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Exhibit 10.1
▇▇▇▇▇▇ STEEL COMPANY
AND ITS SUBSIDIARY GUARANTORS
$100,000,000
10 1/2% SENIOR NOTES DUE 2008
PURCHASE AGREEMENT
JUNE 1, 1998
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ SECURITIES CORPORATION
▇▇▇▇▇▇▇▇▇ & COMPANY, INC.
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & CO., INC.
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$100,000,000
10 1/2% SENIOR NOTES DUE 2008
▇▇▇▇▇▇ STEEL COMPANY
AND ITS SUBSIDIARY GUARANTORS
PURCHASE AGREEMENT
June 1, 1998
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
▇▇▇▇▇▇▇▇▇ & COMPANY, INC.
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & CO., INC.
AS INITIAL PURCHASERS
C/▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
▇▇▇▇▇▇ Steel Company, a Delaware corporation (the "COMPANY"),
proposes to issue and sell to ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities
Corporation ("DLJ"), ▇▇▇▇▇▇▇▇▇ & Company, Inc. and ▇▇▇▇▇▇▇▇, Billings, ▇▇▇▇▇▇ &
Co., Inc. (each, an "INITIAL PURCHASER" and, collectively, the "INITIAL
PURCHASERS") an aggregate of $100,000,000 in principal amount of its 10 1/2%
Senior Notes due 2008 (the "RESTRICTED NOTES"), subject to the terms and
conditions set forth herein. The Restricted Notes are to be issued pursuant to
the provisions of an indenture (the "INDENTURE"), to be dated as of the Closing
Date (as defined below), among the Company, the Guarantors (as defined below)
and ▇▇▇▇▇▇ Trust Company of California, as trustee (the "TRUSTEE"). The
Restricted Notes and the Exchange Notes (as defined below) issuable in exchange
therefor are collectively referred to herein as the "NOTES." The Notes will be
guaranteed (the "SUBSIDIARY GUARANTEES") by each of the entities listed on
Schedule A, hereto (each, a "GUARANTOR" and collectively the "GUARANTORS").
Capitalized terms used but not defined herein shall have the meanings given to
such terms in the Indenture.
1. OFFERING MEMORANDUM. The Restricted Notes will be offered and
sold to the Initial Purchasers pursuant to one or more exemptions from the
registration requirements under the Securities Act of 1933, as amended (the
"ACT"). The Company and the Guarantors have prepared a preliminary offering
memorandum, dated May 14, 1998 (the "PRELIMINARY OFFERING MEMORANDUM") and a
final offering memorandum, dated June 1, 1998 (the "OFFERING MEMORANDUM"),
relating to the Restricted Notes and the Subsidiary Guarantees.
Upon original issuance thereof, and until such time as the same is
no longer required pursuant to the Indenture or applicable law, the Restricted
Notes (and all securities issued in exchange therefor or in substitution
thereof) shall bear the following legend:
"THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND
ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE SECOND SENTENCE
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HEREOF. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE
HOLDER:
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB"),
OR (B) IT HAS ACQUIRED THIS NOTE IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, (2) AGREES
THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A)
TO ▇▇▇▇▇▇ STEEL COMPANY, A DELAWARE CORPORATION (THE "COMPANY"), OR
ANY OF ITS SUBSIDIARIES, (B) TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A
UNDER THE SECURITIES ACT, (C) IN AN OFFSHORE TRANSACTION MEETING THE
REQUIREMENTS OF RULE 903 OR 904 OF REGULATION S OF THE SECURITIES
ACT, (D) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER
THE SECURITIES ACT, (E) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON
AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY) OR (F) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE
WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES OR ANY OTHER APPLICABLE JURISDICTION AND (3) AGREES THAT IT
WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN INTEREST HEREIN
IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES"
HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER
THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE
TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION
OF THE FOREGOING.
2. AGREEMENTS TO SELL AND PURCHASE. On the basis of the
representations, warranties and covenants contained in this Agreement, and
subject to the terms and conditions contained herein, the Company agrees to
issue and sell to the Initial Purchasers, and each Initial Purchaser agrees,
severally and not jointly, to purchase from the Company, the principal amount of
Restricted Notes set forth opposite the name of such Initial Purchaser on
Schedule B hereto at a purchase price equal to 97% of the principal amount
thereof (the "PURCHASE PRICE").
3. TERMS OF OFFERING. The Initial Purchasers have advised, and
represent and warrant to, the Company that the Initial Purchasers will make
offers and sales (the "EXEMPT RESALES") of the Restricted Notes purchased
hereunder on the terms set forth in the Offering Memorandum, as amended or
supplemented, solely to (i) persons whom the Initial Purchasers reasonably
believe to be "qualified institutional buyers" as defined in Rule 144A under the
Act ("QIBS"), and (ii) to persons permitted to purchase the Restricted Notes in
offshore transactions in reliance upon Regulation S under the Act as so defined
in Rule 144A (each a "REGULATION S PURCHASER") (QIB's and Regulation S
Purchasers being referred to herein as the "ELIGIBLE PURCHASERS"). The Initial
Purchasers will offer the Restricted Notes to Eligible Purchasers initially at a
price equal to the percentage of the principal amount thereof set forth on the
cover page of the Offering Memorandum.
Holders (including subsequent transferees) of the Restricted Notes
will have the registration rights set forth in the registration rights agreement
(the "REGISTRATION RIGHTS AGREEMENT"), to be dated the Closing Date, in
substantially the form of Exhibit A hereto, for so long as such Restricted Notes
constitute "TRANSFER RESTRICTED SECURITIES" (as defined in the Registration
Rights Agreement). Pursuant to the Registration Rights Agreement, the Company
and the Guarantors will agree to file with the Securities and Exchange
Commission (the "COMMISSION") under
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the circumstances set forth therein (i) a registration statement under the Act
(the "EXCHANGE OFFER REGISTRATION STATEMENT") relating to the Company's 10 1/2%
Senior Notes due 2008 (the "EXCHANGE NOTES"), to be offered in exchange for the
Restricted Notes (such offer to exchange being referred to as the "EXCHANGE
OFFER") and the Subsidiary Guarantees thereof and/or (ii) a shelf registration
statement pursuant to Rule 415 under the Act (the "SHELF REGISTRATION STATEMENT"
and, together with the Exchange Offer Registration Statement, the "REGISTRATION
STATEMENTS") relating to the resale by certain holders of the Restricted Notes
and to use its reasonable best efforts to cause such Registration Statements to
be declared and remain effective and usable for the periods specified in the
Registration Rights Agreement and to consummate the Exchange Offer. This
Agreement, the Indenture, the Notes, the Subsidiary Guarantees and the
Registration Rights Agreement are herein referred to collectively as the
"OPERATIVE DOCUMENTS."
4. DELIVERY AND PAYMENT.
(a) Delivery of, and payment of the Purchase Price for, the
Notes shall be made at the offices of ▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P. or such other
location as may be mutually acceptable. Such delivery and payment shall be made
at 9:00 a.m. New York City time, on June 4, 1998 or at such other time or date
as shall be agreed upon by the Initial Purchasers and the Company in writing.
The time and date of such delivery and the payment for the Notes are herein
called the "CLOSING DATE."
(b) One or more of the Restricted Notes in definitive global
form, registered in the name of Cede & Co., as nominee of The Depository Trust
Company ("DTC"), having an aggregate principal amount corresponding to the
aggregate principal amount of the Restricted Notes (collectively, the "GLOBAL
NOTES"), shall be delivered by the Company to the Initial Purchasers (or as the
Initial Purchasers direct) in each case with any transfer taxes thereon duly
paid by the Company against payment by the Initial Purchasers of the Purchase
Price thereof by wire transfer in same day funds to the order of the Company.
The Global Notes shall be made available to the Initial Purchasers for
inspection not later than 9:30 a.m., New York City time, on the business day
immediately preceding the Closing Date.
