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EXHIBIT 4.5
FIXED ASSETS SECURITY AGREEMENT
THIS FIXED ASSETS SECURITY AGREEMENT (as amended, supplemented, amended
and restated or otherwise modified from time to time, this "Agreement"), dated
as of July 23, 1999, is among STERLING CHEMICALS, INC., a Delaware corporation,
STERLING CANADA, INC., a Delaware corporation, STERLING PULP CHEMICALS US, INC.,
a Delaware corporation, STERLING PULP CHEMICALS, INC., a Georgia corporation,
STERLING FIBERS, INC., a Delaware corporation, STERLING CHEMICALS ENERGY, INC.,
a Delaware corporation, and STERLING CHEMICALS INTERNATIONAL, INC., a Delaware
corporation (each individually a "Borrower" and 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, pursuant to
the terms of the Credit Agreement, a party to this Agreement (individually
referred to as a "Grantor", and collectively referred to as the "Grantors"), and
THE CIT GROUP/BUSINESS CREDIT, INC. ("CIT"), as the Administrative Agent for
each of the Fixed Assets Secured Parties.
W I T N E S S E T H :
WHEREAS, pursuant to a Revolving Credit Agreement, dated as of July 23,
1999 (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"), DLJ Capital Funding, Inc., as the Syndication Agent, Credit
Suisse First Boston, as the Documentation Agent, and CIT, as the Administrative
Agent, the Lenders and the Issuer have extended Commitments to make Credit
Extensions to the Borrowers;
WHEREAS, as a condition precedent to the making of each Credit
Extension (including the initial Credit Extension) under the Credit Agreement,
each Grantor is required to execute and deliver this Agreement;
WHEREAS, each Grantor has duly authorized the execution, delivery and
performance of this Agreement; and
WHEREAS, it is in the best interests of each Grantor to execute this
Agreement inasmuch as such Grantor 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
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the Credit Agreement and the execution and delivery of Rate Protection
Agreements between the Borrowers and certain Fixed Assets Secured Parties;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in order to induce (i) the
Fixed Assets Lenders to make each Fixed Asset Loan (including the initial Fixed
Assets Loans) to the Borrowers pursuant to the Credit Agreement and (ii) the
Fixed Assets Secured Parties to enter into Rate Protection Agreement(s), each
Grantor jointly and severally agrees, for the benefit of each Fixed Assets
Secured Party, as follows:
ARTICLE I
DEFINITIONS
SECTION I.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.
"Borrower" and "Borrowers" are defined in the preamble.
"CIT" is defined in the preamble.
"Collateral" is defined in Section 2.1.
"Collateral Account" is defined in clause (c) of Section 4.3.
"Computer Hardware and Software Collateral" means:
(a) all computer and other electronic data processing
hardware, integrated computer systems, central processing units, memory
units, display terminals, printers, features, computer elements, card
readers, tape drives, hard and soft disk drives, cables, electrical
supply hardware, generators, power equalizers, accessories and all
peripheral devices and other related computer hardware;
(b) all software programs (including both source code, object
code and all related applications and data files), whether now owned,
licensed or leased or hereafter acquired by any Grantor, designed for
use on the computers and electronic data processing hardware described
in clause (a) above;
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(c) all firmware associated therewith;
(d) all documentation (including flow charts, logic diagrams,
manuals, guides and specifications) with respect to such hardware,
software and firmware described in the preceding clauses (a) through
(c); and
(e) all rights with respect to all of the foregoing, including
any and all copyrights, licenses, options, warranties, service
contracts, program services, test rights, maintenance rights, support
rights, improvement rights, renewal rights and indemnifications and any
substitutions, replacements, additions or model conversions of any of
the foregoing.
"Copyright Collateral" means all copyrights of each Grantor, whether
statutory or common law, registered or unregistered, now or hereafter in force
in the United States including all of such Grantor's right, title and interest
in and to all copyrights registered in the United States Copyright Office and
also including the copyrights referred to in Item A of Schedule IV attached
hereto, and all applications for registration thereof, whether pending or in
preparation, all copyright licenses in the United States, including each
copyright license referred to in Item B of Schedule IV attached hereto, the
right to xxx for past, present and future infringements of any thereof, all
rights corresponding thereto, all extensions and renewals of any thereof and all
proceeds of the foregoing, including licenses, royalties, income, payments,
claims, damages and proceeds of suit.
"Credit Agreement" is defined in the first recital.
"Equipment" is defined in clause (a) of Section 2.1.
"Fixed Assets Termination Date" means the date on which all Fixed
Assets Obligations have been paid in full in cash, all Rate Protection
Agreements where the counterparty is a Fixed Assets Lender (or its Affiliate)
have been terminated and the Fixed Assets Loan Commitment shall have terminated.
"Grantor" and "Grantors" are defined in the preamble.
"Intellectual Property Collateral" means, collectively, the Computer
Hardware and Software Collateral, the Copyright Collateral, the Patent
Collateral, the Trademark Collateral and the Trade Secrets Collateral.
"Intercompany Note" means, with respect to any Grantor, as the payee
thereunder, a promissory note substantially in the form of Exhibit D hereto
(with such modifications as the Administrative Agent may consent to, such
consent not to be unreasonably withheld), which promissory note shall evidence
all intercompany loans which may be made from time to time by the such Grantor
to any of its Foreign Restricted Subsidiaries as the maker of such promissory
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note, as amended, modified or supplemented from time to time, in accordance with
Section 4.7, together with any promissory note of such Grantor taken in
extension or renewal thereof or substitution therefor.
"Inventory" is defined in clause (b) of Section 2.1
"Lenders" is defined in the first recital.
"Material Contracts" is defined in clause (c) of Section 2.1
"Patent Collateral" means:
(a) all letters patent and applications for letters patent in
the United States, including all patent applications in preparation for
filing in the United States and including each patent and patent
application referred to in Item A of Schedule II attached hereto;
(b) all reissues, divisions, continuations,
continuations-in-part, extensions, renewals and reexaminations of any
of the items described in clause (a);
(c) all patent licenses in the United States, including each
patent license referred to in Item B of Schedule II attached hereto;
and
(d) all proceeds of, and rights associated with, the foregoing
(including license royalties and proceeds of infringement suits), the
right to xxx third parties for past, present or future infringements of
any patent or patent application, referred to in clauses (a) or (b)
above, and for breach or enforcement of any patent license referred to
in clause (c) above.
"Receivables" is defined in clause (c) of Section 2.1.
"Related Contracts" is defined in clause (c) of Section 2.1.
"Trademark Collateral" means:
(a) all trademarks, trade names, corporate names, company
names, business names, fictitious business names, trade styles, service
marks, certification marks, collective marks, logos, other source of
business identifiers, prints and labels on which any of the foregoing
have appeared or appear, designs and general intangibles of a like
nature (all of the foregoing items in this clause (a) being
collectively called a "Trademark"), now existing anywhere in the United
States or hereafter adopted or acquired in the United States, whether
currently in use or not, all registrations and recordings thereof and
all applications in connection therewith, whether pending or in
preparation for filing, including registrations, recordings and
applications in the United
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States Patent and Trademark Office or in any office or agency of the
United States of America or any State, including those referred to in
Item A of Schedule III attached hereto;
(b) all Trademark licenses in the United States, including
each Trademark license referred to in Item B of Schedule III attached
hereto;
(c) all reissues, extensions or renewals of any of the items
described in clause (a) and (b);
(d) all of the goodwill of the business connected with the use
of, and symbolized by the items described in, clauses (a) and (b); and
(e) all proceeds of, and rights associated with, the
foregoing, including any claim by any Grantor against third parties for
past, present or future infringement or dilution of any Trademark,
Trademark registration or Trademark license, including any Trademark,
Trademark registration or Trademark license referred to in clauses (a)
through (c) above, or for any injury to the goodwill associated with
the use of any such Trademark or for breach or enforcement of any such
Trademark license.
"Trade Secrets Collateral" means all common law and statutory trade
secrets and all other confidential or proprietary or useful information and all
know-how obtained by or used in or contemplated at any time for use in the
business of any Grantor (all of the foregoing being collectively called a "Trade
Secret"), whether or not such Trade Secret has been reduced to a writing or
other tangible form, including all documents and things embodying, incorporating
or referring in any way to such Trade Secret, all Trade Secret licenses,
including each Trade Secret license referred to in Schedule V attached hereto,
and including the right to xxx for and to enjoin and to collect damages for the
actual or threatened misappropriation of any Trade Secret and for the breach or
enforcement of any such Trade Secret license.
SECTION I.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 I.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.
