EXHIBIT 4.1
WARRANT AGREEMENT
between
STERLING CHEMICALS HOLDINGS, INC.
and
XXXXXX TRUST AND SAVINGS BANK
Warrant Agent
Dated as of July 10, 1997
TABLE OF CONTENTS
Page
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ARTICLE I CERTAIN DEFINITIONS................................. 1
ARTICLE II ORIGINAL ISSUE OF WARRANTS.......................... 3
Section 2.1. Issuance of Warrants; Form of Warrant Certificates.. 3
Section 2.2. Legends............................................. 3
Section 2.3. Execution and Delivery of Warrant Certificates...... 3
Section 2.4. Transfer and Exchange............................... 4
Section 2.5. Surrender of Warrant Certificates................... 4
ARTICLE III EXERCISE PRICE; EXERCISE OF WARRANTS................ 5
Section 3.1. Exercise Price...................................... 5
Section 3.2. Exercise; Restrictions on Exercise.................. 5
Section 3.3. Method of Exercise; Payment of Exercise Price....... 5
ARTICLE IV ADJUSTMENTS......................................... 6
Section 4.1. Adjustments......................................... 6
Section 4.2. Notice of Adjustment................................ 11
Section 4.3. Statement on Warrants............................... 12
Section 4.4. Notice of Consolidation, Merger, Etc................ 12
Section 4.5. Fractional Interests................................ 12
ARTICLE V LOSS OR MUTILATION.................................. 13
ARTICLE VI AUTHORIZATION AND RESERVATION OF COMMON STOCK;
PURCHASE OF WARRANTS............................... 13
Section 6.1. Reservation of Authorized Common Stock.............. 13
Section 6.2. Purchase of Warrants by Holdings.................... 13
ARTICLE VII WARRANT HOLDERS..................................... 14
ARTICLE VIII THE WARRANT AGENT................................... 14
Section 8.1. Duties and Liabilities.............................. 14
Section 8.2. Right to Consult Counsel............................ 16
Section 8.3. No Restrictions on Actions.......................... 16
Section 8.4. Change of Warrant Agent............................. 16
Section 8.5. Successor Warrant Agent............................. 17
ARTICLE IX MISCELLANEOUS....................................... 17
Section 9.1. Money Deposited with the Warrant Agent.............. 17
Section 9.2. Payment of Taxes.................................... 18
Section 9.3. Merger, Consolidation or Sale of Assets of Holdings. 18
Section 9.4. Reports to Holders.................................. 18
Section 9.5. Notices............................................. 18
Section 9.6. Governing Law....................................... 19
Section 9.7. Binding Effect...................................... 19
Section 9.8. Counterparts........................................ 19
Section 9.9. Amendments.......................................... 19
Section 9.10. Headings............................................ 19
Section 9.11. Common Stock Legend................................. 20
Section 9.12. Third Party Beneficiaries........................... 20
EXHIBIT A Form of Warrant Certificate...................................... A-1
WARRANT AGREEMENT
WARRANT AGREEMENT, dated as of July 10, 1997 (this "Agreement"),
between STERLING CHEMICALS HOLDINGS, INC., a Delaware corporation ("Holdings"),
and XXXXXX TRUST AND SAVINGS BANK as warrant agent (the "Warrant Agent").
In connection with the issuance and sale by Holdings of its Series B
Cumulative Redeemable Preferred Stock (the "Series B Preferred Stock") pursuant
to a Stock and Warrant Purchase Agreement (the "Purchase Agreement"), dated July
7, 1997 among Holdings, Sterling Chemicals Acquisitions, Inc., Olympus Growth
Fund II, L.P., Olympus Executive Fund, L.P., Clipper Capital Associates, L.P.,
Clipper/Merchant Partners, L.P., Clipper/Merban, L.P., Clipper Equity Partners
I, L.P., Clipper/European Re, L.P., Chase Equity Associates, L.P., Xxxx Capital
Services, Inc. and the CIT Group/Equity Investments, Inc. (each a "Purchaser"
and collectively, the "Purchasers"), Holdings has agreed to issue and sell to
the Purchasers warrants (each, a "Warrant") entitling the holders thereof to
purchase an aggregate of 201,048 shares of common stock, par value $.01 per
share, of Holdings (subject to adjustment as provided herein) at a price of $.01
per share.
In consideration of the foregoing and of the agreements contained in
the Purchase Agreement and for the purpose of defining the terms and provisions
of the Warrants and the respective rights and obligations thereunder of
Holdings, the Warrant Agent and the record holders of the Warrants (the
"Holders"), Holdings and the Warrant Agent hereby agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
"Affiliate" of any Person means any Person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such Person. For purposes of this definition, "control," when used with respect
to any Person, means the power to direct the management and policies of such
Person, whether though the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Business Day" means any day which is not a Saturday, a Sunday, or any
other day on which banking institutions are authorized or required to be closed
in the State of New York or the state in which the principal corporate trust
office of the Warrant Agent is located.
"Closing Date" means July 10, 1997 or such other date as the
Purchasers and Sterling Chemicals Acquisitions, Inc. may agree.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the common stock, par value $0.01 per share, of
Holdings, including any other capital stock into which such common stock may be
converted or reclassified or that may be issued in respect of, in exchange for,
or in substitution of, such common stock for reason of any stock splits, stock
dividends, distributions, mergers, consolidations or other like events.
"Current Market Value" has the meaning specified in Section 4.1(f)
hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exercise Price" has the meaning specified in Section 3.1 hereof.
"Expiration Date" means December 1, 2007.
"Holders" has the meaning specified in the recitals to this Agreement.
"Holdings" has the meaning specified in the preamble to this Agreement
and shall include its successors.
"Independent Financial Expert" means a nationally recognized
investment banking firm or appraisal firm which is not an Affiliate of Holdings.
The Independent Financial Expert may be compensated and indemnified by Holdings
for opinions or services it provides as an Independent Financial Expert.
"Person" means any individual, limited liability company, corporation,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof or any other entity.
"Purchase Agreement" has the meaning specified in the preamble to this
Agreement, as amended or supplemented from time to time.
"Purchaser" and "Purchasers" have the meanings specified in the
preamble to this Agreement and shall include its or their successors,
respectively.
"Right" means any right, option, warrant or convertible or
exchangeable security containing the right to subscribe for or acquire one or
more shares of Common Stock, excluding the Warrants.
"Securities Act" means the Securities Act of 1933, as amended.
"Spread" means, with respect to any Warrant, the Current Market Value
of the Underlying Securities issuable upon exercise of such Warrant adjusted as
provided herein, less the Exercise Price of such Warrant.
"Underlying Securities" means the shares of Common Stock or other
securities or property issuable upon exercise of the Warrants.
"Value Report" has the meaning specified in Section 4.1(j) hereof.
"Warrant" has the meaning specified in the recitals to this Agreement.
"Warrant Agent" has the meaning specified in the preamble to this
Agreement and shall include its successors.
"Warrant Certificates" has the meaning specified in Section 2.1
hereof.
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ARTICLE II
ORIGINAL ISSUE OF WARRANTS
Section II.1. Issuance of Warrants; Form of Warrant Certificates. The
Warrants shall be issued in connection with the issuance of the Series B
Preferred Stock and shall at all times be separately transferable from the
Series B Preferred Stock. Certificates representing the Warrants (the "Warrant
Certificates") shall be issued in registered form only, shall be substantially
in the form attached hereto as Exhibit A, shall be dated the date on which
countersigned by the Warrant Agent and shall have such insertions as are
appropriate or required or permitted by this Agreement and may have such
letters, numbers or other marks of identification and such legends and
endorsements stamped, printed, lithographed or engraved thereon as Holdings may
deem appropriate and as are not inconsistent with the provisions of this
Agreement, or as may be required to comply with any applicable law, rule or
regulation, or to conform to usage. The definitive Warrant Certificates shall be
typed, printed, lithographed or engraved or produced by any combination of these
methods or may be produced in any other manner permitted by applicable law,
rules and regulations, all as determined by the officers executing such Warrant
Certificates, as evidenced by their execution of such Warrant Certificates.
Section II.2. Legends. Each Warrant shall bear the following legend:
THE COMMON STOCK, PAR VALUE $.01 PER SHARE, OF HOLDINGS (THE "COMMON
STOCK") FOR WHICH THIS WARRANT IS EXERCISABLE MAY NOT BE OFFERED OR SOLD IN
THE UNITED STATES ABSENT REGISTRATION UNDER THE SECURITIES AND EXCHANGE ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT") AND ANY APPLICABLE STATE
SECURITIES LAWS OR AN APPLICABLE EXEMPTION FROM SUCH REGISTRATION
REQUIREMENTS. ACCORDINGLY, NO HOLDER SHALL BE ENTITLED TO EXERCISE SUCH
HOLDER'S WARRANTS AT ANY TIME UNLESS, AT THE TIME OF EXERCISE, (i) A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT RELATING TO THE SHARES OF
COMMON STOCK ISSUABLE UPON THE EXERCISE OF THIS WARRANT HAS BEEN FILED
WITH, AND DECLARED EFFECTIVE BY, THE SECURITIES AND EXCHANGE COMMISSION
(THE "COMMISSION"), AND NO STOP ORDER SUSPENDING THE EFFECTIVENESS OF SUCH
REGISTRATION STATEMENT HAS BEEN ISSUED BY THE COMMISSION, OR (ii) THE
ISSUANCE OF SUCH SHARES IS PERMITTED PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ANY APPLICABLE STATE
SECURITIES LAWS.
