Exhibit 10.1
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT dated as of _________, 1997
(this "Agreement") among Societe Industrielle de Materiaux Avances ("SIMA"), LWH
Holding S.A. ("LWH"), Advanced Materials Investments Holding S.A. ("AMI" and,
together with SIMA and LWH, the "Principal Stockholders") and Special Metals
Corporation, a Delaware corporation (the "Company").
W I T N E S S E T H:
WHEREAS, as of the date hereof, the Principal Stockholders are
the owners of 12,400,000 shares of Common Stock (as defined below) of the
Company (the "Shares"), which constitute all of the issued and outstanding
capital stock of the Company;
WHEREAS, the parties have determined that the Company will
make an initial public offering of its Common Stock (the "Initial Public
Offering") and the Principal Stockholders have agreed to facilitate the Initial
Public Offering; and
WHEREAS, the parties desire to enter into this Agreement,
which sets forth certain registration rights applicable to the Registrable
Securities (as defined below) held from time to time by the Principal
Stockholders and/or any permitted transferees;
NOW, THEREFORE, in consideration of the mutual covenants set
forth herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and subject to the conditions and
upon the terms hereof, the parties hereto hereby agree as follows:
1. Definitions. As used herein, unless the context otherwise
requires, the following terms have the following respective meanings:
"Commission" means the Securities and Exchange Commission or
any other federal agency at the time administering the Securities Act.
"Common Stock" shall mean and include (i) Common Stock, par
value $0.01 per share, of the Company, (ii) each other class of capital stock of
the Company that does not have a preference over any other class of capital
stock of the Company as to dividends or upon liquidation, dissolution or winding
up of the Company, (iii) any class of capital stock or securities into which or
for which shares of Common Stock or any other class of capital stock or
securities described in clauses (ii) or (iii) may hereafter be changed,
converted or exchanged or which are issued to holders of shares of Common Stock
or any other class of capital stock or securities
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described in clauses (ii) or (iii) upon any reorganization, recapitalization,
reclassification, share combination, share subdivision, share dividend, merger,
consolidation or similar transactions or events.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any superseding Federal statute, and the rules and regulations
promulgated thereunder, all as the same shall be in effect at the time.
Reference to a particular section of the Securities Exchange Act of 1934, as
amended, shall include a reference to the comparable section, if any, of any
such superseding Federal statute.
"a majority of the Registrable Securities" shall mean either
(i) more than 50% of the shares of the issued and outstanding Registrable
Securities if the Registrable Securities are shares of capital stock or rights
or warrants to acquire capital stock or (ii) more than 50% of the aggregate
principal amount of the issued and outstanding Registrable Securities if the
Registrable Securities are debt securities. If there is more than one class of
Registrable Securities, the term "a majority of the Registrable Securities"
shall mean a majority of each class of the Registrable Securities.
"Person" means any individual, firm, corporation, partnership,
limited liability company or partnership, trust, incorporated or unincorporated
association, joint venture, joint stock company, government (or an agency or
political subdivision thereof) or other entity of any kind and shall include any
successor (by merger or otherwise) of such entity.
"Registrable Securities" means the Shares and any other shares
of Common Stock beneficially owned by the Principal Stockholders or a permitted
assignee under this Agreement. As to any particular Registrable Securities, once
issued, such securities shall cease to be Registrable Securities when (a) 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 such registration statement, (b) they shall have
been sold as permitted by Rule 144 (or any successor provision) under the
Securities Act, (c) they shall have been otherwise transferred, new certificates
for them not bearing a legend restricting further transfer shall have been
delivered by the Company and subsequent public distribution of them shall not
require registration of such distribution under the Securities Act or (d) they
shall have ceased to be outstanding. All references to percentages of
Registrable Securities shall be calculated pursuant to Section 12.
"Registration Expenses" means all expenses incident to the
Company's performance of or compliance with Section 2, including, without
limitation, all registration and filing fees, all fees of the NASDAQ National
Market, any national securities exchange or the National Association of
Securities Dealers, Inc., all fees and expenses of complying with securities or
blue sky laws (if any), all word processing, duplicating and printing expenses,
messenger and delivery expenses, the
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fees and disbursements of counsel for the Company and of its independent public
accountants, including the expenses of "comfort" letters required by or incident
to such performance and compliance, any fees and disbursements of underwriters
customarily paid by issuers or sellers of securities (excluding any underwriting
discounts or commissions with respect to the Registrable Securities) and the
reasonable fees and expenses of one counsel to Requesting Holders or the Selling
Shareholders, as the case may be (selected by the Requesting Holders or the
Selling Shareholders, as the case may be, representing a majority of the
Registrable Securities covered by such registration statement); provided,
however, that in the event the Company shall determine, in accordance with
Section 2.2(a) or Section 2.6, not to register any securities with respect to
which it had given written notice of its intention to so register to holders of
Registrable Securities, all of the costs of the type (and subject to any
limitation to the extent) set forth in this definition and incurred by
Requesting Holders or Selling Shareholders in connection with such registration
on or prior to the date the Company notifies the Requesting Holders or Selling
Shareholders of such determination shall be deemed Registration Expenses.
