AMENDED AND RESTATED EQUITYHOLDERS AGREEMENT
DATED AS OF AUGUST 13, 1999
AMONG
BLACKSTONE CAPITAL PARTNERS II MERCHANT BANKING FUND L.P.,
BLACKSTONE OFFSHORE CAPITAL PARTNERS II L.P.,
BLACKSTONE FAMILY INVESTMENT PARTNERSHIP II L.P.,
THE VERITAS CAPITAL FUND, L.P.,
VERITAS CAPITAL, L.L.C.,
KDJ, L.L.C.,
BRW STEEL HOLDINGS, L.P.,
BRW STEEL HOLDINGS II, L.P.,
BRW STEEL OFFSHORE HOLDINGS, L.P.,
REPUBLIC TECHNOLOGIES INTERNATIONAL, INC.,
RES HOLDING CORPORATION,
REPUBLIC TECHNOLOGIES INTERNATIONAL HOLDINGS, LLC
USX CORPORATION,
USX RTI HOLDINGS, INC.,
KOBE DELAWARE INC.,
KOBE STEEL, LTD.,
KOBE RTI HOLDINGS, INC.,
HVR HOLDINGS, L.L.C.,
SUMITOMO CORPORATION OF AMERICA,
FIRSTENERGY SERVICES CORP.,
TRIUMPH CAPITAL INVESTORS II, L.P.,
TCI-II INVESTORS, L.P.,
FIRST DOMINION CAPITAL L.L.C.,
TCW LEVERAGED INCOME TRUST, L.P.,
TCW LEVERAGED INCOME TRUST II, L.P.,
TCW SHARED OPPORTUNITY FUND II, L.P.
SHARED OPPORTUNITY FUND IIB, L.L.C.,
SHARED OPPORTUNITY FUND III, L.L.C.
AND
THE OTHER EQUITYHOLDERS NAMED HEREIN
EQUITYHOLDERS AGREEMENT
TABLE OF CONTENTS
Page
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SECTION 1
DEFINITIONS..............................................................................................4
1.1 Defined Terms...............................................................................4
1.2 Other Definitions..........................................................................10
1.3 Other Definitional Provisions; Interpretation..............................................12
SECTION 2
GOVERNANCE..............................................................................................12
2.1 Board of Directors.........................................................................12
2.2 Fundamental Issues.........................................................................15
SECTION 3
TRANSFERS...............................................................................................21
3.1 Limitations on Transfer....................................................................21
3.2 Transfers to Affiliates and Among Equityholders; Termination of Lockup
Period.....................................................................................22
3.3 Effect of Void Transfers...................................................................26
3.4 Legend on Securities.......................................................................26
3.5 Tag-Along Rights...........................................................................26
3.6 Drag-Along Rights..........................................................................29
3.7 Piggyback Rights...........................................................................31
3.8 Demand Registration........................................................................33
3.9 Other Registration-Related Matters.........................................................38
3.10 Indemnification............................................................................43
3.11 Preemptive Rights..........................................................................46
SECTION 4
USX AND KOBE EXCHANGE EVENTS; RTI HOLDINGS UNIT
ADJUSTMENTS.............................................................................................47
4.1 USX Exchange Events and Kobe Exchange Events...............................................47
4.2 RTI Holdings Unit Adjustments Upon Issuances of Common Stock...............................50
SECTION 5
OTHER...................................................................................................51
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Page
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5.1 Additional Securities Subject to Agreement.................................................51
5.2 Termination................................................................................51
5.3 Injunctive Relief..........................................................................52
5.4 Other Equityholders Agreements.............................................................52
5.5 Amendments.................................................................................52
5.6 Successors, Assigns and Transferees........................................................53
5.7 Notices....................................................................................53
5.8 Integration................................................................................57
5.9 Severability...............................................................................57
5.10 Counterparts...............................................................................58
5.11 Governing Law; Submission to Jurisdiction..................................................58
5.12 Miscellaneous..............................................................................58
EXHIBITS
A Certificate of Incorporation
B Exchange Merger Agreement
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AMENDED AND RESTATED EQUITYHOLDERS AGREEMENT
This Amended and Restated Equityholders Agreement, dated as of August
13, 1999, is by and among Blackstone Capital Partners II Merchant Banking Fund
L.P., a Delaware limited partnership ("BCPII"), Blackstone Offshore Capital
Partners II L.P., a Cayman Islands exempted limited partnership, and Blackstone
Family Investment Partnership II L.P., a Delaware limited partnership
(collectively, together with their Permitted Transferees (as defined below), the
"Blackstone Investors"); BRW Steel Holdings, L.P., a Delaware limited
partnership ("Holdings"), and BRW Steel Offshore Holdings, L.P., a Delaware
limited partnership ("Offshore Holdings"; together with Holdings, the
"Partnerships"); BRW Steel Holdings II, L.P., a Delaware limited liability
Company, Veritas Capital, L.L.C., a Delaware limited liability company, The
Veritas Capital Fund, L.P., a Delaware limited partnership ("Veritas Capital"),
KDJ, L.L.C., a Delaware limited liability company, and HVR Holdings, L.L.C., a
Delaware limited liability company (collectively, together with their Permitted
Transferees, the "Veritas Investors"); USX RTI Holdings, Inc., a Delaware
corporation ("USX RTI Holdings" and, together with its Permitted Transferees,
the "USX Investors"), and USX Corporation, a Delaware corporation ("USX" and,
collectively with the USX Investors, the "USX Parties"); Kobe RTI Holdings,
Inc., a Delaware corporation ("Kobe RTI Holdings" and, together with its
Permitted Transferees, the "Kobe Investors"), Kobe Steel, Ltd., a Japanese
corporation ("Kobe"), Kobe Delaware Inc. ("Kobe Delaware" and, collectively with
Kobe and the Kobe Investors, the "Kobe Parties"); Republic Technologies
International, Inc., a Delaware corporation formerly known as Bar Technologies
Inc. (the "Company"); RES Holding Corporation, a Delaware corporation ("RES
Holding"); Republic Technologies International Holdings, LLC, a Delaware limited
liability company ("RTI Holdings" and, collectively with the Company and RES
Holding, the "Company Parties"), FirstEnergy Services Corp., an Ohio corporation
("FirstEnergy" and, together with its Permitted Transferees, the "FirstEnergy
Investors"), Sumitomo Corporation of America, a New York corporation ("Sumitomo
Corporation" and, together with its Permitted Transferees, the "Sumitomo
Investors"), Triumph Capital Investors II, L.P., a Delaware limited partnership
("Triumph"), TCI-II Investors, L.P., a Delaware limited partnership ("TCI-II"
and, together with Triumph and their respective Permitted Transferees, the
"Triumph Investors"), First Dominion Capital L.L.C., a Delaware limited
liability company ("First Dominion" and, together with its Permitted
Transferees, the "First Dominion Investors"), TCW Leveraged Income Trust, L.P.,
a Delaware limited partnership ("TCWLIT"), TCW Leveraged Income Trust II, L.P.,
a Delaware limited partnership ("TCWLITII"), TCW Shared Opportunity Fund II,
L.P., a Delaware limited partnership ("TCWSOFII"), Shared Opportunity Fund IIB,
L.L.C., a Delaware limited liability company ("SOFIIB"), Shared Opportunity Fund
III, L.P., a Delaware limited liability company ("SOFIII" and, together with
TCWLIT, TCWLITII, TCWSOFII, SOFIIB and their respective Permitted Transferees,
the "TCW Investors"), and the Management Stockholders (as defined below).
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BACKGROUND
Immediately prior to consummation of the transactions
contemplated by the Master Restructuring Agreement, dated as of August 13, 1999
among the Company and the other parties named therein (the "Master Restructuring
Agreement"), the Blackstone Investors in the aggregate owned 393,701 shares of
Non-Voting Class C Common Stock, par value $0.001 per share, of the Company (the
"Class C Common Stock"). The Veritas Investors (other than Veritas Capital and
HVR Holdings, L.L.C.) in the aggregate owned 143,164 shares of Class C
Non-Voting Common Stock, and the Partnerships in the aggregate owned (i) 196,410
shares of Class A Common Stock, par value $.001 per share, of the Company (the
"Class A Common Stock") and (ii) 536,829 shares of Special Class B Common Stock,
par value $.001 per share, of the Company (the "Class B Common Stock" and,
together with the Class A Common Stock, Class C Common Stock, Class D Common
Stock (as defined below) and all other classes of common stock of the Company,
the "Common Stock"). Capitalized terms used herein and not otherwise defined
herein will have the meanings given to them in the Master Restructuring
Agreement.
In connection with the transactions contemplated by the Master
Restructuring Agreement, as of the date hereof the Company's Certificate of
Incorporation is being amended and restated, among other purposes, to (i)
increase the number of authorized shares of Class C Common Stock and give such
class voting rights, (ii) create a new Class D Common Stock that is identical to
the other classes of Common Stock of the Company except that it is not subject
to the special preference of the Class B Common Stock, (iii) remove the special
category of Class B Directors and related provisions, (iv) reduce to one the
number of directors elected by the Series B Preferred Stock of the Company (the
"Series B Preferred Stock"), (v) change the Company's name from Bar Technologies
Inc. to Republic Technologies International, Inc., and (vi) create a new Series
C Convertible Preferred Stock. The Company's amended and restated Certificate of
Incorporation as of the Closing Date is attached as Exhibit A hereto.
In accordance with the Master Restructuring Agreement, as of
the date hereof a newly-formed Subsidiary of the Company is merging with and
into RES Holding, with RES Holding being the surviving corporation, as a result
of which the shares in RES Holding held by the Blackstone Investors and the
Veritas Investors are being converted into 1,708,150 shares of Class D Common
Stock (as defined below) in the aggregate.
Also in accordance with the Master Restructuring Agreement, as
of the date hereof Kobe/Lorain, Inc., an Ohio corporation that is an indirect
Subsidiary of Kobe, and USS Lorain Holding Company, Inc., an Ohio corporation
that is a direct wholly owned Subsidiary of USX, which are the general partners
of USS/Kobe Steel Company, an Ohio general partnership ("USS/Kobe"), are merging
with and into RTI Opco, an indirect Subsidiary of the Company, with such
Subsidiary being the survivor, and are making certain capital contributions to
RTI Holdings as provided in the Master Restructuring Agreement, as a result of
which USX RTI Holdings is receiving RTI Holdings Common Units (as defined below)
representing 15.568073% of the RTI Holdings Common Units outstanding on the date
hereof and Kobe RTI Holdings is
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receiving RTI Holdings Common Units representing 14.198775% of the RTI Holdings
Common Units outstanding on the date hereof, with the Company and RES Holding
together holding RTI Holdings Common Units representing the remaining 70.233151%
of the RTI Holdings Common Units outstanding on the date hereof. At any time
after the Closing the USX Investors and the Kobe Investors may (and in certain
circumstances will be required to) exchange their respective RTI Holdings Common
Units for (i) that number of shares of Class D Common Stock, par value $.001 per
share, of the Company ("Class D Common Stock") that would represent an interest
in the Company equal to such membership interest in RTI Holdings at the time of
such exchange and (ii) certain Antidilution Warrants on the terms described
herein.
Also in accordance with the Master Restructuring Agreement, as
of the date hereof the Blackstone Investors are purchasing from the Company for
cash an aggregate of 894,745 shares of Class D Common Stock and the Veritas
Investors are purchasing from the Company for cash an aggregate of 322,108
shares of Class D Common Stock.
In accordance with the Subscription Agreement, dated as of
August 10, 1999, among the Company, FirstEnergy, Sumitomo, Triumph, TCI-II,
First Dominion, TCWLIT, TCWLITII, TCWSOFII, SOFIIB and SOFIII, as of the date
hereof FirstEnergy is purchasing from the Company for cash 30,000 shares of
Series C Preferred Stock, Sumitomo is purchasing from the Company for cash
53,684.7 shares of Class D Common Stock, Triumph and TCI-II are purchasing from
the Company for cash an aggregate of 87,685 shares of Class D Common Stock,
First Dominion is purchasing from the Company for cash 35,789.8 shares of Class
D Common Stock and TCWLIT, TCWLITII, TCWSOFII, SOFIIB and SOFIII are purchasing
from the Company for cash an aggregate of 89,474.5 shares of Class D Common
Stock. In accordance with a separate subscription agreement, dated as of August
13, 1999, among BarTech, Chase Securities Inc., Xxxxxxxxx Xxxxxx & Xxxxxxxx
Securities Corporation and BancBoston Xxxxxxxxx Xxxxxxxx Inc. as of the date
hereof Chase Securities Inc., Xxxxxxxxx Xxxxxx & Xxxxxxxx Securities Corporation
and BancBoston Xxxxxxxxx Xxxxxxxx Inc. are purchasing from the Company for cash
an aggregate of 65,892 BarTech Financing Warrants at a purchase price of
$108.13137 per BarTech Financing Warrant (in addition to the BarTech Financing
Warrants being issued in connection with the RTI High Yield Offering).
It is anticipated that the Management Stockholders will be
granted certain options to acquire Class D Common Stock of the Company following
the consummation of the transactions contemplated by the Master Restructuring
Agreement, and as a condition to such grants will become parties to this
Agreement.
The parties hereto wish to enter into the arrangements
described below regarding the holdings by the Blackstone Investors, the
Partnerships, the Veritas Investors, the Sumitomo Investors, the Triumph
Investors, the First Dominion Investors, the TCW Investors and the Management
Stockholders of Common Stock (and options and warrants to acquire Common Stock),
the holdings by the FirstEnergy Investors of Series C Preferred Stock prior to
the conversion thereof into Common Stock and Common Stock following the
conversion thereof (and options and warrants to acquire Common Stock), the
holdings by the USX Investors of RTI Holdings Common Units prior to a USX
Exchange Event and Common Stock (and options and
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warrants to acquire Common Stock) following a USX Exchange Event, and the
holdings by the Kobe Investors of RTI Holdings Common Units prior to a Kobe
Exchange Event and Common Stock (and options and warrants to acquire Common
Stock) following a Kobe Exchange Event.
Each Blackstone Investor, each Veritas Investor, each USX
Investor, each Kobe Investor, each Sumitomo Investor, each FirstEnergy Investor,
each Triumph Investor, each TCW Investor and each First Dominion Investor is
entering into this Agreement on its own account and not as a partner, agent,
trustee or Affiliate of any other investor.
This Agreement amends and restates the existing Stockholders'
Agreement among the Company and various of its stockholders, dated as of April
2, 1996 and as previously amended and restated as of September 9, 1997, and sets
forth certain agreements of the parties hereto with respect to the governance of
the Company, RTI Holdings and RTI Opco and the other matters described in this
Agreement. The parties agree that this Agreement supersedes in all respects the
April 2, 1996 Agreement and the September 9, 1997 Agreement, which shall cease
to have any force and effect.
SECTION 1
DEFINITIONS
For purposes of this Agreement, the following terms have the meanings
specified or referred to in this Section 1:
1.1 Defined Terms. As used in this Agreement:
"Affiliate" - with respect to any Person, (i) any Person that directly
or indirectly controls, is controlled by or is under common control with, such
Person, (ii) any director, officer, partner or employee of such Person or of any
Person specified in clause (i) above or (iii) in the case of any Management
Stockholder, any member of his or her immediate family or his or her lineal
descendants or any trust established for the sole benefit of such Management
Stockholder and/or one or more such family members or lineal descendants or
entity wholly owned by such family members or lineal descendants; provided, that
officers, directors or employees of the Company and its Subsidiaries will not be
deemed to be Affiliates of an Equityholder for purposes hereof solely by reason
of being officers, directors or employees of the Company or any of its
Subsidiaries.
"Agreement" - this Equityholders Agreement and the Exhibits hereto, as
the same may be amended, supplemented or otherwise modified from time to time.
"Antidilution Warrant" - individually, a warrant to purchase a share of
Class D Common Stock, and collectively, 180,000 warrants to purchase 180,000
shares of Class D Common Stock (adjusted for any stock splits, reverse splits or
other events giving rise to antidilution adjustments under the BarTech 1996
Warrants and the BarTech Financing Warrants
5
occurring after the Closing Date), that will be issued by the Company to the USX
Investors or the Kobe Investors, as applicable, upon a USX Exchange Event or a
Kobe Exchange Event, each of which warrants (i) has an exercise price of $.01
per share of Class D Common Stock (which exercise price is paid automatically
upon exercise through the reduction of the number of shares of Common Stock
received pursuant thereto by operation of a customary "cashless exercise"
provision) and (ii) will be exercised as provided in the following sentence;
provided, however, that (A) if a BarTech 1996 Warrant expires or otherwise
terminates without having been exercised, the aggregate number of outstanding
Antidilution Warrants and Antidilution Warrants which remain unissued out of the
original 180,000 Antidilution Warrants will be reduced by a total of .42857
warrants (with outstanding Antidilution Warrants automatically being canceled
(proportionately among the holders thereof, if more than one), and the number of
remaining unissued Antidilution Warrants automatically being reduced,
proportionally based upon the respective number of outstanding Antidilution
Warrants and unissued Antidilution Warrants at that time), (B) if a BarTech
Financing Warrant expires or otherwise terminates without having been exercised,
the aggregate number of outstanding Antidilution Warrants and Antidilution
Warrants which remain unissued out of the original 180,000 Antidilution Warrants
will be reduced by a total of .14816 (with outstanding Antidilution Warrants
automatically being canceled (proportionately among the holders thereof, if more
than one), and the number of remaining unissued Antidilution Warrants
automatically being reduced, proportionally based upon the respective number of
outstanding Antidilution Warrants and unissued Antidilution Warrants at that
time). Upon the exercise of BarTech 1996 Warrants or BarTech Financing Warrants,
(a) if both a USX Exchange Event and a Kobe Exchange Event previously have
occurred and Antidilution Warrants then remain issued and outstanding, one
outstanding Antidilution Warrant will be exercised (proportionately among the
holders of outstanding Antidilution Warrants) unconditionally and automatically
by its terms (with no action being required on the part of the holder thereof)
with respect to the exercise of 2.333341 BarTech 1996 Warrants or 6.74946
BarTech Financing Warrants, as applicable, (b) if either a USX Exchange Event or
a Kobe Exchange Event, but not both, previously has occurred, (i) if
Antidilution Warrants then remain issued and outstanding, a fraction of one
outstanding Antidilution Warrant will be exercised (proportionately among the
holders of outstanding Antidilution Warrants) unconditionally and automatically
by its terms (with no action being required on the part of the holder thereof)
with respect to the exercise of 2.333341 BarTech 1996 Warrants or 6.74946
BarTech Financing Warrants, as applicable, with the numerator of such fraction
being the number of RTI Holdings Common Units that were owned immediately prior
to such Exchange Event by USX RTI Holdings (if it was a USX Exchange Event) or
Kobe RTI Holdings (if it was a Kobe Exchange Event) and the denominator of which
is the number of RTI Holdings Common Units owned by USX RTI Holdings and Kobe
RTI Holdings in the aggregate immediately prior to such Exchange Event and (ii)
if Antidilution Warrants remain unissued, a fraction of one unissued
Antidilution Warrant automatically will be eliminated, with such fraction being
equal to 1 minus the fraction described in the immediately preceding clause (i),
and (c) if neither a USX Exchange Event nor a Kobe Exchange Event previously
have occurred and Antidilution Warrants remain unissued, one unissued
Antidilution Warrant automatically will be eliminated with respect to the
exercise of 2.333341 BarTech 1996 Warrants or 6.74946 BarTech Financing
Warrants, as applicable.
6
"BarTech Financing Warrants" - has the meaning given to such term in
the Master Restructuring Agreement.
"BarTech 1996 Warrants" - 91,609 warrants to purchase shares of Class A
Common Stock of the Company issued in connection with a previous financing of
the Company.
"Beneficial Owner" or "beneficial owner" (including, with correlative
meanings, the terms "beneficial ownership" and "beneficially owns") has the
meaning attributed to it in Rules 13d-3 and 13d-5 under the Exchange Act,
whether or not applicable, except that a "person" (as such term is used in
Sections 13(d)(3) of the Exchange Act) shall be deemed to have Beneficial
Ownership of all shares that any such person has the right to acquire, whether
such right is exercisable immediately or only after the passage of time or is
exercisable only upon the occurrence of a subsequent condition.
"Board" - the Board of Directors of the Company.
"Business Day" - a day other than a Saturday, Sunday, federal or New
York State holiday or other day on which commercial banks in New York City are
authorized or required by law to close.
