Exhibit 4.5
SHEFFIELD STEEL CORPORATION
$110,000,000
11 1/2% FIRST MORTGAGE NOTES DUE 2007
PURCHASE AGREEMENT
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November 26, 1997
BT ALEX. ▇▇▇▇▇ INCORPORATED
Bankers Trust Plaza
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Sheffield Steel Corporation, a Delaware corporation (the "Company"),
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hereby confirms its agreement with you (the "Initial Purchaser"), as set forth
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below.
1. The Notes. Subject to the terms and conditions herein contained,
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the Company proposes to issue and sell to the Initial Purchaser $110,000,000
principal amount of 11 1/2% First Mortgage Notes due 2005 (the "Notes"). The
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Notes are to be issued under an indenture (the "Indenture") to be dated as of
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December 1, 1997 by and between the Company and State Street Bank and Trust
Company, as Trustee (the "Trustee").
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The Notes will be offered and sold to the Initial Purchaser without
being registered under the Securities Act of 1933, as amended (the "Act"), in
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reliance on exemptions therefrom.
In connection with the sale of the Notes, the Company has prepared a
pre liminary offering memorandum dated November 12, 1997, and has prepared a
final offering memorandum dated November 26, 1997 (the "Final Memorandum"; the
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Preliminary Memorandum and the Final Memorandum each herein being referred to as
a "Memorandum") setting forth or including a description of the terms of the
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Notes, the terms of the offering of the Notes, a description of the Company, and
any material developments relating to the Company occurring after the date of
the most recent historical financial statements included therein.
The Initial Purchaser and its direct and indirect transferees of the
Notes will be entitled to the benefits of a Registration Rights Agreement,
substantially in the form attached hereto as Exhibit A (the "Registration
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Rights Agreement"), pursuant to which the Company will agree, among other
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things, to file with the Securities and Exchange Commission (the "Commission")
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under the circumstances set forth therein (i) a registration statement under the
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Act relating to the Company's Series B 11 1/2% First Mortgage Notes due 2005
(the "Exchange Notes") to be offered in exchange for the Notes and to use its
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reasonable best efforts to cause such registration statement to be declared
effective, or (ii) a shelf registration statement pursuant to Rule 415 under the
Act relating to the resale of the Notes by holders thereof or, if applicable,
relating to the resale of debt securities of the Company substantially identical
to the Notes (the "Private Exchange Notes") by the Initial Purchaser pursuant to
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an exchange of the Notes for Private Exchange Notes, and to use its best efforts
to cause such shelf registration statement to be declared effective. The Notes
will be secured by a first mortgage lien on substantially all of the Company's
property and plant and a first security interest in equipment of the Company
pursuant to the terms of Mortgages and a Security Agreement (each as defined in
the Indenture) and which are collectively referred to, together with an
Intercreditor Agreement (as defined in the Indenture), as the "Security
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Documents". This Agreement, the Notes, the Exchange Notes, the Private Exchange
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Notes the Indenture, the Registration Rights Agreement and the Security
Documents are herein collectively referred to as the "Transaction Documents."
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2. Representations and Warranties. The Company represents and
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warrants to and agrees with the Initial Purchaser that:
(a) Neither the Preliminary Offering Memorandum as of the date
thereof, nor the Final Memorandum nor any amendment or supplement thereto
as of the date thereof and at all times subsequent thereto up to the
Closing Date (as defined in Section 3 below) contained or contains any
untrue statement of a material fact or omitted or omits to state a material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that the
representations and warranties set forth in this Section 2(a) do not apply
to statements or omissions made in reliance upon and in conformity with
information relating to the Initial Purchaser furnished to the Company in
writing by the Initial Purchaser expressly for use in the Preliminary
Offering Memorandum, the Final Memorandum or any amendment or supplement
thereto.
(b) The only direct or indirect subsidiaries of the Company are, and
as of the Closing Date will be, those entities listed on Schedule I hereto
(the "Subsidiaries"). The Company does not own, directly or indirectly,
any shares of stock or any other equity or long term debt securities or
have any equity interest in any firm, partnership, joint venture or other
entity other than the Subsidiaries. As of the Closing Date, the Company
will have the capitalization set forth in the Final Memorandum; all of the
outstanding shares of capital stock of the Company and each of the
Subsidiaries have been, and as of the Closing Date will be, duly authorized
and validly issued, except as set forth in the Final Memorandum, are fully
paid and nonassessable and were not issued in violation of any preemptive
or similar rights; except as set forth in the Final Memorandum, the Amended
and Restated Stockholders Agreement dated as of Sep-
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tember 15, 1993 between the Company and the Stockholders party thereto (the
"Stockholder Agreement") or the pledge of stock of ▇▇▇▇▇▇▇'▇ Rebar
Fabricators, Inc. ("▇▇▇▇▇▇▇'▇") to secure the Company's promissory notes to
the sellers of ▇▇▇▇▇▇▇'▇, all of the outstanding shares of capital stock of
the Company and each of the Subsidiaries are and as of the Closing Date
will be free and clear of all liens, encumbrances, equities and claims or
restrictions on transferability (other than those imposed by the Act and
the securities or "Blue Sky" laws of certain jurisdictions) or voting;
other than pursuant to a Warrant Agreement dated as of November 1, 1993
between the Company and Shawmut Bank Connecticut, N.A. as warrant agent
(the "Warrant Agreement") and pursuant to options granted under the 1993
Stock Option Plan, there are no options, warrants or other rights to
purchase from the Company, or agreements or other obligations of the
Company to issue or other rights to convert any obligation into, or
exchange securities for, shares of capital stock of or ownership interests
in the Subsidiaries.
(c) The Company and each of the Subsidiaries are duly incorporated,
validly existing and in good standing as a corporation under the laws of
their respective jurisdictions of incorporation, with all requisite
corporate power and authority to own their respective properties and
conduct their respective businesses as now conducted as described in the
Final Memorandum; the Company and each of the Subsidiaries are duly
qualified to do business as a foreign corporation in good standing in all
other jurisdictions where the ownership or leasing of their respective
properties or the conduct of their respective businesses requires such
qualification, except where the failure to be so qualified would not have a
material adverse effect on the business, condition (financial or other),
prospects or results of operations of the Company and the Subsidiaries,
taken as a whole (each such event a "Material Adverse Effect").
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(d) No holder of securities of the Company will be entitled to have
such securities registered under the registration statements required to
be filed by the Company pursuant to the Registration Rights Agreements,
other than as expressly permitted thereby.
(e) The Company has all requisite corporate power and authority to
execute, deliver and perform each of its obligations under the Transaction
Documents;
(f) This Agreement has been duly and validly authorized, executed and
delivered by the Company.
(g) The Notes, the Exchange Notes and the Private Exchange Notes have
each been duly and validly authorized by the Company for issuance and when
executed by the Company and authenticated by the Trustee in accordance
with the provisions of the Indenture, and in the case of the Notes
delivered to and paid for by the Initial Purchaser in accordance with the
terms hereof, will have been duly executed, issued and
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delivered and will constitute valid and legally binding obligations of the
Company, entitled to the benefits of the Indenture and enforceable against
the Company in accordance with their terms, except that enforcement thereof
may be subject to (i) bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating to creditors' rights
generally and (ii) general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity) and the
discretion of any court before which any proceeding therefor may be
brought.
(h) The Indenture has been duly and validly authorized by the Company
and is in a form to be qualified under the Trust Indenture Act of 1939, as
amended (the "TIA"), and, when executed and delivered by the Company
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(assuming the due authorization, execution and delivery by the Trustee),
will constitute a valid and legally binding agreement of the Company,
enforceable against the Company in accordance with its terms, except that
the enforcement thereof may be subject to (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and (ii) general principles of
equity (regardless of whether enforceability is considered in a proceeding
at law or in equity) and the discretion of any court before which any
proceeding therefor may be brought.
(i) The Registration Rights Agreement has been duly authorized,
executed and delivered by the Company and (assuming the due authorization,
execution and delivery by the Initial Purchaser) constitutes a valid and
legally binding agreement of the Company enforceable against the Company in
accordance with its terms except that the enforcement thereof may be
subject to (a) bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights
generally and (b) general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity) and the
discretion of any court before which any proceeding therefor may be
brought.
(j) The Security Documents have been duly authorized, executed and
delivered by the Company and (assuming the due authorization, execution
and delivery by any other party thereto) constitute a valid and legally
binding agreements of the Company enforceable against the Company in
accordance with their respective terms except that the enforcement thereof
may be subject to (a) bankruptcy, insolvency, reorganization, moratorium
or other similar laws now or hereafter in effect relating to creditors'
rights generally and (b) general principles of equity (regardless of
whether enforceability is considered in a proceeding at law or in equity)
and the discretion of any court before which any proceeding therefor may be
brought.
