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EXHIBIT 4.12
FIXED ASSETS SECURED PARTIES OBLIGOR PLEDGE AGREEMENT
THIS FIXED ASSETS SECURED PARTIES OBLIGOR PLEDGE AGREEMENT (as amended,
supplemented, amended and restated or otherwise modified from time to time, this
"Pledge Agreement"), dated as of July 19, 2001, among Sterling Chemicals, Inc.,
a Delaware corporation (the "Company"), and each of the Persons (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) identified on the signature pages hereto and each other Person that may
from time to time become a party to this Pledge Agreement (each a "Pledgor" and
collectively the "Pledgors"), and The CIT Group/Business Credit, Inc., as
Administrative Agent for each of the Fixed Assets Secured Parties.
RECITALS:
A. 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") are
Wholly-Owned Subsidiaries of Sterling Chemicals Holdings, Inc., a Delaware
corporation (the "Parent").
B. The Parent and the Borrowers have elected to file voluntary
petitions with the United States Bankruptcy Court for the Southern District of
Texas and have continued in possession of their respective assets and management
of their respective businesses pursuant to Sections 1107 and 1108 of the
Bankruptcy Code.
C. Pursuant to a Revolving Credit Agreement, dated as of even date
herewith (as amended, supplemented, amended and restated or otherwise modified
from time to time, the "Credit Agreement"), among the Borrowers, the various
financial institutions as are, or may from time to time become, parties thereto
(the "Lenders") and the Administrative Agent, the Lenders and the Issuer have
extended Commitments to make Credit Extensions to the Borrowers.
D. As a condition precedent to the making of any Credit Extension under
the Credit Agreement, the Pledgors are required to execute and deliver this
Pledge Agreement.
E. Each Pledgor has duly authorized the execution, delivery and
performance of this Pledge Agreement.
F. It is in the best interest of the Pledgors to execute this Pledge
Agreement inasmuch as the Pledgors will derive substantial direct and indirect
benefits from the Credit Extensions made from time to time to the Borrowers by
the Lenders pursuant to the Credit Agreement.
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NOW THEREFORE, for good and valuable consideration the receipt of which
is hereby acknowledged, and in order to induce the Fixed Assets Lenders to make
Fixed Assets Loans (including the initial Fixed Assets Loans) to the Borrowers
pursuant to the Credit Agreement, each of the Pledgors and the Administrative
Agent, for the ratable benefit of each Fixed Assets Secured Party, agrees as
follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Certain Terms. The following terms (whether or not
underscored) when used in this Pledge 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.
"Borrowers" is defined in the recital A.
"Capital Securities" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated,
whether voting or non-voting) of such Person's equity (including any instruments
convertible into equity), whether now outstanding or issued after the Effective
Date.
"Collateral" is defined in Section 2.1.
"Company" is defined in the preamble.
"Credit Agreement" is defined in the recital A.
"Distributions" means all stock dividends, liquidating dividends,
Capital Securities resulting from (or in connection with the exercise of) stock
splits, reclassifications, warrants, options, non-cash dividends, mergers or
consolidations, and all other distributions (whether similar or dissimilar to
the foregoing) on or with respect to any Pledged Shares or other Capital
Securities constituting Collateral, but shall not include Dividends.
"Dividends" means cash dividends and cash distributions with respect to
any Pledged Shares or other Pledged Property made in the ordinary course of
business, but shall not include liquidating dividends.
"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.
"Lenders" is defined in the recital C.
"Pledge Agreement" is defined in the preamble.
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"Pledged Notes" means all promissory notes, bonds or debt instruments
at any time issued to any Pledgor.
"Pledged Property" means all Pledged Shares, all other pledged Capital
Securities, all other equity securities, all Pledged Notes, all assignments of
any amounts due or to become due with respect thereto and all other instruments
which are now being delivered by any Pledgor to the Administrative Agent or may
from time to time hereafter be delivered by any Pledgor to the Administrative
Agent for the purpose of pledge under this Pledge Agreement or any other Loan
Document, and all proceeds of any of the foregoing.
"Pledged Securities" means all Pledged Notes and all Capital Securities
which are now being or may hereafter be delivered by any Pledgor to the
Administrative Agent hereunder.
"Pledged Share Issuer" means each Person identified in Attachment 1
hereto as the issuer of the Pledged Shares identified opposite the name of such
Person and each other Person whose Capital Securities are required to be pledged
hereunder and under the Credit Agreement from time to time.
"Pledged Shares" means the Capital Securities of any Pledged Share
Issuer in the amounts and percentages listed in Attachment I hereto.
