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EXHIBIT 10.12
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "AGREEMENT") is made and
entered into as of the 2nd day of November, 1998, by and among Metal Management,
Inc., a Delaware corporation (the "COMPANY"), and the holders listed on the
signature pages hereto (each a "SELLER" and collectively, the "SELLERS").
RECITALS:
A. Pursuant to an Agreement and Plan of Merger dated as of November 2,
1998 (the "FPX MERGER AGREEMENT"), by and among the Company, FPX, Inc., a
Tennessee corporation, Xxxx X. Xxxxxxx, Xxxxx X. Xxxxxx, Xxxxx X. Xxxxxx, Xxxxx
Xxxxxxx and FPX Mergeco, Inc., a Tennessee corporation, and pursuant to an Asset
Purchase Agreement dated as of November 2, 1998 (the "STCC PURCHASE AGREEMENT")
by and among the Company, Southern Tin Compress Corporation, a Tennessee
corporation and certain of the Sellers, Sellers received from the Company shares
of the Company's Series C Preferred Stock, par value $.01 per share (the
"PREFERRED STOCK"). The Preferred Stock is convertible into shares of the
Company's common stock, par value $.01 per share (the "COMMON STOCK"), pursuant
to the Certificate of Designations, Preferences and Rights establishing the
Preferred Stock (the "CERTIFICATE OF DESIGNATION"). All terms which are
capitalized and used without definition herein shall have the meanings ascribed
to such terms in the FPX Merger Agreement and the STCC Purchase Agreement.
B. As a condition precedent to the closing of the transactions
contemplated by the FPX Merger Agreement and STCC Purchase Agreement, the
Company agreed to grant to the Sellers certain registration rights with respect
to the shares of Common Stock issuable by the Company upon conversion of the
Preferred Stock.
C. Xxxxx X. Xxxxxx, Xxxxx X. Xxxxxx and Xxxxxxx Consulting L.L.C. are
each receiving Warrants from the Company, pursuant to which they have a right to
receive shares of Common Stock, and the Company has agreed to grant each of such
warrant holders certain registration rights with respect to a portion of such
shares of Common Stock.
NOW THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the parties hereto agree as follows:
1. For purposes of this Agreement, the following terms shall have the
meanings set forth below:
(a) "DIVIDEND PAYMENT SHARES" means the shares of Common Stock, if
any, issued by the Company as dividends in respect of the Preferred Stock in
accordance with the Certificate of Designation;
(b) "ELIGIBLE HOLDER" means each of the Sellers (or its assigns) to
the extent it (or its assigns) then holds any Registrable Securities;
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(c) "REGISTER," "REGISTERED" and "REGISTRATION" refer to a
registration effected by preparing and filing a registration statement or
statements in compliance with the Securities Act of 1933, as amended (the
"SECURITIES ACT"), and pursuant to Rule 415 under the Securities Act ("RULE
415") or any successor rule providing for the offering of securities on a
continuous basis ("REGISTRATION STATEMENT"), and the declaration or ordering of
effectiveness of the Registration Statement by the Securities and Exchange
Commission (the "COMMISSION");
(d) "REGISTRABLE SECURITIES" shall mean (i) the shares of Common
Stock issued or issuable either upon conversion of the Preferred Stock or
otherwise in accordance with the Certificate of Designation, (ii) the Dividend
Payment Shares, (iii) the Warrant Shares and (iv) any shares of capital stock of
the Company issued or issuable from time to time (with any adjustments) in
replacement of, in exchange for or otherwise in respect of such shares
referenced in (i), (ii) and (iii);
(e) "WARRANT SHARES" refer collectively to (i) with respect to
Xxxxxxx Consulting, L.L.C., all of the shares of Common Stock which may be
acquired pursuant to the exercise of its Warrant dated the date hereof in the
amount of 172,880 shares of Common Stock, (ii) with respect to Xxxxx X. Xxxxxx,
all of the shares of Common Stock which may be acquired pursuant to the exercise
of his Warrant dated the date hereof in the amount of 51,060 shares of Common
Stock, and (iii) with respect to Xxxxx X. Xxxxxx, all of the shares of Common
Stock which may be acquired pursuant to the exercise of his Warrant dated the
date hereof in the amount of 51,060 shares of Common Stock;