(k) Except as set forth in the Final Memorandum, no consent,
approval, authorization or order of any court or governmental agency or
body, or third party is
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required for the performance of any of the Transaction Documents by the
Company or the consummation by the Company of the transactions contemplated
thereby, except such as may be required and have been obtained under the
state securities or "Blue Sky" laws in connection with the purchase and
distribution of the Notes by the Initial Purchaser and applicable federal
securities laws in connection with the registration of the Exchange Notes
with the Commission and except as may be required and have been obtained
under the Revolving Credit Facility (as defined in the Indenture).
(l) Neither the Company nor any of the Subsidiaries is (i) in
violation of its certificate of incorporation or bylaws or similar
organizational documents, (ii) in violation of any statute, judgment,
decree, order, rule or regulation applicable to any of them or any of their
respective properties or assets, which violation would, singly or in the
aggregate, have a Material Adverse Effect, or (iii) in breach of or in
default in (including, without limitation, any event which with notice or
lapse of time would constitute a breach of or a default in) the performance
or observance of any obligation, agreement, covenant or condition contained
in any of (x) the Transaction Documents or (y) any other contract,
indenture, mortgage, deed of trust, loan agreement, note, lease, license,
franchise agreement, permit, certificate or agreement or instrument to
which any of them is a party or to which any of them or any of their
respective properties or assets is or will be bound or subject (each a
"Contract"), except in the case of clause (iii)(y) breaches or defaults,
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which singly or in the aggregate, would not have a Material Adverse Effect.
(m) The execution, delivery and full and timely performance by the
Company of each of the Transaction Documents and the consummation by the
Company of the transactions contemplated thereby, will not violate,
conflict with or constitute or result in a breach of or a default under (or
an event which, with notice or lapse of time, or both, would constitute a
breach of or a default under) (i) any of the terms or provisions of any of
(x) the Transaction Documents or (y) any other Contract, except in the
case of clause (y) which violations, conflicts, breaches or defaults,
would not, singly or in the aggregate, have a Material Adverse Effect, (ii)
the certificate of incorporation or bylaws or similar organizational
documents of the Company or any of the Subsidiaries or (iii) (assuming
compliance with all applicable state securities and "Blue Sky" laws) any
statute, judgment, decree, order, rule or regulation of any court or
governmental agency or other body applicable to the Company or any of the
Subsidiaries or any of their respective properties or assets, which
violation, conflict, breach or default would, singly or in the aggregate,
have a Material Adverse Effect.
(n) The audited consolidated financial statements of the Company and
its subsidiaries included in the Final Memorandum present fairly, in all
material respects, the consolidated financial position, results of
operations and cash flows of the Company at the dates and for the periods
to which they relate, and have been prepared in accor-
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dance with United States generally accepted accounting principles applied
on a consistent basis, except as otherwise stated therein. The summary and
selected financial and statistical data included in the Final Memorandum
present fairly, in all material respects, the information shown therein and
have been prepared and compiled on a basis consistent with the audited
financial statements included therein, except as otherwise stated therein;
and KPMG Peat Marwick LLP (the "Independent Accountant"), who have examined
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certain of such financial statements as set forth in its report included in
the Final Memorandum, is an independent public accounting firm within the
meaning of the Act and the rules and regulations promulgated thereunder
(the "Rules and Regulations").
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(o) No pro forma financial statements would be required to be
included in a registration statement filed under the Act for an offering of
securities equivalent to the Notes; the pro forma financial information
included in the Final Memorandum has been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma financial
statements, and has been properly computed on the basis described therein;
the assumptions used in the preparation of the pro forma financial
information included in the Final Memorandum are reasonable and the
adjustments used therein are appropriate to give effect to the
transactions or circumstances referred to therein.
(p) Except as described in the Final Memorandum, there is not pending
or, to the best knowledge of the Company after due inquiry, threatened any
action, suit, proceeding, inquiry or investigation to which the Company or
any of the Subsidiaries is a party, or to which any of their respective
properties or assets are subject, before or brought by any court,
arbitrator or governmental agency or body, which, if determined adversely
to the Company or any of the Subsidiaries, would result in any material
adverse change in the business, condition (financial or other), prospects,
results of operations of, or materially adversely affect the respective
properties or assets of the Company and the Subsidiaries, taken as a whole
(each such event a "Material Adverse Change"), or which seeks to restrain,
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enjoin, prevent the consummation of or otherwise challenge the issuance or
sale of the Notes to be sold hereunder or the consummation of the
transactions described in the Final Memorandum.
(q) The Company and each of the Subsidiaries own, possess or will
have obtained all licenses, permits, certificates, consents, orders,
approvals and other authorizations from, and have made all declarations and
filings with, all federal, state, local and other governmental authorities,
all self-regulatory organizations and all courts and other tribunals,
presently required or necessary to own or lease, as the case may be, and to
operate their respective properties and to carry on their business as now
conducted as set forth in the Final Memorandum, except where the failure to
obtain licenses, permits, certificates, consents, orders, approvals and
other authorizations, or to
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make all declarations and filings, would not, singly or in the aggregate,
have a Material Adverse Effect, and neither the Company nor any of the
Subsidiaries has received any notice of any proceeding relating to
revocation or modification of any such license, permit, certificate,
consent, order, approval or other authorization, except as described in the
Final Memorandum and except, where such revocation or modification would
not, singly or in the aggregate, have a Material Adverse Effect.
(r) Except as contemplated by this Agreement, subsequent to the
respective dates as of which information is given in the Final Memorandum
and except as described therein, (i) neither the Company nor any of the
Subsidiaries has incurred any liabilities or obligations, direct or
contingent, or entered into or agreed to enter into any transactions or
contracts (written or oral), in either case not in the ordinary course of
business and which are material to the Company and the Subsidiaries and
(ii) there has not occurred any Material Adverse Change, nor has any event
occurred, information become known or state of facts arisen which could,
singly or in the aggregate, reasonably be expected to result in a Material
Adverse Change, whether or not arising in the ordinary course of business.
(s) Neither the Company nor any agent acting on its behalf has taken
or will take any action that is reasonably likely to cause the execution of
this Agreement or the issuance or sale of the Notes to violate Regulation
G, T, U or X of the Board of Governors of the Federal Reserve System, in
each case as in effect, or as the same may hereafter be in effect, on the
Closing Date.
(t) Immediately after the consummation of the transactions
contemplated by the Transaction Documents, the fair value and present fair
salable value of the as sets of the Company (on a consolidated basis) will
exceed the sum of its stated liabilities and identified contingent
liabilities; the Company will not (on a consolidated basis) after giving
effect to the execution, delivery and performance of the Transaction
Documents and the consummation of the transactions contemplated thereby be,
(i) left with unreasonably small capital with which to carry on its
business as it is proposed to be conducted, (ii) unable to pay its debts
(contingent or otherwise) as they mature or (iii) otherwise insolvent.
(u) There exists as of the date hereof and will exist on the Closing
Date, after giving effect to the transactions contemplated by each of the
Transaction Documents, no event or condition which would constitute a
default or an event of default (in each case as defined in the Revolving
Credit Facility or the Railway Credit Facility (as defined in the
Indenture), as the case may be).
(v) Neither the Company nor any of its Affiliates (as defined in Rule
501(b) of Regulation D promulgated under the Act) has, directly or through
any agent, (i) sold, offered for sale, solicited offers to buy or otherwise
negotiated in respect of, any
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"security" (as defined in the Act) which is or will be integrated with the
sale of the Notes in a manner that would require the registration under the
Act of the Notes or (ii) engaged in any form of general solicitation or
general advertising in connection with the offering of the Notes (as those
terms are used in Regulation D under the Act) or in any manner involving a
public offering within the meaning of Section 4(2) of the Act.
(w) Assuming the accuracy of the representations and warranties of
the Initial Purchaser in Section 8 hereof, it is not necessary in
connection with the offer, sale and delivery of the Notes to the Initial
Purchaser in the manner contemplated by this Agreement to register any of
the Notes under the Act or to qualify the Indenture under the TIA.
(x) The statistical and market-related data included in the Final
Memorandum are based on or derived from sources which the Company believes
to be reliable and accurate.
(y) No labor dispute with the employees of the Company or any of the
Subsidiaries is imminent or which could reasonably be expected to have,
singly or in the aggregate, a Material Adverse Effect.
(z) The Company and each of the Subsidiaries carry, and as of the
Closing Date will carry, insurance in such amounts and covering such risks
as is adequate for the conduct of their respective businesses and the value
of their respective properties.
