Gerdau Ameristeel Corporation 36,905,000 Common Shares Underwriting Agreement
Gerdau Ameristeel Corporation
36,905,000 Common Shares
November 1, 2007
X.X. Xxxxxx Securities Inc.
CIBC World Markets Corp.
As Representatives of the
several Underwriters listed
in Schedule 1 hereto
c/o X.X. Xxxxxx Securities Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
CIBC World Markets Corp.
As Representatives of the
several Underwriters listed
in Schedule 1 hereto
c/o X.X. Xxxxxx Securities Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Gerdau Ameristeel Corporation, a corporation continued under the Canada Business Corporation
Act (the “Company”), proposes to issue and sell to the several Underwriters listed in Schedule 1
hereto (the “Underwriters”), for whom you are acting as representatives (the “Representatives”), an
aggregate of 36,905,000 common shares, no par value per share, of the Company (the “Underwritten
Shares”) and, at the option of the Underwriters, up to an additional 5,535,750 common shares of the
Company (the “Option Shares”). The Underwritten Shares and the Option Shares are herein referred
to as the “Shares”. The common shares of the Company to be outstanding after giving effect to the
sale of the Shares and the Xxxxxx X.X. Shares (defined below) are herein referred to as the “Common
Shares”.
The Company has entered into a subscription agreement, dated the date hereof (the “Xxxxxx X.X.
Subscription Agreement”), with Gerdau Steel North America Inc., an affiliate of Xxxxxx X.X.,
pursuant to which Gerdau Steel North America Inc. will purchase from the Company 73,095,000 common
shares of the Company (the “Xxxxxx X.X. Initial Shares”) at the price per share set forth in Annex
B, the closing of which shall occur on the Closing Date (as defined below). The Xxxxxx X.X.
Subscription Agreement also provides that Gerdau Steel North America Inc. shall purchase, within
two days following the date of exercise of the over-allotment option described in Section 2(a)
hereof, the number of additional common shares of the Company necessary to maintain its approximate
66.5% ownership interest (the “Xxxxxx X.X. Additional Shares” and, together with the Xxxxxx X.X.
Initial Shares, the “Xxxxxx X.X. Shares”) that the Underwriters purchase pursuant to Section 2(a).
The purchase of the Xxxxxx X.X. Shares by Gerdau Steel North America Inc. is separate from the
public offering of the Shares as contemplated by this Agreement, and no commission shall be payable
to the Underwriters in
connection with the purchase of the Xxxxxx X.X. Shares by Gerdau Steel North America Inc.
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pursuant to the Xxxxxx X.X. Subscription Agreement. As set forth in Section 6(p) hereof, the
purchase of the Underwritten Shares by the Underwriters pursuant to Section 2 of this Agreement is
conditional on the closing of the purchase of the Xxxxxx X.X. Initial Shares by Gerdau Steel Inc.
The Company hereby confirms its agreement with the several Underwriters concerning the
purchase and sale of the Shares, as follows:
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and the
Canadian Prospectus shall be deemed to refer to and include the documents incorporated by reference
therein; and any reference herein to any “amendment” or “supplement” with respect to any of the
Canadian Preliminary Prospectus, the Canadian Base PREP Prospectus and the Canadian Prospectus
shall be deemed to refer to and include (i) the filing of any document with the Canadian
Authorities incorporated or deemed to be incorporated by reference therein after the date of filing
of such Canadian Preliminary Prospectus, Canadian Base PREP Prospectus or Canadian Prospectus and
(ii) any such document so filed.
The Company meets the general eligibility requirements for the use of Form F-10 under the
Securities Act of 1933, as amended (the “Securities Act”), and has prepared and filed with the
United States Securities and Exchange Commission (the “Commission”) a registration statement under
the Securities Act and the rules and regulations of the Commission (the “Rules and Regulations”) on
Form F-10 (No. 333-146647), including a related preliminary prospectus (which consists of the
Canadian Preliminary Prospectus with such deletions therefrom and additions thereto as are
permitted or required by Form F-10 and the applicable Rules and Regulations) (the “U.S. Preliminary
Prospectus”), for registration under the Securities Act of the offering and sale of the Shares (but
not the Xxxxxx X.X. Shares). The Company has filed with the Commission an amendment to such
registration statement including the U.S. pricing prospectus (which consists of the Canadian Base
PREP Prospectus with such deletions therefrom and additions thereto as are permitted or required by
Form F-10 and the applicable Rules and Regulations) (the “U.S. Pricing Prospectus”). The Company
has included in such filing, as amended at the effective date, all information required by the
Securities Act and the Rules and Regulations to be included in such registration statement. The
registration statement, in the form previously delivered to you, has become effective under the
Securities Act pursuant to Rule 467(a) under the Securities Act. Such registration statement, as
amended, including any exhibits and all documents incorporated therein by reference, as of the time
it became effective, is referred to herein as the “Registration Statement.” In connection with the
filing of the Registration Statement, the Company has filed with the Commission an appointment of
agent for service of process upon the Company on Form F-X under the Securities Act. The Company
will file with the Commission a U.S. supplemental prospectus in accordance with General Instruction
II.L of Form F-10 (which shall consist of the Canadian Prospectus with such deletions therefrom and
additions thereto as are permitted or required by Form F-10 and the applicable Rules and
Regulations) (the “U.S. Prospectus”). As filed, such U.S. Prospectus shall contain all information
required by the Securities Act and the Rules and Regulations and, except for the inclusion of the
PREP Information or to the extent the Representatives shall agree to a modification, shall be in
all respects in the form of the U.S. Pricing Prospectus. No stop order suspending the
effectiveness of the Registration Statement has been issued under the Securities Act and no
proceedings for that purpose have been instituted or are pending or, to the knowledge of the
Company, are contemplated by the Commission and any request on the part of the Commission for
additional information has been complied with.
Any reference herein to the U.S. Preliminary Prospectus, the U.S. Pricing Prospectus and the
U.S. Prospectus shall be deemed to refer to and include the documents incorporated by
reference therein; and any reference herein to any “amendment” or “supplement” with respect to any
of the U.S. Preliminary Prospectus, the U.S. Pricing Prospectus and the U.S. Prospectus shall be
deemed to refer to and include (i) the filing of any document with the Canadian Authorities or the
Commission
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incorporated or deemed to be incorporated by reference therein after the date of filing
of such U.S. Preliminary Prospectus, U.S. Pricing Prospectus or U.S. Prospectus and (ii) any such
document so filed. As used herein, “Preliminary Prospectuses” shall mean, collectively, the
Canadian Preliminary Prospectus and the U.S. Preliminary Prospectus; “Pricing Prospectuses” shall
mean, collectively, the Canadian Base PREP Prospectus and the U.S. Pricing Prospectus; and
“Prospectuses” shall mean, collectively, the Canadian Prospectus and the U.S. Prospectus.
At or prior to the time when sales of the Shares were first made (the “Time of Sale”), the
Company had prepared the following information (collectively with the pricing information set forth
on Annex B, the “Time of Sale Information”): the U.S. Pricing Prospectus and the Canadian Base PREP
Prospectus, dated November 1, 2007, and each “free-writing prospectus” (as defined pursuant to Rule
405 under the Securities Act) listed on Annex B hereto.
In addition, the Company agrees to issue and sell the Option Shares to the several
Underwriters as provided in this Agreement, and the Underwriters, on the basis of the
representations, warranties and agreements set forth herein and subject to the conditions set forth
herein, shall have the option to purchase, severally and not jointly, from the Company the Option
Shares at the Purchase Price less an amount per share equal to any dividends or distributions
declared by the Company and payable on the Underwritten Shares but not payable on the Option
Shares.
If any Option Shares are to be purchased, the number of Option Shares to be purchased by each
Underwriter shall be the number of Option Shares which bears the same ratio to the aggregate number
of Option Shares being purchased as the number of Underwritten Shares set forth opposite the name
of such Underwriter in Schedule 1 hereto (or such number increased as set forth in Section 10
hereof) bears to the aggregate number of Underwritten Shares being purchased from the Company by
the several Underwriters, subject, however, to such adjustments to eliminate any fractional Shares
as the Representatives in their sole discretion shall make.
The Underwriters may exercise the option to purchase the Option Shares at any time in whole,
or from time to time in part, on or before the thirtieth day following the Closing Date (as
hereinafter defined), by written notice from the Representatives to the Company. Such notice shall
set forth the aggregate number of Option Shares as to which the option is being exercised and the
date and time when the Option Shares are to be delivered and paid for which may be the same date
and time as the Closing Date but shall not be earlier than the Closing Date nor later
than the seventh full business day (as hereinafter defined) after the date of such notice (unless
such time and date are postponed in accordance with the provisions of Section 10 hereof). Any
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such
notice shall be given at least two business days prior to the date and time of delivery specified
therein.
(b) The Company understands that the Underwriters intend to make a public offering of the
Shares in the United States and in the Canadian Jurisdictions, either directly or through their
respective U.S. or Canadian broker-dealer affiliates upon the terms set forth in the Prospectuses,
as soon after the effectiveness of this Agreement as in the judgment of the Representatives is
advisable, and initially to offer the Shares on the terms set forth in the Time of Sale Information
and in the Prospectuses. The Company acknowledges and agrees that the Underwriters may offer and
sell Shares to or through any affiliate of an Underwriter and that any such affiliate may offer and
sell Shares purchased by it to or through any Underwriter.
The parties agree that any sale of Shares to a purchaser pursuant to an order received from a
dealer (including the Underwriters and their respective affiliates) that is registered pursuant to
any of the Canadian Securities Laws shall be made from the Underwritten Shares and that the
Underwriters shall deliver or arrange to make delivery of a copy of the Canadian Prospectus to such
purchaser in accordance with Canadian Securities Laws.
(c) Payment for the Shares shall be made by wire transfer in immediately available (same day)
funds to the account specified by the Company to the Representatives in the case of the
Underwritten Shares, at the offices of Torys LLP in Toronto, Ontario at 8:30 A.M. New York City
time on November 7, 2007, or at such other time or place on the same or such other date, not later
than the fifth business day thereafter, as the Representatives and the Company may agree upon in
writing or, in the case of the Option Shares, on the date and at the time and place specified by
the Representatives in the written notice of the Underwriters’ election to purchase such Option
Shares. The time and date of such payment for the Underwritten Shares is referred to herein as the
“Closing Date” and the time and date for such payment for the Option Shares, if other than the
Closing Date, is herein referred to as the “Additional Closing Date”.
