1
EXHIBIT 10.1
METAL MANAGEMENT, INC.
10% SENIOR SUBORDINATED NOTES DUE 2008
PURCHASE AGREEMENT
May 8, 1998
Xxxxxxx, Xxxxx & Co.
BT Alex. Xxxxx Incorporated
Salomon Brothers Inc
c/o Goldman, Xxxxx & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Metal Management, Inc., a Delaware corporation (the "Company"), proposes,
subject to the terms and conditions stated herein, to issue and sell to the
Purchasers named in Schedule I hereto (the "Purchasers") an aggregate of
$180,000,000 principal amount of its 10% Senior Subordinated Notes due 2008 (the
"Securities"). The Securities and the Exchange Securities (as defined below)
will be fully and unconditionally guaranteed (the "Guarantees") on an unsecured,
senior subordinated basis, jointly and severally, by the Company's current
Restricted Subsidiaries (as defined in the within-mentioned Indenture) and
certain of the Company's future Restricted Subsidiaries (each a "Guarantor,"
and, collectively, the "Guarantors"), as shall be set forth more fully in the
Indenture.
1. Each of the Company and each of the Guarantors represents and warrants
to, and agrees with, each of the Purchasers that:
(a) A preliminary offering circular, dated April 24, 1998 (the
"Preliminary Offering Circular") and an offering circular, dated May 8,
1998 (the "Offering Circular"), in each case including the international
supplement thereto which is attached to and made a part of the Preliminary
Offering Circular and the Offering Circular, have been prepared in
connection with the offering of the Securities. Any reference to the
Preliminary Offering Circular or the Offering Circular shall be deemed to
refer to and include any Additional Issuer Information (as defined in
Section 5(f)) furnished by the Company prior to the completion of the
initial distribution of the Securities. The Preliminary Offering Circular
or the Offering Circular and any amendments or supplements thereto did not
and will not, as of their respective dates, contain 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; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in reliance
upon and in conformity with information furnished in writing to the Company
and the Guarantors by a Purchaser through Xxxxxxx, Sachs & Co. expressly
for use therein;
(b) Neither the Company nor any of its subsidiaries has sustained
since the date of the latest audited financial statements of the Company
included in the Offering Circular any material loss or interference with
its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated in the
Offering Circular; and, since the
2
respective dates as of which information is given in the Offering Circular,
there has not been any change in the capital stock or long-term debt of the
Company or any of its subsidiaries or any material adverse change, or any
development involving a prospective material adverse change, in or
affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries taken as a whole (a "Material Adverse Effect"), in each case
otherwise than as set forth or contemplated in the Offering Circular;
(c) The Company and its subsidiaries have good title in fee simple to
all real property and good title to all personal property owned by them, in
each case free and clear of all liens, encumbrances and defects, except
such liens, encumbrances or defects that, individually or in the aggregate,
have not resulted and could not reasonably be expected to result in a
Material Adverse Effect; and any real property and buildings held under
lease by the Company and its subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as do not materially
interfere with the use made and proposed to be made of such property and
buildings by the Company and its subsidiaries;
(d) The Company has been duly incorporated and each of the Company and
each of its subsidiaries is validly existing as a corporation, limited
partnership or limited liability company, as the case may be, in good
standing under the laws of its jurisdiction of incorporation or
organization, as the case may be, with power and authority (corporate and
other) to own its properties and conduct its business as described in the
Offering Circular, and has been duly qualified as a foreign corporation,
limited partnership or limited liability company, as the case may be, for
the transaction of business and is in good standing under the laws of each
other jurisdiction in which its ownership or leasing of properties or
conduct of business requires such qualification, or is subject to no
liabilities or disabilities by reason of the failure to be so qualified in
any such jurisdiction that, individually or in the aggregate, have resulted
or could reasonably be expected to result in a Material Adverse Effect;
(e) The Company had an authorized capitalization as of December 31,
1997 as set forth in the Offering Circular, and all of the issued shares of
capital stock of the Company have been duly and validly authorized and
issued and are fully paid and non-assessable; all of the issued shares of
capital stock of each corporate subsidiary of the Company have been duly
and validly authorized and issued, are fully paid and non-assessable and
are owned directly or indirectly by the Company, free and clear of all
liens, encumbrances, equities or claims, except for those shares pledged
under the Senior Credit Facility (as defined in the Offering Circular) and
other liens, encumbrances, equities or claims that, individually or in the
aggregate, have not resulted or could not reasonably be expected to result
in a Material Adverse Effect;
(f) The Securities have been duly authorized and, when issued and
delivered pursuant to this Agreement, will have been duly executed,
authenticated, issued and delivered and will constitute valid and legally
binding obligations of the Company entitled to the benefits provided by the
indenture to be dated the date on which the Time of Delivery (as defined
below) occurs (the "Indenture") among the Company, the Guarantors and
LaSalle National Bank, as Trustee (the "Trustee"), under which they are to
be issued; the Exchange Securities have been duly authorized and, when
issued and delivered pursuant to the Registration Rights Agreement (as
defined below), will be duly executed, authenticated, issued and delivered
and will constitute valid and legally binding obligations of the Company
entitled to the benefits provided by the Indenture; the Indenture has been
duly authorized and, when executed and delivered by the Company, the
Guarantors and the Trustee, will constitute a valid and legally binding
instrument, enforceable against the Company and the Guarantors in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability relating
to or affecting creditors' rights and to general equity principles; the
Guarantees of the Securities have been duly authorized by each of the
Guarantors and, when executed and delivered in accordance with the terms of
the Indenture and when the Securities have been
2
3
issued, delivered and paid for pursuant to the terms of this Agreement,
will constitute valid and legally binding instruments, enforceable against
the Guarantors 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 to general
equity principles; the Guarantees of the Exchange Securities have been duly
authorized by each of the Guarantors and, when executed and delivered
pursuant to the Registration Rights Agreement, will constitute valid and
