Exhibit 10.10
PLEDGE AGREEMENT dated as of
March 7, 2001, among J. Xxxxxx
Xxxxxx ("Xxxxxx"), the J. Xxxxxx Xxxxxx
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Trust (03/26/99) (the "Trust"; and
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together with Spoede, the "Pledgor") and
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RESOLUTION PERFORMANCE PRODUCTS LLC, a
Delaware limited liability company (the
"Company").
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The Trust or Spoede (as applicable) and Resolution Performance
Products Inc., a Delaware corporation and the Company's corporate parent ("RPP
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Inc."), are parties to (i) a Participation Agreement, dated as of the date
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hereof, pursuant to which the Trust purchased that number of shares of Common
Stock, $1.00 par value, of RPP Inc. set forth on the signature page hereto (the
"Pledged Shares"), for the per share purchase price set forth on the signature
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page hereto and certain Junior Subordinated Notes, dated as of the date hereof,
with an aggregate initial principal amount set forth on the signature page
hereto (the "Pledged Notes"), for the per note purchase price set forth on the
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signature page hereto; and (ii) a Non Qualified Stock Option Agreement, dated as
of the date hereof, pursuant to which Spoede is receiving options to purchase
that amount of shares of Common Stock, $1.00 par value, of RPP Inc. set forth on
the signature page hereto (the "Pledged Options"), for the per option exercise
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price set forth on the signature page hereto. Spoede shall pledge hereunder the
shares received by him upon exercise of any options granted to him by the
Company (the "Pledged Option Shares"), which initial amount is set forth on the
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signature page hereto. The Trust and Spoede (as applicable) shall pledge
hereunder the Pledged Shares, the Pledged Notes, the Pledged Options, and the
Pledged Option Shares. As used herein, the Pledged Shares, the Pledged Notes,
the Pledged Options and the Pledged Option Shares shall be referred to
collectively as the "Pledged Securities." This Pledge Agreement provides the
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terms and conditions upon which a Promissory Note executed by the Trust in favor
of the Company (the "Note") in partial payment for the purchase price of the
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Pledged Securities is secured by a pledge to the Company of the Pledged
Securities.
NOW, THEREFORE, in consideration of the promises contained herein and
other good and valuable consideration the receipt and sufficiency of which are
hereby acknowledged, and in order to induce the Company to accept the Note as
payment for the Pledged Securities, the Pledgor and the Company hereby agree as
follows:
SECTION 1. PLEDGE.
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The Pledgor hereby pledges to the Company, and grants to the Company a
security interest in, the Pledged Securities as security for the prompt and
complete payment when due of the unpaid principal and of interest on the Note.
SECTION 2. DELIVERY OF PLEDGED SECURITIES.
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Upon the execution of this Pledge Agreement, the Trust shall deliver
to the Company the certificates representing the Pledged Securities, together
with duly executed forms of assignment sufficient to transfer title thereto to
the Company. Upon the exercise of any Pledged Option, in lieu of delivering
certificates to Spoede, the Company will retain the certificates and such
certificates will be subject to this Pledge Agreement.
SECTION 3. VOTING RIGHTS; CASH DISTRIBUTIONS.
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Notwithstanding anything to the contrary contained herein, during the
term of this Pledge Agreement until such time as there exists a default in the
payment of principal or interest on the Note or any other default under the
Note, the Pledgor shall be entitled to all voting rights with respect to the
Pledged Securities and shall be entitled to receive all cash distributions paid
in respect of the Pledged Securities. Upon the occurrence of and during the
continuance of any such default, the Company shall retain all such cash
distributions payable on the Pledged Securities as additional security
hereunder.
SECTION 4. STOCK DIVIDENDS; DISTRIBUTIONS ETC.
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If, while this Pledge Agreement is in effect, the Pledgor becomes
entitled to receive or receives any securities or other property in addition to,
in substitution of, or in exchange for any of the Pledged Securities (whether as
a distribution in connection with any recapitalization, reorganization or
reclassification, distributions or otherwise), the Pledgor shall accept such
securities or other property on behalf of and for the benefit of the Company as
additional security for the Trust's obligations under the Note and shall
promptly deliver such additional security to the Company together with duly
executed forms of assignment, and such additional security shall be deemed to be
part of the Pledged Securities hereunder.
SECTION 5. DEFAULT.
