Exhibit 10.3

Execution Version

U.S. GUARANTEE AND COLLATERAL AGREEMENT

dated and effective as of

May 13, 2009,

among

NALCO HOLDINGS LLC,

NALCO COMPANY,

each Domestic Subsidiary of Holdings

identified herein,

and

BANK OF AMERICA, N.A.,

as Collateral Agent

--------------------------------------------------------------------------------

TABLE OF CONTENTS

 

          Page ARTICLE I.    Definitions   

SECTION 1.01.

  

Credit Agreement

   1

SECTION 1.02.

  

Other Defined Terms

   1 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

   8

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

 

-i-

--------------------------------------------------------------------------------

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

   21 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

   25

SECTION 5.04.

  

Securities Act, etc.

   25

SECTION 5.05.

  

Registration, etc.

   26 ARTICLE VI.    Indemnity, Subrogation and Subordination   

SECTION 6.01.

  

Indemnity and Subrogation

   26

SECTION 6.02.

  

Contribution and Subrogation

   27

SECTION 6.03.

  

Subordination

   27 ARTICLE VII.    Miscellaneous   

SECTION 7.01.

  

Notices

   27

SECTION 7.02.

  

Security Interest Absolute

   27

SECTION 7.03.

  

[Reserved]

   28

SECTION 7.04.

  

Binding Effect; Several Agreement

   28

 

-ii-

--------------------------------------------------------------------------------

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

   29

SECTION 7.08.

  

GOVERNING LAW

   30

SECTION 7.09.

  

Waivers; Amendment

   30

SECTION 7.10.

  

WAIVER OF JURY TRIAL

   30

SECTION 7.11.

  

Severability

   31

SECTION 7.12.

  

Counterparts

   31

SECTION 7.13.

  

Headings

   31

SECTION 7.14.

  

Jurisdiction; Consent to Service of Process

   31

SECTION 7.15.

  

Termination or Release

   32

SECTION 7.16.

  

Additional Subsidiaries

   32

SECTION 7.17.

  

Right of Set-off

   32

SECTION 7.18.

  

Subject to Pari Passu Intercreditor Agreement

   33

Schedules

 

Schedule I   

Subsidiary Parties

Schedule II   

Capital Stock; Debt Securities

Schedule III   

Intellectual Property

Exhibits

 

Exhibit I   

Form of Supplement to the U.S. Guarantee and Collateral Agreement

Exhibit II   

Form of U.S. Perfection Certificate

 

-iii-

--------------------------------------------------------------------------------

U.S. GUARANTEE AND COLLATERAL AGREEMENT dated and effective as of May 13, 2009
(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 BANK OF AMERICA, N.A., as Collateral Agent (in such
capacity and together with any successor Collateral Agent, the “Collateral
Agent”) for the Secured Parties (as defined below).

Reference is made to the Credit Agreement dated as of May 13, 2009 (as amended,
supplemented, waived or otherwise modified from time to time, the “Credit
Agreement”), among Holdings, 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, BANK OF AMERICA, N.A., as administrative agent (in such
capacity, the “Administrative Agent”) and as Collateral Agent for the Lenders,
BANC OF AMERICA SECURITIES LLC, DEUTSCHE BANK SECURITIES INC. and HSBC
SECURITIES (USA) INC., 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.

Holdings and each Subsidiary Party 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.

“Excluded Assets” has the meaning assigned to such term in Section 4.01(a) 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, trade secrets, domain names, confidential or
proprietary technical and business information, know-how, show-how or other data
or information and all related documentation.

 

-2-

--------------------------------------------------------------------------------

“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 payment and 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)(i) 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 (ii) the due and punctual
payment and performance of all obligations of Foreign Subsidiaries in respect
of Indebtedness (to the extent such Indebtedness is permitted to be incurred
under Section 6.01(k) of the Credit Agreement and is identified as Indebtedness
on Schedule 6.01(k) of the Credit Agreement (as modified from time to time) that
will be secured by a Lien on the Collateral) that is with a counterparty that is
a Lender or an Affiliate of a Lender at the time of borrowing and (d) the due
and punctual payment and performance of all obligations of U.S. Borrower and any
of its subsidiaries in respect of cash management services owed to a Lender or
any of its Affiliates (including treasury, depository, overdraft, credit or
debit card, electronic funds transfer and other cash management arrangements).

