EXHIBIT 4.2
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Nortel Networks Corporation
0000 Xxxxx Xxxx, Xxxxx 000
Xxxx. 0000, GMS 036/XX/000
Xxxxxxxx, Xxxxxxx, Xxxxxx X0X 0X0
November 8, 2002
Bookham Technology plc
00 Xxxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx X00, 0XX
Xxxxxx Xxxxxxx
Ladies and Gentlemen:
Reference is made to the Acquisition Agreement, dated as of October 7,
2002, between Nortel Networks Corporation and Bookham Technology plc (the
"ACQUISITION AGREEMENT") and the Exhibits and Schedules thereto. Capitalized
terms used but not defined in this Letter Agreement have the meanings set forth
in the Acquisition Agreement.
The Purchaser and the Seller hereby agree to the following:
(1) The Acquisition Agreement shall be modified and amended as follows.
(A) SECTION 2.05 shall be replaced in its entirety with the following:
SECTION 2.05. CLOSING. Subject to the terms and conditions of this
Agreement, the sale and purchase of the Assets, and the assumption
of the Assumed Liabilities pursuant to Section 2.02, as contemplated
hereby shall take place at a closing (the "CLOSING") to be held at
5:59 p.m., New York City time, on Friday, November 8, 2002, at the
offices of Cleary, Gottlieb, Xxxxx & Xxxxxxxx located at Xxx Xxxxxxx
Xxxxx, Xxx Xxxx, Xxx Xxxx (the "CLOSING DATE").
(B) SECTION 5.06 shall be replaced in its entirety with the following:
SECTION 5.06. INSURANCE. Effective 5:59 p.m. (New York City time) on
the Closing Date, the Business shall cease to be insured by the
insurance policies of the Seller and the Selling Subsidiaries. With
respect to events or circumstances
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covered by insurance coverage written on an "occurrence basis," the
Seller and the Selling Subsidiaries shall have no Liability for
occurrences that take place on and after 5:59 p.m. (New York City
time) on the Closing Date. With respect to insurance coverage
written on a "claims made basis," the Seller and the Selling
Subsidiaries shall have no Liability under such insurance coverage
for claims made after 5:59 p.m. (New York City time) on the Closing
Date.
(C) The words "Within thirty (30) days of the date of this Agreement,"
at the opening of SECTION 5.08(e) shall be replaced in their
entirety with the words "At the Closing,".
(D) SECTION 5.23(a)(i)(D) shall be replaced in its entirety with the
following:
(D) holding up to [**] percent ([**]%) of the equity interests in
any Person which produces or sells Competitive Products.
(E) SECTION 6.01(b)(ii)(B) shall be replaced in its entirety with the
following:
(B) hiring such Employees or Transferring Employees identified
through such employment searches other than the Employees listed on
APPENDIX 6.01(b) hereto who the Seller may not hire, employ or
engage other than through a Permitted Engagement pursuant to
generalized employment searches or otherwise; and
(F) The first sentence of SECTION 6.04(a) shall be replaced in its
entirety with the following:
Prior to the Effective Date, the Seller shall reduce the number of
Employees listed in SECTION 3.12(a) of the SELLER DISCLOSURE
SCHEDULE with a work location in Canada from 358 to 271 and shall
reduce the number of Employees listed in SECTION 3.12(a) of the
SELLER DISCLOSURE SCHEDULE with a work location in the United States
from 16 to 12 (for an aggregate reduction in the number of Employees
listed on SECTION 3.12(a) of the SELLER DISCLOSURE SCHEDULE of 91).
(G) Notwithstanding anything to the contrary in SECTION 6.04(a) or
SECTION 6.04(b): (i) the Interim Employee Information shall be
provided to the Purchaser no later than ten (10) Business Days prior
to the Effective Date; (ii) the Interim Employee Information shall
not include the Vacation Information; and (iii) the Seller shall
provide the Purchaser with the Vacation Information and the Updated
Employee Information on November 6, 2002.
(2) The Purchaser and the Seller agreed to make certain changes to the Ancillary
Agreements and the Real Estate Agreements and Assignments (collectively, the
"ACQUISITION AGREEMENT EXHIBITS") as evidenced by such Acquisition Agreement
Exhibits as executed on the Closing Date.
(3) The SELLER DISCLOSURE SCHEDULE shall be modified and amended as follows:
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(A) SECTION 1.01(E): CERTAIN THIRD PARTY LICENSES. SECTION 1.01(e) of
the SELLER DISCLOSURE SCHEDULE shall be amended by adding to it the
following:
1. Cross License Agreement of Intellectual Property Rights, dated
February 19, 1999, between Nortel PLC and IOC International PLC
(and Integrated Optical Components Limited).
2. Amendment to License Agreement (SC-11 Cement License), dated
October 8, 2002, among Northern Telecom Limited, 561158 Ontario
Limited and Xxxxxx Xxxxxxxxx.
