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EXHIBIT 4.26
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "AGREEMENT") is made and
entered into as of the 14th day of July, 1998, by and between Metal Management,
Inc., a Delaware corporation (the "COMPANY"), and Midwest Metallics, L.P., an
Illinois limited partnership (the "SHAREHOLDER").
RECITALS:
A. Pursuant to the Asset Purchase Agreement (the "PURCHASE AGREEMENT")
dated as of July 14, 1998, by and among Xxxxx Iron & Metal, Inc., an Illinois
corporation, the Shareholder and National Material, L.P., the Shareholder
received from the Company 362,088 shares of the Company's common stock, par
value $.01 per share (the "COMMON STOCK").
B. Pursuant to the terms of this Agreement, the Company has agreed to
register 362,088 shares of Common Stock of the Shareholder, which represent all
the shares of the Common Stock (collectively, the "REGISTRABLE SECURITIES")
issued to the Shareholder in connection with the Purchase Agreement.
C. All terms which are capitalized and used without definition herein
shall have the meanings ascribed to such terms in the Purchase Agreement.
NOW THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the parties hereto agree as follows:
1. Mandatory Registration.
(a) The Company shall, as promptly as practicable, but in any
event within 45 days from the date hereof, prepare and file at the Company's
sole cost and expense (other than any fees and disbursements of counsel for the
Shareholder and the underwriting discounts, if any, payable in respect of the
Registrable Securities sold by the Shareholder) one "shelf" registration
statement (the "REGISTRATION STATEMENT") with the Securities and Exchange
Commission (the "COMMISSION") on the appropriate form pursuant to Rule 415 of
the Securities Act of 1933, as amended (the "SECURITIES ACT") covering the
resale of the Registrable Securities. In no event shall the Company be required
to file more than one Registration Statement.
The Company will use commercially reasonable efforts through its
officers, directors, auditors and counsel to cause such Registration Statement
to become effective as promptly as practicable following the filing thereof, but
in no event later than the 150th day after the date hereof.
(b) In connection with the registration described in Section 1(a),
the Company shall, if required by the law of any such state, use commercially
reasonable efforts to cause the Registrable Securities so registered to be
registered or qualified for sale under the securities or blue
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sky laws of such states as the Shareholder may reasonably request to permit the
resale of the Registrable Securities in such states; provided, however, that the
Company shall not be required to qualify to do business in any state by reason
of this Section 1(b) in which it is not otherwise required to qualify to do
business.
(c) The Company shall keep effective any registration or
qualification contemplated by this Section 1 and shall from time to time amend
or supplement each applicable registration statement, preliminary prospectus,
final prospectus, application, document and communication for such period of
time as shall be required to permit the Shareholder to complete the offer and
sale of the Registrable Securities, subject to the following sentence. The
Company shall keep such registration or qualification in effect until the
earliest of: (i) the first anniversary of the date that the Registration
Statement was declared effective, (ii) the first date upon which the Shareholder
is free to sell all of such Registrable Securities under Rule 144 of the
Securities Act or (iii) the date that the Shareholder has sold or otherwise
transferred all the Registrable Securities under the Registration Statement,
pursuant to Rule 144 under the Securities Act or otherwise.
(d) In connection with the registration described in Section 1(a),
the Company shall furnish to the Shareholder such reasonable number of copies of
the Registration Statement and of each amendment and supplement thereto (in each
case, including all exhibits), such reasonable number of copies of each
prospectus contained in such Registration Statement and each supplement or
amendment thereto (including each preliminary prospectus), all of which shall
conform to the requirements of the Securities Act and the rules and regulations
thereunder, and such other documents, as the Shareholder may reasonably request
to facilitate the disposition of the Registrable Securities included in such
registration.
(e) The Company agrees that until all the Registrable Securities
have been sold under a registration statement or pursuant to Rule 144 under the
Securities Act, it shall use commercially reasonable efforts to keep current in
filing all reports, statements and other materials required to be filed with the
Commission to permit holders of the Registrable Securities to sell such
securities under Rule 144 of the Securities Act.