"Certificate of Incorporation" - the Amended and Restated Certificate
of Incorporation of the Company as of the Closing Date attached as Exhibit A
hereto, as the same may be amended from time to time.
"Closing" - the closing of the Contemplated Transactions; "Closing
Date" means the date on which the Closing occurs.
"Contemplated Transactions" - has the meaning given to such term in the
Master Restructuring Agreement.
"Demand Registration Group" - (i) in the event that a demand
registration is requested pursuant to Section 3.8 hereof, the Initiating Party
and any other holder or combination of holders of demand registration rights
pursuant to Section 3.8 hereof who also requests a demand registration in
connection therewith (thereby using one of its demand registration rights),
together with each such holder's respective Affiliates, or (ii) in the event
that a demand registration is requested pursuant to any other demand
registration rights granted by the Company, the holders of Common Stock entitled
to include their shares in such demand registration on a priority basis pursuant
to such other demand registration rights.
"Equityholders" - collectively, (i) the Stockholders, (ii) the Company,
(iii) RES Holding, (iv) prior to a USX Exchange Event, the USX Investors and (v)
prior to a Kobe Exchange Event, the Kobe Investors, in each case including any
of their Permitted Transferees hereunder, and "Equityholder" means any one of
the Equityholders.
"Exchange Event" - a USX Exchange Event or Kobe Exchange Event, as
applicable.
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"Exchange Merger Agreement" - the agreement to be entered into in
accordance with Section 4.1 among the Company, USX, any Subsidiaries of USX that
are direct or indirect parents of USX RTI Holdings and USX RTI Holdings, in
connection with a USX Exchange Event, or the Company, Kobe Delaware, any
Subsidiaries of Kobe Delaware that are direct or indirect parents of Kobe RTI
Holdings and Kobe RTI Holdings in connection with a Kobe Exchange Event, as
applicable, in the form attached hereto as Exhibit B (or in such other form as
is agreed to by the Company, BCPII and USX or Kobe, as applicable, in accordance
with the express provisions of Section 4.1).
"Former Management Members" - collectively, Xxxxx Xxxxxx and Xxxxxx
Xxxxx, former members of management of the Company.
"fully diluted basis" - for the purpose of calculating the percentage
of shares of Common Stock owned by any Person on a fully diluted basis, such
calculation will assume that (i) all outstanding interests in the Company
convertible into or exchangeable or exercisable for Common Stock or rights to
acquire or receive Common Stock (including without limitation Antidilution
Warrants and the Series C Preferred Stock) were then converted into, exchanged
or exercised for shares of Common Stock (whether or not then convertible,
exchangeable or exercisable), (ii) all outstanding RTI Holdings Series C
Preferred Units were then converted into RTI Holdings Common Units, and (iii)
all shares of Common Stock and Antidilution Warrants which would be issued
pursuant to this Agreement if a USX Exchange Event and Kobe Exchange Event then
occurred were then issued.
"Initial Public Offering" - the initial primary sale by the Company of
shares of Common Stock to the public pursuant to an effective registration
statement (other than a registration statement on Form S-4 or S-8 or any similar
or successor form) filed under the Securities Act, other than the USWA Offering.
"Kobe Exchange Event" - the closing of an exchange by the Kobe
Investors of their RTI Holdings Common Units for shares of Class D Common Stock
and Antidilution Warrants pursuant to Section 4.1 hereof.
"Management Stockholders" - directors, officers and employees of the
Company and its Subsidiaries who hold Common Stock or options, warrants or other
rights exercisable or exchangeable for or convertible into Common Stock and who
are parties to this Agreement as of the date hereof or become additional parties
to this Agreement in accordance with Section 5.12.
"own" or "ownership" - for the purpose of calculating the number or
percentage of shares of Common Stock owned by any Person while the Blackstone
Investors are partners of the Partnerships, such calculation will include with
respect to the Common Stock owned by the Blackstone Investors, and exclude with
respect to the Common Stock owned by the Partnerships, the shares of Common
Stock (and any options or warrants to obtain Common Stock) held by the
Partnerships which constitute "Class B Assets" under the Partnership Agreements.
8
"Partnership Agreements" - (i) the Amended and Restated Limited
Partnership Agreement relating to Holdings, dated as of April 2, 1996 and
amended as of the date hereof, among the Class A Partners named therein, BCPII
and Blackstone Family Investment Partnership II L.P., as the Class B Partners
and (ii) the Limited Partnership Agreement relating to Offshore Holdings, dated
as of April 1, 1996 and amended as of the date hereof, among the Class A
Partners named therein, the Class B General Partners named therein and
Blackstone Offshore Capital Partners II L.P., as the Class B Limited Partner.
"Permitted Transferee" - any Person to whom a Blackstone Investor, a
Partnership, a Veritas Investor, a USX Investor, a Kobe Investor, a FirstEnergy
Investor, a Sumitomo Investor, a Triumph Investor, a First Dominion Investor, a
TCW Investor or a Management Stockholder transfers shares of Common Stock,
Series C Preferred Stock, Antidilution Warrants or RTI Holdings Units, as
applicable, in accordance with the terms of this Agreement and who is required
to, and does, become bound by the terms of this Agreement that were applicable
to the transferor, and includes any Person to whom a Permitted Transferee (as
thus defined) of a Blackstone Investor, a Partnership, a Veritas Investor, a USX
Investor, a Kobe Investor, a FirstEnergy Investor, a Sumitomo Investor, a
Triumph Investor, a First Dominion Investor, a TCW Investor or a Management
Stockholder (or a Permitted Transferee of a Permitted Transferee) so further
transfers shares of Common Stock, Series C Preferred Stock, Antidilution
Warrants or RTI Holdings Units and who is required to, and does, become bound by
the terms of this Agreement.
"Person" - any individual, corporation, limited liability company,
partnership, trust, joint stock company, business trust, unincorporated
association, joint venture, governmental authority or other entity of any nature
whatsoever.
"Primary Common Stock" - collectively, as of any time of determination
thereof, (i) all shares of Common Stock issued and outstanding and (ii) an
additional number of shares of Common Stock equal to the product of (A) .259733,
multiplied by (B) the number of BarTech Financing Warrants that remain issued
and outstanding at such time of determination.
"Public Offering" - the sale of shares of Common Stock of the Company
to the public pursuant to an effective registration statement (other than a
registration statement on Form S-4 or S-8 or any similar or successor form)
filed under the Securities Act, other than the USWA Offering.
"Registration Expenses" - any and all out-of-pocket expenses incident
to the performance by the Company Parties of, or compliance by the Company
Parties with, Section 3.7 or 3.8 hereof, including, without limitation, (i) all
SEC, stock exchange, National Association of Securities Dealers, Inc. and other
comparable regulatory agencies, registration and filing fees, (ii) all
out-of-pocket fees and expenses of complying with securities or blue sky laws
(including fees and disbursements of counsel for the underwriters in connection
with blue sky qualifications), (iii) all out-of-pocket printing, third-party
duplicating, messenger and delivery expenses (including expenses of printing
certificates for the shares of Common Stock to be registered in a form eligible
for deposit with The Depository Trust Company and of printing
9
prospectuses), (iv) the fees and disbursements of counsel for the Company
Parties and of their independent certified public accountants, including the
expenses of any special audits and/or "cold comfort" letters required by or
incident to such performance and compliance, (v) the reasonable fees and
disbursements of one firm of attorneys ("Holders' Counsel") selected by the
Stockholders who own a majority of the shares of Common Stock to be included in
the proposed registration, (vi) any fees and disbursements of underwriters
customarily paid by issuers or sellers of securities, but excluding underwriting
discounts and commissions applicable to shares owned by Stockholders, (vii)
liability insurance if the Company so desires or if the underwriters so require,
(viii) the reasonable fees and expenses of any special experts retained by the
Company Parties in connection with the requested registration, but excluding
transfer taxes, if any and (ix) all out-of-pocket fees and expenses incurred in
connection with the listing of the shares of Common Stock on any securities
exchange or quotation on any inter-dealer quotation system.
"RTI Holdings LLC Agreement" - the limited liability company agreement
of RTI Holdings.
"RTI Holdings Series A Preferred Units" - Class A Units of RTI Holdings
(as defined in the RTI Holdings LLC Agreement).
"RTI Holdings Series C Preferred Units" - Class C Units of RTI Holdings
(as defined in the RTI Holdings LLC Agreement).
"RTI Holdings Common Units" - Class B Units of RTI Holdings (as defined
in the RTI Holdings LLC Agreement), together with any right hereunder to receive
Antidilution Warrants upon the exchange of such units for Common Stock of the
Company pursuant to a USX Exchange Event or Kobe Exchange Event, as applicable.
"RTI Holdings Units" - collectively, the RTI Holdings Common Units, RTI
Holdings Series A Preferred Units and RTI Holdings Series C Preferred Units.
"SEC" - the United States Securities and Exchange Commission.
"Securities Act" - the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder, as the same may be amended from
time to time.
"Stockholders" - collectively, (i) the Blackstone Investors, (ii) the
Partnerships, (iii) the Veritas Investors, (iv) the Management Stockholders, (v)
from and after a USX Exchange Event, the USX Investors, (vi) from and after a
Kobe Exchange Event, the Kobe Investors, (vii) the FirstEnergy Investors, (viii)
the Sumitomo Investors, (ix) the Triumph Investors, (x) the First Dominion
Investors and (xi) the TCW Investors, in each case including any of their
Permitted Transferees hereunder, and "Stockholder" means any one of the
Stockholders.
"Transaction Documents" - will have the meaning given to such term in
the Master Restructuring Agreement.
10
"Transfer" - any transfer, sale, gift, assignment, exchange, mortgage,
pledge, hypothecation, bequest, devise or other disposition of any Common Stock,
options or warrants to acquire Common Stock (including the right to receive
Antidilution Warrants), Series C Preferred Stock or RTI Holdings Units, or any
interest therein.
"USWA Offering" - the sale of Common Stock to employees of the Company
and its Subsidiaries who are members of the USWA pursuant to the Company's
existing commitment to engage in such offering following the Closing Date.
"USX Exchange Event" - the closing of an exchange by the USX Investors
of their RTI Holdings Common Units for shares of Class D Common Stock and
Antidilution Warrants in accordance with Section 4.1 hereof.
1.2 Other Definitions. The following terms are defined in the Sections
indicated:
Term Section
---- -------
BCPII Introduction
Blackstone Directors 2.1(d)
Blackstone Investors Introduction
Capital Expenditure Plan 2.2(f)
Cause 2.1(m)
Class A Common Stock Background
Class B Common Stock Background
Class C Common Stock Background
Class D Common Stock Background
Common Stock Background
Company Introduction
Company Parties Introduction
Demand Notice 3.8(f)
Drag-Along Notice 3.6(b)
Dragging Stockholder 3.6(a)
Exchange Merger 4.1(c)
Exchange Merger Consideration 4.1(c)
Exchange Notice 4.1(b)
First Dominion Introduction
First Dominion Investors
FirstEnergy Introduction
FirstEnergy Investors Introduction
FirstEnergy Request 3.8(e)
First Offer 3.2(b)
Holder 3.10(a)
Holders' Counsel 1.1
Holdings Introduction
Indemnified Parties 3.10(a)
-------------------------------------------------------------------
11
Term Section
---- -------
Initiating Party 3.7(a)
IPO Basket 2.2(d)
Kobe Introduction
Kobe Directors 2.1(d)
Kobe Exchange Right 4.1(b)
Kobe Investors Introduction
Kobe Parties Introduction
Kobe Request 3.8(d), 3.8(e)
Kobe RTI Holdings Introduction
Losses 3.10(a)
Management Equity Basket 2.2(d)
Master Restructuring Agreement Background
Non-Initiating Parties 3.7(a)
Offshore Holdings Introduction
Partnerships Introduction
Partnerships' Request 3.8(b)
Piggy-Back Shares 3.7(a)
Registrable Securities 3.10(a)
Request 3.8(a)
RES Holding Introduction
RTI Holdings Introduction
RTI Unit Adjustment Event 4.2(a)
Series B Preferred Stock Background
Series C Preferred Stock Background
SOFIIB Introduction
SOFIII Introduction
Sumitomo Introduction
Sumitomo Investors Introduction
Tagging Equityholders 3.5(a)
TCI-II Introduction
Third Party 3.2, 3.6(a)
Transferring Stockholder 3.5(a)
Triumph Introduction
Triumph Investors Introduction
TCWLIT Introduction
TCWLITII Introduction
TCWSOFII Introduction
TCW Investors Introduction
USS/Kobe Background
USX Introduction
USX Directors 2.1(d)
USX Exchange Right 4.1(b)
USX Investors Introduction
-------------------------------------------------------------------
12
Term Section
---- -------
USX Parties Introduction
USX Request 3.8(c)
USX RTI Holdings Introduction
Valuer 2.2(g)
Veritas Capital Introduction
Veritas Directors 2.1(d)
Veritas Investors Introduction
1.3 Other Definitional Provisions; Interpretation. (a) The words
"hereof", "herein" and "hereunder" and words of similar import when used in this
Agreement will refer to this Agreement as a whole and not to any particular
provision of this Agreement, and section and subsection references are to this
Agreement unless otherwise specified.
(b) The headings in this Agreement are included for convenience of
reference only and will not limit or otherwise affect the meaning or
interpretation of this Agreement.
(c) The meanings given to terms defined herein will be equally
applicable to both the singular and plural forms of such terms.
SECTION 2
GOVERNANCE
2.1 Board of Directors. (a) The Board shall consist of thirteen (13)
directors.
(b) Each of the Stockholders and the Company agrees to take
all action necessary to cause each of the designees described in Section 2.1(d)
below to be elected or appointed to the Board concurrently with the Closing,
including without limitation, seeking and accepting resignations of incumbent
directors.
(c) Each committee of the Board will include a USX Director, a
Kobe Director and a Veritas Director (provided that at least one such director
position is then filled and unless the Equityholder appointing such director(s)
shall otherwise agree).
(d) Each Stockholder agrees that as long as this Agreement is
in effect it will vote all of the shares of voting capital stock of the Company
owned or held of record by it, or cause all of the shares of voting capital
stock of the Company Beneficially Owned by it to be voted, to elect and, during
such period, to continue in office a Board, in addition to the director elected
by the holder of the Series B Preferred Stock, consisting solely of the
following (subject to the other provisions of this Section 2.1):
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(i) six designees of BCPII, subject to Section 2.1(j) below
(the "Blackstone Directors");
(ii) two designees of Veritas Capital (the "Veritas
Directors");
(iii) two designees of USX (the "USX Directors"); and
(iv) two designees of Kobe (the "Kobe Directors");
provided that such designation rights will be transferable (subject to the prior
written consent of BCPII, such consent not to be unreasonably withheld) upon any
Transfer by any of the Equityholders, and will be subject to the following
provisions.
(e) The director designation right of BCPII will reduce (i) to
five if BCPII and the Blackstone Investors that are Affiliates of BCPII,
directly and indirectly, collectively own Common Stock representing less than
25% of the Common Stock on a fully diluted basis, (ii) to four if BCPII and the
Blackstone Investors that are Affiliates of BCPII, directly and indirectly,
collectively own Common Stock representing less than 20% of the Common Stock on
a fully diluted basis, (iii) to three if BCPII and the Blackstone Investors that
are Affiliates of BCPII, directly and indirectly, collectively own Common Stock
representing less than 17.5% of the Common Stock on a fully diluted basis, (iv)
to two if BCPII and the Blackstone Investors that are Affiliates of BCPII,
directly and indirectly, collectively own Common Stock representing less than
15% of the Common Stock on a fully diluted basis, (v) to one if BCPII and the
Blackstone Investors that are Affiliates of BCPII, directly and indirectly,
collectively own Common Stock representing less than 7.5% of the Common Stock on
a fully diluted, and (vi) to zero if BCPII and the Blackstone Investors that are
Affiliates of BCPII, directly and indirectly, collectively own Common Stock
representing less than 5% of the Common Stock on a fully diluted basis.
(f) The director designation right of Veritas Capital will
reduce (i) to one if Veritas Capital and any other Veritas Investors that are
Affiliates of Veritas Capital, directly and indirectly, collectively own Common
Stock representing less than 7.5% of the Common Stock on a fully diluted basis,
and (ii) to zero if Veritas Capital and any other Veritas Investors that are
Affiliates of Veritas Capital, directly and indirectly, collectively own Common
Stock representing less than 5% of the Common Stock on a fully diluted basis.
(g) The director designation right of USX will reduce (i) to
one if USX and any other USX Investors that are Affiliates of USX, directly and
indirectly, collectively own Common Stock representing less than 7.5% of the
Common Stock on a fully diluted basis, and (ii) to zero if USX and any other USX
Investors that are Affiliates of USX, directly and indirectly, collectively own
Common Stock representing less than 5% of the Common Stock on a fully diluted
basis.
(h) The director designation right of Kobe will reduce (i) to
one if Kobe and any other Kobe Investors that are Affiliates of Kobe, directly
and indirectly, collectively own Common Stock representing less than 7.5% of the
Common Stock on a fully diluted basis, and
14
(ii) to zero if Kobe and any other Kobe Investors that are Affiliates of Kobe,
directly and indirectly, collectively own Common Stock representing less than 5%
of the Common Stock on a fully diluted basis.
(i) At any time at the request of BCPII (provided that BCPII
is then entitled to designate six Blackstone Directors pursuant to this Section
2.1), the number of Blackstone Directors will be increased such that BCPII
thereafter has the right to designate a majority of the entire Board (e.g.,
eight out of fifteen directors), and the size of the Board will be expanded to
the extent necessary to create director vacancies in connection therewith
(subject to subsequent reduction in the number of Blackstone Directors pursuant
to Section 2.1(e) hereof).
(j) If BCPII, Veritas Capital, USX RTI Holdings or Kobe RTI
Holdings notifies the other Equityholders in writing of its desire to remove,
with or without Cause, any director of the Company previously designated by it,
each Stockholder will vote (to the extent eligible to vote) all of the shares of
voting capital stock of the Company Beneficially Owned or held of record by it,
him or her so as to remove such director or, upon request, each Stockholder will
promptly execute and return to the Company any written resolution to such
effect. In the event that any of such persons is no longer entitled pursuant to
this Section 2.1 to designate a director previously designated by such
Equityholder(s), such director promptly will be removed from the Board, and each
Stockholder will vote (to the extent eligible to vote) all of the shares of
voting capital stock of the Company Beneficially Owned or held of record by it
so as to remove such director or, upon request, each Stockholder will promptly
execute and return to the Company any written resolution to such effect. No
removal pursuant to Delaware Law of an individual designated pursuant to this
Section 2.1 will affect any of the rights of the Stockholders to designate a
different individual.
(k) If the Board shall determine in good faith in the exercise
of its fiduciary duties, based on the advice of outside counsel, that nomination
of any person designated by any of the Equityholders for election to the Board
would not be in the best interests of the Company, then the Company shall
promptly notify such Equityholder of such determination in writing and
thereafter the designating party shall have a period of no less than five (5)
Business Days to designate a new person for nomination for election to the Board
as such party's designee as the case may be.
(l) Each of the Stockholders agrees that if, at any time, it
is then entitled to vote for the removal of directors of the Company other than
its own designee(s), it will not take such action by written consent unless such
removal shall be for Cause. Removal for "Cause" shall mean removal of a director
because of such director's (a) willful and continued failure to substantially
perform his or her duties as a director of the Company, (b) willful and
continued conduct inconsistent with the good faith exercise of his or her
fiduciary obligations and which is significantly injurious to the Company,
monetarily or otherwise, or (c) conviction for, or guilty plea to, a felony.
(m) If any director previously designated by BCPII, Veritas
Capital, USX RTI Holdings or Kobe RTI Holdings ceases to serve on the Board
(whether by reason of death,
15
resignation, removal or otherwise), the person who designated such director will
be entitled to designate a successor director to fill the vacancy created
thereby, and each Stockholder will vote (to the extent eligible to vote) all of
the shares of voting capital stock of the Company Beneficially Owned or held of
record by it or him or her in favor of such designation or, upon request, each
Stockholder will promptly execute and return to the Company any written
resolution to such effect.
(n) In order to effectuate this Section 2.1, each Stockholder
hereby grants to the other Stockholders or any of them an irrevocable proxy to
vote, during the period specified in (a) above, all of the shares of voting
capital stock of the Company owned by the grantor of the proxy for the election
and removal of directors in accordance with this Section 2.1.
