EXHIBIT 7
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REGISTRATION RIGHTS AGREEMENT
BY AND AMONG
STERLING CHEMICALS, INC.,
AND
RESURGENCE ASSET MANAGEMENT, L.L.C.,
on behalf of itself and certain of its and its affiliates' funds and accounts
Dated as of December 19, 2002
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TABLE OF CONTENTS
PAGE
ARTICLE 2. DEMAND REGISTRATION............................................ 4
SECTION 2.1 Request for Demand Registration................. 4
SECTION 2.2 Notice of Demand Registrations.................. 5
SECTION 2.3 Priority on Demand Registrations................ 5
ARTICLE 3. SHELF REGISTRATION......................................... 6
SECTION 3.1 Request for Shelf Registration.................. 6
SECTION 3.2 Notice of Shelf Registration.................... 7
ARTICLE 4. PIGGYBACK REGISTRATIONS.................................... 7
SECTION 4.1 Holder Piggyback Registration................... 7
SECTION 4.2 Priority on Piggyback Registrations............. 8
ARTICLE 5. STANDSTILL AND SUSPENSION PERIODS.......................... 8
SECTION 5.1 Company Standstill Period....................... 8
SECTION 5.2 Suspension Period............................... 8
SECTION 5.3 Holder Standstill Period........................ 9
SECTION 5.4 Limit on Other Registrations.................... 9
ARTICLE 6. REGISTRATION PROCEDURES.................................... 10
SECTION 6.1 Company Obligations............................. 10
SECTION 6.2 Holder Obligations.............................. 14
ARTICLE 7. INDEMNIFICATION............................................ 15
SECTION 7.1 Indemnification by the Company.................. 15
SECTION 7.2 Indemnification by the Holders.................. 16
SECTION 7.3 Notice of Claims, Etc........................... 17
SECTION 7.4 Contribution.................................... 18
SECTION 7.5 Indemnification Payments........................ 18
SECTION 7.6 Remedies........................................ 18
ARTICLE 8. EXPENSES................................................... 18
ARTICLE 9. CURRENT PUBLIC INFORMATION................................. 19
ARTICLE 10. SELECTION OF UNDERWRITERS.................................. 19
ARTICLE 11. MISCELLANEOUS.............................................. 20
SECTION 11.1 Term; Effect of Termination..................... 20
SECTION 11.2 Notice Generally................................ 20
SECTION 11.3 Successors and Assigns.......................... 21
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TABLE OF CONTENTS
(CONTINUED)
PAGE
SECTION 11.4 Amendments and Waivers.......................... 21
SECTION 11.5 Severability.................................... 21
SECTION 11.6 Headings........................................ 21
SECTION 11.7 No Third Party Rights........................... 21
SECTION 11.8 Governing Law................................... 22
SECTION 11.9 Counterparts.................................... 22
SECTION 11.10 Entire Agreement................................ 22
SECTION 11.11 Specific Performance............................ 22
SECTION 11.12 Further Assurances.............................. 22
SECTION 11.13 Inconsistent Instructions....................... 22
SECTION 11.14 Registration Rights to Others................... 22
SECTION 11.15 Rules of Construction........................... 22
SECTION 11.16 Interpretation.................................. 22
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This REGISTRATION RIGHTS AGREEMENT ("this AGREEMENT"), dated as of
December 19, 2002, by and among Sterling Chemicals, Inc., a Delaware corporation
(the "COMPANY"), and Resurgence Asset Management, L.L.C., a Delaware limited
liability company ("RAM"), on behalf of itself and certain of its and its
affiliates' funds and accounts.
W I T N E S S E T H:
WHEREAS, the Joint Plan of Reorganization under Chapter 11 of the
Bankruptcy Code of Sterling Chemicals Holdings, Inc. and certain affiliated
debtors, dated October 14, 2002 (the "PLAN"), with respect to the Company and
certain of its Affiliates (collectively, the "DEBTORS") was confirmed by order,
entered November 21, 2002, of the United States Bankruptcy Court for the
Southern District of Texas, Houston Division, in Case 01-37805-H4-11; and
WHEREAS, pursuant to the Plan, the Company will issue its common
stock, par value $0.01 (the "COMMON STOCK"), warrants exercisable for Common
Stock (the "WARRANTS") and preferred stock convertible into Common Stock (the
"PREFERRED STOCK") in exchange for, or principally in exchange for, certain
claims against the Debtors;
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants herein contained, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged and affirmed, the
parties hereto, intending to be legally bound, hereby agree as follows:
ARTICLE 1. DEFINITIONS
All capitalized terms used but not defined in this Agreement have the
respective meanings assigned to such terms in the Plan. As used in this
Agreement, the following capitalized terms (in their singular and plural forms,
as applicable) have the following meanings:
"ACTION" has the meaning assigned to such term in Section 7.3.
"AFFILIATE", with respect to the Company or any other registrant under a
Registration Statement, has the meaning assigned to such term in Rule 144(a)(1)
of the Securities Act and, with respect to any Holder, means a person that
directly or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, such Holder.
"BUSINESS DAY" means any day which is not a day on which banking
institutions in New York City, New York or Houston, Texas are authorized or
obligated by law or executive order to close.
"COMMISSION" means the United States Securities and Exchange Commission
and any successor United States federal agency or governmental authority having
similar powers.
"COMMON STOCK" has the meaning assigned to such term in the recitals to
this Agreement.
"COMPANY STANDSTILL PERIOD" has the meaning assigned to such term in
Section 5.1.
"COMPANY" has the meaning assigned to such terms in the recitals to this
Agreement.
"DEBTORS" has the meaning assigned to such term in the recitals to this
Agreement.
"DEMAND REGISTRATION" has the meaning assigned to such term in Section
2.1.
"DEMAND REQUEST" has the meaning assigned to such term in Section 2.1.
"EFFECTIVE DATE" has the meaning assigned to such term in the Plan (i.e.
December 19, 2002).
"EQUITY SHARES" means shares of Common Stock held by any Person assuming
the exercise of all Warrants held by such Person and the conversion of all
Preferred Stock held by such Person.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, or
any successor statute, and the rules and regulations of the Commission
thereunder.
"HOLDER SHELF OFFERING" has the meaning assigned to such term in Section
3.2(a).
"HOLDER" means RAM and its Affiliates, any Permitted Transferee and any
Person which, together with its Affiliates, holds a number of Equity Shares
equal to 5% or more of the number of the Equity Shares outstanding as of the
Effective Date, provided, however, that at such time as any Holder, together
with its Affiliates, shall cease to own an aggregate number of Equity Shares
constituting Registrable Securities equal to at least 5% of the number of the
Equity Shares outstanding as of the Effective Date, such Person shall cease to
be a "Holder" for purposes hereof.
"INSPECTORS" has the meaning assigned to such term in Section 6.1(n).
"JOINING HOLDER" has the meaning assigned to such term in Section 2.2.
"LOSS" has the meaning assigned to such term in Section 7.1.
"MATERIAL ADVERSE EFFECT" has the meaning assigned to such term in Section
2.3.
"MATERIAL DISCLOSURE EVENT" means, as of any date of determination, any
pending or imminent event relating to the Company, which, in the determination
of the Board of Directors of the Company upon advice of counsel (i) (A) requires
disclosure of material, non-public information relating to such event in any
registration statement so that such registration statement would not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading,
(B) requires disclosure of material, non-public information relating to such
event in any Prospectus so that such Prospectus would not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading
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and (C) if publicly disclosed at the time of such event, would have a material
adverse effect on the business, financial condition or prospects of the Company
and (ii) there exists a bona fide business reason for preserving
confidentiality.
"NASD RULES" means the Rules of the Association set forth in the NASD
Manual.
"NASD" means the National Association of Securities Dealers, Inc.
"NASDAQ" means the Nasdaq Stock Market.