(f) The Company shall notify the Shareholder promptly when such
Registration Statement and any amendments and supplements thereto have become
effective or any supplements to any prospectus forming a part of such
Registration Statement have been filed, except for such amendments or
supplements arising by reason of the making of filings under the Securities
Exchange Act of 1934, as amended. The Company shall notify the Shareholder
promptly of the happening of any event as a result of which the prospectus
included in such Registration Statement, as then in effect, includes an untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in
light of the circumstances then existing. The Shareholder agrees that upon
receipt of any notice from the Company of the happening of any event of the kind
described in the second sentence of this Section 1(f), the Shareholder will
forthwith discontinue disposition of such Registrable Securities covered by such
Registration Statement or prospectus until the Shareholder (i) receives copies
of a supplemented or
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amended prospectus and has been advised in writing by the Company that such
supplemented or amended prospectus may be used, or (ii) is advised in writing by
the Company that the use of the applicable prospectus may be resumed. If so
directed by the Company, the Shareholder will deliver to the Company all copies,
other than permanent file copies, then in the Shareholder's possession, of the
prospectus covering such Registrable Securities current at the time of receipt
of the notice referred to in the immediately preceding sentence.
(g) The Company shall notify the Shareholder promptly of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement. If at any time the Company shall receive any such order,
the Company shall use commercially reasonable efforts to obtain the withdrawal
or lifting of such order at the earliest possible time. The Shareholder agrees
that upon receipt of any notice from the Company of the happening of any event
of the kind described in this Section 1(g), the Shareholder will forthwith
discontinue disposition of such Registrable Securities covered by any
Registration Statement or prospectus until such order has been withdrawn or
lifted.
(h) The Company shall use commercially reasonable efforts to have
the Registrable Securities included for quotation on the Nasdaq National Market,
or on such other national securities exchange on which the Company's Common
Stock may be listed from time to time.
(i) In connection with the registration of Registrable Securities
pursuant to a Registration Statement, the Shareholder shall furnish to the
Company such information regarding himself and the intended method of
disposition of Registrable Securities as the Company shall reasonably request in
order to effect the registration thereof .
2. Shareholder Representations.
(a) Restricted Securities. The Shareholder understands that: (i)
the Registrable Securities have not been registered under the Securities Act or
under any state securities laws; (ii) the Registrable Securities are being
offered and issued in reliance upon federal and state exemptions for
transactions not involving any public offering; (iii) a "stop transfer" order
will be placed against the certificates representing shares of Common Stock
issued pursuant to the Purchase Agreement; and (iv) certificates shall bear on
their face the following legend:
"The shares evidenced by this certificate have not been registered
under the Securities Act of 1933, as amended, or any applicable state
securities laws, and any transfer hereof is subject to compliance with
all applicable federal and state securities laws and regulations."
(b) Transfer of Registrable Securities The Shareholder hereby
agrees that the Registrable Securities are transferable only pursuant to (a)
public offerings registered under the Securities Act, (b) Rule 144 of the
Securities Act (or any similar rule or rules then in force) if
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such rule is available, and (c) subject to the conditions specified in this
Section 2(b), any other legally available means of transfer. In connection with
the transfer of any of the Registrable Securities (other than a transfer
pursuant to a registered public offering of shares of Common Stock described
herein), the Shareholder shall deliver written notice to the Company describing
in reasonable detail the transfer or proposed transfer, together with an opinion
of securities counsel (with such opinion and such counsel being reasonably
satisfactory to the Company and its counsel) to the effect that such transfer of
Registrable Securities may be effected without registration of such Registrable
Securities under the Securities Act. In addition, if the Shareholder delivers to
the Company such an opinion that concludes that no subsequent transfer of such
Registrable Securities will require registration under the Securities Act, the
Company shall promptly upon such contemplated transfer deliver new certificates
for such Common Stock which do not bear the restrictive legend set forth in
Section 2(a).
