Exhibit 4.2
RENCO STEEL HOLDINGS, INC.
$120,000,000
10 7/8% Senior Secured Notes due 2005
Purchase Agreement
January 29, 1998
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
PURCHASE AGREEMENT
$120,000,000
10 7/8% Series A Senior Secured Notes due 2005
RENCO STEEL HOLDINGS, INC.
January 29, 1998
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
RENCO STEEL HOLDINGS, INC., an Ohio corporation (the "COMPANY"),
proposes to issue and sell to Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities
Corporation (the "INITIAL PURCHASER") an aggregate of $120,000,000 in principal
amount of its 10 7/8% Senior Secured Notes due 2005 (the "SERIES A NOTES"),
subject to the terms and conditions set forth herein. The Series A 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), between the Company and State
Street Bank and Trust Company, as trustee (the "TRUSTEE"). The Series A Notes
and the Series B Notes (as defined below) issuable in exchange therefor are
collectively referred to herein as the "NOTES." The Notes will be secured by a
pledge on all the outstanding shares of capital stock of WCI Steel, Inc. (the
"COLLATERAL") pursuant to the Pledge Agreement to be dated as of the Closing
Date (the "PLEDGE AGREEMENT") between the Company and the Trustee thereunder.
Capitalized terms used but not defined herein shall have the meanings given to
such terms in the Indenture.
1. OFFERING MEMORANDUM. The Series A Notes will be offered and sold
to the Initial Purchaser pursuant to one or more exemptions from the
registration requirements under the Securities Act of 1933, as amended (the
"Securities Act"). The Company has prepared a preliminary offering memorandum,
dated January 22, 1998 (the "PRELIMINARY OFFERING MEMORANDUM") and a final
offering memorandum, dated January 29, 1998 (the "OFFERING MEMORANDUM"),
relating to the Series A Notes.
Upon original issuance thereof, and until such time as the same is no
longer required pursuant to the Indenture, the Series A Notes (and all
securities issued in exchange therefor, in substitution thereof or upon
conversion thereof) shall bear the following legend:
THE 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 NEXT SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL
INTEREST HEREIN, THE HOLDER: (A) REPRESENTS THAT (1) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A
"QIB") OR (2) IT HAS ACQUIRED THIS NOTE IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT; (B) AGREES THAT IT
WILL NOT RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (1) TO THE COMPANY
OR ANY OF ITS SUBSIDIARIES, (2) 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, (3) IN AN
OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR 904 OF THE
SECURITIES ACT, (4) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144
UNDER THE SECURITIES ACT, (5) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE
SECURITIES ACT THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE A SIGNED
LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
TRANSFER OF THIS NOTE (THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE)
AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF
NOTES LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY
THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (6) 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 (7) 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 (C) 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
2
contained herein, the Company agrees to issue and sell to the Initial Purchaser,
and the Initial Purchaser agrees to purchase from the Company, an aggregate
principal amount of $120,000,000 of Series A Notes at a purchase price equal to
97.138% of the principal amount thereof.
3. TERMS OF OFFERING. The Initial Purchaser has advised the Company
that the Initial Purchaser will make offers (the "EXEMPT RESALES") of the Series
A Notes purchased hereunder on the terms set forth in the Offering Memorandum,
as amended or supplemented, solely to (i) persons whom the Initial Purchaser
reasonably believe to be "qualified institutional buyers" as defined in Rule
144A under the Securities Act ("QIBS") and (ii) to persons permitted to purchase
the Series A Notes in offshore transactions in reliance upon Regulation S under
the Securities Act (each, a "REGULATION S PURCHASER") (such persons specified in
clauses (i) and (ii) being referred to herein as the "ELIGIBLE PURCHASERS").
The Initial Purchaser will offer the Series A Notes to Eligible Purchasers
initially at a price equal to 99.638% of the principal amount thereof. Such
price may be changed at any time without notice.
Holders (including subsequent transferees) of the Series A 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 Series A Notes constitute
"TRANSFER RESTRICTED SECURITIES" (as defined in the Registration Rights
Agreement). Pursuant to the Registration Rights Agreement, the Company will
agree to file with the Securities and Exchange Commission (the "COMMISSION")
under the circumstances set forth therein, (i) a registration statement under
the Securities Act (the "EXCHANGE OFFER REGISTRATION STATEMENT") relating to the
Company's 10 7/8% Series B Senior Secured Notes due 2005 (the "SERIES B NOTES"),
to be offered in exchange for the Series A Notes (such offer to exchange being
referred to as the "EXCHANGE OFFER") and/or (ii) a shelf registration statement
pursuant to Rule 415 under the Securities 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
Series A Notes and to use its reasonable 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 Pledge Agreement and the
Registration Rights Agreement are hereinafter sometimes referred to collectively
as the "OPERATIVE DOCUMENTS."
4. DELIVERY AND PAYMENT.
(a) Delivery of, and payment of the Purchase Price for, the Series A
Notes shall be made at the offices of Xxxxxx Xxxxxx & Xxxxxxx 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 February 3, 1998 or at such other time on
the same date or such other date as shall be agreed upon by the Initial
Purchaser and the Company in writing. The time and date of such delivery and
the payment for the Series A Notes are herein called the "CLOSING DATE."
(b) One or more of the Series A 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 Series A Notes (collectively, the "GLOBAL NOTE"), shall
be delivered by the Company to the Initial Purchaser (or as
3
the Initial Purchaser directs) in each case with any transfer taxes thereon duly
paid by the Company against payment by the Initial Purchaser of the Purchase
Price thereof by wire transfer in same day funds to the order of the Company.
The Global Note shall be made available to the Initial Purchaser 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. The Company hereby agrees with the
Initial Purchaser as follows:
(a) To advise you promptly and, if requested by the Initial
Purchaser, 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 of the Series A Notes for offering or
sale in any jurisdiction, or the initiation of any proceeding for such
purpose by any state securities commission or other regulatory authority,
and (ii) of the happening of any event that makes any statement of a
material fact made in the Offering Memorandum untrue or that requires the
making of any additions to or changes in the Offering Memorandum in order
to make the statements therein, in the light of the circumstances under
which they are made, not misleading. The Company shall use its best
efforts to prevent the issuance of any stop order or order suspending the
qualification or exemption of any of the Series A Notes under any state
securities or Blue Sky laws, and if at any time any state securities
commission or other regulatory authority shall issue an order suspending
the qualification or exemption of any of the Series A Notes under any state
securities or Blue Sky laws, the Company shall use its best efforts to
obtain the withdrawal or lifting of such order at the earliest possible
time.
(b) To furnish you, without charge, as many copies of the Preliminary
Offering Memorandum and the Offering Memorandum, and any amendments or
supplements thereto, as you may reasonably request. The Company consents
to the lawful use of the Preliminary Offering Memorandum and the Offering
Memorandum, and any amendments and supplements thereto, by you in
connection with Exempt Resales.
(c) Not to amend or supplement the Preliminary Offering Memorandum or
the Offering Memorandum prior to the Closing Date unless you shall
previously have been advised thereof and shall not have objected thereto
after being furnished a copy thereof. The Company shall promptly prepare,
upon your request, any amendment or supplement to the Preliminary Offering
Memorandum or the Offering Memorandum that may be reasonably necessary or
advisable in connection with Exempt Resales.
(d) If, after the date hereof and prior to consummation of any Exempt
Resales, any event shall occur as a result of which, in the judgment of the
Company or in the reasonable opinion of your counsel, it becomes necessary
to amend or supplement the Offering Memorandum in order to make the
statements therein, in the light of the circumstances when the Offering
Memorandum is delivered to an Eligible Purchaser which is a prospective
purchaser, not misleading, or if it is necessary to amend or supplement the
Offering Memorandum to comply with applicable law, forthwith to prepare an
appropriate amendment or supplement to the Offering Memorandum so that
statements therein as so
4
amended or supplemented will not, in the light of the circumstances when it
is so delivered, be misleading, or so that the Offering Memorandum will
comply with applicable law.