(aa) Except as disclosed in the Final Memorandum, or except as would
not individually or in the aggregate have a Material Adverse Effect, (A)
the Company and each of the Subsidiaries are in compliance with and not
subject to liability under applicable Environmental Laws, (B) the Company
and each of the Subsidiaries have made all filings and provided all notices
required under any applicable Environmental Law, and have and are in
compliance with all permits, licenses, authorizations and approvals
required under any applicable Environmental Laws and each of them is in
full force and effect, (C) there is no civil, criminal or administrative
action, suit, demand, claim, hearing, notice of violation, investigation,
proceeding, notice or demand letter or request for information pending or,
to the knowledge of the Company, threatened against the Company or any of
the Subsidiaries under any Environmental Law, (D) no Lien has been recorded
under any Environmental Law with respect to any assets, facility or
property owned, operated, leased or controlled by the Company or any of the
Subsidiaries, (E) the Company and each of the Subsidiaries have not
received notice that it has been identified as a potentially responsible
party under the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended ("CERCLA") or any comparable state law,
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(F) no property or facility of the Company or any of the Subsidiaries is
(i) listed or proposed for listing on the National Priorities
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List under CERCLA or (ii) listed in the Comprehensive Environmental
Response, Compensation, Liability Information System List promulgated
pursuant to CERCLA, or on any comparable list maintained by any state or
local governmental authority.
For purpose of this Agreement, "Environmental Laws" means the common
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law and all applicable federal, state and local laws or regulations, codes,
orders, decrees, judgments or injunctions issued, promulgated, approved or
entered thereunder, relating to pollution or protection of public or
employee health and safety or the environment, including, without
limitation, laws relating to (i) emissions, discharges, releases or
threatened releases of hazardous materials, into the environment
(including, without limitation, ambient air, surface water, ground water,
land surface or subsurface strata), (ii) the manufacture, processing,
distribution, use, generation, treatment, storage, disposal, transport or
handling of hazardous materials, and (iii) underground and above ground
storage tanks, and related piping, and emissions, discharges, releases or
threatened releases therefrom.
(bb) Upon execution and delivery by the Company on the Closing Date
and assuming due recording, each of the Mortgages will create and
constitute (A) a valid and enforceable mortgage lien on the real property
and fixtures described therein (the "Real Property") and (B) a valid and
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enforceable security interest in the Equipment and such other items of the
Mortgaged Property (as defined in such Mortgage), other than the Real
Property, in which a security interest can be created under Article 9 (the
"UCC Property") of the Uniform Commercial Code (the "UCC") as in effect in
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the state in which such Mortgaged Property is located. Each Mortgage will
be in proper form under laws of the state in which the Mortgaged Property
encumbered thereby is located, to be accepted for recording in the county
where such Mortgaged Property is located.
(cc) Upon execution and delivery by the Company on the Closing Date,
the Security Agreement will create and constitute a valid and enforceable
security interest in, lien on or pledge of all of the Pledged Collateral
(as defined in the Security Agreement). In no event shall any Mortgage,
Security Agreement or other instrument or document executed in connection
herewith be deemed or intended to create, grant or perfect any interest in
or lien or any accounts receivable or inventory of the Company.
(dd) Assuming the proper filing of UCC-3 termination statements and
mortgage releases relating to the collateral securing the Company's First
Mortgage Notes due 2001 and the proper filing of UCC-3 termination or
amendment statements relating to the second lien of the Revolving Credit
Facility (as defined in the Final Memorandum) on the Pledged Collateral,
upon the filing of the UCC-1 financing statements (the "Financing
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Statements") relating to (A) each Mortgage with the Office of the Secretary
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of State in the state in which the Mortgaged Property encumbered by each
such
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Mortgage is located, and with the recorder in the county where Real
Property encumbered by such Mortgage is located (other than Oklahoma), and
(B) the Security Agreement with the Office of the Secretary of State in
each state in which Mortgaged Property is located and each state in which
Pledged Collateral is located (except that in Oklahoma, the Financing
Statements relating to the Security Agreement shall be filed with the
County Clerk of Oklahoma County) and with the recorder in the county where
Real Property encumbered by a Mortgage is located and in each county where
Pledged Collateral is located and with the Secretary of State in the state
in which the Company has its principal executive offices, the security
interest, lien or pledge created by (x) the Security Agreement covering the
Pledged Collateral will create a perfected security interest with respect
to that portion of the Pledged Collateral in which a security interest can
be perfected by the filing of a financing statement, prior to all other
claims or security interests therein which may be perfected by the filing
of a Financing Statement or by possession, except for prior liens and
encumbrances permitted by the Security Agreement, and (y) each Mortgage
covering UCC Property will create a perfected security interest with
respect to that portion of the UCC Property in which a security interest
can be perfected by filing a financing statement; prior to all other
security interests therein which may be perfected by filing a Financing
Statement or by possession, except for prior liens and encumbrances
permitted by the Security Agreement or the Mort gages, respectively.
(ee) The Company does not have any liability for any prohibited
transaction or funding deficiency or any complete or partial withdrawal
liability with respect to any pension, profit sharing or other plan which
is subject to the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), to which the Company makes or ever has made a
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contribution and in which any employee of the Company is or has ever been a
participant; with respect to such plans, to the best knowledge of the
Company after due inquiry, the Company is in compliance in all material
respects with all applicable provisions of ERISA.
(ff) Neither the Company nor any of the Subsidiaries is an
"investment company" or "promoter" or "principal underwriter" for an
"investment company," as such terms are defined in the Investment Company
Act of 1940, as amended, and the rules and regulations thereunder.
Any certificate signed by any officer of the Company and delivered to
the Initial Purchaser or to counsel for the Initial Purchaser shall be deemed a
representation and warranty by the Company to the Initial Purchaser as to the
matters covered thereby.
3. Purchase, Sale and Delivery of the Notes. On the basis of the
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representations, warranties, agreements and covenants herein contained and
subject to the terms and conditions herein set forth, the Company agrees to
issue and sell to the Initial Purchaser,
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and the Initial Purchaser agrees to purchase from the Company, the Notes at
97.75% of their principal amount. One or more certificates in definitive form
for the Notes that the Initial Purchaser has agreed to purchase hereunder, and
in such denomination or denominations and registered in such name or names as
the Initial Purchaser requests upon notice to the Company at least 48 hours
prior to the Closing Date, shall be delivered by or on behalf of the Company to
the Initial Purchaser (with any transfer taxes payable in connection with the
transfer of such Notes to the Initial Purchaser duly paid by the Company),
against payment by or on behalf of the Initial Purchaser of the purchase price
therefor by wire transfer (same day funds) to such account or accounts as the
Company shall specify prior to the Closing Date. Such delivery of and payment
for the Notes shall be made at the offices of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ at 10:00 A.M., New York time, on December 5, 1997, or
at such other place, time or date as the Initial Purchaser and the Company may
agree upon, such time and date of delivery against payment being herein
referred to as the "Closing Date." The Company will make such certificate or
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certificates for the Notes available for checking and packaging by the Initial
Purchaser at the offices of BT Alex. ▇▇▇▇▇ Incorporated in New York, New York,
or at such other place as BT Alex. ▇▇▇▇▇ Incorporated may designate, at least 24
hours prior to the Closing Date.
4. Offering by the Initial Purchaser. The Initial Purchaser
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proposes to make an offering of the Notes at the price and upon the terms set
forth in the Final Memorandum, as soon as practicable after this Agreement is
entered into and as in the judgment of the Initial Purchaser is advisable.
5. Covenants of the Company. The Company covenants and agrees with
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the Initial Purchaser that:
(a) The Company will not amend or supplement the Final Memorandum or
any amendment or supplement thereto of which the Initial Purchaser and its
counsel shall not previously have been advised and furnished with a copy a
reasonable period of time prior to the proposed amendment or supplement
and as to which the Initial Purchaser shall not have given its prior
consent. The Company will, promptly upon the reasonable request by the
Initial Purchaser or counsel for the Initial Purchaser, make any amendments
or supplements to any Memorandum that may be necessary or advisable in
connection with the distribution of the Notes by the Initial Purchaser.
(b) The Company will cooperate with the Initial Purchaser in
arranging for the qualification of the Notes for offering and sale under
the securities or "Blue Sky" laws of such jurisdictions as the Initial
Purchaser may designate and will continue such qualifications in effect
for as long as may be necessary to complete the distribution of the Notes;
provided, however, that in connection therewith the Company shall not be
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required to qualify as a foreign corporation or to take any action that
would subject it to a general consent to service of process in any
jurisdiction.