"Pledgor" and "Pledgors" are defined in the preamble.
"Securities Act" is defined in clause (a) of Section 6.2.
SECTION 1.2. Credit Agreement Definitions. Unless otherwise defined
herein or the context otherwise requires, terms used in this Pledge Agreement,
including its preamble and recitals, have the meanings provided in the Credit
Agreement.
SECTION 1.3. U.C.C. Definitions. Unless otherwise defined herein or in
the Credit Agreement or the context otherwise requires, terms for which meanings
are provided in the U.C.C. are used in this Pledge Agreement, including its
preamble and recitals, with such meanings; provided, that, (a) in the event any
term that is used herein is not defined in Article 9 of the U.C.C., as in effect
on the date hereof, but is thereafter defined in Article 9 of the U.C.C., such
term shall have the meaning ascribed to such term in Article 9 of the U.C.C. as
thereafter defined, and (b) in the event that any term that is used herein is
defined in both Article 9 of the U.C.C., as in effect on or after the date
hereof and Article 9 of the U.C.C. as in force at any relevant time hereafter,
the meaning to be ascribed to such term herein shall be the most encompassing of
such definitions.
ARTICLE II
PLEDGE
SECTION 2.1. Grant of Security Interest. Effective upon entry of the
Interim Order, each Pledgor hereby pledges, hypothecates, assigns, charges,
delivers and transfers to the Administrative Agent, for the ratable benefit of
each of the Fixed Assets Secured Parties, and hereby grants to the
Administrative Agent, for the ratable benefit of the Fixed Assets Secured
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Parties, a continuing security interest in, all of the following property
(collectively, the "Collateral"):
(a) all issued and outstanding Pledged Shares of each Pledged
Share Issuer identified in Attachment 1 hereto;
(b) all other Capital Securities of any Pledged Share Issuer
issued from time to time to such Pledgor;
(c) all Pledged Notes identified in Attachment 1 hereto and
all other Pledged Notes, whether now or hereafter delivered to the
Administrative Agent in connection with this Pledge Agreement;
(d) all other Pledged Property, whether now or hereafter
delivered to the Administrative Agent in connection with this Pledge
Agreement;
(e) all Dividends, Distributions and other payments and rights
with respect to any Pledged Property; and
(f) all proceeds of any of the foregoing.
SECTION 2.2. Security for Fixed Assets Obligations. This Pledge
Agreement secures the payment in full and in cash of all Fixed Assets
Obligations.
SECTION 2.3. Delivery of Pledged Property. All certificates or
instruments representing or evidencing any Collateral, including all Pledged
Securities, shall be delivered to and held by or on behalf of the Administrative
Agent pursuant hereto (or to a party who will hold such Pledged Securities
pursuant to arrangements satisfactory to the Administrative Agent in its sole
discretion), shall be in suitable form for transfer by delivery and shall be
accompanied by all necessary endorsements, instruments of transfer or
assignment, duly executed in blank.
SECTION 2.4. Dividends, Distributions and Payments on Pledged
Securities. In the event that any Dividend, Distribution or other payment is to
be paid on any Pledged Security at a time when no Event of Default has occurred
and is continuing, such Dividend may be paid directly to the applicable Pledgor;
provided, however, that all amounts so received shall be immediately deposited
by such Pledgor into the applicable Lockbox Account. If any such Default or
Event of Default has occurred and is continuing, then any such Dividend,
Distribution or payment shall be paid directly to the Administrative Agent.
SECTION 2.5. Continuing Security Interest. This Pledge 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 Pledgor and its successors,
transferees and assigns; and
(c) inure, together with the rights and remedies of the
Administrative Agent hereunder, to the benefit of the Fixed Assets
Secured Parties.
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Without limiting the foregoing clause (c), any Fixed Assets Lender may assign or
otherwise transfer (in whole or in part) any Fixed Assets Loan Commitment or any
Fixed Assets Loan held by it to any other Person or entity, and such other
Person or entity shall thereupon become vested with all the rights and benefits
in respect thereof granted to such Fixed Assets Lender under any Loan Document
(including this Pledge 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. The security interest granted herein
shall terminate and all rights to the Collateral shall revert to each Pledgor on
the Fixed Assets Termination Date. Upon any such termination or release of
Collateral, the Administrative Agent will, at each Pledgor's sole expense,
deliver to such Pledgor, without any representations, warranties or recourse of
any kind whatsoever, all certificates and instruments representing or evidencing
all Pledged Shares, together with all other Collateral held by the
Administrative Agent hereunder, and execute and deliver to such Pledgor such
documents as such Pledgor shall reasonably request to evidence such termination
or release.
