Exhibit 4.10
Final Version
28 June 2002
Kronos InternationaL, iNC:
AS PLEDGOR
AND
U.S. Bank, N.A.
AS Collateral Agent and PLEDGEE
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PARTNERSHIP INTEREST PLEDGE AGREEMENT
relating to the fixed capital contribution in
Kronos Titan GmbH & Co. OHG, Leverkusen
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CONTENTS
CLAUSE PAGE
1. Definitions and Language........................................2
2. Interests in the Company........................................3
3. Secured Obligations.............................................3
4. Pledge..........................................................3
5. Scope of the Pledge.............................................4
6. Exercise of Membership Rights...................................4
7. Enforcement of the Pledge.......................................4
8. Undertakings of the Pledgor.....................................6
9. Representations and Warranties..................................7
10. Duration and Independence.......................................8
11. Release (Pfandfreigabe).........................................8
12. Costs and Expenses..............................................8
13. Partial Invalidity, Waiver......................................8
14. Amendments......................................................9
15. Notices and their Language......................................9
16. Applicable Law, Jurisdiction...................................10
17. Transfer to a New Collateral Agent.............................11
18. Miscellaneous..................................................11
19. Counterparts...................................................11
Schedule 1 Partnership Agreement.....................................
Schedule 2 Certified Copy of Partners' Resolution....................
THIS INTEREST PLEDGE AGREEMENT is made the 28th day of June 2002
Between:
1. Kronos International, Inc., a corporation organised under the
laws of Delaware, USA, having its seat in Wilmington, Delaware,
USA, which established a registered branch in Leverkusen,
Federal Republic of Germany, registered in the commercial
register (Handelsregister) of the local court (Amtsgericht) of
Leverkusen under HRB 3001 (the "Pledgor");
2. U.S. Bank, N.A., a national association, having its principal
office in Portland, Oregon, USA, in its capacity as collateral
agent under the Indenture (as defined below) (together with its
successors and assignees the "Collateral Agent").
WHEREAS:
(A) Kronos International, Inc. offered EUR 285,000,000 87/8 % senior secured
notes (the "Initial Notes") which are governed by the Indenture, to, and
Deutsche Bank AG London, Dresdner Bank AG London Branch, Commerzbank
Aktiengesellschaft, London Branch, purchased the Initial Notes pursuant
to, the terms of a purchase agreement dated 19 June 2002.
(B) The Pledgor has agreed to grant a pledge over 65 % of the entire fixed
capital (Festkapital) of the Company (as defined below) as security for
the Collateral Agent's claims against the Pledgor under the Parallel
Obligations (as defined below). The Collateral Agent is entitled to this
security pursuant to the terms of the Indenture.
NOW, IT IS AGREED as follows:
1. Definitions and Language
1.1 Unless otherwise defined herein, capitalised terms shall have the same
meanings as set out in the Indenture.
"Company" means Kronos Titan GmbH & Co. OHG, an unlimited partnership
(offene Handelsgesellschaft) organised under the laws of the Federal
Republic of Germany having its business address at ▇▇▇▇▇▇▇▇▇(▇▇▇▇)▇ ▇,
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ of Germany which is registered in the
commercial register (Handelsregister) of the local court (Amtsgericht) of
Leverkusen under HRA 4198.
"Indenture" means an indenture dated 28 June 2002 between the Pledgor and
the The Bank of New York, a New York banking corporation, having its
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principal place of business at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇ of America (the "Trustee").
1.2 This Agreement is made in the English language. For the avoidance of
doubt, the English language version of this Agreement shall prevail over
any translation of this Agreement. However, where a German translation of
a German legal term appears in the text of this Agreement, the German
translation shall prevail.
2. Interests in the Company
2.1 The Company's partners are Kronos International, Inc. with a fixed capital
interest (Festkapitalanteil) of EUR 99,950,250 (in words: Euro ninety nine
million nine hundred fifty thousand two hundred and fifty) and NL
Industries Chemie GmbH with a fixed capital interest (Festkapitalanteil)
of EUR 49,750 (in words: Euro forty nine thousand seven hundred and
fifty).
