Exhibit 10.2
EXECUTION COPY
REGISTRATION RIGHTS AGREEMENT
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This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made as of
November 22, 2002, among A.M. Castle & Co., a Maryland corporation (the
"Company"), the persons and entities listed on Schedule 1.1 attached hereto
(each an "Investor") and W.B. & Co., an Illinois general partnership, for
itself, and as nominee and agent of the Investors (the "Nominee").
RECITALS
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WHEREAS, pursuant to the terms of that certain Series A Preferred Stock
Purchase Agreement (the "Series A Purchase Agreement") dated as of the date
hereof, the Investors are acquiring shares of Series A Cumulative Convertible
Preferred Stock, $.01 par value per share, of the Company (the "Series A
Preferred Stock"); and
WHEREAS, the Series A Purchase Agreement contemplates this Agreement
being executed by the parties hereto as of the date hereof.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
1. Definitions and Usage.
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1.1 Definitions. Unless otherwise provided in this Agreement,
capitalized terms used herein shall have the following meanings:
"Agreement" has the meaning set forth in the first paragraph of this
Agreement.
"Common Stock" means the Company's common stock, without par value.
"Company" has the meaning set forth in the first paragraph of this
Agreement.
"Continuously Effective" with respect to a specified registration
statement, means that such registration statement shall not cease to be
effective and available for Transfers of Registrable Securities thereunder for
longer than either (i) any ten (10) consecutive business days, or (ii) an
aggregate of fifteen (15) business days during the period specified in the
relevant provision of this Agreement.
"Demand Registration" has the meaning set forth in Section 2.1(a).
"Demand Registration Request" has the meaning set forth in Section 2.1(a).
"Equity Securities" has the meaning set forth in Section 2.3(b).
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the SEC thereunder, all as the same shall be in
effect at that time.
"Investor" has the meaning set forth in the first paragraph of this
Agreement.
"Holder" means (i) the Nominee or (ii) an Investor, unless and until such
Investor assigns all of its rights and obligations hereunder to any Persons in
accordance with Section 9.4, at such times as such Persons shall own Registrable
Securities.
"Losses" has the meaning set forth in Section 7(a).
"Nominee" has the meaning set forth in the first paragraph of this
Agreement.
"Participating Holders" means the Holders participating in a registration
hereunder.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, limited liability company, trust,
unincorporated organization or government or other agency or political
subdivision thereof.
"Piggyback Registration" has the meaning set forth in Section 3.1.
"Qualified Holders" means the holders of a majority of the Registrable
Securities then outstanding.
"register, registered and registration" refer to a registration effected by
preparing and filing a registration statement in compliance with the Securities
Act, and the declaration or ordering by the SEC of effectiveness of such
registration statement or document.
"Registrable Securities" means (a) any Common Stock issued upon the
conversion of any Series A Preferred Stock and (b) any Common Stock issued or
issuable with respect to any of the securities referred to in clause (a) by way
of a stock dividend, stock split, combination, subdivision or other similar
event. As to any particular Registrable Securities, such securities shall cease
to be Registrable Securities when they (x) have been registered and sold
pursuant to the Securities Act or which have been sold to the public pursuant to
Rule 144 or any similar rule promulgated by the SEC pursuant to the Securities
Act permitting the resale of restricted securities without the necessity of a
registration statement under the Securities Act or (y) upon any Transfer in any
manner to a Person which, by virtue of Section 9.4, is not entitled to the
rights provided by this Agreement. For purposes of this Agreement, a Person
shall be deemed to be the Holder of Registrable Securities, and the Registrable
Securities shall be deemed to be outstanding and in existence, whenever such
Person has the right to acquire such Registrable Securities upon conversion of
Series A Preferred Stock, whether or not such acquisition has actually been
effected, and such Person shall be entitled to exercise the rights of a Holder
of such Registrable Securities hereunder.
"Registration Expenses" has the meaning set forth in Section 6.1.
"Requesting Holders" means the Holders requesting a registration hereunder.
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"SEC" means the Securities and Exchange Commission and includes any
governmental authority or agency succeeding to the functions thereof.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC thereunder, all as the same shall be in effect
at that time.
"Series A Preferred Stock" has the meaning set forth in the Recitals.
"Series A Purchase Agreement" has the meaning set forth in the Recitals.
"Shelf Registration" has the meaning set forth in Section 2.2.
"Transfer" means and includes the act of selling, giving, transferring,
creating a trust (voting or otherwise), assigning or otherwise disposing of
(other than pledging, hypothecating or otherwise transferring as security) (and
correlative words shall have correlative meanings); provided, however, that any
transfer or other disposition upon foreclosure or other exercise of remedies of
a secured creditor after an event of default under or with respect to a pledge,
hypothecation or other transfer as security shall constitute a "Transfer";
provided, further, however, no "Transfer" shall be deemed to have occurred if
W.B. & Co. continued to be the nominee with respect to the Registrable
Securities subject to such transfer or other distribution. For the avoidance of
doubt, the parties hereto acknowledge that the W.B. & Co. nominee arrangement
with the Investors with respect to the Registrable Securities does not itself
constitute a "Transfer"
"Violation" has the meaning set forth in Section 7(a).
"Underwriters' Representative" means the managing underwriter, or, in the
case of a co-managed underwriting, the managing underwriter designated as the
Underwriters' Representative by the co-managers.