(e) To cooperate with you and your counsel in connection with the
qualification of the Series A Notes under the securities or Blue Sky laws
of such jurisdictions as you may request and to continue such qualification
in effect so long as required for the Exempt Resales; PROVIDED, HOWEVER,
that the Company shall not be required in connection therewith to register
or qualify as a foreign corporation where it is not now so qualified or to
take any action that would subject it to the service of process in suits or
taxation, other than as to matters and transactions relating to the Exempt
Resales, in any jurisdiction where it is not now so subject.
(f) Whether or not the transactions contemplated by this Agreement
are consummated or this Agreement becomes effective or is terminated, to
pay all costs, expenses, fees and taxes incident to and in connection with:
(i) the preparation, printing, filing and distribution of the Preliminary
Offering Memorandum and the Offering Memorandum (including, without
limitation, financial statements and exhibits) and all amendments and
supplements thereto, (ii) the preparation (including, without limitation,
word processing and duplication costs) and delivery of this Agreement and
the other Operative Documents and all preliminary and final Blue Sky
memoranda and all other agreements, memoranda, correspondence and other
documents prepared and delivered in connection herewith and with the Exempt
Resales, (iii) the issuance and delivery by the Company of the Notes, (iv)
the qualification of the Notes for offer and sale under the securities or
Blue Sky laws of the several states (including, without limitation, the
reasonable fees and disbursements of your counsel relating to such
registration or qualification), (v) furnishing such copies of the
Preliminary Offering Memorandum and the Offering Memorandum, and all
amendments and supplements thereto, as may be reasonably requested for use
in connection with Exempt Resales, (vi) the preparation of certificates for
the Notes (including, without limitation, printing and engraving thereof),
(vii) the fees, disbursements and expenses of the Company's counsel and
accountants, (viii) all expenses and listing fees in connection with the
application for quotation of the Series A Notes in the National Association
of Securities Dealers, Inc. ("NASD") Automated Quotation System - PORTAL
("PORTAL"), (ix) all fees and expenses (including fees and expenses of
counsel) of the Company in connection with approval of the Notes by DTC,
Euroclear or CEDEL for "book-entry" transfer and (x) the performance by the
Company of its other obligations under this Agreement and the other
Operative Documents.
(g) To use the proceeds from the sale of the Series A Notes in the
manner described in the Offering Memorandum under the caption "Use of
Proceeds."
(h) Not to voluntarily claim, and to resist actively any attempts to
claim, the benefit of any usury laws against the holders of any Notes.
(i) To do and perform all things required to be done and performed
under this Agreement by it prior to or after the Closing Date and to
satisfy all conditions precedent on its part to the delivery of the Series
A Notes.
5
(j) Not to sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in the Securities Act)
that would be integrated with the sale of the Series A Notes in a manner
that would require the registration under the Securities Act of the sale to
you or Eligible Purchasers of the Series A Notes.
(k) For so long as any of the Notes remain outstanding and during any
period in which the Company is 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 QIB or beneficial owner of Series A Notes in connection
with any sale thereof and any prospective purchaser of such Series A Notes
from such QIB or beneficial owner, the information required by Rule
144A(d)(4) under the Securities Act.
(l) To cause the Exchange Offer to be made in the appropriate form to
permit registration of the Series B Notes to be offered in exchange for the
Series A Notes and to comply in all material respects with all applicable
federal and state securities laws in connection with the Exchange Offer.
(m) To comply in all material respects with all of its agreements set
forth in the Registration Rights Agreement, and all agreements set forth in
the representation letter of the Company to DTC relating to the approval of
the Notes by DTC for "book-entry" transfer and any similar such letter, if
any, with Euroclear or CEDEL.
(n) To use reasonable efforts to effect the inclusion of the Series A
Notes in PORTAL.
(o) During a period of five years following the date of this
Agreement, to deliver to you promptly upon their becoming available, copies
of all current, regular and periodic reports filed by the Company with the
Commission or any securities exchange or with any governmental authority
succeeding to any of the Commission's functions.
(p) The Company agrees to do or cause to be done such further acts
and things and deliver or cause to be delivered to the Trustee, and file or
cause to be filed, such additional instruments, documents, forms
(including, without limitation, Uniform Commercial Code ("UCC") forms) and
assurances as the Initial Purchaser or the Trustee may reasonably require
or deem advisable to give the Trustee a valid and perfected first priority
lien on the Collateral.
6. REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants to you that:
(a) The Preliminary Offering Memorandum and the Offering Memorandum
have been prepared in connection with the Exempt Resales. The Preliminary
Offering Memorandum as of its date did not, and the Offering Memorandum
does 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
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that the
6
representations and warranties contained in this paragraph (i) shall not
apply to statements in or omissions from the Preliminary Offering
Memorandum and the Offering Memorandum (or any supplement or amendment
thereto) made in reliance upon and in conformity with information relating
to you furnished to the Company in writing by you 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
Securities Act, has been issued. Each of the Preliminary Offering
Memorandum and the Offering Memorandum, as of its date, contains all the
information specified in, and meeting the requirements of, Rule 144A(d)(4)
under the Securities Act.
(b) When the Series A Notes are issued and delivered pursuant to this
Agreement, none of the Series A Notes will be of the same class (within the
meaning of Rule 144A under the Securities Act) as securities of the Company
that are listed on a national securities exchange registered under Section
6 of the Exchange Act or that are quoted in a United States automated
inter-dealer quotation system.
(c) The Company and each of its subsidiaries has been duly organized,
is validly existing as a corporation or limited partnership, as the case
may be, in good standing under the laws of its respective jurisdiction of
incorporation or formation, as the case may be, has all requisite power and
authority to carry on its business as it is currently being conducted and
as described in the Offering Memorandum and to own, lease and operate its
properties, and is duly qualified and in good standing as a foreign
corporation or limited partnership, as the case may be, authorized to do
business in each jurisdiction in which the nature of its business or its
ownership or leasing of property requires such qualification.
(d) The entities listed on Schedule A hereto are the only
subsidiaries, direct or indirect, of the Company. The Company owns,
directly or indirectly through other subsidiaries, 100% of the outstanding
capital stock or other securities evidencing equity ownership of such
subsidiaries, free and clear of any security interest, claim, lien,
limitation on voting rights or encumbrance; and all of such securities have
been duly authorized, validly issued, are fully paid and nonassessable and
were not issued in violation of any preemptive or similar rights. There
are no outstanding subscriptions, rights, warrants, calls, commitments of
sale or options to acquire, or instruments convertible into or exchangeable
for, any such shares of capital stock or other equity interest of such
subsidiaries.
(e) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Agreement, the
Pledge Agreement, the Registration Rights Agreement and the other Operative
Documents to which it is a party and to consummate the transactions
contemplated hereby and thereby, including, without limitation, with
respect to the Company, the corporate power and authority to issue, sell
and deliver the Notes as provided herein and therein.
(f) This Agreement has been duly and validly authorized, executed and
delivered by the Company and is the legally valid and binding agreement of
the Company, enforceable against the Company in accordance with its terms.
7
(g) The Indenture has been duly and validly authorized by the Company
and, when duly executed and delivered by the Company, will be the legally
valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms. The Indenture, when executed and
delivered, will conform to the description thereof in the Offering
Memorandum.
(h) The Pledge Agreement has been duly and validly authorized by the
Company and, when duly executed and delivered by the Company (including,
without limitation, the creation and perfection of the liens in the
Collateral), will be the legally valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms. The
Pledge Agreement, when executed and delivered, will conform to the
description thereof in the Offering Memorandum.
(i) The Series A Notes have been duly and validly authorized for
issuance and sale to you by the Company pursuant to this Agreement and,
when issued and authenticated in accordance with the terms of the Indenture
and delivered against payment therefor in accordance with the terms hereof,
will be the legally valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms and entitled
to the benefits of the Indenture. The Series A Notes, when issued,
authenticated and delivered, will conform to the description thereof in the
Offering Memorandum.
(j) The Series B Notes have been duly and validly authorized for
issuance by the Company, and when issued and authenticated in accordance
with the terms of the Indenture, the Registration Rights Agreement and the
Exchange Offer, will be the legally valid and binding obligations of the
Company, enforceable against the Company in accordance with their terms and
entitled to the benefits of the Indenture.