Section II.3. Execution and Delivery of Warrant Certificates. Warrant
Certificates evidencing Warrants to purchase initially an aggregate of up to
201,048 shares of Common Stock may be executed, on or after the date of this
Agreement, by Holdings and delivered to the Warrant Agent for countersignature,
and the Warrant Agent shall thereupon countersign and deliver such Warrant
Certificates, at the expense of Holdings, upon the written order and at the
direction of Holdings to the purchasers thereof on the date of issuance. The
Warrant Agent is hereby authorized to countersign and deliver Warrant
Certificates as required by this Section 2.3 or
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by Section 2.4, Section 3.3, Section 3.4 or Article V hereof.
The Warrant Certificates shall be executed on behalf of Holdings by
its Chairman of the Board, Chief Executive Officer or President or by a Vice
President, either manually or by facsimile signature printed thereon. The
Warrant Certificates shall be countersigned by manual or facsimile signature of
the Warrant Agent and shall not be valid for any purpose unless so
countersigned. In case any officer of Holdings whose signature shall have been
placed upon any of the Warrant Certificates shall cease to be an officer of
Holdings before countersignature by the Warrant Agent and the issuance and
delivery thereof, such Warrant Certificates may, nevertheless, be countersigned
by the Warrant Agent and issued and delivered with the same force and effect as
though such person had not ceased to be such officer of Holdings.
Section II.4. Transfer and Exchange. Holdings shall cause to be kept
at the office of the Warrant Agent a register in which, subject to such
reasonable regulations as it may prescribe, Holdings shall provide for the
registration of Warrant Certificates and transfers and exchanges of Warrant
Certificates as provided in this Agreement.
A Holder may transfer its Warrants only by written application to the
Warrant Agent stating the name of the proposed Transferee and otherwise
complying with the terms of this Agreement. No such transfer shall be effected
until, and such Transferee shall succeed to the rights of a Holder only upon,
final acceptance and registration of the transfer by the Warrant Agent in the
register in accordance with this Agreement. Prior to the registration of any
transfer of Warrants by a Holder as provided herein, Holdings, the Warrant Agent
and any agent of Holdings may treat the person in whose name the Warrants are
registered as the owner thereof for all purposes and as the person entitled to
exercise the rights represented thereby, any notice to the contrary
notwithstanding. When Warrants are presented to the Warrant Agent with a
request to register the transfer thereof or to exchange them for an equal number
of Warrants of other authorized denominations, the Warrant Agent shall register
the transfer or make the exchange as requested if the requirements of this
Agreement for such transaction are met. To permit registrations of transfers
and exchanges, Holdings shall execute Warrant Certificates at the Warrant
Agent's request. No service charge shall be made for any registration of
transfer or exchange of Warrants, but Holdings may require payment of a sum
sufficient to cover any transfer tax or similar governmental charge payable in
connection with any registration of transfer of Warrants.
All Warrant Certificates issued upon any registration of transfer or
exchange of Warrants shall be the valid obligations of Holdings, evidencing the
same obligations, and entitled to the same benefits under this Agreement, as the
Warrant Certificates surrendered for registration of transfer or exchange.
Section II.5. Surrender of Warrant Certificates. Any Warrant
Certificate surrendered for registration of transfer, exchange or exercise of
the Warrants represented thereby shall, if surrendered to Holdings, be delivered
to the Warrant Agent, and all Warrant Certificates surrendered or so delivered
to the Warrant Agent shall be promptly cancelled by the Warrant Agent
and shall not be reissued by Holdings and, except as provided in this Article II
in case of an exchange, Article III hereof in case of the exercise of less than
all the Warrants represented thereby or Article V in case of a mutilated Warrant
Certificate, no Warrant Certificate shall be issued hereunder in lieu thereof.
The Warrant Agent shall destroy all cancelled Warrant Certificates in accordance
with its normal procedures.
ARTICLE III
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EXERCISE PRICE; EXERCISE OF WARRANTS
Section III.1. Exercise Price. Each Warrant Certificate shall, when
countersigned by the Warrant Agent, entitle the Holder thereof, subject to the
provisions of this Agreement, to purchase one share of Common Stock (subject to
adjustment as provided herein) for each Warrant represented thereby at a
purchase price (the "Exercise Price") of $.01 per share; provided that, at the
option of the Holder thereof, payment of the Exercise Price may be satisfied
through the delivery and cancellation of additional Warrants having an aggregate
Spread equal to the aggregate Exercise Price of the Warrants being exercised.
The calculation of the Spread and the number of Warrants deliverable in payment
of the Exercise Price shall be verified by Holdings.
Section III.2. Exercise; Restrictions on Exercise. (a) At any time
commencing on the date hereof and on or before the Expiration Date, any
outstanding Warrants may be exercised on any Business Day; provided that the
Registration Statement is, at the time of exercise, effective and available or
the exercise of such Warrants is exempt from the registration requirements of
the Securities Act. Any Warrants not exercised by 5:00 p.m., New York City
time, on the Expiration Date shall expire and all rights of the Holders of such
Warrants shall terminate. Additionally, pursuant to Section 4.1(h)(B) hereof,
the Warrants may expire and all rights of the Holders of such Warrants shall
terminate in the event Holdings merges or consolidates with or sells all or
substantially all of its property and assets to a Person if the consideration
payable to holders of Common Stock in exchange for their Common Stock in
connection with such merger, consolidation or sale consists solely of cash or in
the event of the dissolution, liquidation or winding up of Holdings.
(b) Holdings shall give notice not less than 90 and not more than 120
days prior to the Expiration Date to the Holders of all then outstanding
Warrants to the effect that the Warrants will terminate and become void as of
5:00 p.m., New York City time, on the Expiration Date; provided, however, that
the failure by Holdings to give such notice as provided in this Section shall
not affect such termination and becoming void of the Warrants as of 5:00 p.m.,
New York City time, on the Expiration Date.
(c) In the event a Holder exercises its Warrants at a time when the
Registration Statement is not effective and available, such Holder must furnish
to the Warrant Agent and Holdings such certifications, legal opinions or other
information as either of them may reasonably require to confirm that such
exercise is being made pursuant to an exemption from the registration
requirements of the Securities Act.
Section III.3. Method of Exercise; Payment of Exercise Price. In
order to exercise all or any of the Warrants represented by a Warrant
Certificate, the Holder thereof must surrender for exercise the Warrant
Certificate to the Warrant Agent at its corporate trust office set forth in
Section 9.5 hereof, with the Subscription Form set forth in the Warrant
Certificate duly executed, together with payment in full of the Exercise Price
then in effect for each share of Common Stock or other securities or property
issuable upon exercise of the Warrants as to which a Warrant is exercised; such
payment may be made (x) by wire transfer or by certified or official bank or
bank cashier's check payable to the order of Holdings or (y) as permitted
pursuant to the proviso in Section 3.1. The Warrant Agent shall promptly notify
Holdings in writing upon the exercise of any Warrant and of the number of shares
of Common Stock delivered upon the exercise of such Warrant; all payments
received upon exercise of Warrants shall be delivered to Holdings by the Warrant
Agent as instructed in writing by Holdings. If less than all the Warrants
represented by
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a Warrant Certificate are exercised, such Warrant Certificate
shall be surrendered and a new Warrant Certificate of the same tenor and for the
number of Warrants which were not exercised shall be executed by Holdings and
delivered to the Warrant Agent and the Warrant Agent shall countersign the new
Warrant Certificate, registered in such name or names as may be directed in
writing by the Holder, and shall deliver the new Warrant Certificate to the
Person or Persons entitled to receive the same. Upon exercise of any Warrants
following surrender of a Warrant Certificate in conformity with the foregoing
provisions, the Warrant Agent shall instruct Holdings to transfer promptly to or
upon the written order of the Holder of such Warrant Certificate appropriate
evidence of ownership of any Common Stock or other securities or property
(including money) to which it is entitled, registered or otherwise placed in
such name or names as may be directed in writing by the Holder, and to deliver
such evidence of ownership and any other securities or property (including
money) to the Person or Persons entitled to receive the same, together with an
amount in cash in lieu of any fractional shares as provided in Section 4.5
hereof; provided that the Holder of such Warrant shall be responsible for the
payment of any transfer taxes or other governmental charges imposed as the
result of any change in ownership of such Warrants or the issuance of such
Common Stock or other securities or Warrants other than to the registered owner
of such Warrants. Upon exercise of a Warrant or Warrants, the Warrant Agent is
hereby authorized and directed to requisition from any transfer agent of the
Common Stock (and all such transfer agents are hereby irrevocably authorized to
comply with all such requests) certificates (bearing the legend set forth in
Section 9.11, if applicable) for the necessary number of shares to which the
Holder of the Warrant or Warrants may be entitled. A Warrant shall be deemed to
have been exercised immediately prior to the close of business on the date of
the surrender for exercise, as provided above, of the Warrant Certificate
representing such Warrant and, for all purposes of this Agreement, the Person
entitled to receive any Common Stock or other securities or property deliverable
upon such exercise shall, as between such Person and Holdings, be deemed to be
the Holder of such Common Stock or other securities or property of record as of
the close of business on such date and shall be entitled to receive, and the
Warrant Agent shall deliver, at the expense of Holdings, to such Person, any
money, Common Stock or other securities or property to which he would have been
entitled had he been a record holder on such date.