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ARTICLE II
SECURITY INTEREST
SECTION II.1. Grant of Security. Each Grantor hereby assigns, pledges,
hypothecates, charges, delivers, and transfers to the Administrative Agent, for
its benefit and the ratable benefit of each of the Fixed Assets Secured Parties,
and hereby grants to the Administrative Agent, for its benefit and the ratable
benefit of each of the Fixed Assets Secured Parties, a continuing security
interest in all of the following, whether now or hereafter existing or acquired
by such Grantor (the "Collateral"):
(a) all equipment in all of its forms of such Grantor,
wherever located, including all parts thereof and all accessions,
additions, attachments, improvements, substitutions and replacements
thereto and therefor and all accessories related thereto (any and all
of the foregoing being the "Equipment");
(b) all inventory in all of its forms of such Grantor,
wherever located, including
(i) all raw materials and work in process therefor,
finished goods thereof and materials used or consumed in the
manufacture or production thereof,
(ii) all goods in which such Grantor has an interest
in mass or a joint or other interest or right of any kind
(including goods in which such Grantor has an interest or
right as consignee), and
(iii) all goods which are returned to or repossessed
by such Grantor,
and all accessions thereto, products thereof and documents therefor
(any and all such inventory, materials, goods, accessions, products and
documents being the "Inventory");
(c) all accounts, contracts (including, but not limited to,
all service contracts, supply contracts and marketing agreements (all
such service contracts, supply contracts and marketing agreements,
collectively, the "Material Contracts")), contract rights, chattel
paper, documents, instruments, general intangibles, including Tax
refunds of such Grantor, whether or not arising out of or in connection
with the sale or lease of goods or the rendering of services, and all
rights of such Grantor now or hereafter existing in and to all security
agreements, guaranties, leases and other contracts securing or
otherwise relating to any such accounts, contracts, contract rights,
chattel paper, documents, instruments, and general intangibles (any and
all such accounts, contracts, contract rights, chattel paper,
documents, instruments, warehouse receipts, bills of lading, Material
Contracts, and general intangibles being the "Receivables", and any and
all such security agreements, guaranties, leases and other contracts
being the "Related Contracts");
(d) in furtherance of, and not in limitation of, clause (c),
all Material Contracts, together with (i) all rights of such Grantor to
receive monies due and to become due under or pursuant to each Material
Contract, (ii) all rights of such Grantor to receive proceeds of any
insurance, indemnity, warranty, guaranty or collateral security with
respect to each Material Contract, (iii) all claims of such Grantor for
damages arising out
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of or for breach or default under each Material Contract, (iv) all
rights of such Grantor to terminate a Material Contract, to perform
thereunder and to compel performance and otherwise exercise all
remedies thereunder and (v) to the extent not included in the
foregoing, all proceeds of any and all of the foregoing;
(e) all Intellectual Property Collateral of such Grantor;
(f) the Collateral Account and each Lockbox (including all
deposits and investments therein and all earnings thereon);
(g) all books, records, writings, data bases, information and
other property relating to, used or useful in connection with,
evidencing, embodying, incorporating or referring to, any of the
foregoing in this Section 2.1;
(h) all Intercompany Notes in which such Grantor has an
interest (including each Intercompany Note described in Schedule V
hereto);
(i) all interest and other payments and rights with respect to
each Intercompany Note in which such Grantor has an interest;
(j) all of such Grantor's other property and rights of every
kind and description and interests therein; and
(k) all products, offspring, rents, issues, profits, returns,
income and proceeds of and from any and all of the foregoing Collateral
(including proceeds which constitute property of the types described in
clauses (a) through (j), and, to the extent not otherwise included, all
payments under insurance (whether or not the Administrative Agent is
the loss payee thereof) or any indemnity, warranty or guaranty, payable
by reason of loss or damage to or otherwise with respect to any of the
foregoing Collateral).
Notwithstanding the foregoing, "Collateral" shall not include any general
intangibles or other rights arising under any contracts, instruments, licenses
or other documents as to which the grant of a security interest would constitute
a violation of a valid and enforceable restriction in favor of a third party on
such grant, unless and until any required consents shall have been obtained.
Each Grantor agrees to use its best efforts to obtain any such required consent
with respect to any material item of such Collateral.
SECTION II.2. Security for Fixed Assets Obligations. This Agreement
secures the payment in cash in full of all Fixed Assets Obligations.
SECTION II.3. Delivery of Intercompany Notes. All Collateral comprised
of Intercompany Notes shall be delivered to and held by or on behalf of (and
endorsed to the order of) the Administrative Agent pursuant hereto, in suitable
form for transfer by delivery.
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SECTION II.4. Payments on Intercompany Notes. In the event that any
payment of principal or interest is to be made on any Intercompany Note at a
time when no Default of the nature referred to in Section 8.1.9 of the Credit
Agreement or Event of Default has occurred and is continuing or would result
therefrom, such payment may be paid directly to the applicable Grantor. If any
such Default or Event of Default has occurred and is continuing, then any such
payment shall be paid directly to the Administrative Agent.
SECTION II.5. Continuing Security Interest; Transfer of Notes. This
Agreement shall create a continuing security interest in the Collateral and
shall:
(a) remain in full force and effect until the Fixed Assets
Termination Date;
(b) be binding upon each Grantor, its successors, transferees
and assigns; and
(c) inure, together with the rights and remedies of the
Administrative Agent hereunder, to the benefit of the Administrative
Agent and each other Secured Party.
Without limiting the generality of the foregoing clause (c), any Fixed Assets
Secured Party may assign or otherwise transfer (in whole or in part) any Fixed
Assets Loan Commitment or Fixed Assets Loan held by it to any other Person, and
such other Person shall thereupon become vested with all the rights and benefits
in respect thereof granted to such Fixed Assets Security Party under any Loan
Document (including this Agreement) 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. Upon (i) the sale, transfer or other
disposition of Collateral in accordance with the Credit Agreement or (ii) the
Fixed Assets Termination Date, the security interests granted herein shall
automatically terminate and all rights to the applicable Collateral shall revert
to the applicable Grantor with respect to (A) such Collateral (in the case of
clause (i)) or (B) all Collateral (in the case of clause (ii)). Upon any such
sale, transfer, disposition or termination, the Administrative Agent will, at
such Grantor's sole expense, execute and deliver to such Grantor, without any
representations, warranties or recourse, such documents (including applicable
Intercompany Notes) as such Grantor shall reasonably request to evidence such
termination or release.
SECTION II.6. Grantor Remains Liable. Anything herein to the contrary
notwithstanding:
(a) each Grantor will remain liable under the contracts and
agreements included in the Collateral to the extent set forth therein,
and will perform all of its duties and obligations under such contracts
and agreements to the same extent as if this Agreement had not been
executed;
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(b) the exercise by the Administrative Agent of any of its
rights hereunder will not release any Grantor from any of its duties or
obligations under any such contracts or agreements included in the
Collateral; and
(c) neither the Administrative Agent nor any other Fixed
Assets Secured Party will have any obligation or liability under any
such contracts or agreements included in the Collateral by reason of
this Agreement, nor will the Administrative Agent or any other Fixed
Assets Secured Party be obligated to perform any of the obligations or
duties of any Grantor thereunder or to take any action to collect or
enforce any claim for payment assigned hereunder.
SECTION II.7. Security Interest Absolute. All rights of the
Administrative Agent and the security interests granted to the Administrative
Agent hereunder, and all obligations of each Grantor hereunder, shall be
absolute and unconditional, irrespective of:
(a) any lack of validity or enforceability of any Loan
Document;
(b) the failure of any Fixed Assets Secured Party
(i) to assert any claim or demand or to enforce any
right or remedy against the Borrowers, any other Obligor or
any other Person under the provisions of any Loan Document or
otherwise or
(ii) to exercise any right or remedy against any
guarantor of, or collateral securing, any Fixed Assets
Obligations;
(c) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Fixed Assets Obligations or any
other extension, compromise or renewal of any Fixed Assets Obligations;
(d) any reduction, limitation, impairment or termination of
any Fixed Assets Obligations for any reason (other than the repayment
in full and in cash of all Fixed Assets Obligations), including any
claim of waiver, release, surrender, alteration or compromise, and
shall not be subject to (and each Grantor 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 Fixed Assets Obligations or
otherwise;
(e) any amendment to, rescission, waiver or other modification
of, or any consent to departure from, any of the terms of any Loan
Document;
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(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 Fixed Assets Obligations;
or
(g) any other circumstances which might otherwise constitute a
defense available to, or a legal or equitable discharge of, any
Borrower, any other Obligor, any surety or any guarantor.
SECTION II.8. Postponement of Subrogation, etc. Each Grantor 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 Fixed Assets Termination Date. Any amount paid to any
Grantor on account of any payment made hereunder prior to the Fixed Assets
Termination Date shall be held in trust for the benefit of the Fixed Assets
Secured Parties and shall immediately be paid to the Administrative Agent for
the ratable benefit of the Fixed Assets Secured Parties and credited and applied
against the Fixed Assets Obligations, whether matured or unmatured, in
accordance with the terms of the Credit Agreement; provided, however, that if:
(a) such Grantor has made payment to the Administrative Agent
for the ratable benefit of the Fixed Assets Secured Parties of all or
any part of the Fixed Assets Obligations; and
(b) the Fixed Assets Termination Date has occurred,
each Fixed Assets Secured Party agrees that, at the requesting Grantor's
request, the Administrative Agent, on behalf of the Fixed Assets Secured
Parties, will execute and deliver to such Grantor appropriate documents (without
recourse and without representation or warranty) necessary to evidence the
transfer by subrogation to such Grantor of an interest in the Fixed Assets
Obligations resulting from such payment by such Grantor. In furtherance of the
foregoing, prior to the Fixed Assets Termination Date, each Grantor shall
refrain from taking any action or commencing any proceeding against any Borrower
or any other Obligor (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
Fixed Assets Secured Party.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION III.1. Representations and Warranties. Each Grantor represents
and warrants to each Fixed Assets Secured Party as set forth in this Article
III.
SECTION III.2. Location of Collateral, etc. All of the Equipment,
Inventory and Lockboxes of such Grantor are respectively located at the places
specified in Item 3 of the
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Perfection Certificate. None of the Equipment and Inventory has, within the four
months preceding the date of this Agreement if then owned by such Grantor, been
located at any place other than the places specified in Item 3 of the Perfection
Certificate. The place of business and chief executive office of such Grantor
and the office where such Grantor keeps its records concerning the Receivables,
and all originals of all chattel paper which evidence Receivables are located at
the address set forth in Item 3 of the Perfection Certificate. Such Grantor has
no trade names other than those specified in Item 1 of the Perfection
Certificate. During the four months preceding the date hereof, such Grantor has
not been known by any legal name nor has it had a federal taxpayer
identification number different from the one set forth on Item 2 of the
Perfection Certificate, nor has such Grantor been the subject of any merger or
other corporate reorganization, except as set forth in Item 1 of the Perfection
Certificate. If the Collateral includes any Inventory located in the State of
California, such Grantor is not a "retail merchant" within the meaning of
Section 9102 of the California U.C.C. All Receivables evidenced by a promissory
note or other instrument, negotiable document or chattel paper have been duly
endorsed and accompanied by duly executed instruments of transfer or assignment,
all in form and substance reasonably satisfactory to the Administrative Agent
and delivered and pledged to the Administrative Agent pursuant to Section 4.6.
Such Grantor is not a party to any Federal, State or local government contract
except as set forth in Item 13 of the Perfection Certificate.