Payment for the Shares to be purchased on the Closing Date or the Additional Closing Date, as
the case may be, shall be made against delivery to the Representatives for the respective accounts
of the several Underwriters of the Shares to be purchased on such date in definitive form
registered in such names and in such denominations as the Representatives shall request in writing
not later than two full business days prior to the Closing Date or the Additional Closing Date, as
the case may be, with any transfer taxes payable in connection with the sale of such Shares duly
paid by the Company. Delivery of the Shares shall be made through the facilities of the Depository
Trust Company unless the Representatives shall otherwise instruct.
(d) As compensation to the Underwriters for their commitments hereunder, the Company will pay,
or cause to be paid, to CIBC World Markets Corp., for the accounts of the several Underwriters, an
amount equal to US$0.4897 per Share to be delivered by the Company hereunder on the Closing Date or the
Additional Closing Date, as the case may be. On November 7, 2007, or on such other date, not later
than the fifth business day thereafter, as the Representatives and the Company may agree upon in
writing, or, in the case of the Option
Shares, on the date and time specified by the Representatives in the written notice of the
Underwriters’ election to purchase such Option Shares the Company will pay or cause to be paid
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by
wire transfer, in immediate available funds, such commission to the account specified by CIBC World
Markets Corp.
(e) The Company acknowledges and agrees that the Underwriters are acting solely in the
capacity of an arm’s length contractual counterparty to the Company with respect to the offering of
Shares contemplated hereby (including in connection with determining the terms of the offering) and
not as a financial advisor or a fiduciary to, or an agent of, the Company or any other person.
Additionally, neither the Representatives nor any other Underwriter is advising the Company or any
other person as to any legal, tax, investment, accounting or regulatory matters in any
jurisdiction. The Company shall consult with its own advisors concerning such matters and shall be
responsible for making its own independent investigation and appraisal of the transactions
contemplated hereby, and the Underwriters shall have no responsibility or liability to the Company
with respect thereto. Any review by the Underwriters of the Company, the transactions contemplated
hereby or other matters relating to such transactions will be performed solely for the benefit of
the Underwriters and shall not be on behalf of the Company.
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be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided that the Company makes
no representation and warranty with respect to any statements or omissions made in reliance upon
and in conformity with information relating to any Underwriter furnished to the Company in writing
by, or on behalf of, such Underwriter through the Representatives expressly for use in any U.S.
Preliminary Prospectus or U.S. Pricing Prospectus, it being understood and agreed that the only
such information furnished by or on behalf of any Underwriter consists of the information described
as such in Section 7(b) hereof.
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and
agreed that the only such information furnished by or on behalf of any Underwriter consists of the
information described as such in Section 7(b) hereof. Each such Issuer Free Writing Prospectus, as
of its issue date and at all subsequent times through the completion of the public offer and sale
of the Shares or until any earlier date that the Company notified or notifies the Representatives
as described in Section 4(f), did not, does not and will not include any information that
conflicted, conflicts or will conflict with the information contained in the Registration Statement
or the Prospectuses, including any document incorporated by reference therein and any Preliminary
Prospectuses or Pricing Prospectuses deemed to be a part thereof that has not been superseded or
modified.
The documents incorporated by reference in the Registration Statement, the U.S. Prospectus or
the Time of Sale Information, when they were or hereafter are filed with the Commission, as the
case may be, conformed, or will conform, in all material respects to the
requirements of the Securities Act and the Securities Exchange Act of 1934, as amended, and the
rules and regulation of the Commission thereunder (collectively, the “Exchange Act”) and none
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of
such documents contained, or will contain, an untrue statement of a material fact or omitted or
will omit to state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made, not misleading.
(g) Reporting Issuer. The Company is a reporting issuer under the securities laws of each
Canadian Jurisdiction that recognizes the concept of reporting issuer, is not in default under
applicable Canadian Securities Laws and is not on the list of defaulting reporting issuers
maintained by the Canadian Authorities in each such Canadian Jurisdiction that maintains such a
list; the Company is subject to the reporting requirements of the Exchange Act and is current in
its filings thereunder; the Company is in compliance with its obligations under the rules of the
Toronto Stock Exchange (the “TSX”) and the New York Stock Exchange (the “NYSE”); the Company has
not filed any confidential material change reports which remain confidential at the date hereof.
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the
related notes thereto included or incorporated by reference in the Registration Statement, the Time
of Sale Information and the Prospectuses present fairly in all material respects the information
shown therein, have been prepared in accordance with Canadian Securities Laws with respect to pro
forma financial statements, and have been properly compiled on the bases described therein, and the
assumptions used in the preparation thereof are reasonable and the adjustments used therein are
appropriate to give effect to the transactions and circumstances referred to therein.
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validly existing and in good standing under the laws of its jurisdiction of incorporation,
amalgamation, organization, or continuance, as the case may be, and has the corporate or
partnership or limited liability company power and authority to own, lease and operate its
properties and to conduct its business as described in the Registration Statement, the Time of Sale
Information and the Prospectuses; and the Company and each Significant Subsidiary is duly qualified
or registered to transact business in any other jurisdiction in which it carries on business, and
is in good standing under the laws of each other jurisdiction in which it owns or leases property
or conducts any business so as to require such qualification, except where the failure so to
qualify or register or be in good standing would not result in a Material Adverse Effect.
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authorized no later than the date on which the grant of such Stock Option was by its terms to be
effective (the “Grant Date”) by all necessary corporate action, including, as applicable, approval
by the board of directors of the Company (or a duly constituted and authorized committee thereof)
and any required shareholder approval by the necessary number of votes or written consents, and the
award agreement governing such grant (if any) was duly executed and delivered by each party
thereto, (iii) each such grant was made in accordance with the terms of the Company Stock Plans,
the Exchange Act, Canadian Securities Laws and all other applicable laws and regulatory rules or
requirements, including the rules of the New York Stock Exchange and the Toronto Stock Exchange,
(iv) the per share exercise price of each Stock Option was equal to the fair market value of a
common share of the Company on the applicable Grant Date and (v) each such grant was properly
accounted for in accordance with U.S. GAAP in the financial statements (including the related
notes) of the Company and disclosed in the Company’s filings with the Commission and the Canadian
Authorities in accordance with the Exchange Act and the Canadian Securities Laws respectively and
all other applicable laws. The Company has not knowingly granted, and there is no and has been no
policy or practice of the Company of granting, Stock Options prior to, or otherwise coordinating
the grant of Stock Options with, the release or other public announcement of material information
regarding the Company or its subsidiaries or their results of operations or prospects.
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(ii) in default
in the performance or observance of any obligation, agreement, covenant or condition contained in
any contract, indenture, mortgage, deed of trust, loan or credit agreement, note, lease, license or
other agreement or instrument to which the Company or any of its subsidiaries, as the case may be,
is a party or by which it or any of its subsidiaries, as the case may be, may be bound, or to which
any of the property or assets of the Company or any of its subsidiaries, as the case may be, is
subject (collectively, “Agreements and Instruments”), except, in the case of clause (ii) for such
violations or defaults that would not result in a Material Adverse Effect. The execution, delivery
and performance of this Agreement and the Xxxxxx X.X. Subscription Agreement, and the consummation
of the transactions contemplated herein and therein and in the Time of Sale Information and the
Prospectuses (including the authorization, issuance, sale and delivery of the Shares and the Xxxxxx
X.X. Shares and the use of the proceeds from the sale of the Shares and the Xxxxxx X.X. Shares as
described in the Registration Statement, the Time of Sale Information and the Prospectuses under
the caption “Use of Proceeds”), and compliance by the Company with its obligations hereunder and
thereunder have been duly authorized by all necessary corporate action and do not and will not,
whether with or without the giving of notice or passage of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as defined below) under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property or assets of the
Company or any subsidiary pursuant to, the Agreements and Instruments (except for such conflicts,
breaches or defaults, Repayment Events or liens, charges or encumbrances that would not result in a
Material Adverse Effect), nor will such actions result in any violation or conflict with the
provisions of the articles or by-laws or similar organizational documents of the Company or any
subsidiary or any applicable law, statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality, court, domestic or foreign, or stock exchange having
jurisdiction over the Company or any subsidiary or any of their assets, properties or operations.
As used herein, a “Repayment Event” means any event or condition which gives any creditor of the
Company or of a subsidiary of the Company or the holder of any note, debenture or other evidence of
indebtedness (or any person acting on such holder’s behalf) the right to require the repurchase,
redemption or repayment of all or a portion of such indebtedness by the Company or any subsidiary.
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thereunder; the aggregate of all
pending legal or governmental proceedings to which the Company or any subsidiary is a party or of
which any of their respective property or assets is the subject which are not described in the
Registration Statement, the Time of Sale Information and the Prospectuses, including ordinary
routine litigation, could not reasonably be expected to result in a Material Adverse Effect.
(u) Absence of Further Requirements. No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any court or governmental authority or
agency is necessary or required for (A) the performance by the Company of its obligations
hereunder, in connection with the offering, issuance or sale of the Shares hereunder or the
consummation of the transactions contemplated by this Agreement, or (B) the performance by the
Company of its obligations under the Xxxxxx X.X. Subscription Agreement, except in each case (1)
such as have been already obtained under the Securities Act or such as have been already obtained
or as may be required under state securities laws or Blue Sky laws and (2) such as have been
obtained, or as may be required, under Canadian Securities Laws.
(v) Possession of Licenses and Permits. Except in each case as would not individually or in
aggregate have a Material Adverse Effect, (A) the Company and its subsidiaries possess such
permits, certificates, licenses, approvals, consents and other authorizations (collectively,
“Governmental Licenses”) issued by the appropriate federal, provincial, state, local or foreign
regulatory agencies or bodies necessary to conduct the business now operated by them; (B) the
Company and its subsidiaries are in compliance with the terms and conditions of all such
Governmental Licenses; (C) all of the Governmental Licenses are valid and in full force and effect;
and (D) neither the Company nor any of its subsidiaries has received any notice of proceedings
relating to the revocation or material modification of any such Governmental Licenses.
