EXHIBIT 4.2
EXECUTION COPY
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COLLATERAL AGREEMENT
dated as of
May 30, 2003,
among
INTERNATIONAL WIRE HOLDING COMPANY,
INTERNATIONAL WIRE GROUP, INC.
THE SUBSIDIARIES OF
INTERNATIONAL WIRE GROUP, INC.
IDENTIFIED HEREIN
and
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
as Collateral Agent
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TABLE OF CONTENTS
ARTICLE I
Definitions
SECTION 1.01. Indenture ........................................................... 1
SECTION 1.02. Other Defined Terms ................................................. 1
ARTICLE II
Pledge of Securities
SECTION 2.01. Pledge .............................................................. 6
SECTION 2.02. Delivery of the Pledged Collateral .................................. 6
SECTION 2.03. Representations, Warranties and Covenants ........................... 7
SECTION 2.04. Certification of Limited Liability Company and Limited Partnership
Interests ........................................................ 8
SECTION 2.05. Registration in Nominee Name; Denominations ......................... 8
SECTION 2.06. Voting Rights; Dividends and Interest ............................... 8
ARTICLE III
Security Interests in Personal Property
SECTION 3.01. Security Interest ................................................... 10
SECTION 3.02. Representations and Warranties ...................................... 12
SECTION 3.03. Covenants ........................................................... 14
SECTION 3.04. Other Actions ....................................................... 17
SECTION 3.05. Covenants Regarding Patent, Trademark and Copyright Collateral ...... 19
SECTION 3.06. Lockbox System ...................................................... 21
SECTION 3.07. Collections ......................................................... 22
ARTICLE IV
Remedies
SECTION 4.01. Remedies Upon Default ............................................... 23
SECTION 4.02. Application of Proceeds ............................................. 24
SECTION 4.03. Grant of License to Use Intellectual Property ....................... 25
SECTION 4.04. Securities Act ...................................................... 25
SECTION 4.05. Registration ........................................................ 26
ARTICLE V
Indemnity, Subrogation and Subordination
SECTION 5.01. Indemnity and Subrogation ........................................... 27
SECTION 5.02. Contribution and Subrogation ........................................ 27
SECTION 5.03. Subordination ....................................................... 28
ARTICLE VI
Miscellaneous
SECTION 6.01. Notices ............................................................. 28
SECTION 6.02. Waivers; Amendment .................................................. 28
SECTION 6.03. Collateral Agent's Fees and Expenses; Indemnification ............... 29
SECTION 6.04. Successors and Assigns .............................................. 32
SECTION 6.05. Survival of Agreement ............................................... 32
SECTION 6.06. Counterparts; Effectiveness; Several Agreement ...................... 32
SECTION 6.07. Severability ........................................................ 33
SECTION 6.08. Right of Set-Off .................................................... 33
SECTION 6.09. Governing Law; Jurisdiction; Consent to Service of Process .......... 33
SECTION 6.10. WAIVER OF JURY TRIAL ................................................ 34
SECTION 6.11. Headings ............................................................ 34
SECTION 6.12. Security Interest Absolute .......................................... 34
SECTION 6.13. Termination or Release .............................................. 35
SECTION 6.14. Additional Subsidiaries ............................................. 35
SECTION 6.15. Collateral Agent Appointed Attorney-in-Fact ......................... 35
Schedules
Schedule I Subsidiary Parties
Schedule II Capital Stock; Debt Securities
Schedule III Intellectual Property
Schedule IV Mortgaged Properties
Exhibits
Exhibit I Form of Supplement
Exhibit II Form of Perfection Certificate
COLLATERAL AGREEMENT dated as of May 30,
2003, among International Wire Holding Company,
International Wire Group, Inc., the Subsidiary
Parties identified herein and Xxxxx Fargo Bank
Minnesota, National Association, as Collateral Agent.
WHEREAS, pursuant to the terms, conditions and provisions of
(a) the Indenture dated as of the date hereof (as amended, restated,
supplemented or otherwise modified from time to time, the "Indenture"), among
the Company and Xxxxx Fargo Bank Minnesota, National Association, as trustee
(the "Trustee"), and (b) the Purchase Agreement dated as of May 30, 2003 (the
"Purchase Agreement"), among the Company and Credit Suisse First Boston LLC (the
"Initial Purchaser") the Company is issuing $82,000,000 aggregate principal
amount of 10.375 % Senior Secured Notes due February 28, 2005 and may issue,
from time to time, additional notes in accordance with the provisions of the
Indenture (collectively, the "Notes") which will be guaranteed on a senior
secured basis by each of the Guarantors. Holdings and the Subsidiary Parties are
affiliates of the Company, will derive substantial benefits from the execution
of the Indenture and the issuance of Notes by the Issuer pursuant to the
Purchase Agreement and are willing to execute and deliver this Agreement in
order to induce the Trustee to enter into the Indenture and the Initial
Purchaser to purchase the Notes. Accordingly, the parties hereto agree as
follows:
ARTICLE I
Definitions
SECTION 1.01. Indenture. 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.
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 3.01.
"Collateral" means Article 9 Collateral and Pledged
Collateral.
"Collateral Obligations" means the due and punctual payment of
the principal of and interest on the Notes when and as the same shall be due and
payable, whether on an interest payment date, at maturity, by acceleration,
repurchase, redemption or otherwise, and interest on the overdue principal of
and interest on the Notes and performance of all other Security Obligations of
the Indenture Parties to the Holders or
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the Trustee or the Collateral Agent under the Indenture, the Notes, this
Agreement and the other Indenture Documents.
"Collection Deposit Account" means a lockbox account of a
Grantor maintained for the benefit of the Secured Parties with the Collateral
Agent or a Sub-Agent pursuant to a Lockbox Agreement.
"Company" means International Wire Group, Inc.
"Concentration Account" means the cash collateral account
established at the office of Xxxxx Fargo Bank Minnesota, National Association,
in the name of the Collateral Agent, for purposes of this Agreement.
"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.
"Effective Date" means May 30, 2003.
"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.
"Federal Securities Laws" has the meaning assigned to such
term in Section 4.04.
"General Fund Account" means the general fund account
established at the office of Xxxxx Fargo Bank Minnesota, National Association,
in the name of the Company.
"General Intangibles" means 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
corporate or other business records, indemnification claims, contract rights
(including rights under leases, whether entered into as lessor or lessee,
Hedging Obligations 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.
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"Grantors" means Holdings, the Company and the Subsidiary
Parties.
"Holdings" means International Wire Holding Company.
"Indenture" has the meaning assigned to such term in the
preliminary statement of this Agreement.
"Indenture Documents" means (a) the Indenture, the Notes, and
the Security Documents and (b) any other related documents or instruments
executed and delivered pursuant to the Indenture or any Security Document.
"Indenture Parties" means Holdings, the Company and the
Subsidiary Parties.
"Initial Purchaser" has the meaning assigned to such term in
the preliminary statement of this Agreement.
"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.
"Lockbox Agreement" means a Lockbox and Depository Agreement
in a form approved by the Collateral Agent, among a Grantor, the Collateral
Agent and a Sub-Agent.
"Lockbox System" has the meaning assigned to such term in
Section 3.06(a).
"Mortgaged Property" means, initially, each parcel of real
property and the improvements thereto owned by any Indenture Party and
identified on Schedule IV hereto, and includes each other parcel of real
property and improvements thereto with respect to which a Mortgage is granted
pursuant to Section 4.11 or 4.12 of the Indenture.
"
New York UCC" means the Uniform Commercial Code as from time
to time in effect in the State of
New York.
"Notes" has the meaning assigned to such term in the
preliminary statement of this Agreement.
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"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.
"Perfection Certificate" means a certificate substantially in
the form of Exhibit II, completed and supplemented with the schedules and
attachments contemplated thereby, and duly executed by an Officer of the
Company.
"Pledged Collateral" has the meaning assigned to such term in
Section 2.01.
"Pledged Debt Securities" has the meaning assigned to such
term in Section 2.01.
"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 2.01.
"Proceeds" has the meaning specified in Section 9-102 of the
New York UCC.
"Purchase Agreement" has the meaning assigned to such term in
the preliminary statement of this Agreement.
"Secured Parties" means (a) the Trustee, (b) the Collateral
Agent, (c) each Holder, (d) the beneficiaries of each indemnification obligation
undertaken by any Indenture Party under any Indenture Document and (e) the
successors and assigns of each of the foregoing.
"Security Documents" means this Agreement, the Mortgages, the
Lockbox Agreements, any agreements pursuant to which assets are added to the
Collateral and any other instruments or documents entered into and delivered in
connection with any of the
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foregoing, as such agreements, instruments or documents may from time to time be
amended.
"Security Interest" has the meaning assigned to such term in
Section 3.01.
"Sub-Agent" means a financial institution that has delivered
to the Collateral Agent an executed Lockbox Agreement.
"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 Effective Date.
"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.
SECTION 1.03. Rules of Interpretation. The definitions of
terms herein shall apply equally to the singular and plural forms of the terms
defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words "include",
"includes" and "including" shall be deemed to be followed by the phrase "without
limitation". The word "will" shall be construed to have the same meaning and
effect as the word "shall". Unless the context requires otherwise (a) any
definition of or reference to any agreement, instrument or other document herein
shall be construed as referring to such agreement, instrument or other document
as from time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such
Person's successors and assigns, (c) the words "herein", "hereof" and
"hereunder", and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words "asset" and "property" shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible
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assets and properties, including cash, securities, accounts and contract rights.
ARTICLE II
Pledge of Securities
SECTION 2.01. Pledge. As security for the payment or
performance, as the case may be, in full of the Collateral 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 and listed on Schedule II and any other Equity Interests
obtained in the future by such Grantor and the certificates representing all
such Equity Interests (the "Pledged Stock"); provided that the Pledged Stock
shall not include more than 65% of the issued and outstanding voting Equity
Interests of any Foreign Subsidiary; (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 2.01; (d) subject to Section 2.06, 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
2.06, 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.
SECTION 2.02. Delivery of the Pledged Collateral. (a) Each
Grantor agrees promptly to deliver or cause to be delivered to the Collateral
Agent any and all Pledged Securities.
(a) Each Grantor will cause any Indebtedness for borrowed
money in principal amount exceeding $1,000,000 owed to such Grantor by any
Person to be evidenced by a duly executed promissory note that is pledged and
delivered to the Collateral Agent pursuant to the terms hereof.
(b) 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
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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. 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 2.03. Representations, Warranties and Covenants. The
Grantors jointly and severally represent, warrant and covenant to and with the
Collateral Agent, for the benefit of the Secured Parties, that:
(a) Schedule II correctly sets forth the percentage of the
issued and outstanding shares of each class of the Equity Interests of
the issuer thereof represented by such Pledged Stock and includes all
Equity Interests, debt securities and promissory notes required to be
pledged hereunder;
(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, (ii) in
the case of Pledged Debt Securities issued to a Grantor by Affiliates
of any Grantor, are legal, valid and binding obligations of the issuers
thereof and (iii) in the case of Pledged Debt Securities issued to a
Grantor by Persons other than Affiliates of any Grantor, are, to the
knowledge of any Grantor, 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 permitted under
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, Permitted Liens and transfers
permitted under 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, Permitted Liens and transfers permitted
under 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 Permitted Liens), 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 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
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Collateral hereunder, the sale or disposition thereof pursuant hereto
or the exercise by the Collateral Agent of rights and remedies
hereunder;
(e) each of the Grantors has the power and authority to pledge
the Pledged Collateral pledged by it hereunder in the manner hereby
done or contemplated;
(f) 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 effected hereby (other than such as have been
obtained and are in full force and effect);
(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 lien upon and security
interest in such Pledged Securities as security for the payment and
performance of the Collateral Obligations; and
(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.
