EXHIBIT 4.6
EXECUTION VERSION
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (as amended, supplemented, amended and restated
or otherwise modified from time to time, this "Agreement"), dated as of December
19, 2002, is made by STERLING CHEMICALS, INC., a Delaware corporation and
STERLING CHEMICALS ENERGY, INC., a Delaware corporation (each, individually, a
"Borrower" and, together, collectively, the "Borrowers"), and each other Person
(such capitalized term and all other capitalized terms not otherwise defined
herein shall have the meanings provided for or incorporated by reference in
Article I below) that may from time to time become a party to this Agreement
(each such Person and each Borrower, individually, a "Pledgor" and, together
with all such other Persons and all Borrowers, collectively, the "Pledgors"), in
favor of THE CIT GROUP/BUSINESS CREDIT, INC., as Administrative Agent for each
of the Secured Parties (together with its successors and assigns in such
capacity, the "Administrative Agent").
RECITALS:
A. Pursuant to a Revolving Credit Agreement, dated as of the date
hereof (as amended, supplemented, amended and restated or otherwise modified
from time to time, the "Credit Agreement"), among the Borrowers, the various
financial institutions as are, or may from time to time become, parties thereto
(the "Lenders") and the Administrative Agent, the Lenders and the Issuer have
extended Commitments to make Credit Extensions to the Borrowers.
B. As a condition precedent to the making of any Credit Extension
under the Credit Agreement, each Pledgor is required to execute and deliver this
Agreement.
C. Each Pledgor has duly authorized the execution, delivery and
performance of this Agreement.
D. It is in the best interest of each Pledgor to execute this
Agreement inasmuch as such Pledgor will derive substantial direct and indirect
benefits from the Credit Extensions made from time to time to the Borrowers by
the Lenders and the Issuer pursuant to the Credit Agreement and the execution
and delivery of Rate Protection Agreements between the Borrowers and certain
Lenders.
NOW THEREFORE, for good and valuable consideration the receipt of which
is hereby acknowledged, and in order to induce (i) the Lenders, the Swing Line
Lender and the Issuer to make Revolving Credit Loans and issue Letters of Credit
pursuant to the Credit Agreement, and (ii) the Secured Parties to enter into
Rate Protection Agreement(s), each Pledgor jointly and severally agrees, for the
benefit of each Secured Party, as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Certain Terms. The following terms (whether or not
underscored) when used in this Agreement, including its preamble and recitals,
shall have the following meanings (such definitions to be equally applicable to
the singular and plural forms thereof):
"Administrative Agent" is defined in the preamble.
"Agreement" is defined in the preamble.
"Borrowers" is defined in the preamble.
"Capital Securities" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated,
whether voting or non-voting) of such Person's equity (including any instruments
convertible into equity), whether now outstanding or issued after the Effective
Date.
"Collateral" is defined in Section 2.1.
"Credit Agreement" is defined in recital A.
"Disposition" is defined in the Intercreditor Agreement.
"Distributions" means all stock dividends, liquidating dividends,
Capital Securities resulting from (or in connection with the exercise of) stock
splits, reclassifications, warrants, options, non-cash dividends, mergers or
consolidations, and all other distributions (whether similar or dissimilar to
the foregoing) on or with respect to any Pledged Shares or other Capital
Securities constituting Collateral, but shall not include Dividends.
"Dividends" means cash dividends and cash distributions with respect to
any Pledged Shares or other Pledged Property made in the ordinary course of
business, but shall not include liquidating dividends.
"Lenders" is defined in recital A.
"Pledged Notes" means all promissory notes, bonds or debt instruments
at any time issued to any Pledgor (excluding any promissory notes, bonds or debt
instruments not included in calculating the Borrowing Base Amount and with
respect to which the principal amount owed to such Pledgor thereunder does not
exceed $500,000, and excluding any promissory notes, bonds or debt instruments
arising from a Disposition of Indenture Collateral).
"Pledged Property" means all Pledged Shares, all other pledged Capital
Securities, all other equity securities, all Pledged Notes, all assignments of
any amounts due or to become due with respect thereto and all other instruments
which are now being delivered by any Pledgor to the Administrative Agent or may
from time to time hereafter be delivered by any Pledgor to the
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Administrative Agent for the purpose of pledge under this Agreement, and all
proceeds of any of the foregoing.
"Pledged Securities" means all Pledged Notes and all Capital Securities
which are now being or may hereafter be delivered or pledged by any Pledgor to
the Administrative Agent hereunder.
"Pledged Share Issuer" means each Person identified in Attachment 1
hereto as the issuer of the Pledged Shares identified opposite the name of such
Person and each other Person whose Capital Securities are required to be pledged
hereunder and under the Credit Agreement from time to time.
"Pledged Shares" means the Capital Securities of any Pledged Share
Issuer in the amounts and percentages listed in Attachment 1 hereto.
"Pledgor" and "Pledgors" are defined in the preamble.
"Securities Act" is defined in clause (a) of Section 6.2.
"Termination Date" means the date on which all Obligations have been
paid in full in cash, all Letters of Credit have been terminated, expired or
Cash Collateralized, all Rate Protection Agreements have been terminated and all
Commitments have been permanently terminated.
SECTION 1.2. Credit Agreement Definitions. Unless otherwise defined
herein or the context otherwise requires, terms used in this Agreement,
including its preamble and recitals, have the meanings provided in the Credit
Agreement.
