1
EXHIBIT 4.17
SENIOR DEBT INTERCREDITOR AGREEMENT
THIS SENIOR DEBT INTERCREDITOR AGREEMENT, dated as of July 23, 1999 (as
amended, supplemented, amended and restated or otherwise modified from time to
time, this "Agreement"), between XXXXXX TRUST COMPANY OF NEW YORK, as trustee
(in such capacity, the "Trustee") on behalf of itself and the holders
(collectively referred to as the "Holders") of the Senior Secured Notes (such
capitalized term and all other capitalized terms not otherwise defined herein
shall have the meanings set forth or incorporated in Article I) which are or may
become Holders pursuant to the Senior Secured Note Indenture referred to below,
and THE CIT GROUP/BUSINESS CREDIT, INC., as administrative agent (in such
capacity, the "Administrative Agent") on behalf of the Lenders party to the
Credit Agreement referred to below.
W I T N E S S E T H :
WHEREAS, pursuant to the Revolving Credit Agreement, dated as of July
23, 1999 (as amended, supplemented, refinanced, amended and restated or
otherwise modified from time to time, the "Credit Agreement"), among Sterling
Chemicals, Inc., a Delaware corporation (the "Company"), Sterling Canada, Inc.,
a Delaware corporation, Sterling Pulp Chemicals US, Inc., a Delaware
corporation, Sterling Pulp Chemicals, Inc., a Georgia corporation, Sterling
Fibers, Inc., a Delaware corporation, Sterling Chemicals Energy, Inc., a
Delaware corporation, and Sterling Chemicals International, Inc., a Delaware
corporation (the Company, together with each such Person, collectively, the
"Borrowers", and each, individually, a "Borrower"), the various financial
institutions as are or may become parties thereto (collectively, the "Lenders"),
DLJ Capital Funding, Inc., as Syndication Agent for the Lenders, Credit Suisse
First Boston, as Documentation Agent for the Lenders, and the Administrative
Agent, the Lenders have extended commitments to make Credit Extensions
thereunder;
WHEREAS, certain of the Lenders have extended Fixed Assets Loan
Commitments (the "Fixed Assets Lenders") pursuant to which Borrowings of Fixed
Assets Loans will be made from time to time on and subsequent to the Closing
Date but prior to the Fixed Assets Loan Commitment Termination Date;
WHEREAS, pursuant to the Senior Secured Note Indenture, dated as of
July 23, 1999 (as amended, supplemented, amended and restated or otherwise
modified from time to time, the "Senior Secured Note Indenture"), between the
Company and the Trustee, the Company will issue 12 3/8% Senior Secured Notes due
2006 (the "Senior Secured Notes") for gross cash proceeds of $295,000,000;
WHEREAS, as security for the Fixed Assets Obligations, the Borrowers
and Parent have each executed and delivered the relevant Fixed Assets Security
Documents to which they are a party pursuant to which the Borrowers and Parent
assigned and pledged to the Administrative Agent for its benefit and the ratable
benefit of each of the Fixed Assets Lenders, and granted to the Administrative
Agent for
2
its benefit and the ratable benefit of each of the Fixed Assets Lenders, a
first-priority security interest in all of the Fixed Assets Collateral and the
Parent Collateral;
WHEREAS, as security for the Senior Notes Obligations, the Borrowers
have each executed and delivered the Senior Notes Collateral Documents pursuant
to which the Borrowers assigned and pledged to the Trustee for its benefit and
the ratable benefit of each of the Holders, and granted to the Trustee for its
benefit and the ratable benefit of each of the Holders, a first-priority
security interest in all of the Senior Notes Collateral and a second-priority
security interest in all of the Fixed Assets Collateral;
WHEREAS, in order to perfect the security interests in the Collateral,
each of the Administrative Agent (on behalf of itself and the Fixed Assets
Lenders) and the Trustee (on behalf of itself and the Holders) will file
financing statements under the U.C.C. (with the Fixed Assets Lenders making such
filings prior to any filings of the Trustee on behalf of the Holders) and file
certain mortgages, deeds of trust, security agreements and/or pledge agreements
and take such other actions as each such Secured Parties' Representative may
deem necessary or desirable to perfect the security interests granted to the
applicable Secured Parties by the Borrowers pursuant to the applicable
Collateral Documents; and
WHEREAS, the Secured Parties desire to agree to the relative priority
of their respective security interests in the Collateral, and certain other
rights, priorities and interests as between themselves;
NOW, THEREFORE, in consideration of the premises and other covenants
set forth in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
hereby agree as follows:
ARTICLE I
Definitions
SECTION 1.1. Certain Terms. The following terms (whether or not
underscored) when used in this Agreement, including its preamble and recitals,
shall have the following meanings (such definitions to be equally applicable to
the singular and plural forms thereof):
"Administrative Agent" is defined in the preamble.
