Guarantee Agreement between SUEZ and Blackstone/Neptune Acquisition Company L.L.C. dated August 31, 2003

  EXHIBIT 10.3 GUARANTEE AGREEMENT GUARANTEE dated as of August 31, 2003 is made by SUEZ, a societe anonyme organized under the laws of the Republic of France ("GUARANTOR"), in favor of Blackstone/Neptune Acquisition Company L.L.C., a Delaware limited liability company ("BUYER"). WHEREAS, each of Leo Holding Company, a Delaware corporation ("LEO"), and Nalco International S.A.S., a societe par actions simplifiee organized under the laws of the Republic of France ("NIS" and, together with LEO, the "SELLERS" and each a "SELLER"), are indirect wholly-owned subsidiaries of Guarantor; and WHEREAS, the Sellers and Buyer have concurrently herewith entered into that certain Stock Purchase Agreement dated as of as the date hereof (the "STOCK PURCHASE AGREEMENT"; unless otherwise defined herein, capitalized terms used herein are used as defined in the Stock Purchase Agreement), which provides for, among other things, the acquisition by Buyer, and the sale by the Sellers, of the Shares; NOW, THEREFORE, in order to induce Buyer to enter into the Stock Purchase Agreement, Guarantor hereby issues and delivers to and for the benefit of Buyer this Guarantee (the "GUARANTEE"): 1. The Guarantee. Guarantor hereby unconditionally guarantees the full and punctual payment of all amounts which are or may become due and payable by any Seller under the Stock Purchase Agreement (the "GUARANTEED OBLIGATIONS"), including, but not limited to, payment of any amounts that may become due and payable by any Seller under Section 8.09 or Section 11.02 thereof. Upon failure by any Seller to pay punctually any Guaranteed Obligation, Guarantor shall pay the Guaranteed Obligation within five business days after demand therefor. This Guarantee is intended to constitute a guarantee of payment and performance and not merely a guarantee of collection and shall not be conditioned upon the pursuit of any remedies against any Seller. Any payment shall be in immediately available funds and at the place specified in the demand. 2. Guarantee Unconditional and Full Performance. The obligations of Guarantor pursuant hereunder shall be unconditional and absolute, and shall remain in full force and effect until all Guaranteed Obligations under the Stock Purchase Agreement have been performed in full. 3. Subrogation. Upon performance by Guarantor of any Guaranteed Obligation, Guarantor shall be subrogated to the rights of Buyer with respect to such Guaranteed Obligation.  4. Representations and Warranties. Guarantor represents and warrants to Buyer that: (a) Corporate Existence and Powers. Guarantor is a societe anonyme duly organized, validly existing and in good standing under the laws of the Republic of France. (b) Corporate Authorization. The execution, delivery and performance by Guarantor of this Guarantee are within Guarantor's corporate or other organizational powers and have been duly authorized by all necessary corporate or other organizational action on the part of Guarantor. This Guarantee constitutes a valid and binding agreement of Guarantor. (c) Governmental Authorization. The execution, delivery and performance by Guarantor of this Guarantee and the consummation of the transactions contemplated hereby require no action by or in respect of, or filing with, any governmental body, agency or official. (d) Noncontravention. The execution, delivery and performance by Guarantor of this Guarantee and the consummation of the transactions contemplated hereby do not and will not (i) violate the organizational documents of Guarantor or (ii) violate in any material respect any material applicable law, rule, regulation, judgment, injunction, order or decree. 5. Amendments and Waivers. Any provision of this Guarantee may be amended or waived if, but only if, such amendment or waiver is in writing and is signed by Buyer and Guarantor. 6. Successors and Assigns. This Guarantee shall be binding upon Guarantor and its successors and assigns. 7. Governing Law. This Guarantee shall be construed in accordance with and governed by the law of the State of New York. 8. Jurisdiction. The parties hereto agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement shall be brought in the United States District Court for the Southern District of New York or any New York State court sitting in New York City, so long as one of such courts shall have subject matter jurisdiction over such suit, action or proceeding, and that any cause of action arising out of this Agreement shall be deemed to have arisen from a transaction of business in the State of New York, and each of the parties hereby irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to  the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding which is brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court. [Signature Page to Follow]  IN WITNESS WHEREOF, the parties hereto have caused this Guarantee to be duly executed by their respective authorized officers as of the day and year first above written. SUEZ By: /s/ Michel Sirat -------------------------------------------- Name: Michel Sirat Title: Senior Vice President, Financial Operations, Treasury and Tax Agreed to and accepted by: BLACKSTONE/NEPTUNE ACQUISITION COMPANY, L.L.C. By: /s/ Chinh Chu -------------------------------------------- Name: Chinh Chu Title: President