EXHIBIT 4.3
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement as of the October 31, 2002 (pursuant to
the Plan of Reorganization of the Company (the "Plan"), as confirmed by order of
the United States Bankruptcy Court for the Southern District of Texas, Houston
Division) is made by and among, Metals USA, Inc., a Delaware corporation as
reorganized pursuant to Chapter 11, Title 11 of the United States Code (the
"Company"), and each of the holders (the "Initial Holders") set forth on the
signature pages hereto.
SECTION 1. DEFINITIONS.
As used herein, the following terms shall have the following meanings:
"Affiliate" means, with respect to any specified Person, any other Person
who, directly or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with such specified Person. For
purposes of this definition, the term "control" (including the terms
"controlling," "controlled by" and "under common control with") means the
possession, direct or indirect, of the power to cause the direction of the
management and policies of a Person, whether through the ownership of voting
securities, by contract or otherwise.
"Audit Completion Date" means the first date on which there are available
for filing with the Commission in the Shelf Registration Statement (i) audited
financial statements for the Company required to be included in the Shelf
Registration Statement pursuant to Regulation S-X (assuming an anticipated
effective date of the Shelf Registration Statement no earlier than 91 days
subsequent to December 31, 2002) and (ii) the consent of the auditor(s) that
audited such financial statements to the inclusion of such financial statements
in the Shelf Registration Statement.
"Business Day" means any day other than a day on which banks are authorized
or required to be closed in the State of Texas.
"Commission" means the Securities and Exchange Commission or any successor
thereto.
"Common Shares" means the shares of New Common Stock distributed under the
Plan to the Initial Holders.
"Company" has the meaning set forth in the first paragraph hereof and shall
include the Company's successors by merger, acquisition, reorganization or
otherwise.
"Controlling Persons" has the meaning set forth in Section 7(a).
"Damages" has the meaning set forth in Section 7(a).
"Effective Date" has the meaning set forth in the first paragraph.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, or any successor statute, and the rules and regulations of the
Commission promulgated thereunder.
"Holder" means, at any time, any beneficial owner of New Common Stock
constituting Registrable Securities at such time that either (x) is an Initial
Holder or (y) any transferee of an Initial Holder that has executed an addendum
hereto in the form of Annex A hereto agreeing to become a Holder hereunder and
subject to the terms and provisions hereof.
"Holders' Counsel" means such single law firm selected by Holders of a
majority in interest of Registrable Securities then outstanding and beneficially
owned by the Holders to serve as counsel to all of the Holders in connection
with the preparation of the Shelf Registration Statement; provided that, for any
successor counsel to be deemed "Holders' Counsel" for purposes of this
Registration Rights Agreement, the Company shall have received written notice
from the relevant Holders specifying the identity and address of any such
successor counsel.
"Indemnified Party" has the meaning set forth in Section 7(c).
"Indemnifying Party" has the meaning set forth in Section 7(c).
"Inspectors" has the meaning set forth in Section 4(l).
"NASD" has the meaning set forth in Section 4(o).
"New Common Stock" means the Common Stock, par value $0.01 per share, of
the Company.
"Participating Holders" means Holders participating, or requesting to
participate, as the case may be, in an underwritten offering of Registrable
Securities in an underwritten offering pursuant to Section 3.
"Person" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization or government or other agency or political subdivision thereof.
"Prospectus" means the prospectus included in any Registration Statement
(including, without limitation, a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act) as
filed with the Commission by the Company pursuant to Rule 424 (or any similar
provision then in force) of the Securities Act, as amended or supplemented by
any prospectus supplement so filed with the Commission, including a prospectus
supplement so filed with the Commission with respect to the terms of the
offering of any portion of the Registrable Securities covered by such
Registration Statement, and by all other amendments and supplements to the
prospectus so filed with the Commission, including post-effective amendments so
filed with the Commission, and in each case including all material incorporated
by reference or deemed to be incorporated by reference in such prospectus.
"Records" has the meaning set forth in Section 4(l).
"Registrable Securities" means, the Common Shares until such time as either
(i) such Common Shares have been transferred or sold (other than by transfer by
operation of law or by dividend (or other similar distribution), descent,
bequest or inheritance and without payment of
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any consideration) or (ii) such Common Shares are beneficially owned by a Person
who (together with its Affiliates and together with any Persons who are members
of a "group" (within the meaning of Section 13 of the Exchange Act and the rules
and regulations promulgated thereunder) with such Person), directly or
indirectly, beneficially owns less than ten percent (10%) of the issued and
outstanding shares of Common Stock at such time.
"Registration Expenses" has the meaning set forth in Section 6.
"Registration Statement" means any registration statement of the Company
filed with the Commission on the appropriate form pursuant to the Securities Act
that covers any of the Registrable Securities pursuant to the provisions of this
Agreement, and all amendments and supplements to any such registration
statement, including post-effective amendments, in each case including the
Prospectus, all exhibits, and all material incorporated by reference or deemed
to be incorporated by reference in such registration statement.
"Securities Act" means the Securities Act of 1933, as amended from time to
time, or any successor statute, and the rules and regulations of the Commission
promulgated thereunder.
"Selling Holders" has the meaning set forth in Section 4(a).
"Shelf Registration" has the meaning set forth in Section 2(a).
"Shelf Registration Statement" has the meaning set forth in Section 2(a).
"Suspension Notice" has the meaning set forth in Section 5.
"Suspension Period" has the meaning set forth in Section 5.
"Target Effective Date" means the date sixty (60) days after the Audit
Completion Date.
"Target Effective Period" has the meaning set forth in Section 2(a).
"Termination Date" means the earlier of (i) the date on which no
Registrable Securities remain outstanding and (ii) the date of the second
anniversary of the Effective Date, such date in clause (ii) to be extended for
the aggregate number of days during any Suspension Periods.
