EXHIBIT 10.1
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RAYOVAC CORPORATION
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$100,000,000
10 1/4% SENIOR SUBORDINATED NOTES DUE 2006
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PURCHASE AGREEMENT
DATED OCTOBER 17, 1996
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Donaldson, Lufkin & Jenrette
Securities Corporation
BA Securities, Inc.
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DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
BA SECURITIES, INC.
As Initial Purchasers
277 Park Avenue
New York, New York 10172
Ladies and Gentlemen:
Rayovac Corporation, a Wisconsin corporation (the "Company"),
proposes to issue and sell an aggregate of $100,000,000 in principal amount of
10 1/4% Senior Subordinated Notes due 2006 (the "Notes") to Donaldson, Lufkin &
Jenrette Securities Corporation and BA Securities, Inc. (each an "Initial
Purchaser" and, collectively, the "Initial Purchasers"). ROV Holding, Inc., a
Delaware corporation and a wholly owned subsidiary of the Company ("ROV
Holding"), proposes to issue and sell to the Initial Purchasers a senior
subordinated guarantee of the Notes (the "Guarantee"). The Notes and the
Guarantee will be issued pursuant to an Indenture dated as of the Closing Date
(as defined herein) among the Company, ROV Holding and Marine Midland Bank, as
trustee (the "Indenture"). Capitalized terms used but not defined herein shall
have the meanings given to such terms in the Indenture.
1. Issuance of Securities. The Notes will be offered and sold
to you pursuant to an exemption from the registration requirements under the
Securities Act of 1933, as amended (the "Act"). The Company has prepared a
preliminary offering memorandum, dated September 30, 1996 (the "Preliminary
Offering Memorandum") and a final offering memorandum, dated October 17, 1996
(the "Offering Memorandum" and together with the Preliminary Offering
Memorandum, the "Offering Documents"), relating to the Company and the Notes.
Reference in this Agreement to the Offering Documents includes documents
incorporated into the Offering Documents by reference.
Upon original issuance thereof, and until such time as the
same is no longer required under the applicable requirements of the Act, the
Notes (and all securities issued in exchange therefor, in substitution thereof
or upon conversion thereof) shall bear the following legend:
THE NOTE (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN
A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND
THE NOTE EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE
EXEMPTION THEREFROM. EACH PURCHASER OF THE NOTE EVIDENCED HEREBY IS
HEREBY NOTIFIED THAT THE
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SELLER MAY BE RELYING ON THE EXEMPTION PROVIDED BY RULE 144A UNDER THE
SECURITIES ACT. THE HOLDER OF THE NOTE EVIDENCED HEREBY AGREES FOR THE
BENEFIT OF RAYOVAC CORPORATION ("THE COMPANY") THAT (A) SUCH NOTE MAY
BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1) (a) TO A PERSON
WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE
UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT OR (d) IN ACCORDANCE
WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO
REQUESTS), (2) TO THE COMPANY OR (3) 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 (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THE NOTE
EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN A(1) ABOVE.
In addition to the above legend, if a global form Note is
issued, it shall bear the legend set forth in Section 2.06(g) of the Indenture.
2. Agreements to Sell and Purchase. On the basis of the
representations and warranties contained in this Agreement, and subject to its
terms and conditions, the Company agrees to issue and sell the Notes to the
Initial Purchasers, and each Initial Purchaser agrees, severally and not
jointly, to purchase from the Company the principal amount of Notes set forth
opposite the name of such Initial Purchaser on Schedule I hereto, at 97.0% of
the principal amount thereof (the "Purchase Price").
3. Terms of Offering. The Initial Purchasers have advised the
Company that they will make offers (the "Exempt Resales") of the Notes purchased
hereunder on the terms set forth in the Offering Memorandum, as amended or
supplemented, solely to (i) persons (each, a "144A Purchaser") whom they
reasonably believe to be "qualified institutional buyers" as defined in Rule
144A under the Act ("QIBs") and (ii) a limited number of other institutional
"accredited investors," as defined in Rule 501(a) (1), (2), (3) and (7) under
the Act, that make certain representations to and agreements with the Company
(each, an "Accredited Institution") (such persons specified in clauses (i) and
(ii) being referred to herein as the "Eligible Purchasers"). The Initial
Purchasers will offer the Notes to Eligible Purchasers initially at a price
equal to 100% of the principal amount thereof.
Such price may be changed at any time without notice.
Holders (including subsequent transferees) of the Notes will
have the registration rights set forth in the registration rights agreement (the
"Registration Rights Agreement"), to be dated as of the Closing Date, in
substantially the form of Exhibit A hereto, for so long as such 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
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"Commission") under the circumstances set forth therein, (i) a registration
statement under the Act (the "Exchange Offer Registration Statement") relating
to the Company's 10 1/4% Senior Subordinated Notes due 2006 (the "New Notes") to
be offered in exchange for the 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") relating to the
resale of the Notes by certain holders thereof, and to use its best efforts to
cause such registration statements to be declared effective. This Agreement, the
Indenture, the Registration Rights Agreement and the Notes (including the
Guarantee) are hereinafter referred to collectively as the "Operative
Documents."
4. Delivery and Payment. Delivery to the Initial Purchasers of
and payment for the Notes shall be made at 9:00 A.M., Eastern Time, on October
22, 1996 (the "Closing Date") at the offices of Skadden, Arps, Slate, Meagher &
Flom, One Beacon Street, Boston, Massachusetts 02108 or such other time or place
as you and the Company shall designate.
One or more Notes in definitive form, registered in the name
of Cede & Co., as nominee of the Depository Trust Company ("DTC"), or in such
other name or names as the Initial Purchasers may request upon at least two
business days' notice to the Company, having an aggregate principal amount
corresponding to the aggregate principal amount of Notes sold pursuant to Exempt
Resales to Eligible Purchasers, shall be delivered by the Company to you against
payment by you of the purchase price thereof by wire transfer of immediately
available funds to the order of the Company. The Notes in definitive form shall
be made available to the Initial Purchasers for inspection not later than 9:30
a.m. Eastern Time on the business day immediately preceding the Closing Date.
5. Agreements of the Company. The Company agrees with you:
(a) To advise you promptly and, if requested by you,
to confirm such advice in writing, (i) of receipt of any notification
with respect to the issuance by any state securities commission of any
stop order suspending the qualification or exemption from qualification
of any of the Notes for offering or sale in any jurisdiction designated
by the Initial Purchasers pursuant to Section 5(e), or the initiation
of any proceeding for such purpose by any state securities commission
or other regulatory authority, and (ii) for a period ending on the
earlier of (x) the completion of Exempt Resales of the Notes by the
Initial Purchasers and (y) 90 days after the Closing Date, if any event
shall occur as a result of which the Offering Memorandum would include
any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(b) To furnish to you, without charge, during the
period set forth in paragraph (c) below, as many copies of the Offering
Documents, and any amendments or supplements thereto, as you may
reasonably request. The Company consents to the use of the Offering
Documents, and any amendments or supplements thereto, by the Initial
Purchasers in connection with Exempt Resales.
