PLEDGE OF SHARES
over the shares in Kronos Denmark ApS
by Kronos International, Inc.
as pledgor
in favour of U.S. Bank National Association
as secured party
Dated 11 April 2006
CONTENTS
1. Background..................................................1
2. Definitions.................................................1
3. Pledge......................................................1
4. Perfection..................................................1
5. Continuing Security.........................................1
6. Enforcement.................................................1
7. Representations.............................................1
8. Undertakings................................................1
9. Costs.......................................................1
10. Miscellaneous...............................................1
11. Assignment..................................................1
12. Law and Jurisdiction........................................1
Schedule 1: Acknowledgement from Kronos Denmark ApS.
SHARE PLEDGE
by Kronos International, Inc.
as pledgor
in favour of U.S. Bank National Association
as secured party
This pledge agreement (the "Pledge Agreement") is made on 11 April 2006 by:
(1) Kronos International, Inc. (the "Pledgor") a company incorporated in
Delaware, United States and registered address at Peschstrasse 5, D-51373
Leverkusen, Germany,
in favour of
(2) U.S. Bank National Association with address at 555 Southwest Oak Street,
Plaza Level 6, Portland, Oregon, USA and its successors and assigns, as the
secured party (the "Secured Party").
1. BACKGROUND
1.1 The Indenture. By an Indenture (the "Indenture") to be dated on or about 11
April 2006 and made between the Pledgor as issuer (in such capacity, the
"Issuer") and The Bank of New York as trustee (the "Trustee"), the parties
thereto have made certain agreements relating to the Issuer's Notes (as
defined in the Indenture) and the Issuer has undertaken to the Secured
Party being a creditor in its own right to pay to the Secured Party an
aggregate principal amount of up to EUR 400,000,000 on the terms and
conditions set forth in the Indenture.
1.2 Pledge Agreement. According to the terms of the Indenture, the Pledgor
shall execute, deliver and perfect this Pledge Agreement.
2. DEFINITIONS
2.1 Defined terms. In this Pledge Agreement, unless the context otherwise
requires:
"Collateral Agency Agreement" means the collateral agency agreement dated
11 April 2006 between the Trustee and the Secured Party, as collateral
agent, and acknowledged by the Company.
"Company" means Kronos Denmark ApS, a Danish company with CVR no. 24 24 27
81 and registered address at Hanne Nielsens Vej 10, DK-2840 Holte, Denmark
with a nominal share capital of DKK 1,001,000;
"Secured Obligations" means the actual, contingent, present and/or future
obligations and liabilities of the Pledgor from time to time to the Secured
Party under or pursuant to the Indenture;
"Share Benefits" means any and all income, benefits, dividends,
distributions, liquidation proceeds, bonus shares, warrants, options,
subscription rights, convertibles and other rights, privileges and benefits
arising out of or in connection with the Shares (whether by way of
redemption, bonus, preference, option rights, substitution, exchange or
otherwise); and
"Shares" means the share nos. 1-6,500 and 10,001-10,006 of the shares of
capital in the Company with an aggregate nominal value of DKK 650,600 held
by the Pledgor.
2.2 Headings. In this Pledge Agreement clause headings are for ease of
reference only.
3. PLEDGE
3.1 Pledge. As security for the Secured Obligations, the Pledgor hereby
pledges, assigns and transfers as security with senior priority to the
Secured Party all its right, title and interest in and to the Shares and
the Share Benefits.
3.2 Voting rights. The pledge as set forth in Clause 3.1 shall include all
voting rights associated with the Shares, provided however that until the
Pledgor has received written notice from the Secured Party that it will
exercise said rights, the Pledgor has the right to exercise the voting
rights on the Shares. The Secured Party shall only be entitled to give such
notice, provided that an event of default has occurred and is continuing
under the Indenture.
3.3 Share Benefits. Any and all Share Benefits shall upon the Secured Party's
request be paid to an account in the name of the Secured Party and if a
Share Benefit does not arise as monies, such Share Benefit shall be
transferred or delivered to Secured Party. As long as no event of default
has occurred and is continuing under the Indenture, the Pledgor shall be
entitled to receive payments of dividend from the Company.
3.4 Future Secured Party. If the Secured Party is replaced as a creditor under
the Indenture and as collateral agent under the Collateral Agency Agreement
by a new collateral agent assuming the rights and obligations of the
Secured Party under the Indenture and the Collateral Agency Agreement, such
new collateral agent shall become a new Secured Party under this Pledge
Agreement.
4. PERFECTION
4.1 Perfection of pledge of Shares. The Pledgor shall ensure that as soon as
possible after the execution of this Pledge Agreement:
a) the Company is notified of the Pledge Agreement and signs the
acknowledgement attached as Schedule 1 to this Pledge Agreement; and
b) the Secured Party receives a certified copy of the shareholders
register of the Company in which the name of the Secured Party has
been duly recorded.
5. CONTINUING SECURITY
5.1 Effective date. This Pledge Agreement shall be effective as of the date
hereof and shall continue in effect until earlier of (i) all Secured
Obligations have been fully discharged, or (ii) this Pledge Agreement is
permitted to be released pursuant to the terms of the Indenture.
