Guarantee And Collateral Agreement

EXHIBIT 10.72 EXECUTION COPY ================================================================================


GUARANTEE AND COLLATERAL AGREEMENT


dated as of


August 7, 2003,


among


EAGLEPICHER HOLDINGS, INC.,


EAGLEPICHER INCORPORATED,


THE SUBSIDIARIES OF
EAGLEPICHER INCORPORATED
IDENTIFIED HEREIN


and


HARRIS TRUST AND SAVINGS BANK,


as Administrative Agent


---------------------------


GE CAPITAL CORPORATION,


as Collateral Agent


================================================================================


TABLE OF CONTENTS


ARTICLE I


Definitions


SECTION 1.01. Credit Agreement.......................................................................... 1 SECTION 1.02. Other Defined Terms....................................................................... 1


ARTICLE II


Guarantee


SECTION 2.01. Guarantee................................................................................. 5 SECTION 2.02. Guarantee of Payment...................................................................... 5 SECTION 2.03. No Limitations............................................................................ 6 SECTION 2.04. Reinstatement............................................................................. 6 SECTION 2.05. Agreement To Pay; Subrogation............................................................. 7 SECTION 2.06. Information............................................................................... 7


ARTICLE III


Pledge of Securities


SECTION 3.01. Pledge.................................................................................... 7 SECTION 3.02. Delivery of the Pledged Collateral........................................................ 8 SECTION 3.03. Representations, Warranties and Covenants................................................. 8 SECTION 3.04. Certification of Limited Liability Company and Limited Partnership Interests.............. 9 SECTION 3.05. Registration in Nominee Name; Denominations............................................... 10 SECTION 3.06. Voting Rights; Dividends and Interest..................................................... 10


ARTICLE IV


Security Interests in Personal Property


SECTION 4.01. Security Interest......................................................................... 12 SECTION 4.02. Representations and Warranties............................................................ 13 SECTION 4.03. Covenants................................................................................. 15 SECTION 4.04. Other Actions............................................................................. 18 SECTION 4.05. Covenants Regarding Patent, Trademark and Copyright Collateral............................ 20


ARTICLE V


Remedies


SECTION 5.01. Remedies Upon Default..................................................................... 22 SECTION 5.02. Application of Proceeds................................................................... 24 SECTION 5.03. Grant of License to Use Intellectual Property............................................. 24 SECTION 5.04. Securities Act............................................................................ 25 SECTION 5.05. Registration.............................................................................. 26


ARTICLE VI


Indemnity, Subrogation and Subordination


SECTION 6.01. Indemnity and Subrogation................................................................. 26 SECTION 6.02. Contribution and Subrogation.............................................................. 27 SECTION 6.03. Subordination............................................................................. 27


ARTICLE VII


Miscellaneous


SECTION 7.01. Notices................................................................................... 27 SECTION 7.02. Waivers; Amendment........................................................................ 27 SECTION 7.03. Administrative Agent's Fees and Expenses; Indemnification................................. 28 SECTION 7.04. Successors and Assigns.................................................................... 29


SECTION 7.05. Survival of Agreement..................................................................... 29 SECTION 7.06. Counterparts; Effectiveness; Several Agreement............................................ 29 SECTION 7.07. Severability.............................................................................. 29 SECTION 7.08. Right of Set-Off.......................................................................... 30 SECTION 7.09. Governing Law; Jurisdiction; Consent to Service of Process................................ 30 SECTION 7.10. WAIVER OF JURY TRIAL...................................................................... 31 SECTION 7.11. Headings.................................................................................. 31 SECTION 7.12. Security Interest Absolute................................................................ 31 SECTION 7.13. Termination or Release.................................................................... 31 SECTION 7.14. Additional Subsidiaries................................................................... 32 SECTION 7.15. Administrative Agent Appointed Attorney-in-Fact........................................... 32


Schedules


Schedule I -- Subsidiary Parties Schedule II -- Pledged Stock; Pledged Debt Securities Schedule III -- Intellectual Property Schedule IV -- Insurance Requirements


Exhibits


Exhibit I -- Form of Supplement Exhibit II -- Form of Perfection Certificate


GUARANTEE AND COLLATERAL AGREEMENT dated as
of August 7, 2003, among EAGLEPICHER HOLDINGS, INC.,
EAGLEPICHER INCORPORATED, the Subsidiaries of
EAGLEPICHER INCORPORATED identified herein and HARRIS
TRUST AND SAVINGS BANK, as Administrative Agent.


