EXECUTION COPY
SECOND AMENDED AND RESTATED DOMESTIC PLEDGE AGREEMENT
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SECOND AMENDED AND RESTATED PLEDGE AGREEMENT, dated as of December 29,
2000, 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
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FIRST UNION NATIONAL BANK, a national banking association (the "Trustee"), not
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individually but solely as Trustee under the Second Amended and Restated Trust
Agreement, dated as of December 29, 2000 (as amended, supplemented or otherwise
modified from time to time, the "Trust Agreement"), among Federal-Mogul
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Corporation, a Michigan corporation (the "Company"), the Subsidiaries of the
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Company parties thereto and the Trustee.
W I T N E S S E T H:
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WHEREAS, pursuant to the Third Amended and Restated Credit Agreement,
dated as of February 24, 1999 (as amended, supplemented or otherwise modified
prior to the date hereof, the "Existing Credit Agreement"), among the Company,
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each Foreign Subsidiary Borrower party thereto (together with the Company, the
"Existing Borrowers"), the banks and other financial institutions from time to
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time parties thereto (the "Existing Lenders") and The Chase Manhattan Bank, as
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Administrative Agent, the Existing Lenders have made and/or agreed to make loans
to the Existing Borrowers upon the terms and subject to the conditions set forth
therein;
WHEREAS, pursuant to the Existing Credit Agreement, certain of the
Grantors other than the Company executed and delivered the Subsidiary Guarantee,
dated as February 24, 1999 (as amended, supplemented or otherwise modified prior
to the date hereof, the "Existing Subsidiary Guarantee");
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WHEREAS, pursuant to the Existing Credit Agreement, certain of the
Grantors and the Trustee executed and delivered the Amended and Restated
Domestic Pledge Agreement, dated as of February 24, 1999 (as amended,
supplemented or otherwise modified prior to the date hereof, the "Existing
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Domestic Pledge Agreement"), pursuant to which the obligations of the Grantors
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under the Existing Credit Agreement and the Existing Subsidiary Guarantee and
the obligations of the Company in respect of the ESOP Guaranty Obligations (as
defined in the Existing Domestic Pledge Agreement) were secured by the
collateral described therein, and the obligations of the Company under the
Indentures (such term and other capitalized terms used in these recitals being
used as defined in Section 1 hereof) were secured by certain of the collateral
described in the Existing Domestic Pledge Agreement;
WHEREAS, pursuant to Fourth Amended and Restated Credit Agreement, dated
as of December 29, 2000 (as amended, modified, supplemented, extended or renewed
from time to time, including pursuant to any amendment and restatement thereof,
the "Credit Agreement"), among the Company, each Foreign Subsidiary Borrower
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party thereto, the Lenders parties thereto and The Chase Manhattan Bank, as
Administrative Agent, the Existing Credit Agreement
is being amended and restated in its entirety, and the Lenders have agreed to
make further Loans and other extensions of credit to the Borrowers;
WHEREAS, pursuant to the Credit Agreement, the Existing Guarantee is
being amended and restated in its entirety by the Domestic Subsidiary Guarantee;
WHEREAS, certain of the Grantors are Surety Bond Account Parties, for
the account of which Surety Parties have issued Surety Bonds;
WHEREAS, certain of the Grantors are parties to one or more Surety Bond
Guarantees, pursuant to which such Grantors have guaranteed obligations of one
or more Surety Bond Account Parties under Surety Bond Documents;
WHEREAS, certain of the Grantors may enter into Hedge Agreements with
Lenders and Lender Affiliates, and certain of the Grantors may incur Cash
Management Obligations to Lenders and Lender Affiliates;
WHEREAS, each Borrower is a member of an affiliated group of companies
that includes each other Grantor;
WHEREAS, the proceeds of the extensions of credit under the Existing
Credit Agreement and the extensions of credit to be made under the Credit
Agreement have been or will be used in part to enable the Borrowers to make
valuable transfers to one or more of the other Grantors in connection with the
operation of their respective businesses;
WHEREAS, the Borrowers 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, the
extension of the expiry dates of the Surety Bonds and the extensions of credit
by Lenders and Lender Affiliates in respect of Hedge Agreements and Cash
Management Obligations;
WHEREAS, the ESOP Guaranty Obligations have been satisfied in full and
are therefore no longer secured pursuant to the Existing Domestic Pledge
Agreement;
WHEREAS, it is a condition precedent to (a) the obligation of the
Lenders to agree to amend and restate the Existing Credit Agreement and to make
further extensions of credit to the Borrowers under the Credit Agreement, (b)
the obligations of the Surety Parties to extend the expiry date of the Surety
Bonds and (c) the willingness of Lenders and Lender Affiliates to enter into
Hedge Agreements and to permit Cash Management Obligations to be created, in
each case, that the Existing Domestic Pledge Agreement shall have been amended
and restated in its entirety as set forth herein;
NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent and the Lenders to enter into the Credit Agreement, to
induce the Lenders to make their respective extensions of credit to the
Borrowers under the Credit Agreement, to induce the Surety Parties to extend the
expiry dates of the Surety Bonds and to induce Lenders and Lender Affiliates to
enter into Hedge Agreements and to permit Cash Management Obligations to be
created, each Grantor hereby agrees with the Trustee, for the benefit of the
Secured Parties, that the Existing Domestic Pledge Agreement is hereby amended
and restated in its entirety as follows:
SECTION 1.__ DEFINED TERMS
1.1 Definitions. (a) Unless otherwise defined herein, terms defined in
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the Credit Agreement and used herein shall have the meanings given to them in
the Credit Agreement.
(b) The following terms shall have the following meanings:
"Administrative Agent": The Chase Manhattan Bank, in its capacity as
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Administrative Agent under the Credit Agreement, and any successor
Administrative Agent appointed thereunder.
"Agreement": this Second Amended and Restated Domestic Pledge
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Agreement, as the same may be amended, supplemented or otherwise modified
from time to time.
"Cash Management Obligations": all obligations and liabilities of the
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Company and its Subsidiaries (whether direct or as a guarantor) owed to any
Lender, any Lender Affiliate or the Administrative Agent arising under or
in connection with treasury, depositary and cash management services or
arrangements or in connection with any automated clearinghouse transfer of
funds services or arrangements.
