EXHIBIT 10.12
PLEDGE AGREEMENT
dated as of
APRIL 4, 2002
among
NORTEL NETWORKS LIMITED
NORTEL NETWORKS INTERNATIONAL
FINANCE AND HOLDING BV
NORTEL NETWORKS SA
and
JPMORGAN CHASE BANK,
as Collateral Agent
TABLE OF CONTENTS
PAGES
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SECTION 1. Definitions ..................................................................... 4
SECTION 2. Pledge of Equity Interests....................................................... 12
SECTION 3. General Representations, Warranties and Covenants ............................... 12
SECTION 4. Additional Covenants............................................................. 14
SECTION 5. Equity Interests................................................................. 14
SECTION 6. Cash Collateral Accounts......................................................... 15
SECTION 7. Operation of Cash Collateral Accounts............................................ 15
SECTION 8. Right to Vote Securities......................................................... 16
SECTION 9. Certain Cash Distributions....................................................... 16
SECTION 10. Remedies Upon Event of Default Specified Event of Default....................... 16
SECTION 11. Application of Proceeds......................................................... 17
SECTION 12. Fees and Expenses............................................................... 19
SECTION 13. Authority to Administer Collateral.............................................. 20
SECTION 14. Limitation on Duty in Respect of Collateral..................................... 20
SECTION 15. General Provisions Concerning the Collateral Agent.............................. 20
SECTION 16. Termination of Pledges; Release of Collateral................................... 22
SECTION 17. Additional Lien Grantors........................................................ 24
SECTION 18. Additional Secured Obligations.................................................. 24
SECTION 19. Notices......................................................................... 25
SECTION 20. No Implied Waivers; Remedies Not Exclusive...................................... 25
SECTION 21. Successors and Assigns.......................................................... 25
SECTION 22. Amendments and Waivers.......................................................... 26
SECTION 23. Choice of Law - Disputes........................................................ 26
SECTION 24. Judgement Currency.............................................................. 26
SECTION 25. Severability.................................................................... 26
SCHEDULE 1 Equity Interests in NNSA Owned by the Lien
Grantors
EXHIBIT A Pledge Agreement Supplement
EXHIBIT B Declarations of Pledge
ii
PLEDGE AGREEMENT
AGREEMENT dated as of APRIL 4, 2002 among Nortel Networks Limited (with
its successors, "NNL"), Nortel Networks International Finance and Holding BV
("NNIFH"), Nortel Networks SA, a French societe anonyme with its registered
offices at ▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ("▇▇▇▇") and
JPMorgan Chase Bank, as Collateral Agent (with its successors, the "COLLATERAL
AGENT").
WHEREAS, NNL as borrower, certain financial institutions and JPMorgan
Bank Canada, formerly known as The Chase Manhattan Bank successor by merger to
the ▇▇▇▇▇▇ Guaranty Trust Company of New York, Toronto Branch, as Administrative
Agent, are parties to a 364-Day Credit Agreement dated as of April 12, 2000 (as
amended from time to time, the "2000 NNL 364-DAY AGREEMENT"); and
WHEREAS, NNL, as borrower, certain financial institutions, Credit
Suisse First Boston ("CSFB"), as Syndication Agent, and JPMorgan Chase Bank,
formerly known as The Chase Manhattan Bank successor by merger to ▇▇▇▇▇▇
Guaranty Trust Company of New York, Toronto Branch, as Administrative Agent are
parties to a 5-Year Credit Agreement dated as of April 12, 2000 (as amended from
time to time, the "2000 NNL 5-YEAR AGREEMENT"); and
WHEREAS, NNI, as borrower, NNL, as guarantor, certain financial
institutions, and JPMorgan Chase Bank, formerly known as The Chase Manhattan
Bank successor by merger to ▇▇▇▇▇▇ Guaranty Trust Company of New York, as
Administrative Agent are parties to a 364-Day Credit Agreement dated as of April
12, 2000 (as amended from time to time, the "2000 NNI 364-DAY AGREEMENT"); and
WHEREAS, NNI, as borrower, NNL, as guarantor, certain financial
institutions, and JPMorgan Chase Bank, formerly known as The Chase Manhattan
Bank successor by merger to ▇▇▇▇▇▇ Guaranty Trust Company of New York, as
Administrative Agent are parties to a 5-Year Credit Agreement dated as of April
12, 2000 (as amended from time to time, the "2000 NNI 5-YEAR AGREEMENT"); and
WHEREAS, NNL, as borrower, certain financial institutions, CSFB, as
Syndication Agent, and JPMorgan Chase Bank formerly known as The Chase Manhattan
Bank, Toronto Branch, as Administrative Agent are parties to a 364-Day Credit
Agreement dated as of June 14, 2001 (as amended from time to time, the "2001 NNL
364-DAY AGREEMENT"); and
WHEREAS, NNI, as borrower, NNL, as guarantor, certain financial
institutions, CSFB, as Syndication Agent, and JPMorgan Chase Bank formerly known
as The Chase Manhattan Bank, as Administrative Agent are parties to a 364-Day
Credit Agreement dated as of June 14, 2001 (as amended from time to time, the
"2001 NNI 364-DAY AGREEMENT"); and
WHEREAS, the parties hereto have agreed that this Agreement shall be in
effect only during any Collateral Period (as defined below); and
WHEREAS, pursuant to the ▇▇▇▇ ▇▇▇ 364-Day Agreement and the 2001 NNI
364-Day Agreement (together the "2001 364-DAY AGREEMENTS"), on the first day of
any
Collateral Period certain Material Subsidiaries (as those terms are respectively
defined therein) of NNL are required to enter into a Foreign Pledge Agreement;
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1. Definitions.
The following terms, as used herein, have the following meanings:
"ADDITIONAL LIEN GRANTOR" means each Subsidiary of NNL that shall, at
any time after the date hereof, become a "Lien Grantor" pursuant to Section 17.
"ASSET SALE" means any "Asset Sale" referred to in Section 5.13(g) of
the 2001 364-Day Agreements; provided that, on and after the Refinancing
Effective Date with respect to any Credit Agreement, "Asset Sale" for purposes
of this Agreement will also include any "asset sale" (or similar term) as
defined in any Replacement Agreement with respect to such Credit Agreement which
is stated to constitute an Asset Sale for the purpose of this Agreement.
"BANK TERMINATION DATE" means the first date on which all of the
following conditions are satisfied: (i) all commitments to extend credit under
any Credit Agreement shall have expired or been terminated, (ii) all
Non-Contingent Secured Obligations arising under any of the Credit Agreements
shall have been paid in full, and (iii) no Contingent Secured Obligation shall
remain outstanding under any of the Credit Agreements, other than any indemnity
claims that have not been asserted on or prior to such date.
"BANKS" means the "Banks" under each of the Credit Agreements.
"BONDS" means, collectively, the 2002 Notes, the 2003 Notes, the 2006
Notes, the 2006 NNCC Notes, the 2008 Notes, the 2023 Notes and the 2026 Notes.
"BUSINESS DAY" means a day on which chartered banks are open for
over-the-counter business in New York and excludes Saturdays, Sundays and
statutory holidays therein; provided that for purposes of Section 3(f),
"Business Day" shall mean a day on which chartered banks are open for
over-the-counter business in New York, Ontario and the principal place of
business of the applicable Lien Grantor and the applicable issuer of the Equity
Interest being Pledged and excludes Saturdays, Sundays and statutory holidays
therein.
"CANADIAN SECURITY AGREEMENT" means the Canadian guarantee and security
agreement dated the date hereof among NNL, NNI, the Subsidiaries party thereto
and JPMorgan Chase Bank, as Collateral Agent.
"CANADIAN SUBSIDIARY" means, with respect to any Person, any Subsidiary
(which may be a corporation, limited liability company, partnership or other
legal entity) organized under the laws of Canada or one of the Provinces or
Territories of Canada.
"CAPITAL MARKETS EVENT" has the meaning set forth in any Credit
Agreement.
"CASH COLLATERAL ACCOUNT" has the meaning specified in Section 6.
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"CASH DISTRIBUTIONS" means dividends, interest and other distributions
and payments (including proceeds of liquidation, sale or other disposition) made
or received in cash upon or with respect to any Collateral.
"COLLATERAL" means all property whether now owned or hereafter
acquired, on which a Lien is granted or purports to be granted to the Collateral
Agent pursuant to the Pledge Documents. When used with respect to a specific
Lien Grantor, the term "Collateral" means any of the foregoing Collateral in
which such a Lien is granted or is purported to be granted by such Lien Grantor.
"COLLATERAL PERIOD" means any period from and including the first day
when the Debt Rating is lower than BBB- by S&P or Baa3 by Moody's to but
excluding the first day when the Debt Rating is BBB (stable outlook) or higher
by S&P and Baa2 (stable outlook) or higher by Moody's.
"CONTINGENT SECURED OBLIGATION" means, at any time, any Secured
Obligation (or portion thereof) that is contingent in nature at such time,
including any Secured Obligation that is: (i) an obligation under a Designated
Hedging Agreement to make payments that cannot be quantified at such time, (ii)
any other obligation (including any guarantee) that is contingent in nature at
such time or (iii) an obligation to provide collateral to secure any of the
foregoing types of obligations.
"CREDIT AGREEMENTS" means the NNI Credit Agreements and the NNL Credit
Agreements.
"DEBT RATING" means any rating by Moody's or S&P with respect to the
senior unsecured non-credit enhanced long-term debt of NNL.
"DESIGNATED BANK DEBT" means any indebtedness for borrowed money
designated pursuant to (and in accordance with the terms of) (i) Section 19(b),
(ii) Section 22(c) of the U.S. Security Agreement or (iii) Section 21(c) of the
Canadian Security Agreement.
"DESIGNATED CAPITAL MARKETS DEBT" means any indebtedness constituting a
Capital Markets Event designated pursuant to (and in accordance with the terms
of) (i) Section 19(a), (ii) Section 22(b) of the U.S. Security Agreement or
(iii) Section 21(b) of the Canadian Security Agreement.
"DESIGNATED HEDGING AGREEMENT" means any Hedging Agreement designated
pursuant to (and in accordance with the terms of) Section 22(a) of the US
Security Agreement or pursuant to Section 21(a) of the Canadian Security
Agreement.
"DRAWDOWN DATE" means any date during any Collateral Period on which an
extension of credit is made under either 2001 364-Day Agreement; provided that,
on and after the Refinancing Effective Date with respect to any Credit
Agreement, "Drawdown Date" for purposes of this Agreement will also include any
date during any Collateral Period on which an extension of credit is made under
the Replacement Agreement with respect to such Credit Agreement.
"EQUITY INTEREST" means (i) any shares of the capital stock of NNSA,
(ii) any warrant, option or other right to acquire any Equity Interest described
in this definition.
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"EQUITY INTEREST ACCOUNTS" means NNSA shareholder's account No. [8
BIS] as held by NNIFH and NNSA shareholder's account No. [15 BIS] as held by
NNL.
"EVENT OF DEFAULT" means an "Event of Default" under any Credit
Agreement.
"HEDGING AGREEMENT" means (i) any interest rate protection agreement,
foreign currency exchange agreement, commodity price protection agreement or
other interest rate, currency exchange rate or commodity price hedging
arrangement and (ii) any hedging agreement in respect of common stock entered
into in order to hedge exposure under stock option plans or other benefit plans
for employees, directors or consultants of NNL and its Subsidiaries, but in each
case only if such agreement or arrangement is entered into with a Bank or an
affiliate thereof.
"INDENTURE TRUSTEES" means (i) The Toronto-Dominion Bank Trust Company,
as trustee under the 1988 Indenture, (ii) The Bank of New York, as trustee under
the 1996 Indenture, (iii) Citibank, N.A., as trustee under the 2000 Indenture
and (iv) Bankers Trust Company, as trustee under the 2001 Indenture and their
respective successors in such capacity.
"ILLIQUID COLLATERAL" means all Collateral other than the Liquid
Collateral.
"INDENTURES" means, collectively, the 1988 Indenture, the 1996
Indenture, the 2000 Indenture and the 2001 Indenture.
"INVESTMENT GRADE DATE" means the first day when the Debt Rating is BBB
(stable outlook) or higher by S&P and Baa2 (stable outlook) or higher by
Moody's.
