<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934
Date of Report: October 24, 1997
(Date of earliest event reported)
METAL MANAGEMENT, INC.
(Exact name of registrant as specified in the charter)
Delaware 0-14836 94-2835068
(State or other jurisdiction (Commission File No.) (IRS Employer
of incorporation) Identification No.)
500 Dearborn Street, Suite 405
Chicago, Illinois 60610
(Address of Principal Executive Offices)
(312) 645-0700
Registrant's telephone number including area code)
N/A
(Former name or former address, if changed since last report)
<PAGE> 2
ITEM 5. OTHER EVENTS
Metal Management, Inc. (NASDAQ Symbol - "MTLM") today reported that it
has entered into an agreement with all of the holders (the "Purchasers") of the
Company's Series A Convertible Preferred Stock (the "Preferred Stock") under
which the Purchasers have agreed to waive certain mandatory conversion
conditions and certain mandatory redemption events contained in the Certificate
of Designations governing the Preferred Stock. In particular, the Purchasers
have agreed to waive their right to be redeemed in cash at maturity in the
event that the Company fails, as of the maturity date, to: (x) maintain a
market capitalization of greater than seventy-five million dollars
($75,000,000); (y) have an average daily trading volume of at least thirty (30)
thousand shares during a time period prior to maturity of the Preferred Stock;
or (z) have its common stock designated for quotation on the Nasdaq National
Market or listed on the New York Stock Exchange or other national securities
exchange. In addition, the Purchasers waived their right to require the
Company to redeem their Preferred Stock in cash in the event that, at any time
while such Preferred Stock is outstanding, the Company's common stock is no
longer quoted on the Nasdaq National Market or listed on a national securities
exchange. Robert C. Larry, the Company's Chief Financial Officer, explained
that as a result of the waiver, "the Company will be able to reclassify on a
prospective basis the amounts received by the Company from the sale of the
Preferred Stock as a component of stockholders' equity on the Company's
consolidated balance sheet, rather than its previous characterization as
temporary equity. In addition, the balance sheet description of the Preferred
Stock will change prospectively from 'Redeemable Convertible Preferred Stock'
to 'Convertible Preferred Stock.'" A copy of the Company's unaudited combined
condensed balance sheet as of September 30, 1997 adjusted to give effect to
this waiver is included as an exhibit to this Current Report and incorporated
by reference herein.
All of the statements in this report, other than historical facts,
are forward-looking statements made in reliance upon the Safe Harbor Provisions
of the Private Securities Litigation Reform Act of 1995. As such, they involve
risks and uncertainties and are subject to change at any time. These
statements reflect the Company's current expectations regarding the future
profitability of the Company and its subsidiaries and the benefits to be
derived from the Company's execution of the Company's industry consolidation
strategy. As discussed in the Company's annual report for the period ended
March 31, 1997, and its quarterly reports for the periods ended June 30, 1997
and September 30, 1997, some of the factors which could affect the
Company's performance include, among other things: possible inability to
replace short-term financing with longer term capital commitments, possible
inability to obtain capital through debt and/or equity placements sufficient to
fund cash requirements under acquisition and merger agreements, risk of
expansion strategy, cyclicality of operating results, price fluctuations,
existing and future debt of the Company, competition in the scrap metal
industry, immediate and future capital requirements, substantial leverage,
reliance on management and principal stockholders and environmental matters.
1
<PAGE> 3
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(b) Pro Forma Financial Information
Unaudited pro forma combined condensed Balance Sheet at September 30,
1997, giving effect to the Waiver of Mandatory Conversion Conditions, Waiver of
Mandatory Redemption Event, and Consent to Amendment dated as of October 24,
1997.
(c) Exhibits
3.3 Amendment to Certificate of Designations, Preferences and
Rights of Series A Convertible Preferred Stock of the Registrant.
99.1 Press Release dated October 27, 1997.
99.2 Waiver of Mandatory Redemption Event dated as of October 16,
1997 by and among the Registrant and each of the purchasers of the
Registrant's Series A Convertible Preferred Stock listed as purchasers on the
signature page thereto.
99.3 Waiver of Mandatory Conversion Conditions, Waiver of Mandatory
Redemption Event, and Consent to Amendment dated as of October 24, 1997 by and
among the Registrant and each of the purchasers of the Registrant's Series A
Convertible Preferred Stock listed as purchasers on the signature page thereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
METAL MANAGEMENT, INC.