3. Penalty for Failure to Obtain Effectiveness. In the event that the
Registration Statement contemplated by Section 1(a) above is not declared
effective by the Commission on or before the 150th day after the date of this
Agreement, the Company agrees that the Shareholder may be inhibited in its
ability to sell the Registrable Securities and thereby realize the full economic
value of its investment contemplated by the Purchase Agreement. Accordingly, in
the event that the Registration Statement contemplated by Section 1(a) above is
not declared effective by the Commission on or before the 150th day after the
date of this Agreement, the Company agrees to pay promptly to the Shareholder
cash in the amount of the least of (A) the difference, if positive, between (i)
the closing price of the Company's Common Stock on the Nasdaq National Market on
such 150th day, and (ii) the closing price of the Company's Common Stock on the
Nasdaq National Market on the day on which such Registration Statement is
declared effective by the Commission; (B) the difference, if positive, between
(i) the closing price of the Company's Common Stock on the Nasdaq National
Market on such 150th day, and (ii) the closing price of the Company's Common
Stock on the Nasdaq National Market on the day on which such Common Stock is
sold by the Shareholder in a private sale exempt from registration under the
Securities Act (provided, that for purposes of this clause (B), such difference
shall be calculated only as to shares actually sold by the Shareholder from time
to time); and (C) the difference, if positive, between (i) the closing price of
the Company's Common Stock on the Nasdaq National Market on such 150th day, and
(ii) the closing price of the Company's Common Stock on the Nasdaq National
Market on the first anniversary of the date of this Agreement. In each case,
interest shall also be payable by the Company on the date of payment at the rate
of 8% per annum from such 150th day until the date of payment.
4. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless the
Shareholder and its officers, directors, controlling persons and affiliates from
and against any losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) to which the Shareholder may become subject
(under the Securities Act, state law, common law or otherwise) insofar as such
losses, claims, damage or liabilities (or actions or proceedings in respect
thereof) are finally determined to arise out of, or are based upon, any untrue
statement of a material fact contained in, or omission of a material fact
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from, the Registration Statement, and the Company will reimburse the Shareholder
for any legal or other expenses reasonably incurred in investigating, defending
or preparing to defend any such action, proceeding or claim to the extent that
it is finally determined that the Registration Statement contained an untrue
statement of a material fact or omitted to state a material fact; provided,
however, that the Company shall not be liable in any such case to the extent
that such loss, claim, damage or liability arises out of, or is based upon, an
untrue statement made in such Registration Statement in reliance upon and in
conformity with information furnished to the Company by or on behalf of the
Shareholder specifically for use in preparation of the Registration Statement.
The Company shall not be liable for any indemnification obligation whatsoever
under this Section 4 for any untrue statement or omission included in or omitted
from the Registration Statement, either (i) with respect to sales of Registrable
Securities made after the Company delivers a notification of the type referred
to in the second sentence of this Section 1(f), or (ii) with respect to any
untrue statement or omission included in any prospectus which statement or
omission has been corrected, in writing, by the Company and delivered to the
Shareholder before the sale from which such loss occurred.
(b) The Shareholder agrees to indemnify and hold harmless the
Company and its officers, directors, controlling persons and affiliates from and
against any losses, claims, damages or liabilities (or actions or proceedings in
respect thereof) to which the Company may become subject (under the Securities
Act, state law, common law or otherwise) insofar as such losses, claims, damages
or liabilities (or actions or proceedings in respect thereof) are finally
determined to arise out of, or are based upon, an untrue statement made in such
Registration Statement in reliance upon and in conformity with information
furnished to the Company by or on behalf of the Shareholder specifically for use
in preparation of the Registration Statement; provided, however, that the
Shareholder shall not be liable in any such case for any untrue statement
included in any prospectus which statement has been corrected, in writing, by
the Shareholder and delivered to the Company before the sale from which such
loss occurred.
