Charge over Shares Agreement/Wilmington Trust

EX-10.52 4 g85427exv10w52.txt CHARGE OVER SHARES AGREEMENT/WILMINGTON TRUST EXHIBIT 10.52 DATED 16 October 2003 JACUZZI BRANDS, INC. and WILMINGTON TRUST COMPANY ---------------------------- CHARGE OVER SHARES ---------------------------- Slaughter and May One Bunhill Row London EC1Y 8YY AGR/MDSC 2 CONTENTS Page ---- 1. Interpretation 4 2. Covenant to Pay 6 3. Charge 6 4. Relationship with Senior Share Charge 7 5. Further Assurances 7 6. Trust for the Secured Parties 7 7. Chargor's Rights before Enforcement 7 8. Covenants 8 9. Enforcement 8 10. Dealings with Charged Property on Enforcement 8 11. Application of Moneys 10 12. General Rights of Security Trustee 10 13. Liability of Security Trustee, Delegates and Nominees 11 14. Protection of Third Parties 11 15. Continuing Security 12 16. Other Security 12 17. Charge not to be Affected 12 18. Release of Charged Property 13 19. Power of Attorney 13 20. Stamp Duty 14 21. Communications 14 22. Rights and Waivers 15 3 23. Invalidity 15 24. Assignment by Security Trustee 16 25. Contracts (Rights of Third Parties) Act 1999 16 26. Governing Law, Jurisdiction and Agents for Service 16 SCHEDULE 1 18 4 THIS CHARGE OVER SHARES dated 16 October 2003 is made as a deed BETWEEN 1. JACUZZI BRANDS, INC., a company incorporated under the laws of the State of Delaware, United States of America (the "CHARGOR") AND 2. WILMINGTON TRUST COMPANY, of Rodney Square North, 1100 North Market Street, Wilmington, DE19890 not in its individual capacity but solely in its capacity as Security Trustee (the "SECURITY TRUSTEE", which expression includes its successors in title and assigns). NOW THIS DEED WITNESSES as follows:- 1. INTERPRETATION 1.1 TERMS ALREADY DEFINED Except to the extent the context otherwise requires or to the extent specifically defined in this deed, words and expressions defined in the Indenture shall have the same meaning when used in this deed. 1.2 DEFINITIONS In this deed:- "ADMINISTRATION" means administration under Part II of the Insolvency Act 1986. "BUSINESS DAY" means a day (other than a Saturday or a Sunday) on which banks are open for business in New York. "CHARGE" means all or any of the Security created, or which may at any time be created, by or pursuant to this deed. "CHARGED PROPERTY" means the Original Shares, any Further Shares, any Derived Assets and any Dividends. "DELEGATE" means a delegate or sub-delegate appointed pursuant to clause 12.3. "DERIVED ASSETS" means all Shares, rights or other property of a capital nature which accrue or are offered, issued or paid at any time (by way of bonus, rights, redemption, conversion, exchange, substitution, consolidation, subdivision, preference, warrant, option, purchase or otherwise) in respect of:- (A) the Original Shares; or 5 (B) any Further Shares; or (C) any Shares, rights or other property previously accruing, offered, issued or paid as mentioned in this definition. "DISSOLUTION" of a person includes the bankruptcy, insolvency, liquidation, amalgamation, reconstruction, reorganisation, Administration, administrative or other receivership, or dissolution of that person, and any equivalent or analogous proceeding by whatever name known and in whatever jurisdiction, and any step taken (including, but without limitation, the presentation of a petition or the passing of a resolution) for or with a view to any of the foregoing. "DIVIDENDS" means all dividends, interest and other income paid or payable in respect of the Original Shares, any Further Shares or any Derived Assets. "FURTHER SHARES" means all Shares (other than the Original Shares and any Shares comprised in any Derived Assets) which the Chargor and the Security Trustee may at any time agree shall be subject to the Charge. "INDENTURE" means the Indenture dated 15th July 2003 made between, amongst others, Jacuzzi Brands, Inc. and Wilmington Trust Company. "INTERCREDITOR AGREEMENT" means the intercreditor agreement dated 15th July 2003 between, amongst others, Fleet Capital Corporation, Wilmington Trust Corporation and Jacuzzi Brands, Inc. "LPA" means the Law of Property Act 1925. "ORIGINAL SHARES" means the Shares listed in schedule 1. "RIGHTS" means rights, benefits, powers, privileges, authorities, discretions and remedies (in each case, of any nature whatsoever). "SECURITY" includes any mortgage, fixed or floating charge, encumbrance, lien, pledge, hypothecation, assignment by way of security, or title retention arrangement (other than in respect of goods purchased in the ordinary course of trading), and any agreement or arrangement having substantially the same economic or financial effect as any of the foregoing (including any "hold back" or "flawed asset" arrangement). "SENIOR SHARE CHARGE" means the deed of charge dated on or about the date