5.2 No discharge. This Pledge Agreement will not be discharged or affected by:
(a) any invalidity, unenforceability, release, amendment, supplement,
neglect to perfect or enforce, assignment or novation of the Indenture or
any other document, (b) any time, waiver or consent granted to the Pledgor
or any other person, (c) any incapacity, change or insolvency proceedings
in respect of the Pledgor, the Secured Party, the Trustee or any other
person, (d) any other act or omission of any kind by any of the Pledgor,
the Company, the Secured Party, the Trustee or any other person or any
other circumstances whatsoever which might constitute a legal or equitable
discharge of the Pledgor, it being the intention of the Pledgor that the
pledge set out herein shall be absolute and unconditional in any and all
circumstances.
5.3 Further Assurances. The Pledgor agrees that at any time and from time to
time upon the written request of the Secured Party, the Pledgor will
execute and deliver such further documents and do such further acts and
things as the Secured Party may reasonably request consistent with the
provisions hereof in order to effect the purposes of this Pledge Agreement.
5.4 Confirmation of release of security. The Secured Party undertakes at the
time this Pledge Agreement is no longer effective pursuant to Clause 5.1 to
confirm to the Company that the security interest under this Pledge
Agreement has been released.
6. ENFORCEMENT
6.1 Remedies. If an event of default under the Indenture has occurred and is
continuing, the Secured Party will have the right to (subject to and in
accordance with applicable mandatory law):
a) enforce any and all of the rights of the Secured Party under this
Pledge Agreement and any statutory or other rights under the Danish
Administration of Justice Act ("Retsplejeloven") and any other
relevant rules or regulations; and/or
b) exercise any or all rights relating to the Shares and Share Benefits
including but not limited to voting rights on behalf and in the name
of the Pledgor; and/or
c) collect and receive any or all Share Benefits; and/or
d) sell, transfer or assign the Shares and Share Benefits or part
thereof, by way of private or public auction or contract at a price
which in the reasonable opinion of the Secured Party is the best
obtainable in the circumstances.
6.2 Power of attorney. The Pledgor irrevocably appoints the Secured Party as
its attorney with full power to act for the Pledgor and in its name and on
its behalf:
a) to execute, sign or register and do all such acts and things which the
Pledgor is required to do and fails to do under this Pledge Agreement;
b) upon the occurrence and during the continuance of an Event of Default,
to exercise any and all of its rights as shareholder in the Company
relating to the Shares and the Share Benefits, including without
limitation exercising the voting rights and transferring title to the
Shares and Share Benefits to a third party; and
c) to take any steps the Secured Party deems expedient or reasonable to
ensure the continued effectiveness of the security interest in the
Shares and the Share Benefits as contemplated in Section 5.3.
6.3 Application of Monies. All monies received by the Secured Party under this
Pledge Agreement shall be applied by the Secured Party in or towards
payment of the Secured Obligations.
6.4 No Subrogation. The Pledgor shall have no right to subrogate, wholly or
partly, in any security provided to the Secured Party in relation to the
Indenture or in any other way until all of the Secured Obligations have
been fully and finally satisfied.
6.5 Statutory Rights. Clause 6 shall not limit or reduce the statutory rights
or any other rights of the Secured Party under Danish law.
7. REPRESENTATIONS
7.1 Representations by the Pledgor. The Pledgor represents and guarantees to
the Secured Party that:
a) the Company is a company with limited liability duly incorporated and
validly existing under the laws of Denmark, duly registered with the
Danish Commerce and Companies Agency under CVR no. 24 24 27 81;
b) the Pledgor is the sole legal and beneficial owner of all of the
Shares and Share Benefits;
c) the Pledgor is the sole shareholder in the Company;
d) the security created by this Pledge Agreement constitute the legal,
valid and binding obligations of the Pledgor enforceable against the
Pledgor and the Pledgor's creditors and any other third party in
accordance with its terms and create a first priority pledge over the
Shares and Share Benefits;
e) the Shares, the Share Benefits and any other shares of capital in the
Company are fully-paid and non-assessable and are not subject to any
encumbrances of any kind whether operating by virtue of contract or
law, except for this Pledge Agreement;
f) none of the Shares or the Share Benefits are subject to any
shareholders agreements or any options, rights of first refusal,
pre-emptive rights or any other rights restricting or affecting the
voting on or the disposal of the Shares or the Share Benefits, save as
set forth in the articles of association of the Company;
g) the entering into and performance of this Pledge Agreement and the
transactions contemplated hereby do not:
(i) conflict with any law, regulation or any official or judicial order or
decree of any governmental agency or court;
(ii) contravene the articles of association or any other constitutional
documents of the Pledgor or the Company; or
(iii) conflict with or result in a breach of any agreement or document to which
the Pledgor is a party or which is binding upon the Pledgor or any of its
assets; and
h) all approvals, consents, registrations and other matters required in
connection with this Pledge Agreement and the transactions
contemplated hereby have been obtained and are in full force and
effect.
