<PAGE>

                                                                     EXHIBIT 4.3
 
                          EARLE M. JORGENSEN COMPANY


                                 $105,000,000

                         9 1/2% Senior Notes due 2005

                              PURCHASE AGREEMENT

                                March 19, 1998



                         DONALDSON, LUFKIN & JENRETTE
                            SECURITIES CORPORATION

                          BT ALEX. BROWN INCORPORATED
<PAGE>
 
                                 $105,000,000
                                        
                         9 1/2% Senior Notes due 2005

                         of EARLE M. JORGENSEN COMPANY

                              PURCHASE AGREEMENT


                                                                  March 19, 1998


Donaldson, Lufkin & Jenrette Securities Corporation
BT Alex. Brown Incorporated


c/o Donaldson, Lufkin & Jenrette
        Securities Corporation
        277 Park Avenue
        New York, New York  10005

Ladies and Gentlemen:

          Earle M. Jorgensen Company (the "Company"), a Delaware corporation,
                                           -------                           
proposes to issue and sell to Donaldson, Lufkin & Jenrette Securities
Corporation ("DLJ") and BT Alex. Brown Incorporated (each an "Initial Purchaser"
              ---                                             ----------------- 
and, collectively, the "Initial Purchasers") an aggregate of $105,000,000 in
                        ------------------                                  
principal amount of its 9 1/2% Senior Notes due 2005 (the "Series A Notes"),
                                                           --------------   
subject to the terms and conditions set forth herein.  The Series A Notes are to
be issued pursuant to the provisions of an indenture (the "Indenture"), to be
                                                           ---------         
dated as of the Closing Date (as defined below), between the Company and United
States Trust Company of New York, as trustee (the "Trustee").  The Series A
                                                   -------                 
Notes and the Series B Notes (as defined below) issuable in exchange therefor
are collectively referred to herein as the "Notes."  The Company is a wholly
                                            -----                           
owned subsidiary of Earle M. Jorgenson Holding Company, Inc. (the "Holding
Company").  Capitalized terms used but not defined herein shall have the
meanings given to such terms in the Indenture.
<PAGE>
 
          1.   Offering Memorandum.  The Series A Notes will be offered and 
               -------------------
sold to the Initial Purchasers pursuant to one or more exemptions from the 
registration requirements under the Securities Act of 1933, as amended (the 
"Act").  The Company has prepared a preliminary offering memorandum, dated 
 ---
March 3, 1998 (the "Preliminary Offering Memorandum") and a final offering 
                    -------------------------------
memorandum, dated March 19, 1998 (the "Offering Memorandum"), relating to the 
                                       -------------------
Series A Notes.

          Upon original issuance thereof, and until such time as the same is no
longer required pursuant to the Indenture, the Series A Notes (and all
securities (other than the Series B Notes) issued in exchange therefor, in
substitution thereof or upon conversion thereof) shall bear the following
legend:

          "THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE
     UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
     AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
     TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT
     OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE.  BY ITS
     ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER (1)
     REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN
     RULE 144A UNDER THE SECURITIES ACT) (A "QIB"), OR (B) IT HAS ACQUIRED THIS
     NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE
     SECURITIES ACT, (2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER
     THIS NOTE EXCEPT (A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) TO A
     PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN
     ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A TRANSACTION MEETING THE
     REQUIREMENTS OF RULE 144A, (C) IN AN OFFSHORE TRANSACTION MEETING THE
     REQUIREMENTS OF RULE 903 OR 904 OF THE SECURITIES ACT, (D) IN A TRANSACTION
     MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (E) IN
     ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
     SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL, ACCEPTABLE TO THE
     COMPANY), OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN
     EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE
     OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (3) AGREES
     THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN INTEREST HEREIN
     IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.  AS
     USED HEREIN, THE TERMS "OFFSHORE TRANSACTIONS," AND "UNITED STATES" HAVE
     THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE SECURITIES
     ACT.  THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO
     REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING."

                                       2
<PAGE>
 
          2.   Agreements to Sell and Purchase.  On the basis of the 
               -------------------------------
representations, warranties and covenants contained in this Agreement, and
subject to the terms and conditions contained herein, the Company agrees to
issue and sell to the Initial Purchasers, and the Initial Purchasers agree,
severally and not jointly, to purchase from the Company, the principal amount of
Series A Notes set forth opposite the name of such Initial Purchaser on Schedule
A hereto at a purchase price equal to 97.125% of the principal amount thereof
(the "Purchase Price").
      --------------

          3.   Terms of Offering.  The Initial Purchasers have advised the 
               -----------------
Company that the Initial Purchasers will make offers (the "Exempt Resales") of
                                                           --------------
the Series A Notes purchased hereunder on the terms set forth in the Offering
Memorandum, as amended or supplemented, solely to (i) persons whom the Initial
Purchasers reasonably believe to be "qualified institutional buyers" as defined
in Rule 144A under the Act ("QIBs"), and (ii) to persons permitted to purchase
                             ----                                             
the Series A Notes in offshore transactions in reliance upon Regulation S under
the Act (each, a "Regulation S Purchaser") (such persons specified in clauses
                  ----------------------                                     
(i)  and (ii) being referred to herein as the "Eligible Purchasers").  The
                                               -------------------        
Initial Purchasers will offer the Series A Notes to Eligible Purchasers
initially at a price equal to 97.125% of the principal amount thereof.  Such
price may be changed at any time without notice.

          Holders (including subsequent transferees) of the Series A Notes will
have the registration rights set forth in the registration rights agreement (the
"Registration Rights Agreement"), to be dated the Closing Date, in substantially
 -----------------------------                                    
the form of Exhibit A hereto, for so long as such Series A Notes constitute
"Transfer Restricted Securities" (as defined in the Registration Rights
Agreement). Pursuant to the Registration Rights Agreement, the Company will
agree to file with the Securities and Exchange Commission (the "Commission"),
                                                                ----------
under the circumstances set forth therein, (i) a registration statement under
the Act (the "Exchange Offer Registration Statement") relating to the Company's
              -------------------------------------
9 1/2% Senior Notes due 2005 (the "Series B Notes"), to be offered in exchange
                                   --------------
for the Series A Notes (such offer to exchange being referred to as the

"Exchange Offer") and (ii) a shelf registration statement pursuant to Rule 415
 --------------
under the Act (the "Shelf Registration Statement" and, together with the
                    ----------------------------
Exchange Offer Registration Statement, the "Registration Statements") relating
                                            -----------------------
to the resale by certain holders of the Series A Notes and to use its best
efforts to cause such Registration State ments to be declared and remain
effective and usable for the periods specified in the Registration Rights
Agreement and to consummate the Exchange Offer. On the Closing Date (as
hereinafter defined), the Company intends to (i) enter into a loan agreement
(the "Special Term Loan") with DLJ Capital Funding, Inc., as syndication agent,
      -----------------
Donaldson Lufkin & Jenrette

                                       3
<PAGE>
 
Securities Corporation and BT Alex. Brown Incorporated, as arrangers, and the
other lenders party thereto pursuant to which the Company will borrow $100
million and (ii) enter into a $220 million revolving credit facility pursuant to
a credit agreement with a group of banks (the "New Credit Facility"). The New
                                               -------------------
Credit Facility and the agreements creating security interests in certain assets
of the Company for the benefit of the holders of indebtedness arising under the
New Credit Facility are sometimes herein referred to as the "Bank Agreements"
                                                             ---------------
The Special Term Loan and the agreements creating security interests in certain
assets of the Company for the benefit of the holders of indebtedness arising
under the Special Term Loan are sometimes herein referred to as the "Special
                                                                     -------
Term Loan Agreements." This Agreement, the Indenture, the Notes, the Special
--------------------
Term Loan Agreements, the Bank Agreements and the Registration Rights Agreement
are hereinafter sometimes referred to collectively as the "Operative Documents."
                                                           -------------------

          4.   Delivery and Payment.
               -------------------- 

               (a)   Delivery of, and payment of the Purchase Price for, the 
Series A Notes shall be made at the office of Skadden, Arps, Slate, Meagher &
Flom LLP at 919 Third Avenue, New York, New York, 10022-3897, or such other
location as may be mutually acceptable. Such delivery and payment shall be made
at 9:00 a.m., New York City time, on March 24, 1998, or at such other time on
the same date or such other time and date as shall be agreed upon by the Initial
Purchasers and the Company in writing. The time and date of such delivery and
the payment for the Series A Notes are herein called the "Closing Date."
                                                          ------------  

               (b)   One or more of the Series A Notes in definitive global 
form, registered in the name of Cede & Co., as nominee of the Depository Trust
Company ("DTC"), having an aggregate principal amount corresponding to the
          ---
aggregate principal amount of the Series A Notes (collectively, the "Global
                                                                     ------
Notes") shall be delivered by the Company to the Initial Purchasers (or as the
-----
Initial Purchasers direct) in each case with any transfer taxes thereon duly
paid by the Company against payment by the Initial Purchasers of the Purchase
Price thereof by wire transfer in same day funds to such accounts with such
financial institutions as the Company may direct in writing. The Global Notes
shall be made available to the Initial Purchasers for inspection not later than
9:30 a.m., New York City time, on the business day immediately preceding the
Closing Date.

