EXECUTION COPY
Exhibit 99.1
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LETTER OF CREDIT ISSUANCE AND REIMBURSEMENT AGREEMENT
Dated as of May 28, 2003
among
LUCENT TECHNOLOGIES INC.,
as Borrower
THE SEVERAL BANKS,
from Time to Time Parties hereto
and
JPMORGAN CHASE BANK, as Administrative Agent
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TABLE OF CONTENTS
PAGE
ARTICLE I Definitions.............................................................................................1
SECTION 1.01. Defined Terms............................................................................1
SECTION 1.02. Terms Generally.........................................................................13
SECTION 1.03. Accounting Terms; GAAP..................................................................13
SECTION 1.04. Currency................................................................................13
ARTICLE II Letters of Credit.....................................................................................14
SECTION 2.01. L/C Commitment..........................................................................14
SECTION 2.02. Procedure for Issuance and Renewal of Letter of Credit..................................14
SECTION 2.03. Participations..........................................................................15
SECTION 2.04. Reimbursement...........................................................................16
SECTION 2.05. Obligations Absolute....................................................................17
SECTION 2.06. Disbursement Procedures.................................................................17
SECTION 2.07. Applications............................................................................17
SECTION 2.08. Fees and Other Charges..................................................................17
SECTION 2.09. Termination, Reduction and Increase of Commitments......................................18
SECTION 2.10. Reserve Requirements, Change in Circumstances...........................................19
SECTION 2.11. Pro Rata Treatment......................................................................20
SECTION 2.12. Sharing of Setoff.......................................................................20
SECTION 2.13. Payments................................................................................21
SECTION 2.14. Taxes 21
SECTION 2.15. Mandatory Assignment; Commitment Termination............................................23
SECTION 2.16. Cash Collateralization..................................................................23
ARTICLE III Representations and Warranties.......................................................................25
SECTION 3.01. Organization; Powers....................................................................25
SECTION 3.02. Authorization...........................................................................25
SECTION 3.03. Enforceability..........................................................................25
SECTION 3.04. Governmental Approvals..................................................................25
SECTION 3.05. Financial Statements....................................................................25
SECTION 3.06. Properties..............................................................................26
SECTION 3.07. Litigation and Environmental Matters....................................................26
SECTION 3.08. Compliance with Laws and Agreements.....................................................26
SECTION 3.09. Federal Reserve Regulations.............................................................26
SECTION 3.10. Investment Company Act; Public Utility Holding Company Act..............................26
SECTION 3.11. Taxes 26
SECTION 3.12. ERISA 27
SECTION 3.13. Labor Matters...........................................................................27
SECTION 3.14. Subsidiaries............................................................................27
SECTION 3.15. Use of Letters of Credit................................................................27
SECTION 3.16. No Material Misstatements...............................................................27
SECTION 3.17. Security Documents......................................................................27
ARTICLE IV Conditions............................................................................................28
SECTION 4.01. Effective Date..........................................................................28
SECTION 4.02. Each L/C Event..........................................................................30
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PAGE
ARTICLE V Affirmative Covenants..................................................................................30
SECTION 5.01. Existence...............................................................................30
SECTION 5.02. Financial Statements, Reports, etc......................................................30
SECTION 5.03. Maintaining Records.....................................................................32
SECTION 5.04. Notices of Material Events..............................................................32
SECTION 5.05. Existence; Conduct of Business..........................................................32
SECTION 5.06. Payment of Obligations..................................................................32
SECTION 5.07. Maintenance of Properties; Insurance....................................................32
SECTION 5.08. Inspection Rights.......................................................................33
SECTION 5.09. Compliance..............................................................................33
SECTION 5.10. Use of Letters of Credit................................................................33
SECTION 5.11. Additional Subsidiary Guarantors and Collateral.........................................33
SECTION 5.12. Post-Closing Collateral Matters.........................................................34
ARTICLE VI Negative Covenants....................................................................................35
SECTION 6.01. Indebtedness............................................................................35
SECTION 6.02. Liens 35
SECTION 6.03. Fundamental Changes.....................................................................36
SECTION 6.04. Investments, Loans, Advances, Guarantees and Acquisitions...............................36
SECTION 6.05. Hedging Agreements......................................................................37
SECTION 6.06. Restricted Payments.....................................................................37
SECTION 6.07. Synthetic Purchase Agreements...........................................................38
SECTION 6.08. Limitation on Payments of Certain Debt Instruments......................................38
ARTICLE VII Financial Covenants..................................................................................38
SECTION 7.01. Minimum Cash............................................................................38
SECTION 7.02. Minimum Operating Income................................................................39
SECTION 7.03. Cash Collateral Event...................................................................39
ARTICLE VIII Events of Default...................................................................................39
ARTICLE IX The Administrative Agent..............................................................................41
ARTICLE X Miscellaneous..........................................................................................43
SECTION 10.01. Notices................................................................................43
SECTION 10.02. Survival of Agreement..................................................................43
SECTION 10.03. Binding Effect.........................................................................44
SECTION 10.04. Successors and Assigns.................................................................44
SECTION 10.05. Expenses; Indemnity....................................................................46
SECTION 10.06. Applicable Law.........................................................................46
SECTION 10.07. Waivers; Amendment.....................................................................47
SECTION 10.08. Entire Agreement.......................................................................47
SECTION 10.09. Severability...........................................................................47
SECTION 10.10. Right of Setoff........................................................................48
SECTION 10.11. Counterparts...........................................................................48
SECTION 10.12. Headings...............................................................................48
SECTION 10.13. Release of Guarantees and Liens........................................................48
SECTION 10.14. Confidentiality........................................................................48
SECTION 10.15. Submission To Jurisdiction; Waivers....................................................49
SECTION 10.16. WAIVER OF JURY TRIAL...................................................................49
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EXHIBITS
Exhibit A Form of Assignment and Acceptance
Exhibit B Form of Collateral Sharing Agreement
Exhibit C Form of Guarantee and Collateral Agreement
Exhibit D Form of Mortgage
Exhibit E Form of Closing Certificate
Exhibit F-1 Form of Opinion of Sidley Xxxxxx Xxxxx & Xxxx LLP
Exhibit F-2 Form of Opinion of In-House Counsel to the Borrower
Exhibit G Form of Monthly Report
SCHEDULES
Schedule 1.01A Bank Commitments
Schedule 1.01B Mortgaged Properties
Schedule 1.01C Excluded Subsidiaries
Schedule 1.01D Issuing Banks
Schedule 1.01E Net Pension and Post-Retirement Charges
Schedule 3.14 Material Subsidiaries
Schedule 3.17(b) Mortgage Filing Offices
Schedule 5.12 Accounts
Schedule 6.02 Existing Liens
Schedule 6.08(a) Certain Indebtedness
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LETTER OF CREDIT ISSUANCE AND REIMBURSEMENT AGREEMENT, dated as of May
28, 2003, among LUCENT TECHNOLOGIES INC., a Delaware corporation ("Lucent" or
the "Borrower"), the several banks and other financial institutions or entities
from time to time parties to this Agreement (the "Banks"), and JPMORGAN CHASE
BANK, as Administrative Agent for the Banks.
W I T N E S S E T H:
WHEREAS, the Borrower has requested that the Banks make available to the
Borrower a letter of credit facility on the terms set forth herein; and
WHEREAS, each Issuing Bank and the Banks are willing to make such letter
of credit facility available upon and subject to the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the agreements
hereinafter set forth, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms. As used in this Agreement the following terms
shall have the meanings specified below:
"Administrative Agent" shall mean JPMorgan Chase Bank, together with its
affiliates, as an arranger of the Commitments and as the administrative agent
for the Banks under this Agreement and the other Credit Documents, together with
any of its successors.
"Administrative Questionnaire" shall mean an administrative questionnaire
in a form approved by the Administrative Agent.
"Affiliate" shall mean, when used with respect to a specified Person,
another Person that directly or indirectly Controls or is Controlled by or is
under common Control with the Person specified.
"Agreement" shall mean this Letter of Credit Issuance and Reimbursement
Agreement, as amended, supplemented or otherwise modified from time to time.
"Alternate Base Rate" shall mean, for any day, a rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to the greater of (a) the
Prime Rate in effect on such day and (b) the Federal Funds Effective Rate in
effect on such day plus 1/2 of 1%. For purposes hereof, "Prime Rate" shall mean
the rate of interest per annum publicly announced from time to time by the
Administrative Agent as its prime rate in effect at its principal office in New
York City, each change in the Prime Rate shall be effective on the date such
change is publicly announced as effective. For purposes hereof, "Federal Funds
Effective Rate" shall mean, for any day, the weighted average of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as released on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so released
for any day which is a Business Day, the arithmetic average (rounded upwards to
the next 1/100th of 1%), as determined by the Administrative Agent, of the
quotations for the day of such transactions received by the Administrative Agent
from three Federal funds brokers of recognized standing selected by it. If for
any reason the Administrative Agent shall have determined (which determination
shall be conclusive absent manifest error) that it is unable to ascertain the
Federal Funds Effective Rate for any reason, including the inability or failure
of the Administrative Agent to
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obtain sufficient quotations in accordance with the terms thereof, the Alternate
Base Rate shall be determined without regard to clause (b) of the first sentence
of this definition until the circumstances giving rise to such inability no
longer exist. Any change in the Alternate Base Rate due to a change in the Prime
Rate or the Federal Funds Effective Rate shall be effective on the effective
date of such change in the Prime Rate or the Federal Funds Effective Rate,
respectively.
"Alternate Currency" shall mean Australian Dollar, Swiss Franc, EMU Euro,
British Pound Sterling, Hong Kong Dollar, Indonesian Rupia, Israeli Shekel,
Indian Ruppee, Japanese Yen, Malaysian Ringgit, Norwegian Krone, New Zealand
Dollar, Saudi Riyal, Swedish Krona, Singapore Dollar, Thai Baht and New Taiwan
Dollar (in each case, unless such currency ceases to be readily available and
freely tradeable) and other readily available and freely tradeable currencies
that are approved by the Administrative Agent and the applicable Issuing Bank.
"Application": an application, in such form as an Issuing Bank may specify
from time to time, requesting such Issuing Bank to open a Letter of Credit.
"Assignment and Acceptance" shall mean an assignment and acceptance
entered into by a Bank and an assignee, and accepted by the Administrative
Agent, in the form of Exhibit A.
"Availability Period" shall mean the period from and including the
Effective Date to the Termination Date.
"Available Commitment" shall mean, for each Bank on any date of
determination, an amount equal to the excess, if any, of (a) the amount of such
Bank's Commitment over (b) such Bank's L/C Exposure.
"Board" shall mean the Board of Governors of the Federal Reserve System of
the United States.
"Borrower Debt Rating" shall mean any rating by a Rating Agency with
respect to the senior unsecured non-credit enhanced long-term debt of the
Borrower.
"Business Day" shall mean any day (other than a day which is a Saturday,
Sunday or legal holiday in the State of New York) on which banks are open for
business in New York City.
"Capital Lease Obligations" of any Person shall mean the obligations of
such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"Capital Stock" shall mean any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants, rights or options to purchase any of the foregoing.
"Cash Collateral Account" shall have the meaning assigned to such term in
Section 2.16(a).
"Cash Collateral Agreement" shall have the meaning assigned to such term
in Section 4.01(g).
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"Cash Collateral Event" shall have the meaning assigned to such term in
Section 7.03.
"Cash Collateralized Debt" shall have the meaning assigned to such term in
Section 6.01(a).
"Certificate of Designations" shall mean the Certificate of Designations,
filed with the Secretary of State of the State of Delaware, of 8% Redeemable
Convertible Preferred Stock Setting Forth the Powers, Preferences and Rights,
and the Qualifications, Limitations and Restrictions Thereof, of such Preferred
Stock of Lucent Technologies Inc.
"Change in Control" shall mean (a) the acquisition of ownership, directly
or indirectly, beneficially or of record, by any "person" or "group" (within the
meaning of the Exchange Act and the rules of the SEC thereunder as in effect on
the Effective Date), of shares representing more than 30% of the aggregate
ordinary voting power represented by the issued and outstanding capital stock of
the Borrower or (b) occupation of a majority of the seats (other than vacant
seats) on the board of directors of the Borrower by Persons who were neither (i)
nominated by the board of directors of the Borrower nor (ii) appointed by
directors so nominated.
"CMO Transaction" shall mean any financing arrangement involving (i) the
incurrence of Indebtedness supported by Liens (or Indebtedness secured by Liens)
on real estate owned by the Borrower or any Subsidiary, or on the Capital Stock
of any Subsidiary formed exclusively to hold any direct or indirect interest in
such real estate, and on related assets (including reserve accounts) or (ii) the
issuance of Capital Stock of a Real Estate Subsidiary.
"Code" shall mean the Internal Revenue Code of 1986, as the same may be
amended from time to time.
"Collateral" shall mean all property of the Credit Parties, now owned or
hereafter acquired, upon which a Lien is purported to be created by any Security
Document.
"Collateral Agent" shall mean JPMorgan Chase Bank, in its capacity as
Collateral Agent under the Security Documents and the Collateral Sharing
Agreement.
"Collateral Sharing Agreement" shall mean the Amended and Restated
Collateral Sharing Agreement to be executed and delivered by the Collateral
Agent and the Borrower, substantially in the form of Exhibit B.
"Commitment" shall mean, with respect to each Bank, the commitment of such
Bank hereunder to participate in the Letters of Credit issued hereunder,
representing the maximum aggregate amount of such Bank's L/C Exposure at any one
time outstanding, as the amount of such commitment may be increased or decreased
pursuant to the terms of this Agreement. The initial amount of each Bank's
Commitment is set forth on Schedule 1.01A.
"Commitment Fee" shall have the meaning set forth in Section 2.08(b).
"Commitment Percentage" shall mean, with respect to any Bank at any time,
an amount (expressed as a percentage) equal to the quotient obtained by dividing
such Bank's Commitment by the Total Commitment.
"Consolidated Operating Income" shall mean, for any period, consolidated
operating income for such period, excluding, without duplication, any of the
following (if applicable): (a) other
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income or expenses included in the determination thereof in a consolidated
statement of operations for such period and, without duplication, any of the
following, whether or not included in such determination: (b) depreciation and
amortization, (c) asset impairment charges, (d) restructuring charges or
reversals, (e) net pension and post-retirement charges or credits, to the extent
the net effect of such charges and credits differ from the amounts reflected in
the sensitivity business model as set forth in Schedule 1.01E, (f) any
extraordinary, unusual, non-recurring or non-cash charges or credits, (g)
provisions for bad debt and customer financing and (h) any charges related to
the obligations described in clause (d) of the defined term "External Sharing
Debt", all as determined on a consolidated basis in accordance with GAAP.
"Contractual Obligation" shall mean, as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Control" shall mean the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of a Person,
whether through the ownership of voting shares, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.
"Control Agreement" shall have the meaning assigned to such term in
Section 5.12.
"Convertible Subordinated Debentures" shall mean (a) with respect to the
Trust Preferred Securities, the 7.75% convertible subordinated debentures due
2017 of the Borrower issued pursuant to the Indenture, dated as of March 19,
2002, between the Borrower and The Bank of New York, as trustee, and (b) with
respect to the Redeemable Convertible Preferred Stock, the "Convertible
Subordinated Debentures" (as defined in the Certificate of Designations).
"Credit Documents" shall mean this Agreement, the ESD Agreement, the Cash
Collateral Agreements (as defined herein and in the ESD Agreement), the
Applications, the Security Documents and the Collateral Sharing Agreement.
"Credit Parties" shall mean the Borrower and each Subsidiary Guarantor.
"Default" shall mean any event or condition which upon notice, lapse of
time or both would constitute an Event of Default.
"Disposition" shall mean, with respect to any property, any sale, lease,
sale and leaseback, assignment, conveyance, transfer or other disposition
thereof. The terms "Dispose", and "Disposed of" shall have correlative meanings.
"Dollars" or "$" shall mean lawful money of the United States of America.
"Domestic Subsidiary" shall mean any Subsidiary of the Borrower organized
under the laws of any jurisdiction within the United States of America.
"Effective Date" shall mean the date as of which all of the conditions
precedent set forth in Section 4.01 have been satisfied (which date shall not be
later than June 30, 2003).
"Environmental Laws" shall mean all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Material or to health and safety matters.
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"Environmental Liability" shall mean any liability, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of the Borrower or any Subsidiary
directly or indirectly resulting from or based, upon (a) violation of any
Environmental Law, (b) the generation, use, handling, transportation, storage,
treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous
Materials, (d) the release or threatened release of any Hazardous Materials into
the environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate" shall mean any trade or business (whether or not
incorporated) that, together with the Borrower, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
"ERISA Event" shall mean (a) any "reportable event", as defined in Section
4043 of ERISA or the regulations issued thereunder with respect to a Plan (other
than an event for which the 30-day notice period is waived); (b) the existence
with respect to any Plan of an "accumulated funding deficiency" (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by the Borrower or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the
Borrower or any of its ERISA Affiliates of any liability with respect to the
withdrawal or partial withdrawal from any Plan or Multiemployer Plan (unless
such liability is promptly satisfied or otherwise discharged); or (g) the
receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by
any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability (unless such liability is
promptly satisfied or otherwise discharged) or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.
"ESD Agreement" shall mean the External Sharing Debt Agreement, dated as
of the date hereof, among the Borrower, the banks from time to time parties
thereto and JPMorgan Chase Bank, as administrative agent.
"Event of Default" shall have the meaning assigned to such term in Article
VIII.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"Excluded Foreign Collateral" shall mean (a) any accounts receivable and
other contract rights to payment payable by non-U.S. Persons organized in China,
India or Saudi Arabia to the Borrower or any Domestic Subsidiary and (b)
inventory of the Borrower or any Domestic Subsidiary physically located outside
of the United States, in each case in respect of which the Administrative Agent
and the Collateral Agent have released the Lien granted pursuant to the Security
Documents in accordance with Section 10.13.
"Excluded Subsidiary" shall mean any Non-Wholly Owned Subsidiary that is
described on Schedule 1.01C.
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"External Sharing Debt" shall mean obligations of the Borrower or any of
its Subsidiaries under or in respect of (including pursuant to Guarantees or
other credit support): (a) letters of credit and similar obligations opened for
the account of the Borrower or a Subsidiary thereof, (b) loans, advances and
other Indebtedness for borrowed money to the Borrower or a Subsidiary thereof,
(c) foreign exchange and derivative transactions ("Derivative Transactions") or
Hedging Agreements with the Borrower or a Subsidiary as the counterparty, (d)
the Participation Agreement, dated as of September 27, 2000, among the Borrower,
as sponsor and servicer, Insured Special Purpose Trust, KED Funding LLC, Insured
Asset Funding LLC, the investors party thereto, the APA purchasers party
thereto, Citicorp North America, Inc., as program agent, Citibank, N.A., as
agent and collateral agent, and Global Securitization Services, LLC, as
administrator, pursuant to which, the Borrower established a program whereby it
would sell vendor financings to an "Insured Special Purpose Trust" (the
"Participation Agreement"), and such program and the other documents entered
into in connection therewith (including any amendment or modification to such
documents or to any documents related thereto entered into after the date
hereof), (e) Vendor Financing Exposures, (f) existing cash management and other
operating arrangements and any other cash management and other operating
arrangements entered into in the ordinary course of business and (g) real estate
lease, fleet lease, purchase and credit card programs and such other
Indebtedness as may be agreed to by the Administrative Agent and the Borrower,
such Agreement not to be unreasonably withheld. The amount of any Derivative
Transaction or the obligations under any Hedging Agreement will be determined at
all times to be equal to the then marked-to-market exposure of the relevant bank
(determined on a net basis if applicable under the relevant agreement between
the Borrower and the relevant bank), provided that such amount will not be less
than $0.
