Document:

Shareholders' Agreement dated 01/09/2006 b/w Tenaris SA & Inversora Siderurgica

 Exhibit 10.5 
  

  
 SHAREHOLDERS’ AGREEMENT 
  
 between

  
 TENARIS S.A. 
  
 and 
  
 INVERSORA SIDERURGICA LIMITED 
  
 Dated as of January 9, 2006 
  

 TABLE OF CONTENTS 
  

					
	 	  	 	  	Page

	 	  	ARTICLE I	  	 
			
	 	  	DEFINITIONS AND GENERAL INTERPRETATIVE PRINCIPLES	  	 
			
	 SECTION 1.1
	  	 Definitions
	  	1
	 SECTION 1.2
	  	 General Interpretive Principles
	  	2
			
	 	  	ARTICLE II	  	 
			
	 	  	REPRESENTATIONS AND WARRANTIES	  	 
			
	 SECTION 2.1
	  	 Representations and Warranties of the Parties
	  	3
			
	 	  	ARTICLE III	  	 
			
	 	  	GOVERNANCE	  	 
			
	 SECTION 3.1
	  	 The Board of Directors
	  	3
	 SECTION 3.2
	  	 Vacancies
	  	4
	 SECTION 3.3
	  	 Other Covenants
	  	4
			
	 	  	ARTICLE IV	  	 
			
	 	  	SHAREHOLDER’S MEETINGS AND VETO RIGHTS	  	 
			
	 SECTION 4.1
	  	 Shareholders’ Meetings
	  	4
	 SECTION 4.2
	  	 Veto Rights
	  	4
			
	 	  	ARTICLE V	  	 
			
	 	  	TRANSFER RESTRICTIONS	  	 
			
	 SECTION 5.1
	  	 Permitted transfers
	  	5
	 SECTION 5.2
	  	 Offer Notice Requirement
	  	5
	 SECTION 5.3
	  	 Tag-Along Rights
	  	5

  

 ii 

					
	 	  	ARTICLE VI	  	 
			
	 	  	GOVERNING LAW; DISPUTE RESOLUTION	  	 
			
	 SECTION 6.1
	  	 Governing Law
	  	7
	 SECTION 6.2
	  	 Dispute Resolution
	  	7
			
	 	  	ARTICLE VII	  	 
			
	 	  	MISCELLANEOUS PROVISIONS	  	 
			
	 SECTION 7.1
	  	 Expenses
	  	7
	 SECTION 7.2
	  	 Validity of the Agreement
	  	7
	 SECTION 7.3
	  	 Termination of Agreement
	  	8
	 SECTION 7.4
	  	 Notices
	  	8
	 SECTION 7.5
	  	 Counterparts
	  	8
	 SECTION 7.6
	  	 Entire Agreement
	  	8
	 SECTION 7.7
	  	 Waivers and Amendments
	  	9
	 SECTION 7.8
	  	 Language
	  	9
	 SECTION 7.9
	  	 No Third Party Rights; Assignment
	  	9
	 SECTION 7.10
	  	 Specific Performance
	  	9
	 SECTION 7.11
	  	 Further Assurances
	  	9
	 SECTION 7.12
	  	 Severability
	  	9
	 SECTION 7.13
	  	 Term
	  	9

  

 iii 

 SHAREHOLDERS’ AGREEMENT 
  
 SHAREHOLDERS’ AGREEMENT (the “Agreement”), dated as of [•], 2006 by and between Tenaris S.A.
(together with its successors, “Tenaris”), a société anonyme holding organized under the laws of the Grand-Duchy of Luxembourg (“Luxembourg”) and Inversora Siderurgica Limited (together with its
successors, “ISL”), a company organized under the laws of Gibraltar. Tenaris, ISL and any successor or permitted assignee thereof from time to time are each referred to herein as a “Party” and, collectively, the
“Parties.” 
  
 RECITALS 
  
 WHEREAS, the Parties desire to enter into certain arrangements relating to
the operation of Ternium S.A., a société anonyme holding organized under the laws of the Grand-Duchy of Luxembourg (the “Company”), and to set forth certain rights and restrictions related to the ownership,
transfer and disposition of their respective shares of capital stock (the “Shares”) in such Company. 
  
 NOW THEREFORE, in consideration of the foregoing and the mutual representations and warranties, promises, covenants and agreements of the Parties hereto,
and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties, agree as follows: 
  
 ARTICLE I 
 DEFINITIONS AND GENERAL
INTEPRETATION PRINCIPLES 
  
 SECTION 1.1 Definitions.
Capitalized terms used and not otherwise defined in this Agreement shall have the meanings assigned to them in this Section 1.1 (such meanings to be equally applicable to both the singular and the plural form of the terms defined). 

 
 “Affiliate” of a Person means with
respect to any Person, a Person that, directly or through one or more intermediaries, Controls, or is Controlled by, or is under common Control with, the first Person. 
  
 “Agreement” means this Agreement. 
  
 “Beneficial Ownership” or
“Beneficially Owns” means, with respect to any Shares, the ability to, directly or indirectly, vote and direct the disposition of such Shares; provided that, if the Person asserting such beneficial ownership is not the
registered owner of such Shares, such Person shall have reasonably demonstrated (or be capable of reasonably demonstrating) his or its ability to vote and direct the disposition of such Shares. 
  