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(c) If, after the date hereof and prior to the
earlier of the completion of Exempt Resales of the Notes by the Initial
Purchasers and the date that is 90 days after the Closing Date, any
event shall occur as a result of which in the reasonable judgment of
the Company or your counsel it becomes necessary to amend or supplement
the Offering Memorandum to comply with any law or as a result of which
the Offering Memorandum would include any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, to promptly (i) prepare an appropriate
amendment or supplement to the Offering Memorandum so that the
statements in the Offering Memorandum, as so amended or supplemented,
will comply with all applicable laws and will not, in the light of the
circumstances under which they were made, be misleading, and (ii)
furnish each Initial Purchaser with such number of copies of the
Offering Memorandum, as amended or supplemented, as such Initial
Purchaser may reasonably request.
(d) To make no further amendment or any supplement to
the Offering Memorandum without first having furnished to you a copy of
the proposed form thereof and giving you a reasonable opportunity to
review the same.
(e) To (i) cooperate with the Initial Purchasers and
counsel for the Initial Purchasers in connection with the qualification
of the Notes and the Guarantee for offer and sale by the Initial
Purchasers under the state securities or Blue Sky laws of such
jurisdictions as the Initial Purchasers may request, (ii) continue such
qualification in effect so long as required for Exempt Resales of the
Notes and (iii) file such consents to service of process or other
documents as may be necessary in order to effect such qualification;
provided, however, that the Company shall not be required in connection
therewith to register or qualify as a foreign corporation where it is
not now so qualified or to take any action that would subject it to the
service of process in suits or taxation, other than as to matters and
transactions relating to the Exempt Resales, in any jurisdiction where
it is not now so subject.
(f) During the period of two years following the date
of this Agreement, to deliver to the Initial Purchasers, promptly upon
their becoming available, (i) copies of all annual reports, quarterly
reports and current reports filed with the Commission on Forms 10-K,
10-Q and 8-K, or such other similar forms as may be designated by the
Commission, and (ii) such other documents, reports and information as
shall be furnished by the Company or by ROV Holding to its stockholders
generally.
(g) To use the net proceeds from the sale of the
Notes in the manner specified in the Offering Memorandum (and any
amendments or supplements thereto) under the caption "Use of Proceeds."
(h) Whether or not the transactions contemplated by
this Agreement are consummated or this Agreement becomes effective or
is terminated, to pay all costs, expenses, fees and taxes incident to
and in connection with: (i) the preparation,
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printing, filing and distribution of the Offering Documents (including,
without limitation, financial statements and exhibits) and all
amendments and supplements thereto (but not, however, legal fees and
expenses of your counsel incurred in connection therewith), (ii) the
preparation, printing (including, without limitation, word processing
and duplication costs) and delivery of the Operative Documents and all
Blue Sky Memoranda and all other agreements, memoranda, correspondence
and other documents printed and delivered in connection herewith and
with the Exempt Resales (but not, however, legal fees and expenses of
your counsel incurred in connection with any of the foregoing other
than fees of such counsel plus reasonable disbursements incurred in
connection with the preparation, printing and delivery of such Blue Sky
Memoranda), (iii) the issuance and delivery by the Company of the
Notes, (iv) the qualification of the Notes and the Guarantee for offer
and sale under the securities or Blue Sky laws of the several states
(including, without limitation, the reasonable fees and disbursements
of your counsel relating to such registration or qualification), (v)
furnishing such copies of the Offering Documents (including all
documents incorporated by reference therein), and all amendments and
supplements thereto, as may be reasonably requested for use in
connection with the Exempt Resales, (vi) the preparation of
certificates for the Notes (including, without limitation, printing and
engraving thereof), (vii) the fees, disbursements and expenses of the
Company's counsel and accountants, (viii) all expenses and listing fees
in connection with the application for quotation of the Notes in the
Private Offerings, Resales and Trading through Automatic Linkages
("PORTAL") market of the National Association of Securities Dealers,
Inc., (ix) all fees and expenses (including fees and expenses of
counsel) of the Company in connection with approval of the Notes by DTC
for "book-entry" transfer and (x) the performance by the Company of its
other obligations under this Agreement.
(i) Prior to the Closing Date, to furnish to you as
soon as they have been prepared by the Company, a copy of any
consolidated financial statements of the Company for any period
subsequent to the period covered by the financial statements appearing
in the Offering Memorandum.
(j) Not to distribute prior to the Closing Date any
offering material in connection with the offering and sale of the Notes
other than the Offering Documents or other materials, if any, that the
Initial Purchasers shall have approved for such distribution.
(k) 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 Notes in a
manner that would require the registration under the Act of the sale to
the Initial Purchasers or the Eligible Purchasers of Notes or the
Guarantee.
(l) For so long as any of the Notes remain
outstanding and are "restricted securities" within the meaning of Rule
144(a)(3) under the Act and during any period in which the Company is
not subject to Section 13 or 15(d) of the
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Exchange Act, to make available to any Eligible Purchaser or beneficial
owner of Notes in connection with any sale thereof and any prospective
purchaser of such Notes from such Eligible Purchaser or beneficial
owner, the information required by Rule 144A(d)(4) under the Act.
(m) To comply with all agreements set forth in the
letters of representation from the Company to DTC relating to the
approval of the Notes by DTC for "book-entry" transfer.
(n) To use its reasonable best efforts to effect the
inclusion of the Notes in PORTAL.
