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EXHIBIT 4.2
AMERISTEEL CORPORATION
$130,000,000
8 3/4% SENIOR NOTES DUE 2008
PURCHASE AGREEMENT
March 30, 1998
NationsBanc Xxxxxxxxxx Securities LLC
NationsBank Corporate Center
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Ladies and Gentlemen:
AmeriSteel Corporation, a Florida corporation (the "Company"), proposes
to issue and sell (the "Initial Placement") to NationsBanc Xxxxxxxxxx
Securities, LLC (the "Initial Purchaser") $130,000,000 aggregate principal
amount of its 8 3/4% Senior Notes Due 2008 (the "Notes"). The Notes are to be
fully and unconditionally guaranteed, jointly and severally, on a senior
unsecured basis (the "Subsidiary Guarantees") by all existing and future United
States subsidiaries of the Company (each such existing guarantor, a "Subsidiary
Guarantor" and collectively, the "Subsidiary Guarantors"). The Notes are to be
issued under an indenture (the "Indenture"), dated as of April 3, 1998, among
the Company, the Subsidiary Guarantors and State Street Bank and Trust Company,
as trustee (the "Trustee").
This Purchase Agreement (this "Agreement"), the Notes, the Subsidiary
Guarantees, the Indenture and the Registration Rights Agreement, dated as of
March 30, 1998, among the Company, the Subsidiary Guarantors and the Initial
Purchaser (the "Registration Rights Agreement") are herein collectively referred
to as the "Offering Documents." The Company intends to implement a refinancing
plan (the "Refinancing"), which contemplates (i) the offering of the Notes, (ii)
the sale of 454,545 shares of the Company's Class B Common Stock to one investor
for $10 million (the "Equity Investment"), (iii) the repayment of $30 million of
the Company's $50 million Subordinated Intercompany Note, (iv) the redemption of
the Company's $100,000,000 11 1/2% First Mortgage Notes due December 15, 2000
(the "First Mortgage Notes"). The Offering Documents are herein collectively
referred to as the "Refinancing Documents."
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The sale of the Notes to the Initial Purchaser will be made without
registration of the Notes under the Securities Act of 1933, as amended (the
"Securities Act"), in reliance upon exemptions from the registration
requirements of the Securities Act. You have advised the Company that you will
offer and sell the Notes purchased by you hereunder in accordance with Section 4
hereof as soon as you deem advisable. The Notes will have the benefit of the
Registration Rights Agreement.
In connection with the sale of the Notes, the Company has prepared a
preliminary offering memorandum, dated March 20, 1998 (the "Preliminary
Memorandum"), and a final offering memorandum, dated March 30, 1998 (the "Final
Memorandum"). Each of the Preliminary Memorandum and the Final Memorandum sets
forth certain information concerning the Company, the Subsidiary Guarantors and
the Notes. The Company hereby confirms that it has authorized the use of the
Preliminary Memorandum and the Final Memorandum, and any amendment or supplement
thereto, in connection with the offer and sale of the Notes by the Initial
Purchaser. Unless stated to the contrary, all references herein to the Final
Memorandum are to the Final Memorandum at the Execution Time (as defined below)
and are not meant to include any amendment or supplement subsequent to the
Execution Time.
Representations and Warranties. The Company represents and
warrants to the Initial Purchaser that:
(a) The Preliminary Memorandum, at the date thereof, did not contain
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading. The Final Memorandum, at the
date hereof, does not, and at the Closing Date (as defined below) will not
(or, if amended or supplemented, the Final Memorandum, as amended or
supplemented at the date of any such amendment or supplement and at the
Closing Date, will not), contain any untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading; provided, however, that the Company makes no representation or
warranty as to the information contained in or omitted from the Preliminary
Memorandum or the Final Memorandum, or any amendment or supplement thereto,
in reliance upon and in conformity with information furnished in writing to
the Company by or on behalf of the Initial Purchaser specifically for
inclusion therein.
(b) Neither the Company nor any "Affiliate" (as defined in Rule 501(b)
of Regulation D under the Securities Act ("Regulation D")) of the Company
or any person acting on its or their behalf (other than the Initial
Purchaser, as to which no representation is made) has, directly or
indirectly, made offers or sales of any security, or solicited offers to
buy any security, under circumstances that would require the registration
of the Notes under the Securities Act.
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(c) Neither the Company nor any of its Affiliates, nor any person
acting on its or their behalf (other than the Initial Purchaser, as to
which no representation is made), has engaged in any form of general
solicitation or general advertising (within the meaning of Regulation D) in
connection with any offer or sale of the Notes in the United States.
(d) The Notes satisfy the eligibility requirements of Rule 144A(d)(3)
under the Securities Act.
(e) The Company is not and, after giving effect to the Refinancing,
will not be an "investment company" within the meaning of the Investment
Company Act of 1940, as amended (the "Investment Company Act"), without
taking account of any exemption arising out of the number of holders of the
securities of the Company.
(f) Neither the Company nor any of its Affiliates has paid or agreed
to pay to any person any compensation for soliciting another to purchase
any securities of the Company (except as contemplated by this Agreement).
(g) It is not necessary in connection with the offer, sale and
delivery of the Notes in the manner contemplated by this Agreement and the
Final Memorandum to register any of such securities under the Securities
Act or to qualify the Indenture under the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act").
(h) The Company has been advised by the National Association of
Securities Dealers, Inc. (the "NASD") Private Offerings, Resales and
Trading through Automated Linkages market ("PORTAL") that the Notes have
been designated PORTAL eligible securities in accordance with the rules and
regulations of the NASD.
(i) The consolidated financial statements (including the notes
thereto) and schedules of the Company and AmeriSteel Finance, Inc. ("AFI")
set forth in the Final Memorandum fairly present in all material respects
the financial position, results of operations and cash flows of the Company
and AFI as of the dates and for the periods specified therein; since the
date of the latest of such financial statements, there has been no change
nor any development or event involving a prospective change which has had a
material adverse effect on (i) the business, operations, properties,
assets, liabilities, net worth, condition (financial or otherwise) or
prospects of the Company and its subsidiaries taken as a whole or (ii) the
ability of the Company to perform any of its obligations under this
Agreement, the Registration Rights Agreement, the Indenture or the Notes (a
"Material Adverse Effect"); such financial statements and schedules have
been prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved (except as otherwise
expressly noted in the Final Memorandum); the other financial and
statistical
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information and data set forth in the Final Memorandum (and any amendment
or supplement thereto) are, in all material respects, accurately presented
and prepared on a basis consistent with such financial statements, except
as otherwise stated therein; and the statistical and market-related data
included in the Final Memorandum are based on or derived from sources which
the Company believes to be reliable and accurate and are based upon
assumptions and qualifications which the Company considers reasonable and
appropriate in all material respects.
(j) The pro forma financial statements (including the notes thereto)
and the other pro forma financial information included in the Final
Memorandum have been properly computed on the bases described therein; and
the assumptions used in the preparation of the pro forma financial data and
other pro forma financial information included in the Final Memorandum are
reasonable in all material respects and the adjustments used therein are
appropriate in all material respects to give effect to the transactions or
circumstances referred to therein.
