EXHIBIT 10.3(b)
$200,000,000
Steel Dynamics, Inc.
9-1/2% Senior Notes Due 2009
PLACEMENT AGREEMENT
March 14, 2002
March 14, 2002
Xxxxxx Xxxxxxx & Co. Incorporated
X.X. Xxxxxx Securities Inc.
BMO Xxxxxxx Xxxxx Corp.
NatCity Investments, Inc.
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs and Mesdames:
Steel Dynamics, Inc., an Indiana corporation (the "COMPANY"),
proposes to issue and sell to the several purchasers named in Schedule I hereto
(the "PLACEMENT AGENTS") $200,000,000 principal amount of its 9-1/2% Senior
Notes Due 2009 (the "SECURITIES") to be issued pursuant to the provisions of an
Indenture dated as of March 26, 2002 (the "INDENTURE" between the Company, the
subsidiary of the Company listed on Schedule II hereto (the "GUARANTOR") and
Fifth Third Bank, as Trustee (the "TRUSTEE"). The obligations of the Company
under the Securities and the Indenture will be unconditionally guaranteed on a
senior unsecured basis by the Guarantor pursuant to the terms of the Indenture
(the "GUARANTEE").
The Securities will be offered without being registered under the
Securities Act of 1933, as amended (the "SECURITIES ACT"), to qualified
institutional buyers in compliance with the exemption from registration provided
by Rule 144A under the Securities Act and in offshore transactions in reliance
on Regulation S under the Securities Act ("REGULATION S").
The Placement Agents and their direct and indirect transferees will
be entitled to the benefits of a Registration Rights Agreement dated the date
hereof between the Company, the Guarantor and the Placement Agents (the
"REGISTRATION RIGHTS AGREEMENT").
In connection with the sale of the Securities, the Company has
prepared a preliminary offering memorandum (the "PRELIMINARY MEMORANDUM") and
will prepare a final offering memorandum (the "FINAL MEMORANDUM" and, with the
Preliminary Memorandum, each a "MEMORANDUM") including or incorporating by
reference a description of the terms of the Securities and the Guarantee, the
terms of the offering and a description of the Company and the Guarantor. As
used herein, the term "Memorandum" shall include in each case the documents
incorporated by reference therein. The terms "SUPPLEMENT", "AMENDMENT" and
"AMEND" as used herein with respect to a Memorandum shall include all documents
deemed to be incorporated by reference in the Preliminary Memorandum or Final
Memorandum that are filed subsequent to the date of such Memorandum with the
Securities and Exchange Commission (the "COMMISSION") pursuant to the Securities
Exchange Act of 1934, as amended (the "EXCHANGE ACT").
On or prior to the Closing Date (as defined below), the Company will
enter into a new Credit Agreement (the "Credit Agreement") as described in the
Final Memorandum. The net proceeds from the offering of the Securities and the
Guarantee, together with borrowings under the Credit Agreement, will be used to
permanently repay all amounts outstanding under the Company's existing (i)
$450.0 million amended and restated credit agreement dated as of June 30, 1997,
as amended, by and among the Company, the Lenders parties thereto from time to
time, Mellon Bank, N.A., as Agent for the Lenders thereunder and as Issuing
Bank, Kreditanstalt Fur Wiederaufbau and Comerica Bank, as Senior Co-Agents and
Banque Nationale de Paris, NBD Bank, N.A. and The Industrial Bank of Japan,
Limited, as Co-Agents, (ii) $45.0 million credit agreement dated as of May 5,
2000 by and among the Company, the Lenders parties thereto from time to time and
Mellon Bank, N.A., as Agent for the Lenders thereunder, and terminate such
existing credit agreement and for general working capital purposes.
1. Representations and Warranties. The Company and the Guarantor,
jointly and severally, represent and warrant to, and agree with, you that:
(a) (i) Each document, if any, filed or to be filed pursuant to the
Exchange Act and incorporated by reference in either Memorandum complied
or will comply when so filed in all material respects with the Exchange
Act and the applicable rules and regulations of the Commission thereunder
and (ii) the Preliminary Memorandum does not contain and the Final
Memorandum, in the form used by the Placement Agents to confirm sales and
on the Closing Date (as defined in Section 4), will not contain any 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, except that the representations and
warranties set forth in this paragraph do not apply to statements or
omissions in either Memorandum based upon information relating to any
Placement Agent furnished to the Company in writing by such Placement
Agent through you expressly for use therein.
(b) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property
and to conduct its business as described in each Memorandum and is duly
qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent that
the failure to be so qualified or be in good standing would not have a
material adverse effect on the Company and its subsidiaries, taken as a
whole.
(c) Each subsidiary of the Company has been duly incorporated, is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and authority
to own its property and to conduct its business as described in each
Memorandum and is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to
the extent that the failure to be so qualified or be in good standing
would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole; each subsidiary of the Company and the
percentage of capital stock and voting stock of each such subsidiary owned
by the Company is set forth on Schedule III hereto and all of the issued
shares of capital stock of each subsidiary of the Company have been duly
and validly authorized and issued, are fully paid and non-assessable and
are owned directly by the Company, free and clear of all liens,
encumbrances, equities or claims.
(d) This Agreement has been duly authorized, executed and delivered
by the Company and the Guarantor.
(e) The shares of common stock outstanding on the date hereof have
been duly authorized and are validly issued, fully paid and
non-assessable.
(f) 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 Placement Agents 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.
(g) The Guarantee has been duly authorized by the Guarantor and,
upon execution and delivery of the Indenture by the Guarantor and the
Company, will be a valid and binding obligations of the Guarantor,
enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and general principles of equity.
(h) The Indenture has been duly authorized and, when executed and
delivered by the Company and each Guarantor, will be a valid and binding
agreement of the Company and each Guarantor, enforceable in accordance
with its terms, subject to applicable bankruptcy, insolvency or similar
laws affecting creditors' rights generally and general principles of
equity.