"Collateral": the collective reference to (a) all Pledged Stock, (b)
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all Intercompany Loans and Intercompany Notes, and (c) to the extent not
otherwise included, all Proceeds and products of any and all of the
foregoing, in each case whether now owned by a Grantor or hereafter
acquired by a Grantor.
"Credit Agreement": as defined in the recitals hereto.
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"Credit Agreement Obligations": the collective reference to (a) the
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unpaid principal of and interest on the Loans, the Reimbursement
Obligations and all other obligations and liabilities of the Borrowers to
the Administrative Agent or any Lender (including, without limitation,
interest accruing at the then applicable rate provided in the Credit
Agreement after the maturity of the Loans outstanding thereunder 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 Borrower, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding), 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, any Notes, any Letter of Credit or any other
Loan Document or any other document made, delivered or given in connection
therewith, (b) all obligations and liabilities of the Company or any of its
Subsidiaries to any Lender or Lender Affiliate (including, without
limitation, interest accruing at the then applicable rate provided in any
Secured Hedge Agreement after the maturity of any amount payable thereunder
and interest accruing at the then applicable rate provided in any Secured
Hedge Agreement after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like
proceeding, relating to the Company or any of its Subsidiaries, whether or
not a claim for post-filing or post-petition interest is allowed in such
proceeding), 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, any Secured Hedge Agreement or any document
made, delivered or given in connection therewith, and (c) all Cash
Management Obligations, in each case whether the obligations and
liabilities described in any of the foregoing clauses (a), (b) or (c) are
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 or Lender Affiliates that are required to be paid by the Company or
any of its Subsidiaries pursuant to the terms of any of the foregoing
agreements).
"Existing Credit Agreement": as defined in the recitals hereto.
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"Guarantor Credit Agreement Obligations": with respect to any
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Subsidiary Grantor, all obligations and liabilities of such Grantor which
may arise under or in connection with the Subsidiary Guarantee or any other
Loan Document to which such Grantor is a party, in 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 the
Lenders that are required to be paid by such Grantor pursuant to the terms
of any Loan Document).
"Guarantor Surety Bond Obligations": with respect to any Grantor, all
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obligations and liabilities of such Grantor which may arise under or in
connection with any Surety Bond Guarantee to which such Grantor is a party,
in 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 relevant
Surety Party that are required to be paid by such Grantor pursuant to the
terms of any Surety Bond Document).
"Holder Representative": as defined in the Trust Agreement.
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"Holders": the holders of the Public Debt Obligations (including,
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when the context permits, the relevant Public Debt Trustee acting on behalf
of such holders).
"Intercompany Loans": the collective reference to all loans and
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advances, whether or not evidenced by any promissory note or other
instrument, made by any Grantor to (i) any Foreign Subsidiary or (ii) T & N
Industries, Inc.
"Intercompany Notes": the promissory notes listed on Schedule 1,
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together with any promissory note or other instrument evidencing an
Intercompany Loan that may be issued to, or held by, any Grantor while this
Agreement is in effect.
"Issuers": the collective reference to each issuer of Pledged Stock.
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"New York UCC": the Uniform Commercial Code as from time to time in
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effect in the State of New York.
"1994 Indenture": the Indenture, dated as of August 12, 1994, between
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the Company and U.S. Bank Trust National Association, as successor to
Continental Bank, as trustee, as amended, supplemented or otherwise
modified from time to time.
"1998 Supplemental Indenture": the First Supplemental Indenture, dated
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June 30, 1998, to the Indenture, dated as of June 29, 1998, among the
Company, certain of its subsidiaries, and the Bank of New York, as trustee,
as amended, supplemented or otherwise modified from time to time.
"1999 Indenture": the Indenture, dated as of January 20, 1999, among
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the Company, certain of its subsidiaries, and The Bank of New York, as
trustee, as amended, supplemented or otherwise modified from time to time.
"Notice of Acceleration": as defined in the Trust Agreement.
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"Other Collateral": all Collateral other than Shared Collateral.
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"Pledged Securities": the collective reference to the Pledged Stock and
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the Intercompany Notes.
"Pledged Stock": the shares of Capital Stock listed on Schedule 1,
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together with any other shares, stock certificates, options or rights of
any nature whatsoever in respect of the Capital Stock of any Person that
may be issued or granted to, or held by, any Grantor while this Agreement
is in effect; provided that in any event (i) not more than 65% of the
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voting stock of any Excluded Foreign Subsidiary is pledged hereunder and
under the other Loan Documents and (ii) no Capital Stock of any Excluded
Joint Venture is pledged hereunder and under the other Loan Documents.
"Proceeds": all "proceeds" as such term is defined in Section 9-306(1)
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of the Uniform Commercial Code in effect in the State of New York on the
date hereof and, in any event, shall include, without limitation, all
dividends or other income from the Pledged Stock, collections thereon or
distributions or payments with respect thereto.
"Public Debt Indenture": each of the 1994 Indenture, the 1998
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Supplemental Indenture and the 1999 Indenture.
"Public Debt Obligations": the unpaid principal of, and premium, if
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any, and interest on, the Public Debt Securities (including, without
limitation, interest accruing at the then applicable rate provided in the
instruments governing the Public Debt Securities after the maturity of the
Public Debt Securities and interest accruing at the then applicable rate
provided in such instruments 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).
"Public Debt Securities": the collective reference to the securities
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outstanding under the Public Debt Indentures.
"Public Debt Trustee": each of the Trustees under the Public Debt
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Indentures, in each case acting jointly or individually, as the context
shall require.
"Secured Hedge Agreements": the collective reference to (a) the
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Specified Hedge Agreements and (b) any Hedge Agreements outstanding on the
date hereof and listed on Schedule X to the Credit Agreement.
