THE SUBSIDIARIES OF THE GOODYEAR TIRE & RUBBER COMPANY
identified as Grantors herein
and
Wilmington Trust Company,
as Collateral Agent
TABLE OF CONTENTS
ARTICLE I Definitions 1
SECTION 1.01. Certain Defined Terms............................................................. 1
ARTICLE II Intercreditor Agreement 11
SECTION 2.01. Intercreditor Agreement........................................................... 11
ARTICLE III Pledge of Securities 11
SECTION 3.01. Pledge............................................................................ 11
SECTION 3.02. Voting Rights; Dividends and Interest............................................. 11
ARTICLE IV Security Interests in Personal Property 13
SECTION 4.01. Creation of Security Interests.................................................... 13
SECTION 4.02. Certain Filings................................................................... 13
SECTION 4.03. Representations and Warranties.................................................... 13
SECTION 4.04. Covenants......................................................................... 14
SECTION 4.05. Other Actions..................................................................... 16
SECTION 4.06. Covenants Regarding Patent, Trademark and Copyright Collateral.................... 17
SECTION 4.07. Lockbox System.................................................................... 19
SECTION 4.08. Insurance......................................................................... 20
SECTION 4.09. Liens............................................................................. 20
ARTICLE V Other Pledges, Mortgage and Other Security Interests 20
SECTION 5.01. Summary of Certain Other Security Documents....................................... 20
SECTION 5.02. Other Security Documents Subject to this Agreement................................ 20
ARTICLE VI Remedies 21
SECTION 6.01. Remedies Upon Default............................................................. 21
SECTION 6.02. Exercise of Remedies under Other Security Documents............................... 22
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SECTION 6.03. Application of Proceeds........................................................... 23
SECTION 6.04. Grant of License to Use Intellectual Property..................................... 23
SECTION 6.05. Securities Act.................................................................... 24
SECTION 6.06. Registration...................................................................... 24
ARTICLE VII Indemnity, Subrogation and Subordination 25
SECTION 7.01. Indemnity and Subrogation......................................................... 25
SECTION 7.02. Contribution and Subrogation...................................................... 25
SECTION 7.03. Subordination..................................................................... 25
ARTICLE VIII Acts of Secured Parties; Amounts of Obligations 26
SECTION 8.01. Acts of Secured Parties........................................................... 26
SECTION 8.02. Determination of Amounts of Obligations and Existence of Events of
Default; Acceleration............................................................. 26
ARTICLE IX Duties of Collateral Agent 27
SECTION 9.01. Notices to Trustee and Representatives............................................ 27
SECTION 9.02. Actions Under this Agreement...................................................... 27
ARTICLE X Concerning the Collateral Agent 27
SECTION 10.01. Limitations on Responsibility of Collateral Agent................................. 27
SECTION 10.02. Reliance by Collateral Agent; Indemnity Against Liabilities, etc.................. 28
SECTION 10.03. Appointment, Resignation and Removal of the Collateral Agent...................... 30
SECTION 10.04. Expenses and Indemnification...................................................... 30
ARTICLE XI Designated Pari Passu Obligations 31
SECTION 11.01. Designation....................................................................... 31
ARTICLE XII Subordination of Intercompany Indebtedness 32
SECTION 12.01. Subordination..................................................................... 32
SECTION 12.02. Dissolution or Insolvency......................................................... 32
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SECTION 12.03. Subrogation....................................................................... 32
SECTION 12.04. Other Creditors................................................................... 32
SECTION 12.05. No Waiver......................................................................... 33
SECTION 12.06. Obligations Hereunder Not Affected................................................ 33
ARTICLE XIII Miscellaneous 34
SECTION 13.01. Notices........................................................................... 34
SECTION 13.02. Waivers; Amendment................................................................ 34
SECTION 13.03. Collateral Agent's Fees and Expenses; Indemnification............................. 34
SECTION 13.04. Successors and Assigns............................................................ 35
SECTION 13.05. Survival of Agreement............................................................. 35
SECTION 13.06. Counterparts; Effectiveness; Several Agreement.................................... 35
SECTION 13.07. Severability...................................................................... 36
SECTION 13.08. Governing Law; Jurisdiction; Consent to Service of Process........................ 36
SECTION 13.09. WAIVER OF JURY TRIAL.............................................................. 36
SECTION 13.10. Headings.......................................................................... 37
SECTION 13.11. Security Interest Absolute........................................................ 37
SECTION 13.12. Termination or Release............................................................ 37
SECTION 13.13. Additional Grantors............................................................... 37
SECTION 13.14. Collateral Agent Appointed Attorney-in-Fact....................................... 37
SECTION 13.15. Secured Party Obligations......................................................... 38
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Schedules
Schedule I Aircraft
Schedule II Control Agreements
Schedule III Foreign Pledge Agreements
Schedule IV Material Intellectual Property
Schedule V County Lien Searches
Exhibits
Exhibit I Form of Accession Agreement
Exhibit II Form of Perfection Certificate
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COLLATERAL AGREEMENT dated as of March 12,
2004, among THE GOODYEAR TIRE & RUBBER COMPANY (the
"Company"), the Subsidiaries of the Company
identified herein and WILMINGTON TRUST COMPANY, as
Collateral Agent.
Reference is made to the Indenture and the Intercreditor
Agreement (such terms, and each other capitalized term used and not otherwise
defined herein, having the meaning assigned to it in Article I). Wells Fargo
Bank, N.A., as trustee (the "Trustee") has agreed to enter into the Indenture
and the Investors and Noteholders have agreed to purchase the Notes on the terms
and subject to the conditions set forth in the Indenture. The obligations of the
Investors to purchase the Notes are conditioned upon, among other things, the
execution and delivery of this Agreement by the Company and the other Grantors.
The Grantors, other than the Company, are subsidiaries of the Company, will
derive substantial benefits from the extension of credit to the Company pursuant
to the Indenture and are willing to execute and deliver this Agreement in order
to induce the Investors and the Noteholders to purchase the Notes issued under
the Indenture. Accordingly, the parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Certain Defined Terms. (a) All terms defined in
the New York UCC (as defined herein) and not defined in this Agreement have the
meanings specified therein; the term "instrument" shall have the meaning
specified in Article 9 of the New York UCC.
(b) All terms defined in the Indenture and not defined in this
Agreement have the meanings specified therein. All terms defined in the
Intercreditor Agreement not defined in this Agreement or the Indenture have the
meanings specified therein. The rules of construction specified in Section 1.04
of the Indenture shall also apply to this Agreement.
(c) As used in this Agreement, the following terms have the
meanings specified below:
"ABL Facilities Agreement" means the Term Loan and Revolving
Credit Agreement dated as of March 31, 2003, as amended on February 19, 2004,
among the Company, certain lenders, JPMorgan Chase Bank, as administrative
agent, Citicorp USA Inc., as syndication agent, and Bank of America, N.A. and
The CIT Group/Business Credit, Inc., as documentation agents.
"Accession Agreement" means an accession agreement
substantially in the form of Exhibit I under which a Representative of the
holders of Designated Pari Passu Obligations shall become a party hereto and
appoint the Collateral Agent as collateral agent for such Representative on
behalf of the holders of such Designated Pari Passu Obligations.
"Account Debtor" means any Person who is or who may become
obligated to any Current Assets Grantor under, with respect to or on account of
an Account.
"Act" has the meaning assigned to such term in Section 8.01.
"Additional Subsidiary Agreement" has the meaning assigned to
such term in Section 13.14.
"Aircraft" means all airships, airplanes, helicopters and
other aircraft owned on the date hereof or hereafter acquired by any Other
Collateral Grantor, including those listed on Schedule I hereto, as updated from
time to time pursuant to Section 4.04(c).
"Aircraft Collateral" means the Aircraft, Aircraft Parts and
Aircraft Log Books.
"Aircraft Log Books" means any and all log books, maintenance
records, airworthiness certificates, registration documents and other records
and documents relating to the Aircraft or Aircraft Parts.
"Aircraft Parts" means all engines and propellers (whether or
not affixed to any Aircraft) owned by any Other Collateral Grantor and used or
intended for use in connection with the Aircraft, and all avionics equipment,
radio equipment, navigation equipment, radar equipment and other equipment,
appliances, accessories and accessions used or intended for use in connection
with the Aircraft.
"Article 9 Collateral" means the Current Assets Collateral and
the Other Collateral.
"Bankruptcy Code" means Title 11 of the U.S. Code.
"Canadian Intellectual Property Collateral" means all
Intellectual Property in which security interests are created under the Canadian
Security Agreements.
"Canadian Security Agreements" means the Canadian Collateral
Agreement dated as of March 12, 2004 between Goodyear Canada Inc. and the
Collateral Agent, the Quebec Hypothec and the other Canadian Security Documents
(as such terms are defined in the Canadian Collateral Agreement).
"Claiming Party" has the meaning assigned to such term in
Section 7.02.
"Collateral" means the Pledged Collateral, the Current Assets
Collateral and the Other Collateral.
"Collateral Agent" means Wilmington Trust Company and any
successors thereof appointed in accordance with the terms of this Agreement and,
as applicable, the Indenture and any Designated Pari Passu Obligations Governing
Document, in each case as collateral agent for the holders of the Note
Obligations and the Designated Pari Passu Obligations.
"Collateral Agent Obligations" means all obligations, monetary
and otherwise, of any Indenture Party to the Collateral Agent, or to its Related
Parties, in connection with acts or omissions related to its role as Collateral
Agent under the Noteholder Documents, the Intercreditor Agreement or any
Designated Pari Passu Obligations Governing Document, including, without
limitation, fees, costs, expenses and indemnities, whether primary, secondary,
direct, contingent, fixed or otherwise (including attorneys' and other agents'
fees, costs and expenses and monetary obligations incurred during the pendency
of any bankruptcy, insolvency, receivership or other similar proceeding,
regardless of whether allowed or allowable in such proceeding).
"Consent Asset" means any asset or right of a Grantor the
creation of a security interest in which would be prohibited by or not be
effective under applicable law or would violate or result in a default under any
agreement or instrument in effect on the date hereof (or in the case of any
future grantor on the date it becomes a Grantor) between such Grantor and any
Person other than (a) the Company, (b) any Wholly Owned Subsidiary (as defined
in the Indenture) or (c) any Subsidiary that is not a Wholly
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Owned Subsidiary unless the waiver of such default or violation would require
the consent of any Person other than the Company or another Subsidiary;
provided, however, that no asset or right shall be a Consent Asset to the extent
that Section 9-406, 9-407, 9-408 or 9-409 of the Uniform Commercial Code as in
effect in the applicable jurisdiction, or any other law of the applicable
jurisdiction, shall permit (and excuse any default or violation resulting from)
the creation of a security interest in such asset or right notwithstanding the
provision of such agreement or instrument prohibiting the creation of a security
interest therein or shall render such provision unenforceable.
"Consent Subsidiary" has the meaning assigned to such term in
the Indenture.
"Contributing Party" has the meaning assigned to such term in
Section 7.02.
"Control Agreements" means the agreements listed on Schedule
II.
"Control Notice" has the meaning assigned to such term in each
Lockbox Agreement.
"Copyright License" means any written agreement, now or
hereafter in effect, granting any right to any third party under any copyright
now or hereafter owned by any Other Collateral Grantor or that such Other
Collateral Grantor otherwise has the right to license, or granting any right to
any Other Collateral Grantor under any copyright now or hereafter owned by any
third party, and all rights of such Other Collateral Grantor under any such
agreement.
"Copyrights" means all of the following now owned or hereafter
acquired by any Other Collateral Grantor: (a) all copyright rights in any work
subject to the copyright laws of the United States or any other country, whether
as author, assignee, transferee or otherwise, and (b) all registrations and
applications for registration of any such copyright in the United States or any
other country, including registrations, recordings, supplemental registrations
and pending applications for registration in the United States Copyright Office.
"Current Assets Collateral" means any and all of the following
assets and properties now owned or at any time hereafter acquired by any Current
Assets Grantor or in which such Current Assets Grantor now has or at any time in
the future may acquire any right, title or interest: (a) all Accounts; (b) all
Chattel Paper; (c) all Deposit Accounts (and all cash, checks and other
negotiable instruments, funds and other evidences of payment held therein); (d)
all Inventory; (e) to the extent evidencing, governing, securing or otherwise
related to the items referred to in the preceding clauses (a), (b), (c) and (d),
all Documents, General Intangibles (other than Intellectual Property and, in the
case of any Current Assets Grantor that is organized under the laws of Canada or
one or more provinces thereof, indemnification claims, contract rights
(including rights under leases, whether entered into as lessor or lessee, Swap
Agreements and other agreements), goodwill, registrations and franchises),
Instruments, Investment Property (other than (i) Pledged Equity Interests, (ii)
the Equity Interests described in clauses (b), (c), (d) and (e) of the
definition of Excluded Security Interests and (iii) Proceeds in respect of
Equity Interests described in clauses (i), (ii) and (iii)) and Letter of Credit
Rights; (f) all books and records related to the foregoing; and (g) all Proceeds
of any and all of the foregoing and all collateral security and guarantees given
by any Person with respect to any of the foregoing.
"Current Assets Grantors" means the Company, each Subsidiary
that is listed as a Current Assets Grantor on the signature pages hereto or that
becomes a Current Assets Grantor pursuant to Section 13.14.
"Deposit Account Institution" means each financial institution
at which a Deposit Account in the Lockbox System is maintained.
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"Designated Pari Passu Obligations" has the meaning assigned
to such term in Section 11.01.
"Designated Pari Passu Obligations Governing Documents" means,
as to any Designated Pari Passu Obligations, the credit agreement, note
agreement, indenture or other instrument or document under which such Designated
Pari Passu Obligations shall have been issued or incurred.
"Designated Pari Passu Obligations Secured Parties" means, at
any time, each holder of, or obligee in respect of, any Designated Pari Passu
Obligations outstanding at such time.
"Effective Date" means the date of this Agreement.
"Equity Interests" means shares of capital stock, partnership
interests, membership interests in limited liability companies, beneficial
interests in trusts or other equity ownership interests in any Persons, and any
warrants, options or other rights entitling the holders thereof to purchase or
acquire any such equity interests.
"European Facilities Agreement" means the $650,000,000 Term
Loan and Revolving Credit Agreement dated as of March 31, 2003, among Goodyear
Dunlop Tires Europe B.V., the other borrowers thereunder, certain lenders,
JPMorgan Chase Bank, as administrative agent, and Deutsche Bank AG, as
syndication agent.
"Event of Default" means an Event of Default under and as
defined in the Indenture or any Designated Pari Passu Obligations Governing
Document.
"Excluded Operating Account" means payroll and other operating
accounts of the Company or any other Current Assets Grantor that are not used to
receive (a) payments from any Account Debtor in respect of Accounts or (b)
payments in respect of Inventory, and that contain only such amounts as are
required in the Company's or such other Current Assets Grantor's good faith
judgment for near-term operational purposes.
"Excluded Security Interests" means (a) Equity Interests in
any Subsidiary with consolidated assets not greater than $10,000,000 as of
September 30, 2003, or if such Equity Interests are acquired by the Company or a
Subsidiary after the date hereof, as of the end of the most recent fiscal
quarter for which financial statements have been filed with the SEC, (b) Equity
Interests in any Consent Subsidiary, (c) Equity Interests in Goodyear Canada
Inc. and Goodyear S.A., (d) Equity Interests in any Foreign Subsidiary with
respect to which a Financial Officer has delivered an Officer's Certificate
Certificate certifying that the Company has determined, on the basis of
reasonably inquiries in the jurisdiction of such Foreign Subsidiary, that such
pledge would affect materially and adversely the ability of such Foreign
Subsidiary to conduct its business in such jurisdiction and (e) that portion of
capital stock or other securities of any Subsidiary having a value (defined as
the principal amount, par value, book value as carried by the Company or market
value, whichever is greatest) that, when considered in the aggregate with all
other capital stock or other securities of such Subsidiary subject to a security
interest securing the Note Obligations, exceeds 19.99% of the principal amount
of the then outstanding Notes (such portion, the "Excluded Securities");
provided, however, that in the event that Rule 3-16 of Regulation S-X under the
Securities Act of 1933, as now or hereafter in effect, is amended, modified or
interpreted by the Securities and Exchange Commission to require (or is replaced
with another rule or regulation or any other law, rule or regulation is adopted,
which would require) the filing with the Securities and Exchange Commission (or
any other governmental agency) of separate financial statements of any
Subsidiary due to the fact that such Subsidiary's capital stock or other
securities secure the Note Obligations, then the Excluded Securities of such
Subsidiary shall automatically be deemed to include
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that part of the capital stock and other securities of such Subsidiary such that
such Subsidiary remains exempt from such requirement, and in such event, this
Agreement may be amended or modified, without the consent of any Noteholder or
other Secured Party, for so long as and to the extent necessary to release the
security interests in the Excluded Securities securing the Note Obligations;
provided further, however, that the holders of Designated Pari Passu Obligations
will continue to be secured by a security interest in any Excluded Securities
unless specified to the contrary in the applicable Accession Agreement.
Notwithstanding the foregoing, if any Priority Lien Obligation (as defined in
the Indenture) or Designated Pari Passu Lien Obligation is secured by a security
interest in any securities that are Excluded Securities, such obligation is
registered under the Securities Act of 1933, as now or hereafter in effect, and
in connection with such registration, the Company is required to file with the
Securities and Exchange Commission (or any other governmental agency) separate
financial statements of the Subsidiary of the Company that is the issuer of such
securities, then such securities will not be considered Excluded Securities and
will be deemed part of Pledged Collateral to secure Note Obligations.
"FAA" means the Federal Aviation Administration or the United
States Department of Transportation or both, as the context may require, or any
successors thereto.
"Federal Securities Laws" has the meaning assigned to such
term in Section 6.05.
"Financial Officer" means the chief financial officer,
principal accounting officer, treasurer or any assistant treasurer of the
Company.
"Foreign Pledge Agreement" means a pledge agreement securing
the Obligations or any of them that is governed by the law of a jurisdiction
other than the United States of America and reasonably satisfactory in form and
substance to the Collateral Agent.
"Foreign Subsidiary" means any Subsidiary organized under the
laws of a jurisdiction other than the United States of America or any of its
territories or possessions or any political subdivision thereof.
"General Intangibles" means, as to any Grantor, all choses in
action and causes of action and all other intangible personal property of every
kind and nature (other than Accounts) now owned or hereafter acquired by such
Grantor, including to the extent relevant corporate or other business records,
indemnification claims, contract rights (including rights under leases, whether
entered into as lessor or lessee, Swap Agreements and other agreements),
Intellectual Property, goodwill, registrations, franchises, tax refund claims
and, in the case of any Current Assets Grantor only, any letter of credit,
guarantee, claim, security interest or other security held by or granted to such
Grantor to secure payment by an Account Debtor of any Accounts.
"Grantor" means each of the Current Assets Grantors and the
Other Collateral Grantors.
"Guarantor" means any Subsidiary that has issued a Subsidiary
Guarantee (as defined in the Indenture).
"Indemnified Party" has the meaning assigned to such term in
Section 10.04.
"Indenture" means the Indenture dated as of March 12, 2004,
among the Company, as Issuer, the Guarantors and Wells Fargo Bank, N.A., as
Trustee, as amended, extended, renewed, restated, supplemented or otherwise
modified from time to time.
"Indenture Parties" means the Company and each Guarantor.
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"Intellectual Property" means, as to any Grantor, all
intellectual and similar property of every kind and nature now owned or
hereafter acquired by such Grantor, including inventions, designs, Patents,
Copyrights, Licenses, Trademarks, trade secrets, confidential or proprietary
technical and business information, know-how, show-how or other data or
information, software and databases and all embodiments or fixations thereof and
related documentation, registrations and franchises, and all additions,
improvements and accessions to, and books and records describing or used in
connection with, any of the foregoing.
"Intercompany Indebtedness" means any Indebtedness (as defined
in the Indenture) of the Company or any Subsidiary to the Company or any other
Subsidiary.
"Intercompany Obligor" means, with respect to any Intercompany
Indebtedness, the obligor in respect of such Intercompany Indebtedness.
"Intercreditor Agreement" means the Lien Subordination and
Intercreditor Agreement dated as of March 12, 2004, among JPMorgan Chase Bank,
as Credit Facilities Collateral Agent, Wilmington Trust Company, as Note
Collateral Agent, the Company, the Subsidiaries named therein and any other
persons becoming parties thereto in accordance with the provisions thereof.
"License" means any Patent License, Trademark License,
Copyright License or other license or sublicense agreement to which any Other
Collateral Grantor is a party.
"Local Collection Account" means a deposit account of a
Grantor not subject to the control of the Collateral Agent pursuant to the
Lockbox System; provided that (a) such account shall not receive any payments in
respect of Accounts or Inventory other than that generated or sold by the
Company's retail or Wingfoot divisions and (b) the applicable Grantor shall
irrevocably instruct the Deposit Account Institution at which such deposit
account is maintained to remit all funds on deposit in such deposit account to a
Deposit Account in the Lockbox System periodically, and in no event less
frequently than weekly, such instructions to be given, in the case of a Local
Collection Account opened after the Effective Date, as promptly as practicable
(and in no event later than 10 Business Days (as defined in the Indenture))
after the opening of such Local Collection Account.
"Lockbox System" has the meaning assigned to such term in
Section 4.07.
"Master Guarantee and Collateral Agreement" has the meaning
assigned to such term in the Intercreditor Agreement.
"Material Adverse Change" means a material adverse change in
or effect on (a) the business, operations, properties, assets or financial
condition (including as a result of the effects of any contingent liabilities
thereon) of the Company and its Subsidiaries, taken as a whole, (b) the ability
of the Company and the Guarantors, taken as a whole, to perform obligations
under the Noteholders Documents that are material to the rights or interests of
the Noteholders or (c) the rights of or benefits available to the Noteholders
under the Noteholder Documents that are material to the interests of the
Noteholders.
"Material Intellectual Property" means all Intellectual
Property of the Other Collateral Grantors, other than Intellectual Property that
in the aggregate is not material to the business of the Company and the
Subsidiaries, taken as a whole.
"Mortgage" means the Fourth Priority Open-End Mortgage,
Assignment of Leases and Rents, Security Agreement and Financing Statement From
the Company to the Collateral Agent, dated as of March 12, 2004, with respect to
the Company's corporate headquarters in Akron, Ohio.
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"Mortgaged Property" means the property subject to the
Mortgage to the extent that such property does not constitute a Senior Unsecured
Indenture Property or a "manufacturing facility" as defined in the Swiss Franc
Bond Agreement.
"New Control Agreement" means, with respect to each Control
Agreement, such Control Agreement as amended, supplemented or otherwise modified
in form and substance reasonably satisfactory to the Collateral Agent (which
their execution thereof shall evidence); provided that any amendment, supplement
or modification to any Control Agreement substantially similar to the amendments
made to the Blocked Account Control Agreement, dated as of May 15, 2003, by and
among the Company, the Credit Agent and JPMorgan Chase Bank, in its capacity as
depository bank, shall be deemed to be reasonably satisfactory to the Collateral
Agent.
"New York UCC" means the Uniform Commercial Code as from time
to time in effect in the State of New York.
"Note Obligations" means (a) the due and punctual payment of
(i) the principal of and interest (including interest accruing during the
pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding) on
the Notes, when and as due, whether at maturity, by acceleration, upon one or
more dates set for prepayment or otherwise, (ii) all other monetary obligations
of the Company or any of its Subsidiaries to any of the Note Secured Parties
under any Noteholder Document or the Intercreditor Agreement, including fees,
costs, expenses and indemnities, whether primary, secondary, direct, contingent,
fixed or otherwise (including monetary obligations incurred during the pendency
of any bankruptcy, insolvency, receivership or other similar proceeding,
regardless of whether allowed or allowable in such proceeding) and (iv) all
amounts due under any guarantee of any of the foregoing, including any guarantee
contained in the Indenture, and (b) the due and punctual performance of all
other obligations of the Company or any of its Subsidiaries to any of the Note
Secured Parties under any Noteholder Document.
"Note Secured Parties" means, at any time, the Trustee, the
Collateral Agent and each other holder of, or obligee in respect of, any Note
Obligations outstanding at such time.
"Noteholder Documents" means the Indenture, the Notes, this
Agreement, the Other Security Documents, and such other agreements, instruments
and certificates executed and delivered pursuant to any Noteholder Document at
any time or otherwise evidencing or securing any Note Obligations.
"Noteholders" means the holders of the Notes.
"Notes" or "Senior Secured Notes" means the 11% Senior Secured
Notes due 2011 and the Senior Secured Floating Rate Notes due 2011 issued on the
Effective Date and any Additional Securities.
"Obligations" means the Note Obligations, the Designated Pari
Passu Obligations and the Collateral Agent Obligations.
"Other Collateral" means any and all of the following assets
and properties (other than assets or properties constituting Senior Unsecured
Indenture Properties or "manufacturing facilities" under and as defined in the
Swiss Franc Bond Agreement) now owned or at any time hereafter acquired by any
Other Collateral Grantor or in which such Other Collateral Grantor now has or at
any time in the future may acquire any right, title or interest: (a) all
Documents; (b) all Equipment (other than fixtures to real property not
constituting the Mortgaged Property); (c) all General Intangibles (including
Intellectual
7
Property); (d) all Instruments; (e) all Investment Property (other than (i)
Pledged Equity Interests, (ii) the Equity Interests described in clauses (b),
(c), (d) and (e) of the definition of Excluded Equity Interests and (iii)
Proceeds in respect of Equity Interests described in clauses (i), (ii) and
(iii)); (f) all Letter-of-Credit rights; (g) all books and records pertaining to
any of the foregoing; (h) all Aircraft Collateral; and (i) to the extent not
otherwise included, all Proceeds and products of any and all of the foregoing
and all collateral security and guarantees given by any Person with respect to
any of the foregoing; provided, however, that, notwithstanding any of the
foregoing provisions of this definition, the Other Collateral shall not include
any (i) Current Assets Collateral or (ii) Consent Assets.
"Other Collateral Grantors" means the Company and each
Subsidiary that is listed as an Other Collateral Grantor on the signature pages
hereto or that becomes an Other Collateral Grantor pursuant to Section 13.14.
"Other Security Documents" means the Mortgage, the Canadian
Security Agreements, the Foreign Pledge Agreements and the New Control
Agreements.
"Patent License" means any written agreement, now or hereafter
in effect, granting to any third party any right to make, use or sell any
invention on which a patent, now or hereafter owned by Other Collateral Grantor
or that any Other Collateral Grantor otherwise has the right to license, is in
existence, or granting to any Other Collateral Grantor any right to make, use or
sell any invention on which a patent, now or hereafter owned by any third party,
is in existence, and all rights of any such Grantor under any such agreement.
"Patents" means all of the following now owned or hereafter
acquired by any Other Collateral Grantor: (a) all letters patent of the United
States or the equivalent thereof in any other country, all registrations and
recordings thereof, and all applications for letters patent of the United States
or the equivalent thereof in any other country, including registrations,
recordings and pending applications in the United States Patent and Trademark
Office or any similar offices in any other country, including those listed on
Schedule II to the Perfection Certificate, as updated from time to time pursuant
to Section 4.04(c), and (b) all reissues, continuations, divisions,
continuations-in-part, renewals or extensions thereof, and the inventions
disclosed or claimed therein, including the right to make, use and/or sell the
inventions disclosed or claimed therein.
"Perfection Certificate" means a certificate substantially in
the form of Exhibit II.
"Person" means any individual, corporation, partnership,
limited liability company, joint venture, association, joint-stock company,
trust, unincorporated organization, government or any agency or political
subdivision thereof or any other entity.
"Pledged Collateral" means (a) the Pledged Equity Interests;
(b) the Pledged Debt Securities; (c) subject to Section 3.02, all payments of
principal or interest, dividends, cash, instruments and other property from time
to time received, receivable or otherwise distributed in respect of, in exchange
for or upon the conversion of, and all other Proceeds received in respect of,
the securities referred to in the preceding clauses (a) and (b); (d) subject to
Section 3.02, all rights and privileges of the Collateral Grantors with respect
to the securities and other property referred to in clauses (a), (b) and (c)
above; and (e) all Proceeds of any of the foregoing.
"Pledged Debt Securities" means all debt securities (as
defined in Article 8 of the New York UCC) owned by any Other Collateral Grantor
(other than Excluded Security Interests) on the date hereof or obtained by it in
the future, and any promissory notes or other instruments evidencing any such
debt securities.
8
"Pledged Equity Interests" means all Equity Interests in
Subsidiaries (other than Excluded Security Interests) owned by any Other
Collateral Grantor on the date hereof or obtained or owned by it in the future,
and the certificates representing all the foregoing Equity Interests, including
the Equity Interests listed on Schedule 3A to the Perfection Certificate, as
updated from time to time pursuant to Section 4.04(c); provided, that the
Pledged Equity Interests shall not include more than 65% of the issued and
outstanding Equity Interests of any Foreign Subsidiary.
"RBC Deposit Account" means the Deposit Account maintained
with The Royal Bank of Canada, with respect to which a Lockbox Agreement shall
be executed by the applicable Current Assets Grantor and The Royal Bank of
Canada.
"Related Parties" means, with respect to any specified Person,
such Person's Affiliates and the respective directors, officers, employees,
agents, counsel and other advisors of such Person and such Person's Affiliates.
"Representative" means (a) in the case of the Note
Obligations, the Trustee and (b) in the case of any Designated Pari Passu
Obligations, any administrative agent, trustee or similar representative
designated pursuant to Article IX.
"Secured Parties" means, at any time, the Trustee, the
Collateral Agent and each other holder of, or obligee in respect of, any
Obligations outstanding at such time.
"Security Documents" means this Agreement and the Other
Security Documents.
"Security Interest" means each security interest granted under
Article IV.
"Senior Obligations Security Documents" means the Senior
Obligations Security Documents as defined in the Intercreditor Agreement.
"Senior Payment in Full" means such time as all of the Senior
Obligations (as defined in the Intercreditor Agreement) have been paid in full
and any commitments to extend credit that would constitute Senior Obligations
has been terminated.
"Senior Unsecured Indenture Properties" means each "Restricted
Property" (as defined in the Senior Unsecured Indentures) of the Company and
each "Restricted Subsidiary" (as defined in the Senior Unsecured Indentures).
"Senior Unsecured Indentures" means (a) the Indenture dated as
of March 15, 1996, between the Company and Chemical Bank, as trustee, as
supplemented on December 3, 1996, March 11, 1998, and March 17, 1998, (b) the
Indenture dated as of March 1, 1999, between the Company and The Chase Manhattan
Bank, as trustee, as supplemented on March 14, 2000, and August 15, 2001 and (c)
the Fiscal Agency Agreement among the Company and Citibank N.A., London and
Banque Internationale a Luxembourg S.A.
"Subsidiary" means any corporation, limited liability company,
partnership, association or other entity the accounts of which are consolidated
with those of the Company in the Company's consolidated financial statements in
accordance with GAAP (as defined in the Indenture) as of such date, as well as
any other corporation, limited liability company, partnership, association or
other entity of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power or, in the
case of a partnership, more than 50% of the general partnership
9
interests are, as of such date, owned, controlled or held by the Company or one
or more subsidiaries of the Company or by the Company and one or more
subsidiaries of the Company.
"Swap Agreement" means any agreement with respect to any swap,
forward, future or derivative transaction or option or similar agreement
involving, or settled by reference to, one or more rates or prices for one or
more currencies, commodities, equity or debt instruments or securities, or
economic, financial or pricing indices or measures of economic, financial or
pricing risk or value or any similar transaction or any combination of these
transactions.
"Swiss Franc Bond Agreement" means the Bond Agreement dated as
of March 17, 1986, between the Company and Union Bank of Switzerland, Credit
Suisse, Morgan Stanley S.A. and Swiss Bank Corporation, as in effect on the date
hereof.
"Trademark License" means any written agreement, now or
hereafter in effect, granting to any third party any right to use any trademark
now or hereafter owned by any Other Collateral Grantor or that any such Grantor
otherwise has the right to license, or granting to any Other Collateral Grantor
any right to use any trademark now or hereafter owned by any third party, and
all rights of any such Grantor under any such agreement.
"Trademarks" means all of the following now owned or hereafter
acquired by any Other Collateral Grantor: (a) all trademarks, service marks,
trade names, corporate names, company names, business names, fictitious business
names, trade styles, trade dress, logos, other source or business identifiers,
designs and general intangibles of like nature, now existing or hereafter
adopted or acquired, all registrations and recordings thereof, and all
registration and recording applications filed in connection therewith, including
registrations and registration applications in the United States Patent and
Trademark Office or any similar offices in any State of the United States or any
other country or any political subdivision thereof, and all extensions or
renewals thereof, including those listed on Schedule II to the Perfection
Certificate, as updated from time to time pursuant to Section 4.04(c), (b) all
goodwill associated therewith or symbolized thereby and (c) all other assets,
rights and interests that uniquely reflect or embody such goodwill.
"Trustee" means the trustee under the Indenture.
"US Dollar Equivalent" means with respect to any monetary
amount in a currency other than US dollars, at any time for determination
thereof, the amount of US dollars obtained by converting such foreign currency
involved in such computation into US dollars at the spot rate for the purchase
of US dollars with the applicable foreign currency as published in The Wall
Street Journal in the "Exchange Rates" column under the heading "Currency
Trading" on the date two Business Days prior to such determination.
"US Revolving Facility Agreement" means the $750,000,000
Amended and Restated Revolving Credit Agreement dated as of March 31, 2003,
among the Company, certain lenders and JPMorgan Chase Bank, as administrative
agent.
"US Term Facility Agreement" means the $645,454,545 Term Loan
Agreement dated as of March 31, 2003, among the Company, certain lenders,
JPMorgan Chase Bank, as administrative agent, and BNP Paribas, as syndication
agent.
10
ARTICLE II
Intercreditor Agreement
SECTION 2.01. Intercreditor Agreement. THIS AGREEMENT AND THE
OTHER NOTEHOLDER DOCUMENTS, AND THE LIENS, RIGHTS, REMEDIES, DUTIES AND
OBLIGATIONS PROVIDED FOR HEREIN AND THEREIN SHALL BE SUBJECT IN ALL RESPECTS TO
THE PROVISIONS OF THE INTERCREDITOR AGREEMENT AND, TO THE EXTENT PROVIDED
THEREIN, THE SENIOR OBLIGATIONS SECURITY DOCUMENTS. IN THE EVENT OF ANY CONFLICT
OR INCONSISTENCY BETWEEN THE PROVISIONS OF THIS AGREEMENT OR ANY OTHER
NOTEHOLDER DOCUMENT AND THE INTERCREDITOR AGREEMENT, THE PROVISIONS OF THE
INTERCREDITOR AGREEMENT SHALL CONTROL.
ARTICLE III
Pledge of Securities
SECTION 3.01. Pledge. As security for the payment or
performance, as the case may be, in full of the Note Obligations and the
Designated Pari Passu Obligations, on an equal and ratable basis, and the
Collateral Agent Obligations, each Other Collateral Grantor hereby pledges and
grants to the Collateral Agent (and its agents or sub-agents, as the Collateral
Agent may designate or appoint from time to time), and their successors and
assigns a security interest in all such Other Collateral Grantor's right, title
and interest in, to and under the Pledged Collateral, to have and to hold all
such Pledged Collateral, together with all right, title, interest, powers,
privileges and preferences pertaining or incidental thereto, unto the Collateral
Agent, its successors and assigns, for the benefit of the applicable Secured
Parties; subject, however, to the terms, covenants and conditions hereinafter
set forth.
SECTION 3.02. Voting Rights; Dividends and Interest. (a)
Unless and until an Event of Default shall have occurred and be continuing and
the Collateral Agent shall have notified the Other Collateral Grantors that
their rights under this Section 3.02 are being suspended:
(i) Each Other Collateral Grantor shall be entitled to
exercise any and all voting and/or other rights and powers inuring to
an owner of the Pledged Collateral or any part thereof for any purpose
consistent with the terms of this Agreement and the Indenture,
including the right to sell or otherwise transfer such Pledged
Collateral in accordance with the terms of the Indenture.
(ii) The Collateral Agent shall execute and deliver to each
Other Collateral Grantor, or cause to be executed and delivered to such
Other Collateral Grantor, all such proxies, powers of attorney,
certificates and other instruments as such Other Collateral Grantor may
reasonably request in writing for the purpose of enabling such Other
Collateral Grantor to exercise the voting and/or rights and powers it
is entitled to exercise pursuant to subparagraph (i) above.
(iii) Each Other Collateral Grantor shall be entitled to
receive and retain any and all dividends, interest, principal and other
distributions paid on or distributed in respect of the Pledged
Collateral to the extent and only to the extent that such dividends,
interest, principal and other distributions are permitted by, and
otherwise paid or distributed in accordance with, the terms and
conditions of the Indenture and applicable laws; provided that any
noncash dividends, interest, principal or other distributions that
would constitute Pledged Equity Interests or Pledged Debt Securities,
whether resulting from a subdivision, combination or reclassification
of the
11
outstanding Equity Interests of the issuer of any Pledged Collateral or
received in exchange for Pledged Collateral or any part thereof, or in
redemption thereof, or as a result of any merger, consolidation,
acquisition or other exchange of assets to which such issuer may be a
party or otherwise, shall be and become part of the Pledged Collateral.
(b) Upon the occurrence and during the continuance of an Event
of Default, after the Collateral Agent shall have notified the Other Collateral
Grantors of the suspension of their rights under paragraph (a)(iii) of this
Section, then all rights of any Other Collateral Grantor to dividends, interest,
principal or other distributions that such Other Collateral Grantor is
authorized to receive pursuant to paragraph (a)(iii) of this Section shall
cease, and all such rights shall thereupon become vested in the Collateral
Agent, which shall have the sole and exclusive right and authority to receive
and retain such dividends, interest, principal or other distributions. All
dividends, interest, principal or other distributions received by any Other
Collateral Grantor contrary to the provisions of this Section shall be held in
trust for the benefit of the Collateral Agent, shall be segregated from other
property or funds of such Other Collateral Grantor and shall be forthwith
delivered to the Collateral Agent upon demand in the form in which so received
(with any necessary endorsement). Any and all money and other property paid over
to or received by the Collateral Agent pursuant to the provisions of this
paragraph (b) shall be retained by the Collateral Agent in an account to be
established by the Collateral Agent upon receipt of such money or other property
and shall be applied in accordance with the provisions of Section 6.03; provided
that in no event shall the Collateral Agent be obligated to invest and/or pay
interest on any such money or other property. After all Events of Default have
been cured or waived and the Company has delivered to the Collateral Agent a
certificate to that effect, the Collateral Agent shall promptly repay to each
Other Collateral Grantor (without interest) all dividends, interest, principal
or other distributions that such Other Collateral Grantor would otherwise be
permitted to retain pursuant to the terms of paragraph (a)(iii) of this Section
and that remain in such account.
(c) Upon the occurrence and during the continuance of an Event
of Default, after the Collateral Agent shall have notified the Other Collateral
Grantors of the suspension of their rights under paragraph (a)(i) of this
Section, then all rights of any Other Collateral Grantor to exercise the voting
and consensual rights and powers it is entitled to exercise pursuant to
paragraph (a)(i) of this Section, and the obligations of the Collateral Agent
under paragraph (a)(ii) of this Section, shall cease, and all such rights shall
thereupon become vested in the Collateral Agent, which shall have the sole and
exclusive right and authority to exercise such voting and consensual rights and
powers; provided that, unless otherwise directed by (A) each of (x) the Trustee
(if there is an Event of Default under the Indenture) and (y) each
Representative (if there is an Event of Default under the applicable Designated
Pari Passu Obligations Governing Document) or (B) holders of at least 25% in
aggregate principal amount of the outstanding (x) Notes (if there is an Event of
Default under the Indenture) and (y) Designated Pari Passu Obligations (to the
extent that there is an Event of Default under the applicable Designated Pari
Passu Obligations Governing Document), the Collateral Agent shall have the right
from time to time following and during the continuance of an Event of Default to
permit the Other Collateral Grantors to exercise such rights.
(d) Any notice given by the Collateral Agent to the Other
Collateral Grantors suspending their rights under paragraph (a) of this Section
(i) may be given by telephone if promptly confirmed in writing, (ii) may be
given to one or more of the Other Collateral Grantors at the same or different
times and (iii) may suspend the rights of the Other Collateral Grantors under
paragraph (a)(i) or paragraph (a)(iii) in part without suspending all such
rights (as specified by the Collateral Agent in its sole and absolute
discretion) and without waiving or otherwise affecting the Collateral Agent's
rights to give additional notices from time to time suspending other rights so
long as an Event of Default has occurred and is continuing.
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ARTICLE IV
Security Interests in Personal Property
SECTION 4.01. Creation of Security Interests. (a) As security
for the payment or performance, as the case may be, in full of the Note
Obligations and the Designated Pari Passu Obligations, on an equal and ratable
basis, and the Collateral Agent Obligations, each Current Assets Grantor hereby
grants to the Collateral Agent (and its agents or sub-agents, as the Collateral
Agent may designate or appoint from time to time) and their successors and
assigns, for the benefit of the Secured Parties, a security interest in all
right, title or interest in or to any and all the Current Assets Collateral now
owned or at any time hereafter acquired by such Current Assets Grantor or in
which such Current Assets Grantor now has or at any time in the future may
acquire any right, title or interest.
(b) As security for the payment or performance, as the case
may be, in full of the Note Obligations and the Designated Pari Passu
Obligations, on an equal and ratable basis, and the Collateral Agent
Obligations, each Other Collateral Grantor hereby grants to the Collateral Agent
(and its agents or sub-agents, as the Collateral Agent may designate or appoint
from time to time) and their successors and assigns, for the benefit of the
Secured Parties, a security interest in all right, title or interest in or to
any and all the Other Collateral now owned or at any time hereafter acquired by
such Other Collateral Grantor or in which such Other Collateral Grantor now has
or at any time in the future may acquire any right, title or interest.
(c) The security interests granted under this Section are
granted as security only and shall not subject the Collateral Agent or any other
Secured Party to, or in any way alter or modify, any obligation or liability of
any Grantor with respect to or arising out of the Article 9 Collateral.
SECTION 4.02. Certain Filings. (a) Each Grantor hereby
irrevocably authorizes the Collateral Agent at any time and from time to time to
file in any relevant jurisdiction any initial financing statements (including
fixture filings) with respect to the Article 9 Collateral of such Grantor or any
part thereof and amendments thereto that contain the information required by
Article 9 of the Uniform Commercial Code of each applicable jurisdiction for the
filing of any financing statement or amendment, including (i) whether such
Grantor is an organization, the jurisdiction in which it is organized, the type
of organization and any organizational identification number issued to such
Grantor and (ii) in the case of a financing statement filed as a fixture filing,
a sufficient description of the real property to which such Article 9 Collateral
relates. Each Grantor agrees to provide such information to the Collateral Agent
promptly upon request. Each Grantor also ratifies its authorization for the
Collateral Agent to file in any relevant jurisdiction any initial financing
statements or amendments thereto if filed prior to the date hereof.
(b) The Collateral Agent is further authorized to file with
the United States Patent and Trademark Office or United States Copyright Office
(or any successor office or any similar office in any other country) such
documents as may be necessary or advisable for the purpose of perfecting,
confirming, continuing, enforcing or protecting any security interest granted by
any Grantor in any Material Intellectual Property, without the signature of such
Grantor, and naming such Grantor or Grantors as debtors and the Collateral Agent
as secured party.
SECTION 4.03. Representations and Warranties. The Grantors
jointly and severally represent and warrant to the Secured Parties that:
(a) Each Grantor has good and valid rights (including
ownership rights) in the material Article 9 Collateral with respect to which it
has purported to grant a Security Interest hereunder.
13
(b) When executed and delivered, this Agreement will be
effective to create in favor of the Collateral Agent for the benefit of the
Secured Parties a valid and enforceable security interest in the Collateral to
the extent contemplated by this Agreement, and (i) when the Collateral
constituting certificated securities (as defined in the Uniform Commercial Code)
is delivered to the Credit Agent together with instruments of transfer duly
endorsed in blank (or in the case of any such certificated securities which are
then in the possession of the Credit Agent, upon execution and delivery of the
Intercreditor Agreement), this Agreement will create, to the extent contemplated
by this Agreement, a perfected security interest in all right, title and
interest of the Grantors in such certificated securities to the extent
perfection is governed by the Uniform Commercial Code as in effect in any
applicable jurisdiction, subject to no other Lien other than Permitted
Collateral Liens that take priority over security interests in certificated
securities perfected by the possession of such securities under the Uniform
Commercial Code as in effect in the applicable jurisdiction, and (ii) when
financing statements in appropriate form are filed in the offices specified in
the Perfection Certificate, this Agreement will create a perfected security
interest in all right, title and interest of the Grantors in the remaining
Collateral to the extent perfection can be obtained by filing Uniform Commercial
Code financing statements in such jurisdictions, subject to no other Lien other
than Permitted Collateral Liens. The exclusion of the Consent Assets from the
Collateral does not materially reduce the aggregate valued of the Collateral.
(c) The Mortgage, upon execution and delivery by the parties
thereto, will create in favor of the Collateral Agent, for the benefit of the
Secured Parties, a legal, valid and enforceable Lien on all the Company's right,
title and interest in and to the Mortgaged Property and the proceeds thereof,
and when the Mortgage has been filed in the appropriate jurisdiction, the
Mortgage will create a perfected Lien on all right, title and interest of the
Company in the Mortgaged Property and the proceeds thereof, prior and superior
in right to Liens in favor of any other Person (other than Liens or other
encumbrances for which exceptions are taken in the policies of title insurance
delivered in respect of the Mortgaged Property on or prior to the Effective Date
and Permitted Collateral Liens).
(d) Upon the recordation of this Agreement or a memorandum of
this Agreement with the United States Patent and Trademark Office, this
Agreement will create a perfected Lien on all right, title and interest of the
Grantors in the Material, Intellectual Property in which a security interest may
be perfected by such recordation in the United States Patent and Trademark
Office, in each case prior and superior in right to any other Person, subject to
Permitted Collateral Liens (it being understood that subsequent recordings in
the United Sates Patent and Trademark Office may be necessary to perfect a Lien
on registered trademarks and trademark applications acquired by the Grantors
after the Effective Date). As of the Effective Date, Schedule IV sets forth all
the Material Intellectual Property.
(e) Upon the recordation of this Agreement with the Federal
Aviation Administration, this Agreement will create a perfected Lien on all
right, title and interest of the Grantors in the Aircraft Collateral in which a
security interest may be perfected by such recordation with the Federal Aviation
Administration, in each case prior and superior in right to any other Person,
subject to Permitted Collateral Liens.
(f) None of the Perfection Certificate or any other written
information relating to the Collateral delivered after the date hereof by or on
behalf of any Grantor to the Trustee, the Collateral Agent or any Noteholders
pursuant to any provision of the Noteholder Documents is or will be incorrect
when delivered in any respect material to the rights or interest of the (x)
Noteholders or (y) the holders of the Designated Pari Passu Obligations.
SECTION 4.04. Covenants. (a) Each Grantor agrees promptly (and
in any event within 30 days) to notify the Collateral Agent in writing of any
change (i) in its corporate name, (ii) in the location of its chief executive
office, (iii) in its identity or type of organization or corporate structure,
14
(iv) in its federal taxpayer identification number or organizational
identification number or (v) in its jurisdiction of organization. Each Grantor
agrees promptly to provide the Collateral Agent with certified organizational
documents reflecting any of the changes described in the first sentence of this
paragraph.
(b) Each Grantor agrees to maintain, at its own cost and
expense, such complete and accurate records with respect to the Article 9
Collateral owned by it as shall be consistent with its current practices and in
accordance with such prudent and standard practices used in industries that are
the same as or similar to those in which such Grantor is engaged, but in any
event to include complete accounting records indicating all payments and
proceeds received with respect to any part of the Article 9 Collateral, and, at
such time or times as the Collateral Agent may reasonably request, promptly to
prepare and deliver to the Collateral Agent schedules (the "Article 9
Schedules") in form and detail reasonably satisfactory to the Collateral Agent
showing the identity, amount and location of any specified Article 9 Collateral;
provided that until the Senior Payment in Full shall have occurred, the
Grantors' obligations under this Section 4.04(b) to prepare and deliver the
Article 9 Schedules shall be satisfied by the prompt delivery by the Company to
the Collateral Agent of those schedules delivered in accordance with Section
4.04(b) of the Master Guarantee and Collateral Agreement.
(c) Each year, at the time of the delivery of annual financial
statements of the Company, with respect to the preceding fiscal year pursuant to
the Indenture, the Company shall deliver to the Collateral Agent a certificate
executed on behalf of the Company by a Financial Officer and a legal officer of
the Company setting forth the information required pursuant to the Perfection
Certificate (including the Schedules thereto) or confirming that there has been
no change in such information since the date of such certificate or the date of
the most recent certificate delivered pursuant to this paragraph, and setting
forth for the Aircraft owned by any Other Collateral Grantor and not already
listed on Schedule I hereto information sufficient to permit the Collateral
Agent to file notices of its security interests in such Aircraft with the
Federal Aviation Administration, including the model number, the tail number,
the name, the serial number and the location of such Aircraft (and Schedule 1
shall be automatically updated to list any Aircraft identified in any such
certificate).
(d) At any time after the Senior Payment in Full shall have
occurred or an Event of Default shall have occurred and be continuing, the
Collateral Agent and such Persons as the Collateral Agent may reasonably
designate shall have the right, at the Grantors' own cost and expense, to
inspect the Article 9 Collateral and the premises upon which any of the Article
9 Collateral is located and to verify under reasonable procedures, in accordance
with the provisions of the Indenture, the validity, amount, quality, quantity,
value, condition and status of, or any other matter relating to, the Article 9
Collateral, including, only after the occurrence and during the continuance of
an Event of Default, in the case of Accounts or the Article 9 Collateral in the
possession of any third person, by contacting Account Debtors or the third
person possessing such Article 9 Collateral for the purpose of making such a
verification. The Collateral Agent shall have the absolute right to share any
information it gains from such inspection or verification with any Secured
Party.
(e) At any time after the Senior Payment in Full shall have
occurred, at its option, the Collateral Agent may discharge past due taxes,
assessments, charges, fees, Liens, security interests or other encumbrances at
any time levied or placed on the Article 9 Collateral and not permitted pursuant
to the Indenture and may pay for the maintenance and preservation of the Article
9 Collateral to the extent any Grantor fails to do so as required by the
Indenture or this Agreement, and each Grantor jointly and severally agrees to
reimburse the Collateral Agent on demand for any payment made or any expense
incurred by the Collateral Agent pursuant to the foregoing authorization;
provided that nothing in this paragraph shall be interpreted as excusing any
Grantor from the performance of, or imposing any obligation on the Collateral
Agent or any Secured Party to cure or perform, any covenants or other
15
promises of any Grantor with respect to taxes, assessments, charges, fees,
Liens, security interest or other encumbrances and maintenance as set forth
herein or in the Indenture.
(f) The Grantors, at their own expense, shall maintain or
cause to be maintained, with financially sound and reputable insurance
companies, insurance in such amounts and against such risks as are customary
among companies of established reputation engaged in the same or similar
businesses and operating in the same or similar locations, except to the extent
the failure to do so would not be materially likely to result in a Material
Adverse Change. Each Grantor irrevocably makes, constitutes and appoints the
Collateral Agent (and all officers, employees or agents designated by the
Collateral Agent) as such Grantor's true and lawful agent (and attorney-in-fact)
for the purpose, during the continuance of an Event of Default, of making,
settling and adjusting claims in respect of the Article 9 Collateral under
policies of insurance, endorsing the name of such Grantor on any check, draft,
instrument or other item of payment for the proceeds of such policies of
insurance and for making all determinations and decisions with respect thereto.
In the event that any Grantor at any time or times shall fail to obtain or
maintain any of the policies of insurance required hereby or to pay any premium
in whole or part relating thereto, the Collateral Agent may, without waiving or
releasing any obligation or liability of the Grantors hereunder or any Event of
Default, in its sole discretion, obtain and maintain such policies of insurance
and pay such premium and take any other actions with respect thereto as the
Collateral Agent deems advisable. All sums disbursed by the Collateral Agent in
connection with this paragraph or otherwise incurred in connection therewith,
including reasonable attorneys' fees, court costs, expenses and other charges
relating thereto, shall be payable, upon demand, by the Grantors to the
Collateral Agent and shall be additional Obligations secured hereby.
Notwithstanding the foregoing, until the Senior Payment in Full shall have
occurred, the Grantors' obligations under this Section 4.04(f) to maintain or
cause to maintain insurance shall be satisfied by complying with Section 4.04(f)
of the Master Guarantee and Collateral Agreement.
(g) Each Grantor shall maintain, in form and manner reasonably
satisfactory to the Collateral Agent (or, until the Senior Payment in Full shall
have occurred, the Credit Agent), records of its Chattel Paper and its books,
records and documents evidencing or pertaining thereto.
(h) If at any time after the Senior Payment in Full shall have
occurred, the Company comes into possession of any Pledged Collateral that was
previously delivered to the Credit Agent and is required to be delivered to the
Collateral Agent pursuant to the terms of any Noteholder Document, then the
Company shall promptly deliver such Pledged Collateral to the Collateral Agent.
(i) Each Grantor agrees to prepare and execute any and all
further documents, certificates, financing statements, agreements and
instruments, and take all such further actions, as may be reasonably requested
by the Collateral Agent in order to cause the security interests purported to be
created by the Security Documents or required to be created under the terms of
this Agreement to constitute valid security interests, perfected in accordance
with this Agreement.
SECTION 4.05. Other Actions. (a) In order to further ensure
the attachment, perfection and priority of, and the ability of the Collateral
Agent to enforce, the security interests created hereby, each Grantor agrees, in
each case at such Grantor's own expense, to take the following actions with
respect to the following Article 9 Collateral: if any Grantor shall at any time
hold or acquire any Instrument representing Indebtedness in excess of
$3,000,000, such Grantor shall forthwith endorse, assign and deliver the same to
the Collateral Agent, accompanied by such instruments of transfer or assignment
duly executed in blank as the Collateral Agent may from time to time reasonably
request.
16
(b) Until the Senior Payment in Full shall have occurred, the
Grantors' obligations under Section 4.05(a) shall be satisfied by complying with
Section 4.05 of the Master Guarantee and Collateral Agreement.
(c) The Company shall obtain, at its sole cost and expense, an
ALTA/ACSM Survey of the land and facilities comprising the Company's corporate
headquarters building, theater/bank building (Goodyear Hall), medical facility,
research and development center, test track, and such parcels of Akron "Other"
as the Collateral Agent may reasonably require ("Akron Other") in Akron, Ohio.
The Company shall promptly order such ALTA/ACSM Survey after First American and
the Collateral Agent have been apprised of the intended content and scope of
such ALTA/ACSM Survey and have approved thereof, such approval not to be
unreasonably withheld, delayed, or conditioned (the date on which the last such
approval shall be received by the Company is referred to herein as the "Survey
Approval Date"). The Company shall use its commercially reasonable efforts to
cause the delivery of the Survey to First American and the Collateral Agent
within four (4) months after the Survey Approval Date. After such delivery, the
Company shall promptly request that First American: (i) issue a "land same as
survey" endorsement to the Lender's Policy; and (ii) delete the general survey
exception from the Lender's Policy, substituting in lieu thereof an exception
that reads the Survey and recites such specific matters as the Survey discloses.
Subject to the foregoing sentence, the Company shall have no obligation to
request or obtain, and First American shall have no obligation to issue, any
additional endorsements to the Lender's Policy except for the Pre-Closing
Endorsements to the extent that they have not yet been issued, or take other
action with respect to matters revealed by such Survey, except as expressly
provided in the following paragraph.
If a discrepancy exists between the legal description for the
Company's corporate headquarters building, theater/bank building (Goodyear
Hall), medical facility, research and development center, test track, or Akron
Other as determined by the Survey and the legal description contained in the
Mortgage, the parties shall promptly amend, at the Company's sole cost and
expense, the legal description contained in the Mortgage to reflect the legal
description for the Company's corporate headquarters building, theater/bank
building (Goodyear Hall), medical facility, research and development center,
test track, or Akron Other as defined by the Survey. Such amendment shall occur
simultaneously with amendments to the legal description, at the Company's sole
cost and expense, for the Company's corporate headquarters building,
theater/bank building (Goodyear Hall), medical facility, research and
development center, test track, or Akron Other contained in the mortgages for
all then-extant lenders having a security interest in the Company's corporate
headquarters.
As used in this Section 4.05(c): "ALTA/ACSM Survey" shall mean
a survey made (i) in accordance with the current "Minimum Standard Detail
Requirements for ALTA/ACSM Land Title Surveys" jointly established and adopted
by American Land Title Association and American Congress on Surveying and
Mapping in 1999, and includes Items 1 through 13 of Table A thereof and (ii)
pursuant to the Accuracy Standards (as adopted by ALTA and ACSM and in effect on
the date of certification of an Urban Survey); "First American" shall mean First
American Title Insurance Company; "Lender's Policy" shall mean the lender's
title insurance policy issued by First American to the Trustee and the
Collateral Agent, as insureds, pursuant to Title Commitment Number
NCS-78634-T-CLE. "Pre-Closing Endorsements" shall mean the following
endorsements: Street Assessment, Doing Business, First Loss, Last Dollar,
Subdivision, Tax Parcel, Variable Rate, Usury, Revolving Credit, ALTA 9, Letter
of Credit. "Survey" shall mean an ALTA/ACSM ordered by the Company with content
approved by First American and the Collateral Agent.
SECTION 4.06. Covenants Regarding Patent, Trademark and
Copyright Collateral. (a) Each Other Collateral Grantor agrees that it will not
do or omit to do any act (and will exercise commercially reasonable efforts to
prevent its licensees from doing or omitting to do any act) whereby
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any Patent constituting Material Intellectual Property may become invalidated or
dedicated to the public, and agrees that it shall continue to mark any products
covered by such Patent with the relevant patent number consistent with good
business judgment to establish and preserve its rights under applicable patent
laws.
(b) Each Other Collateral Grantor (either itself or through
its licensees or its sublicensees) will, for each Trademark constituting
Material Intellectual Property, (i) maintain such Trademark in full force free
from any claim of abandonment or invalidity for non-use, (ii) maintain the
quality of products and services offered under such Trademark, (iii) display
such Trademark with notice of Federal or foreign registration consistent with
good business judgment to establish and preserve its rights under applicable law
and (iv) not knowingly use or knowingly permit the use of such Trademark in
violation of any third party rights.
(c) Each Other Collateral Grantor (either itself or through
its licensees or sublicensees) shall, for each work covered by a Copyright
constituting Material Intellectual Property, continue to publish, reproduce,
display, adopt and distribute the work with appropriate copyright notice
consistent with good business judgment to establish and preserve its rights
under applicable copyright laws.
(d) Each Other Collateral Grantor shall notify the Collateral
Agent promptly if it knows or has reason to know that any Patent, Trademark or
Copyright constituting Material Intellectual Property may become abandoned, lost
or dedicated to the public, or of any materially adverse determination or
development (including the institution of, or any such determination or
development in, any proceeding in the United States Patent and Trademark Office,
United States Copyright Office or any court or similar office of any country)
regarding such Other Collateral Grantor's ownership of any Patent, Trademark or
Copyright, its right to register the same, or its right to keep and maintain the
same; provided that such notification need not be given if such impairment of
such Intellectual Property is not material viewed against the Material
Intellectual Property as a whole.
(e) Each Other Collateral Grantor shall take all steps
consistent with good business judgment that are consistent with the practice in
any proceeding before the United States Patent and Trademark Office, United
States Copyright Office or any office or agency in any political subdivision of
the United States or in any other country or any political subdivision thereof,
to maintain and pursue each application relating to the Patents, Trademarks
and/or Copyrights constituting Material Intellectual Property (and to obtain the
relevant grant or registration) and to maintain each issued Patent and each
registration of the Trademarks and Copyrights constituting Material Intellectual
Property, including timely filings of applications for renewal, affidavits of
use, affidavits of incontestability and payment of maintenance fees, and, if
consistent with good business judgment, to initiate opposition, interference and
cancelation proceedings against third parties.
(f) Upon and during the continuance of an Event of Default,
each Grantor shall endeavor in good faith to obtain all requisite consents or
approvals by the licensor of each Copyright License, Patent License or Trademark
License to effect the assignment of all such Grantor's right, title and interest
thereunder to the Collateral Agent or its designee; provided, however, that
until the Senior Payment in Full shall have occurred, the Grantors' obligations
under this Section 4.06(f) shall be satisfied by complying with Section 4.06(f)
of the Master Guarantee and Collateral Agreement.
(g) The failure to comply with any of the foregoing covenants
in this Section 4.06 shall not be deemed a breach thereof for purposes of
Section 6.01 (Events of Default) of the Indenture unless such failure is willful
or material to the rights or interests of the Noteholders.
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SECTION 4.07. Lockbox System. (a) The Current Assets Grantors
shall establish, subject to the control of the Collateral Agent pursuant to the
New Control Agreements, a system of lockboxes and related Deposit Accounts (the
"Lockbox System"). Each Current Assets Grantor agrees that it shall have no
Deposit Accounts other than (a) Deposit Accounts in the Lockbox System, (b)
Excluded Operating Accounts and (c) Local Collection Accounts. Each Current
Assets Grantor further agrees (i) to execute and deliver, and to cause the
Deposit Account Institution at which any Deposit Account (other than an Excluded
Operating Account or a Local Collection Account) is maintained to promptly
execute and deliver a New Control Agreement as promptly as reasonably
practicable following (and in any event, no later than 60 days following) the
Closing Date, (ii) to notify and direct promptly each Account Debtor and every
other Person obligated to make payments on Accounts or in respect of any
Inventory to make all such payments directly to one or more Deposit Accounts in
the Lockbox System (or, in the case of Accounts or Inventory of the Company's
retail or Wingfoot divisions, Local Collection Accounts) or related lockboxes,
(iii) to use all reasonable efforts to cause each such Account Debtor and other
Person to make all payments with respect to Accounts and Inventory directly to
one or more Deposit Accounts in the Lockbox System (or, in the case of Accounts
or Inventory of the Company's retail or Wingfoot divisions, Local Collection
Accounts) or related lockboxes and (iv) promptly to deposit all payments
received by it on account of Accounts and Inventory, whether in the form of
cash, checks, notes, drafts, bills of exchange, money orders or otherwise, in
one or more Deposit Accounts in the Lockbox System (or, in the case of Accounts
or Inventory of the Company's retail or Wingfoot divisions, Local Collection
Accounts) or related lockboxes in the form in which received (but with any
endorsements of such Current Assets Grantor necessary for deposit or
collection). Effective upon notice to the Company after the occurrence and
during the continuance of an Event of Default at any time after the Senior
Payment in Full shall have occurred, the RBC Deposit Account and each Deposit
Account (other than Excluded Operating Accounts and Local Collection Accounts)
will, without further action on the part of any Current Assets Grantor or the
Collateral Agent, convert into a closed lockbox account under the sole dominion
and control of the Collateral Agent in which all funds are held subject to the
rights of the Collateral Agent hereunder. Without the prior written consent of
the Collateral Agent, no Current Assets Grantor shall, in a manner adverse to
the Secured Parties, change the general instructions given to Account Debtors in
respect of payments to be deposited in the Lockbox System. Effective upon the
occurrence of the Senior Payment in Full, each Current Assets Grantor
irrevocably authorizes the Collateral Agent, upon the occurrence of an Event of
Default, to deliver a Control Notice under each New Control Agreement. The
Collateral Agent agrees with each Current Assets Grantor that the Collateral
Agent shall not give any instructions pursuant to any New Control Agreement
terminating such New Control Agreement or the right of such Current Assets
Grantor to make withdrawals from any Deposit Account in the Lockbox System
unless an Event of Default shall have occurred and be continuing or, after
giving effect to any withdrawal, would occur. After the Senior Payment in Full
shall have occurred and be continuing, the Company shall ensure that the
aggregate amount contained in all Local Collection Accounts taken together shall
not at any time exceed the greater of (i) the last amount determined by the
Credit Agent prior to the Senior Payment in Full and (ii) $150,000,000.
(b) In the event that all of the US Facilities Obligations (as
defined in the Intercreditor Agreement) have been paid in full and any
commitment to extend credit that would constitute US Facilities Obligations
shall have been terminated and Designated Senior Obligations (as defined in the
Intercreditor Agreement) remain outstanding, each Current Assets Grantor agrees
to use commercially reasonable efforts to cause any lockbox agreements entered
into with the collateral agents on behalf of the holders of such Designated
Senior Obligations to be substantially in the form of the New Control
Agreements.
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SECTION 4.08. Insurance. The Company shall, on or promptly
after the Closing Date, cause the Collateral Agent to be named as loss payee on
all property insurance maintained in respect of the Collateral.
SECTION 4.09. Liens. The Company shall, as soon as practicable
after the Closing Date, and in any event within 45 days after the Closing Date,
deliver an Officer's Certificate to the Collateral Agent stating that the lien
searches in the counties specified in Schedule V have not revealed any Liens
(other than (i) Liens existing on the Closing Date and set forth on Schedule 4
to the Note Purchase Agreement, (ii) Permitted Collateral Liens (other than
those specified in Section (4) of the definition thereof) and (iii) Liens which
have been satisfied or discharged).
ARTICLE V
Other Pledges, Mortgage and Other Security Interests
SECTION 5.01. Summary of Certain Other Security Documents. In
addition to the security interests created under Articles III and IV the parties
acknowledge that:
(a) Certain Other Collateral Grantors are entering into the
Foreign Pledge Agreements with respect to the Foreign Subsidiaries listed in
Schedule III, and may in the future enter into additional Foreign Pledge
Agreements, under which they are pledging Equity Interests in Foreign
Subsidiaries owned by them to secure the Note Obligations and the Designated
Pari Passu Obligations, on an equal and ratable basis, and the Collateral Agent
Obligations.
(b) The Company is entering into the Mortgage under which it
is mortgaging the Company's corporate headquarters in Akron, Ohio and interests
in the corporate headquarters owned by it to secure the Note Obligations and the
Designated Pari Passu Obligations, on an equal and ratable basis, and the
Collateral Agent Obligations.
(c) Certain Current Assets Grantors that are organized under
the laws of Canada or one or more provinces thereof are entering into the
Canadian Security Agreements, under which they are creating security interests
in the Current Assets Collateral and the Canadian Intellectual Property
Collateral owned by them to secure the Note Obligations and the Designated Pari
Passu Obligations, on an equal and ratable basis, and the Collateral Agent
Obligations.
(d) The Master Guarantee and Collateral Agreement creates
security interests in the Collateral to secure the European Facilities Revolving
Obligations (as defined in the European Facilities Agreement) on an equal and
ratable basis with the Obligations (other than with respect to that portion of
the Collateral consisting of the Company's equity interests in Luxembourg
Finance which secures the European Facility Revolving Obligations on a priority
basis).
SECTION 5.02. Other Security Documents Subject to this
Agreement. (a) The parties to the Noteholder Documents shall observe the
following provisions: (i) the provisions of Section 6.03 (governing the
distribution of the proceeds realized from the exercise of remedies under the
Security Documents); (ii) the provisions of Article VIII (governing the manner
in which Acts of the Secured Parties are to be evidenced and the manner in which
the amounts of the Obligations at any time are to be determined); (iii) the
provisions of Articles IX and X (relating to the duties and responsibilities of
the Collateral Agent); and (iv) the provisions of Section 13.12 (providing for
releases of Collateral securing the Obligations).
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(b) The Mortgage shall contain a provision substantially to
the effect set forth below and satisfactory to the Collateral Agent and its
counsel:
"THIS AGREEMENT AND THE PLEDGES, SECURITY INTERESTS AND OTHER
LIENS AND CHARGES CREATED HEREBY ARE SUBJECT IN ALL RESPECTS TO THE PROVISIONS
OF THE COLLATERAL AGREEMENT DATED AS OF MARCH 12, 2004, AMONG THE GOODYEAR TIRE
& RUBBER COMPANY, THE SUBSIDIARIES OF THE GOODYEAR TIRE & RUBBER COMPANY
IDENTIFIED AS GRANTORS THEREIN, AND WILMINGTON TRUST COMPANY, AS COLLATERAL
AGENT, AND ANY PROVISION OF THIS AGREEMENT THAT IS INCONSISTENT WITH THE
PROVISIONS OF SUCH COLLATERAL AGREEMENT SHALL BE DEEMED FOR ALL PURPOSES TO HAVE
BEEN AMENDED TO CONFORM IN ALL RESPECTS TO SUCH PROVISIONS."
(c) In the event of any conflict or inconsistency between any
provision of this Agreement and any Other Security Documents, the provisions of
this Agreement shall govern, and the terms of any such Other Security Documents
shall be deemed for all purposes to have been amended to conform in all respects
to the provisions of this Agreement.
ARTICLE VI
Remedies
SECTION 6.01. Remedies Upon Default. Subject to Section 9.02
hereof, upon the occurrence and during the continuance of an Event of Default
and the receipt by the Collateral Agent of a written notice by (A) each of (x)
the Trustee (if there is an Event of Default under the Indenture) and (y) each
other Representative (if there is an Event of Default under the applicable
Designated Pari Passu Obligations Governing Document) or (B) holders of at least
25% in aggregate principal amount of the outstanding (x) Notes (if there is an
Event of Default under the Indenture) and (y) Designated Pari Passu Obligations
(to the extent that there is an Event of Default under the applicable Designated
Pari Passu Obligations Governing Document) instructing it to exercise remedies,
to the extent permitted by law (a) the Collateral Agent may demand that each
Grantor deliver each item of Collateral owned or held by it to the Collateral
Agent, and each Grantor agrees so to deliver all such Collateral, and (b) the
Collateral Agent shall have the right to take any of or all the following
actions at the same or different times with respect to any Collateral: (i) with
respect to any Collateral consisting of Intellectual Property, on demand, to
cause its security interest in such Collateral to become an assignment, transfer
and conveyance of any of or all such Collateral by the applicable Grantors to
the Collateral Agent, or to grant any license or sublicense, whether general,
special or otherwise, and whether on an exclusive or nonexclusive basis, with
respect to any such Collateral throughout the world on such terms and conditions
and in such manner as the Collateral Agent shall determine (other than in
violation of any then-existing licensing arrangements to the extent that waivers
cannot be obtained), and (ii) with or without legal process and with or without
prior notice or demand for performance, to take possession of the Collateral and
without liability for trespass to enter any premises where the Collateral may be
located for the purpose of taking possession of or removing the Collateral and,
generally, to exercise any and all rights afforded to a secured party under the
Uniform Commercial Code or other applicable law. Without limiting the generality
of the foregoing, each Grantor agrees that upon the occurrence and during the
continuance of an Event of Default, the Collateral Agent shall have the right,
subject to the mandatory requirements of applicable law, to sell or otherwise
dispose of all or any part of the Collateral at a public or private sale or at
any broker's board or on any securities exchange, for cash, upon credit or for
future delivery as the Collateral Agent shall deem appropriate. The Collateral
Agent shall be authorized at any such sale of securities (if it deems it
advisable to do so) to restrict the prospective bidders or purchasers to Persons
21
who will represent and agree that they are purchasing the Collateral for their
own account for investment and not with a view to the distribution or sale
thereof, and upon consummation of any such sale the Collateral Agent shall have
the right to assign, transfer and deliver to the purchaser or purchasers thereof
the Collateral so sold. Each such purchaser at any sale of Collateral shall (to
the extent permitted by law) hold the property sold absolutely, free from any
claim or right on the part of any Grantor, and each Grantor hereby waives (to
the extent permitted by law) all rights of redemption, stay and appraisal which
such Grantor now has or may at any time in the future have under any rule of law
or statute now existing or hereafter enacted.
In the case of any Collateral that constitutes Article 9
Collateral, the Collateral Agent shall give the applicable Grantors 10 days'
written notice (which each Grantor agrees is reasonable notice within the
meaning of Section 9-611 of the New York UCC or its equivalent in other
jurisdictions) of the Collateral Agent's intention to make any sale of such
Collateral. Such notice, in the case of a public sale, shall state the time and
place for such sale and, in the case of a sale at a broker's board or on a
securities exchange, shall state the board or exchange at which such sale is to
be made and the day on which the Collateral, or portion thereof, will first be
offered for sale at such board or exchange. Any such public sale shall be held
at such time or times within ordinary business hours and at such place or places
as the Collateral Agent may fix and state in the notice (if any) of such sale.
At any such sale, the Collateral, or portion thereof, to be sold may be sold in
one lot as an entirety or in separate parcels, as the Collateral Agent may (in
its sole and absolute discretion) determine. The Collateral Agent shall not be
obligated to make any sale of any Collateral if it shall determine not to do so,
regardless of the fact that notice of sale of such Collateral shall have been
given. The Collateral Agent may, without notice or publication, adjourn any
public or private sale or cause the same to be adjourned from time to time by
announcement at the time and place fixed for sale, and such sale may, without
further notice, be made at the time and place to which the same was so
adjourned. In case any sale of all or any part of the Collateral is made on
credit or for future delivery, the Collateral so sold may be retained by the
Collateral Agent until the sale price is paid by the purchaser or purchasers
thereof, but the Collateral Agent shall not incur any liability in case any such
purchaser or purchasers shall fail to take up and pay for the Collateral so sold
and, in case of any such failure, such Collateral may be sold again upon like
notice. At any public (or, to the extent permitted by law, private) sale made
pursuant to any Noteholder Document, any Secured Party may bid for or purchase,
free (to the extent permitted by law) from any right of redemption, stay,
valuation or appraisal on the part of any Grantor (all said rights being also
hereby waived and released to the extent permitted by law), the Collateral or
any part thereof offered for sale and may make payment on account thereof by
using any claim then due and payable to such Secured Party from any Grantor as a
credit against the purchase price, and such Secured Party may, upon compliance
with the terms of sale, hold, retain and dispose of such property without
further accountability to any Grantor therefor (to the extent permitted by law).
For purposes hereof, a written agreement to purchase any Collateral or portion
thereof shall be treated as a sale thereof; the Collateral Agent shall be free
to carry out such sale pursuant to such agreement and no Grantor shall be
entitled to the return of the Collateral or any portion thereof subject thereto,
notwithstanding the fact that after the Collateral Agent shall have entered into
such an agreement all Events of Default shall have been remedied and the
Obligations secured by the Collateral paid in full. As an alternative to
exercising the power of sale herein conferred upon it, the Collateral Agent may
proceed by a suit or suits at law or in equity to foreclose any Noteholder
Document and to sell the Collateral or any portion thereof pursuant to a
judgment or decree of a court or courts having competent jurisdiction or
pursuant to a proceeding by a court-appointed receiver. Any sale pursuant to the
provisions of this Section 6.01 shall be deemed to conform to the commercially
reasonable standards as provided in Section 9-610(b) of the New York UCC or its
equivalent in other jurisdictions.
SECTION 6.02. Exercise of Remedies under Other Security
Documents. The Collateral Agent shall also have the right to exercise remedies
provided for in each Noteholder Document upon the occurrence and during the
continuance of an Event of Default and the receipt by the Collateral Agent of a
22
written notice by (A) each of (x) the Trustee (if there is an Event of Default
under the Indenture) and (y) each Representative (if there is an Event of
Default under the applicable Designated Pari Passu Obligations Governing
Document) or (B) holders of at least 25% in aggregate principal amount of the
outstanding (x) Notes (if there is an Event of Default under the Indenture) and
(y) Designated Pari Passu Obligations (to the extent that there is an Event of
Default under the applicable Designated Pari Passu Obligations Governing
Document) instructing it to exercise remedies.
SECTION 6.03. Application of Proceeds. (a) Unless otherwise
required by applicable law, the Collateral Agent shall apply the proceeds of the
collection or sale of any Collateral securing any Obligations, including any
Collateral consisting of cash, as follows:
FIRST, to the payment of all fees, costs and expenses due to
or incurred by the Collateral Agent in connection with such collection
or sale or otherwise due to or incurred in connection with this any
Noteholder Document, the Intercreditor Agreement or any Designated Pari
Passu Obligations Governing Documents, or otherwise in connection with
any of such Obligations, including all court costs and the fees and
expenses of its agents and legal counsel, the repayment of all advances
made by the Collateral Agent hereunder or under the Indenture or under
any Designated Pari Passu Obligations Governing Documents on behalf of
any Grantor and any other fees, costs or expenses incurred in
connection with the exercise of any right or remedy hereunder or
otherwise in connection herewith or under any Noteholder Document, the
Intercreditor Agreement or any Designated Pari Passu Obligations
Governing Documents (in each case, insofar as they relate to such
Obligations) at the direction or for the benefit of holders of such
Obligations;
SECOND, to the payment of all other Obligations secured by
such Collateral on an equal and ratable basis to the extent and in the
manner provided in the Indenture and the Designated Pari Passu
Obligations Governing Documents; and
THIRD, to the applicable Grantors, their successors or
assigns, or as a court of competent jurisdiction may otherwise direct.
The Collateral Agent shall have absolute discretion as to the time of
application of any such proceeds, moneys or balances in accordance with this
Agreement. Upon any sale of Collateral by the Collateral Agent (including
pursuant to a power of sale granted by statute or under a judicial proceeding),
the receipt of the Collateral Agent or of the officer making the sale shall be a
sufficient discharge to the purchaser or purchasers of the Collateral so sold
and such purchaser or purchasers shall not be obligated to see to the
application of any part of the purchase money paid over to the Collateral Agent
or such officer or be answerable in any way for the misapplication thereof.
SECTION 6.04. Grant of License to Use Intellectual Property.
(a) Each Grantor hereby grants to the Collateral Agent, to the extent necessary
to enable the Collateral Agent to exercise rights and remedies under the
Noteholder Documents at such time as the Collateral Agent shall be lawfully
entitled to exercise such rights and remedies, an irrevocable, nonexclusive
license (exercisable without payment of royalty or other compensation to the
Grantors) to use, license or sublicense any Intellectual Property now owned or
hereafter acquired by such Grantor, and wherever the same may be located,
including in such license reasonable access to all media in which any of the
licensed items may be recorded or stored and to all computer software and
programs used for the compilation or printout thereof, to the extent and only to
the extent such license would not violate or result in a default under any
license or other agreement, whether express or implied, between the Grantor and
any Person other than a Wholly Owned Subsidiary as defined in the Indenture. The
rights of the Collateral Agent under such license may be exercised, at the
option of the Collateral Agent, solely upon the occurrence and during the
continuation of
23
an Event of Default; provided that any license, sublicense or other transaction
entered into by the Collateral Agent in accordance herewith shall be binding
upon the Grantors notwithstanding any subsequent cure of any Event of Default.
(b) Notwithstanding any other provision contained in this
Agreement, any security interest granted hereunder in any Collateral consisting
of Intellectual Property to secure the Obligations shall be subject to the
license granted under the preceding paragraph (a), as such license may be
exercised for the benefit of the Secured Parties, and any sale or transfer of
Collateral consisting of Intellectual Property upon any exercise of remedies
under this Agreement shall be made expressly subject to such license.
SECTION 6.05. Securities Act. In view of the position of the
Grantors in relation to the Pledged Collateral, or because of other current or
future circumstances, a question may arise under the Securities Act of 1933, as
now or hereafter in effect, or any similar statute hereafter enacted analogous
in purpose or effect (such Act and any such similar statute as from time to time
in effect being called the "Federal Securities Laws") with respect to any
disposition of the Pledged Collateral permitted hereunder. Each Grantor
understands that compliance with the Federal Securities Laws might very strictly
limit the course of conduct of the Collateral Agent if the Collateral Agent were
to attempt to dispose of all or any part of the Pledged Collateral, and might
also limit the extent to which or the manner in which any subsequent transferee
of any Pledged Collateral could dispose of the same. Similarly, there may be
other legal restrictions or limitations affecting the Collateral Agent in any
attempt to dispose of all or part of the Pledged Collateral under applicable
Blue Sky or other state securities laws or similar laws analogous in purpose or
effect. Each Grantor recognizes that in light of such restrictions and
limitations the Collateral Agent may, with respect to any sale of the Pledged
Collateral, limit the purchasers to those who will agree, among other things, to
acquire such Pledged Collateral for their own account, for investment, and not
with a view to the distribution or resale thereof. Each Grantor acknowledges and
agrees that in light of such restrictions and limitations, the Collateral Agent,
in its sole and absolute discretion (a) may proceed to make such a sale whether
or not a registration statement for the purpose of registering such Pledged
Collateral or part thereof shall have been filed under the Federal Securities
Laws and (b) may approach and negotiate with a single potential purchaser to
effect such sale. Each Grantor acknowledges and agrees that any such sale might
result in prices and other terms less favorable than if such sale were a public
sale without such restrictions. In the event of any such sale, the Collateral
Agent shall incur no responsibility or liability for selling all or any part of
the Pledged Collateral at a price that the Collateral Agent, in its sole and
absolute discretion, may in good faith deem reasonable under the circumstances,
notwithstanding the possibility that a substantially higher price might have
been realized if the sale were deferred until after registration as aforesaid or
if more than a single purchaser were approached. The provisions of this Section
will apply notwithstanding the existence of a public or private market upon
which the quotations or sales prices may exceed substantially the price at which
the Collateral Agent sells.
SECTION 6.06. Registration. Each Grantor agrees that, upon the
occurrence and during the continuance of an Event of Default, if for any reason
the Collateral Agent desires to sell any of the Pledged Collateral at a public
sale, it will, at any time and from time to time, upon the written request of
the Collateral Agent, use its best efforts to take or to cause the issuer of
such Pledged Collateral to take such action and prepare, distribute and/or file
such documents, as are required or advisable in the reasonable opinion of
counsel for the Collateral Agent to permit the public sale of such Pledged
Collateral under applicable law. Each Grantor further agrees to indemnify,
defend and hold harmless the Collateral Agent, each other Secured Party, any
underwriter and their respective officers, directors, affiliates and controlling
persons from and against all loss, liability, expenses, costs of counsel
(including, without limitation, reasonable fees and expenses of the Collateral
Agent's legal counsel and agents), and claims (including the costs of
investigation) that they may incur insofar as such loss, liability, expense or
claim arises out of or is based upon any alleged untrue statement of a material
fact contained in any prospectus
24
(or any amendment or supplement thereto) or in any notification or offering
circular relating to the offering for sale of any Pledged Collateral, or arises
out of or is based upon any alleged omission to state a material fact required
to be stated therein or necessary to make the statements in any thereof not
misleading, except insofar as the same may have been caused by any untrue
statement or omission based upon information furnished in writing to such
Grantor or the issuer of such Pledged Collateral by the Collateral Agent or any
other Secured Party expressly for use therein. Each Grantor further agrees, upon
such written request referred to above, to use its best efforts to qualify, file
or register, or cause the issuer of such Pledged Collateral to qualify, file or
register, any of the Pledged Collateral under the Blue Sky or other securities
laws of such jurisdictions as may be requested by the Collateral Agent and keep
effective, or cause to be kept effective, all such qualifications, filings or
registrations. Each Grantor will bear all costs and expenses of carrying out its
obligations under this Section. Each Grantor acknowledges that there is no
adequate remedy at law for failure by it to comply with the provisions of this
Section and that such failure would not be adequately compensable in damages,
and therefore agrees that its agreements contained in this Section may be
specifically enforced.
ARTICLE VII
Indemnity, Subrogation and Subordination
SECTION 7.01. Indemnity and Subrogation. In addition to all
such rights of indemnity and subrogation as the Grantors may have under
applicable law (but subject to Section 7.03), the Company agrees that in the
event any assets of any Grantor shall be sold pursuant to any Noteholder
Document to satisfy in whole or in part an Obligation of the Company, the
Company shall indemnify such Grantor in an amount equal to the greater of the
book value or the fair market value of the assets so sold.
SECTION 7.02. Contribution and Subrogation. Each Grantor other
than the Company (a "Contributing Party") agrees (subject to Section 7.03) that,
in the event assets of any other Grantor (other than the Company) shall be sold
pursuant to any Security Document to satisfy Obligations and such other Grantor
(the "Claiming Party") shall not have been fully indemnified by the Company as
provided in Section 7.01, the Contributing Party shall indemnify the Claiming
Party in an amount equal to the greater of the book value or the fair market
value of such assets, multiplied by a fraction of which the numerator shall be
the net worth of the Contributing Party and the denominator shall be the
aggregate net worth of all the Grantors, other than the Company, that have
granted Liens to secure the Obligations. For the purposes of the previous
sentence, the net worth of each Grantor shall be determined on the Effective
Date (or, in the case of any Grantor becoming a Grantor after the date hereof,
the date on which such Grantor shall have become a Grantor). Any Contributing
Party making any payment to a Claiming Party pursuant to this Section shall be
subrogated to the rights of such Claiming Party under Section 7.01 to the extent
of such payment.
SECTION 7.03. Subordination. (a) Notwithstanding any provision
of this Agreement to the contrary, all rights of the Grantors under Sections
7.01 and 7.02 and all other rights of indemnity, contribution or subrogation
under applicable law or otherwise shall be fully subordinated to the payment in
full in cash of the Obligations, and no Grantor shall seek to enforce any of
such rights until the Obligations have been paid in full. No failure on the part
of any Grantor to make the payments required by Sections 7.01 and 7.02 (or any
other payments required under applicable law or otherwise) shall in any respect
limit the obligations and liabilities of any Grantor with respect to its
obligations hereunder, and each Grantor shall remain liable for the full amount
of the obligations of such Grantor hereunder.
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(b) To the fullest extent permitted under law, each Grantor
hereby agrees that all Indebtedness (as defined in the Indenture) and other
monetary obligations owed by it to any other Grantor or any other Subsidiary
shall be fully subordinated to the payment in full in cash of the Obligations.
ARTICLE VIII
Acts of Secured Parties;
Amounts of Obligations
SECTION 8.01. Acts of Secured Parties. Any request, demand,
authorization, direction, notice, consent, waiver or other action permitted or
required by this Agreement to be given or taken by any Secured Party (other than
the Collateral Agent) may be, and at the request of the Collateral Agent shall
be, embodied in and evidenced by one or more instruments reasonably satisfactory
in form and substance to the Collateral Agent and signed by such Secured Party,
acting individually or on behalf of the applicable Secured Parties, as the case
may be, and, except as otherwise expressly provided in any such instrument, any
such action shall become effective when such instrument or instruments shall
have been delivered to the Collateral Agent as provided herein. The instrument
or instruments evidencing any action (and the action embodied therein and
evidenced thereby) are sometimes referred to herein as an "Act" of the persons
signing such instrument or instruments. All Acts hereunder on the part of (i)
any holders of Note Obligations (other than the Collateral Agent) shall be taken
on their behalf by the Trustee and (ii) any holder of Designated Pari Passu
Obligations (other than the Collateral Agent) shall be taken on their behalf by
the applicable Representative. The Collateral Agent shall be entitled to rely
absolutely upon an Act of the Trustee or Representative if such Act purports to
be taken by or on behalf of the holders of Note Obligations or Designated Pari
Passu Obligations, as applicable (in each case, other than the Collateral
Agent), and nothing in this Section or elsewhere in this Agreement shall be
construed to require such Trustee or any Representative of the holders of
Designated Pari Passu Obligations, as applicable, to demonstrate that it has
been authorized by the holders of Note Obligations or Designated Pari Passu
Obligations, as applicable (in each case, other than the Collateral Agent)
thereunder to take any action that it purports to be taking, the Collateral
Agent being entitled to rely conclusively without any independent investigation
whatsoever, and being fully protected in so relying, on any Act of such Trustee
or Representative.
SECTION 8.02. Determination of Amounts of Obligations and
Existence of Events of Default; Acceleration. Whenever the Collateral Agent is
required to determine the existence or amount of any of the Obligations or the
existence of any Event of Default for any purposes of this Agreement, it shall
request written certification of such existence or amount from the Trustee or
the Representatives, as the case may be, and shall be entitled to make such
determination, and to rely thereon, on the basis of such certification alone;
provided, however, that if, notwithstanding the request of the Collateral Agent,
the Trustee or the Representatives, as the case may be, shall fail or refuse
reasonably promptly to certify as to the existence or amount of any Obligation
or the existence of any Event of Default, the Collateral Agent shall be entitled
to determine such existence or amount by such method as the Collateral Agent
may, in the exercise of its good faith judgment, determine, including by
reliance upon a certificate of the Company. The Collateral Agent may rely
conclusively, and shall be fully protected in so relying, on any determination
made by it in accordance with the provisions of the preceding sentence (or as
otherwise directed by a court of competent jurisdiction) and shall have no
liability to the Company, any other Grantor, any other Secured Party or any
other person as a result of such determination.
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ARTICLE IX
Duties of Collateral Agent
SECTION 9.01. Notices to Trustee and Representatives. The
Collateral Agent shall promptly notify the Trustee and the Representatives of
any Designated Pari Passu Obligations in the event it shall receive (a) any
notice of an Event of Default under the Indenture or (b) any instructions given
by the Trustee or any Representative to commence the exercise of remedies under
Article VI.
SECTION 9.02. Actions Under this Agreement. (a) The Collateral
Agent shall not be obligated to take any action under any Noteholder Document
except for the performance of such duties as are specifically set forth herein
and therein. Subject to the provisions of Article X of this Agreement and to the
succeeding provisions of this Section, the Collateral Agent shall take such
actions, and only such actions, under the Noteholder Documents with respect to
any Collateral as are requested by (A) each of (x) the Trustee (if there is an
Event of Default under the Indenture) and (y) each Representative (if there is
an Event of Default under the applicable Designated Pari Passu Obligations
Governing Document) or (B) holders of at least 25% in aggregate principal amount
of the outstanding (x) Notes (if there is an Event of Default under the
Indenture) and (y) Designated Pari Passu Obligations (to the extent that there
is an Event of Default under the applicable Designated Pari Passu Obligations
Governing Document), and as are not inconsistent with or contrary to the
provisions of any Noteholder Document or any Designated Pari Passu Obligations
Governing Document, as well as ministerial and/or administrative actions
required or permitted by any Noteholder Document. The Trustee and the
Representatives of the holders of Designated Pari Passu Obligations shall have
the right to initiate the exercise of remedies with respect to the Collateral
and shall jointly control the manner of the exercise of such remedies.
Therefore, in the event the Trustee or any Representative of the holders of
Designated Pari Passu Obligations notifies the Collateral Agent and the Trustee
and/or the other Representatives of the holders of Designated Pari Passu
Obligations, as the case may be, of its desire to commence the exercise of
remedies and/or to foreclose on specified Collateral, the Trustee and the
Representatives of the holders of Designated Pari Passu Obligations shall
promptly confer to determine the manner in which the Collateral Agent should
proceed. The Trustee and the Representatives of the holders of Designated Pari
Passu Obligations, acting in good faith, shall use their best efforts to reach
agreement on such matters so that one or more remedies (which shall include
foreclosure on such Collateral if requested in such notification) will be
exercised reasonably promptly after such notification.
In connection with the foregoing, none of the Trustee or the
Representatives of the Designated Pari Passu Obligations will give instructions
to the Collateral Agent with the intent of preventing, hindering or delaying the
exercise of any remedies requested by the Trustee or any Representative of the
holders of Designated Pari Passu Obligations.
ARTICLE X
Concerning the Collateral Agent
SECTION 10.01. Limitations on Responsibility of Collateral
Agent. The Collateral Agent shall not be responsible in any manner whatsoever
for the correctness of any recitals, statements, representations or warranties
contained in any Noteholder Document. The Collateral Agent makes no
representation as to the value or condition of the Collateral or any part
thereof, as to the title of any Grantor to the Collateral, as to the security
afforded by any Noteholder Document, as to the validity, execution,
enforceability, legality or sufficiency of any Noteholder Document or any other
document or instrument referred to or provided for herein, or as to the
perfection of any security interests granted
27
pursuant to any of the foregoing documents or instruments and the Collateral
Agent shall incur no liability or responsibility in respect of any such matters.
The Collateral Agent shall not be responsible for insuring the Collateral, for
the payment of taxes, charges, assessments or Liens upon the Collateral or
otherwise for the maintenance of the Collateral, except as provided in the
immediately following sentence when the Collateral Agent has possession or
control of the Collateral. Except as otherwise provided herein, the Collateral
Agent shall have no duty to the Grantors or to the Secured Parties as to any
Collateral in its possession or control or in the possession or control of any
agent or nominee of the Collateral Agent or any income thereon or as to the
preservation of rights against prior parties or any other rights pertaining
thereto, except the duty to accord such Collateral the same care that it
normally accords to its own assets and the duty to account for moneys received
by it. The Collateral Agent shall not be required to ascertain or inquire as to
the performance by any Grantor of any of the covenants or agreements contained
herein or in any other agreement. Neither the Collateral Agent nor any officer,
agent or representative thereof shall be liable for any action taken or omitted
to be taken by any such person in connection with any Noteholder Document or the
Intercreditor Agreement except for such person's own gross negligence or willful
misconduct (it being understood that any action taken in accordance with the
terms of any Noteholder Document or the Intercreditor Agreement by the
Collateral Agent or any such officer, agent or representative at the direction
or instruction of the Trustee or the Representatives or the holders of at least
25% of the aggregate principal amount of (x) the Notes and (y) any Designated
Pari Passu Obligations in accordance with the terms of this Agreement (or not
taken, in the absence of any such directions or instructions) shall not
constitute gross negligence or willful misconduct). Neither the Collateral Agent
nor any officer, agent or representative thereof shall be liable for any action
taken by any such person in accordance with any notice given by the Trustee and
the Representatives or the holders of at least 25% in aggregate principal amount
of the (x) Notes and (y) any Designated Pari Passu Obligations, even if, at the
time such action is taken by any such Person, the Trustee and the
Representatives or holders of at least 25% in aggregate principal amount of the
(x) Notes and any (y) Designated Pari Passu Obligations, which gave the notice
to take such action shall no longer be the Trustee and the Representatives or
the holders of at least 25% in aggregate principal amount of the (x) Notes and
(y) any Designated Pari Passu Obligations. The Collateral Agent may execute any
of the powers granted under this Agreement and perform any duty hereunder either
directly or by or through agents, accountants, appraisers, attorneys-in-fact or
other experts.
SECTION 10.02. Reliance by Collateral Agent; Indemnity Against
Liabilities, etc. (a) Whenever in the performance of its duties under any
Noteholder Document the Collateral Agent shall deem it necessary or desirable
that a matter be proved or established with respect to any Grantor or any other
person in connection with the taking, suffering or omitting of any action
hereunder by the Collateral Agent, such matter may be conclusively deemed to be
proved or established by a certificate executed by an officer of such Person
which is believed by the Collateral Agent to be genuine and to have been signed
or sent by the proper Person or a written opinion from legal counsel acceptable
to the Collateral Agent, and the Collateral Agent shall have no liability with
respect to any action taken, not taken, suffered or omitted in reliance thereon.
(b) The Collateral Agent may consult with counsel and shall
not incur any liability in taking or not taking any action under any Noteholder
Document in good faith in accordance with any advice of such counsel. The
Collateral Agent shall have the right but not the obligation at any time to seek
instructions concerning the administration of any Noteholder Document, the
duties created hereunder or the Collateral from the Trustee or any
Representative or any court of competent jurisdiction.
(c) The Collateral Agent shall not incur any liability in
relying upon any resolution, statement, certificate, instrument, opinion,
report, notice, request, consent, order or other paper or document which it in
good faith believes to be genuine and to have been signed or presented by the
proper party. The Collateral Agent may conclusively rely, as to the truth of the
statements and the
28
correctness of the opinions expressed therein, upon any certificate or opinions
that are believed by the Collateral Agent to be genuine and signed or furnished
by the proper Person furnished to the Collateral Agent in connection with any
Noteholder Document.
(d) The Collateral Agent shall not be deemed to have actual,
constructive, direct or indirect notice or knowledge of the occurrence of any
Event of Default unless and until the Collateral Agent shall have received
written notice thereof from the Trustee or a Representative, as the case may be.
The Collateral Agent shall have no obligation whatsoever either prior to or
after receiving such a notice which is believed by the Collateral Agent to be
genuine and to have been signed or sent by the proper Person to inquire whether
an Event of Default has, in fact, occurred and shall be entitled to rely
conclusively, and shall be fully protected in so relying, on any such notice so
furnished to it.
(e) If the Collateral Agent has been requested to take any
specific action by the Trustee or any Representative pursuant to any provision
of any Noteholder Document, the Collateral Agent shall not be under any
obligation to exercise any of the rights or powers vested in it by such
Noteholder Document or expend any funds in the manner so requested unless it
shall have been provided indemnity by the Secured Parties on whose behalf such
request shall have been made reasonably satisfactory to it against the costs,
expenses and liabilities which may be incurred by it in compliance with such
request or direction.
(f) In the event there is any disagreement between the parties
to any Noteholder Document resulting in any claims being made in connection with
or otherwise giving rise to any dispute relating to the Collateral held by the
Collateral Agent, and the terms of the Noteholder Documents do not unambiguously
mandate the action the Collateral Agent is to take or not to take in connection
therewith under the circumstances then existing, or the Collateral Agent is in
doubt as to what action it is required to take or not to take, it shall be
entitled to refrain from taking any action until directed otherwise in writing
by (i) a request signed by or on behalf of the holders of at least 25% in
aggregate principal amount of the outstanding Notes and Designated Pari Passu
Obligations, taken together (or, if conflicting instructions are received from
different holders of at least such amount, then the holders of a greater
percentage of the aggregate principal amount of the outstanding Notes and
Designated Pari Passu Obligations, taken together) or (ii) order of a court of
competent jurisdiction.
(g) No direction given to the Collateral Agent by any party
which imposes, purports to impose or might reasonably be expected to impose upon
the Collateral Agent any obligation or liability not set for in or arising under
the Indenture or any Noteholder Document accepted by the Collateral Agent, or
any amendment, supplement or other modification to the Indenture or any other
Noteholder Document adverse to the rights and obligations of the Collateral
Agent, shall be binding upon the Collateral Agent unless the Collateral Agent
elects, at its sole option, to accept such direction or any such amendment,
supplement or modification.
(h) Without prejudice to the provisions of this Article X, the
Trustee hereby irrevocably appoints and authorizes the Collateral Agent (and any
successor acting as Collateral Agent) to act as the person holding the power of
attorney (in such capacity, the "fonde de pouvoir") of the Trustee as
contemplated under Article 2692 of the Civil Code of Quebec, and to enter into,
to take and to hold on their behalf, and for their benefit, any hypothec, and to
exercise such powers and duties which are conferred upon the fonde de pouvoir
under any hypothec. Moreover, without prejudice to such appointment and
authorization to act as the person holding the power of attorney as aforesaid,
the Trustee hereby irrevocably appoints and authorizes the Collateral Agent (and
any successor acting as Collateral Agent) (in such capacity, the "Custodian") to
act as agent and custodian for and on behalf of the Trustee to hold and to be
the sole registered holder of any debenture which may be issued under any
hypothec, the whole notwithstanding Section 32 of the Act respecting the special
powers of legal persons (Quebec) or
29
any other applicable law. In this respect, (i) the Custodian shall keep a record
indicating the names and addresses of, and the pro rata portion of the
obligations and indebtedness secured by any pledge of any such debenture and
owing to the Trustee (all of which information shall be certified in writing to
the Custodian by the Trustee upon request of the Custodian, and the Custodian
shall be fully protected in conclusively relying thereon), and (ii) the Trustee
will be entitled to the benefits of any charged property covered by any hypothec
and will participate in the proceeds of realization of any such charged
property, the whole in accordance with the terms hereof.
(i) Each of the fonde de pouvoir and the Custodian shall (a)
have the sole and exclusive right and authority to exercise, except as may be
otherwise specifically restricted by the terms hereof, all rights and remedies
given to fonde de pouvoir and the Custodian (as applicable) with respect to the
charged property under any hypothec, any debenture or pledge thereof relating to
any hypothec, applicable laws or otherwise, (b) benefit from and be subject to
all provisions hereof with respect to the Collateral Agent mutatis mutandis,
including, without limitation, all such provisions with respect to the liability
or responsibility to and indemnification by the Trustee, and (c) be entitled to
delegate from time to time any of its powers or duties under any hypothec, any
debenture or pledge thereof relating to any hypothec, applicable laws or
otherwise and on such terms and conditions as it may determine from time to
time. Any person who becomes a Trustee shall be deemed to have consented to and
confirmed: (y) the fonde de pouvoir as the person holding the power of attorney
as aforesaid and to have ratified, as of the date it becomes a Trustee, all
actions taken by the fonde de pouvoir in such capacity, (z) the Custodian as the
agent and custodian as aforesaid and to have ratified, as of the date it becomes
a Trustee, all actions taken by the Custodian in such capacity.
SECTION 10.03. Appointment, Resignation and Removal of the
Collateral Agent. The Collateral Agent hereby accepts its appointment as the
Collateral Agent pursuant to the Indenture and agrees to serve as the Collateral
Agent until the Collateral Agent is removed or resigns. The Collateral Agent may
at any time, by giving 30 days' prior written notice to the Company, the Trustee
and the Representatives of the holders of the Designated Pari Passu Obligations,
resign and be discharged from the responsibilities created under any Noteholder
Document, such resignation to become effective upon the appointment of a
successor by the Trustee with, so long as no Event of Default has occurred and
is continuing, the consent of the Company (such consent not to be unreasonably
withheld) and the acceptance of such appointment by such successor. If no
successor shall be appointed and approved within 30 days after the date of any
such resignation, the Collateral Agent may apply to any court of competent
jurisdiction to appoint a successor to act until a successor shall have been
appointed as above provided or may, on behalf of the Secured Parties, appoint a
successor Collateral Agent which shall be a bank with an office in New York, New
York having a combined capital and surplus of at least $50,000,000.
SECTION 10.04. Expenses and Indemnification. By accepting the
benefits of this Agreement, each of the Noteholders and the holders of
Designated Pari Passu Obligations severally agrees (i) to pay and reimburse the
Collateral Agent, on demand, in the amount of its pro rata share from time to
time (based on the principal amount of the Notes and Designated Pari Passu
Obligations, of such Secured Party and the other applicable Secured Parties), of
any fees and expenses referred to in the Intercreditor Agreement or any
Noteholder Document securing Obligations owed to such Secured Parties and/or any
other fees due to and expenses incurred by the Collateral Agent in connection
with the performance of its duties hereunder, the administration of any Security
Documents and the enforcement and protection of the rights of the Collateral
Agent and the Secured Parties which shall not have been paid or reimbursed by
the Company or any other Grantor or paid from the proceeds of Collateral as
provided herein and (ii) to indemnify and hold harmless the Collateral Agent and
its Affiliates and their respective directors, officers, employees, agents and
attorneys (each, an "Indemnified Party"), on demand, in the amount of such pro
rata share, from and against any and all liabilities, taxes, obligations,
losses, damages,
30
penalties, actions, judgments, suits, costs, expenses or disbursements referred
to in this Agreement and/or incurred by the Collateral Agent in connection with
the execution, delivery, performance, preparation and administration of the
Intercreditor Agreement or any Noteholder Documents or the enforcement and
protection of the rights of the Secured Parties, to the extent the same shall
not have been paid or reimbursed by the Company or any other Grantor or paid
from the proceeds of Collateral as provided herein; provided, in each case, that
no Secured Party shall be liable to any Indemnified Party for any portion of
such expenses, liabilities, taxes, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from the
gross negligence or willful misconduct of such Person as determined by a court
of competent jurisdiction.
ARTICLE XI
Designated Pari Passu Obligations
SECTION 11.01. Designation. The Company may from time to time,
subject to any limitations contained in any existing Designated Pari Passu
Obligations Governing Documents and the Indenture, designate additional
obligations of the Company or any of its Subsidiaries (the "Designated Pari
Passu Obligations") that are, or are to be, secured, on an equal and ratable
basis with the Note Obligations, by Liens on any Collateral by delivering to the
Collateral Agent, the Trustee and each Representative of holders of Designated
Pari Passu Obligations a notice:
(i) describing the obligations being designated as Designated
Pari Passu Obligations, and including a statement of the maximum
aggregate outstanding principal amount of such obligations;
(ii) listing the Designated Pari Passu Obligations Governing
Documents under which such Designated Pari Passu Obligations are issued
or incurred, and attaching copies of such Designated Pari Passu
Obligations Governing Documents;
(iii) appointing the Collateral Agent as collateral agent with
respect to such Designated Pari Passu Obligations, and identifying any
Representative of the holders of such Designated Pari Passu
Obligations;
(iv) certifying that the incurrence of such Designated Pari
Passu Obligations, the creation of the Liens securing such Designated
Pari Passu Obligations and the designation of such Designated Pari
Passu Obligations as Designated Pari Passu Obligations hereunder do not
violate or result in the Indenture or any other Designated Pari Passu
Obligations Governing Documents;
(v) certifying that the Designated Pari Passu Obligations
Governing Documents governing such Designated Pari Passu Obligations
contain provisions under which the related Designated Pari Passu
Obligations Secured Parties agree, or are deemed to agree, to be bound
by the provisions of this Agreement; and
(vi) attaching a fully executed Accession Agreement under
which the Representative of the holders of the Designated Pari Passu
Obligations shall become a party this Agreement and appoint the
Collateral Agent as collateral agent with respect to such Designated
Pari Passu Obligations.
Upon the delivery of such notice and the related attachments
as provided above, the obligations designated in such notice shall become
Designated Pari Passu Obligations for all purposes of
31
this Agreement. Notwithstanding any other provision contained in this Section or
elsewhere in this Agreement, no obligation shall constitute a Designated Pari
Passu Obligation if the incurrence of such obligation, the creation of the Liens
securing such obligation or the designation of such obligation as a Designated
Pari Passu Obligation hereunder would violate or result in a default under any
provision of the Indenture or any existing Designated Pari Passu Obligations
Governing Document.
ARTICLE XII
Subordination of Intercompany Indebtedness
SECTION 12.01. Subordination. To the fullest extent permitted
under law, the Company and each other Grantor hereby agrees that all
Intercompany Indebtedness owed to it by any Intercompany Obligor is hereby
expressly subordinated, to the extent and in the manner set forth in this
Article XII, to the payment in full in cash of all Obligations of such
Intercompany Obligor.
SECTION 12.02. Dissolution or Insolvency. Upon any
dissolution, winding up, liquidation or reorganization of any Intercompany
Obligor, whether in bankruptcy, insolvency, reorganization, arrangement or
receivership proceedings or otherwise, or upon any assignment for the benefit of
creditors or any other marshalling of the assets and liabilities of any
Intercompany Obligor, or otherwise:
(a) the applicable Secured Parties shall, as between such
Secured Parties and the Company or any other Grantor, first be entitled to
receive payment in full in cash of the Obligations of such Intercompany Obligor
in accordance with the terms of such Obligations before the Company or such
Grantor shall be entitled to receive any payment on account of the Intercompany
Indebtedness of such Intercompany Obligor, whether as principal, interest or
otherwise; and
(b) any payment by, or distribution of the assets of, such
Intercompany Obligor of any kind or character, whether in cash, property or
securities, to which the Company or any other Grantor would be entitled except
for the provisions of clause (a) above shall, upon receipt by the Company or
such Grantor, be held in trust (or in a compte de sequestre, if applicable) for
the applicable Secured Parties and promptly paid or delivered directly to the
Collateral Agent for the benefit of such Secured Parties to the extent necessary
to make payment in full in cash of all such Obligations remaining unpaid, after
giving effect to any concurrent payment or distribution to such Secured Parties
in respect of such Obligations.
SECTION 12.03. Subrogation. Subject to (and only upon) the
prior payment in full in cash of all the Obligations of any Intercompany
Obligor, the Company or any other Grantor holding Intercompany Indebtedness of
such Intercompany Obligor shall be subrogated to the rights of the applicable
Secured Parties to receive payments or distributions in cash, property or
securities applicable to such Obligations until all amounts owing on the
Intercompany Indebtedness of such Intercompany Obligor shall be paid in full,
and as between and among such Intercompany Obligor, its creditors (other than
its Secured Parties) and the Company or any other Grantor holding Intercompany
Indebtedness of such Intercompany Obligor, no such payment or distribution made
to the Secured Parties by virtue of this Agreement that otherwise would have
been made to the Company or any other Grantor in respect of such Intercompany
Indebtedness shall be deemed to be a payment by such Intercompany Obligor on
account of such Intercompany Indebtedness.
SECTION 12.04. Other Creditors. Nothing contained in this
Article is intended to or shall impair, as between and among any Intercompany
Obligor, its creditors (other than the Secured
32
Parties) and the Company or any other Grantor holding Intercompany Indebtedness
of such Intercompany Obligor, the obligations of such Intercompany Obligor to
pay its Intercompany Indebtedness as and when the same shall become due and
payable in accordance with the terms thereof, or affect the relative rights of
the Company or any other Grantor holding Intercompany Indebtedness of such
Intercompany Obligor and the creditors of such Intercompany Obligor (other than
the Secured Parties).
SECTION 12.05. No Waiver. No right of any Secured Party to
enforce this Article shall at any time or in any way be prejudiced or impaired
by any act or failure to act on the part of any of the Collateral Agent, the
other Secured Parties, or any Intercompany Obligor, or by any noncompliance by
any Intercompany Obligor with the terms, provisions and covenants contained in
any Noteholder Document or any Designated Pari Passu Obligations Governing
Document, and the Secured Parties are hereby expressly authorized to extend,
renew, increase, decrease, modify or amend the terms of the Obligations or any
security therefor, and to release, sell or exchange any such security and
otherwise deal freely with any Intercompany Obligor, all without notice to or
consent of the Company or any other Grantor and without affecting the
liabilities and obligations of the parties hereto.
SECTION 12.06. Obligations Hereunder Not Affected. (a) All
rights and interests of the Secured Parties under this Article, and all
agreements and obligations of the Company and each other Grantor under this
Article, shall remain in full force and effect irrespective of:
(i) any lack of validity or enforceability any Noteholder
Document or any Designated Pari Passu Obligations Governing Document;
(ii) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Obligations, or any other
amendment or waiver of or consent to departure from any Noteholder
Document or any Designated Pari Passu Obligations Governing Document;
(iii) any exchange, release or nonperfection of any security
interest in any Collateral, in respect of all or any of the
Obligations; or
(iv) any other circumstance that might otherwise constitute a
defense available to, or a discharge of, any Intercompany Obligor in
respect of Obligations or of the Company or any Grantor in respect of
the agreements contained in this Article.
(b) The agreements contained in this Article shall continue to
be effective or be reinstated, as the case may be, if at any time any payment of
the Obligations or any part thereof is rescinded or must otherwise be returned
by any Secured Party upon the insolvency, bankruptcy or reorganization of any
Intercompany Obligor or otherwise, all as though such payment had not been made.
(c) The Company and each Grantor hereby agree that the Secured
Parties may, without affecting or impairing any of the obligations of the
Company or such Grantor hereunder, from time to time to (i) renew, compromise,
extend, increase, accelerate or otherwise change the time for payment of, or
otherwise change the terms of, the Obligations or any part thereof and (ii)
exercise or refrain from exercising any rights against any Intercompany Obligor
or any other Person.
33
ARTICLE XIII
Miscellaneous
SECTION 13.01. Notices. All communications and notices
hereunder shall (except as otherwise expressly permitted herein) be given as
provided in the Indenture and the Designated Pari Passu Obligations Governing
Documents. All communications and notices hereunder to any Grantor other than
the Company shall be given to it in care of the Company as provided in the
Indenture.
SECTION 13.02. Waivers; Amendment. (a) No failure or delay by
the Collateral Agent or any Secured Party in exercising any right or power
hereunder or under the Indenture or any Designated Pari Passu Obligations
Governing Document shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Collateral Agent and the Secured Parties hereunder and under
the Indenture and the Designated Pari Passu Obligations Governing Documents are
cumulative and are not exclusive of any rights or remedies that they would
otherwise have. No waiver of any provision of this Agreement or consent to any
departure by any Indenture Party therefrom shall in any event be effective
unless the same shall be permitted by paragraph (b) of this Section, and then
such waiver or consent shall be effective only in the specific instance and for
the purpose for which given. Without limiting the generality of the foregoing,
no issuance of Additional Notes under the Indenture or Designated Pari Passu
Obligations shall be construed as a waiver of any default hereunder, regardless
of whether the Collateral Agent or any Secured Party may have had notice or
knowledge of such default at the time. No notice or demand on any Indenture
Party in any case shall entitle such Indenture Party to any other or further
notice or demand in similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be
waived, amended or modified except pursuant to an agreement or agreements in
writing entered into by the Collateral Agent and the Indenture Party or
Indenture Parties and the Designated Pari Passu Obligations Secured Parties (or
the Representatives thereof) with respect to which such waiver, amendment or
modification is to apply, subject to any consent required under the Indenture or
any Designated Pari Passu Obligations Governing Documents.
SECTION 13.03. Collateral Agent's Fees and Expenses;
Indemnification. (a) The Company agrees to pay the Collateral Agent for its
services rendered hereunder the fees described in the separate fee letter
between the Company and the Collateral Agent, and to pay all fees and expenses
incurred by the Collateral Agent in connection with the performance of its
duties and enforcement of its rights hereunder and otherwise in connection with
the preparation, operation, administration and enforcement of this Agreement,
including, without limitation, reasonable attorney's fees and expenses and other
reasonable and related expenses incurred by the Collateral Agent.
(b) Each Grantor, to the fullest extent permitted under law,
jointly and severally agrees to indemnify the Collateral Agent, its Affiliates
and their respective officers, directors, employees, agents and representatives
(the "Indemnified Parties") against, and hold each Indemnified Party harmless
from, any and all losses, claims, damages, liabilities and related expenses,
including reasonable fees, charges and disbursements of any counsel for any
Indemnified Party, incurred by or asserted against any Indemnified Party arising
out of the execution, delivery or performance of this Agreement or any agreement
or instrument referred to herein or contemplated hereby and the enforcement and
protection of the rights of the Collateral Agent thereunder or any claim,
litigation, investigation or proceeding relating to any of the foregoing or to
the Collateral, whether or not any Indemnified Party is a party thereto;
provided that such indemnity shall not, as to any Indemnified Party, be
available to the extent that such
34
losses, claims, damages, liabilities or related expenses shall have resulted
from the gross negligence or willful misconduct of such Indemnified Party as
determined by a court of competent jurisdiction.
(c) The provisions of this Section shall remain operative and
in full force and effect regardless of the termination of any Noteholder
Documents or any Designated Pari Passu Obligations Governing Documents, the
consummation of the transactions contemplated hereby, the repayment of any of
the Obligation, the invalidity or unenforceability of any term or provision of
any Noteholder Documents or any Designated Pari Passu Obligations Governing
Documents, or any investigation made by or on behalf of the Collateral Agent or
any other Secured Party. All amounts due under this Section shall be payable
promptly after written demand therefor.
SECTION 13.04. Successors and Assigns. Whenever in this
Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the permitted successors and assigns of such party; and all
covenants, promises and agreements by or on behalf of any Grantor or the
Collateral Agent that are contained in this Agreement shall bind and inure to
the benefit of their respective successors and assigns.
SECTION 13.05. Survival of Agreement. All covenants,
agreements, representations and warranties made by the Indenture Parties in the
Indenture, in the Designated Pari Passu Obligations Governing Documents and in
the certificates or other instruments prepared or delivered in connection with
or pursuant to the Noteholder Documents or the Designated Pari Passu Obligations
Governing Documents shall be considered to have been relied upon by the Secured
Parties and shall survive the execution and delivery of the Noteholder Documents
and the Designated Pari Passu Obligations Governing Documents and the Designated
Pari Passu Obligations, regardless of any investigation made by any Secured
Party or on its behalf and notwithstanding that (i) the Collateral Agent, or any
Noteholder or (ii) the Collateral Agent or any holder of Designated Pari Passu
Obligations, may have had notice or knowledge of an Event of Default or
incorrect representation or warranty at the time any Notes are issued under the
Noteholder Documents or the Designated Pari Passu Obligations are issued, as the
case may be, and shall, subject to Section 13.12, continue in full force and
effect as long as the principal of or any accrued interest on any Notes or
Designated Pari Passu Obligations, as the case may be, or any fee or any other
amount payable under the Indenture or the Designated Pari Passu Governing
Documents, as the case may be, is outstanding and unpaid.
SECTION 13.06. Counterparts; Effectiveness; Several Agreement.
This Agreement may be executed in counterparts, each of which shall constitute
an original but all of which when taken together shall constitute a single
contract, and shall become effective as provided in this Section. Delivery of an
executed signature page to this Agreement by facsimile transmission shall be as
effective as delivery of a manually signed counterpart of this Agreement. This
Agreement shall become effective (i) as to any Indenture Party when a
counterpart hereof executed on behalf of such Indenture Party shall have been
delivered to the Collateral Agent and a counterpart hereof shall have been
executed on behalf of the Collateral Agent and (ii) as to any Designated Pari
Passu Obligations Secured Party when an Accession Agreement executed on behalf
of such Designated Pari Passu Obligations Secured Party shall have been
delivered to the Collateral Agent and such Accession Agreement shall have been
executed on behalf of the Collateral Agent. Thereafter this Agreement shall be
binding upon such Indenture Party of Designated Pari Passu Obligations Secured
Party and the Collateral Agent and their respective permitted successors and
assigns, and shall inure to the benefit of such Indenture Party, Designated Pari
Passu Obligations Secured Party, the Collateral Agent and the other Secured
Parties and their respective successors and assigns, except that no Indenture
Party or Designated Pari Passu Obligations Secured Party shall have the right to
assign or transfer its rights or obligations hereunder (and any such assignment
or transfer shall be void) except as expressly contemplated by this Agreement.
This Agreement shall be construed as a separate agreement with respect to each
Indenture Party or Designated Pari Passu
35
Obligations Secured Party and may be amended, modified, supplemented, waived or
released with respect to any Indenture Party without the approval of any other
Indenture Party or Designated Pari Passu Obligations Secured Party and without
affecting the obligations of any other Indenture Party or Designated Pari Passu
Obligations Secured Party hereunder.
SECTION 13.07. Severability. Any provision of this Agreement
held to be invalid, illegal or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such invalidity, illegality
or unenforceability without affecting the validity, legality and enforceability
of the remaining provisions hereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction. The parties shall endeavor in good-faith negotiations to replace
the invalid, illegal or unenforceable provisions with valid provisions the
economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
SECTION 13.08. Governing Law; Jurisdiction; Consent to Service
of Process. (a) This Agreement shall be construed in accordance with and
governed by the law of the State of New York.
(b) Each party hereto hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of the
Supreme Court of the State of New York sitting in New York County and of the
United States District Court of the Southern District of New York, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to the Noteholder Documents or the Designated Pari Passu Obligations
Governing Documents, or for recognition or enforcement of any judgment, and each
of the parties hereto hereby irrevocably and unconditionally agrees that all
claims in respect of any such action or proceeding may be heard and determined
in such New York State or, to the extent permitted by law, in such Federal
court. Each of the parties hereto agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in any Noteholder Document or in any Designated Pari Passu Obligations
Governing Document shall affect any right that any party hereto may otherwise
have to bring any action or proceeding relating to any Noteholder Document or
any Designated Pari Passu Obligations Governing Document in the courts of any
jurisdiction.
(c) Each party hereto hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or the
Indenture or any Designated Pari Passu Obligations Governing Document in any
court referred to in paragraph (b) of this Section. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.
(d) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 13.01. Nothing
in this Agreement or the Indenture or any Designated Pari Passu Obligation
Governing Document will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.
SECTION 13.09. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
OR RELATING TO ANY NOTEHOLDER DOCUMENT OR ANY DESIGNATED PARI PASSU OBLIGATIONS
GOVERNING DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE,
36
THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 13.10. Headings. Article and Section headings and the
Table of Contents used herein are for convenience of reference only, are not
part of this Agreement and are not to affect the construction of, or to be taken
into consideration in interpreting, this Agreement.
SECTION 13.11. Security Interest Absolute. The pledges and
security interests created by the Noteholder Documents shall be absolute and
unconditional irrespective of (a) any lack of validity or enforceability of the
Indenture, any Designated Pari Passu Obligations Governing Document, any
agreement with respect to any of the Obligations or any other agreement or
instrument relating to any of the foregoing, (b) any change in the time, manner
or place of payment of, or in any other term of, all or any of the Obligations,
or any other amendment or waiver of or any consent to any departure from the
Indenture or any other agreement or instrument, (c) any exchange, release or
non-perfection of any Lien on other collateral, or any release or amendment or
waiver of or consent under or departure from any guarantee, securing or
guaranteeing all or any of the Obligations, or (d) any other circumstance that
might otherwise constitute a defense available to, or a discharge of, any
Grantor in respect of the Obligations or this Agreement.
SECTION 13.12. Termination or Release. The termination of this
Agreement and each security interest granted hereby and the release of any
Collateral pledged or in which a security interest has been granted hereunder
shall be governed by the terms and conditions of the Indenture and any
Designated Pari Passu Obligations Governing Document. In connection with any
termination or release pursuant to the Indenture or any Designated Pari Passu
Obligations Governing Document, the Collateral Agent will execute and deliver to
each applicable Grantor, at such Grantor's expense, all documents that such
Grantor shall reasonably request to evidence such termination or release.
SECTION 13.13. Additional Grantors. (a) Upon execution and
delivery by the Collateral Agent and a Subsidiary of an instrument in a form
agreed to by the Collateral Agent and the Company (an "Additional Subsidiary
Agreement"), such Subsidiary shall become a party hereto and a Grantor under the
Indenture and any applicable Designated Pari Passu Obligations Governing
Document referenced therein to the extent set forth in such Additional
Subsidiary Agreement and shall, to the extent applicable, create pledges of and
security interests in its assets to secure the Obligations set forth in such
Additional Subsidiary Agreement with the same force and effect as if originally
named as a Current Assets Grantor and an Other Collateral Grantor herein. At the
time any Subsidiary shall become a party to this Agreement as provided in the
preceding sentence, the Schedules hereto shall be supplemented as appropriate to
reflect the pledges and security interests, as applicable, given or created by
such Subsidiary, and such supplemented Schedules shall replace the Schedules
that shall therefore have been attached to this Agreement. The execution and
delivery of any Additional Subsidiary Agreement and the amendment of the
Schedules hereto as above provided shall not require the consent of any other
Indenture Party. The rights and obligations of each Indenture Party shall remain
in full force and effect notwithstanding the addition of any new Indenture Party
as a party to this Agreement.
SECTION 13.14. Collateral Agent Appointed Attorney-in-Fact.
Each Grantor hereby appoints the Collateral Agent the attorney-in-fact of such
Grantor for the purpose of carrying out the provisions of this Agreement and
taking any action and executing any instrument that the Collateral Agent may
deem necessary or advisable to accomplish the purposes hereof, which appointment
is irrevocable and coupled with an interest in each case upon the occurrence and
during the continuance of an Event of Default. Without limiting the generality
of the foregoing, the Collateral Agent shall have the
37
right, upon the occurrence and during the continuance of an Event of Default,
with full power of substitution either in the Collateral Agent's name or in the
name of such Grantor (a) to receive, endorse, assign and/or deliver any and all
notes, acceptances, checks, drafts, money orders or other evidences of payment
relating to the Collateral of such Grantor or any part thereof; (b) to demand,
collect, receive payment of, give receipt for and give discharges and releases
of all or any of the Collateral; (c) to sign the name of any Grantor on any
invoice or bill of lading relating to any of the Collateral; (d) to send
verifications of Accounts Receivable to any Account Debtor; (e) to commence and
prosecute any and all suits, actions or proceedings at law or in equity in any
court of competent jurisdiction to collect or otherwise realize on all or any of
the Collateral or to enforce any rights in respect of any Collateral; (f) to
settle, compromise, compound, adjust or defend any actions, suits or proceedings
relating to all or any of the Collateral; (g) to notify, or to require any
Grantor to notify, Account Debtors to make payment directly to the Collateral
Agent relating to the Collateral; and (h) to use, sell, assign, transfer,
pledge, make any agreement with respect to or otherwise deal with all or any of
the Collateral, and to do all other acts and things necessary to carry out the
purposes of this Agreement, as fully and completely as though the Collateral
Agent were the absolute owner of the Collateral for all purposes; provided that
nothing herein contained shall be construed as requiring or obligating the
Collateral Agent to make any commitment or to make any inquiry as to the nature
or sufficiency of any payment received by the Collateral Agent, or to present or
file any claim or notice, or to take any action with respect to the Collateral
or any part thereof or the moneys due or to become due in respect thereof or any
property covered thereby. The Collateral Agent and the other Secured Parties
shall be accountable only for amounts actually received as a result of the
exercise of the powers granted to them herein, and neither they nor their
officers, directors, employees or agents shall be responsible to any Grantor for
any act or failure to act hereunder, except for their own gross negligence or
willful misconduct or the breach of such Person of its obligations set forth
herein.
SECTION 13.15. Secured Party Obligations. Each Secured Party
will perform its obligations and pay all amounts owed by it under the Indenture
and the Designated Pari Passu Obligations Governing Documents in accordance with
the terms thereof.
38
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
THE GOODYEAR TIRE & RUBBER COMPANY,
by
/s/ D. R. Wells
-----------------------------------
Name: D. R. Wells
Title: Vice President and Treasurer
39
WILMINGTON TRUST COMPANY, as
Collateral Agent,
by
/s/ Auita E. Dallago
--------------------------------
Name: Auita E. Dallago
Title: Senior Financial Services
Officer
40
ALLIED TIRE SALES, INC., as a CURRENT
ASSETS GRANTOR and an OTHER COLLATERAL
GRANTOR,
by
/s/ D. R. Wells
--------------------------------
Name: D. R. Wells
Title: Vice President
BELT CONCEPTS OF AMERICA, INC., as a
CURRENT ASSETS GRANTOR and an OTHER
COLLATERAL GRANTOR,
by
/s/ D. R. Wells
--------------------------------
Name: D. R. Wells
Title: Vice President
COSMOFLEX, INC., as a CURRENT ASSETS
GRANTOR and an OTHER COLLATERAL
GRANTOR,
by
/s/ D. R. Wells
--------------------------------
Name: D. R. Wells
Title: Vice President
DAPPER TIRE CO., INC., as a CURRENT
ASSETS GRANTOR and an OTHER COLLATERAL
GRANTOR,
by
/s/ D. R. Wells
--------------------------------
Name: D. R. Wells
Title: Vice President
41
DIVESTED COMPANIES HOLDING COMPANY, as
a CURRENT ASSETS GRANTOR and an OTHER
COLLATERAL GRANTOR,
by
/s/ Randall M. Loyd
--------------------------------
Name: Randall M. Loyd
Title: Vice President
by
/s/ Ronald J. Carr
--------------------------------
Name: Ronald J. Carr
Title: Vice President
DIVESTED LITCHFIELD PARK PROPERTIES,
INC., as a CURRENT ASSETS GRANTOR and
an OTHER COLLATERAL GRANTOR,
by
/s/ Randall M. Loyd
--------------------------------
Name: Randall M. Loyd
Title: Vice President
by
/s/ Ronald J. Carr
--------------------------------
Name: Ronald J. Carr
Title: Vice President
42
GOODYEAR CANADA INC., as a CURRENT
ASSETS GRANTOR,
by
/s/ Linda Alexander
--------------------------------
Name: Linda Alexander
Title: Vice President
by
/s/ D. S. Hamilton
--------------------------------
Name: D. S. Hamilton
Title: Secretary
GOODYEAR FARMS, INC., as a CURRENT
ASSETS GRANTOR and an OTHER COLLATERAL
GRANTOR,
by
/s/ D. R. Wells
--------------------------------
Name: D. R. Wells
Title: Vice President
GOODYEAR INTERNATIONAL CORPORATION, as
a CURRENT ASSETS GRANTOR and an OTHER
COLLATERAL GRANTOR,
by
/s/ D. R. Wells
--------------------------------
Name: D. R. Wells
Title: Vice President
THE KELLY-SPRINGFIELD TIRE
CORPORATION, as a CURRENT ASSETS
GRANTOR and an OTHER COLLATERAL
GRANTOR,
by
/s/ D. R. Wells
--------------------------------
Name: D. R. Wells
Title: Vice President
43
WINGFOOT COMMERCIAL TIRE SYSTEMS,
LLC., as a CURRENT ASSETS GRANTOR and
an OTHER COLLATERAL GRANTOR,
by
/s/ D. R. Wells
--------------------------------
Name: D. R. Wells
Title: Vice President
WINGFOOT VENTURES EIGHT INC., as a
CURRENT ASSETS GRANTOR and an OTHER
COLLATERAL GRANTOR,
by
/s/ Ronald J. Carr
--------------------------------
Name: Ronald J. Carr
Title: Vice President
44
ACCEPTED AND AGREED, SOLELY FOR
PURPOSES OF ARTICLE X:
WELLS FARGO BANK, N.A., individually
and as Trustee,
by
/s/ Michael T. Lechner
--------------------------------
Name: Michael T. Lechner
Title: Assistant Vice President
45
EXHIBIT I
FORM OF ACCESSION AGREEMENT
AGREEMENT dated as of [-], among [NAME OF ACCEDING REPRESENTATIVE OF HOLDERS OF
DESIGNATED PARI PASSU OBLIGATIONS] (the "Acceding Representative"), THE GOODYEAR
TIRE & RUBBER COMPANY (the "Company") and WILMINGTON TRUST COMPANY, as
Collateral Agent (the "Collateral Agent").
A. Reference is made to the Collateral Agreement, dated as of March 12, 2004
(the "Collateral Agreement"), among the Company and the Collateral Agent.
B. Capitalized terms used and not otherwise defined herein shall have the
meanings assigned to them in the Intercreditor Agreement.
C. The Company proposes to issue or incur [describe Designated Pari Passu
Obligations] (the "Acceding Obligations"), and the Acceding Representative will
serve as Representative for the holders of the Acceding Obligations. The
Acceding Obligations are being designated by the Company as Designated Pari
Passu Obligations pursuant to Section 11.01 of the Collateral Agreement.
D. The Acceding Representative wishes to appoint the Collateral Agent as
Collateral Agent under the Collateral Agreement with respect to the Acceding
Obligations.
Accordingly, the Acceding Representative, the Company and the Collateral Agent
agree as follows:
SECTION 1. Accession to the Collateral Agreement. The Acceding Representative,
on behalf of the holders of the Acceding Obligations hereby (a) becomes a
Representative under the Collateral Agreement, (b) accedes and becomes a party
thereto and, (b) appoints the Collateral Agent as Collateral Agent thereunder
with respect to the Acceding Obligations.
SECTION 2. Acceptance of Appointment. The Collateral Agent hereby accepts its
appointment as Collateral Agent for the Acceding Representative on behalf of the
holders of Acceding Obligations under the Collateral Agreement.
SECTION 3. Representations and Warranties Acceding Representative. The Acceding
Representative represents and warrants that it has the power and authority to
enter into this Agreement and has been authorized to do so by the holders of the
Acceding Obligations.
SECTION 3. Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument.
SECTION 4. Benefit of Agreement. The agreements set forth herein or undertaken
pursuant hereto are for the benefit of, and may be enforced by, any party to the
Collateral Agreement.
SECTION 5. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 6. Notices. All communications and notices hereunder shall be in writing
and given as provided in Section 13.02 of the Indenture. All communications and
notices hereunder to the Acceding Representative shall be given to it at the
address set forth under its signature hereto.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.
[NAME OF ACCEDING REPRESENTATIVE]
By:_______________________
Name:
Title:
For Notices
Attention of:
Address:
Telecopy No.:
WILMINGTON TRUST COMPANY, AS COLLATERAL AGENT
By:_______________________
Name:
Title:
THE GOODYEAR TIRE & RUBBER COMPANY
By:_______________________
Name:
Title:
EXHIBIT 4.15
LIEN SUBORDINATION AND INTERCREDITOR AGREEMENT
dated as of
March 12, 2004,
among
JPMORGAN CHASE BANK,
as Credit Facilities Collateral Agent,
WILMINGTON TRUST COMPANY,
as Initial Junior Indebtedness Collateral Agent
and
THE GOODYEAR TIRE & RUBBER COMPANY
and the Subsidiaries named herein
LIEN SUBORDINATION AND INTERCREDITOR
AGREEMENT dated as of March 12, 2004, among JPMORGAN
CHASE BANK, as collateral agent for the Credit
Facility Secured Parties referred to herein;
WILMINGTON TRUST COMPANY, as collateral agent for the
Initial Junior Indebtedness Secured Parties referred
to herein; THE GOODYEAR TIRE & RUBBER COMPANY; and
the subsidiaries of The Goodyear Tire & Rubber
Company named herein.
Reference is made to (a) the Credit Agreements (such term, and each
other capitalized term used and not otherwise defined herein, having the meaning
assigned to it in Article I), under which the Lenders referred to therein have
extended and agreed to extend credit to the Company and certain of its
subsidiaries, and (b) the Initial Junior Indebtedness Governing Document, under
which the Company proposes to issue the Initial Junior Indebtedness. In
consideration of the amendment of the Credit Agreements to permit the issuance
of the Initial Junior Indebtedness, the purchase of the Initial Junior
Indebtedness by the purchasers thereof, the mutual agreements herein contained
and other good and valuable consideration, the receipt of which is hereby
acknowledged, the Credit Facilities Collateral Agent (for itself and on behalf
of the Credit Facilities Secured Parties), the Initial Junior Indebtedness
Collateral Agent (for itself and on behalf of the Initial Junior Indebtedness
Secured Parties), the Company and the subsidiaries of the Company named herein
agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Construction; Certain Defined Terms. (a) The
definitions of terms herein shall apply equally to the singular and plural forms
of the terms defined. Whenever the context may require, any pronoun shall
include 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 "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,
(ii) any reference herein to any person shall be construed to include such
person's successors and assigns, but shall not be deemed to include the
subsidiaries of such person unless express reference is made to such
subsidiaries, (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
Articles and Sections shall be construed to refer to Articles and Sections of
this Agreement and (v) the words "asset" and "property" shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights.
2
(b) As used in this Agreement, the following terms have the meanings
specified below:
"ABL Facilities Agreement" means the Term Loan and Revolving Credit
Agreement dated as of March 31, 2003, among the Company, certain lenders,
JPMorgan Chase Bank, as administrative agent, Citicorp USA Inc., as syndication
agent, and Bank of America, N.A. and The CIT Group/Business Credit, Inc., as
documentation agents, as amended, extended, renewed, restated, supplemented or
otherwise modified from time to time.
"Accession Agreement" means an accession agreement in substantially
the form of Annex I hereto under which a collateral agent or similar
Representative of Designated Senior Obligations or Designated Junior Obligations
shall become a party hereto and the Designated Senior Obligations Collateral
Agent for such Designated Senior Obligations or the Designated Junior
Obligations Collateral Agent for such Designated Junior Obligations hereunder,
as the case may be.
"Bankruptcy Code" means Title 11 of the U.S. Code.
"Collateral" means the US Facilities Collateral, the Designated
Senior Obligations Collateral, the Initial Junior Indebtedness Collateral and
the Designated Junior Obligations Collateral.
"Collateral Agent" means any of the Credit Facilities Collateral
Agent, any Designated Senior Obligations Collateral Agent, the Initial Junior
Indebtedness Collateral Agent and any Designated Junior Obligations Collateral
Agent.
"Company" means The Goodyear Tire & Rubber Company, an Ohio
corporation.
"Credit Agreements" means the US Facilities Credit Agreements and
the European Facilities Credit Agreement.
"Credit Facilities Collateral Agent" means JPMorgan Chase Bank, in
its capacity as Collateral Agent under the Credit Agreements and the Credit
Facilities Security Documents, and its successors in such capacity.
"Credit Facilities Obligations" means the US Facilities Obligations
and the European Facilities Obligations.
"Credit Facilities Secured Parties" means the US Facilities Secured
Parties and the European Facilities Secured Parties.
"Credit Facilities Security Documents" means the Master Guarantee
and Collateral Agreement, the "Other Security Documents", as defined therein,
and any other documents now existing or entered into after the date hereof that
create Liens on any assets or properties of the Company or any of its
subsidiaries to secure any Credit Facilities Obligations.
3
"Designated Junior Obligations" means all obligations of the Company
or any of its subsidiaries that shall have been designated as such in accordance
with Article IV, including any Guarantee of any such obligations by the Company
or any of its subsidiaries.
"Designated Junior Obligations Collateral" means any assets or
properties of the Company or any of its subsidiaries now or at any time
hereafter subject to Liens securing any Designated Junior Obligations.
"Designated Junior Obligations Collateral Agent" means, with respect
to any Designated Junior Obligations, any collateral agent or similar
Representative appointed to act on behalf of the applicable Designated Junior
Obligations Secured Parties with respect to the Designated Junior Obligations
Collateral securing such Designated Junior Obligations; provided, that if no
such collateral agent or other Representative shall have been so appointed by
the applicable Designated Junior Obligations Secured Parties, then the
Designated Junior Obligations Collateral Agent with respect to such Designated
Junior Obligations will be deemed to be such Designated Junior Obligations
Secured Parties.
"Designated Junior Obligations Governing Documents" means, as to any
Designated Junior Obligations, the credit agreement, note agreement, indenture
or other instrument or document under which such Designated Junior Obligations
shall have been issued or incurred.
"Designated Junior Obligations Secured Parties" means, at any time,
each holder of, or obligee in respect of, any Designated Junior Obligations
outstanding at such time.
"Designated Junior Obligations Security Documents" means any
documents that create Liens on any assets or properties of the Company or any of
its subsidiaries to secure any Designated Junior Obligations.
"Designated Lenders" means, at any time, the Majority Lenders under
and as defined in the Credit Agreement that accounts for the greatest principal
amount of the aggregate outstanding loans and letter of credit exposures under
all the Credit Agreements at such time.
"Designated Senior Obligations" means all obligations of the Company
or any of its subsidiaries that shall have been designated as such in accordance
with Article IV.
"Designated Senior Obligations Collateral" means any assets or
properties of the Company or any of its subsidiaries now or at any time
hereafter subject to Liens securing any Designated Senior Obligations.
"Designated Senior Obligations Collateral Agent" means, with respect
to any Designated Senior Obligations, any collateral agent or similar
Representative appointed to act on behalf of the applicable Designated Senior
Obligations Secured
4
Parties with respect to the Designated Senior Obligations Collateral securing
such Designated Senior Obligations; provided, that if no such collateral agent
or other Representative shall have been so appointed by the applicable
Designated Senior Obligations Secured Parties, then the Designated Senior
Obligations Collateral Agent with respect to such Designated Senior Obligations
will be deemed to be such Designated Senior Obligations Secured Parties.
"Designated Senior Obligations Governing Documents" means, as to any
Designated Senior Obligations, the credit agreement, note agreement, indenture
or other instrument or document under which such Designated Senior Obligations
shall have been issued or incurred.
"Designated Senior Obligations Secured Parties" means, at any time,
each holder of, or obligee in respect of, any Designated Senior Obligations
outstanding at such time.
"Designated Senior Obligations Security Documents" means any
documents entered into after the date hereof that create Liens on any assets or
properties of the Company or any of its subsidiaries to secure any Designated
Senior Obligations.
"European Facilities Credit Agreement" means the $650,000,000 Term
Loan and Revolving Credit Agreement dated as of March 31, 2003, among Goodyear
Dunlop Tires Europe B.V., the other borrowers thereunder, certain lenders,
JPMorgan Chase Bank, as administrative agent, and Deutsche Bank AG, as
syndication agent, as amended, extended, renewed, restated, supplemented or
otherwise modified from time to time.
"European Facilities Guarantees" means the guarantees by the Company
and the US Subsidiary Guarantors, under Article II of the Master Guarantee and
Collateral Agreement, of the European Facilities Obligations.
"European Facilities Obligations" means all "Revolving Obligations"
as such term is defined in the European Facilities Credit Agreement and, if the
Credit Facilities Security Documents shall at any time be amended to provide
collateral for the guarantees thereof by the Company and any of the US
Subsidiary Guarantors, all "Term Obligations" as such term is defined in the
European Facilities Credit Agreement.
"European Facilities Secured Parties" means, at any time, each
person that is a "Secured Party" under and as defined in the European Facilities
Credit Agreement and each other holder of, or obligee in respect of, any
European Facilities Obligations outstanding at such time.
"European Facilities US Collateral" means all Collateral subject to
European Facilities US Liens.
"European Facilities US Liens" means Liens on assets and properties
of the Company and the US Subsidiary Guarantors (other than the Luxembourg
Finance
5
Pledged Collateral) created under Credit Facilities Security Documents to secure
the European Facilities Guarantees.
"Grantor" means the Company and each subsidiary of the Company that
shall have created any Senior Lien or Junior Lien on its assets or properties to
secure any Senior Obligations or Junior Obligations.
"Initial Junior Indebtedness" means the $450,000,000 aggregate
principal amount of 11% Senior Secured Notes due 2011 and $200,000,000 aggregate
principal amount of Senior Secured Floating Rate Notes due 2011 issued on or
about the date of this Agreement pursuant to the Initial Junior Indebtedness
Governing Document.
"Initial Junior Indebtedness Collateral" means the "Collateral", as
defined in the Initial Junior Indebtedness Collateral Agreement, and any other
assets or properties of the Company or any of its subsidiaries now or at any
time hereafter subject to Liens securing any Initial Junior Indebtedness
Obligations.
"Initial Junior Indebtedness Collateral Agent" means Wilmington
Trust Company, in its capacity as Collateral Agent under the Initial Junior
Indebtedness Governing Document and the Initial Junior Indebtedness Security
Documents, and its successors in such capacity.
"Initial Junior Indebtedness Collateral Agreement" means the
Collateral Agreement dated as of March 12, 2004, among the Company, certain
subsidiaries of the Company and the Initial Junior Indebtedness Collateral
Agent, as amended, extended, renewed, restated, supplemented or otherwise
modified from time to time.
"Initial Junior Indebtedness Governing Document" means the Indenture
dated as of March 12, 2004, among the Company, as Issuer, certain subsidiaries
of the Company, as Guarantors, and Wells Fargo Bank, N.A., as Trustee, as
amended, extended, renewed, restated, supplemented or otherwise modified from
time to time.
"Initial Junior Indebtedness Obligations" means (a) the due and
punctual payment of (i) the principal of and interest (including interest
accruing during the pendency of any bankruptcy, insolvency, receivership or
other similar proceeding, regardless of whether allowed or allowable in such
proceeding) on the Initial Junior Indebtedness, when and as due, whether at
maturity, by acceleration, upon one or more dates set for prepayment or
otherwise, (ii) all other monetary obligations of the Company or any of its
subsidiaries to any of the Initial Junior Indebtedness Secured Parties under the
Initial Junior Indebtedness Governing Document or any Initial Junior
Indebtedness Security Document, including fees, costs, expenses and indemnities,
whether primary, secondary, direct, contingent, fixed or otherwise (including
monetary obligations incurred during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding) and (iv) all amounts due under any guarantee of
any of the foregoing, including any guarantee contained in the Initial Junior
Indebtedness Governing Document, and (b) the due and punctual performance of all
other obligations of the Company or any of its subsidiaries to
6
any of the Initial Junior Indebtedness Secured Parties under the Initial Junior
Indebtedness Governing Document or any Initial Junior Indebtedness Security
Document.
"Initial Junior Indebtedness Representative" means Wells Fargo bank,
N.A., in its capacity as Trustee under the Initial Junior Indebtedness Governing
Document.
"Initial Junior Indebtedness Secured Parties" means, at any time,
the Initial Junior Indebtedness Collateral Agent, the Initial Junior Obligations
Representative and each other holder of, or obligee in respect of, any Initial
Junior Indebtedness Obligations outstanding at such time.
"Initial Junior Indebtedness Security Documents" means the Initial
Junior Indebtedness Collateral Agreement and the "Other Security Documents", as
defined therein, and any other documents entered into after the date hereof that
create Liens on any assets or properties of the Company or any of its
subsidiaries to secure any Initial Junior Indebtedness Obligations.
"Junior Collateral Agent" means the Initial Junior Indebtedness
Collateral Agent and each Designated Junior Obligations Collateral Agent.
"Junior Liens" means Liens created under Junior Obligations Security
Documents securing Junior Obligations and any other Liens securing the Junior
Obligations, however arising (including Liens arising out of judgments obtained
by or on behalf of holders of Junior Obligations).
"Junior Obligations" means the Initial Junior Indebtedness
Obligations and the Designated Junior Obligations.
"Junior Obligations Collateral" means the Initial Junior
Indebtedness Collateral and the Designated Junior Obligations Collateral.
"Junior Obligations Secured Parties" means the Initial Junior
Indebtedness Secured Parties and the Designated Junior Obligations Secured
Parties.
"Junior Obligations Security Documents" means the Initial Junior
Indebtedness Security Documents and the Designated Junior Obligations Security
Documents.
"Lien" means any pledge, security interest, mortgage or other lien
or encumbrance created to secure any indebtedness or other obligation.
"Master Guarantee and Collateral Agreement" means the Master
Guarantee and Collateral Agreement dated as of March 31, 2003, among the
Company, certain of its subsidiaries, the Lenders under and as defined in the
Credit Agreements and the Credit Facilities Collateral Agent, as amended,
extended, renewed, restated, supplemented or otherwise modified from time to
time.
7
"Representative" means (a) in the case of any Credit Facility
Obligations, the Administrative Agent under the applicable Credit Agreement or
the Credit Facilities Collateral Agent, (b) in the case of the Initial Junior
Indebtedness Obligations, the Initial Junior Indebtedness Representative and the
Initial Junior Indebtedness Collateral Agent, and (c) in the case of any
Designated Senior Obligations or Designated Junior Obligations, any
administrative agent, trustee or similar representative designated pursuant to
Article IV or the applicable Designated Senior Obligations Collateral Agent or
Designated Junior Obligations Collateral Agent.
"Secured Parties" means the Credit Facilities Secured Parties, the
Designated Senior Obligations Secured Parties, the Initial Junior Indebtedness
Secured Parties and the Designated Junior Obligations Secured Parties.
"Senior Collateral Agent" means the Credit Facilities Collateral
Agent and each Designated Senior Obligations Collateral Agent.
"Senior Obligations" means the US Facilities Obligations and the
Designated Senior Obligations.
"Senior Obligations Collateral" means the US Facilities Collateral
and the Designated Senior Obligations Collateral.
"Senior Obligations Secured Parties" means the US Facilities Secured
Parties and the Designated Senior Obligations Secured Parties.
"Senior Obligations Security Documents" means the Credit Facilities
Security Documents and the Designated Senior Obligations Security Documents.
"Senior Liens" means Liens created under Senior Obligations Security
Documents securing Senior Obligations, and Liens on the Luxembourg Finance
Pledged Collateral (as defined in the Master Guarantee and Collateral Agreement)
created under the Senior Obligations Security Documents to secure the European
Facilities Obligations.
"subsidiary" means, with respect to any Person (the "parent") at any
date, any corporation, limited liability company, partnership, association or
other entity the accounts of which are consolidated with those of the parent in
the parent's consolidated financial statements in accordance with GAAP as of
such date, as well as any other corporation, limited liability company,
partnership, association or other entity of which securities or other ownership
interests representing more than 50% of the equity or more than 50% of the
ordinary voting power or, in the case of a partnership, more than 50% of the
general partnership interests are, as of such date, owned, controlled or held by
the parent or one or more subsidiaries of the parent or by the parent and one or
more subsidiaries of the parent.
"US Facilities Collateral" means all "Collateral", as defined in the
Master Guarantee and Collateral Agreement, securing any US Facilities
Obligations, and any other assets or properties of the Company or any of its
subsidiaries now or at any time hereafter subject to Liens securing any US
Facilities Obligations.
8
"US Facilities Credit Agreements" means the ABL Facilities
Agreement, the US Revolving Facility Agreement and the US Term Facility
Agreement.
"US Facilities Obligations" means (a) all "Obligations", as such
term is defined in any of the US Revolving Facility Agreement, the US Term
Facility Agreement or the ABL Facilities Agreement, each as amended and in
effect through the date hereof, whether such Obligations are outstanding on the
date hereof or hereafter incurred under commitments in effect on the date hereof
(including Obligations consisting of the principal of and interest on the
"Tranche B Term Loans" provided for in the First Amendment dated as of February
17, 2004, to the ABL Facilities Agreement and Obligations related to such
Tranche B Term Loans), (b) additional Obligations consisting of loans, letter of
credit reimbursement obligations and related interest and fees incurred under
any of the US Revolving Facility Agreement, the US Term Facility Agreement or
the ABL Facilities Agreement pursuant to commitments first made available to the
Company or any of its subsidiaries after the date hereof (it being agreed that
an increase in the amount of letters of credit or other accommodations available
under, and limited to the amount of, a revolving credit or similar commitment in
effect on the date hereof shall not be deemed to be new commitment) and (c) all
"Collateral Agent Obligations" and "US Miscellaneous Obligations", as such terms
are defined in the Master Guarantee and Collateral Agreement; provided, that any
loans or letter of credit reimbursement obligations referred to in clause (b)
above shall (together with any related interest or fees) be excluded from the
"US Facilities Obligations" to the extent they are incurred in violation of the
Initial Junior Indebtedness Governing Document or any Designated Junior
Obligations Governing Document in effect at the earlier of (i) the time of such
incurrence or (ii) the time at which the commitments under which such
obligations are incurred were first made available.
"US Facilities Secured Parties" means, at any time, each person that
is a "Secured Party" under and as defined in any of the US Facilities Credit
Agreements and each other holder of, or obligee in respect of, any US Facilities
Obligations outstanding at such time.
"US Revolving Facility Agreement" means the $750,000,000 Amended and
Restated Revolving Credit Agreement dated as of March 31, 2003, among the
Company, certain lenders and JPMorgan Chase Bank, as administrative agent, as
amended, extended, renewed, restated, supplemented or otherwise modified from
time to time.
"US Subsidiary Guarantors" has the meaning assigned to such term in
the Master Guarantee and Collateral Agreement.
"US Term Facility Agreement" means the $645,454,545 Term Loan
Agreement dated as of March 31, 2003, among the Company, certain lenders,
JPMorgan Chase Bank, as administrative agent, and BNP Paribas, as syndication
agent, as amended, extended, renewed, restated, supplemented or otherwise
modified from time to time.
9
ARTICLE II
Subordination of Junior Liens
SECTION 2.01. Subordination of Junior Liens. (a) All Junior Liens in
respect of any Collateral are expressly subordinated and made junior in right,
priority, operation and effect to any and all Senior Liens in respect of such
Collateral, notwithstanding anything contained in this Agreement, the Initial
Junior Indebtedness Governing Document, any Designated Junior Obligations
Governing Document, any Junior Obligations Security Document or any other
agreement or instrument to the contrary, and irrespective of the time, order or
method of creation, attachment or perfection of such Junior Liens and Senior
Liens or any defect or deficiency or alleged defect or deficiency in any of the
foregoing.
(b) It is acknowledged that (i) the aggregate amount of the Senior
Obligations may be increased as provided in Article III or through increases in
the amounts of the facilities established by the US Facilities Credit Agreements
or the Designated Senior Obligations Governing Documents (subject to the
limitations set forth in the Initial Junior Indebtedness Governing Document and
the Designated Junior Obligations Governing Documents), (ii) a portion of the
Senior Obligations consists or may consist of Indebtedness that is revolving in
nature, and the amount thereof that may be outstanding at any time or from time
to time may be increased or reduced and subsequently reborrowed and (iii) the
Senior Obligations may be extended, renewed or otherwise amended or modified, or
secured with additional Collateral (the Liens on which, to the extent they
secure Senior Obligations, shall become Senior Liens), from time to time, all
without affecting the subordination of the Junior Liens hereunder or the
provisions of this Agreement defining the relative rights of the Senior
Obligations Secured Parties and the Junior Obligations Secured Parties. The lien
priorities provided for herein shall not be altered or otherwise affected by any
amendment, modification, supplement, extension, increase, replacement, renewal,
restatement or refinancing of either the Junior Obligations or the Senior
Obligations, by the securing of any Senior Obligations with any additional
Collateral or guarantees (the Liens on which, to the extent they secure Senior
Obligations, shall become Senior Liens), by the release of any Collateral or
Guarantees securing any Senior Obligations, by the failure of any person to
comply with any provision of this Agreement or any agreement evidencing,
governing or securing any Senior Obligation or Junior Obligation, or by any
action that any Collateral Agent or Secured Party may take or fail to take in
respect of any Collateral. Without limiting the foregoing, existing or future
Senior Obligations of any class may be secured by Collateral subject to Junior
Liens, and the Liens on such Collateral securing such Senior Obligations will
constitute Senior Liens entitled to the benefit of this Agreement.
(c) It is further acknowledged (i) that the Master Guarantee and
Collateral Agreement contains provisions subordinating certain of the Senior
Liens to other Senior Liens and (ii) that the holders of Senior Obligations of
one or more classes may from time to time hereafter enter into agreements
establishing the relative priorities of such classes of Senior Obligations or of
the Senior Liens securing the same. It is agreed that the relative priorities of
classes of Senior Obligations shall be governed by the foregoing
10
agreements or, to the extent not determined by such agreements, by applicable
law, and that nothing in this Agreement shall affect such relative priorities of
classes of Senior Obligations or the related Senior Liens. It is further agreed
that no agreements establishing the relative priorities of Senior Obligations of
one or more classes or of the Senior Liens securing such Senior Obligations
shall in any way limit or affect the subordination of the Junior Liens provided
for in this Agreement or the provisions of this Agreement defining the relative
rights of the Senior Obligations Secured Parties and the Junior Obligations
Secured Parties.
(d) It is further acknowledged that the Senior Obligations are or
may in the future be secured by Liens on Collateral other than the Collateral
subject to the Junior Liens, including Liens on certain real properties of the
Company and its subsidiaries. It is agreed that no Senior Collateral Agent will
have any obligation to proceed against any such other Collateral securing the
Senior Obligations or to exercise any other remedies available to them as a
condition to obtaining the benefits of this Article II.
(e) The Initial Junior Indebtedness Collateral Agent acknowledges
receipt of copies of the Credit Agreements and the Credit Facilities Security
Documents as in effect on the date hereof. The Company hereby represents,
warrants and confirms that the Initial Junior Indebtedness Governing Document
and the principal Initial Junior Indebtedness Security Documents (other than any
account control or "lock-box" agreements) contain the provisions set forth in
Annex II hereto under which the Initial Junior Indebtedness Secured Parties
agree to, and subject their rights to the provisions of, this Agreement as set
forth therein.
SECTION 2.02. No Action With Respect to Junior Obligations
Collateral Subject to Senior Liens. No Junior Collateral Agent or other Junior
Obligations Secured Party shall commence or instruct any Junior Collateral Agent
to commence any judicial or nonjudicial foreclosure proceedings with respect to,
seek to have a trustee, receiver, liquidator or similar official appointed for
or over, attempt any action to take possession of, exercise any right, remedy or
power with respect to, or otherwise take any action to enforce its interest in
or realize upon, or take any other action available to it in respect of, any
Junior Obligations Collateral under any Junior Obligations Security Document,
applicable law or otherwise, at any time when such Junior Obligations Collateral
shall be subject to any Senior Lien and any Senior Obligations secured by such
Senior Lien shall remain outstanding or any commitment to extend credit that
would constitute Senior Obligations secured by such Senior Lien shall remain in
effect, it being agreed that only the applicable Senior Collateral Agent, acting
in accordance with the applicable Senior Obligations Security Documents, shall
be entitled to take any such actions or exercise any such remedies.
Notwithstanding the foregoing, any Junior Collateral Agent may, subject to
Section 2.05, take all such actions as it shall deem necessary to continue the
perfection of the Junior Liens on any Junior Obligations Collateral.
SECTION 2.03. No Duties of Senior Collateral Agents. Each Junior
Obligations Secured Party acknowledges and agrees that no Senior Collateral
Agent or other Senior Obligations Secured Party shall have any duties or other
obligations to such Junior Obligations Secured Party with respect to any Senior
Obligations Collateral, other
11
than to transfer to the Junior Collateral Agents any proceeds of any such
Collateral that constitutes Junior Obligations Collateral remaining in its
possession following any sale, transfer or other disposition of such Collateral,
the payment and satisfaction in full of the Senior Obligations secured thereby
and the termination of any commitment to extend credit that would constitute
Senior Obligations secured thereby, or, if any Senior Collateral Agent shall be
in possession of all or any part of such Collateral after such payment and
satisfaction in full and termination, such Collateral or any part thereof
remaining, in each case without representation or warranty on the part of such
Senior Collateral Agent or any Senior Obligations Secured Party (it being
understood that nothing herein shall prohibit any Senior Collateral Agent from
transferring Collateral or proceeds of Collateral to the holders of other Senior
Obligations secured by such Collateral or to another Senior Collateral Agent
acting on their behalf to the extent it is required to do so under the terms of
any agreement). In furtherance of the foregoing, each Junior Obligations Secured
Party acknowledges and agrees that until the Senior Obligations secured by any
Collateral shall have been paid and satisfied in full and any commitment to
extend credit that would constitute Senior Obligations secured thereby shall
have been terminated, the applicable Senior Collateral Agents shall be entitled,
for the benefit of the holders of such Senior Obligations, to sell, transfer or
otherwise dispose of or deal with such Collateral as provided herein and in the
Credit Facilities Security Documents or the Designated Senior Obligations
Security Documents, as the case may be, without regard to any Junior Lien or any
rights to which the holders of the Junior Obligations would otherwise be
entitled as a result of such Junior Lien. Without limiting the foregoing, each
Junior Obligations Secured Party agrees that no Senior Collateral Agent or other
Senior Obligations Secured Party shall have any duty or obligation first to
marshall or realize upon any type of Collateral (or any other collateral
securing the Senior Obligations), or to sell, dispose of or otherwise liquidate
all or any portion of the Collateral (or any other collateral securing the
Senior Obligations), in any manner that would maximize the return to the Junior
Obligations Secured Parties, notwithstanding that the order and timing of any
such realization, sale, disposition or liquidation may affect the amount of
proceeds actually received by the Junior Obligations Secured Parties from such
realization, sale, disposition or liquidation. Each of the Junior Obligations
Secured Parties waives any claim such Junior Obligations Secured Party may now
or hereafter have against any Senior Collateral Agent or other Senior
Obligations Secured Party (or their representatives) arising out of (i) any
actions which any Senior Collateral Agent or the Senior Obligations Secured
Parties take or omit to take (including, without limitation, actions with
respect to the creation, perfection or continuation of Liens on any Collateral,
actions with respect to the foreclosure upon, sale, release or depreciation of,
or failure to realize upon, any of the Collateral and actions with respect to
the collection of any claim for all or any part of the Senior Obligations from
any account debtor, guarantor or any other party) in accordance with the
respective Senior Obligations Security Documents or any other agreement related
thereto or to the collection of the Senior Obligations or the valuation, use,
protection or release of any security for the Senior Obligations, (ii) any
election by any Senior Collateral Agent or Senior Obligations Secured Parties,
in any proceeding instituted under the Bankruptcy Code, of the application of
Section 1111(b) of the Bankruptcy Code and/or (iii) any borrowing of any
12
Grantor as debtor-in-possession, or any related grant of a security interest or
administrative expense priority under Section 364 of the Bankruptcy Code.
SECTION 2.04. No Interference; Payment Over; Reinstatement. (a) Each
Junior Obligations Secured Party agrees that (i) it will not take or cause to be
taken any action the purpose or effect of which is, or could be, to make any
Junior Lien pari passu with, or to give such Junior Obligations Secured Party
any preference or priority relative to, any Senior Lien with respect to the
Collateral subject to such Junior Lien or any part thereof, (ii) it will not
challenge or question in any proceeding the validity or enforceability of any
Senior Obligations or Senior Obligations Security Document, or the validity,
attachment, perfection or priority of any Senior Lien, or the validity or
enforceability of the priorities, rights or duties established by or other
provisions of this Agreement, (iii) it will not interfere, hinder or delay, in
any manner, whether by judicial proceedings or otherwise, any sale, transfer or
other disposition of the Collateral subject to such Junior Lien by any holders
of Senior Obligations secured by such Collateral or any Senior Collateral Agent
acting on their behalf; provided that nothing in this clause shall prevent any
Junior Obligations Secured Party from objecting to or otherwise opposing any
sale, transfer or other disposition of Collateral submitted to a bankruptcy
court for approval in a case under the Bankruptcy Code in which the debtor is a
Grantor, (iv) it shall have no right to (A) direct any Senior Collateral Agent
or any holder of Senior Obligations to exercise any right, remedy or power with
respect to the Collateral subject to any Junior Lien or (B) consent to the
exercise by any Senior Collateral Agent or any holder of Senior Obligations of
any right, remedy or power with respect to the Collateral subject to any Junior
Lien, (v) it will not institute any suit or assert in any suit, bankruptcy,
insolvency or other proceeding any claim against any Senior Collateral Agent or
any holder of Senior Obligations seeking damages from or other relief by way of
specific performance, instructions or otherwise with respect to, and neither any
Senior Collateral Agent nor any holder of Senior Obligations shall be liable
for, any action taken or omitted to be taken by such Senior Collateral Agent or
any such holder of Senior Obligations with respect to any Collateral securing
such Senior Obligations that is subject to any Junior Lien; provided that
nothing in this clause shall prevent any Junior Obligations Secured Party from
asserting or seeking to enforce any provision of this Agreement, (vi) it will
not seek, and hereby waives any right, to have any Senior Obligations Collateral
subject to any Junior Lien or any part thereof marshaled upon any foreclosure or
other disposition of such Collateral and (vii) it will not attempt, directly or
indirectly, whether by judicial proceedings or otherwise, to challenge the
enforceability of any provision of this Agreement.
(b) Each Junior Collateral Agent and each other Junior Obligations
Secured Party hereby agrees that if it shall obtain possession of any Senior
Obligations Collateral, or shall realize any proceeds or payment in respect of
any such Collateral, whether pursuant to any Junior Obligations Security
Document or by the exercise of any rights available to it under applicable law
or in any bankruptcy, insolvency or similar proceeding or otherwise, at any time
when any Senior Obligations secured or intended to be secured by such Collateral
shall remain outstanding or any commitment to extend credit that would
constitute Senior Obligations secured or intended to be secured by such Senior
Lien shall remain in effect, then it shall hold such Collateral, proceeds or
payment
13
in trust for the applicable Senior Obligations Secured Parties and transfer such
Collateral, proceeds or payment, as the case may be, to the applicable Senior
Collateral Agent (it being agreed that if there is more than one applicable
Senior Obligations Collateral Agent, such Collateral, proceeds or payment shall
be distributed in accordance with the relative priorities of the Liens of such
Senior Collateral Agents on the relevant Collateral, proceeds or payment). Each
Junior Obligations Secured Party agrees that if, at any time, all or part of any
payment with respect to any Senior Obligations previously made shall be
rescinded for any reason whatsoever, such Junior Obligations Secured Party shall
promptly pay over to the applicable Senior Collateral Agent any payment received
by it in respect of any Collateral subject to any Senior Lien securing such
Senior Obligations and shall promptly turn any Collateral subject to any such
Senior Lien then held by it over to the applicable Senior Collateral Agent, and
the provisions set forth in this Agreement shall be reinstated as if such
payment had not been made, until the payment and satisfaction in full of the
applicable Senior Obligations.
SECTION 2.05. Automatic Release of Junior Liens. Each Junior
Collateral Agent and each other Junior Obligations Secured Party agrees that, in
the event of a sale, transfer or other disposition of Senior Obligations
Collateral subject to any Junior Lien, such Junior Lien on such Collateral shall
terminate and be released automatically and without further action if the
applicable Senior Liens on such Collateral are released. Each Junior Collateral
Agent agrees to execute and deliver all such releases and other instruments as
shall reasonably be requested by any applicable Senior Collateral Agent to
evidence and confirm any release of Junior Obligations Collateral provided for
in this Section.
SECTION 2.06. Certain Agreements With Respect to Bankruptcy or
Insolvency Proceedings. In the event a proceeding under the Bankruptcy Code or
any other Federal, state or foreign bankruptcy, insolvency, receivership or
similar law shall be commenced by or against any Grantor, each Junior Collateral
Agent and the other Junior Obligations Secured Parties shall not, so long as any
Senior Obligations are outstanding, (a) seek in respect of any part of the
Collateral or proceeds thereof or any Lien which may exist thereon any relief
from or modification of the automatic stay as provided in Section 362 of the
Bankruptcy Code or seek or accept any form of adequate protection under either
or both of Sections 362 and 363 of the Bankruptcy Code with respect thereto
except replacement liens junior to the Senior Liens, the accrual (but not the
current payment) of interest and the current payment of out-of-pocket expenses,
including fees and disbursements of counsel and other professional advisors,
incurred by the Junior Collateral Agents (which the Junior Obligations Secured
Parties agree will constitute adequate protection of their claims and
interests), (b) oppose or object to any adequate protection sought by or granted
to any Senior Obligations Secured Party in connection with the use of cash
collateral or post-petition financing under Section 362, 363 or 364 of the
Bankruptcy Code, (c) oppose or object to the use of cash collateral by a
Grantor, unless the Designated Lenders, or a Representative authorized by the
Designated Lenders, shall have opposed or objected to such use of cash
collateral, (d) oppose or object to any post-petition financing (including any
debtor-in-possession financing) provided by any of the Senior Obligations
Secured Parties or provided by a third party pursuant to Section 364 of the
Bankruptcy Code (including on a priming basis), unless
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the Designated Lenders, or a Representative authorized by the Designated
Lenders, shall have opposed or objected to such post-petition financing, (e)
oppose or object to the determination of the extent of any Liens held by any of
the Senior Obligations Secured Parties or the value of any claims of Senior
Obligations Secured Parties under Section 506(a) of the Bankruptcy Code, or (f)
oppose or object to the payment of interest and expenses as provided under
Sections 506(b) and (c) of the Bankruptcy Code to any Senior Obligations Secured
Parties.
SECTION 2.07. Reinstatement. In the event that any of the Senior
Obligations shall be paid in full and such payment or any part thereof shall
subsequently, for whatever reason (including, but not limited to, an order or
judgment for disgorgement of a preference under the Bankruptcy Code, or any
similar law, or the settlement of any claim in respect thereof), be required to
be returned or repaid, the terms and conditions of this Article II shall be
fully applicable thereto until all such Senior Obligations shall again have been
paid in full in cash.
ARTICLE III
Pari Passu Status of Junior Liens and European Facilities US Liens
SECTION 3.01. Equal Priority of Junior Liens and European Facilities
US Liens. (a) Subject to Section 3.04, all Junior Liens and European Facilities
US Liens in respect of any Collateral are expressly agreed to be equal in right,
priority, operation and effect, notwithstanding anything contained in this
Agreement, the Initial Junior Indebtedness Governing Document, any Designated
Junior Obligations Governing Document, any Junior Obligations Security Document
or any other agreement or instrument to the contrary, and irrespective of the
time, order or method of creation, attachment or perfection of such Junior Liens
and European Facilities US Liens or any defect or deficiency or alleged defect
or deficiency in any of the foregoing.
(b) It is acknowledged that (i) the aggregate amount of the Junior
Obligations and European Facilities Obligations may be increased from time to
time (subject to the limitations contained in the Credit Agreements, the Initial
Junior Indebtedness Governing Document, the Designated Junior Obligations
Governing Documents and other agreements and instruments to which the Company
and its subsidiaries are party), (ii) a portion of the European Facilities
Obligations and Designated Junior Obligations consists or may consist of
Indebtedness that is revolving in nature, and the amount thereof that may be
outstanding at any time or from time to time may be increased or reduced and
subsequently reborrowed and (iii) the Junior Obligations and European Facilities
Obligations may be extended, renewed or otherwise amended or modified, or
secured with additional Collateral, from time to time, all without affecting the
equal priority of the Junior Liens and European Facilities US Liens or the
provisions of this Agreement defining the relative rights of the Junior Secured
Parties and the European Facilities Secured Parties. Subject to Section 3.04,
the equal priority of the Junior Liens and European Facilities US Liens shall
not be altered or otherwise affected by any amendment, modification, supplement,
extension, increase, replacement, renewal, restatement or refinancing of either
the Junior Obligations or the European Facilities
15
Obligations, by the securing of any Junior Obligations or the European
Facilities Obligations with any additional Collateral or guarantees, by the
release of any Collateral or Guarantees securing any Junior Obligations or the
European Facilities Obligations or by any action that any Collateral Agent or
Secured Party may take or fail to take in respect of any Collateral.
(c) It is further acknowledged (i) that the Master Guarantee and
Collateral Agreement contains provisions subordinating the European Facilities
US Liens to the Senior Liens securing the US Facilities Obligations and (ii)
that the European Facilities Secured Parties and the holders of other Senior
Obligations of one or more classes may from time to time hereafter enter into
agreements establishing the relative priorities of the European Facilities
Obligations and such classes of other Senior Obligations or of the Liens
securing the same. It is agreed that the relative priorities of the European
Facilities Obligations and the Senior Obligations shall be governed by the
foregoing agreements or, to the extent not determined by such agreements, by
applicable law, and that nothing in this Agreement shall affect such relative
priorities of the European Facilities Obligations and the Senior Obligations of
any class or of the Liens securing any of such obligations. It is further agreed
that no agreements establishing the relative priorities of the European
Facilities Obligations and the Senior Obligations of one or more classes or of
the Liens securing such obligations shall in any way limit or affect the
provisions of this Agreement defining the relative rights of the European
Facilities Secured Parties and the Junior Secured Parties.
(d) It is further acknowledged that the European Facilities
Obligations are secured by Liens on collateral other than the Collateral subject
to the Junior Liens and European Facilities US Liens, including Liens on assets
and properties of European subsidiaries of the Company created by the European
Facilities Security Documents (as defined in the Master Guarantee and Collateral
Agreement). It is agreed that the Credit Facilities Collateral Agent and the
European Facilities Secured Parties will have no obligation to proceed against
any such other collateral securing the European Facilities Obligations or to
exercise any other remedies available to them as a condition to obtaining the
benefits of this Article III, and that any proceeds realized through the
exercise of remedies afforded by the Junior Liens and European Facilities US
Liens will be allocated ratably among the European Facilities Secured Parties
and the Junior Secured Parties as provided in Section 3.02 based on the
respective amounts of the European Facilities Obligations and Junior Obligations
owed to them, notwithstanding that the European Facilities Secured Parties may
have additional collateral or remedies available to them that are not available
to the Junior Secured Parties.
SECTION 3.02. Sharing of Proceeds. In the event that any Junior
Obligations Collateral or proceeds of Junior Obligations Collateral shall be
obtained by any European Facilities Secured Party through the exercise of
remedies afforded by any European Facilities US Lien or otherwise (other than as
a result of any distribution made pursuant to the provisions of this paragraph),
the party obtaining such Collateral or proceeds shall (i) promptly notify each
Junior Collateral Agent (or, in the case of a European Facilities Secured Party
other than the Credit Facilities Collateral Agent, the Credit Facilities
Collateral Agent, which shall promptly notify each Junior Collateral
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Agent) and (ii) in the case of any European Facilities Secured Party other than
the Credit Facilities Collateral Agent, promptly deliver such Collateral or
proceeds to the Credit Facilities Collateral Agent. In the event that any
European Facilities US Collateral or proceeds of European Facilities US
Collateral shall be obtained by any Junior Secured Party through the exercise of
remedies afforded by any Junior Lien or otherwise (other than as a result of any
distribution made pursuant to the provisions of this paragraph), the party
obtaining such proceeds shall (i) promptly notify each Senior Collateral Agent
(or, in the case of a Junior Secured Party other than a Junior Collateral Agent,
the applicable Junior Collateral Agent, which shall promptly notify each Senior
Collateral Agent) and (ii) in the case of any Junior Secured Party other than a
Junior Collateral Agent, promptly deliver such Collateral or proceeds to the
applicable Junior Collateral Agent. Promptly following the delivery of any
notice (and any Collateral or proceeds thereof) as provided in either of the two
preceding sentences, the Credit Facilities Collateral Agent and the Junior
Collateral Agents shall arrange for the division of the Collateral or proceeds
to which such notice relates between the Credit Facilities Collateral Agent and
the Junior Collateral Agents, ratably in accordance with the outstanding amounts
of the European Facilities Obligations and the Junior Secured Obligations
secured thereby, respectively (as such outstanding amounts shall be certified by
the applicable Collateral Agents), and the Credit Facilities Collateral Agent
and each Junior Collateral Agent will distribute the Collateral or proceeds
received by it pursuant to such division among the European Facilities Secured
Parties or the applicable Junior Secured Parties, as the case may be, and, if
applicable, to the Company or the Grantors, in accordance with the Credit
Facilities Security Documents or the Junior Security Documents, respectively.
Notwithstanding the foregoing, (a) if any Collateral received by any European
Facilities Secured Party or Junior Secured Party as provided in either of the
first two sentences of this paragraph shall consist of assets other than cash,
the Credit Facilities Collateral Agent and the Junior Collateral Agents may make
such arrangements as they shall agree to be reasonable for the holding of such
Collateral pending its liquidation or distribution, and (b) neither the Company
nor any Grantor consents to any such sharing of proceeds that were obtained in
violation of any Credit Facilities Security Document or Junior Obligations
Security Document or are required to be returned to the Company or any Grantor
under the provisions of any Credit Facilities Security Document or Junior
Obligations Security Document.
SECTION 3.03. Rights and Obligations Subject to Article II.
Notwithstanding any other provision contained herein, the rights and obligations
of the European Facilities Secured Parties and the Junior Secured Parties under
this Article III shall in all respects be subject to the provisions of Article
II of this Agreement.
SECTION 3.04. Designation of European Facilities Obligations as
Designated Senior Obligations. Notwithstanding any of the foregoing provisions
of this Article III, if any European Facilities Obligations shall at any time be
designated as Designated Senior Obligations in compliance with Section 4.01
(including the requirement of Section 4.01 that such designation shall not
violate or result in a default under any provision of the Initial Junior
Indebtedness Governing Document or any existing Designated Junior Obligations
Governing Document), then (a) such European Facilities Obligations shall for all
purposes of this Agreement constitute Senior
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Obligations and the European Facilities US Liens securing such European
Facilities Obligations shall for all purposes of this Agreement constitute
Senior Liens, (b) the foregoing provisions of this Article III shall no longer
be applicable to such European Facilities Obligations or European Facilities US
Liens and (c) the provisions of Article II shall govern the relative priorities
and rights of such European Facilities Obligations, the related European
Facilities US Liens, the Junior Obligations and the Junior Liens.
ARTICLE IV
Designated Senior Obligations and Designated Junior Obligations
SECTION 4.01. Designation. The Company may from time to time,
subject to any limitations contained in the Credit Agreements, any existing
Designated Senior Obligations Governing Documents, the Initial Junior
Indebtedness Governing Document and any existing Designated Junior Obligations
Governing Documents, designate additional Indebtedness and related obligations
that are, or are to be, secured by Liens on any assets or properties of the
Company or any of its subsidiaries as Designated Senior Obligations or
Designated Junior Obligations by delivering to each Collateral Agent a notice:
(i) describing the obligations being designated as
Designated Senior Obligations or Designated Junior Obligations, and including a
statement of the maximum aggregate outstanding principal amount of such
obligations;
(ii) listing the Designated Senior Obligations Governing
Documents or Designated Junior Obligations Governing Documents under which such
Designated Senior Obligations or Designated Junior Obligations are issued or
incurred and the Designated Senior Obligations Security Documents or Designated
Junior Obligations Security Documents securing such Designated Senior
Obligations or Designated Junior Obligations, and attaching copies of such
Designated Senior Obligations Governing Documents and Designated Senior
Obligations Security Documents or such Designated Junior Obligations Governing
Documents and Designated Junior Obligations Security Documents;
(iii) identifying the Designated Senior Obligations Collateral
Agent or Designated Junior Obligations Collateral Agent with respect to such
Designated Senior Obligations or Designated Junior Obligations, and any other
Representative of the holders of such Designated Senior Obligations or
Designated Junior Obligations;
(iv) certifying that the incurrence of such Designated Senior
Obligations or Designated Junior Obligations, the creation of the Liens securing
such Designated Senior Obligations or Designated Junior Obligations and the
designation of such Designated Senior Obligations or Designated Junior
Obligations as Designated Senior Obligations or Designated Junior Obligations
hereunder do not violate or result in a default under any provision of any
Credit Agreement, any existing Designated Senior Obligations Governing Document,
the Initial Junior Indebtedness Governing Document or any existing Designated
Junior Obligations Governing Document;
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(v) in the case of any Designated Junior Obligations,
certifying that the Designated Junior Obligations Governing Document governing
such Designated Junior Obligations and each related principal Designated Junior
Obligations Security Document (other than any account control or "lock-box"
agreement) contains a provision substantially to the effect set forth in Annex
II hereto under which the applicable Designated Junior Obligations Secured
Parties agree, or are deemed to agree, to be bound by the provisions of this
Agreement; and
(vi) attaching a fully executed Accession Agreement under
which the Designated Senior Obligations Collateral Agent or Designated Junior
Obligations Collateral Agent with respect to such Designated Senior Obligations
or Designated Junior Obligations shall become a party to and a Collateral Agent
under this Agreement (unless such Designated Senior Obligations Collateral Agent
or Designated Junior Obligations Collateral Agent shall already be a party
hereto).
Upon the delivery of such notice and the related attachments as provided above,
the obligations designated in such notice shall become Designated Senior
Obligations or Designated Junior Obligations, as the case may be, for all
purposes of this Agreement. Notwithstanding any other provision contained in
this Section or elsewhere in this Agreement, (A) no obligation shall constitute
a Designated Senior Obligation if the incurrence of such obligation, the
creation of the Liens securing such obligation or the designation of such
obligation as a Designated Senior Obligation hereunder would violate or result
in a default under any provision of any Credit Agreement, any existing
Designated Senior Obligations Governing Document, the Initial Junior
Indebtedness Governing Document or any existing Designated Junior Obligations
Governing Document, and (B) no Designated Junior Obligation shall be entitled to
the benefits of Article III if the incurrence of such obligation, the creation
of the Liens securing such obligation or the designation of such obligation as a
Designated Junior Obligation hereunder would violate or result in a default
under any provision of the Initial Junior Indebtedness Governing Document or any
existing Designated Junior Obligations Governing Document (it being agreed that
any such Designated Junior Obligation and the related Designated Junior
Obligations Secured Parties shall nevertheless be subject to Article II and
bound by the obligations of Junior Obligations Secured Parties hereunder).
ARTICLE V
Sub-Agency for Perfection of Certain Security Interests
Each Senior Collateral Agent acknowledges and agrees that if it
shall at any time hold a Senior Lien (or, in the case of the Credit Facilities
Collateral Agent, a European Facilities US Lien) on any Junior Obligations
Collateral that can be perfected by the possession or control of such Collateral
or of any account in which such Collateral is held, and if such Collateral or
any such account is in fact in the possession or under the control of such
Senior Collateral Agent, such Senior Collateral Agent will serve as sub-agent
for each Junior Collateral Agent for the sole purpose of perfecting the Junior
Lien of such Junior Collateral Agent in such Collateral and shall have
possession or control of such Collateral as agent on behalf of each Junior
Collateral Agent. It is agreed that the
19
obligations of the applicable Senior Collateral Agent and the rights of the
Junior Collateral Agents and the other Junior Obligations Secured Parties in
connection with any such sub-agency arrangement will be in all respects subject
to the provisions of Article II. The Senior Collateral Agent will be deemed to
make no representation as to the adequacy of the steps taken by it to perfect
the Junior Lien on any such Collateral and shall have no responsibility to any
Junior Collateral Agent or other Junior Obligations Secured Party for such
perfection, it being understood that the sole purpose of this Article is to
enable the Junior Obligations Secured Parties to obtain a perfected Junior Lien
in such Collateral to the extent that such perfection results from the
possession or control of such Collateral or any such account by the Senior
Collateral Agent. At such time as the Senior Obligations secured by the Senior
Lien of such Senior Collateral Agent (and, in the case of the Credit Facilities
Collateral Agent, the European Facilities Obligations secured by the European
Facilities US Liens of such Collateral Agent) shall have been paid and satisfied
in full and any commitment to extend credit that would constitute such Senior
Obligations (or European Facilities Obligations) shall have been terminated,
such Senior Collateral Agent shall take all such actions in its power as shall
reasonably be requested by the applicable Junior Collateral Agents to transfer
possession of such Collateral to the Junior Collateral Agents or to transfer
direct control of such Collateral or any such account to the Junior Collateral
Agents; provided, that if any such Collateral or any such account shall be
subject to any other Senior Lien, then such Senior Collateral Agent shall
instead transfer possession of such Collateral to the Senior Collateral Agent
holding such Senior Lien or take such actions in its power as shall reasonably
be requested to transfer direct control of such Collateral or any such account
to the Senior Collateral Agent holding such Senior Lien. Each Junior Collateral
Agent agrees that if it shall obtain possession or direct control of any
Collateral or any account pursuant to the foregoing provisions and such
Collateral or account shall thereafter become subject to any Senior Lien, it
will take all such actions in its power as shall reasonably be requested by the
Senior Collateral Agent holding such Senior Lien to transfer possession of such
Collateral to such Senior Collateral Agent or take such actions in its power as
shall reasonably be requested to transfer direct control of such Collateral or
any such account to the Senior Collateral Agent holding such Senior Lien.
ARTICLE VI
Existence and Amounts of Liens and Obligations
Whenever any Collateral Agent shall be required, in connection with
the exercise of its rights or the performance of its obligations hereunder, to
determine the existence or amount of any Senior Obligations, European Facilities
Obligations or Junior Obligations, or the existence of any Lien securing any
such obligations, or the Collateral subject to any such Lien, it may request
that such information be furnished to it in writing by the Representative of
such Senior Obligations, European Facilities Obligations or Junior Obligations
and shall be entitled to make such determination on the basis of the information
so furnished; provided, however, that if, notwithstanding the request of such
Collateral Agent, such Representative shall fail or refuse reasonably promptly
to provide the requested information, such Collateral Agent shall be entitled to
determine such existence or amount by such method as it may, in the exercise of
its good faith judgment,
20
determine, including by reliance upon a certificate of the Company. Each
Collateral Agent may rely conclusively, and shall be fully protected in so
relying, on any determination made by it in accordance with the provisions of
the preceding sentence (or as otherwise directed by a court of competent
jurisdiction) and shall have no liability to any Secured Party or any affiliate
thereof as a result of such determination.
ARTICLE VII
Consent of Grantors
Each Grantor hereby consents to the provisions of this Agreement and
the intercreditor arrangements provided for herein and agrees that the
obligations of the Grantors under the Senior Obligations Security Documents will
in no way be diminished or otherwise affected by such provisions or
arrangements.
ARTICLE VIII
Representations and Warranties
SECTION 8.01. Representations and Warranties of Each Party. Each
Secured Party hereto represents and warrants to the other Secured Parties hereto
as follows:
(a) Such party is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization and has all
requisite power and authority to enter into and perform its obligations under
this Agreement.
(b) This Agreement has been duly executed and delivered by such
party and constitutes a legal, valid and binding obligation of such party,
enforceable in accordance with its terms.
(c) The execution, delivery and performance by such party of this
Agreement (i) do not require any consent or approval of, registration or filing
with or any other action by any governmental authority and (ii) will not violate
any applicable law or regulation or the charter, by-laws or other organizational
documents of such party or any order of any governmental authority or any
indenture, agreement or other instrument binding upon such party.
SECTION 8.02. Representations and Warranties of Each Collateral
Agent. Each Collateral Agent represents and warrants to the other parties hereto
that it has been authorized and directed by the Secured Parties for which it
serves as collateral agent (or, in the case of the Credit Facilities Collateral
Agent, by the Majority Lenders under and as defined in each Credit Agreement) to
enter into this Agreement.
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ARTICLE IX
Miscellaneous
SECTION 9.01. Notices. All notices and other communications provided
for herein shall be in writing and shall be delivered by hand or overnight
courier service, mailed by certified or registered mail or sent by telecopy, as
follows:
(a) if to the Credit Facilities Collateral Agent, to JPMorgan Chase
Bank, Loan & Agency Services Group, 1111 Fannin, 10th Floor, Houston, Texas
77002, Attention of Debbie Meche and Cliff Trapani (Telecopy No. (713) 750-2938,
with a copy to JPMorgan Chase Bank, 270 Park Avenue, New York, NY 10017,
Attention of Robert Kellas (Telecopy No. (212) 270-3089);
(b) if to the Initial Junior Indebtedness Collateral Agent, to
Wilmington Trust Company, Rodney Square North, 1100 North Market Street,
Wilmington, DE 19890-0001, attention of the Corporate Trust Administration
(Telecopy No. (302) 636-4145);
(c) if to any Designated Senior Obligations Collateral Agent or
Designated Junior Obligations Collateral Agent, to it at the address or telecopy
number specified in the applicable Accession Agreement; and
(d) if to the Company, to it at 1144 East Market Street, Akron,
Ohio, 44316-0001, attention of the Treasurer (Telecopy No. (330) 796-6502 or
(330) 796-8836).
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto (and for this
purpose a notice to the Company shall be deemed to be a notice to each Grantor).
All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on the
date of receipt.
SECTION 9.02. Waivers; Amendment. (a) No failure or delay on the
part of any party hereto in exercising any right or power hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right or power, or any abandonment or discontinuance of steps to enforce
such a right or power, preclude any other or further exercise thereof or the
exercise of any other right or power. The rights and remedies of the parties
hereto are cumulative and are not exclusive of any rights or remedies that they
would otherwise have. No waiver of any provision of this Agreement or consent to
any departure by any party therefrom shall in any event be effective unless the
same shall be permitted by paragraph (b) of this Section, and then such waiver
or consent shall be effective only in the specific instance and for the purpose
for which given. No notice or demand on any party hereto in any case shall
entitle such party to any other or further notice or demand in similar or other
circumstances.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered
22
into by each Collateral Agent, the Company and each Grantor with respect to
which such waiver, amendment or modification is to apply.
SECTION 9.03. Parties in Interest. This Agreement shall be binding
upon and inure to the benefit of the parties hereto (including any Designated
Senior Obligations Collateral Agents or Designated Junior Obligations Collateral
Agents becoming parties hereto as provided in Section 9.04) and their respective
successors and assigns, as well as the other Credit Facilities Secured Parties,
Initial Junior Indebtedness Secured Parties, Designated Senior Obligations
Secured Parties and Designated Junior Obligations Secured Parties, all of whom
are intended to be bound by, and to be third party beneficiaries of, this
Agreement.
SECTION 9.04. Accession of Designated Senior Obligations Collateral
Agents and Designated Junior Obligations Collateral Agents. Upon the execution
and delivery by the collateral agent or similar Representative of any Designated
Senior Obligations or Designated Junior Obligations of an Accession Agreement as
provided in Article IV, such collateral agent or Representative shall become a
party to this Agreement as the Designated Senior Obligations Collateral Agent
for such Designated Senior Obligations or the Designated Junior Obligations
Collateral Agent for such Designated Junior Obligations, as the case may be, and
shall thenceforth have all the rights and obligations applicable to it in such
capacity hereunder.
SECTION 9.05. Survival of Agreement. All covenants, agreements,
representations and warranties made by any party in this Agreement shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement.
SECTION 9.06. Counterparts. This Agreement may be executed in
counterparts, each of which shall constitute an original but all of which when
taken together shall constitute a single contract. Delivery of an executed
signature page to this Agreement by facsimile transmission shall be as effective
as delivery of a manually signed counterpart of this Agreement.
SECTION 9.07. Severability. Any provision of this Agreement held to
be invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction. The parties shall endeavor in good-faith negotiations to replace
the invalid, illegal or unenforceable provisions with valid provisions the
economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
SECTION 9.08. Governing Law; Jurisdiction; Consent to Service of
Process. (a) This Agreement shall be construed in accordance with and governed
by the law of the State of New York.
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(b) Each party hereto hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of the
Supreme Court of the State of New York sitting in New York County and of the
United States District Court of the Southern District of New York, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement, or for recognition or enforcement of any judgment,
and each of the parties hereto hereby irrevocably and unconditionally agrees
that all claims in respect of any such action or proceeding may be heard and
determined in such New York State or, to the extent permitted by law, in such
Federal court. Each of the parties hereto agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that any party hereto may
otherwise have to bring any action or proceeding relating to this Agreement in
the courts of any jurisdiction.
(c) Each party hereto hereby irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, any objection which
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement in any court referred to
in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 9.01. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
SECTION 9.09. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT. EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 9.10. Specific Performance. Each party hereto (a) agrees
that any other party hereto may demand specific performance of this Agreement
and (b) irrevocably waives any defense based on the adequacy of a remedy at law,
and any other defense, that might be asserted in opposition to the awarding of
specific performance in any action that may be brought by any other party
hereto.
24
SECTION 9.11. Headings. Article and Section headings used herein are
for convenience of reference only, are not part of this Agreement and are not to
affect the construction of, or to be taken into consideration in interpreting,
this Agreement.
25
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
JPMORGAN CHASE BANK, as Credit
Facilities Collateral Agent,
By
/s/ Robert P. Kellas
----------------------------
Name: Robert P. Kellas
Title: Vice President
26
WILMINGTON TRUST COMPANY, as
Initial Junior Indebtedness Collateral Agent,
By
/s/ James A. Hanley
--------------------------------------
Name: James A. Hanley
Title: Senior Financial Services Officer
27
THE GOODYEAR TIRE & RUBBER
COMPANY
By
/s/ D. R. Wells
----------------------------
Name: D. R. Wells
Title: Vice President and Treasurer
28
ALLIED TIRE SALES, INC.,
By
/s/ D. R. Wells
-----------------------------
Name: D. R. Wells
Title: Vice President
BELT CONCEPTS OF AMERICA, INC.,
By
/s/ D. R. Wells
------------------------------
Name: D. R. Wells
Title: Vice President
COSMOFLEX, INC.,
By
/s/ D. R. Wells
------------------------------
Name: D. R. Wells
Title: Vice President
DAPPER TIRE CO, INC.,
By
/s/ D. R. Wells
------------------------------
Name: D. R. Wells
Title: Vice President
DIVESTED COMPANIES HOLDING
COMPANY,
By
/s/ Randall M. Loyd
------------------------------
Name: Randall M. Loyd
Title: Vice President
By
/s/ Ronald J. Carr
------------------------------
Name: Ronald J. Carr
Title: Vice President
29
DIVESTED LITCHFIELD PARK
PROPERTIES, INC.,
By
/s/ Randall M. Loyd
------------------------------
Name: Randall M. Loyd
Title: Vice President
By
/s/ Ronald J. Carr
------------------------------
Name: Ronald J. Carr
Title: Vice President
GOODYEAR FARMS, INC.,
By
/s/ D. R. Wells
------------------------------
Name: D. R. Wells
Title: Vice President
GOODYEAR INTERNATIONAL
CORPORATION,
By
/s/ D. R. Wells
------------------------------
Name: D. R. Wells
Title: Vice President
THE KELLY-SPRINGFIELD TIRE
CORPORATION,
By
/s/ D. R. Wells
------------------------------
Name: D. R. Wells
Title: Vice President
30
WINGFOOT VENTURES EIGHT, INC.,
By
/s/ Ronald J. Carr
------------------------------
Name: Ronald J. Carr
Title: Vice President
WINGFOOT COMMERCIAL TIRE
SYSTEMS, LLC,
By
/s/ D. R. Wells
------------------------------
Name: D. R. Wells
Title: Vice President
GOODYEAR CANADA INC.,
By
/s/ Linda Alexander
------------------------------
Name: Linda Alexander
Title: Vice President
By
/s/ D. S. Hamilton
------------------------------
Name: D. S. Hamilton
Title: Secretary
ANNEX I
[Form of]
ACCESSION AGREEMENT
AGREEMENT dated as of [-], among [NAME OF
ACCEDING DESIGNATED OBLIGATIONS COLLATERAL AGENT]
(the "Acceding Designated [Senior] [Junior]
Obligations Collateral Agent") and THE GOODYEAR TIRE
& RUBBER COMPANY, an Ohio corporation (the
"Company").
A. Reference is made to the Lien Subordination and Intercreditor
Agreement dated as of March 12, 2004 (the "Intercreditor Agreement"), among the
Credit Facilities Collateral Agent, the Initial Junior Indebtedness Collateral
Agent, the Company, the Subsidiary Parties and [any Designated Senior
Obligations Collateral Agent or Designated Junior Obligations Collateral Agent
that has heretofore become a party thereto by way of accession].
B. Capitalized terms used and not otherwise defined herein shall
have the meanings assigned to them in the Intercreditor Agreement.
C. The Company proposes to issue or incur [describe Designated
[Senior] [Junior] Obligations] (the "Acceding Obligations"), and the Acceding
Designated [Senior] [Junior] Obligations Collateral Agent will serve as
collateral agent for the holders of the Acceding Obligations. The Acceding
Obligations are being designated by the Company as Designated [Senior] [Junior]
Obligations in accordance with Section 4.01 of the Intercreditor Agreement.
D. The Acceding Designated [Senior] [Junior] Obligations Collateral
Agent wishes to become a party to the Intercreditor Agreement and to acquire and
undertake, for itself and on behalf of the holders from time to time of the
[Designated [Senior] [Junior] Obligations] the rights and obligations of a
Designated [Senior] [Junior] Obligations Collateral Agent thereunder. The
Acceding Designated [Senior] [Junior] Obligations Collateral Agent is entering
into this Agreement in accordance with the provisions of the Intercreditor
Agreement in order to become a Designated [Senior] [Junior] Obligations
Collateral Agent thereunder.
Accordingly, the Acceding Designated [Senior] [Junior] Obligations
Collateral Agent and the Company agree as follows, for the benefit of the
Acceding Designated [Senior] [Junior] Obligations Collateral Agent, the Company
and each other party to the Intercreditor Agreement:
SECTION 1. Accession to the Intercreditor Agreement. The Acceding
Designated [Senior] [Junior] Obligations Collateral Agent (a) hereby accedes and
becomes a party to the Intercreditor Agreement as Designated [Senior] [Junior]
Obligations Collateral Agent for the holders from time to time of the
2
Acceding Obligations, (b) agrees, for itself and on behalf of the holders from
time to time of the Acceding Obligations, to all the terms and provisions of the
Intercreditor Agreement and (c) shall have all the rights and obligations of a
Designated [Senior] [Junior] Obligations Collateral Agent under the
Intercreditor Agreement.
SECTION 2. Representations, Warranties and Acknowledgement of
Acceding Designated [Senior] [Junior] Obligations Collateral Agent. The Acceding
Designated [Senior] [Junior] Obligations Collateral Agent represents and
warrants that it has the power and authority to enter into this Agreement and
has been authorized to do so by the holders of the Acceding Obligations. The
Acceding Designated [Senior] [Junior] Obligations Collateral Agent confirms that
it has received a copy of the Intercreditor Agreement as in effect on the date
hereof.
SECTION 3. Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument.
SECTION 4. Benefit of Agreement. THE AGREEMENTS SET FORTH HEREIN OR
UNDERTAKEN PURSUANT HERETO ARE FOR THE BENEFIT OF, AND MAY BE ENFORCED BY, ANY
PARTY TO THE INTERCREDITOR AGREEMENT.
SECTION 5. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 6. Severability. In case any one or more of the provisions
contained in this Agreement should be held invalid, illegal or unenforceable in
any respect, none of the parties hereto shall be required to comply with such
provision for so long as such provision is held to be invalid, illegal or
unenforceable, but the validity, legality and enforceability of the remaining
provisions contained herein and in the Intercreditor Agreement shall not in any
way be affected or impaired. The parties hereto shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to that
of the invalid, illegal or unenforceable provisions.
SECTION 7. Notices. All communications and notices hereunder shall
be in writing and given as provided in Section 9.01 of the Intercreditor
Agreement. All communications and notices hereunder to the Acceding Designated
[Senior] [Junior] Obligations Collateral Agent shall be given to it at the
address set forth under its signature hereto, which information supplements
Section 9.01 to the Intercreditor Agreement.
3
IN WITNESS WHEREOF, the Acceding Designated [Senior] [Junior]
Obligations Collateral Agent and the Company have duly executed this Agreement
as of the day and year first above written.
[NAME OF ACCEDING DESIGNATED
OBLIGATIONS COLLATERAL AGENT],
as a Designated [Senior] [Junior]
Obligations Collateral Agent
by ______________________________
Name:
Title:
For Notices
Attention of:
Address:
Telecopy No.:
THE GOODYEAR TIRE & RUBBER
COMPANY
By ______________________________
Name:
Title:
ANNEX II
Provision for Designated Junior Obligations Governing Document
REFERENCE IS MADE TO THE LIEN SUBORDINATION AND INTERCREDITOR
AGREEMENT DATED AS OF MARCH 12, 2004, AMONG JPMORGAN CHASE BANK, AS COLLATERAL
AGENT FOR THE CREDIT FACILITIES SECURED PARTIES REFERRED TO THEREIN; WILMINGTON
TRUST COMPANY, AS COLLATERAL AGENT FOR THE INITIAL JUNIOR INDEBTEDNESS SECURED
PARTIES REFERRED TO THEREIN; THE GOODYEAR TIRE & RUBBER COMPANY; THE
SUBSIDIARIES OF THE GOODYEAR TIRE & RUBBER COMPANY NAMED THEREIN; AND THE
DESIGNATED SENIOR OBLIGATIONS COLLATERAL AGENTS AND DESIGNATED JUNIOR
OBLIGATIONS COLLATERAL AGENTS BECOMING PARTIES THERETO FROM TIME TO TIME (THE
"INTERCREDITOR AGREEMENT"). EACH [HOLDER OF DESIGNATED JUNIOR OBLIGATIONS] (A)
[HEREBY CONSENTS][WILL BE DEEMED TO HAVE CONSENTED] TO THE SUBORDINATION OF THE
[LIENS SECURING THE DESIGNATED JUNIOR OBLIGATIONS] ON THE TERMS SET FORTH IN THE
INTERCREDITOR AGREEMENT, (B) [HEREBY AGREES][WILL BE DEEMED TO HAVE AGREED] THAT
IT WILL BE BOUND BY AND WILL TAKE NO ACTIONS CONTRARY TO THE PROVISIONS OF THE
INTERCREDITOR AGREEMENT AND (C) [HEREBY AUTHORIZES AND INSTRUCTS][WILL BE DEEMED
TO HAVE AUTHORIZED AND INSTRUCTED] THE [DESIGNATED JUNIOR OBLIGATIONS COLLATERAL
AGENT] TO ENTER INTO THE INTERCREDITOR AGREEMENT AND TO SUBJECT THE [DESIGNATED
JUNIOR OBLIGATIONS] AND THE [LIENS SECURING THE DESIGNATED JUNIOR OBLIGATIONS]
TO THE PROVISIONS THEREOF. THE FOREGOING PROVISIONS ARE INTENDED AS AN
INDUCEMENT TO THE SENIOR OBLIGATIONS SECURED PARTIES (AS DEFINED IN THE
INTERCREDITOR AGREEMENT) TO EXTEND CREDIT TO THE GOODYEAR TIRE & RUBBER COMPANY
AND ITS SUBSIDIARIES, AND SUCH SENIOR OBLIGATIONS SECURED PARTIES ARE INTENDED
THIRD PARTY BENEFICIARIES OF SUCH PROVISIONS AND THE PROVISIONS OF THE
INTERCREDITOR AGREEMENT.
Provision for Designated Junior Obligations Security Document
REFERENCE IS MADE TO THE LIEN SUBORDINATION AND INTERCREDITOR AGREEMENT DATED AS
OF MARCH 12, 2004, AMONG JPMORGAN CHASE BANK, AS COLLATERAL AGENT FOR THE CREDIT
FACILITIES SECURED PARTIES REFERRED TO THEREIN; WILMINGTON TRUST COMPANY, AS
COLLATERAL AGENT FOR THE INITIAL JUNIOR INDEBTEDNESS SECURED PARTIES REFERRED TO
THEREIN; THE GOODYEAR TIRE & Rubber Company; THE SUBSIDIARIES OF THE GOODYEAR
TIRE & Rubber Company named therein; AND THE DESIGNATED SENIOR OBLIGATIONS
COLLATERAL AGENTS AND DESIGNATED JUNIOR OBLIGATIONS COLLATERAL AGENTS BECOMING
PARTIES THERETO FROM TIME TO TIME (THE "INTERCREDITOR AGREEMENT").
NOTWITHSTANDING ANY OTHER PROVISION CONTAINED HEREIN, THIS AGREEMENT, THE LIENS
CREATED HEREBY AND THE RIGHTS, REMEDIES, DUTIES AND OBLIGATIONS PROVIDED FOR
HEREIN ARE SUBJECT IN ALL RESPECTS TO THE PROVISIONS OF THE INTERCREDITOR
AGREEMENT AND, TO THE EXTENT PROVIDED THEREIN, THE SENIOR OBLIGATIONS SECURITY
DOCUMENTS (AS DEFINED IN THE INTERCREDITOR AGREEMENT). IN THE EVENT OF ANY
CONFLICT OR INCONSISTENCY BETWEEN THE PROVISIONS OF THIS AGREEMENT AND THE
INTERCREDITOR AGREEMENT, THE PROVISIONS OF THE INTERCREDITOR AGREEMENT SHALL
CONTROL.
Exhibit 10.1
Executive Performance Plan
of
The Goodyear Tire & Rubber Company
Effective January 1, 2004
I. PURPOSE
This Executive Performance Plan of The Goodyear Tire & Rubber Company (the
"Plan") is intended to (i) advance the interests of the Company and its
shareholders by strengthening the Company's ability to attract, retain and
reward key personnel and (ii) motivate key personnel to achieve business
objectives established to promote the Company's long term growth,
profitability and success.
II. DEFINITIONS
For purposes of this Plan, each of the following terms has the indicated
meaning:
"Committee" means the Compensation Committee of the Company's Board of
Directors.
"Company" means The Goodyear Tire & Rubber Company, its subsidiaries and
affiliates.
"Grant" means the number of Units granted by the Committee to a
Participant.
"Grant Agreement" means any agreement or other instrument making a Grant
and setting forth the Performance Goals, Performance Measures and
Performance Period related to the Grant and such other terms deemed
necessary or appropriate by the Committee.
"Participant" means any salaried employee of the Company selected by the
Committee to receive a Grant under this Plan.
"Performance Award" means the number of Units included in a Grant
multiplied by the related Unit Value.
"Performance Goals" means one or more targets, goals or levels of
attainment required to be achieved in terms of the specified Performance
Measures during the specified Performance Period, all as determined by the
Committee and set forth in the related Grant Agreement.
"Performance Measures" means one or more of the criteria used by the
Committee to establish and measure attainment of Performance Goals for a
Performance Period.
"Performance Period" means one or more periods of time, which may be of
varying and overlapping duration, as selected by the Committee, during
which attainment of Performance Goals is measured' provided, however, that
no Performance Period may be less than one year in duration.
"Plan" means this Executive Performance Plan of the Company, as then
amended at any time.
"Unit" means one multiple of Unit Value.
"Unit Value" means the amount of the cash value of each Unit granted to a
Participant; Unit Value may vary by Grant or Participant and is based upon
attainment of Performance Goals.
III. THE COMMITTEE
A) The Plan will be administered by the Committee. No member of the
Committee will participate in this Plan. The Committee may take any
action permitted by this Plan at any meeting at which a quorum is
present and which is held upon not less than five days' notice to
each member of the meeting's time, place and purpose. A majority of
the members of the Committee will constitute a quorum, and any act
of a majority of the members present at any meeting at which a
quorum is present will be the act of the Committee. Any one or more
members of the Committee may participate in a meeting by conference
telephone or similar means by which each participant can hear and
speak to each other participant. Participation by any such means
will constitute presence in person at the meeting. The Committee may
take any permitted action by written consent of a majority of its
members, and such action will be as effective as if the action had
been taken by unanimous vote at a meeting duly called and held. The
minutes of each meeting (signed by the Committee's secretary)
evidencing any permitted action, will constitute authority for the
Company to act in accordance therewith. The Company will make Grants
in accordance with the terms and conditions specified by the
Committee, as set forth in the related Grant Agreement.
B) The Committee has full power and authority to administer this Plan
in accordance with its terms, including, but not limited to, the
power to: (i) select Participants; (ii) make Grants; (iii) determine
Unit Value; (iv) establish Performance Goals, Performance Measures
and Performance Periods; (v) change the terms of any Grant
previously made; (vi) guarantee a minimum Unit Value; (vii)
prescribe the terms of any Grant Agreement; (viii) interpret this
Plan and make any determination of fact incident to the operation of
this Plan; (ix) terminate or amend this Plan without stockholder
approval, unless such approval is then required by applicable law or
rule, including without limitation any amendment necessary or
appropriate to comply with the laws of other countries; (x) delegate
to other persons the responsibility for performing administrative or
ministerial acts pursuant to this Plan; (xi) engage the services of
persons and firms, including without limitation banks, legal
advisors, consultants and insurance companies, in connection with
the administration and interpretation of this Plan and (xii) make
all other determinations and take all other actions as the Committee
may deem necessary or advisable for the administration of this Plan.
C) Any determination, decision or action of the Committee in connection
with the construction, interpretation, administration or application
of this Plan, or of any Grant Agreement, shall be final, conclusive
and binding upon a Participant and any person claiming through the
Participant.
IV. ELIGIBILITY AND TERMS
The Committee will select Participants in its sole discretion, subject to
the terms of this Plan. At the time each Grant is made, the Committee will
establish and set forth in a Grant Agreement the amount of the Grant and
the related Performance Measures, Performance Goals and
-2-
Performance Period. At the end of any Performance Period, the Committee
will calculate each Performance Award and advise the Company of the amount
of cash payment to be made to each Participant.
V. PERFORMANCE GOALS, PERFORMANCE MEASURES AND PERFORMANCE PERIODS
Each Grant Agreement will provide that, in order for a Participant to
receive a Performance Award, the Company must achieve specified
Performance Goals over the Performance Period, with attainment of
Performance Goals determined using specific Performance Measures.
Performance Goals and the Performance Period will be established by the
Committee in its sole discretion. The Committee also will establish
Performance Measures for each Performance Period. The Committee may, in
its sole discretion, revise or amend Performance Goals or Performance
Measures at any time prior to distribution of a Performance Award for any
Grant. The Committee may, in its sole discretion, guarantee, eliminate or
reduce the amount of any Performance Award that otherwise would be payable
to a Participant upon attainment of the Performance Goals.
VI. FORM OF GRANTS
Grants may be made on any terms and conditions not inconsistent with this
Plan, and the related Grant Agreement may be in such form, as the
Committee, in its sole discretion, may approve. Subject to the terms of
this Plan, the Committee will, in its sole discretion, determine the
number of Units included in each Grant, and the Committee may impose
different terms and conditions on any particular Grant. The Performance
Goals, Performance Measures and Performance Period applicable to any Grant
shall be set forth in the related Grant Agreement.
VII. PAYMENT OF AWARDS
Payment in settlement of a Performance Award will be made in cash and at
such time or times as the Committee, in its sole discretion, shall
determine.
VIII. DEFERRAL OF PAYMENT
The Committee may, whether at the time of Grant or at anytime thereafter
that is prior to payment or settlement, require a Participant to defer, or
permit (subject to such conditions as the Committee may from time to time
establish) a Participant to elect to defer, receipt of all or any portion
of any payment of cash that would otherwise be due to such Participant in
payment or settlement of any Performance Award. If any such deferral is
required by the Committee (or is elected by the Participant with the
permission of the Committee), the Committee shall establish rules and
procedures for such payment deferrals.
IX. MISCELLANEOUS
A) Withholding Taxes. Each Performance Award\ will be made subject to
any applicable withholding for taxes. The Company may deduct from
any Performance Award any and all federal, state, city, local or
foreign taxes of any kind required by law to be withheld with
respect to such payment and to take such other actions as may be
necessary in the opinion of the Company to satisfy all obligations
for the payment of such taxes.
-3-
B) No Right to Employment. Neither the adoption of this Plan nor the
making of any Grant will confer upon any employee any right to
continued employment with the Company, nor interfere in any way with
the right of the Company to terminate the employment of any employee
at any time, with or without cause, subject to the terms of any
employment agreement or provision of applicable law.
C) Non-Transferability of Grants. No Grant, and no right or interest
therein, shall (i) be assignable, alienable or transferable by any
Participant, except by will or the laws of descent and distribution
or (ii) be subject to any obligation, or the lien or claims of any
creditor, of any Participant or (iii) be subject to any lien,
encumbrance or claim of any person made in respect of or through any
Participant, however arising
D) Unfunded Plan. The Plan will be unfunded, and the Company shall not
be required to segregate any assets that may at any time be
represented by Grants or Performance Awards. Any liability of the
Company to any person with respect to any Performance Award will be
based solely upon any contractual obligation effected pursuant to
this Plan. No such obligation of the Company shall be deemed to be
secured by any pledge of, or other encumbrance on, any property of
the Company.
E) Change in Control. Nothing in this Plan shall prevent or interfere
with any recapitalization or reorganization of the Company or its
merger or consolidation with any other corporation. In any such
case, the recapitalized, reorganized, merged or consolidated company
shall assume the obligations of the Company under this Plan or such
modification hereof as, in the judgment of the Board of Directors,
shall be necessary to adapt it to the changed situation and shall
provide substantially equivalent benefits to each Participant.
F) Engaging in Competition with Company. If a Participant terminates
his or her employment with the Company for any reason whatsoever,
and within eighteen (18) months after the date thereof accepts
employment with any competitor of, or otherwise engages in
competition with, the Company, the Committee, in its sole
discretion, may require such Participant to return, or (if not
received) to forfeit, to the Company the dollar amount of any
Performance Award to which the Participant otherwise would be
entitled with respect to the period to date commencing with the date
that is six months prior to the date of the Participant's
termination of employment with the Company or during such other
period as the Committee may determine.
G) Other Company Benefit and Compensation Programs. Payment of a
Performance Award will not be deemed part of a Participant's
regular, recurring compensation for purposes of any termination
indemnity or severance pay law of any country and will not be
included in, nor have any effect on, the determination of benefits
under any pension or other employee benefit plan or similar
arrangement provided by the Company, unless (i) expressly so
provided by such other plan or arrangement or (ii) the Committee
expressly determines that all or part of the Performance Award
should be included as recurring compensation. No provision of this
Plan may be deemed to prohibit the Company from establishing other
special awards, incentive compensation plans, compensation programs
and other similar arrangements providing for the payment of
performance, incentive or other compensation to employees. Payments
and benefits provided to any employee under any other plan,
including, without limitation, any stock option, stock award,
restricted stock, deferred compensation, savings, retirement or
other benefit plan or arrangement, will be governed solely by the
terms of such other plan.
-4-
H) Grant Agreement. As a condition to receiving a Grant, a Participant
shall enter into a Grant Agreement with the Company in a form
specified by the Committee, agreeing to the terms and conditions of
the Grant and such related matters as the Committee shall, in its
sole discretion, determine.
I) Severability. If any provision of this Plan shall be held to be
invalid or unenforceable for any reason, such invalidity or
unenforceability shall not affect the remaining provisions of this
Plan.
J) Governing Law. The Plan shall be governed by and construed in
accordance with the laws of the State of Ohio.
-5-
Exhibit 10.2
February 3, 2004
Mr. Robert J. Keegan
3015 Round Hill Drive
Akron, Ohio 44333
Dear Bob:
The purpose of this agreement is to supplement and amend the existing
agreement between you and The Goodyear Tire & Rubber Company ("Goodyear" or the
"Company"), dated September 11, 2000 (the "2000 Agreement").
In consideration for our respective promises made herein and the
continuing promises made in the 2000 Agreement, you and Goodyear agree as
follows:
1. Severance Compensation. Subject to the provisions, and upon
compliance with the conditions, specified in this Agreement, upon the
termination of your employment with Goodyear under either of the circumstances
described in subparagraphs (a) or (b) below, Goodyear will pay you, within 60
days of the termination of your employment, a lump sum (net of required
withholdings) equal to (x) two times the sum of your annual base salary and your
target bonus then in effect under the Goodyear Performance Recognition Plan, or
any equivalent successor plan ("PRP") plus (y) the pro rata portion of your
target bonus under Goodyear's PRP for the then current fiscal year, based on the
number of days in that fiscal year that have elapsed up to the date of your
termination.
(a) Termination of your employment by Goodyear without Cause. For this
purpose, "Cause" shall mean:
(i) a significant violation by you of Goodyear's policies, grossly
incompetent performance or other gross misconduct on your
part;
(ii) a material breach by you of the terms of this Agreement or the
2000 Agreement;
2
(iii) your prolonged or repeated absence from duty without consent
of the Board of Directors of Goodyear for reasons other than
your incapacity due to illness;
(iv) your acceptance of a position with another employer which
conflicts with your duties as a full-time employee of
Goodyear; or
(v) your conviction of a crime other than minor traffic offenses.
(b) You terminate your employment with Goodyear for Good Reason;
provided the termination takes place within six months of the
occurrence of the Good Reason. For this purpose "Good Reason" shall
mean:
(i) a material breach by Goodyear of the terms of this Agreement
or the 2000 Agreement; or
(ii) significant reduction by Goodyear of your titles, positions,
duties, and/or authority.
It is understood that the severance compensation provided for in this
Agreement will not be paid in the event of any of the following:
-- termination of your employment because of your death or disability;
-- termination by Goodyear for Cause;
-- any termination by you in the absence of Good Reason, or more than
six months after the Good Reason purporting to be the basis for the
termination; or
-- any termination following a change in control of Goodyear, in which
case you would receive benefits pursuant to the terms of Goodyear's
change in control severance plan for executives, as described in the
2000 Agreement.
3
Payment of the severance compensation specified in this paragraph 1 shall
be (A) in lieu of any compensation or payment that may otherwise be payable to
you pursuant to any severance or similar plan or arrangement of Goodyear and (B)
conditioned upon your delivery of a waiver and release signed by you, in the
form reasonably required by Goodyear. Upon your request, Goodyear will agree to
make the payments specified in this paragraph 1 in future quarterly, semi-annual
or annual installments over the two-year period following your date of
termination.
2. Excise Tax. If it is determined that any severance compensation
payment Goodyear makes to you under paragraph 1 of this Agreement is subject to
Federal excise taxes imposed on golden parachute payments, then Goodyear will
pay you an additional amount (a "gross-up" payment) reasonably calculated to
cover (a) the amount of such excise tax, plus (b) the amount of any interest,
penalties or additions to any tax which are imposed in connection with the
imposition of such excise tax, plus (c) all income and other applicable taxes
imposed on you under the laws of any Federal, state or local government or
taxing authority by reason of the payments required under this paragraph 2. In
the event of any disagreement between you and Goodyear with respect to the
amount of payments due as a result of the imposition of any excise tax under
this paragraph 2, the matter shall be referred for determination to tax counsel
selected by Goodyear's independent auditors. Goodyear shall pay the fees and
expenses of such tax counsel. The determination of such tax counsel of the
gross-up payment shall be conclusive and binding upon all parties, unless the
Internal Revenue Service ("IRS") determines that you owe a greater or lesser
amount of excise tax than the amount determined by tax counsel appointed as
described above. You agree to cooperate with Goodyear if Goodyear determines to
appeal such IRS determination; provided that Goodyear agrees to pay the
additional expenses of such an appeal, together with any advances of additional
excise tax that must be paid by you in order to effect such an appeal.
3. Exclusive Remedy. It is understood that Goodyear may terminate your
employment at any time and nothing in this Agreement is intended to require, or
shall be construed as requiring, Goodyear to allow you to continue actively
performing any of your duties. Irrespective of whether the termination of your
employment is without Cause, for Good Reason or for any other reason or for no
reason, you will not be entitled to any severance compensation from Goodyear
under this Agreement or otherwise, except to the extent and under the conditions
set
4
forth in this Agreement, which severance compensation will be your exclusive
remedy.
4. Term. The term of this Agreement shall be from February 3, 2004 to
February 28, 2009, unless sooner terminated by the mutual written consent of
both you and Goodyear. The parties may also extend this Agreement for subsequent
terms upon mutual written agreement.
5. 2000 Agreement. Except as they relate to the severance payments
described in paragraph 1 of this Agreement, the provisions of the 2000 Agreement
shall remain in effect, subject to the terms of Goodyear's respective
compensation and benefit plans as they may be in effect from time to time.
6. Non-Compete. If your employment with Goodyear is terminated for any
reason entitling you to receive the severance compensation benefits pursuant to
paragraph 1 of this Agreement, then for a period of two years immediately
following the date of your termination, you agree to abide by the following
covenants and restrictions:
(a) You shall not participate as an owner, shareholder (except for an
interest of less than one percent in the shares of a pubic company),
director, officer, employee, consultant or otherwise in any business
that competes with Goodyear in the manufacture, distribution or sale
of any Goodyear product.
(b) You shall not directly or indirectly solicit or encourage any
Goodyear employee to leave Goodyear or to accept a position with any
other company.
(c) You shall not use or disclose to anyone any confidential information
regarding Goodyear.
In the event of a breach or threatened breach of any term of this
paragraph 6, Goodyear shall be entitled to injunctive relief and/or damages. You
and Goodyear agree that breach of these provisions would cause irreparable
injury to Goodyear for which there would be no adequate remedy at law, due among
other reasons to the inherent difficulty of determining the precise impact of
and causation for loss of customers/consumers or key employees or having
confidential information disclosed.
5
7. Choice of Law. Except to the extent preempted by federal law, this
Agreement and the 2000 Agreement shall be governed by and construed in
accordance with the laws of Ohio, other than laws that might otherwise refer
construction or interpretation of this provision to the substantive law of
another jurisdiction.
8. Binding Effect. This Agreement shall be binding on and inure to the
benefit of your heirs and representatives and the successors and assigns of
Goodyear.
9. Survival of Agreement. Except as otherwise expressly provided in
this Agreement, the rights and obligations of you and Goodyear under this
Agreement shall survive the expiration of this Agreement and the termination of
your employment with Goodyear.
10. Non-Alienation. No benefits payable under this Agreement shall be
pledged or assigned in anticipation of payment either by voluntary or
involuntary acts, or by operation of law.
11. Notices. Any notices, requests, demands and other communications
provided for by this Agreement shall be sufficient if in writing and if sent by
registered or certified mail to you at the last address you have filed in
writing with the Company or, in the case of the Company, to its principal
executive offices.
12. Severability. The agreements contained herein and within the release
prescribed by paragraph 1 ("Release") shall each constitute a separate agreement
independently supported by good and adequate consideration, and shall each be
severable from the other provisions of the Agreement and such Release. If an
arbitrator or court of competent jurisdiction determines that any term,
provision or portion of this Agreement or such Release is void, illegal or
unenforceable, the other terms, provisions and portions of this Agreement or
such Release shall remain in full force and effect, and the terms, provisions
and portions that are determined to be void, illegal or unenforceable shall
either be limited so that they shall remain in effect to the extent permissible
by law, or such arbitrator or court shall substitute, to the extent enforceable,
provisions similar thereto or other provisions, so as to provide to Goodyear, to
the fullest extent permitted by applicable law, the benefits intended by this
Agreement and such Release.
6
13. Acknowledgments. In addition to any other rights or remedies,
whether legal, equitable, or otherwise, that each of the parties to this
Agreement may have, you acknowledge that
(a) The covenants incorporated in paragraph 6 ("Covenants") are
essential to the continued good will and profitability of Goodyear;
(b) Your breach of any of the Covenants will result in your immediate
forfeiture of all rights under this Agreement; and in the event of
any such breach by you, you shall, at Goodyear's request, return all
payments made pursuant to this Agreement;
(c) You have broad-based skills that will serve as the basis for
employment opportunities that are not prohibited by the Covenants;
and
(d) When your employment with Goodyear terminates, you will be able to
earn a livelihood without violating any of the terms of this
Agreement.
In addition, you acknowledge that you have signed and are bound by the
terms of The Goodyear Tire & Rubber Company Associate Confidentiality and
Intellectual Property Agreement ("ACIPA") and agree that the ACIPA shall remain
in full force and effect and your obligations under it are not affected by this
Agreement.
14. Amendment. This Agreement and the 2000 Agreement may be amended or
cancelled by mutual written agreement of you and Goodyear without the consent of
any other person.
If you concur with the provisions of this Agreement, please sign two
copies and return one to the Company.
7
Very truly yours,
THE GOODYEAR TIRE & RUBBER COMPANY
By: /s/ Kathleen T. Geier
----------------------------------
K. T. Geier
Senior Vice President
Human Resources
Attest: /s/ C. Thomas Harvie
------------------------------
C. T. Harvie
Secretary
AGREED:
/s/ Robert J. Keegan
-------------------------
Robert J. Keegan
Dated: 1/29/04
Exhibit 10.3
THE GOODYEAR TIRE & RUBBER COMPANY
GRANT AGREEMENT
PERFORMANCE EQUITY PLAN UNIT GRANT
Name
Title
The 2002 Performance Plan of The Goodyear Tire & Rubber Company (the
"Company") was adopted effective April 15, 2002 (the "Plan"). A copy of the Plan
is attached. At the __________ meeting of the Compensation Committee of the
Board of Directors, you were awarded a Performance Equity Plan Unit Grant (each
Unit equivalent in value to one share of Common Stock of the Company) as
follows:
Date of Grant:
Number of Units Granted:
Performance Period:
The number of Performance Equity Plan Units specified above (the "Units")
which you will earn at the end of the three-year Performance Period specified
above (the "Performance Period") will be determined by and contingent upon the
extent to which Performance Goals are achieved. The number of Units actually
earned may be adjusted between 0 and 150% of the number of Units stated above,
depending on the level of achievement of Performance Goals. Payment of the Units
earned will be made as provided under the General Terms and Conditions. The
Performance Measure, Performance Goals and Distribution Schedule for the
Performance Period for your Performance Equity Plan Unit Grant are described at
Annex A.
The Goodyear Tire & Rubber Company
Grant Agreement received and agreed to:
Date
1
GRANT AGREEMENT
(Continued)
GENERAL TERMS AND CONDITIONS
1. The Performance Equity Plan Unit Grant for the number of Units
specified above is granted to you under, and governed by the terms and
conditions of, the Plan and this Grant Agreement. Your execution and return of
the enclosed copy of this Grant Agreement constitutes your agreement to, and
acceptance of, all terms and conditions of the Plan and this Grant Agreement.
You also agree that you have read and understand the provisions of the Plan,
this Grant Agreement and Annex A.
2. All rights conferred upon you under the provisions of this Grant
Agreement are personal to you and, no assignee, transferee or other successor in
interest shall acquire any rights or interests whatsoever under this Grant
Agreement, which is made exclusively for the benefit of you and the Company
except by will or the laws of descent and distribution.
3. As further consideration for the Units granted to you hereunder, you
must remain in the continuous employ of the Company or one or more of its
subsidiaries until December 31, 2005, the end of the Performance Period. Any
Units earned will be prorated in the event of your death, Retirement (defined as
termination of employment at any age after 30 or more years, or at age 55 or
older with at least 10 years of continuous service with the Company and its
subsidiaries) or Disability (defined as termination of employment while
receiving benefits under a long-term disability income plan maintained by the
Company or one of its subsidiaries) prior to completion of the Performance
Period. Any proration is based on the last day you worked. Nothing contained
herein shall restrict the right of the Company or any of its subsidiaries to
terminate your employment at any time, with or without cause.
4. You will forfeit the right to receive any distribution or payment under
this Grant if you enter into a relationship either as an employee, consultant,
agent or in any manner whatsoever with an entity that sells products in
competition with products sold by the Company and its subsidiaries within six
months after the earlier of (1) the date you receive your distribution of Units
earned or (2) the date you cease to be an employee of the Company or one of its
subsidiaries.
5. The number of Units earned will be paid as follows:
(a) Each Unit earned will be valued at a dollar amount equal to the
Fair Market Value of the Common Stock (as defined below) on December 31,
____ (the "Unit Value").
(b) The Company will pay to you an amount equal to 50% of the Unit
Value multiplied by the total number of Units earned in cash and an amount
equal to 50% of the total number of units earned in shares of the Common
Stock of the Company (the "Common Stock") less such withholding and
payroll taxes as the Company shall determine to be necessary or
appropriate (withholding and payroll taxes to be deducted from the cash
portion of the payment) in February of ____; provided, however, that
notwithstanding the foregoing, you may elect, by
2
delivering a written notice of your election to the Company not later than
March 30, ____, to defer all or a specified whole percentage of the
aforesaid Units earned until the Optional Deferral Date (as defined
below), in which event the amount you elect to defer (which shall be equal
to the product of UE x PDE, where UE equals the number of Units earned and
PDE equals the percentage, expressed as a decimal, of the Units earned you
elect to defer) will be credited in February of ____ to an account
maintained in the records of the Company (the "Optional Deferred Amount")
and will be converted into Deferral Units. The amount of such deferral
will be reduced, if necessary, to pay such tax, payroll and other
withholding obligations as the Company shall determine to be necessary or
appropriate.
(c) Notwithstanding the foregoing, the Compensation Committee of the
Board of Directors may, at its sole election, at any time and from time to
time require that the payment of the entire, or any portion of the, Unit
Value of any number of the Units earned shall be deferred until the
Optional Deferral Date, or such later date as it shall deem appropriate,
in order for the Company to conform to the requirements of Section 162(m)
of the Internal Revenue Code (the "Required Deferral Amount"). Any
Required Deferral Amount so deferred will be credited to an account
maintained in the records of the Company and will be converted into
Deferral Units, the number of which shall be determined by dividing each
amount so deferred by the Fair Market Value of the Common Stock on the
date of such deferral.
6. As used herein, the term: (1) "Deferral Unit" means an equivalent to a
hypothetical share of the Common Stock; (2) "Fair Market Value of the Common
Stock" means, in respect of any date on or as of which a determination thereof
is being or to be made, the average of the high and low per share sale prices of
the Common Stock on the New York Stock Exchange Composite Transactions Tape on
such date or, if the Common Stock was not traded on such date, the next
preceding day on which the Common Stock was traded on the New York Stock
Exchange; (3) "Dividend Equivalent" means, with respect to each dividend payment
date for the Common Stock, an amount equal to the cash dividend per share of
Common Stock which is payable on such dividend payment date; (4) "Optional
Deferral Date" means the first business day of the twelfth month following the
month during which you cease to be employed by the Company, or one of its
subsidiary companies, for any reason (whether Retirement, Disability, death,
voluntary termination or otherwise; (5) "Optional Deferral Unit" means each
Deferral Unit resulting from any Optional Deferred Amount, including Dividend
Equivalents credited in respect thereof; and (6) "Required Deferral Unit" means
each Deferral Unit resulting from any Required Deferred Amount, including
Dividend Equivalents credited in respect thereof. All computations relating to
Deferral Units, fractions of shares of Common Stock and Dividend Equivalents
will be rounded, if necessary, to the fourth decimal place.
7. Each Deferral Unit will be credited with one Dividend Equivalent on
each date on which cash dividends are paid on shares of the Common Stock (and
each fraction of a Deferral Unit shall be credited with a like fraction of a
Dividend Equivalent). Dividend Equivalents (and fractions thereof, if any) will
be automatically translated into Deferral Units by dividing the dollar amount of
such Dividend Equivalents by the Fair Market Value of the Common Stock on the
date the relevant Dividend Equivalents are accrued to your account. The number
of Deferral Units (and any fractions thereof) resulting will be credited to your
account (in lieu of the dollar
3
amount of such Dividend Equivalent) and shall continually be denominated in
Deferral Units until converted for payment as provided in this Grant Agreement.
8. If you have duly elected to receive payment of all or a specified
percentage of your Deferral Units on the Optional Deferral Date (or if payment
of any of the Deferral Units has been deferred until the Optional Deferral Date
pursuant to the conversion thereof into Required Deferral Units), you may elect,
at the time and in the manner specified below, to receive such Deferral Units in
(1) a lump sum on the fifth business day following the Optional Deferral Date,
or (2) in a series of not less than five (5) or more than ten (10) annual
installments commencing on the fifth business day following the Optional
Deferral Date, or (3) a specified percentage of your Deferral Units on the fifth
business day following the Optional Deferral Date and the balance of your
Deferral Units in installments as specified in clause (2) of this sentence.
9. On the Optional Deferral Date (to the extent you have not elected to
receive payment in installments), the whole Deferral Units then in your account
(which have not been designated for payment in installments) will be converted
at your election (which election shall be made in writing on or before the last
day of the seventh month prior to the month during which the Optional Deferral
Date occurs), into (1) a like number of shares of the Common Stock, or (2) a
dollar amount determined by multiplying the number of whole Deferral Units
credited to your account by the Fair Market Value of the Common Stock on the
Optional Deferral Date, or (3) a combination of shares of the Common Stock and
cash in accordance with your election (which shall be expressed as a percentage
of the Deferral Units to be paid in shares of the Common Stock). In accordance
with your election, within five business days following the Optional Deferral
Date you will be paid (a) such number of shares of the Common Stock, (b) such
amount of cash, or (c) the elected combination of shares of Common Stock and
cash, the amounts of which shall be determined in accordance with the preceding
sentence. If you did not make an election as to the form of payment on or before
the required date, you will receive payment in shares of the Common Stock. Any
fraction of a Deferral Unit will be paid to you on the relevant date in cash,
the amount of which shall be calculated in the manner specified above.
10. If you desire to receive payment of your Deferral Units or a portion
thereof in annual installments, you may elect (by delivering to the Company a
written notice of your election, which shall specify the number of annual
installments, not later than December 31 of the calendar year which is two
calendar years prior to the year during which the Optional Deferral Date occurs)
to receive all, or a specified whole percentage of, the Deferral Units in your
account (which would otherwise be scheduled for distribution on the Optional
Deferral Date) in not less than five (5) or more than ten (10) annual
installments, payable commencing on the fifth business day following the
Optional Deferral Date and thereafter on the fifth business day following each
anniversary thereof until paid in full. You may also elect (in writing on or
before the last day of the seventh month prior to the month during which the
Optional Deferral Date occurs) to receive payment in shares of the Common Stock,
cash or any combination of Common Stock and cash (expressed as a percentage of
the Deferral Units to be paid in shares of the Common Stock. Each installment
shall be in an amount equal to the total number of Deferral Units credited to
your account on the Optional Deferral Date, or on the anniversary thereof which
is the fifth business day prior to the date such installment is due and payable,
as the case may be, divided by the number of annual installments remaining
(including the annual installment then being calculated for payment) to be paid.
In respect of each installment, the number of Deferral Units payable shall, in
accordance with your election, be converted into (1) a like number of shares of
the Common Stock, (2) a dollar amount determined by multiplying the number of
whole Deferral
4
Units credited to your account by the Fair Market Value of the Common Stock on
the relevant anniversary of the Optional Deferral Date (or the Optional Deferral
Date in the case of the first installment), or (3) the elected combination of
shares of the Common Stock and cash, the amounts of which shall be determined in
the manner specified above. Any fraction of Deferral Unit will be paid to you on
the relevant date in cash, the amount of which shall be calculated in the manner
specified above.
11. You will be required to satisfy all Federal, state and local tax and
payroll withholding obligations, and any other withholding obligations, arising
in respect of any distribution of shares of the Common Stock or cash to you. To
the extent there is sufficient cash available, such withholding obligations will
be deducted from your distribution. To the extent the amount of cash to be
distributed is not sufficient to satisfy all withholding obligations, you may
elect in writing on or before the last day of the seventh month prior to the
month during which the Optional Deferral Date occurs to pay such withholding
obligations as a condition of your receipt of any distribution of shares of the
Common Stock or to have the number of shares of the Common Stock reduced by the
number of shares equivalent to the required tax withholding obligation based on
the Fair Market Value of the Common Stock on the relevant anniversary of the
Optional Deferral Date if payment is in installments or on the Optional Deferral
Date in the case of the first installment or payment in the form of a lump sum.
12. In the event of your death at any time prior to the Optional Deferral
Date, your account balance will be paid in cash in a lump sum on the fifth
business day following the Optional Deferral Date. In the event of your death at
any time following the Optional Deferral Date and prior to the distribution of
your account, the entire balance of your account shall be paid in cash on the
anniversary of the Optional Deferral Date next following your date of death.
13. In the event of any stock dividend, stock split, recapitalization,
merger, split-up, spin-off or other change affecting the Common Stock of the
Company, the Deferral Units in your account shall be adjusted in the same manner
and proportion as the change to the Common Stock.
14. Any notice to you under this Grant Agreement shall be sufficient if in
writing and if delivered to you or mailed by registered mail directed to you at
the address on record in the Executive Compensation Department. Any notice to
the Company under this Grant Agreement shall be sufficient in writing and if
delivered to the Executive Compensation Department of the Company in Akron,
Ohio, or mailed by registered mail directed to the Company for the attention of
the Executive Compensation Department at 1144 East Market Street, Akron, Ohio
44316-0001. Either you or the Company may, by written notice, change the
address.
5
ANNEX A
PERFORMANCE MEASURE
The Performance Measure for 50% of the units granted is Total Shareholder Return
(TSR). Unit distributions may range from 0 to 150% of 50% of the units granted
based on the average annual TSR performance for the three-year performance
period relative to the selected peer companies (the "S&P Auto & Components
Industry"). TSR will be calculated for each year of the performance period as
the stock price appreciation plus dividends divided by the stock price at the
beginning of the year. The stock price used for the calculation will be the
closing average for the ten business days prior to the beginning and the end of
each year of the performance period.
The Performance Measure for 50% of the units granted is Return on Invested
Capital (ROIC). Unit distributions may range from 0 to 150% of 50% of the units
granted based on the annual average ROIC performance for the three-year
performance period. ROIC will be calculated as the Company's EBIT divided by its
Total Investment with Total Investment consisting of debt plus equity.
6
Exhibit 10.4
Part I
The Goodyear Tire & Rubber Company
Stock Option Grant Agreement
Name
Title
The Directors of The Goodyear Tire & Rubber Company (the "Company") desire to
encourage and facilitate ownership of the Common Stock of the Company (the
"Common Stock") by key employees and to provide for additional compensation
based on appreciation of the Common Stock, thereby providing incentive to
promote continued growth and success of the Company's business. Accordingly, the
2002 Performance Plan of The Goodyear Tire & Rubber Company (the "Plan") was
adopted effective April 15, 2002. A copy of the Plan is attached.
Granted to:
SSN:
Grant Date:
Options Granted:
Option Type: Non-Qualified
Option Price per Share: $
Expiration Date:
Vesting Schedule: 25% on ________
25% on ________
25% on ________
25% on ________
__________________________________
The Goodyear Tire & Rubber Company
By my signature below, I hereby acknowledge receipt of this Option granted on
the date shown above, which has been issued to me under the terms and conditions
of the Plan. I further acknowledge receipt of the copy of the Plan and agree to
conform to all of the terms and conditions of the Option and the Plan.
1. These Non-Qualified Stock Options for the number of shares of Common Stock
indicated on the preceding page (the "Non-Qualified Stock Options") are granted
to you under and are governed by the terms and conditions of the Plan and this
Grant Agreement. Your execution and return of the enclosed copy of page one of
this Grant Agreement acknowledging receipt of the Non-Qualified Stock Options
granted herewith constitutes your agreement to and acceptance of all terms and
conditions of the Plan and this Grant Agreement. You also agree that you have
read and understand this Grant Agreement.
2. You may exercise the Non-Qualified Stock Options granted pursuant to this
Grant Agreement through (1) a cash payment in the amount of the full option
exercise price of the shares being purchased (a "cash exercise"), (2) a payment
in full shares of Common Stock having a Fair Market Value (as defined in the
Plan) on the date of exercise equal to the full option exercise price of the
shares being purchased (a "share swap exercise"), or (3) a combination of the
cash exercise and share swap exercise methods. Any exercise of these
Non-Qualified Stock Options shall be by notice stating the number of shares of
Common Stock to be purchased and the exercise method, accompanied with the
payment, or proper proof of ownership if the share swap exercise method is used.
You shall be required to meet the tax withholding obligations arising from any
exercise of Non-Qualified Stock Options.
3. As further consideration for the Non-Qualified Stock Options granted to you
hereunder, you must remain in the continuous employ of the Company or one or
more of its subsidiaries from the Date of Grant to the date or dates the
Non-Qualified Stock Options become exercisable as set forth on page one of this
Grant Agreement before you will be entitled to exercise the Non-Qualified Stock
Options granted. The Non-Qualified Stock Options you have been granted shall not
in any event be exercisable after your termination of employment except for
Retirement (defined as termination of employment at any age after 30 or more
years, or at age 55 or older with at least 10 years of continuous service with
the Company and its subsidiaries), death, or Disability (defined as termination
of employment while receiving benefits under a long-term disability income plan
maintained by the Company or one of its subsidiaries).
PART II - NON-QUALIFIED STOCK INVESTMENT OPTIONS
4. A Non-Qualified Stock Investment Option will be automatically granted to you,
immediately upon any satisfaction by you of the conditions specified below, on
the following terms and conditions:
Date of Grant: The date of your exercise, at any time
prior to January 1, 2011, of a Non-Qualified Stock
Option granted herein by tendering shares of
Common Stock in payment of all or a portion of the
exercise price of such Non-Qualified Stock Option.
Number of Common Shares The number of shares of Common Stock you tendered
Subject to Option: in the exercise of such Non-Qualified Stock Option
plus the number of shares, if any, withheld by the
Company to satisfy required tax withholdings.
Option Price Per Share: The Fair Market Value (as defined in the Plan) of
the Common Stock on the date you exercised such
Non-Qualified Stock Option by tendering shares of
Common Stock.
Exercise Period: 100% exercisable at any time during the period
beginning on the first anniversary of its date of
grant and ending on December 2, ____.
Page 2 of 4
NQ Grant Agreement (Cont'd)
PART II - NON-QUALIFIED STOCK INVESTMENT OPTIONS (Cont'd)
5. The Non-Qualified Stock Investment Options are granted under and are governed
by the terms and conditions of the Plan and this Grant Agreement. The number of
shares of Common Stock subject to each grant is determined by the number of
shares of Common Stock you tender to the Company in your exercise of a
Non-Qualified Stock Option granted pursuant to this Agreement. The Option price
per share of the Non-Qualified Stock Investment Option shall be the Fair Market
Value (as defined in the Plan) of the Common Stock on the date you exercise a
Non-Qualified Stock Option as aforesaid. In order to accept this Non-Qualified
Stock Investment Option Grant, you must tender shares of Common Stock in the
exercise of a Non-Qualified Stock Option prior to January 1, _____.
6. You may exercise the Non-Qualified Stock Investment Options granted pursuant
to this Grant Agreement through (1) a cash payment in the amount of the full
option exercise price of the shares being purchased (a "cash exercise"), (2) a
payment in full shares of Common Stock having a Fair Market Value (as defined in
the Plan) on the date of exercise equal to the full option exercise price of the
shares of Common Stock being purchased (a "share swap exercise"), or (3) a
combination of the cash exercise and share swap exercise methods. Any exercise
of these Non-Qualified Stock Investment Options shall be by notice stating the
number of shares of Common Stock to be purchased and the exercise method,
accompanied with the payment, or proper proof of ownership if the share swap
exercise method is used. You shall be required to meet the tax withholding
obligations arising from any exercise of Non-Qualified Stock Investment Options.
7. As further consideration for each Non-Qualified Stock Investment Option
granted to you hereunder, you must remain in the continuous employ of the
Company or one or more of its subsidiaries for twelve months following the Date
of Grant in respect thereof (as defined at paragraph 4 above) before you will be
entitled to exercise such Non-Qualified Stock Investment Option. The
Non-Qualified Stock Investment Options you have been granted shall not in any
event be exercisable after your termination of employment except for Retirement,
death, or Disability.
III - GENERAL PROVISIONS
8. The Options terminate automatically and shall not be exercisable by you from
and after the date on which you cease to be an employee of the Company or one of
its subsidiaries for any reason other than your death, Retirement or Disability.
In the event of your death, Retirement or Disability while an employee of the
Company or one of its subsidiaries (and having been an employee continuously
since the Date of Grant) during the exercise period on any date which is more
than six (6) months after the Date of Grant of the Non-Qualified Stock Options
specified on the first page of this Grant Agreement or more than six (6) months
after the Date of Grant of Non-Qualified Stock Investment Options specified at
paragraph 4 of this Grant Agreement, the Options shall become immediately
exercisable and, except as provided below in the event of your death, shall be
exercisable by you for the remainder of the term of the Option grant. In the
event of your death, the Options may be exercised up to three years after date
of death by the person or persons to whom your rights in the options passed by
your will or according to the laws of descent and distribution. Nothing
contained herein shall restrict the right of the Company or any of its
subsidiaries to terminate your employment at any time, with or without cause.
Page 3 of 4
NQ Grant Agreement (Cont'd)
PART III - GENERAL PROVISIONS (Cont'd)
9. The Options shall not in any event be exercisable after the expiration of ten
years from the Date of Grant specified on the first page of this Grant Agreement
and, to the extent not exercised, shall automatically terminate at the end of
such ten-year period.
10. Certificates for the shares of Common Stock purchased will be deliverable to
you or your agent, duly accredited to the satisfaction of the Company, at the
principal office of the Company in Akron, Ohio, or at such other place
acceptable to the Company as may be designated by you.
11. In the event you Retire or otherwise terminate your employment with the
Company or a subsidiary and within 18 months after such termination date you
accept employment with a competitor of, or otherwise engage in competition with,
the Company, the Committee, in its sole discretion, may require you to return,
or (if not received) to forfeit, to the Company the economic value of the
Options granted hereunder which you have realized or obtained by your exercise
at any time on or after the date which is six months prior to the date of your
termination of employment with the Company. Additionally, if you have retired
from the Company, all Options granted to you hereunder which you have not
exercised prior to your competitive engagement shall be automatically cancelled.
12. Each Option granted is not transferable by you otherwise than by will or the
laws of descent and distribution, and is exercisable during your lifetime only
by you.
13. All rights conferred upon you under the provision of this Grant Agreement
are personal and, except under the provisions of paragraph 12 of this Grant
Agreement, no assignee, transferee or other successor in interest shall acquire
any rights or interests whatsoever under this Grant Agreement, which is made
exclusively for the benefit of you and the Company.
14. Any notice to you under this Grant Agreement shall be sufficient if in
writing and if delivered to you or mailed to you at the address on record in the
Executive Compensation Department. Any notice to the Company under this
agreement shall be sufficient if in writing and if delivered to the Executive
Compensation Department of the Company in Akron, Ohio, or mailed by registered
mail directed to the Company for the attention of the Executive Compensation
Department at 1144 East Market Street, Akron, Ohio 44316-0001. Either you or the
Company may, by written notice, change the address. This agreement shall be
construed and shall take effect in accordance with the laws of the State of
Ohio.
15. Each Option may be exercised only at the times and to the extent, and is
subject to all of the terms and conditions, set forth in this Grant Agreement,
and in the Plan, including any rule or regulation adopted by the Committee.
Page 4 of 4
Part II
The Goodyear Tire & Rubber Company
Stock Option Grant Agreement
Name
Title
The Directors of The Goodyear Tire & Rubber Company (the "Company") desire to
encourage and facilitate ownership of the Common Stock of the Company (the
"Common Stock") by key employees and to provide for additional compensation
based on appreciation of the Common Stock, thereby providing incentive to
promote continued growth and success of the Company's business. Accordingly, the
2002 Performance Plan of The Goodyear Tire & Rubber Company (the "Plan") was
adopted effective April 15, 2002. A copy of the Plan is attached.
Granted to:
SSN:
Grant Date:
Options Granted:
Option Type: Non-Qualified/SAR
Option Price per Share: $
Expiration Date:
Vesting Schedule: 25% ________
25% ________
25% ________
25% ________
__________________________________
The Goodyear Tire & Rubber Company
By my signature below, I hereby acknowledge receipt of this Option granted on
the date shown above, which has been issued to me under the terms and conditions
of the Plan. I further acknowledge receipt of the copy of the Plan and agree to
conform to all of the terms and conditions of the Option and the Plan.
1. These Non-Qualified Stock Options for the number of shares of Common Stock
indicated on the preceding page (the "Options") and the Stock Appreciation
Rights granted in tandem with the Options (the "SARs") are granted to you under
and are governed by the terms and conditions of the Plan and this Grant
Agreement. Your execution and return of the enclosed copy of page 1 of this
Grant Agreement acknowledging receipt of the Options and SARs granted herewith
constitutes your agreement to and acceptance of all terms and conditions of the
Plan and this Grant Agreement, including a recognition of the Company's right to
specify whether or not you may exercise either the Options or the SARs at the
time you notify the Company of your intent to exercise. You also agree that you
have read and understand this Grant Agreement.
2. If the Company approves the exercise of an Option, you may exercise the
Non-Qualified Stock Options granted pursuant to this Grant Agreement through (1)
a cash payment in the amount of the full option exercise price of the shares
being purchased (a "cash exercise"), (2) a payment in full shares of Common
Stock having a Fair Market Value (as defined in the Plan) on the date of
exercise equal to the full option exercise price of the shares being purchased
(a "share swap exercise"), or (3) a combination of the cash exercise and share
swap exercise methods. Any exercise of these Non-Qualified Stock Options shall
be by notice stating the number of shares of the Common Stock to be purchased
and the exercise method, accompanied with the payment, or proper proof of
ownership if the share swap exercise method is used. You shall be required to
meet the tax withholding obligations arising from any exercise of Non-Qualified
Stock Options.
3. If the Company approves the exercise of the SARs, written notice must be
given to the Company stating the number of shares in the Options in respect of
which the SARs are being exercised. In due course, you will receive payment in
cash in an amount equal to the difference between the Fair Market Value (as
defined in the Plan) of one share of the Common Stock on the date of exercise of
the SARs and the Option Exercise Price per Share specified in respect of the
Options times the number of shares in respect of which the SARs shall have been
exercised. Such payment shall be subject to reduction for withholding taxes.
4. As further consideration for the Non-Qualified Stock Options and SARs granted
to you hereunder, you must remain in the continuous employ of the Company or one
or more of its subsidiaries from the Date of Grant to the date or dates the
Non-Qualified Stock Options and SARs become exercisable as set forth on page one
of this Grant Agreement before you will be entitled to exercise the
Non-Qualified Stock Options and SARs granted. The Non-Qualified Stock Options
and SARs you have been granted shall not in any event be exercisable after your
termination of employment except for Retirement (defined as termination of
employment at any age after 30 or more years, or at age 55 or older with at
least 10 years of continuous service with the Company and its subsidiaries),
death, or Disability (defined as termination of employment while receiving
benefits under a long-term disability income plan provided by a government or
sponsored by the Company or one of its subsidiaries).
Page 2 of 4
NQ/SAR Grant Agreement (Cont'd)
5. The Options and SARs terminate automatically and shall not be exercisable by
you from and after the date on which you cease to be an employee of the Company
or one of its subsidiaries for any reason other than your death, Retirement or
Disability. In the event of your death, Retirement or Disability while an
employee of the Company or one of its subsidiaries (and having been an employee
continuously since the Date of Grant) during the exercise period on any date
which is more than six (6) months after the Date of Grant specified on the first
page of this Grant Agreement, the Options and SARs shall become immediately
exercisable and, except as provided below in the event of your death, shall be
exercisable by you for the remainder of the term of the Option/SAR grant. In the
event of your death, the Options and SARs may be exercised up to three years
after date of death by the person or persons to whom your rights in the options
passed by your will or according to the laws of descent and distribution.
Nothing contained herein shall restrict the right of the Company or any of its
subsidiaries to terminate your employment at any time, with or without cause.
6. The Options and SARs you have been granted shall not in any event be
exercisable after the expiration of ten years from the Date of Grant specified
on the first page of this Grant Agreement and, to the extent not exercised,
shall automatically terminate at the end of such ten-year period.
7. Certificates for shares of the Common Stock purchased will be deliverable to
you or your agent, duly accredited to the satisfaction of the Company, at the
principal office of the Company in Akron, Ohio, or at such other place
acceptable to the Company as may be designated by you.
8. In the event you Retire or otherwise terminate your employment with the
Company or a subsidiary and within 18 months after such termination date you
accept employment with a competitor of, or otherwise engage in competition with,
the Company, the Committee, in its sole discretion, may require you to return,
or (if not received) to forfeit, to the Company the economic value of the
Options or SARs which you have realized or obtained by your exercise of the
Options or SARs granted hereunder at any time on or after the date which is six
months prior to the date of your termination of employment with the Company.
Additionally, if you have retired from the Company, all Options or SARs which
are granted to you hereunder and which you have not exercised prior to your
competitive engagement shall be automatically cancelled.
9. Each Option and SAR are not transferable by you otherwise than by will or the
laws of descent and distribution, and are exercisable during your lifetime only
by you.
10. All rights conferred upon you under the provisions of this Grant Agreement
are personal and, except under the provisions of paragraph 9 of this Grant
Agreement, no assignee, transferee or other successor in interest shall acquire
any rights or interests whatsoever under this Grant Agreement, which is made
exclusively for the benefit of you and the Company.
Page 3 of 4
NQ/SAR Grant Agreement (Cont'd)
11. Any notice to you under this Grant Agreement shall be sufficient if in
writing and if delivered to you or mailed to you at the address on record in the
Executive Compensation Department. Any notice to the Company under this
agreement shall be sufficient if in writing and if delivered to the Executive
Compensation Department of the Company in Akron, Ohio, or mailed by registered
mail directed to the Company for the attention of the Executive Compensation
Department at 1144 East Market Street, Akron, Ohio 44316-0001. Either you or the
Company may, by written notice, change the address. This Grant Agreement shall
be construed and shall take effect in accordance with the laws of the State of
Ohio.
12. Each Option and/or SAR may be exercised only at the times and to the extent,
and is subject to all of the terms and conditions, set forth in this Grant
Agreement, and in the Plan, including any rule or regulation adopted by the
Committee.
13. Your purchase of shares of Common Stock pursuant to the Options shall
automatically reduce by a like number the shares subject to the SARs and,
conversely, your exercise of any SARs shall automatically reduce by a like
number the shares of the Common Stock available for purchase by you under the
Options.
14. In agreeing to accept this grant, you clearly acknowledge that The Goodyear
Tire & Rubber Company assumes no responsibility for any regulatory or tax
consequences that arise from either the grant or exercise of the Options or the
SARs, whether under U.S. or foreign law, rules, regulations or treaties.
15. Prior to the exercise of an Option or SAR, written notice must be given to
the Company of your intent to exercise. The Company will then advise you whether
or not you may exercise a Stock Option or an SAR and upon receiving such advice
you may then exercise the Stock Option or the SAR.
Page 4 of 4
EXHIBIT 12
THE GOODYEAR TIRE & RUBBER COMPANY AND
SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED
CHARGES
Twelve Months Ended December 31,
Restated
2003
2002
2001
2000
1999
(Dollars in millions)
EARNINGS
Income (loss) before income taxes
$
(689.9
)
$
(13.7
)
$
(337.9
)
$
77.1
$
276.7
Add:
Amortization of previously
capitalized interest
10.7
10.2
9.9
9.8
11.0
Minority interest in net income of consolidated
subsidiaries with fixed charges
37.6
57.4
27.4
44.6
42.6
Proportionate share of fixed charges of investees
accounted for by the equity method
7.2
4.7
4.1
5.8
5.5
Proportionate share of net loss of investees
accounted for by the equity method
18.0
16.1
42.9
28.0
0.3
Total additions
73.5
88.4
84.3
88.2
59.4
Deduct:
Capitalized interest
8.0
7.2
1.7
11.9
18.1
Minority interest in net loss of consolidated
subsidiaries
14.8
5.2
15.0
8.3
4.2
Undistributed proportionate share of net income
of investees accounted for by the equity method
3.1
1.3
0.2
2.9
1.8
Total deductions
25.9
13.7
16.9
23.1
24.1
TOTAL EARNINGS
$
(642.3
)
$
61.0
$
(270.5
)
$
142.2
$
312.0
FIXED CHARGES
Interest expense
$
296.3
$
241.7
$
297.1
$
282.8
$
173.1
Capitalized interest
8.0
7.2
1.7
11.9
18.1
Amortization of debt discount, premium
or expense
40.5
8.8
6.0
1.5
0.7
Interest portion of rental expense
88.4
76.7
74.1
73.5
62.1
Proportionate share of fixed charges of investees
accounted for by the equity method
7.2
4.7
4.1
5.8
5.5
TOTAL FIXED CHARGES
$
440.4
$
339.1
$
383.0
$
375.5
$
259.5
TOTAL EARNINGS BEFORE FIXED CHARGES
$
(201.9
)
$
400.1
$
112.5
$
517.7
$
571.5
RATIO OF EARNINGS TO FIXED CHARGES
*
1.18
**
1.38
2.20
*
Earnings for the year ended December 31,
2003 were inadequate to cover fixed charges. The coverage
deficiency was $642.3 million.
**
Earnings for the year ended December 31,
2001 were inadequate to cover fixed charges. The coverage
deficiency was $270.5 million (as restated).
EXHIBIT 21.1
SUBSIDIARIES OF THE REGISTRANT (1) (2) (3) (4)
The subsidiary companies of The Goodyear Tire & Rubber Company at December
31, 2003, and the places of incorporation or organization thereof, are:
PLACE OF
INCORPORATION
NAME OF SUBSIDIARY OR ORGANIZATION
------------------ ---------------
UNITED STATES
Allied Tire Sales, Inc. Florida
Belt Concepts of America, Inc. Delaware
Celeron Corporation Delaware
Cosmoflex, Inc. Delaware
Dapper Tire Co., Inc. California
Divested Atomic Corporation Delaware
Divested Companies Holding Company Delaware
Divested Litchfield Park Properties, Inc. Arizona
*Goodyear Dunlop Tires North America, Ltd. Ohio
Goodyear Farms, Inc. Arizona
Goodyear International Corporation Delaware
The Goodyear Rubber Plantations Company Ohio
Goodyear-SRI Global Purchasing Company Ohio
Goodyear-SRI Global Technology LLC Ohio
Goodyear Western Hemisphere Corporation Delaware
The Kelly-Springfield Tire Corporation Delaware
Laurelwood Properties Inc. Delaware
Retreading L Inc. Delaware
Retreading L, Inc. of Oregon Oregon
*Utica Converters Inc. Delaware
Wheel Assemblies Inc. Delaware
Wingfoot Commercial Tire Systems LLC Ohio
Wingfoot Corporation Delaware
Wingfoot Ventures Eight Inc. Delaware
Wingfoot Ventures Four Inc. Delaware
Wingfoot Ventures Thirteen Inc. Delaware
INTERNATIONAL
Abacom (Pty.) Ltd. Botswana
Compania Anonima Goodyear de Venezuela Venezuela
Compania Goodyear del Peru, S.A. Peru
Compania Goodyear, S.A. de C.V. Mexico
PLACE OF
INCORPORATION
NAME OF SUBSIDIARY OR ORGANIZATION
------------------ ---------------
Corporacion Industrial Mercurio S.A. de C.V. Mexico
*Dunlop Airsprings France
*Dunlop GmbH & Co. KG Germany
*Dunlop Grund und Service Verwaltungs GmbH Germany
*Dunlop Pneumatici SpA Italy
*Dunlop Tyres Limited England
*Dunlop Versicherungsservice GmbH Germany
*Eurosava Srl Italy
*Fit Remoulds (Ireland) Limited Ireland
*Fulda Reifen GmbH & Co. KG Germany
*ForMa Formen und Maschinenbau GmbH Germany
*GD Furstenwalde Vermogensverwaltungs GmbH Germany
*GHS Goodyear Handelssysteme GmbH Germany
Goodyear Australia Pty Limited Australia
Goodyear Aviation Japan, Ltd. Japan
Goodyear Belting Pty Limited Australia
Goodyear Brokers Limited Bermuda
Goodyear Canada Inc. Canada
Goodyear Chemical Products SAS France
*Goodyear Dalian Tire Company Ltd. China
Goodyear de Chile S.A.I.C. Chile
Goodyear de Colombia S.A. Colombia
Goodyear do Brasil Productos de Borracha Ltda Brazil
*Goodyear Dunlop Financial Service GmbH Germany
*Goodyear Dunlop Tires Austria GmbH Austria
*Goodyear Dunlop Tires Baltic A.S. Estonia
*Goodyear Dunlop Tires Belgium N.V. Belgium
*Goodyear Dunlop Tires Czech s.r.o. Czech Republic
*Goodyear Dunlop Tires Danmark A/S Denmark
*Goodyear Dunlop Tires Espana S.A. Spain
*Goodyear Dunlop Tires Europe B.V. Netherlands
*Goodyear Dunlop Tires Finance Europe B.V. Netherlands
*Goodyear Dunlop Tires Finland OY Finland
*Goodyear Dunlop Tires France France
*Goodyear Dunlop Tires Germany GmbH Germany
*Goodyear Dunlop Tires Hellas S.A.I.C. Greece
*Goodyear Dunlop Tires Ireland Limited Ireland
*Goodyear Dunlop Tires Italia SRL Italy
*Goodyear Dunlop Tires Hungary Trading Ltd. Hungary
*Goodyear Dunlop Tires Nederland B.V. Netherlands
*Goodyear Dunlop Tires Norge A/S Norway
*Goodyear Dunlop Tires Polska Sp z.o.o. Poland
PLACE OF
INCORPORATION
NAME OF SUBSIDIARY OR ORGANIZATION
------------------ ---------------
*Goodyear Dunlop Tires Portugal, Unipessoal, Lda. Portugal
*Goodyear Dunlop Tires Romania Srl Romania
*Goodyear Dunlop Tires Slovakia s.r.o. Slovakia
*Goodyear Dunlop Tires Slovenia d.o.o. Slovenia
*Goodyear Dunlop Tires Suisse S.A. Switzerland
*Goodyear Dunlop Tires Sverige A.B. Sweden
*Goodyear Dunlop Tyres UK Ltd. England
Goodyear Earthmover Pty Ltd Australia
Goodyear Engineered Products Europe d.o.o. Slovenia
Goodyear Engineered Products Europe Joint Venture
Holding d.o.o. Slovenia
Goodyear Finance Holding S.A. Luxembourg
Goodyear France Aviation Products S.A. France
*Goodyear GmbH & Co. KG Germany
Goodyear India Limited India
Goodyear Industrial Rubber Products Ltd. England
*Goodyear Italiana S.p.A. Italy
Goodyear Jamaica Limited Jamaica
Goodyear Korea Company Korea
Goodyear Lastikleri Turk Anonim Sirketi Turkey
*Goodyear Luxembourg Tires S.A. Luxembourg
Goodyear Malaysia Berhad Malaysia
*Goodyear Management Services Ltd. England
Goodyear Marketing & Sales Snd. Bhd. Malaysia
Goodyear Maroc S.A. Morocco
Goodyear Middle East FZE Dubai
Goodyear Nederland B.V. Netherlands
Goodyear New Zealand, Ltd. New Zealand
Goodyear Orient Company (Private) Limited Singapore
Goodyear Philippines, Inc. Philippines
Goodyear Productos Industriales S. De R.L. De C.V. Mexico
Goodyear Productos Industriales, C.A. Venezuela
Goodyear Qingdao Engineered Elastomers Company Ltd. China
Goodyear Russia LLC Russia
Goodyear Sales Company Limited Taiwan
Goodyear S.A. France
Goodyear S.A. Luxembourg
Goodyear Servicios Comerciales S. De R.L. De C.V. Mexico
Goodyear Servicios Y Asistencia Tecnica S. De R.L. De C.V. Mexico
Goodyear Singapore Pte Limited Singapore
PLACE OF
INCORPORATION
NAME OF SUBSIDIARY OR ORGANIZATION
------------------ ---------------
Goodyear Solid Woven Belting (Pty) Limited South Africa
Goodyear South Africa (Proprietary) Limited South Africa
Goodyear South Asia Tyres Private Limited India
Goodyear SRI Global Purchasing Yugen Vaisha & Co. Ltd Japan
Goodyear Taiwan Limited Taiwan
Goodyear (Thailand) Public Company Limited Thailand
Goodyear Tyres Pty Ltd Australia
Goodyear Tyre and Rubber Holdings (Pty.) Ltd South Africa
Goodyear Wingfoot KK Japan
Gran Industria de Neumaticos Centroamericana, S.A. Guatemala
Hi-Q Automotive (Pty.) Ltd. South Africa
*KDIS Distribution France
Kelly-Springfield Puerto Rico, Inc. Puerto Rico
Kelly-Springfield Tyre Co. (Australia) Pty. Ltd. Australia
Magister Limited Mauritius
Neumaticos Goodyear S.R.L. Argentina
Nippon Giant Tire Co., Ltd. Japan
Numazu G.Y. KK Japan
*Pneu Holding France
*Pneumant Reifen GmbH & Co KG Germany
Property Leasing S.A. Luxembourg
P.T. Goodyear Indonesia Tbk Indonesia
P.T. Goodyear Sumatra Plantations Indonesia
Rubber & Associated Manufacturing (Pty) Ltd. South Africa
RVM Reifen Vertriebsmanagement GmbH Germany
Sava Tires, d.o.o. Slovenia
Sava Tires Joint Venture Holding, d.o.o. Slovenia
*S.A. Vulco Belgium N.V. Belgium
Servicios Y Montjes Eagle, S. de R.L. Mexico
South Pacific Tyres Australia
South Pacific Tyres New Zealand Limited New Zealand
*SP Brand Holding GEIE Belgium
Three Way Tyres (Botswana) Botswana
Tire Company Debica S.A. Poland
Tredcor Export Services (Pty) Ltd. South Africa
Tredcor Southern Zimbabwe (Pvt.) Limited Zimbabwe
Tredcor (Zambia) Limited Zambia
Trentyre Limited (Mozambique) Mozambique
Trentyre Holdings (Pty) Ltd South Africa
Trentyre (Pty.) Ltd. South Africa
Trentyre North Zimbabwe (Pvt.) Limited Zimbabwe
Tyre Services (Botswana) Botswana
PLACE OF
INCORPORATION
NAME OF SUBSIDIARY OR ORGANIZATION
------------------ ---------------
*Vulco Development France
*Vulco France France
Wingfoot de Chihuahua, S. de R.L. de C.V. Mexico
Wingfoot Insurance Company Limited Bermuda
Wingfoot Luxembourg SARL Luxembourg
Wingfoot Mold Leasing Company Canada
*4 Fleet Group GmbH Germany
(1) Each of the subsidiaries named in the foregoing list conducts its business
under its corporate name and, in a few instances, under a shortened form of its
corporate name or in combination with a trade name.
(2) Each of the subsidiaries named in the foregoing list is directly or
indirectly wholly-owned by Registrant, except that: (i) each of the subsidiaries
listed above marked by an asterisk preceding its name is 75% owned by the
Company; and (ii) in respect of each of the following subsidiaries Registrant
owns the indicated percentage of such subsidiary's equity capital: Goodyear-SRI
Global Purchasing Company, 80%; Goodyear-SRI Global Technology LLC, 51%;
Compania Goodyear del Peru S.A., 78%; Goodyear Aviation Japan Ltd., 85%;
Goodyear India Limited, 74%; Goodyear Jamaica Limited, 60%; Goodyear Lastikleri
Turk Anonim Sirketi, 74.61%; Goodyear Malaysia Berhad, 51%; Goodyear Maroc S.A.,
55%; Goodyear Qingdao Engineered Elastomers Company Ltd., 60%; Goodyear Taiwan
Limited, 75.5%; Goodyear Sales Company Limited, 75.5%; Goodyear (Thailand)
Public Company Limited, 66.8%; Gran Industria de Neumaticos Centroamericana,
S.A., 79%; P.T. Goodyear Indonesia Tbk, 85%; Goodyear Philippines Inc., 88.54%;
P.T. Goodyear Sumatra Plantations, 95%; Nippon Giant Tire Co., Ltd., 65%;
Goodyear-SRI Global Purchasing Yugen Vaisha & Co., 80%; Goodyear Market & Sales
Snd Shd, 51%; Sava Tires, d.o.o., 60%; Sava Tires Joint Venture Holding, d.o.o.,
60%; South Pacific Tyres, 50.01%; South Pacific Tyres New Zealand Limited,
50.01%; Tire Company Debica S.A., 59.87%; Goodyear South Asia Tires Private
Limited, 99.4%; Vulco Development, 62.2%; Wingfoot Luxembourg SARL, 95%;
Trentyre North Zimbabwe (Pvt.) Limited, 51%; Tredcor Southern Zimbabwe (Pvt.)
Limited, 60%; Trentyre (Pty.) Ltd., 92%; and Trentyre Limited (Mozambique), 70%.
(3) In accordance with paragraph (ii) of Part 21 of Item 601(b) of Regulation
S-K, the names of approximately 52 subsidiaries have been omitted from the
foregoing list. The unnamed subsidiaries, considered in the aggregate as a
single subsidiary, would not constitute a significant subsidiary, as defined in
the applicable regulations.
(4) Except for Wingfoot Corporation, South Pacific Tyres and South Pacific
Tyres Limited New Zealand, at December 31, 2003, Goodyear did not have any
majority owned subsidiaries that were not consolidated.
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-3 (No. 333-90786) and in the Registration Statements on
Form S-8 (Nos. 333-97417, 333-84352, 333-84346, 333-62806, 333-62808, 333-29993,
33-65187, 33-65185, 33-65183, 33-65181, 33-31530, 33-17963, 2-79437 and 2-47905)
of The Goodyear Tire & Rubber Company of our report dated May 18, 2004, relating
to the financial statements and financial statement schedules, which appears in
this Form 10-K.
KNOW ALL MEN BY THESE PRESENTS, that the undersigned directors of THE
GOODYEAR TIRE & RUBBER COMPANY, a corporation organized and existing under the
laws of the State of Ohio (the "Company"), hereby constitute and appoint ROBERT
W. TIEKEN, C. THOMAS HARVIE, STEPHANIE W. BERGERON, and THOMAS A. CONNELL, and
each of them, their true and lawful attorneys-in-fact and agents, each one of
them with full power and authority to sign the names of the undersigned
directors to the Company's Annual Report to the Securities and Exchange
Commission on Form 10-K for its fiscal year ended December 31, 2003, and to any
and all amendments, supplements and exhibits thereto and any other instruments
filed in connection therewith; provided, however, that said attorneys-in-fact
shall not sign the name of any director unless and until the Annual Report shall
have been duly executed by the officers of the Company then serving as the chief
executive officer of the Company, the principal financial officer of the Company
and the principal accounting officer of the Company; and each of the undersigned
hereby ratifies and confirms all that the said attorneys-in-fact and agents, or
any one or more of them, shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned have subscribed these presents this
2nd day of December, 2003.
/s/ Susan E. Arnold /s/ James C. Boland
----------------------------------------- ---------------------------------
Susan E. Arnold, Director James C. Boland, Director
/s/ John G. Breen /s/ Gary D. Forsee
----------------------------------------- ---------------------------------
John G. Breen, Director Gary D. Forsee, Director
/s/ William J. Hudson, Jr. /s/ Robert J. Keegan
----------------------------------------- ---------------------------------
William J. Hudson, Jr., Director Robert J. Keegan, Director
/s/ Steven A. Minter /s/ Agnar Pytte
----------------------------------------- ---------------------------------
Steven A. Minter, Director Agnar Pytte, Director
/s/ James M. Zimmerman
---------------------------------------
James M. Zimmerman, Director
Exhibit 24.1
THE GOODYEAR TIRE & RUBBER COMPANY
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned directors of THE
GOODYEAR TIRE & RUBBER COMPANY, a corporation organized and existing under the
laws of the State of Ohio (the "Company"), hereby constitute and appoint ROBERT
W. TIEKEN, C. THOMAS HARVIE and THOMAS A. CONNELL, and each of them, their true
and lawful attorneys-in-fact and agents, each one of them with full power and
authority to sign the names of the undersigned directors to the Company's Annual
Report to the Securities and Exchange Commission on Form 10-K for its fiscal
year ended December 31, 2003, and to any and all amendments, supplements and
exhibits thereto and any other instruments filed in connection therewith;
provided, however, that said attorneys-in-fact shall not sign the name of any
director unless and until the Annual Report shall have been duly executed by the
officers of the Company then serving as the chief executive officer of the
Company, the principal financial officer of the Company and the principal
accounting officer of the Company; and each of the undersigned hereby ratifies
and confirms all that the said attorneys-in-fact and agents, or any one or more
of them, shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned have subscribed these presents this
13th day of April, 2004.
/s/ Rodney O'Neal /s/ Shirley D. Peterson
---------------------------------- -------------------------------------
Rodney O'Neal, Director Shirley D. Peterson, Director
EXHIBIT 31.1
CERTIFICATION
I, Robert J. Keegan, certify that:
1. I have reviewed this annual report on Form 10-K of The Goodyear Tire &
Rubber Company;
2. Based on my knowledge, this report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant
and have:
a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known
to us by others within those entities, particularly during the
period in which this report is being prepared;
b) Evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about
the effectiveness of the disclosure controls and procedures, as of
the end of the period covered by this report based on such
evaluation; and
c) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the
registrant's most recent fiscal quarter (the registrant's fourth
fiscal quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed, based
on our most recent evaluation of internal control over financial
reporting, to the registrant's auditors and the audit committee of the
registrant's board of directors (or persons performing the equivalent
functions):
a) All significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal control over financial reporting.
Date: May 19, 2004
/s/ Robert J. Keegan
------------------------------------
Robert J. Keegan
President and Chief Executive Officer
(Principal Executive Officer)
EXHIBIT 31.2
CERTIFICATION
I, Robert W. Tieken, certify that:
1. I have reviewed this annual report on Form 10-K of The Goodyear Tire &
Rubber Company;
2. Based on my knowledge, this report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant
and have:
a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known
to us by others within those entities, particularly during the
period in which this report is being prepared;
b) Evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about
the effectiveness of the disclosure controls and procedures, as of
the end of the period covered by this report based on such
evaluation; and
c) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the
registrant's most recent fiscal quarter (the registrant's fourth
fiscal quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed, based
on our most recent evaluation of internal control over financial
reporting, to the registrant's auditors and the audit committee of the
registrant's board of directors (or persons performing the equivalent
functions):
a) All significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal control over financial reporting.
Date: May 19, 2004
/s/ Robert W. Tieken
----------------------------------------------------
Robert W. Tieken
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
EXHIBIT 32.1
CERTIFICATION
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
(SUBSECTIONS (a) AND (b) OF SECTION 1350, CHAPTER 63 OF TITLE 18,
UNITED STATES CODE)
Pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a)
and (b) of section 1350, chapter 63 of Title 18, United States Code), each of
the undersigned officers of The Goodyear Tire & Rubber Company, an Ohio
corporation (the "Company"), hereby certifies with respect to the Annual Report
on Form 10-K of the Company for the year ended December 31, 2003 as filed with
the Securities and Exchange Commission (the "10-K Report") that to his
knowledge:
(1) the 10-K Report fully complies with the requirements of section 13(a)
or 15(d) of the Securities Exchange Act of 1934; and
(2) the information contained in the 10-K Report fairly presents, in all
material respects, the financial condition and results of operations of
the Company.
Dated: May 19, 2004 /s/ Robert J. Keegan
----------------------------------------------------
Robert J. Keegan,
President and Chief Executive Officer
of
The Goodyear Tire & Rubber Company
Dated: May 19, 2004 /s/ Robert W. Tieken
----------------------------------------------------
Robert W. Tieken,
Executive Vice President and Chief Financial Officer
of
The Goodyear Tire & Rubber Company
Exhibit 99.1
NOMINEES FOR DIRECTOR -- CLASS II, THREE YEAR TERMS EXPIRING IN 2007
ROBERT J. KEEGAN
Chairman of the Board, Chief Executive Officer and President of Goodyear
Mr. Keegan joined Goodyear on October 1, 2000, and he was elected President and
Chief Operating Officer and a Director of Goodyear on October 3, 2000 and
President and Chief Executive Officer effective January 1, 2003. Mr. Keegan
became Chairman of the Board effective July 1, 2003. Prior to joining Goodyear,
Mr. Keegan was an Executive Vice President of Eastman Kodak Company. He held
various marketing, financial and managerial posts at Eastman Kodak Company from
1972 through September 2000, except for a two year period beginning in 1995 when
he was an Executive Vice President of Avery Dennison Corporation.
Mr. O'Neal has served in various managerial positions at Delphi Corporation
since 1999 and has served as the President of the Dynamics, Propulsion, Thermal
& Interior Sector since January 1, 2004. Mr. O'Neal also served in various
managerial and engineering positions at General Motors Corporation from 1976 to
1999, including vice president of General Motors and president of Delphi
Interior Systems prior to Delphi's separation from General Motors.
Age: 50
Director since: February 3, 2004
SHIRLEY D. PETERSON
Retired. Formerly partner in the law firm of Steptoe & Johnson
Mrs. Peterson was President of Hood College from 1995-2000. From 1989 to 1993
she served in the U.S. Government, first appointed by the President as Assistant
Attorney General in the Tax Division of the Department of Justice, then as
Commissioner of the Internal Revenue Service. She was also a partner in the law
firm of Steptoe & Johnson LLP where she served a total of 22 years from 1969 to
1989 and from 1993 to 1994. Mrs. Peterson is also a director of AK Steel Corp.,
Federal-Mogul Corp. and is an independent trustee for Scudder Mutual Funds.
Age: 62
Director since: April 13, 2004
NOMINEE FOR DIRECTOR -- CLASS I, ONE YEAR TERM EXPIRING IN 2005
JOHN G. BREEN
Retired. Formerly Chairman of the Board of The Sherwin-Williams Company, a
manufacturer of paints, coatings and related products.
Mr. Breen was the Chairman of the Board and Chief Executive Officer of The
Sherwin-Williams Company from January 15, 1979 to October 25, 1999, when he
retired as Chief Executive Officer. He served as Chairman of the Board of The
Sherwin-Williams Company until April 26, 2000, when he retired. He is a director
of The Sherwin-Williams Company, Mead Westvaco Corporation, Parker-Hannifin
Corporation and The Stanley Works.
Age: 69
Director since: January 7, 1992
CONTINUING DIRECTORS -- CLASS I, TERMS EXPIRING IN 2005
SUSAN E. ARNOLD
President, Global Personal Beauty Care and Global Feminine Care of The Procter &
Gamble Company
Ms. Arnold has held various marketing and managerial positions at The Procter &
Gamble Co. since 1980, and was named President -- Global Skin Care in 1999.
Since 1999, Ms. Arnold has served as President of various Procter & Gamble
businesses, most recently as President -- Global Personal Beauty Care and Global
Feminine Care.
Age: 50
Director since: January 21, 2003
GARY D. FORSEE
Chairman of the Board and Chief Executive Officer, Sprint Corp.
Mr. Forsee has served as Sprint Corp.'s Chief Executive Officer since March 19,
2003. Mr. Forsee has also served as Sprint's Chairman of the Board of Directors
since May 12, 2003. Prior to joining Sprint Mr. Forsee served as the Vice
Chairman-Domestic Operations of BellSouth Corporation from December 2001 to
February 2003, and held other managerial positions at BellSouth from September
1999 to December 2001. Prior to joining BellSouth, Mr. Forsee was President and
Chief Executive Officer of Global One, a global telecommunications joint
venture, from January 1998 to July 1999.
Age: 54
Director since: August 6, 2002
WILLIAM J. HUDSON, JR.
Retired. Formerly President and Chief Executive Officer and a Director of AMP,
Incorporated, a global manufacturer of electrical and electronic components and
assemblies.
Mr. Hudson was the President and Chief Executive Officer of AMP, Incorporated
from January 1, 1993 to August 10, 1998. Mr. Hudson served as the Vice Chairman
of AMP, Incorporated from August 10, 1998 to April 30, 1999. Mr. Hudson is a
director of Keithley Instruments Company, a member of the Executive Committee of
the United States Council for International Business, and a director of the
Pinnacle Health Foundation.
Age: 69
Director since: November 7, 1995
CONTINUING DIRECTORS -- CLASS III, TERMS EXPIRING IN 2006
JAMES C. BOLAND
Vice Chairman of Cavs/Gund Arena Company
Mr. Boland was the President and Chief Executive Officer of Cavs/Gund Arena
Company (the Cleveland Cavaliers professional basketball team and Gund Arena)
from 1998 to December 31, 2002, when he became Vice Chairman. Prior to his
retirement from Ernst & Young in 1998, Mr. Boland served for 22 years as a
partner of Ernst & Young in various roles including Vice Chairman and Regional
Managing Partner, as well as a member of the firm's Management Committee. Mr.
Boland is a director of International Steel Group Inc., Invacare Corporation and
The Sherwin-Williams Company.
Age: 64
Director since: December 18, 2002
STEVEN A. MINTER
Retired. Formerly President and Executive Director of The Cleveland Foundation,
a community trust devoted to health, education, social services and civic and
cultural affairs.
Mr. Minter was the President and Executive Director of The Cleveland Foundation,
Cleveland, Ohio, from January 1, 1984 to June 30, 2003, when he retired. Since
September 1, 2003, Mr. Minter has served as a part-time Executive-in-Residence
at Cleveland State University. Mr. Minter is a director of KeyCorp and a trustee
of The College of Wooster.
Age: 65
Director since: February 12, 1985
JAMES M. ZIMMERMAN
Retired. Formerly Chairman of the Board of Federated Department Stores Inc., a
national retailer.
Mr. Zimmerman served as the Chairman of the Board of Federated Department
Stores, Inc. from May 1997 to January 2004, and was its Chief Executive Officer
from May 1997 to February 2003. Mr. Zimmerman also served as Federated's
President and Chief Operating Officer from May 1988 to May 1997. He was first
employed by Federated in 1965. Mr. Zimmerman is also a director of Chubb
Corporation, H. J. Heinz Company and Convergys Corporation.
Age: 60
Director since: June 5, 2001
RETIRING DIRECTOR
Dr. Agnar Pytte, after more than sixteen years of service as a director, will
retire immediately prior to the Annual Meeting.
Exhibit 99.2
DIRECTORS' COMPENSATION
Goodyear directors who are not officers or employees of Goodyear or any of its
subsidiaries receive, as compensation for their services as a director, $17,500
per calendar quarter. The Presiding Director receives an additional $13,750 per
calendar quarter. The chairperson of the Audit Committee receives an additional
$3,750 per calendar quarter and the chairpersons of all other committees receive
an additional $1,250 per calendar quarter. Any director who attends more than 24
board and committee meetings will receive $1,700 for each additional meeting
attended ($1,000 if the meeting is attended by telephone). Travel and lodging
expenses incurred in attending board and committee meetings are paid by
Goodyear. A director who is also an officer or an employee of Goodyear or any of
its subsidiaries does not receive additional compensation for his or her
services as a director.
Directors who are not current or former employees of Goodyear or its
subsidiaries participate in the Outside Directors' Equity Participation Plan
(the "Directors' Equity Plan"). The Directors' Equity Plan is intended to
further align the interests of directors with the interests of shareholders by
making part of each director's compensation dependent on the value and
appreciation over time of the Common Stock.
Under the Directors' Equity Plan, on the first business day of each calendar
quarter each eligible director who has been a director for the entire preceding
calendar quarter will have $17,500 accrued to his or her plan account. On April
14, 2004, individuals who had served as director since October 1, 2003 had an
additional $20,000 accrued to their account pursuant to an April 13, 2004
amendment to the Directors' Equity Plan. Amounts accrued are converted into
units equivalent in value to shares of Common Stock at the fair market
value of the Common Stock on the accrual date. The units will receive dividend
equivalents at the same rate as the Common Stock, which dividends will also be
converted into units in the same manner. The Directors' Equity Plan also permits
each participant to annually elect to have 25%, 50%, 75% or 100% of his or her
retainer and meeting fees deferred and converted into share equivalents on
substantially the same basis.
A participating director is entitled to benefits under the Directors' Equity
Plan after leaving the Board of Directors unless the Board of Directors elects
to deny or reduce benefits. Benefits may not be denied or reduced if, prior to
leaving the Board of Directors, the director either (i) attained the age of 70
with at least five years of Board service or (ii) attained the age of 65 with at
least ten years of Board service. The units will be converted to a dollar value
at the price of the Common Stock on the later of the first business day of the
seventh month following the month during which the participant ceases to be a
director and the fifth business day of the year next following the year during
which the participant ceased to be a director. Such amount will be paid in ten
annual installments or, at the discretion of the Compensation Committee, in a
lump sum or in fewer than ten installments beginning on the tenth day following
the aforesaid conversion from units to a dollar value. Amounts in Plan accounts
will earn interest from the date converted to a dollar value until paid at a
rate one percent higher than the prevailing yield on United States Treasury
securities having a ten-year maturity on the conversion date.
The units accrued to the accounts of the participating directors under the
Directors' Equity Plan at April 2, 2004 are set forth in the "Deferred Share
Equivalent Units" column of the Beneficial Ownership of Management table on page
11.
Goodyear also sponsors a Directors' Charitable Award Program funded by life
insurance policies owned by Goodyear on the lives of pairs of directors.
Goodyear donates $1 million per director to one or more qualifying charitable
organizations recommended by the paired directors after both of the paired
directors are deceased. Assuming current tax laws remain in effect, Goodyear
will recover the cost of the program over time with the proceeds of the
insurance policies purchased. Directors derive no financial benefit from the
program.
EXECUTIVE OFFICER COMPENSATION
SUMMARY OF COMPENSATION
The table below sets forth information regarding the compensation of the Chief
Executive Officer of Goodyear and the persons who were, at December 31, 2003,
the other four most highly compensated executive officers of Goodyear (the
"Named Officers") for services in all capacities to Goodyear and its
subsidiaries during 2003, 2002 and 2001.
SUMMARY COMPENSATION TABLE
LONG TERM COMPENSATION
-----------------------------------
AWARDS PAYOUTS
ANNUAL COMPENSATION ----------------------- ---------
----------------------------------------- SECURITIES
OTHER UNDERLYING LONG TERM ALL
ANNUAL OPTIONS/ INCENTIVE OTHER
COMPEN- RESTRICTED SARS PLAN COMPEN-
BONUS SATION STOCK (NUMBER PAYOUTS SATION
SALARY (DOLLARS) (DOLLARS) AWARD(S) OF (DOLLARS) (DOLLARS)
NAME AND PRINCIPAL POSITION YEAR (DOLLARS) (1) (2) (DOLLARS) SHARES) (3) (4)
--------------------------- ---- ---------- --------- --------- ---------- ---------- --------- ---------
ROBERT J. KEEGAN 2003 $1,000,000 $509,200 $ 8,256 -0- 200,000 -0- $ -0-
Chairman of the Board, 2002 840,000 -0- 8,250 -0- 140,000 -0- 5,100
Chief Executive Officer 2001 826,667 566,724 81,686 -0- 90,000 -0- 5,100
and President (5)
C. THOMAS HARVIE 2003 415,000 175,000 8,250 -0- 42,700 -0- -0-
Senior Vice President, General 2002 415,000 102,537 8,250 -0- 32,000 -0- 6,655
Counsel and Secretary 2001 410,000 271,408 620 -0- 32,000 -0- 16,208
CHRISTOPHER W. CLARK 2003 310,083 256,888 2,000 -0- 26,000 -0- -0-
Senior Vice President, 2002 295,000 171,000 -- -0- 18,000 -0- 5,100
Global Sourcing (6) 2001 286,667 207,518 1,500 -0- 18,000 -0- 5,100
ROBERT W. TIEKEN 2003 465,000 84,000 8,256 -0- 45,000 -0- -0-
Executive Vice President and 2002 465,000 82,500 8,250 -0- 40,000 -0- 6,889
Chief Financial Officer 2001 460,000 283,635 -0- -0- 40,000 -0- 15,404
JARRO F. KAPLAN 2003 281,667 252,666 -0- -0- 26,000 -0- 12,000
President, Eastern Europe, 2002 270,000 255,000 -0- -0- 17,000 -0- 12,000
Africa and Middle East Region (7) 2001 238,009 78,575 -0- -0- 15,000 -0- 12,000
NOTES TO SUMMARY COMPENSATION TABLE:
(1) Amounts awarded under the Performance Recognition Plan. In respect of
2001, the amounts indicated also include amounts awarded in cash and
shares of Common Stock to Messrs. Keegan and Tieken pursuant to one year
performance awards under the 1997 Plan. The payment of all of the award
to Mr. Keegan in respect of 2001, was deferred pursuant to the Deferred
Compensation Plan for Executives. Additional information regarding the
amounts awarded to the Named Officers and other executive officers under
the Performance Recognition Plan for 2003 is contained in the
Compensation Committee Report On Executive Compensation beginning at page
20.
(2) Amounts shown represent the cost to Goodyear of tax and financial
planning assistance provided to the Named Officers by third parties, and
moving expenses of $75,311 paid to Mr. Keegan in 2001.
(3) No payouts were earned in 2003, 2002 or 2001 pursuant to performance
equity grants under the 1997 Plan for performance periods ended December
31, 2003, 2002 or 2001, except as reported at Note 1 above.
(4) All Other Compensation for individuals other than Mr. Kaplan consists of:
(a) for 2002 (i) the value of deferred Common Stock equivalent units
accrued as dividend equivalents during 2002 in respect of units
awarded and deferred in February of 2001, 2000, 1999, 1998 and 1997,
and (ii) $5,100 of matching contributions under Goodyear's Savings
Plan.
(b) for 2001 (i) the value of deferred Common Stock equivalent units
accrued as dividend equivalents during 2001 in respect of units
awarded and deferred in February of 2000, 1999, 1998 and 1997, and
(ii) $5,100 of matching contributions under Goodyear's Savings Plan.
Mr. Kaplan received foreign service premium payments of $12,000 in each of
2003, 2002 and 2001. Mr. Kaplan did not receive matching contributions
under Goodyear's Savings Plan in 2003, 2002 or 2001.
(5) Mr. Keegan became a Goodyear employee on October 1, 2000 and served as
President and Chief Operating Officer from October 3, 2000 until he was
elected the President and Chief Executive Officer effective January 1,
2003. Mr. Keegan became Chairman of the Board effective June 30, 2003.
(6) Mr. Clark has served as Senior Vice President, Global Sourcing since
November 3, 2003. He served as President, Latin America Region, from
August 1, 2002 to November 2, 2003.
(7) Mr. Kaplan has served as President, Eastern Europe, Africa and Middle
East Region since May 7, 2001. He served as Managing Director of Deutsche
Goodyear from 1999 until May 6, 2001.
OPTION/SAR GRANTS IN 2003
The table below shows all grants of stock options and SARs during 2003 to the
Named Officers. Ordinarily, Stock Options and SARs are granted annually in
December of each year.
OPTION/SAR GRANTS IN 2003
INDIVIDUAL GRANTS
---------------------------------------------------------------- POTENTIAL REALIZABLE VALUE
NUMBER OF SECURITIES % OF TOTAL AT ASSUMED ANNUAL RATES OF
UNDERLYING OPTIONS/ EXERCISE STOCK PRICE APPRECIATION FOR
OPTIONS/SARS SARS OR OPTION TERM
GRANTED GRANTED TO BASE PRICE (DOLLARS)(3)(4)
(NUMBER OF EMPLOYEES (DOLLARS PER EXPIRATION ----------------------------
NAME SHARES)(1) IN 2003 SHARE)(2) DATE 5% 10%
---- -------------------- ---------- ------------ ---------- ----------- -------------
Robert J. Keegan 200,000 5.2% $6.81 12-02-13 $856,000 $2,170,000
C. Thomas Harvie 42,700 1.1 6.81 12-02-13 182,756 463,295
Christopher W. Clark 26,000 .7 6.81 12-02-13 111,280 282,100
Robert W. Tieken 45,000 1.2 6.81 12-02-13 192,600 488,250
Jarro F. Kaplan 26,000 .7 6.81 12-02-13 111,280 282,100
NOTES TO OPTION/SAR GRANTS TABLE:
(1) On December 3, 2003, stock options in respect of an aggregate of
3,850,350 shares of Common Stock were granted to 842 persons, including
the Named Officers. All shares are the subject of non-qualified stock
options. Each stock option will become exercisable in respect of 25% of
the shares covered thereby on each of the first four anniversaries of the
grant date. Each unexercised stock option terminates automatically if the
optionee ceases to be an employee of Goodyear or one of its subsidiaries
for any reason, except that (a) upon retirement or disability of the
optionee more than six months after the grant date, the stock option will
become immediately exercisable and remain exercisable until its
expiration date, and (b) in the event of the death of the optionee more
than six months after the grant thereof, each stock option will become
exercisable and remain exercisable for up to three years after the date
of death of the optionee. Each option also includes the right to the
automatic grant of a new option (a "reinvestment option") for that number
of shares tendered in the exercise of the original stock option. The
reinvestment option will be granted on, and will have an exercise price
equal to the fair market value of the Common Stock on, the date of the
exercise of the original stock option and will be subject to the same
terms and conditions as the original stock option except for the exercise
price and the reinvestment option feature.
(2) The exercise price of each stock option is equal to 100% of the per share
fair market value of the Common Stock on the date granted. The option
exercise price and/or withholding tax obligations may be paid by delivery
of shares of Common Stock valued at the market value on the date of
exercise.
(3) The dollar amounts shown reflect calculations at the 5% and 10% rates set
by the Securities and Exchange Commission and, therefore, are not
intended to forecast possible future appreciation, if any, of the price
of the Common Stock. No economic benefit to the optionees is possible
without an increase in price of the Common Stock, which will benefit all
shareholders commensurately.
(4) In order to realize the potential values set forth in the 5% and 10%
columns of the Table, the per share price of the Common Stock would be
$11.09 and $17.66, respectively.
OPTION/SAR 2003 EXERCISES AND YEAR-END VALUES
The table below sets forth certain information regarding option and SAR
exercises during 2003, and the value of options/SARs held at December 31, 2003,
by the Named Officers.
AGGREGATED OPTION/SAR EXERCISES IN 2003 AND
DECEMBER 31, 2003 OPTION/SAR VALUES
NUMBER OF SECURITIES
UNDERLYING
UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS/SARS AT IN-THE-MONEY OPTIONS/SARS
ACQUIRED DECEMBER 31, 2003 AT DECEMBER 31, 2003
ON EXERCISE VALUE (NUMBER OF SHARES) (DOLLARS)(1)
(NUMBER OF REALIZED --------------------------- ---------------------------
NAME SHARES) (DOLLARS) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- --------- ----------- ------------- ----------- -------------
Robert J. Keegan................ -0- -0- 327,500 432,500 $0 $210,000
C. Thomas Harvie................ -0- -0- 140,750 90,950 0 44,835
Christopher W. Clark............ -0- -0- 80,852 53,500 0 27,300
Robert W. Tieken................ -0- -0- 184,250 103,750 0 47,250
Jarro F. Kaplan................. -0- -0- 72,490 48,800 0 27,300
NOTE TO OPTION/SAR EXERCISES AND YEAR-END VALUES TABLE:
(1) Determined using $7.86 per share, the closing price of the Common Stock
on December 31, 2003, as reported on the New York Stock Exchange
Composite Transactions tape.
LONG TERM INCENTIVE AWARDS
The 2002 Performance Plan of the Company (the "2002 Plan") empowers the
Compensation Committee to make grants and awards from time to time until April
15, 2005. Such grants and awards may be incentive or non-qualified stock
options, stock appreciation rights, restricted stock grants, performance grants,
any other stock-based grants and awards authorized by the Committee, or any
combination of any or all of such grants and awards, whether in tandem with each
other or otherwise, to officers and other key employees of the Company and its
subsidiaries.
During 2003, the Company did not make any long term grants or awards to any
Named Officer. Accordingly, the long term incentive plan awards table is
omitted.
OTHER COMPENSATION PLAN INFORMATION
STOCK OPTIONS AND SARS
At May 10, 2004, stock options (including, in the case of certain options,
tandem SARs) in respect of 22,412,744 shares were outstanding under the 2002,
1997 and 1989 Plans having a weighted average exercise price of $28.11.
PERFORMANCE RECOGNITION PLAN
Approximately 768 key employees, including all executive officers of Goodyear,
will participate in the Performance Recognition Plan of Goodyear (the
"Performance Plan") for plan year 2004. On December 1, 2003, the Committee
selected the participants, established their respective target bonuses, and
approved the performance criteria and goals. Awards in respect of plan year 2004
will be made in 2005 based on each participant's level of achievement of his or
her goals, the Chief Executive Officer's (or, in the case of participants who
are not officers, other officers' of Goodyear) evaluation of the extent of the
participant's contribution to Goodyear, and the Committee's determination of the
amount available for payment to the relevant group of participants. Awards, if
any, will be paid (except to the extent deferred by the Committee) in cash.
Target bonuses under the Performance Plan have been established for calendar
year 2004 as follows: Mr. Keegan, $1,300,000; Mr. Harvie, $280,000; Mr. Clark,
$220,000; Mr. Tieken, $330,000; Mr. Kaplan, $190,000, and all participants (768
persons) as a group, $26,167,067.
EXECUTIVE PERFORMANCE PLAN
On December 1, 2003, the Compensation Committee established the Executive
Performance Plan. The purpose of the plan is to provide long-term incentive
compensation opportunities to attract, retain and reward key personnel and to
motivate key personnel to achieve business objectives. Upon the attainment of
performance goals established by the Committee, participants will be eligible to
receive a cash award at the end of the performance period subject to adjustment
and approval by the Committee. No grants were issued under this plan as of
January 1, 2004.
SAVINGS PLAN
Goodyear sponsors the Employee Savings Plan for Salaried Employees (the
"Savings Plan"). An eligible employee, including officers, may contribute 1% to
50% of his or her compensation to the Savings Plan, subject to an annual
contribution ceiling ($13,000 in 2004). Savings Plan participants who are age 50
or older and contributing at the maximum plan limits or at the annual
contribution ceiling are entitled to make "catch-up" contributions annually up
to a specified amount ($3,000 in 2004). Contributions to the Savings Plan are
not included in the current taxable income of the employee
pursuant to Section 401(k) of the Internal Revenue Code of 1986, as amended.
Employee contributions are invested, at the direction of the participant, in any
one or more of the nine available funds and/or in mutual funds under a self
directed account.
Prior to January 1, 2003, Goodyear matched at a 50% rate each dollar
contributed by a participating employee up to a maximum of the lesser of (i) 6%
of the participant's annual compensation or (ii) legally imposed limits.
Goodyear contributions are invested by the Savings Plan trustee in shares of
Common Stock. Goodyear suspended the matching program effective January 1, 2003.
Participants with three years of service or who have attained age 52 may
transfer all or any whole percentage of their employer match funds from the
Goodyear Stock Fund to any one or more of the other investment alternatives.
SEVERANCE PLAN
The Goodyear Employee Severance Plan (the "Severance Plan"), adopted on
February 14, 1989, provides that, if a full-time salaried employee of Goodyear
or any of the domestic subsidiaries (who participates in the Salaried Pension
Plan) with at least one year of service is involuntarily terminated (as defined
in the Severance Plan) within two years following a change in control, the
employee is entitled to severance pay, either in a lump sum or, at the
employee's election, on a regular salary payroll interval basis.
The severance pay will equal the sum of (a) two weeks' pay for each full year
of service with Goodyear and its subsidiaries and (b) one month's pay for each
$12,000 of total annual compensation (the base salary rate in effect at the date
of termination, plus all incentive compensation received during the twelve
months prior to his or her separation). Severance pay may not exceed two times
the employee's total annual compensation.
In addition, medical benefits and basic life insurance coverage will be
provided to each employee on the same basis as in effect prior to his or her
separation for a period of weeks equal to the number of weeks of severance pay.
A change in control is deemed to occur upon the acquisition of 35% or more of
the Common Stock by any "acquiring person" or any change in the composition of
the Board of Directors of Goodyear with the effect that a majority of the
directors are not "continuing directors."
If the Named Officers had been involuntarily terminated as of December 31,
2003 (following a change in control), the amount of severance pay due would have
been: Mr. Keegan $2,000,000; Mr. Harvie, $965,000; Mr. Clark $1,012,000; Mr.
Tieken, $1,095,000; and Mr. Kaplan $1,080,000.
The Company also follows general guidelines for providing severance benefits
to executive officers of the Company whose employment terminates prior to
retirement, and under appropriate circumstances. Executive officers eligible for
such benefits typically receive a separation allowance based on individual
circumstances, including length of service, in an amount generally equivalent to
6 to 18 months of base salary plus an amount based on the individual's target
bonus then in effect over an equivalent period. The separation allowance may be
paid in a single lump sum or in installments. The Company may also provide
limited outplacement and personal financial planning services to eligible
executive officers following their termination.
DEFERRED COMPENSATION PLAN
Goodyear's Deferred Compensation Plan for Executives provides that an eligible
employee may elect to defer all or a portion of his or her Performance Plan
award and/or annual salary by making a timely deferral election. Several
deferral period options are available. All amounts deferred earn amounts
equivalent to the returns on one or more of five reference investment funds, as
selected by the participant. The plan was amended in 2002 to eliminate a
provision that required the automatic deferral of any cash compensation earned
which, if paid as and when due, would not be deductible by Goodyear for federal
income tax purposes by reason of Section 162(m) of the Code.
RETIREMENT BENEFITS
Goodyear maintains a Salaried Pension Plan (the "Pension Plan"), a defined
benefit plan qualified under the Code, in which many salaried employees,
including most executive officers, participate. The Pension Plan permits any
eligible employee to make monthly optional contributions up to a maximum 2004
contribution of $3,660.50. The Code limits the maximum amount of earnings that
may be used in calculating benefits under the Pension Plan, which limit is
$205,000 for 2004. The Pension Plan provides benefits to participants who have
at least five years of service upon any termination of employment.
Goodyear also maintains a Supplementary Pension Plan (the "Supplementary
Plan"), a non-qualified, unfunded plan which provides additional retirement
benefits to certain officers and other key employees. The Supplementary Plan
provides pension benefits to participants who have at least 30 years of service
or have ten years of service and are age 55 or older.
Under the Pension Plan and the Supplementary Plan (the "Pension Plans"),
benefits payable to a participant who retires between ages 55 and 65 are subject
to a reduction for each full year of retirement before age 65. Participants may
elect a lump sum payment of benefits under the Pension Plans, subject to the
approval of the
Compensation Committee in respect of benefits under the Supplementary Plan.
The table below shows estimated annual benefits payable at selected earnings
levels under the Pension Plans assuming retirement on July 1, 2004 at age 65
after selected periods of service.
The pension benefit amounts shown include the maximum benefits obtainable and
assume payments are made on a five year certain and life annuity basis and are
not subject to any deduction for social security or any other offsets. Pension
benefits are based on the retiree's highest average annual earnings, consisting
of salary and cash payments under the Performance Recognition Plan, for any five
calendar years out of the ten years immediately preceding his or her retirement
(assuming full participation in the contributory feature of the Pension Plan).
Earnings covered by the Pension Plans are substantially equivalent to the sum
of the amounts set forth under the "Salary" and "Bonus" columns of the Summary
Compensation Table on page 13. The years of credited service under the Pension
Plans for the Named Officers are: Mr. Keegan, 32 years (Supplementary Plan
only); Mr. Harvie, 8 years; Mr. Clark, 30 years; Mr. Tieken, 9 years, and Mr.
Kaplan 34 years.
PENSION PLAN TABLE
5 YEAR AVERAGE ESTIMATED ANNUAL BENEFITS UPON RETIREMENT AT JULY 1, 2004, FOR YEARS OF SERVICE INDICATED.
ANNUAL -------------------------------------------------------------------------------------------
REMUNERATION 10 YEARS 15 YEARS 25 YEARS 30 YEARS 35 YEARS 40 YEARS 45 YEARS
-------------- --------- --------- ----------- ----------- ----------- ----------- -----------
$ 250,000 $ 50,064 $ 68,625 $ 99,049 $ 111,190 $ 118,264 $ 124,853 $ 131,423
500,000 105,064 143,625 206,549 231,190 245,764 259,853 273,923
750,000 160,064 218,625 314,049 351,190 373,264 394,853 416,423
1,000,000 215,064 293,625 421,549 471,190 500,764 529,853 558,923
1,250,000 270,064 368,625 529,049 591,190 628,264 664,853 701,423
1,500,000 325,064 443,625 636,549 711,190 755,764 799,853 843,923
1,750,000 380,064 518,625 744,049 831,190 883,264 934,853 986,423
2,000,000 435,064 593,625 851,549 951,190 1,010,764 1,069,853 1,128,923
2,500,000 545,064 743,625 1,066,549 1,191,190 1,265,764 1,339,853 1,413,923
EMPLOYMENT AGREEMENT
Mr. Keegan and Goodyear entered into an agreement, dated September 11, 2000,
which provided, among other things, for the employment of Mr. Keegan as
President and Chief Operating Officer.
Under the agreement, Mr. Keegan received an initial base salary of $800,000
per year and a bonus for 2000 of $432,000. The agreement also provided an annual
bonus target of $640,000 for 2001. In accordance with the agreement and
determinations of the Compensation Committee, Mr. Keegan was also granted a
stock option for 250,000 shares of Common Stock on October 3, 2000, at an $18.25
per share exercise price. The agreement also set forth the Company's expectation
with respect to grants to be made under Goodyear's long-term incentive program.
The agreement stated that the target amount of stock option grants for Mr.
Keegan's position was 140,000 shares. The agreement noted that this amount was
subject to reduction if the Company adopted an additional component to the
program.
As contemplated by the agreement, on December 4, 2000, Mr. Keegan was granted
stock options for 80,000 shares of Common Stock at an exercise price of $17.68
per share and on December 5, 2000 he was awarded performance unit grants for
12,000 units for the performance period ending December 31, 2001, for 24,000
units for the performance period ending December 31, 2002, and for 36,000 units
for the performance period ending December 31, 2003.
In accordance with the agreement and under the 1997 Plan, Mr. Keegan entered
into a Restricted Stock Purchase Agreement dated October 3, 2000, pursuant to
which he purchased 50,000 shares of the Common Stock for $.01 per share, which
shares could not be transferred by Mr. Keegan prior to October 3, 2002 and were
subject to a repurchase option whereby Goodyear could have repurchased all or a
portion of such shares at $.01 per share through October 3, 2002 if Mr. Keegan
ceased to be employed by Goodyear for any reason (other than his death or
disability) prior to October 3, 2002. On October 3, 2002 Goodyear's conditional
repurchase option expired and all other restrictions on transfer lapsed.
Mr. Keegan will also receive a total pension benefit equal to what he would
have earned under the Pension Plans if his service with Goodyear were equal to
the total of his service with Goodyear and Eastman Kodak Company. Mr. Keegan
also received a $10,000 relocation allowance. He also receives the same
non-salary
benefits generally made available to Goodyear executive officers.
Mr. Keegan's agreement was supplemented on February 3, 2004 to provide for the
payment of severance compensation to Mr. Keegan upon the termination of his
employment with Goodyear under the circumstances outlined in the supplemental
agreement. If paid, the severance compensation would consist of (i) two times
the sum of Mr. Keegan's annual base salary and target bonus then in effect, plus
(ii) the pro rata portion of Mr. Keegan's target bonus for the then current
fiscal year. In the event that severance compensation is paid to Mr. Keegan
under the agreement, the agreement restricts Mr. Keegan from participating in
any business that competes with Goodyear for a period of two years. The term of
the supplemental agreement is from February 3, 2004 to February 28, 2009. If Mr.
Keegan's employment was terminated as of December 31, 2003 and the supplemental
agreement was in effect at that time, the amount of severance due Mr. Keegan
would have been $4,000,000. This amount would not be payable if Mr. Keegan
received benefits under previously described Severance Plan.
CONSULTING AGREEMENT
Mr. Samir G. Gibara and Goodyear entered into an agreement, dated February 4,
2003, which provided for the retention of Mr. Gibara as a consultant to Goodyear
from January 1, 2003 through December 31, 2003. Under the agreement, Mr. Gibara
provided assistance and advice to Goodyear and received $180,000 paid in equal
monthly installments. The payments under the consulting agreement were in
addition to any fees Mr. Gibara received as a non-employee director. Mr. Gibara
previously served as Goodyear's Chief Executive Officer from January 1, 1996 to
December 31, 2002 and as its Chairman of the Board of Directors from July 1,
1996 to June 30, 2003.
OTHER MATTERS
During 2003, Goodyear and its subsidiaries in the ordinary course of their
business and at competitive prices and terms made sales to or purchases from, or
engaged in other transactions with, corporations of which certain Goodyear
non-employee directors are executive officers and/or directors. Goodyear does
not consider the transactions to be material to its business and believes such
transactions were not material in relation to the business of such other
corporations or the interests of the directors concerned.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE POLICIES AND PRACTICES
The Board of Directors of Goodyear (the "Board") has delegated to the
Compensation Committee of the Board (the "Committee") primary responsibility for
establishing and administering the compensation programs of Goodyear for its
executive officers and other key personnel. In performing its duties, the
Committee meets with the Chief Executive Officer to review compensation policy
and specific levels of compensation paid to the executive officers and other key
personnel, administers Goodyear's plans for its executive officers and certain
other key personnel and reports and makes recommendations to the Board regarding
executive compensation policies and programs.
The Committee annually reviews Goodyear's executive compensation practices to
determine whether Goodyear's executive compensation practices (a) enable
Goodyear to attract and retain qualified and experienced executive officers and
other key personnel, (b) will motivate executive officers and other key
personnel to attain appropriate short term and long term performance goals and
to manage Goodyear for sustained long term growth, and (c) align the interests
of executive officers and other key personnel with the interests of the
shareholders.
Goodyear provides compensation in the form of: (1) competitive salaries; (2)
annual cash bonuses based on performance measured against specific goals; and
(3) long term compensation in the form of Common Stock of Goodyear and/or cash
pursuant to performance unit grants with multi-year performance periods and
stock options granted at the fair market value of the Common Stock on the date
of grant.
Executive compensation programs are designed so that a substantial percentage
of each executive officer's compensation is dependent upon corporate performance
and appreciation in the value of Common Stock.
In addition, the Committee desires to encourage ownership of Common Stock by
executive officers by providing forms of performance-based incentive
compensation that give executive officers the opportunity to acquire shares of
Common Stock. In furtherance of this objective, the Chief Executive Officer
reviews ownership levels among the executive officers and reports them to the
Committee.
Section 162(m) of the Internal Revenue Code (the "Code") provides that
compensation paid to a public company's chief executive officer and its four
other highest paid executive officers in excess of $1 million is not deductible
unless such compensation is paid only upon the achievement of objective
performance goals where certain procedural requirements have been satisfied.
Alternatively, such compensation may be deferred until the executive officer is
no longer a covered person under Section 162(m) of the Code. The Committee does
not mandate the automatic deferral of compensation of any cash compensation
earned which, if paid as and when due, would not be deductible by Goodyear for
federal income tax purposes by reason of Section 162(m) of the Code. In 2003, no
executive officer was paid in excess of $1 million.
COMPENSATION OF EXECUTIVE OFFICERS
SALARIES AND ANNUAL BONUS. The Committee met with the Chief Executive Officer
to receive his recommendations regarding 2003 adjustments to the salary and
annual bonus guidelines for each executive officer. The guidelines for each
position were based primarily on market data from two generally available
surveys (one of more than 400 companies and the other of more than 700
companies) and one independent 2002 survey (46 companies with median sales of
$23.8 billion) of the salary and annual bonus practices of other companies. The
Committee generally establishes salary and annual performance bonus guidelines
at levels that approximate the median (the 50th percentile), determined
utilizing regression analysis based on revenues, of such kinds of compensation
paid by the surveyed companies. In addition to the individual position data
surveys, three other general surveys indicating past, present and projected
salary and bonus structures and annual increases for executive positions were
reviewed.
The Committee also considered the Chief Executive Officer's recommendations,
which were based in substantial part on the aforesaid guidelines as well as on
certain subjective factors, including his evaluation of the performance of each
executive officer, Goodyear's recent performance and general economic and
competitive conditions.
As a result, the Committee did not grant salary merit increases to any
executive officer in 2003. However, salary adjustments were granted to a small
group of executive officers whose salaries were substantially below the
guideline for their position. In addition, salary increases were awarded in 2003
to certain executive officers that moved to positions with significant increases
in responsibility. In cases where the promoted officer's salary was
substantially below the guideline for the officer's new
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