1.2 Usage.
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(a) References to a Person are also references to its successors in
interest (by means of merger, consolidation or sale of all or substantially all
the assets of such Person or otherwise, as the case may be) and permitted
assigns in accordance with Section 9.4.
(b) References to Registrable Securities "owned" by a Holder shall
include Registrable Securities beneficially owned by such Person but which are
held of record in the name of a nominee, trustee, custodian, or other agent, but
shall exclude Registrable Securities held by such Holder in a fiduciary capacity
for customers of such Person.
(c) References to a document are to it as amended, waived and
otherwise modified from time to time and references to a statute or other
governmental rule are to it as amended and otherwise modified from time to time
(and references to any provision thereof shall include references to any
successor provision).
(d) References to Sections are to sections hereof, unless the context
otherwise requires.
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(e) The definitions set forth herein are equally applicable both to
the singular and plural forms and the feminine, masculine and neuter forms of
the terms defined.
(f) The term "including" and correlative terms shall be deemed to be
followed by "without limitation" whether or not followed by such words or words
of like import.
(g) The term "hereof" and similar terms refer to this Agreement as a
whole.
(h) The "date of" any notice or request given pursuant to this
Agreement shall be determined in accordance with Section 9.8.
2. Demand Registrations.
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2.1 Requests for Registration.
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(a) At any time after the 10 business days following the date that the
Company's Annual Report on Form 10-K for the year ended December 31, 2002 is
filed with the SEC, the Qualified Holders may make a written request (a "Demand
Registration Request") to the Company that the Company effect the registration
of all or any portion of the Registrable Securities as the Qualified Holders
shall set forth in the Demand Registration Request pursuant to the terms of this
Agreement (a "Demand Registration"), provided, that (i) the aggregate offering
price of such Registrable Securities to be registered is at least $2,000,000 and
(ii) the Company shall not be required to cause more than two Demand
Registrations in any twelve month period.
(b) Each Demand Registration Request shall specify the approximate
number of Registrable Securities requested to be registered. Within ten days
after receipt of any such request, the Company shall give written notice of such
requested registration to all other Holders, and shall include as part of such
Demand Registration all Registrable Securities with respect to which the Company
has received written requests for inclusion therein within 15 days after the
receipt of the Company's notice by such Holders.
(c) Upon receipt of a Demand Registration Request, the Company shall,
subject to the terms and conditions of this Agreement, cause to be filed with
the SEC a registration statement in accordance with the Securities Act and the
Company shall include therein the Registrable Securities requested in the Demand
Registration Request. The registration statement shall be on Form S-3 (or such
successor form), unless at the time of filing such registration statement or at
any time prior to the SEC entering an order declaring such registration
statement to be effective under the Securities Act, either (i) the Company does
not meet the "Registrant Requirements" of, or (ii) the proposed offering by the
Participating Holders does not meet the "Transaction Requirements" of, "I.
Eligibility Requirements For Use of Form S-3" to the General Instructions to
Form S-3 under the Securities Act. In the event that Form S-3 is not available
for use in connection with the registration statement, the registration
statement shall be on an appropriate form of the SEC as shall be selected by the
Company and shall permit the disposition of the Registrable Securities in
accordance with the intended method of disposition specified in the Registration
Request.
2.2 Shelf Registration. In connection with any Demand Registration,
the Qualified Holders requesting such Demand Registration may require the
Company to file such registration with the Securities and Exchange Commission in
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accordance with and pursuant to Rule 415 promulgated under the Securities Act
(or any successor rule then in effect) (a "Shelf Registration"), provided that
the Company shall only be required to file a Shelf Registration on Form S-2 or
S-3 (or such successor forms).
2.3 Restrictions on Registration.
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(a) The Company shall be entitled to (i) postpone the filing,
effectiveness, supplementing or amending of the registration statement or
prospectus otherwise required to be prepared and filed pursuant to this
Agreement, and (ii) suspend the use of any prospectus included in the
registration statement, if in either case the Company reasonably determines that
such registration and/or the offer or Transfer of Registrable Securities
contemplated by the registration statement or any prospectus would interfere
with, or require premature disclosure of, any plan or proposal by the Company or
any of its subsidiaries to engage in any material financing, acquisition,
disposition, reorganization, merger or tender offer or other significant
transaction, and the Company promptly gives the Participating Holders written
notice of such determination. Notwithstanding anything herein to the contrary,
the Company shall not exercise its rights under this Section 2.3(a) more than
twice in any 12 month period, nor, in each case, for a period of more than 60
days. The Holders hereby acknowledge that any notice given by the Company
pursuant to this Section 2.3(a) shall constitute material non-public information
and that the United States securities laws prohibit any Person who has material
non-public information about a company from purchasing or selling securities of
such company or from communicating such information to any other Person under
circumstances in which it is reasonably foreseeable that such Person is likely
to purchase or sell such securities.
(b) The Company shall not be obligated to file the registration
statement otherwise required to be prepared and filed pursuant to this Section 2
if, within 30 days after its receipt of a Demand Registration Request, the
Company notifies the Requesting Holders that (i) prior to the Company's receipt
of such Demand Registration Request, the Company had a plan or intention
promptly to register equity securities, including any security convertible into
or exchangeable for equity securities ("Equity Securities"), under the
Securities Act (other than Equity Securities to be registered on a registration
statement on Form S-4 or Form S-8 (or any successor form to such forms)) and
(ii) the Company reasonably believes that the proposed methods of distribution
of the Registrable Securities subject to such Demand Registration Request would
impair or adversely affect the proposed distribution of the Equity Securities to
be registered by the Company.
