Additional Principles. The Agreed Security Principles embody the recognition by all parties that there may be certain legal and practical difficulties in obtaining effective or commercially reasonable guarantees and/or security from all relevant Foreign Subsidiaries in each jurisdiction in which it has been agreed that guarantees and security will be granted by those members. In particular: (a) general legal and statutory limitations, regulatory restrictions, financial assistance, anti-trust and other competition authority restrictions, corporate benefit, fraudulent preference, equitable subordination, “transfer pricing”, “thin capitalisation” (and in particular, guarantees and security shall not result in all or part of the Note Obligations being considered related debt for thin capitalisation purposes), “earnings stripping”, “exchange control restrictions”, “capital maintenance” rules and “liquidity impairment” rules, tax restrictions, retention of title claims, employee consultation or approval requirements and similar principles may limit the ability of a Foreign Subsidiary to provide a guarantee or security or may require that the guarantee or security be limited as to amount or otherwise and, if so, the guarantee or security will be limited accordingly, provided that, to the extent requested by the Trustee or the Collateral Agent (in each case, acting at the direction of the Required Noteholder Parties) before signing any applicable security or accession document, the relevant Foreign Subsidiary shall use reasonable endeavors (for a period of not more than ten (10) Business Days but without incurring material cost and without adverse impact on relationships with third parties) to overcome any such obstacle or otherwise such guarantee or Security Document shall be subject to such limit; (b) a key factor in determining whether or not a guarantee or security will be taken (and in respect of the security, the extent of its perfection and/or registration) is the applicable time and cost (including adverse effects on taxes, interest deductibility, stamp duty, registration taxes, notarial costs guarantee fees payable to any person that is not the Issuer or a Subsidiary thereof and all applicable legal fees) which will not be disproportionate to the benefit accruing to the Secured Parties of obtaining such guarantee or security, as determined in good faith by Issuer; (c) subject always to sections 4 and 6 above, Foreign Subsidiaries will not be required to give guarantees or enter into Security Documents if it is not within the legal capacity of the relevant Foreign Subsidiary or if it would conflict with the fiduciary or statutory duties of their directors or contravene any applicable legal, regulatory or contractual prohibition or restriction, require the consent of any legal or regulatory authority or contractual counterparty or have the potential to result in a material risk of personal or criminal liability for any director or officer of or for the Issuer or any of its Subsidiaries, provided that, to the extent requested by the Trustee or the Collateral Agent (in each case, acting at the direction of the Required Noteholder Parties) before signing any applicable Security Document or guaranty document, the relevant Foreign Subsidiary shall, in relation to a contractual restriction only, use reasonable endeavors (for a period of not more than ten (10) Business Days but without incurring material cost and without adverse impact on relationships with third parties) to overcome any such obstacle or otherwise such guarantee or Security Document shall be subject to such limit; (d) it is expressly acknowledged that it may be either impossible or impractical to create security over certain categories of assets, as determined in good faith by Issuer, in which event security will not be taken over such assets; (e) the giving of a guarantee, the granting of security and the registration and/or the perfection of the security granted will not be required if it would have an adverse effect on the ability of the relevant Foreign Subsidiary to conduct its operations and business in the ordinary course as otherwise permitted by the Indenture (including dealing with the secured assets and all contractual counterparties or amending, waiving or terminating (or allowing to lapse) any rights, benefits or obligations, in each case prior to an Applicable Acceleration Event which is continuing), and any requirement under the Agreed Security Principles to seek consent of any person or take or not take any other action shall be subject to this paragraph (e); (f) any security document will only be required to be notarized if required by law in order for the relevant security to become effective or admissible in evidence; (g) if not required by the laws of the applicable Foreign Jurisdiction, no title investigations or other diligence on assets will be required and no title insurance will be required; (h) to the extent legally effective, all security will be given in favour of the Collateral Agent and not the Secured Parties individually; “parallel debt” provisions will be used where necessary (and included in the Indenture and not the individual security documents); (i) neither the Issuer nor any Subsidiary will be required to take any action in relation to any guarantees or security as a result of any assignment, sub-participation or transfer by a Secured Party (and neither the Issuer nor any Subsidiary shall bear or otherwise be liable for any taxes, any notarial registration or perfection fees or any other costs, fees or expenses that result from any assignment, sub-participation or transfer by a Secured Party); (j) other than a general security agreement and related filing, no perfection, filing or other action will be required with respect to assets of a type not owned by the applicable Foreign Subsidiary Guarantor; (k) no translation of any document relating to any security or any asset subject to any security will be required to be prepared or provided to the Secured Parties (or any agent or similar representative appointed by them at the relevant time) unless (i) required for such documents to become effective or admissible in evidence, and (ii) an Applicable Acceleration Event is continuing; provided, however, if the Collateral Agent or the Trustee is asked to sign a document in a language other than English, a courtesy translation shall be provided at the expense of the Issuer (upon which translation the Collateral Agent shall conclusively rely); and (l) no security shall be required to be provided over any of the following property: (i) any Real Property other than Material Real Property; (ii) (x) motor vehicles and other assets subject to certificates of title and letter of credit rights (in each case, other than to the extent a Lien on such assets or such rights can be perfected by filing of a general notice filing or similar) and (y) commercial tort claims with a value of less than $10,000,000; (iii) pledges and security interests prohibited by applicable law, rule, regulation or contractual obligation (with respect to any such contractual obligation, only to the extent such restriction is permitted under Section 8.09(c) of the Indenture and such restriction is binding on such assets on the Closing Date or on the date of acquisition thereof and not entered into in contemplation thereof (and renewals and replacements thereof) (in each case, except to the extent such prohibition is unenforceable after giving effect to the anti-assignment provisions of applicable law) or which would require governmental (including regulatory) consent, approval, license or authorization to be pledged (unless such consent, approval, license or authorization has been received); (iv) assets to the extent a security interest in such assets could reasonably be expected to result in material adverse tax consequences as determined in good faith by the Issuer in consultation with the Required Noteholder Parties; (v) any lease, license or other agreement to the extent that a grant of a security interest therein would violate or invalidate such lease, license or agreement or create a right of termination in favor of any other party thereto (other than the Issuer or any Subsidiary thereof) after giving effect to the anti-assignment provisions of applicable law; (vi) those assets as to which the Issuer and the Required Noteholder Parties reasonably agree that the cost or other consequence of obtaining such a security interest or perfection thereof are excessive in relation to the value afforded thereby; (vii) any governmental licenses or state or local franchises, charters or authorizations, to the extent a security interest in such licenses, franchises, charters or authorizations is prohibited or restricted thereby after giving effect to the anti-assignment provisions of applicable law; (viii) pending “intent to use” trademark applications for which an Amendment to Allege Use or a Statement of Use under Section 1(c) or 1(d) of the ▇▇▇▇▇▇ Act has not been filed with or accepted by the United States Trademark Office; (ix) any Excluded Account and any cash and Permitted Investments maintained in an Excluded Account; (x) any Excluded Securities; (xi) any Third Party Funds; (xii) any equipment or other real or personal property or asset that is subject to a Lien permitted by clause (i) of Section 8.02 of the Indenture if permitted by Section 8.01 of the Indenture, if the agreement governing such Lien (or the Indebtedness secured thereby) prohibits or requires the consent of any person (other than the Issuer or any Subsidiary thereof) as a condition to the creation of any other security interest on such equipment or other real or personal property or asset and, in each case, such prohibition or requirement is permitted hereunder after giving effect to the applicable anti-assignment provisions of Article 9 of the Uniform Commercial Code; and (xiii) any other property mutually agreed upon between the Issuer and the Required Noteholder Parties.
