[▇▇▇▇▇▇▇▇ CHANCE LOGO] LIMITED LIABILITY PARTNERSHIP
EXHIBIT 4.5
CONFORMED COPY
19 MAY 2003
MARCONI CORPORATION PLC
AS COMPANY
THE LAW DEBENTURE TRUST CORPORATION p.l.c.
AS SECURITY TRUSTEE
HSBC BANK plc
AS NEW BONDING FACILITY AGENT
AND
HSBC BANK plc
AS ESCROW BANK
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ESCROW AGREEMENT
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CONTENTS
PAGE
1. Definitions And Interpretation.................................................................. 1
2. Appointment Of Security Trustee................................................................. 2
3. Mandatory Redemption Escrow Accounts............................................................ 2
4. Existing Performance Bond Escrow Accounts....................................................... 5
5. Currency Of Escrow Accounts..................................................................... 7
6. General Provisions For Escrow Accounts.......................................................... 9
7. Representations And Covenants Of The Company.................................................... 10
8. The Security Trustee............................................................................ 11
9. Escrow Bank's Actions........................................................................... 12
10. Security Trustee And Escrow Bank Fees........................................................... 16
11. Resignation Of Escrow Bank...................................................................... 16
12. Assignment...................................................................................... 17
13. Further Assurance............................................................................... 17
14. Remedies And Waivers, Partial Invalidity........................................................ 17
15. Amendments...................................................................................... 18
16. Notices......................................................................................... 18
17. Miscellaneous................................................................................... 19
18. Governing Law And Jurisdiction.................................................................. 19
Schedule 1 DEFINITIONS................................................................................. 21
Schedule 2 ESCROW ACCOUNTS............................................................................. 38
Part A Mandatory Redemption Escrow Accounts..................................................... 38
Part B Existing Performance Bond Escrow Accounts................................................ 39
Schedule 3 FORM OF RELEASE CERTIFICATE................................................................. 40
Schedule 4 FORM OF REDEMPTION CERTIFICATE.............................................................. 41
THIS ESCROW AGREEMENT is made as a DEED on 19 May 2003
BETWEEN:
(1) MARCONI CORPORATION PLC (the "COMPANY");
(2) THE LAW DEBENTURE TRUST CORPORATION P.L.C. (the "SECURITY TRUSTEE"
which expression shall, where the context so admits, include all
persons for the time being the security trustee or trustees pursuant to
the Security Trust and Intercreditor Deed);
(3) HSBC BANK PLC (the "ESCROW BANK"); and
(4) HSBC BANK PLC as security trustee and agent under the New Bonding
Facility Agreement (the "NEW BONDING FACILITY AGENT").
WHEREAS:
(A) The Company has issued or intends to issue the Senior Notes and the
Junior Notes under the Senior Note Indenture and the Junior Note
Indenture respectively.
(B) Security has been or will be granted in favour of the Security Trustee
over, inter alia, the Escrow Account, as security for the obligations
of the Obligors under the Relevant Documents.
(C) In order to fund the mandatory redemption of some or all of the Notes
(subject to the terms of the Indentures and the Security Trust and
Intercreditor Deed) and to satisfy certain of its obligations under the
Existing Performance Bonds, the Company has established the Escrow
Accounts with the Escrow Bank for the deposit of certain amounts into
the Escrow Accounts.
(D) The parties hereto have agreed to describe and regulate the operation
of the Escrow Accounts in the manner hereinafter appearing.
NOW THIS DEED WITNESSETH AND IT IS HEREBY AGREED AND DECLARED as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS
Unless a contrary indication appears, defined terms and expressions in
this Deed shall have the meanings and interpretation ascribed to them
in Schedule 1 (Definitions) to this Deed.
1.2 INTERPRETATION
Unless the context or the express provisions of this Deed otherwise
require:
1.2.1 words importing the singular shall include the plural and vice
versa;
1.2.2 any obligation of any party herein to do something shall
include an obligation to procure the same to be done and any
obligation not to do something shall include an obligation not
knowingly to permit, suffer or allow the same;
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1.2.3 references to a "Clause" or "Schedule" shall, subject to any
contrary indication, be construed as a reference to a Clause
hereof or a Schedule hereto and are for ease of reference
only;
1.2.4 a provision of law is a reference to that provision as the
same may be amended or re-enacted from time to time;
1.2.5 any "SECURITY TRUSTEE", "JUNIOR NOTE TRUSTEE", "SENIOR NOTE
TRUSTEE", "NEW BONDING FACILITY AGENT", "NEW BONDING FACILITY
BANK", "DEPOSITARY", "PAYING AGENT", "REGISTRAR", "GUARANTOR"
or "ESCROW BANK" shall be construed so as to include its
successors in title, permitted assignees and permitted
transferees and, in the case of the Security Trustee and the
Note Trustees, any person for the time being appointed as
security trustee, trustee or co-trustee in accordance with the
applicable Relevant Document;
1.2.6 "ASSETS" includes present and future properties, revenues and
rights of every description;
1.2.7 "REPAY", "REDEEM", "PREPAY" and "PAY" shall each include all
others and "REPAID", "REPAYABLE" and "REPAYMENT", "REDEEMED",
"REDEEMABLE" and "REDEMPTION", "PREPAID", "PREPAYABLE",
"PREPAYMENT" and "PAID", "PAYABLE" and "PAYMENT" shall be
construed accordingly;
1.2.8 a "REGULATION" includes any regulation, rule, official
directive, request or guideline (whether or not having the
force of law) of any governmental, intergovernmental or
supranational body, agency, department or regulatory,
self-regulatory or other authority or organisation; and
1.2.9 a "RELEVANT DOCUMENT" or any other agreement or instrument is
a reference to that Relevant Document or other agreement or
instrument, as the same may have been amended or novated as
permitted by the Security Trust and Intercreditor Deed.
2. APPOINTMENT OF SECURITY TRUSTEE
2.1 The parties to this Deed agree and acknowledge that the Security
Trustee shall maintain and operate the Escrow Accounts, established and
opened in the name of the Company pursuant to a mandate letter dated 15
May 2003 between the Company and the Escrow Bank, upon and subject to
the terms of this Deed and the Security Trust and Intercreditor Deed.
2.2 The Company, as the holder of the Escrow Accounts, hereby irrevocably
agrees with the Escrow Bank that the Security Trustee shall be the only
Person entitled to give the Escrow Bank instructions in relation to
Escrow Accounts.
3. MANDATORY REDEMPTION ESCROW ACCOUNTS
3.1 PURPOSE OF MANDATORY REDEMPTION ESCROW ACCOUNTS
The purpose of the Mandatory Redemption Escrow Accounts is to enable
the Company to fund the mandatory redemption of the Junior Notes and/or
the Senior Notes in accordance with the Indentures and the Security
Trustee to apply amounts standing to the
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credit of the Mandatory Redemption Escrow Accounts in accordance with
Clause 3.2 (Payments out of the Mandatory Redemption Escrow Accounts).
3.2 PAYMENTS OUT OF THE MANDATORY REDEMPTION ESCROW ACCOUNTS
3.2.1 Subject to sub-clauses 3.2.2 and 3.2.3 of this Clause 3.2, if
at any time the Company determines that the aggregate balance
standing to the credit of the Mandatory Redemption Escrow
Accounts is equal to or greater than the lesser of:
(a) $30,000,000 (or the Dollar Equivalent);
(b) (in the event that Junior Notes are Outstanding at a
time when Junior Notes may be redeemed in accordance
with the Junior Note Indenture) an amount sufficient
to redeem all Outstanding Junior Notes at the
Redemption Price; or
(c) (in the event that no Junior Notes are Outstanding)
an amount sufficient to redeem all Outstanding Senior
Notes at the Redemption Price,
the Company shall deliver a Redemption Certificate to the
Security Trustee, the Senior Note Trustee, the Junior Note
Trustee, the Depositary, the Registrar and the Paying Agent,
and shall, within five London Business Days of the date of the
Redemption Certificate, cause a notice of redemption to be
given to the holders of the relevant Notes to be redeemed
(with a copy thereof to the Security Trustee and the relevant
Note Trustees) and the Security Trustee shall upon receipt of
such notice of redemption promptly instruct the Escrow Bank to
transfer an amount equal to the lesser of:
(i) the aggregate balance then standing to the credit of
the Mandatory Redemption Escrow Accounts; and
(ii) the amount certified in such Redemption Certificate
as the Redemption Price for the relevant Notes,
on the London Business Day prior to the Repayment Date
specified in such notice of redemption (which Repayment Date
shall not be less than ten nor more than fifteen London
Business Days after the date of such notice of redemption), to
such account or accounts as the Security Trustee may direct
(acting on the instructions of the relevant Note Trustee) in
order for such balance or amount to be applied on the
specified Repayment Date in accordance with the
Pre-Acceleration Payment Priorities.
3.2.2 If the Security Trustee has received a notice from the Senior
Note Trustee that a Payment Stop Event has occurred and is
continuing, the Security Trustee shall upon receipt of such
notice promptly instruct the Escrow Bank:
(a) first, to act in accordance with sub-clause 3.2.3(a)
of this Clause 3.2 (Payments out of the Mandatory
Redemption Escrow Accounts) PROVIDED THAT if the
Security Trustee has determined (such determination
to be made pursuant to the provisions of the Security
Trust and Intercreditor Deed)
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that on the day preceding such notice from the Senior
Note Trustee, a Standstill Period was in effect, the
Security Trustee shall promptly instruct the Escrow
Bank to act in accordance with sub-clause 3.2.2(b) of
this Clause 3.2 (Payments out of the Mandatory
Redemption Escrow Accounts);
(b) second, following the date of such notice from the
Senior Note Trustee and until such time as the
Security Trustee (having been notified by the Senior
Note Trustee) informs the Escrow Bank that the
relevant Payment Stop Event is no longer continuing,
to pay all monies credited to the Mandatory
Redemption Escrow Accounts to the Security Trustee in
order for the Security Trustee to apply such monies
in accordance with the Post-Acceleration Payment
Priorities, PROVIDED THAT the Security Trustee shall
only instruct the Escrow Bank to make a payment out
of the Mandatory Redemption Escrow Accounts under
this sub-clause 3.2.2(b) of this Clause 3.2 (Payments
out of the Mandatory Redemption Escrow Accounts) if
the Security Trustee has determined that the
aggregate monies standing to the credit of the
Mandatory Redemption Escrow Accounts are equal to or
exceed $4,000,000 (or the Dollar Equivalent).
3.2.3 If the Security Trustee receives a Standstill Notice from the
Senior Note Trustee, the Security Trustee shall upon receipt
of such notice promptly instruct the Escrow Bank:
(a) first, on the date of such instruction and PROVIDED
THAT on the day preceding the date of such Standstill
Notice from the Senior Note Trustee no Standstill
Period was in effect (to be determined by the
Security Trustee pursuant to the provisions of the
Security Trust and Intercreditor Deed), to transfer
as soon as possible in accordance with normal bank
procedures, an amount equal to the aggregate balance
standing to the credit of the Mandatory Redemption
Escrow Accounts on the date of such instruction, to
the Security Trustee in order for the Security
Trustee to apply such balance in accordance with the
Pre-Acceleration Payment Priorities; and
(b) second, following such transfer referred to in
paragraph (a) above, to hold any amounts credited to
or standing to the credit of the Mandatory Redemption
Escrow Accounts in such account until the Security
Trustee has notified the Escrow Bank of the earlier
of the cessation of the relevant Standstill Period or
the occurrence of a Payment Stop Event, at which
point the Security Trustee shall further instruct the
Escrow Bank to act either in accordance with:
(i) sub-clause 3.2.1 of this Clause 3.2
(Payments out of the Mandatory Redemption
Escrow Accounts), in the case of a cessation
of such Standstill Period PROVIDED THAT at
such time no Payment Stop Event is
continuing and no other Standstill Period is
in effect; or
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(ii) sub-clause 3.2.2(b) of this Clause 3.2
(Payments out of the Mandatory Redemption
Escrow Accounts), if at such time a Payment
Stop Event is continuing.