(o) Each Stockholder agrees to indemnify and hold harmless the
Company, each other Stockholder and each remaining director from and against any
and all Losses to which the Company and the other Stockholders, as the case may
be, may be subject, insofar as such Losses arise out of or are based upon the
removal, in accordance with the specific provisions of this Section 2.1, of any
director previously designated by it pursuant to this Section 2.1, and will
reimburse the Company and the other Stockholders, as the case may be, in
connection with investigating or defending any such loss, claim, damage,
liability or action.
2.2 Fundamental Issues. Actions by the Stockholders or the
Board will be taken as provided by law or the Certificate of Incorporation,
provided that (A) for so long as USX and other USX Investors that are Affiliates
of USX retain the right under Section 2.1 to designate at least one USX
Director, the Company (including in its capacity as the managing member of RTI
Holdings), RTI Holdings (including in its capacity as the managing member of RTI
Opco) and the Stockholders shall not take and shall cause not to be taken, any
actions involving the following without the affirmative vote or written consent
of at least one USX Director designated by USX (if such action is subject to a
Board vote or consent) or USX (if such action is subject to a Stockholder vote
or consent) in their absolute discretion, and (B) for so long as Kobe and other
Kobe Investors that are Affiliates of Kobe retain the right under Section 2.1 to
designate at least one Kobe Director, the Company (including in its capacity as
the managing member of RTI Holdings), RTI Holdings (including in its capacity as
the managing member of RTI Opco) and the Stockholders shall not take, and shall
cause not to be taken, any actions involving the following without the
affirmative vote or written consent of at least one Kobe Director designated by
Kobe (if such action is subject to a Board vote or consent) or Kobe (if such
action is subject to a Stockholder vote or consent) in their absolute discretion
(and neither a USX Director nor a Kobe Director will be deemed to have voted in
favor of any action subject to a Board vote unless he or she was present at the
meeting where such vote was taken and in fact cast an affirmative vote, nor to
have consented to any action subject to a written Board consent unless he or she
has in fact executed such consent):
(a) The appointment or dismissal of the independent auditors
of the Company or any of its Subsidiaries, provided that the Blackstone
Directors will have the right to nominate new independent auditors
subject to the consent of USX or a USX
16
Director, and of Kobe or a Kobe Director, as applicable, which consents
shall not be unreasonably withheld;
(b) the execution, modification or termination of any material
contract between the Company or any of its Subsidiaries and any
Affiliate (other than the Company or any of its Subsidiaries) of (i)
BCPII, (ii) any other Blackstone Investor that is an Affiliate of
BCPII, (iii) any Blackstone Investor that is not an Affiliate of BCPII
but has, together with such Blackstone Investor's Affiliates, the right
to designate a majority of the Board, or (iv) Veritas Capital, other
than:
(A) the Transaction Documents or associated
contracts relating to the payment of monitoring fees or
transaction fees in accordance with any of the Transaction
Documents;
(B) contracts relating to the purchase or sale by
the Company or any of its Subsidiaries of products or services
in the ordinary course of business on terms that are no less
favorable than those that could have been obtained in a
comparable transaction on an arm's-length basis from an
unaffiliated Person;
(C) contracts relating to the provision of
financial advisory services on terms that are no less
favorable than those that could have been obtained in a
comparable transaction on an arms-length basis from an
unaffiliated Person (and, in the case of this clause (iii),
subject to prior consultation with USX and Kobe (provided that
such investor at the time has consent rights pursuant to this
Section 2.2)); or
(D) contracts relating to the sale by the Company
or any of its Subsidiaries of the business relating to the
Baltimore Stainless and Specialty Plant, 0000 Xxxx Xxxxxx
Xxxxxx, Xxxxxxxxx, XX, and the Canton Special Metals Plant,
000 Xxxxxxxx Xxxxxx, X.X., Xxxxxx, XX, provided that the
aggregate purchase price for such plants is at least $35
million;
(c) the payment by the Company or any of its Subsidiaries of
any fees to any Equityholder, other than monitoring fees pursuant to
the terms of any of the Transaction Documents;
(d) except for issuances (i) pursuant to the Contemplated
Transactions, (ii) pursuant to Sections 2.2(g), 3.11, 4.1 and 4.2
hereof, (iii) upon the exercise of options, warrants, convertible
securities and other rights to acquire Common Stock outstanding on the
date hereof (including those being issued in connection with the
consummation of the Contemplated Transactions) or issued or granted
following the date hereof in accordance with the terms of this
Agreement or (iv) by Subsidiaries of RTI Holdings to RTI Holdings or to
other RTI Holdings Subsidiaries, the issuance by the Company or any of
its direct or indirect Subsidiaries of any equity interests therein, or
rights to acquire or receive any equity interests therein, other than:
17
(i) prior to the issuance of any shares of Common
Stock under the IPO Basket (but in no event thereafter), the
issuance of Common Stock, and the issuance or grant of
options, warrants and other rights to acquire Common Stock, in
each case to directors, officers, employees and consultants of
the Company or any of its Subsidiaries on terms and conditions
approved by a majority of the Board; provided that at no time
shall the aggregate number of shares of Common Stock issued
and outstanding pursuant to this clause (i) (whether issued
directly or as a result of the exercise of options, warrants
or other rights issued pursuant to this clause (i)), together
with the aggregate number of shares of Common Stock issuable
upon the exercise of options, warrants and rights to receive
shares of Common Stock issued and outstanding pursuant to this
clause (i) (whether or not vested), exceed 775,000 shares of
Common Stock (adjusted for any stock splits, reverse splits or
similar events occurring after the Closing Date) (the
"Management Equity Basket"); and provided, further, that the
issuance price (in the case of direct sales of Common Stock)
or the exercise price (in the case of grants of options,
warrants or other rights to acquire shares of Common Stock)
per share of Common Stock shall be payable in cash and at
least equal to the fair market value of a share of Common
Stock at the time of such sale (in the case of direct sales of
Common Stock) or grant (in the case of options, warrants or
other rights to acquire shares of Common Stock), and in no
event less than $55.88 per share of Common Stock (adjusted for
any stock splits, reverse splits or similar events occurring
after the Closing Date); and
(ii) pursuant to an Initial Public Offering, the
issuance of up to that number of shares of Common Stock equal
to the sum of (I) 1,033,000 shares of Common Stock (adjusted
for any stock splits, reverse splits or similar events
occurring after the Closing Date) and (II) up to 259,000
shares of Common Stock (adjusted for any stock splits, reverse
splits or similar events occurring after the Closing Date) to
the extent of remaining issuance capacity in the Management
Equity Basket (subject, solely in the case of this clause
(II), to the consent of USX and Kobe (provided that such
investor at the time has consent rights pursuant to this
paragraph (d)), such consent not to be unreasonably withheld)
(the "IPO Basket"), subject to Section 3.11 hereof;
(e) the incurrence of (i) indebtedness (as determined in
accordance with GAAP, including any leasing arrangements or other
financings treated as indebtedness in accordance with GAAP), or (ii)
off-balance sheet obligations that are economically substantially
equivalent to indebtedness, by the Company or any of its Subsidiaries,
other than:
(A) pursuant to the Contemplated Transactions;
(B) refinancings of indebtedness or such
off-balance sheet obligations of the Company or any of its
Subsidiaries existing at the time of the Closing or
subsequently incurred other than in violation of the terms of
this Agreement;
18
(C) incurrences of indebtedness pursuant to undrawn
commitments under credit facilities in effect at the Closing;
and
(D) incurrences of other additional incremental
indebtedness and/or such off-balance sheet arrangements in the
aggregate not exceeding $500 million;
(f) the making of capital expenditures by the Company or any
of its Subsidiaries during the five year period commencing on the
Closing Date, other than:
(i) capital expenditures contained in the five year
capital spending plan included in the Company Disclosure
Letter (the "Capital Expenditure Plan"); and
(ii) additions or modifications to the Capital
Expenditure Plan, subject to an aggregate limitation of an
additional $50 million of capital expenditures pursuant to
such additions and modifications; provided that acquisitions
of the businesses of other Persons (whether by acquisition of
equity interests or assets) will not constitute "capital
expenditures" for purposes of this paragraph (f);
(g) the merger of the Company or any of its material
Subsidiaries into any other Person, the merger of any other Person into
the Company or any of its Subsidiaries (other than pursuant to Section
4.1 hereof) or the acquisition by the Company or any of its
Subsidiaries of the capital stock or assets of any other Person, other
than;
(i) the merger of wholly owned Subsidiaries of the
Company into the Company or any other wholly owned Subsidiary
of the Company;
(ii) a merger of the Company or any of its
Subsidiaries into an unaffiliated third party on an
arms-length basis that results in an all-cash payment to the
USX Investors and the Kobe Investors with respect to all of
their shares of Common Stock and/or RTI Holdings Common Units,
as applicable (subject to the second following proviso),
provided that such payment is on the same economic terms as
those received by the majority Stockholders of the Company,
including the same per share economic consideration; provided,
however, that if Stockholders other than the USX Investors and
the Kobe Investors are to receive economic consideration other
than cash for their shares of Common Stock (in whole or in
part), the USX Investors and Kobe Investors shall be entitled
to receive cash consideration (from one or more Persons
designated by the Blackstone Investors) in an amount per share
equal to the fair market value of the non-cash economic
consideration to be received by such other Stockholders, and
in such event USX, Kobe and the Company promptly shall
negotiate in good faith to reach agreement as to the fair
market value of such non-cash economic consideration; and
provided, further, that if USX, Kobe and the Company fail to
reach such agreement within 10 Business Days following notice
to USX and Kobe of the terms of such non-cash economic
consideration, the fair market value of
19
such non-cash economic consideration shall be determined as
follows: (A) if USX, Kobe and the Company can agree on a
single nationally recognized independent investment banking
firm (a "Valuer") to act as appraiser within five Business
Days after the end of such 10 Business Day period, such Valuer
promptly shall determine the fair market value of such
non-cash economic consideration (and the Company will bear
71.5% of the costs of such Valuer and the USX Investors and
Kobe Investors together will bear 28.5% of the costs of such
Valuer), or (B) if USX, Kobe and the Company cannot agree on a
single Valuer within five Business Days after the end of such
10 Business Day period, within two Business Days thereafter
the Company shall select a Valuer and USX and Kobe together
shall select a second Valuer, each of which promptly shall
determine the fair market value of such non-cash economic
consideration, and (I) if the valuations of such two Valuers
differ by an amount which is twenty percent or less of the
higher valuation, the fair market value of such non-cash
economic consideration shall be calculated by averaging the
valuations of such two Valuers (and the Company will bear the
costs of the Valuer it selects and the USX Investors and Kobe
Investors together will bear the costs of the Valuer they
select), or (II) if the valuations of such two Valuers differ
by an amount which is more than twenty percent of the higher
valuation, within two Business Days thereafter the two Valuers
shall select a third Valuer, which Valuer promptly shall make
its own valuation and shall choose the valuation performed by
the first two Valuers which most closely reflects its own
valuation, and the valuation so selected will be deemed to
constitute the fair market value of such non-cash economic
consideration (and if such third Valuer is used, the Company
will bear 71.5% of the costs of such Valuer and the USX
Investors and Kobe Investors together will bear 28.5% of the
costs of such Valuer);
(iii) a merger of an unaffiliated third party into
the Company or any of its Subsidiaries or the acquisition by
the Company or any of its Subsidiaries of the capital stock or
assets of any other Person, provided that the consideration
paid by the Company and its Subsidiaries in connection
therewith (A) does not cause the Company or any of its
Subsidiaries to issue Common Stock in excess of what is then
available under paragraph (d) above or (B) require the Company
and its Subsidiaries to incur indebtedness in excess of what
is then permitted under paragraph (e) above;
(h) the sale of 67% or more of the consolidated assets of the
Company and its Subsidiaries calculated on the basis of the net book value of
such assets as of the date of the most recent audited financial statements of
the Company and its Subsidiaries prior to the date of such sale other than in a
transaction or series of related transactions that results in the complete
liquidation of the Company with an all-cash payment to the USX Investors and the
Kobe Investors with respect to all of their shares of Common Stock and/or RTI
Holdings Common Units, as applicable; provided, however, that if Stockholders
other than the USX Investors and the Kobe Investors are to receive economic
consideration other than cash for their shares of Common Stock (in whole or in
part), the USX Investors and Kobe Investors shall be entitled to
20
receive cash consideration (from one or more Persons designated by the
Blackstone Investors) in an amount per share equal to the fair market value of
the non-cash economic consideration to be received by such other Stockholders,
and in such event USX, Kobe and the Company promptly shall negotiate in good
faith to reach agreement as to the fair market value of such non-cash economic
consideration; and provided, further, that if USX, Kobe and the Company fail to
reach such agreement within 10 Business Days following notice to USX and Kobe of
the terms of such non-cash economic consideration, the fair market value of such
non-cash economic consideration shall be determined as follows: (A) if USX, Kobe
and the Company can agree on a single Valuer to act as appraiser within five
Business Days after the end of such 10 Business Day period, such Valuer promptly
shall determine the fair market value of such non-cash economic consideration
(and the Company will bear 71.5% of the costs of such Valuer and the USX
Investors and Kobe Investors together will bear 28.5% of the costs of such
Valuer), or (B) if USX, Kobe and the Company cannot agree on a single Valuer
within five Business Days after the end of such 10 Business Day period, within
two Business Days thereafter the Company shall select a Valuer and USX and Kobe
together shall select a second Valuer, each of which promptly shall determine
the fair market value of such non-cash economic consideration, and (I) if the
valuations of such two Valuers differ by an amount which is twenty percent or
less of the higher valuation, the fair market value of such non-cash economic
consideration shall be calculated by averaging the valuations of such two
Valuers (and the Company will bear the costs of the Valuer it selects and the
USX Investors and Kobe Investors together will bear the costs of the Valuer they
select), or (II) if the valuations of such two Valuers differ by an amount which
is more than twenty percent of the higher valuation, within two Business Days
thereafter the two Valuers shall select a third Valuer, which Valuer promptly
shall make its own valuation and shall choose the valuation performed by the
first two Valuers which most closely reflects its own valuation, and the
valuation so selected will be deemed to constitute the fair market value of such
non-cash economic consideration (and if such third Valuer is used, the Company
will bear 71.5% of the costs of such Valuer and the USX Investors and Kobe
Investors together will bear 28.5% of the costs of such Valuer);
(i) the entry of the Company or any of its Subsidiaries into a
material new line of business, other than steelmaking, steel finishing,
steel processing, steel distributing or transporting of steel products;
(j) (i) the commencing of a voluntary bankruptcy proceeding,
liquidation or dissolution with respect to the Company or any of its
material Subsidiaries, (ii) changes to the structure of RTI Holdings as
a limited liability company or (iii) adverse changes to the terms of
the USX Investors' and Kobe Investors' Common Stock or RTI Holdings
Common Units (provided that issuances of additional Common Stock or RTI
Holdings Common Units or amendments to this Agreement otherwise
expressly permitted pursuant to this Agreement will not be considered
adverse); or
(k) the payment of any distributions in respect of the Common
Stock prior to the consummation of a USX Exchange Event (with respect
to the affirmative vote or written consent of a USX Director) or Kobe
Exchange Event (with respect to the affirmative vote or written consent
of a Kobe Director), other than to the extent of
21
distributions received by the Company from RTI Holdings that were made
to all members of RTI Holdings on a pro rata basis.
Notwithstanding anything contained herein, the parties will
not, and will cause their respective Affiliates not to, circumvent the
provisions of this Section 2 through any direct or indirect act or omission.
SECTION 3
TRANSFERS
3.1 Limitations on Transfer. (a) Each Equityholder hereby agrees that,
except for Transfers of Common Stock effected by such Equityholder pursuant to
an effective registration statement filed under the Securities Act, no Transfer
shall occur unless the Company has been furnished with an opinion of counsel
customary in transactions of this type to the effect that such Transfer is
exempt from or not subject to the provisions of Section 5 of the Securities Act.
(b) Each Equityholder hereby agrees that, except for (i)
Transfers of Common Stock in connection with a Public Offering, (ii)
Transfers of Common Stock pursuant to Rule 144 under the Securities
Act, (iii) Transfers of Common Stock, Series C Preferred Stock or RTI
Holdings Common Units to the Company in one or more transactions
approved by the Board, (iv) Transfers of RTI Holdings Common Units
pursuant to Section 4.1 and (v) Transfers of Common Stock or Series C
Preferred Stock pursuant to Section 3.6 (drag-along transfers), no
Transfer shall occur unless the transferee shall agree in writing by
delivering a transfer acknowledgment in form and substance reasonably
acceptable to the Company (with copies to USX, Kobe, Veritas,
Blackstone, Sumitomo, FirstEnergy, First Dominion, Triumph, TCI-II,
TCWLIT, TCWLITII, TCWSOFII, SOFIIB and SOFIII) to become a party to,
and be bound to the same extent as its transferor by the terms of, this
Agreement. The Company agrees that the issuance of Common Stock by the
Company in an Initial Public Offering will be made solely in the form
of Class D Common Stock.
(c) Notwithstanding anything contained herein to the contrary,
each Equityholder hereby agrees that, except for (i) Transfers to the
Company in transactions that are approved by the Board, (ii) Transfers
pursuant to Section 3.2(a) (transfers to Affiliates and among
Equityholders), (iii) Transfers pursuant to Section 3.2(b) (transfers
following termination of the lockup period), (iv) Transfers pursuant to
Section 3.5 (tag-along transfers), (v) Transfers pursuant to Section
3.6 (drag-along transfers), (vi) Transfers pursuant to Section 3.7
(piggyback registration transfers), (vii) Transfers pursuant to Section
3.8 (demand registration transfers) or (viii) Transfers of Common Stock
pursuant to Rule 144 under the Securities Act commencing 90 days after
consummation of an Initial Public Offering, and subject to Section 3.9
(lock-up in connection with other registrations), a Transfer of Common
Stock (or any options or warrants to acquire Common Stock) or Series C
Preferred Stock by any such
22
Equityholder may occur only with BCPII's prior written consent. Each of
the USX Investors, the Kobe Investors, the Company and RES Holding
hereby agrees that, except for (i) Transfers of RTI Holdings Common
Units to the Company in transactions approved by the Board, (ii)
Transfers of RTI Holdings Common Units pursuant to Section 3.2(a) and
(iii) Transfers of RTI Holdings Common Units pursuant to Sections 4.1
and 4.2, it will not Transfer any RTI Holdings Units owned by it to any
Person without the prior written consent of BCPII. The Company hereby
agrees that, except for Transfers of RTI Holdings Units to the Company
or among Subsidiaries of the Company, neither the Company nor any of
its Subsidiaries will Transfer any RTI Holdings Units owned by it to
any Person without the prior written consent of USX (for so long as USX
RTI Holdings owns any RTI Holdings Common Units) and Kobe (for so long
as Kobe RTI Holdings owns any RTI Holdings Common Units).
(d) The parties will not, and will cause their Affiliates not
to, circumvent the provisions of this Section 3 through any direct or
indirect act or omission, including without limitation by causing the
Partnerships to keep in effect partnership arrangements satisfactory to
the Blackstone Investors, the Veritas Investors, USX, Kobe, Sumitomo,
FirstEnergy, First Dominion, Triumph, TCI-II, TCWLIT, TCWLITII,
TCWSOFII, SOFIIB and SOFIII whereby the partners of the Partnerships
will not be permitted to Transfer their partnership interests in a
manner that circumvents the provisions of this Section 3.
(e) Prior to the consummation of a USX Exchange Event, USX
will maintain USX RTI Holdings as a direct or indirect wholly owned
Subsidiary of USX, and will not engage in, directly or indirectly, any
transfer (other than among wholly owned Subsidiaries of USX), sale,
assignment, exchange, mortgage, pledge, hypothecation or other
disposition of the capital stock of USX RTI Holdings or of any entity
directly or indirectly owning any such capital stock (other than USX
itself).
(f) Prior to the consummation of a Kobe Exchange Event, Kobe
will maintain Kobe RTI Holdings as a direct or indirect Subsidiary of
Kobe (i) of which Kobe directly or indirectly owns at least 90% of the
outstanding capital stock (by vote and by value) and (ii) which is
wholly owned by its immediate parent, and will not engage in, directly
or indirectly, any transfer (other than among wholly owned Subsidiaries
of Kobe), sale, assignment, exchange, mortgage, pledge, hypothecation
or other disposition of the capital stock of Kobe RTI Holdings or of
any entity directly or indirectly owning any such capital stock (other
than Kobe itself). Prior to the consummation of a Kobe Exchange Event,
to the extent that any Subsidiary of Kobe directly or indirectly owning
shares of the outstanding capital stock of RTI Holdings is less than
wholly owned by Kobe, Kobe will not grant to any other stockholders
therein the right to participate in the control or management of such
Subsidiary or to designate directors (or the equivalent) of such
Subsidiary.
