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EXHIBIT 1.1
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EXECUTION COPY
METALLURG, INC.
$100,000,000
11% Senior Notes due 2007
PURCHASE AGREEMENT
New York, New York
November 20, 1997
To: SALOMON BROTHERS INC
BANCBOSTON SECURITIES INC.
In care of:
Salomon Brothers Inc
Seven Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Metallurg, Inc., a Delaware corporation (the "Company"), proposes to
issue and sell to you (the "Purchasers"), $100,000,000 aggregate principal
amount of its 11% Senior Notes due 2007 (the "Notes") to be fully and
unconditionally guaranteed on a senior unsecured basis (the "Subsidiary
Guarantees" and, together with the Notes, the "Securities") by certain of the
Company's subsidiaries signatory hereto (the "Guarantors"). The Securities are
to be issued under an indenture (the "Indenture") dated as of November 25, 1997,
among the Company, the Guarantors and IBJ Xxxxxxxx Bank & Trust Company, as
trustee (the "Trustee").
The sale of the Securities to you will be made without registration
of the Securities under the Securities Act of 1933, as amended (the "Securities
Act"), in reliance upon the exemption from the registration requirements of the
Securities Act provided by Section 4(2) thereof. You have advised the Company
that you will make an offering of the Securities purchased by you hereunder in
accordance with Section 4 hereof as soon as you deem advisable after the
execution and delivery of this Agreement.
In connection with the sale of the Securities, the Company has
prepared a preliminary offering memorandum, dated November 4, 1997 (the
"Preliminary Memorandum"), and a final offering memorandum, dated November 20,
1997 (the
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"Final Memorandum"). Each of the Preliminary Memorandum and the Final Memorandum
sets forth certain information concerning the Company, the Guarantors and the
Securities. The Company and the Guarantors, jointly and severally, hereby
confirm that they have authorized the use of the Preliminary Memorandum and the
Final Memorandum, and any amendment or supplement thereto, in connection with
the offer and sale of the Securities by the Purchasers. Unless stated to the
contrary, all references herein to the Final Memorandum are to the Final
Memorandum at the Execution Time (as defined below) and are not meant to include
any amendment or supplement thereto subsequent to the Execution Time.
The holders of the Securities will be entitled to the benefits of
the Registration Agreement dated the date hereof, between the Company, the
Guarantors and the Purchasers (the "Registration Agreement").
Capitalized terms used herein without definition have the respective
meanings assigned to them in the Final Memorandum.
1. Representations and Warranties. The Company and the Guarantors
jointly and severally represent and warrant to, and agree with, the Purchasers
as set forth below in this Section 1.
(a) The Preliminary Memorandum, at the date thereof, did not contain
any untrue statement of a material fact or omit to state any material fact
(other than pricing terms and other financial terms for the Securities
intentionally left blank) necessary to make the statements therein, in the
light of the circum stances under which they were made, not misleading.
The Final Memorandum, at the date hereof, does not, and at the Closing
Date (as defined below) will not (and any amendment or supplement thereto,
at the date thereof and at the Closing Date, will not), contain any untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that no
representation or warranty is made as to the information contained in or
omitted from the Preliminary Memorandum or the Final Memorandum, or any
amendment or supplement thereto, in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of the
Purchasers specifically for inclusion therein, it being understood that
the only such information is that described in Section 8(b) hereof.
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(b) None of the Company, the Guarantors, any of their respective
Affiliates (as defined in Rule 501(b) of Regulation D under the Securities
Act ("Regula tion D")), nor any person acting on its or their behalf has,
directly or indirectly, (i) sold, offered for sale, solicited offers to
buy or otherwise negotiated in respect of, any security (as defined in the
Securities Act) under circumstances that would require the registration of
the Securities under the Securities Act or (ii) engaged in any form of
general solicitation or general advertising (within the meaning of
Regulation D) in connection with any offer or sale of the Securities in
the United States.
(c) The Securities satisfy the eligibility requirements of Rule
144A(d)(3) under the Securities Act.
(d) None of the Company, the Guarantors, any of their respective
Affiliates, nor any person acting on its or their behalf has engaged in
any directed selling efforts with respect to the Securities, and each of
them has complied with the offering restrictions requirement of Regulation
S ("Regulation S") under the Securities Act. Terms used in this paragraph
have the meanings given to them by Regulation S.
(e) Neither the Company nor any Guarantor has taken nor will they
take, directly or indirectly, any action prohibited by Regulation M under
the Exchange Act of 1934, as amended (the "Exchange Act"), in connection
with the offering of the Securities.
(f) Neither the Company nor any Guarantor is an "investment company"
within the meaning of the Investment Company Act of 1940, as amended (the
"Investment Company Act"), without taking account of any exemption arising
out of the number of holders of the Company's or any Guarantor's
securities.
(g) Neither the Company nor any Guarantor has paid or agreed to pay
to any person any compensation for soliciting another to purchase any
securities of the Company or the Guarantors (except as contemplated by
this Agreement).
(h) The information provided by the Company pursuant to Section 5(h)
hereof will not, at the date thereof, contain any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not
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misleading.
(i) Each of the Company and the Guarantors has full corporate power
and authority to enter into this Agreement, the Registration Agreement,
the Indenture and the Securities and to perform the transactions
contemplated hereby and thereby (the "Transactions"). This Agreement and
the Registration Agreement have been duly authorized, executed and
delivered by the Company and each Guarantor. The execution and delivery of
the Indenture has been duly authorized by the Company and each Guarantor
and, when duly executed and delivered by the parties thereto, the
Indenture will constitute a valid and binding obligation of the Company
and each Guarantor, enforceable against the Company and each Guarantor in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors' rights
and remedies generally and to general principles of equity (regardless of
whether enforcement is sought in a proceeding at law or in equity).
(j) Upon execution and delivery of the Indenture, and when the Notes
are issued, authenticated and delivered in accordance with the Indenture
and paid for in accordance with the terms of this Agreement, (i) the Notes
will constitute valid and binding obligations of the Company enforceable
against the Company in accordance with their terms and entitled to the
benefits of the Indenture and (ii) the Guarantees will constitute a valid
and binding obligation of the Guarantors enforceable against the
Guarantors in accordance with its terms, in each case subject to
applicable bankruptcy, insolvency, reorganization, moratorium and similar
laws affecting creditors' rights and remedies generally and to general
principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity).