SECTION III.3. Ownership, No Liens, etc. Such Grantor owns its
Collateral free and clear of any Lien, except for the security interest created
by this Agreement, the Lien in favor of the Current Assets Secured Parties and
Permitted Liens. No effective financing statement or other instrument similar in
effect covering all or any part of the Collateral is on file in any recording
office, except such as may have been filed in favor of the Administrative Agent
relating to this Agreement or as have been filed in connection with Permitted
Liens.
SECTION III.4. Possession and Control. Such Grantor has exclusive
possession and control of its Equipment and Inventory except where the absence
of possession and control results from actions of such Grantor in the ordinary
course of business.
SECTION III.5. Negotiable Documents, Instruments and Chattel Paper.
Such Grantor has, contemporaneously herewith, delivered to the Administrative
Agent possession of all originals of all negotiable documents, instruments and
chattel paper currently owned or held by such Grantor (duly endorsed in blank,
if requested by the Administrative Agent).
SECTION III.6. Intellectual Property Collateral. With respect to any
Intellectual Property Collateral owned by such Grantor the loss, impairment or
infringement of which might have a Material Adverse Effect:
(a) such Intellectual Property Collateral is subsisting and
has not been adjudged invalid or unenforceable, in whole or in part;
(b) such Intellectual Property Collateral is valid and
enforceable;
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(c) such Grantor has made all necessary filings and
recordations to protect its interest in such Intellectual Property
Collateral, including (if permissible) recordations of all of its
interests in the Patent Collateral and Trademark Collateral in the
United States Patent and Trademark Office and its claims to the
Copyright Collateral in the United States Copyright Office;
(d) such Grantor is the exclusive owner of the entire and
unencumbered right, title and interest in and to such Intellectual
Property Collateral and no claim has been made that the use of such
Intellectual Property Collateral does or may violate the asserted
rights of any third party which could reasonably be expected to have a
Material Adverse Effect (except for (i) Liens created under the Loan
Documents, and (ii) Permitted Liens and except for rights of licensees
under licenses of such Intellectual Property Collateral in the ordinary
course of business); and
(e) with respect to any Intellectual Property Collateral that
has been registered, such Grantor has performed and will continue to
perform all acts and has paid and will continue to pay all required
fees and Taxes to maintain each and every such item of Intellectual
Property Collateral in full force and effect in the United States.
Such Grantor owns directly or is entitled to use by license or otherwise, all
patents, Trademarks, Trade Secrets, copyrights, licenses, technology, know-how,
processes and rights with respect to any of the foregoing necessary for or of
importance to the conduct of such Grantor's business as currently conducted.
SECTION III.7. Validity, etc. This Agreement creates a valid first
priority security interest in the Collateral securing the payment of the Fixed
Assets Obligations, and
(a) in the case of Collateral comprised of negotiable
documents, instruments and chattel paper, upon the delivery of such
Collateral to the Administrative Agent, such security interest will be
a valid first-priority, perfected security interest; and
(b) in the case of all other Collateral, upon the filing of
the U.C.C. financing statements (Form U.C.C.-1) delivered by such
Grantor to the Administrative Agent with respect to such Collateral,
such security interest will be a valid first-priority, perfected
security interest.
Each Grantor has filed all U.C.C. financing statements (Form U.C.C.-1) referred
to above in the appropriate offices therefor (or has provided the Administrative
Agent with copies thereof suitable for filing in such offices) and has taken all
of the other actions referred to above necessary to create perfected and
first-priority security interests in the applicable Collateral.
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SECTION III.8. Authorization, Approval, etc. Except as have been
obtained or made and are in full force and effect, no material authorization,
material approval or other action by, and no material notice to or material
filing with, any Governmental Authority or regulatory body is required either
(a) for the grant by such Grantor of the security interest granted hereby, the
pledge by such Grantor of any Collateral pursuant hereto or for the execution,
delivery and performance of this Agreement by such Grantor or (b) for the
perfection of or the exercise by the Administrative Agent of its rights and
remedies hereunder.
SECTION III.9. Compliance with Laws. Such Grantor 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.
SECTION III.10. As to Intercompany Notes. In the case of each
Intercompany Note, all of such Intercompany Notes have been duly authorized,
executed, endorsed, issued and delivered, and are the legal, valid and binding
obligation of the issuers thereof, and are not in default.
ARTICLE IV
COVENANTS
SECTION IV.1. Certain Covenants. Each Grantor covenants and agrees
that, at all times prior to the Fixed Assets Termination Date, such Grantor
will, unless the Fixed Assets Required Lenders shall otherwise consent in
writing, perform, comply with and be bound by the obligations set forth in this
Article IV.
SECTION IV.2. As to Equipment and Inventory. Such Grantor hereby agrees
that it will:
(a) keep all the Equipment and Inventory (other than Inventory
sold in the ordinary course of business) at the places therefor
specified in Section 3.2 or, upon 30 days' prior written notice to the
Administrative Agent, at such other places in a jurisdiction where all
representations and warranties set forth in Article III shall be true
and correct in all material respects, and all action required pursuant
to the first sentence of Section 4.6 shall have been taken with respect
to the Equipment and Inventory;
(b) cause the Equipment to be maintained and preserved in its
existing condition, ordinary wear and tear excepted, or in the case of
any loss or damage to any of the Equipment, as soon as practicable
after the occurrence thereof, make or cause to be made all repairs,
replacements and other improvements in connection therewith which are
necessary or desirable to such end; and promptly furnish to the
Administrative Agent a
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statement respecting any loss or damage to any of the Equipment which
is material in amount; and
(c) pay promptly when due all property and other Taxes,
assessments and governmental charges or levies imposed upon, and all
claims (including claims for labor, materials and supplies) against,
the Equipment and Inventory, except to the extent the validity thereof
is being contested in good faith by appropriate proceedings and for
which adequate reserves in accordance with GAAP have been set aside.
SECTION IV.3. As to Receivables. (a) Such Grantor will keep its chief
executive office and the office(s) where it keeps its records concerning the
Receivables, and all originals of all chattel paper which evidences Receivables,
located at the address(es) set forth in Section 3.2 and shall keep its other
places of business at the addresses set forth in Item 1 of the Perfection
Certificate, or, upon 30 days' prior written notice to the Administrative Agent,
at such other locations in a jurisdiction where all actions required by the
first sentence of Section 4.6 shall have been taken with respect to the
Receivables and such other Collateral; not change its name or federal taxpayer
identification number except upon 30 days' prior written notice to the
Administrative Agent; hold and preserve such records; and permit representatives
of the Administrative Agent at any time during normal business hours to inspect
and make abstracts from such records.
(b) Such Grantor shall have the right to collect, demand, receive,
receipt for, xxx for, compound and give acquittances for any and all amounts due
or to become due on Receivables and settle and adjust disputes and claims with
its customers and account debtors, handle returns and recoveries and grant
discounts, credits and allowances with respect to Receivables in the ordinary
course of business so long as no Default of the nature set forth in Section
8.1.9 of the Credit Agreement nor any Event of Default shall have occurred and
be continuing.
(c) All proceeds of Collateral received by such Grantor shall be
deposited into a deposit account of such Grantor, unless, upon the occurrence
and during the continuance of a Default of the nature set forth in Section 8.1.9
of the Credit Agreement or an Event of Default, such Grantor is otherwise
notified in writing by the Administrative Agent. Following any such notice by
the Administrative Agent to such Grantor pursuant to this Section, all proceeds
of Collateral received by such Grantor shall be delivered in kind for deposit to
an account or accounts specified by the Administrative Agent (collectively, the
"Collateral Account"). Such proceeds of Collateral received by such Grantor
shall, prior to deposit in the Collateral Account, be held separate and apart
from, and not commingled with, any other property and in express trust for the
benefit of the Administrative Agent until delivery thereof is made to the
Collateral Account.
(d) During any time that an Event of Default shall have occurred and be
continuing, the Administrative Agent shall have the right to apply any amount in
the Collateral Account to the payment of any Fixed Assets Obligations which are
due and payable, including any Fixed Assets
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Obligations that have been declared due and payable pursuant to Section 8.3 of
the Credit Agreement.
(e) With respect to the Collateral Account, it is hereby confirmed and
agreed that (i) deposits in each Collateral Account are subject to a security
interest as contemplated hereby, (ii) each such Collateral Account shall be
under the sole dominion and control of the Administrative Agent and (iii) the
Administrative Agent shall have the sole right of withdrawal over such
Collateral.
SECTION IV.4. As to Collateral. (a) Until the occurrence and
continuance of a Default of the nature set forth in Section 8.1.9 of the Credit
Agreement or an Event of Default, and such time as the Administrative Agent
shall notify such Grantor of the revocation of such power and authority, such
Grantor (i) may in the ordinary course of its business (except to the extent
prohibited under any Loan Document) at its own expense, refine, process, store,
transport, sell, lease or furnish under the contracts of service any of the
Inventory normally held by such Grantor for such purpose, and use and consume,
in the ordinary course of its business (except to the extent prohibited under
the Credit Agreement or any other Loan Document), any raw materials, including
work in process or materials normally held by such Grantor for such purpose,
(ii) will, at its own expense, endeavor to collect, as and when due, all amounts
due with respect to any Collateral, including the taking of such action with
respect to such collection as the Administrative Agent may reasonably request
upon the occurrence and during the continuance of a Default of the nature set
forth in Section 8.1.9 of the Credit Agreement or an Event of Default or, in the
absence of such request, as such Grantor may deem advisable, and (iii) may
grant, in the ordinary course of business (except to the extent prohibited under
any Loan Document), to any party obligated on any of the Collateral, any rebate,
refund or allowance to which such party may be lawfully entitled, and may
accept, in connection therewith, the return of goods, the sale or lease of which
shall have given rise to such Collateral. The Administrative Agent, however,
may, at any time upon the occurrence and during the continuance of a Default of
the nature set forth in Section 8.1.9 of the Credit Agreement or an Event of
Default, notify any parties obligated on any of the Collateral to make payment
to the Administrative Agent of any amounts due or to become due thereunder and
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 indebtedness
thereunder or evidenced thereby. Upon request of the Administrative Agent, upon
the occurrence and during the continuance of a Default of the nature set forth
in Section 8.1.9 of the Credit Agreement or an Event of Default, such Grantor
will, at its own expense, notify any parties obligated on any of the Collateral
to make payment to the Administrative Agent of any amounts due or to become due
thereunder.