 “Business Day” means any day other than a
Saturday, Sunday, or a day on which banking institutions in the City of New York, Gibraltar or Luxembourg are authorized or obligated by law or executive order to be closed. 
  
 “Company” has the meaning set forth in the recitals. 
  

 1 

 “Control” means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether through holding ownership interests in such Person, by Contract or otherwise. 
  

“General Rules” has the meaning set forth in Section 6.2. 
  
 “ICC” has the meaning set forth in
Section 6.2. 
  
 “ISL” has
the meaning set forth in the preamble hereto. 
  
 “Lien” means any mortgage, lien, easement, charges, other real estate declaration, pledge, security interest, right of first refusal, fiduciary assignment, voting agreement, restriction on transfer or voting, option or
similar encumbrance. 
  
 “Offer
Notice” has the meaning set forth in Section 5.2. 
  
 “Party” or “Parties” has the meaning set forth in the preamble hereto. 
  
 “Person” means any individual, any legal entity (including, without limitation, a corporation, a société
anonyme, a partnership, a limited liability company, or a legal entity of public law), a branch of any legal entity, any trust, unincorporated organization, joint stock company, joint venture, association or other entity. 
  
 “Shares” has the meaning set forth in the
recitals. 
  
 “Subsidiary”
means, with respect to any Person, a legal entity which such Person Controls or of which such Person Beneficially Owns more than 50% of the voting shares or otherwise. 
  
 “Tag-Along Notice” has the meaning set forth in Section 5.3(a). 
  
 “Tenaris” has the meaning set forth in the
preamble hereto. 
  
 “U.S.$” or
“U.S. Dollar” means the lawful currency of the United States. 
  
 SECTION 1.2 General Interpretive Principles. Unless otherwise specified, all references to “days” or “day-periods” shall mean calendar days. Where this Agreement establishes time periods
counted in calendar days and such calendar day period expires on a day that is not a Business Day, then such calendar day period shall be deemed to expire on the next succeeding Business Day. 
  

 2 

 ARTICLE II 
 REPRESENTATIONS AND WARRANTIES 
  
 SECTION 2.1 Representations and Warranties of the Parties. Each of the Parties represents and warrants to the other on the date hereof as follows: 
  
 (a) Authority. Such Party has the corporate power and authority to enter into this Agreement and to
carry out its obligations hereunder. Such Party is duly organized and validly existing under the laws of its jurisdiction of organization. The execution of this Agreement and the consummation of the transactions contemplated herein have been duly
authorized by all necessary actions, and no other act or proceeding, corporate or otherwise, is necessary to authorize the execution of this Agreement or the consummation of any of the transactions contemplated hereby. 
  
 (b) Enforceability. This Agreement has been duly
executed and delivered by such Party and constitutes its legal, valid and binding obligations, enforceable against such Party in accordance with its terms, subject to any applicable bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium, and similar laws of general applicability relating to or affecting creditors’ rights and general equity principles. 
  
 (c) No Conflicts. There is no provision of any law, statute, regulation, rule, order, injunction, decree, writ or judgment, no
provision of the articles of association, bylaws or other constituent or governing documents of any Party and no provision of any mortgage, indenture, contract or other agreement to which any Party is a party or affecting its properties which would
prohibit, conflict with, or in any way prevent execution and delivery or performance of the terms of this Agreement. 
  
 (d) Consents. No consent, waiver, approval, authorization, exemption, registration, license or declaration is required to be made
or obtained by such Party, in connection with (i) the execution, delivery or enforceability of this Agreement to be entered into by such Party or (ii) the consummation of any of the transactions contemplated herein. 
  
 ARTICLE III 
 GOVERNANCE 
  
 SECTION 3.1 Board of Directors. ISL shall take all actions within its power to cause that, so long as Tenaris Beneficially Owns (either directly or indirectly trough its Subsidiaries) at least five per cent (5%) of the
Company’s capital stock: 
  
 (a) one of the
members of the Company’s board of directors be nominated by Tenaris; and 
  

 3 

 (b) any director(s) nominated by Tenaris be only removed or replaced from the
Company’s board of directors pursuant to the previous written instructions of Tenaris. 
  
 SECTION 3.2 Vacancies. If a director’s position on the Company’s board of directors shall become vacant, whether through removal, incapacity or death, each of the Parties shall take all actions within
its power to cause such vacancy to be filled, if with respect to a director nominated by Tenaris, by a new director nominated by Tenaris, and, if with respect to a director nominated by ISL, by a new director nominated by ISL. 
  
 SECTION 3.3 Other Covenants. Each Party shall take all actions within
its power to cause that, so long as Tenaris Beneficially Owns (either directly or indirectly trough its Subsidiaries) at least five per cent (5%) of the Company’s capital stock, the Company (whether acting through the chairman or any other
director or officer) refrain from giving effect, without first having received the requisite approval in the form of a resolution of the Company’s board of directors or the vote or consent of the shareholders, as applicable, to any matter for
which the board of directors or shareholder approval is required under Article IV. 
  
 ARTICLE IV 
 SHAREHOLDERS’ MEETINGS AND VETO RIGHTS 
  
 SECTION 4.1 Shareholders’ Meetings. All decisions relating to the
Company’s business and operations shall be adopted as set forth in the Company’s charter documents, except for the following matters, which shall require the affirmative vote at the shareholders’ meetings of shareholders representing
sixty per cent (60%) or more of the capital stock and the voting power of the Company: 
  
 (a) any amendment to the corporate purpose set forth in the charter documents of the Company; 
  
 (b) the delisting from all (but not less of all) of the
regulated markets in which the Company’s shares or other securities may be listed at any time in the future; 
  
 (c) any amendment to the number of the Company’s independent directors; 
  
 (d) any amendment to the number of independent members of
the Company’s Audit Committee; or 
  
 (e)
the dissolution, liquidation or winding up of the Company. 
  
 SECTION 4.2 Veto Rights. Each Party shall take all actions within its power to cause the following actions to only be approved upon the affirmative vote at the meetings of the Company’s shareholders of the Shares owned by
Tenaris: 
  
 (a) the relocation of the
Company’s domicile outside Luxembourg; or 
  
 (b) any increase in the shareholders’ commitments. 
  

 4 

 ARTICLE V 
 TRANSFER RESTRICTIONS 
  
 SECTION
5.1 Permitted transfers. (a) Any transfer of Shares, any assignment of the right to make and/or capitalize irrevocable contributions or any instrument or obligation convertible into shares of the Company, and the creation of any Lien
thereon, other than as expressly permitted in this Agreement, is prohibited, shall be void and ineffectual, and shall not operate to transfer any interest of title in the Shares to the purported transferee. 
  
 (b) Unless otherwise agreed to in writing by the Parties, any transfer of
Shares (including any transfer made pursuant to a public offering) shall not release the Party transferring such Shares from any liabilities or obligations it may have hereunder with respect to liabilities and obligations incurred prior to the date
of such transfer; 
  
 (c) Notwithstanding any provision in this
Agreement, ISL may transfer its Shares and consummate any other transactions as provided in that certain Corporate Reorganization Agreement to be entered into among the Company and ISL substantially in the form attached hereto as Exhibit A;
and 
  
 (d) Each Party may transfer its Shares and/or assign any
right to make and/or capitalize irrevocable contributions or any instrument or obligation convertible into shares of the Company to any Subsidiary or Affiliate thereof; provided that the transferor shall provide the other Party, at the
other Party’s request, with evidence reasonably satisfactory to such Party that such transfer complies with the requirements established herein; provided, further, that, in connection with any transfer of Shares and/or
assignment of any right to make and/or capitalize irrevocable contributions or any instrument or obligation convertible into shares of the Company to any Affiliate that is not a Subsidiary of that Party, such Affiliate shall enter into an agreement
substantially in the terms of this Agreement with the other Party as a condition precedent to any such transfer and/or assignment. 
  
 (e) Notwithstanding any other provision of this Agreement, any transfer of Shares and/or assignment of any right to make and/or capitalize irrevocable
contributions or any instrument or obligation convertible into shares of the Company pursuant to any of paragraphs (c) and (d) of this Section shall not be subject to any condition or requirement, nor shall it give rise to any right or
obligation hereunder other than those specifically set forth in the relevant paragraph. 
  
 SECTION 5.2 Offer Notice requirement. If any Party or its Subsidiaries receives a bonafide arms-length written offer to sell, directly or indirectly, all or part of its Shares to a Person (other than a
Party or any of its Subsidiaries or Affiliates), the first Party shall first provide to other Party with an offer notice (the “Offer Notice”) detailing the proposed sale, including, without limitation, the total number of Shares
proposed to be transferred, the name and address of 
  

 5 

 the proposed third party transferee, the purchase price per Share and all other material payment terms including, without
limitation, the form of consideration and, in the case of non-cash consideration, the specific assets or securities constituting such consideration. The Offer Notice shall include a representation that the proposed transferee has been informed of
the terms of the tag-along rights applicable to transfers of Shares as provided for in this Article V. 
  
 SECTION 5.3 Tag-Along Rights. (a) If any of ISL or its Subsidiaries wishes to sell, directly or indirectly, all or part of its Shares to a
Person other than an Affiliate or a Subsidiary of ISL, or Tenaris or any of its Subsidiaries, ISL shall first provide Tenaris with an Offer Notice as set forth in Section 5.2, and for 20 days following Tenaris’s receipt of such Offer
Notice, Tenaris shall have the exclusive option to deliver a tag-along notice (the “Tag-Along Notice”) to ISL with respect to any or all of its Shares. 
  
 (i) The Tag-Along Notice shall specify the irrevocable election of Tenaris to require ISL to include Tenaris
(or its Subsidiary) as a third party in the proposed sale of the Shares contemplated by the Offer Notice, on substantially the same material payment terms as those specified in the Offer Notice. 
  
 (ii) If Tenaris fails to timely deliver the Tag-Along
Notice, its rights with respect to the Shares identified in the Offer Notice shall be waived and ISL may, within 30 days as from the receipt of all necessary governmental and regulatory approvals (or if no such approvals are necessary, within 60
days as from the date of the Tag-Along Notice) conclude the transfer of the Shares described in the Offer Notice, on terms and conditions not more favorable to ISL than those described in the Offer Notice. Any proposed transfer on terms and
conditions more favorable than those described in the Offer Notice, as well as any subsequent proposed transfer of any Shares by ISL after expiration of the applicable period, shall again be subject to the tag-along rights of Tenaris and shall
require compliance by ISL with the procedures described in this Section. If the Shares are not so transferred within the applicable period, the Shares shall again become subject to all of the terms and conditions of the Agreement and may not
thereafter be transferred except in the manner and on the terms herein provided. 
  