"Trading Day" shall mean each Monday, Tuesday, Wednesday, Thursday, and
Friday, other than any day on which securities are not traded on the applicable
securities exchange or in the applicable securities market.
"Underwritten Holder Offering" means a registration in which securities of
the Company are sold by a Holder to an underwriter for reoffering to the public.
"underwritten registration" or "underwritten offering" means a registration
in which securities of the Company are sold to an underwriter for reoffering to
the public.
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SECTION 2. SHELF REGISTRATION.
FILING; EFFECTIVENESS. The Company shall prepare, and, as soon as
practicable but in no event later than April 10, 2003 (the "Mandatory Filing
Date"), file with the Commission a shelf registration statement (the "Shelf
Registration Statement") on the appropriate form for an offering to be made on a
continuous basis pursuant to Rule 415 under the Securities Act (or such
successor rule or similar provision then in effect) covering all of the
Registrable Securities for which information has timely been provided to the
Company pursuant to Section 9(b) (a "Shelf Registration"). If, as of the Target
Effective Date, the Shelf Registration Statement is not effective or the
effectiveness thereof has been suspended, then the Company shall use its
reasonable best efforts to cause such Shelf Registration Statement to be
effective as soon as practicable, but in no event later than June 30, 2003 (the
"Mandatory Effective Date"). Once the Shelf Registration Statement is effective,
the Company shall use its reasonable best efforts to keep such Shelf
Registration Statement continuously effective for a period (the "Target
Effective Period") ending on the earlier of (i) the Termination Date and (ii)
the date on which no Registrable Securities are outstanding. The Holders shall
be permitted to withdraw all or any part of the Registrable Securities from a
Shelf Registration Statement no later than 10 Business Days prior to the
expected initial effective date of such Shelf Registration Statement. The
Company may include or permit any other party to include any securities other
than Registrable Securities in the Shelf Registration. The Shelf Registration
Statement shall contain a plan of distribution for a distribution of Registrable
Securities in the form attached as Exhibit A, as such may be modified in order
to respond to any comments in respect thereof of the staff of the Commission.
The Company shall undertake to register the Registrable Securities on Form S-3
as soon as such form is available for use by the Company to register the
Registrable Securities for sale in the manner specified in such plan of
distribution (including by filing a post-effective amendment on Form S-3 to the
then existing Shelf Registration Statement), and, to the extent the Company
seeks to register the Registrable Securities on Form S-3 by filing a new Shelf
Registration Statement, the Company shall maintain the effectiveness of the
Shelf Registration Statement then in effect until such time as such Shelf
Registration Statement on Form S-3 has been declared effective by the
Commission.
SECTION 3. PIGGY-BACK RIGHTS.
(a) If the Company proposes to file a Registration Statement (other
than a Registration Statement pursuant to Section 2 or on Form S-4 or S-8
or any successor form) with respect to an offering of New Common Stock
under the Securities Act by the Company for its own account or for the
account of any selling stockholder(s) pursuant to demand registration
rights of such selling stockholder(s) and the registration form to be used
may be used for the registration for resale of Registrable Securities by
Holders, then the Company shall give written notice of such proposed filing
to each of the Holders, which notice shall be delivered as soon as
practicable (but in no event fewer than fifteen (15) Business Days before
the anticipated effective date) and shall describe in reasonable detail the
proposed registration and intended method of distribution and offer such
Holders the opportunity to register the number of Registrable Securities as
each such Holder may request. The Company shall use its reasonable best
efforts to permit the Holders who have requested to participate in the
registration for such offering within ten (10) Business Days of the
delivery of notice provided for in the preceding sentence to
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include such Registrable Securities in such offering on the same terms and
conditions as the securities of the Company or such demand selling
stockholder(s) included therein. Notwithstanding the foregoing, if such
registration involves an underwritten offering and the managing underwriter
(or underwriters) selected by the Company or demand selling stockholder(s)
(the "Company Underwriter") advises the Company and the Participating
Holders in writing that, in its reasonable good faith opinion, the
aggregate amount of Registrable Securities requested to be included in such
offering (including those securities requested by the Company or demand
selling stockholder(s) to be included in such registration) is sufficiently
large so as to have an adverse effect on the success of the offering, then
such registration shall include, first, all securities that the Company
proposed to register for its own account or for the account of such demand
selling stockholder(s), second, all Registrable Securities timely requested
to be registered by the Participating Holders, pro rata among such
Participating Holders (based upon the number of Registrable Securities
which each such Participating Holder requested to be included in such
registration), and third, all other securities proposed to be registered,
in each case, to the extent of the number of securities which the Company
is so advised can be sold in (or during the time of) such offering without
having such adverse effect. If such registration involves an underwritten
offering, the Company shall have the exclusive right to select the
underwriters.
(b) If, at any time after giving written notice of its intention to
register any securities pursuant to this Section 3 and prior to the
effective date of the Registration Statement filed in connection with such
registration, the Company determines for any reason not to register or to
delay registration of such securities, the Company may, at its election,
give written notice of such determination to all Participating Holders of
Registrable Securities and, (i) in the case of a determination not to
register, shall be relieved of its obligation pursuant to this Section 3 to
register the Registrable Securities in connection with such abandoned
registration and, (ii) in the case of a determination to delay
registration, shall be permitted to delay the registration of such
Registrable Securities pursuant to this Section 3 by not more than ninety
(90) days; provided that such right to delay registration shall be
exercised by the Company not more than once in any consecutive twelve (12)
month period.
Any Participating Holder shall have the right to withdraw its request for
inclusion of its Registrable Securities in any Registration Statement pursuant
to this Section 3 by giving written notice to the Company of its request to
withdraw; provided, however, that (i) such request must be made in writing prior
to the earlier of the execution of the underwriting agreement or the execution
of the custody agreement with respect to such registration and (ii) such
withdrawal shall be irrevocable and, after making such withdrawal, such
Participating Holder shall no longer have any right to include Registrable
Securities in such registration.
