FIRST LIEN GUARANTEE AND COLLATERAL AGREEMENT

Exhibit 10.12b

EXECUTION COPY

 

FIRST LIEN GUARANTEE AND COLLATERAL AGREEMENT

made by

EDGEN MERGER CO.,

EDGEN MURRAY II, L.P.

and certain of its Subsidiaries

in favor of

LEHMAN COMMERCIAL PAPER INC.,

as Administrative Agent and UK Security Agent

Dated as of May 11, 2007

 

TABLE OF CONTENTS

 

 

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FIRST LIEN GUARANTEE AND COLLATERAL AGREEMENT

FIRST LIEN GUARANTEE AND COLLATERAL AGREEMENT, dated as of May 11, 2007, made by each of the signatories hereto, in favor of: (A) LEHMAN COMMERCIAL PAPER INC. (“ LCPI ”), as Administrative Agent (in such capacity, the “ Administrative Agent ”) for (i) the banks and other financial institutions or entities (the “ Lenders ”) from time to time parties to the First Lien Credit Agreement, dated as of May 11, 2007 (as amended, restated, supplemented or otherwise modified from time to time, the “ First Lien Credit Agreement ”), among EDGEN MURRAY II, L.P., a Delaware limited partnership (“ Holdings ”), EDGEN MERGER CO., a Nevada corporation (which will merge with and into Edgen Murray Corporation, a Nevada corporation, on the Closing Date) (the “ US Borrower ”), EDGEN MURRAY CAYMAN CORPORATION, a Cayman exempted company (the “ Cayman Borrower ”), the several banks and other financial institutions or entities from time to time parties thereto (the “ Lenders ”), LEHMAN BROTHERS INC. and JEFFERIES FINANCE LLC, as joint lead arrangers and joint bookrunners (in such capacity, the “ Arrangers ”), LCPI, as syndication agent (in such capacity, the “ Syndication Agent ”), the Administrative Agent and as UK security agent (in such capacity, the “ UK Security Agent ”), and (ii) the other Secured Parties (as hereinafter defined), and (B) LCPI, as UK Security Agent for the UK Secured Parties.

W I T N E S S E T H :

WHEREAS, pursuant to the First Lien Credit Agreement, the Lenders have severally agreed to make extensions of credit to the US Borrower and the Cayman Borrower upon the terms and subject to the conditions set forth therein;

WHEREAS, the US Borrower and the Cayman Borrower are members of an affiliated group of companies that includes each other Grantor and each Guarantor;

WHEREAS, the proceeds of the extensions of credit under the First Lien Credit Agreement will be used in part to enable the US Borrower and the Cayman Borrower to make valuable transfers to one or more of the other Grantors and/or Guarantors in connection with the operation of their respective businesses;

WHEREAS, the US Borrower, the other Grantors and the Cayman Borrower are engaged in related businesses, and each Grantor and each Guarantor will derive substantial direct and indirect benefit from the making of the extensions of credit under the First Lien Credit Agreement; and

WHEREAS, it is a condition precedent to the obligation of the Lenders to make their respective extensions of credit to the US Borrower and the Cayman Borrower under the First Lien Credit Agreement that the Grantors and the other Guarantors shall have executed and delivered this Agreement to the Administrative Agent for the ratable benefit of the Secured Parties or, as specifically stated herein, to the UK Security Agent for the ratable benefit of the UK Secured Parties;

NOW, THEREFORE, in consideration of the premises and to induce the Arrangers, the Administrative Agent and the Lenders to enter into the First Lien Credit

 

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Agreement and to induce the Lenders to make their respective extensions of credit to the US Borrower and the Cayman Borrower thereunder, each Grantor and each Guarantor hereby agrees with the Administrative Agent, for the ratable benefit of the Secured Parties or, as specifically stated herein, with the UK Security Agent for the ratable benefit of the UK Secured Parties, as follows:

SECTION 1. DEFINED TERMS

1.1. Definitions . Unless otherwise defined herein, terms defined in the First Lien Credit Agreement and used herein shall have the meanings given to them in the First Lien Credit Agreement, and the following terms which are defined in the Uniform Commercial Code in effect in the State of New York on the date hereof are used herein as so defined: Accounts, Account Debtor, Authenticate, Certificated Security, Chattel Paper, Commodity Account, Commodity Contract, Commodity Intermediary, Documents, Electronic Chattel Paper, Entitlement Order, Equipment, Farm Products, Financial Asset, Fixtures, Goods, Instruments, Inventory, Letter of Credit Rights, Money, Payment Intangibles, Securities Account, Securities Intermediary, Security, Security Entitlement, Supporting Obligations, Tangible Chattel Paper and Uncertificated Security.

(b) The following terms shall have the following meanings:

“ Agreement ”: this First Lien Guarantee and Collateral Agreement, as the same may be amended, supplemented, replaced or otherwise modified from time to time.

“ Canadian Investment Property ”: the collective reference to (i) all “investment property” as such term is defined in Section 9-102(a)(49) of the Uniform Commercial Code in effect in the State of New York on the date hereof including, without limitation, all Certificated Securities and Uncertificated Securities, all Security Entitlements, and all Securities Accounts, in each case in Edgen Murray Canada Inc. and any other wholly-owned Foreign Subsidiary incorporated under the laws of Canada or any province or territory therein (ii) security entitlements, in the case of any United States Treasury book-entry securities, as defined in 31 C.F.R. section 357.2, or, in the case of any United States federal agency book-entry securities, as defined in the corresponding United States federal regulations governing such book-entry securities, or as defined in applicable federal, state or provincial laws, in each case in or relating to Edgen Murray Canada Inc. and any other wholly-owned Foreign Subsidiary incorporated under the laws of Canada or any province or territory therein and (iii) whether or not constituting “investment property” as so defined, all Pledged Notes, all Pledged Equity Interests, and all Pledged Security Entitlements, in each case in or relating to Edgen Murray Canada Inc. and any other wholly-owned Foreign Subsidiary incorporated under the laws of Canada or any province or territory therein.

“ Collateral ”: as defined in Section 3 (and specifically excluding Excluded Assets and Excluded Collateral).

“ Collateral Account ”: any collateral account established by the Administrative Agent as provided in Section 6.1 or 6.4.

 

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“ Copyright Licenses ”: any written agreement naming any Grantor as licensor or licensee (including, without limitation, those listed in Schedule 6 ), granting any right under any Copyright, including, without limitation, the grant of rights to manufacture, distribute, exploit and sell materials derived from any Copyright.

“ Copyrights ”: (i) all domestic and foreign copyrights, whether or not the underlying works of authorship have been published, including but not limited to copyrights in software and databases, all Mask Works (as defined in 17 U.S.C. 901 of the U.S. Copyright Act) and all works of authorship and other intellectual property rights therein, all copyrights of works based on, incorporated in, derived from or relating to works covered by such copyrights, all right, title and interest to make and exploit all derivative works based on or adopted from works covered by such copyrights, and all copyright registrations and copyright applications, and any renewals or extensions thereof, including, without limitation, each registration and application identified in Schedule 6 .

“ Deposit Account ”: (i) all “deposit accounts” as defined in Article 9 of the UCC, (ii) all other accounts maintained with any financial institution (other than Securities Accounts or Commodity Accounts) and (iii) shall include, without limitation, all of the accounts listed on Schedule 2 hereto under the heading “Deposit Accounts” (as such schedule may be amended from time to time) together, in each case, with all funds held therein and all certificates or instruments representing any of the foregoing.

“ Excluded Assets ”:

(i) any lease, license, contract, property right or agreement to which any Grantor is a party or any of its rights or interests thereunder if and only for so long as the grant of security interest hereunder (a) is prohibited by applicable law or would constitute or result in the abandonment, invalidation or unenforceability of any right, title or interest of the Grantor of such security interest therein pursuant to applicable law, or (b) would require the consent of the counterparty to such lease, licenses, contract or agreement and such consent shall not have been obtained, or (c) would constitute or result in a breach, termination or default under any such lease, license, contract, property right or agreement (in each case, other than to the extent that any such restriction or prohibition would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the UCC of any relevant jurisdiction or any other applicable law or principles of equity);

(ii) assets or properties subject to a Lien securing a purchase money obligation or Capital Lease Obligation permitted to be incurred under the Credit Agreement if the documentation in which such Lien is granted (or the documentation providing for such purchase money obligation or Capital Lease Obligation) prohibits the creation of any other Lien on such asset or property;

(iii) deposit accounts the balance of which consists exclusively of (a) withheld income taxes and federal, state or local employment taxes required to be paid to the Internal Revenue Service or state or local government agencies or foreign government agencies with respect to employees of the Borrowers or any of their Subsidiaries, (b) amounts required to be paid over to an employee benefit plan on behalf of or for the benefit of employees of the Borrowers or any of their Subsidiaries, (c) all segregated

 

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deposit accounts constituting (and the balance of which consists solely of funds set aside in connection with) tax accounts, payroll accounts, trust accounts and accounts dedicated to the payment of medical and dental claims to employees of the Borrowers or any of their Subsidiaries, and (d) deposit accounts the individual balance of which does not exceed $2,500,000; and

(iv) in excess of 65% of the total outstanding Foreign Subsidiary Voting Stock of any Foreign Subsidiary owned by an entity organized in the U.S. and 100% of any outstanding Foreign Subsidiary Voting Stock of any other Foreign Subsidiary to the extent securing any US Borrower Obligations hereunder;

provided , however , that such security interest shall attach immediately to any portion of such Lease, license, contract, property rights or agreement that does not result in any of the consequences specified above Excluded Assets shall not include any Proceeds, substitutions or replacements of any Excluded Assets referred to in clause (i) or (ii) (unless such Proceeds, substitutions or replacements would constitute Excluded Assets referred to in clause (i) or (ii)).

