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Second Notes Amendement And Waiver Agreement

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Exhibit 10.37 Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions. SECOND NOTES AMENDMENT AND WAIVER AGREEMENT This Second Notes Amendment and Waiver Agreement (the " Agreement" ) is entered into as of May 2, 2005, among Bookham Technology plc, a public limited company incorporated under the laws of England and Wales (" Bookham plc" ), Bookham, Inc., a Delaware corporation (" Bookham, Inc." and, together with Bookham plc and its other subsidiaries whose names appear on the signature pages hereto, the " Bookham Parties" ), Nortel Networks UK Limited (" NNUKL" ), Nortel Networks Corporation (" Nortel Networks" ) and Nortel Networks Limited, a Canadian corporation (" NNL" ). WHEREAS, the parties to this Agreement are parties to a Restructuring Agreement (the " Restructuring Agreement" ), dated as of December 2, 2004; WHEREAS, Bookham plc has issued to NNUKL an amended and restated Series B-1 Senior Secured Note due November 8, 2006 in an original principal amount of $30,000,000.00 (as amended, supplemented or modified from time to time in writing, the " Series B-1 Note" ); WHEREAS, Bookham, Inc. has issued to NNUKL an amended and restated Series A-1 Senior Secured Note due November 8, 2007 in an original principal amount of $20,000,000.00 (as amended, supplemented or modified from time to time in writing, the " Series A-2 Note" , together with the Series B-1 Note, the " Notes" ); WHEREAS, Bookham plc has entered into the Optical Components Supply Agreement with NNL, effective as of November 8, 2002, as amended by the Addendum to Optical Components Supply Agreement dated as of February 7, 2005 (the " Addendum" ) between NNL and Bookham plc (as amended, supplemented or modified from time to time in writing, the " Supply Agreement" ); WHEREAS, Bookham, Inc. and certain of its subsidiaries and NNUKL are parties to an Amended and Restated U.S. Security Agreement, dated as of December 2, 2004 (as amended, supplemented or modified from time to time in writing, the " U.S. Security Agreement" ); WHEREAS, Bookham, Inc. and certain of its subsidiaries and Nortel Networks and certain of its subsidiaries have entered into certain amendment and waiver agreements, certain security agreements and other agreements and delivered certain other documents in connection with the foregoing (all such agreements and documents as amended, supplemented or modified from time to time in writing, and together with the U.S. Security Agreement, the Notes and the Restructuring Agreement, the " Senior Note Documents" );

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WHEREAS, Bookham, Inc. and the other Bookham Parties and NNUKL desire to further amend the Notes as set forth herein; WHEREAS, the Bookham Parties have requested that NNUKL agree to waive certain provisions of the Notes pursuant to the terms and subject to the conditions set forth herein; WHEREAS, the Bookham Parties have requested that NNL amend certain provisions of the Supply Agreement pursuant to the terms and subject to the conditions set forth in the Supply Agreement Addendum substantially in the form set forth in Exhibit A (the " Supply Agreement Addendum" ); and WHEREAS, in consideration of the foregoing, the parties desire to amend the U.S. Security Agreement and certain of the Senior Note Documents and enter into certain other security agreements (i) to provide that the collateral pledged to secure the obligations under the Notes shall also be pledged to secure the obligations of Bookham plc and certain of its Subsidiaries under the Supply Agreement and (ii) to cause Bookham, Inc. and its subsidiaries to pledge certain additional assets to secure the various obligations of Bookham, Inc., Bookham plc and the guarantors under each of the Series B-1 Note, the Series A-2 Note and the Supply Agreement (such amendments and additional security documents as further described in Section 5(b) through 5(e) hereof, the " Additional Security Documents" ). NOW THEREFORE, in consideration of the mutual premises hereinafter set forth and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto hereby agree as follows:1. Definitions . The following terms used herein shall have the meaning set forth below: (i) " Affiliate" means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with, that Person. A person shall be deemed to control another Person if the first Person possesses, directly or indirectly, the power (i) to vote 5% or more of the equity interests having ordinary voting power for the election of directors (or comparable governing body) of such Person or (ii) to direct or cause the direction of the management and policies of such other Person, whether through the ownership of voting securities, by contract or otherwise. For purposes of this Agreement, none of Nortel Networks, NNUKL or NNL or any of their respective Subsidiaries shall be deemed to be an " Affiliate" of any Bookham Party or any of their respective Subsidiaries. (ii) " Bankruptcy Event" means, with respect to any Person, any of the following events (a) such Person commences a case or other proceeding under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency, liquidation or conservatorship, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or seeking the appointment of a receiver, trustee, custodian, conservator or other similar

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official for it or for all or any substantial part of its assets; (b) the commencement against such Person of any such case or proceeding or other action of a nature referred to in clause (a) above which (1) results in the entry of an order for relief or any such adjudication or appointment or (2) that is not dismissed, discharged or bonded within 60 days after commencement; (c) the adjudication of such Person as insolvent or bankrupt, or any order of relief or other order approving any such case or proceeding is entered; (d) such Person suffers any appointment of any custodian, trustee, receiver, receiver-manager or the like for it or any substantial part of its property that is not discharged or stayed within 60 days; (e) a warrant of attachment (to the extent such warrant of attachment does not constitute an attachment in aid of jurisdiction or other similar pre-judgment remedy, and Nortel and its Affiliates are satisfied in their reasonable judgment that such attachment does not affect the perfection or priority of any security interest in the name of NNUKL as security agent in such property or in any material respect the rights or remedies of Nortel and its Affiliates therein), execution or similar process shall have been issued against any substantial part of such Person' s property if the property, plant and equipment of such Person subject to such warrant or writ at the time of such issue has an aggregate fair market value greater than or equal to $500,000 and is not discharged or stayed within 60 days; (f) such Person makes a general assignment for the benefit of creditors; (g) such Person fails to pay or states that it is unable to pay or is unable to pay, its debts generally as they become due; (h) such Person calls a meeting of its creditors with a view to arranging a composition, adjustment or restructuring of its debts; or (i) such Person, by any act or failure to act, indicates its consent to, approval of or acquiescence of any of the foregoing or takes any corporate or other action for the purpose of effecting any of the foregoing. (iii) " Change of Control" means (A) the failure of Bookham Inc. to own, directly or indirectly, 100% of the voting stock or other ownership interest in (i) Bookham plc or (ii) any of its Subsidiaries that sell Products (as defined in the Supply Agreement) to Nortel or its Affiliates or any contract manufacturer designated by Nortel or its Affiliates or (B) any of the following with respect to Bookham Inc. or Bookham Technology plc: any (i) merger, consolidation, share exchange or other similar transaction, unless Bookham Inc. or Bookham Technology plc, as the case may be, is the surviving party, provided that no Event of Default shall have occurred and be continuing at the time of such proposed transaction or would result therefrom, (ii) sale, transfer, exchange or other disposition of all or substantially all of its assets in a single transaction or series of related transactions, (iii) consummation of a tender offer or exchange offer for a majority of the outstanding voting securities of such entity; (iv) issuance of that number of voting securities of such entity that would, after such issuance, constitute a majority of the outstanding voting securities of such entity; (v) any Person or group of Persons acting in concert shall have acquired by contract or otherwise, or shall have entered into a contract or arrangement that, upon consummation, will result in its or their having the power to direct or cause the direction, directly or indirectly, of the management or policies of such Bookham Party, whether through the ownership of voting securities, through ability to exercise voting power, by contract or otherwise; or (vi) with respect to Bookham, Inc., (a) any Person or two or more Persons (other than the Permitted Holders) acting as a group (as defined in Section 13d-3 of the Securities Exchange Act of 1934) shall have acquired beneficial ownership (within the meaning of Rule 13d-3 of the Securities and Exchange Commission under the Securities Exchange Act of 1934) of

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35% or more of the outstanding shares of voting stock of Bookham, Inc.; or (b) individuals who, as of the Reference Date, constitute the Board of Directors of Bookham, Inc. (the " Bookham Incumbent Board" ) cease for any reason to constitute at least a majority of the Board of Directors of Bookham, Inc.; provided, however, that any individual becoming a director of Bookham, Inc. subsequent to the Reference Date whose election, or nomination for election by Bookham, Inc.' s shareholders was approved by a vote of at least a majority of the directors then comprising the Bookham Incumbent Board shall be considered as though such individual were a member of the Bookham Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Securities Exchange Act of 1934) or other actual or threatened solicitation of proxies or contest by or on behalf of a Person other than the Board of Directors of Bookham, Inc. (iv) " Expiration Event" has the meaning set forth in Section 4 hereof. (v) " Indebtedness" means any obligation in respect of (i) borrowed money (excluding intercompany loans), (ii) capitalized lease obligations, (iii) obligations under interest rate agreements and currency agreements, (iv) guarantees of any obligation of any third Person, (v) letters of credit, (vi) indemnity obligations or performance bonds and (vii) any obligation owed for all or any part of the deferred purchase price of property or services (other than accounts payable in the ordinary course of business payable on terms customary in the trade and not past due). (vi) " Permitted Holder" means, with respect to any Person, any holder of more than 5% of the total outstanding shares of stock or other ownership interests in such Person on the Reference Date. (vii) " Person" means any natural person, general or limited partnership, corporation, limited liability company, firm, association, trust or other entity or organization, including a government or political subdivision or agency or instrumentality thereof. (viii) " Reference Date" means April 1, 2005. (ix) " Subsidiary" means, as to any Person, a corporation, partnership or other entity of which shares of stock or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership or other entity at the time owned, or the management of which is otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such Person. 2. Amendment; Waiver; Further Actions . (a) Contemporaneously with the execution and delivery of this Agreement, NNUKL hereby: (i) waives the application of Section 4(a) and 4(b) of the Series B-1 Note until the earlier of the twelve-month anniversary of the date hereof and the

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occurrence of an Expiration Event; except that if the Net Proceeds (as defined in the Series B-1 Note) of the Qualified Financings (as defined in the Series B-1 Note) during such period exceed $75,000,000 in the aggregate (the " Excess Net Proceeds" ), the Borrower (as defined in the Series B-1 Note) shall within one (1) Business Day of the consummation of the relevant Qualified Financing prepay in cash on a pro rata basis by wire transfer of immediately available funds the outstanding obligations of the Series B-1 Note in an amount equal to (a) 40% of the Net Proceeds of any such Qualified Financings to the extent such Net Proceeds constitute all or part of the Excess Net Proceeds less than the Threshold Net Proceeds (as defined in the Series A-2 Note) and (b) 100% of the Threshold Net Proceeds (as defined in the Series A-2 Note); and provided that the Borrower shall not use the Net Proceeds of any Qualified Financings to retire, redeem, prepay or repay any other Indebtedness of the Borrower (other than scheduled principal and interest payments on Indebtedness in existence on the date hereof as set forth in Schedule 3(d) hereto and any renewals, extensions or refinancings of such Indebtedness ( provided that , with respect to any such renewal, extension or refinancing (a) the terms and conditions thereof are no less favorable to the obligor thereon or to NNUKL than the Indebtedness being renewed, refinanced or extended, (b) the average life to maturity thereof is greater than or equal to that of the Indebtedness being renewed, refinanced or extended and (c) such renewal, extension or refinancing does not increase the principal amount of such Indebtedness), but shall instead use such Net Proceeds (except for any Net Proceeds applied to repay the Series B-1 Note as described above) for working capital purposes in the ordinary course of business; and (ii) waives the application of Section 4(a) of the Series A-2 Note until the earlier of the repayment in full of the Series B-1 Note, the twelve-month anniversary of the date hereof and the occurrence of an Expiration Event (as defined herein); provided that the Borrower (as defined in the Series A-2 Note) shall not be required to apply Threshold Net Proceeds (as defined in the Series A-2 Note) to prepay the outstanding obligations under the Series A-2 Note to the extent that such Threshold Net Proceeds have already been applied to prepay the outstanding obligations under the Series B-1 Note pursuant to clause (i) above. Except as specifically waived hereby, each of the Notes shall continue in full force and effect in accordance with the provisions thereof as in existence on the date hereof. After the date hereof, any reference thereto shall mean any such document, as applicable, as modified hereby. (b) Contemporaneously with the execution and delivery of this Agreement, NNUKL, Bookham, Inc. and the other Bookham Parties agree that the Notes are amended as follows:

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