SECTION 2.04. Certification of Limited Liability Company and
Limited Partnership Interests. To the extent that the Collateral Agent
reasonably requests, each interest in any limited liability company or limited
partnership controlled by any Grantor and pledged hereunder shall be represented
by a certificate, shall be a "security" within the meaning of Article 8 of the
New York UCC and shall be governed by Article 8 of the
New York UCC.
SECTION 2.05. Registration in Nominee Name; Denominations. The
Collateral Agent, on behalf of the Secured Parties, shall have the right (in its
reasonable discretion) to hold the Pledged Securities in its own name as
pledgee, the name of its nominee (as pledgee or as sub-agent) or the name of the
applicable Grantor, endorsed or assigned in blank or in favor of the Collateral
Agent. Each Grantor will promptly give to the Collateral Agent copies of any
material notices or other material communications received by it with respect to
Pledged Securities registered in the name of such Grantor. 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
purpose consistent with this Agreement.
SECTION 2.06. 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 2.06 are being suspended:
(i) Each Grantor shall be entitled to exercise any and all
voting and/or other consensual rights and powers inuring to an owner of
Pledged Securities or any part thereof for any purpose consistent with
the terms of this Agreement, the Indenture and the other Indenture
Documents; provided that such rights and powers shall not be exercised
in any manner that could materially and adversely
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affect the rights inuring to a holder of any Pledged Securities or the
rights and remedies of any of the Collateral Agent or the other Secured
Parties under this Agreement or the Indenture or any other Indenture
Document or the ability of the Secured Parties to exercise the same.
(ii) The Collateral Agent shall execute and deliver to each
Grantor, or cause to be executed and delivered to such Grantor, all
such proxies, powers of attorney and other instruments as such Grantor
may reasonably request for the purpose of enabling such Grantor to
exercise the voting and/or consensual rights and powers it is entitled
to exercise pursuant to subparagraph (i) above.
(iii) Each Grantor shall be entitled to receive and retain any
and all dividends, interest, principal and other distributions paid on
or distributed in respect of the Pledged Securities to the extent and
only to the extent that such dividends, interest, principal and other
distributions are permitted by, and otherwise paid or distributed in
accordance with, the terms and conditions of the Indenture, the other
Indenture Documents and applicable laws; provided that any noncash
dividends, interest, principal or other distributions that would
constitute Pledged Stock or Pledged Debt Securities, whether resulting
from a subdivision, combination or reclassification of the outstanding
Equity Interests of the issuer of any Pledged Securities or received in
exchange for Pledged Securities or any part thereof, or in redemption
thereof, or as a result of any merger, consolidation, acquisition or
other exchange of assets to which such issuer may be a party or
otherwise, shall be and become part of the Pledged Collateral, and, if
received by any Grantor, shall not be commingled by such Grantor with
any of its other funds or property but shall be held separate and apart
therefrom, shall be held in trust for the benefit of the Collateral
Agent and shall be forthwith delivered to the Collateral Agent in the
same form as so received (with any necessary endorsement).
(b) Upon the occurrence and during the continuance of an Event
of Default, after the Collateral Agent shall have notified the Grantors of the
suspension of their rights under paragraph (a)(iii) of this Section 2.06, 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 2.06 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 2.06 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 4.02. 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
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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 2.06 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 the Grantors of the
suspension of their rights under paragraph (a)(i) of this Section 2.06, 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 2.06, and
the obligations of the Collateral Agent under paragraph (a)(ii) of this Section
2.06, 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, unless the
Collateral Agent shall have received written objections from Holders of at least
25% in principal amount of the Notes, 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 their rights under paragraph (a) of this Section 2.06 (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 III
Security Interests in Personal Property
SECTION 3.01. Security Interest. (a) As security for the
payment or performance, as the case may be, in full of the Collateral
Obligations, each Grantor hereby assigns and pledges to the Collateral Agent,
its successors and assigns, for the benefit of the Secured Parties, and hereby
grants to the Collateral Agent, its successors and assigns, for the 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 Deposit Accounts;
(iv) all Documents;
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(v) all Equipment;
(vi) all General Intangibles;
(vii) all Instruments;
(viii) all Inventory;
(ix) all Investment Property;
(x) Letter-of-Credit rights;
(xi) commercial tort claim filed by the Company pursuant to
that certain lawsuit filed in the United States District Court
for the Southern District of Texas, Galveston Division,
International Wire Group, Inc. vs. National Union Fire
Insurance Company of Pittsburgh, PA; AIG Technical Services,
Inc; Xxxxxx, Xxxxxxx & Xxxxxxx, L.L.P., Xxxx X. Xxxxx and
Xxxxxx X. Xxxxxx, Case No. G03-233;
(xii) all books and records pertaining to the Article 9
Collateral;
(xiii) to the extent not otherwise included, all Proceeds and
products of any and all of the foregoing and all collateral
security and guarantees given by any Person with respect to
any of the foregoing; and
(xiv) all cash or cash equivalents received by the Trustee or
the Collateral Agent on behalf of the Trustee pursuant to
Article 12 of the Indenture.
Notwithstanding the foregoing, "Collateral" shall not include any
Grantor's right, title or interest in the cash collateral securing certain
letters of credit as described under the section "Use of Proceeds" in the
confidential offering circular dated May 29, 2003 with respect to the initial
issuance of the Notes as well as, to the extent not already included therein,
the cash collateral described in clause (11) of the definition of the term
"Permitted Liens" in the Indenture.
(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 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 or covering Article
9 Collateral constituting minerals or the like to be extracted or timber to be
cut, 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.
12
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, in the reasonable opinion of the Collateral Agent,
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.
(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 3.02. Representations and Warranties. The Grantors
jointly and severally represent and warrant to the Collateral Agent and the
Secured Parties 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) The Perfection Certificate has been duly prepared,
completed and executed and the information set forth therein, including the
exact legal name of each Grantor, is correct and complete as of the Effective
Date. The Uniform Commercial Code financing statements (including fixture
filings, as applicable) or other appropriate filings, recordings or
registrations prepared and filed, recorded or registered by the Grantors based
upon the information provided to the Collateral Agent in the Perfection
Certificate for filing in each governmental, municipal or other office specified
in Schedule 1 or Schedule 2 to the Perfection Certificate 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 0 Xxxxxxxxxx xxxxxxxxxx xx
Xxxxxx Xxxxxx 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 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 and containing a description of all
Article 9 Collateral
13
consisting of Intellectual Property shall have been delivered to the Collateral
Agent on or before the Effective Date and recorded by such Grantor with respect
to United States Patents and United States registered Trademarks (and Trademarks
for which United States registration applications are pending) and with respect
to United States registered Copyrights for recording by the United States Patent
and Trademark Office and the United States Copyright Office pursuant to 35
U.S.C. Section 261, 15 U.S.C. Section 1060 or 17 U.S.C. Section 205 and the
regulations thereunder, as applicable, and otherwise as may be required pursuant
to the laws of any other necessary jurisdiction, to protect the validity of and
to establish a legal, valid and perfected security interest in favor of the
Collateral Agent (for the benefit of the Secured Parties) in respect of all
Article 9 Collateral 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, refiling, recording,
rerecording, registration or reregistration is necessary (other than such
actions as are necessary to perfect the Security Interest with respect to any
Article 9 Collateral consisting of Patents, Trademarks and Copyrights (or
registration or application for registration thereof) acquired or developed
after the date hereof).
(c) The Security Interest constitutes (i) a legal and valid
security interest in all the Article 9 Collateral securing the payment and
performance of the Collateral Obligations, (ii) subject to the filings described
in Section 3.02(b), a perfected security interest in all Article 9 Collateral in
which a security interest may be perfected by filing, recording or registering a
financing statement or analogous document in the United States (or any political
subdivision thereof) and its territories and possessions pursuant to the Uniform
Commercial Code or other applicable law in such jurisdictions and (iii) a
security interest that shall be perfected in all Article 9 Collateral in which a
security interest may be perfected upon the receipt and recording of this
Agreement with the United States Patent and Trademark Office and the United
States Copyright Office, as applicable, within the three-month period
(commencing as of the date hereof) pursuant to 35 U.S.C. Section 261 or 15
U.S.C. Section 1060 or the one month period (commencing as of the date hereof)
pursuant to 17 U.S.C. Section 205 and otherwise as may be required pursuant to
the laws of any other necessary jurisdiction. The Security Interest is and shall
be prior to any other Lien on any of the Article 9 Collateral, other than those
Permitted Liens that have priority as a matter of law.
(d) The Article 9 Collateral is owned by the Grantors free and
clear of any Lien, except for Permitted Liens. None of the Grantors has filed or
consented to the filing of (i) any financing statement or analogous document
under the Uniform Commercial Code or any other applicable laws covering any
Article 9 Collateral, (ii) any assignment in which any Grantor assigns any
Collateral or any security agreement or similar instrument covering any Article
9 Collateral with the United States Patent and Trademark Office or the United
States Copyright Office or (iii) any assignment in which any Grantor assigns any
Article 9 Collateral or any security agreement or similar instrument covering
any Article 9 Collateral with any foreign governmental, municipal or other
office, which financing statement or analogous document, assignment, security
agreement or similar instrument is still in effect, except, in each case, for
Permitted Liens.
14
SECTION 3.03. Covenants. (a) Each Grantor agrees promptly to
notify the Collateral Agent in writing of any change (i) in its corporate name,
(ii) in the location of its chief executive office, (iii) in its identity or
type of organization or corporate structure, (iv) in its Federal Taxpayer
Identification Number or organizational identification number or (v) in its
jurisdiction of organization. Each Grantor agrees to promptly provide the
Collateral Agent with certified organizational documents reflecting any of the
changes described in the first sentence of this paragraph. Each Grantor agrees
not to effect or permit any change referred to in the preceding sentence unless
all filings have been made by such Grantor under the Uniform Commercial Code or
otherwise that are required in order for the Collateral Agent to continue at all
times following such change to have a valid, legal and perfected first priority
security interest in all the Article 9 Collateral. Each Grantor agrees promptly
to notify the Collateral Agent if any material portion of the Article 9
Collateral owned or held by such Grantor is damaged or destroyed.
(a) Each Grantor agrees to maintain, at its own cost and
expense, such complete and accurate records with respect to the Article 9
Collateral owned by it as is consistent with its current practices and in
accordance with such prudent and standard practices used in industries that are
the same as or similar to those in which such Grantor is engaged, but in any
event to include complete accounting records indicating all payments and
proceeds received with respect to any part of the Article 9 Collateral, and, at
such time or times as the Collateral Agent may reasonably request, promptly to
prepare and deliver to the Collateral Agent a duly certified schedule or
schedules in form and detail satisfactory to the Collateral Agent showing the
identity, amount and location of any and all Article 9 Collateral.
(b) The Company shall deliver to the Collateral Agent on or
before May 15th in each year beginning with May 15, 2004, an Officers'
Certificate of the Company (a) setting forth the information required pursuant
to the Perfection Certificate or confirming that there has been no change in
such information since the date of such certificate or the date of the most
recent certificate delivered pursuant to this Section 3.03(c) and (b) certifying
that all Uniform Commercial Code financing statements (including fixture
filings, as applicable) or other appropriate filings, recordings or
registrations, including all refilings, rerecordings and reregistrations,
containing a description of the Collateral have been filed of record in each
governmental, municipal or other appropriate office in each jurisdiction
identified pursuant to clause (a) of this Section 3.03 to the extent necessary
to protect and perfect the Security Interest for a period of not less than 18
months after the date of such certificate (except as noted therein with respect
to any continuation statements to be filed within such period). Each certificate
delivered pursuant to this Section 3.03(c) shall identify in the format of
Schedule III all Intellectual Property of any Grantor in existence on the date
thereof and not then listed on such Schedules or previously so identified to the
Collateral Agent.
(c) Each Grantor shall, at its own expense, take any and all
actions necessary to defend title to the Article 9 Collateral against all
Persons and to defend the Security Interest of the Collateral Agent in the
Article 9 Collateral and the priority thereof against any Lien other than those
Permitted Liens which have priority as a matter of law.
