Abl Guarantee And Collateral Agreement

Exhibit 10.2



EXECUTION COPY



















ABL GUARANTEE AND COLLATERAL AGREEMENT



dated as of



September 28, 2007,



among



SPECTRUM BRANDS, INC.,



THE SUBSIDIARIES OF SPECTRUM BRANDS, INC.

IDENTIFIED HEREIN



and



WACHOVIA BANK, NATIONAL ASSOCIATION,



as the Collateral Agent























Table of Contents



TABLE OF CONTENTS





ARTICLE I



Definitions

SECTION 1.01. Credit Agreement 1
SECTION 1.02. Other Defined Terms 1

ARTICLE II



Guarantee
5
SECTION 2.01. Guarantee 6
SECTION 2.02. Guarantee of Payment 6
SECTION 2.03 No Limitations 7
SECTION 2.04. Reinstatement 7
SECTION 2.05. Agreement To Pay; Subrogation 7
SECTION 2.06. Information

ARTICLE III



Security Interests in Personal Property

SECTION 3.01. Security Interest 7
SECTION 3.02. Representations and Warranties 8
SECTION 3.03. Covenants 9
SECTION 3.04. Other Actions 12

ARTICLE IV



Remedies

SECTION 4.01. Remedies Upon Default 14
SECTION 4.02. Application of Proceeds 16

ARTICLE V



Indemnity, Subrogation and Subordination

SECTION 5.01. Indemnity and Subrogation 17
SECTION 5.02. Contribution and Subrogation 17
SECTION 5.03. Subordination 18






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ARTICLE VI



Miscellaneous

SECTION 6.01. Notices 18
SECTION 6.02. Waivers; Amendment 18
SECTION 6.03. Collateral Agent's Fees and Expenses; Indemnification 19
SECTION 6.04. Successors and Assigns 19
SECTION 6.05. Survival of Agreement 20
SECTION 6.06. Counterparts; Effectiveness; Several Agreement 20
SECTION 6.07. Severability 20
SECTION 6.08. Right of Set-Off 21
SECTION 6.09. Governing Law; Jurisdiction; Consent to Service of Process 21
SECTION 6.10. WAIVER OF JURY TRIAL 22
SECTION 6.11. Headings 22
SECTION 6.12. Security Interest Absolute 22
SECTION 6.13. Termination or Release 22
SECTION 6.14. Additional Subsidiaries 23
SECTION 6.15. Collateral Agent Appointed Attorney-in-Fact 23








Table of Contents







Schedules

Schedule I Subsidiary Loan Parties

Exhibits

Exhibit I Form of Supplement
Exhibit II Form of Perfection Certificate












Table of Contents





ABL GUARANTEE AND COLLATERAL AGREEMENT dated as of September 28, 2007, among SPECTRUM BRANDS, INC., a Wisconsin corporation (the " Borrower "), the SUBSIDIARIES of the Borrower identified herein and WACHOVIA BANK, NATIONAL ASSOCIATION, as the Collateral Agent.



Reference is made to the Credit Agreement dated as of September 28, 2007 (as amended, supplemented or otherwise modified from time to time, the " Credit Agreement "), among the Borrower, the other Loan Parties party thereto, the Lenders party thereto, Wachovia Bank, National Association, as the Administrative Agent, the Collateral Agent and an LC Issuer, and Goldman Sachs Credit Partners L.P., as the Syndication Agent. The Lenders and the LC Issuers have agreed to extend credit to the Borrower subject to the terms and conditions set forth in the Credit Agreement. The obligations of the Lenders and the LC Issuers to extend such credit are conditioned upon, among other things, the execution and delivery of this Agreement. The Subsidiary Loan Parties are, or are Affiliates of, the Borrower, will derive substantial benefits from the extension of credit to the Borrower pursuant to the Credit Agreement and are willing to execute and deliver this Agreement in order to induce the Lenders and the LC Issuers to extend such credit. Accordingly, the parties hereto agree as follows:



ARTICLE I



Definitions



SECTION 1.01. Credit Agreement . (a) Capitalized terms used in this Agreement (including the preliminary statement hereto) and not otherwise defined herein have the meanings specified in the Credit Agreement. All terms defined in the New York UCC (as defined herein) and not defined in this Agreement or in the Credit Agreement have the meanings specified therein; the term "instrument" shall have the meaning specified in Article 9 of the New York UCC.