Reference is made to the Credit Agreement dated as of August 7, 2003 (as amended, supplemented or otherwise modified from time to time, the "Credit Agreement"), among EAGLEPICHER HOLDINGS, INC. ("Holdings"), EAGLEPICHER INCORPORATED (the "Borrower"), the Lenders party thereto and HARRIS TRust AND Savings Bank, as Administrative Agent. The Lenders have agreed to extend credit to the Borrower subject to the terms and conditions set forth in the Credit Agreement. The obligations of the Lenders to extend such credit are conditioned upon, among other things, the execution and delivery of this Agreement. Holdings and the Subsidiary Parties are Affiliates of the Borrower, will derive substantial benefits from the extension of credit to the Borrower pursuant to the Credit Agreement and are willing to execute and deliver this Agreement in order to induce the Lenders to extend such credit. Accordingly, the parties hereto agree as follows:


ARTICLE I


Definitions


SECTION 1.01. Credit Agreement. (a) Capitalized terms used in this Agreement and not otherwise defined herein have the meanings specified in the Credit Agreement. All terms defined in the New York UCC (as defined herein) and not defined in this Agreement have the meanings specified therein; the term "instrument" shall have the meaning specified in Article 9 of the New York UCC.


(b) The rules of construction specified in Section 1.03 of the Credit Agreement also apply to this Agreement.


SECTION 1.02. Other Defined Terms. As used in this Agreement, the following terms have the meanings specified below:


"Account Debtor" means any Person who is or becomes obligated to any Grantor under, with respect to or on account of an Account.


"Article 9 Collateral" has the meaning assigned to such term in Section 4.01.


"Collateral" means Article 9 Collateral and Pledged Collateral.


"Copyright License" means any written agreement, now or hereafter in effect, granting any right to any third party under any copyright now or hereafter owned by any Grantor or that such Grantor otherwise has the right to license, or granting any


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right to any Grantor under any copyright now or hereafter owned by any third party, and all rights of such Grantor under any such agreement.


"Copyrights" means all of the following now owned or hereafter acquired by any Grantor: (a) all copyright rights in any work subject to the copyright laws of the United States or any other country, whether as author, assignee, transferee or otherwise, and (b) all registrations and applications for registration of any such copyright in the United States or any other country, including registrations, recordings, supplemental registrations and pending applications for registration in the United States Copyright Office, including those listed on Schedule III.


"Credit Agreement" has the meaning assigned to such term in the preliminary statement of this Agreement.


"Federal Securities Laws" has the meaning assigned to such term in Section 5.04.


"General Intangibles" means all choses in action and causes of action and all other intangible personal property of every kind and nature (other than Accounts) now owned or hereafter acquired by any Grantor, including corporate or other business records, indemnification claims, contract rights (including rights under leases, whether entered into as lessor or lessee, Swap Agreements and other agreements), Intellectual Property, goodwill, registrations, franchises, tax refund claims and any letter of credit, guarantee, claim, security interest or other security held by or granted to any Grantor to secure payment by an Account Debtor of any of the Accounts.


"Grantors" means Holdings, the Borrower and the Subsidiary Parties.


"Guarantors" means Holdings and the Subsidiary Parties.