"Financial Officer" of any corporation shall mean the Chief Financial
Officer, principal accounting officer, Treasurer or Assistant Treasurer of such
corporation.
"Foreign Subsidiary" shall mean any Subsidiary of the Borrower that is not
a Domestic Subsidiary.
"GAAP" shall mean generally accepted accounting principles in the United
States of America, applied on a consistent basis.
"Governmental Authority" shall mean the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"Guarantee" of or by any Person (the "guarantor") shall mean any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the "primary obligor") in any manner, whether directly or
indirectly, and including any obligation of the guarantor, direct or indirect,
(a) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation or to purchase (or to advance or
supply funds for the purchase of) any security for the payment thereof, (b) to
purchase or lease property, securities or services for the purpose of assuring
the owner of such Indebtedness or other obligation of the payment thereof, (c)
to maintain working capital, equity capital or any other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation or (d) as an account party
in respect of any letter of credit or letter of guaranty issued to support such
Indebtedness or obligation; provided, that the term Guarantee shall not include
endorsements for collection or deposit in the ordinary course of business. The
amount of any Guarantee made by any guarantor shall be deemed to be the lower of
(a) an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Guarantee is made and (b) the maximum amount
for which such guaranteeing person may be liable pursuant to the
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terms of the instrument embodying such Guarantee, unless such primary obligation
and the maximum amount for which such guarantor may be liable are not stated or
determinable, in which case the amount of such Guarantee shall be such
guarantor's maximum reasonably anticipated liability in respect thereof as
determined by the Borrower in good faith.
"Guarantee and Collateral Agreement" shall mean the Amended and Restated
Guarantee and Collateral Agreement to be executed and delivered by the Borrower
and each Subsidiary Guarantor, substantially in the form of Exhibit C.
"Hazardous Materials" shall mean all explosive or radioactive substances
or wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Hedging Agreement" shall mean (a) any interest rate protection agreement,
foreign currency exchange agreement, commodity price protection agreement or
other interest or currency exchange rate or commodity price hedging arrangement
and (b) any hedging agreement in respect of the Borrower's common stock entered
into in order to hedge the Borrower's exposure under its stock option plans or
other benefit plans for employees, directors or consultants of the Borrower and
its Subsidiaries.
"Indebtedness" of any Person shall mean, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid (excluding current accounts
payable incurred in the ordinary course of business), (d) all obligations of
such Person under conditional sale or other title retention agreements relating
to property acquired by such Person, (e) all obligations of such Person in
respect of the deferred purchase price of property or services (excluding
current accounts payable incurred in the ordinary course of business), (f) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such Person, whether or not the Indebtedness
secured thereby has been assumed, (g) all Guarantees by such Person of
Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i)
all obligations, contingent or otherwise, of such Person as an account party in
respect of letters of credit, performance bonds and letters of guaranty, (j) all
obligations, contingent or otherwise, of such Person in respect of bankers'
acceptances and (k) to the extent not otherwise included, indebtedness or
similar obligations (including, if applicable, net investment amounts) pursuant
to any receivables securitization. The Indebtedness of any Person shall include
the Indebtedness of any other entity (including any partnership in which such
Person is a general partner) to the extent such Person is liable therefor as a
result of such Person's ownership interest in or other relationship with such
entity, except to the extent the terms of such Indebtedness provide that such
Person is not liable therefor.
"Indemnitee" shall have the meaning assigned to such term in Section
10.05.
"Insurance Subsidiary" shall mean First Beacon Insurance Company, a
captive insurance company organized under the laws of the State of Vermont.
"Investments" shall have the meaning set forth in Section 6.04.
"Issuing Bank" shall mean each of the Banks or any Affiliate thereof
listed on Schedule 1.01D, each in its capacity as the issuer of such Letters of
Credit it shall have issued hereunder.
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"L/C Disbursement" shall mean a payment made by an Issuing Bank pursuant
to a Letter of Credit.
"L/C Event" shall have the meaning assigned to such term in Section 4.02.
"L/C Exposure" shall mean, with respect to any Bank at any time, an amount
equal to such Bank's Commitment Percentage of the Total L/C Exposure at such
time.
"L/C Fee Rate" shall mean 500 basis points; provided that upon the full
cash collateralization of all outstanding Letters of Credit, the L/C Fee Rate
shall mean 50 basis points.
"L/C Outstanding" shall mean, for any Letter of Credit on any date of
determination, the amount available to be drawn under such Letter of Credit at
any time on or after such date, the determination of such amount to assume the
compliance with and satisfaction of all conditions for drawing enumerated
therein.
"Letters of Credit" shall have the meaning assigned to such term in
Section 2.01(a).
"Lien" shall mean, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, hypothecation, encumbrance, charge or security interest in,
on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
"Margin Regulations" shall mean Regulations T, U and X of the Board as
from time to time in effect, and all official rulings and interpretations
thereunder or thereof.
"Margin Stock" shall have the meaning given such term under Regulation U
of the Board.
"Material Adverse Effect" shall mean a materially adverse effect on the
business, assets, operations or condition, financial or otherwise, of the
Borrower and its Subsidiaries taken as a whole. It is understood that a change
in the Borrower Debt Ratings or other credit ratings by any rating agency shall
not, in and of itself, constitute a Material Adverse Effect.
"Material Domestic Subsidiary" shall mean any Domestic Subsidiary that is
a Material Subsidiary.
"Material Foreign Subsidiary" shall mean any Foreign Subsidiary that is a
Material Subsidiary.
"Material Indebtedness" shall mean Indebtedness (other than the Letters of
Credit), or obligations in respect of one or more Hedging Agreements or
Derivative Transactions, of any one or more of the Borrower and its Subsidiaries
in an aggregate principal amount exceeding $100,000,000. For purposes of
determining Material Indebtedness, the "principal amount" of the obligations of
the Borrower or any Subsidiary in respect of any Hedging Agreement or Derivative
Transaction at any time shall be the maximum aggregate amount (giving effect to
any netting agreements) that the Borrower or such Subsidiary would be required
to pay if such Hedging Agreement or Derivative Transaction were terminated at
such time.
9
"Material Subsidiary" shall mean any Subsidiary of the Borrower, the
assets or revenues of which are, at the time of determination, equal to or
greater than one percent of the consolidated assets or consolidated revenues,
respectively, of the Borrower and its Subsidiaries at such time (determined, in
the case of revenues, in respect of the most recent period of four consecutive
fiscal quarters of the Borrower for which the relevant financial information is
available). Such determinations shall, where applicable, be made excluding
intercompany receivables and revenues that would be eliminated upon
consolidation in accordance with GAAP.
"Moody's" shall mean Xxxxx'x Investors Service, Inc.
"Mortgaged Properties" shall mean the real properties listed on Schedule
1.01B, as to which the Collateral Agent for the benefit of the Secured Parties
shall be granted a Lien pursuant to the Mortgages.
"Mortgages" shall mean each of the mortgages and deeds of trust made by
any Credit Party in favor of, or for the benefit of, the Collateral Agent for
the benefit of the Secured Parties, substantially in the form of Exhibit D (with
such changes thereto as shall be advisable under the law of the jurisdiction in
which such mortgage or deed of trust is to be recorded).
"Multiemployer Plan" shall mean a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
"Non-Wholly Owned Subsidiary" shall mean any Subsidiary of the Borrower
that is not a Wholly Owned Subsidiary.
"Obligations" shall mean the collective reference to all obligations and
liabilities of the Borrower to the Administrative Agent, the Issuing Banks and
the Banks (including the reimbursement obligations payable hereunder, and all
other obligations and liabilities of the Borrower in respect of the Letters of
Credit or any of them and interest thereon as provided for herein, any interest
accruing after the maturity of such obligations and liabilities and interest
accruing after the filing of any petition in bankruptcy, or the commencement of
any insolvency, reorganization or like proceeding, relating to the Borrower,
whether or not a claim for post-filing or post-petition interest is allowed in
such proceeding), whether direct or indirect, absolute or contingent, due or to
become due, or now existing or hereafter incurred, which may arise under, out
of, or in connection with, this Agreement, any Letter of Credit, any other
Credit Document or any other document made, delivered or given in connection
herewith or therewith, whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses (including all fees, charges and
disbursements of counsel to the Administrative Agent, the Issuing Banks or the
Banks that are required to be paid by the Borrower pursuant hereto) or
otherwise.
"Participation Agreement" shall have the meaning assigned to such term in
the definition of "External Sharing Debt" in this Section 1.01.
"Permitted Encumbrances" shall mean: (a) Liens imposed by law for taxes
that are not yet due or are being contested in compliance with Section 5.06, (b)
carriers', warehousemen's, mechanics', materialmen's, repairmen's and other like
Liens imposed by law, arising in the ordinary course of business and securing
obligations that are not overdue by more than 30 days or are being contested in
compliance with Section 5.06, (c) pledges and deposits made in the ordinary
course of business in compliance with workers' compensation, unemployment
insurance, officers' and directors' insurance and other social security laws or
regulations, (d) deposits of cash or Permitted Investments to secure the
performance of bids, trade contracts, leases, statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like nature, in each
case in the ordinary course of business,
10
(e) easements, zoning restrictions, rights-of-way and similar encumbrances on
real property imposed by law or arising in the ordinary course of business that
do not secure any monetary obligations and do not materially detract from the
value of the affected property or interfere with the ordinary conduct of
business of the Borrower or any Subsidiary and (f) unexercised bankers' Liens;
provided that the term "Permitted Encumbrances" shall not include any Lien
securing Indebtedness.
"Permitted Investments" shall mean: (a) direct obligations of, or
obligations the principal of and interest on which are unconditionally
guaranteed by, the United States of America (or by any agency thereof to the
extent such obligations are backed by the full faith and credit of the United
States of America), in each case maturing within one year from the date of
acquisition thereof, (b) investments in commercial paper maturing within 270
days from the date of acquisition thereof and having, at such date of
acquisition, the highest credit rating obtainable from S&P or from Moody's, (c)
investments in certificates of deposit, banker's acceptances and time deposits
maturing within 180 days from the date of acquisition thereof issued or
guaranteed by or placed with, and money market deposit accounts issued or
offered by, any domestic office of any commercial bank organized under the laws
of the United States of America or any State thereof which has a combined
capital and surplus and undivided profits of not less than $500,000,000, (d)
fully collateralized repurchase agreements with a term of not more than 30 days
for securities described in clause (a) above and entered into with a financial
institution satisfying the criteria described in clause (c) above, (e) in the
case of any Foreign Subsidiary, (i) marketable direct obligations issued by, or
unconditionally guaranteed by, the sovereign nation in which such Foreign
Subsidiary is organized and is conducting business or issued by any agency of
such sovereign nation and backed by the full faith and credit of such sovereign
nation, in each case maturing within one year from the date of acquisition, so
long as the indebtedness of such sovereign nation is rated at least A by S&P or
A2 by Moody's or carries an equivalent rating from a comparable foreign rating
agency or (ii) investments of the type and maturity described in clauses (b)
through (d) above of foreign obligors, which investments or obligors have
ratings described in such clauses or equivalent ratings from comparable foreign
rating agencies and (f) investments made in compliance with the "Lucent
Technologies Domestic Investment Guidelines", dated July 16, 2002, and the
supplement thereto with respect to investments outside the United States of
America, substantially as in effect on the Effective Date.
"Person" shall mean any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"Plan" shall mean any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Rating Agencies" shall mean S&P and Moody's.
"Real Estate Subsidiary" shall mean any special purpose Subsidiary formed
in connection with and to facilitate a sale-leaseback transaction or a CMO
Transaction and designated as such by the Borrower in a notice to the
Administrative Agent and that engages in no operations or activities other than
those related to or contemplated by such transaction or as are incidental
thereto.
"Receivables Subsidiary" shall mean any special purpose, bankruptcy-remote
Subsidiary that acquires, on a revolving basis, receivables generated by the
Borrower or any of its Subsidiaries and that engages in no operations or
activities other than those related to receivables securitizations.
"Redeemable Convertible Preferred Stock" shall mean the 8% redeemable
convertible preferred stock of the Borrower issued pursuant to the Certificate
of Designations.
11
"Register" shall have the meaning assigned to such term in Section
10.04(d).
"Required ESD Banks" shall have the meaning assigned to such term in the
ESD Agreement.
"Required L/C Banks" shall mean, at any time, Banks having L/C Exposures
and unused Commitments representing at least 66 2/3% of the sum of the Total L/C
Exposure and total unused Commitments at such time.
"Required Lucent Banks" shall mean, at any time, the holders of more than
50% of the sum of (i) the Total L/C Exposure, (ii) the unused Commitments and
(iii) the ESD Obligations (as such term is defined in the ESD Agreement).
"Requirement of Law" shall mean, as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"Restricted Payment" shall mean any dividend or other distribution
(whether in cash, securities or other property) with respect to any shares of
any class of Capital Stock of the Borrower or any Subsidiary, or any payment
(whether in cash, securities or other property), including any sinking fund or
similar deposit, on account of the purchase, redemption, retirement,
acquisition, cancellation or termination of any such shares of Capital Stock of
the Borrower or any Subsidiary or any option, warrant or other right to acquire
any such shares of Capital Stock of the Borrower or any Subsidiary; provided,
however, that any such dividend, other distribution or payment made in the
common stock of the Borrower shall not constitute a "Restricted Payment."
"S&P" shall mean Standard and Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc.
"SEC" shall mean the Securities and Exchange Commission.
"Secured Parties" shall have the meaning given to such term in the
Guarantee and Collateral Agreement.
"Security Documents" shall mean the collective reference to the Guarantee
and Collateral Agreement, the Mortgages, the Control Agreements and all other
security documents hereafter delivered to the Collateral Agent or the
Administrative Agent granting a Lien on any property of any Person to secure the
obligations and liabilities of any Credit Party pursuant to this Agreement, the
ESD Agreement, certain designated External Sharing Debt or any Guarantee in
respect thereof.
"Subsidiary" shall mean any corporation, partnership, limited liability
company or other entity, a majority of the Voting Shares or other ownership
interests having ordinary voting power (other than only by reason of the
happening of a contingency) of which are at the time owned or controlled,
directly or indirectly, by the Borrower or by one or more Subsidiaries of the
Borrower, excluding any such Person that (a) would not constitute a consolidated
subsidiary of the Borrower in accordance with GAAP and (b) is not Controlled by
the Borrower. Unless otherwise qualified, all references to a "Subsidiary" or to
"Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries of
the Borrower
12
"Subsidiary Guarantors" shall mean each Wholly Owned Material Domestic
Subsidiary (excluding any Receivables Subsidiary , any Real Estate Subsidiary
and the Insurance Subsidiary).
"Synthetic Purchase Agreement" shall mean any agreement pursuant to which
the Borrower or any of its Subsidiaries is or may become obligated to make (a)
any payment in connection with the purchase by any third party from a Person
other than the Borrower or a Subsidiary of any Capital Stock of the Borrower or
any Subsidiary or any Indebtedness for borrowed money of the Borrower or any
Subsidiary issued in a public offering or private placement or (b) any payment
the amount of which is determined by reference to the price or value at any time
of any such Capital Stock or Indebtedness; provided, that no phantom stock or
similar plan providing for payments only to current or former directors,
officers or employees of the Borrower or any Subsidiary (or to their heirs or
estates) shall be deemed to be a Synthetic Purchase Agreement.
"Taxes" shall mean any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Termination Date" shall mean the earlier of (a) December 31, 2004 and (b)
the date the Commitments are terminated upon the occurrence of a Cash Collateral
Event or Event of Default in accordance with Article VII or VIII, respectively.
"Total Commitment" shall mean, at any time, the aggregate amount of
Commitments of all the Banks, as in effect at such time. The initial amount of
the Total Commitment is $244,500,000.
"Total L/C Exposure" shall mean, at any time, the sum of (a) the aggregate
L/C Outstandings at such time plus (b) the aggregate amount of all L/C
Disbursements that have not been reimbursed by or on behalf of the Borrower at
such time.
"Transactions" shall have the meaning assigned to such term in Section
3.02.
"Transferee" shall have the meaning assigned to such term in Section 2.14.
"Trust Preferred Offering Memorandum" shall mean the Confidential Offering
Memorandum, dated March 13, 2002, with respect to the Trust Preferred
Securities.
"Trust Preferred Securities" shall mean 7.75% Cumulative Convertible Trust
Preferred Securities of Lucent Technologies Capital Trust I offered under the
Trust Preferred Offering Memorandum.
"USD Equivalent" shall mean with respect to an amount in any currency
other than dollars on any date, the amount of dollars that may be purchased with
such amount of other currency at the Exchange Rate in effect on such date. As
used in this definition, "Exchange Rate" means, at any date of determination
thereof with respect to any currency, the spot rate of exchange for the
conversion of such currency into dollars determined by reference to such rate
publishing service as is customarily utilized by the Administrative Agent for
such purpose. Any such determination of the Exchange Rate shall be conclusive
absent manifest error.
"Vendor Financing Exposure": Guarantees or other credit support in respect
of Indebtedness under Vendor Financings, to the extent such Indebtedness is held
by any Person other than the Borrower or any of its Subsidiaries or is the
subject of a securitization.
13
"Vendor Financings": credit facilities and other financing arrangements
providing for loans or other extensions of credit to customers or prospective
customers of the Borrower or any of its Subsidiaries (or Affiliates of such
customers or prospective customers), including, without limitation, the
transactions contemplated by the Participation Agreement and the other documents
entered into in connection therewith.
"Voting Shares" shall mean, as to shares of a particular corporation,
outstanding shares of stock of any class of such corporation entitled to vote in
the election of directors, excluding shares entitled so to vote only upon the
happening of some contingency.
"Wholly Owned Material Domestic Subsidiary" shall mean any Wholly Owned
Subsidiary of the Borrower that is a Domestic Subsidiary and a Material
Subsidiary.
"Wholly Owned Subsidiary" shall mean, as to any Person, any other Person
all of the Capital Stock of which (other than directors' qualifying shares
required by law) is owned by such Person directly and/or through other Wholly
Owned Subsidiaries.
"Withdrawal Liability" shall mean liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Terms Generally. For the purposes of this Agreement and the
other Credit Documents, (a) the definitions in Section 1.01 shall apply equally
to both the singular and plural forms of the terms defined; (b) whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms; (c) the words "include," "includes" and "including"
shall be deemed to be followed by the phrase "without limitation"; (d) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, Capital Stock, securities, revenues, accounts, leasehold
interests and contract rights and (e) references to agreements or other
Contractual Obligations shall, unless otherwise specified, be deemed to refer to
such agreements or Contractual Obligations as amended, supplemented, restated or
otherwise modified from time to time. All references herein to Articles,
Sections, Exhibits and Schedules shall be deemed references to Articles and
Sections of, and Exhibits and Schedules to, this Agreement unless the context
shall otherwise require.
SECTION 1.03. Accounting Terms; GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; provided
that, if the Borrower notifies the Administrative Agent that the Borrower
requests an amendment to any provision hereof to eliminate the effect of any
change occurring after the Effective Date in GAAP or in the application thereof
on the operation of such provision (or if the Administrative Agent notifies the
Borrower that the Required L/C Banks request an amendment to any provision
hereof for such purpose), regardless of whether any such notice is given before
or after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.