(k) The execution, delivery and performance of this Agreement, the
Registration Agreement, the Indenture and the Securities by the Company
and each Guarantor and the consummation of the Transactions will not
conflict with or result in a breach or violation of any of the terms and
provisions of, or constitute a default under, (i) the articles of
incorporation, by-laws or other organizational documents of the Company or
any of the Subsidiaries (as defined below), (ii) any statute, rule or
regulation applicable to the Company or any Subsidiary or any order of any
governmental agency or body or any court having jurisdiction over the
Company or any Subsidiary or any of their
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respective properties, (iii) any agreement or instrument relating to
borrowed money to which the Company or any Subsidiary is a party or by
which the Company or any Subsidiary is bound or to which any of their
respective properties is subject or (iv) any other material agreement or
instrument to which the Company or any Subsidiary is a party or by which
the Company or any Subsidiary is bound or to which any of their respective
properties is subject. No consent, approval, authorization or other order
of any court, regulatory body, administrative agency or other governmental
body which has not already been obtained is required for the execution and
delivery of this Agreement, the Registration Agreement, the Indenture or
the Securities or for the consummation of the Transactions, except for
compliance with state securities or blue sky laws. The term "Subsidiary"
means each person of which a majority of the voting equity securities or
other interests is owned, directly or indirectly, by the Company.
(l) The consolidated financial statements with respect to the
Company included in the Final Memorandum present fairly the consolidated
financial position of the Company and its consolidated subsidiaries as of
the dates shown and their results of operations and cash flows for the
periods shown, and such consolidated financial statements have been
prepared in conformity with the generally accepted accounting principles
in the United States applied on a consistent basis.
(m) Since the date of the latest audited consolidated financial
statements of the Company included in the Final Memorandum, there has been
no material adverse change, nor to the Company's and the Guarantors'
knowledge, after due inquiry, any development or event involving a
prospective material adverse change in the condition (financial or
otherwise), business, properties or results of operations or prospects of
the Company and its Subsidiaries taken as a whole.
(n) Except as disclosed in the Final Memorandum, (i) there are no
legal or governmental actions, suits or proceedings pending or, to the
best of the Company's and the Guarantors' knowledge, threatened to which
the Company or any of its Subsidiaries is or is threatened to be made a
party or of which property owned or leased by the Company or any of its
Subsidiaries is or is threatened to be made the subject, which actions,
suits or proceedings could, individually or in the aggregate, reasonably
be expected to have a material adverse
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effect on the condition (financial or otherwise), business, properties,
results of operations or prospects of the Company and its Subsidiaries,
taken as a whole, or materially and adversely affect the ability of the
Company or any Guarantor to perform its obligations under this Agreement,
the Indenture, the Registration Agreement or the Securities or to
consummate the Transactions (a "Material Adverse Effect"), and (ii) no
labor disturbance by the employees of the Company or any of its
Subsidiaries exists or is imminent, in either case which could have a
Material Adverse Effect. Except as described in the Final Memorandum,
neither the Company nor any of its Subsidiaries is a party or subject to
the provisions of any material injunction, judgment, decree or order of
any court, regulatory body, administrative agency or other governmental
body.
(o) Except as disclosed in the Final Memorandum, the Company and the
Subsidiaries have good and marketable title to all real properties and all
other properties and assets owned by them and necessary to conduct the
business now operated by them, in each case free from liens, encumbrances
and defects that would materially affect the value thereof or materially
interfere with the use made or to be made thereof by them or that could
reasonably be expected to have a Material Adverse Effect; and except as
disclosed in the Final Memorandum, the Company and its Subsidiaries hold
any leased real or personal property necessary to the conduct of the
business now operated by them under valid and enforceable leases with no
exceptions that would materially interfere with the use made or to be made
thereof by them or that could reasonably be expected to have a Material
Adverse Effect.
(p) Except as disclosed in the Final Memorandum, the Company and the
Subsidiaries have all necessary material permits, licenses and other
authorizations required by applicable law for the Company and the
Subsidiaries to conduct their businesses as now conducted.
(q) Except as disclosed in the Final Memorandum, neither the Company
nor any of its Subsidiaries (i) is in violation of any statute, rule,
regulation, decision or order of any governmental agency or body or any
court, domestic or foreign, relating to the use, disposal or release of
radioactive, hazardous or toxic materials,
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wastes or substances or relating to the protection or restoration of the
environment or human exposure to radioactive, hazardous or toxic
materials, wastes or substances or the operation or decommissioning of
facilities at which such radioactive, hazardous or toxic materials, wastes
or substances are present (collectively, "Environmental Laws"), (ii) owns
or operates any real property contaminated with any substance that is
subject to any Environmental Laws, (iii) is liable for any off-site
disposal or contamination pursuant to any Environmental Laws, or (iv) is
subject to any claim relating to any Environmental Laws, which violation,
contamination, liability or claim referred to in clauses (i), (ii), (iii)
or (iv) could reasonably be expected, individually or in the aggregate, to
have a Material Adverse Effect; and neither the Company nor any Guarantor
is aware of any pending investigation which might lead to such a violation
or claim.
(r) It is not necessary in connection with the offer, sale and
delivery of the Securities in the manner contemplated by this Agreement
and the Final Memorandum to register the Securities under the Securities
Act or to qualify the Indenture under the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act").
(s) The Company has agreed to permit the Securities to be designated
PORTAL eligible securities, will pay the requisite fees related thereto
and has provided all necessary information to the National Association of
Securities Dealers, Inc., in order to ensure that the Securities are
designated PORTAL eligible securities.
(t) On or prior to the Closing Date, the Company's 12% Senior
Secured Notes due 2007 (the "Secured Notes") shall have been fully and
validly satisfied and discharged in accordance with the terms of the
Indenture governing the Secured Notes (the "Secured Notes Indenture").
2. Purchase and Sale. Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the Company
agrees to sell to the Purchasers, and the Purchasers agree to purchase from the
Company, severally and not jointly at a purchase price of 97.0% of the principal
amount thereof, plus accrued interest, if any, from November 25, 1997, to the
Closing Date, the principal amount of Securities set forth opposite each
Purchaser's name in Schedule I hereto.
3. Delivery and Payment. Delivery of and payment for the Securities
shall be made at 10:00 AM, New York City
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time, on November 25, 1997, or such later date (not later than December 2, 1997)
as the Purchasers may agree or as provided in Section 9 hereof (such date and
time of delivery and payment for the Securities being herein called the "Closing
Date"). Delivery of the Securities shall be made to the Purchasers against
payment by the Purchasers of the purchase price thereof to or upon the order of
the Company by wire transfer in Federal (same day) funds to a U.S. dollar
account in New York previously designated by the Company or such other manner of
payment as may be designated by the Company and agreed to by the Purchasers not
less than two business days prior to the Closing Date. Delivery of the
Securities shall be made at the office of Cravath, Swaine & Xxxxx, 000 Xxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx. Certificates for the Securities shall be registered
in such names and in such denominations as the Purchasers may request not less
than three full business days in advance of the Closing Date.
