EXHIBIT 10.2
U.S. GUARANTEE AND COLLATERAL AGREEMENT
dated and effective as of
November 4, 2003,
among
NALCO HOLDINGS LLC,
NALCO COMPANY,
each Domestic Subsidiary of Holdings
identified herein,
and
CITICORP NORTH AMERICA, INC.,
as Collateral Agent
TABLE OF CONTENTS
Page
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ARTICLE I.
Definitions
SECTION 1.01. Credit Agreement............................................................1
SECTION 1.02. Other Defined Terms.........................................................2
ARTICLE II.
Guarantee
SECTION 2.01. Guarantee...................................................................5
SECTION 2.02. Guarantee of Payment........................................................5
SECTION 2.03. No Limitations, Etc.........................................................5
SECTION 2.04. Reinstatement...............................................................7
SECTION 2.05. Agreement To Pay; Subrogation...............................................8
SECTION 2.06. Information.................................................................8
SECTION 2.07. Maximum Liability...........................................................8
ARTICLE III.
Pledge of Securities
SECTION 3.01. Pledge......................................................................8
SECTION 3.02. Delivery of the Pledged Collateral..........................................9
SECTION 3.03. Representations, Warranties and Covenants..................................10
SECTION 3.04. Certification of Limited Liability Company and Limited
Partnership Interests....................................................11
SECTION 3.05. Registration in Nominee Name; Denominations................................11
SECTION 3.06. Voting Rights; Dividends and Interest, etc.................................12
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ARTICLE IV.
Security Interests in Personal Property
SECTION 4.01. Security Interest..........................................................13
SECTION 4.02. Representations and Warranties.............................................15
SECTION 4.03. Covenants..................................................................17
SECTION 4.04. Other Actions..............................................................19
SECTION 4.05. Covenants Regarding Patent, Trademark and Copyright Collateral.............20
ARTICLE V.
Remedies
SECTION 5.01. Remedies Upon Default......................................................22
SECTION 5.02. Application of Proceeds....................................................24
SECTION 5.03. Grant of License to Use Intellectual Property..............................24
SECTION 5.04. Securities Act, etc........................................................25
SECTION 5.05. Registration, etc..........................................................25
ARTICLE VI.
Indemnity, Subrogation and Subordination
SECTION 6.01. Indemnity and Subrogation..................................................26
SECTION 6.02. Contribution and Subrogation...............................................26
SECTION 6.03. Subordination..............................................................26
ARTICLE VII.
Miscellaneous
SECTION 7.01. Notices....................................................................27
SECTION 7.02. Security Interest Absolute.................................................27
SECTION 7.03. [Reserved].................................................................27
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SECTION 7.04. Binding Effect; Several Agreement..........................................27
SECTION 7.05. Successors and Assigns.....................................................28
SECTION 7.06. Collateral Agent's Fees and Expenses; Indemnification......................28
SECTION 7.07. Collateral Agent Appointed Attorney-in-Fact................................28
SECTION 7.08. GOVERNING LAW..............................................................29
SECTION 7.09. Waivers; Amendment.........................................................29
SECTION 7.10. WAIVER OF JURY TRIAL.......................................................30
SECTION 7.11. Severability...............................................................30
SECTION 7.12. Counterparts...............................................................30
SECTION 7.13. Headings...................................................................30
SECTION 7.14. Jurisdiction; Consent to Service of Process................................30
SECTION 7.15. Termination or Release.....................................................31
SECTION 7.16. Additional Subsidiaries....................................................31
SECTION 7.17. Right of Set-off...........................................................32
Schedules
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Schedule I Subsidiary Parties
Schedule II Capital Stock; Debt Securities
Schedule III Intellectual Property
Schedule IV Limited Liability Company Interests
Exhibits
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Exhibit I Form of Supplement to the U.S. Guarantee and Collateral Agreement
Exhibit II Form of U.S. Perfection Certificate
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U.S. GUARANTEE AND COLLATERAL AGREEMENT dated and effective as of November
4, 2003 (this "Agreement"), among NALCO HOLDINGS LLC, a Delaware limited
liability company ("Holdings"), NALCO COMPANY, a Delaware corporation (the "U.S.
Borrower"), each Domestic Subsidiary of Holdings identified herein (each, a
"Subsidiary Party") and CITICORP NORTH AMERICA, INC., as Collateral Agent (in
such capacity, the "Collateral Agent") for the Secured Parties (as defined
below).
Reference is made to the Credit Agreement dated as of November 4, 2003 (as
amended, supplemented, waived or otherwise modified from time to time, the
"Credit Agreement"), among NALCO HOLDINGS LLC, a Delaware limited liability
company ("Holdings"), NALCO COMPANY, a Delaware corporation (the "U.S.
Borrower"), the Foreign Subsidiary Borrowers from time to time party thereto
(the "Foreign Subsidiary Borrowers" and collectively with the U.S. Borrower, the
"Borrowers"), the LENDERS party thereto from time to time, CITIGROUP GLOBAL
MARKETS INC. ("CGMI") and BANC OF AMERICA SECURITIES LLC ("BAS"), as global
coordinators (in such capacity, the "Global Coordinators"), CITICORP NORTH
AMERICA, INC., as administrative agent (in such capacity, the "Administrative
Agent") and as collateral agent (in such capacity, the "Collateral Agent") for
the Lenders, BANK OF AMERICA, N.A., as documentation agent (in such capacity,
the "Documentation Agent"), DEUTSCHE BANK SECURITIES INC. ("DBSI"), X.X. XXXXXX
SECURITIES INC. ("JPMSI"), XXXXXXX SACHS CREDIT PARTNERS L.P. ("GSCP") and UBS
SECURITIES LLC ("UBSS"), each as co-syndication agent (in such capacity, a
"Co-Syndication Agent"), and CGMI, BAS, DBSI, JPMSI, GSCP and UBSS, as joint
lead arrangers and joint book managers (in such capacity, the "Joint Lead
Arrangers").
The Lenders have agreed to extend credit to the Borrowers subject to the
terms and conditions set forth in the Credit Agreement. The obligations of the
Lenders to extend such credit are conditioned upon, among other things, the
execution and delivery of this Agreement. In addition, the Borrowers and the
Guarantors have agreed to take the actions set forth on Schedule 5.15 to the
Credit Agreement after the Closing Date (as defined in the Credit Agreement).
Holdings and the Subsidiary Parties are affiliates of the Borrowers, will derive
substantial benefits from the extension of credit to the Borrowers pursuant to
the Credit Agreement and are willing to execute and deliver this Agreement in
order to induce the Lenders 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 and not otherwise defined herein have the respective meanings assigned
thereto in the Credit Agreement. 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.
(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:
"Account Debtor" means any person who is or who may become obligated to any
Guarantor under, with respect to or on account of an Account.
"Article 9 Collateral" has the meaning assigned to such term in Section
4.01.
"Collateral" means Article 9 Collateral and Pledged Collateral.
"Control Agreement" means a securities account control agreement or
commodity account control agreement, as applicable, in form and substance
reasonably satisfactory to the Collateral Agent.
"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 Guarantor or that any Guarantor otherwise has the right
to license, or granting any right to any Guarantor under any Copyright now or
hereafter owned by any third party, and all rights of any Guarantor under any
such agreement.
"Copyrights" means all of the following now owned or hereafter acquired by
any Guarantor: (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, supplemental registrations and pending applications for
registration in the United States Copyright Office, including those listed on
Schedule III.
"Credit Agreement" has the meaning assigned to such term in the preliminary
statement of this Agreement.
"Federal Securities Laws" has the meaning assigned to such term in Section
5.04.
"General Intangibles" means all "General Intangibles" as defined in the New
York UCC, including all choses in action and causes of action and all other
intangible personal property of any Guarantor of every kind and nature (other
than Accounts) now owned or hereafter acquired by any Guarantor, including
corporate or other business records, indemnification claims, contract rights
(including rights under leases, whether entered into as lessor or lessee, Swap
Agreements and other agreements), Intellectual Property, goodwill,
registrations, franchises, tax refund claims and any letter of credit,
guarantee, claim, security interest or other security held by or granted to any
Guarantor to secure payment by an Account Debtor of any of the Accounts.
"Guarantors" means Holdings, the U.S. Borrower, and the Subsidiary Parties.
"Intellectual Property" means all intellectual and similar property of
every kind and nature now owned or hereafter acquired by any Guarantor,
including inventions, designs, Patents, Copyrights, Trademarks, Patent Licenses,
Copyright Licenses, Trademark Licenses,
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trade secrets, domain names, confidential or proprietary technical and business
information, know-how, show-how or other data or information and all related
documentation.
"Loan Document Obligations" means (a) the due and punctual payment by each
Borrower of (i) the unpaid 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 made to such Borrower, 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 such Borrower under the
Credit Agreement in respect of any Letter of Credit, when and as due, including
payments in respect of reimbursement of 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 such Borrower to any of the Secured
Parties under the Credit Agreement and each of the other Loan Documents,
including obligations to pay fees, expense and reimbursement obligations and
indemnification obligations, whether primary, secondary, direct, contingent,
fixed or otherwise (including monetary obligations incurred during the pendency
of any bankruptcy, insolvency, receivership or other similar proceeding,
regardless of whether allowed or allowable in such proceeding), (b) the due and
punctual performance of all other obligations of each Borrower under or pursuant
to the Credit Agreement and each of the other Loan Documents and (c) the due and
punctual payment and performance of all the obligations of each other Loan Party
under or pursuant to this Agreement and each of the other Loan Documents.
"New York UCC" means the Uniform Commercial Code as from time to time in
effect in the State of New York.