SECTION 1.3. U.C.C. Definitions. Unless otherwise defined herein or
in the Credit Agreement or the context otherwise requires, terms for which
meanings are provided in the U.C.C. are used in this Agreement, including its
preamble and recitals, with such meanings.
ARTICLE II
PLEDGE
SECTION 2.1. Grant of Security Interest. Each Pledgor hereby pledges,
hypothecates, assigns, charges, delivers and transfers to the Administrative
Agent, for the benefit of each of the Secured Parties, and hereby grants to the
Administrative Agent, for the benefit of the Secured Parties, a continuing
security interest in, all of such Pledgor's right, title and interest in and to
the following, whether now owned or hereafter acquired by such Pledgor
(collectively, the "Collateral"):
(a) all issued and outstanding Pledged Shares of each
Pledged Share Issuer identified in Attachment 1 hereto;
(b) all other Capital Securities of any Pledged Share
Issuer issued from time to time to such Pledgor;
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(c) all Pledged Notes identified in Attachment 1 hereto and
all other Pledged Notes, whether now or hereafter delivered to the
Administrative Agent in connection with this Agreement;
(d) all other Pledged Property, whether now or hereafter
delivered to the Administrative Agent in connection with this
Agreement;
(e) all Dividends, Distributions and other payments and rights
with respect to any Pledged Property; and
(f) all proceeds of any of the foregoing.
SECTION 2.2. Security for Obligations. This Agreement secures the
payment in full and in cash of all Obligations.
SECTION 2.3. Delivery of Pledged Property. All certificates or
instruments representing or evidencing any Collateral, including all
certificates or instruments representing or evidencing Pledged Securities, shall
be promptly delivered to and held by the Administrative Agent pursuant hereto
(or to a party who will hold such Pledged Securities pursuant to arrangements
satisfactory to the Administrative Agent in its sole discretion), shall be in
suitable form for transfer by delivery and shall be accompanied by all necessary
endorsements, instruments of transfer or assignment, duly executed in blank.
SECTION 2.4. Dividends, Distributions and Payments on Pledged
Securities. In the event that any Dividend or other cash payment is to be paid
on any Pledged Security at a time when no Event of Default has occurred and is
continuing, such Dividend or cash payment may be paid directly to the applicable
Pledgor; provided, however, that all amounts so received shall be promptly
deposited by such Pledgor into a Lockbox Account. If any Event of Default has
occurred and is continuing, then any such Dividend or cash payment shall be paid
directly to the Administrative Agent. In the event that any Distribution
consisting of Capital Securities (other than Distributions with respect to the
general partnership interest in S&L Cogeneration Company and limited liability
company interest in ANEXCO described on Attachment 1 hereto) is to be made on
any Pledged Security, such Distribution shall be delivered to and held by or on
behalf of the Administrative Agent as Collateral in accordance with Section 2.3.
SECTION 2.5. Continuing Security Interest. This Agreement shall
create a continuing security interest in the Collateral and shall:
(a)remain in full force and effect until the Termination Date;
(b)be binding upon each Pledgor and its successors,
transferees and assigns; and
(c) inure, together with the rights and remedies of the
Administrative Agent hereunder, to the benefit of the Secured Parties.
Without limiting the foregoing clause (c), any Secured Party may assign or
otherwise transfer (in whole or in part) any Revolving Credit Commitment or
Swing Line Loan Commitment or Loan held by it to any other Person, and such
other Person shall thereupon become vested with all the
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rights and benefits in respect thereof granted to such Secured Party under any
Loan Document or otherwise, subject, however, to any contrary provisions in such
assignment or transfer, and to the provisions of Section 10.11 of the Credit
Agreement. The security interest granted herein shall terminate and all rights
to the Collateral shall revert to each Pledgor on the Termination Date. Upon any
such termination or release of Collateral, the Administrative Agent will, at
each Pledgor's sole expense, deliver to such Pledgor, without any
representations, warranties or recourse of any kind whatsoever, all certificates
and instruments representing or evidencing all Pledged Shares, together with all
other Collateral held by the Administrative Agent hereunder, and execute and
deliver to such Pledgor such documents as such Pledgor shall reasonably request
to evidence such termination or release.
SECTION 2.6. Security Interest Absolute. All rights of the
Administrative Agent and the Liens granted to the Administrative Agent
hereunder, and all obligations of each Pledgor hereunder, shall be absolute
and unconditional, irrespective of
(a)any lack of validity or enforceability of any Loan
Document,
(b)the failure of any Secured Party
(i) to assert any claim or demand or to enforce any
right or remedy against any Pledgor or any other Person under
the provisions of the Loan Documents or otherwise, or
(ii) to exercise any right or remedy against any
guarantor of, or collateral securing, any Obligations of any
Pledgor,
(c) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Obligations or any other
extension, compromise or renewal of any Obligation of any Pledgor,
(d) any reduction, limitation, impairment or termination of
any Obligation of any Pledgor for any reason (other than the repayment
in full and in cash of all Obligations), including any claim of waiver,
release, surrender, alteration or compromise, and shall not be subject
to (and each Pledgor hereby waives any right to or claim of) any
defense or set-off, counterclaim, recoupment or termination whatsoever
by reason of the invalidity, illegality, nongenuineness, irregularity,
compromise or unenforceability of, or any other event or occurrence
affecting, any Obligation of any Pledgor,
(e) any amendment to, rescission, waiver or other
modification of, or any consent to departure from, any of the terms of
the Loan Documents,
(f) any addition, exchange, release, surrender or
non-perfection of any collateral (including the Collateral), or any
amendment to or waiver or release of or addition to or consent to
departure from any guaranty, for any of the Obligations, or
(g) any other circumstances which might otherwise constitute a
defense available to, or a legal or equitable discharge of, any
Borrower, any surety or any guarantor.