The Company agrees to have the Securities available for inspection,
checking and packaging by the Purchasers in New York, New York, not later than
1:00 PM on the business day prior to the Closing Date.
4. Offering of Securities. Each Purchaser (i) acknowledges that the
Securities have not been registered under the Securities Act and may not be
offered or sold except pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act or pursuant to
an effective registration statement under the Securities Act and (ii) severally
and not jointly, represents and warrants to and agrees with the Company that:
(a) It has not offered or sold, and will not offer or sell, any
Securities except (i) to those it reasonably believes to be qualified
institutional buyers (as defined in Rule 144A under the Securities Act)
and that, in connection with each such sale, it has taken or will take
reasonable steps to ensure that the purchaser of such Securities is aware
that such sale is being made in reliance on Rule 144A or (ii) in
accordance with the restrictions set forth in Exhibit A hereto.
(b) Neither it nor any person acting on its behalf has made or will
make offers or sales of the Securities in the United States by means of
any form of general solicitation or general advertising (within the
meaning of Regulation D) in the United States, except pursuant to a
registered public offering as provided in the Registration Agreement.
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5. Agreements. The Company and the Guarantors jointly and severally
agree with the Purchasers that:
(a) At any time prior to completion of the sale of the Securities,
the Company and the Guarantors will furnish to the Purchasers, without
charge, as many copies of the Final Memorandum and any supplements or
amendments thereof or thereto as the Purchasers may reasonably request.
The Company and the Guarantors will pay the expenses of printing or other
production of all documents relating to the offering.
(b) The Company will not amend or supplement the Final Memorandum
without the prior written consent of the Purchasers.
(c) If at any time prior to the completion of the sale of the
Securities by the Purchasers, any event occurs as a result of which the
Final Memorandum, as then amended or supplemented, would include any
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it shall
be necessary to amend or supplement the Final Memorandum to comply with
applicable law, the Company and the Guarantors promptly will notify the
Purchasers of the same and, subject to paragraph (b) of this Section 5,
will prepare and provide to the Purchasers pursuant to paragraph (a) of
this Section 5 an amendment or supplement which will correct such
statement or omission or effect such compliance. Neither the Initial
Purchasers' consent to, nor the Initial Purchasers' delivery to offerees
or investors of, any such amendment or supplement shall constitute a
waiver of any of the conditions set forth in Section 6 of this Agreement.
(d) The Company will arrange for the qualification of the Securities
for sale by the Purchasers under the laws of such jurisdictions as the
Purchasers may designate and will maintain such qualifications in effect
so long as required for the sale of the Securities. Each of the Company
and the Guarantors promptly will advise the Purchasers of the receipt by
it of any notification with respect to the suspension of the qualification
of the Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose.
(e) The Company and the Guarantors will not, and will not permit any
of their respective Affiliates to, resell any Securities that have been
acquired by any of
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them.
(f) Except pursuant to the Registration Agreement, none of the
Company, the Guarantors, any of their Affiliates, nor any person acting on
its or their behalf will, directly or indirectly, make offers or sales of
any security, or solicit offers to buy any security, under circumstances
that would require the registration of the Securities under the Securities
Act.
(g) None of the Company, the Guarantors, any of their respective
Affiliates, nor any person acting on its or their behalf will engage in
any form of general solicitation or general advertising (within the
meaning of Regulation D) in connection with any offer or sale of the
Securities in the United States, except pursuant to a registered public
offering as provided in the Registration Agreement.
(h) So long as any of the Securities are "restricted securities"
within the meaning of the Securities Act, the Company will, unless it
becomes subject to and complies with Section 13 or 15(d) of the Exchange
Act, provide to each holder of such restricted securities and to each
prospective purchaser (as designated by such holder) of such restricted
securities, upon the request of such holder or prospective purchaser, any
information required to be provided by Rule 144A(d)(4) under the
Securities Act. This covenant is intended to be for the benefit of the
holders, and the prospective purchasers designated by such holders, from
time to time of such restricted securities.
(i) None of the Company, the Guarantors, any of their respective
Affiliates, nor any person acting on its or their behalf will engage in
any directed selling efforts with respect to the Securities except
pursuant to a registered public offering as provided in the Registration
Agreement and each of them will comply with the offering restrictions
requirement of Regulation S. Terms used in this paragraph have the
meanings given to them by Regulation S.
(j) The Company and the Guarantors will cooperate with the
Purchasers and use their best efforts to permit the Securities to be
eligible for clearance and settlement through The Depository Trust
Company.
(k) The Company will not, until 180 days following the Closing Date,
without the prior written
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consent of Salomon Brothers Inc, offer, sell or contract to sell, or
otherwise dispose of, directly or indirectly, or announce the offering of,
or file a registration statement for, any debt securities issued or
guaranteed by the Company or any Guarantor (other than (i) the Securities
and (ii) pursuant to a registered public offering as provided in the
Registration Agreement). Neither the Company nor any Guarantor will at any
time offer, sell, contract to sell or otherwise dispose of, directly or
indirectly, any securities under circumstances where such offer, sale,
contract or disposition would cause the exemption afforded by Section 4(2)
of the Securities Act or the safe harbor of Regulation S thereunder to
cease to be applicable to the offer and sale of the Securities as
contemplated by this Agreement and the Final Memorandum.
(l) Neither the Company nor any Guarantor will take, directly or
indirectly, any action prohibited by Regulation M under the Exchange Act,
in connection with any offering of the Securities.
(m) The Company and the Guarantors hereby agree to permit the
Securities to be designated PORTAL eligible securities, will pay the
requisite fees related thereto and have been advised by the National
Association of Securities Dealers, Inc. PORTAL Market that the Securities
have or will be designated PORTAL eligible securities in accordance with
the rules and regulations of the National Association of Securities
Dealers, Inc.
(n) The Company will apply the net proceeds of the offering and sale
of the Securities in the manner set forth in the Final Memorandum under
the caption "Use of Proceeds".
