EXHIBIT 10.8
PLEDGE AGREEMENT dated as of
the Closing Date (as defined herein),
between the pledgor set forth on the
signature page hereto (the "Pledgor"),
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and RESOLUTION PERFORMANCE PRODUCTS LLC,
a Delaware limited liability company
(the "Company").
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The Pledgor and Resolution Performance Products Inc., a Delaware
corporation and the Company's corporate parent ("RPP Inc."), are parties to (i)
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a Participation Agreement, dated as of the date hereof, pursuant to which the
Pledgor purchased that number of shares of Common Stock, $1.00 par value, of RPP
Inc. set forth on the signature page hereto (the "Pledged Shares"), for the per
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share purchase price set forth on the signature page hereto and certain Junior
Subordinated Notes, dated as of the date hereof, with an aggregate initial
principal amount set forth on the signature page hereto (the "Pledged Notes"),
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for the per note purchase price set forth on the signature page hereto; and (ii)
a Non-Qualified Stock Option Agreement, dated as of the date hereof, pursuant to
which the Pledgor is receiving options to purchase that amount of shares of
Common Stock, $1.00 par value, of RPP Inc. set forth on the signature page
hereto (the "Pledged Options"), for the per option exercise price set forth on
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the signature page hereto. The Pledgor shall also pledge hereunder the shares
received by the Pledgor upon exercise of any options granted to such Pledgor by
the Company (the "Pledged Option Shares"), which initial amount is set forth on
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the signature page hereto. The Pledgor shall pledge hereunder the Pledged
Shares, the Pledged Notes, the Pledged Options, and the Pledged Option Shares.
As used herein, the Pledged Shares, the Pledged Notes, the Pledged Options and
the Pledged Option Shares shall be referred to collectively as the "Pledged
Securities." This Pledge Agreement provides the terms and conditions upon which
a Promissory Note executed by the Pledgor in favor of the Company (the "Note")
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in partial payment for the purchase price of the Pledged Securities is secured
by a pledge to the Company of the Pledged Securities. As used herein, the
"Closing Date" means the date of the closing of the transactions contemplated by
the Master Sale Agreement, dated July 10, 2000, among Shell Oil Company, RPP
Inc., Resin Acquisition, LLC and RPP Holdings LLC (as assignee of Resin
Acquisition, LLC).
NOW, THEREFORE, in consideration of the promises contained herein and other
good and valuable consideration the receipt and sufficiency of which are hereby
acknowledged, and in order to induce the Company to accept the Note as payment
for the Pledged Securities, the Pledgor and the Company hereby agree as follows:
SECTION 1. PLEDGE.
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The Pledgor hereby pledges to the Company, and grants to the Company a
security interest in, the Pledged Securities as security for the prompt and
complete payment when due of the unpaid principal and of interest on the Note.
SECTION 2. DELIVERY OF PLEDGED SECURITIES.
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Upon the execution of this Pledge Agreement, the Pledgor shall deliver to
the Company the certificates representing the Pledged Securities, together with
duly executed forms of assignment sufficient to transfer title thereto to the
Company. Upon the exercise of any
Pledged Option, in lieu of delivering certificates to the Pledgor, the Company
will retain the certificates and such certificates will be subject to this
Pledge Agreement.
SECTION 3. VOTING RIGHTS; CASH DISTRIBUTIONS.
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Notwithstanding anything to the contrary contained herein, during the term
of this Pledge Agreement until such time as there exists a default in the
payment of principal or interest on the Note or any other default under the
Note, the Pledgor shall be entitled to all voting rights with respect to the
Pledged Securities and shall be entitled to receive all cash distributions paid
in respect of the Pledged Securities. Upon the occurrence of and during the
continuance of any such default, the Company shall retain all such cash
distributions payable on the Pledged Securities as additional security
hereunder.
SECTION 4. STOCK DIVIDENDS; DISTRIBUTIONS ETC.
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If, while this Pledge Agreement is in effect, the Pledgor becomes entitled
to receive or receives any securities or other property in addition to, in
substitution of, or in exchange for any of the Pledged Securities (whether as a
distribution in connection with any recapitalization, reorganization or
reclassification, distributions or otherwise), the Pledgor shall accept such
securities or other property on behalf of and for the benefit of the Company as
additional security for the Pledgor's obligations under the Note and shall
promptly deliver such additional security to the Company together with duly
executed forms of assignment, and such additional security shall be deemed to be
part of the Pledged Securities hereunder.
SECTION 5. DEFAULT.