3.2 Transfers to Affiliates and Among Equityholders; Termination of
Lockup Period.
23
(a) Notwithstanding anything contained herein to the contrary,
but subject to compliance with applicable securities laws, (i) each of
the Blackstone Investors, the Veritas Investors, the USX Investors, the
Kobe Investors, the Sumitomo Investors, the FirstEnergy Investors, the
Triumph Investors, the First Dominion Investors, the TCW Investors and
the Management Stockholders will be entitled, from time to time, to
Transfer any or all of the shares of Common Stock, Antidilution
Warrants and Series C Preferred Stock owned by him or it to (A) any of
his or its Affiliates who agree by delivery of a transfer
acknowledgment in form and substance reasonably acceptable to the
Company to become a party to, and be bound to the same extent as its
transferor by the terms of, this Agreement or (B) any of the other
Equityholders (provided that no Transfers will be effected by USX RTI
Holdings or any other USX Investors who are Affiliates of USX RTI
Holdings or by Kobe RTI Holdings or any other Kobe Investors who are
Affiliates of Kobe RTI Holdings under this clause (B) for less than the
fair market value of any Common Stock Transferred for so long as USX
RTI Holdings and Kobe RTI Holdings are subject to indemnification
obligations under Section 18.2 or Section 18.5(a) of the Master
Restructuring Agreement unless the Transferee expressly assumes in
writing in a form reasonably acceptable to the Company all of the
indemnification obligations of the transferor relating to the Common
Stock being Transferred), (ii) prior to the consummation of either a
USX Exchange Event or a Kobe Exchange Event, each of USX RTI Holdings
and Kobe RTI Holdings will be entitled, from time to time, to Transfer
any or all of the RTI Holdings Common Units owned by it to each other
(provided that no such Transfer will be effected if it would result in
a termination of RTI Holdings under Section 708 of the Internal Revenue
Code of 1986, as amended, and provided, further, that no Transfers will
be effected by USX RTI Holdings or by Kobe RTI Holdings under this
clause (ii) for less than the Held Unit Value of such RTI Holdings
Common Units for so long as USX RTI Holdings and Kobe RTI Holdings are
subject to indemnification obligations under Section 18.2 or Section
18.5(a) of the Master Restructuring Agreement unless the Transferee
expressly assumes in writing in a form reasonably acceptable to the
Company all of the indemnification obligations of the transferor
relating to the RTI Holdings Common Units being Transferred, and each
of the Company and RES Holding agrees that it will not Transfer any RTI
Holdings Units for less than the Held Unit Value of such RTI Holdings
Units for so long as the Company is subject to indemnification
obligations under Section 18.3 or Section 18.5(b) of the Master
Restructuring Agreement), and (iii) each of Triumph and TCI-II will be
entitled, in connection with its liquidation, to Transfer all of the
shares of Common Stock owned by it to its partners who agree by
delivery of a transfer acknowledgment in form and substance reasonably
acceptable to the Company to become a party to, and be bound to the
same extent as Triumph or TCI-II, as applicable, by the terms of, this
Agreement. Any Transfer by a Blackstone Investor or any of its
Affiliates to any of its stockholders (or other equity owners) of any
or all of the shares of Common Stock beneficially owned by it
(including a distribution of such shares of Common Stock upon a
liquidation of a Blackstone Investor or any of its Affiliates or
otherwise) will be deemed to be a Transfer to an Affiliate of a
Blackstone Investor for purposes of this Section 3.2(a).
24
(b) If the Company has not consummated an Initial Public
Offering on or prior to the third anniversary of the Closing Date, the
USX Investors, the Kobe Investors, the Veritas Investors (including
with respect to shares of Common Stock held as Class A Assets of the
Partnerships), the Sumitomo Investors, the FirstEnergy Investors, the
Triumph Investors, the First Dominion Investors and the TCW Investors
thereafter will be entitled to Transfer shares of Common Stock and
Series C Preferred Stock and Antidilution Warrants without obtaining
the prior written consent of BCPII (but subject to the other provisions
of this Agreement) pursuant to this Section 3.2(b) as follows. Except
as set forth in Section 3.1(c)(i) through (viii) above, commencing on
the third anniversary of the Closing Date, if at any time prior to the
fifth anniversary of the Closing Date any of the USX Investors, the
Kobe Investors, the Veritas Investors, the Sumitomo Investors, the
FirstEnergy Investors, the Triumph Investors, the First Dominion
Investors or the TCW Investors proposes to Transfer shares of Common
Stock, shares of Series C Preferred Stock and/or Antidilution Warrants
pursuant to this Section 3.2(b), it first shall make an irrevocable
written offer to the Company and the Blackstone Investors to sell to
them the shares of Common Stock, shares of Series C Preferred Stock
and/or Antidilution Warrants that it proposes to Transfer (a "First
Offer"), setting forth the number of shares of Common Stock and
Antidilution Warrants offered to be sold, the cash purchase price per
share for such Common Stock and/or Series C Preferred Stock and per
warrant for such Antidilution Warrants and any other terms and
conditions of such First Offer. Upon written notice to such Stockholder
not more than fifteen (15) Business Days following receipt of the
notice from such Stockholder described in the preceding sentence, the
Blackstone Investors (or their designee, including the Company if it so
agrees) shall have the right (but not the obligation) to irrevocably
elect to purchase all (but not less than all) of the shares of Common
Stock, shares of Series C Preferred Stock and Antidilution Warrants
offered in the First Offer (on the terms and conditions set forth in
the First Offer, and if they so elect, such Transfer to the Blackstone
Investors (or their designee) shall be consummated as promptly as
practicable (but in any event within twenty (20) Business Days
following such election, subject to any delays resulting from
regulatory approvals). If the Blackstone Investors elect not to
purchase (or designate a purchaser for) such offered shares of Common
Stock, shares of Series C Preferred Stock and Antidilution Warrants
(including by failing to provide the irrevocable purchase notice
described in the preceding sentence within the specified time period),
such Stockholder thereafter shall be permitted to sell all (but not
less than all) of the shares of Common Stock, shares of Series C
Preferred Stock and Antidilution Warrants offered in the First Offer to
any Person, provided that a definitive agreement with respect to such
sale shall have been entered into with such Person within 150 days
following the Blackstone Investors' election not to purchase (or
designate a purchaser for) such shares, and provided further that such
sale shall be on terms and conditions no more favorable to such
purchaser than those offered to the Blackstone Investors in the First
Offer (including without limitation at a price per share of Common
Stock, share of Series C Preferred Stock and warrant at least equal to
that offered to the Blackstone Investors in the First Offer); provided,
however, that if the consideration to be paid by such Person includes
non-cash economic consideration, the total price per share and warrant
(including the fair market value of such non-cash economic
consideration) shall be at least equal to the cash
25
price per share and warrant offered to the Blackstone Investors in the
First Offer, and in such event USX, Kobe, Veritas, Sumitomo,
FirstEnergy, Triumph, TCI-II, First Dominion, TCWLIT, TCWLITII,
TCWSOFII, SOFIIB or SOFIII, as applicable, and BCPII promptly shall
negotiate in good faith to reach agreement as to the fair market value
of such non-cash economic consideration; and provided, further, that if
USX, Kobe, Veritas, Sumitomo, FirstEnergy, Triumph, TCI-II, First
Dominion, TCWLIT, TCWLITII, TCWSOFII, SOFIIB or SOFIII, as applicable,
and BCPII fail to reach such agreement within 10 Business Days
following notice to BCPII of the terms of such non-cash economic
consideration, the fair market value of such non-cash economic
consideration shall be determined as follows: (A) if USX, Kobe,
Veritas, Sumitomo, FirstEnergy, Triumph, TCI-II, First Dominion,
TCWLIT, TCWLITII, TCWSOFII, SOFIIB or SOFIII, as applicable, and BCPII
can agree on a single Valuer within five Business Days after the end of
such 10 Business Day period, such Valuer promptly shall determine the
fair market value of such non-cash economic consideration (and each of
the Transferring USX Investors, Kobe Investors, Veritas Investors,
Sumitomo Investors, FirstEnergy Investors, Triumph Investors, First
Dominion Investors or TCW Investors, as applicable, together will bear
a pro rata portion of the costs of such Valuer and the Company will
bear the remainder of such costs), or (B) if USX, Kobe, Veritas,
Sumitomo, FirstEnergy, Triumph, TCI-II, First Dominion, TCWLIT,
TCWLITII, TCWSOFII, SOFIIB or SOFIII, as applicable, and BCPII cannot
agree on a single Valuer within five Business Days after the end of
such 10 Business Day period, within two Business Days thereafter BCPII
shall select a Valuer and USX, Kobe Veritas, Sumitomo, FirstEnergy,
Triumph, TCI-II, First Dominion, TCWLIT, TCWLITII, TCWSOFII, SOFIIB or
SOFIII, as applicable, shall select a second Valuer, each of which
promptly shall determine the fair market value of such non-cash
economic consideration, and (I) if the valuations of such two Valuers
differ by an amount which is twenty percent or less of the higher
valuation, the fair market value of such non-cash economic
consideration shall be calculated by averaging the valuations of such
two Valuers (and the Company will bear the costs of the Valuer BCPII
selects and the Transferring USX Investors, Kobe Investors, Veritas
Investors, Sumitomo Investors, FirstEnergy Investors, Triumph
Investors, First Dominion Investors or TCW Investors, as applicable,
together will bear the costs of the Valuer they select), or (II) if the
valuations of such two Valuers differ by an amount which is more than
twenty percent of the higher valuation, within two Business Days
thereafter the two Valuers shall select a third Valuer, which Valuer
promptly shall make its own valuation and shall choose the valuation
performed by the first two Valuers which most closely reflects its own
valuation, and the valuation so selected will be deemed to constitute
the fair market value of such non-cash economic consideration (and if
such third Valuer is used, each of the Transferring USX Investors, Kobe
Investors, Veritas Investors, Sumitomo Investors, FirstEnergy
Investors, Triumph Investors, First Dominion Investors or TCW
Investors, as applicable, together will bear a pro rata share of the
costs of such Valuer and the Company will bear the remainder of such
cost). From and after the fifth anniversary of the Closing Date, the
USX Investors, Kobe Investors, Veritas Investors, Sumitomo Investors,
FirstEnergy Investors, Triumph Investors, First Dominion Investors and
TCW Investors may Transfer shares of Common Stock and Antidilution
Warrants pursuant to this Section 3.2(b) without the prior consent of
BCPII and without being required to make
26
a First Offer to the Company or the Blackstone Investors (but subject
to the other provisions of this Agreement).
3.3 Effect of Void Transfers. In the event of any purported Transfer in
violation of the provisions of this Agreement, such purported Transfer will be
void and of no effect and the Company will not give effect to such Transfer.
3.4 Legend on Securities. RTI Holdings Units will be issued solely in
uncertificated "book-entry" form. Each certificate representing unregistered
shares of Common Stock, options, warrants or securities convertible into Common
Stock issued by the Company will bear the following legend on the face thereof,
in the case of Common Stock, or an equivalent legend in the case of options,
warrants or convertible securities:
"THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT
TO AN EQUITYHOLDERS AGREEMENT AMONG BLACKSTONE CAPITAL PARTNERS II
MERCHANT BANKING FUND II L.P., BLACKSTONE OFFSHORE CAPITAL PARTNERS II
L.P., BLACKSTONE FAMILY INVESTMENT PARTNERSHIP II L. P., BRW STEEL
HOLDINGS, L.P., BRW STEEL OFFSHORE HOLDINGS, L.P. AND EACH OTHER
EQUITYHOLDER PARTY THERETO AND REPUBLIC TECHNOLOGIES INTERNATIONAL,
INC. (THE "COMPANY") DATED AUGUST 13, 1999, A COPY OF WHICH IS ON FILE
WITH THE SECRETARY OF THE COMPANY. NO TRANSFER, SALE, ASSIGNMENT,
PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE MAY BE MADE EXCEPT IN ACCORDANCE WITH
THE PROVISIONS OF SUCH EQUITYHOLDERS AGREEMENT. THE HOLDER OF THIS
CERTIFICATE, BY ACCEPTANCE OF THIS CERTIFICATE, AGREES TO BE BOUND BY
ALL OF THE PROVISIONS OF SUCH EQUITYHOLDERS AGREEMENT."
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR
ANY STATE SECURITIES LAW AND, ACCORDINGLY, MAY NOT BE TRANSFERRED,
SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF
(COLLECTIVELY, A TRANSFER) UNLESS (A) SUCH TRANSFER IS MADE PURSUANT TO
A REGISTRATION STATEMENT OR POST-EFFECTIVE AMENDMENT THERETO EFFECTIVE
UNDER THE SECURITIES ACT, (B) IN THE OPINION OF COUNSEL SATISFACTORY TO
THE COMPANY, SUCH TRANSFER IS EXEMPT FROM OR NOT SUBJECT TO THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT AND THE SECURITIES LAWS
OF ANY STATE OR OTHER JURISDICTION, OR (C) A NO-ACTION LETTER FROM THE
STAFF OF THE SECURITIES AND EXCHANGE COMMISSION, SATISFACTORY TO
COUNSEL FOR THE COMPANY, SHALL HAVE BEEN OBTAINED WITH RESPECT TO SUCH
TRANSFER."
27
3.5 Tag-Along Rights. (a) With respect to any proposed Transfer of
Common Stock permitted hereunder (other than Transfers permitted by Section
3.2(a), Transfers in connection with a Public Offering and Transfers pursuant to
Rule 144 under the Securities Act) by (A) Blackstone Investors (including any
Transfer of Common Stock held directly or as a Class B Asset of a Partnership)
or (B) Veritas Investors (including any Transfer of Common Stock held directly
or as a Class A Asset of a Partnership), (in either such case, such Transferring
Stockholder(s), collectively, the "Transferring Stockholder", provided that if
both clause (A) and clause (B) would otherwise initially be applicable to the
same transaction, only clause (A) shall be deemed to apply to such transaction,
and for purposes of the pro ration formula set forth below in this Section
3.5(a) such Transferring Stockholder shall be deemed to have proposed to
Transfer all of the Common Stock initially proposed to be Transferred by the
Blackstone Investors and Veritas Investors in connection with such transaction),
the Transferring Stockholder will not Transfer such Common Stock, and the USX
Investors, Kobe Investors, Sumitomo Investors, FirstEnergy Investors, Triumph
Investors, First Dominion Investors, TCW Investors, Veritas Investors and
Partnerships (with respect to Class A Assets) (if such Transferring Stockholder
is a Blackstone Investor), and Blackstone Investors and Partnerships (with
respect to Class B Assets) (if such Transferring Stockholder is a Veritas
Investor) (collectively, the "Tagging Equityholders") will have the right but
not the obligation to require the Transferring Stockholder not to Transfer such
Common Stock unless the proposed transferee purchases from each such Tagging
Equityholder who so elects a number of shares of Common Stock equal to the
number derived by multiplying (x) the total number of shares of Common Stock
Beneficially Owned by the Tagging Equityholder by (y) a fraction, the numerator
of which is the total number of shares of Common Stock that the Transferring
Stockholder ultimately is permitted to Transfer to such transferee (pursuant to
this Section 3.5(a) and any other tag-along rights to which such Transferring
Stockholder is subject) and the denominator of which is the total number of
shares of Common Stock Beneficially Owned by the Transferring Stockholder prior
to such Transfer, and at the same price per share of Common Stock and upon the
same economic terms and subject to the same conditions (including, without
limitation, time of payment and form of consideration) as to be paid and given
to the Transferring Stockholder; provided, that in order to be entitled to
exercise its right to sell shares of Common Stock to the proposed transferee
pursuant to this Section 3.5, each Tagging Equityholder must agree to make to
the transferee such reasonable representations, warranties, covenants,
indemnities and agreements as the transferee may require in connection with the
proposed Transfer of the shares of Common Stock of the Transferring Stockholder
(provided that they shall be made proportionally, severally and not jointly, and
provided, further, that Tagging Equityholders will not be required to make any
representation, warranty, covenant, indemnity or agreement not also being made
by the Transferring Stockholder); and provided, further, that if the
Transferring Stockholder is other than BCPII and/or other Blackstone Investors
that are Affiliates of BCPII, or Veritas Capital and/or other Veritas Investors
that are Affiliates of BCPII, an Equityholder shall only be entitled to
participate in a Transfer as a Tagging Equityholder pursuant to this Section 3.5
if such Equityholder and its Affiliates collectively owned, directly and
indirectly on a fully diluted basis, fewer shares of Common Stock than the
Transferring Stockholder and its Affiliates collectively owned, directly and
indirectly on a fully diluted basis, at the time such Transferring Stockholder
became a Stockholder of the Company; and provided, further, that, following
consummation of an Initial Public Offering, an Equityholder shall only be
entitled to participate
28
in a Transfer as a Tagging Equityholder pursuant to this Section 3.5 if such
Equityholder and its Affiliates collectively own, directly and indirectly on a
fully diluted basis, fewer shares of Common Stock than the Transferring
Stockholder and its Affiliates collectively own, directly and indirectly on a
fully diluted basis, immediately prior to such proposed Transfer.
(b) The Transferring Stockholder will give, or cause to be
given, written notice to each Tagging Equityholder of each proposed
Transfer giving rise to the rights of such Tagging Equityholder set
forth in the first sentence of Section 3.5(a) promptly after reaching
agreement regarding a Transfer with the Transferee, but in no event
less than fifteen (15) Business Days prior to the proposed consummation
of such Transfer, setting forth the number of shares of Common Stock
proposed to be so Transferred by the Transferring Stockholder, the name
and address of the proposed transferee, the proposed amount and form of
consideration (and if such consideration is in part or in whole other
than cash, the Transferring Stockholder will provide such information,
to the extent reasonably available to the Transferring Stockholder,
relating to such consideration as the Tagging Equityholder may
reasonably request in order to evaluate such non-cash consideration)
and other terms and conditions of the Transfer, including payment
offered by the proposed transferee, and a representation that the
proposed transferee has been informed of the tag-along rights provided
for in this Section 3.5 and has agreed to purchase all the shares of
Common Stock which the Tagging Equityholder is entitled to Transfer in
accordance with the terms hereof. The Transferring Stockholder will
deliver or cause to be delivered to each Tagging Equityholder copies of
all transaction documents relating to the proposed Transfer which shall
include provisions relating to the Transfer by the Tagging Equityholder
(including draft and final versions of such documents) promptly as the
same become available. The tag-along rights provided by this Section
3.5 must be irrevocably exercised by each Tagging Equityholder within
ten (10) Business Days following receipt of the notice required by the
first sentence of this Section 3.5(b) (or will be deemed not to be
exercised for purposes of such Transfer by the Transferring
Stockholder), by delivery of a written notice to the Transferring
Stockholder indicating the desire of such Tagging Equityholder to
exercise its rights and specifying the number of shares of Common Stock
it desires to sell. The Transferring Stockholder will be entitled under
this Section 3.5 to Transfer to the proposed transferee the number of
shares of Common Stock calculated in accordance with Section 3.5(a).
(c) If any Tagging Equityholder exercises its rights under
Section 3.5(a), the closing of the purchase of the Common Stock with
respect to which such rights have been exercised will take place
concurrently with the closing of the sale of the Transferring
Stockholder's Common Stock; provided, however, that the sale of the
Transferring Stockholder's Common Stock and each Tagging Equityholder's
Common Stock will be delayed to the extent necessary (up to a maximum
of 60 days (provided, however, that, in the event of any request for
additional information from a regulatory authority, such 60 day period
shall be extended for an additional 30 days), after which such sale may
be consummated by the remaining Equityholders without further regard to
the requirements of this Section 3.5) for each such Equityholder to
obtain any necessary regulatory approvals in connection with such
Transfers (including without limitation regulatory
29
approvals relating to the consummation of a USX Exchange Event and/or
Kobe Exchange Event, as applicable), and each such Equityholder and the
Company agrees to use its reasonable best efforts to obtain any
regulatory approvals necessary for its Transfer as promptly as possible
and to assist such other Equityholders in all reasonable respects in
obtaining any regulatory approvals necessary for their Transfers.