SECTION 2.6. Security Interest Absolute. All rights of the
Administrative Agent and the Liens granted to the Administrative Agent
hereunder, and all obligations of each Pledgor hereunder, shall be absolute and
unconditional, irrespective of
(a) any lack of validity or enforceability of any Loan
Document,
(b) the failure of any Fixed Assets Secured Party
(i) to assert any claim or demand or to enforce any
right or remedy against any Pledgor, any other Obligor or any
other Person under the provisions of the Loan Documents or
otherwise, or
(ii) to exercise any right or remedy against any
guarantor of, or collateral securing, any Fixed Assets
Obligations of any Pledgor or any other Obligor,
(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 Obligation of any Pledgor
or any other Obligor,
(d) any reduction, limitation, impairment or termination of
any Fixed Assets Obligation of any Pledgor or any other Obligor 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 Pledgor
hereby waives any right to or claim of) any defense or set-off,
counterclaim, recoupment or termination whatsoever by reason of the
invalidity, illegality, nongenuineness, irregularity, compromise or
unenforceability of, or any other event or occurrence affecting, any
Fixed Assets Obligation of any Pledgor, any other Obligor or otherwise,
(e) any amendment to, rescission, waiver, or other
modification of, or any consent to departure from, any of the terms of
the Loan Documents,
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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
Pledgor, any other Obligor, any surety or any guarantor.
SECTION 2.7. Postponement of Subrogation, etc. No Pledgor will 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 Pledgor 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) any Pledgor 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 such Pledgor's request, the
Administrative Agent, on behalf of the Fixed Assets Secured Parties, will
execute and deliver to such Pledgor appropriate documents (without recourse and
without representation or warranty) necessary to evidence the transfer by
subrogation to such Pledgor of an interest in the Fixed Assets Obligations
resulting from such payment by such Pledgor. In furtherance of the foregoing,
prior to the Fixed Assets Termination Date, each Pledgor shall refrain from
taking any action or commencing any proceeding against 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 Pledge
Agreement to the Administrative Agent or any other Fixed Assets Secured Party.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Warranties, etc. Each Pledgor represents and warrants unto
each Fixed Assets Secured Party, as at the date of each pledge and delivery
hereunder (including each pledge and delivery of Pledged Securities) by such
Pledgor to the Administrative Agent of any Collateral, as set forth in this
Article.
SECTION 3.2. Ownership, No Liens, etc. Each Pledgor is the legal and
beneficial owner of, and has good and valid title to (and has full right and
authority to pledge and assign) the Collateral, free and clear of all Liens
other than the Lien granted pursuant hereto in favor of the Administrative
Agent, the Lien granted to the Trustee under the Senior Secured Note Indenture
and the Lien granted pursuant to the Obligor Pledge Agreement of even date
herewith in favor of the Administrative Agent securing the Current Asset Secured
Parties.
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SECTION 3.3. Valid Security Interest. Upon the entry of the Interim
Order, this Pledge Agreement will create a valid and perfected security interest
in the Collateral senior to all Liens other than the then applicable Priority
Liens.
SECTION 3.4. As to Pledged Shares. In the case of any Pledged Shares
constituting Collateral, all such Pledged Shares are duly authorized and validly
issued, fully paid and nonassessable, and constitute all of the issued and
outstanding Capital Securities of each Pledged Share Issuer. No Pledgor has any
Subsidiaries (other than Unrestricted Subsidiaries) of which it directly owns
any Capital Securities that are not pledged hereunder. All Pledged Shares are
certificated, have been delivered to the Administrative Agent with stock powers,
accompanied by undated instruments of transfer duly executed in blank and the
Administrative Agent has "control" (as defined in the U.C.C.) of such Pledged
Shares.
SECTION 3.5. Authorization, Approval, etc. Upon entry of the Interim
Order, no authorization, approval or other action by, and no notice to or filing
with, any Governmental Authority, regulatory body or other Person is required
either
(a) for the pledge by such Pledgor of any Collateral pursuant
to this Pledge Agreement or for the execution, delivery and performance
of this Pledge Agreement by such Pledgor, or
(b) for the exercise by the Administrative Agent of the voting
or other rights provided for in this Pledge Agreement, or, except with
respect to any Pledged Shares as may be required in connection with a
disposition of such Pledged Shares by laws affecting the offering and
sale of securities generally, the remedies in respect of the Collateral
pursuant to this Pledge Agreement,
provided, however, that in order to exercise the voting and certain other rights
provided for in this Pledge Agreement, the Pledged Shares must be transferred
into the name of the Administrative Agent on the books and records of the
Pledged Share Issuer prior to the exercise of such voting or other rights.