(k) Subsequent to the respective dates as of which information is
given in the Preliminary Memorandum and the Final Memorandum, (i) neither
the Company nor AFI has incurred any material liability or obligation,
direct or contingent, nor entered into any material transaction not in the
ordinary course of business; (ii) neither the Company nor AFI have
purchased any of the Company's outstanding capital stock, nor declared,
paid or otherwise made any dividend or distribution of any kind on its
capital stock (except as part of the Refinancing); and (iii) there has not
been any material change in the capital stock, short-term debt or long-term
debt of the Company or AFI except in each case as described in or
contemplated by the Preliminary Memorandum or the Final Memorandum, as the
case may be.
(l) The only subsidiary of the Company is AFI.
(m) Each of the Company and AFI has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the
jurisdiction in which it is chartered or organized with full power
(corporate and other) to own or lease its properties, conduct its business
as described in the Final Memorandum and enter into each Transaction
Document to which it is a party and carry out all the terms and provisions
of each such Transaction Document to be carried out by it; and each of the
Company and AFI is duly qualified to do business as a foreign corporation
and is in good standing under the laws of each jurisdiction which requires
such qualification wherein it owns or leases properties or conducts
business, except in such jurisdictions in which the failure to so qualify,
singly or in the aggregate, would not have a Material Adverse Effect.
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(n) The Company has the authorized, issued and outstanding
capitalization as set forth in the Final Memorandum under the caption
"Capitalization." All of the issued shares of capital stock of the Company
have been duly authorized, validly issued, fully paid and nonassessable and
were not issued in violation of any preemptive or similar rights.
(o) There are no outstanding subscriptions, rights, warrants, options,
calls, convertible securities, commitments of sale or liens related to or
entitling any person to purchase or otherwise to acquire any shares of
capital stock of, or other ownership interest in, the Company or AFI except
as otherwise disclosed in the Final Memorandum.
(p) The issued shares of capital stock of AFI have been duly
authorized and validly issued, are fully paid and nonassessable and, except
for directors' qualifying shares and except as otherwise set forth in the
Final Memorandum are owned of record and beneficially by the Company,
either directly or through wholly owned subsidiaries, free and clear of any
pledge, lien, encumbrance, security interest, restriction on voting or
transfer, preemptive rights or claim of any third party. AFI is not
prohibited, directly or indirectly, from paying any dividends to the
Company, from making any other distribution on its capital stock, from
repaying to the Company any loans or advances to AFI from the Company or
from transferring any of AFI's property or assets to the Company, except as
described in or contemplated by the Final Memorandum.
(q) Neither the Company nor AFI is (i) in violation of its corporate
charter or bylaws, (ii) in breach or violation of any law, ordinance,
governmental or administrative rule or regulation or court decree or (iii)
in default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which it is a party or by
which its properties may be bound and which, in the case of (ii) or (iii),
would have a Material Adverse Effect.
(r) The issuance, offering and sale of the Notes to the Initial
Purchaser pursuant to this Agreement, the delivery of the Notes under this
Agreement, the compliance by the Company and the Subsidiary Guarantors, the
consummation of the other transactions herein and therein contemplated and
the consummation of the other transactions contemplated hereby and in the
Final Memorandum, including the Refinancing, do not (i) require the
consent, approval, authorization, order, registration or qualification of
or with any governmental authority or court, except (A) such as may be
required under state securities or blue sky laws, (B) the Company's
Registration Statement (No. 333-37679) on Form S-1, or (C) such as may be
contemplated by the Registration Rights Agreement or (ii) conflict with,
result in a breach or violation of, or constitute a default under, or
result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or AFI pursuant to,
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any material contract, loan agreement, note, indenture, mortgage, deed of
trust, lease or other agreement or instrument to which the Company or AFI
is a party, or by which the Company, AFI or any of its respective
properties is bound, or the charter or by-laws of the Company or AFI or any
statute, rule or regulation or any judgment, order or decree of any
governmental authority or court or arbitrator applicable to the Company or
AFI, except as rights to indemnity and contribution may be limited by
federal or state securities laws or public policy.
(s) No legal or governmental proceedings or investigations are pending
to which the Company or AFI is a party or to which the property of the
Company or AFI is subject that are not described in the Final Memorandum,
and no such proceedings or investigations, to the best knowledge of the
Company, have been threatened against the Company or AFI, or with respect
to any of their properties, except in each case for such proceedings or
investigations that, singly or in the aggregate, are not reasonably likely
to result in a Material Adverse Effect.
(t) Each of the Company and AFI has valid title in fee simple to all
items of real property and title to all personal property owned by each of
them, in each case free and clear of any pledge, lien, encumbrance,
security interest or other defect or claim of any third party, except (i)
such as do not materially and adversely affect the value of such property
and do not interfere with the use made or proposed to be made of such
property by the Company or such subsidiary to an extent that such
interference would have a Material Adverse Effect, and (ii) liens securing
Indebtedness referred to in the Final Memorandum. Any real property and
buildings held under lease by the Company or AFI are held under valid,
subsisting and enforceable leases, with such exceptions as do not
materially interfere with the use made or proposed to be made of such
property and buildings by the Company or AFI.
(u) This Agreement has been duly authorized, executed and delivered by
the Company.
(v) The Registration Rights Agreement, the Indenture and each of the
Refinancing Documents have been duly authorized by all necessary corporate
actions of the Company and, when duly executed and delivered by the Company
(and AFI, as applicable) and the other parties thereto, constitute legal,
valid and binding obligations of the Company, enforceable against the
Company in accordance with their terms, except as the same may be limited
by (i) applicable bankruptcy, insolvency, reorganization, moratorium or
other laws affecting creditors' rights generally, including without
limitation the effect of statutory or other laws regarding fraudulent
conveyances or transfers or preferential transfers, or (ii) general
principles of equity, whether considered at law or at equity, and except as
rights to indemnity and contribution in the Registration Rights Agreement
may be limited by federal or state securities laws or public policy.
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(w) The Notes have been duly authorized by all necessary corporate
action for issuance and sale pursuant to this Agreement and, when executed,
authenticated, issued and delivered in the manner provided for in the
Indenture and sold and paid for as provided in this Agreement, the Notes
will constitute legal, valid and binding obligations of the Company and the
Subsidiary Guarantors entitled to the benefits of the Indenture and
enforceable against the Company and the Subsidiary Guarantors in accordance
with their terms, except as the same may be limited by (i) applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors' rights generally, including without limitation the effect of
statutory or other laws regarding fraudulent conveyances or transfers or
preferential transfers or (ii) general principles of equity, whether
considered at law or at equity.
(x) Xxxxxx Xxxxxxxx LLP ("Xxxxxx Xxxxxxxx"), who has audited certain
financial statements of the Company and AFI and delivered their reports
with respect to the audited financial statements of the Company in the
Final Memorandum, are independent certified public accountants within the
meaning of the American Institute of Certified Public Accountants Code of
Professional Conduct (the "AICPA") and the applicable rules and regulations
thereunder.
(y) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances 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 asset accountability; (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 to any differences.
(z) Neither the Company nor AFI is now or, after giving effect to the
issuance of the Notes and the consummation of the transactions contemplated
by the Final Memorandum, including the Refinancing, will be (i) insolvent,
(ii) left with unreasonably small capital with which to engage in its
anticipated businesses or (iii) incurring debts beyond its ability to pay
such debts as they become due.
