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EXHIBIT 4.3
CURRENT ASSETS SECURED PARTIES PARENT PLEDGE AGREEMENT
THIS CURRENT ASSETS SECURED PARTIES PARENT PLEDGE AGREEMENT (as
amended, supplemented, amended and restated or otherwise modified from time to
time, this "Pledge Agreement"), dated as of July 19, 2001, is made between
STERLING CHEMICALS HOLDINGS, INC., a Delaware corporation (the "Pledgor"), and
THE CIT GROUP/BUSINESS CREDIT, INC., as Administrative Agent (such capitalized
term and all other capitalized terms not otherwise defined herein shall have the
meanings provided for or incorporated by reference in Article I below) for each
of the Current Assets Secured Parties.
RECITALS:
A. Sterling Chemicals, Inc., a Delaware corporation (the "Company"),
Sterling Canada, Inc., a Delaware corporation, Sterling Pulp Chemicals US, Inc.,
a Delaware corporation, Sterling Pulp Chemicals, Inc., a Georgia corporation,
Sterling Fibers, Inc., a Delaware corporation, Sterling Chemicals Energy, Inc.,
a Delaware corporation, and Sterling Chemicals International, Inc., a Delaware
corporation, (collectively, the "Borrowers") are Wholly-Owned Subsidiaries of
the Pledgor.
B. The Pledgor and the Borrowers have elected to file voluntary
petitions with the United States Bankruptcy Court for the Southern District of
Texas and have continued in possession of their respective assets and management
of their respective businesses pursuant to Sections 1107 and 1108 of the
Bankruptcy Code.
C. Pursuant to a Revolving Credit Agreement, dated as of even date
herewith (as amended, supplemented, amended and restated or otherwise modified
from time to time, the "Credit Agreement"), among the Borrowers, the various
financial institutions as are, or may from time to time become, parties thereto
(the "Lenders"), and the Administrative Agent, the Lenders and the Issuer have
extended Commitments to make Credit Extensions to the Borrowers.
D. The Pledgor owns 100% of the Capital Securities of the Company.
E. As a condition precedent to the making of any Credit Extension under
the Credit Agreement, the Pledgor is required to execute and deliver this Pledge
Agreement.
F. The Pledgor has duly authorized the execution, delivery and
performance of this Pledge Agreement.
G. It is in the best interest of the Pledgor to execute this Pledge
Agreement inasmuch as the Pledgor will derive substantial direct and indirect
benefits from the Credit Extensions made from time to time to the Borrowers by
the Lenders pursuant to the Credit Agreement.
NOW THEREFORE, for good and valuable consideration the receipt of which
is hereby acknowledged, and in order to induce the Current Assets Lenders to
make Current Assets Loans
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(including the initial Current Assets Loans) to the Borrowers pursuant to the
Credit Agreement, the Pledgor and the Administrative Agent, for the ratable
benefit of each Current Assets Secured Party, agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Terms. The following terms (whether or not
underscored) when used in this Pledge Agreement, including its preamble and
recitals, shall have the following meanings (such definitions to be equally
applicable to the singular and plural forms thereof):
"Administrative Agent" is defined in the preamble.
"Borrowers" is defined in recital A.
"Capital Securities" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated,
whether voting or non-voting) of such Person's equity (including any instruments
convertible into equity), whether now outstanding or issued after the Effective
Date.
"Collateral" is defined in Section 2.1.
"Company" is defined in recital A.
"Credit Agreement" is defined in recital C.
"Distributions" means all stock dividends, liquidating dividends,
Capital Securities resulting from (or in connection with the exercise of) stock
splits, reclassifications, warrants, options, non-cash dividends, mergers or
consolidations, and all other distributions (whether similar or dissimilar to
the foregoing) on or with respect to any Pledged Shares or other Capital
Securities constituting Collateral, but shall not include Dividends.
"Dividends" means cash dividends and cash distributions with respect to
any Pledged Shares or other Pledged Property made in the ordinary course of
business, but shall not include liquidating dividends.
"Current Assets Termination Date" means the date on which all Current
Assets Obligations have been paid in full in cash, all Letters of Credit have
been terminated, expired or Cash Collateralized, all Rate Protection Agreements
where the counterparty is a Current Assets Lender (or its Affiliate) have been
terminated and the Current Assets Loan Commitment shall have terminated.
"Lenders" is defined in recital C.
"Pledge Agreement" is defined in the preamble.
"Pledged Property" means all Pledged Shares, all other pledged Capital
Securities, all
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other equity securities, all assignments of any amounts due or to become due
with respect thereto, all other instruments which are now being delivered by the
Pledgor to the Administrative Agent or may from time to time hereafter be
delivered by the Pledgor to the Administrative Agent for the purpose of pledge
under this Pledge Agreement or any other Loan Document, and all proceeds of any
of the foregoing.
"Pledged Share Issuer" means the Company.
"Pledged Shares" means 100% of the Capital Securities of the Pledged
Share Issuer.
"Pledgor" is defined in the preamble.
"Securities Act" is defined in clause (a) of Section 6.2.
