Exhibit 1.1
THE LTV CORPORATION
$300,000,000
8.20% SENIOR NOTES DUE 2007
PURCHASE AGREEMENT
New York, New York
September 17, 1997
To: SALOMON BROTHERS INC
CHASE SECURITIES INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
In care of:
Salomon Brothers Inc
Seven Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
The LTV Corporation, a Delaware corporation (the "Company"),
proposes to issue and sell to you (the "Purchasers"), $300,000,000 principal
amount of its 8.20% Senior Notes Due 2007 (the "Notes") to be unconditionally
guaranteed on a senior basis (the "Guaranty" and, together with the Notes, the
"Securities") by LTV Steel Company, Inc. (the "Guarantor"). The Securities are
to be issued under an indenture (the "Indenture") dated as of September 22,
1997, among the Company, the Guarantor and The Chase Manhattan Bank, as
trustee (the "Trustee").
The sale of the Securities to you will be made without
registration of the Securities under the Securities Act of 1933, as amended
(the "Securities Act"), in reliance upon the exemption from the registration
requirements of the Securities Act provided by Section 4(2) thereof. You have
advised the Company that you will make an offering of the Securities purchased
by you hereunder in accordance with Section 4 hereof as soon as you deem
advisable after the execution and delivery of this Agreement.
In connection with the sale of the Securities, the Company has
prepared a preliminary offering memorandum, dated August 29, 1997 (the
"Preliminary Memorandum"), and a final offering memorandum, dated September
17, 1997 (the "Final Memorandum"). Each of the Preliminary Memorandum and
the Final Memorandum sets forth certain information concerning the Company,
the Guarantor and the Securities. The Company and the Guarantor, jointly and
severally, hereby confirm that they have 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 Securities by the Purchasers.
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 thereto subsequent to the
Execution Time and any references herein to the terms "amend", "amendment" or
"supplement" with respect to the Final Memorandum shall be deemed to refer to
and include any information filed under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), subsequent to the Execution Time which is
incorporated by reference therein.
Capitalized terms used herein without definition have the respective
meanings assigned to them in the Final Memorandum.
1. Representations and Warranties. The Company and the Guarantor
jointly and severally represent and warrant to, and agree with, the Purchasers
as set forth below in this Section 1.
(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 (other than pricing terms and other financial terms
intentionally left blank) 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 (and any amendment or
supplement thereto, at the date thereof 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 no representation or warranty is made 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 Purchasers specifically for inclusion
therein, it being understood that the only such information is that
described in Section 8(b) hereof.
(b) Neither the Company nor the Guarantor has taken nor will they
take, directly or indirectly, any action prohibited by Regulation M
under the Exchange Act in connection with the offering of the Securities.
(c) None of the Company, the Guarantor, any of their respective
Affiliates (as defined in Rule 501(b) of Regulation D under the
Securities Act ("Regulation D"), nor any person acting on its or their
behalf, has (i) sold, offered for sale, solicited offers to buy or
otherwise negotiated in respect of, any security (as defined in the
Securities Act) that is currently or will be integrated with the sale of
the Securities in a manner that would require the registration of the
Securities under the Securities Act or (ii) 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 Securities in
the United States.
(d) The Securities satisfy the eligibility requirements of Rule
144A(d)(3) under the Securities Act.
(e) None of the Company, the Guarantor, nor any of their
respective Affiliates, nor any person acting on its or their behalf, has
engaged in any directed selling efforts with respect to the Securities,
and each of them has complied with the offering restrictions requirement
of Regulation S ("Regulation S") under the Securities Act. Terms used
in this paragraph have the meanings given to them by Regulation S.
(f) Neither the Company nor the Guarantor is 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 Company's
securities.
(g) The Company is subject to and in full compliance with the
reporting requirements of Section 13 or Section 15(d) of the Exchange
Act.
(h) Neither the Company nor the Guarantor paid or agreed to pay
to any person any compensation for soliciting another to purchase any
securities of the Company or the Guarantor (except as contemplated by
this Agreement).
(i) The information provided by the Company pursuant to Section
5(i) hereof will not, at the date thereof, 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.
(j) It is not necessary in connection with the offer, sale and
delivery of the Securities in the manner contemplated by this Agreement
and the Final Memorandum to register the Securities under the Securities
Act or to qualify the Indenture under the Trust Indenture Act of 1939,
as amended (the "Trust Indenture Act").
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 Purchasers, and the Purchasers agree to purchase from the
Company, severally and not jointly, at a purchase price of 97.957% of the
principal amount thereof, plus accrued interest, if any, from September 22,
1997, to the Closing Date, the principal amount of Securities set forth
opposite each Purchaser's name in Schedule I hereto.