ARTICLE IV
ADJUSTMENTS
Section IV.1. Adjustments. The number of shares of Common Stock
issuable upon exercise of each Warrant shall be subject to adjustment from time
to time as follows:
(a) Stock Dividends; Stock Splits; Reverse Stock Splits;
Reclassifications. In case Holdings shall (i) pay a dividend or make any other
distribution with respect to its Common Stock in shares of any class or series
of its capital stock, (ii) subdivide its outstanding Common Stock, (iii) combine
its outstanding Common Stock into a smaller number of shares or (iv) issue any
shares of its capital stock in a reclassification of the Common Stock (other
than a reclassification in connection with a merger, consolidation or other
business combination which will be governed by Section 4.1(h)), the number of
shares of Common Stock purchasable upon exercise of each Warrant immediately
prior to the record date for such dividend or distribution or the effective date
of such subdivision, combination or reclassification shall be adjusted so that
the Holder of each Warrant shall be entitled to receive the kind and number of
shares of Common Stock or other securities of Holdings which such Holder would
have been entitled to receive after the happening of any of the events described
above had such Warrant been exercised immediately prior to the happening of such
event or any record date with respect thereto (with any record date
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requirement being deemed to have been satisfied). An adjustment made pursuant to
this Section 4.1(a) shall become effective immediately after the effective date
of such event retroactive to the record date, if any, for such event.
(b) Rights; Options; Warrants. In case Holdings shall issue rights,
options, warrants or convertible or exchangeable securities (other than a
convertible or exchangeable security subject to Section 4.1(a)) to all holders
of its Common Stock, entitling them to subscribe for or purchase Common Stock at
a price per share of Common Stock (determined in the case of such rights,
options, warrants or convertible or exchangeable securities, by dividing (x) the
total amount receivable by Holdings in consideration of the issuance of such
rights, options, warrants or convertible or exchangeable securities, if any,
plus the total consideration payable to Holdings upon exercise, conversion or
exchange thereof, by (y) the total number of shares of Common Stock covered by
such rights, options, warrants or convertible or exchangeable securities) which
is lower (at the record date for such issuance) than the then Current Market
Value per share of Common Stock, the number of shares of Common Stock thereafter
purchasable upon exercise of each Warrant shall be determined by multiplying the
number of shares of Common Stock theretofore purchasable upon exercise of each
Warrant by a fraction, the numerator of which shall be the number of shares of
Common Stock outstanding immediately prior to the issuance of such rights,
options, warrants or convertible or exchangeable securities plus the number of
additional shares of Common Stock offered for subscription or purchase or
issuable upon conversion or exchange, and the denominator of which shall be the
number of shares of Common Stock outstanding immediately prior to the issuance
of such rights, options, warrants or convertible or exchangeable securities plus
the number of shares which the aggregate offering price of the total number of
shares of Common Stock so offered would purchase at the then Current Market
Value per share of Common Stock. Such adjustment shall be made whenever such
rights, options, warrants or convertible or exchangeable securities are issued,
and shall become effective retroactively immediately after the record date for
the determination of shareholders entitled to receive such rights, options,
warrants or convertible or exchangeable securities.
(c) Issuance of Common Stock at Lower Values. In case Holdings shall
sell or issue any shares of Common Stock or Right (excluding (i) any Right
issued in any of the transactions described in Section 4.1(a) or (b) above, (ii)
any shares of Common Stock issued pursuant to (x) any Rights outstanding on the
date of this Agreement, (y) a Right, if on the date such Right was issued, the
exercise, conversion or exchange price per share of Common Stock with respect
thereto was at least equal to the Current Market Value per share of Common Stock
on such date and (z) Rights (with respect to not more than an aggregate of 5% of
the outstanding shares of Common Stock) issued to employees of Holdings and its
subsidiaries resident in Canada pursuant to Holdings' stock option plan and
(iii) any Right issued as consideration when any corporation or business is
acquired, merged into or becomes part of Holdings or a subsidiary of Holdings in
an arm's-length transaction between Holdings and a Person other than an
Affiliate of Holdings) at a price per share of Common Stock (determined in the
case of such Right, by dividing (x) the total amount receivable by Holdings in
consideration of the sale and issuance of such Right, plus the total
consideration payable to Holdings upon exercise, conversion or exchange thereof,
by (y) the total number of shares of Common Stock covered by such Right) that is
lower than the Current Market Value per share of Common Stock in effect
immediately prior to such sale or issuance, then the number of shares of Common
Stock thereafter purchasable upon the exercise of each Warrant shall be
determined by multiplying the number of shares of Common Stock theretofore
purchasable upon exercise of such Warrant by a fraction, the numerator of which
shall be the number of shares of Common Stock outstanding immediately after such
sale or issuance and the denominator of which shall be the number of shares of
Common Stock outstanding immediately prior to such sale or issuance plus the
number of shares of Common Stock which the aggregate consideration received
(determined as provided below) for such sale
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or issuance would purchase at such Current Market Value per share of Common
Stock. For purposes of this Section 4.1(c), the shares of Common Stock which the
holder of any such Right shall be entitled to subscribe for or purchase shall be
deemed to be issued and outstanding as of the date of such sale and issuance and
the consideration received by Holdings therefor shall be deemed to be the
consideration received by Holdings for such Right, plus the consideration or
premiums stated in such Right to be paid for the shares of Common Stock covered
thereby. In case Holdings shall sell and issue shares of Common Stock or any
Right, for a consideration consisting, in whole or in part, of property other
than cash or its equivalent, then in determining the "price per share of Common
Stock" and the "consideration received by Holdings" for purposes of the first
sentence of this Section 4.1(c), the Board of Directors of Holdings shall
determine, in good faith, the fair value of said property, which determination
shall be evidenced by a resolution of the Board of Directors of Holdings. In
case Holdings shall sell and issue any Right together with one or more other
securities as part of a unit at a price per unit, then in determining the "price
per share of Common Stock" and the "consideration received by Holdings" for
purposes of the first sentence of this Section 4.1(c), the Board of Directors of
Holdings shall determine, in good faith, the fair value of the Right then being
sold as part of such unit.
(d) Distributions of Debt, Assets, Subscription Rights or Convertible
Securities. In case Holdings shall fix a record date for the making of a
distribution to all holders of its Common Stock of evidences of its
indebtedness, assets, cash dividends or distributions (excluding dividends or
distributions referred to in Section 4.1(a) above and excluding distributions in
connection with the dissolution, liquidation or winding up of Holdings which
will be governed by Section 4.1(h)(B) below) or securities (excluding those
referred to in Section 4.1(a), Section 4.1(b) or Section 4.1(c) above), then in
each case the number of shares of Common Stock purchasable after such record
date upon the exercise of each Warrant shall be determined by multiplying the
number of shares of Common Stock purchasable upon the exercise of such Warrant
immediately prior to such record date by a fraction, the numerator of which
shall be the Current Market Value per share of Common Stock immediately prior to
the record date for such distribution and the denominator of which shall be the
Current Market Value per share of Common Stock immediately prior to the record
date for such distribution less the then fair value (as determined in good faith
by the Board of Directors of Holdings) of the portion of the assets, evidence of
indebtedness, cash dividends or distributions or securities so distributed
applicable to one share of Common Stock. Such adjustment shall be made whenever
any such distribution is made, and shall become effective on the date of
distribution retroactive to the record date for the determination of
shareholders entitled to receive such distribution.
(e) Expiration of Rights, Options and Conversion Privileges. Upon the
expiration of any rights, options, warrants or conversion or exchange privileges
that have previously resulted in an adjustment hereunder, if any thereof shall
not have been exercised, the number of shares of Common Stock issuable upon the
exercise of each Warrant shall, upon such expiration, be readjusted and shall
thereafter, upon any future exercise, be such as they would have been had they
been originally adjusted (or had the original adjustment not been required, as
the case may be) as if (i) the only shares of Common Stock so issued were the
shares of Common Stock, if any, actually issued or sold upon the exercise of
such rights, options, warrants or conversion or exchange rights and (ii) such
shares of Common Stock, if any, were issued or sold for the consideration
actually received by Holdings upon such exercise plus the consideration, if any,
actually received by Holdings for issuance, sale or grant of all such rights,
options, warrants or conversion or exchange rights whether or not exercised;
provided, that no such readjustment shall have the effect of
8
decreasing the number of shares issuable upon exercise of each Warrant by a
number, in excess of the amount or number of the adjustment initially made in
respect to the issuance, sale or grant of such rights, options, warrants or
conversion or exchange rights.
(f) Current Market Value. For the purposes of any computation
hereunder, the Current Market Value per share of Common Stock or of any other
security (herein collectively referred to as a "security") at any date herein
specified shall be:
(i) if the security is not registered under the Exchange Act, the
value of the security (A) determined in good faith by the Board of
Directors of Holdings and certified in a board resolution based upon the
most recently completed arm's-length transaction with respect to such
security between Holdings and a Person other than an Affiliate of Holdings
and the closing of which occurs on such date or shall have occurred within
the six months preceding such date, or (B) if no such transaction shall
have occurred within such six-month period, most recently determined as of
a date within the six months preceding such date by an Independent
Financial Expert selected by Holdings, or (C) if no such determination
shall have been made within such six-month period or if Holdings so
chooses, determined as of such date by an Independent Financial Expert
selected by Holdings, or
(ii) if the security is registered under the Exchange Act, the average
of the daily market prices of the security for the 20 consecutive trading
days immediately preceding such date or, if the security has been
registered under the Exchange Act for less than 20 consecutive trading days
before such date, then the average of the daily market prices for all of
the trading days before such date for which daily market prices are
available. The market price for each such trading day shall be: (A) in
the case of a security listed or admitted to trading on any national
securities exchange, the closing sales price, regular way, on such day, or
if no sale takes place on such day, the average of the closing bid and
asked prices on such day on the principal national securities exchange on
which such security is listed or admitted, as determined by the Board of
Directors of Holdings, in good faith, (B) in the case of a security not
then listed or admitted to trading on any national securities exchange, the
last reported sale price on such day, or if no sale takes place on such
day, the average of the closing bid and asked prices on such day, as
reported by a reputable quotation source designated by Holdings, (C) in the
case of a security not then listed or admitted to trading on any national
securities exchange and as to which no such reported sale price or bid and
asked prices are available, the average of the reported high bid and low
asked prices on such day, as reported by a reputable quotation service, or
a newspaper of general circulation in the Borough of Manhattan, City and
State of New York customarily published on each Business Day, designated by
Holdings, or, if there shall be no bid and asked prices on such day, the
average of the high bid and low asked prices, as so reported, on the most
recent day (not more than 30 days prior to the date in question) for which
prices have been so reported and (D) if there are no bid and asked prices
reported during the 30 days prior to the date in question, the Current
Market Value of the security shall be determined as if the security were
not registered under the Exchange Act.
(g) De Minimis Adjustments. No adjustment in the number of shares of
Common Stock purchasable hereunder shall be required unless such adjustment
would require an increase or decrease of at least one percent (1%) in the number
of shares of Common Stock purchasable upon the exercise of each Warrant;
provided, however, that any adjustments which by reason of this Section 4.1(g)
are not required to be made shall be carried forward and taken into
9
account in any subsequent adjustment. All calculations shall be made to the
nearest one-thousandth of a share.
(h) Consolidation, Merger, Etc. (A) Subject to the provisions of
Subsection (B) below of this Section 4.1(h), in case of the consolidation of
Holdings with, or merger of Holdings with or into, or of the sale of all or
substantially all of the properties and assets of Holdings to, any Person and in
connection therewith consideration is payable to holders of Common Stock (or
other securities or property purchasable upon exercise of Warrants) in exchange
therefor, the Warrants shall remain subject to the terms and conditions set
forth in this Agreement and each Warrant shall, after such consolidation, merger
or sale, entitle the Holder to receive upon exercise the number of shares of
capital stock or other securities or property (including cash) of Holdings, or
of such Person resulting from such consolidation or surviving such merger or to
which such sale shall be made, as the case may be, that would have been
distributable or payable on account of the shares of Common Stock (or other
securities or properties purchasable upon exercise of Warrants) if such Holder's
Warrants had been exercised immediately prior to such merger, consolidation or
sale (or, if applicable, the record date therefor); and in any such case the
provisions of this Agreement with respect to the rights and interests thereafter
of the Holders of Warrants shall be appropriately adjusted by the Board of
Directors of Holdings in good faith so as to be applicable, as nearly as may
reasonably be, to any shares of stock or other securities or any property
thereafter deliverable on the exercise of the Warrants.
(B) Notwithstanding the foregoing, (x) if Holdings merges or
consolidates with, or sells all or substantially all of its property and assets
to, another Person and consideration is payable to holders of Common Stock in
exchange for their Common Stock in connection with such merger, consolidation or
sale which consists solely of cash, or (y) in the event of the dissolution,
liquidation or winding up of Holdings, then the Holders of Warrants shall be
entitled to receive distributions on the date of such event on an equal basis
with holders of Common Stock (or other securities issuable upon exercise of the
Warrants) as if the Warrants had been exercised immediately prior to such event,
less the Exercise Price. Upon receipt of such payment, if any, the right of a
Holder shall terminate and cease and such Holder's Warrants shall expire. In
case of any such merger, consolidation or sale of assets, the surviving or
acquiring Person and, in the event of any dissolution, liquidation or winding up
of Holdings, Holdings shall deposit promptly with the Warrant Agent the funds,
if any, necessary to pay the Holders of the Warrants. After receipt of such
deposit from such Person or Holdings and after receipt of surrendered Warrant
Certificates, the Warrant Agent shall make payment by delivering a check in such
amount as is appropriate (or, in the case of consideration other than cash, such
other consideration as is appropriate) to such Person or Persons as it may be
directed in writing by the Holder surrendering such Warrants.
(i) In addition to the foregoing adjustments, the Board of Directors
of Holdings may make any other adjustment to increase the number of Underlying
Securities issuable upon exercise of Warrants as it may, in good faith, deem
desirable to protect the rights and benefits of Holders. In addition, Holdings
may from time to time increase the number of Underlying Securities issuable upon
exercise of Warrants, provided that any such increase must be effective for at
least 30 calendar days, and must be preceded by written notice of such increase
to the Holders and the Warrant Agent, which notice must be mailed at least 30
calendar days prior to the effective date of such increase. Any such increase
shall not alter or adjust the Exercise Price.
(j) If at any time the Current Market Value of any security is
required in order to comply with the terms of this Agreement, and such Current
Market Value is determined in accordance with Section 4.1(f)(i) hereof: (1) if
clause (A) of Section 4.1(f)(i) is applicable,
10
Holdings shall, as promptly as practicable, deliver to the Warrant Agent a copy
of the board resolution certifying the Current Market Value determination and a
brief description of the arm's-length transaction upon which such determination
was based; (2) if clause (B) of Section 4.1(f)(i) is applicable, Holdings shall
as promptly as practicable deliver to the Warrant Agent the value report of the
Independent Financial Expert, stating the value of the security and briefly
describing the nature and scope of the examination upon which the determination
was made (the "Value Report"); and (3) if clause (C) of Section 4.1(f)(i) is
applicable, Holdings shall cause the Independent Financial Expert to deliver to
Holdings, with a copy to the Warrant Agent, within 45 days of the appointment of
the Independent Financial Expert, a Value Report. The Warrant Agent shall have
no duty with respect to any such board resolution or Value Report, except to
keep it on file and available for inspection by the Holders. The determination
as to value in accordance with the provisions of this Section 4.1(j) shall be
conclusive on all Persons. The Independent Financial Expert shall use one or
more valuation methods that it determines, in its best professional judgment, to
be most appropriate. The Independent Financial Expert shall consult with
management of Holdings in order to allow management to comment on the proposed
value prior to delivery to Holdings of any Value Report of the Independent
Financial Expert pursuant to clause (3) above.
Section IV.2. Notice of Adjustment. Whenever the number of shares of
Common Stock or other stock or property purchasable upon the exercise of each
Warrant is adjusted, as herein provided, Holdings shall cause the Warrant Agent
promptly to mail, at the expense of Holdings, to each Holder notice of such
adjustment or adjustments and shall deliver to the Warrant Agent a certificate
of a firm of independent public accountants selected by the Board of Directors
of Holdings (who may be the regular accountants employed by Holdings) setting
forth the number of shares of Common Stock or other stock or property
purchasable upon the exercise of each Warrant after such adjustment, setting
forth a brief statement of the facts requiring such adjustment and setting forth
the computation by which such adjustment was made. Such certificate shall be
conclusive evidence of the correctness of such adjustment. The Warrant Agent
shall be entitled to and shall be fully protected in relying on such certificate
and shall be under no duty or responsibility with respect to any such
certificate, except to exhibit the same, from time to time, to any Holder
desiring an inspection thereof during reasonable business hours. The Warrant
Agent shall not at any time be under any duty or responsibility to any Holders
to determine whether any facts exist which may require any adjustment of the
Exercise Price or the number of shares of Common Stock or other securities or
property purchasable on exercise of the Warrants, or with respect to the nature
or extent of any such adjustment when made, or with respect to the method
employed in making such adjustment, or the validity or value (or the kind or
amount) of any Common Stock or other securities or property which may be
purchasable on exercise of the Warrants. The Warrant Agent shall not be deemed
to have knowledge of such adjustment unless and until it shall have received
such certificate. The Warrant Agent shall not be responsible for any failure of
Holdings to make any cash payment or to issue, transfer or deliver any shares of
Common Stock or other securities or property upon the exercise of any Warrant.
Section IV.3. Statement on Warrants. Irrespective of any adjustment in
the number or kind of shares purchasable upon the exercise of the Warrants,
Warrants theretofore or thereafter issued may continue to express the same
number and kind of shares as are stated in the Warrants initially issuable
pursuant to this Agreement.
Section IV.4. Notice of Consolidation, Merger, Etc. In case at any
time after the date hereof and prior to 5:00 p.m., New York City time, on the
Expiration Date, there shall be any (i) consolidation or merger involving
Holdings or sale, transfer or other disposition of all or substantially all of
Holdings's property, assets or business (except a merger in which Holdings shall
11
be the surviving corporation and holders of Common Stock (or other securities or
property purchasable upon exercise of the Warrants) receive no consideration in
respect of their shares) or (ii) any other transaction contemplated by Section
4.1(h)(B) above, then in any one or more of such cases, Holdings shall cause to
be mailed to the Warrant Agent and each Holder of a Warrant, at the earliest
practicable time (and, in any event, not less than 20 calendar days before any
date set for definitive action), notice of the date on which such
reorganization, sale, consolidation, merger, dissolution, liquidation or winding
up shall take place, as the case may be. Such notice shall also set forth such
facts as shall indicate the effect of such action (to the extent such effect may
be known at the date of such notice) on the kind and amount of Common Stock and
other securities, money and other property deliverable upon exercise of the
Warrants. Such notice shall also specify the date as of which the holders of
record of the Common Stock or other securities or property issuable upon
exercise of the Warrants shall be entitled to exchange their shares for
securities, money or other property deliverable upon such reorganization, sale,
consolidation, merger, dissolution, liquidation or winding up, as the case may
be.
Section IV.5. Fractional Interests. If more than one Warrant shall be
presented for exercise in full at the same time by the same Holder, the number
of full shares of Common Stock which shall be issuable upon such exercise
thereof shall be computed on the basis of the aggregate number of shares of
Common Stock purchasable on exercise of the Warrants so presented. If any
fraction of a share of Common Stock would, except for the provisions of this
Section 4.5, be issuable on the exercise of any Warrant (or specified portion
thereof), Holdings shall pay an amount in cash calculated by it to be equal to
the then Current Market Value per share of Common Stock multiplied by such
fraction computed to the nearest whole cent.
ARTICLE V
LOSS OR MUTILATION
Upon receipt by Holdings and the Warrant Agent of evidence
satisfactory to them of the ownership and the loss, theft, destruction or
mutilation of any Warrant Certificate and of indemnity in the form of an
indemnity bond satisfactory to them and (in the case of mutilation) upon
surrender and cancellation thereof, then, in the absence of notice to Holdings
or the Warrant Agent that the Warrants represented thereby have been acquired
by a bona fide purchaser, Holdings shall execute and the Warrant Agent shall
countersign and deliver to the registered Holder of the lost, stolen, destroyed
or mutilated Warrant Certificate, in exchange for or in lieu thereof, a new
Warrant Certificate of the same tenor and for like aggregate number of Warrants.
Upon the issuance of any new Warrant Certificate under this Article V, Holdings
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and other expenses
(including the fees and expenses of the Warrant Agent) in connection therewith.
Every new Warrant Certificate executed and delivered pursuant to this Article V
in lieu of any lost, stolen or destroyed Warrant Certificate shall constitute a
contractual obligation of Holdings, whether or not the allegedly lost, stolen or
destroyed Warrant Certificates shall be at any time enforceable by anyone, and
shall be entitled to the benefits of this Agreement equally and proportionately
with any and all other Warrant Certificates duly executed and delivered
hereunder. The provisions of this Article V are exclusive and shall preclude
(to the extent lawful) all other rights or remedies with respect to the
replacement of mutilated, lost, stolen, or destroyed Warrant Certificates.
12
ARTICLE VI
AUTHORIZATION AND RESERVATION
OF COMMON STOCK; PURCHASE OF WARRANTS
Section VI.1. Reservation of Authorized Common Stock. Holdings shall
at all times reserve and keep available for issue upon the exercise of Warrants
such number of its authorized but unissued shares of Common Stock or other
securities of Holdings deliverable upon exercise of Warrants as will be
sufficient to permit the exercise in full of all outstanding Warrants and will
cause appropriate evidence of ownership of such Common Stock or other securities
of Holdings to be delivered to the Warrant Agent upon its request for delivery
upon the exercise of Warrants, and all such shares of Common Stock will, at all
times, be duly approved for listing subject to official notice of issuance on
each securities exchange, interdealer quotation system or market, if any, on
which such Common Stock is then listed. Holdings covenants that all Common
Stock or other securities of Holdings that may be issued upon the exercise of
the Warrants will, upon issuance, be duly authorized, validly issued, fully paid
and nonassessable, and free from preemptive rights and all taxes, liens,
charges, encumbrances and security interests.
Section VI.2. Purchase of Warrants by Holdings. Holdings shall have
the right, except as limited by law, other agreement or herein, to purchase or
otherwise acquire Warrants at such times, in such manner and for such
consideration as it may deem appropriate. In the event Holdings shall purchase
or otherwise acquire Warrants, the related Warrant certificates shall thereupon
be delivered to the Warrant Agent and be cancelled by it and retired.
ARTICLE VII
WARRANT HOLDERS NOT DEEMED STOCKHOLDERS
Holdings and the Warrant Agent may deem and treat the registered
Holder(s) of the Warrant Certificates as the absolute owner(s) thereof
(notwithstanding any notation of ownership or other writing thereon made by
anyone), for the purpose of any exercise thereof and for all other purposes, and
neither Holdings nor the Warrant Agent shall be affected by any notice to the
contrary. Prior to the exercise of the Warrants, no Holder of a Warrant
Certificate, as such, shall be entitled to any rights of a stockholder of
Holdings, including, without limitation, the right to vote or to consent to any
action of the stockholders, to receive dividends or other distributions, to
exercise any preemptive right or to receive any notice of meetings of
stockholders and, except as otherwise provided in this Agreement, shall not be
entitled to receive any notice of any proceedings of Holdings.
ARTICLE VIII
THE WARRANT AGENT
Section VIII.1. Duties and Liabilities. The Warrant Agent hereby
accepts the agency established by this Agreement and agrees to perform the
duties and obligations, and no implied duties or obligations shall be read into
this Agreement against Warrant Agent, imposed by this Agreement upon the terms
and conditions herein set forth, by all of which Holdings and the Holders of
Warrants, by their acceptance thereof, shall be bound.
13
(a) The statements contained herein and in the Warrant Certificate
shall be taken as statements of Holdings, and the Warrant Agent assumes no
responsibility for the correctness of any of the same except as describe the
Warrant Agent or any action taken by it. The Warrant Agent assumes no
responsibility with respect to the distribution of the Warrants except as herein
otherwise provided.
(b) The Warrant Agent shall not be responsible for any failure of
Holdings to comply with the covenants contained in this Agreement or in the
Warrants to be complied with by Holdings.
(c) The Warrant Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty thereunder either itself (through
its employees) or by or through its attorneys or agents (which shall not include
its employees) and shall not be responsible for the misconduct of any agent
appointed.
(d) Whenever in the performance of its duties under this Agreement the
Warrant Agent shall deem it necessary or desirable that any fact or matter be
proved or established by Holdings prior to taking or suffering any action
hereunder, such fact or matter (unless such evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by the Chairman of the Board, President,
Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, a
Vice President, the Treasurer or Secretary of Holdings and delivered to the
Warrant Agent; and such certificate shall be full authorization to the Warrant
Agent for any action taken or suffered by it under the provisions of this
Agreement in reliance upon such certificate.
(e) Holdings agrees to pay the Warrant Agent reasonable compensation
for all services rendered by the Warrant Agent in the performance of its duties
under this Agreement, to reimburse the Warrant Agent for all expenses, taxes and
governmental charges and other charges of any kind and nature incurred by the
Warrant Agent (including reasonable fees and expenses of the Warrant Agent's
counsel and agents) in the performance of its duties under this Agreement.
Holdings also agrees to indemnify the Warrant Agent for, and to hold it harmless
against, any loss, liability, or expenses incurred without negligence or willful
misconduct on the part of Warrant Agent, for anything done or omitted by the
Warrant Agent in connection with the acceptance and administration of this
Agreement, including the costs and expenses of defending against any claim of
liability in the premises. The indemnity provided for herein shall survive the
expiration of the Warrants and termination of this Agreement. The cost and
expenses incurred in enforcing this right of indemnification shall be paid by
Holdings. The Warrant Agent may conclusively rely upon and shall be protected
and shall incur no liability for or in respect of any action taken, suffered or
omitted by it in connection with, its administration of this Agreement in
reliance upon any Warrant Certificate or certificate for shares of stock or
other securities of Holdings, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified or acknowledged, by
the proper Person or Persons.
Notwithstanding anything in the Agreement to the contrary, in no event
shall the Warrant Agent be liable for special indirect, or consequential loss or
damage of any kind whatsoever (including but not limited to lost profits), even
if the Warrant Agent has been advised of the likelihood of such loss or damage
and regardless of the form of the action.
(f) The Warrant Agent shall be under no obligation to institute any
action, suit
14
or legal proceeding or to take any other action likely to involve
expense unless Holdings or one or more Holders shall furnish the Warrant Agent
with reasonable security and indemnity satisfactory to the Warrant Agent for any
costs and expenses which may be incurred, but this provision shall not affect
the power of the Warrant Agent to take such action as the Warrant Agent may
consider proper, whether with or without any such security or indemnity. All
rights of action under this Agreement or under any of the Warrants may be
enforced by the Warrant Agent without the possession of any of the Warrants or
the production thereof at any trial or other proceeding relative thereto, and
any such action, suit or proceeding instituted by the Warrant Agent shall be
brought in its name as Warrant Agent, and any recovery of judgment shall be for
the ratable benefit of the Holders, as their respective rights or interests may
appear.
(g) The Warrant Agent and any stockholder, director, officer or
employee of the Warrant Agent may buy, sell or deal in any of the Warrants or
other securities of Holdings or become pecuniarily interested in any
transactions in which Holdings may be interested, or contract with or lend money
to Holdings or otherwise act as fully and freely as though it were not Warrant
Agent under this Agreement or such director, officer or employee. Nothing
herein shall preclude the Warrant Agent from acting in any other or for any
other capacity for Holdings or for any other legal entity including, without
limitation, acting as transfer agent or as a lender to the Company or an
affiliate thereof.
(h) The Warrant Agent shall act hereunder solely as agent, and its
duties shall be determined solely by the provisions hereof. The Warrant Agent
shall not be liable for anything which it may do or refrain from doing in
connection with this Agreement except for its own negligence or willful
misconduct.
(i) The Warrant Agent may conclusively rely upon and shall be
protected by Holdings and shall not incur any liability or responsibility to
Holdings or to any Holder for any action taken in reliance on any notice,
resolution, waiver, consent, order, certificate, or other paper, document or
instrument reasonably believed by it to be genuine and to have been signed, sent
or presented by the proper party or parties.
(j) The Warrant Agent shall not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery hereof (except
the due execution hereof by the Warrant Agent) or in respect of the validity or
execution of any Warrant (except its counter-signature thereof); nor shall the
Warrant Agent by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any Underlying Securities (or
other stock) to be issued pursuant to this Agreement or any Warrant, or as to
whether any Underlying Securities (or other stock) will, when issued, be validly
issued, fully paid and nonassessable, or as to the Exercise Price or the number
or amount of Underlying Securities or other securities or other property
issuable upon exercise of any Warrant.
(k) The Warrant Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Chairman of the Board, President, Chief Executive Officer, Chief Operating
Officer, Chief Financial Officer, a Vice President or Secretary of Holdings, and
to apply to such officers for advice or instructions in connection with its
duties, and shall not be liable for any action taken or suffered to be taken by
it and without negligence in accordance with instructions of any such officer or
officers.
Section VIII.2. Right to Consult Counsel. Before the Warrant Agent
acts or refrains from acting, it may at any time consult with legal counsel (who
may be legal counsel for
15
Holdings), and the opinion or advice of such counsel shall be full and complete
authorization and protection to the Warrant Agent and the Warrant Agent shall
incur no liability or responsibility to Holdings or to any Holder for any action
taken, suffered or omitted by it in good faith in accordance with the opinion or
advice of such counsel.
Section VIII.3. No Restrictions on Actions. The Warrant Agent and any
stockholder, director, officer or employee of the Warrant Agent may buy, sell or
deal in any of the Warrants or other securities of Holdings or become
pecuniarily interested in transactions in which Holdings may be interested, or
contract with or lend money to Holdings or otherwise act as fully and freely as
though it were not the Warrant Agent under this Agreement. Nothing herein shall
preclude the Warrant Agent from acting in any other capacity for Holdings or for
any other legal entity.
Section VIII.4. Change of Warrant Agent. The Warrant Agent may resign
from its position as such and be discharged from all further duties and
liabilities hereunder (except liability arising as a result of the Warrant
Agent's own negligence or willful misconduct), after giving one month's prior
written notice to Holdings. Holdings may remove the Warrant Agent upon one
month's written notice specifying the date when such discharge shall take
effect, and the Warrant Agent shall thereupon in like manner be discharged from
all further duties and liabilities hereunder, except as aforesaid. Holdings
shall cause to be mailed to each Holder of a Warrant a copy of said notice of
resignation or notice of removal, as the case may be. Upon such designation or
removal Holdings shall appoint in writing a new warrant agent. If Holdings shall
fail to make such appointment within a period of 30 calendar days after it has
been notified in writing of such resignation by the resigning Warrant Agent or
after such removal, then the Holder of any Warrant may apply to any court of
competent jurisdiction for the appointment of a new warrant agent. Pending
appointment of a successor to the original Warrant Agent, either by Holdings or
by such a court, the duties of the Warrant Agent shall be carried out by
Holdings. Any new warrant agent, whether appointed by Holdings or by such a
court, shall be a bank (or subsidiary thereof) or trust company doing business
under the laws of the United States or any state thereof, in good standing and
having a combined capital and surplus of not less than $50,000,000. The combined
capital and surplus of any such new warrant agent shall be deemed to be the
combined capital and surplus as set forth in the most recent annual report of
its condition published by such warrant agent prior to its appointment; provided
that such reports are published at least annually pursuant to law or to the
requirements of a federal or state supervising or examining authority. After
acceptance in writing of such appointment by the new warrant agent, it shall be
vested with the same powers, rights, duties and responsibilities as if it had
been originally named herein as the Warrant Agent, without any further
assurance, conveyance, act or deed; however, the original Warrant Agent shall in
all events deliver and transfer to the successor Warrant Agent all property, if
any, at the time held hereunder by the original Warrant Agent and if for any
reason it shall be necessary or expedient to execute and deliver any further
assurance, conveyance, act or deed, the same shall be done at the expense of
Holdings and shall be legally and validly executed and delivered by the
resigning or removed Warrant Agent. Not later than the effective date of any
such appointment, Holdings shall file notice thereof with the resigning or
removed Warrant Agent and shall forthwith cause a copy of such notice to be
mailed to each Holder of a Warrant at the cost and expense of Holdings. Failure
to give any notice provided for in this Section 8.5, however, or any defect
therein, shall not affect the legality or validity of the resignation of the
Warrant Agent or the appointment of a new warrant agent, as the case may be.
Section VIII.5. Successor Warrant Agent. Any corporation into which
the Warrant Agent or any new warrant agent may be merged, or any corporation
resulting from any
16
consolidation to which the Warrant Agent or any new warrant agent shall be a
party, shall be a successor Warrant Agent under this Agreement without any
further act; provided that such corporation would be eligible for appointment as
successor to the Warrant Agent under the provisions of Section 8.5 hereof. Any
such successor Warrant Agent shall promptly cause notice of its succession as
Warrant Agent to be mailed to each Holder of a Warrant .
ARTICLE IX
MISCELLANEOUS
Section IX.1. Money Deposited with the Warrant Agent. The Warrant
Agent shall not be required to pay interest on any moneys deposited pursuant to
the provisions of this Agreement except such as it shall agree in writing with
Holdings to pay thereon. Any moneys, securities or other property which at any
time shall be deposited by Holdings or on its behalf with the Warrant Agent
pursuant to this Agreement shall be and are hereby assigned, transferred and set
over to the Warrant Agent in trust for the purpose for which such moneys,
securities or other property shall have been deposited; but such moneys,
securities or other property need not be segregated from other funds, securities
or other property except to the extent required by law.