(w) Title to Property. The Company and its subsidiaries have good and marketable title to all
real property owned by the Company and its subsidiaries and good title to all other properties
owned by them, in each case that is material to the business of the Company and its
subsidiaries considered as one enterprise, in each case, free and clear of all mortgages,
pledges,
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liens, security interests, claims, restrictions or encumbrances of any kind except such as
(A) are described in the Registration Statement, the Time of Sale Information and the Prospectuses
or (B) do not, singly or in the aggregate, materially affect the value of such property and do not
materially interfere with the use made and proposed to be made of such property by the Company or
any of its subsidiaries; and all of the leases and subleases material to the business of the
Company and its subsidiaries, considered as one enterprise, and under which the Company or any of
its subsidiaries holds properties described in the Registration Statement, the Time of Sale
Information and the Prospectuses, are in full force and effect, except where a failure of such a
lease or sublease to be in full force and effect would not have a Material Adverse Effect, and
neither the Company nor any subsidiary has any notice of any material claim of any sort that has
been asserted by anyone adverse to the rights of the Company or any subsidiary under any of the
leases or subleases mentioned above, or affecting or questioning the rights of the Company or such
subsidiary to the continued possession of the leased or subleased premises under any such lease or
sublease, except where such would not have a Material Adverse Effect.
(x) Investment Company Act. The Company is not, and upon the issuance and sale of the Shares
as herein contemplated or the sale of the Xxxxxx X.X. Shares and the application of the net
proceeds therefrom as described in the Registration Statement, the Time of Sale Information and the
Prospectuses will not be, an “investment company” or an entity “controlled” by an “investment
company” as such terms are defined in the Investment Company Act of 1940, as amended (the “1940
Act”).
(y) Environmental Laws. Except as described in the Registration Statement, the Time of Sale
Information and the Prospectuses and except as would not, singly or in the aggregate, be reasonably
expected to result in a Material Adverse Effect, (A) neither the Company nor any of its
subsidiaries is in violation of any federal, provincial, state, local, municipal or foreign
statute, law, rule, regulation, ordinance, code, legally binding policy or rule of common law or
civil law or any applicable and binding judicial or administrative interpretation thereof,
including any judicial or administrative order, consent, decree or judgment, relating to pollution
or protection of human health, the environment (including, without limitation, ambient air, surface
water, groundwater, land surface or subsurface strata) or wildlife, including, without limitation,
laws and regulations relating to the release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum or petroleum products
(collectively, “Hazardous Materials”) or to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous Materials (collectively,
“Environmental Laws”), (B) the Company and its subsidiaries have all permits, authorizations and
approvals required under any applicable Environmental Laws and are in compliance with their
requirements, (C) there are no pending or, to the knowledge of the Company, threatened
administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens,
notices of noncompliance or violation, investigations or proceedings relating to any Environmental
Laws against the Company or any of its subsidiaries and (D) there are no events or circumstances
that might reasonably be expected to form the basis of an order for clean up or remediation, or an
action, suit or proceeding by any private party or governmental body or agency, against or
affecting the Company or any of its subsidiaries relating to Hazardous Materials or any
Environmental Laws.
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(z) Benefit Plan Compliance. Each employee benefit plan within the meaning of Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and all other employee
benefit, health, welfare, supplemental unemployment benefit, bonus, pension, profit sharing,
deferred compensation, stock compensation, stock purchase, retirement, hospitalization insurance,
medical, dental, legal, disability and similar plans or arrangements or practices maintained,
administered or contributed to by the Company or any of its affiliates or relating to the employees
or former employees of the Company or any of its affiliates (the “Employee Plans”) are and have
been established, registered, qualified, invested and administered, in all material respects, in
accordance with their terms, all laws, regulations, orders or other legislative, administrative or
judicial promulgations applicable to the particular Employee Plan including but not limited to
ERISA and the Internal Revenue Code of 1986, as amended (the “Code”). All material obligations
regarding the Employee Plans have been satisfied, there are no material outstanding defaults or
violations by any party thereto, no prohibited transactions (within the meaning of Section 406 of
ERISA or Section 4975 of the Code (excluding transactions effected pursuant to a statutory or
administrative exemption)) or reportable events (within the meaning of Section 4043 of the Code)
have occurred with respect to such Employee Plan, and no material taxes, penalties or fees are
owing or exigible under any of the Employee Plans. No Employee Plan, nor any related trust or
other funding medium thereunder, is subject to any pending investigation, examination or other
proceeding, action or claim initiated by any governmental agency or instrumentality, or by any
other party (other than routine claims for benefits), and to the knowledge of the Company there
exists no state of facts which after notice or lapse of time or both could reasonably be expected
to give rise to any such investigation, examination or other proceeding, action or claim or to
affect the registration of any Employee Plan required to be registered. All material contributions
or premiums required to be made by the Company or any of its affiliates under the terms of each
Employee Plan or by applicable laws have been made in all material respects in a timely fashion in
accordance with applicable laws and the terms of the Employee Plans. Except as set forth in the
Registration Statement, the Time of Sale Information and the Prospectuses or except for such
underfunding that is not material, each Employee Plan is in compliance with applicable U.S. and
Canadian regulatory and funding requirements and filings. For each Employee Plan that is subject
to the funding rules of Section 412 of the Code or Section 302 of ERISA, no accumulated funding
deficiency (as defined in Section 412 of the Code) has been incurred, whether or not waived.
17
required; no material change reports or other documents have been filed on a confidential
basis with the Canadian Authorities; there are no documents required to be filed with the Canadian
Authorities in connection with the Canadian Prospectus that have not been filed as required; there
are no contracts, documents or other materials required to be described or referred to in the
Registration Statement, the Time of Sale Information and the Prospectuses or to be filed as
exhibits to the Registration Statement that are not described, referred to or filed as required.
(dd) Taxes. The Company and its subsidiaries have filed all material United States and
Canadian federal, state, provincial, local and foreign income, payroll, franchise and other tax
returns and have paid all taxes shown as due thereon or with respect to any of their properties or
any transactions to which they are a party, and there is no tax deficiency that has been, or to the
knowledge of the Company is likely to be, asserted against the Company or any of its subsidiaries
or any of their properties or assets that would result in a Material Adverse Effect.
(ee) Insurance. Except as disclosed in the Registration Statement, the Time of Sale
Information and the Prospectuses, the Company and its subsidiaries are insured by reputable
insurers against such losses and risks and in such amounts as the Company believes is reasonable in
light of the business it now conducts; each of the Company and its subsidiaries have no 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 result in a Material Adverse Effect.
(ff) Compliance with Laws. The Company and its subsidiaries are in compliance with, and
conduct their businesses in conformity with, all applicable U.S., Canadian and foreign federal,
state, provincial and local laws, rules and regulations and all applicable ordinances, judgments,
decrees, orders and injunctions of any court or governmental agency or body, the TSX and the NYSE,
except where the failure to be in compliance or conformity would not result in a Material Adverse
Effect.
(gg) No Broker. Other than as contemplated by this Agreement, there is no broker, finder or
other party that is entitled to receive from the Company any brokerage or finder’s fee or other fee
or commission as a result of any of the transactions contemplated by this Agreement or the Xxxxxx
X.X. Subscription Agreement.
(hh) Proceedings. To the knowledge of the Company, after due inquiry, none of Xxxxxx X.X. or
the directors or executive officers of the Company is or has been during the past 10 years subject
to prior criminal or bankruptcy proceedings in the United States, Canada or elsewhere or has been,
during the past 10 years, a director or executive officer of any issuer that, while the person was
acting in that capacity, (i) was the subject of a cease trade or similar order or an order that
denied the relevant issuer access to an exemption under applicable securities laws, (ii) was the
subject of an event that resulted, after the person ceased to be a director or executive officer of
the issuer, in the issuer being the subject of an order of the type described in (i), above, or
(iii) within a year of the person ceasing to act in that capacity, became bankrupt, made a proposal
under any legislation relating to bankruptcy or insolvency or was subject to or instituted any
proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or
trustee appointed to hold its assets.
18
(ii) Non-Arm’s Length Transactions. To the knowledge of the Company, after due inquiry,
except as disclosed in writing to the Underwriters or in the Registration Statement, the Time of
Sale Information and the Prospectuses, neither the Company nor any subsidiary is a party to any
contract, agreement or understanding with any officer, director, employee or any other person not
dealing at arm’s length with the Company or any subsidiary which is required to be disclosed by
applicable Canadian Securities Laws.
(jj) Stamp Tax. No stamp duty, registration or documentary taxes, duties or similar charges
are payable under the federal laws of Canada or the laws of the Province of Ontario in connection
with the creation, issuance, sale and delivery to the Underwriters of the Shares or the
authorization, execution, delivery and performance of this Agreement or the resale of Shares by an
Underwriter to U.S. residents.
(kk) French Language Documents. The French language version of each of the Canadian Base PREP
Prospectus and the Canadian Prospectus, together with each document incorporated therein by
reference, including the financial statements and other financial data contained therein, is in all
material respects a complete and accurate translation of the English language versions thereof, and
is not susceptible to any materially different interpretation with respect to any material matter
contained therein.
(ll) No Unlawful Payments. Neither the Company nor any of its subsidiaries nor, to the
knowledge of each of the Company and its subsidiaries, any director, officer, agent, employee or
other person acting on behalf of the Company or any of its subsidiaries has (A) used any corporate
funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to
political activity; (B) made any direct or indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds; (C) violated or is in violation of any
provision of the Foreign Corrupt Practices Act of 1977, as amended or the Corruption of Foreign
Public Officials Act (Canada); or (D) made any bribe, rebate, payoff, influence payment, kickback
or other unlawful payment.
(mm) Disclosure Controls. The Company maintains disclosure controls and procedures as
required by Rule 13a-15 or Rule 15d-15 under the Exchange Act and as contemplated by the
certifications required under Form 52-109F1 and Form 52-109F2 under Multilateral Instrument 52-109
– Certification of Disclosure in Issuers’ Annual and Interim Filings (“MI 52-109”); such controls
and procedures are effective to ensure that all material information concerning the Company is
recorded, processed, summarized and reported within applicable time periods and is made known, on a
timely basis, to the individuals responsible for the preparation of the Company’s filings with the
Commission and the Canadian Authorities, and the Company has delivered to counsel for the
Underwriters copies of all descriptions of and all polices, manuals and other documents, if any,
promulgating such disclosure controls and procedures.
