to 100% of the outstanding principal amount, plus accrued
and unpaid interest to such prepayment date.
Section 5. Replacement of Note.
At the request of the Holder upon receipt by the Borrower of evidence
satisfactory to it of the loss, theft, destruction or mutilation of this Note
and, in case of loss, theft or destruction, of indemnity reasonably satisfactory
to it, or, in the case of mutilation, upon surrender and cancellation of this
Note, and in all cases upon reimbursement to the Borrower of all reasonable
expenses incidental thereto, the Borrower and the Guarantors shall make and
deliver to the Holder a replacement Note of like tenor in lieu of this Note.
Section 6. Amendments, Modifications and Waivers.
No covenant, agreement or condition contained in this Note may be
amended or modified and no right hereunder may be waived (either generally or in
a particular instance and either retroactively or prospectively) other than by a
written instrument or agreement executed by the Holder and the Borrower. Any
such amendment, modification or waiver shall be binding upon each present and
future holder of this Note and upon the Borrower. Upon the request of the
Borrower, the Holder shall submit this Note to the Borrower so that this Note be
marked to indicate such amendment, modification or waiver, and any Note issued
thereafter shall bear a similar notation referring to any such amendment,
modification or continuing waiver.
Section 7. Existence; Conduct of Business; Report on Cash Balance and
Forecast of Cash Flows; Sales of Assets; Confidentiality; Trading in Securities.
(a) Each of the Borrower and the Guarantors shall do or cause to be
done all things necessary to preserve, renew and keep in full force and effect
its legal existence and the rights, contracts, licenses, permits, privileges,
franchises, patents, copyrights, trademarks and trade names that are, in the
Borrower's reasonable judgment, material to the conduct of its business.
(b) Provided that from time to time the Holder may instruct the
Borrower to discontinue the delivery of reports pursuant to this Section 7(b),
the Borrower shall deliver the following reports to the Holder via email to
xxxxxxx@xxxxxxxxxxxxxx.xxx and via facsimile at 000-000-0000 (or such other
email address or facsimile number as the Holder shall designate in writing):
(i) By Tuesday of the following calendar week, for each calendar
week ending after the date of this Note, the Borrower shall provide the Holder
with a report, on a consolidated basis, of the amount of Bank Cash (as defined
below), as of the end of the day on Friday of such calendar week.
(ii) By the 10th day of each calendar month ending after the date
of this Note, the Borrower shall provide the Holder with a report stating the
Cash Balance (as defined below) of the Borrower and its Subsidiaries, on a
consolidated basis, as of the end of the prior calendar month (or the nearest
Business Day thereafter if the end of the calendar month is not a Business Day).
(iii) By the 25th day of each calendar month ending after the
date of this Note, the Borrower shall provide the Holder with a report stating
the Cash Balance of the Borrower and its Subsidiaries, on a consolidated basis,
as of the 15th day of the then current calendar month or, if the 15th day is not
a Friday, the nearest Friday to the 15th day.
(c) Within 15 Business Days of the end of each calendar month ending
after the date of this Note, the Borrower shall provide the Holder with (i) a
statement of operations, balance sheet and statement of cashflows prepared in
accordance with the Borrower's internal format for the Borrower and its
Subsidiaries, on a consolidated basis, for the previous calendar month and (ii)
a financial forecast of the Borrower and its Subsidiaries, on a consolidated
basis, for the current quarter and for the four subsequent quarters, consisting
of a statement of operations, balance sheet and statement of cashflows prepared
in accordance with the Borrower's internal format, as well as qualitative
analysis of such forecasts and any changes from prior forecasts provided to the
Holder in accordance with this Section 7(c); provided, however, that from time
to time the Holder may instruct the Borrower to discontinue the delivery of
reports pursuant to this Section 7(c).
(d) Neither the Borrower nor any Guarantor shall distribute, sell,
assign, transfer or otherwise dispose of any Collateral without the prior
written consent of the Holder while the Guaranteed Obligations are outstanding,
except for the disposition of equipment having a fair market value not to exceed
$5,000,000 in the aggregate.
(e) The Holder and its Representatives shall hold in confidence, and
shall not disclose to any person outside its organization, any of the
information provided by the Borrower pursuant to Section 7(b) or Section 7(c)
without the prior written consent of the Borrower. The Holder shall disclose
such information only to persons within its organization who have a need to know
such information in the course of the performance of their duties. The Holder
will promptly report to the Borrower any actual violation of the terms of this
Section 7(e) and will take all reasonable further steps requested by the
Borrower to prevent, control or remedy any such violation. The obligations of
the Holder in this Section 7(e) shall not apply, and the Holder shall have no
further obligations, with respect to (i) any information that is known to the
Holder prior to the date of disclosure of such information pursuant to Sections
7(b) or 7(c) hereof or is publicly available when provided or that thereafter
becomes publicly available other than through a breach by the Holder of this
Section 7(e), or (ii) any information that the Holder or its Representatives are
required to disclose to or by a court, governmental or regulatory agency, stock
exchange or similar body, or as otherwise required by applicable law, provided
that the Holder exercises its reasonable efforts to preserve the confidentiality
of the information, including, without limitation, by cooperating with the
Borrower to obtain an appropriate protective order or other reliable assurance
that confidential treatment will be accorded the information by the person or
entity receiving such information.
(f) The Holder acknowledges that it is aware applicable securities laws
prohibit any person who is aware of material, non-public information about a
company obtained directly or indirectly from that company from purchasing or
selling securities of such company or from communicating such information to any
other person under circumstances in which it is reasonably foreseeable that such
person is likely to purchase or sell such securities and agrees that it will not
do so while in possession of any material nonpublic information about the
Borrower.
Section 8. Guarantees.
(a) Each Guarantor hereby jointly and severally unconditionally
guarantees, as a primary obligor and not merely as a surety, to the Holder the
full and punctual payment when due, whether at the Maturity Date, by
acceleration, by prepayment or otherwise, of all obligations of the Borrower
under this Note, whether for payment of principal or interest (including
interest accruing during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding) in respect of the Note and all other monetary
obligations of the Borrower under this Note, whether for fees, expenses,
indemnification or otherwise (all the foregoing being hereinafter collectively
called the "Guaranteed Obligations"). Each Guarantor further agrees that the
Guaranteed Obligations may be extended or renewed, in whole or in part, pursuant
to the terms of Section 6, without notice to or further assent from each such
Guarantor, and that each such Guarantor shall remain bound under this Section 8
notwithstanding any extension or renewal of any Guaranteed Obligation.
(b) Each Guarantor waives presentation to, demand of payment from and
protest to the Borrower of any of the Guaranteed Obligations and also waives
notice of acceptance of its guarantee and notice of protest for nonpayment. Each
Guarantor waives notice of any default under this Note. The obligations of each
Guarantor hereunder shall not be affected by (i) the failure of the Holder to
assert any claim or demand or to enforce any right or remedy against the
Borrower or any other Person (as defined below) under this Note or any other
agreement or otherwise; (ii) any extension of the repayment terms of the
Guaranteed Obligations; (iii) any rescission, waiver, amendment or modification
of any of the terms or provisions of this Note or any other agreement; (iv) the
failure to perfect any security interest in, or the release of, any security
held by the Holder for the Guaranteed Obligations or any of them; or (v) the
failure of the Holder to exercise any right or remedy against any other
Guarantor. In the event that there is a Change in Control with respect to any
Guarantor, all obligations of such Guarantor hereunder shall be relieved in full
and such Guarantor shall cease to be subject to any obligation hereunder or to
be deemed a "Guarantor" upon the effectiveness of such Change in Control.
(c) Each Guarantor hereby waives any right to which it may be entitled
to have its obligations hereunder divided among the Guarantors, such that such
Guarantor's obligations would be less than the full amount claimed. Each
Guarantor hereby waives any right to which it may be entitled to have the assets
of the Borrower first be used and depleted as payment of the Borrower's or such
Guarantor's obligations hereunder prior to any amounts being claimed from or
paid by such Guarantor hereunder. Each Guarantor hereby waives any right to
which it may be entitled to require that the Borrower be sued prior to an action
being initiated against such Guarantor.
(d) Each Guarantor further agrees that its guarantee herein constitutes
a guarantee of payment when due (and not a guarantee of collection) and waives
any right to require that any resort be had by the Holder to any security held
for payment of the Guaranteed Obligations.
(e) The obligations of each Guarantor hereunder shall not be subject to
any reduction, limitation, impairment or termination for any reason (other than
payment of the Guaranteed Obligations in full), including any claim of waiver,
release, surrender, alteration or compromise of any Guaranteed Obligation, and
shall not be subject to any defense of setoff, counterclaim, recoupment or
termination whatsoever or by reason of the invalidity, illegality or
unenforceability of the Guaranteed Obligations or otherwise. Without limiting
the generality of the foregoing, the obligations of each Guarantor herein shall
not be discharged or impaired or otherwise affected by the failure of the Holder
to assert any claim or demand or to enforce any remedy under this Note or any
other agreement, by any waiver or modification of any provision thereof by any
default, failure or delay, willful or otherwise, in the performance of the
Guaranteed Obligations, or by any other act or omission or delay to do any other
act that may or might in any manner or to any extent vary the risk of any
Guarantor or that would otherwise operate as a discharge of any Guarantor as a
matter of law or equity.
(f) Each Guarantor agrees that its guarantee shall remain in full force
and effect until payment in full of all the Guaranteed Obligations. Each
Guarantor further agrees that its guarantee herein shall continue to be
effective or be reinstated, as the case may be, if at any time payment, or any
part thereof, of principal of or interest on any Guaranteed Obligation is
rescinded or must otherwise be restored by the Holder upon the bankruptcy or
reorganization of the Borrower or otherwise.
(g) In furtherance of the foregoing and not in limitation of any other
right which the Holder has at law or in equity against any Guarantor by virtue
hereof, upon the failure of the Borrower to pay the Guaranteed Obligation when
and as the same shall become due, whether at maturity, by acceleration, by
prepayment or otherwise, each Guarantor hereby promises to and shall, upon
receipt of written demand by the Holder, forthwith pay, or cause to be paid, in
cash, to the Holder an amount equal to the sum of (i) the unpaid amount of such
Guaranteed Obligations and (ii) accrued and unpaid interest on such Guaranteed
Obligations then due and owing (but only to the extent not prohibited by law).
(h) Each Guarantor agrees that it shall not be entitled to any right of
subrogation in relation to the Holder in respect of any Guaranteed Obligations
guaranteed hereby until payment in full of all Guaranteed Obligations. Each
Guarantor further agrees that, as between it and the Holder, (i) the maturity of
the Guaranteed Obligations guaranteed hereby may be accelerated as provided in
Section 9 for the purposes of any guarantee herein, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of the
Guaranteed Obligations guaranteed hereby, and (ii) in the event of any
declaration of acceleration of such Guaranteed Obligations as provided in
Section 10, such Guaranteed Obligations (whether or not due and payable) shall
forthwith become due and payable by such Guarantor for the purposes of this
Section 8.
(i) Each Guarantor also agrees to pay any and all costs and expenses
(including reasonable attorneys' fees and expenses) incurred by the Holder in
enforcing any rights under this Section 8.
(j) The Borrower shall cause each Subsidiary that (i) has not executed
and delivered this Note "as Guarantor" and (ii) is or becomes a Principal
Borrower Subsidiary to execute and deliver such instruments and do such acts as
may be necessary for such Principal Borrower Subsidiary to become a Guarantor
under this Section 8, including without limitation Bookham Technology plc.
(k) Upon request of the Holder, each Guarantor shall execute and
deliver such further instruments and do such further acts as may be reasonably
necessary or proper to carry out more effectively the purpose of this Note.
(l) In the case of any payments made by a Guarantor pursuant to this
Section 8, the following shall apply:
(i) All such payments shall be made to the Holder without
withholding or deduction for, or on account of, Taxes (other than those
withholdings or deductions to which payments by the Borrower are subject). In
the event any withholding or deduction for Taxes is required by law or by the
interpretation or administration thereof by the relevant governmental authority,
such Guarantor shall pay such additional amounts as may be necessary in order
that the net amounts received by the Holder after such withholding or deduction
may not be less than the net amount that would have been received by the Holder
from the Borrower.
(ii) If the Holder is entitled to claim an exemption from, or a
reduction of, any withholding or deduction for or on account of Taxes under any
applicable law or treaty, the Holder hereby covenants and agrees that it will
take all reasonably necessary steps to secure the benefit of such exemption or
reduction. Further, if the Holder is entitled to claim a refund of any
withholding or deduction of or on account of Taxes under any applicable law or
treaty, the Holder hereby covenants and agrees that it will take all reasonably
necessary steps to secure such refund, and (to the extent that such Guarantor
has made a payment of an additional amount pursuant to this Section 8(l))
account for such refund to such Guarantor.
(iii) If (and for so long as) the Holder fails to satisfy its
obligations under clause (ii) of this Section 8(l), such Guarantor shall not be
required to make any payments under this Section 8 to the extent that such
payments could have been avoided if the Holder had complied with its obligations
under clause (ii) of this Section 8(l). For example (and solely for purposes of
illustration), if payments by such Guarantor are subject to a withholding tax of
15%, but under the applicable tax treaty the Holder is entitled to claim a
reduction of withholding tax from 15% to 10%, then, if the Holder fails to
comply with its obligations under clause (ii) of this Section 8(l), such
Guarantor shall be obligated to make payments under clause (i) of this Section
8(l) on the reduced 10% withholding tax and shall have no obligation under
clause (i) of this Section 8(l) with respect to the 5% withholding tax that
could have been avoided if the Holder had complied with its obligations under
clause (ii) of this Section 8(l).
Section 9. Events of Default.
(a) An "Event of Default" occurs if:
(i) any default shall be made in the payment of the principal of
or cash interest on the Series A-2 Note, when and as the same shall become due
and payable, whether at the due date thereof, upon acceleration thereof or
otherwise;
(ii) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity; provided that this
clause (ii) shall not apply in the case of (A) voluntary or mandatory
prepayments under the Series A-2 Note or the Series B-1 Note that are paid in
full when due or (B) any secured Indebtedness that becomes due as a result of
the voluntary sale or transfer of the property or assets securing such
Indebtedness;
(iii) an Event of Default (as defined in the Series B-1 Note)
occurs with respect to the Series B-1 Note;
(iv) the Borrower or any of its Subsidiaries defaults in any
material respect in its obligations hereunder (other than any obligations for
the payment of principal or interest) or in any of the Security Agreements, the
Restructuring Agreement or the agreements delivered pursuant thereto; provided
that such default shall not have been cured within twenty (20) Business Days
after written notice of such default;
(v) the Borrower becomes subject to a Bankruptcy Event;
(vi) the Borrower and its Subsidiaries, on a consolidated basis,
fail to maintain a Cash Balance of at least U.S.$25,000,000, as reported
pursuant to Section 7(b)(ii) or Section 7(b)(iii), and the Borrower receives
written notice from the Holder of such failure;
(vii) (A) except as permitted by this Note, any of the Security
Agreements or other documents delivered pursuant thereto or pursuant to any
other documents delivered or to be delivered, as applicable, pursuant to the
Restructuring Agreement shall be held in any judicial proceeding to be
unenforceable or invalid, or shall cease for any reason to be in full force and
effect and such default continues for twenty (20) Business Days after written
notice, or (B) the Borrower or any Guarantor, or anyone acting on behalf of the
Borrower or any Guarantor, shall deny or disaffirm its obligations under any of
the Security Agreements or other documents delivered pursuant thereto or
pursuant to any other documents delivered or to be delivered, as applicable,
pursuant to the Restructuring Agreement;
(viii) The Borrower fails to provide the information required by
Section 7(b)(ii) or Section 7(b)(iii) within the time periods set forth in such
sections; provided that Borrower may cure such default by providing the
information required by Section 7(b)(ii) or Section 7(b)(iii), as applicable,
within 3 calendar days of such default if the most recent report delivered by
Borrower pursuant to Section 7(b)(i) both (A) was delivered within the time
period set forth in such section and (B) reported an amount of Bank Cash in
excess of U.S.$35,000,000;
(ix) The Borrower fails to provide the information required by
Section 7(c) within the time period set forth in such section; provided that
Borrower may cure such default by providing the information required by Section
7(c) within 10 calendar days of such default.
(b) If an Event of Default occurs, then the Holder of this Note may, by
written notice to the Borrower, declare this Note to be forthwith due and
payable, whereupon this Note shall become forthwith due and payable, both as to
principal and interest, without presentment, demand, protest, or other notice of
any kind, all of which are hereby expressly waived.
Section 10. Notices of Material Events.
(a) The Borrower shall furnish the Holder written notice of the
occurrence of any Event of Default or any development or circumstance that has,
or could reasonably be expected to have, a Borrower Material Adverse Effect (as
defined below) promptly upon the Borrower's obtaining knowledge thereof.
(b) Each notice delivered under this Section 10 shall be accompanied by
a statement of an executive officer of the Borrower setting forth the details of
the event, development or circumstance requiring such notice and any action
taken or proposed to be taken with respect thereto.
Section 11. Extension of Maturity.