hereof granted by the Chargor in favour of Fleet Capital Corporation. "SHARES" means stocks, shares and other securities of any kind. "TAX" includes any present or future tax, levy, impost, duty, charge, fee, deduction or withholding of any nature, and any interest or penalty in respect thereof. "WORKING HOURS" means 9.00 a.m. to 5.00 p.m. on a Business Day. 6 1.3 REFERENCES AND CONSTRUCTION (A) In this deed, unless otherwise specified:- (i) references to clauses and schedules are to clauses of and schedules to this deed; (ii) headings to clauses are for convenience only and are to be ignored in construing this deed; (iii) references to a "person" are to be construed so as to include any individual, firm, company, government, state or agency of a state, local or municipal authority, or any joint venture, association or partnership (whether or not having separate legal personality); (iv) references to a "company" are to be construed so as to include any company, corporation or other body corporate, wherever and however incorporated or established; (v) references to any statute or statutory provision are to be construed as a reference to the same as it may have been, or may from time to time be, amended, modified or re-enacted, and include references to all bye-laws, instruments, orders and regulations for the time being made thereunder or deriving validity therefrom; and (vi) references to times of the day are to London time. (B) Except to the extent that the context otherwise requires, any reference in this deed to "THIS DEED" or any other deed, agreement or instrument is a reference to this deed or, as the case may be, the relevant deed, agreement or instrument as amended, supplemented, replaced or novated from time to time and includes a reference to any document which amends, supplements, replaces, novates or is entered into, made or given pursuant to or in accordance with any of the terms of this deed or, as the case may be, the relevant deed, agreement or instrument. 2. COVENANT TO PAY The Chargor covenants with the Security Trustee to pay and discharge all the Security Obligations at the time or times when, and in the currency or currencies in which, the same are expressed to be payable under the Indenture or, as the case may be, this deed. 3. CHARGE The Chargor, as continuing security for the payment and discharge of all the Security Obligations, charges all its Rights, title and interest in and to the Charged Property by 7 way of second fixed charge in favour of the Security Trustee for itself and as trustee for the Secured Parties. 4. RELATIONSHIP WITH SENIOR SHARE CHARGE The Security Trustee acknowledges that the Charge shall rank subsequent to the Security Interest created by the Senior Share Charge and that the provisions of this deed, including the rights and powers of the Security Trustee, shall in all respects be subject to the provisions of the Senior Share Charge and the Intercreditor Agreement. The Chargor shall not be obliged under this deed to take any action or refrain from taking any action which would conflict with: (A) its obligations under the Senior Share Charge or the Intercreditor Agreement; or (B) any action taken or which it has refrained from taking in performance of its obligations under the Senior Share Charge or the Intercreditor Agreement. 5. FURTHER ASSURANCES The Chargor shall, at its own cost, promptly execute and do all such deeds, instruments, transfers, renunciations, proxies, notices, documents, assurances, acts and things in such form as the Security Trustee may from time to time require:- (A) for perfecting, preserving or protecting the Charge or the priority of the Charge; and (B) for facilitating the realisation of the Charge or the exercise of any Rights vested in the Security Trustee. 6. TRUST FOR THE SECURED PARTIES The parties hereto agree that the Security Trustee shall hold the security constituted by, and created pursuant to, this deed together with all rights, benefits, interests, covenants, undertakings and warranties given in its favour hereunder, and the property from time to time representing the same, on trust for the Secured Parties upon and subject to the terms and conditions hereof and according to their respective interests. 7. CHARGOR'S RIGHTS BEFORE ENFORCEMENT Until the Charge shall become enforceable, the Chargor shall be entitled to:- (A) receive and retain free from the Charge any Dividends paid to it; and (B) exercise and control the exercise of all voting and other Rights relating to the Charged Property provided that the entitlement of the Chargor under this CLAUSE 7(B) may at any time be terminated upon and to the extent of any 8 notice by the Security Trustee to the Chargor evidencing the Security Trustee's intention thenceforth to direct the exercise of such Rights for the purpose of preserving the value of the Charge. 