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(c) If, at any time prior to the completion of the distribution of
the Notes or the Private Exchange Notes, as the case may be, to persons
that are not affiliates of the Initial Purchaser (as determined by the
Initial Purchaser), any event occurs or information becomes known as a
result of which the Final Memorandum as then amended or supplemented would
include any untrue statement of a material fact, or omit to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if for any
other reason it is necessary or advisable at any time to amend or
supplement the Final Memorandum to comply with applicable law, the Company
will promptly notify the Initial Purchaser thereof and will prepare, at its
sole expense, an amendment or supplement to the Final Memorandum that
corrects such statement or omission or effects such compliance.
(d) The Company will, without charge, provide to the Initial
Purchaser and to counsel for the Initial Purchaser as many copies of each
Memorandum or any amendment or supplement thereto as the Initial Purchaser
may reasonably request.
(e) The Company will apply the net proceeds from the sale of the
Notes, as set forth under "Use of Proceeds" in the Final Memorandum.
(f) For and during the period ending on the date no Notes are
outstanding the Company will furnish to the Initial Purchaser upon request
copies of all reports and other communications (financial or otherwise)
furnished by the Company to its security holders generally and copies of
any reports or financial statements furnished to or filed by the Company
with the Commission or any national securities exchange on which any class
of securities of the Company may be listed.
(g) Prior to the Closing Date, the Company will furnish to the
Initial Purchaser, if and to the extent and as soon as they have been
prepared and are available, a copy of any unaudited interim consolidated
financial statements of the Company for any period subsequent to the
period covered by the most recent financial statements appearing in the
Final Memorandum.
(h) Neither the Company nor any of its Affiliates will sell, offer
for sale or solicit offers to buy or otherwise negotiate in respect of any
"security" (as defined in the Act) which could be integrated with the sale
of the Notes in a manner which would require the registration under the Act
of the Notes.
(i) The Company will not, and will not permit any of the Subsidiaries
to, solicit any offer to buy or offer to sell the Notes by means of any
form of general solicitation or general advertising (as those terms are
used in Regulation D under the Act) or in any manner involving a public
offering within the meaning of Section 4(2) of the Act.
-13-
(j) For so long as any of the Notes remain outstanding, the Company
will make available, upon request, to any seller of such Notes the
information specified in Rule 144A(d)(4) promulgated under the Act, unless
the Company is subject to Section 13 or 15(d) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act").
------------
(k) The Company will use its best efforts to (i) permit the Notes to
be designated PORTAL securities in accordance with the rules and
regulations adopted by the National Association of Securities Dealers, Inc.
relating to trading in the Private Offerings, Resales and Trading through
Automated Linkages market (the "PORTAL Market") and (ii) permit the Notes
-------------
to be eligible for clearance and settlement through The Depository Trust
Company.
6. Expenses. The Company agrees that, whether or not the
--------
transactions contemplated herein are consummated or this Agreement is terminated
pursuant to Section 11 hereof, it shall pay or cause to be paid all costs and
expenses incident to the performance of its obligations hereunder and shall pay
or cause to be paid all costs and expenses incident to (a) the printing or
other production (including word processing) of all documents relating to the
transactions contemplated hereby, including, without limitation, each Memorandum
and any amendment or supplement thereto, and any "Blue Sky" memoranda, (b) all
arrangements relating to the delivery to the Initial Purchaser of copies of the
foregoing documents and copies of the other Transaction Documents as required by
this Agreement, (c) the fees and disbursements of the counsel, the accountants
and any other experts or advisors retained by the Company, (d) preparation
(including printing), issuance and delivery to the Initial Purchaser of the
Notes, (e) the qualification of the Notes under state securities and "Blue Sky"
laws, including filing fees and reasonable fees and disbursements of counsel
for the Initial Purchaser relating thereto, (f) expenses of the Company in
connection with any meetings with prospective investors in the Notes, (g) fees
and expenses of the Trustee including fees and expenses of its counsel, (h) all
expenses and listing fees incurred in connection with the application for
quotation of the Notes on the PORTAL Market and (j) any fees charged by
investment rating agencies for the rating of the Notes. If the sale of the
Notes provided for herein is not consummated because any condition to the
obligations of the Initial Purchaser set forth in Section 7 hereof is not
satisfied, because this Agreement is terminated or because of any failure,
refusal or inability on the part of the Company to perform all obligations and
satisfy all conditions on its part to be performed or satisfied hereunder (other
than solely by reason of a default by the Initial Purchaser), the Company will
promptly reimburse the Initial Purchaser upon demand for all out-of-pocket
expenses (including reasonable fees, disbursements and charges of ▇▇▇▇▇▇ ▇▇▇▇▇▇
& ▇▇▇▇▇▇▇, counsel for the Initial Purchaser) that shall have been incurred by
the Initial Purchaser in connection with the proposed purchase and sale of the
Notes.
7. Conditions of the Initial Purchaser's Obligations. The
-------------------------------------------------
obligation of the Initial Purchaser to purchase and pay for the Notes shall, in
its sole discretion, be subject to the satisfaction and fulfillment of the
following conditions on or prior to the Closing Date:
-14-
(a) The Initial Purchaser shall have received a signed opinion, in
form and substance satisfactory to the Initial Purchaser and ▇▇▇▇▇▇ ▇▇▇▇▇▇
& ▇▇▇▇▇▇▇, counsel for the Initial Purchaser, dated the Closing Date and
addressed to the Initial Purchaser, of Mintz, Levin, Cohn, Ferris, Glovsky
and Popeo, P.C. ("Mintz ▇▇▇▇▇"), counsel for the Company, in the form of
-----------
Exhibit B hereto. In addition, in rendering their opinion, Mintz, ▇▇▇▇▇
---------
may rely as to matters involving the application of laws of any
jurisdiction other than the Commonwealth of Massachusetts or the General
Corporation Law of the State of Delaware or federal law, to the extent such
counsel deems proper and specifies in such opinion, upon the opinion of
other counsel who are reasonably satisfactory to counsel for the Initial
Purchaser; provided, however, that ▇▇▇▇▇ ▇▇▇▇▇ shall state that they, the
-------- -------
Initial Purchaser and counsel for the Initial Purchaser are justified in
relying on such opinion.
(b) The Initial Purchaser shall have received a signed opinion, in
form and substance satisfactory to the Initial Purchaser and ▇▇▇▇▇▇ ▇▇▇▇▇▇
& ▇▇▇▇▇▇▇, counsel for the Initial Purchaser, dated the Closing Date and
addressed to the Initial Purchaser, from a local counsel in each
jurisdiction in which Mortgaged Property is located, each substantially in
the form of Exhibit C hereto.
---------
(c) The Initial Purchaser shall have received a signed opinion, in
form and substance satisfactory to the Initial Purchaser, dated the Closing
Date and addressed to the Initial Purchaser, of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇,
counsel for the Initial Purchaser, with respect to certain legal matters
relating to this Agreement, and such other related matters as the Initial
Purchaser may reasonably require. In rendering such opinion, ▇▇▇▇▇▇ ▇▇▇▇▇▇
& ▇▇▇▇▇▇▇ shall have received, and may rely upon, such certificates and
other documents and information as they may reasonably re quest to pass
upon such matters.
(d) The Initial Purchaser shall have received from the Independent
Accountant a letter dated the date hereof and the Closing Date, addressed
to the Initial Purchaser, each in form and substance satisfactory to the
Initial Purchaser and Ca ▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for the Initial
Purchaser.
(e) The representations and warranties of the Company contained in
this Agreement shall be true and correct in all material respects on and as
of the date hereof and on and as of the Closing Date as if made on and as
of the Closing Date; the Company shall have performed all covenants and
agreements and satisfied all conditions on their part to be performed or
satisfied hereunder at or prior to the Closing Date; and, subsequent to the
date of the most recent financial statements in the Final Memorandum, there
shall have been no Material Adverse Change.
(f) The sale of the Notes by the Company hereunder shall not be
enjoined (temporarily or permanently) on the Closing Date.
-15-
(g) Subsequent to the date as of which information is given in the
Final Memorandum, except in each case as described in the Final Memorandum,
neither the Company nor any of the Subsidiaries shall have incurred any
liabilities or obligations, direct or contingent (whether or not in the
ordinary course of business), that are material to the business, condition
(financial or other) or results of operations or prospects of the Company
and the Subsidiaries, taken as a whole, or entered into any transactions
whether or not in the ordinary course of business that are material to the
business, condition (financial or other) or results of operations or
prospects of the Company and the Subsidiaries, taken as a whole, and there
shall not have been any adverse change in the capital stock or long-term
indebtedness of the Company or any of the Subsidiaries that is material to
the business, condition (financial or other) or results of operations or
prospects of the Company and the Subsidiaries, taken as a whole.
(h) Subsequent to the date as of which information is given in the
Final Memorandum, the conduct of the business and operations of the Company
or any of the Subsidiaries has not been interfered with by strike, fire,
flood, hurricane, accident or other calamity (whether or not insured) or
by any court or governmental action, order or decree and, except as
otherwise stated in the Final Memorandum, the properties of the Company or
any of the Subsidiaries have not sustained any loss or damage (whether or
not insured) as a result of any such occurrence, except any such
interference, loss or damage which would not, singly or in the aggregate,
have a Material Adverse Effect.
(i) The Initial Purchaser shall have received a certificate of the
Company, dated the Closing Date and addressed to the Initial Purchaser,
signed on behalf of the Company by its Chairman, President or any Vice
President and the Chief Financial Officer to the effect that:
(i) The representations and warranties of the Company
contained in this Agreement are true and correct in all material
respects as if made on and as of the Closing Date, and the Company has
performed in all material respects all covenants and agreements and
satisfied all conditions on its part to be performed or satisfied in
connection with this Agreement at or prior to the Closing Date;
(ii) At the Closing Date, since the date hereof or since the
respective dates as of which information is given in the Final
Memorandum (exclusive of any amendment or supplement thereto since the
date hereof), no event or events have occurred, no information has
become known nor does any condition exist that, individually or in the
aggregate, to the best knowledge of such officers after due inquiry
would have a material adverse effect on the
-16-
business, condition (financial or other) or results of operations or
prospects of the Company;
(iii) Since the date hereof or since the date of which
information is given in the Final Memorandum, neither the Company nor
any of the Subsidiaries has incurred any liabilities or obligations
direct or contingent (other than in the ordinary course of business)
that are material to the Company or any of the Subsidiaries or,
entered into any transactions not in the ordinary course of business
that are material to the business, condition (financial or other) or
results of operations or prospects of the Company and the
Subsidiaries, taken as a whole, and there has not been any change in
the capital stock or long-term indebtedness of the Company or any of
the Subsidiaries that is material to the business, condition
(financial or other) or results of operations or prospects of the
Company and the Subsidiaries at and as of the Closing Date, taken as a
whole, except as described by the Final Memorandum.
(iv) The sale of the Notes by the Company has not been
enjoined (temporarily or permanently).
(j) The Initial Purchaser shall have received the Registration Rights
Agreement executed by the Company and the Registration Rights Agreement
shall be in full force and effect at all times from and after the date
hereof.
(k) On the Closing Date, the Company shall have delivered to the
Initial Purchaser and to the Trustee the following documents and
instruments with regard to the Mortgaged Property:
(i) each Mortgage encumbering the Company's fee interest in
the Mortgaged Property, duly executed and acknowledged by the owner or
holder of such fee interest and otherwise in form for recording in the
appropriate recording office of the political subdivision where such
Mortgaged Property is situated, together with such certificates,
affidavits, questionnaires or returns as shall be required in
connection with the recording or filing thereof and such UCC-1
financing statements and other similar statements as are contemplated
in respect of such Mortgage by the local counsel opinion delivered
with respect thereto, pursuant to Section 7(b) hereof, and any other
instruments necessary to grant the interests purported to be granted
by the Mortgage under the laws of any applicable jurisdiction, which
Mortgage and financing statements and other instruments shall be
effective to create a Lien (as defined in the Indenture) on such
Mortgaged Property subject to no Liens other than as set forth in
Schedule B to the applicable Mortgage;
-17-
(ii) with respect to each Mortgage, a policy of title
insurance on ALTA Form B (1990) or equivalent (or a commitment to
issue such a policy) insuring (or committing to insure) the Lien of
the Mortgage as a valid first mortgage Lien on the Real Property in
respect of the Notes in an amount not less than the fair market value
of such Real Property which policy (or commitment) shall (A) be issued
by Chicago Title Insurance Company or another nationally recognized
title insurance company reasonably acceptable to the Initial
Purchaser, (B) include such reinsurance arrangements (with provisions
for direct access) as shall be reasonably acceptable to the Initial
Purchaser, (C) have been supplemented by such endorsements, or, where
such endorsements are not available at commercially reasonable
premium costs, opinion letters of special counsel, architects or other
professionals, which counsel, architects or other professionals shall
be reasonably acceptable to the Initial Purchaser, as shall be
reasonably requested by the Initial Purchaser (including, without
limitation, endorsements or opinion letters on matters relating to
usury, last dollar, zoning, non-imputation, public road access,
contiguity (where appropriate), except that improvements need not be
located thereon, survey, variable rate and so-called comprehensive
coverage over covenants and restrictions) and (D) contain only such
exceptions to title as shall be reasonably agreed to by the Initial
Purchaser prior to the Closing Date with respect to such Mortgaged
Property;
(iii) with respect to each Mortgaged Property, a survey
complying with the minimum detail requirements of the American Land
Title Association (as such requirements are in effect on the date of
delivery of such survey), except that improvements need not be
located thereon, certified to the Trustee, and dated (or redated) not
earlier than six months prior to the date of delivery thereof, unless
there shall have occurred any exterior change in the property affected
thereby during such period, in which event such survey shall be dated
or redated to a date after the completion of such change, which survey
shall locate all public streets and certify that none of the recorded
easements encroach upon the improvements on such Mortgaged Property;
(iv) with respect to the Mortgaged Property, such consents,
approvals, amendments, supplements, estoppels, tenant subordination
agreements or other instruments as shall reasonably be deemed
necessary by the Initial Purchaser in order for the owner or holder of
the fee interest to grant the Lien contemplated by the Mortgage with
respect to such Mortgaged Property;
(v) with respect to the Mortgaged Property, policies or
certificates of insurance as required by the Mortgage relating
thereto, which policies or
-18-
certificates shall bear mortgagee endorsements of the character
customarily and reasonably required by the Mortgage;
(vi) with respect to each Mortgaged Property, UCC, judgment
and tax lien searches confirming that the personal property comprising
a part of such Mortgaged Property is subject to no Liens other than as
set forth in Schedule B to the applicable Mortgage;
(vii) checks payable to the appropriate public officials in
payment of all recording costs and transfer taxes due in respect of
the execution, delivery or recording of each Mortgage, together with
a check or wire transfer for the title company in payment of its
premium search and examination charges, survey costs and any other
amounts due in connection with the issuance of its policies (or
commitments);
(viii) with respect to the Mortgaged Property, copies of all
Leases and Subleases (as defined in the Mortgages), all of which
Leases and Subleases shall, to the extent not previously approved in
writing by the Initial Purchaser, be reasonably satisfactory to the
Initial Purchaser; and
(ix) with respect to the Mortgaged Property, an Officers'
Certificate (as defined in the Indenture) stating that (i) there has
been issued and is in effect a valid and proper certificate of
occupancy or local equivalent if required by the local codes or
ordinances, for the use of such Mortgaged Property and (ii) there is
not outstanding any citation, violation or similar notice indicating
that such Mortgaged Property contains conditions which are not in
compliance with local codes or ordinances relating to building or fire
safety or structural soundness.
(l) On the Closing Date, the Company shall have delivered to the
Initial Purchaser and to the Trustee the Security Agreement, duly executed
by the Company, together with the evidence of the filing of appropriate
financing statements in each of the offices where such filing is necessary
or, in the opinion of the Initial Purchaser, desirable to perfect the Liens
created or intended to be created, by the Security Agreement. All filing
fees and taxes in connection with such filings shall have been paid and the
Initial Purchaser shall have received evidence satisfactory to it of such
filings and payments, including in the case of any financing statements,
the acknowledgment copies of all such financing statements bearing evidence
of filing in each such office.
(m) On the Closing Date, the Company shall have delivered to the
Initial Purchaser, the Intercreditor Agreement among the Company, the
Trustee and NationsBank, N.A. duly executed by the Company.
-19-
(n) On the Closing Date, the Company shall have delivered or cause to
be delivered to the Initial Purchaser such documentation and instruments as
may be necessary or required to effectuate the termination of the Lien of
the Revolver Lender on the Pledged Collateral and Mortgaged Property,
including, without limitation, mortgage releases, UCC financing statements
and amendments to the existing Revolving Credit Facility.
On or before the Closing Date, the Initial Purchaser and ▇▇▇▇▇▇ ▇▇▇▇▇▇
& ▇▇▇▇▇▇▇, counsel for the Initial Purchaser, shall have received such further
documents, certificates and schedules or instruments relating to the business,
corporate, legal and financial affairs of the Company as they shall reasonably
request from the Company.