Should the principal of and interest on this Note become due and
payable on other than a Business Day, the maturity hereof shall be extended to
the next succeeding Business Day, and interest shall be payable at the rate per
annum herein specified during such extension.
Section 12. Successors and Assigns.
The provisions of this Note shall be binding upon and inure to the
benefit of the Borrower and the Guarantors and their respective successors and
permitted assigns and the Holder of this Note and its successors and assigns.
None of the obligations of the Borrower or any Guarantor hereunder may be
assigned without the prior written consent of the Holder. Subject to applicable
federal and state securities Laws, this Note is transferable and assignable by
the Holder (or its successor) only to a Subsidiary of the Holder (or back to the
Holder). Any transfer of this Note may be made only upon surrender of the
original Note for registration of transfer, duly endorsed, or accompanied by a
duly executed written instrument of transfer.
Section 13. No Waiver.
Neither a failure nor a delay on the part of the Holder in exercising
any right, power or privilege under this Note shall operate as a waiver thereof,
nor shall a single or partial exercise thereof preclude any other or further
exercise of any right, power or privilege. The rights, remedies and benefits of
the Holder herein expressly specified are cumulative and not exclusive of any
other rights remedies or benefits which either may have under this Note at law,
in equity, by statute or otherwise.
Section 14. Governing Law.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK. This Note was negotiated and executed in the
State and County of New York. All actions, suits and proceedings arising out of
relating to this Note shall be heard and determined exclusively in a New York
state or federal court sitting in the County of New York, and the Holder, the
Borrower and the Guarantors hereby irrevocably submit to the exclusive
jurisdiction of such courts in any such action or proceeding and irrevocably
agree to the laying of venue in such courts and waive the defense of an
inconvenient forum to the maintenance of any such action, suit or proceeding.
Section 15. Titles and Subtitles.
The titles and subtitles used in this Note are used for convenience
only and are not to be considered in construing or interpreting this Note.
Section 16. Definitions. All accounting and financial terms not defined
herein shall be construed in accordance with U.S. generally accepted accounting
principles, as in effect from time to time. In addition, as used in this Note,
unless otherwise specified, the following terms have the meanings specified
below:
"Acquisition Agreement" means the Acquisition Agreement between Nortel
Networks Corporation and Bookham Technology plc dated as of October 7, 2002 (as
amended through the date hereof).
"Bank Cash" means cash held in any deposit account in the name of the
Borrower or any of its Subsidiaries.
"Bankruptcy Event" has the meaning set forth in the Acquisition
Agreement.
"Borrower" has the meaning set forth in Section 1(a).
"Borrower Material Adverse Effect" means any long-term or short-term
effect that is or is reasonably likely to be materially adverse to (i) the
business, results of operations, assets, liabilities or condition (financial or
otherwise) of the Borrower and its Subsidiaries, taken as a whole, or (ii) the
ability of the Borrower and its Subsidiaries to perform their respective
obligations under the Security Documents and the Supply Agreement between the
Borrower and Nortel Networks Corporation dated as of the date hereof, but in
each case shall not include any effect arising out of or resulting from (A) a
change in general economic or financial conditions (provided that such changes
do not affect the Borrower and its Subsidiaries, taken as a whole, in a
materially disproportionate manner in comparison to other companies engaged in
the same industry) or (B) a change, condition or circumstance in the industry in
which the Borrower and its Subsidiaries operate (provided that such changes do
not affect the Borrower and its Subsidiaries, taken as a whole, in a materially
disproportionate manner in comparison to other companies engaged in the same
industry); provided, however, that (1) any decrease in the market price or
trading volume of the Borrower's securities or any shareholder litigation
resulting therefrom shall not, in and of itself, constitute a Borrower Material
Adverse Effect and (2) the failure of the Borrower to achieve internal or
external financial forecasts or projections shall not, in and of itself,
constitute a Borrower Material Adverse Effect.
"Business Day" means any day that is not a Saturday, Sunday or other
day on which banks are required or authorized by law to be closed in New York,
New York; London, England or Xxxxxxx, Xxxxxxx, Xxxxxx.
"Cash Balance" of any party as of a reference date means the amount of
Bank Cash, marketable securities and other cash equivalents of such party as of
the reference date (which, for the avoidance of doubt, shall be less any bank
checks issued and not cleared as of such reference date).
"Change of Control" has the meaning set forth in the Acquisition
Agreement.
"Collateral" means all of the collateral described in the Security
Agreements and the documents delivered pursuant thereto and pursuant to certain
other documents delivered or to be delivered, as applicable, pursuant to the
Restructuring Agreement.
"Control" or "Controlled" means, as to any Person, the power to direct
or cause the direction of the management and policies of such Person, whether
through the ownership of voting securities, by contract or otherwise.
"Equity Interest" of any Person means any and all common stock,
preferred stock and any other class of capital stock of, and any partnership or
limited liability company interests in, such Person or any other similar
interests in such Person if such Person is not a corporation, partnership or
limited liability company and includes any interest that is convertible into or
exchangeable or exercisable for any Equity Interest and any other right to
acquire any Equity Interest.
"Event of Default" has the meaning set forth in Section 9(a).
"Guaranteed Obligations" has the meaning set forth in Section 8.
"Guarantors" means (i) subject to the last sentence of Section 8(b),
those Subsidiaries of the Borrower that have executed and delivered this Note on
the date hereof "as Guarantor" and (ii) such other Subsidiaries of the Borrower
that have guaranteed the Series A-2 Note pursuant to Section 8(j).
"Highest Lawful Rate" means the maximum non-usurious rate of interest,
as in effect from time to time, which may be charged, contracted for, reserved,
received or collected by the Holder in connection with this Note under
applicable law.
"Holder" means the Person named as the Lender or such Person's
permitted transferee or assign.
"Indebtedness" means any obligation in respect of (i) borrowed money,
(ii) capitalized lease obligations, (iii) obligations under interest rate
agreements and currency agreements, (iv) guarantees of any obligation of any
third Person, (v) letters of credit and (vi) indemnities or performance bonds.
"Interest Payment Date" means each February 8, May 8, August 8 and
November 8 beginning on November 8, 2004.
"Interest Rate" means 4.00% per annum; provided that anything herein to
the contrary notwithstanding, if during any period for which interest is
computed hereunder, the amount of interest computed on the basis provided for in
this Note, together with all fees, charges and other payments that are treated
as interest under applicable law, as provided for herein or in any other
document executed in connection herewith, would exceed the amount of such
interest computed on the basis of the Highest Lawful Rate, neither the Borrower
nor any Guarantor shall be obligated to pay, and the Holder shall not be
entitled to charge, collect, receive, reserve or take, interest in excess of the
Highest Lawful Rate, and during any such period the interest payable hereunder
shall be computed on the basis of the Highest Lawful Rate.
"Lender" has the meaning set forth in Section 1(a).
"Liens" means any mortgage, easement, tenancy, right-of-way,
restriction, deed or trust, pledge, hypothecation, security interest,
encumbrance, claim, lien, license, lease or charge of any kind.
"Material Indebtedness" means any Indebtedness of the Borrower or any
of its Subsidiaries having an outstanding principal amount of at least
U.S.$5,000,000, individually or in the aggregate, whether such Indebtedness now
exists or shall hereafter be created.
"Maturity Date" has the meaning set forth in Section 1(a).
"Net Proceeds" means, with respect to the sale, transfer or other
disposition of any asset, the issuance of any security or any financing, the
aggregate amount of cash proceeds (including any other consideration that is
converted into cash) therefrom, in each case net of any customary attorneys'
fees, accountants' fees, underwriters' or placement agents' fees, discounts or
commissions and brokerage and consultant fees actually incurred in connection,
and contemporaneously, therewith.
"Note" means this Note and any replacement Note executed and delivered
by the Borrower and the Guarantors pursuant to Section 5 hereof.
"Permitted Liens" has the meaning set forth in the Security Agreements.
"Person" means any natural person, general or limited partnership,
corporation, limited liability company, firm, association or other legal entity.
"Principal Borrower Subsidiary" means any Subsidiary of the Borrower
the assets of which have an aggregate fair market value equal to or greater than
$1,000,000.
"Qualified Financing" means (i) any issuance by the Borrower or any of
its Subsidiaries of any Equity Interests and any Indebtedness incurred by the
Borrower or any of its Subsidiaries that is convertible into or exchangeable or
exercisable for any Equity Interests (other than the issuance of shares of
common stock of the Borrower or options with respect thereto to employees,
directors or officers of the Borrower or any Subsidiary of the Borrower in the
ordinary course consistent with past practice) and (ii) any "sale-leaseback" or
similar transaction involving the Collateral located in Shenzhen, China.
"Representatives" means, with respect to a Person, such Person's
directors, officers, employees, agents or advisors (including, without
limitation, attorneys, accountants, consultants, bankers, financial advisors and
members of advisory boards).
"Restructuring Agreement" means the Restructuring Agreement among
Bookham Technology plc, Bookham, Inc., the subsidiaries of Bookham, Inc. whose
names appear on the signature pages thereto, Nortel Networks UK Limited and
Nortel Networks Corporation, dated as of December 2, 2004.
"Security Agreements" means the Security Agreements (as defined in the
Acquisition Agreement), each as amended and restated as of the date hereof.
"Series A-2 Note" means the Amended and Restated Series A-2 Senior
Secured Note due November 8, 2007 in an original principal amount of
U.S.$20,000,000 issued by Bookham, Inc.
"Series B-1 Note" means the Amended and Restated Series B-1 Senior
Secured Note due November 8, 2006 in an original aggregate principal amount of
U.S.$30,000,000 issued by Bookham Technology plc.
"Subsidiary" of any Person means any corporation, partnership, joint
venture, limited liability company, trust or estate of which (or in which) more
than 50% of (a) the issued and outstanding capital stock (or other Equity
Interest) having ordinary voting power to elect a majority of the board of
directors (or similar governing body) of such entity or (b) the interest in the
capital or profits of such entity is at the time directly or indirectly owned or
Controlled by such Person, by such Person and one or more of its other
Subsidiaries or by one or more of such Person's other Subsidiaries.
"Taxes" has the meaning set forth in the Acquisition Agreement.
"Threshold Net Proceeds" means the excess over $100,000,000 of Net
Proceeds of all Qualified Financings consummated after the date hereof.
IN WITNESS WHEREOF, each of the Borrower and the Guarantors
has duly executed and delivered this Note as of the date first written above.
BOOKHAM, INC., as Borrower
By:
--------------------------------------
Name:
Title:
BOOKHAM TECHNOLOGY PLC, as Guarantor
By:
--------------------------------------
Name:
Title:
NEW FOCUS, INC., as Guarantor
By:
--------------------------------------
Name:
Title:
XXXXXX, INC., as Guarantor
By:
--------------------------------------
Name:
Title:
BOOKHAM (US) INC., as Guarantor
By:
--------------------------------------
Name:
Title:
BOOKHAM (CANADA), INC., as Guarantor
By:
--------------------------------------
Name:
Title:
BOOKHAM (SWITZERLAND) AG, as Guarantor
By:
--------------------------------------
Name:
Title:
IGNIS OPTICS, INC., as Guarantor
By:
--------------------------------------
Name:
Title:
Exhibit C
AMENDED AND RESTATED U.S. SECURITY AGREEMENT
THIS AMENDED AND RESTATED SECURITY AGREEMENT (this
"Agreement"), dated as of , 2004, is made by Bookham, Inc., a Delaware
corporation (the "Pledgor"), and each of its subsidiaries whose names appear on
the signature pages hereto (together with the Pledgor, the "Pledgor Parties"),
in favor of Nortel Networks UK Limited (the "Pledgee").
W I T N E S S E T H:
-------------------
WHEREAS, Bookham Technology plc, a public limited company
incorporated under the laws of England and Wales ("Bookham plc") and Nortel
Networks Corporation, a Canadian corporation ("Nortel") are parties to an
Acquisition Agreement, dated as of October 7, 2002 (as amended through the date
hereof, the "Acquisition Agreement"); and
WHEREAS, the Pledgor Parties, Nortel and the Pledgee (the
"Parties") are parties to a Restructuring Agreement (the "Restructuring
Agreement"), dated as of the date hereof; and
WHEREAS, Bookham plc, certain of its Subsidiaries and Nortel
are parties to a U.S. Security Agreement, dated as of November 8, 2002 (the
"Original Security Agreement"); and
WHEREAS, to induce the Pledgee and Nortel to enter into the
transactions contemplated by the Restructuring Agreement, the Pledgor Parties
and the Pledgee desire to amend and restate the Original Security Agreement in
its entirety as set forth herein.
NOW, THEREFORE, in consideration of the premises and the
mutual representations, warranties, covenants and agreements contained herein,
the Parties agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. Capitalized terms used but not
defined herein shall have the respective meanings assigned to them in the
Acquisition Agreement. In addition, as used in this Agreement, unless otherwise
specified, the following terms have the meanings specified below:
"Acquisition Agreement" has the meaning set forth in the
recitals hereto.
"Additional Collateral" means all Collateral other than the
Original Collateral.
"Agreement" has the meaning set forth in the preamble hereto.
"Bookham plc" has the meaning set forth in the recitals
hereto.
"Business" has the meaning set forth in the Acquisition
Agreement.
"Collateral" means: (a) all of the Assets (excluding
Inventory); (b) all Improvements (as defined in the Intellectual Property
Agreement) to the Intellectual Property that is included in the Assets; (c) all
property, plant and equipment of any Pledgor Party that is now or hereafter
owned by such Pledgor Party, excluding Excluded Equipment and leasehold
improvements; (d) the real property identified on Schedule A attached hereto;
(e) all improvements attached to the real property identified on Schedule A
attached hereto; (f) the stock of Bookham International Ltd., a company
organized under the laws of the Cayman Islands and a wholly-owned subsidiary of
Bookham plc and (g) if an Event of Default shall have occurred and be
continuing, any Proceeds of each of the foregoing received or receivable.
"Copyright" means all of the following: (a) all copyright
rights in any work subject to the copyright laws of the United States or any
other country (whether or not the underlying works of authorship have been
published), whether as author, assignee, transferee or otherwise and all
copyrightable works of authorship (whether or not published), (b) all
registrations and applications for registration of any such copyright in the
United States or any other country, including registrations, recordings,
supplemental registrations and pending applications for registration in the
United States Copyright Office, (c) all renewals of any of the foregoing and (d)
any claims or causes of action or defenses arising out of or related to any of
the foregoing.
"Equipment" means "equipment" (as defined in the UCC) and
shall include all equipment, furniture and furnishings, and all tangible
personal property similar to any of the foregoing, including tools, parts,
supplies and operating manuals directly related to any of the foregoing of every
kind and description, and all improvements, accessions or appurtenances thereto,
that are now or hereafter owned by the Pledgor. The term "Equipment" shall not
include Fixtures.
"Excluded Equipment" means any item of Equipment owned by any
of the Pledgor Parties that is subject to a PMSI Lien, provided that the Pledgor
shall have designated such item as such to the Pledgee by written notice within
five (5) Business Days of having acquired such item of Equipment.
"Event of Default" has the meaning set forth in the Series B-1
Note or the Series A-2 Note.
"Fixtures" means all items of Equipment, whether now owned or
hereafter acquired, that become so related to particular real estate that an
interest in them arises under any real estate Law applicable thereto.
"Indemnified Parties" has the meaning set forth in Section
4.02.
"Nortel" has the meaning set forth in the recitals hereto.
"Obligations" means the obligations of the Pledgor Parties and
their Affiliates under the Series B-1 Note, the Series A-2 Note and under the
Security Agreements, as such Security Agreements are amended as of the date
hereof, including the guaranty obligations of the Pledgor Parties under the
Series B-1 Note and the Series A-2 Note, as applicable.
"Original Collateral" means the assets pledged to the Pledgee
pursuant to the terms of the Original Security Agreement.
"Parties" has the meaning set forth in the recitals hereto.
"Permitted Liens" means the following Liens: (a) Liens for
taxes not yet due or that are being contested in good faith; (b) statutory Liens
of landlords and Liens of carriers, warehousemen, mechanics, materialmen and
other like Liens imposed by law and arising in the ordinary course of business;
(c) Liens incurred or deposits made in the ordinary course of business in
connection with worker's compensation, unemployment insurance or other types of
social security; (d) minor defects of title, easements, rights-of-way,
restrictions and other similar charges or encumbrances of record that
individually or in the aggregate, do not interfere and would not reasonably be
expected to interfere with the continued use and operation of the asset to which
they relate in the ordinary course of business; (e) with respect to the Original
Collateral, Liens existing on the date of the Acquisition Agreement that were
not created by the Pledgor or any of its affiliates; (f) with respect to the
Additional Collateral, Liens existing on the date hereof that were not created
by the Pledgor Parties or any of their affiliates; and (g) Liens arising under
any of the Transaction Documents (as defined in the Acquisition Agreement) or
the Restructuring Agreement.
"Pledgee" has the meaning set forth in the preamble hereto.
"Pledgor" has the meaning set forth in the preamble hereto.
"Pledgor Parties" has the meaning set forth in the preamble
hereto.