6. Conditions to the Obligations of the Purchasers. The obligations
of the Purchasers to purchase the Securities shall be subject to the accuracy of
the representations and warranties on the part of the Company and the Guarantors
contained herein at the date and time that this Agreement is executed and
delivered by the parties hereto (the "Execution Time") and the Closing Date, to
the accuracy of the statements of the Company and the Guarantors made in any
certificates pursuant to the provisions hereof, to the performance by the
Company and the Guarantors of their respective obligations hereunder and to the
following additional conditions:
(a) The Company shall have furnished to the
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Purchasers the opinion of Xxxxxx & Xxxxx, counsel for the Company, dated
the Closing Date, to the effect that:
(i) each of the Company and Shieldalloy Metallurgical
Corporation, Metallurg Services, Inc., and MIR (China), Inc. has
been duly incorporated and is validly existing as a corporation in
good standing under the laws of the jurisdiction in which it is
chartered or organized, with full corporate power and authority to
own its properties and conduct its business as described in the
Final Memorandum, and each Guarantor is duly qualified to do
business as a foreign corporation and is in good standing under the
laws of each jurisdiction which requires such qualification wherein
it owns or leases material properties or conducts material business;
(ii) the Company's authorized equity capitalization is as set
forth in the Final Memorandum and the Securities conform in all
material respects to the description thereof contained in the Final
Memorandum;
(iii) the Indenture has been duly authorized, executed and
delivered, and constitutes a legal, valid and binding instrument
enforceable against the Company and the Guarantors in accordance
with its terms (subject, as to the enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, moratorium or
other laws affecting creditors' rights generally from time to time
in effect); the Securities are in the form contemplated by the
Indenture and have been duly authorized and executed by the Company
and the Guarantors and, when authenticated in accordance with the
provisions of the Indenture and delivered to and paid for by the
Purchasers pursuant to this Agreement, will constitute legal, valid
and binding obligations of the Company and the Guarantors entitled
to the benefits of the Indenture and enforceable in accordance with
their terms (subject, as to the enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, moratorium or
other laws affecting creditors' rights generally from time to time
in effect); and the statements set forth under the heading
"Description of the Notes" in the Final Memorandum, insofar as such
statements purport to summarize certain provisions of the Securities
and the Indenture, provide a fair summary of such
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provisions;
(iv) the Indenture conforms as to form in all material
respects with the requirements of the Trust Indenture Act, and the
rules and regulations of the Securities and Exchange Commission (the
"Commission") applicable to an indenture which is qualified
thereunder;
(v) the information contained in the Final Memorandum under
the headings "Business--Environmental Matters", "Business--Legal
Proceedings", "Certain Transactions", "Description of Credit
Facilities and Other Financing Arrangements" and "Certain Federal
Income Tax Considerations", fairly summarizes the matters therein
described;
(vi) this Agreement and the Registration Agreement have been
duly authorized, executed and delivered by the Company and the
Guarantors;
(vii) no consent, approval, authorization or order of, or
filing or registration with, any court or governmental agency or
body is required for the execution, delivery and performance of this
Agreement, the Indenture, the Registration Agreement and the
Securities or for the consummation of the Transactions, except such
as may be required under the blue sky or securities laws of any
jurisdiction in connection with the purchase and sale of the
Securities by the Purchasers and except such as may be required
under the Securities Act with respect to the Registration Agreement
and the transactions contemplated thereunder;
(viii) none of the issue and sale of the Securities, the
execution and delivery of this Agreement, the Registration Agreement
or the Indenture, the fulfillment of the terms hereof or thereof or
the consummation of the Transactions will conflict with, result in a
breach or violation of, or constitute a default under any provision
of applicable law or the charter or by-laws of the Company or any
Guarantor or the terms of any indenture or other agreement or
instrument set forth in an exhibit to such opinion, or any judgment,
order or decree known to such counsel to be applicable to the
Company or any of the Guarantors of any court, regulatory body,
administrative agency, governmental body or
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arbitrator having jurisdiction over the Company or any of the
Guarantors;
(ix) assuming the accuracy of the representations and
warranties and compliance with the agreements contained herein, no
registration of the Securities under the Securities Act is required,
and no qualification of the Indenture under the Trust Indenture Act
is necessary, for the offer, sale and delivery of the Securities in
the manner contemplated by this Agreement;
(x) none of the Company or any of the Guarantors is, or after
giving effect to the offering and sale of the Securities and the
application of the net proceeds therefrom, will be, an "investment
company" within the meaning of the Investment Company Act and the
rules and regulations of the Commission thereunder, without taking
account of any exemption arising out of the number of holders of the
Company's securities;
(xi) to the best of such counsel's knowledge, there is no
pending or threatened action or suit or judicial, arbitral or other
administrative proceeding to which the Company or any of the
Guarantors is a party or of which any property or assets of the
Company or any of the Guarantors is the subject that, individually
or in the aggregate, questions the validity of this Agreement, the
Registration Agreement, the Indenture, the Securities, the
Transactions or any action taken or to be taken pursuant hereto or
thereto; and
(xii) following the deposit with the Trustee of funds in an
amount sufficient to cover the redemption of the Secured Notes, the
Secured Notes Indenture will be of no further force and effect,
except as to any surviving rights of transfer or exchange of the
Secured Notes expressly provided for therein and the obligations of
the Company regarding compensation and indemnity.
Such counsel shall also state that while they have not (except
as provided above) independently verified and are not passing upon, and do
not assume any responsibility for the accuracy, completeness or fairness
of the information contained in the Final Memorandum (except as provided
above), on the basis of their participation in the preparation of the
Preliminary Memorandum and the Final Memorandum and
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their discussions with certain officers, directors and employees of the
Company, representatives of Deloitte & Touche LLP, the independent
accountants who examined certain of the financial statements of the
Company and the Guarantors included in the Final Memorandum, and the
Purchasers, they have no reason to believe that at the Execution Time the
Final Memorandum contained an untrue statement of a material fact or
omitted to state a material fact necessary in order to make the statements
therein (other than the financial statements and other financial and
statistical data therein), in the light of the circumstances under which
they were made, not misleading or that the Final Memorandum (other than
the financial statements and other financial and statistical data therein)
includes an untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
In rendering such opinion, such counsel may rely as to matters of
fact, to the extent they deem proper, on certificates of responsible
officers of the Company and public officials, copies of which shall be
provided to the Purchasers.
All references in this Section 6(a) to the Final Memorandum
shall be deemed to include any amendment or supplement thereto at the
Closing Date.
