EXHIBIT 4.2
FORM OF
REGISTRATION RIGHTS AGREEMENT
among
INTERNATIONAL STEEL GROUP INC.,
and
THE INVESTORS PARTY HERETO
Dated as of [ ], 2003
TABLE OF CONTENTS
PAGE
----
Article I Certain Definitions............................................................................1
Article II Registration Rights............................................................................3
2.1 Demand Registration............................................................................3
2.2 Piggyback Rights...............................................................................5
2.3 Registration; Filings and Information..........................................................6
2.4 Registration Expenses..........................................................................9
2.5 Indemnification by the Company................................................................10
2.6 Indemnification by Registering Stockholders...................................................10
2.7 Conduct of Indemnification Proceedings........................................................11
2.8 Contribution..................................................................................11
2.9 Participation in Registrations................................................................12
2.10 Rule 144......................................................................................12
2.11 Restrictions on Public Sale by Holders of Registrable Shares..................................12
Article III Termination...................................................................................13
Article IV Miscellaneous.................................................................................13
4.1 Successors and Assigns........................................................................13
4.2 Amendment and Modification; Waiver of Compliance..............................................13
4.3 Notices.......................................................................................13
4.4 Inspection....................................................................................14
4.5 Headings......................................................................................14
4.6 Recapitalizations, Exchanges, Etc., Affecting Common Stock....................................14
4.7 Counterparts..................................................................................14
4.8 Severability..................................................................................14
4.9 Attorneys' Fees...............................................................................14
4.10 Integration...................................................................................14
4.11 Choice of Law.................................................................................15
4.12 Waivers.......................................................................................15
4.13 Pronouns and Numbers..........................................................................15
4.14 Survival of Representations...................................................................15
4.15 Further Assurances............................................................................15
4.16 Full Understanding............................................................................15
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT dated as of [ ], 2003
(the "Agreement") among International Steel Group Inc., a Delaware corporation
(the "Company"), and the Persons listed on Schedule A hereto, as such schedule
may be updated from time to time (the "Stockholders"), which supercedes and
replaces the Amended and Restated Stockholders Agreement dated as of October 3,
2002 (the "Prior Agreement") among the Company and the Stockholders party
thereto.
W I T N E S S E T H:
- - - - - - - - - --
WHEREAS, the holders of all of the issued and outstanding
Common Stock as of October 3, 2002 entered into the Prior Agreement, which
amended and restated the Stockholders Agreement dated as of April 11, 2002 among
the Company and the Stockholders party thereto.
WHEREAS, each of the purchasers of the Company's Class B
Common Stock, par value $0.01 per share, who were not a party to the Prior
Agreement entered into a Joinder Agreement dated as of May 7, 2003 with the
Company to become party to the Prior Agreement.
WHEREAS, the Company has consummated the Initial Public
Offering of its Common Stock on the date hereof.
WHEREAS, the Company and the Stockholders deem it in the best
interest of the Company in light of the Initial Public Offering of Common Stock
to amend and restate the Prior Agreement to eliminate certain voting and other
restrictions contained in such Prior Agreement.
WHEREAS, the Company and at least the requisite number of
Stockholders set forth in Section 8.4 of the Prior Agreement now desire to amend
and restate the Prior Agreement.
NOW, THEREFORE, in consideration of the foregoing and the
mutual agreements and understandings set forth herein and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree that the Prior Agreement shall be
superceded and replaced in its entirety by this Agreement, and the parties
hereto hereby further agree as follows:
ARTICLE I
Certain Definitions
-------------------
As used in this Agreement, the following terms shall have the
following respective meanings:
"Affiliate" with respect to a Person, shall mean any other
Person that directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with such Person. For
the purposes of this definition, "control," when used with respect to any
Person, means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of such Person, whether
through the ownership of
voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Business Day" shall mean any day other than Saturday or
Sunday or any other day on which banks in New York are permitted or required to
close.
"Capital Stock" means the Common Stock, the Preferred Stock
and any other class of capital stock of the Company that may be outstanding from
time to time and any Capital Stock Equivalents.
"Capital Stock Equivalents" means (without duplication with
any other Capital Stock or Capital Stock Equivalents) rights (including, without
limitation, any rights under any stock bonus plan), warrants and options
(including, without limitation, employee stock options) exercisable for or
convertible or exchangeable into, directly or indirectly, Capital Stock whether
at the time of issuance or upon the passage of time or the occurrence of some
future event.
"Commission" means the Securities and Exchange Commission.
"Common Stock" shall mean the Company's Common Stock, $.01 par
value per share.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder.
"Initial Public Offering" means the first underwritten public
offering of Common Stock pursuant to an effective registration statement under
the Securities Act, other than pursuant to a registration statement on Form S-4
or Form S-8 or any successor or similar form.
"Investors" means those Persons set forth on Schedule A
hereto, other than WLR Funds.
"Person" shall mean a corporation, association, partnership,
joint venture, organization, business, individual, trust or any other entity or
organization, including a government or any subdivision or agency thereof.
"Preferred Stock" means the Company's Preferred Stock, $.01
par value per share.
"Public Offering" means any primary or secondary public
offering of Common Stock of the Company pursuant to an effective registration
statement under the Securities Act, other than pursuant to a registration
statement on Form S-4 or Form S-8 or any successor or similar form.