“ Excluded Collateral ”: in the case of Holdings, any and all equity interests now owned or hereafter acquired in Edgen Murray Cayman Corporation (to the extent that a valid and perfected security interest exists under any Cayman Share Pledge Agreement).

“ Foreign Subsidiary Voting Stock ”: the voting Capital Stock of any Foreign Subsidiary.

“ General Intangibles ”: all “general intangibles” as such term is defined in Section 9-102(a)(42) of the Uniform Commercial Code in effect in the State of New York on the date hereof and, in any event, including, without limitation, with respect to any Grantor, all rights of such Grantor to receive any tax refunds, all Hedge Agreements and all contracts, agreements, instruments and indentures and all licenses, permits, concessions, franchises and Authorizations issued by Governmental Authorities in any form, and portions thereof, to which such Grantor is a party or under which such Grantor has any right, title or interest or to which such Grantor or any property of such Grantor is subject, as the same may from time to time be amended, supplemented, replaced or otherwise modified, including, without limitation, (i) all rights of such Grantor to receive moneys due and to become due to it thereunder or in connection therewith, (ii) all rights of such Grantor to receive proceeds of any insurance, indemnity, warranty or guaranty with respect thereto, (iii) all rights of such Grantor to damages arising thereunder, and (iv) all rights of such Grantor to terminate and to perform, compel performance and to exercise all remedies thereunder.

“ Grantor ”: the collective reference to each Subsidiary Guarantor, Holdings, the US Borrower and each other party that becomes party (other than the Cayman Borrower, Edgen Murray Canada Inc. and any Foreign Subsidiary) to this Agreement pursuant to Section 6.10 of the First Lien Credit Agreement.

“ Guarantor Obligations ”: with respect to any Guarantor, all obligations and liabilities of such Guarantor which may arise under or in connection with this Agreement (including, without limitation, Section 2) or any other Loan Document to which such

 

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Guarantor is a party, in each case whether on account of guarantee obligations, reimbursement obligations, fees, indemnities, costs, expenses or otherwise (including, without limitation, all fees and disbursements of counsel to any Secured Party that are required to be paid by such Guarantor pursuant to the terms of this Agreement or any other Loan Document).

“ Guarantors ”: the collective reference to each Subsidiary Guarantor and Holdings, and in the case of the UK Obligations only, the collective reference to Holdings, the Subsidiary Guarantors, the US Borrower and Edgen Murray Canada Inc.

“ Intellectual Property ”: the collective reference to all rights, priorities and privileges, whether arising under United States, multinational or foreign laws or otherwise, including those relating to Copyrights, Copyright Licenses, Patents, Patent Licenses, Trademarks, Trademark Licenses, Trade Secrets and Trade Secret Licenses, and all rights to sue at law or in equity for any infringement or other impairment thereof, including the right to receive all proceeds and damages therefrom.

“ Intercompany Note ”: any promissory note evidencing loans made by any Grantor to Holdings or any of its Subsidiaries, including, without limitation, the Subordinated Intercompany Note.

“ Insurance ”: shall mean all insurance policies covering any or all of the Collateral or the Canadian Investment Property (regardless of whether the Administrative Agent or the UK Security Agent is the loss payee thereof).

“ Investment Property ”: the collective reference to (i) all “investment property” as such term is defined in Section 9-102(a)(49) of the Uniform Commercial Code in effect in the State of New York on the date hereof including, without limitation, all Certificated Securities and Uncertificated Securities, all Security Entitlements, all Securities Accounts, all Commodity Contracts and all Commodity Accounts (other than any Foreign Subsidiary Voting Stock excluded from the definition of “Pledged Equity Interests”), (ii) security entitlements, in the case of any United States Treasury book-entry securities, as defined in 31 C.F.R. section 357.2, or, in the case of any United States federal agency book-entry securities, as defined in the corresponding United States federal regulations governing such book-entry securities, and (iii) whether or not constituting “investment property” as so defined, all Pledged Notes, all Pledged Equity Interests, all Pledged Security Entitlements and all Pledged Commodity Contracts.

“ Issuers ”: the collective reference to each issuer of a Pledged Security.

“ Material Contract ” shall mean each agreement, contract or license (including any license of Intellectual Property) or other arrangement (a) which constitutes a contract or commitment relating to indebtedness for borrowed money or the deferred purchase price of property (in either case, whether incurred, assumed, guaranteed or secured by any asset) in excess of $5,000,000; and (b) which by its terms calls for aggregate payments by the Grantors or any of their Subsidiaries of more than $2,500,000 over the remaining term of such agreement, contract, license or other arrangement except for any such agreement contract or license or other arrangement that may be canceled, without any material penalty or other liability to the Grantors or any of their Subsidiaries, upon notice of 90 days or less.

 

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

“ Obligations ”: (i) in the case of the US Borrower, the US Borrower Obligations, (ii) in the case of the Cayman Borrower, the UK Obligations and (iii) in the case of each Guarantor, its Guarantor Obligations.

“ Patent License ”: all agreements, whether written or oral, providing for the grant by or to any Grantor of any right to manufacture, use or sell any invention covered in whole or in part by a Patent, including, without limitation, any of the foregoing referred to in Schedule 6 .

“ Patents ”: (i) all domestic and foreign patents, patent applications and patentable inventions, including, without limitation, each issued patent and patent application identified in Schedule 6 , all certificates of invention or similar property rights, all reissues, divisions, continuations, continuations-in-part, substitutes, renewals, and extensions thereof.

“ Pledged Alternative Equity Interests ”: shall mean all interests of any Grantor in participation or other interests in any equity or profits of any business entity and the certificates, if any, representing such interests and all dividends, distributions, cash, warrants, rights, options, instruments, securities and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such interests and any other warrant, right or option to acquire any of the foregoing; provided , however , that Pledged Alternative Equity Interests shall not include any Pledged Stock, Pledged Partnership Interests, Pledged LLC Interests and Pledged Trust Interests.

“ Pledged Commodity Contracts ”: all commodity contracts listed on Schedule 2 (as such Schedule may be amended from time to time) and all other commodity contracts to which any Grantor is party from time to time.

“ Pledged Debt Securities ”: all debt securities now owned or hereafter acquired by any Grantor, including, without limitation, the debt securities listed on Schedule 2 , (as such Schedule may be amended from time to time) together with any other certificates, options, rights or security entitlements of any nature whatsoever in respect of the debt securities of any Person that may be issued or granted to, or held by, any Grantor while this Agreement is in effect.

“ Pledged Equity Interests ”: shall mean all Pledged Stock, Pledged LLC Interests, Pledged Partnership Interests, Pledged Trust Interests and Pledged Alternative Equity Interests.

“ Pledged LLC Interests ”: shall mean all interests of any Grantor now owned or hereafter acquired in any limited liability company including, without limitation, all limited liability company interests listed on Schedule 2 hereto under the heading

 

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“Pledged LLC Interests” (as such schedule may be amended from time to time) and the certificates, if any, representing such limited liability company interests and any interest of such Grantor on the books and records of such limited liability company and all dividends, distributions, cash, warrants, rights, options, instruments, securities and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such limited liability company interests and any other warrant, right or option to acquire any of the foregoing.

“ Pledged Notes ”: all promissory notes now owned or hereafter acquired by any Grantor including, without limitation, those listed on Schedule 2 (as such Schedule may be amended from time to time), all Intercompany Notes at any time issued to any Grantor.

“ Pledged Partnership Interests ”: shall mean all interests of any Grantor now owned or hereafter acquired in any general partnership, limited partnership, limited liability partnership or other partnership including, without limitation, all partnership interests listed on Schedule 2 hereto under the heading “Pledged Partnership Interests” (as such schedule may be amended from time to time) and the certificates, if any, representing such partnership interests and any interest of such Grantor on the books and records of such partnership and all dividends, distributions, cash, warrants, rights, options, instruments, securities and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such partnership interests and any other warrant, right or option to acquire any of the foregoing.

“ Pledged Stock ”: shall mean all shares of capital stock now owned or hereafter acquired by such Grantor, including, without limitation, all shares of capital stock described on Schedule 2 hereto under the heading “Pledged Stock” (as such schedule may be amended from time to time), and the certificates, if any, representing such shares and any interest of such Grantor in the entries on the books of the issuer of such shares and all dividends, distributions, cash, warrants, rights, options, instruments, securities and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such shares and any other warrant, right or option to acquire any of the foregoing; provided , however , that in no event shall more than 65% of the total outstanding Foreign Subsidiary Voting Stock be required to be pledged to secure the US Borrower Obligations.

“ Pledged Securities ”: the collective reference to the Pledged Debt Securities, the Pledged Notes and the Pledged Equity Interests.

“ Pledged Security Entitlements ”: all security entitlements with respect to the financial assets listed on Schedule 2 (as such Schedule may be amended from time to time) and all other security entitlements of any Grantor.

“ Pledged Trust Interests ”: shall mean all interests of any Grantor now owned or hereafter acquired in a Delaware business trust or other trust including, without limitation, all trust interests listed on Schedule 2 hereto under the heading “Pledged Trust Interests” (as such schedule may be amended from time to time) and the certificates, if any, representing such trust interests and any interest of such Grantor on the books and

 

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records of such trust or on the books and records of any securities intermediary pertaining to such interest and all dividends, distributions, cash, warrants, rights, options, instruments, securities and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such trust interests and any other warrant, right or option to acquire any of the foregoing.

“ Proceeds ”: all “proceeds” as such term is defined in Section 9-102(a)(64) of the Uniform Commercial Code in effect in the State of New York on the date hereof and, in any event, shall include, without limitation, all dividends or other income from the Pledged Securities, collections thereon or distributions or payments with respect thereto.

“ Receivable ”: all Accounts and any other any right to payment for goods or other property sold, leased, licensed or otherwise disposed of or for services rendered, whether or not such right is evidenced by an Instrument or Chattel Paper or classified as a Payment Intangible and whether or not it has been earned by performance. References herein to Receivables shall include any Supporting Obligation or collateral securing such Receivable.