"Obligations" means (a) the Loan Document Obligations, (b) the due and
punctual payment and performance of all obligations of each Loan Party or
Foreign Subsidiary under each Swap Agreement that (i) is in effect on the
Closing Date with a counterparty that is a Lender or an Affiliate of a Lender as
of the Closing Date or (ii) is entered into after the Closing Date with any
counterparty that is a Lender or an Affiliate of a Lender at the time such Swap
Agreement is entered into, (c) the due and punctual payment and performance of
all obligations of Foreign Subsidiaries under Indebtedness incurred pursuant to
committed and uncommitted working capital facilities (to the extent such
Indebtedness is permitted under Section 6.01(a) of the Credit Agreement and is
identified as ordinary working capital Indebtedness on Schedule 6.01 of the
Credit Agreement that will be secured by a Lien on the Collateral or is
Permitted Refinancing Indebtedness of any such identified Indebtedness that is
incurred for working capital purposes in the ordinary course of business on
ordinary business terms) that is with a counterparty that is a Lender or an
Affiliate of a Lender as of the Closing Date and (d) the due and punctual
payment and performance of all obligations of U.S. Borrower and any of its
subsidiaries in respect of overdrafts and related liabilities owed to a Lender
or any of its Affiliates and arising from cash management services (including
treasury, depository, overdraft, credit or debit card, electronic funds transfer
and other cash management arrangements).
"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 covered
by a Patent, now
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or hereafter owned by any Guarantor or that any Guarantor otherwise has the
right to license or granting to any Guarantor any right to make, use or sell any
invention covered by a Patent, now or hereafter owned by any third party.
"Patents" means all of the following now owned or hereafter acquired by any
Guarantor: (a) all letters patent of the United States or the equivalent thereof
in any other country, and all applications for letters patent of the United
States or the equivalent thereof in any other country, including those listed on
Schedule III, and (b) all reissues, continuations, divisions,
continuations-in-part or extensions thereof, and the inventions disclosed or
claimed therein, including the right to make, use and/or sell the inventions
disclosed or claimed therein.
"Pledged Collateral" has the meaning assigned to such term in Section 3.01.
"Pledged Debt Securities" has the meaning assigned to such term in Section
3.01.
"Pledged Securities" means any promissory notes, stock certificates or
other certificated securities now or hereafter included in the Pledged
Collateral, including all certificates, instruments or other documents
representing or evidencing any Pledged Collateral.
"Pledged Stock" has the meaning assigned to such term in Section 3.01.
"Pledgor" shall mean each Guarantor.
"Secured Parties" means (a) the Lenders (and any Affiliate of a Lender to
which any obligation referred to in clause (d) of the definition of the term
"Obligations" is owed), (b) the Administrative Agent, (c) each Issuing Bank, (d)
each counterparty to any Swap Agreement entered into with a Loan Party the
obligations under which constitute Obligations, (e) each counterparty to any
local working capital indebtedness of a Foreign Subsidiary the obligations under
which constitute Obligations pursuant to clause (c) of the definition of such
term, (f) the beneficiaries of each indemnification obligation undertaken by any
Loan Party under any Loan Document and (g) the successors and permitted assigns
of each of the foregoing.
"Security Interest" has the meaning assigned to such term in Section 4.01.
"Sovereign Risk Event" shall mean any event referred to in Section
2.03(a)(ix).
"Subsidiary Party" has the meaning assigned to such term in the preliminary
statement of this 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 Guarantor or that any Guarantor otherwise has the right
to license, or granting to any Guarantor any right to use any Trademark now or
hereafter owned by any third party.
"Trademarks" means all of the following now owned or hereafter acquired by
any Guarantor: (a) all trademarks, service marks, 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
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registrations thereof (if any), 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 renewals thereof, including those listed on
Schedule III and (b) all goodwill associated therewith or symbolized thereby.
"U.S. 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 Financial Officer of the U.S.
Borrower and the chief legal officer of the U.S. Borrower.
ARTICLE II.
Guarantee
SECTION 2.01. Guarantee. Each Guarantor unconditionally guarantees, jointly
with the other Guarantors and severally, as a primary obligor and not merely as
a surety, the due and punctual payment and performance of the Obligations. Each
Guarantor further agrees that the Obligations may be extended or renewed, in
whole or in part, without notice to or further assent from it, and that it will
remain bound upon its guarantee notwithstanding any extension or renewal of any
Obligation. Each Guarantor waives presentment to, demand of payment from and
protest to any 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.
SECTION 2.02. Guarantee of Payment. Each Guarantor 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 any
Borrower or any other person.
SECTION 2.03. No Limitations, Etc. (a) Except for termination of a
Guarantor's obligations hereunder as expressly provided for in Section 7.15, the
obligations of each Guarantor hereunder shall not be subject to any reduction,
limitation, impairment or termination for any reason, including any claim of
waiver, release, surrender, alteration or compromise, and shall not be subject
to any defense or setoff, counterclaim, recoupment or termination whatsoever by
reason of the invalidity, illegality or unenforceability of the Obligations or
otherwise. Without limiting the generality of the foregoing, the obligations of
each Guarantor hereunder shall not be discharged or impaired or otherwise
affected by:
(i) the failure of the Administrative Agent, the Collateral Agent or
any other Secured Party to assert any claim or demand or to exercise or
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 Guarantor under this
Agreement;
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(iii) the failure to perfect any security interest in, or the
exchange, substitution, release or any impairment of, any security held by
the Collateral Agent or any other Secured Party for the Obligations;
(iv) any default, failure or delay, willful or otherwise, in the
performance of the Obligations;
(v) any other act or omission that may or might in any manner or to
any extent vary the risk of any Guarantor or otherwise operate as a
discharge of any Guarantor as a matter of law or equity (other than the
indefeasible payment in full in cash of all the Obligations),
(vi) any illegality, lack of validity or enforceability of any
Obligation,
(vii) any change in the corporate existence, structure or ownership of
any Borrower, or any insolvency, bankruptcy, reorganization or other
similar proceeding affecting any Borrower or its assets or any resulting
release or discharge of any Obligation,
(viii) the existence of any claim, set-off or other rights that the
Guarantor may have at any time against any Borrower, the Collateral Agent,
or any other corporation or person, whether in connection herewith or any
unrelated transactions, provided that nothing herein will prevent the
assertion of any such claim by separate suit or compulsory counterclaim,
(ix) any law, regulation or order of any jurisdiction, or any other
event, affecting any term of any Obligation or the Collateral Agent's
rights with respect thereto, including, without limitation:
(A) the application of any such law, regulation, decree or order,
including any prior approval, which would prevent the exchange of a
foreign currency for Dollars or the remittance of funds outside of
such jurisdiction or the unavailability of Dollars in any legal
exchange market in such jurisdiction in accordance with normal
commercial practice; or
(B) a declaration of banking moratorium or any suspension of
payments by banks in such jurisdiction or the imposition by such
jurisdiction or any governmental authority thereof of any moratorium
on, the required rescheduling or restructuring of, or required
approval of payments on, any indebtedness in such jurisdiction; or
(C) any expropriation, confiscation, nationalization or
requisition by such country or any governmental authority that
directly or indirectly deprives any Borrower of any assets or their
use, or of the ability to operate its business or a material part
thereof; or
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(D) any war (whether or not declared), insurrection, revolution,
hostile act, civil strife or similar events occurring in such
jurisdiction which has the same effect as the events described in
clause (A), (B) or (C) above (in each of the cases contemplated in
clauses (A) through (D) above, to the extent occurring or existing on
or at any time after the date of this Guaranty),
(x) and any other circumstance (including without limitation, any
statute of limitations) or any existence of or reliance on any
representation by the Collateral Agent that might otherwise constitute a
defense to, or a legal or equitable discharge of, any Borrower or the
Guarantor or any other guarantor or surety.
Each Guarantor expressly authorizes the Secured Parties to take and hold
security for the payment and performance of the Obligations, to exchange, waive
or release any or all such security (with or without consideration), to enforce
or apply such security and direct the order and manner of any sale thereof in
their sole discretion or to release or substitute any one or more other
guarantors or obligors upon or in respect of the Obligations, all without
affecting the obligations of any Guarantor hereunder.
Without limiting the generality of the foregoing, with respect to any
Obligations that, in accordance with the express terms of any agreement pursuant
to which such Obligations were created, were denominated in Dollars or any
currency other than the currency of the jurisdiction where a Borrower is
principally located, the Guarantor guarantees that it shall pay the Collateral
Agent strictly in accordance with the express terms of such agreement, including
in the amounts and in the currency expressly agreed to thereunder, irrespective
of and without giving effect to any laws of the jurisdiction where a Borrower is
principally located in effect from time to time, or any order, decree or
regulation in the jurisdiction where a Borrower is principally located.
(b) To the fullest extent permitted by applicable law, each Guarantor
waives any defense based on or arising out of any defense of any 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 any 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 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 any Borrower or any other Loan Party or exercise any
other right or remedy available to them against any Borrower or any other Loan
Party, without affecting or impairing in any way the liability of any Guarantor
hereunder except to the extent the Obligations have been fully and indefeasibly
paid in full in cash. To the fullest extent permitted by applicable law, each
Guarantor waives any defense arising out of any such election even though such
election operates, pursuant to applicable law, to impair or to extinguish any
right of reimbursement or subrogation or other right or remedy of such Guarantor
against any Borrower or any other Loan Party, as the case may be, or any
security.
SECTION 2.04. Reinstatement. Each Guarantor agrees that its guarantee
hereunder shall continue to be effective or be reinstated, as the case may be,
if at any time
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payment, or any part thereof, of any Obligation is rescinded or must otherwise
be restored by the Administrative Agent or any other Secured Party upon the
bankruptcy or reorganization of any 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 Guarantor by virtue
hereof, upon the failure of any 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 Guarantor hereby
promises to and will forthwith pay, or cause to be paid, to the Collateral Agent
for distribution to the applicable Secured Parties in cash the amount of such
unpaid Obligation. Upon payment by any Guarantor of any sums to the Collateral
Agent as provided above, all rights of such Guarantor against such Borrower, or
other Loan Party or any other Guarantor arising as a result thereof by way of
right of subrogation, contribution, reimbursement, indemnity or otherwise shall
in all respects be subject to Article VI.