"Registrable Shares" means, with respect to any Person holding
Common Stock of the Company and entitled to registration rights under the terms
of this Agreement or any other agreement with the Company, such shares of Common
Stock and any additional shares of Common Stock ("Additional Shares")
subsequently paid, issued or distributed in respect of such shares by way of
stock dividend or distribution or stock split or in connection with a
combination
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of shares, recapitalization, reorganization, merger, consolidation, pursuant to
the Certificate of Incorporation of the Company, as amended from time to time,
or otherwise. Notwithstanding the foregoing, Registrable Shares will cease to be
Registrable Shares when and to the extent that (i) a registration statement
relating to such securities has been declared effective under the Securities Act
and such Registrable Shares have been disposed of pursuant to such effective
registration statement, (ii) such Registrable Shares have ceased to be
outstanding, or (iii) all such securities owned by a Stockholder may be sold in
a single transaction without registration pursuant to Rule 144 unless a
Stockholder owns 6,516,000 or more Shares in which case all Shares owned by the
Stockholder will continue to be deemed Registrable Securities until the number
of Shares owned is less than 6,516,000.
"Registration Expenses" means all (i) registration and filing
fees with the Commission, (ii) fees and expenses of compliance with state
securities or blue sky laws (including without limitation reasonable fees and
disbursements of a qualified independent underwriter, if any, counsel in
connection therewith and the reasonable fees and disbursements of counsel in
connection with blue sky qualifications of the Registrable Shares), (iii)
printing expenses, (iv) internal expenses of the Company (including without
limitation all salaries and expenses of officers and employees performing legal
or accounting duties), (v) fees and expenses of counsel and independent public
accountants for the Company, (vi) fees and expenses of any additional experts
retained by the Company in connection with such registration, (vii) fees and
expenses of listing the Registrable Shares, if any, (viii) transfer taxes, and
(ix) reasonable fees and expenses of one counsel for the Stockholders, which
counsel will be selected by the Stockholders holding a majority of Registrable
Shares held by the Stockholders and included in the registration.
"Securities Act" shall mean the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
"Share" means any share of Common Stock of the Company.
"WLR Funds" shall mean WLR Recovery Fund L.P. and WLR Recovery
Fund II L.P.
ARTICLE II
Registration Rights
-------------------
2.1 Demand Registration.
2.1.1 Subject to paragraphs 2.1.4, 2.1.5 and 2.1.6 of this
Article II, at any time and from time to time following the date that is 180
days after the date of this Agreement, WLR Funds or any Stockholder or group of
Stockholders of no less than an aggregate of 6,516,000 Shares (the "Requesting
Holders") may make a written request for registration under the Securities Act
of all or part of the Requesting Holders' Registrable Shares (a "Demand
Registration"); provided, however, that the right to request a Demand
Registration may be exercised no more than two times by the WLR Funds and three
times by the Investors (provided further, however, it being agreed that no
single Investor may initiate a Demand Registration
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more than one time and that prior to the date that is the first day after the
passage of 12 full calendar months following the date of this Agreement, any or
all of the Investors may only exercise their rights for a Demand Registration
one time, in the aggregate, and the WLR Funds may only exercise their rights for
a Demand Registration two times). Each such request will specify the number of
shares of Registrable Shares proposed to be offered for sale by the Requesting
Holders and will also specify the intended method of disposition thereof. A
registration will not count as a Demand Registration until it has become
effective.
2.1.2 If the Requesting Holders elect, the offering of the
Requesting Holders' Registrable Shares pursuant to such Demand Registration will
be in the form of an underwritten Public Offering. Subject to the approval of
the Company, the Requesting Holders will select the managing underwriter and any
additional underwriters in connection with the offering.
2.1.3 If, in connection with any Demand Registration that is
to be an underwritten Public Offering, the Company, any other Stockholders or
any other holders of Registrable Shares exercising registration rights also
desire to sell shares of Common Stock and the managing underwriter of such
offering advises the Company, the Requesting Holders and such other Stockholders
in writing that the total number of shares requested to be so included in such
registration exceeds the number of shares of Common Stock which can be sold in
such offering or that the success or pricing of the offering would be materially
and adversely affected by the inclusion of all of the shares of Common Stock
requested to be so included, then the Company will include in such registration
(i) first, the Registrable Shares requested to be included by the Requesting
Holders, such other Stockholders and such other holders exercising registration
rights, allocated pro rata among them in accordance with the number of
Registrable Shares held by each of them so that the total number of Registrable
Shares to be included in such offering for the account of all such Persons will
not exceed the number recommended by such managing underwriter, (ii) second, the
shares of Common Stock the Company proposes to offer for sale, which number of
shares to be registered will be reduced to the extent necessary to reduce the
total number of shares to be included in such offering to the number recommended
by such managing underwriter and (iii) third, such number of other shares of
Common Stock as the holders thereof desire to offer for sale and the Company and
the managing underwriter recommend be included in such offering.
2.1.4 Notwithstanding the foregoing provisions of this Section
2.1, the Requesting Holders may not request a Demand Registration (i) if a
registration statement has been filed by the Company with the Commission, unless
such registration statement has been withdrawn or has been effective for a
period of 90 calendar days, or (ii) if an underwritten offering of Common Stock
(whether for the account of the Company or any other security holders) has been
consummated within the preceding nine months; provided, however, the limitations
in clauses (i) and (ii) of this sentence will not apply if the Requesting
Holders were not given the opportunity, in accordance with Section 2.2, to
include its Registrable Shares in the registration statement described in clause
(i) or the underwritten offering described in clause (ii) (as applicable).