"NOTICE AND QUESTIONNAIRE" means (i) in the case of any Shelf Registration
Statement, a duly executed, written notice delivered to the Company containing
the information called for by the Selling Securityholder Notice and
Questionnaire attached as Annex A to this Agreement, or (ii) in the case of any
Registration Statement to which Article 2 or Article 4 applies, a duly executed,
written notice delivered to the Company containing the information regarding the
applicable Holder required to be included in such Registration Statement by the
rules and regulations of the Commission and called for by the notice and
questionnaire attached (or included with) the applicable Registration Notice or
Piggyback Registration Notice, respectively, delivered to Holders.
"PERMITTED TRANSFEREE" means (i) any Affiliate of RAM who acquires
Registrable Securities from RAM or one or more other Affiliates of RAM and (ii)
any other Person who, in one or more series of transactions acquires from RAM or
one or more Affiliates of RAM, shares of Common Stock, Warrants and/or Preferred
Stock constituting Registrable Securities equal to 5% or more of the Equity
Shares then outstanding, and (iii) any Affiliate of any Person described in the
foregoing clause (ii).
"PERSON" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, government
or any agency or political subdivision thereof or any other entity.
"PIGGYBACK REGISTRATION NOTICE" has the meaning assigned to such term in
Section 4.1.
"PLAN" has the meaning assigned to such term in the recitals to this
Agreement.
"PREFERRED STOCK" has the meaning assigned to such term in the recitals to
this Agreement.
"PROSPECTUS" means the prospectus included in any Registration Statement
(including, without limitation, a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act to the
extent such prospectus is deemed to be part of the registration statement when
it became effective), as amended or supplemented by any amendment or prospectus
supplement, including post-effective amendments, and all materials incorporated
by reference or explicitly deemed to be incorporated by reference in such
Prospectus.
"RAM" has the meaning assigned to such term in the recitals of this
Agreement.
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"RECORDS" has the meaning assigned to such term in Section 6.1(n).
The terms "REGISTER" "REGISTERED" and "REGISTRATION" means a registration
effected by preparing and filing with the Commission a registration statement on
an appropriate form in compliance with the Securities Act, and the declaration
or order of the Commission of the effectiveness of such registration statement
under the Securities Act.
"REGISTRABLE SECURITIES" means (x) the shares of Common Stock, Preferred
Stock and Warrants issued to the initial Holders pursuant to (or in accordance
with the Committed Common Shares Investment, the Committed Preferred Shares
Investment or the Rights Offering as such terms are defined in and provided for
under) the Plan or (y) any securities issued or issuable with respect to any
Registrable Securities (i) by exercise of rights thereunder or by way of a
like-kind stock dividend or a stock split or (ii) in connection with a
combination, reorganization or reclassification of shares; provided, however,
that such securities shall cease to constitute "Registrable Securities" for
purposes of this Agreement if and when (i) a registration statement with respect
to the sale of such securities shall have been declared effective by the
Commission and such securities shall have been sold pursuant thereto in
accordance with the intended plan and method of distribution therefor set forth
in the final Prospectus forming part of such registration statement, (ii) such
securities are no longer outstanding, (iii) such securities are distributed in
accordance with the provisions of Rule 144 under the Securities Act or (iv) such
securities are no longer owned by a Holder.
"REGISTRATION EXPENSES" has the meaning assigned to such term in Article
8.
"REGISTRATION NOTICE" has the meaning assigned to such term in Section
2.2.
"REGISTRATION STATEMENT" means any Company registration statement that
covers any of the Registrable Securities pursuant to the provisions of this
Agreement, including the Prospectus, amendments and supplements to such
registration statement, including post-effective amendments, all exhibits, and
all materials incorporated by reference or explicitly deemed to be incorporated
by reference in such registration statement.
"REQUESTING HOLDER" has the meaning assigned to such term in Section 2.1.
"REQUIRED FILING DATE" has the meaning assigned to such term in Section
2.1.
"REQUIRED PERIOD" has the meaning assigned to such term in Section 6.1(b).
"REQUISITE REQUESTING HOLDERS" means, with respect to any Demand
Registration, Requesting Holder(s) owning a majority of the Registrable
Securities to be included in such Demand Registration (assuming the exercise of
all Warrants and the conversion of all shares of Preferred Stock into shares of
Common Stock).
"ROAD SHOW" has the meaning assigned to such term in Section 6.1(m).
"SECURITIES ACT" means the United States Securities Act of 1933, as
amended, or any successor statute, and the rules and regulations of the
Commission thereunder.
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"SHELF REQUEST" has the meaning assigned to such term in Section 3.1.
"SHELF REGISTRATION STATEMENT" has the meaning assigned to such term in
Section 3.1.
"SHELF REGISTRATION NOTICE" has the meaning assigned to such term in
Section 3.2.
"SUSPENSION NOTICE" has the meaning assigned to such term in Section 5.2.
"SUSPENSION PERIOD" has the meaning assigned to such term in Section 5.2.
"WARRANTS" has the meaning assigned to such term in the recitals to this
Agreement.
ARTICLE 2. DEMAND REGISTRATION
SECTION 2.1 Request for Demand Registration. Subject to the provisions of
this Agreement, beginning on the date 120 days after the Effective Date, RAM, on
behalf of itself and/or one or more of its Affiliates, or any Permitted
Transferee that is a Holder (each a "REQUESTING HOLDER"), at any time may
deliver to the Company one or more written requests (each, a "DEMAND REQUEST")
that the Company effect the registration under the Securities Act of the offer
and sale of that number of Registrable Securities requested and owned,
beneficially or of record, by the Requesting Holder(s) (a "DEMAND
REGISTRATION"); provided, however, that the Company shall not be required to
effect (i) more than two Demand Registrations in any 12-month period or (ii) any
Demand Registration in which the Registrable Securities requested to be included
in such registration (x) comprise less than the number of shares that could be
sold without registration within a three-month period pursuant to the provisions
of Rule 144(e)(1) or (y) have an aggregate fair market value of less than
$20,000,000, as determined by reference to the closing price of the Registrable
Securities on the date of delivery of such Demand Request on the principal
national securities exchange on which the Registrable Securities are listed or,
if not then listed on a national securities exchange, on the Nasdaq Stock Market
or in the over the counter market. Subject to the provisions of this Agreement,
within 60 days after receipt of a Demand Request (the "REQUIRED FILING DATE")
the Company shall file a registration statement on such appropriate form under
the Securities Act as shall be determined by the Company and reasonably
acceptable to the Requisite Requesting Holders (such acceptance not to be
unreasonably withheld) for the offer and sale of such Registrable Securities as
may be requested in any such Demand Request together with any other Registrable
Securities as may be requested to be included by Joining Holders pursuant to
Section 2.2. The Company shall use its reasonable best efforts to cause any such
registration statement to be declared effective by the Commission as promptly as
practicable after such filing but in any event not later than 150 days following
the date of the applicable Demand Request; provided, however, that, at the
request of Requisite Requesting Holders, and without the consent of any other
Holder, the Company may delay or abandon the proposed offering or cease the
filing (or obtaining or maintaining the effectiveness) of or withdraw the
related registration statement or other governmental approvals, registrations or
qualifications. Unless the Requisite Requesting Holders otherwise elect, all
Demand Registrations will be underwritten offerings.
SECTION 2.2 Notice of Demand Registrations. If at any time the Company
proposes to register Registrable Securities for the account of any Requesting
Holder pursuant to Section 2.1, the Company shall give written notice of such
proposed filing (a "REGISTRATION NOTICE") to
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all Holders as soon as practicable (but in no event later than the 10th Business
Day after receipt by the Company of such Demand Request). Upon the written
request of any such Holder received by the Company not later than the 15th
Business Day after the date of a Registration Notice (each such Holder a
"JOINING HOLDER"), to register, on the same terms and conditions as the
securities otherwise being sold pursuant to such Demand Registration, the offer
and sale of any of its applicable Registrable Securities, subject to Sections
2.3 and 6.2, the Company will cause such Registrable Securities to be registered
in the registration statement proposed to be filed by the Company in respect of
the offer and sale of such Demand Registration on the same terms and conditions
as any similar securities included therein, all to the extent required to permit
the sale or other disposition by each Holder of the Registrable Securities so
registered.
