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EXHIBIT 4.4
WARRANT AGREEMENT
AMONG
STERLING CHEMICALS HOLDINGS, INC.
AND
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
CREDIT SUISSE FIRST BOSTON
AND
CERTAIN OTHER FINANCIAL INSTITUTIONS
DECEMBER 15, 1998
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TABLE OF CONTENTS
1. Issuance of Warrants; Form of Warrant......................................1
2. Representations, Warranties and Covenants of the Company...................2
(a) Existence...........................................................2
(b) Power and Authority.................................................2
(c) Reservation, Issuance and Delivery of Common Stock..................2
(d) Execution and Delivery..............................................3
(e) Valid and Binding Obligations.......................................3
(f) Liabilities, Litigation and Restrictions............................3
(g) Authorization and Consents..........................................4
(h) Compliance with Laws................................................4
(i) No Material Misstatements...........................................4
(j) Solvency............................................................4
3. Registration...............................................................4
4. Exchange of Warrant Certificates...........................................4
5. Transfer of Warrants.......................................................5
6. Term of Warrants; Exercise of Warrants.....................................5
7. Compliance with Government Regulations.....................................7
8. Payment of Taxes...........................................................7
9. Mutilated or Missing Warrants..............................................7
10. Reservation of Warrant Shares; Purchase and Cancellation of Warrants.......8
11. Adjustment of Number of Warrant Shares.....................................8
11.1. Mechanical Adjustments..............................................9
11.2. Voluntary Adjustment by the Company................................14
11.3. Notice of Adjustment...............................................14
11.4. Preservation of Purchase Rights Upon Merger, Consolidation, Etc....14
11.5. Statement on Warrants..............................................15
11.6. Company to Prevent Dilution........................................15
11.7. Concerning All Adjustments.........................................15
12. Fractional Interests......................................................15
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13. Registration Under the Securities Act of 1933.............................16
14. Certificate to Bear Legends...............................................17
15. Registration Rights.......................................................18
(a) Demand Registration Rights.........................................18
(b) Piggy-back Registration Rights.....................................21
(c) Other Matters......................................................22
(d) Restrictions on Public Sale by the Company.........................23
(e) Rule 144...........................................................23
(f) Other Registration Rights..........................................23
16. No Rights as Stockholders; Notice to Warrant Holders......................24
17. Expenses..................................................................25
18. Right to Inspection.......................................................25
19. Right to Information......................................................25
20. Notices...................................................................25
21. Governing Law.............................................................26
22. Supplements and Amendments................................................26
23. Survival of Representations, Warranties and Covenants.....................26
24. Successors................................................................26
25. Merger or Consolidation of the Company....................................27
26. Benefits of this Warrant Agreement........................................27
27. Captions..................................................................27
28. Counterparts..............................................................27
29. Termination...............................................................27
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WARRANT AGREEMENT
THIS WARRANT AGREEMENT ("Warrant Agreement") is dated as of December
15, 1998, among Sterling Chemicals Holdings, Inc., a Delaware corporation (the
"Company"), Chase Bank of Texas, National Association ("Chase"), Credit Suisse
First Boston ("CS First Boston"), and the financial institutions signatory
hereto.
WHEREAS, Chase, individually and as Administrative Agent ("Agent"), CS
First Boston, individually and as the Documentation Agent (the "Documentation
Agent"), certain other financial institutions (the Agent as a lender, the
Documentation Agent as a lender and such other financial institutions referred
to are hereinafter collectively called the "Lenders") and the Company's wholly
owned subsidiary, Sterling Chemicals, Inc. ("SCI"), have entered into a certain
Amended and Restated Credit Agreement, dated July 10, 1997, as amended and
supplemented as of March 31, 1998 and December 15, 1998 (the "Facility");
WHEREAS, the Company owns all of the issued and outstanding capital
stock of SCI and is indirectly is benefitted by the Facility; and
WHEREAS, to induce the Lenders to enter into the Second Amendment to
Amended and Restated Credit Agreement of even date herewith, the Company agreed
to enter into this Warrant Agreement pursuant to which, upon the occurrence of
certain events and on the terms and subject to the conditions set forth herein,
the Company would issue to the Lenders warrants (the "Warrants") to purchase up
to the number of shares of the common stock, par value $0.01 per share, of the
Company ("Common Stock") which in the aggregate is equal to five percent (5%) of
the number of shares of Common Stock issued and outstanding (on a fully diluted
basis and treating all of the shares of common stock issuable upon exercise,
conversion or exchange of all options, warrants and other convertible and
exchangeable securities as being outstanding) immediately after such issuance,
each Warrant entitling the registered holder thereof (the "Holder" and, together
with the registered holders of all other Warrants, the "Holders") to purchase
one share of Common Stock at the Exercise Price (as defined in Section 6
hereof), subject to adjustment as hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, and for other good and valuable consideration, the
parties hereto agree as follows:
1. ISSUANCE OF WARRANTS; FORM OF WARRANT. In the event, and only in the
event, that SCI becomes obligated to request or otherwise cause the Company to
issue Warrants to the Lenders pursuant to Section 5.01(k) of the Facility, the
Company will, on the Warrant Date referred to in the Facility, issue and deliver
to each Lender, or to an affiliate, successors or assigns thereof designated in
writing by such Lender, Warrants to purchase up to that number of shares of
Common Stock which in the aggregate is equal to such Lender's Total Credit
Percentage (as defined in the Facility) times the number which in the aggregate
is equal to (5%) of the number of shares of Common Stock issued and outstanding
(on a fully diluted basis and treating all of the shares of common stock
issuable upon exercise, conversion or exchange of all options, warrants and
other convertible and exchangeable securities as being outstanding) immediately
after such issuance. The Warrants shall be evidenced by
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certificates in registered form (the "Warrant Certificates"), in the form
attached hereto as Exhibit A, and may have such insertions, letters, numbers or
other marks of identification and such legends and endorsements stamped,
printed, lithographed or engraved thereon as may, consistently herewith, be
determined to be necessary or appropriate by the officers of the Company
executing such Warrant Certificates, as evidenced by their execution of the
Warrant Certificates, or as may be required to comply with any applicable law,
rule or regulation or with any rule or regulation of any securities exchange or
to conform to usage. The Warrants shall be executed on behalf of the Company by
its Chairman of the Board, President, Treasurer or any Vice President, under its
corporate seal, affixed or in facsimile, attested by the signature of its
Secretary or an Assistant Secretary. The execution of a Warrant Certificate by
any such officer of the Company may be made either manually or by facsimile
signature printed thereon. A Warrant Certificate bearing the signature of
individuals who were at any time the proper officers of the Company shall bind
the Company notwithstanding that such individuals or any of them shall have
ceased to hold such offices prior to the delivery of such Warrant Certificate or
did not hold such offices on the date of this Warrant Agreement.
Warrant Certificates shall be dated as of the date of execution thereof
by the Company, either upon initial issuance or upon division, exchange,
substitution or transfer.
The exercise of any Warrant by a Holder which is a bank holding company
under the Bank Holding Company Act of 1956, as amended (the "Bank Holding
Company Act"), or by any Holder who is a transferee from such a bank holding
company, is subject to the provisions of Section 6(c).
2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY. The
Company hereby represents, warrants and covenants as follows:
(a) EXISTENCE. The Company is a corporation, duly organized
and validly existing under the laws of the State of Delaware and is
authorized to do business and is in good standing as a foreign
corporation in every jurisdiction in which it owns or leases real
property or in which the nature of its business requires it to be so
qualified, except where the failure to so qualify, individually or in
the aggregate, could not reasonably be expected to have a material
adverse effect on the business, operations, assets, condition
(financial or otherwise) or results of operations of the Company and
its subsidiaries, taken as a whole (a "Material Adverse Effect").
(b) POWER AND AUTHORITY. The Company has all requisite
corporate power and authority, and has taken all corporate action
necessary, to execute, deliver and perform this Warrant Agreement, to
grant, issue and deliver the Warrants and to authorize and reserve for
issuance and, upon payment from time to time of the Exercise Price, to
issue and deliver the shares of Common Stock or other securities
issuable upon exercise of the Warrants. This Warrant Agreement has been
duly executed and delivered by the Company.
(c) RESERVATION, ISSUANCE AND DELIVERY OF COMMON STOCK. There
have been reserved for issuance, and the Company shall at all times
keep reserved for issuance, out of the authorized and unissued shares
of Common Stock, a number of shares of Common Stock sufficient to
provide for the exercise of the rights of purchase represented by the
Warrants, and such shares, when issued upon receipt of payment therefor
in accordance with the terms of the
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Warrant Certificates and of this Warrant Agreement, will be legally
and validly issued, fully paid and non-assessable and will be free of
any preemptive rights of stockholders or any restrictions; provided,
however, that unless the Holders shall have exercised their
registration rights in Section 15 hereof, such shares will not be
registered under the Securities Act of 1933, as amended (the
"Securities Act"), or any state's securities act.
(d) EXECUTION AND DELIVERY. Neither the execution or delivery
of this Warrant Agreement nor the consummation of the transactions
herein contemplated does or will result in a breach or violation of any
of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries is bound or to
which any of the property or assets of the Company is subject, nor will
such action result in any violation of any provision of the Certificate
of Incorporation or Bylaws of the Company or any of its subsidiaries or
any statute or any order, rule or regulation or any court or
governmental agency or body having jurisdiction over the Company or any
of its subsidiaries or any of its or their properties, except for
breaches, violations and defaults which could not reasonably be
expected to, individually or in the aggregate, have a Material Adverse
Effect; and no consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body
is required for the issuance and sale of the Warrants or the
consummation by the Company of the transactions contemplated by this
Warrant Agreement, except those required by the Securities Act, the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
any State securities laws and except for those which the failure to
obtain or make could not reasonably be expected to, individually or in
the aggregate, have a Material Adverse Effect.
(e) VALID AND BINDING OBLIGATIONS. Assuming the due
authorization, execution and delivery hereof and thereof by the parties
hereto and thereto (other than the Company), this Warrant Agreement and
all related documents, when duly executed and delivered, are legal,
valid and binding obligations of the Company, enforceable in accordance
with their respective terms, except as such enforcement may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally and general
equitable principles.
