EXHIBIT 10.1
SECURITY AGREEMENT
Dated March 25, 2002
From
The Grantors referred to herein
AS GRANTORS
to
THE BANK OF NEW YORK
AS COLLATERAL TRUSTEE
T A B L E O F C O N T E N T S
SECTION PAGE
Section 1. Grant of Security...........................................................................2
Section 2. Security for Obligations; Limitation of Liability...........................................7
Section 3. Grantors Remain Liable......................................................................8
Section 4. Delivery and Control of Security Collateral.................................................8
Section 5. Maintaining Electronic Chattel Paper, Transferable Records and Letter-of-Credit Rights......9
Section 6. Representations and Warranties..............................................................9
Section 7. Further Assurances..........................................................................13
Section 8. As to Equipment and Inventory...............................................................14
Section 9. Insurance...................................................................................15
Section 10. Post-Closing Changes; Bailees; Collections on Assigned Agreements, Receivables and Related
Contracts...................................................................................15
Section 11. As to Intellectual Property Collateral......................................................17
Section 12. Voting Rights; Dividends; Etc...............................................................19
Section 13. As to Letter-of-Credit Rights...............................................................20
Section 14. Transfers and Other Liens; Additional Shares................................................20
Section 15. Collateral Trustee Appointed Attorney-in-Fact...............................................20
Section 16. Collateral Trustee May Perform..............................................................21
Section 17. The Collateral Trustee's Duties.............................................................21
Section 18. Remedies....................................................................................21
Section 19. Indemnity and Expenses......................................................................24
Section 20. Amendments; Waivers; Additional Grantors; Etc...............................................24
Section 21. Notices; Etc................................................................................24
Section 22. Continuing Security Interest; Assignments...................................................24
Section 23. Release; Termination........................................................................25
Section 24. Security Interest Absolute..................................................................25
Section 25. Execution in Counterparts...................................................................26
Section 26. Governing Law...............................................................................26
Schedules I - Location, Chief Executive Office, Place Where Agreements Are Maintained, Type Of
Organization, Jurisdiction Of Organization And Organizational Identification Number
Schedule II - Pledged Equity and Pledged Debt
Schedule III - Locations of Equipment and Inventory
Schedule IV - Changes in Name, Location, Etc.
Schedule V - Patents, Trademarks and Trade Names and Licenses
Exhibits
Exhibit A - Form of
Security Agreement Supplement
Exhibit B - Form of Securities Account Control Agreement (Securities Account)
Exhibit C - Form of Intellectual Property
Security Agreement
Exhibit D - Form of Intellectual Property
Security Agreement Supplement
Exhibit E - Form of Warehouseman's Notice
SECURITY AGREEMENT
SECURITY AGREEMENT dated March 25, 2002 made by
Avaya Inc., a
Delaware corporation (the "COMPANY"), the other Persons listed on the signature
pages hereof and the Additional Grantors (as defined in Section 20) (the
Company, the Persons so listed and the Additional Grantors being, collectively,
the "GRANTORS"), to The Bank of
New York, not in its individual capacity but
solely as collateral trustee (together with any successor Collateral Trustee
appointed pursuant to Article VII of the Collateral Trust Agreement (as
hereinafter defined), the "COLLATERAL TRUSTEE") for the Secured Holders (as
defined in the Collateral Trust Agreement).
PRELIMINARY STATEMENTS.
(1) The Company has entered into a 364-Day Competitive Advance
and Revolving Credit Facility Agreement dated as of August 28, 2001, as amended
by Amendment No. 1 dated as of February 8, 2002 (said Agreement, as it may
hereafter be amended, amended and restated, supplemented or otherwise modified
from time to time, being the "364-DAY CREDIT AGREEMENT") with the Lenders and
the Agent (each as defined therein).
(2) The Company has entered into a Five Year Competitive
Advance and Revolving Credit Facility Agreement dated as of September 25, 2000,
as amended by Amendment No. 1 dated as of August 10, 2001 and by Amendment No. 2
dated as of February 8, 2002 (said Agreement, as it may hereafter be amended,
amended and restated, supplemented or otherwise modified from time to time,
being the "FIVE YEAR CREDIT AGREEMENT", and, together with the 364-Day Credit
Agreement, the "SENIOR CREDIT FACILITIES") with the Lenders (as defined therein
and, together with the Lenders under the 364-Day Credit Agreement, the "SENIOR
LENDERS") and the Agent (as defined therein).
(3) The Company will issue 11.125% Senior Secured Notes due
2009 (as amended, restated, supplemented or otherwise modified, the "NOTES"),
pursuant to an Indenture, dated as of October 31, 2001, as supplemented by a
second supplemental indenture to be dated March 28, 2002 (as amended, restated,
supplemented or otherwise modified, the "INDENTURE") with The Bank of
New York,
as trustee.
(4) Pursuant to the terms of the Senior Credit Facilities and
the Indenture, the Grantors are entering into this Agreement in order to grant
to the Collateral Trustee for its benefit and for the ratable benefit of the
Representatives (as defined in the Collateral Trust Agreement) and the Secured
Holders a security interest in the Collateral (as hereinafter defined).
(5) Each Grantor is the owner of the shares of stock or other
equity interests (the "INITIAL PLEDGED EQUITY") set forth opposite such
Grantor's name on and as otherwise described in Part I of Schedule II hereto and
issued by the Persons named therein and of the indebtedness (the "INITIAL
PLEDGED DEBT") set forth opposite such Grantor's name on and as otherwise
described in Part II of Schedule II hereto and issued by the obligors named
therein.
(6) The Collateral Trustee has agreed, pursuant to the terms
of the Collateral Trust Agreement dated as of March 25, 2002 (as amended,
restated, supplemented or otherwise modified, the "COLLATERAL TRUST AGREEMENT"),
among the Grantors and the Collateral Trustee, to
accept the pledge and assignment, and the grant of a security interest, under
this Agreement as security for the Secured Obligations (as hereinafter defined).
(7) In order to induce the Senior Lenders to continue to make
advances under each of the Senior Credit Facilities, and to satisfy a condition
precedent to the issuance of the Notes, the Grantors are granting the assignment
and security interest and making the pledge and assignment contemplated by this
Agreement.
(8) Each Grantor will derive substantial direct and indirect
benefit from the transactions contemplated by the Senior Credit Facilities and
the Indenture.
(9) Terms defined in the Five Year Credit Agreement or the
Collateral Trust Agreement and not otherwise defined in this Agreement are used
in this Agreement as defined in the Five Year Credit Agreement or the Collateral
Trust Agreement, as applicable. Further, unless otherwise defined in this
Agreement or in the Five Year Credit Agreement, terms defined in Article 8 or 9
of the UCC (as defined below) and/or in the Federal Book Entry Regulations (as
defined below) are used in this Agreement as such terms are defined in such
Article 8 or 9 and/or the Federal Book Entry Regulations. "UCC" means the
Uniform Commercial Code as in effect, from time to time, in the State of
New
York; PROVIDED that, if perfection or the effect of perfection or non-perfection
or the priority of any security interest in any Collateral is governed by the
Uniform Commercial Code as in effect in a jurisdiction other than the State of
New York, "UCC" means the Uniform Commercial Code as in effect from time to time
in such other jurisdiction for purposes of the provisions hereof relating to
such perfection, effect of perfection or non-perfection or priority. The term
"FEDERAL BOOK ENTRY REGULATIONS" means (a) the federal regulations contained in
Subpart B ("TREASURY/RESERVE AUTOMATED DEBT ENTRY SYSTEM (TRADES)") governing
book-entry securities consisting of U.S. Treasury bonds, notes and bills and
Subpart D ("ADDITIONAL PROVISIONS") of 31 C.F.R. Part 357, 31 C.F.R. Section
357.2, Section 357.10 through Section 357.14 and Section 357.41 through Section
357.44 and (b) to the extent substantially identical to the federal regulations
referred to in clause (a) above (as in effect from time to time), the federal
regulations governing other book-entry securities.