2. Mandatory Registration.
(a) On or before November 2, 1999 (the "FILING DEADLINE"), the
Company shall prepare and file a Registration Statement on Form S-3 (or, if Form
S-3 is not available, on such form of Registration Statement as is then
available to effect a registration of the Registrable Securities as a "shelf"
registration statement under rule 415) covering the resale of (i) the number of
shares of Common Stock which would be issuable if the Preferred Shares were
converted into shares of Common Stock at a conversion price of $9.00, and (ii)
the Warrant Shares. The Registration Statement shall also state, to the extent
permitted by Rule 416 under the Securities Act, that it also covers the Dividend
Payment Shares.
(b) Upon a registration pursuant to the provisions of this Section
2, the Company shall use reasonable commercial efforts to cause the Registrable
Securities so registered to be registered or qualified for sale under the
securities or blue sky laws of such jurisdictions as the Eligible Holder may
reasonably request; provided, however, that the Company shall not be required to
qualify to do business in any state by reason of this Section 2 in which it is
not otherwise required to qualify to do business.
(c) The Company shall use reasonable commercial efforts to keep
effective any registration or qualification contemplated by this Section 2 and
shall from time to time amend or supplement each applicable registration
statement, preliminary prospectus, final prospectus,
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application, document and communication for such period of time as shall be
required to permit the Eligible Holder to complete the offer and sale of the
Registrable Securities covered thereby. The Company shall in no event be
required to keep any such registration or qualification in effect for a period
in excess of the earlier to occur of (i) nine (9) months from the date on which
the Eligible Holders are first free to sell all Registrable Securities under
Rule 144 of the Securities Act, and (ii) three (3) years from the date of filing
the registration statement; provided, however, that, if the Company is required
to keep any such registration or qualification in effect with respect to
securities other than the Registrable Securities beyond such period, the Company
shall keep such registration or qualification in effect as it relates to the
Registrable Securities for so long as such registration or qualification remains
or is required to remain in effect in respect of such other securities.
(d) In the event of a registration pursuant to the provisions of
this Section 2, the Company shall furnish to each Eligible Holder such number of
copies of the registration statement and of each amendment and supplement
thereto (in each case, including all exhibits), such reasonable number of copies
of each prospectus contained in such registration statement and each supplement
or amendment thereto (including each preliminary prospectus), all of which shall
conform to the requirements of the Securities Act and the rules and regulations
thereunder, and such other documents, as any Eligible Holder may reasonably
request to facilitate the disposition of the Registrable Securities included in
such registration.
(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 reasonable commercial 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.
(f) The Company shall notify each Eligible Holder promptly when
such registration statement has become effective or a supplement to any
prospectus forming a part of such registration statement has been filed;
provided, however, that the Company shall be under no obligation to notify the
Eligible Holders of the filing of any annual, quarterly or periodic report filed
by the Company pursuant to the Securities Exchange Act of 1934, as amended. The
Company shall notify the Eligible Holder promptly of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then existing,
and use its best efforts to promptly update and/or correct such prospectus;
provided, however, that the Company shall not be required to update and/or
correct such prospectus if, and so long as, the Board of Directors of the
Company determines in good faith that to do so at such time would be detrimental
to the business or prospects of the Company. Any such period (beginning upon
notification of the Eligible Holder) in which the prospectus remains not updated
or corrected is herein referred to as a "STANDSTILL PERIOD."
(g) The Company shall notify the Eligible Holder of the issuance by
the Commission of any stop or other order suspending the effectiveness of the
registration statement. If at any time the Company shall receive any such order,
the Company shall use its best efforts to
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obtain the withdrawal or lifting of such order at the earliest possible time;
provided, however, that the Company shall not be required to obtain the
withdrawal or lifting of such order if, and so long as, the Board of Directors
of the Company determines in good faith that to do so at such time would be
detrimental to the business or prospects of the Company.