Dated October 27, 1997
By: /s/ Gerard M. Jacobs
------------------------------------------
Gerard M. Jacobs,
President and Chief Executive Officer
<PAGE> 4
PRO FORMA FINANCIAL INFORMATION
On October 24, 1997, the Company obtained a waiver of certain mandatory
conversion and redemption conditions and consent to amendment from all the
holders of the Company's Series A Preferred Stock. The waiver and consent to
amendment permanently and irrevocably waived any and all rights of the holders
that would require the preferred stock to be redeemed in cash at maturity if
certain mandatory conversion conditions were not satisfied. Additionally, the
agreement waived certain provisions of the certificate of designations
regarding certain mandatory redemption events of the preferred stock. As a
result, all redemption provisions of the preferred stock that are outside of
the Company's control have been waived or eliminated. The changes in the terms
of the Series A Preferred Stock require the balance sheet classification of
such securities to change prospectively from "temporary equity" to a component
of shareholders' equity. Additionally, the balance sheet description of the
Series A Preferred Stock will change prospectively from "Redeemable convertible
preferred stock" to "Convertible preferred stock".
The accompanying unaudited pro forma combined condensed balance sheet gives
effect to the change in classification of the Series A Preferred Stock from
"temporary equity" to a component of shareholders' equity as if the waiver and
amendments were obtained on September 30, 1997. The accompanying unaudited pro
forma combined condensed balance sheet has been derived from the Company's
unaudited balance sheet at September 30, 1997 (incorporated by reference to the
Company's Quarterly Report on Form 10-Q dated September 30, 1997, filed with
the Commission on October 17, 1997).
The unaudited pro forma condensed balance sheet should be read in conjunction
with the second quarter financial statements and notes thereto for the Company,
which appear on the Quarterly Report on Form 10-Q for the quarter ended
September 30, 1997.
<PAGE> 5
' PRO FORMA COMBINED CONDENSED BALANCE SHEET
(IN THOUSANDS, UNAUDITED)
<TABLE>
<CAPTION> THE COMPANY
THE COMPANY PRO FORMA
SEPTEMBER PRO FORMA SEPTEMBER
30, 1997 ADJUSTMENTS REF 30, 1997
-------- ----------- --- ---------
<S> <C> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 11,999 $ 0 $ 11,999
Accounts receivable, net 50,518 50,518
Inventories 34,978 34,978
Prepaid expenses and other assets 2,831 2,831
----------- ----------
Total current assets 100,326 100,326
Property and equipment, net 57,479 57,479
Other assets 1,911 1,911
Goodwill and other intangibles, net 107,953 107,953
----------- ----------
TOTAL ASSETS $ 267,669 $ 0 $ 267,669
============ ============ ===========
LIABILITIES AND EQUITY
Current Liabilities:
Operating line of credit $ 14,297 $ 0 14,297
Accounts Payable 34,220 34,220
Other accrued liabilities 10,446 10,446
Current portion of notes payable to related 33,083 33,083
parties
Current portion of long-term debt 3,037 3,037
----------- ----------
Total current liabilities 95,083 95,083
Long term notes payable to related parties, less 27,992 27,992
current
Long-term debt, less current portion 22,132 22,132
Deferred taxes 7,462 7,462
Other liabilities 2,040 2,040
----------- ----------
TOTAL LIABILITIES 154,709 154,709
Redeemable convertible preferred stock - 24,323 (24,323) 1. 0
Series A
Stockholders' equity:
Convertible preferred stock - Series A 0 24,323 1. 24,323
Common stock 165 165
Warrants 15,451 15,451
Additional paid-in-capital 67,592 67,592
Retained earnings 5,429 0 5,429
----------- ---------- ----------
Total stockholders' equity 88,637 24,323 112,960
----------- ---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 267,669 $ 0 $ 267,669
=========== ========== ==========
</TABLE>
See accompanying notes to unaudited combined condensed pro forma balance sheet
<PAGE> 6
NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET
The unaudited pro forma combined condensed balance sheet as of September 30,
1997 is based on the following adjustment.
1. Adjustment represents the reclassification of the Series A Preferred
Stock from "temporary equity" to a component of shareholders' equity.
On a prospective basis, this reclassification will have the following
impact to the Company:
a. The Company will no longer be required to accrete the remaining
discount of $993,000 up to the redemption value on the preferred
stock. This accretion would have occurred through the maturity date.
b. Dividends accrued on the preferred stock and unpaid will be reflected
as a dividend payable. Dividends accrued on the redeemable preferred
stock through September 30, 1997 were added to the carrying value of
the preferred stock.