 

-3-

--------------------------------------------------------------------------------

“Pari Passu Intercreditor Agreement” means the Pari Passu Intercreditor
Agreement to be executed by the Existing Agent and the Collateral Agent.

“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 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 or a
Foreign Subsidiary 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) or
clause (d) 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.

“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.

 

-4-

--------------------------------------------------------------------------------

“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 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 irrevocably, absolutely and
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 (whether at the stated maturity, by acceleration
or otherwise). 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:

 

-5-

--------------------------------------------------------------------------------

(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;

(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 any Guarantor or their respective assets or
any resulting release or discharge of any Obligation,

(viii) the existence of any claim, set-off or other rights that a Guarantor may
have at any time against any Borrower, any other Guarantor, the Collateral
Agent, any Lender 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

 

-6-

--------------------------------------------------------------------------------

(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

(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 (C) 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 any 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, each 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 it may now or hereafter have 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.

 

-7-

--------------------------------------------------------------------------------

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 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 VII.

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

 

-8-

--------------------------------------------------------------------------------

“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 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.

 

-9-

--------------------------------------------------------------------------------

(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 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;

 

-10-

--------------------------------------------------------------------------------

(d) except for restrictions and limitations imposed by the Loan Documents, the
Pari Passu Intercreditor Agreement 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 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, 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 Agent shall have the

 

-11-

--------------------------------------------------------------------------------

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, 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

 

-12-

--------------------------------------------------------------------------------

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 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;

 

-13-

--------------------------------------------------------------------------------

(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 (collectively the “Excluded
Assets”) (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.

 

-14-

--------------------------------------------------------------------------------

(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 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

 

-15-

--------------------------------------------------------------------------------

(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 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. § 261, 15 U.S.C. § 1060 or
17 U.S.C. § 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 (or a short form 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.

 

-16-

--------------------------------------------------------------------------------

(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. 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 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 legal 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,

 

-17-

--------------------------------------------------------------------------------

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 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.

 

-18-

--------------------------------------------------------------------------------

(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.

(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:

 

-19-

--------------------------------------------------------------------------------

(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.

(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.

 

-20-

--------------------------------------------------------------------------------

(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.

(e) Notices. Each Guarantor will advise the Collateral Agent and the Lenders
promptly, in reasonable detail, of any Lien of which it has knowledge (other
than the Security Interests created hereby or Liens permitted under each of the
Credit Agreement and Loan Documents) on any of the Collateral which would
adversely affect, in any material respect, the ability of the Collateral Agent
to exercise any of its remedies hereunder.

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 (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 mark 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.

 

-21-

--------------------------------------------------------------------------------

(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 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 sue 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

 

-22-

--------------------------------------------------------------------------------

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 and 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 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)

 

-23-

--------------------------------------------------------------------------------

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 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.

(a) Subject to the terms of the Pari Passu Intercreditor Agreement (until the
Discharge of the 2003 Obligations (as defined in the Pari Passu Intercreditor
Agreement)), 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 in their respective capacity as Applicable Agent or
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.

 

-24-

--------------------------------------------------------------------------------

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 sue 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, 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
faith deem 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.

 

-25-

--------------------------------------------------------------------------------

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 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 or any other Security
Document 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.

 

-26-

--------------------------------------------------------------------------------

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.

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

 

-27-

--------------------------------------------------------------------------------

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 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, except that other than as permitted
under the Credit Agreement, no Borrower nor any other Loan Party may assign or
otherwise transfer any of its rights or obligations hereunder without the prior
written consent of the Collateral Agent and each Lender (and any attempted
assignment or transfer by a Borrower or any other Loan Party without such
consent shall be null and void).

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

 

-28-

--------------------------------------------------------------------------------

performance of this Agreement, 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 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, (i) 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; (ii) to demand, collect, receive payment of, give receipt for and give
discharges and releases of all or any of the Collateral; (iii) to ask for,
demand, sue for, collect, receive and give acquittance for any and all moneys
due or to become due under and by virtue of any Collateral; (iv) to sign the
name of any Pledgor on any invoice or bill of lading relating to any of the
Collateral; (v) to send verifications of Accounts to any Account Debtor; (vi) 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; (vii) to settle, compromise, compound, adjust or defend any actions,
suits or proceedings relating to all or any of the Collateral; (viii) to notify,
or to require any Guarantor to notify, Account Debtors to make payment directly
to the Collateral Agent; and (ix) 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

 

-29-

--------------------------------------------------------------------------------

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 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.

 

-30-

--------------------------------------------------------------------------------

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 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.

 

-31-

--------------------------------------------------------------------------------

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 Lenders that are
required by the Credit Agreement to consent to such transaction 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.

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.

 

-32-

--------------------------------------------------------------------------------

SECTION 7.18. Subject to Pari Passu Intercreditor Agreement. Notwithstanding
anything herein to the contrary until the Discharge of 2003 Obligations (as
defined in the Pari Passu Intercreditor Agreement), (i) the Liens and security
interests granted to the Collateral Agent pursuant to this Agreement are
expressly subject to the Pari Passu Intercreditor Agreement and (ii) the
exercise of any right or remedy by the Collateral Agent hereunder with respect
to the Liens and Security Interests granted to the Collateral Agent pursuant to
this Agreement is subject to the limitations and provisions of the Pari Passu
Intercreditor Agreement. In the event of any conflict between the terms of the
Pari Passu Intercreditor Agreement and the terms of this Agreement, as they
apply to the Liens and Security Interests granted to the Collateral Agent
pursuant to the terms of this Agreement, the terms of the Pari Passu
Intercreditor Agreement shall govern.

[Signature Page Follows]

 

-33-

--------------------------------------------------------------------------------

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/ Stephen N. Landsman   Name:    Stephen N. Landsman
  Title:   Vice President NALCO COMPANY By:    /s/ Stephen N. Landsman   Name: 
  Stephen N. Landsman   Title:   Vice President

S-1

--------------------------------------------------------------------------------

ADX CORP. By:   /s/ K. Thomas Kodiak   Name:    K. Thomas Kodiak   Title:  
President BOARD CHEMISTRY INCORPORATED By:   /s/ Stephen N. Landsman   Name:   
Stephen N. Landsman   Title:   Vice President & Secretary CALGON LLC By:   /s/
Stephen N. Landsman   Name:    Stephen N. Landsman   Title:   Vice President &
Secretary MOBOTEC AB, INC By:   /s/ Stephen N. Landsman   Name:    Stephen N.
Landsman   Title:   Vice President NALCO CROSSBOW WATER LLC By:   /s/ Stephen N.
Landsman   Name:    Stephen N. Landsman   Title:   Vice President & Secretary
NALCO DELAWARE COMPANY By:   /s/ Stephen N. Landsman   Name:    Stephen N.
Landsman   Title:   Vice President & Secretary

S-2

--------------------------------------------------------------------------------

  NALCO FT, INC. By:   /s/ Stephen N. Landsman   Name:    Stephen N. Landsman  
Title:   Vice President   NALCO INDUSTRIAL OUTSOURCING COMPANY By:   /s/ Stephen
N. Landsman   Name:    Stephen N. Landsman   Title:   Vice President   NALCO IP
HOLDER LLC By:   /s/ Stephen N. Landsman   Name:    Stephen N. Landsman   Title:
  Manager & Secretary   NALCO ONE SOURCE LLC By:   /s/ Stephen N. Landsman  
Name:    Stephen N. Landsman   Title:   Vice President   NALCO PWS, INC. By:  
/s/ Stephen N. Landsman   Name:    Stephen N. Landsman   Title:   Vice President
NALCO RESOURCES INVESTMENT COMPANY By:   /s/ Stephen N. Landsman   Name:   
Stephen N. Landsman   Title:   Vice President