(k) The grant of security interests in the Collateral pursuant to the
Pledge Agreement will create a valid, perfected first priority security
interest in the Collateral in accordance with the terms thereof and, on the
Closing Date, the Collateral will be free and clear of all liens other than
liens to which the Collateral may be subject under the terms of the Pledge
Agreement. On the Closing Date, all filings, recordings or other actions
required by the Pledge Agreement in connection with the liens (including to
perfect such liens) shall have been obtained and/or taken by the Company.
(l) The Registration Rights Agreement has been duly and validly
authorized by the Company and, when duly executed and delivered by the
Company, will be the legally valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms. The
Registration Rights Agreement, when executed and delivered, will conform to
the description thereof in the Offering Memorandum.
(m) Neither the Company nor any of its subsidiaries is in violation
of its respective articles of incorporation or certificate of limited
partnership, as the case may be, or code of regulations or limited
partnership agreement, as the case may be, or is in default in the
performance of any bond, debenture, note, indenture, mortgage, deed of
trust or other agreement or instrument to which it is a party or by which
it is bound or to which any
8
of its properties is subject, or is in violation of any law, statute, rule,
regulation, judgment or court decree applicable to the Company, any of its
subsidiaries or their assets or properties. There exists no condition
that, with notice, the passage of time or otherwise, would constitute a
default under any such document or instrument.
(n) The execution, delivery and performance by the Company of this
Agreement and the other Operative Documents to which it is a party, the
issuance and sale of the Notes, and the consummation of the transactions
contemplated hereby and thereby will not violate, conflict with or
constitute a breach of any of the terms or provisions of, or a default
under (or an event that with notice or the lapse of time, or both, would
constitute a default), or require consent under, or result in the
imposition of a lien or encumbrance on any properties of the Company or any
of its subsidiaries, or an acceleration of indebtedness pursuant to, (i)
the articles of incorporation or certificate of limited partnership, as the
case may be, or code of regulations or limited partnership agreement, as
the case may be, of the Company or any of its subsidiaries, (ii) any bond,
debenture, note, indenture, mortgage, deed of trust or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which any of them or their property is or may be bound, (iii) any statute,
rule or regulation applicable to the Company, any of its subsidiaries or
any of their assets or properties, or (iv) any judgment, order or decree of
any court or governmental agency or authority having jurisdiction over the
Company, any of its subsidiaries or their assets or properties. No
consent, approval, authorization or order of, or filing, registration,
qualification, license or permit of or with, any court or governmental
agency, body or administrative agency is required for the execution,
delivery and performance of this Agreement and the other Operative
Documents and the consummation of the transactions contemplated hereby and
thereby, except such as have been obtained and made (or, in the case of the
Registration Rights Agreement, will be obtained and made) under the
Securities Act, the Trust Indenture Act, and state securities or Blue Sky
laws and regulations or such as may be required by the NASD. No consents
or waivers from any other person are required for the execution, delivery
and performance of this Agreement and the other Operative Documents and the
consummation of the transactions contemplated hereby and thereby, other
than such consents and waivers as have been obtained (or, in the case of
the Registration Rights Agreement, will be obtained).
(o) There is (i) no action, suit or proceeding before or by any
court, arbitrator or governmental agency, body or official, domestic or
foreign, now pending or threatened or contemplated to which the Company or
any of its subsidiaries is or may be a party or to which the business or
property of the Company or any of its subsidiaries is or may be subject,
(ii) no statute, rule, regulation, or order that has been enacted, adopted
or issued by any governmental agency or that has been proposed by any
governmental body, (iii) no injunction, restraining order or order of any
nature by a federal or state court or foreign court of competent
jurisdiction to which the Company or any of its subsidiaries is or may be
subject issued that, in the case of clauses (i), (ii) and (iii) above, (x)
might, singly or in the aggregate, result in a material adverse effect on
the properties, business, results of operations, condition (financial or
otherwise), affairs or prospects of the Company and its subsidiaries, taken
as a whole (a "MATERIAL ADVERSE EFFECT"), (y) would interfere with or
adversely affect the issuance of the Notes or (z) in any manner draw into
question the
9
validity of this Agreement, the Indenture, the Pledge Agreement, the
Registration Rights Agreement or any other Operative Document.
(p) No action has been taken and no statute, rule or regulation or
order has been enacted, adopted or issued by any governmental agency that
prevents the issuance of the Notes; no injunction, restraining order or
order of any nature by a federal or state court of competent jurisdiction
has been issued that prevents the issuance of the Notes or suspends the
sale of the Notes in any jurisdiction referred to in Section 5(e) hereof;
and no action, suit or proceeding is pending against or affecting or, to
the best knowledge of the Company and any of its subsidiaries, threatened
against, the Company or any of its subsidiaries before any court or
arbitrator or any governmental body, agency or official which, if adversely
determined, would prohibit, interfere with or adversely affect the issuance
or marketability of the Notes or in any manner draw into question the
validity of any Operative Document; and every request of any securities
authority or agency of any jurisdiction for additional information has been
complied with in all material respects.
(q) There is (i) no significant unfair labor practice complaint
pending against the Company or any of its subsidiaries nor, to the best
knowledge of the Company and its subsidiaries, threatened against any of
them, before the National Labor Relations Board, any state or local labor
relations board or any foreign labor relations board, and no significant
grievance or significant arbitration proceeding arising out of or under any
collective bargaining agreement is so pending against the Company or any or
its subsidiaries or, to the best knowledge of the Company and its
subsidiaries, threatened against any of them, (ii) no significant strike,
labor dispute slowdown or stoppage pending against the Company or any of
its subsidiaries nor, to the best knowledge of the Company and its
subsidiaries, threatened against the Company or any of its subsidiaries and
(iii) to the best knowledge of the Company and its subsidiaries, no union
representation question existing with respect to the employees of the
Company and its subsidiaries and, to the best knowledge of the Company and
its subsidiaries, no union organizing activities are taking place. Neither
the Company nor any of its subsidiaries has violated any federal, state or
local law or foreign law relating to discrimination in hiring, promotion or
pay of employees, nor any applicable wage or hour laws, nor any provision
of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or the rules and regulations thereunder, which might result in a
Material Adverse Effect.
(r) In the ordinary course of its business, each of the Company and
its subsidiaries conducts periodic reviews of the effect of Environmental
Laws (as defined herein) and the handling, storage, transport, treatment
and disposal of Hazardous Materials (as defined herein) on the business,
operations and properties of the Company and its subsidiaries, in the
course of which it identifies and evaluates associated costs and
liabilities (including, without limitation, all capital and operating
expenditures required for response and corrective actions, closure of
properties and compliance with Environmental Laws, all permits, licenses
and approvals, all related constraints on operating activities and all
potential liabilities to third parties). On the basis of such reviews, the
Company has reasonably concluded that such associated costs and liabilities
would not have a Material Adverse Effect other than as disclosed in the
Offering Memorandum. Neither the Company
10
nor any of its subsidiaries has violated any Environmental Law applicable
to it or its business or property, or is subject to any liability under any
Environmental Law, lacks any permit, license or other approval required of
them under applicable Environmental Laws or is violating any Environmental
Law or term or condition of such permit, license or approval which might
have a Material Adverse Effect, in each case, other than as disclosed in
the Offering Memorandum. For the purposes of this Agreement,
"ENVIRONMENTAL LAWS" shall mean any federal, state and local laws, rules or
regulations, any orders, decrees, judgments or injunctions and the common
law relating to pollution or protection of human health, safety or the
environment, including, without limitation, ambient air, indoor air, soil,
surface water, ground water, wetlands, land or subsurface strata,
including, without limitation, those relating to releases or threatened
releases of Hazardous Materials into the environment, or otherwise relating
to the manufacture, processing, generation, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous Materials. For the
purposes of this Agreement, "HAZARDOUS MATERIAL" shall mean any pollutant,
contaminant, toxic, hazardous or extremely hazardous substance, constituent
or waste, or any other constituent, waste, material, compound or substance,
including, without limitation, petroleum including crude oil and any
fraction thereof, or any petroleum product, subject to regulation under any
Environmental Law.