          5.   Agreements of the Company.  The Company hereby agrees with each
               -------------------------                                      
Initial Purchaser as follows:

                                       4
<PAGE>
 
          (a)  To advise the Initial Purchasers promptly and, if requested by an
Initial Purchaser, confirm such advice in writing, (i) of the issuance by any
state securities commission or other regulatory authority of any stop order
suspending the qualification or exemption from qualification of any Series A
Notes for offering or sale in any jurisdiction designated by the Initial
Purchasers pursuant to Section 5(e) hereof, or the initiation of any proceeding
by any state securities commission or any other federal or state regulatory
authority for such purpose and (ii) of the happening of any event during the
period referred to in Section 5(c) below that makes any statement of a material
fact made in the Preliminary Offering Memorandum or the Offering Memorandum
untrue or that requires any additions to or changes in the Preliminary Offering
Memorandum or the Offering Memorandum in order to make the statements therein
not misleading. The Company shall use its best efforts to prevent the issuance
of any stop order or order suspending the qualification or exemption of any
Series A Notes under any state securities or Blue Sky laws and, if at any time
any state securities commission or other federal or state regulatory authority
shall issue an order suspending the qualification or exemption of any Series A
Notes under any state securities or Blue Sky laws, the Company shall use
commercially reasonable efforts to obtain the withdrawal or lifting of such
order at the earliest possible time.

          (b)  To furnish the Initial Purchasers and those persons identified 
by the Initial Purchasers to the Company as many copies of the Preliminary
Offering Memorandum and the Offering Memorandum, and any amendments or
supplements thereto, as the Initial Purchasers may reasonably request for the
time period specified in Section 5(c). Subject to each of the Initial
Purchaser's compliance with its respective representations and warranties and
agreements set forth in Section 7 hereof, the Company consents to the use of the
Preliminary Offering Memorandum and the Offering Memorandum, and any amendments
and supplements thereto required pursuant hereto, by the Initial Purchasers in
connection with Exempt Resales.

          (c)  During such period as in the opinion of counsel for the Initial
Purchasers an Offering Memorandum is required by law to be delivered in
connection with Exempt Resales by the Initial Purchasers and in connection with
market-making activities of the Initial Purchaser for so long as any Series A
Notes are outstanding, (i) not to make any amendment or supplement to the
Offering Memorandum of which the Initial Purchasers shall not previously have
been advised or to which the Initial Purchasers shall reasonably object after
being so advised and (ii) to prepare promptly upon the Initial Purchasers'
reasonable request, any amendment or 

                                       5
<PAGE>
 
supplement to the Offering Memorandum which may be necessary or advisable in
connection with such Exempt Resales or such market-making activities.

          (d)  If, during the period referred to in Section 5(c) above, any 
event shall occur or condition shall exist as a result of which, in the opinion
of counsel to the Initial Purchasers, it becomes necessary to amend or
supplement the Offering Memorandum in order to make the statements therein, in
the light of the circumstances when such Offering Memorandum is delivered to an
Eligible Purchaser, not misleading, or if, in the opinion of counsel to the
Initial Purchasers, it is necessary to amend or supplement the Offering
Memorandum to comply with any applicable law, forthwith to prepare an
appropriate amendment or supplement to such Offering Memorandum so that the
statements therein, as so amended or supplemented, will not, in the light of the
circumstances when it is so delivered, be misleading, or so that such Offering
Memorandum will comply with applicable law, and to furnish to the Initial
Purchasers and such other persons as the Initial Purchasers may designate such
number of copies thereof as the Initial Purchasers may reasonably request.

          (e)  Prior to the sale of the Series A Notes pursuant to Exempt 
Resales as contemplated hereby, to cooperate with the Initial Purchasers and
counsel to the Initial Purchasers in connection with the registration or
qualification of the Series A Notes for offer and sale to the Initial Purchasers
and pursuant to Exempt Resales under the securities or Blue Sky laws of such
jurisdictions as the Initial Purchasers may request and to continue such
registration or qualification in effect so long as required for Exempt Resales
and to file such consents to service of process or other documents as may be
necessary in order to effect such registration or qualification; provided,
however, that the Company shall not be required in connection therewith to
qualify as a foreign corporation in any jurisdiction in which it is not now so
qualified or to take any action that would subject it to general consent to
service of process or taxation other than as to matters and transactions
relating to the Preliminary Offering Memorandum, the Offering Memorandum or
Exempt Resales, in any jurisdiction in which it is not now so subject.

          (f)  So long as the Notes are outstanding, (i) to mail and make 
generally available as soon as practicable after the end of each fiscal year to
the record holders of the Notes a financial report of the Company and its
subsidiaries on a consolidated basis (and a similar financial report of all
unconsolidated subsidiaries, if any), all such financial reports to include a
consolidated balance sheet, a consolidated statement of operations, a
consolidated statement of cash flows and a consolidated statement of
shareholder's equity as of the end of and for such fiscal

                                       6
<PAGE>
 
year, together with comparable information as of the end of and for the
preceding year, certified by the Company's independent certified public
accountant and (ii) to mail and make generally available as soon as practicable
after the end of each quarterly period (except for the last quarterly period of
each fiscal year) to such holders, a consolidated balance sheet, a consolidated
statement of operations and a consolidated statement of cash flows (and similar
financial reports of all unconsolidated subsidiaries, if any) as of the end of
and for such period, and for the period from the beginning of such year to the
close of such quarterly period, together with comparable information for the
corresponding periods of the preceding year.

          (g)  So long as the Notes are outstanding, to furnish to the Initial
Purchasers as soon as available copies of all reports or other communications
furnished by the Company to its security holders or furnished to or filed with
the Commission or any national securities exchange on which any class of
securities of either the Company or the Holding Company is listed and such other
publicly available information concerning the Company, the Holding Company and
the Company's subsidiaries, if any, as the Initial Purchasers may reasonably
request.

          (h)  So long as any of the Series A Notes remain outstanding and 
during any period in which the Company is not subject to Section 13 or 15(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), to make
                                                      ------------
available to any holder of Series A Notes in connection with any sale thereof
and any prospective purchaser of such Series A Notes from such holder, the
information ("Rule 144A Information") required by Rule 144A(d)(4) under the Act.
              ---------------------

          (i)  Whether or not the transactions contemplated in this Agreement 
are consummated or this Agreement is terminated, to pay or cause to be paid all
expenses incident to the performance of the obligations of the Company under
this Agreement including: (i) the fees, disbursements and expenses of counsel to
the Company and accountants of the Company in connection with the sale and
delivery of the Series A Notes to the Initial Purchasers and pursuant to Exempt
Resales, and all other fees and expenses in connection with the preparation,
printing, filing and distribution of the Preliminary Offering Memorandum, the
Offering Memorandum and all amendments and supplements to any of the foregoing
(including financial statements), including the mailing and delivering of copies
thereof to the Initial Purchasers and persons designated by them in the
quantities specified herein, (ii) all costs and expenses related to the transfer
and delivery of the Series A Notes to the Initial Purchasers and pursuant to
Exempt Resales, including any transfer or other taxes payable thereon, (iii) all
costs of printing or producing this Agreement, the other

                                       7
<PAGE>
 
Operative Documents and any other agreements or documents in connection with the
offering, purchase, sale or delivery of the Series A Notes, (iv) all expenses in
connection with the registration or qualification of the Series A Notes for
offer and sale under the securities or Blue Sky laws of the several states and
all costs of printing or producing any preliminary and supplemental Blue Sky
memoranda in connection therewith (including the filing fees and fees and
disbursements of counsel for the Initial Purchasers in connection with such
registration or qualification and memoranda relating thereto), (v) the cost of
printing certificates representing the Series A Notes, (vi) all expenses and
listing fees in connection with the application for quotation of the Series A
Notes in the National Association of Securities Dealers, Inc. ("NASD") Automated
                                                                ----
Quotation System - PORTAL ("PORTAL"), (vii) the fees and expenses of the Trustee
                            ------
and Trustee's counsel in connection with the Indenture and the Notes, (viii) the
costs and charges of any transfer agent, registrar and/or depositary (including
DTC), (ix) any fees charged by rating agencies for the rating of the Notes, 
(x) all costs and expenses of the Exchange Offer and any Registration 
Statement, as set forth in the Registration Rights Agreement, and (xi) all 
other costs and expenses incident to the performance of the obligations of the
Company hereunder for which provision is not otherwise made in this Section.

          (j)  To use its best efforts to effect the inclusion of the Series A
Notes in PORTAL and to maintain the listing of the Series A Notes on PORTAL for
so long as the Series A Notes are outstanding.

          (k)  To obtain the approval of DTC for "book-entry" transfer of the 
Notes, and to comply with all of its agreements set forth in the representation
letters of the Company to DTC relating to the approval of the Notes by DTC for
"book-entry" transfer.

          (l)  During the period beginning on the date hereof and continuing 
to and including the Closing Date, not to offer, sell, contract to sell or
otherwise transfer or dispose of any debt securities of the Company or the
Holding Company or any warrants, rights or options to purchase or otherwise
acquire debt securities of the Company or the Holding Company substantially
similar to the Notes (other than (i) the Notes and (ii) commercial paper issued
in the ordinary course of business), without the prior written consent of the
Initial Purchasers.

          (m)  Not to sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in the Act) that would be
integrated with the sale of the Series A Notes to the Initial Purchasers or
pursuant to 

                                       8
<PAGE>
 
Exempt Resales in a manner that would require the registration of any such sale
of the Series A Notes under the Act.

          (n)  Not to voluntarily claim, and to actively resist any attempts to
claim, the benefit of any usury laws against the holders of any Notes.

          (o)  To cause the Exchange Offer to be made in the appropriate form to
permit Series B Notes registered pursuant to the Act to be offered in exchange
for the Series A Notes and to comply with all applicable federal and state
securities laws in connection with the Exchange Offer.

          (p)  To comply with all of its agreements set forth in the
Registration Rights Agreement.

          (q)  To use its best efforts to do and perform all things required or
necessary to be done and performed under this Agreement by it prior to the
Closing Date and to satisfy all conditions precedent to the delivery of the
Series A Notes.