"Intellectual Property" means all intellectual and similar property of every kind and nature now owned or hereafter acquired by any Grantor, including inventions, designs, Patents, Copyrights, Licenses, Trademarks, trade secrets, confidential or proprietary technical and business information, know-how, show-how or other data or information, software and databases and all embodiments or fixations thereof and related documentation, registrations and franchises, and all additions, improvements and accessions to, and books and records describing or used in connection with, any of the foregoing.


"License" means any Patent License, Trademark License, Copyright License or other license or sublicense agreement to which any Grantor is a party, including those listed on Schedule III.


"Loan Document Obligations" means (a) the due and punctual payment by the Borrower of (i) the principal of and interest (including interest accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding) on the Loans, when and as due, whether at maturity, by acceleration, upon one or more dates set for prepayment


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or otherwise, (ii) each payment required to be made by the Borrower under the Credit Agreement in respect of any Letter of Credit, when and as due, including payments in respect of reimbursement of disbursements, interest thereon and obligations to provide cash collateral and (iii) all other monetary obligations of the Borrower to any of the Secured Parties under the Credit Agreement and each of the other Loan Documents, including obligations to pay fees, expense reimbursement obligations and indemnification obligations, whether primary, secondary, direct, contingent, fixed or otherwise (including monetary obligations accrued during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), (b) the due and punctual performance of all other obligations of the Borrower under or pursuant to the Credit Agreement and each of the other Loan Documents and (c) the due and punctual payment and performance of all the obligations of each other Loan Party under or pursuant to this Agreement and each of the other Loan Documents.


"New York UCC" means the Uniform Commercial Code as from time to time in effect in the State of New York.


"Obligations" means the (a) Loan Document Obligations and (b) due and punctual payment and performance of all obligations of each Loan Party under each Swap Agreement that (i) is in effect on the Effective Date with a counterparty that is a Lender or an Affiliate of a Lender as of the Effective Date or (ii) is entered into after the Effective Date with any counterparty that is a Lender or an Affiliate of a Lender at the time such Swap Agreement is entered into.


"Patent License" means any written agreement, now or hereafter in effect, granting to any third party any right to make, use or sell any invention on which a patent, now or hereafter owned by any Grantor or that any Grantor otherwise has the right to license, is in existence, or granting to any Grantor any right to make, use or sell any invention on which a patent, now or hereafter owned by any third party, is in existence, and all rights of any Grantor under any such agreement.


"Patents" means all of the following now owned or hereafter acquired by any Grantor: (a) all letters patent of the United States or the equivalent thereof in any other country, all registrations and recordings thereof, and all applications for letters patent of the United States or the equivalent thereof in any other country, including registrations, recordings and pending applications in the United States Patent and Trademark Office or any similar offices in any other country, including those listed on Schedule III, and (b) all reissues, continuations, divisions, continuations-in-part, renewals or extensions thereof, and the inventions disclosed or claimed therein, including the right to make, use and/or sell the inventions disclosed or claimed therein.


"Pledged Collateral" has the meaning assigned to such term in Section 3.01.


"Pledged Debt Securities" has the meaning assigned to such term in Section 3.01.


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"Pledged Securities" means any promissory notes, stock certificates, membership interests or other securities now or hereafter included in the Pledged Collateral, including all certificates, instruments or other documents representing or evidencing any Pledged Collateral.


"Pledged Stock" has the meaning assigned to such term in Section 3.01.


"Proceeds" has the meaning specified in Section 9-102 of the New York UCC.


"Receivable" means an Account owing to the Borrower or any Subsidiary (before its transfer to the Receivables Subsidiary), whether now existing or hereafter arising, together with all cash collections and other cash proceeds in respect of such Account, including all yield, finance charges or other related amounts accruing in respect thereof.


