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EXHIBIT 4.17
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "AGREEMENT") is made and entered
into as of the 24th day of June, 1998, by and between Metal Management, Inc.,
a Delaware corporation (the "COMPANY") and G. Xxxxxx Xxxxxxx, III. (the
"SHAREHOLDER").
RECITALS:
A. Pursuant to the Agreement of Merger (the "PURCHASE AGREEMENT") dated as
of June 24, 1998, by and among the Company, Xxxxxx Acquisition Corp., a
Colorado corporation ("ACQUISITION"), Xxxxxx Recycling of Denver, Inc., a
Colorado corporation ("XXXXXX DENVER"), Xxxxxx Recycling of Utah, LLC, a Utah
limited liability company ("XXXXXX UTAH") and the Shareholder, Shareholder
received from the Company 857,180 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 428,590 shares of Common Stock of the Shareholder which represent one
half the shares of the Common Stock issued to the Shareholder in connection
with the Purchase Agreement (other than any shares held in the Escrow) to the
extent that such shares (collectively, the "REGISTRABLE SECURITIES") have not
been previously sold pursuant to a registration statement or Rule 144 (or any
similar provision then in force) under the Securities Act of 1933, as amended
(the "SECURITIES ACT") or any other exemption from registration thereunder.
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 120 days from the date hereof, prepare and file at the Company's sole
cost and expense (other than the 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 with the Securities and Exchange Commission (the "COMMISSION") on the
appropriate form pursuant to Rule 415 of 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
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counsel to cause such registration statement to become effective as promptly as
practicable following the filing thereof.
(b) In the event of a registration pursuant to Section 1(a), the
Company shall use commercially reasonable efforts to cause the Registrable
Securities so registered to be registered or qualified for sale under the
securities or blue sky laws of such states as the Shareholder may reasonably
request to permit the resale of the Registrable Securities in such states; and
do such other reasonable acts and things as may be required of it to enable
such holder to consummate the disposition 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 covered thereby. The Company shall keep such
registration or qualification in effect until the earlier of (i) the second
anniversary of the date that the registration statement was declared
effective, (ii) the first date upon which the Shareholder is free to sell all
such Registrable Securities under Rule 144 of the Securities Act within the
volume limitations set forth in Rule 144(e) of the Securities Act, (iii) the
first date upon which the Shareholder is free to sell all such Registrable
Securities under Rule 144(k) of the Securities Act, or (iv) the date that the
Shareholder has sold or otherwise transferred all the Registrable Securities
under a registration statement, pursuant to Rule 144 under the Securities Act
or otherwise.
(d) In the event of a registration pursuant to 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) In the event of a registration pursuant to Section 1(a), the
Company shall furnish the Shareholder so registered with an opinion of its
counsel (in form and substance reasonably acceptable to the Shareholder) to the
effect that (i) the registration statement has become effective under the
Securities Act and no order suspending the effectiveness of the registration
statement, preventing or suspending the use of the registration statement, any
preliminary prospectus, any final prospectus, or any amendment or supplement
thereto has been issued, nor has the Commission or any securities or blue sky
authority of any jurisdiction instituted or to the knowledge of such counsel
threatened to institute any proceedings with respect to such an order, (ii) the
registration statement and each prospectus forming a part thereof (including
each preliminary prospectus), and any amendment or supplement thereto, comply
as to form with the Securities Act
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and the rules and regulations thereunder, and (iii) such counsel has no
knowledge of any material misstatement or omission in such registration
statement or any prospectus, as amended or supplemented. Such opinion shall
also state the jurisdictions in which the Registrable Securities have been
registered or qualified for sale pursuant to Section 1(b).
(f) 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.
(g) 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. 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, and use commercially
reasonable efforts to update and/or correct such prospectus as promptly as
practicable by preparing a supplemental or post effective amendment to a
registration statement or a supplement to the related prospectus or any
document incorporated or deemed incorporated by reference and filing the same
with the Commission. 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 such registration statement or prospectus
until the Shareholder (i) receives copies of the supplemented or 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.