(b) Upon the occurrence and during the continuance of a Default of the
nature set forth in Section 8.1.9 of the Credit Agreement or an Event of
Default, the Administrative Agent is authorized to endorse, in the name of such
Grantor, any item, howsoever received by the Administrative Agent, representing
any payment on or other proceeds of any of the Collateral.
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SECTION IV.5. As to Intellectual Property Collateral. Each Grantor
covenants and agrees to comply with the following provisions as such provisions
relate to any Intellectual Property Collateral of such Grantor:
(a) such Grantor will not (i) do any act, or omit to do any
act, whereby any of the Patent Collateral may lapse or become abandoned
or dedicated to the public or unenforceable, (ii) permit any of its
licensees to, (A) fail to continue to use any of the Trademark
Collateral in order to maintain all of the Trademark Collateral in full
force free from any claim of abandonment for non-use, (B) fail to
maintain as in the past the quality of products and services offered
under all of the Trademark Collateral, (C) fail to employ all of the
Trademark Collateral registered with any Federal or State authority
with an appropriate notice of such registration, (D) adopt or use any
other Trademark which is confusingly similar or a colorable imitation
of any of the Trademark Collateral, (E) use any of the Trademark
Collateral registered with any Federal or State authority except for
the uses for which registration or application for registration of all
of the Trademark Collateral has been made, or (F) do or permit any act
or knowingly omit to do any act whereby any of the Trademark Collateral
may lapse or become invalid or unenforceable or (iii) do or permit any
act or knowingly omit to do any act whereby any of the Copyright
Collateral or any of the Trade Secrets Collateral may lapse or become
invalid or unenforceable or placed in the public domain except upon
expiration of the end of an unrenewable term of a registration thereof,
unless such Grantor shall either (x) reasonably and in good faith determine (and
notice of such determination shall have been delivered to the Administrative
Agent) that any of the Intellectual Property Collateral is not of material
economic value to such Grantor, or (y) in the exercise of its reasonable
business judgment determines to do otherwise;
(b) such Grantor shall notify the Administrative Agent
promptly if it knows, or has reason to know, that any application or
registration relating to any material item of the Intellectual Property
Collateral may become abandoned or dedicated to the public or placed in
the public domain or invalid or unenforceable, or of any adverse
determination or development (including the institution of, or any such
determination or development in, any proceeding in the United States
Patent and Trademark Office, the United States Copyright Office or any
U.S. court) regarding such Grantor's ownership of any material item of
the Intellectual Property Collateral, its right to register the same or
to keep and maintain and enforce the same;
(c) in no event will such Grantor or any of its agents,
employees, designees or licensees file an application for the
registration of any Intellectual Property Collateral with the United
States Patent and Trademark Office or the United States Copyright
Office, unless it promptly informs the Administrative Agent, and upon
request of the Administrative Agent, executes and delivers any and all
agreements, instruments,
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documents and papers as the Administrative Agent may reasonably request
to evidence the Administrative Agent's security interest in such
Intellectual Property Collateral and the goodwill and general
intangibles of such Grantor relating thereto or represented thereby;
(d) unless such Grantor shall otherwise determine in the
exercise of its reasonable business judgment, such Grantor will take
all necessary steps, including in any proceeding before the United
States Patent and Trademark Office or the United States Copyright
Office, to maintain and pursue any application (and to obtain the
relevant registration) filed with respect to, and to maintain any
registration of any material item of the Intellectual Property
Collateral, including the filing of applications for renewal,
affidavits of use, affidavits of incontestability and opposition,
interference and cancellation proceedings and the payment of fees and
Taxes (except to the extent that dedication, abandonment or
invalidation is permitted under the foregoing clauses (a), (b) and
(c)); and
(e) such Grantor will, contemporaneously herewith, execute and
deliver to the Administrative Agent a Patent Security Agreement,
Trademark Security Agreement and Copyright Security Agreement in the
forms of Exhibit A, Exhibit B and Exhibit C hereto, and shall execute
and deliver to the Administrative Agent any other document required to
acknowledge or register or perfect the Administrative Agent's interest
in any material item of the Intellectual Property Collateral.
SECTION IV.6. Further Assurances, etc. Such Grantor agrees that, from
time to time at its own expense, it will promptly execute and deliver all
further instruments and documents, and take all further action, that may be
necessary or desirable, or that the Administrative Agent may reasonably request,
in order to perfect, preserve 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.
Without limiting the generality of the foregoing, such Grantor will:
(a) if any Receivable shall be evidenced by a promissory note
or other instrument, negotiable document or chattel paper, deliver and
pledge to the Administrative Agent hereunder such promissory note,
instrument, negotiable document or chattel paper duly endorsed and
accompanied by duly executed instruments of transfer or assignment, all
in form and substance satisfactory to the Administrative Agent;
(b) execute and file such financing or continuation
statements, or amendments thereto, and such other instruments or
notices (including any assignment of claim form under or pursuant to
the federal assignment of claims statute, 31 U.S.C. Section 3726, any
successor or amended version thereof or any regulation promulgated
under or pursuant to any version thereof), as may be necessary or
desirable, or as the Administrative Agent
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may request, in order to perfect and preserve the security interests
and other rights granted or purported to be granted to the
Administrative Agent hereby; and
(c) furnish to the Administrative Agent, from time to time at
the Administrative Agent's request, statements and schedules further
identifying and describing the Collateral and such other reports in
connection with the Collateral as the Administrative Agent may
reasonably request, all in reasonable detail.
With respect to the foregoing and the grant of the security interest hereunder,
such Grantor 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 Grantor 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.
SECTION IV.7. As to Intercompany Notes. Each Grantor will, at all
times, keep pledged to the Administrative Agent pursuant hereto on a first
priority, perfected basis all Intercompany Notes and all interest, principal and
other proceeds received by the Administrative Agent with respect to the
Intercompany Notes. Each Grantor agrees after any Default of the nature referred
to in Section 8.1.9 of the Credit Agreement or any Event of Default shall have
occurred and be continuing, promptly upon receipt of notice thereof by such
Grantor 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 interest, all principal, all other cash
payments and all proceeds of the Intercompany Notes. Each Grantor will not
amend, supplement or otherwise modify, or permit, consent or suffer to occur any
amendment, supplement or modification of any terms or provisions contained in,
or applicable to, any Intercompany Notes included in the Collateral if the
effect thereof is to impair, or is in any manner adverse to, the rights or
interests of the Administrative Agent or any other Fixed Assets Secured Party
hereunder or under any Loan Document, without the prior written consent of the
Administrative Agent.
ARTICLE V
THE ADMINISTRATIVE AGENT
SECTION V.1. Administrative Agent Appointed Attorney-in-Fact. Each
Grantor hereby irrevocably appoints the Administrative Agent as such Grantor's
attorney-in-fact, with full authority in the place and stead of such Grantor and
in the name of such Grantor or otherwise, from time to time in the
Administrative Agent's discretion, upon the occurrence and during the
continuance of a Default of the nature set forth in Section 8.1.9 of the Credit
Agreement or an 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:
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(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;
(b) to receive, endorse and collect any drafts or other
instruments, documents and chattel paper, in connection with clause (a)
above;
(c) to file any claims or take any action or institute any
proceedings which the Administrative Agent may deem necessary or
desirable 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; and
(d) to perform the affirmative obligations of such Grantor
hereunder (including all obligations of such Grantor pursuant to
Section 4.6).
Such Grantor hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section is irrevocable and coupled with an interest.
SECTION V.2. Administrative Agent May Perform. If any Grantor 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
Grantor pursuant to Section 6.3.
SECTION V.3. Administrative Agent Has No Duty. The powers conferred on
the Administrative Agent hereunder are solely to protect its interest (on behalf
of the Fixed Assets 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 investment 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 V.4. Reasonable Care. The Administrative Agent is required to
exercise reasonable care in the custody and preservation of any of the
Collateral in its possession; provided, however, that the Administrative Agent
shall be deemed to have exercised reasonable care in the custody and
preservation of any of the Collateral, if it takes such action for that purpose
as any Grantor reasonably requests in writing from time to time, but failure of
the Administrative Agent to comply with any such request at any time shall not
in itself be deemed a
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failure to exercise reasonable care. If an Event of Default has occurred and is
continuing, the Administrative Agent shall not be required to comply with any
request of the Grantor with respect to the matters described in this Section.
ARTICLE VI
REMEDIES
SECTION VI.1. Certain Remedies. If any Event of Default shall have
occurred and be continuing:
(a) 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 affected Collateral) and also may
(i) require each Grantor to, and such Grantor hereby
agrees that it will, at its expense and upon request of the
Administrative Agent forthwith, assemble all or part of the
Collateral as directed by the Administrative Agent and make it
available to the Administrative Agent at a place to be
designated by the Administrative Agent which is reasonably
convenient to both parties, and
(ii) without notice except as specified below, 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 Grantor agrees
that, to the extent notice of sale shall be required by law,
at least ten days prior notice to such Grantor 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 such 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 therefor, and such sale may, without further
notice, be made at the time and place to which it was so
adjourned.