SECTION 3.6. Compliance with Laws. Each Pledgor is in compliance with
the requirements of all applicable laws (including, the provisions of the Fair
Labor Standards Act), rules, regulations and orders of every Governmental
Authority, the non-compliance with which could have a Material Adverse Effect or
adversely affect the value of the Collateral.
ARTICLE IV
COVENANTS
SECTION 4.1. Protect Collateral; Further Assurances, etc. Except for
the Liens described in Section 3.2 above, no Pledgor will sell, assign,
transfer, pledge, or encumber in any other manner the Collateral (except in
favor of the Administrative Agent hereunder or as permitted under Section 7.2.3
and 7.2.11 of the Credit Agreement). Each Pledgor will warrant and defend the
right and title herein granted unto the Administrative Agent in and to the
Collateral (and all right, title and interest represented by the Collateral)
against the claims and demands of all Persons whomsoever. Each Pledgor agrees
that at any time, and from time to time, at the expense of such Pledgor, such
Pledgor will promptly execute and deliver all further
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instruments, and take all further action, that may be necessary or desirable, or
that the Administrative Agent may reasonably request, in order to perfect and
protect any security interest granted or purported to be granted hereby or to
enable the Administrative Agent to exercise and enforce its rights and remedies
hereunder with respect to any Collateral. No Pledgor will permit any Pledged
Share Issuer to issue any Capital Securities unless the same are immediately
delivered and pledged to the Administrative Agent hereunder.
SECTION 4.2. Stock Powers, etc. Each Pledgor agrees that all Pledged
Securities delivered by such Pledgor pursuant to this Pledge Agreement will be
accompanied by duly executed, undated endorsements, stock powers or other
equivalent instruments of transfer reasonably acceptable to the Administrative
Agent. Each Pledgor will, from time to time upon the reasonable request of the
Administrative Agent, promptly deliver to the Administrative Agent such
endorsements, stock powers, instruments and similar documents, reasonably
satisfactory in form and substance to the Administrative Agent, with respect to
the Collateral as the Administrative Agent may reasonably request and will, from
time to time upon the request of the Administrative Agent after the occurrence
of any Event of Default, promptly cause each Pledged Share Issuer and each maker
of each Pledge Note, as applicable, to transfer any Pledged Securities
constituting Collateral into the name of any nominee designated by the
Administrative Agent.
SECTION 4.3. Continuous Pledge. Subject to Section 2.4, each Pledgor
will, at all times, keep pledged to the Administrative Agent pursuant hereto all
Pledged Shares and all other Capital Securities constituting Collateral, all
Dividends and Distributions with respect thereto, and all other Collateral and
other Capital Securities, instruments, proceeds and rights from time to time
received by or distributable to such Pledgor in respect of any Collateral. Any
Distributions on Pledged Shares consisting of Capital Securities will be
certificated.
SECTION 4.4. Voting Rights; Dividends, etc. Each Pledgor agrees:
(a) if any Event of Default shall have occurred and be
continuing, promptly upon receipt thereof by such Pledgor and without
any request therefor by the Administrative Agent, to deliver (properly
endorsed where required hereby or requested by the Administrative
Agent) to the Administrative Agent, all Dividends, Distributions and
all proceeds of the Collateral, all of which shall be held by the
Administrative Agent as additional Collateral for use in accordance
with Section 6.4; and
(b) if any Event of Default shall have occurred and be
continuing and the Administrative Agent shall have notified such
Pledgor of the Administrative Agent's intention to exercise its voting
power under this Section:
(i) the Administrative Agent may exercise, without
further application to or order of the Bankruptcy Court, (to
the exclusion of such Pledgor) the voting power and all other
incidental rights of ownership with respect to any Pledged
Securities constituting Collateral and such Pledgor hereby
grants the Administrative Agent an irrevocable proxy,
exercisable under such circumstances, to vote, without further
application to or order of the Bankruptcy Court, the Pledged
Securities; and
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(ii) promptly to deliver to the Administrative Agent
such additional proxies and other documents as may be
necessary to allow the Administrative Agent to exercise such
voting power.
