Document:

Exhibit 10.12

 

DATED 12 February 2018

 

 

between

 

GrafTech International Holdings Inc.
 as Pledgor

 

and

 

JPMorgan Chase Bank, N.A.
 as Collateral Agent for the benefit of the Secured Parties

 

 

in the presence of

 

GrafTech Luxembourg I S. à r.l.
 as Company

 

 

 

SHARE PLEDGE AGREEMENT

 

 

 

Contents

 

	
Clause
    	
 
    	
 
    	
 
    	
Page
    
	
1.
    	
 
    	
INTERPRETATION
    	
 
    	
4
    
	
2.
    	
 
    	
CREATION OF THE PLEDGE
    	
 
    	
6
    
	
3.
    	
 
    	
PERFECTION OF THE PLEDGE
    	
 
    	
6
    
	
4.
    	
 
    	
PRESERVATION OF THE PLEDGE
    	
 
    	
7
    
	
5.
    	
 
    	
REPRESENTATIONS, WARRANTIES, UNDERTAKINGS AND   COVENANTS
    	
 
    	
8
    
	
6.
    	
 
    	
RIGHT TO VOTE AND DIVIDENDS
    	
 
    	
11
    
	
7.
    	
 
    	
LIABILITY TO PERFORM AND FURTHER ASSURANCES
    	
 
    	
12
    
	
8.
    	
 
    	
ENFORCEMENT OF THE PLEDGE
    	
 
    	
12
    
	
9.
    	
 
    	
APPLICATION OF PROCEEDS AND RELEASE OF THE PLEDGE
    	
 
    	
13
    
	
10.
    	
 
    	
LIABILITY AND INDEMNITY
    	
 
    	
14
    
	
11.
    	
 
    	
DELEGATION BY THE COLLATERAL AGENT
    	
 
    	
15
    
	
12.
    	
 
    	
POWER OF ATTORNEY
    	
 
    	
15
    
	
13.
    	
 
    	
WAIVERS AND REMEDIES CUMULATIVE
    	
 
    	
15
    
	
14.
    	
 
    	
COSTS
    	
 
    	
15
    
	
15.
    	
 
    	
NOTICES
    	
 
    	
16
    
	
16.
    	
 
    	
ASSIGNMENT
    	
 
    	
16
    
	
17.
    	
 
    	
SEVERABILITY
    	
 
    	
16
    
	
18.
    	
 
    	
GOVERNING LAW AND JURISDICTION
    	
 
    	
16
    
	
19.
    	
 
    	
COUNTERPARTS AND EFFECTIVENESS
    	
 
    	
16
    

 

 

THIS SHARE PLEDGE AGREEMENT (the “Pledge Agreement”) is made on 12 February 2018

 

BETWEEN

 

(1)                                 GrafTech International Holdings Inc., a company organised and existing under the provisions of the General Corporation Law of the State of Delaware, United States of America, with registration number #2176444 and whose headquarters are 982 Keynote Circle, BROOKLYN HEIGHTS, Ohio 44131, United States of America (the “Pledgor”);

 

(2)                                 JPMorgan Chase Bank, N.A., a national banking association organized under the laws of the United States of America with an office located at 383 Madison Avenue, New York, NY 10179, acting as Collateral Agent for the benefit of the Secured Parties (both terms as defined in the Credit Agreement referred to below) (the “Collateral Agent”);

 

in the presence of:

 

(3)                                 GrafTech Luxembourg I 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 167175 (the “Company”).

 

WHEREAS

 

(A)                               A Credit Agreement has been executed as of February 12, 2018, among GrafTech International Ltd., a Delaware corporation (“GrafTech”) GrafTech Finance Inc., a Delaware corporation, 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, GrafTech Switzerland SA, a Swiss corporation, the Lenders and Issuing Banks from time to time party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent and Collateral Agent (the “Credit Agreement”).

 

(B)                               Pursuant to the Credit Agreement, the Lenders have severally agreed to make Loans (as defined in the Credit Agreement) and the Issuing Banks have agreed to issue Letters of Credit, in each case, upon the terms and subject to the conditions set forth therein. The obligations of the Lenders to make Loans and of the Issuing Banks to issue Letters of Credit under the Credit Agreement are conditioned upon, among other things, the execution and delivery of this Pledge Agreement.

 

(C)                               The Pledgor is an indirect subsidiary of GrafTech.

 

(D)                               The Pledgor is the sole owner of 58,061,755 units (parts sociales) in the Company representing 100 per cent of the units issued by the Company.

 

(E)                                In order to induce the Lenders to make the Loans and the Issuing Banks to issue the Letters of Credit, in accordance with the Credit Agreement, the Pledgor has agreed to grant a pledge as set forth herein.

 

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IT IS THEREFORE AGREED AS FOLLOWS:

 

1.                                      INTERPRETATION

 

1.1                               Recitals

 

The recitals (A) to (E) above are an integral part of this Pledge Agreement.

 

1.2                               Definitions

 

Unless otherwise defined herein or in the Credit Agreement, capitalised terms used in this Pledge Agreement shall have the meaning as set forth hereafter:

 

Business Day means a day (other than a Saturday, a Sunday or other day) on which the banks are open for general business in Luxembourg and New York City.

 

CFC has the meaning ascribed to it in the Credit Agreement.

 

CFC Collateral has the meaning set forth in clause 2.

 

CFC Secured Obligations means all present and future Secured Obligations (as such term is defined in the Credit Agreement) whether actual or contingent and whether owed jointly or severally or in any other capacity whatsoever, of Foreign Subsidiaries that are CFCs.

 

Collateral Agent has the meaning set forth in the introductory statements hereto.

 

Collateral Law means the Luxembourg law on financial collateral agreements of 5 August 2005, as amended from time to time.

 

Company has the meaning set forth in the introductory statement hereto.

 

Domestic Subsidiaries has the meaning ascribed to it in the Credit Agreement.

 

Event of Default has the meaning ascribed to it in the Credit Agreement.

 

Foreign Subsidiaries has the meaning ascribed to it in the Credit Agreement.

 

Future Shares mean all units (parts sociales) of the Company acquired or offered in substitution or in addition to the units (parts sociales) of the Company held by the Pledgor as at the date hereof, including those which may be subscribed by the Pledgor in the case of an increase of the share capital of the Company, following exchange, merger, consolidation, division, issue of stock dividend, subscription for cash or otherwise and, generally, all such stock and shares in the capital of the Company now or at any time hereafter owned by the Pledgor.

 

Global Collateral has the meaning set forth in clause 2.

 

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GrafTech has the meaning set forth in the recitals hereto.

 

Loan Documents has the meaning ascribed to it in the Credit Agreement.

 

Luxembourg means the Grand Duchy of Luxembourg.

 

Pledge means the first ranking security interest on the Pledged Assets created and constituted by, and in accordance with, this Pledge Agreement.

 

Pledged Assets means the Shares and the Related Assets it being understood, however, that, notwithstanding anything contained in this Pledge Agreement to the contrary, Pledged Assets shall not include any Excluded Assets (as defined in the Credit Agreement); provided, however, that the Pledge shall immediately attach to, and the Pledged Assets shall immediately include, any such asset (or portion thereof) upon such asset (or such portion) ceasing to be an Excluded Asset.

 

Pledgor has the meaning set forth in the introductory statements hereto.

 

Related Assets means all rights and interests of the Pledgor in respect of any dividend (whether in cash, securities or otherwise), bonus shares, interest or any other type of distribution, return or right in respect of any of the Shares (whether by way of redemption, bonus, preference, option, substitution, conversion, disposition or otherwise).

 

Rights of Recourse means all and any rights, actions and claims the Pledgor may have against any Secured Party or any other company, Person or entity having granted security or given a guarantee for the Secured Obligations or arising under or pursuant to the enforcement of the present Pledge including, in particular, any rights of recourse the Pledgor may have under the terms of article 2028 ss. of the Luxembourg Civil Code (including, for the avoidance of doubt, any right of recourse prior to enforcement), or any right of recourse by way of subrogation and any other similar right, action or claim under any applicable law.

 

Secured Obligations means all US Secured Obligations and CFC Secured Obligations.

 

Secured Parties has the meaning ascribed to it in the Credit Agreement.

 

Shares means as at the date of this Pledge Agreement, 58,061,755 units (parts sociales) with a par value of USD 1.00 each numbered 1 to 58,061,755, together with any Future Shares, representing at all times 100% of the entire issued, fully paid-up and subscribed share capital of the Company.

 

Share Register means the register of shares held by the Company to record the units of the Company.

 

Termination Date has the meaning ascribed to it in the Credit Agreement.

 

US Secured Obligations means all present and future Secured Obligations (as such term is defined in the Credit Agreement) and whether actual or contingent and whether owed jointly or severally or in any other capacity whatsoever, of GrafTech and the Domestic Subsidiaries.

