EX-10.4






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




 

 












 



 










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	 












 



2


	 	 	 	 	 	 	 
	 	 	 	 	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












 



3


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.










 



4




          “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









 



5


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.










 



6




          “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









 



7



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









 



8



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









 



9



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









 



10



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









 



11



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.









 



12


     (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









 



13



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









 



14



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:









 



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.









 



16


     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









 



17



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









 



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.









 



19


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









 



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









 



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









 



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.
















 





          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]





 









 








Schedule 1




NOTICE ADDRESSES OF GUARANTORS




 









 








Schedule 2




DESCRIPTION OF INVESTMENT PROPERTY




Pledged Stock:




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





Pledged Notes:




	 	 	 	 	 
	Issuer	 	Payee	 	Principal Amount
	 
	 	 	 	 






 









 








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]





 









 








Schedule 4




LOCATION OF JURISDICTION OF ORGANIZATION AND CHIEF EXECUTIVE OFFICE




	 	 	 	 	 
	 	 	Jurisdiction of	 	Location of Chief
	Grantor	 	Organization	 	Executive Office
	 
	 	 	 	 





 









 






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.




 









 








 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:  	 	 



 









 






	 	 	 	 	 



Annex 1-A to

Assumption Agreement




Supplement to Schedule 1




Supplement to Schedule 2




Supplement to Schedule 3




Supplement to Schedule 4