(c) If the Company postpones the filing or effectiveness of a
registration statement pursuant to Section 2.3(a)(i) or is not obligated to file
a registration statement pursuant to Section 2.3(b), the Requesting Holders may
withdraw in writing their Demand Registration Request and such Holders' rights
under Section 2.1 to make a Demand Registration Request shall be reinstated and
continue as if such unfulfilled Demand Registration Request had not been made.
(d) Notwithstanding anything in this Agreement to the contrary, in no
event will the Company be obligated to effect more than three Demand
Registrations hereunder. For purposes of the preceding sentence, a Demand
Registration shall not be deemed to have been effected (i) unless a registration
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statement with respect thereto has become effective, or (ii) if after such
registration statement has become effective, the related offer, sale or
distribution of Registrable Securities thereunder is prohibited by any stop
order, injunction or other order or requirement of SEC or other governmental
agency or court for any reason not attributable to any Holder and such
prohibition is not thereafter eliminated. If the Company shall have complied
with its obligations under this Agreement, a right to request a registration
pursuant to this Section 2 shall be deemed to have been satisfied upon the
effective date of such registration; provided, that, no stop order or similar
order, or proceedings for such an order, is thereafter entered or initiated.
(e) Notwithstanding anything in this Agreement to the contrary, the
Company shall have no obligation hereunder to register any Registrable
Securities if, at the time of a Demand Registration Request, the proposed sale
or disposition of all of the Registrable Securities for which registration was
requested by the Requesting Holders does not require registration under the
Securities Act for a sale or disposition in a single public sale (including
sales in accordance with Rule 144(k) or any similar rule promulgated by the SEC
under the Securities Act), and the Company offers to remove any and all legends
restricting Transfer from the certificates evidencing such Registrable
Securities.
(f) If at least 75% of the Registrable Securities requested to be
registered by the Requesting Holders pursuant to a Demand Registration are not
sold in such registration (a "Failed Registration"), the Requesting Holders
shall have the right to require the Company to effect an additional registration
of all or part of the Requesting Holders' Registrable Securities in accordance
with this Section 2; provided, (i) the Holders shall reimburse the Company for
the Registration Expenses incurred in the Failed Registration and (ii) the
foregoing right to an additional registration shall only be available to the
Holders with respect to one Failed Registration and thereafter any additional
registrations (including Failed Registrations) shall count against the three
Demand Registrations to which the Holders are entitled pursuant to Section
2.3(d) herein.
2.4 Underwritten Offerings.
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(a) If a Demand Registration pursuant to this Section 2 involves an
underwritten offering (whether on a "firm commitment", "best efforts" or "all
reasonable efforts" basis or otherwise), the Holders of a majority of the
Registrable Securities initially requesting registration shall select the
underwriter or underwriters and manager or managers to administer such
underwritten offering; provided, however, that each Person so selected shall be
reasonably acceptable to the Company.
(b) If the Company effects the registration pursuant to this Section 2
in connection with an underwritten offering of Registrable Securities and the
Underwriters' Representative advises the Participating Holders that, in its
opinion, the amount of securities requested to be included in such offering
(whether by the Holders or other holders of securities of the Company) exceeds
the amount that can be sold in such offering within a price range acceptable to
the Holders of a majority of the Registrable Securities initially requesting
registration, securities shall be included in such offering and the related
registration, to the extent of the amount that can be sold within such price
range in the following order of priority: first, the Registrable Securities
requested by the Participating Holders to be included in such registration
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pursuant to this Section 2 pro rata among the respective Holders thereof on the
basis of the amount of Registrable Securities owned by each such Holder; and
second, all other securities requested to be included in such registration.
Subject to Section 9.13, the Holders shall continue to have their rights
hereunder with regard to any such excluded Registrable Securities.
3. Piggyback Registrations.
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3.1 Right to Piggyback. Whenever the Company proposes to register any
of its securities under the Securities Act (other than pursuant to a Demand
Registration which shall be governed by Section 2, and registrations related
solely to employee benefit plans or a Rule 145 transaction) and the registration
form to be used may be used for the registration of Registrable Securities (a
"Piggyback Registration"), the Company shall give prompt written notice to all
Holders, of its intention to effect such a registration and, subject to the
terms hereof, shall include in such registration all Registrable Securities with
respect to which the Company has received written requests for inclusion therein
within 15 days after such Holders receive the Company's notice.
3.2 Priority on Primary Registrations. If a Piggyback Registration is
an underwritten primary registration on behalf of the Company, and the managing
underwriters advise the Company in writing that in their opinion the number of
securities requested to be included in such registration exceeds the number
which can be sold therein without adversely affecting the marketability of the
offering, the Company shall include in such registration (a) first, the
securities the Company proposes to sell, (b) second, the Registrable Securities
requested to be included in such registration, pro rata among the respective
Holders thereof on the basis of the amount of Registrable Securities owned by
each such Holder and (c) third, other securities requested to be included in
such registration.
3.3 Priority on Secondary Registrations. If a Piggyback Registration
is an underwritten secondary registration on behalf of holders of the Company's
securities, and the managing underwriters advise the Company in writing that in
their opinion the number of securities requested to be included in such
registration exceeds the number which can be sold in such offering without
adversely affecting the marketability of the offering, the Company shall include
in such registration (a) first, the securities requested to be included therein
by the holders requesting such registration, (b) second, the Registrable
Securities requested to be included in such registration, pro rata among the
Holders of such securities on the basis of the number of Registrable Securities
owned by each such Holder and (c) third, other securities requested to be
included in such registration.
3.4 Selection of Underwriters. The Company shall have the right to
select the investment banker(s) and manager(s) to administer the offering in
connection with any Piggyback Registration.
4. Registration Procedures. Whenever the Holders have requested that
any Registrable Securities be registered pursuant to this Agreement, the Company
shall use commercially reasonable efforts to effect the registration of such
Registrable Securities in accordance with the intended method of disposition
thereof, and pursuant thereto the Company shall as expeditiously as practicable:
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(a) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its commercially reasonable
efforts to cause the registration statement to become effective (giving due
regard to the need to prepare current financial statements, conduct due
diligence and complete other actions that are reasonably necessary to effect a
public offering); provided, however, that before filing the registration
statement or prospectus or any amendments or supplements thereto, the Company
shall furnish to one firm of counsel for the Participating Holders copies of all
such documents in the form substantially as proposed to be filed with the SEC.
(b) Prepare and file with the SEC such amendments and supplements to
the registration statement and the prospectus used in connection with the
registration statement as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by the
registration statement. Subject to Section 2.3(a), (i) the Company shall amend
the registration statement or supplement the prospectus so that it will remain
current and in compliance with the requirements of the Securities Act for the
period specified in Section 4(j), and (ii) if during such period any event or
development occurs as a result of which the registration statement or prospectus
contains a misstatement 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, then the Company shall promptly notify the Participating Holders,
amend the registration statement or supplement the prospectus so that each will
thereafter comply with the Securities Act and furnish to the Participating
Holders such amended or supplemented prospectus, which such Holders shall
thereafter use in the Transfer of Registrable Securities covered by such
registration statement. Pending any such amendment or supplement described in
this Section 4(b), the Participating Holders shall cease making offers or
Transfers of Registrable Securities pursuant to the prior prospectus. If any
Registrable Securities included in the registration statement subject to, or
required by, this Agreement remain unsold at the end of the period during which
the Company is obligated to use its reasonable efforts to maintain the
effectiveness of the registration statement, the Company may file a
post-effective amendment to the registration statement for the purpose of
removing such Registrable Securities from registered status.
(c) Furnish to the Participating Holders, without charge, such numbers
of copies of the registration statement, any pre-effective or post-effective
amendment thereto, the prospectus, including each preliminary prospectus and any
amendments or supplements thereto, in each case in conformity with the
requirements of the Securities Act, and such other related documents as such
Holders may reasonably request in order to facilitate the disposition of the
Registrable Securities owned by such Holders.
(d) Use its reasonable efforts (i) to register and qualify the
securities covered by the registration statement under such other securities or
Blue Sky laws of such states where an exemption from registration is not
available and as shall be reasonably requested by any Underwriters'
Representative (or, if the registration is not for a public offering, in up to
ten states designated by the Holders of a majority of the Registrable Securities
being registered) and (ii) to obtain the withdrawal of any order suspending the
effectiveness of the registration statement, or the lifting of any suspension of
the qualification (or exemption from qualification) of the offer and Transfer of
any of the Registrable Securities in any state, at the earliest possible moment;
provided, however, that the Company shall not be required in connection
therewith or as a condition thereto to qualify to do business as a foreign
corporation, to consent to general service of process or subject itself to
taxation in any state.
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(e) In the event of any underwritten offering, use its reasonable
efforts to enter into and perform its obligations under an underwriting
agreement (including indemnification and contribution obligations of
underwriters), in the usual and customary form for other securities offerings of
the Company, with the managing underwriter or underwriters of such offering. The
Company shall also cooperate with the Participating Holders and the
Underwriters' Representative for such offering in the marketing of the
Registrable Securities, including making available the officers, accountants,
counsel, premises, books and records of the Company for such purpose, but the
Company shall not be required to incur any material out-of-pocket expense
pursuant to this sentence.
(f) Promptly notify the Participating Holders of any stop order issued
or threatened to be issued by the SEC in connection therewith and take all
reasonable actions required to prevent the entry of such stop order or to remove
it if entered.
(g) Make available for inspection by the Participating Holders, any
underwriter participating in such offering and the representatives of such
Holders and the Underwriter's Representative (but not more than one firm of
counsel to such Holders), all financial and other information as shall be
reasonably requested by them, and provide such Holders, any underwriter
participating in such offering and the representatives of such Holders and the
Underwriter's Representative the reasonable opportunity to discuss the business
affairs of the Company with its principal executives and with the independent
public accountants who have certified the audited financial statements included
in the registration statement, in each case all as reasonably necessary to
enable them to exercise their due diligence responsibility under the Securities
Act; provided, however, that information that the Company determines to be
confidential and which the Company advises such Person in writing is
confidential shall not be disclosed unless such Person signs a confidentiality
agreement reasonably satisfactory to the Company and such Holders agree to be
responsible for such Person's breach of confidentiality on terms reasonably
satisfactory to the Company.
(h) Use its reasonable efforts to obtain a so-called "comfort letter"
from the independent public accountants of the Company, and legal opinions of
counsel to the Company addressed to the Participating Holders, in customary form
and covering such matters of the type customarily covered by such letters, and
in a form that shall be reasonably satisfactory to the Holders of a majority of
the Registrable Securities being registered. Delivery of any such comfort letter
or opinion shall be subject to the recipient furnishing such written
representations or acknowledgements as are customarily provided by selling
stockholders who receive such comfort letters or opinions.
(i) Cause the Registrable Securities covered by the registration
statement, if then listed on a securities exchange or included for quotation in
a recognized trading market, to continue to be so listed or included for a
reasonable period of time after the offering, but in no event for less than the
period such registration is effective.
(j) Keep the registration statement Continuously Effective (i) if a
Demand Registration, for up to 60 calendar days or until such earlier date of
which all the Registrable Securities under the Demand Registration statement
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shall have been disposed of in the manner described in the registration
statement and (ii) if a Shelf Registration, for up to 12 months or until such
earlier date as of which all the Registrable Securities under the Shelf
Registration statement have been disposed of in a manner described in the
registration statement. Notwithstanding the foregoing, if for any reason the
effectiveness of a registration is suspended or postponed as permitted by any
provision of this Agreement, the relevant foregoing period shall be extended by
the aggregate number of days of such suspension or postponement. (k) Take such
other actions as are reasonably required in order to expedite or facilitate the
disposition of Registrable Securities included in the registration.
5. Holders' Obligations. It shall be a condition precedent to the
obligation of the Company to take any action pursuant to this Agreement with
respect to the Registrable Securities of the Participating Holders, that each
Participating Holder shall:
(a) Promptly furnish to the Company such information regarding the
Holder, the number of the Registrable Securities owned by it, the number of
Registrable Securities to be registered and the intended method of disposition
of such securities as shall be required to effect the registration of the
Holder's Registrable Securities, and cooperate fully with the Company in
preparing the registration.
(b) If the Company has delivered a prospectus to the Holder and after
having done so the prospectus is amended or supplemented to comply with the
requirements of the Securities Act, at the written request of the Company, the
Holder shall immediately cease making offers or Transfers of Registrable
Securities and shall return the prospectuses to the Company and, upon receipt of
the amended or supplemented prospectus from the Company, the Holder shall use
only such amended or supplemented prospectus in making offers or Transfers of
the Registrable Securities.
(c) If the Company has delivered to the Holder written notice in
accordance with Section 2.3(a), then the Holder shall immediately cease making
offers or Transfers of Registrable Securities until the Company shall have given
the Holder written notice that the Holder may once again commence making offers
or Transfers of Registrable Securities under the current prospectus or has
delivered to the Holder an amended or supplemented prospectus, in which event
the Holder shall use only such amended or supplemented prospectus to make offers
or Transfers of Registrable Securities.
(d) During such time as the Holder may be engaged in a distribution of
Registrable Securities, the Holder shall comply with Regulation M promulgated
under the Exchange Act and pursuant thereto it shall, among other things, (i)
not engage in any stabilization activity in connection with the securities of
the Company in contravention of such regulation or (ii) distribute Registrable
Securities under the registration statement solely in the manner described in
the registration statement.
6. Registration Expenses.
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6.1 Company Expenses. Subject to Section 6.2, all expenses incident to
the Company's performance of or compliance with this Agreement, including all
registration and filing fees, fees of any transfer agent and registrar, fees and
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expenses of compliance with securities or blue sky laws, printing expenses, fees
and disbursements of counsel for the Company and its independent certified
public accountants, fees and expenses of underwriters (excluding discounts and
commissions attributable to the Registrable Securities included in such
registration), the Company's internal expenses and the expenses and fees for
listing the securities to be registered on each securities exchange or quotation
system on which similar securities issued by the Company are then listed or
quoted (all such expenses being herein called "Registration Expenses") shall be
borne by the Company.
6.2 Holder Expenses. In connection with a registration hereunder, the
Company shall reimburse the Holders included in a registration for the
reasonable fees and disbursements of one counsel (not to exceed $20,000).
7. Indemnification; Contribution. If any Registrable Securities are
included in a registration statement under this Agreement:
(a) To the extent permitted by applicable law, the Company shall
indemnify and hold harmless each Holder, each Person, if any, who controls such
Holder within the meaning of the Securities Act, and each officer, director,
partner and employee of such Holder and such controlling Person, against any and
all losses, claims, damages, liabilities and expenses (joint or several),
including reasonable attorney's fees and disbursements and reasonable expenses
of investigation (collectively, "Losses"), incurred by such Person pursuant to
any actual or threatened action, suit, proceeding or investigation, or to which
any of the foregoing Persons may otherwise become subject under the Securities
Act, the Exchange Act or other federal or state laws, but only insofar as such
Losses arise out of or are based upon any of the following statements or
omissions (collectively, a "Violation"):
(i) any untrue statement or alleged untrue statement of a
material fact contained in the registration statement, including
any preliminary prospectus or final prospectus contained therein,
or any amendments or supplements thereto; or
(ii) the omission or alleged omission to state therein a material
fact required to be stated therein, or necessary to make the
statements therein, in light of the circumstances under which
they were made, not misleading;
provided, however, that the indemnification required by this Section 7(a) shall
not apply to amounts paid in settlement of any such Loss if such settlement is
effected without the consent of the Company (which consent shall not be
unreasonably withheld), nor shall the Company be liable in any such case for any
such Loss to the extent that it arises out of or is based upon a Violation which
occurs in reliance upon and in conformity with information furnished in writing
to the Company by or on behalf of a Holder or any underwriter expressly for use
in connection with such registration; and provided, further, that any
indemnification required by this Section 7(a) shall not apply to the extent that
any such Loss is based on or arises out of an untrue statement or alleged untrue
statement of a material fact, or an omission or alleged omission to state a
material fact, included in or omitted from any preliminary prospectus if the
final prospectus shall correct such untrue statement or alleged untrue
statement, or such omission or alleged omission, and a copy of the final
prospectus has not been sent or given by the Holder or any underwriter to the
11
Person alleging damage at or prior to the confirmation of sale to such Person;
and provided, further, that this indemnity shall not be available to any Person
who offers or Transfers any Registrable Securities (whether pursuant to a
prospectus or not) during any period which the Company has notified the Holder
that such offers and Transfers must cease under the Agreement, including
Sections 2.3(a), 4(b), 5(b) and 5(c). Subject to Section 7(c), in connection
with the foregoing indemnification obligations, the Company shall not be liable
for reasonable fees and expenses of more than one separate firm for all the
Holders and the Nominee.