SECTION 2.06. Information. Each Guarantor assumes all responsibility for
being and keeping itself informed of the financial condition and assets of each
Borrower and each other Loan Party, and of all other circumstances bearing upon
the risk of nonpayment of the Obligations and the nature, scope and extent of
the risks that such Guarantor assumes and incurs hereunder, and agrees that none
of the Collateral Agent or the other Secured Parties will have any duty to
advise such Guarantor of information known to it or any of them regarding such
circumstances or risks.
SECTION 2.07. Maximum Liability. Anything herein or in any other Loan
Document to the contrary notwithstanding, the maximum liability of each
Guarantor (other than Holdings and the U.S. Borrower) hereunder and under the
other Loan Documents shall in no event exceed the amount which can be guaranteed
by such Guarantor under applicable federal and state laws relating to the
insolvency of debtors (after giving effect to the right of contribution
established in Section 6.02).
ARTICLE III.
Pledge of Securities
SECTION 3.01. Pledge. As security for the payment or performance, as the
case may be, in full of the Obligations, each Pledgor 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 Pledgor's right, title and interest in, to and under (a) the
Equity Interests owned by it (which shall be listed on Schedule II) and any
other Equity Interests obtained in the future by such Guarantor and any
certificates representing all such Equity Interests (the "Pledged Stock");
provided that the Pledged Stock shall not include (i) more than 65% of the
issued and outstanding voting Equity Interests of any Foreign Subsidiary, (ii)
to the extent applicable law requires that a Subsidiary of such Guarantor issue
directors' qualifying shares, such shares or nominee or other similar shares,
(iii) any Equity Interests with respect to which the Collateral and Guarantee
Requirement or the other paragraphs of Section 5.10 of the
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Credit Agreement need not be satisfied by reason of Section 5.10(g) of the
Credit Agreement, (iv) any Equity Interests of a Subsidiary to the extent that,
as of the Closing Date, and for so long as, such a pledge of such Equity
Interests would violate a contractual obligation binding on such Equity
Interests, (v) any Equity Interests of a Subsidiary of a Guarantor acquired
after the Closing Date if, and to the extent that, and for so long as, (A) a
pledge of such Equity Interests would violate applicable law or any contractual
obligation binding upon such Subsidiary and (B) such law or obligation existed
at the time of the acquisition thereof and was not created or made binding upon
such Subsidiary in contemplation of or in connection with the acquisition of
such Subsidiary (provided that the foregoing clause (B) shall not apply in the
case of a joint venture, including a joint venture that is a Subsidiary) or (vi)
any Equity Interests of a person that is not directly or indirectly a
Subsidiary; (b)(i) the debt securities listed opposite the name of such Pledgor
on Schedule II, (ii) any debt securities in the future issued to such Pledgor
and (iii) the promissory notes and any other instruments, if any, evidencing
such debt securities (the "Pledged Debt Securities"); (c) subject to Section
3.06, all payments of principal or interest, dividends, cash, instruments and
other property from time to time received, receivable or otherwise distributed
in respect of, in exchange for or upon the conversion of, and all other proceeds
received in respect of, the securities referred to in clauses (a) and (b) above;
(d) subject to Section 3.06, all rights and privileges of such Pledgor with
respect to the securities and other property referred to in clauses (a), (b) and
(c) above; and (e) all proceeds of any of the foregoing (the items referred to
in clauses (a) through (e) 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 3.02. Delivery of the Pledged Collateral. (a) Each Pledgor agrees
promptly to deliver or cause to be delivered to the Collateral Agent, for the
ratable benefit of the Secured Parties, any and all Pledged Securities to the
extent such Pledged Securities, in the case of promissory notes or other
instruments evidencing Indebtedness, are required to be delivered pursuant to
paragraph (b) of this Section 3.02.
(b) Each Pledgor will cause any Indebtedness for borrowed money having an
aggregate principal amount that has a Dollar Equivalent in excess of $10,000,000
(other than intercompany current liabilities incurred in the ordinary course of
business in connection with the cash management operations of Holdings and the
Subsidiaries) owed to such Pledgor by any person to be evidenced by a duly
executed promissory note that is pledged and delivered to the Collateral Agent,
for the ratable benefit of the Secured Parties, pursuant to the terms hereof. To
the extent any such promissory note is a demand note, each Pledgor party thereto
agrees, if requested by the Collateral Agent, to immediately demand payment
thereunder upon an Event of Default specified under Section 7.01(b), (c), (f),
(h) or (i) of the Credit Agreement.
(c) Upon delivery to the Collateral Agent, (i) any Pledged Securities
required to be delivered pursuant to the foregoing paragraphs (a) and (b) of
this Section 3.02 shall be accompanied by stock powers or note powers, as
applicable, duly executed in blank or other instruments of transfer reasonably
satisfactory to the Collateral Agent and by such other
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instruments and documents as the Collateral Agent may reasonably request and
(ii) all other property composing part of the Pledged Collateral delivered
pursuant to the terms of this Agreement shall be accompanied to the extent
necessary to perfect the security interest in or allow realization on the
Pledged Collateral by proper instruments of assignment duly executed by the
applicable Pledgor and such other instruments or documents (including issuer
acknowledgments in respect of uncertificated securities) 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 3.03. Representations, Warranties and Covenants. The Pledgors,
jointly and severally, represent, warrant and covenant to and with the
Collateral Agent, for the ratable 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 or instruments evidencing
Indebtedness required to be pledged hereunder in order to satisfy the
Collateral and Guarantee Requirement;
(b) the Pledged Stock and Pledged Debt Securities (solely with respect
to Pledged Debt Securities issued by a person that is not a Subsidiary of
Holdings or an Affiliate of any such subsidiary, to the best of each
Pledgor's knowledge) have been duly and validly authorized and issued by
the issuers thereof and (i) in the case of Pledged Stock, are fully paid
and nonassessable and (ii) in the case of Pledged Debt Securities (solely
with respect to Pledged Debt Securities issued by a person that is not a
Subsidiary of Holdings or an Affiliate of any such subsidiary, to the best
of each Pledgor's knowledge) are legal, valid and binding obligations of
the issuers thereof;
(c) except for the security interests granted hereunder, each Pledgor
(i) is and, subject to any transfers made in compliance with the Credit
Agreement, will continue to be the direct owner, beneficially and of
record, of the Pledged Securities indicated on Schedule II as owned by such
Pledgor, (ii) holds the same free and clear of all Liens, other than Liens
permitted under Section 6.02 of the Credit Agreement, (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 pursuant to a transaction permitted by the Credit Agreement and
other than Liens permitted under Section 6.02 of the Credit Agreement and
(iv) subject to the rights of such Pledgor under the Loan Documents to
dispose of Pledged Collateral, will defend its title or interest hereto or
therein against any and all Liens (other than Liens permitted under Section
6.02 of the Credit Agreement), however arising, of all persons;
(d) except for restrictions and limitations imposed by the Loan
Documents or securities laws generally or otherwise permitted to exist
pursuant to the terms of the Credit Agreement, the Pledged Collateral is
and will continue to be freely transferable
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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
Collateral hereunder, the sale or disposition thereof pursuant hereto or
the exercise by the Collateral Agent of rights and remedies hereunder;
(e) each Pledgor 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 Pledgors of this
Agreement, when any Pledged Securities are delivered to the Collateral
Agent, for the ratable benefit of the Secured Parties, in accordance with
this Agreement, the Collateral Agent will obtain, for the ratable benefit
of the Secured Parties, a legal, valid and perfected first priority lien
upon and security interest in such Pledged Securities as security for the
payment and performance of the Obligations; and
(h) the pledge effected hereby is effective to vest in the Collateral
Agent, for the ratable benefit of the Secured Parties, the rights of the
Collateral Agent in the Pledged Collateral as set forth herein.
SECTION 3.04. Certification of Limited Liability Company and Limited
Partnership Interests. Each interest in any limited liability company or limited
partnership controlled by any Guarantor 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; provided, however, in the case of (a) the limited liability company
interests set forth on Schedule IV, the U.S. Borrower shall cause such interests
to be represented by a certificate, to be a "security" within the meaning of
Article 8 of the New York UCC and to be governed by Article 8 of the New York
UCC, in each case not later than 20 Business Days after the Closing Date and (b)
that any limited liability company or limited partnership that, in either case,
is a Wholly Owned Subsidiary formed or acquired after the Closing Date, the U.S.
Borrower shall cause such interests to be represented by a certificate, to be a
"security" within the meaning of Article 8 of the New York UCC and to be
governed by Article 8 of the New York UCC, in each case not later than 20
Business Days after the date of formation or acquisition thereof, as applicable.
SECTION 3.05. Registration in Nominee Name; Denominations. The Collateral
Agent, on behalf of the Secured Parties, shall have the right (in its sole and
absolute discretion) to hold the Pledged Securities in the name of the
applicable Pledgor, endorsed or assigned in blank or in favor of the Collateral
Agent or, if an Event of Default shall have occurred and be continuing, in its
own name as pledgee or the name of its nominee (as pledgee or as sub-agent).
Each Pledgor will promptly give to the Collateral Agent copies of any notices or
other communications received by it with respect to Pledged Securities
registered in the name of such Pledgor. If an Event of Default shall have
occurred and be continuing, the Collateral
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Agent shall have the right to exchange the certificates representing Pledged
Securities for certificates of smaller or larger denominations for any purpose
consistent with this Agreement. Each Pledgor shall use its commercially
reasonable efforts to cause any Loan Party that is not a party to this Agreement
to comply with a request by the Collateral Agent, pursuant to this Section 3.05,
to exchange certificates representing Pledged Securities of such Loan Party for
certificates of smaller or larger denominations.
SECTION 3.06. Voting Rights; Dividends and Interest, etc. (a) Unless and
until an Event of Default shall have occurred and be continuing:
(i) Each Pledgor 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 Credit Agreement and the other Loan Documents; provided
that such rights and powers shall not be exercised in any manner that could
materially and adversely affect the rights inuring to a holder of any
Pledged Securities, the rights and remedies of any of the Collateral Agent
or the other Secured Parties under this Agreement, the Credit Agreement or
any other Loan Document or the ability of the Secured Parties to exercise
the same.
(ii) The Collateral Agent shall promptly execute and deliver to each
Pledgor, or cause to be executed and delivered to such Pledgor, all such
proxies, powers of attorney and other instruments as such Pledgor may
reasonably request for the purpose of enabling such Pledgor to exercise the
voting and/or consensual rights and powers it is entitled to exercise
pursuant to subparagraph (i) above.
(iii) Each Pledgor 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 Credit Agreement, the other Loan Documents and
applicable laws; provided that any noncash dividends, interest, principal
or other distributions that would constitute Pledged 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 Pledgor, shall not be commingled by such Pledgor 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,
for the ratable benefit of the Secured Parties, and shall be forthwith
delivered to the Collateral Agent, for the ratable benefit of the Secured
Parties, in the same form as so received (endorsed in a manner reasonably
satisfactory to the Collateral Agent).
(b) Upon the occurrence and during the continuance of an Event of Default
and after notice by the Collateral Agent to the relevant Pledgors of the
Collateral Agent's intention to exercise its rights hereunder, all rights of any
Pledgor to dividends, interest, principal or other distributions that such
Pledgor is authorized to receive pursuant to paragraph (a)(iii) of
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this Section 3.06 shall cease, and all such rights shall thereupon become
vested, for the ratable benefit of the Secured Parties, 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 Pledgor
contrary to the provisions of this Section 3.06 shall not be commingled by such
Pledgor 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,
for the ratable benefit of the Secured Parties, and shall be forthwith delivered
to the Collateral Agent, for the ratable benefit of the Secured Parties, in the
same form as so received (endorsed in a manner reasonably satisfactory to the
Collateral Agent). Any and all money and other property paid over to or received
by the Collateral Agent pursuant to the provisions of this paragraph (b) shall
be retained by the Collateral Agent in an account to be established by the
Collateral Agent upon receipt of such money or other property and shall be
applied in accordance with the provisions of Section 5.02. After all Events of
Default have been cured or waived and the U.S. Borrower has delivered to the
Collateral Agent a certificate to that effect, the Collateral Agent shall
promptly repay to each Pledgor (without interest) all dividends, interest,
principal or other distributions that such Pledgor would otherwise be permitted
to retain pursuant to the terms of paragraph (a)(iii) of this Section 3.06 and
that remain in such account.
(c) Upon the occurrence and during the continuance of an Event of Default
and after notice by the Collateral Agent to the relevant Pledgors of the
Collateral Agent's intention to exercise its rights hereunder, all rights of any
Pledgor to exercise the voting and/or consensual rights and powers it is
entitled to exercise pursuant to paragraph (a)(i) of this Section 3.06, and the
obligations of the Collateral Agent under paragraph (a)(ii) of this Section
3.06, shall cease, and all such rights shall thereupon become vested in the
Collateral Agent, for the ratable benefit of the Secured Parties, which shall
have the sole and exclusive right and authority to exercise such voting and
consensual rights and powers; provided that, unless otherwise directed by the
Required Lenders, the Collateral Agent shall have the right from time to time
following and during the continuance of an Event of Default to permit the
Pledgors to exercise such rights. After all Events of Default have been cured or
waived and the U.S. Borrower has delivered to the Collateral Agent a certificate
to that effect, each Pledgor shall have the right to exercise the voting and/or
consensual rights and powers that such Pledgor would otherwise be entitled to
exercise pursuant to the terms of paragraph (a)(i) above.
ARTICLE IV.
Security Interests in Personal Property
SECTION 4.01. Security Interest. (a) As security for the payment or
performance, as the case may be, in full of the Obligations, each Guarantor
hereby assigns and pledges to the Collateral Agent, its successors and assigns,
for the ratable benefit of the Secured Parties, and hereby grants to the
Collateral Agent, its successors and assigns, for the ratable benefit of the
Secured Parties, a security interest (the "Security Interest") in all right,
title and interest in or to any and all of the following assets and properties
now owned or at any time hereafter acquired by such Guarantor or in which such
Guarantor now has or at any time in the future may acquire any right, title or
interest (collectively, the "Article 9 Collateral"):
(i) all Accounts;
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(ii) all Chattel Paper;
(iii) all cash and Deposit Accounts;
(iv) all Documents;
(v) all Equipment;
(vi) all General Intangibles;
(vii) all Instruments;
(viii) all Inventory;
(ix) all Investment Property;
(x) all Letter-of-Credit Rights;
(xi) all Commercial Tort Claims;
(xii) all books and records pertaining to the Article 9 Collateral;
and
(xiii) to the extent not otherwise included, all proceeds, Supporting
Obligations 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.
Notwithstanding anything to the contrary in this Agreement, this Agreement shall
not constitute a grant of a security interest in (a) any vehicle covered by a
certificate of title or ownership, (b) any assets (including Equity Interests)
with respect to which the Collateral and Guarantee Requirement or the other
paragraphs of Section 5.10 of the Credit Agreement need not be satisfied by
reason of Section 5.10(g) of the Credit Agreement, (c) any assets (including
Equity Interests) to the extent that, as of the Closing Date, and for so long
as, such grant of a security interest would violate a contractual obligation or
applicable law binding on such asset, (d) any property of any person acquired by
a Guarantor after the Closing Date pursuant to Section 6.04(l) of the Credit
Agreement if, and to the extent that, and for so long as, (A) such grant of a
security interest would violate applicable law or any contractual obligation
binding upon such property and (B) such law or obligation existed at the time of
the acquisition thereof and was not created or made binding upon such property
in contemplation of or in connection with the acquisition of such Subsidiary
(provided that the foregoing clause (B) shall not apply in the case of a joint
venture, including a joint venture that is a Subsidiary); provided that each
Guarantor shall use its commercially reasonable efforts to avoid any such
restriction described in this clause (d) or (e) any Letter of Credit Rights to
the extent any Guarantor is required by applicable law to apply the proceeds of
a drawing of such Letter of Credit for a specified purpose.
(b) Each Guarantor 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
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Commercial Code of each applicable jurisdiction for the filing of any financing
statement or amendment, including (i) whether such Guarantor is an organization,
the type of organization and any organizational identification number issued to
such Guarantor, (ii) in the case of a financing statement filed as a fixture
filing, a sufficient description of the real property to which such Article 9
Collateral relates and (iii) a description of collateral that describes such
property in any other manner as the Collateral Agent may reasonably determine is
necessary or advisable to ensure the perfection of the security interest in the
Article 9 Collateral granted under this Agreement, including describing such
property as "all assets" or "all property". Each Guarantor agrees to provide
such information to the Collateral Agent promptly upon request.
The Collateral Agent is further authorized to file with the United States
Patent and Trademark Office or United States Copyright Office (or any successor
office or any similar office in any other country) such documents as may be
necessary or advisable for the purpose of perfecting, confirming, continuing,
enforcing or protecting the Security Interest granted by each Guarantor, without
the signature of any Guarantor, and naming any Guarantor or the Guarantors 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 Guarantor with respect to or arising
out of the Article 9 Collateral.
SECTION 4.02. Representations and Warranties. The Guarantors jointly and
severally represent and warrant to the Collateral Agent and the Secured Parties
that:
(a) Each Guarantor 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 and is in full force and effect.
(b) The U.S. Perfection Certificate has been duly prepared, completed and
executed and the information set forth therein, including the exact legal name
of each Guarantor, is correct and complete, in all material respects, as of the
Closing Date. Uniform Commercial Code financing statements (including fixture
filings, as applicable) or other appropriate filings, recordings or
registrations containing a description of the Article 9 Collateral have been
prepared by the Collateral Agent based upon the information provided to the
Collateral Agent in the U.S. Perfection Certificate for filing in each
governmental, municipal or other office specified in Schedule 7 to the U.S.
Perfection Certificate (or specified by notice from the U.S. Borrower to the
Collateral Agent after the Closing Date in the case of filings, recordings or
registrations required by Section 5.10 of the Credit Agreement), and constitute
all the filings, recordings and registrations (other than filings required to be
made in the United States Patent and Trademark Office and the United States
Copyright Office in order to perfect the Security Interest in Article 9
Collateral consisting of United States Patents, United States registered
Trademarks and United States registered Copyrights) that are necessary to
publish notice of and protect the validity of and to establish a legal, valid
and perfected security interest in favor of the Collateral Agent (for the
ratable benefit of the Secured Parties) in respect of all Article 9 Collateral
in which the
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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 or amendments. Each Guarantor represents and warrants
that a fully executed agreement in the form hereof (or a short form hereof which
form shall be reasonably acceptable to the Collateral Agent) containing a
description of all Article 9 Collateral consisting of Intellectual Property with
respect to United States Patents (and Patents for which United States
registration applications are pending), United States registered Trademarks (and
Trademarks for which United States registration applications are pending) and
United States registered Copyrights (and Copyrights for which United States
registration applications are pending) has been delivered to the Collateral
Agent for recording with 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 reasonably requested by the Collateral Agent, to protect the
validity of and to establish a legal, valid and perfected security interest in
favor of the Collateral Agent, for the ratable benefit of the Secured Parties,
in respect of all Article 9 Collateral consisting of such Intellectual Property
in which a security interest may be perfected by recording with the United
States Patent and Trademark Office and the United States Copyright Office, 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 Obligations, (ii) subject to the filings described in Section 4.02(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. The Security Interest is and shall be
prior to any other Lien on any of the Article 9 Collateral, other than Liens
expressly permitted pursuant to Section 6.02 of the Credit Agreement or arising
by operation of law.
(d) The Article 9 Collateral is owned by the Guarantors free and clear of
any Lien, other than Liens expressly permitted pursuant to Section 6.02 of the
Credit Agreement or arising by operation of law. None of the Guarantors 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 Guarantor assigns any
Article 9 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
Guarantor 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
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document, assignment, security agreement or similar instrument is still in
effect, except, in each case, for Liens expressly permitted pursuant to Section
6.02 of the Credit Agreement.
