Exhibit 10.4
Execution Copy
 
 
GUARANTEE AND COLLATERAL AGREEMENT
made by
FIRST SOLAR, INC.
in favor of
JPMORGAN CHASE BANK, N.A.,

as Administrative Agent
Dated as of September 4, 2009
 
 

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TABLE OF CONTENTS

                      Page
 
           
SECTION 1.
  DEFINED TERMS     3  
1.1
  Definitions     3  
1.2
  Other Definitional Provisions     6  
 
           
SECTION 2.
  GUARANTEE     6  
2.1
  Guarantee of Company Obligations     6  
2.2
  Guarantee of Borrowing Subsidiaries Obligations     7  
2.3
  Right of Contribution     7  
2.4
  No Subrogation     8  
2.5
  Amendments, etc. with respect to the Company Obligations and the Borrowing
Subsidiaries Obligations     8  
2.6
  Guarantee Absolute and Unconditional     9  
2.7
  Reinstatement     9  
2.8
  Payments     10  
 
           
SECTION 3.
  GRANT OF SECURITY INTEREST     10  
 
           
SECTION 4.
  REPRESENTATIONS AND WARRANTIES     10  
4.1
  Title; No Other Liens     10  
4.2
  Perfected First Priority Liens     10  
4.3
  Jurisdiction of Organization; Chief Executive Office     11  
4.4
  Investment Property     11  
4.5
  Intercompany Receivables     11  
 
           
SECTION 5.
  COVENANTS     11  
5.1
  Delivery of Instruments, Certificated Securities and Chattel Paper     11  
5.2
  Maintenance of Perfected Security Interest; Further Documentation     11  
5.3
  Changes in Name, etc     12  
5.4
  Pledged Securities     12  
 
           
SECTION 6.
  REMEDIAL PROVISIONS     13  
6.1
  Certain Matters Relating to Intercompany Receivables     13  
6.2
  Grantors Remain Liable     13  
6.3
  Pledged Securities     14  
6.4
  Application of Proceeds     14  
6.5
  Code and Other Remedies     15  
6.6
  Registration Rights     16  
6.7
  Subordination     16  
6.8
  Deficiency     16  
 
           
SECTION 7.
  THE ADMINISTRATIVE AGENT     17  
7.1
  Administrative Agent’s Appointment as Attorney-in-Fact, etc     17  
7.2
  Duty of Administrative Agent     18  
7.3
  Execution of Financing Statements     18  
7.4
  Authority of Administrative Agent     18  
 
           
SECTION 8.
  MISCELLANEOUS     19  

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                      Page
 
 
8.1
  Amendments in Writing     19  
8.2
  Notices     19  
8.3
  No Waiver by Course of Conduct; Cumulative Remedies     19  
8.4
  Enforcement Expenses; Indemnification     19  
8.5
  Successors and Assigns     19  
8.6
  Set-Off     19  
8.7
  Counterparts     20  
8.8
  Severability     20  
8.9
  Section Headings     20  
8.10
  Integration     20  
8.11
  GOVERNING LAW     20  
8.12
  Submission To Jurisdiction; Waivers     20  
8.13
  Acknowledgements     21  
8.14
  Additional Grantors     21  
8.15
  Releases     21  
8.16
  WAIVER OF JURY TRIAL     22  

SCHEDULES

     
Schedule 1
  Notice Addresses
Schedule 2
  Investment Property
Schedule 3
  Perfection Matters
Schedule 4
  Jurisdictions of Organization and Chief Executive Offices

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GUARANTEE AND COLLATERAL AGREEMENT
          GUARANTEE AND COLLATERAL AGREEMENT, dated as of September 4, 2009,
made by each of the signatories hereto (together with any other entity that may
become a party hereto as provided herein, the “Grantors”), in favor of JPMORGAN
CHASE BANK, N.A., as Administrative Agent (in such capacity, the “Administrative
Agent”) for the banks and other financial institutions or entities (the
“Lenders”) from time to time parties to the Credit Agreement, dated as of
September 4, 2009 (as amended, supplemented or otherwise modified from time to
time, the “Credit Agreement”), among FIRST SOLAR, INC. (the “Company”), the
Borrowing Subsidiaries party thereto (the “Borrowing Subsidiaries”), the Lenders
and the Administrative Agent.
WITNESSETH:
          WHEREAS, pursuant to the Credit Agreement, the Lenders have severally
agreed to make extensions of credit to the Company and the Borrowing
Subsidiaries upon the terms and subject to the conditions set forth therein;
          WHEREAS, the Company and each Borrowing Subsidiary is a member of an
affiliated group of companies that includes each other Grantor;
          WHEREAS, the proceeds of the extensions of credit under the Credit
Agreement will be used in part to enable the Company and the Borrowing
Subsidiaries to make valuable transfers to one or more of the other Grantors in
connection with the operation of their respective businesses;
          WHEREAS, the Company, the Borrowing Subsidiaries and the other
Grantors are engaged in related businesses, and each Grantor will derive
substantial direct and indirect benefit from the making of the extensions of
credit under the Credit Agreement; and
          WHEREAS, it is a condition precedent to the obligation of the Lenders
to make their respective extensions of credit to the Company and the Borrowing
Subsidiaries under the Credit Agreement that the Grantors shall have executed
and delivered this Agreement to the Administrative Agent for the ratable benefit
of the Secured Parties;
          NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent and the Lenders to enter into the Credit Agreement and to
induce the Lenders to make their respective extensions of credit to the Company
and the Borrowing Subsidiaries thereunder, each Grantor hereby agrees with the
Administrative Agent, for the ratable benefit of the Secured Parties, as
follows:
SECTION 1. DEFINED TERMS
     1.1 Definitions. (a) Unless otherwise defined herein, terms defined in the
Credit Agreement and used herein shall have the meanings given to them in the
Credit Agreement, and the following terms are used herein as defined in the New
York UCC: Certificated Security, Chattel Paper, Instruments and Supporting
Obligations.
     (b) The following terms shall have the following meanings:
          “Agreement”: this Guarantee and Collateral Agreement, as the same may
be amended, supplemented or otherwise modified from time to time.

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          “Borrowing Subsidiaries Obligations”: the collective reference to the
unpaid principal of and interest on the Loans and Reimbursement Obligations and
all other obligations and liabilities of the Borrowing Subsidiaries (including,
without limitation, interest accruing at the then applicable rate provided in
the Credit Agreement after the maturity of the Loans and Reimbursement
Obligations and interest accruing at the then applicable rate provided in the
Credit Agreement after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating to
any Borrowing Subsidiary, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding) to the Administrative
Agent or any Lender (or, in the case of any Specified Swap Agreement, any
Affiliate of any Lender), whether direct or indirect, absolute or contingent,
due or to become due, or now existing or hereafter incurred, which may arise
under, out of, or in connection with, the Credit Agreement, this Agreement, the
other Loan Documents, any Letter of Credit, any Specified Swap Agreement or any
other document made, delivered or given in connection with any of the foregoing,
in each case whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses or otherwise (including, without
limitation, all fees and disbursements of counsel to the Administrative Agent or
to the Lenders that are required to be paid by the Borrowing Subsidiaries
pursuant to the terms of any of the foregoing agreements). “Borrowing
Subsidiaries Obligations” shall be read as collectively referring to the
Borrowing Subsidiaries Obligations of all Borrowing Subsidiaries, except when
the context suggests it is referring only to the Borrowing Subsidiaries
Obligations of an individual Borrowing Subsidiary.
          “Collateral”: as defined in Section 3.
          “Collateral Account”: any collateral account established by the
Administrative Agent as provided in Section 6.1.
          “Company Obligations”: the collective reference to the unpaid
principal of and interest on the Loans and Reimbursement Obligations and all
other obligations and liabilities of the Company (including, without limitation,
interest accruing at the then applicable rate provided in the Credit Agreement
after the maturity of the Loans and Reimbursement Obligations and interest
accruing at the then applicable rate provided in the Credit Agreement after the
filing of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Company, whether or not a
claim for post-filing or post-petition interest is allowed in such proceeding)
to the Administrative Agent or any Lender (or, in the case of any Specified Swap
Agreement, any Affiliate of any Lender), whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter incurred, which
may arise under, out of, or in connection with, the Credit Agreement, this
Agreement, the other Loan Documents, any Letter of Credit, any Specified Swap
Agreement or any other document made, delivered or given in connection with any
of the foregoing, in each case whether on account of principal, interest,
reimbursement obligations, fees, indemnities, costs, expenses or otherwise
(including, without limitation, all fees and disbursements of counsel to the
Administrative Agent or to the Lenders that are required to be paid by the
Company pursuant to the terms of any of the foregoing agreements).
          “Foreign Debt Guarantors”: the collective reference to each Grantor.
          “Foreign Subsidiary”: any Subsidiary organized under the laws of any
jurisdiction outside the United States of America.
          “Foreign Subsidiary Voting Stock”: the voting Capital Stock of any
Foreign Subsidiary.
          “Guarantor Obligations”: with respect to any Guarantor, the collective
reference to all obligations and liabilities of such Guarantor which may arise
under or in connection with this Agreement or any other Loan Document or any
Specified Swap Agreement to which such Guarantor is a party, in

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each case whether on account of guarantee obligations, reimbursement
obligations, fees, indemnities, costs, expenses or otherwise (including, without
limitation, all fees and disbursements of counsel to the Administrative Agent or
to the Lenders that are required to be paid by such Guarantor pursuant to the
terms of this Agreement or any other Loan Document).
          “Guarantors”: the collective reference to each Grantor, in its
capacity as a U.S. Guarantor or as a Foreign Debt Guarantor.
          “Intercompany Note”: any promissory note evidencing loans or advances
made by a Grantor to the Company or any of its Subsidiaries (but, in the case
such promissory note is owing by an Unrestricted Subsidiary, only if it arises
out of the sale of solar modules).
          “Intercompany Receivable”: any right to payment held by a Grantor for
goods sold or leased or for services rendered or loans or funds advanced to the
Company or any of its Subsidiaries (but, in the case such right to payment is
owing by an Unrestricted Subsidiary, only if it arises out of the sale of solar
modules), whether or not such right is evidenced by an Instrument or Chattel
Paper and whether or not it has been earned by performance.
          “Investment Property”: the collective reference to (i) all “investment
property” as such term is defined in Section 9-102(a)(49) of the New York UCC
(other than any Foreign Subsidiary Voting Stock excluded from the definition of
“Pledged Stock”) and (ii) whether or not constituting “investment property” as
so defined, all Pledged Notes and all Pledged Stock.
          “Issuers”: the collective reference to each issuer of any Pledged
Security.
          “New York UCC”: the Uniform Commercial Code as from time to time in
effect in the State of New York.
          “Obligations”: (i) in the case of the Company, the Company
Obligations, (ii) in the case of any Borrowing Subsidiary, the Borrowing
Subsidiaries Obligations, and (iii) in the case of each Guarantor (including the
Company and any Borrowing Subsidiary in its capacity as a Foreign Debt
Guarantor), its Guarantor Obligations.
          “Pledged Notes”: all Intercompany Notes listed on Schedule 2 and all
other Intercompany Notes at any time issued to any Grantor.
          “Pledged Securities”: the collective reference to the Pledged Notes
and the Pledged Stock.
          “Pledged Stock”: the shares of Capital Stock listed on Schedule 2,
together with any other shares, stock certificates, options, interests or rights
of any nature whatsoever in respect of the Capital Stock of any Restricted
Subsidiary that may be issued or granted to, or held by, any Grantor while this
Agreement is in effect; provided that in no event shall more than 66% of the
total outstanding Foreign Subsidiary Voting Stock of any first-tier Foreign
Subsidiary of a Grantor be pledged hereunder by any Grantor as collateral
security for the payment and performance of the Company Obligations, the
Borrowing Subsidiaries Obligations of any Domestic Subsidiary that is a
Borrowing Subsidiary or the Guarantor Obligations.
          “Proceeds”: all “proceeds” as such term is defined in
Section 9-102(a)(64) of the New York UCC and, in any event, shall include,
without limitation, all dividends or other income from the Investment Property,
collections thereon or distributions or payments with respect thereto.

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          “Secured Parties”: the collective reference to the Administrative
Agent, the Lenders, each Issuing Lender and any affiliate of any Lender to which
Company Obligations, Borrowing Subsidiaries Obligations or Guarantor
Obligations, as applicable, are owed.
          “Securities Act”: the Securities Act of 1933, as amended.
          “U.S. Guarantor”: the collective reference to each Grantor other than
the Company.
     1.2 Other Definitional Provisions. (a) The words “hereof,” “herein”,
“hereto” and “hereunder” and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of
this Agreement, and Section and Schedule references are to this Agreement unless
otherwise specified.
     (b) The meanings given to terms defined herein shall be equally applicable
to both the singular and plural forms of such terms.
     (c) Where the context requires, terms relating to the Collateral or any
part thereof, when used in relation to a Grantor, shall refer to such Grantor’s
Collateral or the relevant part thereof.
SECTION 2. GUARANTEE
     2.1 Guarantee of Company Obligations. (a) Each of the U.S. Guarantors
hereby, jointly and severally, unconditionally and irrevocably, guarantees to
the Administrative Agent, for the ratable benefit of the Secured Parties and
their respective successors, indorsees, transferees and assigns, the prompt and
complete payment and performance by the Company when due (whether at the stated
maturity, by acceleration or otherwise) of the Company Obligations.
     (b) Anything herein or in any other Loan Document to the contrary
notwithstanding, the maximum liability of each U.S. Guarantor hereunder and
under the other Loan Documents shall in no event exceed the amount which can be
guaranteed by such U.S. Guarantor under applicable federal and state laws
relating to the insolvency of debtors (after giving effect to the right of
contribution established in Section 2.3).
     (c) Each U.S. Guarantor agrees that the Company Obligations may at any time
and from time to time exceed the amount of the liability of such U.S. Guarantor
hereunder without impairing the guarantee contained in this Section 2.1 or
affecting the rights and remedies of the Administrative Agent or any Lender
hereunder.
     (d) The guarantee contained in this Section 2 shall remain in full force
and effect until all the Company Obligations and the obligations of each U.S.
Guarantor under the guarantee contained in this Section 2.1 shall have been
satisfied by payment in full, no Letter of Credit shall be outstanding and the
Revolving Commitments shall be terminated, notwithstanding that from time to
time during the term of the Credit Agreement the Company may be free from any
Company Obligations.
     (e) No payment made by the Company, any of the U.S. Guarantors, any other
guarantor or any other Person or received or collected by the Administrative
Agent or any Lender from the Company, any of the U.S. Guarantors, any other
guarantor or any other Person by virtue of any action or proceeding or any
set-off or appropriation or application at any time or from time to time in
reduction of or in payment of the Company Obligations shall be deemed to modify,
reduce, release or otherwise affect the liability of any U.S. Guarantor
hereunder which shall, notwithstanding any such payment (other than any payment
made by such U.S. Guarantor in respect of the Company Obligations or any payment
received or

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collected from such U.S. Guarantor in respect of the Company Obligations),
remain liable for the Company Obligations up to the maximum liability of such
U.S. Guarantor hereunder until the Company Obligations are paid in full, no
Letter of Credit shall be outstanding and the Revolving Commitments are
terminated.
     2.2 Guarantee of Borrowing Subsidiaries Obligations. (a) Each of the
Foreign Debt Guarantors hereby, jointly and severally, unconditionally and
irrevocably, guarantees to the Administrative Agent, for the ratable benefit of
the Secured Parties and their respective successors, indorsees, transferees and
assigns, the prompt and complete payment and performance by each Borrowing
Subsidiary when due (whether at the stated maturity, by acceleration or
otherwise) of the Borrowing Subsidiary Obligations.
     (b) Anything herein or in any other Loan Document to the contrary
notwithstanding, the maximum liability of each Foreign Debt Guarantor hereunder
and under the other Loan Documents shall in no event exceed the amount which can
be guaranteed by such Foreign Debt Guarantor under applicable federal or state
laws (after giving effect to the right of contribution established in Section
2.3).
     (c) Each Foreign Debt Guarantor agrees that the Borrowing Subsidiaries
Obligations may at any time and from time to time exceed the amount of the
liability of such Foreign Debt Guarantor hereunder without impairing the
guarantee contained in this Section 2.2 or affecting the rights and remedies of
the Administrative Agent or any Lender hereunder.
     (d) The guarantee contained in this Section 2.2 shall remain in full force
and effect until all the Borrowing Subsidiaries Obligations and the obligations
of each Foreign Debt Guarantor under the guarantee contained in this Section 2.2
shall have been satisfied by payment in full, no Letter of Credit shall be
outstanding and the Revolving Commitments shall be terminated, notwithstanding
that from time to time during the term of the Credit Agreement the Borrowing
Subsidiaries may be free from any Borrowing Subsidiaries Obligations.
     (e) No payment made by the Borrowing Subsidiaries, any of the Foreign Debt
Guarantors, any other guarantor or any other Person or received or collected by
the Administrative Agent or any Lender from the Borrowing Subsidiaries, any of
the Foreign Debt Guarantors, any other guarantor or any other Person by virtue
of any action or proceeding or any set-off or appropriation or application at
any time or from time to time in reduction of or in payment of the Borrowing
Subsidiaries Obligations shall be deemed to modify, reduce, release or otherwise
affect the liability of any Foreign Debt Guarantor hereunder which shall,
notwithstanding any such payment (other than any payment made by such Foreign
Debt Guarantor in respect of the Borrowing Subsidiaries Obligations or any
payment received or collected from such Foreign Debt Guarantor in respect of the
Borrowing Subsidiaries Obligations), remain liable for the Borrowing
Subsidiaries Obligations up to the maximum liability of such Foreign Debt
Guarantor hereunder until the Borrowing Subsidiaries Obligations are paid in
full, no Letter of Credit shall be outstanding and the Revolving Commitments are
terminated.
     2.3 Right of Contribution.
     (a) Each U.S. Guarantor hereby agrees that to the extent that a U.S.
Guarantor shall have paid more than its proportionate share of any payment made
hereunder pursuant to the guarantee contained in Section 2.1, such U.S.
Guarantor shall be entitled to seek and receive contribution from and against
any other U.S. Guarantor hereunder which has not paid its proportionate share of
such payment. Each U.S. Guarantor’s right of contribution shall be subject to
the terms and conditions of Section 2.4. The provisions of this Section 2.3(a)
shall in no respect limit the obligations and liabilities of any U.S. Guarantor
to the Administrative Agent and the Lenders, and each U.S. Guarantor shall
remain liable to

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the Administrative Agent and the Lenders for the full amount guaranteed by such
U.S. Guarantor hereunder.
     (b) Each Foreign Debt Guarantor hereby agrees that to the extent that a
Foreign Debt Guarantor shall have paid more than its proportionate share of any
payment made hereunder pursuant to the guarantee contained in Section 2.2, such
Foreign Debt Guarantor shall be entitled to seek and receive contribution from
and against any other Foreign Debt Guarantor hereunder which has not paid its
proportionate share of such payment. Each Foreign Debt Guarantor’s right of
contribution shall be subject to the terms and conditions of Section 2.4. The
provisions of this Section 2.3(b) shall in no respect limit the obligations and
liabilities of any Foreign Debt Guarantor to the Administrative Agent and the
Lenders, and each Foreign Debt Guarantor shall remain liable to the
Administrative Agent and the Lenders for the full amount guaranteed by such
Foreign Debt Guarantor hereunder.
     2.4 No Subrogation. Notwithstanding any payment made by any Guarantor
hereunder or any set-off or application of funds of any Guarantor by the
Administrative Agent or any Lender, no Guarantor shall be entitled to be
subrogated to any of the rights of the Administrative Agent or any Lender
against the Company or the Borrowing Subsidiaries, as applicable, or any other
Guarantor or any collateral security or guarantee or right of offset held by the
Administrative Agent or any Lender for the payment of the Company Obligations or
the Borrowing Subsidiaries Obligations, as applicable, nor shall any Guarantor
seek or be entitled to seek any contribution or reimbursement from the Company
or the Borrowing Subsidiaries, as applicable, or any other Guarantor in respect
of payments made by such Guarantor hereunder, until all amounts owing to the
Administrative Agent and the Lenders on account of the Company Obligations or
the Borrowing Subsidiaries Obligations, as applicable, are paid in full, no
Letter of Credit shall be outstanding and the Revolving Commitments are
terminated. If any amount shall be paid to any Guarantor on account of such
subrogation rights at any time when all of the Company Obligations or Borrowing
Subsidiaries Obligations, as applicable, shall not have been paid in full, such
amount shall be held by such Guarantor in trust for the Administrative Agent and
the Lenders, segregated from other funds of such Guarantor, and shall, forthwith
upon receipt by such Guarantor, be turned over to the Administrative Agent in
the exact form received by such Guarantor (duly indorsed by such Guarantor to
the Administrative Agent, if required), to be applied against the Company
Obligations or the Borrowing Subsidiaries Obligations, as applicable, whether
matured or unmatured, in such order as the Administrative Agent may determine.
     2.5 Amendments, etc. with respect to the Company Obligations and the
Borrowing Subsidiaries Obligations. Each Guarantor shall remain obligated
hereunder notwithstanding that, without any reservation of rights against any
Guarantor and without notice to or further assent by any Guarantor, any demand
for payment of any of the Company Obligations or Borrowing Subsidiaries
Obligations, as applicable, made by the Administrative Agent or any Lender may
be rescinded by the Administrative Agent or such Lender and any of the Company
Obligations or Borrowing Subsidiaries Obligations, as applicable, continued, and
the Company Obligations or the Borrowing Subsidiary Obligations, as applicable,
or the liability of any other Person upon or for any part thereof, or any
collateral security or guarantee therefor or right of offset with respect
thereto, may, from time to time, in whole or in part, be renewed, extended,
amended, modified, accelerated, compromised, waived, surrendered or released by
the Administrative Agent or any Lender, and the Credit Agreement and the other
Loan Documents and any other documents executed and delivered in connection
therewith may be amended, modified, supplemented or terminated, in whole or in
part, as the Administrative Agent (or the Required Lenders or all Lenders, as
the case may be) may deem advisable from time to time, and any collateral
security, guarantee or right of offset at any time held by the Administrative
Agent or any Lender for the payment of the Company Obligations and the Borrowing
Subsidiary Obligations may be sold, exchanged, waived, surrendered or released.
Neither the Administrative Agent nor any Lender shall have any obligation to
protect, secure, perfect or insure any Lien at any time held by it as security
for the Company Obligations

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or Borrowing Subsidiaries Obligations or for the guarantees contained in this
Section 2 or any property subject thereto.
     2.6 Guarantee Absolute and Unconditional. Each Guarantor waives any and all
notice of the creation, renewal, extension or accrual of any of the Company
Obligations or Borrowing Subsidiaries Obligations, as applicable, and notice of
or proof of reliance by the Administrative Agent or any Lender upon the
guarantees contained in this Section 2 or acceptance of the guarantees contained
in this Section 2; the Company Obligations and the Borrowing Subsidiary
Obligations, as applicable, and any of them, shall conclusively be deemed to
have been created, contracted or incurred, or renewed, extended, amended or
waived, in reliance upon the guarantees contained in this Section 2; and all
dealings between the Company or the Borrowing Subsidiaries, as applicable, and
any of the Guarantors, on the one hand, and the Administrative Agent and the
Lenders, on the other hand, likewise shall be conclusively presumed to have been
had or consummated in reliance upon the guarantees contained in this Section 2.
Each Guarantor waives diligence, presentment, protest, demand for payment and
notice of default or nonpayment to or upon the Company or the Borrowing
Subsidiaries, as applicable or any of the Guarantors with respect to the Company
Obligations or the Borrowing Subsidiaries Obligations, as applicable. Each
Guarantor understands and agrees that the guarantee contained in this Section 2
shall be construed as a continuing, absolute and unconditional guarantee of
payment without regard to (a) the validity or enforceability of the Credit
Agreement or any other Loan Document, any of the Company Obligations or
Borrowing Subsidiary Obligations or any other collateral security therefor or
guarantee or right of offset with respect thereto at any time or from time to
time held by the Administrative Agent or any Lender, (b) any defense, set-off or
counterclaim (other than a defense of payment or performance) which may at any
time be available to or be asserted by the Company or the Borrowing
Subsidiaries, as applicable, or any other Person against the Administrative
Agent or any Lender, or (c) any other circumstance whatsoever (with or without
notice to or knowledge of the Company or the Borrowing Subsidiaries, as
applicable, or such Guarantor) which constitutes, or might be construed to
constitute, an equitable or legal discharge of the Company for the Company
Obligations or of the Borrowing Subsidiaries for the Borrowing Subsidiaries
Obligations, as applicable, or of such Guarantor under the guarantees contained
in this Section 2, in bankruptcy or in any other instance. When making any
demand hereunder or otherwise pursuing its rights and remedies hereunder against
any Guarantor, the Administrative Agent or any Lender may, but shall be under no
obligation to, make a similar demand on or otherwise pursue such rights and
remedies as it may have against the Company or the Borrowing Subsidiaries, as
applicable, any other Guarantor or any other Person or against any collateral
security or guarantee for the Company Obligations or the Borrowing Subsidiary
Obligations, as applicable, or any right of offset with respect thereto, and any
failure by the Administrative Agent or any Lender to make any such demand, to
pursue such other rights or remedies or to collect any payments from the Company
or the Borrowing Subsidiaries, as applicable, any other Guarantor or any other
Person or to realize upon any such collateral security or guarantee or to
exercise any such right of offset, or any release of the Company or the
Borrowing Subsidiaries, as applicable, any other Guarantor or any other Person
or any such collateral security, guarantee or right of offset, shall not relieve
any Guarantor of any obligation or liability hereunder, and shall not impair or
affect the rights and remedies, whether express, implied or available as a
matter of law, of the Administrative Agent or any Lender against any Guarantor.
For the purposes hereof “demand” shall include the commencement and continuance
of any legal proceedings.
     2.7 Reinstatement. The guarantees contained in this Section 2 shall
continue to be effective, or be reinstated, as the case may be, if at any time
payment, or any part thereof, of any of the Company Obligations or any of the
Borrowing Subsidiaries Obligations, as applicable, is rescinded or must
otherwise be restored or returned by the Administrative Agent or any Lender upon
the insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Company or any Borrowing Subsidiary, as applicable, or any Guarantor, or upon or
as a result of the appointment of a receiver, intervenor or conservator of, or
trustee or similar officer for, the Company or any Borrowing Subsidiary, as
applicable