"Requesting Holder" is defined in Section 2.2
"Selling Shareholder" is defined in Section 2.1
"Securities Act" means the Securities Act of 1933, as amended,
or any superseding Federal statute, and the rules and regulations promulgated
thereunder, all as the same shall be in effect at the time. References to a
particular section of the Securities Act of 1933, as amended, shall include a
reference to the comparable section, if any, of any such superseding Federal
statute.
2. Registration Under Securities Act, etc.
2.1 Demand Registration
(a) Upon written notice provided at any
time after the date hereof from either (x) the holder or holders of a majority
of the Registrable Securities or (y) any Principal Stockholder who holds
Registrable Securities representing more than 5% of the outstanding Common Stock
(in each case, the "Initiating Holders") requesting that the Company effect the
registration under the Securities Act of the Registrable Securities held by the
Initiating Holders (which notice shall specify the Registrable Securities
intended to be disposed of and the intended method or methods of disposition of
such Registrable Securities), the Company promptly will give written notice of
such requested registration to all registered holders of Registrable Securities,
and thereupon the Company will use its best efforts to effect, at the earliest
possible date, the registration under the Securities Act, of
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(i) the Registrable Securities
which the Company has been so requested to register by such Initiating
Holders; and
(ii) all other Registrable
Securities which the Company has been requested to register by the
holders thereof (such holders together with the Initiating Holders
hereinafter are referred to as the "Selling Shareholders") by written
request given to the Company within 30 days after the giving of such
written notice by the Company, all to the extent necessary to permit
the disposition of the Registrable Securities so to be registered.
It is agreed that at any time after the Company is eligible to file a
registration statement on Form S-3 (or any successor form promulgated by the
Commission), the Initiating Holders may request that the Company file a
registration statement pursuant to Rule 415 under the Securities Act to permit
the offering of the Registrable Securities on a delayed or continuous basis;
provided, however, that no such offerings of the Registrable Securities may
include more than 10% of the issued and outstanding Common Stock at any time. It
is understood that an Initiating Holder may request a registration under this
Section 2.1(a) for the benefit of the other Initiating Holders or the other
holders of Registrable Securities and that such Initiating Holder shall not be
required to include any Registrable Securities held by it in any registration
requested by it under this Section 2.1(a).
(b) Registration of Other Securities.
Whenever the Company shall effect a registration pursuant to this Section 2.1,
no securities other than Registrable Securities shall be included among the
securities covered by such registration unless the Selling Shareholders holding
not less than a majority of the Registrable Securities to be included by such
registration shall have consented in writing to the inclusion of such other
securities.
(c) Registration Statement Form.
Registrations under this Section 2.1 shall be on such appropriate registration
form of the Commission as shall be reasonably selected by the Company.
(d) Effective Registration Statement. A
registration requested pursuant to this Section 2.1 shall not be deemed to have
been effected unless a registration statement with respect thereto has become
effective and remained effective in compliance with the provisions of the
Securities Act with respect to the disposition of all Registrable Securities
covered by such registration statement until such time as all of such
Registrable Securities have been disposed of in accordance with the intended
methods of disposition by the seller or sellers thereof set forth in such
registration statement (unless the failure to so dispose of such Registrable
Securities shall be caused solely by reason of a failure on the part of the
Selling Shareholders), provided, that, except with respect to any registration
statement filed pursuant to Rule 415 under the Securities Act, such period need
not exceed 270 days.
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(e) Selection of Underwriters. The
underwriter or underwriters of each underwritten offering of the Registrable
Securities so to be registered shall be selected by Selling Shareholders holding
more than a majority of the Registrable Securities to be included in such
registration and shall be reasonably acceptable to the Company (it being
understood that any of the managing underwriters from the Initial Public
Offering shall be deemed acceptable to the Company).
(f) Priority Requested Registration. If
the managing underwriter of any underwritten offering shall advise the Company
in writing (and the Company shall so advise each Selling Shareholder of
Registrable Securities requesting registration of such advice) that, in its
opinion, the number of securities requested to be included in such registration
exceeds the number which can be sold in such offering within a price range
acceptable to the Selling Shareholders of a majority of the Registrable
Securities requested to be included in such registration, the Company, except as
provided in the following sentence, will include in such registration, to the
extent of the number and type of securities which the Company is so advised can
be sold in such offering, first, Registrable Securities requested to be included
in such registration, pro rata (based on the number of Registrable Securities
held by each of the Selling Shareholders) among the Selling Shareholders
requesting such registration, and second, all securities proposed to be sold by
the Company for its own account or for the account of a Person other than a
holder of Registrable Securities. Notwithstanding the foregoing, if the total
number of Registrable Securities requested to be included in any registration
cannot be included, the Selling Shareholders holding not less than a majority of
the Registrable Securities with respect to which registration has been
requested, shall have the right to withdraw the request for registration by
giving written notice to the Company within 20 days after receipt of the notice
from the managing underwriter described above by the Company and, in the event
of such withdrawal, such request shall not be counted for purposes of the
requests for registration to which holders of Registrable Securities are
entitled pursuant to this Section 2.1. If a request for registration is
withdrawn pursuant to the immediately preceding sentence and at least 90% of
each class of the Registrable Securities requested to be included in such
withdrawn registration could have been included therein, then, at the election
of the Selling Shareholders holding not less than a majority of the Registrable
Securities with respect to which registration has been requested, the
Registration Expenses incurred by the Company in connection with such withdrawn
registration shall be reimbursed by the Selling Shareholders, pro rata (based on
the number of Registrable Securities requested to be included therein) among the
Selling Shareholders or for the account of a person other than a holder of
Registrable Securities.