3.2.4 If at any time the New Bonding Facility Agent determines that
the amount held by it as collateral under the New Bonding
Facility Agreement, whether pursuant to Cash Collateral
Releases or otherwise (together with all interest earned on
such amounts), exceeds the aggregate facility limit then in
effect under the New Bonding Facility Agreement, the New
Bonding Facility Agent shall immediately notify the Security
Trustee and the Company and shall, within three London
Business Days of making such determination, transfer the
amount of such excess (as calculated in accordance with the
Security Agreement (as defined in the New Bonding Facility
Agreement) as in effect at the date hereof) to the Mandatory
Redemption Escrow Accounts.
4. EXISTING PERFORMANCE BOND ESCROW ACCOUNTS
4.1 PURPOSE OF EXISTING PERFORMANCE BOND ESCROW ACCOUNTS
The purpose of the Existing Performance Bond Escrow Accounts is to
enable the Company to satisfy certain of its obligations to provide
cash collateral under the Existing Performance Bonds.
4.2 PAYMENTS OUT OF THE EXISTING PERFORMANCE BOND ESCROW ACCOUNTS
4.2.1 If at any time prior to:
(a) the Security Trustee being notified by the Senior
Note Trustee of the occurrence of an Enforcement
Event or a payment Event of Default under the Senior
Notes and/or the Senior Note Indenture; and
(b) the first anniversary of the Issue Date,
the Security Trustee receives a Release Certificate, the
Security Trustee shall promptly instruct the Escrow Bank to
release and transfer an amount or amounts in cash and in the
currency specified in such Release Certificate from the
Existing Performance Bond Escrow Accounts to any bank,
insurance company or other financial institution (as set out
in such Release Certificate) which is certified under the
relevant Release Certificate as having issued an Existing
Performance Bond and as having made a valid demand, pursuant
to an enforceable right, for cash collateral to be provided by
the Company or any of its Subsidiaries pursuant to such
Existing Performance Bond (or any related instrument or
document in existence at the date of this Deed), which amount
of cash specified in such Release Certificate shall be used by
such bank, insurance company or other financial institution to
cash-collateralise the obligations of the Company or any of
its Subsidiaries in relation to such Existing Performance
Bond.
4.2.2 Subject to sub-clauses 4.2.3 and 4.2.4 of this Clause 4.2
(Payments out of the Existing Performance Bond Escrow
Accounts), if the Company determines that the aggregate amount
standing to the credit of the Existing Performance Bond Escrow
Accounts is in excess of the amount needed to satisfy the
obligations of
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the Company and its Subsidiaries to provide collateral under
all Existing Performance Bonds (the amount of such excess
being the "EXCESS AMOUNT"), the Company shall promptly provide
the Security Trustee with written notice certifying the amount
of such Excess Amount. Upon receipt of such certification the
Security Trustee shall promptly instruct the Escrow Bank to
release and transfer an amount in cash equal to such Excess
Amount to be paid as follows:
(a) first, to the New Bonding Facility Agent, who having
received a request from the Security Trustee has
promptly provided the Security Trustee with a
certificate setting out an amount, if any, that is
certified by the New Bonding Facility Agent to the
Security Trustee as being, together with all other
Cash Collateral Releases transferred to the New
Bonding Facility Agent since the Issue Date (together
with all interest earned on such transferred
amounts), equal to the New Bonding Facility Funding
Amount (or its Sterling Equivalent); and
(b) second, to the extent any Excess Amount is remaining
after giving effect to paragraph (a) above, such
amount (such amount having been converted by the
Escrow Bank into US dollars at the then prevailing
exchange rate) to the Mandatory Redemption Escrow
Accounts for application by the Security Trustee in
accordance with Clause 3.2 (Payments out of the
Mandatory Redemption Escrow Accounts).
4.2.3 If at any time prior to the first anniversary of the Issue
Date the Security Trustee has been notified:
(a) of the occurrence of an Enforcement Event; or
(b) of the occurrence of a payment Event of Default under
the Senior Notes and/or the Senior Note Indenture,
the Security Trustee shall promptly instruct the Escrow Bank
to release and transfer all amounts standing to the credit of
the Existing Performance Bond Escrow Accounts as follows:
(i) first, to the New Bonding Facility Agent,
who having received a request from the
Security Trustee has promptly provided the
Security Trustee with a certificate setting
out an amount, if any, that is certified by
the New Bonding Facility Agent to the
Security Trustee as being, together with all
other Cash Collateral Releases transferred
to the New Bonding Facility Agent since the
Issue Date (together with all interest
earned on such transferred amounts), equal
to the lesser of (x) L25,000,000 (or the
Sterling Equivalent) and (y) 100 per cent.
in aggregate of all bonds, guarantees,
letters of credit, indemnities and similar
instruments issued and outstanding on such
date under the New Bonding Facility
Agreement PROVIDED THAT, if the amount set
out in such certificate exceeds the
aggregate balance standing to the credit of
the Existing Performance Bond Escrow
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Accounts, the Escrow Bank shall only be
obliged to transfer such amount standing to
the credit of the Existing Performance Bond
Escrow Accounts; and
(ii) second, to the extent any amount remains
standing to the credit of the Existing
Performance Bond Escrow Accounts after
giving effect to paragraph (i) above, such
amount to the Mandatory Redemption Escrow
Accounts for application by the Security
Trustee in accordance with Clause 3.2
(Payments out of the Mandatory Redemption
Escrow Accounts).
4.2.4 On the first anniversary of the Issue Date, and having given
effect to any release, transfer or payment due and payable
prior to or on such date, if any, pursuant to a Release
Certificate delivered on or prior to the first anniversary of
the Issue Date, and if such date is not a London Business Day
on the preceding London Business Day, the Security Trustee
shall instruct the Escrow Bank to transfer all amounts
standing to the credit of the Existing Performance Bond Escrow
Accounts on that date as follows:
(a) first, to the New Bonding Facility Agent, who having
received a request from the Security Trustee has
promptly provided the Security Trustee with a
certificate setting out an amount, if any, that is
certified by the New Bonding Facility Agent to the
Security Trustee as being, together with all other
Cash Collateral Releases transferred to the New
Bonding Facility Agent since the Issue Date (together
with all interest earned on such transferred
amounts), equal to the New Bonding Facility Funding
Amount PROVIDED THAT, if the amount set out in such
certificate exceeds the aggregate balance standing to
the credit of the Existing Performance Bond Escrow
Accounts, the Escrow Bank shall only be obliged to
transfer such amount standing to the credit of the
Existing Performance Bond Escrow Accounts; and
(b) second, to the extent any amount remains standing to
the credit of the Existing Performance Bond Escrow
Accounts after giving effect to paragraph (a) above,
such amount to the Mandatory Redemption Escrow
Accounts for application by the Security Trustee in
accordance with Clause 3.2 (Payments out of the
Mandatory Redemption Escrow Accounts).
4.2.5 The Company undertakes to notify the Security Trustee and the
Escrow Bank promptly upon any reduction of the New Bonding
Facility Funding Amount to an amount of less than
L25,000,000 (or the Sterling Equivalent).
5. CURRENCY OF ESCROW ACCOUNTS
5.1 CURRENCY OF ESCROW ACCOUNTS
In relation to any payment to the Escrow Bank made by the Company or
any other Obligor to be credited to the Mandatory Redemption Escrow
Accounts, the Escrow Bank shall only deposit: (i) US dollars in the
MREA US Dollar Escrow Account; (ii) British
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sterling in the MREA Sterling Escrow Account and (ii) Euros in the MREA
Euro Escrow Account.
5.2 CURRENCY UNDERTAKING
5.2.1 The Company hereby undertakes that it shall (and shall procure
that the Obligors will) only transfer amounts to the Escrow
Bank to be credited to an Escrow Account in the currencies
specified in Clause 5.1 (Currency of Escrow Accounts) and in
compliance with its obligations under the Indentures including
but not limited to Sections 4.02 (Asset Sales) and 4.25
(Escrow Agreement) of the Junior Note Indenture and Section
4.03 (Asset Sales) and 4.26 (Escrow Agreement) of the Senior
Note Indenture.
5.2.2 In the event that the Company or any Obligor transfers an
amount to the Escrow Bank to be credited to the Mandatory
Redemption Escrow Accounts and such currency is in a currency
("CURRENCY B") other than a currency specified in Clause 5.1
(Currency of Escrow Accounts), the Escrow Bank shall convert
such amount from Currency B into US dollars at the then
prevailing exchange rate and deposit such amounts to the
credit of MREA US Dollar Escrow Account PROVIDED THAT to the
extent the Escrow Bank is unable to effect such conversion, it
will immediately notify the Company of its inability to effect
such conversion and such amount shall be converted into such
other currency as agreed between the Escrow Bank and the
Company.
5.2.3 In the event that the Company or any Obligor transfers an
amount to the Escrow Bank to be credited to the Mandatory
Redemption Escrow Accounts and such amount is in Euro or
British sterling, the Escrow Bank shall deposit such amount
into the MREA Euro Escrow Account or MREA Sterling Escrow
Account, as the case may be, and then shall promptly convert
such amount into US dollars at the then prevailing exchange
rate and deposit such US dollar converted amount to the credit
of the MREA US Dollar Escrow Account.
5.2.4 Unless caused by its gross negligence or wilful misconduct,
the Escrow Bank shall not be responsible or be liable to any
party to this Deed for any loss, cost, expense or liability
arising as a result of any currency conversion made pursuant
to the operation of this Clause 5.2 (Currency Undertaking) or
Clause 5.3 (Payments by the Escrow Bank) or for acting in
accordance with any instructions received by it pursuant to
this Clause 5.2 (Currency Undertaking) or Clause 5.3 (Payments
by the Escrow Bank).
5.3 PAYMENTS BY THE ESCROW BANK
Unless instructed to the contrary by the Security Trustee, the Escrow
Bank shall only pay monies credited to an Escrow Account to the
Security Trustee in the currency of the monies standing to the credit
of such Escrow Account; PROVIDED THAT to the extent that any amount
required to be released pursuant to Clause 4.2 (Payments out of
Existing Performance Bond Escrow Accounts) is required to be
denominated in a currency other than US dollars, Euro or British
sterling (as set forth in the Release Certificate or, as the case may
be, as requested by the Security Trustee) ("CURRENCY C"), the Escrow
Bank shall convert such amount from the currency of the Existing
Performance Bond Escrow
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Accounts into Currency C at the then prevailing exchange rate; PROVIDED
FURTHER THAT to the extent the Escrow Bank is unable to effect such
conversion, it will immediately notify the Company or, as the case may
be, the Security Trustee of its inability to effect such conversion and
such amount shall be converted into such other currency as agreed
between the Escrow Bank and the Company or, as the case may be, the
Security Trustee (acting on the instructions of the Note Trustees).
6. GENERAL PROVISIONS FOR ESCROW ACCOUNTS
6.1 GENERAL TERMS OF ESCROW
Each of the parties agrees that:
6.1.1 each Escrow Account will be a separate account with the Escrow
Bank;
6.1.2 no party shall have any rights to the deposits held in the
Escrow Accounts other than in accordance with the terms of
this Deed, the Security Documents creating Security over the
Escrow Accounts, the Indentures and the Security Trust and
Intercreditor Deed;
6.1.3 the Security Trustee shall instruct the Escrow Bank to release
and make payments to or to the order of the Security Trustee,
the Senior Note Trustee, the Junior Note Trustee, the New
Bonding Facility Agent or the issuer of an Existing
Performance Bond (as the case may be) only in accordance with
the terms of this Deed and the Security Trust and
Intercreditor Deed;
6.1.4 none of the restrictions contained in this Deed on the
withdrawal of funds from the Escrow Accounts shall affect the
obligations of the Company to make any payments of any nature
required to be made to any of the Secured Creditors on the due
date for payment thereof in accordance with any of the
Relevant Documents;
6.1.5 nothing in this Deed shall permit a payment by the Security
Trustee which is prohibited by the Security Trust and
Intercreditor Deed; and
6.1.6 in establishing the balance standing to the credit of any
Escrow Account at any time, the Escrow Bank may (but shall not
be obliged to) take into account credits to and withdrawals
from such Escrow Account which are to be made on the same day.
