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EXHIBIT 4.7
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STERLING FIBERS, INC., a Debtor-in-Possession,
Mortgagor,
to
THE CIT GROUP/BUSINESS CREDIT, INC.
as Administrative Agent,
Mortgagee
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CURRENT ASSETS SECURED PARTIES MORTGAGE,
ASSIGNMENT OF LEASES AND RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
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Dated as of July 19, 2001
This instrument affects certain real and personal property
located in Santa Xxxx County,
State of Florida.
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Record and return to:
Xxxxx Xxxxx LLP
0000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: R. Xxxxxxxxx Xxxxx, Esq.
This instrument was prepared by the above-named attorney.
Notice: This instrument contains inter alia obligations which may provide for:
(a) a variable rate of interest and/or
(b) future and/or revolving credit advances or as advances, which
when made, shall have the same priority as advances or as
advances made on the date hereof whether or not (i) any
advances or as advances were made on the date hereof and (ii)
any indebtedness is outstanding at the time any advance or
re-advance is made.
Notwithstanding anything to the contrary contained herein, the maximum
principal indebtedness secured under any contingency by this instrument
shall in no event exceed $125,000,000.
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Pursuant to the procedure set forth in Florida Department of Revenue
Regulation 12B-4.053(32)(c) the documentary stamp tax due on the
indebtedness secured hereby is $50,855.00 which is based on a value of
the Florida real estate secured hereby in the amount of $14,530,000.00
and based on the hereinafter calculations.
Based on the valuations of the collateral as a ratio set forth in the
Florida Department of Revenue Regulation 12C-2.004(2) the intangible
tax due on the indebtedness secured and allocated to Florida real
estate is $2,964.56. This is based upon a total value for all Florida
real estate of $14,530,000.00 and the value of all collateral in the
amount of $1,225,309,000.00.
CALCULATIONS:
$14,530,000 X $125,000,000 = $1,482,279.16
----------- -------------
$1,225,309,000.00
$1,482,279.16 X .002 = $2,964.56
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The calculations used for computing documentary stamp taxes and
intangible taxes are based upon present valuations as agreed by the
parties and in no way limit the Mortgagee's right or ability to fully
recover on the indebtedness secured hereby.
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TABLE OF CONTENTS
Page
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SECTION 1.1. Payment of Secured Obligations.....................................................I-1-B-5
SECTION 1.2. Title to Collateral, etc...........................................................I-1-B-5
SECTION 1.3. Intentionally Omitted..............................................................I-1-B-6
SECTION 1.4. Recordation........................................................................I-1-B-6
SECTION 1.5. Payment of Impositions, etc........................................................I-1-B-6
SECTION 1.6. Insurance and Legal Requirements...................................................I-1-B-6
SECTION 1.7. Security Interests, etc............................................................I-1-B-7
SECTION 1.8. Permitted Contests.................................................................I-1-B-7
SECTION 1.9. Leases.............................................................................I-1-B-8
SECTION 1.10. Compliance with Instruments........................................................I-1-B-8
SECTION 1.11. Maintenance and Repair, etc........................................................I-1-B-8
SECTION 1.12. Alterations, Additions, etc........................................................I-1-B-8
SECTION 1.13. Acquired Property Subject to Lien..................................................I-1-B-9
SECTION 1.14. Assignment of Rents, Proceeds, etc.................................................I-1-B-9
SECTION 1.15. No Claims Against the Mortgagee...................................................I-1-B-10
SECTION 1.16. Indemnification...................................................................I-1-B-10
SECTION 1.17. No Credit for Payment of Taxes....................................................I-1-B-11
SECTION 1.18. Intentionally Omitted.............................................................I-1-B-11
SECTION 1.19. No Transfer of the Property.......................................................I-1-B-11
SECTION 1.20. Security Agreement................................................................I-1-B-11
SECTION 1.21. Representations and Warranties....................................................I-1-B-12
SECTION 1.22. Mortgagor's Covenants.............................................................I-1-B-12
SECTION 1.23. Attornment........................................................................I-1-B-13
SECTION 2.1. Insurance.........................................................................I-1-B-13
SECTION 2.1.1. Risks to be Insured...............................................................I-1-B-13
SECTION 2.1.2. Policy Provisions.................................................................I-1-B-14
SECTION 2.1.3. Delivery of Policies, etc.........................................................I-1-B-14
SECTION 2.1.4. Separate Insurance................................................................I-1-B-15
SECTION 2.2. Damage, Destruction or Taking; Mortgagor to Give Notice; Assignment of Awards.....I-1-B-15
SECTION 2.3. Application of Proceeds and Awards................................................I-1-B-15
SECTION 2.4. Total Taking and Total Destruction................................................I-1-B-16
SECTION 3.1. Events of Default; Acceleration...................................................I-1-B-17
SECTION 3.2. Legal Proceedings; Judicial Foreclosure...........................................I-1-B-17
SECTION 3.3. Power of Sale.....................................................................I-1-B-17
SECTION 3.4. Uniform Commercial Code Remedies..................................................I-1-B-18
SECTION 3.5. Mortgagee Authorized to Execute Deeds, etc........................................I-1-B-18
SECTION 3.6. Purchase of Collateral by Mortgagee...............................................I-1-B-18
SECTION 3.7. Receipt a Sufficient Discharge to Purchaser.......................................I-1-B-19
SECTION 3.8. Waiver of Appraisement, Valuation, etc............................................I-1-B-19
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Page
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SECTION 3.9. Sale a Bar Against Mortgagor............................................................I-1-B-19
SECTION 3.10. Secured Obligations to Become Due on Sale...............................................I-1-B-19
SECTION 3.11. Application of Proceeds of Sale and Other Moneys........................................I-1-B-19
SECTION 3.12. Appointment of Receiver.................................................................I-1-B-20
SECTION 3.13. Possession, Management and Income.......................................................I-1-B-20
SECTION 3.14. Right of Mortgagee to Perform Mortgagor's Covenants, etc................................I-1-B-21
SECTION 3.15. Subrogation.............................................................................I-1-B-21
SECTION 3.16. Remedies, etc., Cumulative..............................................................I-1-B-21
SECTION 3.17. Provisions Subject to Applicable Law....................................................I-1-B-21
SECTION 3.18. No Waiver, etc..........................................................................I-1-B-22
SECTION 3.19. Compromise of Actions, etc..............................................................I-1-B-22
SECTION 4.1 Terms Defined in this Mortgage.........................................................I-1-B-22
SECTION 4.2. Use of Defined Terms....................................................................I-1-B-24
SECTION 4.3. Credit Agreement Definitions............................................................I-1-B-24
SECTION 5.1. Further Assurances; Financing Statements................................................I-1-B-24
SECTION 5.1.1. Further Assurances......................................................................I-1-B-24
SECTION 5.1.2. Financing Statements....................................................................I-1-B-25
SECTION 5.2. Additional Security.....................................................................I-1-B-25
SECTION 5.3. Defeasance; Partial Release, etc........................................................I-1-B-25
SECTION 5.3.1. Defeasance..............................................................................I-1-B-25
SECTION 5.3.2. Partial Release, etc....................................................................I-1-B-25
SECTION 5.4. Notices, etc............................................................................I-1-B-25
SECTION 5.5. Waivers, Amendments, etc................................................................I-1-B-25
SECTION 5.6. Cross-References........................................................................I-1-B-26
SECTION 5.7. Headings................................................................................I-1-B-26
SECTION 5.8. Currency................................................................................I-1-B-26
SECTION 5.9. Governing Law...........................................................................I-1-B-26
SECTION 5.10. Successors and Assigns, etc.............................................................I-1-B-26
SECTION 5.11. Waiver of Jury Trial; Submission to Jurisdiction........................................I-1-B-26
SECTION 5.12. Severability; Conflicts.................................................................I-1-B-27
SECTION 5.13. Loan Document...........................................................................I-1-B-27
SECTION 5.14. Usury Savings Clause....................................................................I-1-B-27
SECTION 5.15. Future Advances.........................................................................I-1-B-28
SECTION 5.16. Mortgage Subject to Revolver Intercreditor Agreement....................................I-1-B-28
Schedule 1 Legal Description of the Land
Schedule 2 Permitted Encumbrances
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CURRENT ASSETS SECURED PARTIES
MORTGAGE, ASSIGNMENT OF LEASES AND RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
THIS CURRENT ASSETS SECURED PARTIES
MORTGAGE, ASSIGNMENT OF LEASES AND
RENTS, SECURITY AGREEMENT AND FIXTURE FILING, dated as of July 19, 2001 (this
"Mortgage"), made by STERLING FIBERS, INC., a Delaware corporation (the
"Mortgagor"), having an address at 0000 Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx
00000-0000 to THE CIT GROUP/BUSINESS CREDIT, INC., having an address at 0000 XXX
Xxxxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000, as the Administrative Agent under the
Credit Agreement referred to below (together with its successors and assigns
from time to time acting as Administrative Agent for each of the Current Assets
Secured Parties under such Credit Agreement, the "Mortgagee").
WITNESSETH THAT:
WHEREAS, Mortgagor has elected to file a voluntary petition with the
United States Bankruptcy Court for the Southern District of Texas and has
continued in possession of its assets and in the management of its business
pursuant to Sections 1107 and 1108 of the Bankruptcy Code.
WHEREAS, the Mortgagor is on the date of delivery hereof the owner of
fee title (or easement or leasehold title if otherwise indicated on Schedule 1
hereto) to the parcel of land described in Schedule 1 hereto (the "Land") and of
the Improvements (such term and other capitalized terms used in this Mortgage
having the respective meanings specified or referred to in Article IV);
WHEREAS, pursuant to the terms, conditions and provisions of the
Revolving Credit Agreement, dated as of the date hereof (as amended, restated,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
among Sterling Chemicals, Inc., Sterling Canada, Inc., Sterling Pulp Chemicals
U.S., Inc., Sterling Pulp Chemicals, Inc., Mortgagor, Sterling Chemicals Energy,
Inc. and Sterling Chemicals International, Inc. (collectively, the "Borrowers"),
the financial institutions from time to time parties thereto (the "Lenders"),
and The CIT Group/Business Credit, Inc., as the Administrative Agent, the
Lenders and the Issuer have agreed to make, subject to the conditions and
limitations set forth therein, Loans to, and to issue Letters of Credit for the
account of, the Borrowers in the maximum original principal amount not to exceed
One Hundred Ninety-Five Million Dollars ($195,000,000) (such Loans and Letters
of Credit are hereinafter referred to collectively as the "Credit Extensions").
WHEREAS, the Credit Extensions consist of, inter alia, Current Assets
Loans in a maximum principal amount not to exceed One Hundred Twenty-five
Million Dollars ($125,000,000) having a Maturity Date of the earlier to occur of
(i) the thirtieth (30th) day after the date of the entry of the Interim Order if
the Final Order has not been entered prior to such date (unless the Maturity
Date has been extended pursuant to Section 10.1(e)(i) of the Credit Agreement),
(ii) the date on which the Bankruptcy Court enters an order denying approval of
the transactions contemplated in the Credit Agreement, and (iii) the second
anniversary of the Effective Date (unless the Maturity Date has been extended
pursuant to Section 10.1(e)(i) of the Credit Agreement); and
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EXHIBIT 4.18
THIS INSTRUMENT OF RESIGNATION, APPOINTMENT AND ACCEPTANCE
("Instrument") dated to be effective as of July 27, 2001 (the "Effective Date"),
is by and among STERLING CHEMICALS, INC., a corporation organized under the laws
of the State of Delaware (the "Company"), STATE STREET BANK AND TRUST COMPANY
(SUCCESSOR TO FLEET NATIONAL BANK, INITIAL TRUSTEE), a Massachusetts banking
association with its principal office in Boston, Massachusetts (the "Resigning
Trustee") and HSBC BANK USA, a bank and trust company organized under the laws
of the State of
New York ("Successor Trustee"). Capitalized terms not otherwise
defined herein shall have the same meaning ascribed to such terms in the
Indenture.
RECITALS
WHEREAS, pursuant to an Indenture dated as of August 15, 1996, as
amended and supplemented by the First Supplemental Indenture dated as of October
1, 1997 and Second Supplemental Indenture as of March 16, 1998 (collectively,
the "Indenture") between the Company and the Resigning Trustee, the Company
issued $275,000,000 of its 11.75% Senior Subordinated Notes due 2006 (the
"Notes");
WHEREAS, pursuant to the Indenture, the Company appointed the Resigning
Trustee as the Indenture Trustee under the Indenture;
WHEREAS, pursuant to section 2.03 of the Indenture, the Company also
appointed the Resigning Trustee as the Paying Agent and Registrar under the
Indenture;
WHEREAS, there is presently issued and outstanding $275,000,000 in
aggregate principal amount of the Notes;
WHEREAS, section 8.08 of the Indenture provides that the Resigning
Trustee may at any time resign by giving written notice of such resignation to
the Company and the Company shall promptly appoint a Successor Trustee;
WHEREAS, the Resigning Trustee desires to resign and the Company
desires to appoint the Successor Trustee as Trustee, Paying Agent and Registrar
under the Indenture, to succeed the Resigning Trustee in such capacities under
the Indenture; and
WHEREAS, the Successor Trustee is willing to accept the appointment as
Trustee, Paying Agent and Registrar under the Indenture;
NOW, THEREFORE, in consideration of the covenants herein and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. ACCEPTANCE OF RESIGNATION OF RESIGNING TRUSTEE; APPOINTMENT OF
SUCCESSOR TRUSTEE. The Resigning Trustee hereby resigns as Trustee, Paying Agent
and Registrar under the Indenture. The Company accepts the resignation of the
Resigning Trustee as Trustee, Paying Agent and Registrar and hereby appoints the
Successor
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Trustee as Trustee, Paying Agent and Registrar under the Indenture,
and vests and confirms to the Successor Trustee all rights, powers, trusts,
privileges, duties, security interests and obligations of such persons under the
Indenture, all effective as of the Effective Date.
2. COMPANY REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants to the Successor Trustee that:
a. It is duly organized and validly existing;
b. It has not entered into any amendment or supplement to the Indenture
except as disclosed herein, and the Indenture is in full force and
effect;
c. An Event of Default has occurred under section 7.01 of the Indenture
by reason of the Company filing a petition for relief under chapter 11
of title 11 of the United States Bankruptcy Code on July 16, 2001;
d. The execution and delivery of this Instrument and the consummation
of the transactions contemplated hereby do not and will not conflict
with, or result in a breach of, any of the terms or provisions of, or
constitute a default under, any contract, agreement, indenture or other
instrument (including, without limitation, its certificate of
incorporation and by-laws) to which it is a party or by which it or its
property is bound, or any judgment, decree or order of any court or
governmental agency or regulatory body or law, rule or regulation
applicable to it or its property;
e. No covenant or condition contained in the Indenture has been waived
by the Company or, to the best of the Company's knowledge by holders of
the percentage in aggregate principal amount of the Notes required to
effect any such waiver;
f. The Notes are validly issued securities of the Company;
g. Any conditions precedent relating to the appointment of HSBC Bank
USA, as successor Trustee, Paying Agent and Registrar under the
Indenture for which the Company is responsible have been complied with
by the Company; and
h. Other than the Company's Chapter 11 case, there is no action, suit
or proceeding pending, or to the best of the Company's knowledge,
threatened against the Company before any Court or any governmental
authority, arising out of any action or omissions by the Company under
the Indenture.
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3. RESIGNING TRUSTEE REPRESENTATIONS AND WARRANTIES. The Resigning
Trustee hereby represents and warrants to the Successor Trustee that:
a. No covenant or condition contained in the Indenture has been waived
by the Resigning Trustee or to the best of the knowledge of the
Resigning Trustee by the Note holders of the percentage in aggregate
principal amount of the Notes required by the Indenture to effect any
such waiver;
b. There is no action, suit or proceeding pending or, to the best of
the knowledge of the Resigning Trustee threatened, against the
Resigning Trustee before any court or governmental authority arising
out of any actual or alleged action or omission by the Resigning
Trustee, whether as Trustee, Paying Agent or Registrar under the
Indenture or otherwise;
c. It has made, or promptly will make, available to the Successor
Trustee originals, if available, or copies in its possession, of all
documents relating to any of the Notes or the Indenture or any matter
or thing pertaining to any thereof and all information in the
possession of its corporate trust administration department relating to
any of the foregoing and will furnish to the Successor Trustee such
documents or information on or before the Effective Date.
Notwithstanding the foregoing, the Resigning Trustee reserves the right
to withhold documents, if any, which are subject to privilege;
d. To the best of its knowledge, it has lawfully discharged its duties
as Trustee, Paying Agent and Registrar under the Indenture;
e. The Resigning Trustee certifies that $275,000,000 in principal
amount on the Notes is outstanding and all interest thereon has been
paid.
f. As of the Effective Date, the Resigning Trustee will hold no
property or monies under the Indenture, and will have transferred and
delivered all property and monies held by it under the Indenture to the
Successor Trustee.
g. This Instrument has been duly authorized, executed and delivered on
behalf of the Resigning Trustee and constitutes its legal, valid and
binding obligation.
h. The Resigning Trustee shall deliver to the Successor Trustee as of
or immediately after the effective date hereof all of the documents
listed on Exhibit A annexed hereto.
4. SUCCESSOR TRUSTEE REPRESENTATIONS AND WARRANTY. The Successor
Trustee represents and warrants to the Resigning Trustee and the Company that,
(a) it is duly organized and validly existing, (b) it is eligible to serve as
Trustee, Paying Agent and Registrar under the Indenture and under the Trust
Indenture Act of 1939, as amended, (c) the execution and delivery of this
Instrument and the consummation of the transactions contemplated hereby do not
and will not conflict with, or result in a breach of, any of the terms or
provisions of, or constitute a default under, any contract, agreement, indenture
or other instrument (including, without limitation, its certificate of
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incorporation and by-laws) to which it is a party or by which it or its property
is bound, or any judgment, decree or order of any court or governmental agency
or regulatory body or law, rule or regulation applicable to it or its property,
(d) this Instrument has been duly authorized, executed and delivered on behalf
of the Successor Trustee and constitutes its legal, valid and binding
obligation, and (e) all conditions precedent relating to the appointment of
Successor Trustee, as successor Trustee, Paying Agent and Registrar under the
Indenture for which the Successor Trustee is responsible have been complied with
by the Successor Trustee.
5. ACCEPTANCE BY SUCCESSOR TRUSTEE. The Successor Trustee hereby
accepts, effective on the Effective Date, its appointment as Trustee, Paying
Agent and Registrar under the Indenture, and assumes all rights, powers, trusts,
duties and obligations of the Trustee, Paying Agent and Registrar under the
Indenture. The Successor Trustee will perform said rights, powers and duties
upon the terms and conditions set forth in the Indenture. Promptly after the
execution and delivery of this Instrument, the Successor Trustee shall cause a
notice, a form of which is annexed hereto as Exhibit B, to be sent to each
Holder of the Notes in accordance with the provisions of Section 8.08 of the
Indenture.
6. ASSIGNMENT ETC. BY RESIGNING TRUSTEE. Effective on the Effective
Date, the Resigning Trustee hereby confirms, assigns, transfers, delivers and
conveys to the Successor Trustee, as Trustee, Paying Agent and Registrar under
the Indenture, upon the trusts expressed in the Indenture, all rights, powers,
trusts, privileges, duties and obligations, which the Resigning Trustee, now
holds under and by virtue of the Indenture, and effective as of such date does
hereby pay over to the Successor Trustee any and all property and moneys held by
the Resigning Trustee under and by virtue of the Indenture, subject nevertheless
to the lien provided by Section 8.07 of the Indenture, which lien the Resigning
Trustee expressly reserves to the fullest extent necessary to secure the
Company's obligations under the Indenture to the Resigning Trustee, which lien
shall also secure the Company's obligations under the Indenture to the Successor
Trustee.
7. ADDITIONAL DOCUMENTATION. The Company and the Resigning Trustee, for
the purposes of more fully and certainly vesting in and confirming to the
Successor Trustee the rights, powers, trusts, privileges, duties and obligations
granted in the Indenture, agree, upon reasonable request of the Successor
Trustee, to execute, acknowledge and deliver such further instruments of
conveyance and further assurance and to do such other things as may reasonably
be required by the Successor Trustee.
8. CHOICE OF LAWS. The laws of the State of
New York shall govern this
Instrument.
9. COUNTERPARTS. This Instrument may be executed in any number of
counterparts, each of which, when so executed and delivered, shall be an
original, but all counterparts shall constitute but one Instrument.
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10. SURVIVAL OF COMPANY'S OBLIGATIONS TO RESIGNING TRUSTEE.
Notwithstanding the resignation of the Resigning Trustee as Trustee, Paying
Agent and Registrar under the Indenture, nothing contained in this Instrument
shall in any way abrogate the obligations of the Company to the Resigning
Trustee under the Indenture or any lien created in favor of the Resigning
Trustee thereunder, including without limitation, the lien provided under
Section 8.07 of the Indenture.
11. COMPANY'S OBLIGATION TO SUCCESSOR TRUSTEE. The Company hereby
acknowledges and reaffirms its obligations to the Successor Trustee as set forth
in Section 8.07 of the Indenture, which obligations shall survive the execution
hereof pursuant to the terms of the Indenture.
12. ACKNOWLEDGEMENT OF RESIGNING TRUSTEE. The Resigning Trustee
acknowledges and agrees that it shall remain solely responsible for, and shall
promptly pay Successor Trustee, any and all costs, claims, liabilities, losses
or damages whatsoever, incurred by Successor Trustee, which arise out of actual,
alleged or adjudicated actions or omissions of the Resigning Trustee as Trustee,
Paying Agent and Registrar under the Indenture, unless such claims are contested
in good faith by Resigning Trustee. The Successor Trustee will furnish to the
Resigning Trustee, promptly after receipt, all documents with respect to any
such action for which the Resigning Trustee may be so responsible.
13. NOTICES. All notices, whether faxed or mailed will be deemed
received when sent pursuant to the following instructions:
TO THE RESIGNING TRUSTEE:
State Street Bank and Trust Company
Attn.: Xxxxxx X. Xxxxxxx, Vice President
0 Xxxxxx xx Xxxxxxxxx, 0xx Xxxxx
Xxxxxx, XX 00000
FAX: 000-000-0000
TEL: 000-000-0000
TO THE SUCCESSOR TRUSTEE:
HSBC Bank USA
Issuer Services
Attn.: Xxxxxx X. Xxxxxx, Vice President
00 X. 00xx Xxxxxx
Xxx Xxxx, XX 00000
FAX: 000-000-0000
TEL: 000-000-0000
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TO THE COMPANY:
Sterling Chemicals, Inc.
Attn.: Xxxxxxx X. Xxxx, General Counsel
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
FAX: 000-000-0000
TEL: 000-000-0000
14. CORPORATE TRUST OFFICE. References in the Indenture to "Corporate
Trust Office" or other similar terms shall be deemed to refer to the Corporate
Trust Office of the Successor Trustee at 00 X. 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 or any other office of the Successor Trustee at which, at any particular
time, its corporate trust business shall be administered.
15. EFFECTIVENESS. This Agreement shall become effective as of the date
set forth herein upon the execution and delivery thereof by the duly authorized
representatives of each of the parties hereto.
IN WITNESSETH WHEREOF, Sterling Chemicals, Inc., State Street Bank and
Trust Company and HSBC Bank USA have executed this Instrument as of the date set
forth above.
STERLING CHEMICALS, INC.
By
-----------------------------------
Its
-------------------------------
STATE STREET BANK AND TRUST COMPANY
By
-----------------------------------
Its
-------------------------------
HSBC BANK USA
By
-----------------------------------
Its
-------------------------------
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EXHIBIT A
Documents to be delivered to the Successor Trustee
1. Executed Copy of the Indenture and any supplements.
2. Conformed Copy of the Indenture and any supplements.
3. File of closing documents.
4. Copies of the most recent of each of the SEC reports delivered by
the Company pursuant to the Indenture.
5. Copies of any official notices sent by the Trustee to all of the
Holders of the Notes pursuant to the terms of any Indenture during the past
twelve months and a copy of the most recent Trustee's Annual Report to Holders
if any.
6. Certified List of Holders as of July __, 2001, certificate detail,
and all "stop transfers" and the reason for such "stop transfers" (or,
alternatively, if there are a substantial number of registered Holders, the
computer tape reflecting the identity, address, tax identification number and
detailed holdings of each such holder.)
7. Debt service records or trust account statements for one-year period
preceding the date of this Agreement.
8. All unissued Notes inventory or DTC FAST held global certificates.
9. Such other documents as the Successor Trustee may reasonably require
in order to transfer the appointment to it.
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EXHIBIT B
[HSBC Letterhead]
Notice to Holders
To the holders of the $275,000,000 aggregate principal amount of the Sterling
Chemicals, Inc.'s (the "Company') 11.75% Senior Subordinated Notes due 2006
under the Indenture, dated as of August 15, 1996, as amended and supplemented,
by and between the Company and State Street Bank and Trust Company (successor to
Fleet National Bank, initial trustee) as Indenture Trustee (the "Notes" and said
Indenture is hereinafter referred to as the "Indenture");
NOTICE IS HEREBY GIVEN, pursuant to Section 8.08 of the Indenture by and between
the Company and Indenture Trustee that Indenture Trustee has resigned as Trustee
under the Indenture.