3. Delivery and Payment. Delivery of and payment for the
Securities shall be made at 10:00 AM, New York City time, on September 22,
1997, or such later date as the Purchasers may agree or as provided in Section
9 hereof (such date and time of delivery and payment for the Securities being
herein called the "Closing Date"). Delivery of the Securities shall be made
to the Purchasers against payment by the Purchasers of the purchase price
thereof to or upon the order of the Company by wire transfer in Federal (same
day) funds to a U.S. dollar account in New York previously designated by the
Company or such other manner of payment as may be designated by the Company
and agreed to by the Purchasers not less than two business days prior to the
Closing Date. Delivery of the Securities shall be made at the office of
Cravath, Swaine & Xxxxx ("Counsel for the Purchasers"), 000 Xxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx. Certificates for the Securities shall be registered in such
names and in such denominations as the Purchasers may request not less than
three full business days in advance of the Closing Date.
The Company agrees to have the certificates for the Securities
available for inspection, checking and packaging by the Purchasers in New
York, New York, not later than 1:00 PM on the business day prior to the
Closing Date.
4. Offering of Securities. Each Purchaser (i) acknowledges that
the Securities have not been registered under the Securities Act and may not
be offered or sold except pursuant to Rule 144A under the Securities Act,
Regulation S or another exemption from the registration requirements of the
Securities Act or pursuant to an effective registration statement under the
Securities Act and (ii) severally and not jointly, represents and warrants to
and agrees with the Company that:
(a) It has not offered or sold, and will not offer or sell, any
Securities except (i) to those it reasonably believes to be 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 Securities is
aware that such sale is being made in reliance on Rule 144A or (ii) in
accordance with the restrictions set forth in Exhibit A hereto.
(b) Neither it nor any person acting on its behalf has made or
will make offers or sales of the Securities 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, except pursuant to a
registered public offering, whether an exchange offer or shelf
registration, as provided in the Registration Agreement dated September
17, 1997, among the Company, the Guarantor and you (the "Registration
Agreement").
5. Agreements. The Company and the Guarantor jointly and
severally agree with the Purchasers that:
(a) At any time prior to the completion of the sale of the
Securities by the Purchasers, the Company and the Guarantor will furnish
to the Purchasers, without charge, as many copies of the Final
Memorandum and any supplements or amendments thereof or thereto as the
Purchasers may reasonably request. The Company and the Guarantor will
pay the expenses of printing or other production of all documents
relating to the offering.
(b) The Company will not amend or supplement the Final
Memorandum, other than by filing documents under the Exchange Act that
are incorporated by reference therein, without prior consent of the
Purchasers. Prior to the completion of the sale of the Securities by
the Purchasers, the Company and the Guarantor will not file any document
under the Exchange Act which is incorporated by reference in the Final
Memorandum unless the Company and the Guarantor have furnished to you a
copy for your review prior to filing and will not file any such document
to which you reasonably and timely object within five days of receipt
thereof.
(c) The Company and the Guarantor promptly will advise the
Purchasers when, prior to the completion of the sale of the Securities
by the Purchasers, any document filed under the Exchange Act that is
incorporated by reference in the Final Memorandum shall have been filed
with the Securities and Exchange Commission (the "Commission").
(d) If at any time prior to the completion of the sale of the
Securities by the Purchasers, any event occurs as a result of which the
Final Memorandum, as then amended or supplemented, would include any
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it shall
be necessary to amend or supplement the Final Memorandum (including any
document incorporated by reference therein that was filed under the
Exchange Act) to comply with the Exchange Act or the rules thereunder or
other applicable law, the Company and the Guarantor promptly will notify
the Purchasers of the same and, subject to paragraph (b) of this Section
5, will prepare and provide to the Purchasers pursuant to paragraph (a)
of this Section 5 an amendment or supplement which will correct such
statement or omission or effect such compliance, and, in the case of
such an amendment or supplement that is to be filed under the Exchange
Act and that is incorporated by reference in the Final Memorandum, will
file such amendment or supplement with the Commission.
(e) The Company will arrange for the qualification of the
Securities for sale under the laws of such jurisdictions as the
Purchasers may designate and will maintain such qualifications in effect
so long as required for the sale of the Securities. Each of the Company
and the Guarantor promptly will advise the Purchasers of the receipt by
it of any notification with respect to the suspension of the
qualification of the Securities for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose.
(f) Neither the Company nor the Guarantor will, nor will they
permit any of their respective Affiliates to, resell any Securities that
have been acquired by any of them.
(g) Except pursuant to the Registration Agreement, neither the
Company, the Guarantor, any of their respective Affiliates, nor any
person acting on its or their behalf, 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
Securities under the Securities Act.
(h) Neither the Company, the Guarantor, any of their respective
Affiliates, nor any person acting on its or their behalf, will engage in
any form of general solicitation or general advertising (within the
meaning of Regulation D) in connection with any offer or sale of the
Securities in the United States, except pursuant to a registered public
offering, whether an exchange offer or shelf registration, as provided
in the Registration Agreement.