(nn) Accounting Controls. The Company and its subsidiaries maintain systems of “internal
control over financial reporting” (as defined in Rule 13a-15(f) of the Exchange Act and MI 52-109)
that comply with the requirements of the Exchange Act and MI 52-109 and have been designed by, or
under the supervision of, their respective principal executive and principal financial officers, or
persons performing similar functions, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements
for
19
external purposes in accordance with United States generally accepted accounting principles,
including, but not limited to internal accounting controls sufficient to provide reasonable
assurance (A) that transactions are executed in accordance with management’s general or specific
authorizations and that records are maintained that in reasonable detail accurately and fairly
reflect the transactions and dispositions of the assets of the Company and its subsidiaries; (B)
that transactions are recorded as necessary to permit preparation of financial statements in
conformity with United States generally accepted accounting principles and to maintain asset
accountability; (C) that access to assets is permitted only in accordance with management’s general
or specific authorization; (D) that the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken with respect to any
differences; and (E) regarding prevention or timely detection of unauthorized acquisition, use or
disposition of the Company’s assets that could have a material effect on the Company’s annual
financial statements or interim financial statements. There are no significant deficiencies or
material weaknesses in the Company’s internal controls. The Company’s auditors and the Audit
Committee of the Board of Directors of the Company have been advised of: (i) all significant
deficiencies and material weaknesses in the design or operation of internal controls over financial
reporting which are reasonably likely to adversely affect the Company’s ability to record, process,
summarize and report financial information; and (ii) any fraud, whether or not material, that
involves management or other employees who have a significant role in the Company’s internal
controls over financial reporting.
(oo) Xxxxxxxx-Xxxxx Act of 2002. The Company has complied with all of the applicable
provisions of the Xxxxxxxx-Xxxxx Act of 2002, and, to the knowledge of the Company, the Company’s
directors and executive officers, in their capacities as such, have complied with all of the
applicable provisions of the Xxxxxxxx-Xxxxx Act of 2002 in all material respects.
(pp) Status under the Securities Act. The Company is a “foreign issuer” within the meaning of
Rule 902(e) under the Securities Act. At the time of filing the Registration Statement and any
post-effective amendments thereto, at the earliest time thereafter that the Company or any offering
participant made a bona fide offer (within the meaning of Rule 164(h)(2) under the Securities Act)
of the Shares and at the date hereof, the Company was not and is not an “ineligible issuer,” as
defined in Rule 405 under the Securities Act
(qq) Statements in Registration Statement and Prospectuses. There is no franchise, contract
or other document of a character required to be described in the Registration Statement, the Time
of Sale Information or the Prospectuses, or to be filed as an exhibit thereto, which is not
described or filed as required; and the statements in the Pricing Prospectuses and the Prospectuses
under the headings “Certain Tax Considerations for U.S. Holders”, in the Canadian Prospectus under
“Eligibility for Investment” and “Statutory Rights of Withdrawal and Rescission” and in the
Registration Statement under “Part II — Indemnification”, insofar as such statements summarize
legal matters, agreements, documents or proceedings discussed therein, are, in all material
respects, accurate and fair summaries of such legal matters, agreements, documents or proceedings.
20
(rr) No Ratings. There are no securities or preferred stock of or guaranteed by the Company
or any of its subsidiaries that are rated by a “nationally recognized statistical rating
organization,” as such term is defined by the Commission for purposes of Rule 436(g)(2) under the
Securities Act.
(ss) No Undisclosed Relationships. Except as disclosed in the Registration Statement, the
Time of Sale Information and the Prospectuses, neither the Company nor any of its subsidiaries (i)
has any material lending or other relationship with any bank or lending affiliate of any of the
Underwriters and (ii) does not intend to use any of the proceeds from the sale of the Shares
hereunder to repay any outstanding debt owed to any affiliate of any of the Underwriters.
(tt) Compliance with Money Laundering Laws. The operations of the Company and its
subsidiaries are and have been conducted at all times in compliance with applicable financial
recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of
1970, as amended, the Proceeds of Crime (Money Laundering) Act (Canada), the money laundering
statutes of all applicable jurisdictions, the rules and regulations thereunder and any related or
similar rules, regulations or guidelines, issued, administered or enforced by any governmental
agency to which the Company and its subsidiaries are subject (collectively, the “Money Laundering
Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority
or body or any arbitrator involving the Company or any of its subsidiaries with respect to the
Money Laundering Laws is pending or, to the best knowledge of the Company, threatened.
(uu) Compliance with OFAC. None of the Company, any of its subsidiaries or, to the knowledge
of the Company, any director, officer, agent, employee or affiliate of the Company or any of its
subsidiaries is currently subject to any U.S. sanctions administered by the Office of Foreign
Assets Control of the U.S. Department of the Treasury (“OFAC”); and the Company will not directly
or indirectly use the proceeds of the offering of the Shares hereunder, or lend, contribute or
otherwise make available such proceeds to any subsidiary, joint venture partner or other person or
entity, for the purpose of financing the activities of any person currently subject to any U.S.
sanctions administered by OFAC.
(vv) Forward-Looking Statements. No forward-looking statement or forward-looking information
(within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act or as
defined under Canadian Securities Laws, as applicable) contained in the Registration Statement, the
Time of Sale Information and the Prospectuses has been made or reaffirmed without a reasonable
basis or has been disclosed other than in good faith or does not reflect the Company’s good faith
best estimate of the matters described therein and the assumptions used in the preparation of any
projections are reasonable.
(ww) Transfer Agent. CIBC Mellon Trust Company has been duly appointed the transfer agent and
registrar for the Common Shares and its U.S. affiliate, Mellon Investor Services LLC, is the duly
appointed U.S. co-transfer agent of the Company with respect to the Common Shares.
21
(a) Required Filings. The Company will cause the Prospectuses, prepared in compliance with
all applicable Canadian and U.S. securities laws, and any supplement thereto to be filed, each in a
form approved by the Representatives, with the Canadian Authorities in accordance with the PREP
Procedures (in the case of the Canadian Prospectus) and with the Commission pursuant to General
Instruction II.L of Form F-10 (in the case of the U.S. Prospectus) within the time period
prescribed and will provide evidence satisfactory to the Representatives of such timely filings;
will file any Issuer Free Writing Prospectus to the extent required by Rule 433 under the
Securities Act; and the Company will furnish copies of the Prospectus and each Issuer Free Writing
Prospectus (to the extent not previously delivered) to the Underwriters in New York City and
Toronto prior to 10:00 A.M., New York City time, on the business day next succeeding the date of
this Agreement in such quantities as the Representatives may reasonably request.
22
(iii)
when any supplement to the Prospectuses or any Issuer Free Writing Prospectus or any amendment to
the Prospectuses has been filed; (iv) of any request by the Commission or the Canadian Authorities
for any amendment to the Registration Statement or any amendment or supplement to the Prospectuses,
as applicable, or the receipt of any comments or communications from the Commission or the Canadian
Authorities relating to the Registration Statement or the Prospectuses or any other request by the
Commission or the Canadian Authorities for any additional information or the receipt of any
comments or communications from the TSX or NYSE relating to the listing of the Shares; (v) of the
issuance by the Canadian Authorities or the Commission of any cease trade order relating to the
Company or the Shares or any stop order suspending the effectiveness of the Canadian Prospectus or
the Registration Statement, as applicable, or any post-effective amendment thereto, or suspending
the use of any Prospectuses or any Issuer Free Writing Prospectus or, in each case, of the
initiation or threatening of any proceedings therefor; (vi) of the occurrence of any event within
the Prospectus Delivery Period as a result of which the Prospectuses, the Time of Sale Information
or any Issuer Free Writing Prospectus as then amended or supplemented would include any untrue
statement of a material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances existing when the
Prospectuses, the Time of Sale Information or any such Issuer Free Writing Prospectus is delivered
to a purchaser, not misleading; and (vii) of the receipt by the Company of any notice with respect
to any suspension of the qualification of the Shares for offer and sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose; and the Company will use its
reasonable best efforts to prevent the issuance of any such cease trade order or order suspending
the effectiveness of the Registration Statement, preventing or suspending the use of the Pricing
Prospectuses or the Prospectuses or suspending any such qualification of the Shares and, if any
such order is issued, will use its reasonable best efforts to promptly obtain the withdrawal
thereof.
23
above, file with the Commission (to the extent required) and furnish to the Underwriters and to
such dealers as the Representatives may designate, such amendments or supplements to the Time of
Sale Information as may be necessary so that the statements in the Time of Sale Information as so
amended or supplemented will not, in light of the circumstances, be misleading or so that the Time
of Sale Information will comply with applicable securities laws.
24
the approval
of the NYSE for the listing of the Shares (subject to notice of issuance). The Company will use
its best efforts to maintain the listing of its Common Shares on the TSX and NYSE and will file
with the TSX and the NYSE all documents and notices required by the TSX and NYSE, respectively.
25
(a) It has not and will not use, authorize use of, refer to or participate in the planning for
use of, any “free writing prospectus”, as defined in Rule 405 under the Securities Act (which term
includes any use of any written information furnished to the Commission by the Company and not
incorporated by reference into the Registration Statement and any press release issued by the
Company) other than (i) a free writing prospectus that contains no “issuer information” (as defined
in Rule 433(h)(2) under the Securities Act) that was not included (including through incorporation
by reference) in the U.S. Pricing Prospectus or a previously filed Issuer Free Writing Prospectus,
(ii) any Issuer Free Writing Prospectus listed on Annex B or prepared pursuant to Section 3(d) or
Section 4(d) above (including any electronic roadshow), or (iii) any free writing prospectus
prepared by such Underwriter and approved by the Company in advance in writing (each such free
writing prospectus referred to in clauses (i) or (iii), an “Underwriter Free Writing Prospectus”).
(b) It has not and will not, without the prior written consent of the Company, use any free
writing prospectus that contains the final terms of the Shares unless such terms have previously
been included in a free writing prospectus filed with the Commission; provided that Underwriters
may use a term sheet substantially in the form of Annex C hereto without the consent of the
Company; provided further that any Underwriter using such term sheet shall notify the Company, and
provide a copy of such term sheet to the Company, prior to, or substantially concurrently with, the
first use of such term sheet.
(c) It is not subject to any pending proceeding under Section 8A of the Securities Act with
respect to the offering (and will promptly notify the Company if any such proceeding against it is
initiated during the Prospectus Delivery Period).
26
proceeding for such purpose
or pursuant to Section 8A under the Securities Act shall be pending before or threatened by the
Commission, no order having the effect of ceasing or suspending the distribution of the Shares or
the Xxxxxx X.X. Shares or the trading in the Shares or any other securities of the Company shall
have been issued or proceedings therefor initiated or threatened by any securities commission,
securities regulatory authority or stock exchange in Canada or the United States, and any request
on the part of any Canadian Authority or the Commission for additional information shall have been
complied with to the reasonable satisfaction of counsel to the Underwriters. The Canadian
Prospectus and the U.S. Prospectus containing the PREP Information shall have been filed,
respectively, with the Canadian Authorities in accordance with the PREP Procedures and with the
Commission in accordance with General Instruction II.L. of Form F-10 and each Issuer Free Writing
Prospectus shall have been timely filed with the Commission under the Securities Act to the extent
required by Rule 433 under the Securities Act and in accordance with Section 4(a) hereof.
