Exhibit 10.1
Execution Copy
JTM INDUSTRIES, INC.
$100,000,000
10% SENIOR SUBORDINATED NOTES DUE 2008
PURCHASE AGREEMENT
April 17, 1998
NationsBanc Montgomery Securities LLC
CIBC Oppenheimer Corp.
c/o NationsBanc Montgomery Securities LLC
100 North Tryon Street
Charlotte, North Carolina 28255
Ladies and Gentlemen:
JTM Industries, Inc., a Texas corporation (the "Company"), proposes
to issue and sell to you (the "Initial Purchasers") $100,000,000 in aggregate
principal amount of its 10% Senior Subordinated Notes due 2008 (the "Notes").
The Notes will be fully and unconditionally guaranteed (the "Subsidiary
Guarantees" and, collectively with the Notes, the "Securities") on a senior
subordinated unsecured basis, jointly and severally, by all existing and future
domestic subsidiaries of the Company (the "Subsidiary Guarantors" and, together
with the Company, the "Issuers"). The Securities are to be issued pursuant to an
indenture, dated as of April 22, 1998 (the "Indenture"), by and among the
Company, the Subsidiary Guarantors and U.S. Bank National Association, as
trustee (the "Trustee").
The sale of the Securities to the Initial Purchasers will be made
without registration of the Securities under the Securities Act of 1933, as
amended (the "Securities Act"), in reliance upon exemptions from the
registration requirements of the Securities Act. You have advised the Issuers
that you will offer and sell the Securities purchased by you hereunder in
accordance with Section 3 hereof as soon as you deem advisable.
In connection with the sale of the Securities, the Issuers have
prepared a preliminary offering memorandum, dated March 27, 1998 (the
"Preliminary Memorandum"), and a final offering memorandum, dated the date
hereof (the "Final Memorandum"). Each of the Preliminary Memorandum and the
Final Memorandum sets forth certain information concerning the Issuers and the
Securities. The Issuers hereby confirm that they have authorized the use of the
Preliminary Memorandum and the Final Memorandum, and any amendment or supplement
thereto, in connection with the offer and sale of the Securities by the Initial
Purchasers in accordance with Section 3 hereof. Unless stated to the contrary,
all references herein to the Final Memorandum are to the Final Memorandum at the
time of execution and delivery of this Agreement (the "Execution Time") and are
not meant to include any amendment or supplement, or any information
incorporated by reference therein, subsequent to the Execution Time.
The Initial Purchasers and their direct and indirect transferees
will be entitled to the benefits of the Registration Rights Agreement,
substantially in the form attached hereto as Exhibit A (the "Registration Rights
Agreement"), pursuant to which the Issuers will agree to use their best efforts
to commence an offer to exchange the Securities for Exchange Securities (the
"Exchange Securities") that have been registered under the Securities Act, and
that otherwise are identical in all respects to the Securities, or, under
certain circumstances, to cause a shelf registration statement to become
effective under the Securities Act and to remain effective for the period
designated in such Registration Rights Agreement.
The offering of the Securities is being made in connection with (i)
the acquisition (the "U.S. Ash Acquisition") by the Company of Michigan Ash
Sales Company, d.b.a. U.S. Ash Company, a Michigan corporation, together with
two affiliated companies, U.S. Stabilization, Inc. and Flo Fil Co., Inc., each a
Michigan corporation (collectively, "U.S. Ash"), pursuant to that certain Stock
Purchase Agreement, dated as of March 25, 1998 (the "U.S. Ash Acquisition
Agreement"), and (ii) the acquisition (the "Fly Ash Acquisition" and, together
with the U.S. Ash Acquisition, the "Acquisitions") by the Company of Fly Ash
Products, Inc., an Arkansas corporation ("Fly Ash"), pursuant to that certain
Stock Purchase Agreement, dated as of March 27, 1998 (the "Fly Ash Acquisition
Agreement," and, together with the U.S. Ash Acquisition Agreement, the
"Acquisition Agreements"). References in this Agreement to subsidiaries of the
Company or to "Issuers" or "Subsidiary Guarantors" shall be deemed to be
references (i) to such entities before giving effect to the Acquisitions in the
case of statements with respect to periods before the Closing Date and (ii) to
such entities immediately after giving effect to the Acquisitions in the case of
statements with respect to periods on or after the Closing Date.
1. Representations and Warranties.
The Issuers, jointly and severally, represent and warrant to the
Initial Purchasers that:
(a) All of the representations and warranties of the parties to each
of the Acquisition Agreements are true and correct as if made on and as of the
date hereof and the Closing Date.
(b) The Preliminary Memorandum, at the date thereof, did not contain
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading. The Final Memorandum, at the date
hereof, does not, and at the Closing Date (as defined below) will not (and any
amendment or supplement thereto, at the date thereof and at the Closing Date,
will not), contain any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however that
the Issuers make no representation or warranty as to the information relating to
the Initial Purchasers contained in or omitted from the Preliminary Memorandum
or the Final Memorandum, or any amendment or supplement thereto, in reliance
upon and in conformity with information furnished in writing to the Issuers by
or on behalf of the Initial Purchasers specifically for inclusion therein.
(c) Neither the Issuers, nor any of their "Affiliates" (as defined
in Rule 501(b) of Regulation D under the Securities Act ("Regulation D")), nor
any person acting on their behalf has, directly or indirectly, made offers or
sales of any security, or solicited offers to buy any security, under
circumstances that would require the registration of the Securities under the
Securities Act. Neither the Issuers, nor any of their Affiliates, nor any person
acting on their behalf has engaged in any form of general solicitation or
general advertising (within the meaning of Regulation D) in connection with any
offer or sale of the Securities, provided, that the Issuers make no
representation in this sentence
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regarding the Initial Purchasers. The Securities satisfy the eligibility
requirements of Rule 144A(d)(3) under the Securities Act. The Final Memorandum
and each amendment or supplement thereto, as of its date, contains the
information specified in Rule 144A(d)(4) under the Securities Act. The Issuers
have been advised by the National Association of Securities Dealers, Inc.
Private Offerings, Resales and Trading through the Automated Linkages Market
("PORTAL") that the Securities have been designated PORTAL eligible securities
in accordance with the rules and regulations of the National Association of
Securities Dealers, Inc.
(d) None of the Issuers nor any of their respective affiliates or
any person acting on its or their behalf (other than the Initial Purchasers, as
to whom the Issuers make no representation) has engaged or will engage in any
directed selling efforts within the meaning of Regulation S under the Securities
Act ("Regulation S") with respect to the Securities. To the knowledge of the
Issuers, the Securities offered and sold in reliance on Regulation S have been
and will be offered and sold only in offshore transactions. The sale of the
Securities pursuant to Regulation S is not part of a plan or scheme to evade the
registration provisions of the Securities Act. No registration under the
Securities Act of the Securities is required for the sale of the Securities to
the Initial Purchasers as contemplated hereby or for the Exempt Resales (as
defined below) assuming the accuracy of, and compliance with, the Initial
Purchasers' representations, warranties and agreements set forth in this
Agreement. The Securities sold pursuant to Regulation S will initially be
represented by a temporary global security as required by Rule 903 of Regulation
S.
(e) Neither the Company nor any of its subsidiaries is, or will be
after giving effect to the Acquisitions, the offering and sale of the Securities
and the application of the proceeds therefrom as described in the Final
Memorandum, an "investment company" within the meaning of the Investment Company
Act of 1940, as amended (the "Investment Company Act").
(f) Assuming (i) that the representations and warranties and
covenants of the Initial Purchasers contained in Section 3 hereof are true and
correct and (ii) that the Initial Purchasers comply with their agreements
contained in Section 3 hereof, (A) registration under the Securities Act of the
Securities or qualification of the Indenture under the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"), is not required in connection with
the offer and sale of the Securities to the Initial Purchasers in the manner
contemplated by the Final Memorandum or this Agreement and (B) initial resales
of the Securities by the Initial Purchasers on the terms and in the manner set
forth in the Final Memorandum and Section 3 hereof are exempt from the
registration requirements of the Securities Act.
(g) Since the respective dates as of which information is given in
the Preliminary Memorandum and the Final Memorandum, except as otherwise stated
therein, (i) there has been and, immediately after giving effect to the
Acquisitions, will be no material adverse change in the condition (financial or
otherwise), results of operations, affairs or business prospects of the Company
and its subsidiaries considered as a whole, whether or not arising in the
ordinary course of business and (ii) there have been no material transactions
entered into by the Company or any of its subsidiaries (collectively, a
"Material Adverse Change").
(h) The Company has been and, immediately after giving effect to the
Acquisitions, will be duly organized and is validly existing as a corporation in
good standing under the laws of the state of its incorporation with corporate
power and authority to own, lease and operate its properties and conduct its
business as described in the Preliminary Memorandum and the Final Memorandum;
and the Company is duly qualified as a foreign corporation to transact business
and is in good standing in each jurisdiction in which the conduct of its
business requires such qualification, except to the extent that the failure to
be so qualified or be in good standing would not, singly or in the aggregate,
reasonably be
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expected to have a material adverse effect on the condition (financial or
otherwise), results of operations, affairs or business prospects of the Company
and its subsidiaries considered as a whole (a "Material Adverse Effect").
(i) All of the issued and outstanding capital stock of the Company
at December 31, 1997, was as set forth in the "Actual" column under the caption
"Capitalization" in the Preliminary Memorandum and the Final Memorandum. All of
the outstanding shares of capital stock of the Company have been duly authorized
and validly issued and are fully paid and nonassessable. Attached as Schedule A
hereto is a complete and accurate list of each subsidiary of the Company both
before and immediately after giving effect to the Acquisitions. Each of the
subsidiaries of the Company has been duly organized and is validly existing and
in good standing under the laws of the jurisdiction of its organization, has the
requisite power and authority to own, lease and operate its properties and
conduct its business as described in the Preliminary Memorandum and the Final
Memorandum and is duly qualified as a foreign organization to transact business
and is in good standing in each jurisdiction in which the conduct of its
business requires such qualification, except to the extent that the failure to
be so qualified or be in good standing would not, singly or in the aggregate,
reasonably be expected to have a Material Adverse Effect. All of the issued and
outstanding capital stock of each subsidiary has been duly authorized and
validly issued and is fully paid and nonassessable, and, except as described in
the Preliminary Memorandum and the Final Memorandum, all shares of capital stock
of each subsidiary are owned by the Company, directly or through subsidiaries,
free and clear of any mortgage, pledge, lien, encumbrance, claim or equity.
(j) This Agreement has been duly authorized, executed and delivered
by the Issuers and constitutes the valid and binding agreement of the Issuers,
enforceable against the Issuers in accordance with its terms, except that (i)
enforcement thereof may be subject to (A) bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws now or hereafter
in effect relating to or affecting creditors' rights generally and (B) general
principles of equity (regardless of whether enforceability is considered in a
proceeding in equity or at law) and (ii) the enforceability of any
indemnification or contribution provisions thereof may be limited under
applicable securities laws or the public policies underlying such laws.
(k) The Notes have been duly authorized by the Company, and, when
executed and authenticated in accordance with the provisions of the Indenture
and delivered to and paid for by the Initial Purchasers in accordance with this
Agreement, will constitute the valid and binding obligations of the Company
enforceable against the Company in accordance with their terms, and will be
entitled to the benefits, of the Indenture, except that enforcement thereof may
be subject to (A) bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws now or hereafter in effect relating to or
affecting creditors' rights generally and (B) general principles of equity
(regardless of whether enforceability is considered in a proceeding in equity or
at law).
(l) The Subsidiary Guarantees endorsed on the Notes have been duly
authorized by each Subsidiary Guarantor and when the Notes are executed and
authenticated in accordance with the provisions of the Indenture and delivered
to the Initial Purchasers in accordance with this Agreement, the Subsidiary
Guarantees will constitute the valid and binding obligation of the Subsidiary
Guarantors enforceable against the Subsidiary Guarantors in accordance with
their terms and will be entitled to the benefits of the Subsidiary Guarantees
except that enforcement thereof may be subject to (A) bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws now or
hereafter in effect relating to or affecting creditors' rights generally and (B)
general principles of equity (regardless of whether enforceability is considered
in a proceeding in equity or at law).
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(m) The Indenture has been duly authorized by the Issuers. When the
Securities are delivered and paid for pursuant to this Agreement on the Closing
Date, the Indenture will have been duly executed and delivered by the Issuers
and, assuming the due execution and delivery thereof by the Trustee, will
constitute a valid and binding agreement of the Issuers, enforceable against the
Issuers in accordance with its terms, except that enforcement thereof may be
subject to (A) bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws now or hereafter in effect relating to or
affecting creditors' rights generally and (B) general principles of equity
(regardless of whether enforceability is considered in a proceeding in equity or
at law).
(n) The Exchange Securities have been duly authorized and, when duly
executed, authenticated, issued and delivered, will be validly issued and
outstanding, and will constitute the valid and binding obligations of the
Issuers, entitled to the benefits of the Indenture and enforceable against the
Issuers in accordance with their terms except that enforcement thereof may be
subject to (A) bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws now or hereafter in effect relating to or
affecting creditors' rights generally and (B) general principles of equity
(regardless of whether enforceability is considered in a proceeding in equity or
at law).