The Company's obligations to include Registrable Securities of any Holder
in any Registration Statement pursuant to this Section 3 shall terminate on the
Termination Date.
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SECTION 4. REGISTRATION PROCEDURES.
In connection with the obligations of the Company to effect or cause the
registration of any Registrable Securities pursuant to the terms and conditions
of this Registration Rights Agreement, the Company shall use its reasonable best
efforts to effect the registration and sale of such Registrable Securities in
accordance with the intended method of distribution thereof as quickly as
reasonably practicable and in accordance with Sections 2 and 3, and in
connection therewith:
(a) Prior to filing a Registration Statement or Prospectus or any
amendments or supplements thereto, excluding for purposes of this
Section 4(a) documents incorporated by reference after the initial filing
of the Registration Statement, the Company will furnish to the Holders of
the Registrable Securities covered by such Registration Statement (the
"Selling Holders") and Holders' Counsel, draft copies of all such documents
proposed to be filed at least 10 Business Days prior thereto, and not file
any document in a form to which Holders' Counsel reasonably objects.
(b) The Company shall promptly prepare and file with the Commission
such amendments and post-effective amendments to each Registration
Statement as may be necessary to keep such Registration Statement effective
for as long as such registration is required to remain effective pursuant
to the terms hereof; shall cause the Prospectus to be supplemented by any
required Prospectus supplement, and, as so supplemented, to be filed
pursuant to Rule 424 under the Securities Act; and shall comply with the
provisions of the Securities Act applicable to it with respect to the
disposition of all Registrable Securities covered by such Registration
Statement during the applicable period in accordance with the intended
methods of disposition by the Holders set forth in such Registration
Statement or supplement to the Prospectus.
(c) The Company shall, promptly after the preparation thereof,
furnish to any Holder, without charge, such reasonable number of conformed
copies of each Registration Statement and any post-effective amendment
thereto and such number of copies of the Prospectus (including each
preliminary Prospectus) and any amendments or supplements thereto, any
documents incorporated by reference therein and such other documents as
such Holder or underwriter may reasonably request in order to facilitate
the public sale or other disposition of the Registrable Securities being
sold by such Holder.
(d) The Company shall, (i) on or prior to the date on which a
Registration Statement is declared effective, use its reasonable best
efforts to register or qualify the Registrable Securities covered by such
Registration Statement all the securities or "blue sky" laws of all the
states of the United States; (ii) do any and all other acts and things
which may be reasonably necessary to enable such Holder to consummate the
disposition of such Registrable Securities owned by such Holder; and (iii)
use its reasonable best efforts to keep each such registration or
qualification (or exemption therefrom) effective during the period which
the Registration Statement is required to be kept effective in accordance
with the provisions of this Registration Rights Agreement; provided,
however, that the Company shall not be required (x) to qualify generally to
do business in any jurisdiction where it would not otherwise be required to
qualify but for this Section 4(d),
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(y) to file any general consent to service of process or (z) subject itself
to material taxation in any such jurisdiction.
(e) The Company shall cause the Registrable Securities covered by a
Registration Statement to be registered with or approved by such other
governmental agencies or authorities as may be reasonably necessary by
virtue of the business and operations of the Company to enable the Holders
to consummate the disposition of such Registrable Securities.
(f) The Company shall promptly notify each Holder (with respect to
the Shelf Registration) or each Participating Holder (with respect to any
registration pursuant to Section 3) in writing (provided that any such
notice under clauses (ii), (iii), (iv) or (v) of this Section 4(f) shall
only state (x) that such notice is a notice by the Company pursuant to
clause (ii), (iii), (iv) or (v) of this Section 4(f) and (y) the
obligations of Holders in respect thereof pursuant to this Agreement and
shall not contain any other information except as required by law), (i)
when a Prospectus or any Prospectus supplement or post-effective amendment
has been filed and, with respect to a Registration Statement or any
post-effective amendment, when the same has become effective, (ii) of any
request by the Commission or any state securities authority for amendments
and supplements to a Registration Statement and Prospectus or for
additional information after the Registration Statement has become
effective, (iii) of the issuance by the Commission of any stop order
suspending the effectiveness of a Registration Statement or the initiation
of any proceedings for that purpose, (iv) of the issuance by any state
securities commission or other regulatory authority of any order suspending
the qualification or exemption from qualification of any of the Registrable
Securities under state securities or "blue sky" laws or the initiation of
any proceedings for that purpose, and (v) of the happening of any event
which makes any statement made in a Registration Statement or related
Prospectus untrue or which requires the making of any changes in such
Registration Statement or Prospectus so that they 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.
(g) If requested by a Holder, the Company as promptly as practicable
shall: (i) incorporate in a prospectus supplement or post-effective
amendment such information as a Holder requests to be included therein
relating to the sale and distribution of Registrable Securities, including,
without limitation, information with respect to the number of Registrable
Securities being offered or sold, the purchase price being paid therefor,
the persons selling the Registrable Securities and any other terms of the
offering of the Registrable Securities, in each case to the extent (but
only to the extent) such information is required under the Securities Act
to be included in a Prospectus or Registration Statement in respect of a
distribution other than an Underwritten Holder Offering; and (ii) make all
required filings of such prospectus supplement or post-effective amendment
as soon as practicable after having been notified of the matters requested
to be incorporated in such prospectus supplement or post-effective
amendment.
(h) The Company shall make generally available to the Holders an
earnings statement satisfying the provisions of Section 11(a) of the
Securities Act no later than 45
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days (90 days in the event it relates to a fiscal year) after the end of
the 12-month period beginning with the first day of the Company's first
fiscal quarter commencing after the effective date of a Registration
Statement, which earnings statement shall cover said 12-month period, and
which requirement will be deemed to be satisfied if the Company timely
files complete and accurate information on forms 10-Q, 10-K and 8-K under
the Exchange Act and otherwise complies with Rule 158 under the Securities
Act.