5. AGREEMENTS OF THE COMPANY AND THE GUARANTORS. The Company
hereby agrees with the Initial Purchasers as follows:
(a) To advise the Initial Purchasers promptly upon obtaining
knowledge thereof and, if requested by the Initial Purchasers, confirm such
advice in writing, (i) of the issuance by any state securities commission of any
stop order suspending the qualification or exemption from qualification of any
Restricted Notes for offering or sale in any jurisdiction designated by the
Initial Purchasers pursuant to Section 5(e) hereof, or the initiation of any
proceeding by any state securities commission or any other federal or state
regulatory authority for such purpose and (ii) of the happening of any event
during the period referred to in Section 5(c) below that makes any statement of
a material fact made in the Preliminary Offering Memorandum or the Offering
Memorandum untrue in any material respect or that requires any additions to or
changes in the Preliminary Offering Memorandum or the Offering Memorandum in
order to make the statements therein not misleading in any material respect. The
Company shall use its reasonable best efforts to prevent the issuance of any
stop order or order suspending the qualification or exemption of any Restricted
Notes under any state securities or Blue Sky laws and, if at any time any state
securities commission or other federal or state regulatory authority shall issue
an order suspending the qualification or exemption of any Restricted Notes under
any state securities or Blue Sky laws, the Company shall use its reasonable best
efforts to obtain the withdrawal or lifting of such order at the earliest
possible time.
(b) To furnish the Initial Purchasers and those persons
identified by the Initial Purchasers to the Company as many copies of the
Preliminary Offering Memorandum and the Offering Memorandum, and any amendments
or supplements thereto, as the Initial Purchasers may reasonably request for the
time period specified in Section 5(c). Subject to the Initial Purchasers'
compliance with their representations and warranties and agreements set forth in
Section 7 hereof, the Company consents to the use of the Preliminary Offering
Memorandum (up through the date hereof) and the Offering Memorandum, and any
amendments and supplements thereto required pursuant hereto, by the Initial
Purchasers in connection with Exempt Resales.
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(c) During such period as in the opinion of counsel for the
Initial Purchasers an Offering Memorandum is required by law to be delivered in
connection with Exempt Resales by the Initial Purchasers and in connection with
market-making activities of the Initial Purchasers for so long as any Restricted
Notes are outstanding, (i) not to make any amendment or supplement to the
Offering Memorandum of which the Initial Purchasers shall not previously have
been advised or to which the Initial Purchasers shall reasonably object after
being so advised and (ii) to prepare promptly upon the Initial Purchasers'
reasonable request based on the opinion of its counsel, any amendment or
supplement to the Offering Memorandum which may be necessary or advisable in
connection with such Exempt Resales or such market-making activities.
(d) If, during the period referred to in Section 5(c) above,
any event shall occur or condition shall exist as a result of which, in the
opinion of counsel to the Initial Purchasers, it becomes necessary to amend or
supplement the Offering Memorandum in order to make the statements therein, in
the light of the circumstances when such Offering Memorandum is delivered to an
Eligible Purchaser, not misleading in any material respect, or if, in the
opinion of counsel to the Initial Purchasers, it is necessary to amend or
supplement the Offering Memorandum to comply with applicable federal or state
securities law, forthwith to prepare an appropriate amendment or supplement to
such Offering Memorandum so that the statements therein, as so amended or
supplemented, will not, in the light of the circumstances when it is so
delivered, be misleading in any material respect, or so that such Offering
Memorandum will comply with applicable federal or state securities law, and to
furnish to the Initial Purchasers and such other persons as the Initial
Purchasers may designate such number of copies thereof as the Initial Purchasers
may reasonably request.
(e) Prior to the sale of all Restricted Notes pursuant to
Exempt Resales as contemplated hereby, to cooperate with the Initial Purchasers
and counsel to the Initial Purchasers in connection with the registration or
qualification of the Restricted Notes for offer and sale to the Initial
Purchasers and pursuant to Exempt Resales under the securities or Blue Sky laws
of such jurisdictions as the Initial Purchasers may request and to continue such
registration or qualification in effect so long as required for Exempt Resales
and to file such consents to service of process or other documents as may be
necessary in order to effect such registration or qualification; provided,
however, that neither the Company nor any Guarantor shall be required in
connection therewith to qualify as a foreign corporation in any jurisdiction in
which it is not now so qualified or to take any action that would subject it to
general consent to service of process or taxation in any jurisdiction in which
it is not now so subject.
(f) So long as the Notes are outstanding, (i) to mail and make
generally available within 105 days (or as soon thereafter as is practicable)
after the end of each fiscal year to the record holders of the Notes a financial
report of the Company and its subsidiaries on a consolidated basis (and a
similar financial report of all unconsolidated subsidiaries, if any), all such
financial reports to include a consolidated balance sheet, a consolidated
statement of income, a consolidated statement of cash flows and a consolidated
statement of changes in shareholders' equity as of the end of and for such
fiscal year, together with comparable information as of the end of and for the
preceding year, certified by the Company's independent public accountants and
(ii) to mail and make generally available within 60 days (or as soon thereafter
as practicable) after the end of each quarterly period (except for the last
quarterly period of each fiscal year) to such holders, a consolidated balance
sheet, a consolidated statement of income and a consolidated statement of cash
flows (and similar financial reports of all unconsolidated subsidiaries, if any)
as of the end of and for such period, and for the period from the beginning of
such year to the close of such quarterly period, together with comparable
information for the corresponding periods of the preceding year.
(g) So long as the Restricted Notes are outstanding, to
furnish to the Initial Purchasers as soon as available copies of all current
reports on Form 8-K under the Exchange Act or written communications furnished
by the Company to its security holders generally filed with the Commission or
any national securities exchange on which any class of securities of the Company
or any of the Guarantors is listed.
(h) So long as any of the Restricted Notes remain outstanding
and during any period in which the Company and the Guarantors are not subject to
Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), to make available to any holder of Restricted Notes in
connection with any sale thereof and any prospective purchaser of such
Restricted Notes from such holder, the information ("Rule 144A Information")
required by Rule 144A(d)(4) under the Act.
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(i) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or cause to be
paid all reasonable expenses incident to the performance of the obligations of
the Company and the Guarantors under this Agreement, including: (i) the fees,
disbursements and expenses of counsel to the Company and the Guarantors and
accountants of the Company and the Guarantors in connection with the sale and
delivery of the Restricted Notes to the Initial Purchasers and pursuant to
Exempt Resales, and all other fees and expenses in connection with the
preparation, printing, filing and distribution of the Preliminary Offering
Memorandum, the Offering Memorandum and all amendments and supplements to any of
the foregoing (including financial statements), including the mailing and
delivering of copies thereof to the Initial Purchasers and persons designated by
it in the quantities specified herein, (ii) all costs and expenses related to
the transfer and delivery of the Restricted Notes to the Initial Purchasers and
pursuant to Exempt Resales, including any transfer or other taxes payable
thereon, (iii) all costs of printing or producing this Agreement, the other
Operative Documents and any other agreements or documents in connection with the
offering, purchase, sale or delivery of the Restricted Notes, (iv) all expenses
in connection with the registration or qualification of the Restricted Notes and
the Subsidiary Guarantees for offer and sale under the securities or Blue Sky
laws of the several states and all costs of printing or producing any
preliminary and supplemental Blue Sky memoranda in connection therewith
(including the filing fees and reasonable fees and disbursements of counsel for
the Initial Purchasers in connection with such registration or qualification and
memoranda relating thereto), (v) the cost of printing certificates representing
the Restricted Notes and the Subsidiary Guarantees, (vi) all expenses and
listing fees in connection with the application for quotation of the Restricted
Notes in the National Association of Securities Dealers, Inc.'s ("NASD") Private
Offerings, Resales and Trading Through Automatic Linkages market ("PORTAL"),
(vii) the fees and expenses of the Trustee and the Trustee's counsel in
connection with the Indenture, the Notes and the Subsidiary Guarantees, (viii)
the costs and charges of any transfer agent, registrar and/or depositary
(including DTC), (ix) any fees charged by rating agencies for the rating of the
Notes, (x) costs and expenses of the Exchange Offer and any Registration
Statement, as set forth in the Registration Rights Agreement and (xi) and all
other reasonable costs and expenses incident to the performance of the
obligations of the Company and the Guarantors hereunder for which provision is
not otherwise made in this Section.
(j) To use its reasonable best efforts to effect the inclusion
of the Restricted Notes in PORTAL and to maintain the listing of the Restricted
Notes on PORTAL for so long as the Restricted Notes are outstanding.