(f) LIABILITIES, LITIGATION AND RESTRICTIONS. Except for the
litigation and liabilities disclosed in connection with the Facility
and the litigation and liabilities described in the reports (including
annual and quarterly reports), proxy or information statements and/or
registration statements filed by the Company with the Securities and
Exchange Commission, (including the exhibits thereto and the financial
statements contained therein and the notes thereto, collectively, the
"SEC Documents"), the Company and its subsidiaries have no liabilities,
direct or contingent, which could reasonably be expected to have a
Material Adverse Effect. Except as disclosed to the Lenders or
described in the SEC Documents, no litigation or other action of any
nature affecting the Company or any of its subsidiaries is pending
before any governmental authority or, to the knowledge of the Company,
threatened against or affecting the Company or any of its subsidiaries,
which could reasonably be expected to have a Material Adverse Effect.
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(g) AUTHORIZATION AND CONSENTS. No authorization, consent,
approval, exemption, franchise, permit or license of, or filing with,
any governmental authority or other person is required to authorize, or
is otherwise required in connection with, the valid execution and
delivery by the Company of this Warrant Agreement and all related
documents and the performance by the Company of its obligations
hereunder, except those required by the Securities Act, the Exchange
Act, and any State securities laws and except for those which the
failure to obtain or make could not reasonably be expected to,
individually or in the aggregate, have a Material Adverse Effect.
(h) COMPLIANCE WITH LAWS. Except as otherwise described in the
SEC Documents, to the knowledge of the Company, neither the business
nor any of the activities of the Company or any of its subsidiaries, as
presently conducted, violates any requirement of law the result of
which violation could reasonably be expected to have a Material Adverse
Effect.
(i) NO MATERIAL MISSTATEMENTS. Except as otherwise described
in the SEC Documents, no information, statement, certificate, document,
exhibit or report prepared by or at the direction or with the
supervision of the Company and furnished to the Lenders in connection
with the negotiation and preparation of this Warrant Agreement and all
related documents contains any material misstatements of fact or omits
to state a material fact necessary to make the statements contained
therein not misleading as of the date made or deemed made.
(j) SOLVENCY. The Company and its subsidiaries, taken as a
whole, are Solvent (as this term is defined in the Facility) as of and
immediately following the date of execution of this Warrant Agreement.
3. REGISTRATION. The Warrants shall be numbered and shall be registered
on the books of the Company (the "Warrant Register") as they are issued. The
Warrants shall be registered initially in such names and such denominations as
the Lenders have specified (or will specify) to the Company in writing.
4. EXCHANGE OF WARRANT CERTIFICATES. Subject to any restriction upon
transfer set forth in this Warrant Agreement, each Warrant Certificate may be
exchanged at the option of the Holder thereof for another Warrant Certificate or
Certificates of different denominations entitling the Holder thereof to purchase
upon surrender to the Company or its duly authorized agent a like aggregate
number of shares of Common Stock as the Warrant Certificate or Certificates
surrendered then entitle such Holder to purchase. The shares of Common Stock
issuable upon exercise of the Warrants are referred to herein as "Warrant
Shares". Any Holder desiring to exchange a Warrant Certificate or Certificates
shall make such request in writing delivered to the Company, and shall
surrender, properly endorsed, the Warrant Certificate or Certificates to be so
exchanged. Thereupon, the Company shall execute and deliver to the person
entitled thereto a new Warrant Certificate or Certificates, as the case may be,
as so requested. Any Warrant Certificate issued upon exchange, transfer or
partial exercise of the Warrants shall be the valid obligation of the Company,
evidencing the same generic rights and entitled to the same generic benefits
under this Warrant Agreement as the Warrant Certificate surrendered for such
exchange, transfer or exercise.
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5. TRANSFER OF WARRANTS. A Holder may transfer its Warrants only by
written notice to the Company stating the name of the proposed transferee and
otherwise complying with the terms of this Warrant Agreement and all applicable
laws, rules and regulations. Subject to the provisions of Section 15 hereof, the
Warrants shall be transferrable only on the Warrant Register upon delivery to
the Company of the Warrant Certificate or Certificates duly endorsed by the
Holder or by his duly authorized attorney-in-fact or legal representative, or
accompanied by proper evidence of succession, assignment or authority to
transfer. In all cases of transfer by an attorney-in-fact, the original power of
attorney, duly approved, or an official copy thereof, duly certified, shall be
deposited with the Company. In case of transfer by executors, administrators,
guardians or other legal representatives, duly authenticated evidence of their
authority shall be produced, and may be required to be deposited with the
Company in its discretion. Prior to due presentation for registration of
transfer, the Company and any agent of the Company may deem and treat the person
in whose name the Warrants are registered in the Warrant Register as the
absolute owner thereof for all purposes (notwithstanding any notation of
ownership or other writing on the Warrant Certificate made by anyone), and the
Company shall not be affected by any notice to the contrary or be bound to
recognize any equitable or other claim to or in interest in any Warrants on the
part of any other person and shall not be liable for any registration of
transfer of Warrants that are registered or to be registered in the Warrant
Register in the name of a fiduciary or the nominee of a fiduciary unless made
with actual knowledge that a fiduciary or nominee is committing a breach of
trust in requesting such registration of transfer or with such knowledge of such
facts that its participation therein amounts to bad faith. No service charge
shall be made for any registration of transfer or exchange of Warrants, but the
Company may require payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection with any registration of
transfer of Warrants. Upon any registration of transfer, the Company shall
deliver a new Warrant Certificate or Certificates to the person(s) entitled
thereto.
6. TERM OF WARRANTS; EXERCISE OF WARRANTS.
(a) Each Warrant entitles the Holder thereof to purchase one
share of Common Stock at any time from the Warrant Date until 5:00
P.M., Houston time, on January 1, 2007 (the "Expiration Date") at a
purchase price of $0.01 per share (the "Exercise Price"). Each
outstanding Warrant may be exercised on any business day which is on or
after its date of issue and on or before the Expiration Date, but only
if a registration statement filed under the Securities Act with respect
to the exercise of such Warrants (a "Registration Statement") is, at
the time of exercise, effective and available or the exercise of such
Warrants is exempt from the registration requirements of the Securities
Act. Any Warrants not exercised by 5:00 p.m., Houston time, on the
Expiration Date shall expire and all rights thereunder and all rights
in respect thereof under this Warrant Agreement shall automatically
terminate at such time. The number of shares issuable upon exercise of
Warrants are subject to adjustment upon the occurrence of certain
events pursuant to the provisions of Section 11 of this Warrant
Agreement.
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(b) Each Warrant Certificate shall, subject to the provisions
of this Warrant Agreement and such Warrant Certificate, entitle the
Holder thereof to purchase from the Company (and the Company shall
issue and sell to such Holder) one share of Common Stock (subject to
adjustment as provided herein) for each Warrant represented thereby at
the Exercise Price, upon surrender to the Company, or its duly
authorized agent, of such Warrant Certificate, with the purchase form
on the reverse thereof duly filled in and signed, and upon payment to
the Company of the Exercise Price for each Warrant being exercised.
Each Holder may pay the Exercise Price in cash, by certified or
official bank check payable to the order of the Company; provided, that
each Holder may at any time exercise the Warrants for "Net Warrant
Shares." The number of Net Warrant Shares will be determined as
described by the following formula: Net Warrant Shares = [WS x
(MP-EP)]/MP. "WS" is the aggregate number of Warrant Shares issuable
upon exercise of the Warrants or portion of Warrants in question. "MP"
is the Market Price of the Common Stock on the last trading day
preceding the date of the request to exercise the Warrants. "Market
Price" shall mean the then current market price per share of Common
Stock, as determined in paragraph 11.1(e). "EP" shall mean the Exercise
Price.
Upon such surrender of a Warrant Certificate, and payment of
the Exercise Price, the Company at its expense shall cause its transfer
agent to issue and cause to be delivered with all reasonable dispatch
(but in any event within 5 business days) to or upon the written order
of the Holder and in such name or names as the Holder may designate, a
Warrant Certificate or Certificates for the number of full shares of
Common Stock so purchased upon the exercise of such Warrants, together
with cash, as provided in Section 12 of this Warrant Agreement, in
respect of any fraction of a share of such Common Stock otherwise
issuable upon such surrender. Such Warrant Certificate or Certificates
shall be deemed for all purposes to have been issued and any person so
designated to be named therein shall be deemed to have become a holder
of record of such shares as of the date of the surrender of such
Warrant Certificate and payment of the Exercise Price or surrender of
such Warrant Certificate with a notice requesting a net exercise as
aforesaid. The rights of purchase represented by the Warrant
Certificates shall be exercisable, at the election of the Holders
thereof, either in full or from time to time in part and, in the event
that any Warrant Certificate is exercised in respect of less than all
of the Warrants represented thereby at any time prior to the Expiration
Date, a new Warrant Certificate evidencing the remaining Warrant or
Warrants will be issued.
(c) A Holder which is a bank holding company under the Bank
Holding Company Act shall so inform the Company and, at the time any
Warrant is exercised by such Holder, and as a condition thereto, such
Holder shall certify to the Company that such exercise, whether in
whole or in part, does not violate such act; and no Warrant may be
exercised in whole or in part prior to 45 days before the Expiration
Date without such certification. If any such Holder shall transfer any
Warrant, the transferee may not exercise such Warrant until the earlier
of six months following the date of transfer and 45 days before the
Expiration Date unless the transferror bank holding company shall
certify to the Company at the time of transfer that, had such
transferror exercised such Warrant at the time of transfer, such
exercise would not have violated the Bank Holding Company Act.
(d) In no event shall any Warrant be exercisable after the
Expiration Date.
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7. COMPLIANCE WITH GOVERNMENT REGULATIONS. In the event a Holder
exercises its Warrants at a time when the Registration Statement is not
effective and available, such Holder must furnish to the Company such
certifications, legal opinions or other information as the Company may
reasonably require to confirm that such exercise is being made pursuant to an
exemption from the registration requirements of the Securities Act. The Company
covenants that if any share of Common Stock required to be reserved for purposes
of exercise or conversion of Warrants require, under any Federal or state law or
applicable governing rule or regulation of any national securities exchange,
registration with or approval of any governmental authority, or listing on any
such national securities exchange, before such shares may be issued upon
exercise and subject to the provisions of Section 11, the Company will use its
best efforts to cause such shares to be duly registered, approved or listed on
the relevant national securities exchange, as the case may be; provided,
however, the Company shall not be required to effect any registration under the
Securities Act except in accordance with Section 15 hereof.