(i) The Company shall promptly use its reasonable best efforts to
prevent the issuance of any order suspending the effectiveness of a
Registration Statement, and if one is issued use its reasonable best
efforts to obtain the withdrawal of any order suspending the effectiveness
of a Registration Statement at the earliest possible moment.
(j) The Company shall, as promptly as practicable after filing with
the Commission any document which is incorporated by reference into a
Registration Statement (in the form in which it was incorporated), deliver
a copy of each such document to each of the Holders.
(k) The Company shall cooperate with the Holders to facilitate the
timely preparation and delivery of certificates (which shall not bear any
restrictive legends) representing securities sold under a Registration
Statement, and enable such securities to be in such denominations and
registered in such names as such Holders may reasonably request and keep
available and make available to the Company's transfer agent prior to the
effectiveness of such Registration Statement a supply of such certificates.
(l) For a reasonable period prior to the filing of any Registration
Statement pursuant to this Agreement, the Company shall promptly make
available to each Holder participating in any disposition pursuant to a
Registration Statement, and any attorney, accountant or other agent or
representative retained by any such Holder (collectively, the
"Inspectors"), all financial and other records, pertinent corporate
documents and properties of the Company (collectively, the "Records"), and
cause the Company's officers, directors and employees to supply all
information reasonably requested by any such Inspector in connection with
such Registration Statement as shall be reasonably necessary in each such
case, in the judgment of Holders' Counsel, to conduct a reasonable
investigation within the meaning of the Securities Act; provided that,
unless the disclosure of such Records is necessary to avoid or correct a
misstatement or omission in such Registration Statement or the release of
such Records is ordered pursuant to a subpoena or other order from a court
of competent jurisdiction, the Company shall not be required to provide any
information under this paragraph if (1) the Company believes, after
consultation with counsel for the Company, that to do so would cause the
Company to forfeit an attorney-client privilege that was applicable to such
information or (2) either (i) the Company has requested and been granted
from the Commission confidential treatment of such information contained in
any filing with the Commission or documents provided supplementally or
otherwise or (ii) the Company reasonably determines in good faith that such
Records are confidential and so notifies the Inspectors in writing, unless
prior to furnishing any such information with respect to (i) or (ii) such
Holder of Registrable Securities requesting such information agrees to
enter into a confidentiality agreement in customary form and subject to
customary exceptions
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reasonably acceptable to the Company; and provided, further that each
Holder of Registrable Securities agrees that it will, upon learning that
disclosure of such Records is sought in a court of competent jurisdiction,
give notice to the Company and allow the Company at its expense, to
undertake appropriate action and to prevent disclosure of the Records
deemed confidential.
(m) The Company shall, on or as soon as practicable after the date of
this Agreement, use its reasonable best efforts to cause the Common Shares
to be authorized for quotation and/or listing, as applicable, on either (i)
the National Market System of the NASDAQ Stock Market or (ii) in the event
that the Common Shares are not, following the exercise of reasonable best
efforts by the Company, eligible for listing on the National Market System
of the NASDAQ Stock Market, such other exchange or quotation system for
which the Common Shares are eligible for listing as selected by the
Company.
(n) The Company shall provide a CUSIP number for all Registrable
Securities covered by a Registration Statement not later than the effective
date of such Registration Statement.
(o) The Company shall cooperate with each Holder and each underwriter
participating in the disposition of Registrable Securities and their
respective counsel in connection with any filings required to be made with
the National Association of Securities Dealers, Inc. ("NASD").
(p) The Company shall, during the period when the Prospectus is
required to be delivered under the Securities Act, promptly file all
documents required to be filed with the Commission pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act.
(q) The Company shall appoint a transfer agent and registrar for all
the shares Common Shares covered by a Registration Statement not later than
the effective date of such Registration Statement.
SECTION 5. SUSPENSION PERIOD.
Each Holder, upon receipt of any notice that states (a) that such notice is
a notice by the Company pursuant to clause (i) or (ii) of this Section 5 and (b)
the obligations of Holders in respect thereof pursuant to this Agreement (which
notice shall not contain any other information except as required by law) (a
"Suspension Notice") from the Company requiring such Holder to suspend the
disposition of the Registrable Securities pursuant to the Registration Statement
covering such Registrable Securities, shall forthwith discontinue such
disposition of the Registrable Securities pursuant to the Registration Statement
(i) for any period (limited in duration as specified below) determined by the
Company if the Company would, in the opinion of the Company's counsel, be
required to disclose in such Registration Statement or any Prospectus
information contemplated thereby not otherwise then required to be publicly
disclosed, and in the reasonable judgment of the Board of Directors of the
Company, such disclosure might adversely affect the Company or any material
business transaction or negotiation in which the Company is then engaged, or
(ii) in the event of any happening of the
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kind described in Section 4(f)(ii), (iii), (iv) or (v), until such Holder's
receipt of the copies of the supplemented or amended Prospectus contemplated by
Section 4(f)(i) or until such Holder is advised in writing by the Company that
the use of the Prospectus may be resumed, and has received copies of any
additional or supplemental filings which are incorporated by reference in the
Prospectus, and, if so directed by the Company, such Holder will, or will
request the managing underwriter or underwriters, if any, to, deliver to the
Company (at the Company's expense) all copies, other than permanent file copies
then in such Holder's possession, of the Prospectus covering such Registrable
Securities current at the time of receipt of such notice; provided, however,
that (x) in no event shall any single period during which the disposition of
Registrable Securities is suspended under this Section 5 (the "Suspension
Period") exceed 20 days (in the case of any Suspension Period pursuant to clause
(ii) above) or 45 days (in the case of any Suspension Period pursuant to clause
(i) above), (y) in no event shall the aggregate length of all Suspension Periods
during any period of twelve consecutive months exceed 90 days and (z) there
shall be at least two Trading Days between any two consecutive Suspension
Periods. In the event that the Company shall give any Suspension Notice, (x) in
the case of a Suspension Notice given pursuant to clause (i) above, the Company
shall use its reasonable best efforts and take such actions as are reasonably
necessary to end the Suspension Period as promptly as practicable and (y)
immediately following expiration of the Suspension Period, the Company shall, to
the extent necessary, prepare and file with the Commission and furnish a
supplement or amendment to such Prospectus so that, as thereafter deliverable to
the purchasers of such Registrable Securities, such Prospectus will not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. Notwithstanding anything to the contrary,
the Company shall cause its transfer agent to deliver unlegended shares of New
Common Stock to a transferee of a Holder in connection with any sale of
Registrable Securities under the Registration Statement with respect to which a
Holder has entered into a contract for sale (constituting a "sale" of such
Registrable Securities for purposes of the Securities Act) prior to the Holder's
receipt of the notice of a Suspension Period and for which the Initial Holder
has not yet settled.