(e) None of the Guarantors holds any Commercial Tort Claim individually in
excess of $1,000,000 as of the Closing Date except as indicated on the U.S.
Perfection Certificate.
(f) All Accounts have been originated by the Guarantors and all Inventory
has been acquired by the Guarantors in the ordinary course of business.
SECTION 4.03. Covenants. (a) Each Guarantor agrees promptly to notify the
Collateral Agent in writing of any change (i) in its corporate name, (ii) in its
identity or type of organization or corporate structure, (iii) in its Federal
Taxpayer Identification Number or organizational identification number or (iv)
in its jurisdiction of organization. Each Guarantor agrees promptly to provide
the Collateral Agent with certified organizational documents reflecting any of
the changes described in the immediately preceding sentence. Each Guarantor
agrees not to effect or permit any change referred to in the first sentence of
this paragraph (a) unless all filings have been made 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, for
the ratable benefit of the Secured Parties. Each Guarantor agrees promptly to
notify the Collateral Agent if any material portion of the Article 9 Collateral
owned or held by such Guarantor is damaged or destroyed.
(b) Subject to the rights of such Guarantor under the Loan Documents to
dispose of Collateral, each Guarantor 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, for the
ratable benefit of the Secured Parties, in the Article 9 Collateral and the
priority thereof against any Lien not expressly permitted pursuant to Section
6.02 of the Credit Agreement.
(c) Each Guarantor agrees, at its own expense, to execute, acknowledge,
deliver and cause to be duly filed all such further instruments and documents
and take all such actions as the Collateral Agent may from time to time
reasonably request to better assure, preserve, protect and perfect 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. If any amount payable under or in connection
with any of the Article 9 Collateral that is in excess of $ 5,000,000 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, for
the ratable benefit of the Secured Parties, duly endorsed in a manner reasonably
satisfactory to the Collateral Agent.
Without limiting the generality of the foregoing, each Guarantor hereby
authorizes the Collateral Agent, with prompt notice thereof to the Guarantors,
to supplement this Agreement by supplementing Schedule III or adding additional
schedules hereto to specifically
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identify any asset or item that may constitute Copyrights, Patents, Trademarks,
Copyright Licenses, Patent Licenses or Trademark Licenses; provided that any
Guarantor shall have the right, exercisable within 30 days after it has been
notified by the Collateral Agent of the specific identification of such Article
9 Collateral, to advise the Collateral Agent in writing of any inaccuracy of the
representations and warranties made by such Guarantor hereunder with respect to
such Article 9 Collateral. Each Guarantor agrees that it will use its
commercially reasonable 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 Article 9 Collateral within 30 days after the date
it has been notified by the Collateral Agent of the specific identification of
such Article 9 Collateral.
Without limiting the generality of any requirements hereunder or under any
of the Loan Documents, if ADX Corp. shall acquire property having a fair market
value in excess of $5,000,000, then ADX Corp. shall promptly deliver to
Collateral Agent an opinion of local counsel in Michigan as to the perfection of
the security interest in such property in such form as shall be reasonably
acceptable to Collateral Agent.
(d) After the occurrence of an Event of Default and during the continuance
thereof, the Collateral Agent shall have the right 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 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 right to share any information it gains from such inspection or
verification with any Secured Party.
(e) At its option, 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 pursuant
to Section 6.02 of the Credit Agreement, and may pay for the maintenance and
preservation of the Article 9 Collateral to the extent any Guarantor fails to do
so as required by the Credit Agreement or this Agreement, and each Guarantor
jointly and severally agrees to reimburse the Collateral Agent on demand for any
reasonable payment made or any reasonable expense incurred by the Collateral
Agent pursuant to the foregoing authorization; provided, however, that nothing
in this Section 4.03(e) shall be interpreted as excusing any Guarantor 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
Guarantor with respect to taxes, assessments, charges, fees, Liens, security
interests or other encumbrances and maintenance as set forth herein or in the
other Loan Documents.
(f) Each Guarantor (rather than the Collateral Agent or any Secured Party)
shall remain liable for the observance and performance of all the conditions and
obligations to be observed and performed by it under each contract, agreement or
instrument relating to the Article 9 Collateral and each Guarantor 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.
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(g) None of the Guarantors 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 expressly permitted by
the Credit Agreement. None of the Guarantors shall make or permit to be made any
transfer of the Article 9 Collateral and each Guarantor shall remain at all
times in possession of the Article 9 Collateral owned by it, except as permitted
by the Credit Agreement.
(h) None of the Guarantors 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, credits, discounts, compromises or settlements
granted or made in the ordinary course of business and consistent with prudent
business practices.
(i) Each Guarantor irrevocably makes, constitutes and appoints the
Collateral Agent (and all officers, employees or agents designated by the
Collateral Agent) as such Guarantor'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 Guarantor 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 Guarantor 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 Guarantors 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 reasonably deems advisable. All sums disbursed
by the Collateral Agent in connection with this Section 4.03(i), including
reasonable attorneys' fees, court costs, expenses and other charges relating
thereto, shall be payable, upon demand, by the Guarantors to the Collateral
Agent and shall be additional Obligations secured hereby.
SECTION 4.04. Other Actions. In order to further ensure the attachment,
perfection and priority of, and the ability of the Collateral Agent to enforce,
for the ratable benefit of the Secured Parties, the Collateral Agent's security
interest in the Article 9 Collateral, each Guarantor agrees, in each case at
such Guarantor's own expense, to take the following actions with, respect to the
following Article 9 Collateral:
(a) Instruments and Tangible Chattel Paper. If any Guarantor shall at any
time hold or acquire any Instruments or Tangible Chattel Paper evidencing an
amount in excess of $5,000,000, such Guarantor 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.
(b) Cash Accounts. No Guarantor shall grant Control of any deposit account
to any Person other than the Collateral Agent.
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(c) Investment Property. Except to the extent otherwise provided in Article
III, if any Guarantor shall at any time hold or acquire any Certificated
Security, such Guarantor 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
specify. If any security now or hereafter acquired by any Guarantor is
uncertificated and is issued to such Guarantor or its nominee directly by the
issuer thereof, upon the Collateral Agent's reasonable request and following the
occurrence of an Event of Default, such Guarantor shall promptly notify the
Collateral Agent of such uncertificated securities and 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 security, without further consent of any Guarantor or such
nominee, or (ii) cause the issuer to register the Collateral Agent as the
registered owner of such security. If any security or other Investment Property,
whether certificated or uncertificated, representing an Equity Interest in a
third party and having a fair market value in excess of $10,000,000 now or
hereafter acquired by any Guarantor is held by such Guarantor or its nominee
through a securities intermediary or commodity intermediary, such Guarantor
shall promptly notify the Collateral Agent thereof and, at the Collateral
Agent's request and option, pursuant to a Control Agreement in form and
substance reasonably satisfactory to the Collateral Agent, either (A) cause such
securities intermediary or commodity intermediary, as applicable, to agree, in
the case of a securities intermediary, to comply with entitlement orders or
other instructions from the Collateral Agent to such securities intermediary as
to such securities or other Investment Property or, in the case of a commodity
intermediary, 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 Guarantor or such nominee, or (B) 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, for the ratable
benefit of the Secured Parties, with such Guarantor being permitted, only with
the consent of the Collateral Agent, to exercise rights to withdraw or otherwise
deal with such Investment Property. The Collateral Agent agrees with each of the
Guarantors 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 Guarantor, unless an Event of Default
has occurred and is continuing or, after giving effect to any such withdrawal or
dealing rights, would occur. The provisions of this paragraph (c) shall not
apply to any Financial Assets credited to a securities account for which the
Collateral Agent is the securities intermediary.
(d) Commercial Tort Claims. If any Guarantor shall at any time hold or
acquire a Commercial Tort Claim in an amount reasonably estimated to exceed
$10,000,000, such Guarantor shall promptly notify the Collateral Agent thereof
in a writing signed by such Guarantor, including a summary description of such
claim, and grant to the Collateral Agent in 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 4.05. Covenants Regarding Patent, Trademark and Copyright
Collateral. (a) Each Guarantor agrees that it will not knowingly do any act or
omit to do any act
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(and will exercise commercially reasonable efforts to prevent its licensees from
doing any act or omitting to do any act) whereby any Patent that is material to
the normal conduct of such Guarantor's business may become prematurely
invalidated or dedicated to the public, and agrees that it shall take
commercially reasonable steps with respect to any material products covered by
any such Patent as necessary and sufficient to establish and preserve its rights
under applicable patent laws.
(b) Each Guarantor will, and will use its commercially reasonable efforts
to cause its licensees or its sublicensees to, for each Trademark necessary to
the normal conduct of such Guarantor's business, (i) maintain such Trademark in
full force free from any adjudication 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 or
claim of trademark or service xxxx as required under applicable law and (iv) not
knowingly use or knowingly permit its licensees' use of such Trademark in
violation of any third-party rights.
(c) Each Guarantor will, and will use its commercially reasonable efforts
to cause its licensees or its sublicensees to, for each work covered by a
material Copyright necessary to the normal conduct of such Guarantor's business
that it publishes, displays and distributes, use copyright notice as required
under applicable copyright laws.
(d) Each Guarantor shall notify the Collateral Agent promptly if it knows
that any Patent, Trademark or Copyright material to the normal conduct of such
Guarantor's business may imminently become abandoned, lost or dedicated to the
public, or of any materially adverse determination or development, excluding
office actions and similar determinations or developments in the United States
Patent and Trademark Office, United States Copyright Office, any court or any
similar office of any country, regarding such Guarantor's ownership of any such
material Patent, Trademark or Copyright or its right to register or to maintain
the same.