8. PAYMENT OF TAXES. The Company will pay all documentary stamp taxes,
if any, attributable to the initial issuance of Warrant Shares upon the exercise
of Warrants and any securities issued pursuant to Section 11 hereof; provided,
however, that the Company shall not be required to pay (and the Holder or its
transferee shall pay) any tax or taxes which may be payable in respect of any
transfer involved in the issue or delivery of any Warrant Certificate or
Certificates for Warrant Shares and any securities issued pursuant to Section 11
hereof in a name other than that of the Holder of such Warrants.
9. MUTILATED OR MISSING WARRANTS. Upon receipt by the Company of
evidence satisfactory to it of the ownership and the loss, theft, destruction or
mutilation of any Warrant Certificate, and an indemnity bond in form and amount
and with corporate surety satisfactory to the Company, and (in the case of
mutilation) upon surrender and cancellation thereof, then, in the absence of
notice to the Company that the Warrants represented thereby have been acquired
by a bona fide purchaser, the Company shall issue and deliver to the Holder of
the lost, stolen, destroyed or mutilated Warrant Certificate, in exchange and
substitution for or in lieu thereof, a new Warrant Certificate of the same tenor
and representing an equivalent number of Warrants. Upon the issuance of any new
Warrant Certificate under this Section 9, the Company may require the payment of
a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and other expenses in connection therewith. Every
new Warrant Certificate executed and delivered pursuant to this Section 9 in
lieu of any lost, stolen, destroyed or mutilated Warrant Certificate shall
constitute an original contractual obligation of the Company, whether or not the
allegedly lost, stolen, destroyed or mutilated Warrant Certificates shall be at
any time enforceable by anyone, and shall be entitled to the benefits of this
Warrant Agreement equally and proportionately with any and all other Warrant
Certificates duly executed and delivered hereunder. The provisions of this
Section 9 are exclusive and shall preclude (to the extent lawful) all other
rights or remedies with respect to the replacement of lost, stolen, destroyed or
mutilated Warrant Certificates. Notwithstanding the foregoing, no Lender which
is a Holder shall be required to provide an indemnity bond as described in this
Section 9 so long as such Lender provides the Company with an indemnity
agreement in form and substance reasonably satisfactory to the Company.
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10. RESERVATION OF WARRANT SHARES; PURCHASE AND CANCELLATION OF
WARRANTS. (a) The Company shall at all times reserve, out of its authorized and
unissued shares of Common Stock, a number of shares of Common Stock sufficient
to provide for the exercise of the rights of purchase represented by the
Warrants. The Company will keep a copy of this Warrant Agreement on file with
every transfer agent for any shares of the Company's capital stock issuable upon
the exercise of the rights of purchase represented by the Warrants. Upon notice
of exercise, the Company will supply any transfer agent with duly executed stock
certificates for such purpose and will itself provide or otherwise make
available any cash which may be issuable as provided by Section 12 of this
Warrant Agreement. The Company will furnish to the transfer agent and any such
subsequent transfer agent a copy of all notices of adjustments, and certificates
related thereto, transmitted to each Holder pursuant to Section 11.3 hereof. All
Warrants surrendered in the exercise of the rights thereby evidenced shall be
cancelled. No shares of stock shall be subject to reservation in respect of the
Warrants subsequent to the Expiration Date except to the extent necessary to
comply with the terms of this Warrant Agreement.
(b) The Company shall have the right, except as limited by law or other
agreement, to purchase or otherwise acquire Warrants at such times, in such
manner and for such consideration as it may deem appropriate. In the event the
Company shall purchase or otherwise acquire Warrants, the Company may, at its
option, cancel the related Warrant Certificates; provided, however, that unless
and until the Warrant Certificates evidencing such Warrants are cancelled, such
purchase or acquisition shall not operate as a redemption or termination of the
right represented by such Warrants.
11. ADJUSTMENT OF NUMBER OF WARRANT SHARES. From and after the issuance
of the Warrants, the number and kind of securities purchasable upon the exercise
of each Warrant shall be subject to adjustment from time to time upon the
occurrence of certain events, as hereafter defined, provided that the Company
shall not be required to make any such adjustment unless such specified event
occurs after the issuance of the Warrants.
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11.1. MECHANICAL ADJUSTMENTS. From and after the issuance of
the Warrants, the number of Warrant Shares purchasable upon the
exercise of each Warrant shall be subject to adjustment as follows:
(a) In case the Company shall (i) pay a dividend in
shares of Common Stock or make a distribution in shares of
Common Stock, (ii) subdivide its outstanding shares of Common
Stock into a larger number of shares of Common Stock, (iii)
combine its outstanding shares of Common Stock into a smaller
number of shares of Common Stock or (iv) issue by
reclassification of its shares of Common Stock other
securities of the Company (including any such reclassification
in connection with a consolidation or merger in which the
Company is the surviving corporation), the number of Warrant
Shares purchasable upon exercise of each Warrant immediately
prior to the record date of such dividend or the effective
date of such subdivision, combination or reclassification
shall be adjusted so that the Holder of each Warrant shall be
entitled to receive the kind and number of Warrant Shares or
other securities of the Company which such Holder would have
owned or have been entitled to receive after the happening of
any of the events described above, had such Warrant been
exercised immediately prior to the happening of such event or
any record date with respect thereto. An adjustment made
pursuant to this paragraph (a) shall become effective
immediately after the effective date of such event retroactive
to the record date, if any, for such event.
(b) In case the Company shall issue rights, options
or warrants generally to holders of its outstanding shares of
Common Stock, without any charge to such holders, entitling
them to subscribe for or purchase shares of Common Stock at a
price per share which is lower at the record date mentioned
below than the then current Market Price per share of Common
Stock (as determined in accordance with paragraph (e) below),
then in each such case the number of Warrant Shares thereafter
purchasable upon the exercise of each Warrant shall be
determined by multiplying the number of Warrant Shares
theretofore purchasable upon exercise of each Warrant by a
fraction, of which the numerator shall be the number of shares
of Common Stock outstanding immediately prior to the issuance
of such rights, options or warrants plus the number of
additional shares of Common Stock offered for subscription or
purchase, and of which the denominator shall be the number of
shares of Common Stock outstanding immediately prior to the
issuance of such rights, options or warrants plus the number
of shares which the aggregate offering price of the total
number of shares of Common Stock so offered would purchase at
the then current Market Price per share of Common Stock. Such
adjustment shall be made whenever such rights, options or
warrants are issued, and shall become effective retroactively
immediately after the record date for the determination of
stockholders entitled to receive such rights, options or
warrants.
(c) In case the Company shall distribute generally to
holders of its outstanding shares of Common Stock evidences of
its indebtedness or assets (including cash dividends or other
cash distributions) or rights, options or warrants, or
convertible or exchangeable securities containing the right to
subscribe for or purchase shares of Common Stock (excluding
those referred to in paragraph (b) above), then in each case
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the number of Warrant Shares thereafter purchasable upon the
exercise of each Warrant shall be determined by multiplying
the number of Warrant Shares theretofore purchasable upon the
exercise of each Warrant by a fraction, of which the numerator
shall be the then current Market Price per share of Common
Stock (as determined in accordance with paragraph (e) below)
on the date of such distribution, and of which the denominator
shall be the then current Market Price per share of Common
Stock, less the then fair value (as determined in good faith
by the Board of Directors of the Company, whose determination
shall be conclusive) of the portion of the assets or evidences
of indebtedness so distributed or of such subscription rights,
options or warrants, or of such convertible or exchangeable
securities applicable to one share of Common Stock. Such
adjustment shall be made whenever any such distribution is
made, and shall become effective on the date of distribution
retroactive to the record date for the determination of
stockholders entitled to receive such distribution.
In the event of a distribution by the Company
generally to holders of its outstanding shares of Common Stock
of stock of a subsidiary or securities convertible into or
exercisable for such stock, then in lieu of an adjustment in
the number of Warrant Shares purchasable upon the exercise of
each Warrant, the Holder, upon the exercise thereof at any
time after such distribution, shall be entitled to receive
from the Company, such subsidiary or both, as the Company
shall determine, the number of shares of stock of a subsidiary
or other securities to which such Holder would have been
entitled if such Holder had exercised such Warrant immediately
prior thereto, all subject to further adjustment as provided
in this subsection 11.1; provided, however, that no adjustment
in respect of dividends or interest on such stock of a
subsidiary or other securities shall be made during the term
of a Warrant or upon the exercise of a Warrant.
(d) In case the Company shall sell and issue shares
of Common Stock (other than pursuant to rights, options,
warrants, or convertible or exchangeable securities
(collectively, "Rights") initially issued before the initial
issuance of Warrants under this Warrant Agreement or pursuant
to any Rights if no adjustment was required in connection with
the issuance of such Right or any adjustment required in
connection with the issuance of such Right has been previously
made) or Rights containing the right to subscribe for or
purchase shares of Common Stock (excluding (i) shares and
Rights issued in any of the transactions described in
paragraphs (a), (b) or (c) above), (ii) any shares or Rights,
if on the date the same were issued, the purchase, exercise,
conversion or exchange price per share of Common Stock with
respect thereto was at least equal to the Market Price per
share of Common Stock on such date, (iii) any shares or Rights
(with respect to not more than an aggregate of 10% of the
outstanding shares of Common Stock) issued to employees of the
Company or any of its subsidiaries and (iv) any shares or
Rights issued as consideration when any corporation or
business is acquired, merged into or becomes part of the
Company or any subsidiary of the Company in an arm's-length
transaction between the Company and a person or entity other
than an affiliate of the Company) at a price per share of
Common Stock (determined, in the case of such Rights by
dividing (w) the total of the amount received or receivable by
the Company (determined as provided below) in consideration of
the
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sale and issuance of such Rights by (x) the total number of
shares of Common Stock covered by such Rights) lower than the
Market Price per share of Common Stock in effect immediately
prior to such sale and issuance, then the number of Warrant
Shares thereafter purchasable upon the exercise of each
Warrant shall be determined by multiplying the number of
Warrant Shares theretofore purchasable upon exercise of such
Warrant by a fraction, of which the numerator shall be the
number of shares of Common Stock outstanding immediately prior
to such sale or issuance plus the number of additional shares
of Common Stock sold or subject to issuance pursuant to such
Rights and of which the denominator shall be the number of
shares of Common Stock outstanding immediately prior to such
sale or issuance of such shares or Rights plus the number of
shares of Common Stock which the aggregate consideration
received or receivable (determined as provided below) for such
sale or issuance would purchase at the Market Price per share
of Common Stock. Such adjustment shall be made successively
whenever such an issuance is made. For the purposes of such
adjustments, the consideration received or receivable by the
Company for Rights shall be deemed to be the consideration
received by the Company for such Rights, plus the
consideration or premiums stated in such Rights to be paid for
the shares of Common Stock covered thereby. In case the
Company shall sell and issue shares of Common Stock or Rights
containing the right to subscribe for or purchase shares of
Common Stock, for a consideration consisting, in whole or in
part, of property other than cash or its equivalent, then in
determining the "price per share of Common Stock" and the
"consideration received or receivable by the Company" for
purposes of the first sentence of this paragraph (d), the
Board of Directors shall determine, in its discretion, the
fair value of said property, and such determination, if made
in good faith, shall be binding upon all Holders.