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SECTION 2.7. Postponement of Subrogation, etc. Each Pledgor hereby
agrees that it will not exercise any rights which it may acquire by reason of
any payment made hereunder, whether by way of subrogation, reimbursement or
otherwise, until the Termination Date. Any amount paid to any Pledgor on account
of any payment made hereunder prior to the Termination Date shall be held in
trust for the benefit of the Secured Parties and shall promptly be paid to the
Administrative Agent, for the benefit of the Secured Parties, and credited and
applied against the Obligations, whether matured or unmatured, in accordance
with the terms of the Credit Agreement; provided, however, that if
(a) any Pledgor has made payment to the Administrative Agent
for the benefit of the Secured Parties of all or any part of the
Obligations, and
(b) the Termination Date has occurred,
each Secured Party agrees that, at such Pledgor's request, the Administrative
Agent, on behalf of the Secured Parties, will execute and deliver to such
Pledgor appropriate documents (without recourse and without representation or
warranty) necessary to evidence the transfer by subrogation to such Pledgor of
an interest in the Obligations resulting from such payment by such Pledgor. In
furtherance of the foregoing, prior to the Termination Date, each Pledgor shall
refrain from taking any action or commencing any proceeding against any Borrower
(or its successors or assigns, whether in connection with a bankruptcy
proceeding or otherwise) to recover any amounts in respect of payments made
under this Agreement to the Administrative Agent or any other Secured Party.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Each Pledgor represents and warrants unto each Secured Party, as at the
date of each pledge and delivery hereunder (including each pledge and delivery
of Pledged Securities) by such Pledgor to the Administrative Agent of any
Collateral, as set forth in this Article III below.
SECTION 3.1. Ownership, No Liens, etc. Such Pledgor is the legal and
beneficial owner of, and has good and valid title to (and has full right and
authority to pledge and assign) the Collateral pledged by it hereunder, free and
clear of any Liens other than the Lien created by this Agreement.
SECTION 3.2. Valid Security Interest. This Agreement creates a valid
security interest in the Collateral in favor of the Administrative Agent, which
security interest shall be perfected and senior to all other Liens with respect
to the Collateral upon either (x) with respect to Collateral consisting of
certificated securities or Pledged Notes, the delivery to the Administrative
Agent of the certificates and instruments representing or evidencing such
Collateral, together with duly executed instruments of transfer, or (y) with
respect to all Collateral, the filing of appropriate financing statements with
the proper filing office in the appropriate jurisdictions.
SECTION 3.3. As to Pledged Shares. As of the date hereof, Attachment
1 hereto accurately identifies (i) the name and jurisdiction of organization of
each Pledged Share Issuer, (ii) the number, class(es) and certificate number(s),
if applicable, of the Pledged Shares, and (iii)
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the percentage of each class of Capital Securities of each Pledged Share Issuer
represented by such Pledged Shares. In the case of the Pledged Shares of any
Subsidiary of such Pledgor that constitute Collateral, all such Pledged Shares
have been duly authorized and validly issued and are fully paid and
nonassessable. No Pledgor has any Subsidiaries (other than, in the case of the
Company, Sterling Chemicals Marketing, Inc., a Barbados corporation, and the
Excluded Subsidiaries) of which it directly owns any Capital Securities that are
not pledged hereunder. All Pledged Shares (other than the general partnership
interest in S&L Cogeneration Company and limited liability company interest in
ANEXCO described on Attachment 1 hereto) are certificated, have been delivered
to the Administrative Agent accompanied by undated instruments of transfer duly
executed in blank, and such delivery and instruments of transfer are effective
to give the Administrative Agent "control" (as defined in Section 8-106 the
U.C.C.) of such Pledged Shares.
SECTION 3.4. Authorization, Approval, etc. Except as have been obtained
or made and are in full force and effect, no authorization, approval or other
action by, and no notice to or filing with, any Governmental Authority,
regulatory body or other Person is required either
(a) for the pledge by such Pledgor of any Collateral pursuant
to this Agreement or for the execution, delivery and performance of
this Agreement by such Pledgor, or
(b) for the exercise by the Administrative Agent of the voting
or other rights provided for in this Agreement, or, except with respect
to any Pledged Shares as may be required in connection with a
disposition of such Pledged Shares by laws affecting the offering and
sale of securities generally, the remedies in respect of the Collateral
pursuant to this Agreement,
provided, however, that (i) in order to exercise the voting and certain other
rights provided for in this Agreement with respect to a Pledged Share Issuer,
the Pledged Shares of such Pledged Share Issuer must be transferred into the
name of the Administrative Agent on the books and records of such Pledged Share
Issuer prior to the exercise of such voting or other rights, and (ii) the Liens
granted hereunder will not be perfected until either (x) with respect to
Collateral consisting of certificated securities or Pledged Notes, the delivery
to the Administrative Agent of the certificates and instruments representing or
evidencing such Collateral, together with duly executed instruments of transfer,
or (y) with respect to all Collateral, the filing of appropriate financing
statements with the proper filing office in the appropriate jurisdictions.