(g) Limitations on Registration
Requests. Notwithstanding anything in this Section 2.1 to the contrary, in no
event will the Company be required to (i) effect more than one registration
requested pursuant to Section 2.1(a)(y) by any Principal Stockholder (or in the
aggregate three such registrations), (ii) effect a registration pursuant to this
Section 2.1 within the
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12-month period occurring immediately subsequent to the effectiveness (within
the meaning of Section 2.1(d)) of a registration statement filed pursuant to
this Section 2.1, unless the Company determines that effecting a second
registration within the 12-month period is not likely to have a material adverse
effect on the market price of the Common Stock, or (iii) effect a registration
pursuant to Section 2.1 covering Registrable Securities with an aggregate
offering price of less than $15 million.
(h) Expenses. The Company will pay all
Registration Expenses in connection with any registrations requested pursuant to
this Section 2.1.
2.2 Piggy-back Registration.
(a) Right to Include Registrable
Securities. If the Company at any time proposes to register any of its Common
Stock under the Securities Act by registration on any form other than Forms S-4
or S-8, whether or not for sale for its own account, it will each such time give
prompt written notice to all registered holders of Registrable Securities of its
intention to do so and of such holders' rights under this Section 2.2. Upon the
written request of any such holder (a "Requesting Holder") made as promptly as
practicable and in any event within 30 days after the receipt of any such notice
from the Company (which request shall specify the Registrable Securities
intended to be disposed of by such Requesting Holder and the selling prices
which are acceptable to such Requesting Holder), the Company will use its best
efforts to effect the registration under the Securities Act of all Registrable
Securities which the Company has been so requested to register by the Requesting
Holders thereof; provided, that prior to the effective date of the registration
statement filed in connection with such registration, immediately upon
notification to the Company from the managing underwriter of the price at which
such securities are to be sold, if such price is below the price which any
Requesting Holder shall have indicated to be acceptable to such Requesting
Holder, the Company shall so advise such Requesting Holder of such price, and
such Requesting Holder shall then have the right to withdraw its request to have
its Registrable Securities included in such registration statement; and
provided, further, however, that if, at any time after giving written notice of
its intention to register any securities and prior to the effective date of the
registration statement filed in connection with such registration, the Company
shall determine for any reason not to register or to delay registration of such
securities, the Company shall give written notice of such determination to each
Requesting Holder of Registrable Securities and (x) in the case of a
determination not to register, shall be relieved of its obligation to register
any Registrable Securities in connection with such registration (but not from
any obligation of the Company to pay the Registration Expenses in connection
therewith), without prejudice, however, to the rights of any holder or holders
of Registrable Securities entitled to do so to cause such registration to be
effected as a registration under Section 2.1, and (y) in the case of a
determination to delay registering, shall be permitted to delay registering any
Registrable Securities, for the same period as the delay in registering such
other
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securities. No registration effected under this Section 2.2 shall relieve the
Company of its obligation to effect any registration upon request under Section
2.1.
(b) Priority in Piggy-back
Registrations. If the managing underwriter of any underwritten offering shall
inform the Company by letter of its opinion that the number or type of
Registrable Securities requested to be included in such registration would
materially adversely affect such offering, and the Company has so advised the
Requesting Holder in writing, then the Company will include in such
registration, to the extent of the number and type of securities which the
Company is so advised can be sold in (or during the time of) such offering,
first, all securities proposed by the Company to be sold for its own account or
for the account of a Person other than a holder of Registrable Securities, and
second, such Registrable Securities requested to be included in such
registration pursuant to this Agreement, pro rata (based on the number of
Registrable Securities requested to be included by each Requesting Holder) among
such Requesting Holders.
(c) Expenses. The Company will pay all
Registration Expenses in connection with any registration contemplated pursuant
to this Section 2.2.
(d) Initial Public Offering. The
Initial Public Offering shall be a registration contemplated by and subject to
this Section 2.2, except that the Company shall not be required to provide
written notice of its intention to register Common Stock in connection with the
Initial Public Offering nor shall any Requesting Holder be required to give
written notice of its intention to participate in the Initial Public Offering
(it being deemed that each of the Principal Stockholders who wish to participate
in the Initial Public Offering have given such notice to the Company).