 

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1.3                               Miscellaneous

 

(a)                                 Clause headings are inserted for convenience of reference only and shall be ignored in construing this Pledge Agreement.

 

(b)                                 A reference to a Person in this Pledge Agreement includes its successors, transferees and assignees save that with respect to the Pledgor the terms of clause 17(b) (Assignment) of this Pledge Agreement shall apply.

 

(c)                                  Words importing the singular shall include the plural and vice-versa.

 

2.                                      CREATION OF THE PLEDGE

 

The Pledgor agrees to pledge and hereby pledges (affecte en nantissement) its claims, rights, title and interest in the Pledged Assets to, and in favour of, the Collateral Agent, who accepts the Pledge in its own name and in its capacity as Collateral Agent for the benefit of the Secured Parties, (i) in the case of 35% of the Shares owned from time to time by the Pledgor, including 35% of any Future Shares to be issued and, in particular, 20,321,614 units numbered 1 to 20,321,614 owned on the date of the present Pledge Agreement and Related Assets pertaining thereto (such Pledged Assets, the “CFC Collateral”), as continuing first ranking (premier rang) security for the due and full payment, discharge and performance of the CFC Secured Obligations, and (ii) in the case of 65% of the Shares owned from time to time by the Pledgor, including 65% of any Future Shares to be issued and, in particular, 37,740,141 units numbered 20,321,615 to 58,061,755 owned on the date of the present Pledge Agreement and the Related Assets pertaining thereto (such Pledged Assets, the “Global Collateral”), as continuing first ranking (premier rang) security for the due and full payment, discharge and performance of the CFC Secured Obligations and the US Secured Obligations.

 

3.                                      PERFECTION OF THE PLEDGE

 

(a)                                 The Pledgor shall procure the registration (inscription) of the Pledge over the Shares in the Share Register of the Company in the name of the Collateral Agent and the delivery of a copy of the Share Register, certified by an authorised signatory of the Company, evidencing such registration on the date of execution of this Pledge Agreement.

 

(b)                                 The Company hereby accepts the Pledge.

 

(c)                                  The following wording shall be used for the registration of the Pledge over the Shares in the Share Register of the Company:

 

“Pursuant to a share pledge agreement dated 12 February 2018 (the “Pledge Agreement”), (i) 35% of the units owned from time to time by GrafTech International Holdings Inc., a Delaware corporation, in the Company and, in particular, 20,321,614 units numbered 1 to 20,321,614 owned on the date of the present registration, including 35% of any Future Shares to be issued, and any Related Assets (as these terms are defined in the Pledge Agreement) have been pledged in favour of JPMorgan Chase Bank,

 

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N.A., as Collateral Agent for the benefit of the Secured Parties (as these terms are defined in the Pledge Agreement), to secure the CFC Secured Obligations (as defined in the Pledge Agreement), and (ii) 65% of the units owned from time to time by GrafTech International Holdings Inc. in the Company and, in particular, 37,740,141 units numbered 20,321,615 to 58,061,755 owned on the date of the present registration, including 65% of any Future Shares to be issued, and any Related Assets have been pledged in favour of JPMorgan Chase Bank, N.A., as Collateral Agent for the benefit of the Secured Parties, to secure the US Secured Obligations and the CFC Secured Obligations (as these terms are defined in the Pledge Agreement)”.

 

The Pledgor undertakes to reiterate mutatis mutandis the formality referred to in this sub-clause (c) each time that the security constituted by this Pledge Agreement is extended to further shares or securities (including the Future Shares) of the Company.

 

4.                                      PRESERVATION OF THE PLEDGE

 

The Pledge shall be a continuing security and shall not be considered as satisfied or discharged or prejudiced or waived or released by any intermediate payment, satisfaction or settlement of any part of the applicable Secured Obligations and shall remain in full force and effect until its release in accordance with clause 10 below.

 

The Pledge shall be cumulative, in addition to and independent of, every other security which the Collateral Agent or any Secured Party may at any time hold as security for the applicable Secured Obligations or any rights, powers and remedies provided by law and shall not operate so as in any way to prejudice or affect or be prejudiced or affected by any security interest or other right or remedy which the Collateral Agent or any Secured Party may now or at any time in the future have in respect of the applicable Secured Obligations.

 

The Pledge shall not be prejudiced by any time or indulgence granted to any Person, or any abstention or delay by the Collateral Agent in perfecting or enforcing the Pledge or any security interest or rights or remedies that the Collateral Agent may now or at any time in the future have from or against the Pledgor or any other Person.

 

No failure on the part of the Collateral Agent to exercise, or delay on its part in exercising, any of its rights under this Pledge Agreement shall operate as a waiver or release thereof, nor shall any single or partial exercise of any such right preclude any further or other exercise of that or any other rights.

 

Neither the obligations of the Pledgor contained in this Pledge Agreement nor the rights, powers and remedies conferred upon the Collateral Agent by this Pledge Agreement or by law nor the Pledge created hereby shall be discharged, impaired or otherwise affected by:

 

(i)                                     any amendment to, or any variation, waiver or release of, any obligation of the Pledgor, the Company or any other Person under the Loan Documents;

 

(ii)                                  any failure to take, or to fully take, any security contemplated by the Loan Documents or otherwise agreed to be taken in respect of the Pledgor, the Company or any other Person under the Loan Documents;

 

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(iii)                               any failure to realise or to fully realise the value of, or any release, discharge, exchange or substitution of, any security taken in respect of the Pledgor’s, the Company’s or any other Person’s obligation under the Credit Agreement;

 

(iv)                              any other act, event or omission which might operate to discharge, impair or otherwise affect any of the obligations of the Company and the Pledgor contained in this Pledge Agreement, the rights, powers and remedies conferred upon the Collateral Agent by this Pledge Agreement, the Pledge or by law; or

 

(v)                                 the Collateral Agent’s failure to proceed against or claim payment from, or to divide any action between and against, any other Persons or enforce any guarantee or security before enforcing this Pledge.

 

Until the Termination Date, the Pledgor shall not by virtue of any payment made, security realised or security interest enforced or moneys received hereunder:

 

(i)                                     be subrogated to any rights, security, security interests or moneys held, received or receivable by the Collateral Agent or be entitled to any right of contribution or indemnity, or

 

(ii)                                  claim, rank, prove or vote as a creditor of the Company or other Person liable or its estate in competition with the Collateral Agent.

 

The Pledgor waives its right to the benefit of both “division” and “discussion” (if any) as set forth in the Luxembourg civil code.

 

5.                                      REPRESENTATIONS, WARRANTIES, UNDERTAKINGS AND COVENANTS

 

5.1                               Representations, warranties and undertakings

 

The Pledgor represents and warrants to and with each Secured Party that all representations and warranties in the Loan Documents that relate to the Pledgor 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 which 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 the Pledgor to be so true and correct or so true and correct in all material respects, as applicable, on and as of such prior date). In addition, the Pledgor represents and warrants to the Collateral Agent as set out hereafter. All representations and warranties are to be repeated as provided in the Loan Documents:

 

(a)                                 the Company has its head office (administration centrale) and its centre of main interests (centre des intérêts principaux) at the place of its registered office (siège statutaire) in Luxembourg, in each case as such terms are defined in the Regulation (EU) 2015/848 of the European Parliament and of the Council of 20 May 2015 on insolvency proceedings (recast) or Luxembourg law, as applicable;

 

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(b)                                 the Shares are duly issued and fully paid up and represent at all times 100% of the issued fully paid-up and subscribed share capital of the Company;

 

(c)                                  the Shares are and will remain in registered form;

 

(d)                                 this Pledge Agreement constitutes its legal, valid and binding obligations and operates a valid pledge of the Pledged Assets, once perfected, in accordance with its terms, and the Pledge created pursuant to this Pledge Agreement, once perfected, constitutes a legal, valid, binding and enforceable first priority and first ranking security interest over the Pledged Assets in favour of the Collateral Agent to the extent of 35% of the Shares, as further described in clause 2 above, and the Related Assets pertaining thereto in respect of all CFC Secured Obligations and, to the extent of 65% of the Shares, as further described in clause 2 above, and the Related Assets pertaining thereto, in respect of the CFC Secured Obligations and the US Secured Obligations, and in each case prior and superior to the rights of other Persons, except for any mandatory privileges preferred by applicable law;

 

(e)                                  The Pledgor is and will remain the sole legal owner of the Shares, and it has neither transferred, nor assigned, disposed of, sold, pledged or in any way encumbered the Shares (or any of them), other than pursuant to this Pledge Agreement and as contemplated by the Credit Agreement;

 

(f)                                   the Pledgor will subscribe to all the increases in the share capital of the Company (if any);

 

(g)                                  the Pledgor undertakes to give notice to the Collateral Agent, at the latest three Business Days prior to the implementation of any relevant corporate action, of the agenda of any general meeting, or of any proposed resolution to be passed by the shareholder(s) of the Company, in each case which it believes could have a material adverse effect on the Collateral Agent’s rights;

 

(h)                                 the Pledgor will not sell, dispose of, pledge or otherwise encumber hereafter the whole or any part of the Pledged Assets, unless otherwise permitted by the Credit Agreement;

 

(i)                                     the Pledgor will, and will cause the Company to, assist the Collateral Agent and generally make its best efforts, in order to obtain all necessary consents, approvals and authorisations from any relevant authorities in order to permit the exercise by the Collateral Agent of its rights and powers under this Pledge Agreement upon enforcement of the Pledge;

 

(j)                                    the Company is a “société à responsabilité limitée” duly incorporated and organised under the laws of Luxembourg;

 

(k)                                 no order has been made and no resolution has been passed for the winding-up bankruptcy, admission to the regime of suspension of payment and/or of controlled management or for a composition with creditors of, or by, the Company and no petition has been presented and no meeting has been convened for any such purpose;

 

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(l)                                     the Pledgor shall act in good faith to maintain the rights of the Collateral Agent hereunder, and in particular shall not take any steps nor do anything which would adversely affect the existence of the Pledge created hereunder or cause an adverse effect in any way;

 

(m)                             no receiver has been appointed in respect of the Pledgor or the Company or all or any of their respective assets and none of their respective assets is the subject of an arrest and no event analogous to any of the foregoing has occurred outside Luxembourg;

 

(n)                                 no unsatisfied judgment is outstanding against the Pledgor or the Company;

 

(o)                                 no guarantee, loan capital, borrowed money or interest is overdue for payment by the Pledgor or the Company, and no other obligation or Indebtedness is outstanding which is overdue for performance or payment, except to the extent this would not be reasonably likely to have a Material Adverse Effect; and

 

(p)                                 no event analogous to any of the foregoing has occurred outside Luxembourg.

 

5.2                               Covenants

 

Further to the negative covenants set out in the Loan Documents and which are deemed repeated for the purposes of this Pledge Agreement and as provided in the Loan Documents, the Pledgor hereby covenants that, for as long as this Pledge Agreement will be in force as set forth in clause 10:

 

(a)                                 the Pledgor shall do or cause to be done all such acts and things as may be necessary to make any realisation of the Pledged Assets by the Collateral Agent pursuant to this Pledge Agreement valid and binding and in compliance with any and all applicable laws, regulations, orders, writs, injunctions, decrees or awards of any and all courts, arbitrators or governmental instrumentalities having jurisdiction over any such realisation, all at the Pledgor’s expense and it will use its best endeavours to assist in the defence of the Collateral Agent’s right, title and security in and to the Pledged Assets against the claims and demands of all Persons whomsoever and take any measures, accomplish any formalities and, generally, do all that is necessary at its own cost to permit the exercise, at any time, by the Collateral Agent, of any rights, actions and privileges of the Collateral Agent pursuant to applicable law and this Pledge Agreement;

 

(b)                                 the Pledgor will exercise the rights in respect of the Pledged Assets so as not to violate or otherwise materially adversely affect the rights of the Collateral Agent under this Pledge Agreement or cause a materially adverse effect in any way; and

 

(c)                                  the Pledgor hereby formally undertakes not to exercise any Rights of Recourse or any other rights against any party to the Loan Documents in any manner (including for the avoidance of doubts, by way of provisional measures such as provisional attachment (“saisie arrêt conservatoire”) or by way of set off) or to take any action or do anything in relation to such rights of recourse or other

 

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similar rights, or as long as any amounts remain outstanding under the applicable Secured Obligations.

 

5.3                               Repetition of representations, warranties, undertakings and covenants

 

The representations, warranties, undertakings and covenants set out in this clause 5 are made on the date of this Pledge Agreement.

 

6.                                      RIGHT TO VOTE AND DIVIDENDS

 

6.1                               Right to vote

 

Subject to clause 8 (Enforcement of the Pledge) below, the Pledgor shall remain the legal owner of the Pledged Assets and, accordingly, the right to take part in the general meetings of the shareholders of the Company and to vote therein shall remain vested in the Pledgor: provided that the Pledgor shall not, without the previous consent in writing of the Collateral Agent, exercise its voting powers in respect of the Shares in any manner which it believes in good faith would materially adversely affect the security constituted by this Pledge Agreement (including, without limitation; in favour of any change in the terms of the Shares) or would be inconsistent with the terms of any of the Loan Documents or otherwise prejudice the interests of any of the Secured Parties under any Loan Document.

 

The Pledgor shall in addition perform any and all the obligations imposed upon it in its capacity as shareholder of the Company so as to preserve all rights conferred by the Shares.

 

On and at any time after the occurrence of an Event of Default which is continuing and has not been waived or remedied, (a) the Pledgor shall not, without the prior written consent of the Collateral Agent, exercise any voting rights in relation to the Pledged Assets, (b) the Pledgor undertakes to inform the Collateral Agent of any meeting of the shareholders of the Company, as well as of the agenda thereof, and to request such consent in writing, (c) the Pledgor shall promptly deliver to the Collateral Agent each other circular, notice, report, set of accounts or other document received by it in connection with any Pledged Assets or in connection with or from the Company, (d) the Collateral Agent shall be entitled to request the Pledgor to appoint the Collateral Agent as the Pledgor’s irrevocable proxy, which the Pledgor hereby expressly accepts and acknowledges, to represent the Pledgor at one or more shareholders’ meetings and to exercise the voting rights in any manner the Collateral Agent deems fit for the purpose of protecting and/or enforcing its rights under the Pledge Agreement, and (e) the Pledgor shall do whatever is necessary in order to ensure that the exercise of the voting rights in these circumstances is facilitated and becomes possible for the Collateral Agent, including the issuing of a written proxy in any form required under applicable law.

 

6.2                               Right to dividend

 

(a)                                 Subject to clause 8 (Enforcement of the Pledge) below, the Pledgor shall be entitled to receive the dividends and other distributions paid or payable by the Company on all or

 

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any of the Pledged Assets, unless the payment of such dividends or other distributions is or becomes prohibited by any Loan Document.

 

(b)                                 On and at any time after the occurrence of an Event of Default which is continuing and has not been waived or remedied, the Collateral Agent shall be entitled to receive dividends and other distributions paid or payable by the Company (whether in cash or not) on all or any of the Pledged Assets and to apply any payments so received in and towards payment and discharge of the Secured Obligations secured thereby. To this effect, the Pledgor and the Collateral Agent agree that the Company is hereby directed (and the Company, by countersigning this Pledge Agreement, accepts), if and when an Event of Default occurs and which is continuing and has not been waived or remedied to make direct payment of all such dividends and other distributions to the Collateral Agent.

 

7.                                      LIABILITY TO PERFORM AND FURTHER ASSURANCES

 

(a)                                 Notwithstanding anything to the contrary contained in this Pledge Agreement, the Pledgor shall remain liable to observe and perform all of the conditions and obligations assumed by it in respect of the Pledged Assets and the Collateral Agent shall be under no obligation or liability by reason of or arising out of this Pledge Agreement. The Collateral Agent shall not be required in any manner to perform or fulfil any obligations of the Pledgor in respect of the Pledged Assets, or to make any payment, or to make any enquiry as to the nature or sufficiency of any payment received by it, or to present or file any claim or take any other action to collect or enforce the payment of any amount to which it may have been or to which it may be entitled hereunder at any time.

 

(b)                                 The Pledgor shall at its own expense promptly and duly execute and do all such assurances, acts and things as the Collateral Agent may reasonably require as being necessary for perfecting or protecting all or any of the rights, powers, authorities and discretions which are for the time being exercisable by the Collateral Agent under this Pledge Agreement in relation to the Pledged Assets for facilitating the enforcement of any such rights or any part thereof and in the exercise of all powers, authorities and discretions vested in the Collateral Agent. To that effect, the Pledgor shall in particular execute all documents or instruments and give all notices, orders and directions and make all registrations which the Collateral Agent may reasonably think expedient.

 

8.                                      ENFORCEMENT OF THE PLEDGE

 

(a)                                 On and at any time after the occurrence of an Event of Default which is continuing and has not been waived or remedied, the Collateral Agent shall be entitled to enforce the Pledge to the extent the Secured Obligations that are secured thereby, and in particular the Collateral Agent shall be entitled to:

 

(i)                                     sell or cause the sale of all or any part of the Pledged Assets over a stock exchange or by public auction as currently provided for by article 11 (1) b) of the Collateral Law;

 

(ii)                                  request the Luxembourg courts that title to the Pledged Assets be assigned to the Collateral Agent for payment of all or any part of the outstanding amount of the Secured Obligations secured thereby in accordance with an estimate

 

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made by an expert, as currently provided for by article 11 (1) c) of the Collateral Law;

 

(iii)                               appropriate or cause a third party to appropriate, the Pledged Assets at a price equal to the fair market value of the Pledged Assets as determined, before or after appropriation, by an independent external auditor (réviseur d’entreprises) appointed upon the request of the Collateral Agent by the president of the Institut Luxembourgeois des Réviseurs d’Entreprises, as provided for by article 11 (1) a) of the Collateral Law;

 

(iv)                              sell or cause the Pledged Assets to be sold in a private sale in a commercially reasonable manner, as currently provided for by article 11 (1) b) of the Collateral Law;

 

(v)                                 act generally in relation to the Pledged Assets in such manner as the Collateral Agent acting reasonably shall determine, to the widest extent permitted by applicable law; and

 

(vi)                              in respect of any Pledged Assets consisting of claims for sums of money, (A) if the sum is owed by the Collateral Agent, to set off the amount due by the Collateral Agent with the amount due by the Pledgor, and (B) if the sum is owed by a third party, to require that third party to make payment of the amount due by such third party directly to it, upon maturity of the third party’s debt.

 

(b)                                 In the event of an Event of Default as described above, the Collateral Agent shall have the right to request enforcement of all or part of the Pledged Assets in its discretion. No action, choice or absence of action in this respect, or partial enforcement, shall in any manner affect the Pledge as it then shall be (and in particular those Pledged Assets which have not been subject to enforcement). The Pledge shall continue to remain in full and valid existence until enforcement, discharge or termination hereof, as the case may be.

 

9.                                      APPLICATION OF PROCEEDS AND RELEASE OF THE PLEDGE

 

Any monies received by the Collateral Agent in respect of the Pledged Assets following the enforcement of the Pledge in accordance with clause 8 (Enforcement of the Pledge) above and/or under the rights and powers hereby conferred, shall be applied by the Collateral Agent as set forth below:

 

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 Pledge 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 the Pledgor and any other costs or expenses incurred in connection with the exercise of any right or remedy hereunder or under any other Loan Document, provided however that monies received by the Collateral Agent in respect of the

 

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CFC Collateral shall not be applied to the payment of any costs and expenses incurred by the Collateral Agent in connection with the U.S. Secured Obligations;

 

SECOND, (a) with respect to any monies received by the Collateral Agent in respect of the CFC Collateral, ratably to the payment in full solely of the CFC Secured Obligations and (b) with respect to any monies received by the Collateral Agent in respect of the Global Collateral, ratably 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 applicable 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 Pledgor, its successors or assigns, or as a court of competent jurisdiction may otherwise direct.

 

Notwithstanding anything herein to the contrary, (i) the Pledge granted to the Collateral Agent for the benefit of the Secured Parties pursuant to this Pledge Agreement, and (ii)  the exercise of any right or remedy by the Collateral Agent hereunder or the application of proceeds of any Pledged Asset, 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.

 

10.                               TERMINATION

 

(a)                                 This Agreement, and the Pledge granted hereby, shall (i) automatically terminate upon the Termination Date; or (ii) automatically terminate and be released at the time or times and in the manner set forth in Section 9.14 of the Credit Agreement.

 

(b)                                 Upon termination or release as set forth above pursuant to paragraph (a), the Collateral Agent shall execute and deliver to the Pledgor, or as the case may be, to any Loan Party, at the Pledgor’s or Loan Party’s expense, all documents that the Pledgor or the Loan Party shall reasonably request to evidence such termination and release. Any execution and delivery of documents by the Collateral Agent pursuant to this Section shall be without recourse to, or warranty by, the Collateral Agent.

 

11.                               LIABILITY AND INDEMNITY

 

(a)                                 The Collateral Agent shall not be liable for any losses arising in connection with the exercise of any of its rights, powers and discretions hereunder save for liabilities and expenses arising from the gross negligence (négligence grave) or wilful default (faute intentionnelle) or serious misconduct (faute grave) of the Collateral Agent.

 

(b)                                 The Pledgor will indemnify the Collateral Agent and every attorney which may be appointed, from time to time to the extent set forth in the provisions of Section 9.03 of the Credit Agreement, which are incorporated herein by reference, mutatis mutandis; provided that each reference therein to a “Co-Borrower” shall be deemed to be a reference to the “Pledgor” and each reference therein to the “Administrative Agent” shall be deemed to be a reference to the “Collateral Agent”.

 

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12.                               DELEGATION BY THE COLLATERAL AGENT

 

(a)                                 The Collateral Agent or any Person appointed by the Collateral Agent may at any time and from time to time delegate by power of attorney or in any other manner to any properly qualified Person or Persons all or any of the powers, authorities and discretions which are for the time being exercisable by the Collateral Agent under this Pledge Agreement in relation to the Pledged Assets.

 

(b)                                 Any such delegation may be made upon such terms (including a power of substitution) and subject to such regulations as the Collateral Agent or such Person appointed by the Collateral Agent may think fit. The Collateral Agent shall as soon as practicable inform the Pledgor of the identity of the Person appointed pursuant to this clause 12.

 

(c)                                  The Collateral Agent or such Person appointed by the Collateral Agent shall not be in any way liable or responsible to the Pledgor for any loss or damage arising from any act, default, omission or serious misconduct on the part of any such delegate or sub-delegate except in the case of gross negligence or wilful default or serious misconduct.

 

13.                               POWER OF ATTORNEY

 

(a)                                 The Pledgor hereby, in order to fully secure the performance of its obligations hereunder, irrevocably appoints the Collateral Agent and every Person appointed by the Collateral Agent hereunder to be its attorney (mandataire) acting severally, and on its behalf and in its name or otherwise, to execute and do all such acts and things which the Pledgor is required to do and fails to do under the covenants and provisions contained in this Pledge Agreement (including, without limitation, to make any demand upon or to give any notice or receipt to the Company or any other Person).

 

(b)                                 The Pledgor hereby agrees to ratify and confirm, if need be, whatever any such attorney (as referred to in clause 13(a) above) shall properly do or purport to do in the exercise or purported exercise of all or any of the powers, authorities and discretions referred to in such clause.

 

14.                               WAIVERS AND REMEDIES CUMULATIVE

 

No waiver of any of the terms hereof shall be effective unless in writing signed by the Collateral Agent. No delay in or non-exercise of any right by the Collateral Agent shall constitute a waiver. Any waiver may be on such terms as the Collateral Agent sees fit. The rights, powers and discretions of the Collateral Agent herein are additional to and not exclusive of those provided by law, by any agreement with or other security in favour of the Collateral Agent.

 

15.                               COSTS

 

All the Collateral Agent’s reasonable costs and expenses shall be reimbursed to the Collateral Agent in accordance with the provisions of Section 9.03 (Expenses; Indemnity; Damage Waiver) of the Credit Agreement; provided that each reference therein to a “Co-Borrower” shall be deemed to be a reference to the “Pledgor” and each reference therein to the “Administrative Agent” shall be deemed to be a reference to the “Collateral Agent”.

 

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16.                               NOTICES

 

All notices or other communications under this Pledge Agreement shall be provided as set forth in the Credit Agreement. All communications and notices hereunder to the Pledgor shall be given to it in care of GrafTech as provided in Section 9.01 of the Credit Agreement.

 

17.                               ASSIGNMENT

 

(a)                                 In the case of an assignment, transfer or novation by the Collateral Agent or any Secured Party to one or several transferees of all or any part of its rights and obligations under the Loan Documents, the Collateral Agent and the Pledgor hereby agree, that in such event, to the extent required under applicable law, the Collateral Agent shall preserve all of its rights under this Pledge Agreement as expressly permitted under article 1278 of the Luxembourg civil code, so that the security constituted by this Pledge Agreement (including the right to become owner of the Pledged Assets) shall automatically, and without any formality, benefit to any such transferees.

 

(b)                                 The Pledgor may not assign any of its rights under this Pledge Agreement. The Collateral Agent may assign all or any part of its rights under this Pledge Agreement. Such assignment by the Collateral Agent shall be enforceable towards the Pledgor pursuant to the provisions of article 1690 of the Luxembourg civil code.

 

18.                               SEVERABILITY

 

If, at any time, any provision of this Pledge Agreement is or becomes illegal, invalid or unenforceable in any respect under the law of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions of this Pledge Agreement nor of such provisions under the law of any other jurisdiction shall in any way be affected or impaired thereby.

 

19.                               GOVERNING LAW AND JURISDICTION

 

(a)                                 This Pledge Agreement is governed by, and shall be construed in accordance with, Luxembourg law.

 

(b)                                 Any dispute arising in connection with this Pledge Agreement, including with respect to non-contractual claims, shall be submitted to the courts of the district of Luxembourg-City.

 

(c)                                  Nothing in this clause 19 limits the right of the Collateral Agent to bring proceedings against the Pledgor in any other court of competent jurisdiction or concurrently in more than one jurisdiction.

 

20.                               COUNTERPARTS AND EFFECTIVENESS

 

This Pledge Agreement may be executed in any number of counterparts. This has the same effect as if the signatures on the counterparts were on a single copy of the Pledge Agreement. This Pledge Agreement shall become effective when executed counterparts

 

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have been delivered to the Collateral Agent, and thereafter shall be binding upon the Pledgor and the Collateral Agent, and shall inure to the benefit of the Pledgor, the Collateral Agent and the other Secured Parties, except that the Pledgor shall not have the right to assign or otherwise transfer any of its rights or obligations hereunder or any interest herein or in the Pledged Assets (and any such assignment or transfer shall be null and void) except as expressly provided in this Pledge Agreement and the Credit Agreement.

 

[remainder of page intentionally left blank]

 

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IN WITNESS THEREOF the parties hereto have executed this Pledge Agreement in one or multiple original counterparts, all of which together evidence the same Pledge Agreement, on the day and year first written above.

 

SIGNATORIES

 

	
THE PLEDGOR
    	
 
    
	
 
    	
 
    
	
GrafTech International Holdings Inc.
    	
 
    
	
 
    	
 
    
	
By: 
    	
/s/ Quinn J. Coburn
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Quinn J. Coburn
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
Vice President and   Treasurer
    	
 
    

 

[Signature Page to Share Pledge Agreement by GTI in Lux I (Lux Law)]

 

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THE COLLATERAL AGENT
    	
 
    
	
 
    	
 
    
	
JPMorgan   Chase Bank, N.A.
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/ James Shender
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
James Shender
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
Vice President
    	
 
    

 

[Signature Page to Share Pledge Agreement]

 

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The Company acknowledges and accepts (i) the security interest constituted by this Pledge Agreement, (ii) the terms of clause 3 (Perfection of the Pledge) of this Pledge Agreement and (iii) the directions contained  in clause 6.2(b) (Right to dividend) of this Pledge Agreement.

 

Moreover, the Company confirms (i) that it will provide the required assistance in respect of the perfection of Pledge, (ii) that it shall perform as direct, and (iii) that nothing in its articles of incorporation or otherwise prevent it from complying with the above obligations and directions.

 

	
THE   COMPANY:
    	
 
    
	
 
    	
 
    
	
GraTech Luxembourg I S. à.r.l.
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/ Perrier Sabine
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Perrier Sabine
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
Manager
    	
 
    

 

[Signature Page to Share Pledge Agreement]

 

20Exhibit 10.13

 

SWISS SECURITY AGREEMENT dated as of February 12, 2018, made by GRAFTECH SWITZERLAND SA, a Swiss corporation (“Swissco” / the “Assignor”) and JPMORGAN CHASE BANK, N.A. (“JPM” / the “Assignee”) as the Assignee and Collateral Agent for the Secured Parties (such term and each other capitalized term used but not defined herein having the meaning given to it in the Credit Agreement dated as of February 12, 2018, among GrafTech International Ltd., a Delaware corporation, GrafTech Finance Inc., a Delaware corporation, 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, Swissco, the Lenders and Issuing Banks from time to time party thereto and JPM, as Administrative Agent and Collateral Agent (as the same may be amended, amended and restated, supplemented or otherwise modified from time to time, the “Credit Agreement”)).

 

WITNESSETH:

 

WHEREAS, pursuant to the Credit Agreement, 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 the Assignor is engaged in related businesses, and each 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 Assignor shall have executed and delivered this Swiss Security Agreement (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 their respective Loans and the Issuing Banks to issue Letters of Credit, the Assignor hereby agrees with the Assignee, for the ratable benefit of the Secured Parties, as follows:

 

1. DEFINITIONS AND INTERPRETATION

 

1.1. Definitions

 

Unless otherwise defined therein, capitalized terms used in this Agreement shall have the meanings ascribed to them in Section 1.01 of the Credit Agreement.  The definitions of the Credit Agreement shall apply to this Agreement mutatis mutandis and are hereby incorporated herein by reference as if set forth in full in this Agreement.

 

In this Agreement, the following terms shall have the following meanings:

 

Agreement: shall mean this Swiss Security Agreement;

 

Ancillary Rights: has the meaning ascribed to such term in Section 2.1 below;

 

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Assigned Bank Accounts: means all current or future rights, title, interest and action (including any balances and accrued interest) the Assignor may have or acquire in relation to any bank account which the Assignor now has (such existing bank accounts being listed in Schedule 2 to this Agreement) or may at any time have in the future vis-à-vis any bank or other financial institution;

 

Assigned Receivables: means collectively the existing and future rights of the Assignor to all payments, titles and interests and value added tax, if any, in respect thereof due from the debtors of the Assignor and which derive from the Assignor’s business operations and/or ownership in its assets (including all Ancillary Rights and privileges and benefits thereto (Art. 170 CO)) which it undertakes within its statutory scope, including but not limited to (i) Assigned Bank Accounts, (ii) insurance claims of the Assignor under insurance policies covering the business operations of the Assignor, and (iii) existing and future receivables owed by any of the Affiliates of the Assignor to the Assignor and arising in the course of business of the Assignor, whether contingent or not, incorporated in a title or not;

 

Assignment: means the assignment for security purposes by the Assignor of the Assigned Receivables to the Assignee, acting for itself and for the benefit of the Secured Parties, pursuant to Art. 164 et seq. CO;

 

Assignor: means Graftech Switzerland SA, a company limited by shares organized and incorporated under the laws of Switzerland, having is registered office at 1 Route de Renens, 1030 Bussigny-près-Lausanne, Switzerland;

 

Assignee: means JPMorgan Chase Bank, N.A., a United States national banking association, acting through its office at 383 Madison Avenue, New York 10179, USA;

 

Business Day(s): means a day (other than a Saturday or Sunday) on which banks are open for general business in New York City;

 

CC: means the Swiss Federal Civil Code dated December 10, 1907, as amended from time to time;

 

CO: means the Swiss Federal Code of Obligations, dated March 30, 1911, as amended from time to time;

 

Collateral: means, as the context requires, the Assigned Receivables and/or any other assets over which a Security Interest is created pursuant to this Agreement;

 

Credit Agreement: has the meaning set forth in the recitals of this Agreement;

 

LP: means the Swiss Federal Statute on Debt Collection and Bankruptcy, dated April 1, 1889, as amended from time to time;

 

Notice of Assignment: means a notice of assignment substantially in the form of Schedule 1 to this Agreement.

 

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Security Interest: means the security interest over the Collateral created and perfected under the terms of this Agreement; and

 

Swissco US Pledge Agreement: has the meaning ascribed to such term in Section 3.5 below.

 

1.2. Interpretation

 

References to the Credit Agreement, this Agreement or any other agreement or document shall, where applicable, be deemed to be references to such Credit Agreement, this Agreement, or such other agreement or document as the same may from time to time be, extended, prolonged, amended, restated, supplemented, renewed, or novated, as Persons may accede thereto as a party or withdraw therefrom as a party in part or in whole or be released thereunder in part or in whole and as facilities and financial services are or may from time to time be granted, extended, prolonged, increased, reduced, cancelled, withdrawn, amended, restated, supplemented, renewed or novated thereunder.

 

Clause headings are for ease of reference only and are not to affect the interpretation of this Agreement. Any Person is to be construed to include that Person’s permitted assignees or transferees or successors in title, whether direct or indirect. In the event of any inconsistency between the terms of the Credit Agreement and this Agreement, the terms of this Agreement shall prevail.

 

2. ASSIGNMENT OF RECEIVABLES

 

2.1. Undertaking to Assign and Assignment of Receivables

 

The Assignor agrees (i) to assign to the Assignee (as Collateral Agent, for the benefit and on behalf of the Secured Parties) the Assigned Receivables as security through and until the Termination Date, and (ii) to perfect the Assignment on the date of the Credit Agreement until such time.

 

For the purpose of effecting the Assignment of the Assigned Receivables, the Assignor hereby assigns by way of security to the Assignee (as Collateral Agent, for the benefit and on behalf of the Secured Parties) the Assigned Receivables existing on the date hereof (such existing receivables being listed in Schedules 3 hereof).  The Assignee expressly accepts the Assignment.

 

The Assignor hereby expressly acknowledges that the meaning of the term “Swissco Obligations” (and consequently the extent of its undertaking under this Agreement) is defined by reference to the Credit Agreement and the Assignor expressly confirms that it fully understands and accepts the definition of the term “Swissco Obligations”.

 

The rights of the Assignee, upon the occurrence and during the continuance of an Event of Default, pertaining to the Assigned Receivables hereunder include:

 

(i) the right to receive at any time on or after the date of this Agreement all proceeds relative to any Assigned Receivables;

 

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(ii) the right to receive the proceeds of any insurance, indemnity, warranty, guarantee, or collateral security relating to such Assigned Receivables, including the right against any bank providing a letter of credit or similar credit instrument;

 

(iii) all claims of the Assignor for damages arising out of or for breach of or default under any contract from which the Assigned Receivables derive; and

 

(iv) the right to demand, sue for, recover and give receipts for all moneys payable under any contract from which the Assigned Receivables derive (the rights described in clauses (i) to (iv) above shall mean, collectively, the “Ancillary Rights”).

 

Notwithstanding anything contained in this Agreement or any Loan Document to the contrary, “Collateral” shall not include any Excluded Assets; provided, however, that the Security Interest shall immediately attach to, and the Collateral shall immediately include, any such asset (or portion thereof) upon such asset (or such portion) ceasing to be an Excluded Asset.

 

2.2. Routing of Collections

 

The Assignor shall instruct and shall continue to instruct any debtors of the Assigned Receivables to pay, wire, transfer or credit any payment to the Assigned Bank Accounts.

 

Subject to and in accordance with the terms and conditions of the Credit Agreement and this Agreement, the Assignor shall be authorized to collect all or part of the Assigned Receivables for as long as no Event of Default has occurred and is continuing, and until such time as notified by the Collateral Agent, provided the proceeds of the Assigned Receivables are credited on the Assigned Bank Accounts as per the preceding paragraph.

 

Subject to and in accordance with the terms and conditions of the Credit Agreement, the Assignor shall be authorized to dispose of the Assigned Receivables for as long as no Event of Default has occurred and is continuing.

 

2.3. Notification of Debtors of the Assigned Receivables I Payment Instruction

 

2.3.1 Notification

 

Upon the occurrence and during the continuance of an Event of Default, and after the Collateral Agent shall have notified Holdings (except that no such notice shall be required in the case of an Event of Default under clause (h) or (i) of Section 7.01 of the Credit Agreement), the Assignee, acting for itself and on behalf of the Secured Parties shall be authorized to request the Assignor to notify any current and future debtors of the Assigned Receivables of their assignment by way of a Notice of Assignment. The Assignee shall further have the right to notify the Assignment to the relevant debtors at any time if the Assignor does not comply with the Assignee’s request to proceed to such notification as per this Section within two Business Days from the Assignee’s request.

 

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2.3.2. Payment Instructions and other Measures by the Assignee

 

In the event the Assignee is entitled to notification (or to request the Assignor to proceed to such notification) under Section 2.3.1 above, the Assignee shall in addition be authorized, but not obliged, to instruct the debtors of the Assigned Receivables to effect payment on a bank account as specified by the Assignee, and to take other measures the Assignee deems to be adequate for the preservation of the Assigned Receivables in favor of the Secured Parties.

 

2.3.3. Obligations of the Assignor

 

Upon the occurrence and during the continuance of an Event of Default, and after the Collateral Agent shall have notified Holdings (except that no such notice shall be required in the case of an Event of Default under clause (h) or (i) of Section 7.01 of the Credit Agreement), the Assignor shall cooperate with the Assignee and use its best efforts in assisting the Assignee in relation to the payment of the Assigned Receivables, and shall pay any amounts paid directly to the Assignor in relation to the Assigned Receivables to the Assignee acting on behalf of the Secured Parties by transferring said amounts into a bank account as specified by the Assignee, until such time as the Security Interests created under this Agreement shall be released in accordance with Section 6.1.1 of this Agreement.

 

2.4. Reporting upon Occurrence and during Continuance of an Event of Default

 

Upon the occurrence and during the continuance of an Event of Default, the Assignor shall deliver to the Assignee within 3 Business Days thereof, an updated list of Assigned Receivables identifying each Assigned Receivable outstanding as of the Business Day before the occurrence of such Event of Default (specifying at least name and address of the debtor, the amount due and the due date) substantially in the form and including the information as set forth in Schedule 3 to this Agreement.

 

2.5. Waiver of Banking Secrecy with Respect to Assigned Bank Accounts

 

The Assignor shall release the respective bank(s) from the banking secrecy to the extent required for the Assignee to assign the Assigned Bank Accounts and perform its rights and obligations in relation thereto. To that effect, the Assignor shall, within ten Business Days from the date hereof, send a Notice of Assignment to the banks (substantially in the form of Schedule 1) with which the Assigned Bank Accounts are opened.

 

Subject to and in accordance with the terms and conditions of the Loan Documents the Assignor shall be authorized (subject to revocation by the Assignee as of the occurrence of an Event of Default) to use any balance on the Assigned Bank Accounts for as long as no Event of Default has occurred and is continuing. Upon the occurrence and during the continuance of an Event of Default, the Assignee shall be authorized to revoke such authorization; provided that such authorization shall automatically be revoked upon the  occurrence and during the continuance of any Event of Default under clause (h) or (i) of Section 7.01 of the Credit Agreement.

 

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3. PURPOSE, EFFECTS AND LIMITATIONS OF THE SECURITY INTEREST

 

3.1. Purpose of Security Interest

 

The Security Interest created and perfected under this Agreement provides the Assignee, as Collateral Agent, for the benefit and on behalf of the Secured Parties, with a security interest securing the Swissco Obligations.

 

3.2. First Priority Lien

 

The Collateral shall be delivered so that this Agreement, together with such delivery, creates in favour of the Assignee, as Collateral Agent, for the benefit and on behalf of the Secured Parties, a first priority lien on, and first priority security interest in such Collateral.

 

3.3. Continuing Security Interest

 

This Agreement shall create a continuing Security Interest over the Collateral irrespective of any intermediate payment or satisfaction of any or all Swissco Obligations

 

3.4. Additional and Independent Security Interest

 

The Security Interest created and perfected over the Collateral hereunder shall be in addition to and independent of any existing or future guarantees and other security interests which may at any time be held by the Assignee from the Assignor or any other Person in respect of the whole or any part of the Swissco Obligations and may be enforced independently of any such other guarantees or other security interests.

 

The release of individual items of Collateral from the Security Interest does not affect the Security Interest on other items of Collateral.

 

3.5. Conflicts

 

The parties hereto acknowledge that (a) the Assignor and the Assignee, among other parties, have entered into that certain Swissco New York Law Pledge Agreement, dated the date hereof (the “Swissco US Pledge Agreement”), pursuant to which the Assignor has pledged to the Assignee certain equity and debt securities owned by it as security for the Swissco Obligations, and (b) certain of such debt securities may constitute Collateral under this Agreement. In the event of any inconsistency between the terms and conditions of this Agreement and the terms and conditions of the Swissco US Pledge Agreement, the terms and conditions of this Agreement shall prevail, except to the extent the context or applicable law may require.

 

Notwithstanding anything herein to the contrary, (i) the Liens and security interests granted to the Assignee for the ratable benefit of the Secured Parties pursuant to this Agreement and (ii) the exercise of any right or remedy by the Assignee hereunder or the application of  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.

 

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3.6                              Limitations

 

If and to the extent the Assignor secures and/or guarantees any Upstream and Cross-Stream Obligations (as such terms are defined in the Credit Agreement), and not obligations that are the Assignor’s primary obligations or the primary obligations of Foreign Subsidiaries that are direct or indirect subsidiaries of the Assignor, the following limitations shall apply:

 

(a)     Maximum amount which may be secured or guaranteed by the Assignor:

 

The aggregate:

 

(i)                                     liability of the Assignor; and

(ii)                                  use of proceeds from the enforcement of the Collateral of the Assignor,

 

under this Agreement and any and all other Loan Documents shall not exceed the amount of the Assignor’s freely disposable equity in accordance with Swiss law, presently being the total shareholder equity less the total of (a) the aggregate share capital and (b) statutory reserves (including reserves for own shares and revaluations as well as agio) to the extent such reserves cannot be transferred into unrestricted, distributable reserves, and (c) the blocked amount (as determined by the Assignor’s statutory auditor) corresponding to the Assignor’s intra-group claims resulting from upstream or cross-stream loans not granted at arm’s length conditions. The amount of freely disposable equity shall be determined on the basis of an audited annual or interim balance sheet of the Assignor.

 

This limitation shall only apply to the extent it is a requirement under applicable law at the time (a) the Assignor is required to perform or (b) Collateral of the Assignor is enforced under the Loan Documents.  Such limitation shall not free the Assignor from its obligations in excess of the freely disposable equity, but merely postpone the performance date thereof until such times when the Assignor has again freely disposable equity if and to the extent such freely disposable equity is available.  The limitation shall not apply to the extent the Assignor guarantees any amounts borrowed under any Loan Document that are lent to the Assignor or to wholly owned direct or indirect subsidiaries of the Assignor, and shall accordingly not apply to the Collateral of the Assignor being enforced as security/guarantee for the obligations of the Assignor or the obligations of direct or indirect subsidiaries of the Assignor.

 

The Assignor shall and Luxembourg Holdco or any successor shareholder of the Assignor which is a party to a Loan Document shall procure that the Assignor will, take and cause to be taken all and any action (including, without limitation, (a) the passing of any shareholders’ resolutions to approve any payment or other performance under this Agreement or any other Loan Document, and (b) the obtaining of any confirmations which may be required as a matter of Swiss mandatory law in force at the time the Assignor is required to make a payment or perform other obligations under this Agreement or any other Loan Document) in order to allow a prompt payment of amounts owing by the Assignor under the Loan  Documents, a prompt use of proceeds from the Collateral of the Assignor as well as the performance by the Assignor of other obligations under the Loan Documents with a minimum of limitations.

 

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If the enforcement of the obligations of the Assignor under the Loan Documents would be limited due to the effects referred to in this clause, the Assignor shall further, to the extent permitted by applicable law and Swiss accounting standards and upon request by the Administrative Agent, write up or sell any of its assets that are shown in its balance sheet with a book value that is significantly lower than the market value of the assets, in case of sale, however, only if such assets are not necessary for the Assignor’s business and such sale is permitted under this Agreement or any other Loan Document.

 

(b)                                Swiss Withholding Tax

 

(i)                                    If so required under applicable law (including double tax treaties) at the time it is required to make a payment under this Agreement or any other Loan Document, the Assignor:

 

(A)                               shall use its best efforts to ensure that such payments can be made without deduction of Swiss withholding tax (Verrechnungssteuer), or with deduction of Swiss withholding tax at a reduced rate, by discharging the liability to such tax by notification pursuant to applicable law (including tax treaties) rather than payment of the tax;

 

(B)                               shall deduct the Swiss withholding tax at such rate (being 35% at the date hereof) as is in force from time to time if the notification procedure pursuant to sub-paragraph (A) above does not apply; or shall deduct the Swiss withholding tax at the reduced rate resulting after discharge of part of such tax by notification if the notification procedure pursuant to sub-paragraph (A) applies for a part of the Swiss withholding tax only; and shall pay within the time allowed any such taxes deducted to the Swiss Federal Tax Administration; and

 

(C)                               shall promptly notify the Administrative Agent that such notification or, as the case may be, deduction has been made, and provide the Administrative Agent with evidence that such a notification of the Swiss Federal Tax Administration has been made or, as the case may be, such taxes deducted have been paid to the Swiss Federal Tax Administration.

 

(ii)                                 If the Assignor is required under applicable law (including double tax treaties) to deduct Swiss withholding tax at the time the Collateral Agent is enforcing the Collateral of Assignor, the Administrative Agent shall deduct from the proceeds from such enforcement the Swiss withholding tax at such rate (being 35% at the date hereof) as is in force from time to time and shall pay without delay, any such taxes deducted to the Swiss Federal Tax Administration.

 

(iii)                              In the case of a deduction of Swiss withholding tax, the Assignor shall use its best efforts to ensure that any Person that is entitled to a full or partial refund of the Swiss withholding tax deducted from such payment under this Agreement or any other Loan Document or the proceeds of the enforcement of the Collateral of the Assignor, will, as soon as possible after such deduction:

 

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4. REPRESENTATIONS AND WARRANTIES

 

4.1. Representations and Warranties of the Assignor

 

The Assignor hereby warrants and represents for as long as any Swissco Obligations remain outstanding as follows:

 

(i) Due incorporation: the Assignor is duly incorporated and validly existing under the laws of Switzerland with full power and authority to conduct its business.

 

(ii) Power: the Assignor has the power to enter into this Agreement and to perform its obligations hereunder.

 

(iii) Corporate Actions: all necessary corporate actions required in connection with the entry into, performance under, the validity and enforceability of this Agreement and, in particular but not limited to, the creation and perfection of the Security Interest, and the transactions contemplated hereby and thereby have been taken, obtained or effected and are in full force and effect.

 

(iv) Consents: no approvals, consents, licenses, exemptions, filings, registrations, notarizations and other matters, official or otherwise, are required in connection with the entry into, performance under, the validity and enforceability of this Agreement and, in particular but not limited to, the creation and perfection of the Security Interest, and the transactions contemplated hereby and thereby.

 

(v) Title in Collateral/Validity of Security Interest: the Assignor has good and marketable title of full ownership to all Collateral and such Collateral are free and clear of any pledge, Lien, charge, security interest or other encumbrance, except for (a) Liens expressly permitted pursuant to Section 6.02 of the Credit Agreement and (ii) minor defects in title that do not interfere with the Assignor’s ability to conduct its business as currently conducted or as proposed to be conducted or to utilize such properties constituting the Collateral, in each case to the extent the failure to have such good and marketable title of full ownership could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

 

(vi) Validity and Enforceability of Agreement: this Agreement constitutes legal, valid and binding obligations of the Assignor, enforceable in accordance with its terms, subject to applicable insolvency law affecting creditors’ rights in general.

 

(vii) Valid Security Interest: this Agreement constitutes a valid and effective Assignment of the Assigned Receivables.

 

(viii) First Priority: the Agreement creates a first priority lien on, and first priority Security Interest in, such Collateral.

 

(ix) Non-conflict: the execution and delivery of this Agreement including the creation and perfection of the Security Interest, and the performance by the Assignor of any of its obligations hereunder (a) do not and will not conflict with (x) any law or regulation or any 

 

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official or judicial order, (y) the articles of association and organizational by-laws of the Assignor, or (z) any agreement or document to which the Assignor is a party or which is binding upon it, nor result in the creation or imposition of any encumbrance on any of its assets pursuant to the provisions of any such agreement or document, or (b) will not result in the creation or imposition of or obliges the Assignor to create any Lien on the undertaking, assets, rights or revenues of the Assignor, except as expressly provided for herein.

 

5. COVENANTS OF ASSIGNOR

 

5.1. Continuing Support

 

The Assignor hereby covenants until the Termination Date as follows:

 

The Assignor shall, at its own expense, promptly execute and deliver to the Assignee all documents (in particular all documents and/or titles incorporating the Assigned Receivables, if any such documents and/or titles exist), declarations, certificates, registrations, filings and other instruments and shall take all actions necessary or that the Assignee may reasonably request, in order to create, perfect, maintain and protect the Security Interests created hereby (including instigating legal proceedings to ensure the existence, enforceability and value of the Assigned Receivables) and the Assignor shall assist the Assignee in exercising and enforcing the rights and remedies of the Assignee, as Collateral Agent, for the benefit and on behalf of the Secured Parties under this Agreement with respect to the Collateral.  In particular, the Assignor undertakes to allow the Assignee to review the books and other documents the Assignee deems necessary for the purpose of verifying the existence and value of the Collateral, provided that any such review shall be conducted during normal business hours and in a manner which is not disruptive to the business of the Assignor, 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 the Assignor 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.

 

5.2. Transmission of Information

 

The Assignor shall furnish to the Assignee promptly upon receipt thereof copies of all notices, requests and other documents received by it in relation to the Collateral according to which (i) the validity or enforceability of the Security Interest created over the Collateral, (ii) the value of the Collateral, or (iii) the possibilities of the Collateral’s liquidation and/or realization as contemplated by this Agreement are (A) materially negatively affected or (B) threatened to be materially negatively affected and likely to occur.

 

5.3. Negative Pledge

 

Other than to the extent created by this Agreement, the Assignor shall not create, incur, assume or suffer to exist any Lien upon or with respect to the Collateral, other than Liens permitted pursuant to Section 6.02 of the Credit Agreement.

 

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5.4. Prohibition on the Disposal of Collateral

 

Except as otherwise permitted by the Credit Agreement and this Agreement, the Assignor shall not:

 

(i) dispose of the Collateral;

 

(ii) sell, factor or assign book or other debts forming part of the Collateral; or

 

(iii) sign any kind of agreement that provides for the non-assignability or the assignability subject to the prior written consent of a third party of the Assigned Receivables.

 

5.5. Performance of Contractual Obligations

 

The Assignor shall timely and fully perform and comply with all material provisions, covenants and other obligations required to be observed by it under the contracts from which the Assigned Receivables derive.

 

5.6. No Set-off, etc.

 

The Assignor shall take all commercially reasonable steps and comply with all applicable laws to procure that no set-off, counterclaim, credit, discount, allowance, right to make any deduction or any justification for the non-payment of the amounts payable on account of the Assigned Receivables will at any time be allowed to arise in relation to an Assigned Receivable (whether by the respective debtor or otherwise), other than in the ordinary course of business in accordance with past practice and the Assignor shall not amend, grant any extension of time for payment, waiver or other indulgence in relation to an Assigned Receivable, except to the extent permitted by the Credit Agreement.

