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EXHIBIT 4.7
PARENT PLEDGE AGREEMENT
THIS PARENT PLEDGE AGREEMENT (as amended, supplemented, amended and
restated or otherwise modified from time to time, this "Pledge Agreement"),
dated as of July 23, 1999, 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 Fixed Assets
Secured Parties.
W I T N E S S E T H:
WHEREAS, pursuant to a Revolving Credit Agreement, dated as of the date
hereof (together with all amendments, supplements, restatements and other
modifications, if any, from time to time thereafter made thereto, 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, (collectively, the "Borrowers"),
the various financial institutions as are, or may from time to time become,
parties thereto (the "Lenders"), DLJ Capital Funding, Inc., as the Syndication
Agent, Credit Suisse First Boston, as the Documentation Agent, and the
Administrative Agent, the Lenders and the Issuer have extended Fixed Asset Loan
Commitments to make Fixed Asset Loans to the Borrowers;
WHEREAS, the Pledgor owns 100% of the Capital Securities of the
Company;
WHEREAS, 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;
WHEREAS, the Pledgor has duly authorized the execution, delivery and
performance of this Pledge Agreement; and
WHEREAS, 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 Fixed Assets Lenders to make
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Loans (including the initial Fixed Assets Loans) to the Borrowers pursuant to
the Credit Agreement, the Pledgor and the Administrative Agent, for the ratable
benefit of each Fixed Assets Secured Party, agree as follows:
ARTICLE I
DEFINITIONS
SECTION I.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 the first recital.
"Collateral" is defined in Section 2.1.
"Company" is defined in the first recital.
"Credit Agreement" is defined in the first recital.
"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.
"Fixed Assets Termination Date" means the date on which all Fixed
Assets Obligations have been paid in full in cash, all Rate Protection
Agreements where the counterparty is a Fixed Assets Lender (or its Affiliate)
have been terminated and the Fixed Assets Loan Commitment shall have terminated.
"Lenders" is defined in the first recital.
"Pledge Agreement" is defined in the preamble.
"Pledged Property" means all Pledged Shares, all other pledged Capital
Securities, all other equity securities, all assignments of any amounts due or
to become due with respect
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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 each Person identified in Attachment 1
hereto as the issuer of the Pledged Shares identified opposite the name of such
Person.
"Pledged Shares" means the Capital Securities of any Pledged Share
Issuer in the amounts and percentages listed in Attachment 1 hereto.
"Pledgor" is defined in the preamble.
"Securities Act" is defined in clause (a) of Section 6.2.
SECTION I.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 I.3. U.C.C. Definitions. Unless otherwise defined herein or in
the Credit Agreement 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.
ARTICLE II
PLEDGE
SECTION II.1. Grant of Security Interest. The Pledgor hereby pledges,
hypothecates, assigns, charges, delivers and transfers to the Administrative
Agent, for the ratable benefit of each of the Fixed Assets Secured Parties, and
hereby grants to the Administrative Agent, for the ratable benefit of the Fixed
Assets Secured Parties, a continuing security interest in, all of the following
property (collectively, the "Collateral"):
(a) all issued and outstanding Capital Securities of each
Pledged Share Issuer identified in Attachment 1 hereto;
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(b) all other Pledged Shares issued from time to time;
(c) all other Pledged Property, whether now or hereafter
delivered to the Administrative Agent in connection with this Pledge
Agreement;
(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 II.2. Security for Fixed Assets Obligations. This Pledge
Agreement secures the payment in full and in cash of all Fixed Assets
Obligations.
SECTION II.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, 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 II.4. Dividends on Pledged Shares. In the event that any
Dividend is to be paid on any Pledged Share at a time when (x) no Default of the
nature referred to in Section 8.1.9 of the Credit Agreement has occurred and is
continuing, and (y) 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 II.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 Fixed 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 Fixed Assets
Secured Parties.
Without limiting the foregoing clause (c), any Fixed Assets Lender may assign or
otherwise transfer (in whole or in part) any Fixed Assets Loan Commitment or any
Fixed 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 Fixed 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 Fixed Assets Termination
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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 II.6. Waiver, etc. The Pledgor hereby waives promptness,
diligence, notice of acceptance and any other notice with respect to any of the
Fixed Assets Obligations and this Pledge Agreement and any requirement that any
Fixed 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 Fixed Assets Obligations of any Obligor, as the case may
be.