(b) The Company shall have furnished to the Purchasers the opinion
of Xxxx X. Xxxxxxxxx, Esq., Vice President and General Counsel of the
Company, dated the Closing Date, to the effect that:
(i) all the outstanding shares of capital stock of the Company
and each Guarantor have been duly and validly authorized and issued
and are fully paid and nonassessable. Except as otherwise set forth
in the Final Memorandum, all outstanding shares of capital stock of
each Guarantor, London & Scandinavian Metallurgical Co., Limited
("LSM"), GfE Gesellschaft fur Elektrometallurgie mbH ("GfE") and
Elektrowerk Weisweiller GmbH ("EWW") (collectively with the
Guarantors, the "Specified Subsidiaries") are owned by the Company
either directly or through wholly owned subsidiaries free and clear
of any perfected security interest and, to the knowledge of such
counsel, after due inquiry, any other security interests, claims,
liens or encumbrances;
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(ii) none of the issue and sale of the Securities, the
execution and delivery of this Agreement, the Registration Agreement
or the Indenture, the fulfillment of the terms hereof or thereof or
the consummation of the Transactions will conflict with, result in a
breach or violation of, or constitute a default under any law or the
terms of any indenture or other agreement or instrument known to
such counsel and to which the Company or any of the Specified
Subsidiaries is a party or bound or any judgment, order or decree
known to such counsel to be applicable to the Company or any of the
Specified Subsidiaries of any court, regulatory body, administrative
agency, governmental body or arbitrator having jurisdiction over the
Company or any of the Specified Sub- sidiaries;
(iii) to the best of such counsel's knowledge, there is no
pending or threatened action or suit or judicial, arbitral or other
administrative proceeding to which the Company, the Guarantors or
any of their respective subsidiaries is a party or of which any
property or assets of the Company, the Guarantors or any of their
respective subsidiaries is the subject that, individually or in the
aggregate, (A) questions the validity of this Agreement, the
Registration Agreement, the Indenture, the Securities, the
Transactions or any action taken or to be taken pursuant hereto or
thereto, or (B) if determined adversely to the Company, the
Guarantors or any of their respective subsidiaries, is reasonably
likely to have a Material Adverse Effect;
Such counsel shall also state that while he has not
independently verified and is not passing upon, and does not assume any
responsibility for the accuracy, completeness or fairness of the
information contained in the Final Memorandum, on the basis of his
participation in the preparation of the Preliminary Memorandum and the
Final Memorandum and his discussions with certain officers, directors and
employees of the Company, representatives of Deloitte & Touche LLP, the
independent accountants who examined certain of the financial statements
of the Company and the Guarantors included in the Final Memorandum, and
the Purchasers, he has no reason to believe that at the Execution Time the
Final Memorandum contained an untrue statement of a material fact or
omitted to state a material fact necessary in order to make the statements
therein
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(other than the financial statements and other financial and statistical
data therein), in the light of the circumstances under which they were
made, not misleading or that the Final Memorandum (other than the
financial statements and other financial and statistical data therein)
includes an untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction other than
the State of New York, the State of Delaware or the United States, to the
extent he deems proper and specified in such opinion, upon the opinion of
other counsel of good standing whom he believes to be reliable and who are
satisfactory to Cravath, Swaine & Xxxxx, copies of which shall be provided
to the Purchasers, and (B) as to matters of fact, to the extent he deems
proper, on certificates of responsible officers of the Company and public
officials, copies of which shall be provided to the Purchasers.
All references in this Section 6(b) to the Final Memorandum
shall be deemed to include any amendment or supplement thereto at the
Closing Date.
(c) The Company shall have furnished to the Purchasers the opinion
of Xx. Xxxxxxxx Xxxxxx, special German counsel to EWW and GfE dated the
Closing Date, to the effect that:
(i) each of EWW and GfE has been duly incorporated and is
validly existing as a corporation in good standing under the laws of
Germany, with full corporate power and authority to own its
properties and conduct its business as described in the Preliminary
Memorandum and the Final Memorandum;
(ii) the information contained in the Final Memorandum under
the headings "Offering Memorandum Summary--Business
Strategies--Improve Financial Flexibility," "Risk Factors--Holding
Company Structure; Restrictions on Dividend Payments by
Subsidiaries" and "Business--Business Strategy--Improve Financial
Flexibility," insofar as they purport to describe the legal
requirements relating to the payment of dividends under German law,
fairly summarizes the matters therein
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described;
(iii) except as otherwise set forth in the Final Memorandum,
there are no consents, permissions, authorizations, approvals or
orders of, or filings or registrations with or notices to, any
court, regulatory body, administrative agency or other governmental
body, other than those which have been obtained or duly requested or
made by EWW and GfE, which are required under German law for the
payment of dividends by GfE and EWW. As a result of such actions,
such entities will be permitted under German law to pay dividends on
or before December 31, 1998;
(iv) all of the outstanding shares of capital stock of EWW
have been duly and validly authorized and issued and are fully paid
and nonassessable, and all outstanding shares of capital stock of
EWW are owned by the Company, except as otherwise set forth in the
Final Memorandum, either directly or through wholly owned
subsidiaries free and clear of any perfected security interest and,
to such counsel's knowledge, after due inquiry, any other security
interests, claims, liens or encumbrances, except as otherwise set
forth in the Final Memorandum; and
(v) all of the outstanding shares of capital stock of GfE have
been duly and validly authorized and issued and are fully paid and
nonassessable, and all outstanding shares of capital stock of GfE
are owned by Metallurg Holdings Corporation, except as otherwise set
forth in the Final Memorandum, either directly or through wholly
owned subsidiaries free and clear of any perfected security interest
and, to such counsel's knowledge, after due inquiry, any other
security interests, claims, liens or encumbrances, except as
otherwise set forth in the Final Memorandum.
All references in this Section 6(c) to the Final Memorandum
shall be deemed to include any amendment or supplement thereto at the
Closing Date.
(d) The Company shall have furnished to the Purchasers the opinion
of Dibb Xxxxxx Xxxxx, special English counsel to LSM dated the Closing
Date, to the effect that:
(i) LSM has been duly incorporated and is validly existing as
a company under the laws of
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England and has all requisite power and authority to carry on its
business as currently conducted and own property;
(ii) all of the shares in the capital of LSM (x) have been
duly and validly authorized and are issued and fully paid and (y)
are registered in the name of Metallurg Holdings Corporation.
(e) The Company shall have furnished to the Purchasers the opinion
of Xxxxxx & Xxxxxxx, special New Jersey counsel to Metallurg Holdings
Corporation ("Holdings") dated the Closing Date, to the effect that:
(i) Holdings has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of New Jersey, with full corporate power and authority to own
its properties and conduct its business as described in the Final
Memorandum; and
(ii) the execution, delivery and performance of this
Agreement, the Registration Agreement and the Indenture have been
duly authorized by all necessary corporate action on the part of
Holdings.
All references in this Section 6(e) to the Final Memorandum
shall be deemed to include any amendment or supplement thereto at the
Closing Date.
(f) The Purchasers shall have received from Cravath, Swaine & Xxxxx
such opinion or opinions, dated the Closing Date, with respect to the
issuance and sale of the Securities, the Final Memorandum (as amended or
supplemented at the Closing Date) and other related matters as the
Purchasers may reasonably require, and the Company shall have furnished to
such counsel such documents as they request for the purpose of enabling
them to pass upon such matters.