(k) To obtain the approval of DTC for "book-entry" transfer of
the Notes, and to comply with all of its agreements set forth in the
representation letters of the Company and the Guarantors to DTC relating to the
approval of the Notes by DTC for "book-entry" transfer.
(l) During the period beginning on the date hereof and
continuing to and including the Closing Date, not to offer, sell, contract to
sell or otherwise transfer or dispose of any debt securities of the Company or
any Guarantor or any warrants, rights or options to purchase or otherwise
acquire debt securities of the Company or any Guarantor substantially similar to
the Notes and the Subsidiary Guarantees (other than (i) the Notes and the
Subsidiary Guarantees and (ii) commercial paper issued in the ordinary course of
business), without the prior written consent of the Initial Purchasers.
(m) Not to sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any security (as defined in the Act) that
would be integrated with the sale of the Restricted Notes to the Initial
Purchasers or pursuant to Exempt Resales in a manner that would require the
registration of any such sale of the Restricted Notes under the Act.
(n) Not to voluntarily claim, and to actively resist any
attempts to claim, the benefit of any usury laws against the holders of any
Notes and the related Subsidiary Guarantees.
(o) To cause the Exchange Offer to be made in the appropriate
form to permit Exchange Notes and guarantees thereof by the Guarantors
registered pursuant to the Act to be offered in exchange for the Restricted
Notes and the Subsidiary Guarantees and to comply with all applicable federal
and state securities laws in connection with the Exchange Offer.
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(p) To comply with all of its agreements set forth in the
Registration Rights Agreement.
(q) To use its reasonable best efforts to do and perform all
things required or necessary to be done and performed under this Agreement by it
prior to the Closing Date and to satisfy all of its conditions precedent to the
delivery of the Restricted Notes and the Subsidiary Guarantees.
6. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY AND
THE GUARANTORS. As of the date hereof (or such later date as provided herein, as
applicable), each of the Company and the Guarantors (which are subsidiaries of
the Company on the date hereof) represents and warrants to, and agrees with, the
Initial Purchasers that:
(a) The Preliminary Offering Memorandum and the Offering
Memorandum do not, and any supplement or amendment to them will not, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading in any material
respect, except that the representations and warranties contained in this
paragraph (a) shall not apply to statements in or omissions from the Preliminary
Offering Memorandum or the Offering Memorandum (or any supplement or amendment
thereto) based upon information relating to the Initial Purchasers furnished to
the Company in writing by the Initial Purchasers expressly for use therein. No
stop order preventing the use of the Preliminary Offering Memorandum or the
Offering Memorandum, or any amendment or supplement thereto, or any order
asserting that any of the transactions contemplated by this Agreement are
subject to the registration requirements of the Act, has been issued.
(b) Each of the Company and its subsidiaries has been duly
incorporated, is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation and has the corporate power and
authority to carry on its business as described in the Preliminary Offering
Memorandum and the Offering Memorandum and to own, lease and operate its
properties, and each is duly qualified and is in good standing as a foreign
corporation authorized to do business in each jurisdiction in which the nature
of its business or its ownership or leasing of property requires such
qualification, except where the failure to be so qualified would not have a
material adverse effect on the business, financial condition or results of
operations of the Company and its subsidiaries, taken as a whole or draw into
question adversely affect the validity of this Agreement or the other Operative
Documents (a "MATERIAL ADVERSE EFFECT").
(c) All outstanding shares of capital stock of the Company
have been duly authorized and validly issued and are fully paid, non-assessable
and not subject to any preemptive or similar rights.
(d) The entities listed on Schedule C hereto are the only
subsidiaries, direct or indirect, of the Company. For purposes of this Agreement
and the other Operative Documents, the Company's subsidiaries (including
subsidiary Guarantors) include all entities that will become subsidiaries (or
subsidiary Guarantors) of the Company upon the consummation of the acquisition
of Addison Structural Services, Inc. and all representations and warranties
pertaining to such subsidiaries (or subsidiary Guarantors) who become such after
the date hereof shall be deemed made only as of such later date or dates. All of
the outstanding shares of capital stock of each of the Company's subsidiaries
have been duly authorized and validly issued and are fully paid and
non-assessable, and are owned by the Company, directly or indirectly through one
or more subsidiaries, free and clear of any security interest, claim, lien,
encumbrance or adverse interest of any nature (each, a "LIEN") other than
Permitted Liens (as defined in the Indenture), Liens created under the credit
agreements disclosed in the Offering Memorandum and restrictions on transfers
under federal and state securities laws.
(e) This Agreement has been duly authorized, executed and
delivered by the Company and each of the Guarantors.
(f) The Indenture has been duly authorized by the Company and
each of the Guarantors and, on the Closing Date, will have been validly executed
and delivered by the Company and each of the Guarantors. When the Indenture has
been duly executed and delivered by the Company and each of the Guarantors, and,
assuming the due authorization, execution and delivery by the Trustee if
required, the Indenture will be a valid and binding
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agreement of the Company and each Guarantor, enforceable against the Company and
each Guarantor in accordance with its terms except as (i) the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally and (ii) rights of
acceleration and the availability of equitable or other remedies may be limited
by equitable principles of general applicability or the discretion of any court
before which a proceeding may be brought. On the Closing Date, the Indenture
will conform in all material respects to the requirements of the Trust Indenture
Act of 1939, as amended (the "TIA" or "TRUST INDENTURE ACT"), and the rules and
regulations of the Commission applicable to an indenture which is qualified
thereunder.
(g) The Restricted Notes have been duly authorized and, on the
Closing Date, will have been validly executed and delivered by the Company. When
the Restricted Notes have been issued, executed and authenticated in accordance
with the provisions of the Indenture and delivered to and paid for by the
Initial Purchasers in accordance with the terms of this Agreement, the
Restricted Notes will be entitled to the benefits of the Indenture and will be
valid and binding obligations of the Company, enforceable in accordance with
their terms except as (i) the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally and (ii) rights of acceleration and the availability
of equitable or other remedies may be limited by equitable principles of general
applicability or the discretion of any court before which a proceeding may be
brought. On the Closing Date, the Restricted Notes will conform as to legal
matters to the description thereof contained in the Offering Memorandum.
(h) On the Closing Date, the Exchange Notes will have been
duly authorized by the Company. When the Exchange Notes are issued, executed and
authenticated in accordance with the terms of the Exchange Offer and the
Indenture, the Exchange Notes will be entitled to the benefits of the Indenture
and will be the valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally and (ii) rights
of acceleration and the availability of equitable or other remedies may be
limited by equitable principles of general applicability or the discretion of
any court before which a proceeding may be brought.
(i) The Subsidiary Guarantee to be endorsed on the Restricted
Notes by each Guarantor has been duly authorized by such Guarantor and, on the
Closing Date, will have been duly executed and delivered by each such Guarantor.
When the Restricted Notes have been issued, executed and authenticated in
accordance with the Indenture and delivered to and paid for by the Initial
Purchasers in accordance with the terms of this Agreement, the Subsidiary
Guarantee of each Guarantor endorsed thereon will be entitled to the benefits of
the Indenture and will be the valid and binding obligation of such Guarantor,
enforceable against such Guarantor in accordance with its terms, except as (i)
the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights generally
and (ii) rights of acceleration and the availability of equitable remedies may
be limited by equitable or other principles of general applicability or the
discretion of any court before which a proceeding may be brought. On the Closing
Date, the Subsidiary Guarantees to be endorsed on the Restricted Notes will
conform as to legal matters to the description thereof contained in the Offering
Memorandum.
(j) The Subsidiary Guarantee to be endorsed on the Exchange
Notes by each Guarantor has been duly authorized by such Guarantor and, when
issued, will have been duly executed and delivered by each such Guarantor. When
the Exchange Notes have been issued, executed and authenticated in accordance
with the terms of the Exchange Offer and the Indenture, the Subsidiary Guarantee
of each Guarantor endorsed thereon will be entitled to the benefits of the
Indenture and will be the valid and binding obligation of such Guarantor,
enforceable against such Guarantor in accordance with its terms, except as (i)
the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights generally
and (ii) rights of acceleration and the availability of equitable or other
remedies may be limited by equitable principles of general applicability or the
discretion of any court before which a proceeding may be brought. When the
Exchange Notes are issued, authenticated and delivered, the Subsidiary
Guarantees to be endorsed on the Exchange Notes will conform as to legal matters
to the description thereof in the Offering Memorandum.