"Secured Obligations": (a) with respect to the Company, the collective
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reference to (i) the Public Debt Obligations, (ii) the Credit Agreement
Obligations, (iii) its Surety Bond Obligations and (iv) the Trustee Fees
(as defined in the Trust Agreement); and (b) with respect to each Grantor
other than the Company, the collective reference to (i) such Grantor's
Guarantor Credit Agreement Obligations, (ii) such Grantor's Guarantor
Surety Bond Obligations, (iii) such Grantor's Surety Bond Obligations, (iv)
the Public Debt Obligations and (v) the Trustee Fees (as defined in the
Trust Agreement).
"Secured Parties": the collective reference to (i) the Holders, (ii)
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the Lenders (including Lender Affiliates, to the extent such Lender
Affiliates hold Secured Obligations) and the Administrative Agent, (iii)
the Surety Parties and (iv) the Trustee.
"Securities Act": the Securities Act of 1933, as amended.
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"Shared Collateral": all Collateral constituting "shares of capital
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stock or evidence of Indebtedness of any Restricted Subsidiary" within the
meaning of Section 10.09 of the 1994 Indenture, Section 3.1 of the 1998
Supplemental Indenture, or Section 3.8 of the 1999 Indenture.
"Surety Bond": each of the Surety Bonds described on Schedule IX to the
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Credit Agreement and any amendment or replacement of any thereof that does
not increase the amount, or shorten the maturity, of any thereof.
"Surety Bond Account Party": in respect of each Surety Bond, the
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Company or its Subsidiary or Subsidiaries for the account of which such
Surety Bond was issued, as specified on Schedule IX to the Credit
Agreement.
"Surety Bond Documents": in respect of each Surety Bond, (i), such
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Surety Bond and the related Contract of Indemnity as any of the foregoing
may be amended or replaced, provided, that such amendment or replacement
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does not increase the amount of any Surety Bond or shorten the maturity
thereof and (ii) any Surety Bond Guarantee related to such Surety Bond.
"Surety Bond Guarantee": any guarantee or contract of indemnity
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executed and delivered by any Grantor to any Surety Party with respect to
obligations owing by the Company or any Subsidiary in respect of any Surety
Bond, including, without limitation, the Contracts of Indemnity dated
December 29, 2000, as the same may from time to time be amended, modified,
supplemented, extended or renewed.
"Surety Bond Obligations": in respect of any Surety Bond, (i) the
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obligation of the Surety Bond Account Party for the account of which such
Surety Bond was issued to
reimburse the Surety Party which issued such Surety Bond for any payments
made by such Surety Party from time to time under such Surety Bond,
together with any interest, fees, indemnities or other amounts payable by
such Surety Bond Account Party pursuant to the terms of the Surety Bond
Documents relating to such Surety Bond (including, without limitation, to
the extent provided by such Surety Bond Documents, interest accruing at the
then applicable rate provided in such Surety Bond Documents after the
maturity of such reimbursement obligations and interest accruing at the
then applicable rate provided in such instruments after the filing of any
petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to such Surety Bond Account
Party, whether or not a claim for post-filing or post-petition interest is
allowed in such proceeding) and (ii) any Guarantor Surety Bond Obligations
with respect to such Surety Bond.
"Surety Party": in respect of each Surety Bond, the entity which issued
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such Surety Bond, as specified on Schedule IX to the Credit Agreement, and
any Person issuing any replacement of such Surety Bond that does not
increase the amount, or shorten the maturity, thereof, provided, that the
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Company shall have delivered to the Trustee the name of such Person and any
other relevant information with respect thereto requested by the Trustee.
"Trust Security Document": as defined in the Trust Agreement.
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1.2 Other Definitional Provisions. (a) The words "hereof," "herein",
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"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, subsection 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. CONFIRMATIONS AND GRANTS OF SECURITY INTERESTS
(a) Confirmations and Grants of Security Interests. Each Grantor hereunder
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that was a Grantor party to the Existing Domestic Pledge Agreement hereby
confirms that pursuant to the Existing Domestic Pledge Agreement it granted, and
each such Grantor hereby grants, to the Trustee, for the ratable benefit of the
Secured Parties as described more fully in the next sentence, a security
interest in all of the Collateral described in the Existing Domestic Pledge
Agreement in which such Grantor has, or had at any time, any right, title or
interest, as collateral security for the prompt and complete payment and
performance when due (whether at the stated maturity, by acceleration of
otherwise) of all Secured Obligations of such Grantor outstanding on the date
hereof (but not incurred on the date hereof). The foregoing grant of a security
interest by each Grantor (i) in any Shared Collateral is granted to the Trustee,
for the ratable benefit of the Secured Parties, to secure all Secured
Obligations of such Grantor outstanding on the date
hereof (but not incurred on the date hereof) and (ii) in any Other Collateral is
granted to the Trustee, for the ratable benefit of the Lenders, the Lender
Affiliates and the Surety Parties, to secure (x) in the case of the Company, the
Credit Agreement Obligations and the Surety Bond Obligations of the Company, in
each case outstanding on the date hereof (but not incurred on the date hereof)
and (y) in the case of each other Grantor, the Guarantor Credit Agreement
Obligations and the Surety Bond Obligations of such Grantor, in each case
outstanding on the date hereof (but not incurred on the date hereof).
(b) Each Grantor hereby grants to the Trustee, for the ratable benefit of
the Secured Parties as described more fully in next sentence, a security
interest in all of the property, if any, that constitutes Collateral hereunder
but did not constitute Collateral under the Existing Domestic Pledge Agreement,
in which such Grantor now has or may at any time in the future acquire any
right, title or interest, as collateral security for the prompt and complete
payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of all Secured Obligations of such Grantor
outstanding on the date hereof (but not incurred on the date hereof). The
foregoing grant of a security interest by each Grantor (i) in any Shared
Collateral is granted to the Trustee, for the ratable benefit of the Secured
Parties, to secure all Secured Obligations of such Grantor outstanding on the
date hereof (but not incurred on the date hereof) and (ii) in any Other
Collateral is granted to the Trustee, for the ratable benefit of the Lenders,
the Lender Affiliates and the Surety Parties, to secure (x) in the case of the
Company, the Credit Agreement Obligations and the Surety Bond Obligations of the
Company, in each case outstanding on the date hereof (but not incurred on the
date hereof) and (y) in the case of each other Grantor, the Guarantor Credit
Agreement Obligations and the Surety Bond Obligations of such Grantor, in each
case outstanding on the date hereof (but not incurred on the date hereof).