Pursuant to Section 8.08 of the Indenture, HSBC Bank USA, a banking corporation
and trust company duly organized and existing under the laws of the State of
New
York, has accepted appointment as Trustee under the Indenture. The address of
the Corporate Trust Office of HSBC Bank USA is 00 Xxxx 00xx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000. HSBC Bank USA has also accepted appointment as Registrar and
Paying Agent under the Indenture.
State Street Bank and Trust Company's resignation as Trustee and HSBC Bank USA's
appointment as Successor Trustee become effective as of the close of business on
July 27, 2001.
Dated:
New York,
New York
July __, 2001
HSBC Bank USA, as Successor Indenture Trustee
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EXHIBIT 4.19
THIS INSTRUMENT OF RESIGNATION, APPOINTMENT AND ACCEPTANCE
("Instrument") dated to be effective as of July 27, 2001 (the "Effective Date"),
is by and among STERLING CHEMICALS, INC., a corporation organized under the laws
of the State of Delaware (the "Company"), STATE STREET BANK AND TRUST COMPANY
(SUCCESSOR TO FLEET NATIONAL BANK, THE INITIAL TRUSTEE), a Massachusetts banking
association with its principal office in Boston, Massachusetts (the "Resigning
Trustee") and HSBC BANK USA, a bank and trust company organized under the laws
of the State of
New York ("Successor Trustee"). Capitalized terms not otherwise
defined herein shall have the same meaning ascribed to such terms in the
Indenture.
RECITALS
WHEREAS, pursuant to an Indenture dated as of April 7, 1997, as amended
and supplemented by the First Supplemental Indenture dated as of March 16, 1998
(collectively, the "Indenture") between the Company and the Resigning Trustee,
the Company issued $150,000,000 principal amount of its 11.25% Senior
Subordinated Notes due 2007 (the "Notes");
WHEREAS, pursuant to section 8.08 of the Indenture, the Company
appointed the Resigning Trustee as the Indenture Trustee under the Indenture;
WHEREAS, pursuant to section 2.03 of the Indenture, the Company also
appointed the Resigning Trustee as the Paying Agent and Registrar under the
Indenture;
WHEREAS, there is presently issued and outstanding $150,000,000.00 in
aggregate principal amount of the Notes;
WHEREAS, section 8.08 of the Indenture provides that the Resigning
Trustee may at any time resign by giving written notice of such resignation to
the Company and the Company shall promptly appoint a Successor Trustee;
WHEREAS, the Resigning Trustee desires to resign and the Company
desires to appoint the Successor Trustee as Trustee, Paying Agent and Registrar
under the Indenture, to succeed the Resigning Trustee in such capacities under
the Indenture; and
WHEREAS, the Successor Trustee is willing to accept the appointment as
Trustee, Paying Agent and Registrar under the Indenture;
NOW, THEREFORE, in consideration of the covenants herein and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. ACCEPTANCE OF RESIGNATION OF RESIGNING TRUSTEE; APPOINTMENT OF
SUCCESSOR TRUSTEE. The Resigning Trustee hereby resigns as Trustee, Paying Agent
and
15
Registrar under the Indenture. The Company accepts the resignation of the
Resigning Trustee as Trustee, Paying Agent and Registrar and hereby appoints the
Successor Trustee as Trustee, Paying Agent and Registrar under the Indenture,
and vests and confirms to the Successor Trustee all rights, powers, trusts,
privileges, duties, security interests and obligations of such persons under the
Indenture, all effective as of the Effective Date.
2. COMPANY REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants to the Successor Trustee that:
a. It is duly organized and validly existing;
b. It has not entered into any amendment or supplement to the Indenture
except as disclosed herein, and the Indenture is in full force and
effect;
c. An Event of Default has occurred under Section 7.01 of the Indenture
by reason of the Company filing a petition for relief under chapter 11
of title 11 of the United States Bankruptcy Code on July 16, 2001;
d. The execution and delivery of this Instrument and the consummation
of the transactions contemplated hereby do not and will not conflict
with, or result in a breach of, any of the terms or provisions of, or
constitute a default under, any contract, agreement, indenture or other
instrument (including, without limitation, its certificate of
incorporation and by-laws) to which it is a party or by which it or its
property is bound, or any judgment, decree or order of any court or
governmental agency or regulatory body or law, rule or regulation
applicable to it or its property;
e. No covenant or condition contained in the Indenture has been waived
by the Company or, to the best of the Company's knowledge by holders of
the percentage in aggregate principal amount of the Notes required to
effect any such waiver;
f. The Notes are validly issued securities of the Company;
g. Any conditions precedent relating to the appointment of HSBC Bank
USA, as successor Trustee, Paying Agent and Registrar under the
Indenture for which the Company is responsible have been complied with
by the Company; and
h. Other than the Company's Chapter 11 case, there is no action, suit
or proceeding pending, or to the best of the Company's knowledge,
threatened against the Company before any Court or any governmental
authority, arising out of any action or omissions by the Company under
the Indenture.
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16
3. RESIGNING TRUSTEE REPRESENTATIONS AND WARRANTIES. The Resigning
Trustee hereby represents and warrants to the Successor Trustee that:
a. No covenant or condition contained in the Indenture has been waived
by the Resigning Trustee or to the best of the knowledge of the
Resigning Trustee by the Note holders of the percentage in aggregate
principal amount of the Notes required by the Indenture to effect any
such waiver;
b. There is no action, suit or proceeding pending or, to the best of
the knowledge of the Resigning Trustee threatened, against the
Resigning Trustee before any court or governmental authority arising
out of any actual or alleged action or omission by the Resigning
Trustee, whether as Trustee, Paying Agent or Registrar under the
Indenture or otherwise;
c. It has made, or promptly will make, available to the Successor
Trustee originals, if available, or copies in its possession, of all
documents relating to any of the Notes or the Indenture or any matter
or thing pertaining to any thereof and all information in the
possession of its corporate trust administration department relating to
any of the foregoing and will furnish to the Successor Trustee such
documents or information on or before the Effective Date.
Notwithstanding the foregoing, the Resigning Trustee reserves the right
to withhold documents, if any, which are subject to privilege;
d. To the best of its knowledge, it has lawfully discharged its duties
as Trustee, Paying Agent and Registrar under the Indenture;
e. The Resigning Trustee certifies that $150,000,000.00 in principal
amount on the Notes is outstanding and all interest thereon has been
paid.
f. As of the Effective Date, the Resigning Trustee will hold no
property or monies under the Indenture, and will have transferred and
delivered all property and monies held by it under the Indenture to the
Successor Trustee.
g. This Instrument has been duly authorized, executed and delivered on
behalf of the Resigning Trustee and constitutes its legal, valid and
binding obligation.
h. The Resigning Trustee shall deliver to the Successor Trustee as of
or immediately after the effective date hereof all of the documents
listed on Exhibit A annexed hereto.
4. SUCCESSOR TRUSTEE REPRESENTATIONS AND WARRANTY. The Successor
Trustee represents and warrants to the Resigning Trustee and the Company that,
(a) it is duly organized and validly existing, (b) it is eligible to serve as
Trustee, Paying Agent and Registrar under the Indenture and under the Trust
Indenture Act of 1939, as amended, (c) the execution and delivery of this
Instrument and the consummation of the transactions contemplated hereby do not
and will not conflict with, or result in a breach of, any of the terms or
provisions of, or constitute a default under, any contract,
3
17
agreement, indenture or other instrument (including, without limitation, its
certificate of incorporation and by-laws) to which it is a party or by which it
or its property is bound, or any judgment, decree or order of any court or
governmental agency or regulatory body or law, rule or regulation applicable to
it or its property; (d) this Instrument has been duly authorized, executed and
delivered on behalf of the Successor Trustee and constitutes its legal, valid
and binding obligation; and (e) all conditions precedent relating to the
appointment of Successor Trustee, as successor Trustee, Paying Agent and
Registrar under the Indenture for which the Successor Trustee is responsible
have been complied with by the Successor Trustee.
5. ACCEPTANCE BY SUCCESSOR TRUSTEE. The Successor Trustee hereby
accepts, effective on the Effective Date, its appointment as Trustee, Paying
Agent and Registrar under the Indenture, and assumes all rights, powers, trusts,
duties and obligations of the Trustee, Paying Agent and Registrar under the
Indenture. The Successor Trustee will perform said rights, powers and duties
upon the terms and conditions set forth in the Indenture. Promptly after the
execution and delivery of this Instrument, the Successor Trustee shall cause a
notice, a form of which is annexed hereto as Exhibit B, to be sent to each
Holder of the Notes in accordance with the provisions of Section 8.08 of the
Indenture.
6. ASSIGNMENT ETC. BY RESIGNING TRUSTEE. Effective on the Effective
Date, the Resigning Trustee hereby confirms, assigns, transfers, delivers and
conveys to the Successor Trustee, as Trustee, Paying Agent and Registrar under
the Indenture, upon the trusts expressed in the Indenture, all rights, powers,
trusts, privileges, duties and obligations, which the Resigning Trustee, now
holds under and by virtue of the Indenture, and effective as of such date does
hereby pay over to the Successor Trustee any and all property and moneys held by
the Resigning Trustee under and by virtue of the Indenture, subject nevertheless
to the lien provided by Section 8.07 of the Indenture, which lien the Resigning
Trustee expressly reserves to the fullest extent necessary to secure the
Company's obligations under the Indenture to the Resigning Trustee, which lien
shall also secure the Company's obligations under the Indenture to the Successor
Trustee.
7. ADDITIONAL DOCUMENTATION. The Company and the Resigning Trustee, for
the purposes of more fully and certainly vesting in and confirming to the
Successor Trustee the rights, powers, trusts, privileges, duties and obligations
granted in the Indenture, agree, upon reasonable request of the Successor
Trustee, to execute, acknowledge and deliver such further instruments of
conveyance and further assurance and to do such other things as may reasonably
be required by the Successor Trustee.
8. CHOICE OF LAWS. The laws of the State of
New York shall govern this
Instrument.
9. COUNTERPARTS. This Instrument may be executed in any number of
counterparts, each of which, when so executed and delivered, shall be an
original, but all counterparts shall constitute but one Instrument.
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18
10. SURVIVAL OF COMPANY'S OBLIGATIONS TO RESIGNING TRUSTEE.
Notwithstanding the resignation of the Resigning Trustee as Trustee, Paying
Agent and Registrar under the Indenture, nothing contained in this Instrument
shall in any way abrogate the obligations of the Company to the Resigning
Trustee under the Indenture or any lien created in favor of the Resigning
Trustee thereunder, including without limitation, the lien provided under
Section 8.07 of the Indenture.
11. COMPANY'S OBLIGATION TO SUCCESSOR TRUSTEE. The Company hereby
acknowledges and reaffirms its obligations to the Successor Trustee as set forth
in Section 8.07 of the Indenture, which obligations shall survive the execution
hereof pursuant to the terms of the Indenture.
12. ACKNOWLEDGEMENT OF RESIGNING TRUSTEE. The Resigning Trustee
acknowledges and agrees that it shall remain solely responsible for, and shall
promptly pay Successor Trustee, any and all costs, claims, liabilities, losses
or damages whatsoever, incurred by Successor Trustee, which arise out of actual,
alleged or adjudicated actions or omissions of the Resigning Trustee as Trustee,
Paying Agent and Registrar under the Indenture, unless such claims are contested
in good faith by Resigning Trustee. The Successor Trustee will furnish to the
Resigning Trustee, promptly after receipt, all documents with respect to any
such action for which the Resigning Trustee may be so responsible.
13. NOTICES. All notices, whether faxed or mailed will be deemed
received when sent pursuant to the following instructions:
TO THE RESIGNING TRUSTEE:
State Street Bank and Trust Company
Attn.: Xxxxxx X. Xxxxxxx, Vice President
0 Xxxxxx xx Xxxxxxxxx, 0xx Xxxxx
Xxxxxx, XX 00000
FAX: 000-000-0000
TEL: 000-000-0000
TO THE SUCCESSOR TRUSTEE
HSBC Bank USA
Issuer Services
Attn.: Xxxxxx X. Xxxxxx, Vice President
00 X. 00xx Xxxxxx
Xxx Xxxx, XX 00000
FAX: 000-000-0000
TEL: 000-000-0000
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19
TO THE COMPANY:
Sterling Chemicals, Inc.
Attn.: Xxxxxxx X. Xxxx, General Counsel
0000 Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
FAX: 000-000-0000
TEL: 000-000-0000
14. CORPORATE TRUST OFFICE. References in the Indenture to "Corporate
Trust Office" or other similar terms shall be deemed to refer to the Corporate
Trust Office of the Successor Trustee at 00 X. 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 or any other office of the Successor Trustee at which, at any particular
time, its corporate trust business shall be administered.
15. EFFECTIVENESS. This Agreement shall become effective as of the date
set forth herein upon the execution and delivery thereof by the duly authorized
representatives of each of the parties hereto.
IN WITNESSETH WHEREOF, Sterling Chemicals, Inc., State Street Bank and
Trust Company and HSBC Bank USA have executed this Instrument as of the date set
forth above.
STERLING CHEMICALS, INC.
By
-----------------------------------
Its
-------------------------------
STATE STREET BANK AND TRUST COMPANY
By
-----------------------------------
Its
-------------------------------
HSBC BANK USA
By
-----------------------------------
Its
-------------------------------
6
20
EXHIBIT A
Documents to be delivered to the Successor Trustee
1. Executed Copy of the Indenture and supplement.
2. Conformed Copy of the Indenture and supplement.
3. Filed of closing documents.
4. Copies of the most recent of each of the SEC reports delivered by
the Company pursuant to the Indenture.
5. Copies of any official notices sent by the Trustee to all of the
Holders of the Notes pursuant to the terms of any Indenture during the past
twelve months and a copy of the most recent Trustee's Annual Report to Holders
if any.
6. Certified List of Holders as of July __, 2001, certificate detail,
and all "stop transfers" and the reason for such "stop transfers" (or,
alternatively, if there are a substantial number of registered Holders, the
computer tape reflecting the identity, address, tax identification number and
detailed holdings of each such holder.)
7. Debt service records or trust account statements for the one-year
period preceding the date of this Agreement.
8. All unissued Notes inventory or DTC FAST held global certificates.
9. Such other documents as the Successor Trustee may reasonably require
in order to transfer the appointment to it.
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21
EXHIBIT B
[HSBC Letterhead]
Notice to Holders
To the holders of the $150,000,00 aggregate principal amount of Sterling
Chemicals, Inc.'s (the "Company") 11.25% Senior Subordinated Notes due 2007 (the
"Notes') under the Indenture, dated as of April 7, 19997, as amended and
supplemented, by and between the Company and State Street and Trust Company
(successor to Fleet National Bank, initial trustee) as Indenture Trustee (the
"Notes" and said Indenture is hereinafter referred to as the "Indenture");
NOTICE IS HEREBY GIVEN, pursuant to Section 8.08 of the Indenture by and between
the Company and Indenture Trustee that Indenture Trustee has resigned as Trustee
under the Indenture.
Pursuant to Section 8.08 of the Indenture, HSBC Bank USA, a banking corporation
and trust company duly organized and existing under the laws of the State of
New
York, has accepted appointment as Trustee under the Indenture. The address of
the Corporate Trust Office of HSBC Bank USA is 00 Xxxx 00xx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000. HSBC Bank USA has also accepted appointment as Registrar and
Paying Agent under the Indenture.
State Street Bank and Trust Company's resignation as Trustee and HSBC Bank USA's
appointment as Successor Trustee become effective as of the close of business on
July 27, 2001.
Dated:
New York,
New York
July __, 2001
HSBC Bank USA, as Successor Indenture Trustee
22
WHEREAS, the Mortgagor has duly authorized the execution, delivery and
performance of this Mortgage.
GRANT:
NOW, THEREFORE, for and in consideration of the premises, and of the
mutual covenants herein contained, and in order to induce the Current Assets
Lenders to make the Current Assets Loans pursuant to the Credit Agreement, and
in order to secure the full, timely and proper payment and performance of and
compliance with each and every one of the Secured Obligations (as hereinafter
defined), effective upon the entry of the Interim Order, the Mortgagor hereby
irrevocably grants, bargains, sells, mortgages, warrants, aliens, demises,
releases, hypothecates, pledges, assigns, transfers and conveys to the Mortgagee
and its successors and assigns, forever, all of the following (the
"Collateral"):
(a) Real Estate. All of Mortgagor's right, title and interest
in and to all of the Land and all additional lands and estates therein
now owned or hereafter acquired by the Mortgagor for use or development
with the Land or any portion thereof, together with all and singular
the tenements, rights, easements, hereditaments, rights of way,
privileges, liberties, appendages and appurtenances now or hereafter
belonging or in any way pertaining to the Land and such additional
lands and estates therein (including, without limitation, all rights
relating to storm and sanitary sewer, water, gas, electric, railway and
telephone services); all development rights, air rights, riparian
rights, water, water rights, water stock, all rights in, to and with
respect to any and all oil, gas, coal, minerals and other substances of
any kind or character underlying or relating to the Land and such
additional lands and estates therein and any interest therein; all
estate, claim, demand, right, title or interest of the Mortgagor in and
to any street, road, highway or alley, vacated or other, adjoining the
Land or any part thereof and such additional lands and estates therein;
all strips and gores belonging, adjacent or pertaining to the Land or
such additional lands and estates; and any after-acquired property
(herein collectively referred to as the "Real Estate");
(b) Improvements. All of Mortgagor's right, title and interest
in and to all buildings, structures and other improvements and any
additions and alterations thereto or replacements thereof, now or
hereafter built, constructed or located upon the Real Estate; and, to
the extent that any of the following items of property constitutes
fixtures under applicable laws, all furnishings, fixtures, fittings,
appliances, apparatus, equipment, machinery, building and construction
materials and other articles of every kind and nature whatsoever and
all replacements thereof, now or hereafter affixed or attached to,
placed upon or used in any way in connection with the complete and
comfortable use, enjoyment, occupation, operation, development and/or
maintenance of the Real Estate or such buildings, structures and other
improvements, including, but not limited to, partitions, furnaces,
boilers, oil burners, radiators and piping, plumbing and bathroom
fixtures, refrigeration, heating, ventilating, air conditioning and
sprinkler systems, other fire prevention and extinguishing apparatus
and materials, vacuum cleaning systems, gas and electric fixtures,
incinerators, compactors, elevators, engines, motors, generators and
all other articles of property which are considered fixtures under
applicable law (such buildings, structures and other improvements and
such other property are herein
I-1-B-2
23
collectively referred to as the "Improvements"; the Real Estate and the
Improvements are herein collectively referred to as the "Property");
(c) Goods. All of Mortgagor's right, title and interest in and
to all building materials, construction materials, appliances
(including, without limitation, stoves, ranges, ovens, disposals,
refrigerators, water fountains and coolers, fans, heaters, dishwashers,
clothes washers and dryers, water heaters, hood and fan combinations,
kitchen equipment, laundry equipment, kitchen cabinets and other
similar equipment), stocks, supplies, blinds, window shades, drapes,
carpets, floor coverings, manufacturing equipment and machinery, office
equipment, growing plants and shrubbery, control devices, equipment
(including window cleaning, building cleaning, swimming pool,
recreational, monitoring, garbage, pest control and other equipment),
motor vehicles, tools, furnishings, furniture, lighting, non-structural
additions to the Real Estate and Improvements and all other tangible
property of any kind or character, together with all replacements
thereof, now or hereafter located on or in or used or useful in
connection with the complete and comfortable use, enjoyment,
occupation, operation, development and/or maintenance of the Property,
regardless of whether or not located on or in the Property or located
elsewhere for purposes of storage, fabrication or otherwise, but
excluding inventory (as defined in the U.C.C.) (herein collectively
referred to as the "Goods");
(d) Intangibles. All goodwill, trademarks, trade names, option
rights, purchase contracts, real and personal property tax refunds,
books and records and general intangibles of the Mortgagor relating to
the Property and all accounts, contract rights, instruments, chattel
paper and other rights of the Mortgagor for the payment of money for
property sold or lent, for services rendered, for money lent, or for
advances or deposits made, and any other intangible property of the
Mortgagor relating to the Property (herein collectively referred to as
the "Intangibles");
(e) Leases. All rights of the Mortgagor in, to and under all
leases, licenses, occupancy agreements, concessions and other
arrangements, oral or written, now existing or hereafter entered into,
whereby any Person agrees to pay money or any other consideration for
the use, possession or occupancy of, or any estate in, the Property or
any portion thereof or interest therein (herein collectively referred
to as the "Leases"), and the right, subject to applicable law, upon the
occurrence of any Event of Default hereunder, to receive and collect
the Rents (as hereinafter defined) paid or payable thereunder;
(f) Plans. All rights of the Mortgagor in and to all plans and
specifications, designs, drawings and other information, materials and
matters heretofore or hereafter prepared relating to the Improvements
or any construction on the Real Estate (herein collectively referred to
as the "Plans");
(g) Permits. All rights of the Mortgagor, to the extent
assignable, in, to and under all permits, franchises, licenses,
approvals and other authorizations respecting the use, occupation and
operation of the Property and every part thereof and respecting any
business or other activity conducted on or from the Property, and any
product or proceed
I-1-B-3
24
thereof or therefrom, including, without limitation, all building
permits, certificates of occupancy and other licenses, permits and
approvals issued by governmental authorities having jurisdiction
(herein collectively referred to as the "Permits");
(h) Contracts. All right, title and interest of the Mortgagor,
to the extent assignable, in and to all agreements, contracts,
certificates, instruments, warranties, appraisals, engineering,
environmental, soils, insurance and other reports and studies, books,
records, correspondence, files and advertising materials, and other
documents, now or hereafter obtained or entered into, as the case may
be, pertaining to the construction, use, occupancy, possession,
operation, management, leasing, maintenance and/or ownership of the
Property and all right, title and interest of the Mortgagor therein
(herein collectively referred to as the "Contracts");
(i) Leases of Furniture, Furnishings and Equipment. All right,
title and interest of the Mortgagor as lessee in, to and under any
leases of furniture, furnishings, equipment and any other Goods now or
hereafter installed in or at any time used in connection with the
Property;
(j) Rents. All rents, issues, profits, royalties, avails,
income and other benefits derived or owned, directly or indirectly, by
the Mortgagor from the Property, including, without limitation, all
rents and other consideration deposited in any Lockbox Account and all
rents and other consideration payable by tenants, claims against
guarantors, and any cash or other securities deposited to secure
performance by tenants, under the Leases (herein collectively referred
to as "Rents");
(k) Proceeds. All proceeds of the conversion, voluntary or
involuntary of any of the foregoing into cash or liquidated claims,
including, without limitation, proceeds of insurance and condemnation
awards (herein collectively referred to as "Proceeds"); and
(l) Other Property. All other property and rights of the
Mortgagor of every kind and character relating to the Property, and all
proceeds and products of any of the foregoing, provided however, the
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 lien and/or 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;
AND, without limiting any of the other provisions of this Mortgage, the
Mortgagor expressly grants to the Mortgagee, as secured party, a security
interest in all of those portions of the Collateral which are or may be subject
to the State Uniform Commercial Code provisions applicable to secured
transactions, subject, however, to the Permitted Encumbrances;
TO HAVE AND TO HOLD the Collateral unto the Mortgagee, its successors
and assigns, forever, subject, however, to the Permitted Encumbrances.
I-1-B-4
25
FURTHER to secure the full, timely and proper payment and performance
of the Secured Obligations, the Mortgagor hereby covenants and agrees with and
warrants to the Mortgagee as follows:
ARTICLE I
COVENANTS AND AGREEMENTS OF THE MORTGAGOR
SECTION 1.1. Payment of Secured Obligations. (i) The Mortgagor agrees
that:
(a) it will duly and punctually pay and perform or cause to be
paid and performed each of the Secured Obligations at the time and in
accordance with the terms of the Loan Documents pertaining to the
Current Assets Loans, and
(b) when and as due and payable from time to time in
accordance with the terms hereof or of any other Loan Documents
pertaining to the Current Assets Loans, pay and perform, or cause to be
paid and performed, all, other Secured Obligations.