SECTION 1.04. Currency. Whenever any amount is to be determined for
purposes of Section 2 hereof or otherwise for the purposes of calculating any
amount outstanding under this Agreement, such amount shall be determined by the
Administrative Agent in Dollars by calculating the USD Equivalent of any portion
of such amount denominated in an Alternate Currency and adding such amount to
the Dollar-denominated portion of such amount.
14
ARTICLE II
Letters of Credit
SECTION 2.01. L/C Commitment. (a) Subject to the terms and conditions
hereof, each Issuing Bank, in reliance on the agreements of the other Banks set
forth in Section 2.03(a), agrees to issue, renew and extend letters of credit
("Letters of Credit") for the account of the Borrower on any Business Day during
the Availability Period in such form as may be approved from time to time by the
relevant Issuing Bank; provided that such Issuing Bank shall have no obligation
to issue any Letter of Credit if, after giving effect to such issuance, renewal
or extension, as the case may be, (i) the Total L/C Exposure would exceed the
Total Commitment or (ii) the L/C Exposure of any Bank would exceed such Bank's
Commitment. Each Letter of Credit shall (i) be denominated in Dollars or in an
Alternate Currency and (ii) expire no later than the first anniversary of its
date of issuance.
(b) Each Issuing Bank shall not at any time be obligated to issue,
renew or extend any Letter of Credit if such issuance, renewal or extension
would conflict with, or cause such Issuing Bank or any Bank to exceed any limits
imposed by, any applicable Requirement of Law.
SECTION 2.02. Procedure for Issuance and Renewal of Letter of Credit.
(a) The Borrower or any Wholly Owned Subsidiary may from time to time request
that an Issuing Bank issue a Letter of Credit by delivering to such Issuing Bank
at its address for notices specified herein an Application therefor, completed
to the satisfaction of such Issuing Bank, and such other certificates, documents
and other papers and information as such Issuing Bank may customarily request.
Upon receipt of any Application, such Issuing Bank shall notify the
Administrative Agent of such request and will process such Application and the
certificates, documents and other papers and information delivered to it in
connection therewith in accordance with its customary procedures. Subject to the
conditions set forth in Section 4.02 and to confirmation by the Administrative
Agent that the issuance of such Letter of Credit shall not cause the Total L/C
Exposure to exceed the Total Commitment, such Issuing Bank shall promptly issue
the Letter of Credit requested thereby (but in no event shall any Issuing Bank
be required to issue any Letter of Credit earlier than three Business Days after
its receipt of the Application therefor and all such other certificates,
documents and other papers and information relating thereto) by issuing the
original of such Letter of Credit to the beneficiary thereof or as otherwise may
be agreed to by such Issuing Bank and the Borrower or such Wholly Owned
Subsidiary. Each Issuing Bank shall furnish a copy of any Letter of Credit
issued by such Issuing Bank to the Borrower or such Wholly Owned Subsidiary
promptly following the issuance thereof. Each Issuing Bank shall promptly
furnish to the Administrative Agent, which shall in turn periodically furnish to
the Banks, notice of the issuance of each Letter of Credit issued by such
Issuing Bank (including the issuance date, identification number, amount,
maturity date and beneficiary thereof and notice of any increase, extension or
expiry thereof).
(b) Promptly upon receipt of any request from or on behalf of a
beneficiary for renewal of any of its Letters of Credit, or notice from or on
behalf of a beneficiary of its intent to draw upon non-renewal of any of its
Letters of Credit, and in any event prior to renewal of any of its Letters of
Credit (and if practicable, at least 5 Business Days prior to renewal), the
Issuing Bank that issued such Letters of Credit shall give notice of such
possible renewal to the Borrower. The Borrower shall (and if possible, at least
5 Business Days prior to the earlier of the date on which a request for renewal
is required to be made or the permissible draw date of such Letter of Credit
(each, a "Request Deadline")), advise such Issuing Bank and the Administrative
Agent promptly as to whether the Borrower is requesting such Issuing Bank to
renew such Letter of Credit or not. Subject to the terms and conditions hereof,
including satisfaction of the conditions set forth in Section 4.02, and to the
confirmation by the Administrative Agent that the renewal of such Letter of
Credit shall not cause the Total L/C Exposure to exceed the Total Commitment and
receipt by such Issuing Bank of any other certificates, documents and other
papers and
15
information relating thereto as such Issuing Bank may customarily request, if
the Borrower requests any Letter of Credit to be renewed, the Issuing Bank
hereby agrees to renew such Letter of Credit; provided that any request for
renewal is received by such Issuing Bank by the Request Deadline.
(c) If any Letter of Credit is renewed in accordance with the terms
hereof, the Issuing Bank that issued such Letter of Credit shall effect such
renewal in an appropriate manner generally in accordance with its customary
procedures or as otherwise may be agreed to by such Issuing Bank and the
Borrower. Each Issuing Bank shall give notice of the renewal of any Letter of
Credit issued by such Issuing Bank to the Borrower promptly following the
renewal thereof. Each Issuing Bank shall promptly furnish to the Borrower and
the Administrative Agent, which shall in turn furnish to the other Banks on a
quarterly basis within 30 days after the end of each calendar quarter, notice of
the renewal of each Letter of Credit issued by such Issuing Bank (including the
issuance date, identification number, amount, expiry date and beneficiary
thereof and notice of any increase, extension or expiry thereof).
(d) If a request to renew a Letter of Credit has not been received by
the Issuing Bank by the Request Deadline applicable to such Letter of Credit, or
if the Borrower has requested that such Issuing Bank not renew such Letter of
Credit, such Letter of Credit shall be permitted to expire in accordance with
the terms thereof. Each Issuing Bank shall give notice of the expiration of any
Letter of Credit issued by such Issuing Bank to the Borrower promptly following
the expiration thereof. Each Issuing Bank shall promptly furnish to the
Administrative Agent, which shall in turn furnish to the other Banks on a
quarterly basis within 30 days after the end of each calendar quarter, notice of
the expiration of any Letter of Credit issued by such Bank.
(e) Notwithstanding anything to the contrary set forth herein, any
Letter of Credit issued, renewed or extended at the request of any Wholly Owned
Subsidiary shall be for the account of the Borrower, who shall be and remain
liable for all obligations arising thereunder and in respect thereof.
SECTION 2.03. Participations. (a) Each Issuing Bank irrevocably agrees
to grant and hereby grants to each Bank, and, to induce each Issuing Bank to
issue Letters of Credit, each Bank irrevocably agrees to accept and purchase and
hereby accepts and purchases from each Issuing Bank, on the terms and conditions
set forth below, for such Bank's own account and risk an undivided interest
equal to such Bank's Commitment Percentage in each Issuing Bank's obligations
and rights under and in respect of each Letter of Credit and the amount of each
draft paid by such Issuing Bank thereunder. Each Bank agrees with each Issuing
Bank that, if a draft is paid under any Letter of Credit for which such Issuing
Bank is not reimbursed in full by the Borrower in accordance with the terms of
this Agreement, such Bank shall pay to such Issuing Bank upon demand at such
Issuing Bank's address for notices specified herein an amount equal to the
product of such Bank's Commitment Percentage multiplied by the amount of such
draft, or any part thereof, that is not so reimbursed. With respect to any
Letter of Credit issued in an Alternate Currency, unless all of the Banks have
agreed to the Alternate Currency in which such Letter of Credit has been issued,
no such demand shall be made by the relevant Issuing Bank prior to its electing
to convert the reimbursement payment to Dollars as contemplated by Section 2.04.
Each Bank's obligation to pay such amount shall be absolute and unconditional
and shall not be affected by any circumstance, including (i) any setoff,
counterclaim, recoupment, defense or other right that such Bank may have against
such Issuing Bank, the Borrower or any other Person for any reason whatsoever,
(ii) the occurrence or continuance of a Default, an Event of Default or a Cash
Collateral Event or the failure to satisfy any of the other conditions specified
in Section 4.02, (iii) any adverse change in the condition (financial or
otherwise) of the Borrower, (iv) any breach of this Agreement or any other
Credit Document by the Borrower, any other Credit Party or any other Bank, or
(v) any other circumstance, happening or event whatsoever, whether or not
similar to any of the foregoing
16
(b) If any Issuing Bank shall not have been reimbursed in full for any
L/C Disbursement made by such Issuing Bank under any Letter of Credit on the
date of such L/C Disbursement, such Issuing Bank shall promptly notify the
Administrative Agent and the Administrative Agent shall promptly notify each
other Bank of such non-reimbursement, the amount thereof and, the amount of such
Bank's pro rata portion (according to such Bank's Commitment Percentage) of such
unreimbursed L/C Disbursement. The amounts set forth in such notice shall be
conclusive in the absence of manifest error. Upon receipt of such notice from
the Administrative Agent, each Bank shall pay to the relevant Issuing Bank,
directly, the amount due by such Bank therein no later than 3:00 P.M., New York
City time, on the day such notice is received by such Bank if such notice is
received at or prior to 12:00 Noon, New York City time, on any Business Day, or
no later than 12:00 Noon, New York City time, on the next succeeding Business
Day if such notice is received after 12:00 Noon, New York City time, by such
Bank on a Business Day. If any amount required to be paid by any Bank to any
Issuing Bank pursuant to this Section 2.03 in respect of any unreimbursed
portion of an L/C Disbursement is paid within three Business Days after the date
such payment is due, such Bank shall pay to such Issuing Bank on demand an
amount equal to the product of (i) such amount, times (ii) the daily average
Federal Funds Effective Rate during the period from and including the date of
such L/C Disbursement to the date on which such payment is immediately available
to such Issuing Bank, times (iii) a fraction the numerator of which is the
number of days that elapse during such period and the denominator of which is
360. If any such amount required to be paid by any Bank pursuant to this Section
2.03 is not made available to such Issuing Bank by such Bank within three
Business Days after the date such payment is due, such Issuing Bank shall be
entitled to recover from such Bank, on demand, such amount with interest thereon
calculated from such due date at the Alternate Base Rate. A certificate of any
Issuing Bank submitted to any Bank with respect to any amounts owing under this
Section shall be conclusive in the absence of manifest error.
(c) Whenever, at any time after any Issuing Bank has made an L/C
Disbursement under any Letter of Credit and has received from any Bank its pro
rata share of such payment in accordance with this Section 2.03, such Issuing
Bank receives any payment related to such Letter of Credit (whether directly
from the Borrower or otherwise including proceeds of collateral applied thereto
by such Issuing Bank), or any payment of interest on account thereof, such
Issuing Bank will distribute to such Bank its pro rata share thereof; provided,
however, that in the event that any such payment received by such Issuing Bank
shall be required to be returned by such Issuing Bank, such Bank shall return to
such Issuing Bank the portion thereof previously distributed by such Issuing
Bank to it.
(d) If any Bank shall fail to make any payment required to be made by
it pursuant to this Section 2.03, then the Administrative Agent may, in its
discretion (notwithstanding any contrary provision hereof), apply any amounts
thereafter received by the Administrative Agent or an Issuing Bank with
instructions from the Administrative Agent for the account of such Bank to
satisfy such Bank's obligations under such Sections until all such unsatisfied
obligations are fully paid.
SECTION 2.04. Reimbursement. (a) If any Issuing Bank shall make any L/C
Disbursement in respect of any Letter of Credit, the Borrower shall reimburse
such Issuing Bank for the amount of (a) such L/C Disbursement and (b) any taxes,
fees, charges or other costs or expenses incurred by such Issuing Bank in
connection with such payment, not later than 12:00 Noon, New York City time, on
(i) the Business Day that the Borrower receives notice of such L/C Disbursement,
if such notice is received on such day prior to 10:00 A.M., New York City time,
or (ii) if clause (i) above does not apply, the Business Day immediately
following the day that the Borrower receives such notice. Each such payment
shall be made to such Issuing Bank at its address for notices referred to herein
in Dollars or Alternate Currency, as applicable (except that, in the case of any
Letter of Credit denominated in any Alternate Currency, in the event that such
payment is not made to such Issuing Bank within three Business Days of the date
of receipt by the Borrower of such notice, upon notice by such Issuing Bank to
17
the Borrower (or, in the case of the existence of an Event of Default described
in paragraph (h) or (i) of Article VIII hereof as of such third Business Day),
such payment shall be made in Dollars, in an amount equal to the USD Equivalent
of the amount of such payment converted on the date of such notice (or such
third Business Day) at the spot rate of exchange on such date) and in
immediately available funds. Any conversion by any Issuing Bank of any payment
to be made by the Borrower in respect of any Letter of Credit denominated in an
Alternate Currency into Dollars in accordance with this Section 2.04(a) shall be
conclusive and binding upon the Borrower and the Banks in the absence of
manifest error; provided that upon the request of any Bank, such Issuing Bank
shall provide to such Bank a certificate including reasonably detailed
information as to the calculation of such conversion. Each Issuing Bank shall
promptly notify the Administrative Agent of each L/C Disbursement in respect of
any Letter of Credit issued by it and each payment on account thereof.
(b) Interest shall be payable on any and all amounts remaining unpaid
by the Borrower under this Section 2.04 (or any other amount owed by it under
any of the Credit Documents) from the date such amounts become payable (whether
at stated maturity, by acceleration or otherwise) until payment in full at the
rate per annum equal to the Alternate Base Rate plus 5.50%.
SECTION 2.05. Obligations Absolute. The Borrower's obligations under
this Section shall be absolute and unconditional under any and all circumstances
and irrespective of any setoff, counterclaim or defense to payment that the
Borrower may have or have had against any Issuing Bank, any beneficiary of a
Letter of Credit or any other Person. The Borrower also agrees with each Issuing
Bank that to the extent permitted by law such Issuing Bank shall not be
responsible for, and the Borrower's obligations to reimburse L/C Disbursements
as provided in Section 2.04 shall not be affected by, among other things, the
validity or genuineness of documents or of any endorsements thereon, even though
such documents shall in fact prove to be invalid, fraudulent or forged, or any
dispute between or among the Borrower and any beneficiary of any Letter of
Credit or any other party to which such Letter of Credit may be transferred or
any claims whatsoever of the Borrower against any beneficiary of such Letter of
Credit or any such transferee. Each Issuing Bank shall not be liable for any
error, omission, interruption or delay in transmission, dispatch or delivery of
any message or advice, however transmitted, in connection with any Letter of
Credit issued by such Issuing Bank, except for errors or omissions found by a
final and nonappealable decision of a court of competent jurisdiction to have
resulted from the gross negligence or willful misconduct of such Issuing Bank.
The Borrower agrees that any action taken or omitted by any Issuing Bank under
or in connection with any Letter of Credit issued by such Issuing Bank or the
related drafts or documents, if done in the absence of gross negligence or
willful misconduct, shall be binding on the Borrower and shall not result in any
liability of such Issuing Bank to the Borrower.
SECTION 2.06. Disbursement Procedures. If any draft shall be presented
for payment under any Letter of Credit, each Issuing Bank shall promptly notify
the Borrower and the Administrative Agent of the date and amount thereof. The
responsibility of each Issuing Bank to the Borrower in connection with any draft
presented for payment under any Letter of Credit shall, in addition to any
payment obligation expressly provided for in such Letter of Credit, be limited
to determining that the documents (including each draft) delivered under such
Letter of Credit in connection with such presentment conform in all material
respects with such Letter of Credit.
SECTION 2.07. Applications. To the extent that any provision of any
Application related to any Letter of Credit is inconsistent with the provisions
of this Section 2, the provisions of this Section 2 shall apply.
SECTION 2.08. Fees and Other Charges. (a) The Borrower will pay a fee
on all outstanding Letters of Credit at a per annum rate equal to the L/C Fee
Rate, such fee to be shared ratably
18
among the Banks and to be payable quarterly in arrears following receipt of a
statement or invoice in respect thereof within 10 Business Days after the end of
each fiscal quarter (beginning with the fiscal quarter ending June 30, 2003)
after the issuance date. In addition, the Borrower shall pay to each Issuing
Bank for its own account a fronting fee of 12.5 basis points per annum on the
undrawn and unexpired amount of each Letter of Credit, such fee payable
quarterly in arrears within 10 Business Days after the end of each fiscal
quarter (beginning with the fiscal quarter ending June 30, 2003) after the
issuance date.
(b) The Borrower agrees to pay to each Bank, through the Administrative
Agent, within 10 Business Days after the end of each fiscal quarter (beginning
with the fiscal quarter ending June 30, 2003) and on the date on which the
Commitment of such Bank shall be terminated as provided herein, a commitment fee
(the "Commitment Fees") at a rate equal to 75 basis points per annum on the
average daily amount of the Available Commitment of such Bank, during the
preceding quarter (or other period commencing on the Effective Date, or ending
with the Termination Date or any date on which the Commitment of such Bank shall
be terminated). All Commitment Fees shall be computed on the basis of the actual
number of days elapsed in a year of 365 or 366 days, as the case may be. The
Commitment Fee due to each Bank shall commence to accrue on the Effective Date,
and shall cease to accrue on the earlier of the Termination Date and the
termination of the Commitment of such Bank as provided herein.
(c) The Borrower agrees to pay the Administrative Agent, for its own
account the administrative and other fees at the times and in the amounts
separately agreed upon between the Borrower and the Administrative Agent.
(d) All fees due under this Section 2.08 shall be paid in Dollars on
the dates due, in immediately available funds, to the Administrative Agent for
distribution, if and as appropriate, among the Banks. Once paid, none of the
fees shall be refundable under any circumstances.
(e) In addition to the foregoing fees, the Borrower shall pay or
reimburse each Issuing Bank for such normal and customary costs and expenses as
are incurred or charged by such Issuing Bank in issuing, negotiating, effecting
payment under, amending or otherwise administering any Letter of Credit.
SECTION 2.09. Termination, Reduction and Increase of Commitments. (a)
The Commitments shall automatically terminate on the Termination Date.
(b) Upon at least three Business Days' prior irrevocable telecopy
notice to the Administrative Agent, the Borrower may at any time in whole
permanently terminate, or from time to time in part permanently reduce, the
Total Commitment; provided, however that (i) each partial reduction of the Total
Commitment shall be in an integral multiple of $1,000,000 and in a minimum
principal amount of $5,000,000 and (ii) the Borrower may not terminate or reduce
the Total Commitment if, after giving effect to such termination or reduction,
the Total L/C Exposure would exceed the Total Commitment.
(c) Each reduction in the Total Commitment hereunder shall be made
ratably among the Banks in accordance with their respective Commitment
Percentages. The Borrower shall pay to the Administrative Agent for the account
of the Banks, on the date of each termination or reduction of the Commitments,
the Commitment Fees on the amount of the Commitments so terminated or reduced
accrued through the date of such termination or reduction.
(d) Subject to Section 6.01, the Borrower may elect to increase the
Total Commitment up to a maximum amount of $500,000,000 either (i) by
designating a bank or other financial institution not at the time of such
designation a Bank to become a Bank or (ii) by agreeing with an
19
existing Bank that such Bank's Commitment shall be increased; provided, that (A)
the addition of any bank or financial institution pursuant to clause (i) above
shall be subject to the consent of each Issuing Bank (which consent, in each
case, shall not be unreasonably withheld), (B) no Default or Event of Default
shall have occurred and be continuing prior to or after giving effect to any
increase pursuant to this Section 2.09(d) and (C) any increase shall be in an
integral multiple of $1,000,000 and in a minimum principal amount of $5,000,000.