legally binding instruments, enforceable against the Guarantors 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 to general equity principles; and the
Securities, the Indenture and the Guarantees will conform in all material
respects to the descriptions thereof in the Offering Circular;
(g) The Senior Credit Facility has been duly authorized, executed and
delivered by the Company and the Guarantors party thereto and constitutes a
valid and legally binding instrument, enforceable against the Company and
such Guarantors in accordance with its terms, subject, as to enforcement,
to bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to general
equity principles; and the Registration Rights Agreement has been duly
authorized and, when executed and delivered by the Company, the Guarantors
and the other parties thereto, will constitute a valid and legally binding
instrument, enforceable against the Company and the Guarantors in
accordance with its terms (other than the provisions of Section 8 thereof
insofar as such provisions may be unenforceable as against the policy of
the United States Securities and Exchange Commission (the "Commission")),
subject, as to enforcement, to bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or affecting creditors'
rights and to general equity principles;
(h) None of the transactions contemplated by this Agreement
(including, without limitation, the use of the proceeds from the sale of
the Securities) will violate or result in a violation of Section 7 of the
United States Securities Exchange Act of 1934, as amended (the "Exchange
Act"), or Regulations G, T, U and X of the Board of Governors of the
Federal Reserve System promulgated thereunder;
(i) The issuance and sale of the Securities, the issuance of the
Guarantees, the compliance by the Company with all of the provisions of the
Securities, the Indenture, the Registration Rights Agreement and this
Agreement, the compliance by the Guarantors with all of the provisions of
the Guarantees, the Indenture, the Registration Rights Agreement and this
Agreement and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound or to which any of
the property or assets of the Company or any of its subsidiaries is
subject, other than conflicts, breaches, violations or defaults that,
individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect, nor will such action result in any
violation of the provisions of the charter, by-laws or other similar
organizational or governing document of the Company or any of its
subsidiaries or any statute or any order, rule or regulation of any court
or governmental agency or body having jurisdiction over the Company or any
of its subsidiaries or any of their properties other than violations that,
individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect; and no consent, approval,
authorization, order, registration or qualification of or with any such
court or governmental agency or body is required for the issuance and sale
of the Securities, the issuance of the Guarantees or the consummation by
the Company or any Guarantor of the transactions contemplated by this
Agreement, the Registration Rights Agreement or the Indenture, except as
may be required in connection with the transactions contemplated by the
Registration Rights Agreement and except for such consents,
3
4
approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection with the
purchase and distribution of the Securities by the Purchasers;
(j) Neither the Company nor any of its subsidiaries is in violation of
its respective charter, by-laws or other similar organizational or
governing document or in default in the performance or observance of any
material obligation, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement, lease or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which any of them is bound, or to which any of the property or assets of
the Company or any of its subsidiaries is subject, other than defaults
that, individually or in the aggregate, have not resulted and could not
reasonably be expected to result in a Material Adverse Effect;
(k) The statements set forth in the Offering Circular under the
caption "Description of the Notes," insofar as they purport to constitute a
summary of the terms of the Securities, the Guarantees, the Indenture, the
Exchange Securities and the Registration Rights Agreement and under the
captions "Management," "Certain Relationships and Related Transactions,"
"Certain United States Federal Tax Consequences" and "Description of the
Senior Credit Facility," insofar as they purport to describe the matters
referred to therein, are accurate and complete in all material respects;
(l) Other than proceedings that are set forth in the Offering
Circular, there are no legal or governmental proceedings pending to which
the Company or any of its subsidiaries is a party or of which any property
of the Company or any of its subsidiaries is the subject which, if
determined adversely to the Company or any of its subsidiaries, could
reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect; and, to the best of the Company's knowledge, no
such proceedings are threatened or contemplated by governmental authorities
or threatened by others;
(m) When the Securities are issued and delivered pursuant to this
Agreement, the Securities will not be of the same class (within the meaning
of Rule 144A under the Securities Act) as securities that are listed on a
national securities exchange registered under Section 6 of the Exchange Act
or quoted in a U.S. automated inter-dealer quotation system;
(n) The Company is subject to Section 13 or 15(d) of the Exchange Act;
(o) Other than as described in the Offering Circular, each of the
Company and its subsidiaries is (i) in compliance with any and all
applicable foreign, federal, state and local laws and regulations relating
to the protection of human health and safety, the environment or hazardous
or toxic substances or wastes, pollutants or contaminants ("Environmental
Laws"), (ii) has received all permits, licenses or other approvals required
of it under applicable Environmental Laws to conduct its business and (iii)
is in compliance with all material terms and conditions of any such permit,
license or approval, in each case, other than matters that, individually or
in the aggregate, have not resulted and could not reasonably be expected to
result in a Material Adverse Effect;
(p) (i) Each of the Company and its subsidiaries has all certificates,
consents, exemptions, orders, permits, licenses, authorizations or other
approvals (each, an "Authorization") of and from, and has made all
declarations and filings with, all Federal, state, local and other
governmental authorities, all self-regulatory organizations and all courts
and other tribunals, necessary or required to own, lease, license and use
its properties and assets and to conduct its business in the manner
described in the Offering Circular, and all such Authorizations are in full
force and effect, and (ii) the Company and its subsidiaries are in
compliance with the terms and conditions of all such Authorizations and
with the rules and regulations of the regulatory authorities and governing
bodies having jurisdiction with respect thereto, in each case, other
4
5
than matters that, individually or in the aggregate, have not resulted or
could not reasonably be expected to result in a Material Adverse Effect;
(q) Except as contemplated by the Registration Rights Agreement, no
holder of any security of the Company has or will have any right to require
the registration of such security by virtue of any transaction contemplated
by this Agreement;
(r) Except as disclosed in the Offering Circular, there are no
business relationships or related party transactions that would be required
to be disclosed therein by Item 404 of Regulation S-K of the Commission and
each business relationship or related party transaction described therein
is a fair and accurate description of the relationships and transactions so
described;
(s) Except as disclosed in the Offering Circular, there is (i) no
material unfair labor practice complaint pending against the Company or any
Guarantor, or, to the best knowledge of the Company, threatened against any
of them, before the National Labor Relations Board or any state or local
labor relations board, and no material grievance or material arbitration
proceeding arising out of or under any collective bargaining agreement is
so pending against the Company or any Guarantor, or, to the best knowledge
of the Company, threatened against any of them; (ii) no material strike,
labor dispute, slowdown or stoppage pending against the Company or any
Guarantor nor, to the best knowledge of the Company, threatened against the
Company or any Guarantor; and (iii) to the best knowledge of the Company,
no union organizing activities are taking place;
(t) Neither the Company nor any of the Guarantors is, or after giving
effect to the offer and sale of the Securities will be, an "investment
company," or an entity "controlled" by an "investment company," as such
terms are defined in the United States Investment Company Act of 1940, as
amended (the "Investment Company Act");
(u) Neither the Company, any affiliate of the Company nor any person
acting on its or their behalf has offered or sold the Securities by means
of any general solicitation or general advertising within the meaning of
Rule 502(c) under the Securities Act or, with respect to Securities sold
outside the United States to non-U.S. persons (as defined in Rule 902 under
the Securities Act), by means of any directed selling efforts within the
meaning of Rule 902 under the Securities Act, and the Company, any
affiliate of the Company and any person acting on its or their behalf has
complied with and will implement the "offering restriction" within the
meaning of such Rule 902, provided, that for purposes of this paragraph
(u), the representations and warranties of the Purchasers in Section 3 and
Annex I are assumed to be true and correct;
(v) Within the preceding six months, none of the Company, the
Guarantors or any other person acting on behalf of the Company or any
Guarantor has offered or sold to any person any Securities, or any
securities of the same or a similar class as the Securities, other than the
Securities offered or sold to the Purchasers hereunder. The Company and the
Guarantors will take reasonable precautions designed to insure that any
offer or sale, direct or indirect, in the United States or to any U.S.
person of any Securities or any security substantially similar thereto
issued by the Company or any Guarantor, within six months subsequent to the
date on which the distribution of the Securities has been completed (as
notified to the Company by Xxxxxxx, Xxxxx & Co.), is made under
restrictions and other circumstances reasonably designed not to affect the
status of the offer and sale of the Securities (the "Offering") in the
United States and to U.S. persons contemplated by this Agreement as
transactions exempt from the registration provisions of the Securities Act;
(w) Neither the Company nor any of its affiliates does business with
the government of Cuba or with any person or affiliate located in Cuba
within the meaning of Section 517.075, Florida Statutes; and
5
6
(x) The firms of public accountants that have certified any financial
statements in the Preliminary Offering Circular or the Offering Circular
are independent public accountants as defined in the rules and regulations
of the Commission under the Securities Act;
2. Subject to the terms and conditions herein set forth, the Company agrees
to issue and sell to each of the Purchasers, and each of the Purchasers agrees,
severally and not jointly, to purchase from the Company, at a purchase price of
97% of the principal amount thereof, plus accrued interest, if any, from May 13,
1998 to the Time of Delivery, the principal amount of Securities set forth
opposite the name of such Purchaser in Schedule I hereto. Subject to the terms
and conditions herein set forth, each of the Guarantors agrees to issue its
Guarantee of the Securities.
3. Upon the authorization by you of the release of the Securities, the
several Purchasers propose to offer the Securities for sale upon the terms and
conditions set forth in this Agreement and the Offering Circular and each
Purchaser hereby represents and warrants to, and agrees with the Company and the
Guarantors that:
(a) It will offer and sell the Securities only: (i) to persons who it
reasonably believes are "qualified institutional buyers" ("QIBs") within
the meaning of Rule 144A under the Securities Act in transactions meeting
the requirements of Rule 144A or (ii) upon the terms and conditions set
forth in Annex I to this Agreement;
(b) It is an "accredited investor" within the meaning of Rule 501
under the Securities Act; and
(c) It will not offer or sell the Securities by any form of general
solicitation or general advertising, including but not limited to the
methods described in Rule 502(c) under the Securities Act.
4. (a) The Securities to be purchased by each Purchaser hereunder will be
represented by one or more definitive global Securities in book-entry form,
which will be deposited by or on behalf of the Company with The Depository Trust
Company ("DTC") or its designated custodian. The Company will deliver the
Securities to Xxxxxxx, Sachs & Co., for the account of each Purchaser, against
payment by or on behalf of such Purchaser of the purchase price therefor by wire
transfer to the account of the Company designated by the Company reasonably in
advance of the Time of Delivery in Federal (same day) funds by causing DTC to
credit the Securities to the account of Xxxxxxx, Xxxxx & Co. at DTC. The Company
will cause the global certificates representing the Securities to be made
available to Xxxxxxx, Sachs & Co. for checking at least twenty-four hours prior
to the Time of Delivery at the office of DTC or its designated custodian (the
"Designated Office"). The time and date of such delivery and payment shall be
8:30 a.m., Chicago time, on May 13, 1998 or such other time and date as Xxxxxxx,
Xxxxx & Co. and the Company may agree upon in writing. Such time and date are
herein called the "Time of Delivery."
(b) The documents to be delivered at the Time of Delivery by or on behalf
of the parties hereto pursuant to Section 7 hereof, including the cross-receipt
for the Securities and any additional documents requested by the Purchasers
pursuant to Section 7(n) hereof, will be delivered at such time and date at the
offices of Xxxxx, Xxxxx & Xxxxx (the "Closing Location"), and the Securities
will be delivered at the Designated Office, all at the Time of Delivery.
5. The Company and the Guarantors agree with each of the Purchasers as
follows:
(a) To prepare the Offering Circular in a form approved by you; to
make no amendment or any supplement to the Offering Circular which shall be
disapproved by you promptly after reasonable notice thereof; and to furnish
you with copies thereof;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Securities for offering and sale under
the securities laws of such jurisdictions as you may request and to comply
with such laws so as to permit the continuance of sales and dealings
therein in such jurisdictions for as long as may be necessary to complete
the
6
7
distribution of the Securities, provided that in connection therewith the
Company shall not be required to qualify as a foreign corporation or to
file a general consent to service of process in any jurisdiction;
(c) To furnish the Purchasers with four copies of the Offering
Circular and each amendment or supplement thereto, with signed copies of
each report of independent accountants in the Offering Circular, and any
amendment or supplement containing amendments to the financial statements
covered by such reports, and additional copies thereof in such quantities
as you may from time to time reasonably request; and if, at any time prior
to the earlier of the effectiveness of any registration statement required
to be filed pursuant to Section 4 of the Registration Rights Agreement or
the expiration of six months after the date of the Offering Circular, any
event shall have occurred as a result of which the Offering Circular as
then amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made when such Offering Circular is delivered, not misleading, or, if
for any other reason it shall be necessary or desirable during such same
period to amend or supplement the Offering Circular, to notify you and upon
your request to prepare and furnish without charge to each Purchaser and to
any dealer in securities as many copies as you may from time to time
reasonably request of an amended Offering Circular or a supplement to the
Offering Circular that will correct such statement or omission or effect
such compliance;
(d) During the period beginning from the date hereof and continuing
until the date that is 60 days after the date of the Offering Circular, not
to offer, sell, contract to sell or otherwise dispose of, except as
provided hereunder or under the Registration Rights Agreement, any
securities of the Company that are substantially similar to the Securities
or the Exchange Securities, or any securities of the Company convertible
into or exchangeable for, or that otherwise represent a right to acquire,
securities of the Company substantially similar to the Securities or the
Exchange Securities;
(e) Not to be or become, at any time prior to the expiration of three
years after the Time of Delivery, an open-end investment company, unit
investment trust, closed-end investment company or face-amount certificate
company that is or is required to be registered under Section 8 of the
Investment Company Act;
(f) At any time when the Company is not subject to Section 13 or 15(d)
of the Exchange Act, for the benefit of holders from time to time of
Securities, to furnish at its expense, upon request, to holders of
Securities and prospective purchasers of Securities information (the
"Additional Issuer Information") satisfying the requirements of subsection
(d)(4)(i) of Rule 144A under the Securities Act;
(g) To use its best efforts to cause the Securities to be eligible for
the PORTAL trading system of the National Association of Securities
Dealers, Inc.;
(h) During a period of three years from the date of the Offering
Circular, to furnish to you copies of such information concerning the
business and financial condition of the Company as you may from time to
time reasonably request (including, if the Company is not subject to the
reporting requirements of the Exchange Act, (i) as soon as practicable
after the end of each fiscal year, an annual report (including a balance
sheet and statements of operations, stockholders' equity and cash flows of
the Company and its consolidated subsidiaries certified by independent
public accountants), (ii) as soon as practicable after the end of each of
the first three quarters of each fiscal year (beginning with the fiscal
quarter ending after the date the Company is not subject to the reporting
requirements of the Exchange Act), consolidated summary financial
information of the Company and its subsidiaries for such quarter in
reasonable detail and (iii) during the period of five years from the date
of the Offering Circular,
7
8
copies of all reports or other communications (financial or other)
furnished to stockholders of the Company);
(i) During the period of two years after the Time of Delivery, the
Company will not, and will not permit any of its "affiliates" (as defined
in Rule 144 under the Securities Act) to, resell any of the Securities that
constitute "restricted securities" under Rule 144 that have been reacquired
by any of them;
(j) To comply with the provisions of the Registration Rights
Agreement; and
(k) To use the net proceeds received by it from the sale of the
Securities pursuant to this Agreement in the manner specified in the
Offering Circular under the caption "Use of Proceeds."
6. The Company and the Guarantors covenant and agree with the several
Purchasers that the Company and the Guarantors will pay or cause to be paid the
following: (i) the fees, disbursements and expenses of the Company's and the
Guarantors' counsel and accountants in connection with the issue of the
Securities and all other expenses in connection with the preparation, printing
and filing of the Preliminary Offering Circular and the Offering Circular and
any amendments and supplements thereto and the mailing and delivering of copies
thereof to the Purchasers and dealers; (ii) the cost of printing or producing
this Agreement, the Indenture and the Blue Sky Memorandum, closing documents
(including any compilations thereof) and any other documents in connection with
the offering, purchase, sale and delivery of the Securities; (iii) all expenses
in connection with the qualification of the Securities for offering and sale
under state securities laws as provided in Section 5(b) hereof, including the
fees and disbursements of counsel for the Purchasers in connection with such
qualification and in connection with Blue Sky surveys; (iv) any fees charged by
securities rating services for rating the Securities; (v) the cost of preparing
the Securities; (vi) the fees and expenses of the Trustee and any agent of the
Trustee and the fees and disbursements of counsel for the Trustee in connection
with the Indenture and the Securities; (vii) any cost incurred in connection
with the designation of the Securities for trading on the PORTAL market; and
(viii) all other costs and expenses incident to the performance of its
obligations hereunder that are not otherwise specifically provided for in this
Section. It is understood, however, that, except as provided in this Section,
and Sections 8 and 11 hereof, the Purchasers will pay all of their own costs and
expenses, including the fees, disbursements and expenses of their counsel,
transfer taxes on resale of any of the Securities by them, and any advertising
expenses connected with any offers they may make.
7. The obligations of the Purchasers hereunder shall be subject, in their
discretion, to the condition that all representations and warranties and other
statements of the Company and the Guarantors herein are, at and as of the Time
of Delivery, true and correct, the condition that the Company and the Guarantors
shall have performed all of their respective obligations hereunder theretofore
to be performed, and the following additional conditions:
(a) Sidley & Austin, counsel for the Purchasers, shall have furnished
to you such opinion or opinions, dated the Time of Delivery, with respect
to certain matters covered in paragraphs (i), (iv), (v), (vi), (vii),
(viii), (ix), (xi), (xiv), (xv) and (xvi) of subsection (b) below as well
as such other related matters as you may reasonably request, and such
counsel shall have received such papers and information as they may
reasonably request to enable them to pass upon such matters;
(b) Xxxxx, Xxxxx & Xxxxx, counsel for the Company, shall have
furnished to you their written opinion, dated the Time of Delivery, in form
and substance satisfactory to you, to the effect that:
(i) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of
Delaware, with power and authority
8
9
(corporate and other) to own its properties and conduct its business as
described in the Offering Circular;
(ii) The Company has an authorized capitalization as set forth in
the Offering Circular;
(iii) The Company has been duly qualified as a foreign corporation
for the transaction of business and is in good standing under the laws
of the jurisdictions listed in a schedule to such opinion, such
jurisdictions being those certified by the Company in which it owns or
leases properties or conducts business so as to require such
qualification, except for jurisdictions as to which the failure to be so
qualified, individually or in the aggregate, have not resulted or could
not reasonably be expected to result in a Material Adverse Effect
(provided that such counsel shall state that they believe that both you
and they are justified in relying upon such certificate);
(iv) This Agreement has been duly authorized, executed and
delivered by the Company;
(v) The Securities have been duly authorized, executed,
authenticated, issued and delivered and constitute valid and legally
binding obligations of the Company, and the holders thereof will be
entitled to the benefits provided by the Indenture; and the Securities
conform in all material respects to the descriptions thereof in the
Offering Circular;
(vi) The Indenture has been duly authorized, executed and delivered
by the Company and the Guarantors and, assuming the due authorization,
execution and delivery thereof by the other parties thereto, constitutes
a valid and legally binding instrument, enforceable against the Company
and the Guarantors in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditors' rights and to
general equity principles; and the Indenture conforms in all material
respects to the descriptions thereof in the Offering Circular;
(vii) The Exchange Securities have been duly authorized and, when
authenticated, issued and delivered pursuant to the Registration Rights
Agreement and the Indenture, will have been duly executed,
authenticated, issued and delivered and will constitute valid and
legally binding obligations of the Company entitled to the benefits
provided by the Indenture;
(viii) The Guarantees of the Securities have been duly authorized,
executed and delivered by each of the Guarantors and constitute valid
and legally binding instruments, enforceable against the Guarantors 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 to general equity
principles; and the Guarantees of the Securities conform in all material
respects to the descriptions thereof in the Offering Circular;
(ix) The Guarantees of the Exchange Securities have been duly
authorized and, when executed and delivered by each of the Guarantors
pursuant to the Registration Rights Agreement and the Indenture, will
constitute valid and legally binding instruments, enforceable against
the Guarantors 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 to
general equity principles;
(x) The Senior Credit Facility has been duly authorized, executed
and delivered by the Company and the Guarantors and constitutes a valid
and legally binding instrument, enforceable against the Company and the
Guarantors in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to general
equity principles; and the
9
10
Senior Credit Facility conforms in all material respects to the
descriptions thereof in the Offering Circular;
(xi) The Registration Rights Agreement has been duly authorized,
executed and delivered by the Company and the Guarantors and, assuming
the due authorization, execution and delivery thereof by the other
parties thereto, constitutes a valid and legally binding instrument,
enforceable against the Company and the Guarantors in accordance with
its terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles; and the
Registration Rights Agreement conforms in all material respects to the
descriptions thereof in the Offering Circular;
(xii) The issuance and sale of the Securities, the issuance of the
Guarantees, the compliance by the Company with all of the provisions of
the Securities, the Indenture, the Registration Rights Agreement and
this Agreement, the compliance by the Guarantors with all of the
provisions of the Guarantees, the Indenture, the Registration Rights
Agreement and this Agreement and the consummation of the transactions
herein and therein contemplated will not violate, result in a breach or
violation of or create a default under any of the terms or provisions of
any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument listed on an attachment to such opinion, which
constitute all of the agreements or instruments made available to such
counsel by the Company in response to such counsel's request for copies
of agreements or other instruments to which the Company or any of its
subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject that are material to the
Company and its subsidiaries taken as a whole (provided that such
counsel shall state that they believe that both you and they are
justified in relying on such inquiry), nor will such actions result in
any violation of the provisions of the charter or by-laws of the Company
or any Federal, Illinois or New York statute or any order, rule or
regulation known to such counsel of any court or governmental agency or
body having jurisdiction over the Company or any of its subsidiaries or
any of their properties;
(xiii) No consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body
is required for the issuance and sale of the Securities, the issuance of
the Guarantees or the consummation by the Company or any Guarantor of
the transactions contemplated by this Agreement, the Registration Rights
Agreement or the Indenture, except as may be required in connection with
the transactions contemplated by the Registration Rights Agreement and
such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky
laws in connection with the purchase and distribution of the Securities
by the Purchasers;
(xiv) The statements set forth in the Offering Circular under the
caption "Description of the Notes," insofar as they purport to
constitute a summary of the terms of the Securities, the Guarantees, any
Exchange Securities and the Registration Rights Agreement and under the
captions "Management," "Certain Relationships and Related Transactions,"
"Certain United States Tax Consequences" and "Description of the Senior
Credit Facility," insofar as they purport to describe the provisions of
the legal or contractual matters referred to therein, are accurate in
all material respects;
(xv) No registration of the Securities or the Guarantees under the
Securities Act, and no qualification of an indenture under the United
States Trust Indenture Act of 1939 with respect thereto, is required for
the offer, sale and initial resale of the Securities and the Guarantees
by the Purchasers in the manner contemplated by this Agreement,
provided,
10
11
that for purposes of this clause (xv), counsel may assume the
representations and warranties of the Purchasers in Section 3 and Annex
I are true and correct;
(xvi) Nothing has come to our attention that has led us to believe
that the Offering Circular and any further amendments or supplements
thereto made by the Company prior to the Time of Delivery (other than
the financial data therein, including the financial statements and
related footnotes and schedules, as to which such counsel need express
no opinion) contained as of the date of the Offering Circular or
contains as of the Time of Delivery an untrue statement of a material
fact or omitted or omits, as the case may be, to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and
(xvii) Neither the Company nor any of the Guarantors is, or after
giving effect to the offer and sale of the Securities will be, an
"investment company," or an entity "controlled" by an "investment
company," as such terms are defined in the Investment Company Act;
(c) Xxxxxxx & Xxxxxxxx Ltd., counsel for the Company, shall have
furnished to you their written opinion, dated the Time of Delivery, in form
and substance satisfactory to you, to the effect that:
(i) All of the issued shares of capital stock of the Company have
been duly and validly authorized and issued and are fully paid and
non-assessable;
(ii) Each subsidiary of the Company is validly existing as a
corporation, limited partnership or limited liability company, as the
case may be, in good standing under the laws of its jurisdiction of
incorporation or organization, as the case may be; and all of the issued
shares of capital stock of each corporate subsidiary have been duly and
validly authorized and issued, are fully paid and non-assessable and are
owned directly or indirectly by the Company, free and clear of all
liens, encumbrances, equities or claims, except for those shares pledged
under the Senior Credit Facility (such counsel being entitled to rely in
respect of the opinion in this clause upon opinions of local counsel and
in respect of matters of fact upon certificates of officers of the
Company or its subsidiaries, provided that such counsel shall state that
they believe that both you and they are justified in relying upon such
opinions and certificates); and
(iii) To the best of such counsel's knowledge and other than as set
forth in the Offering Circular, there are no legal or governmental
proceedings pending to which the Company or any of its subsidiaries is a
party or of which any property of the Company or any of its subsidiaries
is the subject which, if determined adversely to the Company or any of
its subsidiaries, could reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect; and, to the best of such
counsel's knowledge, no such proceedings are threatened or contemplated
by governmental authorities or threatened by others;
(d) On the date of the Offering Circular prior to the execution of
this Agreement and also at the Time of Delivery, Price Waterhouse LLP shall
have furnished to you a letter or letters, dated the respective dates of
delivery thereof, in form and substance satisfactory to you; and, on the
date of the Offering Circular prior to the execution of this Agreement,
each of the independent accountants whose report(s) on the audited
financial statements of any of the Guarantors that are included in the
Offering Circular shall have furnished to you a letter, dated the date of
delivery thereof, in form and substance satisfactory to you, to the extent
relevant to the financial statements covered by such report(s);
(e) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the Offering Circular any loss or interference
with its business from fire, explosion, flood or other calamity, whether or
not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Offering Circular, and (ii) since the respective dates
as of which information is given in the
11
12
Offering Circular there shall not have been any change in the capital stock
or long-term debt of the Company or any of its subsidiaries or any change,
or any development involving a prospective change, in or affecting the
general affairs, management, financial position, stockholders' equity or
results of operations of the Company and its subsidiaries, otherwise than
as set forth or contemplated in the Offering Circular, the effect of which,
in any such case described in clause (i) or (ii), is in the judgment of
Xxxxxxx, Xxxxx & Co., after consultation with the Company, so material and
adverse as to make it impracticable or inadvisable to proceed with the
offering or the delivery of the Securities on the terms and in the manner
contemplated in this Agreement and in the Offering Circular;
(f) On or after the date hereof (i) no downgrading shall have occurred
in the rating accorded the Company's debt securities by any "nationally
recognized statistical rating organization", as that term is defined by the
Commission for purposes of Rule 436(g)(2) under the Securities Act, and
(ii) no such organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its rating of
any of the Company's debt securities;
(g) On or after the date hereof there shall not have occurred any of
the following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange or on the Nasdaq
National Market; (ii) a suspension or material limitation in trading in the
Company's securities on the Nasdaq National Market; (iii) a general
moratorium on commercial banking activities declared by either Federal or
New York or Illinois state authorities; (iv) the outbreak or escalation of
hostilities involving the United States or the declaration by the United
States of a national emergency or war, if the effect of any such event
specified in this clause (iv) in the judgment of Xxxxxxx, Sachs & Co.,
after consultation with the Company, makes it impracticable or inadvisable
to proceed with the offering or the delivery of the Securities on the terms
and in the manner contemplated in the Offering Circular; (v) the occurrence
of any material adverse change in the existing financial, political or
economic conditions in the United States or elsewhere that, in the judgment
of Xxxxxxx, Xxxxx & Co., after consultation with the Company, would
materially and adversely affect the financial markets or the markets for
the Securities and other debt securities;
(h) The Securities shall have been designated for trading on PORTAL;
(i) The Company and the Guarantors shall have furnished or caused to
be furnished to you at the Time of Delivery certificates of officers of the
Company and the Guarantors reasonably satisfactory to you as to the
accuracy of the representations and warranties of the Company and the
Guarantors herein at and as of such Time of Delivery, as to the performance
by the Company and the Guarantors of all of their respective obligations
hereunder to be performed at or prior to such Time of Delivery, as to the
matters set forth in the first paragraph of this Section 7 and in
subsections (e) and (f) of this Section 7 and as to such other matters as
you may reasonably request;
(j) The Company, the Guarantors and the Trustee shall have entered
into the Indenture and the Purchasers shall have received counterparts,
conformed as executed, thereof;
(k) The Company, the Guarantors and the Purchasers shall have entered
into the Registration Rights Agreement dated as of the date on which the
Time of Delivery occurs (the "Registration Rights Agreement") and the
Purchasers shall have received counterparts, conformed as executed,
thereof;
(l) There shall exist at and as of the Time of Delivery no conditions
that would constitute a default (or an event that with notice or the lapse
of time, or both, would constitute a default) under the Senior Credit
Facility;
(m) The creditors of the Company who are being repaid with the net
proceeds of the Offering as described in the Offering Circular under "Use
of Proceeds" (other than in respect of
12
13
the Senior Credit Facility) shall have delivered canceled notes (or other
evidence of repayment satisfactory to the Purchasers) to the Company in
connection with the Company's repayment of the related indebtedness and the
Company shall have delivered copies of such notes (or such other evidence)
to the Purchasers; and
(n) Prior to the Time of Delivery, the Company and the Guarantors
shall have furnished to the Purchasers such further information,
certificates and documents as the Purchasers may reasonably request.
8. (a) The Company and the Guarantors will, jointly and severally,
indemnify and hold harmless each Purchaser against any losses, claims, damages
or liabilities, joint or several, to which it may become subject, under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Offering Circular or the Offering Circular, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact necessary to make the statements
therein not misleading, and will reimburse each Purchaser for any legal or other
expenses reasonably incurred by it in connection with investigating or defending
any such action or claim as such expenses are incurred; provided, however, that
neither the Company nor any of the Guarantors shall be liable in any such case
to the extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in the Preliminary Offering Circular or the Offering
Circular or any such amendment or supplement in reliance upon and in conformity
with written information furnished to the Company or any of the Guarantors by or
on behalf of any Purchaser through Xxxxxxx, Sachs & Co. expressly for inclusion
in the Preliminary Offering Circular or the Offering Circular.
(b) Each Purchaser will, severally and not jointly, indemnify and hold
harmless the Company and the Guarantors against any losses, claims, damages or
liabilities to which the Company or any of the Guarantors may become subject,
under the Securities Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Offering Circular or the Offering Circular, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in the Preliminary Offering Circular or the Offering Circular
or any such amendment or supplement in reliance upon and in conformity with
written information furnished to the Company by or on behalf of such Purchaser
expressly for inclusion in the Preliminary Offering Circular or the Offering
Circular and will reimburse the Company and the Guarantors for any legal or
other expenses reasonably incurred by the Company or the Guarantors in
connection with investigating or defending any such action or claim as such
expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case
13
14
subsequently incurred by such indemnified party in connection with the defense
thereof (other than reasonable costs of investigation) unless (i) the
indemnifying party has agreed to pay such fees and expenses, (ii) the
indemnifying party shall have failed to employ counsel reasonably satisfactory
to the indemnified party in a timely manner or (iii) the indemnified party shall
have been advised by counsel that there are actual or potential conflicting
interests between the indemnifying party and the indemnified party, including
situations in which there are one or more legal defenses available to the
indemnified party that are different from or additional to those available to
the indemnifying party, provided, however, that the indemnifying party shall
not, in connection with any one such action or proceeding or separate but
substantially similar actions or proceedings arising out of the same general
allegations, be liable for the fees and expenses of more than one separate firm
of attorneys at any time for all indemnified parties, except to the extent that
local counsel, in addition to its regular counsel, is required in order to
effectively defend against such action or proceeding. No indemnifying party
shall, without the written consent of the indemnified party, effect the
settlement or compromise of, or consent to the entry of any judgment with
respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder, unless such settlement,
compromise or judgment (i) includes an unconditional release of the indemnified
party from all liability arising out of such action 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) If the indemnification provided for in this Section 8 is unavailable to
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative benefits received
by the Company and the Guarantors on the one hand and the Purchasers on the
other from the offering of the Securities. If, however, the allocation provided
by the immediately preceding sentence is not permitted by applicable law or if
the indemnified party failed to give the notice required under subsection (c)
above, then each indemnifying party shall contribute to such amount paid or
payable by such indemnified party in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Company and the Guarantors on the one hand and Purchasers on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Company and the Guarantors on the one hand and Purchasers on the other shall be
deemed to be in the same proportion as the total net proceeds from the offering
of the Securities (before deducting expenses) received by the Company bear to
the total underwriting discounts and commissions received by the Purchasers, in
each case as set forth in the Offering Circular. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company and the
Guarantors on the one hand or the Purchasers on the other and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company, the Guarantors and the
Purchasers agree that it would not be just and equitable if contribution
pursuant to this subsection (d) were determined by pro rata allocation (even if
the Purchasers 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 subsection (d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this subsection (d), no Purchaser
shall be required to contribute any amount in excess of the amount by which the
total underwriting discounts and commissions in respect of the Securities
exceeds the amount of any damages which such Purchaser has otherwise been
required to pay by reason of such untrue or
14
15
alleged untrue statement or omission or alleged omission. The Purchasers'
obligations in this subsection (d) to contribute are several in proportion to
their respective underwriting obligations and not joint.
(e) The obligations of the Company and the Guarantors under this Section 8
shall be in addition to any liability which the Company and the Guarantors may
otherwise have and shall extend, upon the same terms and conditions, to each
person, if any, who controls any Purchaser within the meaning of the Securities
Act; and the obligations of the Purchasers under this Section 8 shall be in
addition to any liability which the respective Purchaser may otherwise have and
shall extend, upon the same terms and conditions, to each officer and director
of the Company and the Guarantors and to each person, if any, who controls the
Company and the Guarantors within the meaning of the Securities Act.
9. (a) If any Purchaser shall default in its obligation to purchase the
Securities which it has agreed to purchase hereunder, you may in your discretion
arrange for you or another party or other parties to purchase such Securities on
the terms contained herein. If within thirty-six hours after such default by any
Purchaser you do not arrange for the purchase of such Securities, then the
Company shall be entitled to a further period of thirty-six hours within which
to procure another party or other parties satisfactory to you to purchase such
Securities on such terms. In the event that, within the respective prescribed
periods, you notify the Company that you have so arranged for the purchase of
such Securities, or the Company notifies you that it has so arranged for the
purchase of such Securities, you or the Company shall have the right to postpone
the Time of Delivery for a period of not more than ten days, in order to effect
whatever changes may thereby be made necessary in the Offering Circular, or in
any other documents or arrangements, and the Company agrees to prepare promptly
any amendments to the Offering Circular which in your opinion may thereby be
made necessary. The term "Purchaser" as used in this Agreement shall include any
person substituted under this Section with like effect as if such person had
originally been a party to this Agreement with respect to such Securities.
(b) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Purchaser or Purchasers by you and the Company as
provided in subsection (a) above, the aggregate principal amount of such
Securities which remains unpurchased does not exceed one-eleventh of the
aggregate principal amount of all the Securities, then the Company shall have
the right to require each non-defaulting Purchaser to purchase the principal
amount of Securities which such Purchaser agreed to purchase hereunder and, in
addition, to require each non-defaulting Purchaser to purchase its pro rata
share (based on the principal amount of Securities which such Purchaser agreed
to purchase hereunder) of the Securities of such defaulting Purchaser or
Purchasers for which such arrangements have not been made; but nothing herein
shall relieve a defaulting Purchaser from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Purchaser or Purchasers by you and the Company as
provided in subsection (a) above, the aggregate principal amount of Securities
which remains unpurchased exceeds one-eleventh of the aggregate principal amount
of all the Securities, or if the Company shall not exercise the right described
in subsection (b) above to require non-defaulting Purchasers to purchase
Securities of a defaulting Purchaser or Purchasers, then this Agreement shall
thereupon terminate, without liability on the part of any non-defaulting
Purchaser, the Company or any Guarantor, except for the expenses to be borne by
the Company and the Purchasers as provided in Section 6 hereof and the indemnity
and contribution agreements in Section 8 hereof; but nothing herein shall
relieve a defaulting Purchaser from liability for its default.
10. The respective indemnities, agreements, representations, warranties and
other statements of the Company and the Guarantors and the Purchasers, as set
forth in this Agreement or made by or on behalf of them, respectively, pursuant
to this Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of
15
16
any Purchaser or any controlling person of any Purchaser, or the Company or any
Guarantor or any officer or director or controlling person of the Company or any
Guarantor, and shall survive delivery of and payment for the Securities.
11. If this Agreement shall be terminated pursuant to Section 9 hereof, the
Company and the Guarantors shall not then be under any liability to any
Purchaser, except as provided in Sections 6 and 8 hereof; but if for any other
reason the Securities are not delivered by or on behalf of the Company and the
Guarantors as provided herein, the Company and the Guarantors will reimburse the
Purchasers for all out-of-pocket expenses, including fees and disbursements of
counsel, reasonably incurred by the Purchasers in making preparations for the
purchase, sale and delivery of the Securities, but the Company and the
Guarantors shall then be under no further liability to any Purchaser, except as
provided in Sections 6 and 8 hereof.
12. All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Purchasers shall be delivered or sent by mail, telex or
facsimile transmission to Xxxxxxx, Xxxxx & Co., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: Registration Department; and if to the Company or the
Guarantors shall be delivered or sent by mail, telex or facsimile transmission
to the address of the Company or the Guarantor, as the case may be, set forth in
the Offering Circular, Attention: Chief Executive Officer and General Counsel,
provided, however, that any notice to a Purchaser pursuant to Section 8(c)
hereof shall be delivered or sent by mail, telex or facsimile transmission to
such Purchaser at its address set forth in its Purchasers' Questionnaire, or
telex constituting such Questionnaire, which address will be supplied to the
Company by the Purchasers upon request. Any such statements, requests, notices
or agreements shall take effect upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the benefit
of, the Purchasers, the Company, the Guarantors and, to the extent provided in
Sections 8 and 10 hereof, the officers and directors of the Company and the
Guarantors and each person who controls the Company, any of the Guarantors or
any Purchaser, and their respective heirs, executors, administrators, successors
and assigns, and no other person shall acquire or have any right under or by
virtue of this Agreement. No purchaser of any of the Securities from any
Purchaser shall be deemed a successor or assign by reason merely of such
purchase.
14. Time shall be of the essence of this Agreement.
15. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
16. This Agreement may be executed by any one or more of the parties hereto
in any number of counterparts, each of which shall be deemed to be an original,
but all such respective counterparts shall together constitute one and the same
instrument.
16
17
If the foregoing is in accordance with your understanding, please sign and
return to us counterparts hereof, and upon the acceptance hereof, this letter
and such acceptance hereof shall constitute a binding agreement between each of
the Purchasers, the Company and the Guarantors. It is understood that your
acceptance of this letter on behalf of each of the Purchasers is pursuant to the
authority set forth in a form of Agreement among Purchasers, the form of which
shall be submitted to the Company for examination upon request.
Very truly yours,
METAL MANAGEMENT, INC.
By: /s/ XXXXX X. XXXXXXXXX
-----------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President
AEROSPACE METALS, INC.
AMERICAN SCRAP PROCESSING, INC.
BRIQUETTING CORPORATION OF AMERICA
C. SHREDDING CORP.
CALIFORNIA METALS RECYCLING, INC.
CIM TRUCKING, INC.
COMETCO CORP.
XXXXX BUILDING CORPORATION
XXXXX IRON & METAL, INC.
EMCO TRADING, INC.
FERREX TRADING CORPORATION
FIRMA, INC.
FIRMA PLASTIC CO., INC.
HOUSTON COMPRESSED STEEL CORP.
HOUTEX METALS COMPANY, INC.
THE XXXXX CORPORATION
X. XXXXXX IRON & METAL, INC.
KANKAKEE SCRAP CORPORATION
XXXXXXX METALS CO.
METAL MANAGEMENT ARIZONA, INC.
METAL MANAGEMENT REALTY, INC.
138 SCRAP ACQUISITION CORP.
PAULDING RECYCLING, INC.
PROLER SOUTHWEST INC.
PROLER STEELWORKS L.L.C.
SALT RIVER RECYCLING, L.L.C.
SCRAP PROCESSING, INC.
SUPERIOR FORGE, INC.
TROJAN TRADING CO.
USA SOUTHWESTERN CARRIER, INC.
By: /s/ XXXXX X. XXXXXXXXX
-----------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President
17
18
RESERVE IRON & METAL LIMITED PARTNERSHIP
By: X. XXXXXX IRON & METAL, INC.,
its general partner
By: /s/ XXXXX X. XXXXXXXXX
-------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President
Accepted as of the date hereof:
XXXXXXX, SACHS & CO.
BT ALEX. XXXXX INCORPORATED
SALOMON BROTHERS INC
By: /s/ XXXXXXX, XXXXX & CO.
---------------------------------
(Xxxxxxx, Sachs & Co.)
18