“ Second Lien Administrative Agent ”: means LCPI, as administrative agent under that certain Second Lien Credit Agreement, dated as of the date hereof, by and among, Holdings, the US Borrower, the lenders from time to time party thereto, Lehman Brothers Inc. and Jefferies Finance LLC, as joint arrangers and joint bookrunners, and LCPI, as administrative agent.

“ Secured Parties ”: collectively, the Administrative Agent, the UK Security Agent, the UK Secured Parties, the Lenders and, with respect to any Specified Hedge Agreement, any Affiliate of any Lender party thereto or any Person that was a Lender or an Affiliate thereof when such Specified Hedge Agreement was entered into that has agreed to be bound by the provisions of Section 7.2 hereof as if it were a party hereto and by the provisions of Section 9 of the First Lien Credit Agreement as if it were a Lender party thereto (any such Affiliate or other Person a “ Hedge Counterparty ”); provided that no Hedge Counterparty shall have any rights in connection with the management or release of any Collateral or the obligations of any Guarantor under this Agreement.

“ Securities Act ”: the Securities Act of 1933, as amended.

“ Trademark License ”: any agreement, whether written or oral, providing for the grant by or to any Grantor of any right to use any Trademark, including, without limitation, any of the foregoing referred to in Schedule 6 .

“ Trademarks ”: (i) all domestic and foreign trademarks, service marks, trade names, corporate names, company names, business names, trade dress, trade styles, logos, or other indicia of origin or source identification, Internet domain names, trademark and service mark registrations, and applications for trademark or service mark registrations and any renewals thereof, including, without limitation, each registration and application identified in Schedule 6 and (ii) all other rights of any kind whatsoever accruing thereunder or pertaining thereto, together in each case with the goodwill of the business connected with the use of, and symbolized by, each of the above.

 

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“ Trade Secret License ”: any agreement, whether written or oral, providing for the grant by or to any Grantor of any right to use any Trade Secret, including, without limitation, any of the foregoing referred to in Schedule 6 .

“ Trade Secrets ”: (i) all trade secrets and all confidential and proprietary information, including know-how, manufacturing and production processes and techniques, inventions, research and development information, technical data, financial, marketing and business data, pricing and cost information, business and marketing plans, and customer and supplier lists and information, including, without limitation, any of the foregoing referred to in Schedule 6 .

“ UK Loan Party ”: means the Cayman Borrower and each entity that grants a security interest under any Foreign Security Document.

“ US Borrower Obligations ”: the collective reference to the Obligations (as defined in the First Lien Credit Agreement) other than the UK Obligations.

“ US Guarantors ”: the collective reference to each Subsidiary Guarantor and Holdings.

“ US Secured Parties ”: the collective reference to the Secured Parties other than the UK Secured Parties.

“ Vehicles ”: all cars, trucks, trailers, construction and earth moving equipment and other Equipment of any nature covered by a certificate of title law of any jurisdiction and all tires and other appurtenances to any of the foregoing.

1.2. Other Definitional Provisions . The words “hereof”, “herein”, “hereto” 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 and Schedule references are to this Agreement unless otherwise specified.

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

(c) Where the context requires, terms relating to the Collateral or any part thereof, when used in relation to a Grantor, shall refer to such Grantor’s Collateral or the relevant part thereof.

(d) The expressions “payment in full,” “paid in full” and any other similar terms or phrases when used herein with respect to the US Borrower Obligations, the UK Obligations or the Guarantor Obligations shall mean the unconditional, final and irrevocable payment in full, in immediately available funds, of all of the US Borrower Obligations or the Guarantor Obligations, as the case may be.

 

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SECTION 2. GUARANTEE

2.1. US Borrower Obligations Guarantee .

(a) Each of the US Guarantors hereby, jointly and severally, unconditionally and irrevocably, guarantees to the Administrative Agent, for the ratable benefit of the US Secured Parties and their respective successors, indorsees, transferees and assigns, the prompt and complete payment and performance by the US Borrower when due (whether at the stated maturity, by acceleration or otherwise) of the US Borrower Obligations.

(b) If and to the extent required in order for the Obligations of any US Guarantor under this Section 2.1 to be enforceable under applicable federal, state and other laws relating to the insolvency of debtors, the maximum liability of such US Guarantor hereunder shall be limited to the greatest amount which can lawfully be guaranteed by such US Guarantor under such laws, after giving effect to any rights of contribution, reimbursement and subrogation arising under Section 2.2. Each US Guarantor acknowledges and agrees that, to the extent not prohibited by applicable law, (i) such US Guarantor (as opposed to its creditors, representatives of creditors or bankruptcy trustee, including such US Guarantor in its capacity as debtor in possession exercising any powers of a bankruptcy trustee) has no personal right under such laws to reduce, or request any judicial relief that has the effect of reducing, the amount of its liability under this Agreement, (ii) such US Guarantor (as opposed to its creditors, representatives of creditors or bankruptcy trustee, including such US Guarantor in its capacity as debtor in possession exercising any powers of a bankruptcy trustee) has no personal right to enforce the limitation set forth in this Section 2.1(b) or to reduce, or request judicial relief reducing, the amount of its liability under this Agreement, and (iii) the limitation set forth in this Section 2.1(b) may be enforced only to the extent required under such laws in order for the obligations of such US Guarantor under this Agreement to be enforceable under such laws and only by or for the benefit of a creditor, representative of creditors or bankruptcy trustee of such US Guarantor or other Person entitled, under such laws, to enforce the provisions thereof.

(c) Each US Guarantor agrees that US Borrower Obligations may at any time and from time to time be incurred or permitted in an amount exceeding the maximum liability of such Guarantor under Section 2.1(b) without impairing the guarantee contained in this Section 2 or affecting the rights and remedies of any US Secured Party hereunder.

(d) The guarantee contained in this Section 2 shall remain in full force and effect until payment in full of the Obligations (other than the UK Obligations).

(e) No payment made by the US Borrower, any of the US Guarantors, any other guarantor or any other Person or received or collected by any US Secured Party from the US Borrower, any of the US Guarantors, any other guarantor or any other Person by virtue of any action or proceeding or any set-off or appropriation or application at any time or from time to time in reduction of or in payment of the US Borrower Obligations shall be deemed to modify, reduce, release or otherwise affect the liability of any US Guarantor hereunder which shall, notwithstanding any such payment (other than any payment made by such US Guarantor in respect of the US Borrower Obligations or any payment received or collected from such US Guarantor in respect of the US Borrower Obligations), remain liable for the US Borrower Obligations up to the maximum liability of such US Guarantor hereunder until the US Borrower Obligations (other than (x) Obligations in respect of any Specified Hedge Agreement and (y) the UK Obligations) are paid in full.

 

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2.2. Rights of Reimbursement, Contribution and Subrogation with respect to the Obligations other than UK Obligations . In case any payment is made on account of the Obligations (other than UK Obligations) by any Grantor or is received or collected on account of the Obligations (other than UK Obligations) from any Grantor or its property:

(a) If such payment is made by the US Borrower or from its property, then, if and to the extent such payment is made on account of Obligations (other than the UK Obligations) arising from or relating to a Loan made to the US Borrower, the US Borrower shall not be entitled (A) to demand or enforce reimbursement or contribution in respect of such payment from any other Grantor or (B) to be subrogated to any claim, interest, right or remedy of any US Secured Party against any other Person, including any other Grantor or its property.

(b) If such payment is made by a US Guarantor or from its property, such US Guarantor shall be entitled, subject to and upon payment in full of the Obligations (other than UK Obligations), (A) to demand and enforce reimbursement for the full amount of such payment from the US Borrower and (B) to demand and enforce contribution in respect of such payment from each other US Guarantor which has not paid its fair share of such payment, as necessary to ensure that (after giving effect to any enforcement of reimbursement rights provided hereby) each US Guarantor pays its fair share of the unreimbursed portion of such payment. For this purpose, the fair share of each US Guarantor as to any unreimbursed payment shall be determined based on an equitable apportionment of such unreimbursed payment among all US Guarantors based on the relative value of their assets and any other equitable considerations deemed appropriate by the court.

(c) If and whenever (after payment in full of the Obligations (other than UK Obligations)) any right of reimbursement or contribution becomes enforceable by any Grantor against any other Grantor under Sections 2.2(a) and 2.2(b), such Grantor shall be entitled, subject to and upon payment in full of the Obligations (other than UK Obligations), to be subrogated (equally and ratably with all other Grantors entitled to reimbursement or contribution from any other Grantor as set forth in this Section 2.2) to any security interest that may then be held by the Administrative Agent upon any Collateral granted to it in this Agreement. Such right of subrogation shall be enforceable solely against the Grantors, and not against the US Secured Parties, and neither the Administrative Agent nor any other US Secured Party shall have any duty whatsoever to warrant, ensure or protect any such right of subrogation or to obtain, perfect, maintain, hold, enforce or retain any Collateral for any purpose related to any such right of subrogation. If subrogation is demanded by any Grantor, then (after payment in full of the Obligations (other than UK Obligations)) the Administrative Agent shall deliver to the Grantors making such demand, or to a representative of such Grantors or of the Grantors generally, an instrument satisfactory to the Administrative Agent transferring, on a quitclaim basis without any recourse, representation, warranty or obligation whatsoever, whatever security interest the Administrative Agent then may hold in whatever Collateral may then exist that was not previously released or disposed of by the Administrative Agent.