     6.   Representations, Warranties and Agreements of the Company.  As of the
          ---------------------------------------------------------            
date hereof, the Company represents and warrants to each Initial Purchaser that:

          (a)  The Preliminary Offering Memorandum and the Offering Memorandum
do not, and any supplement or amendment to them will not, contain any untrue
statement of a material fact or omit to state any 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, except that the
representations and warranties contained in this paragraph (a) shall not apply
to statements in or omissions from the Preliminary Offering Memorandum or the
Offering Memorandum (or any supplement or amendment thereto) based upon
information relating to the Initial Purchasers furnished to the Company in
writing by the Initial Purchasers expressly for use therein. The Company
acknowledges for all purposes under this Agreement that the statements with
respect to price and discount and the last paragraph on the cover page of the
Offering Memorandum, the information contained in the first, third, fifth, ninth
and tenth paragraphs under the caption "Plan of Distribution" in the Preliminary
Offering Memorandum and the Offering Memorandum, and the information regarding
stabilization on the inside front cover of the Preliminary Offering Memorandum
and the Offering Memorandum (or

                                       9
<PAGE>
 
any amendment or supplement thereto) constitute the only written information
furnished to the Company by or on behalf of any Initial Purchaser expressly for
use in the Preliminary Offering Memorandum or the Offering Memoran dum (or any
amendment or supplement thereto) and that the Initial Purchasers shall not be
deemed to have provided any other information (and therefore are not responsible
for any such statement or omission) pertaining to any arrangement or agreement
with respect to any party other than the Initial Purchasers. No stop order
preventing the use of the Preliminary Offering Memorandum or the Offering
Memorandum, or any amendment or supplement thereto, or any order asserting that
any of the transactions contemplated by this Agreement are subject to the
registration requirements of the Act, has been issued.

          (b)  The Company and each of its subsidiaries (each, a "Subsidiary"
                                                                  ---------- 
and, collectively, the "Subsidiaries") has been duly organized, is validly
                        ------------
existing as a corporation in good standing under the laws of its jurisdiction of
incorporation and has the requisite corporate power and authority to carry on
its business as it is currently being conducted, to own, lease and operate its
properties as described in the Preliminary Offering Memorandum and the Offering
Memorandum (and, with respect to the Company, to authorize the offering of the
Notes, to execute, deliver and perform this Agreement and to issue, sell and
deliver the Notes), and each is duly qualified and is in good standing as a
foreign corporation authorized to do business in each jurisdiction where the
operation, ownership or leasing of property or the conduct of its business
requires such qualification, except where the failure to be so qualified would
not, singly or in the aggregate, have a material adverse effect on the business,
results of operations, condition (financial or otherwise) or properties of the
Company and the Subsidiaries taken as a whole (a "Material Adverse Effect").

          (c)  The Holding Company has been duly organized, is validly existing
as a corporation in good standing under the laws of the State of Delaware and
does not engage in any business or investment activities other than owning 100%
of the issued and outstanding capital stock of the Company and supplying
management services to the Company pursuant to the terms of the Management
Agreement (as such term is defined in the Indenture) as described in the
Preliminary Offering Memorandum and the Offering Memorandum.

          (d)  The authorized, issued and outstanding capital stock of the 
Company is as set forth in the Preliminary Offering Memorandum and the Offering
Memorandum under "Capitalization." All of the issued and outstanding shares of
capital stock of, or other ownership interests in, each Subsidiary have been

                                       10
<PAGE>
 
duly and validly authorized and issued, and all of the shares of capital stock
of, or other ownership interests in, each Subsidiary are owned, directly or
through Subsidiaries, by the Company. All such shares of capital stock are fully
paid and nonassessable, and, other than pursuant to the Holding Pledge Agreement
(as defined in the Preliminary Offering Memorandum and Offering Memorandum) and
all agreements and other documents related thereto, are owned free and clear of
any security interest, mortgage, pledge, claim, lien or encumbrance (each, a
"Lien"). There are no outstanding subscriptions, rights, warrants, options,
calls, convertible securities, commitments of sale or Liens related to or
entitling any person to purchase or otherwise to acquire any shares of the
capital stock of, or other ownership interest in, any Subsidiary. The entities
listed on Schedule B hereto are the only subsidiaries, direct or indirect, of
the Company.

        (e)  The Indenture has been duly authorized by the Company and, when
duly executed and delivered by the Company and the Trustee in accordance with
its terms, will be a valid and legally binding agreement of the Company,
enforceable against the Company in accordance with its terms, except (i) as such
enforcement may be limited by bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium and similar laws now or hereafter in effect relating to
creditors' rights generally; (ii) that the remedies of specific performance and
injunctive and other forms of relief are subject to general equitable
principles, whether enforcement is sought at law or in equity and that such
enforcement is sought at law or in equity and that such enforcement may be
subject to the discretion of the court before which any proceedings therefor may
be brought; and (iii) that a waiver of rights under any usury laws may be
unenforceable.  On the Closing Date, the Indenture will conform in all material
respects to the requirements of the Trust Indenture Act of 1939, as amended,
(the "TIA" or "Trust Indenture Act") and the rules and regulations of the
      ---      -------------------                                       
Commission applicable to an indenture which is qualified thereunder.

        (f)  Except as disclosed in the Offering Memorandum, no relationship,
direct or indirect, exists between or among the Company or any of its
Subsidiaries on the one hand, and the directors, officers, stockholders,
customers or suppliers of the Company or any of its subsidiaries on the other
hand, which would be required by the Act to be described in the Offering
Memorandum if the Offering Memorandum were a prospectus included in a
registration statement on Form S-1 filed with the Commission.

                                       11
<PAGE>
 
        (g)  The Series A Notes have been duly authorized and, on the Closing
Date, will have been validly executed and delivered by the Company. When the
Series A Notes have been issued, executed and authenticated in accordance with
the provisions of the Indenture and delivered to and paid for by the Initial
Purchasers in accordance with the terms of this Agreement, the Series A Notes
will be entitled to the benefits of the Indenture and will be valid and binding
obligations of the Company, enforceable in accordance with their terms except
(i) as such enforcement may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium and similar laws now or
hereafter in effect relating to creditors' rights generally; (ii) that the
remedies of specific performance and injunctive and other forms of relief are
subject to general equitable principles, whether enforcement is sought at law or
in equity and that such enforcement is sought at law or in equity and that such
enforcement may be subject to the discretion of the court before which any
proceedings therefor may be brought; and (iii) that a waiver of rights under any
usury laws may be unenforceable. On the Closing Date, the Series A Notes will
conform as to legal matters to the description thereof contained in the Offering
Memorandum.

        (h)  On the Closing Date, the Series B Notes will have been duly
authorized by the Company. When the Series B Notes are issued, executed and
authenticated in accordance with the terms of the Exchange Offer and the
Indenture, the Series B Notes will be entitled to the benefits of the Indenture
and will be the valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, except (i) as such
enforcement may be limited by bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium and similar laws now or hereafter in effect relating to
creditors' rights generally; (ii) that the remedies of specific performance and
injunctive and other forms of relief are subject to general equitable
principles, whether enforcement is sought at law or in equity and that such
enforcement is sought at law or in equity and that such enforcement may be
subject to the discretion of the court before which any proceedings therefor may
be brought; and (iii) that a waiver of rights under any usury laws may be
unenforceable.

        (i)  Neither the Holding Company, the Company nor any of the
Subsidiaries is in violation of its respective charter or bylaws or in default
in the performance of any bond, debenture, note or any other evidence of
indebtedness or any indenture, mortgage, deed of trust or other contract, lease
or other instrument to which the Holding Company, the Company or any of the
Subsidiaries is a party or by which any of them is bound, or to which any of the
property or assets of the Holding 

                                       12
<PAGE>
 
Company, the Company or any of the Subsidiaries is subject, except such as have
been waived or which would not have, singly or in the aggregate, a Material
Adverse Effect.

        (j)  This Agreement has been duly authorized and validly executed and
delivered by the Company and (assuming the due execution and delivery hereof by
you) constitutes a valid and legally binding agreement of the Company,
enforceable against the Company in accordance with its terms, except (i) as such
enforcement may be limited by bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium and similar laws now or hereafter in effect relating to
creditors' rights generally; (ii) that the remedies of specific performance and
injunctive and other forms of relief are subject to general equitable
principles, whether enforcement is sought at law or in equity and that such
enforcement may be subject to the discretion of the court before which any
proceedings therefor may be brought; and (iii) as rights to indemnity and
contribution may be limited by state or federal laws relating to securities or
by the policies underlying such laws.

        (k)  All indebtedness of the Company that will be repaid with the
proceeds of the issuance and sale of the Series A Notes was incurred, and the
indebtedness represented by the Series A Notes is being incurred, for proper
purposes and in good faith and the Company was, at the time of the incurrence of
such indebtedness that will be repaid with the proceeds of the issuance and sale
of the Series A Notes, and will be on the Closing Date (after giving effect to
the application of the proceeds from the issuance of the Series A Notes)
solvent, and had at the time of the incurrence of such indebtedness that will be
repaid with the proceeds of the issuance and sale of the Series A Notes and will
have on the Closing Date (after giving effect to the application of the proceeds
from the issuance of the Series A Notes) sufficient capital for carrying on
their respective business and were, at the time of the incurrence of such
indebtedness that will be repaid with the proceeds of the issuance and sale of
the Series A Notes, and will be on the Closing Date (after giving effect to the
application of the proceeds from the issuance of the Series A Notes) able to pay
their respective debts as they mature.