(i) The Company will, during any period in which any of the
Securities remain "restricted securities" within the meaning of the
Securities Act and in which the Company 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.
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.
(j) None of the Company, the Guarantor, any of their respective
Affiliates, nor any person acting on its or their behalf, will engage in
any directed selling efforts with respect to the Securities except
pursuant to a registered public offering and each of them will comply
with the offering restrictions requirement of Regulation S. Terms used
in this paragraph have the meanings given to them by Regulation S.
(k) The Company will cooperate with the Purchasers and use its
best efforts to permit the Securities to be eligible for clearance and
settlement through The Depository Trust Company.
(l) The Company will not, until 180 days following the Closing
Date, without the prior written consent of Salomon Brothers Inc, offer,
sell or contract to sell, or otherwise dispose of, directly or
indirectly, or announce the offering of, or file a registration
statement for, any debt securities issued or guaranteed by the Company
or the Guarantor (other than as required under the Registration
Agreement). Neither the Company nor the Guarantor will at any time
offer, sell, contract to sell or otherwise dispose of, directly or
indirectly, any securities under circumstances where such offer, sale,
contract or disposition would cause the exemption afforded by Section
4(2) of the Securities Act or the safe harbor of Regulation S thereunder
to cease to be applicable to the offer and sale of the Securities as
contemplated by this Agreement and the Final Memorandum.
(m) The Company and the Guarantor hereby agree to permit the
Securities to be designated Portal eligible securities in accordance
with the rules and regulations of the National Association of Securities
Dealers, Inc. relating to trading in The Portal Market.
(n) The Company hereby agrees to apply the net proceeds from the
sale of the Securities as set forth in the Final Memorandum under the
heading "Use of Proceeds".
6. Conditions to the Obligations of the Purchasers. The
obligations of the Purchasers to purchase the Securities shall be subject to
the accuracy 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 the Closing Date,
to the accuracy of the statements of the Company and the Guarantor made in any
certificates pursuant to the provisions hereof, to the performance by the
Company and the Guarantor of their respective obligations hereunder and to the
following additional conditions:
(a) The Company shall have furnished to the Purchasers the
opinion of Xxxxx Xxxx & Xxxxxxxx, counsel for the Company, dated the
Closing Date, to the effect that:
(i) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Delaware, with full corporate power and authority to own
its properties and conduct its business as described in the Final
Memorandum;
(ii) the information contained in the Final Memorandum under
the headings "Exchange Offer; Registration Rights", "Description
of Certain Financing and Security Arrangements", "Description of
PBGC Settlement Agreement" and "Certain United States Federal
Income Tax Considerations" fairly summarizes the matters therein
described;
(iii) this Agreement and the Registration Agreement have been
duly authorized, executed and delivered by the Company and the
Guarantor;
(iv) no consent, approval, authorization or order of any court
or governmental agency or body is required for the consummation of
the transactions contemplated herein or in the Registration
Agreement, except such as may be required under the blue sky or
securities laws of any jurisdiction in connection with the
purchase and sale of the Securities by the Purchasers and such
other approvals (specified in such opinion) as have been obtained;
(v) neither the issue and sale of the Securities, the
execution and delivery of the Indenture, this Agreement or the
Registration Agreement the consummation of any other of the
transactions herein or therein contemplated nor the fulfillment of
the terms hereof or thereof will conflict with, result in a breach
or violation of, or constitute a default under any provision of
applicable law or the charter or by-laws of the Company or any of
its subsidiaries or the terms of any indenture or other agreement
or instrument known to such counsel and to which the Company or
any of its subsidiaries is a party or bound or any judgment, order
or decree known to such counsel to be applicable to the Company or
any of its subsidiaries of any court, regulatory body,
administrative agency, governmental body or arbitrator having
jurisdiction over the Company or any of its subsidiaries;
(vi) the Securities conform to the description thereof
contained in the Final Memorandum;
(vii) the Indenture has been duly authorized, executed and
delivered, and constitutes a legal, valid and binding instrument
enforceable against the Company and the Guarantor in accordance
with its terms (subject, as to the enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, moratorium or
other laws affecting creditors' rights generally from time to time
in effect); the Certificates for the Securities are in valid form;
and the Securities have been duly and validly authorized and, when
executed and authenticated in accordance with the provisions of
the Indenture and delivered to and paid for by the Purchasers
pursuant to this Agreement, will constitute legal, valid and
binding obligations of the Company entitled to the benefits of the
Indenture;
(viii) the Indenture conforms as to form in all material
respects with the requirements of the Trust Indenture Act and the
rules and regulations of the Commission applicable to an indenture
which is qualified thereunder; and
(ix) assuming the accuracy of the representations and
warranties and compliance with the agreements contained herein, no
registration of the Securities under the Securities Act is
required, and no qualification of the Indenture under the Trust
Indenture Act is necessary, for the offer and sale by the
Purchasers of the Securities in the manner contemplated by this
Agreement.