(c) Each Grantor hereby grants to the Trustee, for the ratable benefit of
the Secured Parties as described more fully in the next sentence, a security
interest in all of the Collateral 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, as collateral security for the prompt and
complete payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of the Secured Obligations of such Grantor incurred
on or after the date hereof. The foregoing grant of a security interest by each
Grantor (i) in any Shared Collateral is granted to the Trustee, for the ratable
benefit of the Secured Parties, to secure all Secured Obligations of such
Grantor incurred on or after the date hereof and (ii) in any Other Collateral is
granted to the Trustee, for the ratable benefit of the Lenders, the Lender
Affiliates and the Surety Parties, to secure (x) in the case of the Company, the
Credit Agreement Obligations and the Surety Bond Obligations of the Company, in
each case incurred on or after the date hereof and (y) in the case of each other
Grantor, the Guarantor Credit Agreement Obligations and the Surety Bond
Obligations of such Grantor, in each case incurred on or after the date hereof.
2.2 Limitation. Anything herein or in any other Loan Document, Surety Bond
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Document, Trust Security Document or document related to any Hedge Agreement or
Cash Management Obligations to the contrary notwithstanding, the maximum amount
of Secured Obligations secured pursuant hereto or pursuant to any other Loan
Document, Surety Bond Document or Trust Security Document by the assets owned by
any Grantor which is a Subsidiary
of the Company shall in no event exceed the amount which can be so secured under
applicable federal and state laws relating to the insolvency of debtors.
2.3 Separate Security Interests. The security interests created pursuant
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to each of subsection 2.1(a), subsection 2.1(b) and subsection 2.1(c) are
separate and distinct security interests in the Collateral.
SECTION 3. 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 Borrowers thereunder, each Grantor hereby represents and warrants
to the Secured Parties that:
3.1 Representations in the Credit Agreement. In the case of each Grantor
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other than the Company, the representations and warranties set forth in Article
VIII of the Credit Agreement, as they relate to such Grantor or to the Loan
Documents to which such Grantor is a party, each of which is hereby incorporated
herein by reference, are true and correct, in all material respects and the
Trustee and each Secured Party shall be entitled to rely on each of them as if
they were fully set forth herein, provided that each reference in each such
representation and warranty to the Company's knowledge shall, for the purposes
of this subsection 3.1, be deemed to be a reference to such Grantor's knowledge.
3.2 Title; No Other Liens. Except for the security interest granted to the
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Trustee for the benefit of the Secured Parties and the other Liens permitted to
exist on the Collateral by the Credit Agreement, such Grantor owns or has rights
in each item of the Collateral free and clear of any and all Liens or claims of
others. No public notice with respect to all or any part of the Collateral is of
record in any public office, except such as have been filed in favor of the
Trustee, for the benefit of the Secured Parties, pursuant to this Agreement or
as are permitted by the Credit Agreement.
3.3 Perfected First Priority Liens. The security interests granted
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pursuant to this Agreement (a) upon delivery to the Trustee of the certificates
representing the Pledged Stock and the Intercompany Notes and the filing of UCC
Financing Statements in the offices set forth in Schedule 2, will constitute
valid perfected security interests in all of the Collateral in favor of the
Trustee, for the benefit of the Secured Parties, as collateral security for the
Secured 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; provided, that no representations are made with
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respect to the requirements of any laws of any jurisdiction other than the
United States or any State thereof.
3.4 Pledged Securities. (a) The shares of Pledged Stock pledged by such
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Grantor hereunder constitute all the issued and outstanding shares of all
classes of the Capital Stock of each Issuer owned by such Grantor; provided,
that with respect to each Issuer which is an Excluded Foreign Subsidiary, and
with respect to F-M International Group, Inc., not more than 65% of the voting
stock of any such Issuer is pledged hereunder.
(b) All the shares of the Pledged Stock have been duly and validly issued
and are fully paid and nonassessable.
(c) Each of the Intercompany Notes, when issued, will constitute the legal,
valid and binding obligation of the obligor with respect thereto, enforceable in
accordance with its terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
(d) Such Grantor is the record and beneficial owner of, and has good and
marketable 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.
(e) FM International, LLC is the record and beneficial owner of, and has
good and marketable title to, the percentage of shares of each Foreign
Subsidiary, as listed on Schedule 3 hereto, free of any and all Liens or options
in favor of, or claims of, any other Person, and all such shares have been duly
and validly issued and are fully paid and nonassessable.
SECTION 4. COVENANTS
Each Grantor covenants and agrees with the Trustee and the Secured
Parties that, from and after the date of this Agreement until the Secured
Obligations shall have been paid in full and the Commitments shall have
terminated:
4.1 Covenants in the Credit Agreement. In the case of each Grantor other
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than the Company, such Grantor shall take, or shall refrain from taking, as the
case may be, each action that is necessary to be taken or not taken, as the case
may be, so that no Default or Event of Default is caused by the failure to take
such action or to refrain from taking such action by such Grantor or any of its
Subsidiaries.
4.2 Payment of Obligations. Such Grantor will pay and discharge or
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otherwise satisfy at or before maturity or before they become delinquent, as the
case may be, all taxes, assessments and governmental charges or levies imposed
upon the Collateral or in respect of income or profits therefrom, as well as all
claims of any kind (including, without limitation, claims for labor, materials
and supplies) against or with respect to the Collateral, except that no such
charge need be paid if the amount or validity thereof is currently being
contested in good faith by appropriate proceedings, reserves in conformity with
GAAP with respect thereto have been provided on the books of such Grantor and
such proceedings could not reasonably be expected to result in the sale,
forfeiture or loss of any material portion of the Collateral or any interest
therein.
4.3 Maintenance of Perfected Security Interest. (a) Such Grantor shall
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maintain the security interest created by this Agreement as a perfected security
interest having at least the priority described in subsection 3.3 and shall
defend such security interest against the claims and demands of all Persons
whomsoever.