6.2 PAYMENTS FROM ESCROW
6.2.1 The Security Trustee shall only instruct the Escrow Bank to
make payments or transfers from an Escrow Account if:
(a) the giving of such instruction is expressly permitted
by this Deed; or
(b) the Security Trustee has been instructed to enforce
the Transaction Security pursuant to the provisions
of the Security Trust and Intercreditor Deed.
6.2.2 All amounts withdrawn from an Escrow Account for transfer to
another Escrow Account or for application in or towards making
a specific payment or for
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satisfying a specific liability shall be transferred to that
Escrow Account, or applied in or towards making that specific
payment or, as the case may be, satisfying that specific
liability, and for no other purpose.
6.3 INTEREST
Each amount from time to time standing to the credit of an Escrow
Account shall bear interest at the rate agreed between the Escrow Bank
and the Company, such interest to be credited to the Escrow Account in
respect of which such interest has accrued at such times as the Escrow
Bank and the Company shall agree or, in the absence of such agreement,
in accordance with the Escrow Bank's usual practice for accounts of the
same type as the relevant Escrow Account.
6.4 INFORMATION
The Company irrevocably grants to the Security Trustee the right to
review all books and records which the Company is entitled to as holder
of the Escrow Accounts (including, without limitation, computer records
and account statements) relating to the Escrow Accounts and irrevocably
waives any right of confidentiality which may exist in respect of such
books and records to the extent necessary to allow disclosure by the
Escrow Bank to the Security Trustee and its advisers of all books and
records which the Company is entitled to as holder of the Escrow
Accounts.
7. REPRESENTATIONS AND COVENANTS OF THE COMPANY
7.1 REPRESENTATIONS
The Company represents that:
7.1.1 it has and will have the necessary power to enable it to enter
into and perform its obligations under this Deed;
7.1.2 this Deed constitutes its legal, valid and binding obligations
enforceable against it in accordance with the terms set out
herein, subject only to equitable principles of general
application and applicable bankruptcy, insolvency,
reorganisation or other similar laws affecting the enforcement
of creditors' rights generally; and
7.1.3 all necessary authorisations to enable it to enter into this
Deed have been obtained and are in full force and effect and
will remain in full force and effect.
7.2 COVENANTS
The Company shall:
7.2.1 provide to the Security Trustee and the Escrow Bank, as and
when the Security Trustee or, as the case may be, the Escrow
Bank so reasonably requires and so as to enable the Security
Trustee or, as the case may be, the Escrow Bank to perform its
duties and functions under this Deed, such information, copies
of any accounting records and other documents, statements and
reports maintained by or in the possession of the Company or
which the Company is entitled to obtain from any person;
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7.2.2 do all such things within its control as are necessary or
appropriate to give effect to the provisions of this Deed; and
7.2.3 at all times comply with its obligations under the Indentures
in relation to the Escrow Accounts including, but not limited
to, its obligations to deposit monies or cause monies to be
deposited in each of the Escrow Accounts from time to time.
8. THE SECURITY TRUSTEE
8.1 OBLIGATIONS OF THE SECURITY TRUSTEE
8.1.1 The Security Trustee will not, and shall not be required to,
monitor the performance or compliance by the Company of any
obligation or condition contained in this Deed.
8.1.2 Each instruction provided to the Escrow Bank by the Security
Trustee shall be copied at the same time by the Security
Trustee to the Company, the Note Trustees and the New Bonding
Facility Agent.
8.1.3 In performing or carrying out its duties, obligations and
responsibilities, the Security Trustee shall be considered to
be acting only in a mechanical and administrative capacity and
shall not have or be deemed to have any duty, obligation or
responsibility to, or relationship or trust or agency with the
Company (save as expressly provided herein).
8.2 SECURITY TRUSTEE'S ACTIONS
8.2.1 Notwithstanding any contrary provision herein, the Security
Trustee may assume that any statement by the Company, the New
Bonding Facility Agent or the relevant Note Trustee that any
conditions for the making of any payment out of any Escrow
Account which are specified in any of the Relevant Documents
have been satisfied is correct, unless it has actual notice to
the contrary.
8.2.2 Save as provided in this Deed, the Security Trustee shall not:
(a) be bound to disclose to any other Person any
information relating to any other party hereto;
(b) be under any fiduciary duty towards any other party
hereto or under any obligations other than those for
which express provision is made in this Deed;
(c) have any responsibility to ensure that the
information set out in any instructions received by
it hereunder is correct or to check or enquire as to,
or otherwise be affected by, whether any condition
has been or will be met or fulfilled or any
instruction is properly given on behalf of the person
from whom it purports to be given; or
(d) have any responsibility to any party if any
instruction which should be given to the Security
Trustee by any party under or in connection with this
Deed is for any reason not received by the Security
Trustee or is not made at the time it should be made.
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8.3 SECURITY TRUSTEE'S RELIANCE
In the event that the Security Trustee ceases to be a party to this
Deed as a result of its resignation, removal or otherwise (pursuant to
the provisions of the Security Trust and Intercreditor Deed), the
Security Trustee shall remain entitled to the benefit of Clause 8.2
(Security Trustee's Actions), Clause 10.1 (Security Trustee's Fees) and
17.1 (Security Trust and Intercreditor Deed) to the extent that any
fees have accrued and remain unpaid at the time it ceases to be the
Security Trustee.
9. ESCROW BANK'S ACTIONS
9.1 ESCROW BANK'S INSTRUCTIONS
9.1.1 Except as otherwise expressly provided herein the Escrow Bank
shall act solely in accordance with any written instructions
given to it by (or on behalf of) the Security Trustee and
shall assume without enquiry:
(a) that any instructions received by it from the
Security Trustee are duly given by the Security
Trustee; and
(b) unless it has received actual written notice of
revocation, that any instructions or directions given
by the Security Trustee have not been revoked and no
revocation of any such instructions by the Security
Trustee shall affect any action of the Escrow Bank in
reliance upon such instruction or direction prior to
actual receipt of the notice of revocation.
9.1.2 The Escrow Bank shall be entitled to request clarification of
any instruction or direction received by it from (or on behalf
of) the Security Trustee, and pending receipt of such
clarification to its reasonable satisfaction may refrain from
acting and shall have no liability for the consequences of its
refraining from acting.
9.1.3 If in issuing any instruction the Security Trustee breaches
any restriction set out in the Relevant Documents, this shall
not invalidate the instruction unless the Escrow Bank has been
informed (in writing) by the Security Trustee, before it
commences to act on such instruction, that such instruction
was invalid and should not be acted upon or the Escrow Bank
otherwise has actual knowledge that it should not act on such
instruction. If the Escrow Bank is so informed by the Security
Trustee after it has commenced to act on an instruction the
validity of any action taken shall not be affected but the
Escrow Bank shall take no further action in accordance with
such instruction, except to the extent that it has become
legally obliged to do so.
9.1.4 For the purposes of this Deed, the Escrow Bank shall be
entitled to rely conclusively upon any certificates, written
notices, written requests or written instructions received by
it pursuant hereto without making any further enquiries or
incurring any liability and, in the absence of any such
certificates, written notices, written requests or written
instructions, shall not be bound to take any action or may
refrain from taking any action under this Deed.
9.1.5 For the purposes of this Deed, the Escrow Bank may carry out
what in its discretion it reasonably determines to be
administrative acts (any such
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determination being, in the absence of manifest error, binding
on all parties hereto), or acts which are incidental to any
written instruction, without any instructions (though not
contrary to any written instructions) from any other party
hereto, but so that no such instruction shall have any effect
in relation to any administrative or incidental act performed
prior to actual receipt of such instruction by the Escrow
Bank.
9.1.6 Notwithstanding anything contained in this Deed, the Escrow
Bank is entitled at all times to act without having been
instructed by the Security Trustee in order to protect its own
position and interests in its capacity as Escrow Bank
(including its own financial interest).
9.1.7 The Escrow Bank shall be entitled to assume that all written
information, written notices, written instructions or
certifications received from the Security Trustee under or in
connection with this Deed are authentic, true, complete and
accurate and have been issued by a duly authorised
representative of the Security Trustee and shall not be
required to make further enquiries or incur any liabilities in
respect thereof.
9.1.8 In performing or carrying out its duties, obligations and
responsibilities, the Escrow Bank shall be considered to be
acting only in a mechanical and administrative capacity.
9.2 ESCROW BANK'S DISCRETIONS
The Escrow Bank may:
9.2.1 if it receives any instructions or directions from the
Security Trustee to take any action in relation to this Deed,
assume that all applicable conditions for taking that action
have been satisfied unless the Escrow Bank (in its capacity
hereunder) has actual knowledge to the contrary;
9.2.2 accept and rely upon:
(a) any written notice, written information, written
communication, certificate or other document believed
by it to be genuine and correct;
(b) as to any matters of fact which might reasonably be
expected to be within the knowledge of the other
parties to this Deed or any other person or any of
their respective directors, officers, partners or
employees or authorised representatives, any
certificate signed by or on behalf of such person as
sufficient evidence thereof;
(c) any written notice or certificate purporting to be
duly signed by the persons giving such notice or
certificate as having been duly signed by or on
behalf of such person; and
(d) any certificate to the effect that any particular
dealing or transaction or step or thing is, in the
opinion of the persons so certifying, expedient as
sufficient evidence that it is expedient,
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in each case without incurring any liability to any other
party to this Deed or other person or any of their respective
directors, officers, partners or employees or authorised
representatives for so accepting and relying, without having
any duty to enquire as to the accuracy thereof and without
being bound to ask for further evidence or authority or
otherwise;
9.2.3 in the exercise of any of its rights or the performance of any
of its duties, obligations and responsibilities under this
Deed, act through its agents selected by it which may be
corporations, partnerships or individuals, whether or not
lawyers or other professional persons, to transact or conduct,
or concur in transacting or conducting, any business and to do
or concur in doing all acts required to be done by the Escrow
Bank (including the receipt and payment of money) and the
Escrow Bank shall not be responsible for any misconduct or
omission on the part of, or be bound to supervise the
proceedings or acts of, any agent PROVIDED THAT the Escrow
Bank has exercised reasonable care in appointing such agent.
Any such agent shall be entitled to charge and be paid all
usual and properly incurred fees, expenses and other charges
for its services;
9.2.4 retain for its own benefit, without liability to account to
any other person, any fee or other sum properly received by it
for its own account; and
9.2.5 provide advisory or other services to or engage in any kind of
business with any Person party to or affected by the
arrangements the subject of any Relevant Document and may do
so without any obligation to account to, or disclose any such
arrangement to, any Person.
9.3 EXCLUDED OBLIGATIONS
Except as otherwise expressly provided in this Deed, the Escrow Bank
shall not:
9.3.1 be bound to account to any party to this Deed or any Secured
Creditor or any other party for any sum or the profit element
of any sum properly received by it for its own account;
9.3.2 unless provided for in this Deed or ordered to do so by a
court of competent jurisdiction, be bound to disclose to any
Person any confidential information and each party to this
Deed agrees that it shall not take any action to obtain from
the Escrow Bank any confidential information;
9.3.3 be under any obligations other than those which are
specifically provided for in this Deed;
9.3.4 have or be deemed to have any duty, obligation or
responsibility to, or relationship of trust or agency with any
party to this Deed; or
9.3.5 be required by anything contained in this Deed to expend or
risk its own funds or otherwise incur any financial liability
in the performance of any of its duties or the exercise of any
of its rights hereunder or under any other Relevant Document
to which it is a party.
