EXHIBIT 1-B
NATIONAL STEEL CORPORATION
$75,000,000
FIRST MORTGAGE BONDS, 9 7/8% SERIES C DUE 2009
Purchase Agreement
New York, New York
March 24, 1999
XXXXXXX XXXXX XXXXXX INC.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
National Steel Corporation, a Delaware corporation (the "COMPANY"),
proposes to issue and sell to Xxxxxxx Xxxxx Barney Inc. hereto
(the "INITIAL PURCHASER") $75,000,000 principal amount of its First Mortgage
Bonds, 9 7/8% Series C due 2009 (the "SECURITIES"). The Securities are to be
issued under the Indenture of Mortgage and Deed of Trust dated May 1, 1952 (the
"ORIGINAL INDENTURE") from the Company and Great Lakes Steel Corporation, a
former wholly-owned subsidiary of the Company which in 1966 was merged into the
Company, to City Bank Farmers Trust Company and Xxxxx X. Xxxxxx, as Trustees, as
supplemented by all instruments supplemental thereto, including a proposed
Eleventh Supplemental Indenture to be dated as of March 31, 1999 (the "ELEVENTH
SUPPLEMENTAL INDENTURE"), among the Company and The Chase Manhattan Bank (the
"TRUSTEE") and Xxxxx X. Xxxxxx, as Trustees. The Original Indenture and all
instruments supplemental thereto are herein together sometimes referred to as
the "Indenture". The Securities have the benefit of the Registration Rights
Agreement (the "REGISTRATION RIGHTS AGREEMENT"), to be dated as of March 31,
1999, between the Company and the Initial Purchaser, pursuant to which the
Company has agreed to register the Securities under the Securities Act subject
to the terms and conditions therein specified. The use of the neuter in this
Agreement shall include the feminine and masculine wherever appropriate. Certain
terms used herein are defined in Section 17 herein.
The sale of the Securities to the Initial Purchaser will be made without
registration of the Securities under the Securities Act in reliance upon
exemptions from the registration requirements of the Securities Act.
In connection with the sale of the Securities, the Company has prepared a
final offering memorandum, dated March 24, 1999 (including any information
incorporated by reference therein, the "FINAL MEMORANDUM"). The Final Memorandum
sets forth certain information concerning the Company and the Securities. The
Company hereby confirms that it has authorized the use of the the Final
Memorandum in connection with the offer and sale of the Securities by the
Initial Purchaser. Unless stated to the contrary, all references herein to the
Final Memorandum are to the Final Memorandum at the date and time that this
Agreement is executed and delivered by the parties hereto (the "EXECUTION TIME")
and are not meant to include any amendment or supplement thereto subsequent to
the Execution Time and any references herein to the terms "amend", "amendment"
or "supplement" with respect to the Final Memorandum shall be deemed to refer to
and include any information filed under the Exchange Act, subsequent to the
Execution Time which is incorporated by reference therein.
Capitalized terms used herein without definition have the respective
meanings assigned to them in the Final Memorandum.
1. Representations and Warranties. The Company represents and warrants to
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the Initial Purchaser as set forth below in this Section 1.
(a) At the Execution Time and on the Closing Date, the Final
Memorandum does 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 the Company makes no
representation or warranty as to the information contained in or omitted
from the Final Memorandum, or any amendment or supplement thereto, in
reliance upon and in conformity with information furnished in writing to
the Company by or on behalf of the Initial Purchaser specifically for
inclusion therein, it being understood that the only such information is
that described in Section 8(b) hereof.
(b) Each document filed pursuant to the Exchange Act and incorporated
by reference in the Final Memorandum, when it was filed with the
Commission, as amended at or prior to the Closing Date, conformed in all
material respects to the requirements of the Exchange Act
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and none of such documents contained an untrue statement of a material fact or
omitted to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading; and
any further documents so filed and incorporated by reference in the Final
Memorandum when such documents are filed with the Commission, will conform in
all material respects to the requirements of the Exchange Act, and will not
contain an untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(c) The consolidated financial statements, and the related notes thereto,
included or incorporated by reference in the Final Memorandum present fairly the
consolidated financial position of the Company and its consolidated subsidiaries
as of the dates indicated and the results of their operations and the changes in
their consolidated cash flows for the periods specified; and said consolidated
financial statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis except as otherwise
specified therein or in the reports related thereto, and the supporting
schedules included or incorporated by reference in the Final Memorandum present
fairly the information required to be stated therein.
(d) Since the respective dates as of which information is given in the
Final Memorandum, there has not been any material adverse change in or affecting
the business, prospects, financial position or results of operations of the
Company and its subsidiaries (which term shall, for purposes of this Agreement,
be limited to entities in which the Company has a majority interest) taken as a
whole, otherwise than as set forth or contemplated in the Final Memorandum and,
except as set forth or contemplated in the Final Memorandum neither the Company
nor any of its subsidiaries has entered into any transaction or agreement
(whether or not in the ordinary course of business) material to the Company and
its subsidiaries taken as a whole.