<PAGE> 1
EXHIBIT 99.1
PRESS RELEASE
FOR IMMEDIATE RELEASE
FOR MORE INFORMATION CONTACT
CONTACT: Xavier Hermosillo, Corporate Communications and
Investor Relations (310-832-2999)
METAL MANAGEMENT ANNOUNCES RECLASSIFICATION
OF PREFERRED STOCK
Chicago, IL - October 27, 1997 - Metal Management, Inc. (NASDAQ Symbol - "MTLM")
today reported that it has entered into an agreement with all of the holders
(the "Purchasers") of the Company's Series A Convertible Preferred Stock (the
"Preferred Stock") under which the Purchasers have agreed to waive certain
mandatory conversion conditions and certain mandatory redemption events
contained in the Certificate of Designations governing the Preferred Stock. In
particular, the Purchasers have agreed to waive their right to be redeemed in
cash at maturity in the event that the Company fails, as of the maturity date,
to: (x) maintain a market capitalization of greater than seventy-five million
dollars ($75,000,000); (y) have an average daily trading volume of at least
thirty (30) thousand shares during a time period prior to maturity of the
Preferred Stock; or (z) have its common stock designated for quotation on the
Nasdaq National Market or listed on the New York Stock Exchange or other
national securities exchange. In addition, the Purchasers waived their right to
require the Company to redeem their Preferred Stock in cash in the event that,
at any time while such Preferred Stock is outstanding, the Company's common
stock is no longer quoted on the Nasdaq National Market or listed on a national
securities exchange. Robert C. Larry, the Company's Chief Financial Officer,
explained that as a result of the waiver, "the Company will be able to
reclassify on a prospective basis the amounts received by the Company from the
sale of the Preferred Stock as a component of stockholders' equity on the
Company's consolidated balance sheet, rather than its previous characterization
as temporary equity. In addition, the balance sheet description of the
Preferred Stock will change prospectively from 'Redeemable Convertible Preferred
Stock' to 'Convertible Preferred Stock.'"
All of the statements in this release, other than historical facts,
are forward-looking statements made in reliance upon the Safe Harbor Provisions
of the Private Securities Litigation Reform Act of 1995. As such, they involve
risks and uncertainties and are subject to change at any time. These
statements reflect the Company's current expectations regarding the future
profitability of the Company and its subsidiaries and the benefits to be
derived from the Company's execution of the Company's industry consolidation
strategy. As discussed in the Company's annual report for the period ended
March 31, 1997, and its quarterly reports for the period June 30, 1997 and
ended September 30, 1997, some of the factors which could affect the Company's
performance include, among other things: possible inability to replace
short-term financing with longer term capital commitments, possible inability
to obtain capital through debt and/or equity placements sufficient to fund cash
requirements under acquisition and merger agreements, risk of expansion
strategy, cyclicality of operating results, price fluctuations, existing and
future debt of the Company, competition in the scrap metal industry, immediate
and future capital requirements, substantial leverage, reliance on management
and principal stockholders and environmental matters.
<PAGE> 1
EXHIBIT 99.2
WAIVER OF MANDATORY REDEMPTION EVENT
This Waiver of Mandatory Redemption Event (the "Waiver") is made and
entered into as of this 16th day of October, 1997, by and among Metal
Management, Inc., a Delaware corporation (the "Company"), and each of the
purchasers of the Company's Series A Convertible Preferred Stock listed as
Purchasers on the signature page hereto.
R E C I T A L S
- - - - - - - -
(A) The Company, Proprietary Convertible Investment Group, Inc., a
Delaware corporation ("PCIG"), and Advantage Fund Limited, a corporation
organized under the laws of the British Virgin Islands ("Advantage"), entered
into that certain Securities Purchase Agreement, dated August 7, 1997 (the
"Securities Purchase Agreement"), whereby the Company sold to PCIG and
Advantage (collectively, the "Original Purchasers") an aggregate of 21,000
shares of the Company's Series A Convertible Preferred Stock, $.01 par value
per share (the "Series A Preferred Stock").
(B) Pursuant to various Subscription Agreements, the Company sold
to T. Benjamin Jennings, Gerard M. Jacobs, Donald Moorehead, Peer Pedersen, J &
B Associates and Robert Smith (collectively, the "Additional Purchasers") (the
Original Purchasers and the Additional Purchasers are herein sometimes referred
to collectively as the "Purchasers") an aggregate of 4,000 shares of Series A
Preferred Stock (the Series A Preferred Stock purchased by the Purchasers is
hereinafter referred to as the "Preferred Shares").
(C) Section 4.1.10 of the Securities Purchase Agreement provides
that the Company will cause a meeting of stockholders to be held on or before
December 8, 1997 (the "Meeting Date") and will submit to the vote of its
stockholders at such meeting a proposal to approve the transactions
contemplated by the Securities Purchase Agreement and the Certificate of
Designations, including without limitation the conversion of the Series A
Preferred Stock into common stock of the Company in accordance with the
Certificate of Designations (the "Stockholder Approval").
(D) Section 6 (d) (vii) of the Certificate of Designations,
Preferences and Rights of Series A Convertible Preferred Stock of Metal
Management, Inc. (the "Certificate of Designations") requires the Company to
redeem (a "Mandatory Redemption") the Series A Preferred Stock of a Holder (as
defined in the Certificate of Designations) in the event the Company fails to
obtain Stockholder Approval by the Meeting Date.
(E) The Purchasers desire to permanently waive any and all rights to
a Mandatory Redemption which could arise by reason of the failure of the
Company to obtain Stockholder Approval by the Meeting Date pursuant to Section
6 (d) (vii) of the Certificate of Designations or, as to the Original
Purchasers, by reason of the failure of the Company to hold its annual meeting
of stockholders by the Meeting Date pursuant to Section 4.1.10 of the
Securities Purchase Agreement.
<PAGE> 2
NOW, THEREFORE, in consideration of the mutual covenants and conditions set
forth herein, the parties hereto agree as follows:
1. Recitals. The Recitals made above are an integral part of this Waiver
and are hereby incorporated herein and made a part hereof as though fully set
forth in this section.
2. Waiver of Mandatory Redemption. Each of the Purchasers does hereby
permanently and irrevocably waive any and all rights which each such Purchaser
may have to a Mandatory Redemption by reason of the Company's failure to obtain
Stockholder Approval by the Meeting Date pursuant to Section 6 (d) (vii) of the
Certificate of Designations and the Original Purchasers do hereby permanently
and irrevocably waive any and all rights which each such Original Purchaser may
have to a Mandatory Redemption by reason of the Company's failure to hold its
annual meeting of stockholders by the Meeting Date pursuant to Section 4.1.10
of the Securities Purchase Agreement. The Waiver of each Purchaser's rights to
a Mandatory Redemption set forth in this Waiver shall represent a knowing
waiver of rights which might accrue to the benefit of such Purchaser absent
this Waiver and such Purchaser does hereby remise, release and forever
discharge the Company from any and all obligations to such Purchaser to a
Mandatory Redemption as set forth herein.
3. Payment of Dividends. In the event that the Company fails to obtain
Stockholder Approval prior to the Meeting Date, each of the Purchasers shall be
entitled to receive cumulative dividends on such Purchaser's Series A Preferred
Stock accruing on each share thereof at an annual rate, in lieu of the rate
specified in the Certificate of Designations of thirteen percent (13%) times
the Stated Value (as set forth in the Certificate of Designations) per share
(such rate subject to ratable adjustment in the event of any stock split or
combination and to equitable adjustment in the event of a reclassification or
other similar event) from the Meeting Date through the date upon which
Stockholder Approval is obtained, and thereafter all such dividends shall be
strictly in accordance with the Certificate of Designations. The parties
hereby agree to execute and deliver any and all documents and instruments
reasonably necessary or desirable to evidence the Company's obligation to pay
such increased dividends to the Purchasers pursuant to this paragraph 3.
4. Governing Law. This Waiver shall be subject to and governed by the
internal laws of the State of Delaware.
5. Entire Agreement. This Waiver constitutes the entire agreement among
the parties with respect to the subject matter hereof. Any change or
modification of this Waiver shall not be valid unless the same shall be in
writing and executed by all of the parties hereto.
<PAGE> 3
IN WITNESS WHEREOF, the parties have caused this Waiver to be executed as
of the date and year first above written.