(B) SECTION 1.01(g): Transferred Passive Patents. SECTION 1.01(g) of the
SELLER DISCLOSURE SCHEDULE shall be in the form attached hereto.
(C) SECTION 1.01(h): Transferred Patents. SECTION 1.01(h) of the SELLER
DISCLOSURE SCHEDULE shall be in the form attached hereto.
(D) SECTION 2.01(a)(iii): Owned Equipment. SECTION 2.01(a)(iii) of the
SELLER DISCLOSURE SCHEDULE shall be in the form attached hereto.
(E) SECTION 2.01(a)(vii): Third Party Licenses Exclusive to the
Business. SECTION 2.01(a)(vii) of the SELLER DISCLOSURE SCHEDULE
shall be amended by adding to it the following:
1. All rights associated with the Amendment to License Agreement -
SC-11 Cement, dated October 8, 2002, among Northern Telecom
Limited, 561158 Ontario Limited and Xxxxxx Xxxxxxxxx ("SC-11
AMENDMENT"), other than rights under Paragraph 2 of the SC-11
Amendment, which rights Seller and the Selling Subsidiaries
expressly retain and do not assign to Purchaser.
(F) SECTION 2.01(a)(viii): OTHER SELLER CONTRACTS. SECTION 2.01(a)(viii)
of the SELLER DISCLOSURE SCHEDULE shall be amended as follows:
1. by reclassifying the following agreement from "Customer
Agreement under negotiation" to "Customer Agreement":
(i) Item 33. Framework Purchase Agreement to which Agilent
Technologies Deutschland GmbH is a party.
2. Item 20. Miscellaneous transactions consummated on a customer
purchase order and Seller Order Acknowledgment Form or supply
agreement. ATTACHMENT B shall be in the form attached hereto.
3. Item 43. ATTACHMENT E shall be in the form attached hereto.
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(G) SECTION 2.03(c): PURCHASE PRICE ALLOCATION. SECTION 2.03(c) of the
SELLER DISCLOSURE SCHEDULE shall be in the form attached hereto.
(H) SECTION 3.16(a): TITLE TO INTELLECTUAL PROPERTY. SECTION 3.16(a) of
the SELLER DISCLOSURE SCHEDULE shall be in the form attached hereto.
(4) Other Agreements.
(A) OTHER SECURITY INTERESTS. The Purchaser hereby agrees that, in the
event that it or any of its Subsidiaries sells, transfers or
otherwise disposes to the Purchaser or any of its Subsidiaries of
any of the Collateral (as defined in the U.S. Security Agreement),
the Purchaser shall, or shall cause the applicable Subsidiary of the
Purchaser to, deliver to the Seller appropriate fully executed
filings, recordings, registrations and other documents, in each case
prepared by the Seller, as are reasonably requested by the Seller to
establish a legal and valid security interest in favor of the
holders of the Series B Notes or, if such security interest may not
be established under applicable Law, to execute and deliver to the
Seller such other documents, in each case prepared by the Seller, as
are reasonably requested by the Seller to provide similar
protections through title retention arrangements or otherwise.
(B) POUGHKEEPSIE UTILITIES. The Seller and the Purchaser hereby agree
that, from and after the Closing and until such time as the
Purchaser or the Purchasing Subsidiaries enter into an agreement
with CH Energy Group for the provision of utilities (the
"Utilities") at the premises located at 00 Xxxxxxxx Xxx,
Xxxxxxxxxxxx, XX, the Seller shall pay for such Utilities on behalf
of the Purchaser or the Purchasing Subsidiaries, and the Purchaser
or the Purchasing Subsidiaries shall reimburse the Seller, promptly
upon written request (which request shall include a copy of the
Utility invoice) for the amount of such paid Utility invoice.
(C) REMOVAL OF IDLE ASSETS. Following the Closing Date, the Purchaser
shall, upon reasonable advance notice to the Purchaser, grant the
Seller and its representatives reasonable access to the facilities
and properties of the Purchaser and its Subsidiaries for the purpose
of removing or causing to be removed those items of personal
property of the Seller listed on APPENDIX 4(C) hereto that are
located in or on any such facility or property (the "IDLE ASSETS").
The Seller shall be responsible for the costs of removal of the Idle
Assets and shall reimburse the Purchaser for any costs or
Liabilities incurred as a result thereof, including any damage or
destruction of property of the Purchaser or any of its Subsidiaries
resulting therefrom. Such removal shall take place only upon
reasonable advance notice to, and with the consent of, the Purchaser
during normal business hours. Seller shall remove or cause the
removal of any such property within 90 days following the Closing
Date.
