SECOND AMENDMENT AND SUPPLEMENT TO
SECURITY AGREEMENT (PLEDGE)
THIS SECOND AMENDMENT AND SUPPLEMENT TO SECURITY AGREEMENT (PLEDGE) (this
"Second Amendment") is executed as of the 31st day of January, 1997, by and
between STERLING CHEMICALS HOLDINGS, INC. (formerly known as Sterling Chemicals,
Inc., survivor of merger between STX Acquisition Corp. ["STX Acquisition"] and
Sterling Chemicals, Inc.), a Delaware corporation, with its chief place of
business and its chief executive office located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ (hereinafter called "Pledgor"), and TEXAS
COMMERCE BANK NATIONAL ASSOCIATION ("TCB"), as Administrative Agent under the
hereinafter defined Credit Agreement (in such capacity, hereinafter called
"Secured Party") acting on behalf of itself, the Combined Lenders (hereinafter
defined), the Issuing Banks (as defined in the Credit Agreement), Affiliates of
the Combined Lenders to the extent provided in clause (h) of the definition of
"Obligations" referred to below, the AFB Administrative Agent (hereinafter
defined) and the Documentation Agents (as defined in the Guaranty Agreement),
with offices at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇;
W I T N E S S E T H:
WHEREAS, on June 21, 1996, STX CHEMICALS CORP. (now known as Sterling
Chemicals, Inc. and hereinafter called "STX"), Secured Party, Credit Suisse
First Boston, as documentation agent, each of the banks and other lending
institutions (collectively the "Original Lenders") party to the Credit Agreement
and the Issuing Banks entered into that certain Credit Agreement dated as of
June 21, 1996 (the "Original Credit Agreement," as amended by First Amendment to
Credit Agreement dated of even date herewith and as the same may from time to
time be further amended or supplemented, the "Credit Agreement"), whereby,
pursuant to which, upon the terms and conditions stated therein, the Original
Lenders agreed to make loans to and extensions of credit for the account of STX;
and
WHEREAS, to satisfy one of the terms of the Original Credit Agreement, STX
Acquisition executed that certain Security Agreement (Pledge) dated as of
August 21, 1996 (as amended and supplemented by First Amendment and Supplement
to Security Agreement dated as of August 21, 1996, the "Security Agreement"), in
favor of Secured Party, securing the payment of the Obligations (as defined in
the Security Agreement); and
WHEREAS, STX Acquisition has merged with and into Sterling Chemicals, Inc.,
and Sterling Chemicals, Inc. has changed its name to Sterling Chemicals
Holdings, Inc. pursuant to appropriate documents filed with the Secretary of
State of Delaware; and
WHEREAS, STX has changed its name to Sterling Chemicals, Inc. (hereinafter
called "Borrower"); and
WHEREAS, in connection with the AFB Acquisition (as defined in the Credit
Agreement), the Borrower, TCB, as administrative agent (the "AFB Administrative
Agent"), Credit Suisse First Boston, as documentation agent, and the AFB Lenders
(as defined in the Credit Agreement) have entered into that certain Credit
Agreement dated of even date herewith, whereby, pursuant to which, upon the
terms and conditions stated therein, the AFB Lenders have agreed to make loans
to the Borrower up to the aggregate principal amount of $81,000,000; and
WHEREAS, pursuant to the terms and conditions of that certain Intercreditor
Agreement dated of even date herewith (as the same may from time to time be
amended or supplemented, the "Intercreditor Agreement"), by and among the
Borrower, Secured Party, the AFB Administrative Agent, the Original Lenders and
the AFB Lenders (the Original Lenders and the AFB Lenders hereinafter
individually called a "Combined Lender" and collectively called the "Combined
Lenders"), Secured Party has agreed to act on behalf of itself, the Combined
Lenders , the Issuing Banks, the AFB Administrative Agent and the Documentation
Agents (the "Administrative Agent For Combined Lenders") for purposes of holding
and administering the liens and security interests securing the Obligations
(hereinafter defined); and
WHEREAS, Pledgor and Secured Party hereby desire to supplement and amend
the Security Agreement to reflect, among other things, the foregoing matters;
NOW, THEREFORE, for and in consideration of the premises and the agreements
herein contained, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Pledgor and Secured Party hereby
agree as follows:
1. (a) Certain terms which are defined and/or used in the Security
Agreement are hereby amended as follows:
(i) The term "Agreement," as defined in the Security Agreement, is
hereby amended to mean the Security Agreement, as amended and supplemented by
this Second Amendment and as the same may from time to time be further amended
or supplemented.