 (b) If a Tag-Along Notice has been timely delivered by Tenaris under clause (a) of this Section 5.3 and if ISL is willing and
able to effect a sale of the Shares specified in the Offer Notice and the Tag-Along Notice, then ISL shall arrange for the consideration for such Shares to be paid by the proposed transferee directly to Tenaris upon delivery by Tenaris of
certificates representing all of its Shares being sold under such clause (a) of this Section 5.3 duly endorsed and free and clear of all Liens, together with such other documents as ISL and the transferee may reasonably agree on or
request, including without limitation documents providing for representations, warranties, indemnifications, and similar agreements for the benefit of the transferee, provided that ISL is also providing equivalent documentation to the
transferee. All costs and expenses incurred by the Parties in connection with such sale shall be borne by the Parties in proportion to their share in the proceeds of the sale. 
  

 6 

 (c) For the avoidance of doubt, in case of a sale by ISL of all or part of its Shares to
any of its Affiliates or Subsidiaries, Tenaris shall not be entitled to exercise the tag-along rights set forth in this Section 5.3. 
  
 ARTICLE VI 
 GOVERNING LAW; DISPUTE RESOLUTION

  
 SECTION 6.1 Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York. 
  
 SECTION 6.2 Dispute Resolution. Any dispute, controversy or claim between the Parties arising out of, relating to or in connection this Agreement, whether based on this Agreement or otherwise, including without
limitation any dispute regarding its validity or termination, or the performance or breach thereof, to the extent not resolved by negotiations conducted during a period of 30 days, shall be finally resolved by arbitration administered by the Court
of Arbitration of the International Chamber of Commerce (the “ICC”). The arbitration shall be conducted in accordance with the ICC’s Rules of Arbitration in effect at the time (the “General Rules”),
except as they may be modified herein or by agreement of the Parties. The International Bar Association Rules of Evidence shall apply together with the General Rules governing any submission to arbitration under this Agreement. Where they are
inconsistent with the General Rules, the International Bar Association Rules of Evidence shall prevail but solely as regards the presentation and reception of evidence. The arbitral tribunal shall consist of three (3) arbitrators appointed in
accordance with the General Rules. The place of arbitration shall be in New York, NY, or any other location as the Parties may agree upon. The arbitration proceedings shall be conducted in the English language. The award rendered in any arbitration
commenced hereunder shall be final and conclusive and judgment thereon may be entered in any court having jurisdiction for its enforcement. The arbitrators shall not be authorized to decide any dispute, controversy or claim ex aequo et bono
or as amiable compositeurs but shall strictly apply the law governing this Agreement. Neither Party shall appeal to any court from the decision of the arbitration panel. 
  
 ARTICLE VII 
 MISCELLANEOUS PROVISIONS 
  
 SECTION 7.1
Expenses. Each Party shall pay its own internal and legal, accounting, and other miscellaneous expenses relating to this Agreement and the transactions contemplated hereby. 
  
 SECTION 7.2 Validity of the Agreement. If any of the provisions of this Agreement shall be illegal,
invalid or unenforceable for any reason, the Parties shall use their best efforts to re-negotiate such provision or provisions in a manner which (i) cures the legal defect giving rise to the unenforceability of such provision or provisions and
(ii) will have, in form as well as in substance, the same purpose and effect as the unenforceable provision. Notwithstanding the foregoing, the invalidity, illegality or unenforceability of any provision shall not in any way affect or impair
the validity, legality and enforceability of the remaining provisions hereof for so long as the remaining provisions do not fundamentally alter the relations between the Parties hereto. 
  

 7 

 SECTION 7.3 Termination of Agreement. (a) This Agreement shall terminate by mutual written
consent of the Parties or, at the request of any Party, upon the occurrence of any of the following: 
  
 (i) the dissolution and liquidation or final adjudication as bankrupt of, or the filing of a voluntary petition for bankruptcy by the
Company, provided that, should such dissolution and liquidation be for the purpose of restructuring or reorganizing the Company or maintaining their interest in any of its Subsidiaries or Affiliates thereof directly or through a
different Person, the Parties agree to enter into an agreement substantially similar to this Agreement with respect to such new structure, organization or Person as a condition precedent to implementing such restructuring or reorganization or
Person; 
  
 (iii) any of the Parties makes a
general assignment of all or substantially all of its assets for the benefit of its creditors; 
  
 (iv) a change in the Control of the other Party; 
  

(iv) a Party’s Beneficial Ownership in the Company (including such Party’s indirect Beneficial Ownership in the Company
through its Subsidiaries) falls below five per cent (5%) of the Company’s capital stock. 
  
 (b) Notwithstanding the termination of this Agreement, Articles VI and VII shall survive such termination. 
  
 SECTION 7.4 Notices. All notices, requests, demands, waivers and other
communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given if delivered in person or mailed, certified or registered mail with postage prepaid, or sent by facsimile (upon
confirmation of receipt), to the relevant Party at its address listed on the signature page hereto, or to such other Person or address as any Party shall specify by notice in writing to the other Party. All such notices, requests, demands, waivers
and communications shall be deemed to have been received on the date of delivery unless if mailed, in which case on the third Business Day after the mailing thereof, except for a notice of a change of address, which shall be effective only upon
receipt thereof. 
  
 SECTION 7.5 Counterparts. This
Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute a single instrument. 
  