2.1.5 Notwithstanding the foregoing provisions of this Section
2.1, the Requesting Holders will not have the right to initiate or demand a
registration hereunder unless
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they propose to include therein Registrable Shares which it believes in good
faith to have a value of at least $25,000,000.
2.1.6 Notwithstanding the foregoing provisions of this Section
2.1, in the event the Company receives notice of a Demand Registration, the
Company may elect once, but only once, by written notice to the Requesting
Holders within 20 days after receipt of such notice, to proceed with a
registration of Common Stock for the Company's account in lieu of proceeding
with the Demand Registration, in which case the provisions of Section 2.2 (and
not this Section 2.1 ) will apply. If the Company exercises the right described
in the preceding sentence, the Requesting Holders will not be deemed (for
purposes of determining the number of future Demand Registrations that may be
demanded under the terms of this Agreement) to have exercised the right to
request a Demand Registration unless at least 80% of the Registrable Shares that
the Requesting Holders desired to include in such Demand Registration were
included pursuant to Section 2.2.
2.1.7 The Requesting Holders shall be permitted to remove all
or any part of the Registrable Shares held by the Requesting Holders from any
Demand Registration at any time prior to the effective date of the registration
statement covering such Registrable Shares; provided, however, if, as a result
of the removal of such Registrable Shares, such registration statement is
withdrawn by the Company, such Demand Registration shall nonetheless count as a
Demand Registration for purposes of determining the number of future Demand
Registrations which can be requested pursuant to Section 2.1 hereof, unless the
Requesting Holders reimburses the Company for all Registration Expenses incurred
by the Company in connection with such withdrawn Demand Registration.
2.2 Piggyback Rights.
2.2.1 If, other than in connection with an Initial Public
Offering, the Company proposes to file a registration statement under the
Securities Act with respect to an offering of any shares of Common Stock (i) for
its own account (other than a registration statement on Form S-4 or S-8 (or any
substitute form that may be adopted by the Commission)) or (ii) for the account
of any Stockholders pursuant to a Demand Registration requested pursuant to
Section 2.1.1, then the Company will give written notice of such proposed
offering to all Stockholders as soon as practicable (provided that Stockholders
will be given such notice not less than 20 calendar days prior to the deadline
set by the Company for electing to include Registrable Shares in such offering),
and such notice will offer such Stockholders the opportunity, in accordance with
Section 2.2.2, to register such number of shares of Registrable Shares as such
Stockholders may request on the same terms and conditions as the registration of
the Company's or such other holders shares of Common Stock. If the Company so
elects, the offering contemplated by this Section 2.2 will be in the form of an
underwritten offering. The Company will select the managing underwriter and any
additional underwriters in connection with the offering. Any Stockholder
exercising its rights under this Section 3.2 shall have the right to withdraw
such Stockholder's request for inclusion in any registration for the account of
the Company pursuant to this Section 2.3 by giving written notice to the Company
of such withdrawal not later than five Business Days prior to the effective date
of the Company's registration statement.
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2.2.2 Whenever the Company proposes to file a registration
statement in accordance with Section 2.2.1, the Company will include in such
registration statement all Registrable Shares which any Stockholder requests to
be included therein; provided, however, that if the managing underwriter of an
underwritten offering under this Section 2.2 advises the Company and such
Stockholders in writing that the total number of shares requested to be included
in such registration exceeds the number of shares of Common Stock which can be
sold in such offering or that the success or pricing of the offering would be
materially and adversely affected by the inclusion of all of the shares of
Common Stock requested to be included, then (except in the case of a Demand
Registration as to which Section 2.1.3 will govern), the Company will include in
such registration (i) first, the shares of Common Stock the Company proposes to
offer for sale for its own account, (ii) second, the Registrable Shares
requested to be included by the Requesting Holders, such other Stockholders and
any other holders of Registrable Shares exercising registration rights,
allocated pro rata among them in accordance with the number of Registrable
Shares held by each of them so that the total number of Registrable Shares to be
included in such offering for the account of all such Persons will not exceed
the number recommended by such managing underwriter, and (iii) third, such
number of other shares of Common Stock as the holders thereof desire to offer
for sale and the Company and the managing underwriter recommend be included in
such offering. Notwithstanding the foregoing, the Company may, at any time,
withdraw or cease proceeding with any registration pursuant to this Section 2.3
if it shall at the same time withdraw or cease proceeding with the registration
of any of the Shares originally proposed to be registered.
2.2.3 A request by the Requesting Holders to include
Registrable Shares in a proposed underwritten offering pursuant to this Section
2.2 will not be deemed to be a request for a demand registration pursuant to
Section 2.1.
2.3 Registration; Filings and Information. Whenever a
Stockholder (the "Registering Stockholder") requests that any Registrable Shares
be registered pursuant to Section 2.1 or 2.2, the Company will use its
reasonable best efforts to effect the registration of such Registrable Shares to
the extent required by Section 2.1 or 2.2, as promptly as is practicable, and in
connection with any such request the Company:
(a) will as expeditiously as possible prepare and file with
the Commission a registration statement on any form for which the
Company then qualifies and which counsel for the Company deems
appropriate and available for the sale of the Registrable Shares to be
registered thereunder in accordance with the intended method of
distribution thereof, and use its reasonable best efforts to cause such
filed registration statement to become and remain effective for a
period of not less than 90 calendar days or, if less, the period
required for such Registrable Shares to be sold; provided, however,
that if the Company furnishes to the Registering Stockholder a
certificate signed by the Company's Chief Executive Officer stating
that the Board of Directors has determined that it would be materially
detrimental or otherwise materially disadvantageous to the Company or
its stockholders (whether because of any proposed material transaction
or otherwise) for such a registration statement to be filed as
expeditiously as possible, the Company will have a period of not more
than 120 calendar days within which to file such registration Statement
measured from the date of the Company's receipt of the Registering
Stockholder's request for registration;
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(b) will, if requested, prior to filing such registration
statement or any amendment or supplement thereto, furnish to the
Registering Stockholder and each applicable underwriter, if any, copies
thereof, and thereafter furnish to the Registering Stockholder and each
such Underwriter, if any, such number of copies of such registration
statement, amendment and supplement thereto (in each case including all
exhibits thereto and documents incorporated by reference therein) and
the prospectus included in such registration statement (including each
preliminary prospectus) as the Registering Stockholder or each such
underwriter may reasonably request in order to facilitate the sale of
the Registrable Shares;
(c) after the filing of the registration statement, will
promptly notify the Registering Stockholder of any stop order issued
or, to the Company's knowledge, threatened to be issued by the
Commission or any state securities agency or authority and take all
reasonable actions required to prevent the entry of such stop order or
to remove it if entered;
(d) will endeavor to qualify the Registrable Shares for offer
and sale under such other securities or blue sky laws of such
jurisdictions in the United States as the Registering Stockholder
reasonably requests; provided, however, that the Company will not be
required to (i) qualify generally to do business in any jurisdiction
where it would not otherwise be required to quality but for this
subsection (d), (ii) subject itself to taxation in any such
jurisdiction, or (iii) consent to general service of process in any
such jurisdiction;
(e) will as promptly as is practicable notify the Registering
Stockholder, at any time when a prospectus relating to the sale of the
Registrable Shares is required by law to be delivered in connection
with sales by an underwriter or dealer, of the occurrence of any event
requiring the preparation of a supplement or amendment to such
prospectus so that, as thereafter delivered to the purchasers of such
Registrable Shares, such prospectus will not contain an 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 the light of the circumstances under which they were made,
not misleading and promptly make available to the Registering
Stockholder and to the underwriters any such supplement or amendment.
The Registering Stockholder agrees that, upon receipt of any notice
from the Company of the occurrence of any event of the kind described
in the preceding sentence, the Registering Stockholder will forthwith
discontinue the offer and sale of Registrable Shares pursuant to the
registration statement covering such Registrable Shares until receipt
by the Registering Stockholder and the underwriters of the copies of
such supplemented or amended prospectus and, if so directed by the
Company, the Registering Stockholder will deliver to the Company all
copies, other than permanent file copies then in the Registering
Stockholder possession, of the most recent prospectus covering such
Registrable Shares at the time of receipt of such notice. In the event
the Company gives such notice, the Company will extend the period
during which such registration statement will be effective as provided
in Section 2.3(a) by the number of days during the period from and
including the date of the giving of such notice to the date when the
Company will make available to the Registering Stockholder such
supplemented or amended prospectus;
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(f) will enter into customary agreements (including in the
case of an underwritten offering an underwriting agreement in customary
form) and the Company and its officers will take such other actions as
are reasonably required in order to expedite or facilitate the sale of
such Registrable Shares, including participation in a "road show"
undertaken in connection with such sale.
(g) in the case of an underwritten offering, will furnish to
the Registering Stockholder and to each underwriter a signed
counterpart, addressed to the Registering Stockholder or such
underwriter, of (i) an opinion or opinions of counsel to the Company
and (ii) a comfort letter or comfort letters from the Company's
independent public accountants, each in customary form and covering
such matters of the type customarily covered by opinions or comfort
letters, as the case may be, as the Registering Stockholder or the
managing underwriter may reasonably request;
(h) will make generally available to its security holders, as
soon as reasonably practicable, an earnings statement covering a period
of 12 months, beginning within three months after the effective date of
the registration statement, which earnings statement will satisfy the
provisions of Section 11(a) of the Securities Act and the rules and
regulations of the Commission thereunder;
(i) will use its reasonable efforts to cause all such
Registrable Shares to be listed on each securities exchange on which
securities of the same class issued by the Company are then listed;
(j) may require the Registering Stockholder promptly to
furnish in writing to the Company such information regarding the
Registering Stockholder, the plan of distribution of the Registrable
Shares and other information as the Company may from time to time
reasonably request or as may be legally required in connection with
such registration. The furnishing of such information will be a
condition to the Company's obligations hereunder;
(k) will notify each Registering Stockholder, its counsel and
the managing underwriters, if any, as soon as possible and (if
requested by any such Person) confirm such notice in writing, (i) when
a prospectus relating to the Registrable Shares or any prospectus
supplement or post-effective amendment has been filed and, with respect
to a registration statement relating to the Registrable Shares or any
post-effective amendment, when the same has become effective, (ii) of
any request by the Commission for amendments or supplements to a