(b) 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 against all or any part of the Fixed Assets Obligations as
follows:
(i) first, to the payment of any amounts payable to
the Administrative Agent pursuant to Section 10.3 of the
Credit Agreement and Section 6.3;
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(ii) second, to the equal and ratable payment of
Fixed Assets Obligations, in accordance with each Fixed Assets
Secured Party's Fixed Assets Obligations owing to it under or
pursuant to the Credit Agreement or any other Loan Document,
or under or pursuant to any Rate Protection Agreement included
in the Fixed Assets Obligations, as to each Fixed Assets
Secured Party, applied
(A) first to fees and expense reimbursements
then due to such Fixed Assets Secured Party,
(B) then to interest due to such Fixed
Assets Secured Party,
(C) then to pay or prepay principal of the
Fixed Assets Loans owing to, or to reduce the "credit
exposure" of, such Fixed Assets Secured Party under
any Rate Protection Agreement, as the case may be,
and
(D) then to pay the remaining outstanding
Fixed Assets Obligations;
(iii) third, without duplication of any amounts paid
pursuant to clause (b)(ii) above, to the Indemnified Parties
to the extent of any amounts owing pursuant to Section 10.4 of
the Credit Agreement; and
(iv) fourth, to be held as additional collateral
security until the Fixed Assets Termination Date, after which
such remaining cash proceeds shall be paid over to the
applicable Grantor or to whomsoever may be lawfully entitled
to receive such surplus.
For purposes of this Agreement, the "credit exposure" at any time of
any Fixed Assets Secured Party with respect to a Rate Protection
Agreement to which such Fixed Assets Secured Party is a party shall be
determined at such time in accordance with the customary methods of
calculating credit exposure under similar arrangements by the
counterparty to such arrangements, taking into account potential
interest rate movements and the respective termination provisions and
notional principal amount and term of such Rate Protection Agreement.
(c) The Administrative Agent may
(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,
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(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
such Grantor'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 such
Grantor) endorsements, assignments, stock powers and other
instruments of conveyance or transfer with respect to all or
any of the Collateral.
SECTION VI.2. Compliance with Restrictions. Each Grantor 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 or official, and such
Grantor 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 such Grantor for
any discount allowed by the reason of the fact that such Collateral is sold in
compliance with any such limitation or restriction.
SECTION VI.3. Indemnity and Expenses. Each Grantor 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 wilful misconduct and each Grantor will upon demand pay 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:
(a) the administration of this Agreement;
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(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 Grantor to perform or observe any of
the provisions hereof.
ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION VII.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 VII.2. Amendments; etc. No amendment to or waiver of any
provision of this Agreement nor consent to any departure by any Grantor herefrom
shall in any event be effective unless the same shall be in writing and signed
by the Administrative Agent (on behalf of the Lenders or the Required Lenders,
as the case may be) and each Grantor and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
SECTION VII.3. Protection of Collateral. The Administrative Agent may
from time to time, at its option, perform any act which each Grantor agrees
hereunder to perform and which such Grantor 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 VII.4. Addresses for Notices. All notices and other
communications provided for hereunder shall be in writing and addressed,
delivered or transmitted, if to any Grantor, 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 as 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)
if mailed and properly addressed with postage prepaid or if properly addressed
and sent by pre-paid courier service, shall be deemed given when received, or
(b) if transmitted by facsimile, shall be deemed given when transmitted (and
telephonic confirmation of receipt thereof has been received).
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SECTION VII.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 thereof.
SECTION VII.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 VII.7. Counterparts; Effectiveness. This Agreement may be
executed by the parties hereto in several counterparts, each of which shall be
deemed to be an original (whether such counterpart is originally executed or an
electronic copy of an original) and all of which shall constitute together but
one and the same agreement. This Agreement shall become effective as of the date
first above written and be binding upon a Grantor when a counterpart hereof
executed on behalf of such Grantor shall have been received by the
Administrative Agent.
SECTION VII.8. Governing Law. THIS AGREEMENT SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK,
EXCLUDING THE LAW OF CONFLICTS BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO
NATIONAL BANKS, EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE
SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR
COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF
NEW YORK.
SECTION VII.9. Additional Grantors. Upon the execution and delivery by
any other Person of an instrument in the form of Annex I hereto, together with
each Schedule thereto, such Person shall become a "Grantor" hereunder with the
same force and effect as if originally named as a Grantor herein. The execution
and delivery of any such instrument shall not require the consent of any other
Grantor hereunder. The rights and obligations of each Grantor hereunder shall
remain in full force and effect notwithstanding the addition of any new Grantor
as a party to this Agreement.
SECTION VII.10. Agreement Subject to Revolver Intercreditor Agreement.
Notwithstanding anything to the contrary contained herein, it is expressly
understood and agreed by the parties hereto that this Agreement shall be subject
to the terms of the Revolver Intercreditor Agreement.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, each Grantor has caused this Agreement to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
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:
26
STERLING CHEMICALS INTERNATIONAL, INC.
By
---------------------------------------
Title:
THE CIT GROUP/BUSINESS CREDIT, INC.
as Administrative Agent, on behalf of
the Fixed Assets Secured Parties
By
---------------------------------------
Title:
27
SCHEDULE I
to Security Agreement
([NAME OF GRANTOR])
Perfection Certificate
See Exhibit M to the Credit Agreement
28
SCHEDULE II
to Security Agreement
([NAME OF GRANTOR])
Item A. Patents
Issued Patents
--------------
Patent No. Issue Date Inventor(s) Title
---------- ---------- ----------- -----
Pending Patent Applications
---------------------------
Serial No. Filing Date Inventor(s) Title
---------- ----------- ----------- -----
Patent Applications in Preparation
----------------------------------
Expected
Docket No. Filing Date Inventor(s) Title
---------- ----------- ----------- -----
Item B. Patent Licenses
Effective Expiration Subject
Licensor Licensee Date Date Matter
-------- -------- --------- ---------- -------
29
SCHEDULE III
to Security Agreement
([NAME OF GRANTOR])
Item A. Trademarks
Registered Trademarks
---------------------
Trademark Registration No. Registration Date
--------- ---------------- -----------------
Pending Trademark Applications
------------------------------
Trademark Serial No. Filing Date
--------- ---------- -----------
Trademark Applications in Preparation
-------------------------------------
Expected Products/
Trademark Docket No. Filing Date Services
--------- ---------- ----------- ---------
Item B. Trademark Licenses
Effective Expiration
Trademark Licensor Licensee Date Date
--------- -------- -------- --------- ----------
30
SCHEDULE IV
to Security Agreement
([NAME OF GRANTOR])
Item A. Copyrights
Registered Copyrights
---------------------
Registration No. Registration Date Author(s) Title
---------------- ----------------- --------- -----
Copyright Pending Registration Applications
-------------------------------------------
Serial No. Filing Date Author(s) Title
---------- ----------- --------- -----
Copyright Registration Applications in Preparation
--------------------------------------------------
Expected
Docket No. Filing Date Author(s) Title
---------- ----------- --------- -----
Item B. Copyright Licenses
Effective Expiration Subject
Licensor Licensee Date Date Matter
-------- -------- --------- ---------- -------
31
SCHEDULE V
to Security Agreement
([NAME OF GRANTOR])
Trade Secret or Know-How Licenses
---------------------------------
Effective Expiration Subject
Licensor Licensee Date Date Matter
-------- -------- --------- ---------- -------
32
SCHEDULE VI
to Security Agreement
[NAME OF GRANTOR]
Intercompany Notes
Maximum Amount of
Intercompany Loans
Maker Evidenced Thereby Date
----- ------------------ ----
33
EXHIBIT A
PATENT SECURITY AGREEMENT
This PATENT SECURITY AGREEMENT (this "Agreement"), dated as of
____________, ____, is made between ___________________, a ____________________
(the "Grantor"), and THE CIT GROUP/BUSINESS CREDIT, INC., as administrative
agent (together with any successor(s) thereto in such capacity, the
"Administrative Agent") for each of the Fixed Assets Secured Parties.
W I T N E S S E T H :
WHEREAS, pursuant to a Revolving Credit Agreement, dated as of July __,
1999 (as amended, supplemented, amended and restated or otherwise modified from
time to time, the "Credit Agreement"), among Sterling Chemicals, Inc., a
Delaware corporation (the "Company"), Sterling Canada, Inc., a Delaware
corporation, Sterling Pulp Chemicals US, Inc., a Delaware corporation, Sterling
Pulp Chemicals, Inc., a Georgia corporation, Sterling Fibers, Inc., a Delaware
corporation, Sterling Chemicals Energy, Inc., a Delaware corporation, and
Sterling Chemicals International, Inc., a Delaware corporation (collectively,
the "Borrowers"), the various financial institutions as are, or may from time to
time become, parties thereto (the "Lenders"), DLJ Capital Funding, Inc., as the
Syndication Agent, Credit Suisse First Boston, as the Documentation Agent, and
the Administrative Agent, the Lenders and the Issuer have extended Commitments
to make Credit Extensions to the Borrowers;
WHEREAS, in connection with the Credit Agreement, the Grantor has
executed and delivered a Fixed Assets Security Agreement, dated as of July __,
1999 (as amended, supplemented, amended and restated or otherwise modified from
time to time, the "Security Agreement");
WHEREAS, as a condition precedent to the making of the Credit
Extensions (including the initial Credit Extension) under the Credit Agreement
and pursuant to clause (e) of Section 4.5 of the Security Agreement, the Grantor
is required to execute and deliver this Agreement and to grant to the
Administrative Agent a continuing security interest in all of the Patent
Collateral (as defined below) to secure all Fixed Assets Obligations;
WHEREAS, the Grantor has duly authorized the execution, delivery and
performance of this Agreement; and
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in order to induce (i) the
Fixed Assets Lenders to make
34
Fixed Assets Loans (including the initial Fixed Assets Loans) to the Borrowers
pursuant to the Credit Agreement and (ii) the Fixed Assets Secured Parties to
enter into Rate Protection Agreements, the Grantor agrees, for the benefit of
each Fixed Assets Secured Party, as follows:
SECTION 1. Definitions. Unless otherwise defined herein or the context
otherwise requires, terms used in this Agreement, including its preamble and
recitals, have the meanings provided (or incorporated by reference) in the
Security Agreement.