15
Each Grantor agrees, at its own expense, to execute,
acknowledge, deliver and cause to be duly filed all such further instruments and
documents and take all actions, including such actions as the Collateral Agent
may from time to time reasonably request, to better assure, create, preserve,
protect, perfect and enforce the Security Interest and the rights and remedies
created hereby, including the payment of any fees and taxes required in
connection with the execution and delivery of this Agreement, the granting of
the Security Interest and the filing of any financing statements (including
fixture filings) or other documents in connection herewith or therewith. To the
extent that any Grantor fails to take any action required in the preceding
sentence, the Collateral Agent is irrevocably authorized and empowered, with
full power of substitution, to execute, acknowledge and deliver such security
documents, instruments, certificates, notices and other documents and, subject
to the provisions of the Security Documents, take such other actions in the
name, place and stead of such Grantor; provided that the Collateral Agent will
have no obligation to act in the foregoing manner and no liability for any
action taken or omitted by it in good faith in connection therewith. If any
principal amount payable in excess of $1,000,000 under or in connection with any
of the Article 9 Collateral shall be or become evidenced by any promissory note
or other instrument, such note or instrument shall be promptly pledged and
delivered to the Collateral Agent, duly endorsed in a manner reasonably
satisfactory to the Collateral Agent.
Without limiting the generality of the foregoing, each Grantor
hereby authorizes the Collateral Agent, with prompt notice thereof to the
Grantors, to supplement this Agreement by supplementing Schedule III or adding
additional schedules hereto to specifically identify any asset or item that may
constitute Copyrights, Licenses, Patents or Trademarks; provided that any
Grantor shall have the right, exercisable within 20 days after it has been
notified by the Collateral Agent of the specific identification of such
Collateral, to advise the Collateral Agent in writing of any inaccuracy of the
representations and warranties made by such Grantor hereunder with respect to
such Collateral. Each Grantor agrees that it will use its reasonable best
efforts to take such action as shall be necessary in order that all
representations and warranties hereunder shall be true and correct with respect
to such Collateral within 30 days after the date it has been notified by the
Collateral Agent of the specific identification of such Collateral.
(d) Upon reasonable prior notice, the Collateral Agent and
such Persons as the Collateral Agent may reasonably designate shall have, at
such reasonable times and as often as reasonably requested, the right to inspect
the Article 9 Collateral (provided that only one inspection during each fiscal
year of the Company shall be at the Grantors' own cost and expense, provided,
however, that if an Event of Default has occurred and is continuing, all
inspections during the continuance of such Event of Default shall be at the
Grantors' own cost and expense), all records related thereto (and to make
extracts and copies from such records) and the premises upon which any of the
Article 9 Collateral is located, to discuss the Grantors' affairs with the
officers of the Grantors and their independent accountants (provided that the
Grantors shall have been afforded the opportunity to participate in any such
discussion with their independent accountants) and to verify under reasonable
procedures, the validity, amount, quality, quantity, value, condition and status
of, or any other matter relating to, the Article 9 Collateral, including, in the
case of Accounts or Article 9 Collateral in the possession of any third person,
by
16
contacting Account Debtors or the third person possessing such Article 9
Collateral for the purpose of making such a verification. The Collateral Agent
shall have the absolute right to share any information it gains from such
inspection or verification with any Secured Party.
(e) At its option, during the continuance of an Event of
Default, the Collateral Agent may discharge past due taxes, assessments,
charges, fees, Liens, security interests or other encumbrances at any time
levied or placed on the Article 9 Collateral and not permitted under the
Indenture, and may pay for the maintenance and preservation of the Article 9
Collateral to the extent any Grantor fails to do so as required by the Indenture
or this Agreement, and each Grantor jointly and severally agrees to reimburse
the Collateral Agent on demand for any payment made or any expense incurred by
the Collateral Agent pursuant to the foregoing authorization; provided that
nothing in this paragraph shall be interpreted as excusing any Grantor from the
performance of, or imposing any obligation on the Collateral Agent or any
Secured Party to cure or perform, any covenants or other promises of any Grantor
with respect to taxes, assessments, charges, fees, Liens, security interests or
other encumbrances and maintenance as set forth herein or in the other Indenture
Documents.
(f) [Intentionally reserved.]
(g) Each Grantor shall remain liable to observe and perform
all the conditions and obligations to be observed and performed by it under each
contract, agreement or instrument relating to the Article 9 Collateral, all in
accordance with the terms and conditions thereof, and each Grantor jointly and
severally agrees to indemnify and hold harmless the Collateral Agent and the
Secured Parties from and against any and all liability for such performance.
(h) None of the Grantors shall make or permit to be made an
assignment, pledge or hypothecation of the Article 9 Collateral or shall grant
any other Lien in respect of the Article 9 Collateral, except as permitted by
the Indenture. None of the Grantors shall make or permit to be made any transfer
of the Article 9 Collateral and each Grantor shall remain at all times in
possession of the Article 9 Collateral owned by it, except that unless and until
the Collateral Agent shall notify the Grantors that an Event of Default shall
have occurred and be continuing and that during the continuance thereof the
Grantors shall not sell, convey, lease, assign, transfer or otherwise dispose of
any Article 9 Collateral (which notice may be given by telephone if promptly
confirmed in writing), the Grantors may use and dispose of the Article 9
Collateral in any lawful manner not inconsistent with the provisions of this
Agreement, the Indenture or any other Indenture Document. Without limiting the
generality of the foregoing, each Grantor agrees that it shall not permit any
Inventory having a value exceeding $1,000,000 to be in the possession or control
of any warehouseman, agent, bailee, or processor at any time unless such
warehouseman, bailee, agent or processor shall have been notified of the
Security Interest and shall have acknowledged in writing, in form and substance
reasonably satisfactory to the Collateral Agent, that such warehouseman, agent,
bailee or processor holds the Inventory for the benefit of the Collateral Agent
subject to the Security Interest and shall act upon the instructions of the
Collateral Agent without further consent from the Grantor.
17
(i) None of the Grantors will, without the Collateral Agent's
prior written consent, grant any extension of the time of payment of any
Accounts included in the Article 9 Collateral, compromise, compound or settle
the same for less than the full amount thereof, release, wholly or partly, any
Person liable for the payment thereof or allow any credit or discount whatsoever
thereon, other than extensions, compromises, settlements, releases, credits or
discounts granted or made in the ordinary course of business and consistent with
its current practices and in accordance with such prudent and standard practice
used in industries that are the same as or similar to those in which such
Grantor is engaged.
(j) The Grantors, at their own expense, shall maintain or
cause to be maintained insurance covering physical loss or damage to the
Inventory and Equipment with financially sound and reputable insurance companies
in such amounts (with no greater risk retention) and against such risks as are
customarily maintained by companies of established repute engaged in the same or
similar businesses operating in the same or similar location. Each Grantor
irrevocably makes, constitutes and appoints the Collateral Agent (and all
officers, employees or agents designated by the Collateral Agent) as such
Grantor's true and lawful agent (and attorney-in-fact) for the purpose, during
the continuance of an Event of Default, of making, settling and adjusting claims
in respect of Article 9 Collateral under policies of insurance, endorsing the
name of such Grantor on any check, draft, instrument or other item of payment
for the proceeds of such policies of insurance and for making all determinations
and decisions with respect thereto. In the event that any Grantor at any time or
times shall fail to obtain or maintain any of the policies of insurance required
hereby or to pay any premium in whole or part relating thereto, the Collateral
Agent may, without waiving or releasing any obligation or liability of the
Grantors hereunder or any Event of Default, in its sole discretion, obtain and
maintain such policies of insurance and pay such premium and take any other
actions with respect thereto as the Collateral Agent deems advisable. All sums
disbursed by the Collateral Agent in connection with this paragraph, including
reasonable attorneys' fees, court costs, expenses and other charges relating
thereto, shall be payable, upon demand, by the Grantors to the Collateral Agent
and shall be additional Collateral Obligations secured hereby.
(k) Each Grantor shall maintain, in form and manner reasonably
satisfactory to the Collateral Agent, records of its Chattel Paper and its
books, records and documents evidencing or pertaining thereto.
SECTION 3.04. Other Actions. In order to further insure the
attachment, perfection and priority of, and the ability of the Collateral Agent
to enforce, the Security Interest, each Grantor agrees, in each case at such
Grantor's own expense, to take the following actions with respect to the
following Article 9 Collateral:
(a) Instruments. If any Grantor shall at any time hold or
acquire any Instruments, such Grantor shall forthwith endorse, assign
and deliver the same to the Collateral Agent, accompanied by such
instruments of transfer or assignment duly executed in blank as the
Collateral Agent may from time to time reasonably request; provided,
that the Grantors shall not be required to deliver any
18
Instruments to the Collateral Agent unless the individual or aggregate
amount evidenced on all Instruments, not yet delivered to the
Collateral Agent, exceeds $1,000,000.
(b) [Intentionally reserved.]
(c) Investment Property. Except to the extent otherwise
provided in Article III, if any Grantor shall at any time hold or
acquire any certificated securities that either (i) have an aggregate
value exceeding $1,000,000, or (ii) are certificated securities issued
by any Indenture Party, such Grantor shall forthwith endorse, assign
and deliver the same to the Collateral Agent, accompanied by such
instruments of transfer or assignment duly executed in blank as the
Collateral Agent may from time to time specify. If any securities now
or hereafter acquired from an issuer by any Grantor are uncertificated,
are issued to such Grantor or its nominee directly by such issuer and
have a value exceeding $1,000,000, such Grantor shall promptly notify
the Collateral Agent thereof and, at the Collateral Agent's request and
option, pursuant to an agreement in form and substance reasonably
satisfactory to the Collateral Agent, either (i) cause the issuer to
agree to comply with instructions from the Collateral Agent as to such
securities, without further consent of any Grantor or such nominee, or
(ii) arrange for the Collateral Agent to become the registered owner of
the securities. If any securities, whether certificated or
uncertificated, or other investment property now or hereafter acquired
by any Grantor, which, individually or in the aggregate, have a value
exceeding $1,000,000, are held by such Grantor or its nominee through a
securities intermediary or commodity intermediary, such Grantor shall
promptly notify, the Collateral Agent thereof and, at the Collateral
Agent's request and option, pursuant to an agreement in form and
substance reasonably satisfactory to the Collateral Agent, either (i)
cause such securities intermediary or (as the case may be) commodity
intermediary to agree to comply with entitlement orders or other
instructions from the Collateral Agent to such securities intermediary
as to such security entitlements, or (as the case may be) to apply any
value distributed on account of any commodity contract as directed by
the Collateral Agent to such commodity intermediary, in each case
without further consent of any Grantor or such nominee, or (ii) in the
case of financial assets or other investment property held through a
securities intermediary, arrange for the Collateral Agent to become the
entitlement holder with respect to such investment property, with the
Grantor being permitted to exercise rights to withdraw or otherwise
deal with such investment property unless an Event of Default has
occurred and is continuing. The Collateral Agent agrees with each of
the Grantors that the Collateral Agent shall not give any such
entitlement orders or instructions or directions to any such issuer,
securities intermediary or commodity intermediary, and shall not
withhold its consent to the exercise of any withdrawal or dealing
rights by any Grantor, unless an Event of Default has occurred and is
continuing, or, after giving effect to any such investment and
withdrawal rights would occur. The provisions of this paragraph shall
not apply to any financial assets credited to a securities account for
which the Collateral Agent is the securities intermediary.