(h) The Filing Deadline shall be extended by the number of days
during any period in which the Company has been advised by its outside counsel
that the registration statement will not be accepted for filing by the
Commission as a result of the Company then having on file a registration
statement which has not yet gone effective or a proxy statement that is then
being reviewed by the Commission.
(i) In connection with the registration of Registrable Securities
pursuant to a registration statement, each Eligible Holder shall: (i) furnish to
the Company such information regarding itself and the intended method of
disposition of Registrable Securities as the Company shall reasonably request in
order to effect the registration thereof; and (ii) upon receipt of any notice
from the Company of the initiation of a Standstill Period, immediately
discontinue disposition of Registrable Securities pursuant to the registration
statement until receiving written notice from the Company that the Standstill
Period has terminated.
(j) The Company shall use reasonable commercial efforts to have the
Registrable Securities included for quotation on the Nasdaq National Market.
3. Indemnification.
(a) Subject to the conditions set forth below, the Company agrees
to indemnify and hold harmless each Eligible Holder, its officers, directors,
partners, employees, agents, and counsel, and each person, if any, who controls
any such person within the meaning of Section 15 of the Securities Act or
Section 20(a) of the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT"), from and against any and all loss, liability, charge, claim, damage, and
expense whatsoever (which shall include, for all purposes of this Section 3, but
not be limited to, reasonable attorneys' fees and any and all reasonable
expenses whatsoever incurred in investigating, preparing, or defending against
any pending litigation, or any claim whatsoever, and any and all amounts paid in
settlement of any claim or litigation), arising out of, based upon, or in
connection with (i) any untrue statement or alleged untrue statement of a
material fact contained (A) in any registration statement, preliminary
prospectus, or final prospectus (as from time to time amended and supplemented),
or any amendment or supplement thereto, relating to the sale of any of the
Registrable Securities or (B) in any application or other document or
communication (in this Section 3 collectively called an "APPLICATION") executed
by or on behalf of the Company or based upon written information furnished by or
on behalf of the Company filed in any jurisdiction in order to register or
qualify any of the Registrable Securities under the securities or blue sky laws
thereof or filed with the Commission or any securities exchange; or any omission
or alleged omission to state a material fact required to be stated therein or
necessary to make the statements made therein not misleading, unless (x) such
statement or omission was made in reliance upon and in conformity with written
information furnished to the Company with respect to such Eligible Holder by or
on behalf of such person expressly for inclusion in any registration statement,
preliminary prospectus,
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or final prospectus, or any amendment or supplement thereto, or in any
application, as the case may be, or (y) such loss, liability, charge, claim,
damage or expense arises out of such Eligible Holder's failure to comply with
the terms and provisions of this Agreement, or (ii) any breach of any
representation, warranty, covenant, or agreement of the Company contained in
this Agreement.
If any action is brought against any Eligible Holder or any of its
officers, directors, partners, employees, agents, or counsel, or any controlling
persons of such person (an "INDEMNIFIED PARTY") in respect of which the Company
is required to indemnify an indemnified party pursuant to the foregoing
paragraph, such indemnified party or parties shall promptly notify the Company
in writing of the institution of such action and the Company shall promptly
assume the defense of such action, including the employment of counsel, provided
that the indemnified party shall have the right to employ its or their own
counsel in any such case, but the fees and expenses of such counsel shall be at
the expense of such indemnified party or parties. Anything in this Section 3 to
the contrary notwithstanding, the Company shall not be liable for any settlement
of any such claim or action effected without its written consent, which shall
not be unreasonably withheld. The Company agrees promptly to notify Eligible
Holder of the commencement of any litigation or proceedings against the Company
or any of it officers or directors in connection with the sale of any
Registrable Securities or any preliminary prospectus, prospectus, registration
statement, or amendment or supplement thereto, or any application relating to
any sale of any Registrable Securities.