SECTION 2. Grant of Security Interest. For good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, to
secure all of the Fixed Assets Obligations, the Grantor does hereby pledge and
hypothecate to the Administrative Agent, and grant to the Administrative Agent a
security interest in, for its benefit and the benefit of each Fixed Assets
Secured Party, all of the following property (the "Patent Collateral"), whether
now owned or hereafter acquired or existing by it:
(a) all letters patent and applications for letters patent in
the United States, including all patent applications in preparation for
filing in the United States and including each patent and patent
application referred to in Item A of Schedule I attached hereto;
(b) all reissues, divisions, continuations,
continuations-in-part, extensions, renewals and reexaminations of any
of the items described in clause (a);
(c) all patent licenses in the United States, including each
patent license referred to in Item B of Schedule I attached hereto; and
(d) all proceeds of, and rights associated with, the foregoing
(including license royalties and proceeds of infringement suits), the
right to xxx third parties for past, present or future infringements of
any patent or patent application, referred to in clauses (a) or (b)
above, and for breach or enforcement of any patent license referred to
in clause (c) above.
SECTION 3. Security Agreement. This Agreement has been executed and
delivered by the Grantor for the purpose of registering the security interest of
the Administrative Agent in the Patent Collateral with the United States Patent
and Trademark Office. The security interest granted hereby has been granted as a
supplement to, and not in limitation of, the security interest granted to the
Administrative Agent for its benefit and the benefit of each Fixed Assets
Secured Party under the Security Agreement. The Security Agreement (and all
rights and remedies of the Administrative Agent and each Fixed Assets Secured
Party thereunder) shall remain in full force and effect in accordance with its
terms.
SECTION 4. Release of Security Interest. Upon (i) the sale, transfer or
other disposition of any Patent Collateral in accordance with the Credit
Agreement or (ii) the Fixed Assets
Exhibit A
-2-
35
Termination Date, the Administrative Agent shall, at the Grantor's expense,
execute and deliver to the Grantor all instruments and other documents as may be
necessary or proper to release the lien on and security interest in the Patent
Collateral which has been granted hereunder.
SECTION 5. Acknowledgment. The Grantor does hereby further acknowledge
and affirm that the rights and remedies of the Administrative Agent with respect
to the security interest in the Patent Collateral granted hereby are more fully
set forth in the Security Agreement, the terms and provisions of which
(including the remedies provided for therein) are incorporated by reference
herein as if fully set forth herein.
SECTION 6. Loan Document, etc. 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 of the Credit Agreement.
SECTION 7. Counterparts. This Agreement may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an original
(whether such counterpart is originally executed or an electronic copy of an
original) and all of which shall constitute together but one and the same
agreement. This Agreement shall become effective and binding as of the date
first above written when a counterpart hereof executed on behalf of the Grantor
shall have been received by the Administrative Agent.
SECTION 8. Agreement Subject to Revolver Intercreditor Agreement.
Notwithstanding anything to the contrary contained herein, it is expressly
understood and agreed by the parties hereto that this Agreement shall be subject
to the terms of the Revolver Intercreditor Agreement.
Exhibit A
-3-
36
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the day and year first above written.
[NAME OF GRANTOR]
By
------------------------------------
Title:
THE CIT GROUP/BUSINESS CREDIT, INC. as
Administrative Agent, on behalf of
the Fixed Assets Secured Parties
By
------------------------------------
Title:
Exhibit A
-4-
37
SCHEDULE I
to Patent Security Agreement
Item A. Patents
Issued Patents
--------------
Patent No. Issue Date Inventor(s) Title
---------- ---------- ----------- -----
Pending Patent Applications
---------------------------
Serial No. Filing Date Inventor(s) Title
---------- ----------- ----------- -----
Patent Applications in Preparation
----------------------------------
Expected
Docket No. Filing Date Inventor(s) Title
---------- ----------- ----------- -----
Item B. Patent Licenses
Effective Expiration Subject
Licensor Licensee Date Date Matter
-------- -------- --------- ---------- -------
38
EXHIBIT B
to Security Agreement
TRADEMARK SECURITY AGREEMENT
This TRADEMARK SECURITY AGREEMENT (this "Agreement"), dated as of
____________, ____, is made between ___________________, a ____________________
(the "Grantor"), and THE CIT GROUP/BUSINESS CREDIT, INC., as administrative
agent (together with any successor(s) thereto in such capacity, the
"Administrative Agent") for each of the Fixed Assets Secured Parties.
W I T N E S S E T H :
WHEREAS, pursuant to a Revolving Credit Agreement, dated as of July __,
1999 (as amended, supplemented, amended and restated or otherwise modified from
time to time, the "Credit Agreement"), among Sterling Chemicals, Inc., a
Delaware corporation (the "Company"), Sterling Canada, Inc., a Delaware
corporation, Sterling Pulp Chemicals US, Inc., a Delaware corporation, Sterling
Pulp Chemicals, Inc., a Georgia corporation, Sterling Fibers, Inc., a Delaware
corporation, Sterling Chemicals Energy, Inc., a Delaware corporation, and
Sterling Chemicals International, Inc., a Delaware corporation (collectively,
the "Borrowers"), the various financial institutions as are, or may from time to
time become, parties thereto (the "Lenders"), DLJ Capital Funding, Inc., as the
Syndication Agent, Credit Suisse First Boston, as the Documentation Agent, and
the Administrative Agent, the Lenders and the Issuer have extended Commitments
to make Credit Extensions to the Borrowers;
WHEREAS, in connection with the Credit Agreement, the Grantor has
executed and delivered a Fixed Assets Security Agreement, dated as of July __,
1999 (as amended, supplemented, amended and restated or otherwise modified from
time to time, the "Security Agreement");
WHEREAS, as a condition precedent to the making of the Credit
Extensions (including the initial Credit Extension) under the Credit Agreement
and pursuant to clause (e) of Section 4.5 of the Security Agreement, the Grantor
is required to execute and deliver this Agreement and to grant to the
Administrative Agent a continuing security interest in all of the Trademark
Collateral (as defined below) to secure all Fixed Assets Obligations;
WHEREAS, the Grantor has duly authorized the execution, delivery and
performance of this Agreement; and
39
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in order to induce (i) the
Fixed Assets Lenders to make Fixed Assets Loans (including the initial Fixed
Assets Loans) to the Borrowers pursuant to the Credit Agreement, and (ii) the
Fixed Assets Secured Parties to enter into Rate Protection Agreements, the
Grantor agrees, for the benefit of each Fixed Assets Secured Party, as follows:
SECTION 1. Definitions. Unless otherwise defined herein or the context
otherwise requires, terms used in this Agreement, including its preamble and
recitals, have the meanings provided (or incorporated by reference) in the
Security Agreement.
SECTION 2. Grant of Security Interest. For good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, to
secure all of the Fixed Assets Obligations, the Grantor does hereby, pledge and
hypothecate to the Administrative Agent, and grant to the Administrative Agent a
security interest in, for its benefit and the benefit of each Fixed Assets
Secured Party, all of the following property (the "Trademark Collateral"),
whether now owned or hereafter acquired or existing by it:
(a) all trademarks, trade names, corporate names, company
names, business names, fictitious business names, trade styles, service
marks, certification marks, collective marks, logos, other source of
business identifiers, prints and labels on which any of the foregoing
have appeared or appear, designs and general intangibles of a like
nature (all of the foregoing items in this clause (a) being
collectively called a "Trademark"), now existing anywhere in the United
States or hereafter adopted or acquired in the United States, whether
currently in use or not, all registrations and recordings thereof and
all applications in connection therewith, whether pending or in
preparation for filing, including registrations, recordings and
applications in the United States Patent and Trademark Office or in any
office or agency of the United States of America or any State,
including those referred to in Item A of Schedule I attached hereto;
(b) all Trademark licenses in the United States, including
each Trademark license referred to in Item B of Schedule I attached
hereto;
(c) all reissues, extensions or renewals of any of the items
described in clause (a) and (b);
(d) all of the goodwill of the business connected with the use
of, and symbolized by the items described in, clauses (a) and (b); and
(e) all proceeds of, and rights associated with, the
foregoing, including any claim by the Grantor against third parties for
past, present or future infringement or dilution of any Trademark,
Trademark registration or Trademark license referred to in clauses (a)
Exhibit B
-2-
40
through (c) above, or for any injury to the goodwill associated with
the use of any such Trademark or for breach or enforcement of any such
Trademark license.
SECTION 3. Security Agreement. This Agreement has been executed and
delivered by the Grantor for the purpose of registering the security interest of
the Administrative Agent in the Trademark Collateral with the United States
Patent and Trademark Office. The security interest granted hereby has been
granted as a supplement to, and not in limitation of, the security interest
granted to the Administrative Agent for its benefit and the benefit of each
Fixed Assets Secured Party under the Security Agreement. The Security Agreement
(and all rights and remedies of the Administrative Agent and each Fixed Assets
Secured Party thereunder) shall remain in full force and effect in accordance
with its terms.
SECTION 4. Release of Security Interest. Upon (i) the sale, transfer or
other disposition of any Trademark Collateral in accordance with the Credit
Agreement or (ii) the Fixed Assets Termination Date, the Administrative Agent
shall, at the Grantor's expense, execute and deliver to the Grantor all
instruments and other documents as may be necessary or proper to release the
lien on and security interest in the Trademark Collateral which has been granted
hereunder.
SECTION 5. Acknowledgment. The Grantor does hereby further acknowledge
and affirm that the rights and remedies of the Administrative Agent with respect
to the security interest in the Trademark Collateral granted hereby are more
fully set forth in the Security Agreement, the terms and provisions of which
(including the remedies provided for therein) are incorporated by reference
herein as if fully set forth herein.
SECTION 6. Loan Document, etc. 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 of the Credit Agreement.
SECTION 7. Counterparts. This Agreement may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an original
(whether such counterpart is originally executed or an electronic copy of an
original) and all of which shall constitute together but one and the same
agreement. This Agreement shall become effective and binding as of the date
first above written when a counterpart hereof executed on behalf of the Grantor
shall have been received by the Administrative Agent.
SECTION 8. Agreement Subject to Revolver Intercreditor Agreement.
Notwithstanding anything to the contrary contained herein, it is expressly
understood and agreed by the parties hereto that this Agreement shall be subject
to the terms of the Revolver Intercreditor Agreement.