(k) The Registration Rights Agreement has been duly authorized
by the Company and each of the Guarantors and, on the Closing Date, will have
been duly executed and delivered by the Company and each
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of the Guarantors. When the Registration Rights Agreement has been duly executed
and delivered, assuming the due authorization, execution and delivery of the
Initial Purchaser the Registration Rights Agreement will be a valid and binding
agreement of the Company and each of the Guarantors, enforceable against the
Company and each Guarantor in accordance with its terms except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally and (ii) rights
of acceleration and the availability of equitable and other remedies may be
limited by equitable principles of general applicability and the discretion of
any court before which a proceeding may be brought. On the Closing Date, the
Registration Rights Agreement will conform as to legal matters to the
description thereof in the Offering Memorandum.
(l) Neither the Company nor any of its subsidiaries is in
violation of its respective charter or by-laws or in default in the performance
of any obligation, agreement, covenant or condition contained in any indenture,
loan agreement, mortgage, lease or other agreement or instrument that is
material to the Company and its subsidiaries, taken as a whole, to which the
Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries or their respective property is bound other than defaults which
would not, singly or in the aggregate, have a Material Adverse Effect.
(m) The execution, delivery and performance of this Agreement
and the other Operative Documents by the Company and each of the Guarantors,
compliance by the Company and each of the Guarantors with all provisions hereof
and thereof and the consummation of the transactions contemplated hereby and
thereby will not (i) require any consent, approval, authorization or other order
of, or qualification with, any court or governmental body or agency (except such
as may be required under the securities or Blue Sky laws of the various states),
(ii) conflict with or constitute a breach of any of the terms or provisions of,
or a default under, the charter or by-laws of the Company or any of its
subsidiaries or any indenture, loan agreement, mortgage, lease or other
agreement or instrument that is material to the Company and its subsidiaries,
taken as a whole, to which the Company or any of its subsidiaries is a party or
by which the Company or any of its subsidiaries or their respective property is
bound, (iii) violate or conflict with any applicable law or any rule,
regulation, judgment, order or decree of any court or any governmental body or
agency having jurisdiction over the Company, any of its subsidiaries or their
respective property, (iv) result in the imposition or creation of (or the
obligation to create or impose) a Lien under, any agreement or instrument to
which the Company or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries or their respective property is bound other than as
disclosed in the Offering Memorandum or (v) result in the termination,
suspension or revocation of any Authorization (as defined below) of the Company
or any of its subsidiaries or result in any other impairment of the rights of
the holder of any such Authorization, which, in each case, would have a Material
Adverse Effect.
(n) There are no legal or governmental proceedings pending or,
to the knowledge of the Company, threatened to which the Company or any of its
subsidiaries is a party or to which any of their respective property is subject,
which might result, singly or in the aggregate, in a Material Adverse Effect,
other than as described in the Offering Memorandum.
(o) Neither the Company nor any of its subsidiaries has
violated any foreign, federal, state or local law or regulation relating to the
protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("ENVIRONMENTAL LAWS"), any
provisions of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or any provisions of the Foreign Corrupt Practices Act or the rules
and regulations promulgated thereunder, except for such violations which, singly
or in the aggregate, would not have a Material Adverse Effect.
(p) There are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance with
Environmental Laws or any Authorization, any related constraints on operating
activities and any potential liabilities to third parties) with respect to the
properties or former properties of Addison to be acquired by ▇▇▇▇▇▇ and which
would, singly or in the aggregate, have a Material Adverse Effect.
(q) Each of the Company and its subsidiaries has such permits,
licenses, consents, exemptions, franchises, authorizations and other approvals
(each, an "AUTHORIZATION") of, and has made all filings with and notices to, all
governmental or regulatory authorities and self-regulatory organizations and all
courts and other
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tribunals, including without limitation, under any applicable Environmental
Laws, as are necessary to own, lease, license and operate its respective
properties and to conduct its business, except where the failure to have any
such Authorization or to make any such filing or notice would not, singly or in
the aggregate, have a Material Adverse Effect. Each such Authorization is valid
and in full force and effect and each of the Company and its subsidiaries is in
compliance with all the terms and conditions thereof and with the rules and
regulations of the authorities and governing bodies having jurisdiction with
respect thereto; and no event has occurred (including, without limitation, the
receipt of any notice from any authority or governing body) which allows or,
after notice or lapse of time or both, would allow, revocation, suspension or
termination of any such Authorization or results or, after notice or lapse of
time or both, would result in any other impairment of the rights of the holder
of any such Authorization; and such Authorizations contain no restrictions that
are burdensome to the Company or any of its subsidiaries; except, in each case,
where the occurrence of any such event or the presence of any such restriction
would not, singly or in the aggregate, have a Material Adverse Effect.
(r) Ernst & Young LLP and, to the best knowledge of the
Company, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, who have certified the financial statements and
supporting schedules included in the Preliminary Offering Memorandum and the
Offering Memorandum, are independent public accountants with respect to the
Company and the Guarantors, as required by the Act and the Exchange Act. The
historical financial statements, together with related schedules and notes, set
forth in the Preliminary Offering Memorandum and the Offering Memorandum comply
as to form in all material respects with the requirements applicable to
registration statements on Form S-1 under the Act.
(s) The historical financial statements, together with related
schedules and notes forming part of the Offering Memorandum (and any amendment
or supplement thereto), present fairly the consolidated financial position,
results of operations and cash flows of the Company, its subsidiaries and the
Guarantors on the basis stated in the Offering Memorandum at the respective
dates or for the respective periods to which they apply; such statements and
related schedules and notes have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the periods
involved, except as disclosed therein; and the other financial information and
data set forth in the Offering Memorandum (and any amendment or supplement
thereto) are, in all material respects, accurately presented and prepared on a
basis consistent with such financial statements and the books and records of the
Company, its subsidiaries and the Guarantors.
(t) The pro forma financial statements included in the
Preliminary Offering Memorandum and the Offering Memorandum under the caption
"Unaudited Pro Forma Condensed Combined Financial Statements" (including the
notes therein) have been prepared on a basis consistent with the historical
financial statements of the Company, its subsidiaries and the Guarantors and
give effect to assumptions used in the preparation thereof on a reasonable basis
in light of current circumstances and in good faith and present fairly the
historical and proposed transactions contemplated by the Preliminary Offering
Memorandum and the Offering Memorandum as described therein; and such pro forma
financial statements comply as to form in all material respects with the
requirements applicable to pro forma financial statements under Regulation S-X
except with respect to the presentation of statistical information and
supplemental data not required in a registration statement. The other pro forma
financial and statistical information and data included in the Offering
Memorandum are, in all material respects, accurately presented in light of
current circumstances and prepared on a basis consistent with the pro forma
financial statements.
(u) The Company is not and, after giving effect to the
offering and sale of the Restricted Notes and the application of the net
proceeds thereof as described in the Offering Memorandum, will not be, an
"investment company," as such term is defined in the Investment Company Act of
1940, as amended.
(v) Except for the Registration Rights Agreement, there are no
contracts, agreements or understandings between the Company or any Guarantor and
any person granting such person the right to require the Company or such
Guarantor to file a registration statement under the Act with respect to any
securities of the Company or such Guarantor or to require the Company or such
Guarantor to include such securities with the Notes and Subsidiary Guarantees
registered pursuant to any Registration Statement.
(w) Neither the Company nor any of its subsidiaries nor any
agent thereof acting on the behalf of them has taken, and none of them will
take, any action that might cause this Agreement or the issuance or sale
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of the Restricted Notes to violate Regulation G (12 C.F.R. Part 207), Regulation
T (12 C.F.R. Part 220), Regulation U (12 C.F.R. Part 221) or Regulation X (12
C.F.R. Part 224) of the Board of Governors of the Federal Reserve System, in
each case as in effect on the date hereof.