2.3 Registration Procedures. If and when-ever
the Company is required to use its best efforts to effect the registration of
any Registrable Securities under the Securities Act as provided in Sections 2.1
and 2.2, the Company will, as expeditiously as possible:
(i) prepare and (within 90 days after
the end of the period within which requests for registration may be
given to the Company) file with the Commission the requisite
registration statement to effect such registration and thereafter use
its best efforts to cause such registration statement to become
effective; provided, however, that the Company may discontinue any
registration of its securities which are not Registrable Securities
(and, under the circumstances specified in Section 2.2(b), Registrable
Securities) at any time prior to the effective date of the registration
statement relating thereto;
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(ii) prepare and file with the Commission
such amendments and supplements to such registration statement and the
prospectus used in connection therewith as may be necessary to keep
such registration statement effective in accordance with Section 2.1(d)
hereof and to comply with the provisions of the Securities Act with
respect to the disposition of all Registrable Securities covered by
such registration statement until such time as all of such Registrable
Securities have been disposed of in accordance with the intended
methods of disposition by the seller or sellers thereof set forth in
such registration statement; provided, that except with respect to any
such registration statement filed pursuant to Rule 415 under the
Securities Act, such period need not exceed 270 days;
(iii) furnish to each seller of
Registrable Securities, such number of conformed copies of such
registration statement and of each such amendment and supplement
thereto (in each case including all exhibits), such number of copies of
the prospectus contained in such registration statement (including each
preliminary prospectus and any summary prospectus) and any other
prospectus filed under Rule 424 under the Securities Act, in conformity
with the requirements of the Securities Act, and such other documents,
as such seller may reasonably request;
(iv) make any filings (if any) required
under the blue sky or securities laws of such States of the United
States of America as the sellers of Registrable Securities covered by
such Registration Statement shall reasonably request;
(v) furnish at the effective date of
such registration statement to each seller of Registrable Securities,
and its underwriters, a signed counterpart of:
(x) an opinion of counsel for
the Company, dated the effective date of such registration
statement and, if applicable, the date of the closing under
the underwriting agreement, and
(y) a "comfort" letter signed
by the independent public accountants who have certified the
Company's financial statements included or incorporated by
reference in such registration statement,
covering substantially the same matters with respect to such
registration statement (and the prospectus included therein) and, in
the case of the accountants' comfort letter, with respect to events
subsequent to the date of such financial statements, as are customarily
covered in opinions of issuer's counsel and in accountants' comfort
letters delivered to the underwriters in underwritten public offerings
of securities and, in the case of the accountants' comfort letter, such
other financial matters, and, in the case of the legal
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opinion, such other legal matters, as counsel for the seller or sellers
of Registrable Securities may reasonably request;
(vi) notify each seller of Registrable
Securities at any time when a prospectus relating thereto is required
to be delivered under the Securities Act, upon discovery that, or upon
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 any material fact
required to be stated therein or necessary to make the statements
therein not misleading, in the light of the circumstances under which
they were made, and at the request of any such seller promptly prepare
and furnish to it a reasonable number of copies of 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 the light of
the circumstances under which they were made;
(vii) otherwise use its best efforts to
comply with all applicable rules and regulations of the Commission, and
make available to its security holders, as soon as reasonably
practicable (but not more than eighteen months after the effective date
of such registration statement), an earnings statement covering the
period of at least twelve months beginning with the first full calendar
month after the effective date of such registration statement, which
earnings statement shall satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 promulgated thereunder;
(viii) provide and cause to be maintained a
transfer agent and registrar (which, in each case, may be the Company)
for all Registrable Securities covered by such registration statement
from and after a date not later than the effective date of such
registration;
(ix) use its best efforts to list all
Registrable Securities covered by such registration statement on any
national market or national securities exchange on which Registrable
Securities of the same class covered by such registration statement are
then listed and, if no such Registrable Securities are so listed, on
any national market or national securities exchange on which the Common
Stock is then listed;
(x) the extent reasonably requested by
the managing underwriter of any underwritten offering, send appropriate
officers of the Company to attend "road shows" scheduled in connection
with any such registration; and
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(xi) furnished unlegended certificates
representing ownership of the Registrable Securities being sold in such
denominations as shall be requested by the sellers of Registrable
Securities or the underwriters.
The Company may require each seller of Registrable Securities as to which any
registration is being effected to furnish the Company (i) such information
regarding such seller and the distribution of such securities as the Company may
from time to time reasonably request in writing and (ii) if requested by the
Company, an executed custody agreement and power of attorney in form and
substance reasonably satisfactory to the Company with respect to the Registrable
Securities to be registered pursuant to this Agreement.
Each holder of Registrable Securities agrees that, upon
receipt of any notice from the Company of the happening of any event of the kind
described in subdivision (vi) of this Section 2.3, such holder will forthwith
discontinue such disposition of Registrable Securities pursuant to the
registration statement relating to such Registrable Securities until the receipt
of the copies of the supplemented or amended prospectus contemplated by
subdivision (vi) of this Section 2.3 and, if so directed by the Company, will
deliver to the Company (at the Company's expense) all copies, other than
permanent file copies, then in its possession of the prospectus relating to such
Registrable Securities current at the time of receipt of such notice.