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9.4 EXCLUSION OF ESCROW BANK'S LIABILITY
Unless caused directly by its gross negligence or wilful misconduct the
Escrow Bank shall not accept responsibility or be liable to any party
to this Deed or any other Person:
9.4.1 for the adequacy, accuracy and/or completeness of any
information supplied by the Escrow Bank or any other person in
connection with this Deed, or any other agreement, arrangement
or document entered into, made or executed in anticipation of,
pursuant to or in connection with this Deed;
9.4.2 for any losses of any Person or any liability of any Person
arising as a result of the Escrow Bank taking or refraining
from taking any action in relation to this Deed or otherwise,
whether in accordance with an instruction received or
otherwise;
9.4.3 for the exercise of, or the failure to exercise, any judgment,
discretion or power given to it by or in connection to this
Deed or any other agreement, arrangement or document entered
into, made or executed in anticipation of, pursuant to or in
connection to this Deed;
9.4.4 for any shortfall in relation to a payment out of an Escrow
Account or for any Tax in respect of the Escrow Accounts or in
respect of any payments out of an Escrow Account;
9.4.5 for the Security Trustee or any other Person acting or failing
to act in accordance with the Security Trust and Intercreditor
Deed;
9.4.6 for any moneys other than sums actually received by the Escrow
Bank; or
9.4.7 for any costs, charges, losses, damages, liabilities or
expenses arising from or connected with any act, default,
omission or misconduct of the Escrow Bank or its officers,
employees or agents in connection with this Deed.
9.5 NO PROCEEDINGS
Each party to this Deed (other than the Escrow Bank) agrees for the
benefit of the Escrow Bank's officers, employees and agents that it
will not assert any claim or take proceedings against any of the Escrow
Bank's officers, employees and agents in respect of any claim it might
have against the Escrow Bank or in respect of any act or omission of
any kind by that officer, employee or agent in relation to this Deed
and subject to Clause 18.3 (Third Party Rights) and the provisions of
Contracts (Rights of Third Parties) ▇▇▇ ▇▇▇▇ any officer, employee or
agent of the Escrow Bank may rely on this Clause 9.5.
9.6 REFRAIN FROM ILLEGALITY
The Escrow Bank may refrain from doing anything which in its reasonable
opinion would or might be contrary to any relevant law, directive or
regulation of any relevant jurisdiction or which would or might
otherwise render it liable to any Person, and the Escrow Bank may do
anything which is, in its sole discretion (such discretion to be
reasonably exercised), necessary to comply with any such law, directive
or regulation of any such jurisdiction.
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9.7 INDEMNITY
The Company shall forthwith on demand indemnify the Escrow Bank against
all losses, liabilities, costs, claims, actions or demands (including
without limitation, legal expenses and other out-of-pocket expenses
plus any VAT payable in respect thereof) which it may properly incur or
which may be made against the Escrow Bank as a result of or in
connection with its appointment or the exercise of its powers and
duties under this Deed notwithstanding the resignation of the Escrow
Bank pursuant to this Deed, other than in the case of the gross
negligence or wilful misconduct of the Escrow Bank. The indemnity
contained in this Clause 9.7 shall survive the termination or
expiration of this Deed.
10. SECURITY TRUSTEE AND ESCROW BANK FEES
10.1 SECURITY TRUSTEE'S FEES
The Company shall pay to the Security Trustee, the escrow fees together
with any applicable VAT thereon specified in the Security Trustee
Escrow Fee Letter at the times and in the amounts specified in the
Security Trustee Escrow Fee Letter.
10.2 ESCROW BANK'S FEES
The Company shall pay to the Escrow Bank, the fees together with any
applicable VAT thereon specified in the Escrow Bank Fee Letter at the
times and in the amounts specified in the Escrow Bank Fee Letter.
11. RESIGNATION OF ESCROW BANK
11.1 RESIGNATION OF ESCROW BANK
11.1.1 The Escrow Bank may, at any time by giving not less than
fifteen London Business Days' prior notice, (without being
required to assign any reason therefor) notify the Security
Trustee and the Company in writing that it wishes to cease to
be a party hereto as the Escrow Bank (a "CESSATION NOTICE").
11.1.2 Upon receipt of a cessation notice, the Security Trustee (with
the prior consent of each Debt Representative) may nominate a
successor (a "SUCCESSOR ESCROW BANK"). If no such nomination
is made by the Security Trustee before the date specified in
the cessation notice as being the date on which the Escrow
Bank wishes to cease to be a party hereto (the "CESSATION
DATE") (which date shall be a London Business Day falling not
less than fifteen London Business Days after the date of
delivery of the cessation notice to the Security Trustee) then
the Escrow Bank may nominate a successor Escrow Bank in
London.
11.1.3 For the avoidance of doubt, the resignation of the Escrow Bank
shall not be effective until the appointment of a successor
Escrow Bank has become effective in accordance with Clause
11.2 (Appointment of Successor Escrow Bank) below.
11.2 APPOINTMENT OF SUCCESSOR ESCROW BANK
If the Escrow Bank has delivered a cessation notice pursuant to Clause
11 (Resignation of Escrow Bank), then on the relevant cessation date
and PROVIDED THAT (a) the successor Escrow Bank has executed and
delivered to the Company and the Security Trustee a deed of novation in
such form as the Company and the Security Trustee may require
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pursuant to which the successor Escrow Bank becomes a party to, and
agrees to be bound by the terms and conditions of this Deed and agrees
to become a party to such other documents as may be required by the
Company and the Security Trustee; and (b) the Escrow Bank, without
responsibility or liability (other than for gross negligence or wilful
misconduct) and acting on the instructions of the Security Trustee, has
taken all steps necessary and/or become party to any document necessary
to transfer the Escrow Accounts to the successor Escrow Bank:
11.2.1 the resigning Escrow Bank shall cease to be a party hereto and
shall cease to have any obligation hereunder in such capacity
(without prejudice to any accrued liabilities under this Deed
and its obligations under this Clause 11.2 but shall remain
entitled to the benefit of the provisions of Clause 9.7
(Indemnity), Clause 10 (Security Trustee and Escrow Bank Fees)
(to the extent of any fees which have accrued and are unpaid
at the time it ceases to be the Escrow Bank hereunder), Clause
9.4 (Exclusion of Escrow Bank's Liability) and this Clause 11;
and
11.2.2 the successor Escrow Bank and each of the other parties hereto
shall have the same rights and obligations amongst themselves
as they would have had such successor Escrow Bank been an
original party hereto as Escrow Bank.
11.3 REMOVAL OF ESCROW BANK
The Security Trustee (acting on the instructions of either Note
Trustee) may, by notice to the Escrow Bank, require the Escrow Bank to
resign in accordance with Clause 11.1 (Resignation of Escrow Bank) and
upon receipt of any such notice the Escrow Bank shall resign in
accordance with Clause 11.1 (Resignation of Escrow Bank) and, for the
avoidance of doubt, the provisions of Clause 11.2 (Appointment of
Successor Escrow Bank) shall apply.
12. ASSIGNMENT
No party may assign all or any of its rights or transfer any of its
rights and obligations under this Deed except as contemplated by this
Deed, the Security Trust and Intercreditor Deed or as required by law.
13. FURTHER ASSURANCE
The parties hereto agree that they will co-operate fully to do all such
further acts and things and execute any further documents as may be
necessary or desirable to give full effect to the arrangements
contemplated by this Deed, subject to any such party (other than the
Company) being reimbursed to its satisfaction by the Company for any
costs, expenses (including VAT), liabilities or fees reasonably
incurred by it in the negotiation, preparation or execution of any such
further documents.
14. REMEDIES AND WAIVERS, PARTIAL INVALIDITY
14.1 REMEDIES AND WAIVERS
14.1.1 No failure to exercise, or any delay in exercising, on the
part of any party to this Deed, any right or remedy under this
Deed shall operate as a waiver, nor shall
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any single or partial exercise of any right or remedy prevent
any further or other exercise or the exercise of any other
right or remedies.
14.1.2 The rights and remedies provided in this Deed are cumulative
and not exclusive of any rights or remedies provided by law.
14.2 PARTIAL INVALIDITY
If, at any time, any provision of this Deed is or becomes illegal,
invalid or unenforceable in any respect under any law of any
jurisdiction, neither the legality, validity or enforceability of the
remaining provisions nor the legality, validity or enforceability of
the provision under the law of any other jurisdiction will in any way
be affected or impaired.
15. AMENDMENTS
The provisions of this Deed may not be amended except with the written
agreement of all the parties hereto and each Note Trustee.
16. NOTICES
16.1 COMMUNICATIONS IN WRITING
Any communication to be made under or in connection with this Deed
shall be made in writing and, unless otherwise stated, may be made by
fax or letter.
16.2 ADDRESSES
The address and fax number (and the department or officer, if any, for
whose attention any communication is to be made) of each party for any
communication or document to be made or delivered under or in
connection with this Deed is:
16.2.1 identified with its name below; or
16.2.2 if not originally a party on the date hereof, specified in the
deed of novation pursuant to which such party undertakes to
become a party to, and be bound by the terms and conditions of
this Deed,
or any substitute details which a party may notify to the Security
Trustee (or the Security Trustee may notify to the other parties, if a
change is made by the Security Trustee) by not less than five London
Business Days' notice and promptly upon receipt of any notification of
any new or changed details, the Security Trustee shall notify the other
parties.
16.3 DELIVERY
16.3.1 Any communication or document made or delivered by one Person
to another under or in connection with this Deed will only be
effective:
(a) if by way of fax, when received in legible form; or
(b) if by way of letter, when it has been left at the
address specified in Clause 16.2 (Addresses) above or
five London Business Days after being deposited in
the post postage prepaid in an envelope addressed to
the addressee at that address,
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and, if a particular department or officer is specified as
part of that address, if addressed to that department or
officer.
16.3.2 Notwithstanding the provisions of sub-clause 16.3.1(b) above,
any communication or document to be made or delivered to the
Security Trustee or the Escrow Bank will be effective only
when actually received by the Security Trustee or the Escrow
Bank, as the case may be, and then only if it is expressly
marked for the attention of the department or officer
identified with such person's signature below (or any
substitute department or officer as such person shall specify
for this purpose).
16.4 ENGLISH LANGUAGE
Any notice given under or in connection with this Deed must be in
English.
17. MISCELLANEOUS
17.1 SECURITY TRUST AND INTERCREDITOR DEED
The parties hereto each acknowledge that the Security Trustee when
acting hereunder shall be acting in accordance with and subject to the
terms of the Security Trust and Intercreditor Deed. In the event of a
conflict between the terms of this Deed and the Security Trust and
Intercreditor Deed, the terms of the Security Trust and Intercreditor
Deed shall prevail.
17.2 COUNTERPARTS
This Deed may be executed in any number of counterparts and by the
different parties hereto on separate counterparts, each of which, when
executed and delivered, shall constitute an original, but all the
counterparts shall together constitute one and the same instrument.
18. GOVERNING LAW AND JURISDICTION
18.1 GOVERNING LAW
This Deed and all matters arising from or connected with it are
governed by, and shall be construed in accordance with, English law.
18.2 JURISDICTION
18.2.1 The courts of England have exclusive jurisdiction to settle
any dispute (a "DISPUTE"), arising from or connected with this
Deed (including a dispute regarding the existence, validity or
termination of this Deed) or the consequences of its nullity.
18.2.2 The parties agree that the courts of England are the most
appropriate and convenient courts to settle any Dispute and,
accordingly, that they will not argue to the contrary.
18.2.3 This Clause 18.2 is for the benefit of the Security Trustee,
the New Bonding Facility Agent and the Escrow Bank only. As a
result, nothing in this Clause 18 prevents the Security
Trustee, the New Bonding Facility Agent and the Escrow Bank
from taking proceedings relating to a Dispute ("PROCEEDINGS")
in any other courts with jurisdiction. To the extent allowed
by law, the Security Trustee,
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the New Bonding Facility Agent and the Escrow Bank may take
concurrent Proceedings in any number of jurisdictions.