19
Electronic Chattel Paper and Transferable Records. If any
Grantor at any time holds or acquires an interest in any electronic
chattel paper or any "transferable record," as that term is defined in
Section 201 of the Federal Electronic Signatures in Global and National
Commerce Act, or in Section 16 of the Uniform Electronic Transactions
Act as in effect in any relevant jurisdiction, which has a value,
individually or in the aggregate, exceeding $1,000,000, such Grantor
shall promptly notify the Collateral Agent thereof and, at the request
of the Collateral Agent, shall take such action as the Collateral Agent
may reasonably request to vest in the Collateral Agent control under
New York UCC Section 9-105 of such electronic chattel paper or control
under Section 201 of the Federal Electronic Signatures in Global and
National Commerce Act or, as the case may be, Section 16 of the Uniform
Electronic Transactions Act, as so in effect in such jurisdiction, of
such transferable record. The Collateral Agent agrees with such Grantor
that the Collateral Agent will arrange, pursuant to procedures
reasonably satisfactory to the Collateral Agent and so long as such
procedures will not result in the Collateral Agent's loss of control,
for the Grantor to make alterations to such electronic chattel paper or
transferable record permitted under UCC Section 9-105 or, as the case
may be, Section 201 of the Federal Electronic Signatures in Global and
National Commerce Act or Section 16 of the Uniform Electronic
Transactions Act for a party in control to allow without loss of
control, unless an Event of Default has occurred and is continuing or
would occur after taking into account any action by such Grantor with
respect to such electronic chattel paper or transferable record.
(d) Letter-of-Credit Rights. If any Grantor is at any time a
beneficiary under a letter of credit now or hereafter issued in favor
of such Grantor with an undrawn face amount exceeding $1,000,000, such
Grantor shall promptly notify the Collateral Agent thereof and, at the
request and option of the Collateral Agent, such Grantor shall,
pursuant to an agreement in form and substance reasonably satisfactory
to the Collateral Agent, either (i) arrange for the issuer and any
confirmer of such letter of credit to consent to an assignment to the
Collateral Agent of the proceeds of any drawing under the letter of
credit or (ii) arrange for the Collateral Agent to become the
transferee beneficiary of the letter of credit, with the Collateral
Agent agreeing, in each case, that the proceeds of any drawing under
the letter of credit are to be paid to the applicable Grantor unless an
Event of Default has occurred or is continuing.
(e) Commercial Tort Claims. If any Grantor shall at any time
hold or acquire a commercial tort claim in an amount reasonably
estimated to exceed $3,000,000, the Grantor shall promptly notify the
Collateral Agent thereof in a writing signed by such Grantor including
a summary description of such claim and grant to the Collateral Agent
in such writing a security interest therein and in the proceeds
thereof, all upon the terms of this Agreement, with such writing to be
in form and substance reasonably satisfactory to the Collateral Agent.
SECTION 3.05. Covenants Regarding Patent, Trademark and
Copyright Collateral. (a) Each Grantor agrees that it will not, do any act or
omit to do any act (and
20
will exercise commercially reasonable efforts to prevent its licensees from
doing any act as omitting to do any act) whereby any Patent that is material to
the conduct of such Grantor's business may become invalidated or dedicated to
the public, and agrees that it shall continue to xxxx any products covered by a
Patent with the relevant patent number as necessary and sufficient to establish
and preserve its rights under applicable patent laws.
(a) Each Grantor (either itself or through its licensees or
its sublicensees) will, for each Trademark material to the conduct of such
Grantor's business, (i) maintain such Trademark in full force free from any
claim of abandonment or invalidity for non-use, (ii) maintain the quality of
products and services offered under such Trademark, (iii) display such Trademark
with notice of Federal or foreign registration to the extent necessary and
sufficient to establish and preserve its rights under applicable law and (iv)
not knowingly use or knowingly permit the use of such Trademark in violation of
any third party rights.
(b) Each Grantor (either itself or through its licensees or
sublicensees) will, for each work covered by a material Copyright, continue to
publish, reproduce, display, adopt and distribute the work with appropriate
copyright notice as necessary and sufficient to establish and preserve its
rights under applicable copyright laws.
(c) Each Grantor shall notify the Collateral Agent promptly if
it knows or has reason to know that any Patent, Trademark or Copyright material
to the conduct of its business may become abandoned, lost or dedicated to the
public, or of any materially adverse determination or development (including the
institution of, or any such determination or development in, any proceeding in
the United States Patent and Trademark Office, United States Copyright Office or
any court or similar office of any country) regarding such Grantor's ownership
of any Patent, Trademark or Copyright, its right to register the same, or its
right to keep and maintain the same.
(d) In no event shall any Grantor, either itself or through
any agent, employee, licensee or designee, file an application for any Patent,
Trademark or Copyright (or for the registration of any Trademark or Copyright)
with the United States Patent and Trademark Office, United States Copyright
Office or any office or agency in any political subdivision of the United States
or in any other country or any political subdivision thereof, unless it promptly
informs the Collateral Agent, and executes and delivers any and all agreements,
instruments, documents and papers, including such documents and papers as the
Collateral Agent may reasonably request, to evidence the Collateral Agent's
security interest in such Patent, Trademark or Copyright, and each Grantor
hereby agrees to execute and file such writings for the foregoing purposes, and
also appoints the Collateral Agent as its attorney-in-fact to execute and file
such writings for the foregoing purposes, all acts of such attorney being hereby
ratified and confirmed; such power, being coupled with an interest, is
irrevocable.
(e) Each Grantor will take all necessary steps that are
consistent with the practice in any proceeding before the United States Patent
and Trademark Office, United States Copyright Office or any office or agency in
any political subdivision of the United
21
States or in any other country or any political subdivision thereof, to maintain
and pursue each material application relating to the Patents, Trademarks and/or
Copyrights (and to obtain the relevant grant or registration) and to maintain
each issued Patent and each registration of the Trademarks and Copyrights that
is material to the conduct of any Grantor's business, including timely filings
of applications for renewal, affidavits of use, affidavits of incontestability
and payment of maintenance fees, and, if consistent with good business judgment,
to initiate opposition, interference and cancelation proceedings against third
parties.
(f) In the event that any Grantor has reason to believe that
any Article 9 Collateral consisting of a Patent, Trademark or Copyright material
to the conduct of any Grantor's business has been or is about to be infringed,
misappropriated or diluted by a third party in a manner which could adversely
affect the conduct of such Grantor's business, such Grantor promptly shall
notify the Collateral Agent and shall, if consistent with good business
judgment, promptly xxx for infringement, misappropriation or dilution and to
recover any and all damages for such infringement, misappropriation or dilution,
and take such other actions as are appropriate under the circumstances to
protect such Article 9 Collateral.
(g) Upon and during the continuance of an Event of Default,
each Grantor shall use its reasonable best efforts to obtain all requisite
consents or approvals by the licensor of each Copyright License, Patent License
or Trademark License to effect the assignment of all such Grantor's right, title
and interest thereunder to the Collateral Agent or its designee.
SECTION 3.06. Lockbox System. (a) Within 30 days after the
Effective Date, the Grantors shall establish in the name of the Collateral
Agent, and subject to the control of the Collateral Agent pursuant to the
Lockbox Agreements, for the ratable benefit of the Collateral Agent and the
other Secured Parties, a system of lockboxes and related deposit accounts (the
"Lockbox System") with one or more financial institutions that are reasonably
satisfactory to the Collateral Agent into which the Proceeds of all Accounts and
Inventory shall be deposited and forwarded to the Collateral Agent in accordance
with the Lockbox Agreements.
(a) All Proceeds of Inventory and Accounts that have been
received on any Business Day through the Lockbox System will be transferred into
the Concentration Account on such Business Day to the extent required by the
applicable Lockbox Agreement. All Proceeds stemming from the sale of a
substantial portion of the Collateral (other than Proceeds of Inventory and
Accounts) that have been received by a Grantor on any Business Day will be
transferred into the Concentration Account on such Business Day if received
before 2:00 p.m. (
New York time), or if received after such time, the following
Business Day. All Proceeds received on any Business Day by the Collateral Agent
pursuant to Section 3.07 will be transferred into the Concentration Account on
such Business Day.
(b) The Concentration Account is, and shall remain, under the
sole dominion and control of the Collateral Agent. Each Grantor acknowledges and
agrees that
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(i) such Grantor has no right of withdrawal from the Concentration Account, (ii)
the funds on deposit in the Concentration Account shall continue to be
collateral security for all of the Collateral Obligations and (iii) upon the
occurrence and during the continuance of an Event of Default, at the Collateral
Agent's election, the funds on deposit in the Concentration Account may be
applied as provided in Section 4.02. So long as no Event of Default has occurred
and is continuing, the Collateral Agent shall promptly remit any funds on
deposit in the Concentration Account to the General Fund Account and the Company
shall have the right, at any time and from time to time, to withdraw such
amounts from the General Fund Account as it shall deem to be necessary or
desirable.
(c) Effective upon notice to the Grantors from the Collateral
Agent after the occurrence and during the continuance of an Event of Default
(which notice may be given by telephone if promptly confirmed in writing), the
Concentration Account will, without any further action on the part of any
Grantor, the Collateral Agent or any Sub-Agent, convert into a closed lockbox
account under the exclusive dominion and control of the Collateral Agent in
which funds are held subject to the rights of the Collateral Agent hereunder.
Each Grantor irrevocably authorizes the Collateral Agent to notify each
Sub-Agent (i) of the occurrence of an Event of Default and (ii) of the matters
referred to in this paragraph (d). Following the occurrence of an Event of
Default, the Collateral Agent may instruct each Sub-Agent to transfer
immediately all funds held in each deposit account to the Concentration Account.
Each Grantor hereby agrees to irrevocably direct each Sub-Agent to comply with
the instructions of the Collateral Agent with respect to the relevant Collection
Deposit Account without further consent from the Grantor or any other Person.
SECTION 3.07. Collections. (a) Each Grantor agrees (i) within
thirty (30) days after the Effective Date, to notify and direct promptly each
Account Debtor and every other Person obligated to make payments on Accounts or
in respect of any Inventory to make all such payments directly to the Lockbox
System established in accordance with Section 3.06, (ii) to use all reasonable
efforts to cause each Account Debtor and every other Person identified in clause
(i) above to make all payments with respect to Accounts and Inventory directly
to the Lockbox System and (iii) promptly to deposit all payments received by it
on account of Accounts and Inventory, whether in the form of cash, checks,
notes, drafts, bills of exchange, money orders or otherwise, in the Lockbox
System in precisely the form in which received (but with any endorsements of
such Grantor necessary for deposit or collection), and until they are so
deposited such payments shall be held in trust by such Grantor for and as the
property of the Collateral Agent.
(a) Without the prior written consent of the Collateral Agent,
no Grantor shall, in a manner adverse to the Holders, change the general
instructions given to Account Debtors in respect of payment on Accounts to be
deposited in the Lockbox System. Until the Collateral Agent shall have advised
the Grantors to the contrary, each Grantor shall, and the Collateral Agent
hereby authorizes each Grantor to, enforce and collect all amounts owing on the
Inventory and Accounts, for the benefit and on behalf of the Collateral Agent
and the other Secured Parties; provided that such privilege may at the
23
option of the Collateral Agent be terminated upon the occurrence and during the
continuance of any Event of Default.
ARTICLE IV
Remedies
SECTION 4.01. Remedies Upon Default. Upon the occurrence and
during the continuance of an Event of Default, each Grantor agrees to deliver
each item of Collateral to the Collateral Agent on demand, and it is agreed that
the Collateral Agent shall have the right to take any of or all the following
actions at the same or different times: (a) with respect to any Article 9
Collateral consisting of Intellectual Property, on demand, to cause the Security
Interest to become an assignment, transfer and conveyance of any of or all such
Article 9 Collateral by the applicable Grantors to the Collateral Agent, or to
license or sublicense, whether general, special or otherwise, and whether on an
exclusive or nonexclusive basis, any such Article 9 Collateral throughout the
world on such terms and conditions and in such manner as the Collateral Agent
shall determine (other than in violation of any applicable law or any
then-existing licensing arrangements to the extent that waivers cannot be
obtained), and (b) with or without legal process and with or without prior
notice or demand for performance, to take possession of the Article 9 Collateral
and without liability for trespass to enter any premises where the Article 9
Collateral may be located for the purpose of taking possession of or removing
the Article 9 Collateral and, generally, to exercise any and all rights afforded
to a secured party under the Uniform Commercial Code or other applicable law.
Without limiting the generality of the foregoing, each Grantor agrees that the
Collateral Agent shall have the right, subject to the mandatory requirements of
applicable law, to sell or otherwise dispose of all or any part of the
Collateral at a public or private sale or at any broker's board or on any
securities exchange, for cash, upon credit or for future delivery as the
Collateral Agent shall deem appropriate. The Collateral Agent shall be
authorized at any such sale of securities (if it deems it advisable to do so) to
restrict the prospective bidders or purchasers to Persons who will represent and
agree that they are purchasing the Collateral for their own account for
investment and not with a view to the distribution or sale thereof, and upon
consummation of any such sale the Collateral Agent shall have the right to
assign, transfer and deliver to the purchaser or purchasers thereof the
Collateral so sold. Each such purchaser at any sale of Collateral shall hold the
property sold absolutely, free from any claim or right on the part of any
Grantor, and each Grantor hereby waives (to the extent permitted by law) all
rights of redemption, stay and appraisal which such Grantor now has or may at
any time in the future have under any rule of law or statute now existing or
hereafter enacted.
The Collateral Agent shall give the applicable Grantors 10
days' written notice (which each Grantor agrees is reasonable notice within the
meaning of Section 9-611 of the
New York UCC or its equivalent in other
jurisdictions) of the Collateral Agent's intention to make any sale of
Collateral. Such notice, in the case of a public sale, shall state the time and
place for such sale and, in the case of a sale at a broker's board or on a
securities exchange, shall state the board or exchange at which such sale is to
be made and the day on which the Collateral, or portion thereof, will first
24
be offered for sale at such board or exchange. Any such public sale shall be
held at such time or times within ordinary business hours and at such place or
places as the Collateral Agent may fix and state in the notice (if any) of such
sale. At any such sale, the Collateral, or portion thereof, to be sold may be
sold in one lot as an entirety or in separate parcels, as the Collateral Agent
may (in its sole and absolute discretion) determine. The Collateral Agent shall
not be obligated to make any sale of any Collateral if it shall determine not to
do so, regardless of the fact that notice of sale of such Collateral shall have
been given. The Collateral Agent may, without notice or publication, adjourn any
public or private sale or cause the same to be adjourned from time to time by
announcement at the time and place fixed for sale, and such sale may, without
further notice, be made at the time and place to which the same was so
adjourned. In case any sale of all or any part of the Collateral is made on
credit or for future delivery, the Collateral so sold may be retained by the
Collateral Agent until the sale price is paid by the purchaser or purchasers
thereof, but the Collateral Agent shall not incur any liability in case any such
purchaser or purchasers shall fail to take up and pay for the Collateral so sold
and, in case of any such failure, such Collateral may be sold again upon like
notice. At any public (or, to the extent permitted by law, private) sale made
pursuant to this Agreement, any Secured Party may bid for or purchase, free (to
the extent permitted by law) from any right of redemption, stay, valuation or
appraisal on the part of any Grantor (all said rights being also hereby waived
and released to the extent permitted by law), the Collateral or any part thereof
offered for sale and may make payment on account thereof by using any claim then
due and payable to such Secured Party from any Grantor as a credit against the
purchase price, and such Secured Party may, upon compliance with the terms of
sale, hold, retain and dispose of such property without further accountability
to any Grantor therefor. For purposes hereof, a written agreement to purchase
the Collateral or any portion thereof shall be treated as a sale thereof; the
Collateral Agent shall be free to carry out such sale pursuant to such agreement
and no Grantor shall be entitled to the return of the Collateral or any portion
thereof subject thereto, notwithstanding the fact that after the Collateral
Agent shall have entered into such an agreement all Events of Default shall have
been remedied and the Collateral Obligations paid in full. As an alternative to
exercising the power of sale herein conferred upon it, the Collateral Agent may
proceed by a suit or suits at law or in equity to foreclose this Agreement and
to sell the Collateral or any portion thereof pursuant to a judgment or decree
of a court or courts having competent jurisdiction or pursuant to a proceeding
by a court-appointed receiver. Any sale pursuant to the provisions of this
Section 4.01 shall be deemed to conform to the commercially reasonable standards
as provided in Section 9-610(b) of the New York UCC or its equivalent in other
jurisdictions.
SECTION 4.02. Application of Proceeds. The Collateral Agent
shall apply the proceeds of any collection or sale of Collateral, including any
Collateral consisting of cash, as follows:
FIRST, to the payment of all costs and expenses incurred by
the Trustee or the Collateral Agent in connection with such collection
or sale or otherwise in connection with this Agreement, any other
Indenture Document or any of the Collateral Obligations, including all
court costs, the fees and expenses of its
25
agents and the reasonable fees and expenses of its legal counsel, the
repayment of all advances made by the Trustee or the Collateral Agent
hereunder or under any other Indenture Document on behalf of any
Grantor and any other costs or expenses incurred in connection with the
exercise of any right or remedy hereunder or under any other Indenture
Document and any other amounts due to the Trustee or the Collateral
Agent under Section 7.07 of the Indenture;
SECOND, to the payment in full of the Collateral Obligations
owed to the Holders (the amounts so applied to be distributed among the
Holders pro rata in accordance with the amounts of the Collateral
Obligations owed to Holders on the date of any such distribution); and
THIRD, to the Grantors, their successors or assigns, or as a
court of competent jurisdiction may otherwise direct.
The Collateral Agent shall have absolute discretion as to the time of
application of any such proceeds, moneys or balances in accordance with this
Agreement. Upon any sale of Collateral by the Collateral Agent (including
pursuant to a power of sale granted by statute or under a judicial proceeding),
the receipt of the Collateral Agent or of the officer making the sale shall be a
sufficient discharge to the purchaser or purchasers of the Collateral so sold
and such purchaser or purchasers shall not be obligated to see to the
application of any part of the purchase money paid over to the Collateral Agent
or such officer or be answerable in any way for the misapplication thereof.
SECTION 4.03. Grant of License to Use Intellectual Property.
For the purpose of enabling the Collateral Agent to exercise rights and remedies
under this Agreement at such time as the Collateral Agent shall be lawfully
entitled to exercise such rights and remedies, each Grantor hereby grants to the
Collateral Agent, to the extent such Grantor may do so under applicable
contractual restrictions, an irrevocable, nonexclusive license (exercisable
without payment of royalty or other compensation to the Grantors) to use,
license or sublicense any of the Article 9 Collateral consisting of Intellectual
Property now owned or hereafter acquired by such Grantor, and wherever the same
may be located, and including in such license reasonable access to all media in
which any of the licensed items may be recorded or stored and to all computer
software and programs used for the compilation or printout thereof. The use of
such license by the Collateral Agent may be exercised, at the option of the
Collateral Agent, upon the occurrence and during the continuation of an Event of
Default; provided that any license, sublicense or other transaction entered into
by the Collateral Agent in accordance herewith shall be binding upon the
Grantors notwithstanding any subsequent cure of an Event of Default.
SECTION 4.04. Securities Act. In view of the position of the
Grantors in relation to the Pledged Collateral, or because of other current or
future circumstances, a question may arise under the Securities Act of 1933, as
now or hereafter in effect, or any similar statute hereafter enacted analogous
in purpose or effect (such Act and any such similar statute as from time to time
in effect being called the "Federal Securities Laws") with respect to any
disposition of the Pledged Collateral permitted hereunder. Each
26
Grantor understands that compliance with the Federal Securities Laws might very
strictly limit the course of conduct of the Collateral Agent if the Collateral
Agent were to attempt to dispose of all or any part of the Pledged Collateral,
and might also limit the extent to which or the manner in which any subsequent
transferee of any Pledged Collateral could dispose of the same. Similarly, there
may be other legal restrictions or limitations affecting the Collateral Agent in
any attempt to dispose of all or part of the Pledged Collateral under applicable
Blue Sky or other state securities laws or similar laws analogous in purpose or
effect. Each Grantor recognizes that in light of such restrictions and
limitations the Collateral Agent may, with respect to any sale of the Pledged
Collateral, limit the purchasers to those who will agree, among other things, to
acquire such Pledged Collateral for their own account, for investment, and not
with a view to the distribution or resale thereof. Each Grantor acknowledges and
agrees that in light of such restrictions and limitations, the Collateral Agent,
in its sole and absolute discretion (a) may proceed to make such a sale whether
or not a registration statement for the purpose of registering such Pledged
Collateral or part thereof shall have been filed under the Federal Securities
Laws and (b) may approach and negotiate with a single potential purchaser to
effect such sale. Each Grantor acknowledges and agrees that any such sale might
result in prices and other terms less favorable to the seller than if such sale
were a public sale without such restrictions. In the event of any such sale, the
Collateral Agent shall incur no responsibility or liability for selling all or
any part of the Pledged Collateral at a price that the Collateral Agent, in its
sole and absolute discretion, may in good xxxxx xxxx reasonable under the
circumstances, notwithstanding the possibility that a substantially higher price
might have been realized if the sale were deferred until after registration as
aforesaid or if more than a single purchaser were approached. The provisions of
this Section 4.04 will apply notwithstanding the existence of a public or
private market upon which the quotations or sales prices may exceed
substantially the price at which the Collateral Agent sells.
SECTION 4.05. Registration. Each Grantor agrees that, upon the
occurrence and during the continuance of an Event of Default, if for any reason
the Collateral Agent desires to sell any of the Pledged Collateral at a public
sale, it will, at any time and from time to time, upon the written request of
the Collateral Agent, use its reasonable best efforts to take or to cause the
issuer of such Pledged Collateral to take such action and prepare, distribute
and/or file such documents, as are required or advisable in the reasonable
opinion of counsel for the Collateral Agent to permit the public sale of such
Pledged Collateral. Each Grantor further agrees to indemnify, defend and hold
harmless the Collateral Agent, each other Secured Party, any underwriter and
their respective officers, directors, affiliates and controlling persons from
and against all loss, liability, expenses, costs of counsel (including, without
limitation, reasonable fees and expenses to the Collateral Agent of legal
counsel), and claims (including the costs of investigation) that they may incur
insofar as such loss, liability, expense or claim arises out of or is based upon
any alleged untrue statement of a material fact contained in any prospectus (or
any amendment or supplement thereto) or in any notification or offering
circular, or arises out of or is based upon any alleged omission to state a
material fact required to be stated therein or necessary to make the statements
in any thereof not misleading, except insofar as the same may have been caused
by any untrue statement or omission based upon information furnished in writing
to such Grantor or the issuer of
27
such Pledged Collateral by the Collateral Agent or any other Secured Party
expressly for use therein. Each Grantor further agrees, upon such written
request referred to above, to use its reasonable efforts to qualify, file or
register, or cause the issuer of such Pledged Collateral to qualify, file or
register, any of the Pledged Collateral under the Blue Sky or other securities
laws of such states as may be requested by the Collateral Agent and keep
effective, or cause to be kept effective, all such qualifications, filings or
registrations. Each Grantor will bear all costs and expenses of carrying out its
obligations under this Section 4.05. Each Grantor acknowledges that there is no
adequate remedy at law for failure by it to comply with the provisions of this
Section 4.05 and that such failure would not be adequately compensable in
damages, and therefore agrees that its agreements contained in this Section 4.05
may be specifically enforced.
ARTICLE V
Indemnity, Subrogation and Subordination
SECTION 5.01. Indemnity and Subrogation. In addition to all
such rights of indemnity and subrogation as the Guarantors may have under
applicable law (but subject to Section 5.03), the Company agrees that (a) in the
event a payment of an obligation shall be made by any Guarantor under Section
10.01 of the Indenture, the Company shall indemnify such Guarantor for the full
amount of such payment and such Guarantor shall be subrogated to the rights of
the Person to whom such payment shall have been made to the extent of such
payment and (b) in the event any assets of any Grantor shall be sold pursuant to
this Agreement or any other Security Document to satisfy in whole or in part an
obligation owed to any Secured Party, the Company shall indemnify such Grantor
in an amount equal to the greater of the book value or the fair market value of
the assets so sold.