2.4 Underwritten Offerings.
(a) Requested Underwritten Offerings. If
requested by the underwriters for any underwritten offering by holders of
Registrable Securities pursuant to a registration requested under Section 2.1,
the Company will enter into an underwriting agreement with such underwriters for
such offering, such agreement to be reasonably satisfactory in substance and
form to each such holder and the under writers and to contain such
representations and warranties by the Company and such other terms as are
generally prevailing in agreements of that type, including, without limitation,
indemnities to the effect and to the extent provided in Section 2.7 or such
other indemnities as are customarily received by underwriters in public
offerings of similar securities. The holder of the Registrable Securities
proposed to be distributed by such underwriters will reasonably cooperate with
the Company in the negotiation of the underwriting agreement. Such holders of
Registrable Securities to be distributed by such underwriters shall be parties
to such underwriting agreement and may, at the option of the holders of a
majority of the Registrable Securities to be distributed by such underwriters,
require that any or all of the representations and warranties by, and the other
agreements on the part of, the Company to and for the benefit of such
underwriters shall also be made to and for the benefit of such holders and that
any or all of the conditions precedent to the obligations of underwriters under
such underwriting agreement be conditions precedent to the obligations of such
holders of Registrable Securities. No holder of Registrable Securities shall be
required to make any representations or warranties to or agreements with the
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Company other than representations, warranties or agreements regarding such
holders and such holders' intended method of distribution or any other
representations required by applicable law.
(b) Incidental Underwritten Offerings.
If the Company proposes to register any of its securities under the Securities
Act as contemplated by Section 2.2 and such securities are to be distributed by
or through one or more underwriters, the Company will, if requested by any
Requesting Holder of Registrable Securities, use its best efforts to arrange for
such underwriters to include all the Registrable Securities to be offered and
sold by such Requesting Holder among the securities of the Company to be
distributed by such underwriters, subject to the provisions of Section 2.2(b).
The holders of Registrable Securities to be distributed by such underwriters
shall be parties to the underwriting agreement between the Company and such
underwriters and may, at the option of the holders of a majority of the
Registrable Securities to be distributed by such underwriters, require that any
or all of the representations and warranties by, and the other agreements on the
part of, the Company to and for the benefit of such underwriters shall also be
made to and for the benefit of such holders of Registrable Securities and that
any or all of the conditions precedent to the obligations of such underwriters
under such underwriting agreement be conditions precedent to the obligations of
such holders of Registrable Securities. Any such Requesting Holder of
Registrable Securities shall not be required to make any representations or
warranties to or agreements with the Company or the underwriters other than
representations, warranties or agreements regarding such Requesting Holder, such
Requesting Holder's Registrable Securities and such Requesting Holder's intended
method of distribution or any other representations required by applicable law.
(c) Holdback Agreements.
(i) To the extent not
inconsistent with applicable law, each holder of Registrable Securities
agrees not to effect any public sale or distribution of any Registrable
Securities of the Company, or any securities convertible into or
exchangeable or exercisable for such Registrable Securities, during the
seven days prior to and the 90 days after any registration relating to
such Registrable Securities pursuant to Section 2.1 or 2.2 has become
effective, except as part of such registration, if and to the extent
requested by the Company in the case of a non-underwritten public
offering or if and to the extent requested by the managing underwriter
or underwriters in the case of an underwritten public offering.
(ii) The Company agrees not to effect
any public sale or distribution of its Registrable Securities or
securities convertible into or exchangeable or exercisable for any of
such Registrable Securities during the seven days prior to and the 90
days after any registration relating to such Registrable Securities
pursuant to Section 2.1 or 2.2 has become effective,
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except as part of such registration and except pursuant to
registrations on Form S-4 or S-8 or any successor or similar forms
thereto; provided, however, that the provisions of this Section
2.4(c)(ii) shall not prevent the conversion or exchange of any
securities pursuant to their terms into or for other securities.
2.5 Preparation; Reasonable Investigation. In
connection with the preparation and filing of each registration statement under
the Securities Act pursuant to this Agreement, the Company will give such
holders of Registrable Securities to be registered under such registration
statement, their underwriters, if any, and their respective counsel the
opportunity to participate in the preparation of such registration statement,
each prospectus included therein or filed with the Commission, and each
amendment thereof or supplement thereto, and will give each of them such
reasonable access to its books and records and such opportunities to discuss the
business of the Company with its officers and the independent public accountants
who have certified its financial statements as shall be necessary, in the
opinion of such holders' and such underwriters' respective counsel, to conduct a
reasonable investigation within the meaning of the Securities Act.
2.6 Limitations, Conditions and Qualifications
to Obligations under Registration Covenants. The Company shall be entitled to
postpone for a reasonable period of time (but not exceeding 90 days) the filing
of any registration statement otherwise required to be prepared and filed by it
pursuant to Section 2.1 if the Company determines, in its reasonable judgment,
that such registration and offering would interfere in a material way with any
financing, acquisition, corporate reorganization or other material transaction
involving the Company and promptly gives the holders of Registrable Securities
pursuant to Section 2.1 written notice of such determination, containing a
general statement of the reasons for such postponement and an approximation of
the anticipated delay. If the Company shall so postpone the filing of a
registration statement, holders of Registrable Securities requesting
registration thereof pursuant to Section 2.1 representing not less than a
majority of the Registrable Securities with respect to which registration has
been requested, shall have the right to withdraw the request for registration by
giving written notice to the Company within 30 days after receipt of the notice
of post ponement and, in the event of such withdrawal, such request shall not be
counted for purposes of the requests for registration to which holders of
Registrable Securities are entitled pursuant to Section 2.1 hereof.