(b) Such Grantor will furnish to the Trustee and the Administrative Agent
from time to time statements and schedules further identifying and describing
the Collateral and such other reports in connection with the Collateral as the
Administrative Agent may reasonably request, all in reasonable detail.
(c) At any time and from time to time, upon the written request of the
Administrative Agent or the Trustee, 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 or the Trustee 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, the filing of 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.
4.4 Notices. Such Grantor will advise the Trustee and the Administrative
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Agent promptly, in reasonable detail, of:
(a) any Lien (other than security interests created hereby or Liens
permitted under the Credit Agreement) on any of the Collateral which would
adversely affect the ability of the Trustee to exercise any of its remedies
hereunder; and
(b) of the occurrence of any other event which could reasonably be
expected to have a material adverse effect on the aggregate value of the
Collateral or on the security interests created hereby.
4.5 Pledged Stock. (a) If such Grantor shall become entitled to receive or
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shall receive any stock certificate (including, without limitation, any
certificate representing a stock 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
Trustee, hold the same in trust for the Trustee and deliver the same forthwith
to the Trustee in the exact form received, duly indorsed by such Grantor to the
Trustee, if required, together with an undated stock power covering such
certificate duly executed in blank by such Grantor and with, if the Trustee so
requests, signature guaranteed, to be held by the Trustee, subject to the terms
hereof, as additional collateral security for the Secured Obligations of such
Grantor. Any sums paid upon or in respect of the Pledged Stock pledged by any
Grantor upon the liquidation or dissolution of any Issuer shall be paid over to
the Trustee to be held by it hereunder as additional collateral security for the
Secured Obligations of such Grantor, and in case any distribution of capital
shall be made on or in respect of the Pledged Stock pledged by any Grantor or
any property shall be distributed upon or with respect to the Pledged Stock
pledged by any Grantor 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 Trustee, be delivered to the Trustee to be held by it
hereunder as additional collateral security for the Secured Obligations of such
Grantor. If any sums of money or property so paid or distributed in respect of
the Pledged Stock shall be received by such Grantor, such Grantor shall, until
such money or
property is paid or delivered to the Trustee, hold such money or property in
trust for the Secured Parties, segregated from other funds of such Grantor, as
additional collateral security for the Secured Obligations of such Grantor.
(b) Without the prior written consent of the Trustee, such Grantor will
not (i) vote to enable, or take any other action to permit, any Issuer to issue
any stock or other equity securities of any nature or to issue any other
securities convertible into or granting the right to purchase or exchange for
any stock or other equity securities of any nature of any Issuer, (ii) sell,
assign, transfer, exchange, or otherwise dispose of, or grant any option with
respect to, the Pledged Stock 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 Stock or Proceeds thereof, or any interest
therein, except for the security interests created by this Agreement or (iv)
enter into any agreement or undertaking restricting the right or ability of such
Grantor or the Trustee to sell, assign or transfer any of the Pledged Stock 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
Stock issued by it and will comply with such terms insofar as such terms are
applicable to it, (ii) it will notify the Trustee promptly in writing of the
occurrence of any of the events described in subsection 4.5(a) with respect to
the Pledged Stock issued by it and (iii) the terms of subsections 5.1(c) and 5.4
shall apply to it, mutatis mutandis, with respect to all actions that may be
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required of it pursuant to subsection 5.1(c) or 5.4 with respect to the Pledged
Stock issued by it.
(d) In the case of each Issuer which is not a Grantor, the Grantor with
respect to such Issuer shall cause such Issuer to execute and deliver to the
Trustee an acknowledgement and consent in the form of Annex 1.
SECTION 5. REMEDIAL PROVISIONS
5.1 Pledged Stock. (a) Unless a Notice of Acceleration shall be in
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effect and the Trustee shall have given notice to the Company of the Trustee's
intent to exercise its corresponding rights pursuant to subsection 5.1(b), each
Grantor shall be permitted to receive all cash dividends paid in respect of the
Pledged Stock, in each case paid in the normal course of business of the
relevant Issuer and consistent with past practice and to exercise all voting and
corporate rights with respect to the Pledged Stock; provided, however, that no
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vote shall be cast or corporate right exercised or other action taken which
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 a Notice of Acceleration shall be in effect and the Trustee shall
give notice of its intent to exercise such rights to the Company, (i) the
Trustee shall have the right to receive any and all cash dividends, payments or
other Proceeds paid in respect of the Pledged Stock and make application thereof
to the Secured Obligations in the order specified in the Trust Agreement, and
(ii) any or all of the Pledged Stock shall be registered in the name of the
Trustee or its nominee, and the Trustee or its nominee may thereafter exercise
(x) all voting, corporate and other rights pertaining to such Pledged Stock 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 Stock as if it were the absolute owner thereof (including,
without limitation, the right to exchange at its discretion any and all of the
Pledged Stock upon the merger, consolidation, reorganization, recapitalization
or other fundamental change in the corporate structure of any Issuer, or upon
the exercise by any Grantor or the Trustee of any right, privilege or option
pertaining to such Pledged Stock, and in connection therewith, the right to
deposit and deliver any and all of the Pledged Stock with any committee,
depositary, transfer agent, registrar or other designated agency upon such terms
and conditions as the Trustee may determine), all without liability except to
account for property actually received by it, but the Trustee 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 Stock pledged by such Grantor hereunder to (i) comply with any
instruction received by it from the Trustee in writing that (x) states that a
Notice of Acceleration is in effect 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) if a Notice of Acceleration is in effect, pay any dividends
or other payments with respect to the Pledged Stock directly to the Trustee.
5.2 Application of Proceeds. All Proceeds of the Collateral received by
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the Trustee hereunder shall be held and applied in accordance with the Trust
Agreement.
5.3 Code and Other Remedies. If a Notice of Acceleration is in effect,
-----------------------
the Trustee, on behalf of the Secured Parties, 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 Secured
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,
the Trustee, 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 Trustee, any Secured Party 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 Trustee or any Secured Party 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. The Trustee shall apply the net proceeds of any
action taken by it pursuant to this subsection 5.3, 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 Trustee and the Secured Parties
hereunder, including, without limitation, reasonable attorneys' fees and
disbursements, to the payment in
whole or in part of the Secured Obligations, in the order specified in the Trust
Agreement, and only after such application and after the payment by the Trustee
of any other amount required by any provision of law, including, without
limitation, Section 9-504(1)(c) of the New York UCC, need the Trustee 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 Trustee or any Secured Party arising out of the exercise by them of any
rights hereunder, except to the extent arising from the gross negligence or
willful misconduct of the Trustee, such Secured Party or such Lender. 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.