SECTION 1.2. Credit Agreement Definitions. Unless otherwise defined
herein or the context otherwise requires, terms used in this Pledge Agreement,
including its preamble and recitals, have the meanings provided in the Credit
Agreement.
SECTION 1.3. U.C.C. Definitions. Unless otherwise defined herein or the
context otherwise requires, terms for which meanings are provided in the U.C.C.
are used in this Pledge Agreement, including its preamble and recitals, with
such meanings; provided, that, (a) in the event any term that is used herein is
not defined in Article 9 of the U.C.C., as in effect on the date hereof, but is
thereafter defined in Article 9 of the U.C.C., such term shall have the meaning
ascribed to such term in Article 9 of the U.C.C. as thereafter defined, and (b)
in the event that any term that is used herein is defined in both Article 9 of
the U.C.C., as in effect on or after the date hereof and Article 9 of the U.C.C.
as in force at any relevant time hereafter, the meaning to be ascribed to such
term herein shall be the most encompassing of such definitions.
ARTICLE II
PLEDGE
SECTION 2.1. Grant of Security Interest. Effective upon entry of the
Interim Order, the Pledgor hereby pledges, hypothecates, assigns, charges,
delivers and transfers to the Administrative Agent, for the ratable benefit of
each of the Current Assets Secured Parties, and hereby grants to the
Administrative Agent, for the ratable benefit of the Current Assets Secured
Parties, a continuing security interest in, all of the following property
(collectively, the "Collateral"):
(a) all issued and outstanding Capital Securities of the
Pledged Share Issuer identified in Attachment 1 hereto;
(b) all other Capital Securities of the Pledged Share Issuer
issued from time to time to the Pledgor;
(c) all other Pledged Property, whether now or hereafter
delivered to the Administrative Agent in connection with this Pledge
Agreement;
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(d) all Dividends, Distributions and other payments and rights
with respect to any Pledged Property; and
(e) all proceeds of any of the foregoing.
SECTION 2.2. Security for Current Assets Obligations. This Pledge
Agreement secures the payment in full and in cash of all Current Assets
Obligations.
SECTION 2.3. Delivery of Pledged Property. All certificates or
instruments representing or evidencing any Collateral, including all Pledged
Shares, shall be delivered to and held by or on behalf of the Administrative
Agent pursuant hereto (or to a party who will hold such Pledged Securities
pursuant to arrangements satisfactory to the Administrative Agent in its sole
discretion), shall be in suitable form for transfer by delivery and shall be
accompanied by all necessary instruments of transfer or assignment, duly
executed in blank.
SECTION 2.4. Dividends on Pledged Shares. In the event that any
Dividend is to be paid on any Pledged Share at a time when no Event of Default
has occurred and is continuing, such Dividend may be paid directly to the
Pledgor. If any such Default or Event of Default has occurred and is continuing,
then any such Dividend shall be paid directly to the Administrative Agent.
SECTION 2.5. Continuing Security Interest. This Pledge Agreement shall
create a continuing security interest in the Collateral and shall:
(a) remain in full force and effect until the Current Assets
Termination Date;
(b) be binding upon the Pledgor and its successors,
transferees and assigns; and
(c) inure, together with the rights and remedies of the
Administrative Agent hereunder, to the benefit of the Current Assets
Secured Parties.
Without limiting the foregoing clause (c), any Current Assets Lender may assign
or otherwise transfer (in whole or in part) any Current Assets Loan Commitment
or any Current Assets Loan held by it to any other Person or entity, and such
other Person or entity shall thereupon become vested with all the rights and
benefits in respect thereof granted to such Current Assets Lender under any Loan
Document (including this Pledge Agreement) or otherwise, subject, however, to
any contrary provisions in such assignment or transfer, and to the provisions of
Section 10.11 of the Credit Agreement. The security interest granted herein
shall terminate and all rights to the Collateral shall revert to the Pledgor on
the Current Assets Termination Date. Upon any such termination or release of
Collateral, the Administrative Agent will, at the Pledgor's sole expense,
deliver to the Pledgor, without any representations, warranties or recourse of
any kind whatsoever, all certificates and instruments representing or evidencing
all Pledged Shares, together with all other Collateral held by the
Administrative Agent hereunder, and execute and deliver to the Pledgor such
documents as the Pledgor shall reasonably request to evidence such termination
or release.
SECTION 2.6. Waiver, etc. The Pledgor hereby waives promptness,
diligence, notice of acceptance and any other notice with respect to any of the
Current Assets Obligations and this
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Pledge Agreement and any requirement that any Current Assets Secured Party
protect, secure, perfect or insure any Lien, or any property subject thereto, or
exhaust any right or take any action against any Obligor or any other Person
(including any other guarantor) or entity or any collateral securing the Current
Assets Obligations of any Obligor, as the case may be.