(e) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the state of its incorporation,
with corporate power and authority to own its properties and conduct its
business as described in the Final Memorandum, and has been duly qualified as a
foreign corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases properties,
or conducts any business, so as to require such qualification, other than where
the failure to be so qualified or in good
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standing would not have a material adverse effect on the Company and its
subsidiaries taken as a whole.
(f) The Company has no "significant subsidiaries" within the meaning of
Rule 1-02 of Regulation S-X promulgated by the Commission.
(g) This Agreement has been duly authorized, executed and delivered by the
Company; the Indenture has been duly authorized and, assuming due authorization,
execution and delivery thereof by the Trustee, when executed and delivered by
the Company, will constitute a legal, valid and binding instrument enforceable
against the Company in accordance with its terms, subject to applicable
bankruptcy, insolvency or similar laws affecting creditors' rights generally and
general principles of equity; and the Registration Rights Agreement has been
duly authorized and, when executed and delivered by the Company, will constitute
the legal, valid, binding and enforceable instrument of the Company, subject to
applicable bankruptcy, insolvency or similar laws affecting creditors' rights
generally and general principles of equity and except as rights to
indemnification and contribution under the Registration Rights Agreement may be
limited under applicable law.
(h) The Securities have been duly authorized and, when executed and
authenticated in accordance with the provisions of the Indenture and delivered
to and paid for by the Initial Purchaser in accordance with the terms of this
Agreement, will be valid and binding obligations of the Company, enforceable in
accordance with their terms, subject to applicable bankruptcy, insolvency or
similar laws affecting creditors' rights generally and general principles of
equity, and will be entitled to the benefits of the Indenture and the
Registration Rights Agreement pursuant to which such Securities are to be
issued. The Indenture creates a valid lien on and first priority perfected
security interest in the Mortgaged Property and, on the Closing Date, will
secure the payment of the Securities in accordance with the terms thereof and,
except as permitted by the Indenture, at the Closing Date, the Mortgaged
Property will be free and clear of all liens, encumbrances, charges, claims and
security interests. On the Closing Date, no filings, recordings or other action
will be required in order to perfect the liens created by the Indenture except
for the filings or recordings which on or before the Closing Date will have been
duly made (or, to the extent acceptable to the Initial Purchaser in its sole
discretion, which will be made promptly after the Closing Date) with respect to
the Mortgaged Property with appropriate state and local filing offices.
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(i) Neither the Company nor any of its subsidiaries is, or with the giving
of notice or lapse of time or both would be, in violation of or in default
under, its Certificate of Incorporation or By-Laws or any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which it or any of them or
any of their respective properties is bound, except for violations and defaults
which individually and in the aggregate are not material to the Company and its
subsidiaries taken as a whole; neither the execution and delivery of the
Indenture, this Agreement or the Registration Rights Agreement, the issue and
sale of the Securities nor the performance by the Company of its obligations
under this Agreement, the Indenture or the Registration Rights Agreement nor the
consummation of the transactions contemplated herein or therein will conflict
with or result in a breach of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement or other
material agreement or instrument to which the Company or any of its subsidiaries
is a party or by which the Company or any of its subsidiaries is bound or to
which any of the property or assets of the Company or any of its subsidiaries is
subject, nor will any such action result in any violation of the provisions of
the Certificate of Incorporation or the By-Laws of the Company or any violation
by the Company of any applicable law or statute or any order, rule or regulation
of any court or governmental agency or body having jurisdiction over the
Company, its subsidiaries or any of their respective properties, except for
conflicts, breaches, defaults and violations which individually and in the
aggregate are not material to the Company and its subsidiaries taken as a whole;
and no consent, approval, authorization, order, registration or qualification of
or with any court or governmental agency or body is required for the issue and
sale of the Securities by the Company or the consummation by the Company of the
transactions contemplated by this Agreement, the Indenture or the Registration
Rights Agreement, except such consents, approvals, authorizations, registrations
or qualifications (i) as will be obtained under the Securities Act and the Trust
Indenture Act, (ii) as may be required under state securities or Blue Sky Laws
in connection with the purchase and distribution of the Securities by the
Initial Purchaser in the manner contemplated herein and in the Final Memorandum
and the Registration Rights Agreement, and (iii) the absence of which
individually and in the aggregate both are not material to the Company and its
subsidiaries taken as a whole and would not have a material adverse effect on
the sale or ownership of the Securities.
(j) Other than as set forth or contemplated in the Final Memorandum, there
are no legal or governmental proceedings pending or,
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to the knowledge of the Company, threatened to which the Company or any of its
subsidiaries is or may be a party or to which any property of the Company or any
of its subsidiaries is or may be the subject which is reasonably likely to have
a material adverse effect on the business, financial position or results of
operations of the Company and its subsidiaries, taken as a whole, or on the
ability of the Company to perform its obligations under this Agreement, the
Indenture, the Registration Rights Agreement or the Securities, and, to the best
of the Company's knowledge, no such proceedings are threatened or contemplated
by governmental authorities or threatened by others; and there are no statutes
or regulations, the effect of which would be required by the Securities Act to
be described in a prospectus relating to a registered offering of Securities, or
contracts or other documents of a character which would be required to be
described in a prospectus relating to a registered offering of Securities, in
each case which is not so described in the Final Memorandum in all material
respects.
(k) Other than as set forth in the Final Memorandum the Company and its
subsidiaries are (i) in compliance with any and all applicable foreign, federal,
state and local laws and regulations relating to the protection of human health
and safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants ("ENVIRONMENTAL LAWS"), (ii) have received all
permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii) are in
compliance with all terms and conditions of any such permit, license or
approval, except where such noncompliance with Environmental Laws described in
clause (i), failure to receive required permits, licenses or other approvals
described in clause (ii) or failure to comply with the terms and conditions of
such permits, licenses or approvals described in clause (iii) would not,
individually or in the aggregate, have a material adverse effect on the Company
and its subsidiaries taken as a whole.
(l) Other than as set forth or contemplated in the Final Memorandum, the
Company has reasonably concluded that the costs and liabilities associated with
the effect of Environmental Laws on the business, operations and properties of
the Company and its subsidiaries (including, without limitation, any capital or
operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws or any permit, license or approval, any
related constraints on operating activities and any potential liabilities to
third parties) would not, individually or in the aggregate, have a material
adverse effect on the Company and its subsidiaries taken as a whole.
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(m) Each of the Company and its subsidiaries has all necessary consents,
authorizations, approvals, orders, certificates and permits of and from, and has
made all declarations and filings with, all federal, state, local and other
governmental authorities, all self-regulatory organizations and all courts and
other tribunals, to own, lease, license and use its properties and assets and to
conduct its business in the manner described in the Final Memorandum except to
the extent that the failure to obtain or file would not have a material adverse
effect on the Company and its subsidiaries taken as a whole.
(n) The Company and its subsidiaries have good title to all items of real
property and personal property owned by them, in each case free and clear of all
liens, encumbrances and defects except such as are referred to in the Final
Memorandum or such as would not individually or in the aggregate have a material
adverse effect on the Company and its subsidiaries taken as a whole; and any
real property and buildings held under lease by the Company and its subsidiaries
are held by them under valid, existing and, subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereinafter in effect
relating to creditors' rights generally and general principles of equity,
enforceable leases with such exceptions as would not individually or in the
aggregate have a material adverse effect on the Company and its subsidiaries
taken as a whole.
(o) No relationship, direct or indirect, exists between or among the
Company or any of its subsidiaries on the one hand, and the directors, officers
and stockholders of the Company or any of its subsidiaries on the other hand,
which would be required by the Securities Act to be described in a Prospectus
relating to a registered Offering of Securities which is not so described in the
Final Memorandum in all material respects.
(p) The Company has not taken nor will it take, directly or indirectly,
any action prohibited by Regulation M under the Exchange Act in connection with
the offering of the Securities.
(q) None of the Company, any of its Affiliates or any person acting on its
or their behalf, has (i) sold, offered for sale, solicited offers to buy or
otherwise negotiated in respect of, any security (as defined in the Securities
Act) that is currently or will be integrated with the sale of the Securities in
a manner that would require the registration of the Securities under the
Securities Act or (ii) engaged in any form of general solicitation
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or general advertising (within the meaning of Regulation D) in connection
with any offer or sale of the Securities in the United States.
(r) The Securities satisfy the eligibility requirements of Rule
144A(d)(3) under the Securities Act.
(s) None of the Company, any of its Affiliates, or 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. Terms used in this paragraph have
the meanings given to them by Regulation S.
(t) The Company is subject to and in full compliance with the
reporting requirements of Section 13 or Section 15(d) of the Exchange Act.
(u) The Company has not paid or agreed to pay to any person any
compensation for soliciting another to purchase any securities of the
Company (except as contemplated by this Agreement).
(v) Except as contemplated by the Registration Rights Agreement, 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.
2 . Purchase and Sale. Subject to the terms and conditions and in reliance
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upon the representations and warranties herein set forth, the Company agrees to
sell to the Initial Purchaser, and the Initial Purchaser agrees to purchase from
the Company, at a purchase price of 102 1/4% of the principal amount thereof
less a discount of 2% of the principal amount thereof,plus an amount equal to
accured interest on the Securities from March 8, 1999 to the date of delivery,
the Securities.
3. Delivery and Payment. Delivery of and payment for the Securities shall
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be made at 10:00 A.M., New York City time, on March 31, 1999, or such later date
(not later than April 2, 1999) as the Initial Purchaser shall designate, which
date and time may be postponed by agreement between the Initial Purchaser and
the Company 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 Initial Purchaser against payment by the
several Initial Purchaser of the purchase price thereof to or upon the order of
the Company by wire transfer payable in same-day funds to a U.S. dollar account
in New York previously
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designated by the Company or such other manner of payment as may be designated
by the Company and agreed to by the Initial Purchaser not less than two
business days prior to the Closing Date. Delivery of the Securities shall be
made at the office of Xxxxx Xxxx & Xxxxxxxx ("COUNSEL FOR THE INITIAL
PURCHASER"), 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx. Delivery of certificates
for the Securities shall be made through the facilities of The Depository Trust
Company unless the Initial Purchaser shall otherwise instruct not less than
three full business days in advance of the Closing Date.
The Company agrees to have the certificates for the Securities available
for inspection by the Initial Purchaser in New York, New York, not later than
1:00 PM on the business day prior to the Closing Date.
4. Offering by Initial Purchasers. The Initial Purchaser (i)
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acknowledges that the Securities have not been registered under the Securities
Act and may not be offered or sold except pursuant to Rule 144A under the
Securities Act, Regulation S or another exemption from the registration
requirements of the Securities Act or pursuant to an effective registration
statement under the Securities Act and (ii) 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 Rights Agreement.
(c) It has (i) 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) 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
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otherwise involving the United Kingdom, and (iii) 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 Securities to a person who is of the kind described
in Article 9(3) of the Financial Services Xxx 0000 (Investment Advertisements)
(Exemptions) Order 1988, as amended, or is a person to whom the document may
otherwise lawfully be issued or passed on.
5. Agreements. The Company agrees with each Initial Purchaser that:
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(a) The Company will furnish to each Initial Purchaser and to Counsel for
the Initial Purchaser, without charge, during the period referred to in
paragraph (c) below, as many copies of the Final Memorandum and any amendments
and supplements thereto as it may reasonably request.
(b) The Company will not amend or supplement the Final Memorandum, other
than by filing documents under the Exchange Act that are incorporated by
reference therein, provided, however, that, prior to the completion of the
distribution of the Securities by the Initial Purchaser (as determined by the
Initial Purchaser), the Company will not file any document under the Exchange
Act that is incorporated by reference in the Final Memorandum unless, prior to
such proposed filing, the Company has furnished the Initial Purchaser with a
copy of such document for its review and has given reasonable consideration to
any comments or objections of the Initial Purchaser prior to the filing of such
document. The Company will promptly advise the Initial Purchaser when any
document filed under the Exchange Act that is incorporated by reference in the
Final Memorandum shall have been filed with the Commission.
(c) If at any time prior to the completion of the sale of the Securities
by the Initial Purchaser, 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 should be necessary to amend or supplement the
Final Memorandum to comply with applicable law, the Company promptly (i) will
notify the Initial Purchaser of any such event; (ii) subject to the
requirements of paragraph (b) of this Section 5, will prepare an amendment or
supplement that will correct such statement or omission or effect such
compliance; and (iii) will supply any supplemented or amended Final Memorandum
to the Initial Purchaser and
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Counsel for the Initial Purchaser without charge in such quantities as you may
reasonably request.
(d) Until such time as the Exchange Offer is complete, the Company will
not, nor will it permit any of its respective Affiliates to, resell any
Securities that constitute "restricted securities" under Rule 144A that have
been acquired by any of them.
(e) Except in accordance with the Registration Rights Agreement, neither
the Company, any of its or respective Affiliates, nor any person acting on its
or their behalf, will, directly or indirectly, make offers or sales of any
security, or solicit offers to buy any security, under circumstances that would
require the registration of the Securities under the Securities Act.
(f) None of the Company, any of its Affiliates, or 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 Rights Agreement.
(g) So long as any of the Securities are "restricted securities" within
the meaning of Rule 144(a)(3) under the Securities Act, the Company will, during
any period in which it is not subject to and in compliance with Section 13 or
15(d) of the Exchange Act, provide to each holder of such restricted securities
and to each prospective purchaser (as designated by such holder) of such
restricted securities, upon the request of such holder or prospective purchaser,
any information required to be provided by Rule 144A(d)(4) under the Securities
Act. 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.
(h) None of the Company, any of its Affiliates, or any person acting on
its or their behalf will engage in any directed selling efforts with respect to
the Securities, except pursuant to a registered public offering, and each of
them will comply with the offering restrictions requirement of Regulation S.
Terms used in this paragraph have the meanings given to them by Regulation S.
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(i) The Company will cooperate with the Initial Purchaser and use its
best efforts to permit the Securities to be eligible for clearance and
settlement through The Depository Trust Company.
(j) The Company will not, until 180 days following the Closing Date,
without the prior written consent of the Initial Purchaser, offer, sell or
contract to sell, grant any other option to purchase 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 (other
than as required under the Registration Rights Agreement). The Company will not
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.
(k) The Company hereby agrees to permit the Securities to be designated
PORTAL eligible securities in accordance with the rules and regulations of the
National Association of Securities Dealers, Inc. relating to trading in The
PORTAL Market.
(l) The Company hereby agrees to apply the net proceeds from the sale of
the Securities as set forth in the Final Memorandum under the heading "Use of
Proceeds".
(m) The Company agrees to pay the costs and expenses relating to the
following matters: (i) the costs and expenses incurred by the Company in the
preparation, printing and distribution of the Indenture and the Registration
Rights Agreement and the issuance of the Securities; (ii) the fees and expenses
of the Trustee; (iii) the preparation, printing or reproduction of the
Preliminary Memorandum and Final Memorandum and each amendment or supplement to
either of them; (iv) the printing (or reproduction) and delivery (including
postage, air freight charges and charges for counting and packaging) of such
copies of the Final Memorandum, and all amendments or supplements to it, as may,
in each case, be reasonably requested for use in connection with the offering
and sale of the Securities; (v) the preparation, printing, authentication,
issuance and delivery of certificates for the Securities, including any stamp or
transfer taxes in connection with the original issuance and sale of the
Securities; (vi) the printing (or reproduction) and delivery of all agreements
or documents printed (or reproduced) and delivered to the Initial Purchaser and
the prospective
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purchasers in connection with the offering of the Securities; (vii) any
registration or qualification of the Securities for offer and sale under
the securities or blue sky laws of the several states (including filing
fees and the reasonable fees and expenses of Counsel for the Initial
Purchaser relating to such registration and qualification); (viii)
admitting the Securities for trading in the PORTAL Market; (ix) the
transportation and other expenses incurred by or on behalf of Company
representatives in connection with presentations to prospective purchasers
of the Securities; (x) the fees and expenses of the Company's accountants
and the fees and expenses of counsel (including local and special counsel)
for the Company; and (xi) all other costs and expenses incurred by the
Company in the performance of its obligations hereunder.
(n) The Company agrees that the Registration Rights Agreement shall
provide that the Company shall offer to exchange the Securities and the
$225 million principal amount of the Company's First Mortgage Bonds, 9 7/8%
Series A due 2009 issued March 8, 1999, for new first mortgage bonds
registered under the Securities Act that will have the same terms as the
Securities and will be treated as a single series under the Indenture with
the same CUSIP number.
6. Conditions to the Obligation of the Initial Purchaser. The obligation
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of the Initial Purchaser to purchase the Securities shall be subject to the
accuracy of the representations and warranties on the part of the Company
contained herein at the Execution Time, and the Closing Date, to the performance
by the Company of its obligations hereunder and to the following additional
conditions:
(a) Skadden, Arps, Slate, Xxxxxxx & Xxxx (Illinois), counsel for the
Company, shall have furnished to the Representatives its written opinion,
dated the Closing Date, in the form of Exhibit B hereto.
In rendering such opinions, such counsel may rely (A) as to matters
involving the application of laws of the State of New York, upon the opinion of
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, (B) as to matters involving the
application of laws other than the laws of the United States and the State of
New York and the General Corporation Law of the State of Delaware, to the extent
such counsel deems proper and to the extent specified in such opinion, if at
all, upon an opinion or opinions (reasonably satisfactory to Counsel for the
Initial Purchaser) of other counsel reasonably acceptable to the Counsel for the
Initial Purchaser, familiar with the applicable laws; and (C) as to matters of
fact, to the extent such counsel deems proper, on certificates of responsible
officers of the Company, accountants and engineers and certificates or other
written statements of officials of jurisdictions having custody of documents
respecting the corporate
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existence or good standing of the Company. For purposes of rendering such
opinions, compliance with financial covenants contained in any indenture,
mortgage, deed of trust, loan agreement or other material agreement or
instrument relating to the Company or any of its subsidiaries shall be deemed to
be a question of fact. With respect to the matters to be covered in subparagraph
(viii) above, counsel may state that (A) they are not passing upon the adequacy
of the derivation or compilation from Company financial statements or financial
records of any financial or statistical data and (B) their opinion and belief is
based upon their participation in the preparation of the Final Memorandum and
any amendment or supplement thereto and review and discussion of the contents
thereof but is without independent check or verification except as specified.
All references in this Section 6 to the Final Memorandum shall be deemed to
include any amendment or supplement thereto at the Closing Date.
(b) Yukevich, Murchetti, Liekar & Xxxxxxxxx special counsel for the
Company, shall have furnished to the Initial Purchaser their written
opinion, dated the Closing Date, in the form of Exhibit C hereto.
In rendering such opinions, such counsel may (A) rely as to matters of
fact, to the extent such counsel deems proper, on certificates of responsible
officers of the Company and certificates or other written statements of
officials of jurisdictions having custody of documents respecting the corporate
existence or good standing of the Company and (B) state that they are not
passing upon the adequacy or accuracy of the derivation or compilation from
Company financial statements or financial records of any financial or
statistical data.
(c) The Initial Purchaser shall have received from Xxxxx Xxxx &
Xxxxxxxx, Counsel for the Initial Purchaser, such opinion or opinions,
dated the Closing Date and addressed to the Initial Purchaser, with respect
to the issuance and sale of the Securities, the Indenture, the Registration
Rights Agreement, the Final Memorandum (as amended or supplemented at the
Closing Date) and other related matters as the Initial Purchaser may
reasonably require, and the Company shall have furnished to such counsel
such documents as they request for the purpose of enabling them to pass
upon such matters.
(d) The Company shall have furnished to the Initial Purchaser a
certificate of the Company, signed by the Chairman of the Board, the
President, Chief Financial Officer or any Vice President and the principal
accounting officer or treasurer of the Company, dated the Closing Date, to
the effect that the signers of such certificate have carefully examined the
14
Final Memorandum, any amendment or supplement to the Final Memorandum and this
Agreement and that:
(i) the representations and warranties of the Company in this
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 has complied with all the agreements and satisfied all
the conditions on its part to be performed or satisfied hereunder at
or prior to the Closing Date; and
(ii) since the date of the most recent financial statements
included in the Final Memorandum (exclusive of any amendment or
supplement thereto), there has been no material adverse change in the
condition (financial or otherwise), prospects, 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 thereto).
(e) At the Execution Time and at the Closing Date, Ernst & Young LLP
shall have furnished to the Initial Purchaser a letter or letters, dated
respectively as of the Execution Time and as of the Closing Date, in form
and substance reasonably satisfactory to the Initial Purchaser.
(f) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Final Memorandum (exclusive of any
amendment or supplement thereto), there shall not have been (i) any change
or decrease specified in the letter or letters referred to in paragraph (e)
of this Section 6, or (ii) any change, or any development involving a
prospective change, in or affecting the condition (financial or otherwise),
prospects, 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 in
the Final Memorandum (exclusive of any amendment or supplement thereto) the
effect of which, in any case referred to in clause (i) or (ii) above, is,
in the sole judgment of the Initial Purchaser, so material and adverse as
to make it impractical to market the Securities as contemplated by the
Final Memorandum (exclusive of any amendment or supplement thereto).
15
(g) Subsequent to the Execution Time, there shall not have been (i)
any decrease in the rating of the Securities or any of the Company's other
debt securities by any "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g) under the Securities
Act) or (ii) any notice given of any intended or potential decrease in any
such rating or that such organization has under surveillance or review
(other than any such notice with positive implications of a possible
upgrading) its rating of the Securities or any of the Company's other debt
securities.
(h) The Securities shall have been designated as PORTAL-eligible
securities in accordance with the rules and regulations of the NASD, and
the Securities shall be eligible for clearance and settlement through The
Depositary Trust Company.
(i) The Company shall have furnished to the Trustee a certified
resolution in accordance with Section 3.03(a) of the Original Indenture.
(j) The Company shall have furnished to the Trustee an officer's
certificate, as to all conditions precedent relating to authentication of
the Securities being satisfied and no defaults existing under the
Indenture, in accordance with Section 3.03(b) and Section 16.01(a) of the
Original Indenture.
(k) The Company shall have requested and caused Douglas, Alexa, Xxxxxx
& Hurley, Sorling, Northrup, Hanna, Cullen and Xxxxxxx, Ltd. and Xxxxx Hill
PLC, special counsel for the Company to furnish the Trustee and the Initial
Purchaser their opinion, dated the Closing Date, to the effect set forth in
Section 3.03(c), Section 3.05(e), Section 3.05(f) and Section 16.01(b) of
the Original Indenture.
(l) The Company shall have furnished to the Trustee the Eleventh
Supplemental Indenture.
(m) The Company shall have furnished to the Trustee an officers'
certificate with respect to the net bondable value of property additions in
accordance with Section 3.05(a) of the Original Indenture.
(n) The Company shall have furnished to the Trustee an engineer's
certificate in accordance with Section 3.05(b) of the Original Indenture.
16
(o) The Company shall have furnished to the Trustee an independent
accountant's certificate in accordance with Section 3.05(d) and Section
16.01(c) of the Original Indenture.
(p) The Company shall have furnished to the Initial Purchaser an
insurance certificate of its independent consultant substantially in the
form delivered annually under Section 4.06 of the Indenture.
(q) At or before the Closing Date, (i) evidence (including without
limitation, the results of lien and title searches) reasonably satisfactory
to the Initial Purchaser of the absence of any liens other than permitted
liens on any of the Mortgaged Property shall have been furnished to the
Initial Purchaser, and (ii) such evidence of the completion of all
recordings and filings of the Indenture, and of the execution, delivery,
recording and or filing of such other documents, as may be necessary or, in
the reasonable opinion of the Initial Purchaser, desirable to create or
perfect the liens created, or purported or intended to be created, by the
Indenture shall have been furnished to the Initial Purchaser.
(r) On or prior to the Closing Date, the Company shall have furnished
to the Initial Purchaser such further certificates and documents as the
Initial Purchaser shall reasonably request.
If any of the conditions specified in this Section 6 shall not have been
fulfilled in all material respects when and as provided in this Agreement, or if
any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Initial Purchaser and Counsel for the Initial Purchaser,
this Agreement and all obligations of the Initial Purchaser hereunder may be
canceled at, or at any time prior to, the Closing Date by the Initial Purchaser.
Notice of such cancellation shall be given to the Company in writing or by
telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 6 will be delivered
at the office of Counsel for the Initial Purchaser, at 000 Xxxxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx, xx the Closing Date.
7. Reimbursement of Expenses. If the sale of the Securities provided for
-------------------------
herein is not consummated because of any condition to the obligations of the
Initial Purchaser set forth in Section 6 hereof is not satisfied, because of any
termination pursuant to Section 10 hereof or because of any refusal, inability
or failure on the part of the Company to perform any agreement herein or comply
with any provision hereof, in each case other than by reason of a default by the
17
Initial Purchaser, the Company will reimburse the Initial Purchaser upon demand
for all reasonable out-of-pocket expenses (including reasonable fees and
disbursements of counsel) that shall have been incurred by it in connection with
the proposed purchase and sale of the Securities.
8. Indemnification and Contribution. (a) The Company agrees to
--------------------------------
indemnify and hold harmless the Initial Purchaser, each director, officer,
employee and agent of the Initial Purchaser and each other person, if any, who
controls the Initial 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 (including, without limitation,
the reasonable legal fees and other reasonable expenses incurred in connection
with any suit, action or proceeding or any claim asserted), to which they or any
of them may become subject under the Securities Act, the Exchange Act or other
Federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Final Memorandum (or in any
supplement or amendment 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 the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made in
the Final Memorandum, or in any amendment thereof or supplement thereto, in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of the Initial Purchaser specifically for inclusion
therein, it being understood that the only such information is that described in
Section 8(b). This indemnity agreement will be in addition to any liability that
the Company may otherwise have.
(b) The Initial Purchaser agrees to indemnify and hold harmless each
of the Company, its directors and officers, and each other person, if any,
who controls the Company 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 to the Initial Purchaser, but only
with reference to written information relating to the Initial Purchaser
furnished to the Company by or on behalf of the Initial Purchaser
specifically for inclusion in the Final Memorandum (or in any amendment
thereof or supplement thereto). This indemnity agreement will be in
18
addition to any liability that the Initial Purchaser may otherwise have.
The Company acknowledges that the statements set forth in the last
paragraph of the cover page, the first paragraph on page 3 and the
penultimate paragraph under the heading "Plan of Distribution" in the Final
Memorandum constitute the only information furnished in writing by or on
behalf of the Initial Purchaser for inclusion in the Final Memorandum (or
in any amendment thereof or supplement thereto).
(c) Promptly after receipt by an indemnified party under this Section
8 of notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party
(i) will not relieve it from liability under paragraph (a) or (b) above
unless and to the extent it did not otherwise learn of such action and such
failure results in the forfeiture by the indemnifying party of substantial
rights and defenses; and (ii) will not, in any event, relieve the
indemnifying party from any obligations to any indemnified party other than
the indemnification obligation provided in paragraph (a) or (b) above. The
indemnifying party shall be entitled to appoint counsel of the indemnifying
party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (in
which case the indemnifying party shall not thereafter be responsible for
the fees and expenses of any separate counsel retained by the indemnified
party or parties except as set forth below); provided, however, that such
counsel shall be reasonably satisfactory to the indemnified party.
Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall
have the right to employ separate counsel (including local counsel), and
the indemnifying party shall bear the reasonable fees, costs and expenses
of such separate counsel if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present such
counsel with a conflict of interest; (ii) the actual or potential
defendants in, or targets of, any such action include both the indemnified
party and the indemnifying party and the indemnified party shall have
reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to
those available to the indemnifying party; (iii) the indemnifying party
shall not have employed counsel 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. It is
19
understood and agreed, however, that the indemnifying party shall not, in
connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the reasonable fees and expenses of more than
one separate counsel for all such indemnified parties (and any local
counsel) and that all such fees and expenses shall be reimbursed as they
are incurred. The indemnifying party shall not be liable for any settlement
of any claim, action, suit or proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment
for the plaintiff, the indemnifying party agrees to indemnify any
indemnified party from and against any loss or liability by reason of such
settlement or judgment except as otherwise provided herein. 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 Initial Purchaser
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 or the Initial Purchaser may be subject in such
proportion as is appropriate to reflect the relative benefits received by
the Company on the one hand or the Initial Purchaser on the other, as
applicable, from the offering of the Securities; provided, however, that in
no case shall the Initial Purchaser be responsible for any amount in excess
of the purchase discount or commission applicable to the Securities
purchased by the Initial Purchaser hereunder. If the allocation provided by
the immediately preceding sentence is unavailable for any reason, the
Company and the Initial Purchaser shall contribute in such proportion as is
appropriate to reflect not only such relative benefits but also the
relative fault of the Company on the one hand or the Initial Purchaser on
the other hand, 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 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 Initial Purchaser
shall be deemed to be equal to the total purchase discounts and
commissions, in each case
20
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 on the one hand, or
the Initial Purchaser on the other, the intent of the parties and their
relative knowledge, information and opportunity to correct or prevent such
untrue statement or omission. The Company and the Initial Purchaser agree
that it would not be just and equitable if contribution were determined by
pro rata allocation or any other method of allocation which does not take
account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (d), no person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. For purposes of this
Section 8, each person who controls the Initial Purchaser within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act and each director, officer, employee and such agent of the Initial
Purchaser shall have the same rights to contribution as the Initial
Purchaser, and each person who controls the Company within the meaning of
either the Securities Act or the Exchange Act and each officer and director
of the Company shall have the same rights to contribution as the Company,
subject in each case to the applicable terms and conditions of this
paragraph (d).