(aa) The Company and AFI own or otherwise possess the right to use all
patents, trademarks, service marks, trade names and copyrights, all
applications and registrations for each of the foregoing, and all other
proprietary rights and confidential information used in the conduct of
their respective businesses as currently conducted, except to the extent
the absence thereof would not have a Material Adverse Effect; and neither
the Company nor AFI has received any notice, or is otherwise aware, of any
infringement of or conflict with the rights
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of any third party with respect to any of the foregoing which, singly or in
the aggregate, is reasonably likely to result in a Material Adverse Effect.
(bb) The Company and AFI are insured by insurers of recognized
financial responsibility (or by appropriate self-insurance) against such
losses and risks and in such amounts as are prudent and customary in the
businesses and in the locations in or at which they are engaged; and
neither the Company nor AFI has any reason to believe that it will not be
able to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be
necessary to continue its business at a cost that would not have a Material
Adverse Effect.
(cc) ERISA:
(i) Definitions:
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations
promulgated and rulings issued thereunder.
"ERISA Affiliate" means any trade or business (whether or
not incorporated) that for purposes of Title IV of ERISA is a
member of the controlled group of the Company, or under common
control with the Company, within the meaning of Section 414 of
the Internal Revenue Code.
"ERISA Event" means (a)(i) the occurrence of a reportable
event, within the meaning of Section 4043 of ERISA, with respect
to any Plan unless the 30-day notice requirement with respect to
such event has been waived by the PBGC, or (ii) the requirements
of subsection (1) of Section 4043(b) of ERISA are met with
respect to a contributing sponsor, as defined in Section
4001(a)(13) of ERISA, of a Plan, and an event described in
paragraph (9), (10), (11), (12) or (13) of Section 4043(c) of
ERISA is reasonably expected to occur with respect to such Plan
within the following 30 days; (b) the application for a minimum
funding waiver with respect to a Plan; (c) the provision by the
administrator of any Plan of a notice of intent to terminate such
Plan, pursuant to Section 4041(a)(2) of ERISA (including any such
notice with respect to a plan amendment referred to in Section
4041(e) of ERISA); (d) the cessation of operations at a facility
of the Company or any ERISA Affiliate in the circumstances
described in Section 4062(e) of ERISA; (e) the withdrawal by the
Company or any ERISA Affiliate from a Multiple Employer Plan
during a plan year for which it was a substantial employer, as
defined in Section 4001(a)(2) of ERISA; (f) the conditions for
imposition of a lien under
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Section 302(f) of ERISA shall have been met with respect to any
Plan; (g) the adoption of an amendment to a Plan requiring the
provision of security to such Plan pursuant to Section 307 of
ERISA; or (h) the institution by the PBGC of proceedings to
terminate a Plan pursuant to Section 4042 of ERISA, or the
occurrence of any event or condition described in Section 4042 of
ERISA that constitutes grounds for the termination of, or the
appointment of a trustee to administer, such Plan.
"Multiemployer Plan" means a multiemployer plan, as defined
in Section 4001(a)(3) of ERISA, to which the Company or any ERISA
Affiliate is making or accruing an obligation to make
contributions, or has within any of the preceding five plan years
made or accrued an obligation to make contributions.
"Multiple Employer Plan" means a single employer plan, as
defined in Section 4001(a)(15) of ERISA, that (a) is maintained
for employees of the Company or any ERISA Affiliate and at least
one trade or business (whether or not incorporated) other than
the Company and the ERISA Affiliates or (b) was so maintained and
in respect of which the Company or any ERISA Affiliate could have
liability under Section 4064 or 4069 of ERISA in the event such
plan has been or were to be terminated.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Plan" means a Single Employer Plan or a Multiple Employer
Plan. "Single Employer Plan" means a single employer plan, as
defined in Section 4001(a)(15) of ERISA, that (a) is maintained
for employees of the Company or any ERISA Affiliate and no trade
or business (whether or not incorporated) other than the Company
and the ERISA Affiliates or (b) was so maintained and in respect
of which the Company or any ERISA Affiliate could have liability
under Section 4069 of ERISA in the event such plan has been or
were to be terminated.
"Underfunding" means, with respect to any Plan, the excess,
if any, of the "projected benefit obligations" (within the
meaning of Statement of Financial Accounting Standards 87) under
such Plan (determined using the actuarial assumptions used for
purposes of calculating funding requirements in the most recent
actuarial report for such plan) over the fair market value of the
assets held under the Plan.
"Withdrawal Liability" has the meaning specified in Part I
of Subtitle E of Title IV of ERISA.
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(ii) No ERISA Event has occurred or is reasonably expected to
occur with respect to any Plan.
(iii) The aggregate Underfunding with respect to all Plans which
have any Underfunding does not exceed $100,000.
(iv) Neither the Company nor any ERISA Affiliate has incurred
or is reasonably expected to incur any Withdrawal Liability.
(v) Neither the Company nor any ERISA Affiliate has been
notified by the sponsor of a Multiemployer Plan that such
Multiemployer Plan is in reorganization or has been terminated, within
the meaning of Title IV of ERISA, and no such Multiemployer Plan is
reasonably expected to be in reorganization or to be terminated,
within the meaning of Title IV of ERISA.
(dd) There is (i) no unfair labor practice complaint pending against
the Company or AFI or, to the best knowledge of the Company, threatened
against either of them, before the National Labor Relations Board or any
state or local labor relations board, and no significant grievance or more
significant arbitration proceeding arising out of or under any collective
bargaining agreement is so pending against the Company or AFI or, to the
best knowledge of the Company, threatened against either of them and (ii)
no significant strike, labor dispute, slowdown or stoppage pending against
the Company or AFI or, to the best knowledge of the Company, threatened
against it or AFI which is likely to result in a Material Adverse Effect.
(ee) The Company and AFI have filed all foreign, federal, state and
local tax returns that are required to be filed, except insofar as the
failure to file such returns, singly or in the aggregate, would not have a
Material Adverse Effect, or have requested extensions thereof and in each
case have paid all taxes required to be paid by it and any other
assessment, fine or penalty levied against it, to the extent that any of
the foregoing is due and payable, other than those being contested in good
faith and for which adequate reserves have been provided or those currently
payable without penalty or interest.
(ff) Neither of the Company nor any Affiliate of the Company has
taken, directly or indirectly, any action designed to cause or result in,
or which has constituted or which might reasonably be expected to cause or
result in, stabilization or manipulation (as such terms are defined under
the Exchange Act) of the price of any security of the Company to facilitate
the sale or resale of the Notes.
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(gg) Except as disclosed in the Final Memorandum, and except as would
not individually or in the aggregate have a Material Adverse Effect (i) the
Company and AFI are in compliance with all applicable Environmental Laws
(as defined below), (ii) the Company and AFI have all permits,
authorizations and approvals required under any applicable Environmental
Laws and are in compliance with their requirements, (iii) there are no
pending or, to the best knowledge of the Company, threatened Environmental
Claims (as defined below) against the Company or AFI and (iv) the Company
and AFI do not have knowledge of any circumstances with respect to any of
their properties or operations that could reasonably be anticipated to form
the basis of an Environmental Claim against the Company or AFI or any of
their properties or operations and the business operations relating thereto
that would have a Material Adverse Effect. For purposes of this Agreement,
the following terms shall have the following meanings: "Environmental Law"
means, with respect to any person, any federal, state, local or municipal
statute, law, rule, regulation, ordinance, code, policy or rule of common
law and any published judicial or administrative interpretation thereof
including any judicial or administrative order, consent decree or judgment
binding on such person or any of its subsidiaries, relating to the
environment, health, safety or any chemical, material or substance,
exposure to which is prohibited, limited or regulated by any such
governmental authority. "Environmental Claims" means any and all
administrative, regulatory or judicial actions, suits, demands, demand
letters, claims, liens, notices of noncompliance or violation,
investigations or proceedings relating in any way to any Environmental Law.
