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EXHIBIT 10.3
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "AGREEMENT") is made and
entered into as of the 20th day of January, 1998, by and between Metal
Management, Inc., a Delaware corporation (the "COMPANY") and Aerospace Metals,
Inc. a Connecticut corporation ("STOCKHOLDER").
RECITALS:
A. Pursuant to the Asset Purchase Agreement dated as of
January 20, 1998, by and among the Company, Stockholder, Aerospace Parts
Security, Inc., a Connecticut corporation, The Xxxxxxx Titanium Corporation, a
Connecticut corporation, AMI Acquisition Co., a Delaware corporation, and
Xxxxxxx Xxxxxxx (the "PURCHASE AGREEMENT"), Stockholder received from the
Company shares of the Company's common stock, par value $.01 per share (the
"COMMON STOCK"). All terms which are capitalized and used without definition
herein shall have the meanings ascribed to such terms in the Purchase
Agreement.
B. As a condition to Stockholder agreeing to enter into the
Purchase Agreement, Stockholder is being granted registration rights with
respect to its shares of Common Stock.
NOW THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the parties hereto agree as follows:
1. (a) Piggyback Registration. If, at any time during the
120 day period commencing on the Closing Date, the Company shall file a
registration statement (other than a registration statement on Form X-0, Xxxx
X-0, or any successor form) with the Securities and Exchange Commission (the
"COMMISSION") while any Registrable Securities (as hereinafter defined) are
outstanding, the Company shall give Stockholder, to the extent it then holds
any Registrable Securities (the "ELIGIBLE HOLDER") at least 30 days' prior
written notice of the filing of such registration statement. Unless the
Eligible Holder notifies the Company in writing within 20 days after receipt of
any such notice to the contrary, the Company shall, at the Company's sole
expense (other than the fees and disbursements of counsel for the Eligible
Holder, and the underwriting discounts, if any, payable in respect of the
Registrable Securities sold by any Eligible Holder), register all of the
Registrable Securities of all Eligible Holder, concurrently with the
registration of such other securities, all to the extent requisite to permit
the public offering and sale of the Registrable Securities through the
facilities of all appropriate securities exchanges, if any, on which the
Company's Common Stock is being sold or on the over-the-counter market, and
will use its best efforts through its officers, directors, auditors, and
counsel to cause such registration statement to become effective as promptly as
practicable. Notwithstanding the foregoing, if the managing underwriter of any
such offering shall advise the Company in writing that, in its opinion, the
distribution of all or a portion of the Registrable Securities to be included
in the registration concurrently with the securities being registered by the
Company would materially adversely affect the distribution of such securities
by the Company for its own account, then the Company shall delay the offering
and sale of such Registrable Securities (or the portions thereof so designated
by such managing underwriter) for such period, not to exceed 120 days (the
"DELAY PERIOD"), as the managing underwriter shall request. As used herein,
"REGISTRABLE SECURITIES" shall mean the shares
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of Common Stock owned by Stockholder on the date hereof as set forth on
Schedule 1(a), which, with respect to Stockholder, have not been previously
sold pursuant to a registration statement or Rule 144 promulgated under the
Securities Act of 1933, as amended (the "SECURITIES ACT").
(b) Mandatory Registration. On or before the date which is 20
days after the Closing Date (the "FILING DEADLINE"), subject to extension as
described in Section 1(i) below, the Company shall prepare and file at the
Company's sole cost and expense (other than the fees and disbursements of
counsel for the Eligible Holder, and the underwriting discounts, if any,
payable in respect of the Registrable Securities sold by the Eligible Holder)
one registration statement on Form S-3 covering the resale of the Registrable
Securities. The Company will use its best efforts through its officers,
directors, auditors, and counsel to cause such registration statement to become
effective as promptly as practicable following the filing thereof, but in no
event later than 90 days after the Closing Date.
(c) In the event of a registration pursuant to the provisions of
this Section 1, the Company shall use its best efforts to cause the Registrable
Securities so registered to be registered or qualified for sale under the
securities or blue sky laws of such jurisdictions as the Eligible Holder or
such holder may reasonably request; provided, however, that the Company shall
not be required to qualify to do business in any state by reason of this
Section 1(c) in which it is not otherwise required to qualify to do business.