(s) Each of the Company and its subsidiaries has (i) good and
marketable title to all of the properties and assets described in the
Offering Memorandum as owned by it, free and clear of all liens, charges,
encumbrances and restrictions, except such as are described in the Offering
Memorandum or as would not have a Material Adverse Effect, (ii) peaceful
and undisturbed possession under all leases to which it is party as lessee,
(iii) all licenses, certificates, permits, authorizations, approvals,
franchises and other rights from, and has made all declarations and filings
with, all federal, state and local authorities, all self-regulatory
authorities and all courts and other tribunals (each an "AUTHORIZATION")
necessary to engage in the business currently conducted by it in the manner
described in the Offering Memorandum, except where failure to hold such
Authorizations would not have a Material Adverse Effect and (iv) no reason
to believe that any governmental body or agency is considering limiting,
suspending or revoking any such Authorization. All such Authorizations are
valid and in full force and effect and the Company and its subsidiaries are
in compliance in all material respects with the terms and conditions of all
such Authorizations and with the rules and regulations of the regulatory
authorities having jurisdiction with respect thereto. All leases to which
the Company or any of its subsidiaries is a party are valid and binding and
no default by the Company or any of its subsidiaries has occurred and is
continuing thereunder, and no material defaults by the landlord are
existing under any such lease.
(t) All tax returns required to be filed by the Company or any of its
subsidiaries, in all jurisdictions, have been so filed. All taxes,
including withholding taxes, penalties and interest, assessments, fees and
other charges due or claimed to be due from such entities or that are due
and payable have been paid, other than those being contested in good faith
and for which adequate reserves have been provided or those currently
payable without penalty or interest. Neither the Company nor any of its
subsidiaries knows of any material proposed additional tax assessments
against it or any of its subsidiaries.
11
(u) Neither the Company nor any of its subsidiaries is (i) an
"investment company" or a company "controlled" by an "investment company"
within the meaning of the Investment Company Act of 1940, as amended (the
"INVESTMENT COMPANY ACT"), or analogous foreign laws and regulations, or
(ii) a "holding company" or a "subsidiary company" or an "affiliate" of a
holding company within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
(v) There are no holders of securities of the Company who, by reason
of the execution by the Company of this Agreement or any other Operative
Document to which it is a party or the consummation of the transactions
contemplated hereby and thereby, have the right to request or demand that
the Company register under the Securities Act or analogous foreign laws and
regulations securities held by them.
(w) The authorized, issued and outstanding capital stock of the
Company has been duly and validly authorized and issued, is fully paid and
nonassessable and was not issued in violation of or subject to any
preemptive or similar rights. The Company and its subsidiaries had at
October 31, 1997, assuming the Company was in existence on such date, an
authorized and outstanding capitalization as set forth in the Offering
Memorandum.
(x) Each certificate signed by any officer of the Company and
delivered to the Initial Purchaser or counsel for the Initial Purchaser
shall be deemed to be a representation and warranty by the Company to the
Initial Purchaser as to the matters covered thereby.
(y) The Company and each of its subsidiaries maintains a system of
internal accounting controls sufficient to provide reasonable assurance
that: (i) transactions are executed in accordance with management's general
or specific authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for assets;
(iii) access to assets is permitted only in accordance with management's
general or specific authorization and (iv) the recorded accountability for
assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect thereto.
(z) The Company and each of its subsidiaries maintains insurance
covering their properties, operations, personnel and businesses. Such
insurance insures against such losses and risks as are adequate in
accordance with customary industry practice to protect the Company and its
subsidiaries and their businesses. Neither the Company nor any of its
subsidiaries has received notice from any insurer or agent of such insurer
that substantial capital improvements or other expenditures will have to be
made in order to continue such insurance. All such insurance is
outstanding and duly in force on the date hereof and will be outstanding
and duly in force on the Closing Date.
(aa) Neither the Company nor any of its subsidiaries has (i) taken,
directly or indirectly, any action designed to, or that might reasonably be
expected to, cause or result in stabilization or manipulation of the price
of any security of the Company or any of its subsidiaries to facilitate the
sale or resale of the Notes or (ii) since the date of the Preliminary
Offering Memorandum (A) sold, bid for, purchased or paid any person any
12
compensation for soliciting purchases of, the Notes or (B) paid or agreed
to pay to any person any compensation for soliciting another to purchase
any other securities of the Company or any of its subsidiaries.
(bb) No registration under the Securities Act of the Series A Notes is
required for the sale of the Series A Notes to the Initial Purchaser as
contemplated hereby or for the Exempt Resales assuming (i) that the
purchasers who buy the Series A Notes in the Exempt Resales are either QIBs
or Regulation S Purchasers and (ii) the accuracy of the Initial Purchaser's
representations regarding the absence of general solicitation in connection
with the sale of Series A Notes to the Initial Purchaser and the Exempt
Resales contained herein. No form of general solicitation or general
advertising was used by the Company or any of its representatives in
connection with the offer and sale of any of the Series A Notes or in
connection with Exempt Resales, 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 Series A Notes
have been issued and sold by the Company within the six-month period
immediately prior to the date hereof.
(cc) Set forth on Exhibit B hereto is a list of each employee pension
or benefit plan with respect to which the Company or any corporation
considered an affiliate of the Company within the meaning of Section
407(d)(7) of ERISA (an "AFFILIATE") is a party in interest or disqualified
person. The execution and delivery of this Agreement, the other Operative
Documents and the sale of the Series A Notes to be purchased by the
Eligible Purchasers will not involve any prohibited transaction within the
meaning of Section 406 of ERISA or Section 4975 of the Internal Revenue
Code of 1986, as amended. The representation made by the Company in the
preceding sentence is made in reliance upon and subject to the accuracy of,
and compliance with, the representations and covenants made or deemed made
by the Eligible Purchasers as set forth in the Offering Memorandum under
the Section entitled "Notice to Investors."
(dd) Subsequent to the respective dates as of which information is
given in the Offering Memorandum and up to the Closing Date, except as set
forth in the Offering Memorandum, neither the Company nor any of its
subsidiaries has incurred any liabilities or obligations, direct or
contingent, which are material to the Company and its subsidiaries taken as
a whole, nor entered into any transaction not in the ordinary course of
business, there has not been, singly or in the aggregate, any material
adverse change, or any development which may reasonably be expected to
involve a material adverse change, in the properties, business, results of
operations, condition (financial or otherwise), affairs or prospects of the
Company and its subsidiaries, taken as a whole (a "MATERIAL ADVERSE
CHANGE") and there have not been dividends or distributions of any kind
(except the dividend paid by WCI Steel, Inc. ("WCI") on January 28, 1998)
declared, paid or made by the Company or any of its subsidiaries on any
class of its capital stock.
(ee) Neither the Company nor any agent thereof acting on the behalf of
the Company has taken, and the Company will not take, any action that might
cause this
13
Agreement or the issuance or sale of the 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 or analogous foreign laws and
regulations.
(ff) The accountants who have certified or shall certify the financial
statements and supporting schedules included or to be included as part of
the Offering Memorandum are independent accountants. The balance sheet of
the Company fairly presents the financial condition of the Company, and the
consolidated historical statements of WCI fairly present the consolidated
financial condition and results of operations of WCI and its subsidiaries,
at the respective dates and for the respective periods indicated, in
accordance with generally accepted accounting principles consistently
applied throughout such periods, except as stated therein. The pro forma
data has been prepared on a basis consistent with such historical
statements, except for the pro forma adjustments specified therein, and
give effect to assumptions made on a reasonable basis and present fairly
the historical and proposed transactions contemplated by this Agreement and
the other Operative Documents. Other financial and statistical information
and data included in the Offering Memorandum, historical and pro forma, are
accurately presented and prepared on a basis consistent with such financial
statements and the books and records of the Company and its subsidiaries.