Appears in 7 contracts
Sources: Indenture (Wolfspeed, Inc.), Indenture (Wolfspeed Texas LLC), Indenture (Wolfspeed Texas LLC)
Additional Principles. The These Agreed Security Principles embody the recognition by all parties that there may be certain legal and practical difficulties in obtaining effective or commercially reasonable guarantees and/or security from all relevant Foreign Subsidiaries Guarantors in each jurisdiction in which it has been agreed that guarantees and security will be granted by those membersForeign Guarantors. In particular:
(a) general legal and statutory limitations, regulatory restrictionsrestrictions (including foreign exchange controls), financial assistance, anti-trust and other competition authority restrictions, corporate benefit, fraudulent preference, equitable subordination, “"transfer pricing”", “"thin capitalisation” (and in particular", guarantees and security shall not result in all or part of the Note Obligations being considered related debt for thin capitalisation purposes), “"earnings stripping”", “"exchange control restrictions”", “"capital maintenance” " rules and “"liquidity impairment” " rules, tax restrictions, retention of title claims, employee consultation or approval requirements and similar principles may limit the ability of a Foreign Subsidiary member of the Group to provide a guarantee or security or may require that the guarantee or security be limited as to amount or otherwise and, if so, the guarantee or security will be limited accordingly, provided that, to the extent requested by the Trustee Notes Collateral Agent or the Collateral Agent Trustee (in each case, acting at the direction of the Required Noteholder PartiesHolders) before signing any applicable security or accession document, the relevant Foreign Subsidiary member of the group consisting of the Company and the Restricted Subsidiaries (the “Group”) shall use reasonable endeavors endeavours (for a period of not more than ten (10) Business Days but without incurring material cost and without adverse impact on relationships with third parties) to overcome any such obstacle or otherwise such guarantee or Security Document security document shall be subject to such limit;
(b) a key factor in determining whether or not a guarantee or security will be taken (and in respect of the security, the extent of its perfection and/or registration) is the applicable time and cost (including adverse effects on taxes, interest deductibility, stamp duty, registration taxes, notarial costs guarantee fees payable to any person that is not a member of the Issuer or a Subsidiary thereof Group and all applicable legal fees) which will not be disproportionate to the benefit accruing to the Secured Parties Holders of obtaining such guarantee or security, as determined in good faith by Issuerthe Company and the Required Holders);
(c) subject always to sections 4 and 6 above, Foreign Subsidiaries members of the Group will not be required to give guarantees or enter into Security Documents security documents if they are not directly or indirectly wholly owned by the Company or if it is not within the legal capacity of the relevant Foreign Subsidiary members of the Group or if it would conflict with the fiduciary or statutory duties of their directors or contravene any applicable legal, regulatory or contractual prohibition or restriction, require the consent of any legal or regulatory authority or contractual counterparty restriction or have the potential to result in a material risk of personal or criminal liability for any director or officer of or for any member of the Issuer or any of its SubsidiariesGroup, provided that, to the extent requested by the Trustee Notes Collateral Agent or the Collateral Agent Trustee (in each case, acting at the direction of the Required Noteholder PartiesHolders) before signing any applicable Security Document security document or guaranty accession document, the relevant Foreign Subsidiary member of the Group shall, in relation to a contractual prohibition or restriction only, use reasonable endeavors endeavours (for a period of not more than ten (10) Business Days but without incurring material cost and without adverse impact on relationships with third parties) to overcome any such obstacle or otherwise such guarantee or Security Document security document shall be subject to such limit;
(d) having regard to the principle in paragraph (b) above, the Company and the Required Holders shall discuss in good faith (having regard to customary practice in applicable jurisdictions) with a view to determining whether certain security can be provided by the relevant Foreign Guarantor granting a promise to pledge in favour of the Holders coupled with an irrevocable power of attorney to the Notes Collateral Agent as opposed to a definitive legal mortgage or pledge over the relevant asset;
(e) guarantees and security will be limited so that the aggregate of notarial costs and all registration and like taxes and duties relating to the provision of security will not exceed an amount to be agreed between the Company and the Required Holders;
(f) where a class of assets to be secured includes material and immaterial assets, if the cost of granting security over the immaterial assets is disproportionate to the benefit of such security to the Holders, as determined by the Company and the Required Holders security will be granted over the material assets only;
(g) it is expressly acknowledged that it may be either impossible or impractical to create security over certain categories of assets, as determined in good faith by Issuerthe Company and the Required Holders, in which event security will not be taken over such assets;
(eh) in each case to the extent the applicable restriction, condition or third party right did not arise in contemplation of the relevant guarantee or grant of security, any asset subject to a legal requirement, contract, lease, licence, instrument, regulatory constraint (including any agreement with any government or regulatory body) or other third party arrangement, which may prevent or condition the asset from being charged, secured or being subject to the applicable security document (including requiring a consent of any third party, supervisory board or works council (or equivalent)) and any asset which, if subject to the applicable security document, would give a third party the right to terminate or otherwise amend any rights, benefits and/or obligations with respect to any member of the Group in respect of the asset or require the relevant chargor to take any action materially adverse to the interests of the Group or any member thereof, in each case will be excluded from a guarantee or security document, provided that reasonable endeavours (exercised for a specified period of time) to obtain consent to charging any asset (where otherwise prohibited) shall be used by the Group if the Trustee (acting at the direction of Required Holders) specifies prior to the date of the security or accession document that the asset is material and the Company is satisfied that such endeavours will not involve placing relationships with third parties in jeopardy;