registration statement relating to the Registrable Shares or related
prospectus or for additional information, (iii) of the issuance by the
Commission of any stop order suspending the effectiveness of a
registration statement relating to the Registrable Shares or the
initiation of any proceedings for that purpose, (iv) of the receipt by
the Company of any notification with respect to the suspension of the
qualification of any of the Registrable Shares for sale in any
jurisdiction or the initiation or threatening of any proceeding for
such purpose, and (v) of the Company's reasonable determination that a
post-effective amendment to a registration statement relating to the
Registrable Shares would be appropriate or that there exist
circumstances
8
not yet disclosed to the public which make further sales under such
registration statement inadvisable pending such disclosure and
post-effective amendment;
(l) upon the occurrence of any event contemplated by paragraph
(e) above, promptly prepare a supplement or post-effective amendment to
the registration statement relating to the Registrable Shares or
related prospectus or any document incorporated therein by reference or
file any other required document so that (i) such registration
statement will not contain any 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 or (ii) as
thereafter delivered to the purchasers of the Registrable Shares being
sold thereunder, such prospectus will not include an untrue statement
of a material fact or omit to state a material fact necessary in order
to make the statements therein in light of the circumstances under
which they were made, not misleading; and (iii) will make every
reasonable effort to obtain the withdrawal of any order suspending the
effectiveness of a registration statement relating to the Registrable
Shares, or the lifting of any suspension of the qualification of any of
the Registrable Shares for sale in any jurisdiction, at the earliest
possible moment;
(m) (i) if reasonably requested by the managing underwriter or
any Registering Stockholder, promptly incorporate in a prospectus
supplement or post-effective amendment such information concerning such
Registering Stockholder, the managing underwriter or underwriters or
the intended method of distribution as the managing underwriter or
underwriters or the Registering Stockholder reasonably requests to be
included therein and as is appropriate in the reasonable judgment of
the Company including, without limitation, information with respect to
the number of shares of the Registrable Shares being sold to such
underwriter or underwriters, the purchase price being paid therefor by
such underwriter or underwriters, the purchase price being paid
therefor by such underwriter or underwriters and with respect to any
other terms of the underwritten (or best efforts underwritten) offering
of the Registrable Shares to be sold in such offering; and (ii) make
all required filings of such prospectus supplement or post-effective
amendment as promptly as practicable after being notified of the
matters to be incorporated therein;
(n) will furnish to each Registering Stockholder and each
managing underwriter, if any, without charge, one manually signed copy
of the registration statement relating to the Registrable Shares and
any post-effective amendments thereto, including financial statements
and schedules and, upon request, all documents incorporated therein by
reference and all exhibits (including those incorporated by reference);
and
(o) will provide a transfer agent and registrar for the
Registrable Shares not later than the effective date of the
registration statement relating to the Registrable Shares.
2.4 Registration Expenses. Registration Expenses incurred in
connection with any registration made or requested to be made pursuant to this
Article II will be borne by the Company, whether or not any such registration
statement becomes effective, to the extent
9
permitted by applicable law. The Registering Stockholders will pay, on a pro
rata basis, any underwriting fees, discounts or commissions attributable to the
sale of the Registrable Shares. In addition, but not in duplication of, the
foregoing, each Registering Stockholder shall be entitled to reimbursement from
the Company for any out-of-pocket losses actually incurred in the event, and
only to the extent, that such Registering Stockholder suffers such losses as a
result of such Registering Stockholder's inability to make delivery of sold
Registrable Shares due to the Company's breach of its commitment to provide
timely notice as required by Section 2.3(k)(iii), (iv) or (v).
2.5 Indemnification by the Company. The Company agrees to
indemnify and hold harmless each Registering Stockholder, its Officers,
directors, members, managers and agents, and each Person, if any, who controls
each such Registering Stockholder within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act from and against any and all
losses, claims, damages, liabilities and expenses caused by any untrue statement
or alleged untrue statement of a material fact contained in any registration
statement or prospectus relating to the Registrable Shares (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) or any preliminary prospectus, or caused by 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, except insofar as such
losses, claims, damages, liabilities or expenses are caused by any such untrue
statement or omission or alleged untrue statement or omission based upon
information furnished in writing to the Company by or on behalf of such
Registering Stockholder or any underwriter expressly for use therein; provided,
however, that the foregoing indemnity agreement with respect to any preliminary
prospectus will not inure to the benefit of any Registering Stockholder if a
copy of the current prospectus was not provided in the manner required by
applicable regulations to the applicable purchaser by such Registering
Stockholder and such current copy of the prospectus would have cured the defect
giving rise to such loss, claim, damage, liability or expenses. The Company also
agrees to indemnify any underwriters of the Registrable Shares, their officers
and directors and each Person who controls such underwriters on substantially
the same basis as that of the indemnification of the Registering Stockholders
provided in this Section 2.5.
2.6 Indemnification by Registering Stockholders. Each
Registering Stockholder registering shares pursuant to this Article II agrees,
severally but not jointly, to indemnify and hold harmless the Company, its
officers and Directors and each Person, if any, who controls the Company within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act to the same extent as the foregoing indemnity from the Company to
such Registering Stockholder, but only with reference to information related to
such Registering Stockholder furnished in writing by or on behalf of such
Registering Stockholder expressly for use in any registration statement or
prospectus relating to the Registrable Shares, or any amendment or supplement
thereto or any preliminary prospectus; provided, however, that in no event will
the liability of any Registering Stockholder under this Section 2.6 be greater
in amount than the dollar amount of the proceeds received by such holder upon
the sale of the Registrable Shares giving rise to such indemnification
obligation. Each such Registering Stockholder also agrees to indemnify and hold
harmless any underwriters of the Registrable Shares, their officers and
directors and each Person who controls such underwriters on such terms as
provided for in underwriting agreement relating to such offering.