18.3 THIRD PARTY RIGHTS
18.3.1 Unless expressly provided to the contrary in this Deed, a
person who is not a party has no right under the Contracts
(Rights of Third Parties) ▇▇▇ ▇▇▇▇ to enforce or enjoy the
benefit of any term of this Deed.
18.3.2 Notwithstanding any term of this Deed, the consent of any
person who is not a party to this Deed (other than the Note
Trustees) is not required to rescind or vary this Deed at any
time.
IN WITNESS whereof this Deed has been executed and delivered as a deed by the
parties hereto the day and year first above written.
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SCHEDULE 1
DEFINITIONS
"ADDITIONAL AMOUNTS" has the meaning ascribed to it in the Indentures.
"AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect
common control with such specified Person, and, in the case of a
natural Person, any immediate family member of such Person. For
purposes of this definition, "control", as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of such
Person, whether through the ownership of voting securities, by
agreement or otherwise; provided that beneficial ownership of 20% or
more of the Voting Stock of a Person will be deemed to be control. For
purposes of this definition, the terms "controlling", "controlled by"
and "under common control with" have correlative meanings.
"AGENCY AGREEMENT" means the agreement, dated on or about the date of
this Deed, appointing the initial Paying Agent and the Registrar in
relation to the Notes for the purposes specified therein and any other
agreement for the time being in force appointing successor Paying
Agents and/or Registrars in relation to the Notes, or in connection
with their duties, the terms of which have previously been approved in
writing by the relevant Note Trustee.
"BOARD OF DIRECTORS" means:
(a) with respect to a corporation, the board of directors or other
equivalent body of the corporation (or any duly authorized
committee thereof) and, in the case of any corporation having
both a supervisory board and an executive or management board,
the supervisory board (or any duly authorized committee
thereof);
(b) with respect to a limited partnership, the board of directors
or other equivalent body (or any duly authorized committee
thereof) of the general partner of the partnership; and
(c) with respect to any other Person, the board or committee of
such Person serving a similar function.
"CAPITAL STOCK" means:
(a) in the case of a corporation, any and all shares, interests,
participations, or other equivalent (however designated and
whether or not voting) of share capital;
(b) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalent
(however designated and whether or not voting) of share
capital;
(c) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or
limited); and
- 21 -
(d) any other interest or participation that confers on a Person
the right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person.
"CAPTIVE INSURANCE COMPANY" means Marconi Insurance Limited, a limited
liability company incorporated under the laws of Guernsey.
"CASH COLLATERAL RELEASES" means all releases to, or upon the order or
instructions of, the Company or any of its Subsidiaries of (1)
collateral or security constituting cash or Cash Equivalents from any
Person (other than the Company and its Subsidiaries), which collateral
or security was provided by the Company or any of its Subsidiaries (a)
prior to the Issue Date, (b) in the form of deposits into the Existing
Performance Bond Escrow Accounts, (c) to the New Bonding Facility Agent
under the New Bonding Facility Agreement, (d) to any agent, security
trustee or lender under, or otherwise in respect of, any Replacement
New Bonding Facility Agreement, (e) in respect of any Existing
Performance Bond, or (f) in respect of the Interim Bonding Facilities;
PROVIDED THAT (i) releases of collateral or security constituting cash
or Cash Equivalents in connection with any surety bond, appeal bond,
bid bond, performance bond, letter of credit, bank guarantee or other
obligation of a like nature issued by or on behalf of the Captive
Insurance Company shall not constitute a Cash Collateral Release to the
extent that the Captive Insurance Company retains such cash and Cash
Equivalents, (ii) releases of collateral or security constituting cash
or Cash Equivalents by the New Bonding Facility Agent to a lender under
the New Bonding Facility Agreement shall not constitute a Cash
Collateral Release to the extent that such lender retains such cash and
Cash Equivalents to secure the obligations owed to it under the New
Bonding Facility Agreement, (iii) releases of collateral or security
constituting cash or Cash Equivalents in connection with any Italian
Easy Loan shall not constitute a Cash Collateral Release and (iv)
releases of collateral or security constituting cash or Cash
Equivalents in connection with the renewal or extension of any surety
bond, appeal bond, bid bond, performance bond, letter of credit, bank
guarantee or other obligation of a like nature issued under the Interim
Bonding Facilities shall not constitute a Cash Collateral Release to
the extent that the issuer of the renewed or extended surety bond,
appeal bond, bid bond, performance bond, letter of credit, bank
guarantee or like obligation retains such cash or Cash Equivalents
under the terms of an Interim Bonding Facility; or (2) cash or Cash
Equivalents held in escrow with respect to sales, transfers or other
dispositions of assets or property by the Company or any of its
Subsidiaries prior to the Issue Date. For the avoidance of doubt, any
release of cash or Cash Equivalents that has been held in escrow
pursuant to any of the ESOP Escrow Agreement, the Mobile ESOP Escrow
Agreement, the Israeli ESOP Escrow Agreement or the Singapore ESOP
Escrow Agreement shall not constitute a Cash Collateral Release.
"CASH EQUIVALENTS" means:
(a) United States dollars, British pounds sterling, Euros, any
other currency that is freely convertible into any of the
foregoing or a claim on the European Central Bank;
- 22 -
(b) securities (i) issued or directly and fully guaranteed or
insured by the US government or any agency or instrumentality
of the US government (PROVIDED THAT the full faith and credit
of the United States is pledged in support of those
securities), or (ii) which are denominated in Euros or British
pounds sterling and are issued by, or directly and fully
guaranteed or insured by a member of the European Union, or
any agency or instrumentality thereof, and which mature, in
each case, within six months after the date of acquisition;
(c) certificates of deposit and Eurodollar time deposits issued by
a Highly Rated Financial Counterparty and which mature within
six months after the date of acquisition;
(d) repurchase obligations with a term of not more than seven days
for underlying securities of the types described in paragraphs
(a) and (b) above entered into with a Highly Rated Financial
Counterparty;
(e) commercial paper having the highest rating obtainable from
▇▇▇▇▇'▇ Investors Service, Inc. or Standard & Poor's Rating
Services (or any successor to the ratings business of either
of the foregoing) and which matures within six months after
the date of acquisition;
(f) marketable direct obligations of any member of the European
Union in each case, rated at least "AAA" or the equivalent
thereof by both ▇▇▇▇▇'▇ Investors Service Inc. and Standard &
Poor's Rating Services (or any successor to the ratings
business of either of the foregoing), or obligations fully and
unconditionally guaranteed by one of those sovereign nations
(or any agency thereof), of the type and maturity described in
paragraph (a) through (e) above, which have ratings described
in such clauses or equivalent ratings from comparable foreign
rating agencies; and
(g) money market funds with at least 95% of the fund's assets
constituting Cash Equivalents of the kinds described in
paragraphs (a) through (f) of this definition.
"CDI" means:
(a) in the case of DTC, a certificateless depositary interest
representing an interest in Global Junior Notes or the Global
Senior Notes; or
(b) in the case of Euroclear or Clearstream, Luxembourg, a
certificated depositary interest representing an interest in
Global Junior Notes or the Global Senior Notes.
"CLEARSTREAM, LUXEMBOURG" means Clearstream Banking societe anonyme.
"DEBT REPRESENTATIVE" means in relation to the Senior Notes, the Senior
Note Trustee, in relation to the Junior Notes, the Junior Note Trustee
and, in relation to the New Bonding Facility Agreement, the New Bonding
Facility Agent.
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"DEFAULT" means any event that is, or with the passage of time or the
giving of notice or the making of any determination or any combination
thereof would be, an Event of Default.
"DEFINITIVE REGISTERED JUNIOR NOTES" means Junior Notes in definitive
registered form.
"DEFINITIVE REGISTERED SENIOR NOTES" means Senior Notes in definitive
registered form.
"DELEGATE" means any delegate, agent, Attorney, co-trustee or
additional but separate trustee, custodian, depository or Receiver
appointed by the Security Trustee in accordance with the terms of the
Security Documents and the Security Trust and Intercreditor Deed.
"DEPOSIT AGREEMENT" means the deposit agreement dated as of the Issue
Date between the Company and The Bank of New York, as Depositary.
"DEPOSITARY" means the Person appointed as agent by the Company under
the Deposit Agreement for the purposes of maintaining records in which
it shall record the ownership, transfer and increases or decreases in
the principal amount of CDIs in a Global Senior Note or a Global Junior
Note, as the case may be which initially shall be The Bank of New York.
"DOLLAR EQUIVALENT" means with respect to any monetary amount in a
currency other than United States Dollars, at any time of determination
thereof, the amount of United States Dollars obtained by translating
the amount of such foreign currency into United States Dollars at the
Bloomberg Composite Spot Rate for the purchase of United States Dollars
with the applicable currency at 11.30 on the previous Business Day
prior to such determination.
"DTC" means The Depository Trust Company or its nominee.
"ENFORCEMENT EVENT" means the acceleration of any Secured Obligations
(other than the Secured Obligations arising under the New Bonding
Facility Agreement) or any declaration that any Secured Obligation
(other than Secured Obligations arising under the New Bonding Facility
Agreement) are prematurely due and payable (other than solely as a
result of it becoming unlawful for a Secured Creditor to perform its
obligations under the Relevant Documents) or any failure by any Obligor
to pay any principal amount in respect of any Secured Obligations
(other than Secured Obligations arising under the New Bonding Facility
Agreement) whether on maturity or otherwise.
"EQUITY INTERESTS" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security
that is convertible into, or exercisable or exchangeable for, Capital
Stock).
"ESCROW ACCOUNTS" means the Existing Performance Bond Escrow Accounts
and the Mandatory Redemption Escrow Accounts.
"ESCROW AND DISTRIBUTION AGREEMENT" means the escrow and distribution
agreement dated March 27, 2003 between the Company, Marconi plc, the
security trustee named therein, The Bank of New York as distribution
agent, The Law Debenture Trust
- 24 -
Corporation p.l.c., Ancrane, Bondholder Communications Group and the
Supervisors (as defined therein) with respect to the Restructuring.
"ESCROW BANK FEE LETTER" means the letter dated on or about the date
hereof from the Escrow Bank to the Company in respect of fees payable
to the Escrow Bank pursuant to Clause 10 (Security Trustee and Escrow
Bank Fees).
"ESOP ESCROW AGREEMENT" means the ESOP escrow agreement dated December
13, 2002 between Marconi plc, the Issuer, HSBC Bank plc and Barclays
Bank PLC.
"EURO" or "E" means the currency introduced at the start of the third
stage of the European economic and monetary union pursuant to the
Treaty establishing the European Community, as amended by the Treaty on
European Union.
"EUROCLEAR" means Euroclear Bank S.A./N.V.
"EVENT OF DEFAULT" when used with respect to the Notes, has the meaning
set forth in Section 6.01 (Events of Default) of the relevant
Indentures.
"EXISTING PERFORMANCE BONDS" means surety bonds, appeal bonds, bid
bonds, performance bonds, letters of credit, bank guarantees or other
obligations of a like nature issued by a bank, insurance company or
other financial institution on behalf of the Company or any of its
Subsidiaries in existence on the Issue Date and not issued pursuant to
the Interim Bonding Facilities, until such bonds, letters of credit,
guarantees or other obligations expire, terminate or are cancelled.
"EXISTING PERFORMANCE BOND ESCROW ACCOUNTS" means the escrow account or
accounts in the name of the Company with the Escrow Bank designated as
such and established for the purpose referred to in Clause 4.1 (Purpose
of Existing Performance Bond Escrow Accounts), details of which are set
out in Schedule 2 (Escrow Accounts).
"GLOBAL JUNIOR NOTES" means each global security in bearer form,
representing all or a part of the Junior Notes, without coupons for
payments attached, authenticated and delivered to the Holder for such
Notes in accordance with the Junior Note Indenture, or any other
Holder.
"GLOBAL SENIOR NOTES" means each global security in bearer form,
representing all or a part of the Senior Notes, without coupons for
payments attached, authenticated and delivered to the Holder of such
Senior Notes or such portion of such Senior Notes in accordance with
the Senior Note Indenture.
"GROUP" means all the Group Companies.
"GROUP COMPANY" means the Company or any Subsidiary of the Company.
"GUARANTEE" means any guarantee of any of the Secured Obligations.
"GUARANTORS" means the companies listed in Schedule 1 (Guarantors) of
the Security Trust and Intercreditor Deed together with any Person who
executes a Guarantee and accedes to the Security Trust and
Intercreditor Deed as a "GUARANTOR".
- 25 -
"HIGHLY RATED FINANCIAL COUNTERPARTY" means a bank or financial
institution whose financial obligations are rated P-1 by ▇▇▇▇▇'▇
Investors Service, Inc. or A-1 by Standard and Poor's Rating Services
(or any successor to the ratings business of either of the foregoing)
or the equivalent rating category of another internationally recognized
rating agency.
"HOLDER" means (i) for so long as any Junior Notes or any Senior Notes,
as the case may be, are represented by one or more Global Junior Notes
or, as the case may be, Global Senior Notes, the bearer thereof which
shall be the Depositary and (ii) in the event that Definitive
Registered Junior Notes or Definitive Registered Senior Notes, as the
case may be, are issued, the Person in whose name a Definitive
Registered Junior Notes or Definitive Registered Senior Notes, as the
case may be, is registered on the Registrar's books.
"INDENTURES" means the Senior Note Indenture and the Junior Note
Indenture.
"INITIAL SECURITY DOCUMENTS" means the Guarantees guaranteeing the
Secured Obligations and the security documents, each to be dated on or
before the Issuing Date that are set forth in the Indentures.
"INSTRUCTING TRUSTEE" means:
(a) prior to the discharge in full of the Secured Obligations
under the Senior Notes and the Senior Note Indenture, the
Senior Note Trustee acting on the instructions of the Relevant
Holders of the Senior Notes; and
(b) following the discharge in full of the Secured Obligations
under the Senior Notes and the Senior Note Indenture and prior
to the discharge in full of the Secured Obligations under the
Junior Notes and the Junior Note Indenture, the Junior Note
Trustee acting on the instructions of the Relevant Holders of
the Junior Notes.
"INTERIM BONDING FACILITIES" means:
(a) the interim bonding facility dated 10 May 2002 (as amended)
among Barclays Bank PLC, HSBC Bank plc and JPMorgan Chase Bank
and Marconi Bonding Limited providing for the issuance of
surety bonds, appeal bonds, bid bonds, performance bonds,
letters of credit, bank guarantees or other obligations of a
like nature; and
(b) the temporary bonding facility dated 8 February 2002 among
Barclays Bank PLC, HSBC Bank plc and Marconi Bonding Limited,
providing for the issuance of surety bonds, appeal bonds, bid
bonds, performance bonds, letter of credit, bank guarantees or
other obligations of a like nature.
"ISRAELI ESOP ESCROW AGREEMENT" means the escrow agreement dated
October 21, 2002 between the Issuer, Marconi plc, HSBC Bank plc,
Barclays Bank PLC, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Trustees Limited and ▇▇▇▇▇ & Overy.
"ISSUE DATE" means the date on which the Notes are first originally
issued.
- 26 -
"ITALIAN EASY LOANS" means the subsidised loans existing as of the
Issue Date granted by Italian Ministry of Productive Activities
(formerly Ministry of Industry), either directly or through its
authorised agents, in favour of Marconi Communications S.p.A. and
Marconi Sub S.p.A. or any other Subsidiary of the Company incorporated
or organised under the laws of Italy pursuant to the provisions of Law
no. 46 date 17 February 1982 and Legislative Decree No. 297 dated 27
July 1999.
"JUNIOR NOTE INDENTURE" means the indenture dated as of 19 May 2003
between and among the Company as issuer, the initial guarantors named
therein and JPMorgan Chase Bank as trustee, governing the Junior Notes,
as originally executed or as it may from time to time be supplemented
or amended by one or more indentures supplemental thereto entered into
pursuant to the applicable provisions thereof.
"JUNIOR NOTE TRUSTEE" means JPMorgan Chase Bank or any successor
trustee provisions of the Junior Note Indenture.
"JUNIOR NOTES" means the Guaranteed Junior Secured Notes due 2008
issued by the Company pursuant to the Junior Note Indenture.
"JUNIOR PIK NOTES" means any Junior Notes issued in payment of interest
or Additional Amounts paid in kind on outstanding Junior Notes pursuant
to the Junior Note Indenture.
"LIEN" means with respect to any asset or property, any mortgage or
deed of trust, lien (statutory or otherwise), pledge, charge, security
interest, assignment, deposit, easement, hypothecation, or other
encumbrance of any kind upon or in respect of such asset or property,
whether or not filed, recorded or otherwise perfected under applicable
law, including any conditional sale, capital lease or other title
retention agreement, any lease in the nature thereof, any agreement to
give a charge, mortgage or other security interest in and filing of or
agreement to give any financing statement under a statute or regulation
of any jurisdiction.
"LONDON BUSINESS DAY" means a day (other than a Saturday or Sunday) on
which commercial banks in London are open for general business.
"MANDATORY REDEMPTION ESCROW ACCOUNTS" means the MREA US Dollar Escrow
Account, the MREA Euro Escrow Account and the MREA Sterling Escrow
Account established for the purpose referred to in Clause 3.1 (Purpose
of Mandatory Redemption Escrow Accounts).
"MOBILE ESOP ESCROW AGREEMENT" means the escrow agreement dated August
2, 2002 between the Issuer, Marconi plc, Marconi ▇▇▇▇▇▇ Street Limited,
HSBC Bank plc, Barclays Bank PLC, Salomon Brothers International
Limited, UBS AG, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Trustees Limited and ▇▇▇▇▇▇▇▇▇ and May.
"MREA EURO ESCROW ACCOUNT" means the escrow account designated as such
and denominated in euro with the Escrow Bank and details of which are
set out in Schedule 2 (Escrow Accounts).
- 27 -
"MREA STERLING ESCROW ACCOUNT" means the escrow account designated as
such and denominated in British sterling with the Escrow Bank and
details of which are set out in Schedule 2 (Escrow Accounts).
"MREA US DOLLAR ESCROW ACCOUNT" means the escrow account designated as
such and denominated in US dollars with the Escrow Bank and details of
which are set out in Schedule 2 (Escrow Accounts).
"NEW BONDING FACILITY AGREEMENT" means the L50 million committed
revolving bonding facility agreement dated March 27, 2003 among the
Comany, Marconi Bonding Limited, the New Bonding Facility Security
Trustee, certain New Bonding Facility Banks and certain Non-US
Subsidiaries providing for the issuance of surety bonds, appeal bonds,
bid bonds, performance bonds, letters of credit, bank guarantees or
other obligations of a like nature on behalf of the Company and/or any
Non-US Subsidiary, as such agreement may be amended, extended,
supplemented or otherwise modified from time to time (including,
without limitation, any successive amendments, extensions, supplements
or other modifications of the foregoing); provided that (1) the
aggregate principal amount of Indebtedness (as defined in the
Indentures) at any one time outstanding thereunder shall not exceed
L50 million (or the Sterling Equivalent) and (2) the term of such
facility shall not extend beyond the date that is 30 months after the
Issue Date (but, for the avoidance of doubt, Indebtedness (as defined
in the Indentures) and other obligations incurred or arising under such
facility on or prior to the date that is 30 months after the Issue Date
may extend beyond such date in accordance with the provisions of such
facility).
"NEW BONDING FACILITY FUNDING AMOUNT" means at any time the lesser of
(i) L25,000,000 (or the Sterling Equivalent) and (ii) one half of the
aggregate facility limit under the New Bonding Facility Agreement.
"NON-US SUBSIDIARY" means any Subsidiary of the Company other than a US
Subsidiary.
"NOTE TRUSTEE" means each of the Senior Note Trustee and the Junior
Note Trustee and "NOTE TRUSTEE" means either of them.
"NOTES" means the Senior Notes and the Junior Notes, collectively.
"OBLIGORS" means each of the Company and the Guarantors.
"OUTSTANDING" means, as of any date of determination, in relation to
the Notes all the Notes issued other than:
(a) those Notes which have been redeemed pursuant to the
Indentures;
(b) those Notes in respect of which the date for redemption in
accordance with the Indentures has occurred and the redemption
moneys (including premium (if any) and all interest and
Additional Amounts, if any, payable thereon) have been duly
paid to the relevant Note Trustee or to the Paying Agent in
the manner provided in the Agency Agreement (and where
appropriate notice to that effect has been given to the
relevant Holders) and remain available for payment against
presentation of the relevant Notes;
- 28 -
(c) those mutilated or defaced Notes which have been surrendered
and cancelled and in respect of which replacements have been
issued;
(d) (for the purpose only of ascertaining the principal amount of
the Notes outstanding and without prejudice to the status for
any other purpose of the relevant Notes) those Notes which are
alleged to have been lost, stolen or destroyed and in respect
of which replacements have been issued; and
(e) any Global Senior Note or, as the case may be, any Global
Junior Note to the extent that it shall have been exchanged
for another Global Senior Note or, as the case may be, another
Global Junior Note or for Definitive Registered Senior Notes
or, as the case may be, for Definitive Registered Junior Note
pursuant to its provisions or the provisions of the relevant
Indenture;
PROVIDED THAT for each of the following purposes, namely:
(i) the right to attend and vote at any meeting of the Holders or
any of them;
(ii) the determination of how many and which Notes are for the time
being outstanding for the purposes of determining whether the
Required Holders have consented to the cessation of a Payment
Stop Event, the cancellation of a Standstill Notice or for the
purposes of the relevant and applicable sections of the
Indentures (as specified in the definition of "OUTSTANDING" in
such Indenture);
(iii) any discretion, power or authority (whether contained in the
Indentures or vested by operation of law) which the relevant
Note Trustee is required, expressly or impliedly, to exercise
in or by reference to the interests of the Holders or any of
them; and
(iv) the determination by the relevant Note Trustee whether any
event, circumstance, matter or thing is, in its opinion,
materially prejudicial to the interests of the Holders or any
of them,
those Notes (if any) (1) which are for the time being held by or on
behalf of the Company, a Guarantor, any of their respective
Subsidiaries or any Affiliate of any of the foregoing, in each case as
beneficial owner, and (2) which are held in escrow pursuant to the
Escrow and Distribution Agreement for distribution to Scheme Creditors
shall (unless and until ceasing to be so held) be deemed not to remain
Outstanding.
"PAYING AGENT" means initially The Bank of New York and thereafter, any
Person (other than the Company, any Guarantor or any Affiliate of the
Company or any Guarantor) authorised by the Company to authenticate and
pay the principal of, premium, if any, and interest and Additional
Amounts, if any, on any Notes on behalf of the Company in accordance
with the Agency Agreement.
"PAYMENT DATE" means any date on which a payment, prepayment, purchase
or redemption (whether such payment, prepayment, purchase or redemption
is a payment, prepayment, purchase or redemption of principal, interest
or premium or is a payment or prepayment of Additional Amounts, fees,
commission or otherwise) is made or is
- 29 -
permitted to be made by an Obligor (including, without limitation,
whether directly or indirectly by use of amounts standing to the credit
of the Escrow Accounts in accordance with this Deed) in accordance and
in compliance with the terms of the Relevant Documents.
"PAYMENT STOP EVENT" means:
(a) the failure by any Obligor to pay on the due date any amount
payable under the Senior Notes or the Senior Note Indenture;
and/or
(b) the acceleration of amounts due under the Senior Notes or the
Senior Note Indenture following the occurrence of an Event of
Default under the Senior Notes or the Senior Note Indenture,
PROVIDED THAT a Payment Stop Event shall cease to be continuing if:
(i) the relevant Default under the Senior Notes or the Senior Note
Indenture has been remedied or waived and, if amounts due
under the Senior Notes have been accelerated, any such
acceleration has been rescinded in accordance with the Senior
Note Indenture; or
(ii) the Required Holders of at least a majority of the principal
amount of the then Outstanding Senior Notes consent in writing
to the cessation of the relevant Payment Stop Event; or
(iii) the Secured Obligations arising under the Senior Notes and the
Senior Note Indenture have been discharged in full,
and, in the case of (i), (ii) or (iii), the Senior Note Trustee will
promptly issue a written notice to the other Debt Representatives, the
Security Trustee and the Company notifying them that the relevant
Payment Stop Event has ceased to be continuing.