Section IX.2. Payment of Taxes. All Common Stock or other securities
issuable upon the exercise of Warrants shall be validly issued, fully paid and
nonassessable, and Holdings shall pay any taxes and other governmental charges
that may be imposed under the laws of the United States of America or any
political subdivision or taxing authority thereof or therein in respect of the
issue or delivery thereof or of other securities deliverable upon exercise of
Warrants (other than income taxes imposed on the Holders). Holdings shall not
be required, however, to pay any tax or other charge imposed in connection with
any transfer involved in the issue of any certificate for Common Stock or other
securities or property issuable upon the exercise of the Warrants or payment of
cash to any Person other than the Holder of a Warrant Certificate surrendered
upon the exercise of a Warrant and in case of such transfer or payment, the
Warrant Agent and Holdings shall not be required to issue any stock certificate
or pay any cash until such tax or charge has been paid or it has been
established to the Warrant Agent's and Holdings's satisfaction that no such tax
or charge is due.
Section IX.3. Merger, Consolidation or Sale of Assets of Holdings.
Holdings will not merge into or consolidate with any other Person, or sell or
otherwise transfer all or substantially all of its property, assets or business
to a successor of Holdings, unless the Person resulting from such merger or
consolidation, or such successor of Holdings, shall expressly assume, by
supplemental agreement satisfactory in form to the Warrant Agent and executed
and delivered to the Warrant Agent, the due and punctual performance and
observance of each and every covenant and condition of this Agreement to be
performed and observed by Holdings.
Section IX.4. Reports to Holders. Notwithstanding that Holdings may
not be required to remain subject to the reporting requirements of Section 13 or
15(d) of the Exchange Act, Holdings shall file with the Commission and provide
the Warrant Agent and the Holders with such annual reports and such information,
documents and other reports specified in Section 13 and 15(d) of the Exchange
Act, such information, documents and other reports to be so filed and provided
at the times specified for the filing of such information, documents and reports
under such Sections.
17
Section IX.5. Notices. (a) Notices or demands authorized by this
Agreement to be given or made by the Warrant Agent or by the holder of any
Warrant Certificate to or on Holdings shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Warrant Agent) as follows:
Sterling Chemicals Holdings, Inc.
0000 Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: General Counsel
Any notice or demand authorized by this Agreement to be given or made
by the Company or by the holder of any Warrant Certificate to or on the Warrant
Agent shall be sent by registered or certified mail and shall be deemed given
upon receipt and addressed (until another address is filed in writing with
Holdings) as follows:
Xxxxxx Trust and Savings Bank
000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxx X. Xxxxxxxxx
Notices or demands authorized by this Agreement to be given or made by Holdings
or the Warrant Agent to the holder of any Warrant Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of Holdings. Holdings shall deliver a copy of any notice or demand it
delivers to the holder of any Warrant Certificate to the Warrant Agent and the
Warrant Agent shall deliver a copy of any notice or demand it delivers to the
holder of any Warrant Certificate to Holdings.
(b) Except as otherwise specified herein, notice may also be given by
facsimile transmission (effective when receipt is acknowledged) or by overnight
delivery service (effective the next business day).
Section IX.6. Governing Law. The laws of the State of New York
applicable to contracts to be performed entirely in that state shall govern this
Agreement.
Section IX.7. Binding Effect. This Agreement shall be binding upon
and inure to the benefit of Holdings and the Warrant Agent and their respective
successors and assigns, and the Holders from time to time of the Warrants.
Nothing in this Agreement is intended or shall be construed to confer upon any
Person, other than Holdings, the Warrant Agent and the Holders of the Warrants,
any right, remedy or claim under or by reason of this Agreement or any part
hereof.
Section IX.8. Counterparts. This Agreement may be executed manually
or by facsimile in any number of counterparts, each of which shall be deemed an
original, but all of which together constitute one and the same instrument.
Section IX.9. Amendments. The Warrant Agent may, without the consent
or concurrence of the Holders of the Warrants, by supplemental agreement or
otherwise, join with Holdings in making any changes or corrections in this
Agreement, subject to both parties' agreement in writing thereof, that (a) are
required to correct any defective or inconsistent provision or clerical omission
or mistake or manifest error herein contained or (b) add to the covenants and
agreements of Holdings in this Agreement further covenants and agreements of
Holdings thereafter to be
18
observed, or surrender any rights or power reserved to or conferred upon
Holdings in this Agreement; provided that in either case such changes or
corrections do not and will not adversely affect, alter or change the rights,
privilege or immunities of the Holders of Warrants. Any amendment or supplement
to this Agreement that has an adverse effect on the interests of the Holders of
the Warrants shall require the written consent of the Holders of two-thirds of
the then outstanding Warrants. The consent of each Holder of the Warrants
affected shall be required for any amendment pursuant to which the number of
Underlying Securities would be decreased (other than pursuant to adjustments
made in accordance with Article IV hereof). Notwithstanding anything in this
Agreement to the contrary, no supplement or amendment that changes the rights
and duties of the Warrant Agent under this Agreement shall be effective without
the written consent of the Warrant Agent.
Section IX.10. Headings. The descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning of construction of any of the provisions hereof.
Section IX.11. Common Stock Legend. In the event a Holder exercises
its Warrants at a time when the Registration Statement is not effective and
available pursuant to an exemption from the registration requirements of the
Securities Act, any Common Stock or other securities of Holdings issuable upon
exercise of such Warrants shall bear the following legend:
THE COMMON STOCK EVIDENCED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED
UNDER THE U.S. SECURITIES ACT OF 1933 (THE "SECURITIES ACT") AND
ACCORDINGLY MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO (i) AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR (ii) AN
APPLICABLE EXEMPTION FROM REGISTRATION THEREUNDER. ANY SALE PURSUANT
TO CLAUSE (ii) OF THE PRECEDING SENTENCE MUST BE ACCOMPANIED BY SUCH
CERTIFICATIONS, LEGAL OPINIONS AND OTHER INFORMATION AS ARE REASONABLY
REQUIRED BY HOLDINGS AND THE WARRANT AGENT.
Section IX.12. Third Party Beneficiaries. The Holders shall be third
party beneficiaries to the agreements made hereunder between Holdings, on the
one hand, and the Warrant Agent, on the other hand, and each Holder shall have
the right to enforce such agreements directly to the extent it deems such
enforcement necessary or advisable to protect its rights or the rights of
Holders hereunder.
19
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed, as of the day and year first above written.
STERLING CHEMICALS HOLDINGS, INC.
By______________________
Name:
Title:
XXXXXX TRUST AND SAVINGS BANK,
as Warrant Agent
By______________________
Name:
Title:
20
EXHIBIT A
---------
FORM OF WARRANT CERTIFICATE
THE COMMON STOCK, PAR VALUE $.01 PER SHARE, OF STERLING CHEMICALS HOLDINGS, INC.
(THE "COMMON STOCK") FOR WHICH THIS WARRANT IS EXERCISABLE MAY NOT BE OFFERED OR
SOLD IN THE UNITED STATES ABSENT REGISTRATION UNDER THE SECURITIES AND EXCHANGE
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND ANY APPLICABLE STATE
SECURITIES LAWS OR AN APPLICABLE EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS.
ACCORDINGLY, NO HOLDER SHALL BE ENTITLED TO EXERCISE SUCH HOLDER'S WARRANTS AT
ANY TIME UNLESS, AT THE TIME OF EXERCISE, (i) A REGISTRATION STATEMENT UNDER THE
SECURITIES ACT RELATING TO THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE
OF THIS WARRANT HAS BEEN FILED WITH, AND DECLARED EFFECTIVE BY, THE SECURITIES
AND EXCHANGE COMMISSION (THE "COMMISSION"), AND NO STOP ORDER SUSPENDING THE
EFFECTIVENESS OF SUCH REGISTRATION STATEMENT HAS BEEN ISSUED BY THE COMMISSION,
OR (ii) THE ISSUANCE OF SUCH SHARES IS PERMITTED PURSUANT TO AN EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ANY APPLICABLE STATE
SECURITIES LAWS.
A-1
STERLING CHEMICALS HOLDINGS, INC.
No. ______________
______________ Warrants
WARRANTS TO PURCHASE COMMON STOCK
This certifies that __________________, or its registered assigns, is
the owner of the number of Warrants set forth above, each of which represents
the right to purchase, commencing July 10, 1997, from STERLING CHEMICALS
HOLDINGS, INC., a Delaware corporation ("Holdings"), one share of Common Stock,
par value $.01 per share (the "Common Stock"), of Holdings (subject to
adjustment as provided in the Warrant Agreement hereinafter referred to) at the
purchase price (the "Exercise Price") of $.01 per share of Common Stock, upon
surrender hereof at the office of Xxxxxx Trust and Savings Bank or to its
successor as the warrant agent under the Warrant Agreement hereinafter referred
to (any such warrant agent being herein call the "Warrant Agent"), with the
Subscription Form on the reverse hereof duly executed, with signature guaranteed
as therein specified and simultaneous payment in full (by wire transfer or by
certified or official bank or bank cashier's check payable to the order of
Holdings, or by the surrender of Warrants having an aggregate Spread (as defined
in the Warrant Agreement) equal to the Exercise Price of the Warrants being
exercised) of the purchase price for the shares as to which the Warrant(s)
represented by this Warrant Certificate are exercised, all subject to the terms
and conditions hereof and of the Warrant Agreement. Notwithstanding the
foregoing, Holdings shall have the right to not allow an exercise of any
Warrants in the event the Registration Statement is not effective and available
at the time Warrants are exercised, unless prior to the exercise of such
Warrants, the Holder thereof furnishes to the Warrant Agent and Holdings such
certifications, legal opinions or other information as either of them may
reasonably require to confirm that such exercise is being made pursuant to an
exemption from the registration requirements of the Securities Act.