(g) The Company shall have furnished to the Purchasers a certificate
of the Company, signed by the Chairman, President and Chief Executive
Officer and the Vice President-Finance and Chief Financial Officer of the
Company, dated the Closing Date, to the effect that the signers of such
certificate have carefully examined the Final Memorandum, any amendment or
supplement to the Final Memorandum and this Agreement and the Registration
Agreement and that:
(i) the representations and warranties of the
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Company and the Guarantors in this Agreement and the Registration
Agreement are true and correct in all material respects on and as of
the Closing Date with the same effect as if made on the Closing
Date, and the Company and the Guarantors have complied with all the
agreements and satisfied all the conditions on its part to be
performed or satisfied hereunder or thereunder at or prior to the
Closing Date; and
(ii) since the date of the most recent financial statements
included in the Final Memorandum, there has been no material adverse
change in the condition (financial or otherwise), earnings, business
or properties, of the Company and its subsidiaries, taken as a
whole, whether or not arising from transactions in the ordinary
course of business, except as set forth in or contemplated by the
Final Memorandum (exclusive of any amendment or supplement thereof
or thereto).
(h) At the Execution Time and at the Closing Date, Deloitte & Touche
LLP shall have furnished to the Purchasers a letter or letters, dated
respectively as of the Execution Time and as of the Closing Date, in form
and substance satisfactory to the Purchasers, confirming that they are
independent accountants within the meaning of Rule 101 of the Code of
Professional Conduct of the American Institute of Certified Public
Accountants (the "AICPA") and stating in effect that:
(i) based upon (x) their review, in accordance with standards
established under Statement on Auditing Standards No. 71, of the
unaudited interim financial information for the quarter ended July
31, 1997, and as at July 31, 1997, and (y) the procedures detailed
in such letter with respect to the period subsequent to the date of
the latest audited financial statements included in the Final
Memorandum, including the reading of the minutes and inquiries of
certain officials of the Company who have responsibility for the
financial and accounting matters and certain other limited
procedures requested by the Purchasers and described in detail in
such letter, nothing has come to their attention that causes them to
believe that:
(A) any unaudited financial statements of the Company
included in the Final Memorandum are not, in all material
respects, in conformity with generally accepted
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accounting principles applied on a basis substantially
consistent with that of the audited financial statements of
the Company included in the Final Memorandum; or
(B) with respect to the period subsequent to July 31,
1997, there were, at a specified date not more than five
business days prior to the date of the letter, any changes in
the total debt of the Company and its subsidiaries or capital
stock of the Company or decreases in the shareholders' equity
of the Company or decreases in working capital of the Company
and its subsidiaries, as compared with the amounts shown on
the July 31, 1997, consolidated balance sheet included in the
Final Memorandum, or for the period from August 1, 1997, to
such specified date there were any decreases, as compared with
the corresponding period in the preceding year in total
revenue, income (loss) before income tax provision, net income
or EBITDA, as defined in the Indenture, except in all
instances for changes or decreases set forth in such letter,
in which case the letter shall be accompanied by an
explanation by the Company as to the significance thereof
unless said explanation is not deemed necessary by the
Purchasers;
(ii) they have performed certain other specified procedures as
a result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the Company and its subsidiaries) set
forth in the Final Memorandum, including the information set forth
under the captions "Offering Memorandum Summary", "Risk Factors",
"Use of Proceeds", "Capitalization" "Selected Financial Data",
"Management's Discussion and Analysis of Financial Condition and
Results of Operations", "Business", "Management", "Description of
Credit Facilities", "Description of the Notes" and "Exchange Offer;
Registration Rights" in the Final Memorandum, agrees with the
accounting records of the Company and its subsidiaries, excluding
any questions of legal interpretation; and
(iii) on the basis of a reading of the unaudited pro forma
financial statements (the "pro
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forma financial statements") included in the Final Memorandum,
carrying out certain specified procedures, inquiries of certain
officials of the Company who have responsibility for financial and
accounting matters, and proving the arithmetic accuracy of the
application of the pro forma adjustments to the historical amounts
in the pro forma financial statements, nothing came to their
attention which caused them to believe that the pro forma
adjustments have not been properly applied to the historical amounts
in the compilation of such statements.
All references in this Section 6(h) to the Final Memorandum shall be
deemed to include any amendment or supplement thereto at the date of the letter.
(i) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Final Memorandum, there shall not have
been (i) any change or decrease specified in the letter or letters
referred to in paragraph (h) of this Section 6 or (ii) any change, or any
development involving a prospective change, in or affecting the business
or properties of the Company and its subsidiaries the effect of which, in
any case referred to in clause (i) or (ii) above, is, in the judgment of
the Purchasers, so material and adverse as to make it impractical or
inadvisable to market the Securities as contemplated by the Final
Memorandum.
(j) On or prior to the Closing Date, the Registration Agreement
shall have been executed substantially in the form hereto delivered to you
and shall have been delivered to you and the Trustee.
(k) Subsequent to the Execution Time, there shall not have been any
decrease in the rating of the Securities or any of the Company's other
debt securities by any "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g) under the Securities
Act) or any notice given of any intended or potential decrease in any such
rating or that such organization has under surveillance or review (other
than any such notice with positive implications of a possible upgrading)
its rating of the Securities or any of the Company's other debt
securities.
(l) The Third Amendment dated as of November 25, 1997 to the Loan
Agreement dated as of April 14, 1997, among the Company, the Guarantors,
BankBoston, N.A. and
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the Banks party thereto shall be in full force and effect on the Closing
Date.
(m) Prior to the Closing Date, the Company and the Guarantors shall
have furnished to the Purchasers such further information, certificates
and documents as the Purchasers may reasonably request.
If any of the conditions specified in this Section 6 shall not have
been fulfilled when and as provided in this Agreement, or if any of the opinions
and certificates mentioned above or elsewhere in this Agreement shall not be
reasonably satisfactory in form and substance to the Purchasers and Cravath,
Swaine & Xxxxx, this Agreement and all obligations of the Purchasers hereunder
may be canceled at, or at any time prior to, the Closing Date by the Purchasers.
Notice of such cancelation shall be given to the Company in writing or by
telephone or telegraph confirmed in writing.
The documents required to be delivered by this Section 6 will be
delivered at the office of Cravath, Swaine & Xxxxx, 000 Xxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx, xx the
Closing Date.
7. Reimbursement of Expenses. If the sale of the Securities provided
for herein is not consummated because any condition to the obligations of the
Purchasers set forth in Section 6 hereof is not satisfied or because of any
refusal, inability or failure on the part of the Company or any Guarantor to
perform any agreement herein or comply with any provision hereof, in each case
other than by reason of a default by any of the Purchasers, the Company and the
Guarantors jointly and severally will reimburse the Purchasers upon demand for
all out-of-pocket expenses (including reasonable fees and disbursements of
counsel) that shall have been incurred by them in connection with the proposed
purchase and sale of the Securities.