10
2.7 Conduct of Indemnification Proceedings. In the case any
proceeding (including any governmental investigation) is instituted involving
any Person in respect of which indemnity may be sought pursuant to Section 2.5
or Section 2.6, such Person will promptly notify the Person against whom such
indemnity may be sought in writing and the indemnifying party upon request of
the indemnified party will retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and will pay the fees and
disbursements of such counsel related to the proceeding; provided, however, that
the failure to so notify the indemnifying Person shall not relieve the
indemnifying party from any liability that it may otherwise have to such
indemnified Person, except to the extent the indemnifying Person shall have been
materially prejudiced by such failure. In any such proceeding, any indemnified
party will have the right to retain its own counsel, but the fees and expenses
of such counsel will be at the expense of such indemnified party unless (a) the
indemnifying party and the indemnified party have mutually agreed to the
retention of such counsel or (b) the named parties to any such proceeding
(including any impleaded parties) include both the indemnified party and the
indemnifying party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them, in
which case the fees and expenses of such counsel will be paid by the Company. It
is understood that the indemnifying party will not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys (in
addition to any local counsel) at any time for all such indemnified parties, and
that all such reasonable fees and expenses will be reimbursed as they are
incurred. In the case of the retention of any such separate firm for the
indemnified parties, such firm will be designated in writing by the indemnified
parties. The indemnifying party will not be liable for any settlement of any
proceeding effected without its consent, but if settled with such consent, or if
there be a final judgment for the plaintiff, the indemnifying party will
indemnify and hold harmless such indemnified parties from and against any loss
or liability (to the extent stated above) by reason of such settlement or
judgment.
2.8 Contribution.
(a) If the indemnification provided for herein is for any
reason unavailable to the indemnified parties in respect of any losses,
claims, damages or liabilities referred to herein, then each such
indemnifying party, in lieu of indemnifying such indemnified party,
will contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages or liabilities in such
proportion as is appropriate to reflect the relative fault of the
Company, the Registering Stockholders and any underwriter in connection
with the statements or omissions which resulted in such losses, claims,
damages or liabilities, as well as any other relevant equitable
considerations. The relative fault of the Company, the Registering
Stockholders and the underwriter will be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material
fact relates to information supplied by such party, and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
(b) The Company and each Registering Stockholder agree that it
would not be just and equitable if contribution pursuant to this
Section 2.8 were
11
determined by pro rata allocation (even if the underwriters
were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the
equitable considerations referred to in the immediately
preceding subsection. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages
or liabilities referred to in the immediately preceding
subsection will be deemed to include, subject to the
limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection
with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 2.8, no
Registering Stockholder will be required to contribute any
amount by reason of such untrue or alleged untrue statement or
omission or alleged omission in excess of the amount received
by such Registering Stockholder upon the sale of the
Registrable Shares giving rise to such contribution
obligation. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act)
will be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
2.9 Participation in Registrations. The Company may require
each holder of Registrable Shares as to which any registration is being effected
to furnish the Company all such information regarding the manner of distribution
of such Registrable Shares as the Company may reasonably request in writing and
such other information as may be legally required in connection with such
registration. Notwithstanding any other provision of this Agreement, no Person
may participate in any underwritten registration hereunder unless such Person
(a) agrees to sell such Person's securities on the basis provided in any
reasonable underwriting arrangements, if any, approved by the Company or other
Persons entitled hereunder to approve such arrangements and (b) completes and
executes all customary questionnaires, powers of attorney, indemnities,
underwriting agreements, "lock-up" agreements and other documents reasonably
required under the terms of such underwriting arrangements and these
registration rights.
2.10 Rule 144. Upon consummation of the Initial Public
Offering, the Company will file any reports required to be filed by it under the
Securities Act and the Exchange Act and will take such further action as any
Stockholder may reasonably request to the extent required from time to time to
enable the Stockholders to sell Registrable Shares without registration under
the Securities Act within the limitation of the exemptions provided by Rule 144
under the Securities Act, as such Rule may be amended from time to time, or
other appropriate rule or regulation adopted by the Commission. Upon the request
of any Stockholder, the Company will deliver to the Stockholder a written
statement as to whether the Company has complied with such reporting
requirements.
2.11 Restrictions on Public Sale by Holders of Registrable
Shares. If and to the extent requested by the managing underwriter or
underwriters in the case of an underwritten Public Offering, each of the
Stockholders agrees not to effect, except as part of such registration, any sale
of the shares of Common Stock or a similar security of the Company, or any
securities convertible into or exchangeable or exercisable for such securities
during such time period (not to exceed 180 days) for which the Company agrees
not to effect any sale of securities in connection therewith, or to which the
Registering Stockholder agrees if the Company does not include any securities
therein. In addition, each of the Stockholders agrees to execute any customary
lock-up agreement reasonably requested by the managing underwriter to confirm
its
12
agreement in accordance with the preceding sentence, but only if identical
lock-up agreements are required of all Stockholders.