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(e) The "Market Price" on any day shall mean the
average of the daily market prices for a share of Common Stock
over a period of 20 consecutive business days prior to the day
as of which "Market Price" is being determined. The Market
Price for each such business day shall be the average of the
closing prices on such day of the Common Stock on all domestic
exchanges on which the Common Stock is then listed, or, if
there shall have been no sales on any such exchange on such
day, the average of the highest bid and lowest asked prices on
all such exchanges at the end of such day, or, if the Common
Stock shall not be so listed, the average of the
representative bid and asked prices quoted on The Nasdaq Stock
Market as of 3:30 P.M., New York time, on such day, or if the
Common Stock shall not be quoted on The Nasdaq Stock Market,
the average of the high and low bid and asked prices on such
day in the domestic over-the-counter market as reported by the
National Quotation Bureau, Incorporated, or any similar
successor organization. If the Common Stock is listed on any
domestic exchange, the term "business days" as used in this
sentence shall mean business days on which such exchange is
open for trading. If at any time the Common Stock is not
listed on any domestic exchange or quoted on The Nasdaq Stock
Market or the domestic over-the-counter market, the "Market
Price" shall be deemed to be the higher of (i) the book value
thereof, as determined by any firm of independent public
accountants of recognized standing selected by the Board of
Directors of the Company, as at the last day of any month
ending within 60 days preceding the date as of which the
determination is to be made or (ii) the fair value thereof,
which shall be reasonably determined by the Board of Directors
of the Company as of a date which is within 15 days of the
date as of which the determination is to be made.
Notwithstanding the foregoing, for the purpose of any
calculation under paragraph (d) above, (A) with respect to any
issuance of options under the Company's employee or director
compensation stock option plans as in effect or as adopted by
the Board of Directors of the Company, the term "Market
Price", in such instances shall mean the fair market price on
the date of the issuance of any such option determined in
accordance with the Company's employee compensation stock
option plans as in effect or adopted by the Board of Directors
of the Company; and (B) with respect to any issuances of
Common Stock (or Rights) in connection with bona fide
corporate transactions (other than issuances in such
transactions for cash or similar consideration), the term
"Market Price" shall mean the fair market price per share as
determined in arm's-length negotiations by the Company and
such other parties (other than affiliates or subsidiaries of
the Company) to such transactions as reflected in the
definitive documentation with respect thereto, unless such
determination is not reasonably related to the closing market
price on the date of such determination.
(f) In any case in which this Section 11.1 shall
require that any adjustment in the number of Warrant Shares be
made effective as of immediately after a record date for a
specified event, the Company may elect to defer until the
occurrence of the event the issuing to the Holder of any
Warrant exercised after that record date the Warrant Shares
and other securities of the Company, if any, issuable upon the
exercise of any Warrant over and above the Warrant Shares and
other securities of the Company, if any, issuable upon the
exercise of any Warrant prior to such adjustment; provided,
however,
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that the Company shall deliver to such Holder a due xxxx or
other appropriate instrument evidencing the Holder's right
to receive such additional shares or securities upon the
occurrence of the event requiring such adjustment.
(g) All calculations shall be made to the nearest
one-thousandth of a share.
(h) No adjustment in the number of Warrant Shares
purchasable upon the exercise of any Warrant shall be required
unless such adjustment would require an increase or decrease
of at least one percent in the number of Warrant Shares
purchasable upon the exercise of such Warrant; provided,
however, that any adjustments which are not required to be
made by reason of this Section 11.1(h) shall be carried
forward and taken into account in any subsequent adjustment.
No adjustment in the number of Warrant Shares purchasable upon
the exercise of each Warrant need be made under paragraphs
(b), (c) and (d) if the Company issues or distributes to each
Holder the Rights or evidences of indebtedness or assets
referred to in those paragraphs which each Holder would have
been entitled to receive had the Warrants been exercised prior
to the happening of such event or the record date with respect
thereto regardless of whether the Warrants are exercisable at
the time of the happening of such event or at the time of any
record date with respect thereto. No adjustment need be made
for a change in the par value of the Warrant Shares.
(i) For the purpose of this Section 11.1, the terms
"shares of Common Stock" and "Warrant Shares" shall mean (i)
the class of stock designated as the common stock of the
Company at the date of this Warrant Agreement, or (ii) any
other class of stock resulting from successive changes or
reclassifications of such shares consisting solely of changes
in par value, or from par value to no par value, or from no
par value to par value. In the event that at any time, as a
result of an adjustment made pursuant to paragraph (a) above,
the Holders shall become entitled to purchase any securities
of the Company other than shares of Common Stock, thereafter
the number of such other securities so purchasable upon
exercise of each Warrant shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Warrant
Shares contained in paragraphs (a) through (h), inclusive,
above, and the provisions of Section 6 and Section 11.2
through 11.7, inclusive, with respect to the Warrant Shares,
shall apply on like terms to any such other securities. The
number of shares of Common Stock outstanding at any given time
shall not include shares owned or held by or for the account
of the Company, and the disposition of any such shares shall
not be considered an issue or sale of Common Stock for the
purposes of this Section 11.
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(j) Upon the expiration of any Rights, if any thereof
shall not have been exercised, the number of shares of Common
Stock purchasable upon the exercise of each Warrant shall,
upon such expiration, be readjusted and shall thereafter be
such as it would have been had it been originally adjusted (or
had the original adjustment not been required, as the case may
be) as if (A) the only shares of Common Stock so issued were
the shares of Common Stock, if any, actually issued or sold
upon the exercise of such Rights, and (B) such shares of
Common Stock, if any, were issued or sold for the
consideration actually received by the Company upon such
exercise plus the aggregate consideration, if any, actually
received by the Company for the issuance, sale or grant of all
such Rights whether or not exercised; provided, however, that
no such readjustment shall have the effect of decreasing the
number of Warrant Shares issuable upon the exercise of each
Warrant by an amount in excess of the amount of the adjustment
initially made with respect to the issuance, sale or grant of
such Rights.
11.2. VOLUNTARY ADJUSTMENT BY THE COMPANY. The Company may, at
its option, at any time during the term of the Warrants, reduce the
then current Exercise Price to any amount determined appropriate by the
Board of Directors of the Company or may make any other adjustment to
increase the number of Warrant Shares issuable upon exercise of each
Warrant as it may, in good faith, deem desirable to protect the rights
and benefits of the Holders.
11.3. NOTICE OF ADJUSTMENT. When the number of Warrant Shares
purchasable upon the exercise of each Warrant is adjusted, as herein
provided, the Company shall promptly mail by first class, postage
prepaid, to each Warrant Holder notice of such adjustment or
adjustments and a certificate of a firm of independent public
accountants selected by the Board of Directors of the Company (who may
be the regular accountants employed by the Company) setting forth the
number of Warrant Shares purchasable upon the exercise of each Warrant
after such adjustment and setting forth a brief statement of the facts
requiring such adjustment and setting forth the computation by which
such adjustment was made. Such certificate, absent manifest error,
shall be conclusive evidence of the correctness of such adjustment.
11.4. PRESERVATION OF PURCHASE RIGHTS UPON MERGER,
CONSOLIDATION, ETC. In case of any consolidation of the Company with or
merger of the Company into another person or in case of any sale,
transfer or lease to another person of all of or substantially all the
assets of the Company, the Company or such successor or purchaser, as
the case may be, shall execute with each Holder an agreement that each
Holder shall have the right thereafter upon payment of the Exercise
Price in effect immediately prior to such action to purchase upon
exercise of each Warrant the kind and amount of shares and other
securities and property which the Holder would have owned or have been
entitled to receive after the happening of such consolidation, merger,
sale, transfer or lease had such Warrant been exercised immediately
prior to such action regardless of whether the Warrants are exercisable
at the time of such action. Such agreement shall provide for
adjustments, which shall be as nearly equivalent as may be practicable
to the adjustments provided for in this Section 11. The provisions of
this Section 11.4 shall similarly apply to successive consolidations,
mergers, sales, transfers or leases.
-14-
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11.5. STATEMENT ON WARRANTS. Even though Warrants heretofore
or hereafter issued may continue to express the same number and kind of
shares as are stated in the Warrants initially issuable pursuant to
this Warrant Agreement; the parties understand and agree that such
Warrants will represent rights consistent with any adjustments in the
number or kind of shares purchasable upon the exercise of the Warrants.
The Company may, however, at any time in its sole discretion (which
shall be conclusive), make any change in the form of Warrant
Certificate that it may deem appropriate and that does not affect the
substance thereof and any Warrant Certificate thereafter issued,
whether in exchange or substitution for an outstanding Warrant
Certificate or otherwise, may be in the form so changed.
11.6. COMPANY TO PREVENT DILUTION. If any event or condition
occurs as to which other provisions of this Section 11 are not strictly
applicable or if strictly applicable would not fairly protect the
exercise or purchase rights of this Warrant Agreement in accordance
with the essential intent and principles of such provisions, or which
might materially and adversely affect the exercise or purchase rights
of the Holders under any provision of the Warrant Certificates, then
the Company shall make an adjustment in the application of such
provisions, in accordance with such essential intent and principles, so
as to protect such exercise and purchase rights as aforesaid, and any
adjustment necessary with respect to the number of Warrant Shares
purchasable hereunder so as to preserve without dilution the rights of
the Holders. In no event shall any such adjustment have the effect of
increasing the Exercise Price. Unless otherwise expressly provided in
this Section 11, all determinations and calculations required or
permitted under this Section 11 shall be made by the Company or its
Board of Directors, as appropriate, and all such calculations and
determinations shall be conclusive and binding in the absence of
manifest error.