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SECTION 2.3 Priority on Demand Registrations. Notwithstanding any term of
this Article 2 to the contrary, if the Demand Registration contemplates only an
underwritten offering, no securities to be sold for the account of any person or
entity (including the Company) other than Requesting Holders or Joining Holders
shall be included in such Demand Registration unless the lead underwriter or
underwriters shall advise the Requesting Holders in writing that the inclusion
of such securities will not materially and adversely affect the price per
security to be offered in, or success of, the offering (a "MATERIAL ADVERSE
EFFECT"). Furthermore, in the event that the lead underwriter or underwriters of
such an underwritten offering shall advise the Requesting Holders and Joining
Holders in writing that, even after exclusion from such Demand Registration of
all securities of Persons other than Requesting Holders and Joining Holders, the
number of Registrable Securities proposed to be included in such Demand
Registration is sufficiently large to cause a Material Adverse Effect, the
amount of Registrable Securities to be included in such Demand Registration
shall be reduced pro rata among the Joining Holders based on the ratio (x) the
number of Equity Shares each such Joining Holder requests to be included in the
Demand Registration bears to (y) the total number of Equity Shares all Joining
Holders have requested to be included in the registration until the amount of
Registrable Securities to be included in the Demand Registration will not, in
the opinion of the lead underwriter or underwriters, cause a Material Adverse
Effect. If after excluding all Registrable Securities the Joining Holders
requested to be included in the Demand Registration, the lead underwriter or
underwriters determine a further reduction in the amount of Registrable
Securities to be included in the Demand Registration is necessary to avoid a
Material Adverse Effect, then the number of Registrable Securities shall be
further reduced on a pro rata basis among the Requesting Holders based on the
ratio the number of Equity Shares each Requesting Holder has requested to be
included in the Demand Registration bears to the total number of Equity Shares
all Requesting Holders have requested to be included in the registration;
provided, however, that if, as a result of such pro ration, any Holder shall not
be entitled to include in a registration all Registrable Securities that such
Holder has requested to be included, such Holder may elect to withdraw its
request to include such Registrable Securities in such registration or may
reduce the number requested to be included; provided further however, that (i)
such request must be made in writing prior to the earlier of the execution of
the underwriting agreement or the execution of any custody agreement entered
into in connection with such underwriting agreement with respect to such
registration and (ii) such withdrawal or reduction shall be irrevocable. Holders
shall not be required to exercise Warrants or convert Preferred Stock to
exercise the registration rights provided by this Agreement but shall take any
reasonable action requested by the lead underwriter or underwriters in order to
permit such exercise by the underwriters immediately after purchase from the
Holders and before resale by the underwriters.
ARTICLE 3. SHELF REGISTRATION
SECTION 3.1 Request for Shelf Registration. Beginning on the date 90 days
after the Effective Date, a Requesting Holder at any time may deliver to the
Company a written request (a "SHELF REQUEST") that the Company file a
registration statement with the Commission, on such appropriate form under the
Securities Act as shall be determined by the Company and reasonably acceptable
to the Requisite Requesting Holders (such acceptance not to be unreasonably
withheld), seeking to register the offer and sale of the Registrable Securities
by the Holders thereof, other than in an underwritten offering, from time to
time pursuant to Rule 415 under the Securities Act (a "SHELF REGISTRATION
STATEMENT"). Subject to the provisions of this
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Agreement, within 45 days after receipt of any such Shelf Request, the Company
shall file a Shelf Registration Statement and shall use its reasonable best
efforts to cause such Shelf Registration Statement to be declared effective
under the Securities Act as promptly as practicable and in any event on or
before the earlier of (i) within 90 days after the date of filing in the event
the Company is eligible to use Form S-3 for secondary offerings and (ii) within
120 days after the date of filing in the event the Company is not then so
eligible. If the Commission notifies the Company that the Shelf Registration
Statement will receive no action or review from the Commission, the Company will
request that the Shelf Registration Statement become effective within five
Business Days after receipt of such Commission notification. Upon the
effectiveness under the Securities Act of the Shelf Registration Statement, the
Company will (i) cause the Shelf Registration Statement to remain effective, and
supplemented and amended as required by Section 6.1(b) hereof, throughout the
Required Period and (ii) file post-effective amendments on Form S-3 to each
Shelf Registration Statement, as soon as the Company is eligible to use Form S-3
for secondary offerings.
SECTION 3.2 Notice of Shelf Registration. If at any time the Company
proposes to register Registrable Securities for the account of Holders pursuant
to Section 3.1, the Company shall give written notice of such proposed filing
(the "SHELF REGISTRATION NOTICE") to all Holders as soon as practicable (but in
no event later than the 10th Business Day after receipt by the Company of such
Shelf Request). Upon the written request of any Holder received by the Company
not later than the 15th Business Day after the date of a Shelf Registration
Notice, to register, on the same terms and conditions as the securities
otherwise being sold pursuant to such Shelf Registration Statement, the offer
and sale of all or any number of the Registrable Securities held by such Holder,
then, subject to Section 6.2, the Company shall cause the offer and sale of such
Registrable Securities to be registered in the proposed Shelf Registration
Statement.
ARTICLE 4. PIGGYBACK REGISTRATIONS
SECTION 4.1 Holder Piggyback Registration. If at any time the Company
proposes to file a registration statement under the Securities Act with respect
to an offering of any securities for the Company's own account or the account of
any Person (other than RAM or its Affiliates) ("Other Person") (except pursuant
to Section 2.1 or 3.1 or registrations on Form S-4 or any successor form or on
Form S-8 or any successor form relating solely to securities issued pursuant to
any benefit plan), the Company shall give written notice of such proposed filing
(a "PIGGYBACK REGISTRATION NOTICE") to the Holders as soon as practicable (but
in no event less than 30 days before the anticipated filing date). Such notice
shall specify the number of securities proposed to be registered thereby, the
proposed date of filing of such registration statement with the Commission, the
proposed means of distribution of such securities and the proposed lead
underwriters or underwriters (if any). Upon the written request of any Holder
received by the Company no later than the 15th Business Day after the date of
any Piggyback Registration Notice, to register, on the same terms and conditions
as the securities otherwise being sold pursuant to such registration, the offer
and sale of any of such Holder's Registrable Securities, the Company will use
its reasonable best efforts to cause the offer and sale of such Registrable
Securities to be included in the registration statement proposed to be filed by
the Company on the same terms and conditions as any similar securities included
therein, all to the extent required to permit the sale or other disposition by
such Holder of such Registrable Securities so registered; provided, however,
that the Company may, without the consent of any
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other Holder, delay or abandon the proposed offering in which any Holder had
requested to participate or cease the filing (or obtaining or maintaining the
effectiveness) of or withdraw the related registration statement or other
governmental approvals, registrations or qualifications in which event the
Company shall be relieved of its obligation to register any Registrable
Securities in connection with such Piggyback Registration Notice.
SECTION 4.2 Priority on Piggyback Registrations. If the securities
requested to be included in a registration statement by any Holder pursuant to
Section 4.1 differ from the type of securities proposed to be included in a
registered offering by the Company or Other Person and, if such offering is to
be an underwritten one, the lead underwriter or underwriters advise the Company
that due to such differences the inclusion of such securities would cause a
Material Adverse Effect, then the Company may require the Holder to take any
reasonable action in order to permit the underwriters to exercise any Warrants
or convert any Preferred Stock proposed to be included immediately after
purchase from the Holders and before resale by the underwriters. If the lead
underwriter or underwriters advise the Company that the inclusion of such
Registrable Securities would cause a Material Adverse Effect, then the number of
Registrable Securities the Company will be obligated to include in such
registration statement shall be reduced pro rata based on the ratio which the
Equity Shares of each Holder requested to be included in such registration bears
to the total number of Equity Shares requested to be included in such
registration statement by all Holders who have requested that their securities
be included in such registration statement until the amount of Registrable
Securities to be included in the underwritten offering will not, in the opinion
of the lead underwriter or underwriters, cause a Material Adverse Effect.