SECTION 5.02. Contribution and Subrogation. Each Guarantor and
Grantor (a "Contributing Party") agrees (subject to Section 5.03) that, in the
event a payment shall be made by any other Guarantor under the Indenture or
hereunder in respect of any Obligation or that assets of any other Grantor shall
be sold pursuant to any Security Document to satisfy any Obligation owed to any
Secured Party and such other Guarantor or Grantor (the "Claiming Party") shall
not have been fully indemnified by the Company as provided in Section 5.01, the
Contributing Party shall indemnify the Claiming Party in an amount equal to the
amount of such payment or the greater of the book value or the fair market value
of such assets, as the case may be, in each case multiplied by a fraction of
which the numerator shall be the net worth of the Contributing Party on the date
hereof and the denominator shall be the aggregate net worth of all the
Guarantors and Grantors on the date hereof (or, (a) in the case of any Guarantor
becoming a party to the Indenture pursuant to Section 4.12 of the Indenture, the
date of the supplement to the Indenture executed and delivered by such Guarantor
or, (b) in the case of any Grantor becoming a party hereto pursuant to Section
6.14, the date of the supplement hereto executed and delivered by such Grantor).
Any Contributing Party making any payment to a Claiming Party pursuant to this
Section 5.02 shall be subrogated to the rights of such Claiming Party under
Section 5.01 to the extent of such payment.
28
SECTION 5.03. Subordination. (a) Notwithstanding any provision
of this Agreement to the contrary, all rights of the Guarantors and Grantors
under Sections 5.01 and 5.02 and all other rights of indemnity, contribution or
subrogation under applicable law or otherwise shall be fully subordinated to the
indefeasible payment in full in cash of the Collateral Obligations. No failure
on the part of the Company or any Guarantor or Grantor to make the payments
required by Sections 5.01 and 5.02 (or any other payments required under
applicable law or otherwise) shall in any respect limit the obligations and
liabilities of any Guarantor or Grantor with respect to its obligations under
the Indenture or hereunder, and each Guarantor and Grantor shall remain liable
for the full amount of the obligations of such Guarantor or Grantor under the
Indenture or hereunder.
(a) Each Guarantor and Grantor hereby agrees that all
Indebtedness and other monetary obligations owed by it to any other Guarantor,
Grantor or any other Subsidiary shall be fully subordinated to the indefeasible
payment in full in cash of the Collateral Obligations.
ARTICLE VI
Miscellaneous
SECTION 6.01. Notices. All communications and notices
hereunder shall (except as otherwise expressly permitted herein) be in writing
and given as provided in Section 13.02 of the Indenture. All communications and
notices hereunder to any Subsidiary Party shall be given to it in care of the
Company as provided in Section 13.02 of the Indenture.
SECTION 6.02. Waivers; Amendment. (a) No failure or delay by
the Collateral Agent, the Trustee or any Holder in exercising any right or power
hereunder or under any other Indenture Document shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Collateral Agent, the Trustee and
the Holders hereunder and under the other Indenture Documents are cumulative and
are not exclusive of any rights or remedies that they would otherwise have. No
waiver of any provision of this Agreement or consent to any departure by any
Indenture Party therefrom shall in any event be effective unless the same shall
be permitted by paragraph (b) of this Section 6.02, and then such waiver or
consent shall be effective only in the specific instance and for the purpose for
which given. No notice or demand on any Indenture Party in any case shall
entitle any Indenture Party to any other or further notice or demand in similar
or other circumstances.
(a) Neither this Agreement nor any provision hereof may be
waived, amended or modified except in accordance with the Indenture, pursuant to
an agreement or agreements in writing entered into by the Collateral Agent and
the Indenture Party or Indenture Parties with respect to which such waiver,
amendment or modification is to apply.
29
SECTION 6.03. Collateral Agent's Fees and Expenses;
Indemnification. (a) Each Grantor and Guarantor jointly and severally agrees to
pay upon demand to the Collateral Agent the amount of any and all reasonable
expenses, including the reasonable fees, disbursements and other charges of its
counsel and of any experts or agents, which the Collateral Agent may incur in
connection with (i) the administration of this Agreement, (ii) the custody or
preservation of, or the sale of, collection from or other realization upon any
of the Collateral, (iii) the exercise, enforcement or protection of any rights
of the Collateral Agent hereunder or (iv) the failure of any Grantor or any
Guarantor to perform or observe any of the provisions hereof applicable to it.
(a) Without limitation of its indemnification obligations
under the other Indenture Documents, each Grantor and Guarantor jointly and
severally agrees to indemnify the Collateral Agent, the Trustee, the Holders and
each Affiliate of the foregoing Persons (each such Person being called an
"Indemnitee") against, and hold each Indemnitee harmless from, any and all
losses, claims, damages, liabilities and related expenses, including the fees,
charges and disbursements of any counsel for any Indemnitee, incurred by or
asserted against any Indemnitee arising out of, in connection with, or as a
result of, the execution, delivery or performance of this Agreement or any
claim, litigation, investigation or proceeding relating to any of the foregoing
agreement or instrument contemplated hereby, or to the Collateral, whether or
not any Indemnitee is a party thereto; provided that such indemnity shall not,
as to any Indemnitee, be available to the extent that such losses, claims,
damages, liabilities or related expenses are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or wilful misconduct of such Indemnitee.
(b) Any such amounts payable as provided hereunder shall be
additional Collateral Obligations secured hereby and by the other Security
Documents. The provisions of this Section 6.03 shall remain operative and in
full force and effect regardless of the termination of this Agreement or any
other Indenture Document, the consummation of the transactions contemplated
hereby, the repayment of any of the Collateral Obligations, the invalidity or
unenforceability of any term or provision of this Agreement or any other
Indenture Document, or any investigation made by or on behalf of the Collateral
Agent or any other Secured Party. All amounts due under this Section 6.03 shall
be payable on written demand therefor.
(c) The Collateral Agent shall not be responsible in any
manner whatsoever for the correctness of any recitals, statements,
representations or warranties contained herein. The Collateral Agent makes no
representation as to the value or condition of the Collateral or any part
thereof, as to the title of any Grantor to the Collateral, as to the security
afforded by this Agreement or any other Security Document or as to the validity,
execution, enforceability, legality or sufficiency of this Agreement or any
Security Document, and the Collateral Agent shall incur no liability or
responsibility in respect of any such matters. Except as may be expressly
provided in any Security Document, the Collateral Agent shall not be responsible
for insuring the Collateral, for the payment of taxes, charges, assessments or
liens upon the Collateral or otherwise as to the maintenance of the Collateral,
except as provided in the immediately following sentence when the Collateral
Agent has possession of the Collateral. The Collateral Agent shall have no duty
30
to the Grantors or to the holders of the Notes as to any Collateral in its
possession or control or in the possession or control of any agent or nominee of
the Collateral Agent or any income thereon or as to the preservation of rights
against prior parties or any other rights pertaining thereto, except the duty to
accord such of the Collateral as may be in its possession substantially the same
care as it accords its own assets and the duty to account for monies received by
it. The Collateral Agent shall have no obligations to file any UCC financing
statements or UCC continuation statements except at the written direction of the
Grantors or the Trustee and upon receipt of such statements completed and in a
proper form for filing provided to the Collateral Agent at least five Business
Days in advance of any requested filing date. The Collateral Agent shall have no
obligations to file any document with any foreign or domestic patent, trademark
or copyright office, or any foreign governmental, municipal or other office. The
Collateral Agent shall not be responsible for the consequences of any oversight
or error of judgment whatsoever, except that the Collateral Agent shall be
liable for losses due to its wilful misconduct, gross negligence or bad faith.
The Collateral Agent shall not be required to ascertain or inquire as to the
performance by any Grantor of any of the covenants or agreements contained
herein or in the Indenture, the Notes or the Security Documents. Neither the
Collateral Agent nor any officer, agent or representative thereof shall be
personally liable for any action taken or omitted to be taken by any such person
in connection with this Agreement or any other Security Document except for such
person's own gross negligence, willful misconduct or bad faith. The Collateral
Agent may execute any of the powers granted under this Agreement or any of the
other Security Documents and perform any duty hereunder or thereunder either
directly or by or through agents or attorneys-in-fact, and shall not be
responsible for the misconduct of any agents or attorneys-in-fact selected by it
with due care.
(d) Subject to any additional requirements provided herein or
in the Indenture, in the performance of its duties under this
Collateral
Agreement the Collateral Agent shall deem it necessary or desirable that a
matter be proved or established with respect to any Person in connection with
the taking, suffering or omitting of any action hereunder by the Collateral
Agent, such matter may be conclusively deemed to be proved or established by a
certificate executed by an officer of such Person, and absent gross negligence,
wilful misconduct or bad faith, the Collateral Agent shall have no liability
with respect to any action taken, suffered or omitted in reliance thereon.
(e) The Collateral Agent may consult with counsel and, in the
absence of bad faith, shall be fully protected in taking any action hereunder in
accordance with any advice of such counsel. The Collateral Agent shall have the
right but not the obligation at any time to seek instructions concerning the
administration of this Agreement, the duties created hereunder or any of the
Collateral from any court of competent jurisdiction.
(f) The Collateral Agent shall be fully protected in relying
upon any resolution, statement, certificate, instrument, opinion, report,
notice, request, consent, order or other paper or document which it believes to
be genuine and to have been signed or presented by the proper party or parties.
In the absence of its gross negligence, willful misconduct or bad faith the
Collateral Agent may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any certificate or
31
opinions furnished to the Collateral Agent in connection with this Agreement and
the other Security Documents.
(g) The Collateral Agent shall not be deemed to have actual,
constructive, direct or indirect notice or knowledge of the occurrence of any
Event of Default unless and until the Collateral Agent shall have received a
written notice of Event of Default. The Collateral Agent shall have no
obligation whatsoever either prior to or after receiving such a notice of Event
of Default to inquire whether an Event of Default has, in fact, occurred and
shall be entitled to rely conclusively, and shall be fully protected in so
relying, on any certificate so furnished to it and shall have no obligation to
take or omit to take any action with respect to such notice of Event of Default.
(h) If any dispute or disagreement shall arise as to the
allocation of any sum of money received by the Collateral Agent hereunder, under
the Indentures or under any Security Document, the Collateral Agent shall have
the right to deliver such sum to a court of competent jurisdiction and therein
commence an action for interpleader.
(i) A resignation or removal of the Collateral Agent and
appointment of a successor Collateral Agent shall become effective only upon the
successor Collateral Agent's acceptance of appointment as provided in this
Section 6.03.
(i) The Collateral Agent may resign in writing at any time by
so notifying the Grantors and the Trustee and will thereafter be discharged from
the duties created hereby upon the effectiveness of the Collateral Agent's
resignation pursuant to subclause (iv) below. The Grantors or the Trustee may
remove the Collateral Agent if:
(A) the Collateral Agent is adjudged a bankrupt or an
insolvent or an order for relief is entered with respect to the
Collateral Agent under Title 11, U.S. Code or any similar federal
or state law for the relief of debtors;
(B) a custodian or public officer takes charge of the
Collateral Agent or its property; or
(C) the Collateral Agent becomes incapable of acting.
(ii) If the Collateral Agent resigns or is removed or if a
vacancy exists in the office of Collateral Agent for any reason, the Trustee
shall promptly appoint a successor Collateral Agent.
(iii) If a successor Collateral Agent does not take office
within 60 days after the retiring Collateral Agent resigns or is removed, the
retiring Collateral Agent may petition any court of competent jurisdiction for
the appointment of a successor Collateral Agent.