SECTION 6. REGISTRATION EXPENSES.
Any and all expenses incident to the Company's performance of or compliance
with this Registration Rights Agreement, including without limitation all
Commission and securities exchange, NASDAQ or NASD registration and filing fees,
all fees and reasonable expenses incurred in connection with compliance with
state securities or "blue sky" laws, printing expenses, messenger and delivery
expenses, internal expenses (including, without limitation, all salaries and
expenses of the Company's officers and employees performing legal or accounting
duties), all reasonable expenses for word processing, printing and distributing
any Registration Statement, any Prospectus, any amendments or supplements
thereto, any underwriting agreements, securities sales agreements and other
documents relating to the performance of and compliance with this Registration
Rights Agreement, the fees and expenses incurred in connection with the listing
of the Registrable Securities, the fees and disbursements of counsel for the
Company and of the independent certified public accountants of the Company
(including the expenses of any special audit or comfort letters) Securities Act
liability insurance (if the Company elects to obtain such insurance), the fees
and expenses of any special experts or other Persons retained by the Company in
connection with any registration, the reasonable fees and
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disbursements of Holders' Counsel (all such expenses being herein called
"Registration Expenses"), will be borne by the Company whether or not the
Registration Statement to which such expenses relate becomes effective;
provided, however, that Registration Expenses shall not include underwriting
fees, discounts or commissions attributable to the sale or disposition of
Registrable Securities.
SECTION 7. INDEMNIFICATION AND CONTRIBUTION.
(a) INDEMNIFICATION BY THE COMPANY. The Company agrees to indemnify
and hold harmless, to the fullest extent permitted by law, each Holder, its
partners, officers, directors, trustees, stockholders, employees, agents
and investment advisers, and each Person who controls such Holder within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act, or is under common control with, or is controlled by, such
Holder, together with the partners, officers, directors, trustees,
stockholders, employees and agents of such controlling Person
(collectively, the "Controlling Persons"), from and against all losses,
claims, damages, liabilities and expenses (including without limitation any
reasonable legal or other fees and expenses actually incurred in connection
with defending or investigating any action or claim in respect thereof)
(collectively, the "Damages") to which such Holder, its partners, officers,
directors, trustees, stockholders, employees, agents and investment
advisers, and any such Controlling Person may become subject under the
Securities Act, insofar as such Damages (or proceedings in respect thereof)
arise out of or are based upon any untrue or alleged untrue statement of
material fact contained in any Registration Statement (or any amendment
thereto) pursuant to which Registrable Securities were registered under the
Securities Act, including all documents incorporated therein by reference,
or caused by any omission or alleged omission to state therein a material
fact necessary to make the statements therein not misleading, or caused by
any untrue statement or alleged untrue statement of a material fact
contained in any Prospectus (as amended or supplemented if the Company
shall have furnished any amendments or supplements thereto), or caused by
any omission or alleged omission to state therein a material fact necessary
to make the statements therein in light of the circumstances under which
they were made not misleading or are based upon any violation or alleged
violation by the Company of the Securities Act, the Exchange Act, any state
securities law or any rule, regulation thereunder ("Securities Law")
relating to the offer or sale of Registrable Securities pursuant to the
Registration Statement, except insofar as (i) such Damages arise out of or
are based upon any such untrue statement or omission based upon information
relating to such Holder furnished in writing to the Company by such Holder
(or by a Person authorized to provide such information on behalf of such
Holder) expressly for use therein, (ii) the Company has advised such Holder
of an event described in Section 4(f)(v) and such Damages are caused solely
by such Holder having sold Registrable Securities notwithstanding such
written notice prior to receipt of a supplemental or amended prospectus
pursuant to Section 5 or (iii) such Damages are caused solely by such
Holder's failure to deliver a copy of the Registration Statement or
Prospectus after the Company has furnished such Holder with a sufficient
number of copies of same in relation to sales effected by such Holder after
such Holder's receipt of such Registration Statement or Prospectus or
before the Company is required to have furnished such Holder with such
Registration Statement or Prospectus pursuant to
11
Section 4; PROVIDED that the Company shall not be liable in any such case
to the extent that any such loss, claim, damage, liability or expense
arises out of or is based upon an untrue statement or omission made in any
preliminary prospectus if (x) such Holder failed to send or deliver a copy
of the Prospectus with or prior to the delivery of written confirmation of
the sale of Registrable Securities, (y) the Prospectus would have
completely corrected such untrue statement or omission and (z) the Company
delivered a copy of such Prospectus to such Holder prior to such written
confirmation of sale; PROVIDED FURTHER that the Company shall not be liable
in any such case to the extent that any such loss, claim, damage, liability
or expense arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission in the Prospectus, if such
untrue statement, omission or alleged omission is completely corrected in
an amendment or supplement to the Prospectus and if, having previously been
furnished by or on behalf of the Company with copies of the Prospectus as
so amended or supplemented, such Holder thereafter sells Registrable
Securities pursuant to the Registration Statement and fails to deliver such
Prospectus as so amended or supplemented, prior to or concurrently with the
sale of a Registrable Security to the Person asserting such Damages who
purchased such Registrable Security from such Holder after such Holder's
receipt of such Prospectus as so amended or supplemented by or on behalf of
the Company. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of the Indemnified
Party and shall survive the transfer of the Registrable Securities by the
Holders pursuant to Section 10(c).