(d) The Company shall keep effective any registration or
qualification contemplated by this Section 1 and shall from time to time amend
or supplement each applicable registration statement, preliminary prospectus,
final prospectus, application, document and communication for such period of
time as shall be required to permit the Eligible Holder to complete the offer
and sale of the Registrable Securities covered thereby. The Company shall in
no event be required to keep any such registration or qualification in effect
for a period in excess of nine (9) months from the date on which the Eligible
Holder are first free to sell such Registrable Securities; provided, however,
that, if the Company is required to keep any such registration or qualification
in effect with respect to securities other than the Registrable Securities
beyond such period, the Company shall keep such registration or qualification
in effect as it relates to the Registrable Securities for so long as such
registration or qualification remains or is required to remain in effect in
respect of such other securities.
(e) In the event of a registration pursuant to the provisions of
this Section 1, the Company shall furnish to each Eligible Holder such number
of copies of the registration statement and of each amendment and supplement
thereto (in each case, including all exhibits), such reasonable number of
copies of each prospectus contained in such registration statement and each
supplement or amendment thereto (including each preliminary prospectus), all of
which shall conform to the requirements of the Securities Act and the rules and
regulations thereunder, and such other documents, as any Eligible Holder may
reasonably request to facilitate the disposition of the Registrable Securities
included in such registration.
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(f) In the event of a registration pursuant to the provisions of
this Section 1, the Company shall furnish each Eligible Holder of any
Registrable Securities so registered with an opinion of its counsel (reasonably
acceptable to the Eligible Holder) to the effect that (i) the registration
statement has become effective under the Securities Act and no order suspending
the effectiveness of the registration statement, preventing or suspending the
use of the registration statement, any preliminary prospectus, any final
prospectus, or any amendment or supplement thereto has been issued, nor has the
Commission or any securities or blue sky authority of any jurisdiction
instituted or threatened to institute any proceedings with respect to such an
order, (ii) the registration statement and each prospectus forming a part
thereof (including each preliminary prospectus), and any amendment or
supplement thereto, comply as to form with the Securities Act and the rules and
regulations thereunder, and (iii) such counsel has no knowledge of any material
misstatement or omission in such registration statement or any prospectus, as
amended or supplemented. Such opinion shall also state the jurisdictions in
which the Registrable Securities have been registered or qualified for sale
pursuant to the provisions of Section 1(c).
(g) The Company agrees that until all the Registrable Securities
have been sold under a registration statement or pursuant to Rule 144 under the
Securities Act, it shall use its best efforts to keep current in filing all
reports, statements and other materials required to be filed with the
Commission to permit holders of the Registrable Securities to sell such
securities under Rule 144.
(h) The Company shall notify the Eligible Holder of the
Registrable Securities promptly when such registration statement has become
effective or a supplement to any prospectus forming a part of such registration
statement has been filed. The Company shall notify the Eligible Holder of the
Registrable Securities promptly of the happening of any event as a result of
which the prospectus included in such registration statement, as then in
effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then existing, and use its
best efforts to promptly update and/or correct such prospectus; provided,
however, that the Company shall not be required to update and/or correct such
prospectus if, and so long as, the Board of Directors of the Company determines
in good faith that to do so at such time would be detrimental to the business
or prospects of the Company.
(i) The Company shall notify the Eligible Holder of the
Registrable Securities promptly (i) when such registration statement has become
effective or a supplement to any prospectus forming a part of such registration
statement has been filed; and (i) of the issuance by the Commission of any stop
or other order suspending the effectiveness of the registration statement. If
at any time the Company shall receive any such order, the Company shall use its
best efforts to obtain the withdrawal or lifting of such order at the earliest
possible time; provided, however, that the Company shall not be required to
obtain the withdrawal or lifting of such order if, and so long as, the Board of
Directors of the Company determines in good faith that to do so at such time
would be detrimental to the business or prospects of the Company.