Metal Management, Inc., Proprietary Convertible Investment
a Delaware corporation Group, Inc.,
a Delaware corporation
By: /s/ T. Benjamin Jennings By: /s/ Allan Weine
------------------------------- -----------------------------------
Its: Chairman Its: Vice-President
Advantage Fund Limited,
a corporation organized under the
laws of the British Virgin Islands
By: /s/ A.P. de Groot
-------------------------------
Its: President
/s/ T. Benjamin Jennings /s/ Gerard M. Jacobs
------------------------------- -----------------------------------
T. Benjamin Jennings Gerard M. Jacobs
/s/ Donald Moorehead /s/ Peer Pedersen
------------------------------- -----------------------------------
Donald Moorehead Peer Pedersen
J & B Associates
/s/ Robert Smith
-------------------------------
Robert Smith By: /s/ John Porter
------------------------------------
Its: General Partner
<PAGE> 1
EXHIBIT 99.3
WAIVER OF MANDATORY CONVERSION CONDITIONS, WAIVER OF
MANDATORY REDEMPTION EVENT, AND CONSENT TO AMENDMENT
This Waiver of Mandatory Conversion Conditions, Waiver of Mandatory
Redemption Event, and Consent to Amendment (the "Waiver and Consent") is made
and entered into as of this 24th day of October, 1997, by and among Metal
Management, Inc., a Delaware corporation (the "Company"), and each of the
purchasers of the Company's Series A Convertible Preferred Stock listed as
Purchasers on the signature page hereto.
R E C I T A L S
(A) The Company, Proprietary Convertible Investment Group, Inc., a
Delaware corporation ("PCIG"), and Advantage Fund Limited, a corporation
organized under the laws of the British Virgin Islands ("Advantage"), entered
into that certain Securities Purchase Agreement, dated August 7, 1997 (the
"Securities Purchase Agreement"), whereby the Company sold to PCIG and
Advantage (collectively, the "Original Purchasers") an aggregate of 21,000
shares of the Company's Series A Convertible Preferred Stock, $.01 par value
per share (the "Series A Preferred Stock").
(B) Pursuant to various Subscription Agreements,the Company sold to T.
Benjamin Jennings, Gerard M. Jacobs, Donald Moorehead, Peer Pedersen, J & B
Associates and Robert Smith (collectively, the "Additional Purchasers") (the
Original Purchasers and the Additional Purchasers are herein sometimes referred
to collectively as the "Purchasers") an aggregate of 4,000 shares of Series A
Preferred Stock (the Series A Preferred Stock purchased by the Purchasers is
hereinafter referred to as the "Preferred Shares").
(C) Section 4(g)(i) of the Certificate of Designations, Preferences and
Rights of Series A Convertible Preferred Stock of Metal Management, Inc. (the
"Certificate of Designations") provides for the automatic conversion of the
Series A Preferred Stock into Common Stock upon the Maturity Date (as defined
in the Certificate of Designations) assuming satisfaction of the Mandatory
Conversion Conditions (as defined in the Certificate of Designations). Section
6(a) of the Certificate of Designations provides for the mandatory redemption
of the Series A Preferred Stock into same day funds in the event of a Mandatory
Redemption Event (as defined in the Certificate of Designations). Any
capitalized terms not otherwise defined herein shall have the meanings ascribed
to such terms in the Certificate of Designations.
<PAGE> 2
(D) Section 4(g)(ii) of the Certificate of Designations defines the
"Mandatory Conversion Conditions" to include in Section 4(g)(ii)(1) that the
market value of the Company's outstanding shares of Common Stock must be at
least $75 million (the "Market Cap Condition"), in Section 4(g)(ii)(2) that the
average daily trading volume of the Company's Common Stock must be at least
30,000 shares (the "Trading Volume Condition") and in Section 4(g)(ii)(3) that
the Common Stock shall be designated for quotation on the Nasdaq National
Market or listed on the New York Stock Exchange or other national securities
exchange (the "Listed Stock Condition"). Section 6(d)(v) of the Certificate of
Designations defines a "Mandatory Redemption Event" to include an event whereby
the Common Stock is no longer quoted on the Nasdaq National Market or listed on
a national exchange (the "Listed Stock Event").
(E) The Purchasers desire to permanently waive any and all rights to
prohibit or avoid a Mandatory Conversion of their Preferred Shares into Common
Stock which could arise by reason of the failure of the Company to satisfy the
Market Cap Condition, the Trading Volume Condition, and/or the Listed Stock
Condition, and any and all rights to a Mandatory Redemption in the event of
the Listed Stock Event, and consent to the amendment of the Certificate of
Designations to delete such conditions and event.
NOW, THEREFORE, in consideration of the mutual covenants and
conditions set forth herein, the parties hereto agree as follows:
1. Recitals. The Recitals made above are an integral part of this
Waiver and Consent and are hereby incorporated herein and made a part hereof as
though fully set forth in this section.