"Agreement" is defined in the preamble.
"Applicable Agreement" means, as the context requires, the Fixed Assets
Security Documents, the Senior Notes Collateral Documents, the Credit Agreement
and the Senior Secured Note Indenture.
-2-
3
"Borrower" and "Borrowers" are defined in the first recital.
"Collateral" means, collectively, the Fixed Assets Collateral,
the Senior Notes Collateral and the Parent Collateral.
"Collateral Documents" means, collectively, the Fixed Assets
Security Documents and the Senior Notes Collateral Documents.
"Company" is defined in the first recital.
"Credit Agreement" is defined in the first recital.
"Enforcement" means the taking by the Administrative Agent, on
behalf of the Fixed Assets Lenders, of any action to repossess any of
the Fixed Assets Collateral or to commence judicial or nonjudicial
enforcement of any of their respective rights and remedies with respect
to the Fixed Assets Collateral.
"Fixed Assets Collateral" means all "Collateral" as such term
is defined in each Fixed Assets Security Document including, without
limitation, the real property, fixtures and equipment of the Borrowers
and the pledge by certain Borrowers of the Capital Securities of
certain Subsidiaries.
"Fixed Assets Lenders" is defined in the second recital.
"Fixed Assets Obligations" means all obligations of every kind
and nature (including without limitation, principal, fees, interest
(including interest which accrues after or would accrue but for the
commencement of any case, proceeding or other action relating to the
bankruptcy, insolvency or reorganization of the Borrowers) expenses,
indemnities and all other sums chargeable to the Borrowers) (monetary
or otherwise, whether absolute or contingent, matured or unmatured) of
the Borrowers and each other Obligor arising under or in connection
with the Fixed Assets Loans, the Credit Agreement and each other Loan
Document which secures or guarantees such obligations (including
obligations under a Rate Protection Agreement where the counterparty is
a Fixed Assets Lender (or its Affiliate)), in each case, to the extent
such obligations are owed to any Fixed Assets Secured Party.
"Fixed Assets Security Documents" means the Fixed Assets
Security Agreement, the Obligor Pledge Agreement, the Mortgage,
Assignment of Leases and Rents, Security Agreement and Fixture Filing,
dated as of July 23, 1999, among Sterling Fibers, Inc. and The CIT
Group/Business Credit, Inc. (with respect to Florida property),
Leasehold Deed to Secure Debt, Assignment and Security Agreement, dated
as of July 23, 1999, among Sterling Pulp Chemicals, Inc., The CIT
Group/Business Credit, Inc. and U.S. Bank Trust National Association as
Georgia co-agent (with respect to Georgia Property), and Deed of Trust,
Assignment of Leases and Rents, Security Agreement and Fixture Filing,
dated as of July 23, 1999, among Sterling Chemicals, Inc. and The CIT
Group/Business Credit, Inc. (with respect to Texas property), and each
other agreement pursuant to which the Administrative Agent is
-3-
4
granted a Lien to secure the Fixed Assets Obligations and each other
agreement, certificate, document or instrument delivered in connection
with any of the foregoing, whether or not specifically mentioned herein
or therein.
"Holders" is defined in the preamble.
"Lenders" is defined in the first recital.
"Liquidation Proceeds" means the net proceeds received or
receivable in respect of any sale, exchange, transfer, liquidation,
collection or other disposition of any Fixed Assets Collateral which is
not made in the ordinary course of the Borrowers' business.
"Obligations" means, collectively, the Fixed Assets
Obligations and the Senior Notes Obligations.
"Parent Collateral" means the "Collateral" as defined in the
Parent Pledge Agreement, dated as of July 23, 1999, between the Parent
and the Administrative Agent on behalf of the Fixed Assets Secured
Parties, relating to the pledge by the Parent of 100% of the
outstanding Capital Securities of the Company to secure the Fixed
Assets Obligations.
"Secured Parties" means, collectively or individually (as the
case may be), the Fixed Assets Secured Parties and the Senior Notes
Secured Parties.