"PERSON" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization,
limited liability company or government or other entity.
"POST-ACCELERATION PAYMENT PRIORITIES" as set out in the Security Trust
and Intercreditor Deed are the priorities set out below:
(a) FIRST, pro rata according to the respective amounts thereof,
in or towards satisfaction of the liabilities (secured or
unsecured) and any unpaid fees, costs and expenses in each
case owing to, and for the account of, the Security Trustee,
any Receiver or Delegate, the Senior Note Trustee, the Junior
Note Trustee, the New Bonding Facility Agent, the Depositary,
the Paying Agent, the Escrow Bank and the Registrar;
(b) SECOND, to the New Bonding Facility Agent for application in
or towards satisfaction of all liabilities (secured or
unsecured) owing to the New Bonding Facility Banks (as defined
in the New Bonding Facility Agreement) under the New Bonding
Facility Agreement;
- 30 -
(c) THIRD, in or towards satisfaction of all liabilities (secured
or unsecured) owing to the Junior Note Trustee as Note Trustee
for the holders of the Junior Notes, to the extent of any True
Up Amount paid to the Senior Note Trustee and not previously
applied pursuant to this paragraph (c);
(d) FOURTH, in or towards satisfaction of all liabilities (secured
or unsecured) owing to the Senior Note Trustee as Note Trustee
for the holders of the Senior Notes;
(e) FIFTH, in or towards satisfaction of all liabilities (secured
or unsecured) owing to the Junior Note Trustee as Note Trustee
for the holders of the Junior Notes;
(f) SIXTH, any other person (other than the Company) so entitled
to the proceeds (including any person entitled to such
proceeds pursuant to mandatory rules of law of any
jurisdiction);
(g) SEVENTH, the Company.
"PRE-ACCELERATION PAYMENT PRIORITIES" as set out in the Security Trust
and Intercreditor Deed are the priorities set out below:
(a) All monies credited to the Existing Performance Bond Escrow
Accounts will be applied in accordance with the terms and
conditions of the Security Trust and Intercreditor Deed and
this Deed.
(b) All monies credited to the Mandatory Redemption Escrow
Accounts in accordance with the Junior Note Indenture, the
Senior Note Indenture, this Deed and the Security Trust and
Intercreditor Deed, will be applied on any Payment Date
strictly in accordance with the following order of priority:
(i) FIRST, in or towards satisfaction of all liabilities
(secured or unsecured) owing to the Senior Note
Trustee as Note Trustee for holders of the Senior
Notes, to the extent of any True-Up Amount paid to
the Junior Note Trustee and not previously applied
pursuant to this paragraph (i);
(ii) SECOND, in or towards satisfaction of all liabilities
(secured or unsecured) owing to the Junior Note
Trustee as Note Trustee for the holders of the Junior
Notes;
(iii) THIRD, in or towards satisfaction of all liabilities
(secured or unsecured) owing to the Senior Note
Trustee as Note Trustee for the holders of the Senior
Notes;
(iv) FOURTH, any other person (other than the Company) so
entitled to the proceeds (including any person
entitled to such proceeds pursuant to the mandatory
rules of law of any jurisdiction); and
(v) FIFTH, the Company.
"RECEIVER" means a receiver or manager or administrative receiver of
the whole or any part of the Transaction Security.
- 31 -
"REDEMPTION CERTIFICATE" means a certificate in substantially the form
set out in Schedule 4 (Form of Redemption Certificate) delivered by the
Company to the Security Trustee.
"REDEMPTION PRICE" means a redemption price in cash in the Relevant
Currency of 110% of the principal amount of the Junior Notes or the
Senior Notes, as the case may be, plus in each case accrued and unpaid
interest thereon and Additional Amounts in respect thereof, if any, to
the Repayment Date.
"REGISTRAR" means any Person appointed by the Company to maintain an
office or agency where Definitive Registered Senior Notes or Definitive
Registered Junior Notes, as the case may be, may be presented for
transfer, exchange or payment under the relevant Indentures, which
initially shall be The Bank of New York.
"RELEASE CERTIFICATE" means a certificate in substantially the form set
out in Schedule 3 (Form of Release Certificate) delivered to the
Security Trustee by the Company.
"RELEVANT CURRENCY" means United States dollars, PROVIDED THAT in the
event the Company elects to pay a redemption amount in British pounds
sterling in accordance with the Indentures, the Relevant Currency of
such redemption amount shall be British pounds sterling.
"RELEVANT DOCUMENT" means the Security Trust and Intercreditor Deed,
any Agent/Trustee/New Bonding Facility Bank Accession Letter (as
defined in the Security Trust and Intercreditor Deed), any Guarantor
Accession Letter (as defined in the Security Trust and Intercreditor
Deed), the Indentures, this Deed, the Notes, the New Bonding Facility
Agreement, the Security Documents, (including the Guarantee of the
Senior Notes, the Guarantee of the Junior Notes and the Composite
Guarantee (as defined in the Indentures) the Escrow Agreement the Fee
Letter (as defined in the Security Trust and Intercreditor Deed) and
any Additional Remuneration Fee Letter (as defined in the Security
Trust and Intercreditor Deed) and any notices issued and any other
documents or agreements entered into in connection with or relating to
such documents.
"RELEVANT HOLDER" means in relation to any tranche of Notes, the
Required Holders of at least 25 per cent. of the principal amount of
the then outstanding Notes in such tranche, PROVIDED THAT if in
relation to any instruction to any Note Trustee, no instructions
inconsistent with such instructions have been given to the relevant
Note Trustee by the holders of a majority of the principal amount of
the then outstanding applicable Notes, then the holders of such
majority shall be the "RELEVANT HOLDERS".
"REPAYMENT DATE" means each date upon which the Company redeems all or
part of the Outstanding Senior Notes or the Outstanding Junior Notes,
as the case may be.
"REPLACEMENT NEW BONDING FACILITY AGREEMENTS" means any facility
agreement or agreements entered into on or after the Issue Date between
or among the Company and/or any Non-US Subsidiary with any bank,
insurance company or other financial institution providing for the
issuance of surety bonds, appeal bonds, bid bonds, performance bonds,
letters of credit, bank guarantees or other obligations of a like
nature on behalf of the Company and/or any Non-US Subsidiary, as such
agreement or agreements may be amended, extended, supplemented or
otherwise modified from time
- 32 -
to time (including, without limitation, any successive amendments,
extensions, supplements or other modifications of the foregoing);
PROVIDED THAT (1) the term of each such facility shall not extend
beyond the date that is 30 months after the Issue Date (but, for the
avoidance of doubt, Indebtedness (as defined in the Indentures) and
other obligations incurred or arising under any such facility on or
prior to the date that is 30 months after the Issue Date may extend
beyond such date in accordance with the provisions of any such
facility) and (2) no such facility agreement shall require the Company
and/or any Non-US Subsidiary to cash-collateralize any instrument
issued thereunder, or otherwise require the Company and/or any Non-US
Subsidiary to grant any Lien to secure any instrument issued thereunder
on any property or asset having a value, in excess of 50% of the
aggregate face or principal amount of any such instrument.
"REQUIRED HOLDERS" means at any time, the Holder or Holders of at least
the specified percentage of the aggregate principal amount of the
relevant Notes at the time Outstanding.
"RESPONSIBLE OFFICER", when used with respect to a Note Trustee, means
any officer of that Note Trustee assigned to or working in the
Corporate Trust Department of that Note Trustee or, with respect to a
particular corporate trust matter, any other officer to whom such
matter is referred because of his or her knowledge of and familiarity
with the particular subject and who shall have direct responsibility
for the administration of the relevant Indenture.
"RESTRUCTURING" means the Scheme of Arrangement under Section 425 of
the Companies ▇▇▇ ▇▇▇▇ between the Company and its Scheme Creditors in
the High Court of Justice of England and Wales.
"SCHEME CREDITORS" means the creditors of the Company and Marconi plc
in respect of the Restructuring.
"SECURED CREDITORS" means the Security Trustee, any Receiver or
Delegate, the Depositary, the Paying Agent, the Registrar, the Senior
Note Trustee (for itself and as trustee for the holders of the Senior
Notes), the Junior Note Trustee (for itself and as trustee for the
holders of the Junior Notes), the New Bonding Facility Agent the Escrow
Bank and each of the New Bonding Facility Banks (as defined in the New
Bonding Facility Agreement) and their successors and assigns.
"SECURED OBLIGATIONS" means all present and future indebtedness,
liabilities and obligations (for the avoidance of doubt, including any
liabilities and obligations which have been cash-collateralised by the
Obligors) at any time of any Obligor under the Relevant Documents, both
actual and contingent and whether incurred solely or jointly or in any
other capacity together with any of the following matters relating to
or arising in respect of those liabilities and obligations:
(a) any refinancing, novation, deferral or extension;
(b) any obligation relating to any increase in the amount of such
obligations;
(c) any claim for damages or restitution; and
- 33 -
(d) any claim as a result of any recovery by an Obligor of a
payment or discharge, or non-allowability, on the grounds of
preference,
and any amounts that would be included in any of the above but for any
discharge, non-provability or unenforceability of those amounts in any
insolvency or other proceedings (including interest accruing after the
commencement of any insolvency or other proceedings).
"SECURITY" means a mortgage, charge, pledge, lien or other security
interest securing any obligation of any person or any other agreement
or any guarantee, indemnity or assurance against loss or arrangement
having a similar effect.
"SECURITY DOCUMENTS" means (1) the Initial Security Documents securing
the Secured Obligations, (2) any other pledge agreements, security
agreements, mortgages, deeds of trust and other agreements, instruments
and documents entered into from time to time by the Issuer or any
Subsidiary of the Issuer creating or granting any Guarantee, indemnity
or Security in favour of any of the Secured Creditors or the Security
Trustee, as trustee for the Secured Creditors, as security for any of
the Secured Obligations and (3) any other agreements, instruments and
documents executed and delivered pursuant to any of the foregoing, in
the case of each of clauses (1) through (3), as amended, modified,
restated or supplemented from time to time.
"SECURITY TRUST AND INTERCREDITOR DEED" means the security trust and
intercreditor deed dated on or about the date of this Deed between, the
Company, the Security Trustee, the Guarantors referred to therein, the
Senior Note Trustee, the Junior Note Trustee, the New Bonding Facility
Agent, the New Bonding Facility Banks referred to therein, the
Depositary, the Paying Agent, the Registrar, the Intra-Group Creditors
referred to therein, and the Intra-Group Borrowers referred to therein,
as amended, modified, restated or supplemented from time to time.
"SECURITY TRUSTEE ESCROW FEE LETTER" means the letter dated on or about
the date hereof from the Security Trustee to the Company in respect of
fees payable to the Security Trustee pursuant to Clause 10 (Security
Trustee and Escrow Bank Fees).
"SENIOR NOTE INDENTURE" means the indenture dated as of 19 May, 2003
between the Company as issuer, the initial guarantors named therein and
Law Debenture Trust Company of New York as Senior Note Trustee,
governing the Senior Notes, as originally executed or as it may from
time to time be supplemented or amended by one or more indentures
supplemental thereto entered into pursuant to the applicable provisions
thereof.
"SENIOR NOTE TRUSTEE" means Law Debenture Trust Company of New York or
any successor appointed pursuant to the applicable provisions of the
Senior Note Indenture.
"SENIOR NOTES" means the euro or US dollar denominated Guaranteed
Senior Secured Notes due 2008 issued or to be issued by the Company.