(gg) The present fair saleable value of the assets of the Company
exceeds the amount that will be required to be paid on or in respect of the
existing debts and other liabilities (including contingent liabilities) of
each such person as they become absolute and matured. The assets of the
Company do not constitute unreasonably small capital to carry out its
businesses as conducted or as proposed to be conducted. The Company does
not intend to, nor does it believe that it will, incur debts beyond its
ability to pay such debts as they mature. Upon the issuance of the Series
A Notes, the present fair saleable value of the assets of the Company will
exceed the amount that will be required to be paid on or in respect of the
existing debts and other liabilities (including contingent liabilities) of
the Company as they become absolute and matured. The assets of the
Company, upon the issuance of the Series A Notes, will not constitute
unreasonably small capital to carry out its businesses as now conducted,
including the capital needs of the Company, taking into account the
projected capital requirements and capital availability of the Company.
(hh) There are no contracts, agreements or understandings between the
Company or any of its subsidiaries and any person that would give rise to a
valid claim against the Company, its subsidiaries or the Initial Purchaser
for a brokerage commission, finder's fee or like payment in connection with
the issuance, purchase and sale of the Notes.
The Company acknowledges that the Initial Purchaser and, for the purposes
of the opinions to be delivered to the Initial Purchaser pursuant to Section 9
hereof, counsel to the Company and counsel to the Initial Purchaser will rely
upon the accuracy and truth of the foregoing representations and hereby consent
to such reliance.
7. INITIAL PURCHASER'S REPRESENTATIONS AND WARRANTIES. The Initial
Purchaser represents and warrants to, and agrees with, the Company that:
14
(a) It is a QIB, with such knowledge and experience in financial and
business matters as are necessary in order to evaluate the merits and risks of
an investment in the Series A Notes.
(b) It (A) is not acquiring the Series A Notes with a view to any
distribution thereof that would violate the Securities 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 Series A Notes only to QIBs in reliance
on the exemption from the registration requirements of the Securities Act
provided by Rule 144A and in offshore transactions in compliance with Regulation
S under the Securities Act.
(c) No form of general solicitation or general advertising has been or
will be used by it or any of its representatives in connection with the offer
and sale of any of the Series A Notes, 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) It agrees that, in connection with the Exempt Resales, it will solicit
offers to buy the Series A Notes only from, and will offer to sell the Series A
Notes only to, QIBs and Regulation S Purchasers in offshore transactions in
compliance with Regulation S under the Securities Act. It further agrees (A)
that it will offer to sell the Series A Notes only to, and will solicit offers
to buy the Series A Notes only from, (1) QIBs who in purchasing such Series A
Notes will be deemed to have represented and agreed that they are purchasing the
Series A Notes for their own account or accounts with respect to which they
exercise sole investment discretion and that they or such accounts are QIBs and
(2) Regulation S Purchasers in offshore transactions in compliance with
Regulation S under the Securities Act and (B) that, in the case of such QIBs and
Regulation S Purchasers, acknowledges and agrees that such Series A Notes will
not have been registered under the Securities Act and may be resold, pledged or
otherwise transferred only (x)(I) to a person who the seller reasonably believes
is a QIB in a transaction meeting the requirements of Rule 144A, (II) in a
transaction meeting the requirements of Rule 144, (III) to a foreign person in a
transaction meeting the requirements of Rule 904 under the Securities Act or
(IV) in accordance with another exemption from the registration requirements of
the Securities Act (and based upon an opinion of counsel if the Company so
requests), (y) to the Company and (z) pursuant to an effective registration
statement under the Securities Act and, in each case, in accordance with any
applicable securities laws of any state of the United States or any other
applicable jurisdiction and (C) that the holder will, and each subsequent holder
is required to, notify any purchaser from it of the security evidenced thereby
of the resale restrictions set forth in (B) above.
(e) It will comply with the applicable provisions of Rule 144A under the
Securities Act and Regulation S under the Securities Act.
(f) It also understands that the Company and, for purposes of the opinions
to be delivered to you pursuant to Section 9 hereof, counsel to the Company and
counsel to the
15
Purchaser will rely upon the accuracy and truth of the foregoing representations
and hereby consents to such reliance.
8. INDEMNIFICATION.
(a) The Company agrees, to indemnify and hold harmless the Initial
Purchaser and its directors and its officers and each person, if any, who
controls (within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act) the Initial Purchaser, from and against any and all losses,
claims, damages, liabilities and judgments (including, without limitation, any
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) or the Preliminary Offering Memorandum
or any information provided by the Company to any prospective purchaser of
Series A Notes pursuant to Section 5(k) 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, 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 Purchaser furnished in writing to the
Company by the Initial Purchaser; provided, however, that the foregoing
indemnity agreement with respect to any Preliminary Offering Memorandum shall
not inure to the benefit of the Initial Purchaser if it failed to deliver a
Final Offering Memorandum (as then amended or supplemented, provided by the
Company to the Initial Purchaser 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, 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, if such untrue statement or omission
or alleged untrue statement or omission was cured in the Final Offering
Memorandum.
(b) The Initial Purchaser agrees to indemnify and hold harmless the
Company, and its directors and officers and each person, if any, who controls
(within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act) the Company, to the same extent as the foregoing indemnity from
the Company to the Initial Purchaser but only with reference to information
relating to the Initial Purchaser furnished in writing to the Company by the
Initial Purchaser 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 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
16
both Sections 8(a) and 8(b), the Initial Purchaser 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 Purchaser). 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 Xxxxxxxxx, Xxxxxx & Xxxxxxxx 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 (i) effected with the indemnifying
party's written consent or (ii) effected without the indemnifying party's
written consent if the settlement is entered into more than twenty business days
after the indemnifying party shall have received a request from the indemnified
party for reimbursement for the fees and expenses of counsel (in any case where
such fees and expenses are at the expense of the indemnifying party) and, prior
to the date of such settlement, the indemnifying party shall have failed to
comply with such reimbursement request. 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, on the one hand, and the Initial Purchaser, on the other hand, from the
offering of the Series A Notes or (ii) if the
17
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 relative
benefits referred to in clause 8(d)(i) above but also the relative fault of
the Company, on the one hand, and the Initial Purchaser, on the other hand,
in connection with the untrue 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, on the one hand, and the Initial Purchaser, on the other hand,
shall be deemed to be in the same proportion as the total net proceeds from
the offering of the Series A Notes (after underwriting discounts and
commissions, but before deducting expenses) received by the Company, and
the total discounts and commissions received by the Initial Purchaser bear
to the total price to investors of the Series A Notes, in each case as set
forth in the table on the cover page of the Offering Memorandum. The
relative fault of the Company, on the one hand, and the Initial Purchaser,
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 the
omission or alleged omission to state a material fact relates to
information supplied by the Company, on the one hand, or the Initial
Purchaser, 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 Initial Purchaser agree that it would not be just
and equitable if contribution pursuant to this Section 8(d) were determined
by pro rata allocation 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 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 Purchaser shall not be
required to contribute any amount in excess of the amount by which the
total discounts and commissions received by the Initial Purchaser exceeds
the amount of any damages which the Initial Purchaser has 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 Securities
Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation.
(a) 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 PURCHASER'S OBLIGATIONS. The obligations
of the Initial Purchaser to purchase the Series A Notes under this Agreement are
subject to the satisfaction of each of the following conditions:
(a) All of the representations and warranties of the Company
contained in this Agreement shall be true and correct on the date hereof
and on the Closing Date with the same force and effect as if made on and as
of the date hereof and the Closing Date, respectively. The Company shall
have performed or complied with all of the agreements herein contained and
required to be performed or complied with by it at or prior to the Closing
Date.
18
(b) The Offering Memorandum shall have been printed and copies
distributed to the Eligible Purchasers to whom the Initial Purchaser
intends to resell in Exempt Resales the Series A Notes on the Closing Date
not later than 10:00 a.m., New York City time, on the date of this
Agreement or at such later date and time as to which you may agree, and no
stop order suspending the qualification or exemption from qualification of
any of the Series A Notes in any jurisdiction referred to in Section 5(e)
shall have been issued and no proceeding for that purpose shall have been
commenced or shall be pending or threatened.