3. Secured Obligations
The pledge hereunder is constituted in order to secure the prompt and
complete satisfaction of any obligations including, but not limited to
principal, premium, if any, and interest, at any time due, owing or
incurred by the Pledgor to the Collateral Agent under the Parallel
Obligations (the "Secured Obligations").
4. Pledge
4.1 The Pledgor hereby pledges to the Collateral Agent a part of its fixed
capital interest (Festkapitalanteil) in the Company in the amount of 65 %,
i.e. currently in the amount of EUR 65,000,000 (in words: Euro sixty five
million), of the fixed capital, and 65 % of the Kapitalkonto II (such 65 %
collectively being the "Existing Interest") and a part that is equivalent
to 65 % of the nominal amount of all additional fixed capital interest of
the Company (irrespective of their nominal value) which the Pledgor may
acquire in the future (such 65 % being the "Future Interests" and,
together with the Existing Interest, the "Interests") together with all
ancillary rights and claims associated with the Interests as more
particularly specified in Clause 5 hereof (the "Pledge"). In the case that
the Future Interests should not be sufficiently determinable, the Pledgor
is obligated to pledge such Future Interests in accordance with Section
8.6 hereof when the Future Interests become determinable.
4.2 The Collateral Agent hereby accepts the Pledge.
4.3 The Pledge is in addition, and without prejudice, to any other security
the Collateral Agent may now or hereafter hold in respect of the Secured
Obligations.
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5. Scope of the Pledge
5.1 The Pledge constituted by this Agreement include:
(a) the present and future rights to receive:
(i) profits payable in relation to the Interests (Gewinnanspruch),
if any and, in particular but not limited to, any and all
rights and claims arising in connection with the capital
accounts (Kapital-konten) of the Pledgor, if any; and
(ii) liquidation proceeds (Liquidationserlos), redemption proceeds
(Einziehungsentgelt), repaid capital in case of a capital
decrease, any compensation in case of termination (Kundigung)
and/or withdrawal (Austritt) of a partner of the Company, the
surplus in case of surrender (Preisgabe), any claim to a
distribution-quota (Auseinandersetzungsanspruch) and all other
pecuniary claims (geldwerte Forderungen) associated with the
Interests; and
(b) all other rights and benefits attributable to the Interests.
5.2 Notwithstanding that the aforementioned rights are pledged hereunder, the
Pledgor shall be entitled to receive and retain all payments attributable
to the Interests whether in cash, by the issue of any loan note or debt
instrument in respect of the Interests until such time as the Collateral
Agent is entitled to enforce the Pledge constituted hereunder.
6. Exercise of Membership Rights
The membership rights, including the voting rights, attached to the
Interests remain with the Pledgor. The Pledgor, however, shall at all
times until the full satisfaction or defeasance of all Secured Obligations
or the release of the Pledge exercise its membership rights, including its
voting rights, in good faith to ensure that the validity and
enforceability of the Pledge and the existence of all or part of the
Interests are not in any way adversely affected, other than through
payments pursuant to Clause 5.2 above, or as otherwise permitted by the
Indenture. The Pledgor undertakes that no resolutions are passed which
constitute a breach of its obligations under Clause 8 hereof.
7. Enforcement of the Pledge
7.1 If the requirements set forth in Section 1204 et seq. of the German Civil
Code (Burgerliches Gesetzbuch) with regard to the enforcement of the
Pledge are met (Pfandreife), in particular, if any of the Secured
Obligations has become due and payable pursuant to Section 6.2 of the
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Indenture and are unpaid, then in order to enforce the Pledge, the
Collateral Agent may at any time thereafter avail itself of all rights and
remedies that a pledgee has upon default of a pledgor under the laws of
the Federal Republic of Germany.
7.2 Notwithstanding Section 1277 of the German Civil Code, the Collateral
Agent is entitled to exercise its rights without obtaining enforceable
judgment or other instrument (vollstreckbarer Titel) by way of public
auction.
7.3 The Pledgor hereby expressly agrees that ten (10) business days' prior
written notice to the Pledgor of the place and time of any such public
auction shall be sufficient. The public auction may take place at any
place in the Federal Republic of Germany designated by the Collateral
Agent.