SECTION II.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 Fixed 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 Fixed 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 Fixed 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 Fixed Assets Obligation of the Pledgor or any other Obligor for any
reason (other than the repayment in full and in cash of all Fixed
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
Fixed Assets Obligation of the Pledgor, any other Obligor or otherwise,
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(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 Fixed 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 II.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
Fixed Assets Termination Date. Any amount paid to the Pledgor on account of any
payment made hereunder prior to the Fixed Assets Termination Date shall be held
in trust for the benefit of the Fixed Assets Secured Parties and shall
immediately be paid to the Administrative Agent for the ratable benefit of the
Fixed Assets Secured Parties, and credited and applied against the Fixed 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 Fixed Assets Secured Parties of all or
any part of the Fixed Assets Obligations, and
(b) the Fixed Assets Termination Date has occurred,
each Fixed Assets Secured Party agrees that, at the Pledgor's request, the
Administrative Agent, on behalf of the Fixed 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 Fixed Assets Obligations
resulting from such payment by the Pledgor. In furtherance of the foregoing,
prior to the Fixed 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 Fixed Assets Secured Party.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION III.1. Warranties, etc. The Pledgor represents and warrants
unto each Fixed 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 III.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 to own and hold
under lease its material property and to conduct its business substantially as
currently conducted by it.
SECTION III.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
(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 III.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 and the second priority Lien granted to the trustee under
the Senior Secured Discount Notes Indenture.
SECTION III.5. Valid Security Interest. The execution and delivery of
this Pledge Agreement creates a valid first-priority security interest in the
Collateral and (a) in the case of the Pledged Shares, upon the delivery of such
Collateral to the Administrative Agent, such security interest will be a valid
first-priority, perfected security interest in such Collateral; and (b) in the
case of all other Collateral, upon the filing of the U.C.C. financing statements
(Form U.C.C.-1) delivered by the Grantor to the Administrative agent with
respect to all such other Collateral, such security interest will constitute a
valid first-priority, perfected security interest. The Grantor has filed all
U.C.C. financing statements (Form U.C.C.-1) referred to
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above in the appropriate offices therefor (or has provided the Administrative
Agent with copies thereof suitable for filing in such offices) and has taken all
of the other actions referred to above necessary to create perfected and
first-priority security interests in the applicable Collateral.
SECTION III.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 non-assessable, and constitute all of the issued and
outstanding Capital Securities of each Pledged Share Issuer listed on Attachment
I hereto. The Pledgor has no Subsidiaries of which it directly owns any Capital
Securities other than the Pledged Share Issuers. All Pledged Shares are
certificated, and have been delivered to the Administrative Agent 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 III.7. Authorization, Approval, etc. No authorization or,
approval or other action by, and no notice to or filing with, any Governmental
Authority, regulatory body or other Person (other than 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 Administrative Agent on the books and records of the
Pledged Share Issuer prior to the exercise of such voting or other rights.
SECTION III.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.
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ARTICLE IV
COVENANTS
SECTION IV.1. Covenants. The Pledgor covenants and agrees that at all
times prior to the Fixed 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 IV.2. Maintenance of Existence; Compliance with Laws, etc. The
Pledgor will:tenance of Existence; Compliance with Laws, etc.
(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 IV.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 IV.4. Insurance. The Pledgor will:ance
(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
(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 IV.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 (and any refinancing
thereof on No Less Favorable Terms and Conditions), unless otherwise permitted
by the Credit Agreement or herein. Without limiting the generality
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of the immediately preceding sentence, the Pledgor will not 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 or 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. 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 IV.6. Protect Collateral; Further Assurances, etc. Except for
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 will permit any Pledged Share Issuer to issue any Capital Securities unless
the same are immediately delivered and pledged to the Administrative Agent
hereunder.
SECTION IV.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 the Pledged Share
Issuer to transfer any Pledged Shares or other
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Capital Securities constituting Collateral into the name of any nominee
designated by the Administrative Agent.
SECTION IV.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 IV.9. Voting Rights; Dividends, etc. The Pledgor agrees:
(a) if any Default of the nature referred to in Section 8.1.9
of the Credit Agreement or an 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 (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 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
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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 V.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, to take, upon the occurrence and during the continuance of any Event
of Default, 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, ▇▇▇ 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 V.2. Administrative Agent May Perform. If the Pledgor fails to
perform any agreement contained herein, the Administrative Agent may 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 V.3. Administrative Agent Has No Duty. The powers conferred on
the Administrative Agent hereunder are solely to protect its interest (on behalf
of the Fixed 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 V.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 VI.1. Certain Remedies. 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 VI.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;
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(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
(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 Fixed 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 VI.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 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 VI.4. Application of Proceeds. 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 Fixed 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 Fixed
Assets Termination Date, shall be paid over to the Pledgor or to whomsoever may
be lawfully entitled to receive such surplus.
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SECTION VI.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 wilful
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 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 VI.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 Fixed 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 Fixed 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 VII.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 VII.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
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(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 VII.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.
SECTION VII.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 VII.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 VII.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 VII.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 VII.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
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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.
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IN WITNESS WHEREOF, the parties hereto have caused this 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
to
Pledge Agreement
PLEDGOR: STERLING CHEMICAL HOLDINGS, INC.
Capital Securities
Pledged Shares --------------------------------------------
-------------- Authorized Outstanding % of Shares
Pledged Share Issuer Shares Shares Pledged
-------------------- ---------- ----------- -----------
Sterling Chemicals, Inc. 1000 1000 100%