(x) To the knowledge of the Company, no "nationally recognized
statistical rating organization" as such term is defined for purposes of Rule
436(g)(2) under the Act (i) has imposed (or has informed the Company or any
Guarantor that it is considering imposing) any condition (financial or
otherwise) on the Company's or any Guarantor's retaining any rating assigned to
the Company or any Guarantor, any securities of the Company or any Guarantor or
(ii) has indicated to the Company or any Guarantor that it is considering (a)
the downgrading, suspension, or withdrawal of, or any review for a possible
change that does not indicate the direction of the possible change in, any
rating so assigned or (b) any change in the outlook for any rating of the
Company, any Guarantor or any securities of the Company or any Guarantor.
(y) Since the respective dates as of which information is
given in the Offering Memorandum other than as set forth in the Offering
Memorandum (exclusive of any amendments or supplements thereto subsequent to the
date of this Agreement), (i) there has not occurred any material adverse change
or any development involving a reasonably certain prospective material adverse
change in the condition, financial or otherwise, or the earnings, business,
management or operations of the Company and its subsidiaries, taken as a whole,
(ii) there has not been any material adverse change or any development involving
a reasonably certain prospective material adverse change in the capital stock or
in the long-term debt of the Company or any of its subsidiaries and (iii)
neither the Company nor any of its subsidiaries has incurred any material
liability or obligation, direct or contingent, except in the ordinary course of
business.
(z) Each of the Preliminary Offering Memorandum and the
Offering Memorandum, as of its date, contains all the applicable information
specified in, and meeting the requirements of, Rule 144A(d)(4) under the Act.
(aa) When the Restricted Notes and the Subsidiary Guarantees
are issued and delivered pursuant to this Agreement, neither the Restricted
Notes nor the Subsidiary Guarantees will be of the same class (within the
meaning of Rule 144A under the Act) as any security of the Company or the
Guarantors that is listed on a national securities exchange registered under
Section 6 of the Exchange Act or that is quoted in a United States automated
inter-dealer quotation system.
(bb) No form of general solicitation or general advertising
(as defined in Regulation D under the Act) was used by the Company, the
Guarantors or any of their respective representatives (other than the Initial
Purchasers, as to whom the Company and the Guarantors make no representation) in
connection with the offer and sale of the Restricted Notes contemplated hereby,
including, but not limited to, articles, notices or other communications
published in any newspaper, magazine, or similar medium or broadcast over
television or radio, or any seminar or meeting whose attendees have been invited
by any general solicitation or general advertising. No securities of the same
class as the Restricted Notes have been issued and sold by the Company within
the six-month period immediately prior to the date hereof.
(cc) Assuming the accuracy of the representations and
warranties of the Initial Purchaser in Section 7 hereof, prior to the
effectiveness of any Registration Statement, the Indenture is not required to be
qualified under the TIA in connection with the offer, sale and delivery of the
Restricted Notes in the manner contemplated by the Offering Memorandum and this
Agreement.
(dd) None of the Company, the Guarantors nor any of their
respective affiliates or any person acting on its or their behalf (other than
the Initial Purchasers, as to whom the Company and the Guarantors make no
representation) has engaged or will engage in any directed selling efforts
within the meaning of Regulation S under the Act ("REGULATION S") with respect
to the Restricted Notes or the Subsidiary Guarantees.
(ee) The sale of the Restricted Notes pursuant to Regulation S
is not part of a plan or scheme on behalf of the Company to evade the
registration provisions of the Act.
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(ff) No registration under the Act of the Restricted Notes or
the Subsidiary Guarantees is required for the sale of the Restricted Notes and
the Subsidiary Guarantees to the Initial Purchasers as contemplated hereby or
for the Exempt Resales assuming the accuracy of the Initial Purchasers'
representations and warranties and agreements set forth in Section 7 hereof.
(gg) Each certificate signed by any officer of the Company or
any Guarantor and delivered to the Initial Purchasers or counsel for the Initial
Purchasers shall be deemed to be a representation and warranty by the Company or
such Guarantor to the Initial Purchasers as to the matters covered thereby.
(hh) The Company, the Guarantors and their respective
affiliates and all persons acting on their behalf (other than the Initial
Purchasers, as to whom the Company and the Guarantors make no representation)
have complied with and will comply with the offering restrictions requirements
of Regulation S in connection with the offering of the Restricted Notes outside
the United States and, in connection therewith, the Offering Memorandum will
contain the disclosure required by Rule 902(h).
(ii) The Company is a "reporting issuer" as defined in Rule
902 under the Act.
(jj) There is no (i) significant unfair labor practice
complaint, grievance or arbitration proceeding pending or, to the knowledge of
the Company or its subsidiaries, threatened against the Company or any of its
subsidiaries before the National Labor Relations Board or any state or local
labor relations board, (ii) strike, labor dispute, slowdown or stoppage pending
or, to the knowledge of the Company or its subsidiaries, threatened against the
Company or any of its subsidiaries or (iii) union representation question
existing with respect to the employees of the Company or any of its
subsidiaries, except in the case of clauses (i), (ii) and (iii) for such actions
which, singly or in the aggregate, would not have a Material Adverse Effect. To
the knowledge of the Company, no additional collective bargaining organizing
activities are taking place with respect to the Company or any of its
subsidiaries.
(kk) The Company and its subsidiaries have good and marketable
title in fee simple to all real property and good and marketable title to all
personal property owned by them which is material to the business of the Company
and its subsidiaries, in each case free and clear of all Liens, except Permitted
Liens and Liens created under credit agreements disclosed in the Offering
Memorandum or such as do not materially affect the value of such property and do
not materially interfere with the use made and proposed to be made of such
property by the Company and its subsidiaries; and any real property and
buildings held under lease by the Company and its subsidiaries are held by them
under valid, subsisting and enforceable leases with such exceptions as are not
material and do not materially interfere with the use made and currently
proposed to be made of such property and buildings by the Company and its
subsidiaries, in each case except as described in the Offering Memorandum.
(ll) The Company and each of its subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses in which they
are engaged; and neither the Company nor any of its subsidiaries (i) has
received notice from any insurer or agent of such insurer that substantial
capital improvements or other material expenditures will have to be made in
order to continue such insurance or (ii) has any reason to believe that it will
not be able to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers at a cost that would
not have a Material Adverse Effect.
The Company and the Guarantors acknowledge that the Initial
Purchasers and, for purposes of the opinions to be delivered to the Initial
Purchasers pursuant to Section 9 hereof, counsel to the Company and the
Guarantors and counsel to the Initial Purchasers will rely upon the accuracy and
truth of the foregoing representations and hereby consent to such reliance.
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7. INITIAL PURCHASERS' REPRESENTATIONS AND WARRANTIES. Each of the
Initial Purchasers, severally and not jointly, represents and warrants to the
Company and the Guarantors, and agrees that:
(a) Such Initial Purchaser is either a QIB or a Regulation S
Purchaser, in either case, with such knowledge and experience in financial and
business matters as is necessary in order to evaluate the merits and risks of an
investment in the Restricted Notes.
(b) Such Initial Purchaser (A) is not acquiring the Restricted
Notes with a view to any distribution thereof or with any present intention of
offering or selling any of the Restricted Notes in a transaction that would
violate the Act or the securities laws of any state of the United States or any
other applicable jurisdiction and (B) will be reoffering and reselling the
Restricted Notes only to (x) QIBs in reliance on and in compliance with the
exemption from the registration requirements of the Act provided by Rule 144A
and (y) in offshore transactions in reliance upon and in compliance with
Regulation S under the Act.
(c) Such Initial Purchasers agree that no form of general
solicitation or general advertising (within the meaning of Regulation D under
the Act) has been or will be used by such Initial Purchasers or any of their
representatives in connection with the offer and sale of the Restricted Notes
pursuant hereto, including, but not limited to, articles, notices or other
communications published in any newspaper, magazine or similar medium or
broadcast over television or radio, or any seminar or meeting whose attendees
have been invited by any general solicitation or general advertising.