"Secured Parties' Representative" means, collectively or
individually (as the case may be), the Administrative Agent and the
Trustee.
"Senior Notes Canadian Pledge Agreement" means the Senior
Notes Canadian Pledge Agreement, dated as of July 23, 1999, between
Sterling Canada, Inc. and the Trustee, relating to the pledge by
Sterling Canada, Inc. of 65% of its ownership interests in Sterling
Pulp Chemicals, Ltd., an Ontario company, and Sterling NRO, Ltd., an
Ontario company, to secure the Senior Notes Obligations.
"Senior Notes Collateral" means all "Collateral" as such term
is defined in Senior Notes Canadian Pledge Agreement.
"Senior Notes Collateral Documents" means the Stock Pledge and
Security Agreement, dated as of July 23, 1999, among Sterling
Chemicals, Inc., Sterling Canada, Inc., Sterling Pulp Chemicals, US,
Inc., and Xxxxxx Trust Company of New York (with respect to US
subsidiaries), Stock Pledge and Security Agreement, dated as of July
23, 1999, among Sterling Chemicals, Inc., Sterling Canada, Inc., and
Xxxxxx Trust Company of New York (with respect to foreign
subsidiaries), Security Agreement, dated as of July 23, 1999, among
-4-
5
Sterling Chemicals, Inc., Sterling Pulp Canada, Inc., Sterling Pulp
Chemicals, Sterling Pulp Chemicals, US, Inc., Sterling Fibers, Inc.,
Sterling Chemicals Energy, Inc., Sterling Chemicals International, Inc.
and Xxxxxx Trust Company of New York, Second Mortgage, Assignment of
Leases and Rents, Security Agreement and Fixture Filing, dated as of
July 23, 1999, among Sterling Fibers, Inc. and Xxxxxx Trust Company of
New York (with respect to Florida property), Leasehold Deed to Secure
Debt, Assignment and Security Agreement, dated as of July 23, 1999,
among Sterling Pulp Chemicals, Inc., Xxxxxx Trust Company of New York
and U.S. Bank Trust National Association as Georgia co-agent (with
respect to Georgia Property), and Second Deed of Trust, Assignment of
Leases and Rents, Security Agreement and Fixture Filing, dated as of
July 23, 1999, among Sterling Chemicals, Inc. and Xxxxxx Trust Company
of New York (with respect to Texas property).
"Senior Notes Documents" means the Senior Secured Note
Indenture, the Senior Secured Notes or any Senior Notes Collateral
Document.
"Senior Notes Obligations" means all obligations (monetary or
otherwise, whether absolute or contingent, matured or unmatured) of the
Company and its Subsidiaries arising under or in connection with any
Senior Notes Documents.
"Senior Notes Secured Parties" means, collectively, the
Holders and the Trustee.
"Senior Secured Note Indenture" is defined in the third
recital.
"Senior Secured Notes" is defined in the third recital.
"Trustee" is defined in the preamble.
SECTION 1.2. Other Defined Terms. Unless otherwise defined herein or
the context otherwise requires, terms used in this Agreement, including its
preamble and recitals, have the meanings provided in the Credit Agreement.
SECTION 1.3. U.C.C. Terms. Terms not otherwise defined herein which are
defined in, or used in, the U.C.C. shall, unless the context indicates
otherwise, be used in this Agreement as defined or used in the U.C.C.
ARTICLE II
Interests in the Collateral
SECTION 2.1. Priorities. Notwithstanding the date or manner of, or
order of perfection of the Secured Parties' respective security interests in and
liens on the Collateral, and notwithstanding any provisions of the U.C.C., any
applicable law or decision, or any Applicable Agreement, or whether any Secured
Party has possession of all or any part of the Collateral, the following, as
between the Secured Parties, shall be the relative priority of the security
interests and liens of the Secured Parties in the Collateral:
(a) with respect to Fixed Assets Collateral, the Fixed Assets Secured
Parties' security interests in and liens on such Fixed Assets Collateral
shall be senior and prior to the Senior
-5-
6
Notes Secured Parties' security interest in and liens on such Fixed Assets
Collateral in all respects;
(b) with respect to the Parent Collateral and the Current Assets, the
Senior Notes Secured Parties shall have no right, title or interest of any
kind whatsoever in any such Parent Collateral or Current Assets; and
(c) with respect to Senior Notes Collateral, the Fixed Assets Secured
Parties shall have no right, title or interest of any kind whatsoever in any
such Senior Notes Collateral.
