Document:

Exhibit 10.2

 

GUARANTEE AGREEMENT dated as of February 12, 2018 (as amended, amended and restated, supplemented or otherwise modified from time to time, this “Agreement”), made by GRAFTECH INTERNATIONAL LTD., a Delaware corporation (“Holdings”), GRAFTECH FINANCE INC., a Delaware corporation (“Finance”) and the other subsidiaries of Holdings from time to time party hereto (together with Holdings and Finance, the “Guarantors”), in favor of JPMORGAN CHASE BANK, N.A. (“JPM”) as Collateral Agent for the Secured Parties.

 

WITNESSETH:

 

WHEREAS, pursuant to the Credit Agreement dated as of the date hereof (as the same may be amended, amended and restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), among Holdings, Finance, GrafTech Switzerland SA, a Swiss corporation (“Swissco”), GrafTech Luxembourg II S.à.r.l., a Luxembourg société à responsabilité limitée, having its registered office at 124, boulevard de la Pétrusse, L-2330 Luxembourg and registered with the Luxembourg Trade and Companies Register (Registre de Commerce et des Sociétés) under number B 167199 (“Luxembourg Holdco”, and together with Finance and Swissco, each a “Co-Borrower” and, collectively, the “Co-Borrowers”), the Lenders and Issuing Banks party thereto and JPM, as Administrative Agent and as Collateral Agent, the Lenders have severally agreed to make Loans and the Issuing Banks have agreed to issue Letters of Credit, upon the terms and subject to the conditions set forth therein;

 

WHEREAS, Holdings directly or indirectly owns all of the issued and outstanding equity interests of Finance, Luxembourg Holdco, Swissco and each Subsidiary party hereto;

 

WHEREAS, Finance, Luxembourg Holdco, Swissco and the Guarantors are engaged in related businesses, and each Guarantor will derive substantial direct and indirect benefit from the making of the Loans and the availability of the Letters of Credit; and

 

WHEREAS, it is a condition precedent to the obligations of the Lenders to make the Loans and the Issuing Banks to issue the Letters of Credit that the Guarantors shall have executed and delivered this Agreement to the Collateral Agent for the ratable benefit of the Secured Parties.

 

NOW, THEREFORE, in consideration of the premises and to induce the Secured Parties to enter into the Credit Agreement and to induce the Lenders to make Loans and the Issuing Banks to issue Letters of Credit, each of the Guarantors hereby agrees with the Collateral Agent, for the ratable benefit of the Secured Parties, as follows:

 

SECTION 1.                     Defined Terms.

 

(a)           Unless otherwise defined herein, capitalized terms defined in the Credit Agreement and used herein shall have the meanings given in the Credit Agreement.

 

(b)           As used in this Agreement, the following terms have the meanings specified below:

 

 

(i)            “Agreement” has the meaning assigned to such term in the introductory statement hereto.

 

(ii)           “Claiming Party” has the meaning assigned to such term in Section 3(b).

 

(iii)          “Co-Borrowers” has the meaning assigned to such term in the recitals hereto.

 

(iv)          “Contributing Party” has the meaning assigned to such term in Section 3(b).

 

(v)           “Credit Agreement” has the meaning assigned to such term in the recitals hereto.

 

(vi)          “Guarantors” has the meaning assigned to such term in the introductory statement hereto.

 

(vii)         “Holdings” has the meaning assigned to such term in the introductory statement hereto.

 

(viii)        “JPM” has the meaning assigned to such term in the recitals hereto.

 

(ix)          “Luxembourg Holdco” has the meaning assigned to such term in the recitals hereto.

 

(x)           “Qualified ECP Guarantor” means, in respect of any Secured Swap Obligation, each Guarantor that has total assets exceeding $10,000,000 at the time the relevant Guarantee or grant of the relevant security interest becomes effective with respect to such Secured Swap Obligation or such other Person as constitutes an “eligible contract participant” under the Commodity Exchange Act or any regulations promulgated thereunder and can cause another Person to qualify as an “eligible contract participant” at such time by entering into a keepwell under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

 

(xi)          “Subsidiary Guarantor” means each Guarantor other than Holdings and Finance.

 

(xii)         “Swissco” has the meaning assigned to such term in the recitals hereto.

 

(c)           The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and section references are to this Agreement unless otherwise specified.  The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”.

 

(d)           The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.

 

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SECTION 2.                     Guarantee.

 

(a)           Each Guarantor hereby, jointly and severally, unconditionally and irrevocably, as a primary obligor and not merely as a surety, guarantees to the Collateral Agent, for the ratable benefit of the Secured Parties and their respective successors, endorsees, transferees and assigns, the due, punctual and complete payment and performance by each of the other Loan Parties, when and as due, whether at the stated maturity, by acceleration, upon one or more dates set for prepayment, or otherwise, of the Secured Obligations.  For the avoidance of doubt, each Guarantor further agrees that the Secured Obligations may be extended or renewed, in whole or in part, or amended or modified, without notice to or further assent from such Guarantor, and that it will remain bound upon its guarantee hereunder notwithstanding any extension, renewal, amendment or modification of any Secured Obligation.

 

(b)           Each Guarantor further agrees to pay any and all reasonable expenses (including all reasonable fees, charges and disbursements of counsel) which may be paid or incurred by any Secured Party in enforcing, or obtaining advice of counsel in respect of, any rights with respect to, or collecting, any or all of the Secured Obligations and/or enforcing any rights with respect to, or collecting against, such Guarantor under this Agreement.  This Agreement shall remain in full force and effect until the Termination Date.

 

(c)           Each Guarantor agrees that whenever, at any time, or from time to time, it shall make any payment to the Collateral Agent for the benefit of any Secured Party on account of its liability hereunder, it will notify the Collateral Agent in writing that such payment has been made under this Agreement for such purpose; provided that the failure of such Guarantor to provide such notice shall not preclude the application of such payment to the complete or partial satisfaction of such Guarantor’s obligations hereunder following such Guarantor’s notice to the Collateral Agent of such payment.

 

SECTION 3.                     Indemnity and Contribution.

 

(a)           In addition to all such rights of indemnity and subrogation as the Subsidiary Guarantors may have under applicable law (but subject to Section 4 herein) in respect of any payment hereunder, Holdings and Finance agree that (i) in the event a payment in respect of any obligation of Holdings or Finance shall be made by any Subsidiary Guarantor under this Agreement, Holdings and Finance shall indemnify such Subsidiary Guarantor for the full amount of such payment and such Subsidiary Guarantor shall be subrogated to the rights of the Person to whom such payment shall have been made to the extent of such payment and (ii) in the event any assets of any Subsidiary Guarantor shall be sold pursuant to any Security Document to satisfy in whole or in part any Secured Obligations owed to any Secured Party, Holdings and Finance shall indemnify such Subsidiary Guarantor in an amount equal to the greater of the book value or the fair market value of the assets so sold.

 

(b)           Each Subsidiary Guarantor (a “Contributing Party”) agrees (subject to Section 4 herein) that, in the event a payment shall be made by any other Subsidiary Guarantor hereunder in respect of any Secured Obligations or assets of any other Subsidiary Guarantor shall be sold pursuant to any Security Document to satisfy any Secured Obligation owed to any Secured Party and such other Subsidiary Guarantor (the “Claiming Party”) shall not have been 

 

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fully indemnified as provided in Section 3(a), the Contributing Party shall indemnify the Claiming Party in an amount equal to the amount of such payment or the greater of the book value or the fair market value of such assets, as the case may be, in each case multiplied by a fraction of which the numerator shall be the net worth of the Contributing Party on the date hereof (or, in the case of any Subsidiary Guarantor becoming a party hereto pursuant to Section 25, the date of the Supplement executed and delivered by such Subsidiary Guarantor) and the denominator shall be the aggregate net worth of all the Subsidiary Guarantors on the date hereof (or, in the case of any Subsidiary Guarantor becoming a party hereto pursuant to Section 25, such other date).  Any Contributing Party making any payment to a Claiming Party pursuant to this Section 3(b) shall be subrogated to the rights of such Claiming Party under Section 3(a) to the extent of such payment.

 

SECTION 4.                     No Subrogation.  Notwithstanding any payment or payments made by any of the Guarantors hereunder or any setoff or application of funds of any of the Guarantors by any Secured Party, no Guarantor shall be entitled to be subrogated to any of the rights of any Secured Party against any Loan Party or any other Guarantor or any collateral security or guarantee or right of offset held by any Secured Party for the payment of the Secured Obligations, nor shall any Guarantor seek or be entitled to seek any contribution or reimbursement from any Loan Party or any other Guarantor in respect of payments made by such Guarantor hereunder, until the Termination Date.  If any amount shall be paid to any Guarantor on account of such subrogation rights prior to the Termination Date, such amount shall be held by such Guarantor in trust for the Secured Parties, segregated from other funds of such Guarantor, and forthwith upon receipt by such Guarantor be turned over to the Collateral Agent in the exact form received by such Guarantor (duly endorsed by such Guarantor to the Collateral Agent, if required), to be applied against the Secured Obligations, whether matured or unmatured, at such time and in such order as the Collateral Agent may determine.

 

SECTION 5.                     Amendments, etc. with Respect to the Secured Obligations; Waiver of Rights.  Each Guarantor shall remain obligated hereunder notwithstanding that, without any reservation of rights against any Guarantor and without notice to or further assent by any Guarantor, any demand for payment of any of the Secured Obligations made by any Secured Party may be rescinded by such Secured Party and any of the Secured Obligations continued, and the Secured Obligations, or the liability of any other party upon or for any part thereof, or any collateral security or guarantee therefor or right of offset with respect thereto, may, from time to time, in whole or in part, be renewed, extended, amended, modified, accelerated, compromised, waived, surrendered or released by any Secured Party, and the Credit Agreement, any other Loan Document, any agreements in respect of the Secured Cash Management Obligations, Secured Swap Agreements and any other documents executed and delivered in connection therewith may be amended, amended and restated, modified, supplemented or terminated, in whole or in part, as the Collateral Agent (or the Required Lenders, as the case may be) or the relevant Secured Party (in the case of such agreements in respect of the Secured Cash Management Obligations or Secured Swap Agreements) may deem advisable from time to time, and any collateral security, guarantee or right of offset at any time held by any Secured Party for the payment of the Secured Obligations may be sold, exchanged, waived, surrendered or released.  No Secured Party shall have any obligation to protect, secure, perfect or insure any Lien at any time held by it as security for the Secured Obligations or for this Agreement or any property subject thereto.  When making any demand hereunder against any of the Guarantors, any Secured Party may, but shall 

 

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be under no obligation to, make a similar demand on any Loan Party or any other Guarantor or guarantor, and any failure by any Secured Party to make any such demand or to collect any payments from any Loan Party or any such other Guarantor or guarantor or any release of any Loan Party or such other Guarantor or guarantor shall not relieve any of the Guarantors in respect of which a demand or collection is not made or any of the Guarantors not so released of their several obligations or liabilities hereunder, and shall not impair or affect the rights and remedies, express or implied, or as a matter of law, of any Secured Party against any of the Guarantors.

 

SECTION 6.                     Security.  Each of the Guarantors authorizes each of the Secured Parties, in accordance with the terms and subject to the conditions set forth in the Security Documents to which such Guarantor is a party, to (a) take and hold security for the payment and performance of this Agreement or the Secured Obligations and exchange, enforce, waive and release any such security (with or without consideration), (b) apply such security and direct the order or manner of sale thereof as they in their sole discretion determine and (c) release or substitute any one or more endorsees, other guarantors or other obligors upon or in respect of the Secured Obligations, all without affecting the obligations of any Guarantor hereunder.  To the fullest extent permitted by applicable law, each Guarantor waives any defense based on or arising out of any defense of any Co-Borrower or any other Loan Party or the unenforceability of the Secured Obligations or any part thereof from any cause, or the cessation from any cause of the liability of any Co-Borrower or any other Loan Party, other than the indefeasible payment in full in cash of all the Secured Obligations.  The Collateral Agent and the other Secured Parties may, at their election, foreclose on any security held by one or more of them by one or more judicial or nonjudicial sales, accept an assignment of any such security in lieu of foreclosure, compromise or adjust any part of the Secured Obligations, make any other accommodation with any Co-Borrower or any other Loan Party or exercise any other right or remedy available to them against any Co-Borrower or any other Loan Party, without affecting or impairing in any way the liability of any Guarantor hereunder except to the extent the Secured Obligations have been fully and indefeasibly paid in full in cash.  To the fullest extent permitted by applicable law, each Guarantor waives any defense arising out of any such election even though such election operates, pursuant to applicable law, to impair or to extinguish any right of reimbursement or subrogation or other right or remedy of such Guarantor against any Co-Borrower or any other Loan Party, as the case may be, or any security.