3.6 Drag-Along Rights. (a) So long as this Agreement remains in effect
and the Blackstone Investors and their Affiliates collectively own, directly and
indirectly on a fully diluted basis, at least 31% of the Common Stock, if any of
the Blackstone Investors receives a bona fide offer from a Person other than a
Blackstone Investor or any of its Affiliates (a "Third Party") to purchase in an
arms'-length transaction all, but not less than all, of the outstanding shares
of Common Stock owned by the Equityholders (including for such purpose all
shares of Common Stock obtainable upon (i) the exercise of then-exercisable
options, warrants or other rights to acquire Common Stock (which will be
exercised in connection therewith), (ii) the conversion of other
then-convertible securities of the Company (including without limitation shares
of Series C Preferred Stock) which are convertible into Common Stock (which will
be converted in connection therewith, provided that such securities will not be
required to be converted into Common Stock (and this Section 3.6 nevertheless
will apply with respect to all other Common Stock owned by the holder of such
convertible securities and all Common Stock owned by the other Equityholders) if
the price per share of Common Stock to be paid by the Third Party is less than
the price per share of Common Stock at which such convertible securities are
then convertible into Common Stock), and (iii) the occurrence of a USX Exchange
Event and Kobe Exchange Event (and a USX Exchange Event and Kobe Exchange Event
will be effected in connection therewith if not previously effected), and such
offer is accepted by such Blackstone Investor (in such capacity, a "Dragging
Stockholder"), then each Equityholder hereby agrees that it will Transfer upon
written request by the Blackstone Investors all shares of Common Stock
Beneficially Owned by it to such Third Party on the economic terms of the offer
so accepted by such Blackstone Investor, including the same economic
consideration per share of Common Stock (subject to the following proviso with
respect to the form of such consideration) (and each Equityholder will exercise
any then-exercisable options, warrants or other rights to acquire or obtain
Common Stock and convert any then-convertible securities of the Company into
shares of Common Stock as described above in this sentence, and the USX
Investors and Kobe Investors will exchange any RTI Holdings Common Units then
held by them for shares of Common Stock pursuant to Section 4.1 hereof, in each
case upon such written request by the Blackstone Investors); provided, however,
that, unless they may otherwise agree, subject to the following two provisos,
none of the USX Investors, Kobe Investors, Veritas Investors, Sumitomo
Investors, FirstEnergy Investors, Triumph Investors, First Union Investors or
TCW Investors will be required to Transfer any shares of Common Stock pursuant
to this Section 3.6(a) unless such Transfer results in an all-cash payment to
such investor with respect to all of its shares of Common Stock (with such cash
payment in each case to be made by the Third Party or, if the consideration
offered by the Third Party does not consist entirely of cash, by one or more
other Persons designated by the Blackstone Investors), provided that such
payment is on the same economic terms offered to the majority Stockholders of
the Company, including the same price per share of Common Stock; and provided,
further, that if the Dragging Stockholder is to receive economic consideration
other than cash for its shares of Common Stock (in whole or in part), the
30
USX Investors, Kobe Investors, Veritas Investors, Sumitomo Investors,
FirstEnergy Investors, Triumph Investors, First Union Investors and TCW
Investors shall be entitled to receive cash consideration in an amount per share
of Common Stock equal to the fair market value of the non-cash economic
consideration to be received by the Dragging Stockholder per share of Common
Stock, and in such event USX, Kobe, Veritas Capital, Sumitomo, FirstEnergy,
Triumph, TCI-II, First Union, TCWLIT, TCWLITII, TCWSOFII, SOFIIB, SOFIII and the
Dragging Stockholder promptly shall negotiate in good faith to reach agreement
as to the fair market value of such non-cash economic consideration; and
provided, further, that if USX, Kobe, Veritas, Sumitomo, FirstEnergy, Triumph,
TCI-II, First Union, TCWLIT, TCWLITII, TCWSOFII, SOFIIB, SOFIII and the Dragging
Stockholder fail to reach such agreement within ten (10) Business Days following
notice to USX, Kobe, Veritas, Sumitomo, FirstEnergy, Triumph, TCI-II, First
Union, TCWLIT, TCWLITII, TCWSOFII, SOFIIB and SOFIII of the terms of such
non-cash economic consideration, the fair market value of such non-cash economic
consideration shall be determined as follows: (A) if USX, Kobe, Veritas,
Sumitomo, FirstEnergy, Triumph, TCI-II, First Union, TCWLIT, TCWLITII, TCWSOFII,
SOFIIB, SOFIII and the Dragging Stockholder can agree on a single Valuer to act
as appraiser within five (5) Business Days after the end of such ten (10)
Business Day period, such Valuer promptly shall determine the fair market value
of such non-cash economic consideration (and the Dragging Stockholder, USX
Investors, Kobe Investors, Veritas Investors, Sumitomo Investors, FirstEnergy
Investors, Triumph Investors, First Union Investors and TCW Investors together
will equally bear the costs of such Valuer), or (B) if USX, Kobe, Veritas,
Sumitomo, FirstEnergy, Triumph, TCI-II, First Union, TCWLIT, TCWLITII, TCWSOFII,
SOFIIB, SOFIII and the Dragging Stockholder cannot agree on a single Valuer
within five (5) Business Days after the end of such ten (10) Business Day
period, within two (2) Business Days thereafter the Dragging Stockholder shall
select a Valuer and USX, Kobe, Veritas, Sumitomo, FirstEnergy, Triumph, TCI-II,
First Union, TCWLIT, TCWLITII, TCWSOFII, SOFIIB and SOFIII together shall select
a second Valuer, each of which promptly shall determine the fair market value of
such non-cash economic consideration, and (I) if the valuations of such two
Valuers differ by an amount which is twenty percent or less of the higher
valuation, the fair market value of such non-cash economic consideration shall
be calculated by averaging the valuations of such two Valuers (and the Dragging
Stockholder will bear the costs of the Valuer it selects and the USX Investors,
Kobe Investors, Veritas Investors, Sumitomo Investors, FirstEnergy Investors,
Triumph Investors, First Union Investors and TCW Investors together will bear
the costs of the Valuer they select), or (II) if the valuations of such two
Valuers differ by an amount which is more than twenty percent of the higher
valuation, within two (2) Business Days thereafter the two Valuers shall select
a third Valuer, which Valuer promptly shall make its own valuation and shall
choose the valuation performed by the first two Valuers which most closely
reflects its own valuation, and the valuation so selected will be deemed to
constitute the fair market value of such non-cash economic consideration (and if
such third Valuer is used, the Dragging Stockholder, USX Investors, Kobe
Investors, Veritas Investors, Sumitomo Investors, FirstEnergy Investors, Triumph
Investors, First Union Investors and TCW Investors together will equally bear
the costs of such Valuer).
(b) The Dragging Stockholder will give written notice (the
"Drag-Along Notice") to each of the other Equityholders of any proposed
Transfer giving rise to the rights of such Dragging Stockholder set
forth in Section 3.6(a) as soon as practicable
31
following the acceptance of the offer referred to in Section 3.6(a).
The Drag-Along Notice will set forth the total number of shares of
Common Stock owned by the Blackstone Investors and proposed to be so
Transferred, the name of the proposed transferee, the proposed amount
and form of consideration (and if such consideration consists in part
or in whole of property other than cash, the Dragging Stockholder will
provide such information, to the extent reasonably available to the
Dragging Stockholder, relating to such consideration as the
Equityholder may reasonably request in order to evaluate such non-cash
consideration) and the other terms and conditions of the offer. The
Dragging Stockholder will notify USX, Kobe, Veritas, Sumitomo,
FirstEnergy, Triumph, TCI-II, First Union, TCWLIT, TCWLITII, TCWSOFII,
SOFIIB and SOFIII at least fifteen (15) Business Days in advance of
entering into a definitive agreement in connection with such offer if
any of such Equityholders will be required to sign any agreement
containing representations, warranties and indemnities and will provide
in advance to each of the other Equityholders subject to the Drag-Along
Notice a copy of all agreements or drafts thereof relating to the offer
including the representations, warranties and indemnities proposed to
be made by such Equityholders. In any such agreement such Equityholders
will be required to make to the transferee such reasonable
representations, warranties and indemnities as the Dragging Stockholder
so long as they are made severally and not jointly and in proportion to
the number of shares of Common Stock being Transferred by each
Equityholder, and provided that each such Equityholder's liability
therefore is limited to the proceeds it receives from such sale. The
Company will pay the reasonable fees and expenses of one counsel for
the other Equityholders as well as counsel for the Blackstone Investors
in connection with any transaction referred to in this Section 3.6. If
the Transfer referred to in the Drag-Along Notice is not consummated
within 120 days from the date of the Drag-Along Notice, the Dragging
Stockholder will deliver another Drag-Along Notice and comply with all
its other obligations under this Section 3.6 in order to exercise its
rights hereunder with respect to such Transfer or any other Transfer.
The sale of each Equityholder's Common Stock pursuant to this Section
3.6 will be delayed to the extent necessary for each Equityholder to
obtain any necessary regulatory approvals in connection with such
Transfers (including without limitation regulatory approvals relating
to the consummation of a USX Exchange Event and/or Kobe Exchange Event,
as applicable), and each Equityholder and the Company agrees to use its
reasonable best efforts to obtain any regulatory approvals necessary
for its Transfer as promptly as possible and to assist the other
Equityholders in all reasonable respects in obtaining any regulatory
approvals necessary for their Transfers.
3.7 Piggyback Rights. (a) Each time the Company is planning to file a
registration statement under the Securities Act (other than (i) a registration
statement on Form S-4 or S-8 or any similar or successor form, (ii) in
connection with the USWA Offering or (iii) in connection with an Initial Public
Offering consisting solely of shares registered for the account of the Company)
in connection with the proposed offer and sale of Common Stock (or other equity
securities) for the account of the Company or any securityholder of the Company
(in either such case, the "Initiating Party"), the Company will give prompt
written notice thereof to each of the Blackstone Investors, the Partnerships,
the Veritas Investors, the USX Investors, the Kobe Investors, the Sumitomo
Investors, the FirstEnergy Investors, the Triumph Investors, the First
32
Dominion Investors, the TCW Investors and the Management Stockholders regarding
the rights of such parties (collectively, the "Non-Initiating Parties") under
this Section 3.7, at least twenty (20) Business Days prior to the anticipated
filing date of such registration statement. Upon the written request of any
member of the Non-Initiating Parties made within ten (10) Business Days after
the receipt of any such notice from the Company, which request will specify the
shares of Common Stock (the "Piggy-Back Shares") intended to be disposed of by
such member in such offering, the Company will use its reasonable best efforts
to effect the registration under the Securities Act of all Piggy-Back Shares
which the Company has been so requested to register by such Persons to the
extent required to permit the disposition of the Piggy-Back Shares to be
registered; provided, that (i) if, at any time after giving written notice of
its intention to register any Common Stock and prior to the effective date of
the registration statement filed in connection with such registration, the
Initiating Party will determine for any reason not to proceed with the proposed
registration, the Company may at its election give written notice of such
determination to each holder of Piggy-Back Shares and thereupon will be relieved
of its obligation to register any Piggy-Back Shares in connection with such
registration (but not from its obligation to pay the Registration Expenses
incurred in connection therewith), without prejudice, however, to the rights of
any holders of Piggy-Back Shares entitled to request that such registration be
effected as a demand registration under Section 3.8, (ii) if such registration
involves an underwritten offering, each holder of Piggy-Back Shares requesting
to be included in the Company's registration must sell its shares to the
underwriters on the same terms and conditions as reasonably apply to the
Initiating Parties and (iii) each holder of Piggy-Back Shares shall be permitted
to withdraw all or part of such holder's Piggy-Back Shares from a piggy-back
registration at any time prior to the effective date thereof; provided, that the
Company shall be entitled to reimbursement from the holder of such withdrawn
Piggy-Back Shares for any Registration Expenses incurred by the Company solely
as a result of the registration of such Piggy-Back Shares.
(b) If a registration pursuant to this Section 3.7 involves an
underwritten offering and the managing underwriter or underwriters in
good faith advise the Company in writing that, in their opinion, the
number of shares of Common Stock which the Initiating Party, the
holders of Piggy-Back Shares and any other Persons intend to include in
such registration exceeds the largest number of shares of Common Stock
which can be sold in such offering without having an adverse effect on
such offering (including, but not limited to, the price at which the
shares of Common Stock can be sold), then the Company will include the
number of shares of Common Stock in such registration based on the
following order of priority: (A) in the event that the Company or a
Person other than a Stockholder exercising demand registration rights
is the Initiating Party, (i) first, the shares of Common Stock which
such Initiating Party proposes to sell, (ii) second, the Piggy-Back
Shares and any other shares of Common Stock requested to be registered
pursuant to piggy-back registration rights granted by the Company,
allocated pro rata among holders of Piggy-Back Shares and such other
shares of Common Stock based on the number of shares requested to be
registered and (iii) third, any other shares of Common Stock eligible
for such registration, if any, (B) in the event that a Stockholder is
the Initiating Party, (i) first, the shares of Common Stock that each
holder that is a member of a Demand Registration Group has requested to
be included in such
33
registration pursuant to Section 3.8(a) or pursuant to other demand
registration rights granted by the Company, allocated pro rata among
the members of such Demand Registration Group based on their respective
Beneficial Ownership on a fully diluted basis, (ii) second, the shares
of Common Stock that holders of Common Stock have requested be included
in such registration pursuant to Section 3.7(a) or pursuant to other
piggy-back registration rights granted by the Company, allocated pro
rata among such holders based on the number of shares requested to be
registered, (iii) third, the shares of Common Stock which the Company
proposes to sell on its own account, if any, and (iv) fourth, any other
shares of Common Stock that are eligible for such registration, if any.
(c) No registration of Piggy-Back Shares effected pursuant to
a request under this Section 3.7 shall be deemed to have been effected
pursuant to Section 3.8 hereof or shall relieve the Company of its
obligations under Section 3.8 hereof.
3.8 Demand Registrations. (a) Provided the Blackstone Investors
collectively own, directly or indirectly through the Partnerships as Class B
Assets, at least 5% of the Common Stock on a fully diluted basis, upon the
written request from time to time (a "Request") of any Blackstone Investor or
any Affiliate of a Blackstone Investor that holds Common Stock that the Company
effect the registration under the Securities Act of all or part (constituting
not less than 5% of outstanding shares) of the shares of Common Stock owned by
such Blackstone Investors and Affiliates, directly or indirectly through the
Partnerships as Class B Assets, the Company will as expeditiously as practicable
file a registration statement and use its reasonable best efforts to effect the
registration under the Securities Act and the "Blue Sky" laws of such
jurisdictions as any holder of shares of Common Stock being registered under
such registration or any underwriter, if any, reasonably requests of such shares
and cause such registration statement to remain effective for a period of not
less than 180 days; provided, however, that the Company shall not be required to
effect more than three effective registrations pursuant to this Section 3.8(a);
and provided, further, that the Company shall not be required to effect a
registration pursuant to this Section 3.8(a) during the 180 days following
consummation of an Initial Public Offering; and provided, further, that neither
of the two 5% requirements set forth in this sentence will be applicable to a
Request to the extent that the Blackstone Investors were subject to cutbacks
pursuant to Section 3.7(b) or Section 3.8(h) in their immediately preceding
Transfer of Common Stock that resulted in them owning in the aggregate less than
5% of the Common Stock on a fully diluted basis (and therefore being unable to
meet such requirements).
(b) If (i) the Blackstone Investors shall have previously
realized at least $45 million of net cash proceeds from the sale of
Common Stock in one or more transactions yielding at least a 20%
compounded annualized internal rate of return on the entire initial
investment by them (without ascribing any value to any remaining shares
of Common Stock held by the Blackstone Investors), (ii) the Blackstone
Investors have not sold any shares of Common Stock, either directly or
through the Partnerships, within the preceding 180-day period and (iii)
the Partnerships (as Class A Assets) and the Veritas Investors own at
least 5% of the outstanding Common Stock on a fully diluted basis, then
the Veritas Investors and the Partnerships (acting pursuant to a
determination by the Veritas Investors) shall have the right to make
one written request to the Company (a
34
"Partnerships' Request") that the Company effect the registration under
the Securities Act of all or part (constituting not less than 5% of
outstanding shares) of the shares of Common Stock owned by the
Partnerships and the Veritas Investors, whereupon the Company will as
expeditiously as practicable file a registration statement and use its
reasonable best efforts to effect the registration under the Securities
Act and the "Blue Sky" laws of such jurisdictions as any holder of
shares of Common Stock being registered under such registration or any
underwriter, if any, reasonably requests of such shares and cause such
registration statement to remain effective for a period of not less
than 180 days; provided that neither of the two 5% requirements set
forth in this sentence will be applicable to a Request to the extent
that the Veritas Investors and/or the Partnerships (with respect to
Class A Assets) were subject to cutbacks pursuant to Section 3.7(b) or
Section 3.8(h) in their immediately preceding Transfer of Common Stock
that resulted in them owning in the aggregate less than 5% of the
Common Stock on a fully diluted basis (and therefore being unable to
meet such requirements). In addition, commencing 180 days after
consummation of an Initial Public Offering, if the Veritas Investors
and the Partnerships own in the aggregate at least 5% of the
outstanding Common Stock on a fully diluted basis, then the Veritas
Investors and the Partnerships (acting pursuant to a determination of
the Veritas Investors) shall have the right to make one additional
Partnerships' Request to the Company that the Company effect the
registration under the Securities Act of all or part (constituting not
less than 5% of outstanding shares) of the shares of Common Stock owned
by the Veritas Investors and the Partnerships, whereupon the Company
will as expeditiously as practicable use its reasonable best efforts to
effect the registration under the Securities Act of such shares and
cause such registration statement to remain effective for a period of
not less than 180 days; provided that neither of the two 5%
requirements set forth in this sentence will be applicable to a Request
to the extent that the Veritas Investors and/or the Partnerships (with
respect to Class A Assets) were subject to cutbacks pursuant to Section
3.7(b) or Section 3.8(h) in their immediately preceding Transfer of
Common Stock that resulted in them owning in the aggregate less than 5%
of the Common Stock on a fully diluted basis (and therefore being
unable to meet such requirements); and provided, further, that if an
Equityholder other than a Partnership or a Veritas Investor is an
Initiating Party, the Partnerships and the Veritas Investors may make a
Partnerships' Request in connection with such registration
notwithstanding the 180 day requirement set forth in this sentence, and
thereafter such 180 day requirement will no longer apply to
Partnerships' Requests. In addition, if the Blackstone Investors no
longer have any right to make a Request pursuant to Section 3.8(a),
then the Veritas Investors and the Partnerships (with respect to Class
A Assets) shall have the right to make one additional Partnerships'
Request pursuant to this Section 3.8(b) (without regard to clauses (i),
(ii) and (iii) of the first sentence hereof). Notwithstanding the
foregoing, the Company shall not be required to commence a registration
pursuant to this paragraph (b) within 180 days following the
effectiveness of a registration by the Company (A) pursuant to this
paragraph (b) or (B) which entitled the Veritas Investors to
"piggy-back" rights pursuant to Section 3.7 hereof (provided that the
Veritas Investors were permitted to sell all of the shares they
requested pursuant to such piggy-back rights).
35
(c) Commencing 180 days after consummation of an Initial
Public Offering of the Company's Common Stock, if the USX Investors own
at least 5% of the outstanding Common Stock on a fully diluted basis at
the time of each such request, then the USX Investors shall have the
right to make three written requests (each a "USX Request") to the
Company that the Company effect the registration under the Securities
Act and the "Blue Sky" laws of such jurisdictions as any holder of
shares of Common Stock being registered under such registration or any
underwriter, if any, reasonably requests of all or part (constituting
not less than 5% of outstanding shares) of the shares of Common Stock
owned by the USX Investors, whereupon the Company will as expeditiously
as practicable file a registration statement and use its reasonable
best efforts to effect the registration under the Securities Act of
such shares and cause such registration statement to remain effective
for a period of not less than 180 days or longer if so required
pursuant to Section 3.8(h) hereof; provided that the Company shall not
be required to commence a registration pursuant to this paragraph (c)
within 180 days following the effectiveness of a registration by the
Company (A) pursuant to this paragraph (c) or (B) which entitled the
USX Investors to "piggy-back" rights pursuant to Section 3.7 hereof
(provided that the USX Investors were permitted to sell all of the
shares they requested pursuant to such piggy-back rights); and
provided, further, that neither of the two 5% requirements set forth in
this sentence will be applicable to a USX Request to the extent that
the USX Investors were subject to cutbacks pursuant to Section 3.7(b)
or Section 3.8(h) in their immediately preceding Transfer of Common
Stock that resulted in them owning in the aggregate less than 5% of the
Common Stock on a fully diluted basis (and therefore being unable to
meet such requirements); and provided, further, that if an Equityholder
other than a USX Investor is an Initiating Party, the USX Investors may
make a USX Request in connection with such registration notwithstanding
the 180 day requirement set forth in the first clause of this sentence,
and thereafter such 180 day requirement will no longer apply to USX
Requests.
