EXHIBIT 8
TAG ALONG AGREEMENT
This Tag Along Agreement (the "AGREEMENT"), dated as of December 19, 2002,
is entered into by and among Sterling Chemicals, Inc., a Delaware corporation
(the "COMPANY"), Resurgence Asset Management, L.L.C., a Delaware limited
liability company ("RAM") on behalf of itself and each of the RAM Affiliates (as
defined below), and the Creditor's Committee (as defined below), on behalf of
the Qualifying Holders (as defined below).
The parties hereto propose to enter into this Agreement to govern the tag
along rights of certain holders of the Equity Securities (as defined below) of
the Company.
In consideration of the premises and the mutual covenants and agreements
contained in this Agreement and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company, RAM, on
behalf of itself and each of the RAM Affiliates, and the Creditor's Committee,
on behalf of all Qualifying Holders, hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Interpretation. Unless otherwise specified or the context
otherwise requires, (a) each term defined below shall have the meaning set forth
opposite such term in this Article 1 wherever it occurs in initially capitalized
form in this document, (b) words denoting the singular number shall include the
plural number and vice versa, and words denoting one gender shall include the
other gender, (c) all section and article references in this Agreement are to
the respective section and article of this Agreement, as the same may be
amended, waived or modified from time to time in accordance with Section 6.6
hereof, and (d) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
section or other subdivision. The section headings herein are for convenience
only and shall not affect the construction hereof. No provision of this
Agreement shall be interpreted or construed against any party solely because
such party or its legal representative drafted such provision.
"AFFILIATE" means (a) when used with reference to any partnership or
limited liability company, any Person that, directly or indirectly, owns or
controls 10% or more of either the capital or profit interests of such
partnership or limited liability company or is a partner of such partnership or
a member of such limited liability company or is a Person in which such
partnership or limited liability company has a 10% or greater direct or indirect
equity interest and (b) when used with reference to any corporation, any Person
that, directly or indirectly, owns or controls 10% or more of the outstanding
voting securities of such corporation or is a Person in which such corporation
has a 10% or greater direct or indirect equity interest. In addition, the term
"AFFILIATE," when used with reference to any Person, shall also mean any other
Person that, directly or indirectly, controls or is controlled by or is under
common control with such Person. As used in the preceding sentence, (x) the term
"control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of the entity referred to,
whether through ownership of voting securities, by contract or otherwise and
(y) the terms "controlling" and "controls" shall have meanings correlative to
the foregoing. Notwithstanding the foregoing, except solely for purposes of the
definition of "Independent Financial Expert" the Company will not be deemed to
be an Affiliate of any Restricted Holder or any of its partners or assignees.
"AGREEMENT" has the meaning set forth in the preamble.
"APPROVALS" means all approvals, permits, authorizations, consents,
licenses and agreements that are necessary or required in order for each party
hereto to perform its obligations hereunder.
"BENEFICIAL OWNER" means, with respect to any Equity Security, the
"beneficial owner" of such Equity Security within the meaning of Rule 13d-3
under the Exchange Act.
"COMPANY" has the meaning set forth in the preamble.
"CONFIRMATION ORDER" means an order confirming the Plan issued by the
Bankruptcy Court (as defined in the Plan).
"CREDITOR'S COMMITTEE" means the official committee of unsecured creditors
of the Company.
"EFFECTIVE DATE" means the date on which the Plan becomes effective.
"ELIGIBLE EQUITY SECURITIES" means (i) any Equity Securities originally
issued to an Unsecured Holder pursuant to Sections 4.3(d), (e) or (f) of the
Plan, (ii) any New SCI Common shares issued upon exercise or conversion of any
Eligible Equity Securities or (iii) any securities issued or issuable with
respect to any Eligible Equity Securities by exercise of rights thereunder or by
way of an in-kind stock dividend or a stock split or in connection with a
combination, reorganization or reclassification of shares; provided, however,
that if any such securities are Transferred to any Person who is not a
Qualifying Holder or an Affiliate thereof immediately prior to the Transfer
(other than by operation of law or by inheritance and without payment of any
consideration), such securities so Transferred shall cease to be "Eligible
Equity Securities" upon such Transfer.
"EQUITY SECURITIES" means any New SCI Common Shares, any New SCI Preferred
Shares and any New SCI Warrants and any securities issued or issuable with
respect to any Equity Securities by exercise of rights thereunder or by way of
an in-kind stock dividend or a stock split or in connection with a combination,
reorganization or reclassification of shares.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXERCISE NOTICE" has the meaning set forth in Section 2.2.3.
"HOLDER" means a Qualifying Holder or a Restricted Holder.