SECTION 2.7. Security Interest Absolute. All rights of the
Administrative Agent and the Liens granted to the Administrative Agent
hereunder, and all obligations of the Pledgor hereunder, shall be absolute and
unconditional, irrespective of
(a) any lack of validity or enforceability of any Loan
Document,
(b) the failure of any Current Assets Secured Party
(i) to assert any claim or demand or to enforce any
right or remedy against the Pledgor, any other Obligor or any
other Person under the provisions of the Loan Documents or
otherwise, or
(ii) to exercise any right or remedy against any
guarantor of, or collateral securing, any Current Assets
Obligations of the Pledgor or any other Obligor,
(c) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Current Assets Obligations or
any other extension, compromise or renewal of any Obligation of the
Pledgor or any other Obligor,
(d) any reduction, limitation, impairment or termination of
any Current Assets Obligation of the Pledgor or any other Obligor for
any reason (other than the repayment in full and in cash of all Current
Assets Obligations), including any claim of waiver, release, surrender,
alteration or compromise, and shall not be subject to (and the Pledgor
hereby waives any right to or claim of) any defense or set-off,
counterclaim, recoupment or termination whatsoever by reason of the
invalidity, illegality, nongenuineness, irregularity, compromise or
unenforceability of, or any other event or occurrence affecting, any
Current Assets Obligation of the Pledgor, any other Obligor or
otherwise,
(e) any amendment to, rescission, waiver or other modification
of, or any consent to departure from, any of the terms of the Loan
Documents,
(f) any addition, exchange, release, surrender or
non-perfection of any collateral (including the Collateral), or any
amendment to or waiver or release of or addition to or consent to
departure from any guaranty, for any of the Current Assets Obligations,
or
(g) any other circumstances which might otherwise constitute a
defense available to, or a legal or equitable discharge of, the
Pledgor, any other Obligor, any surety or any guarantor.
SECTION 2.8. Postponement of Subrogation, etc. The Pledgor will not
exercise any rights which it may acquire by reason of any payment made
hereunder, whether by way of subrogation, reimbursement or otherwise, until the
Current Assets Termination Date. Any amount paid to the Pledgor on account of
any payment made hereunder prior to the Current
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Assets Termination Date shall be held in trust for the benefit of the Current
Assets Secured Parties and shall immediately be paid to the Administrative Agent
for the ratable benefit of the Current Assets Secured Parties, and credited and
applied against the Current Assets Obligations, whether matured or unmatured, in
accordance with the terms of the Credit Agreement; provided, however, that if
(a) the Pledgor has made payment to the Administrative Agent
for the ratable benefit of the Current Assets Secured Parties of all or
any part of the Current Assets Obligations, and
(b) the Current Assets Termination Date has occurred,
each Current Assets Secured Party agrees that, at the Pledgor's request, the
Administrative Agent, on behalf of the Current Assets Secured Parties, will
execute and deliver to the Pledgor appropriate documents (without recourse and
without representation or warranty) necessary to evidence the transfer by
subrogation to the Pledgor of an interest in the Current Assets Obligations
resulting from such payment by the Pledgor. In furtherance of the foregoing,
prior to the Current Assets Termination Date, the Pledgor shall refrain from
taking any action or commencing any proceeding against any other Obligor (or its
successors or assigns, whether in connection with a bankruptcy proceeding or
otherwise) to recover any amounts in respect of payments made under this Pledge
Agreement to the Administrative Agent or any Current Assets Secured Party.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Warranties, etc. The Pledgor represents and warrants unto
each Current Assets Secured PARTY, as at the date of each pledge and delivery
hereunder (including each pledge and delivery of Pledged Shares) by the Pledgor
to the Administrative Agent of any Collateral, as set forth in this Article.
SECTION 3.2. Organization, etc. The Pledgor is validly organized and
existing and in good standing under the laws of the state or jurisdiction of its
incorporation or organization, is duly qualified to do business and is in good
standing as a foreign entity in each jurisdiction where the nature of its
business requires such qualification (except where the failure to be so
qualified and in good standing which, when taken together with all other such
failures, could not reasonably be expected to have a Material Adverse Effect),
and has full power and authority and holds all requisite governmental licenses,
permits and other approvals to enter into and perform its Obligations under this
Pledge Agreement (except for failures to hold such governmental licenses,
permits and other approvals which, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect and, pending entry of
the Interim Order, approval of the Bankruptcy Court) and to own and hold under
lease its material property and to conduct its business substantially as
currently conducted by it.
SECTION 3.3. Due Authorization, Non-Contravention, etc. The execution,
delivery and performance by the Pledgor of this Pledge Agreement is within the
Pledgor's powers, has been duly authorized by all necessary corporate action,
and does not
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(a) contravene (i) the Pledgor's Organic Documents, (ii) any
material contract binding on or affecting the Pledgor, (iii) any court
decree or order binding on or affecting the Pledgor or (iv) any law or
governmental regulation binding on or affecting the Pledgor; or
(b) result in, or require the creation or imposition of, any
Lien on any property of the Pledgor (except as permitted by this Pledge
Agreement).
SECTION 3.4. Ownership, No Liens, etc. The Pledgor is the legal and
beneficial owner of, and has good and valid title to (and has full right and
authority to pledge and assign) the Collateral, free and clear of all Liens or
claims other than the Lien granted pursuant hereto in favor of the
Administrative Agent, the Lien granted to the Trustee under the Senior Secured
Discount Notes Indenture and the Lien granted pursuant to the Parent Pledge
Agreement of even date herewith in favor of the Administrative Agent securing
the Fixed Asset Secured Parties.