(d) Commencing 180 days after consummation of an Initial
Public Offering of the Company's Common Stock, if the Kobe Investors
own at least 5% of the outstanding Common Stock on a fully diluted
basis at the time of each such request, then the Kobe Investors will
have the right to make three written requests (each a "Kobe Request")
to the Company that the Company effect the registration under the
Securities Act and the "Blue Sky" laws of such jurisdictions as any
holder of shares of Common Stock being registered under such
registration or any underwriter, if any, reasonably requests of all or
part (constituting not less than 5% of outstanding shares) of the
shares of Common Stock owned by the Kobe Investors, whereupon the
Company will as expeditiously as practicable file a registration
statement and use its reasonable best efforts to effect the
registration under the Securities Act of such shares and cause such
registration statement to remain effective for a period of not less
than 180 days; provided that the Company will not be required to
commence a registration pursuant to this paragraph (d) within 180 days
following the effectiveness of a registration by the Company (A)
pursuant to this paragraph (d) or (B) which entitled the Kobe Investors
to "piggy-back" rights pursuant to Section 3.7 hereof (provided that
the Kobe Investors were permitted to sell all of the shares they
requested pursuant to such piggy-back rights); and
36
provided, further, that neither of the two 5% requirements set forth in
this sentence will be applicable to a Kobe Request to the extent that
the Kobe Investors were subject to cutbacks pursuant to Section 3.7(b)
or Section 3.8(h) in their immediately preceding Transfer of Common
Stock that resulted in them owning in the aggregate less than 5% of the
Common Stock on a fully diluted basis (and therefore being unable to
meet such requirements); and provided, further, that if an Equityholder
other than a Kobe Investor is an Initiating Party, the Kobe Investors
may make a Kobe Request in connection with such registration
notwithstanding the 180 day requirement set forth in the first clause
of this sentence, and thereafter such 180 day requirement will no
longer apply to Kobe Requests.
(e) Commencing 180 days after consummation of an Initial
Public Offering of the Company's Common Stock, if the FirstEnergy
Investors own at least 5% of the outstanding Common Stock on a fully
diluted basis at the time of each such request, then the FirstEnergy
Investors will have the right to make one written request (a
"FirstEnergy Request") to the Company that the Company effect the
registration under the Securities Act and the "Blue Sky" laws of such
jurisdictions as any holder of shares of Common Stock being registered
under such registration or any underwriter, if any, reasonably requests
of all or part (constituting not less than 5% of outstanding shares) of
the shares of Common Stock owned by the FirstEnergy Investors,
whereupon the Company will as expeditiously as practicable file a
registration statement and use its reasonable best efforts to effect
the registration under the Securities Act of such shares and cause such
registration statement to remain effective for a period of not less
than 180 days; provided that the Company will not be required to
commence a registration pursuant to this paragraph (d) within 180 days
following the effectiveness of a registration by the Company (A)
pursuant to this paragraph (e) or (B) which entitled the FirstEnergy
Investors to "piggy-back" rights pursuant to Section 3.7 hereof
(provided that the FirstEnergy Investors were permitted to sell all of
the shares they requested pursuant to such piggy-back rights); and
provided, further, that neither of the two 5% requirements set forth in
this sentence will be applicable to a Kobe Request to the extent that
the FirstEnergy Investors were subject to cutbacks pursuant to Section
3.7(b) or Section 3.8(h) in their immediately preceding Transfer of
Common Stock that resulted in them owning in the aggregate less than 5%
of the Common Stock on a fully diluted basis (and therefore being
unable to meet such requirements); and provided, further, that if an
Equityholder other than a FirstEnergy Investor is an Initiating Party,
the FirstEnergy Investors may make a FirstEnergy Request in connection
with such registration notwithstanding the 180 day requirement set
forth in the first clause of this sentence, and thereafter such 180 day
requirement will no longer apply to FirstEnergy Requests.
(f) Promptly upon receipt of any request for a demand
registration pursuant to paragraphs (a), (b), (c), (d) or (e) of this
Section 3.8 (but in no event more than five (5) Business Days
thereafter), the Company shall serve written notice (a "Demand Notice")
of any such registration request to all holders of shares of Common
Stock eligible for registration pursuant to Section 3.7, and the
Company shall include (subject to provisions of subsection (k) hereof)
in such registration shares of Common Stock eligible for registration
pursuant to Section 3.7 with respect to which the Company has received
37
written requests for inclusion therein within ten (10) Business Days
after the Demand Notice has been given to it (subject to the other
provisions of this Section 3.8). Thereafter, the Company may elect to
include in such registration additional shares of Common Stock to be
issued by the Company. All requests made pursuant to this Section
3.8(f) shall specify the aggregate amount of shares of Common Stock to
be registered and the intended method of distribution of such shares.
(g) If the Initiating Party so elects, the offering of shares
of Common Stock pursuant to such demand registration shall be in the
form of an underwritten offering. If any offering pursuant to a demand
registration involves an underwritten offering, the Initiating Party
shall have the right to select the managing underwriter or underwriters
to administer the offering: provided that such managing underwriter
shall be reasonably acceptable to the Company; and provided, further
that the Company shall have the right to select one co-managing
underwriter reasonably acceptable to such Initiating Party for any such
underwritten offering.
(h) If a registration pursuant to this Section 3.8 involves an
underwritten offering and the managing underwriter or underwriters in
good faith advise the Company in writing that, in their opinion, the
number of shares of Common Stock requested to be included in such
registration exceeds the largest number of shares of Common Stock which
can be sold in such offering without having an adverse effect on such
offering (including, but not limited to, the price at which the shares
of Common Stock can be sold), then the Company will include in such
registration the shares of Common Stock sought to be registered therein
according to the following order of priority: (i) first, the shares of
Common Stock that each holder that is a member of a Demand Registration
Group has requested to be included in such registration pursuant to
this Section 3.8 or pursuant to other demand registration rights
granted by the Company, allocated pro rata among such members of the
Demand Registration Group based on their respective Beneficial
Ownership on a fully diluted basis, (ii) second, the shares of Common
Stock that holders of Common Stock have requested be included in such
registration pursuant to Section 3.7(a) or pursuant to other piggy-back
registration rights granted by the Company, allocated pro rata among
such holders based on the number of shares requested to be registered,
(iii) third, the shares of Common Stock which the Company proposes to
sell on its own account, if any, and (iv) fourth, any other shares of
Common Stock that are eligible for such registration, if any.
(i) Registrations under this Section 3.8 shall be on such
appropriate registration form of the SEC (i) as shall be selected by
the Company and as shall be reasonably acceptable to the Initiating
Party and (ii) as shall permit the disposition of such shares in
accordance with the intended method or methods of disposition specified
in such holders' requests for such registration.
38
3.9 Other Registration-Related Matters.
(a) Each Equityholder agrees that it will not effect any sales
of Common Stock or securities convertible into or exercisable or
exchangeable for Common Stock during the 14 days prior to and up to a
180 day (or such shorter period as may be permitted by the
underwriters) period beginning on the effective date of a registration
statement relating to an underwritten public offering of Common Stock
(whether pursuant to Section 3.7 or 3.8 or otherwise, except as part of
such registration) if and to the extent reasonably requested in writing
(with reasonable prior written notice) by the managing underwriter of
the underwritten public offering or by the Company on their behalf.
(b) The Company agrees not to effect any sales of Common Stock
or securities convertible into or exercisable or exchangeable for
Common Stock during the 14 days prior to and the 180 day period (or
such lesser period as may be permitted by the underwriters) beginning
on the effective date of any registration statement in which any
Equityholder is participating in connection with an underwritten public
offering of Common Stock, if and to the extent reasonably requested in
writing (with reasonable prior written notice) by the managing
underwriter of the underwritten public offering except in connection
with the conversion or exercise of previously outstanding options,
warrants or other rights (except, in each case, as part of such
underwritten offering, if permitted, or pursuant to registrations on
Forms S-4 or S-8 or any successor form to such forms or as part of any
registration of securities for offering and sale to management of the
Company pursuant to any employee stock plan or other employee benefit
plan arrangement or registration of securities issued solely in an
acquisition or business combination). The Company agrees to use
reasonable best efforts to obtain from each holder of restricted
securities of the Company the same as or similar to those being
registered by the Company, or any restricted securities convertible
into or exchangeable or exercisable for any of its securities, an
agreement not to effect any public sale or distribution of such
securities (other than securities purchased in a public offering)
during any such period referred to in this paragraph, except as part of
any such registration if permitted.
(c) The Company may require any Person that is selling shares
of Common Stock in a Public Offering pursuant to Section 3.7 or 3.8 to
furnish to the Company in writing such information regarding such
Person and the distribution of the shares of Common Stock which are
included in a Public Offering as may from time to time reasonably be
requested in writing in order to comply with the Securities Act.
(d) The Company will pay all Registration Expenses in
connection with each registration or proposed registration of Common
Stock pursuant to Section 3.7 or 3.8.
(e) Before filing a registration statement or prospectus, or
any amendments or supplements thereto, in connection with any
registration or proposed registration of Common Stock pursuant to
Section 3.7 or 3.8, the Company will furnish to Holders and Holders'
Counsel copies of all documents proposed to be filed, which documents
will be
39
subject to the review of the underwriters and such Holders and their
respective counsel and, except in the case of a registration under
Section 3.7, not file any registration statement or prospectus or
amendments or supplements thereto to which the Initiating Party or the
underwriters, if any, shall reasonably object.
(f) The Company will furnish, without charge, to each seller
of Common Stock such number of copies of the applicable registration
statement and of each amendment or supplement thereto (in each case
including all exhibits), such number of copies of the prospectus
included in such registration statement (including each preliminary
prospectus and summary prospectus), in conformity with the requirements
of the Securities Act, and such other documents as such seller may
reasonably request in order to facilitate the disposition of Common
Stock by such seller (it being understood that the Company consents to
the use of the prospectus or any amendment or supplement thereto by
each of the selling holders of shares of Common Stock and the
underwriters, if any, in connection with the offering and sale of the
shares of Common Stock covered by the prospectus or any amendment or
supplement thereto).
(g) The Company will use its reasonable best efforts to
register or qualify Common Stock covered by a registration statement
under such other securities or blue sky laws of such jurisdictions as
each seller shall reasonably request, and do any and all other acts and
things which may be reasonably necessary or advisable to enable such
seller to consummate the disposition in such jurisdictions of the
Common Stock owned by such seller, except that the Company will not for
any such purpose be required to qualify generally to do business as a
foreign corporation in any jurisdiction where, but for the requirements
of this paragraph (g), it would not be obligated to be so qualified, to
subject itself to taxation in any such jurisdiction, or to consent to
general service of process in any such jurisdiction.
(h) The Company will use its reasonable best efforts to cause
the Common Stock covered by a registration statement to be registered
with or approved by such other governmental agencies or authorities as
may be necessary to enable the seller thereof to consummate the
disposition thereof.
(i) The Company will notify each seller of Common Stock
covered by a registration statement, at any time when a prospectus
relating thereto is required to be delivered under the Securities Act,
within the appropriate period of the Company's becoming aware that the
registration statement or the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein (in the case of the
prospectus and any preliminary prospectus, in light of the
circumstances under which they were made) not misleading or, if for any
other reason it shall be necessary during such time period to amend or
supplement the registration statement or the prospectus in order to
comply with the Securities Act and, in either case, as promptly as
practicable thereafter, prepare and furnish, without charge, to
40
such seller a reasonable number of copies of an amended or supplemental
prospectus which will correct such statement or omission or effect such
compliance.
(j) The Company will enter into such customary agreements
(including an underwriting and indemnification agreement in customary
form) and take such other actions as sellers of such Common Stock or
the underwriters, if any, reasonably request in order to expedite or
facilitate the disposition of such Common Stock.
(k) The Company will make available, upon reasonable notice at
reasonable times and for reasonable periods, for inspection by any
seller of Common Stock covered by a registration statement, by any
underwriter participating in any disposition to be effected pursuant to
such registration statement and by any attorney, accountant or other
agent retained by any such seller or any such underwriter, all
pertinent financial and other records, pertinent corporate documents
and properties of the Company, and cause all of the Company's officers,
directors and employees to supply all information reasonably requested
by any such seller, underwriter, attorney, accountant or agent in
connection with such registration statement (subject to each party
referred to in this clause (k) entering into customary confidentiality
agreements in a form reasonably acceptable to the Company).
(l) The Company will obtain a "cold comfort" letter or letters
from the Company's independent public accountants in customary form and
covering matters of the type customarily covered by "cold comfort"
letters as the sellers of a majority of the outstanding shares of
Common Stock covered by the registration statement shall reasonably
request.
(m) Each Stockholder agrees that, upon receipt of any notice
from the Company of the happening of any event of the kind described in
paragraph (i) such Stockholder will forthwith discontinue disposition
of Common Stock pursuant to the registration statement covering such
Common Stock until such Stockholder's receipt of the copies of the
amended or supplemented prospectus contemplated by paragraph (i) and,
if so directed by the Company, such Stockholder will deliver to the
Company (at the Company's expense) all copies, other than permanent
file copies then in such Stockholder's possession, of the prospectus
covering such Common Stock current at the time of receipt of such
notice. In the event the Company will give any such notice, the period
for which the Company will be required to keep the registration
statement effective will be extended by the number of days during the
period from and including the date of the giving of such notice
pursuant to paragraph (i) to and including the date when each seller of
Common Stock covered by such registration statement has received the
copies of the supplemented or amended prospectus contemplated by
paragraph (i).
(n) The Company will prepare and, in the case of a demand
registration, no later than 60 days after a request for a demand
registration, file with the SEC a registration statement relating to
the shares of Common Stock to be registered including all exhibits and
financial statements required by the SEC to be filed therewith, and use
its
41
reasonable best efforts to cause such registration statement to become
effective under the Securities Act; provided, however, that the Company
may discontinue any registration of its securities that are not the
securities that are eligible for such registration pursuant to Article
3 hereto.
(o) The Company will prepare and file with the SEC such
amendments and post-effective amendments to such registration statement
and supplements to the prospectus as may be (x) reasonably requested by
any participating Holder (to the extent such request relates to
information relating to such Holder), or (y) necessary to keep such
registration effective for the Demand Period (in the case of a demand
registration).
(p) The Company will notify the Holders of shares of Common
Stock and the managing underwriter or underwriters, if any, and (if
requested) confirm such advice in writing, as soon as reasonably
practicable after notice thereof is received by the Company (i) when
the registration statement or any amendment thereto has been filed or
becomes effective, when the prospectus or any amendment or supplement
to the prospectus has been filed, and, to furnish such Holders and
managing underwriter or underwriters, if any, with copies thereof, (ii)
of any written comments by the SEC or any request by the SEC or any
other federal or state governmental authority for amendments or
supplements to the registration statement or the prospectus or for
additional information, (iii) of the issuance by the SEC of any stop
order suspending the effectiveness of the registration statement or any
order preventing or suspending the use of any preliminary or final
prospectus or the initiation or threatening of any proceedings for such
purposes, (iv) if, at any time, the representations and warranties of
the Company contemplated by paragraph (t) below cease to be true and
correct in all material respects and (v) of the receipt by the Company
of any notification with respect to the suspension of the qualification
of the shares of Common Stock for offering or sale in any jurisdiction
or the initiation or threatening of any proceedings for such purpose.
(q) The Company will use reasonable best efforts to prevent or
obtain the withdrawal of any stop order or other order suspending the
use of any preliminary or final prospectus or suspending any
qualification of the shares of Common Stock at the earliest possible
time.
(r) The Company will, if reasonably requested by the managing
underwriter or underwriters or a Holder of shares of Common Stock being
sold in connection with an underwritten offering, promptly incorporate
in a prospectus supplement or post-effective amendment such information
as the managing underwriter or underwriters and the Holders of a
majority of the shares of Common Stock being sold agree should be
included therein relating to the plan of distribution with respect to
such shares of Common Stock, including, without limitation, information
with respect to the number of shares of Common Stock being sold to, and
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 shares of Common Stock
to be sold in such offering; and make all required filings of such
prospectus supplement or post-effective
42
amendment as soon as reasonably practicable after being notified of the
matters to be incorporated in such prospectus supplement or
post-effective amendment.
(s) The Company will cooperate with the Holders of shares of
Common Stock and the managing underwriter, underwriters or agent, if
any, to facilitate the timely preparation and delivery of certificates
representing shares of Common Stock to be sold and not bearing any
restrictive legends; and enable such shares of Common Stock to be in
such denominations and registered in such names as the managing
underwriters may request at least two business days prior to any sale
of shares of Common Stock to the underwriters.
(t) The Company will make such representations and warranties
to the Holders of shares of Common Stock being registered, and the
underwriters or agents, if any, in form, substance and scope as are
customarily made by issuers in secondary underwritten public offerings.
(u) The Company will obtain for delivery to the Holders of
shares of Common Stock being registered and to the underwriter,
underwriters or agent, if any, an opinion or opinions from counsel for
the Company dated the effective date of the registration statement and,
in the event of an underwritten offering, brought down to the date of
execution of the underwriting agreement (if different from such
effective date) and to the closing under the underwriting agreement, in
customary form, scope and substance, which counsel and opinions shall
be reasonably satisfactory to such Holders, underwriters or agents and
their respective counsel.
(v) The Company will cooperate with each seller of shares of
Common Stock and each underwriter or agent, if any, participating in
the disposition of such shares of Common Stock and their respective
counsel in connection with any filings required to be made with the
NASD.
(w) The Company will use its reasonable best efforts to comply
with all applicable rules and regulations of the SEC and make generally
available to its security holders, as soon as reasonably practicable
(but not more than fifteen months) after the effective date of the
registration statement, an earnings statement satisfying the provisions
of Section 11(a) of the Securities Act and the rules and regulations
promulgated thereunder.
(x) The Company will provide and cause to be maintained a
transfer agent and registrar for all shares of Common Stock covered by
such registration statement from and after a date not later than the
effective date of such registration statement.
(y) The Company will cause all shares of Common Stock covered
by the registration statement to be listed on each securities exchange
on which any of the Company's securities are then listed or quoted and
on each inter-dealer quotation system on which any of the Company's
securities are then quoted.
43
(z) The Company will cause the senior executive officers of
the Company to participate in the customary "road show" presentations
that may be reasonably requested by the Holders or the managing
underwriter in any underwritten offering and otherwise to facilitate,
cooperate with, and participate in each proposed offering contemplated
herein and customary selling efforts related thereto.
(aa) Holders may seek to register different classes of Common
Stock simultaneously and the Company shall use its reasonable best
efforts to effect such registration and sale in accordance with the
intended method or methods of disposition specified by such Holders.
3.10 Indemnification. (a) Indemnification by the Company. In the event
of any registration of any securities of the Company under the Securities Act
pursuant to Section 3.7 or 3.8, the Company hereby indemnifies and agrees to
hold harmless, to the full extent permitted by law, each party hereto who is a
holder ("Holder") of securities ("Registrable Securities") covered by such
registration statement, each Affiliate of such Holder and their respective
directors, officers, employees, advisors and agents or general and limited
partners (and the directors, officers, affiliates and controlling Persons
thereof), each other Person who participates as an underwriter in the offering
or sale of such securities and each other Person, if any, who controls such
Holder or any such underwriter within the meaning of the Securities Act
(collectively, the "Indemnified Parties"), against any and all losses, claims,
damages or liabilities (or actions or proceedings in respect thereof, whether or
not such Indemnified Party is a party thereto) (each a "Loss" and collectively
"Losses"), joint or several, and expenses to which such Indemnified Party may
become subject under the Securities Act, common law or otherwise, insofar as
such losses, claims, damages or liabilities that arise out of or are based upon
(i) any untrue statement or alleged untrue statement of any material fact
contained in any registration statement under which such securities were
registered under the Securities Act, any preliminary, final or summary
prospectus contained therein, or any amendment or supplement thereto or any
document incorporated by reference thereto, or (ii) any omission or alleged
omission to state therein (in the case of a prospectus or preliminary
prospectus, in light of the circumstances under which they were made) a material
fact required to be stated therein or necessary to make the statements therein
(in the case of a prospectus or preliminary prospectus, in light of the
circumstances under which they were made) not misleading and the Company will
reimburse such Indemnified Party for any legal or other expenses reasonably
incurred by it in connection with investigating or defending any such Loss;
provided, that the Company will not be liable to any Indemnified Party in any
such case to the extent that any such Loss arises out of or is based upon any
untrue statement or alleged untrue statement or omission or alleged omission
made in such registration statement, in any such preliminary, final or summary
prospectus, or any amendment or supplement thereto in reliance upon and in
conformity with written information with respect to such Indemnified Party
furnished to the Company by such Indemnified Party for use in the preparation
thereof; and provided, further, that the Company will not be liable to any
Person who participates as an underwriter in the offering or sale of Registrable
Securities or any other Person, if any, who controls such underwriter within the
meaning of the Securities Act, under the indemnity agreement in this Section
3.10(a) with respect to any preliminary prospectus or the final prospectus or
the final prospectus as amended or supplemented, as the case may be,
44
to the extent that any such loss, claim, damage or liability of such underwriter
or controlling Person results from the fact that such underwriter sold
Registrable Securities to a person to whom there was not sent or given, at or
prior to the written confirmation of such sale, a copy of the final prospectus
or of the final prospectus as then amended or supplemented, whichever is most
recent, if the Company has previously furnished copies thereof to such
underwriter. Such indemnity will remain in full force and effect regardless of
any investigation made by or on behalf of such Holder or any Indemnified Party
and will survive the transfer of such securities by such Holder.
