GUARANTEE AND COLLATERAL AGREEMENT

Exhibit 10.16

 

EXECUTION VERSION

 

GUARANTEE AND COLLATERAL AGREEMENT

dated as of

April 28, 2009,

among

WOLVERINE TUBE, INC.,

THE SUBSIDIARIES OF WOLVERINE TUBE, INC.

IDENTIFIED HEREIN

and

U.S. BANK NATIONAL ASSOCIATION,

as Collateral Agent

 

 

TABLE OF CONTENTS

 

 

 

SCHEDULES :

EXHIBITS :

 

 

Schedule I to

the Guarantee and

Collateral Agreement

GUARANTEE AND COLLATERAL AGREEMENT (this “ Agreement ”), dated as of April 28, 2009, among WOLVERINE TUBE, INC., a Delaware corporation (the “ Company ”), the subsidiaries of the Company identified herein (the “ Subsidiaries ” and, each, a “ Subsidiary ”) and U.S. BANK NATIONAL ASSOCIATION (“ U.S. Bank ”), as Collateral Agent (in such capacity, the “ Collateral Agent ”).

Reference is made to the Indenture, dated as of April __, 2009 (as amended, supplemented or otherwise modified from time to time, the “ Indenture ”), among the Company, the Subsidiaries and U.S. Bank as trustee and collateral agent.  The Company has agreed to issue the Notes subject to the terms and conditions set forth in the Indenture, including, among other things, the execution and delivery of this Agreement.  The Subsidiary Parties (as defined below) are affiliates of the Company, will derive substantial benefits from the issuance of the Notes pursuant to the Indenture and are willing to execute and deliver this Agreement in order to support the issuance of the Notes.  Accordingly, the parties hereto agree as follows:

ARTICLE I

Definitions

SECTION 1.01.   Indenture.   (a)  Capitalized terms used in this Agreement and not otherwise defined herein have the meanings specified in the Indenture.  All terms defined in the New York UCC (as defined herein) and not defined in this Agreement have the meanings specified therein.  The term “instrument” shall have the meaning specified in Article 9 of the New York UCC.

(a)  The rules of construction specified in Section 1.04 of the Indenture also apply to this Agreement.

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

“ Account Debtor ” means any Person who is or who may become obligated to any Grantor under, with respect to or on account of an account.

“ Article 9 Collateral ” has the meaning assigned to such term in Section 4.01.

“ CFC Subsidiary ” means any Subsidiary that is a “controlled foreign corporation” within the meaning of Section 957 of the Internal Revenue Code of 1986, as amended.

“ CFC ” means a controlled foreign corporation (as that term is defined in the Internal Revenue Code of 1986, as amended).

 

 

“ Collateral ” means Article 9 Collateral and Pledged Collateral.

“ Copyright License ” means any written agreement, now or hereafter in effect, granting any right to any third party under any copyright now or hereafter owned by any Grantor or that such Grantor otherwise has the right to license, or granting any right to any Grantor under any copyright now or hereafter owned by any third party, and all rights of such Grantor under any such agreement.

“ Copyrights ” means all of the following now owned or hereafter acquired by any Grantor:  (a) all copyright rights in any work subject to the copyright laws of the United States or any other country, whether as author, assignee, transferee or otherwise, and (b) all registrations and applications for registration of any such copyright in the United States or any other country, including registrations, recordings, supplemental registrations and pending applications for registration in the United States Copyright Office, including those listed on Schedule III.

“ Equity Interests ” means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any such equity interest.

“ Excluded Property ” shall mean and include all of the following assets and properties of any Indenture Party:

(ii)           any contract or instrument in which any Indenture Party has any right, title or interest if and to the extent such contract or instrument includes a provision containing a restriction on assignment such that the creation of a security interest in the right, title or interest of such Indenture Party therein would be prohibited and would, in and of itself, cause or result in a default thereunder enabling another person party to such contract or instrument to enforce any remedy with respect thereto; provided, however, that the foregoing exclusion shall not apply if (i) such prohibition has been waived or such other Person has otherwise consented to the creation hereunder of a security interest in such contract or instrument, or (ii) such prohibition would be rendered ineffective pursuant to Section 9-318(4) of the Uniform Commercial Code or Sections 9-407(a) or 9-408(a) of the Uniform Commercial Code, as applicable and as then in effect in any relevant jurisdiction, or any other applicable law (including applicable bankruptcy and insolvency law) or principles of equity; provided further that immediately upon the ineffectiveness, lapse or termination of any such provision, the term “Collateral” shall include, and each such Indenture Party shall be deemed to have granted a security interest in, all its rights, title and interests in and to such contract or instrument as if such provision had never been in effect; and provided further that the foregoing exclusion shall in no way be construed so as to limit, impair or otherwise affect the Collateral Agent’s unconditional continuing security interest in and to all rights, title and interests of each such Indenture Party in or to any payment obligations or other rights to receive monies due or to become due under any such contract or instrument and in any such monies and other proceeds of such contract or instrument;

 

(iv)           Equity Interests of any CFC, solely to the extent that (y) such Equity Interests represents more than 65% of the total outstanding Voting Stock of any first tier Subsidiary of an Indenture Party that is a CFC or any of the outstanding Equity Interests of any Subsidiary of such CFC and (z) hypothecating more than 65% of the total outstanding Voting Stock of such CFC would result in material adverse tax consequences;

(v)           any Equity Interests or assets of any Unrestricted Subsidiary;

(vi)          any assets with respect to which the burden or cost of obtaining or perfecting a security interest or Lien sufficiently outweighs the benefit to the Secured Parties, as set forth in an Officers’ Certificate delivered to the Trustee in accordance with the terms of the Indenture;

(vii)         any application to register any trademark, service mark or other mark prior to the filing under applicable law of a verified statement of use (or the equivalent) for such trademark, service mark or other mark to the extent the creation of a security interest therein or the grant of a mortgage thereon would void or invalidate such trademark, service mark or other mark); or

(viii)        any deposit account maintained to fund taxes, payroll obligations and/or employee benefit plans (including medical or insurance reimbursement accounts) or any deposit account which has an average monthly balance of less than $250,000.

“ Federal Securities Laws ” has the meaning assigned to such term in Section 5.04.

“ General Intangibles ” means all “General Intangibles” as defined in the New York UCC, including all choses in action and causes of action and all other intangible personal property of every kind and nature (other than accounts) now owned or hereafter acquired by any Grantor, including all rights and interests in partnerships, limited partnerships, limited liability companies and other unincorporated entities,  corporate or other business records, indemnification claims, contract rights (including rights under leases, whether entered into as lessor or lessee, Interest Rate Agreements, Commodity Agreements, Natural Gas Agreements, Currency Agreements and other agreements), Intellectual Property, goodwill, registrations, franchises, tax refund claims and any letter of credit, guarantee, claim, security interest or other security held by or granted to any Grantor to secure payment by an Account Debtor of any of the accounts.

 

 

“ Grantors ” means the Company and the Subsidiary Parties.

“ Guarantors ” means the Subsidiary Parties.

“ Indenture ” has the meaning assigned to such term in the preliminary statement of this Agreement.

“ Indenture Documents ” means the Indenture, the Notes and the Collateral Agreements.

“ Indenture Parties ” means the Company and the Subsidiaries.

“ Intellectual Property ” means all intellectual and similar property of every kind and nature now owned or hereafter acquired by any Grantor, including inventions, designs, Patents, Copyrights, Licenses, Trademarks, trade secrets, confidential or proprietary technical and business information, know-how, show-how or other data or information, software and databases and all embodiments or fixations thereof and related documentation, registrations and franchises, and all additions, improvements and accessions to, and books and records describing or used in connection with, any of the foregoing.

“ License ” means any Patent License, Trademark License, Copyright License or other license or sublicense agreement to which any Grantor is a party, including those listed on Schedule III.