SECTION 1.2. Title to Collateral, etc. The Mortgagor represents and
warrants to and covenants with the Mortgagee that:
(a) except as otherwise permitted by the terms of the Credit
Agreement, as of the date hereof and at all times hereafter while this
Mortgage is outstanding, the Mortgagor (1) is and shall be the absolute
owner of the legal and beneficial title to the applicable interest in
the Property and to all other property included in the Collateral, and
(2) has and shall have good and marketable title in fee simple
absolute, or good and sufficient easement or leasehold title, as
currently represented in the granting clause as of the date hereof, to
the Property, subject in each case only to this Mortgage, the Permitted
Liens (as defined in the Credit Agreement) and the encumbrances set
forth in Schedule 2 hereto (collectively, the "Permitted
Encumbrances");
(b) the Mortgagor has good and lawful right, power and
authority to execute this Mortgage and to convey, transfer, assign,
mortgage and grant a security interest in the Collateral, all as
provided herein;
(c) this Mortgage has been duly executed, acknowledged and
delivered on behalf of the Mortgagor, all consents and other actions
required to be taken by the officers, directors, shareholders and
partners, as the case may be, of the Mortgagor have been duly and fully
given and performed and this Mortgage constitutes the legal, valid and
binding obligation of the Mortgagor, enforceable against the Mortgagor
in accordance with its terms;
(d) upon entry of the Interim Order, the Mortgagee shall have
a mortgage lien on the Property and a perfected security interest in
the Collateral other than the Property, senior in priority to all Liens
other than the then applicable Priority Liens;
I-1-B-5
26
(e) the Mortgagor, at its expense, will warrant and defend to
the Mortgagee and any purchaser under the power of sale herein or at
any foreclosure sale such title to the Collateral and the mortgage lien
and perfected security interest of this Mortgage thereon and therein
against all claims and demands and will maintain, preserve and protect
such lien and security interest and will keep this Mortgage a valid,
direct mortgage lien of record on the Property and a perfected security
interest in the Collateral other than the Property, in each case senior
in priority to all Liens other than the then applicable Priority Liens
and subject only to Permitted Encumbrances.
SECTION 1.3. Intentionally Omitted.
SECTION 1.4. Recordation. The Mortgagor, at its expense, will at all
times cause this Mortgage and any instruments amendatory hereof or supplemental
hereto and any instruments of assignment hereof or thereof (and any appropriate
financing statements or other instruments and continuations thereof), and each
other instrument delivered in connection with the Current Assets Loans or any
other Loan Document pertaining to the Current Assets Loans and intended
thereunder to be recorded, registered and filed, to be kept recorded, registered
and filed, in such manner and in such places, and will pay all such recording,
registration, filing fees, taxes and other charges, and will comply with all
such statutes and regulations as may be required by law in order to establish,
preserve, perfect and protect the lien and security interest of this Mortgage as
a valid, direct mortgage lien on the Property and perfected security interest in
the Collateral other than the Property, senior in priority to all Liens other
than the then applicable Priority Liens. The Mortgagor will pay or cause to be
paid, and will indemnify the Mortgagee in respect of, all taxes (including
interest and penalties) at any time payable in connection with the filing and
recording of this Mortgage and any and all supplements and amendments hereto.
SECTION 1.5. Payment of Impositions, etc. Subject to Section 1.8
(relating to permitted contests), the Mortgagor will pay or cause to be paid
before the same would become delinquent and before any fine, penalty, interest
or cost may be added for non-payment, all taxes, assessments, water and sewer
rates, charges, license fees, inspection fees and other governmental levies or
payments, of every kind and nature whatsoever, general and special, ordinary and
extraordinary, unforeseen as well as foreseen, which at any time may be
assessed, levied, confirmed, imposed or which may become a lien upon the
Collateral, or any portion thereof, or which are payable with respect thereto,
or upon the rents, issues, income or profits thereof, or on the occupancy,
operation, use, possession or activities thereof, whether any or all of the same
be levied directly or indirectly or as excise taxes or as income taxes, and all
taxes, assessments or charges which may be levied on the Secured Obligations, or
the interest thereon (collectively, the "Impositions"). The Mortgagor will
deliver to the Mortgagee, upon request, copies of official receipts or other
satisfactory proof evidencing such payments.
SECTION 1.6. Insurance and Legal Requirements. Subject to Section 1.8
(relating to permitted contests), the Mortgagor, at its expense, will comply in
all material respects, or cause compliance in all material respects with
(a) all provisions of any insurance policy covering or
applicable to the Collateral or any part thereof, all requirements of
the issuer of any such policy, and all orders, rules, regulations and
other requirements of the National Board of Fire
I-1-B-6
27
Underwriters (or any other body exercising similar functions)
applicable to or affecting the Collateral or any part thereof or any
use or condition of the Collateral or any part thereof (collectively,
the "Insurance Requirements"); and
(b) all laws, including Environmental Laws, statutes, codes,
acts, ordinances, orders, judgments, decrees, injunctions, rules,
regulations, permits, licenses, authorizations, directions and
requirements of all governments, departments, commissions, boards,
courts, authorities, agencies, officials and officers, foreseen or
unforeseen, ordinary or extraordinary, which now or at any time
hereafter may be applicable to the Collateral or any part thereof, or
any of the adjoining sidewalks, curbs, vaults and vault space, if any,
streets or ways, or any use or condition of the Collateral or any part
thereof (collectively, the "Legal Requirements");
noncompliance of which could reasonably be expected to cause a Material Adverse
Effect whether or not compliance therewith shall require structural changes in
or interference with the use and enjoyment of the Collateral or any part
thereof.
SECTION 1.7. Security Interests, etc. The Mortgagor will not directly
or indirectly create or permit or suffer to be created or to remain, and will
promptly discharge or cause to be discharged, any deed of trust, mortgage,
encumbrance or charge on, pledge of, security interest in or conditional sale or
other title retention agreement with respect to or any other lien on or in the
Collateral or any part thereof or the interest of the Mortgagor or the Mortgagee
therein, or any Proceeds thereof or Rents or other sums arising therefrom, other
than (a) Permitted Encumbrances, and (b) liens of mechanics, materialmen,
suppliers or vendors or rights thereto incurred in the ordinary course of the
business of the Mortgagor for sums not yet due or any such liens or rights
thereto which are at the time being contested as permitted by Section 1.8. The
Mortgagor will not postpone the payment of any sums for which liens of
mechanics, materialmen, suppliers or vendors or rights thereto have been
incurred (unless such liens or rights thereto are at the time being contested as
permitted by Section 1.8), for more than 60 days after the completion of the
action giving rise to such liens or rights thereto.
SECTION 1.8. Permitted Contests. The Mortgagor at its expense may
contest, or cause to be contested, by appropriate legal proceedings conducted in
good faith and with due diligence, the amount or validity or application, in
whole or in part, of any Imposition, Legal Requirement or Insurance Requirement
or lien of a mechanic, materialman, supplier or vendor, provided that, (a) in
the case of an unpaid Imposition, lien, encumbrance or charge, such proceedings
shall suspend the collection thereof from the Mortgagor, the Mortgagee, and the
Collateral (including any rent or other income therefrom) and shall not
materially interfere with the payment of any such rent or income, (b) neither
the Collateral nor any rent or other income therefrom nor any part thereof or
interest therein would be in any material danger of being sold, forfeited, lost,
impaired or interfered with, (c) in the case of a Legal Requirement, neither the
Mortgagor nor the Mortgagee would be in material danger of any civil or criminal
liability for failure to comply therewith, (d) the Mortgagor shall have
furnished such security, if any, as may be required in the proceedings or as may
be reasonably requested by the Mortgagee, (e) the non-payment of the whole or
any part of any Imposition will not result in the delivery of a tax deed to the
Collateral or any part thereof because of such non-payment, (f) the payment of
any sums required to be paid with respect to any of the Current Asset Notes or
under this Mortgage (other than any
I-1-B-7
28
EXHIBIT 10.1
STERLING CHEMICALS HOLDINGS, INC.
STERLING CHEMICALS, INC.
AMENDED AND RESTATED SUPPLEMENTAL PAY PLAN
PRELIMINARY STATEMENTS
A. Sterling Chemicals Holdings, Inc. and Sterling Chemicals, Inc. are Delaware
corporations.
B. On March 8, 2001, the Holdings Board and the Chemicals Board (as such terms
are defined below) approved a supplemental pay plan (the "Existing Plan").
C. On July 13, 2001, the Holdings Board and the Chemicals Board approved
certain amendments to the Existing Plan.
D. The Holdings Board and the Chemicals Board desire to document such
amendments to the Existing Plan by amending and restating the Existing Plan
in its entirety, effective as of July 13, 2001 (the "Effective Date").
NOW, THEREFORE, the Existing Plan is hereby amended and restated to read in
its entirety as follows:
ARTICLE I
Definitions and Interpretations
Section 1.01. Definitions. Capitalized terms used in this Plan shall have
the following respective meanings, except as otherwise provided or as the
context shall otherwise require:
"Applicable Multiplier" means, with respect to any Participant for any
Calculation Date, the multiplier set forth below opposite such Participant's
Salary Grade as of such Computation Date:
Salary Grade Applicable Multiplier
------------ ---------------------
U.S. Salary Grades 25 through 28............... 0.0625
U.S. Salary Grades 21 through 24............... 0.0500
Canadian Salary Grade 15 and 16................ 0.0500
U.S. Salary Grades 19 and 20................... 0.0375
Canadian Salary Grade 14....................... 0.0375
U.S. Salary Grades 17 and 18................... 0.0250
29
Canadian Salary Grades 12 and 13............... 0.0250
"Base Salary" means, with respect to any Participant for any Calculation
Date, such Participant's annual base salary as of such Computation Date.
"Benefit Plan" means any employee benefit plan (including any employee
benefit plan within the meaning of Section 3(3) of the Employee Retirement
Income Security Act of 1974), program, arrangement or practice maintained,
sponsored or provided by Holdings or any Subsidiary, including those relating to
bonuses, incentive compensation, retirement benefits, stock options, stock
ownership or stock awards, healthcare and medical benefits, disability benefits,
death benefits, disability, life, accident and travel insurance, sick leave,
vacation pay or termination pay.
"Bonus Plan" means the Sterling Chemicals, Inc. Bonus Plan, as amended,
supplemented or modified from time to time in accordance with its terms.
"Chairman" means the Chairman of the Board of Holdings or, in case of the
absence or disability of the Chairman of the Board, the Chief Executive Officer
of Holdings, or in the absence or disability of the Chairman of the Board or the
Chief Executive Officer, the President of Holdings.
"Chemicals" means Sterling Chemicals, Inc. and any successor to all or
substantially all of the business, operations or assets thereof.
"Chemicals Board" means the Board of Directors of Chemicals.
"Company" means Holdings and the Subsidiaries, including Chemicals.
"Compensation Committee" means the Compensation Committee of the Holdings
Board.
"Computation Date" means the last day of March, June, September and
December of each year during the continuance of this Plan.
"Holdings" means Sterling Chemicals Holdings, Inc. and any successor to all
or substantially all of the business, operations or assets thereof.
"Holdings Board" means the Board of Directors of Holdings.
"Participants" means, except as otherwise provided in Section 2.01(b), (i)
all salaried employees of the Company who are based in the United States and
have a Salary Grade of 18 or higher, (ii) all salaried employees of the Company
who are based in Canada and have a salary grade of 13 or higher and (iii) any
salaried employee of the Company designated as a Participant in an Instrument of
Designation executed and delivered by Holdings and such Participant in
accordance with Section 2.01(b).
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30
"Plan" means this Supplemental Pay Plan, as amended, supplemented or
modified from time to time in accordance with its terms.
"Salary Grade" means, with respect to any Participant for any Computation
Date, such Participant's salary classification established by the Company as of
such Computation Date.
"Supplemental Pay" means, with respect to any Participant, any payments
that the Company has made or is obligated to make to such Participant pursuant
to Section 2.02(a).
"Subsidiary" means any corporation, limited partnership, general
partnership, limited liability company or other form of entity a majority of any
class of voting stock or other voting rights of which is owned, directly or
indirectly, by Holdings.
Section 1.02. Interpretation. In this Plan, unless a clear contrary
intention appears, (a) the words "herein," "hereof" and "hereunder" and other
words of similar import refer to this Plan as a whole and not to any particular
Article, Section or other subdivision, (b) reference to any Article or Section,
means such Article or Section hereof and (c) the words "including" (and with
correlative meaning "include") means including, without limiting the generality
of any description preceding such term. The Article and Section headings herein
are for convenience only and shall not affect the construction hereof.
ARTICLE II
Eligibility and Benefits
Section 2.01. Eligible Employees. (a) This Plan is only for the benefit of
Participants, and no other employees or personnel shall be eligible to
participate in this Plan or to receive any rights or benefits hereunder.
(b) The Chairman may from time to time designate as Participants under this
Plan one or more salaried employees of the Company based in the United States
having a Salary Grade of 17 or one or more salaried employees of the Company
based in Canada having a Salary Grade of 12. Each such designation shall be
evidenced by an Instrument of Designation signed by Holdings and the Participant
substantially in the form of Exhibit A hereto. Each such Instrument of
Designation, and the designation evidenced thereby, shall be binding on the
Company. In the event that the Holdings Board thereafter determines that any
such Participant should not continue to participate in this Plan, the Holdings
Board shall be permitted, subject to the limitations set forth below, to
terminate such Participant's participation in this Plan by providing such
Participant with a written notice of such termination, which notice shall state
that it is a termination notice given pursuant to this Section 2.01(b). Any such
termination shall be and become effective on the first Computation Date
occurring after written notice of such termination is delivered to such
Participant. Upon the effective date of such termination, such Participant shall
cease to be a Participant and, accordingly, such Participant shall no longer be
-3-
31
entitled to receive any rights or benefits hereunder; provided, however, that
such termination shall not (i) affect the rights or benefits of such Participant
or the obligations of the Company accrued under this Plan as of the effective
date of such termination or (ii) reduce or eliminate the amount of Supplemental
Pay payable to such Participant hereunder that is determined by reference to the
Computation Date that is the effective date of such termination.
Section 2.02. Supplemental Pay. (a) On or before the tenth day after each
Computation Date, the Company shall pay each Participant an amount equal to such
Participant's Base Salary as of such Computation Date times such Participant's
Applicable Multiplier as of such Computation Date; provided, however, that such
Participant is an active employee of the Company as of the date such payment is
made and, provided further, that (i) with respect to each payment determined by
reference to the Computation Date March 31, 2001, the amount payable to each
such Participant shall be reduced by two-thirds and (ii) with respect to each
payment determined by reference to any other Computation Date, the amount
payable to any Participant who became a Participant during the calendar quarter
ending on such Computation Date shall be prorated based on the number of days in
such calendar quarter that such Participant was a Participant under this Plan.
(b) Notwithstanding anything to the contrary contained in this Plan or the
Bonus Plan, the aggregate amount that may be or become payable under the Bonus
Plan to any Participant hereunder based upon the Company's financial performance
for any fiscal year shall be reduced, dollar for dollar, by the aggregate amount
of Supplemental Pay paid to such Participant that was determined by reference to
Computation Dates occurring within such fiscal year. To the extent of any
inconsistencies between the terms of this Plan and the terms of the Bonus Plan,
the terms of this Plan shall govern and control.
(c) Participation in this Plan is voluntary. The Company may require that
each eligible employee execute a participation agreement as a condition to
becoming a Participant hereunder. By agreeing to participate in this Plan or by
accepting any benefits under this Plan, a Participant unconditionally agrees for
all purposes under this Plan to be bound by all of the terms and conditions of
this Plan, including the provisions of Article III hereof.
Section 2.03. Cost of Plan; Plan Unfunded; Participant's Rights Unsecured.
The entire cost of this Plan shall be borne by the Company, and no contributions
shall be required of the Participants. The Company shall not be required to
establish any special or separate fund or make any other segregation of funds or
assets to assure the payment of any benefit hereunder. The right of any
Participant to receive the benefits provided for herein shall be an unsecured
claim against the general assets of the Company.
ARTICLE III
Dispute Resolution
Section 3.01. Negotiation. Subject to Section 3.03, in case a dispute or
controversy shall arise between any Participant (or any person claiming by,
through or under any Participant)
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32
and the Company relating to or arising out of this Plan, either disputant may
give written notice to the other disputant ("Dispute Notice") that it wishes to
resolve such dispute or controversy by negotiations, in which event the
disputants shall attempt in good faith to negotiate a resolution of such dispute
or controversy. If the dispute or controversy is not so resolved within 30 days
after the effective date of the Dispute Notice, subject to Section 3.03, either
disputant may initiate arbitration of the matter as provided in Section 3.02.
All negotiations pursuant to this Section 3.01 shall be held at the Company's
principal offices in Houston, Texas (or such other place as the disputants shall
mutually agree) and shall be treated as compromise and settlement negotiations
for the purposes of the federal and state rules of evidence and procedure.
Section 3.02. Arbitration. Subject to Section 3.03, any dispute or
controversy arising out of or relating to this Plan which has not been resolved
by negotiations in accordance with Section 3.01 within 60 days of the effective
date of the Dispute Notice shall be finally settled by arbitration conducted
expeditiously in accordance with the labor arbitration rules of the American
Arbitration Association. The arbitrator shall be not empowered to award damages
in excess of compensatory damages and each disputant shall be deemed to have
irrevocably waived any damages in excess of compensatory damages. The
arbitrator's decision shall be final and legally binding on the disputants and
their successors and assigns. The fees and expenses of the arbitrator shall be
borne solely by the non-prevailing disputant or, in the event there is no clear
prevailing disputant, as the arbitrator deems appropriate. All arbitration
conferences and hearings shall be held in Houston, Texas.
Section 3.03. Exclusivity, etc. The dispute resolution procedures set forth
in Sections 3.01 and 3.02 shall not apply to any matter which, by the express
provisions of this Plan, is to be finally determined by the Compensation
Committee or by an accounting firm or employee benefits firm unless and until
the Compensation Committee, accounting firm or employee benefits firm issues its
decision. Any such determination by the Compensation Committee or an accounting
firm or employee benefits firm shall be final and may not be overturned unless
such determination is found to be arbitrary and capricious or an abuse of
discretion. No legal action may be brought with respect to this Plan except for
the purpose of specifically enforcing the provisions of this Article III or for
the purpose of enforcing any arbitration award made pursuant to Section 3.02.
ARTICLE IV
Miscellaneous Provisions
Section 4.01. Cumulative Benefits. Except as provided in Section 2.02(b)
(or as may otherwise be agreed by the applicable Participant), the rights and
benefits provided to any Participant under this Plan are cumulative of, and are
in addition to, all of the other rights and benefits provided to such
Participant under any Benefit Plan or any agreement between such Participant and
the Company.
Section 4.02. Amendment and Termination. The Holdings Board and the
Chemicals Board shall be entitled to amend or terminate this Plan at any time
and for any reason; provided,
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33
however, that no amendment or termination of this Plan shall (a) be or become
effective other than on a Computation Date, (b) affect the rights or benefits of
any Participant or the obligations of the Company accrued under this Plan as of
the effective date of such termination or amendment or (c) reduce or eliminate
the amount of Supplemental Pay payable to such Participant that is determined by
reference to the Computation Date that is the effective date of such amendment
or termination for such Participant. For purposes of this Section 4.02, the
termination of a Participant's participation in this Plan in accordance with
Section 2.01(b) shall not be deemed to be an amendment or termination of this
Plan.
Section 4.03. Administration. (a) The Compensation Committee is, as
respects the rights and obligations of all parties with an interest in this
Plan, given the powers, rights and duties specifically stated elsewhere in this
Plan and, in addition, is given full power and final discretionary authority to:
(i) make determinations with respect to the administration of this
Plan, construe and interpret its provisions, take all other actions deemed
necessary or advisable for the proper administration of this Plan and
determine all questions arising under this Plan, including the power to
determine the rights or eligibility of Participants and any other persons,
and the amounts of their benefits under this Plan, and to remedy
ambiguities, inconsistencies or omissions;
(ii) adopt such rules of procedure and regulations as in its opinion
may be necessary for the proper and efficient administration of this Plan;
(iii) enforce this Plan in accordance with its terms and in accordance
with any rules of procedure and regulations adopted by the Compensation
Committee pursuant to clause (ii) above; and
(iv) employ agents, attorneys, accountants or other persons (who also
may be employed by the Company), and allocate or delegate to them such
powers, rights and duties as the Compensation Committee may consider
necessary or advisable to properly carry out the administration of this
Plan; provided, however, that such allocation or delegation and the
acceptance thereof by such agents, attorneys, accountants or other persons
are in writing.
The Compensation Committee shall have no authority to change or modify the level
of benefits provided for Participants under this Plan. No discretionary action
by the Compensation Committee shall amend or supersede the express provisions of
this Plan.
(b) Subject to applicable law, any determination, construction or
interpretation of the provisions of this Plan, and any decision on any matter
within the discretion of the Compensation Committee, that is made by the
Compensation Committee in good faith shall be binding on all persons. In case of
any claim that the Compensation Committee (or any member thereof) did not act in
good faith, the burden of proof shall rest with the person or entity claiming
the absence of good faith.
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(c) The members of the Compensation Committee shall receive no additional
compensation for their services relating to this Plan. Any expenses properly
incurred by the Compensation Committee incident to this Plan, including the cost
of any bond required by applicable law, shall be paid by the Company.
(d) The Company shall indemnify and hold harmless each member of the
Compensation Committee against and all expenses and liabilities arising out of
his or her administrative functions or fiduciary responsibilities, including any
expenses and liabilities that are caused by or result from an act or omission
constituting the negligence of such member in the performance of such functions
or responsibilities, but excluding expenses and liabilities that are caused by
or result from such member's own gross negligence or willful misconduct.
Expenses against which such member shall be indemnified hereunder shall include,
without limitation, the amounts of any settlement or judgment, costs, counsel
fees and related charges reasonably incurred in connection with a claim asserted
or a proceeding brought or settlement thereof.
Section 4.04. Assignability. The Company shall have the right to assign
this Plan and to delegate its duties and obligations hereunder, but not
otherwise; provided, however, that no such assignment shall relieve or discharge
the Company of or from any of its obligations under this Plan. Unless otherwise
approved by the Compensation Committee, no Participant shall transfer or assign
any of his or her rights under this Plan except by will or the laws of descent
and distribution. Except as otherwise provided by law, no benefit, right or
interest of any Participant under this Plan shall be subject to pledge,
encumbrance or charge, seizure, attachment or legal, equitable or other process,
or be liable for, or subject to, debts, liabilities or other obligations.
Section 4.05. Consolidations, Mergers, Etc. Each of Holdings and Chemicals
will require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of its business,
operations or assets to expressly assume and agree to perform this Plan in
writing, in the same manner and to the same extent that Holdings or Chemicals,
as the case may be, would be required to perform hereunder if no such succession
had taken place.
Section 4.06. Benefit and Burden. This Plan shall be binding upon and inure
to the benefit of the Company and its successors and assigns. This Plan and all
rights of each Participant shall inure to the benefit of and be enforceable by
such Participant and his or her personal or legal representatives, executors,
administrators, heirs and permitted assigns. If any Participant should die while
any amounts are due and payable to such Participant hereunder, all such amounts,
unless otherwise provided herein, shall be paid in accordance with the terms of
this Plan to such Participant's devisees, legatees or other designees or, if
there be no such devisees, legatees or other designees, to such Participant's
estate.
Section 4.07. Notices. All notices and other communications provided for in
this Plan shall be in writing and shall be sent, delivered or mailed, addressed
(a) if to Holdings, Chemicals or any other Subsidiary, at Holdings' principal
office address or such other address as
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35
Holdings may have designated by written notice to all Participants for purposes
hereof, directed to the attention of the Treasurer, and (b) if to any
Participant, at his or her residence address on the records of Holdings or to
such other address as he or she may have designated to Holdings in writing for
purposes hereof. Each such notice or other communication shall be deemed to have
been duly given or mailed by United States registered mail, return receipt
requested, postage prepaid, except that any change of notice address shall be
effective only upon receipt.
Section 4.08. Withholdings. The Company shall have the right to deduct from
any Supplemental Pay all taxes (federal, state or other) and other payments
which it is required to withhold therefrom.
Section 4.09. No Employment Rights Conferred. Nothing contained in this
Plan shall (a) confer upon any Participant any right with respect to
continuation of employment with the Company or (b) subject to the rights and
benefits of any Participant hereunder, interfere in any way with the right of
the Company to terminate such Participant's employment at any time.
Section 4.10. Currency. All sums and amounts payable or to become payable
pursuant to this Plan shall be payable and paid in currency of the United States
of America; provided, however, that if any sum or amount payable or to become
payable pursuant to this Plan is to be made to any Participant who is based
outside of the United States, then such sum or amount shall be paid in the
currency of the country in which such Participant was based on the relevant due
date, with such sum or amount to be converted from United States dollars into
such other currency at the rate of exchange for such currencies prevailing on
the business day immediately preceding such due date.
Section 4.11. Governing Law. This Plan shall be governed in accordance with
the laws of the State of Texas (without giving effect to conflicts of laws
principles thereof) and applicable federal law.
IN WITNESS WHEREOF, and as conclusive evidence of the adoption of this Plan
by the Holdings Board and the Chemicals Board, Holdings and Chemicals have each
caused this Plan to be duly executed in its name and behalf by its proper
officer thereunto duly authorized as of March 1, 2001.
STERLING CHEMICALS HOLDINGS, INC.
By:
-----------------------------------------
Xxxxx X. Xxxxxx, Chairman of the Board
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36
STERLING CHEMICALS, INC.
By:
-----------------------------------------
Xxxxx X. Xxxxxx, Chairman of the Board
-9-
37
EXHIBIT A
STERLING CHEMICALS HOLDINGS, INC.
Instrument of Designation
THIS INSTRUMENT OF DESIGNATION (this "Instrument") is intended to evidence
the designation by the Chairman of the Board of Sterling Chemicals Holdings,
Inc., a Delaware corporation (the "Corporation"), of the undersigned employee as
a "Participant," within the meaning of that certain Supplemental Pay Plan of the
Corporation and Sterling Chemicals, Inc., a Delaware corporation.