(o) The Registration Rights Agreement has been duly authorized by
the Company and the Subsidiary Guarantors, and when duly executed and delivered
by the Issuers (assuming the due execution and delivery by the Initial
Purchasers), will constitute a valid and binding agreement of the Issuers,
enforceable against the Issuers in accordance with its terms except that (i)
enforcement thereof may be subject to (A) bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws now or hereafter
in effect relating to or affecting creditors' rights generally and (B) general
principles of equity (regardless of whether enforceability is considered in a
proceeding in equity or at law) and (ii) the enforceability of any
indemnification or contribution provisions thereof may be limited under
applicable securities laws or the public policies underlying such laws.
(p) On the Closing Date, the Secured Credit Facility (as defined in
the Final Memorandum) and the guarantee of the obligations thereunder by the
Subsidiary Guarantors (a) shall have been duly authorized, executed and
delivered by the Company and the Subsidiary Guarantors, respectively, and will
constitute the valid and binding agreement of the Company and the Subsidiary
Guarantors, respectively, enforceable against the Company and the Subsidiary
Guarantors, as applicable, in accordance with their terms except that (i)
enforcement thereof may be subject to (A) bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws now or hereafter
in effect relating to or affecting creditors' rights generally and (B) general
principles of equity (regardless of whether enforceability is considered in a
proceeding in equity or at law) and (ii) the enforceability of any
indemnification or contribution provisions thereof may be limited under
applicable securities laws or public policies; and (b) shall be in full force
and effect. On the Closing Date, no event of default or event which, with the
giving of notice or passage of time or both, would constitute an event of
default shall have occurred under the Secured Credit Facility or the guarantees
thereof by the Subsidiary Guarantors and all conditions to the extension of
credit thereunder still have been satisfied without waiver.
(q) The execution, delivery and performance of this Agreement, the
Indenture, the Registration Rights Agreement and each of the Acquisition
Agreements by the Issuers (to the extent each is a party thereto), and the
consummation of the transactions contemplated hereby and thereby does not and,
after giving effect to the Acquisitions, 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 or credit agreement
or other agreement or instrument to which either 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 properties
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or assets of the Company or any of its subsidiaries are subject, nor will such
actions result in any violation of the provisions of the charter or by-laws of
the Company or any of its subsidiaries or any statute to which they may be
subject 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 or assets (except to the extent any such conflict, breach,
violation or default singly or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect); and except for such consents,
approvals, authorizations, registrations or qualifications as may be required
under applicable state securities and Blue Sky laws in connection with the
purchase and distribution of the Securities by the Initial Purchasers or as set
forth in the Registration Rights Agreement, no consent, approval, authorization
or order of, or filing or registration with, any such court or governmental
agency or body is required for the execution, delivery and performance of this
Agreement, the Indenture and the Registration Rights Agreement by the Issuers
(to the extent each is a party thereto), the consummation of the transactions
contemplated hereby and thereby, and the issuance and sale of the Notes and
Exchange Securities by the Issuers, except such as have been or will be obtained
and made on or prior to the Closing Date or the date specified in the
Registration Rights Agreement.
(r) Neither the Company nor any of its subsidiaries is in breach or
violation of any of the terms or provisions of 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 properties or assets of the Company
or any of its subsidiaries are subject, nor is the Company or any of its
subsidiaries in violation of the provisions of its respective charter or by-laws
or any statute or any judgment, order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company, any of its
subsidiaries or any of their properties or assets, except to the extent any such
conflict, breach, violation or default is cured at or prior to the Closing Date
and within the grace period applicable thereto or would not, singly or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
(s) As of the Closing Date, the Securities and the Indenture will
conform in all material respects to the descriptions thereof contained in the
Final Memorandum. As of the Closing Date, the provisions of the Registration
Rights Agreement and the Secured Credit Facility, to the extent that such
provisions are summarized in the Final Memorandum, will conform in all material
respects to the descriptions thereof contained in the Final Memorandum.
(t) Except as set forth in the Registration Rights Agreement, there
are no contracts, agreements or understandings between the Company or any of its
subsidiaries and any person granting such person the right to require the
Company or any of its subsidiaries to file a registration statement under the
Securities Act with respect to any securities owned or to be owned by such
person or to require the Company or any of its subsidiaries to include such
securities in any securities being registered pursuant to any registration
statement filed by the Company or any of its subsidiaries under the Securities
Act.
(u) Except as set forth in the Preliminary Memorandum and the Final
Memorandum, there is and, immediately after giving effect to the Acquisitions,
will be no action, suit or proceeding before or by any court or governmental
agency or body, domestic or foreign, now pending or, to the knowledge of the
Issuers, threatened against or affecting the Company or any of its subsidiaries,
which would reasonably be expected, singly or in the aggregate, to have a
Material Adverse Effect or materially and adversely affect the offering of the
Securities.
(v) The Company and each of its subsidiaries has and, after giving
effect to the Acquisitions, will have good and indefeasible title in fee simple
to all real property and good and
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indefeasible title to all personal property owned by it and necessary in the
conduct of the business of the Company or such subsidiary, in each case free and
clear of all liens, encumbrances and defects except (i) such as are referred to
in the Final Memorandum or (ii) such as do not materially and adversely affect
the value of such property to the Company or such subsidiary, and do not
interfere with the use made and proposed to be made of such property by the
Company or such subsidiary to an extent that such interference would, singly or
in the aggregate, reasonably be expected to have a Material Adverse Effect. All
leases to which the Company or its subsidiaries is a party are and, after giving
effect to the Acquisitions, will be valid and binding, and no default has
occurred or is continuing thereunder which could, singly or in the aggregate,
reasonably be expected to have a Material Adverse Effect or materially and
adversely affect the offering of the Securities, and the Company and its
subsidiaries enjoy peaceful and undisturbed possession under all such leases to
which any of them is a party as lessee (with such exceptions as do not
materially interfere with the use made by the Company or such subsidiary). The
Company and its subsidiaries possess and, after giving effect to the
Acquisitions, will possess adequate certificates, authorizations or permits
issued by the appropriate state, federal or foreign regulatory agencies or
bodies necessary to conduct the business now operated by them, and except as set
forth in the Final Memorandum, neither the Company nor any of its subsidiaries
has received any notice of proceedings relating to the revocation or
modification of any such certificate, authority or permit which, singly or in
the aggregate, if the subject of an unfavorable decision, ruling or finding,
would reasonably be expected to have a Material Adverse Effect.
(w) Each of Ernst & Young LLP and Coopers & Lybrand L.L.P., who have
certified certain financial statements of the Company and its subsidiaries
included in the Final Memorandum, are independent public accountants within the
meaning of the Securities Act and the rules and regulations thereunder. The
financial statements included in the Preliminary Memorandum and the Final
Memorandum present fairly in all material respects the consolidated financial
position of the Company and its subsidiaries, on a consolidated basis, as at the
dates indicated and the results of their respective operations and the changes
in their consolidated financial position for the periods specified; said
financial statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis during the periods involved,
except as indicated therein, and comply as to form in all material respects with
the requirements applicable to such financial statements included in
registration statements under the Securities Act.
The pro forma financial statements included in the Preliminary
Memorandum and the Final Memorandum have been prepared on a basis consistent
with the historical financial statements of the Company and its subsidiaries and
give effect to assumption used in the preparation thereof on a reasonable basis
and in good faith and present fairly the historical and proposed transactions
contemplated by the Preliminary Memorandum and the Final Memorandum; and such
pro forma financial statements comply as to form in all material respects with
the requirements applicable to pro forma financial statements included in
registration statements on Form S-1 under the Act. The other pro forma financial
and statistical information and data included in the Preliminary Memorandum and
the Final Memorandum are, in all material respects, accurately presented and
prepared on a basis consistent with the pro forma financial statements.
To the knowledge of the Issuers, the historical and pro forma
financial statements included in the Preliminary Memorandum and the Final
Memorandum constitute all of the financial statements that would be required to
be included in a registration statement on Form S-1 under the Securities Act.
(x) Neither the Company nor any of its subsidiaries is now or, after
giving effect to the issuance of the Securities, and the application of the
proceeds thereof, will be (i) insolvent, (ii) left
7
with unreasonably small capital with which to engage in its anticipated
businesses or (iii) incurring debts beyond its ability to pay such debts as they
become due.
(y) Except as would not reasonably be expected to have a Material
Adverse Effect, the Company and its subsidiaries own, or otherwise possess the
right to use, all patents, trademarks, service marks, trade names and
copyrights, all applications and registrations for each of the foregoing, and
all other proprietary rights and confidential information used in the conduct of
their respective businesses as currently conducted; and neither the Company nor
any of its subsidiaries has received any notice or is otherwise aware, of any
infringement of or conflict with the rights of any third party with respect to
any of the foregoing which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would reasonably be expected to have a
Material Adverse Effect. The Company and its subsidiaries do not own or
otherwise possess the right to use any patents, trademarks, service marks, trade
names and copyrights, the loss of which would result in a Material Adverse
Effect.
(z) The Company and its subsidiaries are (i) in compliance with any
and all applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (ii) have received all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct their
respective businesses and (iii) are in compliance with all terms and conditions
of any such permit, license or approval, except where such noncompliance with
Environmental Laws, failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions of such permits,
licenses or approvals would not, singly or in the aggregate, reasonably be
expected to have a Material Adverse Effect. In the ordinary course of its
business, the Company conducts a periodic review of the effect of Environmental
Laws on the business, operations and properties of the Company and its
subsidiaries, in the course of which it identifies and evaluates associated
costs and liabilities (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance with
Environmental Laws or any permit, license or approval, any related constraints
on operating activities and any potential liabilities to third parties). On the
basis of such review, the Company has reasonably concluded that such associated
costs and liabilities would not, singly or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(aa) No labor problem or disturbance with the employees of the
Company or any of its subsidiaries exists or, immediately after giving effect to
the Acquisitions, will exist, or, to the knowledge of the Issuers, is threatened
which, singly or in the aggregate, would reasonably be expected to have a
Material Adverse Effect.
(ab) Neither the Company nor any of its subsidiaries has taken, and
none of them will take, any action that would cause this Agreement or the
issuance or sale of the Securities and Exchange Securities to violate Regulation
G, T, U or X of the Board of Governors of the Federal Reserve System or
analogous foreign laws and regulations.
(ac) The Company and its subsidiaries have complied with all
provisions of Section 517.075, Florida Statutes (Chapter 92-198, Laws of
Florida) relating to doing business with the Government of Cuba or with persons
or affiliates located in Cuba.
(ad) Other than as set forth on in the Final Memorandum, neither the
Company nor any subsidiary is a party to any contract or agreement that would be
required to be filed with the
8
Commission as an exhibit to a registration statement on Form S-1 pursuant to
entries (2), (4) and (10) of the Exhibit Table of Item 601 of Regulation S-K
under the Securities Act.
(ae) No Issuer or Affiliate of any Issuer has sold, offered for sale
or solicited offers to buy or otherwise negotiated in respect of any security
(as defined in the Securities Act) in a transaction would require the
registration under the Securities Act of the Securities.
(af) Neither the Company nor any subsidiary is a "public utility" or
a "holding company" within the meaning of the Public Utility Holding Company Act
of 1935, as amended.
2. Purchase and Sale. On the basis of the representations and
warranties contained in, and subject to the terms and conditions of, this
Agreement, the Issuers agree to sell to the Initial Purchasers and the Initial
Purchasers agree to purchase the aggregate principal amount of Securities set
forth opposite its name as shown in Schedule B hereto, at a purchase price equal
to 97% of the principal amount thereof.
The Issuers shall not be obligated to deliver any of the Securities
to be delivered except upon payment for all the Securities to be purchased as
provided herein.
3. Sale and Resale of the Securities by the Initial Purchaser. Each
of the Initial Purchasers represents and warrants to the Issuers that:
(a) It will offer the Securities to be purchased hereunder for
resale only upon the terms and conditions set forth in this Agreement and in the
Final Memorandum.
(b) It, nor any of its "Affiliates" (as defined in Rule 501(b) of
Regulation D), nor any person acting on its behalf, (i) will not solicit offers
for, or offer or sell, the Notes by means of any form of general solicitation or
general advertising within the meaning of Regulation D or in any manner
involving a public offering within the meaning of Section 4(2) of the Securities
Act, and (ii) will solicit offers for the Notes only from, and will offer, sell
or deliver (the "Exempt Resales") the Notes, as part of its initial offering,
only to the following persons (each an "Eligible Purchaser") (A) persons whom
such Initial Purchaser reasonably believes to be qualified institutional buyers
("QIBs") as defined in Rule 144A under the Securities Act, as such rule may be
amended from time to time ("Rule 144A") or, if any such person is buying for one
or more institutional accounts for which such person is acting as fiduciary or
agent, only when such person has represented to such Initial Purchaser that each
such account is a QIB, to whom notice has been given that such sale or delivery
is being made in reliance on Rule 144A, (B) to a limited number of institutional
accredited investors as defined in Rule 501(a) (1), (2), (3) or (7) under
Regulation D ("Accredited Investors") that, prior to their purchase of the
Securities, execute and deliver a letter containing certain representations and
agreements in the form attached as Annex A to the Final Memorandum and (C)
outside the United States in offshore transactions to non-U.S. persons in
reliance on Regulation S.
(c) With respect to Securities sold in reliance on Regulation S, (i)
neither such Initial Purchaser nor any of its affiliates nor anyone acting on
its behalf has offered or sold, or will offer or sell, any Securities by means
of any directed selling efforts (as defined in Rule 902 of Regulation S) in the
United States, (ii) at or prior to confirmation of all sales of Securities made
in reliance on Regulation S, it will have sent to each distributor, dealer or
person receiving a selling concession, fee or other remuneration that purchases
the Securities from it during the restricted period a confirmation or notice to
substantially the following effect:
9
"The Securities covered hereby have not been registered under the U.S.