11.7. CONCERNING ALL ADJUSTMENTS. Notwithstanding anything to
the contrary contained in this Warrant Agreement, if an adjustment is
made under any provision of this Section 11 on account of any event,
transaction, circumstance, condition or happening, no additional
adjustment shall be made under any other provision of this Section 11
on account of such event, transaction, circumstance, condition or
happening. Unless otherwise expressly provided in this Section 11, all
determinations and calculations required or permitted under this
Section 11 shall be made by the Company or its Board of Directors, as
appropriate, and all such calculations and determinations shall be
conclusive and binding in the absence of manifest error.
12. FRACTIONAL INTERESTS. The Company shall not be required to issue
fractional Warrant Shares on the exercise of Warrants. If more than one Warrant
shall be presented for exercise in full at the same time by the same Holder, the
number of full Warrant Shares which shall be issuable upon the exercise thereof
shall be computed on the basis of the aggregate number of Warrant Shares
purchasable on exercise of the Warrants so presented. If any fraction of a
Warrant Share would, except for the provisions of this Section 12, be issuable
on the exercise of any Warrant (or specified portion, thereof), the Company
shall pay an amount in cash equal to the Market Price for one share of Common
Stock as of the trading day immediately preceding the date the Warrant is
presented for exercise, multiplied by such fraction.
-15-
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13. REGISTRATION UNDER THE SECURITIES ACT OF 1933. Each Lender (for
itself and no one else) represents, warrants, covenants and agrees that it will
not dispose of any Warrant or any Warrant Shares except pursuant to (i) an
effective registration statement, or (ii) an applicable exemption from
registration under the Securities Act. In connection with any sale by a Lender
pursuant to clause (ii) of the preceding sentence, it shall furnish to the
Company an opinion of counsel reasonably satisfactory to the Company to the
effect that such exemption from registration is available in connection with
such sale. Each Lender (for itself and no one else) acknowledges, understands
and agrees that the following limitations and restrictions are applicable to the
purchase, resale and distribution of the Warrants and the Warrant Shares:
(a) each Lender must bear the economic risk of its investment in
the Company for an indefinite period of time because neither the Warrants
nor the Warrant Shares have been registered under the Securities Act or
any State securities laws and, therefore, may not be subsequently
offered, sold, transferred, pledged or otherwise disposed of unless and
until they have been registered under the Securities Act and any
applicable State securities laws or exemptions from registration
thereunder are available, and each Lender further understands that only
the Company can take action to register the Warrants or the Warrant
Shares; and
(b) each Lender has been advised that the Company does not expect
that Rule 144 under the Securities Act will be available to such Lender
with respect to any of the Warrants or the Warrant Shares unless such
Lender is a non-affiliate of the Company (and has not been an affiliate
of the Company for at least three months) and has held such securities
for at least one year from the later of the date that they were issued by
the Company or the date that they were acquired from an affiliate of the
Company.
Each Lender (for itself and no one else) represents, warrants, covenants and
agrees that (i) it is purchasing the Warrants for its own account, for
investment purposes and not with a view to, or for resale in connection with,
any distribution or public offering thereof (as defined in the rules and
regulations under the federal securities laws) and is an "accredited investor"
(as defined in Regulation D under the Securities Act); (ii) it is not
participating and does not have a participation in any distribution or the
underwriting of any distribution in violation of the Securities Act, and has no
present intention of selling or otherwise disposing of any of the Warrants or
the Warrant Shares in violation of the Securities Act, (iii) it is aware that
neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved the Warrants or the Warrants Shares or
passed upon the accuracy or adequacy of this Warrant Agreement, (iv) it
recognizes that an investment in the Warrants and the Warrant Shares involves a
high degree of risk, it has such knowledge and experience in financial and
business matters as to be capable of evaluating the risks and merits of this
investment and protecting its interests in connection with this investment and
it is able to bear the economic risk of an investment in the Warrants and the
Warrant Shares, including the risk of the total loss of such investment, (v) it
has received all information it considers necessary or appropriate for deciding
whether to enter into this Warrant Agreement or to acquire the Warrants or the
Warrant Shares (including the SEC Documents filed over the last 12-month
period), and it has had an opportunity to ask questions of and receive answers
from the Company regarding the Company and the terms and conditions of the
Warrants and the Warrant Shares, and (vi) it understands that neither the
Warrants nor the Warrant Shares have been registered under the Securities Act on
the basis that the issuance or sale of the Warrants and the Warrant Shares is
exempt from the registration provisions thereof, and that the Company's reliance
on the exemption is predicated on its representations herein.
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14. CERTIFICATE TO BEAR LEGENDS. The Warrants shall be subject to a
stop-transfer order and the Warrant Certificates therefor shall bear the
following legend by which each Holder shall be bound:
"THE WARRANTS REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
STATE SECURITIES LAWS AND MAY NOT BE OFFERED OR SOLD EXCEPT
PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT, OR (ii) AN
APPLICABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF
1933, AS AMENDED. ANY SALE PURSUANT TO CLAUSE (ii) OF THE
PRECEDING SENTENCE MUST BE ACCOMPANIED BY AN UNQUALIFIED WRITTEN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY TO THE
EFFECT THAT SUCH EXEMPTION FROM REGISTRATION IS AVAILABLE IN
CONNECTION WITH SUCH SALE.
THE COMMON STOCK, PAR VALUE $0.01 PER SHARE, OF STERLING CHEMICALS
HOLDINGS, INC. (THE "COMMON STOCK") FOR WHICH THIS WARRANT IS
EXERCISABLE MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES ABSENT
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND ANY APPLICABLE STATE SECURITIES LAWS OR AN
APPLICABLE EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS.
ACCORDINGLY, NO HOLDER SHALL BE ENTITLED TO EXERCISE SUCH HOLDER'S
WARRANTS AT ANY TIME UNLESS, AT THE TIME OF EXERCISE, (i) A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT RELATING TO THE
SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE OF THIS WARRANT
HAS BEEN FILED WITH, AND DECLARED EFFECTIVE BY, THE SECURITIES AND
EXCHANGE COMMISSION (THE "COMMISSION"), AND NO STOP ORDER
SUSPENDING THE EFFECTIVENESS OF SUCH REGISTRATION STATEMENT HAS
BEEN ISSUED BY THE COMMISSION, OR (ii) THE ISSUANCE OF SUCH SHARES
IS PERMITTED PURSUANT TO AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND ANY APPLICABLE STATE
SECURITIES LAWS. ANY SALE PURSUANT TO CLAUSE (ii) OF THE PRECEDING
SENTENCE MUST BE ACCOMPANIED BY AN UNQUALIFIED WRITTEN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE COMPANY TO THE EFFECT THAT
SUCH EXEMPTION FROM REGISTRATION IS AVAILABLE IN CONNECTION WITH
SUCH SALE."
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The Warrant Shares or other securities issued upon exercise of the
Warrants shall, unless issued pursuant to an effective registration statement,
be subject to a stop-transfer order and the certificate or certificates
evidencing any such Warrant Shares or securities shall bear the following legend
by which the Warrant Holder thereof shall be bound:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
STATE SECURITIES LAW (COLLECTIVELY, THE "ACTS") AND MAY NOT BE
OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF
UNLESS MADE PURSUANT TO A REGISTRATION STATEMENT UNDER THE ACTS OR
PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS
THEREOF. FURTHER, THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT
AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE
DISPOSED OF UNLESS AND UNTIL (1) SUCH SECURITIES HAVE BEEN
REGISTERED UNDER THE ACTS OR (2) THE HOLDER OF SUCH SECURITIES
PROVIDES THE COMPANY WITH (A) AN UNQUALIFIED WRITTEN OPINION OF
LEGAL COUNSEL, WHICH COUNSEL AND OPINION (IN FORM AND SUBSTANCE)
SHALL BE REASONABLY SATISFACTORY TO THE COMPANY, TO THE EFFECT
THAT THE PROPOSED DISPOSITION OF SUCH SECURITIES MAY BE EFFECTED
WITHOUT REGISTRATION UNDER THE ACTS OR (B) SUCH OTHER EVIDENCE AS
MAY BE REASONABLY SATISFACTORY TO THE COMPANY THAT THE PROPOSED
DISPOSITION OF SUCH SECURITIES MAY BE EFFECTED WITHOUT
REGISTRATION UNDER THE ACTS."
Any certificate issued at any time in exchange or substitution for any
certificate bearing such legend (except a new certificate issued upon completion
of a public distribution under a registration statement of the securities
represented thereby) shall also bear such legend unless in the opinion of
counsel satisfactory to the Company, the securities represented thereby need no
longer be subject to the restrictions contained herein. The provisions of this
Section 14 shall be binding upon all subsequent holders of certificates bearing
the above legend, and shall also be applicable to all subsequent holders of any
Warrants.
15. REGISTRATION RIGHTS.
(a) DEMAND REGISTRATION RIGHTS. The Company covenants and agrees
with the Lenders and any subsequent holders of the Warrants and/or
Warrant Shares that:
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(i) Within sixty (60) days after receipt of a written
request from Warrant Holders, the Company shall file a
registration statement (and use its best efforts to cause such
registration statement to become effective under the Securities
Act) with respect to the offering and sale or other disposition of
such of the Warrants and/or Warrant Shares (including any
securities received by the Holders pursuant to Section 11 hereof)
(all such securities, the "Registrable Securities") as the Holders
of such Registrable Securities shall elect provided that such
amount shall constitute (at the date of such request) at least 50%
of the Registrable Securities and, provided further, that, with
respect to any particular securities which are issued and
outstanding, such securities shall cease to be Registrable
Securities upon the earliest to occur of (A) the expiration of the
Registration Period (as defined below), (B) the time at which a
registration statement with respect to the sale of such securities
shall have become effective under the Securities Act and such
securities shall have been disposed of in accordance with the plan
of distribution set forth in such registration statement, (C) the
time at which such securities shall have been disposed of by the
holder thereof in accordance with Rule 144, (D) the time at which
the Company has caused to be delivered to the holder of and each
transfer agent for such holder's Registrable Securities an opinion
of counsel from a law firm reasonably acceptable to such holder to
the effect that such holder may dispose of such securities without
registration in reliance on Rule 144(k), or (E) the time at which
such securities shall have been otherwise transferred, and the
transferee has received certificates evidencing such securities
not bearing a legend restricting further transfer. The Company
shall use its best efforts to continuously maintain the
effectiveness of such registration statement for a period (the
"Registration Period") ending on the earlier of (x) 90 days after
the effective date of the registration statement or (y) the
consummation of the distribution by the holders of the Registrable
Securities covered by such registration statement (the
"Termination Date"); provided, however, that if at the Termination
Date, the securities are covered by a registration statement which
also covers other securities and which is required to remain in
effect beyond the Termination Date, the Company shall maintain in
effect such registration statement as it relates to the
Registrable Securities for so long as such registration statement
(or any subsequent registration statement) remains or is required
to remain in effect for any of such other securities.