(h) The Company shall notify the Shareholder promptly 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 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(h), 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.
(i) If requested by the underwriter for any underwritten offering of
Registrable Securities on behalf of the Shareholder pursuant to a registration
requested under Section 1(a), the Company and the Shareholder will enter into
an underwriting agreement with such underwriter for
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such offering, which shall be reasonably satisfactory in substance and form to
the Company and the Company's counsel, the Shareholder and the underwriter, and
such agreement shall contain such representations and warranties by the Company
and the Shareholder and such other terms and provisions as are customarily
contained in an underwriting agreement with respect to secondary distributions
solely by the Shareholder, including, without limitation, indemnities
substantially to the effect and to the extent provided in Section 2 hereof.
(j) The Company shall use commercially reasonable efforts to have the
Registrable Securities included for quotation on the Nasdaq National Market.
(k) 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. Indemnification. Subject to the conditions set forth below, the
Company agrees to indemnify and hold harmless the Shareholder, his employees,
agents, and counsel, and each person, if any, who controls any such person
within the meaning of Section 15 of the Securities Act or Section 20(a) of the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), from and
against any and all loss, liability, charge, claim, damage, and expense
whatsoever (which shall include, for all purposes of this Section 2, but not be
limited to, reasonable attorneys' fees and any and all reasonable expenses
whatsoever incurred in investigating, preparing, or defending against any
litigation, commenced or threatened, or any claim whatsoever, and any and all
amounts paid in settlement of any claim or litigation), as and when incurred,
arising out of, based upon, or in connection with (i) any untrue statement or
alleged untrue statement of any 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 2 collectively called an
"APPLICATION") executed by or on behalf of the Company or based upon written
information furnished by or on behalf of the Company filed in any jurisdiction
in order to register or qualify any of the Registrable Securities under the
securities or blue sky laws thereof or filed with the Commission or any
securities exchange; or any omission or alleged omission to state a material
fact required to be stated therein or necessary to make the statements made
therein not misleading, unless (x) such statement or omission was made in
reliance upon and in conformity with written information furnished to the
Company with respect to the Shareholder by or on behalf of such person
expressly for inclusion in any registration statement, preliminary prospectus,
or final prospectus, or any amendment or supplement thereto, or in any
application, as the case may be, or (y) such loss, liability, charge, claim,
damage or expense arises directly out of the Shareholder's failure to comply
with the terms and provisions of this Agreement, or (ii) any breach of any
representation, warranty, covenant, or agreement of the Company contained in
this Agreement. The foregoing agreement to indemnify shall be in addition to
any liability the Company may otherwise have, including liabilities arising
under this Agreement.
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If any action is brought against the Shareholder or any of their
employees, agents, or counsel, or any controlling persons of such person (an
"INDEMNIFIED PARTY") in respect of which indemnity may be sought against the
Company pursuant to the foregoing paragraph, such indemnified party or parties
shall promptly notify the Company in writing of the institution of such action
(but the failure so to notify shall not relieve the Company from any liability
other than pursuant to this Section 2(a) except to the extent that the Company
shall have been prejudiced thereby) and the Company shall promptly assume the
defense of such action, including the employment of counsel (reasonably
satisfactory to such indemnified party or parties), provided that the
indemnified party shall have the right to employ his or its own counsel in any
such case, but the fees and expenses of such counsel shall be at the expense of
such indemnified party or parties unless the employment of such counsel shall
have been authorized in writing by the Company in connection with the defense
of such action or the Company shall not have promptly employed counsel
reasonably satisfactory to such indemnified party or parties, or such
indemnified party or parties shall have reasonably concluded that there may be
one or more legal defenses available to him or it or to other indemnified
parties which are different from or additional to those available to the
Company, in any of which events such fees and expenses shall be borne by the
Company and the Company shall not have the right to direct the defense of such
action on behalf of the indemnified party or parties. Anything in this Section
2 to the contrary notwithstanding, the Company shall not be liable for any
settlement of any such claim or action effected without its written consent,
which shall not be unreasonably withheld. The Company shall not, without the
prior written consent of each indemnified party that is not released as
described in this sentence, settle or compromise any action, or permit a
default or consent to the entry of judgment in or otherwise seek to terminate
any pending or threatened action, in respect of which indemnity may be sought
hereunder (whether or not any indemnified party is a party thereto), unless
such settlement, compromise, consent, or termination includes an unconditional
release of each indemnified party from all liability in respect of such action.
