SUBSCRIPTION AGREEMENT
TO: GERDAU AMERISTEEL CORPORATION
DATED: AS OF OCTOBER 14, 2004
RECITALS:
1. Gerdau Ameristeel Corporation (the "COMPANY") has authorized the issuance
and sale (the "OFFERING") of 70,000,000 common shares of the Company (the
"SHARES") at a price per Share as set out in Schedule "A" hereto (the "ISSUE
PRICE"), of which 35,000,000 Shares shall be issued to a syndicate of
underwriters (collectively, the "UNDERWRITERS") pursuant to the terms and
conditions of a purchase agreement dated the date hereof (the "PURCHASE
AGREEMENT") between the Underwriters and the Company.
2. In addition, under the terms and conditions of the Purchase Agreement, the
Company has granted to the Underwriters an option to purchase up to 5,250,000
common shares, at a price per share equal to the Issue Price, within 30 days of
the Closing Date (as defined below) to cover overallotments, if any (the
"OVERALLOTMENT OPTION").
3. Gerdau Steel Inc. (the "PURCHASER"), a wholly-owned subsidiary of ▇▇▇▇▇▇
▇.▇. has agreed to purchase the remaining 35,000,000 Shares (the "▇▇▇▇▇▇ ▇.▇.
SHARES") at a price per ▇▇▇▇▇▇ ▇.▇. Share equal to the Issue Price. The sale of
the ▇▇▇▇▇▇ ▇.▇. Shares pursuant to this subscription agreement (the
"AGREEMENT") forms part of the Offering. The Offering will be effected pursuant
to a short form PREP prospectus filed with the securities regulatory
authorities in each of the provinces and territories of Canada and the U.S.
Securities and Exchange Commission under the multi-jurisdictional disclosure
system as part of a registration statement.
NOW THEREFORE, the Purchaser and the Company agree as follows:
A. INITIAL SUBSCRIPTION
1. Concurrently with the sale of 35,000,000 Shares to the Underwriters, the
Company shall issue and sell to the Purchaser, and the Purchaser shall
subscribe for and purchase from the Company, the ▇▇▇▇▇▇ ▇.▇. Shares at a
price per share equal to the Issue Price (the "SUBSCRIPTION AMOUNT") on the
terms and conditions contained in this Agreement.
2. The closing of the purchase and sale of the ▇▇▇▇▇▇ ▇.▇. Shares (the
"CLOSING") will be held at the offices of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇
LLP, ▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇ at 8:30 A.M.
(Eastern time) on the Closing Date (as defined in the Purchase Agreement). On
the Closing Date, the Company shall deliver to the Purchaser a share
certificate representing the ▇▇▇▇▇▇ ▇.▇. Shares registered in the name of the
Purchaser, against payment to the Company by wire transfer of the aggregate
Subscription Amount for the ▇▇▇▇▇▇ ▇.▇. Shares being subscribed for hereunder.
B. ADDITIONAL SUBSCRIPTION
1. Within two days of the date of exercise by the Underwriters of the
Overallotment Option, if any, the Purchaser shall purchase from the Company
and the Company shall issue and sell to the Purchaser, a number of additional
common shares (the "ADDITIONAL ▇▇▇▇▇▇ ▇.▇. SHARES") equal to the number of
common shares purchased by the Underwriters pursuant to the Overallotment
Option at a price per share equal to the Issue Price (the "ADDITIONAL
SUBSCRIPTION AMOUNT").
2. The closing of the purchase and sale of the Additional ▇▇▇▇▇▇ ▇.▇. Shares
shall be held at the same time and place as the closing of the Overallotment
Option, which shall be as agreed upon by the Company, the Underwriters and the
Purchaser (the "OVERALLOTMENT CLOSING DATE").
3. At the time of closing on the Overallotment Closing Date, the Company shall
deliver to the Purchaser a share certificate representing the number of
Additional ▇▇▇▇▇▇ ▇.▇. Shares that the Purchaser has agreed to purchase,
registered in the name of the Purchaser, against payment to the Company by wire
transfer of the aggregate Additional Subscription Amount for the Additional
▇▇▇▇▇▇ ▇.▇. Shares being subscribed for hereunder.
C. PURCHASER'S ACKNOWLEDGEMENTS AND AGREEMENTS
The Purchaser acknowledges and agrees that:
(a) except as provided under applicable securities laws, and subject to
the condition set forth in paragraph E.1 of this Agreement, this
subscription is and shall be irrevocable as against the Purchaser; and
(b) the Purchaser (i) is not a person within the United States; (ii) was
not offered the ▇▇▇▇▇▇ ▇.▇. Shares in the United States; and (iii) did
not execute this Agreement in the United States.
D. PURCHASER'S REPRESENTATIONS, WARRANTIES AND COVENANTS
The Purchaser represents, warrants and covenants to the Company (which
representations, warranties and covenants shall survive the Closing Date and the
Overallotment Closing Date, if any) and acknowledges that the Company is relying
thereon, that:
(a) the Purchaser has duly executed, authorized and delivered this
Agreement, and upon acceptance by the Company, this Agreement will
constitute a valid and binding agreement of the Purchaser, enforceable
against the Purchaser in accordance with its terms, except as limited
by applicable bankruptcy, insolvency, reorganization or other laws of
general application affecting enforcement of creditors' rights;
general principles of equity that restrict the availability of
equitable remedies; and to the extent that enforceability may be
limited by applicable securities laws; and
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(b) the Purchaser will, with respect to this Agreement, execute, deliver
and file or assist the Company in obtaining and filing such reports,
undertakings and other documents relating to the purchase of the
▇▇▇▇▇▇ ▇.▇. Shares and the Additional ▇▇▇▇▇▇ ▇.▇. Shares, if any, by
the Purchaser as may be required by any securities commission, stock
exchange or other regulatory authority.
E. CONDITIONS TO CLOSING
1. The obligations of the Company and the Purchaser to complete the purchase
and sale of the ▇▇▇▇▇▇ ▇.▇. Shares on the Closing Date and the Additional
▇▇▇▇▇▇ ▇.▇. Shares on the Overallotment Closing Date are conditional upon,
respectively, the concurrent completion of the sale of 35,000,000 Shares to the
Underwriters under the Purchase Agreement and the sale of the additional common
shares to the Underwriters pursuant to the Overallotment Option.
2. The Company's obligation to issue and sell the ▇▇▇▇▇▇ ▇.▇. Shares at the
Closing Date and the Additional ▇▇▇▇▇▇ ▇.▇. Shares at the Overallotment Closing
Date, if any, is subject to the satisfaction or waiver, at the option of the
Company, of the following conditions:
(a) the representations and warranties made by the Purchaser in this
Agreement shall be true and correct when made, and shall be true and
correct on the Closing Date and the Overallotment Closing Date, if
any, with the same force and effect as if they had been made on and as
of such dates;
(b) all covenants, agreements and conditions contained in this Agreement
that the Purchaser is required to perform on or prior to the Closing
Date shall have been performed or complied with in all material
respects;
(c) the Company shall have obtained all necessary qualifications and
receipts under applicable securities laws, or obtained exemptions
therefrom, required by any jurisdiction for the offer and sale of the
▇▇▇▇▇▇ ▇.▇. Shares and the Additional ▇▇▇▇▇▇ ▇.▇. Shares, as
applicable, to the Purchaser;
(d) the sale of the ▇▇▇▇▇▇ ▇.▇. Shares and the Additional ▇▇▇▇▇▇ ▇.▇.
Shares shall not be prohibited by any law or governmental order or
regulation;
(e) no proceeding challenging this Agreement or the transactions
contemplated by this Agreement, or seeking to prohibit, alter, prevent
or materially delay the Closing, shall have been instituted or be
pending before any court, arbitrator, governmental body, agency or
official.
F. NOTICES
Any demand, notice or other communication to be given in connection with
this Agreement must be given in writing and will be given by personal delivery
or by electronic means of communication addressed to the recipient as follows:
To the Company:
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▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
Fax No.: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Attention: Chief Financial Officer
To the Purchaser:
Gerdau Steel Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇
With a copy to:
▇▇▇▇▇▇ ▇.▇.
▇▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇-▇▇▇ - ▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇
Brazil
Fax No.: (011-55)(▇▇)▇▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
or to such other address, individual or electronic communication number as
may be designated by notice given by either party to the other. Any demand,
notice or other communication given by personal delivery will be
conclusively deemed to have been given on the day of actual delivery
thereof and, if given by electronic communication, on the day of
transmittal thereof if given during the normal business hours of the
recipient and on the business day during which such normal business hours
next occur if not given during such hours on any day.
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G. GENERAL
1. Time shall, in all respects, be of the essence in this Agreement.
2. All dollar amounts referred to in this Agreement are expressed in U.S.
dollars and, for greater certainty, "$" means U.S. dollars, unless otherwise
indicated.
3. The headings contained in this Agreement are for convenience only and do
not affect the construction or interpretation of this document.
4. The terms and provisions of this Agreement shall be binding upon and enure
to the benefit of the Purchaser and the Company and their respective successors
and assigns; provided, that, except as provided in this Agreement, this
Agreement shall not be assignable by any party without the written consent of
the other.
5. This Agreement shall be governed by and construed in accordance with the
laws of the Province of Ontario and the applicable laws of Canada.
6. This Agreement may be executed in any number of counterparts, each of which
when delivered, either in original or facsimile form, shall be deemed to be
an original and all of which together shall constitute one and the same
document.
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Dated as of the date first written above.
GERDAU STEEL INC.
Per: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
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This Agreement is accepted by the Company as of the date first written above.
GERDAU AMERISTEEL CORPORATION
Per: /s/ ▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President, Finance, Chief
Financial Officer and Secretary
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SCHEDULE "A"
The Issue Price is $4.70.