"LIEN" means, with respect to any asset, (i) any mortgage, deed of
trust, lien, pledge, hypothecation, encumbrance, charge or security interest in,
on or of such asset, (ii) 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 (iii) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
"LIEN GRANTORS" means NNL and NNIFH and the Additional Lien Grantors as
per Section 17.
"LIQUID COLLATERAL" means the (i) Cash Collateral Accounts and (ii) all
Cash Distribution on the Pledge Equity Interests.
"LIQUID INVESTMENT" means a Permitted Investment (other than commercial
paper) that matures within 30 days after it is first included in the Collateral.
"LOAN DOCUMENTS" means the Credit Agreements (including notes issued
thereunder) and the Security Documents.
"MATERIAL SUBSIDIARY" has the meaning set forth in the ▇▇▇▇ ▇▇▇ 364-Day
Agreement.
"MOODY'S" means ▇▇▇▇▇'▇ Investors Service, Inc.
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"1988 INDENTURE" means the Indenture dated as of November 30, 1988
among NTL, the subsidiary guarantors party thereto and The Toronto-Dominion Bank
Trust Company as trustee, as amended from time to time.
"1996 INDENTURE" means the Indenture dated as of February 15, 1996
among NTL, the subsidiary guarantors party thereto and The Bank of New York as
trustee, as amended from time to time.
"NNC" means Nortel Networks Corporation, a Canadian corporation, and
its successors.
"NNFI" means Nortel Networks U.S. Finance Inc.
"NNFI HEDGING OBLIGATIONS" means (i) all obligations of NNFI under any
Designated Hedging Agreement and (ii) any renewals and extensions thereof.
"NNI BANK OBLIGATIONS" means (i) all principal of and interest
(including, without limitation, any Post-Petition Interest) on any loan under,
or any note issued pursuant to, any NNI Credit Agreement, (ii) all other amounts
payable by NNI under any NNI Credit Agreement, (iii) all obligations of NNI
under Section 2 of the U.S. Security Agreement and (iv) any renewals or
extensions of any of the foregoing.
"NNI CREDIT AGREEMENTS" means the ▇▇▇▇ ▇▇▇ 364-Day Agreement, the 2000
NNI 5-Year Agreement and the 2001 NNI 364-Day Agreement.
"NNI HEDGING OBLIGATIONS" means (i) all obligations of NNI under any
Designated Hedging Agreement and (ii) any renewals or extensions thereof.
"NNL BANK OBLIGATIONS" means (i) all principal of and interest
(including, without limitation, any Post-Petition Interest) on any loan under,
or any note issued pursuant to, any NNL Credit Agreement, (ii) all other amounts
payable by NNL under any NNL Credit Agreement, (iii) all obligations of NNL
under Article 9 of each NNI Credit Agreement and (iv) any renewals or extensions
of any of the foregoing.
"NNL BOND OBLIGATIONS" means all principal of and interest (including,
without limitation, any Post-Petition Interest) on and other amounts payable
under the 2002 Notes, the 2003 Notes, the 2006 Notes, the 2006 NNCC Notes, the
2008 Notes, the 2023 Notes and the 2026 Notes.
"NNL COMPANIES" means, collectively, NNL, any of its Subsidiaries
(including without limitation NNI and any NNI Subsidiaries) and their respective
affiliates.
"NNL CREDIT AGREEMENTS" means the ▇▇▇▇ ▇▇▇ 364-Day Agreement, the ▇▇▇▇
▇▇▇ 5-Year Agreement and the ▇▇▇▇ ▇▇▇ 364-Day Agreement.
"NNL GUARANTEED OBLIGATIONS" means (i) the NNI Hedging Obligations,
(ii) the NNFI Hedging Obligations, (iii) the NNI Bank Obligations, (iv) any
Designated Bank Debt and (v) any Designated Capital Markets Debt (other than
Designated Capital Markets Debt of NNL).
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"NNL HEDGING OBLIGATIONS" means (i) the NNI Hedging Obligations, (ii)
the NNFI Hedging Obligations, (iii) the NNI Bank Obligations, (iv) any
Designated Bank Debt and (v) any Designated Capital Markets Debt (other than
Designated Capital Markets Debt of NNL).
"NON-CONTINGENT SECURED OBLIGATION" means at any time any Secured
Obligation (or portion thereof) that is not a Contingent Secured Obligation at
such time.
"NTL" means Northern Telecom Limited, a Canadian corporation, and its
successors.
"PERMITTED INVESTMENTS" means investments in:
(i) direct obligations of, or obligations the principal of and interest
on which are unconditionally guaranteed by, the United States or Canada (or by
any agency thereof to the extent such obligations are backed by the full faith
and credit of the United States or Canada, as the case may be), in each case
maturing within one year from the date of acquisition thereof;
(ii) commercial paper maturing within one year from the date of
acquisition thereof and having, at such date of acquisition, the highest credit
rating obtainable from S&P, Moody's or Dominion Bond Rating Services Limited;
(iii) 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 or any State thereof or Canada which has a combined capital
and surplus and undivided profits of at least $500,000,000;
(iv) fully collateralized repurchase agreements with a term of not more
than 30 days for securities described in clause (i) above and entered into with
a financial institution satisfying the criteria described in clause (iii) above;
and
(v) any other investments made in compliance with Corporate Procedure
No. 303.30 of NNC with respect to cash investments and safe custody
arrangements, substantially as in effect on the Amendment No. 2 Effective Date
(as defined in the ▇▇▇▇ ▇▇▇ 364-Day Agreement).
"PERMITTED LIENS" means (i) the Transaction Liens and (ii) any other
Liens on the Collateral permitted to be created or assumed or to exist pursuant
to each Credit Agreement.
"PERSON" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a government
or political subdivision or an agency or instrumentality thereof.
"PLEDGE" means the Lien granted by the Lien Grantors under the Pledge
Documents.
"PLEDGE AGREEMENT SUPPLEMENT" means a Pledge Agreement Supplement,
substantially in the form attached as Exhibit A to be signed and delivered to
the Collateral Agent for the purpose of adding a Subsidiary as a party hereto
pursuant to Section 17 and/or adding additional property to the Collateral.
8
"PLEDGE DOCUMENTS" means this Agreement, the Pledge Agreement
Supplement and the Pledge Declarations, and all other supplemental or additional
security agreements, or similar instruments required to be delivered hereunder.
"PLEDGE DECLARATIONS" means the documents in the form attached as
Exhibit B.
"PLEDGED", when used in conjunction with any type of asset, means at
any time an asset of such type that is included (or that creates rights that are
included) in the Collateral at such time pursuant to the terms of this
Agreement. For example, "Pledged Equity Interest" means an Equity Interest that
is included in the Collateral by being credited to a Pledged Equity Interest
Account at such time.
"POST-PETITION INTEREST" means, with respect to any obligation of any
Person, any interest that accrues after the commencement of any case, proceeding
or other action relating to the bankruptcy, insolvency or reorganization of such
Person (or would accrue but for the operation of applicable bankruptcy or
insolvency laws), whether or not such interest is allowed or allowable as a
claim in any such proceeding.
"PROCEEDS" means all proceeds of, and all other profits, products,
rents or receipts, in whatever form, arising from the collection, sale,
exchange, assignment, or other disposition of, or other realization upon, any
Collateral, including all claims of the relevant Lien Grantor against third
parties for loss of, damage to or destruction of, or for proceeds payable under,
or unearned premiums with respect to, policies of insurance in respect of, any
Collateral, and any condemnation or requisition payments with respect to any
Collateral.
"RATIO" means, with respect to any Secured Bond Obligation, at any
time, the ratio of (i) the principal amount of such Secured Bond Obligation to
(ii) the principal amount outstanding under the Credit Agreements at such time.
"REFINANCING" means, with respect to any Credit Agreement, any renewal
or extension thereof (including pursuant to an amendment and restatement or a
replacement thereof).
"REFINANCING EFFECTIVE DATE" means, with respect to any Credit
Agreement, the first date on which a Refinancing thereof becomes effective.
"REPLACEMENT AGREEMENT" means, with respect to any Credit Agreement,
one or more credit agreements evidencing the Refinancing of such Credit
Agreement, but only if each such credit agreement is designated as a
"Replacement Agreement" for purposes of this Agreement by NNI or NNL, as the
case may be.
"REQUIRED SECURED BANKS" means, at any date, Included Banks at such
date having at least 51% of the aggregate amount, without duplication, of (i)
the "Commitments" under the applicable Credit Agreements and (ii) the aggregate
unpaid principal amount of the "Loans" under the applicable Credit Agreements.
"INCLUDED BANKS" means, at any date, the Banks party to either of the 2001
364-Day Agreements and, solely if such date occurs on or after the Refinancing
Effective Date with respect to any Credit Agreement, the Banks party to the
Replacement Agreement with respect to any Credit Agreement (subject to any
exclusion set forth in such Credit Agreement or a Replacement Agreement). Prior
to the first Refinancing Effective Date, the Included Banks will be the Banks
party to either 2001 364-
9
Day Credit Agreement and the "applicable Credit Agreements" for the purposes of
clauses (i) and (ii) will be each of the 2001 364-Day Agreements.
"S&P" means Standard & Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
"SECURED AGREEMENT", when used with respect to any Secured Obligation
of any Lien Grantor, refers to each instrument, agreement or other document that
sets forth obligations of each Lien Grantor and/or rights of the holder with
respect to such Secured Obligation.
"SECURED BOND OBLIGATIONS" means, at any date, the NNL Bond Obligations
and any Designated Capital Markets Debt containing provisions requiring that
such Designated Capital Markets Debt be equally and ratably secured at such date
with the debt under the Credit Agreements.
"SECURED OBLIGATIONS" means (1) the NNL Bank Obligations, (2) the NNL
Hedging Obligations, (3) the NNL Bond Obligations, (4) the NNL Guaranteed
Obligations, (5) any Designated Capital Markets Debt and (6) any Designated Bank
Debt.
"SECURED PARTIES" means the holders from time to time of the Secured
Obligations.
"SECURITY DOCUMENTS" means this Agreement, the U.S. Security Agreement,
the Canadian Security Agreement and all supplemental or additional security
agreements, control agreements or similar instruments delivered pursuant thereto
or pursuant to any NNL Credit Agreement or NNI Credit Agreement (other than any
such agreement or instrument with respect to real property).
"SPECIFIED EVENT OF DEFAULT" means an event described in Section
6.01(a), (f) or (g) of the Credit Agreements (or any corresponding provision of
any Replacement Agreement), or any Event of Default caused by a breach of any
financial or debt covenant contained in either 2001 364-Day Agreement; provided
that, on and after the Refinancing Effective Date with respect to any Credit
Agreement, "Specified Event of Default" for purposes of this Agreement will also
include any event of default caused by a breach of any financial or debt
covenant contained in any Replacement Agreement with respect to such Credit
Agreement or any other event of default that is designated in such Replacement
Agreement as a "Specified Event of Default" for the purpose of this Agreement.
"SUBSIDIARY" means, as to any Person, any corporation or other entity
of which securities or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions are at the time directly or indirectly owned by such Person; unless
otherwise specified, "Subsidiary" means a Subsidiary of NNL.
"TOTAL COLLATERAL" means the "Collateral" as defined in any Credit
Agreement (assuming, for this purpose, that Collateral includes all "Foreign
Subsidiary Guarantees" as defined in any Credit Agreement, in effect at the time
of determination).
"TRANSACTION LIENS" means the Liens granted by the Lien Grantors under,
and as defined in, any of the Security Documents.
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"2000 INDENTURE" means the Indenture dated as of December 15, 2000
among NNL, Nortel Networks Capital Corporation and Citibank, N.A. as trustee, as
amended from time to time.
"2001 INDENTURE" means the Indenture dated as of August 15, 2001 among
NNC, NNL, as guarantor, and The Bankers Trust Company, as trustee, as amended
from time to time.
"2002 NOTES" means the 6-7/8% Notes due 2002 issued by NTL pursuant to
the 1988 Indenture.
"2003 NOTES" means the 6% Notes due 2003 issued by NTL pursuant to the
1988 Indenture.
"2006 NOTES" means the 6.125% Notes due 2006 issued by NNL pursuant to
the 2000 Indenture.
"2006 NNCC NOTES" means the 7.40% Notes due 2006 issued by NTL pursuant
to the 1996 Indenture.