(x) neither the Company nor the Guarantor is or, after giving
effect to the offering and sale of the Securities and the
application of the net proceeds therefrom, will be an "investment
company" within the meaning of the Investment Company Act of 1940,
as amended, without taking account of any exemption arising out of
the number of holders of the Company's securities.
Such counsel shall also state that they have no reason to
believe that at the Execution Time the Final Memorandum contained an
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading or that the
Final Memorandum includes an untrue statement of a material fact or
omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading.
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction other than
the State of New York, the State of Delaware or the United States, to
the extent they deem proper and specified in such opinion, upon the
opinion of other counsel of good standing whom they believe to be
reliable and who are satisfactory to counsel for the Purchasers and (B)
as to matters of fact, to the extent they deem proper, on certificates
of responsible officers of the Company and public officials.
All references in this Section 6(a) to the Final Memorandum
shall be deemed to include any amendment or supplement thereto at the
Closing Date.
(b) The Company shall have furnished to the Purchasers the
opinion of Xxxxx X. Xxxxx, Esq., Senior Vice President, General Counsel
and Secretary of the Company, dated the Closing Date, to the effect that:
(i) each of the Company and its Significant Subsidiaries (as
such term is defined in Regulation S-X under the Securities Act)
is validly existing as a corporation or partnership in good
standing under the laws of the jurisdiction of its incorporation or
partnership formation, has full corporate or partnership power and
authority to own its properties and conduct its business as
described in the Final Memorandum and is duly qualified to
transact business and is in good standing in each jurisdiction in
which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that
the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company and its
subsidiaries, taken as a whole;
(ii) except as otherwise set forth in the Final Memorandum, all
outstanding shares of capital stock of the subsidiaries of the
Company are owned by the Company either directly or through wholly
owned subsidiaries free and clear of any perfected security
interest and, to the knowledge of such counsel any other security
interests, claims, liens or encumbrances;
(iii) this Agreement and the Registration Agreement have been
duly authorized, executed and delivered by the Company and the
Guarantor;
(iv) with respect to the corporate law of the State of
Delaware, the laws of the States of New York and New Jersey and
the laws of the United States, no consent, approval, authorization
or order of any court or governmental agency or body is required
for the consummation of the transactions contemplated herein or
in the Registration Agreement, except such as may be required
under the blue sky or securities laws of any jurisdiction in
connection with the purchase and sale of the Securities by the
Purchasers and such other approvals (specified in such opinion) as
have been obtained;
(v) neither the issue and sale of the Securities, the execution
and delivery of the Indenture, this Agreement or the Registration
Agreement, the consummation of any other of the transactions
herein or therein contemplated nor the fulfillment of the terms
hereof or thereof will conflict with, result in a breach or
violation of, or constitute a default under any provision of the
applicable corporate law of the State of Delaware, the applicable
laws of the States of New York and New Jersey or the applicable
laws of the United States or the charter or by-laws of the Company
or any of its subsidiaries or the terms of any indenture or other
agreement or instrument and to which the Company or any of its
subsidiaries is a party or bound or any judgment, order or decree
known to such counsel to be applicable to the Company or any of its
subsidiaries of any court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction over the
Company or any of its subsidiaries;
(vi) the Company's authorized equity capitalization is as set
forth in the Final Memorandum; the Securities conform to the
description thereof contained in the Final Memorandum; and the
holders of the outstanding shares of capital stock of the Company
are not entitled to any preemptive or, to such counsel's
knowledge, any other similar rights to subscribe for the
Securities;
(vii) the Indenture has been duly authorized, executed and
delivered, and constitutes a legal, valid and binding instrument
enforceable against the Company and the Guarantor in accordance
with its terms (subject, as to the enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, moratorium or
other laws affecting creditors' rights generally from time to time
in effect); the Certificates for the Securities are in valid form,
the Securities have been duly and validly authorized and, when
executed and authenticated in accordance with the provisions of
the Indenture and delivered to and paid for by the Purchasers
pursuant to this Agreement, will constitute legal, valid and
binding obligations of the Company entitled to the benefits of the
Indenture; and the statements set forth under the heading
"Description of Notes" in the Final Memorandum, insofar as such
statements purport to summarize certain provisions of the
Securities and the Indenture, provide a fair summary of such
provisions; and
(viii) to the best knowledge of such counsel, there is no
pending or threatened action, suit or proceeding before any court
or governmental agency, authority or body or any arbitrator
involving the Company, the Guarantor or any of their respective
subsidiaries or to which any of the properties of the Company, the
Guarantor or any of their respective subsidiaries is subject that
would be required to be disclosed or incorporated by reference in
the Final Memorandum if the Final Memorandum were a prospectus
included in a registration statement on Form S-3 under the
Securities Act, which is not adequately disclosed in the Final
Memorandum, and the statements in the Final Memorandum under the
headings "Risk Factors--Litigation", "Business--Trade Cases",
"Business--Environmental Matters", "Business--Legal Proceedings",
"Description of PBGC Settlement Agreement" and "Description of
Certain Financing and Security Arrangements", insofar as such
statements constitute summaries of the documents or proceedings,
as the case may be, referred to therein, fairly summarize, in all
material respects, the matters referred to therein;
Such counsel shall also state that they have no reason to
believe that at the Execution Time the Final Memorandum contained an
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading or that the
Final Memorandum includes an untrue statement of a material fact or
omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading.