Exhibit B
-3-
41
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the day and year first above written.
[NAME OF GRANTOR]
By
-----------------------------------
Title:
THE CIT GROUP/BUSINESS CREDIT, INC. as
Administrative Agent, on behalf of
the Fixed Assets Secured Parties
By
-----------------------------------
Title:
EXHIBIT B
-4-
42
SCHEDULE I
to Trademark Security Agreement
Item A. Trademarks
Registered Trademarks
---------------------
Trademark Registration No. Registration Date
--------- ---------------- -----------------
Pending Trademark Applications
------------------------------
Trademark Serial No. Filing Date
--------- ---------- -----------
Trademark Applications in Preparation
-------------------------------------
Expected Products/
Trademark Docket No. Filing Date Services
--------- ---------- ----------- ---------
Item B. Trademark Licenses
Effective Expiration
Trademark Licensor Licensee Date Date
--------- -------- -------- --------- ----------
43
EXHIBIT C
to Security Agreement
COPYRIGHT SECURITY AGREEMENT
This COPYRIGHT SECURITY AGREEMENT (this "Agreement"), dated as of
____________, ____, is made between ___________________, a ____________________
(the "Grantor"), and THE CIT GROUP/BUSINESS CREDIT, INC., as administrative
agent (together with any successor(s) thereto in such capacity, the
"Administrative Agent") for each of the Fixed Assets Secured Parties.
W I T N E S S E T H :
WHEREAS, pursuant to a Revolving Credit Agreement, dated as of July __,
1999 (as amended, supplemented, amended and restated or otherwise modified from
time to time, the "Credit Agreement"), among Sterling Chemicals, Inc., a
Delaware corporation (the "Company"), Sterling Canada, Inc., a Delaware
corporation, Sterling Pulp Chemicals US, Inc., a Delaware corporation, Sterling
Pulp Chemicals, Inc., a Georgia corporation, Sterling Fibers, Inc., a Delaware
corporation, Sterling Chemicals Energy, Inc., a Delaware corporation, and
Sterling Chemicals International, Inc., a Delaware corporation (collectively,
the "Borrowers"), the various financial institutions as are, or may from time to
time become, parties thereto (the "Lenders"), DLJ Capital Funding, Inc., as the
Syndication Agent, Credit Suisse First Boston, as the Documentation Agent, and
the Administrative Agent, the Lenders and the Issuer have extended Commitments
to make Credit Extensions to the Borrowers;
WHEREAS, in connection with the Credit Agreement, the Grantor has
executed and delivered a Security Agreement, dated as of July __, 1999 (as
amended, supplemented, amended and restated or otherwise modified from time to
time, the "Security Agreement");
WHEREAS, as a condition precedent to the making of the Credit
Extensions (including the initial Credit Extension) under the Credit Agreement
and pursuant to clause (e) of Section 4.5 of the Security Agreement, the Grantor
is required to execute and deliver this Agreement and to grant to the
Administrative Agent a continuing security interest in all of the Copyright
Collateral (as defined below) to secure all Fixed Assets Obligations;
WHEREAS, the Grantor has duly authorized the execution, delivery and
performance of this Agreement; and
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in order to induce (i) the
Fixed Assets Lenders to make
44
Fixed Assets Loans (including the initial Fixed Assets Loans) to the Borrowers
pursuant to the Credit Agreement, and (ii) the Fixed Assets Secured Parties to
enter into Rate Protection Agreements, the Grantor agrees, for the benefit of
each Fixed Assets Secured Party, as follows:
SECTION 1. Definitions. Unless otherwise defined herein or the context
otherwise requires, terms used in this Agreement, including its preamble and
recitals, have the meanings provided (or incorporated by reference) in the
Security Agreement.
SECTION 2. Grant of Security Interest. For good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, to
secure all of the Fixed Assets Obligations, the Grantor does hereby pledge and
hypothecate to the Administrative Agent, and grant to the Administrative Agent a
security interest in, for its benefit and the benefit of each Fixed Assets
Secured Party, all of the following property (the "Copyright Collateral"),
whether now owned or hereafter acquired or existing by it, being all copyrights
of the Grantor, whether statutory or common law, registered or unregistered, now
or hereafter in force in the United States including all of the Grantor's right,
title and interest in and to all copyrights registered in the United States
Copyright Office and also including the copyrights referred to in Item A of
Schedule I attached hereto, and all applications for registration thereof,
whether pending or in preparation, all copyright licenses in the United States,
including each copyright license referred to in Item B of Schedule I attached
hereto, the right to xxx for past, present and future infringements of any
thereof, all rights corresponding thereto in the United States, all extensions
and renewals of any thereof and all proceeds of the foregoing, including
licenses, royalties, income, payments, claims, damages and proceeds of suit.
SECTION 3. Security Agreement. This Agreement has been executed and
delivered by the Grantor for the purpose of registering the security interest of
the Administrative Agent in the Copyright Collateral with the United States
Copyright Office. The security interest granted hereby has been granted as a
supplement to, and not in limitation of, the security interest granted to the
Administrative Agent for its benefit and the benefit of each Fixed Assets
Secured Party under the Security Agreement. The Security Agreement (and all
rights and remedies of the Administrative Agent and each Fixed Assets Secured
Party thereunder) shall remain in full force and effect in accordance with its
terms.
SECTION 4. Release of Security Interest. Upon (i) the sale, transfer or
other disposition of any Copyright Collateral in accordance with the Credit
Agreement or (ii) the Fixed Assets Termination Date, the Administrative Agent
shall, at the Grantor's expense, execute and deliver to the Grantor all
instruments and other documents as may be necessary or proper to release the
lien on and security interest in the Copyright Collateral which has been granted
hereunder.
SECTION 5. Acknowledgment. The Grantor does hereby further acknowledge
and affirm that the rights and remedies of the Administrative Agent with respect
to the security interest in the Copyright Collateral granted hereby are more
fully set forth in the Security
Exhibit C
-2-
45
Agreement, the terms and provisions of which (including the remedies provided
for therein) are incorporated by reference herein as if fully set forth herein.
SECTION 6. Loan Document, etc. 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 of the Credit Agreement.
SECTION 7. Counterparts. This Agreement may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an original
(whether such counterpart is originally executed or an electronic copy of an
original) and all of which shall constitute together but one and the same
agreement. This Agreement shall become effective and binding as of the date
first above written when a counterpart hereof executed on behalf of the Grantor
shall have been received by the Administrative Agent.
SECTION 8. Agreement Subject to Revolver Intercreditor Agreement.
Notwithstanding anything to the contrary contained herein, it is expressly
understood and agreed by the parties hereto that this Agreement shall be subject
to the terms of the Revolver Intercreditor Agreement.
Exhibit C
-3-
46
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the day and year first above written.
[NAME OF GRANTOR]
By
------------------------------------
Title:
THE CIT GROUP/BUSINESS CREDIT, INC. as
Administrative Agent, on behalf of
the Fixed Assets Secured Parties
By
------------------------------------
Title:
Exhibit C
-4-
47
SCHEDULE I
to Copyright Security Agreement
Item A. Copyrights
Registered Copyrights
---------------------
Registration No. Registration Date Author(s) Title
---------------- ----------------- --------- -----
Copyright Pending Registration Applications
-------------------------------------------
Serial No. Filing Date Author(s) Title
---------- ----------- --------- -----
Copyright Registration Applications in Preparation
--------------------------------------------------
Expected
Docket No. Filing Date Author(s) Title
---------- ----------- --------- -----
Item B. Copyright Licenses
Effective Expiration Subject
Licensor Licensee Date Date Matter
-------- -------- --------- ---------- -------
48
PROMISSORY NOTE
$2,000,000 July __, 1999
FOR VALUE RECEIVED, the undersigned, [FOREIGN RESTRICTED SUBSIDIARY], a
_______________ corporation (the "Maker"), promises to pay to the order of
______________, a _______________ corporation (the "Payee"), on demand, TWO
MILLION DOLLARS ($2,000,000) or, if less, the aggregate unpaid principal amount
of all intercompany loans made by the Payee to the Maker. Terms not otherwise
defined herein are defined in the Revolving Credit Agreement, dated as of July
__, 1999 (together with all amendments, supplements and other modifications, if
any, from time to time hereafter made thereto, the "Credit Agreement"), among
the Payee, each other Borrower party thereto, the various financial institutions
as are, or may from time to time become, parties thereto (the "Lenders"), DLJ
Capital Funding, Inc., as the Syndication Agent, Credit Suisse First Boston, as
the Documentation Agent, and The CIT Group/Business Credit, Inc., as the
Administrative Agent.
The unpaid principal amount of this promissory note (this "Note") from
time to time outstanding shall bear interest at a rate of interest equal to such
rate per annum as shall be agreed upon from time to time by the Payee and the
Maker payable at such times as shall be agreed upon by the Payee and the Maker,
and all payments of principal of and interest on this Note shall be payable in
lawful currency of the United States of America. All such payments and may be
recorded on the books and records of the Maker and the Payee and may be recorded
on the grid attached hereto by the holder hereof (including recordations made by
the Administrative Agent as pledgee). Upon notice from the Administrative Agent
that a Default of the nature referred to in Section 8.1.9 of the Credit
Agreement or an Event of Default has occurred and is continuing under the Credit
Agreement, the Maker shall make such payments, in same day funds, to such other
account as the Administrative Agent shall direct in such notice.
This Note is one of the Pledged Notes referred to in the Security
Agreement, and evidences Indebtedness permitted under the Credit Agreement. Upon
the occurrence and during the continuance of an Event of Default under the
Credit Agreement, and notice thereof having been delivered by the Administrative
Agent to the Maker, the Administrative Agent shall have all rights of the Payee
to collect and make demand, and enforce all rights with respect to, the
Indebtedness evidenced by this Note.
Payee agrees that this Note is subordinate in right of payment to all
Obligations of Maker and all obligations of Maker in respect of Indebtedness
outstanding under the Senior Secured Note Documents.