 SECTION 7.6 Entire Agreement. This Agreement sets forth the entire understanding and agreement between the Parties as
to the matters covered herein and supersede and replace any prior understanding, agreement or statement of intent, in each case, written or oral, of any and every nature with respect thereto. In the event of any inconsistency between this Agreement
and the charter documents of the Company, this Agreement shall prevail between the Parties. 
  

 8 

 SECTION 7.7 Waivers and Amendments. No modification of or amendment to this Agreement or waiver of
any provision shall be valid unless in writing signed by an authorized representative of each Party. 
  
 SECTION 7.8 No Third Party Rights; Assignment. This Agreement is intended to be solely for the benefit of the Parties hereto (and their respective
Subsidiaries) and is not intended to confer any benefits upon, or create any rights in favor of, any Person other than the Parties hereto (and their respective Subsidiaries). All rights and obligations hereunder and under any agreements and
documents executed and delivered in connection herewith shall not be assignable without the prior written consent of the other Parties. Any assignment of rights or obligations in violation of this Section 7.8 will be ineffective. 
  
 SECTION 7.9 Specific Performance. The Parties agree that the
obligations imposed on them in this Agreement are special, unique and of an extraordinary character, and that, in the event of breach by any party, damages would not be an adequate remedy and the other Party shall be entitled to specific
performance. 
  
 SECTION 7.10 Further Assurances. From time
to time, at the reasonable request of any Party hereto and without further consideration, each Party hereto shall execute and deliver such additional documents and take all such further action as may be necessary or appropriate to consummate and
make effective, in the most expeditious manner practicable, the transactions contemplated herein. The Parties hereby covenant to take all necessary actions to give effect under the laws of Luxembourg to any provision under this Agreement and any
other action taken with respect hereof. 
  
 SECTION 7.11
Severability. Each Section, subsection and clause of this Agreement constitutes a separate and distinct undertaking, covenant or provision hereof. In the event that any provision of this Agreement shall finally be determined to be unlawful,
such provision shall be deemed severed from this Agreement, but every other provision of this Agreement shall remain in full force and effect. 
  
 SECTION 7.12 Term. Except as otherwise provide herein, this Agreement shall become effective upon the execution and delivery hereof by both Parties
hereto and shall continue in full force and effect until a termination event under Section 7.3 occurs. 
  
 *    *    * 
  

 9 

			
	TENARIS S.A.
		
	By:	 	 /s/ Carlos A. Condorelli

	Name:	 	Carlos A. Condorelli
	Title:	 	Attorney-in-fact
	Date:	 	January 9, 2006
		
	By:	 	 /s/ Roberto Bonatti

	Name:	 	Roberto Bonatti
	Title:	 	Attorney-in-fact
	Date:	 	January 9, 2006
	
	 Address for Notices

	Leandro N. Alem 1067, 28th floor
	C1001AAF Buenos Aires
	Argentina
	Attn:        Carlos Condorelli
	
	 INVERSORA SIDERURGICA LIMITED

		
	By:	 	 /s/ Raúl H. Darderes

	Name:	 	Raúl H. Darderes
	Title:	 	Director
	Date:	 	January 9, 2006
		
	By:	 	 /s/ Umberto Bocchini

	Name:	 	Umberto Bocchini
	Title:	 	Director
	Date:	 	January 9, 2006
	
	 Address for Notices

	Leandro N. Alem 1067, 28th floor
	C1001AAF Buenos Aires
	Argentina
	Attn:        Umberto Bocchini

  

 10Contribution and Subscription Agreement dated 09/15/2005

 Exhibit 10.6 
  
 CONTRIBUTION AND SUBSCRIPTION AGREEMENT 
  
 This CONTRIBUTION AND SUBSCRIPTION AGREEMENT (this “Agreement”) is entered into on
September 15, 2005, by and between Usinas Siderurgicas de Minas Gerais S/A - USIMINAS, a company organized and existing under the laws of Brazil (“Usiminas”); SLP 11.785 A/S (to be renamed “Usiminas Europa A/S”), a
company organized and existing under the laws of Denmark (the “Subscriber”); and Ternium S.A. (formerly known as Zoompart Holding S.A.), a company organized and existing under the laws of Luxembourg (the “Company”,
and together with Usiminas, and the Subscriber, the “Parties”, and each indistinctly a “Party”). 
  
 WHEREAS, Usiminas and I.I.I. Industrial Investments Inc., a company organized and existing under the laws of the Cayman Islands and the
Company’s indirect controlling shareholder (“I.I.I. CI”), are parties to a Convenlo de Accionistas dated July 20, 2005 (the “Shareholders’ Agreement”), pursuant to which Usiminas assumed
certain commitments and obligations, including, inter alia, the obligation to transfer, or cause to be transferred, all if its direct and indirect interests in each of Consorclo Siderurgla Amazonia Ltd, a company organized and existing under
the laws of the Cayman Islands (“Amazonia”), Siderar S.A.I.C., a company organized and existing under the laws of Argentina (“Siderar”) and Ylopa – Serviços de Consultadoria Lda, a company organized and
existing under the laws of Portugal (“Ylopa”) on the terms and subject to the conditions set forth therein; 
  
