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Exhibit 10.7
REGISTRATION RIGHTS AGREEMENT
AGREEMENT made and entered into this 14th day of April, 1997 (this
"Agreement"), among METALLURG, INC., a corporation organized and existing under
the laws of the State of Delaware (the "Company"), and the shareholders named on
the signature pages hereto (the "Stockholders").
W I T N E S S E T H :
WHEREAS, pursuant to the terms of the Fourth Amended and Restated
Joint Plan of Reorganization of the Company and Shieldalloy Metallurgical
Corporation, dated December 18, 1996, as amended, supplemented or modified from
time to time (the "Plan"), the Company has agreed to issue shares (the "Shares")
of common stock, par value $.01 per share (the "Common Stock"), of the Company
to the Stockholders; and
WHEREAS, pursuant to the Plan, each Stockholder will receive the
number of Shares set opposite such Stockholder's name on Annex I hereto; and
WHEREAS, the Shares will be issued to the Stockholders pursuant to
the Plan without registration under the Securities Act of 1933, as amended (the
"Securities Act"), and the Company and the Stockholders desire to provide for
the registration under the Securities Act of the resale by the Stockholders of
Registrable Securities (as hereinafter defined), upon the terms and subject to
the conditions set forth below;
WHEREAS, it is intended by the Company and the Stockholders that
this Agreement shall become effective immediately upon the issuance to the
Stockholders of the Shares pursuant to the Plan; and
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, and of other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, each of the Company
and the Stockholders, intending to be legally bound, hereby agrees as follows:
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1. DEFINITIONS. Capitalized terms used but not defined in this Agreement
shall have the respective meanings ascribed to such terms in the Plan.
2. RESTRICTIONS ON TRANSFER.
(a) Legend. Each certificate representing the Registrable Securities
shall have endorsed thereon a legend in substantially the following form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAW, AND
MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF IN THE ABSENCE OF
SUCH REGISTRATION UNLESS PURSUANT TO AN AVAILABLE EXEMPTION THEREFROM. IN
ALL CASES, SUCH SHARES MAY BE TRANSFERRED ONLY IN COMPLIANCE WITH THE
CONDITIONS SPECIFIED IN THE REGISTRATION RIGHTS AGREEMENT DATED , 1997,
AMONG THE COMPANY AND THE STOCKHOLDERS PARTY THERETO, A COPY OF WHICH IS
AVAILABLE FOR INSPECTION AT THE PRINCIPAL EXECUTIVE OFFICES OF THE COMPANY
AND WILL BE FURNISHED TO THE HOLDER HEREOF WITHOUT CHARGE, UPON WRITTEN
REQUEST TO METALLURG, INC., ▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ATTENTION: GENERAL COUNSEL."
(b) Additional Restrictions. No holder of Registrable Securities
shall transfer, and the Company and/or the registrar and transfer agent for such
Shares will not be required to accept for registration of transfer, any Shares
other than pursuant to Section 3 hereof, except upon presentation of evidence
reasonably satisfactory to the Company and the transfer agent that the transfer
is in compliance with the Securities Act and any applicable state securities or
"blue sky" law, which evidence may include an opinion of counsel and
representations of the transferee to the effect that (i) the Shares are being
acquired for such holder's own account for investment purposes only and not with
a view to any resale in violation of the Securities Act or any state securities
or "blue sky" law; (ii) to the knowledge of such holder, the Shares have not
been registered under the Securities Act or any state securities or "blue sky"
law and (iii) such
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holder will not offer for sale, sell or otherwise transfer any of the Shares (or
any interest therein) except upon the terms and subject to the conditions
specified herein, and otherwise not in violation of the Securities Act or any
state securities or "blue sky" laws, and provided, that such holder, prior to
effecting any transfer of Shares permitted hereunder, will cause the intended
transferee of the Shares to agree to take and hold such Shares subject to the
terms and conditions of this Agreement (and, in that connection, to execute and
deliver to the Company such agreements and instruments as the Company reasonably
may request to evidence the same), and further acknowledges that the
certificates evidencing such Shares are required to have endorsed thereon a
legend to the effect set forth in Subsection 2(a) hereof.
3. REGISTRATION RIGHTS.
(a) Registration Upon Request. (i) At any time, and from time to
time, commencing with the earlier to occur of (i) the first anniversary of the
Effective Date and (ii) the consummation of an initial public offering of the
Company ("IPO") and ending on the earlier to occur of (i) the first date there
are no Qualified Holders (as hereinafter defined) and (ii) the fifth anniversary
of the Effective Date (the "Effective Period"), upon the written request of one
or more Qualified Holders that the Company effect the registration under the
Securities Act of Registrable Securities, which, in the aggregate, constitute at
least 20% of the outstanding Common Stock on the date of such request for
registration hereunder, the Company shall use its best efforts to register under
the Securities Act (a "Demand Registration"), as expeditiously as may be
practicable, the Registrable Securities which the Company has been requested to
register, all to the extent required to permit the disposition of such
Registrable Securities in accordance with the methods intended by the sellers
thereof; provided, that no Qualified Holder(s) shall be permitted to exercise a
Demand Registration within 120 days after the effective date of any registration
statement for equity securities of the Company (other than on Form S-4 or Form
S-8 or any successor or similar form) or such longer time as is specified in
paragraph (i) of Subsection 3(b) hereof.
(ii) The Company shall not be required to comply with any
Demand Registration if less than 1,000,000 Shares which are Registrable
Securities are proposed to be registered and the Company shall not in any event
be required to effect more than two Demand Registrations pursuant to this
Subsection 3(a) during the Effective Period. An exercise of a Demand
Registration right will not count as the use of such right unless the
registration statement to which it relates is declared effective under the
Securities Act and remains effective
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for a period (not less than 30 days) sufficient to allow for the orderly sale of
the Registrable Securities covered thereby, except that such exercise shall
count if such registration statement is withdrawn because (A) the Majority
Qualified Holder(s), for any reason whatsoever, determine not to proceed with
such registration and (B) the Qualified Holder(s) do not reimburse the Company
for any expenses paid by the Company that are not Registration Expenses (as
hereinafter defined) incurred in connection with the preparation and filing of
such registration statement.
(iii) As used in this Agreement, the term "Registrable
Securities" means any and all (A) Shares received by the Qualified Holders
pursuant to the Plan and (B) any other securities issued or issuable with
respect to any shares of Common Stock described in clause (A) above by way of a
stock dividend or stock split or in connection with a combination, exchange,
reorganization, recapitalization or reclassification of the Company's securities
or pursuant to a merger, consolidation or other similar business combination
transaction involving the Company. Reference in this Subsection 3(a) to
specified numbers of shares shall be equitably adjusted to reflect any
occurrence referred to in the preceding sentence.
(iv) As to any particular Registrable Securities, such
securities shall cease to constitute Registrable Securities when (A) a
registration statement with respect to the sale of such securities shall have
been declared effective under the Securities Act and such securities shall have
been disposed of in accordance with the methods contemplated by the registration
statement, (B) such securities shall have been sold in satisfaction of all
applicable conditions to the resale provisions of Rule 144 under the Securities
Act (or any successor provision thereto), (C) such securities shall have been
transferred, new certificates evidencing such securities without legends
restricting further transfer shall have been delivered by the Company, and
subsequent public distribution of such securities shall neither require
registration under the Securities Act nor qualification (or any similar filing)
under any state securities or "blue sky" law then in effect, or (D) such
securities shall have ceased to be issued and outstanding.
(v) The term "Qualified Holder" means any Stockholder or any
Affiliate (as such term is defined in Rule 144 under the Securities Act) of a
Stockholder owning at least 5% of the issued and outstanding Shares of the
Company on the Effective Date. The term "Majority Qualified Holder" means those
Qualified Holders holding a majority in interest of the Registrable Securities
included in a registration statement pursuant hereto.
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(vi) The Company may defer the filing or effectiveness of any
registration statement with respect to any Demand Registration requested
pursuant to this Subsection 3(a) for a reasonable period of time not to exceed
120 days after such request if (A) the Company is, at such time, working on an
underwritten public offering of Common Stock ("Primary Common Stock Offering")
and is advised in writing by its managing underwriter(s) that such offering
would in its or their opinion be adversely affected by such filing or (B) the
Board of Directors of the Company determines, in its good faith and reasonable
judgment, that any such filing or the offering of any Registrable Securities
would materially impede, delay or interfere with any material proposed
financing, offer or sale of securities, acquisition, corporate reorganization or
other significant transaction involving the Company; provided, with respect to
clause (B), the Company gives the Qualified Holders written notice of such
determination. The Effective Period shall be extended by a period which is not
less than the aggregate number of days included in the periods during which the
Company deferred the filing or effectiveness of a registration statement as
provided above (each, a "Suspension Period"). A Suspension Period shall commence
on and include the date on which the Company provides such written notice and
shall end on the date when the affected registration statement is filed or
declared effective.
(vii) In the case of a Demand Registration pursuant to this
Subsection 3(a), if the holders of securities initially requesting such Demand
Registration have determined to enter into one or more underwriting agreements
in connection therewith, all shares constituting Registrable Securities to be
included in such Demand Registration shall be subject to such underwriting
agreements and no person may participate in such Demand Registration unless such
person agrees to sell his or its securities on the basis provided in the
underwriting arrangements and completes all questionnaires, powers of attorney,
indemnities, underwriting agreements, "lock up" letters and other documents
which are reasonable and customary under the circumstances.
(b) Piggyback Registration.
(i) If at any time the Company proposes to register shares of
the Company's Common Stock under the Securities Act for its own account (other
than a registration on Form S-4 or Form S-8, or any successor or similar forms),
in a manner that would permit registration of Registrable Securities for sale to
the public under the Securities Act, it will promptly give written notice to all
Qualified Holders of (A) its intention to do so, (B) the
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registration form of the Securities and Exchange Commission (the "Commission")
that has been selected by the Company and (C) rights of Qualified Holders under
this Subsection 3(b) (the "Subsection 3(b) Notice"). The Company will use
reasonable commercial efforts to include in the proposed registration all
Registrable Securities that the Company is requested in writing, within 15 days
after the Subsection 3(b) Notice is given, to register by the Qualified Holders
thereof; provided, that (A) if, at any time after giving written notice of its
intention to register shares of the Company's Common Stock and prior to the
effective date of the registration statement filed in connection with such
registration, the Company shall determine for any reason not to register such
equity securities, the Company may, at its election, give written notice of such
determination to all Qualified Holders and, thereupon, shall be relieved of its
obligation to register any Registrable Securities in connection with such
abandoned registration, without prejudice, however, to the rights of Qualified
Holders under Subsection 3(a) hereof and (B) in case of a determination by the
Company to delay registration of the Company's Common Stock, the Company shall
be permitted to delay the registration of such Registrable Securities for the
same period as the delay in registering such Common Stock for the Company's own
account. No registration effected under this Subsection 3(b) shall relieve the
Company of its obligations to effect a Demand Registration under Subsection 3(a)
hereof and, notwithstanding anything to the contrary in Subsection 3(a) hereof,
no Qualified Holder shall have the right to require the Company to register any
Registrable Securities pursuant to Subsection 3(a) hereof until the later of (A)
the completion of the distribution of the securities offered and registered
pursuant to the Subsection 3(b) Notice and (B) 120 days after the date each
registration statement effected under this Subsection 3(b) is declared
effective.
(ii) If the Managing Underwriter (as such term is defined in
Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) for a registration pursuant to this Subsection 3(b) that involves an
underwritten offering shall advise the Company (the Company hereby agreeing to
request that such advice be written) that, in its opinion, the inclusion of the
amount and kind of Registrable Securities to be sold for the account of
Qualified Holders would materially adversely affect the price per unit the
Company will derive from the offering or otherwise materially and adversely
affect the success of the offering for the Company, then the number and kind of
Registrable Securities to be sold for the account of such Qualified Holders
shall be reduced (and may be reduced to zero) in accordance with the Managing
Underwriter's recommendation to the minimum extent necessary to eliminate such
adverse effect. If the number of Registrable Securities to be included in any
registration is reduced (but not to zero), the number of such Registrable
Securities included in such registration
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shall be allocated pro rata among all requesting Qualified Holders and any other
shareholders of the Company who may hold registration rights ("Other Holders")
with respect to shares of the Company's Common Stock ("Other Shares"), on the
basis of the relative number of shares of such Registrable Securities or Other
Shares each such Qualified Holder or Other Holder has requested to be included
in such registration. If, as a result of the proration provisions of this
Subsection 3(b), any Qualified Holder shall not be entitled to include all
Registrable Securities in a registration pursuant to this Subsection 3(b) that
such Qualified Holder has requested be included, such Qualified Holder may elect
to withdraw its Registrable Securities from the registration; provided, that
such withdrawal election shall be irrevocable and, after making a withdrawal
election, a Qualified Holder shall no longer have any right to include
Registrable Securities in the registration as to which such withdrawal election
was made.
(iii) Notwithstanding anything in this Subsection 3(b) to the
contrary, Qualified Holders shall not have any right to include their
Registrable Securities in any distribution or registration of the Company's
Common Stock in connection with a merger, consolidation, acquisition, exchange
offer (or other offering of securities solely to the Company's existing
stockholders), recapitalization, other reorganization, dividend reinvestment
plan, stock option plan or other employee benefit plan.
(c) Registration Procedures. If and whenever the Company is required
by the provisions of this Agreement to effect or cause the registration of any
Registrable Securities under the Securities Act as provided in this Agreement,
the Company shall, as expeditiously as practicable:
(i) prepare and file with the Commission, a registration
statement on a form which is available for the sale of Registrable Securities by
the holders thereof in accordance with the intended methods of distribution
thereof (including such audited financial statements as the Board of Directors
of the Company may, in good faith, deem appropriate) and reasonably acceptable
to the holders of Registrable Securities participating therein, and use
reasonable commercial efforts to cause such registration statement to become and
remain effective under the Securities Act for not less than a period of 30 days
(unless the Registrable Securities registered thereunder have been sold or
disposed of prior to the expiration of such 30-day period); provided, that (A)
with respect to any request for registration pursuant to Subsection 3(a) hereof
made within the period commencing 60 days next preceding the end of the
Company's fiscal year and ending 90 days after the end of the Company's fiscal
year, if the
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Company is not a reporting company subject to Section 13 or 15(d) of the
Exchange Act, the Company shall be entitled to delay such registration until ten
days after the Company receives audited financial statements for such fiscal
year and (B) in no event shall the Company be required in connection with any
request for registration pursuant to Subsection 3(a) hereof to cause to be
prepared or to release, other than in the ordinary course of business consistent
with past practice, audited financial statements of the Company;
(ii) prepare and file with the Commission such amendments,
post-effective amendments and supplements to such registration statement and the
prospectus used in connection therewith as may be necessary to keep such
registration statement effective for such period of time as is necessary to
complete the offering and the distribution of the securities covered thereby
(but, in no event, longer than 30 days after such registration statement becomes
effective) in each case exclusive of any period during which the prospectus used
in connection with such registration statement shall not comply with the
requirements of Section 10 of the Securities Act, and to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement during said 30-day period;
(iii) furnish to each seller of Registrable Securities and
each underwriter of the securities being sold by such seller, such number of
copies (including manually executed and conformed copies) of such registration
statement and of each such amendment thereof and supplement thereto (including
all annexes, appendices, schedules and exhibits), the prospectus used in
connection with such registration statement (including each preliminary
prospectus and any summary prospectus and the final prospectus filed pursuant to
Rule 424(b) under the Securities Act), and other documents, as such seller and
underwriter may reasonably request in order to facilitate the disposition of
Registrable Securities in accordance with the methods intended by the sellers
thereof;
(iv) use reasonable commercial efforts to register or qualify
the Registrable Securities covered by such registration statement under the
securities or "blue sky" laws of such jurisdictions as any seller and each
underwriter of the Registrable Securities shall reasonably request, and do any
and all other acts and things which may be necessary or desirable to enable such
seller and underwriter to consummate the offering and disposition of Registrable
Securities in such jurisdictions; provided, that the Company shall not, by
virtue of this Agreement, be required to qualify generally to do business as a
foreign corporation, subject itself
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to taxation or consent to general service of process in any jurisdiction wherein
it would not, but for the requirements of this Subsection 3(c), be obligated to
be qualified;
(v) use reasonable commercial efforts to cause the Registrable
Securities covered by such registration statement to be registered with, or
approved by, such other public, governmental or regulatory authorities as may be
necessary to facilitate the disposition of such Registrable Securities in
accordance with the methods of disposition intended by the sellers thereof;
(vi) notify each seller of any Registrable Securities covered
by such registration statement and the Managing Underwriter, if any, promptly
and, if requested by any such person, confirm such notification in writing, (A)
when a prospectus or any prospectus supplement has been filed with the
Commission and, with respect to a registration statement or any post-effective
amendment thereto, when the same has been declared effective by the Commission,
(B) of any request by the Commission for an amendment or supplement to a
registration statement or related prospectus or for additional information, (C)
of the issuance by the Commission of any stop order or the initiation of any
proceedings for such or a similar purpose (and the Company shall make every
reasonable effort to obtain the withdrawal of any such order at the earliest
practicable moment), (D) of the receipt by the Company of any notification with
respect to the suspension of the qualification of any of the Registrable
Securities for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose (and the Company shall make every reasonable effort
to obtain the withdrawal of any such suspension at the earliest practicable
moment), (E) of the occurrence of any event which requires the making of any
change to a registration statement or related prospectus so that such documents
will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading (and the Company shall promptly prepare and furnish to such seller
and Managing Underwriter a reasonable number of copies of a supplemented or
amended prospectus such that, as thereafter delivered to the purchasers of such
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, in light of the circumstances under
which they are made, not misleading), and (F) of the Company's determination
that the filing of a post-effective amendment to the Registration Statement
shall be necessary or appropriate; provided, that, in the event the Company
shall provide any notice pursuant to clause (E), the 30-day period referred to
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paragraphs 3(c)(i) and 3(c)(ii) shall be extended by the number of days from and
including the date such notice is provided, to and including the date when each
seller of any Registrable Securities covered by such registration statement
shall have received copies of the corrected prospectus contemplated by clause
(E) of this paragraph (vi), plus an additional seven days;
(vii) otherwise use reasonable commercial efforts to comply
with all applicable rules and regulations of the Commission, as the same may
hereafter be amended, and make available to its security holders, as soon as
reasonably practicable, an earning statement covering the period of twelve
months beginning with the first day of the Company's first fiscal quarter next
succeeding the effective date of the registration statement, which earning
statement shall satisfy the provisions of Section 11(a) of the Securities Act;
(viii) engage and provide a transfer agent for all Registrable
Securities covered by such registration statement not later than the effective
date of such registration statement;
(ix) in the case of a Demand Registration effected pursuant to
Section 3(a) hereof and at the request of the Majority Qualified Holders, enter
into one or more underwriting agreements (in customary form and substance and
including customary representations and warranties of the Company, indemnities
and contribution) and take all such other actions as the holders shall
reasonably request in order to expedite or facilitate the disposition of such
Registrable Securities in accordance with the methods of disposition intended by
the sellers thereof, including to use reasonable efforts to obtain an opinion
from counsel to the Company, and a "cold comfort" letter from an independent
certified public accounting firm of national recognition and standing who have
certified the Company's financial statements included in the registration
statement or any amendment thereto, in each case in form and substance
reasonably satisfactory to the Managing Underwriter(s), and covering such
matters of the type customarily covered by such opinions and "cold comfort"
letters as the Managing Underwriter(s) shall reasonably request; it being hereby
acknowledged and agreed that the selection of any Managing Underwriter(s) shall
be made by the Majority Qualified Holders with the consent of the Company and
the Company shall be entitled to withhold consent in its sole discretion to any
Managing Underwriter(s); and
(x) permit any holder of Registrable Securities, which holder,
in its reasonable judgment, might be deemed to be a "control person" of the
Company (within the
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meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act),
to participate in the preparation of such registration statement and include
therein material, furnished to the Company in writing which, in the reasonable
judgment of such holder and its counsel, is required to be included therein.
(d) Agreement of Holders. Each holder of Registrable Securities
agrees that such holder will, as expeditiously as possible, notify the Company
at any time when a prospectus relating to a registration statement covering such
seller's Registrable Securities is required to be delivered under the Securities
Act, of the happening of any event of the kind described in paragraph 3(c)(vi)
hereof as a result of any information provided by such seller for inclusion in
such prospectus included in such registration statement and, at the request of
the Company, promptly prepare and furnish to it such information as may be
necessary so that, after incorporation into a supplement or amendment of such
prospectus as thereafter delivered to the purchasers of such securities, the
information provided by such seller 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 made therein, in the light of the circumstances
under which they were made, not misleading. Each holder of Registrable
Securities shall be deemed to have agreed by acquisition of such Registrable
Securities that upon the receipt of any notice from the Company of the
occurrence of any event of the kind described in clause (E) of paragraph
3(c)(vi) hereof, such holder shall forthwith discontinue such holder's offer and
disposition of Registrable Securities pursuant to the registration statement
covering such Registrable Securities until such holder shall have received
copies of a supplemented or amended prospectus which is no longer defective as
contemplated by clause (E) of paragraph 3(c)(vi) hereof and, if so directed by
the Company, shall deliver to the Company, at the Company's expense, all copies
(other than permanent file copies) of the defective prospectus covering such
Registrable Securities which are then in such holder's possession.
(e) Registration Expenses. Except as otherwise provided in this
Subsection 3(e), whether or not any registration statement prepared and filed
pursuant to this Section 3 is declared effective by the Commission (except where
a Demand Registration is terminated, withdrawn or abandoned at the written
request of the Majority Qualified Holders), the Company shall pay all expenses
incident to the Company's performance of or compliance with the registration
requirements of this Agreement, including, without limitation, the following:
(A) all Commission and any registration and filing fees and expenses; (B) any
and all expenses incident to its performance of, or compliance with, this
Agreement, including, without limitation, any
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allocation of salaries and expenses of the Company's personnel or other general
overhead expenses of the Company, or other expenses for the preparation of
historical and pro forma financial statements or other data normally prepared by
the Company in the ordinary course of its business; (C) all listing, transfer
and/or exchange agent and registrar fees; (D) fees and expenses in connection
with the qualification of the Registrable Securities under securities or "blue
sky" laws including reasonable fees and disbursements of counsel for the
underwriters in connection therewith; (E) printing expenses; (F) messenger and
delivery expenses; and (G) fees and out-of-pocket expenses of counsel for the
Company and its independent certified public accountants (including the expenses
of any audit, review and/or "cold comfort" letters) and other persons, including
special experts, retained by the Company (collectively, clause (A) through (G),
"Registration Expenses"); provided, that the Company shall not be required to
pay, and the Qualified Holders shall pay, all fees and out-of-pocket expenses of
counsel selected by the Qualified Holders, any fees or disbursements of Managing
Underwriters and their counsel, participating underwriters and brokers-dealers
or any discounts, commissions or fees of underwriters, selling brokers and
dealers relating to the distribution of the Registrable Securities.
(f) Indemnification; Contribution.
(i) The Company hereby agrees to indemnify and hold harmless
to the fullest extent permitted by law each holder of Registrable Securities
registered pursuant to Subsection 3(a) or Subsection 3(b) hereof (a
"Participating Holder"), its officers, directors, employees and agents if any,
and each person, if any, who controls such holder within the meaning of Section
15 of the Securities Act and Section 20 of the Exchange Act, against all losses,
claims, damages, liabilities and expenses (under the Securities Act, common law
and otherwise) (collectively, "Claims"), joint or several, which arise out of or
are based upon (A) any untrue statement or alleged untrue statement of a
material fact contained in any registration statement, amendment or supplement
thereto or document incorporated by reference or in any filing made in
connection with the registration or qualification of the offering under "blue
sky" or other securities laws of jurisdictions in which the Participating
Holder's Registrable Securities are offered (collectively, "Security Filings"),
or 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 under which they were made, not misleading, and (B) any untrue
statement or alleged untrue statement of a material fact contained in (1) any
preliminary prospectus, if used prior to the effective date of such registration
statement (unless such statement is corrected in the final prospectus and the
Company has previously furnished
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copies thereof to any Participating Holder seeking such indemnification and to
the underwriters of the registration in question and the Participating Holder
and/or the underwriters shall have failed to deliver such final prospectus to
the purchaser of securities) or (2) the final prospectus (as amended or
supplemented if the Company shall have filed with the Commission any amendment
thereof or supplement thereto) if used within the period during which the
Company is required to keep the registration statement to which such prospectus
relates current, or the omission or alleged omission in the case of (1) or (2)
to state therein a material fact necessary in order to make the statements
therein in light of the circumstances under which they were made, not
misleading; and the Company shall, and it hereby agrees to, reimburse such
holders for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such Claim; provided, that such
indemnification shall not extend to any Claims which are caused by any untrue
statement or alleged untrue statement contained in, or by any omission or
alleged omission from, information furnished in writing to the Company by such
Participating Holder specifically for use in any such Security Filing.
(ii) Each Participating Holder shall furnish to the Company in
writing such information regarding such holder and the intended method of
distribution as shall be reasonably requested by the Company and as required by
law or the Commission for use in any Security Filing (and the Company may
exclude from registration the Registrable Securities of any such Participating
Holder if such holder fails to furnish such information within a reasonable time
after receiving such request) and hereby indemnifies severally and not jointly,
to the fullest extent permitted by law, the Company, its officers, directors,
employees and agents and each person, if any, who controls the Company within
the meaning of Section 15 of the Securities Act and Section 20 of the Exchange
Act, against any Claims resulting from any untrue statement or alleged untrue
statement of a material fact or any omission or alleged omission of a material
fact required to be stated or necessary to make the statements in the
registration statement or prospectus, or any amendment thereof or supplement
thereto, not misleading; provided, that each such holder shall be liable
hereunder if and only to the extent that any such Claim arises out of or is
based upon an untrue statement, or alleged untrue statement or omission or
alleged omission, made in reliance upon and in conformity with information
pertaining to such holder, which is requested by the Company and furnished in
writing to the Company by such holder specifically for use in any such Security
Filing.
(iii) Any person seeking indemnification under the provisions
of this Subsection 3(f) shall, promptly after receipt by such person of notice
of the commencement of
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any action, suit, claim or proceeding, notify each party against whom
indemnification is to be sought in writing of the commencement thereof;
provided, that the failure so to notify an indemnifying party shall not relieve
the indemnifying party from any liability which it may have under this
Subsection 3(f) (except to the extent that it has been prejudiced in any
material respect by such failure) or from any liability which the indemnifying
party may otherwise have. In case any such action, suit, claim or proceeding is
brought against any indemnified party, and it notifies an indemnifying party of
the commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent it may elect by written notice delivered
to the indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party. Notwithstanding the foregoing, the
indemnified party shall have the right to employ its own counsel in any such
case but the fees and expenses of such counsel shall be at the expense of such
indemnified party unless (A) the employment of such counsel shall have been
authorized in writing by the indemnifying party in connection with the defense
of such suit, action, claim or proceeding, (B) the indemnifying party shall not
have employed counsel (reasonably satisfactory to the indemnified party) to take
charge of the defense of such action, suit, claim or proceeding within a
reasonable time after notice of commencement of the action, suit, claim or
proceeding, or (C) such indemnified party shall have reasonably concluded that
there may be defenses available to it which are different from or additional to
those available to the indemnifying party which, if the indemnifying party and
the indemnified party were to be represented by the same counsel, could result
in a conflict of interest for such counsel or materially prejudice the
prosecution of the defenses available to such indemnified party. If any of the
events specified in clause (B) or (C) of the preceding sentence shall have
occurred or shall otherwise be applicable, then the fees and expenses of one
counsel or firm of counsel selected by a majority in interest (based on the
number of shares included in such offering) of the indemnified parties shall be
borne by the indemnifying party. If, in any case, the indemnified party employs
separate counsel, the indemnifying party shall not have the right to direct the
defense of such action, suit, claim or proceeding on behalf of the indemnified
party. Anything in this paragraph to the contrary notwithstanding, an
indemnifying party shall not be liable for the settlement of any action, suit,
claim or proceeding effected without its prior written consent (which consent in
the case of an action, suit, claim or proceeding exclusively seeking monetary
relief shall not be unreasonably withheld). Such indemnification shall remain in
full force and effect irrespective of any investigation made by or on behalf of
an indemnified party.
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(iv) If the indemnification from the indemnifying party as
provided in this Subsection 3(f) is unavailable or is otherwise insufficient to
hold harmless an indemnified party in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then the indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or expenses in such proportion as
is appropriate to reflect the relative benefits received by and the relative
fault of the indemnifying party and indemnified parties in connection with the
actions which resulted in such losses, claims, damages, liabilities or expenses.
The relative fault of such indemnifying party shall be determined by reference
to, among other things, whether any action in question, including any untrue (or
alleged untrue) statement of a material fact or omission (or alleged omission)
to state a material fact, has been made, or relates to information supplied by
such indemnifying party or such indemnified party, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such action. The amount paid or payable by a party as a result of the losses,
claims, damages, liabilities and expenses referred to above shall be deemed to
include, subject to the limitations set forth in Subsection 3(f)(iii) hereof,
any legal or other fees or expenses reasonably incurred by such party in
connection with any such investigation or proceeding.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Subsection 3(f) were determined by pro rata
allocation or by any other method of allocation other than as described above.
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.
If, however, indemnification is available under this Subsection
3(f), the indemnifying parties shall indemnify each indemnified party to the
fullest extent provided in paragraphs 3(f)(i) through 3(f)(iii) hereof without
regard to the relative fault of said indemnifying party or indemnified party or
any other equitable consideration.
4. RULE 144.
From and after the date the Company has a class of securities
registered under Section 12 of the Exchange Act, the Company shall comply with
the requirements of Rule 144(c) under the Securities Act, as such Rule may be
amended from time to time (or any similar rule or regulation hereafter adopted
by the Commission), regarding the availability of current public
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information to the extent required to enable any Qualified Holder to sell
Registrable Securities without registration under the Securities Act pursuant to
Rule 144 (or any similar rule or regulation).
5. NOTICES.
Except as otherwise provided below, whenever it is provided in this
Agreement that any notice, demand, request, consent, approval, declaration or
other communication shall or may be given to or served upon any of the parties
hereto, or whenever any of the parties hereto, desires to provide to or serve
upon any person any other communication with respect to this Agreement, each
such notice, demand, request, consent, approval, declaration or other
communication shall be in writing and either shall be delivered in person with
receipt acknowledged or sent by registered or certified mail (return receipt
requested, postage prepaid), by overnight or express mail, courier, or delivery
service, or telecopy with transmission confirmed and addressed as follows:
(a) If to the Company:
Metallurg, Inc.
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
- With a copy to -
Weil, Gotshal & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
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(b) If to the Stockholders:
At their respective addresses set forth
on Annex I hereto.
- With a copy to -
Stroock & Stroock & ▇▇▇▇▇
▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.
or at such other address as may be substituted by notice delivered as provided
herein. The furnishing of any notice required hereunder may be waived in writing
by the party entitled to receive such notice. Every notice, demand, request,
consent, approval, declaration or other communication hereunder shall be deemed
to have been duly furnished or served on (i) the date on which personally
delivered, with receipt acknowledged, (ii) the date on which telecopied with
transmission confirmed, (iii) the next business day if delivered by overnight or
express mail, courier or delivery service, or (iv) three business days after the
same shall have been deposited in the United States mail, as the case may be.
Failure or delay in delivering copies of any notice, demand, request, consent,
approval, declaration or other communication to the persons designated above to
receive copies shall in no way adversely affect the effectiveness of such
notice, demand, request, consent, approval, declaration or other communication.
6. ENTIRE AGREEMENT.
This Agreement represents the entire agreement and understanding
among the parties hereto with respect to the subject matter hereof and
supersedes any and all prior oral and written agreements, arrangements and
understandings among the parties hereto with respect to such subject matter; and
can be amended, supplemented or changed, and any provision hereof can be waived,
only by a written instrument making specific reference to this Agreement signed
by the Company on the one hand, and the holders of a majority of the Registrable
Securities on the other hand.
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7. SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon and shall inure to the benefit
of the parties hereto and their respective successors. The rights of any
Qualified Holder under this Agreement may only be assigned and transferred to
Affiliates of such holder and any assignee of any Qualified Holder provided such
assignee owns at least 5% of the issued and outstanding Shares of the Company at
such date after giving effect to such transfer.
8. SECTION HEADINGS.
The paragraph headings contained in this Agreement are for general
reference purposes only and shall not affect in any manner the meaning,
interpretation or construction of the terms or other provisions of this
Agreement.
9. APPLICABLE LAW.
This Agreement shall be governed by, construed and enforced in
accordance with the law of the State of New York.
10. SEVERABILITY.
If at any time subsequent to the date hereof, any provision of this
Agreement shall be held by any court of competent jurisdiction to be illegal,
void or unenforceable, such provision shall be of no force and effect, but the
illegality or unenforceability of such provision shall have no effect upon and
shall not impair the enforceability of any other provision of this Agreement.
11. SPECIFIC PERFORMANCE.
The Company acknowledges that it would be impossible to determine the
amount of damages that would result from any breach by it of any of the
provisions of this Agreement and that the remedy at law for any breach, or
threatened breach, of any of such provisions would likely be inadequate and,
accordingly, agrees that each Stockholder shall, in addition to any other rights
or remedies which it may have, be entitled to seek such equitable and injunctive
relief as may be available from any court of competent jurisdiction to compel
specific
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performance of, or restrain the Company from violating any of, such provisions.
In connection with any action or proceeding for injunctive relief, the Company
hereby waives the claim or defense that a remedy at law alone is adequate and
agrees, to the maximum extent permitted by law, to have such provision of this
Agreement specifically enforced against it, without the necessity of posting
bond or other security against it, and consents to the entry of injunctive
relief against it enjoining or restraining any breach or threatened breach of
this Agreement.
12. NO WAIVER.
The failure of any party at any time or times to require performance
of any provision hereof shall not affect the right at a later time to enforce
the same. No waiver by any party of any condition, and no breach of any
provision, term, covenant, representation or warranty contained in this
Agreement, whether by conduct or otherwise, in any one or more instances, shall
be deemed to be construed as a further or continuing waiver of any such
condition or of the breach of any other provision, term, covenant,
representation or warranty of this Agreement.
13. COUNTERPARTS.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
but one and the same original instrument.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their respective officers thereunto duly authorized as
of the date first above written.
METALLURG, INC.
By:
-----------------------------------
Name:
Title:
MUTUAL SERIES FUND, INC.
By:
-----------------------------------
Name:
Title:
MORGENS WATERFALL, OVERSEAS
PARTNERS
By:
-----------------------------------
Name:
Title:
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CERBERUS PARTNERS, L.P.
By:
-----------------------------------
Name:
Title:
SBC CAPITAL MARKETS, INC.
By:
-----------------------------------
Name:
Title:
CONTRARIAN CAPITAL
By:
-----------------------------------
Name:
Title:
▇▇▇▇▇▇▇▇▇▇▇ & COMPANY, INC.
By:
-----------------------------------
Name:
Title:
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ANNEX I
Number
of
Stockholders Shares
------------ ------
Franklin Mutual Fund, Inc. (and related entities) 1,338,057
▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Morgans, Waterfall, Vintiadis & Company, Inc. 704,116
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Cerberus Partners, L.P. 709,271
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
SBC Capital Markets, Inc. 544,870
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Contrarian Capital 362,501
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ & Company, Inc. 502,362
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
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------------------------------------
Each entity includes related funds
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