(c) No action shall have been taken and no statute, rule, regulation
or order shall have been enacted, adopted or issued by any governmental
agency which would, as of the Closing Date, prevent the issuance of any of
the Series A Notes; no action, suit or proceeding shall be pending against
or affecting or, to the knowledge of the Company, threatened against, the
Company or any of its subsidiaries before any court or arbitrator or any
governmental body, agency or official that, if adversely determined, would
prohibit, interfere with or adversely affect the issuance of the Series A
Notes or would have a Material Adverse Effect, or in any manner draw into
question the validity of any of the Operative Documents; and no stop order
preventing the use of 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 Securities Act shall have been issued.
(d) Since the dates as of which information is given in the Offering
Memorandum and other than as contemplated in the Offering Memorandum, (i)
there shall not have been any material change, or any development that is
reasonably likely to result in a material change, in the capital stock or
the long-term debt, or material increase in the short-term debt, of the
Company or any of its subsidiaries from that set forth in the Offering
Memorandum, (ii) no dividend or distribution of any kind (except the
dividend paid by WCI on January 28, 1998) shall have been declared, paid or
made by the Company or any of its subsidiaries on any class of its capital
stock, and (iii) neither the Company nor any of its subsidiaries shall have
incurred any liabilities or obligations, direct or contingent, that are
material, individually or in the aggregate, to the Company and its
subsidiaries, taken as a whole, and that are required to be disclosed on a
balance sheet in accordance with generally accepted accounting principles
and are not disclosed on the latest balance sheet included in the Offering
Memorandum. Since the date hereof and since the dates as of which
information is given in the Offering Memorandum, there shall not have been
any Material Adverse Change.
(e) You shall have received certificates, dated the Closing Date,
signed by (i) the President or Vice President and (ii) a principal
financial or accounting officer of the Company confirming, as of the
Closing Date, the matters set forth in paragraphs (a), (b), (c) and (d) of
this Section 9.
19
(f) You shall have received on the Closing Date an opinion
(satisfactory to you and your counsel), dated the Closing Date, of
Xxxxxxxxxx, Xxxxxxxxxx & Xxxx, counsel for the Company to the effect that:
(i) each of the Company and its subsidiaries is organized and
validly existing as a corporation or limited partnership, as the case
may be, in good standing under the laws of its respective jurisdiction
of incorporation or formation, as the case may be, has all requisite
power and authority to own, lease and operate its properties and to
conduct its business as it is currently being conducted and as
described in the Offering Memorandum, and is duly qualified and in
good standing as a foreign corporation or limited partnership, as the
case may be, authorized to do business in each jurisdiction in which
the ownership, leasing and operating of its property and the conduct
of its business requires such qualification, except where the failure
to be so qualified would not have a Material Adverse Effect;
(ii) the entities listed on Schedule A hereto are the only
subsidiaries, direct or indirect, of the Company. The Company owns,
directly or indirectly through other subsidiaries, 100% of the
outstanding capital stock or other securities evidencing equity
ownership of such subsidiaries, to such counsel's knowledge, free and
clear of any security interest, claim, lien, limitation on voting
rights or encumbrance; and all of such securities have been duly
authorized, validly issued, are fully paid and nonassessable and were
not issued in violation of any preemptive or similar rights. To such
counsel's knowledge, there are no outstanding subscriptions, rights,
warrants, calls, commitments of sale or options to acquire, or
instruments convertible into or exchangeable for, any such shares of
capital stock or other equity interest of such subsidiaries;
(iii) the Company has all requisite corporate power and
authority to execute, deliver and perform its obligations under this
Agreement, the Indenture, the Pledge Agreement, the Registration
Rights Agreement and the other Operative Documents to which it is a
party and to consummate the transactions contemplated hereby or
thereby, including, without limitation, with respect to the Company,
the corporate power and authority to issue, sell and deliver the Notes
as provided herein;
(iv) this Agreement has been duly and validly authorized,
executed and delivered by the Company;
(v) the Indenture has been duly and validly authorized, executed
and delivered by the Company and (assuming the due authorization,
execution and delivery thereof by the Trustee) will be the legally
valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, except (i) as such enforcement
may be limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting creditors' rights and remedies generally,
(ii) as to general principles of equity, regardless of whether
enforcement is sought in a proceeding at law or in equity, (iii) to
the extent that a waiver of rights under any
20
usury laws may be unenforceable and (iv) as rights to indemnity and
contribution may be limited by federal or state securities laws or the
public policy underlying such laws. The Indenture, when duly executed
and delivered, will conform to the description thereof in the Offering
Memorandum;
(vi) the Pledge Agreement (including, without limitation, the
creation and perfection of the liens in the Collateral) has been duly
and validly authorized, executed and delivered by the Company, and
(assuming the due authorization, execution and delivery thereof by the
Trustee) will be the legally valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms,
except (i) as such enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting
creditors' rights and remedies generally, (ii) as to general
principles of equity, regardless of whether enforcement is sought in a
proceeding at law or in equity, (iii) to the extent that a waiver of
rights under any usury laws may be unenforceable and (iv) as rights to
indemnity and contribution may be limited by federal or state
securities laws or the public policy underlying such laws. The Pledge
Agreement, when duly executed and delivered, will conform to the
description thereof in the Offering Memorandum;
(vii) the Series A Notes have been duly and validly authorized
for issuance and sale to you by the Company pursuant to this Agreement
and, when issued and authenticated in accordance with the terms of the
Indenture and delivered against payment therefor in accordance with
the terms hereof, will be the legally valid and binding obligations of
the Company, enforceable against the Company in accordance with their
terms and entitled to the benefits of the Indenture, except (i) as
such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
and remedies generally, (ii) as to general principles of equity,
regardless of whether enforcement is sought in a proceeding at law or
in equity, (iii) to the extent that a waiver of rights under any usury
laws may be unenforceable and (iv) as rights to indemnity and
contribution may be limited by federal or state securities laws or the
public policy underlying such laws. The Series A Notes, when issued,
authenticated and delivered, will conform to the description thereof
in the Offering Memorandum;
(viii) the Series B Notes have been duly and validly authorized
for issuance by the Company and, when issued and authenticated in
accordance with the terms of the Indenture, the Registration Rights
Agreement and the Exchange Offer, will be the legally valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms and entitled to the benefits of the
Indenture, except (i) as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights and remedies generally, (ii) as to general
principles of equity, regardless of whether enforcement is sought in a
proceeding at law or in equity, (iii) to the extent that a waiver of
rights under any usury laws may be unenforceable and (iv) as rights to
indemnity and contribution may be limited by federal or state
securities laws or the public policy underlying such laws;
21
(ix) the Registration Rights Agreement has been duly and validly
authorized, executed and delivered by the Company and (assuming the
due authorization, execution and delivery thereof by the Initial
Purchaser) will be the legally valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms,
except (i) as such enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting
creditors' rights and remedies generally (ii) as to general principles
of equity, regardless of whether enforcement is sought in a proceeding
at law or in equity and (iii) as rights to indemnity and contribution
may be limited by federal or state securities laws or the public
policy underlying such laws. The Registration Rights Agreement, when
duly executed and delivered, will conform to the description thereof
in the Offering Memorandum;
(x) when the Series A Notes are issued and delivered pursuant to
this Agreement, none of the Series A Notes will be of the same class
(within the meaning of Rule 144A under the Securities Act) as
securities of the Company that are listed on a national securities
exchange registered under Section 6 of the Exchange Act or that are
quoted in a United States automated inter-dealer quotation system;
(xi) no registration under the Securities Act of any of the
Series A Notes is required for the sale of the Series A Notes to you
as contemplated hereby or for the Exempt Resales assuming (i) that
each of the Eligible Purchasers is a QIB or a Regulation S Purchaser