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

“ Obligations ” means (a) the due and punctual payment by the Company of (i) the principal of and interest (including interest accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding) on the Notes, when and as due, whether at maturity, by acceleration, upon one or more dates set for prepayment or otherwise and (ii) all other monetary obligations of the Company to any of the Secured Parties under the Indenture and each of the other Indenture Documents, including obligations to pay fees, expense reimbursement obligations and indemnification obligations, whether primary, secondary, direct, contingent, fixed or otherwise (including monetary obligations incurred during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), (b) the due and punctual performance of all other obligations of the Company under or pursuant to the Indenture and each of the other Indenture Documents and (c) the due and punctual payment and performance of all the obligations of each Subsidiary under or pursuant to this Agreement and each of the other Indenture Documents.

 

 

“ Patent License ” means any written agreement, now or hereafter in effect, granting to any third party any right to make, use or sell any invention on which a patent, now or hereafter owned by any Grantor or that any Grantor otherwise has the right to license, is in existence, or granting to any Grantor any right to make, use or sell any invention on which a patent, now or hereafter owned by any third party, is in existence, and all rights of any Grantor under any such agreement.

“ Patents ” means all of the following now owned or hereafter acquired by any Grantor:  (a) all letters patent of the United States or the equivalent thereof in any other country, all registrations and recordings thereof, and all applications for letters patent of the United States or the equivalent thereof in any other country, including registrations, recordings and pending applications in the United States Patent and Trademark Office or any similar offices in any other country, including those listed on Schedule III and (b) all reissues, continuations, divisions, continuations-in-part, renewals or extensions thereof, and the inventions disclosed or claimed therein, including the right to make, use and/or sell the inventions disclosed or claimed therein.

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

“ Pledged Debt Securities ” has the meaning assigned to such term in Section 3.01.

“ Pledged Securities ” means any promissory notes, stock certificates or other securities now or hereafter included in the Pledged Collateral, including all certificates, instruments or other documents representing or evidencing any Pledged Collateral.

“ Pledged Stock ” has the meaning assigned to such term in Section 3.01.

“ Proceeds ” has the meaning specified in Section 9-102 of the New York UCC.

“ Secured Parties ” means (a) the Noteholders, (b) the Trustee, (c) the Collateral Agent, (d) the beneficiaries of each indemnification obligation undertaken by any Indenture Party under any Indenture Document, including without limitation the Trustee, and (e) the permitted successors and assigns of each of the foregoing.

“ Security Interest ” has the meaning assigned to such term in Section 4.01.

“ Subsidiary Parties ” means (a) the Subsidiaries identified on Schedule I and (b) each other Subsidiary that becomes a party to this Agreement as a Subsidiary Party after the date hereof.

“ Trademark License ” means any written agreement, now or hereafter in effect, granting to any third party any right to use any trademark now or hereafter owned by any Grantor or that any Grantor otherwise has the right to license, or granting to any Grantor any right to use any trademark now or hereafter owned by any third party, and all rights of any Grantor under any such agreement.

 

 

“ Trademarks ” means all of the following now owned or hereafter acquired by any Grantor: (a) all trademarks, service marks, trade names, corporate names, company names, business names, fictitious business names, trade styles, trade dress, logos, other source or business identifiers, designs and general intangibles of like nature, now existing or hereafter adopted or acquired, all registrations and recordings thereof, and all registration and recording applications filed in connection therewith, including registrations and registration applications in the United States Patent and Trademark Office or any similar offices in any State of the United States or any other country or any political subdivision thereof, and all extensions or renewals thereof, including those listed on Schedule III, (b) all goodwill associated therewith or symbolized thereby and (c) all other assets, rights and interests that uniquely reflect or embody such goodwill.

ARTICLE II

Guarantee

SECTION 2.01.   Guarantee.   Each Guarantor unconditionally guarantees, jointly with the other Guarantors and severally, as a primary obligor and not merely as a surety, the due and punctual payment and performance of the Obligations.  Each of the Guarantors further agrees that the Obligations may be extended or renewed, in whole or in part, without notice to or further assent from it, and that it will remain bound upon its guarantee notwithstanding any extension or renewal of any Obligation.  Each of the Guarantors waives presentment to, demand of payment from and protest to the Company or any other Indenture Party of any of the Obligations, and also waives notice of acceptance of its guarantee and notice of protest for nonpayment.