Notwithstanding anything to the contrary contained in this
Agreement, (i) with respect to requests for registration on Form
S-3 (or any successor or similar short form registration statement
("Short-Form Registration")), the Company shall not be required to
comply with more than one request for a Short-Form Registration in
any 90-day period, and shall not be required to comply with any
such request if the Company is not then entitled to use Short-Form
Registration, (ii) except with respect to requests for
registration using Short-Form Registration, the Company shall not
be required to comply with more than two requests for registration
pursuant to this Section 15(a) and (iii) the Company shall not be
required to comply with any request for registration pursuant to
this Section 15(a) unless such request relates to Registrable
Securities with an anticipated aggregate price to the public of at
least $1,000,000. All expenses of such registration shall be borne
by the Company, except that brokers' commissions and underwriting
discounts, commissions, fees and expenses attributable to the
Registrable Securities and fees and distributions of counsel (if
any) to the holders of such Registrable Securities will be borne
by such holders requesting that such securities be registered.
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(ii) The Company may postpone the filing of any registration
statement otherwise required to be prepared and filed by it
pursuant to this Section 15(a) or suspend the effectiveness of any
such registration statement for a reasonable period of time (not
to exceed 90 days) if, at the time:
(x) the Board of Directors of the Company shall
determine in good faith that such offering will interfere
materially with, or would require the disclosure of (which
disclosure the Board of Directors has determined to not be
in the best interests of the Company), a pending or
contemplated financing, merger, sale of assets,
recapitalization, acquisition or other similar corporate
action of the Company and the Company shall have furnished
to the holders seeking such registration a certificate
signed by the President of the Company to that effect,
accompanied by a certified copy of the relevant board
resolutions; or
(y) the Board of Directors of the Company shall
determine in good faith that the disclosures required in
connection with such registration could reasonably be
expected to have a Materially Adverse Effect and the Company
shall have furnished to the holders seeking such
registration a certificate signed by the President of the
Company to that effect, accompanied by a certified copy of
the relevant board resolutions.
In addition, the Company may postpone the filing of, or suspend
the use of, any such registration statement during the period
starting with the date 30 days prior to the Company's good faith
estimate of the date of filing of, and ending on a date 90 days
after the effective date of, a piggyback registration under
Section 15(b), provided that the Company is actively employing in
good faith its best efforts to cause such piggyback registration
to become effective. Any postponement or suspension described in
this Section 15(a)(ii) being referred to herein as a "Permitted
Postponement or Suspension".
(iii) If a registration requested pursuant to this Section
15(a) is to involve an underwritten public offering in which the
obligation of the underwriters is to take all of the securities to
be sold if any are to be taken, the Company and any other holders
of securities of the Company may include securities in such
registration only if the managing underwriter of such public
offering concludes that such inclusion will not adversely affect
the successful marketing or the price of the Registrable
Securities to be included in such public offering.
(iv) No holder of Registrable Securities may demand
registration of any Registrable Securities at any time within six
(6) months of the effective date of a registration for sale of
Common Stock in which such holder was entitled to join and sell
any of its Registrable Securities pursuant to Section 15(b).
-20-
24
(v) If the holders of Registrable Securities intend to
distribute the Registrable Securities covered by their request by
means of an underwriting, they shall so advise the Company as a
part of their request made pursuant to this Section 15(a). A
holder may elect to include in such underwriting all or a part of
the Registrable Securities it holds. The Company shall (together
with holders proposing to distribute their Registrable Securities
through such underwriting) enter into an underwriting agreement in
customary form with a representative of the underwriter or
underwriters selected for such underwriting by a majority in
interest of the holders of Registrable Securities participating in
such underwriting.
(b) PIGGY-BACK REGISTRATION RIGHTS. (i) The Company covenants and
agrees with the Lenders and any subsequent holders of Registrable
Securities that, in the event the Company proposes to file a registration
statement under the Securities Act with respect to the offering of Common
Stock in an underwritten offering (other than in connection with an
exchange offer or a registration statement on Form S-4 or S-8 or other
similar registration statements not available to register securities so
requested to be included), the Company shall in each case give written
notice of such proposed filing to the holders of Registrable Securities
in each case at least 30 days before the initial filing of such
registration statement, and such notice shall offer to such holders the
opportunity (subject to Section 15(b)(ii)) to include in such
registration statement such number of Registrable Securities as they may
request. Holders desiring inclusion of Registrable Securities in such
registration statement shall so inform the Company by written notice,
given within 20 days of the giving of such notice by the Company in
accordance with the provisions of Section 20 hereof. The Company shall
use commercially reasonable efforts to include, or cause the managing
underwriter of a proposed offering to include, the Registrable Securities
requested to be included in the proposed offering on the same terms and
conditions as applicable to any similar securities of the Company, if
any, included therein; provided, however, that the Company may, in its
sole discretion, determine not to file such registration statement or
withdraw such registration statement (if filed) and abandon any proposed
offering by giving notice of such intention to each participating holder
of Registrable Securities, in which event the Company shall be relieved
of its obligation to register any Registrable Securities pursuant to such
registration. The right of any holder of Registrable Securities to
participate in any piggyback registration shall be conditioned on the
inclusion in the underwriting of those of such holder's Registrable
Securities to be included in the underwriting. The Company shall
(together with all participating holders of Registrable Securities) enter
into an underwriting agreement in customary form with the representative
of the underwriters. The Company shall continuously maintain in effect
any registration statement with respect to which the Registrable
Securities have been requested to be included (and so included) for a
period ending on the earlier of (x) 90 days after the effectiveness of
such registration statement or (y) the consummation of the distribution
by the holders of the Registrable Securities ("Piggy-back Termination
Date"); provided, however, that if at the Piggy-back Termination Date the
Registrable Securities are covered by a registration statement which is,
or is required to remain, in effect beyond the Piggy-back Termination
Date, the Company shall maintain in effect the registration statement as
it relates to the Registrable Securities for so long as such registration
statement remains or is required to remain in effect for any of such
other securities. All expenses of such registration shall be borne by the
Company, except that brokers' commissions and underwriting discounts,
commissions, fees and expenses attributable to the Registrable Securities
and fees and distributions of counsel (if any) to the holders requesting
that the Registrable Securities be offered will be borne by such holders
requesting that such securities be offered.
-21-
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(ii) Notwithstanding any other provision of this Section
15(b) to the contrary, if the managing underwriters in such piggyback
registration advises the Company in writing that marketing factors
require a limitation on the number of shares to be underwritten, the
underwriters may (subject to the limitations set forth below) limit the
number of Registrable Securities to be included in the registration and
underwriting. The Company shall so advise the holders of all securities
requesting registration and the Company will include in such registration
such amount of securities which the Company is so advised can be sold in
(or during the time of) such offering as follows: first, all securities
proposed by the Company to be sold for its own account; second, such
securities requested to be included in such registration by the persons
or entities on whose behalf such registration was originally proposed pro
rata on the basis of the amount of such securities so proposed to be sold
and so requested to be included by such parties; third, such Registrable
Securities requested to be included in such registration by all holders
of Registrable Securities pro rata on the basis of the amount of such
securities so proposed to be sold and so requested to be included by such
holders; and fourth, all other securities of the Company requested to be
included in such registration pro rata on the basis of the amount of such
securities so proposed to be sold and so requested to be included.
(c) OTHER MATTERS. In connection with the registration of
Registrable Securities in accordance with paragraph (a) or (b) above, the
Company agrees to:
(i) use its best efforts to register or qualify the
Registrable Securities for offer or sale under State securities or
Blue Sky laws of such jurisdictions in which the holders of such
Registrable Securities shall reasonably designate; provided, that
in no event shall the Company be obligated to qualify to do
business in any jurisdiction where it is not now so qualified or
to take any action which would subject it to general service of
process or taxation in any jurisdiction where it is not now so
subject, and use its best efforts to do any and all other acts and
things which may be necessary or advisable to enable the holders
of Registrable Securities to consummate the sale, transfer or
other disposition of such securities in any jurisdiction;
(ii) enter into indemnity and contribution agreements, each
in customary form, with each underwriter, if any, and each holder
of Registrable Securities included in such registration statement;
and, if requested, enter into an underwriting agreement containing
customary representations, warranties, covenants,
indemnifications, allocation of expenses, and customary closing
conditions including, but not limited to, opinions of counsel and
accountants' comfort letters with any underwriter who participates
in the offering of Registrable Securities;
(iii) pay all reasonable expenses in connection with the
registration of the Registrable Securities under the Securities
Act and compliance with the provisions of clause (i) above, except
to the extent otherwise provided in Sections 15(a) and 15(b); and
-22-
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(iv) list the Registrable Securities on each national
securities exchange on which the Common Stock is then listed.
In connection with the registration of Registrable Securities in
accordance with paragraph (b) above, the holders of Registrable
Securities agree to enter into an underwriting agreement containing
customary representations, warranties, covenants, indemnifications,
allocation of expenses (not otherwise inconsistent with this Warrant
Agreement), and customary closing conditions, with any underwriter who
participates in the offering of Registrable Securities.
(d) RESTRICTIONS ON PUBLIC SALE BY THE COMPANY. To the extent not
inconsistent with applicable law, the Company agrees not to effect any
public sale or distribution of any securities similar to the Registrable
Securities or any securities convertible into or exchangeable or
exercisable for such securities (or any option or other right for such
securities) during the 7-day period prior to, and during the 60-day
period beginning on the effective date of any registration statement
under which the Registrable Securities are registered in accordance with
Section 15(a) (other than as part of such registration), except (i) sales
or distributions exempt from the registration requirements of the
Securities Act, (ii) a continuous offering pursuant to a shelf
registration statement that becomes effective prior to the aforementioned
period or (iii) in connection with an exchange offer or a registration
statement on Form S-4 or S-8 and for any securities that may be issued to
the Holders pursuant Section 11 hereof.