5.4 Registration Rights. (a) If the Trustee (upon directions received
-------------------
by it pursuant the Trust Agreement) shall determine to exercise its right to
sell any or all of the Pledged Stock pursuant to Section 5.3, and if in the
opinion of the Trustee 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, 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 Trustee (as directed
pursuant to the Trust Agreement), necessary or advisable to register the Pledged
Stock, or that portion thereof to be sold, under the provisions of the
Securities Act, (ii) use its best 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 Trustee (as directed pursuant to
the Trust Agreement), are necessary or advisable, all in conformity with the
requirements of the Securities Act 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 which the Trustee (as directed pursuant to the
Trust Agreement) 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 Trustee 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 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 Trustee 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, even
if such Issuer would agree to do so.
(c) Each Grantor agrees to use its best 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 subsection 5.4 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 subsection 5.4 will cause
irreparable injury to the Trustee and the Secured Parties, that the Trustee and
the Secured Parties have no adequate remedy at law in respect of such breach
and, as a consequence, that each and every covenant contained in this subsection
5.4 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 Agreements.
5.5 Deficiency. Each Grantor shall remain liable for any deficiency if
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the proceeds of any sale or other disposition of the Collateral are insufficient
to pay its Secured Obligations and the fees and disbursements of any attorneys
employed by the Trustee to collect such deficiency.
SECTION 6. THE TRUSTEE
6.1 Trustee's Appointment as Attorney-in-Fact, etc. (a) Each Grantor
----------------------------------------------
hereby irrevocably constitutes and appoints the Trustee 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 Trustee the power
and right, on behalf of such Grantor, without notice to or assent by such
Grantor, to do any or all of the following:
(i) pay or discharge taxes and Liens levied or placed on or
threatened against the Collateral, other than taxes being contested in good
faith and by appropriate proceedings;
(ii) execute, in connection with any sale provided for in subsection
5.3, any indorsements, assignments or other instruments of conveyance or
transfer with respect to the Collateral; and
(iii) (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 Trustee or as the Trustee 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
assignments, verifications, notices and other documents in connection with
any of the Collateral; (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 Trustee 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 Trustee were the absolute
owner thereof for all purposes, and do, at the Trustee's option and such
Grantor's expense, at any time, or from time to time, all acts and things
which the Trustee deems necessary to protect, preserve or realize upon the
Collateral and the Trustee's security interests therein and to effect the
intent of this Agreement, all as fully and effectively as such Grantor
might do.
Anything in this subsection 6.1 (a) to the contrary notwithstanding,
the Trustee agrees that it will not exercise any rights under the power of
attorney provided for in this subsection 6.1(a) unless directed to do so in
the manner specified in the Trust Agreement while a Notice of Acceleration
is in effect.
(b) If any Grantor fails to perform or comply with any of its agreements
contained herein, the Trustee, 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 Trustee incurred in connection with actions
undertaken as provided in this subsection 6.1, together with interest thereon at
a rate per annum equal to the rate per annum at which interest would then be
payable on past due Base Rate Loans which are US$ Revolving Credit Loans under
the Credit Agreement, from the date of payment by the Trustee to the date
reimbursed by the relevant Grantor, shall be payable by such Grantor to the
Trustee 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.
6.2 Duty of Trustee. The Trustee'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 Trustee deals with similar property for its own account.
Neither the Trustee, any Secured Party 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 Trustee and the Secured Parties hereunder are solely to protect
the Trustee's and the Secured Parties' interests in the Collateral and shall not
impose any duty upon the Trustee or any Secured Party to exercise any such
powers. The Trustee and the Secured Parties 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.
6.3 Authority of Trustee. Each Grantor acknowledges that the rights and
--------------------
responsibilities of the Trustee under this Agreement with respect to any action
taken by the Trustee or the exercise or non-exercise by the Trustee 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 Trustee and the Secured Parties, be governed by
the Trust Agreement and by such other agreements with respect thereto as may
exist from time to time among them, but, as between the Trustee and the
Grantors, the Trustee shall be conclusively presumed to be acting as agent for
the Secured Parties 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.
SECTION 7. MISCELLANEOUS
7.1 Amendments in Writing. None of the terms or provisions of this
---------------------
Agreement may be waived, amended, supplemented or otherwise modified except by
an instrument in writing executed by the Grantors and by the Trustee (pursuant
to instructions given in accordance with the Trust Agreement).
7.2 Notices. All notices, requests and demands to or upon the Trustee or
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any Grantor hereunder shall be effected in the manner provided for in subsection
6.1 of the Trust Agreement; provided that any such notice, request or demand to
--------
or upon any Grantor other than the Company shall be addressed to such Grantor
c/o the Company and that any such notice, request or demand to or upon the
Trustee shall be addressed to the Trustee at its notice address set forth in the
Trust Agreement.
7.3 No Waiver by Course of Conduct; Cumulative Remedies. Neither the
---------------------------------------------------
Trustee nor any Secured Party shall by any act (except by a written instrument
pursuant to subsection 7.1), 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 Trustee or any Secured Party, 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 Trustee or any Secured Party of any right or remedy hereunder on
any one occasion shall not be construed as a bar to any right or remedy which
the Trustee or such Secured Party 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.
7.4 Enforcement Expenses; Indemnification. (a) Each Grantor agrees to
-------------------------------------
pay or reimburse each Secured Party and the Trustee for all its reasonable costs
and expenses incurred in enforcing or preserving any rights under this Agreement
and the other Loan Documents to which such Grantor is a party, including,
without limitation, the fees and disbursements of counsel to the Trustee.
(a) Each Grantor agrees to pay, and to save the Trustee and the Secured
Parties 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.