ARTICLE 5. STANDSTILL AND SUSPENSION PERIODS
SECTION 5.1 Company Standstill Period. Without the prior written consent
of the lead underwriter or underwriters in any underwritten offering, the
Company shall not effect any public sale or distribution by the Company or
permit the registration under the Securities Act of any public sale or
distribution by any Other Person of any securities the same as or similar to the
Registrable Securities, or any securities convertible into or exchangeable or
exercisable for any of the Company's securities the same as or similar to the
Registrable Securities (except pursuant to registrations on Form S-4 or any
successor form or on Form S-8 or any successor form relating solely to
securities offered pursuant to any benefit plan), during the period beginning 14
days prior to the commencement of the public distribution of Registrable
Securities in an underwritten offering pursuant to a registration statement to
be filed to effect a Demand Registration by or on behalf of any Holder and
ending on the earlier of (i) the end of such distribution as advised by the lead
underwriter or underwriters and (ii) the 120th day after such commencement (the
"COMPANY STANDSTILL PERIOD"), including that portion of such period following an
underwritten distribution commenced during the Company Standstill Period that
does not coincide with the Company Standstill Period.
SECTION 5.2 Suspension Period. The Company may, by notice in writing to
each Holder, suspend the Demand Registration rights of the Holders and/or
require the Holders to suspend use of any resale Prospectus included in a Shelf
Registration Statement for any period determined in good faith by the Company if
there shall occur and be continuing a Material Disclosure Event (such period, a
"SUSPENSION PERIOD"). Notwithstanding the foregoing, no
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Suspension Period shall exceed 45 days in any one instance or be invoked by the
Company more than twice in any 12-month period; provided, however, that each day
during any Suspension Period shall only be counted once in determining the
aggregate number of days in such Suspension Period notwithstanding the
occurrence of multiple concurrent deferrals. Each Holder agrees that, upon
receipt of notice from the Company of the occurrence of a Material Disclosure
Event (a "SUSPENSION NOTICE"), such Holder will forthwith discontinue
disposition of Registrable Securities pursuant to the Shelf Registration
Statements or any public sale or distribution pursuant to Rule 144 of the
Securities Act until the earlier of (i) the expiration of the Suspension Period
and (ii) such Holder's receipt of a notice from such Company to the effect that
such suspension has terminated. Any Suspension Notice shall be accompanied by a
certificate of the Chief Executive Officer, the President, the Chief Financial
Officer or General Counsel of the Company confirming the existence of the
Material Disclosure Event. If so directed by the Company, such Holder will
deliver to the Company (at the Company's expense) all copies, other than
permanent file copies, then in such Holder's possession, of the most recent
Prospectus covering such Registrable Securities at the time of receipt of such
Suspension Notice. In the event of a Suspension Notice, during the Suspension
Period the Company shall use reasonable efforts, and promptly after such time as
the related Material Disclosure Event no longer exists the Company shall take
any and all actions necessary or desirable, to give effect to any Holders'
rights under this Agreement that may be, or have been, affected by such notice,
including the Holders' Demand Registration rights and rights with respect to any
Shelf Registration Statement.
SECTION 5.3 Holder Standstill Period.
(a) Without the prior written consent of the Company, no Holder
shall effect any disposition of Registrable Securities under the Shelf
Registration Statement or any public sale or distribution pursuant to Rule 144
or deliver a Demand Notice during the period beginning 14 days prior to the
commencement of the public distribution of securities of the Company the same as
or similar to the Registrable Securities, or any securities convertible into or
exchangeable or exercisable for any Company securities the same as or similar to
the Registrable Securities, in an underwritten offering by or on behalf of the
Company and ending on the earlier of (i) the end of such distribution as advised
by the lead underwriter or underwriters and (ii) the 60th day after such
commencement.
(b) Without the prior written consent of the lead underwriter or
underwriters in any underwritten offering, no Holder shall effect any
disposition of Registrable Securities under the Shelf Registration Statement or
any public sale or distribution pursuant to Rule 144 during the period beginning
14 days prior to the commencement of the public distribution of securities of
the Company the same as or similar to the Registrable Securities, or any
securities convertible into or exchangeable or exercisable for any Company
securities the same as or similar to the Registrable Securities, in an
underwritten offering by or on behalf any other Holder pursuant to a Demand
Registration under Section 2.1 and ending on the first to occur of (i) the 60th
day after such commencement and (ii) the end of such distribution.
SECTION 5.4 Limit on Other Registrations. Each Holder agrees not to
request the registration of, or cause the Company to register, any Registrable
Securities pursuant to any registration statement under the Securities Act
except pursuant to Sections 2.1 or 3.1 or (solely
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with respect to a registration statement filed for the account of the Company or
any Person other than RAM or its Affiliates) Section 4.1.
ARTICLE 6. REGISTRATION PROCEDURES
SECTION 6.1 Company Obligations. Whenever the Company is required pursuant
to this Agreement to register Registrable Securities, it shall:
(a) cause the related registration statement to include a Prospectus
intended to permit each Holder to resell, at such Holder's election, all or any
part of the Registrable Securities held by such Holder without restriction;
(b) promptly and timely prepare and file with the Commission such
amendments and post-effective amendments to any such registration statements as
may be necessary to keep each such registration statement continuously effective
(subject to any Suspension Periods) (i) with respect to the Shelf Registration
Statements, for a period (the "REQUIRED PERIOD") ending on the date which is
three years after the date on which such Shelf Registration Statement becomes
effective with respect to the offer and sale of Registrable Securities plus the
aggregate number of days in all applicable Suspension Periods and (ii) with
respect to all other registration statements, for a period equal to the lesser
of such period necessary for completion of the contemplated distribution and 120
days;
(c) promptly and timely cause the Prospectuses to be supplemented by
any required Prospectus supplement;
(d) provide the Holders with a reasonable opportunity to review and
comment on any registration statement (including the prospectus contained
therein or any amendment or supplement thereto) to be filed pursuant to this
Agreement prior to the filing thereof with the Commission, and shall make all
changes thereto (including to any documents incorporated in the registration
statement by reference or proposed to be filed after the initial filing of the
registration statement) as any Holder may request in writing to the extent such
changes are required by the Securities Act;
(e) cause (i) any such registration statement and any amendment or
supplement thereto, as of the effective date of such registration statement,
amendment or supplement, (x) to comply in all material respects with the
applicable requirements of the Securities Act and the rules and regulations of
the Commission promulgated thereunder and (y) not to contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading and
(ii) the related Prospectus, (x) to comply in all material respects with the
applicable requirements of the Securities Act and the rules and regulations of
the Commission promulgated thereunder and (y) not to contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(f) furnish to the Holders such number of conformed copies of such
registration statement and of each such amendment thereto and, if requested,
copies of all exhibits thereto, such number of copies of the Prospectus included
in such registration statement
11
(including each preliminary and final Prospectus and each supplement thereto),
and such number of the documents, if any, incorporated by reference in such
registration statement or Prospectus, as each Holder reasonably may request;
(g) use its reasonable best efforts (i) to register or qualify the
offer and sale of Registrable Securities covered by such registration statement
under such securities or "blue sky" laws of the states of the United States as
each Holder reasonably shall request, to keep such registration or qualification
in effect for so long as such registration statement remains in effect, and to
do any and all other acts and things that may be necessary or advisable to
enable the Holders to consummate the disposition in such jurisdictions of the