"PMSI Lien" means any Lien on any Equipment acquired,
constructed or improved by any Pledgor Party, provided that (a) all such Liens
secure Indebtedness (including capitalized lease obligations) not to exceed
U.S.$40,000,000 in the aggregate at any one time outstanding that is incurred to
finance such acquisition, construction or improvement (and such Indebtedness is
incurred prior to or within 180 calendar days after the completion of such
acquisition, construction or improvement), (ii) such Indebtedness secured
thereby does not exceed 100% of the cost of acquiring, constructing or improving
such fixed or capital assets and (iii) such Liens do not apply to any other
property or assets of the Pledgor Parties.
"Principal Subsidiary" means any Subsidiary of the Pledgor
with assets consisting of property, plant and equipment having an aggregate fair
market value equal to or greater that $1,000,000; provided, however, that
Principal Subsidiary shall not include Bookham Technology (Shenzhen) (FFTZ) Co.
Ltd., a People's Republic of China corporation or New Focus Pacific (SHIP) Co.
Ltd., a People's Republic of China corporation.
"Proceeds" means "proceeds" (as defined in the UCC) and shall
include any consideration received from the sale, exchange, license, lease or
other disposition of any asset or property that constitutes Collateral, any
value received as a consequence of the possession of any Collateral and any
payment received from any insurer or other Person or entity as a result of the
destruction, loss, theft, damage or other involuntary conversion of whatever
nature of any asset or property which constitutes Collateral, any property
collected on or distributed on account of the Collateral, any rights arising out
of the Collateral, and any and all other amounts from time to time paid or
payable under or in connection with any of the Collateral.
"Real Property" means all rights, whether as owner or as
lessee, in any land, structures or other real property (including all related
Fixtures) whether now held or hereafter arising or acquired.
"Security Interest" has the meaning set forth in Section 2.01.
"Series A-2 Note" means the Series A-2 Senior Secured Note due
November 8, 2007 in an original principal amount of U.S. $20,000,000 issued to
the Pledgee by Bookham, Inc.
"Series B-1 Note" means the Series B-1 Senior Secured Note due
November 8, 2006 in an original principal amount of U.S. $30,000,000 issued to
the Pledgee by Bookham Technology plc.
"UCC" shall mean the Uniform Commercial Code as in effect from
time to time in the State of New York.
SECTION 1.02. Terms Generally. (a) Words in the singular shall
include the plural and vice versa, and words of one gender shall include the
other genders, in each case, as the context requires, (b) the term "hereof,"
"herein," and "herewith" and words of similar import shall, unless otherwise
stated, be construed to refer to this Agreement and not to any particular
provision of this Agreement, and Article, Section, paragraph and Exhibit
references are to the Articles, Sections, paragraphs and Exhibits to this
Agreement unless otherwise specified and (c) the word "including" and words of
similar import when used in this Agreement shall mean "including, without
limitation" unless otherwise specified.
ARTICLE II
PLEDGE OF COLLATERAL
SECTION 2.01. Security Interest. As security for the
performance of the Obligations, each of the Pledgor Parties hereby grant to the
Pledgee, its successors and assigns, a security interest in all of such Pledgor
Party's right, title and interest in, to and under the Collateral, and to any
certificates or instruments evidencing the portion of the Collateral owned by
such Pledgor Party, and each Pledgor Party shall grant a mortgage with respect
to all Real Property that constitutes a portion of the Collateral (the "Security
Interest"). Without limiting the foregoing, the Pledgee is hereby authorized to
file one or more financing statements (including fixture filings), continuation
statements, filings with the United States Patent and Trademark Office or the
United States Copyright Office (or any successor office or any similar office in
any other country) or other documents for the purpose of perfecting, confirming,
continuing, enforcing or protecting the Security Interest granted by each of the
Pledgor Parties, without the signature of any of the Pledgor Parties, and naming
any Pledgor Party or the Pledgee as debtors and the Pledgee as secured party.
SECTION 2.02. No Assumption of Liability. The Security
Interest is granted as security only and shall not subject the Pledgee to, or in
any way alter or modify, any obligation or liability of the Pledgor Parties with
respect to or arising out of the Collateral.
SECTION 2.03. Remedies Upon an Event of Default.
(a) In case an Event of Default shall have occurred and be
continuing, each of the Pledgor Parties agrees to deliver each item of
Collateral to the Pledgee on demand, and the Pledgee shall be entitled but shall
not be obligated, at the same or different times, to exercise all of the rights,
powers and remedies (whether vested in it by this Agreement or by Law) for the
protection and enforcement of its rights in respect of the Collateral, including
all applicable rights and remedies of a secured party upon default under the
UCC, and the Pledgee shall be entitled but shall not be obligated, without
limitation, to exercise the following rights, which each of the Pledgor Parties
agrees to be commercially reasonable:
(i) to take possession of the Collateral and without liability
for trespass to enter any premises where the Collateral may be located
for the purpose of taking possession of or removing the Collateral;
(ii) to receive all amounts payable in respect of the
Collateral otherwise payable to any Pledgor Party;
(iii) to transfer all or any part of the Collateral into the
Pledgee's name or the name of its nominee or nominees, including all
Collateral rights of assignment to execute any other documents as may
be necessary or appropriate to reflect such assignments of record;
(iv) to give all consents, waivers and ratification in respect
of the Collateral and otherwise act with respect thereto as though it
were the outright owner thereof (the Pledgor irrevocably constituting
and appointing the Pledgee the proxy and attorney-in-fact of the
Pledgor, with full power of substitution to do so);
(v) with respect to any Collateral consisting of Intellectual
Property, on demand, to (A) cause the Security Interest to become an
assignment, transfer and conveyance of any of or all of such Collateral
by the applicable Pledgor Parties to the Pledgee (except to the extent
any such assignment, transfer or conveyance thereof would result in a
loss of such Intellectual Property), (B) to license or sublicense,
whether general, special or otherwise, and whether on an exclusive or
non-exclusive basis, any such Collateral throughout the world on such
terms and conditions and in such manner as the Pledgee shall determine
(other than in violation of any then-existing licensing arrangements to
the extent that waivers cannot be obtained), (C) at any time and from
time to time, in its sole and reasonable discretion, enforce (and shall
have the exclusive right to enforce) against any licensee or
sublicensee all rights and remedies of any Pledgor Party in, to and
under any such Collateral and take or refrain from taking any action
under any thereof, and each Pledgor Party agrees to reimburse the
Pledgee for all reasonable expenses it incurs in taking any such lawful
action; and (D) upon request by the Pledgee (which shall not be
construed as implying any limitation on rights or powers), each Pledgor
Party will execute and deliver to the Pledgee a power of attorney
prepared by the Pledgee, in form and substance satisfactory to the
Pledgee, for the implementation of any sale, lease, license or other
disposition of any of such Pledgor Party's Collateral or any action
related thereto;
(vi) to the fullest extent permitted by Law, and in a
commercially reasonable manner, at any time or from time to time to
sell, assign or otherwise dispose of, or grant options to purchase, all
or any part of the Collateral, or any interest therein, at any public
or private sale, or to redeem or otherwise dispose of or realize on
(all of which are waived by each of the Pledgor Parties), for cash, on
credit or for other property, for immediate or future delivery without
any assumption of credit risk, and for such price or prices and on such
terms as the Pledgee in its absolute discretion may determine. Each
purchaser at any such sale shall hold the property so sold absolutely
free from any claim or right on the part of any of the Pledgor Parties,
and each of the Pledgor Parties waives and releases to the fullest
extent permitted by Law any right or equity of redemption with respect
to the Collateral, whether before or after sale hereunder, and all
rights, if any, of marshaling the Collateral and any other security for
the Obligations or otherwise, and all rights, if any, of stay and/or
appraisal which they now have or may at any time in the future have
under rule of Law now existing or hereafter enacted. At any such sale,
unless prohibited by applicable Law, the Pledgee may bid for and
purchase (by bidding in Obligations or portion thereof or otherwise)
all or any part of the Collateral so sold free from any such right or
equity of redemption. The Pledgee is authorized to comply with any
limitation or restriction in connection with any sale of Collateral as
it may be advised by counsel is necessary in order to (i) avoid any
violation of applicable Law or (ii) obtain any required approval of the
sale or of the purchase by any Governmental Authority, and each of the
Pledgor Parties agrees that such compliance shall not result in such
sale being considered or deemed not to have been made in a commercially
reasonable manner and that the Pledgee shall not be liable or
accountable to the Pledgor for any discount allowed by reason of the
fact that such Collateral is sold in compliance with any such
limitation or restriction.
(b) Each right, power and remedy of the Pledgee provided for
in this Agreement or the Acquisition Agreement or now or hereafter existing at
Law or in equity or by statute shall be cumulative and concurrent and shall be
in addition to every other such right, power or remedy. The exercise or
beginning of the exercise by the Pledgee of any one or more of the rights,
powers or remedies provided for in this Agreement or the Acquisition Agreement
or now or hereafter existing at law or in equity or by statute or otherwise
shall not preclude the simultaneous or later exercise by the Pledgee of all such
other rights, powers or remedies, and no failure or delay on the part of the
Pledgee to exercise any such right, power or remedy shall operate as a waiver
thereof.
(c) All monies collected by the Pledgee upon any sale or other
disposition of the Collateral, together with all other monies received by the
Pledgee hereunder, shall be applied as follows:
(i) first, to the payment of all Obligations to the Pledgee;
and
(ii) second, to the extent monies remain after the application
pursuant to the preceding clause (i), to a payment to the applicable
Pledgor Party or to whomever may be lawfully entitled to receive such
payment.
(d) It is understood and agreed that the Pledgor Parties shall
be jointly and severally liable to the extent of any deficiency between (1) the
amount of the proceeds of the Collateral applied pursuant to clauses (i) of
Section 2.03(c) and (2) the outstanding amount of the Obligations.
(e) Upon any sale of the Collateral by the Pledgee hereunder
(whether by virtue of the power of sale herein granted, pursuant to judicial
process or otherwise), the receipt by the Pledgee or the officer making the sale
of the purchase price shall be a sufficient discharge to the purchaser or
purchasers of the Collateral so sold, and such purchaser or purchasers shall not
be obligated to see to the application of any part of the purchase money paid
over to the Pledgee or such officer or be answerable in any way for the
misapplication or nonapplication thereof.
SECTION 2.04. Documentation; Further Assurances.
(a) Each of the Pledgor Parties has caused to be delivered to
the Pledgee fully executed UCC financing statements (including fixture filings,
as applicable), mortgages and other appropriate filings, recordings and
registrations containing a description of the Collateral, in each case prepared
by the Pledgee, for filing in all applicable recording offices of each
applicable jurisdiction, as may be required to publish notice of and protect the
validity of and to establish a legal, valid and perfected security interest in
favor of the Pledgee in respect of all Collateral in which the Security Interest
may be perfected by filing, recording or registration in the United States (or
any political subdivision thereof) and its territories and possessions, or in
any other necessary jurisdiction.
(b) Each of the Pledgor Parties has caused to be delivered to
the Pledgee, with respect to United States Patents and United States registered
Trademarks and Business Names (and Trademarks and Business Names for which
United States registration applications are pending) comprised within the
Collateral and with respect to United States registered Copyrights comprised
within the Collateral, fully executed security agreements and other documents
containing a description of all such Collateral, in each case prepared by the
Pledgee, for recording with the United States Patent and Trademark Office and
the United States Copyright Office pursuant to 35 U.S.C. ss. 261, 15 U.S.C. ss.
1060 or 17 U.S.C. ss. 205 and the regulations thereunder, as applicable, and
otherwise as may be required pursuant to the Laws of any other jurisdiction in
the United States (or any political subdivision thereof) and its territories and
possessions, to protect the validity of and to establish a legal, valid and
perfected security interest in favor of the Pledgee in respect of all Collateral
consisting of Patents, Trademarks and Business Names and Copyrights in which a
security interest may be perfected by filing, recording or registration in the
United States (or any political subdivision thereof) and its territories and
possessions, or in any other necessary jurisdiction.
(c) In addition, each of the Pledgor Parties shall execute and
deliver from time to time as may be reasonably requested by the Pledgee, to the
Pledgee such other instruments, agreements, certificates and documents
(including UCC financing statements and mortgages) and other appropriate,
filings, recordings and registrations containing a description of the
Collateral, in each case prepared by the Pledgee, to evidence, confirm, perfect
and maintain the Liens and Security Interests granted or required to be granted
to the Pledgee by this Agreement, and shall fully cooperate with the Pledgee and
perform all additional acts that are necessary to effect the purposes of the
foregoing.
(d) The Pledgor Parties shall reimburse the Pledgee on demand
for the reasonable fees (including legal fees) and expenses incurred by the
Pledgee in connection with the preparation, filing, publication or recording of
any instruments, agreements, certificates and documents (including UCC financing
statements and mortgages) pursuant to Section 2.04(c), subject to the $75,000
limitation set forth in Section 4(i) of the Restructuring Agreement.
(e) If any of the Pledgor Parties fails to perform any act
required by this Agreement, the Pledgee may (in the name of any of the Pledgor
Parties or otherwise) perform, or cause performance of, such act. The Pledgor
Parties shall reimburse the Pledgee on demand for its reasonable fees (including
legal fees) and expenses incurred by the Pledgee in connection therewith.
SECTION 2.05. Security Interest Absolute. All rights of the
Pledgee hereunder, the grant of a security interest in the Collateral and all
obligations of the Pledgor Parties hereunder (which shall be joint and several),
shall be absolute and unconditional pending satisfaction in full of the
Obligations (subject to Section 2.06(b) hereof) irrespective of:
(a) any claim as to the validity, regularity or enforceability
of any of the Transaction Documents;
(b) any change in the time, manner or place of payment of, or
in any other term of, all of or any of the Obligations, or any other amendment
or waiver of or any consent to any departure from any of the Transaction
Documents or any other agreement or instrument relating to any of the foregoing;
(c) any change in the Laws, rules or regulations of any
jurisdiction;
(d) the occurrence of any Event of Default;
(e) any exchange, release or non-perfection of the Pledgee's
security interest in any other collateral, or any release or amendment or waiver
of or consent to or departure from any guaranty, for all or any of the
Obligations; or
(f) any other circumstance that might otherwise constitute a
defense available to, or a discharge of, any of the Pledgor Parties in respect
of the Obligations or in respect of this Agreement.
SECTION 2.06. Termination and Release of Security Interest.
(a) Upon satisfaction in full of all Obligations, the Security
Interest contained in this Article II shall terminate (provided that all
indemnities set forth herein, including those in Section 4.02, shall survive any
such termination), and within thirty (30) Business Days the Pledgee, at the
request of the Pledgor, shall execute and deliver to any applicable Pledgor
Party a proper instrument or instruments acknowledging the satisfaction and
termination of the Security Interest (including releases of mortgages), and
shall duly assign, transfer and deliver to such applicable Pledgor Party
(without recourse and without any representation or warranty, except that it has
not previously encumbered or sold such Collateral in violation of this
Agreement) such of the Collateral as may be in the possession of the Pledgee and
as has not theretofore been sold or otherwise applied or released pursuant to
this Agreement, together with any monies at the time held by the Pledgee
hereunder.
(b) In the event that any part of the Collateral is sold in
connection with a sale permitted by terms of this Agreement or the Acquisition
Agreement or is otherwise released at the direction of the Pledgee, and the
proceeds of such sale or sales or from such release are to be applied in
accordance with the terms of this Agreement or the Acquisition Agreement to the
extent required to be so applied, within thirty (30) Business Days the Pledgee,
at the request of the Pledgor, shall release such Collateral from this
Agreement, and shall duly assign, transfer and deliver to the applicable Pledgor
Party (without recourse and without any representation or warranty, except that
it has not previously encumbered or sold such Collateral in violation of this
Agreement) such of the Collateral as is then being (or has been) so sold or
released and as may be in possession of the Pledgee and has not theretofore been
released pursuant to this Agreement.
(c) The Pledgor Parties shall reimburse the Pledgee on demand
for the reasonable fees (including legal fees) and expenses incurred by the
Pledgee in connection with the preparation, filing, publication or recording of
any instruments, agreements, certificates and documents (including UCC financing
statements) pursuant to Section 2.06(b) or Section 2.06(c), subject to the
$75,000 limitation set forth in Section 4(i) of the Restructuring Agreement.
(d) The Pledgee agrees that, upon receipt of a written request
from the Pledgor, the Pledgee shall release any and all of its rights in the
Collateral located in Shenzhen, China to the extent necessary to allow the
Pledgor or any of its Affiliates to enter into one or more "sale-leaseback" or
similar transactions; provided, however, that the proceeds of such transactions
shall be subject to the mandatory prepayment provisions of Sections 4(a) and
4(b) of the Series B-1 Note and Section 4(a) of the Series A-2 Note, as
applicable. The release by the Pledgor contemplated pursuant to this Section
2.06(d) shall not be unreasonably withheld or delayed and the Pledgee agrees to
promptly execute and deliver all documents that the Pledgor may reasonably
request to evidence such release. Nothing in this Section 2.06(d) shall limit
the Pledgor's obligations under Section 2.04 with respect to any Collateral
located in Shenzhen, China that is not the subject of a transaction or
transactions contemplated by this Section 2.06(d).