(hh) The Company has reasonably concluded that any and all costs and
liabilities incurred or reasonably expected to be incurred pursuant to any
Environmental Law (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance
with Environmental Laws or any permit, license or approval, any related
constraints on operating activities and potential liabilities to third
parties) would not, singly or in the aggregate, have a Material Adverse
Effect.
(ii) Each certificate signed by any officer of the Company and
delivered to the Initial Purchaser or its counsel shall be deemed to be a
representation and warranty by the Company to the Initial Purchaser as to
the matters covered thereby.
(jj) Except as stated in the Final Memorandum, neither the Company nor
AFI knows of any outstanding claims against it for services, either in the
nature of a finder's fee, financial advisory fee, origination fee or
similar fee, with respect to the transactions contemplated by the
Refinancing Documents.
(kk) The Note Guarantees by the subsidiaries have been duly authorized
by each of the Subsidiary Guarantors, and, when executed and authenticated
in accordance with the provisions of the Indenture, will conform in all
material respects to the description thereof in the Final Memorandum, will
be valid and binding obligations of each of the Subsidiary
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Guarantors, will be entitled to the benefits of the Indenture and will be
enforceable in accordance with their terms, except as the same may be
limited by (i) applicable bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors' rights generally, including
without limitation the effect of statutory or other laws regarding
fraudulent conveyances or transfers or preferential transfers or (ii)
general principles of equity, whether considered at law or at equity.
(ll) The sale of the Notes to the Initial Purchaser does not
constitute a "prohibited transaction" (as defined in the Employee
Retirement Income Security Act of 1974, as amended).
2. Purchase and Sale. Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the Company
agrees to sell to the Initial Purchaser, and the Initial Purchaser agrees to
purchase from the Company at a purchase price of 97.875% of the principal amount
thereof, plus accrued interest, if any, from March 30, 1998 to the Closing Date,
the principal amount of Notes set forth opposite the Initial Purchaser's name in
Schedule I attached here.
3. Delivery and Payment. Delivery of and payment for the Notes
shall be made at 10:00 a.m. New York City time, on April 3, 1998, or such later
date as the Initial Purchaser shall designate, which date and time may be
postponed by agreement between the Initial Purchaser and the Company (such date
and time of delivery and payment for the Notes being herein called the "Closing
Date"). Delivery of the Notes shall be made to the Initial Purchaser against
payment by the Initial Purchaser of the purchase price thereof to or upon the
order of the Company in immediately available funds or such other manner of
payment as may be agreed by the Company and the Initial Purchaser. Delivery of
the Notes shall be made at such location as the Initial Purchaser shall
reasonably designate at least one business day in advance of the Closing Date
and payment for the Notes shall be made at the offices of Shearman & Sterling
("Counsel for the Initial Purchaser"), 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx,
with any transfer taxes payable in connection with the transfer of the Notes
fully paid, against payment of the purchase price therefor. Certificates for the
Notes shall be registered in such names and in such denominations as the Initial
Purchaser may request not less than two full business days in advance of the
Closing Date.
The Company agrees to have the Notes available for inspection,
checking and packaging by the Initial Purchaser in New York, New York, not later
than 1:00 p.m. on the business day prior to the Closing Date.
4. Offering of Notes by The Initial Purchaser. The Initial
Purchaser represents and warrants to and agrees with the Company that:
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(a) It has not offered or sold, and will not offer or sell, any Notes
except to those it reasonably believes to be (i) "qualified institutional
buyers" (as defined in Rule 144A under the Securities Act) and that, in
connection with each such sale, it has taken or will take reasonable steps to
ensure that the purchaser of such Notes is aware that such sale is being made in
reliance on Rule 144A, (ii) other institutional "accredited investors" (as
defined in Rule 501(a) (1), (2), (3) or (7) of Regulation D) that, prior to
their purchase of the Notes, deliver to the Initial Purchaser a letter
containing the representations and agreements set forth in the form of Annex A
to the Final Memorandum or (iii) non-U.S. persons outside the United States to
whom offers and sales of the Notes may be made in reliance on Regulation S under
the Securities Act.
(b) Neither it nor any person acting on its behalf has made or will make
offers or sales of the Notes in the United States by means of any form of
general solicitation or general advertising (within the meaning of Regulation D)
in the United States.
(c) The Notes offered and sold by the Initial Purchaser hereto in reliance
on Regulation S have been and will be offered and sold only in offshore
transactions, and the sale of such Notes in reliance on Regulation S is not part
of a plan or scheme to avoid the registration provisions of the Act.
(d) The Initial Purchaser's acquisition of the Notes does not constitute a
"prohibited transaction" (as defined in the Employee Retirement Income Security
Act of 1974, as amended).
5. Agreements. The Company agrees with the Initial Purchaser that:
(a) The Company will furnish to the Initial Purchaser and to Counsel for
the Initial Purchaser, without charge, during the period referred to in
paragraph (c) below, as many copies of the Final Memorandum and any amendments
and supplements thereto as they may reasonably request. The Company will pay the
expenses of printing of all documents relating to the Offering and will
reimburse the Initial Purchaser for payment of the required PORTAL filing fee.
(b) The Company will not amend or supplement the Final Memorandum unless
the Initial Purchaser shall previously have been advised thereof and shall not
have objected thereto in writing within ten business days after being furnished
a copy thereof.
(c) Prior to the consummation of the exchange offer made pursuant to the
Registration Rights Agreement or the effectiveness of an applicable shelf
registration statement if, in the reasonable judgment of the Initial Purchaser,
the Initial Purchaser or any of its Affiliates are
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required to deliver an offering memorandum in connection with sales of, or
market-making activities with respect to, the Notes, (A) the Company will
periodically amend or supplement the Final Memorandum so that the information
contained in the Final Memorandum complies with the requirements of Rule 144A of
the Securities Act, (B) the Company will amend or supplement the Final
Memorandum when necessary to reflect any material changes in the information
provided therein so that the Final Memorandum 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 light of the circumstances existing as
of the date the Final Memorandum is so delivered, not misleading and (C) the
Company will provide the Initial Purchaser with copies of each such amended or
supplemented Final Memorandum as the Initial Purchaser may reasonably request.
The Company hereby expressly acknowledges that the indemnification and
contribution provisions of Section 8 hereof are specifically applicable and
relate to each offering memorandum, registration statement, prospectus,
amendment or supplement referred to in this Section 5(c).