(i) the giving of a guarantee, the granting of security and the registration and/or the perfection of the security granted will not be required if it would have an a material adverse effect on the ability of the relevant Foreign Subsidiary member of the Group to conduct its operations and business in the ordinary course as otherwise permitted by the Indenture Notes Documents (including dealing with the secured assets and all contractual counterparties or amending, waiving or terminating (or allowing to lapse) any rights, benefits or obligations, in each case prior to an Applicable Acceleration Event which is continuing), and any requirement under the these Agreed Security Principles to seek consent of any person or take or not take any other action shall be subject to this paragraph (ei);
(fj) any security document will only be required to be notarized notarised if required by law in order for the relevant security to become effective or admissible in evidence;
(gk) if not to the extent possible and unless required by applicable law, there should be no action required to be taken in relation to the laws guarantees or security when any secured party assigns or transfers any of its participation to a new secured party (and, unless explicitly agreed to the applicable contrary in the Notes Documents, no Foreign JurisdictionGuarantor shall bear or otherwise be liable for any taxes, any notarial, registration or perfection fees or any other costs, fees or expenses that result from any assignment or transfer by a Holder);
(l) no title investigations or other diligence on assets will be required and no title insurance will be required;
(hm) security will not be required over any cash constituting regulatory capital or customer cash (and such assets or cash shall be excluded from any relevant security document);
(n) to the extent legally effective, all security will be given in favour of the Notes Collateral Agent and not the Secured Parties individuallyindividually (with the Notes Collateral Agent to hold one set of security documents for all the Secured Parties); “"parallel debt” " provisions will be used where necessary (and included in the Indenture and not the individual security documents)necessary;
(i) neither the Issuer nor any Subsidiary will be required to take any action in relation to any guarantees or security as a result of any assignment, sub-participation or transfer by a Secured Party (and neither the Issuer nor any Subsidiary shall bear or otherwise be liable for any taxes, any notarial registration or perfection fees or any other costs, fees or expenses that result from any assignment, sub-participation or transfer by a Secured Party);
(j) other than a general security agreement and related filing, no perfection, filing or other action will be required with respect to assets of a type not owned by the applicable Foreign Subsidiary Guarantor;
(k) no translation of any document relating to any security or any asset subject to any security will be required to be prepared or provided to the Secured Parties (or any agent or similar representative appointed by them at the relevant time) unless (i) required for such documents to become effective or admissible in evidence, and (ii) an Applicable Acceleration Event is continuing; provided, however, if the Collateral Agent or the Trustee is asked to sign a document in a language other than English, a courtesy translation shall be provided at the expense of the Issuer (upon which translation the Collateral Agent shall conclusively rely); and
(l) no security shall be required to be provided over any of the following property:
(i) any Real Property other than Material Real Property;
(ii) (x) motor vehicles and other assets subject to certificates of title and letter of credit rights (in each case, other than to the extent a Lien on such assets or such rights can be perfected by filing of a general notice filing or similar) and (y) commercial tort claims with a value of less than $10,000,000;
(iii) pledges and security interests prohibited by applicable law, rule, regulation or contractual obligation (with respect to any such contractual obligation, only to the extent such restriction is permitted under Section 8.09(c) of the Indenture and such restriction is binding on such assets on the Closing Date or on the date of acquisition thereof and not entered into in contemplation thereof (and renewals and replacements thereof) (in each case, except to the extent such prohibition is unenforceable after giving effect to the anti-assignment provisions of applicable law) or which would require governmental (including regulatory) consent, approval, license or authorization to be pledged (unless such consent, approval, license or authorization has been received);
(iv) assets to the extent a security interest in such assets could reasonably be expected to result in material adverse tax consequences as determined in good faith by the Issuer in consultation with the Required Noteholder Parties;
(v) any lease, license or other agreement to the extent that a grant of a security interest therein would violate or invalidate such lease, license or agreement or create a right of termination in favor of any other party thereto (other than the Issuer or any Subsidiary thereof) after giving effect to the anti-assignment provisions of applicable law;
(vi) those assets as to which the Issuer and the Required Noteholder Parties reasonably agree that the cost or other consequence of obtaining such a security interest or perfection thereof are excessive in relation to the value afforded thereby;
(vii) any governmental licenses or state or local franchises, charters or authorizations, to the extent a security interest in such licenses, franchises, charters or authorizations is prohibited or restricted thereby after giving effect to the anti-assignment provisions of applicable law;
(viii) pending “intent to use” trademark applications for which an Amendment to Allege Use or a Statement of Use under Section 1(c) or 1(d) of the ▇▇▇▇▇▇ Act has not been filed with or accepted by the United States Trademark Office;
(ix) any Excluded Account and any cash and Permitted Investments maintained in an Excluded Account;
(x) any Excluded Securities;
(xi) any Third Party Funds;
(xii) any equipment or other real or personal property or asset that is subject to a Lien permitted by clause (i) of Section 8.02 of the Indenture if permitted by Section 8.01 of the Indenture, if the agreement governing such Lien (or the Indebtedness secured thereby) prohibits or requires the consent of any person (other than the Issuer or any Subsidiary thereof) as a condition to the creation of any other security interest on such equipment or other real or personal property or asset and, in each case, such prohibition or requirement is permitted hereunder after giving effect to the applicable anti-assignment provisions of Article 9 of the Uniform Commercial Code; and
(xiii) any other property mutually agreed upon between the Issuer and the Required Noteholder Parties.
