<PAGE> 1
As filed with the Securities and Exchange Commission on July 31, 1998.
Registration No. 333-58635
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------------
Amendment No. 1
to
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
METAL MANAGEMENT, INC.
(Exact name of registrant as specified in its charter)
Delaware 94-2835068
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
500 North Dearborn Street, Suite 405
Chicago, Illinois 60610
(312) 645-0700
(Address including zip code, and telephone number, including area code,
of registrant's principal executive offices)
------------------------------------
DAVID A. CARPENTER
General Counsel
METAL MANAGEMENT, INC.
500 North Dearborn Street, Suite 405
Chicago, Illinois 60610
(312) 645-0700
(Name and address, including zip code, and telephone number,
including area code, of agents for service)
With a Copy to:
PAUL W. THEISS, ESQ.
MAYER, BROWN & PLATT
190 S. LaSalle Street
Chicago, Illinois 60603
(312) 782-0600
------------------------------------
Approximate date of commencement of proposed
sale to the public: As soon as practicable after this
Registration Statement has become effective.
------------------------------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933 (the "Securities Act"), other than securities offered
only in connection with dividend or interest reinvestment plans, check the
following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering.
[ ]
If delivery of the prospectus is expected to be made pursuant to
Rule 434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
================================================================================================================================
TITLE OF EACH CLASS OF AMOUNT TO BE PROPOSED MAXIMUM OFFERING PROPOSED MAXIMUM AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PRICE PER SHARE (1) AGGREGATE OFFERING PRICE(1) REGISTRATION FEE(1)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
COMMON STOCK, PAR VALUE
$0.01 PER SHARE 4,909,698 $ 6.78 $ 33,287,752 $ 9,820
================================================================================================================================
</TABLE>
(1) PURSUANT TO RULE 457(C), SOLELY FOR THE PURPOSE OF CALCULATING THE
AMOUNT OF THE REGISTRATION FEE. THE AVERAGE OF THE HIGH AND LOW
PRICES REPORTED ON THE NASDAQ STOCK MARKET WAS $6.78 ON
JULY 29, 1998.
(2) THIS REGISTRATION STATEMENT ALSO RELATES, TO THE EXTENT PERMITTED BY
RULE 416, TO AN INDETERMINATE AMOUNT OF SHARES OF COMMON STOCK ISSUABLE
UPON THE EXERCISE OF WARRANTS DESCRIBED HEREIN TO PREVENT DILUTION
RESULTING FROM STOCK SPLITS, STOCK DIVIDENDS OR SIMILAR EVENTS OR BY
REASON OF CHANGES IN THE EXERCISE PRICE OF THE WARRANTS IN
ACCORDANCE WITH THE DOCUMENTS GOVERNING EACH WARRANT.
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE> 2
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the Registration Statement becomes
effective. This Prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such state.
PROSPECTUS
SUBJECT TO COMPLETION, DATED JULY 31, 1998
4,909,698 SHARES
METAL MANAGEMENT, INC.
COMMON STOCK
This Prospectus relates to the resale of up to an aggregate of 4,909,698
shares (the "Shares") of common stock, par value $.01 per share (the "Common
Stock"), of Metal Management, Inc., a Delaware corporation (the "Company" or
"Metal Management"), which may be offered (the "Offering") for sale by persons
(individually, a "Selling Stockholder," and collectively, the "Selling
Stockholders") described in this Prospectus. The Shares offered for resale
hereby were issued by the Company in respect of the following: (i) 4,839,698
Shares were issued by the Company in connection with business combinations; and
(ii) 70,000 Shares are issuable upon the exercise of warrants granted by the
Company in connection with business combinations or to employees of the Company.
The Shares may be offered for sale from time to time by or for the account
of the Selling Stockholders or their respective pledgees, donees, transferees or
other successors in interest in the open market, on the Nasdaq National Market,
in the over-the-counter market, in privately negotiated transactions, or a
combination of these methods, at market prices prevailing at the time of sale,
at prices related to the prevailing market prices or at negotiated prices. The
Shares are intended to be sold through one or more broker-dealers or directly to
purchasers. These broker-dealers may receive compensation in the form of
commissions, discounts or concessions from the Selling Stockholders or
purchasers of the Shares for whom the broker-dealer may act as agent, or to whom
the Selling Stockholders may sell as principal, or both (which compensation as
to a particular broker-dealer may be in excess of customary concessions). The
Selling Stockholders and any broker-dealers who act in connection with the sale
of the Shares hereunder may be deemed to be "underwriters" within the meaning of
the Securities Act of 1933, as amended (the "Securities Act") and any
commissions received by them and the proceeds of any resale of the Shares may be
deemed to be underwriting discounts and commissions under the Securities Act.
If all of the warrants referred to in (ii) above are exercised, the Company
will receive proceeds of $903,750. The Company will receive no portion of the
proceeds from the sale of the Shares offered hereby and will bear certain
expenses incident to their registration. See "Selling Stockholders" and "Plan of
Distribution."
The Common Stock is currently traded on The Nasdaq Stock Market--National
Market ("Nasdaq") under the symbol "MTLM." On July 29, 1998, the last reported
price for the Common Stock as reported by Nasdaq was $6.38 per share. As of July
29, 1998, the Company had a total of 39,099,812 shares of Common Stock
outstanding.
------------------
PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE MATTERS SET FORTH UNDER
THE CAPTION "INVESTMENT CONSIDERATIONS" APPEARING IN THE COMPANY'S ANNUAL REPORT
ON FORM 10-K FOR THE YEAR ENDED MARCH 31, 1998, AS THE SAME MAY BE AMENDED FROM
TIME TO TIME.
------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
------------------
, 1998.
<PAGE> 3
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the rules and
regulations promulgated thereunder, and, in accordance therewith, files reports,
proxy and information statements and other information with the Securities and
Exchange Commission (the "Commission"). These reports, proxy and information
statements and other information concerning the Company can be inspected and
copied at the public reference facilities maintained by the Commission at Room
1024, 450 Fifth Street, N.W., Washington, D.C. 20549; and at the Commission's
regional offices located at Citicorp Center, Suite 1400, 500 West Madison
Street, Chicago, Illinois 60661 and at Seven World Trade Center, Suite 1300, New
York, New York, 10048. Copies of such material can also be obtained from the
Commission at prescribed rates through its Public Reference Section at 450 Fifth
Street, N.W., Washington, D.C. 20549. The Commission also maintains a site on
the World Wide Web at http://www.sec.gov that contains reports, proxy and
information statements and other information regarding registrants that file
electronically with the Commission. The Common Stock is currently traded on
Nasdaq. Information filed by the Company with Nasdaq may be inspected through
EDGAR, the Commission's on-line filing service.
The Company has filed with the Commission a Registration Statement on Form
S-3 under the Securities Act with respect to the Shares offered hereby
(including all amendments and supplements thereto, the "Registration
Statement"). This Prospectus, which forms a part of the Registration Statement,
does not contain all of the information set forth in the Registration Statement,
certain parts of which have been omitted in accordance with the rules and
regulations of the Commission. Statements contained herein concerning the
provisions of certain documents are not necessarily complete and, in each
instance, reference is made to the copy of such document filed as an exhibit to
the Registration Statement or otherwise filed with the Commission. Each such
statement is qualified in its entirety by such reference. The Registration
Statement and the exhibits thereto can be inspected and copied through EDGAR.
2
<PAGE> 4
THE COMPANY
GENERAL
Metal Management is one of the largest and fastest-growing full service
metals recyclers in the United States, with 59 recycling facilities in 14
states. The Company is a leading consolidator in the metals recycling industry
and has achieved this position primarily through the implementation of its
national strategy of completing and integrating regional acquisitions. The
Company believes that its consolidation strategy will enhance the competitive
position and profitability of the operations that it acquires through improved
managerial and financial resources and increased economies of scale.
Metal Management is primarily engaged in the collection and processing of
ferrous and non-ferrous metals for resale to metals brokers, steel producers,
and producers and processors of other metals. The Company collects industrial
scrap and obsolete scrap, processes it into reusable forms, and supplies the
recycled metals to its customers, including mini-mills, integrated steel mills,
foundries and metals brokers. The Company believes that it provides one of the
most comprehensive offerings of both ferrous and non-ferrous scrap metals in the
industry. The Company's ferrous products primarily include shredded, sheared,
hot briquetted, cold briquetted and bundled scrap and broken furnace iron. The
Company also processes non-ferrous metals, including aluminum, copper, stainless
steel, brass, titanium and high-temperature alloys, using similar techniques and
through application of the Company's proprietary technologies. For the year
ended March 31, 1998, the Company sold or brokered approximately 3.1 million
tons of ferrous scrap and approximately 178.1 million pounds of non-ferrous
scrap.
The Company's predecessor was incorporated on September 24, 1981 as a
California corporation under the name General Parametrics Corporation, and was
re-incorporated as a Delaware corporation in June 1986 under the same name.
Prior to April 1996, the Company manufactured and marketed color thermal and dye
sublimation printers and related consumables, including ribbons, transparencies
and paper. The Company sold this business in two separate transactions in July
and December of 1996 for $1.3 million in cash and future royalty streams which
the Company does not anticipate will result in material payments to the Company.
On April 12, 1996, the Company changed its name to "Metal Management, Inc."
The Common Stock is traded on Nasdaq under the trading symbol "MTLM." The
Company's principal executive offices are located at 500 North Dearborn Street,
Suite 405, Chicago, Illinois 60610, and its telephone number is (312) 645-0700.
USE OF PROCEEDS
This Prospectus relates to Shares being offered and sold for the accounts
of the Selling Stockholders. The Company will not receive any proceeds from the
sale of the Shares (but will receive proceeds of $903,750 if all the warrants
referred to herein are exercised). There can be no assurance that any of the
warrants will be exercised or that the Company will receive any proceeds on
exercise thereof. The Company has agreed to pay all expenses related to the
registration of the Shares. See "Plan of Distribution."
3
<PAGE> 5
SELLING STOCKHOLDERS
The following table sets forth the name of each Selling Stockholder, the
aggregate number of Shares of Common Stock beneficially owned by each Selling
Stockholder as of July 31, 1998 (including Shares that are issuable on exercise
of options and warrants), and the aggregate number of Shares registered hereby
that each Selling Stockholder may offer and sell pursuant to this Prospectus.
Because the Selling Stockholders may offer all of a portion of the Shares at any
time and from time to time after the date hereof, no estimate can be made of the
number of Shares that each Selling Stockholder may retain upon completion of the
Offering. However, assuming all of the Shares offered hereunder are sold by the
Selling Stockholders, then unless otherwise noted, after completion of the
Offering, none of the Selling Stockholders will own more than one percent (1%)
of the shares of Common Stock outstanding. Of the 4,909,698 Shares offered
hereby, 4,839,698 Shares were issued and outstanding as of July 31, 1998, and an
aggregate of 70,000 Shares have been reserved for issuance by the Company to
certain of the Selling Stockholders upon the exercise of warrants. Based on
information provided to the Company by the Selling Stockholders, no Selling
Stockholder owns one percent (1%) or more of the Company's Common Stock, except
as indicated below. Beneficial ownership after the Offering will depend on the
number of Shares sold by each Selling Stockholder. The table set forth below
does not include such additional number of Shares which may be issuable upon
exercise of warrants to prevent dilution resulting from stock splits, stock
dividends or similar events, all of which Shares, to the extent permitted under
Rule 416 of the Securities Act, are being offered by this Prospectus.
<TABLE>
<CAPTION>
SHARES SHARES TO BE
BENEFICIALLY PERCENTAGE OFFERED FOR
OWNED PRIOR OWNED PRIOR THE SELLING
TO THE TO THE STOCKHOLDER'S
SELLING STOCKHOLDERS OFFERING OFFERING ACCOUNT
-------------------- ------------ ----------- -------------
<S> <C> <C> <C>
Paul I. and Rena F. Haveson............................... 1,077,065(1) 2.75% 1,027,065
Ryan A. Haveson........................................... 7,761(2) * 7,761
Ian Albert................................................ 173,335(3) * 173,335
Betty Albert.............................................. 442,000(4) 1.13% 442,000
Eric Albert............................................... 84,333(5) * 69,333
Brian Albert.............................................. 84,333(6) * 69,333
Lisa Albert............................................... 69,333(7) * 69,333
Alan Shumway.............................................. 43,333(8) * 43,333
Katrick, Inc. ............................................ 45,454(9) * 45,454
Charles R. Fitz........................................... 50,000(10) * 50,000
Accurate Iron & Metal Co. ................................ 10,000(11) * 10,000
Judy Ferraro.............................................. 20,000(12) * 20,000
G. Robert Triesch, III.................................... 1,007,180(13) 2.58% 428,590
Andrew J. Naparano, Jr. .................................. 642,229(14) 1.64% 160,291
JANX Partners, L.P. ...................................... 790,295(15) 2.02% 790,295
McDonald & Company Securities, Inc. ...................... 37,709(16) * 18,854
Nicroloy Company.......................................... 203,692(17) * 203,692
M. Kimerling & Sons, Inc. ................................ 650,000(18) 1.66% 483,383
Jos. A. Schiavone, Corp. ................................. 435,558(19) 1.11% 435,558
Midwest Metallics, L.P. .................................. 362,088(20) * 362,088
--------- ---------
Total................................................ 6,235,698 4,909,698
========= =========
</TABLE>
- -------------------------
* less than 1%
(1) Consists of 1,027,065 shares issued in connection with the Company's
acquisition of R&P Holdings, Inc., Charles Bluestone Company, and R&P Real
Estate, Inc. (collectively, "Bluestone"). Mr. and Mrs. Haveson own such
shares in joint tenancy. Also consists of options to purchase 50,000 shares
issued to Mr. Haveson in connection with the Employment Agreement between
the Company and Mr. Haveson.
4
<PAGE> 6
(2) Consists of 7,761 shares issued in connection with the Company's
acquisition of Bluestone.
(3) Consists of 173,335 shares issued in connection with the Company's
acquisition of Superior Forge, Inc. ("Superior Forge").
(4) Consists of 442,000 shares issued in connection with the Company's
acquisition of Superior Forge.
(5) Consists of (i) 69,333 shares issued in connection with the Company's
acquisition of Superior Forge; and (ii) options to purchase 15,000 shares
issued in connection with the Employment Agreement between the Company and
Mr. Albert.
(6) Consists of (i) 69,333 shares issued in connection with the Company's
acquisition of Superior Forge; and (ii) options to purchase 15,000 shares
issued in connection with the Employment Agreement between the Company and
Mr. Albert.
(7) Consists of 69,333 shares issued in connection with the Company's
acquisition of Superior Forge.
(8) Consists of 43,333 shares issued in connection with the Company's
acquisition of Superior Forge.
(9) Consists of 45,454 shares issued in connection with the Company's
acquisition of substantially all of the assets of 138 Scrap, Inc. and
Katrick, Inc. (collectively, "138 Scrap").
(10) Consists of warrants to purchase 50,000 shares issued in connection with
the Employment Agreement between the Company and Mr. Fritz (the sole
shareholder of 138 Scrap, Inc.), pursuant to the acquisition by the Company
of substantially all of the assets of 138 Scrap.
(11) Consists of 10,000 shares issued in connection with the Company's
acquisition of substantially all of the assets of Accurate Iron & Metal Co.
("Accurate Iron & Metal").
(12) Consists of warrants to purchase 20,000 shares issued in connection with
the Employment Agreement between the Company and Ms. Ferraro, pursuant to
the acquisition of substantially all of the assets of Accurate Iron &
Metal.
(13) Consists of 857,180 shares and warrants to purchase 150,000 shares issued
in connection with the Company's acquisition of Newell Recycling of Denver,
Inc. ("Newell").
(14) Consists of 642,229 shares issued in connection with the Company's
acquisition of Naparano Iron & Metal Co. and Nimco Shredding Co.
(collectively, "Naparano").
(15) Consists of 790,295 shares issued in connection with the Company's
acquisition of Naparano.
(16) Consists of 37,709 shares issued in connection with the Company's
acquisition of Naparano.
(17) Consists of 203,692 shares issued in connection with the Company's
acquisition of substantially all of the assets of Nicroloy Company
("Nicroloy").
(18) Consists of 650,000 shares issued in connection with the Company's
acquisition of substantially all of the assets of M. Kimerling & Sons, Inc.
("Kimerling").
(19) Consists of 435,558 shares issued in connection with the Company's
acquisition of certain assets of Michael Schiavone & Sons, Inc.
("Schiavone").
(20) Consists of 362,088 shares issued in connection with the Company's
acquisition of substantially all of the assets of Midwest Metallics, L.P.
("Metallics").
There are no material relationships between any of the Selling Stockholders
and the Company or any of its predecessors or affiliates, nor have any such
material relationships existed within the past three years, except as follows:
(a) On May 27, 1998, the Company and Paul I. Haveson entered into (i)
an Employment Agreement with respect to Mr. Haveson's position as President
of Charles Bluestone Company; and (ii) a Noncompetition Agreement which
restricts Mr. Haveson's ability to compete with the Company and its
affiliates.
(b) On May 27, 1998, the Company and Rena F. Haveson entered into a
Noncompetition Agreement which restricts Ms. Haveson's ability to compete
with the Company and its affiliates.
5
<PAGE> 7
(c) On March 17, 1998, the Company entered into three separate lease
agreements to lease (with an option to purchase) certain real property from
Ian and Betty Albert (each lease having an initial lease term of five
years). The monthly base rent for the property is based on a fair market
value determination.
(d) On March 17, 1998, the Company entered into an Employment
Agreement with Ian Albert with respect to his position as President and
Chief Executive Officer of Superior Forge.
(e) On March 17, 1998, the Company entered into an Employment
Agreement with Eric Albert with respect to his position as Vice President
of Sales of Superior Forge.
(f) On March 17, 1998, the Company entered into an Employment
Agreement with Brian Albert with respect to his position as Sales Engineer
of Superior Forge.
(g) On March 17, 1998, the Company entered into an Employment
Agreement with Alan Shumway with respect to his position as Finance Manager
of Superior Forge.
(h) Pursuant to the Merger Agreement, dated February 16, 1998, by and
between (among others) the Company and the Superior Forge shareholders, Ian
and Betty Albert have (under certain conditions) a right of first refusal
to purchase the stock or assets of Superior Forge.
(i) On April 29, 1998, the Company entered into a Lease Agreement with
Charles R. Fritz and a trust benefitting Mr. Fritz, for the leasing (with a
right of first refusal to purchase) of certain real estate to the Company.
The annual base rent is $60,000 and the initial lease term is one year.
(j) On April 29, 1998, the Company entered into an Option Agreement
with Charles R. Fritz and a trust benefitting Mr. Fritz for the granting of
an option to the Company to purchase the land subject to the lease
described in the immediately preceding paragraph.
(k) On April 29, 1998, the Company entered into an Employment
Agreement with Charles R. Fritz with respect to Mr. Fritz's position as
President of the 138 Scrap Division of Cozzi Iron & Metal, Inc. ("Cozzi"),
pursuant to the acquisition by the Company of substantially all of the
assets of 138 Scrap.
(l) On February 26, 1998, the Company entered into an Employment
Agreement with Judy Ferraro with respect to Ms. Ferraro's position as
Senior Account Executive of Cozzi, pursuant to the acquisition by the
Company of substantially all of the assets of Accurate Iron & Metal.
(m) On July 1, 1998, the Company and Andrew J. Naparano, Jr. entered
into (i) an Employment Agreement with respect to Mr. Naparano's position as
a director and Senior Vice President of Naparano; and (ii) a Noncompetition
Agreement which restricts Mr. Naparano's ability to compete with the
Company and its affiliates.
(n) On July 1, 1998, the Company and Michael Schiavone entered into a
Noncompetition Agreement which restricts Mr. Schiavone's ability to compete
with the Company and its affiliates.
PLAN OF DISTRIBUTION
The Shares may be sold or distributed from time to time by the Selling
Stockholders, or by pledgees, donees or transferees of, or other successors in
interest to, the Selling Stockholders, directly to one or more purchasers
(including pledgees) or through brokers, dealers or underwriters who may act
solely as agents or may acquire Shares as principals, at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices, at negotiated prices, or at fixed prices, which may be changed. The
distribution of the Shares may be effected by one or more of the following
methods: (i) ordinary brokers' transactions, which may include long or short
sales; (ii) transactions involving cross or block trades or otherwise on Nasdaq;
(iii) purchases by brokers, dealers or underwriters as principals and resale by
such purchasers for their own accounts pursuant to this Prospectus; (iv) "at the
market" to or through market makers or into an existing market for the Common
Stock; (v) in other ways not involving market makers or established trading
markets, including direct sales to purchasers or sales effected through agents;
(vi) through transactions in options, swaps or other derivatives (whether
exchange-listed or otherwise); or (vii) any combination of the foregoing,
6
<PAGE> 8
or by any other legally available means. In addition, the Selling Stockholders
or their successors in interest may enter into hedging transactions with
broker-dealers who may engage in short sales of Common Stock in the course of
hedging the positions they assume with the Selling Stockholders. The Selling
Stockholders or their successors in interest may also enter into option or other
transactions with broker-dealers that require the delivery to such
broker-dealers of the Shares, which Shares may be resold thereafter pursuant to
this Prospectus.
Brokers, dealers, underwriters or agents participating in the distribution
of the Shares as agent may receive compensation in the form of discounts,
concessions or commissions from the Selling Stockholders (and, if they act as
agent for the purchaser of such Shares, from such purchaser). Such discounts,
concessions or commissions as to a particular broker, dealer, underwriter or
agent might be greater or less than those customary in the type of transaction
involved.
The Selling Stockholders and any such brokers, dealers or other agents that
participate in such distribution may be deemed to be "underwriters" within the
meaning of the Securities Act, and any discounts, commissions or concessions
received by the Selling Stockholders and any such brokers, dealers or other
agents might be deemed to be underwriting discounts and commissions under the
Securities Act. Neither the Company nor the Selling Stockholders can presently
estimate the amount of any such compensation. The Company knows of no existing
arrangements between any Selling Stockholder and any other Selling Stockholder,
broker, dealer or other agent relating to the sale or distribution of the
Shares.
Under applicable rules and regulations under the Exchange Act, any person
engaged in a distribution of any of the Shares may not simultaneously engage in
market activities with respect to the Common Stock for the applicable period
under Regulation M prior to the commencement of such distribution. In addition
and without limiting the foregoing, the Selling Stockholders will be subject to
applicable provisions of the Exchange Act and the rules and regulations
thereunder, including, without limitation, Rules 10b-5 and Regulation M, which
may limit the timing of purchases and sales of any of the Shares by the Selling
Stockholders. All of the foregoing may affect the marketability of the Common
Stock.
The Company will pay substantially all of the expenses incident to this
Offering of the Shares by the Selling Stockholders other than commissions,
concessions and discounts of brokers, dealers or other agents. Each Selling
Stockholder may indemnify any broker, dealer, or other agent that participates
in transactions involving sales of the Shares against certain liabilities,
including liabilities arising under the Securities Act. The Company has agreed
to indemnify certain Selling Stockholders and any such statutory "underwriter"
and controlling persons of such "underwriter" against certain liabilities,
including certain liabilities under the Securities Act.
In order to comply with certain states' securities laws, if applicable, the
Shares will be sold in such jurisdictions only through registered or licensed
brokers or dealers.
DESCRIPTION OF CAPITAL STOCK
The Certificate of Incorporation (as amended) of the Company (the
"Certificate of Incorporation") authorizes capital stock consisting of
80,000,000 shares of Common Stock, par value $.01 per share, and 4,000,000
shares of preferred stock without designation, par value $0.01 per share
("Preferred Stock"). There were 39,099,812 shares of Common Stock issued and
outstanding as of July 29, 1998. Additionally, the Board of Directors has
designated 36,000 shares of Preferred Stock as "Series A Preferred Stock," face
amount of $1,000 per share, 12,764 shares of which were outstanding as of July
29, 1998, and 23,000 shares of Preferred Stock as "Series B Preferred Stock,"
face amount of $1,000 per share, 19,726 shares of which were outstanding as of
July 29, 1998. The following summary description of the capital stock of the
Company is qualified in its entirety by reference to the Certificate of
Incorporation and Bylaws of the Company.