27
Company, are
contemplated by the Commission, and (v) no order having the effect of ceasing or suspending the
distribution of the Shares or the Xxxxxx X.X. Shares or the trading in the Shares or any other
securities of the Company has been issued and no proceedings for that purpose have been instituted
or are pending or, to the knowledge of the Company, are contemplated by any Canadian Authorities.
(f) Opinion and 00x-0 Xxxxxxxxx xx Xxxxxx Xxxxxx and Canadian Counsel for Company. At the
Closing Date or the Additional Closing Date, as the case may be, the Underwriters shall have
received the favorable opinion and Rule 10b-5 negative assurance statement, dated as of the Closing
Date or the Additional Closing Date, as the case may be, of
Torys LLP, counsel for the Company, or other local counsel for the Company for matters other
than U.S. federal, New York, Delaware or Ontario law (and the federal laws of Canada applicable in
Ontario), in form and substance reasonably satisfactory to counsel for the Underwriters, together
with signed or reproduced copies of such opinion for each of the Underwriters to the effect set
forth in Annex A-1 and Annex A-2 hereto and to such further effect as counsel to the Underwriters
may reasonably request.
28
29
30
with any suit, action,
investigation or proceeding or any claim asserted, as such fees and expenses are incurred), joint
or several, that arise out of, or are based upon, (i) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or caused by any omission or
alleged omission to state therein a material fact required to be stated therein or necessary in
order to make the statements therein, not misleading, or (ii) any untrue statement or alleged
untrue statement of a material fact contained in the Prospectuses (or any amendment or supplement
thereto), any Issuer Free Writing Prospectus, any “issuer information” filed or required to be
filed pursuant to Rule 433(d) or any Time of Sale Information (including any Time of Sale
Information that has subsequently been amended), or caused by any omission or alleged omission to
state therein a material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made, not misleading, in
each case except insofar as such losses, claims, damages or liabilities arise out of, or are based
upon, any untrue statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with any information relating to any Underwriter furnished to the Company in
writing by such Underwriter through the Representatives expressly for use therein, it being
understood and agreed that the only such information furnished by any Underwriter consists of the
information described as such in subsection (b) below.
31
Person shall retain counsel
reasonably satisfactory to the Indemnified Person (who shall not, without the consent of the
Indemnified Person, be counsel to the Indemnifying Person) to represent the Indemnified Person in
such proceeding and shall pay the fees and expenses of such counsel related to such proceeding, as
incurred. In any such proceeding, any Indemnified Person shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified
Person unless (i) the Indemnifying Person and the Indemnified Person shall have mutually agreed to
the contrary, (ii) the Indemnifying Person has failed within a reasonable time to retain counsel
reasonably satisfactory to the Indemnified Person, (iii) the Indemnified Person shall have
reasonably concluded that there may be legal defenses available to it that are different from or in
addition to those available to the Indemnifying Person, or (iv) the named parties in any such
proceeding (including any impleaded parties) include both the Indemnifying Person and the
Indemnified Person and representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interest between them. It is understood and agreed that the
Indemnifying Person shall not, in connection with any proceeding or related proceeding 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 Indemnified Persons, and that all such fees and expenses shall be paid
or reimbursed as they are incurred. Any such separate firm for any Underwriter, its affiliates,
directors and officers and any control persons of such Underwriter shall be designated in writing
by the Representatives and any such separate firm for the Company, its directors, its officers who
signed the Registration Statement and any control persons of the Company shall be designated in
writing by the Company. The Indemnifying Person shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such consent or if there be a
final judgment for the plaintiff, the Indemnifying Person agrees to indemnify each Indemnified
Person from and against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an Indemnified Person shall have requested
that an Indemnifying Person reimburse the Indemnified Person for fees and expenses of counsel as
contemplated by this paragraph, the Indemnifying Person shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is entered into more than 30
days after receipt by the Indemnifying Person of such request and (ii) the Indemnifying Person
shall not have reimbursed the Indemnified Person in accordance with such request prior to the date
of such settlement. No Indemnifying Person shall, without the written consent of the Indemnified
Person, effect any settlement of any pending or threatened proceeding in respect of which any
Indemnified Person is or could have been a party and indemnification could have been sought
hereunder by such Indemnified Person, unless such settlement (x) includes an unconditional release
of such Indemnified Person, in form and substance reasonably satisfactory to such Indemnified
Person, from all liability on claims that are the subject matter of such proceeding and (y) does
not include any statement as to or any admission of fault, culpability or a failure to act by or on
behalf of any Indemnified Person.
32
hand, and the Underwriters, on the other, from the offering of the Shares or (ii) if the allocation
provided by clause (i) is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) but also the relative fault of the
Company, on the one hand, and the Underwriters, on the other, in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The relative benefits received by the Company, on the one hand,
and the Underwriters, on the other, shall be deemed to be in the same respective proportions as the
net proceeds (before deducting expenses) received by the Company from the sale of the Shares and
the total underwriting discounts and commissions received by the Underwriters in connection
therewith, in each case as set forth in the table on the cover of the Prospectuses, bear to the
aggregate offering price of the Shares. The relative fault of the Company, on the one hand, and
the Underwriters, on the other, shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Company or by the Underwriters and the
parties’ relative intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
33
NYSE
or the TSX; (ii) trading of any securities issued or guaranteed by the Company shall have been
suspended on any exchange or in any over-the-counter market; (iii) a general moratorium on
commercial banking activities shall have been declared by federal (U.S. or Canada) or New York
State authorities; or (iv) there shall have occurred any outbreak or escalation of hostilities or
any change in financial markets or any calamity or crisis, either within or outside the United
States or Canada, that, in the judgment of the Representatives, is material and adverse and makes
it impracticable or inadvisable to proceed with the offering, sale or delivery of the Shares on the
Closing Date or the Additional Closing Date, as the case may be, on the terms and in the manner
contemplated by this Agreement, the Time of Sale Information and the Prospectuses.
(b) If, after giving effect to any arrangements for the purchase of the Shares of a defaulting
Underwriter or Underwriters by the non-defaulting Underwriters and the Company as provided in
paragraph (a) above, the aggregate number of Shares that remain unpurchased on the Closing Date or
the Additional Closing Date, as the case may be does not exceed one-eleventh of the aggregate
number of Shares to be purchased on such date, then the Company shall have the right to require
each non-defaulting Underwriter to purchase the number of Shares that such Underwriter agreed to
purchase hereunder on such date plus such Underwriter’s pro rata share (based on the number of
Shares that such Underwriter agreed to purchase on such date) of the Shares of such defaulting
Underwriter or Underwriters for which such arrangements have not been made.
(c) If, after giving effect to any arrangements for the purchase of the Shares of a defaulting
Underwriter or Underwriters by the non-defaulting Underwriters and the Company as provided in
paragraph (a) above, the aggregate number of Shares that remain unpurchased on the Closing Date or
the Additional Closing Date, as the case may be, exceeds one-eleventh of the aggregate amount of
Shares to be purchased on such date, or if the Company shall not exercise the right described in
paragraph (b) above, then this Agreement or, with respect to any
34
Additional Closing Date, the
obligation of the Underwriters to purchase Shares on the Additional Closing Date, as the case may
be, shall terminate without liability on the part of the non-defaulting Underwriters. Any
termination of this Agreement pursuant to this Section 10 shall be without liability on the part of
the Company, except that the Company will continue to be liable for the payment of expenses as set
forth in Section 11 hereof and except that the provisions of Section 7 hereof shall not terminate
and shall remain in effect.
(d) Nothing contained herein shall relieve a defaulting Underwriter of any liability it may
have to the Company or any non-defaulting Underwriter for damages caused by its default.
(b) If (i) this Agreement is terminated pursuant to Section 9, (ii) the Company for any reason
fails to tender the Shares for delivery to the Underwriters or (iii) the Underwriters decline to
purchase the Shares for any reason permitted under this Agreement (including, for greater
certainty, failure to satisfy the conditions set forth in Section 6), the Company agrees to
reimburse the Underwriters for all out-of-pocket costs and expenses (including the fees and
expenses of their counsel) reasonably incurred by the Underwriters in connection with this
Agreement and the offering contemplated hereby.
35
Agreement is intended or shall be construed to give any other person any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision contained herein. No
purchaser of Shares from any Underwriter shall be deemed to be a successor merely by reason of such
purchase.
13. Agent
for Service; Submission to Jurisdiction; Waiver of Immunities. By the
execution and delivery of this Agreement, the Company (i) acknowledges that it has, by separate
written instrument, irrevocably designated and appointed Gerdau Ameristeel U.S. Inc. (or any
successor) (together with any successor, the “Agent for Service”), as its authorized agent upon
which process may be served in any suit or proceeding arising out of or relating to this Agreement
or the Shares, that may be instituted in any federal or state court in the State of New York, or
brought under federal or state securities laws, and acknowledges that the Agent for Service has
accepted such designation, (ii) submits to the jurisdiction of any such court in any such suit or
proceeding, and (iii) agrees that service of process upon the Agent for Service (or any successor)
and written notice of said service to the Company (mailed or delivered to its Chief Financial
Officer at its principal office in Tampa, Florida, United States), shall be deemed in every respect
effective service of process upon the Company in any such suit or proceeding. The Company further
agrees to take any and all action, including the execution and filing of any and all such documents
and instruments, as may be necessary to continue such designation and appointment of the Agent for
Service in full force and effect so long as any of the Shares shall be outstanding.
To the extent that the Company has or hereafter may acquire any immunity from jurisdiction of
any court or from any legal process (whether through service of notice, attachment prior to
judgment, attachment in aid of execution, execution or otherwise) with respect to itself or its
property, it hereby irrevocably waives such immunity in respect of its obligations under the
above-referenced documents, to the extent permitted by law.
36
16. Certain Defined Terms. For purposes of this Agreement, (a) except where otherwise
expressly provided, the term “affiliate” has the meaning set forth in Rule 405 under the Securities
Act; (b) the term “business day” means any day other than a day on which banks are permitted or
required to be closed in New York City or Toronto; and (c) the term “subsidiary” has the meaning
set forth in Rule 405 under the Securities Act.