 

SECTION 7.                     Guarantee Absolute and Unconditional.  Each Guarantor waives any and all notice of the creation, renewal, extension or accrual of any of the Secured Obligations and notice of or proof of reliance by any Secured Party upon this Agreement or acceptance of this Agreement; the Secured Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended or waived, in reliance upon this Agreement; and all dealings between any Loan Party and any of the Guarantors, on the one hand, and any of the Secured Parties, on the other hand, likewise shall be conclusively presumed to have been had or consummated in reliance upon this Agreement.  Each Guarantor waives diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon any Loan Party or any of the Guarantors with respect to the Secured Obligations.  Each Guarantor understands and agrees that this Agreement shall be construed as a continuing, absolute and unconditional guarantee of payment, and not of collection, and without regard to (a) the validity, regularity or enforceability of the Credit Agreement, any other Loan 

 

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Document, any agreements in respect of the Secured Cash Management Obligations, Swap Agreements, any of the Secured Obligations or any other collateral security or guarantee therefor or right of offset with respect thereto at any time or from time to time held by any Secured Party, (b) any defense, setoff or counterclaim (other than a defense of payment or performance) which may at any time be available to or be asserted by any Loan Party against any Secured Party or (c) any other circumstance whatsoever (with or without notice to or knowledge of any Secured Party, any Loan Party or such Guarantor) which may or might in any manner or to any extent vary the risk of the Guarantor or otherwise constitutes, or might be construed to constitute, an equitable or legal discharge of any Loan Party in respect of the Secured Obligations, or of such Guarantor under this Agreement, in bankruptcy or in any other instance.  When pursuing its rights and remedies hereunder against any Guarantor, any Secured Party may, but shall be under no obligation to, pursue such rights and remedies as it may have against any Loan Party or any other person (including any other Guarantor) or against any collateral security or guarantee for the Secured Obligations or any right of offset with respect thereto, and any failure by any Secured Party to pursue such other rights or remedies or to collect any payments from any Loan Party or any such other person (including any other Guarantor) or to realize upon any such collateral security or guarantee or to exercise any such right of offset, or any release of any Loan Party or any such other person (including any other Guarantor) or any such collateral security, guarantee or right of offset, shall not relieve such Guarantor of any liability hereunder and shall not impair or affect the rights and remedies, whether express, implied or available as a matter of law, of any Secured Party against such Guarantor.  This Agreement shall remain in full force and effect and be binding in accordance with and to the extent of its terms upon each Guarantor and the successors and assigns thereof, and shall inure to the benefit of each Secured Party and its successors, endorsees, transferees and assigns, until the Termination Date. Anything contained in this Agreement to the contrary notwithstanding, the obligations of each Guarantor under this Agreement shall be limited to an aggregate amount equal to the largest amount that would not render its obligations under this Agreement subject to avoidance as a fraudulent transfer or conveyance under Section 548 of the Bankruptcy Code of the United States or any comparable provisions of any similar federal or state law.

 

SECTION 8.                     Reinstatement.  This Agreement and the guarantee hereunder shall continue to be effective, or be reinstated, as the case may be, if at any time payment, or any part thereof, of any of the Secured Obligations is rescinded or must otherwise be restored or returned by any Secured Party for any reason whatsoever, including upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of any Loan Party or any Guarantor, or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, any Loan Party or any Guarantor or any substantial part of its property, or otherwise, all as though such payments had not been made.

 

SECTION 9.                     Payments.  Each Guarantor hereby guarantees that payments hereunder will be paid to the Collateral Agent without setoff or counterclaim in dollars at the office of the Collateral Agent set forth in the Credit Agreement.

 

SECTION 10.                   Information.  Each of the Guarantors assumes all responsibility for being and keeping itself informed of the Loan Parties’ financial condition and assets and of all other circumstances bearing upon the risk of nonpayment of the Secured Obligations and the nature, scope and extent of the risks that such Guarantor assumes and incurs 

 

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hereunder, and agrees that none of the Secured Parties will have any duty to advise any of the Guarantors of information known to it or any of them regarding such circumstances or risks.

 

SECTION 11.                   Representations and Warranties.  Each Guarantor represents and warrants to and with each Secured Party that all representations and warranties in the Loan Documents that relate to such Guarantor are true and correct (i) in the case of the representations and warranties qualified as to materiality, in all respects and (ii) otherwise, in all material respects, in each case on and as of the date hereof and on and as of each other date on which the representations and warranties in the Credit Agreement are made or are deemed to be made pursuant to the terms thereof (except in the case of any such representation and warranty that expressly relates to a prior date, in which case such representation and warranty is represented and warranted by such Guarantor to be so true and correct or so true and correct in all material respects, as applicable, on and as of such prior date).

 

SECTION 12.                   Covenants.  Each of the Guarantors covenants and agrees with the Secured Parties that, from and after the date of this Agreement until the earlier to occur of (x) the Termination Date and (y) the date that such Guarantor is released from its Guarantee hereunder in accordance with Section 15, unless the Required Lenders shall otherwise consent in writing, it will comply with the provisions set forth in Section 2.17 of the Credit Agreement and each covenant set forth in Articles V and VI of the Credit Agreement to the extent that it relates to such Guarantor.

 

SECTION 13.                   Authority of Collateral Agent.   Each Guarantor acknowledges that the rights and responsibilities of the Collateral Agent under this Agreement with respect to any action taken by the Collateral Agent or the exercise or non- exercise by the Collateral Agent of any option, voting right, request, judgment or other right or remedy provided for herein or resulting or arising out of this Agreement shall, as between the Collateral Agent and the other Secured Parties, be governed by the Credit Agreement and by such other agreements with respect thereto as may exist from time to time among them, but, as between the Collateral Agent and each Guarantor, the Collateral Agent shall be conclusively presumed to be acting as agent for the other Secured Parties with full and valid authority so to act or refrain from acting.

 

SECTION 14.                   Notices.  All notices, requests and demands to or upon any Secured Party or any Guarantor under this Agreement shall be given or made in accordance with Section 9.01 of the Credit Agreement and addressed as follows:

 

(a)           if to any Secured Party, Holdings or Finance, at its address or transmission number for notices provided in Section 9.01 of the Credit Agreement; and

 

(b)           if to any other Guarantor, at the address or transmission number of Holdings provided in Section 9.01 of the Credit Agreement.

 

SECTION 15.                   Release.

 

(a)           Subject to Section 8 hereof, this Agreement and the Guarantees made herein shall terminate automatically on the Termination Date.

 

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(b)           The guarantees made herein shall also terminate and be released at the time or times and in the manner set forth in Section 9.14 of the Credit Agreement.

 

(c)           In connection with any termination or release pursuant to paragraph (a) or (b) of this Section 15, the Collateral Agent shall execute and deliver to any Loan Party, at such Loan Party’s expense, all documents that such Loan Party shall reasonably request to evidence such termination or release.  Any execution and delivery of documents by the Collateral Agent pursuant to this Section 15 shall be without recourse to or warranty by the Collateral Agent.

 

SECTION 16.                   Counterparts; Effectiveness; Several Agreement.  This Agreement may be executed in any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument.  Delivery of an executed counterpart of a signature page of this Agreement by facsimile or other electronic imaging shall be effective as delivery of a manually executed counterpart of this Agreement.  This Agreement shall become effective as to any Guarantor when a counterpart hereof executed on behalf of such Guarantor shall have been delivered to the Collateral Agent and a counterpart hereof shall have been executed on behalf of the Collateral Agent, and thereafter shall be binding upon such Guarantor and the Collateral Agent, and shall inure to the benefit of such Guarantor, the Collateral Agent and the other Secured Parties.  This Agreement shall be construed as a separate agreement with respect to each Guarantor and may be amended, modified, supplemented, waived or released with respect to any Guarantor without the approval of any other Guarantor and without affecting the obligations of any other Guarantor hereunder.

 

SECTION 17.                   Severability.  Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

 

SECTION 18.                   Right of Setoff.  If an Event of Default shall have occurred and be continuing under the Credit Agreement, each Secured Party is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by such Secured Party to or for the credit or the account of any Guarantor against any of and all the obligations of such Guarantor now or hereafter existing under this Agreement irrespective of whether or not such Secured Party shall have made any demand under this Agreement and although such obligations may be unmatured.  The rights of each Secured Party under this Section 18 are in addition to other rights and remedies (including other rights of setoff) any such Secured Party may have.

 

SECTION 19.                   Integration.  This Agreement represents the agreement of each Guarantor with respect to the subject matter hereof and there are no promises or representations by any Guarantor or any Secured Party relative to the subject matter hereof not reflected herein.

 

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SECTION 20.                   Amendments in Writing; No Waiver, Cumulative Remedies.

 

(a)           None of the terms or provisions of this Agreement may be waived, amended, supplemented or otherwise modified except by a written instrument executed by each Guarantor and the Collateral Agent; provided that any provision of this Agreement may be waived by the Required Lenders pursuant to a letter or agreement executed by the Collateral Agent or by telecopy transmission from the Collateral Agent.

 

(b)           No Secured Party shall by any act (except by a written instrument pursuant to Section 20(a)) or delay be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event of Default or in any breach of any of the terms and conditions hereof.  No failure to exercise, nor any delay in exercising, on the part of any Secured Party, any right, power or privilege hereunder shall operate as a waiver thereof.  No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege.  A waiver by any Secured Party of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which such Secured Party would otherwise have on any future occasion.

 

(c)           The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any other rights or remedies provided by law.

 

SECTION 21.                   Section Headings.  The section headings used in this Agreement are for convenience of reference only and are not to affect the construction hereof or be taken into consideration in the interpretation hereof.

 

SECTION 22.                   Successors and Assigns.  This Agreement shall be binding upon the successors and assigns of each Guarantor and shall inure to the benefit of each Guarantor and each Secured Party and their successors and assigns; provided that this Agreement may not be assigned by any Guarantor without the prior written consent of the Collateral Agent.

 

SECTION 23.                  GOVERNING LAW.  THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

 

SECTION 24.                   Submission To Jurisdiction; Waivers.

 

(a)           Each party hereto hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of the Supreme Court of the State of New York and of the United States District Court of the Southern District of New York, in each case sitting in the Borough of Manhattan in the City of New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement or any other Loan Document, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding shall be heard and determined in such New York State or, to the extent permitted by law, in such Federal court.  Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.  Nothing in this Agreement shall affect any right that the Collateral Agent or any Lender may otherwise have to bring any action or

 

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proceeding relating to this Agreement against any Guarantor or its respective properties in the courts of any jurisdiction.

 

(b)           Each party hereto hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection that it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement in any court referred to in paragraph (a) of this Section 24.  Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

 

(c)           Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 14.  Nothing in this Agreement will affect the right of any party to this Agreement or any other Loan Document to serve process in any other manner permitted by law.

 

(d)           Each Guarantor hereby irrevocably designates, appoints and empowers Holdings as its designee, appointee and agent to receive, accept and acknowledge for and on its behalf, and in respect of its property, service of any and all legal process, summons, notices and documents that may be served in any such action or proceeding, and Holdings hereby accepts such designation and appointment.

 

SECTION 25.                   Additional Guarantors.  Pursuant to Section 5.11 of the Credit Agreement (and the requirement thereunder that all actions be taken in order to cause the Collateral and Guarantee Requirement to be satisfied at all times), certain Subsidiaries are required to enter into this Agreement as a Guarantor upon the occurrence of certain events.  Upon execution and delivery, after the date hereof, by the Collateral Agent and such Subsidiary of an instrument in the form of Annex I, such Subsidiary shall become a Guarantor hereunder with the same force and effect as if originally named as a Guarantor hereunder.  The execution and delivery of any such instrument shall not require the consent of any Guarantor hereunder.  The rights and obligations of each Guarantor hereunder shall remain in full force and effect notwithstanding the addition of any new Guarantor as a party to this Agreement.

 

SECTION 26.                  WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 26.

 

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SECTION 27.                   Keepwell.  Each Qualified ECP Guarantor, jointly and severally, hereby absolutely, unconditionally and irrevocably undertakes to provide such funds or other support as may be needed from time to time by each of the other Loan Parties to honor all of such Loan Party’s obligations under this Agreement and the other Loan Documents in respect of Secured Swap Obligations (provided, however, that each Qualified ECP Guarantor shall only be liable under this Section 27 for the maximum amount of such liability that can be hereby incurred without rendering its obligations under this Section 27, or otherwise under this Agreement or the other Loan Documents, voidable under applicable law, including fraudulent conveyance or fraudulent transfer laws, and not for any greater amount).  The obligations of each Qualified ECP Guarantor under this Section 27 shall remain in full force and effect until the Termination Date, in each case, in accordance with and subject to the limitations set forth in Section 9.05 of the Credit Agreement.  Each Qualified ECP Guarantor intends that this Section 27 constitute, and this Section 27 shall be deemed to constitute, a “keepwell, support, or other agreement” for the benefit of each other Guarantor for all purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

 

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IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to be duly executed and delivered by its duly authorized officer as of the day and year first above written.

 

	
 
    	
GRAFTECH INTERNATIONAL LTD.
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Quinn J. Coburn
    
	
 
    	
 
    	
Name:
    	
Quinn J. Coburn
    
	
 
    	
 
    	
Title:
    	
Chief Financial Officer
    

 

[Signature Page to Guarantee Agreement]

 

 

IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to be duly executed and delivered by its duly authorized officer as of the day and year first above written.

 

	
 
    	
GRAFTECH FINANCE INC.
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Quinn J. Coburn
    
	
 
    	
 
    	
Name:
    	
Quinn J. Coburn
    
	
 
    	
 
    	
Title:
    	
Vice President and   Treasurer
    

 

[Signature Page to Guarantee Agreement]

 

 

IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to be duly executed and delivered by its duly authorized officer as of the day and year first above written.

 

	
 
    	
SEADRIFT COKE L.P.
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Quinn J. Coburn
    
	
 
    	
 
    	
Name:
    	
Quinn J. Coburn
    
	
 
    	
 
    	
Title:
    	
Vice President and   Treasurer
    

 

[Signature Page to Guarantee Agreement]

 

 

IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to be duly executed and delivered by its duly authorized officer as of the day and year first above written.

 

	
 
    	
GRAFTECH USA LLC
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Quinn J. Coburn
    
	
 
    	
 
    	
Name:
    	
Quinn J. Coburn
    
	
 
    	
 
    	
Title:
    	
Vice President and   Treasurer
    

 

[Signature Page to Guarantee Agreement]

 

 

IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to be duly executed and delivered by its duly authorized officer as of the day and year first above written.

 

	
 
    	
GRAFTECH HOLDINGS INC.
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Quinn J. Coburn
    
	
 
    	
 
    	
Name:
    	
Quinn J. Coburn
    
	
 
    	
 
    	
Title:
    	
Vice President and   Treasurer
    

 

[Signature Page to Guarantee Agreement]

 

 

IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to be duly executed and delivered by its duly authorized officer as of the day and year first above written.