2.7 Indemnification.
(a) Indemnification by the Company. The
Company shall, and hereby does, indemnify and hold harmless, in the case of any
registration statement filed pursuant to Section 2.1 or 2.2, each seller of any
Registrable Securities and each other Person who participates as an underwriter
in the offering or sale of any securities covered by such registration statement
and each other Person, if
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any, who controls such seller or any such underwriter within the meaning of the
Securities Act or the Exchange Act, and their respective directors, officers,
partners, agents and affiliates, against any losses, claims, damages or
liabilities, joint or several, to which such seller or underwriter or any such
director, officer, partner, agent, affiliate or controlling person may become
subject under the Securities Act or otherwise, including, without limitation,
the reasonable fees and expenses of legal counsel, insofar as such losses,
claims, damages or liabilities (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in any
registration statement under which such Registrable Securities were registered
under the Securities Act, any preliminary prospectus, final prospectus or
summary prospectus contained therein, or any amendment or supplement thereto, or
any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
the Company will reimburse such seller or underwriter and each such director,
officer, partner, agent, affiliate and controlling person for any reasonable
legal or any other expenses incurred by them in connection with investigating or
defending any such loss, claim, liability, action or proceeding; provided,
however, that the Company shall not be liable in any such case to the extent
that any such loss, claim, damage, liability (or action or proceeding in respect
thereof) or expense arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in such
registration statement, any such preliminary prospectus, final prospectus,
summary prospectus, amendment or supplement thereto in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
such seller or underwriter, as the case may be, specifically stating that it is
for use in the preparation thereof; and provided, further, that the Company
shall not be liable in any such case to the extent that any such loss, claim,
damage, liability (or action or proceeding in respect thereof) or expense arises
out of or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in such registration statement, any such
preliminary prospectus, final prospectus or summary prospectus, amendment or
supplement thereto if (i) such untrue statement or omission or alleged untrue
statement or omission is completely corrected in a prospectus or prospectus
supplement or in an amendment or supplement to such prospectus or prospectus
supplement, (ii) the seller of Registrable Securities or the underwriter of
Registrable Securities, as the case may be, has an obligation under the
Securities Act to deliver a prospectus or prospectus supplement in connection
with such sale of Registrable Securities and (iii) the seller of Registrable
Securities or the underwriter of Registrable Securities, as the case may be,
thereafter fails to deliver such prospectus or prospectus supplement or such
amendment or supplement to such prospectus or prospectus supplement prior to or
concurrently with the sale of Registrable Securities to the person asserting
such loss, claim, damage, liability or expense after the Company has furnished
the seller of Registrable Securities or the underwriter of Registrable
Securities, as the case may be, with a sufficient number of copies of the same.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of such seller or underwriter or any such
14
director, officer, partner, agent, affiliate or controlling person and shall
survive the transfer of such securities by such seller or underwriter.
(b) Indemnification by the Sellers. As
a condition to including any Registrable Securities in any registration
statement, the Company shall have received an undertaking reasonably
satisfactory to it from the prospective seller of such Registrable Securities to
indemnify and hold harmless (in the same manner and to the same extent as set
forth in Section 2.7(a)) the Company, and each director of the Company, each
officer of the Company who signs the registration statement and each other
Person, if any, who participates as an underwriter in the offering or sale of
such securities and each other Person who controls the Company or any such
underwriter within the meaning of the Securities Act or the Exchange Act, with
respect to any statement or alleged statement in or omission or alleged omission
from such registration statement, any preliminary prospectus, final prospectus
or summary prospectus contained therein, or any amendment or supplement thereto,
if such statement or alleged statement or omission or alleged omission was made
in reliance upon and in conformity with written information furnished to the
Company by such seller specifically stating that it is for use in the
preparation of such registration statement, preliminary prospectus, final
prospectus, summary prospectus, amendment or supplement; provided, however, that
the liability of such indemnifying party under this Section 2.7(b) shall be
limited to the amount of proceeds received by such indemnifying party in the
offering giving rise to such liability. Such indemnity shall remain in full
force and effect, regardless of any investigation made by or on behalf of the
Company or any such director, officer or controlling person and shall survive
the transfer of such securities by such seller.