(b) Each Eligible Holder agrees to indemnify and hold harmless the
Company, each director of the Company, each officer of the Company who shall
have signed any registration statement covering Registrable Securities held by
such Eligible Holder, each other person, if any, who controls the Company within
the meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange
Act, and its or their respective counsel, to the same extent as the foregoing
indemnity from the Company to such Eligible Holder in Section 3(a), with respect
to statements or omissions, if any, made in any registration statement,
preliminary prospectus, or final prospectus (as from time to time amended and
supplemented), or any amendment or supplement thereto, or in any application, in
reliance upon and in conformity with information furnished to the Company with
respect to such Eligible Holder by or on behalf of such Eligible Holder,
expressly for inclusion in any such registration statement, preliminary
prospectus, or final prospectus, or any amendment or supplement thereto, or in
any application, as the case may be. If any action shall be brought against the
Company or any other person so indemnified based on any such registration
statement, preliminary prospectus, or final prospectus or any amendment or
supplement thereto, or in any application, and in respect of which an Eligible
Holder is required to indemnify the Company pursuant to this Section 3(b), such
Eligible Holder shall have the rights and duties given to the Company, and the
Company and each other person so indemnified shall have the rights and duties
given to the indemnified parties, by the provisions of Section 3(a).
4. Miscellaneous.
(a) Remedies. In the event of a breach by the Company of its
obligations under this Agreement, the Sellers, 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.
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(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 FPX
Merger Agreement and the STCC Purchase Agreement.
(d) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including without limitation and without the need for an express
assignment, subsequent holders of the Registrable Securities subject to the
terms hereof.
(e) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(f) Headings. The headings in this Agreement are for convenience of
references only and shall not limit or otherwise affect the meaning hereof.
(g) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Illinois without reference
to its conflicts of law provisions.
(h) Severability. In the event that any one or more of the
provisions contained herein, or the application hereof in any circumstance is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provisions contained herein shall not be affected or
impaired thereby.
(i) Entire Agreement. This Agreement is intended by the parties as
a final expression of their agreement and intended to be a complete and
exclusive statement of this agreement and understanding of the parties hereto in
respect of the subject matter contained herein. There are no restrictions,
promises warranties or undertakings, other than those set forth or referred to
herein, concerning the registration rights granted by the Company pursuant to
this Agreement.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date first written above.
METAL MANAGEMENT, INC. /s/ Xxxxxxx Xxxxxx
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XXXXXXX XXXXXX
By: /s/ Xxxxx X. Xxxxxxxxx
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Xxxxx X. Xxxxxxxxx, Vice President /s/ Xxxxx Xxxxxx
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XXXXX XXXXXX
SOUTHERN TIN COMPRESS
CORPORATION, a Tennessee corporation /s/ Xxxxxxxx Xxxxxx
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XXXXXXXX XXXXXX
By: /s/ Xxxx X. Xxxxxxx
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Xxxx X. Xxxxxxx, President /s/ Xxxx Xxxxxx
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XXXX XXXXXX
/s/ Xxxx X. Xxxxxxx
---------------------------------------- /s/ Xxxx Xxxx Perl
XXXX X. XXXXXXX ----------------------------------------
XXXX XXXX PERL
/s/ Xxxxx Xxxxxxx
---------------------------------------- /s/ Xxxxxxxx Xxxxxxx
XXXXX XXXXXXX ----------------------------------------
XXXXXXXX XXXXXXX, as Trustee of I.
Xxxxx Xxxxxxx GRAT dated 11/26/97
/s/ Xxxxx X. Xxxxxx
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XXXXX X. XXXXXX /s/ Xxxx Xxxxxxx
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XXXX XXXXXXX
/s/ Xxxxx X. Xxxxxx
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XXXXX X. XXXXXX XXXXXXX CONSULTING, L.L.C.
By: /s/ Xxxx X. Xxxxxxx
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Xxxx X. Xxxxxxx
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