SECTION 3.5. Compliance with Laws. Such Pledgor is in compliance with
the requirements of all applicable laws (including, the provisions of the Fair
Labor Standards Act), rules, regulations and orders of every Governmental
Authority, the non-compliance with which could reasonably be expected to have a
Material Adverse Effect or which could reasonably be expected to materially
adversely affect the value of the Collateral.
ARTICLE IV
COVENANTS
SECTION 4.1. Protect Collateral; Further Assurances, etc. Except for
the Lien created by this Agreement, no Pledgor will sell, assign, transfer,
pledge, or encumber the Collateral in
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any other manner (except as permitted under Section 7.2.9 and Section 7.2.10 of
the Credit Agreement). Each Pledgor will warrant and defend the right and title
herein granted unto the Administrative Agent in and to the Collateral (and all
right, title and interest represented by the Collateral) against the claims and
demands of all Persons whomsoever. Each Pledgor agrees that at any time, and
from time to time, at the expense of such Pledgor, such Pledgor will promptly
execute and deliver all further instruments, and take all further action, that
may be necessary or that the Administrative Agent may reasonably request, in
order to perfect and protect any security interest granted or purported to be
granted hereby or to enable the Administrative Agent to exercise and enforce its
rights and remedies hereunder with respect to any Collateral. Each Pledgor
hereby authorizes the Administrative Agent to file one or more financing or
continuation statements, and amendments thereto, relative to all or any part of
the Collateral without the signature of such Pledgor where permitted by law. A
carbon, photographic or other reproduction of this Agreement or any financing
statement covering the Collateral or any part thereof shall be sufficient as a
financing statement where permitted by law. No Pledgor will permit any Pledged
Share Issuer that is a Subsidiary of such Pledgor to issue any Capital
Securities unless the same are pledged hereunder and all certificates or
instruments representing or evidencing such Capital Securities are promptly
delivered to and held by or on behalf of the Administrative Agent as Collateral
in accordance with Section 2.3.
SECTION 4.2. Stock Powers, etc. Each Pledgor agrees that all Pledged
Securities delivered by such Pledgor pursuant to this Agreement will be
accompanied by duly executed, undated endorsements, stock powers or other
equivalent instruments of transfer reasonably acceptable to the Administrative
Agent. Each Pledgor will, from time to time upon the reasonable request of the
Administrative Agent, promptly deliver to the Administrative Agent such
endorsements, stock powers, instruments and similar documents, reasonably
satisfactory in form and substance to the Administrative Agent, with respect to
the Collateral as the Administrative Agent may reasonably request and will, from
time to time upon the request of the Administrative Agent after the occurrence
of any Event of Default, promptly cause each Pledged Share Issuer and each maker
of each Pledge Note, as applicable, to transfer any Pledged Securities
constituting Collateral into the name of any nominee designated in writing by
the Administrative Agent.
SECTION 4.3. Continuous Pledge. Subject to Section 2.4, each Pledgor
will, at all times, keep pledged to the Administrative Agent pursuant hereto all
Pledged Shares and all other Capital Securities constituting Collateral, all
Dividends and Distributions with respect thereto, and all other Collateral and
other Capital Securities, instruments, proceeds and rights from time to time
received by or distributable to such Pledgor in respect of any Collateral. Any
Distributions on Pledged Shares consisting of Capital Securities will be
certificated (other than Distributions with respect to the general partnership
interest in S&L Cogeneration Company and limited liability company interest in
ANEXCO described on Attachment 1 hereto).
SECTION 4.4. Voting Rights; Dividends, etc. Each Pledgor agrees:
(a) if any Event of Default shall have occurred and be
continuing, promptly upon receipt thereof by such Pledgor and without
any request therefor by the Administrative Agent, to deliver (properly
endorsed where required hereby or requested by the Administrative
Agent) to the Administrative Agent, all Dividends, Distributions and
all
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proceeds of the Collateral, all of which shall be held by the
Administrative Agent as additional Collateral for use in accordance
with Section 6.4; and
(b) if any Event of Default shall have occurred and be
continuing and the Administrative Agent shall have notified such
Pledgor in writing of the Administrative Agent's intention to exercise
its voting power under this Section:
(i) the Administrative Agent may exercise (to the
exclusion of such Pledgor) the voting power and all other
incidental rights of ownership with respect to any Pledged
Securities constituting Collateral and such Pledgor hereby
grants the Administrative Agent an irrevocable proxy,
exercisable under such circumstances, to vote the Pledged
Securities; and
(ii) promptly to deliver to the Administrative Agent
such additional proxies and other documents as may be
necessary to allow the Administrative Agent to exercise such
voting power.
All Dividends, Distributions and proceeds which may at any time and from time to
time be held by a Pledgor but which such Pledgor is then obligated to deliver to
the Administrative Agent, shall, until delivery to the Administrative Agent, be
held by such Pledgor separate and apart from its other property in trust for the
Administrative Agent. The Administrative Agent agrees that unless an Event of
Default shall have occurred and be continuing and the Administrative Agent shall
have given the written notice referred to in this Section, each Pledgor has the
exclusive power to exercise all voting and other consensual rights with respect
to any Pledged Securities and the Administrative Agent shall, upon the written
request of such Pledgor, promptly deliver such proxies and other documents, if
any, as shall be reasonably requested by such Pledgor which are necessary to
allow such Pledgor to exercise such powers with respect to any such Pledged
Securities; provided, however, that no vote shall be cast, or consent, waiver or
ratification given, or action taken by any Pledgor that would materially impair
the value of any Collateral or be inconsistent with or violate any provision of
the Loan Documents (including, without limitation, any action to foreclose any
Lien securing any Pledged Note or to otherwise enforce any Pledged Note).