ARTICLE III
Termination
-----------
The Agreement shall terminate on the date on which all Shares
subject to this Agreement cease to be Registrable Shares. Notwithstanding the
foregoing, this Agreement shall in any event terminate with respect to any
Stockholder when such Stockholder no longer owns any shares of the Common Stock
or Capital Stock Equivalents.
ARTICLE IV
Miscellaneous
-------------
4.1 Successors and Assigns. Except as otherwise provided
herein, all of the terms and provisions of this Agreement shall be binding upon,
shall inure to the benefit of and shall be enforceable by the respective
successors and assigns of the parties hereto. The Company may not assign any of
its rights hereunder to any Person other than an Affiliate of the Company. If
any transferee of any Stockholder shall acquire any Shares in any manner,
whether by operation of law or otherwise, such shares shall be held subject to
all of the terms of this Agreement, and by taking and holding such shares such
Person shall be entitled to receive the benefits of and be conclusively deemed
to have agreed to be bound by and to comply with all of the terms and provisions
of this Agreement.
4.2 Amendment and Modification; Waiver of Compliance.
4.2.1 This Agreement may be amended only by a written
instrument duly executed by the Company and Stockholders holding no less than 66
2/3% of the Shares subject to this Agreement.
4.2.2 Except as otherwise provided in this Agreement, any
failure of any of the parties to comply with any obligation, covenant, agreement
or condition herein may be waived by the party entitled to the benefits thereof
only by a written instrument signed by the party granting such waiver, but such
waiver or failure to insist upon strict compliance with such obligation,
covenant, agreement or condition shall not operate as a waiver of, or estoppel
with respect to, any subsequent or other failure.
4.3 Notices. Any notice, request, claim, demand, document and
other communication hereunder to any party shall be in writing and delivered
personally or sent by telex, telecopy, nationally recognized overnight courier
or certified or registered mail, postage prepaid, or other similar means of
communication, as follows:
(a) If to the Company, addressed to its principal executive
offices to the attention of its Chief Executive Officer; and
13
(b) If to a Stockholder, to the address of such Stockholder
set forth on Schedule A, as updated from time to time, or to such other
address as such Stockholder shall have specified by notice given to the
Company and the other Stockholders in the manner specified above.
Notice by facsimile or hand delivery shall be deemed to have
been received by the close of the Business Day on which it was transmitted or
hand delivered (unless transmitted or hand delivered after close of business in
which case it shall be deemed received at the close of the next Business Day).
Notice by overnight mail or courier shall be deemed to have been received by the
close of business on the first Business Day after such notice was sent. Notice
sent by certified or registered mail shall be deemed received on the date
delivery was first attempted by the U.S. Postal Service.
4.4 Inspection. For so long as this Agreement shall be in
effect, this Agreement shall be made available for inspection by any Stockholder
or prospective transferee of any Stockholder at the principal executive offices
of the Company.
4.5 Headings. The Article, Section and Paragraph headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement.
4.6 Recapitalizations, Exchanges, Etc., Affecting Common
Stock. The provisions of this Agreement shall apply to the full extent set forth
herein with respect to Common Stock, to any and all shares of Capital Stock of
the Company (including the capital stock of any successor or assign of the
Company, whether by merger, consolidation, sale of assets, or otherwise) which
may be issued in respect of, in exchange for, or in substitution of, Common
Stock and shall be appropriately adjusted for any stock dividends, splits,
reverse splits, combinations, recapitalization and the like occurring after the
date hereof.
4.7 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
4.8 Severability. If any provision herein, or the application
thereof to any circumstance, is found to be unenforceable, invalid or illegal,
such provision shall be deemed deleted from this Agreement or not applicable to
such circumstance, as the case may be, and the remainder of this Agreement shall
not be affected or impaired thereby.
4.9 Attorneys' Fees. If any action is brought to enforce or
interpret any part of this Agreement or any other agreement or instrument
provided for herein or the rights or obligations of any party to this Agreement
or such other agreement or instrument, the prevailing parry in such action shall
be entitled to recover its reasonable attorney's fees and expenses.
4.10 Integration. This Agreement expresses the entire
agreement and understanding of the parties hereto with respect to the matters
set forth herein and supersedes all prior agreements (including the Prior
Agreement), arrangements and understandings among the parties hereto with
respect to the matters set forth herein.
14
4.11 Choice of Law. This Agreement shall be construed,
enforced and governed by the internal laws of the State of New York without
regard to its conflicts of law principles.
4.12 Waivers. No waiver of any term, provision or condition of
this Agreement, in any one or more instances, shall be deemed to be or construed
as a further waiver of any such term, provision or condition or as a waiver of
any other term, provision or condition.
4.13 Pronouns and Numbers. When the context so requires, the
masculine shall include the feminine and neuter, the singular shall include the
plural and conversely.
4.14 Survival of Representations. All representations and
warranties set forth in this Agreement shall survive the execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby.
4.15 Further Assurances. The parties hereto agree to execute
any and all such further agreements, instruments or documents, and to take any
and all such further action, as may be necessary or desirable to carry into
effect the purpose and intent of this Agreement.
4.16 Full Understanding. Each of the parties hereto represents
and agrees that such party fully understands his or its rights, and has had the
opportunity to discuss all aspects of this Agreement with his or its attorney,
and that to the extent, if any, that he or it desired, he or it availed itself
of such right and opportunity. Each party further represents that he or it has
carefully read and fully understands all of the provisions of this Agreement,
and the meaning, intent and consequences thereof, that he is competent to
execute this Agreement, that it, or its representative, is duly authorized to
execute this Agreement, that his or its execution and delivery of this Agreement
has not been obtained by any duress and that he or it freely and voluntarily
enters into this Agreement.