37
If the foregoing is in accordance with your understanding, please indicate your acceptance of
this Agreement by signing in the space provided below.
| Very truly yours, | ||||||||
| GERDAU AMERISTEEL CORPORATION | ||||||||
| By: | /s/ XXXXXXX X. XXXXX | |||||||
| Name: | Xxxxxxx X. Xxxxx | |||||||
| Title: | Vice President, Finance and Chief Financial Officer | |||||||
Accepted: November 1, 2007
X.X. XXXXXX SECURITIES INC.
CIBC WORLD MARKETS CORP.
CIBC WORLD MARKETS CORP.
By: X.X. Xxxxxx Securities Inc.
By: |
/s/ XXXX XXXXXXXXX | |||||||
| Title: | Executive Director | |||||||
By:
|
CIBC World Markets Corp. | |||||||
By: |
/s/ XXXXXX XxxXXXXX |
|||||||
| Title: | Managing Director | |||||||
For themselves and the several Underwriters listed in Schedule 1 hereto.
38
Schedule 1
| Underwriter | Number of Shares | |||
X.X. Xxxxxx Securities Inc. |
9,226,250 | |||
CIBC World Markets Corp. |
9,226,250 | |||
ABN AMRO Rothschild LLC |
5,335,750 | |||
HSBC Securities (USA) Inc. |
3,690,500 | |||
Banc of America Securities LLC |
3,690,500 | |||
BMO Xxxxxxx Xxxxx Inc. |
3,690,500 | |||
Total |
36,905,000 | |||
39
Schedule 2
SIGNIFICANT SUBSIDIARIES OF THE COMPANY
Gerdau USA Inc.
Gerdau Ameristeel US Inc.
Chaparral Steel Company
Chaparral Steel Midlothian LP
Chaparral (Virginia) Inc.
Gerdau Ameristeel US Inc.
Chaparral Steel Company
Chaparral Steel Midlothian LP
Chaparral (Virginia) Inc.
Annex A-1
FORM OF OPINION OF COMPANY’S CANADIAN COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 6(f)
TO BE DELIVERED PURSUANT TO
SECTION 6(f)
| 1. | The Company has been duly incorporated, continued or amalgamated, as the case may be, and is validly existing under the laws of its jurisdiction of incorporation, continuance or amalgamation. |
| 2. | The Company has all necessary corporate power and capacity to own, lease and operate its properties and to conduct its business as described in the Registration Statement, the Time of Sale Information and the Prospectuses. |
| 3. | The Company has all necessary corporate power and capacity to execute, deliver and perform its obligations under each of the Underwriting Agreement and the Xxxxxx X.X. Subscription Agreement and each of the Underwriting Agreement and the Xxxxxx X.X. Subscription Agreement has been duly authorized and, to the extent that execution and delivery are matters governed by the laws of the Province of Ontario and the federal laws of Canada applicable therein, has been duly executed and delivered by the Company, and in the case of the Xxxxxx X.X. Subscription Agreement, constitutes a valid and legally binding obligation of the Company, enforceable against the Company in accordance with its terms. |
| 4. | All necessary corporate action has been taken by the Company to authorize the issuance of the Shares on the terms and conditions of the Underwriting Agreement and, when certificates representing the Xxxxxx X.X. Shares are countersigned by CIBC Mellon Trust Company and delivered and the Shares are electronically credited to the account of X.X.Xxxxxx Securities Inc., in both cases against receipt by the Company of full payment therefor, the Shares will be validly issued as fully paid and non-assessable common shares in the capital of the Company. |
| 5. | The authorized, issued and outstanding share capital of the Company is as set forth in the Pricing Prospectuses and the Prospectuses under the caption “Capitalization” under “Actual” (except for subsequent issuances, if any, pursuant to the Underwriting Agreement, the Xxxxxx X.X. Subscription Agreement or pursuant to reservations, agreements or employee benefit plans referred to in the Pricing Prospectuses and the Prospectuses or pursuant to the exercise of convertible securities or options referred to in the Pricing Prospectuses and the Prospectuses). To the best of our knowledge, none of the outstanding Common Shares have been issued in violation of the pre-emptive rights of any shareholder of the Company. |
| 6. | Such counsel’s opinion in the Pricing Prospectuses and the Prospectuses under the caption “Eligibility for Investment” is confirmed as at the date of Closing. The |
A-1-1
| statements in the Pricing Prospectuses and the Prospectuses under the caption “Certain Tax Considerations For U.S. Shareholders – Canadian Federal Income Tax Considerations” and the statements in the Registration Statement under “Part II – Information Not Required to Be Delivered to Offerees or Purchasers – Indemnification” constitute accurate summaries of the matters described therein in all material respects. |
| 7. | The form of share certificate representing the Common Shares has been duly approved by the Company and complies with all applicable statutory requirements, with any applicable requirements of the articles of continuance and by-laws of the Company and with the provisions of the Canada Business Corporations Act relating thereto and the requirements of the Toronto Stock Exchange and the New York Stock Exchange for share certificates. |
| 8. | A final Mutual Reliance Review System Decision Document has been obtained in respect of the Canadian Base PREP Prospectus from the Reviewing Authority on behalf of the Canadian Authorities and all necessary documents have been filed, all requisite proceedings have been taken and all other legal requirements have been fulfilled under the securities laws of each of the Canadian Jurisdictions to qualify the distribution of the Shares to the public in each of the Canadian Jurisdictions through investment dealers or registrants registered, if required, under applicable securities laws (including related and applicable regulations, policies and rules) of the Canadian Jurisdictions who have complied with the applicable provisions of such securities laws. |
| 10. | The Company is a “reporting issuer” or the equivalent under the securities legislation of each Canadian jurisdiction where such concept exists and is not on the list of defaulting issuers maintained under such legislation, if any. |
| 11. | The execution, delivery and performance of the Underwriting Agreement by the Company and the consummation by the Company of the transactions contemplated in the Underwriting Agreement and the Registration Statement, the Time of Sale Information and the Prospectuses (including the authorization, issuance, sale and delivery of the Shares and the use of proceeds as described in the Pricing Prospectuses and the Prospectuses under the caption “Use of Proceeds”) do not and will not conflict with, result in a breach of or create a state of facts which, whether with or without the giving of notice or lapse of time or both, will result in a breach or violation of any of the terms, conditions or provisions of or result in the creation or imposition of any lien, charge, or encumbrance upon any property or assets of the Company or any of its subsidiaries under (A) the articles of continuance or by-laws of the Company; (B) to such counsel’s knowledge, any material contract, indenture, mortgage, deed of trust, loan or credit agreement, note, lease or any other agreement or instrument to which the Company or any subsidiary is a party or by which it or any of them may be bound, or to which any of the property or assets of the Company or any subsidiary is subject (except for such conflicts, breaches, defaults or liens, charges or encumbrances that would not have a Material Adverse Effect); (C) any applicable Canadian federal or Ontario statute or |
A-1-2
| regulation; or (D) any judgment, order or decree of any government, governmental, regulatory or administrative agency, authority, commission or instrumentality or court having jurisdiction over the Company or any of its properties, assets or operations. No further consents, approvals, authorizations or orders of any court, regulatory body or administrative agency or other governmental agency or body, of Ontario or of Canada, other than those that have been validly obtained and continue in effect, are required for the Company’s execution, delivery or performance of the Underwriting Agreement or the consummation of the transactions contemplated by the Underwriting Agreement. |
| 12. | To such counsel’s knowledge, the Company is not in violation of its articles of continuance or by-laws and no default exists in the performance or observance of any material obligation, agreement, covenant or condition in any contract, indenture, loan agreement, note, lease or other agreement or instrument to which the Company is a party, except for such defaults that would not have a Material Adverse Effect. |
| 13. | The issuance of the Shares is not subject to pre-emptive or other similar rights of any securityholder of the Company. |
| 14. | No order having the effect of ceasing or suspending the distribution of the Shares or the trading in the Common Shares has been issued by any securities regulatory authority in the Canadian Jurisdictions and no proceedings for that purpose have been instituted or are pending or, to such counsel’s knowledge, contemplated. |
| 15. | To such counsel’s knowledge, there is not pending or threatened any action, suit, proceeding, inquiry, or investigation, to which the Company is a party, or to which the property of the Company is subject, before or brought by any court or governmental agency or body, domestic or foreign, which might reasonably be expected to result in a Material Adverse Effect, or which might reasonably be expected to materially and adversely affect the properties or assets of the Company or the consummation of the transactions contemplated in the Underwriting Agreement or the performance by the Company of its obligations thereunder. |
| 16. | To such counsel’s knowledge, there are no persons with registration rights or other similar rights to have any securities registered pursuant to the Registration Statement or otherwise registered by the Company under the Securities Act or qualified for distribution under applicable Canadian Securities Laws. |
| 17. | The documents incorporated by reference in the Canadian Base PREP Prospectus and the Canadian Prospectus as amended or supplemented (other than the financial statements and other financial data included or incorporated or deemed to be incorporated therein, as to which such counsel may express no opinion), when they were filed with the Canadian Authorities, appear on their face to have been appropriately responsive in all material respects to the requirements of the laws of each Canadian Jurisdiction. |
| 18. | The Canadian Base PREP Prospectus and the Canadian Prospectus in connection with the offering of the Shares (including the PREP Information, but excluding the financial statements and other financial data included or incorporated therein or omitted therefrom, |
A-1-3
| as to which such counsel may express no opinion) appear on their face to be appropriately responsive in all material respects to the requirements of the laws of each Canadian Jurisdiction. |
| 19. | The Canadian Prospectus constitutes the entire disclosure document required to offer and distribute the Shares in the Province of Ontario; the exhibits to the Registration Statement include all reports or information that in accordance with the requirements of Ontario securities law are required to be made publicly available in connection with the offer and distribution of the Shares in the Province of Ontario. |
| 20. | A court of competent jurisdiction in the Province of Ontario (an “Ontario Court”) would give effect to the choice of the law of the State of New York (“New York law”) as the law governing the Underwriting Agreement, provided that such choice of law is bona fide (in the sense that it was not made with a view to avoiding the consequences of the laws of any other jurisdiction) and provided that such choice of law is not contrary to public policy, as that term is applied by an Ontario Court (“Public Policy”). We have no reason to believe that the choice of New York law to govern the Underwriting Agreement (except as to provisions in the Underwriting Agreement providing for indemnity or contribution, as to which no opinion is expressed) is not bona fide or would be contrary to Public Policy. |
| 21. | In an action on a final and conclusive judgment in personam of any federal or state court in the State of New York (a “New York Court”) that is not impeachable as void or voidable under New York law, an Ontario Court would give effect to the appointment by the Company of Gerdau Ameristeel U.S. Inc. as its agent to receive service of process in the United States of America under the Underwriting Agreement and to the provisions in the Underwriting Agreement whereby the Company submits to the non-exclusive jurisdiction of a New York Court. |