SECTION 2.02.   Guarantee of Payment.   Each of the Guarantors further agrees that its guarantee hereunder constitutes a guarantee of payment when due and not of collection, and waives any right to require that any resort be had by the Collateral Agent or any other Secured Party to any security held for the payment of the Obligations or to any balance of any deposit account or credit on the books of the Collateral Agent or any other Secured Party in favor of the Company or any other Person.

SECTION 2.03.   No Limitations.   (a)  Except for termination of a Guarantor’s obligations hereunder as expressly provided in Section 7.13, the obligations of each Guarantor hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any defense or set-off, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality or unenforceability of the Obligations or otherwise.  Without limiting the generality of the foregoing, the obligations of each Guarantor hereunder shall not be discharged or impaired or otherwise affected by (i) the failure of the Collateral Agent or any other Secured Party to assert any claim or demand or to enforce any right or remedy under the provisions of any Indenture Document or otherwise; (ii) any rescission, waiver, amendment or modification of, or any release from any of the terms or provisions of, any Indenture Document or any other agreement, including with respect to any other Guarantor under this Agreement; (iii) the release of any security held by the Collateral Agent or any other Secured Party for the Obligations or any of them; (iv) any default, failure or delay, willful or otherwise, in the performance of the Obligations; or (v) any other act or omission that may or might in any manner or to any extent vary the risk of any Guarantor or otherwise operate as a discharge of any Guarantor as a matter of law or equity (other than the indefeasible payment in full in cash of all the Obligations).  Each Guarantor expressly authorizes the Collateral Agent to take and hold security for the payment and performance of the Obligations, to exchange, waive or release any or all such security (with or without consideration), to enforce or apply such security and direct the order and manner of any sale thereof in its sole discretion or to release or substitute any one or more other guarantors or obligors upon or in respect of the Obligations, all without affecting the obligations of any Guarantor hereunder.

 

 

(b)  To the fullest extent permitted by applicable law, each Guarantor waives any defense based on or arising out of any defense of the Company or any Indenture Party or the unenforceability of the Obligations or any part thereof from any cause, or the cessation from any cause of the liability of the Company or any other Indenture Party, other than the indefeasible payment in full in cash of all the Obligations.  The Collateral Agent and the other Secured Parties may, at their election, foreclose on any security held by one or more of them by one or more judicial or nonjudicial sales, accept an assignment of any such security in lieu of foreclosure, compromise or adjust any part of the Obligations, make any other accommodation with the Company or any other Indenture Party or exercise any other right or remedy available to them against the Company or any other Indenture Party, without affecting or impairing in any way the liability of any Guarantor hereunder, except to the extent the Obligations have been fully and indefeasibly paid in full in cash.  To the fullest extent permitted by applicable law, each Guarantor waives any defense arising out of any such election even though such election operates, pursuant to applicable law, to impair or to extinguish any right of reimbursement or subrogation or other right or remedy of such Guarantor against the Company or any other Indenture Party, as the case may be, or any security.

SECTION 2.04.   Reinstatement.   Each of the Guarantors agrees that its guarantee hereunder shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of any Obligation is rescinded or must otherwise be restored by the Collateral Agent or any other Secured Party upon the bankruptcy or reorganization of the Company, any other Indenture Party or otherwise.

SECTION 2.05.   Agreement To Pay; Subrogation.   In furtherance of the foregoing and not in limitation of any other right that the Collateral Agent or any other Secured Party has at law or in equity against any Guarantor by virtue hereof, upon the failure of the Company or any other Indenture Party to pay any Obligation when and as the same shall become due, whether at maturity, by acceleration, after notice of prepayment or otherwise, each Guarantor hereby promises to and will forthwith pay, or cause to be paid, to the Collateral Agent for distribution to the applicable Secured Parties in cash the amount of such unpaid Obligation.  Upon payment by any Guarantor of any sums to the Collateral Agent as provided above, all rights of such Guarantor against the Company or any other Indenture Party arising as a result thereof by way of right of subrogation, contribution, reimbursement, indemnity or otherwise shall in all respects be subject to Article VI.