"SERIES" means each of the Convertible Euro Senior Notes, the Euro
Senior Notes and the Dollar Senior Notes.
- 34 -
"SINGAPORE ESOP ESCROW AGREEMENT" means the escrow agreement dated
November 12, 2002 between the Issuer, Marconi plc, Metapath Software
International Limited, HSBC Bank plc, Barclays Bank PLC, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Trustees Limited and ▇▇▇▇▇ & Overy.
"STANDSTILL EVENT" means the occurrence of a Default under the Senior
Notes except as provided in Clause (2) of Section 6.02 of the Senior
Note Indenture.
"STANDSTILL NOTICE" means a notice delivered to the Security Trustee
(with a copy to the Company and the other Debt Representatives) by the
Senior Note Trustee in accordance with the provisions of Security Trust
and Intercreditor Deed, notifying the Security Trustee of a Standstill
Event.
"STANDSTILL PERIOD" means the period from the date of the issuance of a
Standstill Notice by the Senior Note Trustee and ending on the earlier
of:
(a) the expiration of a period of 179 days after the date of the
issuance of such Standstill Notice by the Senior Note Trustee;
(b) the date on which the Senior Note Trustee has confirmed in
writing to the Security Trustee (with a copy to the Company
and the other Secured Creditors) that the Default under the
Senior Notes in respect of which that Standstill Notice was
issued is no longer continuing;
(c) the date on which the Senior Note Trustee has confirmed in
writing to the Security Trustee (with a copy to the Company
and the other Secured Creditors) that the Standstill Notice
has been cancelled by the Senior Note Trustee acting on the
instructions of the Required Holders of at least a majority of
the aggregate principal amount of the then Outstanding Senior
Notes; and
(d) the date on which the Senior Note Trustee has confirmed in
writing to the Security Trustee (with a copy to the Company
and the other Secured Creditors) that the Secured Obligations
under the Senior Notes and the Senior Note Indenture have been
discharged in full and there are no further liabilities under
the Senior Notes or the Senior Note Indenture.
"STERLING EQUIVALENT" means with respect to any monetary amount in a
currency other than British pounds sterling, at any time of
determination thereof, the amount of British pounds sterling obtained
by translating the amount of such foreign currency into British pounds
sterling at the spot rate for the purchase of British pounds sterling
with the applicable currency as published in the Financial Times on the
date that is two London Business Days prior to such determination.
"SUBSIDIARY" means with respect to any specified Person:
(a) any corporation, association or other business entity of which
more than 50% of the total voting power of its Capital Stock
entitled (without regard to the occurrence of any contingency)
to vote in the election of directors, managers or trustees of
the corporation, association or other business entity is at
the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person
(or a combination thereof); and
- 35 -
(b) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of
such Person, or (b) the only general partners of which are
that Person or one or more Subsidiaries of that Person (or any
combination thereof).
Unless otherwise specified herein, or the context otherwise requires, a
reference to a "Subsidiary" herein is to a Subsidiary of the Company.
"TAX" and "TAXES" means any tax, duty, levy, impost, assessment or
other governmental charge of whatever nature (including penalties,
interest and other liabilities related thereto).
"TRANSACTION SECURITY" means any guarantee (including the Guarantees)
guaranteeing the payment of the Secured Obligations and any Security
created or expressed to be created in favour of the Security Trustee or
any Secured Creditor under the Security Documents.
"US GUARANTOR" means each of:
Marconi Communications, Inc. and any other US Parent
(a)
(i) Marconi Networks Worldwide, Inc.
(ii) Marconi Communications Technology, Inc.
(iii) Marconi Communications Federal, Inc.
(iv) Marconi Acquisition Corp.
(v) Marconi Intellectual Property (Ringfence) Inc.
(vi) Marconi Communications Limited (a private limited
company incorporated under the laws of the Republic
of Ireland)
(vii) Marconi Communications Optical Networks Limited
(viii) Marconi Communications, S.A. de C.V.
(ix) Marconi Communications de Mexico, S.A. de C.V.
(x) Marconi Communications Exportel, S.A. de C.V.
(xi) Administrativa Marconi Communications, S.A. de C.V.
(xii) Marconi Communications B.V.; and
(xiii) Marconi Communications GmbH a private company
incorporated under the laws of Switzerland;
(b) any other US Subsidiary that executes (a) a Guarantee of the
Senior Notes pursuant to this Indenture and (b) a Guarantee of
the Junior Notes pursuant to the Junior Note Indenture; and
- 36 -
(c) each of their respective successors and assigns.
"US PARENT" means either (1) Marconi Communications Inc. or (2) a
Wholly-Owned Subsidiary of the Company which: (a) is incorporated after
the Issue Date; (b) becomes a US Guarantor; and (c) acquires the Equity
Interests in Marconi Communications Inc.
"US SUBSIDIARY" means each of US Parent and each of its Subsidiaries,
PROVIDED THAT they constitute a Subsidiary of the Company.
"VAT" means value added tax as provided for in the Value Added Tax ▇▇▇
▇▇▇▇ and any other tax of a similar nature.
"VOTING STOCK" of any Person as of any date means the Capital Stock of
such Person that is at the time entitled to vote in the election of the
Board of Directors of such Person.
"WHOLLY-OWNED SUBSIDIARY" of any specified person means a Subsidiary of
such Person all of the outstanding Capital Stock or other ownership
interests of which (other than directors' qualifying shares) are at the
time owned by such Person or by one or more Wholly-Owned Subsidiary of
such Person.
- 37 -
SCHEDULE 2
ESCROW ACCOUNTS
PART A
MANDATORY REDEMPTION ESCROW ACCOUNTS
ACCOUNT
ACCOUNT NAME/
ACCOUNT NAME BANK CURRENCY SORT CODE NUMBER REFERENCE SWIFT CODE
1. MREA HSBC US Dollar 40-05-15 ▇▇▇▇▇▇▇▇ USD Call Account ▇▇▇▇▇▇▇▇
US Dollar Bank plc
Escrow
Account
2. MREA HSBC Euros 40-05-15 ▇▇▇▇▇▇▇▇ EUR Call Account ▇▇▇▇▇▇▇▇
Euro Bank plc
Escrow
Account
3. MREA HSBC British 40-05-30 73666654 GPB Deposit ▇▇▇▇▇▇▇▇
Sterling Bank plc Sterling Account
Escrow
Account
- 38 -
PART B
EXISTING PERFORMANCE BOND ESCROW ACCOUNTS
ACCOUNT
ACCOUNT NAME/
BANK CURRENCY SORT CODE NUMBER REFERENCE SWIFT CODE
1. GBP HSBC British 40-05-30 73666662 GPB Deposit ▇▇▇▇▇▇▇▇
Deposit Bank plc Sterling Account
Account
2. EUR Call HSBC Euros 40-05-15 ▇▇▇▇▇▇▇▇ EUR Call ▇▇▇▇▇▇▇▇
Account Bank plc Account
3. USD Call HSBC US Dollar 40-05-15 ▇▇▇▇▇▇▇▇ USD Call ▇▇▇▇▇▇▇▇
Account Bank plc Account
- 39 -
SCHEDULE 3
FORM OF RELEASE CERTIFICATE
To: The Law Debenture Trust Corporation plc (the "SECURITY TRUSTEE")
From: Marconi Corporation plc
[Date]
Dear Sirs
ESCROW AGREEMENT DATED [ ] BETWEEN THE SECURITY TRUSTEE, THE NEW BONDING
FACILITY AGENT, THE NEW BONDING FACILITY AGENT, THE ESCROW BANK AND MARCONI
CORPORATION PLC (THE "ESCROW AGREEMENT")
1. We refer to the Escrow Agreement. Terms defined in the Escrow Agreement
shall have the same meaning when used herein. This is a Release
Certificate.
2. We hereby certify as at the date hereof that (a) [insert amount] (the
"COLLATERAL AMOUNT") is required to collateralise [describe performance
bond] (the "PERFORMANCE BOND") in accordance with sub-clause 4.2.1 of
Clause 4.2 (Payments out of the Existing Performance Bond Escrow
Accounts) of the Escrow Agreement, and (b) such amount having been
validly demanded pursuant to an enforceable right for cash collateral
by the [bank(s)/insurance companies) other financial institutions]
listed in the schedule to this Release Certificate as the issuer(s) of
the Performance Bonds.
3. We further certify that the above-mentioned [describe performance bond]
is an Existing Performance Bond.
4. We hereby certify that we determine in good faith that the amount
needed to satisfy our obligations and the obligations of our
Subsidiaries under all Existing Performance Bonds including the amount
referred to in Paragraph 2 of this Release Certificate is [insert
amount].
5. This Release Certificate is governed by English law.
Yours faithfully
_______________________
for and on behalf of
MARCONI CORPORATION PLC
- 40 -
SCHEDULE 4
FORM OF REDEMPTION CERTIFICATE
To: Law Debenture Trust Corporation plc (the "SECURITY TRUSTEE")
Law Debenture Trust Company of New York (the "SENIOR NOTE TRUSTEE")
JPMorgan Chase Bank (the "JUNIOR NOTE TRUSTEE")
The Bank of New York (the "REGISTRAR", the "DEPOSITARY"
and the "PAYING AGENT")
From: Marconi Corporation plc
[Date]
Dear Sirs,
ESCROW AGREEMENT DATED [ ] BETWEEN THE SECURITY TRUSTEE, THE NEW BONDING
FACILITY AGENT, THE ESCROW BANK AND MARCONI CORPORATION PLC (THE "ESCROW
AGREEMENT")
1. We refer to the Escrow Agreement. Terms defined in the Escrow Agreement
shall have the same meaning when used herein. This is a Redemption
Certificate.
2. We hereby notify you that the next Repayment Date in relation to the
[Junior Notes / Senior Notes] shall fall on [ ].
3. We are obliged to redeem the [Junior Notes / Senior Notes] at the
Redemption Price on the Repayment Date stated above.
4. The Redemption Price is $[ ], and we hereby certify the calculations
enclosed with this Redemption Certificate comply with the provisions of
the relevant Indenture stating the method of calculating the Redemption
Price.
5. We hereby request that pursuant to Clause 3.2 (Payments out of the
Mandatory Redemption Escrow Accounts) of the Escrow Agreement the
Security Trustee instructs the Escrow Bank to release sums equal to the
lesser of (i) the balance of the Mandatory Redemption Escrow Accounts
or (ii) the Redemption Price and to transfer such sums to the following
accounts: [ ].
6. This Redemption Certificate is governed by English law.
Yours faithfully
_______________________
for and on behalf of
MARCONI CORPORATION PLC
- 41 -
EXECUTION
THE COMPANY
EXECUTED AS A DEED
by MARCONI CORPORATION PLC
acting by two authorised signatories: M ▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇
Address for notices: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Fax: ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
Attention: Company Secretary, Marconi Corporation plc
THE SECURITY TRUSTEE
EXECUTED AS A DEED
by THE LAW DEBENTURE TRUST CORPORATION P.L.C.
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ Director
Representing Law Debenture Corporate Services Limited
▇ ▇ ▇▇▇▇▇ Secretary
Address for notices: ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
Fax: ▇▇-▇▇-▇▇▇▇▇▇▇▇
Attention: The Manager, Treasury Management Department
THE ESCROW BANK
HSBC BANK PLC
Signed as a Deed ) M ▇▇▇▇▇
by: ▇▇▇▇ ▇▇▇▇▇ )
)
As attorney of ) T ▇▇▇▇▇▇▇▇
HSBC BANK PLC )
in the presence of: )
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Address for notices: City Corporate Banking Centre
▇▇-▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
Fax: 020 7800 5031
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
THE NEW BONDING FACILITY AGENT
HSBC BANK PLC
Signed as a Deed ) I ▇▇▇▇▇▇▇▇
by: ▇▇▇ ▇▇▇▇▇▇▇▇ )
)
As attorney of ) C ▇▇▇▇▇▇▇
HSBC BANK PLC )
in the presence of: )
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Address for notices: ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Fax: 020 7991 4346
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