"2008 NOTES" means the 4.25% Convertible Senior Notes due 2008 issued
by NNC and guaranteed by NNL pursuant to the 2001 Indenture.
"2023 NOTES" means the 6-7/8% Notes due 2023 issued by NTL pursuant to
the 1988 Indenture.
"2026 NOTES" means the 7.875% Notes due 2026 issued by Northern Telecom
Capital Corporation and guaranteed by NTL pursuant to the 1996 Indenture.
"U.S. SECURITY AGREEMENT" means the U.S. Guarantee and Security
Agreement dated as of the date hereof among NNL, NNI, the Subsidiaries party
thereto and JPMorgan Chase Bank, as Collateral Agent.
"U.S. SUBSIDIARY" means, with respect to any Person, any Subsidiary
(which may be a corporation, limited liability company, partnership or other
legal entity) organized under the laws of the United States or any state
thereof.
(a) Special provision with respect to Refinancings. On and after the
Refinancing Effective Date with respect to any Credit Agreement, any reference
herein to such Credit Agreement (including for the avoidance of doubt any
reference to "2000 NNI 364-Day Agreement", "2000 NNI 5-Year Agreement", "2001
NNI 364-Day Agreement", "2000 NNL 364-Day Agreement", "2000 NNL 5-Year
Agreement" or the "2001 NNL 364-Day Agreement") shall be deemed to be a
reference to the Replacement Agreement with respect thereto.
(b) Terms Generally. The definitions of terms herein (including those
incorporated by reference to another document) apply equally to the singular and
plural forms of the terms defined. Whenever the context may require, any pronoun
includes the corresponding masculine, feminine and neuter forms. The words
"INCLUDE", "INCLUDES" and "INCLUDING" shall be deemed to be followed by the
phrase "WITHOUT LIMITATION". The word
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"WILL" shall be construed to have the same meaning and effect as the word
"SHALL". Unless the context requires otherwise, (i) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(ii) any reference herein to any Person shall be construed to include such
Person's successors and assigns, (iii) the words "HEREIN", "HEREOF" and
"HEREUNDER", and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (iv) all
references herein to Sections, Exhibits and Schedules shall be construed to
refer to Sections of, and Exhibits and Schedules to, this Agreement and (v) the
word "PROPERTY" shall be construed to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights.
SECTION 2. Pledge of Equity Interests. (a) Each Lien Grantor, in order
to secure its Secured Obligations, grants to the Collateral Agent for the
benefit of the Secured Parties, effective on the first day of any Collateral
Period, in accordance with Section L. 431-4 of the French Monetary and Financial
Code, a continuing security interest in all the following property of such Lien
Grantor:
(i) the Equity Interest Account held directly by such Lien Grantor
and all of its rights and privileges with respect thereto, and
all income and profits thereon, all interest, dividends and other
payments and distributions with respect thereto;
(ii) such Lien Grantor's ownership interest in its Cash Collateral
Account and all cash held therein from time to time; and
(iii) all Proceeds of the Collateral described in the foregoing clauses
(i) and (ii).
The Pledge shall terminate in accordance with Section 16.
(b) The Pledge is granted as security only and shall not subject the
Collateral Agent or any other Secured Party to, or transfer or in any way affect
or modify, any obligation or liability of any Lien Grantor with respect to any
of the Collateral or any transaction in connection therewith.
SECTION 3. General Representations, Warranties and Covenants. Each
Lien Grantor represents and warrants, at the times set forth below, and
covenants, where indicated below, as follows.
(a) Each Lien Grantor represents and warrants, on the first day of the
first Collateral Period and on each Drawdown Date, that, at such time, such Lien
Grantor is a corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of organization of which such Lien Grantor
shall have on or prior to such time have given written notice to the Collateral
Agent.
(b) Each Lien Grantor represents and warrants, on the first day of the
first Collateral Period, that Schedule 1 lists all Pledged Equity Interests
owned by such Lien Grantor on the date of delivery of Schedule 1 and held
directly by such Lien Grantor (i.e., not through a Subsidiary, a securities
intermediary or any other Person).
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(c) Each Lien Grantor represents and warrants, on the first day of the
first Collateral Period, that all Pledged Equity Interests owned by such Lien
Grantor at such time are owned by it free and clear of any Lien other than (i)
the Transaction Liens and (ii) any tax liens, judgment liens, put/call
arrangements and Liens existing on the date of this Agreement that are Permitted
Liens. Each Lien Grantor covenants that it will cause all Pledged Equity
Interests owned by such Lien Grantor from time to time to be owned by it free
and clear of any Lien other than (i) the Transaction Liens and (ii) any tax
liens, judgment liens, put/call arrangements and Liens existing on the date of
this Agreement that are Permitted Liens. Such Lien Grantor represents and
warrants, on the first day of the first Collateral Period and on each Drawdown
Date, that all Pledged Equity Interests at such time have been validly issued
and are fully paid. Such Lien Grantor covenants that it will ensure that none of
the Pledged Equity Interests of such Lien Grantor are subject to any option to
purchase or similar right of any Person. Such Lien Grantor covenants that it
will not become a party to or otherwise bound by any agreement (except the
Credit Agreements, the Security Documents and the Indentures) which restricts in
any manner the rights of any present or future holder of any Pledged Equity
Interest of such Lien Grantor with respect thereto.
(d) Each Lien Grantor represents and warrants, on the first day of the
first Collateral Period and on each Drawdown Date, that, at each such time, (i)
no financing statement, security agreement, mortgage or similar or equivalent
document or instrument covering all or part of the Collateral owned by such Lien
Grantor is on file or of record in any jurisdiction in which such filing or
recording would be effective to perfect or record a Lien on such Collateral,
except financing statements, financing change statements, mortgages or other
similar or equivalent documents with respect to Permitted Liens and (ii) no
Collateral owned by such Lien Grantor is in the possession or under the control
of any other Person having a claim thereto or security interest therein, other
than a Permitted Lien.
(e) Each Lien Grantor represents and warrants, on the first day of the
first Collateral Period that, when the actions which are required to be taken in
order to create and perfect a Pledge (make the Pledge enforceable against the
Lien Grantor and third parties) with respect to any Collateral, as disclosed in
writing to the Collateral Agent or its counsel on or prior to such date by any
NNL Company or its counsel, have been taken, then at such time such Pledge (i)
will have been validly created, (ii) attach to each item of such Collateral on
such date (or, if such Lien Grantor first obtains rights thereto on a later
date, on such later date), (iii) when so attached, will secure all the Secured
Obligations of such Lien Grantor and (iv) will constitute a perfected security
interest in such Collateral owned by such Lien Grantor prior to all Liens and
rights of others therein, except Permitted Liens.
(f) Each Lien Grantor represents and warrants, on each Drawdown Date,
that, on such date, the Pledges (i) have been validly created, (ii) attached to
each item of such Collateral on such date (or, if such Lien Grantor first
obtains rights thereto on a later date, on such later date), (iii) when so
attached, secure all the Secured Obligations of such Lien Grantor and (iv) will
constitute a perfected security interests in the Collateral owned by such Lien
Grantor prior to all Liens and rights of others therein, except Permitted Liens;
provided that if the Collateral Agent shall have determined in its good faith
discretion that creating or perfecting a security interest in any Collateral
(making such security interest enforceable against the Lien Grantor and third
parties) by such Drawdown Date is impossible, impracticable or unreasonably
burdensome, the Collateral Agent may, in its good faith
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discretion, consent to a waiver of compliance with this representation and
warranty on such Drawdown Date (which waiver (x) may at the option of the
Collateral Agent be limited in duration, (y) shall in any event be granted and
shall be unlimited in duration if such Collateral is De Minimus Collateral). "DE
MINIMUS COLLATERAL" means, at any Drawdown Date, any Equity Interests so long as
such Equity Interests, together with all other Equity Interests that are
proposed to constitute "De Minimus Collateral" on such Drawdown Date, constitute
the Equity Interests of Persons that (together with their consolidated
subsidiaries, without duplication) in the aggregate have consolidated revenues
that are less than 5% of the consolidated revenues of NNL and its Subsidiaries,
as set forth in the most recent audited consolidated financial statement of NNL
and its consolidated subsidiaries delivered to the Banks or made publicly
available. Without limiting any other obligations of any Lien Grantor set forth
in this Agreement, each Lien Grantor agrees that it will use its commercially
reasonable efforts to ensure that the Pledges with respect to any Equity
Interests that constitute De Minimus Collateral are validly created and
perfected (made enforceable against the Lien Grantor and third parties).
(g) Each Lien Grantor represents and warrants, on the first day of each
Collateral Period and on each Drawdown Date, that, except as disclosed in
writing to the Collateral Agent or its counsel on or prior to such date by NNL
or its counsel, no registration, recordation or filing with or consent or
approval of any governmental body, agency or official is required in connection
with the execution or delivery of the Pledge Documents or is necessary for the
validity or enforceability thereof or for the perfection or enforcement of the
Pledge.
(h) Each Lien Grantor represents and warrants, on the first day of the
first Collateral Period and on each Drawdown Date, that, at such time, no
Pledged Equity Interest is held through a securities intermediary.
SECTION 4. Additional Covenants. Each Lien Grantor covenants that such
Lien Grantor will not effect any Asset Sale with respect to any Collateral if at
any such time a Specified Event of Default has occurred and is continuing.
SECTION 5. Equity Interests. Each Lien Grantor represents and warrants,
at the times set forth below, and covenants, where indicated below, as follows:
(a) Pledge Declaration. On the first day of the first Collateral Period
and on each Drawdown Date, such Lien Grantor represents and warrants that it has
executed and delivered a Pledge Declaration in respect of the Collateral owned
by such Lien Grantor as of such date and delivered such Pledge Declaration to
the Collateral Agent.
(b) Perfection as to Uncertificated Securities. Such Lien Grantor
represents and warrants that, at the time that such Lien Grantor executes the
Pledge Declaration in respect of the Collateral owned by such Lien Grantor, the
Pledge of such Collateral will be perfected, subject to no prior Liens or rights
of others other than tax liens, judgment liens, put/call arrangements and Liens
existing on the date of this Agreement that are Permitted Liens.
(c) Further Assurances. Each Lien Grantor authorizes the Collateral
Agent to execute and file financing statements and continuation statements under
the Uniform Commercial Code applicable to any relevant U.S. jurisdiction (the
"UCC"), and agrees that it
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shall pay the reasonable costs thereof or incidental thereto. The Lien Grantor
covenants that it will, and authorizes the Collateral Agent to, at the Lien
Grantor's expense and in such manner and form as the Collateral Agent may
reasonably require, execute, deliver, file and record any financing statement,
specific assignment or other paper and take all other action and enter into such
other agreements as may be necessary or desirable or that the Collateral Agent
reasonably may request, in order to create, preserve, perfect or validate any
Pledge or to enable the Collateral Agent to exercise and enforce its rights
hereunder with respect to any of the Collateral. Each Lien Grantor agrees that
it shall, at all times during a Collateral Period, cause the Pledged Equity
Interest Accounts to be credited with all Equity Interests owned by such Lien
Grantor in each Subsidiary either listed in Schedule 1 or whose Equity Interests
are added to the Collateral pursuant to Section 17 to the extent necessary to
satisfy, with respect to such Subsidiary, the requirement set forth in any
Credit Agreement relating to the granting of a security interest in the Equity
Interests of certain Material Subsidiaries.
SECTION 6. Cash Collateral Accounts.
(a) If and when required for purposes hereof, the Collateral Agent will
establish with respect to each Lien Grantor an account (its "CASH COLLATERAL
ACCOUNT"), in the name and under the exclusive control of the Collateral Agent,
subject to Section 6(d).
(b) The Collateral Agent shall deposit the following amounts, as and
when received by it, in each Lien Grantor's Cash Collateral Account: (i) each
Cash Distribution required by Section 9 to be deposited therein and (ii) each
amount received by the Collateral Agent with respect to assets of such Lien
Grantor upon any exercise of remedies pursuant to any Pledge Document upon the
occurrence and during the continuance of (x) with respect to Illiquid
Collateral, an Event of Default and (y) with respect to Liquid Collateral, a
Specified Event of Default.
(c) The Collateral Agent shall maintain such records and/or establish
such sub-accounts as shall be required to enable it to identify the amounts held
in each Cash Collateral Account from time to time pursuant to Section 6(b).