"INDEPENDENT FINANCIAL EXPERT" means any Financial Expert selected by the
Company that either (i) is reasonably acceptable to the Required Qualifying
Holders or (ii) is a firm (x)
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which does not (and whose directors, officers, employees and affiliates, to the
knowledge of the Company, do not) have a material direct or indirect financial
interest in the Company or any of its Affiliates (other than by virtue of
compensation paid for advice or opinions referred to in the exception to clause
(z)), as determined by the Board of Directors of the Company in its reasonable
good faith judgment, (y) which has not been, within the last two years, and, at
the time it is called upon to give independent financial advice to the Company
or any of its Affiliates, is not (and none of whose directors, officers,
employees or affiliates, to the knowledge of the Company, is) a promoter,
director or officer of the Company or any of its Affiliates or an underwriter
with respect to any of the securities of the Company or any of its Affiliates
and (z) which does not provide any advice or opinions to the Company or
Affiliates except as an independent financial expert in connection with this
Certificate of Designations or any warrant agreement executed pursuant to the
Plan.
"MINIMUM CONSIDERATION" means an amount equal to the exercise price of the
New SCI Warrants.
"NEW SCI COMMON SHARES" means shares of the common stock, $0.01 par value
per share, of the Company, or any securities issued or issuable with respect to
any New SCI Common Shares by exercise of rights thereunder or by way of an
in-kind stock dividend or a stock split or in connection with a combination,
reorganization or reclassification of shares.
"NEW SCI PREFERRED SHARES" means shares of the convertible preferred
stock, $0.01 par value per share, of the Company, or any securities issued or
issuable with respect to any New SCI Preferred Shares by exercise of rights
thereunder or by way of an in-kind stock dividend or a stock split or in
connection with a combination, reorganization or reclassification of shares.
"NEW SCI WARRANTS" means warrants to purchase New SCI Common Shares issued
pursuant to the Warrant Agreement.
"OWNER" means, with respect to any Equity Security, any beneficial owner
thereof within the meaning of either clause (1) or clause (2) of Rule 16a-1(a)
of the Exchange Act; and the verb "OWN" shall have a correlative meaning.
"OWNER REGISTER" means a register maintained by the Company of the name
and address of each Person who from time to time certifies to the Company, at
such Person's option, that such Person is the Beneficial Owner of Eligible
Equity Securities held of record by one or more other Persons.
"PARTICIPATION OFFER" has the meaning set forth in Section 2.1.
"PERSON" or "PERSON" means any individual, firm, partnership, corporation,
trust, association, company, limited liability company, joint stock company,
joint venture, governmental unit, or other entity or enterprise.
"PLAN" means that certain Joint Plan of Reorganization under Chapter 11 of
the Bankruptcy Code of Sterling Chemicals Holdings, Inc. and its Affiliated
Debtors, which was jointly administered under Case Nos. 01-37805-H4-11 through
01-37812-H4-11 under Chapter 11 of the United States Bankruptcy Code and which
was confirmed by the United States
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Bankruptcy Court for the Southern District of Texas, Houston Division, by order
entered November 21, 2002.
"PROPOSED CLOSING DATE" has the meaning set forth in Section 2.2.2.
"QUALIFYING ELIGIBLE EQUITY SECURITIES" means, with respect to any Equity
Securities that are both (i) Qualifying Equity Securities (other than New SCI
Preferred Shares) with respect to such Transaction and (ii) Eligible Equity
Securities.
"QUALIFYING EQUITY SECURITIES" means, with respect to any Transaction, (i)
any New SCI Common Shares, (ii) any New SCI Preferred Shares, and (iii) if the
aggregate per share consideration offered for New SCI Common Shares in such
Transaction (including in such per share computation the consideration being
paid for any New SCI Preferred Shares to be sold on the basis of the number of
New SCI Common Shares into which such New SCI Preferred Shares are convertible
but excluding in such computation such consideration allocable to the rights,
privileges and preferences of such New SCI Preferred Stock as determined by an
Independent Financial Expert) is equal or greater to the Minimum Consideration,
any New SCI Warrants.
"QUALIFYING HOLDER" means any Person that both (i) is a Beneficial Owner
of Eligible Equity Securities, other than any RAM Affiliate, and (ii) is (x) an
Unsecured Holder to which Eligible Equity Securities were issued pursuant to
Sections 4.3(d), (e) or (f) of the Plan, or (y) a Person (A) that was an
Affiliate of a Qualifying Holder immediately prior to the Transfer of Eligible
Equity Securities to such Person or (B) to which Eligible Equity Securities were
Transferred by operation of law or by inheritance and without payment of any
consideration.
"QUALIFYING RESTRICTED EQUITY SECURITIES" means, with respect to any
Transaction, any Equity Securities that are both (i) Qualifying Equity
Securities with respect to such Transaction and (ii) Restricted Equity
Securities.
"QUALIFYING TRANSACTION" means any Transaction in which the aggregate of
the Qualifying Restricted Equity Securities Transferred by Restricted Selling
Holders and, when aggregated with any Qualifying Equity Securities Transferred
by one or more other Persons in any transaction or series of transactions
related to such Transaction, in each case to one or more Person(s) (other than
any RAM Affiliate), represent in the aggregate 50% or more of all Qualifying
Equity Securities (such percentage to be computed on the basis of the exercise
or conversion into New SCI Common Shares of any Equity Securities constituting
Qualifying Equity Securities) outstanding immediately prior to such Transaction.