(b) The rules of construction specified in Section 1.02 of the Credit Agreement also apply to this Agreement.



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



" ABL Collateral " means any and all of the following assets and property of any Loan Party, whether real, personal or mixed: (a) all Accounts (other than Accounts arising under contracts for the sale of Non-ABL Collateral) and related Records; (b) all Chattel Paper; (c) all Deposit Accounts and all cash, checks and other negotiable instruments, funds and other evidences of payment held therein (but not any identifiable Proceeds of Non-ABL Collateral); (d) all Inventory; (e) solely to the extent evidencing, governing, securing or otherwise related to the items referred to in the preceding clauses (a), (b), (c) and (d), all Documents, General Intangibles (other than Intellectual Property), Instruments, Investment Property and Letter of Credit Rights; (f) all books and






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records related to the foregoing; and (g) all Proceeds, including insurance Proceeds, of any and all of the foregoing and all collateral, security and guarantees given by any Person with respect to any of the foregoing. Notwithstanding clause (g) of the immediately preceding sentence, "ABL Collateral" shall not include any assets referred to in clauses (a) through (j) and (l) of the definition of "Non-ABL Collateral" that are not included in clause (e) above. All capitalized terms used in this definition and not defined elsewhere in this Agreement have the meanings assigned to them in the New York UCC.



" Account " has the meaning assigned to such term in Section 9-102 of the New York UCC.



" Account Debtor " means any Person who is or who may become obligated to any Loan Party under, with respect to or on account of an Account.



" Borrower " has the meaning assigned to such term in the preliminary statement to 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 Loan Party or that such Loan Party otherwise has the right to license, or granting any right to any Loan Party under any copyright now or hereafter owned by any third party, and all rights of such Loan Party under any such agreement.



" Copyrights " means all of the following now owned or hereafter acquired by any Loan Party: (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.



" Credit Agreement " has the meaning assigned to such term in the preliminary statement to this Agreement.



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



" Inventory " has the meaning assigned to such term in Section 9-102 of the New York UCC.



" Lender Party " means each Lender, each Agent, each Arranger, each LC Issuer and each of their respective Affiliates (including any Person that is a Lender, an Agent or an LC Issuer (or that is such an Affiliate) as of the Closing Date but




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subsequently ceases to be a Lender, an Agent or an LC Issuer (or such an Affiliate), as the case may be, if such Person is a counterparty to any Swap Contract with any Loan Party or provides any cash management services to any Loan Party).



" License " means any Patent License, Trademark License, Copyright License or other license or sublicense agreement to which any Loan Party is a party.



" Loan Parties " means, collectively, the Borrower and the Subsidiary Loan Parties.



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



" Non-ABL Collateral " means any and all of the following assets and property of any Loan Party, whether real, personal or mixed: (a) all Investment Property; (b) all Documents; (c) all General Intangibles; (d) all Intellectual Property; (e) all Equipment; (f) all real property (including both fee and leasehold interests) and fixtures; (g) all Instruments; (h) all insurance; (i) all Letter of Credit Rights; (j) all Commercial Tort Claims; (k) all other assets and property not constituting ABL Collateral; (l) all books and records related to the foregoing; and (m) all Proceeds, including insurance Proceeds, of any and all of the foregoing and all collateral security and guarantees given by any Person with respect to any of the foregoing. Notwithstanding the foregoing, "Non-ABL Collateral" shall not include any assets or property included in clause (e) of the definition of "ABL Collateral" or any assets or property excluded pursuant to the terms of the Term Collateral Documents. All capitalized terms used in this definition and not defined elsewhere in this Agreement have the meanings assigned to them in the New York UCC.



" Obligations " means (a) the due and punctual payment by the Borrower of (i) the principal of and interest (including interest accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding) on the Loans, when and as due, whether at maturity, by acceleration, upon one or more dates set for prepayment or otherwise, (ii) each payment required to be made by the Borrower under any Loan Document in respect of any Letter of Credit, when and as due, including payments in respect of reimbursement of LC Disbursements, interest thereon (including interest accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding) and obligations to provide cash collateral and (iii) all other monetary obligations of the Borrower to any of the Secured Parties under the Credit Agreement and each of the other Loan Documents, including expense reimbursement obligations and indemnification obligations, whether primary, secondary, direct, contingent, fixed or otherwise (including monetary obligations incurred, and any interest thereon accruing, during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), (b) the due and punctual payment of all the monetary obligations of each other Loan Party under or pursuant to the Credit Agreement and each of the other Loan Documents (including monetary obligations incurred, and any






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interest thereon accruing, during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), (c) the due and punctual payment and performance of all monetary obligations of each Loan Party under each Swap Contract with a counterparty that is a Lender Party (whether such Swap Contract is in effect on the Closing Date or entered into after the Closing Date), other than any such Swap Contract with respect to which the Lender Party that is the counterparty thereto shall have agreed in writing that such Swap Contract shall be deemed not to be a "Swap Contract" for purposes of this clause (c) (a copy of such writing to be delivered to the Collateral Agent), and (d) the due and punctual payment and performance of all monetary obligations of each Loan Party to any Lender Party in respect of cash management services (including treasury, depository, overdraft, credit or debit card (including non-card e-payable services), electronic funds transfer and other cash management arrangements) (other than cash management services provided after (i) the principal of each Loan and all LC Disbursements, interest and fees payable under the Credit Agreement have been paid in full, (ii) all Commitments under the Credit Agreement have been reduced to zero and (iii) no LC Issuer shall have any obligation to issue Letters of Credit under the Credit Agreement and no Letter of Credit shall be outstanding (other than any Letter of Credit the obligations under which have been cash collateralized in full or supported in full by letters of credit of other banks naming the applicable LC Issuer as the beneficiary, in each case, in a manner satisfactory to the applicable LC Issuer)).



" 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 Loan Party or that any Loan Party otherwise has the right to license, is in existence, or granting to any Loan Party 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 Loan Party under any such agreement.



" Patents " means all of the following now owned or hereafter acquired by any Loan Party: (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 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 a Responsible Officer of the Borrower.



" Proceeds " has the meaning assigned to such term in Section 9-102 of the New York UCC.




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" Secured Parties " means (a) the Lenders, (b) the Administrative Agent, (c) the Collateral Agent, (d) the Syndication Agent, (e) the Arrangers, (f) the LC Issuers, (g) the Lender Parties to whom any of the Obligations are owed and (h) the permitted successors and assigns of each of the foregoing.



" Security Interest " has the meaning assigned to such term in Section 3.01(a).



" Subsidiary Loan Parties " means (a) the Subsidiaries identified on Schedule I and (b) each other Subsidiary that becomes a party to this Agreement as a Subsidiary Loan Party after the Closing Date.



" Term Collateral Documents " has the meaning assigned to such term in the ABL Intercreditor Agreement.



" Term Liens " has the meaning assigned to such term in the ABL Intercreditor Agreement.



" 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 Loan Party or that any Loan Party otherwise has the right to license, or granting to any Loan Party any right to use any trademark now or hereafter owned by any third party, and all rights of any Loan Party under any such agreement.



" Trademarks " means all of the following now owned or hereafter acquired by any Loan Party: (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 and other 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 and (b) all goodwill associated therewith or symbolized thereby.