"Related Security" means, with respect to any Receivable:


(a) all of the Borrower's or the applicable Subsidiary's right, title and interest in and to any goods, the sale of which gave rise to such Receivable;


(b) all security pledged, assigned, hypothecated or granted to or held by the Borrower or the applicable Subsidiary to secure such Receivable;


(c) all guaranties, endorsements and indemnifications on, or of, any Receivable or any of the foregoing (other than by the Borrower or any Subsidiary that is not a Receivables Subsidiary);


(d) all powers of attorney for the execution of any evidence of indebtedness or security or other writing in connection therewith;


(e) all books, records, ledger cards and invoices related to such Receivable or any of the foregoing, whether maintained electronically, in paper form or otherwise;


(f) all evidences of the filing of financing statements and other statements and the registration of other instruments in connection therewith and amendments thereto, notices to other creditors or secured parties, and certificates from filing or other registration officers;


(g) all credit information, reports and memoranda relating thereto;


(h) all other writings related thereto; and


(i) all proceeds of any of the foregoing.


"Secured Parties" means (a) the Lenders, (b) the Administrative Agent, (c) the Issuing Bank, (d) each counterparty to any Swap Agreement with a Loan Party the obligations under which constitute Obligations, (e) the beneficiaries of each


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indemnification obligation undertaken by any Loan Party under any Loan Document and (f) the successors and assigns of each of the foregoing.


"Security Interest" has the meaning assigned to such term in Section 4.01.


"Subsidiary Parties" means (a) the Subsidiaries identified on Schedule I and (b) each other Subsidiary that becomes a party to this Agreement as a Subsidiary Party after the Effective Date.


"Trademark License" means any written agreement, now or hereafter in effect, granting to any third party any right to use any trademark now or hereafter owned by any Grantor or that any Grantor otherwise has the right to license, or granting to any Grantor any right to use any trademark now or hereafter owned by any third party, and all rights of any Grantor under any such agreement.


"Trademarks" means all of the following now owned or hereafter acquired by any Grantor: (a) all trademarks, service marks, trade names, corporate names, company names, business names, fictitious business names, trade styles, trade dress, logos, other source or business identifiers, designs and general intangibles of like nature, now existing or hereafter adopted or acquired, all registrations and recordings thereof, and all registration and recording applications filed in connection therewith, including registrations and registration applications in the United States Patent and Trademark Office or any similar offices in any State of the United States or any other country or any political subdivision thereof, and all extensions or renewals thereof, including those listed on Schedule III, (b) all goodwill associated therewith or symbolized thereby and (c) all other assets, rights and interests that uniquely reflect or embody such goodwill.


ARTICLE II


Guarantee


SECTION 2.01. Guarantee. Each Guarantor unconditionally guarantees, jointly with the other Guarantors and severally, as a primary obligor and not merely as a surety, the due and punctual payment and performance of the Obligations. Each of the Guarantors further agrees that the Obligations may be extended or renewed, in whole or in part, without notice to or further assent from it, and that it will remain bound upon its guarantee notwithstanding any extension or renewal of any Obligation. Each of the Guarantors waives presentment to, demand of payment from and protest to the Borrower or any other Loan Party of any of the Obligations, and also waives notice of acceptance of its guarantee and notice of protest for nonpayment.


SECTION 2.02. Guarantee of Payment. Each of the Guarantors further agrees that its guarantee hereunder constitutes a guarantee of payment when due and not of collection, and waives any right to require that any resort be had by the Administrative Agent or any other Secured Party to any security held for the payment of the Obligations or to any balance of any deposit account or credit on the books of the Administrative Agent or any other Secured Party in favor of the Borrower or any other Person.