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or any Guarantor or any substantial part of its property, or otherwise, all as
though such payments had not been made.
     2.8 Payments. Each Guarantor hereby guarantees that payments hereunder will
be paid to the Administrative Agent without set-off or counterclaim in Dollars
or Euros pursuant to the Credit Agreement at the applicable Funding Office
specified in the Credit Agreement.
SECTION 3. GRANT OF SECURITY INTEREST
          Each Grantor, as collateral security for the prompt and complete
payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of such Grantor’s Obligations, hereby assigns and
transfers to the Administrative Agent, and hereby grants to the Administrative
Agent, for the ratable benefit of the Secured Parties, a security interest in
(i) all Intercompany Receivables, (ii) all Pledged Securities, and (iii) 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, now owned or at any time
hereafter acquired by such Grantor or in which such Grantor now has or at any
time in the future may acquire any right, title or interest (collectively, the
“Collateral”); provided, however, that notwithstanding any of the other
provisions set forth in this Section 3, this Agreement shall not constitute a
grant of a security interest in any property to the extent that such grant of a
security interest is prohibited by any Requirements of Law of a Governmental
Authority, requires a consent not obtained of any Governmental Authority
pursuant to such Requirement of Law or is prohibited by, or constitutes a breach
or default under or results in the termination of or requires any consent not
obtained under, any contract, license, agreement, instrument or other document
evidencing or giving rise to such property or, in the case of any Pledged
Security any applicable shareholder or similar agreement, except to the extent
that such Requirement of Law or the term in such contract, license, agreement,
instrument or other document or shareholder or similar agreement providing for
such prohibition, breach, default or termination or requiring such consent is
ineffective under applicable law.
SECTION 4. REPRESENTATIONS AND WARRANTIES
          To induce the Administrative Agent and the Lenders to enter into the
Credit Agreement and to induce the Lenders to make their respective extensions
of credit to the Company and the Borrowing Subsidiaries thereunder, each Grantor
hereby represents and warrants to the Administrative Agent and each Lender that:
     4.1 Title; No Other Liens. Except for the security interest granted to the
Administrative Agent for the ratable benefit of the Secured Parties pursuant to
this Agreement and the other Liens permitted to exist on the Collateral by the
Credit Agreement, such Grantor owns each item of the Collateral free and clear
of any and all Liens or claims of others. No financing statement or other public
notice with respect to all or any part of the Collateral is on file or of record
in any public office, except such as have been filed in favor of the
Administrative Agent, for the ratable benefit of the Secured Parties, pursuant
to this Agreement or as are permitted by the Credit Agreement.
     4.2 Perfected First Priority Liens. The security interests granted pursuant
to this Agreement (a) upon completion of the filings and other actions specified
in Schedule 3 will constitute valid perfected security interests in all of the
Collateral in favor of the Administrative Agent, for the ratable benefit of the
Secured Parties, as collateral security for such Grantor’s Obligations,
enforceable in accordance with the terms hereof against all creditors of such
Grantor and any Persons purporting to purchase any Collateral from such Grantor
and (b) are prior to all other Liens on the Collateral in existence on the date
hereof

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except for Liens permitted by the Credit Agreement which have priority over the
Liens on the Collateral by operation of law.
     4.3 Jurisdiction of Organization; Chief Executive Office. On the date
hereof, such Grantor’s jurisdiction of organization, identification number from
the jurisdiction of organization (if any), and the location of such Grantor’s
chief executive office are specified on Schedule 4.
     4.4 Investment Property. (a) The shares of Pledged Stock pledged by such
Grantor hereunder constitute all the issued and outstanding shares of all
classes of the Capital Stock of each Issuer owned by such Grantor or, in the
case of pledges of Foreign Subsidiary Voting Stock, if less, 66% of the
outstanding Foreign Subsidiary Voting Stock of each relevant Issuer.
     (b) All the shares of the Pledged Stock have been duly and validly issued
and are fully paid and nonassessable.
     (c) Such Grantor is the record and beneficial owner of, and has good title
to, the Pledged Securities pledged by it hereunder, free of any and all Liens or
options in favor of, or claims of, any other Person, except the security
interest created by this Agreement and Liens permitted by the Credit Agreement.
     4.5 Intercompany Receivables. (a) No amount payable to such Grantor under
or in connection with any Intercompany Receivable of an amount greater than
$1,000,000 is evidenced by any Instrument or Chattel Paper which has not been
delivered to the Administrative Agent.
     (b) The amounts represented by such Grantor to the Lenders from time to
time as owing to such Grantor in respect of the Intercompany Receivables will at
such times be accurate in all material respects.
SECTION 5. COVENANTS
          Each Grantor covenants and agrees with the Administrative Agent and
the Lenders that, from and after the date of this Agreement until its applicable
Obligations shall have been paid in full, no Letter of Credit shall be
outstanding and the Revolving Commitments shall have terminated:
     5.1 Delivery of Instruments, Certificated Securities and Chattel Paper. If
any amount in excess of $1,000,000 payable under or in connection with any of
the Collateral shall be or become evidenced by any Instrument, Certificated
Security or Chattel Paper, such Instrument, Certificated Security or Chattel
Paper shall be promptly delivered to the Administrative Agent, duly indorsed in
a manner satisfactory to the Administrative Agent, to be held as Collateral
pursuant to this Agreement.
     5.2 Maintenance of Perfected Security Interest; Further Documentation.
(a) Such Grantor shall maintain the security interest created by this Agreement
as a perfected security interest having at least the priority described in
Section 4.2 and shall defend such security interest against the claims and
demands of all Persons whomsoever, subject to the rights of such Grantor under
the Loan Documents to dispose of the Collateral.
     (b) Such Grantor will furnish to the Administrative Agent from time to time
statements and schedules further identifying and describing the Collateral of
such Grantor and such other reports in connection therewith as the
Administrative Agent may reasonably request, all in reasonable detail.

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     (c) At any time and from time to time, upon the written request of the
Administrative Agent, and at the sole expense of such Grantor, such Grantor will
promptly and duly execute and deliver, and have recorded, such further
instruments and documents and take such further actions as the Administrative
Agent may reasonably request for the purpose of obtaining or preserving the full
benefits of this Agreement and of the rights and powers herein granted,
including, without limitation, (i) filing any financing or continuation
statements under the Uniform Commercial Code (or other similar laws) in effect
in any jurisdiction with respect to the security interests created hereby and
(ii) execute one or more Foreign Collateral Agreements to obtain or preserve the
security interest created by this Agreement in favor of the Administrative Agent
and the Lenders under the applicable foreign laws.
     5.3 Changes in Name, etc. Such Grantor will not, except upon 10 days’ prior
written notice to the Administrative Agent (or shorter notice if acceptable to
the Administrative Agent) and delivery to the Administrative Agent of all
additional executed financing statements and other documents reasonably
requested by the Administrative Agent to maintain the validity, perfection and
priority of the security interests provided for herein, (i) change its
jurisdiction of organization from that referred to in Section 4.3 or (ii) change
its name.
     5.4 Pledged Securities. (a) If such Grantor shall become entitled to
receive or shall receive any certificate (including, without limitation, any
certificate representing a dividend or a distribution in connection with any
reclassification, increase or reduction of capital or any certificate issued in
connection with any reorganization), option or rights in respect of the Capital
Stock of any Issuer, whether in addition to, in substitution of, as a conversion
of, or in exchange for, any shares of the Pledged Stock, or otherwise in respect
thereof, such Grantor shall accept the same as the agent of the Secured Parties,
hold the same in trust for the Administrative Agent and the Lenders and deliver
the same forthwith to the Administrative Agent in the exact form received, duly
indorsed by such Grantor to the Administrative Agent, if required, together with
an undated stock power covering such certificate duly executed in blank by such
Grantor and with, if the Administrative Agent so requests, signature guaranteed,
to be held by the Administrative Agent, subject to the terms hereof, as
additional collateral security for its applicable Obligations. Any sums paid
upon or in respect of the Pledged Securities upon the liquidation or dissolution
of any Issuer shall be paid over to the Administrative Agent, to the extent such
proceeds constitute Pledged Securities, to be held by it hereunder as additional
collateral security for the applicable Obligations, and in case any distribution
of capital shall be made on or in respect of the Pledged Securities or any
property shall be distributed upon or with respect to the Pledged Securities
pursuant to the recapitalization or reclassification of the capital of any
Issuer or pursuant to the reorganization thereof, the property so distributed
shall, unless otherwise subject to a perfected security interest in favor of the
Administrative Agent, be delivered to the Administrative Agent to be held to the
extent such property constitutes Pledged Securities by it hereunder as
additional collateral security for the applicable Obligations. If any sums of
money or property so paid or distributed in respect of the Pledged Securities
shall be received by such Grantor, such Grantor shall, until such money or
property is paid or delivered to the Administrative Agent, hold such money or
property in trust for the Administrative Agent and the Lenders, segregated from
other funds of such Grantor, as additional collateral security for the
applicable Obligations, in each case to the extent such proceeds or property
constitute Pledged Securities.
     (b) Without the prior written consent of the Administrative Agent, such
Grantor will not (i) vote to enable, or take any other action to permit, any
Issuer to issue any Capital Stock of any nature or to issue any other securities
convertible into or granting the right to purchase or exchange for any Capital
Stock of any nature of any Issuer, (ii) sell, assign, transfer, exchange, or
otherwise dispose of, or grant any option with respect to, the Pledged
Securities or Proceeds thereof (except pursuant to a transaction expressly
permitted by the Credit Agreement), (iii) create, incur or permit to exist any
Lien or option in favor of, or any claim of any Person with respect to, any of
the Pledged Securities or Proceeds thereof, or any interest therein, except for
the security interests created by this Agreement (except pursuant to a Lien

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expressly permitted by the Credit Agreement) or (iv) enter into any agreement or
undertaking restricting the right or ability of such Grantor or the
Administrative Agent to sell, assign or transfer any of the Pledged Securities
or Proceeds thereof.
     (c) In the case of each Grantor which is an Issuer, such Issuer agrees that
(i) it will be bound by the terms of this Agreement relating to the Pledged
Securities issued by it and will comply with such terms insofar as such terms
are applicable to it, (ii) it will notify the Administrative Agent promptly in
writing of the occurrence of any of the events described in Section 5.4(a) with
respect to the Pledged Securities issued by it and (iii) the terms of Sections
6.3(c) and 6.6 shall apply to it, mutatis mutandis, with respect to all actions
that may be required of it pursuant to Section 6.3(c) or 6.6 with respect to the
Pledged Securities issued by it.
SECTION 6. REMEDIAL PROVISIONS
     6.1 Certain Matters Relating to Intercompany Receivables.
     (a) Unless an Event of Default shall have occurred and be continuing, the
Administrative Agent hereby authorizes each Grantor to collect such Grantor’s
Intercompany Receivables and the Administrative Agent may curtail or terminate
said authority at any time after the occurrence and during the continuance of an
Event of Default. If required by the Administrative Agent at any time after the
occurrence and during the continuance of an Event of Default, any payments of
Intercompany Receivables, when collected by any Grantor, (i) shall be forthwith
(and, in any event, within two Business Days) deposited by such Grantor in the
exact form received, duly indorsed by such Grantor to the Administrative Agent
if required, in a Collateral Account maintained under the sole dominion and
control of the Administrative Agent, subject to withdrawal by the Administrative
Agent for the account of the Lenders only as provided in Section 6.5, and
(ii) until so turned over, shall be held by such Grantor in trust for the
Administrative Agent and the Lenders, segregated from other funds of such
Grantor.
     (b) At any time after a Default or an Event of Default has occurred and is
continuing, at the Administrative Agent’s request, each Grantor shall deliver to
the Administrative Agent all original and other documents evidencing, and
relating to, the agreements and transactions which gave rise to the Intercompany
Receivables, including, without limitation, all original orders, invoices and
shipping receipts.
     6.2 Grantors Remain Liable. (a) The Administrative Agent in its own name or
in the name of others may at any time after the occurrence and during the
continuance of an Event of Default communicate with obligors under the
Intercompany Receivables to verify with them to the Administrative Agent’s
satisfaction the existence, amount and terms of any Intercompany Receivables.
     (b) Upon the request of the Administrative Agent at any time after the
occurrence and during the continuance of an Event of Default, each Grantor shall
notify obligors on the Intercompany Receivables that the Intercompany
Receivables have been assigned to the Administrative Agent for the ratable
benefit of the Secured Parties and that payments in respect thereof shall be
made directly to the Administrative Agent.
     (c) Anything herein to the contrary notwithstanding, each Grantor shall
remain liable under each of the Intercompany Receivables to observe and perform
all the conditions and obligations to be observed and performed by it
thereunder, all in accordance with the terms of any agreement giving rise
thereto. Neither the Administrative Agent nor any Lender shall have any
obligation or liability under any Intercompany Receivable (or any agreement
giving rise thereto) by reason of or arising out of this Agreement or the
receipt by the Administrative Agent or any Lender of any payment relating
thereto, nor

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shall the Administrative Agent or any Lender be obligated in any manner to
perform any of the obligations of any Grantor under or pursuant to any
Intercompany Receivable (or any agreement giving rise thereto), to make any
payment, to make any inquiry as to the nature or the sufficiency of any payment
received by it or as to the sufficiency of any performance by any party
thereunder, to present or file any claim, to take any action to enforce any
performance or to collect the payment of any amounts which may have been
assigned to it or to which it may be entitled at any time or times.
     6.3 Pledged Securities. (a) Unless an Event of Default shall have occurred
and be continuing and the Administrative Agent shall have given notice to the
relevant Grantor of the Administrative Agent’s intent to exercise its
corresponding rights pursuant to Section 6.3(b), each Grantor shall be permitted
to receive all cash and non-cash dividends paid in respect of the Pledged Stock
and all payments made in respect of the Pledged Notes, to the extent permitted
in the Credit Agreement, and to exercise all voting and corporate or other
organizational rights with respect to the Pledged Securities; provided, however,
that no vote shall be cast or corporate or other organizational right exercised
or other action taken which, in the Administrative Agent’s reasonable judgment,
would impair the Collateral or which would be inconsistent with or result in any
violation of any provision of the Credit Agreement, this Agreement or any other
Loan Document.
     (b) If an Event of Default shall occur and be continuing and the
Administrative Agent shall give notice of its intent to exercise such rights to
the relevant Grantor or Grantors, (i) the Administrative Agent shall have the
right to receive any and all cash dividends, payments or other Proceeds paid in
respect of the Pledged Securities and make application thereof to the applicable
Obligations in such order as the Administrative Agent may determine, and
(ii) any or all of the Pledged Securities shall be registered in the name of the
Administrative Agent or its nominee, and the Administrative Agent or its nominee
may thereafter exercise (x) all voting, corporate and other rights pertaining to
such Pledged Securities at any meeting of shareholders of the relevant Issuer or
Issuers or otherwise and (y) any and all rights of conversion, exchange and
subscription and any other rights, privileges or options pertaining to such
Pledged Securities as if it were the absolute owner thereof (including, without
limitation, the right to exchange at its discretion any and all of the Pledged
Securities upon the merger, consolidation, reorganization, recapitalization or
other fundamental change in the corporate or other organizational structure of
any Issuer, or upon the exercise by any Grantor or the Administrative Agent of
any right, privilege or option pertaining to such Pledged Securities, and in
connection therewith, the right to deposit and deliver any and all of the
Pledged Securities with any committee, depositary, transfer agent, registrar or
other designated agency upon such terms and conditions as the Administrative
Agent may determine), all without liability except to account for property
actually received by it, but the Administrative Agent shall have no duty to any
Grantor to exercise any such right, privilege or option and shall not be
responsible for any failure to do so or delay in so doing.
     (c) Each Grantor hereby authorizes and instructs each Issuer of any Pledged
Securities by such Grantor hereunder to (i) comply with any instruction received
by it from the Administrative Agent in writing that (x) states that an Event of
Default has occurred and is continuing and (y) is otherwise in accordance with
the terms of this Agreement, without any other or further instructions from such
Grantor, and each Grantor agrees that each Issuer shall be fully protected in so
complying, and (ii) unless otherwise expressly permitted hereby, pay any
dividends or other payments with respect to the Pledged Securities directly to
the Administrative Agent.
     6.4 Application of Proceeds. At such intervals as may be agreed upon by the
Company and the Administrative Agent, or, if an Event of Default shall have
occurred and be continuing, at any time at the Administrative Agent’s election,
the Administrative Agent may apply all or any part of Proceeds constituting
Collateral, whether or not held in any Collateral Account, and any proceeds of
the guarantees set forth in Section 2, in payment of the Obligations in the
following order:

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15

     First, to pay incurred and unpaid fees and expenses of the Administrative
Agent under the Loan Documents;
     Second, to the Administrative Agent, for application by it towards payment
of amounts then due and owing and remaining unpaid in respect of the
Obligations, pro rata among the Secured Parties according to the amounts of the
Obligations then due and owing and remaining unpaid to the Secured Parties;
     Third, to the Administrative Agent, for application by it towards
prepayment of the Obligations, pro rata among the Secured Parties according to
the amounts of the Obligations then held by the Secured Parties; and
     Fourth, any balance remaining after the Obligations shall have been paid in
full, no Letters of Credit shall be outstanding and the Revolving Commitments
shall have terminated shall be paid over to the applicable Grantor or Guarantor.
     6.5 Code and Other Remedies. If an Event of Default shall occur and be
continuing, the Administrative Agent, on behalf of the Lenders, may exercise, in
addition to all other rights and remedies granted to them in this Agreement and
in any other instrument or agreement securing, evidencing or relating to the
Obligations, all rights and remedies of a secured party under the New York UCC
or any other applicable law. Without limiting the generality of the foregoing,
if an Event of Default shall occur and be continuing, the Administrative Agent,
without demand of performance or other demand, presentment, protest,
advertisement or notice of any kind (except any notice required by law referred
to below) to or upon any Grantor or any other Person (all and each of which
demands, defenses, advertisements and notices are hereby waived), may in such
circumstances forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, and/or may forthwith sell, lease, assign, give
option or options to purchase, or otherwise dispose of and deliver the
Collateral or any part thereof (or contract to do any of the foregoing), in one
or more parcels at public or private sale or sales, at any exchange, broker’s
board or office of the Administrative Agent or any Lender or elsewhere upon such
terms and conditions as it may deem advisable and at such prices as it may deem
best, for cash or on credit or for future delivery without assumption of any
credit risk. The Administrative Agent or any Lender shall have the right upon
any such public sale or sales, and, to the extent permitted by law, upon any
such private sale or sales, to purchase the whole or any part of the Collateral
so sold, free of any right or equity of redemption in any Grantor, which right
or equity is hereby waived and released. Each Grantor further agrees, at the
Administrative Agent’s request, to assemble the Collateral and make it available
to the Administrative Agent at places which the Administrative Agent shall
reasonably select, whether at such Grantor’s premises or elsewhere. The
Administrative Agent shall apply the net proceeds of any action taken by it
pursuant to this Section 6.5, after deducting all reasonable costs and expenses
of every kind incurred in connection therewith or incidental to the care or
safekeeping of any of the Collateral or in any way relating to the Collateral or
the rights of the Administrative Agent and the Lenders hereunder, including,
without limitation, reasonable attorneys’ fees and disbursements, to the payment
in whole or in part of the Obligations, in such order as the Administrative
Agent may elect, and only after such application and after the payment by the
Administrative Agent of any other amount required by any provision of law,
including, without limitation, Section 9-615(a)(3) of the New York UCC, need the
Administrative Agent account for the surplus, if any, to any Grantor. To the
extent permitted by applicable law, each Grantor waives all claims, damages and
demands it may acquire against the Administrative Agent or any Lender arising
out of the exercise by them of any rights hereunder. If any notice of a proposed
sale or other disposition of Collateral shall be required by law, such notice
shall be deemed reasonable and proper if given at least 10 days before such sale
or other disposition.

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     6.6 Registration Rights. (a) If the Administrative Agent shall determine to
exercise its right to sell any or all of the Pledged Stock pursuant to
Section 6.5, and if in the opinion of the Administrative Agent it is necessary
or advisable to have the Pledged Stock, or that portion thereof to be sold,
registered under the provisions of the Securities Act or any other similar
foreign laws, the relevant Grantor will cause the Issuer thereof to (i) execute
and deliver, and cause the directors and officers of such Issuer to execute and
deliver, all such instruments and documents, and do or cause to be done all such
other acts as may be, in the opinion of the Administrative Agent, necessary or
advisable to register the Pledged Stock, or that portion thereof to be sold,
under the provisions of the Securities Act or any other similar foreign laws,
(ii) use its commercially reasonable efforts to cause the registration statement
relating thereto to become effective and to remain effective for a period of one
year from the date of the first public offering of the Pledged Stock, or that
portion thereof to be sold, and (iii) make all amendments thereto and/or to the
related prospectus which, in the opinion of the Administrative Agent, are
necessary or advisable, all in conformity with the requirements of the
Securities Act or any other similar foreign laws and the rules and regulations
of the Securities and Exchange Commission applicable thereto. Each Grantor
agrees to cause such Issuer to comply with the provisions of the securities or
“Blue Sky” laws of any and all jurisdictions (including foreign jurisdictions)
which the Administrative Agent shall designate and to make available to its
security holders, as soon as practicable, an earnings statement (which need not
be audited) which will satisfy the provisions of Section 11(a) of the Securities
Act.
     (b) Each Grantor recognizes that the Administrative Agent may be unable to
effect a public sale of any or all the Pledged Stock, by reason of certain
prohibitions contained in the Securities Act and applicable state securities
laws, foreign laws or otherwise, and may be compelled to resort to one or more
private sales thereof to a restricted group of purchasers which will be obliged
to agree, among other things, to acquire such securities for their own account
for investment and not with a view to the distribution or resale thereof. Each
Grantor acknowledges and agrees that any such private sale may result in prices
and other terms less favorable than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner. The Administrative
Agent shall be under no obligation to delay a sale of any of the Pledged Stock
for the period of time necessary to permit the Issuer thereof to register such
securities for public sale under the Securities Act, or under applicable state
securities laws or foreign laws, even if such Issuer would agree to do so.
     (c) Each Grantor agrees to use its commercially reasonable efforts to do or
cause to be done all such other acts as may be necessary to make such sale or
sales of all or any portion of the Pledged Stock pursuant to this Section 6.6
valid and binding and in compliance with any and all other applicable
Requirements of Law. Each Grantor further agrees that a breach of any of the
covenants contained in this Section 6.6 will cause irreparable injury to the
Administrative Agent and the Lenders, that the Administrative Agent and the
Lenders have no adequate remedy at law in respect of such breach and, as a
consequence, that each and every covenant contained in this Section 6.6 shall be
specifically enforceable against such Grantor, and such Grantor hereby waives
and agrees not to assert any defenses against an action for specific performance
of such covenants except for a defense that no Event of Default has occurred
under the Credit Agreement.
     6.7 Subordination. Each Grantor hereby agrees that, upon the occurrence and
during the continuance of an Event of Default, unless otherwise agreed by the
Administrative Agent, all Indebtedness owing by it to any Subsidiary of the
Company shall be fully subordinated to the indefeasible payment in full in cash
of such Grantor’s Obligations.
     6.8 Deficiency. Each Grantor shall remain liable for any deficiency if the
proceeds of any sale or other disposition of the Collateral are insufficient to
pay its Obligations and the fees and

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disbursements of any attorneys employed by the Administrative Agent or any
Lender to collect such deficiency.
SECTION 7. THE ADMINISTRATIVE AGENT
     7.1 Administrative Agent’s Appointment as Attorney-in-Fact, etc. (a) Each
Grantor hereby irrevocably constitutes and appoints the Administrative Agent and
any officer or agent thereof, with full power of substitution, as its true and
lawful attorney-in-fact with full irrevocable power and authority in the place
and stead of such Grantor and in the name of such Grantor or in its own name,
for the purpose of carrying out the terms of this Agreement, to take any and all
appropriate action and to execute any and all documents and instruments which
may be necessary or desirable to accomplish the purposes of this Agreement, and,
without limiting the generality of the foregoing, each Grantor hereby gives the
Administrative Agent the power and right, on behalf of such Grantor, without
assent by such Grantor (but with notice to such Grantor, to the extent
reasonably practicable, provided that failure to give such notice shall not
render any actions taken by the Administrative Agent ineffective), to do any or
all of the following (provided that the Administrative Agent agrees that it will
not exercise any rights under the power of attorney provided for in this
Section 7.1(a) unless an Event of Default shall have occurred and be
continuing):
     (i) in the name of a Grantor or its own name, or otherwise, take possession
of and indorse and collect any checks, drafts, notes, acceptances or other
instruments for the payment of moneys due under any Intercompany Receivable or
with respect to any other Collateral and file any claim or take any other action
or proceeding in any court of law or equity or otherwise deemed appropriate by
the Administrative Agent for the purpose of collecting any and all such moneys
due under any Intercompany Receivable or with respect to any other Collateral
whenever payable;
     (ii) pay or discharge taxes and Liens levied or placed on or threatened
against the Collateral, effect any repairs or any insurance called for by the
terms of this Agreement and pay all or any part of the premiums therefor and the
costs thereof;
     (iii) execute, in connection with any sale provided for in Section 6.5 or
6.6, any indorsements, assignments or other instruments of conveyance or
transfer with respect to the Collateral; and
     (iv) (1) direct any party liable for any payment under any of the
Collateral to make payment of any and all moneys due or to become due thereunder
directly to the Administrative Agent or as the Administrative Agent shall
direct; (2) ask or demand for, collect, and receive payment of and receipt for,
any and all moneys, claims and other amounts due or to become due at any time in
respect of or arising out of any Collateral; (3) sign and indorse any invoices,
freight or express bills, bills of lading, storage or warehouse receipts, drafts
against debtors, assignments, verifications, notices and other documents in
connection with the Intercompany Receivables; (4) commence and prosecute any
suits, actions or proceedings at law or in equity in any court of competent
jurisdiction to collect the Collateral or any portion thereof and to enforce any
other right in respect of any Collateral; (5) defend any suit, action or
proceeding brought against such Grantor with respect to any Collateral;
(6) settle, compromise or adjust any such suit, action or proceeding and, in
connection therewith, give such discharges or releases as the Administrative
Agent may deem appropriate; and (7) generally, sell, transfer, pledge and make
any agreement with respect to or otherwise deal with any of the Collateral as
fully and completely as though the Administrative Agent were the absolute owner
thereof for all purposes, and do, at the Administrative Agent’s option and such
Grantor’s expense, at any time, or from time to time, all acts and things which
the Administrative Agent deems necessary to protect, preserve or realize upon
the Collateral and the Administrative Agent’s and the Lenders’ security

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18

interests therein and to effect the intent of this Agreement, all as fully and
effectively as such Grantor might do.
     (b) If any Grantor fails to perform or comply with any of its agreements
contained herein, the Administrative Agent, at its option, but without any
obligation so to do, may perform or comply, or otherwise cause performance or
compliance, with such agreement.
     (c) The expenses of the Administrative Agent incurred in connection with
actions undertaken as provided in this Section 7.1, together with interest
thereon at a rate per annum equal to the highest rate per annum at which
interest would then be payable on any category of past due ABR Loans under the
Credit Agreement, from the date of payment by the Administrative Agent to the
date reimbursed by the relevant Grantor, shall be payable by such Grantor to the
Administrative Agent on demand.
     (d) Each Grantor hereby ratifies all that said attorneys shall lawfully do
or cause to be done by virtue hereof. All powers, authorizations and agencies
contained in this Agreement are coupled with an interest and are irrevocable
until this Agreement is terminated and the security interests created hereby are
released.
     7.2 Duty of Administrative Agent. The Administrative Agent’s sole duty with
respect to the custody, safekeeping and physical preservation of the Collateral
in its possession, under Section 9-207 of the New York UCC or otherwise, shall
be to deal with it in the same manner as the Administrative Agent deals with
similar property for its own account. Neither the Administrative Agent, any
Lender nor any of their respective officers, directors, employees or agents
shall be liable for failure to demand, collect or realize upon any of the
Collateral or for any delay in doing so or shall be under any obligation to sell
or otherwise dispose of any Collateral upon the request of any Grantor or any
other Person or to take any other action whatsoever with regard to the
Collateral or any part thereof. The powers conferred on the Administrative Agent
and the Lenders hereunder are solely to protect the Administrative Agent’s and
the Lenders’ interests in the Collateral and shall not impose any duty upon the
Administrative Agent or any Lender to exercise any such powers. The
Administrative Agent and the Lenders shall be accountable only for amounts that
they actually receive as a result of the exercise of such powers, and neither
they nor any of their officers, directors, employees or agents shall be
responsible to any Grantor for any act or failure to act hereunder, except for
their own gross negligence or willful misconduct.
     7.3 Execution of Financing Statements. Pursuant to any applicable law, each
Grantor authorizes the Administrative Agent to file or record financing
statements and other filing or recording documents or instruments with respect
to the Collateral without the signature of such Grantor in such form and in such
offices as the Administrative Agent determines appropriate to perfect the
security interests of the Administrative Agent under this Agreement. Each
Grantor hereby ratifies and authorizes the filing by the Administrative Agent of
any financing statement with respect to the Collateral made prior to the date
hereof.
     7.4 Authority of Administrative Agent. Each Grantor acknowledges that the
rights and responsibilities of the Administrative Agent under this Agreement
with respect to any action taken by the Administrative Agent or the exercise or
non-exercise by the Administrative Agent of any option, voting right, request,
judgment or other right or remedy provided for herein or resulting or arising
out of this Agreement shall, as between the Administrative Agent and the
Lenders, be governed by the Credit Agreement and by such other agreements with
respect thereto as may exist from time to time among them, but, as between the
Administrative Agent and the Grantors, the Administrative Agent shall be
conclusively presumed to be acting as agent for the Lenders with full and valid
authority so to act or refrain from acting, and no Grantor shall be under any
obligation, or entitlement, to make any inquiry respecting such authority.

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SECTION 8. MISCELLANEOUS
     8.1 Amendments in Writing. None of the terms or provisions of this
Agreement may be waived, amended, supplemented or otherwise modified except in
accordance with Section 10.1 of the Credit Agreement.
     8.2 Notices. All notices, requests and demands to or upon the
Administrative Agent or any Grantor hereunder shall be effected in the manner
provided for in Section 10.2 of the Credit Agreement; provided that any such
notice, request or demand to or upon any Guarantor shall be addressed to such
Guarantor at its notice address set forth on Schedule 1.
     8.3 No Waiver by Course of Conduct; Cumulative Remedies. Neither the
Administrative Agent nor any Lender shall by any act (except by a written
instrument pursuant to Section 8.1), delay, indulgence, omission or otherwise be
deemed to have waived any right or remedy hereunder or to have acquiesced in any
Default or Event of Default. No failure to exercise, nor any delay in
exercising, on the part of the Administrative Agent or any Lender, any right,
power or privilege hereunder shall operate as a waiver thereof. No single or
partial exercise of any right, power or privilege hereunder shall preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. A waiver by the Administrative Agent or any Lender of any right or
remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which the Administrative Agent or such Lender would otherwise
have on any future occasion. The rights and remedies herein provided are
cumulative, may be exercised singly or concurrently and are not exclusive of any
other rights or remedies provided by law.
     8.4 Enforcement Expenses; Indemnification. (a) Each Guarantor agrees to pay
or reimburse each Lender and the Administrative Agent for all its costs and
expenses incurred in collecting against such Guarantor under the guarantees
contained in Section 2 or otherwise enforcing or preserving any rights under
this Agreement and the other Loan Documents to which such Guarantor is a party,
including, without limitation, the fees and disbursements of counsel to each
Lender and of counsel to the Administrative Agent.
     (b) Each Guarantor agrees to pay, and to save the Administrative Agent and
the Lenders harmless from, any and all liabilities with respect to, or resulting
from any delay in paying, any and all stamp, excise, sales or other taxes which
may be payable or determined to be payable with respect to any of the Collateral
or in connection with any of the transactions contemplated by this Agreement.
     (c) Each Guarantor agrees to pay, and to save the Administrative Agent and
the Lenders harmless from, any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever with respect to the execution, delivery,
enforcement, performance and administration of this Agreement to the extent the
Borrowers would be required to do so pursuant to Section 10.5 of the Credit
Agreement.
     (d) The agreements in this Section 8.4 shall survive repayment of the
Obligations and all other amounts payable under the Credit Agreement and the
other Loan Documents.
     8.5 Successors and Assigns. This Agreement shall be binding upon the
successors and assigns of each Grantor and shall inure to the benefit of the
Administrative Agent and the Lenders and their successors and assigns; provided
that no Grantor may assign, transfer or delegate any of its rights or
obligations under this Agreement without the prior written consent of the
Administrative Agent.
     8.6 Set-Off. In addition to any rights and remedies of the Lenders provided
by law, each Lender shall have the right, without notice to any Grantor, any
such notice being expressly waived by

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20

each Grantor to the extent permitted by applicable law, upon any of its
Obligations becoming due and payable by any Grantor at the stated maturity or by
acceleration, to apply to the payment of such Obligations, by setoff or
otherwise, any and all deposits (general or special, time or demand, provisional
or final), in any currency, and any other credits, indebtedness or claims, in
any currency, in each case whether direct or indirect, absolute or contingent,
matured or unmatured, at any time held or owing by such Lender, any affiliate
thereof or any of their respective branches or agencies to or for the credit or
the account of such Grantor. Each Lender agrees promptly to notify the relevant
Grantor and the Administrative Agent after any such application made by such
Lender, provided that the failure to give such notice shall not affect the
validity of such application.
     8.7 Counterparts. This Agreement may be executed by one or more of the
parties to this Agreement on any number of separate counterparts (including by
telecopy), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
     8.8 Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
     8.9 Section Headings. The Section headings used in this Agreement are for
convenience of reference only and are not to affect the construction hereof or
be taken into consideration in the interpretation hereof.
     8.10 Integration. This Agreement and the other Loan Documents represent the
agreement of the Grantors, the Administrative Agent and the Lenders with respect
to the subject matter hereof and thereof, and there are no promises,
undertakings, representations or warranties by the Administrative Agent or any
Lender relative to subject matter hereof and thereof not expressly set forth or
referred to herein or in the other Loan Documents.
     8.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
     8.12 Submission To Jurisdiction; Waivers. Each Grantor hereby irrevocably
and unconditionally:
     (a) submits for itself and its property in any legal action or proceeding
relating to this Agreement and the other Loan Documents to which it is a party,
or for recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of the courts of the State of New York, the
courts of the United States of America for the Southern District of New York,
and appellate courts from any thereof;
     (b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the venue
of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
     (c) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage

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21

prepaid, to such Grantor at its address referred to in Section 8.2 or at such
other address of which the Administrative Agent shall have been notified
pursuant thereto;
     (d) agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the right to sue in
any other jurisdiction; and
     (e) waives, to the maximum extent not prohibited by law, any right it may
have to claim or recover in any legal action or proceeding referred to in this
Section any special, exemplary, punitive or consequential damages.
     8.13 Acknowledgements. Each Grantor hereby acknowledges that:
     (a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents to which it is a party;
     (b) neither the Administrative Agent nor any Lender has any fiduciary
relationship with or duty to any Grantor arising out of or in connection with
this Agreement or any of the other Loan Documents, and the relationship between
the Grantors, on the one hand, and the Administrative Agent and Lenders, on the
other hand, in connection herewith or therewith is solely that of debtor and
creditor; and
     (c) no joint venture is created hereby or by the other Loan Documents or
otherwise exists by virtue of the transactions contemplated hereby among the
Lenders or among the Grantors and the Lenders.
     8.14 Additional Grantors. Each Domestic Subsidiary of the Company that is
required to become a party to this Agreement pursuant to Section 6.9 of the
Credit Agreement shall become a Grantor for all purposes of this Agreement upon
execution and delivery by such Subsidiary of an Assumption Agreement in the form
of Annex 1 hereto.
     8.15 Releases. (a) At such time as the Loans, the Reimbursement Obligations
and the other Obligations (other than Obligations under or in respect of
Specified Swap Agreements or obligations in respect of indemnities or expense
reimbursement obligations for which no amount is claimed owing at the time)
shall have been paid in full, the Revolving Commitments have been terminated and
no Letters of Credit shall be outstanding, the Collateral shall be automatically
released from the Liens created hereby, and this Agreement and all obligations
(other than those expressly stated to survive such termination) of the
Administrative Agent and each Grantor hereunder shall terminate, all without
delivery of any instrument or performance of any act by any party, and all
rights to the Collateral shall revert to the Grantors. At the request and sole
expense of any Grantor following any such termination, the Administrative Agent
shall deliver to such Grantor any Collateral held by the Administrative Agent
hereunder, and execute and deliver to such Grantor such documents as such
Grantor shall reasonably request to evidence such termination.
     (b) If any of the Collateral shall be sold, transferred or otherwise
disposed of by any Grantor in a transaction permitted by the Credit Agreement,
such Collateral shall be automatically released from the Liens created hereby.
The Administrative Agent, at the request and sole expense of such Grantor, shall
execute and deliver to such Grantor all releases or other documents reasonably
necessary or desirable for the release of the Liens created hereby on such
Collateral. If a Subsidiary Guarantor ceases to be a Wholly-Owned Domestic
Subsidiary of the Company in a transaction permitted by the Credit Agreement it
shall be automatically released from its obligations hereunder; provided that
the Borrower shall have delivered to the Administrative Agent, at least ten
Business Days (or shorter notice if

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22

acceptable to the Administrative Agent) prior to the date of the proposed
release, a written notice identifying the relevant Subsidiary Guarantor together
with a certification by the Company stating that such transaction is in
compliance with the Credit Agreement and the other Loan Documents.
     8.16 WAIVER OF JURY TRIAL. EACH GRANTOR HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

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          IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee
and Collateral Agreement to be duly executed and delivered as of the date first
above written.

            FIRST SOLAR, INC.
      By:   /S/ David Brady         Name:  David Brady        Title:  Corporate
Treasurer     

[Signature Page to Guarantee and Collateral Agreement]

 

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Schedule 1
NOTICE ADDRESSES OF GUARANTORS

 

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Schedule 2
DESCRIPTION OF INVESTMENT PROPERTY
Pledged Stock:

              Issuer   Class of Stock   Stock Certificate No.   No. of Shares
 
           

Pledged Notes:

          Issuer   Payee   Principal Amount
 
       

 

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Schedule 3
FILINGS AND OTHER ACTIONS
REQUIRED TO PERFECT SECURITY INTERESTS
Uniform Commercial Code Filings
[List each office where a financing statement is to be filed]

Other Actions
[Describe other actions to be taken]

 

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Schedule 4
LOCATION OF JURISDICTION OF ORGANIZATION AND CHIEF EXECUTIVE OFFICE

              Jurisdiction of   Location of Chief Grantor   Organization  
Executive Office
 
       

 

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Annex 1 to
Guarantee and Collateral Agreement
          ASSUMPTION AGREEMENT, dated as of                     , 200_, made by
                                          (the “Additional Grantor”), in favor
of JPMorgan Chase Bank, N.A., as administrative agent (in such capacity, the
“Administrative Agent”) for the banks and other financial institutions or
entities (the “Lenders”) parties to the Credit Agreement referred to below. All
capitalized terms not defined herein shall have the meaning ascribed to them in
such Credit Agreement.
WITNESSETH:
          WHEREAS, FIRST SOLAR, INC. (the “Company”), the Lenders and the
Administrative Agent have entered into a Credit Agreement, dated as of
September 4, 2009 (as amended, supplemented or otherwise modified from time to
time, the “Credit Agreement”);
          WHEREAS, in connection with the Credit Agreement, the Company has
entered into the Guarantee and Collateral Agreement, dated as of September 4,
2009 (as amended, supplemented or otherwise modified from time to time, the
“Guarantee and Collateral Agreement”) in favor of the Administrative Agent for
the ratable benefit of the Secured Parties;
          WHEREAS, the Credit Agreement requires the Additional Grantor to
become a party to the Guarantee and Collateral Agreement; and
          WHEREAS, the Additional Grantor has agreed to execute and deliver this
Assumption Agreement in order to become a party to the Guarantee and Collateral
Agreement;
          NOW, THEREFORE, IT IS AGREED:
          1. Guarantee and Collateral Agreement. By executing and delivering
this Assumption Agreement, the Additional Grantor, as provided in Section 8.14
of the Guarantee and Collateral Agreement, hereby becomes a party to the
Guarantee and Collateral Agreement as a Grantor thereunder with the same force
and effect as if originally named therein as a Grantor and, without limiting the
generality of the foregoing, hereby expressly assumes all obligations and
liabilities of a Grantor thereunder. The information set forth in Annex 1-A
hereto is hereby added to the information set forth in the Schedules to the
Guarantee and Collateral Agreement. The Additional Grantor hereby represents and
warrants that each of the representations and warranties contained in Section 4
of the Guarantee and Collateral Agreement is true and correct on and as the date
hereof (after giving effect to this Assumption Agreement) as if made on and as
of such date.
          2. Governing Law. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

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 2
          IN WITNESS WHEREOF, the undersigned has caused this Assumption
Agreement to be duly executed and delivered as of the date first above written.

            [ADDITIONAL GRANTOR]
      By:           Name:           Title:      

 

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Annex 1-A to
Assumption Agreement
Supplement to Schedule 1
Supplement to Schedule 2
Supplement to Schedule 3
Supplement to Schedule 4