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(j) The Filing Deadline shall be extended by the number of days
during (i) any period in which the Company has been advised by its outside
counsel that the registration statement will not be accepted for filing by the
Commission as a result of the Company then having on file a registration
statement which has not yet gone effective or a proxy statement that is then
being reviewed by the Commission, and (ii) any period (a "STANDSTILL PERIOD")
in which the Board of Directors of the Company determines in good faith (A)
that an amendment or supplement to the registration statement or prospectus
contained therein is necessary in order to correct a material misstatement made
therein or to include information the absence of which would render the
registration statement or such prospectus materially misleading and (B) that
the disclosure of such information at such time would be detrimental to the
business or prospects of the Company.
(k) If requested by the underwriter for any underwritten offering
of Registrable Securities on behalf of an Eligible Holder of Registrable
Securities pursuant to a registration requested under Section 1(b), the Company
and such Eligible Holder of Registrable Securities will enter into an
underwriting agreement with such underwriter for such offering, which shall be
reasonably satisfactory in substance and form to the Company and the Company's
counsel, such Eligible Holder of Registrable Securities and the underwriter,
and such agreement shall contain such representations and warranties by the
Company and such Eligible Holder of Registrable Securities and such other terms
and provisions as are customarily contained in an underwriting agreement with
respect to secondary distributions solely by selling stockholders, including,
without limitation, indemnities substantially to the effect and to the extent
provided in Section 2 hereof.
(l) In connection with the registration of Registrable Securities
pursuant to a registration statement, each Eligible Holder shall: (i) furnish
to the Company such information regarding itself and the intended method of
disposition of Registrable Securities as the Company shall reasonably request
in order to effect the registration thereof; and (ii) upon receipt of any
notice from the Company of the initiation of a Standstill Period, immediately
discontinue disposition of Registrable Securities pursuant to the registration
statement until receiving written notice from the Company that the Standstill
Period has terminated.
(m) The Company shall use its best efforts to have the Registrable
Securities included for quotation on the Nasdaq National Market.
2. Indemnification. (a) Subject to the conditions set forth
below, the Company agrees to indemnify and hold harmless each Eligible Holder,
its officers, directors, partners, employees, agents, and counsel, and each
person, if any, who controls any such person within the meaning of Section 15
of the Securities Act or Section 20(a) of the Securities Exchange Act of 1934,
as amended (the "EXCHANGE ACT"), from and against any and all loss, liability,
charge, claim, damage, and expense whatsoever (which shall include, for all
purposes of this Section 2, but not be limited to, reasonable attorneys' fees
and any and all reasonable expenses whatsoever incurred in investigating,
preparing, or defending against any litigation, commenced or threatened, or any
claim whatsoever, and any and all amounts paid in settlement of any claim or
litigation), as and when incurred, arising out of, based upon, or in connection
with (i) any untrue statement or alleged untrue statement of a material fact
contained (A) in any registration statement, preliminary prospectus, or
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final prospectus (as from time to time amended and supplemented), or any
amendment or supplement thereto, relating to the sale of any of the Registrable
Securities or (B) in any application or other document or communication (in
this Section 2 collectively called an "APPLICATION") executed by or on behalf
of the Company or based upon written information furnished by or on behalf of
the Company filed in any jurisdiction in order to register or qualify any of
the Registrable Securities under the securities or blue sky laws thereof or
filed with the Commission or any securities exchange; or any omission or
alleged omission to state a material fact required to be stated therein or
necessary to make the statements made therein not misleading, unless (x) such
statement or omission was made in reliance upon and in conformity with written
information furnished to the Company with respect to such Eligible Holder by or
on behalf of such person expressly for inclusion in any registration statement,
preliminary prospectus, or final prospectus, or any amendment or supplement
thereto, or in any application, as the case may be, or (y) such loss,
liability, charge, claim, damage or expense arises out of such Eligible
Holder's failure to comply with the terms and provisions of this Agreement, or
(ii) any breach of any representation, warranty, covenant, or agreement of the
Company contained in this Agreement. The foregoing agreement to indemnify
shall be in addition to any liability the Company may otherwise have, including
liabilities arising under this Agreement.
If any action is brought against any Eligible Holder or any of its
officers, directors, partners, employees, agents, or counsel, or any
controlling persons of such person (an "INDEMNIFIED PARTY") in respect of which
indemnity may be sought against the Company pursuant to the foregoing
paragraph, such indemnified party or parties shall promptly notify the Company
in writing of the institution of such action (but the failure so to notify
shall not relieve the Company from any liability other than pursuant to this
Section 2(a)) and the Company shall promptly assume the defense of such action,
including the employment of counsel (reasonably satisfactory to such
indemnified party or parties), provided that the indemnified party shall have
the right to employ its or their own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of such indemnified party or
parties unless the employment of such counsel shall have been authorized in
writing by the Company in connection with the defense of such action or the
Company shall not have promptly employed counsel reasonably satisfactory to
such indemnified party or parties, or such indemnified party or parties shall
have reasonably concluded that there may be one or more legal defenses
available to it or them or to other indemnified parties which are different
from or additional to those available to the Company, in any of which events
such fees and expenses shall be borne by the Company and the Company shall not
have the right to direct the defense of such action on behalf of the
indemnified party or parties. Anything in this Section 2 to the contrary
notwithstanding, the Company shall not be liable for any settlement of any such
claim or action effected without its written consent, which shall not be
unreasonably withheld. The Company shall not, without the prior written
consent of each indemnified party that is not released as described in this
sentence, settle or compromise any action, or permit a default or consent to
the entry of judgment in or otherwise seek to terminate any pending or
threatened action, in respect of which indemnity may be sought hereunder
(whether or not any indemnified party is a party thereto), unless such
settlement, compromise, consent, or termination includes an unconditional
release of each indemnified party from all liability in respect of such action.
The Company agrees promptly to notify Eligible Holder of the commencement of
any litigation or proceedings against the Company
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or any of it officers or directors in connection with the sale of any
Registrable Securities or any preliminary prospectus, prospectus, registration
statement, or amendment or supplement thereto, or any application relating to
any sale of any Registrable Securities.
(b) Each Eligible Holder agrees to indemnify and hold harmless the
Company, each director of the Company, each officer of the Company who shall
have signed any registration statement covering Registrable Securities held by
such Eligible Holder, each other person, if any, who controls the Company
within the meaning of Section 15 of the Securities Act or Section 20(a) of the
Exchange Act, and its or their respective counsel, to the same extent as the
foregoing indemnity from the Company to such Eligible Holder in Section 2(a),
but only with respect to statements or omissions, if any, made in any
registration statement, preliminary prospectus, or final prospectus (as from
time to time amended and supplemented), or any amendment or supplement thereto,
or in any application, in reliance upon and in conformity with written
information furnished to the Company with respect to such Eligible Holder by or
on behalf of such Eligible Holder, expressly for inclusion in any such
registration statement, preliminary prospectus, or final prospectus, or any
amendment or supplement thereto, or in any application, as the case may be. If
any action shall be brought against the Company or any other person so
indemnified based on any such registration statement, preliminary prospectus,
or final prospectus or any amendment or supplement thereto, or in any
application, and in respect of which indemnity may be sought against such
Eligible Holder pursuant to this Section 2(b), such Eligible Holder shall have
the rights and duties given to the Company, and the Company and each other
person so indemnified shall have the rights and duties given to the indemnified
parties, by the provisions of Section 2(a).