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction other than
the State of New York, the State of Delaware or the United States, to
the extent he deems proper and specified in such opinion, upon the
opinion of other counsel of good standing whom he believes to be
reliable and who are satisfactory to counsel for the Purchasers and (B)
as to matters of fact, to the extent he deems proper, on certificates of
responsible officers of the Company and public officials.
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.
(c) The Purchasers shall have received from counsel for the
Purchasers such opinion or opinions, dated the Closing Date, with
respect to the issuance and sale of the Securities, the Final Memorandum
(as amended or supplemented at the Closing Date) and other related
matters as the Purchasers may reasonably require, and the Company shall
have furnished to such counsel such documents as they request for the
purpose of enabling them to pass upon such matters.
(d) The Company shall have furnished to the Purchasers a
certificate of the Company, signed by the Senior Vice President and
Chief Financial Officer and the Vice President and Treasurer 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 that:
(i) the representations and warranties of the Company and
the Guarantor in this Agreement and in the Registration Agreement
are 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 and the Guarantor have complied with all the
agreements and satisfied all the conditions on its part to be
performed or satisfied hereunder or thereunder at or prior to the
Closing Date; and
(ii) since the date of the most recent financial statements
included in the Final Memorandum, there has been no material
adverse change in the condition (financial or other), earnings,
business or properties of the Company and its subsidiaries,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Final
Memorandum (exclusive of any amendment or supplement thereto).
(e) At the Execution Time and at the Closing Date, Ernst & Young
LLP shall have furnished to the Purchasers a letter or letters, dated
respectively as of the Execution Time and as of the Closing Date, in
form and substance satisfactory to the Purchasers, confirming that they
are independent accountants within the meaning of the Securities Act and
the Exchange Act and the applicable rules and regulations thereunder and
Rule 101 of the Code of Professional Conduct of the American Institute
of Certified Public Accountants (the "AICPA") and stating in effect that:
(i) in their opinion the audited financial statements and
financial statement schedules included or incorporated by
reference in the Final Memorandum and reported on by them comply
in form in all material respects with the applicable accounting
requirements of the Exchange Act and the related published rules
and regulations that would apply to the Final Memorandum if the
Final Memorandum were a prospectus included in a registration
statement on Form S-1 under the Securities Act;
(ii) based upon the procedures detailed in such letter with
respect to the period subsequent to the date of the latest audited
financial statements included in the Final Memorandum, including
the reading of the minutes and inquiries of certain officials of
the Company who have responsibility for the financial and
accounting matters and certain other limited procedures requested
by the Purchasers and described in detail in such letter, nothing
has come to their attention that causes them to believe that:
(A) any unaudited financial statements of the Company
included or incorporated by reference in the Final
Memorandum do not comply in form in all material respects
with applicable accounting requirements of the Securities
Act that would apply to the Final Memorandum if the Final
Memorandum were a prospectus included in a registration
statement on Form S-1 under the Securities Act and with the
published rules and regulations of the Commission with
respect to financial statements included or incorporated in
quarterly reports on Form 10-Q under the Exchange Act; or
that such unaudited financial statements 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 of
the Company included or incorporated by reference in the
Final Memorandum;
(B) with respect to the period subsequent to June 30,
1997, there were, at a specified date not more than five
business days prior to the date of the letter, any changes
in the total debt of the Company and its subsidiaries or
capital stock of the Company or decreases in the
stockholders' equity of the Company or changes in other
post-employment benefit liabilities or changes in pension
liabilities or decreases in working capital of the Company
and its subsidiaries, as compared with the amounts shown on
the June 30, 1997 consolidated balance sheet included or
incorporated by reference in the Final Memorandum, or for
the period from July 1, 1997, to such specified date there
were any decreases, as compared with the corresponding
period in the preceding year in sales or income (loss) before
income taxes or net income (loss) or EBITDA, as defined in
the Indenture, except in all instances for changes or
decreases 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 Purchasers; or
(C) the information included under the headings
"Selected Consolidated Financial Information and Certain
Operating Data" and "Management's Discussion and Analysis of
Results of Operations and Financial Condition" is not in
conformity with the disclosure requirements of Regulation
S-K that would apply to the Final Memorandum if the Final
Memorandum were a prospectus included in a registration
statement on Form S-1 under the Securities; and
(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 its subsidiaries)
set forth in the Final Memorandum, including the information set
forth under the captions "Offering Memorandum Summary", "Risk
Factors", "Use of Proceeds", "Capitalization and Other Significant
Obligations" "Selected Consolidated Financial Information and
Certain Operating Data", "Management's Discussion and Analysis of
Results of Operations and Financial Condition", "Business",
"Management", "Description of Certain Financing and Security
Arrangements", "Description of PBGC Settlement Agreement" and
"Description of Notes" in the Final Memorandum, agrees with the
accounting records of the Company and its subsidiaries, excluding
any questions of legal interpretation.