(c) Notices of Claims, etc. Promptly
after receipt by an indemnified party of notice of the commencement of any
action or proceeding involving a claim referred to in Section 2.7(a) or (b),
such indemnified party shall, if a claim in respect thereof is to be made
against an indemnifying party, give written notice to the latter of the
commencement of such action; provided, however, that the failure of any
indemnified party to give notice as provided herein shall not relieve the
indemnifying party of its obligations under the preceding subdivisions of this
Section 2.7, except to the extent that the indemnifying party is actually and
materially prejudiced by such failure to give notice. In case any such action
shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it may wish, to assume
the defense thereof, with counsel reasonably satisfactory to such indemnified
party; provided, however, that any indemnified party may, at its own expense,
retain separate counsel to participate in such defense. Notwithstanding the
foregoing, in any action or proceeding in which both the Company and an
indemnified party is, or is reasonably likely to become, a party, such
indemnified party shall have the right to employ separate counsel at the
Company's expense and to control its own defense of such action or proceeding
if, in the reasonable opinion of counsel to such indemnified party, (a) there
are or may be
15
legal defenses available to such indemnified party or to other indemnified
parties that are different from or additional to those available to the Company
or (b) any conflict or potential conflict exists between the Company and such
indemnified party that would make such separate representation advisable;
provided, however, that in no event shall the Company be required to pay fees
and expenses under this Section 2.7 for more than one firm of attorneys
representing the indemnified parties (together, if appropriate, with one firm of
local counsel per jurisdiction) in any one legal action or group of related
legal actions. No indemnifying party shall be liable for any settlement of any
action or proceeding effected without its written consent, which consent shall
not be unreasonably withheld. No indemnifying party shall, without the consent
of the indemnified party, which consent shall not be unreasonably withheld,
consent to entry of any judgment or enter into any settlement which does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such indemnified party of a release from all liability in respect to such
claim or litigation or which requires action other than the payment of money by
the indemnifying party.
(d) Contribution. If the
indemnification provided for in this Section 2.7 shall for any reason be held by
a court to be unavailable to an indemnified party under Section 2.7(a) or (b)
hereof in respect of any loss, claim, damage or liability, or any action in
respect thereof, then, in lieu of the amount paid or payable under Section
2.7(a) or (b), the indemnified party and the indemnifying party under Section
2.7(a) or (b) shall contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in connection
with investigating the same), in such proportion as is appropriate to reflect
the relative fault of the Company and the prospective sellers which resulted in
such loss, claim, damage or liability, or action or proceeding in respect
thereof, with respect to the statements or omissions which resulted in such
loss, claim, damage or liability, or action or proceeding in respect thereof, as
well as any other relevant equitable considerations; provided, that for purposes
of this Section 2.7(d), no party shall be obligated to contribute to another
party any amount in excess of the amount that such party would have been
obligated to pay to such other party if the indemnity under Section 2.7(a) or
(b) were available. The relative fault shall be determined by reference to
whether an untrue statement or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the indemnifying party on one hand and the indemnified party on the
other hand, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such statement or omission,
but not by a party's stock ownership in the Company. 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. Such prospective seller's
obligations to contribute as provided in this Section 2.7(d) are several in
proportion to the relative value of their respective Registrable Securities
covered by such registration statement and not joint. In addition, no Person
shall be obligated to contribute hereunder any amounts in
16
payment for any settlement of any action or claim effected without such Person's
consent, which consent shall not be unreasonably withheld.
(e) Indemnification Payments. The
indemnification and contribution required by this Section 2.7 shall be made by
periodic payments of the amount thereof during the course of the investigation
or defense, as and when bills are received or expense, loss, damage or liability
is incurred.
3. Rule 144. The Company shall take all actions reasonably
necessary to enable holders of Registrable Securities to sell such securities
without registration under the Securities Act within the limitation of the
provisions of (a) Rule 144 under the Securities Act, as such Rule may be amended
from time to time, or (b) any similar rules or regulations hereafter adopted by
the Commission. Upon the request of any holder of Registrable Securities, the
Company will deliver to such holder a written statement as to whether it has
complied with such requirements.
4. Amendments and Waivers. This Agreement may be amended with
the consent of the Company and the Company may take any action herein
prohibited, or omit to perform any act herein required to be performed by it,
only if the Company shall have obtained the written consent to such amendment,
action or omission to act, of the holder or holders of at least a majority of
the Registrable Securities affected by such amendment, action or omission to
act. Each holder of any Registrable Securities at the time or thereafter
outstanding shall be bound by any consent authorized by this Section 4, whether
or not such Registrable Securities shall have been marked to indicate such
consent. No course of dealing between any parties or any delay on the part of
any party in exercising any rights hereunder or under any agreement contemplated
hereby shall operate as a waiver of any rights of any such party. No delay on
the part of any party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof, or shall any waiver on the part of any party
of any such right, power or privilege, nor any single or partial exercise of any
such right, power or privilege, preclude any further exercise thereof or the
exercise of any other such right, power or privilege. The rights and remedies
herein provided are cumulative and are not exclusive of any rights or remedies
that any party may otherwise have at law or in equity.
5. Transfer of Registration Rights; Termination. Any holder of
Registrable Securities may transfer all or any portion of its rights under this
Agreement to any transferee (each, a "Transferee") of an amount of Registrable
Securities owned by such holder exceeding 5% of the outstanding class of such
securities at the time of transfer; provided that no Principal Stockholder may
transfer its right to request a registration under Section 2.1(a)(y). Any
transfer of rights pursuant to this Section 5 shall be effective upon receipt by
the Company of (i) written notice from such holder stating the name and address
of any Transferee and identifying the amount of Registrable Securities with
respect to which the rights under this Agreement are being transferred and the
nature of the rights so transferred and
17
(ii) a written agreement from such Transferee to be bound by the terms of this
Agreement. The holders may exercise the rights hereunder in such priority as
they shall agree upon among themselves. The rights of any holder of Registrable
Securities under this Agreement shall terminate at such time that such holder
holds Registrable Securities representing less than 5% of the outstanding Common
Stock.