(d) All rights and claims arising under this Section 2.2 or based upon or relating to any other right of reimbursement, indemnification, contribution or subrogation that may at any time arise or exist in favor of any Grantor as to any payment on account of the Obligations (other than UK Obligations) made by it or received or collected from its property shall be fully subordinated in all respects to the prior payment in full of all of the Obligations (other than the UK Obligations). Until payment in full of the Obligations (other than UK Obligations), no Grantor shall demand or receive any collateral security, payment or distribution whatsoever (whether in cash, property or securities or otherwise) on account of any such right or

 

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claim. If any such payment or distribution is made or becomes available to any Grantor in any bankruptcy case or receivership, insolvency or liquidation proceeding, such payment or distribution shall be delivered by the person making such payment or distribution directly to the Administrative Agent, for application to the payment of the Obligations (other than UK Obligations). If any such payment or distribution is received by any Grantor, it shall be held by such Grantor in trust, as trustee of an express trust for the benefit of the US Secured Parties, and shall forthwith be transferred and delivered by such Grantor to the Administrative Agent, in the exact form received and, if necessary, duly endorsed.

(e) The obligations of the Grantors under the Loan Documents, including their liability for the Obligations (other than UK Obligations) and the enforceability of the security interests granted thereby, are not contingent upon the validity, legality, enforceability, collectibility or sufficiency of any right of reimbursement, contribution or subrogation arising under this Section 2.2. The invalidity, insufficiency, unenforceability or uncollectibility of any such right shall not in any respect diminish, affect or impair any such obligation or any other claim, interest, right or remedy at any time held by any US Secured Party against any US Guarantor or its property. The US Secured Parties make no representations or warranties in respect of any such right and shall have no duty to assure, protect, enforce or ensure any such right or otherwise relating to any such right.

(f) Each Grantor reserves any and all other rights of reimbursement, contribution or subrogation at any time available to it as against any other Grantor, but (i) the exercise and enforcement of such rights shall be subject to Section 2.2(d) and (ii) neither the Administrative Agent nor any other US Secured Party shall ever have any duty or liability whatsoever in respect of any such right, except as provided in Section 2.2(c).

2.3. Amendments, etc. with respect to the US Borrower Obligations. Each US Guarantor shall remain obligated hereunder notwithstanding that, without any reservation of rights against any US Guarantor and without notice to or further assent by any US Guarantor, any demand for payment of any of the US Borrower Obligations made by any US Secured Party may be rescinded by such US Secured Party and any of the US Borrower Obligations continued, and the US Borrower Obligations, or the liability of any other Person 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, increased, extended, amended, modified, accelerated, compromised, waived, surrendered or released by any US Secured Party, and the First Lien Credit Agreement and the other Loan Documents and any other documents executed and delivered in connection therewith may be amended, modified, supplemented or terminated, in whole or in part, as the Administrative Agent (or the requisite Lenders under the First Lien Credit Agreement or all Lenders, as the case may be) may deem advisable from time to time, and any collateral security, guarantee or right of offset at any time held by any US Secured Party for the payment of the US Borrower Obligations may be sold, exchanged, waived, surrendered or released. No US Secured Party shall have any obligation to protect, secure, perfect or insure any Lien at any time held by it as security for the US Borrower Obligations or for the guarantee contained in this Section 2 or any property subject thereto except as otherwise required by applicable law or as otherwise agreed hereunder.

2.4. US Borrower Obligations Guarantee Absolute and Unconditional . Each US Guarantor waives any and all notice of the creation, renewal, extension or accrual of any of

 

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the US Borrower Obligations and notice of or proof of reliance by any US Secured Party upon the guarantee contained in this Section 2 or acceptance of the guarantee contained in this Section 2; the US Borrower 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 the guarantee contained in this Section 2; and all dealings between the US Borrower and any of the US Guarantors, on the one hand, and the US Secured Parties, on the other hand, likewise shall be conclusively presumed to have been had or consummated in reliance upon the guarantee contained in this Section 2. Each US Guarantor waives diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon the US Borrower or any of the US Guarantors with respect to the US Borrower Obligations. Each US Guarantor understands and agrees that the guarantee contained in this Section 2 shall be construed as a continuing, absolute and unconditional guarantee of payment and performance without regard to (a) the validity or enforceability of the First Lien Credit Agreement or any other Loan Document, any of the US Borrower Obligations or any other collateral security therefor or guarantee or right of offset with respect thereto at any time or from time to time held by any US Secured Party, (b) any defense, set-off or counterclaim (other than a defense of payment or performance hereunder) which may at any time be available to or be asserted by the US Borrower or any other Person against any US Secured Party, or (c) any other circumstance whatsoever (with or without notice to or knowledge of the US Borrower or such US Guarantor) which constitutes, or might be construed to constitute, an equitable or legal discharge of the US Borrower for the US Borrower Obligations, or of such US Guarantor under the guarantee contained in this Section 2, in bankruptcy or in any other instance. When making any demand hereunder or otherwise pursuing its rights and remedies hereunder against any US Guarantor, any US Secured Party may, but shall be under no obligation to, make a similar demand on or otherwise pursue such rights and remedies as it may have against the US Borrower, any other US Guarantor or any other Person or against any collateral security or guarantee for the US Borrower Obligations or any right of offset with respect thereto, and any failure by any US Secured Party to make any such demand, to pursue such other rights or remedies or to collect any payments from the US Borrower, any other US Guarantor or any other Person or to realize upon any such collateral security or guarantee or to exercise any such right of offset, or any release of the US Borrower, any other US Guarantor or any other Person or any such collateral security, guarantee or right of offset, shall not relieve any US Guarantor of any obligation or liability hereunder, and shall not impair or affect the rights and remedies, whether express, implied or available as a matter of law, of any US Secured Party against any US Guarantor. For the purposes hereof “demand” shall include the commencement and continuance of any legal proceedings.

2.5. Reinstatement of US Borrower Obligations . The guarantee contained in this Section 2 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 US Borrower Obligations is rescinded or must otherwise be restored or returned by any US Secured Party upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of the US Borrower or any US Guarantor, or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, the US Borrower or any US Guarantor or any substantial part of its property, or otherwise, all as though such payments had not been made.

2.6. Payments of Obligations other than UK Obligations . Each US Guarantor hereby guarantees that payments hereunder with respect to the Obligations (other than UK Obligations) will be paid to the Administrative Agent without set-off or counterclaim in Dollars in immediately available funds at the office of the Administrative Agent located at the Payment Office specified in the First Lien Credit Agreement.

 

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2.7. UK Obligations Guarantee .

(a) Each of the Guarantors hereby, jointly and severally, unconditionally and irrevocably, guarantees to the UK Security Agent, for the ratable benefit of the UK Secured Parties and their respective successors, indorsees, transferees and assigns, the prompt and complete payment and performance by the Cayman Borrower when due (whether at the stated maturity, by acceleration or otherwise) of the UK Obligations.

(b) If and to the extent required in order for the Obligations of any Guarantor under this Section 2.7 to be enforceable under applicable federal, state, provincial and other laws relating to the insolvency of debtors, the maximum liability of such Guarantor hereunder shall be limited to the greatest amount which can lawfully be guaranteed by such Guarantor under such laws, after giving effect to any rights of contribution, reimbursement and subrogation arising under Section 2.8. Each Guarantor acknowledges and agrees that, to the extent not prohibited by applicable law, (i) such Guarantor (as opposed to its creditors, representatives of creditors or bankruptcy trustee, including such Guarantor in its capacity as debtor in possession exercising any powers of a bankruptcy trustee) has no personal right under such laws to reduce, or request any judicial relief that has the effect of reducing, the amount of its liability under this Agreement, (ii) such Guarantor (as opposed to its creditors, representatives of creditors or bankruptcy trustee, including such Guarantor in its capacity as debtor in possession exercising any powers of a bankruptcy trustee) has no personal right to enforce the limitation set forth in this Section 2.7(b) or to reduce, or request judicial relief reducing, the amount of its liability under this Agreement, and (iii) the limitation set forth in this Section 2.7(b) may be enforced only to the extent required under such laws in order for the obligations of such Guarantor under this Agreement to be enforceable under such laws and only by or for the benefit of a creditor, representative of creditors or bankruptcy trustee of such Guarantor or other Person entitled, under such laws, to enforce the provisions thereof.

(c) Each Guarantor agrees that UK Obligations may at any time and from time to time be incurred or permitted in an amount exceeding the maximum liability of such Guarantor under Section 2.7(b) without impairing the guarantee contained in this Section 2 or affecting the rights and remedies of any UK Secured Party hereunder.

(d) The guarantee of the UK Obligations contained in this Section 2 shall remain in full force and effect until payment in full of the UK Obligations and the Guarantor Obligations in respect thereof.

(e) No payment made by the Cayman Borrower, any of the Guarantors, any other guarantor or any other Person or received or collected by any UK Secured Party from the Cayman Borrower, any of the Guarantors, any other guarantor or any other Person by virtue of any action or proceeding or any set-off or appropriation or application at any time or from time to time in reduction of or in payment of the UK Obligations shall be deemed to modify, reduce, release or otherwise affect the liability of any Guarantor hereunder which shall, notwithstanding any such payment (other than any payment made by such Guarantor in respect of the UK Obligations or any payment received or collected from such Guarantor in respect of the UK Obligations), remain liable for the UK Obligations up to the maximum liability of such Guarantor hereunder until the UK Obligations are paid in full.

 

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2.8. Rights of Reimbursement, Contribution and Subrogation with respect to the UK Obligations and the Guarantor Obligations in respect thereof . In case any payment is made on account of the UK Obligations and the Guarantor Obligations in respect thereof by any Grantor or UK Loan Party or is received or collected on account of the UK Obligations and the Guarantor Obligations in respect thereof from any Grantor or UK Loan Party or its property:

(a) If such payment is made by the Cayman Borrower or from its property, then, if and to the extent such payment is made on account of Obligations arising from or relating to a Loan made to the Cayman Borrower, Cayman Borrower shall not be entitled (A) to demand or enforce reimbursement or contribution in respect of such payment from any other Grantor or UK Loan Party or (B) to be subrogated to any claim, interest, right or remedy of any UK Secured Party against any other Person, including any Grantor or UK Loan Party or their property.

