EXHIBIT 4.18(a)
FIRST AMENDMENT TO REVOLVING CREDIT AGREEMENT
AND REVOLVER INTERCREDITOR AGREEMENT
THIS FIRST AMENDMENT TO REVOLVING CREDIT AGREEMENT AND REVOLVER
INTERCREDITOR AGREEMENT (this "Amendment"), dated as of August 17, 2001, is
among STERLING CHEMICALS, INC., a Delaware corporation (the "Company"), STERLING
CANADA, INC., a Delaware corporation ("Canada"), STERLING PULP CHEMICALS US,
INC., a Delaware corporation ("Pulp US"), STERLING PULP CHEMICALS, INC., a
Georgia corporation ("Pulp"), STERLING FIBERS, INC., a Delaware corporation
("Fibers"), STERLING CHEMICALS ENERGY, INC., a Delaware corporation ("Energy"),
and STERLING CHEMICALS INTERNATIONAL, INC., a Delaware corporation (together
with the Company, Canada, Pulp US, Pulp, Fibers and Energy, collectively, the
"Borrowers"), the several Lenders (as such term is defined in the hereinafter
described Credit Agreement) parties to this Amendment, and THE CIT
GROUP/BUSINESS CREDIT, INC., as Administrative Agent for the Lenders (in such
capacity, the "Administrative Agent").
RECITALS:
A. The Borrowers are parties to a Revolving Credit Agreement dated as
of July 19, 2001 (as the same may be amended, modified, restated, supplemented,
renewed, extended, increased, rearranged and/or substituted from time to time,
the "Credit Agreement") among the Borrowers, the Administrative Agent, and the
several Lenders from time to time parties thereto. Capitalized terms used and
not otherwise defined herein shall have the meanings ascribed to them in the
Credit Agreement.
B. Pursuant to the Credit Agreement, the Maturity Date will occur on
the thirtieth (30th) day after the date of the entry of the Interim Order unless
by such date (i) the Bankruptcy Court has entered an order or judgment, in form
and substance acceptable to Lenders and the Administrative Agent in their sole
discretion, approving, among other things, the granting of a senior and
first-priority, Priming Lien on all of the Fixed Assets Collateral (other than
the Capital Securities of the Company) to secure the repayment of up to
$40,000,000 of Current Assets Obligations, or (ii) the Maturity Date has
occurred or has been extended pursuant to Section 10.1(e)(i) of the Credit
Agreement.
C. The Borrowers have requested that the Lenders amend the Credit
Agreement to, among other things, extend the Maturity Date pursuant to Section
10.1(e)(i) of the Credit Agreement to allow additional time for the Bankruptcy
Court to consider the granting of a Priming Lien.
D. The Lenders parties to this Amendment (which Lenders constitute the
Lenders required to effect the amendments intended hereby) are willing to agree
to such amendment, subject to the performance and observance in full of each of
the covenants, terms and conditions, and in reliance upon all of the
representations and warranties of the Borrowers, set forth herein.
NOW, THEREFORE, in consideration of the premises and the covenants,
terms, conditions, representations and warranties herein contained, the parties
hereto agree hereby as follows:
SECTION 1. AMENDMENTS. Subject to the covenants, terms and conditions
set forth herein and in reliance upon the representations and warranties of the
Borrowers herein contained, the Borrowers and the several Lenders parties to
this Amendment (which Lenders constitute the Lenders required to effect the
following amendments) hereby agree to amend the Credit Agreement and the
Revolver Intercreditor Agreement as set forth below in this Section 1, in each
case effective as of the Amendment Effective Date (as hereinafter defined).
(a) AMENDMENTS TO CREDIT AGREEMENT DEFINITIONS.
(i) New Definitions. Section 1.01 of the Credit Agreement is
amended by inserting the following definition in the appropriate alphabetical
position:
"Priming Order" means an order or judgment of the
Bankruptcy Court after a final hearing pursuant to Section 364
of the Bankruptcy Code and Fed. R. Bankr. P. 4001, in form and
substance acceptable to Lenders and the Administrative Agent,
in their sole discretion, granting a senior and
first-priority, Priming Lien on all of the Fixed Assets
Collateral (other than the Capital Securities of the Company)
to secure the repayment of up to $40,000,000 of Current Assets
Obligations, which order or judgment of the Bankruptcy Court
has not been reversed, stayed or otherwise rendered
ineffective or modified in any manner, and if such order is
the subject of a pending appeal in any respect, neither the
making of any Credit Extensions, nor the granting of
Superpriority Claim status with respect to the Obligations,
nor the granting of the Priming Lien described hereinabove,
nor the performance by any of the Borrowers of any of their
obligations under this Agreement or any other Loan Document or
under any other instrument or agreement referred to in this
Agreement shall be the subject of a presently effective stay
pending appeal.
(ii) Amendments to Existing Definitions. Section 1.01 of the
Credit Agreement is amended by deleting the existing definitions of the terms
described in this Section 1(a)(ii) below in their entirety and inserting the
following definitions in lieu thereof:
"Borrowing Base Amount" means, at any time, an amount
equal to the sum of (without duplication) (a) 85% of Eligible
Accounts; plus (b) on and after the date which is the later to
occur of (i) the date of entry of the Priming Order and (ii)
the date the Borrowers have fully complied with the proviso to
clause (b) of Section 5.2.3, the lesser of (x) $10,000,000 and
(y) 33% of Generator Receivables; plus (c) 65% of Eligible
Inventory; provided, however, that the amount available
pursuant to clause (c) of this definition shall in no event
exceed (1) $42,500,000 during such period that the Current
Assets Loan Commitment Amount is equal to $85,000,000, (2)
$50,000,000 during such period that the Current Assets Loan
Commitment Amount is equal to $100,000,000 and (3) $62,500,000
during such period that the Current Assets Loan Commitment
Amount is equal to $125,000,000. The
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Administrative Agent shall have the right to review
computations of the Borrowing Base Amount and if, in its
reasonable judgment, such computations have not been computed
in accordance with the terms of this Agreement, the
Administrative Agent shall have the right to correct such
errors.
"Current Assets Loan Commitment Amount" means, on any
date, (a) prior to the date of entry of the Priming Order, a
maximum aggregate amount of $85,000,000, and subject to the
following sentence, (b) prior to the date the Borrowers have
fully complied with conditions set forth in the proviso to
clause (b) of Section 5.2.3, but after the date of entry of
the Priming Order, a maximum aggregate amount of $100,000,000,
and (c) on and after the date which is the later to occur of
(i) the date of entry of the Priming Order, and (ii) the date
the Borrowers have fully complied with the conditions set
forth in the proviso to clause (b) of Section 5.2.3, a maximum
aggregate amount of $125,000,000, in each case as such amounts
may be permanently reduced from time to time pursuant to
Section 2.2 and other provisions of this Agreement. Prior to
the date the Bankruptcy Court enters the Final Order, the
Current Assets Loan Commitment Amount (subject to reductions
pursuant to Section 2.2 and other provisions of this
Agreement) shall be an amount equal to the aggregate amount of
Current Asset Loans, Swing Line Loans and Letter of Credit
Obligations that are authorized by the Interim Order, not to
exceed $85,000,000.
"Final Order" means an order or judgment of the
Bankruptcy Court after a final hearing pursuant to Section 364
of the Bankruptcy Code and Fed. R. Bankr. P. 4001, approving
the transactions contemplated by the Loan Documents in form
and substance acceptable to Lenders and the Administrative
Agent, in their sole discretion, including (i) a finding in
favor of the Administrative Agent and the Lenders pursuant to
11 U.S.C. Section 364(e), (ii) the grant of a Superpriority
Claim in favor of the Administrative Agent and the Lenders
with respect to all of the Obligations, and (iii) granting
Liens in the Current Assets Collateral and the Fixed Assets
Collateral securing the Obligations as set forth in Section
7.1.8 and the other Loan Documents; and which order or
judgment of the Bankruptcy Court has not been reversed, stayed
or otherwise rendered ineffective or modified in any manner,
and if such order is the subject of a pending appeal in any
respect, neither the making of any Credit Extensions, nor the
granting of Superpriority Claim status with respect to the
Obligations, nor the granting of the Liens described
hereinabove, nor the performance by any of the Borrowers of
any of their obligations under this Agreement or any other
Loan Document or under any other instrument or agreement
referred to in this Agreement shall be the subject of a
presently effective stay pending appeal.
"Financing Order" means (a) prior to the date of
entry of the Final Order, the Interim Order, (b) at all times
after the date of entry thereof, the Final Order and, if
entered, the Priming Order.
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"Maturity Date" means the earliest to occur of (a)
August 30, 2001, if the Final Order has not been entered prior
to such date (unless the Maturity Date has been extended
pursuant to Section 10.1(e)(i) below), (b) the date on which
the Bankruptcy Court enters a final order denying approval of
the transactions contemplated in this Agreement (other than
the Priming Lien), and (c) the second anniversary of the
Effective Date of this Agreement (unless the Maturity Date has
been extended pursuant to Section 10.1(e)(i) below).
"Minimum Excess Availability" means, at any time, (a)
prior to the date which is the date of entry of the Priming
Order, $12,000,000, plus the amount of any Availability
Reserve (as adjusted from time to time pursuant to the terms
of the definition thereof and/or clause (e) of Section 2.7)
and (b) on and after the date of entry of the Priming Order,
the amount of any Availability Reserve (as adjusted from time
to time pursuant to the terms of the definition thereof and/or
clause (e) of Section 2.7).
"Priming Lien" means the security interest in and
Lien on the Fixed Assets Collateral (other than the Capital
Securities of the Company) granted, or to be granted, to the
Current Assets Secured Parties pursuant to the Priming Order
to secure up to $40,000,000 of the Current Assets Obligations
and which Lien and security interest is (or will be upon entry
of the Priming Order) a first-priority security interest in
and Lien on the Fixed Assets Collateral (other than the
Capital Securities of the Company), subject to no other prior
security interests or Liens other than Existing Leases and the
Priority Lien described in clause (c) of the definition
thereof.
"Priority Liens" means (a) with respect to Fixed
Assets Obligations, the Liens on the Current Assets Collateral
securing the Current Assets Obligations and, after the date of
entry of the Priming Order, the Priming Lien on the Fixed
Assets Collateral (other than the Capital Securities of the
Company); (b) with respect to Current Assets Obligations, (i)
for the period prior to (but not on or after) the date of
entry of the Priming Order, the Liens on (A) the Fixed Assets
and the Capital Securities of the Borrowers (other than the
Company) and the Subsidiaries (other than Unrestricted
Subsidiaries) securing the Fixed Assets Obligations and the
Senior Secured Notes, and (B) the Capital Securities of the
Company securing the Fixed Assets Obligations and the Senior
Secured Discount Notes, and (ii) on and after the date of
entry of the Priming Order, (A) with respect to any Current
Assets Obligations in excess of the amount of Current Assets
Obligations secured by the Priming Lien (but in all cases
excluding the amount of Current Assets Obligations secured by
the Priming Lien), the Liens on (x) Fixed Assets and Capital
Securities of the Borrowers (other than the Company) and the
Subsidiaries (other than Unrestricted Subsidiaries) securing
the Fixed Assets Obligations and the Senior Secured Notes and
(y) the Capital Securities of the Company securing the Fixed
Assets Obligations and the Senior Secured Discount Notes and
(B) with respect to any Current Assets Obligations secured by
the Priming Lien, the Liens on the Capital Securities of the
Company secured by the Fixed Assets Obligations and the
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Senior Secured Discount Notes; and (c) with respect to the
Obligations, the Lien granted under the agreement with BP
Chemicals, Inc. described in clause (b), Part 2, Item 7.2.3(c)
of the Disclosure Schedule.
(b) AMENDMENT TO RECITAL C OF THE CREDIT AGREEMENT. Recital C of the
Credit Agreement is deleted in its entirety and the following is inserted in
lieu thereof:
"C. The Borrowers have requested that the Lenders provide
debtor-in-possession financing in an aggregate principal
amount not to exceed $155,000,000; provided that in the event
the Priming Order is entered, then such principal amount shall
be increased by $15,000,000 to $170,000,000 and provided
further that if the Borrowers fully comply with the proviso to
clause (b) of Section 5.2.3, such principal amount shall be
increased by $25,000,000 to $195,000,000 (the "DIP
Financing"), the proceeds of which shall be used:
(i) to pay approximately $35,000,000 in principal of
Indebtedness outstanding under the Existing Credit Agreement
which is secured by the Current Assets (the "Existing Current
Asset Loans"), together with accrued interest, commitment fees
and letter of credit fees thereon;
(ii) to pay approximately $70,000,000 in principal of
Indebtedness outstanding under the Existing Credit Agreement
which is secured by the Fixed Assets and Capital Securities of
the Borrowers (the "Existing Fixed Asset Loans"), together
with accrued interest and fees thereon;
(iii) to provide for the continuance of the letters
of credit which were issued under the Existing Credit
Agreement and are still outstanding;
(iv) to pay fees and expenses associated with the DIP
Financing; and
(v) to provide for the ongoing working capital and
general corporate needs of the Borrowers."
(c) AMENDMENT TO RECITAL E OF THE CREDIT AGREEMENT. Recital E of the
Credit Agreement is deleted in its entirety and the following is inserted in
lieu thereof:
"E. To provide security for the repayment of the Credit
Extensions to be made hereunder and the payment of any other
Obligations, the Borrowers will provide to the Administrative
Agent and the Lenders the following (each as more fully
described herein):
(a) with respect to all Obligations of the Borrowers
hereunder and under the other Loan Documents, an
allowed administrative expense claim in each of the
Cases pursuant to Section 364(c) of the Bankruptcy
Code having priority over all administrative expenses
including the kinds specified in Sections 503(b),
507(b) and 546(c) of the Bankruptcy Code;
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(b) with respect to the Current Assets Obligations,
(i) prior to the date of entry of the Priming Order,
(A) a first-priority, perfected security interest in
and Lien on all right, title and interest of the
Borrowers in, to and under all of the Current Assets,
subject to no other prior security interests or Liens
and (B) a perfected security interest in and Lien on
(1) 100% of the Capital Securities of the Borrowers,
(2) 100% of the Capital Securities of the
Subsidiaries (other than Unrestricted Subsidiaries),
and (3) all right, title and interest of the
Borrowers in, to and under all of the Fixed Assets,
subject, in the case of the Collateral described in
clauses (B)(1), (B)(2) and (B)(3) hereinabove, only
to the then applicable Priority Liens and (ii) on and
after the date of entry of the Priming Order, the
Liens and priorities described in the foregoing
clause (i), plus the Priming Lien on the Fixed Assets
Collateral (other than the Capital Securities of the
Company) to secure the repayment of up to $40,000,000
of Current Assets Obligations; and
(c) with respect to the Fixed Asset Obligations, (i)
prior to the date of entry of the Priming Order, (A)
a first-priority, perfected security interest in and
Lien on all right, title and interest of the
Borrowers in, to and under all of the Fixed Assets,
100% of the Capital Securities of the Borrowers and
35% of the Capital Securities of the Subsidiaries
(other than Unrestricted Subsidiaries), subject to no
other prior security interests or Liens other than
Existing Leases and (B) a perfected security interest
in and Lien on all right, title and interest of the
Borrowers in, to and under all of the Current Assets
and 65% of the Capital Securities of the Subsidiaries
(other than Unrestricted Subsidiaries), subject, in
the case of the Collateral described in clause (B),
only to then applicable Priority Liens and (ii) on
and after the date of entry of the Priming Order, the
Liens and priorities described in the foregoing
clause (i), but in all cases subject to the Priming
Lien of the Current Assets Secured Parties."
(d) AMENDMENT TO SECTION 3.1.2 OF THE CREDIT AGREEMENT. Paragraph (b)
of Section 3.1.2. of the Credit Agreement is deleted in its entirety and the
following is inserted in lieu thereof:
"(b) Each prepayment of Obligations pursuant to clause (d) and
clause (f)(ii) of Section 3.1.1 shall be applied (i) in the
case of a Disposition of Fixed Assets Collateral (A) prior to
the date of entry of the Priming Order, to a mandatory
prepayment of the outstanding Fixed Assets Obligations until
all outstanding Fixed Assets Obligations have been repaid in
full and (B) on and after the date of entry of the Priming
Order, (1) first, to a mandatory prepayment of outstanding
Current Assets Obligations secured by the Priming Lien until
such outstanding Current Assets Obligations secured by the
Priming Lien have been repaid in full (or, with respect to
Letters of Credit, Cash Collateralized) and, (2) second, to a
mandatory prepayment of the outstanding Fixed Assets
Obligations until all outstanding Fixed Assets Obligations
have been repaid in full and, in each of the foregoing cases
set forth in clauses (A) and (B), immediately upon the
Administrative Agent's receipt of
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such Net Disposition Proceeds, (x) the Fixed Assets Loan
Commitment Amount shall be automatically and permanently
reduced by the aggregate amount of Net Disposition Proceeds
used to prepay the outstanding principal amount of such Fixed
Assets Obligations, plus any additional amount of Net
Disposition Proceeds relating to Fixed Assets Collateral which
remain after the outstanding amount of Fixed Assets
Obligations have been reduced to zero (provided that so long
as no Default or Event of Default then exists, the Fixed
Assets Loan Commitment Amount shall not be reduced by the
amount of any Net Disposition Proceeds from a casualty or
condemnation of Fixed Assets which are permitted to be used by
the Borrowers in connection with the restoration or
replacement of the affected assets in accordance with Section
2.3 of the Mortgages), and (y) after the date of entry of the
Priming Order, the Availability Reserve shall automatically be
increased by the amount of Net Disposition Proceeds (not to
exceed $40,000,000) relating to Fixed Assets Collateral which
remain after the outstanding amount of Fixed Assets
Obligations have been reduced to zero; and (ii) in the case of
a Disposition of Current Assets (other than Dispositions of
Capital Securities of Unrestricted Subsidiaries), (A) first,
to a mandatory prepayment of the outstanding Current Assets
Obligations until all outstanding Current Assets Obligations
have been repaid in full (or, with respect to Letters of
Credit, Cash Collateralized) and, (B) second, to a mandatory
prepayment of the outstanding Fixed Assets Obligations until
all outstanding Fixed Assets Obligations have been repaid in
full; and (iii) in the case of a Disposition of Capital
Securities of Unrestricted Subsidiaries or the receipt of Net
Equity Proceeds of the type described in clause (b) of the
definition thereof, to the Fixed Assets Obligations and the
Current Assets Obligations in the order designated by the
Company upon receipt of same by any Obligor, or if no such
designation is received by the Administrative Agent prior to
or upon receipt of such proceeds, then to the Obligations as
determined by the Administrative Agent."
(e) AMENDMENT TO SECTION 5.2.3. OF THE CREDIT AGREEMENT. Section 5.2.3.
of the Credit Agreement is deleted in its entirety and the following is inserted
in lieu thereof:
"5.2.3. Financing Order. The Interim Order shall be in full
force and effect and shall not have been stayed, reversed,
modified or amended in any respect (other than by the Final
Order and Priming Order as provided hereinbelow); provided
that no Lender shall have any obligation to make any Credit
Extension if making such Credit Extension would cause the
aggregate amount of all Credit Extensions then outstanding,
either separately or together, to exceed the lesser of (x)
$155,000,000 and (y) the amount thereof which was authorized
by the Bankruptcy Court in the Interim Order unless:
(a) the Administrative Agent and each of the Lenders
shall have received a certified copy (or other evidence
satisfactory to the Administrative Agent) of the Final Order
which (i) as entered, shall be acceptable in form and
substance to the Administrative Agent, (ii) shall have been
entered into no later than August 30, 2001, and (iii) shall
then be in full force and effect and shall not have been
stayed, reversed, modified or amended in any respect; provided
that in such case no Lender
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shall have any obligation to make any Credit Extension if the
making of any such Credit Extension would cause the aggregate
amount of all Credit Extensions then outstanding, either
separately or together, to exceed $155,000,000; or
(b) the Administrative Agent and each of the Lenders
shall have received a certified copy (or other evidence
satisfactory to the Administrative Agent) of the Priming Order
which (i) as entered, shall be acceptable in form and
substance to the Administrative Agent, (ii) shall have been
entered into no later than September 20, 2001, and (iii) shall
then be in full force and effect, and shall not have been
stayed, reversed, modified or amended in any respect; provided
that in such case no Lender shall have any obligation to make
any Credit Extension if the making of any such Credit
Extension would cause the aggregate amount of all Credit
Extensions then outstanding, either separately or together, to
exceed $170,000,000 unless (x) Approving Lenders have
previously approved and consented to a business plan submitted
by the Borrowers that is acceptable to them in their sole
discretion and (y) if such business plan contemplates the
operation of the Company's acrylonitrile facility, the minimum
EBITDA amounts set forth in Section 7.2.7 have been modified
to amounts which take into account the acrylonitrile
operations during applicable periods and which amounts and
periods are acceptable to the Required Lenders. In addition,
the Borrowers agree that the Administrative Agent may engage
professionals, at the sole cost of the Borrowers, to assist
the Lenders in the evaluation of the Borrowers' business
plan."
(f) AMENDMENT TO SECTION 7.1.8. OF THE CREDIT AGREEMENT. Paragraph (a)
of Section 7.1.8. of the Credit Agreement is deleted in its entirety and the
following is inserted in lieu thereof:
"(a) Each Borrower will execute any documents, financing
statements, agreements and/or instruments and take all further action
that may be required under applicable law, or that the Administrative
Agent may reasonably request to grant, assign and pledge to the
Administrative Agent: (i) for its benefit and for the ratable benefit
of the Current Assets Lenders, (A) a first priority, perfected security
interest in and Lien on all of the Borrowers' right, title and interest
in and to the Current Assets, senior to all other Liens and (B) a
perfected security interest in and Lien on (x) 100% of the Capital
Securities of the Borrowers, 65% of the Capital Securities of the
Subsidiaries (other than Unrestricted Subsidiaries) and, subject to the
absence of any adverse tax consequences in respect thereof (in which
case upon notification thereof by any Borrower to the Administrative
Agent, the Lenders agree that such Liens shall be immediately released
provided no other security interests in or Liens on 35% of such Capital
Securities then exists) 35% of the Capital Securities of the
Subsidiaries (other than Unrestricted Subsidiaries) and (y) all of the
Borrowers' right, title and interest in and to the Fixed Assets, in
each case of clauses (i)(B)(x) and (i)(B)(y), senior to all other Liens
other than the then applicable Priority Liens; and (ii) for its benefit
and for the ratable benefit of the Fixed Assets Lenders, (A) a first
priority, perfected security interest in and Lien on (x) 100% of the
Capital Securities of the Borrowers, (y) subject to the absence of any
adverse tax consequences in respect thereof (in which case upon
notification thereof by any Borrower to the Administrative Agent, the
Lenders agree that such Liens shall be immediately released provided no
other security
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interests in or Liens on 35% of such Capital Securities then exists)
35% of the Capital Securities of the Subsidiaries (other than
Unrestricted Subsidiaries) and (z) all of the Borrowers' right, title
and interest in and to the Fixed Assets, in each case senior to all
other Liens other than, after the date of entry of the Priming Order,
the then applicable Priority Liens, and (B) a senior, perfected
security interest in and Lien on all of the Borrowers' right, title and
interest in and to the Current Assets and 65% of the Capital Securities
of the Subsidiaries (other than Unrestricted Subsidiaries), senior to
all other Liens other than the then applicable Priority Liens; and the
Borrowers hereby covenant, represent, and warrant that, upon entry of
the Interim Order, pursuant to Bankruptcy Code Sections 364(c), the
Obligations shall at all times be secured by the Current Assets and the
Fixed Assets Collateral as aforesaid, whether now owned or hereafter
existing or in which any Borrower now has or hereafter acquires an
interest."
(g) AMENDMENT TO SECTION 7.2.21. OF THE CREDIT AGREEMENT. Section
7.2.21. of the Credit Agreement is deleted in its entirety and the following is
inserted in lieu thereof:
"7.2.21. Loan Availability. On and after the date of entry of
the Priming Order, the Borrowers will not permit the
difference between the Maximum Loan Amount and the then
outstanding Current Assets Obligations (such difference being
herein referred to as the "Loan Availability") to be less than
(a) $10,000,000, at any time when the Current Assets
Obligations are equal to or greater than $100,000,000, or (b)
10% of the then outstanding Current Assets Obligations at any
time when the then outstanding Current Asset Obligations are
less than $100,000,000, in either case for more than 20
consecutive Business Days; provided that, notwithstanding the
foregoing, the Borrowers shall not be deemed in default of
this Section 7.2.21 if, (a) on or before the date which is 10
days after such failure of the Borrowers to so maintain such
Loan Availability, the Company presents the Administrative
Agent with a business plan designed to improve the liquidity
of the Borrowers which is consented to by Approving Lenders
within 20 days after such failure, or (b) on or before the
date which is 10 days after such failure of the Borrowers to
so maintain such Loan Availability, engages (or confirms its
prior engagement of) a third party professional to actively
market for sale the assets of the Borrowers and/or any
Subsidiary and to continuously and diligently pursue such sale
of assets (including, for these purposes, any Unrestricted
Subsidiary) with values sufficient to pay down outstanding
Current Assets Loans (in accordance with Section 3.1.1 and
Section 3.1.2) to an amount which will be in compliance with
the foregoing Loan Availability requirement. Notwithstanding
anything to the contrary contained in this Section 7.2.21, it
is specifically acknowledged and agreed that (i) the foregoing
proviso is not intended to, and shall not be deemed to,
require the Company to pursue any particular plan of
reorganization in order to receive the benefit thereof, which
shall and continue to be the Company's sole determination, and
(ii) nothing in this Section 7.2.21 shall obligate the
Borrowers, or any of them, to take, or cause to be taken, any
action which is prohibited by or contrary to their fiduciary
duties to the Debtors' estates or any applicable law or court
order."
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(h) AMENDMENT TO SECTION 10.1 OF THE CREDIT AGREEMENT. Clause (d) of
Section 10.1. of the Credit Agreement is deleted in its entirety and the
following is inserted in lieu thereof:
"(d) increase the Current Assets Loan Commitment Amount
(except that the Current Assets Loan Commitment Amount may be
automatically increased from $85,000,000 to $100,000,000 on
the date of entry of the Priming Order and the Current Assets
Loan Commitment Amount may be automatically further increased
to $125,000,000 upon the Borrowers' full compliance with the
proviso to clause (b) of Section 5.2.3) or the Letter of
Credit Commitment Amount or the Current Assets Loan Percentage
of any Current Assets Lender, without the consent of each
Current Assets Lender adversely affected thereby;"
(i) AMENDMENTS TO REVOLVER INTERCREDITOR AGREEMENT RECITALS. The phrase
"the Final Order, including the granting of the Priming Lien," is hereby deleted
from each location where such phrase appears in the Fourth, Fifth and Sixth
"Whereas" clauses of the Revolver Intercreditor Agreement and the phrase "the
Priming Order" is inserted in lieu thereof.
(j) AMENDMENT TO SECTION 2.1 OF THE REVOLVER INTERCREDITOR AGREEMENT.
Clause (b) of Section 2.1 of the Revolver Intercreditor Agreement is deleted in
its entirety and the following is inserted in lieu thereof:
"(b) With respect to Fixed Assets Collateral, the Fixed Assets
Secured Parties' security interests in and Liens on such Fixed
Assets Collateral shall be senior and prior to the Current
Assets Secured Parties' security interests in and Liens on
such Fixed Assets Collateral; provided that, on and after the
date of entry of the Priming Order, the Fixed Assets Secured
Parties' security interests in and Liens on the Fixed Assets
Collateral (other than the Capital Securities of the Company)
shall be subject to the Priming Lien."
(k) AMENDMENT TO SECTION 2.2 OF THE REVOLVER INTERCREDITOR AGREEMENT.
Section 2.2 of the Revolver Intercreditor Agreement is deleted in its entirety
and the following is inserted in lieu thereof:
"SECTION 2.2. Subordination. With respect to the Obligations,
each of the:
(a) Fixed Assets Secured Parties agree that (i) its security
interests in and Liens on the Current Assets Collateral shall
be subordinated and junior in all respects to the Current
Assets Secured Parties' security interests in and Liens on the
Current Assets Collateral and (ii) on and after the date of
entry of the Priming Order, its security interests in and
Liens on the Fixed Assets Collateral (other than the Capital
Securities of the Company) shall be subordinated and junior to
the Current Assets Secured Parties' security interests in and
Liens on the Fixed Assets Collateral (other than the Capital
Securities of the Company) up to the amount of Current Assets
Obligations secured by the Priming Lien.
10
(b) Each of the Current Assets Secured Parties agree that (i)
prior to the date of entry of the Priming Order, its security
interests in and Liens on the Fixed Assets Collateral shall be
subordinated and junior in all respects to the Fixed Assets
Secured Parties' security interests in and Liens on the Fixed
Assets Collateral and (ii) on and after the date of entry of
the Priming Order, its security interests in and Liens on all
of the Fixed Assets Collateral (other than the Capital
Securities of the Company) shall be prior and senior to the
Fixed Assets Secured Parties' security interests in and Liens
on all of the Fixed Assets Collateral (other than the Capital
Securities of the Company) to the extent of the Priming Lien,
but shall be subordinated and junior to the Fixed Assets
Security Parties' security interests in and Liens on the Fixed
Assets Collateral to the extent and by the amount of the
Current Assets Obligations, which are not secured by the
Priming Lien.
(c) Notwithstanding anything to the contrary contained herein,
the Secured Parties acknowledge and agree that on and after
the date of entry of the Priming Order, the Current Assets
Secured Parties will have a first-priority security interest
in and Lien on the Fixed Assets Collateral (other than the
Capital Securities of the Company) up to the amount of the
Current Assets Obligations secured by such Priming Lien."
(l) AMENDMENT TO SECTION 2.3 OF THE REVOLVER INTERCREDITOR AGREEMENT.
Clause (b) of Section 2.3 of the Revolver Intercreditor Agreement is deleted in
its entirety and the following is inserted in lieu thereof:
"(b) subordinates any title, right or interest in any
Collateral (i) which is not, in the case of the Current Assets
Secured Parties, the Current Assets Collateral, subject
however to the rights of the Current Assets Secured Parties
with respect to the Fixed Assets Collateral that are granted
to the Current Assets Secured Parties in connection with the
Priming Lien and (ii) in the case of the Fixed Assets Secured
Parties, which is (x) Current Assets Collateral and (y) after
the date of entry of the Priming Order, Fixed Assets
Collateral (other than the Capital Securities of the Company)
but only up to the amount of the Priming Lien, in each case
solely by reason of the Current Assets Collateral or the Fixed
Assets Collateral (as applicable) location in or on certain
of, or certain of the properties constituting, such other
Collateral; and"
(m) AMENDMENT TO SECTION 3.3 OF THE REVOLVER INTERCREDITOR AGREEMENT.
Paragraphs (a), (f), (g) and (h) of Section 3.3 of the Revolver Intercreditor
Agreement are deleted in their entirety and the following are respectively
inserted in lieu thereof:
"(a) The Administrative Agent (in its capacity as secured
party for and on behalf of the Current Assets Lenders) shall have the
sole and exclusive right to sell, transfer or otherwise dispose of (i)
the Current Assets Collateral and (ii) after the occurrence and during
the continuance of a Commitment Termination Event and provided that the
Priming Order has been entered, the Fixed Assets Collateral (other than
the Capital Securities of the Company) up to the amount of the Current
Assets Obligations which are secured by the
11
Priming Lien, in each case in any manner deemed necessary or
appropriate by it without regard to the security interest or Liens of
the Fixed Assets Secured Parties and without the Fixed Assets Secured
Parties' consent. Simultaneously with the sale, transfer or other
disposition of all or any part of the Collateral described in clauses
(i) and (ii) above by the Administrative Agent (in its capacity as
secured party for and on behalf of the Current Assets Lenders), the
Administrative Agent shall release or otherwise terminate the security
interests in and Liens on all of such Current Assets Collateral and
such Fixed Assets Collateral which is held by the Fixed Assets Secured
Parties."
"(f) Each of the Current Assets Lenders agrees that it shall
not contest or support any other Person in contesting in any
proceeding (including, in the Cases) the legality, validity,
binding effect, priority, enforceability or effectiveness of
the Fixed Assets Secured Parties' first-priority, perfected
security interest in any of the Fixed Assets Collateral other
than (after the date of entry of the Priming Order) with
respect to the Priming Lien."
"(g) The Fixed Assets Secured Parties understand and agree
that, so long as any Current Assets Obligations shall not have
been paid in cash in full and until all Current Assets
Commitments shall have been fully and permanently terminated,
the Administrative Agent shall, with respect to the Current
Assets Collateral and, after the occurrence and continuance of
a Commitment Termination Event (providing that the Priming
Order has been entered), the Fixed Assets Collateral (other
than the Capital Securities of the Company), accept directions
only from the Current Assets Secured Parties."
"(h) The Current Assets Secured Parties understand and agree
that, so long as any Fixed Assets Obligations shall not have
been paid in cash in full and until all Fixed Assets
Commitments shall have been fully and permanently terminated,
the Administrative Agent shall, with respect to the Fixed
Assets Collateral, accept directions only from the Fixed
Assets Secured Parties; provided that after the occurrence and
continuance of a Commitment Termination Event (provided that
the Priming Order has been entered), the Administrative agent
shall, with respect to the Fixed Assets Collateral (other than
Capital Securities of the Company) accept directions only from
the Current Assets Secured Parties until either (i) all of the
Current Assets Obligations have been paid in full in cash and
all of the Current Assets Commitments have been terminated, or
(ii) the Liquidation Proceeds from the sale of Fixed Assets
Collateral (other than Capital Securities of the Company)
realized as the result of a Current Assets Enforcement equal
zero."
(n) AMENDMENT TO SECTION 3.4 OF THE REVOLVER INTERCREDITOR AGREEMENT.
Section 3.4 of the Revolver Intercreditor Agreement is deleted in its entirety
and the following is inserted in lieu thereof:
12
"SECTION 3.4. Allocation of Liquidation Proceeds.
(a) Current Assets Liquidation Proceeds shall be paid
to the Administrative Agent for application first to the
reasonable fees and expense reimbursements then due to the
Administrative Agent with respect to this Agreement, second,
to the Current Assets Obligations until the Current Assets
Obligations are paid in full in cash and all of the Current
Assets Commitments have been terminated, third, if any
Liquidation Proceeds remain, to the Fixed Assets Obligations,
until the Fixed Assets Obligations are paid in full and
fourth, if any Current Assets Liquidation Proceeds remain, to
the Borrowers or to such other Person which is entitled to
such Current Assets Liquidation Proceeds pursuant to
applicable law.
(b) Fixed Assets Liquidation Proceeds shall be paid to the
Administrative Agent for application first to the reasonable fees and
expense reimbursements then due to the Administrative Agent with
respect to this Agreement, second, (i) prior to the date of entry of
the Priming Order, to the Fixed Assets Obligations until the Fixed
Assets Obligations are paid in full in cash and the Fixed Assets
Commitments are terminated and (ii) on and after the date of entry of
the Priming Order, to the Current Assets Obligations, up to the amount
of the Priming Lien and then to the Fixed Assets Obligations, third, if
any Fixed Assets Liquidation Proceeds remain, to the Current Assets
Obligations, until the Current Assets Obligations are paid in full and
fourth, if any Fixed Assets Liquidation Proceeds remain, to the
Borrowers or to such other Person which is entitled to such Liquidation
Proceeds pursuant to applicable law.
(c) Each Fixed Assets Lender agrees that if it receives (i)
Current Assets Liquidation Proceeds or (ii) after the date of entry of
the Priming Order, Fixed Assets Collateral to which it is not entitled
pursuant to the terms of this Agreement, then such Fixed Assets Lender
shall promptly remit such proceeds to the Administrative Agent for
application in accordance with clause (a) of this Section 3.4. For
purposes of this Section, Current Assets Liquidation Proceeds shall
include proceeds of Current Assets Collateral received by any party
hereto from any source whatsoever, including by means of setoff.
(d) Each Current Assets Lender agrees that if it receives
Fixed Assets Liquidation Proceeds (i) prior to the date of entry of the
Priming Order, or (ii) on or after the date of entry of the Priming
Order, to which it is not entitled pursuant to the terms of this
Agreement, then such Current Assets Lender shall promptly remit such
proceeds to the Administrative Agent for application in accordance with
clause (b) of this Section 3.4. For purposes of this Section, Fixed
Assets Liquidation Proceeds shall include proceeds of Fixed Assets
Collateral received by any party hereto from any source whatsoever,
including by means of setoff."
(o) AMENDMENT TO SECTION 4.2 OF THE REVOLVER INTERCREDITOR AGREEMENT.
Paragraph (a) of Section 4.2 of the Revolver Intercreditor Agreement is deleted
in its entirety and the following is inserted in lieu thereof:
"(a) Notwithstanding anything to the contrary herein, with
respect to policies which insure (i) the Current Assets
Collateral or, (ii) after the date of entry of the
13
Priming Order, and after the occurrence and during the
continuance of a Commitment Termination Event, the Fixed
Assets Collateral subject to the Priming Lien, if, pursuant to
the Applicable Agreements, the Company is required to obtain
satisfactory loss payable endorsements naming the Current
Assets Secured Parties and the Fixed Assets Secured Parties,
as their interests may appear, as loss payees, or with such
other designation as the parties hereto may agree, the
Administrative Agent (in its capacity as secured party for and
on behalf of the Current Assets Lenders and the Fixed Assets
Lenders) shall, subject to the Administrative Agent's rights
under the Applicable Agreements, have the sole exclusive
right, as against the Fixed Assets Secured Parties, to effect
settlement of such insurance policy in the event of any loss
to any Current Assets Collateral). All proceeds of such policy
shall be paid to the Administrative Agent and apply the
proceeds of such policy in accordance with clause (a) of
Section 3.4."
SECTION 2. CONDITIONS PRECEDENT. The parties hereto agree that this
Amendment and the amendments to the Credit Agreement and the Revolver
Intercreditor Agreement contained herein shall not be effective until the
satisfaction of each of the following conditions precedent:
(a) EXECUTION AND DELIVERY OF THIS AMENDMENT. The Administrative Agent
shall have received a copy of this Amendment executed and delivered by each of
the applicable Obligors and by each of the Lenders.
(b) REPRESENTATIONS AND WARRANTIES. Each of the representations and
warranties made in this Amendment shall be true and correct on and as of the
Amendment Effective Date as if made on and as of such date, both before and
after giving effect to this Amendment (except to the extent such representations
and warranties relate expressly to an earlier date, which representations and
warranties are true and correct as of such earlier date).
(c) PAYMENT OF FEES AND EXPENSES. The Borrowers shall have paid and the
Administrative Agent shall have received all costs and expenses of the
Administrative Agent in connection with the preparation, reproduction,
execution, and delivery of this Amendment and any other documents prepared in
connection herewith, including, without limitation, the reasonable fees and
out-of-pocket expenses of counsel for the Administrative Agent.
(d) DELIVERY OF AUTHORITY DOCUMENTS. The Administrative Agent shall
have received certified copies of resolutions and consents of the Obligors that
are signatories hereto authorizing the execution, delivery and performance of
this Amendment and any documents or instruments contemplated to be executed and
delivered hereunder, and as otherwise reasonably requested by the Administrative
Agent, each in form and substance reasonably satisfactory to the Administrative
Agent.
SECTION 3. REPRESENTATIONS AND WARRANTIES. To induce the Administrative
Agent and the several Lenders parties hereto to enter into this Amendment and to
agree to the amendment contained herein, each of the Borrowers represents and
warrants to the Administrative Agent and the Lenders as follows:
14
(a) AUTHORIZATION; NO CONTRAVENTION. The execution, delivery and
performance by the applicable Obligors of this Amendment have been duly
authorized by all necessary partnership, corporate or limited liability company
action, as applicable, and do not and will not (i) contravene the terms of any
Organic Documents of any Obligor, (ii) conflict with or result in any breach or
contravention of, or (except as contemplated by the Loan Documents or as
otherwise permitted by the Credit Agreement) the creation of any Lien under, any
document evidencing any contractual obligation to which any Obligor is a party
or, upon entry of the approval of the Bankruptcy Court described in Section 4(i)
below, any order, injunction, writ or decree of any Governmental Authority to
which any Obligor is a party or its property is subject, or (iii) violate any
applicable law binding on or affecting any Obligor.
(b) GOVERNMENTAL AUTHORIZATION. Upon entry of the approval of the
Bankruptcy Court described in Section 4(i) below, no approval, consent,
exemption, authorization or other action by, or notice to, or filing with or
approvals required under state blue sky securities laws or by any Governmental
Authority is necessary or required in connection with the execution, delivery,
performance or enforcement of this Amendment.
(c) NO DEFAULT. No Default or Event of Default exists under any of the
Loan Documents. No Obligor is in default under or with respect to (i) its
Organic Documents or (ii) any material contractual obligation of such Person.
The execution, delivery and performance of this Amendment shall not result in
any default under any contractual obligation of any Obligor in any respect.
(d) BINDING EFFECT. Upon entry of the approval of the Bankruptcy Court
described in Section 4(i) below, this Amendment and the Credit Agreement as
amended hereby constitute the legal, valid and binding obligations of the
Obligors that are parties thereto, enforceable against such Obligors in
accordance with their respective terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, or similar laws affecting the enforcement
of creditors' rights generally or by equitable principles of general
applicability.
(e) REPRESENTATIONS AND WARRANTIES. The representations and warranties
set forth in the Credit Agreement and the other Loan Documents are true and
correct in all material respects on and as of the Amendment Effective Date, both
before and after giving effect to the amendments contemplated in this Amendment,
as if such representations and warranties were being made on and as of the
Amendment Effective Date (except to the extent such representations and
warranties relate expressly to an earlier date, which representations and
warranties are true and correct as of such earlier date).
SECTION 4. MISCELLANEOUS
(a) RATIFICATION AND CONFIRMATION OF LOAN DOCUMENTS. Except for the
specific amendments expressly set forth in this Amendment, the terms,
provisions, conditions and covenants of the Credit Agreement and the other Loan
Documents remain in full force and effect and are hereby ratified and confirmed,
and the execution, delivery and performance of this
15
Amendment shall not in any manner operate as a waiver of, consent to or
amendment of any other term, provision, condition or covenant of the Credit
Agreement or any other Loan Document.
(b) FEES AND EXPENSES. The Borrowers jointly and severally agree to pay
on demand all reasonable costs and expenses of the Administrative Agent in
connection with the preparation, reproduction, execution, and delivery of this
Amendment and any other documents prepared in connection herewith, including,
without limitation, the reasonable fees and out-of-pocket expenses of counsel
for the Administrative Agent.
(c) HEADINGS. Section and subsection headings in this Amendment are
included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose or be given any substantive effect.
(d) APPLICABLE LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES.
(e) COUNTERPARTS AND AMENDMENT EFFECTIVE DATE. This Amendment may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed an original, but all such counterparts together shall constitute but one
and the same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document. This Amendment shall become
effective when (i) each of the conditions precedent set forth in Section 2 of
this Amendment have been satisfied and (ii) the Administrative Agent has
received counterparts of this Amendment executed by the Borrowers, each of the
Obligors that are parties hereto and each of the Lenders (the "Amendment
Effective Date").
(f) AFFIRMATION OF OBLIGATIONS. Notwithstanding that such consent is
not required thereunder, the undersigned Obligors hereby consent to the
execution and delivery of this Amendment by the parties hereto and reaffirm
their respective obligations under each of the Loan Documents to which such
Obligors are parties.
(g) CONFIRMATION OF LOAN DOCUMENTS AND LIENS. As a material inducement
to the Lenders to amend the Credit Agreement, the Obligors that are parties
hereto hereby (i) acknowledge and confirm the continuing existence, validity and
effectiveness of the Loan Documents to which they are parties, including,
without limitation the Security Documents, and the Liens granted under the
Security Documents, (ii) agrees that the execution, delivery and performance of
this Amendment shall not in any way release, diminish, impair, reduce or
otherwise affect such Loan Documents and Liens and (iii) acknowledges and agrees
that the Liens granted under the Security Documents secure payment of the
Obligations under the Loan Documents in the same priority as on the date such
Liens were created and perfected, and the performance and observance by the
Borrowers and the other Obligors of the covenants, agreements and conditions to
be performed and observed by each under the Credit Agreement, as amended hereby.
16
(h) FINAL AGREEMENT. THIS AMENDMENT, TOGETHER WITH THE CREDIT AGREEMENT
AND OTHER LOAN DOCUMENTS, REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
THE PARTIES.
(i) APPROVAL BY BANKRUPTCY COURT. As a material inducement to the
Lenders to amend the Credit Agreement, the Obligors that are parties hereto
hereby agree to obtain and provide the Administrative Agent with a copy (or such
other evidence satisfactory to Administrative Agent) of an order of the
Bankruptcy Court, which order (i) as entered, shall be acceptable in form and
substance to the Administrative Agent, (ii) shall be entered on or before August
22, 2001, authorizing the Borrowers to execute, deliver and to perform their
respective obligations under this Amendment, (iii) shall have been entered upon
a motion satisfactory in form and substance to the Administrative Agent, (iv)
shall be in full force and effect, and (v) shall not have been stayed, reversed,
modified or amended in any respect. Is further acknowledged and agreed that the
failure to obtain and provide a copy (or such other evidence satisfactory to
Administrative Agent) of such an order to the Administrative Agent on or before
August 22, 2001, shall constitute an Event of Default under the Credit
Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGES FOLLOW]
17
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their proper and duly authorized officers
effective as of the Amendment Effective Date.
OBLIGORS:
STERLING CHEMICALS, INC.
By:
-----------------------------------
Title:
STERLING CANADA, INC.
By:
-----------------------------------
Title:
STERLING PULP CHEMICALS US, INC.
By:
-----------------------------------
Title:
STERLING PULP CHEMICALS, INC.
By:
-----------------------------------
Title:
STERLING FIBERS, INC.
By:
-----------------------------------
Title:
STERLING CHEMICALS ENERGY, INC.
By:
-----------------------------------
Title:
STERLING CHEMICALS
INTERNATIONAL, INC.
By:
-----------------------------------
Title:
STERLING CHEMICALS HOLDINGS, INC.
By:
-----------------------------------
Title:
ADMINISTRATIVE AGENT:
THE CIT GROUP/BUSINESS CREDIT, INC.,
as Administrative Agent
By:
-----------------------------------
Title:
LENDERS:
THE CIT GROUP/BUSINESS CREDIT, INC.
By:
-----------------------------------
Title:
IBJ WHITEHALL BUSINESS CREDIT
CORPORATION
By:
-----------------------------------
Title:
FLEET CAPITAL CORPORATION
By:
-----------------------------------
Title:
TEXTRON FINANCIAL CORP.
By:
-----------------------------------
Title:
TRANSAMERICA BUSINESS CAPITAL
CORPORATION
By:
-----------------------------------
Title:
GMAC BUSINESS CREDIT, LLC
By:
-----------------------------------
Title:
THE PROVIDENT BANK
By:
-----------------------------------
Title:
GPSF SECURITIES, INC.
By:
-----------------------------------
Title:
FOOTHILL INCOME TRUST II, L.P.
By:
-----------------------------------
Title:
CONGRESS FINANCIAL CORPORATION
By:
-----------------------------------
Title:
COMERICA BANK
By:
-----------------------------------
Title:
