EXHIBIT 10(i)c
COMMERCIAL METALS COMPANY
5.625% SENIOR NOTES DUE NOVEMBER 6, 2013
PURCHASE AGREEMENT
November 6, 2003
Goldman, Sachs & Co.,
Banc of America Securities LLC
Tokyo-Mitsubishi International plc
ABN AMRO Incorporated
As representatives of the several Purchasers
named in Schedule I hereto,
c/o Goldman, Sachs & Co.
85 Broad Street,
New York, New York 10004.
Ladies and Gentlemen:
Commercial Metals Company, 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
$200,000,000 principal amount of the 5.625% Senior Notes due November 15, 2013
specified above (the "Securities"). The Securities will be issued pursuant to
the Indenture, dated as of July 31, 1995 (the "Original Indenture"), as it has
been amended and supplemented from time to time and will be further supplemented
as of the Time of Delivery (as defined in Section 4(a) hereof) by the
Supplemental Indenture (the "Supplemental Indenture," and, together with the
Original Indenture as so amended and supplemented, the "Indenture"), by and
between the Company and JPMorgan Chase Bank (formerly The Chase Manhattan Bank,
N.A.), as trustee (the "Trustee").
Holders of the Securities (including the Purchasers and their direct
and indirect transferees) will be entitled to the benefits of a Registration
Rights Agreement (the "Registration Rights Agreement"), the form of which is
contained in Annex I hereof, pursuant to which the Company will agree, among
other things, to file with the Securities and Exchange Commission (the
"Commission") (i) a registration statement (the "Exchange Offer Registration
Statement") under the Securities Act of 1933, as amended (the "Securities Act"),
covering the issuance of a series of the Company's debt securities substantially
identical in all respects to the Securities except that such debt securities
will
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not be subject to transfer restrictions under the Securities Act (the "Exchange
Securities") and the offer to exchange such Exchange Securities for the
Securities (the "Exchange Offer") and (ii) under certain circumstances described
therein, a shelf registration statement pursuant to Rule 415 under the
Securities Act (the "Shelf Registration Statement"; and, together with the
Exchange Offer Registration Statement, the "Registration Statements"), and, in
each case, to use its reasonable best efforts to cause the Registration
Statements to be declared effective within the time periods specified therein.
1. The Company represents and warrants to, and agrees with, each
of the Purchasers that:
(a) A preliminary offering circular, dated November 6, 2003 (the
"Preliminary Offering Circular") and an offering circular, dated November 6,
2003 (the "Offering Circular") have been prepared in connection with the
offering of the Securities. The Company's Annual Report on Form 10-K for the
fiscal year ended August 31, 2002, as amended by the Annual Report on Form
10-K/A filed with the Commission on October 31, 2003, Quarterly Report on Form
10-Q for the quarter ended November 30, 2002, as amended by the Quarterly Report
on Form 10-Q/A filed with the Commission on October 31, 2003, Quarterly Report
on Form 10-Q for the quarter ended February 28, 2003, as amended by the
Quarterly Report on Form 10-Q/A filed with the Commission on October 31, 2003,
Quarterly Report on Form 10-Q for the quarter ended May 31, 2003, as amended by
the Quarterly Report on Form 10-Q/A filed with the Commission on October 31,
2003, Current Report on Form 8-K, dated July 22, 2003, the Current Report on
Form 8-K, dated October 14, 2003, and the Current Report on Form 8-K, dated
October 31, 2003 have been incorporated by reference in the Offering Circular.