 WHEREAS, as of the date hereof, the Company’s issued and outstanding share capital is of one billion one hundred and sixty eight million nine
hundred and forty three thousand six hundred and thirty two dollars of the United States of America (US$ 1,168,943,632), represented by one billion one hundred and sixty eight million nine hundred and forty three thousand six hundred and thirty two
(1,168,943,632) shares having a nominal value per share of one dollar of the United States of America (US$ 1) (the “Company Outstanding Capital”) 
  
 WHEREAS, Usiminas is the sole shareholder of the Subscriber; 
  
 WHEREAS, Usiminas will contribute to the Subscriber the assets and
liabilities listed below (the “Usiminas’ Contribution”) 
  

	 	•	 	98,652,866 Class “D” shares (the “Amazonia Shares”) of Amazonia; 

  

	 	•	 	18,489,620 ordinary shares (the “Siderar Shares”) of Siderar; 

  

	 	•	 	A quota of € 955.50 nominal value (the “Ylopa Quota”) in Ylopa; 

  

	 	•	 	A debt owing to Amazonia, amounting to twenty two million five hundred and thirty one thousand eighty one dollars of the United States of America with eighty four cents (US$
22,531,081.84) (the “Amazonia Debt”); and 

  

	 	•	 	A debt owing to Ylopa, amounting to eight million four hundred and eighty six thousand two hundred and seventy seven dollars of the United States of America with sixty four cents
(US$ 8,486,277.64) (the “Ylopa Debt” and, together with the Amazonia Shares, the Siderar Shares, the Ylopa Quota and the Amazonia Debt, the “Mandatory Assets and Liabilities”); 

  
 WHEREAS Usiminas wishes to cause the Subscriber to subscribe, and the
Subscriber whishes to Subscribe, new shares of the Company’s capital stock to be issued by the Company in consideration of the contribution by the Subscriber of all of its assets and liabilities, without exception (including without limitation
the Mandatory Assets and Liabilities). 
  

 1 

 WHEREAS Usiminas and the Subscriber acknowledge that the timely contribution of the Mandatory
Assets and Liabilities to the Company is essential for the performance of certain commitments assumed by the Company. 
  
 NOW, THEREFORE, in consideration of the foregoing and the mutual agreements herein contained, and for other good and valuable consideration, the
Parties agree as follows: 
  
 1. SUBSCRIPTION 

 
 1.1 Usiminas hereby irrevocably promises to, and agrees with, the Company
that Usiminas shall: 
  
 (a) effect the
Usiminas’ Contribution on the first practicable date (such date, the “Usiminas’ Contribution Effective Date”); and 
  
 (b) cause the Subscriber to subscribe two hundred and twenty seven million six hundred and eight thousand two hundred and fifty four
(227,608,254) new shares of the Company’s capital stock (the “Company Shares”), in exchange for the Subscriber’s Contribution (as defined below) as soon as practicable after the Usiminas’ Contribution Effective
Date (such date, the “Subscriber’s Contribution Effective Date”). 
  
 1.2. The Company hereby irrevocably promises to, and agrees with, Usiminas, that the Company shall issue and deliver to the Subscriber the Company Shares as soon as practicable upon receipt of the Subscriber’s
Contribution and the auditor’s report thereon. 
  
 2.
SUBSCRIBER’S CONTRIBUTION 
  
 The Parties agree that the
Subscriber shall subscribe the Company Shares at a price equal to the value of the Subscriber’s Contribution as of the Subscriber’s Contribution Effective Date, as determined in a form acceptable under Luxembourg law (the
“Subscription Price ”). 
  
 The Subscription
Price shall be fully paid up by the Subscriber through the contribution in kind (the “Subscriber’s Contribution”) of all the Subscriber’s assets and liabilities, as provided for in Article 4-1 of the Luxembourg law of
29 December 1971, as modified by the Luxembourg law of 3 December 1986, providing for a capital duty exemption. 
  
 The Subscriber’s assets and liabilities to be contributed to the Company shall include, without exception, the Mandatory Assets and Liabilities,
together with any other assets and liabilities of the Subscriber as of the Subscriber’s Contribution Effective Date. 
  
 3. SUBSCRIBER’S CONTRIBUTION MINIMUM VALUE 
  
 In the event that, as of the Subscriber’s Contribution Effective Date, the value of the Subscriber’s Contribution, as determined in a form
acceptable under Luxembourg law, is lower than Euro 1.24 times 227,608,254, then, and only for so long as the Company Outstanding Capital remains invariable, the Parties shall engage in good faith negotiations to determine an adjusted
number of shares of the Company’s capital stock that may be delivered to the Subscriber hereunder while maintaining the Subscriber’s Equity Percentage (as defined below). 
  

 2 

 4. REPRESENTATIONS AND WARRANTIES 
  
 Usiminas and the Subscriber each hereby represent and warrant to the Company that: 
  

	 	•	 	each of Usiminas and the Subscriber is duly organized and validly existing and has full power and legal right to execute and deliver this Agreement and to perform the provisions of
this Agreement on its part to be performed; 

  

	 	•	 	the execution, delivery and performance by Usiminas and the Subscriber of this Agreement have been duly authorized by all necessary corporate or governmental action;

  

	 	•	 	this Agreement is the valid and binding obligation of Usiminas and the Subscriber, enforceable against each of Usiminas and the Subscriber in accordance with the terms hereof;

  

	 	•	 	Usiminas is, and on and as of the Subscriber’s Contribution Effective Date the Subscriber will be, the sole owner of each of the assets and liabilities comprising the
Subscriber’s Contribution; 