(b) Indemnification by the Holders and Underwriters. In the
event of registration of any securities of the Company under the
Securities Act pursuant to Sections 3.7 or 3.8 hereof, the Company may
require that each selling Holder of Registrable Securities agrees
(severally and not jointly) to indemnify and hold harmless, to the full
extent permitted by law, the Company, its directors and officers and
each Person who controls the Company (within the meaning of the
Securities Act and the Exchange Act) from and against any Losses
resulting from any untrue statement of a material fact or any omission
of a material fact required to be stated in the registration statement
under which such Registrable Securities were registered under the
Securities Act (including any final, preliminary or summary prospectus
contained therein or any amendment thereof or supplement thereto or any
documents incorporated by reference therein), or necessary to make the
statements therein (in the case of a prospectus or preliminary
prospectus, in light of the circumstances under which they were made)
not misleading, to the extent, but only to the extent, that such untrue
statement or omission is contained in any information furnished in
writing by such selling Holder to the Company specifically for
inclusion in such registration statement and has not been corrected in
a subsequent writing prior to or concurrently with the sale of the
Registrable Securities to the Person asserting such Loss. In no event
shall the liability of any selling Holder of Registrable Securities
hereunder be greater in amount than the dollar amount of the proceeds
received by such Holder under the sale of the Registrable Securities
giving rise to such indemnification obligation. Such indemnity will
remain in full force and effect regardless of any investigation made by
or on behalf of the Company or any of the Holders, or any of their
respective affiliates, directors, officers or controlling Persons and
will survive the transfer of such securities by such Holder.
(c) Notices of Claims, Etc. Promptly after receipt by an
indemnified party hereunder of written notice of the commencement of
any action or proceeding with respect to which a claim for
indemnification may be made pursuant to this Section 3.10, such
indemnified party will, if a claim in respect thereof is to be made
against an indemnifying party, give written notice to the latter of the
commencement of such action; provided, that the failure of the
indemnified party to give notice as provided herein will not relieve
the indemnifying party of its obligations under Sections 3.10(a) or
3.10(b), except to the extent that the indemnifying party is actually
prejudiced by such failure to give notice. In case any such action is
brought against an indemnified party, unless in such indemnified
party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist in respect of such
claim, the
45
indemnifying party will be entitled to participate in and to assume the
defense thereof, jointly with any other indemnifying party similarly
notified to the extent that it may wish, with counsel reasonably
satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party will not be liable
to such indemnified party for any legal or other expenses subsequently
incurred by the latter in connection with the defense thereof other
than reasonable costs of investigation. If, in such indemnified party's
reasonable judgment, (i) having common counsel would result in a
conflict of interest between the interests of such indemnified and
indemnifying parties, (ii) the indemnifying party shall have failed to
assume the defense of such claim within a reasonable time after receipt
of notice of such claim from the indemnified party, or (iii) the
indemnified party has reasonably concluded (based on advice of counsel)
that there may be legal defenses available to it or other indemnified
parties that are different from or in addition to those available to
the indemnifying party, then such indemnified party may employ separate
counsel reasonably acceptable to the indemnifying party to represent or
defend such indemnified party in such action, it being understood,
however, that the indemnifying party will not be liable for the
reasonable fees and expenses of more than one separate firm of
attorneys at any time for all such indemnified parties (and not more
than one separate firm of local counsel at any time for all such
indemnified parties) in such action. No indemnifying party will consent
to entry of any judgment or enter into any settlement which does not
include as an unconditional term thereof the giving by the claimant or
plaintiff to such indemnified party of a release from all liability in
respect of such claim or litigation.
(d) Other Indemnification. Indemnification similar to that
specified in this Section 3.10 (with appropriate modifications) will be
given by the Company and each Holder of Registrable Securities with
respect to any required registration or other qualification of
securities under any federal or state law or regulation or governmental
authority other than the Securities Act.
(e) The indemnification required by this Section 3.10 shall be
made by periodic payments of the amount thereof during the course of
the investigation or defense, promptly as and when bills are received
or Losses are incurred.
(f) Contribution. If recovery is not available under the
foregoing indemnification provisions of this Section 3.10 for any
reason other than as expressly specified therein, the parties entitled
to indemnification by the terms thereof will be entitled to
contribution to liabilities and expenses except to the extent that
contribution is not permitted under Section 11(f) of the Securities
Act. In determining the amount of contribution to which the respective
parties are entitled, there will be considered the relative benefits
received by each party from the offering of the Registrable Securities
(taking into account the portion of the proceeds realized by each), the
parties' relative knowledge and access to information concerning the
matter with respect to which the claim was asserted, the opportunity to
correct and prevent any misstatement or omission and any other
equitable considerations appropriate under the circumstances.
46
Notwithstanding anything in this Section 3.10(f) to the contrary, no
indemnifying party (other than the Company) shall be required pursuant
to this Section 3.l0(f) to contribute any amount in excess of the
amount by which the net proceeds received by such indemnifying party
from the sale of Registrable Securities in the offering to which the
Losses of the indemnified parties relate exceeds the amount of any
damages which such indemnifying party has otherwise been required to
pay by reason of such untrue statement or omission. The parties hereto
agree that it would not be just and equitable if contribution pursuant
to this Section 3.10(f) were determined by pro rata allocation or by
any other method of allocation that does not take account of the
equitable considerations previously referred.
(g) Non-Exclusivity. The obligations of the parties under this
Section 3.10 will be in addition to any liability which any party may
otherwise have to any other party.
3.11 Preemptive Rights. In the event that the Company engages in an
Initial Public Offering pursuant to which it issues Common Stock to the public
from the IPO Equity Basket, (a) the USX Investors will have the right, upon
irrevocable written notice to the Company not less than ten (10) Business Days
after receipt of written notice from the Company of its intention to file the
initial registration statement in connection with such Initial Public Offering,
to purchase in the aggregate in such Initial Public Offering (on the same terms
and conditions applicable to public investors purchasing a like number of shares
in such offering, and subject to the consummation of such offering) that number
of shares of Common Stock equal to the product of (i) the total number of shares
of Common Stock issued by the Company in such Initial Public Offering,
multiplied by (ii) a fraction the numerator of which is the number of shares of
Common Stock owned by the USX Investors in the aggregate on a fully diluted
basis immediately prior to the Company's receipt of such written notice and the
denominator of which is the total number of shares of Common Stock outstanding
on a fully diluted basis immediately prior to the Company's receipt of such
written notice, and (b) the Kobe Investors will have the right, upon irrevocable
written notice to the Company not less than ten (10) Business Days after receipt
of written notice from the Company of its intention to file the initial
registration statement filed by the Company in connection with such Initial
Public Offering, to purchase in the aggregate in such Initial Public Offering
(on the same terms and conditions applicable to public investors purchasing a
like number of shares in such offering, and subject to the consummation of such
offering) that number of shares of Common Stock equal to the product of (i) the
total number of shares of Common Stock issued by the Company in such Initial
Public Offering, multiplied by (ii) a fraction the numerator of which is the
number of shares of Common Stock owned by the Kobe Investors in the aggregate on
a fully diluted basis immediately prior to the Company's receipt of such written
notice and the denominator of which is the total number of shares of Common
Stock outstanding on a fully diluted basis immediately prior to the Company's
receipt of such written notice. Any shares of Common Stock to be purchased by
the USX Investors or the Kobe Investors in an Initial Public Offering pursuant
to their rights under this Section 3.11 will not count against the IPO Equity
Basket (and the number of shares of Common Stock that the Company may issue in
such Initial Public Offering without the favorable vote of a USX Director
designated by USX RTI Holdings and a Kobe Director designated by Kobe RTI
Holdings therefore will be increased by such number of shares of Common Stock).
47
SECTION 4
USX AND KOBE EXCHANGE EVENTS; RTI HOLDINGS UNIT ADJUSTMENTS
4.1 USX Exchange Events and Kobe Exchange Events. (a) USX agrees that,
from the date of its formation through the consummation of a USX Exchange Event,
USX RTI Holdings will remain in existence and be in good standing and will
engage in no activities and contain no assets or liabilities, other than the
holding of RTI Holdings Common Units, Transfers of RTI Holdings Common Units
expressly permitted hereby and the incurrence of indebtedness owed to USX or its
Affiliates; provided, however, that USX agrees that, prior to the consummation
of a USX Exchange Event, USX RTI Holdings will repay in full (or otherwise be
relieved of) all indebtedness, and at the time of the consummation of such USX
Exchange Event will have no liabilities or obligations relating thereto. Kobe
agrees that, from the date of its formation through the consummation of a Kobe
Exchange Event, Kobe RTI Holdings will remain in existence and be in good
standing and will engage in no activities and contain no assets or liabilities,
other than the holding of RTI Holdings Common Units, Transfers of RTI Holdings
Common Units expressly permitted hereby and the incurrence of indebtedness owed
to Kobe Delaware or its Affiliates; provided, however, that Kobe agrees that,
prior to the consummation of a Kobe Exchange Event, Kobe RTI Holdings will repay
in full (or otherwise be relieved of) all indebtedness, and at the time of the
consummation of such Kobe Exchange Event will have no liabilities or obligations
relating thereto. The Company agrees that, through the consummation of a USX
Exchange Event, it will keep available a sufficient amount of authorized Class D
Common Stock to effect a USX Exchange Event (including the issuance of
Antidilution Warrants in connection therewith and the exercise thereof), and
through the consummation of a Kobe Exchange Event, it will keep available a
sufficient amount of authorized Class D Common Stock to effect a Kobe Exchange
Event (including the issuance of Antidilution Warrants in connection therewith
and the exercise thereof).
(b) At any time after the date hereof:
(i) USX RTI Holdings will have the unconditional
and absolute right to exchange (pursuant to an Exchange Merger
as described in paragraph (c) below, subject to the
establishment of another exchange mechanism pursuant to
Section 4.1(e) below) all, but not less than all, of the RTI
Holdings Common Units then owned by it for shares of Class D
Common Stock of the Company and Antidilution Warrants (if
applicable) (the "USX Exchange Right"); and
(ii) Kobe RTI Holdings will have the unconditional
and absolute right to exchange (pursuant to an Exchange Merger
as described in paragraph (c) below, subject to the
establishment of another exchange mechanism pursuant to
Section 4.1(e) below) all, but not less than all, of the RTI
Holdings Common Units then owned by it for shares of Class D
Common Stock of the Company and Antidilution Warrants (if
applicable) (the "Kobe Exchange Right").
48
The USX Exchange Right or Kobe Exchange Right shall be exercised by USX
or Kobe, as applicable, by giving irrevocable written notice thereof of
its election to make such exchange to the Company and to BCPII (the
"Exchange Notice") setting forth the percentage of outstanding RTI
Holdings Common Units then owned by USX RTI Holdings or Kobe RTI
Holdings, as applicable.
(c) Within five (5) Business Days following the Company's
receipt of an Exchange Notice (or within ten (10) Business Days, if
such Exchange Notice includes a proposed alternate exchange mechanism
as described in paragraph (e) below) from:
(i) USX RTI Holdings, the Company, USX, each
Subsidiary of USX that is a direct or indirect parent of USX
RTI Holdings (if any) and USX RTI Holdings will enter into an
Exchange Merger Agreement pursuant to which, in accordance
with the terms thereof and subject to the conditions contained
therein, USX RTI Holdings will be merged with and into the
Company with the Company surviving (subject to the
establishment of a different exchange mechanism pursuant to
Section 4.1(e) below) and USX (or its applicable Subsidiary)
receiving in consideration thereof (A) that number of shares
of Class D Common Stock of the Company equal to the product of
(I) the number of shares of Primary Common Stock issued and
outstanding immediately prior to the consummation of such
merger, multiplied by (II) a fraction the numerator of which
is 1 and the denominator of which is the percentage (expressed
as a decimal) of the total outstanding RTI Holdings Common
Units owned by the Company and its Subsidiaries immediately
prior to the consummation of such merger, multiplied by (III)
the percentage (expressed as a decimal) of the total issued
and outstanding RTI Holdings Common Units owned by USX RTI
Holdings immediately prior to the consummation of such merger,
and (B) that number of Antidilution Warrants equal to the
product of (I) the total number of then-unissued Antidilution
Warrants (as provided for in the definition thereof),
multiplied by (II) a fraction the numerator of which is the
number of RTI Holdings Common Units owned by USX RTI Holdings
immediately prior to the consummation of such merger and the
denominator of which is the number of RTI Holdings Common
Units owned by USX RTI Holdings and Kobe RTI Holdings in the
aggregate immediately prior to the consummation of such
merger; or
(ii) Kobe RTI Holdings, the Company, Kobe Delaware,
each Subsidiary of Kobe Delaware that is a direct or indirect
parent of Kobe RTI Holdings (if any) and Kobe RTI Holdings
will enter into an Exchange Merger Agreement pursuant to
which, in accordance with the terms thereof and subject to the
conditions contained therein, Kobe RTI Holdings will be merged
with and into the Company with the Company surviving (subject
to the establishment of a different exchange mechanism
pursuant to Section 4.1(e) below) and Kobe Delaware (or its
applicable Subsidiary) receiving in consideration thereof (A)
that number of shares of Class D Common Stock of the Company
equal to the product of (I) the number of shares of Primary
Common Stock issued and outstanding immediately
49
prior to the consummation of such merger, multiplied by (II) a
fraction the numerator of which is 1 and the denominator of
which is the percentage (expressed as a decimal) of the total
issued and outstanding RTI Holdings Common Units owned by the
Company and its Subsidiaries immediately prior to the
consummation of such merger, multiplied by (III) the
percentage (expressed as a decimal) of the total issued and
outstanding RTI Holdings Common Units owned by Kobe RTI
Holdings immediately prior to the consummation of such merger,
and (B) that number of Antidilution Warrants equal to the
product of (I) the total number of then-unissued Antidilution
Warrants (as provided for in the definition thereof),
multiplied by (II) a fraction the numerator of which is the
number of RTI Holdings Common Units owned by Kobe RTI Holdings
immediately prior to the consummation of such merger and the
denominator of which is the number of RTI Holdings Common
Units owned by USX RTI Holdings and Kobe RTI Holdings in the
aggregate immediately prior to the consummation of such merger
(either such merger (or other exchange mechanism established pursuant
to Section 4.1(e) below), an "Exchange Merger", and the consideration
to be received by USX or Kobe Delaware (or its applicable Subsidiary),
as applicable, in connection therewith in accordance with this
paragraph (c), the "Exchange Merger Consideration").
(d) Upon written notice to USX and Kobe Delaware not less than
twenty (20) Business Days prior to consummation of an Initial Public
Offering, the Blackstone Investors will have the right to require:
(i) USX RTI Holdings to exercise, and upon receipt
of such notice USX RTI Holdings automatically will be deemed
to have exercised, the USX Exchange Right (if not previously
exercised) pursuant to an Exchange Merger (or such other
exchange mechanism established pursuant to Section 4.1(e)
below); and
(ii) Kobe RTI Holdings to exercise, and upon
receipt of such notice Kobe RTI Holdings automatically will be
deemed to have exercised, the Kobe Exchange Right (if not
previously exercised) pursuant to an Exchange Merger (or such
other exchange mechanism established pursuant to Section
4.1(e) below),
in each case in connection with (and subject to the consummation of)
such Initial Public Offering with the Exchange Merger (or such other
exchange mechanism established pursuant to Section 4.1(e) below)
resulting from each such exercise to be consummated simultaneously with
the consummation of such Initial Public Offering.
(e) In the event that USX RTI Holdings exercises the USX
Exchange Right or Kobe RTI Holdings exercises the Kobe Exchange Right,
and in connection with such exercise USX RTI Holdings or Kobe RTI
Holdings, as applicable, irrevocably offers in its Exchange Notice to
effect such exchange pursuant to a proposed exchange mechanism other
than that described in Section 4.1(c) hereof (including in such
Exchange Notice all
50
of the terms of such mechanism), then such exchange will be effected
pursuant to such proposed mechanism (in lieu of the merger mechanism
described in Section 4.1(c) hereof) if the Company and BCPII consent in
writing thereto within five (5) Business Days following their receipt
of such Exchange Notice, which consent shall not be unreasonably
withheld (subject to the following proviso); provided that, if the USX
Exchange Right or Kobe Exchange Rights, as applicable, has been
exercised in connection with (i) an Initial Public Offering, (ii) a
Transfer to the Blackstone Investors (or their designee) pursuant to a
First Offer, (iii) a Transfer as a Tagging Equityholder or (iv) a
Transfer pursuant to Section 3.6 hereof, the consent of the Company and
BCPII to any proposed alternative exchange mechanism included in such
Exchange Notice may be withheld in their sole discretion; and provided,
further, that if the Company and BCPII do not consent to a proposed
alternative exchange mechanism included in an Exchange Notice, the
Exchange Merger resulting from such exercise of the USX Exchange Right
or Kobe Exchange Right, as applicable, shall be effected pursuant to
the merger mechanism described in Section 4.1(c) hereof (and the
parties described in Section 4.1(c) hereof shall enter into an Exchange
Merger Agreement within ten (10) Business Days following the Company's
receipt of such Exchange Notice).
4.2 RTI Holdings Unit Adjustments Upon Issuances of Common Stock. (a)
Following consummation of the Contemplated Transactions (and excluding issuances
of Common Stock in connection with such consummation), for so long as any RTI
Holdings Common Units are owned by USX RTI Holdings or Kobe RTI Holdings, (i)
all options, warrants, convertible securities and other rights to acquire Common
Stock (other than the BarTech 1996 Warrants) will be deemed jointly issued by
(and will be deemed joint and several obligations of) the Company and RTI
Holdings and (ii) each time shares of Common Stock are issued by the Company
(whether pursuant to the exercise of options warrants or other rights, the
conversion of convertible securities or otherwise, but excluding issuances
pursuant to the exercise of BarTech 1996 Warrants) (A) all of such shares of
Common Stock first will be contributed (or, solely in the case of shares to be
issued by the Company upon the exercise of BarTech Financing Warrants, 65.4279%
of such shares will be contributed, and only such contributed shares will be
deemed shares being issued for purposes of the adjustments described in this
Section 4.2) by the Company to the capital of RTI Holdings (resulting in an
increase to the RTI Holdings capital account of the Company equal to the fair
market value of such stock pursuant to Section 5.1 of the RTI Holdings LLC
Agreement) and then promptly will be delivered by RTI Holdings to the acquiror
of such shares of Common Stock (with RTI Holdings receiving any consideration
paid by such acquiror in connection with the acquisition of such contributed
shares of Common Stock) and (B) simultaneously with the contribution of such
shares of Common Stock to the capital of RTI Holdings, the percentage of the
total outstanding RTI Holdings Common Units owned by the Company immediately
prior to such contribution of shares of Common Stock to the capital of RTI
Holdings will be increased as described in paragraph (b) below to reflect the
effect of such issuance of Common Stock of the Company on the Equityholders'
respective equity interests in RTI Holdings (any such issuance of Common Stock,
a "RTI Holdings Unit Adjustment Event").