(d) Such Initial Purchasers agree that, in connection with
Exempt Resales, such Initial Purchasers will solicit offers to buy the
Restricted Notes only from, and will offer to sell the Restricted Notes only to
and sell only to, Eligible Purchasers. Each Initial Purchaser further agrees
that it will offer to sell the Restricted Notes only to, and will solicit offers
to buy the Restricted Notes only from and sell only to (A) Eligible Purchasers
that the Initial Purchasers reasonably believe are QIBs, and (B) Regulation S
Purchasers, in each case, that agree that (x) the Restricted Notes purchased by
them may be resold, pledged or otherwise transferred only within the time period
referred to under Rule 144(k) (taking into account the provisions of Rule 144(d)
under the Act, if applicable) under the Act, as in effect on the date of the
transfer of such Restricted Notes, only (I) to the Company or any of its
subsidiaries, (II) to a person whom the seller reasonably believes is a QIB
purchasing for its own account or for the account of a QIB in a transaction
meeting the requirements of Rule 144A under the Act, (III) in an offshore
transaction (as defined in Rule 902 under the Act) meeting the requirements of
Rule 904 of the Act, (IV) in a transaction meeting the requirements of Rule 144
under the Act, (V) to a Regulation S Purchaser that, prior to such transfer,
furnishes the Trustee a signed letter containing certain representations and
agreements relating to the registration of transfer of such Restricted Note (the
form of which is substantially the same as Annex A to the Offering Memorandum)
and, if such transfer is in respect of an aggregate principal amount of
Restricted Notes less than $250,000, an opinion of counsel acceptable to the
Company that such transfer is in compliance with the Act, (VI) in accordance
with another exemption from the registration requirements of the Act (and based
upon an opinion of counsel acceptable to the Company) or (VII) pursuant to an
effective registration statement and, in each case, in accordance with the
applicable securities laws of any state of the United States or any other
applicable jurisdiction and (y) they will deliver to each person to whom such
Restricted Notes or an interest therein is transferred a notice substantially to
the effect of the foregoing.
(e) Such Initial Purchasers and their affiliates or any person
acting on their behalf have not engaged or will not engage in any directed
selling efforts within the meaning of Regulation S with respect to the
Restricted Notes or the Subsidiary Guarantees.
(f) The Restricted Notes offered and sold by such Initial
Purchasers pursuant hereto in reliance on Regulation S have been and will be
offered and sold only in offshore transactions.
(g) The sale of the Restricted Notes offered and sold by such
Initial Purchasers pursuant hereto in reliance on Regulation S is not part of a
plan or scheme to evade the registration provisions of the Act.
(h) Such Initial Purchasers agree that they have not offered
or sold and will not offer or sell the Restricted Notes in the United States or
to, or for the benefit or account of, a U.S. Person (other than a
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distributor), in each case, as defined in Rule 902 under the Act (i) as part of
its distribution at any time and (ii) otherwise until 40 days (or such later
time as may be required under Regulation S) after the later of the commencement
of the offering of the Restricted Notes pursuant hereto and the Closing Date,
other than in accordance with Regulation S of the Act or another exemption from
the registration requirements of the Act. Such Initial Purchasers agree that,
during such 40-day restricted period (or such longer restricted period as may be
required under Regulation S), they will not cause any advertisement with respect
to the Restricted Notes (including any "tombstone" advertisement) to be
published in any newspaper or periodical or posted in any public place and will
not issue any circular relating to the Restricted Notes, except such
advertisements as are permitted by and include the statements required by
Regulation S.
(i) Such Initial Purchasers agree that, at or prior to
confirmation of a sale of Restricted Notes by it to any distributor, dealer or
person receiving a selling concession, fee or other remuneration during the 40-
day (or later applicable) restricted period referred to in Rule 903(c)(2) under
the Act, they will send to such distributor, dealer or person receiving a
selling concession, fee or other remuneration a confirmation or notice to
substantially the following effect:
"The Restricted Notes covered hereby have not been
registered under the U.S. Securities Act of 1933, as amended (the "Securities
Act"), and may not be offered and sold within the United States or to, or for
the account or benefit of, U.S. persons (i) as part of your distribution at any
time or (ii) otherwise until 40 days after the later of the commencement of the
Offering and the Closing Date (or such later date as may be required under
Regulation S), except in either case in accordance with Regulation S under the
Securities Act (or Rule 144A or to Regulation S Purchasers in transactions that
are exempt from the registration requirements of the Securities Act), and in
connection with any subsequent sale by you of the Restricted Notes covered
hereby in reliance on Regulation S during the period referred to above to any
distributor, dealer or person receiving a selling concession, fee or other
remuneration, you must deliver a notice to substantially the foregoing effect.
Terms used above have the meanings assigned to them in Regulation S."
(j) The information provided by the Initial Purchaser for
inclusion in the Preliminary Offering Memorandum and the Offering Memorandum,
including the information under the caption "Plan of Distribution," and on the
cover page of the Offering Memorandum with respect to pricing, discounts and
commissions and proceeds, does not contain an untrue statement of a material
fact or omit to ▇▇▇▇▇▇ any material fact necessary to make the statements
therein not misleading, and contains all information required to be provided in
a registration statement on Form S-1 or Form S-4 under the Act and the Exchange
Act.
Such Initial Purchasers acknowledge that the Company and the
Guarantors and, for purposes of the opinions to be delivered to each Initial
Purchasers pursuant to Section 9 hereof, counsel to the Company and the
Guarantors and counsel to the Initial Purchasers will rely upon the accuracy and
truth of the foregoing representations and such Initial Purchasers hereby
consent to such reliance.
8. INDEMNIFICATION.
(a) The Company and each Guarantor agree, jointly and
severally, to indemnify and hold harmless the Initial Purchasers, their
directors, their officers and each person, if any, who controls such Initial
Purchasers within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, from and against any and all losses, claims, damages, liabilities
and judgments (including, without limitation, any reasonable legal or other
expenses incurred in connection with investigating or defending any matter,
including any action, that could give rise to any such losses, claims, damages,
liabilities or judgments) caused by any untrue statement or alleged untrue
statement of a material fact contained in the Offering Memorandum (or any
amendment or supplement thereto), the Preliminary Offering Memorandum or any
Rule 144A Information provided by the Company or any Guarantor to any holder or
prospective purchaser of Restricted Notes pursuant to Section 5(h) or caused by
any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading in any
material respect, except insofar as such losses, claims, damages, liabilities or
judgments are caused by any such untrue statement or omission or alleged untrue
statement or omission based upon information relating to the Initial Purchasers
or the plan of distribution furnished in writing to the Company by such Initial
Purchasers; provided, however, that the foregoing indemnity agreement with
respect to any Preliminary Offering Memorandum shall not inure to the
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benefit of any Initial Purchasers who failed to deliver a Final Offering
Memorandum (as then amended or supplemented, provided by the Company to the
several Initial Purchasers in the requisite quantity and on a timely basis to
permit proper delivery on or prior to the Closing Date) to the person asserting
any losses, claims, damages and liabilities and judgments caused by any untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Offering Memorandum, or caused by any omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading in any material respect, if such
material misstatement or omission or alleged material misstatement or omission
was cured in the Final Offering Memorandum.
(b) The Initial Purchasers agree to indemnify and hold
harmless the Company and the Guarantors, and their respective directors and
officers and each person, if any, who controls (within the meaning of Section 15
of the Act or Section 20 of the Exchange Act) the Company or the Guarantors, to
the same extent as the foregoing indemnity from the Company and the Guarantors
to the Initial Purchasers but only with reference to information relating to the
Initial Purchasers furnished in writing to the Company by the Initial Purchasers
expressly for use in the Preliminary Offering Memorandum or the Offering
Memorandum.
(c) In case any action shall be commenced involving any person
in respect of which indemnity may be sought pursuant to Section 8(a) or 8(b)
(the "INDEMNIFIED PARTY"), the indemnified party shall promptly notify the
person against whom such indemnity may be sought (the "INDEMNIFYING PARTY") in
writing and the indemnifying party shall assume the defense of such action,
including the employment of counsel reasonably satisfactory to the indemnified
party and the payment of all reasonable fees and expenses of such counsel, as
incurred (except that in the case of any action in respect of which indemnity
may be sought pursuant to both Sections 8(a) and 8(b), the Initial Purchasers
shall not be required to assume the defense of such action pursuant to this
Section 8(c), but may employ separate counsel and participate in the defense
thereof, but the fees and expenses of such counsel, except as provided below,
shall be at the expense of the Initial Purchasers). Any indemnified party shall
have the right to employ separate counsel in any such action and participate in
the defense thereof, but the fees and expenses of such counsel shall be at the
expense of the indemnified party unless (i) the employment of such counsel shall
have been specifically authorized in writing by the indemnifying party, (ii) the
indemnifying party shall have failed to assume the defense of such action or
employ counsel reasonably satisfactory to the indemnified party or (iii) the
named parties to any such action (including any impleaded parties) include both
the indemnified party and the indemnifying party, and the indemnified party
shall have been advised by such counsel that there may be one or more legal
defenses available to it which are different from or additional to those
available to the indemnifying party (in which case the indemnifying party shall
not have the right to assume the defense of such action on behalf of the
indemnified party). In any such case, the indemnifying party shall not, in
connection with any one action or separate but substantially similar or related
actions in the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the fees and expenses of more than one separate
firm of attorneys (in addition to any local counsel) for all indemnified parties
and all such fees and expenses shall be reimbursed as they are incurred. Such
firm shall be designated in writing by ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities
Corporation, in the case of the parties indemnified pursuant to Section 8(a),
and by the Company, in the case of parties indemnified pursuant to Section 8(b).