(i) The Registration Rights Agreement has been duly authorized,
executed and delivered by, and is a valid and binding agreement of, the
Company and each Guarantor, enforceable in accordance with
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its terms, 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.
(j) The execution and delivery by the Company and the Guarantor of,
and the performance by the Company and the Guarantor of their respective
obligations under, this Agreement, the Indenture, the Registration Rights
Agreement, the Securities (in the case of the Company), the Guarantee (in
the case of the Guarantor) and the Credit Agreement will not contravene
any provision of applicable law or the articles of incorporation or
by-laws of the Company or the Guarantor or any agreement or other
instrument binding upon the Company or any of its subsidiaries that is
material to the Company and its subsidiaries, taken as a whole, or any
judgment, order or decree of any governmental body, agency or court having
jurisdiction over the Company or any subsidiary, and no consent, approval,
authorization or order of, or qualification with, any governmental body or
agency is required for the performance by the Company or the Guarantor of
their respective obligations under this Agreement, the Indenture, the
Registration Rights Agreement, the Securities (in the case of the
Company), the Guarantee (in the case of the Guarantor) and the Credit
Agreement, except such as may be required by the securities or Blue Sky
laws of the various states in connection with the offer and sale of the
Securities and by Federal and state securities laws with respect to the
Company's and the Guarantor's obligations under the Registration Rights
Agreement.
(k) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from
that set forth in the Final Memorandum (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement).
(l) There are no legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is a party or
to which any of the properties of the Company or any of its subsidiaries
is subject other than proceedings accurately described in all material
respects in each Memorandum and proceedings that would not have a material
adverse effect on the Company and its subsidiaries, taken as a whole, or
on the power or ability of the Company or the Guarantor to perform their
respective obligations under this Agreement, the Indenture, the
Registration Rights Agreement, the Securities (in the case of the
Company), the Guarantee (in the case of the Guarantor) and the Credit
Agreement or to consummate the transactions contemplated by the Final
Memorandum.
(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 such consents, authorizations, approvals, orders,
certificates and permits or make such declarations and filings would not
have a material adverse effect on the Company and its subsidiaries, taken
as a whole. Neither the Company nor any of its subsidiaries has received
any notice of proceedings relating to the revocation or modification of
any such consent, authorization, approval, order, certificate or permit
which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would result in a material adverse change in
the condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, except
as described in or contemplated by the Final Memorandum.
(n) The Company and its subsidiaries (i) are 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, failure to receive required
permits, licenses or other approvals or failure to comply with the terms
and conditions of such permits, licenses or approvals would not, singly or
in the aggregate, have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
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(o) In the ordinary course of business, the Company conducts a
periodic review of the effect of Environmental Laws on the business,
operations and properties of the Company and its subsidiaries, in the
course of which it identifies and evaluates associated costs and
liabilities (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). On the basis of such review, the Company has reasonably
concluded that such associated costs and liabilities would not, singly or
in the aggregate, have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(p) Neither the Company nor the Guarantor, after giving effect to
the offering and sale of the Securities and the application of the
proceeds thereof as described in the Final Memorandum, will be an
"investment company" as such term is defined in the Investment Company Act
of 1940, as amended.
(q) None of the Company, any Guarantor or any affiliate (as defined
in Rule 501(b) of Regulation D under the Securities Act, an "Affiliate")
of the Company or any Guarantor has directly, or through any agent, (i)
sold, offered for sale, solicited offers to buy or otherwise negotiated in
respect of, any security (as defined in the Securities Act) which is or
will be integrated with the sale of the Securities in a manner that would
require the registration under the Securities Act of the Securities or
(ii) engaged in any form of general solicitation or general advertising in
connection with the offering of the Securities, (as those terms are used
in Regulation D under the Securities Act) or in any manner involving a
public offering within the meaning of Section 4(2) of the Securities Act.
(r) None of the Company, any Guarantor, their Affiliates or any
person acting on its or their behalf has engaged or will engage in any
directed selling efforts (within the meaning of Regulation S) with respect
to the Securities and the Company, any Guarantor and their Affiliates and
any person acting on its or their behalf have complied and will comply
with the offering restrictions requirement of Regulation S.
(s) It is not necessary in connection with the offer, sale and
delivery of the Securities to the Placement Agents in the manner
contemplated by this Agreement to register the Securities or the Guarantee
under the Securities Act or to qualify the Indenture under the Trust
Indenture Act of 1939, as amended.
(t) The Securities and the Guarantee satisfy the requirements set
forth in Rule 144A(d)(3) under the Securities Act.
(u) The Securities and the Guarantee conform in all material
respects to the description thereof contained in the Final Memorandum
under the heading "Description of the Notes".
(v) Subsequent to the respective dates as of which information is
given in the Final Memorandum, (1) the Company and its subsidiaries have
not incurred any material liability or obligation, direct or contingent,
nor entered into any material transaction not in the ordinary course of
business; (2) the Company has not purchased any of its outstanding capital
stock, nor declared, paid or otherwise made any dividend or distribution
of any kind on its capital stock; and (3) there has not been any material
change in the capital stock, short-term debt or long-term debt of the
Company and its consolidated subsidiaries, except in each case as
described in or contemplated by the Final Memorandum.
(w) The Company and its subsidiaries have good and marketable title
in fee simple to all real property and good and marketable title to all
personal property owned by them which is material to the business of the
Company and its subsidiaries, in each case free and clear of all liens,
encumbrances and defects except such as are described in the Final
Memorandum or such as do not materially affect the value of such property
and do not interfere with the use made and proposed to be made of such
property by the Company and its subsidiaries: and any real property and
buildings held under lease by the Company and its subsidiaries are held by
them under valid, subsisting and enforceable leases with such exceptions
as are not material and do not interfere with the use made and proposed to
be made of such property and buildings by the Company and its
subsidiaries, in each case except as described in or contemplated by the
Final Memorandum.
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(x) The Company and its subsidiaries own or possess, or can acquire
on reasonable terms, all material patents, patent rights, licenses,
inventions, copyrights, know-how (including trade secrets and other
unattended and/or unpatentable proprietary or confidential information,
systems or procedures), trademarks, service marks and trade names
currently employed by them in connection with the business now operated by
them, and neither the Company nor any of its subsidiaries has received any
notice of infringement of or conflict with asserted rights of others with
respect to any of the foregoing which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would result in any
material adverse change in the condition, financial or otherwise, or in
the earnings, business or operations of the Company and its subsidiaries,
taken as a whole.
(y) No material labor dispute with the employees of the Company or
any of its subsidiaries exists, except as described in or contemplated by
the Final Memorandum, or, to the knowledge of the Company, is imminent;
and the Company is not aware of any existing, threatened or imminent labor
disturbance by the employees of any of its principal suppliers,
manufacturers or contractors that could result in any material adverse
change in the condition, financial or otherwise, or in the earnings,
business or operations of the Company and its subsidiaries, taken as a
whole.
(z) The Company and each of its subsidiaries are insured by insurers
of recognized financial responsibility against such losses and risks and
in such amounts as are prudent and customary in the businesses in which
they are engaged; neither the Company nor any such subsidiary has been
refused any insurance coverage sought or applied for; and neither the
Company nor any such subsidiary has any reason to believe that it will not
be able to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be
necessary to continue its business at a cost that would not materially and
adversely affect the condition, financial or otherwise, or the earnings,
business or operations of the Company and its subsidiaries, taken as a
whole, except as described in or contemplated by the Final Memorandum.
(aa) The Company and each of its subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance
that (1) transactions are executed in accordance with management's general
or specific authorizations; (2) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability; (3)
access to assets is permitted only in accordance with management's general
or specific authorization; and (4) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
2. Agreements to Sell and Purchase. The Company hereby agrees to
sell to the several Placement Agents, and each Placement Agent, upon the basis
of the representations and warranties herein contained, but subject to the
conditions hereinafter stated, agrees, severally and not jointly, to purchase
from the Company the respective principal amount of Securities set forth in
Schedule I hereto opposite its name at a purchase price of 97.875% of the
principal amount thereof (the "PURCHASE PRICE").
The Company and the Guarantor hereby agree that, without the prior
written consent of Xxxxxx Xxxxxxx & Co. Incorporated on behalf of the Placement
Agents, it will not, during the period beginning on the date hereof and
continuing to and including the Closing Date, offer, sell, contract to sell or
otherwise dispose of any debt of the Company or of the Guarantor or warrants to
purchase debt of the Company or of the Guarantor substantially similar to the
Securities (other than the sale of the Securities under this Agreement.)
3. Terms of Offering. You have advised the Company and the Guarantor
that the Placement Agents will make an offering of the Securities purchased by
the Placement Agents hereunder on the terms to be set forth in the Final
Memorandum, as soon as practicable after this Agreement is entered into as in
your judgment is advisable.
4. Payment and Delivery. Payment for the Securities shall be made to
the Company in Federal or other funds immediately available in New York City
against delivery of such Securities for the respective accounts of the several
Placement Agents at 10:00 a.m., New York City time, on March 26, 2002, or at
such other time on the
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same or such other date, not later than April 2, 2002, as shall be designated in
writing by you. The time and date of such payment are hereinafter referred to as
the "CLOSING DATE."
Certificates for the Securities shall be in definitive form or
global form, as specified by you, and registered in such names and in such
denominations as you shall request in writing not later than one full business
day prior to the Closing Date. The certificates evidencing the Securities shall
be delivered to you on the Closing Date for the respective accounts of the
several Placement Agents, with any transfer taxes payable in connection with the
transfer of the Securities to the Placement Agents duly paid, against payment of
the Purchase Price therefor.
5. Conditions to the Placement Agents' Obligations. The several
obligations of the Placement Agents to purchase and pay for the Securities on
the Closing Date are subject to the following conditions:
(a) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date:
(i) there shall not have occurred any downgrading, nor shall
any notice have been given of any intended or potential downgrading
or of any review for a possible change that does not indicate the
direction of the possible change, in the rating accorded the Company
or any of the Company's securities or in the rating outlook for the
Company by any "nationally recognized statistical rating
organization," as such term is defined for purposes of Rule
436(g)(2) under the Securities Act; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or operations
of the Company and its subsidiaries, taken as a whole, from that set
forth in the Final Memorandum (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement) that,
in your judgment, is material and adverse and that makes it, in your
judgment, impracticable to market the Securities on the terms and in
the manner contemplated in the Final Memorandum.
(b) The Placement Agents shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer of
the Company and each Guarantor, to the effect set forth in Section 5(a)(i)
and to the effect that the representations and warranties of the Company
and such Guarantor contained in this Agreement are true and correct as of
the Closing Date and the Company and such Guarantor has complied with all
of the agreements and satisfied all of the conditions on its part to be
performed or satisfied hereunder on or before the Closing Date.
The officer signing and delivering such certificate may rely upon
the best of his or her knowledge as to proceedings threatened.
(c) The Placement Agents shall have received on the Closing Date an
opinion of Xxxxxxx & McNagny, counsel for the Company and the Guarantor,
dated the Closing Date, to the effect set forth in Exhibit A. Such opinion
shall be rendered to the Placement Agents at the request of the Company
and the Guarantor and shall so state therein.
(d) The Placement Agents shall have received on the Closing Date an
opinion of Xxxxxx & Xxxxxxx, New York counsel for the Company and the
Guarantor, dated the Closing Date, to the effect set forth in Exhibit B.
Such opinion shall be rendered to the Placement Agents at the request of
the Company and the Guarantor and shall so state therein.
(e) The Placement Agents shall have received on the Closing Date an
opinion of Shearman & Sterling, counsel for the Placement Agents, dated
the Closing Date, in form and substance satisfactory to you.