8. Indemnification and Contribution. (a) The Company and the
Guarantors jointly and severally agree to indemnify and hold harmless each
Purchaser, each director, officer, employee and agent of any Purchaser and each
other person, if any, who controls any Purchaser within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act against any and all
losses, claims, damages or liabilities, joint or several, to which they or any
of them may become subject under the Securities Act, the Exchange Act or other
Federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue
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24
statement or alleged untrue statement of a material fact contained in the
Preliminary Memorandum, the Final Memorandum or any information provided by the
Company to any holder or prospective purchaser of Securities pursuant to Section
5(i), or in any amendments thereof or supplements thereto, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading, and
agrees to reimburse each such indemnified party, as incurred, for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that neither the Company nor any Guarantor will be liable in any such case to
the extent that any such loss, claim, damage or liability arises out of or is
based upon any such untrue statement or alleged untrue statement or omission or
alleged omission made in the Preliminary Memorandum or the Final Memorandum, or
in any amendment thereof or supplement thereto, in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
the Purchasers specifically for inclusion therein, it being understood that the
only such information is that described in Section 8(b); provided further,
however, that the indemnity agreement contained in this Section 8(a) shall not
inure to the benefit of any indemnified party to the extent that it is
determined by a final, non-appealable judgment that (i) the Preliminary
Memorandum contained an untrue statement of a material fact or omitted to state
therein 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, (ii) the sale to the person asserting any such losses, claims,
damages or liabilities was an initial resale of the Securities by any Purchaser,
(iii) any such loss, claim, damage or liability of such indemnified party
results from the fact that there was not sent or given to such person, at or
prior to the written confirmation of the sale of such Securities to such person,
a copy of any revised Preliminary Memorandum, the Final Memorandum or the Final
Memorandum as amended or supplemented, and the Company had previously furnished
copies thereof to such Purchaser and (iv) the revised Preliminary Memorandum,
the Final Memorandum or the Final Memorandum as amended or supplemented
corrected such untrue statement or omission. This indemnity agreement will be in
addition to any liability that the Company or the Guarantors may otherwise have.
(b) Each Purchaser, severally and not jointly, agrees to indemnify
and hold harmless each of the Company and the Guarantors, their respective
directors and officers,
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25
and each other person, if any, who controls the Company or any Guarantor within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act, to the same extent as the foregoing indemnity from the Company and
the Guarantors to the Purchasers, but only with reference to written information
relating to the Purchasers furnished to the Company by or on behalf of the
Purchasers specifically for inclusion in the Preliminary Memorandum or the Final
Memorandum (or in any amendment thereof or supplement thereto). This indemnity
agreement will be in addition to any liability which the Purchasers may
otherwise have. The Company and the Guarantors acknowledge that the statements
set forth in the last paragraph of the cover page and under the heading "Plan of
Distribution" in the Preliminary Memorandum and the Final Memorandum (or in any
amendment thereof or supplement thereto) constitute the only information
furnished in writing by or on behalf of the Purchasers for inclusion in the
Preliminary Memorandum or the Final Memorandum (or in any amendment thereof or
supplement thereto).
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure results
in the forfeiture by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above. The indemnifying party shall be entitled
to appoint as counsel one firm of attorneys of the indemnifying party's choice
at the indemnifying party's expense which counsel, together with one local
counsel in each applicable jurisdiction, shall act on behalf of all the
indemnified parties in any action for which indemnification is sought (in which
case the indemnifying party shall not thereafter be responsible for the fees and
expenses of any separate counsel retained by the indemnified party or parties
except as set forth below); provided, however, that such counsel shall be
reasonably satisfactory to the indemnified party. Notwithstanding the
indemnifying party's election to appoint counsel to represent the indemnified
party in an action, the indemnified party shall have the right to employ
separate counsel (including local counsel), and the indemnifying party shall
bear the fees, costs and expenses of such separate counsel, if (i) the use of
counsel chosen by the
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indemnifying party to represent the indemnified party would present such counsel
with a conflict of interest, (ii) the actual or potential defendants in, or
targets of, any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, (iii) the indemnifying party shall not have employed counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after notice of the institution of such action or
(iv) the indemnifying party shall authorize the indemnified party to employ
separate counsel at the expense of the indemnifying party. An indemnifying party
will not, without the prior written consent of the indemnified parties, settle
or compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the Guarantors on the one hand
and the Purchasers on the other hand agree to contribute to the aggregate
losses, claims, damages and liabilities (including legal or other expenses
reasonably incurred in connection with investigating or defending same)
(collectively "Losses") to which the Company and the Guarantors or the
Purchasers, as applicable, may be subject in such proportion as is appropriate
to reflect the relative benefits received by the Company and the
Guarantors or
the Purchasers, as applicable, from the offering of the Securities; provided,
however, that in no case shall any Purchaser be responsible for any amount in
excess of the purchase discount or commission applicable to the Securities
purchased by such Purchaser hereunder. If the allocation provided by the
immediately preceding sentence is unavailable for any reason, the Company and
the Guarantors on the one hand and the Purchasers on the other hand shall
contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company and the Guarantors
or the Purchasers, as applicable, in connection with the statements or omissions
which resulted in such Losses as well as any other relevant equitable
considerations. Benefits received by the Company and the
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Guarantors shall be deemed to be equal to the total net proceeds from the
offering of the Securities (before deducting expenses), and benefits received by
the Purchasers shall be deemed to be equal to the total purchase discounts and
commissions, in each case as set forth on the cover page of the Final
Memorandum. Relative fault shall be determined by reference to whether any
alleged untrue statement or omission relates to information provided by the
Company or the Guarantors on the one hand and the Purchasers on the other hand.
The Company, the Guarantors and the Purchasers agree that it would not be just
and equitable if contribution were determined by pro rata allocation or any
other method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this
paragraph (d), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 8, each person who controls a
Purchaser within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act and each director, officer, employee and agent of a
Purchaser shall have the same rights to contribution as such Purchaser, and each
person who controls the Company or any Guarantor within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act and each officer and
director of the Company or any Guarantor shall have the same rights to
contribution as the Company and the Guarantors, subject in each case to the
applicable terms and conditions of this paragraph (d).