Securities Act of 1933 (the "Securities Act") and may not be offered or
sold within the United States or to, or for the account or benefit of,
U.S. persons (i) as part of a distribution thereof at any time or (ii)
otherwise until 40 days after the later of the date of the commencement of
the offering and the closing date, except in either case in accordance
with an exemption from or in a transaction not subject to the Securities
Act. Terms used above have the meanings given them by Regulation S."
The sale of the Securities to non-U.S. persons in offshore transactions is not
part of a plan or scheme to avoid the registration requirements of the
Securities Act.
(d) (i) It has not solicited, and will not solicit, offers to
purchase any of the Securities from, (ii) it has not sold, and will not sell,
any of the Securities to, and (iii) it has not distributed, and will not
distribute, the Preliminary Memorandum or the Final Memorandum to, any person or
entity in any jurisdiction outside of the United States except, in each case, in
compliance in all material respects with all applicable laws of such
jurisdiction. For purposes of this Agreement, "United States" means the United
States of America, its territories, its possessions (including the Commonwealth
of Puerto Rico), and other areas subject to its jurisdiction.
(e) Unless prohibited by applicable law, (i) it will furnish to each
person to whom it offers any Securities, a copy of the Preliminary Memorandum
(as amended or supplemented) or Final Memorandum or (unless delivery of such
Preliminary Memorandum is required by applicable law) shall inform each such
person that a copy of such Preliminary Memorandum or the Final Memorandum will
be available upon request and (ii) it will furnish to each person to whom it
sells Securities a copy of the Final Memorandum (as then amended or supplemented
by applicable law) and shall inform each such person that a copy of such Final
Memorandum will be available upon request.
4. Delivery of and Payment for the Notes. Delivery of and payment
for the Securities shall be made at the office of Latham & Watkins, 885 Third
Avenue, New York, New York at 9:00 A.M., New York City time, on April 22, 1998,
or at such other date or place as shall be determined by agreement between the
Initial Purchasers and the Company. This date and time are sometimes referred to
as the "Closing Date." On the Closing Date, the Issuers shall deliver or cause
to be delivered the Securities to the Initial Purchasers for the account of the
Initial Purchasers against payment to or upon the order of the Company of the
purchase price by wire transfer in federal (same-day) funds. Time shall be of
the essence, and delivery at the time and place specified pursuant to this
Agreement is a further condition of the obligation of the Initial Purchasers
hereunder. Upon delivery, the Securities shall be in the form required by the
Indenture and registered in the name of Cede & Co., as nominee of the Depository
Trust Company ("DTC"), or such other name or names and in such denominations as
the Initial Purchasers shall request in writing not less than one business day
prior to the Closing Date. For the purpose of expediting the checking and
packaging of the Securities, the Issuers shall make the Securities available for
inspection by the Initial Purchasers in New York, New York, not later than 2:00
P.M., New York City time, on the business day prior to the Closing Date.
5. Further Agreements of the Issuers. The Issuers jointly and
severally agree with each Initial Purchaser as set forth below in this Section
5:
(a) The Issuers will furnish to the Initial Purchasers, without
charge, as many copies of the Final Memorandum and any supplements and
amendments thereto as they may reasonably request.
10
(b) Prior to making any amendment or supplement to the Preliminary
Memorandum or the Final Memorandum, the Issuers shall furnish a copy thereof to
the Initial Purchasers and counsel to the Initial Purchasers and will not effect
any such amendment or supplement to which the Initial Purchasers shall
reasonably object by notice to the Company after a reasonable period to review.
(c) If, at any time prior to completion of the distribution of the
Securities by the Initial Purchasers, any event shall occur or condition exist
as a result of which it is necessary, in the opinion of counsel for the Initial
Purchasers or counsel for the Issuers, to amend or supplement the Final
Memorandum in order that the Final Memorandum will not include an untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein not misleading in light of the circumstances
existing at the time it is delivered to a purchaser, or if it is necessary to
amend or supplement the Final Memorandum to comply with applicable law, the
Issuers will promptly prepare such amendment or supplement as may be necessary
to correct such untrue statement or omission or so that the Final Memorandum, as
so amended or supplemented, will comply with applicable law and furnish to the
Initial Purchasers such number of copies of such amendment or supplement as they
may reasonably request.
(d) So long as any Securities are outstanding and are "Restricted
Securities" within the meaning of Rule 144(a)(3) under the Securities Act and
during any period in which the Issuers are not subject to Section 13 or 15(d) of
the Exchange Act of 1934, as amended (the "Exchange Act"), the Issuers will
furnish to holders of the Securities and prospective purchasers of Securities
designated by such holders, upon request of such holders or such prospective
purchasers, the information, if any, required to be delivered pursuant to Rule
144A(d)(4) under the Securities Act.
(e) So long as the Securities and Exchange Securities are
outstanding, the Issuers will furnish to the Initial Purchasers copies of any
annual reports, quarterly reports and current reports filed with the Securities
and Exchange Commission ("SEC") on Forms 10-K, 10-Q and 8-K, or such other
similar forms as may be designated by the SEC, and such other documents, reports
and information as shall be furnished by the Issuers to the Trustee or to the
holders of the Securities and Exchange Securities pursuant to the Indenture.
(f) The Issuers will use their best efforts at the Initial
Purchasers' reasonable request to qualify the Securities for sale under the
securities or Blue Sky laws of such jurisdictions as the Initial Purchasers
reasonably designate and to continue such qualifications in effect so long as
reasonably required for the distribution of the Securities. The Issuers will
also arrange for the determination of the eligibility for investment of the
Securities under the laws of such jurisdictions as the Initial Purchasers
reasonably request. Notwithstanding the foregoing, the Issuers shall not be
obligated to qualify as a foreign corporation in any jurisdiction in which they
are not so qualified or to file a general consent to service of process or to
subject themselves to taxation in respect of doing business in any jurisdiction
in which it is not otherwise subject.
(g) The Issuers will use their best efforts to permit the Securities
to be designated PORTAL securities in accordance with the rules and regulations
adopted by the National Association of Securities Dealers, Inc. relating to
trading in the PORTAL market and to permit the Securities to be eligible for
clearance and settlement through DTC.
(h) Except following the effectiveness of any Registration Statement
(as defined in the Registration Rights Agreement) and except for such offers as
may be made as a result of, or subsequent to, filing such Registration Statement
or amendments thereto prior to the effectiveness thereof, the Issuers will not,
and will cause their affiliates not to, solicit any offer to buy or offer to
sell the
11
Securities by means of any form of general solicitation or general advertising
(as those terms are used in Regulation D under the Securities Act) or in any
manner involving a public offering within the meaning of Section 4(2) of the
Securities Act.
(i) The Company will apply the net proceeds from the sale of the
Securities as set forth in the Final Memorandum.
(j) The Issuers will take such steps as shall be necessary to ensure
that neither the Company nor any of its subsidiaries shall become (i) an
"investment company" within the meaning of the Investment Company Act, or (ii) a
"holding company" or a "subsidiary company" or an "affiliate" of a holding
company within the meaning of the Public Utility Holding Company Act of 1935, as
amended.
(k) The Company and its subsidiaries will not, and will cause their
affiliates not to, take any action that would require the registration under the
Securities Act of the Securities (other than pursuant to the Registration Rights
Agreement) including, without limitation, (i) engaging in any directed selling
efforts (within the meaning of Regulation S) during any applicable restricted
period or (ii) offering any other securities in a manner that would be
integrated with the transactions contemplated hereby.
(l) The Issuers will do all things reasonably necessary to satisfy
the closing conditions set forth in Section 7 hereof.
6. Expenses. The Issuers, jointly and severally, agree to pay (a)
the costs incident to the authorization, issuance, sale and delivery of the
Securities and Exchange Securities and any issue or stamp taxes payable in that
connection; (b) the costs incident to the preparation and printing of the
Preliminary Memorandum, the Final Memorandum and any amendments, supplements and
exhibits thereto; (c) the costs of distributing the Preliminary Memorandum, the
Final Memorandum and any amendment or supplement thereto; (d) the fees and
expenses of qualifying the Securities and Exchange Securities under the
securities laws of the several jurisdictions as provided in Section 5(f) and of
preparing, printing and distributing a Blue Sky Memorandum (including reasonable
related fees and expenses of counsel to the Initial Purchasers); (e) the cost of
printing the Securities and the Exchange Securities; (f) the fees and expenses
of the Trustee and any agent of the Trustee and the fees and disbursements of
any counsel for the Trustee in connection with the Indenture and the Securities
and Exchange Securities; (g) any fees paid to rating agencies in connection with
the rating of the Securities and Exchange Securities; (h) the costs and expenses
of DTC and its nominee, including its book-entry system; (i) all expenses and
listing fees incurred in connection with the application for quotation of the
Securities on the PORTAL market; and (j) all other costs and expenses incident
to the performance of the obligations of the Issuers under this Agreement,
including the fees and expenses of Latham & Watkins, counsel to the Initial
Purchasers (up to a maximum of $225,000).
7. Conditions of Initial Purchaser's Obligations. The obligations of
the Initial Purchasers to purchase the Securities shall be subject to the
accuracy of the representations and warranties on the part of the Issuers
contained herein at the Execution Time and the Closing Date, to the accuracy of
the statements of the Issuers made in any certificates pursuant to the
provisions hereof, to the performance by the Issuers of their obligations
hereunder in all material respects and to the following additional conditions:
(a) The Initial Purchasers shall not have discovered and disclosed
to the Company on or prior to the Closing Date that the Final Memorandum or any
amendment or supplement thereto contains an untrue statement of a fact which, in
the opinion of Latham & Watkins, counsel for the Initial
12
Purchasers, is material or omits to state a fact which, in the opinion of such
counsel, is material and is necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading.
(b) The Final Memorandum shall have been printed and copies
distributed to the Initial Purchasers as soon as practicable but in no event
later than on the Business Day following the date of this Agreement or at such
later date and time as to which the Initial Purchasers may agree, and no stop
order suspending the qualification or exemption from qualification of the
Securities in any jurisdiction referred to in Section 5(f) shall have been
issued and no proceeding for that purpose shall have been commenced or shall be
pending or threatened.
(c) No action shall have been taken and no statute, rule, regulation
or order shall have been enacted, adopted or issued by any governmental agency
which would, as of the Closing Date, singly or in the aggregate, reasonably be
expected to have a Material Adverse Effect or prevent the issuance of the Notes
or the Subsidiary Guarantees or the consummation of the Acquisitions; no action,
suit or proceeding shall have been commenced and be pending against or affecting
or, to the knowledge of the Company, threatened against, the Company or any of
its subsidiaries before any court or arbitrator or any governmental body, agency
or official that, singly or in the aggregate, if adversely determined, would
reasonably be expected to result in a Material Adverse Effect; and no stop order
shall have been issued by the SEC or any governmental agency of any jurisdiction
referred to in Section 5(f) preventing the use of the Final Memorandum, or any
amendment or supplement thereto, or which would reasonably be expected to have a
Material Adverse Effect.
(d) Since the dates as of which information is given in the Final
Memorandum and other than as set forth in the Final Memorandum, (i) there shall
not have been any Material Adverse Change, or any development that is reasonably
likely to result in a Material Adverse Change, or any material change in the
long-term debt, or material increase in the short-term debt, from that set forth
in the Final Memorandum; (ii) no dividend or distribution of any kind shall have
been declared, paid or made by the Company on any class of its capital stock;
(iii) the Company and its subsidiaries shall not have incurred any liabilities
or obligations, direct or contingent, that are material, individually or in the
aggregate, to the Company and its subsidiaries, taken as a whole, and that are
required to be disclosed on a balance sheet or notes thereto in accordance with
generally accepted accounting principles and are not disclosed on the latest
balance sheet or notes thereto included in the Final Memorandum.
(e) The Initial Purchasers shall have received a certificate, dated
the Closing Date, signed on behalf of the Company by (i) R Steve Creamer, Chief
Executive Officer and (ii) J.I. Everest, II, Chief Financial Officer, confirming
that (A) such officers have participated in conferences with other officers and
representatives of the Issuers, representatives of the independent public
accountants of the Issuers and representatives of counsel to the Issuers at
which the contents of the Final Memorandum and related matters were discussed
and (B) the matters set forth in paragraphs (b), (c) and (d) of this Section 7
are true and correct as of the Closing Date.
(f) All corporate proceedings and other legal matters incident to
the authorization, form and validity of this Agreement, the Securities, the
Exchange Securities, the Indenture, the Registration Rights Agreement, the Final
Memorandum and all other legal matters relating to this Agreement and the
transactions contemplated hereby and thereby, shall be reasonably satisfactory
in all material respects to counsel for the Initial Purchasers, and the Issuers
shall have furnished to such counsel all documents and information that they may
reasonably request to enable them to pass upon such matters.
13
(g) Morgan, Lewis & Bockius LLP, counsel for the Issuers, shall have
furnished to the Initial Purchasers its written opinion substantially in the
form of Exhibit B hereto.
(h) Brett A. Hickman, Vice President and General Counsel of the
Company, shall have furnished to the Initial Purchasers his written opinion
substantially in the form of Exhibit C hereto.
(i) McNaul, Ebel, Nawrot, Helgren & Vance PLLC shall have furnished
to the Initial Purchasers its written opinion, as special Washington counsel to
Pozzolanic Resources, Inc., a written opinion substantially in form of Exhibit D
hereto.
(j) Heidman, Redmond, Fredregill, Patterson, Plaza & Dykstra L.L.P.
shall have furnished to the Initial Purchasers its written opinion, as special
Iowa counsel to Power Plant Aggregates of Iowa, Inc., a written opinion
substantially in form of Exhibit E hereto.
(k) Braun Kendrick Finkbeiner P.L.C. shall have furnished to the
Initial Purchasers its written opinion, as special Michigan counsel to U.S. Ash,
a written opinion substantially in form of Exhibit F hereto.
(l) Bridges, Young, Matthews & Drake P.L.C. shall have furnished to
the Initial Purchasers its written opinion, as special Arkansas counsel to Fly
Ash, a written opinion substantially in form of Exhibit G hereto.
(m) You shall have received on the Closing Date an opinion of Latham
& Watkins, counsel for the Initial Purchasers, dated the Closing Date and
addressed to you, in form and substance reasonably satisfactory to you.
(n) The Initial Purchasers shall have received a certificate, dated
the Closing Date and signed on behalf of the Company by J.I. Everest, II, Chief
Financial Officer, in form and substance satisfactory to the Initial Purchasers
and counsel for the Initial Purchasers, as to the solvency of the Company
following consummation of the Acquisitions.
(o) The Issuers and the Trustee shall have entered into the
Indenture and the Initial Purchasers shall have received counterparts, conformed
as executed, thereof.
(p) The Issuers and the Initial Purchasers shall have entered into
the Registration Rights Agreement and the Initial Purchasers shall have received
counterparts, conformed as executed, thereof.
(q) The Acquisitions shall be consummated prior to, or
simultaneously with, the Closing of the offering of the Notes on the terms
described in the Offering Memorandum in all material respects and the Initial
Purchasers shall have received counterparts, conformed as executed, of the
Acquisition Agreements and such other documentation as they deem necessary to
evidence the consummation thereof.
(r) There shall exist at and as of the Closing Date 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 Secured Credit Facility. On
the Closing Date, the Secured Credit Facility shall be in full force and effect
and shall not have been modified.
14
(s) At the Execution Time and at the Closing Date, Ernst & Young,
LLP and Coopers & Lybrand L.L.P. shall have furnished to the Initial Purchasers
a letter or letters, dated respectively as of the Execution Time and as of the
Closing Date, in form and substance reasonably satisfactory to the Initial
Purchasers, confirming that they are independent accountants within the meaning
of the Securities Act and the Exchange Act and the applicable rules and
regulations thereunder and Rule 101 of the Code of Professional Conduct of the
American Institute of Certified Public Accountants (the "AICPA") and otherwise
reasonably satisfactory in form and substance to the Initial Purchasers and
their counsel.
(t) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest financial statements included in the
Final Memorandum losses or interferences with their businesses, taken as a
whole, 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 Final Memorandum and
(ii) since such date 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 or its subsidiaries, taken as a whole, otherwise than
as set forth or contemplated in the Final Memorandum, the effect of which, in
any such case described in clause (i) or (ii), is, in the reasonable judgment of
the Initial Purchasers, so material and adverse as to make it impracticable or
inadvisable to proceed with the offering or the delivery of the Securities being
delivered on the Closing Date on the terms and in the manner contemplated herein
and in the Final Memorandum.
(u) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange or The NASDAQ Stock Market's National
Market or in the over-the-counter market shall have been suspended or materially
limited, or minimum prices shall have been established on such exchange by the
SEC, or by such exchange or by any other regulatory body or governmental
authority having jurisdiction, (ii) a banking moratorium shall have been
declared by Federal or state authorities, (iii) the United States shall have
become engaged in hostilities, there shall have been an escalation in
hostilities involving the United States or there shall have been a declaration
of a national emergency or war by the United States or (iv) there shall have
occurred such a material adverse change in general economic, political or
financial conditions (or the effect of international conditions on the financial
markets in the United States shall be such) as to make it, in the reasonable
judgment of the Initial Purchasers, impracticable or inadvisable to proceed with
the offering or delivery of the Securities being delivered on the Closing Date
on the terms and in the manner contemplated herein and in the Final Memorandum.
(v) As of the Closing Date, no "nationally recognized statistical
rating organization" as such term is defined for purposes of Rule 436(g)(2)
under the Securities Act (i) will have imposed (or will have informed the
Company or any Subsidiary Guarantor that it is considering imposing) any
condition (financial or otherwise) on the Company's or any Subsidiary
Guarantor's retaining any rating assigned to the Company or any Subsidiary
Guarantor, any securities of the Company or any Subsidiary Guarantor or (ii)
will have indicated to the Company or any Subsidiary Guarantor 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, any Subsidiary Guarantor or any securities of the Company or any
Subsidiary Guarantor.
(w) Latham & Watkins shall have been furnished with such documents,
in addition to those set forth above, as they may reasonably require for the
purpose of enabling them to review or
15
pass upon the matters referred to in this Section 7 and in order to evidence the
accuracy, completeness or satisfaction in all material respects of any of the
representations, warranties or conditions herein contained.
(x) Prior to the Closing Date, the Issuers shall have furnished to
the Initial Purchasers such further information, certificates and documents as
the Initial Purchasers may reasonably request.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Initial Purchasers.
8. Indemnification and Contribution. (a) The Issuers jointly and
severally agree to indemnify and hold harmless the Initial Purchasers, the
directors, officers, employees and agents (including, without limitation,
attorneys) of the Initial Purchasers and each person who controls any Initial
Purchaser within the meaning of either the Securities Act or the Exchange Act
against any and all losses, claims, damages or liabilities, joint or several, to
which they or any of them may become subject under the Securities Act, the
Exchange Act or other Federal or state statutory law or regulation, at common
law or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the Preliminary
Memorandum, the Final Memorandum or any information provided by the Issuers to
any holder or prospective purchaser of Notes pursuant to Section 5(e), or in any
amendment thereof or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and agree to reimburse
each such indemnified party, as incurred, for any reasonable legal or other
expenses, reasonably incurred by them, in connection with investigating or
defending any such loss, claim, damage, liability or action: provided, however,
that the Issuers will not be liable in any such case to any Initial Purchaser to
the extent that any such loss, claim, damage, liability or action arises out of
or is based upon any such untrue statement or alleged untrue statement or
omission or alleged omission relating to such Initial Purchaser made in the
Preliminary Memorandum or the Final Memorandum, or in any amendment thereof or
supplement thereto, in reliance upon and in conformity with written information
furnished to the Issuers by or on behalf of such Initial Purchaser specifically
for inclusion therein; provided, that the indemnification contained in this
paragraph (a) with respect to the Preliminary Memorandum shall not inure to the
benefit of the Initial Purchasers (or to the benefit of any person controlling
the Initial Purchasers) on account of any such loss, claim, damage, liability or
expense arising from the sale of the Securities by the Initial Purchasers to any
person if a copy of the Final Memorandum shall not have been delivered or sent
to such person and each untrue statement of a material fact contained in, and
each omission or alleged omission of a material fact from, such Preliminary
Memorandum was corrected in the Final Memorandum and it shall have been
determined that any Initial Purchaser and each person, if any, who controls such
Initial Purchaser would not have incurred such losses, claims, damages,
liabilities and expenses had the Final Memorandum been delivered or sent. The
foregoing indemnity agreement shall be in addition to any liability which the
Company may otherwise have.
(b) Each Initial Purchaser agrees severally and not jointly to
indemnify and hold harmless the Issuers, their directors, officers, employees
and agents (including, without limitation, attorneys), and each person who
controls the Issuers within the meaning of either the Securities Act or
16
the Exchange Act, to the same extent as the foregoing indemnity from the Issuers
to each Initial Purchaser, but only with reference to written information
relating to such Initial Purchaser furnished to the Issuers by or on behalf of
the Initial Purchaser specifically for inclusion in the Preliminary Memorandum
or the Final Memorandum (or in any amendment or supplement thereto). This
indemnity agreement will be in addition to any liability which any Initial
Purchaser may otherwise have. The Issuers and the Initial Purchasers acknowledge
that the statements set forth in the last paragraph of the cover page and under
the heading "Plan of Distribution" in the Preliminary Memorandum and the Final
Memorandum constitute the only information furnished in writing by or on behalf
of the Initial Purchasers for inclusion in the Preliminary Memorandum or the
Final Memorandum (or any amendment or supplement thereto).
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof, but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent such failure results in the forfeiture by the indemnifying party
of substantial rights and defenses and (ii) will not, in any event, relieve the
indemnifying party from any obligations to any indemnified party other than the
indemnification obligation provided in paragraph (a) or (b) above. The
indemnifying party shall be entitled to appoint counsel of the indemnifying
party's choice at the indemnifying party's expense to represent the indemnified
party in any action for which indemnification is sought (in which case the
indemnifying party shall not thereafter be responsible for the fees and expenses
of any separate counsel retained by the indemnified party or parties except as
set forth below); provided, however that such counsel shall be reasonably
satisfactory to the indemnified party. Notwithstanding the indemnifying party's
election to appoint counsel to represent the indemnified party in an action, the
indemnified party shall have the right to employ separate counsel (including
local counsel), and the indemnifying party shall bear the reasonable fees, costs
and expenses of such separate counsel if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would, in the opinion of
legal counsel to the indemnified party, present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have been informed in writing by legal counsel that
there may be legal defenses available to it and/or other indemnified parties
which are different from or additional to those available to the indemnifying
party, (iii) the indemnifying party shall not have employed counsel reasonably
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of the institution of such action or (iv) the
indemnifying party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party. An indemnifying party will
not, without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any pending
or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Issuers and the Initial Purchasers agree
to contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating or defending same) (collectively "Losses") to which the Issuers
and one or more of the Initial Purchasers may be subject in such proportion as
is appropriate to reflect the relative benefits received by the Issuers on the
one hand
17
and by the Initial Purchasers on the other from the offering of the Securities;
provided, however, that in no case shall any Initial Purchaser be responsible
for any amount in excess of the purchase discount or commission applicable to
the Securities purchased by the such Initial Purchaser hereunder. If the
allocation provided by the immediately preceding sentence is unavailable for any
reason, the Issuers and the Initial Purchasers shall contribute in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Issuers and of the Initial Purchaser in connection
with the statements or omissions which resulted in such Losses as well as any
other relevant equitable considerations. Benefits received by the Issuers shall
be deemed to be equal to the total net proceeds from the offering (before
deducting expenses), and benefits received by the Initial Purchasers shall be
deemed to be equal to the total purchase discounts and commissions received by
the Initial Purchasers from the Issuers in connection with the purchase of the
Securities hereunder. Relative fault shall be determined by reference to whether
any alleged untrue statement or omission relates to information provided by the
Issuers or the Initial Purchasers. The Issuers and the Initial Purchasers agree
that it would not be just and equitable if contribution were determined by pro
rata allocation or any other method of allocation that does not take account of
the equitable considerations referred to above. Notwithstanding the provisions
of this paragraph (d), no person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 8, each person who controls an
Initial Purchaser within the meaning of either the Securities Act or the
Exchange Act and each director, officer, employee and agent of an Initial
Purchaser shall have the same rights to contribution as such Initial Purchaser,
and each person who controls the Issuers within the meaning of either the
Securities Act or the Exchange Act and each partner, officer, director, employee
and agent of the Issuers shall have the same rights to contribution as the
Issuers, subject in each case to the applicable terms and conditions of this
paragraph (d).
9. Termination. The obligations of the Initial Purchasers hereunder
may be terminated by the Initial Purchasers by notice given to and received by
the Company prior to delivery of and payment for the Securities if, prior to
that time, any of the events described in Sections 7(n) or 7(o) shall have
occurred or if the Initial Purchasers shall decline to purchase the Securities
for any reason permitted under this Agreement.
10. Reimbursement of Initial Purchaser's Expenses. If (a) the
Issuers shall fail to tender the Securities for delivery to the Initial
Purchasers otherwise than for any reason permitted under this Agreement or (b)
the Initial Purchasers shall decline to purchase the Securities for any reason
permitted under this Agreement, the Issuers shall reimburse the Initial
Purchasers for the reasonable fees and expenses of their counsel (up to a
maximum of $225,000) and for such other reasonable out-of-pocket expenses as
shall have been incurred by them in connection with this Agreement and the
proposed purchase of the Securities, and upon demand the Issuers shall pay the
full amount thereof to the Initial Purchasers.
11. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Initial Purchasers, shall be delivered or sent by
mail, telex or facsimile transmission to NationsBanc Montgomery Securities LLC,
100 North Tryon Street, 20th Floor, Charlotte, North Carolina 28255, Attention:
Scott Holmes, with a copy to Latham & Watkins, 885 Third Avenue, New York, New
York 10022, Attention: Kirk A. Davenport;
(b) 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 Final
Memorandum, Attention: R Steve
18
Creamer, with a copy to Morgan, Lewis & Bockius LLP, 101 Park Avenue, New York,
New York 10178, Attention: David P. Blea.
Any such statements, requests, notices or agreements shall take
effect at the time of receipt thereof. The Issuers shall be entitled to act and
rely upon any request, consent, notice or agreement given or made on behalf of
the Initial Purchasers.
12. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Initial Purchasers, the Issuers
and their respective successors. This Agreement and the terms and provisions
hereof are for the sole benefit of only those persons, except that (A) the
representations, warranties, indemnities and agreements of the Issuers contained
in this Agreement shall also be deemed to be for the benefit of directors,
officers, employees and agents (including, without limitation, attorneys) of the
Initial Purchasers and the person or persons, if any, who control an Initial
Purchasers within the meaning of Section 15 of the Securities Act and (B) the
indemnity agreement of the Initial Purchasers contained in Section 8(b) of this
Agreement shall be deemed to be for the benefit of directors of the Issuers,
officers, employees and agents (including, without limitation, attorneys) of the
Issuers and any person controlling any of the Issuers within the meaning of
Section 15 of the Securities Act. Nothing in this Agreement is intended or shall
be construed to give any person, other than the persons referred to in this
Section 12, any legal or equitable right, remedy or claim under or in respect of
this Agreement or any provision contained herein.
13. Survival. The respective indemnities, representations,
warranties and agreements of the Issuers and the Initial Purchasers contained in
this Agreement or made by or on behalf on them, respectively, pursuant to this
Agreement, shall survive the delivery of and payment for the Securities and
shall remain in full force and effect, regardless of any investigation made by
or on behalf of any of them or any person controlling any of them.
14. Definition of "Business Day." For purposes of this Agreement,
"business day" means each Monday, Tuesday, Wednesday, Thursday and Friday that
is not a day on which banking institutions in The City of New York, New York are
authorized or obligated by law, executive order or regulation to close.
15. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICT OF LAW RULES THEREOF.
16. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
17. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
[Signature page follows]
19
If the foregoing correctly sets forth the agreement between the
Issuers and the Initial Purchaser, please indicate your acceptance in the space
provided for that purpose below.
Very truly yours,
JTM INDUSTRIES, INC.
By: /s/ J.I. Everest II
-------------------------------
Name: J.I. Everest II
Title: Treasurer & CFO
POZZOLANIC RESOURCES, INC.
By: /s/ J.I. Everest II
-------------------------------
Name: J.I. Everest II
Title: Treasurer & CFO
POWER PLANT AGGREGATES OF IOWA, INC.
By: /s/ J.I. Everest II
-------------------------------
Name: J.I. Everest II
Title: Treasurer & CFO
KBK ENTERPRISES, INC.
By: /s/ J.I. Everest II
-------------------------------
Name: J.I. Everest II
Title: Treasurer & CFO
The foregoing Purchase Agreement
is hereby confirmed and accepted
as of the date first above written.
NATIONSBANC MONTGOMERY SECURITIES LLC
By: /s/ J. Scott Holmes
------------------------------
Name: J. Scott Holmes
Title: Principal
CIBC OPPENHEIMER CORP.
By:
------------------------------
Name:
Title:
The foregoing Purchase Agreement
is hereby confirmed and accepted
as of the date first above written.
NATIONSBANC MONTGOMERY SECURITIES LLC
By:
------------------------------
Name:
Title:
CIBC OPPENHEIMER CORP.
By: /s/ Edward Levy
------------------------------
Name: Edward Levy
Title: Managing Director
To be executed on the Closing Date:
The undersigned hereby confirms that the
the foregoing letter, as of the date thereof,
correctly sets forth the agreement between
the Initial Purchasers, the Issuers, the
Subsidiary Guarantors and the undersigned
MICHIGAN ASH SALES COMPANY, D.B.A
U.S. ASH COMPANY
By: /s/ J.I. Everest II
-------------------------------
Name: J.I. Everest II
Title: Treasurer & CFO
U.S. STABILIZATION, INC.
By: /s/ J.I. Everest II
-------------------------------
Name: J.I. Everest II
Title: Treasurer & CFO
FLO FIL CO., INC.
By: /s/ J.I. Everest II
-------------------------------
Name: J.I. Everest II
Title: Treasurer & CFO
FLY ASH PRODUCTS, INC.
By: /s/ J.I. Everest II
-------------------------------
Name: J.I. Everest II
Title: Treasurer & CFO
EXHIBIT A
Registration Rights Agreement
EXHIBIT B
Form of Opinion of Morgan, Lewis & Bockius LLP
EXHIBIT B
[MLB letterhead]
April __, 1998
NationsBanc Montgomery Securities LLC
100 North Tryon Street
7th Floor
Charlotte, NC 28255
CIBC Oppenheimer Corp.
425 Lexington Avenue
3rd Floor
New York, NY 10017
Ladies and Gentlemen:
We have acted as special counsel to JTM Industries, Inc., a Texas
corporation (the "Company"), in connection with the issuance and sale by the
Company, pursuant to the Purchase Agreement (the "Purchase Agreement"), dated
April __, 1998, among the Company, certain subsidiaries of the Company, and
NationsBanc Montgomery Securities LLC and CIBC Oppenheimer Corp. (collectively,
the "Initial Purchasers") of $100,000,000 aggregate principal amount of the
Company's __% Senior Subordinated Notes due 2008 (the "Notes"), being issued
pursuant to an Indenture (the "Indenture"), dated as of the date hereof, among
the Company, the Subsidiary Guarantors (as defined) and U.S. Bank National
Association, as trustee (the "Trustee"). The Notes are guaranteed (the
"Subsidiary Guarantees"), jointly and severally, on a senior subordinated basis
by all existing domestic subsidiaries of the Company (including U.S. Ash and
Fly Ash) (the "Subsidiary Guarantors").
This opinion is being rendered to you, as Initial Purchasers of the Notes,
pursuant to Section 7(g) of the Purchase Agreement. Except as otherwise
specified, terms used herein have the respective meanings ascribed to them in
the Purchase Agreement.
For the purposes of this opinion, we have examined, among other things:
(i) the preliminary offering memorandum, dated March 27, 1998, and the final
offering memorandum, dated April __,1998 (the "Offering Memorandum"), each
relating to the Notes to be issued by the Company in a private placement under
the Securities Act of 1933, as amended (the "Securities Act"); (ii) the Purchase
Agreement; (iii) the Indenture: and (iv) the Registration Rights Agreement (the
"Registration Rights Agreement"), dated the date hereof, among the Company, the
Subsidiary Guarantors and the Initial Purchasers, providing for the registration
of the Notes under the Securities Act (collectively, the "Transaction
Documents").
We have also examined originals, or copies certified or otherwise
identified to our satisfaction, of the corporate charter of the Company and each
Subsidiary Guarantor and certain resolutions adopted by the boards of directors
of the Company and each Subsidiary Guarantor. We have also examined and relied
upon representations by the Company and each Subsidiary Guarantor as to factual
matters contained in the Purchase Agreement and upon representations by the
Company and each Subsidiary Guarantor in certificates of officers of the Company
and of the Subsidiary Guarantors delivered pursuant to the Purchase Agreement.
We have also relied upon certificates of public officers and of officers and
other representatives of the Company and of the Subsidiary Guarantors, which
have been furnished to you.
In connection with our examination of the foregoing, we have assumed,
without any investigation, the genuineness of all signatures, the authenticity
of all documents submitted to us as originals, the conformity to original
documents of all documents submitted to us as certified or photostatic copies
and the authenticity of the originals of such latter documents.
Based upon the foregoing, we are of the following opinion:
(i) the statements in the Offering Memorandum under the heading
"Business-Government Regulation" to the extent that they constitute
summaries of matters of law or regulation or legal conclusions, have been
reviewed by us and fairly summarize the matters described therein in all
material respects and nothing has been omitted from such statements which
would make the same misleading in any material respect; and we do not have
actual knowledge of any current or pending material legal or governmental
actions, suits or proceedings which would be required to be described in
the Offering Memorandum if the Offering Memorandum were a prospectus
included in a registration statement on Form S-1 and which are not
described as so required;
(ii) assuming due authorization, execution and delivery of the
Registration Rights Agreement by the parties thereto, the Registration
Rights Agreement constitutes a valid and legally binding agreement of the
Company and each of the Subsidiary Guarantors enforceable against the
Company and each of the Subsidiary Guarantors, respectively, in accordance
with its terms, except as (A) such enforceability may be limited by
bankruptcy, insolvency, fraudulent transfer, fraudulent conveyance,
reorganization, arrangement, moratorium or similar laws relating to or
affecting the enforcement of creditors' rights generally and may be
subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law), and (B)
the availability of equitable remedies may be limited by equitable
principles of general applicability; and except to the extent that the
indemnification or contribution provisions thereof may be unenforceable;
(iii) assuming due authorization, execution and delivery of the
Indenture by the parties hereto, the indenture constitutes a valid and
legally binding agreement of the Company and each of the Subsidiary
Guarantors, respectively, enforceable against the
-2-
Company and each of the Subsidiary Guarantors, respectively, in accordance
with its terms, except as (A) such enforceability may be limited by
bankruptcy, insolvency, fraudulent transfer, fraudulent conveyance,
reorganization, arrangement, moratorium or similar laws relating to or
affecting the enforcement of creditors' rights generally and may be
subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law), and (B)
the availability of equitable remedies may be limited by equitable
principles of general applicability;
(iv) assuming due authorization, execution and delivery of the
Exchange Notes by the parties thereto and due authentication of the Notes
by the Trustee, the Exchange Notes will constitute valid and legally
binding agreements of the Company and each of the Subsidiary Guarantors,
respectively, enforceable against the Company and each of the Subsidiary
Guarantors, respectively, in accordance with their terms, except as (A)
such enforceability may be limited by bankruptcy, insolvency, fraudulent
transfer, fraudulent conveyance, reorganization, arrangement, moratorium
or similar laws relating to or affecting the enforcement of creditors'
rights generally and may be subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding
in equity or at law), and (B) the availability of equitable remedies may
be limited by equitable principles of general applicability;
(v) assuming due authorization, execution and delivery of the Notes
by the Company and the Subsidiary Guarantees by the Subsidiary Guarantors
and due authentication of the Notes by the Trustee and upon payment and
delivery in accordance with the Purchase Agreement the Notes and
Subsidiary Guarantees constitute legally binding obligations of the
Company and the Subsidiary Guarantors, respectively, entitled to the
benefits of the Indenture and enforceable against the Company and the
Subsidiary Guarantors, respectively, in accordance with their terms,
except as (A) such enforceability may be limited by bankruptcy,
insolvency, fraudulent transfer, fraudulent conveyance, reorganization,
arrangement, moratorium or similar laws relating to or affecting the
enforcement of creditors' rights generally and may be subject to general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law), and (B) the availability
of equitable remedies may be limited by equitable principles of general
applicability;
(vi) each Transaction Document conforms in all material respects to
the description thereof contained in the Offering Memorandum;
(vii) no consent, approval, authorization or order of, or filing or
registration with, any court or arbitrator or governmental agency or body
is required for the execution, delivery and performance by the Company and
each of the Subsidiary Guarantors of each of the Transaction Documents to
which it is a party, the issuance, sale and delivery of the Securities and
compliance by the Company and each of the Subsidiary Guarantors with the
terms thereof and the consummation of the transactions contemplated by the
-3-
Transaction Documents, except for such consents, approvals,
authorizations, filings, registrations or qualifications as may be
required to be obtained or made under the Securities Act as provided in
the Registration Rights Agreement and applicable state securities laws;
(viii) none of the Company or the Subsidiary Guarantors is, or will
be, after giving effect to the Offering and the application of the net
proceeds therefrom, (A) an "investment company" or a company "controlled
by" an investment company within the meaning of the Investment Company Act
and the rules and regulations of the Commission thereunder, without taking
account of any exemption under the Investment Company Act arising out of
the number of holders of the securities of the Company or the Subsidiary
Guarantors or (B) a "holding company" or a "subsidiary company" of a
holding company or an "affiliate" thereof within the meaning of the Public
Utility Holding Company Act of 1935, as amended;
(ix) assuming the accuracy of the representations and warranties of
the Initial Purchasers contained in the Purchase Agreement and their
compliance with the agreements and restrictions set forth therein and in
the Offering Memorandum, it is not necessary, in connection with the
issuance and sale of the Securities to the Initial Purchasers and the
offer, resale and delivery of the Securities by the Initial Purchasers in
the manner contemplated by the Purchase Agreement and the Offering
Memorandum, (i) to register the Securities under the Securities Act or
(ii) to qualify the Indenture or the Subsidiary Guarantees under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), provided,
however that such registration and qualification may otherwise be required
as a result of the Exchange Offer Registration Statement or the Shelf
Registration Statement, as the case may be, to be filed pursuant to the
Registration Rights Agreement;
(x) the execution and delivery by the Company and each of the
Subsidiary Guarantors of the Purchase Agreement, the Indenture, the
Registration Rights Agreement, each of the Acquisition Agreements and the
Secured Credit Facility (or, in the case of the Subsidiary Guarantors, the
guarantees related thereto), the consummation by the Company and the
Subsidiary Guarantors of the transactions contemplated hereby and thereby
and by the Final Memorandum will not (A) to our knowledge, result in a
breach or violation of any of the terms or provisions of, or constitute a
default under, any material agreement or instrument of the Company or any
of its subsidiaries or (B) result in any violation of the provisions of
the charter, partnership agreement or bylaws of the Company or any of its
subsidiaries, or, to our knowledge, any applicable law, rule or regulation
(other than Securities Laws (as defined below) as to which an opinion is
given in paragraph (ix) above) with respect to the Company or any of its
subsidiaries or, to our knowledge, any rule or regulation (other than
Securities Laws (as defined below) as to which an opinion is given in
paragraph (ix) above) or order of any court or governmental agency having
jurisdiction over the Company or any of its subsidiaries, except for such
-4-
violations that would not, singly or in the aggregate, reasonably be
expected to have a Material Adverse Effect; and, to our knowledge, except
for such consents, approvals or authorizations of, or filings,
registrations or qualifications with, governmental authorities as may be
required under the Securities Act and the rules and regulations
thereunder, the Trust Indenture Act and the rules and regulations
thereunder or applicable states securities or Blue Sky laws, rules or
regulations (all of such laws, rules and regulations are collectively
referred to herein as "Securities Laws") in connection with the purchase
and distribution of the Notes by the Initial Purchasers and as set forth
in, and in order to consummate the transactions contemplated by, the
Registration Rights Agreement, no consent, approval, authorization or
order of, or filing or registration with, any such court or governmental
agency or body is required in connection with the execution and delivery
by the Company and the Subsidiary Guarantors of the Purchase Agreement,
the Indenture, the Registration Rights Agreement or the Secured Credit
Facility, the consummation by the Company and the Subsidiary Guarantors of
the transactions contemplated hereby and thereby and the issuance and sale
of the Securities and Exchange Securities by the Company and the
Subsidiary Guarantors; and
(xi) Assuming the Initial Purchasers purchase the Securities in
accordance with Rule 144A under the Securities Act, neither the issuance
or sale of the Securities nor the application by the Company of the net
proceeds thereof as set forth in the Offering Memorandum will violate
Regulation T, U or X of the Board of Governors of the Federal Reserve
System.
We have participated in conferences with officers and other
representatives of the Company, its auditors, and your representatives at which
the contents of the Offering Memorandum and related matters were discussed.
Based upon such participation and review, and relying as to materiality in part
upon the factual statements of officers and other representatives of the
Company, we advise you that no facts have come to our attention that have caused
us to believe that the Offering Memorandum (except for the financial statements,
schedules and related data and other financial or statistical data, as to which
we have not been asked to comment), as of the date of such Offering Memorandum
and as of the date hereof, contained an untrue statement of a material fact or
omitted 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. However, because the primary purpose of our engagement was not to
confirm factual matters or financial or accounting matters and because of the
wholly or partially non-legal character of many of the statements contained in
the Offering Memorandum, we are not passing upon and do not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Offering Memorandum (except to the extent expressly set forth
in paragraph (i) above), and we have not independently verified the accuracy,
completeness or fairness of such statements (except as aforesaid). Without
limiting the foregoing, we assume no responsibility for, have not independently
verified and have not been asked to comment on the accuracy, completeness or
fairness of the financial statements, schedules and other financial or
statistical data included in the Offering Memorandum, and we have not examined
the accounting,
-5-
financial or other records from which such financial statements, schedules and
other financial or statistical data and information were derived. We note that,
although certain portions of the Offering Memorandum (including financial
statements and related data) have been included therein on the authority of
"experts" within the meaning of the Securities Act, we are not experts with
respect to any portion of the Offering Memorandum, including, without
limitation, such financial statements and related data and other financial or
accounting data included therein.
We render the foregoing opinions as members of the Bar of the State of New
York and express no opinion as to laws other than the laws of the State of New
York and the Federal laws of the United States of America.
Our opinion is given as of the date hereof and we assume no obligation to
update or supplement this opinion to reflect any facts or circumstances which
may hereafter come to our attention or changes in law which may hereafter occur.
This opinion may not be used, circulated, quoted or otherwise referred to for
any purpose without our prior written consent.
Except as provided in the succeeding sentence, this opinion is solely for
the benefit of the addressees hereof and may not be used, circulated, quoted or
otherwise referred to for any purpose without our prior written consent. U.S.
Bank National Association, in its capacity as Trustee under the Indenture, may
rely upon paragraphs (iii), (iv) and (viii) of this opinion as though it were
addressed to it.
Very truly yours,
-6-
EXHIBIT C
Form of Opinion of Brett A. Hickman
EXHIBIT C
[JTM letterhead]
April __, 1998
Nationsbanc Montgomery Securities LLC
100 North Tryon Street
7th Floor
Charlotte, NC 28255
CIBC Oppenheimer Corp.
425 Lexington Avenue
3rd Floor
New York, NY 10017
Ladies and Gentlemen:
I am the Vice President and General Counsel of JTM Industries, Inc., a
Texas corporation (the "Company") and in that capacity am familiar with the
issuance and sale by the Company, pursuant to the Purchase Agreement (the
"Purchase Agreement"), dated April 17, 1998, among the Company, certain
subsidiaries of the Company, and Nationsbanc Montgomery Securities LLC and CIBC
Oppenheimer Corp. (collectively, the "Initial Purchasers") of $100,000,000
aggregate principal amount of the Company's 10% Senior Subordinated Notes due
2008 (the "Notes"), being issued pursuant to an Indenture (the "Indenture"),
dated as of the date hereof, among the Company, the Subsidiary Guarantors (as
defined) and U.S. Bank National Association, as trustee (the "Trustee"). The
Notes are guaranteed (the "Subsidiary Guarantees"), jointly and severally, on a
senior subordinated basis by all existing domestic subsidiaries of the Company
(the "Subsidiary Guarantors").
This opinion is furnished to you pursuant to Section 7(h) of the Purchase
Agreement. Except as otherwise specified, terms used herein have the meanings
ascribed to them in the Purchase Agreement.
In giving the opinions expressed below, I have examined, among other
things: (i) the preliminary offering memorandum, dated March 27, 1998, and the
final offering memorandum, dated April 17, 1998 (the "Offering Memorandum"),
each relating to the Notes being issued by the Company in a private placement
under the Securities Act of 1933, as amended (the "Securities Act"); (ii) the
Purchase Agreement; (iii) the Indenture; and (iv) the Registration Rights
Agreement (the "Registration Rights Agreement"), dated the date hereof, among
the Company, the Subsidiary Guarantors and the Initial Purchasers, providing for
the registration of the Notes under the Securities Act (collectively, the
"Transaction Documents").
I have also examined originals, or copies satisfactory to me, of all such
corporate records, agreements, certificates, governmental orders, permits and
other documents as I have deemed relevant and necessary as a basis for the
opinions hereinafter expressed. In such examination I
have assumed the genuineness of all signatures, the authenticity of all
documents submitted to me as originals and the conformity with the original
documents of all documents submitted to me as copies. As to any facts material
to such opinions (including determinations with respect to the question of
materiality to the Company's business), I have relied upon the representations
and warranties in the Purchase Agreement, certificates of public officials and
certificates, oaths and declarations of officers or other representatives of the
Company and the Subsidiary Guarantors.
In rendering the opinions expressed below, I have assumed (i) the due
authorization, execution and delivery by each party thereto other than the
Company of the Purchase Agreement, the Registration Rights Agreement, and the
Indenture, and (ii) the legal right and power of such persons under all
applicable laws and regulations to execute, deliver and perform their respective
obligations under, and the validity, binding effect and enforceability against
such persons in accordance with their terms of, the Purchase Agreement, the
Registration Rights Agreement, and the Indenture.
Based on and subject to the foregoing, and subject to the limitations,
qualifications, assumptions and exceptions set forth herein, I am of the opinion
that as of the date hereof:
(i) The Company is validly existing as a corporation and is in good
standing under the laws of the State of Texas. The Company and each of its
subsidiaries are duly qualified to do business and in good standing as
foreign organizations in each jurisdiction in which they own property,
maintain a business or have employees (except where failure to so qualify
would not, singly or in the aggregate, reasonably be expected to have a
Material Adverse Effect).
(ii) The Company has the corporate power and authority to execute
and deliver, and to consummate the transactions contemplated by, the
Purchase Agreement, and the Company has the corporate power and authority
to issue and deliver the Notes as contemplated by the Purchase Agreement.
(iii) The execution and delivery of the Purchase Agreement have been
duly authorized by all requisite corporate action of the Company, and the
Purchase Agreement has been duly executed and delivered by the Company.
(iv) The execution and delivery of the Indenture have been duly
authorized by all requisite corporate action of the Company; and the
Indenture has been duly executed and delivered by the Company.
(v) The execution and delivery of the Notes have been duly
authorized by all requisite corporate action of the Company; and the Notes
have been duly executed and delivered by the Company.
(vi) The execution and delivery of the Registration Rights Agreement
have been duly authorized by all requisite corporate action of the
Company; and the Registration Rights Agreement has been duly executed and
delivered by the Company.
(vii) All of the capital stock of the Company's subsidiaries is
owned of record by the Company. All shares of capital stock of the
Company's subsidiaries have been duly
2
authorized and validly issued, are fully paid and nonassessable and, except as
disclosed in the Offering Memorandum, to my knowledge, all such shares are owned
by the Company free and clear of any security interests, liens, pledges or
encumbrances.
(viii) The Company and each of its subsidiaries has obtained each material
license, permit, patent, certificate, franchise or other governmental
authorization or permit (collectively, "Permits") necessary to ownership of its
properties or to the conduct of its business as described in the Offering
Memorandum, other than Permits being applied for in the ordinary course of
business and other than Permits the violation of or failure to obtain which
would not, singly or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(ix) To my knowledge, neither the Company nor any of its subsidiaries is
in violation of its corporate charter or by-laws, or in default under any
agreement (including loan and credit agreements), indenture or instrument known
to me, which default could, singly or in the aggregate, reasonably be expected
to have a Material Adverse Effect; to the best of my knowledge, the Company and
each of its subsidiaries is not in violation of any material law, ordinance,
governmental rule or regulation or court decree to which it may be subject which
violation, singly or in the aggregate, would reasonably be expected to have a
Material Adverse Effect.
(x) To my knowledge, the Company and its subsidiaries own or otherwise
possess the right to use all patents, trademarks, service marks, trade names and
copyrights, any applications and registrations for each of the foregoing, used
in the conduct of their respective businesses as currently conducted; and, to my
knowledge, neither the Company nor any of its subsidiaries has received any
notice, of any infringement of or conflict with the rights of any third party
with respect to any of the foregoing which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would have a Material
Adverse Effect on the Company.
(xi) To my knowledge, there are no pending actions or suits or judicial,
arbitral, rule-making, administrative or other proceedings to which the Company
or any of its subsidiaries is a party or of which any properties or assets of
the Company or any of its subsidiaries is the subject which (A) singularly or in
the aggregate, if determined adversely to the Company or any of its
subsidiaries, could reasonably be expected to have a Material Adverse Effect or
(B) question the validity or enforceability of any of the Transaction Documents
or any action taken or to be taken pursuant thereto; and to my knowledge, no
such proceedings are threatened or contemplated by governmental authorities or
threatened by others.
(xii) The execution, delivery and performance by the Company and each
Subsidiary Guarantor of each of the Transaction Documents to which it is a
party, the issuance, sale and delivery of the Securities and compliance by the
Company and the Subsidiary Guarantors with the terms thereof and the
consummation of the transactions contemplated by the Transaction Documents will
not conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any properties or assets of
3
the Company or any of the Subsidiary Guarantors pursuant to, any
indenture, mortgage, deed of trust, loan agreement, lease, charter or
other material agreement or instrument, known to me and to which the
Company or any of the Subsidiary Guarantors is a party or by which the
Company or any of the Subsidiary Guarantors is bound or to which any of
the properties or assets of the Company or any of the Subsidiary
Guarantors is subject.
I express no opinion as to the enforceability of any provisions of the
Indenture, the Securities, the Registration Rights Agreement or the Purchase
Agreement. My opinions are limited to matters expressly stated herein, no
opinion may be inferred or implied beyond the matters expressly stated.
This opinion is given as of the date hereof and I assume no obligation to
update or supplement this opinion to reflect any facts or circumstances which
may hereafter come to my attention or changes in law which may hereafter occur.
Except as provided in the succeeding sentence, this opinion is solely for
the benefit of the addressees hereof and may not be used, circulated, quoted or
otherwise referred to for any purpose without my prior written consent. U.S.
Bank National Association, in its capacity as Trustee under the Indenture, may
rely upon paragraphs (ii), (iv), (v) and (xii) of this opinion as though it were
addressed to it.
Very truly yours,
---------------------------------------
Brett A. Hickman
4
EXHIBIT D
Form of Opinion of McNaul, Ebel, Nawrot, Heigren & Vance PLLC
EXHIBIT D
[McNaul, Ebel, Nawrot, Heigren & Vance PLLC letterhead]
April ___,1998
Nationsbanc Montgomery Securities LLC
100 North Tryon Street
7th Floor
Charlotte, NC 28255
CIBC Oppenheimer Corp.
425 Lexington Avenue
3rd Floor
New York, NY 10017
Ladies and Gentlemen:
We have acted as special Washington counsel to Pozzolanic Resources,
Inc., a Washington corporation (the "Company"), in connection with the issuance
and sale by JTM Industries, Inc. ("JTM"), pursuant to the Purchase Agreement
(the "Purchase Agreement"), dated April 17, 1998, among JTM, the Company,
certain other subsidiaries of JTM, and Nationsbanc Montgomery Securities LLC and
CIBC Oppenheimer Corp. (collectively, the "Initial Purchasers") of $100,000,000
aggregate principal amount of JTM's 10% Senior Subordinated Notes due 2008 (the
"Notes"), being issued pursuant to an Indenture (the "Indenture"), dated as of
the date hereof, among JTM, the Company, the other Subsidiary Guarantors (as
defined) and U.S. Bank National Association, as trustee (the "Trustee"). The
Notes are guaranteed (the "Subsidiary Guarantees"), jointly and severally, on a
senior subordinated basis by all existing domestic subsidiaries of JTM (the
"Subsidiary Guarantors"), including the Company.
This opinion is furnished to you pursuant to Section 7(i) of the Purchase
Agreement. Except as otherwise specified, terms used herein have the meanings
ascribed to them in the Purchase Agreement.
In giving the opinions expressed below, we have examined, among other
things: (i) the preliminary offering memorandum, dated March 27, 1998, and the
final offering memorandum, dated April 17, 1998 (the "Offering Memorandum"),
each relating to the Notes being issued by JTM in a private placement under the
Securities Act of 1933, as amended (the "Securities Act"); (ii) the Purchase
Agreement; (iii) the Indenture; and (iv) the Registration Rights Agreement (the
"Registration Rights Agreement"), dated the date hereof, among JTM, the Company,
the other Subsidiary Guarantors and the Initial
Purchasers, providing for the registration of the Notes under the Securities Act
(collectively, the "Transaction Documents").
We have also examined originals, or copies satisfactory to us, of all such
corporate records, agreements, certificates, governmental orders, permits and
other documents as we have deemed relevant and necessary as a basis for the
opinions hereinafter expressed. In such examination we have assumed the
genuineness of all signatures, the authenticity of all documents submitted to us
as originals and the conformity with the original documents of all documents
submitted to us as copies. As to any facts material to such opinions (including
determinations with respect to the question of materiality to the Company's
business), we have relied upon the representations and warranties in the
Purchase Agreement, certificates of public officials and certificates, oaths and
declarations of officers or other representatives of the Company.
The opinions expressed below are limited to the laws of the state of
Washington. In rendering the opinions expressed below, we have assumed (i) the
due authorization, execution and delivery by each party thereto other than the
Company of the Purchase Agreement, the Registration Rights Agreement, and the
Indenture, (ii) the legal right and power of such persons under all applicable
laws and regulations to execute, deliver and perform their respective
obligations under, and the validity, binding effect and enforceability against
such persons in accordance with their terms of, the Purchase Agreement, the
Registration Rights Agreement, and the Indenture, and (iii) that the Articles of
Incorporation and By-Laws of the Company furnished to us are complete, and the
minutes of the Board of Directors meetings of the Company furnished to us
accurately reflect actions taken at meetings at which a quorum was present.
We express no opinion regarding the securities laws issues related to the
issuance of the Notes or the Indenture or the transactions related thereto.
Based upon and subject to the foregoing, we are of the opinion that:
(i) The Company is validly existing as a corporation and is in good
standing under the laws of Washington.
(ii) The Company has the corporate power and authority to execute
and deliver, and to consummate the transactions contemplated by, the
Purchase Agreement, and the Company has the corporate power and authority
to issue and deliver its Subsidiary Guarantee as contemplated by the
Purchase Agreement.
(iii) The execution and delivery of the Purchase Agreement have been
duly authorized by all requisite corporate action of the Company, and the
Purchase Agreement has been duly executed and delivered by the Company.
(iv) The execution and delivery of the Indenture (including the
Company's Subsidiary Guarantee) have been duly authorized by all requisite
corporate action of the Company, and the Indenture (including the
Company's Subsidiary Guarantee) has been duly executed and delivered by
the Company.
2
(v) The execution and delivery of the Registration Rights Agreement
have been duly authorized by all requisite corporate action of the
Company, and the Registration Rights Agreement has been duly executed and
delivered by the Company.
(vi) All shares of capital stock of the Company have been duly
authorized and validly issued, and are fully paid and nonassessable.
(vii) The Company has obtained each material license, permit,
patent, certificate, franchise or other governmental authorization or
permit (collectively, "Permits") necessary under the laws of the state of
Washington to ownership of its properties or to the conduct of its
business as described in the Offering Memorandum, other than Permits being
applied for in the ordinary course of business and other than Permits the
violation of or failure to obtain which would not, singly or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
(viii) To our knowledge, the Company is not in violation of its
corporate charter or by-laws, or in default under any agreement (including
loan and credit agreements), indenture or instrument known to us, which
default could, singly or in the aggregate, reasonably be expected to have
a Material Adverse Effect; to the best of our knowledge, the Company is
not in violation of any material law, ordinance, governmental rule or
regulation or court decree to which it may be subject which violation,
singly or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
(ix) To our knowledge, there are no pending actions or suits or
judicial, arbitral, rule-making, administrative or other proceedings to
which the Company is a party or of which any properties or assets of the
Company is the subject which (A) singularly or in the aggregate, if
determined adversely to the Company, could reasonably be expected to have
a Material Adverse Effect or (B) question the validity or enforceability
of any of the Transaction Documents or any action taken or to be taken
pursuant thereto; and to our knowledge, no such proceedings are threatened
or contemplated by governmental authorities or threatened by others.
We express no opinion as to the enforceability of any provisions of the
Indenture, the Subsidiary Guarantees, the Registration Rights Agreement or the
Purchase Agreement. Our opinions are limited to matters expressly stated herein,
no opinion may be inferred or implied beyond the matters expressly stated.
This opinion is given as of the date hereof and we assume no obligation to
update or supplement this opinion to reflect any facts or circumstances which
may hereafter come to our attention or changes in law which may hereafter occur.
3
Except as provided in the succeeding sentence, this opinion is solely for
the benefit of the addressees hereof and may not be used, circulated, quoted or
otherwise referred to for any purpose without our prior written consent. U.S.
Bank National Association, in its capacity as Trustee under the Indenture, may
rely upon paragraph (iv) of this opinion as though it were addressed to it.
Very truly yours,
---------------------------------------
4
EXHIBIT E
Form of Opinion of Heidman, Redmond, Fredregill, Patterson, Plaza & Dykstra,
L.L.P.
EXHIBIT E
[Heidman, Redmond, Fredregill, Patterson, Plaza & Dykstra L.L.P. letterhead]
April 1998
Nationsbanc Montgomery Securities LLC
100 North Tryon Street
7th Floor
Charlotte, NC 28255
CIBC Oppenheimer Corp.
425 Lexington Avenue
3rd Floor
New York, NY 10017
Ladies and Gentlemen:
We have acted as special Iowa counsel to Power Plant Aggregates of Iowa,
Inc., an Iowa corporation (the "Company"), in connection with the issuance and
sale by JTM Industries, Inc. ("JTM"), pursuant to the Purchase Agreement (the
"Purchase Agreement"), dated April 17, 1998, among JTM, the Company, certain
other subsidiaries of JTM, and Nationsbanc Montgomery Securities LLC and CIBC
Oppenheimer Corp. (collectively, the "Initial Purchasers") of $100,000,000
aggregate principal amount of JTM's 10% Senior Subordinated Notes due 2008 (the
"Notes"), being issued pursuant to an Indenture (the "Indenture"), dated as of
the date hereof, among JTM, the Company, the other Subsidiary Guarantors (as
defined) and U.S. Bank National Association, as trustee (the "Trustee"). The
Notes are guaranteed (the Subsidiary Guarantees"), jointly and severally, on a
senior subordinated basis by all existing domestic subsidiaries of JTM (the
"Subsidiary Guarantors"), including the Company.
This opinion is furnished to you pursuant to Section 7(j) of the Purchase
Agreement. Except as otherwise specified, terms used herein have the meanings
ascribed to them in the Purchase Agreement.
In giving the opinions expressed below, we have examined, among other
things: (i) the preliminary offering memorandum, dated March 27, 1998, and the
final offering memorandum, dated April 17, 1998 (the "Offering Memorandum"),
each relating to the Notes being issued by JTM in a private placement under the
Securities Act of 1933, as amended (the "Securities Act"); (ii) the Purchase
Agreement; (iii) the Indenture; and (iv) the Registration Rights Agreement (the
"Registration Rights Agreement"), dated the date hereof, among JTM, the Company,
the other Subsidiary Guarantors and the Initial Purchasers, providing for the
registration of the Notes under the Securities Act (collectively, the
"Transaction Documents").
We have also examined originals, or copies satisfactory to us, of all such
corporate records, agreements, certificates, governmental orders, permits and
other documents as we have deemed relevant and necessary as a basis for the
opinions hereinafter expressed. In such examination we have assumed the
genuineness of all signatures, the authenticity of all documents submitted to us
as originals and the conformity with the original documents of all documents
submitted to us as copies. As to any facts material to such opinions (including
determinations with respect to the question of materiality to the Company's
business), we have relied upon the representations and warranties in the
Purchase Agreement, certificates of public officials and certificates, oaths and
declarations of officers or other representatives of the Company.
The opinions expressed below are limited to the laws of the state of Iowa.
In rendering the opinions expressed below, we have assumed (i) the due
authorization, execution and delivery by each party thereto other than the
Company of the Purchase Agreement, the Registration Rights Agreement, and the
Indenture, (ii) the legal right and power of such persons under all applicable
laws and regulations to execute, deliver and perform their respective
obligations under, and the validity, binding effect and enforceability against
such persons in accordance with their terms of, the Purchase Agreement, the
Registration Rights Agreement, and the Indenture, and (iii) that the Articles of
Incorporation and By-Laws of the Company furnished to us are complete, and the
minutes of the Board of Directors meetings of the Company furnished to us
accurately reflect actions taken at meetings at which a quorum was present.
We express no opinion regarding the securities laws issues related to the
issuance of the Notes or the Indenture or the transactions related thereto.
Based upon and subject to the foregoing, we are of the opinion that:
(i) The Company is validly existing as a corporation and is in good
standing under the laws of Iowa.
(ii) The Company has the corporate power and authority to execute
and deliver, and to consummate the transactions contemplated by, the
Purchase Agreement, and the Company has the corporate power and authority
to issue and deliver its Subsidiary Guarantee as contemplated by the
Purchase Agreement.
(iii) The execution and delivery of the Purchase Agreement have been
duly authorized by all requisite corporate action of the Company, and the
Purchase Agreement has been duly executed and delivered by the Company.
(iv) The execution and delivery of the Indenture (including the
Company's Subsidiary Guarantee) have been duly authorized by all requisite
corporate action of the Company, and the Indenture (including the
Company's Subsidiary Guarantee) has been duly executed and delivered by
the Company.
(v) The execution and delivery of the Registration Rights Agreement
have been duly authorized by all requisite corporate action of the
Company, and the
2
Registration Rights Agreement has been duly executed and delivered by the
Company.
(vi) All shares of capital stock of the Company have been duly
authorized and validly issued, and are fully paid and nonassessable.
(vii) The Company has obtained each material license, permit,
patent, certificate, franchise or other governmental authorization or
permit (collectively, "Permits") necessary under the laws of the state of
Iowa to ownership of its properties or to the conduct of its business as
described in the Offering Memorandum, other than Permits being applied for
in the ordinary course of business and other than Permits the violation of
or failure to obtain which would not, singly or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
(viii) To our knowledge, the Company is not in violation of its
corporate charter or by-laws, or in default under any agreement (including
loan and credit agreements), indenture or instrument known to us, which
default could, singly or in the aggregate, reasonably be expected to have
a Material Adverse Effect; to the best of our knowledge, the Company is
not in violation of any material law, ordinance, governmental rule or
regulation or court decree to which it may be subject which violation,
singly or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
(ix) To our knowledge, there are no pending actions or suits or
judicial, arbitral, rule-making, administrative or other proceedings to
which the Company is a party or of which any properties or assets of the
Company is the subject which (A) singularly or in the aggregate, if
determined adversely to the Company, could reasonably be expected to have
a Material Adverse Effect or (B) question the validity or enforceability
of any of the Transaction Documents or any action taken or to be taken
pursuant thereto; and to our knowledge, no such proceedings are threatened
or contemplated by governmental authorities or threatened by others.
We express no opinion as to the enforceability of any provisions of the
Indenture, the Subsidiary Guarantees, the Registration Rights Agreement or the
Purchase Agreement. Our opinions are limited to matters expressly stated herein,
no opinion may be inferred or implied beyond the matters expressly stated.
This opinion is given as of the date hereof and we assume no obligation to
update or supplement this opinion to reflect any facts or circumstances which
may hereafter come to our attention or changes in law which may hereafter occur.
3
Except as provided in the succeeding sentence, this opinion is solely for
the benefit of the addressees hereof and may not be used, circulated, quoted or
otherwise referred to for any purpose without our prior written consent. U.S.
Bank National Association, in its capacity as Trustee under the Indenture, may
rely upon paragraph (iv) of this opinion as though it were addressed to it.
Very truly yours,
--------------------------------------
4
EXHIBIT F
Form of Opinion of Braun Kendrick Finkbeiner P.L.C.
EXHIBIT F
[Braun Kendrick Finkbeiner P.L.C. letterhead]
April 1998
Nationsbanc Montgomery Securities LLC
100 North Tryon Street
7th Floor
Charlotte, NC 28255
CIBC Oppenheimer Corp.
425 Lexington Avenue
3rd Floor New York, NY 10017
Ladies and Gentlemen:
We have acted as special Michigan counsel to Michigan Ash Sales Company,
d.b.a. U.S. Ash Company, together with two affiliated companies, U.S.
Stabilization, Inc. and Flo Fil Co., Inc., a Michigan corporation (the
"Company"), in connection with the issuance and sale by JTM Industries, Inc.
("JTM"), pursuant to the Purchase Agreement (the "Purchase Agreement"), dated
April 17, 1998, among JTM, the Company, certain other subsidiaries of JTM, and
Nationsbanc Montgomery Securities LLC and CIBC Oppenheimer Corp. (collectively,
the "Initial Purchasers") of $l00,000,000 aggregate principal amount of JTM's
10% Senior Subordinated Notes due 2008 (the "Notes"), being issued pursuant to
an Indenture (the "Indenture"), dated as of the date hereof, among JTM, the
Company, the other Subsidiary Guarantors (as defined) and U.S. Bank National
Association, as trustee (the "Trustee"). The Notes are guaranteed (the
"Subsidiary Guarantees"), jointly and severally, on a senior subordinated basis
by all existing domestic subsidiaries of JTM (the "Subsidiary Guarantors"),
including the Company.
This opinion is furnished to you pursuant to Section 7(k) of the Purchase
Agreement. Except as otherwise specified, terms used herein have the meanings
ascribed to them in the Purchase Agreement.
In giving the opinions expressed below, we have examined, among other
things: (i) the preliminary offering memorandum, dated March 27, 1998, and the
final offering memorandum, dated April 17, 1998 (the "Offering Memorandum"),
each relating to the Notes being issued by JTM in a private placement under the
Securities Act of 1933, as amended (the "Securities Act"); (ii) the Purchase
Agreement; (iii) the Indenture; and (iv) the
Registration Rights Agreement (the "Registration Rights Agreement"), dated the
date hereof, among JTM, the Company, the other Subsidiary Guarantors and the
Initial Purchasers, providing for the registration of the Notes under the
Securities Act (collectively, the "Transaction Documents").
We have also examined originals, or copies satisfactory to us, of all such
corporate records, agreements, certificates, governmental orders, permits and
other documents as we have deemed relevant and necessary as a basis for the
opinions hereinafter expressed. In such examination we have assumed the
genuineness of all signatures, the authenticity of all documents submitted to us
as originals and the conformity with the original documents of all documents
submitted to us as copies. As to any facts material to such opinions (including
determinations with respect to the question of materiality to the Company's
business), we have relied upon the representations and warranties in the
Purchase Agreement, certificates of public officials and certificates, oaths and
declarations of officers or other representatives of the Company.
The opinions expressed below are limited to the laws of the state of
Michigan. In rendering the opinions expressed below, we have assumed (i) the due
authorization, execution and delivery by each party thereto other than the
Company of the Purchase Agreement, the Registration Rights Agreement, and the
Indenture, (ii) the legal right and power of such persons under all applicable
laws and regulations to execute, deliver and perform their respective
obligations under, and the validity, binding effect and enforceability against
such persons in accordance with their terms of, the Purchase Agreement, the
Registration Rights Agreement, and the Indenture, and (iii) that the Articles of
Incorporation and By-Laws of the Company furnished to us are complete, and the
minutes of the Board of Directors meetings of the Company furnished to us
accurately reflect actions taken at meetings at which a quorum was present.
We express no opinion regarding the securities laws issues related to the
issuance of the Notes or the Indenture or the transactions related thereto.
Based upon and subject to the foregoing, we are of the opinion that:
(i) The Company is validly existing as a corporation and is in good
standing under the laws of Michigan.
(ii) The Company has the corporate power and authority to execute
and deliver, and to consummate the transactions contemplated by, the
Purchase Agreement, and the Company has the corporate power and authority
to issue and deliver its Subsidiary Guarantee as contemplated by the
Purchase Agreement.
(iii) The execution and delivery of the Purchase Agreement have been
duly authorized by all requisite corporate action of the Company, and the
Purchase Agreement has been duly executed and delivered by the Company.
(iv) The execution and delivery of the Indenture (including the
Company's Subsidiary Guarantee) have been duly authorized by all requisite
corporate action of
2
the Company, and the Indenture (including the Company's Subsidiary Guarantee)
has been duly executed and delivered by the Company.
(v) The execution and delivery of the Registration Rights Agreement
have been duly authorized by all requisite corporate action of the
Company, and the Registration Rights Agreement has been duly executed and
delivered by the Company.
(vi) All shares of capital stock of the Company have been duly
authorized and validly issued, and are fully paid and nonassessable.
(vii) The Company has obtained each material license, permit,
patent, certificate, franchise or other governmental authorization or
permit (collectively, "Permits") necessary under the laws of the state of
Michigan to ownership of its properties or to the conduct of its business
as described in the Offering Memorandum, other than Permits being applied
for in the ordinary course of business and other than Permits the
violation of or failure to obtain which would not, singly or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
(viii) To our knowledge, the Company is not in violation of its
corporate charter or by-laws, or in default under any agreement (including
loan and credit agreements), indenture or instrument known to us, which
default could, singly or in the aggregate, reasonably be expected to have
a Material Adverse Effect; to the best of our knowledge, the Company is
not in violation of any material law, ordinance, governmental rule or
regulation or court decree to which it may be subject which violation,
singly or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
(ix) To our knowledge, there are no pending actions or suits or
judicial, arbitral, rule-making. administrative or other proceedings to
which the Company is a party or of which any properties or assets of the
Company is the subject which (A) singularly or in the aggregate, if
determined adversely to the Company, could reasonably be expected to have
a Material Adverse Effect or (B) question the validity or enforceability
of any of the Transaction Documents or any action taken or to be taken
pursuant thereto; and to our knowledge, no such proceedings are threatened
or contemplated by governmental authorities or threatened by others.
We express no opinion as to the enforceability of any provisions of the
Indenture, the Subsidiary Guarantees, the Registration Rights Agreement or the
Purchase Agreement. Our opinions are limited to matters expressly stated herein,
no opinion may be inferred or implied beyond the matters expressly stated.
This opinion is given as of the date hereof and we assume no obligation to
update or supplement this opinion to reflect any facts or circumstances which
may hereafter come to our attention or changes in law which may hereafter occur.
Except as provided in the succeeding sentence, this opinion is solely for
the benefit of the addressees hereof and may not be used, circulated, quoted or
otherwise referred to for
3
any purpose without our prior written consent. U.S. Bank National Association,
in its capacity as Trustee under the Indenture, may rely upon paragraph (iv) of
this opinion as though it were addressed to it.
Very truly yours,
----------------------------------------
4
EXHIBIT G
Form of Opinion of Bridges, Young, Matthews & Drake P.L.C.
EXHIBIT G
[Bridges, Young, Matthews & Drake letterhead]
April __, 1998
Nationsbanc Montgomery Securities LLC
100 North Tryon Street
7th Floor
Charlotte, NC 28255
CIBC Oppenheimer Corp.
425 Lexington Avenue
3rd Floor
New York, NY 10017
Ladies and Gentlemen:
We have acted as special Arkansas counsel to Fly Ash Products, Inc., an
Arkansas corporation (the "Company"), in connection with the issuance and sale
by JTM Industries, Inc. "JTM" pursuant to the Purchase Agreement (the "Purchase
Agreement"), dated April 17, 1998, among JTM, the Company, certain other
subsidiaries of JTM, and Nationsbanc Montgomery Securities LLC and CIBC
Oppenheimer Corp. (collectively, the "Initial Purchasers") of $100,000,000
aggregate principal amount of JTM's 10% Senior Subordinated Notes due 2008 (the
"Notes"), being issued pursuant to an Indenture (the "Indenture"), dated as of
the date hereof, among JTM, the Company, the other Subsidiary Guarantors (as
defined) and U.S. Bank National Association, as trustee (the "Trustee"). The
Notes are guaranteed (the "Subsidiary Guarantees"), jointly and severally, on a
senior subordinated basis by all existing domestic subsidiaries of JTM (the
"Subsidiary Guarantors"), including the Company.
This opinion is furnished to you pursuant to Section 7(1) of the Purchase
Agreement. Except as otherwise specified, terms used herein have the meanings
ascribed to them in the Purchase Agreement.
In giving the opinions expressed below, we have examined, among other
things: (i) the preliminary offering memorandum, dated March 27, 1998, and the
final offering memorandum, dated April 17, 1998 (the "Offering Memorandum"),
each relating to the Notes being issued by JTM in a private placement under the
Securities Act of 1933, as amended (the "Securities Act"); (ii) the Purchase
Agreement; (iii) the Indenture; and (iv) the Registration Rights Agreement (the
"Registration Rights Agreement"), dated the date hereof, among JTM, the Company,
the other Subsidiary Guarantors and the Initial Purchasers, providing for the
registration of the Notes under the Securities Act (collectively, the
"Transaction Documents").
We have also examined originals, or copies satisfactory to us, of all
such corporate records, agreements, certificates, governmental orders, permits
and other documents as we have deemed relevant and necessary as a basis for the
opinions hereinafter expressed. In such examination we have assumed the
genuineness of all signatures, the authenticity of all documents submitted to us
as originals and the conformity with the original documents of all documents
submitted to us as copies. As to any facts material to such opinions (including
determinations with respect to the question of materiality to the Company's
business), we have relied upon the representations and warranties in the
Purchase Agreement, certificates of public officials and certificates, oaths and
declarations of officers or other representatives of the Company.
The opinions expressed below are limited to the laws of the state of
Arkansas. In rendering the opinions expressed below, we have assumed (i) the due
authorization, execution and delivery by each party thereto other than the
Company of the Purchase Agreement, the Registration Rights Agreement, and the
Indenture, (ii) the legal right and power of such persons under all applicable
laws and regulations to execute, deliver and perform their respective
obligations under, and the validity, binding effect and enforceability against
such persons in accordance with their terms of, the Purchase Agreement, the
Registration Rights Agreement, and the Indenture, and (iii) that the Articles of
Incorporation and By-Laws of the Company furnished to us are complete, and the
minutes of the Board of Directors meetings of the Company furnished to us
accurately reflect actions taken at meetings at which a quorum was present.
We express no opinion regarding the securities laws issues related to the
issuance of the Notes or the Indenture or the transactions related thereto.
Based upon and subject to the foregoing, we are of the opinion that:
(i) The Company is validly existing as a corporation and is in good
standing under the laws of Arkansas.
(ii) The Company has the corporate power and authority to execute
and deliver, and to consummate the transactions contemplated by, the
Purchase Agreement, and the Company has the corporate power and authority
to issue and deliver its Subsidiary Guarantee as contemplated by the
Purchase Agreement.
(iii) The execution and delivery of the Purchase Agreement have been
duly authorized by all requisite corporate action of the Company, and the
Purchase Agreement has been duly executed and delivered by the Company.
(iv) The execution and delivery of the Indenture (including the
Company's Subsidiary Guarantee) have been duly authorized by all requisite
corporate action of the Company, and the Indenture (including the
Company's Subsidiary Guarantee) has been duly executed and delivered by
the Company.
(v) The execution and delivery of the Registration Rights Agreement
have been duly authorized by all requisite corporate action of the
Company, and the
2
Registration Rights Agreement has been duly executed and delivered by the
Company.
(vi) All shares of capital stock of the Company have been duly
authorized and validly issued, and are fully paid and nonassessable.
(vii) The Company has obtained each material license, permit,
patent, certificate, franchise or other governmental authorization or
permit (collectively, "Permits") necessary under the laws of the state of
Arkansas to ownership of its properties or to the conduct of its business
as described in the Offering Memorandum, other than Permits being applied
for in the ordinary course of business and other than Permits the
violation of or failure to obtain which would not, singly or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
(viii) To our knowledge, the Company is not in violation of its
corporate charter or by-laws, or in default under any agreement (including
loan and credit agreements), indenture or instrument known to us, which
default could, singly or in the aggregate, reasonably be expected to have
a Material Adverse Effect; to the best of our knowledge, the Company is
not in violation of any material law, ordinance, governmental rule or
regulation or court decree to which it may be subject which violation,
singly or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
(ix) To our knowledge, there are no pending actions or suits or
judicial, arbitral, rule-making, administrative or other proceedings to
which the Company is a party or of which any properties or assets of the
Company is the subject which (A) singularly or in the aggregate, if
determined adversely to the Company, could reasonably be expected to have
a Material Adverse Effect or (B) question the validity or enforceability
of any of the Transaction Documents or any action taken or to be taken
pursuant thereto; and to our knowledge, no such proceedings are threatened
or contemplated by governmental authorities or threatened by others.
We express no opinion as to the enforceability of any provisions of the
Indenture, the Subsidiary Guarantees, the Registration Rights Agreement or the
Purchase Agreement. Our opinions are limited to matters expressly stated herein,
no opinion may be inferred or implied beyond the matters expressly stated.
This opinion is given as of the date hereof and we assume no obligation to
update or supplement this opinion to reflect any facts or circumstances which
may hereafter come to our attention or changes in law which may hereafter occur.
3
Except as provided in the succeeding sentence, this opinion is solely for
the benefit of the addressees hereof and may not be used, circulated, quoted or
otherwise referred to for any purpose without our prior written consent. U.S.
Bank National Association, in its capacity as Trustee under the Indenture, may
rely upon paragraph (iv) of this opinion as though it were addressed to it.
Very truly yours,
---------------------------------------
4
SCHEDULE A
Subsidiaries
Name Jurisdiction of Incorporation
- ---- -----------------------------
Pozzolanic Resources, Inc. Washington
Power Plant Aggregates of Iowa, Inc. Iowa
KBK Enterprises, Inc. Pennsylvania
Michigan Ash Sales Company,
d.b.a. U.S. Ash Company Michigan
U.S. Stabilization, Inc. Michigan
Flo Fil Co., Inc. Michigan
Fly Ash Products, Inc. Arkansas
SCHEDULE B
JTM INDUSTRIES, INC.
Initial Purchaser Amount
- ----------------- ------
NationsBanc Montgomery Securities LLC ............... $ 65,000,000.00
CIBC Oppenheimer Corp................................ $ 35,000,000.00
$100,000,000.00
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