7.4 If the Collateral Agent should seek to enforce the Pledge under Clause 7.1
hereof, the Pledgor shall, at its own expense, render forthwith all
necessary assistance in order to facilitate the prompt sale of the
Interests or any part thereof and/or the exercise by the Collateral Agent
of any other right it may have as pledgee.
7.5 If the Pledge is enforced, no rights of the Collateral Agent shall pass to
any Pledgor by subrogation or otherwise unless and until all of the
Secured Obligations have been satisfied and discharged in full. Until
then, the Collateral Agent shall be entitled to treat all enforcement
proceeds as additional collateral for the Secured Obligations, or to seek
satisfaction from such proceeds at any time.
7.6 Following satisfaction of the requirements for enforcement under Clause
7.1 hereof, all subsequent payments of profits attributable to the
Interests and all payments based on similar ancillary rights attributed to
the Interests may be applied by the Collateral Agent in satisfaction in
whole or in part of the Secured Obligations or treated as additional
collateral.
7.7 Even if the requirements for enforcement referred to under Clause 7.1
above are met, the Collateral Agent shall not, whether as proxy or
otherwise, be entitled to exercise the voting rights attached to the
Interests. However, the Pledgor shall, upon occurrence of an event which
allows the Collateral Agent to enforce the Pledge, have the obligations
and the Collateral Agent shall have the rights set forth in Clause 8.5
below regardless of which resolutions are intended to be adopted.
7.8 The Collateral Agent may, in its sole discretion, determine which of
several security interests, if applicable, shall be used to satisfy the
Secured Obligations.
7.9 The Pledgor hereby expressly waives all defences of revocation (Einrede
der Anfechtbarkeit) and set-off (Einrede der Aufrechenbarkeit) pursuant to
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Sections 770, 1211 of the German Civil Code. In the case of enforcement,
Section 1225 of the German Civil Code (legal subrogation of claims to a
pledgor - Forderungsubergang auf den Verpfander) shall not apply until
full and final satisfaction of all Secured Obligations.
8. Undertakings of the Pledgor
Except as otherwise permitted by the terms of this Agreement, during the
term of this Agreement, the Pledgor undertakes to the Collateral Agent:
8.1 To the extent prohibited by the Indenture, not to take, or participate in,
any action which results or might result in the respective Pledgor's loss
of ownership of all or part of the Interests, and any other transaction
which would have the same result as a sale, transfer, encumbrance or other
disposal of the Interests, or which would cause the Interests in whole or
in part to cease to exist, or which would for any other reason defeat,
impair or circumvent the rights of the Collateral Agent except with the
prior written consent of the Collateral Agent.
8.2 Not to take, or participate in, any merger, consolidation, conversion of
form, or other business combination or restructuring of similar effect
("Conversion") as a result of which the Company would be converted into,
assumed by, or continue to exist as, a corporation (limited liability
company (Gesellschaft mit beschrankter Haftung) or stock corporation
(Aktiengesellschaft)), unless it is ensured that as from the time, when
the Conversion will become legally effective, the Collateral Agent will be
granted, at equal terms as under this Agreement, a pledge over 65 % of the
entire capital stock (Stammkapital or Grundkapital) of such corporation.
8.3 To promptly inform the Collateral Agent in writing of all matters
concerning the Company or the Interests, other than those occurring in the
ordinary course of business, of which the Pledgor is aware and which it
reasonably believes might have a material adverse effect on the security
interest hereunder of the Collateral Agent. The Pledgor shall allow,
following the occurrence or during the continuance of an Event of Default
pursuant to the Notes or the Indenture, the Collateral Agent or, as the
case may be, its proxy or any other person designated by the Collateral
Agent, to attend all such partners' meetings of the Company as attendants
without power to vote. Subject to the provision contained in Clause 11
hereof, the Collateral Agent's right to attend the shareholders' meeting
shall lapse immediately upon complete satisfaction and discharge or
defeasance of the Secured Obligations.
8.4 In the event of any increase in the capital (Kapitalkonto I in the case of
a general partnership (offene Handelsgesellschaft) and Stammkapital /
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Grundkapital in the case of a corporation (Gesellschaft mit beschrankter
Haftung / Aktiengesellschaft)) of the Company, to fully pay in any Future
Interest.