Any reference to the Preliminary Offering Circular or the Offering Circular
shall be deemed to refer to and include the Company's most recent Annual Report
on Form 10-K, as amended by the Annual Report on Form 10-K/A and all subsequent
documents filed with the Commission pursuant to Section 13(a), 13(c) or 15(d) of
the United States Securities Exchange Act of 1934, as amended (the "Exchange
Act") on or prior to the date of the Preliminary Offering Circular or the
Offering Circular, as the case may be, and any reference to the Preliminary
Offering Circular or the Offering Circular, as the case may be, as amended or
supplemented, as of any specified date, shall be deemed to include (i) any
documents filed with the Commission pursuant to Section 13(a), 13(c) or 15(d) of
the Exchange Act after the date of the Preliminary Offering Circular or the
Offering Circular, as the case may be, and prior to such specified date and (ii)
any Additional Issuer Information (as defined in Section 5(f)) furnished by the
Company prior to the completion of the distribution of the Securities; and all
documents filed under the Exchange Act, in each case as amended, and so deemed
to be incorporated by reference in the Preliminary Offering Circular or the
Offering Circular, as the case may be, or any amendment or supplement thereto
are hereinafter called the "Exchange Act Reports". The Exchange Act Reports,
when they were or are filed with the Commission, conformed or will conform in
all material respects to the applicable requirements of the Exchange Act and the
applicable rules and regulations of the Commission thereunder. There are no
contracts or other documents that are required to be filed, disclosed or
incorporated by reference in the Exchange Act Reports by the Exchange Act or by
the rules and regulations thereunder that have not been so filed, described or
incorporated by reference by the Company. The Preliminary Offering Circular or
the Offering Circular and any amendments or supplements thereto and the Exchange
Act Reports 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
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and in conformity with information furnished in writing to the Company by a
Purchaser through Goldman, Sachs & Co. expressly for use therein;
(b) No "nationally recognized statistical rating organization" as
such term is defined for purposes of Rule 436(g)(2) under the Securities Act (i)
has imposed (or has informed the Company that it is considering imposing) any
condition (financial or otherwise) on the Company's retaining any rating
assigned to the Company or any securities of the Company or (ii) has indicated
to the Company that it is considering (a) the downgrading, suspension, or
withdrawal of, or any review for a possible change that does not indicate the
direction of the possible change in, any rating so assigned or (b) any change in
the outlook for any rating of the Company or any securities of the Company;
(c) The consolidated financial statements (including the related
notes and supporting schedules) included or incorporated by reference in the
Offering Circular present fairly in all material respects the financial
position, cash flows and results of operations of the Company and its
subsidiaries, at the dates and for the periods indicated, and have been prepared
in conformity with generally accepted accounting principles in the United States
applied on a consistent basis throughout the periods involved (except as noted
therein);
(d) Neither the Company nor any of its subsidiaries has sustained
since the date of the latest audited financial statements 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
respective dates as of which information is given in the Offering Circular,
there has not been any change in the capital stock (except pursuant to the
exercise of stock options authorized and issued at the date hereof and purchases
by employees of the Company pursuant to the Company's employee stock purchase
plan as existing on the date hereof) or material change in the long-term debt of
the Company or any of its subsidiaries except as contemplated in the Offering
Circular and the ISDA Master Agreement, dated April 4, 2002, and the
confirmation, dated April 8, 2002, from you to the Company and the ISDA Master
Agreement, dated April 8, 2002, and the confirmation from Bank of America N.A.
to the Company, dated April 9, 2002, as permitted by the Credit Agreement dated
as of August 8, 2003 among the Company and the lenders named therein (the
"Credit Agreement") 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, otherwise than as set forth or contemplated in
the Offering Circular;
(e) Each of the Company's Material Subsidiaries is set forth on
Schedule II attached hereto, along with its jurisdiction of formation and the
percentage of its voting shares owned by the Company or its subsidiaries. Each
of the Company and its Material Subsidiaries has good record and indefeasible
title to, or valid leasehold interests in, all real property necessary or used
in the ordinary conduct of its business, except for such defects in title as
would not reasonably be expected to have a Material Adverse Effect. Such
property of the Company and its Material Subsidiaries is subject to no Liens,
other than Liens permitted under the Credit Agreement. "Material Subsidiary"
means any subsidiary of the Company that owns or leases a Material Property or
owns or controls capital stock which under ordinary circumstances has the voting
power to elect a majority of the board of directors (or similar governing body)
of a Material Subsidiary. "Material Property" means any facility (together with
the land on which it is erected and fixtures comprising a part thereof) used
primarily for manufacturing, processing, research, warehousing or distribution,
owned or leased by the Company
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or one of its subsidiaries and (i) having a net book value in excess of 2% of
the Company's consolidated net tangible assets, other than any such facility or
portion thereof which is a pollution control facility financed by state or local
government obligations or is not of material importance to the total business
conducted or assets owned by the Company and its subsidiaries taken as a whole
or (ii) acquired with net proceeds from a sale and leaseback transaction and
which is irrevocably designated in writing by the Company as a Material
Property. "Liens" shall mean any mortgage, pledge, hypothecation, assignment,
deposit, arrangement, encumbrance, lien (statutory or other), charge, or
preference, priority or other security interest or preferential arrangement of
any kind or nature whatsoever (including any conditional sale or other title
retention agreement, and any financing lease having substantially the same
economic effect as any of the foregoing).