The Company agrees promptly to notify the Shareholder 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) The Shareholder 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 the
Shareholder, 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 the Shareholder in Section 2(a), but only with
respect to statements or omissions, if any, made in any registration statement,
preliminary prospectus, or final prospectus (as from time to time amended and
supplemented), or any amendment or supplement thereto, or in any application,
in reliance upon and in conformity with written information furnished to the
Company with respect to the Shareholder by or on behalf of the Shareholder,
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,
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preliminary prospectus, or final prospectus or any amendment or supplement
thereto, or in any application, and in respect of which indemnity may be sought
against the Shareholder pursuant to this Section 2(b), the Shareholder shall
have the rights and duties given to the Company, and the Company and each other
person so indemnified shall have the rights and duties given to the indemnified
parties, by the provisions of Section 2(a).
(c) To provide for just and equitable contribution, if (i) an
indemnified party makes a claim for indemnification pursuant to Section 2(a) or
2(b) (subject to the limitations thereof) but it is found in a final judicial
determination, not subject to further appeal, that such indemnification may not
be enforced in such case, even though this Agreement expressly provides for
indemnification in such cases, or (ii) any indemnified or indemnifying party
seeks contribution under the Securities Act, the Exchange Act or otherwise,
then the Company (including for this purpose any contribution made by or on
behalf of any director of the Company, any officer of the Company who signed
any such registration statement, any controlling person of the Company, and its
or their respective counsel), on the one hand, and the Shareholder (including
for this purpose any contribution by or on behalf of an indemnified party), on
the other hand, shall contribute to the losses, liabilities, claims, damages,
and expenses whatsoever to which any of them may be subject, on the basis of
relevant equitable considerations such as the relative fault of the Company and
the Shareholder in connection with the facts which resulted in such losses,
liabilities, claims, damages, and expenses. The relative fault, in the case of
an untrue statement, alleged untrue statement, omission, or alleged omission
shall be determined by, among other things, whether such statement, alleged
statement, omission, or alleged omission relates to information supplied by the
Company or by the Shareholder, and the parties' relative intent, knowledge,
access to information, and opportunity to correct or prevent such statement,
alleged statement, omission, or alleged omission. The Company and the
Shareholder agree that it would be unjust and inequitable if the respective
obligations of the Company and the Shareholder for contribution were determined
by pro rata or per capita allocation of the aggregate losses, liabilities,
claims, damages, and expenses (even if the Shareholder and the other
indemnified parties were treated as one entity for such purpose) or by any
other method of allocation that does not reflect the equitable considerations
referred to in this Section 2(c). No person guilty of a fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who is not guilty of such
fraudulent misrepresentation. For purposes of this Section 2(c), each person,
if any, who controls the Shareholder within the meaning of Section 15 of the
Securities Act or Section 20(a) of the Exchange Act and each employee, agent,
and counsel of Shareholder or control person shall have the same rights to
contribution as the Shareholder or control person and each person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act or
Section 20(a) of the Exchange Act, each officer of the Company who shall have
signed any such registration statement, each director of the Company, and its
or their respective counsel shall have the same rights to contribution as the
Company, subject in each case to the provisions of this Section 2(c). Anything
in this Section 2(c) to the contrary notwithstanding, no party shall be liable
for contribution with respect to the settlement of any claim or action effected
without its written consent. This Section 2(c) is intended to supersede any
right to contribution under the Securities Act, the Exchange Act or otherwise.