8.5 Insofar as additional declarations or actions of any kind whatsoever are
necessary for the creation, perfection or continued existence of the
Pledge or the creation of a new pledge in favour of the Collateral Agent
to ensure its security interest hereunder, the Pledgor shall at the
Collateral Agent's reasonable request make such declarations and undertake
such actions or take all other steps in the form required by law and as
requested by the Collateral Agent at the Pledgor's sole costs and
expenses.
9. Representations and Warranties
The Pledgor represents and warrants to the Collateral Agent by
way of an independent guarantee (unabhangiges
Schuldversprechen) that:
9.1 it has full corporate power and authority to enter into this
Agreement;
9.2 this Agreement constitutes the legal, valid and binding
obligations of the Pledgor;
9.3 this Agreement does not violate any Governing Documents of the
Company;
9.4 the statements made in Clause 2 above are true and correct;
9.5 it is the sole legal and beneficial owner, free from encumbrances (other
than the Pledge created hereunder), of all Interests;
9.6 the Existing Interest is fully paid in and the fixed capital interest
(Festkapitalanteil) has not been repaid in any way; all facts capable of
being entered into the commercial register of the Company have been
entered into the commercial register;
9.7 there are no silent partnership agreements (Stille Gesellschaft) by which
a third party is entitled to a participation in the profits or revenue of
the Company;
9.8 the partnership agreement attached as Schedule 1 hereto presents a true
and complete copy of the current partnership agreement of the Company; and
9.9 the place from which the Company is in fact administered and where all
material managerial decisions are taken (tatsachlicher Verwaltungssitz) is
situated in the Federal Republic of Germany.
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10. Duration and Independence
10.1 This Agreement shall remain in full force and effect until complete
satisfaction, defeasance or discharge of the Secured Obligations or the
release of the Pledge pursuant to the terms of the Indenture. The Pledge
shall not cease to exist if the Pledgor under the Notes have only
temporarily discharged the Secured Obligations.
10.2 This Agreement shall create a continuing security and no change,
amendment, or supplement whatsoever in the Notes or in any document or
agreement related to any of the Notes shall affect the validity or the
scope of this Agreement nor the obligations which are imposed on the
Pledgor pursuant to it.
10.3 This Agreement is independent from any other security or guarantee which
may have been or will be given to the Collateral Agent. None of such other
security shall prejudice, or shall be prejudiced by, or shall be merged in
any way with this Agreement.
11. Release (Pfandfreigabe)
Upon complete and irrevocable satisfaction or defeasance of the Secured
Obligations or compliance with the terms of the Indenture permitting
discharge or release of the collateral, pursuant to the terms of the
Indenture the Collateral Agent will as soon as reasonably practical
declare the release of the Pledge (Pfandfreigabe) to the Pledgor as a
matter of record. For the avoidance of doubt, the parties are aware that
upon full and complete satisfaction of the Secured Obligations the Pledge,
due to its accessory nature (Akzessorietat), ceases to exist by operation
of German mandatory law.
12. Costs and Expenses
All costs, charges, fees, taxes and expenses triggered by this Agreement
or reasonably incurred by any party hereto in connection with its
preparation, execution, amendments and enforcement (in each case including
reasonable fees for legal advisers) shall be borne by the Pledgor.
13. Partial Invalidity, Waiver
13.1 If at any time, any one or more of the provisions hereof is or becomes
invalid, illegal or unenforceable in any respect under the law of any
jurisdiction, such provision shall as to such jurisdiction, be ineffective
to the extent necessary without affecting or impairing the validity,
legality and enforceability of the remaining provisions hereof or of such
provisions in any other jurisdiction. The invalid or unenforceable
provision shall be deemed replaced by such valid, legal or enforceable
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provision which comes as close as possible to the original intent of the
parties and the invalid, illegal or unenforceable provision.
13.2 No failure to exercise, nor any delay in exercising, on the part of the
Collateral Agent, any right or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any right or remedy
prevent any further or other exercise thereof or the exercise of any other
right or remedy. The rights and remedies provided hereunder are cumulative
and not exclusive of any rights or remedies provided by law.