 

 

SECTION 2.06.   Information.   Each Guarantor assumes all responsibility for being and keeping itself informed of the Company’s and each other Indenture Party’s financial condition and assets, and of all other circumstances bearing upon the risk of nonpayment of the Obligations and the nature, scope and extent of the risks that such Guarantor assumes and incurs hereunder, and agrees that none of the Collateral Agent or the other Secured Parties will have any duty to advise such Guarantor of information known to it or any of them regarding such circumstances or risks.

ARTICLE III

Pledge of Securities

SECTION 3.01.   Pledge .  As security for the payment or performance, as the case may be, in full of the Obligations, each Grantor hereby assigns and pledges to the Collateral Agent, its successors and assigns, for the ratable benefit of the Secured Parties, and hereby grants to the Collateral Agent, its successors and assigns, for the ratable benefit of the Secured Parties, a security interest in, all of such Grantor’s right, title and interest in, to and under (a) the shares of capital stock and other Equity Interests owned by it, including but not limited to those listed on Schedule II and any other Equity Interests obtained in the future by such Grantor and the certificates, if any, representing all such Equity Interests (the “ Pledged Stock ”); provided , that the Pledged Stock shall not include (i) Equity Interests of Wolverine China Investments LLC, or (ii) Equity Interests of any Person of which the Indenture Parties individually or in the aggregate do not own in excess of 50% of the issued and outstanding Equity Interests of such Person and the pledge or other Lien upon such Equity Interest is prohibited pursuant to a bona fide agreement with any such Person; (b)(i) the debt securities listed opposite the name of such Grantor on Schedule II, (ii) any debt securities in the future issued to such Grantor and (iii) the promissory notes and any other instruments evidencing such debt securities (the “ Pledged Debt Securities ”); (c) all other property that may be delivered to and held by the Collateral Agent pursuant to the terms of this Section 3.01; (d) subject to Section 3.06, all payments of principal or interest, dividends, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of, in exchange for or upon the conversion of, and all other Proceeds received in respect of, the securities referred to in clauses (a) and (b) above; (e) subject to Section 3.06, all rights and privileges of such Grantor with respect to the securities and other property referred to in clauses (a), (b), (c) and (d) above; and (f) all Proceeds of any of the foregoing (the items referred to in clauses (a) through (f) above being collectively referred to as the “ Pledged Collateral ”).

TO HAVE AND TO HOLD the Pledged Collateral, together with all right, title, interest, powers, privileges and preferences pertaining or incidental thereto, unto the Collateral Agent, its successors and assigns, for the ratable benefit of the Secured Parties, forever; subject , however , to the terms, covenants and conditions hereinafter set forth (including Section 7.13).

 

 

SECTION 3.02.   Delivery of the Pledged Collateral.   (a)  Each Grantor agrees promptly to deliver or cause to be delivered to the Collateral Agent any and all certificated Pledged Securities.

(b)  Each Grantor will cause any Indebtedness for borrowed money owed to such Grantor by any Person (other than any Subsidiary Parties) in an amount in excess of $250,000 to be evidenced by a duly executed promissory note that is pledged and delivered to the Collateral Agent pursuant to the terms hereof.

(c)  Upon delivery to the Collateral Agent, (i) any Pledged Securities shall be accompanied by stock powers duly executed in blank or other instruments of transfer reasonably satisfactory to the Collateral Agent and by such other instruments and documents as the Collateral Agent may reasonably request and (ii) all other property comprising part of the Pledged Collateral shall be accompanied by proper instruments of assignment duly executed by the applicable Grantor and such other instruments or documents as the Collateral Agent may reasonably request, including as reasonably requested by the Holders of a majority in principal amount of the Notes.  Each delivery of Pledged Securities shall be accompanied by a schedule describing the securities, which schedule shall be attached hereto as Schedule II and made a part hereof; provided, that failure to attach any such schedule hereto shall not affect the validity of such pledge of such Pledged Securities.  Each schedule so delivered shall supplement any prior schedules so delivered.