SECTION 2.2. Subordination. Each of the Senior Notes Secured Parties
agrees that its security interest in and liens on the Fixed Assets Collateral
shall be subordinated and junior in all respects to the Fixed Assets Secured
Parties' security interests in and liens on all such Fixed Assets Collateral.
ARTICLE III
Exercise of Remedies; Enforcement
SECTION 3.1. Enforcement Rights. (a) The Administrative Agent shall
have the sole and exclusive right to sell, transfer or otherwise dispose of the
Fixed Assets Collateral in any manner deemed necessary or appropriate by it
without regard to the security interest or liens of the Senior Notes Secured
Parties and without the Senior Notes Secured Parties' consent. The Trustee will,
immediately upon the sale, transfer or other disposition of all or any part of
the Fixed Assets Collateral by the Administrative Agent (including pursuant to
any disposition of any Fixed Assets Collateral permitted under the Credit
Agreement), release or otherwise terminate the security interests or liens of
the Senior Notes Secured Parties in all such Fixed Assets Collateral, and the
Trustee will immediately deliver U.C.C. termination statements (Form U.C.C.-3)
or such other instruments as may be suitable or appropriate in connection
therewith.
(b) The Senior Notes Secured Parties acknowledge and agree that, with
respect to any Enforcement commenced by the Administrative Agent in compliance
with the provisions hereof, (I) the Senior Notes Secured Parties shall have no
right to direct or participate in any aspect of such Enforcement, (ii) the time,
place and manner of any such Enforcement and the price at which any of the Fixed
Assets Collateral which is the subject of such Enforcement is liquidated, as
well as all other details of such Enforcement, shall be determined solely in the
discretion of the Administrative Agent, and (iii) the Senior Notes Secured
Parties shall have no claim or action against the Administrative Agent with
respect to any such Enforcement or with respect to the amount of Liquidation
Proceeds realized as a result of any such Enforcement; provided, that such
Enforcement complies, in all material respects with applicable law and the terms
of this Agreement and each of the Applicable Agreements.
(c) Each of the Senior Notes Secured Parties agrees that it shall not
contest or support any other Person in contesting in any proceeding (including,
in any bankruptcy, moratorium,
-6-
7
reorganization or other insolvency proceeding) the legality, validity, binding
effect, priority, enforceability or effectiveness of the Administrative Agent's
and the Fixed Assets Secured Parties' first-priority, perfected security
interest in and liens on any of the Fixed Assets Collateral.
(d) For the sole purpose of perfecting the Secured Parties' security
interest in and liens on the Fixed Assets Collateral pledged to the
Administrative Agent pursuant to the Obligor Pledge Agreement (the "Stock"), the
Administrative Agent shall maintain sole possession and control of such Stock
for the benefit of the Fixed Assets Secured Parties and as agent for the Senior
Notes Secured Parties. Nothing herein shall impose upon the Administrative Agent
any duty or liability to the Senior Notes Secured Parties other than the duties
expressly described in this clause (d) and Section 3.2. Upon the payment in cash
in full of the Fixed Assets Obligations and the permanent termination of the
Fixed Assets Loan Commitment, the Administrative Agent will deliver possession
of the Stock to the Trustee unless the Trustee has previously provided the
Administrative Agent with written notice that the Senior Notes Obligations have
been indefeasibly paid in full. In no event shall the Administrative Agent have
any liability to any Senior Notes Secured Party except for liability finally
determined by a court of competent jurisdiction to have resulted solely from the
Administrative Agent's gross negligence or willful misconduct.
(e) The Senior Notes Secured Parties understand and agree that, so long
as any Fixed Assets Obligations shall not have been paid in cash in full and
until all commitments to make Credit Extensions under the Credit Agreement and
the related Loan Documents shall have been fully and permanently terminated, the
Administrative Agent shall accept directions only from the Fixed Assets Secured
Parties.
SECTION 3.2. Allocation of Liquidation Proceeds from any Disposition of
Collateral. (a) Liquidation Proceeds derived from a disposition or collection of
Fixed Assets Collateral shall be paid to the Administrative Agent for
application, (i) first, to the Fixed Assets Obligations until the Fixed Assets
Obligations are paid in full in cash, (ii) second, if any Liquidation Proceeds
remain, to the Senior Notes Obligations, until the Senior Notes Obligations are
paid in full, and (iii) third, if any Liquidation Proceeds remain, to the
Borrowers or to such other Person which is entitled to such Liquidation Proceeds
pursuant to applicable law.