SECTION 3.5. Valid Security Interest. Upon entry of the Interim Order,
this Pledge Agreement will create a valid, perfected security interest in the
Collateral senior to all Liens other than applicable Priority Liens.
SECTION 3.6. As to Pledged Shares. In the case of any Pledged Shares
constituting Collateral, all such Pledged Shares are duly authorized and validly
issued, fully paid and nonassessable, and constitute all of the issued and
outstanding Capital Securities of the Pledged Share Issuer. The Pledgor has no
Subsidiaries of which it directly owns any Capital Securities other than the
Pledged Share Issuer. All Pledged Shares are certificated, and have been
delivered to the Administrative Agent (or to a party who will hold such shares
pursuant to arrangements satisfactory to Administrative Agent in its sole
discretion) with stock powers, accompanied by undated instruments of transfer
duly executed in blank and the Administrative Agent has "control" (as defined in
the U.C.C.) of such Pledged Shares.
SECTION 3.7. Authorization, Approval, etc. Upon entry of the Interim
Order, no authorization or, approval or other action by, and no notice to or
filing with, any Governmental Authority, regulatory body or other Person those
that have been, or on the Effective Date will be, duly obtained or made and
which are, or on the Effective Date will be, in full force and effect) is
required either
(a) for the pledge by the Pledgor of any Collateral pursuant
to this Pledge Agreement or for the execution, delivery and performance
of this Pledge Agreement by the Pledgor, or
(b) for the exercise by the Administrative Agent of the voting
or other rights provided for in this Pledge Agreement, or, except with
respect to any Pledged Shares as may be required in connection with a
disposition of such Pledged Shares by laws affecting the offering and
sale of securities generally, the remedies in respect of the Collateral
pursuant to this Pledge Agreement,
provided, however, that in order to exercise the voting and certain other rights
provided for in this Pledge Agreement, the Pledged Shares must be transferred
into the name of the
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Administrative Agent on the books and records of the Pledged Share Issuer prior
to the exercise of such voting or other rights.
SECTION 3.8. Compliance with Laws. The Pledgor is in compliance with
the requirements of all applicable laws (including, the provisions of the Fair
Labor Standards Act), rules, regulations and orders of every Governmental
Authority, the non-compliance with which could have a Material Adverse Effect or
adversely affect the value of the Collateral.
ARTICLE IV
COVENANTS
SECTION 4.1. Covenants. The Pledgor covenants and agrees that at all
times prior to the Current Assets Termination Date, it will perform, comply with
and be bound by all of the agreements, covenants and obligations contained in
Article VII of the Credit Agreement and this Article which are applicable to the
Pledgor or its properties, each such agreement, covenant and obligation
contained in such Article and all other terms of the Credit Agreement to which
reference is made herein, together with all related definitions and ancillary
provisions, being hereby incorporated into this Pledge Agreement by reference as
though specifically set forth in this Article.
SECTION 4.2. Maintenance of Existence; Compliance with Laws, etc. The
Pledgor will:
(a) preserve and maintain its legal existence; and
(b) comply in all material respects with all applicable laws,
rules, regulations and orders, including the payment (before the same
become delinquent) of all Taxes, assessments and governmental charges
imposed upon the Pledgor or upon its property except to the extent
being diligently contested in good faith by appropriate proceedings and
for which adequate reserves in accordance with GAAP have been set aside
on the books of the Pledgor.
SECTION 4.3. Maintenance of Properties. The Pledgor will maintain,
preserve, protect and keep its respective properties in good repair, working
order and condition (ordinary wear and tear excepted), and make necessary
repairs, renewals and replacements so that the business carried on by the
Pledgor may be properly conducted at all times, unless the Pledgor determines in
good faith that the continued maintenance of such property is no longer
economically desirable.
SECTION 4.4. Insurance. The Pledgor will:
(a) maintain insurance on its property with financially sound
and reputable insurance companies against loss and damage in at least
the amounts (and with only those deductibles) customarily maintained,
and against such risks as are typically insured against in the same
general area, by Persons of comparable size engaged in the same or
similar business as the Pledgor; and
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(b) all worker's compensation, employer's liability insurance
or similar insurance as may be required under the laws of any state or
jurisdiction in which it may be engaged in business.
SECTION 4.5 Business Activities. The Pledgor will not engage in any
business activity other than in connection with the Pledgor's continuing
ownership of the issued and outstanding Capital Securities of the Company and
the maintenance of the Senior Secured Discount Notes, unless otherwise permitted
by the Credit Agreement or herein and approved by the Bankruptcy Court. Without
limiting the generality of the immediately preceding sentence, the Pledgor will
not, unless otherwise permitted by the Credit Agreement or herein and approved
by the Bankruptcy Court, create, incur, assume or suffer to exist any
Indebtedness, create, assume or suffer to exist any Lien upon or grant any
options or other rights with respect to, any of its revenues, property or other
assets, whether now owned or hereafter acquired (other than pursuant to the Loan
Documents, the first priority Lien granted to the Administrative Agent under the
Parent Pledge Agreement of even date herewith for the benefit of the Fixed
Assets Secured Parties and the second priority Lien granted to the trustee under
the Senior Secured Discount Notes Indenture), wind-up, liquidate or dissolve
itself (or suffer to exist any of the foregoing), Merge into or with any other
Person, other than as contemplated by the Credit Agreement or Dispose of all or
any part of its assets, in one transaction or a series of transactions, to any
Person or Persons create, incur, assume or suffer to exist any Investment in any
Person other than in respect of any additional equity Investments in the
Borrowers or take any action that would result in a Change in Control other than
as contemplated in the Credit Agreement. The Pledgor agrees not to commence or
cause the commencement of any of the actions described in clause (b), (c) or (d)
of Section 8.1.9 of the Credit Agreement with respect to any of its Subsidiaries
(other than the Borrowers and Unrestricted Subsidiaries). The Pledgor will not
amend or modify the Senior Secured Discount Notes Indenture or the Pledge
Agreement, dated as of August 21, 1996, between the trustee for the Senior
Secured Discount Notes and the Pledgor, in either case, in any way adverse to
the interests of the Lenders.
SECTION 4.6. Protect Collateral; Further Assurances, etc. Except for
the first priority Lien in favor of the Administrative Agent for the benefit of
the Fixed Assets Secured Parties and the second priority Lien in favor of the
trustee under the Senior Secured Discount Notes Indenture, the Pledgor will not
sell, assign, transfer, pledge or encumber in any other manner the Collateral
(except in favor of the Administrative Agent hereunder or as permitted under
Section 7.2.3 of the Credit Agreement). The Pledgor will warrant and defend the
right and title herein granted unto the Administrative Agent in and to the
Collateral (and all right, title and interest represented by the Collateral)
against the claims and demands of all Persons whomsoever. The Pledgor agrees
that at any time, and from time to time, at the expense of the Pledgor, the
Pledgor will promptly execute and deliver all further instruments, and take all
further action, that may be necessary or desirable, or that the Administrative
Agent may reasonably request, in order to perfect and protect any security
interest granted or purported to be granted hereby or to enable the
Administrative Agent to exercise and enforce its rights and remedies hereunder
with respect to any Collateral. The Pledgor will not permit any Pledged Share
Issuer to issue any Capital Securities unless the same are immediately delivered
and pledged to the Administrative Agent hereunder.
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SECTION 4.7. Stock Powers, etc. The Pledgor agrees that all Pledged
Shares (and all other Capital Securities constituting Collateral) delivered by
the Pledgor pursuant to this Pledge Agreement will be accompanied by duly
executed, undated stock powers or other equivalent instruments of transfer
reasonably acceptable to the Administrative Agent. The Pledgor will, from time
to time upon the reasonable request of the Administrative Agent, promptly
deliver to the Administrative Agent, such stock powers, instruments and similar
documents, reasonably satisfactory in form and substance to the Administrative
Agent, with respect to the Collateral as the Administrative Agent may reasonably
request and will, from time to time upon the request of the Administrative Agent
after the occurrence of any Event of Default, promptly cause, without further
order of or application to the Bankruptcy Court, the Pledged Share Issuer to
transfer any Pledged Shares or other Capital Securities constituting Collateral
into the name of any nominee designated by the Administrative Agent.
SECTION 4.8. Continuous Pledge. Subject to Section 2.4, the Pledgor
will, at all times, keep pledged to the Administrative Agent pursuant hereto all
Pledged Shares and all other Capital Securities constituting Collateral, all
Dividends and Distributions with respect thereto, and all other Collateral and
other Capital Securities, instruments, proceeds and rights from time to time
received by or distributable to the Pledgor in respect of any Collateral. Any
Distributions on Pledged Shares consisting of Capital Securities will be
certificated.
SECTION 4.9. Voting Rights; Dividends, etc. The Pledgor agrees:
(a) if any Event of Default shall have occurred and be
continuing, promptly upon receipt thereof by the Pledgor and without
any request therefore by the Administrative Agent, to deliver (properly
endorsed where required hereby or requested by the Administrative
Agent) to the Administrative Agent all Dividends, Distributions and all
proceeds of the Collateral, all of which shall be held by the
Administrative Agent as additional Collateral for use in accordance
with Section 6.4; and
(b) if any Event of Default shall have occurred and be
continuing and the Administrative Agent shall have notified the Pledgor
of the Administrative Agent's intention to exercise its voting power
under this Section:
(i) the Administrative Agent may exercise, without
further order of or application to the Bankruptcy Court, (to
the exclusion of the Pledgor) the voting power and all other
incidental rights of ownership with respect to any Pledged
Shares or other Capital Securities constituting Collateral and
the Pledgor hereby grants the Administrative Agent an
irrevocable proxy, exercisable under such circumstances, to
vote the Pledged Shares and such other Collateral; and
(ii) promptly to deliver to the Administrative Agent
such additional proxies and other documents as may be
necessary to allow the Administrative Agent to exercise such
voting power.
All Dividends, Distributions and proceeds which may at any time and from time to
time be held by the Pledgor but which the Pledgor is then obligated to deliver
to the Administrative Agent, shall, until delivery to the Administrative Agent,
be held by the Pledgor separate and apart from
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its other property in trust for the Administrative Agent. The Administrative
Agent agrees that unless an Event of Default shall have occurred and be
continuing and the Administrative Agent shall have given the notice referred to
in this Section, the Pledgor shall have the exclusive power to exercise all
voting and other consensual rights with respect to any Capital Securities
(including any of the Pledged Shares) constituting Collateral and the
Administrative Agent shall, upon the written request of the Pledgor, promptly
deliver such proxies and other documents, if any, as shall be reasonably
requested by the Pledgor which are necessary to allow the Pledgor to exercise
such powers with respect to any such Capital Securities (including any of the
Pledged Shares) constituting Collateral; provided, however, that no vote shall
be cast, or consent, waiver or ratification given, or action taken by the
Pledgor that would materially impair the value of any Collateral or be
inconsistent with or violate any provision of the Loan Documents.
ARTICLE V
THE ADMINISTRATIVE AGENT
SECTION 5.1. Administrative Agent Appointed Attorney-in-Fact. The
Pledgor hereby irrevocably appoints the Administrative Agent as the Pledgor's
attorney-in-fact, with full authority and in the name, place and stead of the
Pledgor or in its own name, from time to time in the Administrative Agent's
discretion, upon the occurrence and during the continuance of any Event of
Default, to, without further order of or application to the Bankruptcy Court,
take any action and to execute any instrument which the Administrative Agent may
deem necessary or advisable to accomplish the purposes of this Pledge Agreement,
including:
(a) to ask, demand, collect, xxx for, recover, compromise and
receive and give acquittance and receipts for moneys due and to become
due under or in respect of any of the Collateral;
(b) to receive, endorse and collect any drafts or other
instruments, documents and chattel paper, in connection with clause (a)
above; and
(c) to file any claims or take any action or institute any
proceedings which the Administrative Agent may deem necessary or
desirable for the collection of any of the Collateral or otherwise to
enforce the rights of the Administrative Agent with respect to any of
the Collateral.
The Pledgor hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section is irrevocable and coupled with an interest.
SECTION 5.2. Administrative Agent May Perform. If the Pledgor fails to
perform any agreement contained herein, the Administrative Agent may, without
further order of or application to the Bankruptcy Court, itself perform, or
cause performance of, such agreement, and the expenses of the Administrative
Agent incurred in connection therewith shall be payable by the Pledgor pursuant
to Section 6.5.
SECTION 5.3. Administrative Agent Has No Duty. The powers conferred on
the Administrative Agent hereunder are solely to protect its interest (on behalf
of the Current Assets Secured Parties) in the Collateral and shall not impose
any duty on it to exercise any such powers. Except for reasonable care of any
Collateral in its possession and the accounting for
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moneys actually received by it hereunder, the Administrative Agent shall have no
duty as to any Collateral or responsibility for
(a) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative
to any Pledged Property, whether or not the Administrative Agent has or
is deemed to have knowledge of such matters, or
(b) taking any necessary steps to preserve rights against
prior parties or any other rights pertaining to any Collateral.
SECTION 5.4. Reasonable Care. The Administrative Agent is required to
exercise reasonable care in the custody and preservation of any of the
Collateral in its possession; provided, however, the Administrative Agent shall
be deemed to have exercised reasonable care in the custody and preservation of
any of the Collateral if it takes such action for that purpose as the Pledgor
reasonably requests in writing from time to time, but failure of the
Administrative Agent to comply with any such request at any time shall not in
itself be deemed a failure to exercise reasonable care. If an Event of Default
has occurred and is continuing, the Administrative Agent shall not be required
to comply with any request of the Pledgor with respect to the matters described
in this Section.
ARTICLE VI
REMEDIES
SECTION 6.1. Certain Remedies. Without further order of or application
to the Bankruptcy Court, but subject to any applicable requirement of the
Financing Order, the Credit Agreement and the Revolver Intercreditor Agreement,
if any Event of Default shall have occurred and be continuing:
(a) The Administrative Agent may exercise in respect of the
Collateral, in addition to other rights and remedies provided for
herein or otherwise available to it, all the rights and remedies of a
secured party on default under the U.C.C. (whether or not the U.C.C.
applies to the affected Collateral) and also may, without notice except
as specified below, sell the Collateral or any part thereof in one or
more parcels at public or private sale, at any of the Administrative
Agent's offices or elsewhere, for cash, on credit or for future
delivery, and upon such other terms as the Administrative Agent may
deem commercially reasonable. The Pledgor agrees that, to the extent
notice of sale shall be required by law, at least ten days' prior
notice to the Pledgor of the time and place of any public sale or the
time after which any private sale is to be made shall constitute
reasonable notification. The Administrative Agent shall not be
obligated to make any sale of Collateral regardless of notice of sale
having been given. The Administrative Agent may adjourn any public or
private sale from time to time by announcement at the time and place
fixed therefore, and such sale may, without further notice, be made at
the time and place to which it was so adjourned.
(b) The Administrative Agent may
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(i) transfer all or any part of the Collateral into
the name of the Administrative Agent or its nominee, with or
without disclosing that such Collateral is subject to the Lien
and security interest hereunder,
(ii) notify the parties obligated on any of the
Collateral to make payment to the Administrative Agent of any
amount due or to become due thereunder,
(iii) enforce collection of any of the Collateral by
suit or otherwise, and surrender, release or exchange all or
any part thereof, or compromise or extend or renew for any
period (whether or not longer than the original period) any
obligations of any nature of any party with respect thereto,
(iv) endorse any checks, drafts or other writings in
the Pledgor's name to allow collection of the Collateral,
(v) take control of any proceeds of the Collateral
and
(vi) execute (in the name, place and stead of the
Pledgor) endorsements, assignments, stock powers and other
instruments of conveyance or transfer with respect to all or
any of the Collateral.
SECTION 6.2. Securities Laws. If the Administrative Agent shall
determine to exercise its right to sell all or any of the Collateral pursuant to
Section 6.1, the Pledgor agrees that, upon request of the Administrative Agent,
the Pledgor will use commercially reasonable efforts to, at its own expense:
(a) execute and deliver, and cause each issuer of the
Collateral contemplated to be sold and the directors and officers
thereof to execute and deliver, all such instruments and documents, and
do or cause to be done all such other acts and things, as may be
necessary or, in the opinion of the Administrative Agent, advisable to
register such Collateral under the provisions of the Securities Act of
1933, as from time to time amended (the "Securities Act"), and to cause
the registration statement relating thereto to become effective and to
remain effective for such period as prospectuses are required by law to
be furnished, and to make all amendments and supplements thereto and to
the related prospectus which, in the opinion of the Administrative
Agent, are necessary or advisable, all in conformity with the
requirements of the Securities Act and the rules and regulations of the
Securities and Exchange Commission applicable thereto;
(b) use its best efforts to qualify the Collateral under the
state securities or "Blue Sky" laws and to obtain all necessary
governmental approvals for the sale of the Collateral, as requested by
the Administrative Agent;
(c) cause each such issuer to make available to its security
holders, as soon as practicable, an earnings statement that will
satisfy the provisions of Section 11(a) of the Securities Act; and
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(d) do or cause to be done all such other acts and things as
may be necessary to make such sale of the Collateral or any part
thereof valid and binding and in compliance with applicable law.
The Pledgor further acknowledges the impossibility of ascertaining the amount of
damages that would be suffered by the Administrative Agent or the Current Assets
Secured Parties by reason of the failure by the Pledgor to perform any of the
covenants contained in this Section and, consequently, agrees that, if the
Pledgor shall fail to perform any of such covenants, it shall pay, as liquidated
damages and not as a penalty, an amount equal to the value (as determined by the
Administrative Agent) of the Collateral on the date the Administrative Agent
shall demand compliance with this Section.
SECTION 6.3. Compliance with Restrictions. The Pledgor agrees that in
any sale of any of the Collateral whenever an Event of Default shall have
occurred and be continuing, the Administrative Agent is hereby authorized,
without further order of or application to the Bankruptcy Court, to comply with
any limitation or restriction in connection with such sale as it may be advised
by counsel is necessary in order to avoid any violation of applicable law
(including compliance with such procedures as may restrict the number of
prospective bidders and purchasers, require that such prospective bidders and
purchasers have certain qualifications and restrict such prospective bidders and
purchasers to persons who will represent and agree that they are purchasing for
their own account for investment and not with a view to the distribution or
resale of such Collateral), or in order to obtain any required approval of the
sale or of the purchaser by any Governmental Authority, and the Pledgor further
agrees that such compliance shall not result in such sale being considered or
deemed not to have been made in a commercially reasonable manner, nor shall the
Administrative Agent be liable nor accountable to the Pledgor for any discount
allowed by reason of the fact that such Collateral is sold in compliance with
any such limitation or restriction.
SECTION 6.4. Application of Proceeds. Subject to any applicable
requirements of the Financing Order, the Credit Agreement and the Revolver
Intercreditor Agreement, all cash proceeds received by the Administrative Agent
in respect of any sale of, collection from or other realization upon, all or any
part of the Collateral may, in the discretion of the Administrative Agent, be
held by the Administrative Agent as additional collateral security for, or then
or at any time thereafter be applied (after payment of any amounts payable to
the Administrative Agent pursuant to Section 10.4 of the Credit Agreement and
Section 6.5 below) in whole or in part by the Administrative Agent against, all
or any part of the Current Assets Obligations in such order as the
Administrative Agent shall elect. Any surplus of such cash or other proceeds
held by the Administrative Agent and remaining after the Current Assets
Termination Date, shall be paid over to the Pledgor or to whomsoever may be
lawfully entitled to receive such surplus.
SECTION 6.5. Indemnity and Expenses. The Pledgor hereby indemnifies and
holds harmless the Administrative Agent from and against any and all claims,
losses and liabilities arising out of or resulting from this Pledge Agreement
(including enforcement of this Pledge Agreement), except claims, losses or
liabilities resulting from the Administrative Agent's gross negligence or
willful misconduct, and will upon demand pay to the Administrative Agent the
amount of any and all reasonable expenses, including the reasonable fees and
disbursements of
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its counsel and of any experts and agents, which the Administrative Agent may
incur, in each case, in connection with:
(a) the administration of this Pledge Agreement;
(b) the custody, preservation, use or operation of, or the
sale of, collection from or other realization upon, any of the
Collateral;
(c) the exercise or enforcement of any of the rights of the
Administrative Agent hereunder; or
(d) the failure by the Pledgor to perform or observe any of
the provisions hereof.
SECTION 6.6. No Recourse. The Pledgor shall not be liable for any
indebtedness, liabilities or Obligations (other than as set forth in this Pledge
Agreement) in connection with the Credit Agreement, this Pledge Agreement or any
of the other Loan Documents, and neither the Administrative Agent nor any Lender
shall have any recourse against the Pledgor or any of its assets or properties
(other than the Collateral to the extent of the Current Assets Obligations) to
satisfy any such indebtedness, liabilities or Obligations; provided, however,
that nothing herein shall constitute a waiver of the Administrative Agent's or
any Current Assets Lender's ability to exercise any right or remedy which any
such party may have against the Pledgor on account of any claim for fraud,
deceit or other material misrepresentation or omission by and relating to the
Pledgor (including its assets and operations, but excluding the Company, any
Subsidiary of the Company or any of their assets or operations).
ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 7.1. Loan Document. This Pledge Agreement is a Loan Document
executed pursuant to the Credit Agreement and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions thereof.
SECTION 7.2. Amendments, etc. No amendment to or waiver of any
provision of this Pledge Agreement nor consent to any departure by the Pledgor
here from shall in any event be effective unless the same shall be in writing
and signed by the Administrative Agent (on behalf of the Lenders or the Required
Lenders, as the case may be) and the Pledgor, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which it is given.
SECTION 7.3. Protection of Collateral. The Administrative Agent may
from time to time, at its option, and at the expense of the Pledgor, perform any
act which the Pledgor agrees hereunder to perform and which the Pledgor shall
fail to perform after being requested in writing so to perform (it being
understood that no such request need be given after the occurrence and during
the continuance of an Event of Default) and the Administrative Agent may from
time to time take any other action which the Administrative Agent reasonably
deems necessary for the maintenance, preservation or protection of any of the
Collateral or of its security interest therein.
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SECTION 7.4. Addresses for Notices. All notices and other
communications provided for hereunder shall be in writing and addressed,
delivered or transmitted, if to the Pledgor, at the address or facsimile number
of the Company provided for in the Credit Agreement, and, if to the
Administrative Agent, at the address or facsimile number provided for in the
Credit Agreement, or as to any such party at such other address or facsimile
number as shall be designated by such party in a written notice to each other
party complying as to delivery with the terms of this Section. Any notice, (a)
(i) if mailed and properly addressed with postage prepaid or (ii) if properly
addressed and sent by pre-paid courier service, shall be deemed given when such
notice has been received or (b) if transmitted by facsimile, shall be deemed
given when transmitted (and telephonic confirmation of receipt thereof has been
received).
SECTION 7.5. Headings. The various headings of this Pledge Agreement
are inserted for convenience only, and shall not affect the meaning or
interpretation of this Pledge Agreement or any provisions hereof.
SECTION 7.6. Severability. Any provision of this Pledge Agreement which
is prohibited or unenforceable in any jurisdiction shall, as to such provision
and such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this Pledge
Agreement or affecting the validity or enforceability of such provision in any
other jurisdiction.
SECTION 7.7. Governing Law. THIS PLEDGE AGREEMENT SHALL BE DEEMED TO BE
A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW
YORK, EXCLUDING THE LAW OF CONFLICTS BUT GIVING EFFECT TO FEDERAL LAWS
APPLICABLE TO NATIONAL BANKS.
SECTION 7.8. Counterparts. This Pledge Agreement may be executed by the
parties hereto in several counterparts, each of which shall be deemed to be an
original (whether such counterpart is originally executed or an electronic copy
of an original) and all of which shall constitute together but one and the same
agreement. This Pledge Agreement shall become effective and binding upon the
Pledgor when a counterpart hereof executed on behalf of the Pledgor shall have
been received by the Administrative Agent.
SECTION 7.9. Pledge Agreement Subject to Revolver Intercreditor
Agreement. Notwithstanding anything to the contrary contained herein, it is
expressly understood and agreed by the parties hereto that this Pledge Agreement
shall be subject to the terms of the Revolver Intercreditor Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Current Asset
Secured Parties Parent Pledge Agreement to be duly executed and delivered by
their respective officers thereunto duly authorized as of the day and year first
above written.
STERLING CHEMICALS HOLDINGS, INC.
By:
-------------------------------
Title:
THE CIT GROUP/BUSINESS CREDIT, INC.
By:
-------------------------------
Title:
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ATTACHMENT 1
Pledgor: STERLING CHEMICAL HOLDINGS, INC.
Pledged Shares
Pledged Share Issuer Capital Securities
---------------------------------------------------------------
Authorized Shares Outstanding Shares % of Shares Pledged
----------------- ------------------ -------------------
Sterling Chemicals, Inc. 1,000 1,000 100%
A-1