 

	
 
    	
GRAFTECH GLOBAL ENTERPRISES INC.
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Quinn J. Coburn
    
	
 
    	
 
    	
Name:
    	
Quinn J. Coburn
    
	
 
    	
 
    	
Title:
    	
Vice President and   Treasurer
    

 

[Signature Page to Guarantee Agreement]

 

 

IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to be duly executed and delivered by its duly authorized officer as of the day and year first above written.

 

	
 
    	
GRAFTECH INTERNATIONAL HOLDINGS INC.
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Quinn J. Coburn
    
	
 
    	
 
    	
Name:
    	
Quinn J. Coburn
    
	
 
    	
 
    	
Title:
    	
Vice President and   Treasurer
    

 

[Signature Page to Guarantee Agreement]

 

 

IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to be duly executed and delivered by its duly authorized officer as of the day and year first above written.

 

	
 
    	
GRAFTECH DE LLC
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Quinn J. Coburn
    
	
 
    	
 
    	
Name:
    	
Quinn J. Coburn
    
	
 
    	
 
    	
Title:
    	
Vice President and   Treasurer
    

 

[Signature Page to Guarantee Agreement]

 

 

IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to be duly executed and delivered by its duly authorized officer as of the day and year first above written.

 

	
 
    	
GRAFTECH TECHNOLOGY LLC
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Quinn J. Coburn
    
	
 
    	
 
    	
Name:
    	
Quinn J. Coburn
    
	
 
    	
 
    	
Title:
    	
Vice President and   Treasurer
    

 

[Signature Page to Guarantee Agreement]

 

 

IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to be duly executed and delivered by its duly authorized officer as of the day and year first above written.

 

	
 
    	
GRAFTECH ELECTRODE NETWORK LLC
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Quinn J. Coburn
    
	
 
    	
 
    	
Name:
    	
Quinn J. Coburn
    
	
 
    	
 
    	
Title:
    	
Vice President and   Treasurer
    

 

[Signature Page to Guarantee Agreement]

 

 

IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to be duly executed and delivered by its duly authorized officer as of the day and year first above written.

 

	
 
    	
GRAFTECH ADVANCED GRAPHITE MATERIALS LLC
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Quinn J. Coburn
    
	
 
    	
 
    	
Name:
    	
Quinn J. Coburn
    
	
 
    	
 
    	
Title:
    	
Vice President and   Treasurer
    

 

[Signature Page to Guarantee Agreement]

 

 

IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to be duly executed and delivered by its duly authorized officer as of the day and year first above written.

 

	
 
    	
GRAFTECH SEADRIFT HOLDING CORP.
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Quinn J. Coburn
    
	
 
    	
 
    	
Name:
    	
Quinn J. Coburn
    
	
 
    	
 
    	
Title:
    	
Vice President and   Treasurer
    

 

[Signature Page to Guarantee Agreement]

 

 

IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to be duly executed and delivered by its duly authorized officer as of the day and year first above written.

 

	
 
    	
GRAFTECH NY INC.
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Quinn J. Coburn
    
	
 
    	
 
    	
Name:
    	
Quinn J. Coburn
    
	
 
    	
 
    	
Title:
    	
Vice President and   Treasurer
    

 

[Signature Page to Guarantee Agreement]

 

 

	
 
    	
JPMORGAN CHASE BANK, N.A.,
    
	
 
    	
as Collateral Agent
    
	
 
    	
 
    
	
 
    	
by:
    	
/s/ James Shender
    
	
 
    	
 
    	
Name:
    	
James Shender
    
	
 
    	
 
    	
Title:
    	
Vice President
    

 

[Signature Page to Guarantee Agreement]Exhibit 10.3

 

	
 
    	
 
    	
 
    

 

COLLATERAL AGREEMENT

 

dated as of

 

February 12, 2018,

 

among

 

GRAFTECH INTERNATIONAL LTD.,

as Holdings,

 

GRAFTECH FINANCE INC.,

as Finance,

 

THE OTHER GRANTORS PARTY HERETO,

 

and

 

JPMORGAN CHASE BANK, N.A., 
 as Collateral Agent

 

	
 
    	
 
    	
 
    

 

 

TABLE OF CONTENTS

 

	
ARTICLE I
    
	
 
    
	
DEFINITIONS
    
	
 
    	
 
    	
 
    
	
SECTION 1.01.
    	
Defined Terms
    	
1
    
	
SECTION 1.02.
    	
Other Defined Terms
    	
1
    
	
 
    	
 
    	
 
    
	
ARTICLE II
    
	
 
    
	
PLEDGE OF   SECURITIES
    
	
 
    	
 
    	
 
    
	
SECTION 2.01.
    	
Pledge
    	
4
    
	
SECTION 2.02.
    	
Delivery of the Pledged   Collateral
    	
5
    
	
SECTION 2.03.
    	
Representations,   Warranties and Covenants
    	
5
    
	
SECTION 2.04.
    	
Registration in Nominee   Name; Denominations
    	
7
    
	
SECTION 2.05.
    	
Voting Rights;   Dividends and Interest
    	
7
    
	
SECTION 2.06.
    	
Article 8 Opt-In
    	
9
    
	
 
    	
 
    	
 
    
	
ARTICLE III
    
	
 
    
	
SECURITY   INTERESTS IN PERSONAL PROPERTY
    
	
 
    	
 
    	
 
    
	
SECTION 3.01.
    	
Security Interest
    	
10
    
	
SECTION 3.02.
    	
Representations and   Warranties
    	
11
    
	
SECTION 3.03.
    	
Covenants
    	
13
    
	
SECTION 3.04.
    	
Other Actions
    	
15
    
	
SECTION 3.05.
    	
Covenants Regarding   Patent, Trademark and Copyright Collateral
    	
16
    
	
 
    	
 
    	
 
    
	
ARTICLE IV
    
	
 
    
	
REMEDIES
    
	
 
    	
 
    	
 
    
	
SECTION 4.01.
    	
Remedies upon Default
    	
17
    
	
SECTION 4.02.
    	
Application of Proceeds
    	
18
    
	
SECTION 4.03.
    	
Securities Act
    	
19
    
	
SECTION 4.04.
    	
Grant of License to Use   Intellectual Property
    	
20
    
	
 
    	
 
    	
 
    
	
ARTICLE V
    
	
 
    
	
MISCELLANEOUS
    
	
 
    	
 
    	
 
    
	
SECTION 5.01.
    	
Notices
    	
21
    
	
SECTION 5.02.
    	
Waivers; Amendment
    	
21
    

 

i

 

	
SECTION 5.03.
    	
Collateral Agent’s Fees   and Expenses; Indemnification
    	
21
    
	
SECTION 5.04.
    	
Successors and Assigns
    	
21
    
	
SECTION 5.05.
    	
Survival of Agreement
    	
22
    
	
SECTION 5.06.
    	
Counterparts;   Effectiveness; Several Agreement
    	
22
    
	
SECTION 5.07.
    	
Severability
    	
22
    
	
SECTION 5.08.
    	
Right of Set-off
    	
22
    
	
SECTION 5.09.
    	
Governing Law;   Jurisdiction; Consent to Service of Process; Appointment of Service of   Process Agent
    	
23
    
	
SECTION 5.10.
    	
WAIVER OF JURY TRIAL
    	
23
    
	
SECTION 5.11.
    	
Headings
    	
24
    
	
SECTION 5.12.
    	
Security Interest   Absolute
    	
24
    
	
SECTION 5.13.
    	
Termination or Release
    	
24
    
	
SECTION 5.14.
    	
Additional Subsidiaries
    	
24
    
	
SECTION 5.15.
    	
Collateral Agent   Appointed Attorney-in-Fact
    	
25
    
	
SECTION 5.16.
    	
Intercreditor   Agreements Govern
    	
26
    
	
SECTION 5.17.
    	
No Liability
    	
26
    

 

	
Schedules
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Schedule I
    	
Grantors
    	
 
    
	
Schedule II
    	
Pledged Equity Interests;   Pledged Debt Securities
    	
 
    
	
Schedule III
    	
Intellectual Property
    	
 
    
	
Schedule IV
    	
Commercial Tort Claims
    	
 
    
	
 
    	
 
    	
 
    
	
Exhibits
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Exhibit I
    	
Form of Grantor   Supplement
    	
 
    
	
Exhibit II
    	
Form of Copyright   Security Agreement
    	
 
    
	
Exhibit III
    	
Form of Patent   Security Agreement
    	
 
    
	
Exhibit IV
    	
Form of Trademark   Security Agreement
    	
 
    

 

ii

 

COLLATERAL AGREEMENT dated as of February 12, 2018 (as amended, amended and restated, supplemented or otherwise modified from time to time, this “Agreement”) among GRAFTECH INTERNATIONAL LTD., a Delaware corporation (“Holdings”), GRAFTECH FINANCE INC., a Delaware corporation (“Finance”), the other GRANTORS from time to time party hereto and JPMORGAN CHASE BANK, N.A., as Collateral Agent (in such capacity, together with its successors and assigns, the “Collateral Agent”).

 

Reference is made to the Credit Agreement dated as of the date hereof (as amended, amended and restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), among Holdings, Finance, GRAFTECH SWITZERLAND SA, a Swiss corporation (“Swissco”), GRAFTECH LUXEMBOURG II S.À.R.L., a Luxembourg société à responsabilité limitée, having its registered office at 124, boulevard de la Pétrusse, L-2330 Luxembourg and registered with the Luxembourg Trade and Companies Register (Registre de Commerce et des Sociétés) under number B 167199 (“Luxembourg Holdco”, and together with Finance and Swissco, each a “Co-Borrower” and, collectively, the “Co-Borrowers”), the Lenders and Issuing Banks party thereto from time to time and JPMorgan Chase Bank, N.A., as Administrative Agent and Collateral Agent.  The Lenders have severally agreed to make Loans and Issuing Banks have agreed to issue Letters of Credit to the Co-Borrowers subject to the terms and conditions set forth in the Credit Agreement.  The obligations of the Lenders and the Issuing Banks to make the Loans and issue the Letters of Credit are conditioned upon, among other things, the execution and delivery of this Agreement.  The Grantors are Affiliates of the Co-Borrowers, will derive substantial benefits from the making of the Loans and the availability of the Letters of Credit to the Co-Borrowers pursuant to the Credit Agreement and are willing to execute and deliver this Agreement in order to induce the Lenders and the Issuing Banks to make the Loans and issue the Letters of Credit.  Accordingly, the parties hereto agree as follows:

 

ARTICLE I

 

Definitions

 

SECTION 1.01.            Defined Terms.

 

(a) Each capitalized term used but not defined herein shall have the meaning assigned thereto in the Credit Agreement; provided that each term defined in the New York UCC (as defined herein) and not defined in this Agreement or the Credit Agreement shall have the meaning specified in the New York UCC.  The term “instrument” shall have the meaning specified in Article 9 of the New York UCC.

 

(b)           The rules of construction specified in Sections 1.03 and 1.04 of the Credit Agreement also apply to this Agreement, mutatis mutandis.

 

SECTION 1.02.            Other Defined Terms.  As used in this Agreement, the following terms have the meanings specified below:

 

“Account Debtor” means any Person that is or may become obligated to any Grantor under, with respect to or on account of an Account, Chattel Paper or General Intangible.

 

 

“Agreement” has the meaning assigned to such term in the preamble to this Agreement.

 

“Article 9 Collateral” has the meaning assigned to such term in Section 3.01.

 

“Co-Borrower” has the meaning assigned to such term in the preamble to this Agreement.

 

“Collateral” means Article 9 Collateral and Pledged Collateral.

 

“Collateral Agent” has the meaning assigned to such term in the preamble to this Agreement.

 

“Copyright Security Agreement” means the Copyright Security Agreement substantially in the form of Exhibit II hereto.

 

“Copyrights” means, with respect to any Grantor, all of such Grantor’s right, title, and interest in and to the following: (a) all copyrights, rights and interests in copyrights, works protectable by copyright, copyright registrations, and copyright applications, (b) all renewals of any of the foregoing, (c) all income, royalties, damages, claims, and payments now or hereafter due or payable under and with respect thereto, including, damages and payments for past, present and future infringements thereof, (d) all rights to sue for past, present and future infringements thereof and (e) all rights corresponding to any of the foregoing throughout the world.

 

“Credit Agreement” has the meaning assigned to such term in the preamble to this Agreement.

 

“Federal Securities Laws” has the meaning assigned to such term in Section 4.03.

 

“Grantor Supplement” means an instrument in the form of Exhibit I hereto, or any other form approved by the Collateral Agent.

 

“Grantors” means, collectively, (a) Holdings, (b) Finance, (c) each other Subsidiary of Holdings identified on Schedule I hereto and (d) each Subsidiary that becomes a party to this Agreement as a Grantor on or after the Effective Date.

 

“Holdings” has the meaning assigned to such term in the preamble to this Agreement.

 

“Intellectual Property” means, with respect to any Grantor, all intellectual property rights of every kind and nature now owned or hereafter acquired by such Grantor, including Patents, Copyrights, Trademarks, Licenses and all registrations and applications of any of the foregoing.

 

“Intercompany Note” means a promissory note substantially in the form of Exhibit I to the Credit Agreement.

 

2

 

“Inventory” has the meaning set forth in Article 9 of the UCC and shall include (a) all goods intended for sale or lease or for display or demonstration, (b) all work in process and (c) all raw materials and other materials and supplies of every nature and description used or which might be used in connection with the manufacture, packing, shipping, advertising, selling, leasing or furnishing of goods or services or otherwise used or consumed in the conduct of business.