Upon execution and delivery by the Borrower and such existing Bank or other bank
or financial institution of an instrument of assumption reasonably satisfactory
to the Administrative Agent, such existing Bank shall have a Commitment as
therein set forth or such other bank or financial institution shall become a
Bank with a Commitment as therein set forth and all the rights and obligations
of a Bank with such a Commitment hereunder. Upon any increase in the Total
Commitment pursuant to this Section 2.09(d), the L/C Exposure of each Bank shall
be automatically adjusted to reflect the new Commitment Percentage of each Bank,
after giving effect to such increase, Schedule 1.01A shall be deemed amended to
give effect to such increase and the Administrative Agent shall circulate to
each Bank and the Borrower a revised Schedule 1.01A incorporating the effects of
such increase.
SECTION 2.10. Reserve Requirements, Change in Circumstances. (a)
Notwithstanding any other provision herein, if after the date of this Agreement
any change in applicable law or regulation or in the interpretation or
administration thereof by any governmental authority charged with the
interpretation or administration thereof (whether or not having the force of
law) shall result in the imposition, modification or applicability of any
reserve, special deposit or similar requirement against assets of, deposits
with, or for the account of, or credit extended by any Bank or Issuing Bank, or
shall result in the imposition on such Bank or Issuing Bank any other condition
affecting this Agreement, such Bank's Commitment or any Application, Letter of
Credit or participations therein, and the result of any of the foregoing shall
be to increase the cost to such Bank or Issuing Bank of participating in,
issuing or maintaining any Letter of Credit or to reduce the amount of any sum
received or receivable by such Bank or Issuing Bank hereunder (whether of
interest or otherwise) by an amount deemed by such Bank or Issuing Bank to be
material, then the Borrower will pay to such Bank or Issuing Bank, as the case
may be, upon demand such additional amount or amounts as will compensate such
Bank or Issuing Bank for such additional costs incurred or reduction suffered.
(b) If any Bank or Issuing Bank shall have determined that the
applicability of any law, rule, regulation or guideline adopted after the
Effective Date pursuant to or arising out of the July 1988 report of the Basle
Committee on Banking Regulations and Supervisory Practices entitled
"International Convergence of Capital Measurement and Capital Standards," or the
adoption after the Effective Date of any other law, rule, regulation or
guideline regarding capital adequacy, or any change in any of the foregoing or
in the interpretation or administration of any of the foregoing by any
Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Bank or Issuing
Bank (or any lending office of such Bank or Issuing Bank) or any Bank's or
Issuing Bank's holding company with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such authority, central
bank or comparable agency, has or would have the effect of reducing the rate of
return on such Bank's or Issuing Bank's capital or on the capital of such Bank's
or Issuing Bank's holding company, if any, as a consequence of this Agreement,
such Bank's or Issuing Bank's Commitment or the Letters of Credit or
participations therein pursuant hereto to a level below that which such Bank or
Issuing Bank or such Bank's or Issuing Bank's holding company could have
achieved but for such adoption, change or compliance (taking into consideration
such Bank's or Issuing Bank's policies and the policies of such Bank's holding
company with respect to capital adequacy) by an amount deemed by such Bank or
Issuing Bank to be material, then from time to time the Borrower shall pay to
such Bank such additional amount or amounts as will compensate such Bank or
Issuing Bank or such Bank's or Issuing Bank's holding company for any such
reduction suffered. It is acknowledged that this Agreement is being entered into
by
20
the Banks and the Issuing Banks on the understanding that the Banks and Issuing
Bank will not be required to maintain capital against their Commitments under
currently applicable laws, regulations and regulatory guidelines.
(c) A certificate of the Bank or Issuing Bank setting forth such amount
or amounts (including computation of such amount or amounts) as shall be
necessary to compensate the Bank or Issuing Bank or its holding company as
specified in paragraph (a) or (b) above, as the case may be, shall be delivered
to the Borrower and such amount or amounts may be reviewed by the Borrower.
Unless the Borrower disagrees in good faith with the computation of the amount
or amounts in such certificate, the Borrower shall pay to the Bank or Issuing
Bank, within 10 Business Days after receipt by the Borrower of such certificate
delivered by the Bank or the Issuing Bank, the amount shown as due on any such
certificate. If the Borrower, after receipt of any such certificate from the
Bank or Issuing Bank, disagrees with the Bank or Issuing Bank on the computation
of the amount or amounts owed to the Bank or Issuing Bank pursuant to paragraph
(a) or (b) above, the Bank or Issuing Bank and the Borrower shall negotiate in
good faith to resolve such disagreement promptly. In either case, however, the
Bank or Issuing Bank shall have a duty to mitigate the damages that may arise as
a consequence of paragraph (a) or (b) above to the extent that such mitigation
will not, in the judgment of the Bank or Issuing Bank, entail any cost or
disadvantage to the Bank or Issuing Bank that the Bank or Issuing Bank is not
reimbursed or compensated for by the Borrower.
(d) Failure on the part of any Bank or Issuing Bank to demand
compensation for any increased costs or reduction in amounts received or
receivable or reduction in return on capital with respect to any period shall
not constitute a waiver of such Bank's or Issuing Bank's right to demand
compensation with respect to any other period; provided that if any Bank or
Issuing Bank fails to make such demand within 45 days after it obtains knowledge
of the event giving rise to the demand such Bank or Issuing Bank shall, with
respect to amounts payable pursuant to this Section 2.10 resulting from such
event only be entitled to payment under this Section 2.10 for such costs
incurred or reduction in amounts or return on capital from and after the date 45
days prior to the date that such Bank or Issuing Bank does make such demand. The
protection of this Section 2.10 shall be available to each Bank or Issuing Bank
regardless of any possible contention of the invalidity or inapplicability of
the law, rule, regulation, guideline or other change or condition which shall
have occurred or been imposed.
SECTION 2.11. Pro Rata Treatment. Except as required under Sections
2.10, 2.14, and 2.15, each payment of the Commitment Fees and each reduction of
the Total Commitment, shall be allocated pro rata among the Banks in accordance
with their respective Commitment Percentages (or, if such Commitments shall have
expired or been terminated, in accordance with their respective L/C Exposures).
SECTION 2.12. Sharing of Setoff. Each Bank agrees that if it shall,
through the exercise of a right of banker's lien, setoff or counterclaim against
the Borrower, or pursuant to a secured claim under Section 506 of Title 11 of
the United States Code or other security or interest arising from, or in lieu
of, such secured claim, received by such Bank under any applicable bankruptcy,
insolvency or other similar law or otherwise, or by any other means (excluding
for the purpose of this Section 2.12, Section 2.10, Section 2.14 and Section
2.15), obtain payment (voluntary or involuntary) in respect of any
participations in L/C Disbursements as a result of which the participations in
L/C Disbursements of such Bank shall be proportionately less than the
participations in L/C Disbursements of any other Bank, it shall be deemed
simultaneously to have purchased from such other Bank at face value, and shall
promptly pay to such other Bank the purchase price for, participations in L/C
Disbursements of such other Bank, so that the benefit of all such payments shall
be shared ratably by the Banks in accordance with their Commitment Percentages
in L/C Disbursements; provided, however, that, if any such purchase or purchases
or adjustments shall be made pursuant to this Section 2.12 and the payment
giving rise thereto
21
shall thereafter be recovered, such purchase or purchases or adjustments shall
be rescinded to the extent of such recovery and the purchase price or prices or
adjustment restored without interest. The Borrower expressly consents to the
foregoing arrangements and agrees that any Bank acquiring a participation
pursuant to the foregoing may exercise any and all rights of banker's lien,
setoff or counterclaim with respect to any and all moneys owing by the Borrower
to such Bank by reason thereof as fully as if such Bank were a direct creditor
of the Borrower in the amount of such participation.
SECTION 2.13. Payments. (a) Except as otherwise provided herein, the
Borrower shall make each payment (including any fees or other amounts)
hereunder, without setoff or counterclaim, from an account in the United States
not later than 12:00 Noon, New York City time, on the date when due in Dollars
to the Administrative Agent at its offices at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx, in immediately available funds.
(b) Whenever any payment (including any fees or other amounts)
hereunder shall become due, or otherwise would occur, on a day that is not a
Business Day, such payment may be made on the next succeeding Business Day, and
such extension of time shall in such case be included in the computation of
interest or fees, if applicable.
SECTION 2.14. Taxes. (a) Any and all payments by the Borrower hereunder
shall be made, in accordance with Section 2.13, free and clear of, and without
deduction for any and all present or future taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto imposed by the
United States or any political subdivision or taxing authority thereof,
excluding taxes imposed on the Administrative Agent's or any Bank's (or any
transferee's or assignee's, including a participation holder's (any such entity
a "Transferee")) net income and franchise taxes imposed on the Administrative
Agent or any Bank (or Transferee) by the United States or any political
subdivision or taxing authority thereof (all such nonexcluded taxes, levies,
imposts, deductions, charges, withholdings and liabilities being hereinafter
referred to as "Taxes"). If the Borrower shall be required by law to deduct any
Taxes from or in respect of any sum payable hereunder to any Bank (or any
Transferee) or the Administrative Agent (i) the sum payable shall be increased
by the amount necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section 2.14) such
Bank (or Transferee) or the Administrative Agent (as the case may be) shall
receive an amount equal to the sum it would have received had no such deductions
been made, (ii) the Borrower shall make such deductions and (iii) the Borrower
shall pay the full amount deducted to the relevant taxing authority or other
Governmental Authority in accordance with applicable law.
(b) In addition, the Borrower agrees to pay any present or future stamp
or documentary taxes or any other excise or property taxes, charges or similar
levies which arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement
imposed by the United States or any political subdivision or taxing authority
thereof (hereinafter referred to as "Other Taxes").
(c) The Borrower will indemnify each Bank (or Transferee) and the
Administrative Agent for the full amount of Taxes and Other Taxes (including any
Taxes or Other Taxes on amounts payable under this Section 2.14) paid by such
Bank (or Transferee) or the Administrative Agent, as the case may be, with
respect to the Borrower and any liability (including penalties, interest and
reasonable out-of-pocket expenses) arising therefrom or with respect thereto
(other than any such liability that results from the gross negligence or willful
misconduct of the Bank (or Transferee) or Agent), whether or not such Taxes or
Other Taxes were correctly or legally asserted by the relevant taxing authority
or other Governmental Authority. Such indemnification shall be made within 30
days after the date any Bank (or Transferee) or the Administrative Agent, as the
case may be, makes written demand therefor. If the Borrower or any Bank (or
Transferee) or the Administrative Agent shall determine that Taxes or Other
22
Taxes may not have been correctly or legally assessed by the relevant taxing
authority or other Governmental Authority, and that a Bank (or Transferee) or
the Administrative Agent may be entitled to receive a refund in respect of Taxes
or Other Taxes, it shall promptly notify the other party of the availability of
such refund and such Bank (or Transferee) or the Administrative Agent shall,
within 30 days after receipt of a request by the Borrower, apply for such refund
at the Borrower's expense. If any Bank (or Transferee) or the Administrative
Agent receives a refund or credit or offset against another tax liability in
respect of any Taxes or Other Taxes for which such Bank (or Transferee) or the
Administrative Agent has received payment from the Borrower hereunder it shall
promptly repay such refund or credit or offset against another tax liability
(including any interest received by such Bank (or Transferee) or the
Administrative Agent from the taxing authority with respect to the refund with
respect to such Taxes or Other Taxes) to the Borrower, net of all out-of-pocket
expenses of such Bank; provided that the Borrower, upon the request of such Bank
(or Transferee) or the Administrative Agent, agrees to return such refund or
credit or offset against another tax liability (plus penalties, interest or
other charges) to such Bank (or Transferee) or the Administrative Agent in the
event such Bank (or Transferee) or the Administrative Agent is required to repay
such refund or credit or offset against another tax liability. For purposes of
the preceding sentence, the Administrative Agent or any Bank shall determine in
good faith and in its discretion the amount of any credit or offset against
another tax liability and shall be under no obligation to make available to the
Borrower any of its tax returns or any other information that it deems to be
confidential.
(d) As soon as practicable after the date of any payment of Taxes or
Other Taxes withheld by the Borrower in respect of any payment to any Bank (or
Transferee) or the Administrative Agent, the Borrower will furnish to the
Administrative Agent, at its address referred to in Section 10.01, the original
or a certified copy of a receipt evidencing payment thereof.
(e) Without prejudice to the survival of any other agreement contained
herein, the agreements and obligations contained in Section 2.10 and this
Section 2.14 shall survive the expiration or termination of any Letter of Credit
and the Commitments or the termination of this Agreement or any provision
hereof.
(f) Each Bank (or Transferee) which is organized outside the United
States shall, prior to the due date of the first payment by the Borrower to such
Bank (or Transferee) hereunder, deliver to the Borrower such certificates,
documents or other evidence, as required by the Code or Treasury Regulations
issued pursuant thereto, including Internal Revenue Service Form 8-BEN or Form
8-ECI and any other certificate or statement of exemption required by Treasury
Regulation Section 1.1441-1(b) or Section 1.1441-6(c) or any subsequent version
thereof, properly completed and duly executed by such Bank (or Transferee)
establishing that such payment is (i) not subject to withholding under the Code
because such payment is effectively connected with the conduct by such Bank (or
Transferee) of a trade or business in the United States or (ii) totally exempt
from United States tax under a provision of an applicable tax treaty. Each such
Bank (or Transferee) that changes its funding office shall promptly notify the
Borrower of such change and, upon written request from the Borrower, shall
deliver any new certificates, documents or other evidence required pursuant to
the preceding sentence prior to the immediately following due date of any
payment by the Borrower hereunder. Unless the Borrower and the Administrative
Agent have received forms or other documents satisfactory to them indicating
that payments hereunder are not subject to United States withholding tax,
notwithstanding paragraph (a), the Borrower or the Administrative Agent shall
withhold taxes from such payments at the applicable statutory rate in the case
of payments to or for any Bank (or Transferee) organized under the laws of a
jurisdiction outside the United States.
(g) The Borrower shall not be required to pay any additional amounts to
any Bank (or Transferee) in respect of Taxes and Other Taxes pursuant to
paragraphs (a), (b) and (c) above if the
23
obligation to pay such additional amounts would not have arisen but for a
failure by such Bank (or Transferee) to comply with the provisions of paragraph
(f) above unless such Bank (or Transferee) is unable to comply with paragraph
(f) because of (i) a change in applicable law, regulation or official
interpretation thereof or (ii) an amendment, modification or revocation of any
applicable tax treaty or a change in official position regarding the application
or interpretation thereof, in each case after the Effective Date (and, in the
case of a Transferee, after the date of assignment or transfer).
(h) Any Bank (or Transferee) claiming any additional amounts payable
under this Section 2.14 shall (i) to the extent legally able to do so, upon
written request from the Borrower, file any certificate or document if such
filing would avoid the need for or reduce the amount of any such additional
amounts which may thereafter accrue, and the Borrower shall not be obligated to
pay such additional amounts if, after the Borrower's request, any Bank (or
Transferee) could have filed such certificate or document and failed to do so;
or (ii) consistent with legal and regulatory restrictions, use reasonable
efforts to change the jurisdiction of its applicable lending office if the
making of such change would avoid the need for or reduce the amount of any
additional amounts which may thereafter accrue and would not, in the sole
determination of such Bank (or Transferee), be otherwise disadvantageous to such
Bank (or Transferee).
SECTION 2.15. Mandatory Assignment; Commitment Termination. In the
event any Bank delivers to the Administrative Agent or the Borrower, as
appropriate, a certificate in accordance with Section 2.10(c), or the Borrower
is required to pay any additional amounts or other payments in accordance with
Section 2.14, the Borrower may, at its own expense, and in its sole discretion
require such Bank to transfer and assign in whole or in part, without recourse
(in accordance with Section 10.04), all or part of its interests, rights and
obligations under this Agreement to an assignee which shall assume such assigned
obligations (which assignee may be another Bank, if a Bank accepts such
assignment); provided that (a) such assignment shall not conflict with any law,
rule or regulation or order of any court or other Governmental Authority and (b)
the Borrower or such assignee shall have paid to the assigning Bank in
immediately available funds the amounts owed to it hereunder.
SECTION 2.16. Cash Collateralization. (a) The Borrower shall maintain,
at all times, in an account with the Administrative Agent (the "Cash Collateral
Account") in the name of the Administrative Agent and for the benefit of the
Banks, an amount in Dollars equal to at least 20% of the Total L/C Exposure at
such time (the "Required Cash Collateral Amount").
(b) Prior to or concurrently with the issuance (unless such issuance
constitutes a renewal) of any Letter of Credit pursuant hereto, the Borrower
shall deposit an amount in Dollars required to maintain the Required Cash
Collateral Amount after giving effect to the issuance of such Letter of Credit.
Any deposits to be made into the Cash Collateral Account in accordance with the
terms of this Section 2.16(b) shall be in minimum amounts of $2,500,000 and
multiples of $500,000 thereafter notwithstanding that any such deposit may be
greater than what would otherwise be required under this Section 2.16(b).
(c) If, due to exchange rate fluctuations or for any reason whatsoever,
the Total L/C Exposure exceeds the amount of the Total Commitment or the
Required Cash Collateral Amount is not then being maintained, the Borrower shall
cash collateralize such portion of the Total L/C Exposure that is in excess of
the Total Commitment within one Business Day of the Total L/C Exposure so
exceeding the amount of the Total Commitment and within one Business Day of any
increase in such excess or, as the case may be, shall deposit an amount
sufficient to increase the amount in the Cash Collateral Account to the Required
Cash Collateral Amount. Any deposits to be made into the Cash Collateral Account
in accordance with the terms of this Section 2.16(c) shall be in minimum amounts
of $2,500,000 and
24
multiples of $500,000 thereafter, notwithstanding that any such deposit may be
greater than what would otherwise be required under this Section 2.16(c).
(d) If any Cash Collateral Event or Event of Default shall occur, and
on and after the Termination Date, the Required Cash Collateral Amount shall
equal 100% of the Total L/C Exposure at such time. On the Termination Date and
within one Business Day of the occurrence of a Cash Collateral Event, the
Borrower shall deposit an amount in Dollars into the Cash Collateral Account
required to comply with the Required Cash Collateral Amount. Notwithstanding
anything to the contrary in this Section 2.16, the obligation to deposit cash
collateral shall become effective immediately, and such deposit shall become
immediately due and payable, without demand or other notice of any kind, upon
the occurrence of an Event of Default with respect to the Borrower described in
paragraphs (h) or (i) of Article VIII.
(e) If on any date the amount then on deposit in the Cash Collateral
Account is greater than the Required Cash Collateral Amount plus any accrued and
unpaid interest thereon on such date, such excess amount shall be returned to
the Borrower within one Business Day of the Borrower's request therefor;
provided that the Administrative Agent shall have no obligation to transfer any
such amount to the Borrower unless the aggregate amount to be returned to the
Borrower shall equal at least $2,500,000.
(f) The Cash Collateral Account and all deposits therein shall be held
by the Administrative Agent as collateral for the payment and performance of the
Obligations under this Agreement. The Administrative Agent shall have exclusive
dominion and control, including the exclusive right of withdrawal, over such
account. Funds held in the Cash Collateral Account shall be invested in time
deposits selected by the Administrative Agent or in Permitted Investments to be
agreed upon by the Borrower and the Administrative Agent, in each case, at the
Borrower's risk and expense. Other than any interest earned on the investment of
such deposits in Permitted Investments, such deposits shall not bear interest.