ARTICLE III
REPRESENTATIONS, WARRANTIES AND COVENANTS
SECTION 3.01. Representations and Warranties. Each of the
Pledgor Parties represents and warrants that, as of the date hereof:
(a) The Collateral is owned solely by the Pledgor Parties free
and clear of any Lien, except the Liens and the Security Interest created by
this Agreement and Permitted Liens. None of the Pledgor Parties has filed or
consented to the filing of any financing statement or analogous document under
the UCC or any other applicable Laws covering any Collateral or any assignment
in which any of the Pledgor Parties assigns any Collateral or any security
agreement or similar instrument covering any Collateral with any foreign
governmental, municipal or other office, which financing statement or analogous
document, assignment, security agreement or similar instrument is still in
effect, except in each case for Liens and the Security Interest created by this
Agreement and Permitted Liens.
(b) The Security Interest constitutes a legal and valid
security interest in all Collateral securing the payment and performance of the
Obligations, except that no representation or warranty is made herein with
respect to the law of any jurisdiction outside of the United States of America.
The Security Interest is and shall be prior to any other Lien on any of the
Collateral, other than Permitted Liens or any Liens created by or through the
action or inaction of the Pledgee or any of its Subsidiaries.
(c) Each of the Pledgor Parties has good and valid rights in
and title to the Collateral with respect to which it has purported to grant a
Security Interest hereunder and has full power and authority to grant to the
Pledgee the Security Interest in such Collateral pursuant hereto and to execute,
deliver and perform its obligations in accordance with the terms of this
Agreement, without the consent or approval of any other Person other than any
consent or approval which has been obtained.
(d) Each of the Principal Subsidiaries of the Pledgor is a
Party.
(e) At the date of this Agreement and for the four months
immediately preceding the date of this Agreement, (i) the exact legal name, type
of organization and sole jurisdiction of organization (together with the
organizational identification number, if any issued by such jurisdiction) of
each of the Pledgor Parties are as set forth in Exhibit A, (ii) the place of
business of each of the Pledgor Parties, or if it has more than one place of
business, its chief place of business and chief executive office, are as set
forth in Exhibit B, and (iii) all locations of the Collateral are as set forth
in Exhibit C.
SECTION 3.02. Covenants.
(a) Each of the Pledgor Parties covenants and agrees that it
shall, at its own cost and expense, take any and all actions reasonably
necessary to defend title to the Collateral against all Persons.
(b) Each of the Pledgor Parties covenants and agrees that it
shall remain liable to observe and perform all the conditions and obligations to
be observed and performed by it under each contract, agreement or instrument
relating to the Collateral, all in accordance with the terms and conditions
thereof.
(c) Each of the Pledgor Parties agrees that it shall not
distribute, sell, assign, transfer, lease or otherwise dispose of any Collateral
without the prior written consent of the Pledgee while the Obligations are
outstanding, except for the disposition of obsolete or worn out property and
excess equipment in the ordinary course of business, having a fair market value
not to exceed $5,000,000 in the aggregate.
(d) Unless the Pledgor shall have given the Pledgee not less
than thirty (30) calendar days' prior notice thereof, none of the Pledgor
Parties shall change its name, type of entity, jurisdiction of organization or
the location of its principal place of business or chief executive office.
(e) The Pledgor Parties agree to cause Bookham International
Ltd. not to engage in any business activity, incur any liability or undertake
any other activity until Bookham, Inc. has fulfilled its obligations under
Section 2 of the Restructuring Agreement, except (i) activities necessary to
effect the transactions contemplated by, and the purposes of, this Agreement and
(ii) acting as a holding company of Bookham Technology (Shenzhen) (FFTZ) Co.
Ltd. and New Focus Pacific (SHIP) Co. Ltd. and activities necessary in
connection therewith.
SECTION 3.03. Covenants Regarding Patent, Trademark and
Copyright Collateral.
(a) Each Pledgor Party agrees that it will not do or cause to
be done any act or omission whereby any Patent that is included in the
Collateral and that is, in the Pledgor Party's reasonable judgment, material to
the Business, will become invalidated or dedicated to the public.
(b) Each Pledgor Party shall notify the Collateral Agent
promptly if it knows that any Patent, Trademark and Business Name or Copyright
that is, in the Pledgor Party's reasonable judgment, material to the Business
may become abandoned, lost or dedicated to the public, or of any adverse
determination or development (including the institution of, or any such
determination or development in, any proceeding in the United States Patent and
Trademark Office, United States Copyright Office or any court or similar office
of any country) regarding such Pledgor Party's ownership of any such Patent,
Trademark and Business Name or Copyright, its right to register the same, or to
keep and maintain the same.
(c) Each Pledgor Party will take all necessary steps that are
consistent with the practice in any proceeding before the United States Patent
and Trademark Office, United States Copyright Office or any office or agency in
any political subdivision of the United States or in any other country or any
political subdivision thereof, to maintain and pursue each application relating
to the Patents, Trademarks and Business Names and/or Copyrights comprised within
the Collateral and that is, in the Pledgor Party's reasonable judgment, material
to the Business, and to obtain the relevant grant or registration and to
maintain each issued Patent and each registration of the Trademarks and Business
Names and Copyrights that is comprised within the Collateral and that is, in the
Pledgor Party's reasonable judgment, material to the Business, including timely
filings of applications for renewal, affidavits of use, affidavits of
incontestability and payment of maintenance fees, and, if consistent with good
business judgment, to initiate opposition interference and cancellation
proceedings against third persons.
(d) Within fifteen (15) Business Days of January 15 and July
15 of every year, each Pledgor Party shall deliver to the Pledgee a written
notice identifying all Improvements to any and all Intellectual Property
comprised within the Collateral that were developed or otherwise acquired by
such Pledgor Party during the previous six (6) month period and for which such
Pledgor Party has (i) generated an invention disclosure or (ii) obtained a
registration from, or filed an application to register such Improvement with,
the United States Patent and Trademark Office or the United States Copyright
Office (or any successor office or any similar office in any other country).
ARTICLE IV
MISCELLANEOUS
SECTION 4.01. Survival; Successors and Assigns. This Agreement
and all covenants, agreements, representations and warranties made herein and in
the certificates delivered pursuant hereto shall survive the execution and
delivery of this Agreement, and shall continue in full force and effect so long
as any of the Obligations are still effective. Whenever in this Agreement any of
the Parties is referred to, such reference shall be deemed to include the
permitted successors and permitted assigns of such Party, if any. All covenants,
promises and agreements in this Agreement contained, by or on behalf of the
Pledgor Parties, shall inure to the benefit of the Pledgee and its successors
and assigns, and all covenants, promises and agreements in this Agreement
contained, by or on behalf of the Pledgee, shall inure to the benefit of the
Pledgor Parties and their respective successors and assigns.
SECTION 4.02. Expenses; Currency. Except as otherwise provided
in this Agreement or the Restructuring Agreement, the Parties shall bear their
respective direct and indirect expenses incurred in connection with the
negotiation, preparation, execution and performance of this Agreement and the
transactions contemplated hereby.
(a) Unless otherwise indicated, all dollar amounts stated in
this Agreement are stated in U.S. currency, and all payments required under this
Agreement shall be paid in U.S. currency. In the event it is required to convert
any lawful currency of a jurisdiction other than the U.S. into U.S. Dollars for
purposes of determining any amounts owed under, or due and payable pursuant to,
this Agreement, the Parties hereby agree such currency conversion shall be
determined as of the applicable date by reference to the New York foreign
exchange mid-range rates published in The Wall Street Journal (or such other
internationally-recognized currency conversion source as may be mutually agreed
between the Parties).
SECTION 4.03. Notices. All notices, requests, claims, demands
and other communications hereunder shall be in writing and shall be given or
made (and shall be deemed to have been duly given or made upon receipt) by
delivery in person, by overnight courier service, by cable, by facsimile, by
telegram, by telex or by registered or certified mail (postage prepaid, return
receipt requested) to the respective Persons at the following addresses (or at
such other address for a Party as shall be specified in a notice given in
accordance with this Section 4.03):
(i) If to the Pledgor Parties:
c/o Bookham Technology plc
00 Xxxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx X00, 0XX
Xxxxxx Xxxxxxx
Facsimile: 44 1235 837 210
Attention: Corporate Secretary
with a copy, which does not constitute notice, to:
Xxxxxx Xxxxxx Xxxxxxxxx Xxxx and Xxxx LLP
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxx, Esq.
(ii) If to the Pledgee, to:
Nortel Networks Corporation
0000 Xxxxx Xxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxx X0X 0X0
Xxxxxx
Facsimile: (000) 000-0000
Attention: Secretary
with a copy, which does not constitute notice, to:
Cleary, Gottlieb, Xxxxx & Xxxxxxxx
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxx, Esq.
Facsimile: (000) 000-0000
SECTION 4.04. Headings. The headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
SECTION 4.05. Entire Agreement. This Agreement, together with
the Acquisition Agreement (as amended through the date hereof) and the other
Ancillary Agreements (as amended through the date hereof) and the Restructuring
Agreement, constitutes the entire agreement of the Parties with respect to the
subject matter hereof and supersedes all prior agreements and undertakings, both
written and oral, among the Parties with respect to the subject matter hereof.
SECTION 4.06. No Third-Party Beneficiaries. Except as provided
in Section 4.02, this Agreement is for the sole benefit of the Parties and their
permitted assigns and nothing herein, express or implied, is intended to or
shall confer upon any other Person or entity any legal or equitable right,
benefit or remedy of any nature whatsoever under or by reason of this Agreement.
SECTION 4.07. Amendment. This Agreement may not be amended or
modified except by an instrument in writing signed by the Parties.
SECTION 4.08. Governing Law. This Agreement shall be governed
by, and construed in accordance with, the Laws of the State of New York. This
Agreement was negotiated and executed in the State and County of New York. All
actions, suits or proceedings arising out of or relating to this Agreement shall
be heard and determined exclusively in a New York state or federal court sitting
in the County of New York, and the Parties hereby irrevocably submit to the
exclusive jurisdiction of such courts in any such action or proceeding and
irrevocably agree to the laying of venue in such courts and waive the defense of
an inconvenient forum to the maintenance of any such action, suit or proceeding.
SECTION 4.09. Counterparts. This Agreement may be executed in
one or more counterparts, and by the different Parties in separate counterparts,
each of which when executed shall be deemed to be an original but all of which
taken together shall constitute one and the same agreement. Delivery of an
executed counterpart of a signature page to this Agreement by telecopier shall
be as effective as delivery of a manually executed counterpart of this
Agreement.
SECTION 4.10. No Presumption. This Agreement shall be
construed without regard to any presumption or rule requiring construction or
interpretation against the Party drafting or causing any instrument to be
drafted.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the Parties have caused this Agreement to
be executed as of the date first written above by their respective officers
thereunto duly authorized.
NORTEL NETWORKS CORPORATION
By:
---------------------------------------
Name:
Title:
By:
---------------------------------------
Name:
Title:
NORTEL NETWORKS UK LIMITED
By:
---------------------------------------
Name:
Title:
BOOKHAM, INC.
By:
---------------------------------------
Name:
Title:
BOOKHAM TECHNOLOGY PLC
By:
---------------------------------------
Name:
Title:
BOOKHAM (US), INC.
By:
---------------------------------------
Name:
Title:
BOOKHAM (CANADA), INC.
By:
---------------------------------------
Name:
Title:
BOOKHAM (SWITZERLAND) AG
By:
---------------------------------------
Name:
Title:
NEW FOCUS, INC.
By:
---------------------------------------
Name:
Title:
XXXXXX, INC.
By:
---------------------------------------
Name:
Title:
IGNIS OPTICS, INC.
By:
---------------------------------------
Name:
Title:
EXHIBIT A
LEGAL NAME, TYPE OF ORGANIZATION AND SOLE JURISDICTION OF
ORGANIZATION FOR EACH PLEDGOR PARTY
Bookham (Canada), Inc. - a corporation incorporated under the New Brunswick
Business Corporations Act
Bookham (Switzerland) AG - a corporation incorporated under the laws of
Switzerland
Bookham Technology plc - a public limited company incorporated under the laws of
England and Wales
Bookham (US), Inc. - a Delaware corporation
Ignis Optics, Inc - a Delaware corporation
New Focus, Inc. - a Delaware corporation
Xxxxxx, Inc. - a Delaware corporation
EXHIBIT B
PLACE OF BUSINESS FOR EACH PLEDGOR PARTY
Bookham (Canada), Inc.
0-00 Xxxxxx Xxxx Xxx
Xxxxxx, Xxxxxxx X0X 0X0
Xxxxxx
Bookham (Switzerland) AG
Zurich
Xxxxxxxxxxx 00
XX-0000
Xxxxxx
Xxxxxxxxxxx
Bookham Technology plc
00 Xxxxxx Xxxx
Xxxxxxxx
Xxxxxxxxxxx XX00 0XX
Xxxxxx Xxxxxxx
Caswell Xxxxxxxxx
Xxxxxxxxxxxxxxxx XX00 0XX
Xxxxxx Xxxxxxx
Xxxxxxx Xxxx
Xxxxxxxx
Xxxxx
XX0 0XX
Bookham (US), Inc.
0000 Xxxxxxxx Xxxxxxxxx
Xxxxx Xxxx
Xxxxxxxxxx 00000
Ignis Optics, Inc.
000 Xxxx Xxx Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000
New Focus, Inc.
0000 Xxxxxxxx Xxxxxx
Xxx Xxxx, Xxxxxxxxxx 00000
Xxxxxx, Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx
EXHIBIT C
LOCATION OF COLLATERAL
Bookham (Canada), Inc.
0-00 Xxxxxx Xxxx Xxx
Xxxxxx, Xxxxxxx X0X 0X0
Xxxxxx
Bookham (Switzerland) AG
Zurich
Xxxxxxxxxxx 00
XX-0000
Xxxxxx
Xxxxxxxxxxx
Bookham Technology plc
00 Xxxxxx Xxxx
Xxxxxxxx
Xxxxxxxxxxx XX00 0XX
Xxxxxx Xxxxxxx
Caswell Xxxxxxxxx
Xxxxxxxxxxxxxxxx XX00 0XX
Xxxxxx Xxxxxxx
Xxxxxxx Xxxx
Xxxxxxxx
Xxxxx
XX0 0XX
Bookham (US), Inc.
0000 Xxxxxxxx Xxxxxxxxx
Xxxxx Xxxx
Xxxxxxxxxx 00000
Ignis Optics, Inc.
000 Xxxx Xxx Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000
New Focus, Inc.