 

“Licenses” means, with respect to any Grantor, all such Grantor’s right, title and interest in and to (a) any and all written licensing or similar arrangements in and to any and all (1) Patents, (2) Copyrights or (3) Trademarks, (b) all income, royalties, damages, claims and payments now or hereafter due or payable under and with respect thereto and (c) all rights to sue for past, present, and future breaches thereof.

 

“New York UCC” means the Uniform Commercial Code as from time to time in effect in the State of New York.

 

“Patent Security Agreement” means the Patent Security Agreement substantially in the form of Exhibit III hereto.

 

“Patents” means, with respect to any Grantor, all of such Grantor’s right, title, and interest in and to: (a) any and all patents and patent applications, (b) all inventions and improvements described and claimed therein, (c) all reissues, divisions, continuations, renewals, extensions, and continuations-in-part thereof, (d) all income, royalties, damages, claims, and payments now or hereafter due or payable under and with respect thereto, including damages and payments for past, present and future infringements thereof, (e) all rights to sue for past, present, and future infringements thereof and (f) all rights corresponding to any of the foregoing throughout the world.

 

“Pledged Collateral” means collectively, (a) all of the Equity Interests of Restricted Subsidiaries (other than Excluded Equity Interests) held by any Grantor, including such Equity Interests described in Schedule 6 in the Perfection Certificate issued by the entities named therein and all other Equity Interests required to be pledged by any Grantor under Section 5.11 or 5.12 of the Credit Agreement (the “Pledged Equity Interests”) and (b) each promissory note (including the Intercompany Note, if any), Tangible Chattel Paper and Instrument evidencing Indebtedness in excess of $10,000,000 (individually) owed to any Grantor (other than such promissory notes, Tangible Chattel Paper and Instruments that are Excluded Assets) described in Schedule 7, in the Perfection Certificate and issued by the entities named therein and all other Indebtedness owed to any Grantor hereafter and required to be pledged by any Grantor pursuant to Section 5.11 or 5.12 of the Credit Agreement, in each case as such Section may be amended pursuant to Section 9.02 of the Credit Agreement (the “Pledged Debt Securities”).

 

“Pledged Debt Securities” has the meaning assigned to such term in clause (b) of the definition of Pledged Collateral.

 

“Pledged Equity Interests” has the meaning assigned to such term in clause (a) of the definition of Pledged Collateral.

 

3

 

“Pledged Securities” means any promissory notes, stock certificates, unit certificates, limited or unlimited liability company interest certificates or other securities (to the extent certificated) now or hereafter included in the Pledged Collateral, including all certificates, instruments or other documents representing or evidencing any Pledged Collateral.

 

“Secured Parties” means (a) each Lender and Issuing Bank, (b) the  Administrative Agent, (c) the Collateral Agent, (d) each holder of Secured Swap Obligations, (e) each holder of Secured Cash Management Obligations, (f) each Joint Lead Arranger, (g) the beneficiaries of each indemnification obligation undertaken by any Loan Party under any Loan Document and (h) the permitted successors and assigns of each of the foregoing.

 

“Security Interest” has the meaning assigned to such term in Section 3.01(a).

 

“Stock Rights” means all dividends, instruments or other distributions and any other right or property which any Grantor shall receive or shall become entitled to receive for any reason whatsoever with respect to, in substitution for or in exchange for any Equity Interest constituting Collateral, any right to receive an Equity Interest constituting Collateral and any right to receive earnings, in which such Grantor now has or hereafter acquires any right, issued by an issuer of such Equity Interest.

 

“Trademark Security Agreement” means the Trademark Security Agreement substantially in the form of Exhibit IV hereto.

 

“Trademarks” means, with respect to any Grantor, all of such Grantor’s right, title, and interest in and to the following: (a) all trademarks (including service marks), trade names, trade dress, and trade styles and the registrations and applications for registration thereof and the goodwill of the business symbolized by the foregoing, (b) all renewals of the foregoing, (c) all income, royalties, damages, claims, and payments now or hereafter due or payable under and with respect thereto, including damages and payments for past, present and future infringements thereof, (d) all rights to sue for past, present and future infringements thereof and (e) all rights corresponding to any of the foregoing throughout the world.

 

“UCC” means the New York UCC; provided, however, that, at any time, if by reason of mandatory provisions of law, any or all of the perfection, effect of perfection or priority of the Collateral Agent’s and the Secured Parties’ security interest in any item or portion of the Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, the term “UCC” shall mean the Uniform Commercial Code as in effect, at such time, in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or priority and for purposes of definitions relating to such provisions.

 

ARTICLE II

 

Pledge of Securities

 

SECTION 2.01.            Pledge.  As security for the payment or performance, as the case may be, in full of the Secured Obligations, each Grantor hereby pledges, assigns and grants

 

4

 

to the Collateral Agent, on behalf of and for the benefit of the Secured Parties, a security interest in all of its right, title and interest in, to and under all of the Pledged Collateral.

 

Notwithstanding the foregoing or anything herein to the contrary, in no event shall the “Pledged Collateral” include or the security interest attach to any Excluded Assets or Excluded Equity Interests.

 

SECTION 2.02.            Delivery of the Pledged Collateral.

 

(a) Subject to pari passu Customary Intercreditor Agreement, if any, each Grantor will promptly deliver to the Collateral Agent (or its non-fiduciary agent or designee) upon execution of this Agreement all certificates, now or hereafter acquired, if any, representing or evidencing the Pledged Collateral to the extent such certificates constitute certificated securities (other than checks received in the ordinary course of business), together with duly executed instruments of transfer or assignments in blank.

 

(b) Except as otherwise addressed in Section 3.03(b) herein, if any amount payable with respect to any Indebtedness owed to any Grantor shall be or become evidenced by any promissory note (which may be a global note), such note or instrument shall be promptly delivered (but in any event within 45 days of receipt (other than any promissory note in an aggregate principal amount of less than $10,000,000 owed to the applicable Grantor by any Person) by such Grantor or such longer period as the Collateral Agent may agree in its reasonable discretion) to the Collateral Agent, for the benefit of the Secured Parties, together with an undated instrument of transfer duly executed in blank and in a manner reasonably satisfactory to the Collateral Agent.

 

(c) Upon delivery to the Collateral Agent, (i) any certificate or promissory note representing Pledged Securities shall be accompanied by undated stock or note powers, as applicable, duly executed in blank by the applicable Grantor or other undated instruments of transfer duly executed in blank by the applicable Grantor and reasonably satisfactory to the Collateral Agent and by such other instruments and documents as the Collateral Agent may reasonably request and (ii) all other property comprising part of the Pledged Collateral shall be accompanied by undated proper instruments of assignment duly executed in blank by the applicable Grantor and such other instruments and documents as the Collateral Agent may reasonably request.  Each delivery of Pledged Securities after the date hereof shall be accompanied by a schedule describing such Pledged Securities, which schedule shall be deemed attached to, and shall supplement, Schedule II hereto and be made a part hereof; provided that failure to provide any such schedule hereto shall not affect the validity of such pledge of such Pledged Securities.  Each schedule so delivered shall supplement any prior schedules so delivered.

 

SECTION 2.03.            Representations, Warranties and Covenants.  The Grantors jointly and severally represent, warrant and covenant to and with the Collateral Agent, for the benefit of the Secured Parties, that:

 

(a)           as of the Effective Date, Schedule II hereto sets forth a true and complete list, with respect to each Grantor, of all the Pledged Equity Interests owned by such Grantor in

 

5

 

any Subsidiary of Holdings and the percentage of the issued and outstanding Equity Interests of the issuer thereof represented by the Pledged Equity Interests owned by such Grantor and all the Pledged Debt Securities owned by such Grantor;

 

(b)           the Pledged Equity Interests and the Pledged Debt Securities have been duly and validly authorized and issued by the issuers thereof and (i) in the case of Pledged Equity Interests, are fully paid and, in the case of corporate interests, nonassessable and (ii) in the case of Pledged Debt Securities, are legal, valid and binding obligations of the issuers thereof, except to the extent that enforceability of such obligations may be limited by applicable bankruptcy, insolvency, and other similar laws affecting creditors’ rights generally; provided that the foregoing representations, insofar as they relate to the Pledged Collateral issued by a Person other than any Subsidiary of Holdings, are made to the knowledge of the Grantors;

 

(c)           except for the security interests granted hereunder and under any other Loan Documents, each of the Grantors (i) is and, subject to any transfers made in compliance with the Credit Agreement, will continue to be the direct owner, beneficially and of record, of the Pledged Equity Interests and Pledged Debt Securities indicated on Schedule II hereto as owned by such Grantor, (ii) holds the same free and clear of all Liens, other than Liens permitted pursuant to Section 6.02 of the Credit Agreement and transfers made in compliance with the Credit Agreement, (iii) will make no further assignment, pledge, hypothecation or transfer of, or create or permit to exist any security interest in or other Lien on, the Pledged Collateral, other than Liens permitted pursuant to Section 6.02 of the Credit Agreement and transfers made in compliance with the Credit Agreement and (iv) will use commercially reasonable efforts to defend its title or interest thereto or therein against any and all Liens (other than the Liens permitted pursuant to Section 6.02 of the Credit Agreement), however arising, of all Persons whomsoever;

 

(d)           except for restrictions and limitations imposed by or otherwise permitted by the Loan Documents (including any Liens permitted pursuant to Section 6.02 of the Credit Agreement) or securities laws generally, the Pledged Equity Interests and, to the extent issued by Holdings, or any Subsidiary of Holdings, the Pledged Debt Securities are and will continue to be freely transferable and assignable, and none of the Pledged Equity Interests and, to the extent issued by Holdings, or any other Subsidiary of Holdings, none of the Pledged Debt Securities are or will be subject to any option, right of first refusal, shareholders agreement or Organizational Document provisions or contractual restriction of any nature that might prohibit, impair, delay or otherwise affect in any manner adverse to the Secured Parties in any material respect the pledge of such Pledged Collateral hereunder, the sale or disposition thereof pursuant hereto or the exercise by the Collateral Agent of rights and remedies hereunder;

 

(e)           each of the Grantors has the power and authority to pledge the Pledged Collateral pledged by it hereunder in the manner hereby done or contemplated;

 

(f)            by virtue of the execution and delivery by the Grantors of this Agreement, when any Pledged Securities constituting certificated securities are delivered to the Collateral Agent in accordance with this Agreement, the Collateral Agent will obtain a legal, valid and perfected lien upon and security interest in such Pledged Securities, free of any adverse claims, under the New York UCC to the extent such lien and security interest may be created and

 

6

 

perfected under the New York UCC, as security for the payment and performance of the Secured Obligations, and such lien is and shall be prior to any other Lien on such Pledged Securities; and

 

(g)           subject to the terms of this Agreement and to the extent permitted by applicable law, each Grantor hereby agrees that upon the occurrence and during the continuance of an Event of Default, it will comply with the instructions of the Collateral Agent with respect to the Equity Interests in such Grantor that constitute the Pledged Equity Interests hereunder that are not certificated without further consent by the applicable owner or holder of such Equity Interests.

 

SECTION 2.04.            Registration in Nominee Name; Denominations.  If an Event of Default shall have occurred and is continuing and the Collateral Agent shall have notified the Grantors in writing of its intent to exercise such rights, the Collateral Agent, on behalf of the Secured Parties, shall have the right (in its sole and absolute discretion) to hold the Pledged Securities in the name of the applicable Grantor, endorsed or assigned in blank or in favor of the Collateral Agent or in its own name as pledgee or in the name of its nominee (as pledgee or as sub-agent), and each Grantor will promptly give to the Collateral Agent copies of any notices or other communications received by it with respect to Pledged Securities registered in the name of such Grantor.  Upon the occurrence and during the continuance of an Event of Default, the Collateral Agent shall at all times have the right to exchange the certificates representing Pledged Securities for certificates of smaller or larger denominations for any reasonable purpose consistent with this Agreement.

 

SECTION 2.05.            Voting Rights; Dividends and Interest.

 

(a) Unless and until an Event of Default shall have occurred and is continuing and, other than in the case of an Event of Default under paragraph (h) or (i) of Section 7.01 of the Credit Agreement, the Collateral Agent shall have notified Holdings in writing that their rights under this Section 2.05 are being suspended:

 

(i)    each Grantor shall be entitled to exercise any and all voting and/or other consensual rights and powers inuring to an owner of Pledged Securities or any part thereof; provided that such rights and powers shall not be exercised in any manner that could reasonably be expected to materially and adversely affect the rights and remedies of any of the Collateral Agent or any other Secured Party under this Agreement or any other Loan Document or the ability of the Secured Parties to exercise the same;

 

(ii)   the Collateral Agent shall promptly execute and deliver to each Grantor, or cause to be promptly executed and delivered to such Grantor, all such proxies, powers of attorney and other instruments as such Grantor may reasonably request for the purpose of enabling such Grantor to exercise the voting and/or consensual rights and powers it is entitled to exercise pursuant to paragraph (a)(i) of this Section; and

 

(iii)  each Grantor shall be entitled to receive and retain any and all dividends, interest, principal and other distributions paid on or distributed in respect of the Pledged Securities to the extent and only to the extent that such dividends, interest, principal and other distributions are permitted by, and are otherwise paid or distributed in

 

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accordance with, the terms and conditions of the Credit Agreement, the other Loan Documents and applicable laws; provided that any noncash dividends, interest, principal or other distributions that would constitute Pledged Equity Interests or Pledged Debt Securities, whether resulting from a subdivision, combination or reclassification of the outstanding Equity Interests in the issuer of any Pledged Securities or received in exchange for Pledged Securities or any part thereof, or in redemption thereof, or as a result of any merger, consolidation, acquisition or other exchange of assets to which such issuer may be a party or otherwise, shall be and become part of the Pledged Collateral and, if received by any Grantor, shall be forthwith delivered to the Collateral Agent in the same form as so received (with any necessary endorsements, stock or note powers duly executed in blank and other instruments of transfer reasonably requested by the Collateral Agent), in each case, to the extent required pursuant to Section 2.02 or Section 2.06.  So long as no Event of Default has occurred and is continuing, the Collateral Agent shall promptly deliver to each Grantor any Pledged Securities in its possession if requested to be delivered to the issuer thereof in connection with any exchange or redemption of such Pledged Securities permitted by the Credit Agreement in accordance with this Section 2.05(a)(iii), subject to receipt by the Collateral Agent of a certificate of a Responsible Officer of Holdings with respect thereto and other documents reasonably requested by the Collateral Agent.