Common Stock. Each share of Common Stock is entitled to one vote. There are
no preemptive, subscription, conversion or redemption rights pertaining to the
shares of Common Stock. Stockholders are entitled to receive dividends as
declared by the Board of Directors out of assets legally available therefor and
to share ratably in the assets of the Company available upon liquidation.
7
<PAGE> 9
Preferred Stock. The Company's certificate of incorporation grants the
Board of Directors the right to cause the Company to issue, from time to time,
all or part of the preferred stock remaining undesignated in one or more series,
and to fix the number of shares of preferred stock remaining undesignated and
determine or alter for each series, the voting powers, full, limited, or none,
and other designations, preferences, or relative, participating, optional or
other special rights and such qualifications, limitations, or restrictions
thereof. On August 8, 1997, the Company designated 36,000 shares of preferred
stock as "Series A Convertible Preferred Stock," par value $.01 per share
(Stated Value of $1,000 per share). On November 20, 1997, the Company designated
23,000 shares of preferred stock as "Series B Convertible Preferred Stock," par
value $.01 per share (Stated Value of $1,000 per share).
The Series A Preferred Stock has a "Liquidation Preference" equal to $1,000
per share plus any accrued and unpaid dividends. Upon the liquidation,
dissolution or winding up of the Company, holders of the Series A Preferred
Stock are entitled to receive payment of the Liquidation Preference on a pro
rata basis based on the Liquidation Preference of the preferred stock held by
each holder before any payment is made to holders of Common Stock or any stock
of the Company junior to the Series A Preferred Stock.
Dividends on the Series A Preferred Stock accrue at an annual rate of 6% of
the Stated Value and are payable in cash or, at the Company's option, and upon
satisfaction of certain conditions, in additional shares of Series A Preferred
Stock. The holders of Series A Preferred Stock are able to convert the shares of
Series A Preferred Stock into Common Stock at a price equal to the lower of: (i)
$18.30 (to be adjusted to reflect stock splits, stock dividends or similar
events); or (ii) 85% of the average closing bid price for the common stock for
the five trading days prior to the conversion date.
If the conversion of the Series A Preferred Stock would result in the
holders receiving more than 2,500,000 shares of Common Stock, then the Company
may, in certain circumstances, redeem any shares of Series A Preferred Stock in
excess of 2,500,000 shares at a redemption price equal to: (i) 117% of the
Stated Value of the shares; plus (ii) any accrued and unpaid dividends on such
shares. Any shares of Series A Preferred Stock which have not been converted on
or before August 8, 2000 (the "Maturity Date") will automatically be converted
to shares of Common Stock at the Maturity Date. However, if, at the Maturity
Date any of the "Mandatory Conversion Conditions" are not satisfied, then the
Company will be required to pay the holders of Series A Preferred Stock cash in
an amount equal to the Liquidation Preference for each share of Series A
Preferred Stock owned by the holder. "Mandatory Conversion Conditions" include:
(i) a registration statement covering the resale of all of the shares of Common
Stock issuable upon conversion of the Series A Preferred Stock is effective, or
such resale may be made under Rule 144(k) under the Securities Act.
The Series A Preferred Stock does not grant holders voting rights except
that, so long as the Series A Preferred Stock is outstanding, without the prior
approval of the holders of at least a majority of all shares of the Series A
Preferred Stock outstanding at the time, the Company may not: (i) increase the
number of shares of Series A Preferred Stock which the Company is authorized to
issue; (ii) alter or change the rights, preferences or privileges of the Series
A Preferred Stock or any other capital stock of the Company so as to adversely
affect the Series A Preferred Stock; or (iii) create any new class or series of
capital stock having a preference over the Series A Preferred Stock as to
distribution of assets upon liquidation, dissolution or winding up of the
Company. Approval of holders of the Series A Preferred Stock as to actions
described in (ii) and (iii) above will not be required if the average closing
price for the Common Stock on the five trading days immediately preceding the
effective date of such a change is equal to or exceeds $27.45 per share.
The Series B Preferred Stock has a liquidation preference equal to $1,000
per share plus any accrued and unpaid dividends. Upon the liquidation,
dissolution or winding up of the Company, holders of the Series B Preferred
Stock are entitled to receive payment of the liquidation preference on a pro
rata basis based on the Liquidation Preference of the stock held by each holder
before any payment is made to holders of Common Stock or any stock of the
Company junior to the Series B Preferred Stock.
Dividends on the Series B Preferred Stock accrue, whether or not declared
by the Board of Directors, at an annual rate of 4.5% of the Stated Value of each
outstanding share of Series B Preferred Stock. Dividends
8
<PAGE> 10
are payable in cash or, at the Company's option, and upon satisfaction of
certain conditions, in additional shares of Series B Preferred Stock.
The holders of Series B Preferred Stock may convert shares of Series B
Preferred Stock into Common Stock at a price equal to the lowest of: (i) 120% of
the closing bid price for the Common Stock on the date of purchase of the Series
B Preferred Stock (to be adjusted to reflect stock splits, stock dividends or
similar events) (the "Fixed Conversion Price"); (ii) 92.5% of the average
closing bid price for the Common Stock for the five trading days prior to the
date of the conversion notice; or (iii) if applicable, the lowest traded price
of the Common Stock during the time when the Common Stock is not listed on
Nasdaq or listed on the New York Stock Exchange or other national securities
exchange.
If the conversion of the Series B Stock would result in the holders
receiving more than 2,000,000 Shares of Common Stock, then the Company may, in
certain circumstances, redeem any shares of Series B Stock in excess of
2,000,000 shares at a redemption price equal to: (i) 117% of the Stated Value of
the shares; plus (ii) any accrued and unpaid dividends on such shares. Any
shares of Series B Preferred Stock which have not been converted within three
years from the date of purchase will automatically be converted to shares of
Common Stock at the maturity date of the Series B Preferred Stock. However, if,
at the maturity date, a registration statement covering the resale of all of the
shares of Common Stock issuable upon conversion of the Series B Preferred Stock
is not effective, and resale may not be made under Rule 144(k) under the
Securities Act, then the Company will be required to pay to the holders of
Series B Preferred Stock cash in an amount equal to the liquidation preference
for the shares of Series B Preferred Stock owned by the holder.
The Series B Preferred Stock does not grant holders voting rights, except
that, so long as shares of Series B Preferred Stock are outstanding, without the
prior approval of the holders of at least a majority of all shares of the Series
B Preferred Stock outstanding at the time, the Company may not: (i) increase the
number of shares of Series B Preferred Stock which the Company is authorized to
issue; (ii) alter or change the rights, preferences or privileges of the Series
B Preferred Stock or any other capital stock of the Company so as to adversely
affect the Series B Preferred Stock; or (iii) create any new class or series of
capital stock having a preference over the Series B Preferred Stock as to
distribution of assets upon liquidation, dissolution or winding up of the
Company. Approval of holders of the Series B Preferred Stock as to actions
described in (ii) and (iii) above will not be required if the average closing
price for the Common Stock on the five trading days immediately preceding the
effective date of such a change is equal to or exceeds 150% of the Fixed
Conversion Price.
Certificate of Incorporation and Bylaws. The Company's Certificate of
Incorporation was amended on April 9, 1996 to change the Company's corporate
name to "Metal Management, Inc." The directors of the Company are elected each
year at the annual meeting of the stockholders for terms of one year and until
their successors are elected and qualified; existing directors may nominate and
elect qualified persons to fill vacancies on the Board of Directors.
Stockholders' Agreement. Albert A. Cozzi, Frank J. Cozzi and Gregory P.
Cozzi (collectively, the "Cozzi Stockholders"), Samstock, L.L.C. ("Samstock")
and Messrs. Jacobs and Jennings (collectively, the "MTLM Stockholders") and the
Company entered into a stockholders agreement dated as of December 19, 1997 and
having a term of ten years, unless renewed or extended (the "Stockholders
Agreement"). Under the Stockholders Agreement, the Cozzi Stockholders, Samstock
and the MTLM Stockholders have agreed that each group will act in a manner to
cause the nomination of the directors slated for election at each annual meeting
of the Company, five of whom shall be selected by the Cozzi Stockholders and
five of whom shall be selected by the MTLM Stockholders (provided that each
group has agreed to nominate one individual, independent and unaffiliated from
each group or the Company, as part of its slate) and one of whom shall be
selected by Samstock. The Stockholders Agreement further requires each group to
vote for the other group's nominees for election to the Board and to vote for
proposals, if and when presented by the Company, to amend the Company's
organizational documents to require the approval of at least two-thirds of the
Board of Directors to, among other things: (i) amend the Company's certificate
of incorporation or bylaws; (ii) liquidate or merge the Company; (iii) sell
substantially all of the Company's assets; (iv) elect or remove officers; (v)
adopt an annual budget; (vi) borrow funds, sell assets or make capital
expenditures exceeding
9
<PAGE> 11
$5 million; (vii) issue or register the Company's securities; or (viii) declare
or pay any dividends or distributions.
Transfer Agent and Registrar. The Transfer Agent and Registrar for the
Common Stock is LaSalle National Bank of Chicago.
LEGAL MATTERS
The validity of the Shares offered hereby will be passed upon for the
Company and the Selling Stockholders by Mayer, Brown & Platt, Chicago, Illinois.
EXPERTS
The consolidated financial statements of the Company incorporated in this
Prospectus by reference to the Company's Annual Report on Form 10-K for the year
ended March 31, 1998, the supplementary consolidated financial statements of the
Company incorporated by reference to the Company's Form 8-K dated July 1, 1998,
the financial statements of Aerospace Metals, Inc. incorporated by reference to
the Company's Form 8-K dated May 1, 1998, and the combined financial statements
of Naparano Iron & Metal Co. and Nimco Shredding Co. incorporated by reference
to the Company's Form 8-K (and amendment thereto on Form 8-K/A) dated July 1,
1998, have been so incorporated in reliance on the reports of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
The consolidated balance sheets of Cozzi Iron & Metal, Inc. and
subsidiaries as of December 31, 1996 and 1995 and the related consolidated
statements of income, stockholders' equity, and cash flows for each of the three
years in the period ended December 31, 1996 incorporated in this Prospectus by
reference from the Company's Proxy Statement, dated November 20, 1997, have been
audited by Deloitte & Touche LLP, independent auditors, as stated in their
report, which is incorporated herein by reference, and have been so incorporated
in reliance upon the report of such firm given upon their authority as experts
in accounting and auditing.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed with the Commission and are
incorporated herein by reference (Commission File No. 0-14836):
(1) The Company's Annual Report on Form 10-K for the year ended March
31, 1998.
(2) The Company's Proxy Statement dated November 20, 1997 (relating to
the acquisition of Cozzi Iron & Metal, Inc. and including historical and
pro forma financial statements).
(3) The Company's Current Report on Form 8-K dated May 1, 1998
(relating to the acquisition of Aerospace Metals, Inc. and its consolidated
subsidiaries and including historical and pro forma financial statements).
(4) The Company's Current Report on Form 8-K dated May 13, 1998
(relating to the sale by the Company, in a Rule 144A private offering, of
$180 million of senior subordinated notes).
(5) The Company's Current Report on Form 8-K dated July 1, 1998 (filed
July 2, 1998) (providing supplementary consolidated financial statements of
the Company that give effect to the Company's acquisition of R&P Holdings,
Inc. as a pooling of interests).
(6) The Company's Current Report on Form 8-K dated July 1, 1998 (filed
July 7, 1998), and amendment thereto on Form 8-K/A dated July 1, 1998
(filed July 10, 1998) (relating to the acquisition of Naparano Iron & Metal
Co. and Nimco Shredding Co. and including historical and pro forma
financial statements).
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the Offering shall be deemed to
10
<PAGE> 12
be incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained in a document or
information incorporated or deemed to be incorporated herein by reference shall
be deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any subsequently filed document
that also is, or is deemed to be, incorporated herein by reference, modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The making of a modifying or superseding statement shall not be deemed an
admission that the modified or superseded statement, when made, constituted a
misrepresentation, an untrue statement of a material fact or an omission to
state a material fact that is required to be stated or that is necessary to make
a statement not misleading in light of the circumstances in which it was made.
The Company hereby undertakes to provide without charge to each person
including any beneficial owner to whom a copy of this Prospectus has been
delivered, upon written or oral request of the person, a copy of any or all of
the foregoing documents or information referred to above that has been
incorporated herein by reference in this Prospectus (other than exhibits to
documents, unless these exhibits are specifically incorporated by reference into
the documents). Requests for these documents should be made to Mr. Robert C.
Larry at the Company's principal executive offices located at 500 North Dearborn
Street, Suite 405, Chicago, Illinois 60610; telephone number (312) 645-0700.
11
<PAGE> 13
- ------------------------------------------------------
- ------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS, AND IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER OF SOLICITATION BY ANYONE IN ANY
JURISDICTION IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT
QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION.
------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information.................. 2
The Company............................ 3
Use of Proceeds........................ 3
Selling Stockholders................... 4
Plan of Distribution................... 6
Description of Capital Stock........... 7
Legal Matters.......................... 10
Experts................................ 10
Incorporation of Certain Documents by
Reference............................ 10
</TABLE>
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
METAL MANAGEMENT, INC.
4,909,698
SHARES OF COMMON STOCK
($.01 PAR VALUE)
-----------------------
PROSPECTUS
-----------------------
, 1998
- ------------------------------------------------------
- ------------------------------------------------------
<PAGE> 14
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the estimated expenses payable by the
Registrant in connection with the filing of this Registration Statement. All of
such expenses, other than the filing fee for the Commission, are estimates.
<TABLE>
<S> <C>
Securities and Exchange Commission Filing Fee.................................................... $ 9,820
Printing and Engraving Expenses.................................................................. $ 10,000*
Legal Fees and Expenses.......................................................................... $ 10,000*
Accounting Fees and Expenses..................................................................... $ 10,000*
Blue Sky Fees and Expenses....................................................................... $ 0
--------
Total ............................................................................... $ 39,820
========
</TABLE>
* estimated for purposes of this filing
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Pursuant to the provisions of Section 145(a) of the Delaware General
Corporation Law, the Company has the power to indemnify anyone made or
threatened to be made a party to any threatened, pending, or completed action,
suit, or proceeding, whether civil, criminal, administrative, or investigative
(other than an action by or in the right of the Company) because such person is
or was a director or officer of the Company against expenses (including
attorneys' fees), judgments, fines, and amounts paid in settlement actually and
reasonably incurred in the defense or settlement of such action, suit, or
proceeding, provided that (i) such person acted in good faith and in a manner he
reasonably believed to be in or not opposed to the Company's best interest and
(ii) in the case of a criminal proceeding such person had no reasonable cause to
believe his conduct was unlawful.
With respect to an action or suit by or in the right of the Company to
procure a judgment in its favor, Section 145(b) of the Delaware General
Corporation Law provides that the Company shall have the power to indemnify
anyone who was, is, or is threatened to be made a party to a threatened,
pending, or completed action or suit brought by or in the right of the Company
to procure a judgment in its favor because such person is or was a director or
officer of the Company against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection with the defense or settlement of such
action or suit, provided that such person acted in good faith and in a manner he
reasonably believed to be in or not opposed to the Company's best interests,
except that no indemnification shall be made in a case in which such person
shall have been adjudged to be liable to the Company unless and only to the
extent that the Court of Chancery or the court in which such action or suit was
brought shall have determined upon application that, despite the adjudication of
liability, but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses.
Indemnification as described above shall only be granted in a specific
case upon a determination that indemnification is proper under the circumstances
using the applicable standard of conduct which is made by (a) a majority of a
quorum of directors who were not parties to such proceeding, (b) independent
S-1
<PAGE> 15
legal counsel in a written opinion if such quorum cannot be obtained or if a
quorum of disinterested directors so directs, or (c) the shareholders of the
Company.
Section 145(g) of the Delaware General Corporation Law permits the
purchase and maintenance of insurance to indemnify directors and officers
against any liability asserted against or incurred by them in any such capacity,
whether or not the Company itself would have the power to indemnify any such
director or officer against such liability. The Company has purchased this type
of insurance, has paid and intends to continue paying the premiums thereon.
The Company's Amended Certificate of Incorporation provides for the
indemnification of directors and officers of the Company to the fullest extent
permitted by Section 145 of the Delaware General Corporation Law, as the same
may be amended or supplemented. The Certificate of Incorporation further
provides that the indemnification provided for therein shall not be exclusive of
any rights to which those indemnified may be entitled under any bylaw,
agreement, vote of shareholders or disinterested directors, or otherwise.
The Amended Certificate of Incorporation also contains a provision that
eliminates the personal liability of the Company's directors to the Company or
its shareholders for monetary damages for breach of fiduciary duty as a
director. The provision does not limit a director's liability for (i) breaches
of duty of loyalty to the Company or its shareholders, (ii) acts or omissions
not in good faith, involving intentional misconduct or involving knowing
violations of law, (iii) the payment of unlawful dividends or unlawful stock
repurchases or redemptions under Section 174 of the Delaware General Corporation
Law, or (iv) transactions in which the director received an improper personal
benefit. Depending on judicial interpretation, the provision may not affect
liability for violations of the federal securities laws.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
The Company understands that the staff of the Securities and Exchange
Commission is of the opinion that statutory, charter and contractual provisions
as are described above have no effect on claims arising under the federal
securities laws. The Company is not aware of any material threatened or ongoing
litigation or proceeding that may result in a claim for such indemnification.
ITEM 16. EXHIBITS
A list of exhibits filed herewith or incorporated by reference herein
is contained in the Exhibit Index, which is incorporated herein by reference.
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that, in the
opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a
director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
of whether such indemnification by it is against public policy as
expressed in the Securities Act of 1933 and will be governed by the
final adjudication of such issue.
(2) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(a) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(b) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in the
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was
registered) and any deviation from the low or high and of the
estimated maximum offering range may be reflected in the form
of prospectus filed with the Commission pursuant to Rule 424(b)
if, in the aggregate, the changes in volume and price
represent no more than 20 percent change in the maximum
aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration
statement; and
(c) To include any material information with respect to the plan of
distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement.
(3) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
(4) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(5) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report
pursuant to Section 13(a) or 15(d) of the Securities Exchange Act
of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities
Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(6) That:
(a) For purposes of determining any liability under the
Securities Act of 1933, the information omitted from the
form of prospectus filed as part of this registration
statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act of 1933
shall be deemed to be part of this registration statement as
of the time it was declared effective.
(b) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that
contains a form of prospectus shall be deemed to be a new
registration statement relating to the securities offered
therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering
thereof.
S-2
<PAGE> 16
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements on Form S-3 and has duly caused this
Amendment No. 1 to its Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in Chicago, Illinois, on July 31,
1998.
METAL MANAGEMENT, INC.
By: /s/ GERARD M. JACOBS
----------------------------------
Gerard M. Jacobs
Director and Chief Executive Officer
Each person whose name appears below has previously authorized
each of Gerard M. Jacobs and T. Benjamin Jennings or either of them as his
true and lawful attorney-in-fact with full power of substitution to execute in
the name and on behalf of each person, individually and in each capacity stated
below, and to file, any and all amendments to this Registration Statement,
including any and all post-effective amendments thereto.
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Amendment No. 1 to the Registration Statement has been signed by
the following persons in the capacities indicated on July 31, 1998.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ GERARD M. JACOBS Director and Chief Executive Officer
- ----------------------------------- (Principal Executive Officer)
Gerard M. Jacobs
* Director, Chairman of the Board and
- ----------------------------------- Chief Development Officer
T. Benjamin Jennings
* Director, President and Chief Operating Officer
- -----------------------------------
Albert A. Cozzi
* Director and Executive Vice President
- -----------------------------------
George A. Isaac, III
</TABLE>
II-7
<PAGE> 17
SIGNATURE TITLE
--------- -----
* Director and Vice President
- ---------------------------------
Frank J. Cozzi
* Director
- ---------------------------------
Gregory P. Cozzi
* Director
- ---------------------------------
Rod F. Dammeyer
* Director
- ---------------------------------
Christopher G. Knowles
* Director
- ---------------------------------
William T. Proler
* Director
- ---------------------------------
Harold Rubenstein
* Vice President, Finance, Treasurer and Chief
- --------------------------------- Financial Officer (Principal Financial and
Robert C. Larry Accounting Officer)
* /s/ Gerard M. Jacobs
- ----------------------
Gerard M. Jacobs as
attorney-in-fact
II-8
<PAGE> 18
METAL MANAGEMENT, INC.
EXHIBIT INDEX
<TABLE>
<CAPTION>
Number Exhibit Description
- ------ -------------------
<S> <C>
1.1 Purchase Agreement, dated May 8, 1998, among the Company, the
Guarantors, Goldman, Sachs & Co., BT Alex. Brown Incorporated and
Salomon Brothers Inc (incorporated by reference to Exhibit 10.1 of the
Company's report on Form 8-K dated May 13, 1998).
2.1 Agreement and Plan of Merger, dated May 16, 1997 (as amended), among
Cozzi Iron & Metal, Inc. and its shareholders, the Company and
CIM Acquisition, Co. (incorporated by reference to Exhibit 2.1 of the
Company's report on Form 8-K dated December 1, 1997).
2.2 Stock Purchase Agreement, dated as of May 24, 1998, by and among the
Company, Joseph F. Naporano and Andrew J. Naporano, Jr. (incorporated
by reference to Exhibit 2.1 of the Company's report on Form 8-K dated
July 1, 1998).
2.3* Asset Purchase Agreement, dated as of July 7, 1998, by and among the
Company, Kimerling, Kimerling Acquisition Corp. and the stockholders of
Kimerling.
3.1 Certificate of Incorporation of the Company, as amended through June 23,
1998 (incorporated by reference to Exhibit 3.1 of the Company's Annual
Report on Form 10-K for the year ended March 31, 1998).
3.2 Amended and Restated Bylaws of the Company (incorporated by reference
to Exhibit 3.2 of the Company's Annual Report on Form 10-K for the year
ended March 31, 1998).
4.1 Specimen of Stock Certificate (incorporated by reference to Exhibit 4.1
of the Company's Annual Report on Form 10-K for the year ended March 31,
1997).
4.2 1995 Stock Plan and Form of Option Agreement (incorporated by reference
to Exhibit 4.2 of the Company's Annual Report on Form 10-K for the year
ended March 31, 1997).
4.3 1996 Director Option Plan and Form of Option Agreement (incorporated by
reference to Exhibit 4.3 of the Company's Annual Report on Form 10-K for
the year ended March 31, 1997).
</TABLE>
S-5
<PAGE> 19
<TABLE>
<S> <C>
4.4 Registration Rights Agreement, dated as of June 23, 1997, by and
between the Company and the George A. Isaac, III Second Revocable
Trust (incorporated by reference to Exhibit 4.4 of the Company's
Annual Report on Form 10-K for the year ended March 31, 1998).
4.5 Registration Rights Agreement, dated as of November 20, 1997, by and
among the Company, Proprietary Convertible Investment Group, Inc.,
and Capital Ventures International (incorporated by reference to
Exhibit 10.5 of the Company's report on Form 8-K dated December 1,
1997).
4.6 Shelf Registration Rights Agreement, dated December 19, 1997, between
the Company and Samstock, L.L.C. (incorporated by reference to
Exhibit 4.2 of the Company's report on Form 8-K dated December 18,
1997).
4.7 Amended and Restated Registration Rights Agreement, dated December
19, 1997, among the Company, T. Benjamin Jennings, Gerard M. Jacobs,
Albert A. Cozzi, Frank J. Cozzi, Gregory P. Cozzi and Samstock,
L.L.C. (incorporated by reference to Exhibit 4.3 of the Company's
report on Form 8-K dated December 18, 1997).