(b) Each of the Senior Notes Secured Parties agrees that if it receives
Liquidation Proceeds of Fixed Assets Collateral to which it is not entitled
pursuant to the terms of this Agreement, then such Senior Notes Secured Party
shall promptly remit such proceeds to the Administrative Agent for application
in accordance with clause (a) of this Section 3.2. For purposes of this Section
3.2, Liquidation Proceeds of Fixed Assets Collateral shall include proceeds of
Fixed Assets Collateral received by any party hereto from any source whatsoever,
including by means of setoff.
SECTION 3.3. Senior Notes Secured Parties' Remedies. Each Senior Notes
Secured Party agrees that it will not pursue any of the remedies provided under
applicable law for by the terms of any Senior Notes Document that arise as a
result of a default or event of default under such Senior Notes Document, unless
and until the Administrative Agent declares the Fixed Assets Obligations to be
due and payable or the Lenders and the Administrative Agent exercise their
remedies
-7-
8
(including foreclosure) under the Fixed Assets Security Document with respect to
the Fixed Assets Collateral.
SECTION 3.4. Extensions, Modifications, etc. Either of the Secured
Parties may, without affecting the validity of this Agreement, extend the times
of payment of any Indebtedness of any Borrower to such Secured Parties or modify
any of the terms and conditions of any Applicable Agreement or any other
document evidencing, securing or executed in connection with the Indebtedness
which is the subject of either the Credit Agreement or the Senior Secured Note
Indenture, as applicable, in any case in accordance with the Applicable
Agreements, without the consent of the other Secured Parties and without giving
notice thereof to the other Secured Parties.
SECTION 3.5. Reservation of Rights. Any failure on the part of either
of the Secured Parties to promptly exercise any right hereby given or reserved
or given or reserved in any other document to which such Secured Parties are
party or beneficiary shall not prevent the exercise of any such right at any
time thereafter. Subject to Sections 3.2 and 3.3, each of the Secured Parties
may pursue and enforce any remedy or remedies accorded herein independently of,
or in conjunction or concurrently with or subsequent to, its pursuit and
enforcement of any remedy or remedies which it may otherwise have against any
Borrower.
ARTICLE IV
Certain Restrictions and Agreements
SECTION 4.1. Marshaling; Foreclosure on Collateral. (a) Each of the
Senior Notes Secured Parties (i) acknowledges that the Fixed Assets Obligations
are secured by collateral other than the Fixed Assets Collateral, and (ii)
agrees that none of the Fixed Assets Secured Parties shall have any obligation
to xxxxxxxx the assets of any Borrower or any other Person in which it has a
security interest, before enforcing its rights in any Fixed Assets Collateral,
and the Senior Notes Secured Parties shall have no rights whatsoever hereunder
to share or participate in any proceeds of such other collateral.
(b) The Trustee agrees that it will not file any U.C.C. financing
statements (Form U.C.C.-1) or other similar financing statements or record any
mortgages or deed of trust with respect to any of the Fixed Assets Collateral
until such time as the Administrative Agent has filed its U.C.C. financing
statements (Form U.C.C.-1) or other similar financing statements and recorded
its mortgages with respect to such Fixed Assets Collateral and has notified the
Trustee of the completion of such filings and recordations.
SECTION 4.2. Accountings. At any time and from time to time after the
commencement of an Enforcement with respect to any Fixed Assets Collateral, the
Administrative Agent and the Trustee agree to provide to each other, upon
written request, information as to the outstanding amount of any of the
Obligations, the amount and identity of Liquidation Proceeds received by the
Administrative Agent in respect of any Fixed Assets Collateral from any third
Person and the
-8-
9
application thereof, and such other information relating to the Fixed Assets
Collateral as such party may reasonably request.
SECTION 4.3. Notices of Defaults. The Administrative Agent and the
Trustee each agree to give the other copies of any notice of the occurrence or
existence of a Default or Event of Default which the Administrative Agent or the
Trustee, as the case may be, sends to the Company, simultaneously with the
sending of such notice to the Company, but the failure to do so shall not affect
the validity of such notice or create a cause of action against the party
failing to give such notice or create any claim or right on behalf of any third
party. The sending of such notice shall not give the recipient the obligation to
cure such default.