"RAM" has the meaning set forth in the preamble.
"RAM AFFILIATE" means (i) RAM, (ii) any current or future Affiliate of RAM
or (iii) any fund or account managed by RAM or any current or future Affiliate
of RAM.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights Agreement
executed on the date hereof among the Company and RAM on behalf of itself and
each of the RAM Affiliates, and the Creditor's Committee, on behalf of the
Shareholders (as such term is defined therein).
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"REQUIRED QUALIFYING HOLDERS" means Qualifying Holders who own more than
50% of the aggregate Eligible Equity Securities owned by all Qualifying Holders.
"RESTRICTED EQUITY SECURITIES" means any Equity Securities originally
issued to a RAM Affiliate pursuant to the Plan or the Investment Agreement and
any securities issued or issuable with respect to any Restricted Equity
Securities by exercise of rights thereunder or by way of like-kind stock
dividend or stock split or in connection with a combination, reorganization or
reclassification of shares; provided, however, that if any such securities are
Transferred to any Person (other than a RAM Affiliate), the securities so
Transferred shall cease to be "Restricted Equity Securities" upon such Transfer.
"RESTRICTED HOLDER" means any owner of any Restricted Equity Securities.
"RESTRICTED SELLING HOLDER" has the meaning set forth in the definition of
"Transaction."
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SPECIFIED RAM AFFILIATES" means each of the RAM Affiliates specified on
Annex B hereto.
"TAG ALONG NOTICE" has the meaning set forth in Section 2.2.2.
"TAG ALONG RIGHTS" has the meaning set forth in Section 2.2.2.
"TAG ALONG TERMS" has the meaning set forth in Section 2.2.2.
"TRANSACTION" means any single transaction or series of related
transactions in which any one or more Restricted Holders (each a "RESTRICTED
SELLING HOLDER") Transfer any Restricted Equity Securities to any one or more
Persons.
"TRANSFER" means, with respect to any Equity Security, (i) to sell,
dispose of or otherwise transfer such Equity Security or any interest therein or
(ii) to effect a sale, disposition or other transfer of shares of capital stock
of or other interest in the Holder that is the Beneficial Owner of such Equity
Security or any other transaction which transfer or other transaction results in
a Person other than such Holder (including any group of Persons deemed to be a
"person" pursuant to Section 13(g)(3) of the Exchange Act) becoming the
Beneficial Owner of such Equity Security. Any transaction resulting in a Person
becoming the Beneficial Owner of an Equity Security of which any Holder had been
the Beneficial Owner shall be deemed a "TRANSFER" of such Equity Security by
such Holder to such Person.
"TRANSFEREE" has the meaning set forth in Section 2.2.1.
"UNSECURED HOLDER" means a holder of a General Unsecured Claim, an Old
Unsecured Note Claim or a Self-Insured Tort Claim (as such terms are defined in
the Plan), in each case other than any RAM Affiliate.
"WARRANT AGENT" means the warrant agent pursuant to the Warrant Agreement.
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"WARRANT AGREEMENT" means the warrant agreement, dated as of the Effective
Date, between the Company and the Warrant Agent providing for the issuance of
the New SCI Warrants, as the same may be amended, modified, restated or
supplemented and be in effect from time to time.
ARTICLE II
TAG ALONG RIGHTS
Section 2.1 Participation Right. No Restricted Holders shall Transfer any
Qualifying Restricted Equity Securities in any Qualifying Transaction unless (i)
such Restricted Holder shall cause each Qualifying Holder to have the right to
sell in such Qualifying Transaction (a "PARTICIPATION OFFER") all or, at such
Qualifying Holder's option, any portion of the Qualifying Eligible Equity
Securities owned by such Qualifying Holder not to exceed the amount equal to the
product obtained by multiplying (A) the aggregate Qualifying Eligible Equity
Securities owned by such Qualifying Holder as of the date of the related Tag
Along Notice (as defined below) by (B) a fraction, the numerator of which is the
aggregate Qualifying Restricted Equity Securities being Transferred by all
Restricted Holders in such Qualifying Transaction and the denominator of which
is the total Qualifying Restricted Equity Securities owned by all such
Restricted Holders as of the date of the Tag Along Notice, (ii) such Qualifying
Equity Securities sought to be sold in accordance with such Participation Offer
are purchased at the same aggregate per share consideration (including in such
per share computation the consideration being paid for any New SCI Preferred
Shares to be sold on the basis of the number of New SCI Common Shares into which
such New SCI Preferred Shares are convertible but excluding in such computation
such consideration allocable to the rights, privileges and preferences of such
Preferred Stock as determined by an Independent Financial Expert) and otherwise
on the same economic terms and conditions applicable to the Transfers to be made
by the Restricted Selling Holders pursuant to such Qualifying Transaction and
(iii) any Qualifying Eligible Equity Securities sought to be sold by Qualifying
Holders in accordance with such Participation Offer are purchased on the terms
and conditions specified in this Article II.