 

(b)           Upon the occurrence and during the continuance of an Event of Default, and, other than in the case of an Event of Default under paragraph (h) or (i) of Section 7.01 of the Credit Agreement, after the Collateral Agent shall have notified Holdings, as applicable, of the suspension of their rights under paragraph (a)(iii) of this Section 2.05, all rights of any Grantor to dividends, interest, principal or other distributions that such Grantor is authorized to receive pursuant to paragraph (a)(iii) of this Section 2.05 shall cease, and all such rights shall thereupon become vested in the Collateral Agent, which shall have the sole and exclusive right and authority to receive and retain such dividends, interest, principal or other distributions; provided that, to the extent directed by the Required Lenders, the Collateral Agent shall have the right from time to time following the occurrence and during the continuance of an Event of Default to permit the Grantors to exercise such rights.  All dividends, interest, principal or other distributions received by any Grantor contrary to the provisions of this Section 2.05 shall be held for the benefit of the Collateral Agent and the other Secured Parties and shall be forthwith delivered to the Collateral Agent upon demand in the same form as so received (with any necessary endorsements, stock or note powers and other instruments of transfer reasonably requested by the Collateral Agent).  Any and all money and other property paid over to or received by the Collateral Agent pursuant to the provisions of this paragraph (b) shall be retained by the Collateral Agent in an account to be established by the Collateral Agent upon receipt of such money or other property and, to the extent so received, shall, subject to any applicable intercreditor agreement, be applied in accordance with the provisions of Section 4.02.  After all Events of Default have been cured or waived and Holdings has delivered to the Collateral Agent a certificate of a Responsible Officer of Holdings to that effect, the Collateral Agent shall promptly repay to each Grantor (without interest) all dividends, interest, principal or other distributions that such Grantor would otherwise have been permitted to retain pursuant to the terms of paragraph (a)(iii) of this Section 2.05 and that remain in such account.

 

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(c)           Upon the occurrence and during the continuance of an Event of Default, and, other than in the case of an Event of Default under paragraph (h) or (i) of Section 7.01 of the Credit Agreement, after the Collateral Agent shall have notified Holdings of the suspension of their rights under paragraph (a)(i) of this Section 2.05, all rights of any Grantor to exercise the voting and consensual rights and powers it is entitled to exercise pursuant to paragraph (a)(i) of this Section 2.05, and the obligations of the Collateral Agent under paragraph (a)(ii) of this Section 2.05, shall cease, and all such rights shall thereupon become vested in the Collateral Agent, which shall have the sole and exclusive right and authority to exercise such voting and consensual rights and powers; provided that, unless otherwise directed by the Required Lenders, the Collateral Agent shall have the right from time to time following and during the continuance of an Event of Default to permit the Grantors to exercise such rights.  After all Events of Default have been cured or waived and Holdings has delivered to the Collateral Agent a certificate of a Responsible Officer of Holdings to that effect, all rights vested in the Collateral Agent pursuant to this paragraph (c) shall cease, and the Grantors shall have the exclusive right to exercise the voting and consensual rights and powers they would otherwise have been entitled to exercise pursuant to paragraph (a)(i) of this Section 2.05.

 

(d)           Any notice given by the Collateral Agent to Holdings, suspending their rights under paragraph (a) of this Section 2.05 (i) may be given by telephone if promptly confirmed in writing, (ii) may be given with respect to one or more of the Grantors at the same or different times and (iii) may suspend the rights of the Grantors under paragraph (a)(i) or paragraph (a)(iii) in part without suspending all such rights (as specified by the Collateral Agent in its sole and absolute discretion) and without waiving or otherwise affecting the Collateral Agent’s rights to give additional notices from time to time suspending other rights; provided that the Collateral Agent shall only provide any such notice if an Event of Default has occurred and is continuing.

 

SECTION 2.06.            Article 8 Opt-In            .  No Grantor shall take any action to cause any membership interest, partnership interest, or other equity interest of any limited liability company or limited partnership owned or controlled by any Grantor comprising Collateral to be or become a “security” within the meaning of, or to be governed by, Article 8 of the UCC as in effect under the laws of the applicable jurisdiction and shall not cause or permit any such limited liability company or limited partnership to “opt in” or to take any other action seeking to establish any membership interest, partnership interest or other equity interest of such limited liability company or limited partnership comprising the Collateral as a “security” or to become certificated, in each case, without delivering all certificates (if any) evidencing such interest to the Collateral Agent in accordance with and as required by Section 2.02 or, in the case of any uncertificated security, without taking such steps, to the extent requested by the Collateral Agent (following notice to the Collateral Agent of any such change, which shall be promptly provided by such Grantor), to provide the Collateral Agent with control (as defined in Article 8-106 of the UCC) of any such security.

 

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ARTICLE III

 

Security Interests in Personal Property

 

SECTION 3.01.            Security Interest.  (a) As security for the payment or performance, as the case may be, in full of the Secured Obligations, each Grantor hereby pledges, assigns and grants to the Collateral Agent, on behalf of and for the benefit of the Secured Parties, a security interest (the “Security Interest”) in all of its right, title and interest in, to and under all of the following property and other assets, whether now owned by or owing to, or hereafter acquired by or arising in favor of, such Grantor, and regardless of where located (all of which are collectively referred to as the “Article 9 Collateral”):

 

(i)                                                 all Accounts;

 

(ii)                                             all Chattel Paper (including Electronic Chattel Paper and Tangible Chattel Paper);

 

(iii)                                           all cash and cash equivalents;

 

(iv)                                          all Documents;

 

(v)                                             all Equipment;

 

(vi)                                          all Fixtures;

 

(vii)                                       all General Intangibles (including all Intellectual Property);

 

(viii)                                    all Goods;

 

(ix)                                          all Instruments;

 

(x)                                             all Inventory;

 

(xi)                                          all Investment Property;

 

(xii)                                       all Letter-of-Credit Rights and Supporting Obligations;

 

(xiii)                                   all Deposit Accounts;

 

(xiv)                                   all Commercial Tort Claims as specified from time to time in Schedule IV hereto (as the same may be updated from time to time in accordance with the terms hereof);

 

(xv)                                      all books, records, files, correspondence, computer programs, tapes, disks and related data processing software which contain information identifying or pertaining to any of the Article 9 Collateral or any Account Debtor or showing the amounts thereof or payments thereon or otherwise necessary or helpful in the realization thereon or the collection thereof; and

 

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(xvi)                                   any and all accessions to, substitutions for and replacements, products and cash and non-cash Proceeds (including Stock Rights) of the foregoing (including any claims to any items referred to in this definition and any claims against third parties for loss of, damage to or destruction of any or all of the Collateral or for proceeds payable under or unearned premiums with respect to policies of insurance) in whatever form, including cash, negotiable instruments and other instruments for the payment of money, Chattel Paper, collateral agreements and other documents.

 

Notwithstanding the foregoing or anything herein to the contrary, in no event shall the “Article 9 Collateral” include or the Security Interest attach to any Excluded Assets; provided, however, that the Security Interest shall immediately attach to, and the Article 9 Collateral shall immediately include, any such asset (or portion thereof) upon such asset (or such portion) ceasing to be an Excluded Asset.

 

(b)           Each Grantor hereby irrevocably authorizes the Collateral Agent (or its designee) for the benefit of the Secured Parties at any time and from time to time to file in any relevant U.S. jurisdiction any financing statements, with respect to the Article 9 Collateral or any part thereof and amendments thereto that (i) describe the collateral covered thereby in any manner that the Collateral Agent reasonably determines is necessary or advisable to ensure the perfection of the security interest in the Article 9 Collateral granted under this Agreement, including indicating the Collateral as “all assets” of such Grantor or words of similar effect and (ii) contain the information required by Article 9 of the UCC for the filing of any financing statement or amendment, including whether such Grantor is an organization, the type of organization and, if required, any organizational identification number issued to such Grantor.  Each Grantor agrees to provide such information to the Collateral Agent promptly upon request.

 

The Collateral Agent is further authorized to file with the United States Patent and Trademark Office or United States Copyright Office (or any successor office), the Patent Security Agreements, Trademark Security Agreements or Copyright Security Agreements, as applicable, for the purpose of perfecting, confirming, continuing, enforcing or protecting the Security Interest in Article 9 Collateral consisting of issued, registered or applied for United States Patents, United States Trademarks, United States Copyrights or exclusive United States Licenses.

 

(c)         The Security Interest and the security interest granted pursuant to Article II are granted as security only and shall not subject the Collateral Agent or any other Secured Party to, or in any way alter or modify, any obligation or liability of any Grantor with respect to or arising out of the Collateral.

 

SECTION 3.02.            Representations and Warranties.  The Grantors jointly and severally represent and warrant to the Collateral Agent, for the benefit of the Secured Parties, that:

 

(a)           each Grantor has good title or valid leasehold interests in the Article 9 Collateral material to its business with respect to which it has purported to grant a Security Interest hereunder, free and clear of any Liens, except for (i) Liens expressly permitted pursuant

 

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to Section 6.02 of the Credit Agreement and (ii) minor defects in title that do not interfere with its ability to conduct its business as currently conducted or as proposed to be conducted or to utilize such properties for their intended purposes, in each case to the extent the failure to have such good title or valid leasehold interest could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, and has full power and authority to grant to the Collateral Agent, for the benefit of the Secured Parties, the Security Interest in such Article 9 Collateral pursuant hereto and to execute, deliver and perform its obligations in accordance with the terms of this Agreement, without the consent or approval of any other Person other than any consent or approval that has been obtained and except to the extent that failure to obtain or make such consent or approval, as the case may be, individually or in aggregate, could not reasonably be expected to have a Material Adverse Effect;

 

(b)           the Perfection Certificate has been duly prepared, completed and executed and the information set forth therein, including the exact legal name and jurisdiction of organization of each Grantor, is correct and complete in all material respects as of the Effective Date.  The UCC financing statements or other appropriate filings, recordings or registrations prepared by the Collateral Agent based upon the information provided to the Collateral Agent in the Perfection Certificate for filing in each governmental, municipal or other office specified in Schedule 5 to the Perfection Certificate (or specified by notice from Holdings to the Collateral Agent after the Effective Date in the case of filings, recordings or registrations required by Section 5.11 or Section 5.12 of the Credit Agreement), are all the filings, recordings and registrations that are necessary to establish a legal, valid and perfected Security Interest in favor of the Collateral Agent, for the benefit of the Secured Parties, in respect of all Article 9 Collateral in which the Security Interest may be perfected by such filing, recording or registration in the United States, and as of the date hereof, no further or subsequent filing, refiling, recording, rerecording, registration or reregistration is necessary, except as provided under applicable law with respect to the filing of continuation statements (and other than filings, if any, which shall be made in the United States Patent and Trademark Office and the United States Copyright Office, as applicable, to record the Security Interest in Article 9 Collateral consisting of issued, registered or applied-for United States Patents, United States Trademarks, United States Copyrights or exclusive United States Copyright Licenses in each case whether existing as of the date hereof or filed, acquired or developed by a Grantor after the date hereof).  The Grantors represent and warrant that, if applicable, a fully executed Patent Security Agreement, Trademark Security Agreement and Copyright Security Agreement, in each case containing a list of the Article 9 Collateral consisting of United States issued Patents, United States registered Trademarks and United States registered Copyrights (and applications for any of the foregoing) and exclusive United States Copyright Licenses, and executed by each Grantor owning any such Article 9 Collateral, have been delivered to the Collateral Agent for recording with the United States Patent and Trademark Office or the United States Copyright Office as applicable, for the benefit of the Secured Parties, in respect of all Article 9 Collateral as of the Effective Date consisting of issued, registered or applied-for United States Patents, United States Trademarks, United States Copyrights or exclusive United States Copyright Licenses in which a security interest may be filed, recorded or registered in the United States Patent and Trademark Office or the United States Copyright Office, as applicable. Other than the filings described in this Section 3.02(b), no further or subsequent filing, refiling, recording, rerecording, registration or reregistration is necessary to perfect the Security Interest in the United States with respect to Article 9 Collateral consisting of issued, registered or applied-for United States Patents, United

 

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States Trademarks, United States Copyrights or exclusive United States Copyright Licenses (other than such actions as are necessary to perfect the Security Interest in the United States with respect to any Article 9 Collateral consisting of issued, registered or applied for United States Patents, United States Trademarks, United States Copyrights or exclusive United States Copyright Licenses acquired or developed by a Grantor after the date hereof);

 

(c)           the Security Interest constitutes (i) a legal and valid security interest in all the Article 9 Collateral securing the payment and performance of the Secured Obligations, (ii) subject to the filings described in paragraph (b) of this Section 3.02 (including payment of applicable fees in connection therewith), a perfected security interest in all Article 9 Collateral in which a security interest may be perfected by filing, recording or registering a financing statement or analogous document in the applicable jurisdiction in the United States (or any political subdivision thereof) pursuant to the UCC and (iii) subject to the filings described in paragraph (b) of this Section 3.02, a perfected security interest in all Article 9 Collateral in which a security interest may be perfected upon the receipt and recording of a Patent Security Agreement, a Trademark Security Agreement or a Copyright Security Agreement with the United States Patent and Trademark Office or the United States Copyright Office, as applicable.  The Security Interest is and shall be prior to any other Lien on any of the Article 9 Collateral, other than Liens permitted pursuant to Section 6.02 of the Credit Agreement;

 

(d)           as of the Effective Date, Schedule III hereto sets forth a true and complete list, with respect to each Grantor, of (i) all of such Grantor’s Patents and Trademarks applied for or issued or registered with the United States Patent and Trademark Office, including the name of the registered owner or applicant and the registration, application, or publication number, as applicable, of each such Patent or Trademark and (ii) all of such Grantor’s Copyrights or exclusive Copyright Licenses applied for or registered with the United States Copyright Office, including the name of the registered owner and the registration number of each such Copyright, in each case, to the extent any of the foregoing are used in and material to the operations of such Grantor’s business as of the Effective Date (as determined by the Grantor in good faith); and

 

(e)           none of the Grantors has filed or consented to the filing of (i) any financing statement or analogous document, in each case with respect to a Lien, under the UCC or any other applicable laws covering any Article 9 Collateral or (ii) any assignment in which any Grantor assigns any Article 9 Collateral or any security agreement or similar instrument covering any Article 9 Collateral with the United States Patent and Trademark Office or the United States Copyright Office, except, in each case, for Liens expressly permitted pursuant to Section 6.02 of the Credit Agreement.