Registrable Securities covered by such registration statement, except that the
Company shall not for any such purpose be required to qualify generally to do
business as a foreign corporation in any jurisdiction in which it is not
obligated to be so qualified, or to subject itself to taxation in any such
jurisdiction, or to consent to general service of process in any such
jurisdiction and (ii) to obtain all other approvals, consents, exemptions or
authorization from securities regulatory authorities or government agencies as
may be necessary to enable such Holders to consummate the disposition of the
Registrable Securities;
(h) immediately notify the Holders, at any time when a Prospectus or
Prospectus supplement relating thereto is required to be delivered under the
Securities Act, upon discovery that, or upon the occurrence of any event as a
result of which, the Prospectus included in such registration statement, as then
in effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, which untrue statement or omission requires amendment of the
registration statement or supplementing of the Prospectus, and, at the request
of the Holders, prepare and furnish to the Holders a reasonable number of copies
of a supplement to such Prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such Registrable Securities, such Prospectus
shall not include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided, however, each Holder agrees that it will not sell any
Registrable Securities pursuant to such registration statement of the Company's
notice that such Company is preparing and filing with the Commission a
supplement to or an amendment of such Prospectus or registration statement until
such time as such amendment or supplement has been filed; provided further,
however, that the Company shall use its reasonable best efforts to prepare and
make effective such supplemental amendment;
(i) comply in all material respects with all applicable rules and
regulations of the Commission, and make available to holders of its securities,
as soon as reasonably practicable, but in any event not later than 18 months
after (i) the effective date (as defined in Rule 158(c) under the Securities
Act) of such registration statement, (ii) the effective date of each
post-effective amendment to such registration statement and (iii) the date of
such filing by the Company with the Commission of an annual report or Form 10-K,
whether or not such Form 10-K is required to be incorporated by reference in
such registration statement, an earnings statement of such Company and its
subsidiaries which earnings statement shall satisfy the provisions of Section
11(a) of the Securities Act and the rules and regulations of the Commission
thereunder (including at the option of such Company, Rule 158);
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(j) provide and cause to be maintained a transfer agent and
registrar for the Registrable Securities covered by such registration statement
from and after a date not later than the effective date of such registration
statement; it being hereby agreed that the Holders shall furnish to such Company
such information regarding the Holders and the plan and method of distribution
of Registrable Securities intended by the Holders as such Company may from time
to time reasonably request in writing and as shall be required by law or by the
Commission in connection therewith;
(k) notify the Holders and the lead underwriter or underwriters, if
any, promptly, and (if requested by any such person) confirm such notice in
writing, (i) when a Prospectus, Prospectus supplement or post-effective
amendment related to such registration statement has been filed, and, with
respect to such registration statement or any post-effective amendment thereto,
when the same has become effective, (ii) of any request by the Commission or any
other federal or state governmental authority for amendments or supplements to
such registration statement or related Prospectus, (iii) of the issuance by the
Commission or any other federal or state governmental authority of any stop
order suspending the effectiveness of such registration statement or the
initiation of any proceedings for that purpose and (iv) of the receipt by the
Company of any notification with respect to the suspension of the qualification
or exemption from qualification of any of the Registrable Securities for sale in
any jurisdiction or the initiation or threatening of any proceeding for such
purpose;
(l) use its reasonable best efforts to obtain the withdrawal of any
order suspending the effectiveness of any registration statement, or the lifting
of any suspension of the qualification (or exemption from qualification) of any
of the Registrable Securities for sale in any jurisdiction, at the earliest
possible moment;
(m) enter into customary agreements (including underwriting
agreements in customary form, which shall include "lock-up" obligations as may
be requested by the lead underwriter or underwriters, not to exceed 120 days in
duration, but excluding shares that may be issued pursuant to benefit plans or
in connection with mergers or acquisitions) and take such other actions
(including using its reasonable efforts to make domestic road show presentations
(it being agreed that such presentations by officers of the Company not
exceeding an aggregate of 20 days in duration during any 12-month period for all
Demand Registrations and the Shelf Registration Statement shall be reasonable)
and otherwise engaging in such reasonable marketing support in connection with
any underwritten offering (a "ROAD SHOW")) as are reasonably requested by the
Requisite Requesting Holders in order to expedite or facilitate the sale or
disposition of any Registrable Securities and in such connection, whether or not
an underwriting agreement is entered into and whether or not the Registrable
Securities are to be sold in an underwritten offering, make such representations
and warranties to the Holders of such Registrable Securities and the underwriter
or underwriters, if any, in form and substance and scope as are customarily made
in connection with such offerings of equity securities. The Requisite Requesting
Holders shall consult with the Company with respect to the nature and extent of
any Road Show and the expenses to be incurred in connection with any Road Show.
(n) make available for inspection by each Holder, any underwriter
participating in any disposition pursuant to such registration, and any
attorney, accountant or other agent retained by such Holder or any such
underwriter (collectively, the "INSPECTORS"), all
13
financial and other records, pertinent corporate documents and properties of the
Company (collectively, the "RECORDS") as shall be reasonably necessary to enable
them to exercise their due diligence responsibility, and cause the officers,
directors and employees of, and independent accountants and counsel to, the
Company to supply all information reasonably requested by any such Inspector in
connection with such registration, provided, however, that (i) in connection
with any such inspection, any such Inspectors shall cooperate to the extent
reasonably practicable to minimize any disruption to the operation by the
Company of its business, (ii) Records and information obtained hereunder shall
be used by such Inspectors only to exercise their due diligence responsibility
and (iii) Records or information furnished or made available hereunder shall be
kept confidential and shall not be disclosed by such Holder, underwriter or
Inspectors unless (A) the disclosure of such Records or information is necessary
so that (1) any Prospectus would not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading and (2) any Registration Statement would not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, (B) the release of such Records or information is ordered pursuant
to a subpoena or other order from a court or governmental authority of competent
jurisdiction or a third party or (C) such Records or information otherwise
become available to the public other than through disclosure by such Holder,
underwriter or Inspector in breach hereof or by any person in breach of any
other confidentiality arrangement;
(o) furnish to each Holder and to each underwriter, if any, a signed
counterpart, addressed to such Holder or such underwriter, if any, of (i) an
opinion or opinions of counsel to the Company dated the effective date of such
registration statement (which counsel and opinions (in form, scope and
substance) shall be reasonably satisfactory to the appointed representative of
or counsel to the Requisite Requesting Holders) covering the matters customarily
covered in opinions requested in such offerings of equity or debt securities and
such other matters as may be reasonably requested by such representative or
counsel and (ii) unless otherwise precluded under applicable accounting rules, a
"comfort" letter or "comfort" letters from the Company's independent public
accountants who have certified the Company's financial statements included in
such registration statement, in customary form and covering such matters of the
type customarily covered by "comfort" letters in relation to such offerings and
as such Holder or the lead underwriter or underwriters reasonably request;
(p) file all such information, documents and other reports required
to be filed by Section 13 or 15(d) of the Exchange Act and applicable to a U.S.