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3. 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 such rule is available, and
(c) subject to the conditions specified in this Section 3(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 3(a).
4. Miscellaneous.
(a) Remedies. In the event of a breach by the Company of its
obligations under this Agreement, Shareholder, in addition to being entitled to
exercise all rights granted by law, including recovery of damages, will be
entitled to specific performance of its rights under this Agreement.
(b) Agreements and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, unless such amendment, modification or supplement is in writing
and signed by the parties hereto.
(c) Notices. All notices and other communications provided for or
permitted hereunder shall be made in accordance with the provision of the
Purchase Agreement.
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(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 Colorado without reference to its
conflicts of law provisions.
(h) Arbitration Procedure. In the event of disputes between the
parties with respect to the terms and conditions of this Agreement, either
party may demand that such disputes shall be resolved by and through an
arbitration proceeding to be conducted under the auspices of the American
Arbitration Association (AAA) in Denver, Colorado or Chicago, Illinois. The
demand for arbitration shall be in writing, shall be served on the other party
in the manner prescribed in the Purchase Agreement for giving notices, and
shall set forth the matter or matters to be arbitrated and the name of the
arbitrator chosen by the party making such demand. Within 15 days after
receipt of such demand, the other party to the dispute shall appoint an
arbitrator and given written notice of such appointment to the other party and
shall specify the name and address of such arbitrator. If such party shall
fail to appoint an arbitrator and notify the other party as herein provided
within such fifteen day period, the party making the demand shall have the
right to apply to the Chief Judge of the United States District Court located
in Denver, Colorado or Chicago, Illinois, for an appointment of an arbitrator.
The two arbitrators appointed or selected as set forth above shall promptly
appoint a third arbitrator as soon as practicable, or if they do not do so
within thirty days after notice is given to the parties of the appointment of
the second arbitrator, either party may apply to the Chief Judge of the United
States District Court located in Denver, Colorado or Chicago, Illinois for an
appointment of a third arbitrator. Any arbitration pursuant hereto shall be in
accordance with the Commercial Arbitration Rules of the AAA as then in effect,
except to the extent such rules are in conflict with the provisions of this
Section 4(h); provided, however, if the AAA is not then functioning or such
rules are not then in effect, arbitration shall be conducted in accordance with
the requirements of the Uniform Arbitration Act. The arbitrators shall meet as
soon as practicable after the third arbitrator is appointed. Both the
foregoing agreement of the parties to arbitrate any and all claims, and the
results, determination, finding, judgment and/or award rendered such
arbitration, shall be final and binding on the parties hereto and may be
specifically enforced by legal proceedings. The parties agree and acknowledge
that money damages may not be an adequate remedy for any breach of the
provisions of this
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Agreement and that any party may, in its sole discretion, ask for specific
performance and/or injunctive relief in order to enforce or prevent any
violations of the provisions of this Agreement. Subject to the second
preceding sentence, the provisions of this Section 4(h) shall not be deemed to
limit the availability to MTLM, Xxxxxx Companies and the Sole Shareholder of
any other legal remedies for breach of the other party's contractual
obligations.
Each party shall bear separately the cost of their respective attorneys,
witnesses and experts in connection with such arbitration. The costs of the
arbitrators shall be borne equally by the parties. Time is of the essence of
this arbitration procedure, and the arbitrators shall be instructed and
required to render their decision within ten (10) days following completion of
the arbitration.
Any and all legal proceedings to compel arbitration hereunder or to
enforce any award or judgment rendered thereby shall be governed by Colorado
law.
(i) 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.
(j) 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
/s/ G. Xxxxxx Xxxxxxx, III
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G. Xxxxxx Xxxxxxx, III
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