(b) INDEMNIFICATION BY THE HOLDERS. Each Holder agrees, severally and
not jointly, to indemnify and hold harmless to the fullest extent permitted
by law the Company, its directors, officers, stockholders, employees,
agents, attorneys, and investment advisers, 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, or is under common
control with, or is controlled by, the Company, together with its
Controlling Persons, and any underwriter engaged by the Company from and
against all Damages to which the Company and any Controlling Persons may
become subject (i) under the Securities Act insofar as such Damages (or
proceedings in respect thereof) arise out of or are based upon any untrue
or alleged untrue statement of material fact contained in any Registration
Statement (or any amendment thereto) pursuant to which Registrable
Securities were registered under the Securities Act (including all
documents incorporated therein by reference), or caused by any omission or
alleged omission to state therein a material fact necessary to make the
statements therein not misleading, or caused by any untrue statement or
alleged untrue statement of a material fact contained in any Prospectus (as
amended or supplemented if the Company shall have furnished any amendments
or supplements thereto), or caused by any omission or alleged omission to
state therein a material fact necessary to make the statements therein in
light of the circumstances under which they were made not misleading, to
the extent, but only to the extent that such Damages arise out of or are
based upon any such untrue statement or alleged untrue statement or
omission or alleged omission based upon information relating to such Holder
furnished in writing to the Company by such Holder (or by a Person
authorized to provide such information on behalf of such Holder) expressly
for inclusion therein and in conformity therewith or (ii) under any
Securities Law insofar as such Damages (or proceedings in respect thereof)
are based upon any violation or alleged
12
violation by such Holder of any Securities Law relating to the offer or
sale of Registrable Securities pursuant to the Registration Statement,
provided, however, that any Holder shall be liable under this Section 7(b)
for only that amount of Damages as does not exceed the net proceeds to such
Holder as a result of the sale of Registrable Securities pursuant to such
Registration Statement. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of such
Indemnified Party and shall survive the transfer of the Registrable
Securities by the Holder pursuant to Section 10(c).
(c) INDEMNIFICATION PROCEDURES. In case any proceeding (including any
governmental investigation) shall be instituted involving any Person in
respect of which indemnity may be sought pursuant to either paragraph (a)
or (b) above, such Person (the "Indemnified Party") shall promptly notify
the Person against whom such indemnity may be sought (the "Indemnifying
Party") in writing; PROVIDED, HOWEVER, that the failure so to notify the
Indemnifying Party shall not relieve the Indemnifying Party of any
liability that it may have to the Indemnified Party pursuant to this
Section 7 unless such Indemnifying Party is materially prejudiced by such
failure. The Indemnifying Party shall retain counsel reasonably
satisfactory to the Indemnified Party to represent the Indemnified Party
and any others the Indemnifying Party may designate in such proceedings and
shall pay the reasonable fees and disbursements of such counsel relating to
such proceeding. In any such proceeding, any Indemnified Party shall have
the right to retain its own counsel, but the fees and expenses of such
counsel shall be at the expense of such Indemnified Party unless (i) the
Indemnifying Party and the Indemnified Party shall have mutually agreed to
the retention of such counsel, or (ii) the Indemnifying Party fails
promptly to assume the defense of such proceeding or fails to employ
counsel reasonably satisfactory to such Indemnified Party or parties and
such failure is not due to the failure of the Indemnified Party to provide
the notice required in this Section 6(c), or (iii) (A) the named parties to
any such proceeding (including any impleaded parties) include both such
Indemnified Party or parties and any Indemnifying Party or an Affiliate of
such Indemnified Party or parties or of any Indemnifying Party, (B) there
may be one or more legal defenses available to such Indemnified Party or
parties or such Affiliate of such Indemnified Party or parties that are
different from or additional to those available to any Indemnifying Party
or such Affiliate of any Indemnifying Party and (C) such Indemnified Party
or parties shall have been advised by such counsel that there may exist a
legal or ethical conflict of interest between or among such Indemnified
Party or parties or such Affiliate of such Indemnified Party or parties and
any Indemnifying Party or such Affiliate of any Indemnifying Party, in
which case, if such Indemnified Party or parties notifies the Indemnifying
Party or parties in writing that it elects to employ separate counsel of
its choice at the reasonable expense of the indemnifying parties, the
indemnifying parties shall not have the right to assume the defense thereof
and such counsel shall be at the reasonable expense of the indemnifying
parties, it being understood, however, that the indemnifying parties shall
not, in connection with any one such proceeding or separate but
substantially similar or related proceedings in the same jurisdiction,
arising out of the same general allegations or circumstances, be liable for
the fees and expenses of more than one separate firm of attorneys at any
time for all such Indemnified Party or parties. The Indemnifying Party
shall not be liable for indemnification under Section 7(a) or (b) or
contribution under
13
Section 7(d) for any settlement of any proceeding effected without its
written consent (which will not be unreasonably withheld). No Indemnifying
Party shall, without the prior written consent (which will not be
unreasonably withheld) of the Indemnified Party, effect any settlement of
any pending or threatened proceeding in respect of which such Indemnified
Party is a party, and indemnity could have been sought hereunder by such
Indemnified Party, unless such settlement includes an unconditional release
of such Indemnified Party from all liability on claims that are the subject
matter of such proceeding.