6. Representations and Warranties of the Company and ROV
Holding. The Company and ROV Holding represent and warrant to each Initial
Purchaser that:
(a) Each of the Company and ROV Holding is a duly
organized and validly existing corporation in good standing under the
laws of its respective jurisdiction of incorporation, 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,
and is duly qualified as a foreign corporation and is in good standing
in each jurisdiction where the ownership, leasing or operation of
property or the conduct of its business requires such qualification,
except where the failure to be so qualified could not, in the
aggregate, reasonably be expected to have a material adverse effect on
the properties, business, results of operations or condition (financial
or otherwise) of the Company, ROV Holding and their respective
subsidiaries taken as a whole (a "Material Adverse Effect"). Rayovac
Canada, Inc. ("Rayovac Canada") is a duly organized and validly
existing corporation under the laws of Canada with the requisite
corporate power and authority to own, lease and operate its properties
and to conduct its business as currently conducted. Rayovac UK Limited
("Rayovac UK Ltd.") is a duly organized and validly existing
corporation under the laws of the United Kingdom with the requisite
corporate power and authority to own, lease and operate its properties
and to conduct its business as currently conducted. Rayovac Europe
Limited ("Rayovac Europe Ltd.") is a duly organized and validly
existing corporation under the laws of the United Kingdom with the
requisite corporate power and authority to own, lease and operate its
properties and to conduct its business as currently conducted. Rayovac
Far East Limited ("Rayovac Far East Ltd.") is a duly organized and
validly existing corporation under the laws of Hong Kong with the
requisite corporate power and authority to own, lease and operate its
properties and to conduct its business as currently conducted. Rayovac
Europe B.V. ("Rayovac Europe B.V.," and together with ROV Holding,
Rayovac Canada, Rayovac UK Ltd., Rayovac Europe Ltd. and Rayovac Far
East, each, a "Subsidiary" and, collectively, the "Subsidiaries") is a
duly organized and validly existing corporation under the laws of the
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Netherlands with the requisite corporate power and authority to own,
lease and operate its properties and to conduct its business as
currently conducted.
(b) Each of the Company and ROV Holding has all necessary
corporate power and authority to execute and deliver this Agreement,
the Notes, the Guarantee, the Indenture or the Registration Rights
Agreement, as applicable, and to perform its respective obligations
hereunder or thereunder, as applicable, and to authorize, issue, sell
and deliver the Notes and the Guarantee, as applicable, in each case as
contemplated by this Agreement, and to perform its obligations
thereunder, as applicable.
(c) This Agreement has been duly authorized and validly
executed and delivered by the Company and (assuming the due execution
and delivery hereof by the Initial Purchasers) constitutes a valid and
legally binding agreement of the Company, enforceable against the
Company in accordance with its terms subject to: applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and
similar laws affecting creditors' rights and remedies generally and to
general principles of equity (regardless of whether enforcement is
sought in a proceeding at law or in equity) and, as to rights of
indemnification, federal and state securities laws and principles of
public policy.
(d) The Indenture has been duly authorized by the Company and
ROV Holding and, on the Closing Date, will have been duly executed by
the Company and ROV Holding and will conform in all material respects
to the description thereof in the Offering Memorandum. When the
Indenture has been duly executed and delivered (assuming the due
execution and delivery thereof by the Trustee), the Indenture will be a
valid and legally binding agreement of the Company and ROV Holding,
enforceable against the Company and ROV Holding in accordance with its
terms, subject to: applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally and to general principles of
equity (regardless of whether enforcement is sought in a proceeding at
law or in equity).
(e) The Notes have been duly authorized by the Company and, on
the Closing Date, will have been duly executed by the Company and will
conform in all material respects to the description thereof in the
Offering Memorandum. When the Notes are issued, authenticated and
delivered in accordance with the Indenture and paid for in accordance
with the terms of this Agreement, the Notes will constitute valid and
legally binding obligations of the Company, enforceable against the
Company in accordance with their terms and entitled to the benefits of
the Indenture, subject to: applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally and to
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general principles of equity (regardless of whether enforcement is
sought in a proceeding at law or in equity).
(f) The New Notes have been duly authorized by all necessary
corporate action for issuance and sale pursuant to this Agreement and
the Registration Rights Agreement (or will have been so authorized
prior to the issuance of such New Notes) and, when executed,
authenticated, issued and delivered in the manner provided for in the
Indenture in accordance with the Registration Rights Agreement pursuant
to the Exchange Offer, the New Notes will constitute valid and binding
obligations of the Company entitled to the benefits of the Indenture
and enforceable against the Company in accordance with their terms,
subject to: applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other similar laws affecting creditors'
rights and remedies generally and to general principles of equity
(regardless of whether enforceability is considered in a proceeding in
equity or at law).
(g) The Guarantee has been duly authorized by ROV Holding and,
on the Closing Date, will have been duly executed by ROV Holding and
will conform in all material respects to the description thereof in the
Offering Memorandum. When the Guarantee is issued, authenticated and
delivered in accordance with the Indenture and paid for in accordance
with the terms of this Agreement, the Guarantee will constitute a valid
and legally binding obligation of ROV Holding, enforceable against ROV
Holding in accordance with its terms and entitled to the benefits of
the Indenture, subject to: applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally and to general
principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity).
(h) The Registration Rights Agreement has been duly and
validly authorized by the Company and conforms in all material respects
with the description thereof in the Offering Memorandum. The
Registration Rights Agreement (assuming the due execution and delivery
thereof by you) constitutes the valid and legally binding agreement of
the Company enforceable against the Company in accordance with its
terms, subject to: applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally and to general principles of
equity (regardless of whether enforcement is sought in a proceeding at
law or in equity) and, as to rights of indemnification, federal and
state securities laws and principles of public policy and, as to rights
of indemnification, federal and state securities laws and principles of
public policy.
(i) All of the issued and outstanding shares of capital stock
of, or other ownership interests in, each Subsidiary have been duly and
validly authorized and issued, and all of the shares of capital stock
of, or other
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ownership interests in, each Subsidiary are owned, directly or through
other Subsidiaries, by the Company. All such shares of capital stock
are fully paid and nonassessable (to the extent such status is
contemplated by applicable law) and 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.
(j) Neither the Company nor any of the Subsidiaries is (i) in
violation of its respective charter or bylaws (or corresponding
organizational documents) or (ii) 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 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 Company or any of the Subsidiaries is subject, except,
with respect to clause (ii) of this paragraph, where there could not
reasonably be expected to have a Material Adverse Effect.
(k) The execution and delivery of this Agreement, the
Indenture, and the Registration Rights Agreement by the Company, the
issuance and sale of the Notes and the Guarantee, the performance of
this Agreement, the Indenture, and the Registration Rights Agreement
and the consummation of the transactions contemplated by this
Agreement, the Indenture and the Registration Rights Agreement will not
(i) conflict with or result in a breach or violation of any of the
respective charters or bylaws (or corresponding organizational
documents) of the Company or any of the Subsidiaries or any of the
terms or provisions of, or (ii) constitute a default or cause an
acceleration of any obligation under, or result in the imposition or
creation of (or the obligation to create or impose) a Lien with respect
to, any bond, note, debenture or other evidence of indebtedness or any
indenture, mortgage, deed of trust or other agreement or instrument to
which the Company or any of the Subsidiaries is a party or by which it
or any of them is bound, or to which any properties of the Company or
any of the Subsidiaries is or may be subject, or contravene any order
of any court or governmental agency or body having jurisdiction over
the Company or any of the Subsidiaries or any of their properties, or
violate or conflict with any statute, rule or regulation or
administrative or court decree applicable to the Company, any of the
Subsidiaries or any of their respective properties, except, with
respect to clause (ii) of this paragraph, where there could not
reasonably be expected to have a Material Adverse Effect.