(d) Unless (x) an Event of Default shall have occurred and be
continuing and the Required Secured Banks shall have instructed the Collateral
Agent to stop withdrawing amounts from the Cash Collateral Accounts pursuant to
this subsection or (y) the maturity of any of the Bonds or the indebtedness
outstanding under the Credit Agreements shall have been accelerated, any Cash
Distribution or other amounts deposited in the Cash Collateral Account shall, at
the relevant Lien Grantor's request, (x) be withdrawn and applied to pay Secured
Obligations that are then due and payable or (y) if no Event of Default has
occurred and is continuing, be withdrawn and returned to such Lien Grantor.
SECTION 7. Operation of Cash Collateral Accounts. (a) All Cash
Distributions received with respect to Permitted Investments held in a Cash
Collateral Account shall be deposited therein promptly upon receipt thereof.
(b) So long as no Specified Event of Default shall have occurred and be
continuing, funds held in any Cash Collateral Account may, until withdrawn, be
invested and reinvested in Permitted Investments; provided that if a Specified
Event of Default shall have occurred and be continuing, the Collateral Agent may
select such Permitted Investments.
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(c) So long as a Specified Event of Default shall have occurred and be
continuing, a Lien Grantor will not permit funds to be transferred from any Cash
Collateral Account to any other account owned by an NNL Company unless such
other account is a "Collateral Account" as defined in any Security Document by
which such Lien Grantor is bound and such transfer is permitted under the Credit
Agreements by which such Lien Grantor is bound.
(d) If a Specified Event of Default shall have occurred and be
continuing, the Collateral Agent may (i) retain all cash and investments then
held in any Cash Collateral Account, (ii) liquidate any or all investments held
therein and/or (iii) withdraw any amounts held therein and apply such amounts as
provided in Section 11.
(e) If a Specified Event of Default shall have occurred and be
continuing, and immediately available cash on deposit in any Cash Collateral
Account is not sufficient to make any distribution or withdrawal to be made
pursuant hereto, the Collateral Agent will cause to be liquidated, as promptly
as practicable, such investments held in or credited to such Cash Collateral
Account as shall be required to obtain sufficient cash to make such distribution
or withdrawal and, notwithstanding any other provision hereof, such distribution
or withdrawal shall not be made until such liquidation has taken place.
SECTION 8. Right to Vote Securities. (a) Unless an Event of Default
shall have occurred and be continuing, each Lien Grantor will have the right,
from time to time, to vote and to give consents, ratifications and waivers with
respect to any Pledged Equity Interests owned by it.
(b) If an Event of Default shall have occurred and be continuing, the
Collateral Agent, upon exercise of the remedies available to it under the Pledge
Documents, will have the right to the extent permitted by law to vote, to give
consents, ratifications and waivers and to take any other action with respect to
Pledged Equity Interests with the same force and effect as if the Collateral
Agent were the absolute and sole owner thereof, and each Lien Grantor will take
all such action as the Collateral Agent may reasonably request from time to time
to give effect to such right.
SECTION 9. Certain Cash Distributions. Cash Distributions with respect
to Permitted Investments held in a Cash Collateral Account shall be deposited
and held therein, or withdrawn therefrom, as provided in Section 6 and 7. If a
Specified Event of Default shall have occurred and be continuing, Cash
Distributions (other than in amounts less than $3,000,000) with respect to any
Pledged Equity Interest (whether held in the name of a Lien Grantor or in the
name of the Collateral Agent or its nominee) shall be deposited, as soon as
practicable upon receipt thereof, in a "Pledged Deposit Account" (as defined in
the Canadian Security Agreement) of the relevant Lien Grantor if such account
exists at such time and otherwise, in a Cash Collateral Account (provided that
if the Collateral Agent has not established at such time a Cash Collateral
Account with respect to such Lien Grantor, such Lien Grantor shall be required
to deposit such Cash Distributions as soon as practicable after such an account
is established) and if applicable, applied in accordance with the prepayment
provisions of the 2001 364-Day Agreements and in any other applicable Credit
Agreement.
SECTION 10. Remedies Upon Event of Default or Specified Event of
Default. If (x) with respect to Illiquid Collateral, an Event of Default shall
have occurred and be continuing , or (y) with respect to Liquid Collateral, a
Specified Event of Default shall have occurred and
16
be continuing, the Collateral Agent may exercise (or cause its sub-agents to
exercise) any or all of the remedies available to it (or to such sub-agents)
under the Pledge Documents with respect to Illiquid Collateral and Liquid
Collateral, respectively. Without limiting the generality of the foregoing, if
an Event of Default shall have occurred and be continuing, the Collateral Agent
may exercise on behalf of the Secured Parties all the rights of a pledgor under
Section L. 431-4 of the French Monetary and Financial Code, including to
withdraw all cash held in the Cash Collateral Account and apply such cash as
provided in Section 11 and, if there shall be no such cash or if such cash shall
be insufficient to pay all the Secured Obligations in full, to have the Pledged
Equity Interest sold in accordance with Section L.521-3 of the French commercial
Code or any part thereof.
SECTION 11. Application of Proceeds. (a) The Collateral Agent may (i)
if a Specified Event of Default shall have occurred and be continuing, apply any
cash held in the Cash Collateral Accounts and (ii) if (x) with respect to
Illiquid Collateral, an Event of Default shall have occurred and be continuing
or (y) with respect to Liquid Collateral, a Specified Event of Default shall
have occurred and be continuing, apply the proceeds of any sale or other
disposition of all or any part of the Illiquid Collateral or Liquid Collateral,
as applicable, in the following order of priorities:
(1) to pay the expenses of such sale or other disposition,
including reasonable compensation to agents of and counsel for the
Collateral Agent, and all reasonable expenses, liabilities and advances
incurred or made by the Collateral Agent in connection with the
Security Documents, and any other amounts then due and payable to the
Collateral Agent pursuant to Section 12 or any amounts owing to any
Indenture Trustee under Section (x) Section 5.05 of each of the 1988
Indenture, the 1996 Indenture and the ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and (y) Section
6.10 of the 2001 Indenture;
(2) to pay the due and unpaid principal, face amount or
termination amount of the Secured Obligations ratably, on the basis of
the principal or face amount of such Secured Obligations (or, with
respect to Contingent Secured Obligations, provide for the payment
thereof pursuant to Section 11(b)), until payment in full of the
principal of all Secured Obligations shall have been made (or, with
respect to Contingent Secured Obligations, so provided for);
(3) to pay ratably the due and unpaid interest accrued on the
Secured Obligations in accordance with the provisions of the applicable
Secured Agreement, as applicable;
(4) to pay all other due and unpaid Secured Obligations and all
due and unpaid commitment fees and participation fees under each Credit
Agreement ratably (or, with respect to Contingent Secured Obligations,
provide for the payment thereof pursuant to Section 11(b)), until
payment in full of all such other Secured Obligations and fees shall
have been made (or, with respect to Contingent Secured Obligations, so
provided for); and
(5) to pay to the relevant Lien Grantor, or as a court of
competent jurisdiction may direct, any surplus then remaining from the
proceeds of the Collateral owned by it;
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provided that Collateral owned by any Lien Grantor and any proceeds thereof
shall be applied pursuant to the foregoing clauses (1), (2), (3) and (4) of this
Section 11(a) to the Secured Obligations of such Lien Grantor only up to an
aggregate amount equal to the largest amount that would not render such
application of such Collateral or proceeds thereof invalid or unenforceable
under laws applicable to such Lien Grantor. The Collateral Agent may make such
distributions hereunder in cash or in kind or, on a ratable basis, in any
combination thereof.
(b) If at any time any portion of any monies collected or received by
the Collateral Agent would, but for the provisions of this Section 11(b), be
payable pursuant to Section 11(a) in respect of a Contingent Secured Obligation,
the Collateral Agent shall not apply any monies to pay such Contingent Secured
Obligation but instead (x) notify the holder of such Contingent Secured
Obligation and (y) with respect to the holder of such Contingent Secured
Obligations excluding the holder of any Secured Bond Obligation, request the
holder thereof, at least 10 days before each proposed distribution hereunder, to
notify the Collateral Agent as to the maximum amount of such Contingent Secured
Obligation if then ascertainable (e.g., in the case of a letter of credit, the
maximum amount available for subsequent drawings thereunder). If the holder of
such Contingent Secured Obligation (excluding the holder of any Secured Bond
Obligation) does not notify the Collateral Agent of the maximum ascertainable
amount thereof at least two Business Days before such distribution, such holder
will not be entitled to share in such distribution. If such holder does so
notify the Collateral Agent as to the maximum ascertainable amount thereof, or
if such holder is the holder of any Secured Bond Obligation (regardless of
whether such holder has provided any notice to the Collateral Agent), the
Collateral Agent will allocate to such holder a portion of the monies to be
distributed in such distribution, calculated as if such Contingent Secured
Obligation were outstanding in such maximum ascertainable amount. However, the
Collateral Agent will not apply such portion of such monies to pay such
Contingent Secured Obligation, but instead will hold such monies and invest such
monies in Liquid Investments. All such monies and Liquid Investments and all
proceeds thereof will constitute Collateral hereunder, but will be subject to
distribution in accordance with this Section 11(b) rather than Section 11(a).
The Collateral Agent will hold all such monies and Liquid Investments and the
net proceeds thereof in trust until all or part of such Contingent Secured
Obligation becomes a Non-Contingent Secured Obligation, whereupon the Collateral
Agent at the request of the relevant Secured Party will apply the amount so held
in trust to pay such Non-Contingent Secured Obligation; provided that, if the
other Secured Obligations theretofore paid pursuant to the same clause of
Section 11(a) (i.e. clause (2) or (4)) were not paid in full, the Collateral
Agent will apply the amount so held in trust to pay the same percentage of such
Non-Contingent Secured Obligation as the percentage of such other Secured
Obligations theretofore paid pursuant to the same clause of Section 11(a). If
(i) the holder of such Contingent Secured Obligation shall advise the Collateral
Agent that no portion thereof remains in the category of a Contingent Secured
Obligation and (ii) the Collateral Agent still holds any amount held in trust
pursuant to this Section 11(b) in respect of such Contingent Secured Obligation
(after paying all amounts payable pursuant to the preceding sentence with
respect to any portions thereof that became Non-Contingent Secured Obligations),
such remaining amount will be applied by the Collateral Agent in the order of
priorities set forth in Section 11(a).
(c) With respect to any Secured Bond Obligation, whether or not a
Contingent Secured Obligation, including, without limitation, the principal
outstanding of and interest on
18
such Secured Bond Obligation, an amount (the "DETERMINED AMOUNT") with respect
to such Secured Bond Obligation shall be required to be paid or held by the
Collateral Agent with respect to each of Sections 11(a)(1), 11(a)(3) and
11(a)(4) (each, a "LEVEL") equal to (x) the Ratio multiplied by (y) the sum of
(A) the proceeds of any sale or other disposition of Collateral that are, in
fact, being applied by the Collateral Agent to amounts owed under the Credit
Agreements at the applicable Level, plus (B) the proceeds of such Collateral
proposed to be held by the Collateral Agent pursuant to Section 11(b) to cover
the Contingent Secured Obligations relating to the Credit Agreements at such
Level in accordance with Section 11(b). Notwithstanding the foregoing, if the
amount to be applied to the Secured Bond Obligations at any Level would be
greater if the Ratio were calculated by reference to a Secured Obligation (other
than the principal under the Credit Agreements) that constitutes "Funded Debt"
under any Indenture, such Secured Obligation shall be used in order to determine
the amount to be applied to the Secured Bond Obligations at such Level. Section
11 of this Agreement (including this Section 11(c)) is intended to comply with
the equal and ratable negative pledge provisions of the Indentures and shall be
construed to give effect to such intention. The Collateral Agent shall be
obligated to offer to pay to the relevant Indenture Trustee any portion of the
Determined Amounts that are, in fact, due and payable at such time as such
Determined Amounts are calculated, and the Collateral Agent shall deposit any
remaining portion of such Determined Amounts and any amounts not accepted by the
relevant Indenture Trustee in a segregated account solely for the benefit of the
holders of the relevant Secured Bond Obligation (and all amounts on deposit in
such account shall be invested in Liquid Investments).