All such opinions, certificates, letters, schedules, documents or
instruments delivered pursuant to this Section 7 will comply with the provisions
hereof only if they are reasonably satisfactory in all respects to the Initial
Purchaser. The Company shall furnish to the Initial Purchaser such conformed
copies of such opinions, certificates, letters, schedules, documents and
instruments and such other documents, in such quantities as the Initial
Purchaser shall reasonably request.
8. Offering of Notes; Restrictions on Transfer. The Initial
-------------------------------------------
Purchaser represents and warrants that it is a qualified institutional buyer as
defined in Rule 144A promulgated under the Act (a "QIB"). The Initial Purchaser
---
agrees with the Company that (a) it has not and will not solicit offers for, or
offer or sell, the Notes by any form of general solicitation or general
advertising (as those terms are used in Regulation D under the Act) or in any
manner involving a public offering within the meaning of Section 4(2) of the
Act; and (b) it has and will solicit offers for the Notes only from, and will
offer the Notes only to (A) in the case of offers inside the United States,
persons whom the Initial Purchaser reasonably believes to be QIBs or, if any
such person is buying for one or more institutional accounts for which such
person is acting as fiduciary or agent, only when such person has represented to
the Initial Purchaser that each such account is a QIB, to whom notice has been
given that such sale or delivery is being made in reliance on Rule 144A under
the Act ("Rule 144A"), and, in each case, in transactions under Rule 144A or (B)
---------
in the case of offers outside the United States, to persons other than U.S.
persons ("foreign purchasers," which term shall include dealers or other
professional fiduciaries in the United States acting on a discretionary basis
for foreign beneficial owners (other than an estate or trust)); provided,
--------
however, that, in the case of clauses (b)(A) and (b)(B) above, in purchasing
-------
such Notes such persons are deemed to have represented and agreed as provided
under the caption "Transfer Restrictions" contained in the Final Memorandum.
9. Indemnification and Contribution. (a) The Company agrees to
--------------------------------
indemnify and hold harmless the Initial Purchaser, and each person, if any, who
controls the Initial Purchaser within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act,
-20-
against any losses, claims, damages or liabilities to which the Initial
Purchaser or such controlling person may become subject under the Act, the
Exchange Act or otherwise, insofar as any such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement of any
material fact contained in (A) any Memorandum or any amendment or
supplement thereto or (B) any application or other document, or any
amendment or supplement thereto, executed by the Company or based upon
written information furnished by or on behalf of the Company filed in any
jurisdiction in order to qualify the Notes under the securities or "Blue
Sky" laws thereof or filed with any securities association or securities
exchange (each an "Application"); or
-----------
(ii) the omission or alleged omission to state in (A) any
Memorandum or any amendment or supplement thereto or (B) any Application, a
material fact required to be stated therein or necessary to make the
statements therein in light of the circumstances under which they were made
not misleading,
and will reimburse, as incurred, the Initial Purchaser and each such controlling
person for any legal or other out-of-pocket expenses incurred by the Initial
Purchaser or such controlling person in connection with investigating or
defending against or appearing as a third-party witness in connection with any
such loss, claim, damage, liability or action in respect thereof; provided,
--------
however, that the Company will not be liable in any such case to the extent, but
-------
only to the extent, that any such loss, claim, damage or liability arises out of
or is based upon any untrue statement or alleged untrue statement or omission or
alleged omission made in any Memorandum or any amendment or supplement thereto,
or any Application in reliance upon and in conformity with written information
concerning the Initial Purchaser furnished to the Company by the Initial
Purchaser specifically for use therein. This indemnity agreement will be in
addition to any liability that the Company may otherwise have to the indemnified
parties. The Company shall not be liable under this Section 9 for any
settlement of any claim or action effected without its prior written consent
(which shall not be unreasonably withheld).
(b) The Initial Purchaser will indemnify and hold harmless the
Company, its directors and its officers and each person, if any, who controls
the Company within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act against any losses, claims, damages or liabilities to which the
Company or any such director, officer or controlling person may become subject
under the Act, the Exchange Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon (i) any untrue statement or alleged untrue statement of any material fact
contained in any Memorandum or any amendment or supplement thereto, or any
Applica tion or (ii) the omission or the alleged omission to state therein a
material fact required to be stated in any Memorandum or any amendment or
supplement thereto, or necessary to make the statements therein
-21-
not misleading, in each case to the extent but only to the extent that such
untrue statement or alleged untrue statement or omission or alleged omission was
made in reliance upon and in conformity with written information concerning the
Initial Purchaser furnished to the Company by or on behalf of the Initial
Purchaser specifically for use therein; and, subject to the limitation set forth
immediately preceding this clause, will reimburse, as incurred, any legal or
other expenses incurred by the Company, or any such director, officer or
controlling person in connection with investigating or defending against or
appearing as a third-party witness in connection with any such loss, claim,
damage, liability or action in respect thereof. This indemnity agreement will
be in addition to any liability that the Initial Purchaser may otherwise have to
the indemnified parties. The Initial Purchaser shall not be liable under this
Section 9 for any settlement of any claim or action effected without their
consent (which shall not be unreasonably withheld). The Company shall not,
without the prior written consent of the Initial Purchaser, effect any
settlement or compromise of any pending or threatened proceeding in respect of
which any Initial Purchaser is or could have been a party, or indemnity could
have been sought hereunder by such Initial Purchaser, unless such settlement (A)
includes an unconditional written release of the Initial Purchaser, in form and
substance reasonably satisfactory to the Initial Purchaser, from all liability
on claims that are the subject matter of such proceeding and (B) does not
include any statement as to an admission of fault, culpability or failure to act
by or on behalf of any Initial Purchaser.
(c) Promptly after receipt by an indemnified party under this Section
9 of notice of the commencement of any action for which such indemnified party
is entitled to indemnification under this Section 9, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 9, notify the indemnifying party of the commencement thereof
in writing, but the omission to so notify the indemnifying party (i) will not
relieve it from any liability under paragraph (a) or (b) above unless and to the
extent such failure results in the forfeiture by the indemnifying party of
substantial rights and defenses and (ii) will not, in any event, relieve the
indemnifying party from any obligations to any indemnified party other than the
indemnification obligation provided in paragraphs (a) and (b) above. In case
any such action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party;
provided, however, that if (i) the use of counsel chosen by the indemnifying
-------- -------
party to represent the indemnified party would present such counsel with a
conflict of interest, (ii) the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have been advised by counsel that there may be one or more legal defenses
available to it and/or other indemnified parties that are different from or
additional to those available to the indemnifying party, or (iii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after receipt by the indemnifying party of notice of the institution of
such action, then, in each such case, the indemnify-
-22-
ing party shall not have the right to direct the defense of such action on
behalf of such indemnified party or parties and such indemnified party or
parties shall have the right to select separate counsel to defend such action on
be half of such indemnified party or parties. After notice from the indemnifying
party to such indemnified party of its election so to assume the defense thereof
and approval by such in demnified party of counsel appointed to defend such
action, the indemnifying party will not be liable to such indemnified party
under this Section 9 for any legal or other expenses, other than reasonable
costs of investigation, subsequently incurred by such indemnified party in
connection with the defense thereof, unless (i) the indemnified party shall have
employed separate counsel in accordance with the proviso to the immediately
preceding sentence (it being understood, however, that, in connection with such
action the indemnifying party shall not be liable for the expenses of more than
one separate counsel (in addition to local counsel) in any one action or
separate but substantially similar actions in the same jurisdiction arising out
of the same general allegations or circumstances, designated by the Initial
Purchaser in the case of paragraph (a) of this Section 9 or the Company, in the
case of paragraph (b) of this Section 9, representing the indemnified parties
under such paragraph (a) or paragraph (b), as the case may be, who are parties
to such action or actions), or (ii) the indemnifying party has authorized in
writing the employment of counsel for the indemnified party at the expense of
the indemnifying party. After notice from the indemnify ing party to such
indemnified party of its election to assume the defense of such action, the
indemnifying party will not be liable for the costs and expenses of any
settlement of such action effected by such indemnified party without the prior
written consent of the indemnifying party (which consent shall not be
unreasonably withheld or delayed).