(l) There is no action, suit, proceeding or, to the knowledge
of the Company or any of the Subsidiaries, investigation before any
court or before or by any public, regulatory or governmental agency or
body pending or, to the knowledge of the Company or any of the
Subsidiaries, threatened against,
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or involving the properties or business of the Company or any of the
Subsidiaries which could reasonably be expected to have a Material
Adverse Effect.
(m) No action has been taken and no statute, rule or
regulation or order has been enacted, adopted or issued by any
governmental agency or body which prevents the issuance of the Notes or
the Guarantee; no injunction, restraining order or order of any nature
by a federal or state court of competent jurisdiction has been issued
with respect to the Company or any of the Subsidiaries which would
prevent or suspend the issuance or sale of the Notes; no action, suit
or proceeding is pending against or, to the best of the knowledge of
the Company, threatened against or affecting the Company or any of the
Subsidiaries before any court or arbitrator or any governmental body,
agency or official, domestic or foreign, which, if adversely
determined, could reasonably be expected to materially interfere with
or adversely affect the issuance of the Notes or the Guarantee or in
any manner draw into question the validity of this Agreement, the
Indenture, the Notes, the Guarantee, the Registration Rights Agreement,
or the transactions contemplated hereby or thereby.
(n) Except as set forth in the Offering Documents, neither the
Company nor any of the Subsidiaries has violated any environmental
safety or similar law or regulation applicable to (i) its business
relating to the protection of human health and safety, (ii) the
environment or (iii) hazardous or toxic substances or wastes,
pollutants or contaminants ("Environmental Laws"), lacks any permits,
licenses or other approvals required of them under applicable
Environmental Laws to own, lease and operate their respective
properties and to conduct their business in the manner described in the
Offering Memorandum, is violating any terms and conditions of any such
permit, license or approval or has permitted to occur any event that
allows, or after notice or lapse of time would allow, revocation,
termination of any such permit, license or approval or results in any
other impairment of their rights thereunder, which in each case could
reasonably be expected to result, in the aggregate, in a Material
Adverse Effect. Neither 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, as amended ("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
could reasonably be expected to result, in the aggregate, in a Material
Adverse Effect. There is (i) no significant unfair labor practice
complaint 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
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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 the
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 reasonably be expected to have a Material
Adverse Effect.
(o) Except as could not reasonably be expected to result, in
the aggregate, in a Material Adverse Effect, the Company and each of
the Subsidiaries has good title, free and clear of all Liens (except
Liens for taxes not yet due and payable), to all property and assets
reflected as owned by it in the combined consolidated financial
statements of the Company at and for the fiscal year ended June 30,
1996.
(p) The accountants that have certified or shall certify the
applicable consolidated financial statements and supporting schedules
of the Company included in the Offering Memorandum, are, to the
knowledge of the Company, independent accountants. The consolidated
historical and unaudited pro forma condensed consolidated financial
statements, together with related schedules and notes, fairly present
the consolidated financial position of the Company and the Subsidiaries
at the respective dates indicated and the results of their operations
and their cash flows for the respective periods indicated, in
accordance with generally accepted accounting principles consistently
applied throughout such periods. Such pro forma financial statements
have been prepared on a basis consistent with such historical
statements, except for the pro forma adjustments specified therein, and
give effect to assumptions made on a reasonable basis and present
fairly the historical and proposed transactions contemplated by this
Agreement, the Offering Memorandum, the Indenture and the Registration
Rights Agreement. The other financial and statistical information and
data included in the Offering Memorandum, historical and pro forma,
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 and the Subsidiaries.
(q) Subsequent to the respective dates as of which information
is given in the Offering Memorandum and up to the Closing Date, neither
the Company nor any of the Subsidiaries has incurred any liabilities or
obligations, direct or contingent, which are material to the Company
and the Subsidiaries taken as a whole, nor entered into any material
transaction not in the ordinary course of business and there has not
been, in the aggregate, any material adverse change, or any development
which may reasonably be expected to
11
involve a material adverse change, in the properties, business, results
of operations or condition (financial or otherwise) of the Company and
the Subsidiaries taken as a whole (a "Material Adverse Change").
(r) All tax returns required to be filed by the Company or any
of the Subsidiaries in any jurisdiction have been filed, other than
those filings being contested in good faith, and all material taxes,
including withholding taxes, penalties and interest, assessments, fees
and other charges due or claimed to be due from such entities have been
paid, other than those being contested in good faith and for which
adequate reserves have been provided or those currently payable without
penalty or interest.
(s) No authorization, approval, consent or license of any
government, governmental instrumentality or court, domestic or foreign
(other than the securities or blue sky laws of the various states and
foreign jurisdictions, an effectiveness order of the Commission with
respect to the Exchange Offer Registration Statement and Shelf
Registration Statement and qualification of the Indenture under the
Trust Indenture Act of 1939, as amended, is required for the valid
issuance, sale and delivery of the Notes and the Guarantee, or for the
execution, delivery or performance of this Agreement, the Indenture or
the Registration Rights Agreement by the Company, except as disclosed
in the Offering Memorandum and except as such as may have been (or will
on the Closing Date be) obtained and are (or will on the Closing Date
be) in full force and effect and except where the failure to obtain
such authorization, approval, consent or license could not reasonably,
individually or in the aggregate, be expected to have a Material
Adverse Effect.
(t) (i) The Company and each of the Subsidiaries has all
certificates, consents, exemptions, orders, permits, licenses,
authorizations, or other approvals (each, an "Authorization") of and
from, and has made all declarations and filings with, all federal,
state, local and other governmental authorities, all self-regulatory
organizations and all courts and other tribunals, necessary or required
to own, lease, license and use its properties and assets and to conduct
its business in the manner described in the Offering Memorandum, except
to the extent that the failure to obtain or file would not, singly or
in the aggregate, have a Material Adverse Effect, (ii) all such
Authorizations are valid and in full force and effect and (iii) the
Company and the Subsidiaries are in compliance in all material respects
with the terms and conditions of all such Authorizations and with the
rules and regulations of the regulatory authorities and governing
bodies having jurisdiction with respect thereto.