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(D) ZURICH LEASE ASSIGNMENT. The Seller and the Purchaser hereby agree
that, from and after the Closing and until such time as Binz (as
such term is defined in the Zurich Lease Assignment) executes the
Zurich Lease Assignment, the Seller and the Purchaser shall, in
accordance with Section 5.11 of the Acquisition Agreement, cooperate
to provide that the Purchaser and the Purchasing Subsidiaries shall
receive all benefits and be responsible for all Liabilities
associated with the Zurich Lease Assignment, and the Seller and the
Purchaser shall treat the Zurich Lease Assignment as though it was
validly executed by Xxxx.
(E) LICENSE TO OCCUPY THE MONTICELLO PREMISES. The Seller and the
Purchaser hereby agree that, from and after the Closing and until
such time the Purchaser or any of its Subsidiaries shall have
entered into a lease agreement in respect of the premises located in
Monticello, MN (the "MONTICELLO PREMISES") occupied as of the date
hereof by the Seller, but in no event after November 22, 2002, in
accordance with SECTION 5.11 of the Acquisition Agreement, the
Purchaser and its Subsidiaries shall be granted a license to occupy
the Monticello Premises on the same terms as those set forth in the
Canadian License Agreement. If, by November 22, 2002, the Purchaser
or any of its Subsidiaries shall not have entered into a lease
agreement in respect of the Monticello Premises, the Purchaser and
its Subsidiaries shall be obligated to vacate the Monticello
Premises as of such date.
(F) WAIVER OF CONDITION. The Seller hereby waives the condition to its
obligation to consummate the transactions contemplated by the
Acquisition Agreement contained in SECTION 8.01(f) of the
Acquisition Agreement.
(G) [**]. The Seller and the Purchaser hereby agree to the following:
1. The Seller shall use its commercially reasonable efforts to
either (a) negotiate a license agreement [**] on behalf of the
Purchaser, or (b) amend the [**] Agreement [**] between the
Seller and [**] as part of the [**], in either case to enable
the Purchaser to manufacture and sell to the Seller and to [**]
as manufactured and sold by the Seller on or prior to the
Closing Date (the "APPLICABLE PRODUCTS") to the same extent
following the Closing Date as such activities were conducted by
the Seller before the Closing Date and [**] the Seller[**]
before the Closing Date; provided that, in the event that the
Seller [**]in negotiating such a license or obtaining such an
amendment [**], the provisions of paragraph 2 below shall
apply.
2. [**] the Purchaser or the Seller [**] to the Seller [**], the
Seller and the Purchaser shall [**] in the manner described:
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(i) [**] (other than pursuant to clause (ii) below) [**] the
Purchaser [**] after the Closing Date (excluding, however,
[**](as such term is defined [**]; and
[**] the Seller or the Purchaser [**] of the Closing Date in
connection with [**]The [**] Purchaser, and [**] the Seller and
[**] the Purchaser. Notwithstanding the foregoing, the [**]
with respect to such [**] the Seller hereunder shall be subject
to the limitation set forth in Section 10.03(b)(i)[**] set
forth therein) and shall not be subject to the limitations set
forth in Section 10.03(b)(ii) [**] in respect of Series B Notes
to the extent any Series B Notes are then outstanding or, if no
Series B Notes [**] in respect of any Series A Notes then
outstanding. Neither the Seller nor the Purchaser shall [**] in
connection with any [**], prior to the [**]. In the event of
[**] in connection with the [**] will be [**] and the [**]
shall be[**] and the [**]. In the event that both the Seller
and the Purchaser are [**] in connection with the [**]. The
Purchaser and the Seller will [**] from time to time during
the[**]. Other than as set forth above, the Seller shall [**]
in connection with the [**].
3. [**] which is being entered into as of the date of this Letter
Agreement, the Seller and the Purchaser further agree that the
[**].
(H) [**]. For the avoidance of doubt, any [**] in connection with the
[**] of the applicable portions [**] as it relates to [**].
(I) STOCKROOM SERVICES AGREEMENT. The Purchaser and the Seller agree to
enter into a stockroom services agreement on the terms set forth in
Appendix 4(J) hereto.
(J) ADDITIONAL PAYMENT. The Purchaser represents that it has effected a
wire transfer of funds in the amount of $[**] as of the Closing
Date. If the cash payment is not received in the account of the
Seller on the Closing Date, the Purchaser shall pay the Seller an
additional $[**] per day, not including the date of receipt, until
the cash payment is so received and, in all events, shall ensure
that such funds are delivered.
(Remainder of page intentionally left blank)
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Please evidence your agreement with the foregoing by executing this
Letter Agreement as indicated below. This Letter Agreement may be executed in
one or more counterparts, each of which shall be an original but all of which
shall constitute one and the same agreement.
Very truly yours,
NORTEL NETWORKS CORPORATION
By:
-----------------------------------
Name:
Title:
BOOKHAM TECHNOLOGY PLC
BY: /s/XXXXXX X.X. XXXXX
-----------------------------------
NAME: XXXXXX X.X. XXXXX
TITLE: COMPANY SECRETARY
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