(c) Promptly after receipt by an indemnified person of a notice of a
claim or the beginning of any action in respect of which indemnity is to be
sought against an indemnifying person pursuant to this Section 4, such
indemnified person shall notify the indemnifying person in writing of such claim
or of the commencement of such action, and, subject to the provisions
hereinafter stated, in case any such action shall be brought against an
indemnified person and the indemnifying person shall have been notified thereof,
the indemnifying person shall be entitled to participate therein, and, to the
extent that it shall wish, to assume the defense thereof, with counsel
reasonably satisfactory to the indemnified person. After notice from the
indemnifying person to such indemnified person of the indemnifying person's
election to assume the defense thereof, the indemnifying person shall not be
liable to such indemnified person for any legal expenses subsequently incurred
by such indemnified person in connection with the defense thereof; provided,
however, that if there exists or shall exist a conflict of interest that would
make it inappropriate in the reasonable judgment of the indemnified person for
the same counsel to represent both the indemnified person and such indemnifying
person or affiliate or any affiliate or associate thereof, the indemnified
person shall notify the indemnifying
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person, and if the indemnifying person does not promptly select new counsel, the
indemnified person shall thereafter be entitled to retain its own counsel at the
expense of such indemnifying person.
(d) If the indemnification provided for in this Section 4 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) hereof in respect of any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to therein,
then each indemnifying party shall contribute to the amount paid or payable by
such indemnified party as result of such losses, claims, damages or liabilities
(or actions in respect thereof) in such proportion as is appropriate to reflect
the relative fault of the Company on the one hand and the Shareholder on the
other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions in respect thereof), as well
as any other relevant equitable considerations. The relative fault shall be
determined by reference to, among other things, whether the untrue statement of
a material fact or the omission to state a material fact relates to information
supplied by the Company on the one hand or the Shareholder on the other and the
parties= relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the Shareholder
agree that it would not be just and equitable if contribution pursuant to this
subsection (d) were determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable considerations referred
to above in this subsection (d). The amount paid or payable by an indemnified
party as a result of the losses, claims, damages, or liabilities (or actions in
respect thereof) referred to above in this subsection (d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim. 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.
5. Miscellaneous.
(a) Remedies. In the event of a breach by the Company of its
obligations under this Agreement, Shareholder, in addition to the provisions of
Section 3 above, will be entitled to specific performance of its rights under
this Agreement.
(b) Agreements and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, unless such amendment, modification or supplement is in writing
and signed by the parties hereto.
(c) Notices. All notices and other communications provided for or
permitted hereunder shall be made in accordance with the provision of the
Purchase Agreement.
(d) Successors and Assigns. This Agreement may not be assigned by
either party hereto, without the written consent of the other party hereto,
which shall not be unreasonably withheld (any such permitted assignment to be
accompanied by a written assumption by such assignee of Shareholder's
obligations hereunder). Any assignment to National Material, L.P. shall not
require the consent of the Company. In the event of any such permitted
assignment, this Agreement shall inure to the benefit of and be binding upon the
successors and assigns of each of the parties.
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(e) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(f) Headings. The headings in this Agreement are for convenience of
references only and shall not limit or otherwise affect the meaning hereof.
(g) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Illinois without reference to its
conflicts of law provisions.
(h) Severability. In the event that any one or more of the
provisions contained herein, or the application hereof in any circumstance is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provisions contained herein shall not be affected or
impaired thereby.
(i) Entire Agreement. This Agreement constitutes the full and
complete understanding and agreement of the parties hereto and supersedes all
prior understandings and agreements of the parties hereto, whether oral or
written, as to the subject matter hereof.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date first written above.
METAL MANAGEMENT, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
Chief Executive Officer
MIDWEST METALLICS, L.P.
By: S. D. Metals, Inc., its general partner
By: /s/ Xxxxxxx Xxxx
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Title: President
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