4.8 Registration Rights Agreement, dated December 18, 1997, between the
Company and Ronald I. Romano, Lolita A. Romano, Ronald T. Romano and
Ryan E. Romano (incorporated by reference to Exhibit 4.4 of the
Company's report on Form 8-K dated January 2, 1998).
4.9 Registration Rights Agreement, dated January 20, 1998, by and between
the Company and Aerospace Metals, Inc. (incorporated by reference to
Exhibit 10.3 of the Company's report on Form 8-K dated January 20,
1998).
4.10 Registration Rights Agreement, dated January 30, 1998, by and between
the Company and Newell Phoenix, L.L.C. (incorporated by reference to
Exhibit 4.5 of the Company's registration statement on Form S-3 dated
February 10, 1998).
4.11 Indenture, dated as of May 13, 1998, among the Company, the
Guarantors (as defined therein) and LaSalle National Bank, as Trustee
(incorporated by reference to Exhibit 10.2 of the Company's report on
Form 8-K dated May 13, 1998).
4.12 First Supplemental Indenture, dated as of May 31, 1998, executed by
R&P Holdings, Inc., Charles Bluestone Company and R&P Real Estate,
Inc., amending Indenture, dated as of May 13, 1998, among the
Company, the Guarantors and LaSalle National Bank, as Trustee
(incorporated by reference to Exhibit 4.12 of the Company's Annual
Report on Form 10-K for the year ended March 31, 1998).
4.13 Second Supplemental Indenture, dated as of June 19, 1998, executed by
Metal Management Gulf Coast, Inc., amending Indenture, dated as of
May 13, 1998, among the Company, the Guarantors and LaSalle National
Bank, as Trustee (incorporated by reference to Exhibit 4.13 of the
Company's Annual Report on Form 10-K for the year ended March 31,
1998).
4.14 Third Supplemental Indenture, dated as of June 24, 1998, executed by
Newell Recycling West, Inc., amending Indenture, dated as of May 13,
1998, among the Company, the Guarantors and LaSalle National
Bank, as Trustee (incorporated by reference to Exhibit 4.14 of the
Company's report on S-4 dated July 10, 1998).
4.15 Fourth Supplemental Indenture, dated as of July 1, 1998, executed by
Naporano Iron & Metal Co. and Nimco Shredding Co., amending
Indenture, dated as of May 13, 1998, among the Company, the
Gaurantors and LaSalle National Bank, as Trustee (incorporated by
reference to Exhibit 4.15 of the Company's report on S-4 dated July
10, 1998).
4.16 Fifth Supplemental Indenture, dated as of July 1, 1998, executed by
Michael Schiavone & Sons, Inc. and Torrington Scrap Company,
amending Indenture, dated as of May 13, 1998, among the Company, the
Guarantors and LaSalle National Bank, as Trustee (incorporated by
reference to Exhibit 4.16 of the Company's report on S-4 dated July
10, 1998).
4.17 Sixth Supplemental Indenture, dated as of July 7, 1998, executed by
M. Kimerling & Sons, Inc., amending Indenture, dated as of May 13,
1998, among the Company, the Guarantors and LaSalle National Bank,
as Trustee (incorporated by reference to Exhibit 4.17 of the
Company's report on S-4 dated July 10, 1998).
4.18 Seventh Supplemental Indenture, dated as of July 9, 1998, executed by
Nicroloy Company, amending Indenture, dated as of May 13, 1998,
among the Company, the Guarantors and LaSalle National Bank, as
Trustee (incorporated by reference to Exhibit 4.18 of the Company's
report on S-4 dated July 10, 1998).
4.19 Exchange and Registration Rights Agreement, dated as of May 13, 1998,
by and among the Company, the Guarantors, Goldman, Sachs & Co., BT
Alex. Brown Incorporated and Salomon Brothers Inc (incorporated by
reference to Exhibit 10.3 of the Company's report on Form 8-K dated
May 13, 1998).
4.20* Declaration of Registration Rights, dated March 17, 1998, by the
Company for the benefit of Ian Albert, Betty Albert, Eric Albert,
Brian Albert, Lisa Albert and Alan Shumway.
4.21* Registration Rights Agreement, dated April 29, 1998, by and between
the Company and 138 Scrap, Inc. and Katrick, Inc.
4.22* Registration Rights Agreement, dated as of June 24, 1998, by and
between the Company and G. Robert Triesch, III.
4.23 Registration Rights Agreement, dated as of July 1, 1998, by and among
the Company, McDonald & Company Securities, Inc., Joseph F. Naparano
and Andrew J. Naparano, Jr. (incorporated by reference to Exhibit
10.1 of the Company's report on Form 8-K dated July 1, 1998).
4.24* Registration Rights Agreement, dated as of July 9, 1998, by and
between the Company and Nicroloy.
4.25* Registration Rights Agreement, dated as of July 7, 1998, by and
between the Company and Kimerling.
4.26* Registration Rights Agreement, dated as of July 7, 1998, by and
between the Company and Metallics.
5.1** Opinion of Mayer, Brown & Platt.
</TABLE>
S-6
<PAGE> 20
<TABLE>
<S> <C>
23.1* Consent of Mayer, Brown & Platt (contained in Exhibit 5.1).
23.2* Consent of PricewaterhouseCoopers LLP.
23.3* Consent of Deloitte & Touche LLP.
24.1 Powers of Attorney (contained in the signature page of this Registration
Statement).
</TABLE>
- -------------------------
* Included with this Registration Statement.
**To be filed by amendment.
S-7
<PAGE> 1
EXHIBIT 2.3
ASSET PURCHASE AGREEMENT
BETWEEN
METAL MANAGEMENT, INC.,
KIMERLING ACQUISITION CORP.,
M. KIMERLING & SONS, INC.,
AND
THE STOCKHOLDERS OF M. KIMERLING & SONS, INC.
DATED: JULY 7, 1998
<PAGE> 2
TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS.......................................................1
ARTICLE 2 BASIC TRANSACTION.................................................7
2.1 Purchase and Sale of Assets.......................................7
2.2 Assumption of Liabilities.........................................8
2.3 Purchase Price....................................................8
2.4 Adjustment to Purchase Price......................................8
2.5 The Closing.......................................................8
2.6 Deliveries at the Closing.........................................9
2.7 Allocation........................................................9
2.8 Determination of Actual Working Capital...........................9
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF SELLER
AND STOCKHOLDERS...........................................................9
3.1 Organization of Seller............................................9
3.2 Authorization of Transaction.....................................10
3.3 Noncontravention.................................................10
3.4 Brokers' Fees....................................................10
3.5 Title to Assets..................................................10
3.6 Subsidiaries.....................................................11
3.7 Financial Statements.............................................11
3.8 Events Subsequent to Most Recent Fiscal Month End................11
3.9 Undisclosed Liabilities..........................................13
3.10 Legal Compliance.................................................14
3.11 Tax Matters......................................................14
3.12 Real Property....................................................15
3.13 Intellectual Property............................................18
3.14 Tangible Assets..................................................19
3.15 Inventory........................................................19
3.16 Contracts, Permits, Licenses, etc................................20
3.17 Notes and Accounts Receivable....................................21
3.18 Powers of Attorney...............................................21
3.19 Insurance........................................................22
3.20 Litigation.......................................................22
3.21 Product Warranty.................................................23
3.22 Product Liability................................................23
3.23 Employees........................................................23
3.24 Employee Benefits................................................23
3.25 Guaranties.......................................................26
3.26 Environmental, Health, and Safety Matters........................26
3.27 Certain Business Relationships With Seller.......................27
i
<PAGE> 3
3.28 Customers and Suppliers..........................................28
3.29 Fiscal 1998 Earnings.............................................28
3.30 Disclosure.......................................................28
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF BUYER..........................28
4.1 Organization of Buyer............................................28
4.2 Authorization of Transaction.....................................28
4.3 Noncontravention.................................................28
4.4 Brokers' Fees....................................................29
4.5 Filings with the Securities and Exchange Commission..............29
ARTICLE 5 PRE-CLOSING COVENANTS............................................29
5.1 General..........................................................29
5.2 Notices and Consents.............................................29
5.3 Operation of Business............................................30
5.4 Preservation of Business.........................................30
5.5 Full Access......................................................30
5.6 Notice of Developments...........................................30
5.7 Exclusivity......................................................30
5.8 Title Insurance..................................................31
5.9 Surveys..........................................................31
5.10 Environmental Concerns...........................................32
5.11 Permits, Licenses and Contracts..................................32
ARTICLE 6 CONDITIONS TO OBLIGATION TO CLOSE................................32
6.1 Conditions to Obligation of MTLM and Buyer.......................32
6.2 Conditions to Obligation of Seller and the Stockholders..........34
ARTICLE 7 TERMINATION......................................................35
7.1 Termination of Agreement.........................................35
7.2 Effect of Termination............................................36
ARTICLE 8 REMEDIES FOR BREACHES OF THIS AGREEMENT..........................36
8.1 Survival of Representations and Warranties.......................36
8.2 Indemnification Provisions for Benefit of Buyer..................37
8.3 Indemnification Provisions for Benefit of Seller and
the Stockholders...............................................37
8.4 Procedure for Matters Involving Third Parties....................37
8.5 Notice of Claim..................................................38
8.6 Limitations on Seller's and the Stockholders'
Indemnification Liability......................................39
8.7 Limitations on Buyer's Indemnification Liability.................39
8.8 Right to Escrow Shares...........................................39
8.9 Other Indemnification Provisions.................................39
ii
<PAGE> 4
ARTICLE 9 POST-CLOSING COVENANTS...........................................40
9.1 General..........................................................40
9.2 Litigation Support...............................................40
9.3 Transition.......................................................40
9.4 Confidentiality..................................................40
9.5 Covenant Not to Compete..........................................41
9.6 MTLM Stock Certificates..........................................41
9.7 Air Permit Requirement...........................................42
9.8 Incorporation of Covenants.......................................42
9.9 Default by Seller................................................42
ARTICLE 10 MISCELLANEOUS....................................................42
10.1 Press Releases and Public Announcements..........................42
10.2 No Third-Party Beneficiaries.....................................43
10.3 Entire Agreement.................................................43
10.4 Succession and Assignment........................................43
10.5 Counterparts.....................................................43
10.6 Headings.........................................................43
10.7 Notices..........................................................43
10.8 Governing Law....................................................44
10.9 Amendments and Waivers...........................................44
10.10 Severability.....................................................45
10.11 Expenses.........................................................45
10.12 Construction.....................................................45
10.13 Incorporation of Annexes, Exhibits and Schedules.................45
10.14 Specific Performance.............................................45
10.15 Submission to Jurisdiction.......................................45
10.16 Bulk Transfer Laws...............................................46
iii
<PAGE> 5
ATTACHMENTS
ANNEX I -- Stockholders of Seller
ANNEX II -- Excluded Assets
ANNEX III -- Assumed Liabilities
ANNEX IV - EBITDA
Exhibit A - Assumption Agreement
Exhibit B - Bill of Sale and General Assignment
Exhibit C-1 - Form of Employment Agreement: Jonathan L. Kimerling
Exhibit C-2 - Form of Employment Agreement: David B. Kimerling
Exhibit C-3 - Form of Employment Agreement: Jeffrey H. Fisher
Exhibit C-4 - Form of Employment Agreement: Neil G. Fisher
Exhibit C-5 - Form of Employment Agreement: Elliot Miller
Exhibit D - Form of Escrow Agreement
Exhibit E - Allocation Schedule
Exhibit F - Historical Financial Statements of Seller
Exhibit G - Form of Opinion of Counsel to Seller and the Stockholders
Exhibit H - Form of Opinion of Counsel to MTLM and Buyer
Exhibit I - Registration Rights Agreement
Disclosure Schedules
iv
<PAGE> 6
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "AGREEMENT") is entered into as of
July 7, 1998, by and among Metal Management, Inc., a Delaware corporation
("MTLM"), Kimerling Acquisition Corp., a Delaware corporation ("BUYER"), M.
Kimerling & Sons, Inc., a Delaware corporation ("SELLER"), and each of the
stockholders of Seller set forth in Annex I (individually, a "STOCKHOLDER" and
collectively, the "STOCKHOLDERS").
RECITALS:
WHEREAS, Buyer desires to purchase from Seller, and Seller desires to
sell to Buyer, substantially all of the properties, business and assets of
Seller and assume certain liabilities and obligations of Seller, in accordance
with terms and conditions of this Agreement.
AGREEMENT:
NOW, THEREFORE, in consideration of the premises and the mutual
promises herein made, and in consideration of the representations, warranties,
and covenants herein contained, MTLM, Buyer, Seller and the Stockholders
(individually, a "PARTY" and collectively, the "PARTIES") agree as follows:
ARTICLE 1
DEFINITIONS
"ACCREDITED INVESTOR" has the meaning set forth in Regulation D
promulgated under the Securities Act.
"ACQUIRED ASSETS" means all right, title, and interest in and to all of
the assets of Seller, including all of its (a) real property, leaseholds and
subleaseholds therein, improvements, fixtures, and fittings thereon, and
easements, rights-of-way, and other appurtenants thereto (such as appurtenant
rights in and to public streets), (b) tangible personal property (such as
machinery, equipment, inventories of raw materials and supplies, stockpiles,
parts, furniture, automobiles, trucks, tractors, trailers, and tools), (c)
Intellectual Property, goodwill associated therewith, licenses and sublicenses
granted and obtained with respect thereto, and rights thereunder, remedies
against infringements thereof, and rights to protection of interests therein
under the laws of all jurisdictions, (d) leases, subleases, and rights
thereunder, (e) agreements, contracts, understandings, indentures, mortgages,
instruments, Security Interests, guaranties, other similar arrangements, and
rights thereunder, (f) accounts, notes, and other receivables, (g) securities
held as part of Seller's commodity hedge position, (h) claims, deposits,
prepayments, refunds, causes of action, chooses in action, rights of recovery,
rights of set off, and rights of recoupment (including any such item relating to
the payment of Taxes), (i) franchises, approvals, permits, licenses, orders,
registrations, certificates, variances,
<PAGE> 7
and similar rights obtained from governments and governmental agencies, (j)
books, records, ledgers, files, documents, correspondence, lists, plats,
architectural plans, drawings, and specifications, creative materials,
advertising and promotional materials, studies, reports, and other printed or
written materials, (k) goodwill, and (l) rights in and with respect to the
assets associated with its Employee Benefit Plans; provided, however, that the
Acquired Assets shall not include (i) the Certificate of Incorporation, Bylaws,
qualifications to conduct business as a foreign corporation, arrangements with
registered agents relating to foreign qualifications, taxpayer and other
identification numbers, seals, minute books, stock transfer books, blank stock
certificates, and other documents relating to the organization, maintenance, and
existence of Seller as a corporation, (ii) any of the rights of Seller under
this Agreement (or under any side agreement between Seller on the one hand and
MTLM or Buyer on the other hand entered into on or after the date of this
Agreement) or (iii) the assets set forth in Annex II.
"ACTUAL WORKING CAPITAL" means the Working Capital of Seller as of the
Closing Date determined in accordance with Section 2.8.
"ADVERSE CONSEQUENCES" means all actions, suits, proceedings, hearings,
investigations, charges, complaints, claims, demands, injunctions, judgments,
orders, decrees, rulings, damages, dues, penalties, fines, costs, amounts paid
in settlement, Liabilities, obligations, Taxes, liens, losses, expenses, and
fees, including, but not limited to, court costs and reasonable attorneys' fees
and expenses.
"AFFILIATE" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act.
"AFFILIATED GROUP" means any affiliated group within the meaning of
Code Section 1504(a) or any similar group defined under a similar provision of
state, local, or foreign law.
"ASSUMED LIABILITIES" means the obligation of Seller set forth in Annex
III.
"ASSUMPTION AGREEMENT" means the assumption agreement of Buyer, in form
and substance as set forth in Exhibit A.
"BASIS" means any past or present fact, situation, circumstance,
status, condition, activity, practice, plan, occurrence, event, incident,
action, failure to act, or transaction that forms or could form the basis for
any specified consequence.
"BILL OF SALE AND GENERAL ASSIGNMENT" means the bill of sale and
general assignment of Seller, in form and substance as set forth in Exhibit B.
"BUYER" has the meaning set forth in the preface to this Agreement.
2
<PAGE> 8
"CASH" means cash and cash equivalents (including marketable securities
and short term investments) calculated in accordance with GAAP applied on a
basis consistent with the preparation of the Financial Statements.
"CLAIM NOTICE" has the meaning set forth in Section 8.5.
"CLOSING" has the meaning set forth in Section 2.5.
"CLOSING DATE" has the meaning set forth in Section 2.5.
"CLOSING DATE ACTUAL WORKING CAPITAL SCHEDULE" has the meaning set
forth in Section 2.8.
"COBRA" means the requirements of Part 6 of Subtitle B of Title I of
ERISA and Code Section 4980B.
"CODE" means the Internal Revenue Code of 1986, as amended.
"CONFIDENTIAL INFORMATION" means any information concerning the
businesses and affairs of Seller that is not generally available to the public.
"DEFERRED INTERCOMPANY TRANSACTION" has the meaning set forth in Treas.
Reg. Section 1.1502-13.
"DISCLOSURE SCHEDULES" has the meaning set forth in Article 3.
"EBITDA" means net income before interest, Taxes, depreciation and
amortization determined in accordance with GAAP (consistently applied) and
giving effect to certain adjustments as set forth in Annex IV.
"EMPLOYEE BENEFIT PLAN" means any (a) nonqualified deferred
compensation or retirement plan or arrangement, (b) qualified defined
contribution retirement plan or arrangement which is an Employee Pension Benefit
Plan, (c) qualified defined benefit retirement plan or arrangement which is an
Employee Pension Benefit Plan (including any Multiemployer Plan), or (d)
Employee Welfare Benefit Plan or material fringe benefit or other retirement,
bonus, or incentive plan or program.
"EMPLOYEE PENSION BENEFIT PLAN" has the meaning set forth in ERISA
Section 3(2).
"EMPLOYEE WELFARE BENEFIT PLAN" has the meaning set forth in ERISA
Section 3(1).
"EMPLOYMENT AGREEMENTS" means the employment agreements between Buyer
and each of the following: Jonathan L. Kimerling, in general form and substance
as set forth in Exhibit C-1; David B. Kimerling, in general form and substance
as set forth in Exhibit C-2; Jeffrey H. Fisher, in general form and substance as
set forth in Exhibit C-3; Neil G. Fisher, in general form and substance
3
<PAGE> 9
as set forth in Exhibit C-4; Elliot Miller, in general form and substance as set
forth in Exhibit C-5; Luann Mann, in general form and substance as set forth in
Exhibit C-6; and John Daniels, in general form and substance as set forth in
Exhibit C-7.
"ENVIRONMENTAL, HEALTH, AND SAFETY REQUIREMENTS" shall mean all
federal, state and local statutes, regulations, ordinances and other provisions
having the force or effect of law, all judicial and administrative orders and
determinations, all contractual obligations and all common law concerning public
health and safety, worker health and safety, and pollution or protection of the
environment, including, without limitation, all those relating to the presence,
use, production, generation, handling, transportation, treatment, storage,
disposal, distribution, labeling, notification, testing, processing, discharge,
release, threatened release, control, or cleanup of any hazardous materials,
substances or wastes, chemical substances or mixtures, pesticides, pollutants,
contaminants, toxic chemicals, petroleum products or byproducts, asbestos,
polychlorinated biphenyls, noise or radiation.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA AFFILIATE" means each entity which is treated as a single
employer with Seller for purposes of Code Section 414.
"ESCROW AGENT" means AmSouth Bank or any substitute mutually acceptable
to the Parties.
"ESCROW AGREEMENT" means the escrow agreement between MTLM, Buyer,
Seller and the Escrow Agent, in form and substance as set forth in Exhibit D.
"ESCROW SHARES" means 166,667 shares of MTLM Common Stock to be held by
the Escrow Agent pursuant to the terms and conditions of the Escrow Agreement.
"ESTIMATED WORKING CAPITAL" means the Working Capital of Seller equal
to $9,000,000.00.
"EXCESS LOSS ACCOUNT" has the meaning set forth in Treas. Reg. Section
1.1502-19.
"FIDUCIARY" has the meaning set forth in ERISA Section 3(21).
"FINANCIAL STATEMENT" has the meaning set forth in Section 3.7.
"GAAP" means United States generally accepted accounting principles as
in effect from time to time.
"HART-SCOTT-RODINO ACT" means the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended.
4
<PAGE> 10
"INDEMNIFIED PARTY" has the meaning set forth in Section 8.4.
"INDEMNIFYING PARTY" has the meaning set forth in Section 8.4.
"INTELLECTUAL PROPERTY" means (a) all inventions (whether patentable or
unpatentable and whether or not reduced to practice), all improvements thereto,
and all patents, patent applications, and patent disclosures, together with all
reissuances, continuations, continuations-in-part, revisions, extensions, and
reexaminations thereof, (b) all trademarks, service marks, trade dress, logos,
trade names, and corporate names, together with all translations, adaptations,
derivations, and combinations thereof and including all goodwill associated
therewith, and all applications, registrations, and renewals in connection
therewith, (c) all copyrightable works, all copyrights, and all applications,
registrations, and renewals in connection therewith, (d) all trade secrets and
confidential business information (including ideas, research and development,
know-how, formulas, compositions, manufacturing and production processes and
techniques, technical data, designs, drawings, specifications, customer and
supplier lists, pricing and cost information, and business and marketing plans
and proposals), (e) all computer software (including data and related
documentation), (f) all other proprietary rights, and (h) all copies and
tangible embodiments thereof (in whatever form or medium).
"KNOWLEDGE" means a Person's actual knowledge after reasonable
investigation.
"LIABILITY" means any liability (whether known or unknown, whether
asserted or unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated, and whether due or to become
due), including any liability for Taxes.
"MOST RECENT BALANCE SHEET" means the balance sheet contained within
the Most Recent Financial Statements.
"MOST RECENT FINANCIAL STATEMENTS" has the meaning set forth in Section
3.7.
"MOST RECENT FISCAL MONTH END" has the meaning set forth in Section
3.7.
"MOST RECENT FISCAL YEAR END" has the meaning set forth in Section 3.7.
"MTLM" has the meaning set forth in the preface to this Agreement.
"MTLM COMMON STOCK" means the common stock, par value $.01 per share,
of MTLM.
"MULTIEMPLOYER PLAN" has the meaning set forth in ERISA Section 3(37).
5
<PAGE> 11
"ORDINARY COURSE OF BUSINESS" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).
"PARTY" has the meaning set forth in the preface to this Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation.
"PERSON" means an individual, a partnership, a limited liability
company, a corporation, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization, or a governmental entity (or any
department, agency, or political subdivision thereof).
"PROHIBITED TRANSACTION" has the meaning set forth in ERISA Section
406 and Code Section 4975.
"PUBLIC REPORTS" has the meaning set forth in Section 4.5.
"PURCHASE PRICE" has the meaning set forth in Section 2.3.
"REPORTABLE EVENT" has the meaning set forth in ERISA Section 4043.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SECURITIES EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"SECURITY INTEREST" means any mortgage, pledge, lien, encumbrance,
charge, or other security interest, other than (a) mechanic's, materialmen's,
and similar liens, (b) liens for Taxes not yet due and payable, (c) purchase
money liens and liens securing rental payments under capital lease arrangements,
and (d) other liens arising in the Ordinary Course of Business and not incurred
in connection with the borrowing of money.
"SELLER" has the meaning set forth in the preface to this Agreement.
"STOCKHOLDER" means any person who or which holds any Seller Shares as
set forth in Annex I.
"SUBSIDIARY" means any corporation, partnership, business trust,
limited liability company or similar entity with respect to which a specified
Person (or a Subsidiary thereof) owns a majority of the voting securities or
interests or has the power to vote or direct the voting of sufficient securities
or interests to elect a majority of the directors or otherwise control such
entity.
"SURVEY" has the meaning set forth in Section 5.9.