(e) Each Guarantor, either itself or through any agent, employee, licensee
or designee, shall (i) inform the Collateral Agent on a semi-annual basis of
each application by itself, or through any agent, employee, licensee or
designee, for any Patent with the United States Patent and Trademark Office and
each registration of any Trademark or Copyright with the United States Patent
and Trademark Office, the United States Copyright Office or any comparable
office or agency in any other country filed during the preceding six-month
period, and (ii) upon the reasonable request of the Collateral Agent, execute
and deliver any and all agreements, instruments, documents and papers as the
Collateral Agent may reasonably request to evidence the Collateral Agent's
security interest in such Patent, Trademark or Copyright.
(f) Each Guarantor shall exercise its reasonable business judgment
consistent with the practice in any proceeding before the United States Patent
and Trademark Office, the United States Copyright Office or any comparable
office or agency in any other country with respect to maintaining and pursuing
each material application relating to any Patent, Trademark and/or Copyright
(and obtaining the relevant grant or registration) material to the normal
conduct of such Guarantor's business and to maintain (i) each issued Patent and
(ii) the registrations of each Trademark and each Copyright that is material to
the normal conduct of such Guarantor's business, including, when applicable and
necessary in such Guarantor's reasonable business
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judgment, timely filings of applications for renewal, affidavits of use,
affidavits of incontestability and payment of maintenance fees, and, if any
Guarantor believes necessary in its reasonable business judgment, to initiate
opposition, interference and cancellation proceedings against third parties.
(g) In the event that any Guarantor knows or has reason to know that any
Article 9 Collateral consisting of a Patent, Trademark or Copyright material to
the normal conduct of its business has been or is about to be materially
infringed, misappropriated or diluted by a third party, such Guarantor shall
promptly notify the Collateral Agent and shall, if such Guarantor deems it
necessary in its reasonable business judgment, promptly xxx and recover any and
all damages, and take such other actions as are reasonably appropriate under the
circumstances.
(h) Upon and during the continuance of an Event of Default, each Guarantor
shall use commercially reasonable efforts to obtain all requisite consents or
approvals from the licensor under each Copyright License, Patent License or
Trademark License to effect the assignment of all such Guarantor's right, title
and interest thereunder to (in the Collateral Agent's sole discretion) the
designee of the Collateral Agent or the Collateral Agent.
ARTICLE V.
Remedies
SECTION 5.01. Remedies Upon Default. Upon the occurrence and during the
continuance of an Event of Default, each Pledgor 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 Guarantors to the Collateral Agent or to
license or sublicense, whether general, special or otherwise, and whether on an
exclusive or a 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 then-existing licensing
arrangements to the extent that waivers thereunder 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 applicable Uniform Commercial Code or other applicable law.
Without limiting the generality of the foregoing, each Pledgor 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 in connection with any sale of a security (if it deems it advisable
to do so) pursuant to the foregoing to restrict the prospective bidders or
purchasers to persons who represent and agree that they are purchasing such
security for their own account, for investment, and not with a view to the
distribution or sale thereof. Upon consummation of any
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such sale of Collateral pursuant to this Section 5.01 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 such sale shall hold
the property sold absolutely, free from any claim or right on the part of any
Pledgor, and each Pledgor hereby waives and releases (to the extent permitted by
law) all rights of redemption, stay, valuation and appraisal that such Pledgor
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 Pledgors 10 Business Days'
written notice (which each Pledgor 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 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 the 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 the case of any sale of all or any part of the Collateral 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 the event
that any such purchaser or purchasers shall fail to take up and pay for the
Collateral so sold and, in the case of any such failure, such Collateral may be
sold again upon notice given in accordance with provisions above. At any public
(or, to the extent permitted by law, private) sale made pursuant to this Section
5.01, any Secured Party may bid for or purchase for cash, free (to the extent
permitted by law) from any right of redemption, stay, valuation or appraisal on
the part of any Pledgor (all such rights being also hereby waived and released
to the extent permitted by law), the Collateral or any part thereof offered for
sale and such Secured Party may, upon compliance with the terms of sale, hold,
retain and dispose of such property in accordance with Section 5.02 hereof
without further accountability to any Pledgor 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 Pledgor 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 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 5.01 shall be deemed to conform to the commercially
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reasonable standards as provided in Section 9-610(b) of the New York UCC or its
equivalent in other jurisdictions.
SECTION 5.02. Application of Proceeds. The Collateral Agent shall promptly
apply the proceeds, moneys or balances of any collection or sale of Collateral,
as well as any Collateral consisting of cash, as follows:
FIRST, to the payment of all costs and expenses incurred by the
Applicable Agent and the Collateral Agent in connection with such
collection or sale or otherwise in connection with this Agreement, any
other Loan Document or any of the Obligations, including all court costs
and the fees and expenses of its agents and legal counsel, the repayment of
all advances made by the Applicable Agent and the Collateral Agent
hereunder or under any other Loan Document on behalf of any Pledgor and any
other costs or expenses incurred in connection with the exercise of any
right or remedy hereunder or under any other Loan Document;
SECOND, to the payment in full of the Obligations (the amounts so
applied to be distributed among the Secured Parties pro rata in accordance
with the respective amounts of the Obligations owed to them on the date of
any such distribution); and
THIRD, to the Pledgors, 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 purchase money by 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 5.03. 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 Guarantor hereby grants to (in the
Collateral Agent's sole discretion) a designee of the Collateral Agent or the
Collateral Agent, for the ratable benefit of the Secured Parties, an
irrevocable, nonexclusive license (exercisable without payment of royalty or
other compensation to any Guarantor) to use, license or sublicense any of the
Article 9 Collateral consisting of Intellectual Property now owned or hereafter
acquired by such Guarantor, wherever the same may be located, and including,
without limitation, 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 right to prosecute
and maintain all intellectual property and the right to xxx for past
infringement of the intellectual property. 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,
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sublicense or other transaction entered into by the Collateral Agent in
accordance herewith shall be binding upon the Guarantors notwithstanding any
subsequent cure of an Event of Default.
SECTION 5.04. Securities Act, etc. In view of the position of the Pledgors
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 federal 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 Pledgor
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 Pledgor 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 or, to the extent applicable, Blue Sky
or other state securities laws and (b) may approach and negotiate with a single
potential purchaser to effect such sale. Each Pledgor 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 5.04 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 5.05. Registration, etc. Each Pledgor 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 commercially reasonable 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 Pledgor further agrees to indemnify, defend and
hold harmless the Administrative 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 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
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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 Pledgor or the
issuer of such Pledged Collateral by the Collateral Agent or any other Secured
Party expressly for use therein. Each Pledgor further agrees, upon such written
request referred to above, to use its commercially 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 reasonably requested by the
Collateral Agent and keep effective, or cause to be kept effective, all such
qualifications, filings or registrations. Each Pledgor will bear all costs and
expenses of carrying out its obligations under this Section 5.05. Each Pledgor
acknowledges that there is no adequate remedy at law for failure by it to comply
with the provisions of this Section 5.05 only and that such failure would not be
adequately compensable in damages and, therefore, agrees that its agreements
contained in this Section 5.05 may be specifically enforced.
ARTICLE VI.
Indemnity, Subrogation and Subordination
SECTION 6.01. 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 6.03), each Borrower agrees that (a) in the event a payment
shall be made by any Guarantor under this Agreement in respect of any Obligation
of such Borrower, such Borrower 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 Guarantor shall be sold pursuant
to this Agreement or any other Security Document to satisfy in whole or in part
an Obligation of a Borrower, such Borrower shall indemnify such Guarantor in an
amount equal to the greater of the book value or the fair market value of the
assets so sold.
SECTION 6.02. Contribution and Subrogation. Each Guarantor (other than
Holdings and the U.S. Borrower) (a "Contributing Guarantor") agrees (subject to
Section 6.03) that, in the event a payment shall be made by any other Guarantor
(other than Holdings and the U.S. Borrower) hereunder in respect of any
Obligation or assets of any other Guarantor (other than Holdings and the U.S.
Borrower) shall be sold pursuant to any Security Document to satisfy any
Obligation owed to any Secured Party and such other Guarantor (the "Claiming
Guarantor") shall not have been fully indemnified by the applicable Borrower as
provided in Section 6.01, the Contributing Guarantor shall indemnify the
Claiming Guarantor 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
applicable, in each case multiplied by a fraction of which the numerator shall
be the net worth of such Contributing Guarantor on the date hereof and the
denominator shall be the aggregate net worth of all the Guarantors on the date
hereof (or, in the case of any Guarantor becoming a party hereto pursuant to
Section 7.16, the date of the supplement hereto executed and delivered by such
Guarantor). Any Contributing Guarantor making any payment to a Claiming
Guarantor pursuant to this Section 6.02 shall be subrogated to the rights of
such Claiming Guarantor under Section 6.01 to the extent of such payment.
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SECTION 6.03. Subordination. (a) Notwithstanding any provision of this
Agreement to the contrary, all rights of the Guarantors under Sections 6.01 and
6.02 and all other rights of indemnity, contribution or subrogation of the
Pledgor under applicable law or otherwise shall be fully subordinated to the
indefeasible payment in full in cash of the Obligations. No failure on the part
of any Borrower or any Guarantor to make the payments required by Sections 6.01
and 6.02 (or any other payments required under applicable law or otherwise)
shall in any respect limit the obligations and liabilities of any Guarantor with
respect to its obligations hereunder, and each Guarantor shall remain liable for
the full amount of the obligations of such Guarantor hereunder.
(b) Each Guarantor hereby agrees that all Indebtedness and other monetary
obligations owed by it to any other Guarantor or any Subsidiary shall be fully
subordinated to the indefeasible payment in full in cash of the Obligations.
ARTICLE VII.
Miscellaneous
SECTION 7.01. Notices. All communications and notices hereunder shall
(except as otherwise expressly permitted herein) be in writing and given as
provided in Section 9.01 of the Credit Agreement. All communications and notices
hereunder to any Subsidiary Party shall be given to it in care of the U.S.
Borrower, with such notice to be given as provided in Section 9.01 of the Credit
Agreement.