0000 Xxxxxxxx Xxxxxx
Xxx Xxxx, Xxxxxxxxxx 00000
Xxxxxx, Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx
SCHEDULE A
PLEDGOR PARTIES OWNED REAL PROPERTY LOCATIONS
Caswell Xxxxxxxxx
Xxxxxxxxxxxxxxxx XX00 0XX
Xxxxxx Xxxxxxx
Xxxxxxx Xxxx
Xxxxxxxx
Xxxxx
XX0 0XX
Exhibit D
THIS DEBENTURE is made the day of 2004
BETWEEN
(1) NORTEL NETWORKS UK LIMITED incorporated under the Laws of England and
Wales (company number 3937799) whose registered office is at Maidenhead
Office Park Xxxxxxxxx Xxx Xxxxxxxxxx Xxxxx XX0 0XX ("Nortel") and
(2) BOOKHAM TECHNOLOGY PLC incorporated under the laws of England and Wales
(Company Number 2298887) whose registered office is at 00 Xxxxxx Xxxx
Xxxxxx Xxxxxxxx Xxxxxxxxxxx XX00 0XX ("Bookham") and
RECITALS
1. Nortel and Bookham are parties to an Agreement dated the day of
2004 (referred to as "the Restructuring Agreement") relating to the revision
of certain arrangements regarding the provision of security
2. It has been agreed between the parties to the Restructuring Agreement that
Bookham should inter alia charge the Charged Property (as defined in clause
2) to secure certain of the obligations under the Series A-2 Note and the
Series B-1 Note as defined in the Restructuring Agreement pursuant to the
provisions of the Restructuring Agreement
3. This Deed is entered into supplemental to the Restructuring Agreement the
Series A-2 Note and the Series B-1 Note and the amended and restated
security agreements of even date herewith (being together referred to as the
"Principal Agreements") and terms used in the Principal Agreements shall
have the same meaning in this deed unless specifically stated or the context
otherwise requires
NOW THIS DEED WITNESSES
1. Definitions and Interpretation
'Acquisition Agreement' means an agreement dated the 7th October 2002
and made between (1) Nortel Networks Corporation (2) Bookham Technology
plc
'Book Debts' means all or any one or more of the book debts and other
debts now and from time to time owing to Bookham in relation to the
Charged Property
'Event of Default' shall be any event so defined in either the Series
A-2 Note or Series B-1 Note
'Obligations' means the Obligations of Bookham, Bookham Inc and any
other Pledgor Parties and the Affiliates under the Series A-2 Note and
the Series B-1 Note and the Security Agreements (and any similar
agreements executed pursuant to the Acquisition Agreement)
'Property' means the property described in the Schedule and where the
context so permits or requires any part of it
'Rate of Interest' means 4% per annum above the base lending rate from
time to time of HSBC Bank plc
'Secured Liabilities' means all monies debts and liabilities from time
to time due owing or incurred by Bookham or Bookham Inc to Nortel on
any account pursuant to the Principal Agreements
'Amended and Restated US Security Agreement' means an agreement of even
date made between (1) Bookham Technology plc, Bookham (US), Inc.,
Bookham (Canada), Inc., Bookham (Switzerland), Inc., New Focus Inc,
Xxxxxx Inc, Ignis Optics, Inc., and (2) Nortel Networks Corporation
2. Charged Property
As security for the payment and discharge of the Secured Liabilities
Bookham with full title guarantee charges in favour of Nortel
2.1 by way of legal mortgage the Property and all rights relating to
it at the date hereof
2.2 by way of a fixed charge all plant and machinery now or in the
future owned and situated at the Property
2.3 by way of a floating charge all of the remainder of the Collateral
situate at or about the Property or otherwise used for the
purposes of the Business
Property charged by clause 2.1 to 2.3 inclusive "the Charged Property"
provided that (except in relation to the Property) there shall be
excluded any part of the Charged Property which is effectually charged
pursuant to the Amended and Restated US Security Agreement or any other
security agreements executed pursuant to the Acquisition Agreement or
the Restructuring Agreement or would be but for this deed
3. Deeds and Further assurance
3.1 Bookham shall deposit with Nortel and Nortel shall be entitled to
hold all deeds and documents on title relating to the Property
3.2 Bookham shall on written demand by Nortel and at its own cost
(a) execute a legal assignment of all or any of the Book Debts and
other debts charged by this deed to secure the payment or
discharge to Nortel of the Secured Liabilities
(b) execute a fixed legal mortgage of all or any of the property
of Bookham from time to time charged by way of floating charge
under clause 2 of this deed
(c) include in those mortgages or assignments any provisions which
Nortel reasonably requires and
(d) to do or execute any thing or document necessary or desirable
to perfect or prove Bookham's title to or interest in the
Charged Property
4. Bookham's obligations
Except with the written consent of Nortel (such consent not to be
unreasonably withheld) Bookham shall not:
4.1 create purport to create or allow to subsist any further mortgage
charge or lien over the whole or any part of the Charged Property
ranking in priority to or pari passu with this debenture
4.2 sell, let or part with the possession or otherwise dispose of or
deal with any part of the Charged Property (except in the ordinary
course of business in relation to the property comprised in the
floating charge until the same crystallises)
4.3 exercise any statutory or other powers of granting or agreeing to
grant or of accepting or agreeing to accept surrenders or leases
or tenancies of the present or future freehold and leasehold
property (including the Property)
5. Warranty of company powers
Bookham warrants that the transaction effected by this deed and
obligations or restrictions on its part contained in it do not
contravene any of the provisions of its memorandum and articles of
association or any other document affecting it
6. Insurance
Bookham shall keep all its property of an insurable nature comprised in
the Charged Property insured for its full reinstatement value for the
time being and shall duly and punctually pay all premiums and money
necessary for effecting and keeping up that insurance and on demand
produce to Nortel the policy of insurance and the receipt for any
premium payable in respect of it. Bookham shall apply all monies
received by virtue of any insurance of the whole or any part of the
Charged Property in making good or in recovering expenditure incurred
in making good any loss or damage or if Nortel in its discretion so
requires towards discharge of the Secured Liabilities. Bookham shall
ensure that all such monies which are not paid directly by the insurers
to Nortel shall be held by the recipient upon trust for Nortel and be
applied by Bookham in accordance with this Clause
7. Repair
Bookham shall keep any property comprised in the Charged Property in
good repair and free from any charges by the local authority for works
of private improvement or otherwise
8. Taxes, rent and covenants
Bookham shall pay all property taxes and any rent and comply with any
covenants and other provisions affecting any property comprised in the
Charged Property in so far as they are to be paid or complied with by
it and produce to Nortel on demand such evidence as Nortel reasonably
requires of its compliance with this covenant
9. Land Registry
Bookham shall not without Nortel 's written consent register under the
Land Registration Act 2002 any other person than itself as proprietor
of the Property and Bookham shall apply to the Chief Land Registrar for
the entry of the following restriction on the register of each of the
Property as follows:
"No disposition of the registered estate by the proprietor of the
registered estate is to be registered without a written consent signed
by the proprietor for the time being of the charge dated the day
of 2004 in favour of Nortel Networks UK Limited referred to
in the charges register or if appropriate signed on such proprietors
behalf by a director secretary"
10. Bookham's defaults
10.1 If Bookham fails to perform or observe any of its obligations
under this deed Nortel shall be entitled but not obliged to take
such steps as it thinks fit in or towards making good Bookham's
default without becoming liable as mortgagee in possession and for
that purpose to enter the Property
10.2 All money paid by Nortel in the exercise of its rights under this
deed shall be money properly paid by it and it shall pay such
money to Nortel on demand with interest at the Rate of Interest
from the date of payment by Nortel until the date of payment by
Bookham.
11. Freedom from accountability
If Nortel enters into possession of the Property or part of it it may
from time to time at its pleasure go out of such possession and shall
not be liable to account as lender in possession while in fact out of
possession if notice of such fact is within seven days after its
happening served on Bookham
12. Consolidation
Section 93 of the Law of Property Act 1925 shall not apply to this deed
13. Automatic crystallisation of floating charge
The floating charge created by this debenture shall become a fixed
charge over the respective assets to which it applies:
13.1 automatically in respect of all the assets of Bookham to which the
floating charge applies on the happening of any of the events
mentioned in clause 16.2 (a) to (b) inclusive of this deed
13.2 by written notice from Nortel to Bookham specifying the date on
which the floating charge becomes fixed and the assets to which it
becomes attached and fixed upon the happening of any of the events
mentioned in clause 10.1 of this deed or Nortel's reasonable
belief that any of those events has or might happen
14. Attornment
Bookham irrevocably appoints Nortel or its nominee and each person
deriving title from Nortel and the receiver jointly and severally as
its attorney (with full power to appoint substitutes and sub
delegate) to execute any document or do anything which is required for
any of the purposes of this deed or the exercise or enforcement of any
of Nortel's rights and remedies under it. Bookham ratifies and confirms
anything done or purported to be done by any attorney appointed
pursuant to this Clause
15. Appointment of trustee
Bookham declares that as and when the security created by this deed
becomes enforceable and Nortel's powers of sale and appointing a
receiver under this deed become exercisable:
15.1 Bookham shall hold all the property charged (subject to Bookham's
right of redemption) upon trust to convey, assign or otherwise
deal with it in such manner and to such person as Nortel directs
and
15.2 Nortel shall become entitled at any time by deed to remove Bookham
or any other person from office as a trustee of that property or
any part of it and to appoint one or more trustees of it or any
part of it as additional trustees or in the place of any person
who has ceased to be a trustee
16. Powers of sale and appointment of receiver
16.1 Section 103 of the Law of Property Act 1925 shall not apply to
this deed
16.2 The statutory and other powers of sale and appointing a receiver
shall arise on the date of this deed and shall become exercisable
by Nortel immediately whether or not Nortel has entered into or
taken possession of the whole or any part of the Charged Property
if
(a) there is an Event of Default
(b) Bookham requests Nortel to appoint a receiver
17. Appointment and status of receiver
17.1 In this deed any reference to a receiver shall include a reference
to a receiver and manager to an administrative receiver and any
substituted receiver
17.2 At any time after the power of appointing a receiver has become
exercisable Nortel may appoint by writing any person or persons
(whether or not an officer of Nortel) to be a receiver of all or
any part of the Charged Property upon such terms as to
remuneration and otherwise as Nortel thinks fit and may from time
to time by writing remove any receiver so appointed or require him
to resign and appoint another in his place or vary the receiver's
remuneration
17.3 A receiver so appointed shall be the agent of Bookham and Bookham
shall be responsible for the receiver's acts and defaults and for
his remuneration costs, charges and expenses to the exclusion of
liability on the part of Nortel
17.4 Nortel shall not be liable to Bookham for any loss or damage
arising from any act or omission of the receiver
18. Powers of receiver
A receiver appointed under this deed shall be entitled to exercise in
the interests of Nortel all powers conferred on a receiver by the Law
of Property Xxx 0000 and by way of addition to and without limiting
those powers he may
18.1 take possession of and get in all or any part of the Charged
Property
18.2 carry on or concur in carrying on Bookham's business comprised in
the Charged Property
18.3 raise money from Nortel or others on the security of any Charged
Property
18.4 sell or concur in selling any of the Charged Property or otherwise
deal with it on such terms in the interests of Nortel as he thinks
fit
18.5 let or concur in letting and to terminate or to accept surrenders
of leases or tenancies of any of the Charged Property in such
manner and generally on such terms and conditions as he thinks fit
18.6 make any arrangement or compromise between Bookham and any other
person which he thinks expedient
18.7 bring prosecute enforce defend and abandon all such actions suits
and proceedings in relation to the Charged Property as he may in
his discretion think fit
18.8 do all other things as he considers to be incidental or conducive
to any of the above matters and powers and which he may lawfully
do as agent for Bookham or otherwise incidental or conducive to
the preservation improvement or realisation of the Charged
Property and
18.9 appoint managers and agents for the above purposes at such
salaries, commissions or other remuneration as he determines
19. Money realised by receivers
19.1 The net profits of carrying on Bookham's business and the net
proceeds of any sale by the receiver shall be applied by him
(after provision for his remuneration and all matters specified in
paragraphs (i), (ii) and (iii) of the Law of Property Xxx 0000, s
109(8), and the Insolvency Xxx 0000, s 386 and Sch 6) in or
towards satisfaction of the Secured Liabilities and any surplus
shall be paid to Bookham
19.2 Any payment made by the receiver to Nortel may be made on account
of principal money or interest or partly in one way and partly in
the other as the receiver deems expedient
20. Incorporation of provisions of the Amended and Restated US Security
Agreement
The provisions of the Amended and Restated US Security Agreement shall
be incorporated in this deed save in so far as they are not
inconsistent with the provisions of this deed
21. Waiver
None of the demand for or the acceptance of payments under this deed or
the failure by Nortel to enforce any of the terms or conditions of this
deed at any time or for any period will release or exonerate or in any
way affect the liability of Bookham or be a waiver of
21.1 those terms or conditions
21.2 the right of Nortel at any time afterwards to enforce each and
every term and condition of this deed or
21.3 any penalty attached to their non-performance
22. Notices
22.1 Any notice given under this deed shall be in writing and may be
served
(a) personally
(b) by registered or recorded delivery mail
(c) by telex or facsimile transmission (the latter confirmed by
telex or post) or
(d) by any other means which any party specifies by notice to the
others
22.2 Each party's address for the service of notice shall be as
specified in the Restructuring Agreement
22.3 A notice shall be deemed to have been served
(a) if it was served in person, at the time of service
(b) if it was served by post, 48 hours after it was posted and
(c) if it was served by telex or facsimile transmission, at the
time of transmission.
23. Interpretation
23.1 Except where the context renders it absurd or impossible every
reference to any party to this deed shall include his or her
successors in title and personal representatives, by and against
whom this agreement shall be enforceable as if they had been
originally named as parties
23.2 In this deed
(a) words expressed in any gender shall where the context so
requires or permits include any other gender
(b) words importing persons shall include bodies corporate and
partnerships and other incorporated bodies and vice versa
(c) words expressed in the singular shall where the context so
requires or permits include the plural and
(d) where any party is more than one person
(i) that party's obligations in this deed shall take effect
as joint and several obligations
(ii) anything in this deed which applies to that party shall
apply to all of those persons collectively and each of
them separately
(iii) the benefits contained in this deed in favour of that
party shall take effect as conferred in favour of all
of those persons collectively and each of them
separately and
(iv) the receipt of the survivor of joint holders of this
deed shall be a good discharge to Bookham
23.3 The headings to clauses are inserted for ease of reference only
and shall not affect the construction of this deed
23.4 References in this deed to anything which any party is required to
do or not to do shall include its acts, defaults and omissions,
whether
(a) direct or indirect
(b) on his own account or
(c) for or through any other person and
(d) those which he permits or suffers to be done or not done by
any other person.
23.5 The effect of all obligations affecting Bookham under this deed is
cumulative and no obligation shall be limited or modified by any
other of those obligations unless there is in this deed an express
limitation or modification.
24. Subsidiaries
To the extent that any part of the Charged Property is
transferred by Bookham to a Subsidiary (as defined in the
Acquisition Agreement) in accordance with the provisions of the
Principal Agreements Bookham hereby undertakes to procure that
such Subsidiary shall grant a deed to Nortel in the same terms
hereof (mutatis mutandis) in respect of such Charged Property.