6
<PAGE> 12
"TAX" means any federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Code Section
59A), customs duties, capital stock, franchise, profits, withholding, social
security (or similar), unemployment, disability, real property, personal
property, sales, use, transfer, registration, value added, alternative or add-on
minimum, estimated, or other tax of any kind whatsoever, including any interest,
penalty, or addition thereto, whether disputed or not.
"TAX RETURN" means any return, declaration, report, claim for refund,
or information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
"THIRD PARTY CLAIM" has the meaning set forth in Section 8.4.
"TREAS. REG." means the proposed, temporary and final regulations
promulgated under the Code.
"WORKING CAPITAL" means the sum of all Cash, accounts receivable, notes
receivable, inventory, advance payments and prepaid expenses of Seller, minus
the Assumed Liabilities.
ARTICLE 2
BASIC TRANSACTION
2.1 PURCHASE AND SALE OF ASSETS. On and subject to the terms and
conditions of this Agreement, Buyer agrees to purchase from Seller, and Seller
agrees to sell, transfer, convey, and deliver to Buyer, all of the Acquired
Assets at the Closing for the consideration specified in this Article 2.
2.2 ASSUMPTION OF LIABILITIES. On and subject to the terms and
conditions of this Agreement, Buyer agrees to assume and become responsible for
all of the Assumed Liabilities at the Closing. Buyer will not assume or have any
responsibility with respect to any other obligation or Liability of Seller not
included within the definition of Assumed Liabilities.
2.3 PURCHASE PRICE. Subject to adjustment in accordance with Section
2.4, Buyer agrees to pay Seller at the Closing consideration (the "PURCHASE
PRICE") consisting of the following:
(a) $44,200,000.00 in cash, via Fedwire electronic fund transfer
(less $20,000.00 to be retained by Buyer to repair the damage
identified in Disclosure Schedule 3.8(l) or such other
business purpose mutually acceptable to Buyer and Seller);
(b) 483,333 shares of MTLM Common Stock; and
7
<PAGE> 13
(c) the Escrow Shares (to the Escrow Agent).
2.4 ADJUSTMENT TO PURCHASE PRICE. The Purchase Price will be adjusted
as follows:
(a) if the Actual Working Capital is greater than the
Estimated Working Capital, Buyer will pay to Seller an amount equal to
such excess in cash, via Fedwire electronic fund transfer, on the
Closing Date;
(b) if the Actual Working Capital is less than the Estimated
Working Capital, the cash portion of the Purchase Price set forth in
Section 2.3(a) will be reduced by an amount equal to such deficiency;
or
(c) if the Actual Working Capital is equal to the Estimated
Working Capital, there will be no adjustment to the Purchase Price.
2.5 THE CLOSING. Subject to Article 7, the closing of the transactions
contemplated by this Agreement (the "CLOSING") shall take place at the offices
of Akin, Gump, Strauss, Hauer & Feld, L.L.P. in Houston, Texas, commencing at
9:00 a.m., local time, on the second business day following the later of (a) the
satisfaction or waiver of all conditions to the obligations of the Parties to
consummate the transactions set forth in Article 6 (other than conditions with
respect to actions the respective Parties will take at the Closing itself) or
(b) the filing of the Annual Report on Form 10-K by MTLM with the Securities and
Exchange Commission (the "CLOSING DATE").
2.6 DELIVERIES AT THE CLOSING. At the Closing: (a) Seller and/or the
Stockholders will deliver to Buyer the various agreements, certificates,
instruments, documents, permits, licenses, authorizations and approvals referred
to in Section 6.1; (b) Buyer and/or MTLM will deliver to Seller the various
agreements, certificates, instruments, and documents referred to in Section 6.2;
(c) Seller and/or the Stockholders will execute, acknowledge (if appropriate),
and deliver to Buyer such other permits, licenses, authorizations, consents,
instruments of sale, transfer, conveyance, and assignment as Buyer and its
counsel may reasonably request; (d) Buyer and/or MTLM will execute, acknowledge
(if appropriate), and deliver to Seller such other instruments of assumption
with respect to the Assumed Liabilities as Seller and its counsel reasonably may
request; and (e) Buyer will deliver to Seller the Purchase Price (subject to
adjustment as provided in Section 2.4).
2.7 ALLOCATION. The Parties agree to allocate the Purchase Price (and
all other capitalizable costs) among the Acquired Assets for all purposes
(including financial accounting and tax purposes) in accordance with the
allocation schedule attached hereto as Exhibit E.
2.8 DETERMINATION OF ACTUAL WORKING CAPITAL. At least two business days
prior to the Closing Date, Seller will prepare and deliver to MTLM a detailed
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schedule of the Actual Working Capital of Seller as of the Closing Date (the
"CLOSING DATE ACTUAL WORKING CAPITAL SCHEDULE"), which shall be prepared in
accordance with GAAP applied on a basis consistent with the preparation of the
Financial Statements and reviewed by the independent certified public
accountants for Seller and MTLM.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLER AND STOCKHOLDERS
Seller and the Stockholders represent and warrant to Buyer that the
statements contained in this Article 3 are correct and complete as of the date
of this Agreement and will be correct and complete as of the Closing Date (as
though made then and as though the Closing Date were substituted for the date of
this Agreement throughout this Article 3), including the disclosure schedules
accompanying this Agreement and initialed by the Parties (the "DISCLOSURE
SCHEDULES"). The Disclosure Schedules will be (i) arranged in paragraphs
corresponding to the lettered and numbered paragraphs contained in this Article
3; (ii) delivered to Buyer at least seven days prior to execution and delivery
of this Agreement by the Parties; and (iii) if necessary, revised, and delivered
to Buyer at least seven days prior to the Closing Date.
3.1 ORGANIZATION OF SELLER. Seller is a corporation duly organized,
validly existing, and in good standing under the laws of the State of Delaware.
If any Stockholder is a trust, such Stockholder is duly formed and validly
existing under the laws of the jurisdiction of its formation.
3.2 AUTHORIZATION OF TRANSACTION. Seller has full power and authority
(including full corporate power and authority) to execute and deliver this
Agreement and to perform its obligations hereunder. Without limiting the
generality of the foregoing, the board of directors of Seller and the
Stockholders have duly authorized the execution, delivery, and performance of
this Agreement by Seller. This Agreement constitutes the valid and legally
binding obligation of Seller, enforceable in accordance with its terms and
conditions. Each Stockholder has full power and authority (including, if any
Stockholder is a trust, full trust power and authority) to execute and deliver
this Agreement and to perform such Stockholder's obligations hereunder. This
Agreement constitutes the valid and legally binding obligation of each
Stockholder, enforceable in accordance with its terms and conditions.
3.3 NONCONTRAVENTION. Except as set forth in Disclosure Schedule 3.3,
neither the execution and the delivery of this Agreement nor the consummation of
the transactions contemplated hereby, will (a) violate any constitution,
statute, regulation, rule, injunction, judgment, order, decree, ruling, charge,
or other restriction of any government, governmental agency, or court to which
Seller or any Stockholder is subject or any provision of the Certificate of
Incorporation or Bylaws of Seller or (b) conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in any party
the right to accelerate, terminate, modify, or
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cancel, or require any notice under (or transfer or procurement of) any
agreement, contract, lease, permit, consent, license, instrument, or other
arrangement to which Seller is a party or by which it is bound, to which any of
its assets is subject (or result in the imposition of any Security Interest upon
any of its assets), or which will be required by Buyer to operate the business
of Seller after the Closing. Neither Seller nor any Stockholder need give any
notice to, make any filing with, or obtain any authorization, consent, or
approval of any government or governmental agency in order for the Parties to
consummate the transactions contemplated by this Agreement
3.4 BROKERS' FEES. Except for the fees and expenses of BT Alex. Brown
to be paid at Closing by Seller in full, neither Seller nor any Stockholder has
Liability or obligation to pay any fees or commissions to any broker, finder, or
agent with respect to the transactions contemplated by this Agreement for which
Buyer could become liable or obligated.
3.5 TITLE TO ASSETS. Except as set forth in Disclosure Schedule 3.5,
Seller has good and marketable title to, or a valid leasehold interest in the
Acquired Assets, free and clear of all Security Interests, except for properties
and assets disposed of in the Ordinary Course of Business since the date of the
Most Recent Balance Sheet. Without limiting the generality of the foregoing,
Seller has good and marketable title to all of the Acquired Assets, free and
clear of any Security Interest or restriction on transfer.
3.6 SUBSIDIARIES. Seller does not have and has not, in the past ten
years, had any Subsidiaries.
3.7 FINANCIAL STATEMENTS. Attached hereto as Exhibit F are the
following financial statements (collectively, the "FINANCIAL STATEMENTS"):
(a) reviewed balance sheets and statements of income, changes
in stockholders' equity, and cash flow as of and for the fiscal years
ended December 31, 1995, December 31, 1996 and December 31, 1997 (the
"MOST RECENT FISCAL YEAR END") for Seller; and
(b) unaudited consolidated and consolidating balance sheets
and statements of income, changes in stockholders' equity, and cash
flow (the "MOST RECENT FINANCIAL STATEMENTS") as of and for the one
month ended January 31, 1998 (the "MOST RECENT FISCAL MONTH END") for
Seller.
The Financial Statements (including the notes thereto) have been prepared in
accordance with Seller's historical accounting practices and methods applied on
a consistent basis throughout the periods covered thereby, present fairly the
financial condition of Seller as of such dates and the results of operations of
Seller for such periods, are correct and complete, and are consistent with the
books and records of Seller (which books and records are correct and complete);
provided, however, that
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the Most Recent Financial Statements are subject to normal year-end
adjustments (which will not be material individually or in the aggregate) and
lack footnotes and other presentation items.
3.8 EVENTS SUBSEQUENT TO MOST RECENT FISCAL MONTH END. Since the Most
Recent Fiscal Month End, there has not been any adverse change in the business,
financial condition, operations, results of operations, or future prospects of
Seller. Without limiting the generality of the foregoing, since that date:
(a) Seller has not sold, leased, transferred, or assigned any
of its assets, tangible or intangible, other than for good and fair
consideration in the Ordinary Course of Business;
(b) except as set forth in Disclosure Schedule 3.8(b), Seller
has not entered into any agreement, contract, understanding, lease, or
license (or series of related agreements, contracts, understandings,
leases, and licenses) either involving more than $10,000 or outside the
Ordinary Course of Business;
(c) no party (including Seller) has accelerated, terminated,
modified, or canceled any agreement, contract, lease, or license (or
series of related agreements, contracts, leases, and licenses)
involving more than $10,000 to which Seller is a party or by which any
of them is bound;
(d) except as set forth in Disclosure Schedule 3.8(d), Seller
has not let there be imposed any Security Interest upon any of the
Acquired Assets, tangible or intangible;
(e) except as set forth in Disclosure Schedule 3.8(e), Seller
has not made any capital expenditure (or series of related capital
expenditures) either involving more than $10,000 or outside the
Ordinary Course of Business;
(f) Seller has not made any capital investment in, any loan
to, or any acquisition of the securities or assets of, any other Person
(or series of related capital investments, loans, and acquisitions)
either involving more than $10,000 or outside the Ordinary Course of
Business;
(g) except as set forth in Disclosure Schedule 3.8(g) Seller
has not issued any note, bond, or other debt security or created,
incurred, assumed, or guaranteed any indebtedness for borrowed money or
capitalized lease obligation either involving more than $10,000 in the
aggregate;
(h) other than that certain account payable in the amount of
$5,031,805.27 which is not an Assumed Liability, Seller has not delayed
or postponed the payment of accounts payable and other Liabilities
outside the Ordinary Course of Business;
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(i) Seller has not canceled, compromised, waived, or released
any right or claim (or series of related rights and claims) either
involving more than $10,000 or outside the Ordinary Course of Business;
(j) Seller has not granted any license or sublicense of any
rights under or with respect to any Intellectual Property;
(k) Omitted.
(l) except as set forth in Disclosure Schedule 3.8(l), Seller
has not experienced any damage, destruction, or loss (whether or not
covered by insurance) to its property;
(m) Seller has not made any loan to, or entered into any other
transaction with, any of its directors, officers, and employees outside
the Ordinary Course of Business;
(n) Seller has not entered into any employment contract or
collective bargaining agreement, written or oral, or modified the terms
of any existing such contract or agreement;
(o) Seller has not granted any increase in the base
compensation of any of its directors, officers, and employees outside
the Ordinary Course of Business;
(p) except as set forth in Disclosure Schedule 3.8(p), Seller
has not adopted, amended, modified, or terminated any bonus,
profit-sharing, incentive, severance, or other plan, contract, or
commitment for the benefit of any of its directors, officers, and
employees (or taken any such action with respect to any other Employee
Benefit Plan);
(q) Seller has not made any other change in employment terms
for any of its directors, officers, and employees outside the Ordinary
Course of Business;
(r) except as set forth in Disclosure Schedule 3.8(r), Seller
has not made or pledged to make any charitable or other capital
contribution outside the Ordinary Course of Business;
(s) Seller has not paid any amount to any third party with
respect to any Liability or obligation (including any costs and
expenses Seller has incurred or may incur in connection with this
Agreement and the transactions contemplated hereby) which would not
constitute an Assumed Liability if in existence as of the Closing;
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(t) except as set forth in Disclosure Schedule 3.8(t), there
has not been any other occurrence, event, incident, action, failure to
act, or transaction outside the Ordinary Course of Business involving
Seller; and
(u) Seller has not committed to any of the foregoing.
3.9 UNDISCLOSED LIABILITIES. Except as set forth in Disclosure Schedule
3.9, Seller has no Liability (and there is no Basis for any action, suit,
proceeding, hearing, investigation, charge, complaint, claim, or demand against
any of them giving rise to any Liability), except for (a) Liabilities set forth
on the face of the Most Recent Balance Sheet (rather than in any notes thereto)
and (b) Liabilities which have arisen after the Most Recent Fiscal Month End in
the Ordinary Course of Business.
3.10 LEGAL COMPLIANCE. Seller and its predecessors, if any, and
Affiliates have complied with all applicable laws (including rules, regulations,
codes, plans, injunctions, judgments, orders, decrees, rulings, and charges
thereunder) of federal, state, local, and foreign governments (and all agencies
thereof), and no action, suit, proceeding, hearing, investigation, charge,
complaint, claim, demand, or notice has been filed or commenced against any of
them alleging any failure so to comply.
3.11 TAX MATTERS.
(a) Seller has filed all Tax Returns that it was required to
file. All such Tax Returns were correct and complete in all respects.
All Taxes owed by Seller (whether or not shown on any Tax Return) have
been paid. Seller is not currently the beneficiary of any extension of
time within which to file any Tax Return. No claim has ever been made
by an authority in a jurisdiction where Seller does not file Tax
Returns that it is or may be subject to taxation by that jurisdiction.
There are no Security Interests on any of the assets of Seller that
arose in connection with any failure (or alleged failure) to pay any
Tax.
(b) Seller has withheld and paid all Taxes required to have
been withheld and paid in connection with amounts paid or owing to any
employee, independent contractor, creditor, stockholder, or other third
party.
(c) No Seller, Stockholder or director or officer (or employee
responsible for Tax matters) of Seller expects any authority to assess
any additional Taxes for any period for which Tax Returns have been
filed. There is no dispute or claim concerning any Tax Liability of
Seller either (i) claimed or raised by any authority in writing or (ii)
as to which any of Stockholders and the directors and officers (and
employees responsible for Tax matters) of Seller has Knowledge based
upon personal contact with any agent of such authority. Disclosure
Schedule 3.11(c) lists all federal, state, local, and foreign income
Tax Returns filed with respect to Seller for taxable periods ended on
or after December 31, 1992, indicates those Tax Returns that have
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been audited, and indicates those Tax Returns that currently are the
subject of audit. Seller has delivered to Buyer correct and complete
copies of all federal income Tax Returns, examination reports, and
statements of deficiencies assessed against or agreed to by Seller.
(d) Seller has not waived any statute of limitations in
respect of Taxes or agreed to any extension of time with respect to a
Tax assessment or deficiency.
(e) The unpaid Taxes of Seller (i) did not, as of the Most
Recent Fiscal Month End, exceed the reserve for Tax Liability (rather
than any reserve for deferred Taxes established to reflect timing
differences between book and Tax income) set forth on the face of the
Most Recent Balance Sheet (rather than in any notes thereto) and (ii)
do not exceed that reserve as adjusted for the passage of time through
the Closing Date in accordance with the past custom and practice of
Seller in filing their Tax Returns.
(f) None of the Assumed Liabilities is an obligation to make a
payment that will not be deductible under Code Section 280G. Seller has
disclosed on its federal income Tax Returns all positions taken therein
that could give rise to a substantial understatement of federal income
Tax within the meaning of Code Section 6662. Seller is not a party to
any Tax allocation or sharing agreement. Seller has (i) not been a
member of an Affiliated Group filing a consolidated federal income Tax
Return (other than a group the common parent of which was Seller) and
(ii) no Liability for the Taxes of any Person (other than Seller) under
Treas. Reg. Section 1.1502-6 (or any similar provision of state, local,
or foreign law), as a transferee or successor, by contract, or
otherwise.
3.12 REAL PROPERTY.
(a) Disclosure Schedule 3.12(a) lists and describes briefly
all real property that Seller owns. With respect to each such parcel of
owned real property, except as set forth in Disclosure Schedule
3.12(a):
(i) the identified owner has good and marketable
title to the parcel of real property, free and clear of any
Security Interest, easement, covenant, or other restriction,
except for installments of special assessments not yet
delinquent and recorded easements, covenants, and other use
and building restrictions which do not impair the current use,
occupancy, or value, or the marketability of title, of the
property subject thereto;
(ii) there are no pending or, to the Knowledge of any
of Stockholders and the directors and officers (and employees
with responsibility for real estate matters) of Seller,
threatened condemnation proceedings, lawsuits, or
administrative actions relating
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to the property or other matters affecting adversely the
current use, occupancy, or value thereof;
(iii) the legal description for the parcel contained
in the deed thereof describes such parcel fully and
adequately, the buildings and improvements are located within
the boundary lines of the described parcels of land, are not
in violation of applicable setback requirements, zoning laws,
and ordinances (and none of the properties or buildings or
improvements thereon are subject to "permitted non-conforming
use" or "permitted non-conforming structure" classifications),
and do not encroach on any easement which may burden the land,
the land does not serve any adjoining property for any purpose
inconsistent with the use of the land, and the property is not
located within any flood plain or subject to any similar type
restriction for which any permits or licenses necessary to the
use thereof have not been obtained;
(iv) all facilities have received all approvals of
governmental authorities (including licenses and permits)
required in connection with the ownership or operation thereof
and have been operated and maintained in accordance with
applicable laws, rules, and regulations;
(v) there are no leases, subleases, licenses,
concessions, or other agreements, written or oral, granting to
any party or parties the right of use or occupancy of any
portion of the parcel of real property;
(vi) there are no outstanding options or rights of
first refusal to purchase the parcel of real property, or any
portion thereof or interest therein;
(vii) there are no parties (other than Seller) in
possession of the parcel of real property, other than tenants
under any leases disclosed in Disclosure Schedule 3.12(b) who
are in possession of space to which they are entitled;
(viii) all facilities located on the parcel of real
property are supplied with utilities and other services
reasonably necessary for the operation of such facilities,
including gas, electricity, water, telephone, sanitary sewer,
and storm sewer, all of which services are reasonably adequate
in accordance with all applicable laws, ordinances, rules, and
regulations and are provided via public roads or via
permanent, irrevocable, appurtenant easements benefiting the
parcel of real property; and
(ix) each parcel of real property abuts on and has
direct vehicular access to a public road, or has access to a
public road via a permanent, irrevocable, appurtenant easement
benefiting the parcel of
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real property, and access to the property is provided by paved
public right-of-way with adequate curb cuts available.
(b) Disclosure Schedule 3.12(b) lists and describes briefly
all real property leased or subleased to Seller. Disclosure Schedule
3.12(b) also identifies the leased or subleased properties for which
title insurance policies are to be procured in accordance with Section
5.8(b). Seller has delivered to Buyer correct and complete copies of
the leases and subleases listed in Disclosure Schedule 3.12(b) (as
amended to date). With respect to each lease and sublease listed in
Disclosure Schedule 3.12(b):
(i) the lease or sublease is legal, valid,
binding, enforceable, and in full force and effect;
(ii) after Seller procures any required consent,
the lease or sublease will continue to be legal, valid,
binding, enforceable, and in full force and effect on
identical terms following the consummation of the transactions
contemplated hereby;
(iii) no party to the lease or sublease is in breach
or default, and no event has occurred which, with notice or
lapse of time, would constitute a breach or default or permit
termination, modification, or acceleration thereunder;
(iv) no party to the lease or sublease has
repudiated any provision thereof;
(v) there are no disputes, oral agreements, or
forbearance programs in effect as to the lease or sublease;
(vi) with respect to each sublease, the
representations and warranties set forth in subsections (i)
through (v) of this Section 3.12(b) are true and correct with
respect to the underlying lease;
(vii) Seller has not assigned, transferred,
conveyed, mortgaged, deeded in trust, or encumbered
any interest in the leasehold or subleasehold;
(viii) all facilities leased or subleased thereunder
have received all approvals of governmental authorities
(including licenses and permits) required in connection with
the operation thereof and have been operated and maintained in
accordance with applicable laws, rules, and regulations;
(ix) all facilities leased or subleased thereunder
are supplied with utilities and other services necessary for
the operation of said facilities; and
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(x) to Seller's Knowledge, the owner of the
facility leased or subleased has good and marketable title to
the parcel of real property, free and clear of any Security
Interest, easement, covenant, or other restriction, except for
installments of special easements not yet delinquent and
recorded easements, covenants, and other restrictions which do
not impair the current use, occupancy, or value, or the
marketability of title, of the property subject thereto.
3.13 INTELLECTUAL PROPERTY.
(a) Seller owns or has the right to use pursuant to a license,
sublicense, agreement, or permission all Intellectual Property
reasonably necessary for the operation of the businesses of Seller as
presently conducted and as presently proposed to be conducted. Each
item of Intellectual Property owned or used by Seller immediately prior
to the Closing hereunder will be owned or available for use by Buyer on
identical terms and conditions immediately subsequent to the Closing
hereunder. Seller has taken all necessary and desirable action to
maintain and protect each item of Intellectual Property that it owns or
uses.
(b) Seller has not interfered with, infringed upon,
misappropriated, or violated any Intellectual Property rights of third
parties, and none of Stockholders and the directors and officers (and
employees with responsibility for Intellectual Property matters) of
Seller has ever received any charge, complaint, claim, demand, or
notice alleging any such interference, infringement, misappropriation,
or violation (including any claim that Seller must license or refrain
from using any Intellectual Property rights of any third party). To the
Knowledge of any of Stockholders and the directors and officers (and
employees with responsibility for Intellectual Property matters) of
Seller, no third party has interfered with, infringed upon,
misappropriated, or otherwise violated any Intellectual Property rights
of Seller.
(c) Disclosure Schedule 3.13(c) identifies each patent,
trademark, service mark or registration relating thereto which has been
issued to Seller with respect to any of its Intellectual Property,
identifies each pending patent, trademark and service mark application
or application for registration which Seller has made with respect to
any of its Intellectual Property, and identifies each license,
agreement, or other permission which Seller has granted to any third
party with respect to any of its Intellectual Property (together with
any exceptions). Seller has delivered to Buyer correct and complete
copies of all such patents, trademarks, service marks, registrations,
applications, licenses, agreements, and permissions (as amended to
date) and has made available to Buyer correct and complete copies of
all other written documentation evidencing ownership and prosecution
(if applicable) of each such item. Disclosure Schedule 3.13(c) also
identifies each trade name or unregistered
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trademark or service mark used by Seller in connection with any of its
business.
(d) Disclosure Schedule 3.13(d) identifies each item of
Intellectual Property that any third party owns and that Seller uses
pursuant to license, sublicense, agreement, or permission. Seller has
delivered to Buyer correct and complete copies of all such licenses,
sublicenses, agreements, and permissions (as amended to date).
(e) To the Knowledge of any of Stockholders and the directors
and officers (and employees with responsibility for Intellectual
Property matters) of Seller, Buyer will not interfere with, infringe
upon, misappropriate, or otherwise come into conflict with, any
Intellectual Property rights of third parties as a result of the
continued operation of the business of Seller as presently conducted
and as presently proposed to be conducted.
3.14 TANGIBLE ASSETS. Seller owns or leases the buildings, machinery,
equipment, and other tangible assets necessary for the conduct of its business
as presently conducted. Except as set forth in Disclosure Schedule 3.14, each
such tangible asset is free from defects (patent and latent), has been
maintained in accordance with normal industry practice, is in good operating
condition and repair (subject to normal wear and tear), and is suitable for the
purposes for which it presently is used.
3.15 INVENTORY. Except as set forth in Disclosure Schedule 3.15, the
inventory of Seller consists of raw materials and supplies, all of which is
merchantable and fit for the purpose for which it was procured, and none of
which is slow-moving, contaminated, hazardous, toxic, or otherwise defective.
3.16 CONTRACTS, PERMITS, LICENSES, ETC.
(a) Disclosure Schedule 3.16(a) lists the following contracts and other
agreements to which Seller is a party that are in effect on or after Closing
Date (which disclosure schedule shall be refreshed the day before the Closing
Date):
(i) any agreement (or group of related agreements) for the
lease of personal property to or from any Person which will extend over
a period of more than three months or providing for lease payments in
excess of $10,000 per annum;
(ii) other than contracts arising in the Ordinary Course of
Business, any agreement (or group of related agreements) for the
purchase or sale of raw materials (except with purchase contracts),
commodities, supplies, products, or other personal property, or for the
furnishing or receipt of services, the performance of which will extend
over a period of more than
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three months, result in a loss to Seller, or involve consideration in
excess of $10,000;
(iii) any agreement concerning a partnership, limited
liability company, or joint venture;
(iv) any agreement (or group of related agreements) under
which it has created, incurred, assumed, or guaranteed any indebtedness
for borrowed money, or any capitalized lease obligation, in excess of
$10,000 or under which it has imposed a Security Interest on any of its
assets, tangible or intangible;
(v) any agreement concerning confidentiality or
noncompetition;
(vi) any agreement involving any of the Stockholders and
their Affiliates (other than Seller);
(vii) any profit sharing, stock option, stock purchase, stock
appreciation, deferred compensation, severance, or other plan or
arrangement for the benefit of its current or former directors,
officers, and employees;
(viii) any collective bargaining agreement;
(ix) any agreement for the employment of any individual on a
full-time, part-time, consulting, or other basis;
(x) any agreement under which it has advanced or loaned any
amount to any of its directors, officers, and employees outside the
Ordinary Course of Business;
(xi) any agreement under which the consequences of a default
or termination could have a adverse effect on the business, financial
condition, operations, results of operations, or future prospects of
Seller; or
(xii) any other agreement (or group of related agreements)
the performance of which will extend over a period of three months or
involves consideration in excess of $50,000 (other than contracts to
purchase or sell materials in the Ordinary Course of Business).
(b) Disclosure Schedule 3.16(b) lists all of the permits, licenses,
approvals, authorizations and consents (governmental or otherwise) necessary to
operate the business of Seller, including, but not limited to, scrap metal
processing and transportation (via truck, rail, barge, or otherwise).
(c) Seller has delivered to Buyer a correct and complete copy of each
item listed in Disclosure Schedule 3.16 (a) and (b) (as amended to date). Seller
has also
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delivered to Buyer a written summary setting forth the terms and conditions of
(i) each oral agreement referred to in Disclosure Schedule 3.16(a)
and (ii) with respect to any agreement referred to in Disclosure Schedule
3.16(a), any third party consents, approvals, authorizations or notifications
necessary, required to transfer any such agreement from Seller to Buyer. With
respect to each agreement referred to in Disclosure Schedule 3.16(a): (a) the
agreement is legal, valid, binding, enforceable, and in full force and effect;
(b) no party is in breach or default, and no event has occurred which with
notice or lapse of time would constitute a breach or default, or permit
termination, modification, or acceleration, under the agreement; and (c) no
party has repudiated any provision of the agreement.
3.17 NOTES AND ACCOUNTS RECEIVABLE. All notes and accounts receivable
of Seller are reflected properly on its books and records, are valid receivables
subject to no setoffs or counterclaims, are current and collectible, and will be
collected in accordance with their terms at their recorded amounts.
3.18 POWERS OF ATTORNEY. There are no outstanding powers of attorney
executed on behalf of Seller.
3.19 INSURANCE. Disclosure Schedule 3.19 sets forth the following
information with respect to each insurance policy (including policies providing
property, casualty, liability, and workers' compensation coverage and bond and
surety arrangements) to which Seller is a party, a named insured, or otherwise
the beneficiary of coverage:
(a) the name, address, and telephone number of the agent;
(b) the name of the insurer, the name of the policyholder, and
the name of each covered insured;
(c) the policy number and the period of coverage;
(d) the scope (including an indication of whether the coverage
is on a claims made, occurrence, or other basis) and amount (including
a description of how deductibles and ceilings are calculated and
operate) of coverage; and
(e) a description of any retroactive premium adjustments or
other loss-sharing arrangements.
With respect to each insurance policy listed in Disclosure Schedule 3.19: (a)
the policy is legal, valid, binding, enforceable, and in full force and effect
in all material respects; (b) neither Seller nor any other party to the policy
is in breach or default (including with respect to the payment of premiums or
the giving of notices), and no event has occurred which, with notice or the
lapse of time, would constitute such a breach or default, or permit termination,
modification, or acceleration, under the policy; and (c) no party to the policy
has repudiated any provision thereof. Seller
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has been covered during the past 10 years by insurance in scope and
amount customary and reasonable for the businesses in which it has engaged
during the aforementioned period. Disclosure Schedule 3.19 describes any
self-insurance arrangements affecting Seller.
3.20 LITIGATION. Disclosure Schedule 3.20 sets forth each instance in
which Seller (a) is subject to any outstanding injunction, judgment, order,
decree, ruling, or charge or (b) is a party or, to the Knowledge of any of
Stockholders and the directors and officers (and employees with responsibility
for litigation matters) of Seller, is threatened to be made a party to any
action, suit, proceeding, hearing, or investigation of, in, or before any court
or quasi-judicial or administrative agency of any federal, state, local, or
foreign jurisdiction or before any arbitrator. None of Stockholders and the
directors and officers (and employees with responsibility for litigation
matters) of Seller has any reason to believe that any such action, suit,
proceeding, hearing, or investigation may be brought or threatened against
Seller.
3.21 PRODUCT WARRANTY. Each product manufactured, sold, leased, or
delivered by Seller has been in conformity with all applicable contractual
commitments and all express and implied warranties, and Seller has not any
Liability (and there is no Basis for any present or future action, suit,
proceeding, hearing, investigation, charge, complaint, claim, or demand against
any of them giving rise to any Liability) for replacement or repair thereof or
other damages in connection therewith.
3.22 PRODUCT LIABILITY. Seller has no Liability (and there is no Basis
for any present or future action, suit, proceeding, hearing, investigation,
charge, complaint, claim, or demand against any of them giving rise to any
Liability) arising out of any injury to individuals or property as a result of
the ownership, possession, or use of any product manufactured, sold, leased, or
delivered by Seller.
3.23 EMPLOYEES. To the Knowledge of any of Stockholders and the
directors and officers (and employees with responsibility for employment
matters) of Seller, no executive, key employee, or significant group of
employees has any plans to terminate employment with Seller during the next 12
months. Except as disclosed in Disclosure Schedule 3.23, Seller is not a party
to or bound by any collective bargaining agreement, nor has any of them
experienced any strikes, grievances, claims of unfair labor practices, or other
collective bargaining disputes (which the applicable statute of limitation
(contractual or otherwise) has not expired with respect thereto). Seller has
delivered to Buyer a correct and complete copy of each collective bargaining
agreement listed in Disclosure Schedule 3.23 (as amended to date). Seller has
not committed any unfair labor practice. None of Stockholders and the directors
and officers (and employees with responsibility for employment matters) of
Seller has any Knowledge of any organizational effort presently being made or
threatened by or on behalf of any labor union with respect to employees of
Seller.
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3.24 EMPLOYEE BENEFITS.
(a) Disclosure Schedule 3.24(a) lists each Employee Benefit
Plan that Seller maintains or to which Seller contributes or has any
obligation to contribute.
(b) Each such Employee Benefit Plan (and each related trust,
insurance contract, or fund) complies in form and in operation in all
respects with the applicable requirements of ERISA, the Code, and other
applicable laws.
(c) All required reports and descriptions (including Form 5500
Annual Reports, summary annual reports, PBGC-1's, and summary plan
descriptions) have been timely filed and distributed appropriately with
respect to each such Employee Benefit Plan. The requirements of COBRA
have been met with respect to each such Employee Benefit Plan which is
an Employee Welfare Benefit Plan.
(d) All contributions (including all employer contributions
and employee salary reduction contributions) which are due have been
paid to each such Employee Benefit Plan which is an Employee Pension
Benefit Plan and all contributions for any period ending on or before
the Closing Date which are not yet due have been paid to each such
Employee Pension Benefit Plan or accrued in accordance with the past
custom and practice of Seller. All premiums or other payments for all
periods ending on or before the Closing Date have been paid with
respect to each such Employee Benefit Plan which is an Employee Welfare
Benefit Plan.
(e) Each such Employee Benefit Plan which is an Employee
Pension Benefit Plan meets the requirements of a "qualified plan" under
Code Section 401(a), has received a favorable determination letter from
the Internal Revenue Service that it is a "qualified plan," and Seller
is not aware of any facts or circumstances that could result in the
revocation of such determination letter.
(f) The market value of assets under each such Employee
Benefit Plan which is an Employee Pension Benefit Plan (other than any
Multiemployer Plan) equals or exceeds the present value of all vested
and nonvested Liabilities thereunder determined in accordance with PBGC
methods, factors, and assumptions applicable to an Employee Pension
Benefit Plan terminating on the date for determination.
(g) Seller has delivered to Buyer correct and complete copies
of the plan documents and summary plan descriptions, the most recent
determination letter received from the Internal Revenue Service, the
most recent Form 5500 Annual Report, and all related trust agreements,
insurance
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contracts, and other funding agreements which implement each such
Employee Benefit Plan.
(h) With respect to each Employee Benefit Plan that Seller and
any ERISA Affiliate maintains or ever has maintained or to which any of
them contributes, ever has contributed, or ever has been required to
contribute:
(i) no such Employee Benefit Plan which is an
Employee Pension Benefit Plan (other than any Multiemployer
Plan) has been completely or partially terminated or been the
subject of a Reportable Event as to which notices would be
required to be filed with the PBGC;
(ii) no proceeding by the PBGC to terminate any
such Employee Pension Benefit Plan (other than any
Multiemployer Plan) has been instituted or, to the Knowledge
of any of Stockholders and the directors and officers (and
employees with responsibility for employee benefits matters)
of Seller, threatened;
(iii) there have been no Prohibited Transactions
with respect to any such Employee Benefit Plan;
(iv) no Fiduciary has any Liability for breach of
fiduciary duty or any other failure to act or comply in
connection with the administration or investment of the assets
of any such Employee Benefit Plan;
(v) no action, suit, proceeding, hearing, or
investigation with respect to the administration or the
investment of the assets of any such Employee Benefit Plan
(other than routine claims for benefits) is pending or, to the
Knowledge of any of Stockholders and the directors and
officers (and employees with responsibility for employee
benefits matters) of Seller, threatened;
(vi) none of Stockholders and the directors and
officers (and employees with responsibility for employee
benefits matters) of Seller has any Knowledge of any Basis for
any such action, suit, proceeding, hearing, or investigation;
and
(vii) Seller has not incurred, and none of
Stockholders and the directors and officers (and employees
with responsibility for employee benefits matters) of Seller
has any reason to expect that Seller will incur any Liability
to the PBGC (other than PBGC premium payments) or otherwise
under Title IV of ERISA (including any withdrawal liability as
defined in ERISA Section 4201) or under the Code with respect
to any such Employee Benefit Plan which is an Employee Pension
Benefit Plan.
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(i) Seller has never contributed to, or ever has been required
to contribute to any Multiemployer Plan or has any Liability (including
withdrawal liability as defined in ERISA Section 4201) under any
Multiemployer Plan.
(j) Seller does not maintain or has never maintained or
contributed to or been required to contribute to any Employee Welfare
Benefit Plan providing medical, health, or life insurance or other
welfare-type benefits for current or future retired or terminated
employees, their spouses, or their dependents (other than in accordance
with Code Section 4980B).
3.25 GUARANTIES. Except as set forth in Disclosure Schedule 3.25,
Seller is not a guarantor or otherwise liable for any Liability or obligation
(including indebtedness) of any other Person.
3.26 ENVIRONMENTAL, HEALTH, AND SAFETY MATTERS.
(a) Except as set forth in Disclosure Schedule 3.26(a), Seller
and its predecessors, if any, and Affiliates has complied and is in
compliance with all Environmental, Health, and Safety Requirements.
(b) Except as set forth in Disclosure Schedule 3.26(b),
without limiting the generality of the foregoing, Seller has obtained
and complied with, and is in compliance with, all permits, licenses and
other authorizations that are required pursuant to Environmental,
Health, and Safety Requirements for the occupation of its facilities
and the operation of its business. A complete list of all such permits,
licenses and other authorizations is set forth in Disclosure Schedule
3.26(b).
(c) Except as set forth in Disclosure Schedule 3.26(c),
neither Seller nor its predecessors, if any, or Affiliates has received
any written or oral notice, report or other information regarding any
actual or alleged violation of Environmental, Health, and Safety
Requirements, or any liabilities or potential liabilities (whether
accrued, absolute, contingent, unliquidated or otherwise), including
any investigatory, remedial or corrective obligations, relating to any
of them or its facilities arising under Environmental, Health, and
Safety Requirements.
(d) None of the following exists at any property or facility
owned or operated by Seller: (i) underground storage tanks, (ii)
asbestos-containing material in any form or condition, (iii) materials
or equipment containing polychlorinated biphenyls, or (iv) landfills,
surface impoundments, or disposal areas.
(e) Except as set forth in Disclosure Schedule 3.26(e), none
of Seller or its predecessors, if any, or Affiliates has treated,
stored, disposed of, arranged for or permitted the disposal of,
transported, handled, or released
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any substance, including without limitation any hazardous substance,
debris or plastic/metal separator material, or owned or operated any
property or facility (and no such property or facility is contaminated
by any such substance) in a manner that has given or would give rise to
liabilities, including any liability for response costs, corrective
action costs, personal injury, property damage, natural resources
damages or attorney fees, pursuant to the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, the Solid
Waste Disposal Act, as amended or any other Environmental, Health, and
Safety Requirements.
(f) Neither this Agreement nor the consummation of the
transaction that is the subject of this Agreement will result in any
obligations for site investigation or cleanup, or notification to or
consent of government agencies or third parties, pursuant to any of the
so-called "transaction-triggered" or "responsible property transfer"
Environmental, Health, and Safety Requirements.
(g) Except as set forth in Disclosure Schedule 3.26(g),
neither Seller nor any of its predecessors, if any, or Affiliates has,
either expressly or by operation of law, assumed or undertaken any
liability, including without limitation any obligation for corrective
or remedial action, of any other Person relating to Environmental,
Health, and Safety Requirements.
(h) No facts, events or conditions relating to the past or
present facilities, properties or operations of Seller or any of its
predecessors, if any, or Affiliates will prevent, hinder or limit
continued compliance with Environmental, Health, and Safety
Requirements, give rise to any investigatory, remedial or corrective
obligations pursuant to Environmental, Health, and Safety Requirements,
or give rise to any other liabilities (whether accrued, absolute,
contingent, unliquidated or otherwise) pursuant to Environmental,
Health, and Safety Requirements, including without limitation any
relating to onsite or offsite releases or threatened releases of
hazardous materials, substances or wastes, personal injury, property
damage or natural resources damage.
(i) The representations, warranties and covenants made by
Seller and the Stockholders in that certain letter from Seller and the
Stockholders to Buyer and MTLM dated June 16, 1998 are hereby
incorporated into this Agreement by reference thereto and are deemed to
be hereby repeated in full as representations, warranties and covenants
of this Agreement as if set forth in full herein.
3.27 CERTAIN BUSINESS RELATIONSHIPS WITH SELLER. None of Stockholders
and their Affiliates has been involved in any business arrangement or
relationship with Seller within the past 12 months, and none of Stockholders and
their Affiliates owns any asset, tangible or intangible, which is used in the
business of Seller.
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3.28 CUSTOMERS AND SUPPLIERS At least two business days prior to the
Closing Date, Seller will deliver to Buyer a correct and complete list of its 30
largest customers and suppliers together with the applicable percentage or total
sales or purchase, as applicable. At least two business days prior to the
Closing Date, Seller will deliver to Buyer each such customer's and supplier's
address, account number, term or contract or agreement, billing cycle, service
requirements and rates/prices.
3.29 FISCAL 1998 EARNINGS. The EBITDA of the business represented by
the Acquired Assets will be at least $4,000,000.00 for the fiscal year ended
November 30, 1998; provided, however, this Section 3.29 shall be null and void
if such EBITDA is unobtainable due to causes which are outside the control of
Seller and could not be avoided by the exercise of due care.
3.30 DISCLOSURE. The representations and warranties contained in this
Article 3 do not contain any untrue statement of a fact or omit to state any
fact necessary in order to make the statements and information contained in this
Article 3 not misleading.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER
MTLM and Buyer represent and warrant to Seller that the statements
contained in this Article 4 are correct and complete as of the date of this
Agreement and will be correct and complete as of the Closing Date (as though
made then and as though the Closing Date were substituted for the date of this
Agreement throughout this Article 4), except as set forth in the Disclosure
Schedules. The Disclosure Schedules will be arranged in paragraphs corresponding
to the lettered and numbered paragraphs contained in this Article 4.
4.1 ORGANIZATION OF BUYER. Each of MTLM and Buyer is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Delaware.
4.2 AUTHORIZATION OF TRANSACTION. Each of MTLM and Buyer has full power
and authority (including full corporate power and authority) to execute and
deliver this Agreement and to perform its obligations hereunder. This Agreement
constitutes the valid and legally binding obligation of each of MTLM and Buyer,
enforceable in accordance with its terms and conditions.
4.3 NONCONTRAVENTION. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(a) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which MTLM or Buyer is subject or any provision
of its Certificate of Incorporation or Bylaws or (b) conflict with, result in a
breach of, constitute a default under, result in the acceleration of, create in
any party the right to accelerate, terminate, modify,
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or cancel, or require any notice under any agreement, contract, lease, license,
instrument, or other arrangement to which MTLM or Buyer is a party or by which
it is bound or to which any of its assets is subject. Neither MTLM or Buyer
needs to give any notice to, make any filing with, or obtain any authorization,
consent, or approval of any government or governmental agency in order for the
Parties to consummate the transactions contemplated by this Agreement.
4.4 BROKERS' FEES. Neither MTLM or Buyer has Liability or obligation to
pay any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which Seller could become liable
or obligated.
4.5 FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION. MTLM has made
all filings with the Securities and Exchange Commission that it has been
required to make within the past 12 months under the Securities Act and the
Securities Exchange Act (collectively the "PUBLIC REPORTS"). Each of the Public
Reports has complied with the Securities Act and the Securities Exchange Act in
all material respects. None of the Public Reports, as of their respective dates,
contained any untrue statement of a material fact or omitted to state a material
fact necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading. MTLM has delivered to
Seller a correct and complete copy of each Public Report (together with all
exhibits and schedules thereto and as amended to date).
ARTICLE 5
PRE-CLOSING COVENANTS
The Parties agree as follows with respect to the period between the
execution of this Agreement and the Closing:
5.1 GENERAL. Each of the Parties will use its reasonable best efforts
to take all action and to do all things necessary, proper, or advisable in order
to consummate and make effective the transactions contemplated by this Agreement
(including satisfaction, but not waiver, of the closing conditions set forth in
Article 6).
5.2 NOTICES AND CONSENTS. Seller will give any notices to third
parties, and Seller will use its reasonable best efforts to obtain any third
party consents, that Buyer reasonably may request in connection with the matters
referred to in Section 3.3 and Section 3.16. Each of the Parties will give any
notices to, make any filings with, and use its reasonable best efforts to obtain
any authorizations, consents, and approvals of governments and governmental
agencies in connection with the matters referred to in Section 3.3, Section 3.16
and Section 4.3. Without limiting the generality of the foregoing, each of the
Parties will file any Notification and Report Forms and related material that it
may be required to file with the Federal Trade Commission and the Antitrust
Division of the United States Department of Justice under the Hart-Scott-Rodino
Act, will use its best efforts to obtain an early
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termination of the applicable waiting period, and will make any further filings
pursuant thereto that may be necessary, proper, or advisable in connection
therewith.
5.3 OPERATION OF BUSINESS. Seller will not engage in any practice, take
any action, or enter into any transaction outside the Ordinary Course of
Business or otherwise engage in any practice, take any action, or enter into any
transaction of the sort described in Section 3.8.
5.4 PRESERVATION OF BUSINESS. Seller will use its reasonable best
efforts to keep its business and properties substantially intact, including its
present operations, physical facilities, working conditions, and relationships
with lessors, licensors, suppliers, customers, and employees.
5.5 FULL ACCESS. Subject to and in accordance with that certain
Confidentiality Agreement between MTLM and Seller, dated February 2, 1998,
Seller will permit representatives of Buyer to have full access, at all
reasonable times, and in a manner so as not to interfere with the normal
business operations of Seller, to all premises, properties, personnel, books,
records (including Tax records), contracts, agreements, instruments,
certificates, permits, licenses and documents of or pertaining to Seller.
5.6 NOTICE OF DEVELOPMENTS. Each Party will give prompt written notice
to the other Party of any material adverse development causing a breach of any
of its own representations and warranties in Article 3 and Article 4. No
disclosure by any Party pursuant to this Section 5.6 shall be deemed to amend or
supplement the Disclosure Schedule or to prevent or cure any misrepresentation,
breach of warranty, or breach of covenant.
5.7 EXCLUSIVITY. Seller will not (a) solicit, initiate, or encourage
the submission of any proposal or offer from any Person relating to the
acquisition of any capital stock or other voting securities, or any substantial
portion of the assets, of Seller (including any acquisition structured as a
merger, consolidation, or share exchange) or (b) participate in any discussions
or negotiations regarding, furnish any information with respect to, assist or
participate in, or facilitate in any other manner any effort or attempt by any
Person to do or seek any of the foregoing. Seller will notify Buyer immediately
if any Person makes any proposal, offer, inquiry, or contact with respect to any
of the foregoing.
5.8 TITLE INSURANCE. (a) Seller will obtain the following title
insurance commitments, policies, and riders in preparation for the Closing
with respect to each parcel of real estate that Seller owns, an ALTA
Owner's Policy of Title Insurance Form B-1987 (or equivalent policy reasonably
acceptable to Buyer if the real property is located in a state in which an ALTA
Owner's Policy of Title Insurance Form B-1987 is not available) issued by a
title insurer reasonably satisfactory to Buyer (and, if requested by Buyer,
reinsured in whole or in part by one or more
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insurance companies and pursuant to a direct access agreement reasonably
acceptable to Buyer), in such amount as Buyer reasonably may determine to be the
fair market value of such real property (including all improvements located
thereon), insuring title to such real property to be in Buyer as of the Closing
(subject only to the title exceptions described above in Section 3.12(a) and in
Disclosure Schedule 3.12(a)); and
(b) Seller will obtain an assignment and estoppel agreement with
respect to each parcel of real estate that Seller leases or subleases and which
is listed in Disclosure Schedule 3.12(b).
Each title insurance policy delivered under Section 5.8(a) shall (a) insure
title to the real property and all recorded easements benefiting such real
property, (b) contain an "extended coverage endorsement" insuring over the
general exceptions contained customarily in such policies, (c) contain an ALTA
Zoning Endorsement 3.1 (or equivalent), (d) contain an endorsement insuring that
the real property described in the title insurance policy is the same real
estate as shown on the Survey delivered with respect to such property, (e)
contain an endorsement insuring that each street adjacent to the real property
is a public street and that there is direct and unencumbered pedestrian and
vehicular access to such street from the real property, (f) contain an inflation
endorsement providing for annual adjustments in the amount of coverage
corresponding to the annual percentage increase, if any, in the United States
Department of Commerce Composite Construction Cost Index (Base Year = __), (g)
if the real property consists of more than one record parcel, contain a
"contiguity" endorsement insuring that all of the record parcels are contiguous
to one another, and (h) contain a "non-imputation" endorsement to the effect
that title defects known to the officers, directors, and stockholders of the
owner prior to the Closing shall not be deemed "facts known to the insured" for
purposes of the policy.
5.9 SURVEYS. With respect to each parcel of real property that Seller
owns, leases, or subleases, and as to which a title insurance policy is to be
procured pursuant to Section 5.8, Seller will procure in preparation for the
Closing a current survey of the real property certified to Buyer, prepared by a
licensed surveyor and conforming to current ALTA Minimum Detail Requirements for
Land Title Surveys, disclosing the location of all improvements, easements,
party walls, sidewalks, roadways, utility lines, and other matters shown
customarily on such surveys, and showing access affirmatively to public streets
and roads (the "SURVEY"). The Survey shall not disclose any survey defect or
encroachment from or onto the real property which has not been cured or insured
over prior to the Closing.
5.10 ENVIRONMENTAL CONCERNS. Certain "Identified Environmental
Concerns" have been identified with respect to the Acquired Assets, as more
particularly described in a letter from the Seller and the Stockholders to the
Buyer and MTLM dated June 16, 1998. Such letter is hereby incorporated by
reference into this Agreement by reference thereto and each of the
representations, warranties and covenants made by Seller and the Stockholders in
such letter is deemed to be
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hereby repeated in full as a representation, warranty and covenant of this
Agreement as if set forth in full herein. Seller and the Stockholders shall be
solely responsible for, and indemnify and hold harmless Buyer and MTLM for, any
Adverse Consequences relating to such Identified Environmental Concerns in
accordance with Article 8. Any waiver by Buyer or MTLM pursuant to Section 6.1
shall not be deemed a waiver of this Section 5.10 unless specifically stated in
the writing to be delivered pursuant to Section 6.1.
5.11 PERMITS, LICENSES AND CONTRACTS. Seller shall take all action
necessary to comply with the provisions of Section 6.1(d), including, but not
limited to, the filing of any required applications and complying with any
notice requirements (for example, obtaining a new permit for the aluminum sweat
furnace and copper wire insulation incinerator and giving notice pursuant to the
NPDES permit).
ARTICLE 6
CONDITIONS TO OBLIGATION TO CLOSE
6.1 CONDITIONS TO OBLIGATION OF MTLM AND BUYER. The obligation of MTLM
and Buyer to consummate the transactions to be performed by it in connection
with the Closing is subject to satisfaction of the following conditions:
(a) the representations and warranties set forth in Article 3
shall be true and correct in all material respects at and as of the
Closing Date;
(b) Seller and the Stockholders shall have performed and
complied with all of their covenants hereunder in all material respects
through the Closing;
(c) Seller shall have procured all of the title insurance
commitments, policies, riders specified in Section 5.8 and all of the
Surveys specified in Section 5.9;
(d) Seller shall have procured for the benefit of Buyer (i)
any third party consents necessary to transfer the contracts set forth
in Disclosure Schedules 3.16(a)(i)-(iv) and (ii) except as contemplated
in Section 9.7, all of the permits, licenses, authorizations and
approvals set forth in Disclosure Schedules 3.16(b), 3.16(c),
3.13(d),and 3.26(b) (Buyer will provide all information, cooperation
and necessary signatures to Seller in order to assist in such
procurement);
(e) no action, suit, or proceeding shall be pending or
threatened before any court or quasi-judicial or administrative agency
of any federal, state, local, or foreign jurisdiction or before any
arbitrator wherein an unfavorable injunction, judgment, order, decree,
ruling, or charge would (a) prevent consummation of any of the
transactions contemplated by this Agreement, (b) cause any of the
transactions contemplated by this Agreement
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to be rescinded following consummation, or (c) affect adversely the
right of Buyer to own the Acquired Assets, or to operate the business
of Seller (and no such injunction, judgment, order, decree, ruling, or
charge shall be in effect);
(f) Seller shall have delivered to Buyer a certificate to the
effect that each of the conditions specified above in Section
6.1(a)-(d) is satisfied in all respects;
(g) all applicable waiting periods (and any extensions
thereof) under the Hart-Scott-Rodino Act shall have expired or
otherwise been terminated and the Parties shall have received all other
material authorizations, consents, and approvals of governments and
governmental agencies referred to in Section 3.3 and Section 4.3;
(h) the relevant Parties shall have entered into the
Assumption Agreement, Bill of Sale and General Assignment, Employment
Agreements and Escrow Agreement;
(i) Buyer shall have received from counsel to Seller and the
Stockholders an opinion in form and substance as set forth in Exhibit G
attached hereto, addressed to MTLM and Buyer, and dated as of the
Closing Date;
(j) all actions to be taken by Seller and the Stockholders
in connection with consummation of the transactions contemplated hereby
and all certificates, opinions, instruments, and other documents
required to effect the transactions contemplated hereby will be
reasonably satisfactory in form and substance to Buyer;
(k) there shall have been no material adverse change in the
financial condition of Seller since December 31, 1997; and
(l) the Boards of Directors (or the Executive Committees
thereof) of each of MTLM and Buyer shall have approved the transactions
contemplated by this Agreement within two business days from the date
hereof.
Buyer may waive any condition specified in this Section 6.1
if it executes a writing so stating at or prior to the Closing.
6.2 CONDITIONS TO OBLIGATION OF SELLER AND THE STOCKHOLDERS. The
obligation of Seller and the Stockholders to consummate the transactions to be
performed by it in connection with the Closing is subject to satisfaction of the
following conditions:
(a) the representations and warranties set forth in Article 4
shall be true and correct in all material respects at and as of the
Closing Date;
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(b) MTLM and Buyer shall have performed and complied with all
of its covenants hereunder in all material respects through the
Closing;
(c) no action, suit, or proceeding shall be pending or
threatened before any court or quasi-judicial or administrative agency
of any federal, state, local, or foreign jurisdiction or before any
arbitrator wherein an unfavorable injunction, judgment, order, decree,
ruling, or charge would (a) prevent consummation of any of the
transactions contemplated by this Agreement or (b) cause any of the
transactions contemplated by this Agreement to be rescinded following
consummation (and no such injunction, judgment, order, decree, ruling,
or charge shall be in effect);
(d) Buyer shall have delivered to Seller a certificate to the
effect that each of the conditions specified above in Section
6.2(a)-(c) is satisfied in all respects;
(e) all applicable waiting periods (and any extensions
thereof) under the Hart-Scott-Rodino Act shall have expired or
otherwise been terminated and the Parties shall have received all other
material authorizations, consents, and approvals of governments and
governmental agencies referred to in Section 3.3 and Section 4.3;
(f) the relevant Parties shall have entered into the
Assumption Agreement, Bill of Sale and General Assignment, Employment
Agreements and Escrow Agreement;
(g) Seller shall have received from counsel to MTLM and Buyer
an opinion in form and substance as set forth in Exhibit H attached
hereto, addressed to Seller, and dated as of the Closing Date;
(h) all actions to be taken by MTLM and Buyer in connection
with consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents required to
effect the transactions contemplated hereby will be reasonably
satisfactory in form and substance to Seller; and
(i) there shall have been no material adverse change in
financial condition of MTLM since May 1, 1998 (after giving effect to
the closing of the recent debt offering of MTLM).
Seller may waive any condition specified in this Section 6.2 if it executes a
writing so stating at or prior to the Closing.
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ARTICLE 7
TERMINATION
7.1 TERMINATION OF AGREEMENT. Certain of the Parties may terminate this
Agreement as provided below:
(a) Buyer and Seller may terminate this Agreement by mutual
written consent at any time prior to the Closing;
(b) Buyer may terminate this Agreement by giving written
notice to Seller on or before the Closing Date if Buyer is not
reasonably satisfied with the results of its continuing business,
legal, and accounting due diligence regarding Seller;
(c) Buyer may terminate this Agreement by giving written
notice to Seller at any time prior to the Closing (i) in the event
Seller or any Stockholder has breached any material representation,
warranty, or covenant contained in this Agreement in any material
respect, Buyer has notified Seller of the breach, and the breach has
continued without cure for a period of 15 days after the notice of
breach or (ii) if the Closing shall not have occurred on or before July
15, 1998; and
(d) Seller may terminate this Agreement by giving written
notice to Buyer at any time prior to the Closing (i) in the event MTLM
or Buyer has breached any material representation, warranty, or
covenant contained in this Agreement in any material respect, Seller
has notified Buyer of the breach, and the breach has continued without
cure for a period of 10 days after the notice of breach or (ii) if the
Closing shall not have occurred on or before July 15, 1998.
7.2 EFFECT OF TERMINATION. If any Party terminates this Agreement
pursuant to Section 7.1, all rights and obligations of the Parties hereunder
shall terminate without any Liability of any Party to any other Party (except
for any Liability of any Party then in breach); provided, however, that that
certain Confidentiality Agreement dated February 2, 1998 between MTLM and Seller
shall not be affected by the terms of this Agreement.
ARTICLE 8
REMEDIES FOR BREACHES OF THIS AGREEMENT
8.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. All of the
representations, warranties and covenants of Seller and the Stockholders
contained in this Agreement shall survive the Closing (even if MTLM or Buyer had
Knowledge of any misrepresentation or breach of any warranty or covenant at the
time of Closing) and continue in full force and effect for a period of 18 months
thereafter, except (a) the representations and warranties set forth in Sections
3.11, 3.24, and
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<PAGE> 39
3.26 (including, but not limited to, the representations and warranties
incorporated therein by reference to that certain letter from Seller and the
Stockholders to MTLM and Buyer dated June 16, 1998), which shall survive the
Closing (even if Buyer had Knowledge of any misrepresentation or breach of
warranty at the time of Closing) and continue in full force and effect until the
applicable statute of limitations expires (or for a period of 25 years if there
is no applicable statute of limitations), (b) the representations and warranties
set forth in Sections 3.1 through 3.6 shall continue in full force and effect
forever (even if the Party suffering Adverse Consequences had Knowledge of any
misrepresentation or breach of warranty at the time of the Closing), and (c) any
pre- or post-Closing covenants set forth in this Agreement shall continue in
full force and effect until satisfied. All of the representations, warranties
and covenants of MTLM and Buyer contained in Article 4 shall survive the Closing
(even if Seller or any Stockholder had Knowledge of any misrepresentation or
breach of any warranty or covenant at the time of Closing) and continue in full
force and effect for a period of 18 months thereafter.
8.2 INDEMNIFICATION PROVISIONS FOR BENEFIT OF BUYER. In the event
Seller or any Stockholder breaches (or in the event any third party alleges
facts that, if true, would mean Seller and/or any Stockholder has breached) any
representations, warranties, or covenants of Seller and/or any Stockholder
contained herein and, if there is an applicable survival period pursuant to
Section 8.1, (provided Buyer or MTLM issues a Claim Notice within such survival
period) then Seller and each Stockholder agrees to jointly and severally
indemnify Buyer and/or MTLM from and against the entirety of any Adverse
Consequences Buyer and/or MTLM may suffer through and after the date of the
claim for indemnification (including any Adverse Consequences suffered after the
end of any applicable survival period) resulting from, arising out of, relating
to, in the nature of, or caused by the breach (or the alleged breach).
8.3 INDEMNIFICATION PROVISIONS FOR BENEFIT OF SELLER AND THE
STOCKHOLDERS. In the event Buyer and/or MTLM breaches (or in the event any third
party alleges facts that, if true, would mean Buyer and/or MTLM has breached)
any representations, warranties, or covenants of MTLM and/or Buyer contained
herein, and, if there is an applicable survival period pursuant to Section 8.1,
(provided Seller issues a Claim Notice within such survival period) then MTLM
and Buyer agree to jointly and severally indemnify Seller and/or the
Stockholders from and against the entirety of any Adverse Consequences Seller
and/or the Stockholders may suffer through and after the date of the claim for
indemnification (including any Adverse Consequences suffered after the end of
any applicable survival period) resulting from, arising out of, relating to, in
the nature of or caused by the breach (or the alleged breach).
8.4 PROCEDURE FOR MATTERS INVOLVING THIRD PARTIES.
(a) If any third party shall notify any Party (the
"INDEMNIFIED PARTY") with respect to any matter (a "THIRD PARTY CLAIM") which
may give rise to a
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<PAGE> 40
claim for indemnification against any other Party (the "INDEMNIFYING
PARTY") under this Article 8, then the Indemnified Party shall promptly issue a
Claim Notice to the Indemnifying Party with respect thereto.
(b) Any Indemnifying Party will have the right to defend
the Indemnified Party against the Third Party Claim with counsel of its choice
reasonably satisfactory to the Indemnified Party so long as (i) the Indemnifying
Party notifies the Indemnified Party in writing within 15 days following the
receipt of the Claim Notice that the Indemnifying Party will indemnify the
Indemnified Party from and against the entirety of any Adverse Consequences the
Indemnified Party may suffer resulting from, arising out of, relating to, in the
nature of, or caused by the Third Party Claim, (ii) the Indemnifying Party
provides the Indemnified Party with evidence reasonably acceptable to the
Indemnified Party that the Indemnifying Party will have the financial resources
to defend against the Third Party Claim and fulfill its indemnification
obligations hereunder, (iii) the Third Party Claim involves only money damages
and does not seek an injunction or other equitable relief, (iv) settlement of,
or an adverse judgment with respect to, the Third Party Claim is not in the good
faith judgment of the Indemnified Party, likely to establish a precedential
custom or practice adverse to the continuing business interests of the
Indemnified Party, and (v) the Indemnifying Party conducts the defense of the
Third Party Claim actively and diligently.
(c) So long as the Indemnifying Party is conducting the
defense of the Third Party Claim in accordance with Section 8.4(b), (i) the
Indemnified Party may retain separate co-counsel at its sole cost and expense
and participate in the defense of the Third Party Claim, (ii) the Indemnified
Party will not consent to the entry of any judgment or enter into any settlement
with respect to the Third Party Claim without the prior written consent of the
Indemnifying Party (not to be withheld unreasonably), and (iii) the Indemnifying
Party will not consent to the entry of any judgment or enter into any settlement
with respect to the Third Party Claim without the prior written consent of the
Indemnified Party (not to be withheld unreasonably).
(d) In the event any of the conditions in Section 8.4(b)
is or becomes unsatisfied, (i) the Indemnified Party may defend against, and
consent to the entry of any judgment or enter into any settlement with respect
to, the Third Party Claim in any manner it reasonably may deem appropriate (and
the Indemnified Party need not consult with, or obtain any consent from, any
Indemnifying Party in connection therewith), (ii) the Indemnifying Parties will
reimburse the Indemnified Party promptly and periodically for the costs of
defending against the Third Party Claim (including reasonable attorneys' fees
and expenses), and (iii) the Indemnifying Parties will remain responsible for
any Adverse Consequences the Indemnified Party may suffer resulting from,
arising out of, relating to, in the nature of, or caused by the Third Party
Claim to the fullest extent provided in this Article 8.
8.5 NOTICE OF CLAIM. A Party suffering Adverse Consequences that gives
or could give rise to a claim for indemnification under this Article 8 shall
promptly
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<PAGE> 41
notify each other Party thereof in writing (a "CLAIM NOTICE") in
accordance with Section 10.7. The Claim Notice shall contain a brief
description of the nature of the Adverse Consequences suffered and, if
practicable, an aggregate dollar value estimate of the Adverse Consequence
suffered. No delay in the issuance of a Claim Notice shall relieve any Party
from any obligation under this Article 8, unless and solely to the extent such
Party is thereby prejudiced.
8.6 LIMITATIONS ON SELLER'S AND THE STOCKHOLDERS' INDEMNIFICATION
LIABILITY. Seller and the Stockholders shall have no liability for
indemnification claims under Section 8.2, unless and until the aggregate Adverse
Consequences claimed exceed $500,000.00; provided, however, if the aggregate
Adverse Consequences claimed under Section 8.2 exceed $500,000.00, Seller's and
the Stockholders' liability shall relate back to and include the first dollar of
aggregate Adverse Consequences so claimed; provided, further however, that any
Purchase Price adjustments pursuant to Section 2.4 or any breach (or Adverse
Consequences resulting therefrom or relating thereto) of any of Sections 3.2,
3.5, 3.11, 3.16(b), 3.26(b), 3.26(c), 3.26(e), 3.26(i), 3.29 (on a
dollar-for-dollar basis), 5.10, 5.11, 9.7 or 9.8 and any liability of Seller and
the Stockholders for indemnification claims relating thereto, shall not be
subject to the limitations of this Section 8.6.
8.7 LIMITATIONS ON BUYER'S INDEMNIFICATION LIABILITY. MTLM and Buyer
shall have no liability for indemnification claims under Section 8.3, unless and
until the aggregate Adverse Consequences claimed under Section 8.3 exceed
$500,000.00; provided, however, if the aggregate Adverse Consequences exceed
$500,000.00, MTLM's and Buyer's liability shall relate back to and include the
first dollar of Adverse Consequences so claimed.
8.8 RIGHT TO ESCROW SHARES. Subject to the limitations of Section 8.6,
Buyer may elect to exercise its rights under the Escrow Agreement to recover all
or any portion of any Adverse Consequences suffered by Buyer (in lieu of seeking
any indemnification to which it is entitled under this Article 8) by issuance of
a Claim Notice to Seller and the Escrow Agent.
8.9 OTHER INDEMNIFICATION PROVISIONS. The foregoing indemnification
provisions are in addition to, and not in derogation of, any statutory,
equitable, or common law remedy (including without limitation any such remedy
arising under Environmental, Health, and Safety Requirements) any Party may have
with respect to the transactions contemplated by this Agreement. Each
Stockholder hereby agrees not to make any claim for indemnification against MTLM
or Buyer by reason of the fact that such Stockholder was a director, officer,
employee, or agent of Seller or was serving at the request of Seller as a
partner, member, trustee, director, officer, employee, or agent of another
entity (whether such claim is for judgments, damages, penalties, fines, costs,
amounts paid in settlement, losses, expenses, or otherwise and whether such
claim is pursuant to any statute, bylaw, agreement, applicable law or
otherwise).
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<PAGE> 42
ARTICLE 9
POST-CLOSING COVENANTS
The Parties agree as follows with respect to the period following the
Closing:
9.1 GENERAL. If at any time after the Closing any further action is
necessary or desirable to carry out the purposes of this Agreement, each of the
Parties will take such further action (including the execution and delivery of
such further instruments and documents) as any other Party reasonably may
request, all at the sole cost and expense of the requesting Party (unless the
requesting Party is entitled to indemnification therefor under Article 8).
Seller and the Stockholders acknowledge and agree that, from and after the
Closing, Buyer will be entitled to possession of all documents, books, records
(including Tax records), agreements, and financial data of any sort relating to
the business of Seller.
9.2 LITIGATION SUPPORT. In the event and for so long as any Party
actively is contesting or defending against any action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand in connection with
(a) any transaction contemplated under this Agreement or (b) any fact,
situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act, or transaction on or prior
to the Closing Date involving each of the other Parties will reasonably
cooperate with such Party and such Party's counsel in the contest or defense,
make available their personnel, and provide such testimony and access to their
books and records as shall be necessary in connection with the contest or
defense, at the sole cost and expense of the contesting or defending Party
(unless the contesting or defending Party is entitled to indemnification
therefor under Article 8).
9.3 TRANSITION. Neither Seller nor any Stockholder will take any action
that is designed or intended to have the effect of discouraging any lessor,
licensor, customer, supplier, or other business associate of Seller from
maintaining the same business relationships with MTLM or Buyer after the Closing
as it maintained with Seller prior to the Closing. Seller will refer all
customer inquiries relating to the business of Seller to MTLM or Buyer from and
after the Closing.
9.4 CONFIDENTIALITY. Seller and each Stockholder will treat and hold as
such all of the Confidential Information, refrain from using any of the
Confidential Information except in connection with this Agreement, and deliver
promptly to Buyer or destroy, at the request and option of Buyer, all tangible
embodiments (and all copies) of the Confidential Information which are in their
possession. In the event that Seller or any Stockholder is requested or required
(by oral question or request for information or documents in any legal
proceeding, interrogatory, subpoena, civil investigative demand, or similar
process) to disclose any Confidential Information, that Seller and each
Stockholder will notify Buyer promptly of the request or requirement so that
Buyer may seek an appropriate protective order or waive compliance with the
provisions of this Section 9.4. If, in the absence of a protective
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<PAGE> 43
order or the receipt of a waiver hereunder, Seller or any Stockholder is, on the
advice of counsel, compelled to disclose any Confidential Information to any
tribunal or else stand liable for contempt, that Seller or such Stockholder may
disclose the Confidential Information to the tribunal; provided, however; that
the disclosing Seller or Stockholder shall use their reasonable best efforts to
obtain, at the reasonable request of Buyer, an order or other assurance that
confidential treatment will be accorded to such portion of the Confidential
Information required to be disclosed as Buyer shall designate. The foregoing
provisions shall not apply to any Confidential Information which is generally
available to the public immediately prior to the time of disclosure.
9.5 COVENANT NOT TO COMPETE. For a period of five years from and after
the Closing Date, Seller and any Stockholder that is not party to any Employment
Agreement will not engage, directly or indirectly, in any business that MTLM or
Buyer conducts as of the Closing Date; provided, however, that ownership of less
than 1% of the outstanding stock of any publicly-traded corporation shall not be
deemed a breach of this Section 9.5. If the final judgment of a court of
competent jurisdiction declares that any term or provision of this Section 9.5
is invalid or unenforceable, the Parties agree that the court making the
determination of invalidity or unenforceability shall have the power to reduce
the scope, duration, or area of the term or provision, to delete specific words
or phrases, or to replace any invalid or unenforceable term or provision with a
term or provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or provision, and
this Agreement shall be enforceable as so modified after the expiration of the
time within which the judgment may be appealed.
9.6 MTLM STOCK CERTIFICATES. Each stock certificate delivered by MTLM
to Seller will be imprinted with legends substantially in the following form:
The shares represented by this certificate have not been registered
under the Securities Act of 1933, as amended (the "Securities Act").
The shares represented by this certificate have been acquired for
investment purposes and may not be offered for sale, sold, delivered
after sale, transferred, pledged, or hypothecated in the absence of an
effective Registration Statement filed by the issuer with the
Securities and Exchange Commission covering such shares under the
Securities Act or an opinion of counsel satisfactory to the issuer that
such registration is not required.
The shares represented by this certificate were issued in connection
with a transaction to which Rule 145 promulgated under the Securities
Act applies. These shares may only be transferred in accordance with
the terms of such Rule.
Each holder desiring to transfer MTLM Common Stock first must furnish
MTLM with (a) a written opinion satisfactory to MTLM in form and substance from
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<PAGE> 44
counsel satisfactory to MTLM by reason of experience to the effect that the
holder may transfer MTLM Common Stock as desired without registration under the
Securities Act and (b) a written undertaking executed by the desired transferee
satisfactory to MTLM in form and substance agreeing to be bound by the
restrictions on transfer contained herein.
9.7 AIR PERMIT REQUIREMENT. Seller shall, within 30 days of the Closing
Date, cause Buyer to obtain a new air permit in the name of Buyer (substantially
identical to the Air Permit (No. 4-07-0196-8601) in the name of Seller) relating
to the operation of the aluminum sweat furnace and copper wire insulation
incinerator included in the Acquired Assets.
9.8 INCORPORATION OF COVENANTS. The covenants made by Seller and the
Stockholders in that certain letter from Seller and the Stockholders to Buyer
and MTLM dated June 16, 1998 are hereby incorporated into this Agreement by
reference thereto and are deemed to be hereby repeated in full as covenants of
this Agreement as if set forth in full herein.
9.9 DEFAULT BY SELLER. If Seller fails to comply with the provisions of
Section 9.7, Buyer shall, within _____ days thereafter, have the right,
exercisable in its sole discretion, to (i) return the Acquired Assets to Seller
and (ii) require Seller to be solely responsible for the Assumed Liabilities,
whereupon Seller and the Stockholders shall simultaneously return to Buyer the
entire Purchase Price as set forth in Section 2.3 (as may be adjusted in
accordance with Section 2.4).
ARTICLE 10
MISCELLANEOUS
10.1 PRESS RELEASES AND PUBLIC ANNOUNCEMENTS. No Party shall issue any
press release or make any public announcement relating to the subject matter of
this Agreement prior to the Closing without the prior approval of the other
Party; provided, however, that any Party may make any public disclosure it
believes in good faith is required by applicable law or any listing or trading
agreement concerning its publicly-traded securities (in which case the
disclosing Party will use its reasonable best efforts to advise the other Party
prior to making the disclosure).
10.2 NO THIRD-PARTY BENEFICIARIES. This Agreement shall not confer any
rights or remedies upon any Person other than the Parties and their respective
successors and permitted assigns.
10.3 ENTIRE AGREEMENT. This Agreement (including the documents referred
to herein) constitutes the entire agreement between the Parties and supersedes
any prior understandings, agreements, or representations by or between the
Parties, written or oral, to the extent they related in any way to the subject
matter hereof.
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<PAGE> 45
10.4 SUCCESSION AND ASSIGNMENT. This Agreement shall be binding upon
and inure to the benefit of the Parties named herein and their respective
successors and permitted assigns. No Party may assign either this Agreement or
any of its rights, interests, or obligations hereunder without the prior written
approval of the other Party; provided, however, that this Agreement may be
collaterally assigned by MTLM to its senior lenders without the consent of any
other Party hereto; provided, further, that MTLM and/or Buyer may (a) assign any
or all of its rights and interests hereunder to one or more of its Affiliates
and (b) designate one or more of its Affiliates to perform its obligations
hereunder (in any or all of which cases MTLM and Buyer nonetheless shall remain
responsible for the performance of all of its obligations hereunder).
10.5 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
10.6 HEADINGS. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
10.7 NOTICES. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given if (and then two
business days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set forth
below:
If to Seller: Jonathan L. Kimerling Copy to: Bradley J. Sklar, Esq.
M. Kimerling & Sons, Inc. Sirote & Permutt, P.C.
2020 Vanderbilt Road 2222 Arlington Avenue
Birmingham, AL 35234 South
Birmingham, AL 35205
If to Buyer: Metal Management, Inc. Copy to: Mark S. Croft, Esq.
500 North Dearborn Street Akin, Gump, Strauss, Hauer,
Chicago, IL 60610 & Feld, L.L.P.
Attention: Chief Executive 1900 Pennzoil Place
Officer and General South Tower
Counsel Houston, TX 77002
Any Party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy,
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<PAGE> 46
telex, ordinary mail, or electronic mail), but no such notice, request, demand,
claim, or other communication shall be deemed to have been duly given unless and
until it actually is received by the intended recipient. Any Party may change
the address to which notices, requests, demands, claims, and other
communications hereunder are to be delivered by giving the other Party notice in
the manner herein set forth.
10.8 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the domestic laws of the State of Delaware without giving
effect to any choice or conflict of law provision or rule (whether of the States
of Alabama, Delaware, Illinois or Texas, or any other jurisdiction) that would
cause the application of the laws of any jurisdiction other than the State of
Delaware.
10.9 AMENDMENTS AND WAIVERS. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by Buyer
and Seller. Seller may consent to any such amendment at any time prior to the
Closing with the prior authorization of its board of directors; provided,
however, that any amendment effected after Stockholders have approved this
Agreement will be subject to the restrictions contained in the General
Corporation Law of the State of Delaware. No waiver by any Party of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
10.10 SEVERABILITY. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
10.11 EXPENSES. Each of the Parties will bear their own costs and
expenses (including legal fees and expenses) incurred in connection with this
Agreement and the transactions contemplated hereby.
10.12 CONSTRUCTION. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring any Party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word "including" shall mean including without limitation. NOTHING IN DISCLOSURE
SCHEDULES 3.3, 3.5 (WITH RESPECT TO LIENS OR OTHER SECURITY INTERESTS), 3.8(t),
OR 3.26(a)-(g) SHALL BE DEEMED AN EXCEPTION TO OR LIMITATION OF A REPRESENTATION
OR WARRANTY RELATING THERETO; PROVIDED, HOWEVER, LISTS, SUMMARIES AND
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<PAGE> 47
DESCRIPTIONS IN THE DISCLOSURE SCHEDULES OF INFORMATION REQUESTED BY A
PARTICULAR REPRESENTATION OR WARRANTY ARE PERMISSIBLE.
10.13 INCORPORATION OF ANNEXES, EXHIBITS AND SCHEDULES. The Annexes,
Exhibits and Schedules identified in this Agreement are incorporated herein by
reference and made a part hereof.
10.14 SPECIFIC PERFORMANCE. Each of the Parties acknowledges and agrees
that the other Party would be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with their specific
terms or otherwise are breached. Accordingly, each of the Parties agrees that
the other Party shall be entitled to an injunction or injunctions to prevent
breaches of the provisions of this Agreement and to enforce specifically this
Agreement and the terms and provisions hereof in any action instituted in any
court of the United States or any state thereof having jurisdiction over the
Parties and the matter (subject to the provisions set forth in Section 10.15),
in addition to any other remedy to which it may be entitled, at law or in
equity.
10.15 SUBMISSION TO JURISDICTION. Each of the Parties submits to the
jurisdiction of any state or federal court sitting in the State of Delaware, in
any action or proceeding arising out of or relating to this Agreement and agrees
that all claims in respect of the action or proceeding may be heard and
determined in any such court. Each Party also agrees not to bring any action or
proceeding arising out of or relating to this Agreement in any other court. Each
of the Parties waives any defense of inconvenient forum to the maintenance of
any action or proceeding so brought and waives any bond, surety, or other
security that might be required of any other Party with respect thereto. Any
Party may make service on the other Party by sending or delivering a copy of the
process to the Party to be served at the address and in the manner provided for
the giving of notices in Section 10.7. Nothing in this Section 10.15 shall
affect the right of any Party to bring any action or proceeding arising out of
or relating to this Agreement in any other court or to serve legal process in
any other manner permitted by law or in equity. Each Party agrees that a final
judgment in any action or proceeding so brought shall be conclusive and may be
enforced by suit on the judgment or in any other manner provided by law or in
equity.
10.16 BULK TRANSFER LAWS. Seller will take all steps necessary
(including any notice requirements) to comply with the provisions of any bulk
transfer laws of any jurisdiction in connection with the transactions
contemplated by this Agreement.
[REMAINDER OF PAGE INTENTIONALLY BLANK.]
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the date
first written above.
METAL MANAGEMENT, INC.
By: /s/ Daniel B. Burgess
------------------------------------
Daniel B. Burgess
Executive Vice President
KIMERLING ACQUISITION CORP.
By: /s/ Daniel B. Burgess
------------------------------------
Daniel B. Burgess
Vice President
M. KIMERLING & SONS, INC.
By: /s/ David B. Kimerling
------------------------------------
David B. Kimerling
President
JONATHAN L. KIMERLING TEN YEAR TRUST
By: /s/ Jonathan L. Kimerling
------------------------------------
Jonathan L. Kimerling, Trustee
ISABELLA NAUMANN KIMERLING TRUST
By: /s/ Jonathan L. Kimerling
------------------------------------
Jonathan L. Kimerling, Trustee
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<PAGE> 49
VICTORIA PATTON KIMERLING TRUST
By: /s/ Jonathan L. Kimerling
------------------------------------
Jonathan L. Kimerling, Trustee
JOEL MAXWELL KIMERLING TRUST
By: /s/ Jonathan L. Kimerling
------------------------------------
Jonathan L. Kimerling, Trustee
DAVID B. KIMERLING TEN YEAR TRUST
By: /s/ David B. Kimerling
------------------------------------
David B. Kimerling, Trustee
KATHERINE MAURA KIMERLING TRUST
By: /s/ David B. Kimerling
------------------------------------
David B. Kimerling, Trustee
ALEX OLIVER KIMERLING TRUST
By: /s/ David B. Kimerling
------------------------------------
David B. Kimerling, Trustee
/s/ Jonathan L. Kimerling
---------------------------------------
Jonathan L. Kimerling
/s/ David B. Kimerling
---------------------------------------
David B. Kimerling
44
<PAGE> 50
ANNEX I
STOCKHOLDERS OF SELLER
<TABLE>
<CAPTION>
Name Common Common
- ---- ------ ------
Non Voting Voting
---------- ------
Stock Stock
----- -----
<S> <C> <C>
1. Jonathan L. Kimerling 11,695 529.75
2. David B. Kimerling 10,484 529.75
3. Jonathan L. Kimerling Ten Year Trust 6,000
4. Isabella Naumann Kimerling Trust 130
5. Victoria Patton Kimerling Trust 130
6. Joel Maxwell Kimerling Trust 130
7. David B. Kimerling Ten Year Trust 7,211
8. Katherine Maura Kimerling Trust 195
9. Alex Oliver Kimerling Trust 195
</TABLE>
<PAGE> 51
ANNEX II
EXCLUDED ASSETS
[TO BE REPLACED BY SELLER'S SCHEDULE]
<PAGE> 52
ANNEX III
ASSUMED LIABILITIES
1. Trade payables and accrued expenses which accrued expenses (including
any accrued monetary value for vacation time) of Seller (excluding all
accrued dividends and bonuses) may not to exceed $3,000,000.00
2. Any obligation arising under or out of the contracts and agreements set
forth in Disclosure Schedule 3.16(a)(i) after the Closing Date.
<PAGE> 53
ANNEX IV
EBITDA
EBITDA shall mean the sum of the following:
1. Net Income (for the period December 1, 1997 to the Closing Date)
Plus: interest
taxes
depreciation
amortization
insider compensation(1)
other compensation adjustments(2)
sale of fixed assets and investments(2)
profit sharing contributions(2)
trading losses(2)
Plus
2. Net Income (for the period from the Closing Date to November 30, 1998)
Plus: interest
taxes
depreciation
amortization
- ------------
1 To the extent of the excess of the amount of compensation paid to insiders
during the period between December 1, 1997 and the Closing Date over the amount
that such insiders would have been paid during that same period in accordance
with the terms of their respective employment agreements entered into as of the
Closing Date.
2 Prior to the Closing, Buyer, MTLM and Seller shall mutually
agree on the amounts to be added back for other compensation adjustments, sale
of fixed assets and investments, profit sharing contributions, and trading
losses.
<PAGE> 54
EXHIBIT A
FORM OF ASSUMPTION AGREEMENT
[See Tab No. 4]
<PAGE> 55
EXHIBIT B
FORM OF BILL OF SALE AND GENERAL ASSIGNMENT
[See Tab No. 5]
<PAGE> 56
EXHIBIT C-1
FORM OF EMPLOYMENT AGREEMENT
Jonathan L. Kimerling
[See Tab No. 6]
<PAGE> 57
EXHIBIT C-2
FORM OF EMPLOYMENT AGREEMENT
David B. Kimerling
[See Tab No. 7]
<PAGE> 58
EXHIBIT C-3
FORM OF EMPLOYMENT AGREEMENT
Jeffrey H. Fisher
[See Tab No. 8]
<PAGE> 59
EXHIBIT C-4
FORM OF EMPLOYMENT AGREEMENT
Neil G. Fisher
[See Tab No. 9]
<PAGE> 60
EXHIBIT C-5
FORM OF EMPLOYMENT AGREEMENT
Elliot Miller
[See Tab No. 10]
<PAGE> 61
See attached.
<PAGE> 62
See attached.
<PAGE> 63
EXHIBIT D
FORM OF ESCROW AGREEMENT
[See Tab No. 2]
<PAGE> 64
EXHIBIT E
ALLOCATION SCHEDULE
See attached.
<PAGE> 65
EXHIBIT F
HISTORICAL FINANCIAL STATEMENTS OF SELLER
See attached.
<PAGE> 66
EXHIBIT G
FORM OF OPINION OF COUNSEL TO SELLER AND THE STOCKHOLDERS
See attached.
<PAGE> 67
EXHIBIT I
REGISTRATION RIGHTS AGREEMENT
[See Tab No. 47]
<PAGE> 1
EXHIBIT 4.20
METAL MANAGEMENT, INC.
DECLARATION OF REGISTRATION RIGHTS
This Declaration of Registration Rights ("Declaration") is made as of
March 17, 1998, by Metal Management, Inc., a Delaware corporation ("MTLM"),
for the benefit of shareholders of Superior Forge, Inc. (the "Target
Shareholders"), acquiring shares of the Common Stock of MTLM pursuant to that
Merger Agreement dated as of February 16, 1998 (the "Acquisition Agreement")
among MTLM, MTLM Merger, Inc., a Delaware corporation ("Sub") and wholly-owned
subsidiary of MTLM, Superior Forge, Inc., a California corporation, and the
Target Shareholders and in consideration of such Target Shareholders approving
and entering into the Acquisition Agreement and the transactions contemplated
thereby.
1. Definitions. As used in this Declaration:
(a) "1934 Act" means the Securities Exchange Act of 1934, as amended.
(b) "Act" means the Securities Act of 1933, as amended.
(c) "Effective Time of the Merger" means the earlier of the time of
acceptance by the Secretaries of State of the Sate of California and the State
of Delaware of the filing of the Agreement and Plan of Merger with the
California Secretary of State or such later time as may be specified in the
Agreement and Plan of Merger.
(d) "Form S-3" means such form under the Act as in effect on the date
hereof or any registration form under the Act subsequently adopted by them SEC
which similarly permits inclusion or incorporation of substantial information
by reference to other documents filed by the Company with the commission.
(e) "Holder" means a Target Shareholder to whom shares of Common
Stock of MTLM are issued pursuant to the Acquisition Agreement and the Agreement
and Plan of Merger.
(f) "Material Event" means the happening of any event during the
period that the registration statement described in Section 2 hereof is
required to be effective as a result of which, in the judgment of MTLM, such
registration statement or the related Prospectus contains or may contain any
untrue statement of a material fact or omits or may omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading.
(g) "Registrable Securities" means for each Holder the number of
shares of MTLM Common Stock issued to such Holder pursuant to the
Acquisition Agreement and the Agreement and Plan of Merger and for all
Holders the sum of the Registrable Securities held by them.
<PAGE> 2
(h) "SEC" means the Securities and Exchange Commission.
Terms not otherwise defined herein have the meanings given to them
in the Acquisition Agreement.
2. Registration. Subject to Section 3 below, MTLM shall use its best
efforts to cause the Registrable Securities held by each Holder to be
registered under the Act as soon as practicable after the Effective Time of the
Merger, but in no event later than one hundred eighty (180) days after the
Effective Time of the Merger, so as to permit the sale thereof, and in
connection therewith shall prepare and file with the SEC no later than ninety
(90) days after the Effective Time of the Merger and shall use its best
efforts to cause to become effective no later than one hundred eighty (180)
days after the Effective Time of the Merger, a registration statement in such
form as is then available under the Act covering the Registrable Securities;
provided, however, that each Holder shall provide all such information and
materials and take all such action as may be required in order to permit MTLM
to comply with all the applicable requirements of the SEC and to obtain any
desired acceleration of the effective date of such registration statement,
such provision of information and materials to be a condition precedent to the
obligations of MTLM pursuant to this Declaration. MTLM shall not be required
to effect more than one (1) registration under this Declaration. The offerings
made pursuant to such registration shall not be underwritten.
3. Postponement of Registration.
(a) Initial Registration. Notwithstanding Section 2 above, MTLM
shall be entitled to postpone the declaration of effectiveness of the
registration statement prepared and filed pursuant to Section 2 for a
reasonable period of time, but not in excess of ninety (90) calendar days after
the applicable deadline, if the Board of Directors of MTLM, acting in good
faith, determines that there exists material non-public information about MTLM;
provided, however that MTLM may not do so unless it postpones all other pending
registration statements.
(b) Material Event. Each Holder agrees that, upon receipt of any
notice from MTLM of the happening of a Material Event, such Holder will
forthwith discontinue disposition of the Registrable Securities pursuant to the
registration statement described in Section 2 until such Holder's receipt of
copies of supplemented or amended prospectuses prepared by MTLM, and, if so
directed by MTLM, such Holder will deliver to MTLM (at the expense of MTLM) all
copies in its possession, other than permanent file copies then in such
Holder's possession, of the prospectus covering such Registrable Securities
current at the time of receipt of such notice. In no event shall MTLM delay
causing to be effective a supplement or post-effective amendment to a
registration statement pursuant to Section 2 or the related prospectus, for
more than forty-five (45) consecutive days or ninety (90) days during the
period beginning on the first anniversary of the Effective Time of the Merger
and ending on the second anniversary of the Effective Time of the Merger.
4. MTLM Registration.
(a) If (but without any obligation to do so) (A) MTLM proposes to
register any of its Common Stock or other securities under the Act in
connection with a public offering of such
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securities solely for cash (not including (i) a registration effected by MTLM
for shareholders other than the Holders, (ii) a registration relating solely
to MTLM's employee benefit plans, (iii) a registration relating solely to an
acquisition, or (iv) a registration on any form that does not include
substantially the same information as would be required to be included in a
registration statement covering the sale of the Registrable Securities) and
(B)(i) MTLM has not previously registered the Holder's Registrable Securities
under the Act and (ii) it is prior to the first anniversary of the Effective
Time of the Merger, MTLM shall, at such time, promptly give each Holder
written notice of such registration. Upon the written request of each Holder
given within twenty (20) days after mailing of such notice by MTLM, MTLM
shall, subject to the provisions of Section 4(b) and (c) below, cause to be
registered under the Act all of the Registrable Securities that each such
Holder has requested to be registered.
(b) In connection with any offering involving an underwriting of
shares of MTLM's capital stock, MTLM shall not be required under Section 4(a)
to include any of the Holders' securities in such underwriting unless they
accept the terms of the underwriting as agreed upon between MTLM and the
underwriters selected by it (or by other persons entitled to select the
underwriters), and then only in such quantity as the managing underwriter
determines in its sole discretion will not, due to marketing factors,
jeopardize the success of the offering by MTLM.
(c) If the total amount of securities, including Registrable
Securities, requested by shareholders of MTLM to be included in such
offering exceeds the amount of securities (other than securities to be sold by
MTLM) that the underwriters determine in their sole discretion is compatible
with the success of the offering, then MTLM shall be required to include in the
offering only that number of such securities, including Registrable Securities,
which the underwriters determine in their sole discretion will not jeopardize
the success of the offering (the securities so included to be apportioned pro
rata among the shareholders of MTLM requesting inclusion in such registration
according to the total amount of securities entitled to be included therein
owned by each such shareholder of MTLM). In no event shall any securities of
MTLM be excluded from such registration prior to the cut back of all shares
proposed to be sold in such offering by the shareholders of MTLM.
(d) If any Holder disapproves of the terms of any such underwriting,
such Holder may elect to withdraw therefrom by written notice to MTLM and the
underwriters. If such Holder's shares are withdrawn from registration, or if
the number of shares of Registrable Securities was previously reduced due to
marketing factors, MTLM shall offer to all Holders retaining the right to
include securities in the registration the right to include additional
Registrable Securities in the registration, with such shares being allocated on
a pro rata basis among the Holders of Registrable Securities.
(e) No Holder shall have any right to obtain or seek an injunction
restraining or otherwise delaying any such registration as the result of any
controversy that might arise with respect to the interpretation or
implementation of this Section 4.
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<PAGE> 4
5. Obligations of MTLM. MTLM shall
(a) prepare and file with the SEC the registration statement in
accordance with Section 2 hereof with respect to the shares of Registrable
Securities and shall use its best efforts to cause such registration
statement to become effective as provided in Section 2 and to keep such
registration statement effective until the earlier of the sale of all of the
Registrable Securities so registered or the first anniversary of the
Effective Time of the Merger;
(b) prepare and file with the SEC such amendments and supplements
to such registration statement and the prospectus used in connection therewith
as may be necessary and to comply with the provisions of the Act with respect
to the sale or other disposition of all securities proposed to be registered in
such registration statement until the earlier of the sale of all of the shares
of Registrable Securities so registered or the first anniversary of the
Effective Time of the Merger;
(c) furnish to each Holder such number of copies of any prospectus
(including any preliminary prospectus and any amended or supplemented
prospectus) in conformity with the requirements of the Act, and such other
documents, as each Holder may reasonably request in order to effect the
offering and sale of the shares of the Registrable Securities to be offered
and sold, but only while MTLM shall be required under the provisions hereof to
cause the registration statement to remain current;
(d) use its reasonable best efforts to register or qualify the
shares of the Registrable Securities covered by such registration
statement under the securities or blue sky laws of such jurisdictions as each
Holder shall reasonably request (provided that MTLM shall not be required in
connection therewith or as a condition thereto to qualify to do business or to
file a general consent to service of process in any such jurisdiction where it
has not been qualified), and do any and all other acts or things which may be
necessary or advisable to enable each Holder to consummate the public sale or
other disposition of the Registrable Securities in such jurisdictions;
(e) notify each Holder upon the happening of any event as a result of
which the prospectus included in such registration statement, as then in
effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing;
(f) so long as the registration statement remains effective, promptly
prepare, file and furnish to each Holder a reasonable number of copies of a
supplement to or an amendment of such prospectus as may be necessary so that,
as thereafter delivered to the purchasers of the Registrable Securities, such
prospectus shall not include an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make
the statements therein not misleading in the light of the circumstances then
existing;
(g) notify each Holder, promptly after it shall receive notice
thereof, of the date and time the registration statement and each
post-effective amendment thereto has become effective or a supplement to any
prospectus forming a part of such registration statement has been filed;
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<PAGE> 5
(h) each Holder promptly of any request by the SEC for the amending
or supplementing of such registration statement or prospectus or for additional
information; and
(i) advise each Holder, promptly after it shall receive notice or
obtain knowledge thereof, of the issuance of any stop order by the SEC
suspending the effectiveness of the registration statement or the initiation or
threatening of any proceeding for that purpose and promptly use its best
efforts to prevent the issuance of any stop order or to obtain its withdrawal
if such stop order should be issued.
(j) In connection with any offering of shares of Registrable
Securities registered pursuant to this Declaration, MTLM shall:
a) promptly furnish each Holder, at MTLM's expense, with
unlegended certificates representing ownership of the shares of Registrable
Securities being sold in such denominations as each Holder shall request and
b) promptly instruct the transfer agent and registrar of the
Registrable Securities to release any stop transfer orders with respect to the
shares of Registrable Securities being sold.
6. Expenses. MTLM shall pay the expenses incurred by MTLM in connection
with any registration of Registrable Securities pursuant to this Declaration
including all SEC, NASD and blue sky registration and filing fees, printing
expenses, transfer agents' and registrars' fees, and the reasonable fees and
disbursements of MTLM's outside counsel and independent accountants. The
Holders shall be responsible for all underwriting discounts, commissions and
transfer taxes, as well as any other expenses incurred by the Holder,
including the fees and disbursements of counsel to such Holder.
7. Indemnification. In the event of any offering registered pursuant to
this Declaration:
(a) MTLM will indemnify each Holder, each of its officers, directors
and partners and such Holder's legal counsel and independent accountants,
and each person controlling such Holder within the meaning of Section 15 of the
Act, with respect to which registration, qualification or compliance has been
effected pursuant to this Agreement, and each underwriter, if any, and each
person who controls any underwriter within the meaning of Section 15 of the
Act, against all expenses, claims, losses, damages and liabilities (or actions
in respect thereof), including any of the foregoing incurred in settlement of
any litigation, commenced or threatened, arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in any
registration statement, prospectus, offering circular or other document, or any
amendment or supplement thereto, incident to any such registration,
qualification or compliance, or based on any omission (or alleged omission) to
state therein a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances in which they are
made, not misleading, or any violation by MTLM of any rule or regulation
promulgated under the Act, or state securities laws, or common law, applicable
to MTLM in connection with any such registration, qualification or compliance,
and will reimburse each such Holder, each of its officers, directors and
partners and such
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<PAGE> 6
Holder's legal counsel and independent accountants, and each person controlling
such Holder, each such underwriter and each person who controls any such
underwriter, for any legal and any other expenses reasonably incurred in
connection with investigating, preparing or defending any such claim, loss,
damage, liability or action, provided that MTLM will not be liable in any such
case to the extent that any such claim, loss, damage, liability or expense
arises out of or is based in any untrue statement or omission or alleged untrue
statement or omission, made in reliance upon and in conformity with written
information furnished to MTLM by an instrument duly executed by such Holder or
underwriter and stated to be specifically for use therein.
(b) Each Holder will, if Registrable Securities held by such Holder
are included in the securities as to which such registration, qualification
or compliance is being effected, indemnify MTLM, each of its directors and
officers and its legal counsel and independent accountants, each underwriter,
if any, of MTLM's securities covered by such registration statement, each
person who controls MTLM or such underwriter within the meaning of Section 15
of the Act, and each other such Holder, each of its officers directors and each
person controlling such Holder within the meaning of Section 15 of the Act,
against all claims, losses, damages and liabilities (or actions in respect
thereof) arising out of or based on any untrue statement (or alleged untrue
statement) or a material fact contained in any such registration statement,
prospectus, offering circular or other document, or any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, but only to the
extent, that such untrue statement (or alleged untrue statement) or omission
(or alleged omission) is made in such registration statement, prospectus,
offering circular or other document in reliance upon and in conformity with
written information furnished to MTLM by an instrument duly executed by such
Holder and stated to be specifically for use therein and will reimburse MTLM,
such Holders, such directors, officers, legal counsel, independent accountants,
underwriters or control persons for any legal or any other expenses reasonably
incurred in connection with investigating or defending any such claim, loss,
damage, liability or action, but only to the extent, that such untrue statement
(or alleged untrue statement) or omission (or alleged omission) is made in such
registration statement, prospectus, offering circular or other document in
reliance upon and in conformity with written information furnished to MTLM by
an instrument duly executed by such Holder and stated to be specifically for
use therein.
(c) Each party entitled to indemnification under this Section 7
(the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified
Party has written notice of any claim as to which indemnity may be sought, and
shall permit the Indemnifying Party to assume the defense of any such claim or
any litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not be unreasonably
withheld), and the Indemnified Party may participate in such defense at such
party's expense, and provided further that the failure of any Indemnified Party
to give notice as provided herein shall not relieve the Indemnifying Party of
its obligations under this Agreement, except to the extent, but only to the
extent, that the Indemnifying Party's ability to defend against such claim or
litigation is impaired as a result of such failure to give notice. If in the
reasonable judgment of the Indemnified Party there exists or is reasonably
likely to exist a conflict of interest that would make it inappropriate for the
same counsel to represent both the Indemnified Party and
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<PAGE> 7
the Indemnifying Party, then the Indemnified Party shall be entitled to retain
its own counsel at the expense of the Indemnifying Party. No Indemnifying
Party, in the defense of any such claim or litigation, shall, except with the
consent of each Indemnified Party, consent to entry of any judgment or enter
any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party of a release
from all liability in respect to such claim or litigation.
(d) The obligations of MTLM and each Holder under this Section 7
shall survive the completion of any offering of stock in a registration
statement under this Declaration and otherwise.
8. Non-Assignent of Registration Rights. The rights to cause MTLM to
register Registrable Securities pursuant to this Declaration may not be
assigned by the Holder other than to a Holder's spouse, a grantor trust or to
his or her heirs and descendants; provided, in each case, that the transferee
agrees in writing to be subject to the terms hereof.
9. Waivers and Amendments. The rights and obligations of the parties to
this Declaration may be amended, waived or discharged (either generally or in
a particular instance, either retroactively or prospectively, and either for
a specified period of time or indefinitely) only by a written instrument
effect such amendment, waiver or discharge signed by MTLM and by the Holders
of a majority of the Registrable Securities.
10. Termination. The registration rights set forth in this Declaration
shall terminate with respect to a Holder at such time as all of the
Registrable Securities then held by such Holder can be sold by such Holder in
a 3-month period in accordance with Rule 144 under the Act.
11. Notices. All notices and other communications required or permitted
hereunder shall be in writing and shall be deemed effectively given upon
delivery to the party to be notified in person or by courier service or five
days after deposit with the United States mail, postage prepaid, addressed (a)
if to a Holder, at such Holder's address as set forth in the securities
register of MTLM, or (b) if to MTLM, at 500 N. Dearborn St., Suite 405,
Chicago, Illinois 60610.
12. Governing Law; Interpretation. This Declaration of Registration
Rights shall be construed in accordance and governed for all purposes by
the laws of the State of Delaware applicable to contracts executed and to
be wholly performed within such state.
13. Severability; Survival. If any portion of this Declaration of
Registration Rights is held by a court of competent jurisdiction to conflict
with any federal, state or local law, or to be otherwise invalid or
unenforceable, such portion of this Declaration of Registration Rights shall
be of no force or effect, and this Declaration of Registration Rights shall
otherwise remain in full force and effect and be construed as if such portion
had not been included in this Declaration of Registration Rights.
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<PAGE> 8
14. Entire Agreement. This Declaration of Registration Rights contains
the entire agreement and understanding of the parties and supersedes all prior
discussions, agreements and understandings relating to the subject matter
hereof.
15. Attorneys' Fees and Costs. In connection with any dispute or
controversy arising under or in connection with this Declaration of
Registration Rights, the prevailing party shall be entitled to reasonable
attorneys' fees and costs.
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<PAGE> 1
EXHIBIT 4.21
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "AGREEMENT") is made and entered
into as of the 29th day of April, 1998, by and between Metal Management, Inc.,
a Delaware corporation (the "COMPANY"), 138 Scrap, Inc., an Illinois
corporation, and Katrick, Inc., an Illinois corporation (collectively, the
"SELLERS").
RECITALS:
A. Pursuant to an Asset Purchase Agreement dated as of April 29, 1998
(the "PURCHASE AGREEMENT"), by and among the Sellers, the stockholders of the
Sellers (the "SHAREHOLDERS"), Cozzi Iron & Metal, Inc., an Illinois
corporation ("COZZI"), and 138 Scrap Acquisition Corp., an Illinois
corporation ("ACQUISITION"), Sellers received from the Company shares of the
Company's common stock, par value $.01 per share (the "COMMON STOCK"). All
terms which are capitalized and used without definition herein shall have the
meanings ascribed to such terms in the Purchase Agreement.
B. As a condition to the Sellers agreeing to enter into the Purchase
Agreement, the Sellers are being granted registration rights with respect to
their shares of Common Stock.
NOW THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the parties hereto agree as follows:
1. Registration.
(a) The Company hereby covenants and agrees to include for registration
the Registrable Securities issued to the Sellers pursuant to the Purchase
Agreement in the next selling stockholders registration statement filed by the
Company subsequent to the date of this Agreement with the Commission. The
Company will use its best efforts through its officers, directors, auditors,
and counsel to cause such registration statement to become effective as
promptly as practicable following the filing thereof.
(b) As used herein: (i) "COMMISSION" means the Securities and Exchange
Commission; (ii) "ELIGIBLE HOLDER" means each of the Sellers (or the
Shareholders) to the extent it (or the Shareholders) then holds any
Registrable Securities; and (iii) "REGISTRABLE SECURITIES" shall mean the
shares of Common Stock owned by the Sellers on the date hereof as set forth on
Schedule 1, which, with respect to each Seller, have not been previously sold
pursuant to a registration statement or Rule 144 promulgated under the
Securities Act of 1933, as amended (the "SECURITIES Act").
(c) Upon a registration pursuant to the provisions of this Section 1,
the Company shall use its best 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
<PAGE> 2
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 l(c) in which it is not otherwise required to qualify to do business.
(d) 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 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 nine (9) months from the date on which the
Eligible Holder is first free to sell such Registrable Securities; 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.
(e) In the event of a registration pursuant to the provisions of this
Section 1, 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.
(f) Upon a registration pursuant to the provisions of this Section
1, the Company shall furnish each Eligible Holder with an opinion of its
counsel (reasonably acceptable to the Eligible Holder) 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 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 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 the provisions of Section l(c).
(g) 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 its best
2
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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.
(h) The Company shall notify the 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. 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."
(i) 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 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.
(j) 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.
2. 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 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 a material fact
contained (A) in any registration statement, preliminary prospectus, or final
prospectus
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<PAGE> 4
(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 such Eligible Holder 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 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. The foregoing agreement to indemnify
shall be in addition to any liability the Company may otherwise have,
including liabilities arising under 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 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)) 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
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 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 it or them
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 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
4
<PAGE> 5
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 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 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 indemnity may be sought against such
Eligible Holder pursuant to this Section 2(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 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), as one entity, and the
Eligible Holder of the Registrable Securities, included in such registration in
the aggregate (including for this purpose any contribution by or on behalf of
an indemnified party), as a second entity, 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 such Eligible Holder 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 such Eligible
Holder, 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 Eligible Holder agree that it would be
unjust and inequitable if the respective obligations of the Company and the
Eligible Holder for contribution were determined by pro rata or per capita
allocation of the aggregate losses, liabilities, claims, damages, and expenses
(even if each Eligible
5
<PAGE> 6
Holder 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). In no case shall
any Eligible Holder be responsible for a portion of the contribution
obligation imposed on all Eligible Holder in excess of its pro rata share
based on the number of shares of Common Stock owned by him and included in
such registration as compared to the number of shares of Common Stock owned
by all Eligible Holder and included in such registration. 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 any Eligible Holder within the meaning
of Section 15 of the Securities Act or Section 20(a) of the Exchange Act and
each officer, director, partner, employee, agent, and counsel of Eligible
Holder or control person shall have the same rights to contribution as such
Eligible Holder 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.
3. 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.
(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 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.
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<PAGE> 7
(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.
IN WITNESS HEREOF, the parties have caused this Agreement to be executed
as of the date first written above.
METAL MANAGEMENT, INC.
By: /s/ Gerard M. Jacobs
---------------------------------
Title: Chief Executive Officer
138 SCRAP, INC.
By: /s/ Charles R. Fritz
---------------------------------
KATRICK, INC.
By: /s/ Karen C. Fritz
---------------------------------
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<PAGE> 8
SCHEDULE 1
----------
REGISTRABLE SECURITIES
----------------------
Stockholder Number of Shares of Common Stock
- ---------- --------------------------------
Katrick, Inc. -----------------------
<PAGE> 1
EXHIBIT 4.22
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. Robert Triesch, 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, Newell Acquisition Corp., a
Colorado corporation ("ACQUISITION"), Newell Recycling of Denver, Inc., a
Colorado corporation ("NEWELL DENVER"), Newell Recycling of Utah, LLC, a Utah
limited liability company ("NEWELL 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
<PAGE> 2
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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<PAGE> 3
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
3
<PAGE> 4
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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<PAGE> 5
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,
5
<PAGE> 6
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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<PAGE> 7
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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<PAGE> 8
(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, Newell 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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<PAGE> 10
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the date first written above.
METAL MANAGEMENT, INC.
By: /s/ Gerard M. Jacobs
-----------------------------
Gerard M. Jacobs
Chief Executive Officer
/s/ G. Robert Triesch, III
---------------------------------
G. Robert Triesch, III
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<PAGE> 1
EXHIBIT 4.24
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "AGREEMENT") is made and entered
into as of the 9th day of July, 1998, by and between Metal Management, Inc., a
Delaware corporation (the "COMPANY") and Nicroloy Company, a Pennsylvania
corporation (the "SHAREHOLDER").
RECITALS:
A. Pursuant to the Asset Purchase Agreement (the "PURCHASE AGREEMENT")
dated as of July 9, 1998, by and among the Company, Nicroloy Acquisition Corp.,
a Delaware corporation ("ACQUISITION"), Thomas S. Netzer and the Shareholder,
the Shareholder received from the Company 203,692 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 203,692 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:
(i) include, 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), the Registrable Securities in the first "shelf"
registration statement filed by the Company with respect to its Common
Stock with the Securities and Exchange Commission (the "COMMISSION")
pursuant to Rule 415 of the Securities Act of 1933, as amended (the
"SECURITIES ACT") after the date hereof;
(ii) in the event that no such "shelf" registration statement is
filed within 90 days of the date hereof, then as promptly as practicable,
but in any event within 90 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
<PAGE> 2
in respect of the Registrable Securities sold by the Shareholder) one
"shelf" registration statement with 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 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, subject to the following sentence. 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 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 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) 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.
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<PAGE> 3
(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. 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(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 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.
(g) 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(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.
(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. Indemnification.
(a) Subject to the conditions set forth below, the Company agrees to
indemnify and hold harmless the Shareholder, its directors, officers,
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
3
<PAGE> 4
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.
If any action is brought against the Shareholder or any of its directors,
officers, 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
4
<PAGE> 5
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 at
the Company's request, 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
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,
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<PAGE> 6
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
director, officer, 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.
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
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<PAGE> 7
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.
(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 Delaware without reference to its
conflicts of law provisions.
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<PAGE> 8
(h) Arbitration Procedure. In the event of disputes between the parties
with respect to the terms and conditions of this Agreement, such disputes shall
be resolved by and through an arbitration proceeding to be conducted under the
auspices of the American Arbitration Association ("AAA") (or any like
organization successor thereto) in Pittsburgh, Pennsylvania. Such arbitration
proceeding shall be conducted in as expedited a manner as is then permitted by
the commercial arbitration rules (formal or informal) or the AAA, and the
arbitrator or arbitrators in any such arbitration (an "Arbitration") shall be
practicing attorneys who are experts in the subject matter of the dispute.
Both the foregoing agreement of the parties to arbitrate any and all claims,
and the results, determination, finding, judgment and/or award rendered in 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 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 of any other legal remedies for breach of the
other party's contractual obligations.
Such Arbitration may be initiated by written notice from either party to
the other which shall be a compulsory and binding proceeding on each party.
The Arbitration shall be conducted before a panel of three arbitrators selected
in accordance with the rules of the AAA. Each party shall bear separately the
cost of its respective attorneys, witnesses and experts in connection with such
Arbitration. 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.
(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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<PAGE> 9
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the date first written above.
METAL MANAGEMENT, INC.
By: /s/ David A. Carpenter
----------------------------
David A. Carpenter
Vice President, Secretary and
General Counsel
NICROLOY COMPANY
By: /s/ Thomas S. Netzer
----------------------------
Thomas S. Netzer
President
9
<PAGE> 1
EXHIBIT 4.25
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "AGREEMENT") is made and entered into
as of the 7th day of July, 1998, by and between Metal Management, Inc., a
Delaware corporation (the "COMPANY"), and M. Kimerling & Sons, Inc., a Delaware
corporation ("STOCKHOLDER").
RECITALS:
A. Pursuant to the Asset Purchase Agreement dated as of July 7, 1998, by and
among the Company, Stockholder, Kimerling Acquisition Corp. and the
stockholders of Stockholder named herein (the "PURCHASE AGREEMENT Stockholder
received from the Company shares of the Company's common stock, par value $.01
per share (the "COMMON STOCK"). All terms which are capitalized and used
without definition herein shall have the meanings ascribed to such terms in the
Asset Purchase Agreement.
B. As a condition to Stockholder agreeing to enter into the Asset Purchase
Agreement, Stockholder is being granted registration rights with respect to
650,000 shares of Common Stock.
NOW THEREFORE, in consideration of the foregoing and other good and valuable
consideration, the parties hereto agree as follows:
1. (a) Piggyback Registration. If, at any time during the 360 day period
commencing on the Closing Date, the Company shall file a registration
statement on Form S-3, for transactions involving secondary offerings,
with the Securities and Exchange Commission (the "COMMISSION") while any
Registrable Securities (as hereinafter defined) are outstanding in the
name of the Stockholder, the Company shall give Stockholder, to the extent
it then holds any Registrable Securities (the "ELIGIBLE HOLDER") at least
30 days' prior written notice of the filing of such registration
statement. Unless the Eligible Holder notifies the Company in writing
within 20 days after receipt of any such notice to the contrary, the
Company shall, at the Company's sole expense (other than the fees and
disbursements of counsel for the Eligible Holder, any underwriting, fees,
brokerage fees or other selling expenses, payable in respect of the
Registrable Securities sold by any Eligible Holder), register all of the
Registrable Securities of Eligible Holder, concurrently with the
registration of such other securities, all to the extent requisite to
permit the resale of the Registrable Securities through the facilities of
all appropriate securities exchanges, if any, on which the Company's
Common Stock is being sold or on the over-the-counter market, and will use
its best efforts through its Officers directors, auditors, and counsel to
cause such registration statement to become effective as promptly as
practicable. As used herein, "REGISTRABLE SECURITIES" shall mean the
shares of Common Stock owned by Stockholder, excluding any such shares
that a Stockholder shall have previously sold pursuant to a registrations
statement or Rule 144 promulgated under the Securities Act of 1933, as
amended (the "SECURITIES ACT").
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(b) Mandatory Registration. On or before the date which is 180 days after
the Closing Date (the "FILING DEADLINE"), subject to extension as
described in Section l(i) below, the Company shall prepare and file at the
Company's sole cost and expense (other than the fees and disbursements of
counsel for the Eligible Holder, if any, payable in respect of the
Registrable Securities sold by the Eligible Holder) one registration
statement on Form S-3, for transactions involving secondary offerings. The
Company will use its best 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 90 days after the Closing Date.
(c) In the event of a registration pursuant to the provisions of this
Section 1, the Company shall use its best 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
or such 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 1 (c) in which it is not otherwise required to qualify to do
business.
(d) 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 Eligible Holder to complete the
offer and sale of the Registrable Securities covered thereby. The Company
shall not be required to keep any such registration or qualification in
effect with respect to any Registrable Securities that have been sold by
the Eligible Holder or that otherwise qualify for resale by the Eligible
Holder in accordance with Rule 144(k); provided, however, in no event
shall the Company be required to keep any such registration or
qualification in effect after July 7, 2001.
(e) In the event of a registration pursuant to the provisions of this
Section 1, the Company shall furnish to the 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 the Eligible Holder may reasonably request to facilitate the
disposition of the Registrable Securities included in such registration.
(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 its best 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.
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(g) The Company shall notify the Eligible Holder of the Registrable
Securities promptly when such registration statement has become effective
or a supplement to any prospectus forming a part of such registration
statement has been filed. The Company shall notify the Eligible Holder of
the Registrable Securities 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.
(h) The Company shall notify the Eligible Holder of the Registrable
Securities promptly (i) when such registration statement has become
effective or a supplement to any prospectus forming a part of such
registration statement has been filed, and (ii) 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 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.
(i) The Filing Deadline shall be extended by the number of days during (i)
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, and (ii) any period (a "STANDSTILL
PERIOD") in which the Board of Directors of the Company determines in good
faith (A) that an amendment or supplement to the registration statement or
prospectus contained therein is necessary in order to correct a material
misstatement made therein or to include information the absence of which
would render the registration statement or such prospectus materially
misleading and (B) that the disclosure of such information at such time
would be detrimental to the business or prospects of the Company.
(j) In connection with the registration of Registrable Securities pursuant
to a registration statement, the 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.
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(k) Company shall use its best efforts to have the Registrable Securities
included for quotation on The Nasdaq National Market.
2. Indemnification. (a) Subject to the conditions set forth below, the Company
agrees to indemnify and hold harmless the 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 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 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 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 such Eligible Holder 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 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 The foregoing agreement to indemnify shall
be in addition to any liability the Company may otherwise have, including
liabilities arising under this Agreement.
If any action is brought against the 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 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)) 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
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 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
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promptly employed counsel reasonably satisfactory to such indemnified party or
parties, or such indemnified party or panics shall have reasonably concluded
that there may be one or more legal defenses available to it or them 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 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 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 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 indemnity may be
sought against such Eligible Holder pursuant to this Section 2(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 2(a)
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(c) To provide for just and equitable contribution, (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 through 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),
as one entity, and the Eligible Holder of the Registrable Securities,
included in such registration in the aggregate (including for this purpose
any contribution by or on behalf of an indemnified party), as a second
entity, 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 such Eligible Holder 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 such
Eligible Holder, 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 Eligible Holder
agree that it would be unjust and inequitable if the respective
obligations of the Company and the Eligible Holder for contribution were
determined by pro rata or per capita allocation of the a aggregate losses,
liabilities, claims, damages, and expenses (even if each Eligible Holder
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). In no case
shall any Eligible Holder be responsible for a portion of the contribution
obligation imposed on all Eligible Holder in excess of its pro rata share
based on the number of shares of Common Stock owned by him and included in
such registration as compared to the number of shares of Common Stock
owned by all Eligible Holder and included in such registration. 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 any
Eligible Holder within the meaning of Section 15 of the Securities Act or
Section 20(a) of the Exchange Act and each officer, director, partner,
employee, agent. and counsel of Eligible Holder or control person shall
have the same rights to contribution as such Eligible Holder 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 an,
claim or action effected without its written consent. This
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Section 2(c) is intended to supersede any right to contribution under the
Securities Act, the Exchange Act or otherwise.
3. Miscellaneous.
(a) Remedies. In the event of a breach by the Company of its obligations
under this Agreement, Stockholder, 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.
(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 Delaware 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
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to herein, concerning the registration rights granted by the Company
pursuant to this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of
the date first written above.
METAL MANAGEMENT, INC.
By: /s/ Daniel B. Burgess
-------------------------------
Daniel B. Burgess
Executive Vice President
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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 Cozzi 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
<PAGE> 2
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/ Gerard M. Jacobs
-----------------------------------------
Gerard M. Jacobs
Chief Executive Officer
MIDWEST METALLICS, L.P.
By: S. D. Metals, Inc., its general partner
By: /s/ Michael Tang
-------------------------------------
Title: President
8
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EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Amendment No. 1 to the Registration Statement on
Form S-3 (No. 333-58635) of the following: our report dated May 28, 1998,
appearing on page F-1 of Metal Management, Inc.'s Annual Report on Form 10-K
for the year ended March 31, 1998; our report dated May 28, 1998, relating to
the supplementary financial statements of Metal Management, Inc., appearing in
Metal Management, Inc.'s Current Report on Form 8-K dated July 1, 1998 (filed
July 2, 1998); our report dated August 12, 1997, except as to Note 7, which is
as of March 9, 1998, relating to the financial statements of Aerospace Metals,
Inc., appearing in Metal Management, Inc.'s Current Report on Form 8-K dated
May 1, 1998 and our report dated June 23, 1998, relating to the Naporano Iron &
Metal Co. and Nimco Shredding Co. financial statements appearing in Metal
Management, Inc.'s Current Report on Form 8-K/A dated July 1, 1998 (filed July
10, 1998). We also consent to the reference to us under the heading "Experts"
in such Prospectus.
PricewaterhouseCoopers LLP
Chicago, Illinois
July 30, 1998
<PAGE> 1
EXHIBIT 23.3
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Amendment No. 1 to the
Registration Statement No. 333-58635 of Metal Management, Inc. on Form S-3 of
our report on the Cozzi Iron & Metal, Inc. financial statements dated April 22,
1997, appearing in the Proxy Statement of Metal Management, Inc. dated November
20, 1997. We also consent to the reference to us under the heading "Experts"
in such Prospectus.
Deloitte & Touche LLP
Chicago, Illinois
July 30, 1998