S-3

--------------------------------------------------------------------------------

  NALCO TWO, INC. By:   /s/ Stephen N. Landsman   Name:    Stephen N. Landsman  
Title:   Secretary   NALCO LEASING CORPORATION By:   /s/ Stephen N. Landsman  
Name:    Stephen N. Landsman   Title:   Vice President   NALGREEN, INC. By:  
/s/ Stephen N. Landsman   Name:    Stephen N. Landsman   Title:   Vice President
  NALTECH, INC. By:   /s/ Stephen N. Landsman   Name:    Stephen N. Landsman  
Title:   Vice President   NALCO COMPANY LLC By:   /s/ Stephen N. Landsman  
Name:    Stephen N. Landsman   Title:   Vice President   NALCO ENERGY SERVICES
MIDDLE EAST HOLDINGS, INC. By:   /s/ Stephen N. Landsman   Name:    Stephen N.
Landsman   Title:   Vice President

S-4

--------------------------------------------------------------------------------

  NALCO GLOBAL HOLDINGS LLC By:   /s/ Michael Murphy   Name:    Michael Murphy  
Title:   Manager   NALCO INTERNATIONAL HOLDINGS LLC By:   /s/ Michael Murphy  
Name:    Michael Murphy   Title:   Manager   NALCO ENERGY SERVICES EQUATORIAL
GUINEA LLC By:   /s/ Stephen N. Landsman   Name:    Stephen N. Landsman   Title:
  Vice President   ONES WEST AFRICA LLC By:   /s/ Stephen N. Landsman   Name:   
Stephen N. Landsman   Title:   Vice President   PURE-CHEM PRODUCTS COMPANY, INC.
By:   /s/ Stephen N. Landsman   Name:    Stephen N. Landsman   Title:   Vice
President   VISCO PRODUCTS COMPANY By:   /s/ Stephen N. Landsman   Name:   
Stephen N. Landsman   Title:   Vice President

S-5

--------------------------------------------------------------------------------

  BANK OF AMERICA, N.A.,   as Collateral Agent By:   /s/ Jeff Hallmark   Name: 
  Jeff Hallmark   Title:   Senior Vice President

S-6

--------------------------------------------------------------------------------

Schedule I to

the Guarantee and

Collateral Agreement

Subsidiary Parties

--------------------------------------------------------------------------------

Schedule II to

the Guarantee and

Collateral Agreement

EQUITY INTERESTS

 

Number of Issuer
Certificate

  

Registered Owner

  

Number and Class of

Equity Interest

  

Percentage 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

Mark

  

Reg. Date

  

Reg. No.

                                    U.S. Trademark Applications

Mark

  

Filing Date

  

Application No.

                             

--------------------------------------------------------------------------------

EXHIBIT I TO THE

TO GUARANTEE AND

COLLATERAL AGREEMENT

SUPPLEMENT NO. __ dated as of                          (this “Supplement”), to
the U.S. Guarantee and Collateral Agreement dated as of May 13, 2009 (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 BANK OF AMERICA, N.A., 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 May 13, 2009 (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, BANK OF AMERICA, N.A.,
as administrative agent (in such capacity, the “Administrative Agent”) and as
collateral agent (in such capacity, the “Collateral Agent”) for the Lenders, and
BANC OF AMERICA SECURITIES LLC, DEUTSCHE BANK SECURITIES INC. and HSBC
SECURITIES (USA) INC., 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.

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.

 

-2-

--------------------------------------------------------------------------------

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: Location of Chief Executive Office: BANK OF AMERICA, N.A., as
Collateral Agent By:        Name:   Title:

 

-3-

--------------------------------------------------------------------------------

     

Schedule I

to Supplement No.___ to the

Guarantee and

Collateral Agreement

LOCATION OF ARTICLE 9 COLLATERAL

 

Description

   Location               

 

-4-

--------------------------------------------------------------------------------

     

Schedule II to

Supplement No. __

to the Guarantee and

Collateral Agreement

Pledged Securities of the New Subsidiary

EQUITY INTERESTS

 

Number of Issuer
Certificate

  

Registered Owner

  

Number and Class of
Equity Interest

  

Percentage of
Equity Interests

                                            

DEBT SECURITIES

 

Issuer

  

Principal Amount

  

Date of Note

  

Maturity Date

                                                     

OTHER PROPERTY