(f) 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
corporate power and authority to own its properties and conduct its business as
described in the Offering Circular, and has been duly qualified as a foreign
corporation for the transaction of business and is in good standing under the
laws of each other jurisdiction in which it owns or leases properties or
conducts any business so as to require such qualification, except where the
failure to be so qualified would not reasonably be expected to have,
individually or in the aggregate, a material adverse effect on 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"); and each Material Subsidiary of the Company has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation;
(g) The Company has an authorized capitalization 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; and all of the issued shares of capital stock of each Material
Subsidiary of the Company have been duly and validly authorized and issued, are
fully paid and non-assessable and are (except for directors' qualifying shares)
owned directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims;
(h) The Company had all necessary corporate power and authority to
execute and deliver the Indenture (excluding the Supplemental Indenture) and has
all such power and authority to perform its obligations thereunder; the Original
Indenture has been duly authorized by the Company, and has been qualified under
the Trust Indenture Act of 1939, as amended, and the rules and regulations of
the Commission thereunder (collectively, the "Trust Indenture Act"); the
Indenture (excluding the Supplemental Indenture) has been duly executed and
delivered by the Company and, constitutes a legally valid and binding agreement
of the Company, enforceable against the Company in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency, reorganization and other
laws of general applicability relating to or affecting creditors' and to general
equity principles; and the Indenture (excluding the Supplemental Indenture)
conforms to the description thereof in the Offering Circular and is in the form
previously delivered to you;
(i) The Company has all necessary corporate power and authority to
execute and deliver the Supplemental Indenture and perform its obligations
thereunder; the Supplemental Indenture has been duly authorized by the Company;
when the Securities are delivered and paid for pursuant to this Agreement at the
Time of Delivery, the Supplemental Indenture will have been duly executed and
delivered by the Company and, assuming due authorization, execution and delivery
of the Supplemental Indenture by the Trustee, the Supplemental Indenture will
constitute the legally valid
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and binding agreement of the Company, enforceable against the Company in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability relating to
or affecting creditors' and to general equity principles; and the Supplemental
Indenture conforms to the description thereof in the Offering Circular and will
be in substantially the form previously delivered to you;
(j) The Company has all necessary corporate power and authority to
execute, issue and deliver the Securities and perform its obligations
thereunder; the Securities have been duly authorized by the Company, and when
the Securities are delivered to and paid for by the Purchasers pursuant to this
Agreement, assuming due authentication thereof by the Trustee, the Securities
will be duly executed and delivered by the Company and will constitute legally
valid and binding obligations of the Company entitled to the benefits of the
Indenture and enforceable against the 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' and to general
equity principles; and the Securities will conform, when issued, to the
description thereof in the Offering Circular and will be in substantially the
form previously delivered to you;
(k) The Company has all necessary corporate power and authority to
engage in the Exchange Offer and to execute, issue and deliver the Exchange
Securities and perform their respective obligations thereunder; the Exchange
Securities have been duly authorized by the Company and, if and when duly
executed, authenticated and issued in accordance with the terms of the Indenture
and delivered in accordance with the Exchange Offer, assuming due authentication
of the Exchange Securities by the Trustee, such Exchange Securities will
constitute legally valid and binding obligations of the Company entitled to the
benefits of the Indenture, enforceable against the 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' and to general equity principles; and the Exchange Securities will
conform, when issued, to the description thereof in the Offering Circular;
(l) The Company has all necessary corporate power and authority to
execute and deliver the Registration Rights Agreement and perform their
respective obligations thereunder; the Registration Rights Agreement and the
transactions contemplated thereby have been duly authorized by the Company and,
when duly executed and delivered by the Company, assuming due authorization,
execution and delivery by the Purchasers, the Registration Rights Agreement will
constitute a legally valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' and to general equity principles and except
with respect to the rights of indemnification and contribution thereunder, where
enforcement thereof may be limited by federal or state securities laws or the
policies underlying such laws; and the Registration Rights Agreement will
conform, when executed and delivered, in all material respects to the
description thereof in the Offering Circular and will be in substantially the
form previously delivered to you;
(m) Prior to the date hereof, neither the Company nor any of its
subsidiaries has, directly or indirectly, taken any action which is designed to
cause or which has constituted the stabilization or manipulation of the price of
any security of the Company in connection with the offering of the Securities in
violation of applicable securities laws;
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(n) The issue and sale of the Securities and the compliance by the
Company with all of the provisions of the Securities, the Indenture 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 (except for such breaches,
violations or defaults that would not be reasonably expected to have a Material
Adverse Effect), nor will such action result in any violation of the provisions
of the Certificate of Incorporation or By-laws of the Company or any law,
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; and no consent, approval, authorization, order, registration