9. Default by a Purchaser. If any one of the Purchasers shall fail
to purchase and pay for any of the Securities agreed to be purchased by such
Purchaser hereunder and such failure to purchase shall constitute a default in
the performance of its obligations under this Agreement, the remaining Purchaser
shall be obligated to take up and pay for the Securities that the defaulting
Purchaser agreed but failed to purchase; provided, however, that in the event
that the aggregate principal amount of Securities that the defaulting Purchaser
agreed but failed to purchase shall exceed 10% of the aggregate principal amount
of Securities set forth in Schedule I hereto, the remaining Purchaser shall have
the right to purchase all, but shall not be under any obligation to purchase
any, of the Securities, and if such non-defaulting Purchaser does not purchase
all the Securities, this Agreement will terminate without liability to such
non-defaulting Purchaser, the Company or any Guarantor. In the event of a
default by any Purchaser as set forth in this Section 9, the Closing Date shall
be postponed for such period, not exceeding seven days, as the Purchasers shall
determine in
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order that the required changes in the Final Memorandum or in any other
documents or arrangements may be effected. Nothing contained in this Agreement
shall relieve any defaulting Purchaser of its liability, if any, to the Company,
any Guarantor or any non-defaulting Purchaser for damages occasioned by its
default hereunder.
10. Termination. This Agreement shall be subject to termination in
the absolute discretion of the Purchasers, by notice given to the Company prior
to delivery of and payment for the Securities, if prior to such time (i) trading
in securities generally on the New York Stock Exchange shall have been suspended
or limited or minimum prices shall have been established on such Exchange, (ii)
a banking moratorium shall have been declared either by Federal or New York
State authorities or (iii) there shall have occurred any outbreak or escalation
of hostilities, declaration by the United States of a national emergency or war
or other calamity or crisis the effect of which on financial markets is such as
to make it, in the judgment of the Purchasers, impracticable or inadvisable to
proceed with the offering or delivery of the Securities as contemplated by the
Final Memorandum.
11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company, the Guarantors or their respective officers and of the Purchasers set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of the Purchasers,
the Company or the Guarantors or any of the officers, directors or controlling
persons referred to in Section 8 hereof, and will survive delivery of and
payment for the Securities. The provisions of Sections 7 and 8 hereof shall
survive the termination or cancelation of this Agreement.
12. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Purchasers, will be mailed,
delivered or telegraphed and confirmed to them, care of Salomon Brothers Inc, at
Xxxxx Xxxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000; or, if sent to the Company,
will be mailed, delivered or telegraphed and confirmed to it at 0 Xxxx 00xx
Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Fax: (000) 000-0000, Attention:
Secretary.
13. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 8 hereof, and,
except as expressly set forth in Section 5(i) hereof, no other person will have
any right or obligation hereunder.
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14. APPLICABLE LAW. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO THE
CONFLICT OF LAW PROVISIONS THEREOF).
15. Business Day. For purposes of this Agreement, "business day"
means each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on
which banking institutions in The City of New York, New York are authorized or
obligated by law, executive order or regulation to close.
16. Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original, but all such
counterparts will together constitute one and the same instrument.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this Agreement and your
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acceptance shall represent a binding agreement among the Company, the Guarantors
and the Purchasers.
Very truly yours,
METALLURG, INC.
By:
---------------------------------
Name:
Title:
SHIELDALLOY METALLURGICAL CORPORATION
By:
---------------------------------
Name:
Title:
METALLURG HOLDINGS CORPORATION
By:
---------------------------------
Name:
Title:
METALLURG SERVICES, INC.
By:
---------------------------------
Name:
Title:
MIR (CHINA), INC.
By:
---------------------------------
Name:
Title:
The foregoing Agreement is hereby
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confirmed and accepted as of the
date first above written.
SALOMON BROTHERS INC
BANCBOSTON SECURITIES INC.
By: SALOMON BROTHERS INC
By:
-----------------------
Name:
Title:
For themselves and the other
Purchasers named in
Schedule I to the foregoing Agreement
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SCHEDULE I
Principal
Amount of
Securities to
Purchasers be Purchased
---------- -------------
Salomon Brothers Inc ......................... $ 50,000,000
BancBoston Securities Inc. ................... 50,000,000
------------
Total ...................... $100,000,000
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1
EXHIBIT A
Selling Restrictions for Offers and
Sales outside the United States
(1)(a) The Securities have not been and will not be registered under
the Securities Act and may not be offered or sold within the United States or
to, or for the account or benefit of, U.S. persons except in accordance with
Regulation S under the Securities Act or pursuant to an exemption from the
registration requirements of the Securities Act. Each Purchaser represents and
agrees that, except as otherwise permitted by Section 4(a)(i) of the Agreement
to which this is an exhibit, it has offered and sold the Securities, and will
offer and sell the Securities, (i) as part of their distribution at any time and
(ii) otherwise until 40 days after the later of the commencement of the offering
and the Closing Date, only in accordance with Rule 903 of Regulation S under the
Securities Act. Accordingly, each Purchaser represents and agrees that neither
it, nor any of its affiliates nor any person acting on its or their behalf has
engaged or will engage in any directed selling efforts with respect to the
Securities, and that it and they have complied and will comply with the offering
restrictions requirement of Regulation S. Each Purchaser agrees that, at or
prior to the confirmation of sale of Securities (other than a sale of Securities
pursuant to Section 4(a)(i) of the Agreement to which this is an exhibit), it
shall have sent to each distributor, dealer or person receiving a selling
concession, fee or other remuneration that purchases Securities from it during
the restricted period a confirmation or notice to substantially the following
effect:
"The Securities covered hereby have not been registered under the
U.S. Securities Act of 1933 (the "Securities Act") and may not be offered
or sold within the United States or to, or for the account or benefit of,
U.S. persons (i) as part of their distribution at any time or (ii)
otherwise until 40 days after the later of the commencement of the
offering and November 25, 1997, except in either case in accordance with
Regulation S or Rule 144A under the Securities Act. Terms used above have
the meanings given to them by Regulation S.
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(b) Each Purchaser also represents and agrees that it has not
entered and will not enter into any contractual arrangement with any distributor
with respect to the distribution of the Securities, except with its affiliates
or with the prior written consent of the Company.
(c) Terms used in this section have the meanings given to them by
Regulation S.
(2) Each Purchaser represents and agrees that (i) it has not offered
or sold, and will not offer or sell, in the United Kingdom, by means of any
document, any Securities other than to persons whose ordinary business it is to
buy or sell shares or debentures, whether as principal or as agent (except in
circumstances which do not constitute an offer to the public within the meaning
of the Companies Xxx 0000 of Great Britain), (ii) it has complied and will
comply with all applicable provisions of the Financial Services Xxx 0000 of the
United Kingdom with respect to anything done by it in relation to the Securities
in, from or otherwise involving the United Kingdom, and (iii) it has only issued
or passed on and will only issue or pass on in the United Kingdom any document
received by it in connection with the issue of the Securities to a person who is
of a kind described in Article 9(3) of the Financial Services Xxx 0000
(Investment Advertisements) (Exemptions) Order 1988 or is a person to whom the
document may otherwise lawfully be issued or passed on.