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If the Trust defaults in the payment of the principal or interest
under the Note as it becomes due (whether upon demand, acceleration or
otherwise) or any other event of default under the Note occurs and has not been
remedied within the 10 day period provided in Section 3(a)(i) of the Note
(including the bankruptcy or insolvency of the Pledgor) (each such occurrence
shall be deemed a "Default"), the Company may exercise any and all of the
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rights, powers and remedies of an owner of the Pledged Securities (including the
right to vote the shares and receive dividends and distributions with respect to
such shares) and shall have and may exercise without demand any and all the
rights and remedies granted to a secured party upon default under the Uniform
Commercial Code of the State of New York or otherwise available to the Company
under applicable law. Without limiting the foregoing, if the Trust Defaults, the
Company is authorized to sell, assign and deliver at its discretion, from time
to time, all or any part of the Pledged Securities at any private sale or public
auction, on not less than ten days written notice to the Pledgor, at such price
or prices and upon such terms as the Company may deem advisable. The Pledgor
shall have no right to redeem the Pledged Securities after any such sale or
assignment. At any such sale or auction, the Company or any other holder of
shares of the Company may bid for, and become the purchaser of, the whole or any
part of the Pledged Securities offered for sale. In case of any such sale, after
deducting the costs, attorneys' fees and other expenses of sale and delivery,
the remaining proceeds of such sale shall be applied to the principal of and
accrued interest on the Note; provided, however, that after payment in full of
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the indebtedness evidenced by the Note, the balance of the proceeds of sale then
remaining shall be paid to the Trust and the Pledgor shall be entitled to the
return of any of the Pledged Securities remaining in the hands of the Company.
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SECTION 6. COSTS AND ATTORNEYS' FEES.
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All costs and expenses, including reasonable attorneys' fees, incurred
in exercising any right, power or remedy conferred by this Pledge Agreement or
in the enforcement thereof, shall become part of the indebtedness secured
hereunder and shall be paid by the Pledgor or repaid from the proceeds of the
sale of the Pledged Securities hereunder.
SECTION 7. PAYMENT OF INDEBTEDNESS AND RELEASE OF PLEDGED SECURITIES.
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Upon payment in full of the indebtedness evidenced by the Note, the
Company shall surrender the Pledged Securities to the Pledgor together with all
forms of assignment.
SECTION 8. FURTHER ASSURANCES.
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The Pledgor agrees that at any time and from time to time upon the
written request of the Company, the Pledgor will execute and deliver such
further documents and do such further acts and things as the Company may
reasonably request in order to effect the purposes of this Pledge Agreement.
SECTION 9. SEVERABILITY.
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Any provision of this Pledge Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
SECTION 10. NO WAIVER; CUMULATIVE REMEDIES.
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The Company shall not by any act, delay, omission or otherwise be
deemed to have waived any of its rights or remedies hereunder, and no waiver
shall be valid unless in writing, signed by the Company, and then only to the
extent therein set forth. A waiver by the Company of any right or remedy
hereunder on any one occasion shall not be construed as a bar to any right or
remedy which the Company would otherwise have on any future occasion. No failure
to exercise nor any delay in exercising on the part of the Company, any right,
power or privilege hereunder shall preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided are cumulative and may be exercised singly or
concurrently, and are not exclusive of any rights or remedies provided by law.
SECTION 11. WAIVERS, AMENDMENTS; APPLICABLE LAW.
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This Pledge Agreement sets forth the entire agreement of the parties
hereto as to the subject matter hereof and supersedes all previous agreements
between the parties hereto, whether written, oral or otherwise. None of the
terms or provisions of this Pledge Agreement may be waived, altered, modified or
amended except by an instrument in writing, duly executed by the parties hereto.
This Pledge Agreement and all obligations of the Pledgor hereunder shall
together with the rights and remedies of the Company hereunder, inure to the
benefit of the
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Company and its successors and assigns. This Pledge Agreement and the rights and
obligations hereunder shall be governed by, and construed in accordance with,
the laws of the State of New York.
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IN WITNESS WHEREOF, this Pledge Agreement has been executed as of the
date first above written.
J. XXXXXX XXXXXX TRUST (DATED 03/26/99)
By: /s/ J. Xxxxxx Xxxxxx
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Name: J. Xxxxxx Xxxxxx
Title: Trustee
/s/ J. Xxxxxx Xxxxxx
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J. Xxxxxx Xxxxxx
RESOLUTION PERFORMANCE PRODUCTS LLC
By: /s/ Xxxxxx X. Xxxxxxxxx
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Name: Xxxxxx X. Xxxxxxxxx
Title: Chairman
Number of Pledged Shares: 600
Per Share Price of
Pledged Shares: $100
Aggregate Initial Principal
Amount of Pledged Notes: $140,000
Per Note Price of
Pledged Notes: $1,000
Initial Number of Shares of
Common Stock for
Pledged Options: 2,100
Option Price for Options: $100
Number of Pledged
Option Shares: 2,100