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If the Pledgor defaults in the payment of the principal or interest under
the Note as it becomes due (whether upon demand, acceleration or otherwise) or
any other event of default under the Note occurs and has not been remedied
within the 10 day period provided in Section 3(a)(i) of the Note (including the
bankruptcy or insolvency of the Pledgor) (each such occurrence shall be deemed a
"Default"), the Company may exercise any and all of the rights, powers and
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remedies of an owner of the Pledged Securities (including the right to vote the
shares and receive dividends and distributions with respect to such shares) and
shall have and may exercise without demand any and all the rights and remedies
granted to a secured party upon default under the Uniform Commercial Code of the
State of New York or otherwise available to the Company under applicable law.
Without limiting the foregoing, if the Pledgor Defaults, the Company is
authorized to sell, assign and deliver at its discretion, from time to time, all
or any part of the Pledged Securities at any private sale or public auction, on
not less than ten days written notice to the Pledgor, at such price or prices
and upon such terms as the Company may deem advisable. The Pledgor shall have
no right to redeem the Pledged Securities after any such sale or assignment. At
any such sale or auction, the Company or any other holder of shares of the
Company may bid for, and become the purchaser of, the whole or any part of the
Pledged Securities offered for sale. In case of any such sale, after deducting
the costs, attorneys' fees and other expenses of sale and delivery, the
remaining proceeds of such sale shall be applied to the principal of and accrued
interest on the Note; provided, however, that after payment in full of the
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indebtedness evidenced by the Note, the balance of the proceeds of sale then
remaining shall be
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paid to the Pledgor and the Pledgor shall be entitled to the return of any of
the Pledged Securities remaining in the hands of the Company.
SECTION 6. COSTS AND ATTORNEYS' FEES.
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All costs and expenses, including reasonable attorneys' fees, incurred in
exercising any right, power or remedy conferred by this Pledge Agreement or in
the enforcement thereof, shall become part of the indebtedness secured hereunder
and shall be paid by the Pledgor or repaid from the proceeds of the sale of the
Pledged Securities hereunder.
SECTION 7. PAYMENT OF INDEBTEDNESS AND RELEASE OF PLEDGED SECURITIES.
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Upon payment in full of the indebtedness evidenced by the Note, the Company
shall surrender the Pledged Securities to the Pledgor together with all forms of
assignment.
SECTION 8. FURTHER ASSURANCES.
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The Pledgor agrees that at any time and from time to time upon the written
request of the Company, the Pledgor will execute and deliver such further
documents and do such further acts and things as the Company may reasonably
request in order to effect the purposes of this Pledge Agreement.
SECTION 9. SEVERABILITY.
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Any provision of this Pledge Agreement which is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
SECTION 10. NO WAIVER; CUMULATIVE REMEDIES.
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The Company shall not by any act, delay, omission or otherwise be deemed to
have waived any of its rights or remedies hereunder, and no waiver shall be
valid unless in writing, signed by the Company, and then only to the extent
therein set forth. A waiver by the Company of any right or remedy hereunder on
any one occasion shall not be construed as a bar to any right or remedy which
the Company would otherwise have on any future occasion. No failure to exercise
nor any delay in exercising on the part of the Company, any right, power or
privilege hereunder shall preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided are cumulative and may be exercised singly or concurrently, and are not
exclusive of any rights or remedies provided by law.
SECTION 11. WAIVERS, AMENDMENTS; APPLICABLE LAW.
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This Pledge Agreement sets forth the entire agreement of the parties hereto
as to the subject matter hereof and supersedes all previous agreements between
the parties hereto, whether written, oral or otherwise. None of the terms or
provisions of this Pledge Agreement
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may be waived, altered, modified or amended except by an instrument in writing,
duly executed by the parties hereto. This Pledge Agreement and all obligations
of the Pledgor hereunder shall together with the rights and remedies of the
Company hereunder, inure to the benefit of the Company and its successors and
assigns. This Pledge Agreement and the rights and obligations hereunder shall be
governed by, and construed in accordance with, the laws of the State of New
York.
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IN WITNESS WHEREOF, this Pledge Agreement has been executed as of the date
first above written.
/s/ Dany Subrata
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Dany Subrata
RESOLUTION PERFORMANCE PRODUCTS LLC
By: /s/ David T. Preston
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Name: David T. Preston
Title: President
Number of Pledged Shares: 600/1/
Per Share Price of
Pledged Shares: $100
Aggregate Initial Principal
Amount of Pledged Notes: $140,000/2/
Per Note Price of
Pledged Notes: $1,000
Initial Number of Shares of
Common Stock for
Pledged Options: 900
Option Price for Options: $100
Number of Pledged
Option Shares: 900
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/1/ Differs from term sheet (450)
/2/ Differs from term sheet ($105k)