 

6. TERMINATION AND RELEASE OF SECURITY INTEREST

 

6.1. Termination

 

6.1.1. Condition

 

The Security Interest created hereunder shall be terminated and released automatically on the Termination Date.  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.

 

6.2. Release and Re-transfer of Collateral

 

Subject to the satisfaction of the conditions specified in Section 6.1.1 above, the Assignee hereby undertakes to forthwith release the Security Interest created hereunder and, to re-assign and/or retransfer the Collateral, where such re-assignment and/or re-transfer is required, and at the reasonable request of the Assignor, execute such documents as may be required to release the Collateral or may be reasonably requested by the Assignor.

 

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6.3. Costs, Taxes and Duties regarding the Release of Collateral

 

The Assignor shall reimburse the Assignee for any costs, taxes and duties resulting from the re-assignment and/or re-transfer of the Collateral.  The Collateral Agent shall be entitled to set-off and deduct, respectively, such costs, taxes and duties from the Collateral to be released.

 

7. ENFORCEMENT AND REALISATION

 

7.1. Enforcement Proceedings

 

Upon the occurrence and during the continuance of an Event of Default, the Assignee shall be entitled to, immediately and, unless required by law, with prior notification of the Assignor (except that no such notice shall be required in the case of an Event of Default under clause (h) or (i) of Section 7.01 of the Credit Agreement), but without granting another grace period and in addition to other rights and remedies provided for herein or otherwise available to it to be exercised from time to time, notify the Assignment to the relevant debtors of the Assigned Receivables, and collect and enforce the Assigned Receivables.

 

The Collateral Agent, acting reasonably, shall have the right to obtain from the Assignor all information and documents deemed necessary in the reasonable opinion of the Collateral Agent, to ascertain the existence and particulars of the Assigned Receivables.

 

To the extent that the collection of the Assigned Receivables is not possible or is deemed unduly burdensome in the sole opinion of the Collateral Agent, the latter shall be entitled to sell the whole or any part of the Assigned Receivables at public auction or private sale, without demand of performance or notice of intention to effect any such disposition or of the time and place thereof (except where such notice is required by applicable law and cannot be waived), and without regard to the enforcement procedure provided for by the LP, and apply the proceeds thereof (less all costs and expenses) to the discharge of the Swissco Obligations.  Any sale shall be conducted in a commercially reasonable manner and to the extent permitted by applicable law.

 

The Assignee shall be entitled to allocate in its entire discretion the proceeds collected pursuant to this Section in discharging the Swissco Obligations which have become immediately due and payable, regardless of the creditor or nature (principal or interest) of such Swissco Obligations.

 

7.2. Additional Right of the Assignee

 

Upon the occurrence and during the continuance of an Event of Default, the Assignee, as Collateral Agent, for the benefit and on behalf of the Secured Parties, shall furthermore be entitled to do the following with respect to the Collateral:

 

(i) Power of Attorney: the Assignee may in its capacity as Collateral Agent, and for the benefit and on behalf of the Secured Parties, represent the Secured Parties in connection with the Loan Documents before all courts and authorities and in connection with the establishment of public deeds and real estate transactions, to take legal actions and

 

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remedies, enforce judgements and settlement arrangements, instigate and proceed with debt enforcement and bankruptcy proceedings as well as to accept and release assets in dispute.

 

(ii) Power of Attorney of the Assignor: the Assignee is entitled, in the name and for the account of the Assignor, to take all action in connection with the administration, conservation of value and realization of the Security Interests.

 

(iii) Notification: the Assignee may notify any other obligor under the Loan Documents, debtors of the Assigned Receivables, and other interested Persons in Switzerland and abroad of the realization of Security Interest or instruct the Assignor to make such notification.

 

7.3. Diligence, Limited Liability and Indemnification of the Collateral Agent

 

7.3.1. Diligence

 

The Assignee shall perform its responsibilities under this Agreement, in its capacity as Collateral Agent, for the benefit and on behalf of the Secured Parties or, if so stipulated in this Agreement, of the Assignor, with the necessary diligence.

 

7.3.2. Limitation of Liability

 

Any liability of the Assignee or any of its employees or agents for anything done or omitted in the performance of the Assignee’s responsibilities under this Agreement shall be excluded except in the event of gross negligence or willful default by the Assignee or any of its employees or agents.

 

7.3.3. Indemnification

 

The provisions of Section 9.03(b) 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 the “Assignor” and each reference therein to the “Administrative Agent” shall be deemed to be a reference to the “Assignee.”

 

8. ASSIGNMENT AND TRANSFERS

 

The rights and obligations of the Assignor under this Agreement may not be assigned or transferred without the prior written consent of the Assignee. Nothing in this Agreement  shall be construed as limiting the right of the Loan Parties to assign their rights and obligations under the Credit Agreement.

 

9. MISCELLANEOUS

 

9.1. Notices

 

All notices and other communications provided for in this Agreement shall be in writing and shall be delivered in the manner provided for notices in Section 9.01 of the Credit Agreement.

 

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9.2. Binding Effect

 

This Agreement supersedes any prior arrangement between the parties hereto with respect to the subject matter hereof, in particular a certain “Swiss Security Agreement” dated April 28, 2010, as confirmed and amended from time to time, and all rights and obligations hereunder, shall inure to the benefit of and be binding upon the parties hereto and their permitted successors and assigns.

 

For the avoidance of any doubt, all outstanding receivables assigned to the Collateral Agent pursuant to the above-mentioned “Swiss Security Agreement” dated April 28, 2010, shall be deemed to be an integral part of the Assigned Receivables under this Agreement.

 

9.3. Entire Agreement/Modifications

 

This Agreement constitutes the entire agreement between the parties hereto and may be modified only by a written agreement signed by the parties hereto.

 

9.4. Severability

 

If any term or provision hereof, or the application thereof to any Person or circumstance, shall to any extent be contrary to any applicable law or otherwise invalid or unenforceable, the remainder of this Agreement or the application of such term or provision to Persons or circumstances other than those as to which it is contrary, invalid, or unenforceable shall not be affected thereby and, to the extent consistent with the overall intent hereof as evidenced by this Agreement taken as a whole, shall be enforced to the fullest extent permitted by applicable law.

 

9.5. Counterparts

 

This Agreement shall be executed in two counterparts by the different parties hereto on separate counterparts, each of which when executed and delivered shall constitute an original but all the counterparts together shall constitute one and the same instrument.

 

10. LAW AND JURISDICTION

 

10.1. Governing Law

 

This Agreement shall be governed by, and shall be construed in accordance with, the laws of Switzerland.

 

10.2. Jurisdiction

 

Any legal action or proceeding with respect to this Agreement, shall be submitted exclusively to (i) the jurisdiction of the Supreme Court of the State of New York and 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 or (ii) the ordinary courts of the canton of Geneva. By execution and delivery of this Agreement, the Assignor hereby accepts for itself and in respect of its property, the exclusive jurisdiction of

 

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either of the aforesaid courts.  The parties hereto hereby irrevocably waive any objection, including any objection to the laying of venue or based on the grounds of forum non conveniens, that any of them may now or hereafter have to the bringing of any such action or proceeding in such respective jurisdictions.

 

[signature pages follow]

 

15

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

 

	
GRAFTECH SWITZERLAND SA
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/ Quinn J. Coburn
    	
 
    
	
 
    	
 
    	
 
    
	
Name: 
    	
Quinn J. Coburn
    	
 
    
	
 
    	
 
    	
 
    
	
Title: 
    	
Attorney-in-fact
    	
 
    
	
 
    	
 
    	
 
    
	
Place: 
    	
Brooklyn Heights, OH
    	
 
    

 

[Signature Page to Security Agreement—GrafTech Switzerland SA]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

 

	
GRAFTECH SWITZERLAND SA
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/ Quinn J. Coburn
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Quinn J. Coburn
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
Attorney-in-fact
    	
 
    
	
 
    	
 
    	
 
    
	
Place:
    	
Brooklyn Heights, OH
    	
 
    

 

[Signature Page to Security Agreement—GrafTech Switzerland SA]

 

17

 

	
GRAFTECH SWITZERLAND SA
    	
JPMORGAN CHASE BANK,   N.A.
    
	
 
    	
 
    
	
By:
    	
By: 
    	
/s/ James Shender
    
	
 
    	
 
    	
 
    
	
Name:
    	
Name: 
    	
James Shender
    
	
 
    	
 
    	
 
    
	
Title:
    	
Title: 
    	
Vice President
    
	
 
    	
 
    	
 
    
	
Place:
    	
Location: 
    	
New York, NY
    

 

[Signature Page to Swiss Security Agreement]

 

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