company subject to such sections, within such time limits and periods provided
therefore notwithstanding that the Company may not be required to remain subject
to the reporting requirements of Sections 13 or 15(d) of the Exchange Act;
(q) keep a single representative of the sellers of each class of
Registrable Securities (appointed by the Holders of a majority of the respective
classes of Registrable Securities in the registration) advised as to the
initiation and progress of any registration hereunder;
14
(r) in connection with any registration hereunder, provide officers'
certificates and other customary closing documents in form and scope customary
for such offerings;
(s) cooperate with each seller of Registrable Securities and each
underwriter participating in the disposition of such Registrable Securities and
underwriters' counsel in connection with any filings required to be made with
the NASD;
(t) with respect to an underwritten offering of Registrable
Securities, use its reasonable best efforts to cause all such securities to be
listed on each securities exchange on which similar securities issued by the
Company are then listed and, if no such securities are so listed, use its
reasonable best efforts to cause such Registrable Securities to be listed on the
New York Stock Exchange, the American Stock Exchange or the Nasdaq, as directed
by the Holders thereof, and, if listed on Nasdaq, use its reasonable best
efforts to (A) secure designation of all such Registrable Securities as a Nasdaq
"national market system security" within the meaning of Rule 11Aa2-1 under the
Exchange Act and (B) cause such Registrable Securities to be listed on the
Nasdaq National Market or, failing that, to secure Nasdaq authorization for such
Registrable Securities;
(u) in the event that any broker-dealer registered under the
Exchange Act shall be an "affiliate" (as defined in Section 2720(b) of the NASD
Rules) of the Company or has a "conflict of interest" (as determined by Section
2720(b)(7) of the NASD Rules) and such broker-dealer shall underwrite,
participate as a member of an underwriting syndicate or selling group or "assist
in the distribution" (within the meaning of the NASD Rules) of any Registrable
Securities, whether as a holder of such Registrable Securities or as an
underwriter, a placement or sales agent or a broker or dealer in respect
thereof, or otherwise, the Company will assist such broker-dealer in complying
with the requirements of the NASD Rules, including, without limitation, by (A)
engaging a "qualified independent underwriter" (as defined in Section
2720(b)(15) of the NASD Rules) to participate in the preparation of the
registration statement relating to such Registrable Securities, to exercise
usual standards of due diligence in respect thereto and to recommend the public
offering price of such Registrable Securities, (B) indemnifying such qualified
independent underwriter, to the extent of the indemnification of underwriters
provided in Section 7 hereof, and (C) providing such information to such
broker-dealer as may be required in order for such broker-dealer to comply with
the requirements of the Rules of Fair Practice of the NASD; and
(v) use its reasonable best efforts to take all other action
necessary to effect the registration of the Registrable Securities contemplated
hereby.
SECTION 6.2 Holder Obligations. As a condition to the inclusion of
Registrable Securities in any registration statement filed pursuant to this
Agreement, each Holder agrees to:
(a) provide the Company a Notice and Questionnaire prior to the date
of the filing of the applicable registration statement with the Commission;
(b) furnish to the Company such information regarding such Holder,
the Registrable Securities held by such Holder and the intended plan of
distribution of such
15
Registrable Securities as the Company may from time to time reasonably request
in writing in connection with any registration;
(c) maintain as confidential all information obtained by it or by
its Inspectors and not use any such information as the basis for any market
transactions in the securities of the Company or its Affiliates unless and until
such information is made generally available to the public; and
(d) make such representations and warranties to the underwriter or
underwriters, in form and substance and scope as are customarily made in
connection with such offerings of equity securities and execute an underwriting
agreement with such underwriter or underwriters containing terms and conditions
customary for such offerings of equity.
(e) use all reasonable efforts, prior to making any disclosure
allowed by Section 6.1(n)(iii)(A) or (B), to inform the Company that such
disclosure is necessary to avoid or correct a misstatement or omission in the
registration statement or ordered pursuant to a subpoena or other order from a
court or governmental authority of competent jurisdiction or otherwise required
by law. Such Holder further agrees that it will, upon learning that disclosure
of such Records or information is sought by a court or governmental authority or
otherwise required by law, give notice to the Company and allow the Company, at
the expense of the Company, to undertake appropriate action to prevent
disclosure of the Records or information deemed confidential.
ARTICLE 7. INDEMNIFICATION
SECTION 7.1 Indemnification by the Company. (a) Subject to the terms and
conditions of this Article, the Company shall indemnify and hold harmless (i)
each Holder, its Affiliates and any Permitted Transferee, including their
respective directors, officers, employees, advisers, agents, administrators and
successors and assigns with respect to any registration statement filed pursuant
to this Agreement, (ii) any underwriter or selling agent selected by the Holders
or other securities professional, if any, which facilitates the disposition of
the Registrable Securities with respect to such Registrable Securities and (iii)
each person who controls the Holder or Affiliate thereof or such underwriter,
selling agent or securities professional, including their respective directors,
officers, employees, advisers, agents, administrators and successors and
assigns, and any underwriter or selling agent, within the meaning of Section 15
of the Securities Act and Section 20 of the Exchange Act, against any losses,
claims, damages, liabilities or expenses (each a "LOSS" and collectively
"LOSSES"), joint or several, to which the Holder or any such persons may become
subject under the Securities Act or otherwise, to the extent that such Losses
(or related actions or proceedings) arise out of or are based upon (A) any
untrue statement or alleged untrue statement of a material fact contained in a
registration statement, or any amendments or supplements thereto, in which such
Registrable Securities are to be or were included for registration under the
Securities Act, or any omission or alleged omission to state a material fact
required to be stated or necessary to make the statements in such Registration
Statement, amendment or supplement, not misleading, (B) any untrue statement or
alleged untrue statement of a material fact contained in any preliminary
Prospectus if used prior to the effective date of the registration statement,
any final Prospectus (as supplemented, if the Company shall have filed with the
Commission any supplement thereto) if
16
used during the period in which the Company is required to keep the registration
statement to which such Prospectus relates current and otherwise in compliance
with Section 10(a) of the Securities Act, or any omission or alleged omission to
state a material fact required to be stated or necessary to the make statements
in such preliminary Prospectus or final Prospectus, in the light of the
circumstances under which such statements were made, not misleading or (C) any
material violation or alleged material violation of the Securities Act, the
Exchange Act, the rules and regulations as promulgated of the Securities Act and
the Exchange Act, and state securities laws; provided, however, that the Company
shall not be liable to any Person and shall have no obligation to provide any
indemnification hereunder to the extent any such Losses (or actions or
proceedings in respect thereof) arise out of or are based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
such registration statement, preliminary Prospectus or final Prospectus, as the
case may be, in reliance upon and in conformity with written information
furnished to the Company by a Person seeking such indemnification or on such
Person's behalf specifically for inclusion in such registration statement. The
indemnity provided in this Section 7.1 shall remain in full force and effect
regardless of any investigation made by or on behalf of the Holder or any such
other persons and shall survive the transfer of the Registrable Securities by
the Holder or any such other persons. Notwithstanding anything provided herein
to the contrary, (i) the Company shall not be liable in any such case to the
extent that any such losses, claims, damages, liabilities or expenses arise out
of or is based upon an untrue statement or omission made in any preliminary
prospectus if (x) such Holder failed to send or deliver a copy of the Prospectus
with or prior to the delivery of written confirmation of the sale of Registrable
Securities, (y) the Prospectus would have completely corrected such untrue
statement or omission and (z) the Company delivered a copy of such Prospectus to
such Holder prior to such written confirmation of sale; and (ii) the Company
shall not be liable in any such case to the extent that any such losses, claims,
damages, liabilities or expenses arise out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission in the
Prospectus, if such untrue statement, omission or alleged omission is completely
corrected in an amendment or supplement to the Prospectus and if, having
previously been furnished by or on behalf of the Company with copies of the
Prospectus as so amended or supplemented, such Holder thereafter sells
Registrable Securities pursuant to the Registration Statement and fails to
deliver such Prospectus as so amended or supplemented, prior to or concurrently
with the sale of a Registrable Security to the Person asserting such Damages who
purchased such Registrable Security from such Holder after such Holder's receipt
of such Prospectus as so amended or supplemented by or on behalf of the Company.