(u) Except as set forth or referred to in the Offering
Memorandum and except as would not have a Material Adverse Effect, the
Company and the Subsidiaries possess all patents, patent rights,
licenses, inventions, copyrights,
12
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks and trade names (collectively,
"Intellectual Property") presently employed by them in connection with
the businesses now operated by them, and neither the Company nor any of
the Subsidiaries has received any notice of infringement of or conflict
with asserted rights of others with respect to the foregoing. Except as
set forth in the Offering Memorandum, the use of such Intellectual
Property in connection with the business and operations of the Company
as currently conducted and the Subsidiaries does not, to the knowledge
of the Company, infringe the rights of any person.
(v) 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.
(w) The Company and each Subsidiary maintains insurance
covering its 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
the 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.
(x) Neither the Company nor any Subsidiary (i) is "insolvent"
as that term is defined in Section 101(32) of the United States
Bankruptcy Code (the "Bankruptcy Code") (11 U.S.C. ss. 101 (32)),
Section 2 of the Uniform Fraudulent Transfer Act ("UFTA") or Section 2
of the Uniform Fraudulent Conveyance Act ("UFCA"), (ii) has
"unreasonably small capital" as that term is used in Section
548(a)(2)(ii) of the Bankruptcy Code or Section 5 of the UFCA, (iii) is
engaged or about to engage in a business or transaction for which its
remaining assets are "unreasonably small" in relation to the business
or transaction as that term is used in Section 4 of the UFTA or (iv)
intends or believes that it will be unable to pay its debts as they
mature or become due, within the meaning of Section 548(a)(2)(B)(iii)
of the Bankruptcy Code, Section 4 of the UFTA and Section 6 of the
UFCA. Neither the Company nor any Subsidiary shall be rendered
insolvent (as defined above) by the execution
13
and delivery of this Agreement or by consummation of the transactions
contemplated hereunder.
(y) The Offering Documents have been prepared in connection
with the Exempt Resales. The Preliminary Offering Memorandum as of its
date did not, and the Offering Memorandum as of its date does not and
as of the Closing Date will not, and any amendment or supplement
thereto will not, contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the
statements therein not misleading, except that the representations and
warranties contained in this paragraph 6(y) shall not apply to
statements or omissions in the Offering Documents (or any amendment or
supplement thereto) based upon information furnished to the Company in
writing by the Initial Purchasers expressly for use therein. No stop
order preventing the use of the any of the Offering Documents, 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, have been issued.
(z) None of the Subsidiaries of the Company is a "significant
subsidiary" as defined in Rule 1-02(w)(3) of Regulation S-X promulgated
under the Act.
(aa) The Company had, as of the date indicated, debt including
current maturities and shareholders' equity as set forth in the
Offering Memorandum under the caption "Capitalization."
(ab) Neither the Company nor any of the Subsidiaries has
distributed and, prior to the Closing Date, will distribute any
offering material in connection with the offering and sale of the Notes
other than any of the Offering Documents or other materials, if any,
that the Initial Purchasers have approved for such distribution;
provided, however, that it is understood that the Company makes no
representation or warranty herein with respect to any distribution of
materials by the Initial Purchasers.
(ac) The Company is not now, and after sale of the Notes to be
sold by it hereunder and application of the net proceeds from such sale
as described in the Offering Documents under the caption "Use of
Proceeds" will not be, or will not be "controlled" by, an "investment
company" as such terms are defined in the Investment Company Act of
1940, as amended.
(ad) Neither the Company nor any of the Subsidiaries is a
"holding company", or a "subsidiary company" of a "holding company", or
an "affiliate" of a "holding company" or of a "subsidiary company" or a
"holding company", as such terms are defined in the Public Utilities
Holding Company Act of 1935, as amended, or is a "public utility", as
such term is defined in the Federal Power Act, as amended.
(ae) Assuming (i) that each of the Eligible Purchasers is a
QIB or an Accredited Institution, (ii) the accuracy of the
representations, warranties and covenants of the Initial Purchasers in
Section 7 hereof, (iii) the accuracy of the
14
representations made by each Accredited Institution who purchases the
Notes and the Guarantee pursuant to an Exempt Resale (as set forth in
the letters of representation executed by such Accredited Institutions
in the form of Annex A to the Offering Memorandum), (iv) the compliance
by the Initial Purchasers with the offering and transfer procedures and
restrictions described in the Offering Memorandum and any other
requirements of law applicable to the Initial Purchasers that are
necessary for exemption of the offering and sale of the Notes and the
Guarantee from the registration requirements of the Act and (v) that
Eligible Purchasers to whom the Initial Purchasers initially resell the
Notes and the Guarantee receive a copy of the Offering Memorandum prior
to such sale, no registration of the Notes or the Guarantee under the
Act and no qualification of the Indenture under the Trust Indenture Act
of 1939, as amended, is required for the sale of the Notes or the
Guarantee to the Initial Purchasers as contemplated by this agreement
or for the Exempt Resales. No form of general solicitation or general
advertising was used by the Company or any of its representatives
(other than the Initial Purchasers, as to whom the Company makes no
representation) in connection with the offer and sale of the Notes,
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 Notes have been
issued and sold by the Company within the six-month period immediately
prior to the date hereof.
(af) The execution and delivery of the Operative Documents and
the sale of the Notes to be purchased by the Eligible Purchasers will
not involve any non-exempt prohibited transaction within the meaning of
Section 406 of ERISA or Section 4975 of the Internal Revenue Code of
1986, as amended. The representation made by the Company in the
preceding sentence is made in reliance upon and subject to the accuracy
of, and compliance with, the representations and covenants made or
deemed made by the Eligible Purchasers as set forth in the Offering
Memorandum under the Section entitled "Notice to Investors."
(ag) No securities of the Company or any of its Subsidiaries
are of the same class (within the meaning of Rule 144A under the Act)
as the Notes and listed on a national securities exchange registered
under Section 6 of the Exchange Act, or quoted in a U.S. automated
inter-dealer quotation system.
Any certificate signed by any officer of the Company pursuant
to this Agreement and delivered to the Initial Purchasers or to counsel for the
Initial Purchasers shall be deemed a representation and warranty by the Company
to the Initial Purchasers as to the matters covered thereby.
7. Representations, Warranties and Certain Agreements of the
Initial Purchasers.
15
(a) Each Initial Purchaser, severally and not
jointly, represents, warrants to and agrees with the Company as
follows:
(1) Each Initial Purchaser represents and
warrants with respect to itself that such Initial Purchaser is
either a QIB or an Accredited Institution, in either case with
such knowledge and experience in financial and business
matters as are necessary in order to evaluate the merits and
risks of an investment in the Notes.
(2) Except as set forth in the Offering
Memorandum, such Initial Purchaser (i) is not acquiring the
Notes with a view to any distribution thereof or with any
present intention of offering or selling any of the 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, (ii) will be reoffering and reselling the Notes
only (A) to QIBs in reliance on the exemption from the
registration requirements of the Act provided by Rule 144A and
(B) to a limited number of Accredited Institutions that
execute and deliver a letter containing certain
representations and agreements in the form attached as Annex A
to the Offering Memorandum and (iii) has not solicited and
will not solicit any offer to buy or offer to sell the Notes
by means of any form of general solicitation or general
advertising (as such terms are defined in Regulation D under
the Act) or in any manner involving a public offering within
the meaning of the Act.
(3) Each Initial Purchaser also understands
that the Company and, for purposes of the opinions to be
delivered to the Initial Purchasers pursuant to Sections 9(e)
and (f) hereof, counsel to the Company and counsel to the
Initial Purchasers will rely upon the accuracy and truth of
the foregoing representations and agreements and the Initial
Purchasers hereby consent to such reliance.
(b) Each Initial Purchaser agrees that it will
solicit offers to buy the Notes only from, and will offer to sell the
Notes only to, Eligible Purchasers. Each Initial Purchaser further
agrees that it will offer to sell the Notes only to, and will solicit
offers to buy the Notes only from, persons who in purchasing such Notes
will be deemed to have represented and agreed (1) if such Eligible
Purchaser is a QIB, that they are purchasing the Notes for their own
account or an account with respect to which they exercise sole
investment discretion and that they or such accounts are QIBs, (2) that
such Notes will not have been registered under the Act and may be
offered, resold, pledged or otherwise transferred only (A)(i) inside
the United States to a person who the seller reasonably believes is a
"qualified institutional buyer" within the meaning of Rule 144A under
the Act in a transaction meeting the requirements of Rule 144A, (ii) in
a transaction meeting the requirements of Rule 144 under the Act, (iii)
outside the United States to a foreign person in a transaction meeting
the requirements of Rule 904 under the Act or (iv) in accordance with
another exemption from the registration requirements of the Act (and
based upon an
16
opinion of counsel if the Company so requests), (B) to the Company or
(C) pursuant to an effective registration statement under the Act, in
each case, in accordance with any applicable securities laws of any
State of the United States or any other applicable jurisdiction, and
(3) that the holder will, and each subsequent holder is required to,
notify any purchaser from it of the security evidenced thereby of the
resale restrictions set forth in (2) above.
(c) Prior to any sale of Notes to an Eligible
Purchaser, the Initial Purchasers shall have provided such Eligible
Purchaser with a copy of the Offering Memorandum.
(d) On the Closing Date, the Initial Purchasers will
provide the Company with a certificate stating that they solicited
offers from and offered and sold the Notes only to persons they
reasonably believed to be Eligible Purchasers.
(e) The Initial Purchasers will give prompt notice in
writing by telecopy to the Company and its counsel when the Exempt
Resales are completed.
8. Indemnification.
(a) The Company agrees to indemnify and hold harmless
(i) each Initial Purchaser, (ii) each person, if any, who controls
(within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act) any Initial Purchaser (any of the persons referred to in
this clause (ii) being hereinafter referred to as a "controlling
person"), and (iii) the officers, directors, partners, employees,
representatives and agents of each Initial Purchaser or any controlling
person (any person referred to in clause (i), (ii) or (iii) may
hereinafter be referred to as an "Indemnified Person") to the fullest
extent lawful, from and against any and all losses, claims, damages,
liabilities, judgments, actions and expenses (including without
limitation and as incurred (following the submission of an itemized
invoice therefor), reimbursement of all reasonable costs of
investigating, preparing, pursuing or defending any claim or action, or
any investigation or proceeding by any governmental agency or body,
commenced or threatened, including the reasonable documented fees and
expenses of counsel to any Indemnified Person directly or indirectly
caused by, related to, based upon, arising out of or in connection with
any untrue statement or alleged untrue statement of a material fact
contained in the Offering Memorandum (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), or
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 (collectively, "Damages") , except (A) insofar
as such losses, claims, damages, liabilities or judgments are caused by
an untrue statement or omission or alleged untrue statement or omission
that is made in reliance upon and in conformity with information
relating to any Initial Purchaser furnished in writing to the Company
by any Initial Purchaser expressly for use in the Offering Documents
(or any amendment or supplement thereto) and (B) insofar as such
losses, claims, damages, liabilities or expenses are caused by an
untrue statement
17
or omission or alleged untrue statement or omission that was contained
or made in the Preliminary Offering Memorandum and corrected in the
Offering Memorandum and (1) any such losses, claims, damages,
liabilities or expenses suffered or incurred by any Indemnified Person
resulted from an action, claim, or suit by any person who purchased the
Notes from any Initial Purchaser in an Exempt Resale, (2) the Initial
Purchasers failed to deliver or provide a copy of the Preliminary
Offering Memorandum or Offering Memorandum to such person at or prior
to the confirmation of the sale of the Notes and (3) the Preliminary
Offering Memorandum or the Offering Memorandum, as the case may be, (as
so amended or supplemented) would have cured the defect giving rise to
such losses, claims, damages, liabilities or expenses. The Company
shall notify you promptly of the institution, threat or assertion of
any claim, proceeding (including any governmental investigation) or
litigation in connection with the matters addressed by this Agreement
which involves the Company or an Indemnified Person.
(b) In case any action or proceeding (including any
governmental investigation) shall be brought or asserted against any of
the Indemnified Persons with respect to which indemnity may be sought
against the Company, such Initial Purchaser (or the Initial Purchaser
controlled by such controlling person) shall promptly notify the
Company in writing (provided, that the failure to give such notice
shall not relieve the Company of its obligations pursuant to this
Agreement) and the Company shall assume the defense thereof, including
the employment of counsel reasonably satisfactory to such Indemnified
Person and payment of all fees and expenses. Any Indemnified Person
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 such Indemnified Person unless (i)
the employment of such counsel shall have been specifically authorized
in writing by the Company, (ii) the Company shall have failed to assume
the defense and employ counsel or (iii) such Indemnified Person
reasonably concludes based on the advice of counsel that (A) there may
be one or more legal defenses available to it which are different from
or additional to those available to the Company, the assertion of which
would be adverse to the interests of the Company or any other
Indemnified Person, or (B) a conflict of interest exists between the
Indemnified Person and the Company (in either such case the Company
shall not have the right to assume or to continue the defense of such
action on behalf of such Indemnified Person), it being understood,
however, that the Company shall not, in connection with any one such
action or separate but substantially similar or related actions in the
same jurisdiction arising out of the same general allegations or
circumstances, be liable for the fees and expenses of more than one
separate firm of attorneys (in addition to any local counsel) for all
such Indemnified Persons, which firm shall be designated in writing by
the Initial Purchasers. The Company shall be liable for any settlement
of any such action or proceeding effected with its prior written
consent, which consent will not be unreasonably withheld, and the
Company agrees to indemnify and hold harmless any Indemnified Person
from and
18
against any loss, claim, damage, liability or expense by reason of any
settlement of any action effected with the written consent of the
Company. Notwithstanding the foregoing sentence, if at any time an
Indemnified Person shall have requested the Company to reimburse the
Indemnified Person for fees and expenses of counsel as contemplated by
the second sentence of this paragraph, the Company agrees that it shall
be liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than 30
business days after receipt by the Company of the aforesaid request and
(ii) the Company shall not have reimbursed the Indemnified Person in
accordance with such request prior to the date of such settlement. The
Company shall not, without the prior written consent of each
Indemnified Person, settle or compromise or consent to the entry of
judgment in or otherwise seek to terminate any pending or threatened
action, claim, litigation or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not
any Indemnified Person is a party thereto), unless such settlement,
compromise, consent or termination includes an unconditional release of
each Indemnified Person from all liability arising out of such action,
claim, litigation or proceeding.
(c) Each Initial Purchaser agrees, jointly but not
severally, to indemnify and hold harmless the Company, any person
controlling (within the meaning of Section 15 of the Act or Section 20
of the Exchange Act) the Company and the officers, directors, partners,
employees, representatives and agents of the Company or any such
person, to the same extent and subject to the same procedures as the
foregoing indemnity from the Company to each of the Indemnified
Persons, but only with respect to Damages based on information relating
to such Initial Purchaser furnished in writing by such Initial
Purchaser expressly for use in the Offering Documents.
(d) If the indemnification provided for in this
Section 8 is unavailable to an Indemnified Person under Section 8(a) or
(c) in respect of any losses, claims, damages, liabilities or expenses
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 expenses (i) in such proportion as is
appropriate to reflect the relative benefits received by the
indemnifying party on the one hand and the indemnified party on the
other hand from the offering of the Notes or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of
the indemnifying parties and the indemnified party, 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
proceeds from the offering (net of discounts and commissions but before
deducting expenses) received by the Company bear to the total discounts
and commissions received by such
19
Initial Purchaser, in each case as set forth in the table on the cover
page of the Offering Memorandum. The relative fault of the Company and
the Initial Purchasers 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
related to information supplied by the Company or the Initial
Purchasers and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The indemnity and contribution obligations of the Company set
forth herein shall be in addition to any liability or obligation the
Company may otherwise have to any Indemnified Person.
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 or by any other
method of allocation which does not take account of the equitable
considerations 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 expenses 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 such claim or action, or any investigation or proceeding
by any governmental agency or body, commenced or threatened including
the reasonably documented fees and expenses of counsel to such party.
Notwithstanding the provisions of this Section 8, the Initial
Purchasers (and their related Indemnified Persons) shall not be
required to contribute, in the aggregate, any amount in excess of the
amount by which the total discount applicable to the Notes purchased by
such Initial Purchasers exceeds the amount of any damages which such
Initial Purchasers have otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent
misrepresentation.
9. Conditions of Initial Purchasers' Obligations. The several
obligations of the Initial Purchasers to purchase the 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 on the
Closing Date with the same force and effect as if made on and as of the
Closing Date.
(b) (i) The Offering Memorandum shall have been
printed and copies distributed to the Initial Purchasers not later
than 10:30 a.m. Eastern time, on October 21, 1996, or at such later
date and time as the Initial Purchasers may approve;
20
(ii) no injunction, restraining order or
order of any nature by a federal or state court of competent
jurisdiction shall have been issued as of the Closing Date
which would prevent the issuance of the Notes or the
Guarantee; and
(iii) at the Closing Date, no stop order
preventing the use of the Offering Documents, or any amendment
or supplement thereto, or suspending the qualification or
exemption from qualification of the Notes for sale in any
jurisdiction designated by the Initial Purchasers pursuant to
Section 5(e) hereof shall have been issued and no proceedings
for that purpose shall have been commenced or shall be pending
or, to the knowledge of the Company, be contemplated.
(c) Subsequent to the execution and delivery of this
Agreement and prior to the Closing Date, there shall not have been any
downgrading, nor shall any notice have been given to the Company of any
intended or potential downgrading or of any review for a possible
change that does not indicate the direction of the possible change, in
the rating accorded any of the Company's securities by any "nationally
recognized statistical rating organization," as such term is defined
for purposes of Rule 436(g)(2) under the Act.
(d) (i) Since the date of the latest balance sheet
included in the Offering Documents, there shall not have been any
material adverse change, in the condition, financial or otherwise, or
in the earnings, whether or not arising in the ordinary course of
business, of the Company and the Subsidiaries, taken as a whole, from
that set forth in the Offering Documents, (ii) since the date of the
latest balance sheet included in the Offering Documents, there shall
not have been any material adverse change in the capital stock or in
the long-term debt of the Company from that set forth in the Offering
Documents, (iii) the Company and the Subsidiaries shall have no
liability or obligation, direct or contingent, which is material to the
Company and the Subsidiaries, taken as a whole, other than those
reflected in the Offering Documents or incurred in the ordinary course
of business and (iv) on the Closing Date you shall have received a
certificate from each of the Company and ROV Holding dated the Closing
Date, signed by a senior officer of the Company or ROV Holding, as
applicable, in his or her capacity as such senior officer, confirming
the matters set forth in paragraphs (a), (b)(ii), (b)(iii), (c) and (d)
of this Section 9.
(e) You shall have received on the Closing Date
opinions (satisfactory to you and counsel for the Initial Purchasers),
dated the Closing Date, (A) of James A. Broderick, Vice President and
General Counsel of the Company, substantially in the form of Exhibit A
attached hereto, (B) of Skadden, Arps, Slate, Meagher & Flom, Boston,
Massachusetts, special counsel for the Company, substantially in the
form of Exhibit B attached hereto and (C) of Whyte, Hirshboeck & Dudek
S.C., special counsel for the Company, substantially in the form of
Exhibit C attached hereto.
21
In rendering such opinion, such counsel may rely (i) as to
matters involving the application of laws other than the laws of the
United States and jurisdictions in which they are admitted, to the
extent such counsel deems proper and to the extent specified in such
opinion, if at all, upon an opinion or opinions (in form and substance
reasonably satisfactory to the Initial Purchasers' counsel) of other
counsel reasonably acceptable to the Initial Purchasers' counsel,
familiar with the applicable laws; (ii) as to matters of fact, to the
extent such counsel deems proper, on certificates of responsible
officers of the Company, certificates of public officials and
certificates or other written statements of officers of departments of
various jurisdictions having custody of documents respecting the
existence or good standing of the Company and the Subsidiaries,
provided that copies of any such written statements or certificates
shall be delivered to the Initial Purchasers' counsel.
The opinion of Skadden, Arps, Slate, Meagher & Flom described
in paragraph (e)(B) above shall be rendered to the Initial Purchasers
at the request of the Company and shall so state therein and may state
that such opinion is limited to matters of federal and New York law and
the General Corporation Law of the State of Delaware.
(f) You shall have received on the Closing Date an
opinion, dated the Closing Date, of Latham & Watkins, counsel for the
Initial Purchasers, as to matters set forth in paragraphs 2 through 6,
that part of paragraph 10 relating to the description of the Indenture
contained under the caption "Description of the Notes" in the Offering
Memorandum, paragraph 13 and the paragraph immediately following
paragraph 13 of Exhibit B attached hereto. In giving such opinion, such
counsel may state that their opinion and belief are based upon their
participation in the preparation of the Offering Documents and any
amendments or supplements thereto and review and discussion of the
contents thereof, but are without independent check or verification
except as specified.
(g) You shall have received a letter on and as of the
Closing Date, in form and substance satisfactory to you, from Coopers &
Lybrand L.L.P., independent public accountants for the Company, with
respect to the financial statements and certain financial information
contained in the Offering Memorandum and substantially in the form and
substance of the letter delivered to you by Coopers & Lybrand L.L.P. on
the date of this Agreement, provided that the letter delivered on the
Closing Date shall state that Coopers & Lybrand L.L.P. has read the
unaudited combined consolidated balance sheet of the Company and the
related combined consolidated statement of income for the month and
three months ended September 30, 1996 and 1995.
(h) 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
at or prior to the Closing Date.
22
(i) You shall have received on the Closing Date a
certificate, dated the Closing Date, signed by a senior officer of the
Company, in his or her capacity as such senior officer, in form and
substance reasonably satisfactory to you and your counsel, with respect
to the solvency of the Company.
10. Effective Date of Agreement and Termination. This Agreement
shall become effective at the time that the Company and the Initial Purchasers
execute this Agreement.
This Agreement may be terminated at any time prior to the
Closing Date by you by written notice to the Company if any of the following has
occurred: (i) since the respective dates as of which information is given in the
Offering Memorandum, any material adverse change or development involving a
prospective material adverse change in the condition, financial or otherwise, of
the Company and the Subsidiaries or the earnings of the Company and the
Subsidiaries taken as a whole, whether or not arising in the ordinary course of
business, which would, in your judgment, make it impracticable to market the
Notes on the terms and in the manner contemplated in the Offering Memorandum,
(ii) 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 your judgment, is
material and adverse and would, in your judgment, make it impracticable to
market the Notes on the terms and in the manner contemplated in the Offering
Memorandum, (iii) the suspension or material limitation of trading in securities
on the New York Stock Exchange, the American Stock Exchange or the Nasdaq
National Market or limitation on prices for securities on any such exchange,
(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 or operations of the Company and
the Subsidiaries 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 or state government or agency in respect of its monetary or
fiscal affairs which in your reasonable opinion has a material adverse effect on
the financial markets in the United States.
If on the Closing Date any one or more of the Initial
Purchasers shall fail or refuse to purchase the Notes which it has or they have
agreed to purchase hereunder on such date and the aggregate principal amount of
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 Notes to be purchased on such date by all the
Initial Purchasers, each non-defaulting Initial Purchaser shall be obligated
severally, in the proportion which the aggregate principal amount of Notes set
forth opposite its name in Schedule I bears to the aggregate principal amount of
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 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 amount of 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 amount of Notes without
the written consent of such Initial
23
Purchaser. If on the Closing Date any Initial Purchaser shall fail or refuse to
purchase Notes and the aggregate principal amount of Notes with respect to which
such default occurs is more than one-tenth of the aggregate principal amount of
Notes to be purchased on such date by the Initial Purchasers and arrangements
satisfactory to you and the Company for purchase of such 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 non-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: (a) if to the Company, to Rayovac
Corporation, 601 Rayovac Drive, Madison, Wisconsin 53711-2497, Attention: James
A. Broderick, with a copy to Skadden, Arps, Slate, Meagher & Flom, One Beacon
Street, 31st Floor, Boston, Massachusetts 02108, Attention: Louis A. Goodman,
and (b) if to any Initial Purchaser or to you, to you c/o Donaldson, Lufkin &
Jenrette Securities Corporation, 277 Park Avenue, New York, New York 10172,
Attention: Syndicate Department, with a copy to Latham & Watkins, Sears Tower,
Suite 5800, 233 South Wacker Drive, Chicago, Illinois 60606, Attention: Mark A.
Stegemoeller, or 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, its officers
and directors and of the several 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 Notes, regardless of (i) any
investigation, or statement as to the results thereof, made by or on behalf of
any Initial Purchaser or by or on behalf of the Company, the officers or
directors of the Company or any controlling person of the Company, (ii)
acceptance of the Notes and payment for them hereunder and (iii) termination of
this Agreement.
If this Agreement shall be terminated by the Initial
Purchasers because of any failure or refusal on the part of the Company to
comply with the terms or to fulfill any of the conditions of this Agreement, the
Company agrees to reimburse the several Initial Purchasers for all out-of-pocket
expenses (including the reasonable fees and disbursements of counsel) reasonably
incurred by them.
Except as otherwise provided, this Agreement has been and is
made solely for the benefit of and shall be binding upon the Company, the
Initial Purchasers, any controlling persons referred to herein 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 Notes from any of the several Initial Purchasers merely
because of such purchase.
24
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.
25
Please confirm that the foregoing correctly sets forth the
agreement between the Company, ROV Holding and the several Initial Purchasers.
Very truly yours,
RAYOVAC CORPORATION
By /s/ James A. Broderick
--------------------------------
Name: James A. Broderick
Title: Vice President
ROV HOLDING, INC.
By /s/ Roger F. Warren
--------------------------------
Name: Roger F. Warren
Title: President
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
BA SECURITIES, INC.
By DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By /s/ Glenn Tongue
--------------------------------
Name: Glenn Tongue
Title Managing Director
S-1
SCHEDULE I
Initial Purchasers Amount
- - ------------------ --------
Donaldson, Lufkin & Jenrette $75,000,000
Securities Corporation
BA Securities, Inc. $25,000,000
Total $100,000,000
i