(e) RULE 144. With a view to making available to Holders the
benefits of certain rules of the Securities and Exchange Commission that
may permit the sale of Registrable Securities to the public without
registration, the Company hereby covenants and agrees to use its best
efforts to: (i) file in a timely manner all reports and other documents
required to be filed by it under the Securities Act and the Exchange Act
and the rules and regulations adopted by the Commission thereunder,
necessary to satisfy the current public information requirement of Rule
144(c) under the Securities Act, and the Company will take such further
action to the extent required from time to time to enable holders to sell
Registrable Securities without registration under the Securities Act
pursuant to (a) Rule 144 under the Securities Act, as such Rule may be
amended from time to time, or (b) any successor rule or regulation
hereafter adopted by the Securities and Exchange Commission and (ii)
promptly furnish each holder of Registrable Securities a copy of all such
reports and documents. Upon the request of a holder of Registrable
Securities, the Company will deliver to such holder of Registrable
Securities a written statement as to whether it has complied with such
requirements.
(f) OTHER REGISTRATION RIGHTS. The Company hereby agrees that it
shall not after the date hereof, prior to termination of this Agreement,
issue any additional registration rights with respect to shares of its
Common Stock, warrants to purchase its Common Stock or securities
convertible into its Common Stock, which limits or restricts in any
manner the performance of the Company's obligations under this Agreement.
(g) Each holder of Registrable Securities shall promptly furnish
to the Company such information regarding such holder, the Registrable
Securities held by such holder and the intended plan of distribution of
such Registrable Securities as the Company may from time to time
-23-
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reasonably request in writing in connection with any registration, and
the provision of such information shall be a condition precedent to the
Company's obligations to include such holder's Registrable Securities in
such registration. Each holder of Registrable Securities agrees that,
upon receipt of a notice (a "Suspension Notice") from the Company of the
happening of any Suspension Event (as defined below) or any Permitted
Postponement or Suspension, such Holder will not dispose of any
Registrable Securities pursuant to such registration statement during the
period (the "Suspension Period") commencing on receipt by such holder of
such Suspension Notice from the Company and continuing thereafter until
(i) in the case of a Suspension Event, receipt by such holder of a
Curative Prospectus (as defined below), or (ii) in the case of a
Permitted Postponement or Suspension, until the earlier to occur of (A)
the receipt of written notice from the Company that such Permitted
Postponement or Suspension has terminated or (B) the expiration of 90
days from the receipt of such Suspension Notice from the Company;
provided, however, that the Registration Period applicable to the
registration statement covering any such Registrable Securities shall
automatically be extended for a period equal to the Suspension Period.
The Company shall take such actions as are necessary to end any
Suspension Period as promptly as practicable.
(h) For purposes of this Warrant Agreement, the term "Suspension
Event" shall mean, with respect to any registration, at any time when a
prospectus relating thereto is required to be delivered under the
Securities Act, the discovery by the Company that, or the happening of
any event known to the Company as a result of which, the prospectus
included in the registration statement pertaining to such registration,
as then in effect, includes an untrue statement of a material fact or
omits to state any material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances under which they were made, and (ii) the term "Curative
Prospectus" shall mean a supplement to or an amendment of such prospectus
as may be necessary so that, as thereafter delivered to the purchasers of
such 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 not misleading in
light of the circumstances under which they were made.
16. NO RIGHTS AS STOCKHOLDERS; NOTICE TO WARRANT HOLDERS. Nothing
contained in this Warrant Agreement or in any of the Warrants shall be construed
as conferring upon the Holders or their transferees the right to vote or to
receive dividends or to consent or to receive notice as stockholders in respect
of any meeting of stockholders for the election of directors of the Company or
any other matter, or any other rights whatsoever as stockholders of the Company
or, except as otherwise provided in this Warrant Agreement, to receive any
notice of any proceedings of the Company. If, however, at any time prior to the
expiration of the Warrants and prior to their exercise, any of the following
events shall occur or be proposed:
(a) the Company shall make any declaration of a dividend upon the
shares of Common Stock which is payable in any securities or make any
distribution (other than a cash dividend) to the holders of the shares of
Common Stock;
(b) the Company shall make any offer to the holders of the shares
of Common Stock to purchase or acquire any additional shares of Common
Stock or securities convertible into or exchangeable for shares of Common
Stock or any right to subscribe to or purchase any thereof; or
-24-
28
(c) a dissolution, liquidation or winding up of the Company (other
than in connection with a consolidation, merger, sale, transfer or lease
of all or substantially all of its property, assets, and business as an
entirety),
then, in any one or more of said events, the Company shall give notice in
writing of such event to the Holders as provided in Section 20 hereof, such
giving of notice to be completed at least 30 days prior to the date fixed as a
record date or the date of closing the transfer books for the determination of
the stockholders entitled to such dividend, distribution, or subscription
rights, or for the determination of stockholders entitled to vote on such
proposed dissolution, liquidation or winding up. Such notice shall specify such
record date or the date of closing the transfer books, as the case may be.
17. EXPENSES. The Company agrees to reimburse Chase upon demand for its
reasonable out-of-pocket costs and expenses incurred in connection with the
preparation, review, negotiation, execution and delivery of this Warrant
Agreement and all other related documents.
18. RIGHT TO INSPECTION. The Company will permit the Holders upon prior
notice to the Company, during normal business hours, to inspect those
properties, books and records reasonably related to their interests as Holders,
and will promptly respond to and discuss with such Holders inquiries regarding
the management, business and affairs of the Company; provided, however, that
these inspection rights exist only for Holders of (singularly or collectively)
at least 33% of the then outstanding Warrants and, provided further, that such
inspection rights shall be (a) subject to adherence by the Holders and their
representatives to such restrictions, requirements and conditions that are
imposed by the Company on visitors to its premises generally and (b) conducted
in such a manner so as to not cause any unreasonable disruption of or to the
personnel and operations of the Company.
19. RIGHT TO INFORMATION. The Company will provide to all Holders, on a
timely basis, copies of all documents and reports, filed with the Securities and
Exchange Commission.
20. NOTICES. Any notice, request, demand or report (each, a
"Communication") required or permitted to be given or made by this Warrant
Agreement shall be in writing. Any Communication authorized pursuant to this
Warrant Agreement to be given or made by the holder of any Warrant or Warrant
Shares to or on the Company shall be sufficiently given or made if sent by
registered mail, return receipt requested, postage prepaid, or by facsimile or
electronic mail, addressed or sent as follows:
Sterling Chemicals, Inc.
0000 Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attn: General Counsel
Fax: (000) 000-0000
E-Mail: xxxxxxx@xxxxxxxxxxxxxxxxx.xxx
-25-
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Any Communication authorized by this Warrant Agreement to be given or made to or
on the Holder of any Warrant shall be sufficiently given or made (except as
otherwise provided in this Warrant Agreement) if sent by registered mail, return
receipt requested, postage prepaid, or by facsimile or electronic mail, to such
Holder at the address or number of such Holder as shown on the Warrant Register.
21. GOVERNING LAW. THIS WARRANT AGREEMENT, THE WARRANTS AND ALL RELATED
DOCUMENTS SHALL BE DEEMED TO BE CONTRACTS MADE UNDER AND SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF TEXAS, WITHOUT GIVING
EFFECT TO PRINCIPLES OF CONFLICTS OF LAW, AND, WITH RESPECT TO USURY, THE LAWS
OF ANY OTHER JURISDICTION WHOSE LAWS MAY BE APPLICABLE PURSUANT TO THE
PROVISIONS OF TITLE 12, XXXXXXX 00 XX XXX XXXXXX XXXXXX CODE.
22. SUPPLEMENTS AND AMENDMENTS. (a) The Company and the Holders of at
least a majority of the outstanding Warrants may, without the consent or
concurrence of the other Holders, enter into one or more supplemental agreements
or amendments for the purpose of (i) evidencing the rights of the Holders upon
consolidation, merger, or sale pursuant to Section 25, (ii) making any changes
or corrections in this Warrant Agreement that are required to cure any
ambiguity, to correct or supplement any provision contained herein that may be
defective or inconsistent with any other provision herein or any clerical
omission or mistake or manifest error herein contained, (iii) making such other
provisions in regard to matters or questions arising under this Warrant
Agreement as shall not adversely affect the interest of the Holders in any
material respect or be inconsistent with this Warrant Agreement or any
supplemental agreement or amendment or (iv) adding further covenants and
agreements of the Company in this Warrant Agreement or surrendering any rights
or power reserved to or conferred upon the Company in this Agreement.
(b) The Company and the Holders of at least a majority in number of the
Warrants at the time outstanding may at any time and from time to time by
supplemental agreement or amendment add any provisions to or change in any
manner or eliminate any of the provisions of this Warrant Agreement or of any
supplemental agreement or modify in any manner the rights and obligations of the
Holders and the Company; provided, however, that no such supplemental agreement
or amendment shall, without the consent of the Holder of each outstanding
Warrant affected thereby, (i) alter the provisions of this Warrant Agreement so
as to adversely affect in any material respect the terms upon which Warrants are
exercisable, (ii) decrease the number of Warrant Shares (other than pursuant to
adjustments made in accordance with Section 11 hereof) or (iii) reduce the
number of Warrants outstanding the consent of whose holders is required for any
such supplemental agreement or amendment.
23. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. All
representations and warranties of the Company and the Lenders and all covenants
and agreements made herein shall survive the execution and delivery of this
Warrant Agreement and the Warrants and shall remain in force and effect.
24. SUCCESSORS. This Warrant Agreement shall be binding upon and inure to
the benefit of (i) the Company and its successors and assigns, (ii) the Holders
from time to time of the Warrants (including their successors and assigns) and
(iii) the holders from time to time of the Registrable Securities.
-26-
30
25. MERGER OR CONSOLIDATION OF THE COMPANY. So long as this Warrant
Agreement remains in effect, the Company will not merge or consolidate with or
into, or sell, transfer or lease all or substantially all of its property to,
any other corporation unless the successor or purchasing corporation, as the
case may be (if not the Company), shall expressly assume, by supplemental
agreement executed and delivered to the Warrant Holders, the due and punctual
performance and observance of each and every covenant and condition of this
Warrant Agreement to be performed and observed by the Company.