SECTION 7.2 Indemnification by the Holders. Each Holder shall severally,
and not jointly, indemnify and hold harmless (in the same manner and to the same
extent as set forth in Section 7.1 hereof) the Company, each director, officer
and employee of the Company and each other person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act, the Company's investment advisers and agents, and each of
their respective heirs, executors, administrators and successors and assigns,
against any Losses to which such Person may become subject under the Securities
Act or otherwise, to the extent that such Losses (or related actions or
proceedings) arise out of or are based upon any untrue statement or alleged
untrue statement in or omission or alleged omission from any registration
statement filed by the Company pursuant to this Agreement, any preliminary
Prospectus or any final Prospectus included in such registration statement, or
any amendment or supplement to such registration statement or Prospectus, as the
case may be, of a
17
material fact if such statement or alleged statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to the Company or any of its representatives by such Holder or such
other persons, if any, who control the Holder within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act, or on the Holder's
behalf, specifically for inclusion in such registration statement, preliminary
Prospectus or final Prospectus, as the case may be; provided, such Holder's
aggregate liability under this Agreement (including Section 7.4) shall be
limited to an amount equal to the net proceeds (after deducting the
underwriters' discount and the expenses incurred in connection with the
applicable offering) received by the Holder from the sale of the securities
effected pursuant to such registration.
SECTION 7.3 Notice of Claims, Etc. Promptly after receipt by an
indemnified party of notice of the commencement of any action or proceeding (an
"ACTION") involving a claim referred to in Sections 7.1 and 7.2 hereof, such
indemnified party shall, if indemnification is sought against an indemnifying
party, give written notice to the indemnifying party of the commencement of such
Action; provided, however, that the failure of any indemnified party to give
said notice shall not relieve the indemnifying party of its obligations under
Sections 7.1 or 7.2 hereof, as the case may be, except to the extent that the
indemnifying party is actually and materially prejudiced by such failure. In
case an Action is brought against any indemnified party, and such indemnified
party notifies an indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate therein and, to the extent
it may elect by written notice delivered to the indemnified party promptly after
receiving the aforesaid notice, to assume the defense thereof with counsel
reasonably satisfactory to such indemnified party (who shall not, except with
the consent of the indemnified party, be counsel to the indemnifying party).
Notwithstanding the foregoing, the indemnified party shall have the right to
employ its own counsel in any such case, but the fees and expenses of such
counsel shall be at the expense of such indemnified party, unless (i) the
employment of such counsel shall have been authorized in writing by the
indemnifying party, (ii) the indemnifying party shall not have employed counsel
(reasonably satisfactory to the indemnified party) to take charge of the defense
of such Action, within a reasonable time after notice of the commencement
thereof or (iii) such indemnified party reasonably shall have concluded that
there may be defenses available to it which are different from or additional to
those available to the indemnifying party which, if the indemnifying party and
the indemnified party were to be represented by the same counsel, could result
in a conflict of interest for such counsel or materially prejudice the
prosecution of the defenses available to such indemnified party. If any of the
events specified in clauses (i), (ii) or (iii) of the preceding sentence shall
have occurred or otherwise shall be applicable, then the fees and expenses of
one counsel (or firm of counsel) for the indemnified party shall be borne by the
indemnifying party. Anything in this Section 7.3 to the contrary
notwithstanding, an indemnifying party shall not be liable for the settlement of
any action effected without its prior written consent (which consent in the case
of an action exclusively seeking monetary relief shall not unreasonably be
withheld or delayed), but if settled with the prior written consent of the
indemnifying party, or if there be a final judgment adverse to the indemnified
party, the indemnifying party agrees to indemnify the indemnified party from and
against any loss or liability by reason of such settlement or judgment. No
indemnifying party shall, without the prior consent of the indemnified party,
consent to entry of any judgment or enter into any settlement which does not
include as a term thereof the unconditional release of the indemnified
18
party from all liability in respect of such claim or litigation or which,
notwithstanding such unconditional release, constitutes an admission of fault or
liability by such indemnified party.
SECTION 7.4 Contribution. If the indemnification provided for in this
Article 7 is unavailable or insufficient to hold harmless an indemnified party
in respect of any Losses, then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or payable by
such indemnified party as a result of such Losses which amount shall include,
without limitation, the legal fees and other expenses incurred by such
indemnified party in connection with the investigation and defense in such
proportion as appropriate to reflect the relative fault of the Company, on the
one hand, and the Indemnified Holders to be indemnified pursuant to this Article
7, on the other hand, and the parties' relative intent, knowledge, access to
information and opportunity to correct or mitigate the damage in respect of or
prevent any untrue statement or omission or alleged untrue statement or omission
giving rise to such indemnification obligation. The Company and the Holders
agree that it would not be just and equitable if contributions pursuant to this
Section 7.4 were determined by pro rata allocation or by any other method of
allocation which did not take account of the equitable considerations referred
to above. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who is not guilty of such fraudulent misrepresentation.
SECTION 7.5 Indemnification Payments. Periodic payments of amounts
required to be paid pursuant to this Article 7 shall be made during the course
of the investigation or defense, as and when reasonably itemized bills therefor
are delivered to the indemnifying party in respect of any particular Loss as
incurred.
SECTION 7.6 Remedies. The remedies provided in this Article 7 are not
exclusive and should not limit any right or remedies that may otherwise be
available to an indemnified party at law or in equity.
ARTICLE 8. EXPENSES
The Company agrees to bear and to pay or cause to be paid promptly upon
request being made therefor all expenses incident to the Company's performance
of or compliance with this Agreement, including, without limitation, (a) all
Commission and any NASD registration and filing fees and expenses, (b) all fees
and expenses in connection with the registration or qualification of the
Registrable Securities for offering and sale under the state securities and
"blue sky" laws and determination of their eligibility for investment under the
laws of such United States jurisdictions as the Holders or underwriters, if any,
of such Registrable Securities may designate, including reasonable fees and
disbursements, if any, of counsel for the selling holders or underwriters in
connection with such registrations or qualifications and determination, (c) all
expenses relating to the preparation, printing, distribution and reproduction of
the registration statement required to be filed hereunder, each prospectus
included therein or prepared for distribution pursuant hereto, each amendment or
supplement to the foregoing, the expenses of preparing the Registrable
Securities for delivery and the expenses of printing or producing any
underwriting agreement(s), agreement(s) among underwriters and "blue sky" or
legal investment memoranda, any selling agreements and all other documents in
connection with the offering, sale or delivery of Registrable Securities to be
disposed of (including certificates
19
representing the Registrable Securities), (d) the Company's messenger, telephone
and delivery expenses, (e) fees and expenses of any transfer agent and registrar
with respect to the Registrable Securities and any escrow agent, custodian,
administrative agent or security agent, (f) internal expenses (including,
without limitation, all salaries and expenses of the Company's officers and
employees performing legal or accounting duties), (g) fees, disbursements and
expenses of counsel and independent certified public accountants of the Company
(including the expenses of any opinions or "comfort" letters required by or
incident to such performance and compliance), (h) fees, disbursements and
expenses of any "qualified independent underwriter" required by the NASD Rules
in connection with any underwriting arrangements, (i) fees, disbursements and
expenses of one counsel for the Holders of Registrable Securities retained in
connection with such registration, as selected by the Requisite Requesting
Holders, (j) fees, expenses and disbursements of any other persons, including
special experts, retained by the Company in connection with such registration,
(k) all fees and expenses incurred in connection with the qualification of the
Registrable Securities for quotation on The Nasdaq National Market, or the
listing of such shares on any securities exchange, (l) all expenses of the
Company (but not of any underwriter) reasonably incurred in connection with any
Road Show and (m) all expenses in connection with the performance of the Company
of its obligations under Section 6.1 (collectively, the "REGISTRATION
EXPENSES"). To the extent that any Registration Expenses are incurred, assumed
or paid by any Holder of Registrable Securities or any underwriter thereof, the
Company shall reimburse such person for the full amount of the Registration
Expenses so incurred, assumed or paid promptly after receipt of a request
therefor. Notwithstanding the foregoing, the Holders of the Registrable
Securities being registered shall pay all agency fees and commissions and
underwriting discounts and commissions attributable to the sale of such
Registrable Securities and the fees and disbursements of any counsel or other
advisors or experts retained by such Holders (severally or jointly), other than
the counsel and experts specifically referred to above.