Appears in 4 contracts
Sources: Supplemental Indenture (Invacare Corp), Supplemental Indenture (Invacare Corp), Indenture (Invacare Corp)
Additional Principles. The Agreed Security Principles embody the recognition by all parties that there may be certain legal and practical difficulties in obtaining effective or commercially reasonable guarantees and/or security from all relevant Foreign Subsidiaries in each jurisdiction in which it has been agreed that guarantees and security will be granted by those members. In particular:
(a) general legal and statutory limitations, regulatory restrictions, financial assistance, anti-trust and other competition authority restrictions, corporate benefit, fraudulent preference, equitable subordination, “transfer pricing”, “thin capitalisation” (and in particular, guarantees and security shall not result in all or part of the Note Obligations being considered related debt for thin capitalisation purposes), “earnings stripping”, “exchange control restrictions”, “capital maintenance” rules and “liquidity impairment” rules, tax restrictions, retention of title claims, employee consultation or approval requirements and similar principles may limit the ability of a Foreign Subsidiary to provide a guarantee or security or may require that the guarantee or security be limited as to amount or otherwise and, if so, the guarantee or security will be limited accordingly, provided that, to the extent requested by the Trustee or the Collateral Agent (in each case, acting at the direction of Holders of the Required Noteholder Partiesrequisite principal amount of the Notes) before signing any applicable security or accession document, the relevant Foreign Subsidiary shall use reasonable endeavors (for a period of not more than ten (10) Business Days but without incurring material cost and without adverse impact on relationships with third parties) to overcome any such obstacle or otherwise such guarantee or Security Document shall be subject to such limit;
(b) a key factor in determining whether or not a guarantee or security will be taken (and in respect of the security, the extent of its perfection and/or registration) is the applicable time and cost (including adverse effects on taxes, interest deductibility, stamp duty, registration taxes, notarial costs guarantee fees payable to any person that is not the Issuer or a Subsidiary thereof and all applicable legal fees) which will not be disproportionate to the benefit accruing to the Secured Parties of obtaining such guarantee or security, as determined in good faith by Issuer;
(c) subject always to sections 4 and 6 above, Foreign Subsidiaries will not be required to give guarantees or enter into Security Documents if it is not within the legal capacity of the relevant Foreign Subsidiary or if it would conflict with the fiduciary or statutory duties of their directors or contravene any applicable legal, regulatory or contractual prohibition or restriction, require the consent of any legal or regulatory authority or contractual counterparty or have the potential to result in a material risk of personal or criminal liability for any director or officer of or for the Issuer or any of its Subsidiaries, provided that, to the extent requested by the Trustee or the Collateral Agent (in each case, acting at the direction of Holders of the Required Noteholder Partiesrequisite principal amount of the Notes) before signing any applicable Security Document or guaranty document, the relevant Foreign Subsidiary shall, in relation to a contractual restriction only, use reasonable endeavors (for a period of not more than ten (10) Business Days but without incurring material cost and without adverse impact on relationships with third parties) to overcome any such obstacle or otherwise such guarantee or Security Document shall be subject to such limit;
(d) it is expressly acknowledged that it may be either impossible or impractical to create security over certain categories of assets, as determined in good faith by Issuer, in which event security will not be taken over such assets;
(e) the giving of a guarantee, the granting of security and the registration and/or the perfection of the security granted will not be required if it would have an adverse effect on the ability of the relevant Foreign Subsidiary to conduct its operations and business in the ordinary course as otherwise permitted by the Indenture (including dealing with the secured assets and all contractual counterparties or amending, waiving or terminating (or allowing to lapse) any rights, benefits or obligations, in each case prior to an Applicable Acceleration Event which is continuing), and any requirement under the Agreed Security Principles to seek consent of any person or take or not take any other action shall be subject to this paragraph (e);
(f) any security document will only be required to be notarized if required by law in order for the relevant security to become effective or admissible in evidence;
(g) if not required by the laws of the applicable Foreign Jurisdiction, no title investigations or other diligence on assets will be required and no title insurance will be required;
(h) to the extent legally effective, all security will be given in favour of the Collateral Agent and not the Secured Parties individually; “parallel debt” provisions will be used where necessary (and included in the Indenture and not the individual security documents);
(i) neither the Issuer nor any Subsidiary will be required to take any action in relation to any guarantees or security as a result of any assignment, sub-participation or transfer by a Secured Party (and neither the Issuer nor any Subsidiary shall bear or otherwise be liable for any taxes, any notarial registration or perfection fees or any other costs, fees or expenses that result from any assignment, sub-participation or transfer by a Secured Party);
(j) other than a general security agreement and related filing, no perfection, filing or other action will be required with respect to assets of a type not owned by the applicable Foreign Subsidiary Guarantor;
(k) no translation of any document relating to any security or any asset subject to any security will be required to be prepared or provided to the Secured Parties (or any agent or similar representative appointed by them at the relevant time) unless (i) required for such documents to become effective or admissible in evidence, and (ii) an Applicable Acceleration Event is continuing; provided, however, if the Collateral Agent or the Trustee is asked to sign a document in a language other than English, a courtesy translation shall be provided at the expense of the Issuer (upon which translation the Collateral Agent shall conclusively rely); and
(l) no security shall be required to be provided over any of the following property:
(i) any Real Property other than Material Real Property;
(ii) (x) motor vehicles and other assets subject to certificates of title and letter of credit rights (in each case, other than to the extent a Lien on such assets or such rights can be perfected by filing of a general notice filing or similar) and (y) commercial tort claims with a value of less than $10,000,000;