(d) In making the payments and allocations required by this Section 11,
the Collateral Agent may rely upon information supplied to it pursuant to
Section 15(e). All distributions made by the Collateral Agent pursuant to this
Section 11 shall be final (except in the event of manifest error) and the
Collateral Agent shall have no duty to inquire as to the application by any
Secured Party of any amount distributed to it.
SECTION 12. Fees and Expenses. Each Lien Grantor will forthwith upon
demand pay to the Collateral Agent: (a) the amount of any taxes that the
Collateral Agent may have been required to pay by reason of the Transaction
Liens or to free any Collateral from any other Lien thereon; (b) the amount of
any and all reasonable out-of-pocket expenses, including transfer taxes and
reasonable fees and expenses of counsel and other experts, that the Collateral
Agent may incur in connection with (i) the administration or enforcement of the
Security Documents, including such reasonable out-of-pocket expenses as are
incurred to preserve the value of the Collateral or the validity, perfection or
value of this Lien, (ii) the collection, sale or other disposition of the
Collateral or (iii) the exercise by the Collateral Agent of any of its rights or
powers under the Pledge Documents; (c) the amount of any fees that any Lien
Grantor shall have agreed in writing to pay to the Collateral Agent and that
shall have become due and payable in accordance with such written agreement and
(d) the amount required to indemnify the Collateral Agent for, or hold it
harmless and defend it against, any loss, liability or expense (including the
reasonable fees and out-of-pocket expenses of its counsel and any experts or
sub-agents appointed by it hereunder) incurred or suffered by the Collateral
Agent in connection with the Pledge Documents, except to the extent that such
loss, liability or expense arises from the Collateral Agent's gross negligence
or willful misconduct or a breach of any duty that the Collateral Agent has
under this Agreement (after giving effect to Section 14 and Section 15). Any
such amount not paid to the Collateral Agent as soon as practicable will bear
interest for each day thereafter until paid at a rate per annum
19
equal to the sum of 2% plus the highest rate applicable to the base rate loans
under the Credit Agreements. If any transfer tax, documentary stamp tax,
withholding tax or other tax is payable in connection with any transfer or other
transaction provided for in the Pledge Documents, the Lien Grantors will pay
such tax and provide any required tax stamps to the Collateral Agent or as
otherwise required by law.
SECTION 13. Authority to Administer Collateral. Each Lien Grantor
irrevocably appoints the Collateral Agent its true and lawful attorney, with
full power of substitution, in the name of such Lien Grantor, any Secured Party
or otherwise, for the sole use and benefit of the Secured Parties, but at NNI's
expense, to the extent permitted by French law (including, in particular,
Section L.431-4 of the French Monetary and Financial Code), to exercise at any
time and from time to time while (x) an Event of Default with respect to
Illiquid Collateral and (y) a Specified Event of Default with respect to Liquid
Collateral shall have occurred and be continuing, all or any of the following
powers with respect to all or any of such Lien Grantor's Collateral:
(a) to demand, ▇▇▇ for, collect, receive and give acquittance
for any and all monies due or to become due upon or by virtue thereof;
(b) to settle, compromise, compound, prosecute or defend any
action or proceeding with respect thereto;
(c) to sell or otherwise dispose of the same or the proceeds
or avails thereof, as fully and effectually as if the Collateral Agent
were the absolute owner thereof; and
(d) to extend the time of payment of any or all thereof and to
make any allowance or other adjustment with reference thereto.
SECTION 14. Limitation on Duty in Respect of Collateral. Beyond the
exercise of reasonable care in the custody and preservation thereof, the
Collateral Agent will have no duty as to any Collateral in its possession or
control or in the possession or control of any subagent or bailee selected by it
in good faith or any income therefrom or as to the preservation of rights
against prior parties or any other rights pertaining thereto. The Collateral
Agent will be deemed to have exercised reasonable care in the custody and
preservation of the Collateral in its possession or control if such Collateral
is accorded treatment substantially equal to that which it accords its own
property, and will not be liable or responsible for any loss or damage to any
Collateral, or for any diminution in the value thereof, by reason of any act or
omission of any sub-agent or bailee selected by the Collateral Agent in good
faith, except to the extent that such liability arises from the Collateral
Agent's gross negligence or willful misconduct.
SECTION 15. General Provisions Concerning the Collateral Agent. (a)
Authority. To the extent permitted by law, the Collateral Agent is authorized to
take such actions and to exercise such powers as are delegated to the Collateral
Agent by the terms of the Security Documents, together with such actions and
powers as are reasonably incidental thereto.
(b) Rights and Powers as a Secured Party. The bank serving as the
Collateral Agent shall, in its capacity as a Secured Party, have the same rights
and powers as any other Secured Party and may exercise the same as though it
were not the Collateral Agent. Such bank and
20
its affiliates may accept deposits from, lend money to and generally engage in
any kind of business with any NNL Company as if it were not the Collateral Agent
hereunder.
(c) Limited Duties and Responsibilities. The Collateral Agent shall
not have any duties or obligations under the Security Documents except those
expressly set forth therein. Without limiting the generality of the foregoing,
(a) the Collateral Agent shall not be subject to any fiduciary or other implied
duties, regardless of whether an Event of Default has occurred and is
continuing, (b) the Collateral Agent shall not have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated by the Security Documents that the
Collateral Agent is required in writing to exercise by the Required Secured
Banks (or such other number or percentage of the Banks as shall be necessary
under the relevant circumstances, and (c) except as expressly set forth in the
Credit Agreements, the Collateral Agent shall not have any duty to disclose, and
shall not be liable for any failure to disclose, any information relating to any
NNL Company that is communicated to or obtained by the bank serving as
Collateral Agent or any of its affiliates in any capacity. The Collateral Agent
shall not be liable for any action taken or not taken by it with the consent or
at the request of the Required Secured Banks or in the absence of its own gross
negligence or wilful misconduct. The Collateral Agent shall not be responsible
for the existence, genuineness or value of any Collateral or for the validity,
perfection, priority or enforceability of any Transaction Lien, whether impaired
by operation of law or by reason of any action or omission to act on its part
under the Security Documents in either case absent its own gross negligence or
willful misconduct. The Collateral Agent shall be deemed not to have knowledge
of any Event of Default unless and until written notice thereof is given to the
Collateral Agent by any Lien Grantor or a Secured Party, and the Collateral
Agent shall not be responsible for or have any duty to ascertain or inquire into
(i) any statement, warranty or representation made in or in connection with any
Security Document, (ii) the contents of any certificate, report or other
document delivered thereunder or in connection therewith other than by it, (iii)
the performance or observance of any of the covenants, agreements or other terms
or conditions set forth in any Security Document, (iv) the validity,
enforceability, effectiveness or genuineness of any Security Document or any
other agreement, instrument or document, or (v) the satisfaction of any
condition set forth in any Security Document.
(d) Authority to Rely on Certain Writings, Statements and Advice. The
Collateral Agent shall be entitled to rely on, and shall not incur any liability
for relying on, any notice, request, certificate, consent, statement,
instrument, document or other writing believed by it to be genuine and to have
been signed or sent by the proper Person. The Collateral Agent also may rely on
any statement made to it orally or by telephone and believed by it to be made by
the proper Person, and shall not incur any liability for relying thereon. The
Collateral Agent may consult with legal counsel (who may be counsel for any NNL
Company), independent accountants and other experts selected by it, and shall
not be liable for any action taken or not taken by it in accordance with the
advice of any such counsel, accountant or expert. The Collateral Agent may rely
conclusively on advice from the applicable Indenture Trustee as to whether at
any time the maturity of any Bonds has been accelerated.
(e) Sub-Agents and Related Parties. The Collateral Agent may perform
any of its duties and exercise any of its rights and powers through one or more
sub-agents appointed by it in good faith. The Collateral Agent and any such
sub-agent may perform any of its duties and exercise any of its rights and
powers through its directors, officers, employees and agents
21
(the "RELATED PARTIES"). The exculpatory provisions of Section 14 and this
Section 15 shall apply to any such sub-agent and the Related Parties of the
Collateral Agent and any such subagent.
(f) Information as to Secured Obligations and Actions by Secured
Parties. For all purposes of the Pledge Documents, including determining the
amounts of the Secured Obligations and whether a Secured Obligation is a
Contingent Secured Obligation or not, or whether any action has been taken under
any Secured Agreement, the Collateral Agent will be entitled to rely on
information from (i) its own records for information as to the Banks, their
Secured Obligations and actions taken by them, (ii) the relevant Indenture
Trustee for information as to the Secured Obligations outstanding under any
Indenture and actions taken by the holders thereof, (iii) any Secured Party for
information as to its Secured Obligations and actions taken by it, to the extent
that the Collateral Agent has not obtained such information from the foregoing
sources and (iv) NNL, to the extent that the Collateral Agent has not obtained
information from the foregoing sources.
(g) The Collateral Agent may refuse to act on any notice, consent,
direction or instruction from any Secured Parties or any agent, trustee or
similar representative thereof that, in the Collateral Agent's opinion, (i) is
contrary to law or the provisions of any Pledge Document, (ii) may expose the
Collateral Agent to liability (unless the Collateral Agent shall have been
indemnified, to its reasonable satisfaction, for such liability by the Secured
Parties that gave such notice, consent, direction or instruction) or (iii) is
unduly prejudicial to Secured Parties not joining in such notice, consent,
direction or instruction.
(h) Resignation; Successor Collateral Agent. Subject to the appointment
and acceptance of a successor Collateral Agent as provided in this subsection
15(g), the Collateral Agent may resign at any time by notifying the Banks and
NNL. Upon any such resignation, the Required Secured Banks shall have the right
to appoint a successor Collateral Agent reasonably acceptable to NNL. If no
successor shall have been so appointed by the Required Secured Banks and shall
have accepted such appointment within 30 days after the retiring Collateral
Agent gives notice of its resignation, then the retiring Collateral Agent may,
on behalf of the Secured Parties, appoint a successor Collateral Agent
reasonably acceptable to NNL which shall be a bank with an office in New York,
New York or Toronto, Ontario, or an affiliate of any such bank. Upon acceptance
of its appointment as Collateral Agent hereunder by a successor, such successor
shall succeed to and become vested with all the rights, powers, privileges and
duties of the retiring Collateral Agent hereunder, and the retiring Collateral
Agent shall be discharged from its duties and obligations hereunder. The fees
payable by NNL to a successor Collateral Agent shall be the same as those
payable to its predecessor unless otherwise agreed by NNL and such successor.
After the Collateral Agent's resignation hereunder, the provisions of this
Section 15 and Section 14 shall continue in effect for the benefit of such
retiring Collateral Agent, its sub-agents and their respective Related Parties
in respect of any actions taken or omitted to be taken by any of them while the
retiring Collateral Agent was acting as Collateral Agent.
SECTION 16. Termination of Pledges; Release of Collateral. (a) The
Pledges granted by each Lien Grantor shall terminate on the earlier of (i) any
Investment Grade Date and (ii) the Bank Termination Date. As soon as possible
after the last day of any Collateral Period, (i) the Collateral Agent will
deliver to each Lien Grantor a release of the Pledge ("mainlevee de
nantissement"), so that the Pledge can be struck off the share registers of
NNSA, and (ii) the
22
Lien Grantors will deliver new executed (undated) declarations of pledge, in a
form compliant with applicable provisions of French Decree no. 97-509 of
May 21, 1997.
(b) On the first day on which a Foreign Subsidiary Guarantee (as
defined in any Credit Agreement) is in full force and effect with respect to a
Material Subsidiary, any Pledge with respect to any Equity Interest held in such
Material Subsidiary will cease immediately without any action by the Collateral
Agent or any other Secured Party, save for the issuance of a release of the
Pledge, as may be required, by the Material Subsidiary concerned.
(c) Concurrently with any sale, exchange, assignment or other
disposition by any Lien Grantor (except a sale, exchange, assignment or other
disposition to another Lien Grantor whose "Secured Obligations" hereunder
include "Secured Obligations" of the Lien Grantor effecting such sale or other
disposition), of the Collateral permitted by the Credit Agreements and not
expressly prohibited by this Agreement, the Pledge of the assets sold or
disposed of (but not in any Proceeds arising from such sale or disposition) will
cease immediately without any action by the Collateral Agent or any other
Secured Party, save for the issuance of a release of the Pledge, as may be
required by the Material Subsidiary concerned.
(d) Upon any Collateral of any Lien Grantor consisting of cash, cash
equivalents or Permitted Investments becoming the subject of a hedging
transaction permitted under the terms of the Credit Agreements, the Pledge
thereof (but not in any Proceeds of such Lien Grantor's rights under such
hedging transaction) will cease immediately without any action by the Collateral
Agent or any other Secured Party; provided that, if the transaction pursuant to
which such Collateral becoming the subject of a hedging transaction is an Asset
Sale, no Specified Event of Default shall have occurred and be continuing.
(e) Upon any Collateral of any Lien Grantor consisting of securities
subject to a put/call arrangement permitted by the terms of the Credit
Agreements being transferred to any person as a result of the exercise of such
put call arrangement, the Pledge thereof (but not in any Proceeds of such
transfer) will cease immediately without any action by the Collateral Agent or
any other Secured Party; provided that, if the transaction pursuant to which
such Collateral being so transferred is an Asset Sale, no Specified Event of
Default shall have occurred and be continuing.
(f) In addition to the foregoing, at any time before the Pledges
terminate, the Collateral Agent may (i) release any Collateral (but not all or
any substantial part of the Total Collateral) with the prior written consent of
the Required Secured Banks, (ii) release all or any substantial part of the
Total Collateral with the prior written consent of all Banks under the 2001
364-Day Agreements and, if such release is to occur on or after the Refinancing
Effective Date with respect to any Credit Agreement, all the Banks under the
Replacement Agreement with respect to such Credit Agreement (subject to any
exclusion set forth in such Credit Agreement) or (ii) amend this Agreement so
that the Secured Obligations of any Lien Grantor excludes the obligations under
any Credit Agreement with the prior written consent of all Banks party to such
Credit Agreement. In this latter case, the parties to this Agreement undertake
to take whatever steps and execute whatever documents that will be necessary
(including any release and any declaration of pledge in a form compliant with
applicable provisions of French Decree no. 97-509 of May 21, 1997) to implement
such amendment(s) to this Agreement.
23
(g) Upon any termination of a Pledge or release of Collateral, or
change in the Secured Obligations of any Lien Grantor, the Collateral Agent
will, promptly, at the expense of the relevant Lien Grantor, execute and deliver
to such Lien Grantor such documents as such Lien Grantor shall reasonably
request to evidence the termination of such Pledge or the release of such
Collateral, or change in the Secured Obligations, as the case may be, and shall
deliver to such Lien Grantor any documents or instruments, including without
limitation stock certificates, evidencing any Collateral no longer subject to
any Pledge.
SECTION 17. Additional Lien Grantors. Any person may become a party
hereto by signing and delivering to the Collateral Agent a Pledge Agreement
Supplement, whereupon such person shall become an "Additional Lien Grantor". Any
Subsidiary which is (1) a Subsidiary of NNL and (2) not a U.S. Subsidiary shall
be required to become an "Additional Lien Grantor" if required to do so by the
provisions of the Credit Agreements. The parties to this Agreement undertake to
take whatever steps and execute whatever documents that will be necessary
(including any release and any declaration of pledge) to implement this Section
17.
SECTION 18. Additional Secured Obligations. (a) Any Lien Grantor may
from time to time designate any indebtedness constituting a Capital Markets
Event ("DESIGNATED CAPITAL MARKETS DEBT") as an additional Secured Obligation by
delivering to the Collateral Agent a certificate signed by a financial officer
that (i) identifies such indebtedness and the material terms thereof and (ii)
states the obligations thereunder are designated as Secured Obligations;
provided that no such designation shall be effective unless and until, and
solely to the extent that, the commitments under the Credit Agreements shall
have been reduced and the loans outstanding thereunder shall have been repaid,
in each case to the extent required by the terms of the Credit Agreements as a
result of such Capital Markets Event; provided further that if a designation of
indebtedness constituting a Capital Markets Event shall have been made pursuant
to (and in accordance with the terms of) (x) Section 22(b) of the U.S. Security
Agreement or (y) Section 21(b) of the Canadian Security Agreement, then such
designated indebtedness shall constitute a Secured Obligation of each Lien
Grantor without any further action on the part of any Lien Grantor.
(b) Any Lien Grantor that is a Material Subsidiary of NNI may from
time to time designate any indebtedness for borrowed money (other than
indebtedness constituting a Capital Markets Event) owed by any Material
Subsidiary of NNI in either case to any Bank or any other financial institution
and outstanding on December 20, 2001 or incurred pursuant to a commitment to
extend credit in effect on such date or any extensions, renewals, replacements
and refinancings thereof ("DESIGNATED BANK DEBT") as an additional Secured
Obligation by delivering to the Collateral Agent a certificate signed by a
financial officer that (i) identifies such indebtedness and the material terms
thereof and (ii) states that such Lien Grantor's or such Material Subsidiaries'
obligations thereunder are designated as Secured Obligations; provided that the
aggregate amount of indebtedness (without duplication) designated as "Designated
Bank Debt" under this Agreement and any other security or guarantee document
entered into by NNL, NNI and their respective Material Subsidiaries for the
benefit of the Secured Parties will not exceed $300,000,000 in aggregate
principal amount; provided further that if a designation of indebtedness for
borrowed money shall have been made pursuant to (and in accordance with the
terms of) (x) Section 22(c) of the U.S. Security Agreement or (y) Section 21(c)
of the Canadian Security Agreement, then such designated indebtedness shall
constitute a Secured Obligation of each Lien Grantor without any further action
on the part of any Lien Grantor. The parties to this Agreement undertake to
24
take whatever steps and execute whatever documents that will be necessary
(including any release and any declaration of pledge) to implement this Section
18.
SECTION 19. Notices. Each notice, request or other communication given
to any party hereunder shall be in writing (which term includes facsimile or
other electronic transmission) and shall be effective (a) when hand delivered or
sent by courier to such party at its address specified below, (b) when sent to
such party by facsimile or other electronic transmission, addressed to it at its
facsimile number or electronic address specified below, and such party sends
back an electronic confirmation of receipt or (c) ten days after being sent to
such party by certified or registered Canada or United States mail, addressed to
it at its address specified below, with first class or airmail postage prepaid:
(a) in the case of any Lien Grantor:
C/O Nortel Networks Limited
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇ ▇▇▇
Attention: Corporate Secretary
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
MS: 036/NO/230
(b) in the case of NNSA, its address as set forth in this
Agreement
(c) in the case of the Collateral Agent:
JPMorgan Chase Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
E-mail: ▇▇▇▇▇▇.▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
Any party may change its address, facsimile number and/or e-mail
address for purposes of this Section 19 by giving notice of such change to the
Collateral Agent and the Lien Grantors in the manner specified above.
SECTION 20. No Implied Waivers; Remedies Not Exclusive. No failure by
the Collateral Agent or any Secured Party to exercise, and no delay in
exercising and no course of dealing with respect to, any right or remedy under
any Pledge Document shall operate as a waiver thereof; nor shall any single or
partial exercise by the Collateral Agent or any Secured Party of any right or
remedy under any Loan Document preclude any other or further exercise thereof or
the exercise of any other right or remedy. The rights and remedies specified in
the Loan Documents are cumulative and are not exclusive of any other rights or
remedies provided by law.
SECTION 21. Successors and Assigns. This Agreement is for the benefit
of the Collateral Agent and the Secured Parties. If all or any part of any
Secured Party's interest in any Secured Obligation is assigned or otherwise
transferred in accordance with the transfer
25
provisions applicable thereto, the transferor's rights hereunder, to the extent
applicable to the obligation so transferred, shall be automatically transferred
with such obligation. This Agreement shall be binding on the Lien Grantors and
their respective successors and assigns.
SECTION 22. Amendments and Waivers. Neither this Agreement nor any
provision hereof may be waived, amended, modified or terminated except pursuant
to an agreement or agreements in writing entered into by the parties hereto,
with the consent of the Required Secured Banks. No such waiver, amendment or
modification shall affect the rights of a Secured Party (other than a Bank)
hereunder more adversely than it affects the comparable rights of the Bank
hereunder, without the consent of such Secured Party.
SECTION 23. Choice of Law - Disputes. This Agreement shall be construed
in accordance with and governed by the laws of France. All disputes arising in
connection with the interpretation or performance of this Agreement shall be
submitted to the sole jurisdiction of the Commercial Court of Paris.
SECTION 24. Judgement Currency. If for the purpose of obtaining
judgment in any court it is necessary to convert a sum due from any Lien Grantor
hereunder or under any of the Secured Agreements in the currency expressed to be
payable herein or therein (the "SPECIFIED CURRENCY") into another currency, the
parties hereto agree, to the fullest extent that they may effectively and
legally do so, that the rate of exchange used shall be that at which in
accordance with normal banking procedures the Collateral Agent could purchase
the Specified Currency with such other currency at the Collateral Agent's New
York office on the Domestic Business Day, as hereinafter defined, preceding that
on which final judgment is given. The obligations of each Lien Grantor in
respect of any sum due to any Bank or the Collateral Agent hereunder or under
any of the Secured Agreements shall, notwithstanding any judgment in a currency
other than the Specified Currency, be discharged only to the extent that on the
Domestic Business Day following receipt by such Bank or the Collateral Agent (as
the case may be) of any sum adjudged to be so due in such other currency such
Bank or the Collateral Agent (as the case may be) may in accordance with normal
banking procedures purchase such Specified Currency with such other currency; if
the amount of Specified Currency so purchased is less than the sum originally
due to such Bank or the Collateral Agent, as the case may be, in the Specified
Currency, each Lien Grantor agrees, to the fullest extent that it may
effectively and legally do so, as a separate obligation and notwithstanding any
such judgment, to indemnify such Bank or the Collateral Agent, as the case may
be, against such loss and if the amount of Specified Currency so purchased by
the Collateral Agent exceeds the sum due to the Collateral Agent, as the case
may be, the Collateral Agent shall remit such excess to the Lien Grantor. For
the purposes of this section, "DOMESTIC BUSINESS DAY" means any day except a
Saturday, Sunday, or other day on which commercial banks in New York City are
required or authorized by law to close.
SECTION 25. Severability. If any provision of any Pledge Document is
invalid or unenforceable in any jurisdiction, then, to the fullest extent
permitted by law, (i) the other provisions of the Pledge Documents shall remain
in full force and effect in such jurisdiction and shall be liberally construed
in favor of the Collateral Agent and the Secured Parties in order to carry out
the intentions of the parties thereto as nearly as may be possible and (ii) the
invalidity or unenforceability of such provision in such jurisdiction shall not
affect the validity or enforceability thereof in any other jurisdiction.
26
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed in 5 original copies by their respective authorized officers or
lawful attorneys as of the day and year first above written.
NORTEL NETWORKS LIMITED
By: /s/ K.B. ▇▇▇▇▇▇▇▇▇
---------------------------------
Title: Treasurer
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
Title: Assistant Secretary
NORTEL NETWORKS INTERNATIONAL FINANCE
AND HOLDING BV
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
Title: Managing Director
NORTEL NETWORKS SA
By: /s/ ▇▇▇▇-▇▇▇ ▇▇▇▇▇▇
---------------------------------
Title: Legal Counsel empowered to sign
on behalf of Nortel Networks S.A.
JPMORGAN CHASE BANK, as Collateral Agent
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, CFA
---------------------------------
Title: Vice President
27
EXHIBIT A
TO PLEDGE AGREEMENT
PLEDGE AGREEMENT SUPPLEMENT
PLEDGE AGREEMENT SUPPLEMENT dated as of [THE DATE OF EXECUTION IF SUCH
DATE OCCURS DURING A COLLATERAL PERIOD AND OTHERWISE ON THE FIRST DAY OF THE
FIRST COLLATERAL PERIOD FOLLOWING EXECUTION] between [NAME OF LIEN GRANTOR] (the
"LIEN GRANTOR") and JPMORGAN CHASE BANK, as Collateral Agent.
WHEREAS, Nortel Networks Limited, Nortel Networks Inc., Nortel Networks
International Finance and Holding BV, Nortel Networks SA, Northern Telecom
France and JPMorgan Chase Bank, as Collateral Agent, are parties to a Pledge
Agreement dated as of [THE FIRST DAY OF THE COLLATERAL PERIOD] (as heretofore
amended and/or supplemented, the "PLEDGE AGREEMENT");
WHEREAS, [NAME OF LIEN GRANTOR] desires to become [IS] a party to the
Pledge Agreement as a Lien Grantor thereunder; and
WHEREAS, terms defined in the Pledge Agreement and not otherwise
defined herein have, as used herein, the respective meanings provided for
therein;
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Pledge of Equity Interest. (a) In order to secure the Secured Obligations,
the Lien Grantor grants to the Collateral Agent for the benefit of the Secured
Parties, effective on the date hereof (if such date occurs during a Collateral
Period) and otherwise on the first day of any Collateral Period following
execution hereof a continuing security interest in all the following property of
the Lien Grantor, whether now owned or existing or hereafter acquired or arising
and regardless of where located (the "NEW COLLATERAL"):
[DESCRIBE PROPERTY BEING ADDED TO THE COLLATERAL]
The security interests granted by the Lien Grantor pursuant hereto
shall terminate in accordance with Section 16 of the Pledge Agreement.
(b) The foregoing Pledges are granted as security only and shall not
subject the Collateral Agent or any other Secured Party to, or transfer or in
any way affect or modify, any obligation or liability of the Lien Grantor with
respect to any of the New Collateral or any transaction in connection therewith.
2. Delivery of Collateral. On the date of execution hereof if such
date occurs during a Collateral Period and otherwise on the first day of the
first Collateral Period following execution hereof and on each Drawdown Date,
the Lien Grantor has complied with the provisions of either Section 5 or Section
8 (as applicable) of the Pledge Agreement with
28
respect to Pledged Equity Interests, in each case if and to the extent included
in the New Collateral at such time.
3. Party to Pledge Agreement. Upon delivering this Pledge Agreement
Supplement to the Collateral Agent, the Lien Grantor will become a party to the
Pledge Agreement and will thereafter have all the rights and obligations of a
Lien Grantor thereunder and be bound by all the provisions thereof as fully as
if the Lien Grantor were one of the original parties thereto.(1)
4. Address of Lien Grantor. The address, facsimile number and e-mail
address of the Lien Grantor for purposes of Section 18 of the Pledge Agreement
are:
[ADDRESS, FACSIMILE NUMBER AND E-MAIL ADDRESS OF LIEN GRANTOR]
5. Representations and Warranties.(2) (a) The Lien Grantor represents
and warrants on [THE DATE OF EXECUTION HEREOF IF SUCH DATE OCCURS DURING A
COLLATERAL PERIOD AND OTHERWISE ON THE FIRST DAY OF THE FIRST COLLATERAL PERIOD
FOLLOWING EXECUTION HEREOF] and on each Drawdown Date, that on such date it is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of organization, of which the Lien Grantor has on or prior
to such time given prior written notice to the Collateral Agent.
(b) The Lien Grantor represents and warrants on the date of execution
hereof if such date occurs during a Collateral Period and otherwise on the first
day of the first Collateral Period following the execution hereof that execution
and delivery of this Pledge Agreement Supplement by the Lien Grantor and the
performance by it of its obligations under the Pledge Agreement as supplemented
hereby (i) are within its corporate or other powers, have been duly authorized
by all necessary corporate or other action, (ii) except as disclosed in writing
to the Collateral Agent or its counsel on or prior to such date by any NNL
Company of its counsel, require no action by or in respect of, or filing with,
any governmental body, agency or official other than filings for perfection of
Pledges on the New Collateral and (iii) do not contravene, or constitute a
default under, any provision of applicable law or regulation or of its
organizational documents, or of any agreement, judgment, injunction, order,
decree or other instrument binding upon it except, with respect to (ii) and
(iii) above, any such action, filing or contravention which would not have a
material adverse affect on the ability of the Lien Grantor to perform its
obligations under this Pledge Agreement Supplement or the Pledge Agreement.
(c) The Lien Grantor represents and warrants on the date of execution
hereof if such date occurs during a Collateral Period and otherwise on the first
day of the first Collateral Period following the execution hereof that the
Pledge Agreement as supplemented hereby constitutes a valid and binding
agreement of the Lien Grantor, enforceable in accordance with its terms, except
as limited by applicable bankruptcy, insolvency, fraudulent conveyance or other
similar laws affecting creditors' rights generally and general principles of
equity.
------------
(1) Delete Sections 3 and 4 if the Lien Grantor is already a party to the
Pledge Agreement.
(2) Modify as needed if the Lien Grantor is not a corporation.
29
(d) Each of the representations and warranties set forth in Sections 3
and 5 of the Pledge Agreement is true as applied to the Lien Grantor and the New
Collateral on the date specified therein. For purposes of the foregoing
sentence, references in said Sections to a "Lien Grantor" shall be deemed to
refer to the Lien Grantor, references to "Schedules" to the Pledge Agreement
shall be deemed to refer to the corresponding Schedules to this Pledge Agreement
Supplement, references to "Collateral" shall be deemed to refer to the New
Collateral[, AND THE COLLATERAL PERIOD SHALL BE DEEMED TO HAVE COMMENCED ON THE
DATE OF EXECUTION HEREOF IF SUCH DATE OCCURS DURING A COLLATERAL PERIOD AND
OTHERWISE ON THE FIRST DAY OF THE FIRST COLLATERAL PERIOD FOLLOWING EXECUTION
HEREOF.]
6. Governing Law. This Pledge Agreement Supplement shall be construed
in accordance with and governed by the laws of France.
IN WITNESS WHEREOF, the parties hereto have caused this Pledge
Agreement Supplement to be duly executed by their respective authorized officers
as of the day and year first above written.
[NAME OF LIEN GRANTOR]
By:
---------------------------------
Name:
Title:
JPMORGAN CHASE BANK, as Collateral Agent
By:
---------------------------------
Name:
Title:
30
EXHIBIT B
DECLARATIONS OF PLEDGE
DECLARATION ▇▇ ▇▇▇▇ DE COMPTE D'INSTRUMENTS FINANCIERS
(EN APPLICATION DE L'ARTICLE L.431-4 DU CODE MONETAIRE ET FINANCIER)
CONSTITUANT
Denomination sociale : Nortel Networks International Financial & Holding
B.V. societe de droit hollandais
Siege social : ▇▇▇▇▇▇▇▇▇▇▇ ▇▇-▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇ (▇▇▇
▇▇▇▇▇▇▇▇▇▇▇)
COMPTE D'INSTRUMENTS FINANCIERS GAGE
Identification du compte Compte d'actionnaire no. inscrit dans ▇▇▇
▇▇▇▇ : registres de la Societe sous l'intitule
"Nortel Networks International Financial & Holding
B.V. - Compte nanti".
TENEUR DE COMPTE
Nortel Networks S.A., societe anonyme au capital de 35.762.933 euros, ayant son
siege social ▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ Guyancourt, immatriculee au
Registre du Commerce et des Societes sous le No. Versailles 389 516 741
(ci-apres la "Societe")
OBLIGATIONS GARANTIES
Nature : Les obligations garanties sont celles definies au
(i) sous le terme "Secured Obligations" dans
l'acte intitule "Pledge Agreement" en date des
presentes conclu entre Nortel Networks
International Finance & Holding B.V., Nortel
Networks Limited, Nortel Networks S.A. et JPMorgan
Chase Bank (le "Contrat ▇▇ ▇▇▇▇").
Montant total garanti : $300 million au titre des 6.88% Notes due October 1, 2002
$200 millions au titre des 6.00% Notes due September 1, 2003
$150 millions au titre des 7.40% Notes due June 15, 2006
$200 millions au titre des 6.88% Notes due September 1, 2023
$150 millions au titre des 7.88% Notes due June 15, 2026
$1,500,000,000 au titre des Notes Due February 15, 2006
$1,800,000,000 au titre des Notes Due September 1, 2008
$250 millions au titre du "2000 NNL 364-Day Agreement"
$250 millions au titre du "2000 NNL 5-Year Agreement"
$1 ▇▇▇▇▇▇▇▇ au titre du "2000 NNI 364-Day Agreement"
$500 million au titre du "2000 NNI 5-Year Agreement"
$660,000,000 au titre du "2001 NNL 364-Day Agreement"
$915,000,000 au titre du "2001 NNI 364-Year Agreement"
Toutes sommes dues au titre des Designated Capital Markets
31
Debts (▇▇▇▇▇▇ que definies au Contrat ▇▇ ▇▇▇▇)
Toutes sommes dues au titre des Designated Bank Debts (▇▇▇▇▇▇
que definies au Contrat ▇▇ ▇▇▇▇)
Toutes sommes dues au titre des NNL Hedging Obligations
(▇▇▇▇▇▇ que definies au Contrat ▇▇ ▇▇▇▇)
Toutes sommes dues au titre des NNI Hedging Obligations
(▇▇▇▇▇▇ que definies au Contrat ▇▇ ▇▇▇▇)
Toutes sommes dues au titre des NNFI Hedging Obligations
(▇▇▇▇▇▇ que definies au Contrat ▇▇ ▇▇▇▇)
en principal, augmente de tous interets, frais, commissions,
penalites et accessoires dus a ce titre.
CREANCIERS GAGISTES
JPMorgan Chase Bank, en sa qualite de Agent des Suretes (Collateral Agent)
agissant tant pour son compte qu'en qualite de mandataire des entites parties
aux (i) NNL Bank Obligations (tel que ce terme est defini au Contrat ▇▇ ▇▇▇▇),
(ii) NNL Hedging Obligations (tel que ce terme est defini au Contrat ▇▇ ▇▇▇▇),
(iii) Designated Capital Markets Debts (tel que ce terme est defini au Contrat
▇▇ ▇▇▇▇), (iv) Designated Bank Debt (tel que ce terme est defini au Contrat ▇▇
▇▇▇▇), (v) NNL Guaranteed Obligations (tel que ce terme est defini au Contrat ▇▇
▇▇▇▇), (vi) 2002 Notes, 2003 Notes, 2006 Notes, 2006 NNCC Notes, 2008 Notes,
2023 Notes et 2026 Notes (tels que ces termes sont ▇▇▇▇▇▇▇ au Contrat ▇▇ ▇▇▇▇),
(les << Conventions de Pret >> ).
LISTE DES INSTRUMENTS FINANCIERS INITIALEMENT INSCRITS AU COMPTE GAGE
1.612.714 actions d'une valeur nominale de 15,50 euros chacune de la Societe,
ainsi que tout dividende ou autre fruit ou produit et tout droit ou valeur
mobiliere procedant desdites actions ou qui viendraient en substitution ou en
complement desdites actions, sous reserve, notamment, des dispositions des
articles 6, 7 et 9 du Contrat ▇▇ ▇▇▇▇ relatives au Cash Collateral Accounts et a
Certain Cash Distributions.
DANS LES CONDITIONS SUIVANTES:
Conformement aux dispositions de l'article L.431-4 du Code Monetaire et
Financier et aux stipulations du Contrat ▇▇ ▇▇▇▇ en date des presentes dont un
exemplaire est remis a Nortel Networks S.A., avec la presente declaration ▇▇
▇▇▇▇.
A____________,
Le ____________
Nortel Networks International Financial Holding B.V.
___________________________
Par :
32
TRANSLATION FOR INFORMATION PURPOSES ONLY
DECLARATION OF PLEDGE OF FINANCIAL ACCOUNT
(PURSUANT TO L.431-4 OF THE FRENCH MONETARY AND FINANCIAL CODE).
IDENTITY OF THE PLEDGOR
Company name Nortel Networks International Financial &
Holding B.V. a Dutch company
Registered Office Siriuscheef 42-72, Hoofddorp 2132 WT
(The Netherlands)
FINANCIAL INSTRUMENTS ACCOUNT SUBJECT TO THE PLEDGE
Description of Financial Account no.________ registered in the
Instruments Account registries of the Company as "Nortel Network
International Financial & Holding B.V. -
Pledged Account"
ACCOUNT HOLDER
Nortel Networks S.A., a French societe anonyme, with a share capital of
35,762,933 euros, registered with the Register of Companies and Commerce under
number Versailles 389 516 741 having its registered ▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ Guyancourt.
SECURED AMOUNTS
Nature as defined in (i) under the term "Secured Obligations" in
the Pledge Agreement dated the date hereof between Nortel
Networks International Finance & Holding B.V., Nortel
Networks Limited, Nortel Networks SA and ▇▇ ▇▇▇▇▇▇ Chase
Bank (the "Pledge Agreement").