 

SECTION 3.03.            Covenants.  Each Grantor agrees, unless the Required Lenders shall otherwise consent in writing, it will comply with each covenant set forth in Articles V and VI of the Credit Agreement to the extent that is relates to such Grantor and, as to itself and the Collateral pledged by it hereunder, covenants and agrees with the Secured Parties that (in each case from and after the date of this Agreement until this Agreement is terminated and the security interest created hereby is released, subject to Section 5.13):

 

(a) Each Grantor shall, at its own expense, take any and all commercially reasonable actions necessary to (i) defend title to the Article 9 Collateral (other than Intellectual

 

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Property, which is governed by Section 3.05) against all Persons, except with respect to Article 9 Collateral that such Grantor determines in its reasonable business judgment is no longer necessary or beneficial to the conduct of such Grantor’s business, and (ii) defend the Security Interest of the Collateral Agent in the Article 9 Collateral and the priority thereof against any Lien, in each case subject to (x) Liens permitted pursuant to Section 6.02 of the Credit Agreement, (y) transfers made in compliance with the Credit Agreement and (z)  the rights of such Grantor under Section 9.14 of the Credit Agreement and corresponding provisions of the Security Documents to obtain a release of the Liens created under the Security Documents.

 

(b)           Each Grantor agrees, at its own expense, to execute, acknowledge, deliver and cause to be duly filed all such further instruments and documents (including UCC financing statements) and take all such actions as the Collateral Agent may from time to time reasonably request to obtain, preserve, protect and perfect the Security Interest and the rights and remedies created hereby, including the payment of any fees and Taxes required in connection with the execution and delivery of this Agreement, the granting of the Security Interest and the filing and recording of any financing statements or other documents in connection herewith or therewith.  If any amount payable to any Grantor under or in connection with any of the Article 9 Collateral shall be or become evidenced by any promissory note (which may be a global note) or other instrument (other than any promissory note or other instrument in an aggregate principal amount of less than $10,000,000 owed to the applicable Grantor by any Person), such note or instrument shall be promptly delivered (but in any event within 45 days of receipt by such Grantor or such longer period as the Collateral Agent may agree in its reasonable discretion) to the Collateral Agent, for the benefit of the Secured Parties, together with an undated instrument of transfer duly executed in blank and in a manner reasonably satisfactory to the Collateral Agent.

 

(c)           At its option, the Collateral Agent may, with three Business Days’ prior written notice to Holdings, discharge past due Taxes, assessments, charges, fees, Liens, security interests or other encumbrances at any time levied or placed on the Article 9 Collateral and not permitted pursuant to Section 6.02 of the Credit Agreement, and may pay for the maintenance and preservation of the Article 9 Collateral to the extent any Grantor fails to do so as required by the Credit Agreement, this Agreement or any other Loan Document and within a reasonable period of time after the Collateral Agent has reasonably requested that it do so; provided that nothing in this paragraph shall be interpreted as excusing any Grantor from the performance of, or imposing any obligation on the Collateral Agent or any Secured Party to cure or perform, any covenants or other promises of any Grantor with respect to Taxes, assessments, charges, fees, Liens, security interests or other encumbrances and maintenance as set forth herein or in the other Loan Documents.  Notwithstanding anything in this paragraph (c) to the contrary, no Grantor that is a Domestic Foreign Holdco, CFC, or any Subsidiary owned directly or indirectly by a CFC shall be held liable for any Secured Obligations of Holdings, Finance or any other Domestic Subsidiary.

 

(d)           The exercise by the Collateral Agent of any of its rights hereunder shall not release any Grantor from any of its duties or obligations under each contract, agreement or instrument relating to the Article 9 Collateral unless the Collateral Agent has expressly in writing assumed such duties and obligations and each Grantor jointly and severally agrees to indemnify and hold harmless the Collateral Agent and the other Secured Parties from and against any and all liability for such performance.

 

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(e)           Notwithstanding anything herein to the contrary, it is understood that no Grantor shall be required by this Agreement to better assure, preserve, protect or perfect the Security Interest created hereunder by any means other than (i) filings of financing statements pursuant to the UCC, (ii) filings of the Patent Security Agreements, Trademark Security Agreements or Copyright Security Agreements or any amendment or supplement thereto, as applicable, with the United States Patent and Trademark Office or United States Copyright Office, as applicable (or any successor office), in respect of Article 9 Collateral that consists of issued, registered or applied-for United States Copyrights, exclusive United States Copyright Licenses, United States Patents or United States Trademarks, (iii) in the case of Collateral that constitutes Pledged Securities, Instruments, Tangible Chattel Paper or Negotiable Instruments (other than those Negotiable Instruments held in the ordinary course of business), delivery thereof to the Collateral Agent in accordance with the terms hereof (together with, where applicable, undated stock or note powers or other undated proper instruments of assignment, in each case, duly executed in blank) and (iv) other actions to the extent required by Section 3.04 hereunder.  No Grantor shall be required to (i) complete any filings or other action with respect to the better assurance, preservation, protection or perfection of the security interests created hereby in any jurisdiction outside of the United States (including any State thereof and the District of Columbia) or to reimburse the Collateral Agent for any costs incurred in connection with the same or (ii) deliver control agreements with respect to, or confer perfection by “control” over, any Deposit Accounts, Securities Accounts or Commodity Accounts.

 

SECTION 3.04.            Other Actions.  In order to further ensure the attachment, perfection and priority of, and the ability of the Collateral Agent to enforce, the Security Interest, each Grantor agrees, in each case at such Grantor’s own expense and without limiting such Grantor’s obligations otherwise under this Agreement, to take the following actions with respect to the following Article 9 Collateral:

 

(a)           Instruments.  If any Grantor shall at any time hold or acquire any Instruments constituting Collateral (other than Instruments with a face amount of less than $10,000,000 individually and other than checks to be deposited in the ordinary course of business), such Grantor shall promptly (but in any event within 45 days of receipt by such Grantor or such longer period as the Collateral Agent may agree in its reasonable discretion) endorse, assign and deliver the same to the Collateral Agent, accompanied by such undated instruments of transfer or assignment duly executed in blank as the Collateral Agent may from time to time reasonably request.

 

(b)           Investment Property.  Except to the extent otherwise provided in Article II, if any Grantor shall at any time hold or acquire any certificated securities constituting Collateral (other than certificated securities with a value of less than $5,000,000 individually), such Grantor shall forthwith endorse, assign and deliver the same to the Collateral Agent, accompanied by such undated instruments of transfer or assignment duly executed in blank as the Collateral Agent may from time to time reasonably request.

 

(c)           Commercial Tort Claims.  If any Grantor shall at any time hold or acquire a Commercial Tort Claim (in respect of which a complaint or counterclaim has been filed by or on behalf of such Grantor) seeking damages in an amount reasonably estimated to exceed $10,000,000, such Grantor shall promptly notify the Collateral Agent thereof in a writing signed

 

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by such Grantor, including a summary description of such claim, and Schedule IV hereto shall be deemed to be supplemented to include such description of such Commercial Tort Claim as set forth in such writing.

 

SECTION 3.05.            Covenants Regarding Patent, Trademark and Copyright Collaterala.             .  (a) Except to the extent a failure to act could not reasonably be expected to have a Material Adverse Effect, with respect to any registration or pending application of each item of its Intellectual Property constituting Article 9 Collateral and for which such Grantor has standing and ability to do so, each Grantor agrees to take commercially reasonable efforts to (i) take all steps to maintain the validity and enforceability of any United States registered Intellectual Property (or applications therefor) and to maintain such registrations and applications of Intellectual Property in full force and effect and (ii) pursue the registration of each Patent, Trademark or Copyright registration or application that is material to the conduct of such Grantor’s business.  Grantor shall take commercially reasonable steps to defend title to and ownership of its Intellectual Property that is material to the conduct of such Grantor’s business.  Notwithstanding the foregoing, nothing in this Section 3.05 shall prevent any Grantor from disposing of, discontinuing the use or maintenance of, abandoning, failing to pursue or enforce or otherwise allowing to lapse, terminate, be invalidated or put into the public domain any of its issued, registered or applied-for Intellectual Property that is no longer used or useful, or economically practicable to maintain, or if such Grantor determines in its reasonable business judgment that such action or inaction is desirable in the conduct of its business.

 

(b)           Each Grantor agrees that, should it obtain an ownership interest or a License in or to any Intellectual Property after the Effective Date the provisions of this Agreement shall automatically apply thereto.  For the avoidance of doubt, a security interest shall not be granted in any Intellectual Property that constitutes Excluded Assets.

 

(c)           Each Grantor, either itself or through any agent, employee, licensee or designee, shall (i) whenever a certificate is delivered or required to be delivered pursuant to Section 5.03(b) of the Credit Agreement, deliver to the Collateral Agent a schedule setting forth all of such Grantor’s issued, registered and applied-for United States Patents, Trademarks and Copyrights, in each case that are not listed on Schedule III hereto or on a schedule previously provided to the Collateral Agent pursuant to this Section 3.05(c) but excluding, for the avoidance of doubt, any Intellectual Property falling within the scope of the final sentence of Section 3.05(a), and (ii) within a reasonable time following the request of the Collateral Agent, with respect to any such Intellectual Property listed on such schedule that constitutes Article 9 Collateral, execute and deliver a Patent Security Agreement, Trademark Security Agreement or Copyright Security Agreement, as applicable, in respect of such United States Patents, Trademarks and Copyrights.

 

(d)           In connection with the Collateral Agent’s exercise of its remedies under Section 4.01, each Grantor agrees to take commercially reasonable efforts to cooperate with the Collateral Agent in any attempt to prosecute or maintain any material Intellectual Property (as determined by such Grantor in good faith) or sue for infringement of any material Intellectual Property pursuant to Section 4.01.

 

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ARTICLE IV

 

Remedies

 

SECTION 4.01.            Remedies upon Default.  Upon the occurrence and during the continuance of an Event of Default, each Grantor agrees to deliver, on demand, each item of Collateral to the Collateral Agent or any Person designated by the Collateral Agent, and it is agreed that the Collateral Agent shall have the right to take any of or all the following actions at the same or different times:  (a) with respect to any Article 9 Collateral consisting of Intellectual Property, on demand, to cause the Security Interest to become an assignment, transfer and conveyance of any of or all such Article 9 Collateral (provided that no such demand may be made unless an Event of Default has occurred and is continuing) by the applicable Grantors to the Collateral Agent, for the benefit of the Secured Parties, in connection with the Collateral Agent’s exercise of its remedies hereunder and (b) with or without legal process and with or without prior notice or demand for performance, to take possession of the Collateral and occupy (without liability for trespass) any premises owned or, to the extent lawful and permitted, leased by any of the Grantors where the Collateral or any part thereof is assembled or located for a reasonable period in order to effectuate its rights and remedies hereunder or under the UCC or other applicable law.  Without limiting the generality of the foregoing, each Grantor agrees that the Collateral Agent shall have the right, subject to the mandatory requirements of applicable law and the notice requirements described below, to sell or otherwise dispose of all or any part of the Collateral at a public or private sale or at any broker’s board or on any securities exchange, for cash, upon credit or for future delivery as the Collateral Agent shall deem appropriate.  The Collateral Agent shall be authorized at any such sale of securities (if it deems it advisable to do so) to restrict the prospective bidders or purchasers to Persons who will represent and agree that they are purchasing the Collateral for their own account for investment and not with a view to the distribution or sale thereof, and upon consummation of any such sale the Collateral Agent shall have the right to assign, transfer and deliver to the purchaser or purchasers thereof the Collateral so sold.  Each such purchaser at any sale of Collateral shall hold the property sold absolutely free from any claim or right on the part of any Grantor, and each Grantor hereby waives (to the extent permitted by law) all rights of redemption, stay and appraisal that such Grantor now has or may at any time in the future have under any rule of law or statute now existing or hereafter enacted.