Section 2.2 Terms of Participation Offer.
2.2.1 Any Participation Offer shall be conditioned upon (i) the
consummation of the Qualifying Transaction with the proposed
transferee named in the Tag Along Notice (the "TRANSFEREE"), and
(ii) each Qualifying Holder's execution and delivery of all
agreements and other documents as each Restricted Selling Holder is
required to execute and deliver in connection with such Qualifying
Transaction or as otherwise may be reasonably requested by RAM or
the Transferee (provided that the Qualifying Holder shall not be
required to make any representations or warranties in connection
with such sale other than representations and warranties that (A)
such Qualifying Holder is the beneficial owner of such Qualifying
Holder's Qualifying Eligible Equity Securities, (B) the Qualifying
Eligible Equity Securities to be sold by such Qualifying Holder in
such Qualifying Transaction are free and clear of all liens, claims,
and encumbrances, (C) such Qualifying Holder has the power and
authority to effect such sale) and (D) such Person constitutes a
Qualifying Holder within the meaning of this Agreement with
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respect to the Eligible Equity Securities sought to be sold and set
forth a brief description of the manner in which such Qualifying
Holder became the Beneficial Owner of such Eligible Equity
Securities. If any Qualifying Holder shall accept the Participation
Offer, each Restricted Selling Holder shall reduce, to the extent
necessary, the number of Qualifying Restricted Equity Securities
such Restricted Selling Holder otherwise would have Transferred in
the Qualifying Transaction so as to permit those Qualifying Holders
who have accepted the Participation Offer to sell the number of
Qualifying Eligible Equity Securities that they are entitled to sell
under this Article II, and the Restricted Selling Holders and such
Qualifying Holders shall transfer in the aggregate the number of
Qualifying Equity Securities specified in the Participation Offer in
accordance with the terms of such transfer as set forth in the
Participation Offer. No reduction in the number of shares
Transferred by any Restricted Selling Holder in any Transaction as a
result of this Section 2.2 shall cause such Transaction to cease to
be a Qualifying Transaction; provided, however, RAM may, in its sole
discretion, and at any time without prior notice, abandon or
discontinue any proposed Transaction.
2.2.2 The Restricted Selling Holders shall, no later than 30 days
(or such greater period as may be required by applicable law) prior
to the date of closing of any Qualifying Transaction, deliver to (i)
each Qualifying Holder, and (ii) each Person then on record in the
Owner Register as a Beneficial Owner of Eligible Equity Securities,
a written notice (the "TAG ALONG NOTICE") of such Qualifying
Transaction and setting forth: (A) the name and address of the
Transferee, (B) the number of Qualifying Restricted Equity
Securities proposed to be Transferred thereto and the related
Restricted Selling Holders, (C) the percentage the aggregate
Qualifying Restricted Equity Securities being Transferred by all
Restricted Selling Holders in such Qualifying Transaction represent
of the aggregate Qualifying Restricted Equity Securities then owned
by all such Restricted Holders, (D) the date on which such
Transaction is proposed to be effected (the "PROPOSED CLOSING
DATE"), (E) the amount and form of consideration to be paid in
accordance with Section 2.1 and all other terms and conditions of
payment offered by such Transferee in the Qualifying Transaction
("TAG ALONG TERMS"), (F) the definitions of the terms "Affiliate,"
"Beneficial Owner," "Company," "Eligible Equity Security," "Equity
Security," "Exchange Act," "Holder," "New SCI Common Shares," New
SCI Preferred Shares," "New SCI Warrants," "Person," "Plan,"
"Qualifying Holder," "RAM," "RAM Affiliate," "Restricted Equity
Securities," "Restricted Holder," "Transfer," "Unsecured Holder,"
"Warrant Agent," and "Warrant Agreement" as used in this Agreement
and (G) such other information as may be required under applicable
law in respect of such Participation Offer. The Tag Along Notice
shall also affirmatively represent that the Restricted Selling
Holders have informed the applicable Transferee of the rights
granted under this Article II to Qualifying Holders (the "TAG ALONG
RIGHTS").
2.2.3 In order to exercise its Tag Along Right, a Qualifying Holder
shall deliver written notice to RAM (or such other single designee
of the Restricted Selling Holders as shall be specified in the Tag
Along Notice) (the "EXERCISE NOTICE"),
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within 20 days following the receipt by such Qualifying Holders of
the Tag Along Notice. The Exercise Notice delivered by any
Qualifying Holder shall (i) state the number of Qualifying Eligible
Equity Securities that such Qualifying Holder wishes to sell to the
Transferee subject to the maximum number of Qualifying Eligible
Equity Securities permitted to be sold by such Qualifying Holder
determined pursuant to Section 2.1 hereof, (ii) contain an
irrevocable agreement of such Qualifying Holder to sell such
Qualifying Eligible Equity Securities in the Qualifying Transaction
described in the Tag-Along Notice and this Section 2.2, (iii)
contain the following representations and warranties: that (A) such
Qualifying Holder is the beneficial owner of such Qualifying
Holder's Qualifying Eligible Equity Securities, (B) the Qualifying
Eligible Equity Securities to be sold by such Qualifying Holder in
such Qualifying Transaction are free and clear of all liens, claims,
and encumbrances, and (C) such Qualifying Holder has the power and
authority to effect such sale, (iv) be accompanied by the
certificate or certificates representing such Qualifying Eligible
Equity Securities (which shall be free and clear of liens), duly
endorsed in blank or accompanied by a duly executed stock or
security assignment separate from the certificate, in each case with
the signature(s) thereon guaranteed by a commercial bank or trust
company or a member of a national securities exchange or of the
National Association of Securities Dealers, Inc. and (v) contain a
representation and warranty that such Person constitutes a
Qualifying Holder within the meaning of this Agreement with respect
to the Eligible Equity Securities sought to be sold and set forth a
brief description of the manner in which such Qualifying Holder
became the Beneficial Owner of such Eligible Equity Securities. RAM
or such designee of the Restricted Selling Holders will cause the
certificates delivered in accordance with Section 2.2.3(iv) to be
held with due care in escrow for delivery against payment therefor
as specified herein.
2.2.4 Upon timely delivery of an Exercise Notice by any Qualifying
Holder, such Qualifying Holder shall be entitled to sell in the
Qualifying Transaction on the Tag Along Terms the number of
Qualifying Eligible Equity Securities set forth in the Exercise
Notice; and neither the Restricted Selling Holders nor any other
Restricted Holder shall consummate the Transfer of any of its
Qualifying Restricted Equity Securities to the Transferee described
in the Tag Along Notice if all of the Qualifying Eligible Equity
Securities of Qualifying Holders specified in such Exercise Notice
are not purchased on the Tag Along Terms. If within 20 days after
the receipt of the Tag-Along Notice, any Qualifying Holder has not
accepted the offer contained in the Tag-Along Notice, the Restricted
Selling Holders shall have until the date 60 days after the Proposed
Closing Date in which to Transfer the Qualifying Restricted Equity
Securities described in the Tag-Along Notice, on the terms and
conditions set forth in such Tag-Along Notice. If, at the end of
such 60-day period, the Restricted Selling Holders have not
completed the Transfer of Qualifying Restricted Equity Securities of
the Restricted Selling Holders and Qualifying Eligible Equity
Securities of any Qualifying Holder in accordance with the terms and
conditions set forth in the Tag-Along Notice, RAM or the designee
shall return to such Qualifying Holder all certificates representing
Qualifying Eligible Equity Securities which such
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Qualifying Holder delivered for Transfer pursuant to this Section
2.2.3. Notwithstanding anything to the contrary contained in this
Agreement, there shall be no liability on the part of the Restricted
Selling Holders to any Qualifying Holder arising from the failure of
any Transfer of Qualifying Restricted Equity Securities to the
Transferee described in any Tag-Along Notice to be consummated for
any reason whatsoever.
2.2.5 At the closing of any Qualifying Transaction, the Restricted
Selling Holders shall, and RAM shall cause the Restricted Selling
Holders to, remit or shall cause to be remitted to each Qualifying
Holder who timely delivered Exercise Notices with respect thereto
the consideration required pursuant to the Tag Along Terms less an
amount equal to such Qualifying Holder's pro rata portion of the
reasonable documented out-of-pocket expenses actually incurred by
the Restricted Selling Holders in connection with such Qualifying
Transaction against delivery of (i) certificates for such Equity
Securities duly endorsed and (ii) in the event consideration other
than cash is received from the Transferee in such Qualifying
Transaction, a cash reimbursement of such Qualifying Holder's pro
rata portion of the reasonable documented out-of-pocket expenses
actually incurred by the Restricted Selling Holders in connection
with such Qualifying Transaction.
2.2.6 To the extent Restricted Equity Securities are Transferred in
a Transaction other than in a direct transfer thereof, the aggregate
per share consideration offered for New SCI Common Shares in such
Transaction shall be deemed to be the portion of the overall
consideration being paid in such Transaction as shall be fairly
allocable to one share thereof (including in such per share
computation the consideration being paid for any New SCI Preferred
Shares to be sold on the basis of the number of New SCI Common
Shares into which such New SCI Preferred Shares are convertible but
excluding in such computation such consideration allocable to the
rights, privileges and preferences of such New SCI Preferred Shares
as determined by an Independent Financial Expert).