(b) To the extent permitted by applicable law, the Holders (jointly
and severally) shall indemnify and hold harmless the Company, each of the
directors of the Company, each of the officers of the Company who shall have
signed the registration statement, each Person, if any, who controls the Company
within the meaning of the Securities Act, and each officer, director, partner,
and employee of such controlling Person, against any and all Losses incurred by
such Person pursuant to any actual or threatened action, suit, proceeding or
investigation, or to which any of the foregoing Persons may otherwise become
subject under the Securities Act, the Exchange Act or other federal or state
laws, but only insofar as such Losses arise out of or are based upon any
Violation, in each case to the extent that such Violation arises out of or is
based upon information furnished in writing by or on behalf of a Holder
expressly for use in connection with such registration; provided, however, that
(x) any indemnification required by this Section 7(b) shall not apply to amounts
paid in settlement of any such Loss if such settlement is effected without the
consent of the Qualified Holders (which consent shall not be unreasonably
withheld) and (y) in no event shall the amount of any indemnity obligation under
this Section 7(b) exceed the gross proceeds from the applicable offering
received by the Holders.
(c) Promptly after receipt by an indemnified party under this Section
7 of notice of the commencement of any action, suit, proceeding, investigation
or threat thereof made in writing for which such indemnified party may make a
claim under this Section 7, such indemnified party shall deliver to the
indemnifying party a written notice thereof and the indemnifying party shall
have the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
the defense thereof with counsel mutually satisfactory to the parties; provided,
however, that an indemnified party shall have the right to retain its own
counsel, with the fees and disbursements and expenses (in each case, to the
extent reasonable) to be paid by the indemnifying party, if representation of
such indemnified party by the counsel retained by the indemnifying party would
be inappropriate due to actual or potential differing interests between such
indemnified party and any other party represented by such counsel in such
proceeding. The failure to deliver written notice to the indemnifying party
within a reasonable time following the commencement of any such action, if
prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section
7 to the extent of such prejudice but shall not relieve the indemnifying party
of any liability that it may have to any indemnified party otherwise than
pursuant to this Section 7. Any such indemnified party shall have the right to
employ separate counsel in any such action, claim or proceeding and to
participate in the defense thereof, but the fees and expenses of such counsel
shall be the expenses of such indemnified party unless (i) the indemnifying
party has agreed to pay such fees and expenses or (ii) the indemnifying party
shall have failed to promptly assume the defense of such action, claim or
proceeding or (iii) the named parties to any such action, claim or proceeding
(including any impleaded parties) include both such indemnified party and the
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indemnifying party, and such indemnified party shall have been advised by
counsel that there may be one or more legal defenses available to it that are
different from or in addition to those available to the indemnifying party and
that the assertion of such defenses would create a conflict of interest such
that counsel employed by the indemnifying party could not faithfully represent
the indemnified party (in which case, if such indemnified party notifies the
indemnifying party in writing that it elects to employ separate counsel at the
expense of the indemnifying party, the indemnifying party shall not have the
right to assume the defense of such action, claim or proceeding on behalf of
such indemnified party, it being understood, however, that the indemnifying
party shall not, in connection with any one such action, claim or proceeding or
separate but substantially similar or related actions, claims or proceedings in
the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses of more than one
separate firm of attorneys (together with appropriate local counsel) at any time
for all such indemnified parties, unless in the reasonable judgment of such
indemnified party a conflict of interest may exist between such indemnified
party and any other of such indemnified parties with respect to such action,
claim or proceeding, in which event the indemnifying party shall be obligated to
pay the reasonable fees and expenses of such additional counsel or counsels).
(d) If the indemnification required by this Section 7 from the
indemnifying party is unavailable to an indemnified party hereunder in respect
of any Losses referred to in this Section 7:
(i) the indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable
by such indemnified party as a result of such Losses in such
proportion as is appropriate to reflect the relative fault of the
indemnifying party and indemnified parties in connection with the
actions that resulted in such Losses, as well as any other
relevant equitable considerations. The relative fault of such
indemnifying party and indemnified parties shall be determined by
reference to, among other things, whether any Violation has been
committed by, or relates to information supplied by, such
indemnifying party or indemnified parties, and the parties'
relative intent, knowledge, access to information and opportunity
to correct or prevent such Violation. The amount paid or payable
by a party as a result of the Losses referred to above shall be
deemed to include, subject to the limitations set forth in
Sections 7(a), 7(b) and 7(c), any legal or other fees or expenses
reasonably incurred by such party in connection with any
investigation or proceeding;
(ii) the parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 7(d) were
determined by pro rata allocation or by any other method of
allocation which does not take into account the equitable
considerations referred to in Section 7(d)(i). No Person guilty
of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution
from any Person who was not guilty of such fraudulent
misrepresentation.