SECTION 3.03.   Representations, Warranties and Covenants.   The Grantors jointly and severally represent, warrant and covenant to and with the Collateral Agent, for the benefit of the Secured Parties, that:

(a)  Schedule II correctly sets forth the percentage of the issued and outstanding units of each class of the Equity Interests of the issuer thereof represented by such Pledged Stock;

(b)  the Pledged Stock and Pledged Debt Securities have been duly and validly authorized and issued by the issuers thereof and (i) in the case of Pledged Stock, are fully paid and nonassessable, and (ii) in the case of Pledged Debt Securities, are legal, valid and binding obligations of the issuers thereof;

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

 

 

(d)  except for restrictions and limitations imposed by the Indenture Documents or securities laws generally, the Pledged Collateral is and will continue to be freely transferable and assignable, and none of the Pledged Collateral (other than Pledged Collateral representing less than all of the Equity Interests of a Person) is or will be subject to any option, right of first refusal, shareholders agreement, charter or by-law provisions or contractual restriction of any nature that might prohibit, impair, delay or otherwise affect the pledge of such Pledged Collateral hereunder, the sale or disposition thereof pursuant hereto or the exercise by the Collateral Agent of rights and remedies hereunder;

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

(f)  no consent or approval of any Governmental Authority, any securities exchange or any other Person was or is necessary to the validity of the pledge of the Pledged Collateral effected hereby (other than such as have been obtained and are in full force and effect and except with respect to Pledged Collateral in the form of Equity Interests in joint ventures);

(g)  by virtue of the execution and delivery by the Grantors of this Agreement, when any Pledged Securities are delivered to the Collateral Agent in accordance with this Agreement, the Collateral Agent will obtain a legal, valid and perfected first priority lien upon and security interest in such Pledged Securities as security for the payment and performance of the Obligations;

(h)  the pledge effected hereby is effective to vest in the Collateral Agent, for the benefit of the Secured Parties, the rights of the Collateral Agent in the Pledged Collateral as set forth herein; and

(i)  each of the Grantors received adequate consideration in exchange for entering into this Agreement.

SECTION 3.04.   Certification of Limited Liability Company and Limited Partnership Interests.   On the date hereof, no Equity Interest in any limited liability company or limited partnership controlled by any Grantor and pledged hereunder (the “ Existing LLC/Partnership Interests ”) is represented by a certificate.  Each Grantor agrees that (a) if any Existing LLC/Partnership Interest controlled by such Grantor shall become represented by a certificate, it shall cause such certificate to be promptly delivered to the Collateral Agent and shall cause the applicable limited liability company or partnership agreement to be amended so as to treat the Equity Interest represented by such certificate as a “security” within the meaning of Article 8 of the UCC and to provide that such security shall be governed by Article 8 of the UCC and (b) each interest in any limited liability company or partnership acquired by such Grantor after the date hereof shall be represented by a certificate (which shall be promptly delivered to the Collateral Agent after such Grantor’s acquisition thereof), shall be a “security” within the meaning of Article 8 of the UCC and shall be governed by Article 8 of the UCC.

 

 

SECTION 3.05.   Registration in Nominee Name; Denominations.   The Collateral Agent, on behalf of the Secured Parties, shall hold the Pledged Securities in the name of the applicable Grantor, endorsed or assigned in blank or in favor of the Collateral Agent, but following the occurrence and during the continuance of an Event of Default shall have the right (in its sole and absolute discretion) to hold the Pledged Securities in its own name as pledgee, or in the name of its nominee (as pledgee or as sub-agent).  Each Grantor will promptly give to the Collateral Agent copies of any material notices or other communications received by it with respect to Pledged Securities registered in the name of such Grantor.  The Collateral Agent shall promptly deliver such material notices or other communications to the Trustee, who shall mail such notices or communications to each Holder within 90 days following the receipt of such notice or communications.  The Collateral Agent shall at all times have the right to exchange the certificates representing Pledged Securities for certificates of smaller or larger denominations for any reasonable purpose consistent with this Agreement.