ARTICLE 9. CURRENT PUBLIC INFORMATION
The Company shall use its reasonable best efforts to timely file all
reports required to be filed by it under the Securities Act and the Exchange Act
and shall at all times comply with the requirements of Rule 144(c) under the
Securities Act, as such Rule may be amended from time to time (or any similar
rule or regulation hereafter adopted by the Commission), regarding the
availability of current public information to the extent required to enable any
Holder to sell Registrable Securities without registration under the Securities
Act pursuant to the resale provisions of Rule 144 of the Securities Act (or any
similar rule or regulation). Upon the request of any Holder, the Company will
deliver to such Holder a written statement as to whether it has complied with
such requirements and, upon such Holder's compliance with the applicable
provisions of Rule 144 of the Securities Act, will take such action as may be
required (including, without limitation, causing legal counsel to issue an
appropriate opinion) to cause its transfer agent to effectuate any transfer of
Registrable Securities properly requested by such Holder, in accordance with the
terms and conditions of Rule 144 of the Securities Act.
ARTICLE 10. SELECTION OF UNDERWRITERS
With respect to any offering of Registrable Securities in the form
of an underwritten offering, the Company shall select one or more investment
banking firms of
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national standing to be lead underwriter for the offering, which shall be
reasonably acceptable to the Requisite Requesting Holders.
ARTICLE 11. MISCELLANEOUS
SECTION 11.1 Term; Effect of Termination. The rights and obligations under
this Agreement of a Holder shall terminate with respect to such Holder (but not
with respect to a Permitted Transferee of such Holder) at such time as such
Holder ceases to own any Registrable Securities. The rights and obligations of
the Company under this Agreement shall terminate at such time as the rights of
all Holders have terminated. Upon the termination of a party's rights and
obligations under this Agreement, this Agreement shall terminate and have no
further effect with respect to such party; provided, however, that the
provisions of Article 7, the rights and obligations of the parties with respect
to the breach of any provision hereof prior to such termination and any and all
accrued rights and obligations as of the date of such termination shall survive
the termination of this Agreement with respect to any party.
SECTION 11.2 Notice Generally. Any notice, demand, request, consent,
approval, declaration, delivery or other communication hereunder to be made
pursuant to the provisions of this Agreement shall specify the Section of this
Agreement pursuant to which it is given or being made and shall be deemed
sufficiently given or made if in writing and signed by the party making the
same, and either delivered in person with receipt acknowledged or sent by
registered or certified mail, return receipt requested, postage prepaid, or by
telecopy and confirmed by telecopy confirmation receipt, addressed, if to any
Holder (other than RAM), at the address provided in writing to the Company by
such Holder; and
if to the Company:
Sterling Chemicals, Inc.
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: General Counsel
Telecopy 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
Telecopy Number: (000) 000-0000
If to RAM, to:
Resurgence Asset Management, L.L.C.
00 Xxx Xxxx Xxxxxx
Xxxxx Xxxxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxxxx
Telecopy Number: (000) 000-0000
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with a copy to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attention: Xxxxxxx Xxxxx
Telecopy Number: (000) 000-0000
or at such other address as may be substituted by notice given as herein
provided. The giving of any notice required hereunder may be waived in writing
by the party entitled to receive such notice. Every notice, demand, request,
consent, approval, declaration, delivery or other communication hereunder shall
be deemed to have been duly given or served on the date on which personally
delivered, with receipt acknowledged, telecopied and confirmed by telecopy
confirmation receipt or three Business Days after the same shall have been
deposited in the United States mail (by registered or certified mail, return
receipt requested, postage prepaid), whichever is earlier.
SECTION 11.3 Successors and Assigns. The rights and benefits of Holders
under this Agreement may not be assigned by any Holder (except that the rights
and benefits under this Agreement may be assigned by a Holder to a Permitted
Transferee, whereupon such Permitted Transferee shall be deemed to be a Holder
for all purposes of this Agreement) without the prior written consent of the
Company. Upon any such permitted assignment, the assignee shall execute a
joinder agreement in form and substance satisfactory to the company, whereupon
such assignee shall be deemed to be a party to this Agreement for all purposes.
This Agreement shall be binding on all successors to the Company and the
Holders.
SECTION 11.4 Amendments and Waivers. This Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively) only by a written
instrument duly executed by the Company and the Holders of at least a majority
of the Equity Shares that are Registrable Securities at the time outstanding;
provided, however, that no amendments may be made to the definition of "Holder"
or to Sections 7.1, 11.2 or 11.3, without the prior written consent of all
Holders of Registrable Securities. Each Holder of any Registrable Securities at
the time or thereafter outstanding shall be bound by any amendment or waiver
effected pursuant to this Section 11.3, whether or not any notice, writing or
marking indicating such amendment or wavier appears on such Registrable
Securities or is delivered to such Holder.
SECTION 11.5 Severability. Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
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SECTION 11.6 Headings. The headings used in this Agreement are for the
convenience of reference only and shall not, for any purpose, be deemed a part
of this Agreement.
SECTION 11.7 No Third Party Rights. Nothing in this Agreement shall be
deemed to create any right in any creditor or other Person other than the
Company, the Holders and those Persons entitled to indemnification hereunder,
and this Agreement shall not be construed in any respect to be a contract in
whole or in part for the benefit of any other Person.
SECTION 11.8 Governing Law. THIS AGREEMENT SHALL BE GOVERNED EXCLUSIVELY
BY, CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO THE PROVISIONS THEREOF RELATING TO CONFLICT OF LAWS.
SECTION 11.9 Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
SECTION 11.10 Entire Agreement. This Agreement embodies the entire
agreement and understanding among the Company and the Holders in respect of the
subject matter contained herein. This Agreement supersedes all prior agreements
and understandings between the parties with respect to the subject matter of
this Agreement.
SECTION 11.11 Specific Performance. The parties hereto acknowledge and
agree that the Holders would not have adequate remedies at law and would be
irreparably harmed if any of the provisions of this Agreement were not performed
by the Company in accordance with the specific terms hereof or were otherwise
breached, and that, in such case, it would be impossible to measure in money the
damages to such Holders. It is accordingly agreed that the Holders shall be
entitled to injunctive relief or the enforcement of other equitable remedies,
without bond or other security, to compel performance and to prevent breaches of
this Agreement and specifically to enforce the terms and provisions hereof, in
addition to any other remedy to which they may be entitled, at law or in equity.
SECTION 11.12 Further Assurances. The Company shall execute such documents
and perform such further acts as may be reasonably required or desirable to
carry out or to perform the provisions of this Agreement.
SECTION 11.13 Inconsistent Instructions. If the Company receives
conflicting instructions, notices or elections from two or more Persons with
respect to the same Registrable Securities, the Company may act upon the basis
of the instructions, notice or election received from the registered owner of
such Registrable Securities.
SECTION 11.14 Registration Rights to Others. Noting herein shall prohibit
or limit the Company from entering into an agreement providing holders of
securities which may hereafter be issued by the Company with such registration
rights exercisable at such time or times and in such manner as the Board of
Directors of the Company shall deem in the best interests of the Company so long
as the performance by the Company of its obligations under such other agreement
will not cause the Company to breach its obligations to the Holders hereunder.
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SECTION 11.15 Rules of Construction. Unless the context otherwise
requires, "or" is not exclusive, and references to sections or subsections refer
to sections or subsections of this Agreement.
SECTION 11.16 Interpretation. This Agreement is the result of arms-length
negotiations between the parties hereto and has been prepared jointly by the
parties. In applying and interpreting the provisions of this Agreement, there
shall be no presumption that the Agreement was prepared by any one party or that
the Agreement should be construed in favor of or against any one party.
[Signature Pages to Follow]
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IN, WITNESS WHEREOF, the parties hereto have caused this Registration
Rights Agreement to be duly executed and delivered as of the date first above
written.
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
certain of its and its affiliates' funds and accounts
By: /s/ XXXXX X. XXXXX
---------------------------------------------------------
Name: Xxxxx X. Xxxxx
Title: Co-Chairman & Chief Investment Officer
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