and (ii) the accuracy of your representations regarding the absence of
general solicitation in connection with the sale of the Series A Notes
to you and the Exempt Resales contained herein;
(xii) neither the Company nor any of its subsidiaries is in
violation of its respective articles of incorporation or certificate
of limited partnership, as the case may be, or code of regulations or
limited partnership agreement, as the case may be, or, to such
counsel's knowledge, is in default in the performance of any
obligation, agreement or condition contained in any bond, debenture,
note or any other evidence of indebtedness or in any other agreement,
indenture, mortgage or deed of trust or other material agreement to
which it is a party or by which it is bound or to which any of its
properties is subject or is in violation of any law, statute, rule,
regulation, judgment or court decree applicable to the Company or its
subsidiaries and, to such counsel's knowledge, there exists no
condition that, with notice, the passage of time or otherwise, would
constitute such default under any such document or instrument, which
any such default would result in a Material Adverse Effect;
(xiii) the execution, delivery and performance by the Company of
this Agreement and the other Operative Documents to which it is a
party, the issuance and sale of the Notes, and the consummation of the
transactions contemplated hereby and thereby will not violate,
conflict with or constitute a breach of any of the terms or provisions
of, or a default under (or an event that with notice or the lapse
22
of time, or both, would constitute a default), or require consent
under, or result in the imposition of a lien or encumbrance on any
properties of the Company or any of its subsidiaries, or an
acceleration of indebtedness pursuant to, (i) the articles of
incorporation or certificate of limited partnership, as the case may
be, or code of regulations or limited partnership agreement, as the
case may be, of the Company or any of its subsidiaries, (ii) to such
counsel's knowledge, any bond, debenture, note, indenture, mortgage,
deed of trust or other agreement or instrument to which the Company or
any of its subsidiaries is a party or by which any of them or their
property is or may be bound, (iii) any statute, rule or regulation
applicable to the Company, any of its subsidiaries or their assets or
properties (except (with respect to this clause (iii)) such
violations, conflicts, breaches or defaults as could not reasonably be
expected to have a Material Adverse Effect), or (iv) to such counsel's
knowledge, any judgment, order or decree of any court or governmental
agency or authority having jurisdiction over the Company, any of its
subsidiaries or their assets or properties. To such counsel's
knowledge, no consent, approval, authorization or order of, or filing,
registration, qualification, license or permit of or with, any court
or governmental agency, body or administrative agency is required for
the execution, delivery and performance of this Agreement and the
other Operative Documents and the consummation of the transactions
contemplated hereby and thereby, except such as have been obtained and
made (or, in the case of the Registration Rights Agreement, will be
obtained and made) under the Securities Act, the Trust Indenture Act
and state securities or Blue Sky laws and regulations or such as may
be required by NASD. To such counsel's knowledge, no consents or
waivers from any other person are required for the execution, delivery
and performance of this Agreement and the other Operative Documents
and the consummation of the transactions contemplated hereby and
thereby, other than such consents and waivers as have been obtained
(or, in the case of the Registration Rights Agreement, will be
obtained);
(xiv) to such counsel's knowledge, no action has been taken and
no statute, rule or regulation or order has been enacted, adopted or
issued by any governmental agency that prevents the issuance of the
Notes; no injunction, restraining order or order of any nature by a
federal or state court of competent jurisdiction has been issued that
prevents the issuance of the Notes or suspends the sale of the Notes
in any jurisdiction referred to in Section 5(e) hereof; and no action,
suit or proceeding is pending against or affecting or, to such
counsel's knowledge, threatened against, the Company or any of its
subsidiaries before any court or arbitrator or any governmental body,
agency or official which, if adversely determined, would prohibit,
interfere with or adversely affect the issuance or marketability of
the Notes or in any manner draw into question the validity of any
Operative Document;
(xv) to such counsel's knowledge, the Company and each of its
subsidiaries has (i) good and marketable title to all of the
properties and assets described in the Offering Memorandum as owned by
it, free and clear of all liens, charges, encumbrances and
restrictions, except such as are described in the Offering Memorandum
or as would not have a Material Adverse Effect, (ii) peaceful and
23
undistributed possession under all leases to which it is party as
lessee, (iii) all Authorizations necessary to engage in the business
currently conducted by it in the manner described in the Offering
Memorandum, except where failure to hold such Authorizations would not
have a Material Adverse Effect and (iv) no reason to believe that any
governmental body or agency is considering limiting, suspending or
revoking any such Authorization. To such counsel's knowledge, all
such Authorizations are valid and in full force and effect and the
Company and its subsidiaries are in compliance in all material
respects with the terms and conditions of all such Authorizations and
with the rules and regulations of the regulatory authorities having
jurisdiction with respect thereto. To such counsel's knowledge, all
leases to which the Company or any of its subsidiaries is a party are
valid and binding and no default by the Company or any of its
subsidiaries has occurred and is continuing thereunder, and no
material defaults by the landlord are existing under any such lease;
(xvi) to such counsel's knowledge, other than as disclosed in
the Offering Memorandum, neither the Company nor any of its
subsidiaries has violated any Environmental Laws, lacks any permits,
licenses or other approvals required of them under applicable
Environmental Laws or is violating any terms and conditions of any
such permit, license or approval, nor has the Company or any of its
subsidiaries violated any federal, state or local law relating to
discrimination in the hiring, promotion or pay of employees nor any
applicable wage or hourly laws, nor any provisions of ERISA or the
rules and regulations promulgated thereunder, which in each case would
result in a Material Adverse Effect;
(xvii) neither the Company nor any of its subsidiaries is (i) an
"investment company" or a company "controlled" by an "investment
company" within the meaning of the Investment Company Act of 1940 or
analogous foreign laws and regulations, or (ii) a "holding company" or
a "subsidiary company" or an "affiliate" of a holding company within
the meaning of the Public Utility Holding Company Act of 1935, as
amended;
(xviii) prior to the consummation of the Exchange Offer or the
effectiveness of the Shelf Registration Statement, the Indenture is
not required to be qualified under the Trust Indenture Act of 1939;
(xix) the Offering Memorandum, as of its date, and each
amendment or supplement thereto, as of its date (except for the
financial statements, including the notes thereto, and supporting
schedules and other financial, statistical and accounting data
included therein or omitted therefrom, as to which no opinion need be
expressed), contains all the information specified in, and meeting the
requirements of, Rule 144A(d)(4) under the Securities Act;
(xx) The Pledge Agreement, together with the delivery of
certificates evidencing the Current Shares (as defined in the Pledge
Agreement), duly indorsed in the name of the Trustee or in blank (or
accompanied by an appropriate stock
24
power or separate document of assignment duly executed in the name of
the Trustee or in blank), to the Trustee in the State of New York,
will create in favor of the Trustee a valid and perfected security
interest therein as security for the Secured Obligations (as defined
in the Pledge Agreement). Assuming that the Trustee took delivery of
the Current Shares without notice of any adverse claim (within the
meaning of the Uniform Commercial Code as in effect in the State of
New York as of the date hereof (the "UCC")), the Trustee will acquire
its interest in the Current Shares free of any adverse claim. Our
opinion above as to the security interest of the Trustee in the
Current Shares is subject to the following:
(1) in the case of the issuance or distribution of
additional instruments in respect of the Collateral, or the
distribution of cash proceeds in respect of such Collateral and
such additional instruments, the security interests of the
Trustee in such instruments or proceeds will be perfected only if
possession of the instruments representing them or cash proceeds,
as applicable, are obtained by the Trustee in accordance with the
Pledge Agreement;
(2) in the case of non-identifiable cash proceeds and other
proceeds not referred to in clause (1) above, continuation of
perfection of such security interest is limited to the extent set
forth in Section 9-306 of the UCC;
In rendering the foregoing opinion, we have assumed that each
signature on any indorsement, stock power or assignment is genuine and
duly authorized.
(xxi) Without restrictions arising under New York law, the
Trustee shall be able to exercise the remedies for the realization of
the Collateral in its own name, as trustee, without naming the Trustee
or the holders of the Notes.