(iii) pledges and security interests prohibited by applicable law, rule, regulation or contractual obligation (with respect to any such contractual obligation, only to the extent such restriction is permitted under Section 8.09(c) of the Indenture and such restriction is binding on such assets on the Closing Date or on the date of acquisition thereof and not entered into in contemplation thereof (and renewals and replacements thereof) (in each case, except to the extent such prohibition is unenforceable after giving effect to the anti-assignment provisions of applicable law) or which would require governmental (including regulatory) consent, approval, license or authorization to be pledged (unless such consent, approval, license or authorization has been received);
(iv) assets to the extent a security interest in such assets could reasonably be expected to result in material adverse tax consequences as determined in good faith by the Issuer in consultation with the Required Noteholder PartiesCollateral Agent (acting at the direction of Holders of the requisite principal amount of the Notes);
(v) any lease, license or other agreement to the extent that a grant of a security interest therein would violate or invalidate such lease, license or agreement or create a right of termination in favor of any other party thereto (other than the Issuer or any Subsidiary thereof) after giving effect to the anti-assignment provisions of applicable law;
(vi) those assets as to which the Issuer and the Required Noteholder Parties Collateral Agent (acting at the direction of Holders of the requisite principal amount of the Notes) reasonably agree that the cost or other consequence of obtaining such a security interest or perfection thereof are excessive in relation to the value afforded thereby;
(vii) any governmental licenses or state or local franchises, charters or authorizations, to the extent a security interest in such licenses, franchises, charters or authorizations is prohibited or restricted thereby after giving effect to the anti-assignment provisions of applicable law;
(viii) pending “intent to use” trademark applications for which an Amendment to Allege Use or a Statement of Use under Section 1(c) or 1(d) of the ▇▇▇▇▇▇ Act has not been filed with or accepted by the United States Trademark Office;
(ix) any Excluded Account and any cash and Permitted Investments maintained in an Excluded Account;
(x) any Excluded Securities;
(xi) any Third Party Funds;
(xii) any equipment or other real or personal property or asset that is subject to a Lien permitted by clause (i) of Section 8.02 of the Indenture if permitted by Section 8.01 of the Indenture, if the agreement governing such Lien (or the Indebtedness secured thereby) prohibits or requires the consent of any person (other than the Issuer or any Subsidiary thereof) as a condition to the creation of any other security interest on such equipment or other real or personal property or asset and, in each case, such prohibition or requirement is permitted hereunder after giving effect to the applicable anti-assignment provisions of Article 9 of the Uniform Commercial Code; and
(xiii) any other property mutually agreed upon between the Issuer and the Required Noteholder PartiesCollateral Agent (acting at the direction of Holders of the requisite principal amount of the Notes).
Appears in 2 contracts
Sources: Indenture (Wolfspeed, Inc.), Indenture (Wolfspeed, Inc.)
Additional Principles. The Agreed Security Principles embody the recognition by all parties that there may be certain legal and practical difficulties in obtaining effective or commercially reasonable guarantees and/or security from the Parent and all relevant Foreign Restricted Subsidiaries in each jurisdiction in which it has been agreed that guarantees and security will be granted by those members. In particular:
(a) general legal and statutory limitations, regulatory restrictions, financial assistance, anti-trust and other competition authority restrictions, corporate benefit, fraudulent preference, equitable subordination, “transfer pricing”, “thin capitalisation” (and in particular, guarantees and security shall not result in all or part of the Note Obligations being considered related debt for thin capitalisation purposes)”, “earnings stripping”, “controlled foreign corporation” “fiscal unity requirements” and other tax restrictions, “exchange control restrictions”, “capital maintenance” rules and “liquidity impairment” rules, tax restrictions, retention of title claims, employee consultation or approval requirements and similar principles may limit the ability of a Foreign Subsidiary the Parent or its Restricted Subsidiaries to provide a guarantee or security or may require that the guarantee or security be limited as to amount or otherwise and, if so, the guarantee or security will be limited accordingly, provided that, to the extent requested by the Trustee or the Collateral Security Agent (in each case, acting at the direction of the Required Noteholder Parties) before signing any applicable security or accession document, the Parent or relevant Foreign Restricted Subsidiary shall use reasonable endeavors (for a period of not more than ten (10) Business Days but without incurring material cost and without adverse impact on relationships with third parties) its best efforts to overcome any such obstacle or otherwise such guarantee or Security Document security document shall be subject to such limit;
(b) a key factor in determining whether or not (and the terms of which) a guarantee or security will be taken (and in respect of the security, the extent of its perfection and/or registration) is the applicable time and cost (including adverse effects on taxes, interest deductibility, stamp duty, registration costs and taxes, notarial costs and registration costs, translation costs, guarantee fees payable to any person that is not the Issuer Parent or a Restricted Subsidiary thereof and all applicable legal feesand notarial fees and adverse effects on the ability of the Parent or any Restricted Subsidiary to obtain or maintain local facilities or other financing arrangements, including any factoring or similar arrangement (in each case not prohibited by this Agreement) which will not be disproportionate to the benefit accruing to the Secured Parties (as defined in the Intercreditor Agreement) of obtaining such guarantee or security, as determined in good faith by Issuer;
(c) subject always to sections 4 the Parent and 6 above, Foreign its Restricted Subsidiaries will not be required to give guarantees or enter into Security Documents if it is not within the legal capacity of the relevant Foreign Subsidiary or security documents if it would conflict with the fiduciary or statutory duties of their directors or contravene any applicable legal, regulatory or contractual prohibition or restriction, require the consent of any legal or regulatory authority prohibition or contractual counterparty restriction or have the potential to result in a material risk of personal or criminal liability for any director or officer of or for the Issuer Parent or any of its SubsidiariesRestricted Subsidiary, provided that, to the extent requested by the Trustee or the Collateral Security Agent (in each case, acting at the direction of the Required Noteholder Parties) before signing any applicable Security Document security document or guaranty accession document, the Parent or relevant Foreign Restricted Subsidiary shall, in relation to a contractual prohibition or restriction only, use reasonable endeavors (for a period of not more than ten (10) Business Days but without incurring material cost and without adverse impact on relationships with third parties) endeavours to overcome any such obstacle or otherwise such guarantee or Security Document security document shall be subject to such limit;