25. Governing law
25.1 This deed shall be construed in accordance with English law
25.2 All Actions (as defined in the Acquisition Agreement) arising out
of or relating to this deed shall be heard and determined
exclusively in a New York state or federal court sitting in the
County of New York and the parties hereby irrevocably submit to
the exclusive jurisdiction of such courts
The Schedule
First all that freehold property known as the Xxxxx Xxxxx Research Centre
Xxxxxxx being the whole of the land comprised in Title Number NN184271
SIGNED AS A DEED by BOOKHAM TECHNOLOGY PLC
By:
--------------------------------------------
Name:
Title: Director
and
By:
--------------------------------------------
Name:
Title: Secretary/Director
SIGNED AS A DEED by NORTEL NETWORKS UK LIMITED acting by
By:
--------------------------------------------
Name:
Title: Attorney-in-Fact
DATED 2004
--------------------------------
(1) BOOKHAM TECHNOLOGY PLC
and
(2) NORTEL NETWORKS UK LIMITED
DEBENTURE
relating (inter alia) to
Land at Xxxxxxx
X X Xxxx
King Solicitors
DX 47402 Kingsthorpe
Tel. 00000 000000
Fax. 00000 000000
email xxx@xxxxxxxx.xxx
Exhibit E
THIS RESTATEMENT AGREEMENT is made the day of 2004 in relation to
the Original Debenture (as defined) dated the 8th November 2002
BETWEEN
(1) NORTEL NETWORKS UK LIMITED incorporated under the Laws of England and
Wales (company number 3937799) whose registered office is at Maidenhead
Office Park Xxxxxxxxx Xxx Xxxxxxxxxx Xxxxx XX0 0XX ("Nortel")
(2) NORTEL NETWORKS CORPORATION a company incorporated under the Laws of
Delaware
(3) BOOKHAM TECHNOLOGY PLC incorporated under the laws of England and Wales
(Company Number 2298887) whose registered office is at 00 Xxxxxx Xxxx
Xxxxxx Xxxxxxxx Xxxxxxxxxxx XX00 0XX ("Bookham") and
RECITALS
1. Bookham and Nortel Networks Corporation are parties to the Acquisition
Agreement (as defined)
2. Nortel and Bookham are parties to an Agreement of even date (referred to as
"the Restructuring Agreement") relating to the revision of certain
arrangements regarding the provision of security
3. Bookham and certain of it Subsidiaries and Nortel Networks Corporation are
parties to a US Security Agreement dated 8 November 2002 ("the Original
Security Agreement")
4. To induce Bookham, Nortel and Nortel Networks Corporation to enter into the
transactions contemplated by the Restructuring Agreement the parties desire
to amend and restate the Original Debenture in its entirety as set out below
and so that Bookham should inter alia charge the Charged Property (as
defined in clause 2) to secure certain of the obligations under the Series
A-2 Note and the Series B-1 Note as defined in the Restructuring Agreement
pursuant to the provisions of the Restructuring Agreement
5. This Deed is entered into supplemental to the Restructuring Agreement the
Series A-2 Note and the Series B-1 Note and the amended and restated
security agreements of even date herewith (being together referred to as the
"Principal Agreements") and terms used in the Principal Agreements shall
have the same meaning in this deed unless specifically stated or the context
otherwise requires
NOW THIS DEED WITNESSES
1. Definitions and Interpretation
'Acquisition Agreement' means an agreement dated the 7th October 2002
and made between (1) Nortel Networks Corporation (2) Bookham Technology
plc
'Book Debts' means all or any one or more of the book debts and other
debts now and from time to time owing to Bookham in relation to the
Charged Property
'Event of Default' shall be any event so defined in either the Series
A-2 Note or Series B-1 Note
'Obligations' means the Obligations of Bookham, Bookham Inc and any
other Pledgor Parties and the Affiliates under the Series A-2 Note and
the Series B-1 Note and the Security Agreements (and any similar
agreements executed pursuant to the Acquisition Agreement)
'Original Debenture' a debenture dated the 8th November 2002 and made
between (1) Nortel Networks Corporation (2) Bookham Technology plc
'Property' means the property described in the Schedule and where the
context so permits or requires any part of it
'Rate of Interest' means 4% per annum above the base lending rate from
time to time of HSBC Bank plc
'Secured Liabilities' means the Obligations and all monies debts and
liabilities from time to time due owing or incurred by Bookham or
Bookham Inc to Nortel on any account pursuant to the Principal
Agreements
'Amended and Restated US Security Agreement' means an agreement of even
date made between (1) Bookham Technology plc, Bookham (US), Inc.,
Bookham (Canada), Inc., Bookham (Switzerland), Inc., New Focus Inc,
Xxxxxx Inc, Ignis Optics, Inc., and (2) Nortel Networks Corporation
2. Amendment and restatement
With effect from the 2 December 2004 the Original Debenture shall be
amended and restated so that it shall be read and construed for all
purposes as set out below
3. Charged Property
As security for the payment and discharge of the Secured Liabilities
Bookham with full title guarantee charges in favour of Nortel
3.1 by way of legal mortgage the Property and all rights relating to
it at the date hereof
3.2 by way of a fixed charge all plant and machinery now or in the
future owned and situated at the Property
3.3 by way of a floating charge all of the remainder of the Collateral
situate at or about the Property or otherwise used for the
purposes of the Business
Property charged by clause 2.1 to 2.3 inclusive "the Charged Property"
provided that (except in relation to the Property) there shall be
excluded any part of the Charged Property which is effectually charged
pursuant to the Amended and Restated US Security Agreement or any other
security agreements executed pursuant to the Acquisition Agreement or
the Restructuring Agreement or would be but for this deed
4. Deeds and Further assurance
4.1 Bookham shall deposit with Nortel and Nortel shall be entitled to
hold all deeds and documents on title relating to the Property
4.2 Bookham shall on written demand by Nortel and at its own cost
(a) execute a legal assignment of all or any of the Book Debts and
other debts charged by this deed to secure the payment or
discharge to Nortel of the Secured Liabilities
(b) execute a fixed legal mortgage of all or any of the property
of Bookham from time to time charged by way of floating charge
under clause 2 of this deed
(c) include in those mortgages or assignments any provisions which
Nortel reasonably requires and
(d) to do or execute any thing or document necessary or desirable
to perfect or prove Bookham's title to or interest in the
Charged Property
5. Bookham's obligations
Except with the written consent of Nortel (such consent not to be
unreasonably withheld) Bookham shall not:
5.1 create purport to create or allow to subsist any further mortgage
charge or lien over the whole or any part of the Charged Property
ranking in priority to or pari passu with this debenture
5.2 sell, let or part with the possession or otherwise dispose of or
deal with any part of the Charged Property (except in the ordinary
course of business in relation to the property comprised in the
floating charge until the same crystallises)
5.3 exercise any statutory or other powers of granting or agreeing to
grant or of accepting or agreeing to accept surrenders or leases
or tenancies of the present or future freehold and leasehold
property (including the Property)
6. Warranty of company powers
Bookham warrants that the transaction effected by this deed and
obligations or restrictions on its part contained in it do not
contravene any of the provisions of its memorandum and articles of
association or any other document affecting it
7. Insurance
Bookham shall keep all its property of an insurable nature comprised in
the Charged Property insured for its full reinstatement value for the
time being and shall duly and punctually pay all premiums and money
necessary for effecting and keeping up that insurance and on demand
produce to Nortel the policy of insurance and the receipt for any
premium payable in respect of it. Bookham shall apply all monies
received by virtue of any insurance of the whole or any part of the
Charged Property in making good or in recovering expenditure incurred
in making good any loss or damage or if Nortel in its discretion so
requires towards discharge of the Secured Liabilities. Bookham shall
ensure that all such monies which are not paid directly by the insurers
to Nortel shall be held by the recipient upon trust for Nortel and be
applied by Bookham in accordance with this Clause
8. Repair
Bookham shall keep any property comprised in the Charged Property in
good repair and free from any charges by the local authority for works
of private improvement or otherwise
9. Taxes, rent and covenants
Bookham shall pay all property taxes and any rent and comply with any
covenants and other provisions affecting any property comprised in the
Charged Property in so far as they are to be paid or complied with by
it and produce to Nortel on demand such evidence as Nortel reasonably
requires of its compliance with this covenant
10. Land Registry
Bookham shall not without Nortel 's written consent register under the
Land Registration Act 2002 any other person than itself as proprietor
of the Property and Bookham shall apply to the Chief Land Registrar for
the entry of the following restriction on the register of the Property
as follows:
"No disposition of the registered estate by the proprietor of the
registered estate is to be registered without a written consent signed
by the proprietor for the time being of the charge dated the day
of 2004 in favour of Nortel Networks UK Limited referred to
in the charges register or if appropriate signed on such proprietors
behalf by a director secretary "
11. Bookham's defaults
11.1 If Bookham fails to perform or observe any of its obligations
under this deed Nortel shall be entitled but not obliged to take
such steps as it thinks fit in or towards making good Bookham's
default without becoming liable as mortgagee in possession and for
that purpose to enter the Property
11.2 All money paid by Nortel in the exercise of its rights under this
deed shall be money properly paid by it and it shall pay such
money to Nortel on demand with interest at the Rate of Interest
from the date of payment by Nortel until the date of payment by
Bookham.
12. Freedom from accountability
If Nortel enters into possession of the Property or part of it it may
from time to time at its pleasure go out of such possession and shall
not be liable to account as lender in possession while in fact out of
possession if notice of such fact is within seven days after its
happening served on Bookham
13. Consolidation
Section 93 of the Law of Property Act 1925 shall not apply to this deed
14. Automatic crystallisation of floating charge
The floating charge created by this debenture shall become a fixed
charge over the respective assets to which it applies:
14.1 automatically in respect of all the assets of Bookham to which the
floating charge applies on the happening of any of the events
mentioned in clause 17.2(a)and 17.2(b)inclusive of this deed
14.2 by written notice from Nortel to Bookham specifying the date on
which the floating charge becomes fixed and the assets to which it
becomes attached and fixed upon the happening of any of the events
mentioned in clause 11.1 of this deed or Nortel's reasonable
belief that any of those events has or might happen
15. Attornment
Bookham irrevocably appoints Nortel or its nominee and each person
deriving title from Nortel and the receiver jointly and severally as
its attorney (with full power to appoint substitutes and sub
delegate)to execute any document or do anything which is required for
any of the purposes of this deed or the exercise or enforcement of any
of Nortel's rights and remedies under it. Bookham ratifies and confirms
anything done or purported to be done by any attorney appointed
pursuant to this Clause
16. Appointment of trustee
Bookham declares that as and when the security created by this deed
becomes enforceable and Nortel's powers of sale and appointing a
receiver under this deed become exercisable:
16.1 Bookham shall hold all the property charged (subject to Bookham's
right of redemption) upon trust to convey, assign or otherwise
deal with it in such manner and to such person as Nortel directs
and
16.2 Nortel shall become entitled at any time by deed to remove Bookham
or any other person from office as a trustee of that property or
any part of it and to appoint one or more trustees of it or any
part of it as additional trustees or in the place of any person
who has ceased to be a trustee
17. Powers of sale and appointment of receiver
17.1 Section 103 of the Law of Property Act 1925 shall not apply to
this deed
17.2 The statutory and other powers of sale and appointing a receiver
shall arise on the date of this deed and shall become exercisable
by Nortel immediately whether or not Nortel has entered into or
taken possession of the whole or any part of the Charged Property
if
(a) there is an Event of Default
(b) Bookham requests Nortel to appoint a receiver
18. Appointment and status of receiver
18.1 In this deed any reference to a receiver shall include a reference
to a receiver and manager to an administrative receiver and any
substituted receiver
18.2 At any time after the power of appointing a receiver has become
exercisable Nortel may appoint by writing any person or persons
(whether or not an officer of Nortel) to be a receiver of all or
any part of the Charged Property upon such terms as to
remuneration and otherwise as Nortel thinks fit and may from time
to time by writing remove any receiver so appointed or require him
to resign and appoint another in his place or vary the receiver's
remuneration
18.3 A receiver so appointed shall be the agent of Bookham and Bookham
shall be responsible for the receiver's acts and defaults and for
his remuneration costs, charges and expenses to the exclusion of
liability on the part of Nortel
18.4 Nortel shall not be liable to Bookham for any loss or damage
arising from any act or omission of the receiver
19. Powers of receiver
A receiver appointed under this deed shall be entitled to exercise in
the interests of Nortel all powers conferred on a receiver by the Law
of Property Xxx 0000 and by way of addition to and without limiting
those powers he may
19.1 take possession of and get in all or any part of the Charged
Property
19.2 carry on or concur in carrying on Bookham's business comprised in
the Charged Property
19.3 raise money from Nortel or others on the security of any Charged
Property
19.4 sell or concur in selling any of the Charged Property or otherwise
deal with it on such terms in the interests of Nortel as he thinks
fit
19.5 let or concur in letting and to terminate or to accept surrenders
of leases or tenancies of any of the Charged Property in such
manner and generally on such terms and conditions as he thinks fit
19.6 make any arrangement or compromise between Bookham and any other
person which he thinks expedient
19.7 bring prosecute enforce defend and abandon all such actions suits
and proceedings in relation to the Charged Property as he may in
his discretion think fit
19.8 do all other things as he considers to be incidental or conducive
to any of the above matters and powers and which he may lawfully
do as agent for Bookham or otherwise incidental or conducive to
the preservation improvement or realisation of the Charged
Property and
19.9 appoint managers and agents for the above purposes at such
salaries, commissions or other remuneration as he determines
20. Money realised by receivers
20.1 The net profits of carrying on Bookham's business and the net
proceeds of any sale by the receiver shall be applied by him
(after provision for his remuneration and all matters specified in
paragraphs (i), (ii) and (iii) of the Law of Property Xxx 0000, s
109(8), and the Insolvency Xxx 0000, s 386 and Sch 6) in or
towards satisfaction of the Secured Liabilities and any surplus
shall be paid to Bookham
20.2 Any payment made by the receiver to Nortel may be made on account
of principal money or interest or partly in one way and partly in
the other as the receiver deems expedient
21. Incorporation of provisions of the Amended and Restated US Security
Agreement
The provisions of the Amended and Restated US Security Agreement shall
be incorporated in this deed save in so far as they are not
inconsistent with the provisions of this deed
22. Waiver
None of the demand for or the acceptance of payments under this deed or
the failure by Nortel to enforce any of the terms or conditions of this
deed at any time or for any period will release or exonerate or in any
way affect the liability of Bookham or be a waiver of
22.1 those terms or conditions
22.2 the right of Nortel at any time afterwards to enforce each and
every term and condition of this deed or
22.3 any penalty attached to their non-performance
23. Notices
23.1 Any notice given under this deed shall be in writing and may be
served
(a) personally
(b) by registered or recorded delivery mail
(c) by telex or facsimile transmission (the latter confirmed by
telex or post) or
(d) by any other means which any party specifies by notice to the
others
23.2 Each party's address for the service of notice shall be as
specified in the Restructuring Agreement
23.3 A notice shall be deemed to have been served
(a) if it was served in person, at the time of service
(b) if it was served by post, 48 hours after it was posted and
(c) if it was served by telex or facsimile transmission, at the
time of transmission.
24. Interpretation
24.1 Except where the context renders it absurd or impossible every
reference to any party to this deed shall include his or her
successors in title and personal representatives, by and against
whom this agreement shall be enforceable as if they had been
originally named as parties
24.2 In this deed
(a) words expressed in any gender shall where the context so
requires or permits include any other gender
(b) words importing persons shall include bodies corporate and
partnerships and other incorporated bodies and vice versa
(c) words expressed in the singular shall where the context so
requires or permits include the plural and
(d) where any party is more than one person
(i) that party's obligations in this deed shall take effect
as joint and several obligations
(ii) anything in this deed which applies to that party shall
apply to all of those persons collectively and each of
them separately
(iii) the benefits contained in this deed in favour of that
party shall take effect as conferred in favour of all of
those persons collectively and each of them separately
and
(iv) the receipt of the survivor of joint holders of this
deed shall be a good discharge to Bookham
24.3 The headings to clauses are inserted for ease of reference only
and shall not affect the construction of this deed
24.4 References in this deed to anything which any party is required to
do or not to do shall include its acts, defaults and omissions,
whether
(a) direct or indirect
(b) on his own account or
(c) for or through any other person and
(d) those which he permits or suffers to be done or not done by
any other person.
24.5 The effect of all obligations affecting Bookham under this deed is
cumulative and no obligation shall be limited or modified by any
other of those obligations unless there is in this deed an express
limitation or modification.
25. Subsidiaries
To the extent that any part of the Charged Property is transferred
by Bookham to a Subsidiary (as defined in the Acquisition
Agreement) in accordance with the provisions of the Principal
Agreements Bookham hereby undertakes to procure that such
Subsidiary shall grant a deed to Nortel in the same terms hereof
(mutatis mutandis) in respect of such Charged Property.
26. Governing law
26.1 This deed shall be construed in accordance with English law
26.2 All Actions (as defined in the Acquisition Agreement) arising out
of or relating to this deed shall be heard and determined
exclusively in a New York state or federal court sitting in the
County of New York and the parties hereby irrevocably submit to
the exclusive jurisdiction of such courts
The Schedule
All that freehold property being land at Brixham Road Paignton Devon being the
whole of the land comprised in Title Number DN478359
SIGNED AS A DEED by BOOKHAM TECHNOLOGY PLC
By:
---------------------------------------------
Name:
Title: Director
and
By:
---------------------------------------------
Name:
Title: Secretary/Director
SIGNED AS A DEED by NORTEL NETWORKS UK LIMITED acting by
By:
---------------------------------------------
Name:
Title: Attorney-in-Fact
EXECUTED by NORTEL NETWORKS
CORPORATION
By:
Name
Title:
DATED 2002
--------------------------------
(1) BOOKHAM TECHNOLOGY PLC
and
(2) NORTEL NETWORKS UK LIMITED
DEBENTURE
relating (inter alia) to
Land at Paignton
X X Xxxx
King Solicitors
DX 47402 Kingsthorpe
Tel. 00000 000000
Fax. 00000 000000
email xxx@xxxxxxxx.xxx
Exhibit F
AMENDED AND RESTATED SECURITY AGREEMENT
THIS AMENDED AND RESTATES SECURITY AGREEMENT (the "Security
Agreement"), dated as of , 2004, is made by Bookham (Canada), Inc., a
New Brunswick corporation (f/k/a Bookham Acquisition Inc., the "Pledgor"), in
favor of Nortel Networks UK Limited (the "Pledgee"), as agent for the holders of
the Series B-1 Note and the Series A-2 Notes. Each of the foregoing parties is
referred to herein individually as a "Party" and together as the "Parties."
RECITALS:
(a) Bookham Technology plc, a public limited company incorporated under
the laws of England and Wales ("Bookham plc") and Nortel Networks
Corporation ("Nortel") are parties to an Acquisition Agreement
dated as of October 7, 2002 (as amended through the date hereof,
the "Acquisition Agreement"); and
(b) The Pledgor, the Pledgee and Nortel are parties to a Restructuring
Agreement (the "Restructuring Agreement"), dated as of the date
hereof; and
(c) The Pledgor and Nortel are parties to a Security Agreement, dated
as of November 8, 2002 (the "Original Security Agreement"); and
(d) To induce the Pledgee and Nortel to enter into the transactions
contemplated by the Restructuring Agreement, the Pledgor and the
Pledgee desire to amend and restate the Original Security Agreement
in its entirety as set forth herein.
In consideration of the foregoing, the mutual agreements contained
herein and for other good and valuable consideration (the receipt and
sufficiency of which are hereby acknowledged), the Parties agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.1 Definitions.
Capitalized terms used and not defined in this Security Agreement shall
have the respective meanings assigned to them in the Acquisition Agreement. In
addition, in this Security Agreement, the following terms have the meanings
specified below:
"Acquisition Agreement" has the meaning set forth in the recitals
hereto.
"Bookham plc" has the meaning set forth in the recitals hereto.
"Business" has the meaning set forth in the Acquisition Agreement.
"Collateral" means: (a) all of the Assets (excluding Inventory); (b)
all Improvements (as defined in the Intellectual Property Agreement) to
the Intellectual Property that is included in the Assets; (c) all
property, plant and equipment of the Pledgor now or hereafter owned,
excluding Excluded Equipment and leasehold improvements; and (d) if an
Event of Default shall have occurred and be continuing, any Proceeds of
each of the foregoing received or receivable.
"Copyright" means all of the following: (a) all copyright rights in any
work subject to the copyright laws of Canada, the United States or any
other country (whether or not the underlying works of authorship have
been published), whether as author, assignee, transferee or otherwise
and all copyrightable works of authorship (whether or not published),
(b) all registrations and applications for registration of any such
copyright in Canada, the United States or any other country, including
registrations, recordings, supplemental registrations and pending
applications for registration in the Canadian Intellectual Property
Office, the United States Copyright Office or otherwise, (c) all
renewals of any of the foregoing and (d) any claims or causes of action
or defenses arising out of or related to any of the foregoing.
"Excluded Equipment" means any item of Equipment owned by the Pledgor
that is subject to a PMSI Lien, provided that the Pledgor shall have
designated such item as such to the Pledgee by written notice within
five (5) Business Days of having acquired such item of Equipment.