SECTION 4.4. Insurance; Condemnation Proceeds. Notwithstanding anything
to the contrary herein, with respect to policies which insure the Fixed Assets
Collateral, if, pursuant to the Applicable Agreements, the Borrowers are is
required to obtain satisfactory loss payable endorsements naming the Fixed
Assets Secured Parties and the Senior Notes Secured Parties, as their interests
may appear, as loss payees, or with such other designation as the parties hereto
may agree, the Administrative Agent shall, subject to the Administrative Agent's
rights under the Applicable Agreements, have the sole exclusive right, as
against the Senior Notes Secured Parties, to effect settlement of such insurance
policy in the event of any loss to any Fixed Assets Collateral. All proceeds of
such policy shall be paid to the Administrative Agent (for its own account and
the account of the Fixed Assets Lenders). The Administrative Agent shall apply
the proceeds of such policy in accordance with clause (a) of Section 3.2.
SECTION 4.5. U.C.C. Notices. In the event the Administrative Agent
shall be required by the U.C.C. or any other applicable law to give notice to
the Trustee of an intended disposition of any portion of the Fixed Assets
Collateral, such notice shall be given in accordance with Section 5.2, and five
days' notice shall be deemed to be commercially reasonable. The execution of
this Agreement by each of the Administrative Agent, on behalf of the Fixed
Assets Secured Parties, and the Trustee, on behalf of the Senior Notes Secured
Parties, shall be deemed to be each Secured Parties' notice to the other of a
claim of an interest in the Fixed Assets Collateral for the purposes of Section
9-505 of the U.C.C.
SECTION 4.6. Assignment of Agreement or Claim. The Trustee hereto
agrees that it will not sell, transfer, assign or otherwise dispose of all or
any part of the Senior Notes Obligations, or any notes, instruments or
agreements evidencing such Senior Notes Obligations, or any of its interest in
any of the foregoing, unless, prior to any such sale, transfer, assignment or
other disposition, (i) such purchaser or transferee shall agree, in writing, to
be bound by the terms of this Agreement and (ii) any document, instrument or
agreement evidencing all or any part of the Senior Notes Obligations, is marked
with the following legend:
NOTICE: THIS INSTRUMENT IS SUBJECT TO THE TERMS OF A CERTAIN
INTERCREDITOR AGREEMENT, DATED AS OF JULY 23, 1999, BETWEEN XXXXXX
TRUST COMPANY OF NEW YORK, AS TRUSTEE AND HOLDERS REPRESENTATIVE ON
BEHALF OF ITSELF AND CERTAIN OTHER HOLDERS OF
-9-
10
THE SENIOR SECURED NOTES AND THE CIT GROUP/BUSINESS CREDIT, INC., AS
ADMINISTRATIVE AGENT ON BEHALF OF ITSELF AND THE LENDERS.
SECTION 4.7. Independent Credit Investigations. No party to this
Agreement, nor any directors, officers, agents or employees of any party to this
Agreement, shall be responsible to any other party to this Agreement or to any
other Person, for the Company's or the other Borrowers' solvency, financial
condition or ability to repay any of the Obligations, or any lien or security
interests granted by the Borrowers or Parent to either of the Secured Parties in
connection therewith. Each of the parties hereto has entered into its respective
financing agreements with the Borrowers based upon its own independent
investigation, and makes no warranty or representation to the others nor does it
rely upon any representation of any other party hereto with respect to matters
identified or referred to in this Section 4.7.
SECTION 4.8. Representations and Warranties of the Parties to Each
Other. Each party hereto warrants and represents to the other parties hereto
that:
(a) it has full right, power and authority to enter into this
Agreement;
(b) its execution and delivery of this Agreement does not and will not
constitute a breach of or default under any provision contained in its
certificate of incorporation, by-laws, certificate of formation and/or any
similar arrangements applicable to any of such party's capital, or any
agreement to which it is a party or by which it is bound;
(c) this Agreement, when executed and delivered by such party, shall
constitute the legal, valid and binding obligation of such party enforceable
against it in accordance with its terms (except as such enforceability may
be limited by applicable bankruptcy, insolvency, reorganization or similar
laws affecting creditors' rights generally and by principles of equity); and
(d) its execution and delivery hereof and performance hereunder does
not and will not violate any applicable law.