Section 2.3 Owner Register; Reporting. The Company shall maintain an Owner
Register. In addition, with respect to the first Annual Report on Form 10-K (or
successor form) filed after the date of this Agreement the Company files with
the Securities and Exchange Commission, the Company shall include (i) under Item
5 thereof a brief summary of the rights afforded to Qualifying Holders hereunder
and of the existence and the procedures relating to the Owner Register and (ii)
a copy of this Agreement as an exhibit thereto (other than Annex B hereto). Upon
written request by any Qualifying Holder the Company shall, within 5 business
days of the Company's receipt of such written request, provide a copy of this
Agreement to any such Qualifying Holder.
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ARTICLE III
LIMITATIONS ON TRANSFER
Section 3.1 Restrictions on Transfer. The Restricted Equity Securities
owned by any Restricted Holder shall not be Transferred, and no Restricted
Holder shall, and RAM shall not permit any RAM Affiliate to, Transfer any
Restricted Equity Securities, in any case, without satisfaction of (i) the
conditions specified in this Article III and (ii) if applicable, Article II
hereof. Any Transfer of Restricted Equity Securities by any Restricted Holder in
violation of this Article III or, if applicable, Article II hereof shall be void
ab initio and of no force or effect. In the event any Restricted Equity Security
is proposed to be Transferred from a Restricted Holder to any RAM Affiliate, the
transferring Restricted Holder and RAM shall cause such Person to agree to take
and own such Restricted Equity Securities subject to the provisions and upon the
conditions specified in this Agreement with respect to such Restricted Equity
Securities and (if Transferred to a RAM Affiliate that is not a Specified RAM
Affiliate) shall, prior to consummating such Transfer, cause such Person to
which such Restricted Equity Securities are Transferred to acknowledge such
agreement in writing by execution of an instrument in the form of Annex A hereto
and delivery thereof to the Company in accordance with Section 6.1. The Company
shall not register the transfer on its books of any certificate representing
shares of Restricted Equity Securities nor issue any certificate in lieu thereof
unless all the conditions hereof have been complied with. The foregoing
notwithstanding, nothing in this Agreement shall restrict any Transfer of
Restricted Equity Securities by any RAM Affiliate (i) to any other RAM Affiliate
provided that such RAM Affiliate to which any Restricted Equity Securities are
Transferred (if not a Specified RAM Affiliate) agrees in writing (by execution
of an instrument in the form of Annex A hereto and delivered as aforesaid) to
hold such Restricted Equity Securities subject to the terms hereof or (ii) to
any Person (other than a RAM Affiliate) in a transaction not constituting a
Qualifying Transaction.
Section 3.2 Restrictive Legend. Any certificate evidencing any Restricted
Equity Security owned by any Restricted Holder shall bear, and the Company and
RAM shall cause each certificate evidencing any Restricted Equity Security to
bear, a legend in substantially the following form:
THIS SECURITY IS SUBJECT TO RESTRICTIONS ON TRANSFER AND OTHER
TERMS AND CONDITIONS SET FORTH IN THE TAG ALONG AGREEMENT DATED
AS OF DECEMBER 19, 2002, A COPY OF WHICH MAY BE OBTAINED FROM
STERLING CHEMICALS, INC. AT ITS PRINCIPAL EXECUTIVE OFFICES.
Section 3.3 Termination of Certain Restrictions. Whenever any Restricted
Equity Security is Transferred by any Restricted Holder (i) in a Qualifying
Transaction subject to and effected in accordance with Article II hereof or (ii)
to any Person (other than a RAM Affiliate) in a transaction not constituting a
Qualifying Transaction, the transferee shall be entitled to receive from the
Company, at the Company's expense, a certificate evidencing such Equity Security
not bearing the restrictive legend set forth in Section 3.2.
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ARTICLE IV
REPRESENTATIONS, WARRANTIES AND AGREEMENTS
Section 4.1 Representations, Warranties and Agreements. RAM, on behalf of
itself and each RAM Affiliate (as applicable), represents and warrants to, and
agrees with, the Company and each Qualifying Holder as follows:
4.1.1 RAM has the requisite power and authority to execute and
deliver this Agreement and to perform its obligations hereunder, and
the execution, delivery and performance of this Agreement and the
performance by RAM of its obligations hereunder have been authorized
by all requisite action on the part of RAM. This Agreement has been
duly and validly executed and delivered by RAM on it own behalf and
on behalf of each RAM Affiliate and constitutes a legal, valid and
binding obligation of RAM and each RAM Affiliate enforceable against
RAM and each RAM Affiliate in accordance with its terms, subject to
applicable bankruptcy, reorganization, insolvency, moratorium and
other laws affecting creditors' rights generally from time to time
in effect and to general equitable principles.
4.1.2 RAM has full legal authority and power of attorney to bind
each RAM Affiliate to comply with its obligations hereunder in all
respects, and RAM has such knowledge of each RAM Affiliate and its
affairs to have a reasonable basis for making the representations
and warranties of each RAM Affiliate made on its behalf by RAM
herein.