This Warrant Certificate is issued under and in accordance with a
Warrant Agreement dated as of July 10, 1997 (the "Warrant Agreement"), between
Holdings and Xxxxxx Trust and Savings Bank, as Warrant Agent, and is subject to
the terms and provisions contained therein, all of which terms and provisions
the Holder of this Warrant Certificate consents to by acceptance hereof. The
Warrant Agreement is hereby incorporated herein by reference and made a part
hereof. Reference is hereby made to the Warrant Agreement for a full description
of the rights, limitations of rights, obligations, duties and immunities
thereunder of Holdings and the Holders of the Warrants. The summary of the terms
of the Warrant Agreement contained in this Warrant Certificate is qualified in
its entirety by express reference to the Warrant Agreement. All terms used in
this Warrant Certificate that are defined in the Warrant Agreement shall have
the meanings assigned to them in the Warrant Agreement.
A-2
Copies of the Warrant Agreement are on file at the office of the
Warrant Agent and may be obtained by writing to the Warrant Agent at the
following address:
Xxxxxx Trust and Savings Bank
000 Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxx X. Xxxxxxxxx
If Holdings merges or consolidates with or into, or sells all or
substantially all of its property and assets to, another Person solely for cash,
or in the event of the dissolution, liquidation or winding-up of Holdings, the
Holders of Warrants shall be entitled to receive distributions on the date of
such event on an equal basis with holders of Common Stock (or other securities
issuable upon exercise of the Warrants) as if the Warrants had been exercised
immediately prior to such event (less the Exercise Price).
The number of shares of Common Stock purchasable upon the exercise of
each Warrant is subject to adjustment as provided in the Warrant Agreement.
Except as stated in the immediately preceding paragraph, in the event Holdings
merges or consolidates with, or sells all or substantially all of its assets to,
another Person, each Warrant will, upon exercise, entitle the Holder thereof to
receive the number of shares of capital stock or other securities or the amount
of money and other property which the holder of a share of Common Stock (or
other securities or property issuable upon exercise of a Warrant) is entitled to
receive upon completion of such merger, consolidation or sale.
As to any final fraction of a share which the same Holder of one or
more Warrants would otherwise be entitled to purchase upon exercise thereof in
the same transaction, Holdings shall pay the cash value thereof determined as
provided in the Warrant Agreement.
All Common Stock or other securities issuable by Holdings upon the
exercise of Warrants shall be validly issued, fully-paid and nonassessable, and
Holdings shall pay all taxes and other governmental charges that may be imposed
under the laws of the United States of America or any political subdivision or
taxing authority thereof or therein in respect of the issue or delivery of such
shares or of other securities deliverable upon exercise of Warrants. Holdings
shall not be required, however, to pay any tax or other charge imposed in
connection with any transfer involved in the issue of any certificate for Common
Stock, and in such case Holdings shall not be required to issue or deliver any
stock certificate until such tax or other charge has been paid or it has been
established to the Warrant Agent's and Holdings' satisfaction that no tax or
other charge is due.
This Warrant Certificate and all rights hereunder are transferable by
the registered Holder hereof, in whole or in part, in accordance with the
provisions of the Warrant Agreement, on the register of Holdings maintained by
the Warrant Agent for such purpose at its office in New Houston, Texas, upon
surrender of this Warrant Certificate duly endorsed, or accompanied by a written
instrument of transfer form satisfactory to Holdings and the Warrant Agent duly
executed, with signatures guaranteed as specified in the attached Form of
Assignment, by the registered Holder hereof or his attorney duly authorized in
writing and upon payment of any necessary transfer tax or other governmental
charge imposed upon such transfer. Upon any partial transfer, Holdings will
issue and the Warrant Agent will deliver to such Holder a new Warrant
Certificate or Certificates with respect to any portion not so transferred.
Each taker and Holder of this Warrant Certificate, by taking and holding the
same, consents and agrees that prior to the registration of
A-3
transfer as provided in the Warrant Agreement, Holdings and the Warrant Agent
may treat the person in whose name the Warrants are registered as the absolute
owner hereof for any purpose and as the Person entitled to exercise the rights
represented hereby, any notice to the contrary notwithstanding.
This Warrant Certificate may be exchanged, in accordance with the
terms of the Warrant Agreement, at the office of the Warrant Agent maintained
for such purpose in Houston, Texas for Warrant Certificates representing the
same aggregate number of Warrants, each new Warrant Certificate to represent
such number of Warrants as the Holder hereof shall designate at the time of such
exchange.
Prior to the exercise of the Warrants represented hereby, the Holder
of this Warrant Certificate, as such, shall not be entitled to any rights of a
stockholder of Holdings, including, without limitation, the right to vote or to
consent to any action of the stockholders, to receive dividends or other
distributions, to exercise any preemptive right or to receive any notice of
meetings of stockholders, and shall not be entitled to receive any notice of any
proceedings of Holdings except as provided in the Warrant Agreement.
This Warrant Certificate shall be void and all rights evidenced hereby
shall cease on December 1, 2007, unless sooner terminated by the liquidation,
dissolution or winding-up of Holdings or as otherwise provided in the Warrant
Agreement upon the consolidation or merger of Holdings with, or sale of Holdings
to, another Person.
A-4
This Warrant Certificate shall not be valid for any purpose until it
shall have been countersigned by the Warrant Agent.
Dated:____________ STERLING CHEMICALS HOLDINGS, INC.
By:___________________________________
Name:
Title:
Countersigned:
XXXXXX TRUST AND SAVINGS BANK,
as Warrant Agent
By:__________________________________
Authorized Signatory
A-5
FORM OF REVERSE OF WARRANT CERTIFICATE
SUBSCRIPTION FORM
(to be executed only upon exercise of Warrant)
To: ______________
The undersigned irrevocably exercises ___________________ of the
Warrants represented by the Warrant Certificate for the purchase of ______
(subject to adjustment) share of Common Stock, par value $.01 per share, of
STERLING CHEMICALS HOLDINGS, INC. and herewith makes payment of $___________
(such payment being by wire transfer or by certified or official bank or bank
cashier's check payable to the order or at the direction of Sterling Chemicals
Holdings, Inc., or by the surrender of Warrants having an aggregate Spread (as
defined in the Warrant Agreement) equal to the Exercise Price of the Warrants
being exercised), all at the exercise price and on the terms and conditions
specified in the within Warrant Certificate and the Warrant Agreement therein
referred to, surrenders this Warrant Certificate and all right, title and
interest therein to and directs that the Common Stock deliverable upon the
exercise of such Warrants be registered or placed in the name and at the address
specified below and delivered thereto.
Dated: ___________ _______________________________________
(Signature of Owner)
_______________________________________
(Xxxxxx Xxxxxxx)
_______________________________________
(City) (State) (Zip Code)
Signature Guaranteed By/1/
-------------
/1/ The Holder's signature must be guaranteed by a member firm of a registered
national securities exchange or of the National Association of Securities
Dealers, Inc., a commercial bank or trust company having an office or
correspondent in the United States or an "eligible guarantor institution"
as defined by Rule 17Ad-15 under the Exchange Act.
A-6
Securities and/or check to be issued to: _________________
Please insert social security or identifying number: ____________
Name: _________________________________
Street Address: _________________________________
City, State and Zip Code: ________________________________
A-7
FORM OF ASSIGNMENT
FOR VALUE RECEIVED the undersigned registered holder of the within
Warrant Certificate hereby sells, assigns, and transfers unto the Assignee(s)
named below (including the undersigned with respect to any Warrants constituting
a part of the Warrants evidenced by the within Warrant Certificate not being
assigned hereby) all of the right of the undersigned under the within Warrant
Certificate, with respect to the number of Warrants set forth below:
Name(s) of Assignee(s): _______________________________________
Address: ______________________________________________________
No. of Warrants: ______________________________________________
Please insert social security or other identifying number of assignee(s):
and does hereby irrevocably constitute and appoints ________________________ the
undersigned's attorney to make such transfer on the books of
____________________ maintained for the purposes, with full power of
substitution in the premises.
Dated:
______________________________________
(Signature of Owner)
______________________________________
(Xxxxxx Xxxxxxx)
______________________________________
(City) (State) (Zip Code)
Signature Guaranteed By/2/
_______________________________________
----------------------
/2/ The Holder's signature must be guaranteed by a member firm of a registered
national securities exchange or of the National Association of Securities
Dealers, Inc., a commercial bank or trust company having an office or
correspondent in the United States or an "eligible guarantor institution" as
defined by Rule 17Ad-15 under the Exchange Act.
A-8