(d) In circumstances in which the indemnity agreement provided for in
the preceding paragraphs of this Section 9 is for any reason unavailable or
insufficient to hold harmless an indemnified party in respect of any losses,
claims, damages or liabilities (or actions in respect thereof), each
indemnifying party, in order to provide for just and equitable contribution,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect (i) the relative
benefits received by the indemnifying party or parties on the one hand and the
indemnified party on the other from the offering of the Notes or (ii) if the
allocation provided by the foregoing clause (i) is not permitted by applicable
law, not only such relative benefits but also the relative fault of the
indemnifying party or parties on the one hand and the indemnified party on the
other in connection with the statements or omissions or alleged statements or
omissions that resulted in such losses, claims, damages or liabilities (or
actions in respect thereof). The relative benefits received by the Company on
the one hand and the Initial Purchaser on the other shall be deemed to be in the
same proportion as the total proceeds from the offering (before deducting
expenses) received by the Company bear to the total discounts and commissions
received by such Initial Purchaser. The relative fault of the parties shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company on the
-23-
one hand, or the Initial Purchaser on the other, the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission, and any other equitable considerations appropriate in the
circumstances.
(e) The Company and the Initial Purchaser agree that it would not be
just and equitable if the amount of such contribution were determined by pro
---
rata or per capita allocation or by any other method of allocation that does not
----
take into account the equitable considerations referred to in the first sentence
of the immediately preceding paragraph (d). Notwithstanding any other provision
of the immediately preceding paragraph (d), the Initial Purchaser shall not be
obligated to make contributions hereunder that in the aggregate exceed the
total discounts and commissions received by the Initial Purchaser under this
Agreement, less the aggregate amount of any damages that such Initial Purchaser
has otherwise paid or been required to pay by reason of the untrue or alleged
untrue statements or the omissions or alleged omissions to state a material
fact, and no person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty or such fraudulent misrepresentation. For purposes of the
immediately preceding paragraph (d), each person, if any, who controls such
Initial Purchaser within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act shall have the same rights to contribution as such Initial
Purchaser, and each director of the Company, and each officer of the Company and
each person, if any, who controls the Company within the meaning of Section 15
of the Act or Section 20 of the Exchange Act, shall have the same rights to
contribution as the Company.
10. Survival Clause. The respective representations, warranties,
---------------
agreements, covenants, indemnities and other statements of the Company and the
Initial Purchaser set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement shall remain in full force and effect,
regardless of (a) any investigation made by or on behalf of the Company, any of
its officers or directors, the Initial Purchaser or any controlling person
referred to in Section 9 hereof, and (b) delivery of and payment for the Notes.
The respective agreements, covenants, indemnities and other statements set forth
in Sections 6 and 9 hereof shall remain in full force and effect, regardless of
any termination or cancellation of this Agreement.
11. Termination. (a) This Agreement may be terminated in the sole
-----------
discretion of the Initial Purchaser by written notice to the Company given prior
to the Closing Date in the event that the Company shall have failed, refused or
been unable to perform all obligations and satisfy all conditions on their
respective part to be performed or satisfied hereunder at or prior thereto or,
if at or prior to the Closing Date:
(i) either the Company or any of the Subsidiaries shall have
sustained any loss or interference with respect to its business or
properties from fire, flood, hurricane, accident or other calamity, whether
or not covered by insurance, or from any la-
-24-
bor dispute or any legal or governmental proceeding, which loss or
interference, in the sole judgment of the Initial Purchaser, has had or has
a Material Adverse Effect or there shall have been, in the sole judgment
of the Initial Purchaser, any Material Adverse Change, or any event or
development that is reasonably likely to cause or result in a Material
Adverse Change (including, without limitation, a change in management or
control of the Company), except in each case as described in the Final
Memorandum (exclusive of any amendment or supplement thereto after the date
hereof);
(ii) trading in securities generally on the New York Stock
Exchange, American Stock Exchange or the Nasdaq National Market shall have
been suspended or minimum or maximum prices shall have been established on
the New York Stock Exchange, American Stock Exchange or the Nasdaq National
Market;
(iii) a banking moratorium shall have been declared by New York or
United States authorities; or
(iv) there shall have been (A) an outbreak or escalation of
hostilities between the United States and any foreign power, (B) an
outbreak or escalation of any other insurrection or armed conflict
involving the United States or any other national or international calamity
or emergency or (C) any material change in the financial markets of the
United States which, in the case of (A), (B) or (C) above, and in the sole
judgment of the Initial Purchaser, makes it impracticable or inadvisable
to proceed with the offering or the delivery of the Notes as contemplated
by the Final Memorandum.
(b) Termination of this Agreement pursuant to this Section 11 shall
be without liability of any party to any other party except as provided in
Section 10 hereof.
12. Information Supplied by the Initial Purchaser. The statements
---------------------------------------------
set forth in the last paragraph on the front cover page, the first paragraph on
page i, and the last two sentences of paragraph three and all of paragraph seven
under the heading "Private Placement" in the Final Memorandum (to the extent
such statements relate to the Initial Purchaser) constitute the only information
furnished by or on behalf of the Initial Purchaser to the Company for the
purposes of Sections 2(a) and 9.
13. Notices. All communications hereunder shall be in writing and,
-------
if sent to the Initial Purchaser, shall be mailed or delivered or telecopied and
confirmed in writing to BT Alex. ▇▇▇▇▇ Incorporated, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Finance Transaction Management,
with a copy to ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq., Telecopier Number (▇▇▇) ▇▇▇-▇▇▇▇, and
if sent to the Company, shall be mailed, delivered or telecopied and confirmed
in writing to Sheffield Steel Corporation, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇ ▇▇▇▇▇▇▇▇, Telecopier Number (▇▇▇) ▇▇▇-▇▇▇▇,
with a copy to
-25-
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. , ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq., Telecopier Number
(▇▇▇) ▇▇▇-▇▇▇▇.
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; five business days
after being deposited in the mail, postage prepaid, if mailed; one business day
after being timely delivered to a next-day air courier; and when receipt is
acknowledged by the addressee, if telecopied.
14. Successors. This Agreement shall inure to the benefit of and be
----------
binding upon the Initial Purchaser and the Company and their respective
successors and legal representatives, and nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any other person any legal
or equitable right, remedy or claim under or in respect of this Agreement, or
any provisions herein contained. This Agreement and all conditions and
provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person except that (i)
the indemnities of the Company contained in Section 9 of this Agreement shall
also be for the benefit of any person or persons who control the Initial
Purchaser within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act and (ii) the indemnities of the Initial Purchaser contained in
Section 9 of this Agreement shall also be for the benefit of the directors of
the Company and its officers and any person or persons who control the Company
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act.
No purchaser of Notes from the Initial Purchaser will be deemed a successor
because of such purchase.
15. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS
--------------
AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED WHOLLY THEREIN, WITHOUT GIVING EFFECT TO ANY
PROVISIONS THEREOF RELATING TO CONFLICTS OF LAW.
16. Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement between the Company
and the Initial Purchaser.
Very truly yours,
SHEFFIELD STEEL CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President - CFO
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
BT ALEX. ▇▇▇▇▇ INCORPORATED
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
Schedule I
----------
Subsidiaries
Name: Jurisdiction of Incorporation:
----- -----------------------------
Sand Springs Railway Company Oklahoma
▇▇▇▇▇▇▇'▇ Rebar Fabricators, Inc. Missouri
Sheffield Steel Corporation- Delaware
Oklahoma City
Exhibit A
---------
Registration Rights Agreement
Exhibit B
---------
Form of Opinion of Mintz, Levin, Cohn, Ferris,
Glovsky and Popeo, P.C.
------------------------------------
Opinion, dated the Closing Date and addressed to the Initial
Purchaser, of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., special
counsel of the Company, to the effect that:
(i) The Company and each of the Subsidiaries have been duly
incorporated, are validly existing as corporations in good standing under
the laws of their respective jurisdictions of incorporation, are duly
qualified to do business and are in good standing as a foreign corporation
in each jurisdiction in which they own or lease a material amount of real
or personal property, as certified by the Company and have all power and
authority necessary to own or hold their properties and conduct the
businesses as described in the Final Memorandum as being held or conducted.
(ii) As of the date hereof, the authorized and outstanding capital
stock of the Company is as set forth in the Final Memorandum; all of the
issued shares of capital stock of the Company have been duly authorized and
validly issued, are, except as described in the Final Memorandum, fully
paid and nonassessable, were not issued in violation of any preemptive
rights arising pursuant to the charter or by-laws of the Company or under
the laws of its jurisdiction of incorporation and, conforms to the
description thereof contained in the Final Memorandum, except as set forth
in the Amended and Restated Stockholders Agreement dated as of September
15, 1993 between the Company and the stockholders party thereto (the
"Stockholders Agreement"); all of the shares of the Company are owned, to
our knowledge, free and clear of all liens, encumbrances, equities and
claims or restrictions on transferability; and all of the shares of the
Subsidiaries are owned by the Company and, to our knowledge, free and clear
of all liens, encumbrances, equities and claims or restrictions on
transferability (except for liens described in the Final Memorandum and the
pledge of the stock of ▇▇▇▇▇▇▇'▇ Rebar Fabricators, Inc. ("▇▇▇▇▇▇▇'▇") to
secure the Company's promissory notes to the sellers of ▇▇▇▇▇▇▇'▇).