All Dividends, Distributions and proceeds which may at any time and from time to
time be held by any Pledgor but which such Pledgor is then obligated to deliver
to the Administrative Agent, shall, until delivery to the Administrative Agent,
be held by such Pledgor separate and apart from its other property in trust for
the Administrative Agent. The Administrative Agent agrees that unless an Event
of Default shall have occurred and be continuing and the Administrative Agent
shall have given the notice referred to in this Section, each Pledgor has the
exclusive power to exercise all voting and other consensual rights with respect
to any Pledged Securities and the Administrative Agent shall, upon the written
request of such Pledgor, promptly deliver such proxies and other documents, if
any, as shall be reasonably requested by such Pledgor which are necessary to
allow such Pledgor to exercise such powers with respect to any such Pledged
Securities; provided, however, that no vote shall be cast, or consent, waiver or
ratification given, or action taken by any Pledgor that would materially impair
the value of any Collateral or be inconsistent with or violate any provision of
the Loan Documents (including, without limitation, any action to foreclose any
Lien securing any Pledged Note or to otherwise enforce any Pledged Note).
ARTICLE V
THE ADMINISTRATIVE AGENT
SECTION 5.1. Administrative Agent Appointed Attorney-in-Fact. Each
Pledgor hereby irrevocably appoints the Administrative Agent as such Pledgor's
attorney-in-fact, with full authority and in the name, place and stead of the
Pledgor or in its own name, from time to time in the Administrative Agent's
discretion, upon the occurrence and during the continuance of any Event of
Default, without further application to or order of the Bankruptcy Court, to
take any action and to execute any instrument which the Administrative Agent may
deem necessary or advisable to accomplish the purposes of this Pledge Agreement,
including without limitation:
(a) to ask, demand, collect, xxx for, recover, compromise and
receive and give acquittance and receipts for moneys due and to become
due under or in respect of any of the Collateral;
(b) to receive, endorse and collect any drafts or other
instruments, documents and chattel paper, in connection with clause (a)
above; and
(c) to file any claims or take any action or institute any
proceedings which the Administrative Agent may deem necessary 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.
Each Pledgor hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section is irrevocable and coupled with an interest.
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SECTION 5.2. Administrative Agent May Perform. If any Pledgor fails to
perform any agreement contained herein, the Administrative Agent may itself
perform, or cause performance of, such agreement, and the expenses of the
Administrative Agent incurred in connection therewith shall be payable by such
Pledgor pursuant to Section 6.5.
SECTION 5.3. Administrative Agent Has No Duty. The powers conferred on
the Administrative Agent hereunder are solely to protect its interest (on behalf
of the 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 Pledged Property, whether or not the Administrative Agent has or
is deemed to have knowledge of such matters, or
(b) taking any necessary steps to preserve rights against
prior parties or any other rights pertaining to any Collateral.
SECTION 5.4. Reasonable Care. The Administrative Agent is required to
exercise reasonable care in the custody and preservation of any of the
Collateral in its possession; provided, however, 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 the relevant
Pledgor 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 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 Pledgor with respect to the matters described
in this Section.
ARTICLE VI
REMEDIES
SECTION 6.1. Certain Remedies. Without further application to or order
of the Bankruptcy Court, but subject to any applicable requirements of the
Financing Order, the Credit Agreement and the Revolver Intercreditor Agreement,
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, 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 Pledgor agrees that, to the extent
notice of sale shall be required by law, at least ten days' prior
notice to such Pledgor of the time and place of any public sale or the
time after which any private sale is to be made shall constitute
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reasonable notification. The Administrative Agent shall not be
obligated to make any sale of Collateral regardless of notice of sale
having been given. The Administrative Agent may adjourn any public or
private sale from time to time by announcement at the time and place
fixed therefore, and such sale may, without further notice, be made at
the time and place to which it was so adjourned.
(b) 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,
(ii) notify the parties obligated on any of the
Collateral to make payment to the Administrative Agent of any
amount due or to become due thereunder,
(iii) enforce collection of any of the Collateral by
suit or otherwise, and surrender, release or exchange all or
any part thereof, or compromise or extend or renew for any
period (whether or not longer than the original period) any
obligations of any nature of any party with respect thereto,
(iv) endorse any checks, drafts or other writings in
each Pledgor's name to allow collection of the Collateral,
(v) take control of any proceeds of the Collateral
and
(vi) execute (in the name, place and stead of any
Pledgor) endorsements, assignments, stock powers and other
instruments of conveyance or transfer with respect to all or
any of the Collateral.
SECTION 6.2. Securities Laws. If the Administrative Agent shall
determine to exercise its right to sell all or any of the Collateral pursuant to
Section 6.1, each Pledgor agrees that, upon request of the Administrative Agent,
such Pledgor will use commercially reasonable efforts to, at its own expense:
(a) execute and deliver, and cause each issuer of the
Collateral contemplated to be sold and the directors and officers
thereof to execute and deliver, all such instruments and documents, and
do or cause to be done all such other acts and things, as may be
necessary or, in the opinion of the Administrative Agent, advisable to
register such Collateral under the provisions of the Securities Act of
1933, as from time to time amended (the "Securities Act"), and to cause
the registration statement relating thereto to become effective and to
remain effective for such period as prospectuses are required by law to
be furnished, and to make all amendments and supplements thereto and to
the related prospectus which, in the opinion of the Administrative
Agent, are necessary or advisable, all in conformity with the
requirements of the Securities Act and the rules and regulations of the
Securities and Exchange Commission applicable thereto;
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(b) use its best efforts to qualify the Collateral under the
state securities or "Blue Sky" laws and to obtain all necessary
governmental approvals for the sale of the Collateral, as requested by
the Administrative Agent;
(c) cause each such issuer to make available to its security
holders, as soon as practicable, an earnings statement that will
satisfy the provisions of Section 11(a) of the Securities Act; and
(d) do or cause to be done all such other acts and things as
may be necessary to make such sale of the Collateral or any part
thereof valid and binding and in compliance with applicable law.
Each Pledgor further acknowledges the impossibility of ascertaining the amount
of damages that would be suffered by the Administrative Agent or the Fixed
Assets Secured Parties by reason of the failure by such Pledgor to perform any
of the covenants contained in this Section and, consequently, agrees that, if
such Pledgor shall fail to perform any of such covenants, it shall pay, as
liquidated damages and not as a penalty, an amount equal to the value (as
determined by the Administrative Agent) of the Collateral on the date the
Administrative Agent shall demand compliance with this Section.
SECTION 6.3. Compliance with Restrictions. Each Pledgor agrees that in
any sale of any of the Collateral whenever an Event of Default shall have
occurred and be continuing, the Administrative Agent is hereby authorized,
without further application to or order of the Bankruptcy Court, to comply with
any limitation or restriction in connection with such sale as it may be advised
by counsel is necessary in order to avoid any violation of applicable law
(including compliance with such procedures as may restrict the number of
prospective bidders and purchasers, require that such prospective bidders and
purchasers have certain qualifications and restrict such prospective bidders and
purchasers to persons who will represent and agree that they are purchasing for
their own account for investment and not with a view to the distribution or
resale of such Collateral), or in order to obtain any required approval of the
sale or of the purchaser by any Governmental Authority, and the Pledgor further
agrees that such compliance shall not result in such sale being considered or
deemed not to have been made in a commercially reasonable manner, nor shall the
Administrative Agent be liable nor accountable to any Pledgor for any discount
allowed by reason of the fact that such Collateral is sold in compliance with
any such limitation or restriction.
SECTION 6.4. Application of Proceeds. Subject to any applicable
requirements of the Financing Order, the Credit Agreement and the Revolver
Intercreditor Agreement, 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 may, in the discretion of the Administrative Agent, be
held by the Administrative Agent as additional collateral security for, or then
or at any time thereafter be applied (after payment of any amounts payable to
the Administrative Agent pursuant to Section 10.4 of the Credit Agreement and
Section 6.5 below) in whole or in part by the Administrative Agent against, all
or any part of the Fixed Assets Obligations in such order as the Administrative
Agent shall elect. Any surplus of such cash or other proceeds held by the
Administrative Agent and remaining after the Fixed Assets Termination Date,
shall be paid over
13
to the applicable Pledgor or to whomsoever may be lawfully entitled to receive
such surplus. The Pledgors shall remain liable on a joint and several basis for
any deficiency.
SECTION 6.5. Indemnity and Expenses. Each Pledgor hereby jointly and
severally indemnifies and holds harmless the Administrative Agent from and
against any and all claims, losses and liabilities arising out of or resulting
from this Pledge Agreement (including enforcement of this Pledge Agreement),
except claims, losses or liabilities resulting from the Administrative Agent's
gross negligence or willful misconduct, and each Pledgor will 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 Pledge Agreement;
(b) the custody, preservation, use or operation of, or the
sale of, collection from or other realization upon, any of the
Collateral;
(c) the exercise or enforcement of any of the rights of the
Administrative Agent hereunder; or
(d) the failure by any Pledgor to perform or observe any of
the provisions hereof.
ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 7.1. Loan Document. This Pledge Agreement is a Loan Document
executed pursuant to the Credit Agreement and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions thereof.
SECTION 7.2. Amendments, etc. No amendment to or waiver of any
provision of this Pledge Agreement nor consent to any departure by any Pledgor
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 Pledgor, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which it is given.
SECTION 7.3. Protection of Collateral. The Administrative Agent may
from time to time, at its option, and at the expense of the Pledgors, perform
any act which any Pledgor agrees hereunder to perform and which such Pledgor
shall fail to perform after being requested in writing so to perform (it being
understood that no such request need be given after the occurrence and during
the continuance of an Event of Default) and the Administrative Agent may from
time to time take any other action which the Administrative Agent reasonably
deems necessary for the maintenance, preservation or protection of any of the
Collateral or of its security interest therein.
SECTION 7.4. Addresses for Notices. All notices and other
communications provided for hereunder shall be in writing and addressed,
delivered or transmitted, if to any Pledgor, at the address or facsimile number
of the Company provided for in the Credit Agreement, and, if to the
14
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)(i) if mailed and properly addressed with postage prepaid or (ii) if properly
addressed and sent by pre-paid courier service, shall be deemed given when such
notice has been received or (b) if transmitted by facsimile, shall be deemed
given when transmitted (and telephonic confirmation of receipt thereof has been
received).
SECTION 7.5. Headings. The various headings of this Pledge Agreement
are inserted for convenience only, and shall not affect the meaning or
interpretation of this Pledge Agreement or any provisions hereof.
SECTION 7.6 . Severability. Any provision of this Pledge 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 Pledge Agreement or affecting the validity or enforceability of such
provision in any other jurisdiction.
SECTION 7.7. Governing Law. THIS PLEDGE 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.
SECTION 7.8. Counterparts. This Pledge 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 Pledge Agreement shall become effective and binding upon any
Pledgor when a counterpart hereof executed on behalf of such Pledgor shall have
been received by the Administrative Agent.
SECTION 7.9. Additional Pledgors. Upon the execution and delivery by
any other Person of an instrument in the form of Annex I hereto, together with
the Schedule thereto, such Person shall become a "Pledgor" hereunder with the
same force and effect as if originally named as a Pledgor herein. The execution
and delivery of any such instrument shall not require the consent of any other
Pledgor hereunder. The rights and obligations of each Pledgor hereunder shall
remain in full force and effect notwithstanding the addition of any new Pledgor
as a party to this Pledge Agreement.
SECTION 7.10. Agreement Subject to Revolver Intercreditor Agreement.
Notwithstanding anything to the contrary contained herein, it is expressly
understood and agreed by the parties that this Agreement shall be subject to the
terms of the Revolver Intercreditor Agreement.
15
IN WITNESS WHEREOF, the parties hereto have caused this Fixed Assets
Secured Parties Obligor Pledge Agreement to be duly executed and delivered by
their respective officers thereunto duly authorized as of the day and year first
above written.
STERLING CHEMICALS, INC.
By:
--------------------------------------
Title:
STERLING CANADA, INC.
By:
--------------------------------------
Title:
STERLING PULP CHEMICALS US, INC.
By:
--------------------------------------
Title:
THE CIT GROUP/BUSINESS CREDIT, INC.,
as Administrative Agent
By:
--------------------------------------
Title:
16
ATTACHMENT 1
to Fixed Asset Secured Parties
Obligor Pledge Agreement
STERLING CHEMICALS, INC.
Pledged Shares
Pledged Share Issuer Capital Securities
Authorized Shares Outstanding Shares % of Share Pledged
----------------- ------------------ ------------------
Sterling Canada, Inc. 1,000 100 100%
Sterling Chemicals Energy, 1,000 1,000 100%
Inc.
Sterling Chemicals, 1,000 1,000 100%
International, Inc.
Sterling Fibers, Inc. 1,000 1,000 100%
Pledged Notes
Aggregate Principal
Maker Description Amount Outstanding
----- ----------- -------------------
None.
STERLING PULP CHEMICALS US, INC.
Pledged Shares
Pledged Share Issuer Capital Securities
Authorized Shares Outstanding Shares % of Share Pledged
----------------- ------------------ ------------------
Sterling Pulp Chemicals, Inc. 10,000 10,000 100%
Pledged Notes
Aggregate Principal
Maker Description Amount Outstanding
----- ----------- -------------------
None.
STERLING CANADA, INC.
Pledged Shares
Pledged Share Issuer Capital Securities
Authorized Shares Outstanding Shares % of Share Pledged
----------------- ------------------ ------------------
Sterling Pulp Chemicals US, 1,000 1,000 100%
Inc.
Pledged Notes
Aggregate Principal
Maker Description Amount Outstanding
----- ----------- -------------------
Valdosta-Lowndes Industrial Revenue Bonds $59,000,000.00
County Industrial (Sterling Pulp Chemicals
Authority US, Inc. Project) Spring
1995
Annex-1
17
ANNEX 1
to Fixed Asset Secured Parties
Obligor Pledge Agreement
SUPPLEMENT TO FIXED ASSET SECURED PARTIES
OBLIGOR PLEDGE AGREEMENT
This SUPPLEMENT NO. ___, dated as of __________, ____ (this
"Supplement"), to the Fixed Asset Secured Parties Obligor Pledge Agreement,
dated as of July ___, 2001 (as amended, supplemented, amended and restated or
otherwise modified from time to time, the "Pledge Agreement"), among the initial
signatories thereto and each other Person which from time to time thereafter
became a party thereto pursuant to Section 7.9 thereof (each, individually, a
"Pledgor", and, collectively, the "Pledgors"), in favor of THE CIT
GROUP/BUSINESS CREDIT INC., as Administrative Agent for each of the Fixed Assets
Secured Parties (such term and all other capitalized terms being used herein
with the meanings provided, or incorporated by reference, in the Pledge
Agreement), is made by the undersigned.
WITNESSETH:
WHEREAS, pursuant to a Revolving Credit Agreement, dated as of July __,
2001 (together with all amendments, supplements, restatements and other
modifications, if any, from time to time thereafter made thereto, the "Credit
Agreement"), 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, (collectively, the "Borrowers"), the various financial institutions
as are, or may from time to time become, parties thereto (the "Lenders") and the
Administrative Agent, the Lenders and the Issuer have extended Commitments to
make Credit Extensions to the Borrowers;
WHEREAS, as a condition precedent to the making and maintenance of
Fixed Assets Loans 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 Pledge Agreement;
WHEREAS, the Pledge Agreement provides that additional parties may
become Pledgors under the Pledge Agreement by execution and delivery of an
instrument in the form of this Supplement;
WHEREAS, pursuant to the provisions of Section 7.9 of the Pledge
Agreement, the undersigned is becoming a Pledgor under the Pledge Agreement; and
Annex-1
18
WHEREAS, the undersigned desires to become a Pledgor under the Pledge
Agreement in order to induce the Fixed Assets Lenders 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 Pledge Agreement, the undersigned by
its signature below becomes a Pledgor under the Pledge Agreement with the same
force and effect as if it were an original signatory thereto as a Pledgor and
Attachment I hereto shall be deemed to be part of Attachment I thereto. In
furtherance of the foregoing, each reference to a "Pledgor" in the Pledge
Agreement shall be deemed to include the undersigned.
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 Pledge
Agreement shall remain in full force and effect in accordance with its terms.
SECTION 4. In the event any one or more of the provisions contained in
this Supplement should be held invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions contained
herein and in the Pledge Agreement shall not in any way be affected or impaired.
SECTION 5. Without limiting the provisions of the Credit Agreement (or
any other Loan Document, including the Pledge Agreement), the undersigned agrees
to reimburse the Administrative Agent for its reasonable out-of-pocket expenses
in connection with this Supplement, including reasonable attorneys' fees and
expenses of the Administrative Agent.
SECTION 6. THIS SUPPLEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER
AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK, EXCLUDING THE LAW OF
CONFLICTS BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
SECTION 7. This Supplement hereby incorporates by reference the
provisions of the Pledge Agreement, which provisions are deemed to be a part
hereof, and this Supplement shall be deemed to be a part of the Pledge
Agreement.
SECTION 8. This Supplement may be executed 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 upon the
Annex-2
19
Pledgor when a counterpart hereof executed on behalf of the Pledgor shall have
been received by the Administrative Agent.
IN WITNESS WHEREOF, the undersigned has caused this Supplement to be
duly executed and delivered by its officer thereunto duly authorized as of the
date first above written.
[NAME OF ADDITIONAL PLEDGOR]
By:
--------------------------------------
Name:
Title:
ACKNOWLEDGED AND ACCEPTED BY:
THE CIT GROUP/BUSINESS CREDIT INC.,
as Administrative Agent
By:
--------------------------------
Name:
Title:
Annex-3
20
ATTACHMENT 1
to Supplement No. __
Pledge Agreement
[NAME OF PLEDGOR]
Pledged Shares
Pledged Share Issuer Capital Securities
----------------------------------------------------------------------------
Authorized Shares Outstanding Shares % of Shares Pledged
----------------- ------------------ -------------------
Annex-4