or qualification of or with any such court or governmental agency or body is
required for the issue and sale of the Securities or the consummation by the
Company of the transactions contemplated by this Agreement or the Indenture,
except, with respect to the transactions contemplated by the Registration Rights
Agreement, as may be required under the Securities Act, the filing of a notice
on Form D by the Company with the Commission pursuant to Section 5(h) hereof 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;
(o) Neither the Company nor any of its Material Subsidiaries is
(i) in violation of its Certificate of Incorporation or By-laws or (ii) 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 it is a party or by which it or
any of its properties may be bound except, with respect to (ii) above, for such
defaults that would not reasonably be expected to have a Material Adverse
Effect;
(p) The Company and each Material Subsidiary have all licenses,
consents, approvals, authorizations, permits, franchises and other agreements as
are necessary to own and maintain its respective business properties and to
conduct businesses in the manner described in the Offering Circular, except
where the failure to have any such licenses, consents, approvals,
authorizations, permits, franchises and other agreements would not reasonably be
expected to have a Material Adverse Effect, and the Company and each Material
Subsidiary of the Company are in compliance in all material respects with such
licenses, consents, approvals, authorizations, permits, franchises and other
agreements, each of which is in full force and effect except for such
noncompliance that would not reasonably be expected to have a Material Adverse
Effect;
(q) The statements set forth in the Offering Circular under the
caption "Description of Notes", insofar as they purport to constitute a summary
of the terms of the Securities, and under the caption "Material U.S. Federal
Income Tax Considerations" and under the caption "Underwriting", insofar as they
purport to describe the provisions of the laws and documents referred to
therein, are accurate, complete and fair;
(r) 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, would individually or in the aggregate reasonably be
expected to
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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;
(s) 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 which 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;
(t) The Company is subject to Section 13 or 15(d) of the Exchange
Act;
(u) The Company is not, and after giving effect to the offering
and sale of the Securities, will not be an "investment company", as such term is
defined in the United States Investment Company Act of 1940, as amended (the
"Investment Company Act");
(v) Neither 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; provided, that the Company makes no representation or warranty with respect
to any actions undertaken by the Purchasers or anyone acting at their direction;
(w) Within the preceding six months, neither the Company nor any
other person acting on its direction has offered or sold to any person any
Securities, or any securities of the same or a similar class as the Securities,
other than Securities offered or sold to the Purchasers hereunder;
(x) Assuming the accuracy of the representations and warranties of
the Purchasers contained in Section 3 and their compliance with the agreements
set forth therein, it is not necessary, in connection with the issuance and sale
of the Securities to the Purchasers and the offer, resale and delivery of the
Securities by the Purchasers in the manner contemplated by this Agreement, the
Indenture, the Registration Rights Agreement and the Offering Circular, to
register the Securities under the Securities Act or to qualify the Indenture
under the Trust Indenture Act, which has already been so qualified;
(y) 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;
(z) Deloitte & Touche LLP, who have certified certain financial
statements of the Company and its subsidiaries, are independent public
accountants as required by the Securities Act and the rules and regulations of
the Commission thereunder;
(aa) Other than as set forth in the Preliminary Offering Circular
or the Offering Circular, the Company and its subsidiaries (i) are in compliance
with any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous and toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) have received all permits, licenses or
other approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, except where such
noncompliance with Environmental Laws, failure to receive required permits,
licenses or other approvals or failure to
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comply with the terms and conditions of such permits, licenses or approvals
would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect; and
(bb) No labor disturbance by the employees of the Company exists
or, to the knowledge of the Company, is imminent, which would reasonably be
expected to have a Material Adverse Effect.
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 99.206% of the principal amount thereof, plus accrued
interest, if any, from November 12, 2003 to the Time of Delivery hereunder, the
principal amount of Securities set forth opposite the name of such Purchaser in
Schedule I hereto.
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 that:
(a) It will offer and sell the Securities only 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) institutions which it reasonably believes are
"accredited investors" within the meaning of Rule 501 under the Securities Act
("Institutional Accredited Investors") and who provide it and the Company an
institutional accredited investor representation letter reasonably acceptable to
the parties;
(b) It is an Institutional Accredited Investor; 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 Goldman, Sachs & Co., for the account of each Purchaser, against
payment by or on behalf of such Purchaser of the purchase price therefor by
certified or official bank check or checks, payable to the order of the Company
in Federal (same day) funds, by causing DTC to credit the Securities to the
account of Goldman, Sachs & Co. at DTC. The Company will cause the certificates
representing the Securities to be made available to Goldman, 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 9:30 a.m., New York City time, on November
12, 2003 or such other time and date as Goldman, Sachs & Co. and the Company may
agree upon in writing. Such time and date are herein called the "Time of
Delivery".
Such Securities, if any, as Goldman, Sachs & Co. may request upon at
least forty-eight hours' prior to notice to the Company (such request to include
the authorized denominations and the names in which they are to be registered),
shall be delivered in definitive certificated form, by or on behalf of the
Company to Goldman, Sachs & Co. for the account of certain of the Purchasers,
against payment
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by or on behalf of such Purchaser of the purchase price therefor by certified or
official bank check or checks, payable to the order of the Company in Federal
(same day) funds. The Company will cause the certificates representing the
Securities to be made available for checking and packaging at least twenty-four
hours prior to the Time of Delivery at the office of Goldman, Sachs & Co., 85
Broad Street, New York, New York 10004.
(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(h) hereof, will be delivered at such time and
date at the offices of Akin Gump Strauss Hauer & Feld LLP, 1700 Pacific Avenue,
Suite 4100, Dallas, Texas 75201-4675 (the "Closing Location"), and the
Securities will be delivered at the Designated Office, all at the Time of
Delivery. A meeting will be held at the Closing Location at 3:00 p.m., New York
City time, on the New York Business Day next preceding the Time of Delivery, at
which meeting the final drafts of the documents to be delivered pursuant to the
preceding sentence will be available for review by the parties hereto. For the
purposes of this Section 4, "New York Business Day" shall mean each Monday,
Tuesday, Wednesday, Thursday and Friday which is not a day on which banking
institutions in New York are generally authorized or obligated by law or
executive order to close.
5. The Company agrees with each of the Purchasers:
(a) To prepare the Offering Circular in a form approved by you; to
make no amendment or any supplement to the Offering Circular without your
consent; 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 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 or to subject itself to taxation in any
jurisdiction where it is not then so required;
(c) To furnish the Purchasers with four copies of the Offering
Circular and each amendment or supplement thereto and additional written and
electronic copies of the Offering Circular and each amendment or supplement
thereto in such quantities as you may from time to time reasonably request, and
if, at any time prior to the expiration of nine months after the date of the
Offering Circular or such earlier date of the completion of the sale of the
Securities by the Purchasers, 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 written and electronic copies as you may from time
to time reasonably request of an amended Offering Circular or a supplement to
the Offering Circular which will correct such statement or omission or effect
such compliance;
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(d) During the period beginning from the date hereof and
continuing until the date six months after the Time of Delivery, not to,
directly or indirectly, offer, sell contract to sell or otherwise dispose of,
except as provided in this Agreement and the Registration Rights Agreement, any
securities of the Company that are substantially similar to the 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) So long as any of the Securities are "restricted securities"
within the meaning of Rule 144(a)(3) under the Securities Act, the Company will,
during any period in which it is not subject to Section 13 or 15(d) of the
Exchange Act, provide to each holder of such restricted securities and to each
prospective purchaser (as designated by such holder) of such restricted
securities, upon the request of such holder or prospective purchaser, any
information required to be provided by Rule 144A(d)(4) or a successor provision
under the Securities Act;
(g) To file with the Commission, not later than 15 days after the
Time of Delivery, five copies of a notice on Form D under the Securities Act
(one of which will be manually signed by a person duly authorized by the
Company); to otherwise comply with the requirements of Rule 503 under the
Securities Act; and to furnish promptly to you evidence of each such required
timely filing (including a copy thereof);
(h) During a period of five years from the date of the Offering
Circular, to furnish to you, to the extent not otherwise available on the web
site of the Commission, copies of all reports or other communications (financial
or other) furnished to stockholders of the Company, and to deliver to you (i) as
soon as they are available, copies of any reports and financial statements
furnished to or filed with the Commission or any securities exchange on which
the Securities or any class of securities of the Company is listed; and (ii)
such additional information concerning the business and financial condition of
the Company as you may from time to time reasonably request (such financial
statements to be on a consolidated basis to the extent the accounts of the
Company and its subsidiaries are consolidated in reports furnished to its
stockholders generally or to the Commission);
(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 which
constitute "restricted securities" under Rule 144 that have been reacquired by
any of them except as permitted under the Securities Act and not otherwise
prohibit or restricted hereunder; and
(j) 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 covenants and agrees with the several Purchasers
that the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's 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
10
Registration Rights Agreement, the Indenture, the Blue Sky and Legal Investment
Memoranda, 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 reasonable fees and disbursements of counsel
for the Purchasers in connection with such qualification and in connection with
the Blue Sky and legal investment 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; and (vii) all other costs and expenses
incident to the performance of its obligations hereunder which 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 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 herein are, at and as of the Time of
Delivery, true and correct, the condition that the Company shall have performed
all of its obligations hereunder theretofore to be performed, and the following
additional conditions:
(a) Akin Gump Strauss Hauer & Feld LLP, counsel for the
Purchasers, shall have furnished to you such opinion or opinions, dated the Time
of Delivery, with respect to the matters covered in paragraphs a), b), c) and f)
only with respect to the statements under the caption "Description of Notes", g)
of subsection (b)(i) below, with respect to the matters set forth in subpart (x)
of the last paragraph of Section 7(b)(i) hereof and with respect to the matters
covered in paragraphs a), f) and g) of subsection (b)(i)(ii) 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) (i) Haynes and Boone, LLP, 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:
a) The Securities have been duly authorized and
executed by the Company, and, when authenticated by the
Trustee in accordance with the terms of the Indenture and
delivered to and paid for by the Purchasers pursuant to this
Agreement, will have been duly issued and delivered by the
Company and constitute valid and legally binding obligations
of the Company entitled to the benefits provided by the
Indenture, enforceable against the 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' and to
general equity principles; and the Securities and the
Indenture conform to the descriptions thereof in the Offering
Circular in all material respects;
b) The Original Indenture has been duly
qualified under the Trust Indenture Act and the Indenture
(including the Supplemental Indenture) (a) has been duly
authorized, executed and delivered by the Company and (b)
constitutes a valid and legally binding instrument,
enforceable against the Company in accordance with
11
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;
c) The Registration Rights Agreement
constitutes a valid and legally binding instrument,
enforceable against the Company 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;
d) If and when the Exchange Securities are
executed, issued, authenticated and delivered in accordance
with the terms of the Exchange Offer, the Registration Rights
Agreement and the Indenture, the Exchange Securities will be
entitled to the benefits provided by the Indenture,
enforceable against the 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' and to general equity
principles;
e) No consent, approval, authorization, order,
registration or qualification of or with any court or
governmental agency or body is required for the issue and sale
of the Securities or the Exchange Securities or the
consummation by the Company of the transactions contemplated
by this Agreement, the Registration Rights Agreement or the
Indenture, except with respect to the transactions
contemplated by the Registration Rights Agreement as may be
required under the Securities Act and the qualification of the
Indenture under the Trust Indenture Act, 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;
f) The statements set forth in the Offering
Circular under the caption "Description of Notes", insofar as
they purport to constitute a summary of the terms of the
Securities and under the caption "Material U.S. Federal Income
Tax Considerations", insofar as they purport to describe the
provisions of the laws and documents referred to therein, are
accurate, complete and fair in all material respects;
g) Assuming the accuracy of the representations
and warranties and compliance with the agreements and
covenants contained herein and representation letters referred
to herein, no registration of the Securities under the
Securities Act is required for the offer, sale and initial
resale of the Securities by the Purchasers in the manner
contemplated by this Agreement;
h) The Company is not an "investment company",
as such term is defined in the Investment Company Act; and
Such opinion also shall contain language to the effect that
although the transaction lawyers with primary responsibility for preparing the
Offering Circular have not undertaken to determine independently, and do not
assume any responsibility for, the accuracy or completeness of the statements in
the Offering Circular, they have participated in the
12
preparation of the Offering Circular, including review and discussion of the
contents thereof, and nothing has come to their attention that has caused them
to believe that (x) the Offering Circular, as of its date and as of the Time of
Delivery, 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, in the light of the circumstances under which they were made, not
misleading and (y) the Exchange Act Reports, as of their respective dates,
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,
in the light of the circumstances under which they were made, not misleading.
Notwithstanding the foregoing, such counsel need not express any belief with
respect to (i) the financial statements and the notes and schedules thereto or
(ii) any other financial or statistical data.
(ii) David M. Sudbury, the Company's general counsel, shall have
furnished to you his written opinion, dated the Time of Delivery, in form and
substance satisfactory to you to the effect that:
a) 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 corporate power and authority to own its properties
and conduct its business as described in the Offering Circular;
b) The Company has an authorized capitalization 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;
c) The Company has been duly qualified as a foreign
corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
properties or conducts any business so as to require such
qualification, except where the failure to be so qualified would not
reasonably be expected to have a Material Adverse Effect;
d) Each Material Subsidiary of the Company has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation; and all of the
issued shares of capital stock of each such Material Subsidiary have
been duly and validly authorized and issued, are fully paid and
non-assessable, and (except for directors' qualifying shares) are owned
directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims;
e) 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, would individually or in the
aggregate 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;
13
f) This Agreement has been duly authorized, executed and
delivered by the Company;
g) The Registration Rights Agreement has been duly
authorized, executed and delivered by the Company;
h) The issue and sale of the Securities and the Exchange
Securities and the compliance by the Company with all of the provisions
of the Securities, the Indenture, this Agreement and the Registration
Rights 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 known to such counsel 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, except to the extent
such conflict, breach or violation would not reasonably be expected to
have a Material Adverse Effect, nor will such actions result in any
violation of the provisions of the Certificate of Incorporation or
By-laws of the Company or, to the best of such counsel's knowledge, any
law, 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;
i) To the best of such counsel's knowledge, neither the
Company nor any of its Material Subsidiaries is (1) in violation of its
Certificate of Incorporation or By-laws or (2) 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 it is a
party or by which it or any of its properties may be bound except, with
respect to (2) above, for such defaults that would not reasonably be
expected to have a Material Adverse Effect;
j) The Exchange Act Reports (other than the financial
statements and the notes and schedules thereto or any other financial
data, as to which such counsel need express no opinion), when they were
filed with the Commission, complied as to form in all material respects
with the requirements of the Exchange Act, and the rules and
regulations of the Commission thereunder;
Such opinion also shall contain language to the effect that although
the transaction lawyers with primary responsibility for preparing the Offering
Circular have not undertaken to determine independently, and do not assume any
responsibility for, the accuracy or completeness of the statements in the
Offering Circular, they have participated in the preparation of the Offering
Circular, including review and discussion of the contents thereof, and nothing
has come to their attention that has caused them to believe that (x) the
Offering Circular, as of its date and as of the Time of Delivery, 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, in the light
of the circumstances under which they were made, not misleading and (y) the
Exchange Act Reports, as of their respective dates, 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, in the light of the
circumstances under
14
which they were made, not misleading. Notwithstanding the foregoing,
such counsel need not express any belief with respect to (i) the
financial statements and the notes and schedules thereto or (ii) any
other financial or statistical data.
(c) On the date of the Offering Circular prior to the execution of
this Agreement and also at the Time of Delivery, Deloitte & Touche LLP shall
have furnished to you a letter or letters, dated the respective dates of
delivery thereof, in form and substance satisfactory to you, to the effect set
forth in Annex II hereto;
(d) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included or
incorporated by reference in 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 Offering Circular there shall not have been any change in the capital
stock (except pursuant to the exercise of stock options authorized and issued at
the date hereof or purchases by employees of the Company pursuant to the
Company's employee stock purchase plan as existing on the date hereof) or
long-term debt of the Company or any of its subsidiaries except as contemplated
in the Offering Circular and the ISDA Master Agreement, dated April 4, 2002, and
the confirmation, dated April 8, 2002, from you to the Company and the ISDA
Master Agreement, dated April 8, 2002, and the confirmation from Bank of America
N.A. to the Company, dated April 9, 2002, as permitted by the Credit Agreement
or any change, or any development involving a prospective change, in or
affecting the general affairs, management, financial position, stockholders'
equity, results of operations or cash flows 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 the Representatives 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;
(e) 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;
(f) 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; (ii) a suspension or
material limitation in trading in the Company's securities on the New York Stock
Exchange; (iii) a general moratorium on commercial banking activities declared
by either Federal, New York or Texas State authorities or a material disruption
in commercial banking or securities settlement or clearance services in the
United States; (iv) the outbreak or escalation of hostilities involving the
United States or the declaration by the United States of a national emergency or
war or (v) the occurrence of any other calamity or crisis or any change in
financial, political or economic conditions in the United States or elsewhere,
if the effect of any such event specified in clause (iv) or (v) in the judgment
of the Representatives makes it impracticable or inadvisable to proceed with the
public offering or the delivery of the Securities on the terms and in the manner
contemplated in the Offering Circular;
15
(g) The Company shall have furnished or caused to be furnished to
you at the Time of Delivery certificates of officers of the Company satisfactory
to you as to the accuracy of the representations and warranties of the Company
herein at and as of such Time of Delivery, as to the performance by the Company
of all of its obligations hereunder to be performed at or prior to such Time of
Delivery, as to the matters set forth in subsections (a) and (e) of this Section
and as to such other matters as you may reasonably request; and
(h) The Company shall have executed and delivered the Registration
Rights Agreement in the form attached hereto in Annex I.
8. (a) The Company will indemnify and hold harmless each
Purchaser against any losses, claims, damages or liabilities, joint or several,
to which such Purchaser 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 such Purchaser in connection with investigating or defending any
such action or claim as such expenses are incurred; provided, however, that the
Company shall not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in any 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 any Purchaser through Goldman, Sachs & Co. expressly for use therein.
(b) Each Purchaser will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company 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 any 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 such
Purchaser through Goldman, Sachs & Co. expressly for use therein; and will
reimburse the Company for any legal or other expenses reasonably incurred by the
Company 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 relieve the indemnifying party from liability which it
may have to any indemnified party under such subsection to the extent the
indemnifying party is materially prejudiced by such omission. 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
16
extent that it shall wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel reasonably satisfactory to
such indemnified 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 subsequently incurred by such indemnified party, in connection with
the defense thereof other than reasonable costs of investigation unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to the
contrary, (ii) the use of counsel by the indemnifying party to represent the
indemnified party would present such counsel with a conflict of interest or
(iii) the indemnifying party shall have failed to within a reasonable time,
retain counsel reasonably satisfactory to the indemnified party. The
indemnifying party shall not, in connection with any proceedings, or related
proceeding in the same jurisdiction, be liable for the fees and expenses of more
than one separate firm (in addition to any local counsel) for all indemnified
parties. 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
(whether or not the indemnified party is an actual or potential party to such
action or claim) 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 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 on the one hand and the 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 on the one hand and the Purchasers on the other shall be deemed to be in
the same proportion as the total net proceeds from the offering (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 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
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)
17
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 price at which the Securities underwritten by it and distributed
to investors exceeds the amount of any damages which such Purchaser has
otherwise been required to pay by reason of such untrue or 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 under this Section 8 shall be
in addition to any liability which the Company 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 Purchasers may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company and to each
person, if any, who controls the Company 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 seven 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
18
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 or the Company, 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 several 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 any Purchaser or any controlling person of any Purchaser, or the
Company, or any officer or director or controlling person of the Company, and
shall survive delivery of and payment for the Securities.
11. If this Agreement shall be terminated pursuant to Section 9
hereof, the Company 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 as provided herein,
the Company will reimburse the Purchasers through you for all out-of-pocket
expenses approved in writing by you, 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 shall then be
under no further liability to any Purchaser except as provided in Sections 6 and
8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of
the Purchasers, and the parties hereto shall be entitled to act and rely upon
any statement, request, notice or agreement on behalf of any Purchaser made or
given by you jointly or by Goldman, Sachs & Co. on behalf of you as the
representatives.
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 you as the representatives in care of Goldman, Sachs &
Co., 85 Broad Street, New York, New York 10004, Attention: Registration
Department; and if to the Company shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Company set forth in the Offering
Circular, Attention: Secretary; 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 you 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 and, to the extent provided in Sections
8 and 10 hereof, the officers and directors of the Company and each person who
controls the Company 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.
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15. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY
CONFLICT OF LAWS PRINCIPLES OF SUCH STATE THAT WOULD REQUIRE THE APPLICATION OF
THE LAWS OF ANOTHER JURISDICTION.
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.
17. The Company is authorized, subject to applicable law, to
disclose any and all aspects of this potential transaction that are necessary to
support any U.S. federal income tax benefits expected to be claimed with respect
to such transaction, and all materials of any kind (including tax opinions and
other tax analyses) related to those benefits, without the Purchasers imposing
any limitation of any kind.
If the foregoing is in accordance with your understanding, please sign
and return to us counterparts hereof, and upon the acceptance hereof by you, on
behalf of each of the Purchasers, this letter and such acceptance hereof shall
constitute a binding agreement between each of the Purchasers and the Company.
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, but without warranty on your part as to the authority of the
signers thereof.
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Very truly yours,
Commercial Metals Company
By: /s/ William B. Larson
---------------------------------------------
Name: William B. Larson
Title: Vice President and Chief Financial Officer
Accepted as of the date hereof:
GOLDMAN, SACHS & CO.
BANC OF AMERICA SECURITIES LLC
TOKYO-MITSUBISHI INTERNATIONAL PLC
ABN AMRO INCORPORATED
BY: /s/ Goldman, Sachs & Co.
----------------------------
(Goldman, Sachs & Co.)
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