All references in this Section 6(e) to the Final Memorandum shall
be deemed to include any amendment or supplement thereto at the date of
the letter.
(f) Subsequent to the Execution Time or, if earlier, the dates as
of which information is given in the Final Memorandum, there shall not
have been (i) any change or decrease specified in the letter or letters
referred to in paragraph (d) of this Section 6 or (ii) any change, or any
development involving a prospective change, in or affecting the business
or properties of the Company and its subsidiaries the effect of which,
in any case referred to in clause (i) or (ii) above, is, in the
reasonable judgment of the Purchasers, so material and adverse as to
make it impractical or inadvisable to market the Securities as
contemplated by the Final Memorandum.
(g) Subsequent to the Execution Time, there shall not have been
(i) any decrease in the rating of the Securities or any of the Company's
or the Guarantor's other debt securities by any "nationally recognized
statistical rating organization" (as defined for purposes of Rule 436(g)
under the Securities Act) or (ii) any notice given of any intended or
potential decrease in any such rating or that such organization has
under surveillance or review (other than any such notice with positive
implications of a possible upgrading) its rating of the Securities or
any of the Company's or any Guarantor's other debt securities.
(h) Prior to the Closing Date, the Company and the Guarantor
shall have furnished to the Purchasers such further information,
certificates and documents as the Purchasers may reasonably request.
(i) The Company shall have furnished evidence satisfactory to the
Purchasers that, on or before the Closing Date, the Ninth Amendment and
the Tenth Amendment to the Letter of Credit Agreement (the "Tenth
Amendment") have been duly authorized, executed and delivered by the
Borrowers, the Lenders and the Agent (each such term as defined in the
Tenth Amendment).
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 Purchasers and counsel for the
Purchasers, this Agreement and all obligations of the Purchasers hereunder may
be canceled at, or at any time prior to, the Closing Date by the Purchasers.
Notice of such cancelation shall be given to the Company in writing or by
telephone confirmed in writing.
The documents required to be delivered by this Section 6 will be
delivered at the office of counsel for the Purchasers, at 000 Xxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx, xx the Closing Date.
7. Reimbursement of Expenses. If the sale of the Securities
provided for herein is not consummated because of any termination pursuant to
Section 6 or 10 hereof or because of any refusal, inability or failure on the
part of the Company or the Guarantor to perform any agreement herein or comply
with any provision hereof, in each case other than by reason of a default by
the Purchasers, the Company and the Guarantor jointly and severally will
reimburse the Purchasers 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 Securities.
8. Indemnification and Contribution. (a) The Company and the
Guarantor jointly and severally agree to indemnify and hold harmless each
Purchaser, each director, officer, employee and agent of any Purchaser and
each other person, if any, who controls any Purchaser within the meaning of
Section 15 of the Securities Act or Section 20 of 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 to
any holder or prospective purchaser of Securities pursuant to Section 5(i), or
in any amendments thereof or supplements thereto, 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
agrees 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 neither the Company nor the Guarantor will 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 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 Purchasers specifically for inclusion therein, it being
understood that the only such information is that described in Section 8(b).
This indemnity agreement will be in addition to any liability that the Company
or the Guarantor may otherwise have. Such indemnity with respect to the
Preliminary Memorandum shall not inure to the benefit of any Initial Purchaser
(or any of the directors, officers, employees and agents of such Purchaser)
from whom the person asserting any such loss, claim, damage or liability
purchased the Securities that are the subject thereof if such person did not
receive a copy of the Final Memorandum as amended or supplemented at or prior
to the confirmation of the sale of such Securities to such person in any case
where the untrue statement or omission of a material fact contained in such
Preliminary Memorandum was corrected in the Final Memorandum as amended or
supplemented and the sale to the person asserting any such loss, claim, damage
or liability was an initial resale of such Securities by such Initial
Purchaser.