Interest or profits, if any, on such investments shall accumulate in such
account. Moneys in such account shall be applied by the Administrative Agent to
reimburse each Bank ratably for L/C Disbursements for which it has not been
reimbursed and, to the extent not so applied, shall be held for the satisfaction
of the reimbursement obligations of the Borrower for the L/C Exposure at such
time. As security for the payment and performance of the Obligations under this
Agreement, the Borrower hereby agrees to pledge, assign and transfer to the
Administrative Agent for the benefit of the Banks, and hereby creates and grants
to the Administrative Agent a security interest in the Cash Collateral Account
created pursuant to this Section and all deposits, cash and other investments
therein. At the request of the Administrative Agent, the Borrower shall execute
and deliver to the Administrative Agent such documents as the Administrative
Agent deems necessary or advisable to grant to the Administrative Agent for the
benefit of the Banks a perfected security interest in the Cash Collateral
Account and all deposits, cash and other investments therein as security for the
payment and performance of the Obligations under this Agreement.
(g) Beyond the exercise of reasonable care in the custody thereof, the
Administrative Agent shall have no duty as to any cash collateral in its
possession or control or in the possession or control of any agent or bailee or
any income thereon or as to the preservation of rights against prior parties or
any other rights pertaining thereto. The Administrative Agent shall be deemed to
have exercised reasonable care in the custody and preservation of the cash
collateral in its possession if the cash collateral is accorded treatment
substantially equal to that which it accords its own property, and shall not be
liable or responsible for any loss or damage to any of the cash collateral, or
for any diminution in the value thereof, by reason of the act or omission of any
agent or bailee selected by the Administrative Agent in good faith, absent any
gross negligence or willful misconduct by the Administrative Agent. All expenses
and liabilities incurred by the Administrative Agent in connection
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with taking, holding and disposing of any cash collateral (including customary
custody and similar fees with respect to any cash collateral held directly by
the Administrative Agent) shall be paid by the Borrower from time to time upon
demand and presentment of invoices and other documents evidencing such costs and
expenses.
ARTICLE III
Representations and Warranties
The Borrower represents and warrants to each of the Banks that:
SECTION 3.01. Organization; Powers. The Borrower and each of its
Material Domestic Subsidiaries (a) is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization, (b) has
all requisite power and authority to own its property and assets and to carry on
its business as now conducted and as proposed to be conducted, (c) is qualified
to do business in every jurisdiction where such qualification is required,
except where the failure so to qualify would not result in a Material Adverse
Effect, and (d) has the corporate power and authority to execute, deliver and
perform its obligations under each Credit Document to which it is a party and,
in the case of the Borrower, to request the issuance of Letters of Credit and to
reimburse Obligations hereunder.
SECTION 3.02. Authorization. The execution, delivery and performance by
each Credit Party of the Credit Documents to which it is a party and the
extensions of credit to the Borrower hereunder (collectively, the
"Transactions") (a) have been duly authorized by all requisite corporate actions
and (b) will not (i) violate (A) any provision of any Requirement of Law
(including the Margin Regulations) or of the certificate of incorporation or
other constitutive documents or by-laws of the Borrower or any of its
Subsidiaries (B) any order of any Governmental Authority or (C) any material
Contractual Obligation to which the Borrower or any of its Subsidiaries is a
party or by which the Borrower, any of its Subsidiaries or any of their property
is or may be bound, (ii) be in conflict with, result in a breach of or
constitute (alone or with notice or lapse of time or both) a default under any
such material Contractual Obligation or (iii) result in the creation or
imposition of any Lien upon any property or assets of the Borrower or any of its
Subsidiaries (other than pursuant to the Security Documents).
SECTION 3.03. Enforceability. Each Credit Document has been duly
executed and delivered by each Credit Party party thereto and constitutes a
valid and legally binding obligation of each such Credit Party enforceable
against each such Credit Party in accordance with its terms.
SECTION 3.04. Governmental Approvals. No action, consent or approval
of, registration or filing with or any other action by any Governmental
Authority is or will be required in connection with the Transactions, except as
necessary to perfect Liens granted under the Security Documents.
SECTION 3.05. Financial Statements. (a) The Borrower has heretofore
furnished to the Administrative Agent and the Banks copies of its consolidated
financial statements as of and for the fiscal year ended September 30, 2002, as
included in the Borrower's report on Form 10-K dated December 12, 2002, and for
the quarter ended March 31, 2003, as included in the Borrower's report on Form
10-Q dated May 13, 2003. Such financial statements present fairly, in all
material respects, the consolidated financial condition and the results of
operations of the Borrower as of such dates in accordance with GAAP. Neither the
Borrower nor any of its Subsidiaries has any material Guarantee obligations,
contingent liabilities and liabilities for taxes, or any long-term leases or
unusual forward or long-term commitments, including any interest rate or foreign
currency swap or exchange transaction or other obligation in respect
26
of derivatives, that would be required to be reflected in the most recent
financial statements referred to in this paragraph and are not so reflected.
(b) Since September 30, 2002, there has been no material adverse change
in the business, assets, operations, or condition, financial or otherwise, of
the Borrower and its Subsidiaries, taken as a whole. It is understood that a
change in the Borrower Debt Ratings or other credit ratings by any rating agency
shall not, in and of itself, constitute such a material adverse change.
SECTION 3.06. Properties. (a) Each of the Borrower and its Subsidiaries
has good title to, or valid leasehold interests in, all its real and personal
property material to the business of the Borrower and its Subsidiaries, except
for minor defects in title that do not interfere with its ability to conduct its
business as currently conducted or to utilize such properties for their intended
purposes.
(b) Each of the Borrower and its Subsidiaries owns, or is licensed to
use, all trademarks, tradenames, copyrights, patents and other intellectual
property material to the business of the Borrower and its Subsidiaries, and the
use thereof by the Borrower and its Subsidiaries does not infringe upon the
rights of any other Person, except for any such infringements that, individually
or in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect.
SECTION 3.07. Litigation and Environmental Matters. (a) There are no
actions, suits or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of the Borrower, threatened
against or affecting the Borrower or any of its Subsidiaries (i) as to which
there is a reasonable possibility of an adverse determination and that, if
adversely determined, could reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect (except as disclosed in the
financial statements referred to in Section 3.05(a)) or (ii) that involve any
Credit Document or the Transactions.
(b) Except as, individually or in the aggregate, could not reasonably
be expected to result in a Material Adverse Effect, neither the Borrower nor any
of its Subsidiaries (i) has failed to comply with any Environmental Law or to
obtain, maintain or comply with any permit, license or other approval required
under any Environmental Law, (ii) has become subject to any Environmental
Liability, (iii) has received notice of any claim with respect to any
Environmental Liability or (iv) knows of any basis for any Environmental
Liability.
SECTION 3.08. Compliance with Laws and Agreements. Each of the Borrower
and its Subsidiaries is in compliance with all laws, regulations and orders of
any Governmental Authority applicable to it or its property and all indentures,
agreements and other instruments binding upon it or its property, except where
the failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect. No Default has occurred and is
continuing.
SECTION 3.09. Federal Reserve Regulations. Neither the Borrower nor any
of its Subsidiaries is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of purchasing or
carrying Margin Stock.
SECTION 3.10. Investment Company Act; Public Utility Holding Company
Act. Neither the Borrower nor any of its Subsidiaries is (a) an "investment
company" as defined in, or subject to regulation under, the Investment Company
Act of 1940 or (b) a "holding company" as defined in, or subject to regulation
under, the Public Utility Holding Company Act of 1935.
SECTION 3.11. Taxes. Each of the Borrower and its Subsidiaries has
timely filed or caused to be filed all Tax returns and reports required to have
been filed and has paid or caused to be paid
27
all Taxes required to have been paid by it, except (a) any Taxes that are being
contested in good faith by appropriate proceedings and for which the Borrower or
such Subsidiary, as applicable, has set aside on its books adequate reserves or
(b) to the extent that the failure to do so could not reasonably be expected to
result in a Material Adverse Effect.
SECTION 3.12. ERISA. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events for
which liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. The present value of all accumulated
benefit obligations under each Plan (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87) did not, as of the date
of the most recent financial statements reflecting such amounts, exceed the fair
market value of the assets of such Plan.
SECTION 3.13. Labor Matters. Except as, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect: (a) there are no
strikes or other labor disputes against the Borrower or any of its Subsidiaries
pending or, to the knowledge of the Borrower, threatened; (b) hours worked by
and payment made to employees of the Borrower or any of its Subsidiaries have
not been in violation of the Fair Labor Standards Act or any other applicable
Requirement of Law dealing with such matters; and (c) all payments due from
either the Borrower or any of its Subsidiaries on account of employee health and
welfare insurance have been paid or accrued as a liability on the books of the
Borrower or the relevant Subsidiary.
SECTION 3.14. Subsidiaries. As of the Effective Date, (a) Schedule 3.14
sets forth the name and jurisdiction of incorporation of each Material
Subsidiary and, as to each such Subsidiary, the percentage of each class of
Capital Stock directly owned by any Credit Party and (b) there are no
outstanding subscriptions, options, warrants, calls, rights or other agreements
or commitments (other than stock options or rights granted to employees,
directors or consultants and directors' qualifying shares) of any nature
relating to any Capital Stock of any Material Subsidiary, except as created by
the Security Documents.
SECTION 3.15. Use of Letters of Credit. All Letters of Credit shall be
used to support the development of the business of the Borrower and its
Subsidiaries, as engaged in by them as of the Effective Date and reasonable
extensions thereof; provided that Letters of Credit in an aggregate amount not
to exceed $25,000,000 may be used to replace existing letters of credit of
Lucent or any Subsidiary.
SECTION 3.16. No Material Misstatements. No report, financial statement
or other written information furnished by or on behalf of the Borrower to the
Administrative Agent or any Bank pursuant to Section 3.05 or 5.02 hereof
contains as of the Effective Date in the case of Section 3.05, or will contain
as of the date furnished in the case of Section 5.02, any material misstatement
of fact or omits or will omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were or
will be made, not misleading; provided, that the projections and pro forma
financial information contained in the materials referenced above are based upon
good faith estimates and assumptions believed by management of the Borrower to
be reasonable at the time made, it being recognized by the Banks that such
financial information as it relates to future events is not to be viewed as fact
and that actual results during the period or periods covered by such financial
information may differ from the projected results set forth therein by a
material amount.
SECTION 3.17. Security Documents. (a) The Guarantee and Collateral
Agreement is effective to create in favor of the Collateral Agent, for the
benefit of the Secured Parties, a legal, valid and enforceable security interest
in the Collateral described therein and proceeds thereof. In the case of any
Pledged Stock described in the Guarantee and Collateral Agreement that is a
certificated security, when stock certificates representing such Pledged Stock
are delivered to the Collateral Agent, and in the case of
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the other Collateral described in the Guarantee and Collateral Agreement, when
financing statements and other filings and actions contemplated to be made or
taken by the Guarantee and Collateral Agreement are made or taken, the Guarantee
and Collateral Agreement shall constitute to the extent contemplated by the
Guarantee and Collateral Agreement, a fully perfected Lien on, and security
interest in, all right, title and interest of the Credit Parties in such
Collateral and the proceeds thereof, as security for the Obligations (as defined
in the Guarantee and Collateral Agreement), in each case prior and superior in
right to any other Person (except, in the case of Collateral other than Pledged
Stock, Liens permitted by Section 6.02).
(b) Each Mortgage that has been executed and delivered by a Credit
Party is effective to create in favor of the Collateral Agent, for the benefit
of the Secured Parties, a legal, valid and enforceable Lien on the properties
described therein and proceeds thereof, the property description included in
each such Mortgage is complete and correct in all material respects and, when
the Mortgages are filed in the offices specified on Schedule 3.17(b) (or, in the
case of Mortgages delivered after the Effective Date, such filing offices as
shall be notified by the Borrower to the Collateral Agent), each such Mortgage
shall constitute a fully perfected Lien on, and security interest in, all right,
title and interest of the Credit Parties in the Mortgaged Properties and the
proceeds thereof, as security for the Obligations (as defined in the relevant
Mortgage), in each case prior and superior in right to any other Person, except
Liens permitted by Section 6.02. Schedule 1.01B lists each parcel of real
property in the United States owned in fee simple by the Borrower or any
Subsidiary as of the Effective Date that meets the criteria specified on said
Schedule.
(c) The Cash Collateral Agreement that has been executed and delivered
by the Borrower is effective to establish "control" within the meaning of
Article 8 or Article 9, as the case may be, of the Uniform Commercial Code by
the Collateral Agent over the Cash Collateral Account.
(d) Upon the execution and delivery of each Control Agreement and the
agreement by each securities intermediary that it will comply with entitlement
orders of the Collateral Agent without further consent of the Borrower, each
such Control Agreement will be effective to establish "control" within the
meaning of Article 8 or Article 9, as the case may be, of the Uniform Commercial
Code by the Collateral Agent over the account subject to such Control Agreement.
ARTICLE IV
Conditions
SECTION 4.01. Effective Date. The obligations of the Banks hereunder
are subject to the satisfaction of the following conditions:
(a) Agreements. The Administrative Agent shall have received (i) this
Agreement, executed and delivered by the Administrative Agent, the Borrower and
the Banks parties thereto, (ii) the ESD Agreement, executed and delivered by the
Administrative Agent, the Borrower and the banks parties thereto, (iii) the
Guarantee and Collateral Agreement, executed and delivered by the Borrower and
each Subsidiary Guarantor, (iv) an Acknowledgement and Consent in the form
attached to the Guarantee and Collateral Agreement, executed and delivered by
each Issuer (as defined therein), if any, that is not a Credit Party and (v) the
Collateral Sharing Agreement, executed and delivered by the Collateral Agent and
the Borrower.
(b) Approvals. All governmental and third party approvals necessary in
connection with the Transactions shall have been obtained and be in full force
and effect.
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(c) Lien Searches. The Administrative Agent shall have received the
results of a recent Lien search in such jurisdictions where assets of the Credit
Parties are located as shall be requested by the Administrative Agent, and such
search shall reveal no Liens on any of the assets of the Credit Parties except
for Liens permitted by Section 6.02 or discharged on or prior to the Effective
Date pursuant to documentation satisfactory to the Administrative Agent.
(d) Fees. The Banks and the Administrative Agent shall have received
all fees required to be paid, and all expenses for which invoices have been
presented (including the reasonable fees and expenses of legal counsel), on or
before the Effective Date.
(e) Closing Certificate. The Administrative Agent shall have received a
certificate of each Credit Party, dated the Effective Date, substantially in the
form of Exhibit E, with appropriate insertions and attachments.
(f) Legal Opinions. The Administrative Agent shall have received the
following executed legal opinions:
(i) the legal opinion of Sidley Xxxxxx Xxxxx & Xxxx LLP,
counsel to the Borrower, substantially in the form of Exhibit F-1; and
(ii) the legal opinion of in-house counsel to the Borrower,
substantially in the form of Exhibit F-2.
Each such legal opinion shall cover such other matters incident to the
Transactions as the Administrative Agent may reasonably require.
(g) Cash Collateral Agreement. With respect to the Cash Collateral
Account, the Collateral Agent shall have received a cash collateral agreement,
duly executed by the Borrower, in form and substance reasonably satisfactory to
the Collateral Agent, which agreement shall grant the Collateral Agent exclusive
dominion and control over the Cash Collateral Account (the "Cash Collateral
Agreement").
(h) Pledged Stock, Stock Powers, Pledged Notes. The Collateral Agent
shall have received, to the extent required by the Guarantee and Collateral
Agreement, (i) the certificates representing the shares of Capital Stock pledged
pursuant to the Guarantee and Collateral Agreement, together with an undated
stock power for each such certificate executed in blank by a duly authorized
officer of the pledgor thereof and (ii) each promissory note (if any) pledged to
the Collateral Agent pursuant to the Guarantee and Collateral Agreement endorsed
(without recourse) in blank (or accompanied by an executed transfer form in
blank) by the pledgor thereof.
(i) Filing, Registrations and Recordings. Each document (including any
Uniform Commercial Code financing statement) required by the Guarantee and
Collateral Agreement or under law or reasonably requested by the Administrative
Agent to be filed, registered or recorded in order to create in favor of the
Collateral Agent, for the benefit of the Secured Parties, a perfected Lien on
the Collateral described therein, prior and superior in right to any other
Person (other than with respect to Liens expressly permitted by Section 6.02),
shall be in proper form for filing, registration or recordation.
(j) Insurance. The Collateral Agent shall have received insurance
certificates satisfying the requirements of Section 5.2 of the Guarantee and
Collateral Agreement.
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SECTION 4.02. Each L/C Event. The obligation of any Issuing Bank to
issue, amend or renew any Letter of Credit (each, an "L/C Event"), is subject to
the satisfaction of the following conditions:
(a) The representations and warranties of the Credit Parties set forth
in the Credit Documents shall be true and correct in all material respects on
and as of the date of such L/C Event with the same effect as though made on and
as of such date, except to the extent such representations and warranties
expressly relate to an earlier date, in which case such representations and
warranties shall be true and correct as of such earlier date.
(b) The Borrower shall be in compliance with all the terms and
provisions set forth in the Credit Documents in all material respects (including
the financial covenants set forth below), and at the time of and immediately
after such L/C Event, as applicable, no Event of Default, Default or Cash
Collateral Event shall have occurred and be continuing.
(c) In accordance with Section 2.16, cash collateral in an amount equal
to at least 20% of the Total L/C Exposure then outstanding after giving effect
to such L/C Event shall be on deposit in the Cash Collateral Account.
Each L/C Event shall be deemed to constitute a representation and warranty by
the Borrower on the date of such L/C Event as to the matters specified in this
Section 4.02.
ARTICLE V
Affirmative Covenants
So long as this Agreement shall remain in effect, the Borrower
covenants and agrees with each Bank and the Administrative Agent that until the
Commitments have expired or been terminated, all Letters of Credit shall have
expired or terminated, all L/C Disbursements shall have been reimbursed, and all
fees and other amounts payable hereunder shall have been paid in full, unless
the Required L/C Banks shall otherwise consent in writing:
SECTION 5.01. Existence. The Borrower and each of its Material Domestic
Subsidiaries will do or cause to be done all things necessary to preserve, renew
and keep in full force and effect its legal existence, except as otherwise
expressly permitted under Section 6.03 or, in the case of Subsidiaries, to the
extent necessary to facilitate intercompany reorganizations that do not
materially adversely affect the interests of the Banks.