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SECTION 2.03. No Limitations. (a) Except for termination of a Guarantor's obligations hereunder as expressly provided in Section 7.13, the obligations of each Guarantor hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any defense or set-off, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality or unenforceability of the Obligations or otherwise. Without limiting the generality of the foregoing, the obligations of each Guarantor hereunder shall not be discharged or impaired or otherwise affected by (i) the failure of the Administrative Agent or any other Secured Party to assert any claim or demand or to enforce any right or remedy under the provisions of any Loan Document or otherwise, (ii) any rescission, waiver, amendment or modification of, or any release from any of the terms or provisions of, any Loan Document or any other agreement, including with respect to any other Guarantor under this Agreement, (iii) the release of any security held by the Administrative Agent or any other Secured Party for the Obligations or any of them, (iv) any default, failure or delay, wilful or otherwise, in the performance of the Obligations or (v) any other act or omission that may or might in any manner or to any extent vary the risk of any Guarantor or otherwise operate as a discharge of any Guarantor as a matter of law or equity (other than the indefeasible payment in full in cash of all the Obligations). Each Guarantor expressly authorizes the Secured Parties to take and hold security for the payment and performance of the Obligations, to exchange, waive or release any or all such security (with or without consideration), to enforce or apply such security and direct the order and manner of any sale thereof in their sole discretion or to release or substitute any one or more other guarantors or obligors upon or in respect of the Obligations, all without affecting the obligations of any Guarantor hereunder.


(b) To the fullest extent permitted by applicable law, each Guarantor waives any defense based on or arising out of any defense of the Borrower or any other Loan Party or the unenforceability of the Obligations or any part thereof from any cause, or the cessation from any cause of the liability of the Borrower or any other Loan Party, other than the indefeasible payment in full in cash of all the Obligations. The Administrative Agent and the other Secured Parties may, at their election, foreclose on any security held by one or more of them by one or more judicial or nonjudicial sales, accept an assignment of any such security in lieu of foreclosure, compromise or adjust any part of the Obligations, make any other accommodation with the Borrower or any other Loan Party or exercise any other right or remedy available to them against the Borrower or any other Loan Party, without affecting or impairing in any way the liability of any Guarantor hereunder except to the extent the Obligations have been fully and indefeasibly paid in full in cash. To the fullest extent permitted by applicable law, each Guarantor waives any defense arising out of any such election even though such election operates, pursuant to applicable law, to impair or to extinguish any right of reimbursement or subrogation or other right or remedy of such Guarantor against the Borrower or any other Loan Party, as the case may be, or any security.


SECTION 2.04. Reinstatement. Each of the Guarantors agrees that its guarantee hereunder shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of any Obligation is rescinded or must


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otherwise be restored by the Administrative Agent or any other Secured Party upon the bankruptcy or reorganization of the Borrower, any other Loan Party or otherwise.


SECTION 2.05. Agreement To Pay; Subrogation. In furtherance of the foregoing and not in limitation of any other right that the Administrative Agent or any other Secured Party has at law or in equity against any Guarantor by virtue hereof, upon the failure of the Borrower or any other Loan Party to pay any Obligation when and as the same shall become due, whether at maturity, by acceleration, after notice of prepayment or otherwise, each Guarantor hereby promises to and will forthwith pay, or cause to be paid, to the Administrative Agent for distribution to the applicable Secured Parties in cash the amount of such unpaid Obligation. Upon payment by any Guarantor of any sums to the Administrative Agent as provided above, all rights of such Guarantor against the Borrower or any other Loan Party arising as a result thereof by way of right of subrogation, contribution, reimbursement, indemnity or otherwise shall in all respects be subject to Article VI.


SECTION 2.06. Information. Each Guarantor assumes all responsibility for being and keeping itself informed of the Borrower's and each other Loan Party's financial condition and assets, and of all other circumstances bearing upon the risk of nonpayment of the Obligations and the nature, scope and extent of the risks that such Guarantor assumes and incurs hereunder, and agrees that none of the Administrative Agent or the other Secured Parties will have any duty to advise such Guarantor of information known to it or any of them regarding such circumstances or risks.


ARTICLE III


Pledge of Securities


SECTION 3.01. Pledge. As security for the payment or performance, as the case may be, in full of the Obligations, each Grantor hereby assigns and pledges to the Administrative Agent, its successors and assigns, for the ratable benefit of the Secured Parties, and hereby grants to the Administrative Agent, its successors and assigns, for the ratable benefit of the Secured Parties, a security interest i ...