(d) guarantees and security (and/or the maximum guaranteed or secured amount thereunder) will be limited so that the aggregate of notarial costs and all registration and relevant taxes and duties relating to the provision of security will not exceed an amount to be agreed between the Issuer and the Security Agent;
(e) where a class of assets to be secured includes material and immaterial assets, if the cost of granting security over the immaterial assets is disproportionate to the benefit of such security, security will be granted over the material assets only;
(f) it is expressly acknowledged that it may be either impossible or impractical to create security over certain categories of assets, as determined in good faith by Issuer, assets in which event security will not be taken over such assets;
(eg) the giving of a guarantee, the granting of security and the registration and/or the perfection of the security granted will not be required if it would have an a material adverse effect on the ability of the Parent or the relevant Foreign Restricted Subsidiary to conduct its operations and business in the ordinary course as otherwise permitted by the Indenture (including dealing with the secured assets and all contractual counterparties or amending, waiving or terminating (or allowing to lapse) any rights, benefits or obligations, in each case prior to an Applicable Acceleration Event which is continuing), and any requirement under the Agreed Security Principles to seek consent of any person or take or not take any other action shall be subject to this paragraph (e)Notes Documents;
(fh) any security document will only be required to be notarized notarised if required by law in order for the relevant security to become effective or admissible in evidence;
(g) if not required by the laws of the applicable Foreign Jurisdiction, no title investigations or other diligence on assets will be required and no title insurance will be required;
(hi) to the extent possible or legally effective, all security will be given in favour of the Collateral Security Agent and not the Secured Parties individually(as defined in the Intercreditor Agreement) individually (with the Security Agent to hold one set of security documents for all the Noteholders); “parallel debt” provisions will be used where necessary (and included in the Indenture Intercreditor Agreement and not the individual security documents);
(ij) neither no security may be provided on terms which are inconsistent with the Issuer nor any Subsidiary will be required to take any action turnover or sharing provisions in relation to any guarantees the Intercreditor Agreement;
(k) no guarantee or security as a result of shall guarantee or secure any assignment“Excluded Swap Obligations” defined in accordance with the LSTA Market Advisory Update dated February 15, sub-participation or transfer 2013 entitled “Swap Regulations’ Implications for Loan Documentation”, and any update thereto by a Secured Party (and neither the Issuer nor any Subsidiary shall bear or otherwise be liable for any taxes, any notarial registration or perfection fees or any other costs, fees or expenses that result from any assignment, sub-participation or transfer by a Secured Party)LSTA;
(jl) other than a general security agreement document and related filing, no perfection, filing or other action will be required with respect to assets of a type not owned by members of the applicable Foreign Subsidiary Guarantor;Group; and
(km) no translation of any document relating to any security or any asset subject to any security will be required to be prepared or provided to the Secured Parties (or any agent or similar representative appointed by them at as defined in the relevant time) Intercreditor Agreement), unless (i) required for such documents to become effective or admissible in evidence, and (ii) an Applicable Acceleration Event is continuing; provided, however, if the Collateral Agent or the Trustee is asked to sign a document in a language other than English, a courtesy translation shall be provided at the expense of the Issuer (upon which translation the Collateral Agent shall conclusively rely); and
(l) no security shall be required to be provided over any of the following property:
(i) any Real Property other than Material Real Property;
(ii) (x) motor vehicles and other assets subject to certificates of title and letter of credit rights (in each case, other than to the extent a Lien on such assets or such rights can be perfected by filing of a general notice filing or similar) and (y) commercial tort claims with a value of less than $10,000,000;
(iii) pledges and security interests prohibited by applicable law, rule, regulation or contractual obligation (with respect to any such contractual obligation, only to the extent such restriction is permitted under Section 8.09(c) of the Indenture and such restriction is binding on such assets on the Closing Date or on the date of acquisition thereof and not entered into in contemplation thereof (and renewals and replacements thereof) (in each case, except to the extent such prohibition is unenforceable after giving effect to the anti-assignment provisions of applicable law) or which would require governmental (including regulatory) consent, approval, license or authorization to be pledged (unless such consent, approval, license or authorization has been received);
(iv) assets to the extent a security interest in such assets could reasonably be expected to result in material adverse tax consequences as determined in good faith by the Issuer in consultation with the Required Noteholder Parties;
(v) any lease, license or other agreement to the extent that a grant of a security interest therein would violate or invalidate such lease, license or agreement or create a right of termination in favor of any other party thereto (other than the Issuer or any Subsidiary thereof) after giving effect to the anti-assignment provisions of applicable law;
(vi) those assets as to which the Issuer and the Required Noteholder Parties reasonably agree that the cost or other consequence of obtaining such a security interest or perfection thereof are excessive in relation to the value afforded thereby;
(vii) any governmental licenses or state or local franchises, charters or authorizations, to the extent a security interest in such licenses, franchises, charters or authorizations is prohibited or restricted thereby after giving effect to the anti-assignment provisions of applicable law;
(viii) pending “intent to use” trademark applications for which an Amendment to Allege Use or a Statement of Use under Section 1(c) or 1(d) of the ▇▇▇▇▇▇ Act has not been filed with or accepted by the United States Trademark Office;
(ix) any Excluded Account and any cash and Permitted Investments maintained in an Excluded Account;
(x) any Excluded Securities;
(xi) any Third Party Funds;
(xii) any equipment or other real or personal property or asset that is subject to a Lien permitted by clause (i) of Section 8.02 of the Indenture if permitted by Section 8.01 of the Indenture, if the agreement governing such Lien (or the Indebtedness secured thereby) prohibits or requires the consent of any person (other than the Issuer or any Subsidiary thereof) as a condition to the creation of any other security interest on such equipment or other real or personal property or asset and, in each case, such prohibition or requirement is permitted hereunder after giving effect to the applicable anti-assignment provisions of Article 9 of the Uniform Commercial Code; and
(xiii) any other property mutually agreed upon between the Issuer and the Required Noteholder Parties.