The indemnifying party shall indemnify and hold harmless the indemnified party
from and against any and all losses, claims, damages, liabilities and judgments
by reason of any settlement of any action effected with its written consent. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement or compromise of, or consent to the entry of
judgment with respect to, any pending or threatened action in respect of which
the indemnified party is or could have been a party and indemnity or
contribution may be or could have been sought hereunder by the indemnified
party, unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability on claims that
are or could have been the subject matter of such action and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of the indemnified party.
(d) To the extent the indemnification provided for in this
Section 8 is unavailable to an indemnified party or insufficient in respect of
any losses, claims, damages, liabilities or judgments referred to therein, then
each indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities and judgments (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Guarantors, on the one hand, and the Initial Purchasers on the
other hand from the offering of the Restricted Notes or (ii) if the allocation
provided by clause 8(d)(i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the
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relative benefits referred to in clause 8(d)(i) above but also the relative
fault of the Company and the Guarantors, on the one hand, and the Initial
Purchasers, on the other hand, in connection with the statements or omissions
which resulted in such losses, claims, damages, liabilities or judgments, as
well as any other relevant equitable considerations. The relative benefits
received by the Company and the Guarantors, on the one hand and the Initial
Purchasers, on the other hand, shall be deemed to be in the same proportion as
the total net proceeds from the offering of the Restricted Notes (after
underwriting discounts and commissions, but before deducting expenses other than
expenses of the Initial Purchasers paid by the Company) received by the Company,
and the total discounts and commissions received by the Initial Purchasers bear
to the total price to investors of the Restricted Notes, in each case as set
forth in the table on the cover page of the Offering Memorandum. The relative
fault of the Company and the Guarantors, on the one hand, and the Initial
Purchasers, on the other hand, shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or th
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Guarantors, on the one hand, or the Initial
Purchasers, on the other hand, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company and the Guarantors, and the Initial Purchasers
agree that it would not be just and equitable if contribution pursuant to this
Section 8(d) were determined by pro rata allocation (even if the Initial
Purchasers were treated as one entity for such purpose) or by any other method
of allocation which does not take account of the equitable considerations
referred to in the immediately preceding paragraph. The amount paid or payable
by an indemnified party as a result of the losses, claims, damages, liabilities
or judgments referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any reasonable legal or
other expenses incurred by such indemnified party in connection with
investigating or defending any matter, including any action, that could have
given rise to such losses, claims, damages, liabilities or judgments.
Notwithstanding the provisions of this Section 8, the Initial Purchasers shall
not be required to contribute any amount in excess of the amount by which the
sum of the total discounts and commissions received by such Initial Purchasers
and expenses of the Initial Purchasers paid by the Company exceeds the amount of
any damages which the Initial Purchasers have otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. 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 of such fraudulent misrepresentation. The Initial Purchasers'
obligations to contribute pursuant to this Section 8(d) are several in
proportion to the respective principal amount of Restricted Notes purchased by
each of the Initial Purchasers hereunder and not joint.
(e) The remedies provided for in this Section 8 are not
exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
9. CONDITIONS OF INITIAL PURCHASERS' OBLIGATIONS. The obligations
of the Initial Purchasers to purchase the Restricted Notes under this Agreement
are subject to the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Company and
the Guarantors contained in this Agreement shall be true and correct in all
material respects on the Closing Date with the same force and effect as if made
on and as of the Closing Date.
(b) On or after the date hereof, (i) there shall not have
occurred any downgrading, suspension or withdrawal of, nor shall any notice have
been given of any potential or intended downgrading, suspension or withdrawal
of, or of any review (or of any potential or intended review) for a possible
change that does not indicate the direction of the possible change in, any
rating of the Company or any Guarantor or any securities of the Company or any
Guarantor (including, without limitation, the placing of any of the foregoing
ratings on credit watch with negative or developing implications or under review
with an uncertain direction) by any "nationally recognized statistical rating
organization" as such term is defined for purposes of Rule 436(g)(2) under the
Act, (ii) there shall not have occurred any adverse change, nor shall any notice
have been given of any potential or intended adverse change, in the outlook for
any rating of the Company or any Guarantor or any securities of the Company or
any Guarantor by any such rating organization and (iii) no such rating
organization shall have given notice that it has assigned (or is considering
assigning) a lower rating to the Notes than that on which the Notes were
marketed.
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(c) Since the respective dates as of which information is
given in the Offering Memorandum, other than as set forth in the Offering
Memorandum (exclusive of any amendments or supplements thereto subsequent to the
date of this Agreement), (i) there shall not have occurred any change or any
development involving a reasonably certain prospective change in the condition,
financial or otherwise, or the earnings, business, management or operations of
the Company and its subsidiaries, taken as a whole, (ii) there shall not have
been any adverse change or any adverse development involving a reasonably
certain prospective change in the capital stock or in the long-term debt of the
Company or any of its subsidiaries and (iii) neither the Company nor any of its
subsidiaries shall have incurred any liability or obligation, direct or
contingent, the effect of which, in any such case described in clause 9(c)(i),
9(c)(ii) or 9(c)(iii), in your reasonable judgment, is material and adverse and,
in your reasonable judgment, makes it impracticable to market the Restricted
Notes on the terms and in the manner contemplated in the Offering Memorandum.
(d) You shall have received on the Closing Date a certificate
dated the Closing Date, signed by the President and the Chief Financial Officer
of the Company and each of the Guarantors, confirming the matters set forth in
Sections 6(y), 9(a) and 9(b) and stating that each of the Company and the
Guarantors has complied with all the agreements and satisfied all of the
conditions herein contained and required to be complied with or satisfied on or
prior to the Closing Date.
(e) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Initial Purchasers), dated the Closing
Date, of ▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P., counsel for the Company and the Guarantors,
substantially in the form attached as Exhibit B hereto.
(f) The Initial Purchasers shall have received on the Closing
Date an opinion, dated the Closing Date, of ▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇,
L.L.P., counsel for the Initial Purchasers, in form and substance reasonably
satisfactory to the Initial Purchasers.
(g) The Initial Purchasers shall have received, at the time
this Agreement is executed and at the Closing Date, letters dated the date
hereof or the Closing Date, as the case may be, in form and substance
satisfactory to the Initial Purchasers from Ernst & Young, LLP and ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇, independent public accountants, containing the information and
statements of the type ordinarily included in accountants' "comfort letters" to
the Initial Purchasers with respect to the financial statements and certain
financial information contained in the Offering Memorandum.
(h) The Restricted Notes shall have been approved by the NASD
for trading and duly listed in PORTAL.
(i) The Initial Purchasers shall have received a counterpart,
conformed as executed, of the Indenture which shall have been entered into by
the Company, the Guarantors and the Trustee.
(j) The Company and the Guarantors shall have executed the
Registration Rights Agreement and the Initial Purchasers shall have received an
original copy thereof, duly executed by the Company and the Guarantors.
(k) Neither the Company nor the Guarantors shall have failed
at or prior to the Closing Date to perform or comply with any of the agreements
herein contained and required in any material respect to be performed or
complied with by the Company or the Guarantors, as the case may be, at or prior
to the Closing Date.
(l) The Company shall have acquired the capital stock of
Addison Structural Services, Inc. prior to or simultaneously with the Closing.