8. UNDERTAKINGS
8.1 Undertakings by the Pledgor. The Pledgor undertakes towards the Secured
Party not without the prior written consent of the Secured Party (such
consent not to be unreasonably withheld or delayed if required to give
effect to the provisions of the Indenture):
a) to sell or otherwise dispose of the Shares or Share Benefits, save as
set forth in Clause 3.3;
b) to enter into any shareholders' agreement with respect to the Shares
or the Share Benefits or to grant or permit to exist, and immediately
procure the removal of any option, right of first refusal, pre-emptive
rights or any other right restricting or affecting the voting on or
the disposal of the Shares or the Share Benefits;
c) to amend or permit the amendment of the articles of association of the
Company;
d) not to do or cause or permit to be done anything which will, or could
be reasonably expected to, materially adversely affect the Shares or
the Share Benefits, this Pledge Agreement or the rights of the Secured
Party hereunder; and
e) to agree or permit that any Share Benefits or any other amount shall
be paid to or otherwise distributed to the Pledgor or any other party
(other than the Secured Party) from the Company if requested by the
Secured Party in accordance with Clause 3.3.
8.2 Further undertakings by the Pledgor. The Pledgor further undertakes towards
the Secured Party:
a) to ensure that the Company does not issue any additional Shares or
Share Benefits unless 65% of such are to the Pledgor and secured under
this Pledge Agreement;
b) not to do or cause or permit to be done anything which will, or could
be reasonably expected to, materially adversely affect the Shares or
the Share Benefits, this Pledge Agreement or the rights of the Secured
Party hereunder; and
c) at its own costs to execute and deliver to the Secured Party such
further pledges, transfers, assignments, notices and other documents
and do such acts and things which the Secured Party shall request for
the purpose of perfecting and protecting this Pledge Agreement and
realising the Shares and the Share Benefits including any notices in
the event of an assignment of any of the rights of the Secured Party
or the Secured Party under this Pledge Agreement.
9. COSTS
9.1 Transaction and enforcement costs. The Pledgor shall pay and, on demand
from the Secured Party, indemnify the Secured Party against any stamp duty,
registration fees, other duties and fees, taxes, costs, expenses (including
legal fees) and liabilities incurred or to be incurred by the Pledgor, the
Company or the Secured Party in connection with the negotiation,
preparation, execution, amendment, release, protection and/or enforcement
or which otherwise arise of this Pledge Agreement.
10. MISCELLANEOUS
10.1 No implied waivers; cumulative rights; separability; amendments. The rights
of the Secured Party under this Agreement:
a) shall not be waived by any delay in the exercise of any such rights
unless otherwise expressly stated in writing by the Secured Party;
b) are cumulative and may be exercised as often as necessary;
c) are several and the invalidity or unenforceability of any provision
shall not affect any other provision under this Pledge Agreement; and
d) shall not be amended except with the written consent of the Secured
Party.
11. ASSIGNMENT
11.1 No assignment by the Pledgor. The Pledgor may not assign or transfer or
have assumed any part of its rights and/or obligations under this Pledge
Agreement.
11.2 Assignment by the Secured Party. The Secured Party may at any time assign,
transfer or have assumed all or part of its rights or obligations under
this Pledge Agreement without the consent of the Pledgor, provided that
such assignment or transfer is made rateably in connection with an
assignment or transfer of the Indenture. Any costs relating to such
assignment, transfer or assumption to be paid by the Secured Party.
11.3 Perfection of Assignment. If the Pledgor is notified by the Secured Party
of an assignment or transfer by the Secured Party of its rights under the
Indenture, the Pledgor shall ensure that as soon as possible after the
receipt of such notice:
a) the Company shall be notified of such transfer or assignment and sign
an acknowledgement of the transfer or assignment in a form acceptable
to the Secured Party; and
b) the Secured Party receives a transcript of the shareholder register of
the Company in which name of the assignee or transferee is recorded as
the Secured Party.
12. LAW AND JURISDICTION
12.1 Law. This Pledge Agreement shall be governed by and shall be construed in
accordance with Danish law.
12.2 Main jurisdiction. For the sole benefit of the Secured Party, the Maritime
and Commercial Court in Copenhagen (S0- og Handelsretten i K0benhavn) shall
have jurisdiction with respect to any dispute arising out of or in
connection with this Pledge Agreement and the Pledgor agrees for the
benefit of the Secured Party that any legal action or proceedings arising
out of or in connection with this Pledge Agreement against the Pledgor or
any of its assets may be brought in the said court.
12.3 Alternative jurisdiction. Notwithstanding Clause 12.2, the Secured Party
has the right:
a) to commence proceedings against the Pledgor or its assets in any
jurisdiction; and
b) to commence enforcement proceedings concurrently with or in addition
to proceedings in Denmark or without commencing proceedings in
Denmark.
Executed by the parties on the date first written above.
As Pledgor,
Kronos International, Inc.:
/s/ John St. Wrba
- -------------------------------------------------
Name: John St. Wrba
Its: Vice President and Assistant Treasurer
As Secured Party,
U.S. Bank National Association:
/s/ Cheryl K. Nelson
Name: Cheryl K. Nelson
Its: Vice President