(b) If such payment is made by a Guarantor or from its property, such Guarantor shall be entitled, subject to and upon payment in full of the UK Obligations and the Guarantor Obligations in respect thereof, (A) to demand and enforce reimbursement for the full amount of such payment from the Cayman Borrower and (B) to demand and enforce contribution in respect of such payment from each other Guarantor which has not paid its fair share of such payment, as necessary to ensure that (after giving effect to any enforcement of reimbursement rights provided hereby) each Guarantor pays its fair share of the unreimbursed portion of such payment. For this purpose, the fair share of each Guarantor as to any unreimbursed payment shall be determined based on an equitable apportionment of such unreimbursed payment among all Guarantors based on the relative value of their assets and any other equitable considerations deemed appropriate by the court.

(c) If and whenever (after payment in full of the UK Obligations and the Guarantor Obligations in respect thereof) any right of reimbursement or contribution becomes enforceable by any Grantor or UK Loan Party against any other Grantor or UK Loan Party under Sections 2.8(a) and 2.8(b), such Grantor or UK Loan Party shall be entitled, subject to and upon payment in full of the UK Obligations and the Guarantor Obligations in respect thereof, to be subrogated (equally and ratably with all other Grantors and UK Loan Parties entitled to reimbursement or contribution from any other Grantor or UK Loan Party as set forth in this Section 2.8) to any security interest that may then be held by the UK Security Agent upon any Collateral granted to it in this Agreement. Such right of subrogation shall be enforceable solely against the Grantors and UK Loan Parties, and not against the UK Secured Parties, and neither the UK Security Agent nor any other UK Secured Party shall have any duty whatsoever to warrant, ensure or protect any such right of subrogation or to obtain, perfect, maintain, hold, enforce or retain any Collateral for any purpose related to any such right of subrogation. If subrogation is demanded by any Grantor or UK Loan Party, then (after payment in full of the Obligations) the UK Security Agent shall deliver to the Grantors and UK Loan Parties making such demand, or to a representative of such Grantors or UK Loan Parties or of the Grantors and UK Loan Parties generally, an instrument satisfactory to the UK Security Agent transferring, on a quitclaim basis without any recourse, representation, warranty or obligation whatsoever, whatever security interest the UK Security Agent then may hold in whatever Collateral may then exist that was not previously released or disposed of by the UK Security Agent.

 

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(d) All rights and claims arising under this Section 2.8 or based upon or relating to any other right of reimbursement, indemnification, contribution or subrogation that may at any time arise or exist in favor of any Grantor or UK Loan Party as to any payment on account of the UK Obligations and the Guarantor Obligations in respect thereof made by it or received or collected from its property shall be fully subordinated in all respects to the prior payment in full of all of the Obligations. Until payment in full of the UK Obligations and the Guarantor Obligations in respect thereof, no Grantor or UK Loan Party shall demand or receive any collateral security, payment or distribution whatsoever (whether in cash, property or securities or otherwise) on account of any such right or claim. If any such payment or distribution is made or becomes available to any Grantor or UK Loan Party in any bankruptcy case or receivership, insolvency or liquidation proceeding, such payment or distribution shall be delivered by the person making such payment or distribution directly to the UK Security Agent, for application to the payment of the UK Obligations and the Guarantor Obligations in respect thereof. If any such payment or distribution is received by any Grantor or UK Loan Party, it shall be held by such Grantor or UK Loan Party in trust, as trustee of an express trust for the benefit of the UK Secured Parties, and shall forthwith be transferred and delivered by such Grantor or UK Loan Party to the UK Security Agent, in the exact form received and, if necessary, duly endorsed.

(e) The obligations of the Grantors and UK Loan Parties under the Loan Documents, including their liability for the UK Obligations and the Guarantor Obligations in respect thereof and the enforceability of the security interests granted thereby, are not contingent upon the validity, legality, enforceability, collectibility or sufficiency of any right of reimbursement, contribution or subrogation arising under this Section 2.8. The invalidity, insufficiency, unenforceability or uncollectibility of any such right shall not in any respect diminish, affect or impair any such obligation or any other claim, interest, right or remedy at any time held by any UK Secured Party against any Guarantor or its property. The UK Secured Parties make no representations or warranties in respect of any such right and shall have no duty to assure, protect, enforce or ensure any such right or otherwise relating to any such right.

(f) Each Grantor or UK Loan Party reserves any and all other rights of reimbursement, contribution or subrogation at any time available to it as against any other Grantor or UK Loan Party, but (i) the exercise and enforcement of such rights shall be subject to Section 2.8(d) and (ii) the UK Security Agent nor any other UK Secured Party shall ever have any duty or liability whatsoever in respect of any such right, except as provided in Section 2.8(c).

2.9. Amendments, etc. with respect to the UK Obligations. 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 UK Obligations made by any UK Secured Party may be rescinded by such UK Secured Party and any of the UK Obligations continued, and the UK Obligations, or the liability of any other Person 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, increased, extended, amended, modified, accelerated, compromised, waived, surrendered or released by any UK Secured Party, and the First Lien Credit Agreement and the other Loan Documents and any other documents executed and delivered in connection therewith may be amended, modified, supplemented or terminated, in whole or in part, as the UK Security Agent (or the requisite Lenders under the First Lien Credit Agreement or all Lenders, as the case may

 

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be) may deem advisable from time to time, and any collateral security, guarantee or right of offset at any time held by any UK Secured Party for the payment of the UK Obligations may be sold, exchanged, waived, surrendered or released. No UK Secured Party shall have any obligation to protect, secure, perfect or insure any Lien at any time held by it as security for the UK Obligations or for the guarantee contained in this Section 2 or any property subject thereto except as otherwise required by applicable law or as otherwise agreed hereunder.

2.10. UK Obligations Guarantee Absolute and Unconditional. Each Guarantor waives any and all notice of the creation, renewal, extension or accrual of any of the UK Obligations and notice of or proof of reliance by any UK Secured Party upon the guarantee contained in this Section 2 or acceptance of the guarantee contained in this Section 2; the UK 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 the guarantee contained in this Section 2; and all dealings between the Cayman Borrower and any of the Guarantors, on the one hand, and the UK Secured Parties, on the other hand, likewise shall be conclusively presumed to have been had or consummated in reliance upon the guarantee contained in this Section 2. Each Guarantor waives diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon the Cayman Borrower or any of the Guarantors with respect to the UK Obligations. Each Guarantor understands and agrees that the guarantee contained in this Section 2 shall be construed as a continuing, absolute and unconditional guarantee of payment and performance without regard to (a) the validity or enforceability of the First Lien Credit Agreement or any other Loan Document, any of the UK Obligations or any other collateral security therefor or guarantee or right of offset with respect thereto at any time or from time to time held by any UK Secured Party, (b) any defense, set-off or counterclaim (other than a defense of payment or performance hereunder) which may at any time be available to or be asserted by the Cayman Borrower or any other Person against any UK Secured Party, or (c) any other circumstance whatsoever (with or without notice to or knowledge of the Cayman Borrower or such Guarantor) which constitutes, or might be construed to constitute, an equitable or legal discharge of the Cayman Borrower for the UK Obligations, or of such Guarantor under the guarantee contained in this Section 2, in liquidation, bankruptcy, insolvency, receivership, reorganization or in any other instance. When making any demand hereunder or otherwise pursuing its rights and remedies hereunder against any Guarantor, any UK Secured Party may, but shall be under no obligation to, make a similar demand on or otherwise pursue such rights and remedies as it may have against the Cayman Borrower, any other Guarantor or any other Person or against any collateral security or guarantee for the UK Obligations or any right of offset with respect thereto, and any failure by any UK Secured Party to make any such demand, to pursue such other rights or remedies or to collect any payments from the Cayman Borrower, any other Guarantor or any other Person or to realize upon any such collateral security or guarantee or to exercise any such right of offset, or any release of the Cayman Borrower, any other Guarantor or any other Person or any such collateral security, guarantee or right of offset, shall not relieve any Guarantor of any obligation or liability hereunder, and shall not impair or affect the rights and remedies, whether express, implied or available as a matter of law, of any UK Secured Party against any Guarantor. For the purposes hereof “demand” shall include the commencement and continuance of any legal proceedings.

2.11. Reinstatement of UK Obligations. The guarantee contained in this Section 2 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 UK Obligations is rescinded or must otherwise be restored or

 

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returned by any UK Secured Party upon the insolvency, bankruptcy, dissolution, receivership, liquidation or reorganization, or the commencement of proceedings in connection therewith, of the Cayman Borrower or any Guarantor, or upon or as a result of the appointment of a receiver, receiver-manager, intervenor or conservator of, or trustee or similar officer for, the Cayman Borrower or any Guarantor or any substantial part of its property, or otherwise, all as though such payments had not been made.

2.12. Payments of UK Obligations. Each Guarantor hereby guarantees that payments with respect to the UK Obligations and the Guarantor Obligations in respect thereof hereunder will be paid to the UK Security Agent without set-off or counterclaim in Sterling in immediately available funds at the office of the UK Security Agent located at the Funding Office specified in the First Lien Credit Agreement.

SECTION 3. GRANT OF SECURITY INTEREST;

CONTINUING LIABILITY UNDER COLLATERAL

(a) Each Grantor hereby assigns and transfers to the Administrative Agent, and hereby grants to the Administrative Agent, for the ratable benefit of the Secured Parties, a security interest in, all of the personal property of such Grantor, including, without limitation, the following property, in each case, wherever located and now owned or at any time hereafter acquired by such Grantor or in which such Grantor now has or at any time in the future may acquire any right, title or interest (collectively, with the property described in clause (c) of this Section 3, the “ Collateral ”), as collateral security for the prompt and complete payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of such Grantor’s Obligations:

(i) all Accounts;

(ii) all Chattel Paper;

(iii) all Contracts;

(iv) all Deposit Accounts;

(v) all Documents;

(vi) all Equipment;

(vii) all General Intangibles;

(viii) all Instruments;

(ix) Insurance;

(x) all Intellectual Property;

(xi) all Inventory;

(xii) all Investment Property;

 

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(xiii) all Letter of Credit Rights;

(xiv) all Money;

(xv) all Vehicles;

(xvi) all Goods not otherwise described above;

(xvii) any Collateral Account;

(xviii) all books, records, ledger cards, files, correspondence, customer lists, blueprints, technical specifications, manuals, computer software, computer printouts, tapes, disks and other electronic storage media and related data processing software and similar items that at any time evidence or contain information relating to any of the Collateral or are otherwise necessary or helpful in the collection thereof or realization thereupon;

(xix) the following commercial tort claims set forth on Schedule 8; and

(xx) to the extent not otherwise included, all other property of the Grantor and all Proceeds, products, accessions, rents and profits of any and all of the foregoing and all collateral security, Supporting Obligations and guarantees given by any Person with respect to any of the foregoing.

Notwithstanding anything to the contrary in this Agreement, none of the Excluded Assets or the Excluded Collateral shall constitute Collateral.

(b) The US Borrower hereby assigns and transfers to the UK Security Agent, and hereby grants to the UK Security Agent, for the ratable benefit of the UK Secured Parties, a security interest in all Canadian Investment Property wherever located and now owned or at any time hereafter acquired by the US Borrower or in which the US Borrower now has or at any time in the future may acquire any right, title or interest, as collateral security for the prompt and complete payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of the UK Obligations, together with all books, records, ledger cards, files, correspondence, and similar items that at any time evidence or contain information relating to any of the Canadian Investment Property or are otherwise necessary or helpful in the collection thereof or realization thereupon, and to the extent not otherwise included, all Proceeds, products, accessions, and profits of any and all of the Canadian Investment Property.

(c) Notwithstanding anything herein to the contrary, (i) each Grantor shall remain liable for all obligations under the Collateral and the US Borrower shall remain liable for all obligations under the Canadian Investment Property and nothing contained herein is intended or shall be a delegation of duties to the Administrative Agent, the UK Security Agent or any Secured Party, (ii) each Grantor shall remain liable under and each of the agreements included in the Collateral, including, without limitation, any Receivables, any agreements relating to Pledged Partnership Interests or Pledged LLC Interests, to perform all of the obligations undertaken by it thereunder all in accordance with and pursuant to the terms and provisions thereof and none of the Administrative Agent, the UK Security Agent nor any Secured Party shall have any obligation or liability under any of such agreements by reason of or arising out of this Agreement

 

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or any other document related thereto nor shall the Administrative Agent, the UK Security Agent nor any Secured Party have any obligation to make any inquiry as to the nature or sufficiency of any payment received by it or have any obligation to take any action to collect or enforce any rights under any agreement included in the Collateral or the Canadian Investment Property, including, without limitation, any agreements relating to any Receivables, Pledged Partnership Interests or Pledged LLC Interests and (iii) the exercise by the Administrative Agent or the UK Security Agent of any of its rights hereunder shall not release any Grantor from any of its duties or obligations under the contracts and agreements included in the Collateral and the Canadian Investment Property.

SECTION 4. REPRESENTATIONS AND WARRANTIES

To induce the Arrangers, the Administrative Agent, the Syndication Agent, the UK Security Agent and the Lenders to enter into the First Lien Credit Agreement and to induce the Lenders to make their respective extensions of credit to the US Borrower and the Cayman Borrower thereunder, each Grantor and/or each Guarantor, as the case may be, hereby represents and warrants to the Secured Parties that:

4.1. Representations in First Lien Credit Agreement . In the case of each Guarantor, the representations and warranties set forth in Section 4 of the First Lien Credit Agreement as they relate to such Guarantor or to the Loan Documents to which such Guarantor is a party, each of which is hereby incorporated herein by reference, are true and correct, except for representations and warranties expressly stated to relate to a specific earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date, and the Secured Parties shall be entitled to rely on each of them as if they were fully set forth herein, provided that each reference in each such representation and warranty to the US Borrower’s, Holdings’ or the Cayman Borrower’s knowledge shall, for the purposes of this Section 4.l, be deemed to be a reference to such Guarantor’s knowledge.

4.2. Title; No Other Liens . In the case of each Grantor, such Grantor owns each item of the Collateral and in the case of the US Borrower, it owns the Canadian Investment Property, free and clear of any and all Liens or claims, including, without limitation, liens arising as a result of such Grantor becoming bound (as a result of merger or otherwise) as Grantor under a security agreement entered into by another Person, except for Permitted Liens. No financing statement, mortgage or other public notice with respect to all or any part of the Collateral or the Canadian Investment Property is on file or of record in any public office, except such as have been filed in favor of the Administrative Agent, for the ratable benefit of the applicable Secured Parties, and in favor of the UK Security Agent, for the ratable benefit of the UK Secured Parties, pursuant to this Agreement or as are permitted by the First Lien Credit Agreement and any other Loan Document.

4.3. Perfected First Priority Liens . The security interests granted pursuant to this Agreement (i) upon completion of the filings and other actions specified on Schedule 3 (all of which, in the case of all filings and other documents referred to on said Schedule, have been delivered to the Administrative Agent and the UK Security Agent in duly completed and duly executed form, as applicable, and may be filed by the Administrative Agent or the UK Security Agent at any time) and payment of all filing fees, will constitute valid fully perfected security interests (except as expressly provided herein) in all of the Collateral in favor of the Administrative Agent, for the ratable benefit of the applicable Secured Parties (it being

 

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understood and agreed that the Foreign Subsidiary Voting Stock in excess of 65% thereof constitutes a perfected security interest only to secure the UK obligations) for such Grantor’s Obligations and in all of the Canadian Investment Property in favor of the UK Security Agent, for the ratable benefit of the UK Secured Parties, as collateral security for the UK Obligations, and (ii) are prior to all other Liens on the Collateral and the Canadian Investment Property except for Permitted Liens. Without limiting the foregoing, subject to the limitations contained herein, each Grantor has taken all actions necessary or desirable, including without limitation those specified in Section 5.2 to: (i) establish the Administrative Agent’s “control” (within the meanings of Sections 8-106 and 9-106 of the UCC) over any portion of the Investment Property constituting Certificated Securities, Uncertificated Securities, Securities Accounts, Securities Entitlements or Commodity Accounts (each as defined in the UCC) and establish the UK Security Agent’s “control” (within the meanings of Sections 8-106 and 9-106 of the UCC) over any portion of the Canadian Investment Property (other than the Collateral) constituting Certificated Securities, Uncertificated Securities, Securities Accounts or Securities Entitlements (each as defined in the UCC), (ii) establish the Administrative Agent’s “control” (within the meaning of Section 9-104 of the UCC) over all Deposit Accounts, (iii) establish the Administrative Agent’s “control” (within the meaning of Section 9-107 of the UCC) over all Letter of Credit Rights, (iv) establish the Administrative Agent’s control (within the meaning of Section 9-105 of the UCC) over all Electronic Chattel Paper and (v) establish the Administrative Agent’s “control” (within the meaning of Section 16 of the Uniform Electronic Transaction Act as in effect in the applicable jurisdiction (“UETA”)) over all “transferable records” (as defined in UETA).

4.4. Name; Jurisdiction of Organization, etc . In the case of each Grantor, on the date hereof, such Grantor’s exact legal name (as indicated on the public record of such Grantor’s jurisdiction of formation or organization), jurisdiction of organization, organizational i.d. number, if any, and the location of such Grantor’s chief executive office or sole place of business are specified on Schedule 4 . On the date hereof, each Grantor is organized solely under the law of the jurisdiction so specified and has not filed any certificates of domestication, transfer or continuance in any other jurisdiction. Except as otherwise indicated on Schedule 4 , the jurisdiction of each such Grantor’s organization of formation is required to maintain a public record showing the Grantor to have been organized or formed. Except as specified on Schedule 4, on the date hereof, it has not changed its name, jurisdiction of organization, chief executive office or sole place of business or its corporate structure in any way (e.g. by merger, consolidation, change in corporate form or otherwise) within the past five years and has not within the last five years become bound (whether as a result of merger or otherwise) as Grantor under a security agreement entered into by another Person, which has not heretofore been terminated.

4.5. Inventory and Equipment . On the date hereof, the Inventory and the Equipment (other than mobile goods or inventory in transit) are kept at the locations listed on Schedule 5 .

(b) Any Inventory now or hereafter produced by any Grantor included in the Collateral have been and will be produced in compliance with the requirements of the Fair Labor Standards Act, as amended; and

 

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(c) On the date hereof, none of the Inventory or Equipment is (x) in the possession of an issuer of a negotiable document (as defined in Section 7-104 of the UCC) therefor or (y) otherwise in the possession of any bailee or warehouseman.

4.6. Farm Products . None of the Collateral or the Canadian Investment Property constitutes, or is the Proceeds of, Farm Products.

4.7. Investment Property .

(a) Schedule 2 hereto (as such schedule may be amended from time to time) sets forth under the headings “Pledged Stock”, “Pledged LLC Interests,” “Pledged Partnership Interests” and “Pledged Trust Interests,” respectively, all of the Pledged Stock, Pledged LLC Interests, Pledged Partnership Interests and Pledged Trust Interests owned by any Grantor and such Pledged Equity Interests constitute the percentage of issued and outstanding shares of stock, percentage of membership interests, percentage of partnership interests or percentage of beneficial interest of the respective issuers thereof indicated on such Schedule. Schedule 2 hereto (as such schedule may be amended from time to time) sets forth under the heading “Pledged Debt Securities” or “Pledged Notes” all of the Pledged Debt Securities and Pledged Notes owned by any Grantor and all of such Pledged Debt Securities and Pledged Notes have been duly authorized, authenticated or issued, and delivered and is the legal, valid and binding obligation of the issuers thereof enforceable in accordance with their terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law, and the Intercompany Notes when issued will constitute all of the issued and outstanding inter-company indebtedness evidenced by an instrument or certificated security of the respective issuers thereof owing to such Grantor. Schedule 2 hereto (as such schedule may be amended from time to time) sets forth under the headings “Securities Accounts,” “Commodities Accounts,” and “Deposit Accounts” respectively, all of the Securities Accounts, Commodities Accounts and Deposit Accounts in which each Grantor has an interest. Each Grantor is the sole entitlement holder or customer of each such account, and such Grantor has not consented to, and is not otherwise aware of, any Person (other than the Revolving Credit Administrative Agent (as defined in the ABL Intercreditor Agreement), Administrative Agent or the Second Lien Administrative Agent pursuant hereto) having “control” (within the meanings of Sections 8-106, 9-106 and 9-104 of the UCC) over, or any other interest in, any such Securities Account, Commodity Account or Deposit Account or any securities, commodities or other property credited thereto;

(b) (i) The shares of Pledged Equity Interests pledged by such Grantor to secure the UK Obligations hereunder constitute all of the issued and outstanding shares of all classes of the Capital Stock of each Issuer owned by such Grantor and (ii) the shares of Pledged Equity Interests pledged by such Grantor to secure the US Borrower Obligations hereunder constitute all of the issued and outstanding shares of all classes of the Capital Stock of each Issuer directly owned by such Grantor, or, in the case of Foreign Subsidiary Voting Stock, no more than 65% of the outstanding Foreign Subsidiary Voting Stock and non-voting Capital Stock of each relevant Issuer directly owned by such Grantor.

(c) All the shares of the Pledged Equity Interests have been duly and validly issued and are fully paid and nonassessable.

 

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(d) The terms of any uncertificated Pledged LLC Interests and Pledged Partnership Interests do not provide that they are securities governed by Article 8 of the Uniform Commercial Code in effect from time to time in the “issuer’s jurisdiction” of each Issuer thereof (as such term is defined in the Uniform Commercial Code in effect in such jurisdiction); provided that if any such Pledged LLC Interests or Pledged Partnership Interests shall subsequently be governed by Article 8 of the Uniform Commercial Code, the Grantors shall give the Administrative Agent 30 days prior notice thereof and shall perfect the Administrative Agent’s security interest pursuant to the terms hereof.

(e) (i) There are no certificated Pledged LLC Interests or Pledged Partnership Interests which provide that they are securities governed by Article 8 of the Uniform Commercial Code in effect from time to time in the “issuer’s jurisdiction” of each Issuer thereof, except those for which certificates relating thereto have been delivered to the Administrative Agent or the UK Security Agent pursuant to the terms hereof, and (ii) each applicable Grantor hereby covenants and agrees that, without the prior express written consent of the Administrative Agent or the UK Security Agent, it will not agree to any election by any partnership or limited liability company, as applicable, to treat the Pledged Partnership Interests or Pledged LLC Interests, as applicable, as securities governed by the Uniform Commercial Code of the “issuer’s jurisdiction” of such Grantor and in any event will promptly notify the Administrative Agent in writing if the representation set forth in Section 4.6(e) hereof becomes untrue for any reason and, in such event, take such action as the Administrative Agent or the UK Security Agent may request in order to establish the Administrative Agent’s or the UK Security Agent’s “control” (within the meaning of Section 8-106 of the Uniform Commercial Code) over such Pledged Partnership or Pledge LLC Interests, as applicable.

(f) In the case of each Grantor, such Grantor is the record and beneficial owner of, and has good and marketable title to, the Investment Property and Deposit Accounts pledged by it hereunder, free of any and all Liens or options in favor of, or claims of, any other Person, except Permitted Liens and there are no outstanding warrants, options or other rights to purchase, or shareholder, voting trust or similar agreements outstanding with respect to, or property that is convertible into, or that requires the issuance or sale of, any Pledged Equity Interests.

(g) Each Issuer that is an Affiliate and that is not a Grantor hereunder has executed and delivered to each of the Administrative Agent and the UK Security Agent, an Acknowledgment and Agreement, in substantially the form of Exhibit A, to the pledge of the Pledged Securities pursuant to this Agreement.

4.8. Receivables . No amount payable to any Grantor under or in connection with any Receivable in excess of $2,000,000 is evidenced by any Instrument or Tangible Chattel Paper which has not been delivered to the Administrative Agent or constitutes Electronic Chattel Paper that has not been subjected to the control (within the meaning of Section 9-105 of the UCC) of the Administrative Agent.

(b) None of the obligors on any Receivables included in the Collateral is a Governmental Authority.

(c) Each Receivable in excess of $5,000,000 that is included in the Collateral (i) to such Grantor’s knowledge, is and will be the legal, valid and binding obligation of the

 

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Account Debtor in respect thereof, representing an unsatisfied obligation of such Account Debtor, (ii) to such Grantor’s knowledge, is and will be enforceable in accordance with its terms, subject to the applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law, (iii) is not and will not be subject to any setoffs, defenses, taxes, counterclaims (except with respect to Permitted Liens and refunds, returns and allowances in the ordinary course of business with respect to damaged merchandise) and (iv) is and will be in compliance with all applicable laws and regulations except where such non-compliance would not reasonably be expected to have a Material Adverse Effect.

4.9. Contracts . Each Material Contract is in full force and effect and constitutes a valid and legally enforceable obligation of each Grantor, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing, except where the failure to be valid, enforceable and in full force and effect, in the aggregate, would not reasonably be expected to have a Material Adverse Effect.

(b) Neither such Grantor nor (to such Grantor’s knowledge) any of the other parties to the Material Contracts is in default in the performance or observance of any of the terms thereof in any manner that, in the aggregate, would reasonably be expected to have a Material Adverse Effect.

(c) To Grantor’s knowledge, the right, title and interest of such Grantor in, to and under the Material Contracts are not subject to any defenses, offsets, counterclaims or claims that, in the aggregate, could reasonably be expected to have a Material Adverse Effect.

(d) Such Grantor has delivered to the Administrative Agent a complete and correct copy of each Material Contract, including all amendments, supplements and other modifications thereto.

(e) No amount payable to such Grantor under or in connection with any Contract in excess of $2,500,000 is evidenced by any Instrument or Tangible Chattel Paper which has not been delivered to the Administrative Agent or constitutes Electronic Chattel Paper that is not under the Control of the Administrative Agent.

(f) None of the parties to any Contract is a Governmental Authority.

4.10. Intellectual Property . Schedule 6 lists all patents, patent applications, registered trademarks and applications for trademark registration, and copyright and copyright applications owned by such Grantor in its own name on the date hereof (the “ Registered Intellectual Property ”). Except as set forth in Schedule 6, such Grantor is the exclusive owner of the entire and unencumbered right, title and interest in and to such Intellectual Property and is otherwise entitled to use all such Intellectual Property.

(b) To the knowledge of the Grantors, on the date hereof, (i) all material Intellectual Property owned by a Grantor is valid, subsisting, unexpired and enforceable, has not been abandoned and (ii) neither the operation of such Grantor’s business as currently conducted nor the use of the Intellectual Property in connection therewith which infringes, misappropriates, or dilutes the Intellectual Property Rights of any other Person.

 

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(c) Except as set forth in Schedule 6 , on the date hereof (i) none of the material Intellectual Property is the subject of any licensing or franchise agreement pursuant to which such Grantor is the licensor or franchisor, and (ii) there are no other agreements, obligations, orders or judgments which affect a Grantor’s use of any material Intellectual Property.

(d) To the knowledge of each Grantor, the rights of such Grantor in or to the Intellectual Property owned by it do not infringe upon the Intellectual Property of any third party, and no claim has been asserted in writing that the use of such Intellectual Property does or may infringe upon the Intellectual Property rights of any third party, in either case, which conflict or infringement would reasonably be expected to have a Material Adverse Effect. There is currently no infringement or unauthorized use of any item of Intellectual Property that would reasonably be expected to have a Material Adverse Effect.

(e) No holding, decision or judgment has been rendered by any Governmental Authority which would limit, cancel or question the validity or enforceability of, or such Grantor’s rights in, any Intellectual Property in any respect that would reasonably be expected to have a Material Adverse Effect. Such Grantor is not aware of any uses of any item of Intellectual Property that could reasonably be expected to lead to such item becoming invalid or unenforceable including, without limitation, unauthorized uses by third parties and uses which were not supported by the goodwill of the business connected with Trademarks and Trademark Licenses.

(f) No action or proceeding is pending, or, to the knowledge of such Grantor, threatened, on the date hereof (i) seeking to limit, cancel or question the validity of any material Intellectual Property or such Grantor’s ownership interest therein, (ii) alleging that any services provided by, processes used by, or products manufactured or sold by such Grantor infringe any Patent, Trademark, Copyright, or any other Intellectual Property of any third party, (iii) alleging that any material Intellectual Property is being licensed, sublicensed or used in violation of any patent, trademark, copyright or any other right of any third party, or (iv) which, if adversely determined, would have a material adverse effect on the value of any Intellectual Property. Except as set forth in Schedule 6 hereto, such Grantor has not granted any license, release, covenant not to sue, non-assertion assurance, or other right to any person with respect to any part of the Intellectual Property. The consummation of the transactions contemplated by this Agreement will not result in the termination or impairment of any of the Intellectual Property.

(g) With respect to each Copyright License, Trademark License and Patent License: (i) such license is valid and binding and in full force and effect and represents the entire agreement between the respective licensor and licensee with respect to the subject matter of such license; (ii) such license will not cease to be valid and binding and in full force and effect on terms identical to those currently in effect as a result of the rights and interests granted herein, nor will the grant of such rights and interests constitute a breach or default under such license or otherwise give the licensor or licensee a right to terminate such license; (iii) such Grantor has not received any notice of termination or cancellation under such license; (iv) such Grantor has not received any notice of a breach or default under such license, which breach or default has not been cured; (v) such Grantor has not granted to any other third party any rights, adverse or

 

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otherwise, under such license; and (vi) such Grantor is not in breach or default in any material respect, and no event has occurred that, with notice and/or lapse of time, would constitute such a breach or default or permit termination, modification or acceleration under such license.