(d) CONTRIBUTION. To the extent that the indemnification provided for
in paragraph (a) or (b) of this Section 7 is unavailable to an Indemnified
Party or insufficient in respect of any Damages, then each Indemnifying
Party under such paragraph, in lieu of indemnifying such Indemnified Party
thereunder, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such Damages in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party and the
Indemnified Party on the other hand in connection with the statements or
omissions that resulted in such Damages, as well as any other relevant
equitable considerations. The relative fault of the Indemnifying Party and
the Indemnified Party shall 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 Indemnified Party or Indemnifying Party and
the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
Notwithstanding the provisions of Section 7(d), no Holder shall be required
to contribute any amount in excess of the amount by which the total price at
which the Registrable Securities of such Holder were sold by such Holder
pursuant to the Registration Statement to the public exceeds the amount of any
damages which such Holder has otherwise been required to pay by reason of such
untrue statement or omission. Each Holder's obligation to contribute pursuant to
Section 7(d) is several in the proportion that the proceeds of the offering
received by such Holder bears to the total proceeds of the offering received by
all the Holders and not joint.
If indemnification is available under paragraph (a) or (b) of this
Section 7, the indemnifying parties shall indemnify each Indemnified Party to
the full extent provided in such paragraphs without regard to the relative fault
of said Indemnifying Party or Indemnified Party or any other equitable
consideration provided for in Section 7(d).
The Company and each Holder agrees that it would not be just or equitable
if contribution pursuant to Section 7(d) were determined by pro rata allocation
or by any other method of allocation that does not take account of the equitable
considerations referred to herein. The amount paid or payable by an Indemnified
Party as a result of the Damages referred to in this Section 7 shall be deemed
to include, subject to the limitations set forth above, any reasonable legal or
other expenses incurred (and not otherwise reimbursed) by such Indemnified Party
in connection with investigating or defending any such action or claim. No
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The remedies
provided for in this Section 7 are not exclusive and shall not
14
limit any rights or remedies which may otherwise be available to any Indemnified
Party at law or in equity.
SECTION 8. RULE 144.
The Company covenants that it will (i) file in a timely manner any reports
required to be filed by it under the Securities Act and the Exchange Act (or, if
the Company is not required to file such reports, it will, upon the request of
any Holder, make publicly available other information so long as necessary to
permit sales under Rule 144 under the Securities Act), and (ii) take such
further action as any Holder may reasonably request, all to the extent required
from time to time to enable such Holder to sell Registrable Securities without
registration under the Securities Act within the limitation of the exemptions
provided by (a) Rule 144 under the Securities Act, as such Rules may be amended
from time to time, or (b) any similar rule or regulation hereafter adopted by
the Commission. Upon the request of any Holder, the Company will deliver to such
Holder a written statement as to whether it has complied with such requirements.
SECTION 9. CERTAIN LIMITATIONS ON REGISTRATION RIGHTS.
(a) In the case of a registration under Section 3, no Holder may
participate in such registration unless (i) such Holder agrees to sell such
Holder's Registrable Securities on the basis provided therein and (ii) if
the Company has determined to enter into an underwriting agreement in
connection therewith, such Holder (x) completes and executes all
questionnaires, powers-of-attorney, custody agreements, indemnities,
lock-up agreements, underwriting agreements and other documents required
under the terms of such underwriting agreement and (y) agrees to comply
with Regulation M under the Exchange Act.
(b) The Company may require each Holder of Registrable Securities to
furnish to the Company such information regarding the Holder of such
securities, the securities of the Company held by such Holder, the manner
of acquisition of such securities, each as required by the rules and
regulations of the Commission, and any other information required by the
rules and regulations of the Commission, as the Company may from time to
time reasonably request in writing. Without limitation of the forgoing,
within 10 Business Days after written request by the Company, any Holder
desiring to have Registrable Securities beneficially owned by such Holder
included in a Registration Statement shall provide the Company in writing
with the information applicable to such Holder required to be included in
the such Registration Statement pursuant to Rule 507 of Regulation S-K.
(c) For avoidance of doubt, any distribution of Registrable
Securities pursuant to the Shelf Registration Statement shall be effected
other than through an Underwritten Holder Offering; and the Company shall
have no obligation to enter into any underwriting or other agreement with
any Holder or broker dealer or agent therefor in respect of any disposition
of Registrable Securities pursuant to the Shelf Registration Statement.
15
SECTION 10. [Reserved]
SECTION 11. MISCELLANEOUS.
(a) AMENDMENTS AND WAIVERS. The provisions of this Registration
Rights Agreement, including the provisions of this sentence, may not be
amended, modified or supplemented, and waivers or consents to departures
from the provisions hereof may not be given without the written consent of
the Company and the Holders of a majority in interest of the Registrable
Securities then outstanding.
(b) NOTICES. Any notices, consents waivers or other communications
required or permitted to be given under the terms of this agreement must be
in writing and will be deemed to have been delivered: (i) upon receipt,
when delivered personally; (ii) upon receipt, when sent by facsimile
(provided confirmation of transmission is mechanically or electronically
generated and kept on file by the sending party); or (iii) one business day
after deposit with an overnight courier service, in each case properly
addressed to the party to receive the same. The addresses and facsimile
numbers for such communications shall be:
If to the Company, to:
Metals USA, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇.▇▇▇.▇▇▇▇
Facsimile: 713.513.4883
Attention: General Counsel
With a copy to:
Akin Gump ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇.▇▇▇.▇▇▇▇
Facsimile: 713.236.0822
Attention: ▇▇▇▇▇▇ ▇. "Chip" Cowell III, Esq.
If to a Holder, to its address and facsimile number set forth on the
signature page attached hereto, or to such other address and/or facsimile number
and/or to the attention of such other person as the recipient party has
specified by written notice given to each other party five days prior to the
effectiveness of such change. Written confirmation of receipt (A) given by the
recipient of such notice, consent, waiver or other communication, (B)
mechanically or electronically generated by the sender's facsimile machine
containing the time, date, recipient facsimile number and an image of the first
page of such transmission or (C) provided by an overnight courier service shall
be rebuttable evidence of personal service, receipt by facsimile or receipt from
an overnight courier service in accordance with clause (i), (ii) or (iii) above,
respectively.