  

	 	•	 	there are no pre-emptive rights or any other rights attaching to the Mandatory Assets and Liabilities by virtue of which any person may be entitled to demand that one or more of the
assets be transferred to him, and no such rights will exist on and as of the Subscriber’s Contribution Effective Date; 

  

	 	•	 	each of the assets and liabilities comprising the Subscriber’s Contribution is, and on and as of the Effective Date, will be, unencumbered, and each such asset and liability
is, and on and as of the Effective Date will be, freely transferable to the Company; 

  

	 	•	 	on and as of the Subscriber’s Contribution Effective Date, all authorizations, consents or waivers necessary to make the Subscriber’s Contribution shall have been duly
obtained, where applicable; and 

  

	 	•	 	on and as of the Subscriber’s Contribution Effective Date, the Subscriber will have no assets other than the Amazonia Shares, the Siderar Shares, the Ylopa Quota and cash on
hand not to exceed Danish kronas 500,000 and will have no liabilities other than the Amazonia Debt, and the Ylopa Debt. 

  
 The Company represents and warrants to the Subscriber that, so long as the Company Outstanding Capital does not change in any manner, after giving effect
to the Subscriber’s Contribution the Company Shares will represent approximately 16.3% of the total issued and outstanding capital of the Company (such percentage, the “Subscriber’s Equity Percentage”), it being
understood, for the avoidance of doubt, that the foregoing does not restrict in any manner the Company’s ability to issue new shares of its capital stock in the future. 
  
 5. INDEMNITY 
  
 If for any reason the Company fails to obtain relief from the Luxembourg tax authorities in respect of the 1% capital duty on the aggregate amount of the
capital increase of the Company to be made upon and only and exclusively in connection with the Subscriber’s Contribution (the “Capital Duty Relief”), or if the Capital Duty Relief granted is successfully challenged by any
governmental authority in Luxembourg, Usiminas shall forthwith pay to the Company the full amount of such capital duty and shall indemnify and hold the Company harmless from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, 
  

 3 

 costs, expenses or disbursements of any kind or nature whatsoever (including attorney’s fees and expenses) that may
be imposed on, incurred by, or asserted against the Company in any way relating to or arising out of any challenge to the Capital Duty Relief (whether successful or not) by any governmental authority in Luxembourg. 
  
 6. ADDITIONAL COMMITMENTS BY USIMINAS AND THE SUBSCRIBER 
  
 Usiminas hereby irrevocably and unconditionally assigns and transfers to the
Company, and the Company hereby receives and accepts, effective as of the date hereof, its rights to collect any and all dividends or other distributions paid in respect of any of the Amazonia Shares, the Siderar Shares, and the Ylopa Quota; and the
Subscriber hereby irrevocably and unconditionally assigns and transfers to the Company, and the Company hereby receives and accepts, effective as from the date of the Subscriber’s Contribution, its rights to collect any and all dividends or
other distributions paid in respect of any of the Amazonia Shares, the Siderar Shares, and the Ylopa Quota; it being understood, for the avoidance of doubt, that the assignment and transfer of such rights to the Company will not give rise to any
additional consideration being payable by the Company in respect of such rights or the Subscriber’s Contribution. 
  
 Notwithstanding any other provision in this Agreement, Usiminas and the Subscriber, as applicable: 
  
 (a) hereby irrevocably and unconditionally instructs each of
Amazonia, Siderar and Ylopa, as the case may be, to pay forthwith to the Company any and all dividends or other distributions payable in respect of any of the Amazonia Shares, the Siderar Shares, and the Ylopa Quota (irrespective of whether any such
dividends or other distributions accrued or were payable before or after the date hereof); and 
  
 (b) hereby irrevocably and unconditionally authorizes the Company to exercise, or cause to be exercised, on behalf of Usiminas or the
Subscriber, as the case may be, all voting rights and other powers attaching to any of the Amazonia Shares, the Siderar Shares and the Ylopa Quota in favor of any proposals or recommendations of each of Amazonia, Siderar or Ylopa, as applicable.

  
 7. SPECIFIC PERFORMANCE 
  
 The Parties agree that irreparable damage would occur in the event that any
of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. Accordingly, the Parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement, without any
bond or other security being required, and to enforce specifically the terms and provisions of this Agreement, this being in addition to any other remedy to which they are entitled at law or in equity. 
  
 8. COUNTERPARTS 
  
 This Agreement may be executed in counterparts (and by each party on a
separate counterpart), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. 
  

 4 

 9. GOVERNING LAW; RESOLUTION OF DISPUTES 
  
 9.1 This Agreement shall be governed by and construed in accordance with the
laws of the State of New York, United States of America. 
  