(ii) The term "Credit Agreement," as defined in the Security Agreement,
is hereby amended to mean the Original Credit Agreement, as amended by First
Amendment to Credit Agreement dated of even date herewith and as the same may
from time to time be further amended or supplemented.
(iii) The terms "Lender" or "Lenders," as used in the Security
Agreement, are hereby amended to mean a Combined Lender or the Combined
Lenders, as the case may be, unless the context thereof requires otherwise.
(iv) The term "Obligations," as defined in the Security Agreement, is
hereby amended in its entirety to read as follows:
"Obligations" means: (a) The payment and performance of all Lender
Indebtedness (as defined in the Credit Agreement) now or hereafter owing,
including, without limitation, such Lender Indebtedness arising out of,
pursuant to, or evidenced by (i) the Revolving Credit Notes in the
aggregate principal amount of $100,000,000, issued or to be issued by the
Borrower under the Credit Agreement, payable to the order of the respective
Revolving Credit Lenders and with final maturity on or before ▇▇▇▇▇ ▇▇,
▇▇▇▇, (▇▇) the Tranche A Term Notes in the aggregate principal amount of
$200,000,000, issued or to be issued by the Borrower under the Credit
Agreement, payable to the respective Tranche A Term Loan Lenders in
installments and as therein provided, with final maturity being ▇▇▇▇▇ ▇▇,
▇▇▇▇, (▇▇▇) the Tranche B Term Notes in the aggregate principal amount of
$150,000,000, issued or to be issued by the Borrower under the Credit
Agreement, payable to the respective Tranche B Term Loan Lenders in
installments and as therein provided, with final maturity being September
30, 2004, (iv) the ESOP Term Notes in the aggregate principal amount of
$6,500,000, issued or to be issued by the Borrower under the Credit
Agreement, payable to the
2
respective ESOP Term Loan Lenders in installments and as therein provided,
with final maturity being September 30, 2000 (the Revolving Credit Notes,
Tranche A Term Notes, Tranche B Term Notes and ESOP Term Notes hereinafter
collectively called the "Original Notes"), (v) any Letters of Credit issued
or to be issued by an Issuing Bank for the account of the Borrower and
described or referred to in the Credit Agreement, any letter of credit
agreement executed in connection therewith, and any and all renewals,
extensions, amendments and/or reissues of any such Letters of Credit and/or
letter of credit agreements executed in connection therewith, and (vi) any
and all other Financing Documents (as defined in the Credit Agreement) or
other documents executed in connection with or as security for the Credit
Agreement, the Original Notes and/or the aforesaid Letters of Credit and
letter of credit agreements executed in connection therewith;
(b) The payment and performance of all Lender Indebtedness (as defined
in the AFB Acquisition Credit Agreement) now or hereafter owing, including,
without limitation, such Lender Indebtedness arising out of, pursuant to,
or evidenced by (i) the AFB Tranche A Term Notes in the aggregate principal
amount of $31,000,000, issued or to be issued by the Borrower under the AFB
Acquisition Credit Agreement, payable to the respective AFB Tranche A Term
Loan Lenders in installments and as therein provided, with final maturity
being ▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇▇▇) the AFB Tranche B Term Notes in the aggregate
principal amount of $50,000,000, issued or to be issued by the Borrower
under the AFB Acquisition Credit Agreement, payable to the respective AFB
Tranche B Term Loan Lenders in installments and as therein provided, with
final maturity being September 30, 2004 (the Original Notes, AFB Tranche A
Term Notes and AFB Trance B Term Notes hereinafter collectively called the
"Notes"), and (iv) any and all other Financing Documents (as defined in the
AFB Acquisition Credit Agreement) or other documents executed in connection
with or as security for the AFB Acquisition Credit Agreement, the AFB
Tranche A Term Notes and/or AFB Tranche B Term Notes;
(c) Any and all renewals, extensions for any period, rearrangements,
replacements, substitutions, increases and/or modifications of any or all
of the Notes;
(d) The unpaid principal of and accrued interest on (including
interest accruing on or after the filing of any petition in bankruptcy, or
the commencement of any insolvency, reorganization or like proceeding,
relating to the Borrower, whether or not a claim for post-filing or post-
petition is allowed in such proceeding) the Notes;
(e) The performance by Pledgor of all the terms, agreements and
obligations of Pledgor pursuant to this Agreement, and the payment and
performance of all obligations of Pledgor, the Borrower or any other
Obligor arising out of, pursuant to, or incurred in connection with any
other Financing Document (as defined in the Credit Agreement and the AFB
Acquisition Credit Agreement) and any and all other instruments and
documents executed in connection therewith or pursuant thereto;
(f) The obligation of the Borrower to otherwise reimburse Secured
Party, the Documentation Agent, the Issuing Banks or any Lender, whether on
3
account of fees, indemnities, costs, taxes and expenses (including all
taxes, expenses and disbursements described in Sections 2.20 or 8.04 of the
Credit Agreement and the AFB Acquisition Credit Agreement) or otherwise;
(g) Any and all other sums payable to Secured Party, the Documentation
Agent, the Issuing Banks and/or any Lender under or in respect of any
Financing Document (as defined in the Credit Agreement and the AFB
Acquisition Credit Agreement); and
(h) Payment of and performance of any and all present or future
obligations of the Borrower according to the terms of any present or future
Hedge Agreement or any option with respect to any such transaction now
existing or hereafter entered into between the Borrower and Secured Party
or any Lender or any Affiliate of any Lender.