2. Waiver of Mandatory Conversion Conditions and Mandatory Redemption
Event. Each of the Purchasers does hereby permanently and irrevocably waive
any and all rights which each such Purchaser may have to prohibit or avoid a
Mandatory Conversion of such Purchaser's Series A Preferred Stock into Common
Stock of the Company by reason of the Company's failure to satisfy the Market
Cap Condition contained in Section 4(g)(ii)(1) of the Certificate of
Designations, the Trading Volume Condition contained in Section 4(g)(ii)(2) of
the Certificate of Designations, and the Listed Stock Condition contained in
Section 4(g)(ii)(3) of the Certificate of Designations, and any and all rights
to a Mandatory Redemption in the event of a Listed Stock Event. The waiver of
each Purchaser's rights as set forth in this Waiver and Consent shall represent
a knowing waiver of rights which might accrue to the benefit of such Purchaser
absent this Waiver and Consent and such Purchaser does hereby remise, release
and forever discharge the Company from any and all obligations to such
Purchaser to comply with the Market Cap Condition, the Trading Volume
Condition, the Listed Stock Condition, or to effect a Mandatory Redemption from
the occurrence of the Listed Stock Event.
3. Consent to Amendment. Each Purchaser does hereby consent to and
approve of the amendment of the Certificate of Designations to delete Sections
4(g)(ii)(1), 4(g)(ii)(2),
<PAGE> 3
4(g)(ii)(3) and Section 6(d)(v), so that the Certificate of Designations, as
amended, shall be in the form of Exhibit A attached hereto and made a part
hereof.
4. Failure to Comply with Listed Stock Conditions or Occurrence of
Listed Stock Event. In the event the Company fails to satisfy the Listed Stock
Condition, or there is an occurrence of the Listed Stock Event, the conversion
rights of the Purchasers, as set forth in Section 4 of the Certificate of
Designations, shall be modified to allow the Purchasers, at their sole
election, in addition to and not in lieu of the conversion privileges set forth
therein, to convert each of their shares of Series A Preferred Stock into
Common Stock based on the following formula: the number of Conversion Shares
to be delivered by the Company pursuant to a Conversion shall be determined by
dividing the Stated Value of the Series A Preferred Stock to be converted by
the Delisting Price as of the Conversion Date. The "Delisting Price" shall be
the lowest traded price of the Common Stock during the Delisting Period.
"Delisting" or "Delisted" shall mean the failure by the Company to comply with
the Listed Stock Condition, or the occurrence of the Listed Stock Event. The
"Delisting Period" shall mean the period beginning on the date on which the
Common Stock is Delisted and ending on the date on which the Common Stock is
relisted for quotation on the Nasdaq National Market or listed on the New York
Stock Exchange or other national securities exchange.
5. Governing Law. This Waiver and Consent shall be subject to and
governed by the internal laws of the State of Delaware.
6. Entire Agreement. This Waiver and Consent constitutes the entire
agreement among the parties with respect to the subject matter hereof. Any
change or modification of this Waiver and Consent shall not be valid unless the
same shall be in writing and executed by all of the parties hereto.
7. Binding upon Subsequent Purchasers. This Waiver and Consent is
binding upon the Purchasers, any holder who acquires the Series A Preferred
Stock from any of the Purchasers, and any and all successors and assigns of the
Purchasers. The Purchasers agree to surrender the Series A Preferred Stock to
the Company, at the Company's request, so that an appropriate legend evidencing
the foregoing may be added to the Series A Preferred Stock.
THE REMAINDER OF THIS PAGE
WAS INTENTIONALLY LEFT BLANK
<PAGE> 4
IN WITNESS WHEREOF, the parties have caused this Waiver and Consent to
be executed as of the date and year first above written.
Metal Management, Inc., Proprietary Convertible Investment
a Delaware corporation Group, Inc.,
a Delaware corporation
By: /s/ T. Benjamin Jennings By: /s/ Allan Weine
------------------------------- -----------------------------------
Its: Chairman Its: Vice-President
Advantage Fund Limited,
a corporation organized under the
laws of the British Virgin Islands
By: /s/ A.P. de Groot
-------------------------------
Its: President
/s/ T. Benjamin Jennings /s/ Gerard M. Jacobs
------------------------------- -----------------------------------
T. Benjamin Jennings Gerard M. Jacobs
/s/ Donald Moorehead /s/ Peer Pedersen
------------------------------- -----------------------------------
Donald Moorehead Peer Pedersen
J & B Associates
/s/ Robert Smith
-------------------------------
Robert Smith By: /s/ John Porter
------------------------------------
Its: General Partner