(h) Except as set forth in Schedule 6 , such Grantor has performed all acts and has paid all required fees and taxes to maintain each and every item of material Intellectual Property in full force and effect and to protect and maintain its interest therein. Such Grantor has used proper statutory notice in connection with its use of each material Patent, Trademark and Copyright included in the Intellectual Property.

(i) To the knowledge of each Grantor: (i) none of the Trade Secrets owned by such Grantor has been misappropriated; (ii) no employee, independent contractor or agent of such Grantor has misappropriated any Trade Secrets of any other Person in the course of the performance of his or her duties as an employee, independent contractor or agent of such Grantor; and (iii) no employee, independent contractor or agent of such Grantor is in default or breach of any term of any employment agreement, non-disclosure agreement, assignment of inventions agreement or similar agreement or contract relating in any way to the protection, ownership, development, use or transfer of such Grantor’s Intellectual Property.

(j) Such Grantor has made all filings and recordations necessary to record its ownership of Registered Intellectual Property including, without limitation, recordation of its interests in the Patents and Trademarks with the United States Patent and Trademark Office and in corresponding national and international patent offices, if applicable, and recordation of any of its interests in the Copyrights with the United States Copyright Office and in corresponding national and international copyright offices, if applicable.

(k) Such Grantor has taken commercially reasonable steps to use consistent standards of quality in the manufacture, distribution and sale of all products sold and provision of all services provided under or in connection with any item of Registered Intellectual Property and has taken commercially reasonable steps to ensure that all licensed users of any kind of Registered Intellectual Property use such consistent standards of quality.

(l) No Grantor is subject to any settlement or consents, judgment, injunction, order, decree, covenants not to sue, non-assertion assurances or releases that would impair the validity or enforceability of, or such Grantor’s rights in, any Intellectual Property.

4.11. Vehicles . Schedule 8 is a complete and correct list of all Vehicles owned by such Grantor on the date hereof.

4.12. Letter of Credit Rights . No Grantor is a beneficiary or assignee under any letter of credit (a) of less than $2,500,000 and (b) other than the letters of credit described on Schedule 9 hereto.

4.13. Commercial Tort Claims . No Grantor has any commercial tort claims in excess of $2,000,000.

 

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SECTION 5. COVENANTS

Each Grantor and each Guarantor covenants and agrees with the Secured Parties that, from and after the date of this Agreement until the Obligations (other than Obligations in respect of any Specified Hedge Agreement) shall have been paid in full and the Commitments shall have terminated or expired:

5.1. Covenants in First Lien Credit Agreement . Each Guarantor shall take, or shall refrain from taking, as the case may be, each action that is necessary to be taken or not taken, as the case may be, so that no Default or Event of Default is caused by the failure to take such action or to refrain from taking such action by such Guarantor or any of its Subsidiaries.

5.2. Delivery and Control of Instruments, Chattel Paper, Negotiable Documents, Investment Property and Deposit Accounts . In the case of each Grantor, (a) if any of the Collateral in excess of $2,500,000 individually is or shall become evidenced or represented by any Instrument, Certificated Security, Negotiable Document or Tangible Chattel Paper, such Instrument (other than checks received in the ordinary course of business), Certificated Security, Negotiable Documents or Tangible Chattel Paper shall be promptly delivered to the Administrative Agent, duly endorsed in a manner satisfactory to the Administrative Agent, to be held as Collateral pursuant to this Agreement. Any Collateral not otherwise required to be delivered to the Administrative Agent in accordance with this subsection (a) shall be delivered to the Administrative Agent, at the request of the Administrative Agent, after an Event of Default has occurred and be continuing.

(b) If any of the Collateral is or shall become “Electronic Chattel Paper” such Grantor shall ensure that (i) a single authoritative copy exists which is unique, identifiable, unalterable (except as provided in clauses iii, iv and v of this paragraph), (ii) that such authoritative copy identifies the Administrative Agent as the assignee and is communicated to and maintained by the Administrative Agent or its designee, (iii) that copies or revisions that add or change the assignee of the authoritative copy can only be made with the participation of the Administrative Agent, (iv) that each copy of the authoritative copy and any copy of a copy is readily identifiable as a copy and not the authoritative copy and (v) any revision of the authoritative copy is readily identifiable as an authorized or unauthorized revision.

(c) If any of the Collateral or the Canadian Investment Property (other than the Collateral) is or shall become evidenced or represented by an Uncertificated Security, such Grantor shall take commercially reasonable efforts to cause the Issuer thereof either (i) to register the Administrative Agent or the UK Security Agent, as the case may be, as the registered owner of such Uncertificated Security, upon original issue or registration of transfer or (ii) to agree in writing with such Grantor, the Administrative Agent and the UK Security Agent, as the case may be, that such Issuer will comply with instructions with respect to such Uncertificated Security originated by the Administrative Agent or the UK Security Agent without further consent of such Grantor, such agreement to be in a form reasonably acceptable to the Administrative Agent or the UK Security Agent, as the case may be.

(d) Each Grantor shall maintain Securities Entitlements, Securities Accounts and Deposit Accounts with values in excess of $2,500,000 in each individual account, or $7,500,000 in the aggregate, only with financial institutions that have agreed to comply with entitlement orders and instructions issued or originated by the Administrative Agent without further consent of such Grantor, such agreement to be substantially in the form of Exhibits E-1 and E-2, as the case may be.

 

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(e) If any of the Collateral is or shall become evidenced or represented by a Commodity Contract, such Grantor shall cause the Commodity Intermediary with respect to such Commodity Contract to agree in writing with such Grantor and the Administrative Agent that such Commodity Intermediary will apply any value distributed on account of such Commodity Contract as directed by the Administrative Agent without further consent of such Grantor, such agreement to be in a form reasonably acceptable to the Administrative Agent.

(f) In addition to and not in lieu of the foregoing, if any Issuer of any Investment Property or Canadian Investment Property is organized under the law of, or has its chief executive office in, a jurisdiction outside of the United States, each Grantor shall take such additional actions, including, without limitation, causing the issuer to register the pledge on its books and records, as may be necessary or as may be reasonably requested by the Administrative Agent or the UK Security Agent, as the case may be, under the laws of such jurisdiction to insure the validity, perfection and priority of the security interest of the Administrative Agent and the UK Security Agent.

(g) In the case of any Letter of Credit Rights in excess of $2,500,000 individually each Grantor shall use commercially reasonable efforts to obtain the consent of the issuer thereof and any nominated person thereon to the assignment of the proceeds of the related Letter of Credit in accordance with Section 5-114(c) of the New York UCC.

5.3. Maintenance of Insurance . (a) In the case of each Grantor, such Grantor will maintain, with reputable insurance companies, insurance on all its property (including, without limitation, all Inventory, Equipment and Vehicles) in at least such amounts and against at least such risks as are usually insured against in the same general area by companies engaged in the same or a similar business; and furnish to the Administrative Agent and the UK Security Agent with copies for each Secured Party, upon written request, full information as to the insurance carried; provided that in any event such Grantor will maintain, to the extent obtainable on commercially reasonable terms, (i) property and casualty insurance on all real and personal property covering the repair or replacement cost of all such property and consequential loss coverage for business interruption and extra expense (which shall include construction expenses and such other business interruption expenses as are otherwise generally available to similar businesses), and (ii) public liability insurance. All such insurance with respect to such Grantor shall be provided by insurers or reinsurers which (x) in the case of United States insurers and reinsurers, have an A.M. Best policyholders rating of not less than A- with respect to primary insurance and B+ with respect to excess insurance and (y) in the case of non-United States insurers or reinsurers, the providers of at least 80% of such insurance have either an ISI policyholders rating of not less than A, an A.M. Best policyholders rating of not less than A- or a surplus of not less than $500,000,000 with respect to primary insurance, and an ISI policyholders rating of not less than BBB with respect to excess insurance, or, if the relevant insurance is not available from such insurers, such other insurers as the Administrative Agent and the UK Security Agent may approve in writing. All insurance shall (i) provide that no cancellation, material reduction in amount or material change in coverage thereof shall be effective until at least 30 days after receipt by the Administrative Agent and the UK Security Agent of written notice thereof, (ii) if reasonably requested by the Administrative Agent or the UK Security Agent, include a breach of warranty clause and (iii) be reasonably satisfactory in all other respects to the Administrative Agent and the UK Security Agent.

 

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(b) In the case of each Grantor, such Grantor will deliver to the Administrative Agent and the UK Security Agent on behalf of the Secured Parties, (i) on the Closing Date, a certificate dated such date showing the amount and types of insurance coverage as of such date, (ii) upon request of any Secured Party from time to time, full information as to the insurance carried, (iii) promptly following receipt of notice from any insurer, a copy of any notice of cancellation or material change in coverage from that existing on the Closing Date, (iv) forthwith, notice of any cancellation or nonrenewal of coverage by such Grantor, and (v) promptly after such information is available to such Grantor, full information as to any claim for an amount in excess of $2,500,000 with respect to any property and casualty insurance policy maintained by such Grantor. The Administrative Agent and the UK Security Agent shall be named as additional insured on all such liability insurance policies of such Grantor and shall be named as loss payees on all property and casualty insurance policies of such Grantor.

(c) The US Borrower shall deliver to the Secured Parties a report of a reputable insurance broker with respect to such insurance substantially concurrently with the delivery by the US Borrower to the Administrative Agent and the UK Security Agent of its audited financial statements for each fiscal year and such supplemental reports of such insurance broker with respe