SECTION 5.02. Financial Statements, Reports, etc. The Borrower will
furnish to the Administrative Agent and each Bank:
(a) no later than the date on which such statements are required to be
filed with the SEC, its consolidated balance sheets and the related statements
of income and cash flows, showing its consolidated financial condition as of the
close of such fiscal year and the consolidated results of its operations during
such year, all audited by PricewaterhouseCoopers LLC or other independent
auditors of recognized national standing and accompanied by an opinion of such
auditors to the effect that such consolidated financial statements fairly
present its financial condition and results of operations on a consolidated
basis in accordance with GAAP consistently applied, except as noted therein;
(b) no later than the date on which such statements are required to be
filed with the SEC, its consolidated balance sheets and related statements of
income and cash flows for each of the first
31
three fiscal quarters of each fiscal year, showing its consolidated financial
condition as of the close of such fiscal quarter and the consolidated results of
its operations during such fiscal quarter and the then elapsed portion of such
fiscal year, all certified by one of its Financial Officers as fairly presenting
its financial condition and results of operations on a consolidated basis in
accordance with GAAP consistently applied, subject to normal recurring accruals,
except as noted therein;
(c) concurrently with any delivery of financial statements under
paragraph (a) or (b) above, a certificate of a Financial Officer certifying that
no Event of Default, Default or Cash Collateral Event has occurred (including
pursuant to the financial covenants contained in Sections 7.01 and 7.02, as
demonstrated in reasonable detail) or, if such an Event of Default or Default or
Cash Collateral Event has occurred, specifying the nature and extent thereof and
any corrective action taken or proposed to be taken with respect thereto;
(d) promptly after the same become publicly available, copies of all
reports filed by it with the SEC (other than reports on Form 8-K which are filed
solely for the purpose of filing exhibits), or any Governmental Authority
succeeding to any of or all the functions of the SEC, or distributed to its
shareholders, as the case may be;
(e) as soon as available, and in any event no later than the fifteenth
day of each month, a report substantially in the form of Exhibit G providing (i)
for each account listed on Schedule 5.12, the institution where each such
account is held, the bank balance of each such account as of the last day of the
previous month and the change in the bank balance of each such account since the
last report provided pursuant to this paragraph (e), (ii) information as to all
cash held by the Borrower and its Subsidiaries as of the end of the previous
month, including a designation of whether such cash is restricted or freely
available, the amount of available cash maintained in domestic and foreign
accounts, and the amount of such cash held in accounts not listed on Schedule
5.12, (iii) a list of Permitted Investments held by the Borrower or any
Subsidiary on the last day of the previous month, the type of each such
Permitted Investment, the value of such Permitted Investment on the last day of
the previous month and the change in the value of such Permitted Investment
since the last report provided pursuant to this paragraph (e); and (iv) a
calculation demonstrating compliance with Section 6.01(b);
(f) as soon as available, and in any event no later than 30 days after
the end of each fiscal quarter (i) a list of each item of External Sharing Debt
(other than External Sharing Debt described in clause (f) of the defined term
"External Sharing Debt") outstanding on the last Business Day of such quarter
including, where applicable, the outstanding amount thereof, (ii) a list of the
Material Subsidiaries in existence on the last Business Day of such quarter and
(iii) in the case of each fiscal quarter ending on or after September 30, 2003,
updated versions of Schedules 4 and 6 to the Guarantee and Collateral Agreement;
and
(g) promptly following any request therefor, such other information
regarding the operations, business affairs and financial condition of the
Borrower or any Subsidiary, or compliance with the terms of this Agreement, as
the Administrative Agent or any Bank (through the Administrative Agent) may
reasonably request.
Reports and financial statements required to be delivered pursuant to paragraphs
(a), (b) and (d) of this Section 5.02 shall be deemed to have been delivered on
the date on which the Borrower posts such reports, or reports containing such
financial statements, on the Borrower's website on the Internet at
xxx.xxxxxx.xxx or when such reports, or reports containing such financial
statements, are posted on the SEC's website at xxx.xxx.xxx; provided that the
Borrower shall deliver paper copies of the reports and financial statements
referred to in paragraphs (a), (b) and (d) of this Section 5.02 to the
Administrative
32
Agent or any Bank who requests the Borrower to deliver such paper copies until
written notice to cease delivering paper copies is given by the Administrative
Agent or such Bank.
SECTION 5.03. Maintaining Records. The Borrower will record, summarize
and report all financial information in accordance with GAAP.
SECTION 5.04. Notices of Material Events. The Borrower will furnish to
the Administrative Agent and each Bank prompt written notice, of the following:
(a) the occurrence of any Default or Cash Collateral Event;
(b) any change in any Borrower Debt Rating;
(c) the filing or commencement of any action, suit or proceeding by or
before any arbitrator or Governmental Authority against or affecting the
Borrower or any Affiliate thereof that has a reasonable possibility of being
adversely determined and, if adversely determined, could reasonably be expected
to result in a Material Adverse Effect;
(d) the occurrence of any ERISA Event that, alone or together with any
other ERISA Events that have occurred, could reasonably be expected to result in
liability of the Borrower and its Subsidiaries in an aggregate amount exceeding
$100,000,000; and
(e) any other development that results in, or could reasonably be
expected to result in, a Material Adverse Effect.
Each notice delivered under this Section (other than clause (b) above)
shall be accompanied by a statement of a Financial Officer or other executive
officer of the Borrower setting forth the details of the event or development
requiring such notice and any action taken or proposed to be taken with respect
thereto.
SECTION 5.05. Existence; Conduct of Business. The Borrower will, and
will cause each of its Subsidiaries to, do or cause to be done all things
necessary to preserve, renew and keep in full force and effect its legal
existence and the rights, licenses, permits, privileges and franchises material
to the conduct of its business; provided that the foregoing shall not prohibit
any merger, consolidation, liquidation or dissolution permitted under Section
6.03 or, in the case of Subsidiaries, undertaken in connection with Investments
structured as mergers or consolidations or to facilitate intercompany
reorganizations that do not materially adversely affect the interests of the
Banks.
SECTION 5.06. Payment of Obligations. The Borrower will, and will cause
each of its Subsidiaries to, pay its obligations, including Tax liabilities,
that, if not paid, could result in a Material Adverse Effect before the same
shall become delinquent or in default, except where (a) the validity or amount
thereof is being contested in good faith by appropriate proceedings, (b) the
Borrower or such Subsidiary has set aside on its books adequate reserves with
respect thereto in accordance with GAAP and (c) the failure to make payment
pending such contest could not reasonably be expected to result in a Material
Adverse Effect.
SECTION 5.07. Maintenance of Properties; Insurance. The Borrower will,
and will cause each of its Material Subsidiaries to, (a) keep and maintain all
property material to the conduct of the business of the Borrower and its
Subsidiaries in good working order and condition, ordinary wear and tear
excepted, and (b) maintain, with financially sound and reputable insurance
companies, insurance in such
33
amounts and against such risks as are customarily maintained by companies
engaged in the same or similar businesses operating in the same or similar
locations.
SECTION 5.08. Inspection Rights. The Borrower will, and will cause each
of its Subsidiaries to, permit any representatives designated by the
Administrative Agent or any Bank, upon reasonable prior notice, to visit and
inspect its properties, to examine and make extracts from its books and records,
and to discuss its affairs, finances and condition with its officers and (after
reasonable prior notice to the Borrower and subject to the Borrower's right to
participate in such discussions) independent accountants, all at such reasonable
times and as often as reasonably requested.
SECTION 5.09. Compliance. The Borrower will, and will cause each of its
Subsidiaries to, comply with all Requirements of Law (including Environmental
Laws) and Contractual Obligations applicable to it or its property, except where
the failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.
SECTION 5.10. Use of Letters of Credit. The Borrower will use the
Letters of Credit only for the purposes set forth in Section 3.15.
SECTION 5.11. Additional Subsidiary Guarantors and Collateral. (a) With
respect to any property acquired after the Effective Date by the Borrower or any
Subsidiary Guarantor (other than (x) any real property or Capital Stock or (y)
any property subject to a Lien expressly permitted by Section 6.02) as to which
the Collateral Agent for the benefit of the Secured Parties, does not have a
perfected Lien, the Borrower or such Subsidiary Guarantor, as applicable, will
promptly (i) execute and deliver such amendments to the Guarantee and Collateral
Agreement or such other documents as the Administrative Agent deems necessary or
advisable to grant to the Collateral Agent for the benefit of the Secured
Parties, a security interest in such property and (ii) to the extent required by
the Guarantee and Collateral Agreement, take all actions necessary or advisable
to grant to the Collateral Agent, for the benefit of the Secured Parties, a
security interest in such property of the type contemplated by the Guarantee and
Collateral Agreement, including the filing of Uniform Commercial Code financing
statements in such jurisdictions as may be required by the Guarantee and
Collateral Agreement or by law or as may be requested by the Administrative
Agent.
(b) With respect to any fee interest in any real property meeting the
criteria specified in Schedule 1.01B acquired after the Effective Date by the
Borrower or any Subsidiary Guarantor (other than any such real property subject
to a Lien expressly permitted by Section 6.02), promptly (i) execute and deliver
a Mortgage, in favor of the Collateral Agent, for the benefit of the Secured
Parties, covering such real property and (ii) if requested by the Administrative
Agent, deliver to the Administrative Agent title insurance policies, flood
insurance and customary legal opinions relating to such Mortgage, which opinions
shall be in form and substance, and from counsel, reasonably satisfactory to the
Administrative Agent.
(c) With respect to any Domestic Subsidiary that becomes a Material
Subsidiary after the Effective Date, promptly (i) execute and deliver such
amendments to the Guarantee and Collateral Agreement as the Administrative Agent
deems necessary or advisable to grant to the Collateral Agent, for the benefit
of the Secured Parties, a perfected first priority security interest in the
Capital Stock of such new Subsidiary that is owned by any Credit Party, (ii)
deliver to the Collateral Agent the certificates representing such Capital
Stock, together with undated stock powers, in blank, executed and delivered by a
duly authorized officer of the relevant Credit Party, (iii) in the case of any
Wholly Owned Subsidiary (other than any Receivables Subsidiary or Real Estate
Subsidiary), cause such new Subsidiary (A) to become a party to the Guarantee
and Collateral Agreement, (B) to the extent required by the Guarantee and
Collateral Agreement, to take such actions necessary or advisable to grant to
the Collateral
34
Agent for the benefit of the Secured Parties a security interest in the
Collateral described in the Guarantee and Collateral Agreement with respect to
such new Subsidiary of the type contemplated by the Guarantee and Collateral
Agreement, including the filing of Uniform Commercial Code financing statements
in such jurisdictions as may be required by the Guarantee and Collateral
Agreement or by law or as may be requested by the Administrative Agent and (C)
to deliver to the Administrative Agent a certificate of such Subsidiary,
substantially in the form of Exhibit E, with appropriate insertions and
attachments, and (iv) if requested by the Administrative Agent, deliver to the
Administrative Agent customary legal opinions relating to the matters described
above, which opinions shall be in form and substance, and from counsel,
reasonably satisfactory to the Administrative Agent.
(d) With respect to any direct Subsidiary of any Credit Party that
becomes a Material Foreign Subsidiary after the Effective Date, promptly (i)
execute and deliver to the Administrative Agent such amendments to the Guarantee
and Collateral Agreement as the Administrative Agent deems necessary or
advisable to grant to the Collateral Agent, for the benefit of the Secured
Parties, a perfected security interest in the Capital Stock of such new
Subsidiary that is owned by any Credit Party having the priority contemplated by
the Guarantee and Collateral Agreement (provided that in no event shall more
than 65% of the total outstanding voting Capital Stock of any such new
Subsidiary be required to be so pledged), (ii) deliver to the Collateral Agent
the certificates representing such Capital Stock, together with undated stock
powers, in blank, executed and delivered by a duly authorized officer of the
relevant Credit Party, and take such other action as may be necessary or, in the
opinion of the Administrative Agent, desirable to perfect the Collateral Agent's
security interest therein, and (iii) if requested by the Administrative Agent,
deliver to the Administrative Agent legal opinions relating to the matters
described above, which opinions shall be in form and substance, and from
counsel, reasonably satisfactory to the Administrative Agent.
SECTION 5.12. Post-Closing Collateral Matters. (a) Within 45 days after
the Effective Date, the Borrower shall cause to be provided to the Collateral
Agent (a) a Mortgage or an amendment to any existing Mortgage with respect to
each Mortgaged Property, executed and delivered by a duly authorized officer of
each party thereto and (b) if requested by the Administrative Agent, deliver to
the Administrative Agent title insurance policies (or in the case of any
existing Mortgages, an endorsement), flood insurance and customary legal
opinions relating to such Mortgages, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.
(b) Within 45 days after the Effective Date, the Borrower shall cause
to be provided to the Collateral Agent a control agreement with respect to each
of the deposit or custody accounts listed on Schedule 5.12 (other than such
accounts as do not in the aggregate hold more than $50,000,000 in cash and
Permitted Investments or do not individually hold more than $5,000,000 in cash
and Permitted Investments), duly executed by the Borrower or its relevant
Subsidiary and the applicable bank or other financial institution at which each
such account is maintained, in form and substance reasonably satisfactory to the
Administrative Agent (each a "Control Agreement"), which agreement shall grant
the Collateral Agent exclusive dominion and control over such accounts and
entitle the Collateral Agent to block any withdrawal of assets therefrom upon
the occurrence and during the continuance of an Event of Default.
35
ARTICLE VI
Negative Covenants
So long as this Agreement shall remain in effect, the Borrower
covenants and agrees with each Bank and the Administrative Agent that until the
Commitments have expired or been terminated, all Letters of Credit shall have
expired or terminated, all L/C Disbursements shall have been reimbursed, and all
fees and other amounts payable hereunder shall have been paid in full, unless
the Required L/C Banks shall otherwise consent in writing:
SECTION 6.01. Indebtedness.
(a) The Borrower will not, and will not permit any Subsidiary (other
than any Excluded Subsidiary) to, create, incur, assume or permit to exist
Indebtedness or other obligations of the Borrower or any Subsidiary incurred
after the Effective Date that is secured by a Lien on cash or Permitted
Investments ("Cash Collateralized Debt") in an aggregate amount exceeding
$300,000,000 at any time outstanding; provided that Cash Collateralized Debt
shall not include (i) Indebtedness incurred hereunder and under the ESD
Agreement (and any extensions thereof), (ii) obligations not to exceed an
aggregate amount of $250,000,000 that are currently secured by existing
restricted cash balances (and any renewals thereof to the extent the amount so
renewed is not increased) and (iii) obligations secured by pledges and deposits
made in the ordinary course of business in compliance with workers'
compensation, unemployment insurance, officers' and directors' insurance and
other social security laws or regulations.
(b) The Borrower will not permit, at any time, the aggregate amount of
(i) the Commitments hereunder, (ii) External Sharing Debt outstanding under the
ESD Agreement, (iii) Cash Collateralized Debt, (iv) External Sharing Debt not
subject to the ESD Agreement and (v) Indebtedness secured by a Lien on Excluded
Foreign Collateral, to exceed $1,500,000,000; provided that (A) for purposes of
this paragraph (b) only, the amount of External Sharing Debt described in clause
(f) of the term "External Sharing Debt" shall be deemed to be $0, (B) for
purposes of this paragraph (b) only, the amount of obligations under the
Participation Agreement (described in clause (d) of the term "External Sharing
Debt") shall be equal to the then outstanding principal amount of the Trust
Notes (as defined in the Participation Agreement), calculated in the manner set
forth in Schedule 7 to the Guarantee and Collateral Agreement and (C)
such sum shall not include any financing provided by any governmental export
credit agency so long as such financing is not secured by the Collateral (it
being understood that (1) any such financing may be secured by the equipment
being financed and (2) to the extent any portion of such financing is secured
by the Collateral, such portion of the financing shall be included in the
calculation required pursuant to this paragraph (b)).
SECTION 6.02. Liens. The Borrower will not, and will not permit any
Domestic Subsidiary (other than any Excluded Subsidiary) to, create, incur,
assume or permit to exist any Lien on any property or asset now owned or
hereafter acquired by it, or assign or sell any income or revenues (including
accounts receivable) or rights in respect of any thereof, except:
(a) Permitted Encumbrances;
(b) any judgment Lien in respect of a judgment for the payment of
money, provided that at no time shall the aggregate liability in respect of all
outstanding judgment Liens that have been outstanding for more than 60
consecutive days exceed $100,000,000;
(c) any Lien on any property or asset of the Borrower or any Subsidiary
existing on the Effective Date and (in the case of any such Liens on any
property owned by a Credit Party as of the Effective Date) set forth in Schedule
6.02; provided that (i) such Lien shall not apply to any other property or asset
of the Borrower or any Subsidiary and (ii) such Lien shall secure only those
obligations which it secures on the Effective Date and extensions, renewals and
replacements thereof that do not increase the outstanding principal amount
thereof;
36
(d) any Lien existing on any property or asset prior to the acquisition
thereof by the Borrower or any Subsidiary, or existing on any property or asset
of any Person that becomes a Subsidiary after the Effective Date prior to the
time such Person becomes a Subsidiary; provided that (i) such Lien is not
created in contemplation of or in connection with such acquisition or such
Person becoming a Subsidiary, as the case may be, (ii) such Lien shall not apply
to any other property or assets of the Borrower or any Subsidiary and (iii) such
Lien shall secure only those obligations which it secures on the date of such
acquisition or the date such Person becomes a Subsidiary, as the case may be and
extensions, renewals and replacements thereof that do not increase the
outstanding principal amount thereof,
(e) Liens on fixed or capital assets acquired, constructed or improved
by the Borrower or any Subsidiary; provided that (i) such security interests
secure Indebtedness financing such acquisition, construction or improvement,
(ii) such security interests and the Indebtedness secured thereby are incurred
prior to or within 90 days after such acquisition or the completion of such
construction or improvement and (iii) such security interests shall not apply to
any other property or assets of the Borrower or any Subsidiary;
(f) Liens securing Indebtedness and other obligations secured as and to
the extent permitted by Section 6.01;
(g) Liens incurred pursuant to sale-leaseback transactions or CMO
Transactions that are arms'-length transactions;
(h) Liens incurred pursuant to receivables securitizations and related
assignments and sales of any income or revenues (including receivables),
including Liens on the assets of any Receivables Subsidiary created pursuant to
any receivables securitization and Liens incurred by the Borrower and its other
Subsidiaries on receivables to secure obligations owing by them in respect of
any such receivables securitization, in each case to the extent solely related
to Excluded Foreign Collateral or assets that do not constitute Collateral;
(i) Liens created by the Security Documents; and
(j) the assignment or sale from time to time by the Borrower and its
Domestic Subsidiaries of any accounts receivable, provided that such assignments
or sales are made in connection with the compromise or collection thereof.
SECTION 6.03. Fundamental Changes. The Borrower will not merge into or
consolidate with any other Person, or permit any other Person (other than a
Subsidiary of the Borrower, so long as (a) the Borrower is the survivor thereof
and (b) no Default or Event of Default shall be in existence after giving effect
thereto) to merge into or consolidate with it, or sell, transfer, lease or
otherwise dispose of (in one transaction or in a series of transactions) all or
substantially all of the assets of the Borrower and its Subsidiaries, or
liquidate or dissolve.