In addition, such counsel shall state that it has participated in
conferences with officers and other representatives of the Company,
representatives of the independent public accountants for the Company, your
representatives and your counsel in connection with the preparation of the
Offering Memorandum and has considered the matters required to be stated
therein and the statements contained therein and, although such counsel has
not independently verified the accuracy, completeness or fairness of such
statements (except as indicated above), such counsel advises you that, on
the basis of the foregoing, no facts came to its attention that caused it
to believe that the Offering Memorandum (as amended or supplemented, if
applicable), at the time such Offering Memorandum was circulated or at the
Closing Date, contained or contains an untrue statement of a material fact
or omitted or omits to state a material fact required to be stated therein
or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. Without limiting
the foregoing, such counsel may further state that they assume no
responsibility for, and have not independently verified, the accuracy,
completeness or fairness of the financial statements, notes and schedules
and other financial data included in the Offering Memorandum.
25
In rendering such opinion, such counsel may rely (i) as to matters of fact,
to the extent such counsel deems proper, on certificates of responsible officers
of the Company and public officials and (ii) as to matters of Ohio law and
environmental law, on an opinion or opinions of Xxxxxx, Xxxxxxx & Xxxxxxx L.L.P.
The opinions of such counsel described in this paragraph shall be rendered
to you at the request of the Company and shall so state therein.
(g) You shall have received an opinion, dated the Closing Date, of Xxxxxx
Xxxxxx & Xxxxxxx, your counsel, in form and substance reasonably satisfactory to
you, covering such matters as are customarily covered in such opinions.
(h) At the time this Agreement is executed and delivered by the Company
and on the Closing Date, you shall have received letters, substantially in the
form previously approved by you, from KPMG Peat Marwick LLP, independent
certified public accountants, with respect to the financial statements and
certain financial information contained in Offering Memorandum.
(i) The Company and the Trustee shall have entered into the Indenture and
you shall have received counterparts, conformed as executed, thereof.
(j) The Company shall have entered into the Registration Rights Agreement
and you shall have received counterparts, conformed as executed, thereof.
(k) On or before the Closing Date, the Initial Purchaser and counsel for
the Initial Purchaser shall have received an opinion from Xxxxxxxx, Xxxxx,
Xxxxxx & Xxxxx, in form and substance satisfactory to the Initial Purchaser and
counsel for the Initial Purchaser, with respect to the solvency of the Company
upon issuance of the Series A Notes and the consummation of the other
transactions contemplated in this Agreement, the other Operative Documents and
the Offering Memorandum.
(l) On or before the Closing Date, evidence satisfactory to the Initial
Purchaser shall be furnished of the completion or substantially contemporaneous
completion of all recordings and/or filings of such financing statements or
security documents or other actions as may be necessary or, in the opinion of
the Initial Purchaser, desirable to perfect the liens created, or intended to be
created, by the Pledge Agreement. All filing fees and taxes in connection with
such recording or filing shall have been paid and the Initial Purchaser shall
have received evidence satisfactory to it of such recordation, filings and
payments, including in the case of any financing statements, the secured party's
copy of all such financing statements bearing evidence of filing in each such
public office.
(m) On or before the Closing Date, the Initial Purchaser shall have
received the Pledge Agreement, duly executed by the Company and dated on or
before the Closing Date together with:
(i) acknowledgment copies of appropriate UCC-1 financing statements
or other documents under the provisions of the UCC or any other applicable
state
26
law filed in each office where such filing is necessary or appropriate
to grant to the Trustee a first priority Lien of the character
contemplated by the Pledge Agreement; and
(ii) evidence that all other actions necessary to perfect and
protect the Liens created by the Pledge Agreement have been taken.
(n) The Company shall not have failed on or prior to the Closing Date
to perform or comply with any of the agreements herein contained and
required to be performed or complied with by the Company on or prior to the
Closing Date.
(o) On or before the Closing Date, the Initial Purchaser and counsel
for the Initial Purchaser shall have received such further certificates,
documents or other information as they may have reasonably requested from
the Company.
(p) On or before the Closing Date, the Trustee shall have received
all certificates, agreements, or instruments representing or evidencing the
Collateral. All Collateral shall be in suitable form for transfer by
delivery or shall be accompanied by duly executed instruments of transfer
or assignment in blank, all in form and substance reasonably satisfactory
to the Trustee.
All opinions, certificates, letters and other documents required by
this Section 9 to be delivered by the Company will be in compliance with the
provisions hereof only if they are reasonably satisfactory in form and substance
to you. The Company will furnish the Initial Purchaser with such conformed
copies of such opinions, certificates, letters and other documents as they shall
reasonably request.
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 Purchaser 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 Purchaser's judgment, is material and adverse and, in the Initial
Purchaser's judgment, makes it impracticable to market the Series A 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 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 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
27
either federal or New York State authorities, (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 opinion has a material adverse effect on the
financial markets in the United States or (vii) any securities of the Company or
any of its subsidiaries shall have been downgraded or placed on any "watch list"
for possible downgrading by any nationally recognized statistical rating
organization.
11. MISCELLANEOUS. Notices given pursuant to any provision of this
Agreement shall be addressed as follows: (i) if to the Company, to Renco Steel
Holdings, Inc., 00 Xxxxxxxxxxx Xxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
telephone number: (000) 000-0000, Attention: Xxxxx X. Xxxxxxx, with a copy to
Cadwalader, Xxxxxxxxxx & Xxxx, 000 Xxxxxx Xxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxxxxxx X. Xxxx, Esq., c/o Managing Attorneys' Office, and (ii) if to
the Initial Purchaser, c/x Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation,
000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxx Xxxxx, with a copy
to Xxxxxx Xxxxxx & Xxxxxxx, 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000 Attention:
Xxxxxxx X. Xxxxxxxx, Esq., or in any case to such other address as the person to
be notified may have requested in writing.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Company and the Initial Purchaser 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 Series A
Notes, regardless of (i) any investigation, or statement as to the results
thereof, made by or on behalf of the Initial Purchaser, the officers or
directors of the Initial Purchaser, any person controlling the Initial
Purchaser, the Company, the officers or directors of the Company, or any person
controlling the Company, (ii) acceptance of the Series A Notes and payment for
them hereunder and (iii) termination of this Agreement.
If for any reason the Series A 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 agrees to reimburse the
Initial Purchaser 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(f) hereof.
In addition, the Company agrees to pay all the actual costs and
expenses of creating and perfecting security interests in the Collateral in
favor of the Trustee, on behalf of the Trustee, as secured parties for the
holders of the Notes, pursuant to the Pledge Agreement, including without
limitation, filing and recording fees and expenses, fees and expenses of special
and local counsel for the Company for providing such opinions as the Initial
Purchaser may reasonably request, and fees and expenses of the Trustee, the cost
and expenses of obtaining an appraisal of the Collateral as of the Closing Date,
and any appraisal of the Collateral required by the Indenture.
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Company, the Initial
Purchaser, the Initial Purchaser's directors and officers, any controlling
persons referred to herein, the directors of the Company 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
28
"successors and assigns" shall not include a purchaser of any of the Series A
Notes from the Initial Purchaser merely because of such purchase.
This Agreement shall be governed and construed in accordance with the
laws of the State of New York.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
29
Please confirm that the foregoing correctly sets forth the agreement
among the Company and the Initial Purchaser.
Very truly yours,
RENCO STEEL HOLDINGS, INC.
By: /s/ Xxxxx X. Xxx
--------------------------
Name: Xxxxx X. Xxx
Title: Vice President and Chief
Financial Officer
Accepted and agreed:
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
By:/s/Xxxxxxx X.X. Xxxxxx
--------------------------------
Name: Xxxxxxx X.X. Xxxxxx
Title: Vice President
30
SCHEDULE A
SUBSIDIARIES
------------
WCI Steel, Inc.
Niles Properties, Inc.
Youngstown Sinter Company
WCI Steel Metallurgical Services Inc.
WCI Steel Production Control Services Inc.
WCI Steel Sales L.P.
S-1
EXHIBIT A
---------
Form of Registration Rights Agreement
EXHIBIT B
---------
Employee Pension or Benefit Plan
WCI Steel, Incorporated USWA Defined Benefit Pension Plan
WCI Steel, Incorporated USWA Pension Plan
WCI Steel, Incorporated Retirement and Capital Accumulation Plan
WCI Steel, Incorporated Voluntary Employees Beneficiary Association
Youngstown Sinter Company - USWA Pension Plan