SECTION 7.02. Security Interest Absolute. All rights of the Collateral
Agent hereunder, the Security Interest, the security interest in the Pledged
Collateral and all obligations of each Pledgor hereunder shall be absolute and
unconditional irrespective of (a) any lack of validity or enforceability of the
Credit Agreement, any other Loan Document, any agreement with respect to any of
the 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 Obligations, or any other amendment or waiver
of or any consent to any departure from the Credit Agreement, any other Loan
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 Obligations or (d) any other circumstance that
might otherwise constitute a defense available to, or a discharge of, any
Pledgor in respect of the Obligations or this Agreement.
SECTION 7.03. [Reserved].
SECTION 7.04. Binding Effect; Several Agreement. This Agreement shall
become effective as to any party to this Agreement when a counterpart hereof
executed on behalf of such party shall have been delivered to the Administrative
Agent and a counterpart hereof shall have been executed on behalf of the
Collateral Agent, and thereafter shall be binding upon such party and the
Collateral Agent and their respective permitted successors and assigns, and
shall inure to the benefit of such party, the Collateral Agent and the other
Secured Parties and their respective permitted successors and assigns, except
that no party shall have the right to
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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 Credit Agreement. This Agreement
shall be construed as a separate agreement with respect to each party and may be
amended, modified, supplemented, waived or released with respect to any party
without the approval of any other party and without affecting the obligations of
any other party hereunder.
SECTION 7.05. 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 Pledgor or the Collateral Agent that are
contained in this Agreement shall bind and inure to the benefit of their
respective permitted successors and assigns.
SECTION 7.06. Collateral Agent's Fees and Expenses; Indemnification. (a)
The parties hereto agree that the Collateral Agent shall be entitled to
reimbursement of its expenses incurred hereunder as provided in Section 9.05 of
the Credit Agreement.
(b) Without limitation of its indemnification obligations under the other
Loan Documents, each Pledgor jointly and severally agrees to indemnify the
Collateral Agent and the other Indemnitees (as defined in Section 9.05 of the
Credit Agreement) against, and hold each Indemnitee harmless from, any and all
losses, claims, damages, liabilities and related expenses, including reasonable
counsel fees, charges and disbursements, incurred by or asserted against any
Indemnitee arising out of, in connection with, or as a result of, (i) the
execution, delivery or performance of this Agreement or any other Loan Document
or any agreement or instrument contemplated hereby or thereby, the performance
by the parties hereto and thereto of their respective obligations thereunder or
the consummation of the Transactions and other transactions contemplated hereby,
(ii) the use of proceeds of the Loans or the use of any Letter of Credit or
(iii) any claim, litigation, investigation or proceeding relating to any of the
foregoing, 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 willful
misconduct of such Indemnitee.
(c) Any such amounts payable as provided hereunder shall be additional
Obligations secured hereby and by the other Security Documents. The provisions
of this Section 7.06 shall remain operative and in full force and effect
regardless of the termination of this Agreement or any other Loan Document, the
consummation of the transactions contemplated hereby, the repayment of any of
the Obligations, the invalidity or unenforceability of any term or provision of
this Agreement or any other Loan Document, or any investigation made by or on
behalf of the Collateral Agent or any other Secured Party. All amounts due under
this Section 7.06 shall be payable on written demand therefor.
SECTION 7.07. Collateral Agent Appointed Attorney-in-Fact. Each Pledgor
hereby appoints the Collateral Agent the attorney-in-fact of such Pledgor 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
-28-
purposes hereof, which appointment is irrevocable and coupled with an interest.
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 Pledgor, (a) to receive, endorse, assign 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 ask for, demand, xxx for, collect, receive and
give acquittance for any and all moneys due or to become due under and by virtue
of any Collateral; (d) to sign the name of any Pledgor on any invoice or xxxx of
lading relating to any of the Collateral; (e) to send verifications of Accounts
to any Account Debtor; (f) 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; (g) to settle, compromise, compound, adjust
or defend any actions, suits or proceedings relating to all or any of the
Collateral; (h) to notify, or to require any Guarantor to notify, Account
Debtors to make payment directly to the Collateral Agent; and (i) 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
Pledgor for any act or failure to act hereunder, except for their own gross
negligence or wilful misconduct.
SECTION 7.08. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES UNDER THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 7.09. Waivers; Amendment. (a) No failure or delay by the Applicable
Agent, the Collateral Agent, any Issuing Bank or any Lender in exercising any
right, power or remedy hereunder or under any other Loan Document shall operate
as a waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy, or any abandonment or discontinuance of steps to enforce such a
right, power or remedy, preclude any other or further exercise thereof or the
exercise of any other right, power or remedy. The rights, powers and remedies of
the Administrative Agent, the Collateral Agent, any Issuing Bank and the Lenders
hereunder and under the other Loan Documents are cumulative and are not
exclusive of any rights, powers or remedies that they would otherwise have. No
waiver of any provision of this Agreement or consent to any departure by any
Loan Party therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) of this Section 7.09, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. Without limiting the generality of the foregoing, the making of a Loan or
the issuance of
-29-
a Letter of Credit shall not be construed as a waiver of any Default or Event of
Default, regardless of whether the Administrative Agent, the Collateral Agent,
any Lender or any Issuing Bank may have had notice or knowledge of such Default
or Event of Default at the time. No notice or demand on any Loan Party in any
case shall entitle any Loan Party to any other or further notice or demand in
similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be waived, amended
or modified except pursuant to an agreement or agreements in writing entered
into by the Collateral Agent and the Loan Party or Loan Parties with respect to
which such waiver, amendment or modification is to apply, subject to any consent
required in accordance with Section 9.08 of the Credit Agreement.
SECTION 7.10. 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 RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENTS. 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 7.10.
SECTION 7.11. Severability. In the event any one or more of the provisions
contained in this Agreement or in any other Loan Document should be held
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein shall
not in any way be affected or impaired thereby. 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 7.12. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original but all of which when
taken together shall constitute but one contract, and shall become effective as
provided in Section 7.04. Delivery of an executed counterpart to this Agreement
by facsimile transmission shall be as effective as delivery of a manually signed
original.
SECTION 7.13. 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 7.14. Jurisdiction; Consent to Service of Process. (a) Each party
to this Agreement hereby irrevocably and unconditionally submits, for itself and
its property, to the nonexclusive jurisdiction of any New York State court or
federal court of the United States of
-30-
America sitting in New York City, and any appellate court from any thereof, in
any action or proceeding arising out of or relating to this Agreement or any
other Loan Documents, 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 shall affect any right that the Administrative Agent,
the Collateral Agent, any Issuing Bank or any Lender may otherwise have to bring
any action or proceeding relating to this Agreement or any other Loan Document
against any Pledgor, or its properties, in the courts of any jurisdiction.
(b) Each party to this Agreement hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection which it 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
Loan Document in any New York State or federal court. 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.
SECTION 7.15. Termination or Release. (a) This Agreement, the guarantees
made herein, the Security Interest and all other security interests granted
hereby shall terminate when all the Loan Document Obligations have been
indefeasibly paid in full in cash and the Lenders have no further commitment to
lend under the Credit Agreement, the Revolving L/C Exposure has been reduced to
zero and each Issuing Bank has no further obligations to issue Letters of Credit
under the Credit Agreement.
(b) A Subsidiary Party shall automatically be released from its obligations
hereunder and the security interests in the Collateral of such Subsidiary Party
shall be automatically released upon the consummation of any transaction
permitted by the Credit Agreement as a result of which such Subsidiary Party
ceases to be a Subsidiary of Holdings; provided that the Required Lenders shall
have consented to such transaction (to the extent such consent is required by
the Credit Agreement) and the terms of such consent did not provide otherwise.
(c) Upon any sale or other transfer by any Pledgor of any Collateral that
is permitted under the Credit Agreement to any person that is not a Pledgor, or
upon the effectiveness of any written consent to the release of the security
interest granted hereby in any Collateral pursuant to Section 9.08 of the Credit
Agreement, the security interest in such Collateral shall be automatically
released.
(d) In connection with any termination or release pursuant to paragraph
(a), (b) or (c) of this Section 7.15, the Collateral Agent shall execute and
deliver to any Pledgor, at such Pledgor's, expense all documents that such
Pledgor shall reasonably request to evidence such termination or release. Any
execution and delivery of documents pursuant to this Section 7.15 shall be
without recourse to or warranty by the Collateral Agent.
-31-
SECTION 7.16. Additional Subsidiaries. Upon execution and delivery by the
Collateral Agent and any Subsidiary that is required to become a party hereto by
Section 5.10 of the Credit Agreement 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 party to this Agreement. The rights and obligations of each party to
this Agreement shall remain in full force and effect notwithstanding the
addition of any new party to this Agreement.
SECTION 7.17. Right of Set-off. If an Event of Default shall have occurred
and be continuing, each Lender and each Issuing Bank 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 indebtedness at any time owing by such
Lender or such Issuing Bank to or for the credit or the account of any party to
this Agreement against any of and all the obligations of such party now or
hereafter existing under this Agreement owed to such Lender or such Issuing
Bank, irrespective of whether or not such Lender or such Issuing Bank shall have
made any demand under this Agreement and although such obligations may be
unmatured. The rights of each Lender under this Section 7.17 are in addition to
other rights and remedies (including other rights of set-off) that such Lender
or such Issuing Bank may have.
[Signature Page Follows]
-32-
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.
NALCO HOLDINGS LLC
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Chief Executive Officer
NALCO COMPANY
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Chief Executive Officer
ADX CORP.
By: /s/ X. Xxxxxx Kodiak
-------------------------------------
Name: X. Xxxxxx Kodiak
Title: President
BOARD CHEMISTRY INCORPORATED
By: /s/ X. Xxxxxx Kodiak
-------------------------------------
Name: X. Xxxxxx Kodiak
Title: President
NALCO DELAWARE COMPANY
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Assistant Secretary
-1-
NALCO FT, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Secretary
NALCO INDUSTRIAL OUTSOURCING
COMPANY
By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: V.P. Chief Legal Counsel
and Secretary
NALCO LEASING CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Secretary
NALCO PWS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Secretary
NALCO RESOURCES INVESTMENT
COMPANY
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Assistant Secretary
NALCO TWO, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Assistant Secretary
-2-
NALGREEN, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Secretary
NALTECH, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Secretary
ONDEO NALCO COMPANY LLC
By: /s/ J. Xxxxxxx Xxxxxx
-------------------------------------
Name: J. Xxxxxxx Xxxxxx
Title: Manager
ONDEO NALCO ENERGY SERVICES MIDDLE
EAST HOLDINGS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Assistant Secretary
ONDEO NALCO ENERGY SERVICES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Assistant Secretary
ONDEO NALCO ENERGY SERVICES, L.P.