| 22. | If the Underwriting Agreement is sought to be enforced in the Province of Ontario in accordance with the laws applicable thereto as chosen by the parties, namely New York law, an Ontario Court would, subject to paragraph 20 above, recognize the choice of New York law and, upon appropriate evidence as to such law being adduced, apply such law with respect to those matters which under the laws of the Province of Ontario are to be determined by the proper law of the Underwriting Agreement (and in particular, but without limitation, not with respect to matters of procedure), provided that none of the provisions of the Underwriting Agreement, or of applicable New York law, is contrary to Public Policy and that those laws are not foreign revenue, expropriatory or penal laws; provided, however, that, in matters of procedure, the laws of the Province of Ontario will be applied, and an Ontario Court will retain discretion to decline to hear such action if it is contrary to Public Policy for it to do so, or if it is not the proper forum to hear such an action, or if concurrent proceedings are being brought elsewhere and an Ontario Court may not enforce an obligation enforceable under New York law where performance of the obligation would be illegal by the law of the place of performance. |
| 23. | The laws of the Province of Ontario and the laws of Canada applicable therein permit an action to be brought in an Ontario Court on a final and conclusive judgment in personam |
A-1-4
| of a New York Court that is subsisting and unsatisfied respecting the enforcement of the Underwriting Agreement that is not impeachable as void or voidable under New York law for a sum certain if: (A) the court rendering such judgment had jurisdiction, as determined under Ontario Law, over the judgment debtor and the subject matter of the action; (B) such judgment was not obtained by fraud or in a manner contrary to natural justice and the enforcement thereof would not be inconsistent with Public Policy or contrary to any order made by the Attorney-General of Canada under the Foreign Extraterritorial Measures Act (Canada) or the Competition Tribunal under the Competition Act (Canada); (C) the enforcement of such judgment does not constitute, directly or indirectly, the enforcement of foreign revenue, expropriatory or penal laws; (D) the action to enforce such judgment is commenced in compliance with the Limitations Act, 2002 (Ontario); (E) in the case of a judgment obtained by default, there has been no manifest error in the granting of such judgment; and (F) no new admissible evidence, right or defence relevant to the action is discovered prior to the rendering of judgment by an Ontario Court. Under the Currency Act (Canada), an Ontario Court may only give judgment in Canadian dollars. |
| 24. | As of the Closing Date, all laws of the Province of Québec relating to the use of the French language (other than those relating to verbal communications, in respect of which we express no opinion) will have been complied with in connection with the offering and sale of the Shares to purchasers in the Province of Québec if such purchasers receive copies of the French and English language versions of the Canadian Prospectus and forms of order and confirmation in the French language or a bilingual form or copies of the French language version of the Canadian Prospectus and forms of order and confirmation in the French language only or, in the case of individuals so requesting in writing, copies of the English language version of the Canadian Prospectus and forms of order and confirmation in the English language or in a bilingual form. |
| 25. | No stamp or other issuance or transfer taxes or duties or withholding taxes are payable by or on behalf of the Underwriters to the Government of Canada or the Government of Ontario or any authority or agency thereof or therein having power to tax in connection with (A) the issue, sale and delivery of the Shares by the Company to or for the respective accounts of the Underwriters or (B) the sale and delivery outside Canada by the Underwriters of the Shares in the manner contemplated in the Underwriting Agreement. |
| 26. | Such counsel have participated in the preparation of the Registration Statement, the Time of Sale Information and the Prospectuses and in telephone conferences with officers and other representatives of the Company, representatives of the independent chartered accountants for the Company, and representatives of the Underwriters, at which the contents of the Registration Statement, the Time of Sale Information and the Prospectuses, and related matters were discussed and, although such counsel are not passing upon and do not assume any responsibility for the accuracy, completeness or fairness of the statements contained in the Registration Statement, the Time of Sale Information and the Prospectuses except as set forth in paragraphs 5 and 7, on the basis of the foregoing no information has come to such counsel’s attention that causes them to |
A-1-5
| believe that, (A) the Registration Statement (except for the financial statements and other financial data included or incorporated therein or omitted therefrom, and except for the statements solely with respect to Chaparral as identified in an exhibit to such counsel’s letter (the “Chaparral Portions”), as to which such counsel need express no belief), at the time the Registration Statement became effective under the Securities Act, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (B) the Time of Sale Information (except for the financial statements and other financial data included or incorporated therein or omitted therefrom, and except for the Chaparral Portions, as to which such counsel need express no belief), as of the Time of Sale, contained any untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in light of the circumstances in which they were made, not misleading, or (C) the U.S. Prospectus and the Canadian Prospectus as amended or supplemented prior to the Closing Date (except for the financial statements and other financial data included or incorporated therein or omitted therefrom, and except for the Chaparral Portions, as to which such counsel need express no belief), as of the date of the U.S. Prospectus and the Canadian Prospectus or the date hereof contained or contains an untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. |
X-0-0
Xxxxx X-0
FORM OF OPINION OF COMPANY’S U.S. COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 6(f)
TO BE DELIVERED PURSUANT TO
SECTION 6(f)
| 1. | Each of Gerdau USA Inc., Gerdau Ameristeel U.S. Inc., Chaparral Steel Company, Chaparral Steel Midlothian LP and Chaparral (Virginia) Inc. (the “U.S. Subsidiaries”) has been duly incorporated or organized, as the case may be, and is validly existing under the laws of its jurisdiction of incorporation or organization. |
| 2. | Each of the U.S. Subsidiaries has all necessary corporate or partnership, as applicable, power and capacity to own, lease and operate its properties and to conduct its business as described in the Registration Statement, the Time of Sale Information and the Prospectuses. |
| 3. | All of the issued and outstanding capital stock or other equity interest of each U.S. Subsidiary has been duly authorized and validly issued, is fully paid and (except for any general partnership interests) non-assessable and, to such counsel’s knowledge, is owned by the Company, free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity, except as provided by the Company’s US$650 million senior secured credit facility. |
| 4. | The Registration Statement is effective under the Securities Act and the Form F-X was filed with the Commission prior to the effectiveness of the Registration Statement; any required filing of the U.S. Prospectus or any supplement thereto pursuant to General Instruction II.L. of Form F-10 has been made in the manner and within the time period required by said General Instruction II.L.; and, to such counsel’s knowledge, no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or are pending or threatened under the Securities Act. |
| 5. | The Form F-X complies as to form in all material respects with the applicable requirements of the Securities Act and the Securities Act Regulations. |
| 6. | Such counsel does not know of any amendment to the Registration Statement required to be filed or of any contracts or documents of a character required to be filed as an exhibit to the Registration Statement or required to be described in the Registration Statement, the Time of Sale Information and the Prospectuses that are not filed or described, in each case as required by the Securities Act and the Securities Act Regulations. |
| 7. | Registration under the Securities Act is not required in connection with the offer and sale of the Xxxxxx X.X. Securities to Gerdau Steel North America Inc. pursuant to the Xxxxxx X.X. Subscription Agreement. |
| 8. | Assuming the due authorization, execution and delivery of the Underwriting Agreement under the laws of the Province of Ontario and the federal laws of Canada applicable |
A-2-1
| therein, the Underwriting Agreement (to the extent that execution and delivery are governed by the laws of the State of New York) has been duly executed and delivered by the Company. |
| 9. | Assuming due execution and delivery of the Waiver and Release under the laws of Brazil, the Waiver and Release has been duly executed and delivered by Gerdau Steel North America Inc., to the extent such execution and delivery are governed by the laws of the State of New York, and constitutes a valid and legally binding instrument of Gerdau Steel North America Inc., enforceable against Gerdau Steel North America Inc. in accordance with its terms. |
| 10. | The statements made in the Pricing Prospectuses and the Prospectuses under the heading “Certain Tax Considerations for U.S. Shareholders — United States Federal Income Tax Considerations”, insofar as they constitute matters of United States federal income tax law and legal conclusions with respect thereto, are accurate in all material respects. |
| 11. | To the knowledge of such counsel, there is not pending or threatened any action, suit, proceeding, inquiry or investigation, to which the Company or any subsidiary is a party, or to which the property of the Company or any subsidiary is subject, before or brought by any court or governmental agency or body, domestic or foreign, which might reasonably be expected to result in a Material Adverse Effect, or which might reasonably be expected to materially and adversely affect the properties or assets thereof or the consummation of the transactions contemplated in the Underwriting Agreement or the performance by the Company of its obligations thereunder. |
| 12. | To the knowledge of such counsel, there are no U.S. statutes or regulations that are required to be described in the Registration Statement that are not described as required, and the descriptions thereof or references thereto are correct in all material respects. |
| 13. | No filing with, or authorization, approval, consent, license, order, registration, qualification or decree of, any U.S. federal or New York State court or governmental authority or agency (other than under the Securities Act and the Securities Act Regulations, which have been obtained, or as may be required under the securities or blue sky laws of the various states, as to which such counsel need not express any opinion) is necessary or required in connection with the due authorization, execution and delivery of the Underwriting Agreement or for the offering, issuance or sale of the Shares. |
| 14. | The execution, delivery and performance of the Underwriting Agreement by the Company and the consummation by the Company of the transactions contemplated in the Underwriting Agreement and in the Registration Statement, the Time of Sale Information and the Prospectuses (including the issuance and sale of the Shares and the use of the proceeds from the sale of the Shares as described in the Pricing Prospectuses and the Prospectuses under the caption “Use of Proceeds”) do not and will not conflict with, result in a breach of or create a state of facts which, whether with or without the giving of notice or lapse of time or both, will result in a breach or violation of any of the terms, conditions or provisions of or result in the creation or imposition of any lien, charge, or encumbrance upon any property or assets of the Company or any subsidiary pursuant to |