8. COVENANTS The Chargor shall not, except as permitted in the Indenture:- (A) create, attempt to create or permit to subsist any Security (other than the Charge or under the Senior Share Charge) on, over or with respect to any of the Charged Property; (B) sell, transfer, lend, assign, part with its interest in, dispose of, grant any option in respect of or otherwise deal with any of its Rights, title and interest in and to the Charged Property, or agree to do any of the foregoing (otherwise than pursuant to this deed or the Senior Share Charge). 9. ENFORCEMENT 9.1 CHARGE SHALL BECOME ENFORCEABLE The Charge shall become enforceable, and the powers conferred by section 101 of the LPA as varied and extended by this deed shall be exercisable, upon and at any time after the occurrence of an Event of Default. 9.2 SECTION 101 LPA The powers conferred by section 101 of the LPA, as varied and extended by this deed, shall be deemed to have arisen immediately on the execution of this deed. 9.3 SECTIONS 93 AND 103 LPA Sections 93 and 103 of the LPA shall not apply to this deed. 10. DEALINGS WITH CHARGED PROPERTY ON ENFORCEMENT 10.1 RIGHTS OF SECURITY TRUSTEE At any time after the Charge has become enforceable, the Security Trustee shall have the right, without any notice to or consent of the Chargor:- (A) Possession to take possession of, collect and get in the Charged Property, and in particular to take any steps necessary to vest all or any of the Charged Property in the name of the Security Trustee or its nominee (including completing any transfers of any Shares comprised in the Charged Property) and to receive and retain any Dividends; 9 (B) Sell to sell, exchange, convert into money or otherwise dispose of or realise the Charged Property (whether by public offer or private contract) to any person and for such consideration (whether comprising cash, debentures or other obligations, Shares or other valuable consideration of any kind) and on such terms (whether payable or deliverable in a lump sum or by instalments) as it may think fit, and for this purpose to complete any transfers of the Charged Property; (C) Voting Rights for the purpose of preserving the value of the Charge or realising the same, to exercise or direct the exercise of all voting and other Rights relating to the Charged Property in such manner as it may think fit; (D) Claims to settle, adjust, refer to arbitration, compromise and arrange any claims, accounts, disputes, questions and demands relating in any way to the Charged Property; (E) Legal actions to bring, prosecute, enforce, defend and abandon actions, suits and proceedings in relation to the Charged Property; and (F) Other Rights to do all such other acts and things it may consider necessary or expedient for the realisation of the Charged Property or incidental to the exercise of any of the Rights conferred on it under or in connection with this deed or the LPA and to concur in the doing of anything which it has the Right to do and to do any such thing jointly with any other person. 10.2 OBLIGATIONS OF CHARGOR After the Charge has become enforceable:- (A) all Dividends shall be paid to and retained by the Security Trustee, and any such moneys which may be received by the Chargor shall, pending such payment, be segregated from any other property of the Chargor and held in trust for the Security Trustee; and (B) the Chargor shall procure that all voting and other Rights relating to the Charged Property are exercised in accordance with such instructions (if any) as may from time to time be given to the Chargor by the Security Trustee, and the Chargor shall deliver to the Security Trustee such forms of proxy or other 10 appropriate forms of authorisation to enable the Security Trustee to exercise such voting and other Rights. 11. APPLICATION OF MONEYS All moneys arising from the exercise of the powers of enforcement under this deed shall (except as may be otherwise required by applicable law) be held and applied in the order of priority set out in the Indenture. 12. GENERAL RIGHTS OF SECURITY TRUSTEE 12.1 REDEMPTION OF SECURITY The Security Trustee may at any time redeem any Security over the Charged Property having priority to the Charge or procure the transfer thereof to the Security Trustee and may settle the accounts of encumbrancers. Any accounts so settled shall be conclusive and binding on the Chargor. The Chargor shall on demand pay to the Security Trustee all principal moneys, interest, costs, charges, losses, liabilities and expenses of and incidental to any such redemption or transfer. 