 

The Collateral Agent shall give the applicable Grantors no less than 10 days’ prior written notice (which each Grantor agrees is reasonable notice within the meaning of Section 9-611 of the New York UCC or its equivalent in other jurisdictions) of the Collateral Agent’s intention to make any sale of Collateral.  Such notice, in the case of a public sale, shall state the time and place for such sale and, in the case of a sale at a broker’s board or on a securities exchange, shall state the board or exchange at which such sale is to be made and the day on which the Collateral or portion thereof, will first be offered for sale at such board or exchange.  Any such public sale shall be held at such time or times within ordinary business hours and at such place or places as the Collateral Agent may fix and state in the notice (if any) of such sale.  At any such sale, the Collateral, or portion thereof, to be sold may be sold in one lot as an entirety or in separate parcels, as the Collateral Agent may (in its sole and absolute discretion) determine.  The Collateral Agent shall not be obligated to make any sale of any Collateral if it shall determine not to do so, regardless of the fact that notice of sale of such

 

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Collateral shall have been given.  The Collateral Agent may, without notice or publication, adjourn any public or private sale or cause the same to be adjourned from time to time by announcement at the time and place fixed for sale, and such sale may, without further notice, be made at the time and place to which the same was so adjourned.  In case any sale of all or any part of the Collateral is made on credit or for future delivery, the Collateral so sold may be retained by the Collateral Agent until the sale price is paid by the purchaser or purchasers thereof, but the Collateral Agent and the other Secured Parties shall not incur any liability in case any such purchaser or purchasers shall fail to take up and pay for the Collateral so sold and, in case of any such failure, such Collateral may be sold again upon like notice.  At any public (or, to the extent permitted by law, private) sale made pursuant to this Agreement, any Secured Party may bid for or purchase, free (to the extent permitted by law) from any right of redemption, stay, valuation or appraisal on the part of any Grantor (all said rights being also hereby waived and released to the extent permitted by law), the Collateral or any part thereof offered for sale and may make payment on account thereof by using any claim then due and payable to such Secured Party from any Grantor as a credit against the purchase price, and such Secured Party may, upon compliance with the terms of sale, hold, retain and dispose of such property without further accountability to any Grantor therefor.  For purposes hereof, a written agreement to purchase the Collateral or any portion thereof shall be treated as a sale thereof; the Collateral Agent shall be free to carry out such sale pursuant to such agreement and no Grantor shall be entitled to the return of the Collateral or any portion thereof subject thereto, notwithstanding the fact that after the Collateral Agent shall have entered into such an agreement all Events of Default shall have been remedied and the Secured Obligations paid in full.  As an alternative to exercising the power of sale herein conferred upon it, the Collateral Agent may proceed by a suit or suits at law or in equity to foreclose this Agreement and to sell the Collateral or any portion thereof pursuant to a judgment or decree of a court or courts having competent jurisdiction or pursuant to a proceeding by a court-appointed receiver.  Any sale pursuant to the provisions of this Section 4.01, to the extent permitted by applicable law, including Section 9-602 of the New York UCC or its equivalent in other jurisdictions, shall be deemed to conform to the commercial reasonableness standards as provided in Section 9-610(b) of the New York UCC or its equivalent in other jurisdictions.

 

SECTION 4.02.            Application of Proceeds.  Subject to the terms of any applicable intercreditor agreement contemplated by the Credit Agreement, the Collateral Agent shall apply the proceeds of any collection or sale of Collateral, including any Collateral consisting of cash, as follows:

 

FIRST, to the payment of all reasonable and documented or invoiced out-of-pocket costs and expenses incurred by the Collateral Agent in connection with such collection or sale or otherwise in connection with this Agreement, any other Loan Document or any of the Secured Obligations, including all reasonable and documented or invoiced out-of-pocket court costs and the fees and expenses of its agents and legal counsel, the repayment of all advances made by the Collateral Agent hereunder or under any other Loan Document on behalf of any Grantor and any other costs or expenses incurred in connection with the exercise of any right or remedy hereunder or under any other Loan Document;

 

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SECOND, to the payment in full of the Secured Obligations (the amounts so applied to be distributed among the Secured Parties pro rata in accordance with the amounts of the Secured Obligations owed to them on the date of any such distribution);

 

THIRD, to any agent of any junior secured debt, in accordance with any applicable intercreditor agreement; and

 

FOURTH, to the Grantors, their successors or assigns, or as a court of competent jurisdiction may otherwise direct.

 

The Collateral Agent shall have absolute discretion as to the time of application of any such proceeds, moneys or balances in accordance with this Agreement.  Upon any sale of Collateral by the Collateral Agent (including pursuant to a power of sale granted by statute or under a judicial proceeding), the receipt of the Collateral Agent or of the officer making the sale shall be a sufficient discharge to the purchaser or purchasers of the Collateral so sold and such purchaser or purchasers shall not be obligated to see to the application of any part of the purchase money paid over to the Collateral Agent or such officer or be answerable in any way for the misapplication thereof.  The Collateral Agent shall have no liability to any of the Secured Parties for actions taken in reliance on information supplied to it as to the amounts of unpaid principal and interest and other amounts outstanding with respect to the Secured Obligations.  The Grantors shall remain liable for any deficiency if the proceeds of any sale or disposition of the Collateral are insufficient to pay all Secured Obligations, including any reasonable and documented or invoiced out-of-pocket attorneys’ fees and other expenses incurred by the Collateral Agent or any other Secured Party to collect such deficiency.

 

SECTION 4.03.            Securities Act.  In view of the position of the Grantors in relation to the Pledged Collateral, or because of other current or future circumstances, a question may arise under the Securities Act of 1933, as now or hereafter in effect, or any similar statute hereafter enacted analogous in purpose or effect (such Act and any such similar statute as from time to time in effect being called the “Federal Securities Laws”) with respect to any disposition of the Pledged Collateral permitted hereunder.  Each Grantor understands that compliance with the Federal Securities Laws might very strictly limit the course of conduct of the Collateral Agent if the Collateral Agent were to attempt to dispose of all or any part of the Pledged Collateral, and might also limit the extent to which or the manner in which any subsequent transferee of any Pledged Collateral could dispose of the same.  Similarly, there may be other legal restrictions or limitations affecting the Collateral Agent in any attempt to dispose of all or part of the Pledged Collateral under applicable blue sky or other state securities laws or similar laws analogous in purpose or effect.  Each Grantor recognizes that in light of such restrictions and limitations the Collateral Agent may, with respect to any sale of the Pledged Collateral, limit the purchasers to those who will agree, among other things, to acquire such Pledged Collateral for their own account, for investment and not with a view to the distribution or resale thereof, and upon consummation of any such sale may assign, transfer and deliver to the purchaser or purchasers thereof the Pledged Collateral so sold.  Each Grantor acknowledges and agrees that in light of such restrictions and limitations, the Collateral Agent, in its sole and absolute discretion, (a) may proceed to make such a sale whether or not a registration statement for the purpose of registering such Pledged Collateral or part thereof shall have been filed under the Federal Securities Laws to the extent the Collateral Agent has determined that such a registration is not

 

19

 

required by any applicable Requirements of Law and (b) may approach and negotiate with a limited number of potential purchasers (including a single potential purchaser) to effect such sale.  Each Grantor acknowledges and agrees that any such sale might result in prices and other terms less favorable to the seller than if such sale were a public sale without such restrictions.  In the event of any such sale, the Collateral Agent and the other Secured Parties shall incur no responsibility or liability for selling all or any part of the Pledged Collateral at a price that the Collateral Agent, in its sole and absolute discretion, may in good faith deem reasonable under the circumstances, notwithstanding the possibility that a substantially higher price might have been realized if the sale were deferred until after registration as aforesaid or if more than a limited number of purchasers (or a single purchaser) were approached.  The provisions of this Section 4.03 will apply notwithstanding the existence of a public or private market upon which the quotations or sales prices may exceed substantially the price at which the Collateral Agent sells.

 

SECTION 4.04.            Grant of License to Use Intellectual Property.  Upon the occurrence and during the continuance of an Event of Default, for the purpose of enabling the Collateral Agent to exercise rights and remedies under this Agreement, each Grantor hereby grants to the Collateral Agent an irrevocable (until terminated as provided below), nonexclusive license (exercisable without payment of royalty or other compensation to the Grantors) to use or sublicense (to its contractors, agents or representatives, or otherwise exercising its remedies hereunder) any of the Collateral consisting of Intellectual Property now owned or hereafter acquired by such Grantor, and wherever the same may be located, and including in such license reasonable access to all media in which any of the licensed items may be recorded or stored and to all computer software and programs used for the compilation or printout thereof to the extent that such non-exclusive license (a) does not violate the express terms of any agreement between a Grantor and a third party governing such Collateral consisting of Intellectual Property, or gives such third party any right of acceleration, modification, termination or cancellation therein and (b) is not prohibited by any applicable Requirements of Law; provided that such license and sublicenses, (i) with respect to Trademarks, shall be subject to the maintenance of quality standards with respect to the goods and services on which such Trademarks are used sufficient to preserve the validity of such Trademarks and the inurement of any goodwill created by the use of such Trademarks to the benefit of the applicable Grantors and (ii) with respect to trade secrets, shall be subject to the requirement that the secret status of such trade secrets be maintained and reasonable steps are taken to ensure that they are maintained.  The use of such license by the Collateral Agent and the use of any sublicense granted by the Collateral Agent may be exercised solely during the continuation of an Event of Default; provided that upon any termination of such Event of Default, any license, sublicense or other transaction entered into by the Collateral Agent in accordance herewith shall automatically and immediately terminate.  For the avoidance of doubt, at the time of the release of the Liens on any Collateral as set forth in Section 5.13, the license granted to the Collateral Agent pursuant to this Section 4.04 with respect to such Collateral shall automatically and immediately terminate.

 

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ARTICLE V

 

Miscellaneous

 

SECTION 5.01.            Notices.  All communications and notices hereunder shall (except as otherwise expressly permitted herein) be in writing and given as provided in Section 9.01 of the Credit Agreement.  All communications and notices hereunder to any Grantor shall be given to it in care of Holdings as provided in Section 9.01 of the Credit Agreement.

 

SECTION 5.02.            Waivers; Amendment.  (a) No failure or delay by the Collateral Agent, the Administrative Agent, any Issuing Bank or any other Secured Party in exercising any right or power hereunder or under any other Loan Document shall operate as a waiver thereof nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power.  The rights and remedies of the Collateral Agent, the Administrative Agent, the Issuing Banks, the Lenders and any other Secured Party hereunder and under the other Loan Documents are cumulative and are not exclusive of any rights or remedies that they would otherwise have.  No waiver of any provision of this Agreement or consent to any departure by any Loan Party therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section 5.02, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given.  Without limiting the generality of the foregoing, the execution and delivery of this Agreement, the making of a Loan or issuance, amendment, renewal or extension of a Letter of Credit shall not be construed as a waiver of any Default hereunder, regardless of whether the Collateral Agent, the Administrative Agent, any Issuing Bank, any Lender or any other Secured Party may have had notice or knowledge of such Default at the time.  No notice or demand on any Loan Party in any case shall entitle any Loan Party to any other or further notice or demand in similar or other circumstances.

 

(b)        Neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Collateral Agent and the Grantor or Grantors with respect to which such waiver, amendment or modification is to apply, subject to any consent required in accordance with Section 9.02 of the Credit Agreement; provided that the Collateral Agent may, without the consent of any other Secured Party, consent to a departure by any Grantor from any covenant of such Grantor set forth herein to the extent such departure is consistent with the authority of the Collateral Agent set forth in the definition of the term “Collateral and Guarantee Requirement” in the Credit Agreement.

 

SECTION 5.03.            Collateral Agent’s Fees and Expenses; Indemnification.  The provisions of Section 9.03 of the Credit Agreement are incorporated herein by reference, mutatis mutandis; provided that each reference therein to a “Co-Borrower” shall be deemed to be a reference to “each Grantor” and each reference therein to the “Administrative Agent” shall be deemed to be a reference to the “Collateral Agent.”

 

SECTION 5.04.            Successors and Assigns.  Whenever in this Agreement any of the parties hereto is referred to, such reference shall be deemed to include the permitted

 

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successors and assigns of such party, and all covenants, promises and agreements by or on behalf of any Grantor or the Collateral Agent that are contained in this Agreement shall bind and inure to the benefit of their respective successors and assigns.

 

SECTION 5.05.            Survival of Agreement.  All covenants, agreements, representations and warranties made by the Loan Parties in this Agreement and in the certificates or other instruments delivered in connection with or pursuant to this Agreement shall be considered to have been relied upon by the Secured Parties and shall survive the execution and delivery of the Loan Documents and the making of any Loans and issuance of any Letters of Credit, in each case, in accordance with and subject to the limitations set forth in Section 9.05 of the Credit Agreement.

 

SECTION 5.06.            Counterparts; Effectiveness; Several Agreement.  This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original but all of which when taken together shall constitute a single contract.  Delivery of an executed signature page to this Agreement by facsimile or other electronic transmission shall be effective as delivery of a manually signed counterpart of this Agreement.  This Agreement shall become effective as to any Grantor when a counterpart hereof executed on behalf of such Grantor shall have been delivered to the Collateral Agent and a counterpart hereof shall have been executed on behalf of the Collateral Agent, and thereafter shall be binding upon such Grantor and the Collateral Agent and their respective permitted successors and assigns, and shall inure to the benefit of such Grantor, the Collateral Agent and the other Secured Parties and their respective successors and assigns, except that no Grantor shall have the right to assign or otherwise transfer any of its rights or obligations hereunder or any interest herein or in the Collateral (and any such assignment or transfer shall be null and void) except as expressly provided in this Agreement and the Credit Agreement.  This Agreement shall be construed as a separate agreement with respect to each Grantor and may be amended, modified, supplemented, waived or released with respect to any Grantor without the approval of any other Grantor and without affecting the obligations of any other Grantor hereunder.