(m) Addison Structural Services, Inc., Addison Steel, Inc. and
Quincy Joist Company shall have become parties to this agreement as "Guarantors"
pursuant to an assumption agreement in the form of Exhibit I hereto which shall
be executed by each Guarantor and delivered to the Initial Purchaser on the
Closing Date.
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(n) The firm of King & Spalding shall permit the Initial
Purchasers to rely on its opinion rendered to the Company in connection with the
purchase of Addison Structural Services, Inc., Addison Steel, Inc. and Quincy
Joist Company by the Company.
10. EFFECTIVENESS OF AGREEMENT AND TERMINATION. This Agreement shall
become effective upon the execution and delivery of this Agreement by the
parties hereto.
This Agreement may be terminated at any time on or prior to the
Closing Date by the Initial Purchasers by written notice to the Company if any
of the following has occurred: (i) any outbreak or escalation of hostilities or
other national or international calamity or crisis or change in economic
conditions or in the financial markets of the United States or elsewhere that,
in the Initial Purchasers' reasonable judgment, is material and adverse and, in
the Initial Purchasers' reasonable judgment, makes it impracticable to market
the Restricted Notes on the terms and in the manner contemplated in the Offering
Memorandum, (ii) the suspension or material limitation of trading in securities
or other instruments on the New York Stock Exchange, the American Stock
Exchange, the Chicago Board of Options Exchange, the Chicago Mercantile
Exchange, the Chicago Board of Trade or the Nasdaq National Market or limitation
on prices for securities or other instruments on any such exchange or the Nasdaq
National Market, (iii) the suspension of trading of any securities of the
Company or any Guarantor on any exchange or in the over-the-counter market, (iv)
the enactment, publication, decree or other promulgation of any federal or state
statute, regulation, rule or order of any court or other governmental authority
which in your reasonable opinion materially and adversely affects, or will
materially and adversely affect, the business, prospects, financial condition or
results of operations of the Company and its subsidiaries, taken as a whole, (v)
the declaration of a banking moratorium by either federal or New York State
authorities or (vi) the taking of any action by any federal, state or local
government or agency in respect of its monetary or fiscal affairs which in your
reasonable opinion has a material adverse effect on the financial markets in the
United States.
If on the Closing Date any one or more of the Initial Purchasers
shall fail or refuse to purchase the Restricted Notes which it or they have
agreed to purchase hereunder on such date and the aggregate principal amount of
the Restricted Notes which such defaulting Initial Purchaser or Initial
Purchasers, as the case may be, agreed but failed or refused to purchase is not
more than one-tenth of the aggregate principal amount of the Restricted Notes to
be purchased on such date by all Initial Purchasers, each non-defaulting Initial
Purchaser shall be obligated severally, in the proportion which the principal
amount of the Restricted Notes set forth opposite its name in Schedule B bears
to the aggregate principal amount of the Restricted Notes which all the
non-defaulting Initial Purchasers, as the case may be, have agreed to purchase,
or in such other proportion as you may specify, to purchase the Restricted Notes
which such defaulting Initial Purchaser or Initial Purchasers, as the case may
be, agreed but failed or refused to purchase on such date; provided that in no
event shall the aggregate principal amount of the Restricted Notes which any
Initial Purchaser has agreed to purchase pursuant to Section 2 hereof be
increased pursuant to this Section 10 by an amount in excess of one-ninth of
such principal amount of the Restricted Notes without the written consent of
such Initial Purchaser. If on the Closing Date any Initial Purchaser or Initial
Purchasers shall fail or refuse to purchase the Restricted Notes and the
aggregate principal amount of the Restricted Notes with respect to which such
default occurs is more than one-tenth of the aggregate principal amount of the
Restricted Notes to be purchased by all Initial Purchasers and arrangements
satisfactory to the Initial Purchasers and the Company for purchase of such the
Restricted Notes are not made within 48 hours after such default, this Agreement
will terminate without liability on the part of any non-defaulting Initial
Purchasers and the Company. In any such case which does not result in
termination of this Agreement, either you or the Company shall have the right to
postpone the Closing Date, but in no event for longer than seven days, in order
that the required changes, if any, in the Offering Memorandum or any other
documents or arrangements may be effected. Any action taken under this paragraph
shall not relieve any defaulting Initial Purchasers from liability in respect of
any default of any such Initial Purchasers under this Agreement.
11. MISCELLANEOUS. (a) Notices given pursuant to any provision of
this Agreement shall be addressed as follows: (i) if to the Company or any
Guarantor, to ▇▇▇▇▇▇ Steel Company, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (▇▇▇) ▇▇▇-▇▇▇▇, and (ii) if to the Initial
Purchasers, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation, ▇▇▇▇▇▇▇▇▇ &
Company, Inc., ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Co., Inc., c/▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇ Securities Corporation, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: Syndicate Department, or in any case to such other address as the
person to be notified may have requested in writing.
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(b) The respective indemnities, contribution agreements,
representations, warranties and other statements of the Company, the Guarantors
and the Initial Purchasers set forth in or made pursuant to this Agreement shall
remain operative and in full force and effect, and will survive delivery of and
payment for the Restricted Notes, regardless of (i) any investigation, or
statement as to the results thereof, made by or on behalf of the Initial
Purchasers, the officers or directors of the Initial Purchasers, any person
controlling the Initial Purchasers, the Company, any Guarantor, the officers or
directors of the Company or any Guarantor, or any person controlling the Company
or any Guarantor, (ii) acceptance of the Restricted Notes and payment for them
hereunder and (iii) termination of this Agreement.
If for any reason the Restricted Notes are not delivered by or
on behalf of the Company as provided herein (other than as a result of any
termination of this Agreement pursuant to Section 10), the Company and each
Guarantor, jointly and severally, agree to reimburse the Initial Purchasers for
all out-of-pocket expenses (including the fees and disbursements of counsel)
incurred by them. Notwithstanding any termination of this Agreement, the Company
shall be liable for all expenses which it has agreed to pay pursuant to Section
5(i) hereof. The Company and each Guarantor also agree, jointly and severally,
to reimburse the Initial Purchasers and their officers, directors and each
person, if any, who controls such Initial Purchasers within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act for any and all fees and
expenses (including without limitation the fees and expenses of counsel)
incurred by them in connection with enforcing their rights under this Agreement
(including without limitation its rights under Section 8).
(c) Except as otherwise provided, this Agreement has been and
is made solely for the benefit of and shall be binding upon the Company, the
Guarantors, the Initial Purchasers, the Initial Purchasers' directors and
officers, any controlling persons referred to herein, the directors of the
Company and the Guarantors and their respective successors and assigns, all as
and to the extent provided in this Agreement, and no other person shall acquire
or have any right under or by virtue of this Agreement. The term "successors and
assigns" shall not include a purchaser of any of the Restricted Notes from the
Initial Purchasers merely because of such purchase.
(d) This Agreement shall be governed and construed in
accordance with the laws of the State of New York.
(e) This Agreement may be signed in various counterparts and
by facsimile which together shall constitute one and the same instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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Please confirm that the foregoing correctly sets forth the agreement
among the undersigned.
Very truly yours,
▇▇▇▇▇▇ STEEL COMPANY
By:______________________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President, Chief Executive
Officer and Director
B & K STEEL FABRICATIONS, INC.
By:______________________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
▇▇▇▇▇▇▇▇▇ & COMPANY INC.
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & CO., INC.
BY: ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
By:______________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ III
Title: Vice President
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SCHEDULE A
GUARANTORS
Addison Structural Services, Inc.
Addison Steel, Inc.
Quincy Joist Company
B & K Steel Fabrications, Inc.
22
SCHEDULE B
Initial Purchasers Principal Amount
------------------ ----------------
of Notes
--------
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Securities Corporation.......... $ 66,500,000
▇▇▇▇▇▇▇▇▇ & Company, Inc........... $ 28,500,000
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
& Co., Inc..................... $ 5,000,000
Total.............................. $100,000,000
23
SCHEDULE C
SUBSIDIARIES
Addison Structural Services, Inc.
Addison Steel, Inc.
Quincy Joist Company
B & K Steel Fabrications, Inc.
24
EXHIBIT A
FORM OF REGISTRATION RIGHTS AGREEMENT
25
EXHIBIT B
FORM OF OPINION