(c) To provide for just and equitable contribution, if (i) an
indemnified party makes a claim for indemnification pursuant to Section 2(a) or
2(b) (subject to the limitations thereof) but it is found in a final judicial
determination, not subject to further appeal, that such indemnification may not
be enforced in such case, even though this Agreement expressly provides for
indemnification in such cases, or (ii) any indemnified or indemnifying party
seeks contribution under the Securities Act, the Exchange Act or otherwise,
then the Company (including for this purpose any contribution made by or on
behalf of any director of the Company, any officer of the Company who signed
any such registration statement, any controlling person of the Company, and its
or their respective counsel), as one entity, and the Eligible Holder of the
Registrable Securities, included in such registration in the aggregate
(including for this purpose any contribution by or on behalf of an indemnified
party), as a second entity, shall contribute to the losses, liabilities,
claims, damages, and expenses whatsoever to which any of them may be subject,
on the basis of relevant equitable considerations such as the relative fault of
the Company and such Eligible Holder in connection with the facts which
resulted in such losses, liabilities, claims, damages, and expenses. The
relative fault, in the case of an untrue statement, alleged untrue statement,
omission, or alleged omission shall be determined by, among other things,
whether such statement, alleged statement, omission, or alleged omission
relates to information supplied by the Company or by such Eligible Holder, and
the parties' relative intent, knowledge, access to information, and opportunity
to correct or prevent such statement, alleged statement, omission, or alleged
omission. The Company and Eligible Holder agree that it would be unjust and
inequitable if the respective obligations of the Company and the Eligible
Holder for contribution were determined by pro rata or per capita
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allocation of the aggregate losses, liabilities, claims, damages, and expenses
(even if each Eligible Holder and the other indemnified parties were treated as
one entity for such purpose) or by any other method of allocation that does not
reflect the equitable considerations referred to in this Section 2(c). In no
case shall any Eligible Holder be responsible for a portion of the contribution
obligation imposed on all Eligible Holder in excess of its pro rata share based
on the number of shares of Common Stock owned by him and included in such
registration as compared to the number of shares of Common Stock owned by all
Eligible Holder and included in such registration. No person guilty of a
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who is not
guilty of such fraudulent misrepresentation. For purposes of this Section
2(c), each person, if any, who controls any Eligible Holder within the meaning
of Section 15 of the Securities Act or Section 20(a) of the Exchange Act and
each officer, director, partner, employee, agent, and counsel of Eligible
Holder or control person shall have the same rights to contribution as such
Eligible Holder or control person and each person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act or Section 20(a)
of the Exchange Act, each officer of the Company who shall have signed any such
registration statement, each director of the Company, and its or their
respective counsel shall have the same rights to contribution as the Company,
subject in each case to the provisions of this Section 2(c). Anything in this
Section 2(c) to the contrary notwithstanding, no party shall be liable for
contribution with respect to the settlement of any claim or action effected
without its written consent. This Section 2(c) is intended to supersede any
right to contribution under the Securities Act, the Exchange Act or otherwise.
3. Miscellaneous.
(a) Remedies. In the event of a breach by the Company of its
obligations under this Agreement, Stockholder, in addition to being entitled to
exercise all rights granted by law, including recovery of damages, will be
entitled to specific performance of its rights under this Agreement.
(b) Agreements and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, unless such amendment, modification or supplement is in writing
and signed by the parties hereto.
(c) Notices. All notices and other communications provided for or
permitted hereunder shall be made in accordance with the provision of the
Purchase Agreement.
(d) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including without limitation and without the need for an express
assignment, subsequent holders of the Registrable Securities subject to the
terms hereof.
(e) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall
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be deemed to be an original and all of which taken together shall constitute
one and the same agreement.
(f) Headings. The headings in this Agreement are for convenience
of references only and shall not limit or otherwise affect the meaning hereof.
(g) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Illinois without
reference to its conflicts of law provisions.
(h) Severability. In the event that any one or more of the
provisions contained herein, or the application hereof in any circumstance is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provisions contained herein shall not be affected or
impaired thereby.
(i) Entire Agreement. This Agreement is intended by the parties
as a final expression of their agreement and intended to be a complete and
exclusive statement of this agreement and understanding of the parties hereto
in respect of the subject matter contained herein. There are no restrictions,
promises warranties or undertakings, other than those set forth or referred to
herein, concerning the registration rights granted by the Company pursuant to
this Agreement.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date first written above.
METAL MANAGEMENT, INC.
/s/ Xxxxxx X. Xxxxxx
By:_____________________________________
Name: Xxxxxx X. Xxxxxx
Title: Chief Executive Officer
AEROSPACE METALS, INC.
/s/ Xxxxxxx Xxxxxxx
By:_____________________________________
Name: Xxxxxxx Xxxxxxx
Title: Chief Executive Officer
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SCHEDULE 1(a)
REGISTRABLE SECURITIES
STOCKHOLDER NUMBER OF SHARES OF COMMON STOCK
Aerospace Metals, Inc. 402,893