NOW, THEREFORE, in consideration of the premises, each Grantor
hereby agrees with the Collateral Trustee for its benefit and for the ratable
benefit of the Representatives and the Secured Holders as follows:
SECTION 1. GRANT OF SECURITY. Each Grantor hereby pledges to
the Collateral Trustee, for its benefit and for the ratable benefit of the
Representatives and the Secured Holders, and hereby grants to the Collateral
Trustee, for its benefit for the ratable benefit of the Representatives and the
Secured Holders, a security interest in, such Grantor's right, title and
interest in and to the following, in each case, as to each type of property
described below, whether now owned or hereafter acquired by such Grantor,
wherever located, and whether now or hereafter existing or arising
(collectively, the "COLLATERAL"):
(a) all equipment in all of its forms, including, without
limitation, all machinery, tools, motor vehicles, vessels, aircraft,
furniture and fixtures, and all parts thereof and all accessions thereto
and all software related thereto, including, without
limitation, software that is imbedded in and is part of the equipment (any
and all such property being the "EQUIPMENT");
(b) all inventory in all of its forms, including, without
limitation, (i) all raw materials, work in process, finished goods and
materials used or consumed in the manufacture, production, preparation or
shipping thereof, (ii) goods in which such Grantor has an interest in mass
or a joint or other interest or right of any kind (including, without
limitation, goods in which such Grantor has an interest or right as
consignee) and (iii) goods that are returned to or repossessed or stopped
in transit by such Grantor), and all accessions thereto and products
thereof and documents therefor, and all software related thereto,
including, without limitation, software that is imbedded in and is part of
the inventory (any and all such property being the "INVENTORY");
(c) all accounts (including, without limitation,
health-care-insurance receivables), chattel paper (including, without
limitation, tangible chattel paper and electronic chattel paper),
instruments (including, without limitation, promissory notes), deposit
accounts, letter-of-credit rights, general intangibles (including, without
limitation, payment intangibles) and other obligations of any kind, whether
or not arising out of or in connection with the sale or lease of goods or
the rendering of services and whether or not earned by performance, and all
rights now or hereafter existing in and to all supporting obligations and
in and to all
security agreements, mortgages, Liens, leases, letters of
credit and other contracts securing or otherwise relating to the foregoing
property (any and all of such accounts, chattel paper, instruments, deposit
accounts, letter-of-credit rights, general intangibles and other
obligations, to the extent not referred to in clause (d), (e) or (f) below,
being the "RECEIVABLES", and any and all such supporting obligations,
security agreements, mortgages, Liens, leases, letters of credit and other
contracts being the "RELATED CONTRACTS");
(d) the following (the "SECURITY COLLATERAL"):
(i) the Initial Pledged Equity and the certificates, if
any, representing the Initial Pledged Equity, and all dividends,
distributions, return of capital, cash, instruments and other property
from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the Initial Pledged Equity
and all subscription warrants, rights or options issued thereon or
with respect thereto;
(ii) the Initial Pledged Debt and the instruments, if
any, evidencing the Initial Pledged Debt, and all interest, cash,
instruments and other property from time to time received, receivable
or otherwise distributed in respect of or in exchange for any or all
of the Initial Pledged Debt;
(iii) all additional shares of stock and other equity
interests of or in any issuer of the Initial Pledged Equity (other
than any foreign Subsidiary), any other domestic Subsidiary (other
than any Excluded Subsidiary, Avaya Finance Inc. and Avaya Technology
Corp.) of such Grantor or any successor entity from time to time
acquired by such Grantor in any manner (such shares and other
equity interests, together with the Initial Pledged Equity, being the
"PLEDGED EQUITY"), and the certificates, if any, representing such
additional shares or other equity interests, and all dividends,
distributions, return of capital, cash, instruments and other property
from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such shares or other
equity interests and all subscription warrants, rights or options
issued thereon or with respect thereto;
(iv) all additional indebtedness from time to time owed
to such Grantor (such indebtedness, together with the Initial Pledged
Debt, being the "PLEDGED DEBT") and the instruments, if any,
evidencing such indebtedness, and all interest, cash, instruments and
other property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such
indebtedness;
(v) to the extent that any of the following shall have a
value in excess of $10,000,000 and to the extent that the aggregate
value of all of the following exceeds $25,000,000, all investment
property (other than equity interests in foreign Subsidiaries and
other than equity interests in any Excluded Subsidiary) of such
Grantor (including, without limitation, all (A) securities, whether
certificated or uncertificated, (B) security entitlements, (C)
securities accounts, (D) commodity contracts and (E) commodity
accounts) in which such Grantor has now, or acquires from time to time
hereafter, any right, title or interest in any manner, and the
certificates or instruments, if any, representing or evidencing such
investment property, and all dividends, distributions, return of
capital, interest, distributions, value, cash, instruments and other
property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such
investment property and all subscription warrants, rights or options
issued thereon or with respect thereto;
(e) each Hedge Agreement to which such Grantor is now or
may hereafter become a party, in each case as such agreements may be
amended, amended and restated, supplemented or otherwise modified from time
to time (the "ASSIGNED AGREEMENTS"), including, without limitation, (i) all
rights of such Grantor to receive moneys due and to become due under or
pursuant to the Assigned Agreements, (ii) all rights of such Grantor to
receive proceeds of any insurance, indemnity, warranty or guaranty with
respect to the Assigned Agreements, (iii) claims of such Grantor for
damages arising out of or for breach of or default under the Assigned
Agreements and (iv) the right of such Grantor to terminate the Assigned
Agreements, to perform thereunder and to compel performance and otherwise
exercise all remedies thereunder (all such Collateral being the "AGREEMENT
COLLATERAL");
(f) the following (collectively, the "ACCOUNT
COLLATERAL"):
(i) all deposit accounts and all funds from time to
time credited thereto (including, without limitation, the proceeds of
all Marketable Securities), all interest, dividends, distributions,
cash, instruments and other
property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such funds
and financial assets, and all certificates and instruments, if any,
from time to time representing or evidencing each deposit account;
(ii) to the extent not included in subsection
(d) above, all promissory notes, certificates of deposit, deposit
accounts, checks and other instruments from time to time delivered to
or otherwise possessed by the Collateral Trustee for or on behalf of
such Grantor, including, without limitation, those delivered or
possessed in substitution for or in addition to any or all of the then
existing Account Collateral; and
(iii) all interest, dividends, distributions, cash,
instruments and other property from time to time received, receivable
or otherwise distributed in respect of or in exchange for any or all
of the then existing Account Collateral;
(g) the following (collectively, the "INTELLECTUAL
PROPERTY COLLATERAL"):
(i) all United States patent applications, utility
models, and statutory invention registrations, including, without
limitation, the patents and patent applications set forth in Schedule
V hereto (as such Schedule V may be supplemented from time to time by
supplements to this Agreement, each such supplement being in
substantially the form of Exhibit D hereto (an "IP
SECURITY AGREEMENT
SUPPLEMENT"), executed and delivered by such Grantor to the Collateral
Trustee from time to time), together with all reissues, divisions,
continuations, continuations-in-part, extensions and reexaminations
thereof, all inventions therein, all rights therein provided by
international treaties or conventions and all improvements thereto,
and all other rights of any kind whatsoever of such Grantor accruing
thereunder or pertaining thereto (the "PATENTS");
(ii) all United States trademarks (including, without
limitation, service marks), certification marks, collective marks,
trade dress, logos, domain names, product configurations, trade names,
business names, corporate names and other source identifiers, whether
or not registered, whether currently in use or not, including, without
limitation, all common law rights and registrations and applications
for registration thereof, including, without limitation, the United
States trademark registrations and United States trademark
applications set forth in Schedule V hereto (as such Schedule V may be
supplemented from time to time by IP
Security Agreement Supplements
executed and delivered by such Grantor to the Collateral Trustee from
time to time), and all other marks registered in the U.S. Patent and
Trademark Office or in any office or agency of any State or Territory
of the United States (but excluding any United States intent-to-use
trademark application prior to the filing and acceptance of a
Statement of Use or an Amendment to allege use in connection therewith
to the extent that a valid security interest may not be taken in such
an intent-to-use trademark application under applicable law), and all
rights therein provided by
international treaties or conventions, all reissues, extensions and
renewals of any of the foregoing, together in each case with the
goodwill of the business connected therewith and symbolized thereby,
and all rights corresponding thereto throughout the world and all
other rights of any kind whatsoever of such Grantor accruing
thereunder or pertaining thereto (the "TRADEMARKS");
(iii) all United States copyrights, copyright
applications, copyright registrations and like protections in each
work of authorship, whether statutory or common law, whether published
or unpublished, any renewals or extensions thereof, all copyrights of
works based on, incorporated in, derived from, or relating to works
covered by such copyrights, together with all rights corresponding
thereto throughout the world and all other rights of any kind
whatsoever of such Grantor accruing thereunder or pertaining thereto
(the "COPYRIGHTS");
(iv) all confidential and proprietary information,
including, without limitation, know-how, trade secrets, manufacturing
and production processes and techniques, inventions, research and
development information, technical data, financial, marketing and
business data, pricing and cost information, business and marketing
plans and customer and supplier lists and information, to the extent
that any of the foregoing exists in the United States (the "TRADE
SECRETS");
(v) all United States software, including, without
limitation, computer software programs and databases (including,
without limitation, source code, object code and all related
applications and data files), firmware, and documentation and
materials relating thereto, and all rights with respect to the
foregoing, together with any and all warranties, service contracts,
program services, test rights, maintenance rights, improvement rights,
renewal rights and indemnifications and any substitutions,
replacements, additions or model conversions of any of the foregoing
(the "COMPUTER SOFTWARE");
(vi) all license agreements, permits, authorizations
and franchises, whether with respect to the Patents, Trademarks,
Copyrights, Trade Secrets or Computer Software, or with respect to the
patents, trademarks, copyrights, trade secrets, computer software or
other proprietary right of any other Person, including, without
limitation, the license agreements set forth in Schedule V hereto (as
such Schedule V may be supplemented from time to time by IP Security
Agreement Supplements executed and delivered by such Grantor to the
Collateral Trustee from time to time) but excluding authorized dealer
agreements, and all income, royalties and other payments now or
hereafter due and/or payable with respect thereto, subject, in each
case, to the terms of such license agreements, permits, authorizations
and franchises, (the "LICENSES"); and
(vii) any and all claims for damages for past,
present and future infringement, misappropriation or breach with
respect to the Patents, Trademarks, Copyrights, Trade Secrets,
Computer Software or Licenses, with the right, but not
the obligation, to xxx for and collect, or otherwise recover, such
damages ("INTELLECTUAL PROPERTY CLAIMS");
(h) all books and records (including, without limitation,
customer lists, credit files, computer programs, software, printouts
and other computer materials and records) of such Grantor pertaining
to any of the Collateral; and
(i) all proceeds of, collateral for, and supporting
obligations relating to, any and all of the Collateral (including,
without limitation, proceeds, collateral and supporting obligations
that constitute property of the types described in clauses (a) through
(h) of this Section 1 and this clause (i)) and, to the extent not
otherwise included, all (A) payments under insurance (whether or not
the Collateral Trustee is the loss payee thereof), or any indemnity,
warranty or guaranty, payable by reason of loss or damage to or
otherwise with respect to any of the foregoing Collateral and (B)
cash;
PROVIDED, that (i) Equipment shall not include any aircraft that is the
subject of a sale and leaseback or other financing lease transaction,
(ii) with respect to the security interest granted by each Grantor, any
Equity Interest held by any Grantor in any Subsidiary that is not a
domestic Subsidiary (other than Avaya (Gibraltar) Investments Limited,
a corporation organized under the laws of Gibraltar, and Avaya
International Enterprises Limited, a corporation organized under the
laws of the Republic of Ireland) shall not be included, (iii)
Intellectual Property Collateral shall not include any right to sell,
license or transfer to Avaya International Enterprises Limited or an
Subsidiary thereof economic or beneficial rights to utilize outside the
United States and Canada any Patents, Trademarks, Copyrights, Trade
Secrets, Computer Software, Licenses or Intellectual Property Claims
with respect thereto. Anything to the contrary notwithstanding (w)
nothing contained in this Agreement shall be construed as granting a
Lien on any real property of any Grantor, (x) no Grantor shall grant,
pledge or otherwise transfer any interest in any property or rights
therein that would give rise to an income inclusion pursuant to Section
956 of the Code, (y) the pledge, security interest and lien granted in
this Section 1 shall be released in certain of the Collateral as and to
the extent set forth in the Receivables Intercreditor Agreement, at
which time such property shall no longer constitute Collateral and (z)
nothing in this Agreement shall prohibit the sale, license or transfer
of economic or beneficial rights of Intellectual Property Collateral
among Grantors or the dissolution of Avaya (Gibraltar) Investments
Limited.