12.2 NEW ACCOUNT At any time following: (A) the Security Trustee receiving notice (either actual or constructive) of any subsequent Security affecting the Charged Property or, (B) the Dissolution of the Chargor, the Security Trustee may open a new account in the name of the Chargor (whether or not it permits any existing account to continue). If the Security Trustee does not open such a new account, it shall nevertheless be treated as if it had done so at the time when the notice was received or was deemed to have been received or, as the case may be, the Dissolution commenced. Thereafter, all payments made by the Chargor to the Security Trustee or received by the Security Trustee for the account of the Chargor shall be credited or treated as having been credited to the new account and shall not operate to reduce the amount secured by this deed at the time when the Security Trustee received or was deemed to have received such notice or, as the case may be, the Dissolution commenced. 12.3 DELEGATION The Security Trustee may delegate in any manner to any person any of the Rights which are for the time being exercisable by the Security Trustee under this deed. Any such delegation may be made upon such terms and conditions (including power to sub-delegate) as the Security Trustee may think fit. 11 13. LIABILITY OF SECURITY TRUSTEE, DELEGATES AND NOMINEES 13.1 POSSESSION If the Security Trustee or any Delegate shall take possession of the Charged Property, it may at any time relinquish such possession. 13.2 SECURITY TRUSTEE'S LIABILITY The Security Trustee shall not in any circumstances (whether by reason of taking possession of the Charged Property or for any other reason whatsoever and whether as mortgagee in possession or on any other basis whatsoever):- (A) be liable to account to the Chargor or any other person for anything except the Security Trustee's own actual receipts; or (B) be liable to the Chargor or any other person for any costs, charges, losses, damages, liabilities or expenses arising from any realisation of the Charged Property or from any exercise or non-exercise by the Security Trustee of any Right conferred upon it in relation to the Charged Property or from any act, default, omission or misconduct of the Security Trustee, its officers, employees or Security Trustees in relation to the Charged Property except to the extent that they shall be caused by the Security Trustee's own fraud, negligence or wilful misconduct or that of its officers or employees. 13.3 DELEGATE'S AND NOMINEE'S LIABILITY All the provisions of CLAUSE 13.2 shall apply, mutatis mutandis, in respect of the liability of any Delegate or nominee of the Security Trustee or any officer, employee or agent of the Security Trustee, any Delegate or any nominee of the Security Trustee. 13.4 INDEMNITY The Security Trustee and every Delegate, attorney, manager, agent or other person appointed by the Security Trustee hereunder shall be entitled to be indemnified out of the Charged Property in respect of all liabilities and expenses incurred by any of them in the execution or purported execution of any of its Rights and against all actions, proceedings, costs, claims and demands in respect of any matter or thing done or omitted in any way relating to the Charged Property (except to the extent arising from the Security Trustee's gross negligence or wilful misconduct), and the Security Trustee and any such Delegate, attorney, manager, agent or other person appointed by the Security Trustee hereunder may retain and pay all sums in respect of the same out of any moneys received. 14. PROTECTION OF THIRD PARTIES No person dealing with the Security Trustee or any Delegate shall be concerned to enquire whether any event has happened upon which any of the Rights conferred 12 under or in connection with this deed or the LPA are or may be exercisable, whether any consents, regulations, restrictions or directions relating to such Rights have been obtained or complied with or otherwise as to the propriety or regularity of acts purporting or intended to be in exercise of any such Rights or as to the application of any money borrowed or raised or other proceeds of enforcement. All the protections to purchasers contained in sections 104 and 107 of the LPA or in any other legislation for the time being in force shall apply to any person purchasing from or dealing with the Security Trustee or any Delegate. 15. CONTINUING SECURITY The Charge shall be a continuing security for the Security Obligations and shall not be satisfied, discharged or affected by any intermediate payment or settlement of account (whether or not any Security Obligations remain outstanding thereafter) or any other matter or thing whatsoever. 16. OTHER SECURITY The Charge shall be in addition to and shall not be prejudiced by any other Security or any guarantee or indemnity or other document which the Security Trustee may at any time hold for the payment of the Security Obligations. 17. CHARGE NOT TO BE AFFECTED Without prejudice to CLAUSES 15 AND 16, neither the Charge nor the liability of the Chargor for the Security Obligations shall be prejudiced or affected by:- (A) any variation or amendment of, or waiver or release granted under or in connection with, any other Security or any guarantee or indemnity or other document; or (B) time being given, or any other indulgence or concession being granted, by the Security Trustee to the Chargor or any other person; or (C) the taking, holding, failure to take or hold, varying, realisation, non-enforcement, non-perfection or release by the Security Trustee or any other person of any other Security, or any guarantee or indemnity or other document; or (D) the Dissolution of the Chargor or any other person; or (E) any change in the constitution of the Chargor; or (F) any amalgamation, merger or reconstruction that may be effected by the Security Trustee with any other person or any sale or transfer of the whole or any part of the undertaking, property and assets of the Security Trustee to any other person; or 13 (G) the making or absence of any demand for payment of any Security Obligations on the Chargor or any other person, whether by the Security Trustee or any other person; or (H) any arrangement or compromise entered into by the Security Trustee with the Chargor or any other person. 18. RELEASE OF CHARGED PROPERTY If the Security Trustee is satisfied that:- (A) all the Security Obligations have been paid or discharged in full and the Indenture has been terminated; or (B) Security or a guarantee for the Security Obligations, in each case acceptable to the Security Trustee, has been provided in substitution for this deed, or in any of the circumstances referred to in section 11.04 of the Indenture, the Security Trustee shall at the request and cost of the Chargor execute such deeds and do all such acts and things as may be necessary to release the Charged Property (or the relevant part thereof) from the Charge. 19. POWER OF ATTORNEY 19.1 APPOINTMENT The Chargor hereby appoints, irrevocably and by way of security, the Security Trustee and any person nominated in writing by the Security Trustee as attorney of the Chargor severally to be the attorney of the Chargor (with full powers of substitution and delegation), on its behalf and in its name or otherwise, at such time and in such manner as the attorney may think fit:- (A) to do anything which the Chargor is or may be obliged to do (but has not done) under this deed including, but without limitation, to complete and execute any transfer of Shares; and (B) generally to exercise all or any of the Rights conferred on the Security Trustee in relation to the Charged Property or under or in connection with this deed or the LPA. 19.2 RATIFICATION The Chargor covenants to ratify and confirm whatever any attorney shall do or purport to do in the exercise or purported exercise of the power of attorney in CLAUSE 19.1. 14 20. STAMP DUTY The Chargor shall pay promptly, and in any event before any penalty becomes payable, all stamp, documentary and similar Taxes, if any, payable in connection with the entry into, performance, enforcement or admissibility in evidence of this deed or any other document referred to in this deed, and shall indemnify the Security Trustee against any liability with respect to, or resulting from any delay in paying or omission to pay, any such Tax. 21. COMMUNICATIONS 21.1 COMMUNICATIONS TO BE IN WRITING Any communication given or made under or in connection with the matters contemplated by this deed shall be in writing (other than writing on the screen of a visual display unit or other similar device which shall not be treated as writing for the purposes of this CLAUSE 21.1). 21.2 DEEMED DELIVERY Any such communication shall be addressed as provided in CLAUSE 21.3 and, if so addressed, shall be deemed to have been duly given or made as follows:- (A) if sent by personal delivery, upon delivery at the address of the relevant party; (B) if sent by first class post, two Business Days after the date of posting; (C) if sent by fax, upon receipt by the relevant party, provided that if, in accordance with the above provisions, any such communication would otherwise be deemed to be given or made outside Working Hours, such communication shall be deemed to be given or made at the start of the next period of Working Hours. 21.3 PARTIES' DETAILS The relevant details of each party for the purposes of this deed, subject to CLAUSE 21.4, are:-

21.4 CHANGE OF DETAILS Either party may notify the other party at any time of a change to its details for the purposes of CLAUSE 21.3 provided that such notification shall only be effective on:- (A) the date specified in the notification as the date on which the change is to take place; or (B) if no date is specified or the date specified is less than five Business Days after the date on which notice is given, the date falling five Business Days after notice of any such change has been given. 22. RIGHTS AND WAIVERS 22.1 DELAY No delay or omission on the part of the Security Trustee in exercising any Right provided by law or under this deed shall impair such Right or operate as a waiver thereof or of any other Right. 22.2 SINGLE OR PARTIAL EXERCISE The single or partial exercise by the Security Trustee of any Right provided by law or under this deed shall not preclude any other or further exercise thereof or the exercise of any other Right. 22.3 RIGHTS TO BE CUMULATIVE The Rights provided in this deed are cumulative with, and not exclusive of, any Rights provided by law. 23. INVALIDITY If at any time any provision of this deed is or becomes illegal, invalid or unenforceable in any respect under the law of any jurisdiction, neither:- (A) the legality, validity or enforceability in that jurisdiction of any other provision of this deed; nor 16 (B) the legality, validity or enforceability under the law of any other jurisdiction of that or any other provision of this deed, shall be affected or impaired. 24. ASSIGNMENT BY SECURITY TRUSTEE The Security Trustee may at any time, without the consent of the Chargor, assign or transfer the whole or, as the case may be, any part of the Security Trustee's Rights under this deed to any person to whom the whole or any part of any of the Security Trustee's rights under the Indenture shall be assigned or transferred. 25. CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999 The parties to this agreement do not intend that any term of this agreement should be enforceable, by virtue of the Contracts (Rights of Third Parties) Act 1999, by any person who is not a party to this agreement. 26. GOVERNING LAW, JURISDICTION AND AGENTS FOR SERVICE 26.1 GOVERNING LAW This deed shall be governed by and construed in accordance with English law. 26.2 JURISDICTION The parties irrevocably agree that any legal action or proceeding arising out of or relating to this deed may be brought in the courts of England and irrevocably submit to the non-exclusive jurisdiction of such courts. 26.3 CHARGOR'S AGENT FOR SERVICE The Chargor irrevocably appoints USI Overseas Holdings Limited at its registered office in 2 Lambs Passage, London EC1Y 8BB, England as its agent to receive and acknowledge on its behalf service of any writ, summons, order, judgment or other notice of legal process in England. If for any reason the agent named above (or its successor) no longer serves as agent of the Chargor for this purpose, the Chargor shall promptly appoint a successor agent reasonably satisfactory to the Security Trustee and notify the Security Trustee thereof, PROVIDED that until the Security Trustee receives such notification, it shall be entitled to treat the agent named above (or its said successor) as the agent of the Chargor for the purposes of this Clause. The Chargor agrees that any such legal process shall be sufficiently served on it if delivered to such agent for service at its address for the time being in England whether or not such agent gives notice thereof to the Chargor. 26.4 SECURITY TRUSTEE'S AGENT FOR SERVICE 17 The Security Trustee irrevocably appoints Law Debenture Corporate Services Limited of Fifth Floor, 100 Wood Street, London EC2V 7EX, England as its agent to receive and acknowledge on its behalf service of any writ, summons, order, judgment or other notice of legal process in England. If for any reason the agent named above (or its successor) no longer serves as agent of the Security Trustee for this purpose, the Security Trustee shall promptly appoint a successor agent reasonably satisfactory to the Chargor and notify the Chargor thereof, PROVIDED that until the Chargor receives such notification, it shall be entitled to treat the agent named above (or its said successor) as the agent of the Security Trustee for the purposes of this Clause. The Security Trustee agrees that any such legal process shall be sufficiently served on it if delivered to such agent for service at its address for the time being in England whether or not such agent gives notice thereof to the Security Trustee. IN WITNESS WHEREOF the Chargor and the Security Trustee have executed this document as a deed the day and year first before written. SCHEDULE 1

EXECUTED AS A DEED for and on behalf of JACUZZI BRANDS, INC. by its duly authorised signatory: /s/ Steven C. Barre .............................................. (authorised signatory) Sr. Vice President, General Counsel & Secretary EXECUTED AS A DEED for and on behalf of WILMINGTON TRUST COMPANY by its duly authorised signatory: /s/ Mary St. Amand .............................................. (authorised signatory) Assistant VP