(iii) To our knowledge, except as set forth in the Warrant
Agreement dated as of November 1, 1993 between the Company and Shawmut Bank
Connecticut, N.A. as the warrant agent (the "Warrant Agreement") and the
Final Memorandum, (a) no options, warrants or other rights to purchase
from the Company shares of capital stock
-2-
or ownership interests in the Company are outstanding and (b) no agreements
or other obligations of the Company to issue or other rights to cause the
Company to convert any obligation into, or exchange any securities for,
shares of capital stock or ownership interests in the Company are
outstanding; and to our knowledge, after due inquiry, other than as
described in the Final Memorandum and the Stockholders Agreement, no holder
of securities of the Company is entitled to have such securities registered
under a registration statement filed under the Act.
(iv) The Company has the requisite corporate power and authority
to execute and deliver the Agreement, the Indenture, the Notes, the
Exchange Notes and the Private Exchange Notes and the transactions
contemplated hereby and thereby; the Agreement has been duly and validly
authorized, executed and deliv ered by the Company.
(v) The Notes are in the form contemplated by the Indenture; and
the Notes, the Exchange Notes and the Private Exchange Notes have each been
duly and validly authorized by the Company for issuance and when executed
by the Company and authenticated by the Trustee in accordance with the
provisions of the Indenture, and in the case of the Notes delivered to and
paid for by the Initial Purchaser in accordance with the terms of the
Agreement, will have been duly executed, issued and delivered and will
constitute valid and legally binding obligations of the Company, entitled
to the benefits of the Indenture and enforceable against the Company in
accordance with their terms, except that enforceability thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to creditors' rights generally and by general
equitable principles (regardless of whether enforceability is considered in
a proceeding in equity or at law) or by an implied covenant of good faith
and fair dealing.
(vi) The Indenture has been duly and validly authorized, executed
and delivered by the Company and is in sufficient form to be qualified
under the TIA and, assuming due authorization, execution and delivery
thereof by the Trustee, is a valid and legally binding obligation of the
Company enforceable against the Company in accordance with its terms,
except that the enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to creditors'
rights generally and by general equitable principles (regardless of whether
enforcement is considered in a proceeding in equity or at law) or by an
implied covenant of good faith and fair dealing.
(vii) The Company has the requisite corporate power and authority
to execute and deliver the Registration Rights Agreement; the Registration
Rights Agreement has been duly and validly authorized, executed and
delivered by the Company and (assuming the due authorization, execution and
delivery by the Initial Purchaser),
-3-
is a valid and legally binding obligation of the Company enforceable
against the Company in accordance with its terms, except that the
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to creditors' rights generally
and by general equitable principles (regardless of whether enforcement is
considered in a proceeding in equity or at law) or by an implied covenant
of good faith and fair dealing.
(viii) The Company has all requisite corporate power and authority
to execute and deliver each of the Security Documents; each of the
Security Documents has been duly and validly authorized, executed and
delivered by the Company, and each of the Security Documents constitutes a
valid and legally binding obligation of the Company, enforceable against
the Company in accordance with its terms (assuming due authorization,
execution and delivery of each Security Document by any other party
thereto), except that enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to
creditors' rights generally and by general equitable principles (regardless
of whether enforce ability is considered in a proceeding in equity or at
law) or by an implied covenant of good faith and fair dealing.
(ix) The Indenture, the Registration Rights Agreement and the
Notes conform in all material respects to the descriptions thereof
contained in the Final Memorandum.
(x) To our knowledge, there are no legal or governmental
proceedings are pending, threatened or contemplated to which the Company or
any of the Subsidiaries is a party that would be required under the Act to
be described in a registration statement or a prospectus and are not
described in the Final Memorandum, or which seek to restrain, enjoin,
prevent the consummation of or otherwise challenge the issuance or sale of
the Notes to the Initial Purchaser or the consummation of the transactions
described in the Final Memorandum under the caption "Use of Proceeds" and
no contract, agreement or other document to which the Company is a party
would be required under the Act to be described in a registration statement
or a prospectus that is not described in the Final Memorandum; provided,
however, that no opinion is expressed with respect to the matters
summarized, or required to be summarized, under the caption "Private
Placement" in the Final Memorandum.
(xi) The issue and sale of the Notes by the Company and the
compliance by the Company with all of the provisions of the Agreement, the
Indenture, the Security Documents and the Notes and the consummation of
the transactions contemplated thereby:
(a) will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a
default under (other than any such con-
-4-
flicts, breaches, violations or defaults as to which the Company
or any of the Subsidiaries has obtained waivers, copies of which
have been provided to the Initial Purchaser and which are in full
force and effect on the date hereof), any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument of
which we have knowledge to which the Company or any of the
Subsidiaries is a party or by which the Company or any of the
Subsidiaries is bound or to which any of the property or assets
of the Company or any of the Subsidiaries are subject;
(b) will not result in any violation of (A) the provisions
of the charter or by-laws of the Company or any of the
Subsidiaries or (B) any statute, order, rule or regulation
generally applicable to transactions of the type contemplated by
the Agreement or to financings generally of any court or
governmental agency or body having jurisdiction over the Company
or any of the Subsidiaries or any of their respective properties
or assets; and
(c) do not require any consent, approval, authorization or
order of, or filing or registration with, any court or
governmental agency or body under or in connection with any
statute, order, rule or regulation generally applicable to
transactions of the type contemplated by the Agreement or to
financings generally, except for such consents, approvals,
authorizations, orders, filings or registrations (A) as may be
required under applicable state securities or Blue Sky laws and
(B) as have been obtained.
(xii) Neither the Company nor any subsidiary as of the Closing Date
is subject to registration and regulation as an "investment company" as
such term is defined in the Investment Company Act of 1940, as amended.
(xiii) Assuming the Initial Purchaser purchases the Notes for
resale in accordance with Rule 144A promulgated under the Act, neither the
consummation of the transactions contemplated by the Purchase Agreement nor
the sale, issuance, execution or delivery of the Notes will violate
Regulation G, T, U or X of the Board of Governors of the Federal Reserve
System.
(xiv) No registration under the Act of the Notes is required for
the sale of the Notes to the Initial Purchaser as contemplated by this
Agreement and the Final Memorandum, and prior to the commencement of the
Exchange Offer (as defined in the Registration Rights Agreement) or the
effectiveness of the Shelf Registration Statement (as defined in the
Registration Rights Agreement), the Indenture is not required to be
qualified under the Trust Indenture Act, in each case assuming (i) that the
purchasers who buy the Notes in the initial resales are Qualified
Institutional Buyers, and (ii) the accuracy of the Initial Purchaser's
representations and those of the Company
-5-
contained in this Agreement regarding the absence of a general solicitation
in connection with the sale of the Notes to the Initial Purchaser and the
initial resales.
(xv) To our knowledge, other than the Stockholders Agreement and
the Warrant Agreement, there are no contracts, agreements or understandings
between the Company and any person granting such person the right to
require the Company to file a registration statement under the Act with
respect to any securities of the Company owned or to be owned by such
person or to require the Company to include such securities with the
Exchange Notes or the Private Exchange Notes registered pursuant to the
Registration Statement to be filed pursuant to the Registration Rights
Agreement.
In addition, we have participated in conferences with officers and
other representatives of the Company, representatives of the independent public
accountants for the Company and, with respect to the Final Memorandum,
representatives of the Initial Purchaser and counsel for the Initial Purchaser
at which the contents of the Final Memorandum and related matters were
discussed and, although we have not verified and are not passing upon and do not
assume any responsibility for the accuracy, completeness or fair ness of the
statements contained in the Final Memorandum (except for those made under the
captions "Description of First Mortgage Notes" and "Exchange Offer" and
"Registration Rights" in the Final Memorandum insofar as they relate to
provisions of documents therein described), on the basis of the foregoing
(relying as to materiality to a large extent upon the statements of officers and
other representatives of the Company) no facts have come to our attention that
lead us to believe that either the Final Memorandum, as of its date or any
amendment or supplement thereto as of its date or as of the Closing Date,
contained or contains an untrue statement of a material fact or omitted or omits
to state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading (it being understood that we are expressing no opinion on the
financial statements, schedules, pro forma information, financial data or other
financial and statistical information included therein).
Exhibit C
---------
Form of Local Counsel Opinion
-----------------------------