26. BENEFITS OF THIS WARRANT AGREEMENT. Nothing in this Warrant Agreement
shall be construed to give to any person or entity other than the Company and
the Holders, any legal or equitable right, remedy or claim under this Warrant
Agreement, but this Warrant Agreement shall be for the sole and exclusive
benefit of the Company and the Holders and the holders of Registrable
Securities.
27. CAPTIONS. The captions of the sections and subsections of this
Warrant Agreement have been inserted for convenience and shall have no
substantive effect.
28. COUNTERPARTS. This Warrant Agreement may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original; but
such counterparts together shall constitute but one and the same instrument.
29. TERMINATION. The rights and obligations under this Warrant Agreement
of each Holder shall terminate with respect to such Holder at such time as such
Holder ceases to hold any Registrable Securities. The rights and obligations of
the Company under this Warrant 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 Warrant Agreement, this Warrant Agreement shall
terminate and have no further effect with respect to such party; provided,
however, that 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 Warrant Agreement with respect to any party. Notwithstanding
anything to the contrary contained in this Warrant Agreement, this Warrant
Agreement shall terminate on such date as SCI no longer is or could at any time
thereafter be required to request or otherwise cause the Company to issue any
Warrants pursuant to Section 5.01(k) of the Facility if, on such date, no
Warrants have theretofore been issued, or are required to be issued, pursuant to
this Warrant Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Warrant Agreement
to be duly executed on the day, month and year first above written.
STERLING CHEMICALS HOLDINGS, INC.
By:______________________________
Name:
Title:
(CORPORATE SEAL)
ATTEST:
________________________________
Name:
Title:
-27-
31
EXHIBIT "A"
WARRANT CERTIFICATE
THE WARRANTS REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1993, AS AMENDED, OR ANY STATE SECURITIES LAWS AND MAY NOT BE
OFFERED OR SOLD EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT, OR
(ii) AN APPLICABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933,
AS AMENDED. ANY SALE PURSUANT TO CLAUSE (ii) OF THE PRECEDING SENTENCE MUST BE
ACCOMPANIED BY AN UNQUALIFIED WRITTEN OPINION OF COUNSEL REASONABLY SATISFACTORY
TO THE COMPANY TO THE EFFECT THAT SUCH EXEMPTION FROM REGISTRATION IS AVAILABLE
IN CONNECTION WITH SUCH SALE.
THE COMMON STOCK, PAR VALUE $0.01 PER SHARE, OF STERLING CHEMICALS HOLDINGS,
INC. (THE "COMMON STOCK") FOR WHICH THIS WARRANT IS EXERCISABLE MAY NOT BE
OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE, "SECURITIES ACT"), AND ANY APPLICABLE STATE
SECURITIES LAWS OR AN APPLICABLE EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS.
ACCORDINGLY, NO HOLDER SHALL BE ENTITLED TO EXERCISE SUCH HOLDER'S WARRANTS AT
ANY TIME UNLESS, AT THE TIME OF EXERCISE, (i) A REGISTRATION STATEMENT UNDER THE
SECURITIES ACT RELATING TO THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE
OF THIS WARRANT HAS BEEN FILED WITH, AND DECLARED EFFECTIVE BY, THE SECURITIES
AND EXCHANGE COMMISSION (THE "COMMISSION"), AND NO STOP ORDER SUSPENDING THE
EFFECTIVENESS OF SUCH REGISTRATION STATEMENT HAS BEEN ISSUED BY THE COMMISSION,
OR (ii) THE ISSUANCE OF SUCH SHARES IS PERMITTED PURSUANT TO AN EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ANY APPLICABLE STATE
SECURITIES LAWS. ANY OFFER OR SALE PURSUANT TO CLAUSE (ii) OF THE PRECEDING
SENTENCE MUST BE ACCOMPANIED BY AN UNQUALIFIED WRITTEN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY TO THE EFFECT THAT SUCH EXEMPTION FROM
REGISTRATION IS AVAILABLE IN CONNECTION WITH SUCH SALE.
THE TRANSFER OR EXCHANGE OF THE WARRANTS AND COMMON STOCK UNDERLYING SUCH
WARRANTS REPRESENTED BY THIS CERTIFICATE IS RESTRICTED IN ACCORDANCE WITH THE
WARRANT AGREEMENT REFERRED TO HEREIN.
32
No. ____ Warrants _______ Warrants
VOID AFTER 5:00 P.M. HOUSTON TIME
ON JANUARY 1, 2007
STERLING CHEMICALS HOLDINGS, INC.
WARRANT CERTIFICATE
THIS CERTIFIES THAT for value received ___________________________, the
registered holder hereof or registered assigns (the "Warrant Holder"), is the
owner of the number of Warrants set forth above, each of which entitles the
owner thereof to purchase at any time until 5:00 P.M., Houston time, on January
1, 2007, one fully paid and nonassessable share of the common stock, par value
$0.01 per share (the "Common Stock"), of Sterling Chemicals Holdings, Inc., a
Delaware corporation (the "Company"), (subject to adjustment as described in the
Warrant Agreement referred to below) at the purchase price of $0.01 per share,
(the "Exercise Price"). The Warrant Holder may pay the Exercise Price in cash,
or by certified or official bank check, or make a net exercise for Net Warrant
Shares as described in the Warrant Agreement.
This Warrant Certificate is subject to, and entitled to the benefits of,
all of the terms, provisions and conditions of an agreement dated December 15,
1998 (the "Warrant Agreement") among the Company and Chase Bank of Texas,
National Association, Credit Suisse First Boston and certain other financial
institutions, which Warrant Agreement is hereby incorporated herein by reference
and made a part hereof and to which Warrant Agreement reference is hereby made
for a full description of the rights, limitations of rights, obligations, duties
and immunities hereunder of the Company and the Warrant Holders. Copies of the
Warrant Agreement are on file at the principal office of the Company.
The registered holder hereof may be treated by the Company and all other
persons dealing with this Warrant Certificate as the absolute owner hereof for
any purpose and as the person entitled to exercise the rights represented
hereby, or to the transfer hereof on the books of the Company, any notice to the
contrary notwithstanding, and until such transfer on such books, the Company may
treat the registered holder hereof as the owner for all purposes.
This Warrant Certificate, with or without other Warrant Certificates,
upon surrender at the principal office of the Company prior to exercise, may be
exchanged for another Warrant Certificate or Warrant Certificates of like tenor
evidencing Warrants entitling the Warrant Holder to purchase a like aggregate
number of shares of Common Stock as the Warrants evidenced by the Warrant
Certificate or Warrant Certificates surrendered entitled to such Warrant Holder
to purchase. If this Warrant Certificate shall be exercised in part, the Warrant
Holder shall be entitled to receive upon surrender hereof, another Warrant
Certificate or Warrant Certificates for the number of whole Warrants not
exercised.
No fractional shares of Common Stock will be issued upon the exercise of
any Warrant or Warrants evidenced hereby, but in lieu thereof a cash payment
will be made, as provided in the Warrant Agreement.
33
Neither the Warrants nor this Warrant Certificate entitles any Warrant
Holder hereof to any of the rights of a stockholder of the Company.
THIS WARRANT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF TEXAS,
WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW, AND, WITH RESPECT TO
USURY, THE LAWS OF ANY OTHER JURISDICTION WHOSE LAWS MAY BE APPLICABLE PURSUANT
TO THE PROVISIONS OF TITLE 12, XXXXXXX 00 XX XXX XXXXXX XXXXXX CODE.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
executed by its duly authorized officers and its corporate seal to be printed
hereon.
STERLING CHEMICALS HOLDINGS, INC.
By:
Name:
Title:
ATTEST:
Name:__________________________________
Title:_________________________________
34
FORM OF REVERSE OF WARRANT CERTIFICATE
PURCHASE FORM
(to be executed only upon exercise of Warrants)
To:_____________________
The undersigned hereby irrevocably exercises of the Warrants
represented by the within Warrant Certificate for the purchase of (subject to
adjustment) one share of Common Stock, par value $0.01 per share, of STERLING
CHEMICALS HOLDINGS, INC., a Delaware corporation, and herewith makes payment of
$______________ (such payment being by wire transfer or by certified or official
bank or bank cashier's check payable to the order or at the direction of
Sterling Chemicals Holdings, Inc.), all at the exercise price and on the terms
and conditions specified in the within Warrant Certificate and the Warrant
Agreement therein referred to, and hereby surrenders this Warrant Certificate
and all right, title and interest therein to and directs that the Common Stock
deliverable upon the exercise of such Warrants be registered or placed in the
name and at the address specified below and delivered thereto.
Dated:__________________ ____________________________________
(Signature of Owner)
____________________________________
(Xxxxxx Xxxxxxx)
____________________________________
(City) (State) (Zip Code)
Signature Guaranteed By(1)
____________________________________
________________________
(1) The Holder's signature must be guaranteed by a member firm of a registered
national securities exchange or of the National Association of Securities
Dealers, Inc., a commercial bank or trust company having an office or
correspondent in the United States or an "eligible guarantor institution" as
defined by Rule 17Ad-15 under the Exchange Act.
35
Securities and/or check to be issued to:_________________________________
Please insert social security or identifying number:_____________________
Name:_________________________________________________________
Street Address:_______________________________________________
City, State and Zip Code:_____________________________________
36
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned registered holder of the
within Warrant Certificate hereby sells, assigns and transfers unto the
Assignee(s) named below (including the undersigned with respect to any Warrants
constituting a part of the Warrants evidenced by the within Warrant Certificate
not being assigned hereby) all of the right of the undersigned under the within
Warrant Certificate, with respect to the number of Warrants set forth below:
Name(s) of Assignee(s): __________________________
Address: _________________________________________
No. of Warrants: _________________________________
Please insert social security or other identifying number of assignee(s): ______
and does hereby irrevocably constitute and appoint _____________________________
the undersigned's attorney to make such transfer on the books of _______________
maintained for such purposes, with full power of substitution in the premises.
Dated:_______________________ ____________________________________
(Signature of Owner)
____________________________________
(Xxxxxx Xxxxxxx)
____________________________________
(City) (State) (Zip Code)
Signature Guaranteed By(2)
____________________________________
________________________
(2) The Holder's signature must be guaranteed by a member firm of a registered
national securities exchange or of the National Association of Securities
Dealers, Inc., a commercial bank or trust company having an office or
correspondent in the United States or an "eligible guarantor institution" as
defined by Rule 17Ad-15 under the Exchange Act.