 

SECTION 5.07.            Severability.  Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

 

SECTION 5.08.            Right of Set-off.  If an Event of Default under the Credit Agreement shall have occurred and be continuing, each Secured Party is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by such Secured Party to or for the credit or the account of any Grantor against any of and all the obligations of such Grantor then due and owing under this Agreement held by such Secured Party, irrespective of whether or not such Secured Party shall have made any demand under this Agreement and although (i) such obligations may be contingent or unmatured and (ii) such obligations are owed to a branch or office of such Secured Party different from the branch or office holding such

 

22

 

deposit or obligated on such Indebtedness.  The applicable Secured Party shall notify the applicable Grantor and the Collateral Agent of such setoff and application; provided that any failure to give or any delay in giving such notice shall not affect the validity of any such set off and application under this Section 5.08.  The rights of each Secured Party under this Section 5.08 are in addition to other rights and remedies (including other rights of setoff) that such Secured Party may have.

 

SECTION 5.09.            Governing Law; Jurisdiction; Consent to Service of Process; Appointment of Service of Process Agent.

 

(a)           This Agreement shall be construed in accordance with and governed by the laws of the State of New York.

 

(b)           Each party hereto hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of the Supreme Court of the State of New York and of the United States District Court of the Southern District of New York, in each case, sitting in the Borough of Manhattan in the City of New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or, to the extent permitted by law, in such Federal court.  Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.  Nothing in this Agreement shall affect any right that the any Agent, any Issuing Bank or any Lender may otherwise have to bring any action or proceeding relating to this Agreement against any Grantor or its respective properties in the courts of any jurisdiction.

 

(c)           Each party hereto hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection that it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement in any court referred to in paragraph (b) of this Section 5.09.  Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

 

(d)           Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 5.01.  Nothing in any Loan Document will affect the right of any party to this Agreement to serve process in any other manner permitted by law.

 

(e)           Each Grantor hereby irrevocably designates, appoints and empowers Holdings as its designee, appointee and agent to receive, accept and acknowledge for and on its behalf, and in respect of its property, service of any and all legal process, summons, notices and documents that may be served in any such action or proceeding and Holdings hereby accepts such designation and appointment.

 

SECTION 5.10.            WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,

 

23

 

ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 5.10.

 

SECTION 5.11.            Headings.  Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or to be taken into consideration in interpreting, this Agreement.

 

SECTION 5.12.            Security Interest Absolute.  All rights of the Collateral Agent hereunder, the Security Interest, the grant of a security interest in the Pledged Collateral and all obligations of each Grantor hereunder shall be absolute and unconditional irrespective of (a) any lack of validity or enforceability of the Credit Agreement, any other Loan Document, any agreement with respect to any of the Secured Obligations or any other agreement or instrument relating to any of the foregoing, (b) any change in the time, manner or place of payment of, or in any other term of, all or any of the Secured Obligations, or any other amendment or waiver of or any consent to any departure from the Credit Agreement, any other Loan Document or any other agreement or instrument, (c) any exchange, release or non-perfection of any Lien on other collateral, or any release or amendment or waiver of or consent under or departure from any guarantee securing or guaranteeing all or any of the Secured Obligations or (d) any other circumstance that might otherwise constitute a defense available to, or a discharge of, any Grantor in respect of the Secured Obligations or this Agreement.

 

SECTION 5.13.            Termination or Release.

 

(a)           This Agreement, the Security Interest and all other security interests granted hereby shall terminate automatically upon the Termination Date.

 

(b)           The Security Interest and all other security interests granted hereby shall also automatically terminate and be released at the time or times and in the manner set forth in Section 9.14 of the Credit Agreement.

 

(c)           In connection with any termination or release pursuant to paragraph (a) or (b) of this Section, the Collateral Agent shall execute and deliver to any Loan Party, at such Loan Party’s expense, all documents that such Loan Party shall reasonably request to evidence such termination or release.  Any execution and delivery of documents by the Collateral Agent pursuant to this Section 5.13 shall be without recourse to or warranty by the Collateral Agent.

 

SECTION 5.14.            Additional Subsidiaries.  The Grantors shall cause (i) each Subsidiary of Holdings (other than any Excluded Subsidiary) which, from time to time, on or

 

24

 

after the date hereof shall be required to pledge any assets to the Collateral Agent for the benefit of the Secured Parties pursuant to the Credit Agreement and (ii) consistent with the Credit Agreement, any Domestic Subsidiary, or to the extent reasonably acceptable to the Collateral Agent, a Subsidiary of Holdings (other than any Excluded Subsidiary) that is not a Wholly Owned Subsidiary (including any consolidated Affiliate in which Holdings and its Subsidiaries own no Equity Interests), which Holdings, at its option, elects to become a Grantor, to execute and deliver to the Collateral Agent a Grantor Supplement regarding such Subsidiary (as applicable), in each case, within the time period provided in Section 5.11 of the Credit Agreement.  Upon execution and delivery of such documents to the Collateral Agent, any such Subsidiary shall become a Grantor hereunder with the same force and effect as if originally named as such herein.  The execution and delivery of any such instrument or document shall not require the consent of any other Grantor hereunder.  The rights and obligations of each Grantor hereunder shall remain in full force and effect notwithstanding the addition of any new Grantor as a party to this Agreement.

 

SECTION 5.15.            Collateral Agent Appointed Attorney-in-Fact.  Each Grantor hereby makes, constitutes and appoints the Collateral Agent (and all officers, employees or agents designated by the Collateral Agent) the attorney-in-fact of such Grantor for the purpose of carrying out the provisions of this Agreement and taking any action and executing any instrument that the Collateral Agent may deem necessary or advisable to accomplish the purposes hereof at any time after and during the continuance of an Event of Default, which appointment is irrevocable (until termination of this Agreement in accordance with Section 5.13) and coupled with an interest.  Without limiting the generality of the foregoing, the Collateral Agent shall have the right, but only upon the occurrence and during the continuance of an Event of Default and written notice by the Collateral Agent to Holdings of its intent to exercise such rights, with full power of substitution either in the Collateral Agent’s name or in the name of such Grantor (a) to receive, endorse, assign and/or deliver any and all notes, acceptances, checks, drafts, money orders or other evidences of payment relating to the Collateral or any part thereof, (b) to demand, collect, receive payment of, give receipt for and give discharges and releases of all or any of the Collateral, (c) to sign the name of any Grantor on any invoice or bill of lading relating to any of the Collateral, (d) upon prior written notice to Holdings, to send verifications of accounts receivable to any Account Debtor, (e) to commence and prosecute any and all suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect or otherwise realize on all or any of the Collateral or to enforce any rights in respect of any Collateral, (f) to settle, compromise, compound, adjust or defend any actions, suits or proceedings relating to all or any of the Collateral, (g) upon prior written notice to Holdings, to notify, or to require any Grantor to notify, Account Debtors to make payment directly to the Collateral Agent, (h) to use, sell, assign, transfer, pledge, make any agreement with respect to or otherwise deal with all or any of the Collateral, and to do all other acts and things necessary, in each case, with respect to the use, licensing or sublicensing of Intellectual Property, subject to Section 4.04 of this Agreement, as applicable, to carry out the purposes of this Agreement, as fully and completely as though the Collateral Agent were the absolute owner of the Collateral for all purposes and (i) to make, settle and adjust claims in respect of Article 9 Collateral under policies of insurance, endorsing the name of such Grantor on any check, draft, instrument or other item of payment for the proceeds of such policies of insurance and for making all determinations and decisions with respect thereto; provided that nothing herein contained shall be construed as requiring or obligating the Collateral Agent to make any commitment or to make

 

25

 

any inquiry as to the nature or sufficiency of any payment received by the Collateral Agent, or to present or file any claim or notice, or to take any action with respect to the Collateral or any part thereof or the moneys due or to become due in respect thereof or any property covered thereby.  The Collateral Agent and the other Secured Parties shall be accountable only for amounts actually received as a result of the exercise of the powers granted to them herein, and neither they nor their Related Parties shall be responsible to any Grantor for any act or failure to act hereunder, except for their own gross negligence, bad faith or willful misconduct (as determined by a court of competent jurisdiction by final and non-appealable judgment) or that of any of their Related Parties.

 

SECTION 5.16.            Intercreditor Agreements Govern.  Notwithstanding anything herein to the contrary, (i) the Liens and security interests granted to the Collateral Agent for the benefit of the Secured Parties pursuant to this Agreement and (ii) the exercise of any right or remedy by the Collateral Agent hereunder or the application of proceeds (including insurance proceeds and condemnation proceeds) of any Collateral, are subject to the provisions of any Customary Intercreditor Agreement contemplated by the Credit Agreement, if and to the extent applicable and/or in effect.

 

SECTION 5.17.            No Liability.  The Collateral Agent shall not be responsible for or have a duty to ascertain or inquire into any representation or warranty regarding the existence, value or collectability of the Collateral, the existence, priority or perfection of the Collateral Agent’s Lien thereon, or any certificate prepared by any Loan Party in connection therewith.  Beyond the exercise of reasonable care in the custody and preservation thereof, the Collateral Agent will have no duty as to any Collateral in its possession or control or in the possession or control of any sub-agent or bailee or any income therefrom or as to the preservation of rights against prior parties or any other rights pertaining thereto.  The Collateral Agent will be deemed to have exercised reasonable care in the custody and preservation of the Collateral in its possession or control if such Collateral is accorded treatment substantially equal to that which it accords its own property, and will not be liable or responsible for any loss or damage to any Collateral, or for any diminution in the value thereof, by reason of any act or omission of any sub-agent or bailee selected by the Collateral Agent in good faith, except to the extent that such liability arises from the Collateral Agent’s gross negligence or willful misconduct.

 

[Remainder of Page Intentionally Left Blank]

 

26

 

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first written above.

 

	
 
    	
GRAFTECH INTERNATIONAL LTD.
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Quinn J. Coburn
    
	
 
    	
 
    	
Name:
    	
Quinn J. Coburn
    
	
 
    	
 
    	
Title:
    	
Chief Financial Officer
    
	
 
    	
 
    
	
 
    	
GRAFTECH FINANCE INC.
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Quinn J. Coburn
    
	
 
    	
 
    	
Name:
    	
Quinn J. Coburn
    
	
 
    	
 
    	
Title:
    	
Vice President and   Treasurer
    

 

[Signature Page to Collateral Agreement]

 

 

	
 
    	
SEADRIFT COKE L.P.
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Quinn J. Coburn
    
	
 
    	
 
    	
Name:
    	
Quinn J. Coburn
    
	
 
    	
 
    	
Title:
    	
Vice President and   Treasurer
    

 

[Signature Page to Collateral Agreement]

 

 

	
 
    	
GRAFTECH USA LLC
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Quinn J. Coburn
    
	
 
    	
 
    	
Name:
    	
Quinn J. Coburn
    
	
 
    	
 
    	
Title:
    	
Vice President and   Treasurer
    

 

[Signature Page to Collateral Agreement]

 

 

	
 
    	
GRAFTECH HOLDINGS INC.
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Quinn J. Coburn
    
	
 
    	
 
    	
Name:
    	
Quinn J. Coburn
    
	
 
    	
 
    	
Title:
    	
Vice President and   Treasurer
    

 

[Signature Page to Collateral Agreement]

 

 

	
 
    	
GRAFTECH GLOBAL ENTERPRISES INC.
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Quinn J. Coburn
    
	
 
    	
 
    	
Name:
    	
Quinn J. Coburn
    
	
 
    	
 
    	
Title:
    	
Vice President and   Treasurer
    

 

[Signature Page to Collateral Agreement]

 

 

	
 
    	
GRAFTECH INTERNATIONAL HOLDINGS INC.
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Quinn J. Coburn
    
	
 
    	
 
    	
Name:
    	
Quinn J. Coburn
    
	
 
    	
 
    	
Title:
    	
Vice President and   Treasurer
    

 

[Signature Page to Collateral Agreement]

 

 

	
 
    	
GRAFTECH DE LLC    
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Quinn   J. Coburn
    
	
 
    	
 
    	
Name:
    	
Quinn   J. Coburn
    
	
 
    	
 
    	
Title:
    	
Vice   President and Treasurer
    

 

[Signature Page to Collateral Agreement]

 

 

	
 
    	
GRAFTECH TECHNOLOGY LLC
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Quinn J. Coburn
    
	
 
    	
 
    	
Name:
    	
Quinn J. Coburn
    
	
 
    	
 
    	
Title:
    	
Vice President and   Treasurer
    

 

[Signature Page to Collateral Agreement]

 

 

	
 
    	
GRAPHITE ELECTRODE NETWORK LLC
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Quinn J. Coburn
    
	
 
    	
 
    	
Name:
    	
Quinn J. Coburn
    
	
 
    	
 
    	
Title:
    	
Vice President and   Treasurer
    

 

[Signature Page to Collateral Agreement]

 

 

	
 
    	
GRAFTECH ADVANCED GRAPHITE MATERIALS LLC
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Quinn J. Coburn
    
	
 
    	
 
    	
Name:
    	
Quinn J. Coburn
    
	
 
    	
 
    	
Title:
    	
Vice President and   Treasurer
    

 

[Signature Page to Collateral Agreement]

 

 

	
 
    	
GRAFTECH SEADRIFT HOLDING CORP.
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Quinn J. Coburn
    
	
 
    	
 
    	
Name:
    	
Quinn J. Coburn
    
	
 
    	
 
    	
Title:
    	
Vice President and Treasurer
    

 

[Signature Page to Collateral Agreement]

 

 

	
 
    	
GRAFTECH NY INC.
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Quinn J. Coburn
    
	
 
    	
 
    	
Name:
    	
Quinn J. Coburn
    
	
 
    	
 
    	
Title:
    	
Vice President and   Treasurer
    

 

[Signature Page to Collateral Agreement]

 

 

	
 
    	
JPMORGAN CHASE BANK, N.A., as Collateral Agent
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ James Shender
    
	
 
    	
 
    	
Name:
    	
James Shender
    
	
 
    	
 
    	
Title:
    	
Vice President
    

 

[Signature Page to Collateral Agreement]

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