(d) The Company will arrange for the qualification of the Notes for sale by
the Initial Purchaser under the laws of such jurisdictions as the Initial
Purchaser may reasonably designate and will maintain such qualifications in
effect as long as required for the sale of the Notes; provided, however, that
the Company shall not be obligated to qualify as a foreign corporation in any
jurisdiction in which it is not now so qualified or to take any action that
would subject it to general consent to service of process in any jurisdiction in
which it is not now so subject or to subject itself to taxation in any such
jurisdiction. The Company will promptly advise the Initial Purchaser of the
receipt by the Company of any notification with respect to the suspension of the
qualification of the Notes for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose.
(e) Whenever the Company publishes or makes available to the public (by
filing with any regulatory authority or securities exchange or by publishing a
press release or otherwise) any information that could reasonably be expected to
be material in the context of the offer and sale of Notes under this Agreement,
the same shall immediately notify the Initial Purchaser as to the nature of such
information or event. Until the third anniversary of the Closing Date, the
Company will notify the Initial Purchaser of (i) any decrease in the rating of
the Notes or any other debt securities of the Company by any nationally
recognized statistical rating organization (as defined in Rule 436(g) under the
Securities Act) or (ii) any notice given of any intended or potential decrease
in any such rating or of a possible change in any such rating which does not
indicate the direction of the possible change, as soon as the Company becomes
aware of any such decrease or notice. For a period of two years after the
Closing Time, the Company will also deliver to the Initial Purchaser, as soon as
available and to the extent individually prepared, and without request, copies
of its latest annual report and quarterly statement and any reports of its
auditors thereon.
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(f) Neither the Company, any of its Affiliates, nor any person acting on
its or their behalf other than the Initial Purchaser, as to which no agreement
is made, will, directly or indirectly, make offers or sales of any security, or
solicit offers to buy any security, under circumstances that would require the
registration of the Notes under the Securities Act (other than pursuant to the
Registration Rights Agreement).
(g) Neither the Company, any of its Affiliates, nor any person acting on
its or their behalf other than the Initial Purchaser, as to which no agreement
is made, will engage, in connection with the offering of the Notes, (i) in any
form of general solicitation or general advertising (within the meaning of
Regulation D) or (ii) in any public offering within the meaning of Section 4(2)
of the Securities Act.
(h) So long as any of the Notes are "restricted securities" within the
meaning of Rule 144(a)(3) under the Securities Act, the Company will, during any
period in which it is not subject to and in compliance with Section 13 or 15(d)
of the Exchange Act, provide to each holder of such restricted securities and to
each prospective purchaser (as designated by such holder) of such restricted
securities, upon the request of such holder or prospective purchaser, any
information required to be provided by Rule 144A(d)(4) under the Securities Act.
Such information, at the date of its provision by the Company to such holders or
prospective purchasers, will not contain any untrue statement of a material fact
or omit to state any material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading. This
covenant is intended to be for the benefit of the holders and the prospective
purchasers designated by such holders from time to time of such restricted
securities.
(i) The Company will cooperate with the Initial Purchaser and use its best
efforts to (i) permit the Notes to be eligible for clearance and settlement
through The Depository Trust Company and (ii) permit the Notes to be designated
PORTAL-eligible securities in accordance with the rules and regulations of the
NASD.
(j) The Company will not, until 180 days following the Closing Date,
without the prior written consent of the Initial Purchaser, offer, sell or
contract to sell, or otherwise dispose of, directly or indirectly, or announce
the offering of, any debt securities issued or guaranteed by the Company (other
than the Notes and the shares of Class A Common Stock registered on the
Company's Registration Statement (No. 333-37679) on Form S-1).
(k) The Company will apply the net proceeds from the sale of the Notes as
set forth in the Final Memorandum under the caption "Use of Proceeds."
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6. Conditions to the Obligations of the Initial Purchaser. The
obligations of the Initial Purchaser to purchase the Notes shall be subject to
the accuracy in all material respects of the representations and warranties on
the part of the Company contained herein at the date and time that this
Agreement is executed and delivered by the parties hereto (the "Execution
Time"), and at the Closing Date as specified in Section 6(e), to the accuracy in
all material respects of the statements of the Company made in any certificates
pursuant to the provisions hereof, to the performance by the Company of its
obligations hereunder at or prior to the Closing Date and to the following
additional conditions:
(a) Notice of redemption shall have been delivered to the Trustee with
respect to the First Mortgage Notes.
(b) The Company and AFI shall have entered into a Registration Rights
Agreement with the Initial Purchaser substantially in the form attached hereto
as Exhibit A.
(c) The Company shall have furnished to the Initial Purchaser the opinion
of Trenam, Kemker, Scharf, Barkin, Frye, O'Neil & Xxxxxx Counsel for the
Company, dated the Closing Date, substantially to the effect that:
(i) the Company is a corporation validly existing and in good
standing under the laws of Florida and is duly qualified to do
business as a foreign corporation and is in good standing under the
laws of each jurisdiction which requires such qualification wherein it
owns or leases properties or conducts business, except in such
jurisdictions in which the failure to so qualify, singly or in the
aggregate, would not have a Material Adverse Effect;
(ii) AFI is a corporation validly existing and in good standing
under the laws of Delaware and is duly qualified to do business as a
foreign corporation and is in good standing under the laws of each
jurisdiction which requires such qualification wherein it owns or
leases properties or conducts business, except in such jurisdictions
in which the failure to so qualify, singly or in the aggregate, would
not have a Material Adverse Effect;
(iii) the Company has the authorized, issued and outstanding
capitalization as set forth in the Final Memorandum under the caption
"Capitalization." All of the issued shares of capital stock of the
Company have been duly authorized and validly issued and are fully
paid and nonassessable and were not, to the best of such counsel's
knowledge, issued in violation of any preemptive or similar rights;
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(iv) the issued shares of capital stock of AFI have been duly
authorized and validly issued, are fully paid and nonassessable and,
except for directors' qualifying shares and except as otherwise set
forth in the Final Memorandum are owned of record and beneficially by
the Company, either directly or through wholly owned subsidiaries,
free and clear, to the best of such counsel's knowledge, of any
pledge, lien, encumbrance, security interest, restriction on voting or
transfer, preemptive rights or other defect or claim of any third
party;
(v) this Agreement has been duly authorized, executed and
delivered by the Company;
(vi) each of the Registration Rights Agreement and the Indenture
has been duly authorized, executed and delivered by the Company and
the Subsidiary Guarantors and constitute legal, valid and binding
obligations of the Company and AFI, enforceable against the Company in
accordance with their terms, except as the same may be limited by (A)
applicable bankruptcy, insolvency, reorganization, moratorium or other
laws affecting creditors' rights generally, including without
limitation the effect of statutory or other laws regarding fraudulent
conveyances or transfers, preferential transfers or distributions by
corporations to shareholders, (B) general principles of equity,
whether considered at law or at equity, including, without limitation,
concepts of materiality, reasonableness, good faith and fair dealing,
or (C) other customary exceptions specified by such counsel in their
opinion and reasonably satisfactory to Counsel for the Initial
Purchaser;
(vii) the Notes have been duly authorized and, when executed and
authenticated in accordance with the provisions of the Indenture and
delivered to and paid for by the Initial Purchaser pursuant to this
Agreement, will constitute legal, valid and binding obligations of the
Company and the Subsidiary Guarantors entitled to the benefits of the
Indenture and enforceable against the Company and the Subsidiary
Guarantors in accordance with their terms, except as may be limited by
(A) applicable bankruptcy, insolvency, reorganization, moratorium or
other laws affecting creditors' rights generally, including without
limitation the effect of statutory or other laws regarding fraudulent
conveyances or transfers, preferential transfers or distributions by
corporations to shareholders, (B) general principles of equity,
whether considered at law or at equity, including, without limitation,
concepts of materiality, reasonableness, good faith and fair dealing,
or (C) other customary exceptions specified by such counsel in their
opinion and reasonably satisfactory to Counsel for the Initial
Purchaser;
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(viii) the statements set forth under the headings "Risk Factors
-- Fraudulent Conveyance Considerations," "Description of the Notes,"
and "Plan of Distribution" in the Final Memorandum, insofar as such
statements constitute summaries of the legal matters, documents and
proceedings referred to therein, fairly summarize the matters referred
to therein;
(ix) the issuance, offering and sale and delivery of the Notes
to the Initial Purchaser pursuant to this Agreement, the delivery of
the Notes under this Agreement, the compliance by the Company and the
Subsidiary Guarantors with the other provisions of this Agreement and
the provisions of the Registration Rights Agreement, the Indenture and
the Notes, the consummation of the other transactions herein and
therein contemplated, including the Refinancing, and the consummation
of the other transactions contemplated hereby and in the Final
Memorandum do not (i) require the consent, approval, authorization,
order, registration or qualification of or with any governmental
authority or court, except such as may be required under state
securities or blue sky laws or except as may be contemplated by the
Registration Rights Agreement or (ii) (a) conflict with, result in a
breach or violation of, or constitute a default under the charter or
by-laws of the Company or AFI or (b) result in a breach or violation
of, or constitute a default under or result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Company or AFI pursuant to (1) any material contract,
loan agreement, note, indenture, mortgage, deed of trust, lease or
other agreement or instrument to which the Company or AFI is a party,
or by which the Company or AFI or any of their respective properties
is bound that has been identified to such Counsel as being the only
such documents that are material to the Company or AFI, as applicable,
by officers of such entity pursuant to an officers' certificate
attached to such opinion, or (2) to the best of such Counsel's
knowledge, (x) any statute, rule or regulation that in such Counsel's
experience is generally applicable to transactions of the type
contemplated by the Final Memorandum or (y) any judgment, order or
decree of any governmental authority or court or arbitrator applicable
to the Company or AFI, except as rights to indemnity and contribution
may be limited by federal or state securities laws or public policy;
(x) to the best knowledge of such counsel, there are no
pending or threatened legal or governmental proceedings to which the
Company is a party that would be required under the Securities Act to
be described in a registration statement or a prospectus delivered at
the time of the confirmation of the sale of an offering of securities
registered under the Securities Act that are not described in the
Final Memorandum, or, to such counsel's best knowledge after due
inquiry, that seek to restrain, enjoin, prevent the consummation of or
otherwise challenge (i) the Acquisition or (ii) the issuance or sale
of the Notes to the Initial Purchaser;
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(xi) assuming the accuracy of the representations and warranties
of the Initial Purchaser and compliance by them with their agreements
contained herein, no registration of the Notes under the Securities
Act is required, and no qualification of the Indenture under the Trust
Indenture Act of 1939 is necessary, for the offer and sale by the
Initial Purchaser of the Notes in the manner contemplated by this
Agreement; and
(xii) the Company is not and, after giving effect to the
Refinancing, will not be an "investment company" within the meaning of
the Investment Company Act without taking account of any exemption
arising out of the number of holders of securities of the Company.
In addition, such Counsel shall also state that such counsel has
participated in conferences with officers and representatives of the Company,
representatives of the independent public accountants for the Company and the
Initial Purchaser at which the contents of the Final Memorandum and related
matters were discussed, and no facts have come to the attention of such Counsel
that lead such Counsel to believe that the Final Memorandum, as of its date or
as of the Closing Date, contained or contains an untrue statement of a material
fact or omitted or omits to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading (it being understood that such Counsel need express no belief or
opinion with respect to the financial statements and other financial data
included therein).
All references in this Section 6(b) to the Final Memorandum shall be deemed
to include any amendment or supplement thereto at the Closing Date.
(d) (i) The Initial Purchaser shall have received from the General Counsel
of the Company, an opinion, dated the Closing Date, substantially to the effect
that the Company and AFI have such permits, licenses, franchises and
authorizations (collectively, "Authorizations") from all regulatory or
governmental officials, bodies or tribunals as are necessary to own, lease and
operate its respective properties and to conduct its business in the manner
described in the Offering Memorandum and that, to such counsel's knowledge, the
Company and AFI have fulfilled and performed all of its material obligations
with respect to such Authorizations, certifications, accreditation or
eligibility and no event has occurred which allows, or after notice or lapse of
time would allow, revocation or termination thereof except where such revocation
or termination would not have a Material Adverse Effect.
(e) The Initial Purchaser shall have received from Shearman & Sterling,
Counsel for the Initial Purchaser, such opinion or opinions, dated the Closing
Date, with respect to the
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issuance and sale of the Notes and other related matters as the Initial
Purchaser may reasonably require, and the Company shall have furnished to such
counsel such documents as they reasonably request for the purpose of enabling
them to pass upon such matters;
(f) (i) the representations and warranties on the part of the Company in
this Agreement shall be true and correct in all material respects on and as of
the Closing Date with the same effect as if made on the Closing Date, and the
Company shall have complied with all the agreements and satisfied all the
conditions on their part to be performed or satisfied hereunder at or prior to
the Closing Date;
(ii) since the date of the most recent financial statements included in
the Final Memorandum, there shall have been no change nor any development or
event involving a prospective change constituting a Material Adverse Effect; and
(iii) the Company shall have furnished to the Initial Purchaser a
certificate of the Company signed by the chief executive officer and the
principal financial or accounting officer of the Company dated the Closing Date,
to the effect that the signers of such certificate have carefully examined the
Final Memorandum, any amendment or supplement to the Final Memorandum and this
Agreement and to the effect set forth in clauses (i) and (ii) above.