IN WITNESS WHEREOF, the Corporation has caused its duly authorized officer
to execute this Instrument effective as of the date set forth below.
Dated: STERLING CHEMICALS HOLDINGS, INC.
-------------------
By:
--------------------------------------
Xxxxx X. Xxxxxx, Chairman of the Board
EMPLOYEE:
-----------------------------------
Printed Name:
---------------------
A-i
38
EXHIBIT 10.2
STERLING CHEMICALS HOLDINGS, INC.
STERLING CHEMICALS, INC.
SECOND AMENDED AND RESTATED KEY EMPLOYEE PROTECTION PLAN
PRELIMINARY STATEMENTS
A. Sterling Chemicals Holdings, Inc. and Sterling Chemicals, Inc. are Delaware
corporations.
B. The Holdings Board and the Chemicals Board (as such terms are defined
below) have previously duly adopted that certain Amended and Restated Key
Employee Protection Plan dated effective as of January 1, 2000 (the
"Existing Plan").
C. On July 13, 2001, the Holdings Board and the Chemicals Board approved
certain amendments to the Existing Plan.
D. The Holdings Board and the Chemicals Board desire to document such
amendments to the Existing Plan by amending and restating the Existing Plan
in its entirety, effective as of July 13, 2001 (the "Effective Date").
NOW, THEREFORE, the Existing Plan is hereby amended and restated to read in
its entirety as follows:
ARTICLE I
Definitions and Interpretations
Section 1.01. Definitions. Capitalized terms used in this Plan shall have
the following respective meanings, except as otherwise provided or as the
context shall otherwise require:
"Annual Compensation" shall mean, when used as of any date with reference
to any Participant, the sum of (i) the highest annual base salary of such
Participant in effect at any time during the three-year period ending
immediately prior to the date on which the applicable Change of Control occurs
or is deemed to have occurred plus (ii) the Targeted Bonus, if any, of such
Participant in effect immediately prior to the earlier of (A) the date on which
an event occurs that results in such Participant terminating his or her
employment for Good Reason and (B) the actual date of such Participant's
termination by the Company for any reason other than Misconduct or Disability.
39
"Applicable Multiplier" shall mean, when used with reference to any
Participant, the multiplier specified in the Instrument of Designation executed
and delivered by Holdings and such Participant in accordance with Section
2.01(b); provided, however, that in no event shall the Applicable Multiplier of
any Participant be less than 0.50 (except as provided in Section 2.03) or
greater than 2.99.
"Benefit Plan" shall mean any employee benefit plan (including any employee
benefit plan within the meaning of Section 3(3) of the Employee Retirement
Income Security Act of 1974), program, arrangement or practice maintained,
sponsored or provided by Holdings or any Subsidiary, including those relating to
bonuses, incentive compensation, retirement benefits, stock options, stock
ownership or stock awards, healthcare and medical benefits, disability benefits,
death benefits, disability, life, accident and travel insurance, sick leave,
vacation pay or termination pay.
"CEO" shall mean the Chief Executive Officer of Holdings.
"Chairman" shall mean the Chairman of the Board of Holdings.
"Change of Control" shall mean the occurrence of any of the following
events: (i) Holdings shall not be the surviving entity in any merger,
consolidation or other reorganization (or survives only as a subsidiary of an
entity other than a previously wholly-owned Subsidiary), (ii) Holdings sells,
leases or exchanges all or a substantial part of its assets (other than in the
ordinary course of business) to any other person or entity (other than a
wholly-owned Subsidiary), (iii) Holdings is to be dissolved and liquidated, (iv)
Chemicals sells, leases or exchanges all or a substantial part of its assets
(other than in the ordinary course of business) to any other person or entity
(other than Holdings or another wholly-owned Subsidiary), (v) Chemicals ceases
to be a wholly-owned Subsidiary for any reason other than a merger,
consolidation or other reorganization in which Holdings or a wholly-owned
Subsidiary is the surviving entity, (vi) Chemicals sells, leases or exchanges
all or substantially all of its assets to any other person or entity (other than
Holdings or another wholly-owned Subsidiary), (vii) any person or entity,
including a "group" as contemplated by section 13(d)(3) of the Securities
Exchange Act of 1934, as amended, acquires or gains ownership or control
(including the power to vote) of more than 50% of the outstanding shares of
Holdings' voting stock (based upon voting power), (viii) as a result of or in
connection with any tender or exchange offer, merger or other business
combination, sale of assets or contested election of directors (by proxy or
otherwise), the persons who were directors of Holdings immediately prior to such
offer, merger or other business combination, sale of assets or election shall
cease to constitute a majority of the Holdings Board (or a majority of the board
of directors of any successor to Holdings) or a majority of the elected officers
of Holdings immediately prior to such offer, merger or other business
combination, sale of assets or election shall cease to serve as elected officers
of Holdings (or any successor to Holdings), or (ix) the Company sells, leases or
exchanges all or substantially all of the assets or capital securities of any of
its strategic business units (each, an "SBU") to any other person or entity
(other than Holdings or another wholly-owned Subsidiary); provided, however,
that any such sale, lease or exchange shall not
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40
constitute a "Change of Control" for purposes of this clause (ix) with respect
to any Participant who was not assigned to work on a full-time basis in the
relevant SBU at the time of such sale, lease or exchange and, provided further,
that the sale, lease or exchange of all or substantially all of the assets or
capital securities of Sterling Fibers, Inc. or Sterling Chemicals Acquisitions,
Inc. (or any of its direct or indirect subsidiaries) shall not constitute a
"Change of Control" with respect to any Participant.
"Chemicals" means Sterling Chemicals, Inc. and any successor to all or
substantially all of the business, operations or assets thereof pursuant to a
Change of Control.
"Chemicals Board" means the Board of Directors of Chemicals.
"Code" shall mean the Internal Revenue Code of 1986, as amended. Reference
in this Plan to any section of the Code shall be deemed to include any
amendments or successor provisions to such section and any regulations under
such section.
"Company" shall mean Holdings and the Subsidiaries, including Chemicals.
"Compensation Committee" shall mean the Compensation Committee of the
Holdings Board.
"Disability" shall mean, when used with reference to any Participant, a
physical or mental condition of such Participant that, in the opinion of a
licensed physician reasonably acceptable to Holdings and such Participant or his
or her legal representative, (a) prevents such Participant from being able to
perform the services required of him or her as an employee of the Company, (b)
has continued for at least 180 days during any period of twelve consecutive
months and (c) is reasonably expected to continue.
"Effective Date" has the meaning specified in the Preliminary Statements.
"Existing Plan" has the meaning specified in the Preliminary Statements.
"Good Reason" shall mean, when used with reference to any Participant, any
of the following actions or failures to act, but in each case only if it occurs
(a) on or after the date that is 180 days prior to the date on which a Change of
Control occurs and (b) while such Participant is employed by Holdings or any
Subsidiary and then only if it is not consented to by such Participant in
writing:
(i) if (but only if) such Participant is Grade S23 or higher, a material
change in such Participant's reporting responsibilities, titles or
elected or appointed offices as in effect immediately prior to the
effective date of such change, including any change caused by the
removal of such Participant from, or the failure to re-elect such
Participant to, any material corporate office of the Company held by
such Participant immediately prior to such effective date but
excluding any such
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change that occurs in connection with such Participant's death,
disability or retirement;
(ii) if (but only if) such Participant is Grade S23 or higher, the
assignment to such Participant of duties and/or responsibilities
that are materially inconsistent with such Participant's status,
positions, duties, responsibilities and functions with the Company
immediately prior to the effective date of such assignment;
(iii) a material reduction by the Company in such Participant's total
compensation in effect immediately prior to the effective date of
such reduction;
(iv) the failure of the Company to continue such Participant's
eligibility for participation in employee benefit plans, programs,
arrangements and practices providing benefits that, in the
aggregate, are at least as favorable to such Participant as those
provided under the Benefit Plans in which he or she was a
participant immediately prior to the effective date of such failure;
(v) the failure of the Company to maintain employee benefit plans,
programs, arrangements and practices entitling such Participant to
benefits that, in the aggregate, are at least as favorable to such
Participant as those available to such Participant under the Benefit
Plans in which he or she was a participant immediately prior to the
effective date of such failure;
(vi) any change of more than 75 miles (or, in the case of any Participant
for whom the Compensation Committee has approved a shorter distance,
such shorter distance) in the location of the principal place of
employment of such Participant immediately prior to the effective
date of such change;
(vii) any purported termination of such Participant's employment for
Misconduct or Disability not in accordance with the provisions of
Section 3.02; or
(viii) any purported termination of such Participant's participation in
this Plan not in accordance with the provisions of Section 2.01(c).
For purposes of this definition, none of the actions described in clauses (i)
through (iii) above shall constitute a Good Reason with respect to any
Participant if it was an isolated and inadvertent action not taken in bad faith
by the Company and if it is remedied by the Company promptly after receipt of
notice thereof given by such Participant. For purposes of this definition, any
action or failure to act described in clauses (i) through (viii) above shall
cease to be a Good Reason with respect to any Participant on the date which is
60 days after such Participant acquires actual knowledge of such action or
failure to act unless, prior to such date, such Participant gives a Termination
Notice pursuant to Section 3.01. In the event of any dispute between the
Company, on the one hand, and any Participant, on the other hand, with respect
to the amount of total compensation of such Participant for purposes of clause
(c) above or the aggregate value or level of any of such Participant's
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benefits for purposes of clause (d) or (e) above, the Company and such
Participant shall use their best efforts to resolve such dispute themselves. If
they are unable to resolve the dispute within 15 business days, Deloitte &
Touche L.L.P., or such other nationally recognized accounting firm or employee
benefits firm acceptable to the Company and such Participant, shall be engaged
by the Company to make its own determination with respect to the dispute and the
determination by such firm shall be final and binding on the Company (including
the Compensation Committee) and such Participant. If any firm is engaged with
respect to any dispute as aforesaid, (i) such firm shall be instructed to make
its determination as soon as practicable and to use such materiality standard as
such firm may determine to be reasonable under the circumstances and (ii) the
disputants shall provide such firm with all books, records and other information
relevant to such dispute as such firm may reasonably request. No firm engaged as
aforesaid shall be liable or responsible to the Company (including the
Compensation Committee) or any Participant for any determination made by such
firm in good faith.
"Grade" shall mean when used with reference to any Participant for purposes
of any action described in clauses (i) and (ii) of the definition of Good
Reason, his or her salary classification by the Company immediately prior to
such action.
"Holdings" means Sterling Chemicals Holdings, Inc. and any successor to all
or substantially all of the business, operations or assets thereof pursuant to a
Change of Control.
"Holdings Board" means the Board of Directors of Holdings.
"Misconduct" shall mean, when used with reference to any Participant:
(a) the commission by such Participant of acts that are both dishonest and
demonstrably injurious to the Company (monetarily or otherwise) in any
material respect;
(b) the failure of such Participant to observe and comply with the
Company's published policies relating to alcohol and drugs, harassment
or antitrust;
(c) the failure of such Participant to observe and comply with any other
lawful published policy of the Company, but, in the case of any such
failure that is capable of being remedied, only if such failure shall
have continued unremedied for more than 30 days after written notice
thereof is given to such Participant by Holdings and/or Chemicals;
(d) the willful failure of such Participant to observe and comply with all
lawful and ethical directions and instructions of the Holdings Board,
the Chairman and/or the CEO;
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(e) the failure of such Participant to perform, in any material respect,
his or her duties with the Company, but only if such failure was not
caused by disability or incapacity and shall have continued unremedied
for more than 30 days after written notice thereof is given to such
Participant by Holdings and/or Chemicals;
(f) the conviction of such Participant for a felony offense; or
(g) any willful conduct on the part of such Participant that prejudices,
in any material respect, the reputation of the Company in the fields
of business in which it is engaged or with the investment community or
the public at large, but only if such Participant knew, or should have
known, that such conduct could have such result.
For purposes of clauses (d) and (g) above, no act or failure to act on the part
of any Participant shall be considered "willful" if such act or failure to act
was done or omitted to be done by such Participant in good faith and with the
reasonable belief that such Participant's action or omission was in the best
interest of the Company. If any Participant is a party to a written employment
agreement with the Company, then clause (d) above shall not apply to any
directions or instructions that are contrary to or inconsistent with any of the
positions, functions, duties or reporting responsibilities of such Participant
as set forth in such written employment agreement or that violate any of such
Participant's rights, privileges or immunities under such employment agreement.
In case of any dispute regarding whether or not any conduct by a Participant
meets any of the standards set forth in clauses (a) through (g) above, the
burden of proof shall rest with the Company.
"Participants" shall mean, except as otherwise provided in Section 2.01(c),
those employees of Holdings or any Subsidiary who are from time to time
designated by the Compensation Committee as Participants in accordance with
Section 2.01(b).
"Pension Plan" shall mean the Sterling Chemicals, Inc. Amended and Restated
Salaried Employees' Pension Plan (effective as of May 1, 1996) or any successor
plan.
"Plan" shall mean this Second Amended and Restated Key Employee Protection
Plan, as amended, supplemented or modified from time to time in accordance with
its terms.
"Qualified Plan" shall mean a "qualified plan" within the meaning of
section 401(a) of the Code.
"Severance Amount" has the meaning specified in Section 2.02(a)(i).
"Subsidiary" shall mean any corporation, limited partnership, general
partnership, limited liability company or other form of entity a majority of any
class of voting stock or other voting rights of which is owned, directly or
indirectly, by Holdings.
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"Targeted Bonus" shall mean, when used with reference to any Participant at
any time, the amount determined by multiplying (i) the annual base salary of
such Participant in effect immediately prior to the earlier of (A) the date on
which an event occurs that results in such Participant terminating his or her
employment for Good Reason and (B) the actual date of such Participant's
termination by the Company for any reason other than Misconduct or Disability
times (ii) such Participant's Target Bonus Percentage, if any, in effect on such
earlier date under the Company's bonus plan for salaried employees.
"Termination Date" shall mean, with respect to any Participant, the
termination date specified in the Termination Notice delivered by such
Participant to the Company in accordance with Section 3.01 or the actual date of
termination of such Participant's employment by the Company for any reason other
than Misconduct or Disability, as applicable.
"Termination Notice" shall mean, as appropriate, (a) a notice from a
Participant to Holdings purporting to terminate such Participant's employment
for Good Reason in accordance with Section 3.01 or (b) a notice from Holdings
and/or Chemicals to any Participant purporting to terminate such Participant's
employment for Misconduct or Disability in accordance with Section 3.02.
Section 1.02. Interpretation. In this Plan, unless a clear contrary
intention appears, (a) the words "herein," "hereof" and "hereunder" and other
words of similar import refer to this Plan as a whole and not to any particular
Article, Section or other subdivision, (b) reference to any Article or Section,
means such Article or Section hereof and (c) the words "including" (and with
correlative meaning "include") means including, without limiting the generality
of any description preceding such term. The Article and Section headings herein
are for convenience only and shall not affect the construction hereof.
ARTICLE II
Eligibility and Benefits
Section 2.01. Eligible Employees. (a) This Plan is only for the benefit of
Participants, and no other employees or personnel shall be eligible to
participate in this Plan or to receive any rights or benefits hereunder.
(b) The Compensation Committee shall be authorized from time to time to
designate one or more members of a select group of management or highly
compensated employees of the Company as Participants. Each such designation
shall be evidenced by an Instrument of Designation signed by Holdings and the
Participant substantially in the form of Exhibit A hereto. Each such Instrument
of Designation, and the designation evidenced thereby, shall be binding on the
Company.
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(c) In the event that the Holdings Board determines in good faith that any
Participant is no longer a key employee of the Company and thus should not
continue to participate in this Plan, the Holdings Board shall be permitted,
subject to the limitations set forth below, to terminate such Participant's
participation in this Plan on such date as shall be specified by written notice
delivered to such Participant not less than 60 days prior to the date so
specified, which notice shall state that it is a termination notice given
pursuant to this Section 2.01(c). Upon the effective date of such termination,
such Participant shall cease to be a Participant and, accordingly, such
Participant shall no longer be entitled to receive any rights or benefits
hereunder; provided, however, that such termination shall not affect the rights
or benefits of such Participant or the obligations of the Company accrued under
this Plan as of the effective date of such termination or the rights or benefits
of such Participant or the obligations of the Company accruing under this Plan
after the effective date of such termination on account of any Change of Control
that occurred on or before such effective date or that occurs within 180 days
after such effective date. Notwithstanding the foregoing, the Compensation
Committee shall not be permitted to terminate any Participant's participation in
this Plan unless the sole reason therefor is that, in the good faith opinion of
the Compensation Committee, such Participant has ceased to be a key employee of
the Company and thus should not continue to participate in this Plan. Without
limitation of the foregoing, the Compensation Committee may not terminate any
Participant's participation in this Plan if such termination is directly or
indirectly related to, connected with, in anticipation of, in furtherance of,
pursuant to the terms of or during the pendency of any Change of Control or is
for the purpose of directly or indirectly encouraging or facilitating a Change
of Control. In case of any dispute regarding whether or not any purported
termination of any Participant's participation in this Plan is permitted by, or
satisfies any of the requirements of, this paragraph (c), the burden of proof
shall rest with the Company.
Section 2.02. Description of Benefits Triggered by Termination following a
Change of Control. (a) Each Participant shall be entitled to receive the
benefits described below if a Change of Control occurs after the Effective Date
and if, during the period commencing 180 days prior to the date on which such
Change of Control occurs and ending two years after the date on which such
Change of Control occurs, either such Participant terminates or has terminated
his or her employment for Good Reason in accordance with Section 3.01 or the
Company terminates or has terminated such Participant's employment for any
reason other than a termination for Misconduct or Disability in accordance with
Section 3.02:
(i) the Company shall pay to such Participant, within 30 days after
such Participant's Termination Date or, in the event that such
Participant's Termination Date occurred within the 180-day period
immediately preceding the occurrence of a Change of Control, within 30 days
after such Change of Control, a lump sum cash payment equal to the sum of
(A) the amount (the "Severance Amount") determined (subject to Section
2.04(b)) by multiplying the Annual Compensation of such Participant times
the Applicable Multiplier, plus (B) all unused vacation time accrued by
such Participant as of the Termination Date under the Company's vacation
policy, plus (C) all accrued but unpaid compensation earned by such
Participant as of the Termination Date, plus (D) all unpaid vested benefits
earned or accrued by such Participant as of the Termination Date under any
Benefit Plan (other than a Qualified Plan) in effect immediately prior to
the date on which
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the Change of Control occurs; provided, however, that any amounts payable
to any Participant pursuant to this clause (i) shall be reduced by an
amount equal to the aggregate amount previously paid to such Participant by
the Company pursuant to Section 2.03 by reference to this clause (i); and
(ii) for a period of 24 months (including 18 months of COBRA coverage)
following the Termination Date (including any period during which such
Participant was covered by such plans and programs pursuant to Section
2.03), such Participant shall continue to be covered by all life, health
care, medical and dental insurance plans and programs (excluding
disability) of the Company by which he or she was covered on the
Termination Date notwithstanding any subsequent termination or amendment of
any such plan or programs and notwithstanding any eligibility provisions
thereof to the contrary, provided that (A) such Participant makes a timely
COBRA election following the Termination Date and (B) such Participant pays
the regular employee premium required by such plans and programs or by
COBRA, as the case may be.
(b) No Participant shall be entitled to receive any of the benefits
described in this Section 2.02 on account of any Change of Control unless such
Change of Control occurred (i) while such Participant was employed by the
Company or (ii) within 180 days after such Participant's Termination Date.
Section 2.03. Description of Benefits Triggered by Termination Without a
Change of Control. If, under circumstances where Section 2.02 is inapplicable,
any Participant terminates his or her employment for Good Reason in accordance
with Section 3.01 or the Company terminates such Participant's employment for
any reason other than a termination for Misconduct or Disability in accordance
with Section 3.02, then such Participant shall be entitled to receive, and the
Company shall be obligated to pay and provide, all the benefits described in
Section 2.02 the same as if a Change of Control had occurred on the date which
is 60 days prior to the relevant Termination Date; provided, however, that, for
purposes of calculating the Severance Amount payable to such Participant under
this Section 2.03, the Applicable Multiplier of such Participant shall be
reduced by 50%. In the case of each termination of employment covered by this
Section 2.03, a Change of Control shall be deemed to have occurred on the date
which is 60 days prior to the relevant Termination Date and, accordingly, all
other provisions of this Plan shall be construed as if a Change of Control had
actually occurred on such date.
Section 2.04. Additional Provisions Relating to Benefits under Sections
2.02 and 2.03. (a) Anything in this Plan to the contrary notwithstanding, (i)
the Company shall not be obligated to pay a Severance Amount to any Participant
below Grade S23 or continue the non-COBRA benefits described in Section
2.02(a)(ii) for such Participant if the Termination Date is after such
Participant's normal Retirement Date (as defined in the Pension Plan) and (ii)
the Company's obligation to continue the benefits described in Section
2.02(a)(ii) for any Participant shall cease if and when such Participant becomes
employed, on a full-time basis, by a third party which provides such Participant
with substantially similar benefits.
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(b) Anything in this Plan to the contrary notwithstanding, the amount of
the Severance Amount payable to any Participant under this Plan shall be reduced
by the aggregate amount of all separation, severance or termination payments due
to such Participant under (i) any Benefit Plan (other than this Plan), (ii) any
agreement between such Participant and the Company or (ii) any applicable law,
statute, rule, regulation, order or decree (or other pronouncement having the
effect of law) of any nation or governmental authority.
Section 2.05. Certain Additional Payments by the Company. Anything in this
Plan to the contrary notwithstanding, in the event it shall be determined that
any payment or distribution to or for the benefit of any Participant under this
Plan (the "Triggering Payment") would be subject to the excise tax imposed by
Section 4999 of the Code or any interest or penalties with respect to such
excise tax (such excise tax, together with any such interest or penalties, being
collectively referred to below as the "Excise Tax"), then such Participant shall
be entitled to receive from the Company an additional payment (the "Gross-Up
Payment") in an amount such that after payment by such Participant of all taxes
(including any interest or penalties imposed with respect to such taxes)
including any Excise Tax imposed on the Gross-Up Payment, such Participant
retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon
the Triggering Payment. Notwithstanding the foregoing, in no event shall any
Participant be entitled to receive a Gross-Up Payment greater than 25% of such
Participant's Annual Compensation. All determinations required to be made under
this Section 2.05 with respect to a particular Participant shall be made by the
independent accounting firm then retained by Holdings in the ordinary course of
business (which firm shall provide detailed supporting calculations to the
Company and such Participant) and such determinations shall be final and binding
on the Company (including the Compensation Committee) and all Participants.
Section 2.06. Cost of Plan; Plan Unfunded; Participant's Rights Unsecured.
The entire cost of this Plan shall be borne by the Company, and no contributions
shall be required of the Participants. The Company shall not be required to
establish any special or separate fund or make any other segregation of funds or
assets to assure the payment of any benefit hereunder. The right of any
Participant to receive the benefits provided for herein shall be an unsecured
claim against the general assets of the Company.
ARTICLE III
Termination Notices
Section 3.01. Termination Notices from Participants. For purposes of this
Plan, in order for any Participant to terminate his or her employment for Good
Reason, such Participant must give a written notice of termination to Holdings
and/or Chemicals, which notice shall be in writing and signed by such
Participant, shall be dated the date it is given to Holdings and/or Chemicals,
shall specify the termination date and shall state that the termination is for a
Good Reason and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for such Good Reason. Any Termination Notice given by
a Participant that is not in compliance, in all material respects, with the
foregoing requirements shall be invalid and ineffective for purposes of this
Plan. If Holdings or Chemicals receives from any Participant a
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Termination Notice that it believes is invalid and ineffective as aforesaid, it
shall promptly notify such Participant of such belief and the reasons therefor.
Section 3.02.Termination Notices from Company. For purposes of this Plan,
in order for the Company to terminate any Participant's employment for
Misconduct, Holdings and/or Chemicals must give a written notice of termination
to such Participant, which notice shall be dated the date it is given to such
Participant, shall specify the termination date and shall state that the
termination is for Misconduct and shall set forth in reasonable detail the
particulars thereof. For purposes of this Plan, in order for the Company to
terminate any Participant's employment for Disability, Holdings and/or Chemicals
must give a written notice of termination to such Participant, which notice
shall be dated the date it is given to such Participant, shall specify the
termination date and shall state that the termination is for Disability and
shall set forth in reasonable detail the particulars thereof. Any Termination
Notice given by Holdings and/or Chemicals that is not in compliance, in all
material respects, with the foregoing requirements shall be invalid and
ineffective for purposes of this Plan. Any Termination Notice purported to be
given by Holdings and/or Chemicals to any Participant after the death or
retirement of such Participant shall be invalid and ineffective.