(b) Each Grantor agrees to pay, and to save the Trustee and the Secured
Parties 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 Company would
be required to indemnify the Administrative Agent and the Lenders pursuant to
Section 15.5 of the Credit Agreement, and subsection 4.6 of the Trust Agreement.
(c) The agreements in this subsection 7.4 shall survive repayment of the
Secured Obligations and all other amounts payable under the Credit Agreement and
the other Loan Documents and the Trust Agreement.
7.5 Successors and Assigns. This Agreement shall be binding upon the
----------------------
successors and assigns of each Grantor and shall inure to the benefit of the
Trustee and the Secured Parties 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 Trustee.
7.6 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.
7.7 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.
7.8 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.
7.9 Integration. This Agreement and the other Loan Documents represent
-----------
the agreement of the Grantors, the Administrative Agent, the Trustee and the
Secured Parties with respect to the subject matter hereof and thereof, and there
are no promises, undertakings, representations or warranties by the Trustee, the
Administrative Agent or any Secured Party relative to subject matter hereof and
thereof not expressly set forth or referred to herein or in the other Loan
Documents.
7.10 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
-------------
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
7.11 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 prepaid, to such Grantor at its
address referred to in Section 7.2 or at such other address of which the Trustee
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 βββ 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.
7.12 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 Trustee nor any Secured Party 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 Trustee and the Secured Parties, 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
Secured Parties, among the Secured Parties or among the Grantors and the Secured
Parties.
7.13 WAIVER OF JURY TRIAL. EACH OF THE GRANTORS, AND, BY ACCEPTANCE OF THE
--------------------
BENEFITS HEREOF, EACH OF THE TRUSTEE AND THE SECURED PARTIES, HERE BY
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.
7.14 Additional Grantors. Each Subsidiary of the Company that is required
-------------------
to become a party to this Agreement pursuant to Section 10.11 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 2 hereto.
7.15 Releases. (a) At such time as the Loans and the other Secured
--------
Obligations shall have been paid in full and the Commitments have been
terminated and the Holder Representatives on behalf of the Secured Parties have
so certified to the Trustee, the Collateral shall be released from the Liens
created hereby, and this Agreement and all obligations (other than those
expressly stated to survive such termination) of the Trustee 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 Trustee shall deliver to such Grantor any Collateral held by
the Trustee hereunder, and execute and deliver to such Grantor such documents as
such Grantor shall reasonably request to evidence such termination. In
addition, the Trustee shall release the Collateral upon directions from the
Administrative Agent as provided in subsection 6.10 of the Trust Agreement.
(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,
then the Trustee, 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;
provided that the Company shall have delivered to the Trustee, at least ten
--------
Business Days prior to the date of the proposed release, a written request for
release identifying the relevant Grantor, together with (i) a certification by
the Company stating that such transaction is in compliance with the Credit
Agreement and the other Loan Documents and (ii) a written confirmation by the
Administrative Agent that such release is permitted by the Credit Agreement. At
the request and sole expense of the Company, a Grantor shall be released from
its obligations hereunder in the event that all the Capital Stock of such
Grantor shall be sold, transferred or otherwise disposed of in a transaction
permitted by the Credit Agreement; provided that the Company shall have
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delivered to the Trustee, at least ten Business Days prior to the date of the
proposed release, a written request for release identifying the relevant
Grantor, together with (i) a certification by the Company stating that such
transaction is in compliance with the Credit Agreement and the other Loan
Documents and (ii) a written confirmation by the Administrative Agent that such
release is permitted by the Credit Agreement.
(c) The Trustee will, at any time, upon the written instruction of the
Administrative Agent, at the sole expense of the relevant Grantor, execute and
deliver to the relevant Grantor all releases or other documents reasonably
necessary or desirable for any release contemplated above in this Section 7.15
of the Liens created hereby on the Collateral specified by the Administrative
Agent in such instruction.
(d) By acceptance of the benefits hereof, each Secured Party acknowledges
and consents to the provisions of this subsection 7.15, agrees that the Trustee
shall incur no liability whatsoever to any Secured Party for any release
effected by the Trustee in accordance with this subsection 7.15 and agrees that
the Administrative Agent shall incur no liability whatsoever to any Secured
Party for any release directed or consented to by it in accordance with the
Credit Agreement.
7.16 Foreign Issuers. Notwithstanding any provision of this Agreement, to
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the extent that the Trustee or the Administrative Agent is granted a security
interest, as security for the Secured Obligations, in any Pledged Securities
issued by any Foreign Subsidiary pursuant to
another pledge agreement or other security instrument acceptable to the
Administrative Agent, the provision of such other pledge agreement or security
instrument shall control with respect to such Pledged Securities.
ANNEX 1
ASSUMPTION AGREEMENT, dated as of ________________, 200__, made by
____________________________, a ______________ corporation (the "Additional
----------
Grantor"), in favor of First Union National Bank (the "Trustee"), not
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individually but solely as Trustee under the Second Amended and Restated
Trust Agreement, dated as of December 29, 2000 (as amended, supplemented or
otherwise modified from time to time, the "Trust Agreement"), among
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Federal-Mogul Corporation, a Michigan corporation (the "Company"), the
-------
Subsidiaries of the Company parties thereto and the Trustee.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Company, each Foreign Subsidiary Borrower (as defined in
the Existing Credit Agreement) party thereto, the banks and other financial
institutions from time to time parties thereto and the Administrative Agent
have entered into a Fourth Amended and Restated Credit Agreement, dated as
of December 29, 2000 (as amended, supplemented or otherwise modified from
time to time, the "Credit Agreement");
----------------
WHEREAS, in connection with the Credit Agreement, the Company and
certain of its Subsidiaries (other than the Additional Grantor) have
entered into the Second Amended and Restated Domestic Pledge Agreement,
dated as of December 29, 2000 (as amended, supplemented or otherwise
modified from time to time, the "Pledge Agreement") in favor of the Trustee
----------------
for the benefit of the Secured Parties;
WHEREAS, the Credit Agreement requires the Additional Grantor to
become a party to the Pledge Agreement; and
WHEREAS, the Additional Grantor has agreed to execute and deliver this
Assumption Agreement in order to become a party to the Pledge Agreement;
NOW, THEREFORE, IT IS AGREED:
Defined Terms. All capitalized terms not defined herein shall have
-------------
the meaning ascribed to them in the Pledge Agreement.