"Equipment" means "equipment" (as defined in the PPSA) and shall
include all equipment, furniture and furnishings, and all tangible
personal property similar to any of the foregoing, including tools,
parts, supplies and operating manuals directly related to any of the
foregoing of every kind and description, and all improvements,
accessions or appurtenances thereto, that are now or hereafter owned by
the Pledgor. The term "Equipment" shall not include Fixtures.
"Event of Default" has the meaning set forth in the Series B-1 Note or
the Series A-2 Note.
"Fixtures" means all items of Equipment, whether now owned or hereafter
acquired, that become so related to particular real estate that an
interest in them arises under any real estate Law applicable thereto.
"Indemnified Parties" has the meaning set forth in Section 5.2.
"Obligations" means the obligations of the Pledgor under the Series B-1
Note, the Series A-2 Note and this Security Agreement, including the
guaranty obligations of the Pledgor under the Series B-1 Note and the
Series A-2 Note.
"Nortel" has the meaning set forth in the recitals hereto.
"Party" or "Parties" has the meaning set forth in the preamble hereto.
"Permitted Liens" means the following Liens: (a) Liens for taxes not
yet due or that are being contested in good faith; (b) statutory Liens
of landlords and Liens of carriers, warehousemen, mechanics,
materialmen and other like Liens imposed by law and arising in the
ordinary course of business; (c) Liens incurred or deposits made in the
ordinary course of business in connection with worker's compensation,
unemployment insurance or other types of social security; (d) minor
defects of title, easements, rights-of-way, restrictions and other
similar charges or encumbrances of record that individually or in the
aggregate, do not interfere and would not reasonably be expected to
interfere with the continued use and operation of the asset to which
they relate in the ordinary course of business; (e) Liens existing on
the date of the Acquisition Agreement that were not created by the
Pledgor or any of its Subsidiaries; and (f) Liens arising under any of
the Transaction Documents or the Restructuring Agreement.
"Pledgee" has the meaning set forth in the preamble hereto.
"Pledgor" has the meaning set forth in the preamble hereto.
"PMSI Lien" means any Lien on any Equipment acquired, constructed or
improved by the Pledgor, provided that (a) all such Liens secure
Indebtedness (including capitalized lease obligations) not to exceed
U.S.$40,000,000 in the aggregate at any one time outstanding that is
incurred to finance such acquisition, construction or improvement (and
such Indebtedness is incurred prior to or within 180 days after the
completion of such acquisition, construction or improvement), (ii) such
Indebtedness secured thereby does not exceed 100% of the cost of
acquiring, constructing or improving such fixed or capital assets and
(iii) such Liens do not apply to any other property or assets of the
Pledgor.
"PPSA" means the Personal Property Security Act (Ontario), as the same
may be amended from time to time.
"Proceeds" means "proceeds" (as defined in the PPSA) and shall include
any consideration received from the sale, exchange, license, lease or
other disposition of any asset or property that constitutes Collateral,
any value received as a consequence of the possession of any Collateral
and any payment received from any insurer or other Person or entity as
a result of the destruction, loss, theft, damage or other involuntary
conversion of whatever nature of any asset or property which
constitutes Collateral, any property collected on or distributed on
account of the Collateral, any rights arising out of the Collateral,
and any and all other amounts from time to time paid or payable under
or in connection with any of the Collateral.
"Security Agreement" has the meaning set forth in the preamble hereto.
"Security Interest" has the meaning set forth in Section 2.1.
"Series A-2 Note" means the Series A-2 Senior Secured Note due November
8, 2007 in an original principal amount of U.S. $20,000,000 issued to
the Pledgee by Bookham, Inc.
"Series B-1 Note" means the Series B-1 Senior Secured Note due November
8, 2006 in an original principal amount of U.S. $30,000,000 issued to
the Pledgee by Bookham Technology plc.
Section 1.2 Terms Generally.
(a) Words in the singular shall include the plural and vice versa, and
words of one gender shall include the other genders, in each case,
as the context requires, (b) the term "hereof," "herein," and
"herewith" and words of similar import shall, unless otherwise
stated, be construed to refer to this Security Agreement and not to
any particular provision of this Security Agreement, and Article,
Section, paragraph and Exhibit references are to the Articles,
Sections, paragraphs and Exhibits to this Security Agreement unless
otherwise specified and (c) the word "including" and words of
similar import when used in this Security Agreement shall mean
"including, without limitation" unless otherwise specified.
ARTICLE 2
PLEDGE OF COLLATERAL
Section 2.1 Security Interest.
(1) The Pledgor hereby grants to the Pledgee, its successors and assigns a
security interest in all of the Pledgor's right, title and interest in,
to and under the Collateral, and to any certificates or instruments
evidencing the portion of the Collateral owned by the Pledgor (the
"Security Interest"). The Security Interest secures the payment and
performance of the Obligations.
(2) Without limiting the generality of Section 2.1(1), the Pledgee is
hereby authorized to file one or more financing statements (including
fixture filings), continuation statements, filings with the Canadian
Intellectual Property Office (or any successor office or any similar
office in any other country) or other documents for the purpose of
perfecting, confirming, continuing, enforcing or protecting the
Security Interest granted by the Pledgor, without the signature of the
Pledgor, and naming the Pledgor as debtor and the Pledgee as secured
party.
Section 2.2 Attachment.
(1) The Pledgor acknowledges that (i) value has been given, (ii) it has
rights in the Collateral, (iii) it has not agreed to postpone the time
of attachment of the Security Interest, and (iv) it has received a
duplicate original copy of this Security Agreement.
(2) The Pledgor shall promptly inform the Pledgee in writing of the
acquisition by the Pledgor of any personal property which is not
adequately described in the schedules to this Security Agreement, and
the Pledgor will execute and deliver, at its own expense, from time to
time, amendments to this Security Agreement and its schedules or
additional security agreements or schedules as may be required by the
Pledgee.
Section 2.3 Scope of Security Interest.
(1) To the extent that the creation of the Security Interest would
constitute a breach or permit the acceleration or termination of any
agreement, right, licence or permit of the Pledgor (each, a "Restricted
Asset"), the Security Interest shall not attach to the Restricted Asset
but the Pledgor shall hold its interest in the Restricted Asset in
trust for the Pledgee, and shall assign such Restricted Asset to the
Pledgee or as it may direct immediately upon obtaining the consent of
the other party.
(2) The Security Interest shall not extend or apply to the last day of the
term of any lease or sublease or any agreement for a lease or sublease
now held or hereafter acquired by the Pledgor in respect of Real
Property, but the Pledgor shall stand possessed of any such last day
upon trust to assign and dispose of it as the Pledgee may direct.
Section 2.4 Care and Custody of Collateral.
The Pledgee may, after the Security Interest shall have become
enforceable, (i) notify any Person obligated on an account or on chattel paper
or any obligor on an instrument to make payments to the Pledgee whether or not
the Pledgor was previously making collections on such accounts, chattel paper or
instruments, and (ii) assume control of any proceeds arising from the
Collateral.
Section 2.5 No Assumption of Liability.
The Security Interest is granted as security only and shall not subject
the Pledgee to, or in any way alter or modify, any obligation or liability of
the Pledgor with respect to or arising out of the Collateral.
ARTICLE 3
ENFORCEMENT
Section 3.1 Enforcement.
The Security Interest shall be and become enforceable against the
Pledgor upon the occurrence and during the continuance of an Event of Default.
Section 3.2 Remedies Upon an Event of Default.
(1) Whenever the Security Interest has become enforceable, the Pledgor
agrees to deliver each item of Collateral to the Pledgee on demand, and
the Pledgee shall be entitled but shall not be obligated, at the same
or different times, to exercise all of the rights, powers and remedies
(whether vested in it by this Agreement or by Law) for the protection
and enforcement of its rights in respect of the Collateral, including
all applicable rights and remedies of a secured party upon default
under the PPSA, and the Pledgee shall be entitled but shall not be
obligated, without limitation, to exercise the following rights, which
the Pledgor agrees to be commercially reasonable:
(a) to take possession of the Collateral and without liability for
trespass to enter any premises where the Collateral may be located
for the purpose of taking possession of or removing the Collateral;
(b) to receive the proceeds and all other amounts payable in respect of
the Collateral otherwise payable to the Pledgor;
(c) to transfer all or any part of the Collateral into the Pledgee's
name or the name of its nominee or nominees, including all
Collateral rights of assignment to execute any other documents as
may be necessary or appropriate to reflect such assignments of
record;
(d) to give all consents, waivers and ratifications in respect of the
Collateral and otherwise act with respect thereto as though it were
the outright owner thereof (the Pledgor hereby irrevocably
constituting and appointing the Pledgee the proxy and
attorney-in-fact of the Pledgor, with full power of substitution to
do so);
(e) with respect to any Collateral consisting of Intellectual Property,
on demand, to (A) cause the Security Interest to become an
assignment, transfer and conveyance of any of or all of such
Collateral by the Pledgor to the Pledgee (except to the extent any
such assignment, transfer or conveyance thereof would result in a
loss of such Intellectual Property), (B) to license or sublicense,
whether general, special or otherwise, and whether on an exclusive
or non-exclusive basis, any such Collateral throughout the world on
such terms and conditions and in such manner as the Pledgee shall
determine (other than in violation of any then existing licensing
arrangements to the extent that waivers cannot be obtained), (C) at
any time and from time to time, in its sole and reasonable
discretion, enforce (and shall have the exclusive right to enforce)
against any licensee or sublicensee all rights and remedies of the
Pledgor in, to and under any such Collateral and take or refrain
from taking any action under any thereof, and the Pledgor agrees to
reimburse the Pledgee for all reasonable expenses it incurs in
taking any such lawful action; and (D) upon request by the Pledgee
(which shall not be construed as implying any limitation on rights
or powers), the Pledgor will execute and deliver to the Pledgee a
power of attorney prepared by the Pledgee, in form and substance
satisfactory to the Pledgee, for the implementation of any sale,
lease, license or other disposition of any of the Pledgor's
Collateral or any action related thereto;
(f) to the fullest extent permitted by Law, and in a commercially
reasonable manner, at any time or from time to time to collect,
realize, sell, assign or otherwise dispose of, or grant options to
purchase, all or any part of the Collateral, or any interest
therein, at any public or private sale, or to redeem or otherwise
dispose of or realize on (all of which are waived by the Pledgor),
for cash, on credit or for other property, for immediate or future
delivery without any assumption of credit risk, and for such price
or prices and on such terms as the Pledgee in its absolute
discretion may determine. Each purchaser at any such sale shall
hold the property so sold absolutely free from any claim or right
on the part of the Pledgor, their successors and assigns, and the
Pledgor waives and releases to the fullest extent permitted by Law
any right or equity of redemption with respect to the Collateral,
whether before or after sale hereunder, and all rights, if any, of
marshalling the Collateral and any other security for the
Obligations or otherwise, and all rights, if any, of stay and/or
appraisal which they now have or may at any time in the future have
under rule of Law now existing or hereafter enacted. At any such
sale, unless prohibited by applicable Law, the Pledgee may bid for
and purchase (by bidding in Obligations or portion thereof or
otherwise) all or any part of the Collateral so sold free from any
such right or equity of redemption. The Pledgee is authorized to
comply with any limitation or restriction in connection with any
sale of Collateral as it may be advised by counsel is necessary in
order to (i) avoid any violation of applicable Law or (ii) obtain
any required approval of the sale or of the purchase by any
Governmental Authority, and the Pledgor agrees that such compliance
shall not result in such sale being considered or deemed not to
have been made in a commercially reasonable manner and that the
Pledgee shall not be liable or accountable to the Pledgor for any
discount allowed by reason of the fact that such Collateral is sold
in compliance with any such limitation or restriction;
(g) appoint by instrument in writing a receiver (which term as used in
this Security Agreement includes a receiver and manager) or agent
of all or any part of the Collateral and removal or replacement
from time to time of any receiver or agent;
(h) institute proceedings in any court of competent jurisdiction for
the appointment of a receiver of all or any part of the Collateral;
(i) institute proceedings in any court of competent jurisdiction for
sale or foreclosure of all or any part of the Collateral;
(j) file proofs of claim and other documents to establish claims to the
Collateral in any proceeding relating to the Pledgor; and
(k) pursue or initiate any other remedy or proceeding authorized or
permitted under the PPSA or otherwise by Law or equity.
(2) Each right, power and remedy of the Pledgee provided for in this
Security Agreement or the Acquisition Agreement or now or hereafter
existing at Law or in equity or by statute shall be cumulative and
concurrent and shall be in addition to every other such right, power or
remedy. The Pledgee shall not be bound to exercise any right or remedy,
and the exercise or beginning of the exercise by the Pledgee of any one
or more of the rights, powers or remedies provided for in this Security
Agreement or the Acquisition Agreement or now or hereafter existing at
Law or in equity or by statute or otherwise shall not preclude the
simultaneous or later exercise by the Pledgee of all such other rights,
powers or remedies, including the right to claim for any deficiency,
and no failure or delay on the part of the Pledgee to exercise any such
right, power or remedy shall operate as a waiver thereof.
(3) All monies collected by the Pledgee upon any sale or other disposition
of the Collateral, together with all other monies received by the
Pledgee hereunder, shall be applied as follows:
(a) first, to the payment of all Obligations to the Pledgee; and
(b) second, to the extent monies remain after the application pursuant
to the preceding clause (a), to a payment to the Pledgor or to
whomever may be lawfully entitled to receive such payment.
(4) It is understood and agreed that the Pledgor shall be liable to the
extent of any deficiency between (1) the amount of the proceeds of the
Collateral applied pursuant to clause (a) of Section 3.2(3) and (2) the
outstanding amount of the Obligations.
(5) Upon any sale of the Collateral by the Pledgee hereunder (whether by
virtue of the power of sale herein granted, pursuant to judicial
process or otherwise), the receipt by the Pledgee or the officer making
the sale of the purchase price shall be a sufficient discharge to the
purchaser or purchasers of the Collateral so sold, and such purchaser
or purchasers shall not be obligated to see to the application of any
part of the purchase money paid over to the Pledgee or such officer or
be answerable in any way for the misapplication or nonapplication
thereof.
Section 3.3 Receiver's Powers.
(1) Any receiver appointed by the Pledgee shall be vested with the rights
and remedies which could have been exercised by the Pledgee in respect
of the Pledgor, or the Collateral and such other powers and discretions
as are granted in the instrument of appointment and any supplemental
instruments. The identity of the receiver, its replacement and its
remuneration shall be within the sole and unfettered discretion of the
Pledgee.
(2) Any receiver appointed by the Pledgee shall act as agent for the
Pledgee for the purposes of taking possession of the Collateral, but
otherwise and for all other purposes (except as provided below), as
agent for the Pledgor. The receiver may sell, lease, or otherwise
dispose of Collateral as agent for the Pledgor or as agent for the
Pledgee as the Pledgee may determine in its discretion. The Pledgor
agrees to ratify and confirm all actions of the receiver acting as
agent for the Pledgor, and to release and indemnify the receiver in
respect of all such actions.
(3) The Pledgee, in appointing or refraining from appointing any receiver,
shall not incur liability to the receiver, the Pledgor or otherwise and
shall not be responsible for any misconduct or negligence of the
receiver.
Section 3.4 Dealing with Collateral.
Except as otherwise provided by Law or this Security Agreement, the
Pledgee shall not be (i) liable or accountable for any failure to collect,
realize or obtain payment in respect of the Collateral, (ii) bound to institute
proceedings for the purpose of collecting, enforcing, realizing or obtaining
payment of the Collateral or for the purpose of preserving any rights of any
Persons in respect of the Collateral, (iii) responsible for any loss occasioned
by any sale or other dealing with the Collateral or by the retention of or
failure to sell or otherwise deal with the Collateral, or (iv) bound to protect
the Collateral from depreciating in value or becoming worthless.
Section 3.5 Standards of Sale.
Without prejudice to the ability of the Pledgee to dispose of the
Collateral in any manner which is commercially reasonable, the Pledgor
acknowledges that:
(a) Collateral may be disposed of in whole or in part;
(b) Collateral may be disposed of by public auction, public tender or
private contract, with or without advertising and without any other
formality;
(c) any assignee of such Collateral may be a customer of the Pledgee;
(d) a disposition of Collateral may be on such terms and conditions as
to credit or otherwise as the Pledgee, in its sole discretion, may
deem advantageous; and
(e) the Pledgee may establish an upset or reserve bid or price in
respect of Collateral.
Section 3.6 Dealings by Third Parties.
(1) No Person dealing with the Pledgee or an agent or receiver shall be
required to determine (i) whether the Security Interest has become
enforceable, (ii) whether the powers which such Person is purporting to
exercise have become exercisable, (iii) whether any money remains due
to the Pledgee by the Pledgor, (iv) the necessity or expediency of the
stipulations and conditions subject to which any sale or lease is made,
(v) the propriety or regularity of any sale or other dealing by the
Pledgee with the Collateral, or (vi) how any money paid to the Pledgee
has been applied.
(2) Any purchaser of all or any part of the Collateral from the Pledgee or
a receiver or agent shall hold the Collateral absolutely free from any
claim or right of whatever kind, including any equity of redemption, of
the Pledgor, which it specifically waives (to the fullest extent
permitted by Law) as against any such purchaser together with all
rights of redemption, stay or appraisal which the Pledgor has or may
have under any Law now existing or hereafter adopted.