 9.2
(a) Any dispute, controversy or claim between the parties hereto arising out of, relating to or in connection with this Agreement, including, without limitation, any dispute regarding its validity or termination, or the performance or breach
thereof, to the extent not resolved by negotiations, shall be finally resolved by arbitration administered by the International Chamber of Commerce’s International Court of Arbitration (the “ICC”). The arbitration shall be
conducted in accordance with the ICC’s Rules of Arbitration in effect at the time, except as they may be modified herein or by agreement of the Parties hereto. The arbitral tribunal (the “Tribunal”) shall consist of three
(3) arbitrators. One arbitrator shall be nominated by the Company and one arbitrator shall be nominated by Usiminas within thirty (30) days of the commencement of arbitration proceedings, and those two arbitrators shall agree upon the
third arbitrator, who shall act as chair of the Tribunal; provided, however, that if, (i) at the end of the thirty (30) day period immediately following the nomination of the arbitrators nominated by each of the Company and
Usiminas, such arbitrators are unable to agree upon the third arbitrator, such third arbitrator shall be appointed by the ICC and (ii) if any of the Company or Usiminas refuses to nominate an arbitrator, such arbitrator shall be appointed by the
ICC. The place of arbitration shall be in the city of New York, NY, United States of America. The arbitration proceedings shall be conducted in the English language and all submissions shall be made in English. The arbitrators shall not be
authorized to decide any dispute, controversy or claim ex aequo et bono or as amiable compositeurs but shall strictly apply the law governing this Agreement. 
  
 (b) In the event any Party hereto, having been given due notice and opportunity, shall fail or shall refuse to participate
in arbitration proceedings hereunder or in any stage thereof, the proceedings shall nevertheless be conducted to conclusions and final award. Any award rendered under such circumstances shall be as valid and enforceable as if such party had appeared
and participated fully at all stages. Any award of the Tribunal shall be final and binding upon the Parties hereto, their successors and assigns. The Parties hereto waive to the fullest extent permitted by law any rights to appeal to, or to seek
review of such award by, any court or tribunal. Judgment on the award may be entered in any court of competent jurisdiction. 
  
 (c) By agreeing to arbitration, the Parties hereto do not intend to deprive any court with jurisdiction of its ability to issue a preliminary injunction,
attachment or other form of provisional remedy in aid of the arbitration and a request for such provisional remedies by a party to a court shall not be deemed a waive of this agreement to arbitrate. In addition to the authority conferred upon the
Tribunal by the rules specified above, the Tribunal shall also have the authority to grant provisional remedies, including injunctive relief. 
  
 (d) Without limiting the authority conferred on the Tribunal by this Agreement and the rules specified above, the Tribunal shall have the authority to
award specific performance. 
  
 (e) Except as may be required by
applicable law or court order, the Parties hereto agree to maintain confidentiality as to all aspects of the arbitration, including its existence and results, except that nothing herein shall prevent any party form disclosing information regarding
the arbitration for purposes of enforcing the award or in any court proceeding involving the parties hereto. The Parties hereto further agree to obtain the arbitrators’ agreement to preserve the confidentiality of the arbitration. 

 

 5 

 10. NOTICES 
  
 All notices and other communications provided for in this Agreement shall be in writing and addressed as set forth on the
signature page hereof or to such other address or facsimile number as may from time to time be designated by the intended recipient by notice to the other party. All such notices shall be effective upon receipt. 
  
 11. EXPENSES 
  
 The Parties shall each be responsible for its own expenses (including fees of
legal counsel) incurred in connection with the preparation and negotiation of this Agreement and related documentation. 
  
 12. WAIVERS; AMENDMENTS 
  
 No failure or delay on the part of any party in exercising any right hereunder shall operate as a waiver of, or impair, any such right. No single or
partial exercise of any such right shall preclude any other or further exercise thereof or the exercise of any other rights. All rights and remedies existing under this Agreement are cumulative and concurrent to, and not exclusive of, any rights or
remedies otherwise available at law or in equity or by statute. No waiver of any such right shall be effective unless given in writing, or shall be deemed a waiver of any other right hereunder. The Parties acknowledge that the Company is not acting
on behalf of, or as an agent or representative of, I.I.I. CI and the Company’s entering into this Agreement does not operate as a waiver of or impair any of the rights or remedies that I.I.I. CI may be entitled to under the Shareholders’
Agreement. 
  
 This Agreement may be amended, supplemented or
modified only by an instrument in writing signed by each of the Parties hereto. 
  
 13. ASSIGNMENT 
  
 Neither
Party may assign any of its rights or delegate any of its obligations under this Agreement without the prior written consent of the other Parties and any purported assignment or delegation absent such consent shall be void. 
  

 6 

 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective
officers thereunto duly authorized, as of the date first above written. 
  

			
	 USINAS SIDERURGICAS DE MINAS GERAIS
S/A - USIMINAS,

		
	 By
	 	 [ILLEGIBLE]

	Name:	 	 
	Title:	 	 
		
	By	 	 [ILLEGIBLE]

	Name:	 	 
	Title:	 	 
	
	Address for Notices:
	
	 USINAS SIDERURGICAS DE MINAS GERAIS
S/A - USIMINAS,

	
	[ILLEGIBLE]
		
	By	 	 [ILLEGIBLE]

	Name:	 	 
	Title:	 	 
		
	By	 	 [ILLEGIBLE]

	Name:	 	 
	Title:	 	 
	
	Address for Notices:
	
	[ILLEGIBLE]

  

 7 

			
	 TERNIUM S.A.

		
	By	 	 /s/ Carlos Condorelli

	Name:	 	Carlos Condorelli
	Title:	 	Director
		
	By	 	 /s/ Roberto Philipps

	Name:	 	Roberto Philipps
	Title:	 	Chief Financial Officer
	
	Address for Notices:
	
	 Ternium S.A.

	
	Av. Leandro N. Alem 1067, 28th
floor
	 C1001AAF Buenos Aires
 Argentina

	
	Attention: Fernando R. Mantilla, Director
	Facsimile: +54 (11) 4018 2802

  

 8

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