ARTICLE V
THE ADMINISTRATIVE AGENT
SECTION 5.1. Administrative Agent Appointed Attorney-in-Fact. Each
Pledgor hereby irrevocably appoints the Administrative Agent as such Pledgor's
attorney-in-fact, with full authority and in the name, place and stead of the
Pledgor or in its own name, from time to time in the Administrative Agent's
discretion, upon the occurrence and during the continuance of any Event of
Default, to take any action and to execute any instrument which the
Administrative Agent may deem necessary or advisable to accomplish the purposes
of this Agreement, including without limitation:
(a) to ask, demand, collect, xxx for, recover, compromise and
receive and give acquittance and receipts for moneys due and to become
due under or in respect of any of the Collateral;
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(b) to receive, endorse and collect any drafts or other
instruments, documents and chattel paper, in connection with clause (a)
above; and
(c) to file any claims or take any action or institute any
proceedings which the Administrative Agent may deem necessary for the
collection of any of the Collateral or otherwise to enforce the rights
of the Administrative Agent with respect to any of the Collateral.
Each Pledgor hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section is irrevocable and coupled with an interest.
SECTION 5.2. Administrative Agent May Perform. If any Pledgor fails
to perform any agreement contained herein, the Administrative Agent may itself
perform, or cause performance of, such agreement, and the expenses of the
Administrative Agent incurred in connection therewith shall be payable by such
Pledgor pursuant to Section 6.5.
SECTION 5.3. Administrative Agent Has No Duty. The powers conferred
on the Administrative Agent hereunder are solely to protect its interest (on
behalf of the Secured Parties) in the Collateral and shall not impose any duty
on it to exercise any such powers. Except for reasonable care of any Collateral
in its possession and the accounting for moneys actually received by it
hereunder, the Administrative Agent shall have no duty as to any Collateral or
responsibility for
(a) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative
to any Pledged Property, whether or not the Administrative Agent has or
is deemed to have knowledge of such matters, or
(b) taking any necessary steps to preserve rights against
prior parties or any other rights pertaining to any Collateral.
SECTION 5.4. Reasonable Care. The Administrative Agent agrees to use
reasonable care in the custody and preservation of any of the Collateral in its
possession in accordance with Section 9-207 of the U.C.C.; provided, that (a)
the Administrative Agent shall be deemed to have exercised reasonable care in
the custody and preservation of any Collateral in its possession if such
Collateral is accorded treatment substantially similar to that which the
Administrative Agent accords its own property, and (b) it is understood that the
Administrative Agent shall have no responsibility for taking any necessary steps
to preserve rights against prior parties with respect to the Collateral.
ARTICLE VI
REMEDIES
SECTION 6.1. Certain Remedies.
(a) If any Event of Default shall have occurred and be
continuing, the Administrative Agent may exercise in respect of the
Collateral, in addition to other rights and remedies provided for
herein or otherwise available to it, all the rights and remedies of a
secured party on default under the U.C.C. (whether or not the U.C.C.
applies to the
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affected Collateral) and also may, without notice except
as specified below (or such other notices that are required by the
U.C.C. (or other applicable law) and cannot be waived by the Pledgor
hereunder), sell the Collateral or any part thereof in one or more
parcels at public or private sale, at any of the Administrative Agent's
offices or elsewhere, for cash, on credit or for future delivery, and
upon such other terms as the Administrative Agent may deem commercially
reasonable. Each Pledgor agrees that, to the extent notice of sale
shall be required by law, at least ten days' prior notice to such
Pledgor of the time and place of any public sale or the time after
which any private sale is to be made shall constitute reasonable
notification. The Administrative Agent shall not be obligated to make
any sale of Collateral regardless of notice of sale having been given.
The Administrative Agent may adjourn any public or private sale from
time to time by announcement at the time and place fixed therefore, and
such sale may, without further notice, be made at the time and place to
which it was so adjourned.
(b) If any Event of Default shall have occurred and be
continuing, the Administrative Agent may, in addition to other rights
and remedies provided for herein or otherwise available to it,
(i) transfer all or any part of the Collateral into
the name of the Administrative Agent or its nominee, with or
without disclosing that such Collateral is subject to the Lien
and security interest hereunder,
(ii) notify the parties obligated on any of the
Collateral to make payment to the Administrative Agent of any
amount due or to become due thereunder,
(iii) enforce collection of any of the Collateral by
suit or otherwise, and surrender, release or exchange all or
any part thereof, or compromise or extend or renew for any
period (whether or not longer than the original period) any
obligations of any nature of any party with respect thereto,
(iv) endorse any checks, drafts or other writings in
each Pledgor's name to allow collection of the Collateral,
(v) take control of any proceeds of the Collateral
and
(vi) execute (in the name, place and stead of any
Pledgor) endorsements, assignments, stock powers and other
instruments of conveyance or transfer with respect to all or
any of the Collateral.