(iv) A successor Collateral Agent shall deliver a written
acceptance of its appointment to the retiring Collateral Agent, the Indenture
Trustee and the Grantors. Thereupon, the resignation or removal of the retiring
Collateral Agent shall become effective, and the successor Collateral Agent
shall have all the rights, powers and duties
32
of the Collateral Agent under this
Collateral Agreement. The successor
Collateral Agent shall mail a notice of its succession to the Indenture Trustee.
The retiring Collateral Agent shall promptly transfer all property held by it as
Collateral Agent to the successor Collateral Agent, provided all sums owing to
the Collateral Agent hereunder have been paid. Notwithstanding replacement of
the Collateral Agent pursuant to this Section 6.03, the Grantor's obligations
under Sections 6.03(a), (b) and (c) hereof shall continue for the benefit of the
retiring Collateral Agent, and the Grantors shall pay to any such replaced or
removed Collateral Agent all amounts owed to such replaced or removed Collateral
Agent under Sections 6.03(a), (b) and (c) hereof upon such replacement or
removal.
SECTION 6.04. Successors and Assigns. Whenever in this
Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the permitted successors and assigns of such party; and all
covenants, promises and agreements by or on behalf of any Guarantor, Grantor or
the Collateral Agent that are contained in this Agreement shall bind and inure
to the benefit of their respective successors and assigns.
SECTION 6.05. Survival of Agreement. All covenants,
agreements, representations and warranties made by the Indenture Parties in the
Indenture Documents and in the certificates or other instruments prepared or
delivered in connection with or pursuant to this Agreement or any other
Indenture Document shall be considered to have been relied upon by the Holders
and shall survive the execution and delivery of the Indenture Documents and the
purchase of the Notes by the Initial Purchaser, regardless of any investigation
made by any Holder or on its behalf and notwithstanding that the Collateral
Agent, the Trustee or any Holder may have had notice or knowledge of any Default
or incorrect representation or warranty and shall continue in full force and
effect as long as any Obligation remains unpaid.
SECTION 6.06. Counterparts; Effectiveness; Several Agreement.
This Agreement may be executed in counterparts, each of which shall constitute
an original but all of which when taken together shall constitute single
contract, and shall become effective as provided in this Section 6.06. Delivery
of an executed signature page to this Agreement by facsimile transmission shall
be as effective as delivery of a manually signed counterpart of this Agreement.
This Agreement shall become effective as to any Indenture Party when a
counterpart hereof executed on behalf of such Indenture Party shall have been
delivered to the Collateral Agent and a counterpart hereof shall have been
executed on behalf of the Collateral Agent, and thereafter shall be binding upon
such Indenture Party and the Collateral Agent and their respective permitted
successors and assigns, and shall inure to the benefit of such Indenture Party,
the Collateral Agent and the other Secured Parties and their respective
successors and assigns, except that no Indenture Party shall have the right to
assign or transfer its rights or obligations hereunder or any interest herein or
in the Collateral (and any such assignment or transfer shall be void) except as
expressly contemplated by this Agreement or the Indenture. This Agreement shall
be construed as a separate agreement with respect to each Indenture Party and
may be amended, modified, supplemented, waived or released with respect to
33
any Indenture Party without the approval of any other Indenture Party and
without affecting the obligations of any other Indenture Party hereunder.
SECTION 6.07. Severability. Any provision of this Agreement
held to be invalid, illegal or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such invalidity, illegality
or unenforceability without affecting the validity, legality and enforceability
of the remaining provisions hereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction. The parties shall endeavor in good-faith negotiations to replace
the invalid, illegal or unenforceable provisions with valid provisions the
economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
SECTION 6.08. Right of Set-Off. If an Event of Default shall
have occurred and be continuing, each Holder is hereby authorized at any time
and from time to time, to the fullest extent permitted by law, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other obligations at any time owing by such Holder
to or for the credit or the account of any Subsidiary Party against any of and
all the obligations of such Subsidiary Party now or hereafter existing under
this agreement owed to such Holder, irrespective of whether or not such Holder
shall have made any demand under this Agreement and although such obligations
may be unmatured. The rights of each Holder under this Section 6.08 are in
addition to other rights and remedies (including other rights of set-off) which
such Holder may have.
SECTION 6.09. Governing Law; Jurisdiction; Consent to Service
of Process. (a) This Agreement shall be construed in accordance with and
governed by the law of the State of New York.
(a) Each of the Indenture Parties hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of the Supreme Court of the State of New York sitting in New York
County and of the United States District Court of the Southern District of New
York, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement or any other Indenture Document, or
for recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such New York State or,
to the extent permitted by law, in such Federal court. Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement or any other
Indenture Document shall affect any right that the Collateral Agent, the Trustee
or any Holder may otherwise have to bring any action or proceeding relating to
this Agreement or any other Indenture Document against any Grantor or Guarantor,
or its properties in the courts of any jurisdiction.
(b) Each of the Indenture Parties hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection which it
34
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any other Indenture
Document in any court referred to in paragraph (b) of this Section 6.09. Each of
the parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 6.01. Nothing
in this Agreement or any other Indenture Document will affect the right of any
party to this Agreement to serve process in any other manner permitted by law.
SECTION 6.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
OR RELATING TO THIS AGREEMENT, ANY OTHER INDENTURE DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 6.10.
SECTION 6.11. Headings. Article and Section headings and the
Table of Contents used herein are for convenience of reference only, are not
part of this Agreement and are not to affect the construction of, or to be taken
into consideration in interpreting, this Agreement.
SECTION 6.12. Security Interest Absolute. All rights of the
Collateral Agent hereunder, the Security Interest, the grant of a security
interest in the Pledged Collateral and all obligations of each Grantor and
Guarantor hereunder shall be absolute and unconditional irrespective of (a) any
lack of validity or enforceability of the Indenture, any other Indenture
Document, any agreement with respect to any of the Collateral Obligations or any
other agreement or instrument relating to any of the foregoing, (b) any change
in the time, manner or place of payment of, or in any other term of, all or any
of the Collateral Obligations, or any other amendment or waiver of or any
consent to any departure from the Indenture, any other Indenture Document or any
other agreement or instrument, (c) any exchange, release or non-perfection of
any Lien on other collateral, or any release or amendment or waiver of or
consent under or departure from any guarantee, securing or guaranteeing all or
any of the Collateral Obligations, or (d) any other circumstance that might
otherwise constitute a defense available to, or a discharge of, any Grantor or
Guarantor in respect of the Collateral Obligations or this Agreement.
35
SECTION 6.13. Termination or Release. (a) This Agreement, the
Security Interest and all other security interests granted hereby shall
terminate when all the Collateral Obligations have indefeasibly been paid in
full.
(b) Upon the sale or other disposition (including by way of
consolidation or merger) of a Guarantor or Grantor or the sale or disposition of
all or substantially all the assets of such Guarantor or Grantor (in each case
other than a sale or disposition to the Company or an Affiliate of the Company
and as permitted by the Indenture and if in connection therewith the Company
provides an Officers' Certificate to the Collateral Agent to the effect that the
Company will comply with its obligations under Section 4.06 of the Indenture),
such Guarantor or Grantor shall be deemed released from all obligations
hereunder without any further action required on the part of the Trustee or any
Holder.
(c) A Guarantor or Grantor also shall be released (i) upon the
designation of such Guarantor or Grantor as an Unrestricted Subsidiary; or (ii)
if the Company exercises its legal defeasance option or its covenant defeasance
option as permitted by Section 8.01 of the Indenture.
(d) If any of the Collateral shall become subject to the
disposition, release or eminent domain provisions set forth in Sections 11.03,
11.04 and 11.06 of the Indenture, such Collateral shall be automatically
released from the Security Interest to the extent provided in Sections 11.03,
11.04 and 11.06 of the Indenture.
(e) In connection with any termination or release pursuant to
paragraph (a), (b) or (c), the Collateral Agent shall execute and deliver to any
Grantor, at such Grantor's expense, all documents that such Grantor shall
reasonably request to evidence such termination or release. Any execution and
delivery of documents pursuant to this Section 6.13 shall be without recourse to
or warranty by the Collateral Agent.
SECTION 6.14. Additional Subsidiaries. If, pursuant to
Sections 4.12 and 10.05 of the Indenture, the Company is required to cause any
Subsidiary that is not a Subsidiary Party to become a Subsidiary Party, upon
execution and delivery by the Collateral Agent and a Subsidiary of an instrument
in the form of Exhibit I hereto, such Subsidiary shall become a Subsidiary Party
hereunder with the same force and effect as if originally named as a Subsidiary
Party herein. The execution and delivery of any such instrument shall not
require the consent of any other Indenture Party hereunder. The rights and
obligations of each Indenture Party hereunder shall remain in full force and
effect notwithstanding the addition of any new Indenture Party as a party to
this Agreement.
SECTION 6.15. Collateral Agent Appointed Attorney-in-Fact.
Each Grantor hereby appoints the Collateral Agent the attorney-in-fact of such
Grantor for the purpose of carrying out the provisions of this Agreement and
taking any action and executing any instrument that the Collateral Agent may
deem necessary or advisable to accomplish the purposes hereof, which appointment
is irrevocable, coupled with an interest and shall not be exercisable unless an
Event of Default has occurred and is
36
continuing. Without limiting the generality of the foregoing, the Collateral
Agent shall have the right, upon the occurrence and during the continuance of an
Event of Default, with full power of substitution either in the Collateral
Agent's name or in the name of such Grantor (a) to receive, endorse, assign
and/or deliver any and all notes, acceptances, checks, drafts, money orders or
other evidences of payment relating to the Collateral or any part thereof; (b)
to demand, collect, receive payment of, give receipt for and give discharges and
releases of all or any of the Collateral; (c) to sign the name of any Grantor on
any invoice or xxxx of lading relating to any of the Collateral; (d) to send
verifications of Accounts to any Account Debtor; (e) to commence and prosecute
any and all suits, actions or proceedings at law or in equity in any court of
competent jurisdiction to collect or otherwise realize on all or any of the
Collateral or to enforce any rights in respect of any Collateral; (f) to settle,
compromise, compound, adjust or defend any actions, suits or proceedings
relating to all or any of the Collateral; (g) to notify, or to require any
Grantor to notify, Account Debtors to make payment directly to the Collateral
Agent; and (h) to use, sell, assign, transfer, pledge, make any agreement with
respect to or otherwise deal with all or any of the Collateral, and to do all
other acts and things necessary to carry out the purposes of this Agreement, as
fully and completely as though the Collateral Agent were the absolute owner of
the Collateral for all purposes; provided that nothing herein contained shall be
construed as requiring or obligating the Collateral Agent to make any commitment
or to make any inquiry as to the nature or sufficiency of any payment received
by the Collateral Agent, or to present or file any claim or notice, or to take
any action with respect to the Collateral or any part thereof or the moneys due
or to become due in respect thereof or any property covered thereby. The
Collateral Agent and the other Secured Parties shall be accountable only for
amounts actually received as a result of the exercise of the powers granted to
them herein, and neither they nor their officers, directors, employees or agents
shall be responsible to any Grantor for any act or failure to act hereunder,
except for their own gross negligence, wilful misconduct or bad faith.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
INTERNATIONAL WIRE HOLDING COMPANY,
by
/s/ Xxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President and
Secretary
INTERNATIONAL WIRE GROUP, INC.,
by
/s/ Xxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President and
Secretary
EACH OF THE SUBSIDIARIES
LISTED ON SCHEDULE I HERETO,
by
/s/ Xxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President and
Secretary
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION, AS
COLLATERAL AGENT,
by
/s/ Xxxx X. Xxxxxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Vice President
Schedule I to the
Collateral Agreement
SUBSIDIARY PARTIES
Schedule II to the
Collateral Agreement
EQUITY INTERESTS
Number and
Number of Registered Class of Percentage
Issuer Certificate Owner Equity Interest of Equity Interests
------ ----------- ----- --------------- -------------------
DEBT SECURITIES
Principal
Issuer Amount Date of Note Maturity Date
------ ------ ------------ -------------
Schedule III to the
Collateral Agreement
U.S. COPYRIGHTS OWNED BY [NAME OR GRANTOR]
U.S. Copyright Registrations
Title Reg. No. Author
----- -------- ------
Pending U.S. Copyright Applications for Registration
Title Author Class Date Filed
----- ------ ----- ----------
Non-U.S. Copyright Registrations
Country Title Reg. No. Author
------- ----- -------- ------
Non-U.S. Pending Copyright Applications for Registration
Country Title Author Class Date Filed
------- ----- ------ ----- -----------
Schedule III to the
Collateral Agreement
LICENSES
I. Licenses/Sublicensees of [Name of Grantor] as Licensor on Date Hereof
A. Copyrights
U.S. Copyrights
Title of
Licensee Name Date of License/ U.S.
and Address Sublicense Copyright Author Reg. No.
----------- ---------- --------- ------ --------
Non-U.S. Copyrights
Date of Title of
Licensee Name License/ Non-U.S.
Country and Address Sublicensee Copyrights Author Reg. No.
------- ----------- ----------- ---------- ------ --------
B. Patents
U.S. Patents
Licensee Name Date of License/
and Address Sublicense Issue Date Patent No.
----------- ---------- ---------- ----------
Schedule III to the
Collateral Agreement
U.S. Patent Applications
Licensee Name Date of License/
and address Sublicense Date Filed Application No.
----------- ---------- ---------- ---------------
Non-U.S. Patents
Licensee Name Date of License/ Issue Non-U.S.
Country and Address Sublicense Date Patent No.
------- ----------- ---------- ---- ----------
Non-U.S. Patent Applications
Licensee Name Date of License/ Date Application
Country and Address Sublicense Filed No.
------- ----------- ---------- ----- ---
C. Trademarks
U.S. Trademarks
Licensee Name Date of License/
and Address Sublicense U.S. Xxxx Reg. Date Reg. No.
----------- ---------- --------- --------- --------
Schedule III to the
Collateral Agreement
U.S. Trademark Applications
Licensee Name Date of License/ Application
and Address Sublicense U.S. Xxxx Date Filed No.
----------- ---------- --------- ---------- ---
Non-U.S. Trademarks
Licensee Name Date of License/ Non-U.S.
Country and Address Sublicense Xxxx Reg. Date Reg. No.
------- ----------- ---------- ---- --------- --------
Non-U.S. Trademark Applications
Licensee Name Date of License/ Non-U.S. Date Application
Country and Address Sublicense Xxxx Filed No.
------- ----------- ---------- ---- ----- ---
D. Others
Licensee Name Date of License/ Subject
and Address Sublicense Matter
----------- ---------- ------
Schedule III to the
Collateral Agreement
II. Licensees/Sublicenses of [Name of Grantor] as Licensee on Date Hereof
A. Copyrights
U.S. Copyrights
Licensor Name and Date of License/ Title of
Address Sublicense U.S. Copyright Author Reg. No.
------- ---------- -------------- ------ --------
Non-U.S. Copyrights
Date of Title of
Licensor Name License/ Non-U.S.
Country and Address Sublicensee Copyrights Author Reg. No.
------- ----------- ----------- ---------- ------ --------
B. Patents
U.S. Patents
Date of
Licensor Name License/
and Address Sublicense Issue Date Patent No.
----------- ---------- ---------- ----------
U.S. Patent Applications
Licensor Name Date of License/
and Address Sublicense Date Filed Application No.
----------- ---------- ---------- ---------------
Schedule III to the
Collateral Agreement
Non-U.S. Patents
Licensor Name Date of License/ Issue Non-U.S.
Country and Address Sublicense Date Patent No.
------- ----------- ---------- ---- ----------
Non-U.S. Patent Applications
Licensor Name Date of License/ Date Application
Country and Address Sublicense Filed No.
------- ----------- ---------- ----- ---
C. Trademarks
U.S. Trademarks
Licensor Name Date of License/
and Address Sublicense U.S. Xxxx Reg. Date Reg. No.
----------- ---------- --------- --------- --------
U.S. Trademark Applications
Licensor Name Date of License/ Date Application
and Address Sublicense U.S. Xxxx Filed No.
----------- ---------- --------- ----- ---
Non-U.S. Trademarks
Licensor Name Date of License/ Non-U.S.
Country and Address Sublicense Xxxx Reg. Date Reg. No.
------- ----------- ---------- ---- --------- --------
Schedule III to the
Collateral Agreement
Non-U.S. Trademark Applications
Licensor Name Date of License/ Non-U.S. Date Application
Country and Address Sublicense Xxxx Filed No.
------- ----------- ---------- ---- ----- ---
D. Others
Date of License/
Licensor Name and Address Sublicense Subject Matter
------------------------- ---------- --------------
Schedule III to the
Collateral Agreement
PATENTS OWNED BY [NAME OF GRANTOR]
U.S. Patent Registrations
Patent Numbers Issue Date
-------------- ----------
U.S. Patent Applications
Patent Application No. Filing Date
---------------------- -----------
Non-U.S. Patent Registrations
Country Issue Date Patent No.
------- ---------- ----------
Non-U.S. Patent Registrations
Country Filing Date Patent Application No.
------- ----------- ----------------------
Schedule III to the
Collateral Agreement
TRADEMARK/TRADE NAMES OWNED BY [NAME OF GRANTOR]
U.S. Trademark Registrations
Xxxx Reg. Date Reg. No.
---- --------- --------
U.S. Trademark Applications
Xxxx Filing Date Application No.
---- ----------- ---------------
State Trademark Registrations
State Xxxx Filing Date Application No.
----- ---- ----------- ---------------
Non-U.S. Trademark Registrations
Country Xxxx Reg. Date Reg. No.
------- ---- --------- --------
Non-U.S. Trademark Applications
Country Xxxx Application Date Application No.
------- ---- ---------------- ---------------
Schedule III to the
Collateral Agreement
Trade Names
Country(s) Where Used Trade Names
--------------------- -----------
Schedule IIII to the
Collateral Agreement
MORTGAGED PROPERTY
Exhibit I to the
Collateral Agreement
SUPPLEMENT NO. __ dated as of [o] , to the
Collateral Agreement dated as of May 30, 2003,
International Wire Holding Company, International
Wire Group, Inc., each Subsidiary Party listed on
Schedule I thereto (each such subsidiary individually
a "Subsidiary Grantor" and collectively, the
"Subsidiary Grantors"; the Subsidiary Grantors,
Holdings and the Company are referred to collectively
herein as the "Grantors") and Xxxxx Fargo Bank
Minnesota, National Association, as Collateral Agent
(in such capacity, the "Collateral Agent").
A. Reference is made to made to Indenture dated as of May 30,
2003 (as amended, restated, supplemented or otherwise modified from time to
time, the "Indenture"), among the Company and Xxxxx Fargo Bank Minnesota,
National Association, as trustee (the "Trustee"), and (b) the Purchase Agreement
dated as of May 30, 2003 (as amended, restated, supplemented or otherwise
modified from time to time, the "Purchase Agreement"), among the Issuer, and
Credit Suisse First Boston LLC (the "Initial Purchaser").
B. Capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to such terms in the Indenture and the
Collateral Agreement referred to therein.
C. The Grantors have entered into the Collateral Agreement in
order to induce the Trustee to enter into the Indenture and the Initial
Purchaser to purchase the Notes. Section 6.16 of Collateral Agreement provides
that additional Subsidiaries of [Holdings/the Indenture Parties] may become
Subsidiary Parties under the Collateral Agreement by execution and delivery of
an instrument in the form of this Supplement. The undersigned Subsidiary (the
"New Subsidiary") is executing this Supplement in accordance with the
requirements of the Indenture to become a Subsidiary Party under the Collateral
Agreement as consideration for credit previously extended to the Company.
Accordingly, the Collateral Agent and the New Subsidiary agree
as follows:
SECTION 1. In accordance with Section 6.16 of the Collateral
Agreement, the New Subsidiary by its signature below becomes a Subsidiary Party
(and accordingly, becomes a Guarantor and a Grantor), Grantor and Guarantor
under the Collateral Agreement with the same force and effect as if originally
named therein as a Subsidiary Party and the New Subsidiary hereby (a) agrees to
all the terms and provisions of the Collateral Agreement applicable to it as a
Subsidiary Party, Grantor and Guarantor hereunder and (b) represents and
warrants that the representations and warranties made by it as a Grantor and
Guarantor hereunder are true and correct on and as of the date hereof. In
furtherance of the foregoing, the New Subsidiary, as security for the payment
2
and performance in full of the Collateral Obligations (as defined in the
Collateral Agreement), does hereby create and grant to the Collateral Agent, its
successors and assigns, for the benefit of the Secured Parties, their successors
and assigns, a security interest in and lien on all of the New Subsidiary's
right, title and interest in and to the Collateral (as defined in the Collateral
Agreement) of the New Subsidiary. Each reference to a "Guarantor" or "Grantor"
in the Collateral Agreement shall be deemed to include the New Subsidiary. The
Collateral Agreement is hereby incorporated herein by reference.
SECTION 2. The New Subsidiary represents and warrants to the
Collateral Agent and the other Secured Parties that this Supplement has been
duly authorized, executed and delivered by it and constitutes its legal, valid
and binding obligation, enforceable against it in accordance with its terms.
SECTION 3. This Supplement may be executed in counterparts
(and by different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract. This Supplement shall become effective when the Collateral
Agent shall have received a counterpart of this Supplement that bears the
signature of the New Subsidiary and the Collateral Agent has executed a
counterpart hereof. Delivery of an executed signature page to this Supplement by
facsimile transmission shall be as effective as delivery of a manually signed
counterpart of this Supplement.
SECTION 4. The New Subsidiary hereby represents and warrants
that (a) set forth on Schedule I attached hereto is a true and correct schedule
of the location of any and all Collateral of the New Subsidiary and (b) set
forth under its signature hereto, is the true and correct legal name of the New
Subsidiary, its jurisdiction of formation and the location of its chief
executive office.
SECTION 5. Except as expressly supplemented hereby, the
Collateral Agreement shall remain in full force and effect.
SECTION 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 7. In case any one or more of the provisions contained
in this Supplement should be held invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein and in the Collateral Agreement shall not in any way be
affected or impaired thereby (it being understood that the invalidity of a
particular provision in a particular jurisdiction shall not in and of itself
affect the validity of such provision in any other jurisdiction). The parties
hereto shall endeavor in good-faith negotiations to replace the invalid, illegal
or unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
3
SECTION 8. All communications and notices hereunder shall be
in writing and given as provided in Section 6.01 of the Collateral Agreement.
SECTION 9. The New Subsidiary agrees to reimburse the
Collateral Agent for its reasonable out-of-pocket expenses in connection with
this Supplement, including the reasonable fees, other charges and disbursements
of counsel for the Collateral Agent.
IN WITNESS WHEREOF, the New Subsidiary and the Collateral
Agent have duly executed this Supplement to the Collateral Agreement as of the
day and year first above written.
[NAME OF NEW SUBSIDIARY],
by
------------------------------------
Name:
Title:
Legal Name:
Jurisdiction of Formation:
Location of Chief Executive office:
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION,
AS COLLATERAL AGENT
by
------------------------------------
Name:
Title:
Schedule I
to the Supplement No __ to
the Collateral Agreement
LOCATION OF COLLATERAL
Description Location
----------- --------
EQUITY INTERESTS
Number and
Number of Registered Class of Percentage
Issuer Certificate Owner Equity Interests of Equity Interests
------ ----------- ----- ---------------- -------------------
DEBT SECURITIES
Principal
Issuer Amount Date of Note Maturity Date
------ ------ ------------ -------------
INTELLECTUAL PROPERTY
MORTGAGED PROPERTY