SECTION 3.06.   Voting Rights; Dividends and Interest.   (a)  Unless and until an Event of Default shall have occurred and be continuing and the Collateral Agent shall have notified the Grantors that their rights under this Section 3.06 are being suspended (which notice shall be deemed to have been given immediately upon the occurrence of an Event of Default with respect to the Company under Section 6.01(7) and Section 6.01(8) of the Indenture):

 

 

(b)  Upon the occurrence and during the continuance of an Event of Default, after the Collateral Agent shall have notified (or shall be deemed to have notified) the Grantors of the suspension of their rights under paragraph (a)(iii) of this Section 3.06, then all rights of any Grantor to dividends, interest, principal or other distributions that such Grantor is authorized to receive pursuant to paragraph (a)(iii) of this Section 3.06 shall cease, and all such rights shall thereupon become vested in the Collateral Agent, which shall have the sole and exclusive right and authority to receive and retain such dividends, interest, principal or other distributions.  All dividends, interest, principal or other distributions received by any Grantor contrary to the provisions of this Section 3.06 shall be held in trust for the benefit of the Collateral Agent, shall be segregated from other property or funds of such Grantor and shall be forthwith delivered to the Collateral Agent upon demand in the same form as so received (with any necessary endorsement).  Any and all money and other property paid over to or received by the Collateral Agent pursuant to the provisions of this paragraph (b) shall be retained by the Collateral Agent in an account to be established by the Collateral Agent upon receipt of such money or other property and shall be applied in accordance with the provisions of Section 5.02.  After all Events of Default have been cured or waived and the Company has delivered to the Collateral Agent a certificate to that effect, the Collateral Agent shall promptly repay to each Grantor (without interest) all dividends, interest, principal or other distributions that such Grantor would otherwise be permitted to retain pursuant to the terms of paragraph (a)(iii) of this Section 3.06 and that remain in such account.

(c)  Upon the occurrence and during the continuance of an Event of Default, after the Collateral Agent shall have notified (or shall be deemed to have notified) the Grantors of the suspension of their rights under paragraph (a)(i) of this Section 3.06, then all rights of any Grantor to exercise the voting and consensual rights and powers it is entitled to exercise pursuant to paragraph (a)(i) of this Section 3.06, and the obligations of the Collateral Agent under paragraph (a)(ii) of this Section 3.06, shall cease, and all such rights shall thereupon become vested in the Collateral Agent, which shall have the sole and exclusive right and authority to exercise such voting and consensual rights and powers; provided , that the Collateral Agent shall have the right from time to time following and during the continuance of an Event of Default to permit the Grantors to exercise such rights.

 

 

(d)  Any notice given by the Collateral Agent to the Grantors suspending the Grantors’ rights under paragraph (a) of this Section 3.06 (i) may be given by telephone if promptly confirmed in writing, (ii) may be given to one or more of the Grantors at the same or different times and (iii) may suspend the rights of the Grantors under paragraph (a)(i) or paragraph (a)(iii) in part without suspending all such rights (as specified by the Collateral Agent in its sole and absolute discretion) and without waiving or otherwise affecting the Collateral Agent’s rights to give additional notices from time to time suspending other rights so long as an Event of Default has occurred and is continuing.

ARTICLE IV

Security Interests in Personal Property

SECTION 4.01.   Security Interest.   (a)  As security for the payment or performance, as the case may be, in full of the Obligations, each Grantor hereby assigns and pledges to the Collateral Agent, its successors and assigns, for the ratable benefit of the Secured Parties, and hereby grants to the Collateral Agent, its successors and assigns, for the ratable benefit of the Secured Parties, a security interest (the “ Security Interest ”) in, all right, title or interest in or to any and all of the following assets and properties 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, the   “ Article 9 Collateral ”):

(i)

all accounts;

(ii)

all chattel paper;

(iii)

all cash and deposit accounts;

(iv)

all documents;

(v)

all equipment;

(vi)

all General Intangibles;

(vii)

all instruments;

(viii)

all inventory;

(ix)

all investment property;

(x)

all letter-of-credit rights;

 

 

(xi)

all commercial tort claims;

(xii)

all books and records pertaining to the Article 9 Collateral; and

Notwithstanding the foregoing, the Article 9 Collateral shall not include the Excluded Property.