16
(c) SUCCESSORS AND ASSIGNS; ASSIGNMENT. This Registration Rights
Agreement shall inure to the benefit of and be binding upon the Holders
from time to time of Registrable Securities and the Company and its
successors and assigns. The rights under this agreement with respect to
Registrable Securities shall be automatically assignable by the Holders to
any transferee of all or any portion of Registrable Securities if: (i) the
transferee or assignee executes and delivers to the Company an addendum
hereto in the form of Annex A hereto; (ii) the Company is, within a
reasonable time after such transfer or assignment, furnished with written
notice of (a) the name and address of such transferee or assignee, and (b)
the securities with respect to which such registration rights are being
transferred or assigned; and (iii) immediately following such transfer or
assignment such securities continue to constitute Registrable Securities
hereunder.
(d) HEADINGS. The headings in this Registration Rights Agreement are
for convenience of reference only and shall not limit or otherwise affect
the meaning hereof.
(e) GOVERNING LAW. This Registration Rights Agreement shall be
governed by and construed in accordance with the laws of the State of New
York without regard to principles of conflicts of law.
(f) SEVERABILITY. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions contained herein shall not be in
any way impaired thereby, it being intended that all of the rights and
privileges of the Holders shall be enforceable to the fullest extent
permitted by law.
(g) REMEDIES. In the event of a breach or a threatened breach by the
Company of its obligations under this Registration Rights Agreement, any
party injured or to be injured by such breach will be entitled to specific
performance of its rights under this Registration Rights Agreement or to
injunctive relief, in addition to being entitled to exercise all rights
granted by law. The parties agree that the provisions of this Registration
Rights Agreement shall be specifically enforceable, it being agreed by the
parties that the remedy at law, including monetary damages, is inadequate
and that any objection in any action for specific performance or injunctive
relief that a remedy at law would be adequate is waived.
(h) INCONSISTENT INSTRUCTIONS. If the Company receives conflicting
instructions, notices or elections from two or more Persons with respect to
the same Registrable Securities, the Company may act upon the basis of the
instructions, notice or election received from the registered owner of such
Registrable Securities.
(i) REGISTRATION RIGHTS TO OTHERS. Nothing herein shall prohibit or
limit the Company from entering into an agreement providing holders of
securities which may hereafter be issued by the Company with such
registration rights exercisable at such time or times and in such manner as
the Board of Directors of the Company shall deem in the best interests of
the Company so long as the performance by the Company of
17
its obligations under such other agreement will not cause the Company to
breach its obligations to the Holders hereunder.
(j) TERMINATION. This Agreement (except for the indemnification and
contribution rights and obligations as provided in Section 7 which shall
survive forever) shall terminate upon the earliest of (i) the written
agreement of the Company and all Holders of Registrable Securities at such
time, (ii) the date upon which there are no Registrable Securities
outstanding and (iii) the Termination Date.
(k) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement. This agreement,
once executed by a party, may be delivered to the other party hereto by
facsimile transmission of a copy of this agreement bearing the signature of
the party so delivering this agreement.
(l) RULES OF CONSTRUCTION. Unless the context otherwise requires,
"or" is not exclusive, and references to sections or subsections refer to
sections or subsections of this Agreement.
(m) ENTIRE AGREEMENT. This Agreement is intended by the parties as a
final expression of their agreement and intended to be a complete and
exclusive statement of the agreement and understanding of the parties
hereto in respect of the subject matter contained herein. There are no
restrictions, promises, warranties or undertakings in respect of the
subject matter contained herein other than those set forth or referred to
herein. This Agreement supersedes all prior oral and written agreements and
understandings between the parties with respect to such subject matter.
(n) INTERPRETATION. This Agreement is the result of arms-length
negotiations between the parties hereto and has been prepared jointly by
the parties. In applying and interpreting the provisions of this Agreement,
there shall be no presumption that the Agreement was prepared by any one
party or that the Agreement should be construed in favor of or against any
one party.
(o) NO THIRD PARTY BENEFICIARIES. This Agreement is for the benefit
of the parties hereto and any beneficial owner of Registrable Securities
who agrees to become bound by the terms hereof and become a Holder for the
purposes of this Agreement, and is not intended to confer upon any other
Person any rights or remedies.
(p) STATUS. Each Initial Holder by executing this Agreement
represents and warrants to the Company that such Initial Holder together
with its Affiliates, directly or indirectly, beneficially owns in excess of
ten percent (10%) of the issued and outstanding shares of New Common Stock
on the Effective Date.
18
IN WITNESS WHEREOF, the parties hereto have executed this Registration
Rights Agreement as of October 31, 2002.
METALS USA, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Sr. Vice President & Secretary
INITIAL HOLDERS:
CITADEL EQUITY FUND LTD.
By: Citadel Limited Partnership
Its: Portfolio Manager
By: GLB Partners, L.P.
Its: General Partner
By: Citadel Investment Group, L.L.C.
Its: General Partner
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Senior Managing Director
and General Counsel
CITADEL DISTRESSED OPPORTUNITY AND
CREDIT FUND LTD.
By: Citadel Limited Partnership
Its: Portfolio Manager
By: GLB Partners, L.P.
Its: General Partner
By: Citadel Investment Group, L.L.C.
Its: General Partner
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Senior Managing Director and
General Counsel
19
With a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: 312-902-1061
Attention: ▇▇▇▇▇▇ ▇. Brantmann, Esq.
20
Annex A
The undersigned is a beneficial owner of Registrable Securities under and
as defined in, and hereby agrees to become a Holder under and subject to the
terms and provisions of, that certain Registration Rights Agreement, dated as of
________ __, 2002, by and among Metals USA, Inc. and the Holders named therein.
[NAME OF HOLDER]
By:
---------------------------------
Name:
---------------------------------
Title:
---------------------------------
Address:
---------------------------------
---------------------------------
Facsimile No.:
---------------------------
21