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Assistant Secretary
-3-
ONDEO NALCO GLOBAL HOLDINGS LLC
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Manager
ONDEO NALCO HOLDINGS LLC
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Manager
ONDEO NALCO INTERNATIONAL HOLDINGS LLC
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Manager
ONDEO NALCO U.S. HOLDINGS LLC
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Manager
ONDEO NALCO WORLDWIDE HOLDINGS LLC
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Manager
ONES EQUATORIAL GUINEA LLC
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Secretary
-0-
XXXX XXXX XXXXXX LLC
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Secretary
PAPER CHEMICALS, INC.
By: /s/ J. Xxxxxxx Xxxxxx
-------------------------------------
Name: J. Xxxxxxx Xxxxxx
Title: Secretary
PURE-CHEM PRODUCTS COMPANY, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Assistant Secretary
VISCO PRODUCTS COMPANY
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Secretary
-5-
CITICORP NORTH AMERICA, INC.,
as Collateral Agent
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Managing Director and Vice
President
-6-
Schedule I to
the Guarantee and
Collateral Agreement
Subsidiary Parties
Schedule II to
the Guarantee and
Collateral Agreement
EQUITY INTERESTS
Number of Issuer Number and Class of Percentage of
Certificate Registered Owner Equity Interest of Equity Interests
--------------------- ---------------- ------------------------ -------------------
DEBT SECURITIES
Issuer Principal Amount Date of Note Maturity Date
------ ---------------- ------------ -------------
Schedule III to
Guarantee and
Collateral Agreement
COPYRIGHTS OWNED BY [NAME OF Guarantor]
[Make a separate page of Schedule III for each Guarantor and state if no
copyrights are owned. List in numerical order by Registration No.]
U.S. Copyright Registrations
Title Reg. No. Author
----- -------- ------
Pending U.S. Copyright Applications for Registration
Title Author Class Date Filed
----- ------ ----- ----------
Schedule III to
Guarantee and
Collateral Agreement
PATENTS OWNED BY [NAME OF Guarantor]
[Make a separate page of Schedule III for each Guarantor and state if no patents
are owned. List in numerical order by Patent No./Patent Application No.]
U.S. Patent Registrations
Patent Numbers Issue Date
-------------- ----------
U.S. Patent Applications
Patent Application No Filing Date
--------------------- -----------
Schedule III
to Guarantee and
Collateral Agreement
TRADEMARKS OWNED BY [NAME OF Guarantor]
[Make a separate page of Schedule III for each Guarantor and state if no
trademarks are owned. List in numerical order by trademark
registration/application no.]
U.S. Trademark Registrations
Xxxx Reg. Date Reg. No.
---- --------- --------
U.S. Trademark Applications
Xxxx Filing Date Application No.
---- ----------- ---------------
Schedule IV to
Guarantee and
Collateral Agreement
LIMITED LIABILITY COMPANY INTERESTS
Exhibit I
to Guarantee and
Collateral Agreement
SUPPLEMENT NO. __ dated as of (this "Supplement"), to the U.S. Guarantee
and Collateral Agreement dated as of November 4, 2003 (the "U.S. Guarantee and
Collateral Agreement"), among NALCO HOLDINGS LLC, a Delaware limited liability
company, NALCO COMPANY, a Delaware corporation, each Subsidiary Party thereto
and CITICORP NORTH AMERICA, INC., as Collateral Agent (in such capacity, the
"Collateral Agent") for the Secured Parties (as defined herein).
A. Reference is made to the Credit Agreement dated as of November 4, 2003
(as amended, supplemented, waived or otherwise modified from time to time, the
"Credit Agreement"), among NALCO HOLDINGS LLC, a Delaware limited liability
company ("Holdings"), NALCO COMPANY, a Delaware corporation (the "U.S.
Borrower"), the Foreign Subsidiary Borrowers from time to time party thereto
(the "Foreign Subsidiary Borrowers" and collectively with the U.S. Borrower, the
"Borrowers"), the LENDERS party hereto from time to time, CITIGROUP GLOBAL
MARKETS INC. ("CGMI") and BANC OF AMERICA SECURITIES LLC ("BAS"), as global
coordinators (in such capacity, the "Global Coordinators"), CITICORP NORTH
AMERICA, INC., as administrative agent (in such capacity, the "Administrative
Agent") and as collateral agent (in such capacity, the "Collateral Agent") for
the Lenders, BANK OF AMERICA, N.A., as documentation agent (in such capacity,
the "Documentation Agent"), DEUTSCHE BANK SECURITIES INC. ("DBSI"), X.X. XXXXXX
SECURITIES INC. ("JPMSI"), XXXXXXX SACHS CREDIT PARTNERS L.P. ("GSCP") and UBS
SECURITIES LLC ("UBSS"), each as co-syndication agent (in such capacity, a
"Co-Syndication Agent"), and CGMI, BAS, DBSI, JPMSI, GSCP and UBSS, as joint
lead arrangers and joint book managers (in such capacity, the "Joint Lead
Arrangers").
B. Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the Credit Agreement and the U.S.
Guarantee and Collateral Agreement referred to therein.
C. The Guarantors have entered into the U.S. Guarantee and Collateral
Agreement in order to induce the Lenders to make Loans and each Issuing Bank to
issue Letters of Credit. Section 7.16 of the U.S. Guarantee and Collateral
Agreement provides that additional Subsidiaries may become Subsidiary Parties
under the U.S. Guarantee and 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 Credit Agreement to become a Subsidiary Party under the U.S.
Guarantee and Collateral Agreement in order to induce the Lenders to make
additional Loans and each Issuing Bank to issue additional Letters of Credit and
as consideration for Loans previously made and Letters of Credit previously
issued.
Accordingly, the Collateral Agent and the New Subsidiary agree as follows:
SECTION 1. In accordance with Section 7.16 of the U.S. Guarantee and
Collateral Agreement, the New Subsidiary by its signature below becomes a
Subsidiary Party and a Guarantor under the U.S. Guarantee and Collateral
Agreement with the same force and effect as if originally named therein as a
Subsidiary Party and a Guarantor, and the New Subsidiary hereby (a) agrees to
all the terms and provisions of the U.S. Guarantee and Collateral Agreement
applicable to it as a Subsidiary Party and Guarantor thereunder and (b)
represents and warrants that the representations and warranties made by it as a
Guarantor thereunder are true and correct, in all material respects, on and as
of the date hereof. In furtherance of the foregoing, the New Subsidiary, as
security for the payment and performance in full of the Obligations (as defined
in the U.S. Guarantee and Collateral Agreement), does hereby create and grant to
the Collateral Agent, its successors and assigns, for the ratable benefit of the
Secured Parties, their successors and assigns, a security interest in and Lien
on all the New Subsidiary's right, title and interest in and to the Collateral
(as defined in the U.S. Guarantee and Collateral Agreement) of the New
Subsidiary. Each reference to a "Subsidiary Party" or a "Guarantor" in the U.S.
Guarantee and Collateral Agreement shall be deemed to include the New
Subsidiary. The U.S. Guarantee and 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, subject
to (i) the effects of bankruptcy, insolvency, moratorium, reorganization,
fraudulent conveyance or other similar laws affecting creditors' rights
generally, (ii) general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law) and (iii)
implied covenants of good faith and fair dealing.
SECTION 3. This Agreement may be executed in two or more counterparts, each
of which shall constitute an original but all of which when taken together shall
constitute but one contract. This Supplement shall become effective when (a) the
Collateral Agent shall have received a counterpart of this Supplement that bears
the signature of the New Subsidiary and (b) the Collateral Agent has executed a
counterpart hereof.
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 Article 9 Collateral of the New Subsidiary, (b) set
forth on Schedule II attached hereto is a true and correct schedule of all the
Pledged Securities of the New Subsidiary and (c) 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 U.S. Guarantee and
Collateral Agreement shall remain in full force and effect.
SECTION 6. THIS SUPPLEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
UNDER THIS SUPPLEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK.
-2-
SECTION 7. In the event 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 U.S. Guarantee and Collateral Agreement shall not in any way
be affected or impaired thereby. 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 8. All communications and notices hereunder shall be in writing and
given as provided in Section 7.01 of the U.S. Guarantee and 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, disbursements and other charges of counsel for
the Collateral Agent.
IN WITNESS WHEREOF, the New Subsidiary and the Collateral Agent have duly
executed this Supplement to the U.S. Guarantee and Collateral Agreement as of
the day and year first above written.
[Name of New Subsidiary]
By:
-------------------------------------
Name:
Title:
Legal Name:
-----------------------------
Jurisdiction of Formation:
-3-
Location of Chief
Executive Office:
CITICORP NORTH AMERICA, INC., as
Collateral Agent
By:
-------------------------------------
Name:
Title:
-4-
Schedule I
to Supplement No.___ to the
Guarantee and
Collateral Agreement
LOCATION OF ARTICLE 9 COLLATERAL
Description Location
----------- --------
Schedule II to
Supplement No. __
to the Guarantee and
Collateral Agreement
Pledged Securities of the New Subsidiary
EQUITY INTERESTS
Number of Issuer Number and Class of Percentage of
Certificate Registered Owner Equity Interest of Equity Interests
--------------------- ---------------- ------------------------ -------------------
DEBT SECURITIES
Issuer Principal Amount Date of Note Maturity Date
------ ---------------- ------------ -------------
OTHER PROPERTY