(b) Each Purchaser severally and not jointly agrees to indemnify
and hold harmless each of the Company and the Guarantor, their respective
directors and officers, and each other person, if any, who controls the
Company or the Guarantor within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, to the same extent as the
foregoing indemnity from the Company and the Guarantor to the Purchasers, but
only with reference to written information relating to such Purchasers
furnished to the Company by or on behalf of the Purchasers specifically for
inclusion in the Preliminary Memorandum or the Final Memorandum (or in any
amendment thereof or supplement thereto). This indemnity agreement will be in
addition to any liability which any that the Purchasers may otherwise have,
including for any violation of Section 4 hereof. The Company and the
Guarantor acknowledge that the statements set forth in the last paragraph of
the cover page and 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 Purchasers for inclusion in the Preliminary
Memorandum or the Final Memorandum (or in any amendment thereof 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 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. 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 and the Guarantor on the one
hand and the Purchasers 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 and the Guarantor or the
Purchasers, as applicable, may be subject in such proportion as is appropriate
to reflect the relative benefits received by the Company and the Guarantor or
the Purchasers, as applicable, from the offering of the Securities; provided,
however, that in no case shall the Purchasers be responsible for any amount in
excess of the purchase discount or commission applicable to the Securities
purchased by such the Purchasers hereunder. If the allocation provided by the
immediately preceding sentence is unavailable for any reason, the Company and
the Guarantor on the one hand and the Purchasers on the other hand shall
contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company the Guarantor or
the Purchasers, as applicable, 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 and the Guarantor shall be
deemed to be equal to the total net proceeds from the offering of the
Securities (before deducting expenses), and benefits received by the Purchasers
shall be deemed to be equal to the total purchase discounts and commissions,
in each case as set forth on the cover page of the Final Memorandum. Relative
fault shall be determined by reference to whether any alleged untrue statement
or omission relates to information provided by the Company, the Guarantor or
the Purchasers, the intent of the parties and their relative knowledge, access
to information and opportunity to correct or prevent such untrue statement or
omission. The Company, the Guarantor and the Purchasers 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 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. The Purchasers' obligations to contribute as
provided in this Section 8(d) are several in proportion to their respective
purchase obligations and not joint. For purposes of this Section 8, each
person who controls a Purchaser within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act and each director, officer,
employee and such agent of Purchaser shall have the same rights to
contribution as such Purchaser, and each person who controls the Company
within the meaning of either the Securities Act or the Exchange Act and each
officer and director of the Company or the Guarantor shall have the same
rights to contribution as the Company and the Guarantor, subject in each case
to the applicable terms and conditions of this paragraph (d).
9. Default by a Purchaser. If any one or more Purchasers shall
fail to purchase and pay for any of the Securities agreed to be purchased by
such Purchaser hereunder and such failure to purchase shall constitute a
default in the performance of its or their obligations under this Agreement,
the remaining Purchasers shall be obligated severally to take up and pay for
(in the respective proportions which the principal amount of Securities set
forth opposite their names in Schedule I hereto bears to the aggregate
principal amount of Securities set forth opposite the names of all the
remaining Purchaser(s)) the Securities that the defaulting Purchaser or
Purchasers agreed but failed to purchase; provided, however, that in the event
that the aggregate principal amount of Securities that the defaulting
Purchaser or Purchasers agreed but failed to purchase shall exceed 10% of the
aggregate principal amount of Securities set forth in Schedule I hereto, the
remaining Purchasers shall have the right to purchase all, but shall not be
under any obligation to purchase any, of the Securities, and if such
non-defaulting Purchasers do not purchase all the Securities, this Agreement
will terminate without liability to any non-defaulting Purchaser, the Company
or the Guarantor. In the event of a default by any Purchaser as set forth in
this Section 9, the Closing Date shall be postponed for such period, not
exceeding seven days, as the Purchasers shall determine in order that the
required changes in the Final Memorandum or in any other documents or
arrangements may be effected. Nothing contained in this Agreement shall
relieve any defaulting, Purchaser of its liability, if any, to the Company or
any non-defaulting Purchaser for damages occasioned by its default hereunder.
10. Termination. This Agreement shall be subject to
termination in the absolute discretion of the Purchasers, by notice given to
the Company prior to delivery of and payment for the Securities, if prior to
such time (i) trading in any of the Company's securities shall have been
suspended by the Commission or the New York Stock Exchange or trading in
securities generally on the New York Stock Exchange shall have been suspended
or limited or minimum prices shall have been established on such Exchange,
(ii) a banking moratorium shall have been declared either by Federal or New
York State authorities or (iii) there shall have occurred any outbreak or
escalation of hostilities, declaration by the United States of a national
emergency or war or other calamity or crisis the effect of which on financial
markets is such as to make it, in the judgment of the Purchasers,
impracticable or inadvisable to proceed with the offering or delivery of the
Securities as contemplated by the Final Memorandum.
11. Representations and Indemnities to Survive. The
respective agreements, representations, warranties, indemnities and other
statements of the Company, the Guarantor or their respective officers and of
the Purchasers 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 Purchasers, the Company or the Guarantor or any of the officers, directors
or controlling persons referred to in Section 8 hereof, and will survive
delivery of and payment for the Securities. The provisions of Sections 7 and
8 hereof shall survive the termination or cancelation of this Agreement.
12. Notices. All communications hereunder will be in writing
and effective only on receipt, and, if sent to the Purchasers, will be mailed,
delivered or sent by fax and confirmed to them, care of Salomon Brothers Inc,
at Xxxxx Xxxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000; or, if sent to the
Company or the Guarantor, will be mailed, delivered or telegraphed and
confirmed to it at 000 Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxx 00000, attention: Xxx X.
Xxxxxxx, Xx.
13. 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 controlling persons referred to in Section 8
hereof, and, except as expressly set forth in Section 5(i) hereof, no other
person will have any right or obligation hereunder.
14. APPLICABLE LAW. THIS AGREEMENT WILL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD
TO THE CONFLICT OF LAW PROVISIONS THEREOF).
15. 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, New York are
authorized or obligated by law, executive order or regulation to close.
16. 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.
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 among the Company, the Guarantor and the Purchasers.
Very truly yours,
THE LTV CORPORATION
by
-------------------------------
Name:
Title:
LTV STEEL COMPANY, INC.
by
-------------------------------
Name:
Title:
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
SALOMON BROTHERS INC
CHASE SECURITIES INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
by SALOMON BROTHERS INC
by
______________________
Name:
Title:
SCHEDULE I
Principal
Amount of Securities
Purchasers to be Purchased
--------------------
Salomon Brothers Inc ..................... $180,000,000
Chase Securities Inc. .................... 60,000,000
Credit Suisse First Boston Corporation ... 60,000,000
------------
Total ..................... $300,000,000
============
EXHIBIT A
Selling Restrictions for Offers and
Sales outside the United States
(1)(a) The Securities have not been and will not be registered
under the Securities Act and may not be offered or sold within the United
States or to, or for the account or benefit of, U.S. persons except in
accordance with Regulation S or pursuant to an exemption from the registration
requirements of the Securities Act. Each Purchaser represents and agrees that,
except as otherwise permitted by Section 4(a)(i) of the Agreement to which
this is an exhibit, it has offered and sold the Securities, and will offer and
sell the Securities, (i) as part of their distribution at any time and (ii)
otherwise until 40 days after the later of the commencement of the offering
and the Closing Date, only in accordance with Rule 903 of Regulation S.
Accordingly, each Purchaser represents and agrees that neither it, nor any of
its affiliates nor any person acting on its or their behalf has engaged or
will engage in any directed selling efforts with respect to the Securities,
and that it and they have complied and will comply with the offering
restrictions requirement of Regulation S. Each Purchaser agrees that, at or
prior to the confirmation of sale of Securities (other than a sale of
Securities pursuant to Section 4(a)(i) of the Agreement to which this is an
exhibit), it shall have sent to each distributor, dealer or person receiving a
selling concession, fee or other remuneration that purchases Securities from
it during the restricted period a confirmation or notice to substantially the
following effect:
"The Securities covered hereby have not been registered
under the U.S. Securities Act of 1933 (the "Securities Act") and
may not be offered or sold within the United States or to, or for
the account or benefit of, U.S. persons (i) as part of their
distribution at any time or (ii) otherwise until 40 days after the
later of the commencement of the offering and September 22, 1997,
except in either case in accordance with Regulation S, Rule 144A
or another available exemption from registration under the
Securities Act. Terms used above have the meanings given to them
by Regulation S."
(b) Each Purchaser also represents and agrees that it has not
entered and will not enter into any contractual arrangement with any
distributor with respect to the distribution of the Securities, except with
its affiliates or with the prior written consent of the Company.
(c) Terms used in this Exhibit have the meanings given to them by
Regulation S.
(2) Each Purchaser represents and agrees that (i) it has not
offered or sold, and will not offer or sell, in the United Kingdom, by means
of any document, any Securities other than to persons whose ordinary business
it is to buy or sell shares or debentures, whether as principal or as agent
(except in circumstances which do not constitute an offer to the public within
the meaning of the Companies Xxx 0000 of Great Britain), (ii) it has complied
and will comply with all applicable provisions of the Financial Services Xxx
0000 of the United Kingdom with respect to anything done by it in relation to
the Securities in, from or otherwise involving the United Kingdom, and (iii)
it has only issued or passed on and will only issue or pass on in the United
Kingdom any document received by it in connection with the issue of the
Securities to a person who is of a kind described in Article 9(3) of the
Financial Services Xxx 0000 (Investment Advertisements) (Exemptions) Order
1988 or is a person to whom the document may otherwise lawfully be issued or
passed on.