(e) The obligations of the Company and the Holders under this Section 7
shall survive the completion of any offering of Registrable Securities pursuant
to the registration statement under this Agreement, and otherwise.
13
8. Holdback. Each Holder, if so requested by the Company or the
Underwriters' Representative in connection with an offering of any Equity
Securities covered by a registration statement filed by the Company, shall (to
the extent that similarly situated Persons are so required) not effect any
public sale or distribution of Common Stock or any securities convertible into
or exchangeable or exercisable for Common Stock, including a sale pursuant to
Rule 144 under the Securities Act during the 15-day period prior to, and during
the 90-day period beginning on, the date (i) such registration statement is
declared effective under the Securities Act by the SEC or (ii) of commencement
of such offering or distribution if such offering or distribution is on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act. In
order to enforce the foregoing covenant, the Company shall be entitled to impose
stop-Transfer instructions with respect to the Registrable Securities of each
Holder until the end of such period. Each Holder shall treat any such request
confidentially and shall not disclose such information to any Person.
9. Miscellaneous.
-------------
9.1 Remedies. Any Person having rights under any provision of this
Agreement shall be entitled to enforce such rights specifically to recover
damages caused by reason of any breach of any provision of this Agreement and to
exercise all other rights granted by law. The parties hereto agree and
acknowledge that money damages are not an adequate remedy for any breach of the
provisions of this Agreement and that any party may apply for specific
performance and for other injunctive relief in order to enforce or prevent
violation of the provisions of this Agreement.
9.2 Amendments and Waivers.
----------------------
(a) This Agreement shall not be amended, modified or supplemented
except by written instrument signed by each of the parties hereto.
(b) Any term or provision of this Agreement may be waived, or the time
for performance extended, as authorized in writing by the party or parties
entitled to the benefit thereof. No waiver of any term or condition of this
Agreement shall operate as a waiver of any other breach of such term and
condition or any other term or condition, nor shall any failure to enforce any
provision hereof operate as a waiver of such provision or of any other provision
hereof. No written waiver hereunder, unless it by its own terms explicitly
provides to the contrary, shall be construed to effect a continuing waiver of
the provisions being waived and no such waiver in any instance shall constitute
a waiver in any other instance or for any other purpose or impair the right of
the party against whom such waiver is claimed in all other instances or for all
other purposes to require full compliance with such provision.
9.3 Further Assurances. Each of the parties hereto shall execute all
such further instruments and documents and take all such further action as any
other party hereto may reasonably require in order to effectuate the terms and
purposes of this Agreement.
14
9.4 Successors, Assigns and Subsequent Holders.
------------------------------------------
(a) All covenants and agreements in this Agreement by or on behalf of
any of the parties hereto shall bind and inure to the benefit of the respective
successors and the permitted assigns of the parties hereto.
(b) The rights to cause the Company to register Registrable Securities
pursuant to this Agreement may be assigned (but only with all related
obligations) by a Holder if (x) such Transfer involves at least 33% of the
Registrable Securities held by the Holder on the date hereof or (y) the Transfer
is to (i) a subsidiary, parent, partner, limited partner, member, retired
member, retired partner or stockholder of such Holder or (ii) such Holder's
family member or trust for the benefit of such Holder (provided, that all such
transferees who would not qualify individually for assignment of registration
rights under clause (x) of this Section 9.4 have a single attorney-in-fact for
the purpose of exercising any rights, receiving notices or taking any action
under this Agreement).
(c) No assignment or Transfer pursuant to this Section 9.4 shall be
effective unless (i) the Company is, within a reasonable time after such
Transfer, furnished with written notice of the name and address of such
transferee or assignee and the securities with respect to which such
registration rights are being assigned; and (ii) such transferee or assignee
agrees in writing to be bound by and subject to the terms and conditions of this
Agreement.
9.5 Aggregation of Stock. All shares of Registrable Securities held or
acquired by affiliated entities or Persons shall be aggregated together for the
purpose of determining the availability of any rights under this Agreement.
9.6 Entire Agreement. This Agreement constitutes the entire agreement
of the parties hereto with respect to the subject matter contained herein, and
supersedes all prior agreements, negotiations, discussions and understandings
among the parties hereto with respect to such subject matter (including without
limitation the Term Sheet signed October 24, 2002 between the Company and the
Nominee).
9.7 Severability. Wherever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
law and in such a way as to, as closely as possible, achieve the intended
economic effect of such provision and this Agreement as a whole, but if any
provision contained herein is, for any reason, held to be invalid, illegal or
unenforceable in any respect, such provision shall be ineffective to the extent,
but only to the extent, of such invalidity, illegality or unenforceability
without invalidating the remainder of such provision or any other provisions
hereof, unless such a construction would be unreasonable.
9.8 Notices. All notices or other communications required or permitted
hereunder shall be in writing and shall be deemed given (a) when delivered
personally, (b) if transmitted by facsimile, when confirmation of transmission
is received, (c) if sent by registered or certified mail, postage prepaid,
return receipt requested, when received, or (d) if sent by reputable overnight
courier service, the next business day; and shall be addressed as follows:
15
If to the Company, to
A.M. Castle & Co.
0000 Xxxxx Xxxx Xxxx
Xxxxxxxx Xxxx, XX 00000
Attention: President
Facsimile: (000) 000-0000
with a copy to:
A.M. Castle & Co.
0000 Xxxxx Xxxx Xxxx
Xxxxxxxx Xxxx, XX 00000
Attention: Counsel
Facsimile: (000) 000-0000
and
Sidley Xxxxxx Xxxxx & Xxxx
Bank One Plaza
00 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxx
Xxxxx X. Xxxxxxxxxx
Facsimile: (000) 000-0000
If to the Holders or the Nominee, to:
Xxxxxxx Estates, Inc.
00 Xxxxx XxXxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx, III
Facsimile: (000) 000-0000
with a copy to:
XxXxxxxxx, Will & Xxxxx
000 Xxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X.X. Xxxxxx
Facsimile: (000) 000-0000
9.9 Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Illinois, without giving effect to
any choice of law or conflict of law rules or provisions (whether of the State
of Illinois or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of Illinois. In furtherance of the
foregoing, the internal law of the State of Illinois shall control the
interpretation and construction of this Agreement, even though under that
jurisdiction's choice of law or conflict of law analysis, the substantive law of
some other jurisdiction would ordinarily apply.
16
9.10 Submission to Jurisdiction. Each of the parties hereto hereby
irrevocably submits in any suit, action or proceeding arising out of or related
to this Agreement, or any of the transactions contemplated hereby, to the
exclusive jurisdiction of the United States District Court for the Northern
District of Illinois and the Circuit Court of Xxxx County, Illinois, and, to the
extent permissible by law, waives any and all claims and objections that any
such court is an inconvenient forum.
9.11 Attorneys' Fees. In the event of any action or suit based upon or
arising out of any actual or alleged breach by the Company, on the one hand, or
the Nominee or the Investors, on the other hand, of any provision of this
Agreement, the prevailing party shall be entitled to recover its reasonable
attorneys' fees and expenses of such action or suit from the losing party, in
addition to any other relief ordered by the court; provided, that, unless
otherwise specified herein, the Company shall not be liable for reasonable fees
and expenses of more than one firm for all of the Holders and the Nominee.
9.12 Execution in Counterparts. This Agreement may be executed in any
number of counterparts, each of which will be considered an original instrument,
but all of which together will be considered one and the same agreement, and
will become binding when one or more counterparts have been signed by and
delivered to each of the parties.
9.13 Termination. This Agreement may be terminated at any time by a
written instrument signed by the Company and the Nominee, on behalf of the
Qualified Holders. Unless sooner terminated in accordance with the preceding
sentence, this Agreement (other than Section 7) shall terminate in its entirety
automatically upon the earlier of (i) such date as there are fewer than 500,000
shares of Registrable Securities outstanding and (ii) the date that the Company
is a party to a merger or consolidation and the Holders receive pursuant to such
merger or consolidation securities registered under the Securities Act in
exchange for the Registrable Securities.
9.14 No Third Party Beneficiaries. Except as provided in Section 7 and
Section 9.4(b), nothing herein expressed or implied is intended to confer upon
any Person, other than the parties hereto or their respective permitted assigns
or successors, any rights, remedies, obligations or liabilities under or by
reason of this Agreement.
9.15 Actions by the Investors. (a) Each Investor hereby constitutes
and appoints the Nominee, the true and lawful attorney and agent of such
Investor to execute in the name, place and stead of such Investor any and all
amendments to this Agreement and all notices, communications or other
instruments necessary or advisable in connection herewith; the Nominee to have
the full power and authority to do and perform in the name and on behalf of each
Investor every act whatsoever necessary or advisable to be done on the premises
as fully and to all intents and purposes as such Investor might or could do in
person.
(b) For all purposes of this Agreement, each Investor represents,
warrants and covenants that any notice, communication or action taken by the
Nominee may be unconditionally relied upon by the Company as being for and on
behalf of all of the Investors.
17
(c) For all purposes of this Agreement where the Company is required
to give notice to any Holder (or any group of Holders) who is an Investor on the
date hereof, the Company may provide such notice to the Nominee on behalf of
such Holder(s) and the receipt of such notice by the Nominee shall be deemed for
all purposes hereunder to be receipt by such Holder(s).
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed the day and year first above written.
A.M. CASTLE & CO.
By: /s/ G. Xxxxxx XxXxxx
--------------------------------
Name: G. Xxxxxx XxXxxx
Title: President and CEO
W.B. & CO. for itself, and as
nominee and agent of the Investors
listed on Schedule 1.1 attached
hereto
By: /s/ Xxxxxxx X. Xxxxxxx, III
--------------------------------
Name: Xxxxxxx X. Xxxxxxx, III
Title: General Partner
/s/ Xxxxxxx X. Xxxxxxx, III
-----------------------------------
Xxxxxxx X. Xxxxxxx, III, as
Attorney-in-Fact, Trustee or
Authorized Officer for those
Investors listed on Schedule 1.1
attached hereto under the heading
"Xxxxxxx X. Xxxxxxx, III,
Attorney-in-Fact, Trustee or
Authorized Officer"
United States Trust Company of New
York, as Trustee for those Investors
listed on Schedule 1.1 attached
hereto under the heading "United
States Trust Company of New York,
Trustee"
By: /s/ Xxxxx X. Xxxxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Senior Vice President
Signature Page
to the
Registration Rights Agreement
