EXHIBIT 10.34
THE STERLING GROUP
THE STERLING GROUP, INC.
EIGHT XXXXXXXX XXXXX, XXXXX 000
XXXXXXX, XXXXX 00000
000-000-0000
FAX 000-000-0000
April 23, 1996
STX Acquisition Corp.
c/o The Sterling Group, Inc.
0 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Ladies and Gentlemen:
This letter agreement will confirm the agreement between The Sterling
Group, Inc. ("TSG") and STX Acquisition Corp. and STX Chemical Corp. and their
respective present and future direct and indirect wholly-owned subsidiaries
(collectively, the "Companies" and individually, a "Company"), in connection
with STX Acquisition Corp.'s merger with Sterling Chemicals, Inc. (the
"Merger"), as follows:
1. Services. TSG has provided or will provide consulting services to the
Companies in connection with the organization of the Companies, structuring the
Merger, the financing and refinancing thereof, arrangements for outside
consulting services, advice with respect to employee benefit and compensation
arrangements and other reasonable assistance when and as requested by the
Companies.
2. Fee and Expenses. For its services in connection with the Merger, TSG will
be entitled to receive from STX Acquisition Corp. and STX Chemical Corp. at the
consummation of the Merger a fee in the amount of Eight Million Seventy Three
Thousand Dollars ($8,073,000) and reimbursement of all expenses paid or incurred
(including expenses of The Unicorn Group and any other consultant) by TSG in
connection therewith.
3. Indemnification. The Companies, jointly and severally, agree to indemnify
and hold harmless TSG, its consultants, each of their respective controlling
persons and each director, officer, employee, principal, consultant, affiliate
and agent thereof (each an "Indemnified Person") from and against any and all
losses, claims, damages and liabilities, joint or several, to which any
Indemnified Person may become subject relating to or arising out of, or in
connection with, any advice or services provided under this Agreement or the
transactions contemplated by this Agreement, the Merger (including, without
limitation, the use of proceeds from the sale of securities and the financing of
the Merger) or any related transaction (including without limitation, that
certain letter agreement among TSG, Chase Securities Inc., Texas Commerce Bank
National Association, and Credit Suisse dated April 23, 1996 and that certain
letter agreement among TSG, CS First Boston, and The Unicorn Group dated October
9, 1995, and the transactions
The Sterling Group, Inc.
April 23, 1996
Page 2
contemplated thereby), and to reimburse each Indemnified Person, promptly upon
demand, for expenses (including reasonable counsel fees and expenses) as they
are incurred in connection with the investigation of, giving testimony or
furnishing documents for, preparation for or defense of any pending or
threatened loss, claim, damage or liability, or any litigation, proceeding or
other action in respect thereof (collectively, "Actions"), including any amount
paid in settlement of any litigation, proceeding or other action (commenced or
threatened), to which the Companies shall have consented in writing (such
consent not to be unreasonably withheld), whether or not any Indemnified Person
is a party and whether or not liability resulted therefrom; provided, however,
that the indemnity contained in this Agreement will not apply to any Indemnified
Person with respect to losses, claims, damages, liabilities or related expenses
that are found in a final judgment by a court of competent jurisdiction (not
subject to further appeal) to have resulted from the willful misconduct or gross
negligence of such Indemnified Person. In addition, the Companies will not,
without prior written consent of TSG, settle, compromise or consent to the entry
of any judgment in or otherwise seek to terminate any pending or threatened
Action in respect of which indemnification or contribution may be sought
hereunder (whether or not any Indemnified Person is a party thereto) unless such
settlement, compromise, consent or termination includes an unconditional release
of each Indemnified Person from all liabilities arising out of such Action.
