- --------------------------------------------------------------------------------
SECURITIES PURCHASE AGREEMENT
by and among
UNITED INDUSTRIES CORPORATION
and
THE INITIAL PURCHASERS NAMED HEREIN
- --------------------------------------------------------------------------------
Dated as of March 19, 1999
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.1. Definitions....................................1
Section 1.2. Accounting Terms; Financial
Statements...................................4
ARTICLE II
ISSUE OF NOTES; PURCHASE AND SALE OF
NOTES; RIGHTS OF HOLDERS OF NOTES; OFFERING
BY INITIAL PURCHASERS
Section 2.1. Issue of Notes.................................5
Section 2.2. Purchase, Sale and Delivery of
Notes........................................5
Section 2.3. Registration Rights of Holders of
Notes........................................6
Section 2.4. Offering by the Initial Purchasers.............6
ARTICLE III
REPRESENTATIONS AND WARRANTIES; RESALE OF NOTES
Section 3.1. Representations and Warranties of
the Company..................................6
Section 3.2. Resale of Notes...............................20
ARTICLE IV
CONDITIONS PRECEDENT TO CLOSING
Section 4.1. Conditions Precedent to Obligations
of the Initial Purchasers...................21
Section 4.2. Conditions Precedent to Obligations
of the Company..............................22
ARTICLE V
COVENANTS
Section 5.1. Covenants of the Company......................23
ARTICLE VI
FEES
Section 6.1. Costs, Expenses and Taxes.....................25
ARTICLE VII
INDEMNITY
Section 7.1. Indemnity.....................................26
Section 7.2. Contribution..................................29
Section 7.3. Registration Rights Agreement.................30
ARTICLE VIII
MISCELLANEOUS
Section 8.1. Survival of Provisions........................31
Section 8.2. Termination...................................31
Section 8.3. No Waiver; Modifications in Writing...........32
Section 8.4. Information Supplied by the Initial
Purchasers..................................33
Section 8.5. Communications................................33
Section 8.6. Execution in Counterparts.....................33
Section 8.7. Successors....................................33
Section 8.8. Governing Law.................................34
Section 8.9. Severability of Provisions....................34
Section 8.10. Headings......................................34
SIGNATURE PAGE ............................................37
SCHEDULE I
Exhibit A
-6-
SECURITIES PURCHASE AGREEMENT, dated as of March 19, 1999 (the
"Agreement"), among UNITED INDUSTRIES CORPORATION, a Delaware corporation (the
"Company"), and CIBC OPPENHEIMER CORP. ("CIBC") and NATIONSBANC MONTGOMERY
SECURITIES LLC ("NationsBanc") (the "Initial Purchasers").
In consideration of the mutual covenants and agreements set forth
herein and for good and valuable consideration, the receipt of which is hereby
acknowledged, the parties agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1. Definitions. As used in this
Agreement, and unless the context requires a different
meaning, the following terms have the meanings indicated:
"Act" means the Securities Act of 1933, as amended, and the rules and
regulations of the Commission thereunder.
"Affiliate" of any specified Person means any other Person which
directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with such specified Person. For
purposes of this definition, "control" (including, with correlative meanings,
the terms "controlling", "controlled by" and "under common control with"), as
used with respect to any Person, means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities, by agreement or
otherwise.
"Agreement" means this Agreement, as the same may be amended,
supplemented or modified in accordance with the terms hereof and in effect.
"Basic Documents" means, collectively, the
Indenture, the Notes, the Registration Rights Agreement and
this Agreement.
"Capital Stock" means, with respect to any Person, any and all shares
or other equivalents (however designated) of capital stock, partnership
interests or any other participation, right or other interest in the nature of
an equity interest in such Person or any option, warrant or other security
convertible into or exercisable for any of the foregoing.
"Closing" has the meaning provided therefor in
Section 2.2 of this Agreement.
"Code" means the Internal Revenue Code of 1986, as
amended.
"Commission" means the Securities and Exchange Commission or any
similar agency then having jurisdiction to enforce the Act.
"Commonly Controlled Entity" has the meaning
provided therefor in Section 3.1(aa) of this Agreement.
"Company Delivered Documents" has the meaning
provided therefor in Section 3.1(e) of this Agreement.
"Default" means any event, act or condition which, with notice or
lapse of time or both, would constitute an Event of Default.
"Employee Benefit Plan" has the meaning provided
therefor in Section 3.1(aa) of this Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, together with all rules and regulations promulgated
pursuant thereto, as amended from time to time.
"Event of Default" means any event defined as an
Event of Default in the Indenture.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission thereunder.
"Exchange Notes" shall have the meaning provided therefor in the
Registration Rights Agreement.
"Final Memorandum" has the meaning provided thereof
in Section 2.1 of this Agreement.
"Indemnified Party" has the meaning provided
therefor in Section 7.1(c) of this Agreement.
"Indemnifying Party" has the meaning provided
therefor in Section 7.1(c) of this Agreement.
"Indenture" means the indenture between the Company and State Street
Bank and Trust Company, as Trustee, under which the Notes will be issued.
"Initial Purchasers" has the meaning set forth in
the introductory paragraph to this Agreement.
"Intellectual Property Rights" has the meaning
provided therefor in Section 3.1(q) of this Agreement.
"Lien" means, with respect to any property or assets of any Person,
any mortgage or deed of trust, pledge, hypothecation, assignment, deposit
arrangement (other than advance payments or customer deposits for goods and
services sold by the Company in the ordinary course of business), security
interest, lien, charge, easement, encumbrance, preference, priority or other
security agreement or preferential arrangement of any kind or nature whatsoever
on or with respect to such property or assets (including without limitation, any
Capitalized Lease Obligations (as defined in the Indenture)), conditional sales,
or other title retention agreement having substantially the same economic effect
as any of the foregoing.
"Material Adverse Effect" means (i) a material adverse effect on the
business, assets, condition (financial or otherwise), results of operations or
properties of the Company or (ii) a material adverse effect on the legality,
validity, binding effect or enforceability of this Agreement or the other Basic
Documents.
"Material Contract" has the meaning provided
therefor in Section 3.1(p) of this Agreement.
"Memorandum" has the meaning provided therefor in
Section 2.1 of this Agreement.
"Notes" means the 9 7/8% Senior Subordinated Notes
due 2009 of the Company.
"Offering" means the offering of the Notes pursuant
to the Memorandum.
"Offering Materials" has the meaning provided
therefor in Section 7.1 of this Agreement.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, joint-stock company, trust, unincorporated
organization or association or government (including any agency or political
subdivision thereof).
"PORTAL" means the Private Offering, Resales, and
Trading through Automated Linkages Market.
"Preliminary Memorandum" has the meaning provided
therefor in Section 2.1 of this Agreement.
"Private Exchange Notes" has the meaning provided
therefor in the Registration Rights Agreement.
"Proceeding" has the meaning provided therefor in
Section 7.1(c) of this Agreement.
"QIB" has the meaning provided therefor in Section
3.2 of this Agreement.
"Registration Rights Agreement" means the registration rights
agreement among the Company and the Initial Purchasers relating to the Notes.
"Regulation S" means Regulation S under the Act.
"State" means each of the states of the United States, the District of
Columbia and the Commonwealth of Puerto Rico.
"State Commission" means any agency of any State having jurisdiction
to enforce such State's securities laws.
"Tax" has the meaning provided therefor in Section
3.1(y) of this Agreement.
"Time of Purchase" has the meaning provided therefor
in Section 2.2 of this Agreement.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended, and the rules and regulations of the Commission thereunder.
Section 1.2. Accounting Terms; Financial Statements. All accounting
terms used herein not expressly defined in this Agreement shall have the
respective meanings given to them in accordance with sound accounting practice.
The term "sound accounting practice" shall mean such accounting practice as, in
the opinion of the independent accountants regularly retained by the Company,
conforms at the time to generally accepted accounting principles in the United
States applied on a consistent basis except for changes with which such
accountants concur. All determinations to which accounting principles apply
shall be made in accordance with sound accounting practice.
ARTICLE II
ISSUE OF NOTES; PURCHASE AND SALE
OF NOTES; RIGHTS OF HOLDERS OF NOTES;
OFFERING BY INITIAL PURCHASERS
Section 2.1. Issue of Notes. The Company has authorized the issuance
of $150,000,000 aggregate principal amount of the Notes which are to be issued
pursuant to the Indenture. Each Note will be substantially in the form of the
Note set forth as Exhibit A to the Indenture.
The Notes will be offered and sold to the Initial Purchasers without
being registered under the Act, in reliance on exemptions therefrom.
In connection with the sale of the Notes, the Company has prepared a
preliminary offering memorandum dated March 5, 1999 (the "Preliminary
Memorandum") and prepared a final offering memorandum dated March 19, 1999 (the
"Final Memorandum" and, together with the Preliminary Memorandum, the
"Memorandum") setting forth or including a description of the terms of the
Notes, the terms of the offering, a description of the Company and any material
developments relating to the Company occurring after the date of the most recent
financial statements included therein.
Section 2.2. Purchase, Sale and Delivery of Notes. On the basis of the
representations, warranties, agreements and covenants herein contained and
subject to the terms and conditions herein set forth, the Company agrees that it
will sell to each Initial Purchaser, and each Initial Purchaser agrees, acting
severally and not jointly, that it will purchase from the Company at the Time of
Purchase, the principal amount of the Notes set forth opposite the name of such
Initial Purchaser on Schedule I hereto at a price equal to 97% of the principal
amount thereof.
The purchase, sale and delivery of the Notes will take place at a
closing (the "Closing") at the offices of Cahill Gordon & Reindel, 80 Pine
Street, New York, New York 10005, at 9:00 A.M., New York time, on March 24,
1999, or such later date and time, if any, as the Initial Purchasers and the
Company shall agree. The time at which such Closing is concluded is herein
called the "Time of Purchase."
One or more certificates in definitive form for the Notes that the
Initial Purchasers have agreed to purchase hereunder, and in such denomination
or denominations and registered in such name or names as the Initial Purchasers
request upon notice to the Company at least 24 hours prior to the Closing, shall
be delivered by or on behalf of the Company to the Initial Purchasers, against
payment by or on behalf of the Initial Purchasers of the purchase price therefor
by wire transfer of immediately available funds wired in accordance with the
written instructions of the Company. The Company will make such certificate or
certificates for the Notes available for checking and packaging by the Initial
Purchasers at the offices of CIBC or NationsBanc, or such other place as CIBC
and NationsBanc may designate, at least 24 hours prior to the Closing.
Section 2.3. Registration Rights of Holders of Notes. The Initial
Purchasers and their direct and indirect transferees of the Notes will have such
rights with respect to the registration thereof under the Act and qualification
of the Indenture under the Trust Indenture Act as are set forth in the
Registration Rights Agreement.
Section 2.4. Offering by the Initial Purchasers. The Initial
Purchasers propose to make an offering of the Notes at the price and upon the
terms set forth in the Final Memorandum, as soon as practicable after this
Agreement is entered into and as in the judgment of the Initial Purchasers is
advisable.
ARTICLE III
REPRESENTATIONS AND WARRANTIES; RESALE OF NOTES
Section 3.1. Representations and Warranties of the Company. The
Company represents and warrants to and agrees with each of the Initial
Purchasers as follows:
(a) Final Memorandum. The Final Memorandum, as of its date does not,
and at the Time of Purchase will not, contain any untrue statement of a
material fact or omit to state a material fact 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 set
forth in this Section 3.1(a) do not apply to statements or omissions made
in reliance upon and in conformity with information relating to the Initial
Purchasers furnished to the Company in writing by the Initial Purchasers
expressly for use in the Final Memorandum or any amendment or supplement
thereto as set forth in Section 8.4 hereof. The statistical and
market-related data included in the Final Memorandum are based on or
derived from sources which the Company believes to be reliable and accurate
or represent the Company's good faith estimates that are made on the basis
of data derived from such sources. The Notes, the Indenture and the
Registration Rights Agreement conform in all material respects to the
description thereof in the Final Memorandum.
(b) Financial Statements. The audited financial statements of the
Company set forth in the Final Memorandum are in accordance with the books
and records of the Company, fairly present in all material respects the
financial position, results of operations, stockholders' equity and cash
flows of the Company at the dates and for the periods to which they relate
and have been prepared in accordance with generally accepted accounting
principles consistently applied (except as otherwise stated therein); the
summary and selected financial data in the Final Memorandum present fairly
the financial information shown therein and have been prepared and compiled
on a basis consistent with audited financial statements included therein,
except as otherwise stated therein. Each of Rubin, Brown, Gornstein & Co.
LLP and PriceWaterhouseCoopers, LLP which has reported upon the audited
financial statements included in the Final Memorandum, is an independent
public accounting firm as required by the Act and the rules and regulations
thereunder. The pro forma financial statements and other pro forma
financial information (including the notes thereto) included in the Final
Memorandum (A) have been prepared in accordance with applicable
requirements of Regulation S-X promulgated under the Exchange Act (it being
understood that the rules under Regulation S-X relative to pro forma
adjustments require the application of judgment regarding whether such
adjustments are directly attributable to the transaction, have a continuing
impact and are factually supportable and that the staff of the Commission
could disagree that certain of the adjustments meet these requirements) and
(B) have been properly computed on the bases described therein; and the
assumptions used therein are appropriate to give effect to the transactions
or circumstances referred to therein.
(c) Existence. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and
has the power and authority to carry on its business as now being conducted
and to own and operate the properties and assets now owned and being
operated by it. The Company has delivered to the Initial Purchasers
complete and correct copies of its Certificate of Incorporation and by-laws
as in effect on the date hereof. The Company is duly qualified or licensed
to do business and is in good standing in each jurisdiction in which such
qualification is necessary under the applicable law as a result of the
conduct of its business or the ownership of its properties except where the
failure to be so qualified, licensed or in good standing does not have a
Material Adverse Effect. The Company does not have any subsidiaries, and,
other than DW-Wej-it, Inc., a Delaware corporation ("DW"), has not had
since it became an "S Corporation" in April 1982, any subsidiaries.
(d) Capital Stock. As of the Time of Purchase (after giving effect to
the Offering), the Company will have the capitalization as set forth in the
Final Memorandum, except for revolving credit borrowings since December 31,
1998 and except as described in the Final Memorandum, all of the issued and
outstanding securities of the Company have been duly authorized and validly
issued and are fully paid and non-assessable and none of them have been
issued in violation of any preemptive or other right; and, except as
contemplated in this Agreement or the other agreements, instruments or
documents delivered in connection with the transactions contemplated hereby
or referred to in the Final Memorandum, the Company is not a party to or
bound by any contract, agreement or arrangement to issue, sell or otherwise
dispose of or redeem, purchase or otherwise acquire any Capital Stock or
any other security exercisable or exchangeable for or convertible into any
capital stock or any other security of the Company.
(e) Authority. The Company has the requisite power to enter into the
Basic Documents and all other agreements, instruments and documents
executed and delivered by the Company pursuant thereto (collectively, the
"Company Delivered Documents") and to carry out its obligations thereunder,
including without limitation issuing the Notes in the manner and for the
purpose contemplated by this Agreement. The execution, delivery and
performance of the Company Delivered Documents and the consummation of the
transactions contemplated thereby have been duly authorized by the Company
(to the extent a party thereto), and no other proceeding or approval on the
part of the Company is necessary to authorize the execution and delivery of
the Company Delivered Documents or the performance of any of the
transactions contemplated thereby.
(f) Purchase Agreement. This Agreement has been duly authorized,
executed and delivered by the Company and (assuming the due authorization,
execution and delivery thereof by the Initial Purchasers), is a valid and
legally binding agreement of the Company, enforceable against it in
accordance with its terms except (i) that the enforcement hereof may be
subject to bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally, and to general principles of equity and the
discretion of the court before which any proceeding therefor may be brought
and (ii) as any rights to indemnity or contribution hereunder may be
limited by federal and state securities laws and public policy
considerations.
(g) Indenture. The Indenture has been duly authorized by the Company
and, when executed and delivered by the Company (assuming the due
authorization, execution and delivery thereof by the Trustee), will
constitute a valid and legally binding agreement of the Company,
enforceable against it in accordance with its terms except that the
enforcement thereof may be subject to (i) bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other similar laws now
or hereafter in effect relating to creditors' rights generally and (ii)
general principles of equity and the discretion of the court before which
any proceeding therefor may be brought.
(h) Registration Rights Agreement. The Registration Rights Agreement
has been duly authorized by the Company and, when executed and delivered by
the Company (assuming the due authorization, execution and delivery thereof
by the Initial Purchasers), will constitute a valid and legally binding
agreement of the Company, enforceable against it in accordance with its
terms except (i) that the enforcement thereof may be subject to bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights
generally, and to general principles of equity and the discretion of the
court before which any proceeding therefor may be brought and (ii) as any
rights to indemnity or contribution thereunder may be limited by federal
and state securities laws and public policy considerations.
(i) Notes. The Notes, the Exchange Notes and the Private Exchange
Notes have each been duly authorized by the Company and, when executed by
the Company and authenticated by the Trustee in accordance with the
provisions of the Indenture and, in the case of the Notes, delivered to and
paid for by the Initial Purchasers in accordance with the terms of this
Agreement, will be entitled to the benefits of the Indenture and will
constitute valid and legally binding obligations of the Company enforceable
in accordance with their terms, except that the enforcement thereof may be
subject to (i) bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally, and (ii) general principles of
equity and the discretion of the court before which any proceeding therefor
may be brought.
(j) Other Documents. Each other Company Delivered Document executed
and delivered by the Company (to the extent a party thereto) has been duly
and validly authorized, executed and delivered by the Company (to the
extent a party thereto) and constitutes or will constitute a valid and
legally binding obligation of the Company (to the extent a party thereto),
enforceable against it in accordance with its terms, except (i) that the
enforcement thereof may be subject to bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other similar laws now
or hereafter in effect relating to creditors' rights generally, and to
general principles of equity and the discretion of the court before which
any proceeding therefor may be brought and (ii) as any rights to indemnity
and contribution hereunder and thereunder may be limited by applicable law.
(k) Solvency. Immediately after the consummation of the transactions
contemplated by this Agreement (including the use of proceeds from the sale
of Notes at the Time of Purchase), the fair value and present fair saleable
value of the assets of the Company will exceed the sum of its stated
liabilities and identified contingent liabilities; the Company will not be,
after giving effect to the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby
(including the use of proceeds from the sale of Notes at the Time of
Purchase), (i) left with unreasonably small capital with which to carry on
its business as it is proposed to be conducted, (ii) unable to pay its
debts (contingent or otherwise) as they mature or (iii) otherwise
insolvent.
(l) Absence of Certain Changes. Subsequent to the date as of which
information is given in the Final Memorandum, except as described in the
Final Memorandum, there has not been (i) any event or condition that had a
Material Adverse Effect, (ii) any transaction entered into by the Company,
other than in the ordinary course of business, that had a Material Adverse
Effect, or (iii) any dividend or distribution of any kind declared, paid or
made by the Company on its Capital Stock other than distributions permitted
under the Indenture.
(m) No Violation. Neither the execution, delivery or performance of
any of the Company Delivered Documents nor the consummation of any of the
transactions contemplated thereby (i) will violate or conflict with the
Certificates of Incorporation or By-laws of the Company, (ii) will, as of
the Time of Purchase, result in any breach of or default under any
provision of any material contract or agreement to which the Company is a
party or by which the Company is bound or to which any property or assets
of the Company is subject, (iii) violates, is prohibited by or requires the
Company to obtain or make any consent, authorization, approval,
registration or filing under any statute, law, ordinance, regulation
(including without limitation Regulation T, U or X of the Board of
Governors of the Federal Reserve System), rule, judgment, decree or order
of any court or governmental agency, board, bureau, body, department or
authority, or of any other person, presently in effect or in effect at the
Time of Purchase, (iv) will cause any acceleration of maturity of any note,
instrument or other indebtedness to which the Company is a party or by
which the Company is bound or with respect to which the Company is an
obligor or guarantor, or (v) except as contemplated by this Agreement and
the other Basic Documents, will result in the creation or imposition of any
Lien upon or give to any other person any interest or right (including any
right of termination or cancellation) in or with respect to the equity or
any of the properties, assets, business, agreements or contracts of the
Company, other than any violation, conflict, breach, default, acceleration
or Lien which, individually or in the aggregate, which does not have a
Material Adverse Effect.
(n) Title and Condition of Properties and Assets. As of the date
hereof, each of the Company has good and valid title to all of its owned
assets and properties which are material to its business, taken as a whole
and as of the Time of Purchase, the Company will have good and valid title
to all of its assets and properties which are material to its business,
taken as a whole (except as sold or otherwise disposed of in the ordinary
course of business), subject to no Liens other than Permitted Liens (as
defined in the Indenture).
(o) Leased Property. Each lease of real property or personal property
that is material to the business of the Company and its subsidiaries, taken
as a whole, is in full force and effect and is valid and enforceable in
accordance with its terms except that (i) that the enforcement hereof may
be subject to bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally, and to general principles of
equity and the discretion of the court before which any proceeding may be
brought and (ii) as any rights to indemnity or contribution hereunder may
be limited by federal and state securities laws and public policy
considerations. There is not under any such lease any default by the
Company or any event that with notice or lapse of time or both would
constitute such a default by the Company and with respect to which the
Company or has not taken adequate steps to prevent such default from
occurring, except for any such default that has not had a Material Adverse
Effect; all of such events, if any, and the aforesaid steps taken by the
Company are set forth in the Final Memorandum. To the Company's knowledge,
there is not under any such lease any default by any other party thereto or
any event that with notice or lapse of time or both would constitute such a
default thereunder by such party, which default has had a Material Adverse
Effect. The Company does not owns any real property.
(p) Litigation. Except as set forth in the Final Memorandum, there are
no actions, suits, proceedings or investigations, either at law or in
equity, or before any commission or other administrative authority in any
United States jurisdiction, of any kind now pending or, to the best of the
Company's knowledge, threatened involving the Company that (i) seeks to
restrain, enjoin, prevent the consummation of or otherwise challenge the
issuance and sale of the Notes by the Company or any of the other material
transactions contemplated hereby, (ii) questions the legality or validity
of any such transactions or seeks to recover damages or obtain other relief
in connection with any such transactions or (iii) which individually or in
the aggregate, has had a Material Adverse Effect.
(q) Intangible Property Rights. The Final Memorandum accurately
describes: (i) all material copyrights, patents, trademarks, service marks
and trade names, and all registrations or pending applications thereof in
the United States (collectively "Intangible Property Rights") owned by the
Company; and (ii) all material licenses and similar agreements under which
the Company uses Intangible Property Rights of any third party. Except as
otherwise described in the Final Memorandum, (i) the Company owns, is
licensed or otherwise has sufficient rights to use the material
Intellectual Property Rights and the Technology (as defined below)
necessary for the conduct of its business free and clear of all Liens other
than Permitted Liens; (ii) there are no pending claims challenging the
validity, enforceability or ownership of such Intellectual Property Rights
or Technology or the Company's right to use such Intellectual Property
Rights or Technology; (iii) the material issued patents, registered
trademarks and registered copyrights in the United States under such
Intellectual Property Rights are valid and subsisting and, to the Company's
knowledge, none of the claims of said issued patents, registered trademarks
or copyrights is now being infringed by others; (iv) there are no material
licenses or sublicense agreements now in effect regarding the Company's or
to the Company's knowledge, any third party's use of such Intellectual
Property Rights or Technology; and (v) to the Company's knowledge, the
Company is not infringing or misappropriating any U.S. or foreign patent,
trademark, copyright owned by third parties and no claim is now pending or
is threatened to such effect, except for any of the foregoing which does
not have a Material Adverse Effect. "Technology" means the material
patterns, plans, designs, confidential information, research data, trade
secrets and other proprietary know-how, formulae and manufacturing
processes, operating manuals, drawings, technology, manuals, data, records,
procedures, research and development records, and all licenses or other
rights to use any of the foregoing of others used in connection with the
business.
(r) Compliance with Laws, Etc. Except as disclosed in the Final
Memorandum and except for those failures to have, to be in full force and
effect, to file, retain and maintain and to comply, in each case, that do
not have a Material Adverse Effect, (i) with respect to its business, the
Company has all licenses, permits or franchises issued by any United States
or foreign, federal, state, provincial, municipal or local authority or
regulatory body and other governmental certificates, authorizations and
approvals (collectively "Licenses and Permits") required by every United
States or foreign, federal, state, provincial, municipal and local
governmental or regulatory body for the operation of their businesses and
the use of their properties as presently operated or used; (ii) all such
Licenses and Permits are in full force and effect and no action, claim or
proceeding is pending, nor to the knowledge of the Company is threatened,
to suspend, revoke, revise, limit, restrict or terminate any of such
Licenses and Permits or declare any such License or Permit invalid; (iii)
the Company has filed all necessary reports and maintained and retained all
necessary records pertaining to such Licenses and Permits; and (iv) the
Company has otherwise complied with all of the laws, ordinances,
regulations and orders applicable to their existence, financial condition,
operations, properties or business, and the Company has not received any
notice to the contrary.
(s) Governmental Authorizations and Regulations. Except as set forth
in the Final Memorandum, no authorization, consent, approval, license,
qualification or formal exemption from, nor any filing, declaration or
registration with, any court, governmental agency, securities exchange or
any regulatory authority is required in connection with the execution,
delivery or performance by the Company of this Agreement or any of the
other Basic Documents or any of the transactions contemplated thereby,
except (i) as may be required under state securities or "blue sky" laws or
the laws of any foreign jurisdiction in connection with the offer and sale
of the Notes, or (ii) as does (individually or in the aggregate) have a
Material Adverse Effect. All such authorizations, consents, approvals,
licenses, qualifications, exemptions, filings, declarations and
registrations set forth in the Final Memorandum (other than as disclosed
therein) which are required to have been obtained by the date hereof have
been obtained or made, as the case may be, and are in full force and effect
and not the subject of any pending or, to the knowledge of the Company,
threatened attack by appeal or direct proceeding or otherwise.
(t) Labor Controversies. Except as disclosed in the Final Memorandum
and except for the following which do not have a Material Adverse Effect
(i) no employees of the Company are currently represented by a labor union
or labor organization, no labor union or labor organization has been
certified or recognized as a representative of any such employees, and the
Company has no obligation under any collective bargaining agreement or
other agreement with any labor union or labor organization that, in any
way, affects the Company. (ii) there is no unfair labor practice complaint
against the Company pending before the National Labor Relations Board,
(iii) there is no labor strike, dispute, slowdown or stoppage actually
pending or to the knowledge of the Company threatened against or affecting
the Company, (iv) the Company has not experienced any strike, work stoppage
or other labor difficulty during the past three years, and (v) the Company
is not a party to, or subject to, a collective bargaining agreement, and no
collective bargaining agreement relating to employees, and no collective
bargaining agreement relating to employees of the Company is currently
being negotiated.
(u) Employment Contracts. Except as described in the Final Memorandum,
there are no material employment contracts between the Company, on the one
hand, and Employees, on the other hand, other than contracts representing
the standard terms and conditions prevailing between the Company and its
Employees.
(v) Finders; Brokers. Except as described in the Final Memorandum,
there re no claims for commissions or fees from any investment banker,
broker, finder, consultant or intermediary hired by or on behalf of the
Company in connection with the transactions contemplated by this Agreement,
based on any arrangement or agreement.
(w) Environmental Matters. Except as disclosed in the Final Memorandum
and except as does not individually or in the aggregate, have a Material
Adverse Effect, (A) the Company is in compliance with and not subject to
liability under all applicable Environmental Laws, (B) the Company has made
all filings and provided all notices required under any applicable
Environmental Law, and has all permits, authorizations and approvals
required under any applicable Environmental Laws and is in compliance with
their requirements, (C) there is no civil, criminal or administrative
action, suit, demand, claim, hearing, notice of violation, investigation,
proceeding, notice or demand letter or request for information pending or,
to the best knowledge of the Company, threatened against the Company under
any Environmental Law, (D) no lien, charge, encumbrance or restriction has
been recorded under any Environmental Law with respect to any assets,
facility or property owned, operated, leased or controlled by the Company,
(E) the Company has not received notice that it had been identified as a
potentially responsible party under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended ("CERCLA") or
any comparable state law, (F) no property or facility owned, leased or
operated by the Company is (i) listed or proposed for listing on the
National Priorities List under CERCLA or (ii) listed in the Comprehensive
Environmental Response, Compensation, Liability Information System List
promulgated pursuant to CERCLA, or any comparable list maintained by any
state or local governmental authority; (G) there are no events, activities,
conditions, or occurrences which could reasonably be expected to prevent
the Company from complying with, or to result in liability under,
Applicable Environmental Laws.
For purposes of this Agreement, the following terms shall have the
following meanings: "Environmental Law" means any federal, state, local or
municipal statute, law, rule, regulation, ordinance, code, policy or rule
of common law and any judicial or administrative interpretation thereof,
including any judicial or administrative order, consent decree or judgment
binding on the Company relating to pollution or protection of the
environment (including, without limitation, ambient air, indoor air,
surface water, groundwater, land surface or subsurface strata), natural
resources, or health or safety or any pollutant, contaminant, waste,
constituent, chemical, material or substance, that is subject to regulation
thereunder.
(x) Year 2000 Compliance. The Company believes that its internal
computer systems used in the operation of the Business are in all material
respects able to store, process and output dates from and after January 1,
2000 in the same manner and with the same accuracy, functionality and
performance as when dates prior to January 1, 2000 are involved.
(y) Tax Matters. (a) There are no Liens on any of the assets used in
the Company's business for any taxes, duties or assessments, or any
interest, penalties or additions imposed with respect to such amounts
(collectively, "Taxes") (other than for Taxes not yet due and payable).
(b) (i) All material Tax Returns required to be filed relating to the
Company have been timely filed, (ii) all such Tax Returns are complete
and correct in all material respects, and (iii) all material Taxes due
and owing from the Company have been timely paid or have been provided
for on the Closing Balance Sheet (as defined in the Recapitalization
Agreement). With respect to any period or portion thereof ending on or
before the Closing Date for which Tax Returns have not yet been filed,
or for which material Taxes have accrued but are not yet due and
owing, the Company has made due and sufficient accruals for such Taxes
on the Closing Balance Sheet (as defined in the Recapitalization
Agreement).
(c) The Company has not waived any statute of limitations in respect
of Taxes or agreed to any extension of time with respect to any
material Tax assessment or deficiency.
(d) No audit or other proceeding by any court, governmental or
regulatory authority, or similar person has formally commenced and no
written notification has been given to the Company that such an audit
or other proceeding is pending or threatened with respect to any
material Taxes due from or with respect to the Company or any material
Tax Return filed by or with respect to the Company. No assessment of a
material Tax has been proposed in writing against the Company or any
of its assets.
(e) The Company has made a valid election under Section 1362 of the
Internal Revenue Code and any corresponding state or local provisions
(collectively, the "S Elections") to be an S corporation within the
meaning of Section 1361 of the Code for all taxable years (or portions
thereof) ending prior to the Closing Date which have not been closed
by the applicable statute of limitations.
(f) The Company made a valid election to treat DW as a "qualified
Subchapter S subsidiary" under Internal Revenue Code ss. 1361(b)(3)
for all taxable years (or portions thereof) ending prior to the
Closing Date during which the Company held an
ownership interest in DW.
(g) The Company is not a party to any Tax allocation or Tax sharing
agreement.
(z) Investment Company. The Company is not and immediately after the
Time of Purchase will not be, an "investment company" or, to the Company's
knowledge, a company "controlled" by an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.
(aa) ERISA. No Reportable Event (as defined in Section 4043 of ERISA)
has occurred during the three-year period prior to the date on which this
representation is made with respect to any Employee Benefit Plan, and the
Company has complied in all material respects with the applicable
provisions of ERISA and the Code in connection with the Employee Benefit
Plans. No Employee Benefit Plan of the Company or plan of any Commonly
Controlled Entity is subject to Title IV of ERISA and the Company has no
director interest, actual or contingent liability under Title IV of ERISA.
Neither the Company, nor any Commonly Controlled Entity (as defined below)
has Incurred or is reasonably likely to incur any withdrawal liability with
respect to any Multiemployer Plan (as defined in Section 4001(a)(3) of
ERISA). No such Multiemployer Plan is in reorganization or insolvent. There
are no material liabilities of the Company or any Commonly Controlled
Entity for post-retirement benefits to be provided to their current and
former employees under Employee Benefit Plans which are welfare benefit
plans (as described in Section 3(1) of ERISA)("Welfare Benefit Plans"), and
all Welfare Benefit Plans of the Company and welfare plans of its Commonly
Controlled Entaties are in substancial compliance with the continuation
coverage requirements of Section 498OB of the Code and Part 6 of Title I of
ERISA. With respect to each Employee Benefit Plan, no event has occurred
and there exists no conditions or set of circumstances in connection with
which the Company or any of its subsidiaries is reasonably likely to be
subject to material liability under the Code, ERISA or any other applicable
law, except for liability for benefit claims and funding obligations
payable in the ordinary course. "Commonly Controlled Entity" means any
person or entity that, together with any Company, is treated as a single
employer under Section 414(b), (c), (m) or (o) of the Code. "Employee
Benefit Plan" means an employee benefit plan, as defined in Section 3(3) of
ERISA, which is maintained or contributed to by an Company or to which the
Company may have liability.
(bb) Insurance. The Company carries insurance (including self
insurance) in such amounts and covering such risks as in its reasonable
determination is adequate for the conduct of its business and the value of
its properties.
(cc) The Offering. Assuming the accuracy of the Initial Purchasers'
representations and warranties in Section 3.2 hereof and the performance of
their covenants in this Agreement, no form of general solicitation or
general advertising (as those terms are used in Regulation D under the Act)
was used by the Company or its representatives in connection with the offer
and sale of the Notes; neither the Company nor any Person authorized to act
for the Company has, either directly or indirectly, sold or offered for
sale any of the Notes or any other similar security of the Company to, or
solicited any offers to buy any thereof from, or has otherwise approached
or negotiated in respect thereof with, any Person or Persons other than
with or through the Initial Purchasers; and the Company agrees that neither
the Company nor any Person acting on its behalf will sell or offer for sale
any Notes to, or solicit any offers to buy any Notes from, or otherwise
approach or negotiate in respect thereof with, any Person or Persons so as
thereby to bring the issuance or sale of any of the Notes within the
provisions of Section 5 of the Act. Assuming the accuracy of the Initial
Purchasers' representations and warranties set forth in Section 3.2 hereof,
and the due performance by the Initial Purchasers of the covenants and
agreements set forth in Section 3.2 hereof, the offer and sale of the Notes
to the Initial Purchasers in the manner contemplated by this Agreement and
the Final Memorandum does not require registration under the Act and the
Indenture does not require qualification under the Trust Indenture Act. No
securities of the Company 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 interdealer quotation system. The Company has not taken, nor
will it take, directly or indirectly, any action designed to, or that might
be reasonably expected to, cause or result in stabilization or manipulation
of the price of the Notes. Neither of the Company nor any of its Affiliates
or any person acting on its or their behalf (other than the Initial
Purchasers) has engaged in any directed selling efforts (as that term is
defined in Regulation S with respect to the Notes and the Company and their
respective Affiliates and any person acting on its or their behalf (other
than the Initial Purchasers) have acted in accordance with the offering
restrictions requirements of Regulation S.
Section 3.2. Resale of Notes. Each of the Initial Purchasers
represents and warrants (as to itself only) that it is a "qualified
institutional buyer" as defined in Rule 144A of the Act ("QIB"). Each of the
Initial Purchasers agrees with the Company (as to itself only) that (a) it has
not and will not solicit offers for, or offer or sell, the Notes by any form of
general solicitation or general advertising (as those terms are used in
Regulation D under the Act) or in any manner involving a public offering within
the meaning of Section 4(2) of the Act; and (b) it has and will solicit offers
for the Notes only from, and will offer the Notes only to (A) in the case of
offers inside the United States, Persons whom the Initial Purchasers reasonably
believe to be QIBs or, if any such Person is buying for one or more
institutional accounts for which such Person is acting as fiduciary or agent,
only when such Person has represented to the Initial Purchasers that each such
account is a QIB, to whom notice has been given that such sale or delivery is
being made in reliance on Rule 144A, and, in each case, in transactions under
Rule 144A and (B) in the case of offers outside the United States, to Persons
other than U.S. Persons ("foreign purchasers," which term shall include dealers
or other professional fiduciaries in the United States acting on a discretionary
basis for foreign beneficial owners (other than an estate or trust)); provided,
however, that, in the case of this clause (B), in purchasing such Notes such
Persons are deemed to have represented and agreed as provided under the caption
"Notice to Investors" contained in the Final Memorandum.
ARTICLE IV
CONDITIONS PRECEDENT TO CLOSING
Section 4.1. Conditions Precedent to Obligations of the Initial
Purchasers. The obligation of each Initial Purchaser to purchase the Notes to be
purchased at the Closing is subject, at the Time of Purchase, to the
satisfaction of the following conditions:
(a) At the Time of Purchase, the Initial Purchasers shall have
received the opinions, dated as of the Time of Purchase and addressed to
the Initial Purchasers, of Kirkland & Ellis, counsel for the Company, in
form and substance [reasonably satisfactory to counsel for the Initial
Purchasers, to the effect] as set forth on Exhibit A hereto.
(b) The Initial Purchasers shall have received an opinion, addressed
to the Initial Purchasers in form and substance satisfactory to the Initial
Purchasers and dated the Time of Purchase, of Cahill Gordon & Reindel,
counsel to the Initial Purchasers.
(c) The Initial Purchasers shall have received from
PriceWaterhouseCoopers a comfort letter or letters dated the date hereof
and the Closing in form and substance reasonably satisfactory to counsel to
the Initial Purchasers.
(d) The representations and warranties made by the Company herein
shall be true and correct in all material respects (except for changes
expressly provided for in this Agreement) on and as of the Time of Purchase
with the same effect as though such representations and warranties had been
made on and as of the Time of Purchase, the Company shall have complied in
all material respects with all agreements as set forth in or contemplated
hereunder and in the Basic Documents required to be performed by it at or
prior to the Time of Purchase and the Company shall have furnished to each
Initial Purchaser a certificate, dated the Time of Purchase, to such
effect.
(e) Subsequent to the date of the Final Memorandum, (i) there shall
not have been any change which has a Material Adverse Effect and (ii) the
Company shall not have taken any voluntary, affirmative action to conduct
their business other than in the ordinary course.
(f) At the Time of Purchase and after giving effect to the
consummation of the transactions contemplated by this Agreement and the
Basic Documents, there shall exist no Default or Event of Default.
(g) The purchase of and payment for the Notes by the Initial
Purchasers hereunder shall not be prohibited or enjoined (temporarily or
permanently) by any applicable law or governmental regulation (including,
without limitation, Regulation T, U or X of the Board of Governors of the
Federal Reserve System).
(h) At the Time of Purchase, the Initial Purchasers shall have
received a certificate, dated the Time of Purchase, from the Company,
stating that the conditions specified in Sections 4.1(d), (e), (f) and (g)
have been satisfied or duly waived at the Time of Purchase.
(i) Each of the Basic Documents shall have been executed and delivered
by all the respective parties thereto and shall be in full force and
effect.
(j) All proceedings required in order to issue the Notes and
consummate the transactions contemplated by this Agreement and all
documents and papers relating thereto shall be reasonably satisfactory to
the Initial Purchasers and counsel to the Initial Purchasers. The Initial
Purchasers and counsel to the Initial Purchasers shall have received copies
of such papers and documents of the Company as they may reasonably request
in connection therewith, all in form and substance reasonably satisfactory
to them.
(k) The sale of the Notes hereunder shall not have been enjoined
(temporarily or permanently) at the Time of Purchase.
On or before the Closing, the Initial Purchasers and counsel to the
Initial Purchasers shall have received such further documents, opinions,
certificates and schedules or other instruments relating to the business,
corporate, legal and financial affairs of the Company as they may reasonably
request.
Section 4.2. Conditions Precedent to Obligations of the Company. The
obligations of the Company to deliver the Notes shall be subject to the accuracy
as of the date hereof and at the Time of Purchase (as if made on and as of the
time of Purchase) of the representations and warranties of the Initial
Purchasers herein (delivery of the purchase price by the Initial Purchasers for
the Notes being an affirmation by the Initial Purchasers of the accuracy of
their representations and warranties).
ARTICLE V
COVENANTS
Section 5.1. Covenants of the Company. The Company covenants and
agrees with each of the Initial Purchasers that:
(a) The Company will not amend or supplement the Final Memorandum or
any amendment or supplement thereto of which the Initial Purchasers shall
not previously have been advised and furnished a copy for a reasonable
period of time prior to the proposed amendment or supplement and as to
which the Initial Purchasers shall not have given their consent, which
consent shall not be unreasonably withheld. The Company will promptly, upon
the reasonable request of the Initial Purchasers or counsel to the Initial
Purchasers, make any amendments or supplements to the Final Memorandum that
may be necessary or advisable in connection with the resale of the Notes by
the Initial Purchasers.
(b) The Company will cooperate with the Initial Purchasers in
arranging for the qualification of the Notes for offering and sale under
the securities or "blue sky" laws of such jurisdictions as the Initial
Purchasers may designate and will continue such qualifications in effect
for as long as may be reasonably necessary to complete the resale of the
Notes; provided, however, that in connection therewith, the Company shall
not be required to qualify as a foreign corporation, to take any acts which
would require it to qualify to do business or to execute a general consent
to service of process in any jurisdiction or subject itself to taxation in
excess of a nominal dollar amount in any such jurisdiction where it is not
then so subject.
(c) If, at any time prior to the completion of the distribution by the
Initial Purchasers of the Notes, the Exchange Notes or the Private Exchange
Notes, any event occurs or information becomes known as a result of which
the Final Memorandum as then amended or supplemented would include any
untrue statement of a material fact, or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if for any other reason it
is necessary at any time to amend or supplement the Final Memorandum to
comply with applicable law, the Company will promptly notify the Initial
Purchasers thereof (who thereafter will not use such Final Memorandum until
appropriately amended or supplemented) and will prepare, at the expense of
the Company, an amendment or supplement to the Final Memorandum that
corrects such statement or omission or effects such compliance.
(d) The Company will, without charge, provide to the Initial
Purchasers and to counsel to the Initial Purchasers as many copies of the
Preliminary and Final Memorandum or any amendment or supplement thereto as
the Initial Purchasers may reasonably request.
(e) The Company will apply the net proceeds from the sale of the Notes
as set forth under "Use of Proceeds" in the Final Memorandum.
(f) For and during the period ending on the date no Notes are
outstanding, the Company will furnish to the Initial Purchasers copies of
all reports and other communications (financial or otherwise) furnished by
the Company to the Trustee or the holders of the Notes and, promptly after
available, copies of any reports or financial statements furnished to or
filed by the Company with the Commission or any national securities
exchange on which any class of securities of the Company may be listed.
(g) Prior to the Time of Purchase, the Company will furnish to the
Initial Purchasers, as soon as they have been prepared in final form, a
copy of any unaudited interim financial statements of the Company for any
period subsequent to the period covered by the most recent financial
statements appearing in the Final Memorandum.
(h) The Company and its Affiliates will not sell, offer for sale or
solicit offers to buy or otherwise negotiate in respect of any "security"
(as defined in the Act) which could be integrated with the sale of the
Notes in a manner which would require the registration under the Act of the
Notes.
(i) The Company 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 those terms are used in Regulation D under the Act) or in any manner
involving a public offering within the meaning of Section 4(2) of the Act.
(j) 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 not saleable in full under Rule 144 under the Act (or any successor
provision), the Company will make available, upon request, to any seller of
such Notes the information specified in Rule 144A(d)(4) under the Act,
unless the Company is then subject to Section 13 or 15(d) of the Exchange
Act.
(k) The Company will use its best efforts to (i) permit the Notes to
be included for quotation on PORTAL and (ii) permit the Notes to be
eligible for clearance and settlement through The Depository Trust Company.
(l) The Company will do and perform all things required to be done and
performed by it under this Agreement and the other Basic Documents prior to
or after the Closing, subject to the qualifications and limitations in the
writing that expresses such obligations, and to satisfy all conditions
precedent on their part to the obligations of the Initial Purchasers under
this Agreement to purchase and accept delivery of the Notes.
(m) In connection with Notes offered and sold in an offshore
transaction (as defined in Regulation S), the Company will not register any
transfer of such Notes not made in accordance with the provisions of
Regulation S and will not, except in accordance with the provisions of
Regulation S, if applicable, issue any such Notes in the form of definitive
securities.
ARTICLE VI
FEES
Section 6.1. Costs, Expenses and Taxes. The Company agrees to pay all
costs and expenses incident to the performance of their obligations under this
Agreement, whether or not the transactions contemplated herein are consummated
or this Agreement is terminated pursuant to Section 8.2 hereof, including, but
not limited to, all costs and expenses incident to (i) the Company's cost of
preparation, printing, reproduction, execution and delivery of this Agreement,
each of the other Basic Documents, any amendment or supplement to or
modification of any of the foregoing and any and all other documents furnished
pursuant hereto or thereto or in connection herewith or therewith, (ii) any
costs of printing the Preliminary and Final Memorandum and any amendment or
supplement thereto, any other marketing related materials, (iii)any costs of all
arrangements relating to the delivery including postage, etc. to the Initial
Purchasers of copies of the foregoing documents, (iv) the fees and disbursements
of the counsel, the accountants and any other experts or advisors retained by
the Company, (v) preparation (including printing), issuance and delivery to the
Initial Purchasers of the Notes, (vi) the qualification of the Notes under state
securities and "blue sky" laws, including filing fees, word processing and
reproduction costs of any "blue sky" memoranda and fees (not to exceed $15,000)
and disbursements of counsel to the Initial Purchasers relating thereto, (vii)
one-half of the expenses (including one-half of the costs related to the
chartered airplane) in connection with any meetings with prospective investors
in the Notes, (viii) fees and expenses of the Trustee, including fees and
expenses of counsel to the Trustee, (ix) all expenses and listing fees incurred
in connection with the application for quotation of the Notes on PORTAL, (x) any
fees charged by investment rating agencies for the rating of the Notes, and (xi)
except as limited by Article VII, all costs and expenses (including, without
limitation, reasonable attorneys' fees and expenses), if any, of the successful
enforcement of this Agreement, the Notes or any other agreement furnished
pursuant hereto or thereto or in connection herewith or therewith. In addition,
the Company shall pay any and all stamp, transfer and other similar taxes
payable or determined to be payable in connection with the execution and
delivery of this Agreement, any other Basic Document or the issuance of the
Notes, and shall save and hold each Initial Purchaser harmless from and against
any and all liabilities with respect to or resulting from any delay in paying,
or omission to pay, such taxes.
ARTICLE VII
INDEMNITY
Section 7.1. Indemnity.
(a) Indemnification by the Company. The Company agrees and covenants
to hold harmless and indemnify each of the Initial Purchasers and any Affiliates
thereof (including any director, officer, employee, agent or controlling Person
of any of the foregoing) from and against any losses, claims, damages,
liabilities and expenses (including expenses of investigation) to which such
Initial Purchaser and its Affiliates may become subject arising out of or based
upon any untrue statement or alleged untrue statement of any material fact
contained in the Final Memorandum and any amendments or supplements thereto, the
Basic Documents or any application or other documents filed with the Commission
or any State Commission (collectively, the "Offering Materials") or arising out
of or based upon the omission or alleged omission to state in any of the
Offering Materials a material fact required to be stated therein or necessary to
make the statements therein not misleading; provided, however, that the Company
shall not be liable under this paragraph (a) to the extent that such losses,
claims, damages or liabilities arose out of or are based upon an untrue
statement or omission made in any of the documents referred to in this paragraph
(a) in reliance upon and in conformity with the information relating to the
Initial Purchasers furnished in writing by such Initial Purchasers for inclusion
therein; provided, further, that the Company shall not be liable under this
paragraph (a) to the extent that such losses, claims, damages or liabilities
arose out of or are based upon an untrue statement or omission made in any
Memorandum that is corrected in any amendment or supplement thereto if the
person asserting such loss, claim, damage or liability purchased Notes from an
Initial Purchaser in reliance on such Memorandum but was not given the amendment
or supplement thereto on or prior to the confirmation of the sale of such Notes.
The Company further agrees to reimburse each Initial Purchaser for any
reasonable legal and other expenses as they are incurred by it in connection
with investigating, preparing to defend or defending any lawsuits, claims or
other proceedings or investigations arising in any manner out of or in
connection with such Person being an Initial Purchaser; provided that if the
Company reimburses an Initial Purchaser hereunder for any expenses incurred in
connection with a lawsuit, claim or other proceeding for which indemnification
is sought, such Initial Purchaser hereby agrees to refund such reimbursement of
expenses to the extent that the losses, claims, damages or liabilities are not
entitled to indemnification hereunder. The Company further agrees that the
indemnification, contribution and reimbursement commitments set forth in this
Article VII shall apply whether or not an Initial Purchaser is a formal party to
any such lawsuits, claims or other proceedings. The indemnity, contribution and
expense reimbursement obligations of the Company under this Article VII shall be
in addition to any liability the Company may otherwise have.
(b) Indemnification by the Initial Purchasers. Each of the Initial
Purchasers agrees and covenants, severally and not jointly, to hold harmless and
indemnify the Company and any Affiliates thereof (including any director,
officer, employee, agent or controlling Person of any of the foregoing) from and
against any losses, claims, damages, liabilities and expenses insofar as such
losses, claims, damages, liabilities or expenses arise out of or are based upon
any untrue statement of any material fact contained in the Offering Materials,
or upon the omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or omission
was made in reliance upon and in conformity with the information relating to
such Initial Purchaser furnished in writing by such Initial Purchaser for
inclusion therein. The indemnity, contribution and expense reimbursement
obligations of the Initial Purchasers under this Article VII shall be in
addition to any liability the Initial Purchasers may otherwise have.
(c) Procedure. If any Person shall be entitled to indemnity hereunder
(each an "Indemnified Party"), such Indemnified Party shall give prompt written
notice to the party or parties from which such indemnity is sought (each an
"Indemnifying Party") of the commencement of any action, suit, investigation or
proceeding, governmental or otherwise (a "Proceeding"), with respect to which
such Indemnified Party seeks indemnification or contribution pursuant hereto;
provided, however, that the failure so to notify the Indemnifying Parties shall
not relieve the Indemnifying Parties from any obligation or liability except to
the extent that the Indemnifying Parties have been prejudiced materially by such
failure. The Indemnifying Parties shall have the right, exercisable by giving
written notice to an Indemnified Party promptly after the receipt of written
notice from such Indemnified Party of such Proceeding, to assume, at the
Indemnifying Parties' expense, the defense of any such Proceeding, with counsel
reasonably satisfactory to such Indemnified Party; provided, however, that an
Indemnified Party or parties (if more than one such Indemnified Party is named
in any Proceeding) shall have the right to employ separate counsel in any such
Proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party or parties
unless: (1) the Indemnifying Parties agree to pay such fees and expenses; or (2)
the Indemnifying Parties fail promptly to assume the defense of such Proceeding
or fail to employ counsel reasonably satisfactory to such Indemnified Party or
parties; or (3) the named parties to any such Proceeding (including any
impleaded parties) include both such Indemnified Party or parties and the
Indemnifying Party or an Affiliate of the Indemnifying Party and such
Indemnified Parties, and the Indemnified Parties shall have been advised in
writing by counsel that there may be one or more legal defenses available to
such Indemnified Party or parties that are different from or additional to those
available to the Indemnifying Parties, in which case, if such Indemnified Party
or parties notifies the Indemnifying Parties in writing that it elects to employ
separate counsel at the expense of the Indemnifying Parties, the Indemnifying
Parties shall not have the right to assume the defense thereof and such counsel
shall be at the expense of the Indemnifying Parties, it being understood,
however, that, unless there exists a conflict among Indemnified Parties, the
Indemnifying Parties shall not, in connection with any one such Proceeding or
separate but substantially similar or related Proceedings in the same
jurisdiction, arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of more than one separate firm of
attorneys (together with appropriate local counsel) at any time for such
Indemnified Party or Parties, or for fees and expenses that are not reasonable.
No Indemnified Party or Parties will settle any Proceeding without the consent
of the Indemnifying Party or Parties (but such consent shall not be unreasonably
withheld). No Indemnifying Party shall, without the prior written consent of the
Indemnified Party, effect any settlement of any pending or threatened Proceeding
in respect of which any Indemnified Party is or could have been a party and
indemnity could have been sought hereunder by such Indemnified Party, unless
such settlement includes an unconditional release of such Indemnified Party from
all liability or claims that are the subject of such Proceeding.
Section 7.2. Contribution. If for any reason the indemnification
provided for in Section 7.1 of this Agreement is unavailable to an Indemnified
Party, or insufficient to hold it harmless, in respect of any losses, claims,
damages, liabilities or expenses referred to therein, then each applicable
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 or liabilities in such proportion as is
appropriate to reflect not only the relative benefits received by the
Indemnifying Party on the one hand and the Indemnified Party on the other, but
also the relative fault of the Indemnifying and Indemnified Parties in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Indemnifying and
Indemnified Parties shall be deemed to be in the same proportion as the total
proceeds from the offering of the Notes (net of the Initial Purchasers'
discounts and commissions but before deducting expenses) received by the Company
bear to the total discounts and commissions received by each Initial Purchaser.
The relative fault of the Indemnifying and Indemnified Parties 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 Indemnifying or
Indemnified Parties and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses, claims, damages
and liabilities referred to above shall be deemed to include any legal or other
fees or expenses incurred by such party in connection with investigating or
defending any such claim.
The Company and each of the Initial Purchasers agree that it would not
be just and equitable if contribution pursuant to the immediately preceding
paragraph were determined pro rata or per capita or by any other method of
allocation which does not take into account the equitable considerations
referred to in such paragraph. Notwithstanding any other provision of this
Section 7.2, no Initial Purchaser shall be obligated to make contributions
hereunder that in the aggregate exceed the total discounts, commissions and
other compensation received by such Initial Purchaser under this Agreement, less
the aggregate amount of any damages that such Initial Purchaser has otherwise
been required to pay by reason of the untrue or alleged untrue statements or the
omissions or alleged omissions to state a material fact. 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.
Section 7.3. Registration Rights Agreement. Notwithstanding anything
to the contrary in this Article 7, the indemnification and contribution
provisions of the Registration Rights Agreement shall govern any claim with
respect thereto.
ARTICLE VIII
MISCELLANEOUS
Section 8.1. Survival of Provisions. The representations, warranties
and covenants of the Company and the Initial Purchasers made herein, the
indemnity and contribution agreements contained herein and each of the
provisions of Articles VI, VII and VIII shall remain operative and in full force
and effect regardless of (a) any investigation made by or on behalf of the
Company, any Initial Purchaser or any Indemnified Party, (b) acceptance of any
of the Notes and payment therefor, (c) any termination of this Agreement other
than pursuant to Section 8.2, or (d) disposition of the Notes by the Initial
Purchasers whether by redemption, exchange, sale or otherwise. With respect to
any termination of this Agreement pursuant to Section 8.2, this Agreement and
the obligations contemplated hereby shall terminate without liability to any
party, and no party shall have any continuing obligation hereunder or liability
to any other party hereto, except that each of the provisions of Articles VI,
VII, and VIII shall remain operative and in full force and effect regardless of
any termination pursuant thereto.
Section 8.2. Termination. (a) This Agreement may be terminated in the
sole discretion of the Initial Purchasers by notice to the Company given prior
to the Time of Purchase in the event that the Company shall have failed, refused
or been unable to perform all obligations and satisfy all conditions on their
part to be performed or satisfied hereunder at or prior thereto or, if at or
prior to the Closing:
(i) the Company shall have sustained any loss or interference with
respect to its businesses or properties from fire, flood, hurricane,
accident or other calamity, whether or not covered by insurance, or from
any strike, labor dispute, slow down or work stoppage or any legal or
governmental proceeding, which loss or interference, in the sole judgment
of the Initial Purchasers, has a Material Adverse Effect, or there shall
have been, in the sole judgment of the Initial Purchasers, any event or
development that, individually or in the aggregate, has a Material Adverse
Effect (including without limitation a Change of Control (as defined in the
Indenture)), except in each case as described in the Final Memorandum
(exclusive of any amendment or supplement thereto);
(ii) trading in securities of the Company or in securities generally on
the New York Stock Exchange, American Stock Exchange or the Nasdaq National
Market shall have been suspended or minimum or maximum prices shall have
been established on any such exchange or market;
(iii) a banking moratorium shall have been declared by New York or
United States authorities;
(iv) there shall have been (A) an outbreak or escalation of hostilities
between the United States and any foreign power, or (B) an outbreak or
escalation of any other insurrection or armed conflict involving the United
States or any other national or international calamity or emergency, or (C)
any material change in the financial markets of the United States which, in
the case of (A), (B) or (C) above and in the sole judgment of the Initial
Purchasers, makes it impracticable or inadvisable to proceed with the
offering or the delivery of the Notes as contemplated by the Final
Memorandum; or
(v) any securities of the Company shall have been downgraded or placed
on any "watch list" for possible downgrading by any nationally recognized
statistical rating organization.
(b) Termination of this Agreement pursuant to this Section 8.2 shall
be without liability of any party to any other party except as provided in
Section 8.1 hereof.
Section 8.3. No Waiver; Modifications in Writing. No failure or delay
on the part of the Company or either Initial Purchaser in exercising any right,
power or remedy hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right, power or remedy preclude any other
or further exercise thereof or the exercise of any other right, power or remedy.
The remedies provided for herein are cumulative and are not exclusive of any
remedies that may be available to the Company or any Initial Purchaser at law or
in equity or otherwise. No waiver of or consent to any departure by the Company
from any provision of this Agreement shall be effective unless signed in writing
by the party hereto entitled to the benefit thereof, provided that notice of any
such waiver shall be given to each party hereto as set forth below. Except as
otherwise provided herein, no amendment, modification or termination of any
provision of this Agreement shall be effective unless signed in writing by or on
behalf of each of the Company and each Initial Purchaser. Any amendment,
supplement or modification of or to any provision of this Agreement, any waiver
of any provision of this Agreement, and any consent to any departure by the
Company from the terms of any provision of this Agreement, shall be effective
only in the specific instance and for the specific purpose for which made or
given. Except where notice is specifically required by this Agreement, no notice
to or demand on the Company in any case shall entitle the Company to any other
or further notice or demand in similar or other circumstances.
Section 8.4. Information Supplied by the Initial Purchasers. The
statements set forth and in the fourth and fifth sentences of the sixth
paragraph and the eighth paragraph under the heading "Plan of Distribution" in
the Final Memorandum (to the extent such statements relate to the Initial
Purchasers) constitute the only information furnished by the Initial Purchasers
to the Company for the purposes of Sections 3.1(a) and 7.1(a) and (b) hereof.
Section 8.5. Communications. All notices, demands
and other communications provided for hereunder shall be in
writing, and, (a) if to the Initial Purchasers, shall be given
by registered or certified mail, return receipt requested,
telex, telegram, telecopy, courier service or personal
delivery, addressed to CIBC Oppenheimer Corp., 425 Lexington
Avenue, 3rd floor, New York, New York 10017, and NationsBanc
Montgomery Securities LLC, 9 West 57th Street, 43rd Floor, New
York, NY 10019, with a copy to Cahill Gordon & Reindel, 80
Pine Street, New York, New York 10005, Attention: Geoffrey E.
Liebmann, Esq. and (b) if to the Company, shall be given by
similar means to United Industries Corporation, 8825 Page
Boulevard, P.O. Box 15842, St. Louis, Missouri 63114, Attn:
Chief Financial Officer, with copies to Kirkland & Ellis, 200
East Randolph Drive, Chicago, IL 60601, Attention: Carter W.
Emerson, P.C. and to Thomas H. Lee Company, 75 State Street,
26th Floor, Boston, MA 02109, Attention: C. Hunter Boll. In
each case notices, demands and other communications shall be
deemed given when received.
Section 8.6. Execution in Counterparts. This Agreement may be executed
in any number of counterparts and by different parties hereto on separate
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed to be an original and all of which counterparts, taken together, shall
constitute but one and the same Agreement.
Section 8.7. Successors. This Agreement shall inure to the benefit of
and be binding upon the Initial Purchasers, the Company and their respective
successors and legal representatives, and nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any other Person any legal
or equitable right, remedy or claim under or in respect of this Agreement, or
any provisions herein contained; this Agreement and all conditions and
provisions hereof being intended to be and being for the sole and exclusive
benefit of such Persons and for the benefit of no other Person except that (i)
the indemnities of the Company contained in Section 7.1(a) of this Agreement
shall also be for the benefit of the directors, officers, employees and agents
of the Initial Purchasers and any Person or Persons who control the Initial
Purchasers within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act and (ii) the indemnities of the Initial Purchasers contained in
Section 7.1(b) of this Agreement shall also be for the benefit of the Company,
its directors, officers, employees and agents and any Person or Persons who
control the Company within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act. No purchaser of Notes from the Initial Purchasers will be
deemed a successor because of such purchase.
Section 8.8. Governing Law. THIS AGREEMENT SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK, AND FOR ALL PURPOSES
SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF SAID STATE, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW.
Section 8.9. Severability of Provisions. Any provision of this
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
Section 8.10. Headings. The Article and Section
headings and Table of Contents used or contained in this
Agreement are for convenience of reference only and shall not
affect the construction of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first written above.
UNITED INDUSTRIES CORPORATION
By:
Name:
Title:
CIBC OPPENHEIMER CORP.
By:
Name:
Title:
NATIONSBANC MONTGOMERY
SECURITIES LLC
By:
Name:
Title:
SCHEDULE I
Principal Amount
at Maturity
Initial Purchaser of Notes
CIBC Oppenheimer Corp. $90,000,000
Nationsbanc Montgomery Securities LLC 60,000,000
Total $150,000,000
Exhibit A
Form of Opinion of Kirkland & Ellis
[To be supplied by Kirkland & Ellis]