(g) At the Execution Time and at the Closing Date, Xxxxxx Xxxxxxxx LLP
shall have furnished to the Initial Purchaser a letter or letters, dated
respectively as of the Execution Time and as of the Closing Date, in form and
substance satisfactory to the Initial Purchaser, confirming that they are
independent accountants within the meaning of Rule 101 of the AICPA and the
applicable rules and regulations thereunder and substantially to the effect
that:
(i) in their opinion the audited financial statements of the Company
included in the Final Memorandum and reported on by them comply in form in
all material respects with the generally accepted accounting principles
("GAAP"); and
(ii) on the basis of a reading of the latest unaudited financial
statements made available by the Company and AFI, as applicable; their
limited review of the unaudited interim financial information; carrying out
certain specified procedures (but not an examination in accordance with
generally accepted auditing standards) which would not necessarily reveal
matters of significance with respect to the comments set forth in such
letter; a reading of the minutes of the meetings of the stockholders,
directors and audit and compensation committees of the Company and AFI; and
inquiries of certain officials of the Company who have responsibility for
financial and accounting matters of the Company and AFI as to transactions
and events subsequent
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to February 28, 1998, nothing came to their attention which caused them to
believe that:
(A) any unaudited financial statements included in the Final
Memorandum are not, in all material respects, in conformity with
generally accepted accounting principles applied on a basis
substantially consistent with that of the audited financial statements
included in the Final Memorandum; or
(B) with respect to the period subsequent to December 31, 1997,
there were any changes, at a specified date not more than three
business days prior to the date of the letter, in the long-term debt
or other long-term liabilities of the Company or AFI, or decreases in
total current assets or increases in total current liabilities of the
Company and AFI as compared with the amounts shown on the December 31,
1997 consolidated balance sheet included in the Final Memorandum, or
for the period from January 1, 1998 to such specified date there were,
as compared with the corresponding period in the preceding year, any
decreases in net sales, gross profit, operating income or net income
or any increases in interest expense of the Company and AFI, except in
all instances for changes, decreases or increases set forth in such
letter, in which case the letter shall be accompanied by an
explanation by the Company as to the significance thereof unless said
explanation is not deemed necessary by the Initial Purchaser; or
(iii) they have performed certain other specified procedures as a result of
which they determined that certain information of an accounting, financial or
statistical nature (which is limited to accounting, financial or statistical
information derived from the general accounting records of the Company and AFI),
as it relates to the Company, set forth in the Final Memorandum, including
without limitation the information set forth under the captions "Offering
Memorandum Summary," "Risk Factors," "Use of Proceeds," "Capitalization,"
"Unaudited Pro Forma Condensed Consolidated Financial Statements," "Management's
Discussion and Analysis of Financial Condition and Results of Operations,"
"Business," "Management" and "Description of the Notes" in the Final Memorandum,
agrees with the accounting records of the Company and AFI, excluding any
questions of legal interpretation; and
(iv) on the basis of a reading of the unaudited pro forma financial
statements (the "pro forma financial statements") included in the Final
Memorandum; carrying out certain specified procedures; inquiries of certain
officials of the Company who have responsibility for financial and accounting
matters; and proving the arithmetic accuracy of the application of the pro forma
adjustments to the historical amounts in
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the pro forma financial statements, nothing came to their attention which
caused them to believe that pro forma adjustments have not been properly
applied to the historical amounts in the computation of such statements.
All references in this Section 6(g) to the Final Memorandum shall be deemed
to include any amendment or supplement thereto at the date of the letter.
(h) The Notes shall have been designated as PORTAL-eligible securities in
accordance with the rules and regulations of the NASD.
(i) (i) Neither the Company nor AFI shall have sustained since the date of
the latest audited financial statements included in the Final Memorandum losses
or interferences with their businesses, taken as a whole, from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise than as set
forth or contemplated in the Final Memorandum or (ii) since such date, there
shall not have been any change in the capital stock or long-term debt of the
Company or AFI or any change, or any development involving a prospective change,
in or affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company or AFI, taken as a
whole, otherwise than as set forth or contemplated in the Final Memorandum, the
effect of which, in any such case described in clause (i) or (ii), is, in the
reasonable judgment of the Initial Purchaser, so material and adverse as to make
it impracticable or inadvisable to proceed with the offering or the delivery of
the Notes being delivered on the Closing Date on the terms and in the manner
contemplated herein and in the Final Memorandum.
(j) Subsequent to the execution and delivery of this Agreement, there shall
not have occurred any of the following: (i) trading in securities generally on
the New York Stock Exchange or The NASDAQ National Market, or in the
over-the-counter market shall have been suspended or materially limited, or
minimum prices shall have been established on such exchange; (ii) a banking
moratorium shall have been declared by federal or New York State authorities;
(iii) the United States shall have become engaged in hostilities, there shall
have been an escalation in hostilities involving the United States or there
shall have been a declaration of a national emergency or war by the United
States; or (iv) there shall have occurred such a material adverse change in
general economic, political or financial conditions (or the effect of
international conditions on the financial markets in the United States shall be
such) as to make it, in the reasonable judgment of the Initial Purchaser,
impracticable or inadvisable to proceed with the offering or delivery of the
Notes being delivered on the Closing Date on the terms and in the manner
contemplated herein and in the Final Memorandum.
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(k) None of the issuance and sale of the Notes pursuant to this Agreement,
the Refinancing or any of the other transactions contemplated by any of the
Refinancing Documents or the Final Memorandum shall be enjoined (temporarily or
permanently) and no restraining order or other injunctive order shall have been
issued or any action, suit or proceeding shall have been commenced with respect
to this Agreement or any of the other transactions contemplated by the Final
Memorandum, before any court or governmental authority.
(l) Subsequent to the Execution Time, there shall not have been any
decrease in the rating of any of the Company's debt securities by any
"nationally recognized statistical rating organization" (as defined for purposes
of Rule 436(g) under the Securities Act) or any notice given of any intended or
potential decrease in any such rating or of a possible change in any such rating
that does not indicate the direction of the possible change.
(m) Prior to the Closing Date, the Company shall have furnished to the
Initial Purchaser such further information, certificates and documents as the
Initial Purchaser may reasonably request.
If any of the conditions specified in this Section 6 shall not
have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Initial Purchaser and Counsel for the
Initial Purchaser, this Agreement and all obligations of the Initial Purchaser
hereunder may be canceled at the Closing Date by the Initial Purchaser. Notice
of such cancellation shall be given to the Company in writing or by telephone or
telegraph confirmed in writing.
The documents required to be delivered by this Section 6 will be
delivered at the office of Counsel for the Initial Purchaser, at 000 Xxxxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx, xx the Closing Date.
7. Payment of Expenses. Whether or not the transactions
contemplated by this Agreement are consummated, the Company will pay all
expenses incident to the performance of its obligations under this Agreement,
including the fees and disbursements of its accountants and counsel, the cost of
printing and delivery of the Preliminary Memorandum, the Final Memorandum, all
amendments thereof and supplements thereto, this Agreement and all other
documents relating to the offering, the cost of preparing, printing, packaging
and delivering the Notes, the fees and disbursements, including fees of counsel
incurred in compliance with Section 5(d), the fees and disbursements of the
Trustee, the fees of any agency that rates the Notes and the fees and expenses
incurred in connection with the admission of the Notes for trading in the PORTAL
system. If the sale of the Notes provided for herein is not consummated because
any
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condition to the obligations of the Initial Purchaser set forth in Section 5
hereof is not satisfied or because of any refusal, inability or failure on the
part of the Company to perform any agreement herein or comply with any provision
hereof other than by reason of default by the Initial Purchaser in payment for
the Notes on the Closing Date, the Company will reimburse the Initial Purchaser
upon demand for all out-of-pocket expenses (including reasonable fees and
disbursements of counsel) that shall have been incurred by them in connection
with the proposed purchase and sale of the Notes.
8. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless the Initial Purchaser, the directors, officers,
employees and agents of the Initial Purchaser and each person who controls the
Initial Purchaser within the meaning of either the Securities Act or the
Exchange Act against any and all losses, claims, damages or liabilities, joint
or several, to which they or any of them may become subject under the Securities
Act, the Exchange Act or other federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Preliminary Memorandum, the Final Memorandum or any information provided by the
Company or any of its Affiliates or arise out of or are based upon the omission
or alleged omission to state therein 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, and agree to reimburse
each such indemnified party, as incurred, for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission (i) made
in the Preliminary Memorandum or the Final Memorandum, or in any amendment
thereof or supplement thereto, in reliance upon and in conformity with written
information furnished to the Company by or on behalf of the Initial Purchaser
specifically for inclusion therein or (ii) made in the Preliminary Memorandum if
a copy of the Final Memorandum was not delivered by or on behalf of the Initial
Purchaser to the person asserting any claim against the Initial Purchaser, the
Final Memorandum was required by law to have been so delivered by the Initial
Purchaser and the untrue statement contained in or omission from such
Preliminary Memorandum was corrected in the Final Memorandum. This indemnity
agreement will be in addition to any liability which the Company may otherwise
have.
(b) The Initial Purchaser agrees to indemnify and hold harmless
the Company, its directors, its officers, its employees, its agents and each
person who controls the Company within the meaning of either the Securities Act
or the Exchange Act, to the same extent as the foregoing indemnity from the
Company to the Initial Purchaser, but only with reference to written information
relating to the Initial Purchaser furnished to the Company by or on behalf of
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the Initial Purchaser specifically for inclusion in the Preliminary Memorandum
or the Final Memorandum (or in any amendment or supplement thereto). This
indemnity agreement will be in addition to any liability that the Initial
Purchaser may otherwise have. The Company acknowledges that the name of the
Initial Purchaser set forth on the front and back covers, the statements set
forth in the last paragraph of the cover page, the last paragraph of the inside
cover page and certain information under the heading "Plan of Distribution" in
the Preliminary Memorandum and the Final Memorandum constitute the only
information furnished in writing by or on behalf of the Initial Purchaser for
inclusion in the Preliminary Memorandum or the Final Memorandum (or any
amendment or supplement thereto).
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure results
in the forfeiture by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above. The indemnifying party shall be entitled
to appoint counsel of the indemnifying party's choice at the indemnifying
party's expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be reasonably satisfactory to the
indemnified party. Notwithstanding the indemnifying party's election to appoint
counsel to represent the indemnified party in an action, the indemnified party
shall have the right to employ separate counsel (including local counsel), and
the indemnifying party shall bear the reasonable fees, costs and expenses of
such separate counsel if (i) the use of counsel chosen by the indemnifying party
to represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. It is understood that the indemnifying party shall
not, in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the fees and expenses of more than one separate firm
(in addition to any local counsel) for all such indemnified parties and that all
such fees and expenses shall be reimbursed as they are incurred. Such firm shall
be designated in
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writing by the Initial Purchaser in the case of parties indemnified pursuant to
paragraph (a) above and by the Company in the case of parties indemnified
pursuant to paragraph (b) above. The indemnifying party shall not be liable for
any settlement of any proceeding effected without its written consent (not to be
unreasonably withheld), but if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of such
settlement or judgment to the extent required by paragraph (a) or (b) above, as
applicable. Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by the third
and fourth sentences of this paragraph, the indemnifying party agrees that it
shall be liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than 20 days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least five days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed the indemnified party in accordance
with such request prior to the date of such settlement. An indemnifying party
will not, without the prior written consent of the indemnified parties, settle
or compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or
(b) of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company, on the one hand, and the Initial
Purchaser severally and not jointly, on the other, agree to contribute to the
aggregate losses, claims, damages and liabilities (including legal or other
expenses reasonably incurred in connection with investigating or defending same)
(collectively, "Losses") to which the Company, on the one hand, and the Initial
Purchaser, on the other, may be subject in such proportion as is appropriate to
reflect the relative benefits received by the Company, on the one hand and by
the Initial Purchaser, on the other, from the offering of the Notes; provided,
however, that in no case shall the Initial Purchaser be responsible for any
amount in excess of the purchase discount or commission applicable to the Notes
purchased by the Initial Purchaser hereunder. If the allocation provided by the
immediately preceding sentence is unavailable for any reason, the Company, on
the one hand and the Initial Purchaser on the other, shall contribute in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Company, on the one hand and of the Initial Purchaser,
on the other, in connection with the statements or omissions which resulted in
such Losses as well as any other relevant equitable considerations. Benefits
received by the Company shall be deemed to be equal to the total net proceeds
from the offering (before deducting expenses), and
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benefits received by the Initial Purchaser shall be deemed to be equal to the
total purchase discounts and commissions received by the Initial Purchaser from
the Company in connection with the purchase of the Notes hereunder. Relative
fault shall be determined by reference to whether any alleged untrue statement
or omission relates to information provided by the Company or the Initial
Purchaser. The Company and the Initial Purchaser agree that it would not be just
and equitable if contribution were determined by pro rata allocation or any
other method of allocation which does not take into account of the equitable
considerations referred to above. Notwithstanding the provisions of this
paragraph (d), 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. For purposes of this Section 8, each person who controls the
Initial Purchaser within the meaning of either the Securities Act or the
Exchange Act and each director, officer, employee and agent of the Initial
Purchaser shall have the same rights to contribution as the Initial Purchaser,
and each person who controls the Company within the meaning of either the
Securities Act or Exchange Act and each officer and director employee and agent
of the Company shall have the same rights to contribution as the Company,
subject in each case to the applicable terms and conditions of this paragraph
(d).
9. Termination. This Agreement shall be subject to termination in
the absolute discretion of the Initial Purchaser, by notice given to the Company
prior to delivery of and payment for the Notes, if prior to such time any of the
events described in Section 6(i) or 6(j) shall have occurred or if the Initial
Purchaser shall decline to purchase the Notes for any reason permitted under
this Agreement.
10. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company, or their officers and of the Initial Purchaser set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation made by or on behalf of the Initial Purchaser or the Company
or any of the officers, directors or controlling persons referred to in Section
8 hereof, and will survive delivery of and payment for the Notes. The provisions
of Sections 7 and 8 hereof shall survive the termination or cancellation of this
Agreement.
11. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Initial Purchaser, will be
mailed, delivered or telecopied and confirmed to it at 000 Xxxxx Xxxxx Xxxxxx,
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, Attention: Xxxxx Xxxx, or, if sent to the
Company, will be mailed, delivered or telecopied and confirmed to the Company at
0000 X. Xxxxx Xxxxxx, Xxxxx 000, Xxxxx, Xxxxxxx 00000, Attention: Xxx X. Xxxxx.
12. Successors. This Agreement will inure to the benefit of and
be binding upon the parties hereto and their respective successors and the
officers and directors and
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controlling persons referred to in Section 8 hereof, and no other person will
have any right or obligation hereunder.
13. Applicable Law. This Agreement will be governed by and
construed in accordance with the laws of the State of New York.
14. Business Day. For purposes of this Agreement, "business day"
means each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on
which banking institutions in The City of New York are authorized or obligated
by law, executive order or regulation to close.
15. Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original, but all such
counterparts will together constitute one and the same instrument.
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If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this Agreement and your acceptance shall represent a binding agreement between
the Company and the Initial Purchaser.
Very truly yours,
AMERISTEEL CORPORATION
By:
--------------------------
Name:
Title:
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
NATIONSBANC XXXXXXXXXX SECURITIES LLC
By:
-----------------------------------
Name:
Title:
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Schedule I
Principal Amount of
Name of the Initial Purchaser Notes to Be Purchased
--------------------------------------- ---------------------
NationsBanc Xxxxxxxxxx Securities LLC $130,000,000
-----------------
Total $130,000,000
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EXHIBIT A
REGISTRATION RIGHTS AGREEMENT