Appears in 2 contracts
Sources: Indenture (Ferroglobe PLC), Indenture (Ferroglobe PLC)
Additional Principles. The Agreed Security Principles embody the recognition by all parties that there may be certain legal and practical difficulties in obtaining effective or commercially reasonable guarantees and/or security from all relevant Foreign Subsidiaries in each jurisdiction Guarantors in which it has been agreed that guarantees and security will be granted by those membersForeign Guarantors. In particular:
(a) the security will be first ranking to the extent possible and subject to Liens permitted under the Loan Documents;
(b) general legal and statutory limitations, regulatory restrictions, financial assistance, rules relating to the making of distributions, upstream guarantees, anti-trust and other competition authority restrictions, corporate benefit, fraudulent preference, equitable subordination, “"transfer pricing”", “"thin capitalisation” (and in particular", guarantees and security shall not result in all or part of the Note Obligations being considered related debt for thin capitalisation purposes), “"earnings stripping”", “"exchange control restrictions”", “"capital maintenance” " rules and “"liquidity impairment” " rules, tax restrictions, retention of title claims, employee consultation or approval requirements and similar principles may limit the ability of a Foreign Subsidiary any Loan Party or their Subsidiaries in any jurisdiction outside of the United States of America to provide a guarantee or security or may require that the guarantee or security be limited as to amount or otherwise and, if so, the guarantee or security will be limited accordinglyaccordingly and any such guarantee limitations may be included in any accession document, joinder agreement, guarantee or Security Document, provided that, to the extent customary and if requested by the Trustee or the Collateral Agent (in each case, acting at the direction of the Required Noteholder Parties) before signing any applicable security or accession document, the relevant Foreign Subsidiary any Loan Party or their Subsidiaries shall use reasonable endeavors endeavours (for a period of not more than ten (10) Business Days but without incurring material cost and without adverse impact on relationships with third parties) to overcome any such obstacle or otherwise such guarantee or Security Document security document shall be subject to such limitlimit (except any Israeli Subsidiary shall not be required to obtain the approval of the court) and provided that, any payment obligation of ECI Telecom Group Ltd. or any Israeli Subsidiary controlled by it under any guarantee, indemnity, Security Document or other provision of the Loan Documents in respect of any part of the Secured Obligations that are Acquisition Funds shall only arise to the extent it will not constitute a “Prohibited Distribution" (Haluka Asura) within the meaning of Section 301(b) of the Israeli Companies Law. To the extent that any payment owing by any of the foregoing entities has not been paid in full as a result of the foregoing limitation, such unpaid amount shall be due and payable by the applicable Israeli Subsidiary at such time and to the extent that such limitation does not apply;
(bc) no Foreign Guarantor will be required to give guarantees or enter into security documents if that would conflict with the mandatory fiduciary duties of their or any Affiliates’ directors/managers or contravene any legal prohibition or result in a risk of personal or criminal liability on the part of any officer or member of such company, provided that the relevant Foreign Guarantor shall use reasonable endeavours to overcome any such obstacle to the extent that that can be done at reasonable cost (as determined by the Borrower and the Administrative Agent together acting in good faith);
(d) a key factor in determining whether or not a guarantee or security will be taken (and in respect of the security, the extent of its perfection and/or registration) is the applicable time and cost (including materially adverse effects on taxes, interest deductibility, stamp duty, registration taxes, notarial costs guarantee fees payable to any person that is not the Issuer or a Subsidiary thereof and all applicable legal fees) which will not be disproportionate to the benefit accruing to the Secured Parties of obtaining such guarantee or security, as determined in good faith by Issuer;
(ce) subject always guarantees and security will be limited so that the aggregate of notarial costs and all registration and like taxes and duties relating to sections 4 and 6 above, Foreign Subsidiaries the provision of security will not exceed an amount to be required to give guarantees or enter into Security Documents if it is not within agreed between the legal capacity of the relevant Foreign Subsidiary or if it would conflict with the fiduciary or statutory duties of their directors or contravene any applicable legal, regulatory or contractual prohibition or restriction, require the consent of any legal or regulatory authority or contractual counterparty or have the potential to result in a material risk of personal or criminal liability for any director or officer of or for the Issuer or any of its Subsidiaries, provided that, to the extent requested by the Trustee or Borrower and the Collateral Agent (in each case, acting at the direction of the Required Noteholder Parties) before signing any applicable Security Document or guaranty document, the relevant Foreign Subsidiary shall, in relation to a contractual restriction only, use reasonable endeavors (for a period of not more than ten (10) Business Days but without incurring material cost and without adverse impact on relationships with third parties) to overcome any such obstacle or otherwise such guarantee or Security Document shall be subject to such limitAgent;
(df) where a class of assets to be secured includes material and immaterial assets, if the cost of granting security over the immaterial assets is disproportionate to the benefit of such security, security will be granted over the material assets only;
(g) it is expressly acknowledged that it may be either impossible or impractical to create security over certain categories of assets, as determined in good faith by Issuer, assets in which event security will not be taken over such assets;
(eh) any asset subject to a legal requirement, contract, lease, licence, instrument, regulatory constraint (including any agreement with any government or regulatory body) or other third party arrangement, which may prevent or condition the asset from being charged, secured or being subject to the applicable security document (including requiring a consent of any third party, supervisory board or works council (or equivalent)) and any asset which, if subject to the applicable security document, would give a third party the right to terminate or otherwise amend any rights, benefits and/or obligations with respect to any Loan Party or their Subsidiaries in respect of the asset or require the relevant chargor to take any action materially adverse to the interests of any Loan Party or their Subsidiaries, in each case will be excluded from a guarantee or security document; provided that reasonable endeavours (exercised without incurring material cost) to obtain consent to charging any asset (where otherwise prohibited) shall be used by any Loan Party or their Subsidiaries if the Collateral Agent specifies prior to the date of the security or accession document that the asset is material and the Borrower is satisfied that such endeavours will not involve placing relationships with third parties in jeopardy;
(i) the giving of a guarantee, the granting of security and the registration and/or the perfection of the security granted will not be required if it would have an a material adverse effect on the ability of the relevant Foreign Subsidiary any Loan Party or their Subsidiaries to conduct its operations and business in the ordinary course as otherwise permitted by the Indenture Finance Documents (including dealing with the secured assets and all contractual counterparties or amending, waiving or terminating (or allowing to lapse) any rights, benefits or obligations, in each case prior to an Applicable Acceleration Event which is continuing), and any requirement under the Agreed Security Principles to seek consent of any person or take or not take any other action shall be subject to this paragraph (ei);
(fj) any security document will only be required to be notarized notarised if required by law in order for the relevant security to become effective or admissible in evidence;
(gk) if not required by the laws of the applicable Foreign Jurisdiction, no title investigations or other diligence on assets will be required and no title insurance will be required;
(hl) security will not be required over any cash constituting regulatory capital or customer cash (and such assets or cash shall be excluded from any relevant security document);
(m) to the extent legally effective, all security will be given in favour of the Collateral Agent and not the Secured Parties individuallyindividually (with the Collateral Agent to hold one set of security documents for all the Secured Parties); “"parallel debt” " provisions will be used where customary and necessary (and included in the Indenture credit agreement and not the individual security documents);
(in) neither the Issuer nor any Subsidiary no Loan Party will be required to take any action in relation to any guarantees or security as a result of any assignment, sub-participation or transfer by a Secured Party (and neither unless explicitly agreed to the Issuer nor any Subsidiary contrary in the Loan Documents no Loan Party shall bear or otherwise be liable for any taxes, any notarial registration or perfection fees or any other costs, fees or expenses that result from any assignment, sub-participation or transfer by a Secured Party);
(jo) other than a general each security agreement document shall be deemed not to restrict or condition any transaction not prohibited under the Loan Documents or otherwise permitted under the Loan Documents and related filingthe security granted under each security document entered into after the Closing Date shall be deemed to be subject to these Agreed Security Principles, no perfection, filing or other action will be required with respect to assets after the execution of a type not owned by the applicable Foreign Subsidiary Guarantorrelevant security document and creation of the relevant security;
(kp) no translation of any document relating to any security may be provided on terms which are inconsistent with the turnover or sharing provisions (or any asset subject to any security will be required to be prepared or provided to substantially equivalent provisions) in the Loan Documents;
(q) the Secured Parties (or any agent or similar representative appointed by them at the relevant time) unless will not be able to exercise any power of attorney or set-off granted to them under the terms of the Loan Documents prior to the occurrence of an Applicable Event which is continuing;
(ir) required no guarantee or security shall guarantee or secure any "Excluded Swap Obligations" defined in accordance with the LSTA Market Advisory Update dated February 15, 2013 entitled "Swap Regulations' Implications for such documents to become effective or admissible in evidenceLoan Documentation", and any update thereto by the LSTA;
(iis) an Applicable Acceleration Event is continuing; providedthe closure, howeverunavailability, if or reduced service of any governmental or regulatory systems, any functions or any facilities (including notarial or legal facilities) necessary or customarily used for the Collateral Agent granting of security or guarantees, or the Trustee is asked taking of any perfection requirements in connection therewith, may affect and/or delay the ability of any Loan Party or their Subsidiaries to sign provide a document guarantee or security or take any related steps in a language other than English, a courtesy translation shall be provided at the expense of the Issuer (upon which translation the Collateral Agent shall conclusively rely); andconnection with any perfection requirements;
(lt) no each security shall be required document must contain a clause substantially similar to be provided over any of the following propertyfollowing:
(iu) any Real Property other than Material Real Property;
(ii) (x) motor vehicles and other assets subject to certificates of title and letter of credit rights (in each case, other than to where the extent a Lien on such assets or such rights can be perfected by filing of a general notice filing or similar) and (y) commercial tort claims with a value of less than $10,000,000;
(iii) pledges and security interests prohibited by applicable law, rule, regulation or contractual obligation (with respect to any such contractual obligation, only to the extent such restriction is permitted under Section 8.09(c) of the Indenture and such restriction is binding on such assets on the Closing Date or on the date of acquisition thereof and not entered into in contemplation thereof (and renewals and replacements thereof) (in each case, except to the extent such prohibition is unenforceable after giving effect to the anti-assignment provisions of applicable law) or which would require governmental (including regulatory) consent, approval, license or authorization to be pledged (unless such consent, approval, license or authorization has been received);
(iv) assets to the extent a security interest in such assets could reasonably be expected to result in material adverse tax consequences as determined in good faith by the Issuer in consultation with the Required Noteholder Parties;
(v) any lease, license or other agreement to the extent that a grant terms of a security interest therein would violate or invalidate such lease, license or agreement or create document require a right of termination in favor of any other party thereto (other than the Issuer a Secured Party) to use its reasonable efforts, reasonable endeavours or a similar or equivalent standard in taking an action thereunder, notwithstanding any Subsidiary thereof) after giving effect meaning to the anti-assignment provisions of applicable law;
(vi) those assets contrary as to which the Issuer and the Required Noteholder Parties reasonably agree that the cost or other consequence of obtaining such a security interest or perfection thereof are excessive in relation to the value afforded thereby;
(vii) any governmental licenses or state or local franchises, charters or authorizations, to the extent a security interest in such licenses, franchises, charters or authorizations is prohibited or restricted thereby after giving effect to the anti-assignment provisions of applicable law;
(viii) pending “intent to use” trademark applications for which an Amendment to Allege Use or a Statement of Use under Section 1(c) or 1(d) matter of the ▇▇▇▇▇▇ Act has not been filed governing law of such security document, such standards shall be interpreted and construed in accordance with the law of New York and no Default or accepted by the United States Trademark Office;
Event of Default (ixhowsoever described) shall arise under any Excluded Account and any cash and Permitted Investments maintained Loan Document in an Excluded Account;
(x) any Excluded Securities;
(xi) any Third Party Funds;
(xii) any equipment or other real or personal property or asset that is subject to respect of a Lien permitted by clause (i) breach of Section 8.02 such obligation because a contrary construction of the Indenture if permitted by Section 8.01 of the Indenture, if the agreement governing such Lien provision was taken (or the Indebtedness secured thereby) prohibits or requires the consent would be taken by any applicable court of any person (other than the Issuer or any Subsidiary thereof) as a condition to the creation of any other security interest on such equipment or other real or personal property or asset and, in each case, such prohibition or requirement is permitted hereunder after giving effect to the applicable anti-assignment provisions of Article 9 of the Uniform Commercial Code; and
(xiii) any other property mutually agreed upon between the Issuer and the Required Noteholder Partiescompetent jurisdiction).
Appears in 1 contract