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(f) The Placement Agents shall have received on each of the date
hereof and the Closing Date letters, dated the date hereof or the Closing
Date, as the case may be, in form and substance satisfactory to the
Placement Agents, from Ernst & Young LLP and Deloitte & Touche LLP,
independent public accountants, containing statements and information of
the type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain
financial information contained in or incorporated by reference into the
Final Memorandum; provided that the letters delivered on the Closing Date
shall use a "cut-off date" not earlier than the date hereof.
(g) The Credit Agreement shall have been duly authorized, delivered
and executed by the parties thereto, and the refinancing of certain
indebtedness of the Company, as described in the Final Memorandum, shall
be consummated.
(h) The Securities shall have been designated PORTAL securities in
accordance with the rules and regulations adopted by the National
Association of Securities Dealers, Inc. relating to trading in the PORTAL
Market.
(i) The Placement Agents shall have received such other documents
and certificates as are reasonably requested by you or your counsel.
6. Covenants of the Company and Guarantor. In further consideration
of the agreements of the Placement Agents contained in this Agreement, each of
the Company and the Guarantor, jointly and severally covenants with each
Placement Agent as follows:
(a) To furnish to you in New York City, without charge, prior to
10:00 a.m. New York City time on the business day next succeeding the date
of this Agreement and during the period mentioned in Section 6(c), as many
copies of the Final Memorandum, any documents incorporated by reference
therein and any supplements and amendments thereto as you may reasonably
request.
(b) Before amending or supplementing either Memorandum, to furnish
to you a copy of each such proposed amendment or supplement and not to use
any such proposed amendment or supplement to which you reasonably object.
(c) If, during such period after the date hereof and prior to the
date on which all of the Securities shall have been sold by the Placement
Agents, any event shall occur or condition exist as a result of which it
is necessary to amend or supplement the Final Memorandum in order to make
the statements therein, in the light of the circumstances when the Final
Memorandum is delivered to a purchaser, not misleading, or if, in the
opinion of counsel for the Placement Agents, it is necessary to amend or
supplement the Final Memorandum to comply with applicable law, forthwith
to prepare and furnish, at its own expense, to the Placement Agents,
either amendments or supplements to the Final Memorandum so that the
statements in the Final Memorandum as so amended or supplemented will not,
in the light of the circumstances when the Final Memorandum is delivered
to a purchaser, be misleading or so that the Final Memorandum, as amended
or supplemented, will comply with applicable law.
(d) To endeavor to qualify the Securities and the Guarantee for
offer and sale under the securities or Blue Sky laws of such jurisdictions
as you shall reasonably request.
(e) Whether or not the transactions contemplated in this Agreement
are consummated or this Agreement is terminated, to pay or cause to be
paid all expenses incident to the performance of its obligations under
this Agreement, including: (i) the fees, disbursements and expenses of the
Company's and the Guarantor's counsel and the Company's and the
Guarantor's accountants in connection with the issuance and sale of the
Securities and all other fees or expenses in connection with the
preparation of each Memorandum and all amendments and supplements thereto,
including all printing costs associated therewith, and the delivering of
copies thereof to the Placement Agents, in the quantities herein above
specified, (ii) all costs and expenses related to the transfer and
delivery of the Securities to the Placement Agents, including any transfer
or other taxes payable thereon, (iii) the cost of printing or producing
any
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Blue Sky or legal investment memorandum in connection with the offer and
sale of the Securities under state securities laws and all expenses in
connection with the qualification of the Securities for offer and sale
under state securities laws as provided in Section 6(d) hereof, including
filing fees and the reasonable fees and disbursements of counsel for the
Placement Agents in connection with such qualification and in connection
with the Blue Sky or legal investment memorandum, (iv) any fees charged by
rating agencies for the rating of the Securities, (v) all document
production charges and expenses of counsel to the Placement Agents (but
not including their fees for professional services) in connection with the
preparation of this Agreement, (vi) the fees and expenses, if any,
incurred in connection with the admission of the Securities for trading in
PORTAL or any appropriate market system, (vii) the costs and charges of
the Trustee and any transfer agent, registrar or depositary, (viii) the
cost of the preparation, issuance and delivery of the Securities, (ix) the
costs and expenses of the Company relating to investor presentations on
any "road show" undertaken in connection with the marketing of the
offering of the Securities, including, without limitation, expenses
associated with the production of road show slides and graphics, fees and
expenses of any consultants engaged in connection with the road show
presentations with the prior approval of the Company, travel and lodging
expenses of the representatives and officers of the Company, the Guarantor
and any such consultants, and the cost of any aircraft chartered in
connection with the road show, and (x) all other costs and expenses
incident to the performance of the obligations of the Company and the
Guarantor hereunder for which provision is not otherwise made in this
Section. It is understood, however, that except as provided in this
Section, Section 8, and the last paragraph of Section 10, the Placement
Agents will pay all of their costs and expenses, including fees and
disbursements of their counsel, transfer taxes payable on resale of any of
the Securities by them and any advertising expenses connected with any
offers they may make.
(f) None of the Company, the Guarantor or their Affiliates will
sell, offer for sale or solicit offers to buy or otherwise negotiate in
respect of any security (as defined in the Securities Act) which could be
integrated with the sale of the Securities in a manner which would require
the registration under the Securities Act of the Securities or the
Guarantee.
(g) Not to solicit any offer to buy or offer or sell the Securities
by means of any form of general solicitation or general advertising (as
those terms are used in Regulation D under the Securities Act) or in any
manner involving a public offering within the meaning of Section 4(2) of
the Securities Act.
(h) While any of the Securities remain "restricted securities"
within the meaning of the Securities Act, to make available, upon request,
to any seller of the Securities the information specified in Rule
144A(d)(4) under the Securities Act, unless the Company is then subject to
Section 13 or 15(d) of the Exchange Act.
(i) To use its best efforts to permit the Securities to be
designated PORTAL securities in accordance with the rules and regulations
adopted by the National Association of Securities Dealers, Inc. relating
to trading in the PORTAL Market.
(j) None of the Company, the Guarantor or their Affiliates or any
person acting on their behalf (other than the Placement Agents) will
engage in any directed selling efforts (as that term is defined in
Regulation S) with respect to the Securities, and the Company, the
Guarantor and their Affiliates and each person acting on their behalf
(other than the Placement Agents) will comply with the offering
restrictions requirement of Regulation S.
(k) During the period of two years after the Closing Date, the
Company and the Guarantor will not, and will not permit any of their
affiliates (as defined in Rule 144 under the Securities Act) to resell any
of the Securities which constitute "restricted securities" under Rule 144
that have been reacquired by any of them.
7. Offering of Securities; Restrictions on Transfer. (a) Each
Placement Agent, severally and not jointly, represents and warrants that such
Placement Agent is a qualified institutional buyer as defined in Rule 144A under
the Securities Act (a "QIB"). Each Placement Agent, severally and not jointly,
agrees with the Company and
8
the Guarantor that (i) it will not solicit offers for, or offer or sell, such
Securities by any form of general solicitation or general advertising (as those
terms are used in Regulation D under the Securities Act) or in any manner
involving a public offering within the meaning of Section 4(2) of the Securities
Act and (ii) it will solicit offers for such Securities only from, and will
offer such Securities only to, persons that it reasonably believes to be (A) in
the case of offers inside the United States, QIBs and (B) in the case of offers
outside the United States, to persons other than U.S. persons ("FOREIGN
PURCHASERS," which term shall include dealers or other professional fiduciaries
in the United States acting on a discretionary basis for foreign beneficial
owners (other than an estate or trust)) in reliance upon Regulation S under the
Securities Act that, in each case, in purchasing such Securities are deemed to
have represented and agreed as provided in the Final Memorandum under the
caption "Transfer Restrictions".
(b) Each Placement Agent, severally and not jointly, represents,
warrants, and agrees with respect to offers and sales outside the United States
that:
(ii) such Placement Agent understands that no action has been
or will be taken in any jurisdiction by the Company or the Guarantor
that would permit a public offering of the Securities, or possession
or distribution of either Memorandum or any other offering or
publicity material relating to the Securities, in any country or
jurisdiction where action for that purpose is required;
(iii) such Placement Agent will comply with all applicable
laws and regulations in each jurisdiction in which it acquires,
offers, sells or delivers Securities or has in its possession or
distributes either Memorandum or any such other material, in all
cases at its own expense;
(iv) neither the Securities nor the Guarantee have been
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 Rule 144A or Regulation S
under the Securities Act or pursuant to another exemption from the
registration requirements of the Securities Act;
(v) such Placement Agent has offered the Securities and the
Guarantee and will offer and sell the Securities and Guarantee (A)
as part of their distribution at any time and (B) 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 or as
otherwise permitted in Section 7(a); accordingly, neither such
Placement Agent, its Affiliates nor any persons acting on its or
their behalf have engaged or will engage in any directed selling
efforts (within the meaning of Regulation S) with respect to the
Securities and the Guarantee, and any such Placement Agent, its
Affiliates and any such persons have complied and will comply with
the offering restrictions requirement of Regulation S;
(vi) such Placement Agent has (A) not offered or sold and,
prior to the date six months after the Closing Date, will not offer
or sell the Securities or the Guarantee to persons in the United
Kingdom except to persons whose ordinary activities involve them in
acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of their businesses or
otherwise in circumstances which have not resulted and will not
result in an offer to the public in the United Kingdom within the
meaning of the Public Offers of Securities Regulations 1995; (B)
complied and will comply with all applicable provisions of the
Financial Services Xxx 0000 with respect to anything done by it in
relation to the Securities or the Guarantee in, from or otherwise
involving the United Kingdom, and (C) 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 11(3) of the Financial
Services Xxx 0000 (Investment Advertisements) (Exemptions) Order
1996 or is a person to whom such document may otherwise lawfully be
issued or passed on; and
(vii) such Placement Agent agrees that, at or prior to
confirmation of sales of the Securities and the Guarantee, it will
have sent to each distributor, dealer or person receiving a selling
concession, fee or other remuneration that purchases the Securities
and the Guarantee from it during the restricted period a
confirmation or notice to substantially the following effect:
9
"The Securities and Guarantee covered hereby have not been
registered under the U.S. Securities Act of 1933 (the "Securities Act")
and may not be offered and 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 the closing date, except in either case
in accordance with Regulation S (or Rule 144A if available) under the
Securities Act. Terms used above have the meaning given to them by
Regulation S."
Terms used in this Section 7(b) have the meanings given to
them by Regulation S.
8. Indemnity and Contribution. (a) Each of the Company and the
Guarantor agrees, jointly and severally, to indemnify and hold harmless each
Placement Agent, each person, if any, who controls any Placement Agent within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act and each affiliate of any Placement Agent within the meaning of
Rule 405 under the Securities Act from and against any and all losses, claims,
damages and liabilities (including, without limitation, any legal or other
expenses reasonably incurred in connection with defending or investigating any
such action or claim) caused by any untrue statement or alleged untrue statement
of a material fact contained in either Memorandum (as amended or supplemented if
the Company or the Guarantor shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact necessary to make the statements therein in the light of the
circumstances under which they were made not misleading, except insofar as such
losses, claims, damages or liabilities are caused by any such untrue statement
or omission or alleged untrue statement or omission based upon information
relating to any Placement Agent furnished to the Company and the Guarantor in
writing by such Placement Agent through you expressly for use therein.
(b) Each Placement Agent agrees, severally and not jointly, to
indemnify and hold harmless the Company, the Guarantor, their directors and
officers and each person, if any, who controls the Company or the Guarantor
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act to the same extent as the foregoing indemnity from the Company
and the Guarantor to such Placement Agent, but only with reference to
information relating to such Placement Agent furnished to the Company and the
Guarantor in writing by such Placement Agent through you expressly for use in
either Memorandum or any amendments or supplements thereto.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to Section 8(a) or 8(b), such person (the
"INDEMNIFIED PARTY") shall promptly notify the person against whom such
indemnity may be sought (the "INDEMNIFYING PARTY") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such indemnified parties and that all such fees
and expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by Xxxxxx Xxxxxxx & Co. Incorporated, in the case of
parties indemnified pursuant to Section 8(a), and by the Company, in the case of
parties indemnified pursuant to Section 8(b). The indemnifying party shall not
be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second and third
sentences of this paragraph, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 30 days after receipt by such
indemnifying party of
10
the aforesaid request and (ii) such indemnifying party shall not have reimbursed
the indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
(d) To the extent the indemnification provided for in Section 8(a)
or 8(b) is unavailable to an indemnified party or insufficient in respect of any
losses, claims, damages or liabilities referred to therein, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Guarantor, on the one hand, and the
Placement Agents, on the other hand, from the offering of the Securities or (ii)
if the allocation provided by clause 8(d)(i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause 8(d)(i) above but also the relative
fault of the Company and the Guarantor, on the one hand, and of the Placement
Agents, on the other hand, in connection with the statements or omissions that
resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The relative benefits received by the Company
and the Guarantor, on the one hand, and the Placement Agents, on the other hand,
in connection with the offering of the Securities and the Guarantee shall be
deemed to be in the same respective proportions as the net proceeds from the
offering of the Securities and the Guarantee (before deducting expenses)
received by the Company and the total discounts and commissions received by the
Placement Agents in respect thereof, bear to the aggregate offering price of the
Securities and the Guarantee. The relative fault of the Company and the
Guarantor, on the one hand, and of the Placement Agents, on the other hand,
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company and the
Guarantor or by the Placement Agents and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Placement Agents' respective obligations to
contribute pursuant to this Section 8 are several in proportion to the
respective principal amount of Securities and Guarantee they have purchased
hereunder, and not joint.
(e) The Company, the Guarantor and the Placement Agents agree that
it would not be just or equitable if contribution pursuant to this Section 8
were determined by pro rata allocation (even if the Placement Agents were
treated as one entity for such purpose) or by any other method of allocation
that does not take account of the equitable considerations referred to in
Section 8(d). The amount paid or payable by an indemnified party as a result of
the losses, claims, damages and liabilities referred to in Section 8(d) shall be
deemed to include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 8, no Placement Agent shall be required to contribute
any amount in excess of the amount by which the total price at which the
Securities resold by it in the initial placement of such Securities and
Guarantee were offered to investors exceeds the amount of any damages that such
Placement Agent has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The remedies provided for in this
Section 8 are not exclusive and shall not limit any rights or remedies which may
otherwise be available to any indemnified party at law or in equity.
(f) The indemnity and contribution provisions contained in this
Section 8 and the representations, warranties and other statements of the
Company and the Guarantor contained 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 any Placement Agent, any person
controlling any Placement Agent or any affiliate of any Placement Agent or by or
on behalf of the Company, the Guarantor, their officers or directors or any
person controlling the Company or the Guarantor and (iii) acceptance of and
payment for any of the Securities and the Guarantee.
9. Termination. The Placement Agents may terminate this Agreement by
notice given by you to the Company, if after the execution and delivery of this
Agreement and prior to the Closing Date (i) trading generally shall have been
suspended or materially limited on, or by, as the case may be, any of the New
York Stock
11
Exchange, the American Stock Exchange, the Nasdaq National Market, the Chicago
Board of Options Exchange, the Chicago Mercantile Exchange or the Chicago Board
of Trade, (ii) trading of any securities of the Company shall have been
suspended on any exchange or in any over-the-counter market, (iii) a material
disruption in securities settlement, payment or clearance services in the United
shall have occurred, (iv) any moratorium on commercial banking activities shall
have been declared by Federal or New York State authorities or (v) there shall
have occurred any outbreak or escalation of hostilities, or any change in
financial markets or any calamity or crisis that, in your judgment, is material
and adverse and which, singly or together with any other event specified in this
clause (v), makes it, in your judgment, impracticable or inadvisable to proceed
with the offer, sale or delivery of the Securities on the terms and in the
manner contemplated in the Final Memorandum.
10. Effectiveness; Defaulting Placement Agents. This Agreement shall
become effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date, any one or more of the Placement Agents
shall fail or refuse to purchase Securities that it or they have agreed to
purchase hereunder on such date, and the aggregate principal amount of
Securities which such defaulting Placement Agent or Placement Agents agreed but
failed or refused to purchase is not more than one-tenth of the aggregate
principal amount of Securities to be purchased on such date, the other Placement
Agents shall be obligated severally in the proportions that the principal amount
of Securities set forth opposite their respective names in Schedule I bears to
the aggregate principal amount of Securities set forth opposite the names of all
such non-defaulting Placement Agents, or in such other proportions as you may
specify, to purchase the Securities which such defaulting Placement Agent or
Placement Agents agreed but failed or refused to purchase on such date; provided
that in no event shall the principal amount of Securities that any Placement
Agent has agreed to purchase pursuant to this Agreement be increased pursuant to
this Section 10 by an amount in excess of one-ninth of such principal amount of
Securities without the written consent of such Placement Agent. If, on the
Closing Date any Placement Agent or Placement Agents shall fail or refuse to
purchase Securities which it or they have agreed to purchase hereunder on such
date and the aggregate principal amount of Securities with respect to which such
default occurs is more than one-tenth of the aggregate principal amount of
Securities to be purchased on such date, and arrangements satisfactory to you
and the Company for the purchase of such Securities are not made within 36 hours
after such default, this Agreement shall terminate without liability on the part
of any non-defaulting Placement Agent or of the Company or of the Guarantor. In
any such case either you or the Company shall have the right to postpone the
Closing Date, but in no event for longer than seven days, in order that the
required changes, if any, in the Final Memorandum or in any other documents or
arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting Placement Agent from liability in respect of any default
of such Placement Agent under this Agreement.
If this Agreement shall be terminated by the Placement Agents, or
any of them, because of any failure or refusal on the part of the Company or the
Guarantor to comply with the terms or to fulfill any of the conditions of this
Agreement, or if for any reason the Company shall be unable to perform its
obligations under this Agreement, the Company will reimburse the Placement
Agents or such Placement Agents as have so terminated this Agreement with
respect to themselves, severally, for all out-of-pocket expenses (including the
fees and disbursements of their counsel) reasonably incurred by such Placement
Agents in connection with this Agreement or the offering contemplated hereunder.
11. Notices. All notices and other communications under this
Agreement shall be in writing and mailed, delivered or sent by facsimile
transmission to: if sent to the Placement Agents, Xxxxxx Xxxxxxx & Co.
Incorporated, 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, attention: High Yield New
Issues Group, facsimile number (000) 000-0000 and if sent to the Company or to
the Guarantor, to Steel Dynamics, Inc., 0000 Xxxxxx Xxxxxxxxx Xxx, Xxxxx 000,
Xxxx Xxxxx, Xxxxxxx 00000, attention: Xxxxx Xxxxxxxxxxxx, facsimile number (219)
969-3555.
12. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
13. Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
12
14. Headings. The headings of the sections of this Agreement have
been inserted for convenience of reference only and shall not be deemed a part
of this Agreement
13
Very truly yours,
STEEL DYNAMICS, INC.
By: /s/ Xxxxx X. Xxxxxxxxxxxx
Name: Xxxxx X. Xxxxxxxxxxxx
Title: VP
SDI INVESTMENT COMPANY
By: /s/ Xxxxx X. Xxxxxxxxxxxx
Name: Xxxxx X. Xxxxxxxxxxxx
Title: President
Accepted as of the date hereof
XXXXXX XXXXXXX & CO. INCORPORATED
X.X. XXXXXX SECURITIES INC.
BMO XXXXXXX XXXXX CORP.
NATCITY INVESTMENTS, INC.
By: Xxxxxx Xxxxxxx & Co. Incorporated
By: /s/ Xxxxx X. Sun
Name: Xxxxx X. Sun
Title: Executive Director
SCHEDULE I
Placement Agents
PRINCIPAL AMOUNT OF SECURITIES TO
PLACEMENT AGENT BE PURCHASED
Xxxxxx Xxxxxxx & Co. Incorporated......................... $148,000,000
X.X. Xxxxxx Securities Inc. .............................. $40,000,000
BMO Xxxxxxx Xxxxx Corp.................................... $6,000,000
NatCity Investments, Inc.................................. $6,000,000
Total: .................................................. $200,000,000
SCHEDULE II
Guarantor
SDI Investment Company
SCHEDULE III
Subsidiaries
PERCENT OF CAPITAL PERCENT OF VOTING
STOCK/EQUITY UNITS OWNED BY STOCK/VOTING UNITS OWNED BY
NAME STEEL DYNAMICS, INC. STEEL DYNAMICS, INC.
---- -------------------- --------------------
Iron Dynamics, Inc. 100% 100%
New Millennium Building Systems, LLC 46.5% 50%
Omni Dynamic Aviation, LLC 50% 50%
Paragon Steel Enterprises, LLC 50% 50%
SDI Investment Company 100% 100%
EXHIBIT A
OPINION OF COUNSEL FOR THE COMPANY AND THE GUARANTOR
Attach draft opinion of the counsel for the Company and the
Guarantor to be delivered pursuant to Section 5(c) of the Placement Agreement to
the effect that:
A. The Company has been duly incorporated, is validly existing
as a corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property and to
conduct its business as described in the Final Memorandum and is duly qualified
to transact business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be in
good standing would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
B. Each subsidiary of the Company has been duly incorporated
or organized, is validly existing as a corporation or as a limited liability
company in good standing under the laws of the jurisdiction of its incorporation
or organization, has the corporate power and authority to own its property and
to conduct its business as described in the Final Memorandum and is duly
qualified to transact business and is in good standing in each jurisdiction in
which the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole; all of the issued shares of
capital stock, and all membership units or interests, of each subsidiary of the
Company have been duly and validly authorized and issued, are fully paid and
non-assessable, and are owned directly by the Company, free and clear of all
liens, encumbrances, equities or claims.
C. The Placement Agreement has been duly authorized, executed
and delivered by the Company and the Guarantor.
D. All shares of common stock of the Company and its
subsidiaries outstanding on the Closing Date have been duly authorized and are
validly issued, fully paid and non-assessable.
E. The Securities have been duly authorized, executed and
delivered by the Company.
F. The Guarantee has been duly authorized, executed and
delivered by the Guarantor.
G. The Indenture has been duly authorized, executed and
delivered by the Company and the Guarantor.
H. The Registration Rights Agreement has been duly authorized,
executed and delivered by the Company and the Guarantor.
I. The Credit Agreement has been duly authorized, executed and
delivered by the Company and each guarantor named therein.
J. The execution and delivery by the Company and the Guarantor
of, and the performance by the Company and the Guarantor of their respective
obligations under, the Placement Agreement, the Indenture, the Registration
Rights Agreement, the Securities (in the case of the Company), the Guarantee (in
the case of the Guarantor) and the Credit Agreement will not contravene any
provision of applicable law or the articles of incorporation or by-laws of the
Company or the Guarantor or, to the best of such counsel's knowledge, any
agreement or other instrument binding upon the Company or any of its
subsidiaries that is material to the Company and its subsidiaries, taken as a
whole, or, to the best of such counsel's knowledge, any judgment, order or
decree of any governmental body, agency or court having jurisdiction over the
Company or any subsidiary, and no consent, approval, authorization or order of,
or qualification with, any governmental body or agency is required for the
performance by the Company or the Guarantor of their respective obligations
under the Placement Agreement, the
Indenture, the Registration Rights Agreement, the Securities (the Company), the
Guarantee (the Guarantor) and the Credit Agreement, except such as may be
required by the securities or Blue Sky laws of the various states in connection
with the offer and sale of the Securities and by Federal and state securities
laws with respect to the Company's and the Guarantor's obligations under the
Registration Rights Agreement.
K. After due inquiry, such counsel does not know of any legal
or governmental proceedings pending or threatened to which the Company or any of
its subsidiaries is a party or to which any of the properties of the Company or
any of its subsidiaries is subject other than proceedings fairly summarized in
all material respects in the Final Memorandum and proceedings which such counsel
believes are not likely to have a material adverse effect on the Company and its
subsidiaries, taken as a whole, or on the power or ability of the Company and
the Guarantor to perform their respective obligations under the Placement
Agreement, the Indenture, the Registration Rights Agreement, the Securities (in
the case of the Company), the Guarantee (in the case of the Guarantor) and the
Credit Agreement or to consummate the transactions contemplated by the Final
Memorandum.
L. After due inquiry, to the best of our knowledge, the
Company and its subsidiaries (i) are 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, failure to
receive required permits, licenses or other approvals or failure to comply with
the terms and conditions of such permits, licenses or approvals would not,
singly or in the aggregate, have a material adverse effect on the Company and
its subsidiaries, taken as a whole.
M. Each of the Company and the Guarantor are not, and after
giving effect to the offering and sale of the Securities and the application of
the proceeds thereof as described in the Final Memorandum, will not be an
"investment company" as such term is defined in the Investment Company Act of
1940, as amended.
N. The statements related to legal matters, documents or
proceedings included in the Final Memorandum under the captions "Risk Factors --
We face litigation risks in connection with our terminated Thailand advisory
transaction," "Risk Factors -- Environmental regulation imposes substantial
costs and limitations on our operations," "Business -- Environmental Matters,"
"Business -- Legal Proceedings," "Related Party Transactions," "Description of
the Notes," "Description of Certain Indebtedness," "Certain ERISA
Considerations," "Private Placement," and "Transfer Restrictions," in each case
fairly summarize in all material respects such matters, documents or
proceedings.
O. The statements in the Final Memorandum under the caption
"United States Federal Income Tax Considerations," insofar as such statements
constitute a summary of the United States federal tax laws referred to therein,
are accurate and fairly summarize in all material respects the United States
federal tax laws referred to therein.
P. Such counsel (i) is of the opinion that each document
incorporated by reference in the Final Memorandum (except for financial
statements and schedules and other financial and statistical data included
therein as to which such counsel need not express any opinion), complied as to
form when filed with the Commission in all material respects with the Exchange
Act and the rules and regulations of the Commission thereunder and (ii) has no
reason to believe that (except for financial statements and schedules and other
financial and statistical data as to which such counsel need not express any
belief) the Final Memorandum when issued contained, or as of the date such
opinion is delivered contains, any untrue statement of a material fact or
omitted 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.
Q. Based upon the representations, warranties and agreements
of the Company in the Placement Agreement and of the Placement Agents in the
Placement Agreement, it is not necessary in connection with the offer, sale and
delivery of the Securities to the Placement Agents under the Placement Agreement
or in connection with the initial resale of such Securities by the Placement
Agents in accordance with the Placement Agreement to register the Securities
under the Securities Act of 1933, as amended, or to qualify the Indenture under
the Trust Indenture Act of 1939, it being understood that no opinion is
expressed as to any subsequent resale of any Security.
R. Each of the Company and its subsidiaries has all necessary
certificates, orders, permits, licenses, authorizations, consents and approvals
of and from, and has made all declarations and filings with, all federal, state
and local governmental authorities, all self-regulatory organizations and all
courts and tribunals, to own, lease, license and use its properties and assets
and to conduct its business in the manner described in the Final Memorandum, and
neither the Company nor any of its subsidiaries has received any notice of
proceedings relating to revocation or modification of any such certificates,
orders, permits, licenses, authorizations, consents or approvals, nor is the
Company or any of its subsidiaries in violation of, or in default under, any
federal, state or local law, regulation, rule, decree, order or judgment
applicable to the Company or any of its subsidiaries the effect of which, singly
or in the aggregate, would have a material adverse effect on the prospects,
condition, financial or otherwise, or in the earnings, business or operations of
the Company and its subsidiaries, taken as a whole, except as described in the
Final Memorandum.
With respect to paragraph P above, counsel may state that his
or her opinion and belief are based upon his or her participation in the
preparation of the Final Memorandum (and any amendments or supplements thereto),
and review and discussion of the contents thereof and review of the documents
incorporated by reference therein, but are without independent check or
verification except with respect to paragraphs N and O.
EXHIBIT B
OPINION OF NEW YORK COUNSEL FOR THE COMPANY AND THE GUARANTOR
Attach draft opinion of the New York counsel for the Company
and the Guarantor to be delivered pursuant to Section 5(d) of the Placement
Agreement to the effect that:
A. Assuming the Securities have been duly authorized, executed
and delivered by the parties thereto, the Securities are 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.
B. Assuming the Guarantee has been duly authorized, executed
and delivered by the parties thereto, the Guarantee is a valid and binding
agreement of the Guarantor enforceable against the Guarantor in accordance with
its 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.
C. Assuming the Indenture has been duly authorized, executed
and delivered by the parties thereto, the Indenture is a valid and binding
agreement of the Company and the Guarantor, enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency or similar laws affecting
creditors' rights generally and general principles of equity.
D. Assuming the Registration Rights Agreement has been duly
authorized, executed and delivered by the parties thereto, the Registration
Rights Agreement is a valid and binding agreement of the Company and the
Guarantor, enforceable in accordance with its terms, 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.
E. Assuming the Credit Agreement has been duly authorized,
executed and delivered by the parties thereto, the Credit Agreement is a valid
and binding agreement of the Company and the Guarantor, enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency or
similar laws affecting creditors' rights generally and general principles of
equity.