SECTION 6.2. Securities Laws. If the Administrative Agent shall
determine to exercise its right to sell all or any of the Collateral pursuant to
Section 6.1, each Pledgor agrees that, upon written request of the
Administrative Agent, such Pledgor will use commercially reasonable efforts to,
at its own expense:
(a) execute and deliver, and cause each issuer of the
Collateral contemplated to be sold and the directors and officers
thereof to execute and deliver, all such instruments and documents, and
do or cause to be done all such other acts and things, as may be
necessary or, in the opinion of the Administrative Agent, advisable to
register such Collateral under
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the provisions of the Securities Act of 1933, as from time to time
amended (the "Securities Act"), and to cause the registration statement
relating thereto to become effective and to remain effective for such
period as prospectuses are required by law to be furnished, and to make
all amendments and supplements thereto and to the related prospectus
which, in the opinion of the Administrative Agent, are necessary or
advisable, all in conformity with the requirements of the Securities
Act and the rules and regulations of the Securities and Exchange
Commission applicable thereto;
(b) use its best efforts to qualify the Collateral under the
state securities or "Blue Sky" laws and to obtain all necessary
governmental approvals for the sale of the Collateral, as requested by
the Administrative Agent;
(c) cause each such issuer to make available to its security
holders, as soon as practicable, an earnings statement that will
satisfy the provisions of Section 11(a) of the Securities Act; and
(d) do or cause to be done all such other acts and things as
may be necessary to make such sale of the Collateral or any part
thereof valid and binding and in compliance with applicable law.
Each Pledgor further acknowledges the impossibility of ascertaining the amount
of damages that would be suffered by the Administrative Agent or the Secured
Parties by reason of the failure by such Pledgor to perform any of the covenants
contained in this Section and, consequently, agrees that, if such Pledgor shall
fail to perform any of such covenants, it shall pay, as liquidated damages and
not as a penalty, an amount equal to the value (as determined by the
Administrative Agent) of the Collateral on the date the Administrative Agent
shall demand compliance with this Section.
SECTION 6.3. Compliance with Restrictions. Each Pledgor agrees that
in any sale of any of the Collateral whenever an Event of Default shall have
occurred and be continuing, the Administrative Agent is hereby authorized to
comply with any limitation or restriction in connection with such sale as it may
be advised by counsel is necessary in order to avoid any violation of applicable
law (including compliance with such procedures as may restrict the number of
prospective bidders and purchasers, require that such prospective bidders and
purchasers have certain qualifications and restrict such prospective bidders and
purchasers to persons who will represent and agree that they are purchasing for
their own account for investment and not with a view to the distribution or
resale of such Collateral), or in order to obtain any required approval of the
sale or of the purchaser by any Governmental Authority, and the Pledgor further
agrees that such compliance shall not result in such sale being considered or
deemed not to have been made in a commercially reasonable manner, nor shall the
Administrative Agent be liable nor accountable to any Pledgor for any discount
allowed by reason of the fact that such Collateral is sold in compliance with
any such limitation or restriction.
SECTION 6.4. Application of Proceeds. All cash proceeds received by
the Administrative Agent in respect of any sale of, collection from or other
realization upon all or any part of the Collateral shall be applied by the
Administrative Agent as follows:
12
(a) first, to the payment of any and all fees and expenses
then due and owing to the Administrative Agent (including, without
limitation, any amounts payable to the Administrative Agent pursuant to
Section 10.3 of the Credit Agreement and Section 6.5 of this
Agreement);
(b) second, to the payment of any and all fees and expenses
then due and owing to the other Lenders in accordance with their
respective Percentages;
(c) third, to the payment of all accrued and unpaid interest
on Swing Line Loans;
(d) fourth, to the payment of all accrued and unpaid interest
on Revolving Credit Loans, to each Lender in accordance with each
Lender's respective Percentage;
(e) fifth, to reduce the outstanding principal amount of all
Swing Line Loans until all outstanding Swing Loans have been paid in
full;
(f) sixth, to the payment to the Lenders, in accordance with
their respective Percentages, of all outstanding Revolving Credit Loans
until all outstanding Revolving Credit Loans have been paid in full;
(g) seventh, to reduce all unpaid and outstanding
Reimbursement Obligations;
(h) eighth, to Cash Collateralize all Letters of Credit;
(i) ninth, to the ratable payment of all other unpaid and
outstanding Obligations, to each Secured Party in accordance with the
proportion that the unpaid and outstanding Obligations to such Secured
Party bears to the unpaid and outstanding Obligations to all Secured
Parties; and
(j) tenth, any remaining funds shall continue to be held by
the Administrative Agent to be held as additional collateral security
and applied to any outstanding Obligations in accordance with clauses
(a)-(i) above until the Termination Date, after which such remaining
cash proceeds shall be paid over to the applicable Pledgor or to
whomsoever may be lawfully entitled to receive such surplus.
The Pledgors shall remain liable on a joint and several basis for any
deficiency.
SECTION 6.5. Indemnity and Expenses. Each Pledgor hereby jointly and
severally indemnifies and holds harmless the Administrative Agent from and
against any and all claims, losses and liabilities arising out of or resulting
from this Agreement (including enforcement of this Agreement), except claims,
losses or liabilities resulting from the Administrative Agent's gross negligence
or willful misconduct, and each Pledgor will pay (without duplication) to the
Administrative Agent the amount of any and all reasonable expenses, including
the reasonable fees and disbursements of its counsel and of any experts and
agents, which the Administrative Agent may incur, in each case, in connection
with:
13
(a) the administration of this Agreement;
(b) the custody, preservation, use or operation of, or the
sale of, collection from or other realization upon, any of the
Collateral;
(c) the exercise or enforcement of any of the rights of the
Administrative Agent hereunder; or
(d) the failure by any Pledgor to perform or observe any of
the provisions hereof.
ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 7.1. Loan Document. This Agreement is a Loan Document
executed pursuant to the Credit Agreement and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions thereof.
SECTION 7.2. Amendments, etc. No amendment to or waiver of any
provision of this Agreement or consent to any departure by any Pledgor herefrom
shall be effective unless the same shall be in writing and signed by the
Administrative Agent (at the direction of such of the Lenders as may be required
by the Credit Agreement) and such Pledgor, and then such waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which it is given.
SECTION 7.3. Protection of Collateral. The Administrative Agent may
from time to time, at its option, and at the expense of the Pledgors, perform
any act which any Pledgor agrees hereunder to perform and which such Pledgor
shall fail to perform after being requested in writing so to perform (it being
understood that no such request need be given after the occurrence and during
the continuance of an Event of Default) and the Administrative Agent may from
time to time take any other action which the Administrative Agent reasonably
deems necessary for the maintenance, preservation or protection of any of the
Collateral or of its security interest therein.
SECTION 7.4. Addresses for Notices. All notices and other
communications provided for hereunder shall be in writing and addressed,
delivered or transmitted, if to any Pledgor, at the address or facsimile number
of the Company provided for in the Credit Agreement, and, if to the
Administrative Agent, at the address or facsimile number provided for in the
Credit Agreement, or to any such party at such other address or facsimile number
as shall be designated by such party in a written notice to each other party
complying as to delivery with the terms of this Section. Any notice, (a)(i) if
mailed and properly addressed with postage prepaid or (ii) if properly addressed
and sent by pre-paid courier service, shall be deemed given when such notice has
been received or (b) if transmitted by facsimile, shall be deemed given when
transmitted (and telephonic confirmation of receipt thereof has been received).
SECTION 7.5. Headings. The various headings of this Agreement are
inserted for convenience only, and shall not affect the meaning or
interpretation of this Agreement or any provisions hereof.
14
SECTION 7.6 . Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such provision and
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability, without invalidating the remaining provisions of this
Agreement or affecting the validity or enforceability of such provision in any
other jurisdiction.
SECTION 7.7. Governing Law. THIS AGREEMENT SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 7.8. Counterparts. This Agreement may be executed in several
counterparts and by facsimile, each of which counterparts shall be deemed to be
an original (whether such counterpart is originally executed or a facsimile copy
of a counterpart that is originally executed) and all of which shall constitute
together but one and the same agreement. This Agreement shall become effective
as of the date first written above.
SECTION 7.9. Additional Pledgors. Upon the execution and delivery by
any other Person of an instrument in the form of Annex I hereto, together with
the Schedule thereto, such Person shall become a "Pledgor" hereunder with the
same force and effect as if originally named as a Pledgor herein. The execution
and delivery of any such instrument shall not require the consent of any other
Pledgor hereunder. The rights and obligations of each Pledgor hereunder shall
remain in full force and effect notwithstanding the addition of any new Pledgor
as a party to this Agreement.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS]
15
IN WITNESS WHEREOF, each party hereto has caused this Pledge Agreement
to be duly executed and delivered by their respective officers thereunto duly
authorized as of the day and year first above written.
PLEDGORS:
STERLING CHEMICALS, INC.
STERLING CHEMICALS ENERGY, INC.
By:________________________________________
Name:
Title:
ADMINISTRATIVE AGENT:
THE CIT GROUP/BUSINESS CREDIT,
INC., as Administrative Agent, on behalf of
the Secured Parties
By:________________________________________
Name:
Title:
[SIGNATURE PAGE TO PLEDGE AGREEMENT]
ATTACHMENT 1
to Pledge Agreement
[TO BE ATTACHED]
Attachment 1 to Pledge Agreement- Page-1
ANNEX 1
to Pledge Agreement
SUPPLEMENT NO. ___ TO PLEDGE AGREEMENT
This SUPPLEMENT NO. ___, dated as of __________, ____ (this
"Supplement"), to the Pledge Agreement, dated as of December 19, 2002 (as
amended, supplemented, amended and restated or otherwise modified from time to
time, the "Pledge Agreement"), among the initial signatories thereto and each
other Person which from time to time thereafter became a party thereto pursuant
to Section 7.9 thereof (each, individually, a "Pledgor", and, collectively, the
"Pledgors"), in favor of THE CIT GROUP/BUSINESS CREDIT INC., as Administrative
Agent for each of the Secured Parties (such term and all other capitalized terms
being used herein with the meanings provided, or incorporated by reference, in
the Pledge Agreement), is made by the undersigned.
RECITALS:
A. Pursuant to a Revolving Credit Agreement, dated as of December
19, 2002 (as amended, supplemented, amended and restated or otherwise modified
from time to time, the "Credit Agreement"), among Sterling Chemicals, Inc., a
Delaware corporation, and Sterling Chemicals Energy, Inc., a Delaware
corporation (collectively, the "Borrowers"), the various financial institutions
as are, or may from time to time become, parties thereto (the "Lenders") and the
Administrative Agent, the Lenders and the Issuer have extended Commitments to
make Credit Extensions to the Borrowers.
B. As a condition precedent to the making and maintenance of
Credit Extensions under the Credit Agreement, the undersigned is required to
execute and deliver this Supplement.
C. The undersigned has duly authorized the execution, delivery
and performance of this Supplement and the Pledge Agreement.
D. The Pledge Agreement provides that additional parties may
become Pledgors under the Pledge Agreement by execution and delivery of an
instrument in the form of this Supplement.
E. Pursuant to the provisions of Section 7.9 of the Pledge
Agreement, the undersigned is becoming a Pledgor under the Pledge Agreement.
F. The undersigned desires to become a Pledgor under the Pledge
Agreement in order to induce the Secured Parties to continue to make and
maintain Revolving Credit Loans and Swing Line Loans and issue and maintain
Letters of Credit under the Credit Agreement as consideration therefor.
Annex 1 to Pledge Agreement- Page-1
NOW, THEREFORE, the undersigned agrees, for the benefit of each Secured
Party, as follows:
SECTION 1. In accordance with Section 7.9 of the Pledge Agreement,
the undersigned by its signature below becomes a Pledgor under the Pledge
Agreement with the same force and effect as if it were an original signatory
thereto as a Pledgor and hereby pledges, hypothecates, assigns, charges,
delivers and transfers to the Administrative Agent, for the benefit of the
Secured Parties, and grants to the Administrative Agent, for the benefit of the
Secured Parties, as security for the Obligations, a continuing security interest
in all of the undersigned's right, title and interest in and to the following,
whether now owned or hereafter acquired by the undersigned (collectively, the
"Additional Collateral"):
(a) all issued and outstanding Pledged Shares of each Pledged
Share Issuer identified in Attachment 1 hereto;
(b) all other Capital Securities of any Pledged Share Issuer
issued from time to time to such Pledgor;
(c) all Pledged Notes identified in Attachment 1 hereto and
all other Pledged Notes, whether now or hereafter delivered to the
Administrative Agent in connection with this Agreement;
(d) all other Pledged Property, whether now or hereafter
delivered to the Administrative Agent in connection with this
Agreement;
(e) all Dividends, Distributions and other payments and rights
with respect to any Pledged Property; and
(f) all proceeds of any of the foregoing.
In furtherance of the foregoing, each reference to a "Pledgor" in the Pledge
Agreement shall be deemed to include the undersigned, each reference to
"Collateral" in the Pledge Agreement shall be deemed to include the Additional
Collateral, and Attachment 1 hereto shall be deemed to be part of Attachment 1
to the Pledge Agreement.
SECTION 2. The undersigned hereby represents and warrants that (i)
this Supplement has been duly authorized, executed and delivered by the
undersigned and constitutes a legal, valid and binding obligation of the
undersigned, enforceable against it in accordance with its terms, except as such
enforcement may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally and general
equitable principles, and (ii) all representations and warranties set forth in
Article III of the Pledge Agreement are true and correct in all respects as to
the undersigned and the Additional Collateral.
SECTION 3. Except as expressly supplemented hereby, the Pledge
Agreement shall remain in full force and effect in accordance with its terms.
Annex 1 to Pledge Agreement- Page-2
SECTION 4. In the event any one or more of the provisions contained
in this Supplement should be held invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein and in the Pledge Agreement shall not in any way be affected or
impaired.
SECTION 5. Without limiting the provisions of the Credit Agreement
(or any other Loan Document, including the Pledge Agreement), the undersigned
agrees to reimburse the Administrative Agent for its reasonable out-of-pocket
expenses in connection with this Supplement, including reasonable attorneys'
fees and expenses of the Administrative Agent.
SECTION 6. THIS SUPPLEMENT SHALL BE DEEMED TO BE A CONTRACT MADE
UNDER AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 7. This Supplement hereby incorporates by reference the
provisions of the Pledge Agreement, which provisions are deemed to be a part
hereof, and this Supplement shall be deemed to be a part of the Pledge
Agreement.
SECTION 8. This Supplement may be executed in several counterparts
and by facsimile, each of which counterparts shall be deemed to be an original
(whether such counterpart is originally executed or a facsimile copy of a
counterpart that is originally executed) and all of which shall constitute
together but one and the same agreement. This Supplement shall become effective
and binding upon the Pledgor when a counterpart hereof executed on behalf of the
Pledgor shall have been received by the Administrative Agent.
IN WITNESS WHEREOF, the undersigned has caused this Supplement to be
duly executed and delivered by its officer thereunto duly authorized as of the
date first above written.
[NAME OF ADDITIONAL PLEDGOR]
By:________________________________________
Name:
Title:
ACKNOWLEDGED AND ACCEPTED BY:
THE CIT GROUP/BUSINESS CREDIT INC.,
as Administrative Agent
By:________________________________________
Name:
Title:
Annex 1 to Pledge Agreement- Page-3
ATTACHMENT 1
to Supplement No.__
Pledge Agreement
[NAME OF PLEDGOR]
Pledged Shares
--------------
Capital Securities
-----------------------------------------------------------
Pledged Share Issuer Authorized Shares Outstanding Shares % of Shares Pledged
-------------------- ----------------- ------------------ -------------------
Pledged Notes
-------------
Aggregate Principal Amount
--------------------------
Maker Description Outstanding
----- ----------- -----------
Annex 1 to Pledge Agreement- Page-4