6. Nominees for Beneficial Owners. In the event that any
Registrable Securities are held by a nominee for the beneficial owner thereof,
the beneficial owner thereof may, at its election in writing delivered to the
Company, be treated as the holder of such Registrable Securities for purposes of
any request or other action by any holder or holders of Registrable Securities
pursuant to this Agreement or any determination of any number or percentage of
shares of Registrable Securities held by any holder or holders of Registrable
Securities contemplated by this Agreement. If the beneficial owner of any
Registrable Securities so elects, the Company may require assurances reasonably
satisfactory to it of such owner's beneficial ownership of such Registrable
Securities.
7. Notices. All notices, demands and other communications
provided for or permitted hereunder shall be made in writing and shall be by
registered or certified first-class mail, return receipt requested, telecopier,
courier service or personal delivery:
(a) If to SIMA at 00, Xxx xx Xxxxxxxx, XX000,
00000 Xxxxxxx Sur Seine, Cedex, France, attention: Xxxxxxx Xxxxx, Directeur
General or at such other address as SIMA shall have furnished to the Company in
the manner set forth herein;
(b) If to LWH at Xxxxxxxxx Xxxxx 0, X-0000
Xxxxxxxxxx, attention: _____________ or at such other address as LWH shall have
furnished to the Company in the manner set forth herein;
(c) If to AWI at 0X Xxx Xxxxxxxxx Xxxxx, X-0000
Xxxxxxxxxx, attention: _______________ or at such other address as AWI shall
have furnished to the Company in the manner set forth herein;
(d) If to the Company, at 0000 Xxxxxxxxxxxxxxxx
Xxxx, Xxx Xxxxxxxx, Xxx Xxxx 00000, attention: Xxxxxx X. Xxxxxxx, Vice
President, Secretary and Chief Legal Counsel or at such other address as the
Company shall have furnished to each holder of Registrable Securities at that
time outstanding in the manner set forth herein; or
(e) If to any other holder of Registrable
Securities, at the address that such holder shall have furnished to the Company
in writing in the manner set forth herein, or, until such holder so furnishes to
the company an address, then to
18
and at the address of the last holder of such Registrable Securities who has
furnished an address to the Company.
All such notices and communications shall be deemed to have
been duly given: when delivered by hand, if personally delivered; when delivered
by a courier, if delivered by overnight courier service; three business days
after being deposited in the mail, postage prepaid, if mailed; and when receipt
is acknowledged, if telecopied.
8. Successors and Assigns; Third Parties.
(a) Subject to Section 5, this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns. Except by operation of law, this
agreement shall not be assigned by the Company without the prior written consent
of the holders of a majority of the Registrable Securities outstanding at the
time such consent is required.
(b) Nothing in this Agreement, expressed or
implied, is intended or shall be construed to confer upon any Person (other than
the parties and their successors and permitted assigns and any Person entitled
to the benefit of Section 2.7) any right, remedy or claim under or by reason of
this Agreement.
9. No Inconsistent Agreements. The Company will not hereafter
enter into any agreement with respect to its securities which is inconsistent
with the rights granted to the holders of Registrable Securities in this
Agreement. Without limiting the generality of the foregoing, the Company will
not hereafter enter into any agreement with respect to its securities which
grants to any holder of its securities in connection with a piggy-back
registration of such securities equal or higher priority to the rights granted
to the holders of Registrable Securities under Section 2.
10. Remedies. Each holder of Registrable Securities, 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. The Company agrees that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by it of the
provisions of this Agreement and hereby agrees to waive the defense in any
action for specific performance that a remedy at law would be adequate.
11. Severability. If any term or provision of this Agreement
is held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms and provisions set forth herein shall
remain in full force and effect and shall in no way be affected, impaired or
invalidated, and the parties hereto shall use their best efforts to find and
employ an alternative means to achieve the same or substantially the same result
as that contemplated by such term or provision.
19
12. Calculation of Percentage Interests in Registrable
Securities. For purposes of this Agreement, all references to a percentage of
the Registrable Securities shall be calculated based upon the number of shares,
warrants or rights or the aggregate principal amount of Registrable Securities
outstanding at the time such calculation is made.
13. 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 the 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. This Agreement supersedes all prior agreements and understandings
between the parties with respect to such subject matter.
14. Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
15. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York, without
regard to principles of conflicts of law.
16. 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
20
be deemed an original and all of which taken together shall constitute one and
the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered as of the date first above written.
SOCIETE INDUSTRIELLE DE
MATERIAUX AVANCES
By:
-----------------------
Name:
Title:
LWH HOLDING S.A.
By:
-----------------------
Name:
Title:
ADVANCED MATERIALS
INVESTMENT HOLDING S.A.
By:
-----------------------
Name:
Title:
SPECIAL METALS CORPORATION
By:
-----------------------
Name:
Title:
