EXHIBIT 3.1
GERDAU AMERISTEEL CORPORATION
(incorporated under the Business Corporations Act (Ontario)
35,000,000 Common Shares
PURCHASE AGREEMENT
Dated: October 14, 2004
TABLE OF CONTENTS
PURCHASE AGREEMENT................................................................................................1
SECTION 1. Representations and Warranties.......................................................4
(a) Representations and Warranties by the Company...................................................4
(i) Compliance with Registration Requirements............................................4
(ii) Incorporated Documents...............................................................5
(iii) Independent Accountants..............................................................6
(iv) Company Financial Statements.........................................................6
(v) North Star Financial Statements......................................................7
(vi) North Star Acquisition...............................................................7
(vii) No Material Adverse Change in Business...............................................7
(viii) Good Standing of the Company.........................................................7
(ix) Capitalization.......................................................................8
(x) Authorization of Agreements..........................................................8
(xi) Authorization and Description of Securities..........................................9
(xii) Absence of Defaults and Conflicts....................................................9
(xiii) Absence of Labor Dispute............................................................10
(xiv) Absence of Proceedings..............................................................10
(xv) Possession of Intellectual Property.................................................10
(xvi) Absence of Further Requirements.....................................................10
(xvii) Possession of Licenses and Permits..................................................11
(xviii) Title to Property...................................................................11
(xix) Investment Company Act..............................................................11
(xx) Environmental Laws..................................................................12
(xxi) Benefit Plan Compliance.............................................................12
(xxii) No Stabilization or Manipulation....................................................13
(xxiii) Registration Rights.................................................................13
(xxiv) Other Reports and Information.......................................................13
(xxv) Taxes...............................................................................13
(xxvi) Insurance...........................................................................14
(xxvii) Compliance with Laws................................................................14
(xxviii) No Broker...........................................................................14
(xxix) Principal Shareholders..............................................................14
(xxx) Non-Arm's Length Transactions.......................................................14
(xxxi) Stamp Tax...........................................................................14
(xxxii) French Language Documents...........................................................14
(xxxiii) No Unlawful Payments................................................................15
(xxxiv) Disclosure Controls.................................................................15
(xxxv) Accounting Controls.................................................................15
(xxxvi) Xxxxxxxx-Xxxxx Act of 2002..........................................................15
(xxxvii) Foreign Status......................................................................15
(b) Officers' Certificate..........................................................................15
SECTION 2. Sale and Delivery to Underwriters; Closing..........................................15
i
(a) Initial Securities.............................................................................16
(b) Option Securities..............................................................................16
(c) Payment........................................................................................16
(d) Denominations; Registration....................................................................17
(e) Sub-underwriter Notification...................................................................17
SECTION 3. Covenants of the Company............................................................17
(a) Compliance with Securities Regulations and Commission Requests.................................17
(b) Filing of Amendments...........................................................................18
(c) Delivery of Filed Documents....................................................................18
(d) Delivery of Prospectuses.......................................................................18
(e) Continued Compliance with Securities Laws......................................................18
(f) Blue Sky Qualifications........................................................................19
(g) Rule 158.......................................................................................19
(h) Use of Proceeds................................................................................19
(i) Restriction on Sale of Securities..............................................................19
(j) Listing........................................................................................20
(k) Reporting Requirements.........................................................................20
(l) PREP Procedures................................................................................20
(m) Translation Opinions...........................................................................20
(n) Translation Opinions -- Financial Statements...................................................21
(o) Lock-Up Agreements.............................................................................21
(p) Dividends......................................................................................21
SECTION 4. Payment of Expenses.................................................................21
(a) Expenses.......................................................................................21
(b) Termination of Agreement.......................................................................22
SECTION 5. Conditions of Underwriters' Obligations.............................................22
(a) Effectiveness of Registration Statement........................................................22
(b) Opinion of United States and Canadian Counsel for Company......................................22
(c) Opinion of Acquisition Counsel for Company.....................................................22
(d) Opinion of Canadian Counsel for Underwriters and the Sub-underwriter...........................23
(e) Opinion of U.S. Counsel for Underwriters and the Sub-underwriter...............................23
(f) Officers' Certificate..........................................................................23
(g) Accountant's Comfort Letters...................................................................23
(h) Bring-down Comfort Letters.....................................................................24
(i) No Objection...................................................................................24
(j) Lock-up Agreements.............................................................................24
(k) Approval of Listing............................................................................24
(l) Xxxxxx X.X. Subscription.......................................................................24
(m) Conditions to Purchase of Option Securities....................................................24
(i) Opinion of United States and Canadian Counsel for Company...........................24
(ii) Opinion of Acquisition Counsel for Company..........................................25
(iii) Opinion of Canadian Counsel for Underwriters and
the Sub-underwriter.................................................25
(iv) Opinion of U.S. Counsel for Underwriters and the Sub-underwriter....................25
(v) Officers' Certificate...............................................................25
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(vi) Bring-down Comfort Letter...........................................................25
(n) Additional Documents...........................................................................25
(o) Termination of Agreement.......................................................................26
SECTION 6. Indemnification.....................................................................26
(a) Indemnification of Underwriters and the Sub-underwriter........................................26
(b) Indemnification of Company, Directors and Officers.............................................27
(c) Actions against Parties; Notification..........................................................27
(d) Settlement without Consent if Failure to Reimburse.............................................28
SECTION 7. Contribution........................................................................28
SECTION 8. Representations, Warranties and Agreements to Survive Delivery......................29
SECTION 9. Termination of Agreement............................................................30
(a) Termination; General...........................................................................30
(b) Liabilities....................................................................................30
SECTION 10. Default by One or More of the Underwriters..........................................30
SECTION 11. Agent for Service; Submission to Jurisdiction; Waiver of Immunities.................31
SECTION 12. Notices.............................................................................31
SECTION 13. Parties.............................................................................32
SECTION 14. GOVERNING LAW AND TIME..............................................................32
SECTION 15. Effect of Headings..................................................................32
SECTION 16. Judgment Currency...................................................................32
iii
SCHEDULES
Schedule A - List of Underwriters...................................................... Sch A-1
Schedule B - List of Significant Subsidiaries.......................................... Sch B-1
Schedule C - Pricing Information....................................................... Sch C-1
Schedule D - List of Persons and Entities Subject to Lock-up........................... Sch D-1
EXHIBITS
Exhibit A - Form of Opinion of Company's Canadian Counsel............................. A-1
Exhibit B - Form of Opinion of Company's U.S. Counsel ................................ B-1
Exhibit C - Form of Opinion of Company's Acquisition Counsel.......................... C-1
Exhibit D - Form of Lock-up Letter ................................................... D-1
iv
Gerdau Ameristeel Corporation
(incorporated under the Business Corporations Act (Ontario))
35,000,000 Common Shares
PURCHASE AGREEMENT
October 14, 2004
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
BMO Xxxxxxx Xxxxx Inc.
CIBC World Markets Inc.
X.X. Xxxxxx Securities Inc.
Xxxxxx Xxxxxxx & Co. Incorporated
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
World Financial Center, North Tower
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000-0000
Ladies and Gentlemen:
Gerdau Ameristeel Corporation, a company incorporated under the
Business Corporations Act (Ontario) (the "Company"), confirms its agreement with
Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
("Xxxxxxx Xxxxx"), BMO Xxxxxxx Xxxxx Inc. ("BMO NB"), CIBC World Markets Inc.,
X.X. Xxxxxx Securities Inc. and Xxxxxx Xxxxxxx & Co. Incorporated (collectively,
the "Underwriters", which term shall also include any underwriter substituted as
hereinafter provided in Section 10 hereof), with respect to the issue and sale
by the Company and the purchase by the Underwriters, acting severally and not
jointly, of the respective numbers of common shares, without par value, of the
Company ("Common Shares") as set forth in Schedule A hereto and with respect to
the grant by the Company to the Underwriters, acting severally and not jointly,
of the option described in Section 2(b) hereof to purchase all or any part of
5,250,000 additional Common Shares to cover over-allotments, if any. The
aforesaid 35,000,000 Common Shares (the "Initial Securities") to be purchased by
the Underwriters and all or any part of the 5,250,000 Common Shares subject to
the option described in Section 2(b) hereof (the "Option Securities") are
hereinafter called, collectively, the "Securities".
2
The Company understands that the Underwriters propose to make a public
offering of the Securities in the United States and in each of the provinces and
territories of Canada upon the terms set forth in the U.S. Prospectus (as
defined below) and the Canadian Prospectus (as defined below) as soon as the
Underwriters deem advisable after this purchase agreement (the "Agreement") has
been executed and delivered.
The Company has entered into a subscription agreement, dated the date
hereof (the "Xxxxxx X.X. Subscription Agreement"), with Gerdau Steel Inc., an
affiliate of Xxxxxx X.X., pursuant to which Gerdau Steel Inc. will purchase from
the Company 35,000,000 Common Shares (the "Xxxxxx X.X. Initial Securities") at
the price per share set forth in paragraph 1 of Schedule C, the closing of which
shall occur at the Closing Time (as defined below). The Xxxxxx X.X. Subscription
Agreement also provides that Gerdau Steel Inc. shall purchase, within two days
following the date of exercise of the over-allotment option described in Section
2(b) hereof, the same number of additional Common Shares (the "Xxxxxx X.X.
Additional Securities" and, together with the Xxxxxx X.X. Initial Securities,
the "Xxxxxx X.X. Securities") that the Underwriters purchase pursuant to Section
2(b). The purchase of Xxxxxx X.X. Securities by Gerdau Steel Inc. is separate
from the public offering of the Securities as contemplated by this Agreement,
and no commission shall be payable to the Underwriters in connection with the
purchase of the Xxxxxx X.X. Securities by Gerdau Steel Inc. pursuant to the
Xxxxxx X.X. Subscription Agreement. As set forth in Section 5(l) hereof, the
purchase of the Initial Securities by the Underwriters pursuant to Section 2 of
this Agreement is conditional on the closing of the purchase of the Xxxxxx X.X.
Initial Securities by Gerdau Steel Inc.
The Company has also entered into definitive agreements, each dated
September 9, 2004 (the "Asset Purchase Agreements"), with Xxxxxxx, Xxxxxxxxxxxx
and certain of its subsidiaries (the "Vendors") to acquire (the "Acquisition")
the land, fixed assets and working capital of four long steel products xxxxx and
four downstream facilities (collectively referred to as "North Star"). The
purchase of Securities by the Underwriters pursuant to Section 2 of this
Agreement is not conditional on the closing of the Acquisition.
The Company has prepared and filed with the securities regulatory
authorities (the "Qualifying Authorities") in each of the provinces and
territories of Canada (the "Qualifying Jurisdictions") a preliminary short form
base PREP prospectus, including the documents incorporated by reference, dated
October 4, 2004, relating to the Securities and the Xxxxxx X.X. Securities (in
the English and French languages, as applicable, the "Canadian Preliminary
Prospectus"). The Ontario Securities Commission (the "Reviewing Authority") is
the principal regulator for the Company in respect of the offering of Securities
and Xxxxxx X.X. Securities and the Canadian Preliminary Prospectus has been
filed with the Qualifying Authorities pursuant to National Instrument 44-101 -
Short Form Prospectus Distributions, National Policy 43-201 - Mutual Reliance
Review System for Prospectuses and Annual Information Forms and National
Instrument 44-103 - Post-Receipt Pricing for the pricing of securities after the
final receipt for a prospectus has been obtained (the "PREP Procedures"). The
Reviewing Authority has issued a preliminary Mutual Reliance Review System
("MRRS") decision document on behalf of itself and the Qualifying Authorities
evidencing a receipt by each of the Qualifying Authorities for the Canadian
Preliminary Prospectus. The Company has prepared and filed with the United
States Securities and Exchange
3
Commission (the "Commission") a registration statement on Form F-10 (File No.
333-119539) covering the registration of the Securities (but not the Xxxxxx X.X.
Securities) under the Securities Act of 1933, as amended (the "1933 Act"),
including the Canadian Preliminary Prospectus (with such deletions therefrom and
additions thereto as are permitted or required by Form F-10 and the applicable
rules and regulations of the Commission) (the "U.S. Preliminary Prospectus").
In addition, the Company (A) has prepared and filed (1) with the
Qualifying Authorities, a final short form base PREP prospectus relating to the
Securities, including the documents incorporated by reference dated October 14,
2004 (in the English and French languages, as applicable, the "Final PREP
Prospectus") which omits the PREP Information (as hereinafter defined) in
accordance with the PREP Procedures and (2) with the Commission, an amendment to
such registration statement, including the Final PREP Prospectus (with such
deletions therefrom and additions thereto as are permitted or required by Form
F-10 and the applicable rules and regulations of the Commission) omitting the
PREP Information, and (B) will prepare and file, promptly after the execution
and delivery of this Agreement, (1) with the Qualifying Authorities, in
accordance with the PREP Procedures, a supplemented PREP prospectus setting
forth the PREP Information (in the English and French languages, as applicable,
the "Supplemental PREP Prospectus"), and (2) with the Commission, in accordance
with General Instruction II.L. of Form F-10, the Supplemental PREP Prospectus
(with such deletions therefrom and additions thereto as are permitted or
required by Form F-10 and the applicable rules and regulations of the
Commission) (the "U.S. Supplemental Prospectus"). The information included in
the Supplemental PREP Prospectus that is omitted from the Final PREP Prospectus
for which a receipt has been obtained from the Reviewing Authority on behalf of
the Qualifying Authorities and which is deemed under the PREP Procedures to be
incorporated by reference into the Final PREP Prospectus as of the date of the
Supplemental PREP Prospectus is referred to herein as the "PREP Information".
Each prospectus relating to the Securities (A) used in the United
States (1) before the time such registration statement on Form F-10 became
effective or (2) after such effectiveness and prior to the execution and
delivery of this Agreement or (B) used in Canada (1) before a receipt for the
Final PREP Prospectus had been obtained from the Reviewing Authority on behalf
of itself and the Qualifying Authorities or (2) after such receipt has been
obtained and prior to the execution and delivery of this Agreement, in each
case, including the documents incorporated by reference therein, that omits the
PREP Information, is herein called a "preliminary prospectus". Such registration
statement on Form F-10, including the exhibits thereto and the documents
incorporated by reference therein, as amended at the time it became effective is
herein called the "Registration Statement". The prospectus included in the
Registration Statement at the time it became effective, including the documents
incorporated by reference therein, is herein called the "U.S. Prospectus",
except that if a U.S. Supplemental Prospectus containing the PREP Information is
thereafter furnished to the Underwriters after the execution of this Agreement
(whether or not such prospectus is required to be filed pursuant to the general
rules and regulations of the Commission under the 1933 Act (the "1933 Act
Regulations")), the term "U.S. Prospectus" shall refer to such U.S. Supplemental
Prospectus, including the documents incorporated by reference therein.
The Final PREP Prospectus for which a final MRRS decision document has
been issued by the Reviewing Authority on behalf of the Qualifying Authorities,
including the documents
4
incorporated by reference therein, is herein referred to as the "Canadian
Prospectus", except that, if, after the execution of this Agreement, a
Supplemental PREP Prospectus containing the PREP Information is thereafter filed
with the Qualifying Authorities, the term "Canadian Prospectus" shall refer to
such Supplemental PREP Prospectus, including the documents incorporated by
reference therein. Any amendment to the Canadian Prospectus, any amended or
supplemental prospectus or auxiliary material, information, evidence, return,
report, application, statement or document that may be filed by or on behalf of
the Company under the securities laws of the Qualifying Jurisdictions prior to
the Closing Time (as hereinafter defined) or, where such document is deemed to
be incorporated by reference into the Final PREP Prospectus, prior to the expiry
of the period of distribution of the Securities, is referred to herein
collectively as the "Supplementary Material".
The Company understands that a portion of the Securities may be offered
and sold in a public offering in the Qualifying Jurisdictions conducted through
Xxxxxxx Xxxxx Canada Inc., an affiliate of Xxxxxxx Xxxxx (the
"Sub-underwriter"), pursuant to the Canadian Prospectus. The Sub-underwriter,
subject to the terms and conditions set forth herein, agrees and covenants with
the Company to use reasonable efforts to sell the Securities in the Qualifying
Jurisdictions. Any Securities so sold will be purchased by the Sub-underwriter
from Xxxxxxx Xxxxx at the Closing Time (as hereinafter defined) at a price equal
to the purchase price as set forth in Schedule C hereto or such purchase price
less an amount to be mutually agreed upon by the Sub-underwriter and Xxxxxxx
Xxxxx, which amount shall not be greater than the underwriting commission as set
forth in Schedule C hereto.
The Company has also prepared and filed with the Commission an
appointment of agent for service of process upon the Company on Form F-X in
conjunction with the filing of the Registration Statement (the "Form F-X").
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company
represents and warrants to each Underwriter and the Sub-underwriter as of the
date hereof, as of the Closing Time referred to in Section 2(c) hereof, and as
of each Date of Delivery (if any) referred to in Section 2(b) hereof, and agrees
with each Underwriter and the Sub-underwriter, as follows:
(i) Compliance with Registration Requirements. The Company is
a reporting issuer (or equivalent thereof) in each Qualifying
Jurisdiction and is not in default under the securities laws of any
Qualifying Jurisdiction. The Company is qualified to file a prospectus
in the form of a short form prospectus in each Qualifying Jurisdiction
pursuant to the requirements of National Instrument 44-101 - Short Form
Prospectus Distributions. The Company meets the general eligibility
requirements for use of Form F-10 under the 1933 Act and is eligible to
use the PREP Procedures. A MRRS decision document evidencing a receipt
has been obtained from the Reviewing Authority on behalf of the
Qualifying Authorities in respect of the Final PREP Prospectus and no
order suspending the distribution of or trading in the Securities or
the Xxxxxx X.X. Securities has been issued by any of the Qualifying
Authorities. The Registration Statement has become effective under the
1933 Act and no stop order suspending the effectiveness of the
Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending
5
or, to the knowledge of the Company, are contemplated by the
Commission, and any request on the part of the Commission for
additional information has been complied with.
At the time the Registration Statement became effective under
the 1933 Act and at all times subsequent thereto up to and including
the Closing Time (as defined in Section 2(c)) (and if any Option
Securities are purchased, at the Date of Delivery (as defined in
Section 2(b)): (A) the Canadian Prospectus complied and will comply in
all material respects with the securities laws applicable in the
Qualifying Jurisdictions, as interpreted and applied by the Qualifying
Authorities (including the PREP Procedures) ("Canadian Securities
Laws"); (B) the U.S. Prospectus conformed and will conform to the
Canadian Prospectus except for such deletions therefrom and additions
thereto as are permitted or required by Form F-10 and the applicable
rules and regulations of the Commission; (C) the Registration Statement
and any amendments or supplements thereto complied and will comply in
all material respects with the requirements of the 1933 Act and the
1933 Act Regulations; (D) neither the Registration Statement nor any
amendment or supplement thereto contained or will contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; and (E) each of the Canadian Prospectus, any Supplementary
Material or any amendment or supplement thereto, together with each
document incorporated therein by reference, constituted and will
constitute full, true and plain disclosure of all material facts
relating to the Company and the Securities, and each of the U.S.
Prospectus, the Canadian Prospectus and any Supplementary Material or
any amendment or supplement thereto, together with each document
incorporated therein by reference, did not and will not include an
untrue statement of a material fact or omit 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, except that
the representations and warranties contained in clauses (D) and (E)
above do not apply to statements or omissions made in reliance upon and
in conformity with information furnished in writing to the Company by
any Underwriter through Xxxxxxx Xxxxx, BMO NB or the Sub-underwriter
expressly for use in the Registration Statement, the U.S. Prospectus,
the Canadian Prospectus or any Supplementary Material.
(ii) Incorporated Documents. Each document filed or to be
filed with the Qualifying Authorities and incorporated or deemed to be
incorporated by reference in the Canadian Prospectus complied or will
comply when so filed and at the Closing Time (and, if any Option
Securities are purchased, at any Date of Delivery) in all material
respects with Canadian Securities Laws, and none of such documents
contained or will contain at the time of its filing any untrue
statement of a material fact or omitted or will omit at the time of its
filing to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were or are made, not misleading.
The documents incorporated or deemed to be incorporated by
reference in the Registration Statement and the U.S. Prospectus, at the
time they were or hereafter are filed with the Commission, complied and
will comply in all material respects with the requirements of the
Securities Exchange Act of 1934, as amended (the "1934 Act"), and the
rules and regulations of the Commission thereunder (the "1934 Act
Regulations"), and, when read together with the other information in
the U.S. Prospectus, at the time the Registration
6
Statement became effective, at the time the U.S. Prospectus was issued
and at the Closing Time (and, if any Option Securities are purchased,
at the Date of Delivery) did not and will not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading.
(iii) Independent Accountants. PricewaterhouseCoopers LLP, who
has audited the consolidated financial statements of the Company
included or incorporated by reference in the U.S. Prospectus and the
Canadian Prospectus and performed certain procedures in connection with
the delivery of its compilation report in connection with the pro forma
statements of earnings (loss) and balance sheet for the Company taking
into account the Company's acquisition of North Star included in the
U.S. Prospectus and the Canadian Prospectus are independent public
accountants as required by the 1933 Act and the 1933 Act Regulations
and are independent with respect to the Company within the meaning of
the Xxxxxxxx-Xxxxx Act of 2002, the Business Corporations Act (Ontario)
and applicable Canadian Securities Laws.
(iv) Company Financial Statements. The Company's consolidated
financial statements included or incorporated by reference in the U.S.
Prospectus and the Canadian Prospectus, together with the related
notes, present fairly in all material respects the consolidated
financial position of the Company and its consolidated subsidiaries at
the dates indicated and the consolidated statements of earnings (loss)
and shareholders' equity and cash flows of the Company and its
consolidated subsidiaries for the periods specified. The audited
consolidated financial statements for the fiscal years ended December
31, 2002 and 2003 have been prepared in accordance with generally
accepted accounting principles in Canada ("Canadian GAAP") applied on a
consistent basis throughout the periods involved and have been
reconciled to generally accepted accounting principles in the United
States of America ("U.S. GAAP") in accordance with Item 18 of Form 20-F
under the 1934 Act. The unaudited consolidated financial statements for
the six month periods ended June 30, 2003 and 2004 have been prepared
in accordance with U.S. GAAP applied on a consistent basis throughout
the periods involved and have been reconciled to Canadian GAAP (except
for normal year end adjustments). The selected consolidated financial
data, the summary consolidated financial data and all operating data
included or incorporated by reference in the U.S. Prospectus and the
Canadian Prospectus present fairly in all material respects the
information shown therein and the selected consolidated financial data
and the summary consolidated financial data have been compiled on a
basis consistent with that of the audited or unaudited consolidated
financial statements included in the U.S. Prospectus and the Canadian
Prospectus. The pro forma financial statements and the related notes
thereto included in the U.S. Prospectus and the Canadian Prospectus
present fairly in all material respects the information shown therein,
have been prepared in accordance with Canadian Securities Laws with
respect to pro forma financial statements, except insofar as the
Company obtained pre-filing relief from the Qualifying Authorities on
September 29, 2004, and have been properly compiled on the bases
described therein, and the assumptions used in the preparation thereof
are reasonable and the adjustments used therein are appropriate to give
effect to the transactions and circumstances referred to therein.
7
(v) North Star Financial Statements. To the knowledge of the
Company, (i) the audited combined financial statements of North Star
included in the U.S. Prospectus and the Canadian Prospectus, together
with the related notes, present fairly in all material respects the
combined financial position of North Star at the dates indicated and
for the periods specified; (ii) such combined financial statements of
North Star have been prepared in accordance with U.S. GAAP applied on a
consistent basis throughout the periods involved and have been
reconciled to Canadian GAAP; (iii) the selected combined financial
data, the summary combined financial data and all operating data of
North Star included in the U.S. Prospectus and the Canadian Prospectus
present fairly in all material respects the information show therein;
and (iv) such selected combined financial data and summary combined
financial data of North Star have been compiled on a basis consistent
with that of the audited combined financial statements of North Star
included in the U.S. Prospectus and the Canadian Prospectus.
(vi) North Star Acquisition. To the Company's knowledge, the
representations and warranties of the Vendors in connection with North
Star contained in the Asset Purchase Agreements are accurate in all
material respects and the Company is not aware of any non-compliance by
the Vendors with any of the covenants contained in the Asset Purchase
Agreements.
(vii) No Material Adverse Change in Business. Since the
respective dates as of which information is given in the U.S.
Prospectus, the Canadian Prospectus and the Supplementary Material,
except as otherwise stated therein, (A) there has been no material
adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in
the ordinary course of business (a "Material Adverse Effect"), (B)
there have been no transactions entered into by the Company or any of
its subsidiaries, other than those in the ordinary course of business,
which are material with respect to the Company and its subsidiaries
considered as one enterprise, (C) there has been no dividend or
distribution of any kind declared, paid or made by the Company on any
class of its share capital, and (D) to the knowledge of the Company,
there has been no material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business
prospects of North Star, whether or not arising in the ordinary course
of business.
(viii) Good Standing of the Company. The Company is a
corporation duly incorporated, validly existing and in good standing
under the laws of Ontario and has the corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the U.S. Prospectus and the Canadian Prospectus. Each
subsidiary of the Company that is a "significant subsidiary" of the
Company (as that term is defined in Rule 1-02 of Regulation S-X under
the 1934 Act) (each a "Significant Subsidiary" and, collectively, the
"Significant Subsidiaries") is listed on Schedule B to this Agreement.
Each Significant Subsidiary has been duly incorporated, amalgamated,
organized or continued and is validly existing and in good standing
under the laws of its jurisdiction of incorporation, amalgamation,
organization, or continuance, as the case may be, and has the corporate
or partnership or limited liability company power and authority to own,
lease and operate its properties and to conduct its business as
described in the U.S. Prospectus and the Canadian
8
Prospectus; and the Company and each Significant Subsidiary is duly
qualified or registered to transact business in any other jurisdiction
in which it carries on business, and is in good standing under the laws
of each other jurisdiction in which it owns or leases property or
conducts any business so as to require such qualification, except where
the failure so to qualify or register or be in good standing would not
result in a Material Adverse Effect.
(ix) Capitalization. The authorized, issued and outstanding
share capital of the Company is as set forth in the U.S. Prospectus and
the Canadian Prospectus under the caption "Description of Share
Capital" and in the column entitled "Actual" under the caption
"Capitalization" (except for any subsequent issuances pursuant to this
Agreement, pursuant to reservations, agreements or employee benefit
plans referred to in the U.S. Prospectus and the Canadian Prospectus or
pursuant to the exercise of convertible securities or options referred
to in the U.S. Prospectus and the Canadian Prospectus). All of the
issued and outstanding shares in the capital of the Company have been
duly authorized and validly issued and are fully paid and
non-assessable and have been issued in compliance with all U.S. and
Canadian securities laws; none of the outstanding shares in the capital
of the Company was issued in violation of preemptive or other similar
rights of any shareholder of the Company. Except as disclosed in the
U.S. Prospectus and the Canadian Prospectus, the Company does not have
any options or warrants to purchase, or any pre-emptive rights or other
rights to subscribe for or to purchase any securities or obligations
convertible into, or any contracts or commitments to issue or sell, any
of its share capital or any such options, rights, convertible
securities or obligations. The description of the Company's employee
benefit plans, and the options or other rights granted thereunder, as
set forth in the U.S. Prospectus and the Canadian Prospectus,
accurately and fairly presents the information required to be disclosed
with respect to such plans, arrangements, options and rights. Except as
disclosed in the U.S. Prospectus and the Canadian Prospectus, to the
knowledge of the Company, there are no agreements, arrangements or
understandings among or between any shareholders of the Company with
respect to the Company or the voting or disposition of the Company's
capital stock that will survive the sale of the Securities pursuant to
this Agreement. All of the issued and outstanding shares in the capital
of each Significant Subsidiary have been duly authorized and validly
issued and are fully paid and non-assessable and, except as provided by
the Company's US$350,000,000 senior secured credit facility with a
syndicate of lenders dated as of June 20, 2003, are owned by the
Company, directly or through subsidiaries, free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or
equity; none of the outstanding shares in the capital of each of the
Significant Subsidiaries was issued in violation of preemptive or other
similar rights of any shareholder of such Significant Subsidiary.
(x) Authorization of Agreements. The Company has the corporate
power and authority to execute, deliver and perform its obligations
under this Agreement and this Agreement has been duly authorized,
executed and delivered by the Company. The Company has the corporate
power and authority to execute, deliver and perform its obligations
under each of the Asset Purchase Agreements and the Xxxxxx X.X.
Subscription Agreement, and each of the Asset Purchase Agreements and
the Xxxxxx X.X. Subscription Agreement has been duly authorized,
executed and delivered by the Company and, assuming such agreements are
binding on the other parties thereto, are enforceable against the
9
Company in accordance with their terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and remedies
and to general equity principles. The Asset Purchase Agreements and the
Xxxxxx X.X. Subscription Agreement conform in all material respects to
the descriptions thereof in the U.S. Prospectus and the Canadian
Prospectus and are in the forms previously delivered to the
Underwriters.
(xi) Authorization and Description of Securities. The
Securities have been duly authorized for issuance and sale to the
Underwriters pursuant to this Agreement and, when issued and delivered
by the Company pursuant to this Agreement against payment of the
consideration set forth herein, will be validly issued and fully paid
and non-assessable; the Common Shares conform in all material respects
to all statements relating thereto contained in the U.S. Prospectus and
the Canadian Prospectus and such description conforms in all material
respects to the rights set forth in the instruments defining the same;
no holder of the Securities will be subject to personal liability
solely by reason of being such a holder; and the issuance of the
Securities is not subject to the pre-emptive or other similar rights of
any shareholder of the Company.
(xii) Absence of Defaults and Conflicts. Neither the Company
nor any of its subsidiaries, nor, to the knowledge of the Company,
North Star, is in violation of its charter or by-laws or in default in
the performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, deed of
trust, loan or credit agreement, note, lease, license or other
agreement or instrument to which the Company or any of its subsidiaries
or North Star, as the case may be, is a party or by which it or any of
its subsidiaries or North Star, as the case may be, may be bound, or to
which any of the property or assets of the Company or any of its
subsidiaries or North Star, as the case may be, is subject
(collectively, "Agreements and Instruments") except for such violations
or defaults that would not result in a Material Adverse Effect. The
execution, delivery and performance of this Agreement, the Asset
Purchase Agreements and the Xxxxxx X.X. Subscription Agreement, and the
consummation of the transactions contemplated herein and therein and in
the U.S. Prospectus and the Canadian Prospectus (including the
authorization, issuance, sale and delivery of the Securities and the
use of the proceeds from the sale of the Securities as described in the
U.S. Prospectus and the Canadian Prospectus under the caption "Use of
Proceeds"), and compliance by the Company with its obligations
hereunder and thereunder have been duly authorized by all necessary
corporate action and do not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as defined
below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any
subsidiary pursuant to, the Agreements and Instruments (except for such
conflicts, breaches or defaults, Repayment Events or liens, charges or
encumbrances that would not result in a Material Adverse Effect), nor
will such actions result in any violation or conflict with the
provisions of the articles or by-laws of the Company or any subsidiary
or any applicable law, statute, rule, regulation, judgment, order, writ
or decree of any government, government instrumentality, court,
domestic or foreign, or stock exchange having jurisdiction over the
Company or any subsidiary or any of their assets, properties or
operations. As used herein, a "Repayment Event" means any event or
condition which gives
10
the holder of any note, debenture or other evidence of indebtedness (or
any person acting on such holder's behalf) the right to require the
repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company or any subsidiary.
(xiii) Absence of Labor Dispute. No labor dispute with the
employees of the Company or any subsidiary, or, to the knowledge of the
Company, North Star exists or, to the knowledge of the Company, is
imminent, and the Company is not aware of any existing or imminent
labor disturbance by the employees of any of its or any subsidiary's or
North Star's (as the case may be) principal suppliers, manufacturers,
customers or contractors, which, in either case, may reasonably be
expected to result in a Material Adverse Effect.
(xiv) Absence of Proceedings. There is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency, governmental instrumentality or body, domestic or
foreign, now pending, or, to the knowledge of the Company, threatened,
against or affecting the Company, any subsidiary or, to the knowledge
of the Company, North Star, which is required to be disclosed in the
U.S. Prospectus, the Canadian Prospectus or the Supplementary Material,
or which might reasonably be expected to result in a Material Adverse
Effect, or which might reasonably be expected to materially and
adversely affect the properties or assets thereof or the consummation
of the transactions contemplated in this Agreement, the Asset Purchase
Agreements or the Xxxxxx X.X. Subscription Agreement or the performance
by the Company of its obligations hereunder; the aggregate of all
pending legal or governmental proceedings to which the Company or any
subsidiary or, to the knowledge of the Company, North Star, is a party
or of which any of their respective property or assets is the subject
which are not described in the U.S. Prospectus, the Canadian Prospectus
or the Supplementary Material, including ordinary routine litigation,
could not reasonably be expected to result in a Material Adverse
Effect.
(xv) Possession of Intellectual Property. The Company and its
subsidiaries own or possess, or can acquire on reasonable terms,
adequate patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks, trade names or other
intellectual property (collectively, "Intellectual Property") necessary
to carry on the business now operated by them, except for any which
failure to possess or have the ability to acquire on reasonable terms
could not reasonably be expected to result in a Material Adverse
Effect, and neither the Company nor any of its subsidiaries has
received any notice or is otherwise aware of any infringement of or
conflict with asserted rights of others with respect to any
Intellectual Property or of any facts or circumstances which would
render any Intellectual Property invalid or inadequate to protect the
interest of the Company or any of its subsidiaries therein, and which
infringement or conflict (if the subject of any unfavorable decision,
ruling or finding) or invalidity or inadequacy, singly or in the
aggregate, would result in a Material Adverse Effect.
(xvi) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency is necessary or required for (A) the performance by the Company
of its obligations hereunder, in connection with the offering, issuance
or sale of the Securities
11
hereunder or the consummation of the transactions contemplated by this
Agreement, or (B) the performance by the Company of its obligations
under the Xxxxxx X.X. Subscription Agreement, except in each case (1)
such as have been already obtained or as may be required under the 1933
Act or the 1933 Act Regulations or state securities laws or Blue Sky
laws and (2) such as have been obtained, or as may be required, under
Canadian Securities Laws. No filing with, or authorization, approval,
consent, license, order, registration, qualification or decree of, any
court or governmental authority or agency is necessary or required for
the performance by the Company of its obligations under the Asset
Purchase Agreements except those already obtained.
(xvii) Possession of Licenses and Permits. Except in each case
as would not individually or in an aggregate have a Material Adverse
Effect, (A) the Company and its subsidiaries and, to the Company's
knowledge, North Star, possess such permits, certificates, licenses,
approvals, consents and other authorizations (collectively,
"Governmental Licenses") issued by the appropriate federal, provincial,
state, local or foreign regulatory agencies or bodies necessary to
conduct the business now operated by them; (B) the Company and its
subsidiaries and, to the Company's knowledge, North Star, are in
compliance with the terms and conditions of all such Governmental
Licenses; (C) all of the Governmental Licenses are valid and in full
force and effect; and (D) neither the Company nor any of its
subsidiaries nor, to the Company's knowledge, North Star, has received
any notice of proceedings relating to the revocation or material
modification of any such Governmental Licenses.
(xviii) Title to Property. The Company and its subsidiaries
have good and marketable title to all real property owned by the
Company and its subsidiaries and good title to all other properties
owned by them, in each case that is material to the business of the
Company and its subsidiaries considered as one enterprise, in each
case, free and clear of all mortgages, pledges, liens, security
interests, claims, restrictions or encumbrances of any kind except such
as (A) are described in the U.S. Prospectus and the Canadian Prospectus
or (B) do not, singly or in the aggregate, materially affect the value
of such property and do not materially interfere with the use made and
proposed to be made of such property by the Company or any of its
subsidiaries; and all of the leases and subleases material to the
business of the Company and its subsidiaries, considered as one
enterprise, and under which the Company or any of its subsidiaries
holds properties described in the U.S. Prospectus and the Canadian
Prospectus, are in full force and effect, except where a failure of
such a lease or sublease to be in full force and effect would not have
a Material Adverse Effect, and neither the Company nor any subsidiary
has any notice of any material claim of any sort that has been asserted
by anyone adverse to the rights of the Company or any subsidiary under
any of the leases or subleases mentioned above, or affecting or
questioning the rights of the Company or such subsidiary to the
continued possession of the leased or subleased premises under any such
lease or sublease, except where such would not have a Material Adverse
Effect.
(xix) Investment Company Act. The Company is not, and upon the
issuance and sale of the Securities as herein contemplated or the sale
of the Xxxxxx X.X. Securities and the application of the net proceeds
therefrom as described in the U.S. Prospectus and the Canadian
Prospectus will not be, an "investment company" or an entity
"controlled" by an
12
"investment company" as such terms are defined in the Investment
Company Act of 1940, as amended (the "1940 Act").
(xx) Environmental Laws. Except as described in the U.S.
Prospectus and the Canadian Prospectus and except as would not, singly
or in the aggregate, be reasonably expected to result in a Material
Adverse Effect, (A) neither the Company nor any of its subsidiaries,
nor, to the Company's knowledge, North Star is in violation of any
federal, provincial, state, local, municipal or foreign statute, law,
rule, regulation, ordinance, code, legally binding policy or rule of
common law or civil law or any applicable and binding judicial or
administrative interpretation thereof, including any judicial or
administrative order, consent, decree or judgment, relating to
pollution or protection of human health, the environment (including,
without limitation, ambient air, surface water, groundwater, land
surface or subsurface strata) or wildlife, including, without
limitation, laws and regulations relating to the release or threatened
release of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum or petroleum products
(collectively, "Hazardous Materials") or to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport
or handling of Hazardous Materials (collectively, "Environmental
Laws"), (B) the Company and its subsidiaries and, to the Company's
knowledge, North Star, have all permits, authorizations and approvals
required under any applicable Environmental Laws and are in compliance
with their requirements, (C) there are no pending or, to the knowledge
of the Company, threatened administrative, regulatory or judicial
actions, suits, demands, demand letters, claims, liens, notices of
noncompliance or violation, investigations or proceedings relating to
any Environmental Laws against the Company or any of its subsidiaries
or, to the Company's knowledge, North Star and (D) there are no events
or circumstances that might reasonably be expected to form the basis of
an order for clean up or remediation, or an action, suit or proceeding
by any private party or governmental body or agency, against or
affecting the Company or any of its subsidiaries or, to the Company's
knowledge, North Star relating to Hazardous Materials or any
Environmental Laws.
(xxi) Benefit Plan Compliance. Each employee benefit plan
within the meaning of Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), and all other employee
benefit, health, welfare, supplemental unemployment benefit, bonus,
pension, profit sharing, deferred compensation, stock compensation,
stock purchase, retirement, hospitalization insurance, medical, dental,
legal, disability and similar plans or arrangements or practices
maintained, administered or contributed to by the Company or any of its
affiliates or relating to the employees or former employees of the
Company or any of its affiliates (the "Employee Plans") are and have
been established, registered, qualified, invested and administered, in
all material respects, in accordance with their terms, all laws,
regulations, orders or other legislative, administrative or judicial
promulgations applicable to the particular Employee Plan including but
not limited to ERISA and the Internal Revenue Code of 1986, as amended
(the "Code"). All material obligations regarding the Employee Plans
have been satisfied, there are no material outstanding defaults or
violations by any party thereto, no prohibited transactions (within the
meaning of Section 406 of ERISA or Section 4975 of the Code (excluding
transactions effected pursuant to a statutory or administrative
exemption)) or reportable events (within the meaning of Section 4043 of
the Code) have occurred with respect to such Employee Plan, and no
material taxes,
13
penalties or fees are owing or exigible under any of the Employee
Plans. No Employee Plan, nor any related trust or other funding medium
thereunder, is subject to any pending investigation, examination or
other proceeding, action or claim initiated by any governmental agency
or instrumentality, or by any other party (other than routine claims
for benefits), and to the knowledge of the Company there exists no
state of facts which after notice or lapse of time or both could
reasonably be expected to give rise to any such investigation,
examination or other proceeding, action or claim or to affect the
registration of any Employee Plan required to be registered. All
material contributions or premiums required to be made by the Company
or any of its affiliates under the terms of each Employee Plan or by
applicable laws have been made in all material respects in a timely
fashion in accordance with applicable laws and the terms of the
Employee Plans. Except as set forth in the U.S. Prospectus and Canadian
Prospectus or except for such underfunding that is not material, each
Employee Plan is in compliance with applicable U.S. and Canadian
regulatory and funding requirements and filings. For each Employee Plan
that is subject to the funding rules of Section 412 of the Code or
Section 302 of ERISA, no accumulated funding deficiency (as defined in
Section 412 of the Code) has been incurred, whether or not waived.
(xxii) No Stabilization or Manipulation. Neither the Company
nor, to its knowledge, any of its officers, directors or affiliates,
has taken or will take, directly or indirectly, any action designed to,
or that might be reasonably expected to, cause or result in
stabilization or manipulation of the price of the Securities.
(xxiii) Registration Rights. There are no persons with
registration rights or other similar rights to have any securities
registered or qualified for distribution pursuant to the Registration
Statement or the Canadian Prospectus or otherwise registered by the
Company under the 1933 Act or qualified for distribution under Canadian
Securities Laws.
(xxiv) Other Reports and Information. There are no reports or
information that in accordance with the requirements of the Qualifying
Authorities must be made publicly available in connection with the
offering of the Securities that have not been made publicly available
as required; no material change reports or other documents have been
filed on a confidential basis with the Qualifying Authorities since
August 31, 2002; there are no documents required to be filed with the
Qualifying Authorities in connection with the Canadian Prospectus or
the Acquisition that have not been filed as required; there are no
contracts, documents or other materials required to be described or
referred to in the Registration Statement, the U.S. Prospectus or the
Canadian Prospectus or to be filed as exhibits to the Registration
Statement that are not described, referred to or filed as required.
(xxv) Taxes. The Company and its subsidiaries have filed all
material United States and Canadian federal, state, provincial, local
and foreign income, payroll, franchise and other tax returns and have
paid all taxes shown as due thereon or with respect to any of their
properties or any transactions to which they are a party, and there is
no tax deficiency that has been, or to the knowledge of the Company is
likely to be, asserted against the Company or any of its subsidiaries
or any of their properties or assets that would result in a Material
Adverse Effect.
14
(xxvi) Insurance. Except as disclosed in the U.S. Prospectus
and the Canadian Prospectus, the Company and its subsidiaries are
insured by reputable insurers against such losses and risks and in such
amounts as the Company believes is reasonable in light of the business
it now conducts; each of the Company and its subsidiaries have no
reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue
its business at a cost that would not result in a Material Adverse
Effect.
(xxvii) Compliance with Laws. The Company and its subsidiaries
and, to the Company's knowledge, North Star, are in compliance with,
and conduct their businesses in conformity with, all applicable U.S.,
Canadian and foreign federal, state, provincial and local laws, rules
and regulations and all applicable ordinances, judgments, decrees,
orders and injunctions of any court or governmental agency or body or
the Toronto Stock Exchange (the "TSX"), except where the failure to be
in compliance or conformity would not result in a Material Adverse
Effect.
(xxviii) No Broker. Other than as contemplated by this
Agreement, there is no broker, finder or other party that is entitled
to receive from the Company any brokerage or finder's fee or other fee
or commission as a result of any of the transactions contemplated by
this Agreement or the Xxxxxx X.X. Subscription Agreement.
(xxix) Principal Shareholders. To the knowledge of the
Company, after due inquiry, none of the directors or executive officers
or shareholders of the Company listed under "Principal Shareholders" in
the U.S. Prospectus and the Canadian Prospectus is or has been during
the past 10 years subject to prior criminal or bankruptcy proceedings
in the United States, Canada or elsewhere.
(xxx) Non-Arm's Length Transactions. To the knowledge of the
Company, after due inquiry, except as disclosed in writing to the
Underwriters or in the U.S. Prospectus and the Canadian Prospectus,
neither the Company nor any subsidiary is a party to any contract,
agreement or understanding with any officer, director, employee or any
other person not dealing at arm's length with the Company or any
subsidiary which is required to be disclosed by applicable Canadian
Securities Laws.
(xxxi) Stamp Tax. No stamp duty, registration or documentary
taxes, duties or similar charges are payable under the federal laws of
Canada or the laws of the Province of Ontario in connection with the
creation, issuance, sale and delivery to the Underwriters of the
Securities or the authorization, execution, delivery and performance of
this Agreement or the resale of Securities by an Underwriter to U.S.
residents.
(xxxii) French Language Documents. The French language version
of each of the Final PREP Prospectus and the Supplemental PREP
Prospectus, together with each document incorporated therein by
reference, including the financial statements and other financial data
contained therein, is in all material respects a complete and proper
translation of the English language versions thereof, and is not
susceptible of any materially different interpretation with respect to
any material matter contained therein.
15
(xxxiii) No Unlawful Payments. Neither the Company nor any of
its subsidiaries nor, to the knowledge of each of the Company and its
subsidiaries, any director, officer, agent, employee or other person
acting on behalf of the Company or any of its subsidiaries has (A) used
any corporate funds for any unlawful contribution, gift, entertainment
or other unlawful expense relating to political activity; (B) made any
direct or indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds; (C) violated or
is in violation of any provision of the Foreign Corrupt Practices Act
of 1977, as amended; or (D) made any bribe, rebate, payoff, influence
payment, kickback or other unlawful payment.
(xxxiv) Disclosure Controls. The Company maintains disclosure
controls and procedures as required by Rule 13a-15 or Rule 15d-15 under
the 1934 Act and as contemplated by the certifications required under
Form 52-109F1 and Form 52-109F2 under Multilateral Instrument 52-109 -
Certification of Disclosures in Issuer's Annual and Interim Filings;
such controls and procedures are effective to ensure that all material
information concerning the Company is made known, on a timely basis, to
the individuals responsible for the preparation of the Company's
filings with the Commission and the Qualifying Authorities, and the
Company has delivered to counsel for the Underwriters copies of all
descriptions of and all polices, manuals and other documents, if any,
promulgating such disclosure controls and procedures.
(xxxv) Accounting Controls. The Company maintains systems of
internal accounting controls sufficient to provide reasonable assurance
that (A) transactions are executed in accordance with management's
general or specific authorizations; (B) transactions are recorded as
necessary to permit preparation of financial statements in conformity
with generally accepted accounting principles and to maintain asset
accountability; (C) access to assets is permitted only in accordance
with management's general or specific authorization; and (D) the
recorded accountability for assets is compared with the existing assets
at reasonable intervals and appropriate action is taken with respect to
any differences.
(xxxvi) Xxxxxxxx-Xxxxx Act of 2002. The Company has complied
with the currently applicable provisions of the Xxxxxxxx-Xxxxx Act of
2002, and, to the knowledge of the Company, the Company's directors and
executive officers, in their capacities as such, have complied with the
currently applicable provisions of the Xxxxxxxx-Xxxxx Act of 2002 in
all material respects.
(xxxvii) Foreign Status. The Company is a "foreign issuer"
within the meaning of Rule 902(e) under the 1933 Act and there is no
"substantial U.S. market interest" in its Common Shares within the
meaning of Rule 902(j) under the 1933 Act.
(b) Officers' Certificate. Any certificate signed by any officer of
the Company delivered to Underwriters or to counsel for the Underwriters and the
Sub-underwriter shall be deemed a representation and warranty by the Company to
each Underwriter and the Sub-underwriter as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing
16
(a) Initial Securities. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company agrees to sell 35,000,000 Initial Securities to the
Underwriters, and each Underwriter, severally and not jointly, agrees to
purchase from the Company at the price per share set forth in Schedule C, the
number of Initial Securities set forth in Schedule A opposite the name of such
Underwriter, plus any additional number of Initial Securities which such
Underwriter may become obligated to purchase pursuant to the provisions of
Section 10 hereof.
(b) Option Securities. In addition, on the basis of the representations
and warranties herein contained and subject to the terms and conditions herein
set forth, the Company hereby grants an option to the Underwriters, severally
and not jointly, to purchase up to an additional 5,250,000 Option Securities at
the price per share set forth in Schedule C. The option hereby granted will
expire 30 days after the Closing Time (as defined below) and may be exercised in
whole or in part from time to time only for the purpose of covering
over-allotments which may be made in connection with the offering and
distribution of the Initial Securities upon notice by Xxxxxxx Xxxxx and BMO NB
to the Company setting forth the number of Option Securities as to which the
several Underwriters are then exercising the option and the time and date of
payment and delivery for such Option Securities. Any such time and date of
delivery (a "Date of Delivery") shall be determined by Xxxxxxx Xxxxx and BMO NB,
but shall not be later than seven full business days after the exercise of said
option, nor in any event prior to the Closing Time, as hereinafter defined. If
the option is exercised as to all or any portion of the Option Securities, each
of the Underwriters, acting severally and not jointly, will purchase that
proportion of the total number of Option Securities then being purchased which
the number of Initial Securities set forth in Schedule A opposite the name of
such Underwriter bears to the total number of Initial Securities, subject in
each case to such adjustments as Xxxxxxx Xxxxx and BMO NB in their discretion
shall make to eliminate any sales or purchases of fractional shares.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, 000 Xxx Xxxxxx, Xxxxx 0000, Xxxxxxx,
Xxxxxxx, X0X 0X0, or at such other place as shall be agreed upon by Xxxxxxx
Xxxxx and BMO NB and the Company, at 8:30 A.M. (Eastern time) on the third
(fourth, if the pricing occurs after 4:30 P.M. (Eastern Time) on any given day)
business day after the date hereof (unless postponed in accordance with the
provisions of Section 10), or such other time not later than ten business days
after such date as shall be agreed upon by Xxxxxxx Xxxxx and BMO NB and the
Company (such time and date of payment and delivery being herein called "Closing
Time").
In addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price for, and delivery
of certificates for, such Option Securities shall be made at the above-mentioned
offices, or at such other place as shall be agreed upon by Xxxxxxx Xxxxx and BMO
NB and the Company, on each Date of Delivery as specified in the notice from
Xxxxxxx Xxxxx and BMO NB to the Company.
Payment shall be made to the Company by wire transfer of immediately
available (same day) funds to the bank account designated by the Company not
less than 24 hours prior to the Closing Time or relevant Date of Delivery,
against delivery to Xxxxxxx Xxxxx and BMO NB for the respective accounts of the
Underwriters of certificates for the Securities to be purchased by them. It is
17
understood that each Underwriter has authorized Xxxxxxx Xxxxx and BMO NB, for
its account, to accept delivery of, receipt for, and make payment of the
purchase price for, the Initial Securities and the Option Securities, if any,
which it has agreed to purchase. Payment to the Company with respect to
Securities the Underwriters have sold or expect to sell in the United States
shall be made in U.S. dollars and payment to the Company with respect to
Securities the Underwriters have sold or expect to sell in Canada shall be made
in Canadian dollars, as set forth in Schedule C hereto. Xxxxxxx Xxxxx and BMO
NB, individually and not as representatives of the Underwriters or the
Sub-underwriter, may (but shall not be obligated to) make payment of the
purchase price for the Initial Securities or the Option Securities, if any, to
be purchased by any Underwriter or the Sub-underwriter whose funds have not been
received by the Closing Time, or the relevant Date of Delivery, as the case may
be, but such payment shall not relieve such Underwriter or the Sub-Underwriter
from its obligations hereunder.
(d) Denominations; Registration. Certificates for the Initial
Securities and the Option Securities, if any, shall be in such denominations and
registered in such names as Xxxxxxx Xxxxx and BMO NB may request in writing at
least one full business day before the Closing Time or the relevant Date of
Delivery, as the case may be. The Initial Securities and the Option Securities,
if any, will be made available for examination and packaging by Xxxxxxx Xxxxx
and BMO NB in The City of New York not later than 10:00 A.M. (Eastern time) on
the business day prior to the Closing Time or the relevant Date of Delivery, as
the case may be.
(e) Sub-underwriter Notification. The Sub-underwriter shall notify
Xxxxxxx Xxxxx at least 48 hours prior to the Closing Time (or Date of Delivery,
as applicable) of the number of the Securities to be sold by the Sub-underwriter
in the Qualifying Jurisdictions and, subject to the completion of the purchase
of the Securities by Xxxxxxx Xxxxx hereunder, Xxxxxxx Xxxxx agrees to sell to
the Sub-underwriter, and the Sub-underwriter agrees to purchase from Xxxxxxx
Xxxxx, at a price equal to the purchase price set forth in Schedule C hereto or
at such purchase price less an amount to be mutually agreed upon by the
Sub-underwriter and Xxxxxxx Xxxxx, which amount shall not be greater than the
underwriting commission as set forth in Schedule C hereto, such number of the
Securities at the Closing Time (or Date of Delivery as applicable).
SECTION 3. Covenants of the Company. The Company covenants with each
Underwriter and the Sub-underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests. The
Company will comply with the requirements of the PREP Procedures and General
Instruction II.L. of Form F-10; and will notify the Underwriters and the
Sub-underwriter promptly, and confirm the notice in writing, (i) when any
post-effective amendment to the Registration Statement shall have been filed
with the Commission or shall have become effective, and when any supplement to
the U.S. Prospectus or the Canadian Prospectus or any amended U.S. Prospectus or
Canadian Prospectus or any Supplementary Material shall have been filed, (ii) of
the receipt of any comments from any Qualifying Authority or the Commission,
(iii) of any request by any Qualifying Authority to amend or supplement the
Final PREP Prospectus or the Canadian Prospectus or for additional information
or of any request by the Commission to amend the Registration Statement or to
amend or supplement the U.S. Prospectus or for additional information, (iv) of
the issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement or of any order preventing or
18
suspending the use of any preliminary prospectus, or of the suspension of the
qualification of the Securities or the Xxxxxx X.X. Securities for offering or
sale in any jurisdiction, or of the institution or, to the knowledge of the
Company, threatening of any proceedings for any such purpose, and (v) of the
issuance by any Qualifying Authority or any stock exchange of any order having
the effect of ceasing or suspending the distribution of or trading in the
Securities or the trading in any securities of the Company, or of the
institution or, to the knowledge of the Company, threatening of any proceedings
for any such purpose. The Company will use every reasonable effort to prevent
the issuance of any such stop order or of any order preventing or suspending
such use or any such order ceasing or suspending the distribution of or trading
in the Securities or the trading in any securities of the Company and, if any
such order is issued, to obtain the lifting thereof at the earliest possible
time.
(b) Filing of Amendments. The Company will not at any time file or make
any amendment to the Registration Statement, any amendment or supplement to the
Final PREP Prospectus, or any amendment or supplement to any of the prospectus
included in the Registration Statement at the time it becomes effective, the
U.S. Supplemental Prospectus, the Supplemental PREP Prospectus or any
Supplementary Material, of which Xxxxxxx Xxxxx and BMO NB shall not have
previously been advised and furnished a copy or to which Xxxxxxx Xxxxx and BMO
NB shall have objected, acting reasonably.
(c) Delivery of Filed Documents. The Company has delivered or will
deliver to each of the Underwriters, without charge, a copy of the Canadian
Preliminary Prospectus, the Final PREP Prospectus, the Canadian Prospectus, and
any Supplementary Material, approved, signed and certified as required by
Canadian Securities Laws and signed copies of the Registration Statement as
originally filed and of each amendment thereto (including exhibits filed
therewith or incorporated by reference therein) and signed copies of all
consents, letters and certificates of experts. The Company shall also deliver to
each of the Underwriters and their counsel copies of all correspondence with the
Qualifying Authorities relating to any proposed or requested exemptions from the
requirements of applicable securities laws, including in relation to the
financial statements of North Star.
(d) Delivery of Prospectuses. The Company has delivered to each
Underwriter and the Sub-underwriter, without charge, as many commercially
printed copies of each U.S. Preliminary Prospectus and Canadian Preliminary
Prospectus as such Underwriter and the Sub-underwriter have reasonably
requested, and the Company hereby consents to the use of such copies for the
purposes permitted by the 1933 Act and applicable Canadian Securities Laws. The
Company will promptly deliver to each Underwriter and the Sub-underwriter,
without charge, during the period when the U.S. Prospectus is required to be
delivered under the 1933 Act or the 1934 Act and during the period when the
Canadian Prospectus is required to be delivered under Canadian Securities Laws,
such number of commercially printed copies of the U.S. Prospectus and Canadian
Prospectus, respectively (each as supplemented or amended) as such Underwriter
and the Sub-underwriter may reasonably request.
(e) Continued Compliance with Securities Laws. The Company will comply
with the 1933 Act and the 1933 Act Regulations and Canadian Securities Laws so
as to permit the completion of the distribution of the securities as
contemplated in this Agreement and in the U.S. Prospectus and the Canadian
Prospectus. If at any time when a prospectus is required by the 1933 Act or
applicable
19
Canadian Securities Laws to be delivered in connection with sales of the
Securities, any event shall occur or condition shall exist as a result of which
it is necessary, in the opinion of counsel for the Underwriters or the
Sub-underwriter or for the Company, acting reasonably, to amend the Registration
Statement or amend or supplement the U.S. Prospectus or the Canadian Prospectus
in order that the U.S. Prospectus or the Canadian Prospectus contains full, true
and plain disclosure of all material facts relating to the Company and the
Securities and will not include any untrue statements of a material fact or omit
to state a material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the opinion of such
counsel, acting reasonably, at any such time to amend the Registration Statement
or amend or supplement the U.S. Prospectus or the Canadian Prospectus in order
to comply with the requirements of the 1933 Act or the 1933 Act Regulations or
Canadian Securities Laws, the Company will promptly prepare and file with the
Commission and with the Qualifying Authorities, subject to Section 3(b), such
amendment or supplement as may be necessary to correct such statement or
omission or to make the Registration Statement or the U.S. Prospectus or the
Canadian Prospectus comply with such requirements, and the Company will furnish
to the Underwriters and the Sub-underwriter such number of copies of such
amendment or supplement as the Underwriters and the Sub-underwriter may
reasonably request.
(f) Blue Sky Qualifications. The Company will use its reasonable best
efforts, in cooperation with the Underwriters, to qualify the Securities for
offering and sale under the applicable securities laws of such states and other
jurisdictions as Xxxxxxx Xxxxx and BMO NB may designate and to maintain such
qualifications in effect for a period of not less than one year from the
effective date of the Registration Statement; provided, however, that the
Company shall not be obligated to file any general consent to service of process
or to qualify as a foreign corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or to subject itself to taxation in
respect of doing business in any jurisdiction in which it is not otherwise so
subject. In each jurisdiction in which the Securities have been so qualified,
the Company will file such statements and reports as may be required by the laws
of such jurisdiction to continue such qualification in effect for a period of
not less than one year from the effective date of the Registration Statement.
(g) Rule 158. The Company will timely file such reports pursuant to the
1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement (which need not be
audited) for the purposes of, and to provide the benefits contemplated by, the
last paragraph of Section 11(a) of the 1933 Act and the regulations thereunder.
(h) Use of Proceeds. The Company will use the net proceeds received by
it from the sale of the Securities and the Xxxxxx X.X. Securities in the manner
specified in the U.S. Prospectus and the Canadian Prospectus under "Use of
Proceeds".
(i) Restriction on Sale of Securities. During a period of 90 days from
the date of the U.S. Prospectus and the Canadian Prospectus, the Company will
not, without the prior written consent of Xxxxxxx Xxxxx and BMO NB, (i) directly
or indirectly, offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase, lend or otherwise transfer or dispose of any
Common Shares or any securities convertible into or exercisable or exchangeable
for Common Shares or file any registration statement under the 1933 Act or file
a prospectus under applicable Canadian Securities Laws with respect to
20
any of the foregoing or (ii) enter into any swap or any other agreement or any
transaction that transfers, in whole or in part, directly or indirectly, the
economic consequence of ownership of the Common Shares, whether any such swap or
transaction described in clause (i) or (ii) above is to be settled by delivery
of Common Shares or such other securities, in cash or otherwise. The foregoing
sentence shall not apply to (A) the Securities to be sold hereunder and the
Xxxxxx X.X. Securities to be sold by the Company to Gerdau Steel Inc., (B) any
Common Shares issued or options to purchase such Common Shares granted pursuant
to existing employee stock option plans of the Company referred to in the U.S.
Prospectus and the Canadian Prospectus, or (C) any Common Shares issued by the
Company upon the exercise of an option or warrant or the conversion of a
security outstanding on the date hereof and referred to in the U.S. Prospectus
and the Canadian Prospectus.
(j) Listing. The Company has obtained the conditional approval of the
TSX for the listing of the Securities and will use its best efforts to satisfy
any requirements of the TSX to the listing thereof within the time specified in
such approval. The Company has obtained the approval of the New York Stock
Exchange (the "NYSE") for the listing of its Common Shares and the Securities
(subject to notice of issuance) and will use its best efforts to effect and
maintain the listing of its Common Shares and Securities on the NYSE and will
file with the NYSE all documents and notices required by the NYSE.
(k) Reporting Requirements. The Company, during the period when the
U.S. Prospectus or the Canadian Prospectus is required to be delivered under the
1933 Act or the 1934 Act or under applicable Canadian Securities Laws, will file
all documents required to be filed by the Company with (i) the Commission
pursuant to the 1934 Act within the time periods required by the 1934 Act and
the rules and regulations of the Commission thereunder, and (ii) with the
Qualifying Authorities in accordance with applicable Canadian Securities Laws.
(l) PREP Procedures. The Company will take such steps as it deems
necessary to ascertain promptly whether the form of Supplemental PREP Prospectus
containing the PREP Information and ancillary documentation thereto was received
for filing by the Qualifying Authorities and whether the U.S. Supplemental
Prospectus transmitted for filing pursuant to General Instruction II.L. of Form
F-10 was received for filing by the Commission and, in the event that any such
prospectuses were not received for filing, it will promptly file any such
prospectus not then received for filing.
(m) Translation Opinions. The Company shall cause Xxxxxx Blaikie LLP to
deliver to the Underwriters and the Sub-underwriter opinions, dated the date of
the filing of the French language versions of each of the Final PREP Prospectus
and the Supplemental PREP Prospectus, to the effect that the French language
version of each such prospectus, together with each document incorporated
therein by reference (other than the financial statements and other financial
data contained therein), is in all material respects a complete and proper
translation of the English language versions thereof. The Company shall cause
Xxxxxx Xxxxxxx LLP to deliver to the Underwriters and the Sub-underwriter
similar opinions as to the French language translation of any information
contained in any Supplementary Material, in form and substance satisfactory to
the Underwriters and the Sub-underwriter, prior to the filing thereof with the
Qualifying Authorities.
21
(n) Translation Opinions -- Financial Statements. The Company shall
cause PricewaterhouseCoopers LLP and KPMG LLP to deliver to the Underwriters and
the Sub-underwriter opinions, dated the date of the filing of the French
language versions of each of the Final PREP Prospectus and the Supplemental PREP
Prospectus, which when taken together are to the effect that the financial
statements and other financial data contained in the French language version of
each such prospectus, together with each document incorporated therein by
reference, is in all material respects a complete and proper translation of the
English language versions thereof. The Company shall cause
PricewaterhouseCoopers LLP and KPMG LLP to deliver to the Underwriters and the
Sub-underwriter similar opinions as to the French language translation of any
information contained in any Supplementary Material, in form and substance
satisfactory to the Underwriters and the Sub-underwriter, prior to the filing
thereof with the Qualifying Authorities.
(o) Lock-Up Agreements. The Company will use its reasonable efforts to
ensure that those persons listed in Schedule D hereto comply with the conditions
contained in the agreements signed by such persons substantially in the form of
Exhibit D hereto.
(p) Dividends. The Company shall not declare or pay any dividends or
distributions on its Common Shares from the date hereof until the date which is
30 days after the Closing Date.
SECTION 4. Payment of Expenses
(a) Expenses. The Company will pay all expenses incident to the
performance of its obligations under this Agreement, including (i) the
preparation, translation, printing and filing of the Registration Statement
(including financial statements and exhibits and the Form F-X) and of each
amendment thereto, the preliminary prospectuses, the U.S. Prospectus, the Final
PREP Prospectus, the Canadian Prospectus and any Supplementary Material and any
amendments or supplements thereto, and the cost of printing and furnishing
copies thereof to the Underwriters and the Sub-underwriter, (ii) the
preparation, printing and delivery to the Underwriters and the Sub-underwriter
of this Agreement, any Agreement among Underwriters and such other documents as
may be required in connection with the offering, purchase, sale, issuance or
delivery of the Securities, (iii) the preparation, issuance and delivery of the
certificates for the Securities to the Underwriters and the Sub-underwriter
including any stock or other transfer taxes and any stamp or other duties
payable upon the sale, issuance or delivery of the Securities to the
Underwriters and the Sub-underwriter, (iv) the fees and disbursements of the
Company's counsel, accountants and other advisors and of KPMG LLP, auditor of
the financial statements of North Star included in the Canadian Prospectus and
the U.S. Prospectus, (v) the qualification of the Securities under applicable
securities laws in accordance with the provisions of Section 3(f) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Underwriters in connection therewith and in connection with the preparation
of the Blue Sky Survey and any supplement thereto, (vi) the printing and
delivery to the Underwriters and the Sub-underwriter of commercial copies of
each preliminary prospectus, and of the U.S. Prospectus and the Canadian
Prospectus and any amendments or supplements thereto, (vii) the preparation,
printing and delivery to the Underwriters of commercial copies of the Blue Sky
Survey and any supplement thereto, (viii) the fees and expenses of any transfer
agent or registrar for the Securities, (ix) the filing fees incident to, and the
reasonable fees and disbursements of counsel to the Underwriters and the
Sub-underwriter in connection with, the review by the National Association of
Securities Dealers, Inc. (the "NASD") of the terms of the sale of the Securities
and (x) the fees and
22
expenses incurred in connection with the listing of the Securities and the
Xxxxxx X.X. Securities on the TSX and the Common Shares, the Securities and the
Xxxxxx X.X. Securities on the NYSE. It is understood, however, that except as
provided in this Section 4(a) and Section 4(b) below, the Underwriters and the
Sub-underwriter will pay all of their own costs and expenses, including (without
limitation) the fees of their counsel.
(b) Termination of Agreement. If this Agreement is terminated by the
Underwriters in accordance with the provisions of Section 5 or Section 9(a)(i)
hereof, the Company shall reimburse the Underwriters and the Sub-underwriter for
all of their out-of-pocket expenses, including the reasonable fees and
disbursements of counsel for the Underwriters and the Sub-underwriter.
SECTION 5. Conditions of Underwriters' Obligations. The obligations of
the several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company contained in Section 1 hereof or
in certificates of any officer of the Company or any subsidiary of the Company
delivered pursuant to the provisions hereof, to the performance by the Company
of its covenants and other obligations hereunder, and to the following further
conditions:
(a) Effectiveness of Registration Statement. The Final PREP Prospectus
has been filed with the Qualifying Authorities and a MRRS decision document has
been issued by the Reviewing Authority on behalf of the Qualifying Authorities
relating to the Final PREP Prospectus and the Registration Statement has become
effective; and at the Closing Time no stop order suspending the effectiveness of
the Registration Statement shall have been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission, no order having
the effect of ceasing or suspending the distribution of the Securities or the
trading in the Securities or any other securities of the Company shall have been
issued or proceedings therefor initiated or threatened by any securities
commission, securities regulatory authority or stock exchange in Canada or the
United States, and any request on the part of any Qualifying Authority or the
Commission for additional information shall have been complied with to the
reasonable satisfaction of counsel to the Underwriters and the Sub-underwriter.
A Supplemental PREP Prospectus and a U.S. Supplemental Prospectus containing the
PREP Information shall have been filed, respectively, with the Qualifying
Authorities in accordance with the PREP Procedures and with the Commission in
accordance with General Instruction II.L. of Form F-10.
(b) Opinion of United States and Canadian Counsel for Company. At
Closing Time, the Underwriters shall have received the favorable opinion, dated
as of Closing Time, of Torys LLP, U.S. and Canadian counsel for the Company, or
other local counsel for the Company for matters other than U.S. federal, New
York, Delaware or Ontario law (and the federal laws of Canada applicable in
Ontario), in form and substance satisfactory to counsel for the Underwriters and
the Sub-underwriter, together with signed or reproduced copies of such opinion
for each of the Underwriters and the Sub-underwriter to the effect set forth in
Exhibits A and B hereto and to such further effect as counsel to the
Underwriters and the Sub-underwriter may reasonably request.
(c) Opinion of Acquisition Counsel for Company. At Closing Time, the
Underwriters shall have received the favorable opinion, dated as of Closing Time
of Xxxxx, Xxxxxxxx & Xxxxxxx, LLP, Acquisition counsel for the Company, in form
and substance satisfactory to counsel for the Underwriters and the
Sub-underwriter, together with signed or reproduced copies of such opinion for
23
each of the Underwriters and the Sub-underwriter to the effect set forth in
Exhibit C hereto and to such further effect as counsel to the Underwriters and
the Sub-underwriter may reasonably request.
(d) Opinion of Canadian Counsel for Underwriters and the
Sub-underwriter. At Closing Time, the Underwriters shall have received the
favorable opinion, dated as of Closing Time, of Blake, Xxxxxxx & Xxxxxxx LLP,
Canadian counsel for the Underwriters and the Sub-underwriter, together with
signed or reproduced copies of such opinion for each of the other Underwriters,
in form and substance satisfactory to the Underwriters. In giving such opinion
such counsel may rely, as to all matters governed by the laws of jurisdictions
other than the laws of the Provinces of Ontario, British Columbia, Alberta and
Quebec, and the federal laws of Canada applicable therein, upon the opinions of
counsel satisfactory to the Underwriters. Such counsel may also state that,
insofar as such opinion involves factual matters, they have relied, to the
extent they deem proper, upon certificates of officers of the Company and its
subsidiaries and certificates of public officials.
(e) Opinion of U.S. Counsel for Underwriters and the Sub-underwriter.
At Closing Time, the Underwriters shall have received the favorable opinion,
dated as of Closing Time, of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, United
States counsel for the Underwriters and the Sub-underwriter, together with
signed or reproduced copies of such opinion for each of the other Underwriters,
in form and substance satisfactory to the Underwriters. In giving such opinion
such counsel may rely, as to all matters governed by the laws of jurisdictions
other than the law of the State of New York and the federal law of the United
States, upon the opinions of counsel satisfactory to the Underwriters. Such
counsel may also state that, insofar as such opinion involves factual matters,
they have relied, to the extent they deem proper, upon certificates of officers
of the Company and its subsidiaries and certificates of public officials.
(f) Officers' Certificate. At Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the U.S. Prospectus and the Canadian Prospectus, any material adverse
change in the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and its subsidiaries considered as
one enterprise, or, to the knowledge of the Company, North Star, whether or not
arising in the ordinary course of business, and the Underwriters shall have
received a certificate of each of the Chief Executive Officer of the Company and
the Chief Financial Officer of the Company in their capacity as such and not
personally, dated as of Closing Time, to the effect that (i) there has been no
such material adverse change, (ii) the representations and warranties in Section
1(a) hereof are true and correct with the same force and effect as though
expressly made at and as of Closing Time, (iii) the Company has complied with
all agreements and satisfied all conditions on its part to be performed or
satisfied under this Agreement at or prior to Closing Time, (iv) no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceedings for that purpose have been instituted or are pending or, to the
knowledge of the Company, are contemplated by the Commission, and (v) no order
having the effect of ceasing or suspending the distribution of the Securities or
the trading in the Securities or any other securities of the Company has been
issued and no proceedings for that purpose have been instituted or are pending
or, to the knowledge of the Company, are contemplated by any Qualifying
Authorities in Canada.
(g) Accountant's Comfort Letters. At the time of the execution of this
Agreement, the Underwriters shall have received from PricewaterhouseCoopers LLP,
a letter dated such date, in
24
form and substance satisfactory to the Underwriters together with signed or
reproduced copies of such letter for each of the other Underwriters and the
Sub-underwriter containing statements and information of the type ordinarily
included in accountants' "comfort letters" to U.S. and Canadian underwriters
with respect to the financial statements and certain financial information
relating to the Company and the pro forma financial statements and certain pro
forma financial information contained in the U.S. Prospectus and the Canadian
Prospectus. At the time of the execution of this Agreement, the Underwriters
shall also have received from KPMG LLP, a letter dated such date, in form and
substance satisfactory to the Underwriters together with signed or reproduced
copies of such letter for each of the other Underwriters and the Sub-underwriter
containing statements and information of the type ordinarily included in
accountants' "comfort letters" to U.S. and Canadian underwriters with respect to
the financial statements and certain financial information relating to North
Star contained in the U.S. Prospectus and the Canadian Prospectus.
(h) Bring-down Comfort Letters. At Closing Time, the Underwriters shall
have received from each of PricewaterhouseCoopers LLP and KPMG LLP, a letter,
dated as of Closing Time, to the effect that they reaffirm the statements made
in the letter furnished pursuant to subsection (g) of this Section, except that
the "specified date" referred to shall be a date not more than three days prior
to Closing Time.
(i) No Objection. The NASD shall have confirmed that it has not raised
any objection with respect to the fairness and reasonableness of the
underwriting terms and arrangements.
(j) Lock-up Agreements. At the date of this Agreement, the Underwriters
shall have received an agreement substantially in the form set forth in Exhibit
D hereto, signed by the persons listed on Schedule D hereto.
(k) Approval of Listing. At Closing Time, the Securities shall have
been conditionally approved for listing on the TSX, subject only to satisfaction
of customary listing conditions on or before January 5, 2004. At the time of the
execution of this Agreement, the Common Shares shall have been approved for
listing on the NYSE. At Closing Time, the Securities shall have been approved
for listing on the NYSE, subject only to official notice of issuance.
(l) Xxxxxx X.X. Subscription. At Closing Time, Gerdau Steel Inc. shall
have purchased the Xxxxxx X.X. Initial Securities pursuant to the terms of the
Xxxxxx X.X. Subscription Agreement and shall have delivered to the Underwriters
a waiver and release (the "Waiver and Release"), in form and substance
satisfactory to the Underwriters, relating to the Xxxxxx X.X. Securities.
(m) Conditions to Purchase of Option Securities. In the event that the
Underwriters and the Sub-underwriter exercise their option provided in Section
2(b) hereof to purchase all or any portion of the Option Securities, the
representations and warranties of the Company contained herein and the
statements in any certificates furnished by the Company hereunder shall be true
and correct as of each Date of Delivery and, at the relevant Date of Delivery,
the Underwriters shall have received:
(i) Opinion of United States and Canadian Counsel for Company.
The favorable opinion of Torys LLP, U.S. and Canadian counsel for the
Company, or other local counsel
25
for the Company for matters other than U.S. federal, New York, Delaware
or Ontario law (and the federal laws of Canada applicable in Ontario),
in form and substance satisfactory to counsel for the Underwriters and
the Sub-underwriter, dated such Date of Delivery, relating to the
Option Securities to be purchased on such Date of Delivery and
otherwise to the same effect as the opinion required by Section 5(b)
hereof.
(ii) Opinion of Acquisition Counsel for Company. The favorable
opinion of Xxxxx, Xxxxxxxx & Xxxxxxx, LLP, Acquisition counsel for the
Company, in form and substance satisfactory to counsel for the
Underwriters and the Sub-underwriter, dated such Date of Delivery,
relating to the Option Securities to be purchased on such Date of
Delivery and otherwise to the same effect as the opinion required by
Section 5(c) hereof.
(iii) Opinion of Canadian Counsel for Underwriters and the
Sub-underwriter. The favorable opinion of Blake, Xxxxxxx & Xxxxxxx LLP,
Canadian counsel for the Underwriters and the Sub-underwriter, dated
such Date of Delivery, relating to the Option Securities to be
purchased on such Date of Delivery and otherwise to the same effect as
the opinion required by Section 5(d) hereof.
(iv) Opinion of U.S. Counsel for Underwriters and the
Sub-underwriter. The favorable opinion of Skadden, Arps, Slate, Xxxxxxx
& Xxxx LLP, U.S. counsel for the Underwriters and the Sub-underwriter,
dated such Date of Delivery, relating to the Option Securities to be
purchased on such Date of Delivery and otherwise to the same effect as
the opinion required by Section 5(e) hereof.
(v) Officers' Certificate. A certificate, dated such Date of
Delivery, of the Chief Executive Officer of the Company and the Chief
Financial Officer of the Company, in their capacity as such and not
personally, confirming that the certificate delivered at Closing Time
pursuant to Section 5(f) hereof remains true and correct as of such
Date of Delivery.
(vi) Bring-down Comfort Letter. A letter from each of
PricewaterhouseCoopers LLP and KPMG LLP, in form and substance
satisfactory to the Underwriters and dated such Date of Delivery, to
the effect that they reaffirm the statements made in the letter
furnished to the Underwriters pursuant to Section 5(g) hereof, except
that the "specified date" in the letter furnished pursuant to this
paragraph shall be a date not more than three days prior to such Date
of Delivery.
(n) Additional Documents. At Closing Time, and at each Date of
Delivery, counsel for the Underwriters and the Sub-underwriter shall have been
furnished with such documents, including certificates as to tax matters, and
opinions as they may require for the purpose of enabling them to pass upon the
issuance and sale of the Securities as herein contemplated, or in order to
evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company in connection with the issuance and sale of the Securities
as herein contemplated shall be satisfactory in form and substance to the
Underwriters and counsel for the Underwriters.
26
(o) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled, this
Agreement, or in the case of any condition to the purchase of Option Securities
on a Date of Delivery which is after the Closing Time, the obligations of the
several Underwriters and the Sub-underwriter to purchase the relevant
Securities, may be terminated by the Underwriters by notice to the Company at
any time at or prior to Closing Time or such Date of Delivery, as the case may
be, and such termination shall be without liability of any party to any other
party except as provided in Section 4 and except that Sections 1, 6, 7 and 8
shall survive any such termination and remain in full force and effect.
SECTION 6. Indemnification.
(a) Indemnification of Underwriters and the Sub-underwriter. The
Company agrees to indemnify and hold harmless each Underwriter and the
Sub-underwriter and each person, if any, who controls any Underwriter or the
Sub-underwriter within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act and their respective affiliates (as such is defined in Rule
501(b) under the 1933 Act), as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the PREP
Information, or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact included in
any preliminary prospectus or the U.S. Prospectus, the Canadian
Prospectus or any Supplementary Material (or any amendment or
supplement thereto), or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission; provided
that (subject to Section 6(d) below) any such settlement is effected
with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including the reasonable fees and disbursements of counsel chosen by
Xxxxxxx Xxxxx and BMO NB), reasonably incurred in investigating,
preparing or defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, to the
extent that any such expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any
loss, liability, claim, damage or expense to the extent incurred or
arising out of any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with
written information furnished to the Company by any Underwriter or the
Sub-underwriter through
27
the Underwriters expressly for use in the Registration Statement (or
any amendment thereto), including the PREP Information, or any
preliminary prospectus, the U.S. Prospectus or the Canadian Prospectus
(or any amendment or supplement thereto); and provided, further, that
this indemnity agreement shall not apply to any loss, liability, claim,
damage or expense to the extent that the Company shall sustain the
burden of proving that any such loss, liability, claim, damage or
expense resulted from the fact that such Underwriter or the
Sub-underwriter, in contravention of a requirement of this Agreement or
applicable law, sold Securities to a person to whom such Underwriter
failed to send or give a copy of the U.S. Prospectus or Canadian
Prospectus, as then amended or supplemented if: (i) the Company has
previously furnished copies thereof in accordance with this Agreement
to the Underwriters and the Sub-underwriter and the loss, liability,
claim, damage or expense of such Underwriter or the Sub-underwriter
resulted from an untrue statement or omission of a material fact
contained in or omitted from the U.S. Preliminary Prospectus or
Canadian Preliminary Prospectus which was corrected in the U.S.
Prospectus or Canadian Prospectus as, if applicable, amended or
supplemented and such U.S. Prospectus or Canadian Prospectus, as
applicable, was required by law to be delivered at or prior to the
written confirmation of sale to such person, and (ii) giving or sending
such U.S. Prospectus or Canadian Prospectus, as applicable, to the
party or parties asserting such loss, liability, claim, damage or
expense would have constituted a defense to the claim asserted by such
person.
This indemnity will be in addition to any liability that the Company
might otherwise have.
(b) Indemnification of Company, Directors and Officers. Each
Underwriter and the Sub-underwriter severally agrees to indemnify and hold
harmless the Company, its directors, each of its officers who signed the
Registration Statement or the Canadian Prospectus and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act against any and all loss, liability, claim, damage and
expense described in the indemnity contained in subsection (a) of this Section,
as incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment thereto), including the PREP Information, or any preliminary
prospectus or the U.S. Prospectus, the Canadian Prospectus or any Supplementary
Material (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
or the Sub-underwriter through Xxxxxxx Xxxxx or BMO NB expressly for use in the
Registration Statement (or any amendment thereto) or such preliminary prospectus
or the U.S. Prospectus, the Canadian Prospectus or any Supplementary Material
(or any amendment or supplement thereto).
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by Xxxxxxx Xxxxx and BMO
NB, and, in the case of parties indemnified pursuant to Section 6(b) above,
counsel to the indemnified parties shall be selected by the Company. An
indemnifying party may participate at its
28
own expense in the defense of any such action; provided, however, that counsel
to the indemnifying party shall not (except with the consent of the indemnified
party) also be counsel to the indemnified party. In no event shall the
indemnifying parties be liable for fees and expenses of more than one counsel
(in addition to any local counsel) separate from their own counsel for all
indemnified parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances. No indemnifying party shall, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any litigation, or any investigation
or proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever in respect of which indemnification or contribution could
be sought under this Section 6 or Section 7 hereof (whether or not the
indemnified parties are actual or potential parties thereto), unless such
settlement, compromise or consent (i) includes an unconditional release of each
indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
SECTION 7. Contribution. If the indemnification provided for in Section
6 hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Underwriters and the Sub-underwriter on the other hand from the
offering of the Securities pursuant to this Agreement or (ii) if the allocation
provided by clause (i) is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Company on the one hand and of the
Underwriters and the Sub-underwriter on the other hand in connection with the
statements or omissions which resulted in such losses, liabilities, claims,
damages or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the
Underwriters and the Sub-underwriter on the other hand in connection with the
offering of the Securities pursuant to this Agreement shall be deemed to be in
the same respective proportions as the total net proceeds from the offering of
the Securities pursuant to this Agreement (before deducting expenses) received
by the Company and the total underwriting commission received by the
Underwriters, in each case as set forth on the cover of the U.S. Prospectus,
bear to the aggregate initial public offering price of the Securities as set
forth on such cover.
29
The relative fault of the Company on the one hand and the Underwriters
and the Sub-underwriter on the other hand shall be determined by reference to,
among other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company or by the Underwriters and the
Sub-underwriter and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Underwriters and the Sub-underwriter agree that it
would not be just and equitable if contribution pursuant to this Section 7 were
determined by pro rata allocation (even if the Underwriters and the
Sub-underwriter were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to above in this Section 7. The aggregate amount of losses,
liabilities, claims, damages and expenses incurred by an indemnified party and
referred to above in this Section 7 shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in investigating,
preparing or defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue or alleged untrue statement or
omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter and no
Sub-underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter or the Sub-underwriter has otherwise been
required to pay by reason of any 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 0000 Xxx) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter or the Sub-underwriter within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act shall have the same rights to contribution as
such Underwriter or Sub-underwriter, and each director of the Company, each
officer of the Company who signed the Registration Statement or the Canadian
Prospectus, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same
rights to contribution as the Company. The Underwriters' respective obligations
to contribute pursuant to this Section 7 are several in proportion to the number
of Initial Securities set forth opposite their respective names in Schedule A
hereto and not joint. The Sub-underwriter's obligation to contribute pursuant to
this Section 7 is in proportion to the number of Initial Securities it purchased
from Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company or any of its
subsidiaries delivered pursuant hereto, shall remain operative and in full force
and effect, regardless of any investigation made by or on behalf of any
Underwriter, any Sub-
30
underwriter or controlling person, or by or on behalf of the Company, and shall
survive delivery of the Securities to the Underwriters and the Sub-underwriter.
SECTION 9. Termination of Agreement
(a) Termination; General. The Underwriters may terminate this
Agreement, by notice to the Company, at any time at or prior to Closing Time (i)
if there has been, since the time of execution of this Agreement or since the
respective dates as of which information is given in the U.S. Prospectus and the
Canadian Prospectus, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise or in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of North Star, whether or not arising in the ordinary course of
business, or (ii) if there has occurred any material adverse change in the
financial markets in the United States or Canada, or in the international
financial markets, any outbreak of hostilities or escalation thereof or other
calamity or crisis or any change or development involving a prospective change
in United States, Canadian or international political, financial or economic
conditions, in each case the effect of which is such as to make it, in the
judgment of the Underwriters impracticable or inadvisable to market the
Securities or to enforce contracts for the sale of the Securities, or (iii) if
trading in any securities of the Company has been suspended or materially
limited by the Commission, any Qualifying Authority, any other securities
commission or securities regulatory authority in Canada or the TSX or the NYSE,
or if trading generally on the NYSE, the TSX, or in the Nasdaq National Market
has been suspended or materially limited, or minimum or maximum prices for
trading have been fixed, or maximum ranges for prices have been required, by any
of said exchanges or by such system or by order of the Commission, any
Qualifying Authority, any other securities commission or securities regulatory
authority in Canada, the National Association of Securities Dealers, Inc. or any
other governmental authority, or a material disruption has occurred in
commercial banking or securities settlement or clearance services in the United
States or Canada, or (iv) if a banking moratorium has been declared by either
United States federal, New York state or Canadian federal authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6, 7 and 8 shall survive such termination and remain in full force and
effect.
SECTION 10. Default by One or More of the Underwriters. If one or more
of the Underwriters shall fail at Closing Time or a Date of Delivery to purchase
the Securities which it or they are obligated to purchase under this Agreement
(the "Defaulted Securities"), the Underwriters shall have the right, within 24
hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters or the Sub-underwriter, or any other underwriters, to purchase all,
but not less than all, of the Defaulted Securities in such amounts as may be
agreed upon and upon the terms herein set forth; if, however, the Underwriters
shall not have completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
number of Securities to be purchased hereunder, the non-defaulting Underwriters
or the Sub-underwriter shall
31
be obligated, each severally and not jointly, to purchase the full amount
thereof in the proportions that their respective underwriting obligations
hereunder bear to the underwriting obligations of all non-defaulting
Underwriters or the Sub-underwriter, or
(b) if the number of Defaulted Securities exceeds 10% of the number of
Securities to be purchased on such date, this Agreement or, with respect to any
Date of Delivery which occurs after Closing Time, the obligation of the
Underwriters to purchase and of the Company to sell the Option Securities to be
purchased and sold on such Date of Delivery, shall terminate without liability
on the part of any non-defaulting Underwriter or the Sub-underwriter.
No action taken pursuant to this Section 10 shall relieve any
defaulting Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement, or in the case of a Date of Delivery which is after the
Closing Time, which does not result in a termination of the obligation of the
Underwriters to purchase and the Company to sell the relevant Option Securities,
as the case may be, either the Underwriters or the Company shall have the right
to postpone the Closing Time or the relevant Date of Delivery, as the case may
be, for a period not exceeding seven days in order to effect any required
changes in the Registration Statement, the U.S. Prospectus or the Canadian
Prospectus or in any other documents or arrangements. As used herein, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 10.
SECTION 11. Agent for Service; Submission to Jurisdiction; Waiver of
Immunities. By the execution and delivery of this Agreement, the Company (i)
acknowledges that it has, by separate written instrument, irrevocably designated
and appointed Gerdau Ameristeel U.S. Inc. (or any successor) (together with any
successor, the "Agent for Service"), as its authorized agent upon which process
may be served in any suit or proceeding arising out of or relating to this
Agreement or the Securities, that may be instituted in any federal or state
court in the State of New York, or brought under federal or state securities
laws, and acknowledges that the Agent for Service has accepted such designation,
(ii) submits to the jurisdiction of any such court in any such suit or
proceeding, and (iii) agrees that service of process upon the Agent for Service
(or any successor) and written notice of said service to the Company (mailed or
delivered to its Chief Financial Officer at its principal office in Tampa,
Florida, United States), shall be deemed in every respect effective service of
process upon the Company in any such suit or proceeding. The Company further
agrees to take any and all action, including the execution and filing of any and
all such documents and instruments, as may be necessary to continue such
designation and appointment of the Agent for Service in full force and effect so
long as any of the Securities shall be outstanding.
To the extent that the Company has or hereafter may acquire any
immunity from jurisdiction of any court or from any legal process (whether
through service of notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) with respect to itself or its property, it
hereby irrevocably waives such immunity in respect of its obligations under the
above-referenced documents, to the extent permitted by law.
SECTION 12. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of
32
telecommunication. Notices to the Underwriters shall be directed to the
Underwriters, c/o Merrill Lynch, Pierce, Xxxxxx & Xxxxx Incorporated at Xxxxxxx
Xxxxx & Co., World Financial Center, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
attention of Xxxxxxxx Xxxxxx and BMO Xxxxxxx Xxxxx Inc., 1 First Canadian Place,
4th Floor, Toronto, Ontario, Canada M5X 1H3, attention of Xxxxxx Xxxxx; notices
to the Company shall be directed to it at 0000 X. Xxxxx Xxxxxx, Xxxxx 000,
Xxxxx, Xxxxxxx 00000, attention of Chief Financial Officer.
SECTION 13. Parties. This Agreement shall inure to the benefit of and
be binding upon the Underwriters, the Sub-underwriter, the Company and their
respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the Underwriters and the Sub-underwriter, the Company and their respective
successors and the controlling persons and officers and directors referred to in
Sections 6 and 7 and their heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. This Agreement and all conditions and provisions
hereof are intended to be for the sole and exclusive benefit of the Underwriters
and the Sub-underwriter, the Company and their respective successors, and said
controlling persons and officers and directors and their heirs and legal
representatives, and for the benefit of no other person, firm or corporation. No
purchaser of Securities from any Underwriter or the Sub-underwriter shall be
deemed to be a successor by reason merely of such purchase.
SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EXCEPT AS
OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 15. Effect of Headings. The Article and Section headings herein
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
SECTION 16. Judgment Currency. In respect of any judgment or order
given or made for any amount due hereunder that is expressed and paid in a
currency (the "Judgment Currency") other than United States or Canadian dollars,
the Company will indemnify each Underwriter against any loss incurred by such
Underwriter as a result of any variation as between (i) the rate of exchange at
which the United States or Canadian dollar amount is converted into the Judgment
Currency for the purpose of such judgment or order and (ii) the rate of exchange
at which an Underwriter is able to purchase United States or Canadian dollars
with the amount of Judgment Currency actually received by such Underwriter. The
foregoing indemnity shall constitute a separate and independent obligation of
the Company and shall continue in full force and effect notwithstanding any such
judgment or order as aforesaid. The term "rate of exchange" shall include any
premiums and costs of exchange payable in connection with the purchase of or
conversion into United States or Canadian dollars.
33
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
among the Underwriters, the Sub-underwriter and the Company in accordance with
its terms.
Very truly yours,
GERDAU AMERISTEEL CORPORATION
By:
------------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
BMO XXXXXXX XXXXX INC.
CIBC WORLD MARKETS INC.
X.X. XXXXXX SECURITIES INC.
XXXXXX XXXXXXX & CO. INCORPORATED
and
XXXXXXX XXXXX CANADA INC.
As Sub-underwriter
BY: XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By:
--------------------------------------------
Authorized Signatory
BY: BMO XXXXXXX XXXXX INC.
By:
--------------------------------------------
Authorized Signatory
SCHEDULE A
List of Underwriters
NUMBER OF
NAME OF UNDERWRITER INITIAL SECURITIES
-------------------------------------------------------------------------------- ------------------
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated..........................................
BMO Xxxxxxx Xxxxx Inc. ....................................................
CIBC World Markets Corp. ..................................................
X.X. Xxxxxx Securities Inc.................................................
Xxxxxx Xxxxxxx & Co. Incorporated..........................................
------------------
Total................................................................ 35,000,000
Sch A-1
SCHEDULE B
List of Significant Subsidiaries
Gerdau Ameristeel MRM Special Sections Inc.
GUSAP Partners
3038482 Nova Scotia Company
PASUG LLC
Gerdau USA Inc.
Gerdau Ameristeel US Inc.
Xxxxxx Bros. Corporation
MFT Acquisition, Corp.
1062316 Ontario Limited
Co-Steel Benefit Plans Inc.
1300554 Ontario Limited
1551533 Ontario Limited
Co-Steel C.S.M. Corp.
Gerdau Ameristeel Perth Amboy Inc.
Raritan River Urban Renewal Corporation
Gerdau Ameristeel Lake Ontario Inc.
Co-Steel Benefit Plans USA Inc.
Gerdau Ameristeel Sayreville Inc.
Sch B-1
SCHEDULE C
Pricing Information
Gerdau Ameristeel Corporation
35,000,000 Common Shares
(without par value)
1. The initial public offering price per share for the Securities,
determined as provided in Section 2, shall be Cdn$ per share for
Securities initially offered in Canada or US$ (based on the
equivalent of the Canadian dollar price per share based on the noon
buying rate in The City of New York for cable transfers in Canadian
dollars as certified for customs purposes by the Federal Reserve Bank
of New York (the "Noon Buying Rate") on the date hereof) for Securities
initially offered in the United States.
2. The purchase price per share for the Securities sold or expected to be
sold in Canada to be paid by the several Underwriters shall be Cdn$
being an amount equal to the initial public offering price set forth
above less Cdn$ per share, representing the underwriting commission
as set forth in paragraph 3 below; the purchase price per share for the
Securities sold or expected to be sold in the United States to be paid
by the several Underwriters shall be US$ , being an amount equal to
the initial offering price in the United States set forth above less
US$ per share, representing the underwriting commission as set forth
in paragraph 3 below (based on the equivalent of the corresponding
Canadian dollar amount based on the Noon Buying Rate on the date
hereof).
3. The underwriting commission per share payable for the Securities to be
paid by the Company shall be Cdn$ per share for Securities initially
offered in Canada or US$ (based on the equivalent of the Noon Buying
Rate on the date hereof) for Securities initially offered in the United
States.
Sch C-1
SCHEDULE D
List of Persons and Entities Subject to Lock-up
Xxxxx Xxxxxxx
Xxxxx X. Bins De Xxxxxxxxxxxx
Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxxxx
Xxxxx Xxxxxx Xxxxxxxxxxx
Xxxxxxxxx X. Xxxxxx Xxxxxxxxxxx
Xxxxx Xxxx Xxxxxxxxxxx
Xxx X. Xxxxx
J. Xxxxxxx Xxxxxxxx
Xxxxxxx Xxxxxxx
Xxxxxx Xxxxx
Xx. Xxxxxxx X. Xxxxx
Xxxxxx X.X. (and its affiliates that hold shares of the Company)
Sch D-1
EXHIBIT A
FORM OF OPINION OF COMPANY'S CANADIAN COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
1. Each of the Company and Gerdau Ameristeel MRM Special Sections Inc.,
3038482 Nova Scotia Company, 1062316 Ontario Limited, 1300554 Ontario
Limited and 1551533 Ontario Limited (the "Canadian Subsidiaries") has
been duly incorporated or amalgamated, as the case may be, and is
validly existing under the laws of its jurisdiction of incorporation or
amalgamation.
2. Each of the Company and the Canadian Subsidiaries has all necessary
corporate power and capacity to own, lease and operate its properties
and to conduct its business as described in the U.S. Prospectus and the
Canadian Prospectus.
3. The Company has all necessary corporate power and capacity to execute,
deliver and perform its obligations under each of the Purchase
Agreement and the Xxxxxx X.X. Subscription Agreement and each of the
Purchase Agreement and the Xxxxxx X.X. Subscription Agreement has been
duly authorized and, to the extent that execution and delivery are
matters governed by the laws of the Province of Ontario and the federal
laws of Canada applicable therein, has been duly executed and delivered
by the Company, and in the case of the Xxxxxx X.X. Subscription
Agreement, constitutes a valid and legally binding obligation of the
Company, enforceable against the Company in accordance with its terms.
4. All necessary corporate action has been taken by the Company to
authorize the issuance of the Securities on the terms and conditions of
the Purchase Agreement and, when such certificates are countersigned by
CIBC Mellon Trust Company and delivered against receipt by the Company
of full payment therefor, the Securities will be validly issued as
fully paid and non-assessable common shares in the capital of the
Company.
5. The authorized, issued and outstanding share capital of the Company is
as set forth in the U.S. Prospectus and the Canadian Prospectus under
the caption "Capitalization" under "Actual" (except for subsequent
issuances, if any, pursuant to the Purchase Agreement, the Xxxxxx X.X.
Subscription Agreement or pursuant to reservations, agreements or
employee benefit plans referred to in the U.S. Prospectus and the
Canadian Prospectus or pursuant to the exercise of convertible
securities or options referred to in the U.S. Prospectus and the
Canadian Prospectus). The statements in the U.S. Prospectus and the
Canadian Prospectus under the caption "Description of Share Capital"
are an accurate summary of the matters referred to therein in all
material respects. To the best of our knowledge, none of the
outstanding Common Shares have been issued in violation of the
pre-emptive rights of any shareholder of the Company.
6. All of the issued and outstanding capital stock of each Canadian
Subsidiary has been duly authorized and validly issued, is fully paid
and non-assessable and, to such counsel's
A-1
knowledge, is owned by the Company, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity, except
as provided by the Company's US$350,000,000 senior secured credit
facility with a syndicate of lenders dated as of June 20, 2003.
7. Such counsel's opinion in the U.S. Prospectus and the Canadian
Prospectus under the caption "Eligibility for Investment" is confirmed
as at the date of Closing. The statements in the U.S. Prospectus and
the Canadian Prospectus under the caption "Certain Tax Considerations
For U.S. Shareholders - Canadian Federal Income Tax Considerations" and
the statements in the Registration Statement under "Part II -
Information Not Required to Be Delivered to Offerees or Purchasers -
Indemnification" constitute accurate summaries of the matters described
therein in all material respects.
8. The form of share certificate representing the Common Shares has been
duly approved by the Company and complies with all applicable statutory
requirements, with any applicable requirements of the charter and
by-laws of the Company and with the provisions of the Business
Corporations Act (Ontario) relating thereto and the requirements of the
Toronto Stock Exchange and the New York Stock Exchange for share
certificates.
9. A final Mutual Reliance Review System Decision Document has been
obtained in respect of the Final PREP Prospectus from the Reviewing
Authority on behalf of the Qualifying Authorities and all necessary
documents have been filed, all requisite proceedings have been taken
and all other legal requirements have been fulfilled under the
securities laws of each of the Qualifying Jurisdictions to qualify the
distribution of the Securities to the public in each of the Qualifying
Jurisdictions through investment dealers or registrants registered, if
required, under applicable securities laws (including related and
applicable regulations, policies and rules) of the Qualifying
Jurisdictions who have complied with the applicable provisions of such
securities laws.
10. The Toronto Stock Exchange has conditionally approved the listing of
all of the Securities.
11. The Company is a "reporting issuer" or the equivalent under the
securities legislation of Ontario, Alberta, British Columbia, Manitoba,
Newfoundland, Nova Scotia, Quebec and Saskatchewan and is not on the
list of defaulting issuers maintained under such legislation, if any.
12. The execution, delivery and performance of the Purchase Agreement by
the Company and the consummation by the Company of the transactions
contemplated in the Purchase Agreement and the Registration Statement,
the U.S. Prospectus and the Canadian Prospectus (including the
authorization, issuance, sale and delivery of the Securities and the
use of proceeds as described in the U.S. Prospectus and the Canadian
Prospectus under the caption "Use of Proceeds") do not and will not
conflict with, result in a breach of or create a state of facts which,
whether with or without the giving of notice or lapse of time or both,
will result in a breach or violation of any of the terms, conditions or
provisions of or result in the creation or imposition of any lien,
charge, or encumbrance upon any property or assets of the Company or
any of its subsidiaries under (A) the articles of incorporation or
by-laws of the Company; (B) to such counsel's knowledge, any material
contract, indenture, mortgage, deed
A-2
of trust, loan or credit agreement, note, lease or any other agreement
or instrument to which the Company or any subsidiary is a party or by
which it or any of them may be bound, or to which any of the property
or assets of the Company or any subsidiary is subject (except for such
conflicts, breaches, defaults or liens, charges or encumbrances that
would not have a Material Adverse Effect); (C) any applicable Canadian
federal or Ontario statute or regulation; or (D) any judgment, order or
decree of any government, governmental, regulatory or administrative
agency, authority, commission or instrumentality or court having
jurisdiction over the Company or any of its properties, assets or
operations. No further consents, approvals, authorizations or orders of
any court, regulatory body or administrative agency or other
governmental agency or body, of Ontario or of Canada, other than those
that have been validly obtained and continue in effect, are required
for the Company's execution, delivery or performance of the Purchase
Agreement or the consummation of the transactions contemplated by the
Purchase Agreement.
13. To such counsel's knowledge, the Company is not in violation of its
articles of incorporation or by-laws and no default exists in the
performance or observance of any material obligation, agreement,
covenant or condition in any contract, indenture, loan agreement, note,
lease or other agreement or instrument to which the Company is a party.
14. The issuance of the Securities is not subject to pre-emptive or other
similar rights of any securityholder of the Company.
15. No order having the effect of ceasing or suspending the distribution of
the Securities or the trading in the Common Shares has been issued by
any securities regulatory authority in the Qualifying Jurisdictions and
no proceedings for that purpose have been instituted or are pending or
contemplated.
16. To such counsel's knowledge, there is not pending or threatened any
action, suit, proceeding, inquiry, or investigation, to which the
Company is a party, or to which the property of the Company is subject,
before or brought by any court or governmental agency or body, domestic
or foreign, which might reasonably be expected to result in a Material
Adverse Effect, or which might reasonably be expected to materially and
adversely affect the properties or assets of the Company or the
consummation of the transactions contemplated in the Purchase Agreement
or the performance by the Company of its obligations thereunder.
17. There are no persons with registration rights or other similar rights
to have any securities registered pursuant to the Registration
Statement or otherwise registered by the Company under the 1933 Act or
qualified for distribution under applicable Canadian provincial
securities laws.
18. The documents incorporated by reference in the Canadian Prospectus as
amended or supplemented (other than the financial statements and other
financial data included or incorporated or deemed to be incorporated
therein, as to which such counsel may express no opinion), when they
were filed with the Qualifying Authorities, appear on their face to
have been appropriately responsive in all material respects to the
requirements of the laws of each Qualifying Province.
19. The Canadian Prospectus and the Supplementary Material in connection
with the offering of
A-3
the Securities (including the PREP Information, but excluding the
financial statements and other financial data included or incorporated
therein or omitted therefrom, as to which such counsel may express no
opinion) appear on their face to be appropriately responsive in all
material respects to the requirements of the laws of each Qualifying
Province.
20. The Canadian Prospectus constitutes the entire disclosure document
required to offer and distribute the Securities in the Province of
Ontario; the exhibits to the Registration Statement include all reports
or information that in accordance with the requirements of Ontario law
are required to be made publicly available in connection with the
offers and distribution of the Securities in the Province of Ontario.
21. A court of competent jurisdiction in the Province of Ontario (an
"Ontario Court") would give effect to the choice of the law of the
State of New York ("New York law") as the law governing the Purchase
Agreement, provided that such choice of law is bona fide (in the sense
that it was not made with a view to avoiding the consequences of the
laws of any other jurisdiction) and provided that such choice of law is
not contrary to public policy, as that term is applied by an Ontario
Court ("Public Policy"). We have no reason to believe that the choice
of New York law to govern the Purchase Agreement (except as to
provisions in the Purchase Agreement providing for indemnity or
contribution, as to which no opinion is expressed) is not bona fide or
would be contrary to Public Policy.
22. In an action on a final and conclusive judgment in personam of any
federal or state court in the State of New York (a "New York Court")
that is not impeachable as void or voidable under New York law, an
Ontario Court would give effect to the appointment by the Company of
Gerdau Ameristeel U.S. Inc. as its agent to receive service of process
in the United States of America under the Purchase Agreement and to the
provisions in the Purchase Agreement whereby the Company submits to the
non-exclusive jurisdiction of a New York Court.
23. If the Purchase Agreement is sought to be enforced in the Province of
Ontario in accordance with the laws applicable thereto as chosen by the
parties, namely New York law, an Ontario Court would, subject to
paragraph 22 above, recognize the choice of New York law and, upon
appropriate evidence as to such law being adduced, apply such law with
respect to those matters which under the laws of the Province of
Ontario are to be determined by the proper law of the Purchase
Agreement (and in particular, but without limitation, not with respect
to matters of procedure), provided that none of the provisions of the
Purchase Agreement, or of applicable New York law, is contrary to
Public Policy and that those laws are not foreign revenue,
expropriatory or penal laws; provided, however, that, in matters of
procedure, the laws of the Province of Ontario will be applied, and an
Ontario Court will retain discretion to decline to hear such action if
it is contrary to Public Policy for it to do so, or if it is not the
proper forum to hear such an action, or if concurrent proceedings are
being brought elsewhere and an Ontario Court may not enforce an
obligation enforceable under New York law where performance of the
obligation would be illegal by the law of the place of performance.
24. The laws of the Province of Ontario and the laws of Canada applicable
therein permit an action to be brought in an Ontario Court on a final
and conclusive judgment in personam of a
A-4
New York Court that is subsisting and unsatisfied respecting the
enforcement of the Purchase Agreement that is not impeachable as void
or voidable under New York law for a sum certain if: (A) the court
rendering such judgment had jurisdiction, as determined under Ontario
Law, over the judgment debtor and the subject matter of the action; (B)
such judgment was not obtained by fraud or in a manner contrary to
natural justice and the enforcement thereof would not be inconsistent
with Public Policy or contrary to any order made by the
Attorney-General of Canada under the Foreign Extraterritorial Measures
Act (Canada) or the Competition Tribunal under the Competition Act
(Canada); (C) the enforcement of such judgment does not constitute,
directly or indirectly, the enforcement of foreign revenue,
expropriatory or penal laws; (D) the action to enforce such judgment is
commenced in compliance with the Limitations Act, 2002 (Ontario); (E)
in the case of a judgment obtained by default, there has been no
manifest error in the granting of such judgment; and (F) no new
admissible evidence, right or defence relevant to the action is
discovered prior to the rendering of judgment by an Ontario Court.
Under the Currency Act (Canada), an Ontario Court may only give
judgment in Canadian dollars.
25. As of the Closing Time, all laws of the Province of Quebec relating to
the use of the French language (other than those relating to verbal
communications, in respect of which we express no opinion) will have
been complied with in connection with the offering and sale of the
Securities to purchasers in the Province of Quebec if such purchasers
receive copies of the French and English language versions of the
Canadian Prospectus and forms of order and confirmation in the French
language or a bilingual form or copies of the French language version
of the Canadian Prospectus and forms of order and confirmation in the
French language only or, in the case of individuals so requesting in
writing, copies of the English language version of the Canadian
Prospectus and forms of order and confirmation in the English language
or in a bilingual form.
26. No stamp or other issuance or transfer taxes or duties or withholding
taxes are payable by or on behalf of the Underwriters to the Government
of Canada or the Government of Ontario or any political subdivision
thereof or any authority or agency thereof or therein having power to
tax in connection with (A) the issue, sale and delivery of the
Securities by the Company to or for the respective accounts of the
Underwriters or (B) the sale and delivery outside Canada by the
Underwriters of the Securities in the manner contemplated in the
Purchase Agreement.
27. Such counsel have participated in the preparation of the Registration
Statement, the U.S. Prospectus and the Canadian Prospectus and in
telephone conferences with officers and other representatives of the
Company, representatives of the independent chartered accountants for
the Company, and representatives of the Underwriters, at which the
contents of the Registration Statement, the U.S. Prospectus and the
Canadian Prospectus, and related matters were discussed and, although
such counsel are not passing upon and do not assume any responsibility
for the accuracy, completeness or fairness of the statements contained
in the Registration Statement, the U.S. Prospectus and the Canadian
Prospectus except as set forth in paragraphs 5 and 7, on the basis of
the foregoing no information has come to such counsel's attention that
causes them to believe that, (A) the Registration Statement (except for
the financial statements and other financial data included or
incorporated therein or omitted therefrom, and except for the
statements included in the following captions: "PROSPECTUS SUMMARY -
Acquisition of North Star"; "RISK FACTORS - Risks
A-5
Related to our Business and Industry - Our proposed acquisition of and
integration with North Star may not be successful and may reduce our
profitability," and "- Environmental and occupational health and safety
laws and regulations affect us and compliance may be costly and reduce
profitability," and "- We may not be able to successfully renegotiate
collective bargaining agreements when they expire and our financial
results may be adversely affected by labor disruptions"; "BUSINESS -
Competitive Strengths - Leading Market Position," and "--Scope for
Future Operational Improvement"; and "NORTH STAR ACQUISITION" (the
"North Star Portions") regarding North Star, as to which such counsel
need express no belief), at the time the Registration Statement became
effective under the 1933 Act, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or
(B) the U.S. Prospectus and the Canadian Prospectus as amended or
supplemented prior to the Closing Time (except for the financial
statements and other financial data included or incorporated therein or
omitted therefrom, and except for the statements included in the North
Star Portions regarding North Star, as to which such counsel need
express no belief), as of the date of the U.S. Prospectus and the
Canadian Prospectus or the date hereof contained or contains an untrue
statement of a material fact or omitted or omits to state a material
fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
A-6
EXHIBIT B
FORM OF OPINION OF COMPANY'S U.S. COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
1. Each of GUSAP Partners, Gerdau USA Inc., Gerdau Ameristeel Perth Amboy
Inc., Gerdau Ameristeel Sayreville Inc., Gerdau Ameristeel U.S. Inc.,
Xxxxxx Bros. Corporation, MFT Acquisition Corp., Gerdau Ameristeel Lake
Ontario Inc., PASUG LLC and Raritan River Urban Renewal Corporation
(the "U.S. Subsidiaries") has been duly incorporated or amalgamated, as
the case may be, and is validly existing under the laws of its
jurisdiction of incorporation or amalgamation.
2. Each of the U.S. Subsidiaries has all necessary corporate power and
capacity to own, lease and operate its properties and to conduct its
business as described in the U.S. Prospectus and the Canadian
Prospectus.
3. All of the issued and outstanding capital stock of each U.S. Subsidiary
has been duly authorized and validly issued, is fully paid and
non-assessable and, to such counsel's knowledge, is owned by the
Company, free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity, except as provided by the Company's
US$350,000,000 senior secured credit facility with a syndicate of
lenders dated as of June 20, 2003.
4. The Registration Statement is effective under the 1933 Act and the Form
F-X was filed with the Commission prior to the effectiveness of the
Registration Statement; any required filing of the U.S. Prospectus or
any supplement thereto pursuant to General Instruction II.L. of Form
F-10 has been made in the manner and within the time period required by
said General Instruction II.L.; and, to such counsel's knowledge, no
stop order suspending the effectiveness of the Registration Statement
has been issued and no proceedings for that purpose have been
instituted or are pending or threatened under the 1933 Act.
5. The Form F-X complies as to form in all material respects with the
applicable requirements of the 1933 Act and the 1933 Act Regulations.
6. Such counsel does not know of any amendment to the Registration
Statement required to be filed or of any contracts or documents of a
character required to be filed as an exhibit to the Registration
Statement or required to be described in the Registration Statement or
the U.S. Prospectus that are not filed or described, in each case as
required by the 1933 Act and the 1933 Act Regulations.
7. Registration under the 1933 Act is not required in connection with the
offer and sale of the Xxxxxx X.X. Securities to Gerdau Steel Inc.
pursuant to the Xxxxxx X.X. Subscription Agreement.
B-1
8. Assuming the due authorization, execution and delivery of the Purchase
Agreement under the laws of the Province of Ontario and the federal
laws of Canada applicable therein, the Purchase Agreement (to the
extent that execution and delivery are governed by the laws of the
State of New York) has been duly executed and delivered by the Company.
9. Assuming due execution and delivery of the Waiver and Release under the
laws of Brazil, the Waiver and Release has been duly executed and
delivered by Gerdau Steel Inc., to the extent such execution and
delivery are governed by the laws of the State of New York, and
constitutes a valid and legally binding instrument of Gerdau Steel
Inc., enforceable against Gerdau Steel Inc. in accordance with its
terms.
10. The statements made in the U.S. Prospectus under the heading "Certain
Tax Considerations for U.S. Shareholders -- United States Federal
Income Tax Considerations", insofar as they constitute matters of
United States federal income tax law and legal conclusions with respect
thereto, are accurate in all material respects.
11. To the knowledge of such counsel, there is not pending or threatened
any action, suit, proceeding, inquiry or investigation, to which the
Company or any subsidiary is a party, or to which the property of the
Company or any subsidiary is subject, before or brought by any court or
governmental agency or body, domestic or foreign, which might
reasonably be expected to result in a Material Adverse Effect, or which
might reasonably be expected to materially and adversely affect the
properties or assets thereof or the consummation of the transactions
contemplated in the Purchase Agreement or the performance by the
Company of its obligations thereunder.
12. To the knowledge of such counsel, there are no U.S. statutes or
regulations that are required to be described in the Registration
Statement that are not described as required, and the descriptions
thereof or references thereto are correct in all material respects.
13. No filing with, or authorization, approval, consent, license, order,
registration, qualification or decree of, any U.S. federal or New York
State court or governmental authority or agency (other than under the
1933 Act and the 1933 Act Regulations, which have been obtained, or as
may be required under the securities or blue sky laws of the various
states, as to which such counsel need not express any opinion) is
necessary or required in connection with the due authorization,
execution and delivery of the Purchase Agreement or for the offering,
issuance or sale of the Securities.
B-2
14. The execution, delivery and performance of the Purchase Agreement by
the Company and the consummation by the Company of the transactions
contemplated in the Purchase Agreement and in the Registration
Statement and the U.S. Prospectus (including the issuance and sale of
the Securities and the use of the proceeds from the sale of the
Securities as described in the U.S. Prospectus under the caption "Use
of Proceeds") do not and will not conflict with, result in a breach of
or create a state of facts which, whether with or without the giving of
notice or lapse of time or both, will result in a breach or violation
of any of the terms, conditions or provisions of or result in the
creation or imposition of any lien, charge, or encumbrance upon any
property or assets of the Company or any subsidiary pursuant to any
contract, indenture, mortgage, deed of trust, loan or credit agreement,
note, lease or any other agreement or instrument to which the Company
or any subsidiary is a party or by which it or any of them may be
bound, or to which any of the property or assets of the Company or any
subsidiary is subject (except for such conflicts, breaches or defaults
or liens, charges or encumbrances that would not have a Material
Adverse Effect), which is governed by New York State law, statute, rule
or regulation.
15. The execution, delivery and performance of the Purchase Agreement by
the Company and the consummation by the Company of the transactions
contemplated in the Purchase Agreement and compliance by the Company
with its obligations under the Purchase Agreement do not and will not
violate any applicable U.S. federal or New York State law, statute,
rule, regulation or, to such counsel's knowledge, any judgment, order
or decree of any federal or New York State government, governmental
regulatory or administrative agency, authority, commission or
instrumentality or court having jurisdiction over the Company or any of
its respective properties or assets.
16. The Company is not and after giving effect to the offering and sale of
the Securities and the application of the proceeds thereof as described
in the U.S. Prospectus, will not be an "investment company" or an
entity "controlled" by an "investment company", as such terms are
defined in the 1940 Act.
17. Under the laws of the State of New York relating to submission of
personal jurisdiction, the Company has, pursuant to Section 11 of the
Purchase Agreement, validly (i) submitted to the non-exclusive
jurisdiction of any federal or state court in the City, County and
State of New York, in any action based on or under the Purchase
Agreement, and (ii) appointed Gerdau Ameristeel U.S. Inc. as its
authorized agent for purposes described in Section 11 of the Purchase
Agreement.
18. The New York Stock Exchange has approved the listing of the Common
Shares, including the Securities, subject to notice of issuance.
19. Such counsel have participated in the preparation of the Registration
Statement and the U.S. Prospectus and in telephone conferences with
officers and other representatives of the Company, representatives of
the independent chartered accountants for the Company, and
representatives of the Underwriters, at which the contents of the
Registration Statement and the U.S. Prospectus, and related matters
were discussed and, although such counsel are not passing upon and do
not assume any responsibility for the accuracy, completeness or
fairness
B-3
of the statements contained in the Registration Statement and the U.S.
Prospectus except as set forth in paragraph 11 above, on the basis of
the foregoing (i) in their opinion, the Registration Statement and the
U.S. Prospectus (other than the financial statements and other
financial data contained therein or omitted therefrom, as to which such
counsel need express no opinion), as of their respective effective or
issue dates appear on their face to comply as to form in all material
respects with the requirements of the 1933 Act and the applicable rules
and regulations of the SEC thereunder; and (ii) no information has come
to such counsel's attention that causes them to believe that, (A) the
Registration Statement (except for the financial statements and other
financial data included or incorporated therein or omitted therefrom,
and except for the statements included in the following captions:
"PROSPECTUS SUMMARY - Acquisition of North Star"; "RISK FACTORS - Risks
Related to our Business and Industry - Our proposed acquisition of and
integration with North Star may not be successful and may reduce our
profitability," and "- Environmental and occupational health and safety
laws and regulations affect us and compliance may be costly and reduce
profitability," and "- We may not be able to successfully renegotiate
collective bargaining agreements when they expire and our financial
results may be adversely affected by labor disruptions"; "BUSINESS -
Competitive Strengths - Leading Market Position," and "--Scope for
Future Operational Improvement"; and "NORTH STAR ACQUISITION" (the
"North Star Portions") regarding North Star, as to which such counsel
need express no belief), at the time the Registration Statement became
effective under the 1933 Act, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or
(B) the U.S. Prospectus as amended or supplemented prior to the Closing
Time (except for the financial statements and other financial data
included or incorporated therein or omitted therefrom, and except for
the statements included in the North Star Portions regarding North
Star, as to which such counsel need express no belief), as of the date
of the U.S. Prospectus or the date hereof contained or contains an
untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
B-4
EXHIBIT C
FORM OF OPINION OF COMPANY'S ACQUISITION COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(c)
1. Such counsel have participated in the preparation and negotiation of
the Asset Purchase Agreement and related documentation with respect to
the Acquisition, and have reviewed the information set forth in the
Registration Statement and the U.S. Prospectus under the following
captions: "PROSPECTUS SUMMARY - Recent Developments"; "RISK FACTORS -
Risks Related to our Business and Industry - Our proposed acquisition
of and integration with Northstar may not be successful and may reduce
our profitability," and "- Environmental and occupational health and
safety laws and regulations affect us and compliance may be costly and
reduce profitability," and "- We may not be able to successfully
renegotiate collective bargaining agreements when they expire and our
financial results may be adversely affected by labor disruptions";
"BUSINESS - Competitive Strengths - Leading Market Position," and
"--Scope for Future Operational Improvement"; and "NORTHSTAR
ACQUISITION" (collectively, the "Northstar Portion"); although such
counsel are not passing upon and do not assume any responsibility for
the accuracy, completeness or fairness of the statements contained in
the Registration Statement and the U.S. Prospectus, on the basis of the
foregoing, no information has come to such counsel's attention that
causes them to believe that, with respect solely to the statements
regarding Northstar contained in the Northstar Portion, (A) the
Registration Statement (except for the financial statements and other
financial data included or incorporated therein or omitted therefrom,
as to which such counsel need express no belief), at the time the
Registration Statement became effective under the 1933 Act, contained
an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements
made therein not misleading, or (B) the U.S. Prospectus as amended or
supplemented prior to the Closing Time (except for the financial
statements and other financial data included or incorporated therein or
omitted therefrom, as to which such counsel need express no belief), as
of the date of the U.S. Prospectus or the date hereof contained or
contains an untrue statement of a material fact or omitted or omits to
state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading.
2. Each of the Asset Purchase Agreements constitutes a valid and legally
binding agreement of the Company, enforceable against the Company in
accordance with its terms.
C-1
EXHIBIT D
FORM OF LOCK-UP LETTER
_______________, 2004
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
BMO XXXXXXX XXXXX INC.
CIBC WORLD MARKETS INC.
X.X. XXXXXX SECURITIES INC.
XXXXXX XXXXXXX & CO. INCORPORATED
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
World Financial Center, North Tower
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
The undersigned shareholder, director or senior officer of
Gerdau Ameristeel Corporation, a company incorporated under the Business
Corporations Act (Ontario) (the "Company"), understands that a Purchase
Agreement (the "Purchase Agreement") will be executed by the Company, and
Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated and BMO
Xxxxxxx Xxxxx Inc., who are acting as representatives of the other Underwriters
and the Sub-underwriter named in Schedule A to the Purchase Agreement (the
"Underwriters"), providing for the public offering (the "Offering") of
35,000,000 common shares of the Company ("Common Shares") in the United States
pursuant to the Company's registration statement on Form F-10 (File No.
333-119539), as amended or supplemented, and in each of the provinces and
territories of Canada pursuant to the Company's preliminary short form
prospectus dated October 4, 2004, as completed, amended or supplemented.
This Lock-Up Letter Agreement is being entered into in
accordance with Section 5(j) of the Purchase Agreement at the request of the
Underwriters and the Sub-underwriter.
For good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the undersigned agrees with each
Underwriter and the Sub-underwriter that, without the prior written consent of
Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated and BMO
Xxxxxxx Xxxxx Inc., on behalf of the Underwriters and the Sub-underwriter, the
undersigned will not, directly or indirectly, (i) offer, pledge, sell (including
any sale pursuant to Rule 144 under the Securities Act of 1933, as amended),
contract to sell, sell any
D-1
option or contract to purchase, purchase any option or contract to sell,
announce any intention to sell, grant any option, right or warrant for the sale
of, or otherwise dispose of or transfer any Common Shares (including, without
limitation, Common Shares which may be deemed to be beneficially owned by such
shareholder in accordance with the rules and regulations of the Securities and
Exchange Commission or the securities legislation of any province or territory
of Canada and Common Shares which may be issued upon exercise of any option or
warrant) or any securities convertible into or exchangeable or exercisable for
Common Shares, whether now owned or hereafter acquired by the undersigned or
with respect to which the undersigned has or hereafter acquires the power of
disposition, or file a registration statement or prospectus with respect to any
of the foregoing or (ii) enter into any swap or any other agreement or any
transaction that transfers, in whole or in part, directly or indirectly, the
economic consequence of ownership of the Common Shares, whether any such swap or
transaction is to be settled by delivery of Common Shares or other securities,
in cash or otherwise, for a period commencing the date of the Purchase Agreement
and ending 90 days thereafter.
The undersigned understands that the Company and the
Underwriters and the Sub-underwriter will proceed with the Offering in reliance
on this Lock-Up Letter Agreement.
The undersigned hereby represents and warrants that the
undersigned has full power and authority to enter into this Lock-Up Letter
Agreement and that, upon request, the undersigned will execute any additional
documents necessary or desirable in connection with the enforcement hereof. Any
obligations of the undersigned shall be binding upon the successors and assigns
of the undersigned.
This Lock-Up Letter Agreement has been entered into on the
date first written above. If for any reason the Purchase Agreement shall be
terminated prior to the Closing Time (as defined in the Purchase Agreement), the
agreement set forth above shall likewise be terminated.
Very truly yours,
By:
--------------------------------
Name:
Title:
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