ARTICLE V
Miscellaneous
SECTION 5.1. Loan Documents. This Agreement does not modify the
respective duties and rights of the Administrative Agent and the Lenders to one
another under the Credit Agreement and the other Loan Documents.
SECTION 5.2. Notices. All notices, requests and other communications
provided to any party hereto under this Agreement shall be in writing or by
facsimile and addressed, delivered or transmitted
-10-
11
(a) If to the Administrative Agent:
The CIT Group/Business Credit, Inc.
Two Lincoln Center
0000 XXX Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: R. Xxxxx Xxxxx
Facsimile: 000-000-0000
(b) If to the Trustee:
Xxxxxx Trust Company of Xxx Xxxx
Xxxx Xxxxxx Xxxxx
00xx Xxxxx
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxx
Facsimile: (000) 000-0000
Any notice, if (i) (x) mailed and properly addressed with postage prepaid or (y)
properly addressed and sent by pre-paid courier service, shall be deemed given
when received, or (ii) transmitted by facsimile, shall be deemed given when
transmitted (and telephonic confirmation of receipt thereof has been received).
SECTION 5.3. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such provision and
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this Agreement
or affecting the validity or enforceability of such provision in any other
jurisdiction.
SECTION 5.4. Execution in Counterparts, Effectiveness, etc. This
Agreement may be executed by the parties hereto in several counterparts, each of
which shall be deemed to be an original (whether such counterpart is originally
executed or an electronic copy of an original and each party hereto expressly
waives its rights to receive originally executed documents) and all of which
shall constitute together but one and the same agreement. This Agreement shall
become effective as of the date first above written when counterparts hereof
executed on behalf of each of the parties hereto shall have been received by
each of the parties hereto.
SECTION 5.5. Successors and Assigns. This Agreement is a continuing
agreement of subordination and the Fixed Assets Secured Lenders may, from time
to time and without notice to the Senior Notes Secured Lenders, extend credit to
or make other financial arrangements with the Borrowers in reliance hereon. This
Agreement shall (a) remain in full force and effect until the Fixed Assets
Obligations shall have been paid in cash in full and all commitments to make
Credit Extensions thereunder have been permanently terminated, and
notwithstanding the occurrence of any insolvency event (it being understood and
agreed that the provisions of this Agreement shall continue in full force and
effect after the filing of any bankruptcy case and during the pendency of
-11-
12
any insolvency event), (b) be binding upon the Senior Notes Secured Parties, the
Borrowers, and their respective successors, transferees and assigns, and (c)
inure to the benefit of and be enforceable by the Administrative Agent and each
Fixed Assets Secured Party and their respective successors, transferees and
assigns. This Agreement shall be binding upon and shall inure to the benefit of
each of the Secured Parties and their respective successors and assigns. To the
extent the Credit Agreement is amended, supplemented, refinanced, amended and
restated or otherwise modified at any time, and/or the Fixed Assets Obligations
are refinanced, whether by the Administrative Agent, the Fixed Assets Lenders or
any unrelated third party, such refinancing indebtedness shall be entitled to
the benefits hereof and this Agreement shall continue in full force and effect
and shall inure to the benefit of each holder of such refinancing indebtedness
and each party serving in a representative or fiduciary capacity under the
documentation governing such refinancing indebtedness as if such refinancing
indebtedness were the Fixed Assets Obligations on the date hereof and the
holders, representatives and fiduciaries were the Fixed Assets Secured Parties
on the date hereof. To the extent that Senior Notes Obligations are refinanced,
such refinancing indebtedness shall be entitled to the benefits hereof and this
Agreement shall continue in full force and effect and shall inure to the benefit
of and be binding upon each holder of such refinanced indebtedness and each
party serving in a representative or fiduciary capacity under the documentation
governing such refinancing indebtedness as if such refinancing indebtedness were
the Senior Notes Obligations on the date hereof and such holders,
representatives and fiduciaries were the Senior Notes Secured Parties on the
date hereof. In the event that either the Fixed Assets Obligations or the Senior
Notes Obligations are refinanced, each of the parties agrees to execute any
amendment to this Agreement which is reasonably required in order to more
accurately describe such refinancing indebtedness, the holders thereof or the
representatives or fiduciaries thereunder or to otherwise give full effect to
the purpose and intent of this Section 5.5.
SECTION 5.6. Waivers, Amendment, etc. The provisions of this Agreement
may from time to time be amended, modified, or waived, if such amendment,
modification or waiver is in writing and consented to by each of the
Administrative Agent and the Trustee.