15
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be duly executed on the date first above written.
THE COMPANY:
INTERNATIONAL STEEL GROUP INC.
By:
-----------------------------------
Name:
Title:
WLR FUNDS:
WLR RECOVERY FUND LP.
By WLR Recovery Associates LLC, its
General Partner
By:
-----------------------------------
Name: ▇▇▇▇▇ ▇. Wax
Title: Principal Member
WLR RECOVERY FUND II L.P.
By WLR Recovery Associates II LLC, its
General Partner
By:
-----------------------------------
Name: ▇▇▇▇▇ ▇. Wax
Title: Principal Member
16
INVESTORS:
CLEVELAND-CLIFFS INC
By:
-----------------------------------
Name:
Title:
CLEVELAND-CLIFFS INC AND
ASSOCIATED COMPANIES COLLECTIVE
INVESTMENT TRUST
By:
----------------------------------
Name:
Title:
--------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇
GEORGIA FINANCIAL, LLC
By:
-----------------------------------
Name:
17
MUTUAL SHARES FUND,
MUTUAL QUALIFIED FUND,
MUTUAL BEACON FUND,
MUTUAL DISCOVERY FUND,
MUTUAL SHARES SECURITIES FUND,
MUTUAL DISCOVERY SECURITIES FUND,
MUTUAL BEACON FUND (Canada), and
FRANKLIN MUTUAL BEACON FUND
By FRANKLIN MUTUAL ADVISERS, LLC
By:
-----------------------------------
Name:
Title:
▇▇▇▇▇▇ ▇▇▇▇▇▇ MEDICAL INSTITUTE
By:
-----------------------------------
Name:
Title:
INDOFIN, N.V.
By:
-----------------------------------
Name: Pieter van Dongen
Title: Director
--------------------------------------
▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
LORD BALTIMORE EQUITY
PARTNERS II, LLC
By:
-----------------------------------
Name:
Title:
18
--------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ INTEREST L.P.
By:
----------------------------------
Name:
Title:
GE CAPITAL CFE, INC.
By:
---------------------------------
Name:
Title:
GS PRIVATE EQUITY PARTNERS II, L.P.
By: GS PEP II Advisors, L.L.C.,
General Partner
By: GSAM Gen-Par, L.L.C., Managing
Partner
By:
---------------------------------
Name:
Title:
GS PRIVATE EQUITY PARTNERS
II OFFSHORE, L.P.
By: GS PEP II Offshore Advisors, Inc.,
General Partner
By:
----------------------------------
Name:
Title:
19
GS PRIVATE EQUITY PARTNERS II -
DIRECT INVESTMENT FUND, L.P.
By: GS PEP II Direct Investment
Advisors, L.L.C.,
General Partner
By: GSAM Gen-Par, L.L.C., Managing
Partner
By:
----------------------------------
Name:
Title:
GS DISTRESSED OPPORTUNITIES FUND, L.P.
By: GS Distressed Opportunities
Advisors, L.L.C.,
General Partner
By: GSAM Gen-Par, L.L.C., Managing
Member
By:
----------------------------------
Name:
Title:
GS DISTRESSED OPPORTUNITIES FUND
OFFSHORE HOLDINGS, L.P.
By: GS Distressed Opportunities
Offshore Holdings Advisors, Inc.,
General Partner
By:
----------------------------------
Name:
Title:
GS DISTRESSED OPPORTUNITIES EMPLOYEE
FUND, L.P.
By: GS Distressed Opportunities
Employee Funds GP, LLC.,
General Partner
By:
----------------------------------
Name:
Title:
20
ARROWSMITH FUND, LTD.
By:
----------------------------------
Name:
Title:
▇▇▇ ARBOR PARTNERS, L.P.
By:
----------------------------------
Name:
Title:
PERMAL GLOBAL HIGH YIELD HOLDINGS N.V.
By:
----------------------------------
Name:
Title:
CITCO GLOBAL CUSTODY (NA) N.V.
By:
----------------------------------
Name:
Title:
THE ▇▇▇▇▇▇▇▇▇▇ COLLECTION, LTD
By:
----------------------------------
Name:
Title:
21
--------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
▇▇▇▇▇ ▇. Wax
--------------------------------------
▇▇▇▇▇▇▇ ▇. Toy
--------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
22
UBS AG, LONDON BRANCH
By:
----------------------------------
Name:
Title:
By:
----------------------------------
Name:
Title:
CARGILL FINANCIAL SERVICES
INTERNATIONAL, INC.
By:
---------------------------------
Name:
Title:
COREPLUS PRIVATE EQUITY PARTNERS
QP, L.P.
By:
----------------------------------
Name:
Title:
PMG-NG DIRECT INVESTMENT FUND, L.P.
By:
----------------------------------
Name:
Title:
23
SPECIAL PRIVATE EQUITY PARTNERS, L.P.
By:
----------------------------------
Name:
Title:
COREPLUS PRIVATE EQUITY PARTNERS
GMBH & CO. KG
By:
----------------------------------
Name:
Title:
--------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
▇▇▇▇ ▇. ▇▇▇▇, III
24