ARTICLE IV
Dispute Resolution
Section 4.01. Negotiation. Subject to Section 4.03, in case a dispute or
controversy shall arise between any Participant (or any person claiming by,
through or under any Participant) and the Company (including the Compensation
Committee) relating to or arising out of this Plan, either disputant may give
written notice to the other disputant ("Dispute Notice") that it wishes to
resolve such dispute or controversy by negotiations, in which event the
disputants shall attempt in good faith to negotiate a resolution of such dispute
or controversy. If the dispute or controversy is not so resolved within 30 days
after the effective date of the Dispute Notice, subject to Section 4.03, either
disputant may initiate arbitration of the matter as provided in Section 4.02.
All negotiations pursuant to this Section 4.01 shall be held at the Company's
principal offices in Houston, Texas (or such other place as the disputants shall
mutually agree) and shall be treated as compromise and settlement negotiations
for the purposes of the federal and state rules of evidence and procedure.
Section 4.02. Arbitration. Subject to Section 4.03, any dispute or
controversy arising out of or relating to this Plan which has not been resolved
by negotiations in accordance with Section 4.01 within 30 days of the effective
date of the Dispute Notice shall, upon the written request of either disputant,
be finally settled by arbitration conducted expeditiously in accordance with the
labor arbitration rules of the American Arbitration Association. The arbitrator
shall be not empowered to award damages in excess of compensatory damages and
each disputant shall be deemed to have irrevocably waived any damages in excess
of compensatory damages. The arbitrator's decision shall be final and legally
binding on the disputants and their successors and assigns. The fees and
expenses of the arbitrator shall be borne solely by the prevailing disputant
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or, in the event there is no clear prevailing disputant, as the arbitrator deems
appropriate. All arbitration conferences and hearings shall be held in Houston,
Texas.
Section 4.03. Exclusivity, etc. The dispute resolution procedures set forth
in Sections 4.01 and 4.02 shall not apply to any matter which, by the express
provisions of this Plan, is to be finally determined by the Compensation
Committee or by an accounting firm or employee benefits firm. No legal action
may be brought with respect to this Plan except for the purpose of specifically
enforcing the provisions of this Article IV or for the purpose of enforcing any
arbitration award made pursuant to Section 4.02.
ARTICLE V
Miscellaneous Provisions
Section 5.01. Cumulative Benefits. Except as provided in Section 2.04(b),
the rights and benefits provided to any Participant under this Plan are
cumulative of, and are in addition to, all of the other rights and benefits
provided to such Participant under any Benefit Plan or any agreement between
such Participant and the Company.
Section 5.02. No Mitigation. No Participant shall be required to mitigate
the amount of any payment provided for in this Plan by seeking or accepting
other employment following a termination of his or her employment with the
Company or otherwise, nor shall the amount of any payment provided for in this
Plan be reduced by any compensation or benefit earned by a Participant as the
result of employment by another employer or by retirement benefits. The
Company's obligations to make payments to any Participant required under this
Plan shall not be affected by any set off, counterclaim, recoupment, defense or
other claim, right or action that the Company may have against such Participant.
Section 5.03. Amendment and Termination. (a) The Holdings Board and the
Chemicals Board shall be entitled to terminate this Plan at any time and for any
reason; provided, however, that in no event shall such termination become
effective with respect to any Participant prior to 90 days after notice of such
termination is given to such Participant.
(b) The Holdings Board and the Chemicals Board shall be entitled to amend
this Plan at any time and for any reason; provided, however, that no amendment
that would effectively reduce, alter, suspend or otherwise impair or prejudice
the rights and benefits (whether accrued or unaccrued) of any Participant in any
material respect (a "Material Amendment") shall become effective with respect to
any Participant prior to 90 days after notice of such amendment is given to such
Participant. For purposes of this paragraph (b), the termination of a
Participant's participation in this Plan in accordance with Section 2.01(c)
shall not be deemed to be an amendment of this Plan.
(c) Notwithstanding the foregoing, no termination of this Plan and no
Material Amendment shall be effective with respect to, binding upon or reduce
any benefits payable hereunder to, any person who at the time is a Participant
if such termination or Material
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Amendment is (i) directly or indirectly related to, connected with, in
anticipation of, in furtherance of, pursuant to the terms of or during the
pendency of any Change of Control or is for the purpose of directly or
indirectly encouraging or facilitating a Change of Control or (ii) made within
180 days prior to the date of any Change of Control.
(d) No termination or amendment of this Plan shall affect the rights or
benefits of any Participant or the obligations of the Company accrued under this
Plan as of the effective date of such termination or amendment or any of the
rights or benefits of such Participant or the obligations of the Company
accruing under this Plan after the effective date of such termination or
amendment on account of any Change of Control that occurred prior to such
effective date or within 180 days after such effective date. If any Participant
shall become entitled to benefits under this Plan during the term of this Plan,
then, notwithstanding the termination or amendment of this Plan, the benefits
payable hereunder to such Participant shall be paid in full.
(e) In case of any dispute regarding whether or not any purported
termination or amendment of this Plan is permitted by, or satisfies any of the
requirements of, this Section 5.03, the burden of proof shall rest with the
Company.
Section 5.04. Enforceability. The provisions of this Plan (i) are for the
benefit of, and may be enforced directly by, each Participant the same as if the
provisions of this Plan were set forth in their entirety in a written instrument
executed and delivered by the Company and such Participant and (ii) constitute a
continuing offer to all present and future Participants. Holdings and Chemicals,
by their adoption of this Plan, (a) acknowledge and agree that each present and
future Participant has relied upon and will continue to rely upon the provisions
of this Plan in becoming, and serving as, an employee of the Company, (b) waive
reliance upon, and all notices of acceptance of, this Plan by the Participants
and (c) acknowledge and agree that no present or future Participant shall be
prejudiced in his or her right to enforce directly the provisions of this Plan
in accordance with the terms by any act or failure to act on the part of the
Company.
Section 5.05. Administration. (a) The Compensation Committee shall have
full and final authority to make determinations with respect to the
administration of this Plan, to construe and interpret its provisions and to
take all other actions deemed necessary or advisable for the proper
administration of this Plan, but such authority shall be subject to the
provisions of this Plan. Subject to Section 2.02(c), the Compensation Committee
shall have no authority to change or modify the level of benefits provided for
Participants under this Plan. No discretionary action by the Compensation
Committee shall amend or supersede the express provisions of this Plan. In
making determinations and taking other actions with respect to this Plan, the
members of the Compensation Committee will be deemed to be fiduciaries with the
same duties imposed upon plan fiduciaries by the Employee Retirement Income
Security Act of 1974.
(b) The members of the Compensation Committee shall receive no additional
compensation for their services relating to this Plan. Any expenses properly
incurred by the Compensation Committee incident to this Plan, including the cost
of any bond required by applicable law, shall be paid by the Company.
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(c) The Company shall indemnify and hold harmless each member of the
Compensation Committee against and all expenses and liabilities arising out of
his or her administrative functions or fiduciary responsibilities, including any
expenses and liabilities that are caused by or result from an act or omission
constituting the negligence of such member in the performance of such functions
or responsibilities, but excluding expenses and liabilities that are caused by
or result from such member's own gross negligence or willful misconduct.
Expenses against which such member shall be indemnified hereunder shall include,
without limitation, the amounts of any settlement or judgment, costs, counsel
fees, and related charges reasonably incurred in connection with a claim
asserted or a proceeding brought or settlement thereof.
Section 5.06. Release of Claims. As a condition to receipt of the benefits
under this Plan, a Participant will be required to sign an agreement, to be
prepared by Holdings, in which he or she releases the Company and its
successors, assigns, divisions, subsidiaries, representatives, agents, officers,
directors, stockholders, and employees from any claims, demands and/or causes of
action relating to or arising out of the termination of his or her employment
with the Company, including, but not limited to any statutory claims under the
Age Discrimination in Employment Act of 1967, the Americans with Disabilities
Act of 1990, the Civil Rights Acts of 1964 and 1991, and/or the Texas Commission
on Human Rights Act.
Section 5.07. Assignability. The Company shall have the right to assign
this Plan and to delegate its duties and obligations hereunder, but not
otherwise; provided, however, that no such assignment shall relieve or discharge
the Company of or from any of its obligations under this Plan. Unless otherwise
approved by the Compensation Committee, no Participant shall transfer or assign
any of his or her rights under this Plan except by will or the laws of descent
and distribution.
Section 5.08. Consolidations, Mergers, Etc. Each of Holdings and Chemicals
will require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of its business,
operations or assets to expressly assume and agree to perform this Plan in
writing, in the same manner and to the same extent that Holdings or Chemicals,
as the case may be, would be required to perform hereunder if no such succession
had taken place.
Section 5.09. Successors and Assigns. This Plan shall be binding upon and
inure to the benefit of the Company and its successors and assigns. This Plan
and all rights of each Participant shall inure to the benefit of and be
enforceable by such Participant and his or her personal or legal
representatives, executors, administrators, heirs and permitted assigns. If any
Participant should die while any amounts are due and payable to such Participant
hereunder, all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Plan to such Participant's devisees, legatees
or other designees or, if there be no such devisees, legatees or other
designees, to such Participant's estate.
Section 5.10. Notices. All notices and other communications provided for in
this Plan shall be in writing and shall be sent, delivered or mailed, addressed
as follows: (i) if to
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Holdings, Chemicals or any other Subsidiary, at Holdings' principal office
address or such other address as Holdings may have designated by written notice
to all Participants for purposes hereof, directed to the attention of the
Treasurer, and (ii) if to any Participant, at his or her residence address on
the records of Holdings or to such other address as he or she may have
designated to Holdings in writing for purposes hereof. Each such notice or other
communication shall be deemed to have been duly given or mailed by United States
registered mail, return receipt requested, postage prepaid, except that any
change of notice address shall be effective only upon receipt.
Section 5.11. Tax Withholdings. The Company shall have the right to deduct
from any payment hereunder all taxes (federal, state or other) which it is
required to be withhold therefrom.
Section 5.12. No Employment Rights Conferred. Nothing contained in this
Plan shall (i) confer upon any Participant any right with respect to
continuation of employment with the Company or (ii) subject to the rights and
benefits of any Participant hereunder, interfere in any way with the right of
the Company to terminate such Participant's employment at any time.
Section 5.13. Governing Law. This Plan shall be governed in accordance with
the laws of the State of Texas and applicable federal law.
IN WITNESS WHEREOF, and as conclusive evidence of the adoption of this Plan
by the Holdings Board and the Chemicals Board, Holdings and Chemicals have each
caused this Plan to be duly executed in its name and behalf by its proper
officer thereunto duly authorized as of the Effective Date.
STERLING CHEMICALS HOLDINGS, INC.
By:
--------------------------------------
Xxxxx X. Xxxxxx, Chairman of the Board
STERLING CHEMICALS, INC.
By:
--------------------------------------
Xxxxx X. Xxxxxx, Chairman of the Board
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EXHIBIT A
STERLING CHEMICALS HOLDINGS, INC.
Instrument of Designation
THIS INSTRUMENT OF DESIGNATION (this "Instrument") is intended to evidence
the designation by the Compensation Committee of the Board of Directors of
Sterling Chemicals Holdings, Inc., a Delaware corporation (the "Corporation"),
of the undersigned employee as a "Participant," within the meaning of that
certain Key Employee Protection Plan of the Corporation and Sterling Chemicals
Holdings, Inc., a Delaware corporation, with an Applicable Multiplier (as
defined therein) of _____________.
IN WITNESS WHEREOF, the Corporation has caused its duly authorized officer
to execute this Instrument effective as of the date set forth below.
Dated: STERLING CHEMICALS HOLDINGS, INC.
-------------------
By:
-----------------------------------
Printed Name:
-------------------------
Title:
--------------------------------
EMPLOYEE:
---------------------------------------
Printed Name:
-------------------------
A-i
54
EXHIBIT 10.3
STERLING CHEMICALS HOLDINGS, INC.
STERLING CHEMICALS, INC.
AMENDED AND RESTATED SEVERANCE PAY PLAN
PRELIMINARY STATEMENTS
A. Sterling Chemicals Holdings, Inc. and Sterling Chemicals, Inc. are Delaware
corporations.
B. On March 8, 2001, the Holdings Board and the Chemicals Board (as such terms
are defined below) approved a severance pay plan (the "Existing Plan").
C. On July 13, 2001, the Holdings Board and the Chemicals Board approved
certain amendments to the Existing Plan.
D. The Holdings Board and the Chemicals Board desire to document such
amendments to the Existing Plan by amending and restating the Existing Plan
in its entirety, effective as of July 13, 2001 (the "Effective Date").
NOW, THEREFORE, the Existing Plan is hereby amended and restated to read in
its entirety as follows:
ARTICLE I
Definitions and Interpretations
Section 1.01. Definitions. Capitalized terms used in this Plan shall have
the following respective meanings, except as otherwise provided or as the
context shall otherwise require:
"Applicable Multiplier" has the meaning specified in Section 2.02(a).
"Base Salary" has the meaning specified in Section 2.02(a).
"Benefit Plan" means any employee benefit plan (including any employee
benefit plan within the meaning of Section 3(3) of the Employee Retirement
Income Security Act of 1974), program, arrangement or practice maintained,
sponsored or provided by Holdings or any Subsidiary, including those relating to
bonuses, incentive compensation, retirement benefits, stock options, stock
ownership or stock awards, healthcare and medical benefits, disability benefits,
death benefits, disability, life, accident and travel insurance, sick leave,
vacation pay or termination pay, as amended, or any successor to any of such
plans.
55
"Change of Control" means the occurrence of any of the following events:
(i) Holdings shall not be the surviving entity in any merger, consolidation or
other reorganization (or survives only as a subsidiary of an entity other than a
previously wholly-owned Subsidiary); (ii) Holdings or Chemicals is dissolved and
liquidated; (iii) Chemicals sells, leases or exchanges all of its assets or a
Substantial Part of its Assets (other than in the ordinary course of business)
to any other person or entity (other than Holdings or another wholly-owned
Subsidiary); (iv) Chemicals ceases to be a wholly-owned Subsidiary of Holdings
for any reason other than a merger, consolidation or other reorganization in
which Holdings or a wholly-owned Subsidiary is the surviving entity; (v) any
"person" (as that term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended) other than one or more of the Excluded
Holders, is or becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5
under the Securities Exchange Act of 1934, as amended, except that a person will
be deemed to have "beneficial ownership" of all shares that such person has the
right to acquire, whether such right is exercisable immediately or only after
the passage of time), directly or indirectly, of more than 50% of the then
outstanding shares of Holdings' that are normally entitled to vote in the
election of directors (based upon voting power); (vi) individuals who as of
March 8, 2001 constituted the Holdings Board (together with any new directors
whose election by the Holdings Board or whose nomination for election by the
stockholders of Holdings was approved by a majority of the directors of Holdings
then still in office who were either directors at the beginning of such period
or whose election or nomination for election was previously so approved) cease
for any reason to constitute a majority of the Holdings Board then in office; or
(vii) the Company sells, leases or exchanges all or substantially all of the
assets or capital securities of any of its strategic business units (each, an
"SBU") to any other person or entity (other than Holdings or another
wholly-owned Subsidiary); provided, however, that any such sale, lease or
exchange shall not constitute a "Change of Control" for purposes of this clause
(vii) with respect to any Participant who was not assigned to work on a
full-time basis in the relevant SBU at the time of such sale, lease or exchange
and, provided further, that the sale, lease or exchange of all or substantially
all of the assets or capital securities of Sterling Fibers, Inc. or Sterling
Chemicals Acquisitions, Inc. (or any of its direct or indirect subsidiaries)
shall not constitute a "Change of Control" with respect to any Participant.
"Chemicals" means Sterling Chemicals, Inc. and any successor to all or
substantially all of the business, operations or assets thereof.
"Chemicals Board" means the Board of Directors of Chemicals.
"COBRA" means the Consolidated Omnibus Budget Reconciliation Act of 1985,
as amended. Reference in this Plan to COBRA shall be deemed to include any
amendments or successor provisions to COBRA and any regulations thereunder.
"Code" means the Internal Revenue Code of 1986, as amended. Reference in
this Plan to any section of the Code shall be deemed to include any amendments
or successor provisions to such section and any regulations under such section.
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"Company" means Holdings and the Subsidiaries, including Chemicals.
"Compensation Committee" means the Compensation Committee of Holdings.
"Disability" means, with respect to any Participant, a physical or mental
condition of such Participant that results in such Participant becoming eligible
for long term disability benefits under the Company's long term disability
Benefit Plan.
"Excluded Holders" means the parties, as of March 8, 2001, to that certain
Sterling Chemicals Holdings, Inc. Stockholders Agreement dated effective as of
August 21, 1996, as amended.
"Good Reason" means, with respect to any Participant, any of the following
actions or failures to act, but in each case only if it occurs (a) on or after
the date that is 180 days prior to the date on which a Change of Control occurs
and (b) while such Participant is employed by Holdings or any Subsidiary, and
then only if it is not consented to by such Participant in writing:
(i) a material reduction by the Company in such Participant's total
compensation in effect immediately prior to the effective date of such
reduction;
(ii) the failure of the Company to continue such Participant's eligibility
for participation in employee benefit plans, programs, arrangements
and practices providing benefits that, in the aggregate, are at least
as favorable to such Participant as those provided under the Benefit
Plans in which he or she was a participant immediately prior to the
effective date of such failure;
(iii)the failure of the Company to maintain employee benefit plans,
programs, arrangements and practices entitling such Participant to
benefits that, in the aggregate, are at least as favorable to such
Participant as those available to such Participant under the Benefit
Plans in which he or she was a participant immediately prior to the
effective date of such failure; or
(iv) any change of more than 75 miles (or, in the case of any Participant
for whom the Compensation Committee has approved a shorter distance,
such shorter distance) in the location of the principal place of
employment of such Participant immediately prior to the effective date
of such change.
For purposes of this definition, any action or failure to act described in
clauses (i) through (iv) above shall cease to be a Good Reason with respect to
any Participant on the date which is 30 days after such Participant acquires
actual knowledge of such action or failure to act unless, prior to such date,
such Participant gives a Termination Notice pursuant to Section 2.05. In the
event of any dispute between the Company, on the one hand, and any Participant,
on the other hand, with respect to the amount of total compensation of such
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Participant for purposes of clause (i) above or the aggregate value or level of
any of such Participant's benefits for purposes of clause (ii) or (iii) above,
the Company and such Participant shall use their best efforts to resolve such
dispute themselves. If they are unable to resolve the dispute within 15 business
days, Deloitte & Touche L.L.P., or such other nationally recognized accounting
firm or employee benefits firm acceptable to the Company and such Participant,
shall be engaged by the Company to make its own determination with respect to
the dispute and the determination by such firm shall be final and binding on the
Company (including the Compensation Committee) and such Participant. In case of
any dispute regarding the amount of total compensation of a Participant or the
value or level of a Participant's benefits, the burden of proof shall rest with
the Participant. If any firm is engaged with respect to any dispute as
aforesaid, (A) such firm shall be instructed to make its determination as soon
as practicable and to use such materiality standard as such firm may determine
to be reasonable under the circumstances and (B) the disputants shall provide
such firm with all books, records and other information relevant to such dispute
as such firm may reasonably request. No firm engaged as aforesaid shall be
liable or responsible to the Company (including the Compensation Committee) or
any Participant for any determination made by such firm in good faith. In case
of any claim that such firm did not act in good faith, the burden of proof shall
rest with the person or entity claiming the absence of good faith.
"Holdings" means Sterling Chemicals Holdings, Inc. and any successor to all
or substantially all of the business, operations or assets thereof.
"Holdings Board" means the Board of Directors of Holdings.
"Misconduct" means, with respect to any Participant:
(i) the commission by such Participant of acts that are both dishonest
and demonstrably injurious to the Company (monetarily or otherwise)
in any material respect;
(ii) the failure of such Participant to observe and comply with the
Company's published policies relating to alcohol and drugs,
harassment or compliance with applicable laws;
(iii) the failure of such Participant to observe and comply with any other
lawful published policy of the Company, but, in the case of any such
failure that is capable of being remedied, only if such failure shall
have continued unremedied for more than 30 days after written notice
thereof is given to such Participant by Holdings or Chemicals;
(iv) the willful failure of such Participant to observe and comply with
all lawful and ethical directions and instructions of the Holdings
Board, any person to whom such Participant reports or any person who
has greater authority than such Participant with respect to the
relevant directions or instructions;
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(v) the failure of such Participant to perform, in any material respect,
his or her duties with the Company, but only if such failure was not
caused by disability or incapacity and shall have continued
unremedied for more than 30 days;
(vi) the conviction of such Participant for a felony offense; or
(vii) any willful conduct on the part of such Participant that prejudices,
in any material respect, the reputation of the Company in the fields
of business in which it is engaged or with the investment community
or the public at large, but only if such Participant knew, or should
have known, that such conduct could have such result.
If any Participant is a party to a written employment agreement with the
Company, then clause (iv) above shall not apply to any directions or
instructions that are contrary to or inconsistent with any of the positions,
functions, duties or reporting responsibilities of such Participant as set forth
in such written employment agreement or that violate any of such Participant's
rights, privileges or immunities under such employment agreement. In case of any
dispute regarding whether or not any conduct by a Participant meets any of the
standards set forth in clauses (i) through (vii) above, the burden of proof
shall rest with the Company.
"Participants" means all non-union employees of the Company (salaried and
hourly) who are based in the United States; provided, however, that no employee
of the Company that was given notice of his or her termination or layoff, or
proposed termination or layoff, prior to April 1, 2001 shall be a Participant
hereunder and, provided further, that, except as the Compensation Committee may
otherwise provide in writing, any individual who is not paid through the
Company's payroll system, or who is classified by the Company for purposes of
this Plan as an independent contractor (or some other non-common law employee
category), shall not be a "Participant" under this Plan, notwithstanding such
individual's subsequent or retroactive (i) payment through the Company's payroll
system or (ii) classification or reclassification for tax or other purposes.
"Pension Plans" means the Sterling Chemicals, Inc. Amended and Restated
Salaried Employees' Pension Plan (effective as of May 1, 1996), as amended, and
the Sterling Chemicals, Inc. Hourly Paid Employees' Pension Plan (effective as
of May 1, 1996), as amended, or any successor to either of such plans.
"Plan" means this Severance Pay Plan, as amended, supplemented or modified
from time to time in accordance with its terms.
"Severance Amount" has the meaning specified in Section 2.02(a)(i).
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"Subsidiary" means any corporation, limited partnership, general
partnership, limited liability company or other form of entity a majority of any
class of voting stock or other voting rights of which is owned, directly or
indirectly, by Holdings.
"Substantial Part of its Assets" means (i) all or substantially all of the
assets of the Company comprising its Texas City, Texas facility or (ii) all or
substantially all of the assets of the Company comprising its pulp chemicals
business.
"Termination Date" means, with respect to any Participant, the termination
date specified in the Termination Notice delivered by such Participant to the
Company in accordance with Section 2.05 or the actual date of termination of
such Participant's employment by the Company for any reason other than
Misconduct or Disability.
"Termination Notice" means, with respect to any Participant, a notice from
such Participant to Holdings purporting to terminate such Participant's
employment for Good Reason in accordance with Section 2.05.
"Years of Service" means, with respect to any Participant, the number of
years of service as of such Participant's Termination Date which is recognized
by the Company for such Participant for vesting purposes under the Pension Plan
in which such Participant participates as of such Participant's Termination
Date; provided, however, that any fractional Year of Service shall be rounded up
to the next full Year of Service.
Section 1.02. Interpretation. In this Plan, unless a clear contrary
intention appears, (a) the words "herein," "hereof" and "hereunder" and other
words of similar import refer to this Plan as a whole and not to any particular
Article, Section or other subdivision, (b) reference to any Article or Section,
means such Article or Section hereof and (c) the words "including" (and with
correlative meaning "include") means including, without limiting the generality
of any description preceding such term. The Article and Section headings herein
are for convenience only and shall not affect the construction hereof.
ARTICLE II
Eligibility and Benefits
Section 2.01. Eligible Employees. This Plan is only for the benefit of
Participants, and no other employees or personnel shall be eligible to
participate in this Plan or to receive any rights or benefits hereunder.
Section 2.02. Description of Benefits. (a) Each Participant shall be
entitled to receive the benefits described below if (i) a Change of Control
occurs after April 1, 2001 and (ii) during the period commencing 180 days prior
to the date on which such Change of Control occurs and ending 180 days after the
date on which such Change of Control occurs, either such Participant terminates
or has terminated his or her employment for Good Reason in accordance
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with Section 2.05 or the Company terminates or has terminated such Participant's
employment for any reason other than a termination for Misconduct or Disability:
(i) subject to any reduction pursuant to Section 2.03(b), the Company
shall pay to such Participant, within 30 days after such Participant's
Termination Date or, in the event that such Participant's Termination Date
occurred within the 180-day period immediately preceding the occurrence of
a Change of Control, within 30 days after such Change of Control, a lump
sum cash payment equal to such Participant's Base Salary times such
Participant's Applicable Multiplier (the "Severance Amount"); and
(ii) for a period of six months following such Participant's
Termination Date, the COBRA premium required to be paid by such Participant
for coverage under the Company's medical and dental insurance plans shall
not exceed the regular premiums required to be paid by active employees for
similar coverage under such plans; provided, however, that the benefits
provided under this clause (ii) shall only be available to such Participant
if such Participant (or his or her qualified beneficiaries) makes a timely
COBRA election on or after such Participant's Termination Date to continue
coverage under such medical and dental insurance plans and pays the regular
employee premium required by such plans and, provided further, that during
such six-month period, the Company shall not amend any such medical or
dental insurance plan to decrease or restrict eligibility for the benefits
available thereunder or terminate any such medical or dental insurance plan
without establishing a successor plan providing benefits that are at least
equal to the benefits provided under the terminated plan.
For purposes of this Plan, "Base Salary" means, with respect to any Participant,
such Participant's annual base salary immediately prior to the earlier of (A)
the date on which an event occurs that results in such Participant terminating
his or her employment for Good Reason and (B) the actual date of such
Participant's termination by the Company for any reason other than Misconduct or
Disability, and "Applicable Multiplier" means, with respect to any Participant,
the greater of (x) 0.5 and (y) such Participant's Years of Service as of the
earlier of (1) the date on which an event occurs that results in such
Participant terminating his or her employment for Good Reason and (2) the actual
date of such Participant's termination by the Company for any reason other than
Misconduct or Disability times a fraction having a numerator of two and a
denominator of 52; provided, however, that no Participant's Applicable
Multiplier shall exceed 1.0.
(b) No Participant shall be entitled to receive any of the benefits
described in this Section 2.02 on account of any Change of Control unless such
Change of Control occurred (i) while such Participant was employed by the
Company or (ii) within 180 days after such Participant's Termination Date unless
the Company terminates such Participant's employment prior to such Change of
Control and such termination was directly or indirectly related to, connected
with, in anticipation of, in furtherance of, pursuant to the terms of or during
the pendency of such Change of Control or is for the purpose of directly or
indirectly encouraging or facilitating such Change of Control.
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(c) Notwithstanding anything to the contrary contained in this Plan, the
benefits made available under this Plan to Participants expressly exclude
outplacement services and financial counseling.
(d) Participation in this Plan is voluntary. The Company may require that
each eligible employee execute a participation agreement as a condition to
becoming a Participant hereunder. By agreeing to participate in this Plan, or by
accepting any benefits under this Plan, a Participant unconditionally agrees for
all purposes under this Plan to be bound by all of the terms and conditions of
this Plan, including the provisions of Article III hereof.
Section 2.03. Additional Provisions Relating to Benefits under Sections
2.02. (a) Notwithstanding anything to the contrary contained in this Plan, the
Company's obligation to continue the benefits described in Section 2.02(a)(ii)
for any Participant shall cease if and when such Participant ceases to be
eligible to continue group health plan coverage under COBRA.
(b) Notwithstanding anything to the contrary contained in this Plan, the
amount of the Severance Amount payable to any Participant under this Plan shall
be reduced, dollar for dollar, by the aggregate amount of all separation,
severance or termination payments paid or payable to such Participant under (i)
any Benefit Plan (other than this Plan and the Pension Plans), including the
Company's Amended and Restated Key Employee Protection Plan, (ii) any agreement
between such Participant and the Company or (iii) any applicable law, statute,
rule, regulation, order or decree (or other pronouncement having the effect of
law) of any nation or governmental authority, including the Worker Adjustment
and Retraining Notification Act.
Section 2.04. Cost of Plan; Plan Unfunded; Participant's Rights Unsecured.
The entire cost of this Plan shall be borne by the Company, and no contributions
shall be required of the Participants. The Company shall not be required to
establish any special or separate fund or make any other segregation of funds or
assets to assure the payment of any benefit hereunder. The right of any
Participant to receive the benefits provided for herein shall be an unsecured
claim against the general assets of the Company.
Section 2.05. Termination Notices from Participants. For purposes of this
Plan, in order for any Participant to terminate his or her employment for Good
Reason, such Participant must give a written notice of termination to Holdings
or Chemicals, which notice shall be in writing and signed by such Participant,
shall be dated the date it is given to Holdings or Chemicals, shall specify the
termination date, shall state that the termination is for a Good Reason and
shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for such Good Reason.
ARTICLE III
Claims Procedure and Dispute Resolution
Section 3.01. Claims for Benefits. Any claim relating to benefits under
this Plan shall be submitted in writing to the Compensation Committee in such
manner as it may direct. If
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the Compensation Committee determines that any claimant is not entitled to
receive all or part of the benefits claimed, it will mail or deliver written
notice to such claimant of (a) its determination and the reasons therefor, with
appropriate references to pertinent Plan provisions, and (b) the procedure for
review of its determination. Such notice shall, if appropriate, also explain how
a claimant may perfect the claim and why submission of additional information is
necessary to do so. Such notice shall be provided within 90 days after
submission of the claim. If the claimant does not receive notice of a decision
within such 90-day period, the claimant's claim shall be deemed denied.
Section 3.02. Administrative Appeal. An applicant for benefits whose claim
has been denied in whole or in part, or the duly authorized representative of
such claimant, may, within 60 days after receipt of written notice of such
denial (or after the claim is deemed denied), request a review thereof and
submit to the Compensation Committee in writing such additional information as
the claimant desires. A claimant who submits a claim for review shall have a
reasonable opportunity to submit issues and comments in writing and to review
pertinent documents. The Compensation Committee will then render its final
decision with the specific reasons therefore (including references to pertinent
Plan provisions) and notify the claimant in writing of such decision within 60
days after the submission of such request for review. If the claimant does not
receive notice of such decision within such 60-day period, the claim for review
shall be deemed denied.
Section 3.03. Negotiation. Subject to Section 3.05, in case a dispute or
controversy shall arise between any Participant (or any person claiming by,
through or under any Participant) and the Company (including the Compensation
Committee) relating to or arising out of this Plan or a benefit claim for which
a final administrative appeal has been denied (or deemed denied) pursuant to
Section 3.02, either disputant may give written notice to the other disputant
("Dispute Notice") that it wishes to resolve such dispute or controversy by
negotiations, in which event the disputants shall attempt in good faith to
negotiate a resolution of such dispute or controversy. If the dispute or
controversy is not so resolved within 30 days after the effective date of the
Dispute Notice, subject to Section 3.05, either disputant may initiate
arbitration of the matter as provided in Section 3.04. All negotiations pursuant
to this Section 3.03 shall be held at the Company's principal offices in
Houston, Texas (or such other place as the disputants shall mutually agree) and
shall be treated as compromise and settlement negotiations for the purposes of
the federal and state rules of evidence and procedure.
Section 3.04. Arbitration. Subject to Section 3.05, any dispute or
controversy (a) which arises out of or relates to this Plan or a benefit claim
for which a final administrative appeal has been denied (or deemed denied)
pursuant to Section 3.02 and (b) which has not been resolved by negotiations in
accordance with Section 3.03 within 30 days of the effective date of the Dispute
Notice shall, upon the request of either disputant, be finally settled by
arbitration conducted expeditiously in accordance with the labor arbitration
rules of the American Arbitration Association. The arbitrator shall be not
empowered to award damages in excess of compensatory damages and each disputant
shall be deemed to have irrevocably waived any damages in excess of compensatory
damages. The arbitrator's decision shall be final and legally binding on the
disputants and their successors and assigns. The fees and expenses of the
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arbitrator shall be borne solely by the prevailing disputant or, in the event
there is no clear prevailing disputant, as the arbitrator deems appropriate. All
arbitration conferences and hearings shall be held in Houston, Texas.
Section 3.05. Exclusivity, etc. The dispute resolution procedures set forth
in Sections 3.03 and 3.04 shall not apply to any matter which, by the express
provisions of this Plan, is to be finally determined by the Compensation
Committee or by an accounting firm or employee benefits firm unless and until
the Compensation Committee, accounting firm or employee benefits firm issues its
decision (in the case of the Compensation Committee, in accordance with Sections
3.01 and 3.02). Any such determination by the Compensation Committee or an
accounting firm or employee benefits firm shall be final and may not be
overturned unless such determination is found to be arbitrary and capricious or
an abuse of discretion. No legal action may be brought with respect to this Plan
except for the purpose of specifically enforcing the provisions of this Article
III or for the purpose of enforcing any arbitration award made pursuant to
Section 3.04.
ARTICLE IV
Miscellaneous Provisions
Section 4.01. Cumulative Benefits. Except as provided in Section 2.03(b),
the rights and benefits provided to any Participant under this Plan are
cumulative of, and are in addition to, all of the other rights and benefits
provided to such Participant under any Benefit Plan or any agreement between
such Participant and the Company.
Section 4.02. No Mitigation or Offset. No Participant shall be required to
mitigate the amount of any payment provided for in this Plan by seeking or
accepting other employment following a termination of his or her employment with
the Company or otherwise. Except as otherwise provided in Section 2.03(a), the
amount of any payment provided for in this Plan shall not be reduced by any
compensation or benefit earned by a Participant as the result of employment by
another employer or by retirement benefits.
Section 4.03. Amendment and Termination. (a) The Holdings Board and the
Chemicals Board shall be entitled to amend or terminate this Plan at any time
and for any reason; provided, however, that no amendment or termination of this
Plan shall affect the rights or benefits of any Participant or the obligations
of the Company accrued under this Plan as of the effective date of such
termination or amendment or any of the rights or benefits of such Participant or
the obligations of the Company accruing under this Plan after the effective date
of such termination or amendment on account of any Change of Control that
occurred prior to such effective date.
(b) Notwithstanding the foregoing, no termination of this Plan, and no
amendment to this Plan that decreases or restricts benefits or eligibility
hereunder, shall be effective with respect to, binding upon or reduce any
benefits payable hereunder to, any person who at the time is a Participant if
such termination or amendment is (i) directly or indirectly related to,
connected
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with, in anticipation of, in furtherance of, pursuant to the terms of or during
the pendency of any Change of Control or is for the purpose of directly or
indirectly encouraging or facilitating a Change of Control, or (ii) made during
the period commencing 180 days prior the date on which any Change of Control
occurs and ending 180 days after the date on which such Change of Control
occurs.
Section 4.04. Administration. (a) The Compensation Committee is, as
respects the rights and obligations of all parties with an interest in this
Plan, given the powers, rights and duties specifically stated elsewhere in this
Plan and, in addition, is given full power and final discretionary authority to:
(i) make determinations with respect to the administration of this
Plan, construe and interpret its provisions, take all other actions deemed
necessary or advisable for the proper administration of this Plan and
determine all questions arising under this Plan, including the power to
determine the rights or eligibility of Participants and any other persons,
and the amounts of their benefits under this Plan, and to remedy
ambiguities, inconsistencies or omissions;
(ii) adopt such rules of procedure and regulations as in its opinion
may be necessary for the proper and efficient administration of this Plan;
(iii) enforce this Plan in accordance with its terms and in accordance
with any rules of procedure and regulations adopted by the Compensation
Committee pursuant to clause (ii) above; and
(iv) employ agents, attorneys, accountants or other persons (who also
may be employed by the Company), and allocate, delegate or reallocate to
them such powers, rights and duties as the Compensation Committee may
consider necessary or advisable to properly carry out the administration of
this Plan; provided, however, that such allocation or delegation and the
acceptance thereof by such agents, attorneys, accountants or other persons
are in writing.
(b) Subject to applicable law, any determination, construction or
interpretation of the provisions of this Plan, and any decision on any matter
within the discretion of the Compensation Committee, that is made by the
Compensation Committee in good faith shall be binding on all persons. In case of
any claim that the Compensation Committee (or any member thereof) did not act in
good faith, the burden of proof shall rest with the person or entity claiming
the absence of good faith.
(c) The members of the Compensation Committee shall receive no additional
compensation for their services relating to this Plan. Any expenses properly
incurred by the Compensation Committee incident to this Plan, including the cost
of any bond required by applicable law, shall be paid by the Company.
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(d) The Company shall indemnify and hold harmless each member of the
Compensation Committee against and all expenses and liabilities arising out of
his or her administrative functions or fiduciary responsibilities, including any
expenses and liabilities that are caused by or result from an act or omission
constituting the negligence of such member in the performance of such functions
or responsibilities, but excluding expenses and liabilities that are caused by
or result from such member's own gross negligence or willful misconduct.
Expenses against which such member shall be indemnified hereunder shall include,
without limitation, the amounts of any settlement or judgment, costs, counsel
fees and related charges reasonably incurred in connection with a claim asserted
or a proceeding brought or settlement thereof.
Section 4.05. Release of Claims. As a condition to receipt of the benefits
under this Plan, a Participant will be required to sign an agreement, to be
prepared by Holdings, in which he or she unconditionally and irrevocably
releases the Company and its successors, assigns, divisions, subsidiaries,
representatives, agents, officers, directors, stockholders and employees from
any claims, demands and causes of action relating to or arising out of the
termination of his or her employment with the Company, including any statutory
claims under the Age Discrimination in Employment Act of 1967, the Americans
with Disabilities Act of 1990, the Civil Rights Acts of 1964 and 1991 and the
Texas Commission on Human Rights Act, but excluding, however, any claims,
demands and causes of action pertaining to (a) any benefits that are to be
provided after the date of such agreement pursuant to the terms of this Plan,
(b) such Participant's rights, if any, under the Company's Amended and Restated
Key Employee Protection Plan (as the same may hereafter be amended or modified
in accordance with its terms) or (c) such Participant's rights, if any, under
any employment agreement between such Participant and the Company.
Section 4.06. Assignability. The Company shall have the right to assign
this Plan and to delegate its duties and obligations hereunder, but not
otherwise; provided, however, that no such assignment shall relieve or discharge
the Company of or from any of its obligations under this Plan. Unless otherwise
approved by the Compensation Committee, no Participant shall transfer or assign
any of his or her rights under this Plan except by will or the laws of descent
and distribution. Except as otherwise provided by law, no benefit, right or
interest of any Participant under this Plan shall be subject to pledge,
encumbrance or charge, seizure, attachment or legal, equitable or other process,
or be liable for, or subject to, debts, liabilities or other obligations.
Section 4.07. Consolidations, Mergers, Etc. Each of Holdings and Chemicals
will require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of its business,
operations or assets to expressly assume and agree to perform this Plan in
writing, in the same manner and to the same extent that Holdings or Chemicals,
as the case may be, would be required to perform hereunder if no such succession
had taken place.
Section 4.08. Benefit and Burden. This Plan shall be binding upon and inure
to the benefit of the Company and its successors and assigns. This Plan and all
rights of each Participant shall inure to the benefit of and be enforceable by
such Participant and his or her
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personal or legal representatives, executors, administrators, heirs and
permitted assigns. If any Participant should die while any amounts are due and
payable to such Participant hereunder, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this Plan to such
Participant's devisees, legatees or other designees or, if there be no such
devisees, legatees or other designees, to such Participant's estate.
Section 4.09. Notices. All notices and other communications provided for in
this Plan shall be in writing and shall be sent, delivered or mailed, addressed
(a) if to Holdings, Chemicals or any other Subsidiary, at Holdings' principal
office address or such other address as Holdings may have designated by written
notice to all Participants for purposes hereof, directed to the attention of the
Treasurer, and (b) if to any Participant, at his or her residence address on the
records of Holdings or to such other address as he or she may have designated to
Holdings in writing for purposes hereof. Each such notice or other communication
shall be deemed to have been duly given or mailed by United States registered
mail, return receipt requested, postage prepaid, except that any change of
notice address shall be effective only upon receipt.
Section 4.10. Withholdings. The Company shall have the right to deduct from
any payment hereunder all taxes (federal, state or other) and other payments
which it is required to withhold therefrom.
Section 4.11. No Employment Rights Conferred. Nothing contained in this
Plan shall (i) confer upon any Participant any right with respect to
continuation of employment with the Company or (ii) subject to the rights and
benefits of any Participant hereunder, interfere in any way with the right of
the Company to terminate such Participant's employment at any time.
Section 4.12. Governing Law. This Plan shall be governed in accordance with
the laws of the State of Texas (without giving effect to conflicts of laws
principles thereof) and applicable federal law.
IN WITNESS WHEREOF, and as conclusive evidence of the adoption of this Plan
by the Holdings Board and the Chemicals Board, Holdings and Chemicals have each
caused this Plan to be duly executed in its name and behalf by its proper
officer thereunto duly authorized as of March 8, 2001.
STERLING CHEMICALS HOLDINGS, INC.
By:
---------------------------------------
Xxxxx X. Xxxxxx, Chairman of the Board
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STERLING CHEMICALS, INC.
By:
---------------------------------------
Xxxxx X. Xxxxxx, Chairman of the Board
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unpaid Imposition, lien, encumbrance or charge at the time being contested in
accordance with this Section 1.8) shall not be interfered with or otherwise
affected, (g) in the case of any Insurance Requirement, the failure of the
Mortgagor to comply therewith shall not affect the validity of any insurance
required to be maintained by the Mortgagor under Section 2.1, and (h) that
adequate reserves, determined in accordance with GAAP, shall have been set aside
on the Mortgagor's books.
SECTION 1.9. Leases. The Mortgagor represents and warrants to the
Mortgagee that, as of the date hereof, there are no written or oral leases or
other agreements of any kind or nature relating to the occupancy of any portion
of the Property by any Person other than the Mortgagor other than the Permitted
Encumbrances. Except as is permitted by the Credit Agreement, the Mortgagor will
not enter into any such written or oral lease or other agreement with respect to
any portion of the Property without first obtaining the written consent of the
Mortgagee.
SECTION 1.10. Compliance with Instruments. The Mortgagor at its expense
will promptly comply in all material respects with all rights of way or use,
privileges, franchises, servitudes, licenses, easements, tenements,
hereditaments and appurtenances forming a part of the Property and all
instruments creating or evidencing the same, in each case, to the extent
compliance therewith is required of the Mortgagor under the terms thereof.
Except as is permitted by the Credit Agreement, the Mortgagor will not take any
action which may result in a forfeiture or termination of the rights afforded to
the Mortgagor under any such instruments and will not, without the prior written
consent of the Mortgagee, amend any of such instruments in any manner adverse to
the Current Assets Lenders in any material respect.
SECTION 1.11. Maintenance and Repair, etc. Subject to the provisions of
Section 1.12, the Mortgagor will keep or cause to be kept all presently and
subsequently erected or acquired Improvements and the sidewalks, curbs, vaults
and vault space, if any, located on or adjoining the same, and the streets and
the ways adjoining the same, in good and substantial order and repair and in
such a fashion that neither the value nor utility of the Collateral will be
diminished, and, at its sole cost and expense, will promptly make or cause to be
made all necessary and appropriate repairs, replacements and renewals thereof,
whether interior or exterior, structural or nonstructural, ordinary or
extraordinary, foreseen or unforeseen, so that its business carried on in
connection therewith may be properly conducted at all times. The Mortgagor at
its expense will do or cause to be done all shoring of foundations and walls of
any building or other Improvements on the Property and (to the extent permitted
by law) of the ground adjacent thereto, and every other act necessary or
appropriate for the preservation and safety of the Property by reason of or in
connection with any excavation or other building operation upon the Property and
upon any adjoining property, whether or not the Mortgagor shall, by any Legal
Requirement, be required to take such action or be liable for failure to do so.
SECTION 1.12. Alterations, Additions, etc. So long as no Event of
Default shall have occurred and be continuing, the Mortgagor shall have the
right at any time and from time to time to make or cause to be made reasonable
alterations of and additions to the Property or any part thereof, provided that
any alteration or addition: (a) shall not change the general character or the
use of the Property or reduce the fair market value thereof below its value
immediately before such alteration or addition, or impair the usefulness of the
Property; (b) is effected with due diligence, in a good and workmanlike manner
and in compliance in all material respects with all
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Legal Requirements and Insurance Requirements; (c) subject to Section 1.8 is
promptly and fully paid for, or caused to be paid for, by the Mortgagor; and (d)
is made, in case the estimated cost of such alteration or addition exceeds U.S.
$1,000,000, under the supervision of a qualified architect or engineer or
another professional.
SECTION 1.13. Acquired Property Subject to Lien. Subject to the
Permitted Encumbrances, all property at any time acquired by the Mortgagor and
provided or required by this Mortgage to be or become subject to the lien and
security interest hereof, whether such property is acquired by exchange,
purchase, construction or otherwise, shall forthwith become subject to the lien
and security interest of this Mortgage without further action on the part of the
Mortgagor or the Mortgagee. The Mortgagor, at its expense, will execute and
deliver to the Mortgagee (and will record and file as provided in Section 1.4)
an instrument supplemental to this Mortgage reasonably satisfactory in substance
and form to the Mortgagee, whenever such an instrument is necessary under
applicable law to subject to the lien and security interest of this Mortgage all
right, title and interest of the Mortgagor in and to all property provided or
required by this Mortgage to be subject to the lien and security interest
hereof.
SECTION 1.14. Assignment of Rents, Proceeds, etc. The assignment, grant
and conveyance of the Leases, Rents, Proceeds and other rents, income, proceeds
and benefits of the Collateral contained in the Granting Clause of this Mortgage
shall constitute an absolute, present and irrevocable assignment, grant and
conveyance, provided, however, that permission is hereby given to the Mortgagor,
so long as no Event of Default has occurred and be continuing hereunder, to
collect, receive and apply such Rents, Proceeds and other rents, income,
proceeds and benefits as they become due and payable, but not further in advance
thereof than is customary, and in accordance with all of the other terms,
conditions and provisions hereof, of the Loan Documents, and of the Leases,
contracts, agreements and other instruments with respect to which such payments
are made or such other benefits are conferred; provided, further, however, that,
to the extent required by the Credit Agreement all such Leases, Rents, Proceeds
and other rents, income, proceeds and benefits shall be deposited directly into
the Lockbox Accounts. Upon the occurrence and continuance of an Event of
Default, such permission shall terminate immediately and automatically, without
notice to the Mortgagor or any other Person except as required by law, and shall
not be reinstated upon a cure of such Event of Default without the express
written consent of the Mortgagee. Such assignment shall be fully effective
without any further action on the part of the Mortgagor or the Mortgagee and the
Mortgagee shall be entitled, at its option without further order of or
application to the Bankruptcy Court, upon the occurrence and continuance of an
Event of Default hereunder, to collect, receive and apply all Rents, Proceeds
and all other rents, income, proceeds and benefits from the Collateral,
including all right, title and interest of the Mortgagor in any escrowed sums or
deposits or any portion thereof or interest therein, whether or not the
Mortgagee takes possession of the Collateral or any part thereof. The Mortgagor
further grants to the Mortgagee the right, at the Mortgagee's option without
further order of or application to the Bankruptcy Court, upon the occurrence and
continuance of an Event of Default hereunder, to:
(a) enter upon and take possession of the Property for the
purpose of collecting Rents, Proceeds and said rents, income, proceeds
and other benefits;
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(b) dispossess by the customary summary proceedings any
tenant, purchaser or other Person defaulting in the payment of any
amount when and as due and payable, or in the performance of any other
obligation, under any Lease, contract or other instrument to which said
Rents, Proceeds or other rents, income, proceeds or benefits relate;
(c) let or convey the Collateral or any portion thereof or any
interest therein; and
(d) apply Rents, Proceeds and such rents, income, proceeds and
other benefits, after the payment of all necessary fees, charges and
expenses, on account of the Secured Obligations in accordance with
Section 3.11.
SECTION 1.15. No Claims Against the Mortgagee. Nothing contained in
this Mortgage shall constitute any consent or request by the Mortgagee, express
or implied, for the performance of any labor or the furnishing of any materials
or other property in respect of the Property or any part thereof, or be
construed to permit the making of any claim against the Mortgagee in respect of
labor or services or the furnishing of any materials or other property or any
claim that any lien based on the performance of such labor or the furnishing of
any such materials or other property is prior to the lien and security interest
of this Mortgage. ALL CONTRACTORS, SUBCONTRACTORS, VENDORS AND OTHER PERSONS
DEALING WITH THE PROPERTY, OR WITH ANY PERSONS INTERESTED THEREIN, ARE HEREBY
REQUIRED TO TAKE NOTICE OF THE PROVISIONS OF THIS SECTION.
SECTION 1.16. Indemnification. The Mortgagor will protect, indemnify,
save harmless and defend the Mortgagee, the Current Assets Lenders, and each of
their respective officers, directors, shareholders, employees, representatives
and agents (collectively, the "Indemnified Parties" and individually, an
"Indemnified Party"), from and against any and all liabilities, obligations,
claims, damages, penalties, causes of action, costs and expenses (including,
without limitation, reasonable attorneys' fees and expenses) imposed upon or
incurred by or asserted against any Indemnified Party by reason of (a) ownership
of an interest in this Mortgage, any other Loan Document or the Property, (b)
any accident, injury to or death of persons or loss of or damage to or loss of
the use of property occurring on or about the Property or any part thereof or
the adjoining sidewalks, curbs, vaults and vault spaces, if any, streets, alleys
or ways, (c) any use, non-use or condition of the Property or any part thereof
or the adjoining sidewalks, curbs, vaults and vault spaces, if any, streets,
alleys or ways, (d) any failure on the part of the Mortgagor to perform or
comply with any of the terms of this Mortgage or any Loan Document, (e)
performance of any labor or services or the furnishing of any materials or other
property in respect of the Collateral or any part thereof made or suffered to be
made by or on behalf of the Mortgagor, (f) any negligence or tortious act on the
part of the Mortgagor or any of its agents, contractors, lessees, licensees or
invitees, (g) any work in connection with any alterations, changes, new
construction or demolition of or additions to the Property, or (h) (i) any
Hazardous Material on, in, under or affecting all or any portion of the
Property, the groundwater, or any surrounding areas, (ii) any misrepresentation,
inaccuracy or breach of any warranty, covenant or agreement contained or
referred to in Sections 1.21 and 1.22, (iii) any violation or claim of violation
by the Mortgagor of any Environmental Laws, or (iv) the imposition of any lien
for damages caused by or the recovery of any costs for the cleanup, release or
threatened release of
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71
any Hazardous Material, except to the extent that any of the matters described
in subsections (a)-(h) arise out of the gross negligence or willful misconduct
of any Indemnified Party. If any action or proceeding be commenced, to which
action or proceeding any Indemnified Party is made a party by reason of the
execution of this Mortgage or any other Loan Document, or in which it becomes
necessary to defend or uphold the lien of this Mortgage, all sums paid by the
Indemnified Parties, for the expense of any litigation to prosecute or defend
the rights and lien created hereby or otherwise, shall be paid by the Mortgagor
to such Indemnified Parties, as the case may be, as hereinafter provided. The
Mortgagor will pay and save the Indemnified Parties harmless against any and all
liability with respect to any intangible personal property tax or similar
imposition of the State or any subdivision or authority thereof now or hereafter
in effect, to the extent that the same may be payable by the Indemnified Parties
in respect of this Mortgage, any Loan Document or any Secured Obligation. All
amounts payable to the Indemnified Parties under this Section 1.16 shall be
deemed indebtedness secured by this Mortgage and any such amounts which are not
paid within ten (10) days after written demand therefor by any Indemnified Party
shall bear interest at the rate provided for in Section 3.2.2 of the Credit
Agreement from the date of such demand. In case any action, suit or proceeding
is brought against any Indemnified Party by reason of any such occurrence, the
Mortgagor, upon request of such Indemnified Party, will, at the Mortgagor's
expense, resist and defend such action, suit or proceeding or cause the same to
be resisted or defended by counsel designated by the Mortgagor and approved by
such Indemnified Party. The obligations of the Mortgagor under this Section 1.16
shall survive any discharge or reconveyance of this Mortgage and payment in full
of the Secured Obligations.
SECTION 1.17. No Credit for Payment of Taxes. The Mortgagor shall not
be entitled to any credit against the Secured Obligations by reason of the
payment of any tax on the Property or any part thereof or by reason of the
payment of any other Imposition, and shall not apply for or claim any deduction
from the taxable value of the Property or any part thereof by reason of this
Mortgage.
SECTION 1.18. Intentionally Omitted
SECTION 1.19. No Transfer of the Property. Except as is provided in the
Credit Agreement, and except for the Permitted Encumbrances, the Mortgagor shall
not, without the prior written consent of the Mortgagee, which consent may be
granted or withheld in the sole and absolute discretion of the Mortgagee (i)
sell, convey, assign or otherwise transfer the Property or any portion of the
Mortgagor's interest therein or (ii) further encumber the Property or permit the
Property to become encumbered by any lien, claim, security interest or other
indebtedness of any kind or nature other than the Permitted Encumbrances.
SECTION 1.20. Security Agreement. With respect to the items of personal
property and fixtures referred to and described in the Granting Clause of this
Mortgage and included as part of the Collateral, this Mortgage is hereby made
and declared to be a security agreement encumbering each and every item of
personal property and fixtures now or hereafter owned by Mortgagor and included
herein as a part of the Collateral, in compliance with the provisions of the
Uniform Commercial Code as enacted in the State. In this respect, Mortgagor, as
"Debtor", expressly grants to Mortgagee, as "Secured Party", a security interest
in and to all of the property now or hereafter owned by Mortgagor which
constitutes the personal property and fixtures
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hereinabove referred to and described in this Mortgage, including all
extensions, accessions, additions, improvements, betterments, renewals,
replacements and substitutions thereof or thereto, and all proceeds from the
sale or other disposition thereof. Mortgagor agrees that Mortgagee may file this
Mortgage, or a reproduction thereof, in the real estate records or other
appropriate index, as, and this Mortgage shall be deemed to be, a financing
statement filed as a fixture filing in accordance with the laws of the State.
Any reproduction of this Mortgage or of any other security agreement or
financing statement executed by Mortgagor shall be sufficient as a financing
statement. In addition, Mortgagor agrees to execute and deliver to Mortgagee,
upon Mortgagee's request, any other security agreement and financing statements,
as well as extensions, renewals, and amendments thereof, and reproductions of
this Mortgage, in such form as Mortgagee may reasonably require to perfect a
security interest with respect to said items. Mortgagor shall pay all costs of
filing such financing statements and any extensions, renewals, amendments and
releases thereof, and shall pay all reasonable costs and expenses of any record
searches for financing statements Mortgagee may reasonably require. Except as is
provided in the Credit Agreement, and except for the Permitted Encumbrances,
without the prior written consent of Mortgagee, Mortgagor shall not create or
suffer to be created pursuant to the Uniform Commercial Code any other security
interest in the above-described personal property and fixtures, including any
replacements and additions thereto. Upon the occurrence and continuance of an
Event of Default under this Mortgage, the Mortgagee shall have and shall be
entitled to exercise any and all of the rights and remedies (i) as prescribed in
this Mortgage, or (ii) as prescribed by general law, or (iii) as prescribed by
the specific statutory provisions now or hereafter enacted and specified in said
Uniform Commercial Code, all at Mortgagee's sole election. Mortgagor and
Mortgagee agree that the filing of any financing statements in the records
normally having to do with personal property shall not in any way affect the
agreement of Mortgagor and Mortgagee that everything located in, on or about, or
used or intended to be used with or in connection with the use, operation or
enjoyment of, the Collateral, which is described or reflected as a fixture in
this Mortgage, is, and at all times and for all purposes and in all proceedings,
both legal and equitable, shall be, regarded as part of the Real Estate conveyed
hereby. Mortgagor warrants that Mortgagor's name, identity and address are as
set forth herein. The mailing address of the Mortgagee from which information
may be obtained concerning the security interest created herein is also set
forth herein. This information hereof is provided in order that this Mortgage
shall comply with the requirements of the Uniform Commercial Code as enacted in
the State for instruments to be filed as financing statements. In accordance
with the laws of the State, this Mortgage shall remain effective as a fixture
filing until this Mortgage is released or satisfied of record or its
effectiveness otherwise terminates as to the Collateral.
SECTION 1.21. Representations and Warranties. In order to induce the
Mortgagee to enter into this Mortgage, the Credit Agreement and the other Loan
Documents, the Mortgagor agrees that all of the representations and warranties
set forth in the Credit Agreement are incorporated into this Mortgage by
reference as if fully set forth herein.
SECTION 1.22. Mortgagor's Covenants. In order to induce the Mortgagee
to enter into this Mortgage, the Credit Agreement and the other Loan Documents,
the Mortgagor agrees that all of the covenants of Mortgagor set forth in the
Credit Agreement are incorporated into this Mortgage by reference as if fully
set forth herein.
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SECTION 1.23. Attornment. Mortgagee hereby acknowledges and agrees that
the liens granted herein are subject to the rights of certain lessees under the
Leases as disclosed in the Credit Agreement and will be subject to the rights of
lessees under any Leases entered into by Mortgagor after the date hereof which
are permitted as Permitted Real Estate Liens pursuant to the Credit Agreement,
subject to the express rights contained in the applicable Lease. The rights of
the tenants under the Leases to the leased premises shall not be adversely
affected by the exercise by Mortgagee of any of its rights hereunder, nor shall
any such tenant be in any way deprived of its rights under the applicable Lease
except in accordance with the terms of such Lease. In the event that Mortgagee
succeeds to the interest of Mortgagor under a Lease, such Lease shall not be
terminated or affected thereby except as set forth therein, and any sale of the
applicable leased premises by Mortgagee or pursuant to the judgment of any court
in an action to enforce the remedies provided for in this Mortgage shall be made
subject to such Lease and the rights of such tenant expressly set forth
thereunder. If Mortgagee succeeds to the interests of Mortgagor in and to the
applicable leased premises or under such Lease or enters into possession of such
leased premises, the Mortgagee, and such tenants, shall be bound to each other
under all of the express terms, covenants and conditions of such Lease, as if
the Mortgagee was originally the Mortgagor as lessor thereunder.
ARTICLE II
INSURANCE; DAMAGE DESTRUCTION OR TAKING. ETC.
SECTION 2.1. Insurance.
SECTION 2.1.1. Risks to be Insured. The Mortgagor will, at its expense,
maintain or cause to be maintained with insurance carriers approved by the
Mortgagee (a) insurance with respect to the Improvements against loss or damage
by fire, lightning and such other risks as are included in standard "all-risk"
policies, in amounts sufficient to prevent the Mortgagor and the Mortgagee from
becoming a co-insurer of any partial loss under the applicable policies, but in
any event in amounts not less than the then full insurable value (actual
replacement value) of the Improvements, as determined by the Mortgagor in
accordance with generally accepted insurance practice and approved by the
Mortgagee or, at the request of the Mortgagee, as determined at the Mortgagor's
expense by the insurer or insurers or by an expert approved by the Mortgagee,
(b) comprehensive public liability, including bodily injury and product
liability and property damage, insurance, with personal injury endorsements,
applicable to the Property in such amounts as are customarily carried by Persons
operating similar properties in the same general locality, but in any event with
a combined single limit of not less than Twenty Million Dollars ($20,000,000)
per occurrence, (c) explosion insurance in respect of any steam and pressure
boilers and similar apparatus located in the Property in such amounts as are
usually carried by persons operating similar properties in the same general
locality, but in any event in an amount not less than Twenty Million Dollars
($20,000,000), (d) business interruption insurance (including added expense
coverage) against all insurable perils for a period of not fewer than twelve
(12) months (subject to a reasonable aggregate deductible not exceeding ten (10)
days per any occurrence or if an aggregate deductible not exceeding ten (10)
days per occurrence is not then available, the lowest aggregate deductible then
available), (e) worker's compensation insurance to the full extent required by
applicable law for all employees of the Mortgagor engaged in any work on or
about the Property and employer's liability insurance with a limit of
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not less than Ten Million Dollars ($10,000,000) for each occurrence, (f)
all-risk, builders' risk insurance with respect to the Property during any
period during which there is any construction work being performed, against loss
or damage by fire or other risks, including vandalism, malicious mischief and
sprinkler leakage, as are included in so-called "extended coverage" clauses at
the time available and (g) such other insurance with respect to the Property in
such amounts and against such insurable hazards as the Mortgagee from time to
time may reasonably require by written notice to the Mortgagor.
SECTION 2.1.2. Policy Provisions. All insurance maintained by the
Mortgagor pursuant to Section 2.1.1 shall (a) (except for worker's compensation
insurance) list the Mortgagor and the Mortgagee, as additional insureds as their
respective interests may appear, (b) (except for worker's compensation and
public liability insurance) provide that the proceeds for any losses shall be
adjusted by the Mortgagor subject to the approval of the Mortgagee in the event
the proceeds shall exceed $1,000,000, and shall be payable to the Mortgagee, to
be held and applied as provided in Section 2.3, (c) include effective waivers by
the insurer of all rights of subrogation against any named insured, the
indebtedness secured by this Mortgage and the Property and all claims for
insurance premiums against the Mortgagee, (d) provide that any losses shall be
payable notwithstanding (i) any act, failure to act or negligence of or
violation of warranties, declarations or conditions contained in such policy by
any named insured, (ii) the occupation or use of the Property for purposes more
hazardous than permitted by the terms thereof, (iii) any foreclosure or other
action or proceeding taken by the Mortgagee pursuant to any provision of this
Mortgage, or (iv) any change in title or ownership of the Property, (e) provide
that no cancellation, reduction in amount or material change in coverage thereof
or any portion thereof shall be effective until at least thirty (30) days after
receipt by the Mortgagee of written notice thereof, (f) provide that any notice
under such policies shall be simultaneously delivered to the Mortgagee, and (g)
be satisfactory in all other reasonable respects to the Mortgagee. Any insurance
maintained pursuant to this Section 2.1 may be evidenced by blanket insurance
policies covering the Property and other properties or assets of the Mortgagor,
provided that any such policy shall specify the portion, if less than all, of
the total coverage of such policy that is allocated to the Property and shall in
all other respects comply with the requirements of this Section 2.1.
SECTION 2.1.3. Delivery of Policies, etc. The Mortgagor will deliver to
the Mortgagee, promptly upon request, (a) certificates of all policies
evidencing all insurance required to be maintained under Section 2.1.1 (or, in
the case of blanket policies, certificates thereof by the insurers together with
a counterpart of each blanket policy), and (b) evidence as to the payment of all
premiums due thereon (with respect to public liability insurance policies, all
installments for the current year due thereon to such date), provided that the
Mortgagee shall not be deemed by reason of its custody of such certificates to
have knowledge of the contents thereof or of the applicable policies. The
Mortgagor will also deliver to the Mortgagee prior to the expiration of any
policy a binder or certificate of the insurer evidencing the replacement thereof
and when the new policy is issued a certificate of such new policy (or, in the
case of a replacement blanket policy, a certificate thereof of the insurer
together with a counterpart of the blanket policy). In the event the Mortgagor
shall fail to effect or maintain any insurance required to be effected or
maintained pursuant to the provisions of this Section 2.1, the Mortgagor will
indemnify the
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Mortgagee against damage, loss or liability resulting from all risks for which
such insurance should have been effected or maintained.
SECTION 2.1.4. Separate Insurance. The Mortgagor will not take out
separate insurance concurrent in form or contributing in the event of loss with
that required to be maintained pursuant to this Section 2.1.
SECTION 2.2. Damage, Destruction or Taking; Mortgagor to Give Notice;
Assignment of Awards. In case of:
(a) any material damage to or destruction of the Collateral or
any material part thereof, or
(b) any taking, whether for permanent or temporary use, of all
or any material part of the Collateral or any material interest therein
or material right accruing thereto, as the result of the exercise of
the right of condemnation or eminent domain, or a change of grade
affecting the Collateral or any portion thereof (a "Taking"), or the
commencement of any proceedings or negotiations which may result in a
Taking,
the Mortgagor will promptly give written notice thereof to the Mortgagee,
generally describing the nature and extent of such damage or destruction and the
Mortgagor's best estimate of the cost of restoring the Collateral, or the nature
of such proceedings or negotiations and the nature and extent of the Taking
which might result therefrom, as the case may be. The Mortgagee shall be
entitled to all insurance proceeds payable on account of such damage or
destruction and to all awards or payments allocable to the Collateral on account
of such Taking up to the amount of the Secured Obligations, and the Mortgagor
hereby irrevocably assigns, transfers and sets over to the Mortgagee all rights
of the Mortgagor to any such proceeds, awards or payments and irrevocably
authorizes and empowers the Mortgagee, at its option, in the name of the
Mortgagor or otherwise, to file and prosecute what would otherwise be the
Mortgagor's claim for any such proceeds, award or payment and to collect,
receipt for and retain the same for disposition in accordance with Section 2.3.
The Mortgagor will pay all reasonable costs and expenses incurred by the
Mortgagee in connection with any such damage, destruction or Taking and seeking
and obtaining any insurance proceeds, awards or payments in respect thereof.
SECTION 2.3. Application of Proceeds and Awards. Subject to any
applicable requirements of the Financing Order, the Credit Agreement and the
Revolver Intercreditor Agreement, all amounts recovered under any insurance
policy required to be maintained by the Mortgagor hereunder and all awards
received by it on account of any Taking shall be deposited in a Lockbox Account
maintained by the Mortgagor to be applied pursuant to the provisions of the
Credit Agreement.
Notwithstanding the foregoing provisions of this Section 2.3 to the
contrary (but subject to the provisions of Section 2.4), and if each of the
following conditions is satisfied, the Mortgagee, upon request of the Mortgagor,
may apply up to $2,500,000 of insurance proceeds or condemnation awards received
by it toward the restoration or replacement of the affected Collateral, to the
extent necessary for the restoration or replacement thereof; provided that:
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(i) no Default or Event of Default then exists;
(ii) the Mortgagor shall have furnished to the
Mortgagee a certificate of an architect or engineer reasonably
acceptable to the Mortgagee stating (x) that the Collateral is
capable of being restored, prior to the maturity of the Credit
Agreement, to substantially the same condition as existed
prior to the casualty, (y) the aggregate estimated direct and
indirect costs of such restoration and (z) as to any Taking,
that the property taken in such Taking, or sold under threat
thereof, is not necessary to the Mortgagor's customary use or
occupancy of the Property or Mortgagor otherwise provides
Mortgagee adequate assurance that the Collateral can be
restored; and
(iii) in the event that the estimated cost of
restoration set forth in the certificate of such architect or
engineer (and such revisions to such estimate as are from time
to time made) exceeds maximum amount of insurance proceeds or
condemnation awards that would be permitted to be applied to
the restoration or replacement of the Collateral pursuant to
the foregoing, the Mortgagor shall deposit the amount of such
excess with the Mortgagee.
In the event that, after the restoration or replacement of the
Collateral, any insurance or condemnation awards shall remain, such amount shall
be deposited in a Lockbox Account to be applied pursuant to the provisions of
the Credit Agreement. If, prior to the receipt by the Mortgagee of such
insurance proceeds or condemnation awards, the Collateral shall have been sold
on foreclosure, the Mortgagee shall have the right to receive said insurance
proceeds or condemnation awards to the extent of any deficiency found to be due
upon such sale, with legal interest thereon, whether or not a deficiency
judgment shall have been sought or recovered or denied, and the reasonable
attorneys' fees, costs and disbursements incurred by the Mortgagee in connection
with the collection of such award or payment.
SECTION 2.4. Total Taking and Total Destruction. Subject to any
applicable requirements of the Financing Order, the Credit Agreement and the
Revolver Intercreditor Agreement, in the event of a Total Destruction or a Total
Taking, the Mortgagee shall apply all amounts recovered under any insurance
policy referred to in Section 2.1.1 and all awards received by it on account of
any such Taking shall be deposited in a Lockbox Account maintained by the
Mortgagor to be applied pursuant to the provisions of the Credit Agreement.
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ARTICLE III
EVENTS OF DEFAULT; REMEDIES, ETC.
SECTION 3.1. Events of Default; Acceleration. If an "Event of Default"
(pursuant to and as defined in the Credit Agreement) shall have occurred and be
continuing, then and in any such event the Mortgagee may, subject to any
applicable requirements of the Financing Order, the Credit Agreement and the
Revolver Intercreditor Agreement, at any time thereafter (unless all Events of
Default shall theretofore have been remedied and all costs and expenses,
including, without limitation, attorneys' fees and expenses incurred by or on
behalf of the Mortgagee, shall have been paid in full by the Mortgagor) declare,
by written notice to the Mortgagor, the Current Assets Loans and all other
Secured Obligations to be due and payable immediately or on a date specified in
such notice, and on such date the same shall be and become due and payable,
together with interest accrued thereon, without presentment, demand, protest or
notice, all of which the Mortgagor hereby waives. The Mortgagor will pay on
demand all costs and expenses, including, without limitation, attorneys' fees
and expenses, incurred by or on behalf of the Mortgagee in enforcing this
Mortgage, or any other Loan Document evidencing or securing the Current Assets
Loans, or occasioned by any default hereunder or thereunder.
SECTION 3.2. Legal Proceedings; Judicial Foreclosure. If an Event of
Default shall have occurred and be continuing, the Mortgagee at any time may, at
its election and without further order of or application to the Bankruptcy
Court, but subject to any applicable requirements of the Financing Order, the
Credit Agreement and the Revolver Intercreditor Agreement, proceed at law or in
equity or otherwise to enforce the payment and performance of the Secured
Obligations in accordance with the terms hereof and thereof and to foreclose the
lien of this Mortgage as against all or any part of the Collateral and to have
the same sold under the judgment or decree of a court of competent jurisdiction.
The Mortgagee shall be entitled to recover in such proceedings all costs
incident thereto, including attorneys' fees and expenses in such amounts as may
be fixed by the court.
SECTION 3.3. Power of Sale. If an Event of Default shall have occurred
and be continuing, the Mortgagee may, without further order of or application to
the Bankruptcy Court, grant, bargain, sell, assign, transfer, convey and deliver
the whole or, from time to time, any part of the Collateral, or any interest in
any part thereof, at any private sale or at public auction, with or without
demand, advertisement or notice, for cash, on credit or for other property, for
immediate or future delivery, and for such price or prices and on such terms as
the Mortgagee in its sole discretion may determine, or as may be required by
law, and upon such sale the Mortgagee may execute and deliver to the
purchaser(s) instruments of conveyance pursuant to the terms hereof and to
applicable laws. Without limiting the authority granted in this Section 3.3, but
subject to any applicable requirements of the Financing Order, the Credit
Agreement and the Revolver Intercreditor Agreement, the Mortgagee shall, without
further order of or application to the Bankruptcy Court and without demand on
the Mortgagor, after the lapse of such time as may then be required by law, and
notice of default and notice of sale having been given as then required by law,
sell the Collateral on the date and at the time and place designated in the
notice of sale, either as a whole or in separate parcels and in such order as
the Mortgagee may determine, but subject to any statutory right of the Mortgagor
to direct the order in which
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such property, if consisting of several known lots, parcels or interests, shall
be sold, at public auction to the highest bidder, the purchase price payable in
lawful money of the United States at the time of sale. The Person conducting the
sale may, for any cause deemed expedient, postpone the sale from time to time
until it shall be completed and, in every such case, notice of postponement
shall be given by public declaration thereof by such Person at the time and
place last appointed for the sale; provided that, if the sale is postponed for
longer than one (1) day beyond the day designated in the notice of sale, notice
of sale and notice of the time, date and place of sale shall be given in the
same manner as the original notice of sale. The Mortgagee shall execute and
deliver to the purchaser at any such sale a mortgagee's deed conveying the
property so sold, but without any covenant or warranty, express or implied. The
recitals in such mortgagee's deed of any matters or facts shall be conclusive
proof of the truthfulness thereof. Any Person, including the Mortgagee, may bid
at the sale.
SECTION 3.4. Uniform Commercial Code Remedies. If an Event of Default
shall have occurred and be continuing, the Mortgagee may, without further order
of or application to the Bankruptcy Court, but subject to any applicable
requirements of the Financing Order, the Credit Agreement and the Revolver
Intercreditor Agreement, exercise from time to time and at any time any rights
and remedies available to it under applicable law upon default in the payment of
indebtedness, including, without limitation, any right or remedy available to it
as a secured party under the Uniform Commercial Code of the State. The Mortgagor
shall, promptly upon request by the Mortgagee, assemble the Collateral, or any
portion thereof generally described in such request, and make it available to
the Mortgagee at such place or places designated by the Mortgagee and reasonably
convenient to the Mortgagee or the Mortgagor. If the Mortgagee elects to proceed
under the Uniform Commercial Code of the State to dispose of portions of the
Collateral, the Mortgagee, at its option, may give the Mortgagor notice of the
time and place of any public sale of any such property, or of the date after
which any private sale or other disposition thereof is to be made, by sending
notice by registered or certified first class mail, postage prepaid, to the
Mortgagor at least ten (10) days before the time of the sale or other
disposition. If any notice of any proposed sale, assignment or transfer by the
Mortgagee of any portion of the Collateral or any interest therein is required
by law, the Mortgagor conclusively agrees that ten (10) days notice to the
Mortgagor of the date, time and place (and, in the case of a private sale, the
terms) thereof is reasonable.
SECTION 3.5. Mortgagee Authorized to Execute Deeds, etc. The Mortgagor
irrevocably appoints the Mortgagee (which appointment is coupled with an
interest) the true and lawful attorney of the Mortgagor, in its name and stead
and on its behalf, for the purpose of effectuating any sale, assignment,
transfer or delivery for the enforcement hereof, whether pursuant to power of
sale, foreclosure or otherwise, to execute and deliver all such deeds, bills of
sale, assignments, releases and other instruments as may be designated in any
such request.
SECTION 3.6. Purchase of Collateral by Mortgagee. The Mortgagee may be
a purchaser of the Collateral or of any part thereof or of any interest therein
at any sale thereof, whether pursuant to power of sale, foreclosure or
otherwise, and the Mortgagee may apply upon the purchase price thereof the
indebtedness secured hereby owing to the Mortgagee. Such purchaser shall, upon
any such purchase, acquire good title to the properties so purchased, free of
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the security interest and lien of this Mortgage and free of all rights of
redemption in the Mortgagor.
SECTION 3.7. Receipt a Sufficient Discharge to Purchaser. Upon any sale
of the Collateral or any part thereof or any interest therein, whether pursuant
to power of sale, foreclosure or otherwise, the receipt of the Mortgagee or the
officer making the sale under judicial proceedings shall be a sufficient
discharge to the purchaser for the purchase money, and such purchaser shall not
be obliged to see to the application thereof.
SECTION 3.8 Waiver of Appraisement, Valuation, etc. The Mortgagor
hereby waives, to the fullest extent it may lawfully do so, the benefit of all
appraisement, valuation, stay, extension and redemption laws now or hereafter in
force and all rights of marshaling in the event of any sale of the Collateral or
any part thereof or any interest therein.
SECTION 3.9. Sale a Bar Against Mortgagor. Any sale of the Collateral
or any part thereof or any interest therein under or by virtue of this Mortgage,
whether pursuant to power of sale, foreclosure or otherwise, shall forever be a
bar against the Mortgagor.
SECTION 3.10. Secured Obligations to Become Due on Sale. Except as
otherwise provided in the Credit Agreement, upon any sale of the Collateral or
any portion thereof or interest therein by virtue of the exercise of any remedy
by the Mortgagee under or by virtue of this Mortgage, whether pursuant to power
of sale, foreclosure or otherwise in accordance with this Mortgage or by virtue
of any other remedy available at law or in equity or by statute or otherwise, at
the option of the Mortgagee, any sums or monies due and payable pursuant to the
Credit Agreement pertaining to the Current Assets Loans, the Loan Documents
pertaining to the Current Assets Loans and in connection with the Current Assets
Loans and/or the Secured Obligations shall, if not previously declared due and
payable, immediately become due and payable, together with interest accrued
thereon, and all other indebtedness which this Mortgage by its terms secures.
SECTION 3.11. Application of Proceeds of Sale and Other Moneys. Subject
to any applicable requirements of the Financing Order, the Credit Agreement and
the Revolver Intercreditor Agreement, the proceeds of any sale of the Collateral
or any part thereof or any interest therein under or by virtue of this Mortgage,
whether pursuant to power of sale, foreclosure or otherwise, and all other
moneys at any time held by the Mortgagee as part of the Collateral, shall be
applied in such order of priority as the Mortgagee shall determine in its sole
and absolute discretion including, without limitation, as follows:
(a) first, to the payment of the reasonable costs and expenses
of such sale (including, without limitation, the cost of evidence of
title and the costs and expenses, if any, of taking possession of,
retaining custody over, repairing, managing, operating, maintaining and
preserving the Collateral or any part thereof prior to such sale), all
reasonable costs and expenses incurred by the Mortgagee or any other
Person in obtaining or collecting any insurance proceeds, condemnation
awards or other amounts received by the Mortgagee, all reasonable costs
and expenses of any receiver of the Collateral or any part thereof, and
any Impositions or other charges or expenses prior to
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the security interest or lien of this Mortgage, which the Mortgagee may
consider it necessary or desirable to pay;
(b) second, to the payment of any Secured Obligation (other
than those set forth in Section 3.11 (c) below);
(c) third, to the payment of all amounts of principal of and
interest (including Post-Petition Interest to the extent such interest
is a Secured Obligation) at the time due and payable under the Credit
Agreement pertaining to the Current Assets Loans at the time
outstanding (whether due by reason of maturity or by reason of any
prepayment requirement or by declaration or acceleration or otherwise),
including interest at the rate provided for in the Credit Agreement on
any overdue principal and (to the extent permitted under applicable
law) on any overdue interest; and, in case such moneys shall be
insufficient to pay in full such principal and interest, then, first,
to the payment of all amounts of interest (including Post-Petition
Interest to the extent such interest is a Secured Obligation) at the
time due and payable and, second, to the payment of all amounts of
principal at the time due and payable under the Current Assets Loans;
and
(d) fourth, the balance, if any, held by the Mortgagee after
payment in full of all amounts referred to in subdivisions Sections
3.11(a), (b) and (c) above, shall, unless a court of competent
jurisdiction may otherwise direct by final order not subject to appeal,
be paid to or upon the direction of the Mortgagor.
SECTION 3.12. Appointment of Receiver. If an Event of Default shall
have occurred and be continuing, the Mortgagee shall, as a matter of right,
without notice, and without regard to the adequacy of any security for the
indebtedness secured hereby or the solvency of the Mortgagor, be entitled to,
without further order of or application to the Bankruptcy Court, but subject to
any applicable requirements of the Financing Order, the Credit Agreement and the
Revolver Intercreditor Agreement, the appointment of a receiver for all or any
part of the Collateral, whether such receivership be incidental to a proposed
sale of the Collateral or otherwise, and the Mortgagor hereby consents to the
appointment of such a receiver and will not oppose any such appointment.
SECTION 3.13. Possession. Management and Income. If an Event of Default
shall have occurred and be continuing, in addition to, and not in limitation of,
the rights and remedies provided in Section 1.14, the Mortgagee, upon five (5)
days written notice to the Mortgagor, may, without further order of or
application to the Bankruptcy Court, but subject to any applicable requirements
of the Financing Order, the Credit Agreement and the Revolver Intercreditor
Agreement, enter upon and take possession of the Collateral or any part thereof
by force, summary proceeding, ejectment or otherwise and may remove the
Mortgagor and all other Persons and any and all property therefrom and may hold,
operate, maintain, repair, preserve and manage the same and receive all
earnings, income, Rents, issues and Proceeds accruing with respect thereto or
any part thereof. The Mortgagee shall be under no liability for or by reason of
any such taking of possession, entry, removal or holding, operation or
management, except that any amounts so received by the Mortgagee shall be
applied to pay all costs and expenses of so entering upon, taking possession of,
holding, operating, maintaining, repairing, preserving and managing the
Collateral or any part thereof, and any Impositions or other charges prior to
the
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lien and security interest of this Mortgage which the Mortgagee may consider it
necessary or desirable to pay, and any balance of such amounts shall be applied
as provided in Section 3.11.
SECTION 3.14. Right of Mortgagee to Perform Mortgagor's Covenants, etc.
If the Mortgagor shall fail to make any payment or perform any act required to
be made or performed hereunder or under the Credit Agreement pertaining to the
Current Assets Loans or any other Loan Document pertaining to the Current Assets
Loans, the Mortgagee, without further order of or application to the Bankruptcy
Court, without notice to or demand upon the Mortgagor and without waiving or
releasing any obligation or Event of Default, may (but shall be under no
obligation to) at any time thereafter make such payment or perform such act for
the account and at the expense of the Mortgagor, and may enter upon the
Collateral for such purpose and take all such action thereon as, in the
Mortgagee's opinion, may be necessary or appropriate therefor. No such entry and
no such action shall be deemed an eviction of any lessee of the Property or any
part thereof. All sums so paid by the Mortgagee and all costs and expenses
(including, without limitation, attorneys' fees and expenses) so incurred,
together with interest thereon at the rate provided for in Section 3.2.2 of the
Credit Agreement from the date of payment or incurring, shall constitute
additional indebtedness under the Credit Agreement secured by this Mortgage and
shall be paid by the Mortgagor to the Mortgagee on demand.
SECTION 3.15. Subrogation. To the extent that the Mortgagee, on or
after the date hereof, pays any sum due under any provision of any Legal
Requirement or any instrument creating any lien prior or superior to the lien of
this Mortgage, or the Mortgagor or any other Person pays any such sum with the
proceeds of the Current Assets Loans, the Mortgagee shall have and be entitled
to a lien on the Collateral equal in priority to the lien discharged, and the
Mortgagee shall be subrogated to, and receive and enjoy all rights and liens
possessed, held or enjoyed by, the holder of such lien, which shall remain in
existence and benefit the Mortgagee in securing the Secured Obligations.
SECTION 3.16. Remedies, etc., Cumulative. Each right, power and remedy
of the Mortgagee provided for in this Mortgage, the Credit Agreement pertaining
to the Current Assets Loans or any other Loan Document pertaining to the Current
Assets Loans, or now or hereafter existing at law or in equity or by statute or
otherwise shall be cumulative and concurrent and shall be in addition to every
other right, power or remedy provided for in this Mortgage, the Credit Agreement
or any other Loan Document pertaining to the Current Assets Loans, or now or
hereafter existing at law or in equity or by statute or otherwise, and the
exercise or beginning of the exercise by the Mortgagee of any one or more of the
rights, powers or remedies provided for in this Mortgage, the Credit Agreement,
or any other Loan Document pertaining to the Current Assets Loans, or now or
hereafter existing at law or in equity or by statute or otherwise shall not
preclude the simultaneous or later exercise by the Mortgagee of any or all such
other rights, powers or remedies.
SECTION 3.17. Provisions Subject to Applicable Law. All rights, powers
and remedies provided in this Mortgage may be exercised only to the extent that
the exercise thereof does not violate any applicable provisions of law and are
intended to be limited to the extent necessary so that they will not render this
Mortgage invalid, unenforceable or not entitled to be recorded, registered or
filed under the provisions of any applicable law. If any term of this Mortgage
or any
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application thereof shall be invalid or unenforceable, the remainder of
this Mortgage and any other application of such term shall not be affected
thereby.
SECTION 3.18. No Waiver, etc. No failure by the Mortgagee to insist
upon the strict performance of any term hereof or of the Credit Agreement, or of
any other Loan Document, or to exercise any right, power or remedy consequent
upon a breach hereof or thereof, shall constitute a waiver of any such term or
of any such breach. No waiver of any breach shall affect or alter this Mortgage,
which shall continue in full force and effect with respect to any other then
existing or subsequent breach. By accepting payment or performance of any amount
or other Secured Obligations secured hereby before or after its due date, the
Mortgagee shall not be deemed to have waived its right either to require prompt
payment or performance when due of all other amounts and Secured Obligations
payable hereunder or to declare a default for failure to effect such prompt
payment.
SECTION 3.19. Compromise of Actions, etc. Any action, suit or
proceeding brought by the Mortgagee pursuant to any of the terms of this
Mortgage, the Credit Agreement pertaining to the Current Assets Loans, any other
Loan Document pertaining to the Current Assets Loans, or otherwise, and any
claim made by the Mortgagee hereunder or thereunder, may be compromised,
withdrawn or otherwise dealt with by the Mortgagee without any notice to or
approval of the Mortgagor.
ARTICLE IV
DEFINITIONS
SECTION 4.1. Terms Defined in this Mortgage. When used herein the
following terms have the following meanings:
"Borrowers" shall have the meaning set forth in the third recital.
"Collateral" shall have the meaning set forth in the granting clause.
"Contracts" shall have the meaning set forth in clause h of the
granting clause.
"Credit Agreement" shall have the meaning set forth in the third
recital.
"Credit Extensions" shall have the meaning set forth in the third
recital.
"Default" means any Event of Default or any condition or event which,
after notice or lapse of time, or both, would constitute an Event of Default.
"Goods" shall have the meaning set forth in clause c of the granting
clause.
"Herein", "hereof', "hereto", and "hereunder" and similar terms refer
to this Mortgage and not to any particular Section, paragraph or provision of
this Mortgage.
"Impositions" shall have the meaning set forth in Section 1.5.
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"Improvements" shall have the meaning set forth in clause b of the
granting clause.
"Indemnified Parties" shall have the meaning set forth in Section 1.16.
"Insurance Requirements" shall have the meaning set forth in paragraph
(a)of Section 1.6.
"Intangibles" shall have the meaning set forth in clause d of the
granting clause.
"Land" shall have the meaning set forth in the second recital.
"Leases" shall have the meaning set forth in clause (e) of the granting
clause.
"Legal Requirements" shall have the meaning set forth in paragraph (b)
of Section 1.6.
"Mortgage" shall have the meaning set forth in the preamble.
"Mortgagee" shall have the meaning set forth in the preamble.
"Mortgagor" shall have the meaning set forth in the preamble.
"Permits" shall have the meaning set forth in clause (g) of the
granting clause.
"Permitted Encumbrances" shall have the meaning set forth in
Section 1.2.
"Person" means a corporation, an association, a partnership, an
organization, a business, an individual, a government or political subdivision
thereof or a governmental agency or officer.
"Plans" shall have the meaning set forth in clause (f) of the granting
clause.
"Post-Petition Interest" shall have the meaning set forth in
Section 2.3.
"Proceeds" shall have the meaning set forth in clause (k) of the
granting clause.
"Property" shall have the meaning set forth in clause (b) of the
granting clause.
"Real Estate" shall have the meaning set forth in clause (a) of the
granting clause.
"Rents" shall have the meaning set forth in clause (i) of the granting
clause.
"Secured Obligations" means the Current Assets Obligations and all
Obligations with respect to the Current Assets Loans now or hereafter existing
under the Credit Agreement or any Loan Document pertaining to the Current Assets
Loans, and all obligations (monetary or otherwise) arising under or in
connection with the Current Assets Notes or the Current Assets Loans, whether
for principal, interest, costs, fees, expenses or otherwise and all other
Current Assets Obligations.
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"State" means the State of Florida.
"Total Destruction" means any damage to or destruction of the
Improvements or any part thereof which, in the reasonable estimation of the
Mortgagee shall require the expenditure of an amount in excess of Ten Million
Dollars ($10,000,000) to restore the Improvements to substantially the same
condition of the Improvements immediately prior to such damage or destruction.
"Total Taking" means a Taking, whether permanent or for temporary use,
which, in the reasonable judgment of the Mortgagee, shall substantially
interfere with and adversely affect the normal operation of the Property by the
Mortgagor to such an extent as would reasonably be anticipated to cause a
Material Adverse Effect.
SECTION 4.2. Use of Defined Terms. Terms for which meanings are
provided in this Mortgage shall, unless otherwise defined or the context
otherwise requires, have such meanings when used in any certificate and any
opinion, notice or other communication delivered from time to time in connection
with this Mortgage or pursuant hereto.
SECTION 4.3. Credit Agreement Definitions. Unless otherwise defined
herein or the context otherwise requires, capitalized terms used in this
Mortgage, including its preamble and recitals, have the meanings provided in the
Credit Agreement.
ARTICLE V
MISCELLANEOUS
SECTION 5.1. Further Assurances; Financing Statements.
SECTION 5.1.1. Further Assurances. The Mortgagor, at its expense, will
execute, acknowledge and deliver all such instruments and take all such other
action as the Mortgagee from time to time may reasonably request:
(a) to better subject to the lien and security interest of
this Mortgage all or any portion of the Collateral,
(b) to perfect, publish notice or protect the validity of the
lien and security interest of this Mortgage,
(c) to preserve and defend the title to the Collateral and the
rights of the Mortgagee therein against the claims of all Persons as
long as this Mortgage shall remain undischarged,
(d) to better subject to the lien and security interest of
this Mortgage or to maintain or preserve the lien and security interest
of this Mortgage with respect to any replacement or substitution for
any Collateral or any other after-acquired property except as provided
in the Credit Agreement, or
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(e) in order to further effectuate the purposes of this
Mortgage and to carry out the terms hereof and to better assure and
confirm to the Mortgagee its rights, powers and remedies hereunder.
SECTION 5.1.2. Financing Statements. Notwithstanding any other
provision of this Mortgage, the Mortgagor hereby agrees that, without notice to
or the consent of the Mortgagor, the Mortgagee may file with the appropriate
public officials such financing statements, continuation statements, amendments
and similar documents as are or may become necessary to perfect, preserve or
protect the security interest granted by this Mortgage.
SECTION 5.2. Additional Security. Without notice to or consent of the
Mortgagor, and without impairment of the security interest and lien and rights
created by this Mortgage, the Mortgagee and the Lenders may, without further
order of or application to the Bankruptcy Court, accept from the Mortgagor or
any other Person additional security for the Secured Obligations. Neither the
giving of this Mortgage nor the acceptance of any such additional security shall
prevent the Mortgagee from resorting, first, to such additional security, or,
first, to the security created by this Mortgage, or concurrently to both, in any
case without affecting the Mortgagee's lien and rights under this Mortgage.
SECTION 5.3. Defeasance; Partial Release, etc.
SECTION 5.3.1. Defeasance. If the Current Assets Loans and all other
amounts owing pursuant to the Credit Agreement pertaining to the Current Assets
Loans and the other Loan Documents pertaining to the Current Assets Loans shall
be repaid in full in accordance with the terms thereof, and if the Mortgagor
shall pay, in full, the principal of and premium, if any, and interest on the
Secured Obligations in accordance with the terms thereof and hereof and all
other sums payable hereunder by the Mortgagor and shall comply with all the
terms, conditions and requirements hereof and of the Secured Obligations, or
otherwise as may be provided in the Credit Agreement, then on such date, the
Mortgagee shall, upon the request of the Mortgagor and at the Mortgagor's sole
cost and expense, execute and deliver such instruments, in form and substance
reasonably satisfactory to the Mortgagee, as may be necessary to effectively
reconvey, release and discharge this Mortgage.
SECTION 5.3.2. Partial Release, etc. The Mortgagee may, at any time and
from time to time, without liability therefor, and without prior notice to the
Mortgagor, release or reconvey any part of the Collateral, consent to the making
of any map or plat of the Property, join in granting any easement thereon or
join in any extension agreement or agreement subordinating the lien of this
Mortgage.
SECTION 5.4. Notices, etc. All notices and other communications
provided to any of the parties hereto shall be in writing and addressed,
delivered or transmitted to such party as set forth in the Credit Agreement.
SECTION 5.5. Waivers, Amendments, etc. The provisions of this Mortgage
may be amended, discharged or terminated and the observance or performance of
any provision of this
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Mortgage may be waived, either generally or in a particular instance and either
retroactively or prospectively, only by an instrument in writing executed by the
Mortgagor and the Mortgagee.
SECTION 5.6. Cross-References. References in this Mortgage and in each
instrument executed pursuant hereto to any Section or Article are, unless
otherwise specified, to such Section or Article of this Mortgage or such
instrument, as the case may be, and references in any Section, Article or
definition to any clause are, unless otherwise specified, to such clause of such
Section, Article or definition.
SECTION 5.7. Headings. The various headings of this Mortgage and of
each instrument executed pursuant hereto are inserted for convenience only and
shall not affect the meaning or interpretation of this Mortgage or such
instrument or any provisions hereof or thereof.
SECTION 5.8. Currency. Unless otherwise expressly stated, all
references to any currency or money, or any dollar amount, or amounts
denominated in "Dollars" herein will be deemed to refer to the lawful currency
of the United States.
SECTION 5.9. Governing Law. THIS MORTGAGE SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER AND GOVERNED BY THE LAWS OF THE STATE.
SECTION 5.10. Successors and Assigns, etc. This Mortgage shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns.
SECTION 5.11. Waiver of Jury Trial; Submission to Jurisdiction.
(a) EACH OF THE MORTGAGOR AND THE MORTGAGEE HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON OR ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS MORTGAGE, THE CREDIT AGREEMENT, ANY
LOAN DOCUMENT PERTAINING TO THE CURRENT ASSETS LOANS OR ANY OTHER
RELATED INSTRUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER ORAL OR WRITTEN), OR ACTIONS OF THE MORTGAGOR OR
THE MORTGAGEE. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE
MORTGAGEE AND THE CURRENT ASSETS LENDERS TO ENTER INTO THE TRANSACTIONS
PROVIDED FOR IN THE CREDIT AGREEMENT AND TO MAKE THE CURRENT ASSETS
LOANS.
(b) FOR THE PURPOSE OF ANY ACTION OR PROCEEDING INVOLVING THIS
MORTGAGE, THE CREDIT AGREEMENT AS PERTAINS TO THE CURRENT ASSETS LOANS
OR ANY OTHER LOAN DOCUMENT AS PERTAINS TO THE CURRENT ASSETS LOANS, THE
MORTGAGOR HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE
JURISDICTION OF ALL FEDERAL AND STATE COURTS LOCATED IN THE STATE AND
CONSENTS THAT IT MAY BE SERVED WITH ANY PROCESS OR PAPER BY REGISTERED
MAIL OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE
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STATE IN ACCORDANCE WITH APPLICABLE LAW, PROVIDED A REASONABLE TIME FOR
APPEARANCE IS ALLOWED. THE MORTGAGOR AND MORTGAGEE EACH EXPRESSLY
WAIVES, TO THE EXTENT IT MAY LAWFULLY DO SO, ANY OBJECTION, CLAIM OR
DEFENSE WHICH IT MAY HAVE AT ANY TIME TO THE LAYING OF VENUE OF ANY
ACTION, SUIT OR PROCEEDING ARISING OUT OF THIS MORTGAGE, THE CREDIT
AGREEMENT OR ANY OTHER LOAN DOCUMENT PERTAINING TO THE CURRENT LOANS IN
ANY SUCH COURT, IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH SUIT, ACTION
OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM AND FURTHER IRREVOCABLY WAIVES THE RIGHT TO OBJECT,
WITH RESPECT TO ANY SUCH CLAIM, SUIT, ACTION OR PROCEEDING BROUGHT IN
ANY SUCH COURT, THAT SUCH COURT DOES NOT HAVE JURISDICTION OVER THE
PERSON OF THE MORTGAGOR. NOTHING CONTAINED HEREIN WILL BE DEEMED TO
PRECLUDE THE MORTGAGEE FROM BRINGING AN ACTION AGAINST THE MORTGAGOR IN
ANY OTHER JURISDICTION.
SECTION 5.12. Severability; Conflicts. Any provision of this Mortgage,
the Credit Agreement or any other Loan Document pertaining to the Current Assets
Loans 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 Mortgage, the Credit Agreement or such Loan Document pertaining to the
Current Assets Loans or affecting the validity or enforceability of such
provision in any other jurisdiction. In the event of any conflict between the
terms of this Mortgage and the terms of the Credit Agreement, the terms of the
Credit Agreement shall control.
SECTION 5.13. Loan Document. This Mortgage is a Loan Document executed
pursuant to the Credit Agreement and, unless otherwise expressly indicated
herein, shall be construed, administered and applied in accordance with the
terms and provisions thereof.
SECTION 5.14. Usury Savings Clause. It is the intention of the
Mortgagor and the Mortgagee to conform strictly to the usury laws governing the
Loan Documents pertaining to the Current Assets Loans, and any interest payable
under the Loan Documents pertaining to the Current Assets Loans shall be subject
to reduction to the amount not in excess of the maximum non-usurious amount
allowed under such laws, as construed by the courts having jurisdiction over
such matters. In the event the maturity of the Secured Obligations is
accelerated by reason of any provision of the Loan Documents pertaining to the
Current Assets Loans, or by reason of an election by the Mortgagee resulting
from an Event of Default, then earned interest may never include more than the
maximum amount permitted by law, computed from the dates of each advance of loan
proceeds under the Credit Agreement until payment, and any interest in excess of
the maximum amount permitted by law shall be canceled automatically or, if
theretofore paid, at the option of the Mortgagee, shall be rebated to the
Mortgagor, or shall be credited on the principal amount of the Secured
Obligations or, if all principal has been repaid, then the excess shall be
rebated to the Mortgagor. If any interest is canceled, credited against
principal or rebated to the Mortgagor in accordance with the foregoing sentence
and, if thereafter the interest payable hereunder is less than the maximum
amount permitted by applicable law, the rate
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hereunder shall automatically be increased to the maximum extent possible to
permit repayment to the Mortgagee and the Lenders as soon as possible of any
interest in excess of the maximum amount permitted by law which was earlier
canceled, credited against principal or rebated to the Mortgagor pursuant to the
provisions of the foregoing sentence.
SECTION 5.15. Future Advances. This Mortgage is a "Future Advance
Mortgage" under the laws of the State. Any and all future advances under this
Mortgage and the Loan Documents pertaining to the Current Assets Loans shall
have the same priority as if the future advance was made on the date that this
Mortgage was recorded. This Mortgage shall secure the Secured Obligations,
whenever incurred, such Secured Obligations to be due at the times provided in
the Loan Documents pertaining to the Current Assets Loans. Notice is hereby
given that the Secured Obligations may increase as a result of any defaults
hereunder by Mortgagor due to, for example, and without limitation, unpaid
interest or late charges, unpaid taxes or insurance premiums which the Mortgagee
elects to advance, defaults under leases that the Mortgagee elects to cure,
attorney fees or costs incurred in enforcing the Loan Documents pertaining to
the Current Assets Loans or other expenses incurred by the Mortgagee in
protecting the Collateral, the security of this Mortgage or the Mortgagee's
rights and interests.
SECTION 5.16. Mortgage Subject to Revolver Intercreditor Agreement.
Notwithstanding anything to the contrary contained herein, it is expressly
understood and agreed by the parties hereto that this Mortgage shall be subject
to the terms of the Revolver Intercreditor Agreement.
[REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the undersigned, by its duly elected officers and
pursuant to proper authority of its board of directors has duly executed,
sealed, acknowledged and delivered this Current Assets Secured Parties
Mortgage,
Assignment of Leases and Rents, Security Agreement and Fixture Filing as of the
day and year first above written.
STERLING FIBERS, INC., a Delaware corporation
By:
------------------------------------------
Name:
-------------------------------------
Title: President
DRAFTED BY:
Xxxxx Xxxxx LLP
0000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: R. Xxxxxxxxx Xxxxx, Esq.
90
[CORPORATION NOTARY PAGE]
STATE OF )
------------- )
COUNTY OF )
------------
BEFORE ME, the undersigned, a notary public in and for the State of
____________, on this day personally appeared ___________________________ as
_______________________ of STERLING FIBERS, INC., a Delaware corporation, and,
being known to me to be the person whose name is subscribed to the foregoing
instrument, acknowledged to me that he executed the same for the purpose and
consideration therein expressed and on behalf of said corporation.
Given under my hand and seal of office this ___ day of July, 2001.
---------------------------------------
Notary Public, State of
---------------
Date commission expires:
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