SECTION 2. SECURITY FOR OBLIGATIONS; LIMITATION OF LIABILITY.
(a) This Agreement secures, in the case of each Grantor, the payment of all of
the Secured Obligations (as defined in the Collateral Trust Agreement) of itself
and each other Grantor. Without limiting the generality of the foregoing, this
Agreement secures, as to each Grantor, the payment of all amounts that
constitute part of the Secured Obligations and would be owed by any Grantor to
any Secured Holder under the Secured Agreements but for the fact that they are
unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving a Grantor.
(b) Each Grantor, and by its acceptance of this Agreement,
the Collateral Trustee, each Representative and each Secured Holder, hereby
confirms that it is the intention of
all such Persons that this Agreement and the obligations of each Grantor
hereunder not constitute a fraudulent transfer or conveyance for purposes of
Bankruptcy Law (as hereinafter defined), the Uniform Fraudulent Conveyance Act,
the Uniform Fraudulent Transfer Act or any similar foreign, federal or state law
to the extent applicable to this Agreement and the obligations of each Grantor
hereunder. To effectuate the foregoing intention, the Collateral Trustee, the
Representatives, the Secured Holders and the Grantors hereby irrevocably agree
that the Secured Obligations of each Grantor under this Agreement at any time
shall be limited to the maximum amount as will result in the Secured Obligations
of such Grantor under this Agreement not constituting a fraudulent transfer or
conveyance for purposes of Bankruptcy Law. For purposes hereof, "BANKRUPTCY LAW"
means any proceeding of the type referred to in Section 6(g) or (h) of the Five
Year Credit Agreement or Title 11, U.S. Code, or any similar foreign, federal or
state law for the relief of debtors.
SECTION 3. GRANTORS REMAIN LIABLE. Anything herein to the
contrary notwithstanding, (a) each Grantor shall remain liable under the
contracts and agreements included in such Grantor's Collateral to the extent set
forth therein to perform all of its duties and obligations thereunder to the
same extent as if this Agreement had not been executed, (b) the exercise by the
Collateral Trustee of any of the rights hereunder shall not release any Grantor
from any of its duties or obligations under the contracts and agreements
included in the Collateral and (c) none of the Collateral Trustee, any
Representative or any Secured Holder shall have any obligation or liability
under the contracts and agreements included in the Collateral by reason of this
Agreement or any other Collateral Document, nor shall any of the Collateral
Trustee, any Representative or any Secured Holder be obligated to perform any of
the obligations or duties of any Grantor thereunder or to take any action to
collect or enforce any claim for payment assigned hereunder.
SECTION 4. DELIVERY AND CONTROL OF SECURITY COLLATERAL.
(a) All certificates or instruments representing or evidencing Security
Collateral shall be delivered to and held by or on behalf of the Collateral
Trustee pursuant hereto and shall be in suitable form for transfer by delivery,
or shall be accompanied by duly executed instruments of transfer or assignment
in blank, all in form and substance satisfactory to the Collateral Trustee. The
Collateral Trustee shall have the right, upon the occurrence and during the
continuance of an Event of Default, to transfer to or to register in the name of
the Collateral Trustee or any of its nominees any or all of the Security
Collateral, subject only to the revocable rights specified in Section 12(a).
(b) With respect to any Security Collateral in which any
Grantor has any right, title or interest and that constitutes an uncertificated
security, such Grantor will use its commercial good faith efforts to cause the
issuer thereof to agree in an authenticated record with such Grantor and the
Collateral Trustee that upon receipt by such issuer of a certificate from the
Collateral Trustee to the effect that an Actionable Default has occurred and is
continuing such issuer will comply with instructions with respect to such
security originated by the Collateral Trustee without further consent of such
Grantor, such authenticated record to be in substantially the form of Exhibit C
hereto or otherwise in form and substance reasonably satisfactory to the
Collateral Trustee.
(c) With respect to any Security Collateral in which any
Grantor has any right, title or interest and that constitutes a security
entitlement in which the Collateral Trustee is
not the entitlement holder, such Grantor will use its commercial good faith
efforts to cause the securities intermediary with respect to such security
entitlement to agree in an authenticated record with such Grantor and the
Collateral Trustee that such securities intermediary will comply with
entitlement orders (that is, notifications communicated to such securities
intermediary directing transfer or redemption of the financial asset to which
such Grantor has a security entitlement) originated by the Collateral Trustee
without further consent of such Grantor, such authenticated record to be in
substantially the form of Exhibit C hereto or otherwise in form and substance
reasonably satisfactory to the Collateral Trustee (such agreement being a
"SECURITIES ACCOUNT CONTROL AGREEMENT").
(d) No Grantor will change or add any securities intermediary
that maintains any securities account in which any of the Collateral is credited
or carried, or change or add any such securities account, in each case without
first complying with the above provisions of this Section 4 in order to perfect
the security interest granted hereunder in such Collateral.
SECTION 5. MAINTAINING ELECTRONIC CHATTEL PAPER, TRANSFERABLE
RECORDS AND LETTER-OF-CREDIT RIGHTS. So long as any Secured Obligation of any
Grantor shall remain unpaid:
(a) Each Grantor will maintain all (i) electronic chattel
paper so that the Collateral Trustee has control of the electronic chattel paper
in the manner specified in Section 9-105 of the UCC and (ii) all transferable
records so that the Collateral Trustee has control of the transferable records
in the manner specified in Section 16 of the Uniform Electronic Transactions
Act, as in effect in the jurisdiction governing such transferable record
("UETA"); and
(b) Each Grantor will maintain all letter-of-credit rights
assigned to the Collateral Trustee so that the Collateral Trustee, to the extent
required by Section 12(b), has control of the letter-of-credit rights in the
manner specified in Section 9-107 of the UCC.
SECTION 6. REPRESENTATIONS AND WARRANTIES. Each Grantor
represents and warrants as follows:
(a) Such Grantor's exact legal name, as defined in
Section 9-503(a) of the UCC, is correctly set forth in Schedule I hereto.
Such Grantor is located (within the meaning of Section 9-307 of the UCC)
and has its chief executive office, and the office in which it maintains
the original copies of each Assigned Agreement and Related Contract to
which such Grantor is a party and all originals of all chattel paper that
evidence Receivables of such Grantor, in the state or jurisdiction set
forth in Schedule I hereto. The information set forth in Schedule I hereto
with respect to such Grantor is true and accurate in all respects. Such
Grantor has not previously changed its name, location, chief executive
office, place where it maintains its agreements, type of organization,
jurisdiction of organization or organizational identification number from
those set forth in Schedule I hereto except as disclosed in Schedule IV
hereto.
(b) All of the Equipment and Inventory of such Grantor
are located at the places specified therefor in Schedule III hereto, as
such Schedule III may be amended from time to time pursuant to
Section 8(a). Until July 1, 2001, such Grantor had not
previously changed the location of its Equipment and Inventory except as
set forth in Schedule IV hereto. All Security Collateral consisting of
certificated securities and instruments shall have been delivered to the
Collateral Trustee no later than March 28, 2002. Other than Receivables or
Agreement Collateral having an aggregate face amount of not more than
$5,000,000, none of the Receivables or Agreement Collateral is evidenced by
a promissory note or other instrument that will not have been delivered to
the Collateral Trustee on or prior to March 28, 2002.
(c) Such Grantor is the legal and beneficial owner of
the Collateral of such Grantor free and clear of any Lien, claim, option or
right of others, except for certain beneficial and economic rights to the
Intellectual Property Collateral owned by Avaya International Enterprises
Limited or any Subsidiary thereof and for the security interest created
under this Agreement or permitted under the Senior Credit Facilities. No
effective financing statement or other instrument similar in effect
covering all or any part of such Collateral or listing such Grantor or any
trade name of such Grantor as debtor is on file in any recording office,
except such as may have been filed in favor of the Collateral Trustee
relating to the Collateral Documents or as otherwise permitted under the
Senior Credit Facilities. Such Grantor has only the trade names listed on
Schedule V hereto.
(d) Such Grantor has exclusive possession and control of
the Equipment and Inventory other than (x) Inventory stored at any leased
premises or warehouse and (y) Equipment having a value not more than
$5,000,000 that is used by suppliers in the productions of Inventory of the
Company and its Subsidiaries. With respect to the Inventory stored at the
leased premises of Celestica Corporation, a landlord's or warehouseman's
agreement, in substantially the form of Exhibit E shall be in effect by no
later than March 28, 2002. In the case of Equipment and Inventory located
on leased premises or in warehouses, no lessor or warehouseman of any
premises or warehouse upon or in which such Equipment or Inventory is
located has (i) issued any warehouse receipt or other receipt in the nature
of a warehouse receipt in respect of any Equipment or Inventory, (ii)
issued any document for any of such Grantor's Equipment or Inventory, (iii)
received notification of any secured party's interest (other than the
security interest granted hereunder) in such Grantor's Equipment or
Inventory or (iv) any Lien, claim or charge (based on contract, statute or
otherwise) on such Equipment and Inventory.
(e) The Pledged Equity of each Subsidiary pledged by
such Grantor hereunder has been duly authorized and validly issued and is
fully paid and non-assessable. The Pledged Debt of each Subsidiary pledged
by such Grantor hereunder has been duly authorized, authenticated or issued
and delivered, is the legal, valid and binding obligation of the issuers
thereof, is evidenced by one or more promissory notes (which notes shall
have been delivered to the Collateral Trustee on or prior to March 28,
2002) and, as of the date hereof, is not in default.
(f) The Initial Pledged Equity pledged by such Grantor
constitutes the percentage of the issued and outstanding shares of stock or
equity interest of the issuers thereof indicated on Schedule II hereto. The
Initial Pledged Debt constitutes all of the
outstanding indebtedness owed to such Grantor by the issuers thereof and is
outstanding in the principal amount indicated on Schedule II hereto.
(g) All of the Security Collateral owned by such Grantor
is listed on Schedule II hereto.
(h) To the knowledge of such Grantor, the Assigned
Agreements to which such Grantor is a party have been duly authorized,
executed and delivered by all parties thereto, have not been amended,
amended and restated, supplemented or otherwise modified, are in full force
and effect and are binding upon and enforceable against all parties thereto
in accordance with their terms. To the knowledge of such Grantor, as of the
date hereof there exists no default under any Assigned Agreement to which
such Grantor is a party by any party thereto.
(i) Upon the filing of a financing statement with the
Secretary of State of the jurisdiction in which such Grantor is organized,
which filing shall be made no later than April 8, 2002, all filings and
other actions (including, without limitation, (A) actions necessary to
obtain control of Collateral as provided in Sections 9-104, 9-105, 9-106
and 9-107 of the UCC and Section 16 of UETA and (B) actions necessary to
perfect the Collateral Trustee's security interest with respect to
Collateral evidenced by a certificate of ownership) necessary to perfect
the security interest in the Collateral of such Grantor created under this
Agreement will have been duly made or taken and will be in full force and
effect, and this Agreement creates in favor of the Collateral Trustee for
the benefit of the Representatives and the Secured Holders a valid and,
together with such filings and other actions and except as otherwise
permitted under the Senior Credit Facilities, perfected first priority
security interest in the Collateral of such Grantor, securing the payment
of the Secured Obligations except (i) Liens permitted under the Senior
Credit Facilities, (ii) to the extent that any Collateral consists of any
instrument, Security Collateral, letter of credit or chattel paper that has
not been delivered to the Collateral Agent (it being understood and agreed
that the failure of the Collateral Agent to take possession of any of the
foregoing shall not impair in any respect the perfection of the security
interest hereunder in such instrument or Security Collateral to the extent
perfected by filing), (iii) with respect to Collateral located outside the
United States with respect to which the Collateral Trustee has not
perfected its security interest therein under applicable foreign law, (iv)
with respect to any investment property (as defined in Section 9-102 of the
UCC) with respect to which the Collateral Trustee has not obtained
"control" (within the meaning of the applicable UCC), to the extent that
the Collateral Trustee does not have such "control", (v) with respect to
any Intellectual Property, to the extent that such Intellectual Property is
not listed in a filing made pursuant to this Agreement with the U.S. Patent
and Trademark Office or the U.S. Copyright Office, as applicable (it being
understood and agreed that the failure to list any such Intellectual
Property in any such filing with the U.S. Patent and Trademark Office or
the U.S. Copyright Office shall not impair in any respect the perfection of
the security interest hereunder in general intangibles as defined in the
UCC), (vi) with respect to motor vehicles, the delivery of certificates of
title with respect thereto, (vii) with respect to any Deposit Accounts
located in a jurisdiction which would require actions other than filings
under the applicable UCC, to the extent that such other actions have not
been taken and (viii) to the extent applicable
law does not permit the creation or perfection of a security interest to be
perfected by the filing of a financing statement under the UCC or a filing
with the U.S. Patent and Trademark Office or the U.S. Copyright Office.
(j) No authorization or approval or other action by,
and no notice to or filing with, any governmental authority or regulatory
body or any other third party is or will be required for (i) the grant by
such Grantor of the assignment, pledge and security interest granted
hereunder or for the execution, delivery or performance of this Agreement
by such Grantor, (ii) the perfection or maintenance of the assignment,
pledge and security interest created hereunder (including, other than with
respect to the Receivables, the first priority nature of such assignment,
pledge or security interest), except for the filing of financing and
continuation statements under the UCC, which financing statements will,
upon filing, have been duly filed and will be in full force and effect, the
recordation of the Intellectual Property Security Agreements referred to in
Section 11(f) with the U.S. Patent and Trademark Office and the U.S.
Copyright Office, and the actions described in Section 4 with respect to
Collateral, or (iii) the exercise by the Collateral Trustee of its voting
or other rights provided for in this Agreement or the remedies in respect
of the Collateral pursuant to this Agreement, except (A) with respect to
motor vehicle, the delivery of certificates of title, (B) with respect to
any Collateral to the extent applicable law does not permit the creation or
perfection of a security interest to be perfected by the filing of a
financing statement under the UCC or a filing in the U.S. Patent and
Trademark Office or the U.S. Copyright Office and (C) as may be required in
connection with the disposition of any portion of the Collateral by laws
affecting the offering and sale of securities generally.
(k) The Inventory that has been produced or distributed
by such Grantor has been produced in compliance with all requirements of
applicable law, including, without limitation, the Fair Labor Standards
Act.
(l) As to itself and its Intellectual Property
Collateral:
(i) As of the date hereof, such Grantor has
received no written notice that the operation of such Grantor's
business as currently conducted and the use of the Intellectual
Property Collateral in connection therewith conflict with, infringe,
misappropriate, dilute or otherwise violate the intellectual property
rights of any third party the result of which would be reasonable
likely to have a Material Adverse Effect.
(ii) The Intellectual Property Collateral set forth
on Schedule V hereto includes all of the material patents, patent
applications, domain names, trademark registrations and applications
and Licenses owned as of the date hereof by such Grantor.
(iii) As of the date hereof, the Intellectual
Property Collateral is subsisting and has not been adjudged invalid or
unenforceable in whole or part, and to the best of such Grantor's
knowledge, is valid and enforceable, except to the extent such
invalidity or unenforceability would not be reasonable likely to
have a Material Adverse Effect. As of the date hereof, such Grantor is
not aware of any uses of any material item of Intellectual Property
Collateral that could be expected to lead to such item becoming
invalid or unenforceable the result of which would be reasonable
likely to have a Material Adverse Effect.
(iv) As of April 8, 2002, such Grantor will have
made or performed all filings, recordings and other acts and will have
paid all required fees and taxes to maintain and protect its interest
in each material item of Intellectual Property Collateral in full
force and effect, and to protect and maintain its interest therein
including, without limitation, recordations of any of its interests in
the Patents and Trademarks with the U.S. Patent and Trademark Office,
and recordation of any of its interests in the Copyrights with the
U.S. Copyright Office.
(v) The consummation of the transactions
contemplated by the Transaction Documents will not result in the
termination or impairment of any material Intellectual Property
Collateral.
(vi) To the knowledge of such Grantor, each
material License to which such Grantor is a party has been duly
authorized, executed and delivered by all parties thereto, and as of
the date hereof have not been amended, amended and restated,
supplemented or otherwise modified, is in full force and effect and is
binding upon and enforceable against all parties thereto in accordance
with its terms. To the knowledge of such Grantor, as of the date
hereof there exists no default under any material License to which
such Grantor is a party by any party thereto.
(vii) To the best of such Grantor's knowledge, as
of the date hereof none of the material Trade Secrets of such Grantor
has been used, divulged, disclosed or appropriated to the detriment of
such Grantor for the benefit of any other Person other than such
Grantor the result of which would be reasonably likely to have a
Material Adverse Effect.
(viii) As of the date hereof, no Grantor material
Intellectual Property Collateral is subject to any outstanding
consent, settlement, order, decree, injunction, judgment or ruling
restricting the use thereof or that would impair the validity or
enforceability thereof which would be reasonably likely to have a
Material Adverse Effect.