(b)  Each Grantor hereby irrevocably authorizes the Collateral Agent at any time and from time to time to file in any relevant jurisdiction any initial financing statements (including fixture filings) with respect to the Article 9 Collateral or any part thereof and amendments thereto that (i) indicate the Collateral as all assets of such Grantor or words of similar effect and (ii) contain the information required by Article 9 of the Uniform Commercial Code of each applicable jurisdiction for the filing of any financing statement or amendment, including (A) whether such Grantor is an organization, the type of organization and any organizational identification number issued to such Grantor and (B) in the case of a financing statement filed as a fixture filing, a sufficient description of the real property to which such Article 9 Collateral relates.  Each Grantor agrees to provide such information to the Collateral Agent promptly upon request.

Each Grantor also ratifies its authorization for the Collateral Agent to file in any relevant jurisdiction any initial financing statements or amendments thereto if filed prior to the date hereof.

The Collateral Agent is further authorized to file with the United States Patent and Trademark Office or United States Copyright Office (or any successor office or any similar office in any other country) such documents as may be necessary or advisable for the purpose of perfecting, confirming, continuing, enforcing or protecting the Security Interest granted by each Grantor, without the signature of any Grantor, and naming any Grantor or the Grantors as debtors and the Collateral Agent as secured party.  The foregoing rights of the Collateral Agent shall not be construed as a duty of the Collateral Agent, it being expressly understood and agreed that the Grantors shall bear the responsibility of all such filings.

(c)  The Security Interest is granted as security only and shall not subject the Collateral Agent or any other Secured Party to, or in any way alter or modify, any obligation or liability of any Grantor with respect to or arising out of the Article 9 Collateral.

SECTION 4.02.   Representations and Warranties.   The Grantors jointly and severally represent and warrant to the Collateral Agent and the Secured Parties, subject to the last paragraph of this Section 4.02, that:

 

 

(a)  Each Grantor has good and valid rights in and title to the Article 9 Collateral with respect to which it has purported to grant a Security Interest hereunder and has full power and authority to grant to the Collateral Agent the Security Interest in such Article 9 Collateral pursuant hereto and to execute, deliver and perform its obligations in accordance with the terms of this Agreement, without the consent or approval of any other Person other than any consent or approval that has been obtained.

(b)  Uniform Commercial Code financing statements (including fixture filings, as applicable) or other appropriate filings, recordings or registrations containing a description of the Article 9 Collateral prepared by the Collateral Agent based upon the information provided to the Collateral Agent by the Indenture Parties are all the filings, recordings and registrations (other than filings required to be made in the United States Patent and Trademark Office and the United States Copyright Office in order to perfect the Security Interest in Article 9 Collateral consisting of Patents, Trademarks and Copyrights) that are necessary to publish notice of and protect the validity of and to establish a legal, valid and perfected security interest in favor of the Collateral Agent (for the ratable benefit of the Secured Parties) in respect of all Article 9 Collateral in which the Security Interest may be perfected by filing, recording or registration in the United States (or any political subdivision thereof) and its territories and possessions, and no further or subsequent filing, refiling, recording, rerecording, registration or reregistration is necessary in any such jurisdiction, except as provided under applicable law with respect to the filing of continuation statements.  Each Grantor represents and warrants that a fully executed agreement in the form hereof (or a fully executed short-form agreement as reasonably determined by the Indenture Parties) and containing a description of all Article 9 Collateral consisting of Intellectual Property with respect to United States Patents (and Patents for which United States registration applications are pending), United States registered Trademarks (and Trademarks for which United States registration applications are pending) and United States registered Copyrights (and all pending registrations therefor) has been delivered to the Collateral Agent for recording by the United States Patent and Trademark Office and the United States Copyright Office pursuant to 35 U.S.C. § 261, 15 U.S.C. § 1060 or 17 U.S.C. § 205 and the regulations thereunder, as applicable, to protect the validity of and to establish a legal, valid and perfected security interest in favor of the Collateral Agent (for the ratable benefit of the Secured Parties) in respect of all Article 9 Collateral consisting of Patents, Trademarks and Copyrights in which a security interest may be perfected by filing, recording or registration in the United States (or any political subdivision thereof) and its territories and possessions, and no further or subsequent filing, refil