13.3 In particular, the Pledge shall not be affected and shall in no event
extend to more than 65% of the Pledgor's fixed capital interest
(Festkapitalanteil) in the Company even if the number or nominal value of
the Existing Interest or the aggregate capital of the Company as stated in
Clause 2 are inaccurate or deviate from the actual facts.
14. Amendments
Changes and amendments to this Agreement including this subsection shall
be made in writing.
15. Notices and their Language
15.1 Any notice or communication by the Pledgor or the Collateral Agent to
others is duly given if in writing and delivered in person or mailed by
first class mail (registered or certified, return receipt requested),
telex, telecopier or overnight air courier guaranteeing next day delivery,
to the others' address:
For the Pledgor: Kronos International, Inc.
Address: ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Fax: ▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
With a copy to: ▇▇▇▇▇ Liddell & ▇▇▇▇ LLP
Address:: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Fax: ▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, Esq.
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For the Collateral Agent: U.S. Bank N.A.
Address: ▇▇▇ ▇.▇. ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇
Fax: ▇▇ (▇▇▇) ▇▇▇ ▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
With a copy to the Trustee: The Bank of New York
Address: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇
Fax: ▇▇ (▇▇▇)▇▇▇ ▇▇▇▇
Attention: Corporate Trust
Administration
or to such other address as the recipient may notify or may have notified
to the other party in writing.
15.2 Unless otherwise provided herein, any notice or other communication under
or in connection with this Agreement shall be in the English language or,
if in any other language, accompanied by a translation into English. In
the event of any conflict between the English text and the text in any
other language, the English text shall prevail, except that where a German
translation of a German legal term appears in such text, the German
translation shall prevail.
16. Applicable Law, Jurisdiction
16.1 This Agreement shall be governed by and construed in accordance with the
laws of the Federal Republic of Germany.
16.2 The place of jurisdiction for any and all disputes arising under or in
connection with this Agreement shall be the district court (Landgericht)
in Frankfurt am Main. The Collateral Agent, however, shall also be
entitled to take legal action against the Pledgor in any other court of
competent jurisdiction. Further, the taking of proceedings against any
Pledgor in any one or more jurisdictions shall not preclude the taking of
proceedings in any other jurisdiction (whether concurrently or not) if and
to the extent permitted by applicable law.
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17. Transfer to a New Collateral Agent
In the case that the Collateral Agent assigns the Secured Obligations to a
third party and the third party assumes the Secured Obligations, the
Collateral Agent shall be entitled to transfer all of its rights and
obligations under this Agreement to such third party and such third party
shall assume such rights and obligations, and will thereby become a
Collateral Agent under this Agreement. The new Collateral Agent and the
former Collateral Agent shall jointly notify the Pledgor in writing of
this transfer under this Agreement. Such transfer shall not require any
further consent by the Pledgor.
18. Miscellaneous
18.1 The Pledgor hereby notifies the Company of the Pledge
constituted hereunder.
18.2 The Company acknowledges notice of the Pledge by signing this
Agreement.
18.3 The Pledgor and NL Industries Chemie GmbH, being the sole partners in the
Company, have unanimously approved the Pledge created hereunder in a
partners' resolution dated 27 June 2002, a certified copy of which is
attached as Schedule 2 hereto.
19. Counterparts
This Pledge Agreement shall be executed in counterparts, each of which
shall similarly be binding upon the parties hereto.
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Signature Page
THIS PARTNERSHIP INTEREST PLEDGE AGREEMENT has been entered into on the date
stated at the beginning by:
Kronos International, Inc.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President and Chief Financial Officer
U.S. Bank, N.A.
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
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By: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
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Acknowledged and agreed
Kronos Titan GmbH & Co. OHG represented by its managing partner Kronos
International, Inc., a corporation organised under the laws of Delaware, USA,
having its seat in Wilmington, Delaware, USA, which established a registered
branch in Leverkusen, Federal Republic of Germany, registered in the commercial
register (Handelsregister) of the local court (Amtsgericht) of Leverkusen under
HRB 3001.
By: /s/ U. Fiand /s/ ▇. ▇▇▇▇
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Name: U. Fiand ▇. ▇▇▇▇
Title: President V/P Controller
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