A-2-2
| any contract, indenture, mortgage, deed of trust, loan or credit agreement, note, lease or any other agreement or instrument to which the Company or any subsidiary is a party or by which it or any of them may be bound, or to which any of the property or assets of the Company or any subsidiary is subject (except for such conflicts, breaches or defaults or liens, charges or encumbrances that would not have a Material Adverse Effect), which is governed by New York State law, statute, rule or regulation. |
| 15. | The execution, delivery and performance of the Underwriting Agreement by the Company and the consummation by the Company of the transactions contemplated in the Underwriting Agreement and compliance by the Company with its obligations under the Underwriting Agreement do not and will not violate any applicable U.S. federal or New York State law, statute, rule, regulation or, to such counsel’s knowledge, any judgment, order or decree of any federal or New York State government, governmental regulatory or administrative agency, authority, commission or instrumentality or court having jurisdiction over the Company or any of its respective properties or assets. |
| 16. | The Company is not and after giving effect to the offering and sale of the Shares and the Xxxxxx X.X. Shares and the application of the proceeds thereof as described in the U.S. Prospectus, will not be an “investment company”, as such term is defined in the 1940 Act. |
| 17. | Under the laws of the State of New York relating to submission of personal jurisdiction, the Company has, pursuant to Section 13 of the Underwriting Agreement, validly (i) submitted to the non-exclusive jurisdiction of any federal or state court in the City, County and State of New York, in any action based on or under the Underwriting Agreement, and (ii) appointed Gerdau Ameristeel U.S. Inc. as its authorized agent for purposes described in Section 13 of the Underwriting Agreement. |
| 18. | The New York Stock Exchange has approved the listing of the Shares and the Xxxxxx X.X. Shares, subject to notice of issuance. |
| 19. | Such counsel have participated in the preparation of the Registration Statement, the Time of Sale Information and the Prospectuses and in telephone conferences with officers and other representatives of the Company, representatives of the independent chartered accountants for the Company, and representatives of the Underwriters, at which the contents of the Registration Statement, the Time of Sale Information and the Prospectuses, and related matters were discussed and, although such counsel are not passing upon and do not assume any responsibility for the accuracy, completeness or fairness of the statements contained in the Registration Statement, the Time of Sale Information and the Prospectuses except as set forth in paragraph 10 above, on the basis of the foregoing (i) in their opinion, the Registration Statement, the Time of Sale Information and the Prospectuses (other than the financial statements and other financial data contained therein or omitted therefrom, as to which such counsel need express no opinion), as of their respective effective or issue dates appear on their face to comply as to form in all material respects with the requirements of the Securities Act and the applicable rules and regulations of the SEC thereunder; and (ii) no information has come to such counsel’s attention that causes them to believe that, (A) the Registration Statement (except for the |
A-2-3
| financial statements and other financial data included or incorporated therein or omitted therefrom, and except for the statements solely with respect to Chaparral as identified in an exhibit to such counsel’s letter (the “Chaparral Portions”), as to which such counsel need express no belief), at the time the Registration Statement became effective under the Securities Act, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or (B) the Time of Sale Information (except for the financial statements and other financial data included or incorporated therein or omitted therefrom, and except for the Chaparral Portions, as to which such counsel need express no belief), as of the Time of Sale, contained any untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in light of the circumstances in which they were made, not misleading, or (C) the U.S. Prospectus as amended or supplemented prior to the Closing Date (except for the financial statements and other financial data included or incorporated therein or omitted therefrom, and except for the Chaparral Portions, as to which such counsel need express no belief), as of the date of the U.S. Prospectus or the date hereof contained or contains an untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. |
X-0-0
Xxxxx X-0
FORM OF NEGATIVE ASSURANCE LETTER OF COMPANY’S ACQUISITION COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 6(g)
TO BE DELIVERED PURSUANT TO
SECTION 6(g)
| 1. | Nothing has come to our attention that causes us to believe that, (a) the statements, solely with respect to Chaparral as identified in Exhibit A hereto, contained in the Registration Statement (including the Exchange Act Document incorporated or deemed incorporated by reference therein and the U.S. Prospectus deemed to be a part thereof), as of the time it became effective under the Securities Act on November 1, 2007, contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading, (b) the statements, solely with respect to Chaparral as identified in Exhibit B hereto, contained in the U.S. Pricing Prospectus (including the Exchange Act Document incorporated or deemed incorporated by reference therein), as of the time of the pricing of the offering of the Shares on November 1, 2007, contained any untrue statement of a material fact or omitted to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, or (c) the statements, solely with respect to Chaparral as identified in Exhibit C hereto, contained in the U.S. Prospectus (including the Exchange Act Document incorporated or deemed incorporated by reference therein), as of November 1, 2007 or as of the date hereof, contained or contains any untrue statement of a material fact or omitted or omits to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that we express no belief in any of clauses (a), (b) or (c) above with respect to the financial statements or other financial data contained in, incorporated or deemed incorporated by reference in, or omitted from the Registration Statement, the U.S. Pricing Prospectus, the U.S. Prospectus or the Exchange Act Document. |
A-3-1
Annex B
a. Time of Sale Information
None
b. Pricing Information Provided Orally by Underwriters
Title: Common Shares
Number of Underwritten Shares to be sold by the Company: 36,905,000
Number of Option Shares to be sold by the Company: 5,535,750
The
purchase price per share for the Shares shall be US$12.25.
B-1
Annex C
Pricing Term Sheet
NOT APPLICABLE
C-1
Exhibit A
FORM OF LOCK-UP AGREEMENT
, 2007
X.X. XXXXXX SECURITIES INC.
As Representative of
the several Underwriters listed in
Schedule I to the Underwriting
Agreement referred to below
c/o X.X. Xxxxxx Securities Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
As Representative of
the several Underwriters listed in
Schedule I to the Underwriting
Agreement referred to below
c/o X.X. Xxxxxx Securities Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Re: Gerdau Ameristeel Corporation — Public Offering
Ladies and Gentlemen:
The undersigned understands that you, as Representative of the several Underwriters, propose
to enter into an Underwriting Agreement (the “Underwriting Agreement”) with Gerdau Ameristeel
Corporation, a corporation continued under the Canada Business Corporations Act (the “Company”),
providing for the public offering (the “Public Offering”) by the several Underwriters named in
Schedule I to the Underwriting Agreement, or their affiliates (the “Underwriters”), of common
shares of the Company (the “Securities”). Capitalized terms used herein and not otherwise defined
shall have the meanings set forth in the Underwriting Agreement.
In consideration of the Underwriters’ agreement to purchase and make the Public Offering of
the Securities, and for other good and valuable consideration receipt and sufficiency of which is
hereby acknowledged, the undersigned hereby agrees that, without the prior written consent of X.X.
Xxxxxx Securities Inc., on behalf of the Underwriters, the undersigned will not, during the period
ending 90 days after the date of the Underwriting Agreement, (1) offer, pledge, announce the
intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer
or dispose of, directly or indirectly, any common shares of the Company, no par value per share
(the “Common Shares”), or any securities convertible into or exercisable or exchangeable for Common
Shares (including without limitation, Common Shares which may be deemed to be beneficially owned by
the undersigned in accordance with the rules and regulations of the Securities and Exchange
Commission or the Canadian Securities Laws and securities which may be issued upon exercise of a
stock option or warrant), whether now owned or hereinafter
acquired or (2) enter into any swap or other agreement or transaction that transfers, in
Exh A-1
whole or
in part, any of the economic consequences of ownership of the Common Shares, whether any such
transaction described in clause (1) or (2) above is to be settled by delivery of Common Shares or
such other securities, in cash or otherwise. In addition, the undersigned agrees that, without the
prior written consent of X.X. Xxxxxx Securities Inc. on behalf of the Underwriters, it will not,
during the period ending 90 days after the date of the Underwriting Agreement, make any demand for
or exercise any right with respect to, the registration of any Common Shares or any security
convertible into or exercisable or exchangeable for Common Shares.
In furtherance of the foregoing, the Company, and any duly appointed transfer agent for the
registration or transfer of the securities described herein, are hereby authorized to decline to
make any transfer of securities if such transfer would constitute a violation or breach of this
Letter Agreement.
The undersigned hereby represents and warrants that the undersigned has full power and
authority to enter into this Letter Agreement. All authority herein conferred or agreed to be
conferred and any obligations of the undersigned shall be binding upon the successors, assigns,
heirs or personal representatives of the undersigned.
The undersigned understands that, if the Underwriting Agreement does not become effective, or
if the Underwriting Agreement (other than the provisions thereof which survive termination) shall
terminate or be terminated prior to payment for and delivery of the Securities to be sold
thereunder, the undersigned shall be released from all obligations under this Letter Agreement.
The undersigned understands that the Underwriters are entering into the Underwriting Agreement and
proceeding with the Public Offering in reliance upon this Letter Agreement.
This Letter Agreement shall be governed by and construed in accordance with the laws of the
State of New York, without regard to the conflict of laws principles thereof.
| Very truly yours, [NAME OF SHAREHOLDER] |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
Exh A-2
Exhibit B
List of Persons and Entities Subject to Lock-up
Xxxxxxx X. Xxxxx
Xxxxxx X. Xxxxxxxxx
Xxxxx Xxxxxx Xxxxxxxxxxx
Xxxxxxxxx X. Xxxxxx Xxxxxxxxxxx
Xxxxx Xxxxxx Xxxxxxxxxxx
Xxxxxxx Xxxxxx Xxxxxxxxxxx
Xxxxxxx X. Xxxxx
X. Xxxxxxx Xxxxxxxx
Xxxxxx X. Xxxxx
Xxxxx Xxxxxx
Xxxxxxx XxXxx
J. Xxxx XxXxxxxxx
Xxxxx Xxxxxx
Xxxxxxx Xxxxxxx
Xxxxxx Xxxxx
Xxxxxx X.X. (and its affiliates that hold shares of the Company)
Xxxxxx X. Xxxxxxxxx
Xxxxx Xxxxxx Xxxxxxxxxxx
Xxxxxxxxx X. Xxxxxx Xxxxxxxxxxx
Xxxxx Xxxxxx Xxxxxxxxxxx
Xxxxxxx Xxxxxx Xxxxxxxxxxx
Xxxxxxx X. Xxxxx
X. Xxxxxxx Xxxxxxxx
Xxxxxx X. Xxxxx
Xxxxx Xxxxxx
Xxxxxxx XxXxx
J. Xxxx XxXxxxxxx
Xxxxx Xxxxxx
Xxxxxxx Xxxxxxx
Xxxxxx Xxxxx
Xxxxxx X.X. (and its affiliates that hold shares of the Company)
Exh B-1