The indemnity and contribution agreements contained in this Section 8 are
in addition to any liability which the indemnifying parties may otherwise have
to the indemnified parties referred to above. The indemnity and contribution
agreements contained in this Section 8 and the representations and warranties of
the Company set forth in this Agreement shall remain operative and in full force
and effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of the Initial Purchaser or any person
controlling the Initial Purchaser or by or on behalf of the Company, its
officers or directors or any other person controlling the Company and (iii)
acceptance of and payment for any of the Securities.
9. Default by the Initial Purchaser. If the Initial Purchaser shall fail
--------------------------------
to purchase and pay for any of the Securities agreed to be purchased by such
Initial Purchaser hereunder and such failure to purchase shall constitute a
default in the performance of its obligations under this Agreement, this
Agreement will terminate without liability to the Company. Nothing contained in
this Agreement shall relieve the Initial Purchaser, if it is defaulting
hereunder, of its liability, if any, to the Company for damages occasioned by
its default hereunder.
21
10. Termination. This Agreement shall be subject to termination in
-----------
absolute discretion of the Initial Purchaser, by notice given to the Company
prior to delivery of and payment for the Securities, if prior to such time (i)
trading in any of the Company's securities shall have been suspended by the
Commission or the New York Stock Exchange or trading in securities generally on
the New York Stock Exchange shall have been suspended or limited or minimum
prices shall have been established on such exchange, (ii) a banking moratorium
shall have been declared either by Federal or New York State authorities or
(iii) there shall have occurred any outbreak or escalation of hostilities,
declaration by the United States of a national emergency or war or other
calamity or crisis the effect of which on financial markets is such as to make
it, in the sole judgment of the Initial Purchaser, impracticable or inadvisable
to proceed with the offering or delivery of the Securities as contemplated by
the Final Memorandum (exclusive of any amendment or supplement thereto).
11. Representations and Indemnities to Survive. The respective
------------------------------------------
agreements, representations, warranties, indemnities and other statements of the
Company, or its officers and of the Initial Purchaser set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation made by or on behalf of the Initial Purchaser, the Company or
any of the officers, directors or controlling persons referred to in Section 8
hereof, and will survive delivery of and payment for the Securities. The
provisions of Sections 7 and 8 hereof shall survive the termination or
cancellation of this Agreement.
12. Notices. All communications hereunder will be in writing and effective
-------
only on receipt, and, if sent to the Initial Purchaser, will be mailed,
delivered or sent by fax and confirmed to Xxxxxxx Xxxxx Xxxxxx Inc., General
Counsel (fax no.: (000) 000-0000) and confirmed to the General Counsel, Xxxxxxx
Xxxxx Barney Inc. at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 Attention:
General Counsel; or, if sent to the Company will be mailed, delivered or faxed
to (000) 000-0000 and confirmed to it at 0000 Xxxxxx Xxxxx Xxxxxxx, Xxxxxxxxx,
Xxxxxxx 00000-0000 attention: General Counsel.
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 no
other person will have any right or obligation hereunder.
14. APPLICABLE LAW. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN
--------------
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED WITHIN THE STATE OF NEW YORK (WITHOUT REGARD TO THE CONFLICT
OF LAW PROVISIONS THEREOF).
22
15. Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which will be deemed to be an original, but all such
counterparts will together constitute one and the same instrument.
16. Headings. The section headings used herein are for convenience only
--------
and shall not affect the construction hereof.
17. Definitions. The terms which follow, when used in this Agreement,
-----------
shall have the meanings indicated.
"Affiliate" shall have the meaning specified in Rule 501(b) of Regulation
D.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
legal holiday or a day on which banking institutions or trust companies are
authorized or obligated by law to close in The City of New York.
"Commission" shall mean the Securities and Exchange Commission.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission promulgated thereunder.
"Investment Company Act" shall mean the Investment Company Act of 1940, as
amended, and the rules and regulations of the Commission promulgated thereunder.
"NASD" shall mean the National Association of Securities Dealers, Inc.
"Regulation D" shall mean Regulation D under the Act.
"Regulation S" shall mean Regulation S under the Act.
"Securities Act" shall mean the Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder.
"Trust Indenture Act" shall mean the Trust Indenture Act of 1939, as
amended, and the rules and regulations of the Commission promulgated thereunder.
23
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us the enclosed duplicate hereof, whereupon this
Agreement and your acceptance shall represent a binding agreement among the
Company and the Initial Purchaser.
Very truly yours,
NATIONAL STEEL CORPORATION
By /s/ Xxxxxxx X. XxXxxxxxx
---------------------------
Name: Xxxxxxx X. XxXxxxxxx
Title: Treasurer
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
XXXXXXX XXXXX XXXXXX INC.
By________________________
Name:
Title:
24
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us the enclosed duplicate hereof, whereupon this
Agreement and your acceptance shall represent a binding agreement among the
Company and the Initial Purchaser.
Very truly yours,
NATIONAL STEEL CORPORATION
By________________________
Name:
Title:
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
XXXXXXX XXXXX BARNEY INC.
By /s/ Xxxxx X. Xxxxxx
-----------------------
Name: Xxxxx X. Xxxxxx
Title: Associate
24