ARTICLE II



Guarantee



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






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



SECTION 2.03. No Limitations . (a) Except for termination of a Loan Party's obligations hereunder as expressly provided in Section 6.13, the obligations of each Loan Party hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason, including any claim of waiver, release, surrender, alteration or compromise of any Obligations, and shall not be subject to any defense or set-off, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality or unenforceability of the Obligations or otherwise. Without limiting the generality of the foregoing, the obligations of each Loan Party hereunder shall not be discharged or impaired or otherwise affected by (i) the failure of the Collateral Agent or any other Secured Party to assert any claim or demand or to enforce any right or remedy under the provisions of any Loan Document or otherwise; (ii) any rescission, waiver, amendment or modification of, or any release from any of the terms or provisions of, any Loan Document or any other agreement, including with respect to any other Loan Party under this Agreement; (iii) the release of, or any impairment of or failure to perfect any Lien on or security interest in, any security held by the Collateral Agent or any other Secured Party for the Obligations or any of them; (iv) any default, failure or delay, wilful or otherwise, in the performance of the Obligations; or (v) any other act or omission that may or might in any manner or to any extent vary the risk of any Loan Party or otherwise operate as a discharge of any Loan Party as a matter of law or equity (other than the indefeasible payment in full in cash of all the Obligations). Each Loan Party expressly authorizes the Secured Parties to take and hold security in accordance with the terms of this Agreement and the other Loan Documents for the payment and performance of the Obligations, to exchange, waive or release any or all such security (with or without consideration), to enforce or apply such security and direct the order and manner of any sale thereof in their sole discretion or to release or substitute any one or more other Loan Parties or obligors upon or in respect of the Obligations, all without affecting the obligations of any Loan Party hereunder.



(b) To the fullest extent permitted by applicable Law, each Loan Party waives any defense based on or arising out of any defense of the Borrower or any other Loan Party or the unenforceability of the Obligations or any part thereof from any cause, or the cessation from any cause of the liability of the Borrower or any other Loan Party, other than the indefeasible payment in full in cash of all the Obligations. The Collateral Agent and the other Secured Parties may, at their election, foreclose on any security held by one or more of them in accordance with the terms of this Agreement and the other Loan Documents by one or more judicial or nonjudicial sales, accept an assignment of any such security in lieu of foreclosure, compromise or adjust any part of the Obligations, make any other accommodation with the Borrower or any other Loan Party or exercise any other right or remedy available to them against the Borrower or any other Loan Party, without affecting or impairing in any way the liability of any Loan Party hereunder




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except to the extent the Obligations have been fully and indefeasibly paid in full in cash. To the fullest extent permitted by applicable Law, each Loan Party waives any defense arising out of any such election even though such election operates, pursuant to applicable Law, to impair or to extinguish any right of reimbursement or subrogation or other right or remedy of such Loan Party against the Borrower or any other Loan Party, as the case may be, or any security.



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



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



SECTION 2.06. Information . Each Loan Party assumes all responsibility for being and keeping itself informed of the Borrower's and each other Loan Party ?s financial condition and assets, and of all other circumstances bearing upon the risk of nonpayment of the Obligations and the nature, scope and extent of the risks that such Loan Party assumes and incurs hereunder, and agrees that neither the Collateral Agent nor any of the other Secured Parties will have any duty to advise such Loan Party of information known to it or any of them regarding such circumstances or risks.



ARTICLE III



Security Interests in Personal Property



SECTION 3.01. Security Interest . (a) As security for the payment in full of the Obligations, each Loan Party hereby 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, to and under any and all of the ABL Collateral now owned or at any time hereafter acquired by such Loan Party or in which such Loan Party now has or at any time in the future may acquire any right, title or interest.






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(b) Each Loan Party hereby irrevocably authorizes the Collateral Agent at any time and from time to time to file in any relevant jurisdiction any initial financing statements with respect to the ABL Collateral or any part thereof and amendments thereto and continuations thereof 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 whether such Loan Party is an organization, the type of organization and any organizational identification number issued to such Loan Party. Each Loan Party agrees to provide such information to the Collateral Agent promptly upon request. Without limiting the foregoing, each Loan Party hereby irrevocably authorizes the Collateral Agent at any time and from time to time to file in any relevant jurisdiction financing statements that describe the ABL Collateral as "all assets, whether now owned or hereafter acquired" of such Loan Party, or words of similar effect as being of an equal or lesser scope or with greater detail. Each Loan Party 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.



(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 Loan Party with respect to or arising out of the ABL Collateral (other than the duties expressly created hereunder).



SECTION 3.02. Representations and Warranties . The Loan Parties jointly and severally represent and warrant to the Collateral Agent and the other Secured Parties that:



(a) Each Loan Party has good and valid rights in and title to the ABL Collateral with respect to which it has purported to grant a Security Interest hereunder and has full power and authori ...