(v) The term "Secured Party," as defined in the Security Agreement, is
hereby amended to mean TCB, as Administrative Agent under the Credit Agreement,
acting on behalf of the Combined Lenders, the Issuing Banks and, to the extent
herein provided, Affiliates of the Combined Lenders.
(b) Section 2.02 is further amended and supplemented by adding thereto the
following new definitions to read in their entirety as follows:
"AFB Acquisition Credit Agreement" means that certain Credit Agreement
dated as of January 31, 1997, among the Borrower, TCB, as administrative
agent, Credit Suisse First Boston, as documentation agent, and each of the
lenders that is a signatory thereto or which becomes a party thereto as
provided in Section 8.07 thereof, as the same may from time to time be
amended or supplemented.
"AFB Tranche A Term Notes" means the Tranche A Term Notes defined and
described in the AFB Acquisition Credit Agreement.
"AFB Tranche B Term Notes" means the Tranche B Term Notes defined and
described in the AFB Acquisition Credit Agreement.
"Intercreditor Agreement" has the meaning assigned to that term in the
Second Amendment.
"Second Amendment" means that certain Second Amendment and Supplement
to Security Agreement (Pledge) dated as of January 31, 1997, by and between
Pledgor and Secured Party."
(c) All capitalized terms used but not defined in this Second Amendment
which are defined in the Security Agreement or the Credit Agreement shall have
the same meanings herein as therein unless the context otherwise requires.
2. Section 6.02 of the Security Agreement is hereby amended as follows:
(a) by deleting the term "Required Lenders" from the second line thereof
and substituting therefor the phrase "Combined Required Lenders (as defined in
the Intercreditor Agreement)";
4
(b) by deleting the term "Credit Agreement" from the third line thereof
and substituting therefor the phrase "Credit Agreement, the AFB Acquisition
Credit Agreement or the Intercreditor Agreement, as applicable"; and
(c) by deleting the term "Credit Agreement" from the first line of
subsection 6.02(a) and substituting therefor the phrase "Credit Agreement, the
AFB Acquisition Credit Agreement or the Intercreditor Agreement, as applicable."
3. On and after the date on which this Second Amendment becomes
effective, the terms "Security Agreement," "hereof," "herein," "hereunder" and
terms of like import, when used in the Security Agreement shall, except where
the context otherwise requires, refer to the Security Agreement, as amended and
supplemented hereby.
4. Except as amended and supplemented by this Second Amendment, the
Security Agreement shall remain in full force and effect and shall be fully
binding upon Pledgor. Pledgor hereby reaffirms all covenants, representations
and warranties made in the Security Agreement, as amended and supplemented
hereby.
5. This Second Amendment shall benefit and bind the parties hereto and
their respective assigns, successors and legal representatives.
6. The Security Agreement, as amended and supplemented hereby, is subject
to the terms and conditions of the Intercreditor Agreement.
5
WITNESS THE EXECUTION HEREOF as of the date first above written.
PLEDGOR: STERLING CHEMICALS HOLDINGS, INC.
(formerly known as Sterling Chemicals, Inc.,
survivor of merger between STX Acquisition
Corp. and Sterling Chemicals, Inc.)
By: /s/ ▇▇▇ ▇. ▇▇▇▇
----------------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇
Title: Vice President and Chief Financial
Officer
6
SECURED PARTY: TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, as Administrative Agent
By: /s/ P. ▇▇▇▇ ▇▇▇▇▇
-----------------------------------
Name: P. ▇▇▇▇ ▇▇▇▇▇
Title: Vice President
7