49
Reference is made to the Credit Agreement for a description of the
Security Agreements pursuant to which this Note has been pledged to the
Administrative Agent as security for the Obligations outstanding from time to
time under the Credit Agreement and each other Loan Document.
In addition to, but not in limitation of, the foregoing, the Maker
further agrees to pay all expenses, including reasonable attorneys' fees and
legal expenses, incurred by the holder (including the Administrative Agent as
pledgee) of this Note endeavoring to collect any amounts payable hereunder which
are not paid when due, whether by acceleration or otherwise.
THIS NOTE SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY
THE INTERNAL LAWS OF THE STATE OF NEW YORK, EXCLUDING THE LAW OF CONFLICTS BUT
GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
THE MAKER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY
RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON THIS
NOTE. THE MAKER ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT
CONSIDERATION FOR THIS PROVISION AND THAT THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE PAYEE TO ACCEPT THIS NOTE.
[NAME OF MAKER]
By:
------------------------------
Title:
----------------------
Pay to the order of:
-----------------------------
[NAME OF PAYEE]
By:
-------------------------------
Title:
-------------------------
50
GRID
Intercompany Loans made by ____________ to ____________ and payments of
principal of such Loans.
====================================================================================================================
Amount of Amount of
Intercompany Principal Outstanding Principal Notation Made By
Date Loan Payment Balance
--------------------- ------------------------- ------------------------- ----------------------- ------------------
--------------------- ------------------------- ------------------------- ----------------------- ------------------
--------------------- ------------------------- ------------------------- ----------------------- ------------------
--------------------- ------------------------- ------------------------- ----------------------- ------------------
--------------------- ------------------------- ------------------------- ----------------------- ------------------
--------------------- ------------------------- ------------------------- ----------------------- ------------------
--------------------- ------------------------- ------------------------- ----------------------- ------------------
--------------------- ------------------------- ------------------------- ----------------------- ------------------
--------------------- ------------------------- ------------------------- ----------------------- ------------------
--------------------- ------------------------- ------------------------- ----------------------- ------------------
--------------------- ------------------------- ------------------------- ----------------------- ------------------
--------------------- ------------------------- ------------------------- ----------------------- ------------------
--------------------- ------------------------- ------------------------- ----------------------- ------------------
--------------------- ------------------------- ------------------------- ----------------------- ------------------
--------------------- ------------------------- ------------------------- ----------------------- ------------------
--------------------- ------------------------- ------------------------- ----------------------- ------------------
--------------------- ------------------------- ------------------------- ----------------------- ------------------
--------------------- ------------------------- ------------------------- ----------------------- ------------------
--------------------- ------------------------- ------------------------- ----------------------- ------------------
--------------------- ------------------------- ------------------------- ----------------------- ------------------
--------------------- ------------------------- ------------------------- ----------------------- ------------------
--------------------- ------------------------- ------------------------- ----------------------- ------------------
====================================================================================================================
51
ANNEX I
to Security Agreement
SUPPLEMENT TO SECURITY AGREEMENT
THIS SUPPLEMENT NO. ___, dated as of ________ __, ____ (this
"Supplement"), to the Fixed Assets Security Agreement, dated as of July __, 1999
(as amended, supplemented, amended and restated or otherwise modified from time
to time, the "Security 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 "Grantor", and,
collectively, the "Grantors"), and THE CIT GROUP/BUSINESS CREDIT, INC., as
Administrative Agent for each of the Fixed Assets Secured Parties (such
capitalized term and all other capitalized terms being used herein with the
meanings provided, or incorporated by reference, in the Security Agreement), is
made by the undersigned.
W I T N E S S E T H:
WHEREAS, pursuant to a Revolving Credit Agreement, dated as of July __,
1999 (as amended, supplemented, amended and restated or otherwise modified from
time to time, the "Credit Agreement"), among Sterling Chemicals, Inc., a
Delaware corporation (the "Company"), Sterling Canada, Inc., a Delaware
corporation, Sterling Pulp Chemicals US, Inc., a Delaware corporation, Sterling
Pulp Chemicals, Inc., a Georgia corporation, Sterling Fibers, Inc., a Delaware
corporation, Sterling Chemicals Energy, Inc., a Delaware corporation, and
Sterling Chemicals International, Inc., a Delaware corporation (collectively,
the "Borrowers"), the various financial institutions as are, or may from time to
time become, parties thereto (the "Lenders"), DLJ Capital Funding, Inc., as the
Syndication Agent, Credit Suisse First Boston, as the Documentation Agent, and
the Administrative Agent, the Lenders and the Issuer have extended Commitments
to make Credit Extensions to the Borrowers;
WHEREAS, as a condition precedent to the making and maintenance of the
Credit Extensions under the Credit Agreement, the undersigned is required to
execute and deliver this Supplement;
WHEREAS, the undersigned has duly authorized the execution, delivery
and performance of this Supplement and the Security Agreement;
WHEREAS, the Security Agreement provides that additional parties may
become Grantors under the Security Agreement by execution and delivery of an
instrument in the form of this Supplement;
52
WHEREAS, pursuant to the provisions of Section 7.9 of the Security
Agreement, the undersigned is becoming a Grantor under the Security Agreement;
and
WHEREAS, the undersigned desires to become a Grantor under the Security
Agreement in order to induce the Fixed Assets Secured Parties to continue to
make and maintain Fixed Assets Loans under the Credit Agreement as consideration
therefor;
NOW, THEREFORE, the undersigned agrees, for the benefit of each Fixed
Assets Secured Party, as follows:
SECTION 1. In accordance with the Security Agreement, the undersigned
by its signature below becomes a Grantor under the Security Agreement with the
same force and effect as if it were an original signatory thereto as a Grantor.
In furtherance of the foregoing, each reference to a "Grantor" in the Security
Agreement shall be deemed to include the undersigned and the Schedules hereto
shall be deemed to be Schedules thereto.
SECTION 2. The undersigned hereby represents and warrants that 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.
SECTION 3. Except as expressly supplemented hereby, the Security
Agreement shall remain in full force and effect in accordance with its terms.
SECTION 4. Any provision of this Supplement 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
Supplement or affecting the validity or enforceability of such provision in any
other jurisdiction.
SECTION 5. Without limiting the provisions of the Credit Agreement (or
any other Loan Document, including the Security 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, EXCLUDING THE LAW OF
CONFLICTS BUT INCLUDING FEDERAL LAWS APPLICABLE TO NATIONAL BANKS. THIS
SUPPLEMENT, THE SECURITY AGREEMENT AND THE OTHER LOAN DOCUMENTS CONSTITUTE THE
ENTIRE UNDERSTANDING AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER
HEREOF AND THEREOF AND SUPERSEDE ANY PRIOR AGREEMENTS, WRITTEN OR ORAL, WITH
RESPECT THERETO.
Annex I
-2-
53
SECTION 7. This Supplement hereby incorporates by reference the
provisions of the Security Agreement, which provisions are deemed to be a part
hereof, and this Supplement shall be deemed to be a part of the Security
Agreement.
SECTION 8. This Supplement may be executed by the parties hereto in
several counterparts, each of which shall be deemed to be an original (whether
such counterpart is originally executed or an electronic copy of an original)
and all of which shall constitute together but one and the same agreement. This
Supplement shall become effective and binding as of the date first above written
when a counterpart hereof executed on behalf of the Grantor 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 GRANTOR]
By
-----------------------------------
Title:
ACKNOWLEDGED AND ACCEPTED BY:
THE CIT GROUP/BUSINESS CREDIT, INC.
as Administrative Agent, on behalf of the
Fixed Assets Secured Parties
By
------------------------------
Title:
Annex I
-3-
54
SCHEDULE I
to Supplement No. __
to Security Agreement
([NAME OF ADDITIONAL GRANTOR])
Perfection Certificate
See Exhibit M to the Credit Agreement
55
SCHEDULE II
to Supplement No. ___
to Security Agreement
([NAME OF ADDITIONAL GRANTOR])
Item A. Patents
Issued Patents
--------------
Patent No. Issue Date Inventor(s) Title
---------- ---------- ----------- -----
Pending Patent Applications
---------------------------
Serial No. Filing Date Inventor(s) Title
---------- ----------- ----------- -----
Patent Applications in Preparation
----------------------------------
Expected
Docket No. Filing Date Inventor(s) Title
---------- ----------- ----------- -----
Item B. Patent Licenses
Effective Expiration Subject
Licensor Licensee Date Date Matter
-------- -------- --------- ---------- -------
56
SCHEDULE III
to Supplement No. ___
to Security Agreement
([NAME OF ADDITIONAL GRANTOR])
Item A. Trademarks
Registered Trademarks
---------------------
Trademark Registration No. Registration Date
--------- ---------------- -----------------
Pending Trademark Applications
------------------------------
Trademark Serial No. Filing Date
--------- ---------- -----------
Trademark Applications in Preparation
-------------------------------------
Expected Products/
Trademark Docket No. Filing Date Services
--------- ---------- ----------- ---------
Item B. Trademark Licenses
Effective Expiration
Trademark Licensor Licensee Date Date
--------- -------- -------- --------- ----------
57
SCHEDULE IV
to Supplement No. ___
to Security Agreement
([NAME OF ADDITIONAL GRANTOR])
Item A. Copyrights
Registered Copyrights
---------------------
Registration No. Registration Date Author(s) Title
---------------- ----------------- --------- -----
Copyright Pending Registration Applications
-------------------------------------------
Serial No. Filing Date Author(s) Title
---------- ----------- --------- -----
Copyright Registration Applications in Preparation
--------------------------------------------------
Expected
Docket No. Filing Date Author(s) Title
---------- ----------- --------- -----
Item B. Copyright Licenses
Effective Expiration Subject
Licensor Licensee Date Date Matter
-------- -------- --------- ---------- -------
58
SCHEDULE V
to Supplement No. ___
to Security Agreement
([NAME OF ADDITIONAL GRANTOR])
Trade Secret or Know-How Licenses
---------------------------------
Effective Expiration Subject
Licensor Licensee Date Date Matter
-------- -------- --------- ---------- -------