        (l)  Other than as described in the Preliminary Offering Memorandum and
the Offering Memorandum, there is no action, suit or proceeding before or by any
court or governmental agency or body, domestic or foreign, pending against or
affecting the Holding Company, the Company or any of the Subsidiaries, or any of
their respective properties, which is required to be disclosed in the
Preliminary Offering Memorandum and the Offering Memorandum, or which would

                                       13
<PAGE>
 
reasonably be expected to result, singly or in the aggregate, in a Material
Adverse Effect or which would reasonably be expected to materially and adversely
affect the consummation of this Agreement or the transactions contemplated
hereby, and to the best of the Company's knowledge, no such proceedings are
contemplated or threatened.

        (m)  The Registration Rights Agreement has been duly authorized by the
Company on the Closing Date, will have been duly executed and delivered by the
Company.  When the Registration Rights Agreement has been duly executed and
delivered, the Registration Rights Agreement will be a valid and binding
agreement of the Company, enforceable against the Company in accordance with its
terms, except (i) as such enforcement may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium and similar laws now or
hereafter in effect relating to creditors' rights generally; and (ii) that the
remedies of specific performance and injunctive and other forms of relief are
subject to general equitable principles, whether enforcement is sought at law or
in equity and that such enforcement is sought at law or in equity and that such
enforcement may be subject to the discretion of the court before which any
proceedings therefor may be brought. On the Closing Date, the Registration
Rights Agreement will conform as to legal matters to the description thereof in
the Offering Memorandum.

        (n)  The execution, delivery and performance of this Agreement and the
other Operative Documents by the Company and the Holding Company and compliance
by the Company and the Holding Company with all provi  sions hereof and thereof
and the consummation of the transactions contemplated hereby and thereby will
not (i) require any consent, approval, authorization or other order of, or
qualification with, any court or governmental body or agency (except such as has
been obtained or as may be required (i) under the securities or Blue Sky laws of
the various states governing the purchase or distribution of the Notes or (ii)
to register the Series B Notes under the Securities Act of 1933 or to qualify
the Indenture under the TIA in connection with the performance by the Company of
its obligations under the Registration Rights Agreement), (ii) conflict with or
constitute a breach of any of the terms or provisions of, or a default under,
the charter or by-laws of the Company or the Holding Company or any bond, note,
debenture or other evidence of indebtedness, indenture, loan agreement,
mortgage, deed of trust, lease or other agreement or instrument that is material
to the Company and the Holding Company, taken as a whole, to which the Company
or the Holding Company is a party or by which the Company or the Holding Company
or their respective property is bound, (iii) violate or conflict with any
material applicable law or any material rule, 

                                       14
<PAGE>
 
regulation, judgment, order or decree of any court or any governmental body or
agency having jurisdiction over the Company, the Holding Company or their
respective property, (iv) result in the imposition or creation of (or the
obligation to create or impose) a material Lien under, any agreement or
instrument to which the Company or the Holding Company is a party or by which
the Company or the Holding Company or their respective property is bound, except
pursuant to the Special Term Loan Agreements, the Bank Agreements and the
Restructuring Agreement (as such term is defined in the Preliminary Offering
Memorandum and the Offering Memorandum) or (v) result in the termination,
suspension or revocation of any Authorization (as defined below) of the Company
or the Holding Company or result in any other impairment of the rights of the
holder of any such Authorization, other than, in the case of clauses (ii),
(iii), (iv) or (v) above, for such conflicts, breaches, defaults, acceleration
of an obligation or Lien (x) arising with respect to obligations and agreements
that will be discharged or terminated concurrently with the closing of the
transactions contemplated hereby or (y) which would not, singly or in the
aggregate, have a Material Adverse Effect.

        (o)  Except as disclosed in the Preliminary Offering Memorandum and the
Offering Memorandum and as would not, singly or in the aggregate, have a
Material Adverse Effect:  (i) the Company in compliance with all laws and
regulations relating to protection of human health or environment or imposing
liability or standards of conduct concerning any Materials of Environmental
Concern (as defined below) ("Environmental Laws"), including, without
                             ------------------                      
limitation, possession of required permits and compliance with the terms of
conditions thereof, and there are no circumstances known to the Company that
will prevent such compliance in the future; (ii) the Company has not received
any notice and there is no pending or threatened action, suit or proceeding
before or by any court of governmental agency or body ("Environmental Claim")
                                                        -------------------  
alleging potential liability (including, but not limited to, investigatory,
cleanup or governmental response costs, natural resources or property
damages, personal injuries, or penalties) of the Company or any person or entity
for whom the Company has contractually retained or assumed responsibility,
arising out of, based on, or resulting from the presence, or release, discharge,
emission or disposal into the environment, of any Material of Environmental
Concern at or from any location, owned or operated by the Company or any
violation or alleged violation of any Environmental Law; and (iii) to the best
of the Company's knowledge, there are no past or present actions, activities,
conditions, events or incidents that could be reasonably expected to form the
basis of any such Environmental Claim; the term "Materials of Environmental
                                                 --------------------------
Concern" means (a) any "hazardous substance" as defined by the Comprehensive
-------                                                                     
Environmental 

                                       15
<PAGE>
 
Response, Compensation and Liability of 1980, as amended, (b) any "hazardous
waste" as defined by the Resource Conservation and Recovery Act, as amended, (c)
any petroleum or petroleum product, (d) any polychlorinated biphenyl, and (e)
any pollutant or contaminant or hazardous, dangerous, or toxic chemical,
material, waste or substance regulated or defined under any other Environmental
Law;

        (p)  The Company has such permits, licenses, consents, exemptions,
franchises, authorizations and other approvals (each, an "Authorization") of,
                                                          -------------      
and has made all filings with and notices to, all governmental or regulatory
authorities and self-regulatory organizations and all courts and other
tribunals, including, without limitation, under any applicable Environmental
Laws, as are necessary to own, lease, license and operate its respective
properties and to conduct its business, except where the failure to have any
such Authorization or to make any such filing or notice would not, singly or in
the aggregate, have a Material Adverse Effect.  Each such Authorization is valid
and in full force and effect and the Company is in compliance with all the terms
and conditions thereof and with the rules and regulations of the authorities and
governing bodies having jurisdiction with respect thereto; and no event has
occurred (including, without limitation, the receipt of any notice from any
authority or governing body) which allows or, after notice or lapse of time or
both, would allow, revocation, suspension or termination of any such
Authorization or results or, after notice or lapse of time or both, would result
in any other impairment of the rights of the holder of any such Authorization;
and such Authorizations contain no restrictions that are burdensome to the
Company or the Holding Company; except where such failure to be valid and in
full force and effect or to be in compliance, the occurrence of any such event
or the presence of any such restriction would not, singly or in the aggregate,
have a Material Adverse Effect.

        (q)  Except as would not result, singly or in the aggregate, in a
Material Adverse effect, the Company and each of the Subsidiaries has title,
free and clear of all Liens (except Permitted Liens (as defined in the
Indenture, including Liens in connection with the Bank Agreements and the
Special Term Loan Agreements)), to all property and assets reflected in the
Company's consolidated financial statements for the nine months ended December
31, 1997.

        (r)  The accountants, Ernst & Young LLP, that has certified the
financial statements and supporting schedules included in the Preliminary
Offering Memorandum and the Offering Memorandum are independent public
accountants with respect to the Company, as required by the Act and the Exchange
Act. The historical financial statements, together with related notes, set forth
in the Preliminary Offering 

                                       16
<PAGE>
 
Memorandum and the Offering Memorandum comply as to form in all material
respects with the requirements applicable to registration statements on Form S-1
under the Act.

        (s)  The historical financial statements, together with related notes
forming part of the Offering Memorandum (and any amendment or supplement
thereto), present fairly the consolidated financial position, results of
operations and changes in financial position of the Company on the basis stated
in the Offering Memorandum at the respective dates or for the respective periods
to which they apply; such statements and related notes have been prepared in
accordance with generally accepted accounting principles consistently applied
throughout the periods involved, except as disclosed therein; and the other
financial and statistical information and data set forth in the Offering
Memorandum relating specifically to the Company (and any amendment or supplement
thereto) are, in all material respects, accurately presented and prepared on a
basis consistent with such financial statements and the books and records of the
Company.

        (t)  The pro forma financial statements included in the Preliminary
Offering Memorandum and the Offering Memorandum have been prepared on a basis
consistent with the historical financial statements of the Company and give
effect to assumptions 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 Offering Memorandum and the Offering 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.

        (u)  Each of the Company and the Holding Company is not and, after
giving effect to the offering and sale of the Series A Notes and the application
of the net proceeds thereof as described in the Offering Memorandum, will not
be, an "investment company," as such term is defined in the Investment Company
Act of 1940, as amended.

        (v)  There are no contracts, agreements or understandings between the
Company or the Holding Company and any person granting such person the right to
require the Company or the Holding Company to file a registration statement
under the Act with respect to any securities of the Company or to require the
Company or the Holding Company to include such securities with the Notes
registered pursuant to any Registration Statement.

                                       17
<PAGE>
 
        (w)  Neither the Company nor the Holding Company nor any agent thereof
acting on the behalf of them has taken, and none of them will take, any action
that might cause this Agreement or the issuance or sale of the Series A Notes to
violate Regulation G (12 C.F.R. Part 207), Regulation T (12 C.F.R. Part 220),
Regulation U (12 C.F.R. Part 221) or Regulation X (12 C.F.R. Part 224) of the
Board of Governors of the Federal Reserve System.

        (x)  No "nationally recognized statistical rating organization" as such
term is defined for purposes of Rule 436(g)(2) under the Act (i) has imposed (or
has informed the Company that it is considering imposing) any condition
(financial or otherwise) on the Company's retaining any rating assigned to the
Company or any securities of the Company or (ii) has indicated to the Company
that it is considering (a) the downgrading, suspension or withdrawal of, or any
review for a possible change that does not indicate the direction of the
possible change in, any rating so assigned or (b) any change in the outlook for
any rating of the Company or any securities of the Company.

        (y)  Since the respective dates as of which information is given in the
Offering Memorandum, other than as set forth in the Offering Memorandum (ex
clusive of any amendments or supplements thereto subsequent to the date of this
Agreement), (i) there has not occurred any material adverse change or any
development involving a prospective material adverse change in the condition,
financial or otherwise, or the earnings, business, management or operations of
the Company and the Holding Company, taken as a whole, (ii) there has not been
any material adverse change or any development involving a prospective material
adverse change in the capital stock or in the long-term debt of the Company and
(iii) the Company has not incurred any material liability or obligation, direct
or contingent.

        (z)  Each of the Preliminary Offering Memorandum and the Offering
Memorandum, as of its date, contains all the information specified in, and
meeting the requirements of, Rule 144A(d)(4) under the Act.

        (aa) When the Series A Notes are issued and delivered pursuant to this
Agreement, the Series A Notes will not be of the same class (within the meaning
of Rule 144A under the Act) as any security of the Company that is listed on a
national securities exchange registered under Section 6 of the Exchange Act or
that is quoted in a United States automated inter-dealer quotation system.

                                       18
<PAGE>
 
        (ab)  No form of general solicitation or general advertising (as defined
in Regulation D under the Act) was used by the Company, the Holding Company or
any of their respective representatives (other than the Initial Purchasers and
their representatives, as to whom the Company and the Holding Company make no
representation) in connection with the offer and sale of the Series A Notes
contemplated hereby, including, but not limited to, articles, notices or other
communications published in any newspaper, magazine, or similar medium or
broadcast over television or radio, or any seminar or meeting whose attendees
have been invited by any general solicitation or general advertising. No
securities of the same class as the Series A Notes have been issued and sold by
the Company within the six-month period immediately prior to the date hereof.

        (ac)  Prior to the effectiveness of any Registration Statement,
the Indenture is not required to be qualified under the TIA.

        (ad)  None of the Company, the Holding Company nor any of their
respective affiliates or any person acting on its or their behalf (other than
the Initial Purchasers, as to whom the Company and the Holding Company make no
representa tion) has engaged or will engage in any directed selling efforts
within the meaning of Regulation S under the Act ("Regulation S") with respect
                                                   ------------     
to the Series A Notes.

        (ae)  The Series A Notes offered and sold in reliance on Regulation S
have been and will be offered and sold in "offshore transactions" within meaning
of Rule 902 of Regulation S.

        (af)  The sale of the Series A Notes pursuant to Regulation S is not
part of a plan or scheme to evade the registration provisions of the Act.

        (ag)  No registration under the Act of the Series A Notes is required
for the sale of the Series A Notes to the Initial Purchasers as contemplated
hereby or for the Exempt Resales, assuming the accuracy of the Initial
Purchasers' representations and warranties and agreements set forth in Section 7
hereof.

        (ah)  Each certificate signed by any officer of the Company and
delivered to the Initial Purchasers or counsel for the Initial Purchasers
pursuant to the terms of this Agreement shall be deemed to be a representation
and warranty of the Company, as applicable, to the Initial Purchasers as to the
matters covered thereby.

                                       19
<PAGE>
 
        (ai)  Except as disclosed in the Offering Memorandum, each of the
amendments to the Holding Company and the Company's respective certificate of
incorporation and bylaws, each of the agreements with their stockholders and
other parties, and each of the actions of the Holding Company and the Company's
board of directors and stockholders which are in each case necessary to effect
any of the transactions and events described in the Preliminary Offering
Memorandum and the Offering Memorandum are in full force and effect.

        (aj)  Except as would not, individually or in the aggregate, have a
Material Adverse Effect, the Company and each Subsidiary maintains insurance
covering their properties, operations, personnel and businesses; such insurance
insures against such losses and risks as are adequate in accordance with
customary industry practice to protect the Company and its Subsidiaries and
their businesses; neither the Company nor any Subsidiary has received notice
from any insurer or agent of such insurer that substantial capital improvements
or other expenditures will have to be made in order to continue such insurance;
all such insurance is outstanding and duly in force on the date hereof and will
be outstanding and duly in force on the Closing Date.

        (ak)  The Company and each of the Subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (iii) access to
assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.

        (al)  Except as described in the Preliminary Offering Memorandum and the
Offering Memorandum, neither the Holding Company, the Company nor any of the
Subsidiaries has violated any federal, state or local law relating to
discrimination in the hiring, promotion or pay of employees nor any applicable
wage or hour laws, nor any provisions of the Employee Retirement Income Security
Act of 1974 ("ERISA") or the rules and regulations promulgated thereunder, nor
has the Company or any of the Subsidiaries engaged in any unfair labor practice,
which in each case might result, singly or in the aggregate, in a Material
Adverse Effect. Except as described in the Preliminary Offering Memorandum and
the Offering Memorandum, there is (i) no significant unfair labor practice
complaint 

                                       20
<PAGE>
 
pending against the Company or any of the Subsidiaries or, to the best
knowledge of the Company, threatened against any of them, before the National
Labor Relations Board or any state or local labor relations board, and no
significant grievance or significant arbitration proceeding arising out of or
under any collective bargaining agreement is so pending against the Company or
any of the Subsidiaries or, to the best knowledge of the Company, threatened
against any of them, (ii) no significant strike, labor dispute, slowdown or
stoppage pending against the Company or any of its Subsidiaries or, to the best
knowledge of the Company, threatened against the Company or any of the
Subsidiaries and (iii) to the best knowledge of the Company, no union
representation question existing with respect to the employees of the Company or
any of the Subsidiaries and, to the best knowledge of the Company, no union
organizing activities are taking place, except (with respect to any matter
specified in clause (i), (ii) or (iii) above, singly or in the aggregate) such
as could not have a Material Adverse Effect.

          The Company acknowledges that the Initial Purchasers and, for purposes
of the opinions to be delivered to the Initial Purchasers pursuant to Section 9
hereof, counsel to the Company and counsel to the Initial Purchasers, will rely
upon the accuracy and truth of the foregoing representations and hereby consent
to such reliance.

          7.   Initial Purchasers' Representations and Warranties.  Each of the
               --------------------------------------------------              
Initial Purchasers, severally and not jointly, represents and warrants to the
Company, and agrees that:

               (a)   Such Initial Purchasers are QIBs with such knowledge and
experience in financial and business matters as is necessary in order to
evaluate the merits and risks of an investment in the Series A Notes.

               (b)   Such Initial Purchasers (A) are not acquiring the Series A
Notes with a view to any distribution thereof or with any present intention of
offering or selling any of the Series A Notes in a transaction that would
violate the Act or the securities laws of any state of the United States or any
other applicable jurisdiction and (B) will be reoffering and reselling the
Series A Notes only to (x) QIBs in reliance on the exemption from the
registration requirements of the Act provided by Rule 144A and (y) in offshore
transactions in reliance upon Regulation S under the Act.

                                       21
<PAGE>
 
        (c)   Such Initial Purchasers agree that no form of general solicitation
or general advertising (within the meaning of Regulation D under the Act) has
been or will be used by such Initial Purchasers or any of their representatives
in connection with the offer and sale of the Series A Notes pursuant hereto,
including, but not limited to, articles, notices or other communications
published in any newspaper, magazine or similar medium or broadcast over
television or radio, or any seminar or meeting whose attendees have been invited
by any general solicitation or general advertising.

        (d)   Such Initial Purchasers agree that, in connection with Exempt
Resales, such Initial Purchasers will solicit offers to buy the Series A Notes
only from, and will offer to sell the Series A Notes only to, Eligible
Purchasers. Each Initial Purchaser further agrees that it will offer to sell the
Series A Notes only to, and will solicit offers to buy the Series A Notes only
from (A) purchasers that the Initial Purchasers reasonably believe are QIBs, and
(B) Regulation S Purchasers, in each case, that agree that (x) Series A Notes
purchased by them may be resold, pledged or otherwise transferred within the
time period referred to under Rule 144(k) (taking into account the provisions of
Rule 144(d) under the Act, if applicable) under the Act, as in effect on the
date of the transfer of such Series A Notes, only (I) to the Company or any of
its Subsidiaries, (II) to a person whom the seller reasonably believes is a QIB
purchasing for its own account or for the account of a QIB in a transaction
meeting the requirements of Rule 144A under the Act, (III) in an offshore
transaction (as defined in Rule 902 under the Act) meeting the requirements of
Rule 904 of the Act, (IV) in a transaction meeting the requirements of Rule 144
under the Act, (V) in accordance with another exemption from the registration
requirements of the Act (and based upon an opinion of counsel acceptable to the
Company) or (VI) pursuant to an effective registration statement and, in each
case, in accordance with the applicable securities laws of any state of the
United States or any other applicable jurisdiction and (y) they will deliver to
each person to whom such Series A Notes or an interest therein is transferred a
notice substantially to the effect of the foregoing.

        (e)   Such Initial Purchaser and its affiliates or any person acting on
its or their behalf have not engaged or will not engage in any directed selling
efforts within the meaning of Regulation S with respect to the Series A Notes.

        (f)   The Series A Notes offered and sold by such Initial Purchaser
pursuant hereto in reliance on Regulation S have been and will be offered and
sold only in offshore transactions.

                                       22
<PAGE>
 
         (g)   The sale of the Series A Notes offered and sold by such Initial
Purchaser pursuant hereto in reliance on Regulation S is not part of a plan or
scheme to evade the registration provisions of the Act.

               Such Initial Purchasers acknowledge that the Company and, for
purposes of the opinions to be delivered to each Initial Purchaser pursuant to
Section 9 hereof, counsel to the Company and counsel to the Initial Purchasers
will rely upon the accuracy and truth of the foregoing representations and the
Initial Purchasers hereby consent to such reliance.

           8.  Indemnification.
               --------------- 

               (a)  The Company agrees, to indemnify and hold harmless the
Initial Purchasers, their directors, their officers and each person, if any, who
controls such Initial Purchasers within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, from and against any and all losses, claims,
damages, liabilities and judgments (including, without limitation, any legal or
other expenses incurred in connection with investigating or defending any
matter, including any action, that could give rise to any such losses, claims,
damages, liabilities or judgments) caused by any untrue statement or alleged
untrue statement of a material fact contained in the Offering Memorandum (or any
amendment or supplement thereto), the Preliminary Offering Memorandum or any
Rule 144A Information provided by the Company or the Holding Company to any
holder or prospective purchaser of Series A Notes pursuant to Section 5(h) or
caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages, liabilities or
judgments are caused by any such untrue statement or omission or alleged untrue
statement or omission based upon information relating to the Initial Purchasers
furnished in writing to the Company by such Initial Purchasers; provided,
however, that the foregoing indemnity agreement with respect to any Preliminary
Offering Memorandum shall not inure to the benefit of any Initial Purchasers who
failed to deliver a Final Offering Memorandum (as then amended or supplemented,
provided by the Company to the several Initial Purchasers in the requisite
quantity and on a timely basis to permit proper delivery on or prior to the
Closing Date) to the person asserting any losses, claims, damages and
liabilities and judgments caused by any untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Offering Memorandum,
or caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, if such material misstatement 

                                       23
<PAGE>
 
or omission or alleged material misstatement or omission was cured in the Final
Offering Memorandum.

        (b)   The Initial Purchasers agree  to indemnify and hold harmless the
Company, and its respective directors and officers and each person, if any, who
controls (within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act) the Company, to the same extent as the foregoing indemnity from
the Company to the Initial Purchasers but only with reference to information
relating to the Initial Purchaser furnished in writing to the Company by the
Initial Purchasers expressly for use in the Preliminary Offering Memorandum or
the Offering Memorandum.

        (c)   In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 8(a) or 8(b) (the
"indemnified party"), the indemnified party shall promptly notify the person
------------------                                                          
against whom such indemnity may be sought (the "indemnifying party") in writing
                                                ------------------             
and the indemnifying party shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the indemnified party and
the payment of all fees and expenses of such counsel, as incurred (except that
in the case of any action in respect of which indemnity may be sought pursuant
to both Sections 8(a) and 8(b), the Initial Purchasers shall not be required to
assume the defense of such action pursuant to this Section 8(c), but may employ
separate counsel and participate in the defense thereof, but the fees and
expenses of the counsel, except as provided below, shall be at the expense of
such Initial Purchasers).  Any indemnified party shall have the right to employ
separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of the indemnified
party unless (i) the employment of such counsel shall have been specifically
authorized in writing by the indemnifying party, (ii) the indemnifying party
shall have failed to assume the defense of such action or employ counsel
reasonably satisfactory to the indemnified party within a reasonable time after
notice of commencement of such action or proceeding or (iii) the named parties
to any such action (including any impleaded parties) include both the
indemnified party and the indemnifying party, and the indemni  fied party shall
have been advised by such counsel that there may be one or more legal defenses
available to it which are different from or additional to those available to the
indemnifying party (in which case the indemnifying party shall not have the
right to assume the defense of such action on behalf of the indemnified party).
In any such case, the indemnifying party shall not, in connection with any one
action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circum-

                                       24
<PAGE>
 
stances, be liable for the fees and expenses of more than one separate firm of
attorneys (in addition to any local counsel) for all indemnified parties and all
such fees and expenses shall be reimbursed as they are incurred. Such firm shall
be designated in writing by Donaldson, Lufkin & Jenrette Securities Corporation,
in the case of the parties indemnified pursuant to Section 8(a) and by the
Company, in the case of parties indemnified pursuant to Section 8(b). The
indemnifying party shall indemnify and hold harmless the indemnified party from
and against any and all losses, claims, damages, liabilities and judgments by
reason of any settlement of any action (i) effected with its written consent or
(ii) effected without its written consent if (a) the fees and expenses of
counsel are at the expense of the indemnifying party and the indemnified party
shall have requested the indemnifying party for such fees and expenses of
counsel as incurred, (b) such indemnifying party shall have failed to reimburse
the indemnified party in accordance with such request for reimbursement prior to
the date of settlement, (c) the amount of such fees and expenses or the
reimbursement obligation is not being disputed in good faith by the indemnifying
party (the "Default"), (d) the indemnified party provides the indemnifying party
twenty days prior written notice to the indemnifying party of such Default and
the indemnified party's intention to settle the action without the indemnifying
party's written consent, including the details of the proposed settlement and
(e) the indemnifying party has failed to cure such Default. No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement or compromise of, or consent to the entry of judgment with
respect to, any pending or threatened action in respect of which the indemnified
party is a party or in respect of which indemnity or contribution may be sought
hereunder by the indemnified party, unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability on claims that are or could have been the subject matter of such
action and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of the indemnified party.

        (d)  To the extent the indemnification provided for in this Section 8 is
unavailable to an indemnified party or insufficient in respect of any losses,
claims, damages, liabilities or judgments referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities and judgments (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company, on the one hand, and the Initial Purchasers, on the other hand from the
offering of the Series A Notes or (ii) if the allocation provided by clause
8(d)(i) above is not permitted by applicable law, in such 

                                       25
<PAGE>
 
proportion as is appropriate to reflect not only the relative benefits referred
to in clause 8(d)(i) above but also the relative fault of the Company, on the
one hand, and the Initial Purchasers, on the other hand, in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or judgments, as well as any other relevant equitable
considerations. The relative benefits received by the Company, on the one hand,
and the Initial Purchasers, on the other hand, shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Series A Notes
(after underwriting discounts and commissions, but before deducting expenses)
received by the Company, and the total discounts and commissions received by the
Initial Purchasers bear to the total price to investors of the Series A Notes,
in each case as set forth in the table on the cover page of the Offering
Memorandum. The relative fault of the Company, on the one hand, and each Initial
Purchaser, on the other hand, shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company, on the one hand, or an Initial Purchaser, on the other
hand, and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.

          The Company and the Initial Purchasers agree that it would not be just
and equitable if contribution pursuant to this Section 8(d) were determined by
pro rata allocation (even if the Initial Purchasers were treated as one entity
for such purpose) or by any other method of allocation which does not take
account of the equitable consid erations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities or judgments referred to in
the immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any matter,
including any action, that could have given rise to such losses, claims,
damages, liabilities or judgments. Notwithstanding the provisions of this
Section 8, each Initial Purchaser shall not be required to contribute any amount
in excess of the amount by which the total discounts and commissions received by
such Initial Purchaser exceeds the amount of any damages which the Initial
Purchaser has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omis sion. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Initial Purchasers' obligations to contribute
pursuant to this Section 8(d) are several in 

                                       26
<PAGE>
 
proportion to the respective principal amount of Series A Notes purchased by
each of the Initial Purchasers hereunder and not joint.

          (e)   The remedies provided for in this Section 8 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity.

    9.    Conditions of Initial Purchasers' Obligations.  The obligations of the
          ---------------------------------------------                         
Initial Purchasers to purchase the Series A Notes under this Agreement are
subject to the satisfaction of each of the following conditions:

          (a)  All the representations and warranties of the Company contained
in this Agreement shall be true and correct in all material respects on the
Closing Date with the same force and effect as if made on and as of the Closing
Date.

          (b)  On or after the date hereof, (i) there shall not have occurred
any downgrading, suspension or withdrawal of, nor shall any notice have been
given of any potential or intended downgrading, suspension or withdrawal of, or
of any review (or of any potential or intended review) for a possible change
that does not indicate the direction of the possible change, in any rating of
the Company or any securities of the Company (including, without limitation, the
placing of any of the foregoing ratings on credit watch with negative or
developing implications or under review with an uncertain direction) by any
"nationally recognized statistical rating organization" as such term is defined
for purposes of Rule 436(g)(2) under the Act, (ii) there shall not have occurred
any change, nor shall any notice have been given of any potential or intended
change, in the outlook for any rating of the Company or the Holding Company or
any securities of the Company or the Holding Company by any such rating
organization and (iii) no such rating organization shall have given notice that
it has assigned (or is considering assigning) a lower rating to the Notes than
that on which the Notes were marketed.

          (c)  Since the respective dates as of which information is given in
the Offering Memorandum, other than as set forth in the Offering Memorandum (ex
clusive of any amendments or supplements thereto subsequent to the date of this
Agreement) (i) there shall not have occurred any material adverse change or any
development involving a prospective material adverse change in the condition,
financial or otherwise, or the earnings, business, management or operations of
the Company and any of its subsidiaries, taken as a whole, (ii) there shall not
have been any change or any development involving a prospective change in the
capital stock or 

                                       27
<PAGE>
 
in the long-term debt of the Company or any of its Subsidiaries and (iii) the
Company or any of its Subsidiar ies shall not have incurred any liability or
obligation, direct or contingent, the effect of which, in any such case
described in clause 9(c)(i), 9(c)(ii) or 9(c)(iii), in your judgment, is
material and adverse and, in your judgment, makes it impracticable to market the
Series A Notes on the terms and in the manner contemplated in the Offering
Memorandum.

          (d)  You shall have received on the Closing Date a certificate dated
the Closing Date, signed by the President and the Chief Financial Officer of the
Company, confirming the matters set forth in Sections 9(a) and 9(b) and stating
that the Company has complied with all the agreements and satisfied all of the
conditions herein contained and required to be complied with or satisfied on or
prior to the Closing Date.

          (e)  You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Initial Purchasers), dated the Closing
Date, of Katten, Muchin and Zavis, counsel for the Company, to the effect that:

               (i)    Each of the Company and Holding is a corporation duly
     organized, existing and in good standing under the laws of the State of
     Delaware;

               (ii)   The Company is qualified to transact business as a foreign
     corporation and in good standing in the jurisdictions listed on schedule to
     the opinion;

               (iii)  The Company has the requisite corporate power and
     authority to own, lease and operate its properties and to conduct its
     business as described in the Offering Memorandum;

               (iv)   The Company's authorized and issued capital stock as of
     March 19, 1998 was 128 shares of $.01 par value Common Stock;

               (v)    The Company has the requisite corporate power and
     authority to enter into and perform its obligations under the Purchase
     Agreement and the Registration Rights Agreement and to issue, sell and
     deliver the Series A Notes to be sold by it to the Initial Purchasers as
     provided in the Offering Memorandum and the Purchase Agreement, and the
     Purchase Agreement and the Registration Rights Agreement have been duly
     authorized 

                                       28
<PAGE>
 
     by all requisite corporate action and have been duly executed and delivered
     by the Company and are enforceable against the Company in accordance with
     their respective terms;

               (vi)   The Company has the requisite corporate power and
     authority to enter into the Indenture and the Indenture has been duly
     authorized by all requisite corporate action and has been executed and
     delivered by the Company and is enforceable in accordance with its terms;
     the Indenture complies as to form in all material respects with the
     requirements of the Trust Indenture Act of 1939, as amended (the "TIA"),
     and the rules and regulations of the Securities and Exchange Commission
     (the "Commission") applicable to an indenture which is qualified
     thereunder; and no qualification of the Indenture under the TIA is required
     in connection with the offer and sale of the Series A Notes contemplated by
     the Purchase Agreement or in connection with the Exempt Resales;

               (vii)  The Series A Notes have been duly authorized by all
     requisite corporate action of the Company, and, assuming they have been
     executed by the Trustee, when issued and delivered by the Company to the
     Initial Purchasers against payment therefor and in accordance with the
     terms of the Purchase Agreement will be entitled to the benefits of the
     Indenture and will be enforceable against the Company in accordance with
     their terms;

               (viii) Neither (i) the offer, sale or delivery of the Series A
     Notes in the manner contemplated in the Offering Memorandum and the
     Purchase Agreement nor (ii) the execution, delivery or performance by the
     Company of the Purchase Agreement, the Registration Rights Agreement or the
     Indenture, compliance by the Company with the provisions thereof nor
     consummation by the Company of the transactions contemplated thereby, will
     (a) violate the Certificate of Incorporation or By-Laws of the Company or
     Holding, (b) result in a material breach of, or constitute a material
     default under, any material contract, instrument, agreement, indenture,
     lease or other instrument filed by the Company with the Commission pursuant
     to its reporting under the Securities Exchange Act of 1934, as amended
     (collectively "Material Contracts"), or (c) other than as described in the
     Offering Memorandum with respect to the liens in connection with the Bank
     Agreements, the Special Term Loan Agreements and the Holding Notes (as
     defined in the Offering Memoran dum), will result in the creation or
     imposition of any lien, 

                                       29
<PAGE>
 
     charge or encumbrance upon any property or assets of the Company pursuant
     to the terms of any Material Contract, nor will any such action result in
     any violation in any material respect of any law, regulation, judgment,
     injunction, order or decree known to us and applicable to the Company or
     any of its properties;

               (ix)   The Series B Notes have been duly authorized by all
     requisite corporate action of the Company;

               (x)    To the knowledge of such counsel, no consent, approval,
     order or authorization of, or registration, declaration or filing with, any
     governmental authority is required on the part of the Company (except as
     has been obtained, or such as may be required (i) under state securities or
     Blue Sky laws governing the purchase and distribution of the Series A
     Notes, or (ii) to register the Series B Notes under the Securities Act of
     1933, as amended (the "33 Act"), to qualify the Indenture under the TIA and
     under state securities or Blue Sky laws in connection with the performance
     by the Company of its obligations under the Registration Rights Agreement,
     as to which we express no opinion) in connection with the authorization,
     issuance and delivery of the Series A Notes to the Initial Purchasers as
     contemplated by the Purchase Agreement and the Offering Memorandum or the
     execution, delivery or performance by the Company of each of the Purchase
     Agreement, the Registration Rights Agreement and the Indenture;

               (xi)   Those provisions of any contract or other legal documents
     that are described in the Offering Memorandum conform in all material
     respects to the descriptions thereof contained in the Offering Memoran dum;

               (xii)  The description of Series A Notes conforms in all material
     respects to the descriptions thereof contained in the Offering Memorandum;

               (xiii) The information contained in the Offering Memorandum under
     the headings "Description of Other Indebtedness" and "U.S. Federal Income
     Tax Consequences" to the extent it constitutes matters of law, summaries of
     legal matters, documents or proceedings, or legal conclusions, has been
     reviewed by such counsel and is correct in all material respects;

                                       30
<PAGE>
 
               (xiv)   To the knowledge of such counsel, except as described in
     the Offering Memorandum, no holder of any securities of the Company (except
     for the holders of the Series A Notes) or any other person has the right to
     have any securities of the Company included in any registration statement
     contemplated by the Registration Rights Agreement;

               (xv)    Assuming (i) the accuracy of the representations of the
     Company in Sections 6(ab), (ad), (ae) and (af) of the Purchase Agreement,
     (ii) the accuracy of the representations and warranties of the Initial
     Purchasers in Section 7 of the Purchase Agreement, (iii) the due
     performance by the Initial Purchasers of the covenants and agreements set
     forth in Section 7 of the Purchase Agreement, (iv) compliance by the
     Initial Purchasers with the offering and transfer procedures and
     restrictions described in the Offering Memorandum, (vi) the accuracy of the
     representations and warranties made in accordance with the Purchase
     Agreement and the Offering Memorandum by purchasers to whom the Initial
     Purchasers initially resell the Series A Notes and (vi) purchasers to whom
     the Initial Purchasers initially resell the Series A Notes receive a copy
     of the Offering Memorandum prior to such sale, it is not necessary to
     register the Series A Notes under the 33 Act in connection with (A) the
     offer and sale of the Series A Notes and the delivery of the certificate
     for the Series A Notes on the Closing Date by the Company to the Initial
     Purchasers pursuant to the Purchase Agreement and (B) the offer and resale
     of the Series A Notes delivered on the Closing Date by the Initial
     Purchasers as contemplated by the Purchase Agreement;

               (xvi)   Neither the consummation of the transactions contemplated
     by the Purchase Agreement nor the sale, issuance, execution or delivery of
     the Series A Notes, nor the application of the proceeds therefrom (as
     described in the Offering Memorandum under the caption "Use of Proceeds"),
     will violate regulation G (12 C.F.R. Part 207), T (12 C.F.R. Part 220), U
     (12 C.F.R. Part 221) or X (12 C.F.R. Part 224) of the Board of Governors of
     the Federal reserve System;

               (xvii)  Neither the Company nor Holdings is or, after giving
     effect to the offering and sale of the Series A Notes and the application
     of the proceeds as described in the Offering Memorandum, will be an
     "investment company" as such term is defined in the Investment Company Act
     of 1940, as amended;

                                       31
<PAGE>
 
               (xviii)  The Company is not required to deliver the information
     specified in Rule 144(d)(4) in connection with the offering and resale of
     the Series A Notes by the Initial Purchasers.

          Such counsel shall further state that it has participated in
conferences with officers and other representatives of the Company, the Initial
Purchasers and their counsel and representatives of the independent public
accountants for the Company, at which conferences the contents of the Offering
Memorandum, and related matters were discussed, and, although such counsel does
not pass upon and do not assume any responsibility for the accuracy,
completeness or fairness of the statements in the Offering Memorandum, any
amendment thereof or supplement thereto (except as expressly provided in such
opinion), on the basis of the foregoing (relying as to materiality to a large
extent upon the opinions of officers and other representatives of the Company),
no facts (other than the financial statements and other financial and
statistical information contained therein, as to which such counsel need not
express a belief) have come to the attention of such counsel in the course of
such participation or representation of the Company to lead such counsel to
believe that the Offering Memorandum or any amendment thereof, as of their dates
or as of the date hereof, contains any untrue statement of a material fact or
omits a state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading.

          Such counsel shall also confirm that, based solely on a review of our
search of the dockets of the (a) Los Angeles Superior Court, Central District,
(b) Delaware Supreme Courts, (c) United States District Courts of Delaware and
the Central District of California and (d) United States Courts of Appeals in
Delaware and California copies of which are attached hereto as Exhibit A and
inquiries of appropriate officers of the Company to such counsel's knowledge,
there are no actions or proceedings against the Company pending or overtly
threatened in writing, before any court, governmental agency or arbitrator,
which (i) seek to affect the enforceability of the Purchase Agreement, the
Registration Rights Agreement, the Series A Notes or the Indenture or (ii) are
required to be described in the Offering Memorandum which are not described as
required, as if the Offering Memorandum were a prospectus subject to the
requirements of the 33 Act.
 
          The opinion of Katten, Muchin and Zavis described in Section 9(e)
above shall be rendered to you at the request of the Company and the Holding
Company and shall so state therein.

                                       32
<PAGE>
 
        (f)  The Initial Purchasers shall have received on the Closing Date an
opinion, dated the Closing Date, of Skadden, Arps, Slate, Meagher & Flom LLP,
counsel for the Initial Purchasers in form and substance reasonably satisfactory
to the Initial Purchasers.

        (g)  The Initial Purchasers shall have received, at the time this
Agreement is executed and at the Closing Date, letters dated the date hereof and
of the Closing Date, as the case may be, in form and substance satisfactory to
the Initial Purchasers from Ernst & Young LLP, independent public accountant,
containing the information and statements of the type ordinarily included in
accountant's "comfort let ter" to the Initial Purchasers with respect to the
financial statements and certain financial information contained in the Offering
Memorandum.

        (h)  The Series A Notes shall have been approved by the NASD for trading
and duly listed in PORTAL.

        (i)  The Initial Purchasers shall have received a counterpart, conformed
as executed of the Indenture which shall have been entered into by the Company
and the Trustee.

        (j)  The Company shall have executed the Registration Rights Agreement
and the Initial Purchasers shall have received an original copy thereof, duly
executed by the Company.

        (k)  The Company shall not have failed at or prior to the Closing Date
to perform or comply with any of the agreements herein contained and required to
be performed or complied with by the Company, as the case may be, at or prior to
the Closing Date.

        (l)  The Initial Purchasers shall have received a solvency opinion from
Murray, Devine & Co., Inc. in form and substance reasonably satisfactory to the
Initial Purchasers.

        (m)  On or prior to the Closing Date, (i) (A) the Refinancing
Transactions (as defined in the Offering Memorandum) shall have been consummated
and (B) the Company shall have entered into the Bank Agreements and the Special
Term Loan Agreements and all conditions to the effectiveness thereof shall have
been satisfied or waived, (ii) such transactions described in the foregoing
clause (i) shall continue to be in full force and effect in accordance with the
terms thereof, and (iii) 

                                       33
<PAGE>
 
the Company shall have provided to each of the Initial Purchasers and counsel to
the Initial Purchasers copies of the definitive Bank Agreements and the Special
Term Loan Agreements and copies of all material closing documents delivered in
connection therewith.

             (n)  The Initial Purchasers shall have been furnished with a copy
of the opinions delivered on behalf of the Company and the Holding Company, as
applicable, in connection with the Refinancing Transactions, the Bank Agreements
and the Special Term Loan Agreements, which opinions shall expressly state, or
be accompanied by letters expressly stating, that the Initial Purchasers are
entitled to rely on the opinions therein.

      10.    Effectiveness of Agreement and Termination.  This Agreement shall
             ------------------------------------------                       
become effective upon the execution and delivery of this Agreement by the
parties hereto.

      This Agreement may be terminated at any time prior to the Closing Date by
the Initial Purchasers by written notice to the Company if any of the following
has occurred: (i) any outbreak or escalation of hostilities or other national or
international calamity or crisis or change in economic conditions or in the
financial markets of the United States or elsewhere that, in the Initial
Purchasers' judgment, is material and adverse and, in the Initial Purchasers'
judgment, make it impracticable to market the Series A Notes on the terms and in
the manner contemplated in the Offering Memorandum, (ii) the suspension or
material limitation of trading in securities or other instruments on the New
York Stock Exchange, the American Stock Exchange, the Chicago Board of Options
Exchange, the Chicago Mercantile Exchange, the Chicago Board of Trade or the
Nasdaq National Market or limitation on prices for securities or other
instruments on any other such exchange or the Nasdaq National Market, (iii) the
suspension of trading of any securities of the Company on any exchange or in the
over-the-counter market, (iv) the enactment, publication, decree or other
promulgation of any federal or state statute, regulation, rule or order of any
court or other governmental authority which in your opinion materially and
adversely affects, or will materially and adversely affect, the business,
prospects, financial condition or results of operations of the Company, taken as
a whole, (v) the declaration of a banking moratorium by either federal or New
York State authorities or (vi) the taking of any action by any federal, state or
local government or agency in respect of its monetary or fiscal affairs which in
your opinion has a material adverse effect on the financial markets in the
United States.

                                       34
<PAGE>
 
     If on the Closing Date any one or more of the Initial Purchasers shall fail
or refuse to purchase the Series A Notes which it or they have agreed to
purchase hereunder on such date and the aggregate principal amount of the Series
A Notes which such defaulting Initial Purchaser or Initial Purchasers, as the
case may be, agreed but failed or refused to purchase is not more than one-tenth
of the aggregate principal amount of the Series A Notes to be purchased on such
date by all Initial Purchasers, each non-defaulting Initial Purchaser shall be
obligated severally, in the proportion which the principal amount of the Series
A Notes set forth opposite its name in Schedule B bears to the aggregate
principal amount of the Series A Notes which all the non-defaulting Initial
Purchasers, as the case may be, have agreed to purchase, or in such other
proportion as you may specify, to purchase the Series A Notes which such
defaulting Initial Purchaser or Initial Purchasers, as the case may be, agreed
but failed or refused to purchase on such date; provided that in no event shall
the aggregate principal amount of the Series A Notes which any Initial Purchaser
has agreed to purchase pursuant to Section 2 hereof be increased pursuant to
this Section 10 by an amount in excess of one-ninth of such principal amount of
the Series A Notes without the written consent of such Initial Purchaser.  If on
the Closing Date any Initial Purchaser or Initial Purchasers shall fail or
refuse to purchase the Series A Notes and the aggregate principal amount of the
Series A Notes with respect to which such default occurs is more than one-tenth
of the aggregate principal amount of the Series A Notes to be purchased by all
Initial Purchasers and arrangements satisfactory to the Initial Purchasers and
the Company for purchase of such the Series A Notes are not made within 48 hours
after such default, this Agreement will terminate without liability on the part
of any non-defaulting Initial Purchaser and the Company.  In any such case which
does not result in termination of this Agreement, either you or the Company
shall have the right to postpone the Closing Date, but in no event for longer
than seven days, in order that the required changes, if any, in the Offering
Memorandum or any other documents or arrangements may be effected. Any action
taken under this paragraph shall not relieve any defaulting Initial Purchaser
from liability in respect of any default of any such Initial Purchaser under
this Agreement.

      11.     Miscellaneous.  Notices given pursuant to any provision of this
              -------------                                                  
Agreement shall be addressed as follows:  (i) if to the Company or the Holding
Company, to Earle M. Jorgensen Company, 3050 East Birch Street, Brea, California
92822, Attention: President, with a copy to Katten, Muchin and Zavis at 1999
Avenue of the Stars, Suite 1400, Los Angeles, CA 90007-6042, Attention: Mark
Conley, Esq., (ii) if to either Initial Purchaser, c/o Donaldson, Lufkin &
Jenrette Securities Corpo  ration, 277 Park Avenue, New York, New York 10172,
Attention: Patrick 

                                       35
<PAGE>
 
Fallon, with a copy to Skadden, Arps, Slate, Meagher & Flom LLP at 919 Third
Avenue, New York, NY 10022, Attention: Mark C. Smith, Esq. or (iii) in any case
to such other address as the person to be notified may have requested in
writing.

          The respective indemnities, contribution agreements, representations,
warranties and other statements of the Company, and the Initial Purchasers set
forth in or made pursuant to this Agreement shall remain operative and in full
force and effect, and will survive delivery of and payment for the Series A
Notes, regardless of (i) any investigation, or statement as to the results
thereof, made by or on behalf of the Initial Purchasers, the officers or
directors of an Initial Purchaser, any person controlling an Initial Purchaser,
the Company, the Holding Company, the officers or directors of the Company or
the Holding Company, or any person controlling the Company, (ii) acceptance of
the Series A Notes and payment for them hereunder and (iii) termination of this
Agreement.

          If for any reason the Series A Notes are not delivered by or on behalf
of the Company as provided herein (other than as a result of any termination of
this Agree  ment pursuant to Section 10), the Company agrees to reimburse the
Initial Purchasers for all out-of-pocket expenses (including the fees and
disbursements of counsel) incurred by them.  Notwithstanding any termination of
this Agreement, the Company shall be liable for all expenses which it has agreed
to pay pursuant to Section 5(i) hereof. The Company also agrees to reimburse the
Initial Purchasers and their officers, directors and each person, if any, who
controls such Initial Purchasers within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act for any and all fees and expenses (including
without limitation the fees and expenses of counsel) incurred by them in
connection with enforcing their rights under this Agreement (including without
limitation their rights under Section 8).

          Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Company, the Holding
Company, the Initial Purchasers, the Initial Purchasers' directors and officers,
any controlling persons referred to herein, the directors of the Company and the
Holding Company, and their respective successors and assigns, all as and to the
extent provided in this Agreement, and no other person shall acquire or have any
right under or by virtue of this Agreement. The term "successors and assigns"
shall not include a purchaser of any of the Series A Notes from the Initial
Purchasers merely because of such purchase.

                                       36
<PAGE>
 
          THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.

           This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.

                                       37
<PAGE>
 
          Please confirm that the foregoing correctly sets forth the agreement
between the Company and the several Initial Purchasers.

                               Very truly yours,

                               Earle M. Jorgensen Company


                               By: /s/ Charles P. Gallopo
                                   -------------------------------
                                   Name:  Charles P. Gallopo
                                   Title: Vice President and Chief
                                          Financial Officer


DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION

BT ALEX. BROWN INCORPORATED


     By: Donaldson, Lufkin & Jenrette
         Securities Corporation


     By: /s/ Scott McLallen
         ---------------------
         Name:  Scott McLallen
         Title: Vice President
<PAGE>
 
                                  SCHEDULE A

<TABLE>
<CAPTION>

                                                         Principal Amount
         Initial Purchaser                                    of Notes
         -----------------                               ----------------

<S>                                                      <C>
Donaldson, Lufkin & Jenrette
           Securities Corporation............              $ 63,000,000
BT Alex. Brown Incorporated..................              $ 42,000,000
                                                           ------------
               Total.........................              $105,000,000
</TABLE>