Pledge Agreement. By executing and delivering this Assumption Agreement,
----------------
the Additional Grantor, as provided in subsection 7.14 of the Pledge Agreement,
hereby becomes a party to the Pledge 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 Schedule 1
and Schedule 2 to the Pledge Agreement. The Additional Grantor hereby
represents and warrants that each of the representations and warranties
contained in Section 3 of the Pledge Agreement is true and correct with respect
to such Additional Grantor on and as the date hereof (after giving effect to
this Assumption Agreement) as if made on and as of such date.
GOVERNING LAW. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND
-------------
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
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
IN WITNESS WHEREOF, each of the undersigned has caused this Pledge
Agreement to be duly executed and delivered as of the date first above written.
FEDERAL-MOGUL CORPORATION
FEDERAL-MOGUL IGNITION COMPANY
ββββββ AUTOMOTIVE COMPANY, INC.
FEDERAL-MOGUL U.K. HOLDINGS INC.
FEDERAL-MOGUL AVIATION, INC.
FEDERAL-MOGUL PRODUCTS, INC.
FERODO AMERICA, INC.
FEDERAL-MOGUL SINTERED PRODUCTS, INC.
FEDERAL-MOGUL SINTERED PRODUCTS-WAUPUN, INC.
FEDERAL-MOGUL CAMSHAFTS, INC.
FEDERAL-MOGUL SYSTEMS PROTECTION GROUP, INC.
FEDERAL-MOGUL POWERTRAIN, INC.
FEDERAL-MOGUL RPB, INC.
FEDERAL-MOGUL LAGRANGE, INC.
FEDERAL-MOGUL CAROLINA, INC.
FEDERAL-MOGUL SOUTH BEND, INC.
FEDERAL-MOGUL SEALING SYSTEMS, INC.
T&N INDUSTRIES INC.
WEYBURN ACQUISITION CORPORATION
ββ ββββββ FB INC.
By: /s/ βββββ βββββββββββ
----------------------
Name: βββββ βββββββββββ
Title: Authorized Representative
2
F-M UK HOLDING LIMITED
By: /s/ βββββ ββββββββ
-------------------
Name: βββββ ββββββββ
Title: Director
By: /s/ βββββ ββββββββ
-------------------
Name: βββββ ββββββββ
Title: Director
ACKNOWLEDGEMENT AND CONSENT
The undersigned hereby acknowledges receipt of a copy of the Second
Amended and Restated Domestic Pledge Agreement dated as of December 29, 2000
(the "Agreement"), made by the Grantors parties thereto for the benefit of First
---------
Union National Bank, as Trustee. The undersigned agrees for the benefit of the
Trustee as follows:
The undersigned will be bound by the terms of the Agreement and will
comply with such terms insofar as such terms are applicable to the
undersigned.
The undersigned will notify the Trustee promptly in writing of the
occurrence of any of the events described in subsection 4.5(a) of the
Agreement.
The terms of subsections 5.1(c) and 5.4 of the Agreement shall apply
to it, mutatis mutandis, with respect to all actions that may be required
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of it pursuant to subsection 5.1(c) or 5.4 of the Agreement.
Federal-Mogul Ignition Company
Federal-Mogul Products, Inc.
ββββββ Automotive Company, Inc.
Federal-Mogul World Wide, Inc.
Federal-Mogul Venture Corporation
Federal-Mogul Global Properties, Inc.
Federal-Mogul U.K. Holdings Inc.
Federal-Mogul Dutch Holdings Inc.
Federal-Mogul Funding Corporation
FM International, LLC
Felt Products Mfg. Co.
Federal-Mogul Aviation, Inc.
Federal-Mogul Global Inc.
T&N Industries Inc.
Federal-Mogul Aftermarket of Canada Inc.
Federal-Mogul Sealing Systems, Inc.
ββββββ Sealing, Inc.
ββ ββββββ FB Inc.
Brake Acquisition Inc.
Federal-Mogul Carolina, Inc.
Federal-Mogul Engineered Bearings, Inc.
Federal-Mogul LaGrange, Inc.
Federal-Mogul Piston Rings, Inc.
Federal-Mogul Powertrain, Inc.
Federal-Mogul RPB, Inc.
Federal-Mogul Sintered Products, Inc.
Federal-Mogul Sintered Products-Waupun, Inc.
Federal-Mogul South Bend, Inc.
Federal-Mogul Systems Protection Group, Inc.
2
Federal-Mogul Technology, Inc.
Ferodo America, Inc.
Ferodo Technical Center Inc.
Weyburn Acquisition Corporation
Federal-Mogul Camshafts, Inc.
Federal-Mogul Flowery Branch, L.L.C.
By: /s/ βββββ βββββββββββ
--------------------------------------
Name: βββββ βββββββββββ
Title: Authorized Representative
Address for Notices:
β/β βββββββ-βββββ Corporation
βββββ ββββββββββββ βββββββ
ββββββββββ, ββ βββββ
Attention: βββββ βββββββ
Fax: βββ-βββ-ββββ
F-M UK HOLDING LIMITED
By: /s/ βββββ ββββββββ
--------------------------------------
Name: βββββ ββββββββ
Title: Director
By: /s/ βββββ ββββββββ
--------------------------------------
Name: βββββ ββββββββ
Title: Director
Address for Notices:
β/β βββββββ-βββββ Corporation
βββββ ββββββββββββ βββββββ
ββββββββββ, ββ βββββ
Attention: βββββ βββββββ
Fax: βββ-βββ-ββββ
3
Federal-Mogul Global Growth Ltd.
By: /s/ βββββ βββββββββββ
--------------------------------------
Name: βββββ βββββββββββ
Title: Authorized Representative
Address for Notices:
β/β βββββββ-βββββ Corporation
βββββ ββββββββββββ βββββββ
ββββββββββ, ββ βββββ
Attention: βββββ βββββββ
Fax: βββ-βββ-ββββ