SECTION 6.04. Investments, Loans, Advances, Guarantees and
Acquisitions. The Borrower will not, and will not permit any of its Subsidiaries
to, purchase, hold or acquire (including pursuant to any merger with any Person
that was not a wholly owned Subsidiary prior to such merger or pursuant to
consideration received in connection with a Disposition of assets) any capital
stock, evidences of indebtedness or other securities (including any option,
warrant or other right to acquire any of the foregoing) of, make or permit to
exist any loans or advances to, Guarantee any obligations of, or make or permit
to exist any investment or any other interest in, any other Person, or purchase
or otherwise acquire (in one transaction or a series of transactions) any assets
of any other Person constituting a business unit (collectively, "Investments"),
except:
37
(a) Permitted Investments;
(b) Investments in existence on the Effective Date;
(c) intercompany Investments made in the ordinary course of business by
the Borrower or any Subsidiary in the Borrower or any Subsidiary;
(d) warrants received from, and minority equity investments in,
customers of the Borrower and its Subsidiaries so long as no cash is expended by
the Borrower or any of its Subsidiaries to purchase any of the foregoing;
(e) Investments received in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and disputes with,
customers and suppliers of the Borrower and its Subsidiaries;
(f) loans and advances to officers and employees of the Borrower and
its Subsidiaries in the ordinary course of business;
(g) Investments funded through the issuance of common stock of the
Borrower;
(h) Investments comprised of capital contributions, loans or deferred
purchase price (whether in the form of cash, a note or other assets) to any
Receivables Subsidiary or Real Estate Subsidiary;
(i) in addition to Investments otherwise expressly permitted by this
Section, Investments by the Borrower or any of its Subsidiaries in an aggregate
amount (valued at cost) not to exceed $500,000,000 during the term of this
Agreement, provided, that for the purpose of determining at any time the
utilization of such amount by Investments constituting Guarantees, the amount of
utilization shall equal the sum of the amount (determined in accordance with the
definition of "Guarantee") of then outstanding Guarantees plus the amount
actually funded after the Effective Date in connection with Guarantees made
pursuant to this paragraph; and
(j) Investments received as consideration in connection with any
Disposition of property, provided that (i) the aggregate value of Investments so
received in connection with any such Disposition shall not exceed 25% of the
total consideration (or 100% of the total consideration in the case of a
Disposition for total consideration of $25,000,000 or less) received in
connection therewith and (ii) such Investments shall become Collateral to the
extent required by Section 5.11.
SECTION 6.05. Hedging Agreements. The Borrower will not, and will not
permit any of its Subsidiaries to, enter into any Hedging Agreement, other than
Hedging Agreements entered into in the ordinary course of business to hedge or
mitigate risks to which the Borrower or any Subsidiary is exposed in the conduct
of its business or the management of its liabilities.
SECTION 6.06. Restricted Payments. The Borrower will not, and will not
permit any of its Subsidiaries to, declare or make, or agree to pay or make,
directly or indirectly, any Restricted Payment, except (a) each of the Borrower
and its Subsidiaries may declare and pay dividends with respect to its Capital
Stock payable solely in additional shares of the same class of Capital Stock,
(b) Subsidiaries may declare and pay dividends ratably with respect to their
Capital Stock and may make other Restricted Payments to the Borrower or any
other Subsidiary, (c) the Borrower may make Restricted Payments pursuant to and
in accordance with stock option or rights plans or other benefit plans for
management, employees, directors or consultants of the Borrower and its
Subsidiaries, (d) the Borrower may declare
38
and pay dividends on the common stock of the Borrower made in the ordinary
course of business at a rate per share not to exceed the rate most recently
utilized prior to the Effective Date so long as, at the time of declaration of
such dividend, (i) no Event of Default shall be in existence and (ii) either (A)
the Borrower has Borrower Debt Ratings of BBB or better from S&P and Baa2 or
better from Xxxxx'x, in each case on stable watch or the equivalent or (B)
Consolidated Operating Income shall have equaled at least $1,800,000,000 for the
most recent period of four consecutive fiscal quarters for which the relevant
financial information is available (as certified by the Borrower to the
Administrative Agent), (e) the Borrower may pay cash dividends on preferred
Capital Stock of the Borrower issued in capital markets transactions to the
extent provided to be made in cash by the terms thereof so long as, before such
payment and after giving effect thereto, no Event of Default shall be in
existence, (f) the Borrower may exchange the Redeemable Convertible Preferred
Stock for Convertible Subordinated Debentures as provided in the Certificate of
Designations, (g) the issuer of the Trust Preferred Securities may distribute
the Convertible Subordinated Debentures as described in the Trust Preferred
Offering Memorandum, (h) in connection with the conversion of any Redeemable
Convertible Preferred Stock, Trust Preferred Securities or Convertible
Subordinated Debentures into common stock of the Borrower pursuant to the terms
thereof, the Borrower may pay cash instead of issuing "fractional shares" of its
common stock and (i) the Borrower may make any payment or repurchase permitted
to be made under Section 6.08(b) if, after giving effect to such payment, the
Borrower would be in compliance with the financial covenant set forth in Section
7.01.
SECTION 6.07. Synthetic Purchase Agreements. The Borrower will not, and
will not permit any Subsidiary to, enter into or be party to, or make any
payment under, any Synthetic Purchase Agreement.
SECTION 6.08. Limitation on Payments of Certain Debt Instruments. The
Borrower will not, and will not permit any Subsidiary to, (a) make or offer to
make any optional or voluntary payment, prepayment, repurchase or redemption of
or otherwise optionally or voluntarily defease or segregate funds with respect
to any Indebtedness listed on Schedule 6.08(a), or (b) make any payment in
connection with any "put" of its Redeemable Convertible Preferred Stock or any
voluntary or involuntary repurchase of its Redeemable Convertible Preferred
Stock or the Trust Preferred Securities in cash, if, in each case, after giving
effect to such repurchase, redemption or payment, the Borrower would be in
breach of the financial covenant set forth in Section 7.01.
ARTICLE VII
Financial Covenants
The Borrower agrees with each Bank and the Administrative Agent that
until the Commitments have expired or terminated, all Letters of Credit shall
have expired or terminated, all L/C Disbursements shall have been reimbursed or
cash collateralized, and all fees and other amounts payable hereunder shall have
been paid in full:
SECTION 7.01. Minimum Cash. The Borrower will not permit the amount of
unrestricted cash and Permitted Investments ("Available Cash") held by the
Borrower and its Subsidiaries at any time to be less than $2,000,000,000;
provided that at least $1,100,000,000 of such Available Cash shall be maintained
in accounts of the Borrower and the Subsidiary Guarantors listed on Schedule
5.12 that are located in the United States and will, pursuant to Section
5.12(b), be subject to a Control Agreement.
39
SECTION 7.02. Minimum Operating Income. The Borrower will not permit
Consolidated Operating Income for any period of two consecutive fiscal quarters
ending at the end of the fiscal quarters set forth below (other than the fiscal
quarter ending June 30, 2003, which shall be measured for the fiscal quarter
ending on such date) to be less than the amount set forth opposite such fiscal
quarter below:
FISCAL QUARTER
ENDING ON OR ABOUT AMOUNT
------------------ ------------
June 30, 2003 $ 23,000,000
September 30, 2003 $191,000,000
December 31, 2003 $290,000,000
March 31, 2004 $327,000,000
June 30, 2004 $364,000,000
September 30, 2004 $318,000,000
December 31, 2004 $275,000,000
March 31, 2005 $316,000,000
June 30, 2005 $356,000,000
September 30, 2005 $312,000,000
SECTION 7.03. Cash Collateral Event. Any failure by the Borrower to
comply with the financial covenants contained in Sections 7.01 and 7.02 shall
constitute a "Cash Collateral Event", upon the occurrence of which (a) all
outstanding Letters of Credit shall be immediately and fully cash collateralized
in accordance with Section 2.16 and (b) the Administrative Agent may, and at the
request of the Required L/C Banks shall, by notice to the Borrower, terminate
the Commitments, and thereupon the Commitments shall terminate immediately.
ARTICLE VIII
Events of Default
In case of the happening of any of the following events (each an "Event
of Default"):
(a) the Borrower shall fail to pay reimbursement obligations in respect
of any L/C Disbursement or L/C Disbursements in an aggregate amount in excess of
$1,000,000 when and as the same shall become due and payable, whether at the due
date thereof or at a date fixed for prepayment thereof or otherwise;
(b) the Borrower shall fail to pay any fee or any other amount (other
than an amount referred to in clause (a) of this Article) payable under this
Agreement, when and as the same shall become due and payable, and such failure
shall continue unremedied for a period of three Business Days;
(c) any representation or warranty made or deemed made by or on behalf
of any Credit Party in or in connection with any Credit Document or any
amendment or modification hereof or waiver hereunder, or in any report,
certificate, financial statement or other document furnished pursuant to or in
connection with any Credit Document or any amendment or modification hereof or
waiver hereunder, shall prove to have been incorrect in any material respect
when made or deemed made;
(d) the Borrower shall fail to observe or perform any covenant,
condition or agreement contained in Section 2.16, Section 5.02(e), Section 5.05
(with respect to the Borrower's existence), Section 5.10, Section 5.12(b) or
Article VI;
40
(e) the Borrower shall fail to observe or perform any covenant,
condition or agreement contained in this Agreement (other than those specified
in clause (a), (b) or (d) of this Article or Section 7.01 or 7.02), and such
failure shall continue unremedied for a period of 30 days after notice thereof
from the Administrative Agent to the Borrower (which notice will be given at the
request of the Required L/C Banks);
(f) the Borrower or any Subsidiary shall fail to make any payment
(whether of principal or interest and regardless of amount) in respect of any
Material Indebtedness, when and as the same shall become due and payable;
(g) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that enables or
permits (with or without the giving of notice, the lapse of time or both) the
holder or holders of any Material Indebtedness or any trustee or agent on its or
their behalf to cause any Material Indebtedness to become due, or to require the
prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled
maturity; provided that this clause (g) shall not apply to secured Indebtedness
that becomes due as a result of the voluntary sale or transfer of the property
or assets securing such Indebtedness;
(h) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other relief
in respect of the Borrower or any Subsidiary or its debts, or of a substantial
part of its assets, under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect or (ii) the appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar official
for the Borrower or any Subsidiary or for a substantial part of its assets, and,
in any such case, such proceeding or petition shall continue undismissed for 60
days or an order or decree approving or ordering any of the foregoing shall be
entered;
(i) the Borrower or any Subsidiary shall (i) voluntarily commence any
proceeding or file any petition seeking liquidation, reorganization or other
relief under any Federal, state or foreign bankruptcy, insolvency, receivership
or similar law now or hereafter in effect, (ii) consent to the institution of,
or fail to contest in a timely and appropriate manner, any proceeding or
petition described in clause (h) of this Article, (iii) apply for or consent to
the appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for the Borrower or any Subsidiary or for a substantial part of
its assets, (iv) file an answer admitting the material allegations of a petition
filed against it in any such proceeding, (v) make a general assignment for the
benefit of creditors or (vi) take any action for the purpose of effecting any of
the foregoing;
(j) the Borrower or any Subsidiary shall become unable, or admit in
writing its inability, or fail generally to pay its debts as they become due;
(k) one or more judgments for the payment of money in an aggregate
amount in excess of $100,000,000 shall be rendered against the Borrower, any
Subsidiary or any combination thereof and the same shall remain undischarged for
a period of 30 consecutive days during which execution shall not be effectively
stayed, or any action shall be legally taken by a judgment creditor to attach or
levy upon any assets of the Borrower or any Subsidiary to enforce any such
judgment;
(l) an ERISA Event shall have occurred that, in the opinion of the
Required L/C Banks, when taken together with all other ERISA Events that have
occurred, could reasonably be expected to result in a Material Adverse Effect;
or
(m) (i) the Collateral Sharing Agreement or any of the Security
Documents shall cease, for any reason, to be in full force and effect, or any
Credit Party or any Affiliate of any Credit Party
41
shall so assert, or any Lien created by any of the Security Documents shall
cease to be enforceable and of the same effect and priority purported to be
created thereby (except (A) as permitted by the applicable Security Document or
Section 10.13 or (B) by reason of the failure of the Collateral Agent to
maintain possession of any instruments delivered to it or to file or record any
documents delivered to it for filing or recording) or (ii) the guarantee
contained in Section 2 of the Guarantee and Collateral Agreement shall cease,
for any reason, to be in full force and effect or any Credit Party or any
Affiliate of any Credit Party shall so assert; or
(n) a Change in Control shall occur;
then, and in every such event (other than an event with respect to the Borrower
described in paragraphs (h) or (i) above), and at any time thereafter during the
continuance of such event, the Administrative Agent may, and at the request of
the Required L/C Banks shall, by notice to the Borrower, take any or all of the
following actions, at the same or different times: (i) terminate the
Commitments, and thereupon the Commitments shall terminate immediately, (ii)
require that all outstanding Letters of Credit be immediately surrendered and
terminated or fully cash collateralized pursuant to Section 2.16, and (iii)
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Borrower, require that any or all of the Obligations,
shall become and be immediately due and payable, (whether or not the
beneficiaries of the then outstanding Letters of Credit shall have presented the
documents required thereunder), and thereupon all fees and other Obligations of
the Borrower accrued hereunder, shall become due and payable immediately; and in
case of any event with respect to the Borrower described in clause (h) or (i)
above, (x) the Commitments shall automatically terminate, (y) all outstanding
Letters of Credit shall be immediately surrendered and terminated or fully cash
collateralized pursuant to Section 2.16, and (z) without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by the
Borrower, all of the Obligations hereunder shall become and be immediately due
and payable, (whether or not the beneficiaries of the then outstanding Letters
of Credit shall have presented the documents required thereunder), and thereupon
all fees and other Obligations of the Borrower accrued hereunder, shall
automatically become due and payable, without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrower.
ARTICLE IX
The Administrative Agent
In order to expedite the transactions contemplated by this Agreement
and the other Credit Documents, JPMorgan Chase Bank is hereby appointed to act
as Administrative Agent on behalf of the Banks. Each of the Banks hereby
irrevocably authorizes the Administrative Agent to take such actions on behalf
of such Bank and to exercise such powers as are specifically delegated to the
Administrative Agent by the terms and provisions hereof or of any other Credit
Document, together with such actions and powers as are reasonably incidental
thereto. The Administrative Agent is hereby expressly authorized by the Banks,
without hereby limiting any implied authority, (a) to receive on behalf of the
Banks all payments in respect of any L/C Disbursements and all other amounts due
to the Banks hereunder, and promptly to distribute to each Bank its proper share
of each payment so received; (b) to give notice on behalf of each of the Banks
to the Borrower of any Event of Default specified in this Agreement of which the
Administrative Agent has actual knowledge acquired in connection with its agency
hereunder; and (c) to distribute to each Bank copies of all notices, financial
statements and other materials delivered by the Borrower pursuant to this
Agreement as received by the Administrative Agent.
Neither the Administrative Agent nor any of its directors, officers,
employees or agents shall be liable as such for any action taken or omitted by
any of them except for its or his own gross negligence or willful misconduct, or
be responsible for any statement, warranty or representation herein
42
or the contents of any document delivered in connection herewith, or be required
to ascertain or to make any inquiry concerning the performance or observance by
the Borrower of any of the terms, conditions, covenants or agreements contained
in this Agreement or any other Credit Document. The Administrative Agent shall
not be responsible to the Banks for the due execution, genuineness, validity,
enforceability or effectiveness of this Agreement, any other Credit Document or
other instruments or agreements. The Administrative Agent may deem and treat the
Issuing Bank which issues any Letter of Credit as the holder of the indebtedness
resulting therefrom for all purposes hereof until it shall have received notice
from such Issuing Bank, given as provided herein, of the transfer thereof. The
Administrative Agent shall in all cases be fully protected in acting, or
refraining from acting, in accordance with written instructions signed by the
Required L/C Banks and, except as otherwise specifically provided herein, such
instructions and any action or inaction pursuant thereto shall be binding on all
the Banks. The Administrative Agent shall, in the absence of knowledge to the
contrary, be entitled to rely on any instrument or document believed by it in
good faith to be genuine and correct and to have been signed or sent by the
proper person or persons. Neither the Administrative Agent nor any of its
directors, officers, employees or agents shall have any responsibility to the
Borrower on account of the failure of or delay in performance or breach by any
Bank of any of its obligations hereunder or to any Bank on account of the
failure of or delay in performance or breach by any other Bank or the Borrower
of any of their respective obligations hereunder or in connection herewith. The
Administrative Agent may execute any and all duties hereunder by or through
agents or employees and shall be entitled to rely upon the advice of legal
counsel selected by it with respect to all matters arising hereunder or under
any other Credit Document and shall not be liable for any action taken or
suffered in good faith by it in accordance with the advice of such counsel.
The Banks hereby acknowledge that the Administrative Agent shall be
under no duty to take any discretionary action permitted to be taken by it
pursuant to the provisions of this Agreement or any other Credit Document unless
it shall be requested in writing to do so by the Required L/C Banks.
Subject to the appointment and acceptance of a successor Administrative
Agent as provided below, the Administrative Agent may resign at any time by
notifying the Banks and the Borrower. Upon any such resignation, the Required
L/C Banks shall have the right to appoint a successor Administrative Agent
acceptable to the Borrower. If no successor shall have been so appointed by the
Required L/C Banks and shall have accepted such appointment within 30 days after
the retiring Administrative Agent gives notice of its resignation, then the
retiring Administrative Agent may, on behalf of the Banks, appoint a successor
Administrative Agent which shall be a bank with an office in New York, New York,
having a combined capital and surplus of at least $500,000,000 or an Affiliate
of any such bank. Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor bank, such successor shall succeed to and become vested
with all the rights, powers, privileges and duties of the retiring
Administrative Agent and the retiring Administrative Agent shall be discharged
from its duties and obligations hereunder. After the Administrative Agent's
resignation hereunder, the provisions of this Article and Section 10.05 shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as Administrative Agent.
With respect to the Letters of Credit issued by or participated in by
it hereunder, the Administrative Agent in its individual capacity and not as the
Administrative Agent shall have the same rights and powers as any other Bank and
may exercise the same as though it were not the Administrative Agent, and the
Administrative Agent and its Affiliates may accept deposits from, lend money to
and generally engage in any kind of business with the Borrower or any Subsidiary
or other Affiliate thereof as if it were not the Administrative Agent.
Each Bank agrees (i) to reimburse the Administrative Agent, on demand,
in the amount of its pro rata share (based on its Commitment Percentage
hereunder) of any expenses incurred for the benefit of the Banks by the
Administrative Agent, including counsel fees and compensation of agents and
43
employees paid for services rendered on behalf of the Banks, which shall not
have been reimbursed by the Borrower, and (ii) to indemnify and hold harmless
the Administrative Agent and any of its directors, officers, employees or
agents, on demand, in the amount of such pro rata share, from and against any
and all liabilities, taxes, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by or asserted against it in its
capacity as the Administrative Agent or any of them in any way relating to or
arising out of this Agreement, any other Credit Document or any action taken or
omitted by it or any of them under this Agreement or any other Credit Document
to the extent the same shall not have been reimbursed by the Borrower; provided
that no Bank shall be liable to the Administrative Agent for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the gross negligence or willful
misconduct of the Administrative Agent or any of its directors, officers,
employees or agents.
Each Bank acknowledges that it has, independently and without reliance
upon the Administrative Agent or any other Bank and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Bank also acknowledges that it will,
independently and without reliance upon the Administrative Agent or any other
Bank and based on such documents and information as it shall from time to time
deem appropriate, continue to make its own decisions in taking or not taking
action under or based upon this Agreement or any related agreement or any
document furnished hereunder or thereunder.
ARTICLE X
Miscellaneous
SECTION 10.01. Notices. Notices and other communications provided for
herein shall be in writing and shall be delivered by hand or overnight courier
service, mailed or sent by telecopy, as follows:
(a) if to the Borrower, to it at Lucent Technologies Inc., Room
7E-524A, 000 Xxxxxxxx Xxxxxx, Xxxxxx Xxxx, Xxx Xxxxxx 00000, Attention of
Director, Global Banking and Cash Management (Facsimile No. 908-582-0290), with
a copy to Lucent Technologies Inc., Room 6G-232, 000 Xxxxxxxx Xxxxxx, Xxxxxx
Xxxx, Xxx Xxxxxx 00000, Attention of Managing Corporate Counsel - Corporate
(Facsimile No. 908-582-2209);
(b) if to the Administrative Agent, to it at JPMorgan Chase Bank, 000
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention of Xxxxx Xxxxxxx (Facsimile No.
212-270-4584); and
(c) if to a Bank, to it at its address (or telecopy number) set forth
in an Administrative Questionnaire delivered to the Administrative Agent.
All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to have been
given on the date of receipt if delivered by hand or overnight courier service
or sent by telecopy, or on the date five Business Days after dispatch by
certified or registered mail if mailed, in each case delivered, sent or mailed
(properly addressed) to such party as provided in this Section 10.01 or in
accordance with the latest unrevoked direction from such party given in
accordance with this Section 10.01.
SECTION 10.02. Survival of Agreement. All covenants, agreements,
representations and warranties made by any Credit Party in any Credit Document
and in the certificates or other instruments prepared or delivered in connection
with or pursuant to this Agreement shall be considered to
44
have been relied upon by the Banks and shall survive the issuance of any Letter
of Credit regardless of any investigation made by the Banks or on their behalf,
and shall continue in full force and effect as long as any fee or any other
amount payable under this Agreement is outstanding and unpaid or any Letter of
Credit is outstanding and so long as the Commitments have not expired or been
terminated.
SECTION 10.03. Binding Effect. This Agreement shall become effective
when the conditions precedent set forth in Section 4.01 shall have been
satisfied, and thereafter shall be binding upon and inure to the benefit of the
Borrower, the Administrative Agent and each Bank and their respective successors
and assigns.
SECTION 10.04. Successors and Assigns. (a) Whenever in this Agreement
any of the parties hereto is referred to, such reference shall be deemed to
include the successors and assigns of such party; and all covenants, promises
and agreements by or on behalf of the Borrower, the Administrative Agent or the
Banks that are contained in this Agreement shall bind and inure to the benefit
of their respective successors and assigns.
(b) Each Bank may assign to one or more assignees all or a portion of
its interests, rights and obligations under this Agreement (including all or a
portion of its Commitment and participations in any L/C Disbursement); provided,
however, that (i) except in the case of assignments to a Bank or an affiliate of
a Bank, the Administrative Agent, each Issuing Bank and the Borrower (except
after the occurrence and during the continuance of an Event of Default) must
give their prior written consent to such assignment (such consent not to be
unreasonably withheld or delayed), (ii) the amount of the Commitment of the
assigning Bank subject to each such assignment (determined as of the date the
Assignment and Acceptance with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $5,000,000 (or the remaining
balance of its Commitment) and the amount of the Commitment of such Bank
remaining after such assignment shall not be less than $5,000,000 or shall be
zero, in each case unless otherwise agreed by the Borrower, each Issuing Bank
and the Administrative Agent, (iii) the parties to each such assignment shall
execute and deliver to the Administrative Agent an Assignment and Acceptance,
and a processing and recordation fee of $3,500 and (iv) the assignee, if it
shall not be a Bank, shall deliver to the Administrative Agent an Administrative
Questionnaire. Upon acceptance and recording pursuant to paragraph (e) of this
Section 10.04, from and after the effective date specified in each Assignment
and Acceptance, which effective date shall be at least five Business Days after
the execution thereof, (A) the assignee thereunder shall be a party hereto and,
to the extent of the interest assigned by such Assignment and Acceptance, have
the rights and obligations of a Bank under this Agreement, (B) the assigning
Bank thereunder shall, to the extent of the interest assigned by such Assignment
and Acceptance, be released from its obligations under this Agreement (and, in
the case of an Assignment and Acceptance covering all or the remaining portion
of an assigning Bank's rights and obligations under this Agreement such Bank
shall cease to be a party hereto (but shall continue to be entitled to the
benefits of Sections 2.10, 2.14 and 10.05, as well as to any fees accrued for
its account hereunder and not yet paid)) and (C) Schedule 1.01A shall be deemed
amended to give effect to such assignment.
(c) By executing and delivering an Assignment and Acceptance, the
assigning Bank thereunder and the assignee thereunder shall be deemed to confirm
to and agree with each other and the other parties hereto as follows: (i) such
assigning Bank warrants that it is the legal and beneficial owner of the
interest being assigned thereby free and clear of any adverse claim; (ii) except
as set forth in (i) above, such assigning Bank makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other
45
instrument or document furnished pursuant hereto or the financial condition of
the Borrower or the performance or observance by the Borrower of any of its
obligations under this Agreement or any other instrument or document furnished
pursuant hereto; (iii) such assignee represents and warrants that it is legally
authorized to enter into such Assignment and Acceptance; (iv) such assignee
confirms that it has received a copy of this Agreement (as in effect on the date
of the execution and delivery of such Assignment and Acceptance), together with
copies of the most recent financial statements delivered pursuant to Section
5.02 and such other documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into such Assignment and
Acceptance; (v) such assignee will independently and without reliance upon the
Administrative Agent, such assigning Bank or any other Bank and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement; (vi) such assignee appoints and authorizes the Administrative Agent
to take such action as agent on its behalf and to exercise such powers under
this Agreement as are delegated to the Administrative Agent by the terms hereof,
together with such powers as are reasonably incidental thereto; and (vii) such
assignee agrees that it will perform in accordance with their terms all the
obligations which by the terms of this Agreement are required to be performed by
it as a Bank.
(d) The Administrative Agent shall maintain at one of its offices in
the City of New York a copy of each Assignment and Acceptance delivered to it
and a register for the recordation of the names and addresses of the Banks, and
the Commitment of, and L/C Disbursements owing to, each Bank pursuant to the
terms hereof from time to time (the "Register"). The entries in the Register
shall be conclusive in the absence of manifest error and the Borrower, the
Administrative Agent and the Banks may treat each person whose name is recorded
in the Register pursuant to the terms hereof as a Bank hereunder for all
purposes of this Agreement.
(e) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Bank and an assignee together with an Administrative
Questionnaire completed in respect of the assignee (unless the assignee shall
already be a Bank hereunder), the processing and recordation fee referred to in
paragraph (b) above and, if required, the written consent of the Borrower and
each Issuing Bank to such assignment, the Administrative Agent shall (i) accept
such Assignment and Acceptance and (ii) record the information contained therein
in the Register.
(f) Each Bank may, without the consent of the Borrower or the
Administrative Agent, sell participations to one or more banks or other entities
in all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment and participations in any L/C
Disbursement); provided, however, that (i) such Bank's obligations under this
Agreement shall remain unchanged, (ii) such Bank shall remain solely responsible
to the other parties hereto for the performance of such obligations, (iii) each
participating bank or other entity shall be entitled to the benefit of the cost
protection provisions contained in Sections 2.10 and 2.14 to the same extent as
if it were the selling Bank, except that all claims and petitions for payment
and payments made pursuant to such Sections shall be made through such selling
Bank, and (iv) the Borrower, the Administrative Agent and the other Banks shall
continue to deal solely and directly with such selling Bank in connection with
such Bank's rights and obligations under this Agreement, and such Bank shall
retain the sole right (and participating banks or other entities shall have no
right) to enforce the obligations of the Borrower relating to the Letters of
Credit and to approve any amendment, modification or waiver of any provision of
this Agreement or any other Credit Document (other than amendments,
modifications or waivers decreasing any fees payable hereunder or the principal
amount of any L/C Disbursement or the rate of interest thereon, or extending any
scheduled date of payment of the amount of any L/C Disbursement, or any interest
thereon).
(g) Any Bank or participant may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
10.04, disclose to the assignee or participant or proposed assignee or
participant any information relating to the Borrower furnished to such
46
Bank by or on behalf of the Borrower; provided that, prior to any such
disclosure, each such assignee or participant or proposed assignee or
participant shall execute an agreement whereby such assignee or participant
shall agree (subject to customary exceptions) to preserve the confidentiality of
any such confidential information relating to the Borrower.
(h) The Borrower shall not assign or delegate any of its respective
rights and duties hereunder without the prior written consent of all Banks and
any attempted assignment without such consent shall be void.
(i) For avoidance of doubt, the parties to this Agreement acknowledge
that the provisions of this Section 10.04 concerning assignments relate only to
absolute assignments and that such provisions do not prohibit assignments
creating security interests, including any pledge or assignment by a Bank to any
Federal Reserve Bank in accordance with applicable law; provided that no such
assignment shall release any Bank from its obligations hereunder or substitute
any such Bank for such Bank as a party hereto. In order to facilitate such an
assignment, the Borrower shall, at the request of the assigning Bank, duly
execute and deliver to the assigning Bank a promissory note or notes evidencing
the extensions of credit made to the Borrower by the assigning Bank hereunder.
SECTION 10.05. Expenses; Indemnity. (a) The Borrower agrees to pay all
reasonable out-of-pocket expenses incurred by the Administrative Agent or any
Bank in connection with this Agreement or any other Credit Document or in
connection with any amendments, modifications or waivers of the provisions
hereof or thereof, or incurred by the Administrative Agent or any Bank in
connection with the preparation of, or enforcement or protection of their rights
in connection with, this Agreement or any other Credit Document or in connection
with the Letters of Credit issued hereunder, including the fees and
disbursements of counsel for the Administrative Agent or, in the case of
preparation, enforcement or protection, Banks.
(b) The Borrower agrees to indemnify the Administrative Agent, the
Banks, their respective Affiliates, and their respective directors, officers,
employees and agents (each such person being called an "Indemnitee") against,
and to hold each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses, including reasonable counsel fees and
expenses, incurred by or asserted against any Indemnitee arising out of (i) the
execution or delivery of this Agreement, any other Credit Document or any
agreement or instrument contemplated thereby, the performance by the parties
thereto of their respective obligations thereunder or the consummation of the
transactions contemplated thereby, (ii) the use of the Letters of Credit or
(iii) any claim, litigation, investigation or proceeding relating to any of the
foregoing, whether or not any Indemnitee is a party thereto; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses resulted from the gross
negligence or willful misconduct of such Indemnitee.
(c) The provisions of this Section 10.05 shall remain operative and in
full force and effect regardless of the expiration of the term of this
Agreement, the consummation of the transactions contemplated hereby, the
termination or expiration of any of the Letters of Credit, the invalidity or
unenforceability of any term or provision of this Agreement or any investigation
made by or on behalf of the Administrative Agent or any Bank. All amounts due
under this Section 10.05 shall be payable on written demand therefor.
SECTION 10.06. Applicable Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
47
SECTION 10.07. Waivers; Amendment. (a) No failure or delay of the
Administrative Agent or any Bank in exercising any power or right hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise thereof or
the exercise of any other right or power. The rights and remedies of the
Administrative Agent and the Banks hereunder are cumulative and are not
exclusive of any rights or remedies which they would otherwise have. No waiver
of any provision of this Agreement or consent to any departure by the Borrower
therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) below, and then such waiver or consent shall be effective only in
the specific instance and for the purpose for which given. No notice or demand
on the Borrower in any case shall entitle the Borrower to any other or further
notice or demand in similar or other circumstances.
(b) Neither this Agreement, any other Credit Document nor any provision
hereof or thereof may be waived, amended or modified except pursuant to an
agreement or agreements in writing entered into by the Borrower and (i) subject
to clauses (iii) and (iv) below, in the case of an amendment, waiver or
modification relating to a provision common to this Agreement and the ESD
Agreement, the Required Lucent Banks, (ii) in the case of an amendment, waiver
or modification to a provision applicable to this Agreement and not to the ESD
Agreement, the Required L/C Banks, (iii) in the case of an amendment, waiver or
modification of any of the financial covenants set forth in Sections 7.01 and
7.02, the Required L/C Banks and the Required ESD Banks or (iv) in the case of
an amendment, waiver or modification relating to a provision common to this
Agreement and the ESD Agreement (other than the financial covenants set forth in
Sections 7.01 and 7.02 herein) but having a materially different and adverse
affect on the Banks, the Required Lucent Banks and the Required L/C Banks;
provided, however, that no such agreement shall (A) reduce the principal amount
of any L/C Disbursement or reduce the rate of interest thereon, or reduce any
fees payable hereunder, or postpone the scheduled date of payment of the amount
of any L/C Disbursement, or any interest thereon, or any fees payable hereunder,
or reduce the amount of, waive or excuse any such payment, or postpone the
scheduled date of expiration of any Commitment, without the written consent of
each Bank affected thereby, (B) increase the Commitment of any Bank, amend or
modify the provisions of Section 2.11 or Section 10.04(h), amend or modify the
provisions of this Section or the definition of "Required L/C Banks" or
"Required Lucent Banks" or release any material Collateral (except as expressly
provided hereunder) or Guarantee of the Subsidiary Guarantors pursuant to the
Guarantee and Collateral Agreement (except as provided thereto or in Section
10.13), in each case, without the written consent of each Bank and (C) amend,
modify or waive any provision of Sections 2.01 through 2.07 without the written
consent of each Issuing Bank; provided, further, however, that no such agreement
shall amend, modify or otherwise affect the rights or duties of the
Administrative Agent or any Issuing Bank hereunder without the prior written
consent of the Administrative Agent or such Issuing Bank, as the case may be.
Each Bank shall be bound by any waiver, amendment or modification authorized by
this Section and any consent by any Bank pursuant to this Section shall bind any
assignee of its rights and interests hereunder.
SECTION 10.08. Entire Agreement. This Agreement constitutes the entire
contract among the parties relative to the subject matter hereof. Any previous
agreement among the parties with respect to the subject matter hereof is
superseded by this Agreement. Nothing in this Agreement expressed or implied, is
intended to confer upon any party other than the parties hereto any rights,
remedies, obligations or liabilities under or by reason of this Agreement.
SECTION 10.09. Severability. In the event any one or more of the
provisions contained in this Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby. The parties shall endeavor in good-faith negotiations to
replace the invalid, illegal or
48
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
SECTION 10.10. Right of Setoff. If an Event of Default shall have
occurred and be continuing under clause (a) or (b) of Article VIII, or if the
Letters of Credit are surrendered and terminated or fully cash collateralized
pursuant to Section 2.16, each Bank and each of its Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other obligations at any time
owing by such Bank or Affiliate to or for the credit or the account of any
Credit Party against any of and all the obligations of any Credit Party now or
hereafter existing under this Agreement or any other Credit Document held by
such Bank, irrespective of whether or not such Bank shall have made any demand
under this Agreement or any other Credit Document and although such obligations
may be unmatured. The rights of each Bank under this Section are in addition to
other rights and remedies (including other rights of setoff) which such Bank may
have.
SECTION 10.11. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall constitute an original but all of which
when taken together shall constitute but one contract, and shall become
effective as provided in Section 10.03.
SECTION 10.12. Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.
SECTION 10.13. Release of Guarantees and Liens. (a) Notwithstanding
anything to the contrary contained herein or in any other Credit Document, each
of the Administrative Agent and the Collateral Agent is hereby irrevocably
authorized by each Bank (without requirement of notice to or consent of any
Bank) to take any action requested by the Borrower (including the giving of
directions to the Collateral Agent) having the effect of releasing any
Collateral or Guarantee obligations (i) to the extent necessary to permit
consummation of any transaction, including any sale-leaseback transaction, CMO
Transaction, or receivables securitization not prohibited by any Credit Document
or that has been consented to in accordance with Section 10.07 or (ii) to the
extent such Collateral constitutes (A) any accounts receivable and other
contract rights to payment payable by non-U.S. Persons organized in China, India
or Saudi Arabia to the Borrower or any Domestic Subsidiary or (B) inventory of
the Borrower or any Domestic Subsidiary physically located outside of the United
States, so long as, in the case of each of the foregoing clauses (A) and (B),
such assets shall be used to secure Indebtedness of the Borrower or any
Subsidiary not prohibited by any Credit Document.
(b) Neither this Agreement, any other Credit Document nor any provision
hereof or thereof may be waived, amended or modified so as to release any
material Collateral or Guarantee of the Subsidiary Guarantors pursuant to the
Guarantee and Collateral Agreement (except as provided therein or in paragraph
(a) of this Section 10.13), without the prior written consent of each Bank.
SECTION 10.14. Confidentiality. Each of the Administrative Agent and
the Banks agrees to maintain the confidentiality of the Information (as defined
below), except that Information may be disclosed (a) to its and its Affiliates'
directors, officers, employees and agents, including accountants, legal counsel
and other advisors (it being understood that the Persons to whom such disclosure
is made will be informed of the confidential nature of such Information and
instructed to keep such Information confidential), (b) to the extent requested
by any regulatory authority, (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (d) to any other party
to this Agreement, (e) in connection with the exercise of any remedies hereunder
or any suit, action or proceeding relating to this Agreement or the enforcement
of rights hereunder, (f) subject to an agreement
49
containing provisions substantially the same as those of this Section, to any
assignee of or participant in, or any prospective assignee of or participant in,
any of its rights or obligations under this Agreement, (g) with the consent of
the Borrower or (h) to the extent such Information (i) becomes publicly
available other than as a result of a breach of this Section or (ii) becomes
available to the Administrative Agent or any Bank on a nonconfidential basis
from a source other than the Borrower. For the purposes of this Section,
"Information" means all information received from the Borrower relating to the
Borrower or its business, other than any such information that is available to
the Administrative Agent or any Bank on a nonconfidential basis prior to
disclosure by the Borrower; provided that, in the case of information received
from the Borrower after the Effective Date, such information is clearly
identified at the time of delivery as confidential. Any Person required to
maintain the confidentiality of Information as provided in this Section shall be
considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.
Notwithstanding anything herein to the contrary, any party subject to
confidentiality obligations hereunder or under any other related document (and
any employee, representative or other agent of such party) may disclose to any
and all persons, without limitation of any kind, such party's U.S. federal
income tax treatment and the U.S. federal income tax structure of the
transactions contemplated by this Agreement relating to such party and all
materials of any kind (including opinions or other tax analyses) that are
provided to it relating to such tax treatment and tax structure. However, no
such party shall disclose any information relating to such tax treatment or tax
structure to the extent nondisclosure is reasonably necessary in order to comply
with applicable security laws.
SECTION 10.15. Submission To Jurisdiction; Waivers. The Borrower hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Credit Documents to which it
is a party, or for recognition and enforcement of any judgment in respect
thereof, to the non-exclusive general jurisdiction of the courts of the State of
New York, the courts of the United States of America for the Southern District
of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the venue
of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that service of process in any such action or proceeding may
be effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to it at its address
referred to in Section 10.01 or at such other address of which the
Administrative Agent shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect service
of process in any other manner permitted by law or shall limit the right to xxx
in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding referred to in
this Section any special, exemplary, punitive or consequential damages.
SECTION 10.16. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION
50
OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND FOR
ANY COUNTERCLAIM THEREIN.
51
IN WITNESS WHEREOF, the Borrower, the Administrative Agent and the
Banks have caused this Agreement to be duly executed by their respective
authorized officers as of the day and year first above written.
LUCENT TECHNOLOGIES INC.
By:
--------------------------------------
Name:
Title:
JPMORGAN CHASE BANK, individually and as
Administrative Agent
By:
--------------------------------------
Name:
Title:
CITIBANK, N.A.
By:
--------------------------------------
Name:
Title:
HSBC BANK USA
By:
--------------------------------------
Name:
Title:
HSBC BANK plc
HSBC BANK FRANCE SA
THE HONGKONG AND SHANGHAI BANKING
CORPORATION LIMITED, TAIWAN
By: HSBC BANK USA, as Attorney-in-Fact
By:
--------------------------------------
Name:
Title:
