Document:

EX-4.1

 

Exhibit 4.1

WARRANT AGREEMENT

Dated as of

December 10, 2004

between

LUCENT TECHNOLOGIES INC.

and

THE BANK OF NEW YORK,

as Warrant Agent

Warrants for

Common Stock of

Lucent Technologies Inc.

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page

	 
	 	ARTICLE I	 	 	 	 
	 
	 	Definitions	 	 	 	 
	SECTION 1.01
	 	Definitions	 	 	1	 
	SECTION 1.02.
	 	Other Definitions	 	 	3	 
	SECTION 1.03.
	 	Rules of Construction	 	 	4	 
	 
	 	ARTICLE II	 	 	 	 
	 
	 	Warrant Certificates	 	 	 	 
	SECTION 2.01.
	 	Form and Dating	 	 	4	 
	SECTION 2.02.
	 	Execution and Countersignature	 	 	5	 
	SECTION 2.03.
	 	Certificate Register	 	 	6	 
	SECTION 2.04.
	 	Transfer and Exchange	 	 	6	 
	SECTION 2.05.
	 	Certificated Warrants	 	 	8	 
	SECTION 2.06.
	 	Replacement Certificates	 	 	8	 
	SECTION 2.07.
	 	Outstanding Warrants	 	 	8	 
	SECTION 2.08.
	 	Cancelation	 	 	9	 
	SECTION 2.09.
	 	CUSIP Numbers	 	 	9	 
	 
	 	ARTICLE III	 	 	 	 
	 
	 	Exercise Terms	 	 	 	 
	SECTION 3.01.
	 	Exercise	 	 	9	 
	SECTION 3.02.
	 	Exercise Periods	 	 	9	 
	SECTION 3.03.
	 	Expiration	 	 	10	 
	SECTION 3.04.
	 	Manner of Exercise	 	 	10	 
	SECTION 3.05.
	 	Issuance of Warrant Shares	 	 	10	 
	SECTION 3.06.
	 	Fractional Warrant Shares	 	 	10	 
	SECTION 3.07.
	 	Reservation of Warrant Shares	 	 	11	 
	SECTION 3.08.
	 	Compliance with Law	 	 	11	 
	 
	 	ARTICLE IV	 	 	 	 
	 
	 	Adjustment and Notice Provisions	 	 	 	 
	SECTION 4.01.
	 	Adjustment of Exercise Price	 	 	12	 
	SECTION 4.02.
	 	No Adjustment to Exercise Price	 	 	12	 
	SECTION 4.03.
	 	Adjustment to Number of Shares	 	 	12	 
	SECTION 4.04.
	 	Reorganizations	 	 	13	 
	SECTION 4.05.
	 	Exercise Price Not Less Than Par Value	 	 	13	 

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	 	 	 	 	Page

	SECTION 4.06.
	 	Notice of Certain Action	 	 	13	 
	SECTION 4.07.
	 	Notice of Adjustments	 	 	14	 
	SECTION 4.08.
	 	Adjustment to Warrant Certificate	 	 	14	 
	 
	 	ARTICLE V	 	 	 	 
	 
	 	Registration Rights	 	 	 	 
	SECTION 5.01.
	 	Effectiveness of Registration Statement	 	 	15	 
	SECTION 5.02.
	 	Suspension	 	 	15	 
	SECTION 5.03.
	 	Blue Sky	 	 	15	 
	SECTION 5.04.
	 	Additional Acts	 	 	15	 
	SECTION 5.05.
	 	Expenses	 	 	16	 
	 
	 	ARTICLE VI	 	 	 	 
	 
	 	Warrant Agent	 	 	 	 
	SECTION 6.01.
	 	Appointment of Warrant Agent; Standard of Care; Limitation of Liability; Force Majeure	 	 	16	 
	SECTION 6.02.
	 	Rights and Duties of Warrant Agent	 	 	16	 
	SECTION 6.03.
	 	Individual Rights of Warrant Agent	 	 	17	 
	SECTION 6.04.
	 	Warrant Agent's Disclaimer	 	 	18	 
	SECTION 6.05.
	 	Compensation and Indemnity	 	 	18	 
	SECTION 6.06.
	 	Successor Warrant Agent	 	 	18	 
	 
	 	ARTICLE VII	 	 	 	 
	 
	 	Miscellaneous	 	 	 	 
	SECTION 7.01.
	 	Persons Benefiting	 	 	20	 
	SECTION 7.02.
	 	Rights of Holders	 	 	20	 
	SECTION 7.03.
	 	Amendment	 	 	20	 
	SECTION 7.04.
	 	Notices	 	 	21	 
	SECTION 7.05.
	 	Governing Law; Jurisdiction; Certain Waivers	 	 	22	 
	SECTION 7.06.
	 	Successors	 	 	22	 
	SECTION 7.07.
	 	Multiple Originals	 	 	22	 
	SECTION 7.08.
	 	Table of Contents	 	 	22	 
	SECTION 7.09.
	 	Severability	 	 	22	 
	EXHIBIT A
	 	Form of Face of Warrant Certificate	 	 	 	 

- ii -

 

     WARRANT AGREEMENT dated as of December 10, 2004 (this
“Agreement”), between LUCENT TECHNOLOGIES INC., a Delaware
corporation (the “Company”), and THE BANK OF NEW YORK, a
New York banking corporation, as Warrant Agent (the
“Warrant Agent”).

          The Company desires to issue the warrants (the “Warrants”) described
herein. The Warrants will initially entitle the holders thereof (the
“Holders”) to purchase 200,000,000 shares of its common stock, par value $0.01
per share (the “Common Stock”) (the shares of Common Stock issuable on exercise
of the Warrants being referred to herein as the “Warrant Shares”). The
Warrants are being issued in connection with the settlement of certain
litigations previously pending against the Company and other defendants in the
United States District Court for the District of New Jersey, in accordance with
the Settlement Agreement, dated September 22, 2003, between the Company and the
participants in such settlement.

          The Company desires the Warrant Agent to act on behalf of the Company in
connection with the issuance of the Warrants as provided herein and the Warrant
Agent is willing to so act.

          Each party agrees as follows for the benefit of the other party and for
the equal and ratable benefit of the Holders of Warrants:

ARTICLE I

Definitions

          SECTION 1.01. Definitions.

          “Affiliate” of any Person means (i) any other Person which, directly or
indirectly, is in control of, is controlled by or is under common control with
such Person, or (ii) any other Person who is a director or executive officer
(A) of such Person, (B) of any subsidiary of such Person or (C) of any Person
described in clause (i) above. For purposes hereof, (a) “control” of a Person
means the power, direct or indirect, to direct or cause the direction of the
management and policies of such Person whether by contract or otherwise and (b)
beneficial ownership of 10% or more of the voting common equity (on a fully
diluted basis) or warrants to purchase such equity (whether or not currently
exercisable) of a Person shall be deemed to be in control of such Person; and
the terms “controlling” and “controlled” have meanings correlative to the
foregoing.

          “Board” means the Board of Directors of the Company or any committee
thereof duly authorized to act on behalf of such Board of Directors.

          “Business Day” means each day that is not a Saturday, a Sunday or a day on
which banking institutions are not required to be open in the State of New
York.

          “Capital Stock” of any Person means any and all shares, interests, rights
to purchase, warrants, options, participations or other equivalents of or
interests in (however

 

 

designated) equity of such Person, including any Preferred Stock, but
excluding any debt securities convertible into such equity.

          “Certificated Warrants” means certificated Warrants in fully registered
definitive form.

          “Common Stock” means the common stock, par value $0.01 per share, of the
Company.

          “Current Market Value” per share of Common Stock at any date means the
average of the daily Closing Prices for each Business Day during the period
commencing 20 Business Days before such date and ending on the date one day
prior to such date. The Closing Price for each day (the “Closing Price”) shall
be the last reported sales price or, in case no such reported sale takes place
on such date, the average of the reported closing bid and asked prices, in
either case on The New York Stock Exchange (the “NYSE”) or The Nasdaq National
Market (the “NNM”), as applicable, or, if the Common Stock is not listed or
admitted to trading on the NYSE or the NNM, the principal national securities
exchange or quotation system on which the Common Stock is quoted or listed or
admitted to trading or, if not quoted or listed or admitted to trading on any
national securities exchange or quotation system, the closing sales price or,
in case no reported sale takes place, the average of the closing bid and asked
prices, as furnished by any two members of the National Association of
Securities Dealers, Inc. selected from time to time by the Company for that
purpose. If no such prices are available, the Current Market Price per share
shall be the fair value of a share of Common Stock as reasonably determined in
good faith by the Board of Directors of the Company (which shall be evidenced
by an Officers’ Certificate delivered to the Warrant Agent).

          “Date of Distribution” means December 10, 2004.

          “Depository” means The Depository Trust Company, its nominees and their
respective successors.

          “Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.

          “Exercise Date” means, for a given Warrant, the day on which such Warrant
is exercised pursuant to Section 3.04.

          “Issue Date” means the date on which the Warrants are initially issued.

          “Officer” means, with respect to any person, the Chairman of the Board,
the Chief Executive Officer, the President, the Chief Operating Officer, the
Chief Financial Officer, any Vice President, the Treasurer, any Assistant
Treasurer, the Controller, or the Secretary or an Assistant Secretary of the
Company.

          “Officers’ Certificate” means a certificate signed by two Officers.

2

 

          “Opinion of Counsel” means a written opinion from legal counsel who is
reasonably acceptable to the Warrant Agent. Such counsel may be an employee of
or counsel to the Company or the Warrant Agent.

          “Person” means any individual, corporation, partnership, joint venture,
limited liability company, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.

          “Preferred Stock”, as applied to the Capital Stock of any Person, means
Capital Stock of any class or classes (however designated) which is preferred
as to the payment of dividends or distributions, or as to the payment of assets
upon any voluntary or involuntary liquidation or dissolution of such Person,
over shares of Capital Stock of any other class of such Person.

          “SEC” means the Securities and Exchange Commission.

          “Securities” means the Warrants and the Warrant Shares.

          “Securities Act” means the U.S. Securities Act of 1933, as amended.

          “Warrant Certificates” mean the Global Warrants or the Certificated
Warrants issued by the Company under this Agreement representing the Warrants.

          “Warrant Custodian” means the custodian with respect to a Global Warrant
(as appointed by the Depository) or any successor person thereto and shall
initially be the Warrant Agent.

          “Warrant Shares” mean the shares of Common Stock (and any other
securities) for which the Warrants are exercisable or which have been issued
upon exercise of Warrants.

          SECTION 1.02. Other Definitions.

	 	 	 	 	 
	 	 	Defined in
	Term
	 	Section

	“Agent Members”
	 	 	2.01	(b)
	“Agreement”
	 	Recitals
	“Certificate Register”
	 	 	2.03	 
	“Common Shelf Registration Statement”
	 	 	5.01	 
	“Common Stock”
	 	Recitals
	“Company”
	 	Recitals
	“Exercise Price”
	 	 	3.01	 
	“Expiration Date”
	 	 	3.02	(b)
	“Global Warrant”
	 	 	2.01	(a)
	“Holders”
	 	Recitals
	“Losses”
	 	 	6.01	 
	“Registrar”
	 	 	3.07	 

3

 

	 	 	 	 	 
	 	 	Defined in
	Term
	 	Section

	“Reorganization”
	 	 	4.04	(a)
	“Stock Transfer Agent”
	 	 	3.05	 
	“Warrant Agent”
	 	Recitals
	“Warrants”
	 	Recitals

          SECTION 1.03. Rules of Construction. Unless the text otherwise requires:

     (i) a defined term has the meaning assigned to it;

     (ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting
principles as in effect from time to time;

     (iii) “or” is not exclusive;

     (iv) “including” means including, without limitation; and

     (v) words in the singular include the plural and words in the plural
include the singular.

ARTICLE II

Warrant Certificates

          SECTION 2.01. Form and Dating. (a) Global Warrants. The Warrants shall
be issued initially in the form of one or more permanent Global Warrants, in
definitive, fully registered form with the global securities legend set forth
in Exhibit A hereto (each, a “Global Warrant”), which shall be deposited on
behalf of the Holders with the Warrant Agent, as custodian for the Depository
(or with such other custodian as the Depository may direct), and registered in
the name of the Depository or a nominee of the Depository, duly executed by the
Company and countersigned by the Warrant Agent as hereinafter provided.

          (b) Book-Entry Provisions. (i) This Section 2.01(b) shall apply only to
a Global Warrant deposited with or on behalf of the Depository.

     (ii) The Company shall execute and the Warrant Agent shall, in
accordance with Section 2.02, countersign and deliver initially one or
more Global Warrants that (A) shall be registered in the name of the
Depository for such Global Warrant or Global Warrants or the nominee of
the Depository and (B) shall be delivered by the Warrant Agent to the
Depository or pursuant to the Depository’s instructions or held by the
Warrant Agent as custodian for the Depository.

4

 

     (iii) Members of, or participants in, the Depository (“Agent
Members”) shall have no rights under this Agreement with respect to any
Global Warrant held on their behalf by the Depository or by the Warrant
Agent as the custodian of the Depository or under such Global Warrant,
and the Depository may be treated by the Company, the Warrant Agent and
any agent of the Company or the Warrant Agent as the absolute owner of
such Global Warrant for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Company, the Warrant Agent or
any agent of the Company or the Warrant Agent from giving effect to any
written certification, proxy or other authorization furnished by the
Depository or impair, as between the Depository and its Agent Members,
the operation of customary practices of the Depository governing the
exercise of the rights of a holder of a beneficial interest in any Global
Warrant.

          (c) Certificated Securities. Except as provided in Section 2.04 or 2.05,
owners of beneficial interests in Global Warrants will not be entitled to
receive physical delivery of Certificated Warrants.

          SECTION 2.02. Execution and Countersignature. Two Officers shall sign the
Warrant Certificates for the Company by manual or facsimile signature.

          If an Officer whose signature is on a Warrant Certificate no longer holds
that office at the time the Warrant Agent countersigns the Warrant Certificate,
the Warrants evidenced by such Warrant Certificate shall be valid nevertheless.

          The Warrant Agent shall initially countersign and deliver Warrant
Certificates entitling the Holders thereof to purchase in the aggregate not
more than 200,000,000 Warrant Shares upon a written order of the Company signed
by two Officers of the Company.

          The Warrant Agent may appoint an agent reasonably acceptable to the
Company to countersign the Warrant Certificates. Unless limited by the terms
of such appointment, such agent may countersign Warrant Certificates whenever
the Warrant Agent may do so. Each reference in this Agreement to
countersignature by the Warrant Agent includes countersignature by such agent.
Such agent will have the same rights as the Warrant Agent for service of
notices and demands.

          At any time and from time to time after the execution of this Agreement,
the Warrant Agent or an agent reasonably acceptable to the Company shall upon
receipt of a written order of the Company signed by two Officers of the Company
manually countersign for original issue a Warrant Certificate evidencing the
number of Warrants specified in such order; provided, however, that the Warrant
Agent shall be entitled to receive an Officers’ Certificate and an Opinion of
Counsel of the Company that it may reasonably request in connection with such
countersignature of Warrants. Such order shall specify the number of Warrants
to be evidenced on the Warrant Certificate to be countersigned, the date on
which such Warrant Certificate is to be countersigned and the number of
Warrants then authorized.

5

 

          The Warrants evidenced by a Warrant Certificate shall not be valid until
an authorized signatory of the Warrant Agent or its agent as provided above
manually countersigns the Warrant Certificate. The signature shall be
conclusive evidence that the Warrant Certificate has been countersigned under
this Agreement.

          SECTION 2.03. Certificate Register. The Warrant Agent shall keep a
register (the “Certificate Register”) of the Warrant Certificates and of their
transfer and exchange. The Certificate Register shall show the names and
addresses of the respective Holders and the date and number of Warrants
evidenced on the face of each of the Warrant Certificates. The Company and the
Warrant Agent may deem and treat the Person in whose name a Warrant Certificate
is registered as the absolute owner of such Warrant Certificate for all
purposes whatsoever and neither the Company nor the Warrant Agent shall be
affected by notice to the contrary.

          SECTION 2.04. Transfer and Exchange. (a) Transfer and Exchange of Global
Warrants. (i) The transfer and exchange of Global Warrants or beneficial
interests therein shall be effected through the Depository, in accordance with
this Agreement (including applicable restrictions on transfer set forth herein)
and the procedures of the Depository therefor. A transferor of a beneficial
interest in a Global Warrant shall deliver to the Depository a written order
given in accordance with the Depository’s procedures containing information
regarding the participant account of the Depository to be credited with a
beneficial interest in the Global Warrant.

     (ii) Notwithstanding any other provisions of this Agreement (other
than the provisions set forth in Section 2.05), a Global Warrant may not
be transferred as a whole except by the Depository to a nominee of the
Depository or by a nominee of the Depository to the Depository or another
nominee of the Depository or by the Depository or any such nominee to a
successor Depository or a nominee of such successor Depository.

     (iii) In the event that a Global Warrant is exchanged and
transferred for Warrants in definitive registered form pursuant to
Section 2.05, such Warrants may be exchanged only in accordance with such
procedures as are substantially consistent with the provisions of this
Section 2.04 and such other procedures as may from time to time be
adopted by the Company.

          (b) Cancelation or Adjustment of Global Warrant. At such time as all
beneficial interests in a Global Warrant have been exchanged for Certificated
Warrants, redeemed, repurchased or canceled, such Global Warrant shall be
returned to the Depository for cancelation or retained and canceled by the
Warrant Agent. At any time prior to such cancelation, if any beneficial
interest in a Global Warrant is exchanged for Certificated Warrants, redeemed,
repurchased or canceled, the number of Warrants represented by such Global
Warrant shall be reduced and an adjustment shall be made on
the books and records of the Warrant Agent (if it is then the Warrant
Custodian for such Global Warrant) with respect to such Global Warrant, by the
Warrant Agent, to reflect such reduction.

6

 

          (c) Obligations with Respect to Transfers and Exchanges of Warrants. (i)
To permit registrations of transfers and exchanges, the Company shall execute
and the Warrant Agent shall countersign Certificated Warrants and Global
Warrants as required pursuant to the provisions of Section 2.02 and this
Section 2.04.

     (ii) Any service charge for any registration of transfer or
exchange, or any transfer tax, assessments, or similar governmental
charge payable in connection therewith, shall be paid by the Holder.

     (iii) Prior to the due presentation for registration of transfer of
any Warrant, the Company and the Warrant Agent may deem and treat the
Person in whose name a Warrant is registered as the absolute owner of
such Warrant, and neither the Company nor the Warrant Agent shall be
affected by notice to the contrary.

     (iv) All Warrants issued upon any transfer or exchange pursuant to
the terms of this Agreement shall be the valid obligations of the
Company, entitled to the same benefits under this Agreement as the
Warrants surrendered upon such transfer or exchange.

          (d) No Obligation of the Warrant Agent. (i) The Warrant Agent shall have
no responsibility or obligation to any beneficial owner of a Global Warrant, a
member of, or a participant in the Depository or other Person with respect to
the accuracy of the records of the Depository or its nominee or of any
participant or member thereof, with respect to any ownership interest in the
Warrants or with respect to the delivery to any participant, member, beneficial
owner or other Person (other than the Depository) of any notice or the payment
of any amount, under or with respect to such Warrants. All notices and
communications to be given to the Holders and all payments to be made to
Holders under the Warrants shall be given or made only to or upon the order of
the registered Holders (which shall be the Depository or its nominee in the
case of a Global Warrant). The rights of beneficial owners in any Global
Warrant shall be exercised only through the Depository subject to the
applicable rules and procedures of the Depository. The Warrant Agent may rely
and shall be fully protected in relying upon information furnished by the
Depository with respect to its members, participants and any beneficial owners.

     (ii) The Warrant Agent shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer
imposed under this Agreement or under applicable law with respect to any
transfer of any interest in any Warrant (including any transfers between
or among the Depository participants, members or beneficial owners in any
Global Warrant) other than to
require delivery of such certificates and other documentation or
evidence as are expressly required by, and to do so if and when expressly
required by, the terms of this Agreement, and to examine the same to
determine substantial compliance as to form with the express requirements
hereof.

7

 

          SECTION 2.05. Certificated Warrants. (a) A Global Warrant deposited with
the Depository or with the Warrant Agent as custodian for the Depository
pursuant to Section 2.01 shall be transferred to the beneficial owners thereof
in the form of Certificated Warrants in a number equal to the number of
Warrants represented by such Global Warrant, in exchange for such Global
Warrant, only if such transfer complies with Section 2.04 and (i) the
Depository notifies the Company that it is unwilling or unable to continue as
depositary for such Global Warrant or if at any time the Depository ceases to
be a “clearing agency” registered under the Exchange Act and, in each such
case, a successor depositary is not appointed by the Company within 90 days of
such notice or (ii) the Company, in its sole discretion, notifies the Warrant
Agent in writing that it elects to cause the issuance of Certificated Warrants
under this Agreement.

          (b) Any Global Warrant that is transferable to the beneficial owners
thereof pursuant to this Section 2.05 shall be surrendered by the Depository to
the Warrant Agent, to be so transferred, in whole or from time to time in part,
without charge, and the Warrant Agent shall countersign and deliver, upon such
transfer of each portion of such Global Warrant, an equal number of
Certificated Warrants.

          (c) Subject to the provisions of Section 2.05(b), the registered Holder of
a Global Warrant may grant proxies and otherwise authorize any Person,
including Agent Members and Persons that may hold interests through Agent
Members, to take any action which a Holder is entitled to take under this
Agreement or the Warrants.

          (d) In the event of the occurrence of either of the events specified in
Section 2.05(a), the Company will promptly make available to the Warrant Agent
a reasonable supply of Certificated Warrants in definitive, fully registered
form.

          SECTION 2.06. Replacement Certificates. If a mutilated Warrant
Certificate is surrendered to the Warrant Agent or if the Holder of a Warrant
Certificate claims that the Warrant Certificate has been lost, destroyed or

wrongfully taken, the Company shall issue and the Warrant Agent shall
countersign a replacement Warrant Certificate if the reasonable requirements of
the Warrant Agent and of Section 8-405 of the Uniform Commercial Code as in
effect in the State of New York are met. If required by the Warrant Agent or
the Company, such Holder shall furnish an indemnity bond sufficient in the
judgment of the Company and the Warrant Agent to protect the Company and the
Warrant Agent from any loss which either of them may suffer if a Warrant
Certificate is replaced. The Company and the Warrant Agent may charge the
Holder for their expenses in replacing a Warrant Certificate. Every
replacement Warrant Certificate evidences an additional obligation of the
Company.

          SECTION 2.07. Outstanding Warrants. Warrants outstanding at any time are
all Warrants evidenced on all Warrant Certificates authenticated by the Warrant
Agent except for those canceled by it and those delivered to it for
cancelation. A Warrant does not cease to be outstanding because an Affiliate
of the Company holds the Warrant. A Warrant ceases to be outstanding if the
Company holds the Warrant.

8

 

          If a Warrant Certificate is replaced pursuant to Section 2.06, the
Warrants evidenced thereby cease to be outstanding unless the Warrant Agent and
the Company receive proof satisfactory to them that the replaced Warrant
Certificate is held by a bona fide purchaser.

          SECTION 2.08. Cancelation. (a) In the event the Company shall purchase
or otherwise acquire Certificated Warrants, the same shall thereupon be
delivered to the Warrant Agent for cancelation.

          (b) The Warrant Agent and no one else shall cancel and destroy all Warrant
Certificates surrendered for transfer, exchange, replacement, exercise or
cancelation and deliver a certificate of such destruction to the Company unless
the Company directs the Warrant Agent to deliver canceled Warrant Certificates
to the Company. The Company may not issue new Warrant Certificates to replace
Warrant Certificates to the extent they evidence Warrants which have been
exercised or Warrants which the Company has purchased or otherwise acquired.

          SECTION 2.09. CUSIP Numbers. The Company in issuing the Warrants may use
“CUSIP” numbers (if then generally in use) and, if so, the Warrant Agent shall
use “CUSIP” numbers in notices as a convenience to Holders; provided, however,
that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Warrant Certificates or as
contained in any notice and that reliance may be placed only on the other
identification numbers printed on the Warrant Certificates.

ARTICLE III

Exercise Terms

          SECTION 3.01. Exercise. Each Warrant shall initially entitle the Holder
thereof, subject to adjustment pursuant to the terms of this Agreement, to
purchase one share of Common Stock for each Warrant evidenced thereby, at an
exercise price (the “Exercise Price”) of $2.75 per share.

          SECTION 3.02. Exercise Periods. (a) Subject to the terms and conditions
set forth herein, the Warrants shall be exercisable at any time and from time
to time on any Business Day after the Common Shelf Registration Statement is
declared effective by the SEC; provided, however, that Holders will be able to
exercise their Warrants only if (i) the Common Shelf Registration Statement
relating to the Warrant Shares is effective and (ii) the Warrant Shares are
qualified for sale or exempt from
qualification under the applicable securities laws of the states or other
jurisdictions in which such Holders reside.

          (b) No Warrant shall be exercisable after the third anniversary of the
Date of Distribution (the “Expiration Date”).

9

 

          SECTION 3.03. Expiration. A Warrant shall terminate and become void as of
the earlier of (i) the close of business on the Expiration Date or (ii) the
date such Warrant is exercised.

          SECTION 3.04. Manner of Exercise. Warrants may be exercised upon (i)
surrender to the Warrant Agent at the office of the Warrant Agent of the
related Warrant Certificate, together with the form of election attached
thereto to purchase Common Stock on the reverse thereof duly filled in and
signed by the Holder thereof, (ii) payment to the Warrant Agent, for the
account of the Company, of the Exercise Price for each Warrant Share or other
security issuable upon the exercise of such Warrants then exercised and (iii)
payment by the Holder to the Warrant Agent of any exercise fee associated with
the exercise of such Warrants. Such payments shall be made in cash or by
certified or official bank check payable to the order of the Warrant Agent or
by wire transfer of funds to an account at the Warrant Agent designated by the
Warrant Agent for such purpose. Subject to Section 3.02, the rights
represented by the Warrants shall be exercisable at the election of the Holders
thereof either in full at any time or from time to time in part, and in the
event that a Warrant Certificate is surrendered for exercise of less than all
the Warrants represented by such Warrant Certificate at any time prior to the
Expiration Date, a new Warrant Certificate representing the remaining Warrants
shall be issued. The Warrant Agent shall countersign and deliver the required
new Warrant Certificates, and the Company, at the Warrant Agent’s request,
shall supply the Warrant Agent with Warrant Certificates duly signed on behalf
of the Company for such purpose.

          SECTION 3.05. Issuance of Warrant Shares. Subject to Section 2.05, upon
the surrender of Warrant Certificates and payment of the per share Exercise
Price, as set forth in Section 3.04, the Company shall issue and cause the
Warrant Agent or, if appointed, a transfer agent for the Common Stock (“Stock
Transfer Agent”) to countersign and deliver to or upon the written order of the
Holder and in such name or names as the Holder may designate, a certificate or
certificates for the number of full Warrant Shares so purchased upon the
exercise of such Warrants or other securities to which it is entitled,
registered or otherwise, to the Person or Persons entitled to receive the same
(including any depositary institution so designated by a Holder), together with
cash as provided in Section 3.06 in respect of any fractional Warrant Shares
otherwise issuable upon such exercise. Such certificate or certificates shall
be deemed to have been issued and any Person so designated to be named therein
shall be deemed to have become a holder of record of such Warrant Shares as of
the date of the surrender of such Warrant Certificates and payment of the per
share Exercise Price, as aforesaid; provided, however, that if, at such date,
the transfer books for the Warrant Shares shall be closed, the certificates for
the Warrant Shares in respect of which such Warrants are then exercised shall
be issuable as of the date on which such books shall next be opened and until
such date the Company shall be under no duty to deliver any certificates for
such Warrant
Shares; provided further, however, that such transfer books, unless
otherwise required by law, shall not be closed at any one time for a period
longer than twenty calendar days.

          SECTION 3.06. Fractional Warrant Shares. The Company shall not be
required to issue fractional Warrant Shares on the exercise of Warrants. If
more than one Warrant shall be exercised in full at the same time by the same
Holder, the number of full

10

 

Warrant Shares which shall be issuable upon such
exercise shall be computed on the basis of the aggregate number of Warrant
Shares which may be purchasable pursuant thereto. If any fraction of a Warrant
Share would, except for the provisions of this Section 3.06, be issuable upon
the exercise of any Warrant (or specified portion thereof), the Company shall
pay an amount in cash equal to the Current Market Value per Warrant Share, as
determined on the day immediately preceding the date the Warrant is presented
for exercise, multiplied by such fraction, computed to the nearest whole cent.

          SECTION 3.07. Reservation of Warrant Shares. The Company shall at all
times keep reserved out of its authorized shares of Common Stock a number of
shares of Common Stock sufficient to provide for the exercise of all
outstanding Warrants. The registrar for the Common Stock (the “Registrar”)
shall at all times until the Expiration Date reserve such number of authorized
shares as shall be required for such purpose. The Company will keep a copy of
this Agreement on file with the Stock Transfer Agent. The Company will supply
such Stock Transfer Agent with duly executed stock certificates for such
purpose and will itself provide or otherwise make available any cash which may
be payable as provided in Section 3.06. The Company will furnish to such Stock
Transfer Agent a copy of all notices of adjustments (and certificates related
thereto) transmitted to each Holder.

          Before taking any action which would cause an adjustment pursuant to
Article IV to reduce the Exercise Price below the then par value (if any) of
the Common Stock, the Company shall take any and all corporate action which
may, in the opinion of its counsel, be necessary in order that the Company may
validly and legally issue fully paid and nonassessable shares of Common Stock
at the Exercise Price as so adjusted.

          The Company covenants that all Warrant Shares which may be issued upon
exercise of Warrants shall, upon issue, be fully paid, nonassessable, free of
preemptive rights, free from all taxes and free from all liens, charges and
security interests with respect to the issue thereof.

          SECTION 3.08. Compliance with Law. (a) Notwithstanding anything in this
Agreement to the contrary, in no event shall a Holder be entitled to exercise a

Warrant unless (i) a registration statement filed under the Securities Act in
respect of the issuance of the Warrant Shares is then effective or (ii) in the
opinion of counsel to the Company addressed to the Warrant Agent the exercise
of such Warrants is exempt from the registration requirements of the Securities
Act and such securities are qualified for sale or exempt from qualification
under the applicable securities laws of the states or other jurisdictions in
which such Holders reside. Until such time as the Warrant Agent shall have
received from the Company an Officers’ Certificate accompanied by either a
registration statement identified as a registration statement described in (i)
or an opinion
of counsel identified as an opinion of counsel described in (ii), the
Warrant Agent need not recognize nor act upon any exercise.

          (b) If any shares of Common Stock required to be reserved for purposes of
the exercise of Warrants require, under any other Federal or state law or
applicable governing rule or regulation of any national securities exchange,
registration

11

 

with or approval of any governmental authority, or listing on any
such national securities exchange before such shares may be issued upon
exercise, the Company will cause such shares to be duly registered or approved
by such governmental authority or listed on the relevant national securities
exchange, as the case may be.

ARTICLE IV

Adjustment and Notice Provisions

          SECTION 4.01. Adjustment of Exercise Price. Subject to the provisions of
this Article IV, the Exercise Price in effect from time to time shall be
subject to adjustment as follows:

          (a) In case the Company shall (i) declare a dividend payable in stock or
make some other distribution on the outstanding shares of its Common Stock in
shares of its Common Stock, (ii) subdivide or reclassify the outstanding shares
of its Common Stock into a greater number of shares or (iii) combine or
reclassify the outstanding shares of its Common Stock into a smaller number of
shares, the Exercise Price, in effect immediately after the record date for
such dividend or distribution or the effective date of such division,
reclassification or combination shall be proportionately adjusted by
multiplying the then Exercise Price by a fraction, the numerator of which shall
be the number of shares of Common Stock outstanding immediately prior to such
event and the denominator of which shall be the number of shares of Common
Stock outstanding immediately after such event, and the product so obtained
shall thereafter be the Exercise Price then in effect. Such adjustment shall
be made successively whenever any event specified above shall occur.

          (b) All calculations under this Section 4.01 shall be made to the nearest
thousandth of a cent.

          SECTION 4.02. No Adjustment to Exercise Price. No adjustment in the
Exercise Price in accordance with the provisions of Section 4.01(a) need be
made if such adjustment would amount to a change in such Exercise Price of less
than ten cents; provided, however, that the amount by which any adjustment is
not made by reason of the provision of this Section 4.02 shall be carried
forward and taken into account at the time of any subsequent adjustment in the
Exercise Price.

          SECTION 4.03. Adjustment to Number of Shares. Upon each adjustment of the
Exercise Price pursuant to Section 4.01(a), each Warrant shall thereupon
evidence the right to purchase that number of shares of Common Stock
(calculated to the nearest hundredth of a share) obtained by multiplying the
number of shares of Common Stock purchasable immediately prior to such adjustment
upon exercise of the Warrant by the Exercise Price in effect immediately prior
to such adjustment and dividing the product so obtained by the Exercise Price
in effect immediately after such adjustment.

12

 

          SECTION 4.04. Reorganizations. (a) Except as provided in Section
4.04(b), in case of any capital reorganization, consolidation or merger of the
Company (other than in the cases referred to in Section 4.01 or the
consolidation or merger of the Company with or into another corporation in
which the Company is the continuing corporation and which does not result in
any reclassification of the outstanding shares of Common Stock or the
conversion of such outstanding shares of Common Stock into shares of other
stock or other securities or property), or the sale of all or substantially all
of the Company’s assets (a “Reorganization”), the Holders of Warrants which
have not been exercised (or otherwise expired or been terminated) shall have
the right to receive, upon exercise of the Warrants and payment of the Exercise
Price, the kind and amount of shares of stock and other securities and property
receivable upon such Reorganization by a Holder of the number of shares of
Common Stock into which such Warrants so exercised might have been exercised
immediately prior to such Reorganization. Unless Section 4.04(b) is applicable
to a Reorganization, the Company shall provide that the surviving or acquiring
Person in such Reorganization will enter into an agreement with the Warrant
Agent confirming the Holders’ rights pursuant to this Section 4.04(a) and
providing for adjustments, which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Article IV.

          (b) In the event of a Reorganization where consideration to the holders of
Common Stock in exchange for their shares is payable solely in cash, the
Holders of the Warrants shall be entitled to receive, upon surrender of their
Warrant Certificates, such cash distributions on an equal basis with the
holders of Common Stock or other securities issuable upon exercise of the
Warrants, as if the Warrants had been exercised immediately prior to such
event, less the Exercise Price.

          (c) In the event of sale or conveyance or other transfer of all or
substantially all of the assets of the Company as a part of a plan for
liquidation of the Company, all rights to exercise any Warrant shall terminate
thirty days after the Company gives written notice to each Holder in the manner
specified in Section 7.04 that such sale or conveyance or other transfer has
been consummated.

          SECTION 4.05. Exercise Price Not Less Than Par Value. In no event shall
the Exercise Price be adjusted below the par value per share of the Common
Stock.

          SECTION 4.06. Notice of Certain Action. In the event the Company shall:

          (a) declare any dividend payable in stock to the holders of its Common
Stock or make any other distribution in property other than cash to the holders
of its Common Stock; or

          (b) offer to the holders of its Common Stock as such rights to subscribe
for or purchase any shares of any class of stock or any other rights or
opinions; or

13

 

          (c) effect any reclassification of its Common Stock (other than a
reclassification involving merely the subdivision or combination of outstanding
shares of Common Stock), Reorganization or the liquidation, dissolution or
winding up of the Company;

then, in each such case, the Company shall cause notice of such proposed action
to be given to the Warrant Agent. Such notice shall specify the date on which
the books of the Company shall close, or a record be taken, for determining
holders of Common Stock entitled to receive such stock dividend or other
distribution or such rights or options, or the date on which such
reclassification, reorganization, consolidation, merger, sale, transfer, other
disposition, liquidation, dissolution or winding up shall take place or
commence, as the case may be, and the date as of which it is expected that
holders shall be entitled to receive securities or other property deliverable
upon such action, if any such date has been fixed. The Company shall also
cause the Warrant Agent to mail copies of such notice to each Holder of a
Warrant Certificate in the manner specified in Section 7.04 unless such notice
is otherwise available on the SEC’s Electronic Data Gathering, Analysis and
Retrieval System or similar system. Such notice shall be mailed, in the case
of any action covered by Section 4.06(a) or 4.06(b), at least ten days prior to
the record date for determining holders of the Common Stock for purposes of
receiving such payment or offer, and in the case of any action covered by
Section 4.06(c), at least ten days prior to the earlier of the date upon which
such action is to take place or any record date to determine holders of Common
Stock entitled to receive such securities or other property.

          SECTION 4.07. Notice of Adjustments. Whenever any adjustment is made
pursuant to this Article IV, the Company shall cause notice of such adjustment
to be mailed to the Warrant Agent within fifteen days thereafter, such notice
to include in reasonable detail (i) the events precipitating the adjustment,
(ii) the computation of any adjustments, and (iii) the Exercise Price, the
number of shares or the securities or other property purchasable upon exercise
of each Warrant after giving effect to such adjustment. The Warrant Agent
shall be entitled to rely on such notice and any adjustment therein contained
and shall not be deemed to have knowledge of any such adjustment unless and
until it shall have received such notice. The Warrant Agent shall within
fifteen days after receipt of such notice from the Company cause a similar
notice to be mailed to each Holder.

          SECTION 4.08. Adjustment to Warrant Certificate. The form of Warrant
Certificate need not be changed because of any adjustment made pursuant to this
Article IV, and Warrant Certificates issued after such adjustment may state the
same Exercise Price and the same number of shares of Common Stock issuable
upon exercise of the Warrants as are stated in the Warrant Certificates
initially issued pursuant to this Agreement. The Company, however, may at any
time in its sole discretion make any change in the form of Warrant Certificate
that it may deem appropriate to give effect to
such adjustments and that does not affect the substance of the Warrant
Certificate, and any Warrant Certificate thereafter issued or countersigned,
whether in exchange or substitution for an outstanding Warrant Certificate or
otherwise, may be in the form as so changed.

14

 

ARTICLE V

Registration Rights

          SECTION 5.01. Effectiveness of Registration Statement. Subject to Section
5.02, no later than five days from the Date of Distribution, the Company shall
use its reasonable best efforts to cause to be filed pursuant to Rule 415 (or
any successor provision) of the Securities Act, and shall use its reasonable
best efforts to cause to be effective, a shelf registration statement covering
the issuance of Warrant Shares to the Holders upon exercise of the Warrants by
the Holders thereof (the “Common Shelf Registration Statement”). The Company
shall use its reasonable best efforts to cause the Common Shelf Registration
Statement to remain effective until the earlier of (i) such time as all
Warrants have been exercised and (ii) the Expiration Date. The Company shall
promptly inform the Warrant Agent of any change in the status of the
effectiveness or availability of the Common Shelf Registration Statement.

          SECTION 5.02. Suspension. The Company shall be entitled to suspend the
availability of the Common Shelf Registration Statement from time to time
during any consecutive 365-day period for a total not to exceed ninety days
during such consecutive 365-day period (except for the forty-five
consecutive-day period immediately prior to the Expiration Date) if the Board
determines in the exercise of its reasonable judgment that such suspension is
necessary in order to comply with applicable laws and provides notice to the
Holders of the Warrants that such determination was made; provided, however,
that in no event shall the Company be required to disclose the business purpose
for such suspension if the Company determines in good faith that such business
purpose must remain confidential.

          SECTION 5.03. Blue Sky. The Company shall use its best efforts to
register or qualify the Warrant Shares under all applicable securities laws,
blue sky laws or similar laws of all jurisdictions in the United States in
which any Holder may or may be deemed to purchase Warrant Shares upon the
exercise of Warrants and shall use its best efforts to maintain such
registration or qualification for so long as it is required to cause the Common
Shelf Registration Statement to remain effective under the Securities Act
pursuant to Section 5.01; provided, however, that the Company shall not be
required to qualify generally to do business in any jurisdiction where it would
not otherwise be required to qualify but for this Section 5.03 or to take any
action which would subject it to general service of process or to taxation in
any such jurisdiction where it is not then so subject.

          SECTION 5.04. Additional Acts. If the issuance or sale of any Common
Stock issuable upon the exercise of the Warrants requires registration or
approval of any governmental authority (other than the registration
requirements under the Securities
Act), or the taking of any other action under the laws of the United
States or any political subdivision thereof before such securities may be
validly offered or sold in compliance with such laws, then the Company
covenants that it will, in good faith and as expeditiously as reasonably
possible, use its reasonable best efforts to secure and maintain such
registration or approval or to take such other action, as the case may be.

15

 

The
Company shall promptly notify the Warrant Agent in writing when (i) the Company
has obtained all such governmental approvals and authorizations and (ii) such
approvals and authorizations thereafter cease to be in effect.

          SECTION 5.05. Expenses. All expenses incident to the Company’s
performance of or compliance with its obligations under this Article V relating
to the issuance of the Warrant Shares will be borne by the Company, including:
(i) all SEC, stock exchange or National Association of Securities Dealers, Inc.
registration and filing fees, (ii) all reasonable fees and expenses incurred in
connection with the compliance with state securities or blue sky laws, (iii)
all expenses of any Persons incurred by or on behalf of the Company in
preparing or assisting in preparing, printing and distributing the Common Shelf
Registration Statement or any other registration statement, prospectus, any
amendments or supplements thereto and other documents relating to the
performance of and compliance with this Article V, (iv) the fees and
disbursements of counsel for the Company and the Warrant Agent as agreed and
(v) the fees and disbursements of the independent public accountants of the
Company, including the expenses of any special audits or comfort letters
required by or incident to such performance and compliance.

ARTICLE VI

Warrant Agent

          SECTION 6.01. Appointment of Warrant Agent; Standard of Care; Limitation
of Liability; Force Majeure. The Company hereby appoints the Warrant Agent to
act as agent for the Company in accordance with the provisions of this
Agreement and the Warrant Agent hereby accepts such appointment. The Warrant
Agent shall not be liable for any claims, losses, liabilities, damages, costs,
expenses or judgments (including reasonable attorneys’ fees and expenses)
(“Losses”) except to the extent the same constitute direct money damages caused
by the negligence or willful misconduct of the Warrant Agent. In no event
shall the Warrant Agent be liable: (i) for any indirect, special, or
consequential damages, regardless of the form of action and even if the same
was foreseeable; (ii) for any acts or omissions of the Depository; or (iii) for
any non-performance or delay in performance or Losses caused by forces beyond
the Warrant Agent’s reasonable control, including strikes, work stoppages, acts
of war or terrorism, insurrection, revolution, nuclear or natural catastrophes,
acts of God, the insolvency of the Depository, or any loss, interruption or
malfunction of utility, communication, or computer (hardware or software)
services.

          SECTION 6.02. Rights and Duties of Warrant Agent. (a) Agent for the
Company. In acting under this Warrant Agreement and in connection with the
Warrant Certificates, the Warrant Agent is acting solely as agent of the
Company and does not
assume any obligation or relationship or agency or trust for or with any
of the holders of Warrant Certificates or beneficial owners of Warrants.

          (b) Counsel. The Warrant Agent may consult with counsel satisfactory to
it (who may be counsel to the Company), and the advice of such counsel shall be
full and complete authorization and protection in respect of any action taken,

16

 

suffered or omitted by it hereunder in good faith and in accordance with the
advice of such counsel.

          (c) Documents. The Warrant Agent shall be protected and shall incur no
liability for or in respect of any action taken or thing suffered by it in
reliance upon any Warrant Certificate, notice, direction, consent, certificate,
affidavit, statement or other paper or document reasonably believed by it to be
genuine and to have been presented or signed by the proper parties.

          (d) No Implied Obligations. The Warrant Agent shall be obligated to
perform only such duties as are specifically set forth herein and in the
Warrant Certificates, and no implied duties or obligations of the Warrant Agent
shall be read into this Agreement or the Warrant Certificates against the
Warrant Agent. The Warrant Agent shall not be under any obligation to take any
action hereunder which may tend to involve it in any expense or liability for
which it does not receive indemnity if such indemnity is reasonably requested.
The Warrant Agent shall not be accountable or under any duty or responsibility
for the use by the Company of any of the Warrant Certificates countersigned by
the Warrant Agent and delivered by it to the Holders or on behalf of the
Holders pursuant to this Agreement or for the application by the Company of the
proceeds of the Warrants. The Warrant Agent shall have no duty or
responsibility in case of any default by the Company in the performance of its
covenants or agreements contained herein or in the Warrant Certificates or in
the case of the receipt of any written demand from a Holder with respect to
such default, including any duty or responsibility to initiate or attempt to
initiate any proceedings at law or otherwise.

          (e) Not Responsible for Adjustments or Validity of Stock. The Warrant
Agent shall not at any time be under any duty or responsibility to any Holder
to determine whether any facts exist that may require an adjustment of the
number of shares of Common Stock issuable upon exercise of each Warrant or the
Exercise Price, or with respect to the nature or extent of any adjustment when
made, or with respect to the method employed, or herein or in any supplemental
agreement provided to be employed, in making the same. The Warrant Agent shall
not be accountable with respect to the validity or value of any shares of
Common Stock or of any securities or property which may at any time be issued
or delivered upon the exercise of any Warrant or upon any adjustment pursuant
to Article IV, and it makes no representation with respect thereto. The
Warrant Agent shall not be responsible for any failure of the Company to make
any cash payment or to issue, transfer or deliver any shares of Common Stock or
stock certificates upon the surrender of any Warrant Certificate for the
purpose of exercise or upon any adjustment pursuant to Article IV, or to comply
with any of the covenants of the Company contained in Article IV.

          SECTION 6.03. Individual Rights of Warrant Agent. The Warrant Agent and
any stockholder, director, officer or employee of the Warrant Agent may buy,
sell or deal in any of the Warrants or other securities of the Company or its
affiliates or become pecuniarily interested in transactions in which the
Company or its affiliates may be interested, or contract with or lend money to
the Company or its affiliates or otherwise act as fully and freely as though it
were not the Warrant Agent under this Agreement.

17

 

Nothing herein shall preclude
the Warrant Agent from acting in any other capacity for the Company or for any
other legal entity.

          SECTION 6.04. Warrant Agent’s Disclaimer. The Warrant Agent shall not be
responsible for and makes no representation as to the validity or adequacy of
this Agreement or the Warrant Certificates and it shall not be responsible for
any statement in this Agreement or the Warrant Certificates other than its
countersignature thereon.

          SECTION 6.05. Compensation and Indemnity. The Company agrees that the
Warrant Agent is entitled, from time to time, reasonable compensation for its
services as agreed and to reimbursement for all reasonable out-of-pocket
expenses incurred by it, including the reasonable compensation and expenses of
the Warrant Agent’s agents and counsel as agreed. The Parties agree that, up
to the Issue Date, these costs are deemed “Settlement Administration” costs and
shall be paid from the “Lucent Common Stock Escrow Account” that is established
for the Settlement of the heretofore mentioned litigation. The Company shall
indemnify the Warrant Agent, its officers, directors, agents and counsel
against any Losses, other than Losses for which the Warrant Agent has accepted
liability under Section 6.01, arising out of or in connection with the
acceptance or performance of its duties under this Agreement. The Warrant
Agent shall notify the Company promptly of any claim for which it may seek
indemnity, but no delay in providing notice shall affect the Warrant Agent’s
right to its indemnity. The Company’s payment obligations pursuant to this
Section 6.05 shall survive the termination of this Agreement or any resignation
or removal of the Warrant Agent.

          To secure the Company’s payment obligations under this Agreement or
otherwise, the Warrant Agent shall have a lien on all money held or collected
by the Warrant Agent for the account of the Company, and the Warrant Agent
shall be entitled to set-off and apply any such money in reduction or payment
of such obligations.

          SECTION 6.06. Successor Warrant Agent. (a) The Company To Provide and
Maintain Warrant Agent. The Company agrees for the benefit of the Holders that
there shall at all times be a Warrant Agent hereunder until all the Warrants
have been exercised or are no longer exercisable.

          (b) Resignation and Removal. The Warrant Agent may at any time resign by
giving written notice to the Company of such intention on its part, specifying
the date on which its desired resignation shall become effective; provided,
however, that such date shall not be less than sixty days after the date on
which such notice is given unless the Company otherwise agrees. The Warrant
Agent hereunder may be removed at any time by the filing with it of an
instrument in writing signed by or on behalf of the Company and specifying such
removal and the date when it shall become effective,
which date shall not be less than sixty days after such notice is given
unless the Warrant Agent otherwise agrees. Any removal under this Section 6.06
shall take effect upon the appointment by the Company as hereinafter provided
of a successor Warrant Agent (which shall be a bank or trust company authorized
under the laws of the jurisdiction of its organization to exercise corporate
trust powers) and the acceptance of such appointment by such successor Warrant
Agent.

18

 

          (c) The Company To Appoint Successor. In the event that at any time the
Warrant Agent shall resign, or shall be removed, or shall become incapable of
acting, or shall be adjudged a bankrupt or insolvent, or shall commence a
voluntary case under the Federal bankruptcy laws, as now or hereafter
constituted, or under any other applicable Federal or state bankruptcy,
insolvency or similar law or shall consent to the appointment of or taking
possession by a receiver, custodian, liquidator, assignee, trustee,
sequestrator (or other similar official) of the Warrant Agent or its property
or affairs, or shall make an assignment for the benefit of creditors, or shall
admit in writing its inability to pay its debts generally as they become due,
or shall take corporate action in furtherance of any such action, or a decree
or order for relief by a court having jurisdiction in the premises shall have
been entered in respect of the Warrant Agent in an involuntary case under the
Federal bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal or state bankruptcy, insolvency or similar law, or a decree
or order by a court having jurisdiction in the premises shall have been entered
for the appointment of a receiver, custodian, liquidator, assignee, trustee,
sequestrator (or similar official) of the Warrant Agent or of its property or
affairs, or any public officer shall take charge or control of the Warrant
Agent or of its property or affairs for the purpose of rehabilitation,
conservation, winding up or liquidation, a successor Warrant Agent, qualified
as aforesaid, shall be appointed by the Company by an instrument in writing,
filed with the successor Warrant Agent. Upon the appointment as aforesaid of a
successor Warrant Agent and acceptance by the successor Warrant Agent of such
appointment, the Warrant Agent shall cease to be Warrant Agent hereunder;
provided, however, that in the event of the resignation of the Warrant Agent
under this Section 6.06(c), such resignation shall be effective on the earlier
of (i) the date specified in the Warrant Agent’s notice of resignation and (ii)
the appointment and acceptance of a successor Warrant Agent hereunder.

          (d) Successor To Expressly Assume Duties. Any successor Warrant Agent
appointed hereunder shall execute, acknowledge and deliver to its predecessor
and to the Company an instrument accepting such appointment hereunder, and
thereupon such successor Warrant Agent, without any further act, deed or
conveyance, shall become vested with all the rights and obligations of such
predecessor with like effect as if originally named as Warrant Agent hereunder,
and such predecessor, upon payment of its charges and disbursements then
unpaid, shall thereupon become obligated to transfer, deliver and pay over, and
such successor Warrant Agent shall be entitled to receive, all monies,
securities and other property on deposit with or held by such predecessor, as
Warrant Agent hereunder.

          (e) Successor by Merger. Any corporation into which the Warrant Agent
hereunder may be merged or consolidated, or any corporation resulting from any
merger or consolidation to which the Warrant Agent shall be a party, or
any corporation to which the Warrant Agent shall sell or otherwise transfer all
or substantially all of its assets and business, shall be the successor Warrant
Agent under this Agreement without the execution or filing of any paper or any
further act on the part of any of the parties hereto; provided, however, that
it shall be qualified as aforesaid.

19

 

ARTICLE VII

Miscellaneous

          SECTION 7.01. Persons Benefiting. Nothing in this Agreement is intended
or shall be construed to confer upon any Person other than the Company, the
Warrant Agent and the Holders any right, remedy or claim under or by reason of
this Agreement or any part hereof.

          SECTION 7.02. Rights of Holders. Holders of unexercised Warrants are not
entitled to (i) receive dividends or other distributions, (ii) receive notice
of or vote at any meeting of the stockholders, (iii) consent to any action of
the stockholders, (iv) receive notice of any other proceedings of the Company,
(v) exercise any preemptive right or (vi) exercise any other rights whatsoever
as stockholders of the Company.

          SECTION 7.03. Amendment. This Agreement may be amended by the parties
hereto without the consent of any Holder for the purpose of curing any
ambiguity, or of curing, correcting or supplementing any defective provision
contained herein or adding or changing any other provisions with respect to
matters or questions arising under this Agreement as the Company and the
Warrant Agent may deem necessary or desirable (including any addition or
modification to provide for compliance with the transfer restrictions set forth
herein); provided, however, that such action shall not adversely affect the
rights of any of the Holders. Any amendment or supplement to this Agreement
that has an adverse effect on the interests of the Holders shall require the
written consent of the Holders of a majority of the then outstanding Warrants.
The consent of each Holder affected shall be required for any amendment
pursuant to which the Exercise Price would be increased or the number of
Warrant Shares issuable upon exercise of Warrants would be decreased (other
than pursuant to adjustments provided herein). In determining whether the
Holders of the required number of Warrants have concurred in any direction,
waiver or consent, Warrants owned by the Company shall be disregarded and
deemed not to be outstanding, except that, for the purpose of determining
whether the Warrant Agent shall be protected in relying on any such direction,
waiver or consent, only Warrants which the Warrant Agent knows are so owned
shall be so disregarded. Also, subject to the foregoing, only Warrants
outstanding at the time shall be considered in any such determination.

20

 

          SECTION 7.04. Notices. Any notice or communication shall be in writing
and delivered in Person or mailed by first-class mail addressed as follows:

	 	 	if to the Company:

	 	 	Lucent Technologies Inc.

600 Mountain Avenue

Murray Hill, NJ 07974

Telephone: (908) 582-8500

Facsimile: (980) 582-6130
	 
	 	 	Attention: General Counsel

	 	 	with a copy to:

	 	 	Cravath, Swaine & Moore LLP

825 Eighth Avenue

New York, NY 10019

Telephone: (212) 474-1000

Facsimile: (212) 474-3700
	 
	 	 	Attention: Paul C. Saunders, Esq.

	 	 	if to the Warrant Agent:

	 	 	The Bank of New York

Stock Transfer Administration Department

101 Barclay St. 11E

New York, NY 10286

Telephone: (212) 815-4423

Facsimile: (212) 815-3141
	 
	 	 	Attention: Jim Kiszka

	 	 	with a copy to:

	 	 	The Bank of New York

One Wall Street

New York, NY 10286

Telephone: (212) 635-1283

Facsimile: (212) 635-1999
	 
	 	 	Attention: Barbara Lubitz, Esq.

          The Company or the Warrant Agent by notice to the other may designate
additional or different addresses for subsequent notices or communications.

21

 

          Any notice or communication mailed to a Holder shall be mailed to the
Holder at the Holder’s address as it appears on the Certificate Register and
shall be sufficiently given if so mailed within the time prescribed.

          Failure to mail a notice or communication to a Holder or any defect in it
shall not affect its sufficiency with respect to other Holders. If a notice or
communication is mailed in the manner provided above, it is duly given, whether
or not the addressee receives it.

          SECTION 7.05. Governing Law; Jurisdiction; Certain Waivers. This
Agreement shall be governed by and construed in accordance with the laws of the
State of New York. The parties agree that all actions and proceedings arising
out of this Agreement or any of the transactions contemplated hereby, shall be
brought in the United States District Court for the Southern District of New
York or in a New York State Court in the County of New York and that, in
connection with any such action or proceeding, submit to the jurisdiction of,
and venue in, such court. Each of the parties hereto also irrevocably waives
all right to trial by jury in any action, proceeding or counterclaim arising
out of this Agreement or the transactions contemplated hereby.

          SECTION 7.06. Successors. All agreements of the Company in this Agreement
and the Warrant Certificates shall bind its successors. All agreements of the
Warrant Agent in this Agreement shall bind its successors.

          SECTION 7.07. Multiple Originals. The parties may sign any number of
copies of this Agreement. Each signed copy shall be an original, but all of
them together represent the same agreement. One signed copy is enough to prove
this Agreement.

          SECTION 7.08. Table of Contents. The table of contents and headings of
the Articles and Sections of this Agreement have been inserted for convenience
of reference only, are not intended to be considered a part hereof and shall
not modify or restrict any of the terms or provisions hereof.

          SECTION 7.09. Severability. The provisions of this Agreement are
severable, and if any clause or provision shall be held invalid, illegal or
unenforceable in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect in that jurisdiction only such clause or
provision, or part thereof, and shall not in any manner affect such clause or
provision in any other jurisdiction or any other clause or provision of this
Agreement in any jurisdiction.

22

 

          IN WITNESS WHEREOF, the parties have caused this Warrant Agreement to be
duly executed as of the date first written above.

	 	 	 	 	 
	 	LUCENT TECHNOLOGIES INC.,

by

 	 
	 	 	                            /s/ MARK G. GIBBENS
 	 
	 		Name:  Mark G. Gibbens 	 
	 		Title:  Vice President and Treasurer 	 
	 

	 	 	 	 	 
	 	THE BANK OF NEW YORK, as Warrant Agent,

by

 	 
	 	 	
/s/ JAMES KISZKA
 	 
	 		Name:  James Kiszka 	 
	 		Title:  Vice President 	 

 

 

	 	 	 	 	 

EXHIBIT A

[FORM OF FACE OF WARRANT CERTIFICATE]

[Global Securities Legend]

     UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW
YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

     TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
WARRANT AGREEMENT REFERRED TO ON THE REVERSE HEREOF.

 

 

	 	 	 
	No. [     ]

	 	Certificate for [     ] Warrants
	 
	 	 
	CUSIP No. [     ]

	 	[     ], 2004

WARRANTS TO PURCHASE COMMON STOCK OF

LUCENT TECHNOLOGIES INC.

          THIS CERTIFIES THAT [            ], or its registered assigns,
is the registered holder of the number of Warrants set forth above (the
“Warrants”). Each Warrant entitles the holder thereof (the “Holder”), at its
option and subject to the provisions contained herein and in the Warrant
Agreement referred to below, to purchase from LUCENT TECHNOLOGIES INC., a
Delaware corporation (“the Company”), [ ] shares of common stock, par value of
$0.01 per share, of the Company (the “Common Stock”) at the per share exercise
price of $2.75 (the “Exercise Price”). This Warrant Certificate shall
terminate and become void as of the close of business on December 10, 2007 (the
“Expiration Date”) or upon the exercise hereof as to all the shares of Common
Stock subject hereto. The number of shares issuable upon exercise of the
Warrants and the Exercise Price per share shall be subject to adjustment from
time to time as set forth in the Warrant Agreement.

          This Warrant Certificate is issued under and in accordance with a Warrant
Agreement dated as of December 10, 2004 (the “Warrant Agreement”), between the
Company and The Bank of New York (the “Warrant Agent”, which term includes any
successor Warrant Agent under the Warrant Agreement), and is subject to the
terms and provisions contained in the Warrant Agreement, to all of which terms
and provisions the Holder of this Warrant Certificate consents by acceptance
hereof. The Warrant Agreement is hereby incorporated herein by reference and
made a part hereof. Reference is hereby made to the Warrant Agreement for a
full statement of the respective rights, limitations of rights, duties and
obligations of the Company, the Warrant Agent and the Holders of the Warrants.
Capitalized terms used but not defined herein shall have the meanings ascribed
thereto in the Warrant Agreement. A copy of the Warrant Agreement may be
obtained for inspection by the Holder hereof upon written request to the
Warrant Agent, The Bank of New York, Attention: Stock Transfer Administration
Department.

          Subject to the terms of the Warrant Agreement, the Warrants may be
exercised in whole or in part by presentation of this Warrant Certificate with
the Election to Purchase attached hereto duly executed and with the
simultaneous payment of the Exercise Price in cash (subject to adjustment) to
the Warrant Agent for the account of the Company at the office of the Warrant
Agent and payment by the Holder to the Warrant Agent of any exercise fee
associated with the exercise of such Warrants. Payment of the Exercise Price
in cash shall be made by certified or official bank check payable to the order
of the Warrant Agent or by wire transfer of funds to an account designated for
such purpose.

          As provided in the Warrant Agreement and subject to the terms and
conditions therein set forth, the Warrants shall be exercisable at any time and
from time to time on any Business Day after the Issue Date; provided, however,
that Holders of Warrants will be able to exercise their Warrants only if the
Common Shelf Registration Statement relating to the Common Stock underlying the
Warrants is effective or the exercise of such Warrants is exempt from the
registration requirements of the Securities Act of 1933 and such securities are
qualified for sale or exempt from qualification under the applicable securities
laws of the states or other jurisdictions in which such Holders reside;
provided further, however, that no Warrant shall be exercisable after December
10, 2007.

          As provided in the Warrant Agreement, the number of shares of Common Stock
issuable upon the exercise of the Warrants and the Exercise Price are subject
to adjustment upon the happening of certain events.

 

 

          Any service charge for any registration of transfer or exchange, or any
transfer tax, assessments, or similar governmental charge payable in connection
therewith, shall be paid by the Holder.

          Upon any partial exercise of the Warrants, there shall be countersigned
and issued to the Holder hereof a new Warrant Certificate representing those
Warrants which were not exercised. This Warrant Certificate may be exchanged
at the office of the Warrant Agent by presenting this Warrant Certificate
properly endorsed with a request to exchange this Warrant Certificate for other
Warrant Certificates evidencing an equal number of Warrants. No fractional
Warrant Shares will be issued upon the exercise of the Warrants, but the
Company shall pay an amount in cash equal to the Current Market Value per
Warrant Share on the day immediately preceding the date the Warrant is
exercised, multiplied by the fraction of a Warrant Share that would be issuable
on the exercise of any Warrant.

          All shares of Common Stock issuable by the Company upon the exercise of
the Warrants shall, upon such issue, be duly and validly issued and fully paid
and non-assessable.

          The holder in whose name the Warrant Certificate is registered may be
deemed and treated by the Company and the Warrant Agent as the absolute owner
of the Warrant Certificate for all purposes whatsoever and neither the Company
nor the Warrant Agent shall be affected by notice to the contrary.

          The Warrants do not entitle any Holder hereof to any of the rights of a
stockholder of the Company.

 

 

          This Warrant Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Warrant Agent.

	 	 	 	 	 
	 	 	LUCENT TECHNOLOGIES INC.,
	 
	 	 	 	 
	

	 	By
	 	

	

	 	 	 	Name:
	

	 	 	 	Title:
	 
	 	 	 	 
	

	 	By
	 	

	

	 	 	 	Name:
	

	 	 	 	Title:

Countersigned:

THE BANK OF NEW YORK,

as Warrant Agent,

	 	 	 
	By
	 	 
	

	 	

	

	 	Authorized Signatory

 

 

FORM OF ELECTION TO PURCHASE WARRANT SHARES

(to be executed only upon exercise of Warrants)

LUCENT TECHNOLOGIES INC.

          The
undersigned hereby irrevocably elects to exercise
_____________________ Warrants to acquire shares of Common Stock, par value $0.01 per share, of
LUCENT TECHNOLOGIES INC., at an exercise price per share of Common Stock of
$2.75 and otherwise on the terms and conditions specified in the within Warrant
Certificate and the Warrant Agreement therein referred to, surrenders this
Warrant Certificate and all right, title and interest therein to LUCENT
TECHNOLOGIES INC. and directs that the shares of Common Stock deliverable upon
the exercise of such Warrants be registered or placed in the name and at the
address specified below and delivered thereto.

Date:                                        ,                   

	 	 	 
	

	 	1
	

	 	

	

	 	(Signature of Owner)
	 
	 	 
	

	 	

	

	 	(Street Address)
	 
	 	 
	

	 	

	

	 	(City)       (State)       (Zip Code)
	 
	 	 
	

	 	Signature Guaranteed by:
	 
	 	 
	

	 	

	 	 	1 The signature must correspond with the name as written upon the face of the
within Warrant Certificate in every particular, without alteration or
enlargement or any change whatever, and must be guaranteed by a national bank
or trust company or by a member firm of any national securities exchange.

 

 

Securities and/or check to be issued to:

Please insert social security or identifying number:

     Name:

     Street Address:

     City, State and Zip Code:

A new Warrant Certificate evidencing any unexercised Warrants evidenced by the
within Warrant Certificate is to be issued to:

     Please insert social security or identifying number:

     Name:

     Street Address:

     City, State and Zip Code:

 

 

FORM OF WARRANT TRANSFER

     For value received, the undersigned hereby sells, assigns and transfers
unto the right to purchase                                      (                    ) Warrant Shares representing shares of common stock, par
value $0.01 per share, of Lucent Technologies Inc. (the “Company”) pursuant to
the attached Warrant Certificate and does hereby irrevocably constitute and
appoint                    attorney to transfer the Warrant, or such
portion as is transferred hereby, on the books of the Company with full power
of substitution in the premises. The undersigned requests said attorney to
issue to the transferee a Warrant Certificate evidencing such transfer and to
issue to the undersigned a new Warrant Certificate evidencing the right to
purchase Warrant Shares for the balance not so transferred, if any.

     Date:                                          ,                       

	 	 	 
	

	 	2
	

	 	

	

	 	(Signature of Owner)
	 
	 	 
	

	 	

	

	 	(Street Address)
	 
	 	 
	

	 	

	

	 	(City)       (State)       (Zip Code)
	 
	 	 
	

	 	Signature Guaranteed by:
 
	

	 	

	 	 	 
	Name in which new Warrant(s) should be registered:

	 	 
	 
	 	 
	

	 	 
	(Name)
	 	 
	 
	 	 
	

	 	 
	(Street Address)
	 	 
	 
	 	 
	

	 	 
	(City)       (State)       (Zip Code)
 
	 	 
	

	 	 
	(social security or identifying number)
	 	 

	 	 	2 The signature must correspond with the name as written upon the face of the
within Warrant Certificate in every particular, without alteration or
enlargement or any change whatever, and must be guaranteed by a national bank
or trust company or by a member firm of any national securities exchange.

 

 

SCHEDULE OF INCREASES OR
DECREASES IN GLOBAL SECURITY3

The following increases or decreases in this Global Security have been made:

	 	 	 
	 	 	 	 	 	 	 	 	Number of Warrants	 	 	 
	 	 	Decrease in number	 	 	Increase in number	 	 	in this Global	 	 	 
	 	 	of Warrants in this	 	 	of Warrants in this	 	 	Warrant Certificate	 	 	Signature of
	 	 	Global Warrant	 	 	Global Warrant	 	 	following such	 	 	authorized officer
	Date of Exchange
	 	Certificate
	 	 	Certificate
	 	 	change
	 	 	of Warrant Agent

	 	 	3 To be included only if Warrants are in global form.<PAGE>
                                                                   EXHIBIT 10.17

                                 AMENDMENT NO. 1

            Amendment No. 1 (this "Amendment"), dated as of October 6, 2004, to
that certain Credit and Guaranty Agreement, dated as of June 4, 2004 (the
"Credit Agreement"; capitalized terms used herein and not defined shall have the
meaning set forth in the Credit Agreement), among MAAX CORPORATION, a Nova
Scotia unlimited company ("Company"), BEAUCELAND CORPORATION, a Nova Scotia
unlimited company ("Holdings"), CERTAIN SUBSIDIARIES OF HOLDINGS, as Guarantors,
the Lenders party hereto from time to time, GOLDMAN SACHS CREDIT PARTNERS L.P.,
as Joint Lead Arranger and as Syndication Agent, ROYAL BANK OF CANADA, as
Administrative Agent (in such capacity, "Administrative Agent") and as
Collateral Agent, ROYAL BANK OF CANADA, ACTING THROUGH ITS BUSINESS GROUP RBC
CAPITAL MARKETS, as Joint Lead Arranger, and MERRILL LYNCH & CO., MERRILL LYNCH,
PIERCE, FENNER & SMITH INCORPORATED, as Joint Lead Arranger and as Documentation
Agent.

                              W I T N E S S E T H :
                              - - - - - - - - - -

            WHEREAS, Company desires to amend the Credit Agreement; and

            WHEREAS, pursuant to Section 10.5 of the Credit Agreement, Company
and each of the undersigned Lenders hereby agree to amend the Credit Agreement
as set forth herein.

            NOW, THEREFORE, in consideration of the foregoing, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:

ARTICLE I. Amendment. Subject to the satisfaction of the conditions set forth in
 Section Two hereof, the definition of "Fixed Charge Coverage Ratio" in Section
 1.1 of the Credit Agreement is hereby amended and restated in its entirety as
                                    follows:

      "FIXED CHARGE COVERAGE RATIO" means the ratio as of the last day of any
      Fiscal Quarter of (i) the sum of (x) Consolidated Adjusted EBITDA and (y)
      the amount of scheduled rental payments that reduced Consolidated Net
      Income to the extent it also reduced Consolidated Adjusted EBITDA, in each
      case for the four-Fiscal Quarter period then ending, to (ii) Consolidated
      Fixed Charges for such four-Fiscal Quarter period.
<PAGE>
ARTICLE II. Conditions to Effectiveness. This Amendment shall become effective
as of the date first above written when, and only when, Administrative Agent
shall have received counterparts of this Amendment executed by the Company and
the Requisite Lenders. The effectiveness of this Amendment (other than Sections
Five, Six and Seven hereof) is conditioned upon the accuracy of the
representations and warranties set forth in Section Three hereof.

ARTICLE III. Representations and Warranties; Covenants. In order to induce the
Lenders to enter into this Amendment, the Company represents and warrants to
each of the Lenders and the Agents that after giving effect to this Amendment,
(x) no Event of Default or Default has occurred and is continuing; and (y) the
representations and warranties contained in the Credit Agreement and in the
other Credit Documents are true and correct in all material respects (and any
such representations and warranties that contain a materiality or Material
Adverse Effect qualification are true and correct in all respects) on and as of
the date hereof to the same extent as though made on and as of the date hereof,
except to the extent such representations and warranties specifically relate to
an earlier date, in which case such representations and warranties were true and
correct in all material respects on and as of such earlier date.

ARTICLE IV. Reference to and Effect on the Credit Agreement and the Notes. On
and after the effectiveness of this Amendment, each reference in the Credit
Agreement to "this Agreement", "hereunder", "hereof" or words of like import
referring to the Credit Agreement, and each reference in the Notes and each of
the other Credit Documents to "the Credit Agreement", "thereunder", "thereof" or
words of like import referring to the Credit Agreement, shall mean and be a
reference to the Credit Agreement, as amended by this Amendment. The Credit
Agreement, the Notes and each of the other Credit Documents, as specifically
amended by this Amendment, are and shall continue to be in full force and effect
and are hereby in all respects ratified and confirmed. Without limiting the
generality of the foregoing, the Collateral Documents and all of the Collateral
described therein do and shall continue to secure the payment of all Obligations
of the Credit Parties under the Credit Documents. The execution, delivery and
effectiveness of this Amendment shall not, except as expressly provided herein,
operate as an amendment or waiver of any right, power or remedy of any Lender or
any Agent under any of the Credit Documents, nor constitute an amendment or
waiver of any provision of any of the Credit Documents. Each Guarantor ratifies
and confirms its Guaranty as in full force and effect after giving effect to the
Amendment herein set forth.

ARTICLE V. Costs, Expenses and Taxes. Company agrees to pay all reasonable costs
and expenses of the Agents in connection with the preparation, execution and
delivery of this Amendment and the other instruments and documents to be
delivered hereunder, if any (including, without limitation, the reasonable fees
and expenses of Cahill Gordon & Reindel LLP) in accordance with the terms of
Section 10.2 of the Credit Agreement.

ARTICLE VI. Execution in Counterparts. This Amendment may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute but one and the same agreement. Delivery
of an executed counterpart of a signature page to this Amendment by facsimile
shall be effective as delivery of a manually executed counterpart of this
Amendment.

                                      -2-
<PAGE>
ARTICLE VII. Governing Law. This Amendment shall be governed by, and construed
in accordance with, the laws of the State of New York, without regard to the
principles of conflicts of laws thereof to the extent that the application of
the laws of another jurisdiction would be required thereby.

                            [SIGNATURE PAGES FOLLOW]

                                      -3-
<PAGE>
            IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered as of the day and year first above written.

                              MAAX CORPORATION

                              By:   /s/ Denis Aubin
                                    ------------------------------
                                    Name:   Denis Aubin
                                    Title:  Executive Vice President & CFO

                              ROYAL BANK OF CANADA,
                                   as a Lender

                              By:   /s/ Rod Smith
                                    ------------------------------------
                                    Name:   Rod Smith
                                    Title:  Authorized Signatory

                              If second signature is necessary:

                              By:   /s/ John M. Crantor
                                    ------------------------------------
                                    Name:   John M. Crantor
                                    Title:  Attorney-in-Fact

                              GOLDMAN SACHS CANADA CREDIT
                                 PARTNERS CO.,
                                 as a Lender

                              By:   /s/ Pedro Ramirez
                                    ------------------------------
                                    Name:   Pedro Ramirez
                                    Title:  Authorized Signatory

                                      -4-
<PAGE>

                              MERRILL LYNCH CAPITAL CANADA INC.,
                                 as a Lender

                                    By: /s/ Marcolo Cosma
                                        ------------------------------
                                        Name:   Marcolo Cosma
                                        Title:  Vice President

                              NATIONAL BANK OF CANADA,
                                 as a Lender

                                    By: /s/ Andre Marenger
                                        ------------------------------------
                                        Name:   Andre Marenger
                                        Title:  Director

                                    By: /s/ Gilles Morin
                                        ------------------------------
                                        Name:   Gilles Morin
                                        Title:  Managing Director

                                      -5-
<PAGE>
                              BANK OF MONTREAL, CHICAGO BRANCH,
                                 as a Lender

                              By:   /s/ Bruce A. Pietka
                                    ------------------------------------
                                    Name:   Bruce A. Pietka
                                    Title:  Vice President

                              LA CAISSE CENTRALE DESJARDINS DU QUEBEC,
                                 as a Lender

                              By:   /s/ Michel Voyer
                                    ------------------------------
                                    Name:   Michel Voyer
                                    Title:  Senior Manager

                              By:   /s/ Sylvain Gascon
                                    ------------------------------------
                                    Name:   Sylvain Gascon
                                    Title:  Vice President

                              CITIBANK, N.A., CANADIAN BRANCH,
                                 as a Lender

                              By:   /s/ Isabelle Cote
                                    ------------------------------
                                    Name:   Isabelle Cote
                                    Title:

                              COMERICA BANK, CANADA BRANCH,
                                 as a Lender

                              By:   /s/ Robert Rosen
                                    ------------------------------
                                    Name:   Robert Rosen
                                    Title:  Vice-President

                                      -6-
<PAGE>

                              NATIONAL CITY BANK, CANADA BRANCH,
                                 as a Lender

                              By:   /s/ J. Andrew Riddell
                                    ------------------------------------
                                    Name:   J. Andrew Riddell
                                    Title:  Vice President

                              GE CANADA FINANCE HOLDING COMPANY,
                                 as a Lender

                              By:   /s/ Ellis Gaston
                                    ------------------------------
                                    Name:   Ellis Gaston
                                    Title:  Duly Authorized Signatory

                                      -7-
<PAGE>
                              By:   NEMEAN CLO, LTD.,
                                    ING Capital Advisors LLC,
                                    as Investment Manager

                              By:   /s/ Steven Gorski
                                    ------------------------------
                                    Name:   Steven Gorski
                                    Title:  Director

                                    SEQUILS-ING I (HBDGM), LTD.,

                              By:   ING Capital Advisors LLC,
                                    as Collateral Manager

                              By:   /s/ Steven Gorski
                                    ------------------------------
                                    Name:   Steven Gorski
                                    Title:  Director

                                    ARCHIMEDES FUNDING III, LTD.

                              By:   ING Capital Advisors LLC,
                                    as Collateral Manager

                              By:   /s/ Steven Gorski
                                    ------------------------------
                                    Name:   Steven Gorski
                                    Title:  Director

                                      -8-
<PAGE>
                                    ARCHIMEDES FUNDING IV (CAYMAN), LTD.

                              By:   ING Capital Advisors LLC,
                                    as Collateral Manager

                              By:   /s/ Steven Gorski
                                    ------------------------------
                                    Name:   Steven Gorski
                                    Title:  Director

                                    ENDURANCE CLO I, LTD.

                              By:   ING Capital Advisors LLC,
                                    as Portfolio Manager

                              By:   /s/ Steven Gorski
                                    ------------------------------
                                    Name:   Steven Gorski
                                    Title:  Director

                                    ING-ORYX CLO, LTD.

                              By:   ING Capital Advisors LLC,
                                    as Collateral Manager

                              By:   /s/ Steven Gorski
                                    ------------------------------
                                    Name:   Steven Gorski
                                    Title:  Director

                                      -9-
<PAGE>
                                 EATON VANCE LIMITED DURATION
                                    INCOME FUND

                                 BY: EATON VANCE MANAGEMENT
                                 AS INVESTMENT ADVISOR,
                                 as a Lender

                              By:   /s/ Michael B. Botthof
                                    ------------------------------------
                                    Name:   Michael B. Botthof
                                    Title:  Vice President

                                      -10-
<PAGE>
                              GRAYSON & CO.

                                 BY: BOSTON MANAGEMENT
                                 AND RESEARCH
                                 AS INVESTMENT ADVISOR,
                                 as a Lender

                              By:   /s/ Michael B. Botthof
                                    ------------------------------------
                                    Name:   Michael B. Botthof
                                    Title:  Vice President

                              SENIOR DEBT PORTFOLIO

                                 By: Boston Management and Research
                                 as Investment Advisor,
                                 as a Lender

                              By:   /s/ Michael B. Botthof
                                    ------------------------------------
                                    Name:   Michael B. Botthof
                                    Title:  Vice President

                                      -11-
<PAGE>
                              OXFORD STRATEGIC INCOME FUND

                                 BY: EATON VANCE MANAGEMENT
                                 AS INVESTMENT ADVISOR,
                                 as a Lender

                              By:   /s/ Michael B. Botthof
                                    ------------------------------------
                                    Name:   Michael B. Botthof
                                    Title:  Vice President

                              TOLLI & CO.

                                 BY: EATON VANCE MANAGEMENT
                                 AS INVESTMENT ADVISOR,
                                 as a Lender

                              By:   /s/ Michael B. Botthof
                                    ------------------------------------
                                    Name:   Michael B. Botthof
                                    Title:  Vice President

                                      -12-
<PAGE>
                              EATON VANCE SENIOR
                                 FLOATING-RATE TRUST

                                 BY: EATON VANCE MANAGEMENT
                                 AS INVESTMENT ADVISOR,
                                 as a Lender

                              By:   /s/ Michael B. Botthof
                                    ------------------------------------
                                    Name:   Michael B. Botthof
                                    Title:  Vice President

                              EATON VANCE SENIOR INCOME TRUST

                                 BY: EATON VANCE MANAGEMENT
                                 AS INVESTMENT ADVISOR,
                                 as a Lender

                              By:   /s/ Michael B. Botthof
                                    ------------------------------------
                                    Name:   Michael B. Botthof
                                    Title:  Vice President

                                      -13-
<PAGE>
                              EATON VANCE INSTITUTIONAL

                                 SENIOR LOAN FUND
                                 BY: EATON VANCE MANAGEMENT
                                 AS INVESTMENT ADVISOR,
                                 as a Lender

                              By:   /s/ Michael B. Botthof
                                    ------------------------------------
                                    Name:   Michael B. Botthof
                                    Title:  Vice President

                              OCTAGON INVESTMENT PARTNERS III, LTD.

                                 By: Octagon Credit Investors, LLC,
                                 as Portfolio Manager,
                                 as a Lender

                              By:   /s/ Michael B. Nechamkin
                                    ------------------------------------
                                    Name:   Michael B. Nechamkin
                                    Title:  Portfolio Manager

                              OCTAGON INVESTMENT PARTNERS VII, LTD.

                                 By: Octagon Credit Investors, LLC,
                                 as Collateral Manager,
                                 as a Lender

                              By:   /s/ Michael B. Nechamkin
                                    ------------------------------------
                                    Name:   Michael B. Nechamkin
                                    Title:  Portfolio Manager

                              UBS AG, STAMFORD BRANCH,
                                   as a Lender

                              By:   /s/ Wilfred V. Smith
                                    ------------------------------------
                                    Name:   Wilfred V. Smith
                                    Title:  Director

                                      -14-
<PAGE>
                              If second signature is necessary:

                              By:   /s/ Barbara Ezell-McMichael
                                    ------------------------------------
                                    Name:   Barbara Ezell-McMichael
                                    Title:  Associate Director

                                      -15-

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