51
(b) Upon the occurrence of a RTI Holdings Unit Adjustment
Event, the percentage of the total outstanding RTI Holdings Common
Units owned by the Company immediately prior to such RTI Holdings Unit
Adjustment Event will be increased (through automatic issuance of new
RTI Holdings Common Units by RTI Holdings without any action being
required on the part of any Equityholder) such that, immediately
following such increase of the Company's ownership of RTI Holdings
Common Units, USX RTI Holdings and Kobe RTI Holdings in the aggregate
own that percentage of the total outstanding RTI Holdings Common Units
equal to the product of (i) the percentage (expressed as a decimal) of
the total outstanding RTI Holdings Common Units owned by USX RTI
Holdings and Kobe RTI Holdings in the aggregate immediately prior to
such RTI Holdings Unit Adjustment Event, multiplied by (ii) 1 minus a
fraction the numerator of which is the number of shares of Common Stock
issued by the Company (through contribution to RTI Holdings) in
connection with such RTI Holdings Unit Adjustment Event and the
denominator of which is the total number of shares of Common Stock of
the Company outstanding on a fully diluted basis immediately following
such issuance (including any shares issued by the Company directly
without first being contributed to RTI Holdings, in the case of an
issuance resulting from the exercise of BarTech Financing Warrants).
SECTION 5
OTHER
5.1 Additional Securities Subject to Agreement. Each Equityholder
agrees that any other shares of Common Stock, and any options, warrants or other
rights to obtain Common Stock or other securities convertible into Common Stock,
which it hereafter acquires by means of a stock split, stock dividend,
distribution, exercise of options or warrants or otherwise will be subject to
the provisions of this Agreement to the same extent as if held on the date
hereof.
5.2 Termination. This Agreement will terminate upon the written
agreement of all of the parties hereto, and otherwise (i) will terminate with
respect to a particular Equityholder (except as provided in the following
proviso) on the date that such Equityholder no longer owns any shares of Common
Stock, options, warrants or other rights to obtain Common Stock, other
securities convertible into Common Stock or RTI Holdings Units and (ii) will
terminate in its entirety with respect to all of the parties hereto (except as
provided in the following proviso) upon the consummation of an Initial Public
Offering; provided, that (a) the provisions of Section 2.1 will survive with
respect to a particular Equityholder for so long as such Equityholder has
director designation rights pursuant to the terms thereof, (b) the provisions of
Section 2.2 will survive with respect to the consent rights of USX and a USX
Director designated by USX RTI Holdings (provided that USX RTI Holdings
continues to be entitled to designate at least one USX Director pursuant to
Section 2.1) and with respect to the consent rights of Kobe and a Kobe Director
designated by Kobe RTI Holdings (provided that Kobe RTI Holdings continues to be
entitled to appoint at least one Kobe Director pursuant to Section 2.1) until
the third anniversary of an Initial Public Offering, (c) the provisions of
Sections 3.1, 3.2, 3.4 and 3.6 will survive with
52
respect to all Equityholders until such time as the Blackstone Investors do not
collectively own in the aggregate at least 15% of the Common Stock then
outstanding on a fully diluted basis, (d) the provisions of Section 3.5 will
survive with respect to all Equityholders until such time as the Blackstone
Investors or the Veritas Investors, as applicable, do not collectively own in
the aggregate a greater number of shares of Common Stock outstanding on a fully
diluted basis than are owned by whichever of the following groups then owns the
fewest number of shares of Common Stock in the aggregate on a fully diluted
basis: (i) the USX Investors, (ii) the Kobe Investors, (iii) the Veritas
Investors (solely with respect to the obligations of the Blackstone Investors
thereunder), (iv) the Blackstone Investors (solely with respect to the
obligations of the Veritas Investors thereunder), (v) the Sumitomo Investors,
(vi) the FirstEnergy Investors, (vii) the Triumph Investors, (viii) the First
Dominion Investors or (ix) the TCW Investors, (e) the provisions of Sections
3.7, 3.8, 3.9, 5.1, 5.2, 5.3, 5.5, 5.6, 5.7, 5.8, 5.9, 5.10, 5.11 and 5.12 will
survive with respect to the Company and a particular Equityholder until such
time as such Equityholder no longer owns any shares of Common Stock, options
warrants or other rights to obtain Common Stock, other securities convertible
into Common Stock or RTI Holdings Units, (f) the provisions of Sections 3.3 and
3.10 will not terminate and (g) the provisions of Sections 4.1 and 4.2 will
survive with respect to all Equityholders until such time as both a USX Exchange
Event and a Kobe Exchange Event have been consummated.
5.3 Injunctive Relief. The Equityholders acknowledge and agree that a
violation of any of the terms of this Agreement will cause the Equityholders
irreparable injury for which adequate remedy at law is not available.
Accordingly, it is agreed that each Equityholder will be entitled to an
injunction, restraining order or other equitable relief to prevent breaches of
the provisions of this Agreement and to enforce specifically the terms and
provisions hereof in any court of competent jurisdiction, in addition to any
other remedy to which they may be entitled at law or equity.
5.4 Other Equityholders Agreements. None of the Equityholders (other
than the Company and its Subsidiaries) will enter into any other equityholders
agreement or other arrangement of any kind with any Person with respect to
shares of Common Stock, securities convertible into or exercisable or
exchangeable for Common Stock or RTI Holdings Units including any registration
rights related thereto (other than the Common Stock Registration Rights
Agreement, dated as of September 9, 1997, with Chase Securities Inc. and other
than the other Transaction Documents), and none of the Equityholders has
previously entered into such an agreement that remains in full force and effect
as of the date hereof and which is inconsistent with the provisions of this
Agreement or which may impair its ability to comply with this Agreement (other
than to the extent disclosed in the Master Restructuring Agreement, if any).
5.5 Amendments. This Agreement may be amended only by a written
instrument signed by (i) each of the Blackstone Investors, so long as such
Blackstone Investor (or any Affiliate of such Blackstone Investor) beneficially
owns, directly or through the Partnerships, Common Stock, and (ii) each of the
Company, Veritas Capital, USX RTI Holdings and Kobe RTI Holdings; provided that
each of the Company, Veritas Capital, USX RTI Holdings and Kobe RTI Holdings
shall be required to sign any amendment to this Agreement proposed by a
Blackstone Investor (and thereby consent thereto) unless such amendment
materially adversely
53
affects the Company, the Veritas Investors, the USX Investors or the Kobe
Investors, respectively, or imposes an additional material obligation on the
Company, the Veritas Investors, the USX Investors or the Kobe Investors,
respectively (it being understood by the parties that the expansion of the Board
to create additional director positions and the granting of additional director
designation rights hereunder will not be considered materially adverse to any
party for purposes of this Section 5.5); and provided, further, that each of the
Company, Veritas Capital, USX RTI Holdings and Kobe RTI Holdings shall be
provided with a copy of any amendment to this Agreement proposed by a Blackstone
Investor at least fifteen (15) Business Days prior to its execution so that it
may provide its written consent thereto in accordance with this Section 5.5 (and
shall be required to provide such written consent within such fifteen (15)
Business Day period except to the extent otherwise set forth in the preceding
proviso); and provided, further, that each of the Company, Veritas Capital, USX
RTI Holdings and Kobe RTI Holdings shall be deemed to have provided its written
consent to any amendment to this Agreement proposed by a Blackstone Investor on
the sixteenth day following it having been provided with a copy thereof pursuant
to the preceding proviso unless it shall have delivered its written objection to
such amendment to the Blackstone Investors prior to such sixteenth day
describing in reasonable detail the basis for its conclusion that such amendment
materially adversely affects it or its Affiliates or imposes an additional
material burden on it or its Affiliates; and provided, further, that, in the
event an amendment to this Agreement materially adversely affects a Sumitomo
Investor, FirstEnergy Investor, Triumph Investor, First Dominion Investor, TCW
Investor or Management Stockholder, such investor's consent to such amendment
shall be required.
5.6 Successors, Assigns and Transferees. The provisions of this
Agreement will be binding upon and will inure to the benefit of the parties
hereto and their respective successors and transferees permitted hereunder
(except for transferees that are transferred Common Stock pursuant to a Public
Offering or a transaction pursuant to Rule 144 under the Securities Act, or
pursuant to Section 3.6), each of which will agree in a writing reasonably
satisfactory in form and substance to the Company to become a party hereto and
be bound to the same extent hereby as the transferor that has transferred the
Common Stock or RTI Holdings Units to such transferees; provided, that if an
Equityholder transfers a portion of its or his Common Stock, options, warrants
or other rights to obtain Common Stock, other securities convertible into Common
Stock or RTI Holdings Units to a transferee which is entitled to rights of the
transferor hereunder, then such transferee(s) of such transferor will exercise
such rights as a single group with that transferor and its Affiliates.
5.7 Notices. Any notices or other communications required or permitted
hereunder will be sufficiently given if delivered personally or sent by
telecopier, Federal Express or other overnight courier, addressed as follows or
to such other address of which the parties may have given notice:
54
To any of the Blackstone Investors:
c/o The Blackstone Group
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
E-mail: xxxxxxxx@xxxxx.xxx
With copies to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
E-mail: x_xxxxx@xxxxxx.xxx
To the Partnerships or any of the Veritas Investors:
The Veritas Capital Fund, L.P.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. XxXxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
With copies to:
Xxxxxxx, Breed, Xxxxxx & Xxxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx Xxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
E-mail: xxxxx@xxxx.xxx
55
To the USX Investors:
USX Corporation
000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
Attention: X.X. Xxxxxxx, Xx.
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
E-mail: xxxxxxxxx@xxx.xxx
To the Kobe Investors:
Kobe Steel, Ltd.
10-26 Wakinohamach 2-Chome
Chuo-ku, Kobe, Hyugo 651-0072
Attention: Xxxxxxxx Xxxx
Telecopy: 000-00-00-000-0000
Telephone: 000-00-00-000-0000
E-mail: xx00000@xxxxx.xxxxxxx.xx.xx
With copies to:
Cleary, Gottlieb, Xxxxx & Xxxxxxxx
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
E-mail: xxxxxx@xxxx.xxx
To Management Stockholders:
(name of Management Stockholder)
c/o Republic Technologies International, Inc.
0000 Xxxxxxx Xxxxxxx
Xxxxx, Xxxx 00000-0000
Attention: Xxxxxx Xxxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
E-mail: xxxxxxxx@xxxxxxxxxxxx.xxx
56
To the Company:
Republic Technologies International, Inc.
0000 Xxxxxxx Xxxxxxx
Xxxxx, Xxxx 00000-0000
Attention: Xxxxxx Xxxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
E-mail: xxxxxxxx@xxxxxxxxxxxx.xxx
To the FirstEnergy Investors:
First Energy Services Corp.
00xx Xxxxx
00 Xxxxx Xxxx Xxxxxx
Xxxxx, Xxxx 00000
Attention: Xxxx Xxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
E-mail: xxxxxx@xxxxxxxxxxxxxxx.xxx
and
First Energy Services Corp.
00xx Xxxxx
00 Xxxxx Xxxx Xxxxxx
Xxxxx, Xxxx 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
Telecopy: (000) 000-00000
Telephone: (000) 000-0000
E-mail: xxxxxxxx@xxxxxxxxxxxxxxx.xxx
To the Sumitomo Investors:
Sumitomo Corporation of America
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxxx Xxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
E-mail: xxxxxx.xxxxxx@xxxxxxxxxxxx.xx.xx
To the Triumph Investors:
Triumph Capital Investors II, L.P.
57
TCI-II Investors, L.P.
00 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Telecopy:
Telephone:
E-mail:
To the First Dominion Investors:
First Dominion Capital L.L.C.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy:
Telephone:
E-mail:
To the TCW Investors:
TCW Leveraged Income Trust, L.P.
TCW Leveraged Income Trust II, L.P.
TCW Shared Opportunity Fund II, L.P.
Shared Opportunity Fund IIB, L.L.C.
Shared Opportunity Fund III, L.P.
00000 Xxxxx Xxxxxx Xxxxxxxxx
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attention: Xxxxx Xxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
Unless otherwise specified herein, such notices or other communications will be
deemed received (i) on the date delivered, if delivered personally or sent by
telecopier, and (ii) one business day after being sent by Federal Express or
other overnight courier.
5.8 Integration. This Agreement, the other Transaction Documents and
the documents referred to herein or therein, or delivered pursuant hereto or
thereto, contain the entire understanding of the parties with respect to the
subject matter hereof and thereof. There are no agreements, representations,
warranties, covenants or undertakings with respect to the subject matter hereof
and thereof other than those expressly set forth herein and therein. This
Agreement supersedes all other prior agreements and understandings between the
parties with respect to such subject matter.
5.9 Severability. If one or more of the provisions, paragraphs, words,
clauses, phrases or sentences 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
58
enforceability of any such provision, paragraph, word, clause, phrase or
sentence in every other respect and of the remaining provisions, paragraphs,
words, clauses, phrases or sentences hereof will not be in any way impaired, it
being intended that all rights, powers and privileges of the parties hereto will
be enforceable to the fullest extent permitted by law.
5.10 Counterparts. This Agreement may be executed in two or more
counterparts, and by different parties on separate counterparts each of which
will be deemed an original, but all of which will constitute one and the same
instrument.
5.11 Governing Law; Submission to Jurisdiction. This Agreement will be
construed in accordance with, and the rights of the parties will be governed by,
the laws of the State of New York. Each of the parties by its execution hereof
hereby (i) irrevocably submits to the jurisdiction of the federal and state
courts located in the Southern District of New York for the purpose of any suit,
action or other proceeding arising out of or based upon this Agreement or any
other agreement contemplated hereby or relating to the subject matter hereof or
thereof and (ii) waives to the extent not prohibited by applicable law, and
agrees not to assert by way of motion, as a defense or otherwise, that its
property is exempt or immune from attachment or execution, that any such
proceeding brought in one of the above-named courts is improper, or that any
right or remedy relating to this Agreement or any other agreement contemplated
hereby, or the subject matter hereof or thereof, may not be enforced in or by
such court. Each of the parties hereby consents to service of process in any
such proceeding in any manner permitted by the laws of the State of New York,
and agrees that service of process by registered or certified mail, return
receipt requested, at its address specified pursuant to Section 5.7 hereof is
reasonably calculated to give actual notice.
5.12 Miscellaneous. (a) The parties hereto will sign such further
documents, cause such meetings to be held, resolutions passed and bylaws
enacted, exercise their votes and do and perform and cause to be done such
further acts and things as may be necessary or desirable in order to give full
effect to this Agreement and every part thereof.
(b) Each director, officer, employee and consultant of the
Company and its Subsidiaries who now or in the future while this
Agreement remains in effect is granted or otherwise acquires Common
Stock or options, warrants or other rights to acquire Common Stock will
become an additional signatory hereto and a Management Stockholder
hereunder as a condition to such grant or acquisition (if from the
Company) or as soon as practicable thereafter (if otherwise acquired)
by signing a counterpart of this Agreement and delivering same to the
Company; provided, however, that the Former Management Members will not
be required to become parties to this Agreement unless the Company
otherwise determines (and in such event they agree to become parties
hereto).
59
IN WITNESS WHEREOF, each of the undersigned has executed this
Agreement or caused this Agreement to be executed on its behalf as of the date
first written above.
REPUBLIC TECHNOLOGIES INTERNATIONAL,
INC.
By: /s/ Xxxx X. Xxxxxx
-----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President of Finance,
Treasurer & Secretary
BLACKSTONE CAPITAL PARTNERS II
MERCHANT BANKING FUND L.P.
By: Blackstone Management Associates II
L.L.C., as General Partner
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Member
BLACKSTONE OFFSHORE CAPITAL
PARTNERS II L.P.
By: Blackstone Management Associates II
L.L.C., as General Partner
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Member
60
BLACKSTONE FAMILY INVESTMENT
PARTNERSHIP II L.P.
By: Blackstone Management Associates II
L.L.C., as General Partner
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Member
BRW STEEL HOLDINGS, L.P.
By: BRW Partners, Inc., general partner
By: /s/ Xxxxxx X. XxXxxx
-----------------------------------------
Name: Xxxxxx X. XxXxxx
Title: President
By: Blackstone Capital Partners II Merchant
Banking Fund L.P., general partner
By: Blackstone Management
Associates II L.L.C., general
partner
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Member
61
BRW STEEL OFFSHORE HOLDINGS, L.P.
By: BRW Partners, Inc., general partner
By: /s/ Xxxxxx X. XxXxxx
-----------------------------------------
Name: Xxxxxx X. XxXxxx
Title: President
By: Blackstone Management Associates II
L.L.C., a general partner
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Member
BRW STEEL HOLDINGS II, L.P.
By: BRW Partners L.L.C., its general
partner
By: /s/ Xxxxxx X. XxXxxx
------------------------------------
Name: Xxxxxx X. XxXxxx
Title: Member
VERITAS CAPITAL, L.L.C.
By: /s/ Xxxxxx X. XxXxxx
------------------------------------
Name: Xxxxxx X. XxXxxx
Title: Member
62
THE VERITAS CAPITAL FUND, L.P.
By: Veritas Capital Management, L.L.C.,
general partner
By: /s/ Xxxxxx X. XxXxxx
------------------------------------
Name: Xxxxxx X. XxXxxx
Title: Member
KDJ, L.L.C.
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Member
RES HOLDING CORPORATION
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Secretary
REPUBLIC TECHNOLOGIES INTERNATIONAL
HOLDINGS, LLC
By: /s/ Xxxx X. Xxxxxx
-----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President of Finance,
Treasurer and Secretary
USX CORPORATION
By: /s/ X.X. Xxxxxxx, Xx.
-----------------------------------------
Name: X.X. Xxxxxxx, Xx.
Title: Vice President - Strategic Planning
63
USX RTI HOLDINGS, INC.
By: /s/ X. X. Xxxxxxx
-----------------------------------------
Name: X. X. Xxxxxxx
Title: Vice President
KOBE STEEL, LTD.
By: /s/ Xxxxxx Xxxxxxxx
-----------------------------------------
Name: Xxxxxx Xxxxxxxx
Title:
KOBE DELAWARE INC.
By: /s/ Xxxxxxxx Xxxxxx
-----------------------------------------
Name: Xxxxxx Xxxxxx
Title: Secretary
KOBE RTI HOLDINGS, INC.
By: /s/ Xxxxxx Xxxxxxxx
-----------------------------------------
Name: Xxxxxx Xxxxxxxx
Title:
HVR HOLDINGS, L.L.C.
By: /s/ Xxxxxx X. XxXxxxxxx
-----------------------------------------
Name: Xxxxxx X. XxXxxxxxx
Title: Vice President
FIRSTENERGY SERVICES CORP.
By: /s/ Xxxxxxx X. Xxxxxxxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Exec. Vice Pres. & Gen. Counsel
00
XXXXXXXX XXXXXXXXXXX XX XXXXXXX
By: /s/ Xxxxxx Xxxxxx
--------------------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President, Investment Management
FIRST DOMINION CAPITAL L.L.C.
By: /s/ Xxxxxxx X. Xxxxxxxxxx
--------------------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Managing Director
TRIUMPH CAPITAL INVESTORS II, L.P.
By: TCI-II Advisers, L.P., as general partner
By: TCI-II Advisers, Inc., as general partner
By: /s/ Xxxx X. Xxxxxxx
-----------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Managing Director
TCI-II INVESTORS, L.P.
By: TCI-II Investors, Inc., as general partner
By: /s/ Xxxx X. Xxxxxxx
-----------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Managing Director
65
TCW LEVERAGED INCOME TRUST, L.P.
By: TCW Investment Management Company
as Investment Advisor
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Managing Director
By: TCW Advisors (Bermuda), Ltd., as
general partner
By: /s/ Xxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Senior Vice President
TCW LEVERAGED INCOME TRUST II, L.P.
By: TCW Investment Management Company,
as Investment Advisor
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Managing Director
By: TCW (XXXX XX), L.P., as general partner
By: TCW Advisors (Bermuda), Ltd.,
as its general partner
By: /s/ Xxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Senior Vice President
66
TCW SHARED OPPORTUNITY FUND II, L.P.
By: TCW Investment Management Company,
as Investment Advisor
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Managing Director
By: /s/ Xxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Senior Vice President
SHARED OPPORTUNITY FUND IIB, L.L.C.
By: TCW Asset Management Company, its
Investment Advisor
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Managing Director
By: /s/ Xxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Senior Vice President
SHARED OPPORTUNITY FUND III, L.L.C.
By: TCW Asset Management Company, its
Investment Advisor
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Managing Director
By: /s/ Xxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Senior Vice President