SECTION 7. FURTHER ASSURANCES. (a) Each Grantor agrees that
from time to time during the Security Period, at the expense of such Grantor,
such Grantor will promptly execute and deliver, or otherwise authenticate, all
further instruments and documents, and take all further action that may be
necessary or desirable, or that the Collateral Trustee may request, in order to
perfect and protect any pledge or security interest granted or purported to be
granted by such Grantor hereunder or to enable the Collateral Trustee to
exercise and enforce its rights and remedies hereunder with respect to any
Collateral of such Grantor. Without limiting the generality of the foregoing,
each Grantor will promptly with respect to Collateral of such
Grantor: (i) upon the occurrence of an Actionable Default, xxxx conspicuously
each document included in Inventory, each chattel paper included in Receivables,
each Related Contract, each Assigned Agreement and, at the request of the
Collateral Trustee, each of its records pertaining to such Collateral with a
legend, in form and substance satisfactory to the Collateral Trustee, indicating
that such document, chattel paper, Related Contract, Assigned Agreement or
Collateral is subject to the security interest granted hereby; (ii) if any such
Collateral shall be evidenced by promissory notes or other instruments or
chattel papers in excess of $5,000,000 in the aggregate, deliver and pledge to
the Collateral Trustee hereunder such notes or instruments or chattel paper duly
indorsed and accompanied by duly executed instruments of transfer or assignment,
all in form and substance satisfactory to the Collateral Trustee; (iii) execute
or authenticate and file such financing or continuation statements, or
amendments thereto, and such other instruments or notices, as may be necessary
or desirable, or as the Collateral Trustee may request, in order to perfect and
preserve the security interest granted or purported to be granted by such
Grantor hereunder; (iv) deliver and pledge to the Collateral Trustee for its
benefit and for benefit of the Representatives and the Secured Holders
certificates representing Security Collateral that constitutes certificated
securities, accompanied by undated stock or bond powers executed in blank; (v)
upon the occurrence of an Event of Default, take all action necessary to ensure
that the Collateral Trustee has control of Collateral consisting of deposit
accounts, electronic chattel paper, investment property, letter-of-credit rights
and transferable records as provided in Sections 9-105, 9-106 and 9-107 of the
UCC and in Section 16 of UETA; (vi) upon the occurrence of an Actionable
Default, take all action necessary to ensure that the Collateral Trustee has
control of Collateral consisting of deposit accounts as provided in Section
9-104 of the UCC; (vii) at the request of the Collateral Trustee upon the
occurrence of an Event of Default, take all action to ensure that the Collateral
Trustee's security interest is noted on any certificate of ownership related to
any Collateral evidenced by a certificate of ownership; and (viii) deliver to
the Collateral Trustee evidence that all other action that the Collateral
Trustee may deem reasonably necessary or desirable in order to perfect and
protect the security interest created by such Grantor under this Agreement has
been taken.
(b) Each Grantor hereby authorizes the Collateral Trustee to
file one or more financing or continuation statements, and amendments thereto,
including, without limitation, one or more financing statements indicating that
such financing statements cover all personal property (or words of similar
effect) of such Grantor, in each case without the signature of such Grantor. A
photocopy or other reproduction of this Agreement or any financing statement
covering the Collateral or any part thereof shall be sufficient as a financing
statement where permitted by law. Each Grantor ratifies its authorization for
the Collateral Trustee to have filed such financing statements, continuation
statements or amendments filed prior to the date hereof.
(c) Each Grantor will furnish to the Collateral Trustee from
time to time statements and schedules further identifying and describing the
Collateral of such Grantor and such other reports in connection with such
Collateral as the Collateral Trustee may reasonably request, all in reasonable
detail.
SECTION 8. AS TO EQUIPMENT AND INVENTORY. (a) Each Grantor
will keep the Equipment and Inventory of such Grantor (other than Inventory sold
in the ordinary course of business) at the places therefor specified in Section
6(b) or, upon 30 days' prior written notice to the Collateral Trustee, at such
other places designated by the Grantor in such notice. Upon the
giving of such notice, Schedule III shall be automatically amended to add any
new locations specified in the notice.
(b) Each Grantor will promptly furnish to the Collateral
Trustee a statement respecting any loss or damage exceeding $5,000,000 to any of
the Equipment or Inventory of such Grantor.
SECTION 9. INSURANCE. (a) Each Grantor will, at its own
expense, maintain insurance with respect to the Equipment and Inventory of such
Grantor as required by the Senior Credit Facilities. Each policy of each Grantor
for liability insurance shall provide for all losses to be paid on behalf of the
Collateral Trustee and such Grantor as their interests may appear, and each
policy for property damage insurance shall provide for all losses (except for
losses of less than $5,000,000 per occurrence) to be paid directly to the
Collateral Trustee, PROVIDED that so long as no Actionable Default shall have
occurred and be continuing, any such proceeds received by the Collateral Trustee
shall promptly be paid to the applicable Grantor. Each such policy shall in
addition (i) name such Grantor and the Collateral Trustee as insured parties
thereunder (without any representation or warranty by or obligation upon the
Collateral Trustee) as their interests may appear, (ii) contain the agreement by
the insurer that any loss thereunder shall be payable to the Collateral Trustee
notwithstanding any action, inaction or breach of representation or warranty by
such Grantor, (iii) provide that there shall be no recourse against the
Collateral Trustee for payment of premiums or other amounts with respect thereto
and (iv) provide that at least 10 days' prior written notice of cancellation or
of lapse shall be given to the Collateral Trustee by the insurer. Each Grantor
will, if so requested by the Collateral Trustee, deliver to the Collateral
Trustee original or duplicate policies of such insurance and, as often as the
Collateral Trustee may reasonably request, a report of a reputable insurance
broker with respect to such insurance.
(b) Reimbursement under any liability insurance maintained by
any Grantor pursuant to this Section 9 may be paid directly to the Person who
shall have incurred liability covered by such insurance.
(c) So long as no Actionable Default shall have occurred and
be continuing, all insurance payments received by the Collateral Trustee in
connection with any loss, damage or destruction of any Inventory or Equipment
will be released by the Collateral Trustee to the applicable Grantor. Upon the
occurrence and during the continuance of any Actionable Default, all insurance
payments in respect of such Equipment or Inventory shall be paid to the
Collateral Trustee and shall be applied as specified in the Collateral Trust
Agreement.
(d) Notwithstanding the foregoing, the provisions of this
Section 9 shall be applicable only during the Security Period.
SECTION 10. POST-CLOSING CHANGES; BAILEES; COLLECTIONS ON
ASSIGNED AGREEMENTS, RECEIVABLES AND RELATED CONTRACTS. (a) No Grantor will
change its name, type of organization, jurisdiction of organization,
organizational identification number or location from those set forth in Section
6(a) of this Agreement without first giving at least 30 days' prior written
notice to the Collateral Trustee and taking all action required by the
Collateral Trustee for the purpose of perfecting or protecting the security
interest granted by this Agreement. No
Grantor will change the location of the Equipment and Inventory or the place
where it keeps the originals of the Assigned Agreements and Related Contracts to
which such Grantor is a party and all originals of all chattel paper that
evidence Receivables of such Grantor from the locations therefor specified in
Sections 6(a) and 6(b) without first giving the Collateral Trustee 30 days'
prior written notice of such change. No Grantor will become bound by a security
agreement authenticated by another Person (determined as provided in Section
9-203(d) of the UCC) without giving the Collateral Trustee 30 days' prior
written notice thereof and taking all action required by the Collateral Trustee
to ensure that the perfection and first priority nature of the Collateral
Trustee's security interest in the Collateral will be maintained. Each Grantor
will hold and preserve its records relating to the Collateral, including,
without limitation, the Assigned Agreements and Related Contracts, and will
permit representatives of the Collateral Trustee at any reasonable time and from
time to time, upon reasonable prior notice, to inspect and make abstracts from
such records and other documents, PROVIDED, that unless an Event of Default
shall have occurred and is continuing, the Collateral Trustee may take such
actions only once during any fiscal quarter of any Grantor. If the Grantor does
not have an organizational identification number and later obtains one, it will
forthwith notify the Collateral Trustee of such organizational identification
number.
(b) Upon the occurrence of an Actionable Default, or, at any
time with respect to any material portion of Collateral transferred from the
leased premises of Celestica Corporation to a location owned or leased by a
Person other than Celestica Corporation, if any Collateral of any Grantor is at
any time in the possession or control of a warehouseman, bailee or agent, or if
the Collateral Trustee so requests such Grantor will (i) notify such
warehouseman, bailee or agent of the security interest created hereunder, (ii)
instruct such warehouseman, bailee or agent to hold all such Collateral solely
for the Collateral Trustee's account subject only to the Collateral Trustee's
instructions (which shall permit such Collateral to be removed by such Grantor
in the ordinary course of business until the Collateral Trustee notifies such
warehouseman, bailee or agent that an Actionable Default has occurred and is
continuing), (iii) use commercially reasonable efforts, to cause such
warehouseman, bailee or agent to authenticate a record acknowledging that it
holds possession of such Collateral for the Collateral Trustee's benefit and
shall act solely on the instructions of the Collateral Trustee without the
further consent of the Grantor or any other Person, and (iv) make such
authenticated record available to the Collateral Trustee.
(c) Except as otherwise provided in this subsection (c), each
Grantor will continue to collect, at its own expense, all amounts due or to
become due such Grantor under the Assigned Agreements, Receivables and Related
Contracts. In connection with such collections during the Security Period, such
Grantor may take (and, at the Collateral Trustee's direction after an Actionable
Default, will take) such action as such Grantor or the Collateral Trustee may
deem necessary or advisable to enforce collection of the Assigned Agreements,
Receivables and Related Contracts; PROVIDED, HOWEVER, that the Collateral
Trustee shall have the right at any time, upon the occurrence and during the
continuance of an Actionable Default and upon written notice to such Grantor of
its intention to do so, to notify the obligors under any Assigned Agreements,
Receivables and Related Contracts (the "OBLIGORS") of the assignment of such
Assigned Agreements, Receivables and Related Contracts to the Collateral Trustee
and to direct such Obligors to make payment of all amounts due or to become due
to such Grantor thereunder directly to the Collateral Trustee and, upon such
notification and at the expense of such Grantor,
to enforce collection of any such Assigned Agreements, Receivables and Related
Contracts, to adjust, settle or compromise the amount or payment thereof, in the
same manner and to the same extent as such Grantor might have done, and to
otherwise exercise all rights with respect to such Assigned Agreements,
Receivables and Related Contracts, including, without limitation, those set
forth set forth in Section 9-607 of the UCC. After receipt by any Grantor of the
notice from the Collateral Trustee referred to in the proviso to the preceding
sentence, (i) all amounts and proceeds (including, without limitation,
instruments) received by such Grantor in respect of the Assigned Agreements,
Receivables and Related Contracts of such Grantor shall be received in trust for
the benefit of the Collateral Trustee hereunder, shall be segregated from other
funds of such Grantor and, if any Actionable Default shall have occurred and be
continuing, shall be forthwith paid over to the Collateral Trustee in the same
form as so received (with any necessary indorsement) to be applied in accordance
with the Collateral Trust Agreement and (ii) such Grantor will not adjust,
settle or compromise the amount or payment of any Receivable or amount due on
any Assigned Agreement or Related Contract, release wholly or partly any Obligor
thereof, or allow any credit or discount thereon. No Grantor will permit or
consent to the subordination of its right to payment under any of the Assigned
Agreements, Receivables and Related Contracts to any other indebtedness or
obligations of the Obligor thereof other than in the ordinary course of business
as conducted on the date hereof.
SECTION 11. AS TO INTELLECTUAL PROPERTY COLLATERAL. (a) With
respect to each item of its material Intellectual Property Collateral, each
Grantor agrees to take, at its expense, all reasonably necessary steps,
including, without limitation, in the U.S. Patent and Trademark Office, the U.S.
Copyright Office and any other governmental authority, to (i) maintain the
validity and enforceability of such Intellectual Property Collateral and
maintain such Intellectual Property Collateral in full force and effect, and
(ii) pursue the registration and maintenance of each patent, trademark, or
copyright registration or application, now or hereafter included in such
Intellectual Property Collateral of such Grantor, including, without limitation,
the payment of required fees and taxes, the filing of responses to office
actions issued by the U.S. Patent and Trademark Office, the U.S. Copyright
Office or other governmental authorities, the filing of applications for renewal
or extension, the filing of affidavits under Sections 8 and 15 of the U.S.
Trademark Act, the filing of divisional, continuation, continuation-in-part,
reissue and renewal applications or extensions, the payment of maintenance fees
and the participation in interference, reexamination, opposition, cancellation,
infringement and misappropriation proceedings. No Grantor shall, without the
written consent of the Collateral Trustee, discontinue use of or otherwise
abandon any material Intellectual Property Collateral, or abandon any right to
file an application for patent, trademark, or copyright, unless such Grantor
shall have previously determined that such use or the pursuit or maintenance of
such Intellectual Property Collateral is no longer useful or desirable in the
conduct of such Grantor's business and that the loss thereof would not be
reasonably likely to have a Material Adverse Effect, in which case, such Grantor
will give prompt notice of any such abandonment to the Collateral Trustee.
(b) Each Grantor agrees promptly to notify the Collateral
Trustee if such Grantor becomes aware (i) that any item of material Intellectual
Property Collateral may have become abandoned, placed in the public domain,
invalid or unenforceable, or of any adverse determination or development
regarding such Grantor's ownership of any material Intellectual Property
Collateral or its right to register the same or to keep and maintain and enforce
the same, or (ii) of any adverse determination or the institution of any
proceeding (including, without
limitation, the institution of any proceeding in the U.S. Patent and Trademark
Office or any court) regarding any item of material Intellectual Property
Collateral, in each case if the result thereof would be reasonable likely to
have a Material Adverse Effect.
(c) In the event that any Grantor becomes aware that any item
of material Intellectual Property Collateral is being infringed or
misappropriated by a third party in a manner that would be reasonably likely to
have a Material Adverse Effect, such Grantor shall promptly notify the
Collateral Trustee and shall take such actions, at its expense, as such Grantor
and, if an Actionable Default has occurred and is continuing, the Collateral
Trustee deems reasonable and appropriate under the circumstances to protect such
Intellectual Property Collateral, including, without limitation, suing for
infringement or misappropriation and for an injunction against such infringement
or misappropriation.
(d) No Grantor shall do or permit any act or knowingly omit
to do any act whereby any of its material Intellectual Property Collateral may
lapse or become invalid or unenforceable or placed in the public domain if the
result thereof would be reasonably likely to have a Material Adverse Effect.
(e) Each Grantor shall take all steps which it or, if an
Actionable Default has occurred and is continuing, the Collateral Trustee deems
reasonable and appropriate under the circumstances to preserve and protect each
item of its Intellectual Property Collateral, including, without limitation,
maintaining the quality of any and all products or services used or provided
under any of the Trademarks, consistent with the quality of the products and
services as of the date hereof, and taking all steps necessary to ensure that
all licensed users of any of the Trademarks use such consistent standards of
quality.
(f) With respect to its Intellectual Property Collateral,
each Grantor agrees to execute or otherwise authenticate an agreement, in
substantially the form set forth in Exhibit D hereto (an "INTELLECTUAL PROPERTY
SECURITY AGREEMENT"), for recording the security interest granted hereunder to
the Collateral Trustee in such Intellectual Property Collateral with the U.S.
Patent and Trademark Office, the U.S. Copyright Office and any other
governmental authorities necessary to perfect the security interest hereunder in
such Intellectual Property Collateral.
(g) Each Grantor agrees that, should it obtain an ownership
interest in any item of the type set forth in Section 1(g) that is not on the
date hereof a part of the Intellectual Property Collateral (the "AFTER-ACQUIRED
INTELLECTUAL PROPERTY"), (i) the provisions of this Agreement shall
automatically apply thereto, and (ii) any such After-Acquired Intellectual
Property and, in the case of trademarks, the goodwill symbolized thereby, shall
automatically become part of the Intellectual Property Collateral subject to the
terms and conditions of this Agreement with respect thereto. Each Grantor shall
give written notice to the Collateral Trustee no less frequently than once in
each six month period, identifying the After-Acquired Intellectual Property and
such Grantor shall execute and deliver to the Collateral Trustee with such
written notice, or otherwise authenticate, an IP Security Agreement Supplement
covering such After-Acquired Intellectual Property for recording such IP
Security Agreement Supplement with the U.S. Patent and Trademark Office, the
U.S. Copyright Office and any other governmental authorities necessary to
perfect the security interest hereunder in such After-Acquired Intellectual
Property.
SECTION 12. VOTING RIGHTS; DIVIDENDS; ETC. (a) So long as no
Event of Default shall have occurred and be continuing:
(i) Each Grantor shall be entitled to exercise any and
all voting and other consensual rights pertaining to the Security
Collateral of such Grantor or any part thereof for any purpose; PROVIDED
HOWEVER, that such Grantor will not exercise or refrain from exercising any
such right if such action would have a material adverse effect on the value
of the Security Collateral or any part thereof.
(ii) Each Grantor shall be entitled to receive and
retain any and all dividends, interest and other distributions paid in
respect of the Security Collateral of such Grantor if and to the extent
that the payment thereof is not otherwise prohibited by the terms of the
Senior Credit Facilities; PROVIDED, HOWEVER, that any and all dividends,
interest and other distributions paid or payable other than in cash in
respect of, and instruments and other property received, receivable or
otherwise distributed in respect of, or in exchange for, any Security
Collateral, shall be, and shall be forthwith delivered to the Collateral
Trustee to hold as, Security Collateral and shall, if received by such
Grantor, be received in trust for the benefit of the Collateral Trustee, be
segregated from the other property or funds of such Grantor and be
forthwith delivered to the Collateral Trustee as Security Collateral in the
same form as so received (with any necessary indorsement).
(iii) The Collateral Trustee will execute and deliver
(or cause to be executed and delivered) to each Grantor all such proxies
and other instruments as such Grantor may reasonably request and provide
for the purpose of enabling such Grantor to exercise the voting and other
rights that it is entitled to exercise pursuant to paragraph (i) above and
to receive the dividends or interest payments that it is authorized to
receive and retain pursuant to paragraph (ii) above.
(b) Upon the occurrence and during the continuance of an
Actionable Default:
(i) All rights of each Grantor (A) to exercise or
refrain from exercising the voting and other consensual rights that it
would otherwise be entitled to exercise pursuant to Section 12(a)(i) shall,
upon notice to such Grantor by the Collateral Trustee, cease and (B) to
receive the cash dividends, interest and other distributions that it would
otherwise be authorized to receive and retain pursuant to Section 12(a)(ii)
and to receive and retain (x) dividends and other distributions paid or
payable in cash in respect of any Security Collateral in connection with a
partial or total liquidation or dissolution or in connection with a
reduction of capital, capital surplus or paid-in-surplus and (y) cash paid,
payable or otherwise distributed in respect of principal of, or in
redemption of, or in exchange for, any Security Collateral, shall
automatically cease, and all such rights shall thereupon become vested in
the Collateral Trustee, which shall thereupon have the sole right to
exercise or refrain from exercising such voting and other consensual rights
and to receive and hold as Security Collateral such dividends, interest and
other distributions.
(ii) All dividends, interest and other distributions
that are received by any Grantor contrary to the provisions of paragraph
(i) of this Section 12(b) shall be received in trust for the benefit of the
Collateral Trustee, shall be segregated from other funds of such Grantor
and shall be forthwith paid over to the Collateral Trustee as Security
Collateral in the same form as so received (with any necessary
indorsement).
SECTION 13. AS TO LETTER-OF-CREDIT RIGHTS. (a) Each Grantor, by
granting a security interest in its Receivables consisting of letter-of-credit
rights to the Collateral Trustee, intends to (and hereby does) assign to the
Collateral Trustee its rights (including its contingent rights) to the proceeds
of all Related Contracts consisting of letters of credit of which it is or
hereafter becomes a beneficiary. Except to the extent that the amount of any
such letter of credit does not exceed $5,000,000, each Grantor will promptly use
its commercially reasonable efforts to cause the issuer of such letter of credit
and each nominated person (if any) with respect thereto to consent to such
assignment of the proceeds thereof and deliver written evidence of such consent
to the Collateral Trustee.
(b) Upon the occurrence of an Actionable Default, each Grantor
will, promptly upon request by the Collateral Trustee, (i) notify (and such
Grantor hereby authorizes the Collateral Trustee to notify) the issuer and each
nominated person with respect to each of the Related Contracts consisting of
letters of credit that the proceeds thereof have been assigned to the Collateral
Trustee hereunder and any payments due or to become due in respect thereof are
to be made directly to the Collateral Trustee or its designee and (ii) arrange
for the Collateral Trustee to become the transferee beneficiary of letter of
credit.
SECTION 14. TRANSFERS AND OTHER LIENS; ADDITIONAL SHARES. (a)
Each Grantor agrees that it will not (i) sell, assign or otherwise dispose of,
or grant any option with respect to, any of the Collateral, other than sales,
assignments and other dispositions of Collateral, and options relating to
Collateral, permitted under the terms of the Senior Credit Facilities, or (ii)
create or suffer to exist any Lien upon or with respect to any of the Collateral
of such Grantor except for the pledge, assignment and security interest created
under this Agreement and Liens permitted under the Senior Credit Facilities.
(b) Each Grantor agrees that it will (i) cause each issuer of
the Pledged Equity pledged by such Grantor not to issue any stock or other
equity interests or other securities in addition to or in substitution for the
Pledged Equity issued by such issuer, except to such Grantor, and (ii) pledge
hereunder, immediately upon its acquisition (directly or indirectly) thereof,
any and all additional shares of stock or other equity interests or other
securities, PROVIDED HOWEVER, that, except for the pledge of 65% of the total
voting power of each of Avaya (Gibraltar) Investments Limited and Avaya
International Enterprises Limited, no shares of any foreign Subsidiary shall be
subject to such pledge.
SECTION 15. COLLATERAL TRUSTEE APPOINTED ATTORNEY-IN-FACT. Each
Grantor hereby irrevocably appoints the Collateral Trustee such Grantor's
attorney-in-fact, with full authority in the place and stead of such Grantor and
in the name of such Grantor or otherwise, from time to time during the Security
Period after an Actionable Default has occurred and is continuing, in the
Collateral Trustee's discretion, to take any action and to execute any
instrument that the Collateral Trustee may deem necessary or advisable to
accomplish the purposes of this Agreement, including, without limitation:
(a) to obtain and adjust insurance required to be paid to
the Collateral Trustee pursuant to Section 9,
(b) to ask for, demand, collect, xxx for, recover,
compromise, receive and give acquittance and receipts for moneys due and to
become due under or in respect of any of the Collateral,
(c) to receive, indorse and collect any drafts or other
instruments, documents and chattel paper, in connection with clause
(a) or (b) above, and
(d) to file any claims or take any action or institute any
proceedings that the Collateral Trustee may deem necessary or desirable for
the collection of any of the Collateral or otherwise to enforce compliance
with the terms and conditions of any Assigned Agreement or the rights of
the Collateral Trustee with respect to any of the Collateral.
SECTION 16. COLLATERAL TRUSTEE MAY PERFORM. If any Grantor
fails to perform any agreement contained herein, the Collateral Trustee may, as
the Collateral Trustee deems necessary to protect the security interest granted
hereunder in the Collateral or to protect the value thereof, but without any
obligation to do so and without notice, itself perform, or cause performance of,
such agreement, and the expenses of the Collateral Trustee incurred in
connection therewith shall be payable by such Grantor under Section 19.
SECTION 17. THE COLLATERAL TRUSTEE'S DUTIES. The powers
conferred on the Collateral Trustee hereunder are solely to protect the
Representatives and the Secured Holders' interest in the Collateral and shall
not impose any duty upon it to exercise any such powers. The duties of the
Collateral Trustee are as set forth in Article VII of the Collateral Trust
Agreement.
SECTION 18. REMEDIES. If any Actionable Default shall have
occurred and be continuing:
(a) The Collateral Trustee may, with the consent of the
Required Representatives, and shall, at the request of the Required
Representatives (as provided in the Collateral Trust Agreement), exercise
in respect of the Collateral, in addition to other rights and remedies
provided for herein or otherwise available to it, all the rights and
remedies of a Secured Holder upon default under the UCC (whether or not the
UCC applies to the affected Collateral) and also may: (i) require each
Grantor to, and each Grantor hereby agrees that it will at its expense and
upon request of the Collateral Trustee forthwith, assemble all or part of
the Collateral as directed by the Collateral Trustee and make it available
to the Collateral Trustee at a place and time to be designated by the
Collateral Trustee that is reasonably convenient to both parties; (ii)
without notice except as specified below, sell the Collateral or any part
thereof in one or more parcels at public or private sale, at any of the
Collateral Trustee's offices or elsewhere, for cash, on credit or for
future delivery, and upon such other terms as may be commercially
reasonable; (iii) occupy any premises owned or leased by any of the
Grantors where the Collateral or
any part thereof is assembled or located for a reasonable period in order
to effectuate its rights and remedies hereunder or under law, without
obligation to such Grantor in respect of such occupation; and (iv) exercise
any and all rights and remedies of any of the Grantors under or in
connection with the Collateral, or otherwise in respect of the Collateral,
including, without limitation, (A) any and all rights of such Grantor to
demand or otherwise require payment of any amount under, or performance of
any provision of, the Assigned Agreements, the Receivables, the Related
Contracts and the other Collateral, (B) withdraw, or cause or direct the
withdrawal, of all funds with respect to the Account Collateral and (C)
exercise all other rights and remedies with respect to the Assigned
Agreements, the Receivables, the Related Contracts and the other
Collateral, including, without limitation, those set forth in Section 9-607
of the UCC. Each Grantor agrees that, to the extent notice of sale shall be
required by law, at least ten days' notice to such Grantor of the time and
place of any public sale or the time after which any private sale is to be
made shall constitute reasonable notification. The Collateral Trustee shall
not be obligated to make any sale of Collateral regardless of notice of
sale having been given. The Collateral Trustee may adjourn any public or
private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time
and place to which it was so adjourned.
(b) Any cash held by or on behalf of the Collateral
Trustee and all cash proceeds received by or on behalf of the Collateral
Trustee in respect of any sale of, collection from, or other realization
upon all or any part of the Collateral may, in the discretion of the
Collateral Trustee, be held by the Collateral Trustee as collateral for,
and/or then or at any time thereafter applied (after payment of any amounts
payable to the Collateral Trustee pursuant to Section 19) in whole or in
part by the Collateral Trustee for its benefit and for the ratable benefit
of the Representatives and the Secured Holders against, all or any part of
the Secured Obligations, as set forth in Section 5.01 of the Collateral
Trust Agreement.
(c) All payments received by any Grantor under or in
connection with any Assigned Agreement or otherwise in respect of the
Collateral shall be received in trust for the benefit of the Collateral
Trustee, shall be segregated from other funds of such Grantor and shall be
forthwith paid over to the Collateral Trustee in the same form as so
received (with any necessary indorsement).
(d) The Collateral Trustee may, without notice to any
Grantor except as required by law and at any time or from time to time,
charge, set-off and otherwise apply all or any part of the Secured
Obligations against any funds held with respect to the Account Collateral
or in any other deposit account.
(e) In the event of any sale or other disposition of any
of the Intellectual Property Collateral of any Grantor, the goodwill of the
business connected with and symbolized by any Trademarks subject to such
sale or other disposition shall be included therein, and such Grantor shall
supply to the Collateral Trustee or its designee such Grantor's know-how
and expertise, and documents and things relating to any Intellectual
Property Collateral subject to such sale or other disposition, and such
Grantor's customer lists and other records and documents relating to such
Intellectual
Property Collateral and to the manufacture, distribution, advertising and
sale of products and services of such Grantor. Any sale or other
disposition of any such Intellectual Property Collateral shall be subject
to any Licenses (an any right granted therein) existing at the time of such
sale or disposition.
(f) If the Collateral Trustee shall determine to exercise
its right to sell all or any of the Security Collateral of any Grantor
pursuant to this Section 18, each Grantor agrees that, upon request of the
Collateral Trustee, such Grantor will, at its own expense:
(i) execute and deliver, and cause each issuer of
such Security Collateral contemplated to be sold and the directors and
officers thereof to execute and deliver, all such instruments and
documents, and do or cause to be done all such other acts and things,
as may be necessary or, in the opinion of the Collateral Trustee,
advisable to register such Security Collateral under the provisions of
the Securities Act of 1933 (as amended from time to time, the
"SECURITIES ACT"), to cause the registration statement relating
thereto to become effective and to remain effective for such period as
prospectuses are required by law to be furnished and to make all
amendments and supplements thereto and to the related prospectus that,
in the opinion of the Collateral Trustee, are necessary or advisable,
all in conformity with the requirements of the Securities Act and the
rules and regulations of the Securities and Exchange Commission
applicable thereto;
(ii) use its reasonable good faith efforts to qualify
the Security Collateral under the state securities or "Blue Sky" laws
and to obtain all necessary governmental approvals for the sale of
such Security Collateral, as requested by the Collateral Trustee,
PROVIDED that such Grantor shall not be required to qualify to do
business or consent to general service of process in any such
jurisdiction;
(iii) cause each such issuer of such Security
Collateral to make available to its security holders, as soon as
practicable, an earnings statement that will satisfy the provisions of
Section 11(a) of the Securities Act;
(iv) provide the Collateral Trustee with such other
information as the Collateral Trustee may reasonably require to enable
the Collateral Trustee to effect the sale of such Security Collateral;
and
(v) do or cause to be done all such other acts and
things as may reasonably be necessary to make such sale of such
Security Collateral or any part thereof valid and binding and in
compliance with applicable law.
(g) The Collateral Trustee is authorized, in connection
with any sale of the Security Collateral pursuant to this Section 18, to
deliver or otherwise disclose to any prospective purchaser of the Security
Collateral: (i) any registration statement or prospectus, and all
supplements and amendments thereto, prepared pursuant to subsection (f)(i)
above; (ii) any information and projections provided to it pursuant to
subsection (f)(iv) above; and (iii) any other information in its
possession relating to such Security Collateral.
SECTION 19. INDEMNITY AND EXPENSES. (a) Each Grantor agrees to
indemnify the Collateral Trustee as and to the extent set forth in Section 6.06
of the Collateral Trust Agreement.
(b) Each Grantor will upon demand pay to the Collateral Trustee
the amount of any and all expenses, as and to the extent set forth in Section
6.03 of the Collateral Trust Agreement.
SECTION 20. AMENDMENTS; WAIVERS; ADDITIONAL GRANTORS; ETC.
(a) No amendment or waiver of any provision of this Agreement, and no consent to
any departure by any Grantor herefrom, shall in any event be effective unless
the same shall be in writing and signed by the Collateral Trustee, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given. No failure on the part of the Collateral
Trustee or any other Secured Holder to exercise, and no delay in exercising any
right hereunder, shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right.
(b) Upon the execution and delivery, or authentication, by any
Person of a security agreement supplement in substantially the form of Exhibit A
hereto (each a "SECURITY AGREEMENT SUPPLEMENT"), (i) such Person shall be
referred to as an "ADDITIONAL GRANTOR" and shall be and become a Grantor
hereunder, and each reference in this Agreement and the other Collateral
Documents to "Grantor" shall also mean and be a reference to such Additional
Grantor, and each reference in this Agreement and the other Collateral Documents
to "Collateral" shall also mean and be a reference to the Collateral of such
Additional Grantor, and (ii) the supplemental schedules I-V attached to each
Security Agreement Supplement shall be incorporated into and become a part of
and supplement Schedules I-V, respectively, hereto, and the Collateral Trustee
may attach such supplemental schedules to such Schedules; and each reference to
such Schedules shall mean and be a reference to such Schedules as supplemented
pursuant to each Security Agreement Supplement.
SECTION 21. NOTICES; ETC. All notices and other communications
provided for hereunder shall be in writing (including telegraphic, telecopier or
telex communication) and mailed, telegraphed, telecopied, telexed or otherwise
delivered as set forth in Section 9.03 of the Collateral Trust Agreement.
Delivery by telecopier of an executed counterpart of any amendment or waiver of
any provision of this Agreement or of any Security Agreement Supplement or
Schedule hereto shall be effective as delivery of an original executed
counterpart thereof.
SECTION 22. CONTINUING SECURITY INTEREST; ASSIGNMENTS. This
Agreement shall create a continuing security interest in the Collateral and
shall (a) remain in full force and effect until the earlier of the termination
of the Security Period and the payment in full in cash of the Secured
Obligations, (b) be binding upon each Grantor, its successors and assigns and
(c) inure, together with the rights and remedies of the Collateral Trustee
hereunder, to the benefit of the Representatives on behalf of themselves and on
behalf of the Secured Holders and their
respective successors, transferees and assigns. Without limiting the generality
of the foregoing clause (c), any Secured Holder may assign or otherwise transfer
all or any portion of its rights and obligations under any Debt Agreement to any
other Person, and such other Person shall thereupon become vested with all the
benefits in respect thereof granted to such Lender herein or otherwise, in each
case as provided therein.
SECTION 23. RELEASE; TERMINATION. (a) Upon any sale, lease,
transfer or other disposition of any item of Collateral of any Grantor in
accordance with the terms of the Collateral Documents (other than sales of
Inventory in the ordinary course of business), the applicable Grantor may
deliver to the Collateral Trustee a Notice of Partial Release (as defined in the
Collateral Trust Agreement) and, upon satisfaction of the conditions set forth
in Section 8.01 of the Collateral Trust Agreement, the security interest in such
Collateral shall automatically, without further action, be released and the
Collateral Trustee shall take such actions as are set forth in Section 8.01 of
the Collateral Trust Agreement.
(b) Upon the earliest of (i) the date on which all Secured
Obligations shall have been paid in full after the Maturity Date applicable to
each of the Senior Credit Facilities, (ii) the termination of the Security
Period and (iii) the date on which the aggregate of the loans and available
commitments under the Senior Credit Facilities (or any refinancing thereof)
shall be not less than $400,000,000 and the Senior Lenders (or the lenders under
such refinancing) shall have agreed that such loans and available commitments
shall not be secured by a Lien, the pledge and security interest granted hereby
shall terminate and all rights to the Collateral shall revert to the applicable
Grantor. Upon any such termination, the Collateral Trustee will, at the
applicable Grantor's expense, execute and deliver to such Grantor such documents
as such Grantor shall reasonably request to evidence such termination.
SECTION 24. SECURITY INTEREST ABSOLUTE. The obligations of each
Grantor under this Agreement are independent of the Secured Obligations or any
other obligations of any other Grantor under or in respect of the Secured
Agreements, and a separate action or actions may be brought and prosecuted
against each Grantor to enforce this Agreement, irrespective of whether any
action is brought against such Grantor or any other Grantor or whether such
Grantor or any other Grantor is joined in any such action or actions; provided,
that nothing contained herein shall be deemed a waiver of any Grantor's rights
to assert any defense that may be available to any Grantor subject to the
foregoing. All rights of the Collateral Trustee, the Representatives and the
Secured Holders and the pledge, assignment and security interest hereunder, and
all obligations of each Grantor hereunder, shall be irrevocable, absolute and
unconditional irrespective of, and each Grantor hereby irrevocably waives (to
the maximum extent permitted by applicable law) any defenses it may now have or
may hereafter acquire in any way relating to, any or all of the following:
(a) any lack of validity or enforceability of any Secured
Agreement or any other agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Secured Obligations or any other
obligations of any other Grantor under or in respect of the Secured
Agreements or any other amendment or waiver of or any consent to any
departure from any Secured Agreement, including, without
limitation, any increase in the Secured Obligations resulting from the
extension of additional credit to any Grantor or any of its Subsidiaries or
otherwise;
(c) any taking, exchange, release or non-perfection of any
Collateral or any other collateral, or any taking, release or amendment or
waiver of or consent to departure from any guaranty, for all or any of the
Secured Obligations;
(d) any manner of application of any Collateral or any other
collateral, or proceeds thereof, to all or any of the Secured Obligations,
or any manner of sale or other disposition of any Collateral or any other
collateral for all or any of the Secured Obligations or any other
obligations of any other Grantor under or in respect of the Secured
Agreements or any other assets of any Grantor or any of its Subsidiaries;
(e) any change, restructuring or termination of the corporate
structure or existence of any Grantor or any of its Subsidiaries;
(f) any failure of the Collateral Trustee, any Representative
or any Secured Holder to disclose to any Grantor any information relating
to the business, condition (financial or otherwise), operations,
performance, assets, nature of assets, liabilities or prospects of any
other Grantor now or hereafter known to such party (each Grantor waiving
any duty on the part of such parties to disclose such information);
(g) the failure of any other Person to execute this Agreement
or any other Collateral Document, guaranty or agreement or the release or
reduction of liability of any Grantor or other grantor or surety with
respect to the Secured Obligations; or
(h) any other circumstance (including, without limitation, any
statute of limitations) or any existence of or reliance on any
representation by the Collateral Trustee, any Representative or any Secured
Holder that might otherwise constitute a defense available to, or a
discharge of, such Grantor or any other Grantor or a third party grantor of
a security interest.
This Agreement shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Secured Obligations is rescinded or
must otherwise be returned by the Collateral Trustee, any Representative or any
Secured Holder or by any other Person upon the insolvency, bankruptcy or
reorganization of any Grantor or otherwise, all as though such payment had not
been made.
SECTION 25. EXECUTION IN COUNTERPARTS. This Agreement may be
executed in any number of counterparts, each of which when so executed shall be
deemed to be an original and 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 effective as delivery of an original
executed counterpart of this Agreement.
SECTION 26. GOVERNING LAW. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of
New York.
[Rest of page intentionally left blank.]
IN WITNESS WHEREOF, each Grantor has caused this Agreement to be duly executed
and delivered by its officer thereunto duly authorized as of the date first
above written.
ADDRESS FOR NOTICES:
AVAYA INC.
000 Xx. Xxxx Xxxx
Xxxxxxx Xxxxx, XX 00000
By: /s/ Xxxxxx Xxxxxx
-----------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President and Treasurer
ADDRESS FOR NOTICES: AVAYA INTERNATIONAL LLC
000 Xx. Xxxx Xxxx
Xxxxxxx Xxxxx, XX 00000
By: /s/ Xxxxxx Xxxx
-----------------------------------
Name: Xxxxxx Xxxx
Title: Vice President
ADDRESS FOR NOTICES: AVAYA TECHNOLOGY CORP.
000 Xx. Xxxx Xxxx
Xxxxxxx Xxxxx, XX 00000
By: /s/ Xxxxxx Xxxx
-----------------------------------
Name: Xxxxxx Xxxx
Title: Vice President
ADDRESS FOR NOTICES: Executed as a Deed by
000 Xx. Xxxx Xxxx AVAYA (GIBRALTAR) INVESTMENTS
Xxxxxxx Xxxxx, XX 00000 LIMITED, a corporation organized under
the laws of Gibraltar, as Grantor, and
signed by a Director and an Authorised
Signatory
By: /s/ Xxxxxxx Xxxxxx
-----------------------------------
Name: Xxxxxxx Xxxxxx
Title: Director
By: /s/ Xxxxxxxxxxx Xxxxxxx
-----------------------------------
Name: Xxxxxxxxxxx Xxxxxxx
Title: Authorised Signatory
THE BANK OF
NEW YORK, not in its
individual capacity but solely as
Collateral Trustee
By: /s/ Xxxxx Xxxxxx
-----------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President