Section 3.7 Documentation; Further Assurances.
(1) The Pledgor has caused to be delivered to the Pledgee fully executed
PPSA financing statements (including fixture filings, as applicable),
mortgages and other appropriate filings, recordings and registrations
containing a description of the Collateral, in each case prepared by
the Pledgee, for filing in all applicable recording or registry offices
of each applicable jurisdiction, as may be required to publish notice
of and protect the validity of and to establish a legal, valid and
perfected security interest in favour of the Pledgee in respect of all
Collateral in which the Security Interest may be perfected by filing,
recording or registration in Canada or any of the Provinces of Canada
(or in each case any political subdivision thereof), or in any other
necessary jurisdiction.
(2) The Pledgor will promptly cause to be delivered to the Pledgee, with
respect to Canadian Patents and Canadian registered Trademarks and
Business Names (and Trademarks and Business Names for which Canadian
registration applications are pending) comprised within the Collateral
and with respect to Canadian registered Copyrights comprised within the
Collateral, fully executed security agreements and other documents
containing a description of all such Collateral, in each case prepared
by the Pledgee, for registration with the Canadian Intellectual
Property Office pursuant to the Patent Act (Canada), the Trade-marks
Act (Canada) and the Copyright Act (Canada) and the regulations
thereunder, as applicable, and otherwise as may be required pursuant to
the Laws of any other jurisdiction in Canada (or any political
subdivision thereof) to protect the validity of and to establish a
legal, valid and perfected security interest in favour of the Pledgee
in respect of all Collateral consisting of Patents, Trademarks and
Business Names and Copyrights in which a security interest may be
perfected by filing, recording or registration in Canada or any of the
Provinces in Canada (or any political subdivision thereof) or in any
other necessary jurisdiction.
(3) In addition, the Pledgor shall execute and deliver from time to time as
may be reasonably requested by the Pledgee, to the Pledgee such other
instruments, agreements, certificates and documents (including PPSA
financing statements and mortgages) and other appropriate filings,
recordings and registrations containing a description of the
Collateral, in each case prepared by the Pledgee, to evidence, confirm,
perfect and maintain the Liens and Security Interests granted or
required to be granted to the Pledgee by this Security Agreement, and
shall fully cooperate with the Pledgee and perform all additional acts
that are necessary to effect the purposes of the foregoing.
(4) The Pledgor shall reimburse the Pledgee on demand for the reasonable
fees (including legal fees) and expenses incurred by the Pledgee in
connection with the preparation, filing, publication, recording or
registration of any instruments, agreements, certificates and documents
(including PPSA financing statements and mortgages) pursuant to Section
3.7(3) subject to the U.S.$75,000 limitation set forth in Section 4(i)
of the Restructuring Agreement.
(5) If the Pledgor fails to perform any act required by this Security
Agreement, the Pledgee may (in the name of the Pledgor or otherwise)
perform, or cause performance of, such act. The Pledgor shall reimburse
the Pledgee on demand for its reasonable fees (including legal fees)
and expenses incurred by the Pledgee in connection therewith.
Section 3.8 Security Interest Absolute.
All rights of the Pledgee hereunder, the grant of the Security Interest
in the Collateral and all obligations of the Pledgor hereunder, shall be
absolute and unconditional pending satisfaction in full of the Obligations
(subject to Section 3.9(2) hereof) irrespective of:
(a) any claim as to the validity, regularity or enforceability of any
of the Transaction Documents;
(b) any change in the time, manner or place of payment of, or in any
other term of, all of or any of the Obligations, or any other
amendment or waiver of or any consent to any departure from any of
the Transaction Documents or any other agreement or instrument
relating to any of the foregoing;
(c) any change in the Laws, rules or regulations of any jurisdiction;
(d) the occurrence of any Event of Default;
(e) any exchange, release or non-perfection of the Pledgee's security
interest in any other collateral, or any release or amendment or
waiver of or consent to or departure from any guarantee, for all or
any of the Obligations; or
(f) any other circumstance that might otherwise constitute a defense
available to, or a discharge of, the Pledgor in respect of the
Obligations or in respect of this Security Agreement.
Section 3.9 Termination and Release of Security Interest.
(1) Upon satisfaction in full of all Obligations, the Security Interest
contained in this Article 3 shall terminate (provided that all
indemnities set forth herein, including those in Section 5.2, shall
survive any such termination), and within thirty (30) Business Days the
Pledgee, at the request of the Pledgor, shall execute and deliver to
the Pledgor a proper instrument or instruments acknowledging the
satisfaction and termination of the Security Interest (including
discharges of mortgages), and shall duly assign, transfer and deliver
to the Pledgor (without recourse and without any representation or
warranty, except that it has not previously encumbered or sold such
Collateral in violation of this Security Agreement) such of the
Collateral as may be in the possession of the Pledgee and as has not
theretofore been sold or otherwise applied or released pursuant to this
Security Agreement, together with any monies at the time held by the
Pledgee hereunder.
(2) In the event that any part of the Collateral is sold in connection with
a sale permitted by terms of this Security Agreement or the Acquisition
Agreement or is otherwise released at the direction of the Pledgee, and
the proceeds of such sale or sales or from such release are to be
applied in accordance with the terms of this Security Agreement or the
Acquisition Agreement to the extent required to be so applied, within
thirty (30) Business Days the Pledgee, at the request of the Pledgor,
shall release such Collateral from this Security Agreement, and shall
duly assign, transfer and deliver to the Pledgor (without recourse and
without any representation or warranty, except that it has not
previously encumbered or sold such Collateral in violation of this
Security Agreement) such of the Collateral as is then being (or has
been) so sold or released and as may be in possession of the Pledgee
and has not theretofore been released pursuant to this Security
Agreement.
(3) The Pledgor shall reimburse the Pledgee on demand for the reasonable
fees (including legal fees) and expenses incurred by the Pledgee in
connection with the preparation, filing, publication, recording or
registration of any instruments, agreements, certificates and documents
(including PPSA financing statements) pursuant to Section 3.9(1) or
Section 3.9(2), subject to the U.S.$75,000 limitation set forth in
Section 4(i) of the Restructuring Agreement.
ARTICLE 4
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 4.1 Representations and Warranties.
The Pledgor represents and warrants that, as of the date hereof:
(a) The Collateral is owned solely by the Pledgor free and clear of any
Lien, except the Liens and the Security Interest created by this
Agreement and Permitted Liens. The Pledgor has not filed or
consented to the filing of any financing statement or analogous
document under the PPSA or any other applicable Laws covering any
Collateral or any assignment in which the Pledgor assigns any
Collateral or any security agreement or similar instrument covering
any Collateral with any foreign governmental, municipal or other
office, which financing statement or analogous document,
assignment, security agreement or similar instrument is still in
effect, except in each case for Liens and the Security Interest
created by this Agreement and Permitted Liens.
(b) The Security Interest constitutes a legal and valid security
interest in all Collateral securing the payment and performance of
the Obligations. The Security Interest is and shall have priority
over and be prior to any other Lien on any of the Collateral, other
than Permitted Liens or any Liens created by or through the action
or inaction of the Pledgee or any of its Subsidiaries.
(c) The Pledgor has good and valid rights in and title to the
Collateral with respect to which it has purported to grant a
Security Interest hereunder and has full power and authority to
grant to the Pledgee the Security Interest in such Collateral
pursuant hereto and to execute, deliver and perform its obligations
in accordance with the terms of this Security Agreement, without
the consent or approval of any other Person other than any consent
or approval which has been obtained.
(d) Each of the Subsidiaries of Bookham, Inc. existing or having assets
in Canada is a Party.
(e) At the date of this Security Agreement and for the four months
immediately preceding the date of this Agreement, (i) the exact
legal name, type of organization and sole jurisdiction of
organization (together with the organizational identification
number, if any issued by such jurisdiction) of the Pledgor are as
set forth in Exhibit A, (ii) the place of business of the Pledgor,
or if it has more than one place of business, its chief place of
business and chief executive office, are as set forth in Exhibit B,
and (iii) all locations of the Collateral are as set forth in
Exhibit C.
Section 4.2 Covenants.
(1) The Pledgor covenants and agrees that it shall, at its own cost and
expense, take any and all actions reasonably necessary to defend title
to the Collateral against all Persons.
(2) The Pledgor covenants and agrees that it shall remain liable to observe
and perform all the conditions and obligations to be observed and
performed by it under each contract, agreement or instrument relating
to the Collateral, all in accordance with the terms and conditions
thereof.
(3) The Pledgor agrees that it shall not distribute, sell, assign,
transfer, lease or otherwise dispose of any Collateral without the
prior written consent of the Pledgee while the Obligations are
outstanding, except for the disposition of obsolete or worn out
property and excess equipment in the ordinary course of business,
having a fair market value not to exceed U.S.$5,000,000 in the
aggregate.
(4) Unless Bookham Technology plc shall have given the Pledgee not less
than thirty (30) days' prior notice thereof, the Pledgor shall not
change its name, type of entity, jurisdiction of organization or the
location of its principal place of business or chief executive office.
Section 4.3 Covenants Regarding Patent, Trademark and Copyright Collateral.
(1) The Pledgor agrees that it will not do or cause to be done any act or
omission whereby any Patent that is included in the Collateral and that
is, in the Pledgor's reasonable judgment, material to the Business,
will become invalidated or dedicated to the public.
(2) The Pledgor shall notify the Collateral Agent promptly if it knows that
any Patent, Trademark and Business Name or Copyright that is, in the
Pledgor's reasonable judgment, material to the Business may become
abandoned, lost or dedicated to the public, or of any adverse
determination or development (including the institution of, or any such
determination or development in, any proceeding in the Canadian
Intellectual Property Office or any court or similar office of any
country) regarding the Pledgor's ownership of any such Patent,
Trademark and Business Name or Copyright, its right to register the
same, or to keep and maintain the same.
(3) The Pledgor will take all necessary steps that are consistent with the
practice in any proceeding before the Canadian Intellectual Property
Office or any office or agency in any political subdivision of Canada
or in any other country or any political subdivision thereof, to
maintain and pursue each application relating to the Patents,
Trademarks and Business Names and/or Copyrights comprised within the
Collateral and that is, in the Pledgor's reasonable judgment, material
to the Business, and to obtain the relevant grant or registration and
to maintain each issued Patent and each registration of the Trademarks
and Business Names and Copyrights that is comprised within the
Collateral and that is, in the Pledgor's reasonable judgment, material
to the Business, including timely filings of applications for renewal,
affidavits of use, affidavits of incontestability and payment of
maintenance fees, and, if consistent with good business judgment, to
initiate opposition interference and cancellation proceedings against
third Persons.
(4) Within fifteen (15) Business Days of January 15 and July 15 of every
year, the Pledgor shall deliver to the Pledgee a written notice
identifying all Improvements to any and all Intellectual Property
comprised within the Collateral that were developed or otherwise
acquired by the Pledgor during the previous six (6) month period and
for which the Pledgor has (i) generated an invention disclosure or (ii)
obtained a registration from, or filed an application to register such
Improvement with, the Canadian Intellectual Property Office (or any
successor office or any similar office in any other country).
ARTICLE 5
MISCELLANEOUS
Section 5.1 Survival; Successors and Assigns.
This Security Agreement and all covenants, agreements, representations
and warranties made herein and in the certificates delivered pursuant hereto
shall survive the execution and delivery of this Security Agreement, and shall
continue in full force and effect so long as any of the Obligations are still
effective. Whenever in this Security Agreement any of the Parties is referred
to, such reference shall be deemed to include the permitted successors and
permitted assigns of such Party, if any. All covenants, promises and agreements
in this Security Agreement contained, by or on behalf of the Pledgor, shall
inure to the benefit of the Pledgee and its successors and assigns, and all
covenants, promises and agreements in this Security Agreement contained, by or
on behalf of the Pledgee, shall inure to the benefit of the Pledgor and its
successors and assigns.
Section 5.2 Expenses; Currency.
(1) Except as otherwise provided in this Security Agreement or the
Restructuring Agreement, the Parties shall bear their respective direct
and indirect expenses incurred in connection with the negotiation,
preparation, execution and performance of this Security Agreement and
the transactions contemplated hereby.
(2) Unless otherwise indicated, all dollar amounts stated in this Security
Agreement are stated in U.S. currency, and all payments required under
this Security Agreement shall be paid in U.S. currency. In the event it
is required to convert any lawful currency of a jurisdiction other than
the U.S. into U.S. Dollars for purposes of determining any amounts owed
under, or due and payable pursuant to, this Security Agreement, the
Parties hereby agree such currency conversion shall be determined as of
the applicable date by reference to the New York foreign exchange
mid-range rates published in The Wall Street Journal (or such other
internationally-recognized currency conversion source as may be
mutually agreed between the Parties).
Section 5.3 Notices.
All notices, requests, claims, demands and other communications
hereunder shall be in writing and shall be given or made (and shall be deemed to
have been hereby given or made upon receipt) by delivery in person, by overnight
courier service, by cable, by facsimile, by telegram, by telex or by registered
or certified mail, postage prepaid, return receipt requested) to the respective
Persons at the following addresses (or at such other address for a Party as
shall be specified in a notice given in accordance with this Section 5.3):
(a) If to the Pledgor:
c/o Bookham Technology plc
Caswell Xxxxxxxxx
Xxxxxxxxxxxxxxxx XX00 0XX
Xxxxxx Xxxxxxx
Facsimile: 44 1327 356 701
Attention: Corporate Secretary
with a copy, which does not constitute notice, to:
Xxxxxx Xxxxxx Xxxxxxxxx Xxxx and Xxxx LLP
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxx, Esq.
If to the Pledgee, to:
Nortel Networks Corporation
0000 Xxxxx Xxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxx X0X 0X0
Xxxxxx
Facsimile: (000) 000-0000
Attention: Secretary
with a copy, which does not constitute notice, to:
Cleary, Gottlieb, Xxxxx & Xxxxxxxx
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxx, Esq.
Facsimile: (000) 000-0000
Section 5.4 Headings.
The headings contained in this Security Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Security Agreement.
Section 5.5 Entire Agreement.
This Security Agreement, together with the Acquisition Agreement (as
amended through the date hereof), and the other Ancillary Agreements (as amended
through the date hereof) and the Restructuring Agreement, constitutes the entire
agreement of the Parties with respect to the subject matter hereof and
supersedes all prior agreements and undertakings, both written and oral, among
the Parties with respect to the subject matter hereof.
Section 5.6 No Third-Party Beneficiaries.
Except as provided in Section 5.1, this Security Agreement is for the
sole benefit of the Parties and their permitted assigns and nothing herein,
express or implied, is intended to or shall confer upon any other Person or
entity any legal or equitable right, benefit or remedy of any nature whatsoever
under or by reason of this Security Agreement.
Section 5.7 Amendment.
This Security Agreement may not be amended or modified except by an
instrument in writing signed by the Parties.
Section 5.8 Governing Law.
This Security Agreement shall be governed by, and construed in
accordance with, the Laws of the Province of Ontario and the Laws of Canada
applicable therein. All actions, suits or proceedings arising out of or relating
to this Agreement shall be heard and determined exclusively in a New York state
or federal court sitting in the County of New York, and the Parties hereby
irrevocably submit to the exclusive jurisdiction of such courts in any such
action or proceeding and irrevocably agree to the laying of venue in such courts
and waive the defense of an inconvenient forum to the maintenance of any such
action, suit or proceeding.
Section 5.9 Counterparts.
This Security Agreement may be executed in one or more counterparts,
and by the different Parties in separate counterparts, each of which when
executed shall be deemed to be an original but all of which taken together shall
constitute one and the same agreement. Delivery of an executed counterpart of a
signature page to this Security Agreement by telecopier shall be as effective as
delivery of a manually executed counterpart of this Security Agreement.
Section 5.10 No Presumption.
This Security Agreement shall be construed without regard to any
presumption or rule requiring construction or interpretation against the Party
drafting or causing any instrument to be drafted.
[Signatures of Parties follow on next page]
IN WITNESS WHEREOF, the Parties have caused this Security Agreement to
be executed as of the date first written above by their respective officers
thereunto duly authorized.
NORTEL NETWORKS CORPORATION
By:
--------------------------------------------
Name:
Title:
BOOKHAM (CANADA), INC.
By:
--------------------------------------------
Name:
Title:
SCHEDULE A
TYPE OF ORGANIZATION AND SOLE JURISDICTION
OF ORGANIZATION FOR THE PLEDGOR
Bookham (Canada), Inc. - a corporation incorporated under the New
Brunswick Business Corporations Act
SCHEDULE B
PLACE OF BUSINESS FOR THE PLEDGOR
0-00 Xxxxxx Xxxx Xxx, Xxxxxx, Xxxxxxx X0X 0X0
SCHEDULE C
LOCATION OF COLLATERAL
All Collateral is located in the Province of Ontario and, specifically,
in the following locations:
0-00 Xxxxxx Xxxx Xxx, Xxxxxx, Xxxxxxx X0X 0X0