4.1.3 No Approvals (other than those which have been applied for and
obtained) are required for the execution, delivery and performance
of this Agreement and the performance by RAM or any RAM Affiliate of
its obligations hereunder.
4.1.4 No RAM Affiliate has any contract, undertaking, agreement or
arrangement with any Person to Transfer to such Person or to any
third Person any of the Restricted Equity Securities.
4.1.5 The rights granted to the Qualifying Holders hereunder do not
in any way conflict with and are not inconsistent with the rights
granted or obligations accepted under any other agreement to which
any RAM Affiliate is a party.
4.1.6 RAM shall cause each RAM Affiliate to take all actions
necessary to comply with its obligations under this Agreement.
Section 4.2 Company Filings Agreement. At all times during the period
commencing with the Effective Date (as defined in the Plan) and continuing
thereafter for 18 months, the Company shall cause the New SCI Common Shares to
be registered under Section 12(g) of, and shall timely file with the Securities
and Exchange Commission all reports required to be filed pursuant to Section 13
of, the Exchange Act.
11
ARTICLE V
TERMINATION
Section 5.1 Term of Agreement. This Agreement shall automatically
terminate at the time when the remaining Restricted Equity Securities represent
in the aggregate less than 50% of all Equity Securities (such percentage to be
computed on the basis of the exercise or conversion into New SCI Common Shares
of any Equity Securities).
ARTICLE VI
MISCELLANEOUS
Section 6.1 Notices. Any notices or other communications required or
permitted hereunder shall be in writing, and shall be sufficiently given or
delivered if made by hand delivery, by telecopier or registered or certified
mail, postage prepaid, return receipt requested, addressed as follows (or at
such other address as may be substituted by notice given as herein provided):
If to the Company:
Sterling Chemicals, Inc.
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxxx
Fax Number: (000) 000-0000
Attention: Xxxxxxx X. Xxxx
Fax Number: (000) 000-0000
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxx X. Xxxxxx
Fax Number: (000) 000-0000
If to a RAM Affiliate:
Resurgence Asset Management, L.L.C.
00 Xxx Xxxx Xxxxxx
Xxxxx Xxxxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxx
Fax Number: (000) 000-0000
Attention: Xxxx Xxxxxxxxx
Fax Number: (000) 000-0000
12
with a copy to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxx
Fax Number: (000) 000-0000
If to any Qualifying Holder of any Eligible Equity Security, at the
address of the holder of record of such Eligible Equity Security
listed on the books of the Company, with a copy to (i) each Person
then on record in the Owner Register as a Beneficial Owner of such
Eligible Equity Security and (ii):
Akin Gump Xxxxxxx Xxxxx & Xxxx LLP
000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxx
Fax Number: (000) 000-0000.
Any notice or communication hereunder shall be deemed to have been given
or delivered as of the date so delivered if personally delivered; when receipt
is acknowledged, if telecopied; and five calendar days after mailing if sent by
registered or certified mail (except that a notice of change of address shall
not be deemed to have been given until actually received by the addressee).
Failure to mail a notice or communication to a Qualifying Holder or any
defect in it shall not affect its sufficiency with respect to other Qualifying
Holders. Failure to mail a notice or communication to a Restricted Holder or any
defect in it shall not affect its sufficiency with respect to other Restricted
Holders. If a notice or communication is mailed in the manner provided above, it
is duly given, whether or not the addressee receives it.
Section 6.2 Legal Holidays. A "Legal Holiday" used with respect to a
particular place of payment is a Saturday, a Sunday or a day on which banking
institutions at such place are not required to be open. If a payment date is a
Legal Holiday at such place, payment may be made at such place on the next
succeeding day that is not a Legal Holiday, and no interest on the amount of
such payment shall accrue for the intervening period.
Section 6.3 Governing Law; Jurisdiction. EXCEPT TO THE EXTENT INCONSISTENT
WITH THE BANKRUPTCY CODE, THIS AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REFERENCE TO PRINCIPLES OF CONFLICTS OR CHOICE OF LAW UNDER WHICH THE LAWS OF
ANY OTHER JURISDICTION WOULD APPLY.
Section 6.4 Counterparts. This Agreement may be executed by the parties
hereto in counterparts and by telecopy, each of which shall be deemed to
constitute an original and all of which together shall constitute one and the
same instrument. With respect to signatures
13
transmitted by telecopy, upon request by either party to the other party, an
original signature of such other party shall promptly be substituted for its
facsimile.
Section 6.5 Invalid Provisions. If any provision of this Agreement is held
to be illegal, invalid or unenforceable under any present or future laws, rules
or regulations, and if the rights or obligations of the Company, the Restricted
Holders and the Qualifying Holders under this Agreement will not be materially
and adversely affected thereby, (a) such provision will be fully severable, (b)
this Agreement will be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part hereof, (c) the remaining
provisions of this Agreement will remain in full force and effect and will not
be affected by the illegal, invalid or unenforceable provision or by its
severance herefrom and (d) in lieu of such illegal, invalid or unenforceable
provision, there will be added automatically as a part of this Agreement a
legal, valid and enforceable provision as similar in terms to such illegal,
invalid or unenforceable provision as may be possible.
Section 6.6 No Waivers; Amendments.
6.6.1 No failure or delay on the part of any Person in exercising
any right, power or remedy hereunder, except as specified in Section
2.2.3, shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right, power or remedy preclude any
other or further exercise thereof or the exercise of any other
right, power or remedy. The remedies provided for herein are
cumulative and are not exclusive of any remedies that may be
available to or any Person at law or in equity or otherwise.
6.6.2 Any provision of this Agreement may be amended or waived if,
but only if, such amendment or waiver is in writing and is signed by
or on behalf of the Company, RAM on behalf of the Restricted Holders
and the Required Qualifying Holders; provided that no such amendment
or waiver shall, (i) unless signed by all of the Qualifying Holders
affected, (A) amend the provisions of this Section 6.6.2 or (B)
change the percentage of Qualifying Holders which shall be required
for the Qualifying Holders or any of them to take any action under
this Section 6.6.2 or any other provision this Agreement, and (ii)
unless signed by RAM on behalf of the Restricted Holders affected,
amend the provisions of this Section 6.6.2.
Section 6.7 Specific Performance. The Company and RAM, on behalf of itself
and each RAM Affiliate, hereby acknowledge and agree, and each Restricted
Holder, by acceptance of or otherwise becoming an owner of a Restricted Equity
Security, shall be deemed to have acknowledged and agreed, that there may be no
adequate remedy at law if the Company or any Restricted Holder fails to perform
any of its obligations under this Agreement, and accordingly the Company and
each Qualifying Holder, in addition to any other remedy to which it may be
entitled at law or in equity, shall be entitled to compel specific performance
of the obligations of any other Person under this Agreement in accordance with
the terms and conditions of this Agreement, in any court of the United States or
any State thereof having jurisdiction.
Section 6.8 Third Party Beneficiaries. This Agreement shall be binding
upon each Restricted Holder and the Company, and their respective successors and
assigns and shall inure
14
the benefit of the Qualifying Holders from time to time of the Eligible Equity
Securities. Each Restricted Holder, by acceptance of or otherwise becoming an
owner of a Restricted Equity Security, agrees to all of the terms and provisions
of this Agreement applicable thereto. This Agreement and the obligations of each
Restricted Holder provided for herein are expressly for the benefit of each
Qualifying Holder.
Section 6.9 Entire Agreement. This Agreement sets forth all of the
promises, agreements, conditions, understandings, warranties and representations
between the parties with respect to the matters contemplated hereby, and
supersedes all prior agreements, arrangements and understandings between the
parties with respect thereto, whether written, oral or otherwise. There are no
promises, agreements, conditions, understandings, warranties or representations,
oral or written, express or implied, between the parties concerning the subject
matter hereof except as set forth herein.
[Remainder of page intentionally left blank.]
15
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first written above.
STERLING CHEMICALS, INC.
By: /s/ X. X. XXXXX
-------------------------------------------
Name: X. X. Xxxxx
-----------------------------------------
Title: Co-Chief Executive Officer
----------------------------------------
RESURGENCE ASSET MANAGEMENT, L.L.C.
on behalf of itself and each of the RAM Affiliates
By: /s/ XXXXX X. XXXXX
-------------------------------------------
Name: Xxxxx X. Xxxxx
-----------------------------------------
Title: Co-Chairman & Chief Investment Officer
----------------------------------------
OFFICIAL COMMITTEE OF UNSECURED CREDITORS
on behalf of the Unsecured Holders
By: Conseco Capital Management, Inc., Chair
By: /s/ XXXX XXXXXX
-------------------------------------------
Name: Xxxx Xxxxxx
Title: Assistant Vice President
ANNEX A
The undersigned is a proposed owner (within the meaning set forth in the
Tag Along Agreement referred to below) of Restricted Equity Securities and
hereby agrees to become a Restricted Holder under, and subject to the terms and
provisions of, that certain Tag Along Agreement, dated as of December 19, 2002
(the "TAG ALONG AGREEMENT"), by and among Sterling Chemicals, Inc., Resurgence
Asset Management, L.L.C., on behalf of itself and each of the RAM Affiliates,
and the Creditor's Committee, on behalf of the Qualifying Holders. This
instrument is expressly for the benefit of each of the Qualifying Holders.
Capitalized terms used in this agreement and not otherwise defined herein shall
have the meanings set forth in the Tag Along Agreement
Dated: _________________ ____, 20___.
[NAME OF RESTRICTED HOLDER]
By:
-----------------------------------
Name:
-----------------------------------
Title:
-----------------------------------
Address:
-----------------------------------
Facsimile No.:
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