Promptly after receipt by an Indemnified Person of written notice with respect
to the commencement of any investigation, claim or other Action with respect to
which such Indemnified Person may seek indemnification hereunder, such
Indemnified Person shall notify the Companies in writing at the address set
forth on the first page hereof of such Action; but the omission so to notify the
Companies shall not relieve the Companies from any liability that the Companies
may have hereunder to such Indemnified Person to the extent that such omission
does not materially prejudice or materially adversely affect the Companies. The
Indemnified Persons shall be entitled to retain separate counsel of their own
choice; provided that the Companies shall not be responsible for the fees and
expenses of more than one firm of attorneys (and local counsel, if appropriate)
for all of the Indemnified Persons in any single Action, unless the Indemnified
Persons shall have been advised that there may be one or more legal defenses
available to any of them that may be different from or additional to those
available to the others, in which event each such Indemnified Person shall be
entitled to separate counsel at the expense of the Companies.
If indemnification is found in a final judgment by a court of competent
jurisdiction (not subject to further appeal) for reason of public policy not to
be available, the Companies and TSG agree to contribute to the losses, claims,
damages, liabilities or expenses (or actions in respect thereof) for which such
indemnification is held unavailable in such proportion as is appropriate to
reflect the relative benefits to and fault of the Companies, on the one hand,
and TSG, on the other hand, in connection with the matter giving rise to such
losses, claims, damages, liabilities or expenses (or actions in respect
thereof). Notwithstanding the foregoing, TSG shall not be obligated to
contribute any amount hereunder that exceeds the fees and expenses received by
TSG hereunder. No person found liable for a fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act of 1933, as amended)
shall be entitled to contribution from any person who is not found liable for
such fraudulent misrepresentation.
The Sterling Group, Inc.
April 23, 1996
Page 3
The Companies also agree, jointly and severally, that no Indemnified Person
shall have any liability (whether direct or indirect, in contract or tort or
otherwise) to the Companies for or in connection with advice or services
rendered or to be rendered by any Indemnified Person pursuant to this Agreement,
the Merger, the financing thereof, the transactions contemplated thereby or any
Indemnified Person's actions or inactions in connection with any such advice,
services or transactions except for liabilities that are determined by a
judgment of a court of competent jurisdiction (not subject to further appeal) to
have resulted from such Indemnified Person's gross negligence or willful
misconduct in connection with any such advice, actions, inactions or services.
If any term, provision, covenant or restriction contained in this Section is
held by a court of competent jurisdiction or other authority to be invalid,
void, unenforceable or against public policy, the remainder of the terms,
provisions, covenants and restrictions contained in the Agreement shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated.
The provisions contained in this Section 3 shall remain in full force and effect
(i) whether or not any of the transactions contemplated hereby are consummated,
(ii) regardless of the termination or completion of any Indemnified Person's
services hereunder, (iii) notwithstanding the termination of this agreement and
(iv) notwithstanding any investigation made by or on behalf of TSG or any
Indemnified Person.
4. Future Services. The Companies also agree, jointly and severally, that if
either of the Companies or any of their respective direct or indirect
subsidiaries determines, within 24 months after the date hereof, to dispose of
or acquire any assets or businesses, the Companies will, or will cause such
entity to, retain TSG as a consultant with respect thereto, provided that TSG's
fees with respect thereto are competitive and the Companies and TSG mutually
agree on the terms of such retention. If, within 24 months after the date
hereof, either of the Companies or any of their respective subsidiaries
determines to offer securities for sale to the public or in a private placement
or to raise any debt or equity financing, the Companies will, or will cause such
entity to, retain TSG as a consultant with respect thereto, provided that TSG's
fees with respect thereto are competitive and the Companies and TSG mutually
agree on the terms of such retention.
5. Governing Law. This Agreement shall be governed by, and constructed in
accordance with, the laws of the State of Texas, without giving effect to choice
of law doctrines requiring the application of laws of any other jurisdiction.
If the foregoing meets with your approval and correctly expresses our agreement,
please sign and return the enclosed duplicate copy of this letter.
Very truly yours,
THE STERLING GROUP, INC.
By: /s/ Xxxxxx Xxxxxx
-----------------------------
Name: Xxxxxx Xxxxxx
Title: Principal
The Sterling Group, Inc.
April 23, 1996
Page 4
ACKNOWLEDGED AND AGREED:
STX ACQUISITION CORP.
By: /s/ Xxxxxx Xxxxxx
--------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President
STX CHEMICAL CORP.
By: /s/ Xxxxxx Xxxxxx
--------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President