Amount $300 million under the 6.88% Notes due October 1, 2002
$200 millions under the 6.00% Notes due September 1, 2003
$150 millions under the 7.40% Notes due June 15, 2006
$200 millions under the 6.88% Notes due September 1, 2023
$150 millions under the 7.88% Notes due June 15, 2026
$1,500,000,000 under the Notes Due February 15, 2006
$1,800,000,000 under the Notes Due September 1, 2008
$250 millions under the "2000 NNL 364-Day Agreement"
$250 millions under the "2000 NNL 5-Year Agreement"
$1 billion under the "2000 NNI 364-Day Agreement"
$500 million under the "2000 NNI 5-Year Agreement"
$660,000,000 under the "2001 NNL 364-Day Agreement"
$915,000,000 under the "2001 NNI 364-Year Agreement"
All sums due under the Designated Capital Markets Debts
(as defined in the Pledge Agreement)
All sums due under the Designated Bank Debts (as defined
in the Pledge Agreement)
All sums due under the NNL Hedging Obligations (as
defined in the Pledge Agreement)
All sums due under the NNI Hedging Obligations (as
defined in the Pledge Agreement)
All sums due under the NNFI Hedging Obligations (as
defined in the Pledge Agreement)
in principal amount, plus interests, costs, expenses and
penalties due thereof.
SECURED PARTIES
JPMorgan Chase Bank, as Collateral Agent on its behalf and on behalf of the
entities party to (i) NNL Bank Obligations (as defined in the Pledge Agreement),
(ii) NNL Hedging Obligations (as defined in the Pledge Agreement), (iii)
Designated Capital Markets Debts (as defined in the Pledge Agreement), (iv)
Designated Bank Debt (as defined in the Pledge Agreement), (v) NNL Guaranteed
Obligations (as defined in the Pledge Agreement), (vi) 2002 Notes, 2003 Notes,
2006 Notes, 2006 NNCC Notes, 2008 Notes, 2023 Notes et 2026 Notes (as defined in
the Pledge Agreement), (the << Facilities Agreement >>).
LIST OF FINANCIAL INSTRUMENTS ORIGINALLY SUBJECT TO THE PLEDGE
1,612,714 shares of euros 15.50 par value of the Company and all dividends,
proceeds or other rights or shares from such Shares on which could be
substituted or complete such shares, subject to provisions of, in particular,
sections 6, 7 and 9 of the Pledge Agreement relating to Cash Collateral Accounts
and Certain Cash Distributions.
2
IN THE FOLLOWING TERMS AND CONDTIONS
In accordance with article L.431-4 of the French Monetary and Financial Code and
with the terms and conditions of the Pledge Agreement of the date hereof, a copy
of which has been delivered to Nortel Networks S.A.
Made in _________
On ______________
Nortel Networks International Financial & Holdings B.V.
______________________________
By:
Title:
3
DECLARATION ▇▇ ▇▇▇▇ DE COMPTE D'INSTRUMENTS FINANCIERS
(EN APPLICATION DE L'ARTICLE L.431-4 DU CODE MONETAIRE ET FINANCIER)
CONSTITUANT
Denomination sociale : Nortel Networks Limited, societe de droit
canadien
Siege social : ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ (▇▇▇▇▇▇)
COMPTE D'INSTRUMENTS FINANCIERS GAGE
Identification du compte Compte d'actionnaire no inscrit dans ▇▇▇
▇▇▇▇: registres de la Societe sous l'intitule
"Nortel Networks Limited. - Compte nanti".
TENEUR DE COMPTE
Nortel Networks S.A., societe anonyme au capital de 35.762.933 euros, ayant son
siege social ▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ Guyancourt, immatriculee au
Registre du Commerce et des Societes sous le No. Versailles 389 516 741
(ci-apres la "Societe")
OBLIGATIONS GARANTIES
Nature : Les obligations garanties sont celles
definies au (i) sous le terme "Secured
Obligations" dans l'acte intitule "Pledge
Agreement" en date des presentes conclu entre
Nortel Networks International Finance &
Holding B.V., Nortel Networks Limited, Nortel
Networks SA et JPMorgan Chase Bank (le
"Contrat ▇▇ ▇▇▇▇").
Montant total $300 million au titre des 6.88% Notes due October 1, 2002
garanti : $200 millions au titre des 6.00% Notes due September 1, 2003
$150 millions au titre des 7.40% Notes due June 15, 2006
$200 millions au titre des 6.88% Notes due September 1, 2023
$150 millions au titre des 7.88% Notes due June 15, 2026
$1,500,000,000 au titre des Notes Due February 15, 2006
$1,800,000,000 au titre des Notes Due September 1, 2008
$1 ▇▇▇▇▇▇▇▇ au titre du "2000 NNI 364-Day Agreement"
$500 million au titre du "2000 NNI 5-Year Agreement"
$915,000,000 au titre du "2001 NNI 364-Year Agreement"
$250 millions au titre du "2000 NNL 364-Day Agreement"
$250 millions au titre du "2000 NNL 5-Year Agreement"
$660,000,000 millions au titre du "2001 NNL 364-Day Agreement"
Toutes sommes dues au titre des Designated Capital Markets
Debts (▇▇▇▇▇▇ que definies au Contrat ▇▇ ▇▇▇▇)
Toutes sommes dues au titre des Designated Bank Debts (▇▇▇▇▇▇
que definies au Contrat ▇▇ ▇▇▇▇)
Toutes sommes dues au titre des NNI Hedging Obligations
(▇▇▇▇▇▇ que definies au Contrat ▇▇ ▇▇▇▇)
Toutes sommes dues au titre des NNFI Hedging Obligations
(▇▇▇▇▇▇ que definies au Contrat ▇▇ ▇▇▇▇)
Toutes sommes dues au titre des NNL Hedging Obligations
(▇▇▇▇▇▇ que definies au Contrat ▇▇ ▇▇▇▇)
en principal, augmente de tous interets, frais, commissions,
penalites et accessoires dus a ce titre.
CREANCIERS GAGISTES
JPMorgan Chase Bank, en sa qualite de Agent des Suretes (Collateral Agent)
agissant tant pour son compte qu'en qualite de mandataire des entites parties
aux (i) NNL Bank Obligations (tel que ce terme est defini au Contrat ▇▇ ▇▇▇▇),
(ii) NNL Hedging Obligations (tel que ce terme est defini au Contrat ▇▇ ▇▇▇▇),
(iii) Designated Capital Markets Debts (tel que ce terme est defini au Contrat
▇▇ ▇▇▇▇), (iv) Designated Bank Debts (tel que ce terme est defini au Contrat ▇▇
▇▇▇▇), (v) NNL Guaranteed Obligations (tel que ce terme est defini au Contrat ▇▇
▇▇▇▇), (vi) 2002 Notes, 2003 Notes, 2006 Notes, 2006 NNCC Notes, 2008 Notes,
2023 Notes et 2026 Notes (tels que ces termes sont ▇▇▇▇▇▇▇ au Contrat ▇▇ ▇▇▇▇),
(les << Conventions de Pret >>).
LISTE DES INSTRUMENTS FINANCIERS INITIALEMENT INSCRITS AU COMPTE GAGE
694.567 actions d'une valeur nominale de 15,50 euros chacune de la Societe,
ainsi que tout dividende ou autre fruit ou produit et tout droit ou valeur
mobiliere procedant desdites actions ou qui viendraient en substitution ou en
complement desdites actions, sous reserve, notamment, des dispositions des
articles 6, 7 et 9 du Contrat ▇▇ ▇▇▇▇ relatives au Cash Collateral Accounts et a
Certain Cash Distributions.
DANS LES CONDITIONS SUIVANTES:
Conformement aux dispositions de l'article L.431-4 du Code Monetaire et
Financier et aux stipulations du Contrat ▇▇ ▇▇▇▇ en date des presentes dont un
exemplaire est remis a Nortel Networks S.A., avec la presente declaration ▇▇
▇▇▇▇.
A____________,
Le_____________
Nortel Networks Limited
___________________________
Par :
2
TRANSLATION FOR INFORMATION PURPOSES ONLY
DECLARATION OF PLEDGE OF FINANCIAL ACCOUNT
(PURSUANT TO L.431-4 OF THE FRENCH MONETARY AND FINANCIAL CODE).
IDENTITY OF THE PLEDGOR
Company name Nortel Networks Limited, a Canadian company
Registered ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ (▇▇▇▇▇▇)
FINANCIAL INSTRUMENTS ACCOUNT SUBJECT TO THE PLEDGE
Description of Financial Account no___ registered in the registries
Instruments Account of the Company as "Nortel Networks Limited. -
Pledged Account"
ACCOUNT HOLDER
Nortel Networks S.A., a French societe anonyme, with a share capital of
35,762,933 euros, registered with the Register of Companies and Commerce under
number Versailles 389 516 741 having its registered office ▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇.
SECURED AMOUNTS
Nature: as defined in (i) under the term "Secured Obligations" in the
Pledge Agreement dated the date hereof between Nortel Networks
International Finance & Holding, Nortel Networks Limited, Nortel
Networks SA and JPMorgan Chase Bank (the "Pledge Agreement").
Amount: $300 million under the 6.88% Notes due October 1, 2002
$200 millions under the 6.00% Notes due September 1, 2003
$150 millions under the 7.40% Notes due June 15, 2006
$200 millions under the 6.88% Notes due September 1, 2023
$150 millions under the 7.88% Notes due June 15, 2026
$1,500,000,000 under the Notes Due February 15, 2006
$1,800,000,000 under the Notes Due September 1, 2008
$1 billion under the "2000 NNI 364-Day Agreement"
1
$500 million under the "2000 NNI 5-Year Agreement"
$915,000,000 under the "2001 NNI 364-Year Agreement"
$250 million under the "2000 NNL 364-Day Agreement"
$250 million under the "2000 NNL 5-Year Agreement"
$660,000,000 under the "2001 NNL 364-Day Agreement"
All sums due under the Designated Capital Markets Debts (as
defined in the Pledge Agreement)
All sums due under the Designated Bank Debts (as defined in
the Pledge Agreement)
All sums due under the NNL Hedging Obligations (as defined in
the Pledge Agreement)
All sums due under the NNI Hedging Obligations (as defined in
the Pledge Agreement)
All sums due under the NNFI Hedging Obligations (as defined in
the Pledge Agreement)
in principal amount, plus interests, costs, expenses and
penalties due thereof.
SECURED PARTIES
JPMorgan Chase Bank, as Collateral Agent on its behalf and on behalf of the
entities party to (i) NNL Bank Obligations (as defined in the Pledge Agreement),
(ii) NNL Hedging Obligations (as defined in the Pledge Agreement), (iii)
Designated Capital Markets Debts (as defined in the Pledge Agreement), (iv)
Designated Bank Debts (as defined in the Pledge Agreement), (v) NNL Guaranteed
Obligations (as defined in the Pledge Agreement), (vi) 2002 Notes, 2003 Notes,
2006 Notes, 2006 NNCC Notes, 2008 Notes, 2023 Notes et 2026 Notes (as defined in
the Pledge Agreement), (the << Facilities Agreement >>).
LIST OF FINANCIAL INSTRUMENTS ORIGINALLY SUBJECT TO THE PLEDGE
694,567 shares of euros 15.50 par value of the Company and all dividends,
proceeds or other rights or shares from such Shares on which could be
substituted or complete such shares, subject to provisions of, in particular,
sections 6, 7 and 9 of the Pledge Agreement relating to Cash Collateral Accounts
and Certain Cash Distributions.
2
IN THE FOLLOWING TERMS AND CONDTIONS
In accordance with article L.431-4 of the French Monetary and Financial Code and
with the terms and conditions of the Pledge Agreement of the date hereof, a copy
of which has been delivered to Nortel Networks S.A.
Made in _________
On _______________
Nortel Networks Limited
______________________________
By:
Title:
3
SCHEDULE 1
EQUITY INTERESTS IN NNSA
OWNED BY THE LIEN GRANTORS
(AS OF THE DATE HEREOF)
JURISDICTION NUMBER OF
OF OWNER OF PERCENTAGE SHARES OR
ISSUER ORGANIZATION EQUITY INTEREST OWNED UNITS
----------------- ------------ ---------------- ---------- ------------
Nortel Networks SA France Nortel Networks 69.89 1,612,714
International Finance and
Holding BV
Nortel Networks Limited 30.10 694,567
4