SECTION 5.7. Fees and Expenses. The Senior Notes Secured Parties agree
to pay, upon demand, to the Fixed Assets Secured Parties, any and all reasonable
costs and expenses, including reasonable attorneys' fees and disbursements,
which the Fixed Assets Secured Parties may incur in connection with the exercise
or enforcement of any of the rights or interest of the Fixed Assets Secured
Parties under this Agreement, by reason of (a) any breach by the Senior Notes
Secured Parties of any of its obligations or agreements hereunder, (b) the
taking of any actions by the Senior Notes Secured Parties challenging any of the
provisions hereof or which are inconsistent with the terms hereof and (c) the
failure of the Senior Notes Secured Parties to take any action required to be
taken by it or requested to be taken by it, in each case pursuant to the terms
of this Agreement, and the Borrowers, jointly and severally, agree to pay, upon
demand, to the Administrative Agent, any and all reasonable costs and expenses,
including reasonable attorneys' fees and disbursements, which the Administrative
Agent may incur in connection with the exercise or enforcement of rights or
interest of the Administrative Agent hereunder.
-12-
13
SECTION 5.8. Termination of Agreement. This Agreement shall be
effective and may not be terminated or otherwise revoked by any of the Secured
Parties or any of their respective successors and assigns until the Termination
Date.
SECTION 5.9. No Rights for Third Parties. THIS AGREEMENT CONSTITUTES AN
AGREEMENT AMONG AND FOR THE BENEFIT OF THE SECURED PARTIES ONLY, AND NOTHING
CONTAINED HEREIN SHALL CONFER OR BE DEEMED TO CREATE ANY RIGHTS OR BENEFITS FOR
THE BENEFIT OF ANY OTHER PARTY, AND ANY AMENDMENT, MODIFICATION OR WAIVER MAY BE
MADE TO THIS AGREEMENT WITHOUT CONSENT OF, OR NOTICE TO, ANY OTHER PARTY OTHER
THAN THE SENIOR NOTES SECURED PARTIES AND THE COMPANY. NO PARTY IS (OR SHALL BE
DEEMED TO BE) A THIRD PARTY BENEFICIARY UNDER THIS AGREEMENT.
SECTION 5.10. Governing Law. THIS AGREEMENT SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK,
EXCLUDING THE LAW OF CONFLICTS BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO
NATIONAL BANKS. This Agreement constitutes the entire understanding among the
parties hereto with respect to the subject matter hereof and supersedes any
prior agreements, written or oral, with respect thereto.
SECTION 5.11. Forum Selection and Consent to Jurisdiction. ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL
OR WRITTEN) OR ACTIONS OF ANY OF THE PARTIES HERETO THAT IS BROUGHT IN THE STATE
OF NEW YORK SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE
STATE OF NEW YORK LOCATED IN NEW YORK COUNTY OF THE STATE OF NEW YORK OR IN THE
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK; PROVIDED,
HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY FIXED ASSETS COLLATERAL
MAY BE BROUGHT, AT THE ADMINISTRATIVE AGENT'S OPTION, IN THE COURTS OF ANY
JURISDICTION WHERE SUCH FIXED ASSETS COLLATERAL MAY BE FOUND.
SECTION 5.12. Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION (WHETHER SOUNDING IN TORT, CONTRACT
OR OTHERWISE) BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH,
THIS AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
ORAL OR WRITTEN) OR ACTIONS OF EITHER OF THE PARTIES HERETO. EACH PARTY HERETO
ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION
FOR THIS PROVISION AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE
OTHER PARTY HERETO TO ENTER INTO THIS AGREEMENT.
-13-
14
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
THE CIT GROUP/BUSINESS CREDIT, INC.,
as Administrative Agent for the
Fixed Assets Secured Parties
By:
---------------------------------------
Printed Name:
-----------------------------
Title:
------------------------------------
XXXXXX TRUST COMPANY OF NEW YORK,
as Trustee and on behalf of the
Holders of the Senior Secured Notes
By:
---------------------------------------
Printed Name:
-----------------------------
Title:
------------------------------------
ACKNOWLEDGED AND AGREED TO
AS OF THE DATE FIRST ABOVE WRITTEN:
STERLING CHEMICALS, INC.,
on behalf of itself and each other Borrower
By:
---------------------------------------
Printed Name:
-----------------------------
Title:
------------------------------------
-14-
