SIGNATURES
Pursuant to the requirements of the Securities Act, the Company certifies
that it has reasonable grounds to believe that it meets all of the requirements
for filing on Form S-3 and has duly caused this Amendment No. 1 to the
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in Madison, Wisconsin on May 13, 1998.
RAYOVAC CORPORATION
By: /s/ James A. Broderick
-------------------------------
Name: James A. Broderick
Title: Vice President, General Counsel
and Secretary
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities indicated on May 13, 1998.
Signature Title
- ------------------------------- ----------------------------------------------------
* Chairman of the Board and Chief Executive Officer
- ----------------------------- (Principal Executive Officer)
David A. Jones
* President and Chief Operating Officer and Director
- -----------------------------
Kent J. Hussey
* President/International and Contract MicroPower
- ----------------------------- and Director
Roger F. Warren
* Executive Vice President of Operations and Director
- -----------------------------
Trygve Lonnebotn
* Director
- -----------------------------
Scott A. Schoen
* Director
- -----------------------------
Thomas R. Shepherd
* Director
- -----------------------------
Warren C. Smith, Jr.
/s/ Randall J. Steward Senior Vice President of Finance and
- ----------------------------- Chief Financial Officer
Randall J. Steward (Principal Financial and Accounting Officer)
*By /s/ James A. Broderick
-------------------------
James A. Broderick
Attorney-in-fact
II-4
================================================================================
RAYOVAC CORPORATION
(a Wisconsin corporation)
5,200,000 Shares of Common Stock
U.S. PURCHASE AGREEMENT
-----------------------
Dated: May ____, 1998
================================================================================
Table of Contents
Page
----
U.S. PURCHASE AGREEMENT......................................................................1
SECTION 1. Representations and Warranties...............................................3
(a) Representations and Warranties by the Company...................................3
(i) Compliance with Registration Requirements................................3
(ii) Independent Accountants.................................................4
(iii) Financial Statements...................................................4
(iv) No Material Adverse Change in Business..................................5
(v) Good Standing of the Company.............................................5
(vi) Good Standing of Subsidiaries...........................................5
(vii) Capitalization.........................................................6
(viii) Authorization of Agreement............................................6
(ix) Authorization and Description of Securities.............................6
(x) Absence of Defaults and Conflicts........................................6
(xi) Absence of Labor Dispute................................................7
(xii) Absence of Proceedings.................................................7
(xiii) Accuracy of Exhibits..................................................7
(xiv) Possession of Intellectual Property....................................8
(xv) Absence of Further Requirements.........................................8
(xvi) Possession of Licenses and Permits.....................................8
(xvii) Title to Property.....................................................8
(xviii) Investment Company...................................................9
(xix) Environmental Laws.....................................................9
(xx) Registration Rights....................................................10
(xxi) Stabilization or Manipulation.........................................10
(xxii) Accounting Controls..................................................10
(xxiii) Tax Returns.........................................................10
(xxiv) No Association with NASD.............................................10
(b) Representations and Warranties by the Selling Shareholders.....................11
(i) Accurate Disclosure by Selling Shareholders............................11
(ii) Authorization of Agreements...........................................11
(iii) Valid Title..........................................................12
(iv) Due Execution of Power of Attorney and Custody Agreement..............12
(v) Absence of Manipulation................................................12
(vi) Absence of Further Requirements.......................................12
(vii) Certificates Suitable for Transfer...................................12
(viii) Irrevocable Obligations.............................................13
(ix) No Association with NASD..............................................13
(x) Power and Authority....................................................13
(c) Officer's Certificates.........................................................14
-i-
SECTION 2. Sale and Delivery to U.S. Underwriters; Closing...........................14
(a) Initial Securities...........................................................14
(b) Option Securities............................................................14
(c) Payment......................................................................15
(d) Denominations; Registration..................................................15
SECTION 3. Covenants of the Company..................................................15
(a) Compliance with Securities Regulations and Commission Requests...............15
(b) Filing of Amendments.........................................................16
(c) Delivery of Registration Statements..........................................16
(d) Delivery of Prospectuses.....................................................16
(e) Continued Compliance with Securities Laws....................................17
(f) Blue Sky Qualifications......................................................17
(g) Rule 158.....................................................................17
(h) Restriction on Sale of Securities............................................17
(i) Reporting Requirements.......................................................18
SECTION 4. Payment of Expenses.......................................................18
(a) Expenses.....................................................................18
(b) Expenses of the Selling Shareholders.........................................18
(c) Termination of Agreement.....................................................18
(d) Allocation of Expenses.......................................................19
SECTION 5. Conditions of U.S. Underwriters' Obligations..............................19
(a) Effectiveness of Registration Statement......................................19
(b) Opinion of Counsel for Company and the Selling Shareholders..................19
(c) Opinion of Counsel for U.S. Underwriters.....................................19
(d) Officers' Certificate........................................................20
(e) Selling Shareholders' Certificate............................................20
(f) Accountant's Comfort Letters.................................................20
(g) Bring-down Comfort Letters...................................................20
(h) No Objection.................................................................21
(i) Lock-up Agreement............................................................21
(j) Purchase of Initial International Securities.................................21
(k) Custody Agreement............................................................21
(l) Conditions to Purchase of U.S. Option Securities.............................21
(m) Additional Documents.........................................................22
(n) Termination of Agreement.....................................................22
SECTION 6. Indemnification...........................................................23
(a) Indemnification of U.S. Underwriters by the Company..........................23
(b) Indemnification of U.S. Underwriters by the Selling Shareholders.............24
-v-
(c) Indemnification of Company, Directors and Officers and Selling Shareholders..25
(d) Actions against Parties; Notification........................................25
(e) Settlement without Consent if Failure to Reimburse...........................26
(f) Other Agreements with Respect to Indemnification.............................26
SECTION 7. Contribution..............................................................26
SECTION 8. Representations, Warranties and Agreements to Survive Delivery............28
SECTION 9. Termination of Agreement..................................................28
(a) Termination; General.........................................................28
(b) Liabilities..................................................................29
SECTION 10. Default by One or More of the U.S. Underwriters..........................29
SECTION 11. Notices..................................................................29
SECTION 12. Parties..................................................................30
SECTION 13. Governing Law and Time...................................................30
SECTION 14. Effect of Headings.......................................................30
SECTION 15. Counterparts.............................................................30
-v-
SCHEDULES
SCHEDULE A LIST OF UNDERWRITERS
SCHEDULE B LIST OF SELLING SHAREHOLDERS
SCHEDULE B-1 LIST OF OVER-ALLOTMENT SELLING SHAREHOLDERS
SCHEDULE C PRICING INFORMATION
SCHEDULE D LIST OF PERSONS AND ENTITIES SUBJECT TO LOCK-UP
SCHEDULE E LIST OF SUBSIDIARIES OF THE COMPANY
EXHIBIT A-1 FORM OF OPINION OF COMPANY'S GENERAL COUNSEL
EXHIBIT A-2 FORM OF OPINION OF COMPANY'S COUNSEL
EXHIBIT A-3 FORM OF OPINION OF COUNSEL OF SELLING SHAREHOLDERS
EXHIBIT A-4 FORM OF OPINION OF COUNSEL OF CATEGORY 2 SELLING SHAREHOLDERS
EXHIBIT B FORM OF LOCK-UP LETTER
EXHIBIT C-1 FORM OF COMFORT LETTER OF KPMG PEAT MARWICK LLP
EXHIBIT C-2 FORM OF COMFORT LETTER OF COOPERS & LYBRAND LLP
-v-
RAYOVAC CORPORATION
(a Wisconsin corporation)
5,200,000 Shares of Common Stock
(Par Value $0.01 Per Share)
U.S. PURCHASE AGREEMENT
-----------------------
May ___, 1998
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Bear, Stearns & Co. Inc.
Donaldson, Lufkin & Jenrette Securities Corporation
Smith Barney Inc.
as U.S. Representatives of the several U.S. Underwriters
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
Rayovac Corporation, a Wisconsin corporation (the "Company"), and the
persons listed on Schedule B hereto (collectively, the "Selling Shareholders")
confirm their respective agreements with Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated ("Merrill Lynch") and each of the other U.S.
Underwriters named in Schedule A hereto (collectively, the "U.S. Underwriters,"
which term shall also include any underwriter substituted as hereinafter
provided in Section 10 hereof), for whom Merrill Lynch, Bear, Stearns & Co.
Inc., Donaldson, Lufkin & Jenrette Securities Corporation and Smith Barney Inc.
are acting as representatives (in such capacity, the "U.S. Representatives"),
with respect to (i) the sale by the Selling Shareholders and the purchase by the
U.S. Underwriters, acting severally and not jointly, of the number of shares of
Common Stock, par value $0.01 per share, of the Company ("Common Stock") set
forth in Schedule A hereto and (ii) the grant by the Selling Shareholders,
listed on Schedule B-1 hereto, acting severally and not jointly, to the U.S.
Underwriters, acting severally and not jointly, of the option described in
Section 2(b) hereof to purchase all or any part
of 780,000 additional shares of Common Stock to cover over-allotments, if any.
The aforesaid 5,200,000 shares of Common Stock (the "Initial U.S. Securities")
to be purchased by the U.S. Underwriters, and all or any part of the 780,000
shares of Common Stock subject to the option described in Section 2(b) hereof
(the "U.S. Option Securities"), are hereinafter called, collectively, the "U.S.
Securities."
It is understood that the Company is concurrently entering into an
agreement dated the date hereof (the "International Purchase Agreement")
providing for the offering by the Selling Shareholders of an aggregate of
1,300,000 shares of Common Stock (the "Initial International Securities")
through arrangements with certain underwriters outside the United States and
Canada (the "International Managers") for which Merrill Lynch International,
Bear, Stearns International Limited, Donaldson, Lufkin & Jenrette Securities
Corporation and Smith Barney Inc. are acting as lead managers (the "Lead
Managers") and the grant by the Selling Shareholders, acting severally and not
jointly, to the International Managers, acting severally and not jointly, of an
option to purchase all or any part of the International Managers' pro rata
portion of up to 195,000 additional shares of Common Stock solely to cover
over-allotments, if any (the "International Option Securities" and, together
with the U.S. Option Securities, the "Option Securities"). The Initial
International Securities and the International Option Securities are hereinafter
called the "International Securities." It is understood that the Selling
Shareholders are not obligated to sell and the U.S. Underwriters are not
obligated to purchase, any Initial U.S. Securities unless all of the Initial
International Securities are contemporaneously purchased by the International
Managers.
The U.S. Underwriters and the International Managers are hereinafter
collectively called the "Underwriters," the Initial U.S. Securities and the
Initial International Securities are hereinafter collectively called the
"Initial Securities," and the U.S. Securities and the International Securities
are hereinafter collectively called the "Securities."
The Underwriters will concurrently enter into an Intersyndicate
Agreement of even date herewith (the "Intersyndicate Agreement") providing for
the coordination of certain transactions among the Underwriters under the
direction of Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated (in such capacity, the "Global Coordinator").
The Company and the Selling Shareholders understand that the U.S.
Underwriters propose to make a public offering of the U.S. Securities as soon as
the U.S. Representatives deem advisable after this Agreement has been executed
and delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-49281), as amended
by Amendment No. 1 thereto, covering the registration of the Securities under
the Securities Act of 1933, as amended (the "1933 Act"), including the related
preliminary prospectus or prospectuses. Promptly after execution and delivery of
this Agreement, the Company will either (i) prepare and file a prospectus in
accordance with the provisions of Rule 430A ("Rule 430A") of the rules and
regulations of the Commission under the 1933 Act (the "1933 Act Regulations")
and paragraph (b) of Rule 424 ("Rule 424(b)") of the 1933 Act Regulations or
(ii) if the Company has elected to rely upon Rule 434 ("Rule 434") of the 1933
Act Regulations, prepare and file a term
-2-
sheet (a "Term Sheet") in accordance with the provisions of Rule 434 and Rule
424(b). Two forms of prospectus are to be used in connection with the offering
and sale of the Securities: one relating to the U.S. Securities (the "Form of
U.S. Prospectus") and one relating to the International Securities (the "Form of
International Prospectus"). The Form of International Prospectus is identical to
the Form of U.S. Prospectus, except for the front cover and back cover pages and
the information under the caption "Underwriting." The information included in
any such prospectus or in any such Term Sheet, as the case may be, that was
omitted from such registration statement at the time it became effective but
that is deemed to be part of such registration statement at the time it became
effective (a) pursuant to paragraph (b) of Rule 430A is referred to as "Rule
430A Information" or (b) pursuant to paragraph (d) of Rule 434 is referred to as
"Rule 434 Information." Each Form of U.S. Prospectus and Form of International
Prospectus used before such registration statement became effective, and any
prospectus that omitted, as applicable, the Rule 430A Information or the Rule
434 Information, that was used after such effectiveness and prior to the
execution and delivery of this Agreement, is herein called a "preliminary
prospectus." Such registration statement, including the exhibits thereto and
schedules thereto at the time it became effective and including the Rule 430A
Information and the Rule 434 Information, as applicable, is herein called the
"Registration Statement." Any registration statement filed pursuant to Rule
462(b) of the 1933 Act Regulations is herein referred to as the "Rule 462(b)
Registration Statement," and after such filing the term "Registration Statement"
shall include the Rule 462(b) Registration Statement. The final Form of U.S.
Prospectus and the final Form of International Prospectus in the forms first
furnished to the Underwriters for use in connection with the offering of the
Securities are herein called the "U.S. Prospectus" and the "International
Prospectus," respectively, and collectively, the "Prospectuses." If Rule 434 is
relied on, the terms "U.S. Prospectus" and "International Prospectus" shall
refer to the preliminary U.S. Prospectus dated May, 1998 and the preliminary
International Prospectus dated May, 1998, respectively, each together with the
applicable Term Sheet, and all references in this Agreement to the date of such
Prospectuses shall mean the date of the applicable Term Sheet. For purposes of
this Agreement, all references to the Registration Statement, any preliminary
prospectus, the U.S. Prospectus, the International Prospectus or any Term Sheet
or any amendment or supplement to any of the foregoing shall be deemed to
include the copy filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval system ("EDGAR").
SECTION 1. Representations and Warranties.
(a)....Representations and Warranties by the Company. The Company
represents and warrants to each U.S. Underwriter as of the date hereof, as of
the Closing Time referred to in Section 2(c) hereof, and as of each Date of
Delivery (if any) referred to in Section 2(b) hereof, and agrees with each U.S.
Underwriter, as follows:
(i) Compliance with Registration Requirements. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or, to
the knowledge of
-3-
the Company, are contemplated by the Commission, and any request on the
part of the Commission for additional information has been complied
with.
At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments thereto
became effective and at the Closing Time (and, if any U.S. Option
Securities are purchased, at the Date of Delivery), the Registration
Statement, the Rule 462(b) Registration Statement and any amendments
and supplements thereto complied and will comply in all material
respects with the requirements of the 1933 Act and the 1933 Act
Regulations and did not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
Neither of the Prospectuses nor any amendments or supplements thereto
(including any prospectus wrapper), at the time the Prospectuses or any
amendments or supplements thereto were issued and at the Closing Time
(and, if any U.S. Option Securities are purchased, at the Date of
Delivery), included or will include, at the aforesaid times, an untrue
statement of a material fact or omitted or will omit, at the aforesaid
times, to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading. If Rule 434 is used, the Company will comply
with the requirements of Rule 434 and the Prospectuses shall not be
"materially different," as such term is used in Rule 434, from the
prospectuses included in the Registration Statement at the time it
became effective. The representations and warranties in this subsection
shall not apply to statements in or omissions from the Registration
Statement or the U.S. Prospectus made in reliance upon and in
conformity with information furnished to the Company in writing by any
Underwriter through the U.S. Representative(s) expressly for use in the
Registration Statement or the U.S. Prospectus or by any International
Manager through the Lead Managers expressly for use in the Registration
Statement or the International Prospectus.
Each preliminary prospectus and the prospectuses filed as part
of the Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the 1933 Act,
complied when so filed in all material respects with the 1933 Act
Regulations and each preliminary prospectus and the Prospectuses
delivered to the Underwriters for use in connection with this offering
was identical to the electronically transmitted copies thereof filed
with the Commission pursuant to EDGAR, except to the extent permitted
by Regulation S-T.
(ii) Independent Accountants. The accountants who certified
the financial statements and supporting schedules included in the
Registration Statement are independent public accountants as required
by the 1933 Act and the 1933 Act Regulations.
(iii) Financial Statements. The historical financial
statements included in the Registration Statement and the Prospectuses,
together with the related schedule and notes, present fairly the
financial position of the Company and its consolidated Subsidiaries (as
defined below) at the dates indicated and the statement of operations,
shareholders' equity and cash flows of the Company and its consolidated
Subsidiaries for the periods
-4-
specified; said financial statements have been prepared in conformity
with generally accepted accounting principles ("GAAP") applied on a
consistent basis throughout the periods involved. The supporting
schedules included in the Registration Statement present fairly in
accordance with GAAP the information required to be stated therein. The
selected financial data and the summary financial information included
in the Prospectuses present fairly the information shown therein and
have been compiled on a basis consistent with that of the audited
financial statements included in the Registration Statement.
(iv) No Material Adverse Change in Business. Since the
respective dates as of which information is given in the Registration
Statement and the Prospectuses, except as otherwise stated therein, (A)
there has been no material adverse change in the condition (financial
or otherwise), earnings, business affairs or business prospects of the
Company and its Subsidiaries considered as one enterprise, whether or
not arising in the ordinary course of business (a "Material Adverse
Effect"), (B) there have been no transactions entered into by the
Company or any of its Subsidiaries, other than those in the ordinary
course of business, which are material with respect to the Company and
its Subsidiaries considered as one enterprise, and (C) there has been
no dividend or distribution of any kind declared, paid or made by the
Company on any class of its capital stock.
(v) Good Standing of the Company. The Company has been duly
organized and is validly existing as a corporation in good standing
under the laws of the State of Wisconsin and has corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectuses and to enter into and perform
its obligations under this Agreement; and the Company is duly qualified
as a foreign corporation to transact business and is in good standing
in each other jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify or to be in
good standing would not result in a Material Adverse Effect.
(vi) Good Standing of Subsidiaries. Each subsidiary of the
Company (each a "Subsidiary" and, collectively, the "Subsidiaries") has
been duly organized and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation where
such legal concepts are recognized, has corporate power and authority
to own, lease and operate its properties and to conduct its business as
described in the Prospectuses and is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason
of the ownership or leasing of property or the conduct of business,
except where the failure so to qualify or to be in good standing would
not result in a Material Adverse Effect; except as otherwise disclosed
in the Registration Statement, all of the issued and outstanding
capital stock of each such Subsidiary has been duly authorized and
validly issued, is fully paid and non-assessable in jurisdictions where
such legal concepts are recognized and is owned by the Company,
directly or through Subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity (except
as set forth in the Registration Statement and except for any director
or member qualifying shares); none of the outstanding shares of capital
stock of any Subsidiary was issued in
-5-
violation of the preemptive or similar rights of any securityholder of
such Subsidiary. The only Subsidiaries of the Company are the
subsidiaries listed on Schedule E hereto and, except for Rayovac Europe
Limited (which represents less than 15% of the assets, liabilities and
earnings of the Company), the Company has no "significant subsidiaries"
as defined in Section 1-02 of Regulation S-X.
(vii) Capitalization. The authorized, issued and outstanding
capital stock of the Company is as set forth in the Prospectuses under
the caption "Capitalization" (except for subsequent issuances, if any,
pursuant to this Agreement, pursuant to reservations, agreements or
employee benefit plans referred to in the Prospectuses or pursuant to
the exercise of convertible securities or options referred to in the
Prospectuses). The shares of issued and outstanding capital stock of
the Company have been and at the Closing Time, including the U.S.
Option Securities to be purchased by the U.S. Underwriters from the
Selling Shareholders, will have been duly authorized and validly issued
and are fully paid and non-assessable, except to the extent such
securities are assessable pursuant to applicable provisions of
Wisconsin law; none of the outstanding shares of capital stock of the
Company was or as of the Closing Time, including the U.S. Option
Securities to be purchased by the U.S. Underwriters from the Selling
Shareholders, will have been or was issued in violation of the
preemptive or other similar rights of any securityholder of the
Company.
(viii) Authorization of Agreement. This Agreement and the
International Purchase Agreement have been duly authorized, executed
and delivered by the Company.
(ix) Authorization and Description of Securities. The
Securities to be purchased by the U.S. Underwriters and the
International Managers from the Selling Shareholders have been duly
authorized for sale to the U.S. Underwriters pursuant to this Agreement
and the International Managers pursuant to the International Purchase
Agreement, respectively; the Common Stock conforms to the descriptions
thereof contained in the Prospectuses or incorporated by reference
therein and such description conforms to the rights set forth in the
instruments defining the same; no holder of the Securities will be
subject to personal liability by reason of being such a holder, except
for certain liabilities pursuant to applicable provisions of Wisconsin
law; and the issuance of the Securities is not subject to the
preemptive or other similar rights of any securityholder of the
Company.
(x) Absence of Defaults and Conflicts. Neither the Company nor
any of its Subsidiaries is in violation of its charter or by-laws or in
default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage,
deed of trust, loan or credit agreement, note, lease or other agreement
or instrument to which the Company or any of its Subsidiaries is a
party or by which it or any of them may be bound, or to which any of
the property or assets of the Company or any Subsidiary is subject
(collectively, "Agreements and Instruments") except for such defaults
that would not result in a Material Adverse Effect; and the execution,
delivery and performance of this Agreement and the International
Purchase Agreement and the consummation of the transactions
contemplated in this
-6-
Agreement, the International Purchase Agreement and in the Registration
Statement and the compliance by the Company with its obligations under
this Agreement and the International Purchase Agreement have been duly
authorized by all necessary corporate action and do not and will not,
whether with or without the giving of notice or passage of time or
both, conflict with or constitute a breach of, or default or Repayment
Event (as defined below) under, or result in the creation or imposition
of any lien, charge or encumbrance upon any property or assets of the
Company or any Subsidiary pursuant to, the Agreements and Instruments
which would reasonably be expected, either singly or in the aggregate,
to result in a Material Adverse Effect, nor will such action result in
any violation of any applicable law, statute, rule, regulation,
judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over
the Company or any Subsidiary or any of their assets, properties or
operations, nor will such action result in any violation of the
provisions of the charter or by-laws of the Company or any Subsidiary.
As used herein, a "Repayment Event" means any event or condition which
gives the holder of any note, debenture or other evidence of
indebtedness (or any person acting on such holder's behalf) the right
to require the repurchase, redemption or repayment of all or a portion
of such indebtedness by the Company or any Subsidiary.
(xi) Absence of Labor Dispute. Except as described in the
Registration Statement with respect to the renegotiation of collective
bargaining agreements, no labor dispute with the employees of the
Company or any Subsidiary exists or, to the knowledge of the Company,
is imminent, and the Company is not aware of any existing or imminent
labor disturbance by the employees of any of its or any Subsidiary's
principal suppliers, manufacturers, customers, dealers or contractors,
which, in either case, may reasonably be expected to result in a
Material Adverse Effect.
(xii) Absence of Proceedings. There is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Company, threatened, against or affecting the
Company or any Subsidiary, which is required to be disclosed in the
Registration Statement (other than as disclosed therein), or which
might reasonably be expected to result in a Material Adverse Effect, or
which might reasonably be expected to materially and adversely affect
the properties or assets thereof or the consummation of the
transactions contemplated in this Agreement and the International
Purchase Agreement or the performance by the Company of its obligations
hereunder or thereunder; the aggregate of all pending legal or
governmental proceedings to which the Company or any Subsidiary is a
party or of which any of their respective property or assets is the
subject which are not described in the Registration Statement,
including ordinary routine litigation incidental to the business of the
Company and its Subsidiaries would not reasonably be expected to result
in a Material Adverse Effect.
(xiii) Accuracy of Exhibits. There are no contracts or
documents which are required to be described in the Registration
Statement or the Prospectuses or to be filed as exhibits thereto which
have not been so described or filed or incorporated by reference as
required.
-7-
(xiv) Possession of Intellectual Property. Except as described
in the Registration Statement, the Company and its Subsidiaries own or
possess the right to utilize, or can acquire on reasonable terms,
adequate patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks, trade names or other
intellectual property (collectively, "Intellectual Property") necessary
to carry on the business now operated by them, and neither the Company
nor any of its Subsidiaries has received any notice or is otherwise
aware of any infringement of or conflict with asserted rights of others
with respect to any Intellectual Property or of any facts or
circumstances which would render any Intellectual Property invalid or
inadequate to protect the interest of the Company or any of its
Subsidiaries therein, and which infringement or conflict (if the
subject of any unfavorable decision, ruling or finding) or invalidity
or inadequacy, singly or in the aggregate, would result in a Material
Adverse Effect.
(xv) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency is necessary or required for the performance by the Company of
its obligations hereunder, in connection with the offering or sale of
the Securities under this Agreement and the International Purchase
Agreement or the consummation of the transactions contemplated by this
Agreement and the International Purchase Agreement, except such as have
been already obtained or as may be required under the 1933 Act or the
1933 Act Regulations and foreign or state securities or blue sky laws
or the rules or regulations of the NASD.
(xvi) Possession of Licenses and Permits. The Company and its
Subsidiaries possess such permits, licenses, approvals, consents and
other authorizations (collectively, "Governmental Licenses") issued by
the appropriate federal, state, local or foreign regulatory agencies or
bodies necessary to conduct the business now operated by them except
where the failure to possess the same would not, singly or in the
aggregate have a Material Adverse Effect; the Company and its
Subsidiaries are in compliance with the terms and conditions of all
such Governmental Licenses, except where the failure so to comply would
not, singly or in the aggregate, have a Material Adverse Effect; all of
the Governmental Licenses are valid and in full force and effect,
except when the invalidity of such Governmental Licenses or the failure
of such Governmental Licenses to be in full force and effect would not
have a Material Adverse Effect; and neither the Company nor any of its
Subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses which,
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would result in a Material Adverse Effect.
(xvii) Title to Property. The Company and its Subsidiaries
have good and marketable title to all real property owned by the
Company and its Subsidiaries and good title to all other properties
owned by them, in each case, free and clear of all mortgages, pledges,
liens, security interests, claims, restrictions or encumbrances of any
kind except such as (a) are described in the Prospectuses or (b) do
not, singly or in the aggregate,
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materially affect the value of such property and do not interfere with
the use made and proposed to be made of such property by the Company or
any of its Subsidiaries or (c) would not reasonably be expected to
result in a Material Adverse Effect; and all of the leases and
subleases material to the business of the Company and its Subsidiaries,
considered as one enterprise, and under which the Company or any of its
Subsidiaries holds properties described in the Prospectuses, are in
full force and effect, and neither the Company nor any Subsidiary has
any notice of any claim of any sort that has been asserted by anyone
adverse to the rights of the Company or any Subsidiary under any of the
leases or subleases mentioned above, or affecting or questioning the
rights of the Company or such Subsidiary to the continued possession of
the leased or subleased premises under any such lease or sublease which
would reasonably be expected to result in a Material Adverse Effect.
(xviii) Investment Company Act. The Company is not, and upon
the sale of the Securities as herein contemplated will not be, an
"investment company" or an entity "controlled" by an "investment
company" as such terms are defined in the Investment Company Act of
1940, as amended (the "1940 Act").
(xix) Environmental Laws. Except as described in the
Registration Statement or except as would not, singly or in the
aggregate, result in a Material Adverse Effect, (A) neither the Company
nor any of its Subsidiaries is in violation of any federal, state,
local or foreign statute, law, rule, regulation, ordinance, code,
policy or rule of common law or any judicial or administrative
interpretation thereof, including any judicial or administrative order,
consent decree or judgment, relating to pollution or protection of
human health, the environment (including, without limitation, ambient
air, surface water, groundwater, land surface or subsurface strata) or
wildlife, including, without limitation, laws and regulations relating
to the release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum
or petroleum products (collectively, "Hazardous Materials") or to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials (collectively,
"Environmental Laws"), (B) the Company and its Subsidiaries have all
permits, licenses, authorizations and approvals currently required for
their respective businesses and for the businesses contemplated to be
conducted upon consummation of the offering of the Securities under any
applicable Environmental Laws and are each in compliance with their
requirements, (C) there are no pending or threatened administrative,
regulatory or judicial actions, suits, demands, demand letters, claims,
liens, notices of noncompliance or violation, investigation or
proceedings relating to any Environmental Law against the Company or
any of its Subsidiaries and (D) there are no events, facts or
circumstances that might reasonably be expected to form the basis of
any liability or obligation of the Company or any of its Subsidiaries,
including, without limitation, any order, decree, plan or agreement
requiring clean-up or remediation, or any action, suit or proceeding by
any private party or governmental body or agency, against or affecting
the Company or any of its Subsidiaries relating to any Hazardous
Materials or any Environmental Laws.
-9-
(xx) Registration Rights. Except for those persons (i) set
forth on Schedule B hereto or (ii) who have waived any such rights,
there are no persons with registration rights or other similar rights
to have any securities registered pursuant to the Registration
Statement under the 1933 Act. Except as described in the Registration
Statement, there are no persons with registration rights or other
similar rights to have any securities registered by the Company under
the 1933 Act.
(xxi) Stabilization or Manipulation. Neither the Company nor
any of its officers, directors or controlling persons has taken,
directly or indirectly, any action designed to cause or to result in,
or that has constituted or which might reasonably be expected to
constitute, the stabilization or manipulation of the price of any
security of the Company to facilitate the sale of the Securities.
(xxii) Accounting Controls. The Company and its Subsidiaries
maintain a system of internal accounting controls sufficient to provide
reasonable assurances that (A) transactions are executed in accordance
with management's general or specific authorization; (B) transactions
are recorded as necessary to permit preparation of financial statements
in conformity with generally accepted accounting principles and to
maintain accountability for assets; (C) access to assets is permitted
only in accordance with management's general or specific authorization;
and (D) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(xxiii) Tax Returns. The Company and its Subsidiaries have
filed all federal, state, local and foreign tax returns that are
required to have been filed by them pursuant to applicable foreign,
federal, state, local or other law or have duly requested extensions
thereof, except insofar as the failure to file such returns or request
such extensions would not reasonably be expected to result in a
Material Adverse Effect, and has paid all taxes due pursuant to such
returns or pursuant to any assessment received by the Company and its
Subsidiaries, except for such taxes or assessments, if any, as are
being contested in good faith and as to which adequate reserves have
been provided or where the failure to pay would not reasonably be
expected to result in a Material Adverse Effect. The charges, accruals
and reserves on the books of the Company in respect of any income and
corporation tax liability of the Company and each Subsidiary for any
years not finally determined are adequate to meet any assessments or
re-assessments for additional income tax for any years not finally
determined, except to the extent of any inadequacy that would not
reasonably be expected to result in a Material Adverse Effect.
(xxiv) No Association with NASD. Neither the Company nor any
of its affiliates (within the meaning of NASD Conduct Rule
2720(b)(1)(a)) directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common
control with, or is an associated person (within the meaning of Article
I, Section 1(q) of the By-laws of the National Association of
Securities Dealers, Inc.), of any member firm of the National
Association of Securities Dealers, Inc., other than as described on an
appendix to a Selling Shareholders' Power of Attorney and Custody
Agreement (as defined herein).
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(b) Representations and Warranties by the Selling Shareholders. Each
Selling Shareholder, severally and not jointly, represents and warrants to each
U.S. Underwriter as of the date hereof, and, if such Selling Shareholder is
selling U.S. Option Securities on a Date of Delivery, as of each such Date of
Delivery, and agrees with each U.S. Underwriter, as follows:
(i) Accurate Disclosure by Selling Shareholders. (A) The
information furnished in writing by or on behalf of such Selling
Shareholder listed on Schedule B hereto expressly for use in the
Registration Statement and any amendments or supplements thereto does
not contain an untrue statement of a material fact with respect to such
Selling Shareholder or omit to state a material fact with respect to
such Selling Shareholder required to be stated therein or necessary to
make the statements regarding the Selling Shareholder therein not
misleading and (B) the information furnished in writing by or on behalf
of such Selling Shareholder expressly for use in the Prospectus does
not include an untrue statement of a material fact with respect to such
Selling Shareholder or omit to state a material fact with respect to
such Selling Shareholder necessary in order to make the statements
regarding the Selling Shareholder therein, in the light of the
circumstances under which they were made, not misleading.
(ii) Authorization of Agreements. Such Selling Shareholder has
the full right, power and authority to enter into this Agreement and
the Irrevocable Power of Attorney and Custody Agreement (the "Power of
Attorney and Custody Agreement") with Firstar Trust Company, as
custodian (the "Custodian"), and the attorneys-in-fact named therein
(each an "Attorney-in-Fact"), and to sell, transfer and deliver the
Securities to be sold by such Selling Shareholder hereunder. The
execution and delivery of this Agreement and the Power of Attorney and
Custody Agreement and the sale and delivery of the Securities to be
sold by such Selling Shareholder and the consummation of the
transactions contemplated herein and compliance by such Selling
Shareholder with its obligations hereunder have been duly authorized by
such Selling Shareholder and do not and will not, whether with or
without the giving of notice or passage of time or both, conflict with
or constitute a breach of, or default under, or result in the creation
or imposition of any tax, lien, charge or encumbrance upon the
Securities to be sold by such Selling Shareholder or any property or
assets of such Selling Shareholder pursuant to any contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, license, lease
or other agreement or instrument to which such Selling Shareholder is a
party or by which such Selling Shareholder may be bound, or to which
any of the property or assets of such Selling Shareholder is subject
(except for such conflicts, breaches or defaults or liens, charges or
encumbrances that would not result in a material adverse change in the
condition (financial or otherwise), earnings, business affairs or
business prospects of such Selling Shareholder (a "Selling Shareholder
Material Adverse Effect"), whether or not arising in the ordinary
course of business), nor will such action result in any violation of
the provisions of the charter or by-laws or other organizational
instrument of such Selling Shareholder, if applicable, or any
applicable treaty, law, statute, rule, regulation, judgment, order,
writ or decree of any government, government instrumentality or court,
domestic or foreign, having jurisdiction over such Selling Shareholder
or any of its properties which would reasonably be expected, either
singly or in the aggregate, to result in a Selling Shareholder Material
Adverse Effect.
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(iii) Valid Title. Such Selling Shareholder has on the date
hereof and will at the Closing Time and on the Date of Delivery have
good and valid title to the U.S. Securities to be sold by such Selling
Shareholder hereunder, free and clear of any security interest,
mortgage, pledge, lien, charge, claim, equity or encumbrance of any
kind, other than pursuant to this Agreement; and upon delivery of such
U.S. Securities and payment of the purchase price therefor as herein
contemplated, assuming each such Underwriter has no notice of any
adverse claim as such term is used in the Uniform Commercial Code, each
of the Underwriters will receive valid title to the U.S. Securities
purchased by it from such Selling Shareholder, free and clear of any
security interest, mortgage, pledge, lien, charge, claim, equity or
encumbrance of any kind.
(iv) Due Execution of Power of Attorney and Custody Agreement.
Each such Selling Shareholder has duly executed and delivered a Power
of Attorney and Custody Agreement; the Custodian is authorized by each
such Selling Shareholder to deliver the U.S. Securities to be sold by
such Selling Shareholder hereunder and to accept payment therefor; and
each Attorney-in-Fact named in the Power of Attorney and Custody
Agreement executed by such Selling Shareholder is authorized by such
Selling Shareholder to execute and deliver this Agreement and the
certificate referred to in Section 5(e) of this Agreement or that may
be required pursuant to Sections 5(m) or 5(n) of this Agreement on
behalf of such Selling Shareholder, to sell, assign and transfer to the
U.S. Underwriters the U.S. Securities to be sold by such Selling
Shareholder hereunder, to determine the purchase price to be paid by
the U.S. Underwriters to such Selling Shareholder, as provided in
Section 2(a) hereof, to authorize the delivery of the Securities to be
sold by such Selling Shareholder hereunder, to accept payment therefor,
and otherwise to act on behalf of such Selling Shareholder in
connection with this Agreement.
(v) Absence of Manipulation. Such Selling Shareholder has not
taken, and will not take, directly or indirectly, any action which is
designed to or which has constituted or which might reasonably be
expected to cause or result in stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale
of the Securities.
(vi) Absence of Further Requirements. No filing with, or
consent, approval, authorization, order, registration, qualification or
decree of, any court or governmental authority or agency, domestic or
foreign, is necessary or required for the performance by each such
Selling Shareholder of their obligations hereunder or in the Power of
Attorney and Custody Agreement, or in connection with the sale and
delivery of the U.S. Securities being sold by each such Selling
Shareholder hereunder or the consummation of the transactions
contemplated by this Agreement, except such as may have previously been
made or obtained or as may be required under the 1933 Act or the 1933
Act Regulations or state or foreign securities laws or under the rules
of the NASD.
(vii) Certificates Suitable for Transfer. Certificates for all
of the U.S. Securities to be sold by such Selling Shareholder pursuant
to this Agreement, in suitable form for transfer by delivery or
accompanied by duly executed instruments of transfer or assignment in
blank with signatures guaranteed, have been placed in custody with the
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Custodian with irrevocable conditional instructions to deliver such
U.S. Securities to the U.S. Underwriters pursuant to this Agreement.
(viii) Irrevocable Obligations. The U.S. Securities
represented by the Certificates held in custody for such holder under
the Custody Agreement are subject to the interests of the U.S.
Underwriters hereunder; the arrangements made by such holder for such
custody, and the appointment by such holder of the Attorneys-in-fact by
the Power of Attorney and Custody Agreement, are to that extent
irrevocable; the obligations of such holder hereunder shall not be
terminated, except as provided in the Agreement or in the Power of
Attorney, by operation of law, whether by the death or incapacity of
any individual Selling Shareholder or, in the case of an estate or
trust, by the death or incapacity of any executor or trustee or the
termination of such trust estate or trust, or in the case of a
partnership or corporation, by the dissolution of such partnership or
corporation, or by the occurrence of any other event, if any individual
Selling Shareholder or any such executor or trustee should die or
become incapacitated, or if any such estate or trust should be
terminated, or any such partnership or corporation should be dissolved,
or if any other event should occur, before the delivery of the U.S.
Securities hereunder, certificates representing the U.S. Securities
shall be delivered by or on behalf of such holder in accordance with
the terms and conditions of this Agreement and of the Power of Attorney
and Custody Agreement; and actions taken by the Attorney-in-Fact
pursuant to the Powers of Attorney shall be as valid as if such death,
incapacity, termination, dissolution or other event had not occurred,
regardless of whether or not the Custodian, Attorney-in-Fact, or any of
them, shall have received notice of such death, incapacity,
termination, dissolution or other event.
(ix) No Association with NASD. Neither such Selling
Shareholder nor any of its affiliates (within the meaning of NASD
Conduct Rule 2720(b)(1)(a)) directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common
control with, or is an associated person (within the meaning of Article
I, Section 1(q) of the By-laws of the National Association of
Securities Dealers, Inc.), of, any member firm of the National
Association of Securities Dealers, Inc., other than as described on an
appendix to the Power of Attorney and Custody Agreement to which such
Selling Shareholder is a party.
(x) Power and Authority. If such Selling Shareholder is a
corporation, partnership or trust, such Selling Shareholder has been
duly organized or incorporated and is validly existing as a corporation
or partnership or limited partnership in good standing under the laws
of its jurisdiction of incorporation or organization, if applicable,
and has the power and authority to own its property and to conduct its
business and is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business or
its ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be in good
standing would not result in a Selling Shareholder Material Adverse
Effect, whether or not arising in the ordinary course of business, or
materially impair its ability to consummate the transactions
contemplated hereby.
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(c) Officer's Certificates. Any certificate signed by any officer of
the Company or any of its Subsidiaries delivered to the Global Coordinator, the
U.S. Representatives or to counsel for the U.S. Underwriters shall be deemed a
representation and warranty by the Company to each U.S. Underwriter as to the
matters covered thereby; and any certificate signed by or on behalf of any
Selling Shareholder as such or such Selling Shareholder's Attorney-in-Fact and
delivered to the U.S. Representatives or to counsel for the U.S. Underwriters
pursuant to the terms of this Agreement shall be deemed a representation and
warranty by such Selling Shareholder, as the case may be, to the U.S.
Underwriters as to the matters covered thereby.
SECTION 2. Sale and Delivery to U.S. Underwriters; Closing.
(a) Initial Securities. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Selling Shareholders agree to sell to each U.S. Underwriter,
severally and not jointly, to the extent indicated on Schedule A hereto, and
each U.S. Underwriter, severally and not jointly, agrees to purchase from the
Selling Shareholders, at the price per share set forth in Schedule C, the
proportion of the number of Initial U.S. Securities being sold by each Selling
Shareholder set forth in Schedule B opposite the name of each Selling
Shareholder which the number of U.S. Securities set forth in Schedule A opposite
the name of such U.S. Underwriter (plus any additional number of Initial U.S.
Securities which such Underwriter may become obligated to purchase pursuant to
the provisions of Section 10 hereof) bears to the total number of U.S.
Securities, in each case, with such adjustments among the U.S. Underwriters as
the Global Coordinator in its sole discretion shall make to eliminate any sales
or purchases of fractional securities.
(b) Option Securities. In addition, on the basis of the representations
and warranties herein contained and subject to the terms and conditions herein
set forth, the Selling Shareholders, severally and not jointly, hereby grant an
option to the U.S. Underwriters, severally and not jointly, to purchase up to an
additional 780,000 shares of Common Stock, to the extent indicated on Schedule
B-1, at the price per share set forth in Schedule C, less an amount per share
equal to any dividends or distributions declared by the Company and payable on
the Initial U.S. Securities but not payable on the U.S. Option Securities. The
option hereby granted will expire 30 days after the date hereof and may be
exercised in whole or in part from time to time only for the purpose of covering
over-allotments which may be made in connection with the offering and
distribution of the Initial U.S. Securities upon notice by the Global
Coordinator to the Selling Shareholders setting forth the number of U.S. Option
Securities as to which the several U.S. Underwriters are then exercising the
option and the time and date of payment and delivery for such U.S. Option
Securities. Any such time and date of delivery for the U.S. Option Securities (a
"Date of Delivery") shall be determined by the Global Coordinator, but shall not
be later than seven full business days after the exercise of said option, nor in
any event prior to the Closing Time, as hereinafter defined. If the option is
exercised as to all or any portion of the U.S. Option Securities, each of the
U.S. Underwriters, acting severally and not jointly, will purchase that
proportion of the total number of U.S. Option Securities then being purchased
which the number of Initial U.S. Securities set forth in Schedule A opposite the
name of such U.S. Underwriter bears to the total number of Initial U.S.
Securities, subject in each case to such adjustments as the Global Coordinator
in its discretion shall make to eliminate any sales or purchases of fractional
shares.
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(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of Fried,
Frank, Harris, Shriver & Jacobson, 1 New York Plaza, New York, New York 10004,
or at such other place as shall be agreed upon by the Global Coordinator and the
Company, at 9:00 A.M. (Eastern time) on the third (fourth, if the pricing occurs
after 4:30 P.M. (Eastern time) on any given day) business day after the date
hereof (unless postponed in accordance with the provisions of Section 10), or
such other time not later than ten business days after such date as shall be
agreed upon by the Global Coordinator and the Selling Shareholders or the
Attorneys-in-Fact on behalf of the Selling Shareholders (such time and date of
payment and delivery being herein called "Closing Time").
In addition, in the event that any or all of the U.S. Option Securities
are purchased by the U.S. Underwriters, payment of the purchase price for, and
delivery of certificates for, such U.S. Option Securities shall be made at the
above-mentioned offices, or at such other place as shall be agreed upon by the
Global Coordinator and the Selling Shareholders or the Attorneys-in-Fact on
behalf of the Selling Shareholders, on each Date of Delivery as specified in the
notice from the Global Coordinator to the Selling Shareholders.
Payment shall be made to each Selling Shareholder by wire transfer of
immediately available funds to a bank account designated by the Custodian
pursuant to the Selling Shareholders' Power of Attorney and Custody Agreement,
as the case may be, against delivery to the U.S. Representatives for the
respective accounts of the U.S. Underwriters of certificates for the U.S.
Securities to be purchased by them. It is understood that each U.S. Underwriter
has authorized the U.S. Representatives, for its account, to accept delivery of,
receipt for, and make payment of the purchase price for, the Initial U.S.
Securities and the U.S. Option Securities, if any, which it has agreed to
purchase. Merrill Lynch, individually and not as representative of the U.S.
Underwriters, may (but shall not be obligated to) make payment of the purchase
price for the Initial U.S. Securities or the U.S. Option Securities, if any, to
be purchased by any U.S. Underwriter whose funds have not been received by the
Closing Time or the relevant Date of Delivery, as the case may be, but such
payment shall not relieve such U.S. Underwriter from its obligations hereunder.
(d) Denominations; Registration. Certificates for the Initial U.S.
Securities and the U.S. Option Securities, if any, shall be in such
denominations and registered in such names as the U.S. Representatives may
request in writing at least one full business day before the Closing Time or the
relevant Date of Delivery, as the case may be. The certificates for the Initial
U.S. Securities and the U.S. Option Securities, if any, will be made available
for examination and packaging by the U.S. Representatives in The City of New
York not later than 10:00 A.M. (Eastern time) on the business day prior to the
Closing Time or the relevant Date of Delivery, as the case may be.
SECTION 3 Covenants of the Company. The Company covenants with each
U.S. Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests. The
Company, subject to Section 3(b), will comply with the requirements of Rule 430A
or Rule 434, as applicable, and will notify the Global Coordinator immediately,
and confirm the notice in
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writing, (i) when any post-effective amendment to the Registration Statement
shall become effective, or any supplement to the Prospectuses or any amended
Prospectuses shall have been filed, (ii) of the receipt of any comments from the
Commission, (iii) of any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectuses or for
additional information, and (iv) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or of any order
preventing or suspending the use of any preliminary prospectus, or of the
suspension of the qualification of the Securities for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceedings for any of
such purposes. The Company will promptly effect the filings necessary pursuant
to Rule 424(b) and will take such steps as it deems necessary to ascertain
promptly whether the form of prospectus transmitted for filing under Rule 424(b)
was received for filing by the Commission and, in the event that it was not, it
will promptly file such prospectus. The Company will make every reasonable
effort to prevent the issuance of any stop order and, if any stop order is
issued, to obtain the lifting thereof at the earliest possible moment.
(b) Filing of Amendments. The Company will give the Global Coordinator
notice of its intention to file or prepare any amendment to the Registration
Statement (including any filing under Rule 462(b)), any Term Sheet or any
amendment, supplement or revision to either the prospectus included in the
Registration Statement at the time it became effective or to the Prospectuses,
will furnish the Global Coordinator with copies of any such documents a
reasonable amount of time prior to such proposed filing or use, as the case may
be, and will not file or use any such document to which the Global Coordinator
or counsel for the U.S. Underwriters shall reasonably object.
(c) Delivery of Registration Statements. The Company has furnished or
will deliver to the U.S. Representatives and counsel for the U.S. Underwriters,
without charge, signed copies of the Registration Statement as originally filed
and of each amendment thereto (including exhibits filed therewith) and signed
copies of all consents and certificates of experts, and will also deliver to the
U.S. Representatives, without charge, a conformed copy of the Registration
Statement as originally filed and of each amendment thereto (without exhibits)
for each of the U.S. Underwriters. The copies of the Registration Statement and
each amendment thereto furnished to the U.S. Underwriters will be identical to
the electronically transmitted copies thereof filed with the Commission pursuant
to EDGAR, except to the extent permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered or will deliver
to each U.S. Underwriter, without charge, as many copies of each preliminary
prospectus as such U.S. Underwriter reasonably requested, and the Company hereby
consents to the use of such copies for purposes permitted by the 1933 Act. The
Company will furnish to each U.S. Underwriter, without charge, during the period
when the U.S. Prospectus is required to be delivered under the 1933 Act or the
Securities Exchange Act of 1934 (the "1934 Act"), such number of copies of the
U.S. Prospectus (as amended or supplemented) as such U.S. Underwriter may
reasonably request. The U.S. Prospectus and any amendments or supplements
thereto furnished to the U.S. Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission pursuant to
EDGAR, except to the extent permitted by Regulation S-T.
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(e) Continued Compliance with Securities Laws. The Company will comply
with the 1933 Act and the 1933 Act Regulations so as to permit the completion of
the distribution of the Securities as contemplated in this Agreement, the
International Purchase Agreement and in the Prospectuses. If at any time when a
prospectus is required by the 1933 Act to be delivered in connection with sales
of the Securities, any event shall occur or condition shall exist as a result of
which it is necessary to amend the Registration Statement or amend or supplement
any Prospectus in order that the Prospectuses will not include any untrue
statements of a material fact or omit to state a material fact necessary in
order to make the statements therein not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser, or if it
shall be necessary, at any such time to amend the Registration Statement or
amend or supplement any Prospectus in order to comply with the requirements of
the 1933 Act or the 1933 Act Regulations, the Company will promptly prepare and
file with the Commission, subject to Section 3(b), such amendment or supplement
as may be necessary to correct such statement or omission or to make the
Registration Statement or the Prospectuses comply with such requirements, and
the Company will furnish to the U.S. Underwriters such number of copies of such
amendment or supplement as the U.S. Underwriters may reasonably request.
(f) Blue Sky Qualifications. The Company will use its best efforts, in
cooperation with the U.S. Underwriters, to qualify the Securities for offering
and sale under the applicable securities laws of such states and other
jurisdictions (domestic or foreign) as the Global Coordinator may designate and
to maintain such qualifications in effect for a period of not less than one year
from the later of the effective date of the Registration Statement and any Rule
462(b) Registration Statement; provided, however, that neither the Company nor
any of the Selling Shareholders shall be obligated to file any general consent
to service of process or to qualify as a foreign corporation or as a dealer in
securities in any jurisdiction in which it is not so qualified or to subject
itself to taxation in respect of doing business in any jurisdiction in which it
is not otherwise so subject. In each jurisdiction in which the Securities have
been so qualified, the Company will file such statements and reports as may be
required by the laws of such jurisdiction to continue such qualification in
effect for a period of not less than one year from the effective date of the
Registration Statement and any Rule 462(b) Registration Statement.
(g) Rule 158. The Company will timely file such reports pursuant to the
1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the purposes
of, and to provide the benefits contemplated by, the last paragraph of Section
11(a) of the 1933 Act.
(h) Restriction on Sale of Securities. During a period of 90 days from
the date of the Prospectuses, the Company will not, without the prior written
consent of the Global Coordinator, (i) directly or indirectly, offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase or
otherwise transfer or dispose of any share of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock or file any
registration statement under the 1933 Act with respect to any of the foregoing
or (ii) enter into any swap or any other agreement or any transaction that
transfers, in whole or in part, directly or indirectly, the economic consequence
of ownership of the Common Stock, whether any such swap or transaction described
in clause (i) or (ii) above is to be settled by delivery of Common Stock or such
other securities, in cash or
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otherwise except pursuant to Common Stock issued in connection with (y) the
Company's stock option plans existing at the Closing Time or (z) acquisitions by
the Company; provided that, in the case of clause (z), it shall be a condition
to such stock issuance that the third party receiving such shares executes a
lock-up agreement on substantially the same terms as described above for a
period expiring 90 days from the date of the Prospectus and there shall be no
further transfer of such shares except in accordance with the provisions of such
lock-up agreement. The foregoing sentence shall not apply to the Securities to
be sold hereunder or under the International Purchase Agreement.
(i) Reporting Requirements. The Company, during the period when the
Prospectuses are required to be delivered under the 1933 Act or the 1934 Act,
will file all documents required to be filed with the Commission pursuant to the
1934 Act within the time periods required by the 1934 Act and the rules and
regulations of the Commission thereunder.
SECTION 4. Payment of Expenses. (a) Expenses. The Company will pay all
expenses incident to the performance of its obligations under this Agreement,
including (i) the preparation, printing and filing of the Registration Statement
(including financial statements and exhibits) as originally filed and of each
amendment thereto, (ii) the preparation, printing and delivery to the
Underwriters of this Agreement, any Agreement among Underwriters and such other
documents as may be required in connection with the offering, purchase, sale,
issuance or delivery of the Securities, (iii) the preparation, issuance and
delivery of the certificates for the Securities to the Underwriters, including
any stock or other transfer taxes and any stamp or other duties payable upon the
sale, issuance or delivery of the Securities by the Company to the Underwriters
and the transfer of the Securities between the U.S. Underwriters and the
International Managers, (iv) the fees and disbursements of the Company's
counsel, accountants and other advisors, (v) the qualification of the Securities
under securities laws in accordance with the provisions of Section 3(f) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Underwriters in connection therewith and in connection with the preparation
of the Blue Sky Survey and any supplement thereto, (vi) the printing and
delivery to the Underwriters of copies of each preliminary prospectus, any Term
Sheets and of the Prospectuses and any amendments or supplements thereto, (vii)
the preparation, printing and delivery to the Underwriters of copies of the blue
sky survey and any supplement thereto, (viii) the fees and expenses of any
transfer agent or registrar for the Securities and (ix) the filing fees incident
to, and the reasonable fees and disbursements of counsel to the Underwriters in
connection with, the review by the NASD of the terms of the sale of the
Securities.
(b) Expenses of the Selling Shareholders. The Company will pay all
expenses incident to the performance of the Selling Shareholders' obligations
under, and the consummation of the transactions contemplated by, this Agreement
(other than any underwriting discount), including (i) any stamp duties, capital
duties and stock transfer taxes, if any, payable upon the sale of the U.S.
Securities or the U.S. Option Securities by the Selling Shareholders to the
Underwriters, and their transfer between the Underwriters pursuant to an
agreement between such Underwriters and (ii) the fees and disbursements of the
Selling Shareholders' counsel and accountants.
(c) Termination of Agreement. If this Agreement is terminated by the
U.S. Representatives in accordance with the provisions of Section 5 or Sections
9(a)(i) or (ii) hereof,
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the Company shall reimburse the U.S. Underwriters for all of their out-of-pocket
expenses, including the reasonable fees and disbursements of counsel for the
U.S. Underwriters.
(d) Allocation of Expenses. The provisions of this Section shall not
affect any agreement that the Company and the Selling Shareholders may make for
the sharing of such costs and expenses.
SECTION 5. Conditions of U.S. Underwriters' Obligations. The
obligations of the several U.S. Underwriters hereunder are subject to the
accuracy of the representations and warranties of the Company and the Selling
Shareholders contained in Section 1 hereof or in certificates of any officer of
the Company or any Subsidiary of the Company or on behalf of the Selling
Shareholders delivered pursuant to the provisions hereof, to the performance by
the Company of its covenants and other obligations hereunder, and to the
following further conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective under the 1933 Act; and at Closing Time no stop order suspending the
effectiveness of the Registration Statement shall have been issued under the
1933 Act or proceedings therefor initiated or threatened by the Commission, and
any request on the part of the Commission for additional information shall have
been complied with to the reasonable satisfaction of counsel to the U.S.
Underwriters. A prospectus containing the Rule 430A Information shall have been
filed with the Commission in accordance with Rule 424(b) (or a post-effective
amendment providing such information shall have been filed and declared
effective in accordance with the requirements of Rule 430A) or, if the Company
has elected to rely upon Rule 434, a Term Sheet shall have been filed with the
Commission in accordance with Rule 424(b).
(b) Opinion of Counsel for Company and the Selling Shareholders. At
Closing Time, the U.S. Representatives shall have received the favorable
opinions, dated as of Closing Time, of (i) Dewitt, Ross & Stevens s.c., counsel
to the Company, relating to certain matters of Wisconsin law, (ii) Skadden,
Arps, Slate, Meagher & Flom LLP, special counsel to the Company, (iii) Skadden,
Arps, Slate, Meagher & Flom LLP, special counsel to the Category 1 Selling
Shareholders and special counsel to the Category 2 Selling Shareholders with
respect to certain matters of New York law, and (iv) Dewitt, Ross & Stevens s.c.
counsel to the Category 2 Selling Shareholders, in each case in form and
substance reasonably satisfactory to counsel for the U.S. Underwriters together
with signed or reproduced copies of such letter for each of the other U.S.
Underwriters, dated such Date of Delivery, to the effect set forth in Exhibits
A-1, A-2, A-3 and A-4, respectively, hereto.
(c) Opinion of Counsel for U.S. Underwriters. At Closing Time, the U.S.
Representatives shall have received the favorable opinion, dated as of Closing
Time, of Fried, Frank, Harris, Shriver & Jacobson, counsel for the U.S.
Underwriters, together with signed or reproduced copies of such letter for each
of the other U.S. Underwriters with respect to the matters set forth in clauses
(i), (ii) (solely as to preemptive or other similar rights arising by operation
of law or under the charter or bylaws of the Company), (v) (solely as to the
information contained in or incorporated by reference therein in the Prospectus
with respect to the
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"Description of Capital Stock") and (viii) of Exhibit A-1; and to the matters
set forth in paragraph 3 and the penultimate paragraph Exhibit A-2. In giving
such opinion such counsel may rely, as to all matters governed by the laws of
jurisdictions other than the law of the State of New York and the federal law of
the United States and the General Corporation Law of the State of Delaware, upon
the opinions of counsel satisfactory to the U.S. Representatives. Such counsel
may also state that, insofar as such opinion involves factual matters, they have
relied, to the extent they deem proper, upon certificates of officers of the
Company and its Subsidiaries and of the Selling Shareholders and certificates of
public officials.
(d) Officers' Certificate. At Closing Time, there shall not have
been, since the date hereof or since the respective dates as of which
information is given in the Prospectuses, any material adverse change in the
condition (financial or otherwise), earnings, business affairs or business
prospects of the Company and its Subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, and the U.S.
Representatives shall have received a certificate of the President or a Vice
President of the Company and of the chief financial or chief accounting officer
of the Company, dated as of Closing Time, to the effect that (i) there has been
no such material adverse change, (ii) the representations and warranties in
Section 1(a) hereof are true and correct with the same force and effect as
though expressly made at and as of Closing Time, (iii) the Company has complied
with all agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to Closing Time, and (iv) no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceedings
for that purpose have been instituted or are pending or threatened by the
Commission.
(e) Selling Shareholders' Certificate. At Closing Time, the
Representatives shall have received a certificate of each Selling Shareholder
(which may be executed on behalf of each Selling Shareholder by the general
partner or a duly authorized executive officer of such Selling Shareholder or by
such Selling Shareholder's Attorney-in-Fact), dated as of Closing Time, to the
effect that (i) the representations and warranties of such Selling Shareholder
contained in Section 1(b) hereof are true and correct with the same force and
effect as though expressly made at and as of the Closing Time and (ii) such
Selling Shareholder has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied under this Agreement at or
prior to the Closing Time.
(f) Accountant's Comfort Letters. At the time of the execution of
this Agreement, the U.S. Representatives shall have received from KPMG Peat
Marwick LLP a letter in the form of Exhibit C-1 hereto and from Coopers &
Lybrand LLP a letter in the form of Exhibit C-2 hereto, dated such date, in form
and substance reasonably satisfactory to the U.S. Representatives, together with
signed or reproduced copies of such letter for each of the other U.S.
Underwriters containing statements and information of the type ordinarily
included in accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in the
Registration Statement and the Prospectuses.
(g) Bring-down Comfort Letters. At Closing Time, the U.S.
Representatives shall have received letters from KPMG Peat Marwick LLP and
Coopers & Lybrand LLP, dated as of Closing Time, to the effect that they
reaffirm the statements made in the letter furnished pursuant
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to subsection (e) of this Section, except that the specified date referred to
shall be a date not more than three business days prior to Closing Time.
(h) No Objection. The NASD has confirmed that it has not raised any
objection with respect to the fairness and reasonableness of the underwriting
terms and arrangements.
(i) Lock-up Agreements. At the date of this Agreement, the U.S.
Representatives shall have received an agreement substantially in the form of
Exhibit B hereto signed by the persons listed on Schedule D hereto.
(j) Purchase of Initial International Securities. Contemporaneously
with the purchase by the U.S. Underwriters of the Initial U.S. Securities under
this Agreement, the International Managers shall have purchased the Initial
International Securities under the International Purchase Agreement.
(k) Custody Agreement. At the date of this Agreement the U.S.
Representatives shall have received copies of the Power of Attorney and Custody
Agreement executed by each of the Selling Shareholders.
(l) Conditions to Purchase of U.S. Option Securities. In the event that
the U.S. Underwriters exercise their option provided in Section 2(b) hereof to
purchase all or any portion of the U.S. Option Securities, the representations
and warranties of the Company contained herein and the statements in any
certificates furnished by the Company or any Subsidiary of the Company hereunder
shall be true and correct as of each Date of Delivery and, at the relevant Date
of Delivery, the U.S. Representatives shall have received:
(i) Officers' Certificate. A certificate, dated such Date of
Delivery, of the President or a Vice President of the Company
and of the chief financial or chief accounting officer of the
Company confirming that the certificate delivered at the
Closing Time pursuant to Section 5(d) hereof remains true and
correct as of such Date of Delivery.
(ii) Selling Shareholder's Certificate. At the Date of Delivery,
the U.S. Representatives shall have received a certificate of
each Selling Shareholder (which may be executed on behalf of
each Selling Shareholder by the general partner or a duly
authorized executive officer of such Selling Shareholder or
such Selling Shareholder's Attorney-in-Fact), dated as of
Date of Delivery, to the effect that (x) the representations
and warranties of such Selling Shareholder contained in
Section 1(b) hereof, are true and correct with the same force
and effect as though expressly made at and as of Date of
Delivery and (y) such Selling Shareholder has complied with
all agreements and satisfied all conditions on their part to
be performed or satisfied under this Agreement at or prior to
Date of Delivery.
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(iii) Opinion of Counsel for Company and the Selling Shareholders.
The favorable opinion of (w) Dewitt, Ross & Stevens s.c.,
counsel to the Company, relating to certain matters of
Wisconsin law, (x) Skadden, Arps, Slate, Meagher & Flom LLP,
special counsel to the Company, (y) Skadden, Arps, Slate,
Meagher & Flom LLP, special counsel to the Category 1 Selling
Shareholders and special counsel to the Category 2 Selling
Shareholders with respect to certain matters of New York law,
and (z) Dewitt, Ross & Stevens s.c. counsel to the Category
2 Selling Shareholders, in each case in form and substance
reasonably satisfactory to counsel for the U.S. Underwriters
together with signed or reproduced copies of such letter for
each of the other U.S. Underwriters, dated such Date of
Delivery, relating to the U.S. Option Securities to be
purchased on such Date of Delivery and otherwise to the same
effect as the opinion required by Section 5(b).
(iv) Opinion of Counsel for U.S. Underwriters. The favorable
opinion of Fried, Frank, Harris, Shriver & Jacobson, counsel
for the U.S. Underwriters, dated such Date of Delivery,
relating to the U.S. Option Securities to be purchased on
such Date of Delivery and otherwise to the same effect as the
opinion required by Section 5(c) hereof.
(v) Bring-down Comfort Letters. Letters from Coopers & Lybrand
LLP and KPMG Peat Marwick LLP, in form and substance
reasonably satisfactory to the U.S. Representatives and dated
such Date of Delivery, substantially in the same form and
substance as the letter furnished to the U.S. Representatives
pursuant to Section 5(g) hereof, except that the "specified
date" in the letter furnished pursuant to this paragraph
shall be a date not more than five days prior to such Date of
Delivery.
(m) Additional Documents. At Closing Time and at each Date of Delivery,
counsel for the U.S. Underwriters shall have been furnished with such documents
and opinions as they may reasonably require for the purpose of enabling them to
pass upon the issuance and sale of the Securities as herein contemplated, or in
order to evidence the accuracy of any of the representations or warranties, or
the fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company and the Selling Shareholders in connection with the
issuance and sale of the Securities as herein contemplated shall be reasonably
satisfactory in form and substance to the U.S. Representatives and counsel for
the U.S. Underwriters.
(n) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled, this
Agreement, or, in the case of any condition to the purchase of U.S. Option
Securities on a Date of Delivery which is after the Closing Time, the
obligations of the several U.S. Underwriters to purchase the relevant Option
Securities, may be terminated by the U.S. Representatives by notice to the
Company at any time at or prior to Closing Time or such Date of Delivery, as the
case may be, and such termination shall be without liability of any party to any
other party except as provided in Section 4 and
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except that Sections 1, 6, 7 and 8 shall survive any such termination and remain
in full force and effect.
SECTION 6. Indemnification.
(a) Indemnification of U.S. Underwriters by the Company. The Company
agrees to indemnify and hold harmless each U.S. Underwriter and each person, if
any, who controls any U.S. Underwriter within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act as follows to the extent set forth below:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the Rule
430A Information and the Rule 434 Information, if applicable, or the
omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact included in any preliminary prospectus or
the Prospectuses (or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission; provided
that (subject to Section 6(d) below) any such settlement is effected
with the written consent of the indemnifying party; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by Merrill
Lynch), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not (i) apply to any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Company by any U.S. Underwriter through the U.S. Representatives or any
International Manager through the Lead Managers expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the U.S. Prospectus or International Prospectus, as the case may
be (or any amendment or supplement thereto) or (ii) inure to the benefit of any
U.S. Underwriter from whom the person asserting any loss, liability, claim,
damage or expense, purchased Securities, or any person controlling such U.S.
Underwriter, if it shall be established
-23-
that a copy of the Prospectus (as then amended or supplemented if the Company
shall have furnished any amendments or supplements thereto) was not sent or
given by or on behalf of such U.S. Underwriter to such person, if required by
law to have been so delivered, at or prior to the confirmation of the sale of
such Securities to such person in any case where the Company complied with its
obligations under Sections 3(a), 3(b) and 3(d), and if the Prospectus (as so
amended or supplemented) would have cured any defect giving rise to such loss,
liability, claim damage, or expense.
(b) Indemnification of U.S. Underwriters by the Selling Shareholders.
Each Selling Shareholder, severally and not jointly, agrees to indemnify and
hold harmless each U.S. Underwriter and each person, if any, who controls any
U.S. Underwriter within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act as follows to the extent set forth below:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the Rule
430A Information and the Rule 434 Information, if applicable, or the
omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact included in any preliminary prospectus or
the Prospectuses (or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission; provided
that (subject to Section 6(d) below) any such settlement is effected
with the written consent of the indemnifying party; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by Merrill
Lynch), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not (i) apply to any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Company by any U.S. Underwriter through the U.S. Representatives or any
International Manager through the Lead Managers expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the U.S. Prospectus or International Prospectus, as
-24-
the case may be (or any amendment or supplement thereto) or (ii) inure to the
benefit of any U.S. Underwriter from whom the person asserting any loss,
liability, claim, damage or expense, purchased Securities, or any person
controlling such U.S. Underwriter, if it shall be established that a copy of the
Prospectus (as then amended or supplemented if the Company shall have furnished
any amendments or supplements thereto) was not sent or given by or on behalf of
such U.S. Underwriter to such person, if required by law to have been so
delivered, at or prior to the confirmation of the sale of such Securities to
such person in any case where the Company complied with its obligations under
Sections 3(a), 3(b) and 3(d), and if the Prospectus (as so amended or
supplemented) would have cured any defect giving rise to such loss, liability,
claim damage, or expense; provided, however, further, that with respect to each
Selling Shareholder, (x) the indemnification provision in this paragraph (b)
shall only apply to any loss, liability, claim, damage or expense to the extent
arising out of any untrue statement or omission, or alleged untrue statement or
omission, made in reliance upon and in conformity with written information
furnished to the Company by such Selling Shareholder expressly for use in the
Registration Statement (or any amendment thereto) including the Rule 430A
information and the Rule 434 Information if applicable, or any or such
preliminary prospectus or the U.S. Prospectus or International Prospectus, as
the case may be (or any amendment or supplement thereto) and (y) each Selling
Shareholder's aggregate liability under this Section 6 shall be limited to an
amount equal to the net proceeds (after deducting the underwriting discount but
before deducting expenses) received by such Selling Shareholder from the sale of
Securities pursuant to this Agreement.
(c) Indemnification of Company, Directors and Officers and Selling
Shareholders. Each U.S. Underwriter severally agrees to indemnify and hold
harmless the Company, its directors, each of its officers who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act and each
Selling Shareholder and each person, if any, who controls any Selling
Shareholder within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act against any and all loss, liability, claim, damage and expense
described in the indemnity contained in Section 6(a) and Section 6(b) hereof, as
incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment thereto), including the Rule 430A Information and the Rule 434
Information, if applicable, or any preliminary U.S. prospectus or the U.S.
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by such U.S.
Underwriter through the U.S. Representatives expressly for use in the
Registration Statement (or any amendment thereto) or such preliminary prospectus
or the U.S. Prospectus (or any amendment or supplement thereto).
(d) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified
-25-
pursuant to Section 6(a) and Section 6(b) above, counsel to the indemnified
parties shall be selected by Merrill Lynch, and, in the case of parties
indemnified pursuant to Section 6(c) above, counsel to the indemnified parties
shall be selected by the Company or the indemnified Selling Shareholder, as
appropriate. An indemnifying party may participate at its own expense in the
defense of any such action; provided, however, that counsel to the indemnifying
party shall not (except with the consent of the indemnified party) also be
counsel to the indemnified party. In no event shall the indemnifying parties be
liable for fees and expenses of more than one counsel (in addition to any
necessary local counsel) separate from their own counsel for all indemnified
parties in connection with any one action or separate but similar or related
actions in the same jurisdiction arising out of the same general allegations or
circumstances. No indemnifying party shall, without the prior written consent of
the indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 6 or Section 7 hereof (whether or not the indemnified parties
are actual or potential parties thereto), unless such settlement, compromise or
consent (i) includes an unconditional release of each indemnified party from all
liability arising out of such litigation, investigation, proceeding or claim and
(ii) does not include a statement as to or an admission of fault, culpability or
a failure to act by or on behalf of any indemnified party.
(e) Settlement without Consent if Failure to Reimburse. If at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel for which the indemnifying
party is responsible pursuant to the terms hereof, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(iii) or Section 6(b)(iii) effected without its written consent if
(i) such settlement is entered into more than 60 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 45 days prior to
such settlement being entered into and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with such request prior to
the date of such settlement.
(f) Other Agreements with Respect to Indemnification. The provisions of
this Section shall not affect any agreement among the Company and the Selling
Shareholders with respect to indemnification.
SECTION 7. Contribution. If, although applicable in accordance with its
terms, the indemnification provided for in Section 6 hereof is for any reason
unavailable to or insufficient to hold harmless an indemnified party in respect
of any losses, liabilities, claims, damages or expenses referred to therein,
then each indemnifying party shall contribute to the aggregate amount of such
losses, liabilities, claims, damages and expenses incurred by such indemnified
party, as incurred, (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Selling Shareholders,
collectively, on the one hand and the U.S. Underwriters on the other hand from
the offering of the U.S. Securities pursuant to this Agreement or (ii) if the
allocation provided by clause (i) 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 Company and the
Selling Shareholders on the one hand and of the U.S. Underwriters on the other
hand in connection with the statements or omissions,
-26-
which resulted in such losses, liabilities, claims, damages or expenses, as well
as any other relevant equitable considerations.
The relative benefits received by the Company and the Selling
Shareholders, collectively, on the one hand and the U.S. Underwriters on the
other hand in connection with the offering of the U.S. Securities pursuant to
this Agreement shall be deemed to be in the same respective proportions as the
total net proceeds from the offering of the U.S. Securities pursuant to this
Agreement (before deducting expenses) received by the Company and the Selling
Shareholders and the total underwriting discount received by the U.S.
Underwriters, in each case as set forth on the cover of the U.S. Prospectus, or,
if Rule 434 is used, the corresponding location on the Term Sheet, bear to the
aggregate initial public offering price of the U.S. Securities as set forth on
such cover.
The relative fault of the Company and the Selling Shareholders on the
one hand and the U.S. Underwriters on the other hand shall be determined by
reference to, among other things, whether any such untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Company or the Selling Shareholders
or by the U.S. Underwriters and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
The Company, the Selling Shareholders and the U.S. Underwriters agree
that it would not be just and equitable if contribution pursuant to this Section
7 were determined by pro rata allocation (even if the U.S. Underwriters were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to above in
this Section 7. The aggregate amount of losses, liabilities, claims, damages and
expenses incurred by an indemnified party and referred to above in this Section
7 shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no U.S. Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the U.S. Securities underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages which
such U.S. Underwriter has otherwise been required to pay by reason of any 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 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, (a) each person, if any, who controls a
U.S. Underwriter within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act shall have the same rights to contribution as such U.S.
Underwriter, (b) each director of the Company, each officer of the Company who
signed the Registration Statement, and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act or Section 20 of the
-27-
1934 Act shall have the same rights to contribution as the Company and (c) each
person, if any, who controls any Selling Shareholder within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same
rights to contribution as such Selling Shareholder. The U.S. Underwriters'
respective obligations to contribute pursuant to this Section 7 are several in
proportion to the number of Initial U.S. Securities set forth opposite their
respective names in Schedule A hereto and not joint.
Notwithstanding the provisions of this Section 7, no Selling
Shareholder shall be required to contribute any amount in excess of the amount
equal to the net proceeds (after deducting the underwriting discount but before
deducting expenses) received by such Selling Shareholder from the sale of U.S.
Securities pursuant to this Agreement.
The provisions of this Section shall not affect any agreement among the
Company and the Selling Shareholders with respect to contribution.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company or any of its
Subsidiaries or the Selling Shareholders submitted pursuant hereto, shall remain
operative and in full force and effect, regardless of any investigation made by
or on behalf of any U.S. Underwriter or controlling person, or by or on behalf
of the Company or any Selling Shareholder, and shall survive delivery of the
U.S. Securities to the U.S. Underwriters.
SECTION 9. Termination of Agreement.
(a) Termination; General. The U.S. Representatives may terminate this
Agreement, by notice to the Company and the Attorneys-in-Fact on behalf of the
Selling Shareholders, at any time at or prior to Closing Time (i) if there has
been, since the time of execution of this Agreement or since the respective
dates as of which information is given in the U.S. Prospectus, any material
adverse change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its Subsidiaries
considered as one enterprise, whether or not arising in the ordinary course of
business, or (ii) if there shall have occurred a downgrading in the rating
assigned to any of the Company's debt securities by any nationally recognized
securities rating agency, or if such securities rating agency shall have
publicly announced that it has under surveillance or review, with possible
negative implications, its rating of any of the Company's debt securities, or
(iii) if there has occurred any material adverse change in the financial markets
in the United States or the international financial markets, any outbreak of
hostilities or escalation thereof or other calamity or crisis or any change or
development involving a prospective change in national or international
political, financial or economic conditions, in each case the effect of which is
such as to make it, in the judgment of the U.S. Representatives, impracticable
to market the Securities or to enforce contracts for the sale of the Securities,
or (iv) if trading in any securities of the Company has been suspended or
materially limited by the Commission or the New York Stock Exchange, or if
trading generally on the American Stock Exchange or the New York Stock Exchange
or in the Nasdaq National Market has been suspended or materially limited, or
minimum or maximum prices for trading have been fixed, or maximum ranges for
prices have been required, by any of said exchanges or by such
-28-
system or by order of the Commission, the National Association of Securities
Dealers, Inc. or any other governmental authority, or (v) if a banking
moratorium has been declared by either Federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6, 7 and 8 shall survive such termination and remain in full force and
effect.
SECTION 10. Default by One or More of the U.S. Underwriters. If one or
more of the U.S. Underwriters shall fail at the Closing Time or a Date of
Delivery to purchase the Securities which it or they are obligated to purchase
under this Agreement (the "Defaulted Securities"), the U.S. Representatives
shall have the right, within 24 hours thereafter, to make arrangements for one
or more of the non-defaulting U.S. Underwriters, or any other underwriters, to
purchase all, but not less than all, of the Defaulted Securities in such amounts
as may be agreed upon and upon the terms herein set forth; if, however, the U.S.
Representatives shall not have completed such arrangements within such 24-hour
period, then:
(a) if the number of Defaulted Securities does not exceed 10%
of the number of U.S. Securities to be purchased on such date, each of
the non-defaulting U.S. Underwriters shall be obligated, severally and
not jointly, to purchase the full amount thereof in the proportions
that their respective underwriting obligations hereunder bear to the
underwriting obligations of all non-defaulting U.S. Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the
number of U.S. Securities to be purchased on such date, this Agreement
or, with respect to any Date of Delivery which occurs after the Closing
Time, the obligation of the U.S. Underwriters to purchase the U.S.
Option Securities to be purchased and sold on such Date of Delivery
shall terminate without liability on the part of any non-defaulting
U.S. Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
U.S. Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement or, in the case of a Date of Delivery which is after the
Closing Time, which does not result in a termination of the obligation of the
U.S. Underwriters to purchase and the Selling Shareholders to sell the relevant
U.S. Securities, either (i) the U.S. Representatives or (ii) the Selling
Shareholders shall have the right to postpone the Closing Time or the relevant
Date of Delivery, as the case may be, for a period not exceeding seven days in
order to effect any required changes in the Registration Statement or Prospectus
or in any other documents or arrangements. As used herein, the term "U.S.
Underwriter" includes any person substituted for a U.S. Underwriter under this
Section 10.
SECTION 11. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the U.S.
Underwriters shall be directed to the U.S.
-29-
Representatives at North Tower, World Financial Center, New York, New York
10281-1201, attention of W. Gregg Smart, with a copy to Fried, Frank, Harris,
Shriver & Jacobson, 1 New York Plaza, New York, New York 10004, attention of
Valerie Ford Jacob, Esq.; notices to the Company shall be directed to it at
Rayovac Corporation, 601 Rayovac Drive, Madison, Wisconsin 53711, attention of
James A. Broderick, Esq., with a copy to Louis A. Goodman, Esq. Skadden, Arps,
Slate, Meagher & Flom LLP, One Beacon Street, Boston, MA 02108; notices to the
Selling Shareholders shall be delivered to them at the address for notices
indicated in the Power of Attorney and Custody Agreement.
SECTION 12. Parties. This Agreement shall each inure to the benefit of
and be binding upon the U.S. Underwriters, the Company and the Selling
Shareholders and their respective successors. Nothing expressed or mentioned in
this Agreement is intended or shall be construed to give any person, firm or
corporation, other than the U.S. Underwriters, the Company and the Selling
Shareholders and their respective successors and the controlling persons and
officers and directors referred to in Sections 6 and 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the U.S. Underwriters, the Company and the Selling
Shareholders and their respective successors, and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Securities from
any U.S. Underwriter shall be deemed to be a successor by reason merely of such
purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED
TIMES OF DAY REFER TO NEW YORK CITY TIME. AS USED HEREIN, THE TERM "BUSINESS
DAY" MEANS ANY DAY ON WHICH THE NEW YORK STOCK EXCHANGE AND COMMERCIAL BANKS IN
NEW YORK CITY ARE REGULARLY OPEN FOR BUSINESS.
SECTION 14. Effect of Headings. The Article and Section headings herein
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
SECTION 15. Counterparts. This Agreement may be executed in one or more
counterparts and, when a counterpart has been executed by each party hereto, all
such counterparts taken together shall constitute one and the same agreement.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof
-30-
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company and the Attorneys-in-Fact for
the Selling Shareholders a counterpart hereof, whereupon this instrument, along
with all counterparts, will become a binding agreement among the U.S.
Underwriters, the Company and the Selling Shareholders in accordance with its
terms.
Very truly yours,
RAYOVAC CORPORATION
By: ____________________________
Name: David A. Jones
Title: Chairman of the Board,
Chief Executive Officer and
President
SELLING SHAREHOLDERS LISTED IN CATEGORY 1 ON
SCHEDULE B HERETO
THOMAS H. LEE EQUITY FUND III, L.P.
By: THL Equity Advisors III Limited
Partnership, as General Partner
By: THL Equity Trust III,
as General Partner
By: ____________________________
Name:
Title:
THOMAS H. LEE FOREIGN FUND III, L.P.
By: THL Equity Advisors III Limited
Partnership, as General Partner
By: THL Equity Trust III,
as General Partner
By: ____________________________
Name:
Title:
THL-CCI LIMITED PARTNERSHIP
By: THL Investment Management Corp.
as General Partner
By: ____________________________
Name:
Title:
SELLING SHAREHOLDERS LISTED IN CATEGORY 2 ON
SCHEDULE B HERETO
By: ____________________________
Name: ______________________
Title: Attorney-in-Fact, on
behalf of the Selling Shareholders
listed in Category 2 on Schedule B
hereto
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
BEAR, STEARNS & CO. INC.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
SMITH BARNEY INC.
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: _______________________________________
Authorized Signatory
For themselves and as U.S. Representatives of the
other U.S. Underwriters named in Schedule A hereto.
SCHEDULE A
Number of
Initial U.S.
Securities
Name of U.S. Underwriter
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.....................................
Bear, Stearns & Co. Inc..........................................
Donaldson, Lufkin & Jenrette Securities Corporation .............
Smith Barney Inc.................................................
SCHEDULE B
Selling Shareholder Number of U.S. Securities
to be Sold*
-----------
Category 1
THOMAS H. LEE EQUITY FUND III, L.P.
THOMAS H. LEE FOREIGN FUND III, L.P.
THL-CCI Limited Partnership
Total Category 1
Category 2
Carter J. Balfour
Kevin Balfour
Kenneth V. Biller
James A. Broderick
Fred Christopher Brooks
Bernard T. Conner
David M. Darkoch
Kenneth Drescher
Fleming Trust
Mark G. Hines
John E. Hofkes
Kent J. Hussey
David A. Jones
Pamela A. Josheff
Robert K. Kloppenburg
Richard A. Kreutz
Trygve Lonnebotn
Terrence P. McGraw
Rayovac Corporation Deferred Compensation
Emil J. Ripley and Laverne M. Ripley
Stephen P. Salzieder
Stephen P. Shanesy
Shanesy Children's Trust f/b/o Kelsey Alice Shanesy
Shanesy Children's Trust f/b/o Nicholas Auster Shanesy
Dale R. Tetzlaff
Michael G. Thompson
Merrill Tomlin
Deborah L. Ulrich
Lucille Warren
Roger F. Warren
Andrew P. Warren Irrevocable Trust
Michael F. Warren Irrevocable Trust
Gary E. Wilson
Martin W. Wirt
Karl M. Wulf
Total Category 2
Total of Category 1 and Category 2..................... 5,200,000
=========
SCHEDULE B-1
Over allotment Number of U.S. Option
Selling Shareholder Securities
to be Sold*
Category 1
THOMAS H. LEE EQUITY FUND III, L.P.
THOMAS H. LEE FOREIGN FUND III, L.P.
THL-CCI Limited Partnership
Total Category 1
Category 2
Carter J. Balfour
Kevin Balfour
Kenneth V. Biller
James A. Broderick
Fred Christopher Brooks
Bernard T. Conner
David M. Darkoch
Kenneth Drescher
Fleming Trust
Mark G. Hines
John E. Hofkes
Kent J. Hussey
David A. Jones
Pamela A. Josheff
Robert K. Kloppenburg
Richard A. Kreutz
Trygve Lonnebotn
Terrence P. McGraw
Rayovac Corporation Deferred Compensation
Emil J. Ripley and Laverne M. Ripley
Stephen P. Salzieder
Stephen P. Shanesy
Shanesy Children's Trust f/b/o Kelsey Alice Shanesy
Shanesy Children's Trust f/b/o Nicholas Auster Shanesy
Dale R. Tetzlaff
Michael G. Thompson
Merrill Tomlin
Deborah L. Ulrich
Lucille Warren
Roger F. Warren
Andrew P. Warren Irrevocable Trust
Michael F. Warren Irrevocable Trust
Gary E. Wilson
Martin W. Wirt
Karl M. Wulf
Total Category 2
Total of Category 1 and Category 2......................... 780,000
=======
SCHEDULE C
Rayovac Corporation
5,200,000 Shares of Common Stock
(Par Value $0.01 Per Share)
1. The public offering price per share for the Securities, determined
as provided in said Section 2, shall be $ .
2. The purchase price per share for the U.S. Securities to be paid by
the several U.S. Underwriters shall be $ , being an amount equal to the public
offering price set forth above less $. per share; provided that the purchase
price per share for any U.S. Option Securities purchased upon the exercise of
the over-allotment option described in Section 2(b) shall be reduced by an
amount per share equal to any dividends or distributions declared by the Company
and payable on the Initial U.S. Securities but not payable on the U.S. Option
Securities.
SCHEDULE D
List of Persons and Entities Subject to Lock-up
THOMAS H. LEE EQUITY FUND III, L.P.
THOMAS H. LEE FOREIGN FUND III, L.P.
THL-CCI Limited Partnership
Carter J. Balfour
Kevin Balfour
Kenneth V. Biller
James A. Broderick
Fred Christopher Brooks
Bernard T. Conner
David M. Darkoch
Kenneth Drescher
Fleming Trust
Mark G. Hines
John E. Hofkes
Kent J. Hussey
David A. Jones
Pamela A. Josheff
Robert K. Kloppenburg
Richard A. Kreutz
Trygve Lonnebotn
Terrence P. McGraw
Rayovac Corporation Deferred Compensation
Emil J. Ripley and Laverne M. Ripley
Stephen P. Salzieder
Stephen P. Shanesy
Shanesy Children's Trust f/b/o Kelsey Alice Shanesy
Shanesy Children's Trust f/b/o Nicholas Auster Shanesy
Dale R. Tetzlaff
Michael G. Thompson
Merrill Tomlin
Deborah L. Ulrich
Lucille Warren
Roger F. Warren
Andrew P. Warren Irrevocable Trust
Michael F. Warren Irrevocable Trust
Gary E. Wilson
Martin W. Wirt
Karl M. Wulf
Schedule E
Subsidiaries of the Company
Direct Power Plus, Inc., a New York corporation
Minera Vidaluz S.A. DE C.V., a Mexico corporation
ROV Holding, Inc., a Delaware corporation
Vidor Battery Company, a Wisconsin corporation
Rayovac Foreign Sales Corporation, a Barbados corporation
Rovcal, Inc., a California corporation
Rayovac (UK) Limited, an United Kingdom corporation
Rayovac Europe Limited, an United Kingdom corporation
Rayovac Canada, Inc., a Canada corporation
Rayovac Far East Limited, a Hong Kong corporation
Zoephos International N.V., a Netherlands Antilles corporation
Rayovac Europe, B.V., a Netherlands Antilles corporation
Brisco Electronics, B.V., a Netherlands Antilles corporation
Brisco GmbH, a German corporation
EXHIBIT A-1
FORM OF OPINION OF DEWITT, ROSS & STEVENS S.C., WISCONSIN COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Bear, Stearns & Co. Inc.
Donaldson, Lufkin & Jenrette Securities Corporation
Smith Barney Inc.
as U.S. Representatives of the several
U.S. Underwriters to be named in the
U.S. Purchase Agreement
Merrill Lynch International
Bear, Stearns International Limited
Donaldson, Lufkin & Jenrette Securities Corporation
Smith Barney Inc.
as representatives of the several
international managers to be named
in the International Purchase Agreement
c/o Merrill Lynch & Co.
North Tower
World Financial Center
New York, New York 10210-1209
Ladies and Gentlemen:
We have acted as special counsel to Rayovac Corporation, a Wisconsin
corporation (the "Company") in connection with (i) the registration and sale by
the Company of 5,200,000 shares of the Company's Common Stock, par value $0.01
per share (the "U.S. Shares"), pursuant to the terms of the U.S. Purchase
Agreement (the "U.S. Purchase Agreement"), dated April [ ], 1998, between the
Company, the persons listed on Schedule B thereto (the "Selling Shareholders")
and the U.S. Underwriters named in Schedule A thereto (the "U.S. Underwriters")
and (ii) the registration and sale by the company of 1,300,000 shares of Common
Stock (the "International Shares," and together with the U.S. Shares, the
"Shares"), pursuant to the terms of the International Purchase Agreement (the
"International Purchase Agreement"), dated April [ ], 1998, between the Company,
the persons listed on Schedule B thereto (the "Selling Shareholders") and the
international managers named in Schedule A thereto (the "International
Managers").
-1-
This opinion is being furnished pursuant to Section 5(b) of the U.S.
Purchase Agreement and Section 5(b) of the International Purchase Agreement.
Capitalized terms used but not otherwise defined herein shall have the
respective meanings set forth in the U.S. Purchase Agreement.
In connection with this opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of (i) the Registration
Statement on Form S-3 (File No. 333- ) relating to the Shares filed with the
Securities and Exchange Commission (the "Commission") on April 2, 1998, under
the Securities Act of 1933, as amended (the "Act"), including the information
deemed to be a part of the Registration Statement at the time of effectiveness
pursuant to Rule 430A of the General Rules and Regulations under the Act (the
"Rules and Regulations") (such registration statement, as so amended, being
hereinafter referred to as the "Registration Statement"); (ii) the final U.S.
prospectus dated [ ], 1998, relating to the U.S. Shares filed with the
Commission on [ ], 1998, pursuant to Rule 424(b) of the Rules and Regulations
(the "U.S. Prospectus"); (iii) the final International Prospectus dated [ ],
1998, pursuant to Rule 424(b) of the Rules and Regulations (the "International
Prospectus" and together with the U.S. Prospectus, the "Prospectuses"); (iv)
executed copies of the U.S. Purchase Agreement and the International Purchase
Agreement; (v) a specimen certificate representing the Common Stock (the
"Specimen Certificate"); and (vi) the certificate of James A. Broderick, General
Counsel to the Company, attached hereto as Exhibit A (the "Officer's
Certificate"). We have also examined originals or certified or otherwise
identified to our satisfaction, of all such records of the Company and all such
agreements, certificates of public officials, certificates of officers or other
representatives of the Company and others and such other documents, certificates
and records as we have deemed necessary or appropriate as a basis for the
opinions set forth herein.
In our examination, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified, conformed or photostatic copies and the
authenticity of the originals of such copies. In making our examination of
executed documents, we have assumed that the parties thereto (including the
Company) had the power, corporate or other, to enter into and perform all
obligations thereunder and have also assumed the due authorization by all
requisite action, corporate or other, and execution and delivery by such parties
of such documents and the validity and binding effect thereof. As to any facts
material to the opinions expressed herein that are not independently established
or verified, we have relied upon oral or written statements and representations
of officers and other representatives of the Company.
For purposes of the opinions set forth below, with respect to any
document which by its terms or otherwise is governed by the laws of any
jurisdiction other than the United States of America or the State of Wisconsin,
such opinions are based solely upon our understanding of the plain language of
such document, and we express no opinion as to the interpretation of any such
document or of any term or provisions thereof under applicable governing law or
as to the effect on the opinions expressed herein of any interpretation hereof
inconsistent with such undertaking. For purposes of our opinion set forth in
paragraph 4, we have assumed that the certificates representing the shares
referred to in such paragraph conform to the Specimen Certificate. Our
2
opinion set forth in paragraph 12, is based solely upon the Officer's
Certificate and our discussions with James A. Broderick, General Counsel of the
Company, we have not performed any docket search in any jurisdiction, and have
not done any other investigation of any kind.
The opinions expressed herein are limited to the laws of the State of
Wisconsin and the federal laws of the United States of America to the extent
specifically referred to herein.
Based upon and subject to the foregoing and to the other qualifications
and limitations set forth herein, we are of the opinion that:
(i) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Wisconsin.
(ii) The issuance of the Shares is not subject to the preemptive or
other similar rights of any securityholder of the Company.
(iii) The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectuses and to enter into and perform its obligations under the U.S.
Purchase Agreement and the International Purchase Agreement.
(iv) The form of certificate used to evidence the Common Stock complies
in all material respects with all applicable statutory requirements, with any
applicable requirements of the charter and by-laws of the Company.
(v) The statements contained in or incorporated by reference therein,
in the Prospectuses, with respect to the "Description of Capital Stock," to the
extent that such statements constitute matters of law, summaries of legal
matters or legal conclusions are correct in all material respects.
(vi) The Company is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify or
to be in good standing would not result in a Material Adverse Effect.
(vii) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectuses under the caption "Capitalization"
(except for subsequent issuances, if any, pursuant to the U.S. Purchase
Agreement and the International Purchase Agreement); the shares of issued and
outstanding capital stock have been and will have been at the Closing Time duly
authorized and validly issued and are fully paid and non-assessable; except to
the extent such shares are assessable as provided in Section 180.0622 of the
Wisconsin Business Corporation Law, and none of the outstanding shares of
capital stock of the Company was or will have been at the Closing Time issued in
violation of the preemptive or other similar rights of any securityholder of the
Company.
(viii) The Shares to be purchased by the U.S. Underwriters and the
International Managers from the Selling Shareholders have duly authorized for
issuance and sale to the
3
Underwriters pursuant to the U.S. Purchase Agreement or the International
Purchase Agreement and when delivered by the Selling Shareholder pursuant
thereto, will by validly issued, and fully paid and non-assessable and no holder
of the Shares is or will by subject to personal liability by reason of being
such a holder, except to the extent such shares are assessable as provided in
Section 180.0622 of the Wisconsin Business Corporation Law.
(ix) Vidor Battery Company, the sole subsidiary is incorporated or
organized under the laws of the State of Wisconsin (a "Wisconsin Subsidiary")
has been duly incorporated and is validly existing as a corporation in good
standing under the laws of the State of Wisconsin, has corporate power and
authority to own, lease and operate its properties and to conduct its business
as described in the Prospectuses and is duly qualified as a foreign corporation
to transact business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify or
to be in good standing would not result in a Material Adverse Effect.
(x) The information in Part II of the Registration Statement under Item
15, "Indemnification of Officers and Directors," to the extent that it
constitutes matters of law, summaries of legal matters, the Company's charter
and bylaws or legal proceedings, or legal conclusions, has been reviewed by us
and is correct in all material respects.
(xi) The U.S. Purchase Agreement and the International Purchase
Agreement have been duly authorized, executed and delivered by the Company.
(xii) To the best of our knowledge, neither the Company nor its sole
Wisconsin Subsidiary is in violation of its charter or by-laws and no default by
the Company or its Wisconsin Subsidiary exists in the due performance or
observance of any material obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan agreement, note, lease or
other agreement or instrument that is described or referred to in the
Registration Statement or the Prospectuses or filed or incorporated by reference
as an exhibit to the Registration Statement.
(xiii) The execution, delivery and performance of the U.S. Purchase
Agreement and the International Purchase Agreement and the consummation of the
transactions contemplated in the U.S. Purchase Agreement, the International
Purchase Agreement and in the Registration Statement and compliance by the
Company with its obligations under the U.S. Purchase Agreement and the
International Purchase Agreement have been duly authorized by all necessary
corporate action and do not and will not, whether with or without the giving of
notice or lapse of time or both, conflict with or constitute a breach of, or
default or Repayment Event (as defined in Section 1(a)(x) of the Purchase
Agreements) under, or result in the creation or imposition of any lien, charge
or encumbrance upon any property or assets of the Company or any Wisconsin
Subsidiary pursuant to any contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, lease or any other agreement or instrument to which the
Company or its Wisconsin Subsidiary is a party or by which it or any of them may
be bound, or to which any of the property or assets of the Company or its
Wisconsin Subsidiary is subject (except for such conflicts, breaches or defaults
or liens, charges or encumbrances that would not have a Material Adverse
Effect), nor will such action result in any violation of the provisions of the
charter or by-laws of
4
the Company or any Wisconsin Subsidiary, or any applicable law, statute, rule,
regulation, judgment, order, writ or decree, known to us, of any government,
government instrumentality or court, domestic or foreign, having jurisdiction
over the Company or any Wisconsin Subsidiary or any of their respective
properties, assets or operations.
5
EXHIBIT A-2
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Bear, Stearns & Co. Inc.
Donaldson, Lufkin & Jenrette Securities Corporation
Smith Barney Inc.
as U.S. Representatives of the several
U.S. Underwriters to be named in the
U.S. Purchase Agreement
Merrill Lynch International
Bear, Stearns International Limited
Donaldson, Lufkin & Jenrette Securities Corporation
Smith Barney Inc.
as representatives of the several
international managers to be named
in the International Purchase Agreement
c/o Merrill Lynch & Co.
North Tower
World Financial Center
New York, New York 10210-1209
Re: Public Offering of 6,700,000 Shares
of Common Stock of Rayovac Corporation
Ladies and Gentlemen:
We have acted as special counsel to Rayovac Corporation, a Wisconsin
corporation (the "Company"), in connection with (i) the registration by the
Company and sale by certain shareholders of 5,200,000 shares of the Company's
Common Stock, par value $0.01 per share (the "U.S. Shares"), pursuant to the
terms of the U.S. Purchase Agreement (the "U.S. Purchase Agreement"), dated
April [ ], 1998, among the Company, the U.S. Underwriters named in Schedule A
thereto (the "U.S. Underwriters") and the shareholders of the Company named in
Schedule B thereto (the "Selling Shareholders") and (ii) the registration by the
Company and sale by the Selling Shareholders of 1,300,000 shares of Common Stock
(the "International Shares,"
1
and together with the U.S. Shares, the "Shares"), pursuant to the terms of the
International Purchase Agreement (the "International Purchase Agreement"), dated
April [ ], 1998, between the Company, and the international managers named in
Schedule A thereto (the "International Managers") and the Selling Shareholders.
This opinion is being furnished pursuant to Section 5(b) of each of the
U.S. Purchase Agreement and the International Purchase Agreement. Capitalized
terms used but not otherwise defined herein shall have the respective meanings
set forth in the U.S. Purchase Agreement.
In connection with this opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of (i) the Registration
Statement on Form S-3 (File No. 333- ) relating to the Shares filed with the
Securities and Exchange Commission (the "Commission") on April 2, 1998 under the
Securities Act of 1933, as amended (the "Act"), including the information deemed
to be a part of the Registration Statement at the time of effectiveness pursuant
to Rule 430A of the General Rules and Regulations under the Act (the "Rules and
Regulations") (such registration statement, as so amended, being hereinafter
referred to as the "Registration Statement"); (ii) the final U.S. prospectus
dated April [ ], 1998, relating to the U.S. Shares filed with the Commission on
April [ ], 1998, pursuant to Rule 424(b) of the Rules and Regulations (the
""U.S. Prospectus"); (iii) the final International Prospectus dated April [ ],
1998, relating to the International Shares filed with the Commission on April [
], 1998, pursuant to Rule 424(b) of the Rules and Regulations (the
"International Prospectus" and together with the U.S. Prospectus, the
"Prospectuses"); (iv) executed copies of the U.S. Purchase Agreement and the
International Purchase Agreement; (v) a specimen certificate representing the
Common Stock (the "Specimen Certificate"); and (vi) the certificate of James A.
Broderick, General Counsel to the Company, attached hereto as Exhibit A (the
"Officer's Certificate"). We have also examined originals or copies certified or
otherwise identified to our satisfaction, of all such records of the Company and
all such agreements, certificates of public officials, certificates of officers
or other representatives of the Company and others and such other documents,
certificates and records as we have deemed necessary or appropriate as a basis
for the opinions set forth herein.
In our examination, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified, conformed or Photostat copies and the
authenticity of the originals of such copies. In making our examination of
executed documents, we have assumed that the parties thereto (including the
Company) had the power, corporate or other, to enter into and perform all
obligations thereunder and have also assumed the due authorization by all
requisite action, corporate or other, and execution and delivery by such parties
of such documents and the validity and binding effect thereof. As to any facts
material to the opinions expressed herein that were not independently
established or verified, we have relied upon oral or written statements and
representations of officers and other representatives of the Company.
For purposes of the opinions set forth below, with respect to any
document which by its terms or otherwise is governed by the laws of any
jurisdiction other than the United States of
2
America or the State of New York, such opinions are based solely upon our
understanding of the plain language of such document, and we express no opinion
as to the interpretation of any such document or of any term or provisions
thereof under applicable governing law or as to the effect on the opinions
expressed herein of any interpretation hereof inconsistent with such
understanding. For purposes of our opinion set forth in paragraph 4, we have
assumed that the certificates representing the shares referred to in such
paragraph conform to the Specimen Certificate. Our opinion set forth in
paragraph 5, is based solely upon the Officer's Certificate and our discussions
with James A. Broderick, General Counsel of the Company; we have not performed
any docket search in any jurisdiction, and have not done any other investigation
of any kind.
The opinions expressed herein are limited to the laws of the State of
New York, the General Corporation Law of the State of Delaware and the federal
laws of the United States of America to the extent specifically referred to
herein.
As used herein, (i) the term "Applicable Laws" means the General
Corporation Law of the state of Delaware and those laws, rules and regulations
of the State of New York and of the United States of America that, in our
experience, are normally applicable to transactions of the type contemplated by
the U.S. Purchase Agreement, but without our having made any special
investigation concerning the applicability of any other law, rule or regulation;
provided, that such term does not include any federal or state securities or
other antifraud laws or the rules and regulations of the National Association of
Securities Dealers, Inc.; (ii) the term "Applicable Contracts" means those
contracts and agreements listed on Annex A to the Officer's Certificate; and
(iii) the term "Governmental Approval" means any consent, approval, license,
authorization or validation of, or filing, recording or registration with, any
United States Federal or New York executive, legislative, judicial,
administrative or regulatory body (a "Governmental Entity"), pursuant to
Applicable Laws.
Based upon and subject to the foregoing and to the other qualifications
and limitations set forth herein, we are of the opinion that:
1. All of the issued and outstanding capital stock of ROV Holding, Inc.
has been duly authorized and validly issued and is fully paid and nonassessable.
None of the outstanding shares of capital stock of ROV Holding, Inc. was issued
in violation of the preemptive rights of any security holder of ROV Holding,
Inc. arising under the Certificate of Incorporation or By-laws of ROV Holding
Inc. or any other similar rights arising under any Applicable Contract.
2. To our knowledge, based solely on our examination of the stock
record book of ROV Holding, Inc., the issued and outstanding capital stock of
ROV Holding, Inc. is owned of record by the Company, free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or equity arising
under any Applicable contract, except for the pledge of the capital stock of ROV
Holding, Inc. by the Company pursuant to a Company Pledge Agreement dated as of
September 12, 1996 between the Company and Bank of America National Trust and
Savings Association in its capacity as administrative agent fore the lenders
referred to therein.
3
3. The Registration Statement, as of its effective date, and the
Prospectuses, as of their date, appeared on their face to be appropriately
responsive in all material respects to the requirements of the Securities Act
and the Rules and Regulations, except that, in each case, we express no opinion
as to the financial statements, schedules and other financial data included
therein or excluded therefrom or the exhibits to the Registration Statement, and
we do not assume any responsibility for the accuracy, completeness or fairness
of the statements contained in the Registration Statement except to the extent
indicated in paragraph 6 below.
4. The Specimen Certificate complies in all material respects with any
requirements of the New York Stock Exchange applicable to companies whose
securities are listed thereon.
5. To our knowledge, except as set forth in the Registration Statement
or the Prospectuses, there are no legal, regulatory or governmental proceedings
pending in any New York State or federal court to which the Company or any
subsidiary of the Company listed on Exhibit 21 to the Registration Statement
(each, a "Subsidiary") is a party, or to which the property of the Company or
any Subsidiary is subject, which might reasonably be expected to result in a
Material Adverse Effect, or which might reasonably be expected to materially and
adversely affect the transactions contemplated by the U.S. Purchase Agreement or
the International Purchase Agreement or the performance by the Company of its
obligations thereunder.
6. The statements in the Prospectuses(or incorporated by reference
therein) under the captions "Description of Certain Indebtedness," "Shares
Eligible for Future Sale," "Underwriting" and "Certain Federal Income Tax
Considerations," to the extent that such statements constitute matters of law,
summaries of legal matters or legal conclusions, are correct in all material
respects.
7. No Governmental Approval is required under Applicable Laws in
connection with the consummation by the Company of the transactions contemplated
by the U.S. Purchase Agreement or the International Purchase Agreement except
that we do not express any opinion as to any consent or authorization which may
have become applicable to the Company as a result of the involvement of the U.S.
Underwriters or of the International Managers in the transactions contemplated
by the U.S. Purchase Agreement or the International Purchase Agreement, because
of their legal or regulatory status or because of any other facts specifically
pertaining to them.
8. Neither the execution and delivery of the U.S. Purchase Agreement or
the International Purchase Agreement nor the consummation of the transactions
contemplated therein will contravene any Applicable Laws.
9. To our knowledge, based solely upon a review of the Applicable
Contracts, there are no Applicable Contracts of a character required to be filed
as exhibits to the Registration Statement which are not filed as required.
4
10. The execution, delivery and performance of the U.S. Purchase
Agreement and the International Purchase Agreement and the consummation of the
transactions contemplated thereby and the use of the proceeds from the sale of
the Shares as described in the Prospectuses under the caption "Use of Proceeds"
do not and will not, either by itself or the giving of notice or the lapse of
time or both, conflict with or constitute a breach of or a default or Repayment
Event (as defined in Section 1(a)(x) of the Purchase Agreements) under any
Applicable Contract, or result in the creation or imposition of any lien, charge
or encumbrance upon any property or assets of the Company or any Subsidiary
pursuant to any Applicable Contract to which the Company or any Subsidiary is a
party or by which it or any of them may be bound, or to which any of the
property or assets of the Company or any Subsidiary is subject, or any
Applicable Law or Governmental Approval having jurisdiction over the Company or
any Subsidiary or any of their respective properties, assets or operations
except in any such case for any such conflicts, breaches or defaults which would
not have a Material Adverse Effect), nor will such action result in any
violation of the provisions of the charter or by-laws of the Company or any
Subsidiary
11. Except as disclosed in the Registration Statement, to our
knowledge, there are no persons with registration rights or other similar rights
under any Applicable Contract to have any shares of Common Stock registered
pursuant to the Registration Statement or otherwise registered by the Company
pursuant to the 1933 Act.
12. The Company is not subject to registration as an investment company
under the Investment Company Act of 1940, as amended.
We have been orally advised by the Commission that the Registration
Statement was declared effective under the Act at [ ], Washington, D.C. time,
April [ ], 1998; the required filing of the Prospectuses pursuant to Rule 424(b)
has been made in the manner and within the time period required by Rule 424(b);
and, to our knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose have
been instituted or are pending or threatened by the Commission.
In addition, we have participated in conferences with officers and
other representatives of the Company, representatives of the independent public
accountants for the Company, and you and your counsel, at which the contents of
the Registration Statement, the Prospectuses and related matters were discussed
and, although we are not passing upon, and do not assume any responsibility
for, the accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectuses and have made no independent check or
verification thereof, on the basis of the foregoing, no facts have come to our
attention that have led us to believe that the Registration Statement, at the
time it became effective, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Prospectuses, as of their
dates and as of the date hereof, contained or contains an untrue statement of a
material fact or omitted or omit to state a material fact necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading, except that we express no opinion or belief with respect
to the financial statements, schedules and other financial data included therein
or excluded therefrom or the exhibits to the Registration Statement.
5
This opinion is furnished to you solely for your benefit in connection
with the closings under the U.S. Purchase Agreement and the International
Purchase Agreement occurring today and is not to be used, circulated, quoted or
otherwise referred to for any other purpose or relied upon by any other person
without our prior express written permission.
Very truly yours,
6
EXHIBIT A-3
FORM OF OPINION OF COUNSEL OF SELLING SHAREHOLDERS
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Bear, Stearns & Co., Inc.
Donaldson, Lufkin & Jenrette Securities Corporation
Smith Barney Inc.
as U.S. Representatives of the several
U.S. Underwriters
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
MERRILL LYNCH INTERNATIONAL
Bear, Stearns International Limited
Donaldson, Lufkin & Jenrette Securities Corporation
Smith Barney Inc.
as Lead Managers for the several International
Managers
c/o Merrill Lynch International
25 Ropemaker Place
London EC2Y 9LY
England
Re: Selling Shareholder Opinion pursuant
to Section 5(b) of the Purchase Agreement
Ladies and Gentlemen:
We have acted as special counsel to Thomas H. Lee Equity Fund III,
L.P., THL-CCI Limited Partnership, Thomas H. Lee Foreign Fund III, L.P., and the
shareholders listed on Schedule B (each a Selling Shareholder") in connection
with the execution and delivery by the Selling Shareholders of (i) the U.S.
Purchase Agreement dated as of April ___, 1998 (the "U.S. Purchase Agreement")
among Rayovac Corporation, a Wisconsin corporation (the "Company"), the Selling
Shareholders, and Merrill Lynch, Pierce, Fenner & Smith Incorporated, Donaldson,
Lufkin & Jenrette Securities Corporation, Bear Stearns & Co., Inc., and Smith
Barney Inc. as representatives (the "U.S. Representatives") of the U.S.
Underwriters listed in Schedule A thereto
1
and (ii) the International Purchase Agreement dated as of April ___, 1998 (the
"International Purchase Agreement") among the Company, the Selling Shareholders,
and Merrill Lynch, Pierce, Fenner & Smith Incorporated, Donaldson, Lufkin &
Jenrette Securities Corporation, Bear Stearns International Limited, and Smith
Barney Inc. as lead managers (the "Lead Managers") on behalf of the
International Managers listed in Schedule A thereto, and the sale by the Selling
Shareholders to the U.S. Underwriters (as defined in the U.S. Purchase
Agreement) and the International Managers (as defined in the International
Purchase Agreement) of an aggregate of 6,500,000 shares of Common Stock, par
value $0.01 per share, of the Company (the "Common Stock"), acting severally and
not jointly, to (i) the U.S. Underwriters, acting severally and not jointly, to
purchase 5,200,000 shares of Common Stock (the "U.S. Securities") and (ii) the
International Managers, acting severally and not jointly, to purchase 1,300,000
additional shares of Common Stock (the "International Securities," and together
with the U.S. Securities, the "Securities"). This opinion is delivered to you
pursuant to Section 5(b) of each of the U.S. Purchase Agreement and the
International Purchase Agreement. Capitalized terms used herein but not
otherwise defined herein shall have the same meaning ascribed to them in the
U.S. Purchase Agreement.
In connection with this opinion, we have examined or are familiar with
originals or copies, certified or otherwise identified to our satisfaction, of
(i) the U.S. Purchase Agreement; (ii) the International Purchase Agreement;
(iii) the Power of Attorney and Custody Agreement dated as of April ___, 1998
among each Selling Shareholder and ________________________, each acting as
Attorney-in-Fact (each, an "Attorney-in-Fact" and together, the
"Attorneys-in-Fact"), and [Firstar Trust Bank], as Custodian (the "Custodian")
(the "Custody Agreement" and together with the U.S. Purchase Agreement and the
International Purchase Agreement, the "Transaction Documents"), (iv) the Limited
Partnership Agreement of Thomas H. Lee Foreign Fund III, L.P. (the "Foreign
Fund"), dated as of February 6, 1996, by and among THL Equity Advisors III
Limited Partnership, a Massachusetts limited partnership ("Advisors"), and the
limited partners listed on Exhibit A thereto; (v) the Second Amended and
Restated Limited Partnership Agreement of Thomas H. Lee Equity Fund III, L.P.
(the "Equity Fund" and together with the Foreign Fund, the "Funds"), dated as of
December 22, 1995, by and among Advisors and the limited partners listed on
Exhibit A thereto; (vi) the Thirteenth Amended and Restated Agreement of Limited
Partnership of THL-CCI Limited Partnership ("CCI", and together with the Funds,
the "Partnerships"), dated as of January 17, 1997, by and among THL Investment
Management Corp. and the persons and entities admitted as limited partners;
(vii) the Certificate of Limited Partnership of the Foreign Fund, dated as of
January 23, 1996; (viii) the Certificate of Limited Partnership of the Equity
Fund, dated as of February 14, 1995; (ix) the Certificate of Limited Partnership
of CCI, dated as of July 10, 1992, as amended November 30, 1993 and March 13,
1996; (x) the First Amended and Restated Agreement of Limited Partnership of
Advisors, dated as of August 15, 1995 by and among THL Equity Trust III, a
Massachusetts business trust ("Equity Trust"), and the limited partners
signatories thereto; (xi) the Certificate of Limited Partnership of Advisors,
dated as of February 16, 1995; (xii) the Declaration of Trust of Equity Trust,
made as of February 14, 1995, by and between Thomas H. Lee, as grantor, and the
trustees signatories thereto; (xiii) the Consent of Trustees of Equity Trust,
dated as of January 17, 1997; (xiv) the Articles of Organization and By-laws of
THL Investment Management Corp., each as in effect as of the date hereof; (xv)
the Consent of Sole Director of THL Investment
2
Management Corp., dated as of January 17, 1997; (xvi) the Certificate of
Advisors, as general partner of the Equity Fund, dated as of January 17, 1997;
(xvii) the Certificate of Advisors, as general partner of the Foreign Fund,
dated as of November 26, 1997; (xviii) the Certificate of Equity Trust, as
general partner of Advisors, dated as of November 26, 1997; (xix) the
Certificate of THL Investment Management Corp., as general partner of CCI, dated
as of November 26, 1997; (xx) the Officer's Certificate of THL Investment
Management Corp., dated as of November 26, 1997; (xxi) the Certificate of Equity
Trust, dated as of November 26, 1997 and (xxii) certificates representing the
Securities. We have also examined originals or copies, certified or otherwise
identified to our satisfaction, of such records of each of the Partnerships and
others and such agreements, certificates of public officials, certificates of
officers or other representatives of each of the Partnerships and others and
such other documents, certificates and records as we have deemed necessary or
appropriate as a basis for the opinions set forth herein.
In our examination, we have assumed the genuineness of all signatures,
the legal capacity of natural persons, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such latter documents. As to any facts material
to the opinions set forth herein which we did not independently establish or
verify, we have relied upon statements and representations of officers and other
representatives of each of the Partnerships and others.
As used herein, (i) the term "Applicable Laws" means the General
Corporation Law and Revised Uniform Limited Partnership Act of the State of
Delaware, the Business Corporation Law and the Uniform Limited Partnership Act
of the Commonwealth of Massachusetts and those laws, rules and regulations of
the State of New York and of the United States of America that, in our
experience, are normally applicable to transaction of the type contemplated by
the Transaction Documents, but without our having made any special investigation
concerning the applicability of any other law, rule or regulation; provided,
that such term does not include any federal or state securities or other
antifraud laws or the rules and regulations of the National Association of
Securities Dealers, Inc.; (ii) the term "Applicable Contracts" means those
contracts and agreements listed on Annex A hereto; and (iii) the term
"Governmental Approval" means any consent, approval, license, authorization or
validation of, or filing, recording or registration with, any United States
Federal or Delaware, Massachusetts or New York executive, legislative, judicial,
administrative or regulatory body (a "Governmental Entity"), pursuant to
Applicable Laws.
The opinions expressed herein are limited to (i) the General
Corporation Law and the Revised Uniform Limited Partnership Act of the State of
Delaware; (ii) the Business Corporation Law and the Uniform Limited Partnership
Act of the Commonwealth of Massachusetts; (iii) the laws of the State of New
York; and (iv) the federal laws of the United States of America to the extent
specifically referred to herein.
Based upon and subject to the foregoing, and to the limitations,
qualifications, exceptions and assumptions set forth herein, we are of the
opinion that:
3
1. No Governmental Approval is required under Applicable Laws in
connection with the offer, sale or delivery of the Securities by the Selling
Shareholders under the U.S. Purchase Agreement and the International Purchase
Agreement or the performance by each of the Selling Shareholders of its
obligations under any of the Transaction Documents; provided, that we express no
opinion as to any Governmental Approval which may be required under state
securities laws or that may have become applicable to any Selling Shareholder as
a result of your involvement in the U.S. Purchase Agreement or the International
Purchase Agreement because of your legal or regulatory status or because of any
other facts specifically pertaining to you.
2. Each of the Custody Agreements, the U.S. Purchase Agreement and the
International Purchase Agreement has been duly executed and delivered by each
Selling Shareholder. The Custody Agreement to which each Selling Shareholder is
a party constitutes the valid and binding agreement of such Selling Shareholder
enforceable against such Selling Shareholder in accordance with its terms,
except that enforcement may be limited by applicable bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium or other similar laws nor or
hereinafter in effect relating to or affecting creditors' rights generally and
by general principals of equity (regardless of whether enforceability is
considered in a proceeding at law or in equity).
3. The Attorney-in-Fact has been duly authorized by each Selling
Shareholder to deliver and sell the U.S. Securities and the International
Securities on behalf of each Selling Shareholder in accordance with the terms of
each of the U.S. Purchase Agreement and the International Purchase Agreement.
4. The execution, delivery and performance of each of the Transaction
Documents and the sale and delivery of the U.S. Securities and the International
Securities and the consummation of the transactions contemplated in each of the
U.S. Purchase Agreement and the International Purchase Agreement and compliance
by each Selling Shareholder with its obligations under each of the U.S. Purchase
Agreement and the International Purchase Agreement have been duly authorized by
all necessary partnership action on the part of each Selling Shareholder and do
not and will not, whether with or without the giving of notice or passage of
time or both, conflict with or constitute a breach of, or default under any
Applicable Law or Governmental Approval of any Governmental Entity having
jurisdiction over any Selling Shareholder or any of their properties, or under
any indenture, mortgage, deed of trust, loan, credit agreement, note or other
debt instrument to which any Selling Shareholder is a party or pursuant to which
any of them is bound or any of their assets is subject and pursuant to which any
Selling Shareholder has incurred indebtedness (except for such conflicts,
breaches or defaults or liens, charges or encumbrances which would not have a
material adverse effect on the condition (financial or otherwise), earnings,
business affairs or business prospects of any Selling Shareholder, whether or
not arising in the ordinary course of business) nor will such action result in
any violation of the provisions of the partnership agreements of any of the
Selling Shareholders, as the case may be.
5. To our knowledge, (i) each Selling Shareholder has the power and
authority as a limited partnership as the case to sell, transfer and deliver the
U.S. Securities and the International Securities pursuant to each of the U.S.
Purchase Agreement and the International Purchase Agreement and (ii) each
Selling Shareholder has the power and authority to sell,
4
transfer and deliver the U.S. Securities and the International Securities
pursuant to each of the U.S. Purchase Agreement and the International Purchase
Agreement. Assuming that neither any U.S. Representatives nor any U.S.
Underwriter has notice of adverse claims with respect to the certificates
identified on Schedule B as representing the U.S. Securities, then upon physical
delivery to Merrill Lynch & Co. as designee of the U.S. Representatives in the
State of New York of such certificates indorsed to the U.S. Representatives or
indorsed in blank, the U.S. Representatives will acquire such certificates (and
the shares of Common Stock represented thereby) free of any adverse claims
within the meaning of the Uniform Commercial Code in effect in the State of New
York. Assuming that neither any Lead Manager nor any International Manager has
notice of adverse claims with respect to the certificates identified on Schedule
B as representing the International Securities, then upon physical delivery to
Merrill Lynch & Co. as designee of the Lead Managers in the State of New York of
such certificates indorsed to the Lead Managers or indorsed in blank, the Lead
Managers will acquire such certificates (and the shares of Common Stock
represented thereby) free of any adverse claims within the meaning of the
Uniform Commercial Code in effect in the State of New York.
This opinion is furnished to you solely for your benefit in connection
with the closings under the U.S. Purchase Agreement and the International
Purchase Agreement occurring today and is not to be used, circulated, quoted or
otherwise referred to for any other purpose or relied upon by any other person
without our prior express written permission.
Very truly yours,
5
EXHIBIT A-4
FORM OF OPINION OF COUNSEL OF CATEGORY 2 SELLING SHAREHOLDERS
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Bear, Stearns & Co., Inc.
Donaldson, Lufkin & Jenrette Securities Corporation
Smith Barney Inc.
as U.S. Representatives of the several
U.S. Underwriters
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
MERRILL LYNCH INTERNATIONAL
Bear, Stearns International Limited
Donaldson, Lufkin & Jenrette Securities Corporation
Smith Barney Inc.
as Lead Managers for the several International
Managers
c/o Merrill Lynch International
25 Ropemaker Place
London EC2Y 9LY
England
Re: Selling Shareholder Opinion pursuant
to Section 5(b) of the Purchase Agreement
-----------------------------------------
Ladies and Gentlemen:
We have acted as special counsel to __________________________ (the
"Selling Shareholder") in connection with the execution and delivery by the
Selling Shareholders of (i) the U.S. Purchase Agreement dated as of April ___,
1998 (the "U.S. Purchase Agreement") among Rayovac Corporation, a Wisconsin
corporation (the "Company"), the Selling Shareholders, and Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Donaldson, Lufkin & Jenrette Securities
Corporation, Bear Stearns & Co., Inc., and Smith Barney Inc. as representatives
(the "U.S. Representatives") of the U.S. Underwriters listed in Schedule A
thereto and (ii) the International Purchase Agreement dated as of April ___,
1998 (the "International Purchase Agreement") among the Company, the Selling
Shareholders, and Merrill Lynch, Pierce, Fenner & Smith Incorporated, Donaldson,
Lufkin & Jenrette Securities Corporation, Bear Stearns
1
International Limited, and Smith Barney Inc. as lead managers (the "Lead
Managers") on behalf of the International Managers listed in Schedule A thereto,
and the sale by the Selling Shareholders to the U.S. Underwriters (as defined in
the U.S. Purchase Agreement) and the International Managers (as defined in the
International Purchase Agreement) of an aggregate of 6,500,000 shares of Common
Stock, par value $0.01 per share, of the Company (the "Common Stock"), acting
severally and not jointly, to (i) the U.S. Underwriters, acting severally and
not jointly, to purchase 5,200,000 shares of Common Stock (the "U.S.
Securities") and (ii) the International Managers, acting severally and not
jointly, to purchase 1,300,000 additional shares of Common Stock (the
"International Securities," and together with the U.S. Securities, the
"Securities"). This opinion is delivered to you pursuant to Section 5(b) of each
of the U.S. Purchase Agreement and the International Purchase Agreement.
Capitalized terms used herein but not otherwise defined herein shall have the
same meaning ascribed to them in the U.S. Purchase Agreement.
In connection with this opinion, we have examined or are familiar with
originals or copies, certified or otherwise identified to our satisfaction, of
(i) the U.S. Purchase Agreement; (ii) the International Purchase Agreement;
(iii) the Power of Attorney and Custody Agreement dated as of April ___, 1998
among each Selling Shareholder and _______________________, each acting as
Attorney-in-Fact (each, an "Attorney-in-Fact" and together, the
"Attorneys-in-Fact"), and [Firstar Trust Bank], as Custodian (the "Custodian")
(the "Custody Agreement" and together with the U.S. Purchase Agreement and the
International Purchase Agreement, the "Transaction Documents"), and (iv)
certificates representing the Securities. We have also examined originals or
copies, certified or otherwise identified to our satisfaction, of such
agreements, certificates of public officials, certificates of officers or other
representatives of the Selling Shareholders and such other documents,
certificates and records as we have deemed necessary or appropriate as a basis
for the opinions set forth herein.
In our examination, we have assumed the genuineness of all signatures,
the legal capacity of natural persons, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such latter documents. As to any facts material
to the opinions set forth herein which we did not independently establish or
verify, we have relied upon statements and representations of the Selling
Shareholder.
As used herein, (i) the term "Applicable Laws" means the General
Corporation Law and Revised Uniform Limited Partnership Act of the State of
Delaware, the Business Corporation Law and the Uniform Limited Partnership Act
of the Commonwealth of Massachusetts and those laws, rules and regulations of
the State of New York and of the United States of America that, in our
experience, are normally applicable to transaction of the type contemplated by
the Transaction Documents, but without our having made any special investigation
concerning the applicability of any other law, rule or regulation; provided,
that such term does not include any federal or state securities or other
antifraud laws or the rules and regulations of the National Association of
Securities Dealers, Inc.; (ii) the term "Applicable Contracts" means those
contracts and agreements listed on Annex A hereto; and (iii) the term
"Governmental Approval" means any consent, approval, license, authorization or
validation of, or filing, recording or registration with, any United States
Federal or Delaware, Massachusetts or
2
New York executive, legislative, judicial, administrative or regulatory body (a
"Governmental Entity"), pursuant to Applicable Laws.
The opinions expressed herein are limited to (i) the General
Corporation Law of the State of Delaware; (ii) the Business Corporation Law of
the Commonwealth of Massachusetts; (iii) the laws of the State of New York; and
(iv) the federal laws of the United States of America to the extent specifically
referred to herein.
Based upon and subject to the foregoing, and to the limitations,
qualifications, exceptions and assumptions set forth herein, we are of the
opinion that:
1. No Governmental Approval is required under Applicable Laws in
connection with the offer, sale or delivery of the Securities by the Selling
Shareholder under the U.S. Purchase Agreement and the International Purchase
Agreement or the performance by such Selling Shareholders of its obligations
under any of the Transaction Documents; provided, that we express no opinion as
to any Governmental Approval which may be required under state securities laws
or that may have become applicable to the Selling Shareholder as a result of
your involvement in the U.S. Purchase Agreement or the International Purchase
Agreement because of your legal or regulatory status or because of any other
facts specifically pertaining to you.
2. Each of the Custody Agreements, the U.S. Purchase Agreement and the
International Purchase Agreement has been duly executed and delivered by the
Selling Shareholder. The Custody Agreement to which such Selling Shareholder is
a party constitutes the valid and binding agreement of such Selling Shareholder
enforceable against such Selling Shareholder in accordance with its terms,
except that enforcement may be limited by applicable bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium or other similar laws nor or
hereinafter in effect relating to or affecting creditors' rights generally and
by general principals of equity (regardless of whether enforceability is
considered in a proceeding at law or in equity).
3. The Attorney-in-Fact has been duly authorized by such Selling
Shareholder to deliver and sell the U.S. Securities and the International
Securities on behalf of such Selling Shareholder in accordance with the terms of
each of the U.S. Purchase Agreement and the International Purchase Agreement.
4. The execution, delivery and performance of each of the Transaction
Documents and the sale and delivery of the U.S. Securities and the International
Securities and the consummation of the transactions contemplated in each of the
U.S. Purchase Agreement and the International Purchase Agreement and compliance
by such Selling Shareholder with its obligations under each of the U.S. Purchase
Agreement and the International Purchase Agreement have been duly authorized on
the part of such Selling Shareholder and do not and will not, whether with or
without the giving of notice or passage of time or both, conflict with or
constitute a breach of, or default under any Applicable Law or Governmental
Approval of any Governmental Entity having jurisdiction over such Selling
Shareholder or any of its properties or any material contract known to us to
which the Seller is a party or to which any of its properties are subject.
3
5. To our knowledge, such Selling Shareholder has the power and
authority to sell, transfer and deliver the U.S. Securities and the
International Securities pursuant to each of the U.S. Purchase Agreement and the
International Purchase Agreement. Assuming that neither any U.S. Representatives
nor any U.S. Underwriter has notice of adverse claims with respect to the
certificates identified on Schedule B as representing the U.S. Securities, then
upon physical delivery to Merrill Lynch & Co. as designee of the U.S.
Representatives in the State of New York of such certificates indorsed to the
U.S. Representatives or indorsed in blank, the U.S. Representatives will acquire
such certificates (and the shares of Common Stock represented thereby) free of
any adverse claims within the meaning of the Uniform Commercial Code in effect
in the State of New York. Assuming that neither any Lead Manager nor any
International Manager has notice of adverse claims with respect to the
certificates identified on Schedule B as representing the International
Securities, then upon physical delivery to Merrill Lynch & Co. as designee of
the Lead Managers in the State of New York of such certificates indorsed to the
Lead Managers or indorsed in blank, the Lead Managers will acquire such
certificates (and the shares of Common Stock represented thereby) free of any
adverse claims within the meaning of the Uniform Commercial Code in effect in
the State of New York.
This opinion is furnished to you solely for your benefit in connection
with the closings under the U.S. Purchase Agreement and the International
Purchase Agreement occurring today and is not to be used, circulated, quoted or
otherwise referred to for any other purpose or relied upon by any other person
without our prior express written permission.
Very truly yours,
\
4
EXHIBIT B
_________________, 1998
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Bear, Stearns & Co. Inc.
Donaldson, Lufkin & Jenrette Securities Corporation
Smith Barney Inc.
as U.S. Representatives of the several
U.S. Underwriters to be named in the
within-mentioned U.S. Purchase Agreement
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Re: Proposed Public Offering by Rayovac Corporation
Dear Sirs:
The undersigned, a stockholder of Rayovac Corporation, a Wisconsin
Corporation (the "Company") understands that Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated ("Merrill Lynch"), Bear, Stearns & Co. Inc.,
Donaldson, Lufkin & Jenrette Securities Corporation and Smith Barney Inc.
propose to enter into a U.S. Purchase Agreement (the "U.S. Purchase Agreement")
with the Company providing for the public offering of shares (the "Securities")
of the Company's common stock, par value $0.01 per share (the "Common Stock").
In recognition of the benefit that such an offering will confer upon the
undersigned as a stockholder of the Company, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
undersigned agrees with each underwriter to be named in the U.S. Purchase
Agreement that, during a period of 90 days from the date of the U.S. Purchase
Agreement, the undersigned will not, without the prior written consent of
Merrill Lynch, directly or indirectly, (i) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant for the sale of, or otherwise
dispose of or transfer any shares of the Company's Common Stock or any
securities convertible into or exchangeable or exercisable for Common Stock,
whether now owned or hereafter acquired by the undersigned or with respect to
which the undersigned has or
1
hereafter acquires the power of disposition, or file any registration statement
under the Securities Act of 1933, as amended, with respect to any of the
foregoing or (ii) enter into any swap or any other agreement or any transaction
that transfers, in whole or in part, directly or indirectly, the economic
consequence of ownership of the Common Stock, whether any such swap or
transaction is to be settled by delivery of Common Stock or other securities, in
cash or otherwise.
Notwithstanding the foregoing, the undersigned may transfer any or all
of its shares of Company Common Stock (i) by gift, will or intestacy, (ii) to
its affiliates, as such term is defined in Rule 405 promulgated under the
Securities Act of 1933, as amended, or (iii) in the event the undersigned is an
individual, to his or her immediate family or to a trust the beneficiaries of
which are exclusively the undersigned and/or a member or members of his or her
immediate family; provided, however, that in any such case it shall be a
condition to any such transfer that the transferee execute an agreement stating
that the transferee is receiving and holding the shares subject to the
provisions of this letter agreement and there shall be no further transfer of
such shares except in accordance with the provisions of this letter agreement.
Very truly yours,
Signature: _____________________
Print Name: ____________________
2
EXHIBIT C-1
FORM OF COMFORT LETTER OF
KPMG PEAT MARWICK LLP PURSUANT TO SECTION 5(f)
attached hereto
EXHIBIT C-2
FORM OF COMFORT LETTER OF
COOPERS & LYBRAND LLP PURSUANT TO SECTION 5(f)
Attached hereto
==============================================================================
RAYOVAC CORPORATION
(a Wisconsin corporation)
1,300,000 Shares of Common Stock
INTERNATIONAL PURCHASE AGREEMENT
--------------------------------
Dated: May __, 1998
==============================================================================
Table of Contents
Page
----
INTERNATIONAL PURCHASE AGREEMENT.............................................................1
SECTION 1. Representations and Warranties...............................................3
(a) Representations and Warranties by the Company...................................3
(i) Compliance with Registration Requirements................................3
(ii) Independent Accountants.................................................3
(iii) Financial Statements...................................................4
(iv) No Material Adverse Change in Business..................................5
(v) Good Standing of the Company.............................................5
(vi) Good Standing of Subsidiaries...........................................5
(vii) Capitalization.........................................................5
(viii) Authorization of Agreement............................................6
(ix) Authorization and Description of Securities.............................6
(x) Absence of Defaults and Conflicts........................................6
(xi) Absence of Labor Dispute................................................7
(xii) Absence of Proceedings.................................................7
(xiii) Accuracy of Exhibits..................................................7
(xiv) Possession of Intellectual Property....................................7
(xv) Absence of Further Requirements.........................................8
(xvi) Possession of Licenses and Permits.....................................8
(xvii) Title to Property.....................................................8
(xviii) Investment Company Act...............................................9
(xix) Environmental Laws.....................................................9
(xx) Registration Rights.....................................................9
(xxi) Stabilization or Manipulation..........................................9
(xxii) Accounting Controls..................................................10
(xxiii) Tax Returns.........................................................10
(xxiv) No Association with NASD.............................................10
(b) Representations and Warranties by the Selling Shareholders.....................10
(i) Accurate Disclosure by Selling Shareholders.............................10
(ii) Authorization of Agreements............................................11
(iii) Valid Title...........................................................11
(iv) Due Execution of Power of Attorney and Custody Agreement...............12
(v) Absence of Manipulation.................................................12
(vi) Absence of Further Requirements........................................12
(vii) Certificates Suitable for Transfer....................................12
(viii) Irrevocable Obligations..............................................12
(ix) No Association with NASD...............................................13
(x) Power and Authority.....................................................13
-i-
(c) Officer's Certificates.........................................................13
SECTION 2. Sale and Delivery to International Managers; Closing........................14
(a) Initial Securities.............................................................14
(b) Option Securities..............................................................14
(c) Payment........................................................................14
(d) Denominations; Registration....................................................15
SECTION 3. Covenants of the Company....................................................15
(a) Compliance with Securities Regulations and Commission Requests.................15
(b) Filing of Amendments...........................................................16
(c) Delivery of Registration Statements............................................16
(d) Delivery of Prospectuses.......................................................16
(e) Continued Compliance with Securities Laws......................................17
(f) Blue Sky Qualifications........................................................17
(g) Rule 158.......................................................................17
(h) Restriction on Sale of Securities..............................................17
(i) Reporting Requirements.........................................................18
SECTION 4. Payment of Expenses.........................................................18
(a) Expenses.......................................................................18
(b) Expenses of the Selling Shareholders...........................................18
(c) Termination of Agreement.......................................................19
(d) Allocation of Expenses.........................................................19
SECTION 5. Conditions of International Managers' Obligations...........................19
(a) Effectiveness of Registration Statement........................................19
(b) Opinion of Counsel for the Company and the Selling Shareholders................19
(c) Opinion of Counsel for International Managers..................................20
(d) Officers' Certificate..........................................................20
(e) Selling Shareholders' Certificate..............................................20
(f) Accountant's Comfort Letters...................................................20
(g) Bring-down Comfort Letters.....................................................21
(h) No Objection...................................................................21
(i) Lock-up Agreements.............................................................21
(j) Purchase of Initial U.S. Securities............................................21
(k) Custody Agreement..............................................................21
(l) Conditions to Purchase of International Option Securities......................21
(m) Additional Documents...........................................................22
(n) Termination of Agreement.......................................................23
SECTION 6. Indemnification.............................................................23
(a) Indemnification of International Managers by the Company.......................23
(b) Indemnification of the International Managers by the Selling Shareholders......24
(c) Indemnification of Company, Directors and Officers and Selling Shareholders....25
(d) Actions against Parties; Notification..........................................26
(e) Settlement without Consent if Failure to Reimburse.............................26
-ii-
(f) Other Agreements with Respect to Indemnification...............................26
SECTION 7. Contribution................................................................27
SECTION 8. Representations, Warranties and Agreements to Survive Delivery..............28
SECTION 9. Termination of Agreement....................................................28
(a) Termination; General...........................................................28
(b) Liabilities....................................................................29
SECTION 10. Default by One or More of the International Managers.......................29
SECTION 11. Notices....................................................................30
SECTION 12. Parties....................................................................30
SECTION 13. Governing Law and Time.....................................................30
SECTION 14. Effect of Headings.........................................................30
SECTION 15. Counterparts...............................................................31
SCHEDULE A LIST OF UNDERWRITERS
SCHEDULE B LIST OF SELLING SHAREHOLDERS
SCHEDULE B-1 LIST OF OVER-ALLOTMENT SELLING SHAREHOLDERS
SCHEDULE C PRICING INFORMATION
SCHEDULE D LIST OF PERSONS AND ENTITIES SUBJECT TO LOCK-UP
SCHEDULE E LIST OF SUBSIDIARIES OF THE COMPANY
EXHIBIT A-1 FORM OF OPINION OF COMPANY'S GENERAL COUNSEL
EXHIBIT A-2 FORM OF OPINION OF COMPANY'S COUNSEL
EXHIBIT A-3 FORM OF OPINION OF COUNSEL OF SELLING SHAREHOLDERS
EXHIBIT A-4 FORM OF OPINION OF COUNSEL OF CATEGORY 2 SELLING SHAREHOLDERS
EXHIBIT B FORM OF LOCK-UP LETTER
EXHIBIT C-1 FORM OF COMFORT LETTER OF KPMG PEAT MARWICK LLP
EXHIBIT C-2 FORM OF COMFORT LETTER OF COOPERS & LYBRAND LLP
-iii-
RAYOVAC CORPORATION
(a Wisconsin corporation)
1,300,000 Shares of Common Stock
(Par Value $0.01 Per Share)
INTERNATIONAL PURCHASE AGREEMENT
--------------------------------
April __, 1997
MERRILL LYNCH INTERNATIONAL
Bear, Stearns International Limited
Donaldson, Lufkin & Jenrette Securities Corporation
Salomon Smith Barney Inc.
c/o Merrill Lynch International
25 Ropemaker Place
London EC2Y 9LY
England
Ladies and Gentlemen:
Rayovac Corporation, a Wisconsin corporation (the "Company") and the
persons listed on Schedule B hereto (collectively, the "Selling Shareholders")
confirm their respective agreements with Merrill Lynch International and each of
the other International Managers named in Schedule A hereto (collectively, the
"International Managers," which term shall also include any underwriter
substituted as hereinafter provided in Section 10 hereof), for whom Merrill
Lynch International, Bear, Stearns & Co. Inc., Donaldson, Lufkin & Jenrette
Securities Corporation and Smith Barney Inc. are acting as representatives (in
such capacity, the "Lead Managers"), with respect to (i) the sale by the Selling
Shareholders and the purchase by the International Managers, acting severally
and not jointly, of the number of shares of Common Stock, par value $0.01 per
share, of the Company ("Common Stock") set forth in Schedule A hereto and (ii)
the grant by the Selling Shareholders, to the International Managers, acting
severally and not jointly, of the option described in Section 2(b) hereof to
purchase all or any part of 195,000 additional shares of Common Stock to cover
over-allotments, if any. The aforesaid 1,300,000 shares of Common Stock (the
"Initial International Securities") to be purchased by the International
Managers, and all or any part of the 195,000 shares of Common Stock subject to
the option described in Section 2(b) hereof (the "International Option
Securities"), are hereinafter called, collectively, the "International
Securities."
-1-
It is understood that the Company is concurrently entering into an
agreement dated the date hereof (the "U.S. Purchase Agreement") providing for
the offering by the Selling Shareholders of an aggregate of 5,200,000 shares of
Common Stock (the "Initial U.S. Securities") through arrangements with certain
underwriters in the United States and Canada (the "U.S. Underwriters") for which
Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated
("Merrill Lynch"), Bear, Stearns & Co. Inc., Donaldson, Lufkin & Jenrette
Securities Corporation and Salomon Smith Barney Inc. are acting as
representatives (the "U.S. Representatives") and the grant by the Company, to
the U.S. Underwriters, acting severally and not jointly, of an option to
purchase all or any part of the U.S. Underwriters' pro rata portion of up to
780,000 additional shares of Common Stock solely to cover over-allotments, if
any (the "U.S. Option Securities" and, together with the International Option
Securities, the "Option Securities"). The Initial U.S. Securities and the U.S.
Option Securities are hereinafter called the "U.S. Securities." It is understood
that the Company is not obligated to sell and the International Managers are not
obligated to purchase, any Initial International Securities unless all of the
Initial U.S. Securities are contemporaneously purchased by the U.S.
Underwriters.
The International Managers and the U.S. Underwriters are hereinafter
collectively called the "Underwriters," the Initial International Securities and
the Initial U.S. Securities are hereinafter collectively called the "Initial
Securities," and the International Securities and the U.S. Securities are
hereinafter collectively called the "Securities."
The Underwriters will concurrently enter into an Intersyndicate
Agreement of even date herewith (the "Intersyndicate Agreement") providing for
the coordination of certain transactions among the Underwriters under the
direction of Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated (in such capacity, the "Global Coordinator").
The Company and the Selling Shareholders understand that the
International Managers propose to make a public offering of the International
Securities as soon as the Lead Managers deem advisable after this Agreement has
been executed and delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-492281), as amended
by Amendment No. 1 thereto, covering the registration of the Securities under
the Securities Act of 1933, as amended (the "1933 Act"), including the related
preliminary prospectus or prospectuses. Promptly after execution and delivery of
this Agreement, the Company will either (i) prepare and file a prospectus in
accordance with the provisions of Rule 430A ("Rule 430A") of the rules and
regulations of the Commission under the 1933 Act (the "1933 Act Regulations")
and paragraph (b) of Rule 424 ("Rule 424(b)") of the 1933 Act Regulations, or
(ii) if the Company has elected to rely upon Rule 434 ("Rule 434") of the 1933
Act Regulations, prepare and file a term sheet (a "Term Sheet") in accordance
with the provisions of Rule 434 and Rule 424(b). Two forms of prospectus are to
be used in connection with the offering and sale of the Securities: one relating
to the International Securities (the "Form of International Prospectus") and one
relating to the U.S. Securities (the "Form of U.S. Prospectus"). The Form of
U.S. Prospectus is identical to the Form of International Prospectus, except for
the front cover and back cover pages and the information under the caption
"Underwriting." The information included in any such prospectus or in any such
Term Sheet, as the case may be, that was omitted from such registration
statement
-2-
at the time it became effective but that is deemed to be part of such
registration statement at the time it became effective (a) pursuant to paragraph
(b) of Rule 430A is referred to as "Rule 430A Information" or (b) pursuant to
paragraph (d) of Rule 434 is referred to as "Rule 434 Information." Each Form of
International Prospectus and Form of U.S. Prospectus used before such
registration statement became effective, and any prospectus that omitted, as
applicable, the Rule 430A Information or the Rule 434 Information, that was used
after such effectiveness and prior to the execution and delivery of this
Agreement, is herein called a "preliminary prospectus." Such registration
statement, including the exhibits thereto and schedules thereto at the time it
became effective and including the Rule 430A Information and the Rule 434
Information, as applicable, is herein called the "Registration Statement." Any
registration statement filed pursuant to Rule 462(b) of the 1933 Act Regulations
is herein referred to as the "Rule 462(b) Registration Statement," and after
such filing the term "Registration Statement" shall include the Rule 462(b)
Registration Statement. The final Form of International Prospectus and the final
Form of U.S. Prospectus in the forms first furnished to the Underwriters for use
in connection with the offering of the Securities are herein called the
"International Prospectus" and the "U.S. Prospectus," respectively, and
collectively, the "Prospectuses." If Rule 434 is relied on, the terms
"International Prospectus" and "U.S. Prospectus" shall refer to the preliminary
International Prospectus dated May __, 1998 and the preliminary U.S. Prospectus
dated May __, 1998, respectively, each together with the applicable Term Sheet,
and all references in this Agreement to the date of such Prospectuses shall mean
the date of the applicable Term Sheet. For purposes of this Agreement, all
references to the Registration Statement, any preliminary prospectus, the
International Prospectus, the U.S. Prospectus or any Term Sheet or any amendment
or supplement to any of the foregoing shall be deemed to include the copy filed
with the Commission pursuant to its Electronic Data Gathering, Analysis and
Retrieval system ("EDGAR").
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company
represents and warrants to each International Manager as of the date hereof, as
of the Closing Time referred to in Section 2(c) hereof, and as of each Date of
Delivery (if any) referred to in Section 2(b) hereof, and agrees with each
International Manager, as follows:
(i) Compliance with Registration Requirements. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or, to
the knowledge of the Company, are contemplated by the Commission, and
any request on the part of the Commission for additional information
has been complied with.
At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments thereto
became effective and at the Closing Time (and, if any International
Option Securities are purchased, at the Date of Delivery), the
Registration Statement, the Rule 462(b) Registration Statement and any
amendments and supplements thereto complied and will comply in all
material respects with the
-3-
requirements of the 1933 Act and the 1933 Act Regulations and did not
and will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading. Neither of the Prospectuses
nor any amendments or supplements thereto (including any prospectus
wrapper), at the time the Prospectuses or any amendments or supplements
thereto were issued and at the Closing Time (and, if any International
Option Securities are purchased, at the Date of Delivery), included or
will include, at the aforesaid times, an untrue statement of a material
fact or omitted or will omit, at the aforesaid times, to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
If Rule 434 is used, the Company will comply with the requirements of
Rule 434 and the Prospectuses shall not be "materially different," as
such term is used in Rule 434, from the prospectuses included in the
Registration Statement at the time it became effective. The
representations and warranties in this subsection shall not apply to
statements in or omissions from the Registration Statement or the
Prospectuses made in reliance upon and in conformity with information
furnished to the Company in writing by any Underwriter through the Lead
Managers or the U.S. Representatives expressly for use in the
Registration Statement or the Prospectuses.
Each preliminary prospectus and the prospectuses filed as part
of the Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the 1933 Act,
complied when so filed in all material respects with the 1933 Act
Regulations and each preliminary prospectus and the Prospectuses
delivered to the Underwriters for use in connection with this offering
was identical to the electronically transmitted copies thereof filed
with the Commission pursuant to EDGAR, except to the extent permitted
by Regulation S-T.
(ii) Independent Accountants. The accountants who certified
the financial statements and supporting schedules included in the
Registration Statement are independent public accountants as required
by the 1933 Act and the 1933 Act Regulations.
(iii) Financial Statements. The historical financial
statements included in the Registration Statement and the Prospectuses,
together with the related schedule and notes, present fairly the
financial position of the Company and its consolidated Subsidiaries (as
defined below) at the dates indicated and the statement of operations,
shareholders' equity and cash flows of the Company and its consolidated
Subsidiaries for the periods specified; said financial statements have
been prepared in conformity with generally accepted accounting
principles ("GAAP") applied on a consistent basis throughout the
periods involved. The supporting schedules included in the Registration
Statement present fairly in accordance with GAAP the information
required to be stated therein. The selected financial data and the
summary financial information included in the Prospectuses present
fairly the information shown therein and have been compiled on a basis
consistent with that of the audited financial statements included in
the Registration Statement.
-4-
(iv) No Material Adverse Change in Business. Since the
respective dates as of which information is given in the Registration
Statement and the Prospectuses, except as otherwise stated therein, (A)
there has been no material adverse change in the condition (financial
or otherwise), earnings, business affairs or business prospects of the
Company and its Subsidiaries considered as one enterprise, whether or
not arising in the ordinary course of business (a "Material Adverse
Effect"), (B) there have been no transactions entered into by the
Company or any of its Subsidiaries, other than those in the ordinary
course of business, which are material with respect to the Company and
its Subsidiaries considered as one enterprise, and (C) there has been
no dividend or distribution of any kind declared, paid or made by the
Company on any class of its capital stock.
(v) Good Standing of the Company. The Company has been duly
organized and is validly existing as a corporation in good standing
under the laws of the State of Wisconsin and has corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectuses and to enter into and perform
its obligations under this Agreement; and the Company is duly qualified
as a foreign corporation to transact business and is in good standing
in each other jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify or to be in
good standing would not result in a Material Adverse Effect.
(vi) Good Standing of Subsidiaries. Each subsidiary of the
Company (each a "Subsidiary" and, collectively, the "Subsidiaries") has
been duly organized and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, where
such legal concepts are recognized, has corporate power and authority
to own, lease and operate its properties and to conduct its business as
described in the Prospectuses and is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason
of the ownership or leasing of property or the conduct of business,
except where the failure so to qualify or to be in good standing would
not result in a Material Adverse Effect; except as otherwise disclosed
in the Registration Statement, all of the issued and outstanding
capital stock of each such Subsidiary has been duly authorized and
validly issued, is fully paid and non-assessable in jurisdictions where
such legal concepts are recognized and is owned by the Company,
directly or through Subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity (except
as set forth in the Registration Statement and except for any director
or member qualifying shares); none of the outstanding shares of capital
stock of any Subsidiary was issued in violation of the preemptive or
similar rights of any securityholder of such Subsidiary. The only
Subsidiaries of the Company are the subsidiaries listed on Schedule E
hereto and, except for Rayovac Europe Limited (which represents less
than 15% of the assets, liabilities and earnings of the Company) the
Company has no "significant subsidiaries" as defined in Section 1-02 of
Regulation S-X.
(vii) Capitalization. The authorized, issued and outstanding
capital stock of the Company is as set forth in the Prospectuses under
the caption "Capitalization" (except for subsequent issuances, if any,
pursuant to this Agreement, pursuant to reservations,
-5-
agreements or employee benefit plans referred to in the Prospectuses or
pursuant to the exercise of convertible securities or options referred
to in the Prospectuses). The shares of issued and outstanding capital
stock of the Company have been and at the Closing Time, including the
International Option Securities to be purchased by the International
Managers from the Selling Shareholders, will have been duly authorized
and validly issued and are fully paid and non-assessable except to the
extent such securities are assessable pursuant to applicable provisions
of Wisconsin law; none of the outstanding shares of capital stock of
the Company was or as of the Closing Time, including the International
Option Securities to be purchased by the International Managers from
the Selling Shareholders, will have been or was issued in violation of
the preemptive or other similar rights of any securityholder of the
Company.
(viii) Authorization of Agreement. This Agreement and the U.S.
Purchase Agreement have been duly authorized, executed and delivered by
the Company.
(ix) Authorization and Description of Securities. The
Securities to be purchased by the International Managers and the U.S.
Underwriters from the Selling Shareholders have been duly authorized
for issuance and sale to the International Managers pursuant to this
Agreement and the U.S. Underwriters pursuant to the U.S. Purchase
Agreement, respectively, and, are validly issued, fully paid and
non-assessable; the Common Stock conforms to the descriptions thereof
contained in the Prospectuses or incorporated by reference therein and
such description conforms to the rights set forth in the instruments
defining the same; no holder of the Securities will be subject to
personal liability by reason of being such a holder, except for certain
liabilities pursuant to applicable provisions of Wisconsin Law; and the
issuance of the Securities is not subject to the preemptive or other
similar rights of any securityholder of the Company.
(x) Absence of Defaults and Conflicts. Neither the Company nor
any of its Subsidiaries is in violation of its charter or by-laws or in
default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage,
deed of trust, loan or credit agreement, note, lease or other agreement
or instrument to which the Company or any of its Subsidiaries is a
party or by which it or any of them may be bound, or to which any of
the property or assets of the Company or any Subsidiary is subject
(collectively, "Agreements and Instruments") except for such defaults
that would not result in a Material Adverse Effect; and the execution,
delivery and performance of this Agreement and the U.S. Purchase
Agreement and the consummation of the transactions contemplated in this
Agreement, the U.S. Purchase Agreement and in the Registration
Statement and the compliance by the Company with its obligations under
this Agreement and the U.S. Purchase Agreement have been duly
authorized by all necessary corporate action and do not and will not,
whether with or without the giving of notice or passage of time or
both, conflict with or constitute a breach of, or default or Repayment
Event (as defined below) under, or result in the creation or imposition
of any lien, charge or encumbrance upon any property or assets of the
Company or any Subsidiary pursuant to, the Agreements and Instruments
which would reasonably be expected, either singly or in the aggregate,
to result in a Material Adverse Effect, nor will such action result in
any violation of any applicable
-6-
law, statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over the Company or any Subsidiary or any of their
assets, properties or operations, nor will such action result in any
violation of the provisions of the charter or by-laws of the Company or
any Subsidiary. As used herein, a "Repayment Event" means any event or
condition which gives the holder of any note, debenture or other
evidence of indebtedness (or any person acting on such holder's behalf)
the right to require the repurchase, redemption or repayment of all or
a portion of such indebtedness by the Company or any Subsidiary.
(xi) Absence of Labor Dispute. Except as described in the
Registration Statement with respect to the renegotiation of collective
bargaining agreements, no labor dispute with the employees of the
Company or any Subsidiary exists or, to the knowledge of the Company,
is imminent, and the Company is not aware of any existing or imminent
labor disturbance by the employees of any of its or any Subsidiary's
principal suppliers, manufacturers, customers, dealers or contractors,
which, in either case, may reasonably be expected to result in a
Material Adverse Effect.
(xii) Absence of Proceedings. There is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Company, threatened, against or affecting the
Company or any Subsidiary, which is required to be disclosed in the
Registration Statement (other than as disclosed therein), or which
might reasonably be expected to result in a Material Adverse Effect, or
which might reasonably be expected to materially and adversely affect
the properties or assets thereof or the consummation of the
transactions contemplated in this Agreement and the U.S. Purchase
Agreement or the performance by the Company of its obligations
hereunder or thereunder; the aggregate of all pending legal or
governmental proceedings to which the Company or any Subsidiary is a
party or of which any of their respective property or assets is the
subject which are not described in the Registration Statement,
including ordinary routine litigation incidental to the business of the
Company and its Subsidiaries would not reasonably be expected to result
in a Material Adverse Effect.
(xiii) Accuracy of Exhibits. There are no contracts or
documents which are required to be described in the Registration
Statement or the Prospectuses or to be filed as exhibits thereto which
have not been so described or filed or incorporated by reference as
required.
(xiv) Possession of Intellectual Property. Except as described
in the Registration Statement, the Company and its Subsidiaries own or
possess the right to utilize, or can acquire on reasonable terms,
adequate patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks, trade names or other
intellectual property (collectively, "Intellectual Property") necessary
to carry on the business now operated by them, and neither the Company
nor any of its Subsidiaries has received any notice or is otherwise
aware of any infringement of or conflict with asserted rights of others
with respect to any Intellectual
-7-
Property or of any facts or circumstances which would render any
Intellectual Property invalid or inadequate to protect the interest of
the Company or any of its Subsidiaries therein, and which infringement
or conflict (if the subject of any unfavorable decision, ruling or
finding) or invalidity or inadequacy, singly or in the aggregate, would
result in a Material Adverse Effect.
(xv) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency is necessary or required for the performance by the Company of
its obligations hereunder, in connection with the offering or sale of
the Securities under this Agreement and the U.S. Purchase Agreement or
the consummation of the transactions contemplated by this Agreement and
the U.S. Purchase Agreement, except such as have been already obtained
or as may be required under the 1933 Act or the 1933 Act Regulations
and foreign or state securities or blue sky laws or the rules or
regulations of the NASD.
(xvi) Possession of Licenses and Permits. The Company and its
Subsidiaries possess such permits, licenses, approvals, consents and
other authorizations (collectively, "Governmental Licenses") issued by
the appropriate federal, state, local or foreign regulatory agencies or
bodies necessary to conduct the business now operated by them, except
where the failure to possess the same would not, singly or in the
aggregate have a Material Adverse Effect; the Company and its
Subsidiaries are in compliance with the terms and conditions of all
such Governmental Licenses, except where the failure so to comply would
not, singly or in the aggregate, have a Material Adverse Effect; all of
the Governmental Licenses are valid and in full force and effect,
except when the invalidity of such Governmental Licenses or the failure
of such Governmental Licenses to be in full force and effect would not
have a Material Adverse Effect; and neither the Company nor any of its
Subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses which,
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would result in a Material Adverse Effect.
(xvii) Title to Property. The Company and its Subsidiaries
have good and marketable title to all real property owned by the
Company and its Subsidiaries and good title to all other properties
owned by them, in each case, free and clear of all mortgages, pledges,
liens, security interests, claims, restrictions or encumbrances of any
kind except such as (a) are described in the Prospectuses or (b) do
not, singly or in the aggregate, materially affect the value of such
property and do not interfere with the use made and proposed to be made
of such property by the Company or any of its Subsidiaries or (c) would
not reasonably be expected to result in a Material Adverse Effect; and
all of the leases and subleases material to the business of the Company
and its Subsidiaries, considered as one enterprise, and under which the
Company or any of its Subsidiaries holds properties described in the
Prospectuses, are in full force and effect, and neither the Company nor
any Subsidiary has any notice of any claim of any sort that has been
asserted by anyone adverse to the rights of the
-8-
Company or any Subsidiary under any of the leases or subleases
mentioned above, or affecting or questioning the rights of the Company
or such Subsidiary to the continued possession of the leased or
subleased premises under any such lease or sublease which would
reasonably be expected to result in a Material Adverse Effect.
(xviii) Investment Company Act. The Company is not, and upon
the issuance and sale of the Securities as herein contemplated will not
be, an "investment company" or an entity "controlled" by an "investment
company" as such terms are defined in the Investment Company Act of
1940, as amended (the "1940 Act").
(xix) Environmental Laws. Except as described in the
Registration Statement or except as would not, singly or in the
aggregate, result in a Material Adverse Effect, (A) neither the Company
nor any of its Subsidiaries is in violation of any federal, state,
local or foreign statute, law, rule, regulation, ordinance, code,
policy or rule of common law or any judicial or administrative
interpretation thereof, including any judicial or administrative order,
consent decree or judgment, relating to pollution or protection of
human health, the environment (including, without limitation, ambient
air, surface water, groundwater, land surface or subsurface strata) or
wildlife, including, without limitation, laws and regulations relating
to the release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum
or petroleum products (collectively, "Hazardous Materials") or to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials (collectively,
"Environmental Laws"), (B) the Company and its Subsidiaries have all
permits, licenses, authorizations and approvals currently required for
their respective businesses and for the businesses contemplated to be
conducted upon consummation of the offering of the Securities under any
applicable Environmental Laws and are each in compliance with their
requirements, (C) there are no pending or threatened administrative,
regulatory or judicial actions, suits, demands, demand letters, claims,
liens, notices of noncompliance or violation, investigation or
proceedings relating to any Environmental Law against the Company or
any of its Subsidiaries and (D) there are no events, facts or
circumstances that might reasonably be expected to form the basis of
any liability or obligation of the Company or any of its Subsidiaries,
including, without limitation, any order, decree, plan or agreement
requiring clean-up or remediation, or any action, suit or proceeding by
any private party or governmental body or agency, against or affecting
the Company or any of its Subsidiaries relating to any Hazardous
Materials or any Environmental Laws.
(xx) Registration Rights. Except for those persons (i) set
forth on Schedule B hereto or (ii) who have waived any such rights,
there are no persons with registration rights or other similar rights
to have any securities registered pursuant to the Registration
Statement under the 1933 Act. Except as described in the Registration
Statement, there are no persons with registration rights or other
similar rights to have any securities registered by the Company under
the 1933 Act.
(xxi) Stabilization or Manipulation. Neither the Company nor
any of its officers, directors or controlling persons has taken,
directly or indirectly, any action designed to cause or to result in,
or that has constituted or which might reasonably be
-9-
expected to constitute, the stabilization or manipulation of the price
of any security of the Company to facilitate the sale of the
Securities.
(xxii) Accounting Controls. The Company and its Subsidiaries
maintain a system of internal accounting controls sufficient to provide
reasonable assurances that (A) transactions are executed in accordance
with management's general or specific authorization; (B) transactions
are recorded as necessary to permit preparation of financial statements
in conformity with generally accepted accounting principles and to
maintain accountability for assets; (C) access to assets is permitted
only in accordance with management's general or specific authorization;
and (D) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(xxiii) Tax Returns. The Company and its Subsidiaries have
filed all federal, state, local and foreign tax returns that are
required to have been filed by them pursuant to applicable foreign,
federal, state, local or other law or have duly requested extensions
thereof, except insofar as the failure to file such returns or request
such extensions would not reasonably be expected to result in a
Material Adverse Effect, and has paid all taxes due pursuant to such
returns or pursuant to any assessment received by the Company and its
Subsidiaries, except for such taxes or assessments, if any, as are
being contested in good faith and as to which adequate reserves have
been provided or where the failure to pay would not reasonably be
expected to result in a Material Adverse Effect. The charges, accruals
and reserves on the books of the Company in respect of any income and
corporation tax liability of the Company and each Subsidiary for any
years not finally determined are adequate to meet any assessments or
re-assessments for additional income tax for any years not finally
determined, except to the extent of any inadequacy that would not
reasonably be expected to result in a Material Adverse Effect.
(xxiv) No Association with NASD. Neither the Company nor any
of its affiliates (within the meaning of NASD Conduct Rule
2720(b)(1)(a)) directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common
control with, or is an associated person (within the meaning of Article
I, Section 1(q) of the By-laws of the National Association of
Securities Dealers, Inc.), of any member firm of the National
Association of Securities Dealers, Inc., other than as described on an
appendix to a Selling Shareholders' Power of Attorney and Custody
Agreement (as defined herein).
b) Representations and Warranties by the Selling Shareholders. Each
Selling Shareholder, severally and not jointly, represents and warrants to each
International Manager as of the date hereof, and, if such Selling Shareholder is
selling International Option Securities on a Date of Delivery, as of each such
Date of Delivery, and agrees with each International Manager, as follows:
(i) Accurate Disclosure by Selling Shareholders. (A) The
information furnished in writing by or on behalf of such Selling
Shareholder listed on Schedule B hereto expressly for use in the
Registration Statement and any amendments or supplements thereto does
not contain an untrue statement of a material fact with respect to such
Selling
-10-
Shareholder or omit to state a material fact with respect to such
Selling Shareholder required to be stated therein or necessary to make
the statements regarding the Selling Shareholder therein not misleading
and (B) the information furnished in writing by or on behalf of such
Selling Shareholder expressly for use in the Prospectus does not
include an untrue statement of a material fact with respect to such
Selling Shareholder or omit to state a material fact with respect to
such Selling Shareholder necessary in order to make the statements
regarding the Selling Shareholder therein, in the light of the
circumstances under which they were made, not misleading.
(ii) Authorization of Agreements. Such Selling Shareholder has
the full right, power and authority to enter into this Agreement and
the Power of Attorney and Custody Agreement (the "Power of Attorney and
Custody Agreement") with Firstar Trust Company, as custodian (the
"Custodian"), and the attorneys-in-fact named therein (each an
"Attorney-in-Fact"), and to sell, transfer and deliver the Securities
to be sold by such Selling Shareholder hereunder. The execution and
delivery of this Agreement and the Power of Attorney and Custody
Agreement and the sale and delivery of the Securities to be sold by
such Selling Shareholder and the consummation of the transactions
contemplated herein and compliance by such Selling Shareholder with its
obligations hereunder have been duly authorized by such Selling
Shareholder and do not and will not, whether with or without the giving
of notice or passage of time or both, conflict with or constitute a
breach of, or default under, or result in the creation or imposition of
any tax, lien, charge or encumbrance upon the Securities to be sold by
such Selling Shareholder or any property or assets of such Selling
Shareholder pursuant to any contract, indenture, mortgage, deed of
trust, loan or credit agreement, note, license, lease or other
agreement or instrument to which such Selling Shareholder is a party or
by which such Selling Shareholder may be bound, or to which any of the
property or assets of such Selling Shareholder is subject (except for
such conflicts, breaches or defaults or liens, charges or encumbrances
that would not result in a material adverse change in the condition
(financial or otherwise), earnings, business affairs or business
prospects of such Selling Shareholder (a "Selling Shareholder Material
Adverse Effect"), whether or not arising in the ordinary course of
business), nor will such action result in any violation of the
provisions of the charter or by-laws or other organizational instrument
of such Selling Shareholder, if applicable, or any applicable treaty,
law, statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over such Selling Shareholder or any of its
properties which would reasonably be expected, either singly or in the
aggregate, to result in a Selling Shareholder Material Adverse Effect.
(iii) Valid Title. Such Selling Shareholder has on the date
hereof and will at the Closing Time and on the Date of Delivery have
good and valid title to the International Securities to be sold by such
Selling Shareholder hereunder, free and clear of any security interest,
mortgage, pledge, lien, charge, claim, equity or encumbrance of any
kind, other than pursuant to this Agreement; and upon delivery of such
International Securities and payment of the purchase price therefor as
herein contemplated, assuming each such Underwriter has no notice of
any adverse claim as such term is used in the Uniform Commercial Code,
-11-
each of the Underwriters will receive valid title to the International
Securities purchased by it from such Selling Shareholder, free and
clear of any security interest, mortgage, pledge, lien, charge, claim,
equity or encumbrance of any kind.
(iv) Due Execution of Power of Attorney and Custody Agreement.
Each such Selling Shareholder has duly executed and delivered a Power
of Attorney and Custody Agreement; the Custodian is authorized by each
such Selling Shareholder to deliver the International Securities to be
sold by such Selling Shareholder hereunder and to accept payment
therefor; and each Attorney-in-Fact named in the Power of Attorney and
Custody Agreement executed by such Selling Shareholder is authorized by
such Selling Shareholder to execute and deliver this Agreement and the
certificate referred to in Section 5(e) of this Agreement or that may
be required pursuant to Sections 5(m) or 5(n) of this Agreement on
behalf of such Selling Shareholder, to sell, assign and transfer to the
International Managers the International Securities to be sold by such
Selling Shareholder hereunder, to determine the purchase price to be
paid by the U.S. Underwriters to such Selling Shareholder, as provided
in Section 2(a) hereof, to authorize the delivery of the Securities to
be sold by such Selling Shareholder hereunder, to accept payment
therefor, and otherwise to act on behalf of such Selling Shareholder in
connection with this Agreement.
(v) Absence of Manipulation. Such Selling Shareholder has not
taken, and will not take, directly or indirectly, any action which is
designed to or which has constituted or which might reasonably be
expected to cause or result in stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale
of the International Securities.
(vi) Absence of Further Requirements. No filing with, or
consent, approval, authorization, order, registration, qualification or
decree of, any court or governmental authority or agency, domestic or
foreign, is necessary or required for the performance by each such
Selling Shareholder of their obligations hereunder or in the Power of
Attorney and Custody Agreement, or in connection with the sale and
delivery of the International Securities being sold by each such
Selling Shareholder hereunder or the consummation of the transactions
contemplated by this Agreement, except such as may have previously been
made or obtained or as may be required under the 1933 Act or the 1933
Act Regulations or state or foreign securities laws or under the rules
of the NASD.
(vii) Certificates Suitable for Transfer. Certificates for all
of the International Securities to be sold by such Selling Shareholder
pursuant to this Agreement, in suitable form for transfer by delivery
or accompanied by duly executed instruments of transfer or assignment
in blank with signatures guaranteed, have been placed in custody with
the Custodian with irrevocable conditional instructions to deliver such
International Securities to the International Managers pursuant to this
Agreement.
(viii) Irrevocable Obligations. The International Securities
represented by the Certificates held in custody for such holder under
the Custody Agreement are subject to the interests of the International
Managers hereunder; the arrangements made by such
-12-
holder for such custody, and the appointment by such holder of the
Attorneys-in-fact by the Power of Attorney, are to that extent
irrevocable; the obligations of such holder hereunder shall not be
terminated, except as provided in the Agreement or in the Power of
Attorney, by operation of law, whether by the death or incapacity of
any individual Selling Shareholder or, in the case of an estate or
trust, by the death or incapacity of any executor or trustee or the
termination of such trust estate or trust, or in the case of a
partnership or corporation, by the dissolution of such partnership or
corporation, or by the occurrence of any other event, if any individual
Selling Shareholder or any such executor or trustee should die or
become incapacitated, or if any such estate or trust should be
terminated, or any such partnership or corporation should be dissolved,
or if any other event should occur, before the delivery of the
International Securities hereunder, certificates representing the
International Securities shall be delivered by or on behalf of such
holder in accordance with the terms and conditions of this Agreement
and of the Power of Attorney and Custody Agreement; and actions taken
by the Attorney-in-Fact pursuant to the Powers of Attorney shall be as
valid as if such death, incapacity, termination, dissolution or other
event had not occurred, regardless of whether or not the Custodian,
Attorney-in-Fact, or any of them, shall have received notice of such
death, incapacity, termination, dissolution or other event.
(ix) No Association with NASD. Neither such Selling
Shareholder nor any of its affiliates (within the meaning of NASD
Conduct Rule 2720(b)(1)(a)) directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common
control with, or is an associated person (within the meaning of Article
I, Section 1(q) of the By-laws of the National Association of
Securities Dealers, Inc.), of, any member firm of the National
Association of Securities Dealers, Inc., other than as described on an
appendix to the Power of Attorney and Custody Agreement to which such
Selling Shareholder is a party.
(x) Power and Authority. If such Selling Shareholder is a
corporation, partnership or trust, such Selling Shareholder has been
duly organized or incorporated and is validly existing as a corporation
or partnership or limited partnership in good standing under the laws
of its jurisdiction of incorporation or organization, if applicable,
and has the power and authority to own its property and to conduct its
business and is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business or
its ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be in good
standing would not result in a Selling Shareholder Material Adverse
Effect, whether or not arising in the ordinary course of business, or
materially impair its ability to consummate the transactions
contemplated hereby.
(c) Officer's Certificates. Any certificate signed by any officer of
the Company or any of its Subsidiaries delivered to the Global Coordinator, the
Lead Managers or to counsel for the International Managers shall be deemed a
representation and warranty by the Company to each International Manager as to
the matters covered thereby; and any certificate signed by or on behalf of any
Selling Shareholder as such and delivered to the International Managers or to
counsel for the International Managers pursuant to the terms of this Agreement
shall be deemed a
-13-
representation and warranty by such Selling Shareholder, as the case may be, to
the International Managers as to the matters covered thereby.
SECTION 2. Sale and Delivery to International Managers; Closing.
(a) Initial Securities. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Selling Shareholders agree to sell to each International Manager,
severally and not jointly, to the extent indicated on Schedule A hereto, and
each International Manager, severally and not jointly, agrees to purchase from
the Selling Shareholders, at the price per share set forth in Schedule C, the
proportion of the number of Initial International Securities being sold by each
Selling Shareholder set forth in Schedule B opposite the name of each Selling
Shareholder which the number of International Securities set forth in Schedule A
opposite the name of such International Manager, (plus any additional number of
Initial International Securities which such Underwriter may become obligated to
purchase pursuant to the provisions of Section 10 hereof) bears to the total
number of International Securities, in each case, with such adjustments among
the International Managers as the global coordinator in its sole discretion
shall make to eliminate any sales or purchases of fractional securities.
(b) Option Securities. In addition, on the basis of the representations
and warranties herein contained and subject to the terms and conditions herein
set forth, the Selling Shareholders, severally and not jointly, hereby grant an
option to the International Managers, severally and not jointly, to purchase up
to an additional 195,000 shares of Common Stock to the extent indicated on
Schedule B-1, at the price per share set forth in Schedule C, less an amount per
share equal to any dividends or distributions declared by the Company and
payable on the Initial International Securities but not payable on the
International Option Securities. The option hereby granted will expire 30 days
after the date hereof and may be exercised in whole or in part from time to time
only for the purpose of covering over-allotments which may be made in connection
with the offering and distribution of the Initial International Securities upon
notice by the Global Coordinator to the Selling Shareholders setting forth the
number of International Option Securities as to which the several International
Managers are then exercising the option and the time and date of payment and
delivery for such International Option Securities. Any such time and date of
delivery for the International Option Securities (a "Date of Delivery") shall be
determined by the Global Coordinator, but shall not be later than seven full
business days after the exercise of said option, nor in any event prior to the
Closing Time, as hereinafter defined. If the option is exercised as to all or
any portion of the International Option Securities, each of the International
Managers, acting severally and not jointly, will purchase that proportion of the
total number of International Option Securities then being purchased which the
number of Initial International Securities set forth in Schedule A opposite the
name of such International Manager bears to the total number of Initial
International Securities, subject in each case to such adjustments as the Global
Coordinator in its discretion shall make to eliminate any sales or purchases of
fractional shares.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of Fried,
Frank, Harris, Shriver & Jacobson, 1 New York Plaza, New York, New York 10004,
or at such other place as shall be agreed upon by the
-14-
Global Coordinator and the Company, at 9:00 A.M. (Eastern time) on the third
(fourth, if the pricing occurs after 4:30 P.M. (Eastern time) on any given day)
business day after the date hereof (unless postponed in accordance with the
provisions of Section 10), or such other time not later than ten business days
after such date as shall be agreed upon by the Global Coordinator and the
Selling Shareholders or the Attorneys-in-Fact on behalf of the Selling
Shareholders (such time and date of payment and delivery being herein called
"Closing Time").
In addition, in the event that any or all of the International Option
Securities are purchased by the International Managers, payment of the purchase
price for, and delivery of certificates for, such International Option
Securities shall be made at the above-mentioned offices, or at such other place
as shall be agreed upon by the Global Coordinator and the Selling Shareholders
or the Attorneys-in-Fact on behalf of the Selling Shareholders, on each Date of
Delivery as specified in the notice from the Global Coordinator to the Selling
Shareholders.
Payment shall be made to each Selling Shareholder by wire transfer of
immediately available funds to a bank account designated by the Custodian
pursuant to the Selling Shareholders' Power of Attorney and Custody Agreement,
against delivery to the Lead Managers for the respective accounts of the
International Managers of certificates for the International Securities to be
purchased by them. It is understood that each International Manager has
authorized the Lead Managers, for its account, to accept delivery of, receipt
for, and make payment of the purchase price for, the Initial International
Securities and the International Option Securities, if any, which it has agreed
to purchase. Merrill Lynch, individually and not as representative of the
International Managers, may (but shall not be obligated to) make payment of the
purchase price for the Initial International Securities or the International
Option Securities, if any, to be purchased by any International Manager whose
funds have not been received by the Closing Time or the relevant Date of
Delivery, as the case may be, but such payment shall not relieve such
International Manager from its obligations hereunder.
(d) Denominations; Registration. Certificates for the Initial
International Securities and the International Option Securities, if any, shall
be in such denominations and registered in such names as the Lead Managers may
request in writing at least one full business day before the Closing Time or the
relevant Date of Delivery, as the case may be. The certificates for the Initial
International Securities and the International Option Securities, if any, will
be made available for examination and packaging by the Lead Managers in The City
of New York not later than 10:00 A.M. (Eastern time) on the business day prior
to the Closing Time or the relevant Date of Delivery, as the case may be.
SECTION 3. Covenants of the Company. The Company covenants with each
International Manager as follows:
(a) Compliance with Securities Regulations and Commission
Requests. The Company, subject to Section 3(b), will comply with the
requirements of Rule 430A or Rule 434, as applicable, and will notify
the Global Coordinator immediately, and confirm the notice in writing,
(i) when any post-effective amendment to the Registration Statement,
shall become effective, or any supplement to the Prospectuses or any
amended Prospectuses shall have been filed, (ii) of the receipt of any
comments from the
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Commission, (iii) of any request by the Commission for any amendment to
the Registration Statement or any amendment or supplement to the
Prospectuses or for additional information, and (iv) of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement or of any order preventing or suspending the use
of any preliminary prospectus, or of the suspension of the
qualification of the Securities for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceedings
for any of such purposes. The Company will promptly effect the filings
necessary pursuant to Rule 424(b) and will take such steps as it deems
necessary to ascertain promptly whether the form of prospectus
transmitted for filing under Rule 424(b) was received for filing by the
Commission and, in the event that it was not, it will promptly file
such prospectus. The Company will make every reasonable effort to
prevent the issuance of any stop order and, if any stop order is
issued, to obtain the lifting thereof at the earliest possible moment.
(b) Filing of Amendments. The Company will give the Global
Coordinator notice of its intention to file or prepare any amendment to
the Registration Statement (including any filing under Rule 462(b)),
any Term Sheet or any amendment, supplement or revision to either the
prospectus included in the Registration Statement at the time it became
effective or to the Prospectuses, will furnish the Global Coordinator
with copies of any such documents a reasonable amount of time prior to
such proposed filing or use, as the case may be, and will not file or
use any such document to which the Global Coordinator or counsel for
the International Managers shall reasonably object.
(c) Delivery of Registration Statements. The Company has
furnished or will deliver to the Lead Managers and counsel for the
International Managers, without charge, signed copies of the
Registration Statement as originally filed and of each amendment
thereto (including exhibits filed therewith) and signed copies of all
consents and certificates of experts, and will also deliver to the Lead
Managers, without charge, a conformed copy of the Registration
Statement as originally filed and of each amendment thereto (without
exhibits) for each of the International Managers. The copies of the
Registration Statement and each amendment thereto furnished to the
International Managers will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR,
except to the extent permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered or
will deliver to each International Manager, without charge, as many
copies of each preliminary prospectus as such International Manager
reasonably requested, and the Company hereby consents to the use of
such copies for purposes permitted by the 1933 Act. The Company will
furnish to each International Manager, without charge, during the
period when the International Prospectus is required to be delivered
under the 1933 Act or the Securities Exchange Act of 1934 (the "1934
Act"), such number of copies of the International Prospectus (as
amended or supplemented) as such International Manager may reasonably
request. The International Prospectus and any amendments or supplements
thereto furnished to the International Managers will be identical to
the electronically transmitted copies thereof filed with the Commission
pursuant to EDGAR, except to the extent permitted by Regulation S-T.
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(e) Continued Compliance with Securities Laws. The Company
will comply with the 1933 Act and the 1933 Act Regulations so as to
permit the completion of the distribution of the Securities as
contemplated in this Agreement, the U.S. Purchase Agreement and in the
Prospectuses. If at any time when a prospectus is required by the 1933
Act to be delivered in connection with sales of the Securities, any
event shall occur or condition shall exist as a result of which it is
necessary to amend the Registration Statement or amend or supplement
any Prospectus in order that the Prospectuses will not include any
untrue statements of a material fact or omit to state a material fact
necessary in order to make the statements therein not misleading in the
light of the circumstances existing at the time it is delivered to a
purchaser, or if it shall be necessary at any such time to amend the
Registration Statement or amend or supplement any Prospectus in order
to comply with the requirements of the 1933 Act or the 1933 Act
Regulations, the Company will promptly prepare and file with the
Commission, subject to Section 3(b), such amendment or supplement as
may be necessary to correct such statement or omission or to make the
Registration Statement or the Prospectuses comply with such
requirements, and the Company will furnish to the International
Managers such number of copies of such amendment or supplement as the
International Managers may reasonably request.
(f) Blue Sky Qualifications. The Company will use its best
efforts, in cooperation with the International Managers, to qualify the
Securities for offering and sale under the applicable securities laws
of such states and other jurisdictions (domestic or foreign) as the
Global Coordinator may designate and to maintain such qualifications in
effect for a period of not less than one year from the later of the
effective date of the Registration Statement and any Rule 462(b)
Registration Statement; provided, however, that neither the Company nor
any of the Selling Shareholders shall be obligated to file any general
consent to service of process or to qualify as a foreign corporation or
as a dealer in securities in any jurisdiction in which it is not so
qualified or to subject itself to taxation in respect of doing business
in any jurisdiction in which it is not otherwise so subject. In each
jurisdiction in which the Securities have been so qualified, the
Company will file such statements and reports as may be required by the
laws of such jurisdiction to continue such qualification in effect for
a period of not less than one year from the effective date of the
Registration Statement and any Rule 462(b) Registration Statement.
(g) Rule 158. The Company will timely file such reports
pursuant to the 1934 Act as are necessary in order to make generally
available to its securityholders as soon as practicable an earnings
statement for the purposes of, and to provide the benefits contemplated
by, the last paragraph of Section 11(a) of the 1933 Act.
(h) Restriction on Sale of Securities. During a period of 90
days from the date of the Prospectuses, the Company will not, without
the prior written consent of the Global Coordinator, (i) directly or
indirectly, offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase or otherwise transfer or
dispose of any share of Common Stock or any securities convertible into
or exercisable or exchangeable for Common Stock or file any
registration statement under the 1933 Act with respect to any of the
foregoing or (ii)
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enter into any swap or any other agreement or any transaction that
transfers, in whole or in part, directly or indirectly, the economic
consequence of ownership of the Common Stock, whether any such swap or
transaction described in clause (i) or (ii) above is to be settled by
delivery of Common Stock or such other securities, in cash or otherwise
except pursuant to Common Stock issued in connection with (y) the
Company's stock option plans existing at the Closing Time or (z)
acquisitions by the Company; provided that, in the case of clause (z),
it shall be a condition to such stock issuance that the third party
receiving such shares executes a lock-up agreement on substantially the
same terms as described above for a period expiring 90 days from the
date of the Prospectus and there shall be no further transfer of such
shares except in accordance with the provisions of such lock-up
agreement. The foregoing sentence shall not apply to the Securities to
be sold hereunder or under the U.S. Purchase Agreement
(i) Reporting Requirements. The Company, during the period
when the Prospectuses are required to be delivered under the 1933 Act
or the 1934 Act, will file all documents required to be filed with the
Commission pursuant to the 1934 Act within the time periods required by
the 1934 Act and the rules and regulations of the Commission
thereunder.
SECTION 4. Payment of Expenses. (a) Expenses. The Company will pay all
expenses incident to the performance of its obligations under this Agreement,
including (i) the preparation, printing and filing of the Registration Statement
(including financial statements and exhibits) as originally filed and of each
amendment thereto, (ii) the preparation, printing and delivery to the
Underwriters of this Agreement, any Agreement among Underwriters and such other
documents as may be required in connection with the offering, purchase, sale,
issuance or delivery of the Securities, (iii) the preparation, issuance and
delivery of the certificates for the Securities to the Underwriters, including
any stock or other transfer taxes and any stamp or other duties payable upon the
sale, issuance or delivery of the Securities by the Company to the Underwriters
and the transfer of the Securities between the International Managers and the
U.S. Underwriters, (iv) the fees and disbursements of the Company's counsel,
accountants and other advisors, (v) the qualification of the Securities under
securities laws in accordance with the provisions of Section 3(f) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Underwriters in connection therewith and in connection with the preparation
of the Blue Sky Survey and any supplement thereto, (vi) the printing and
delivery to the Underwriters of copies of each preliminary prospectus, any Term
Sheets and of the Prospectuses and any amendments or supplements thereto, (vii)
the preparation, printing and delivery to the Underwriters of copies of the blue
sky survey and any supplement thereto, (viii) the fees and expenses of any
transfer agent or registrar for the Securities and (ix) the filing fees incident
to, and the reasonable fees and disbursements of counsel to the Underwriters in
connection with, the review by the NASD of the terms of the sale of the
Securities.
(b) Expenses of the Selling Shareholders. The Company will pay all
expenses incident to the performance of the Selling Shareholders' obligations
under, and the consummation of the transactions contemplated by, this Agreement
(other than any underwriting discount), including (i) any stamp duties, capital
duties and stock transfer taxes, if any, payable upon the sale of the
International Option Securities by the Selling Shareholders to the
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Underwriters, and their transfer between the Underwriters pursuant to an
agreement between such Underwriters and (ii) the fees and disbursements of the
Selling Shareholders' counsel and accountants.
(c) Termination of Agreement. If this Agreement is terminated by the
Lead Managers in accordance with the provisions of Section 5 or Sections 9(a)(i)
or (ii) hereof, the Company shall reimburse the International Managers for all
of their out-of-pocket expenses, including the reasonable fees and disbursements
of counsel for the International Managers.
(d) Allocation of Expenses. The provisions of this Section shall not
affect any agreement that the Company and the Selling Shareholders may make for
the sharing of such costs and expenses.
SECTION 5. Conditions of International Managers' Obligations. The
obligations of the several International Managers hereunder are subject to the
accuracy of the representations and warranties of the Company and the Selling
Shareholders contained in Section 1 hereof or in certificates of any officer of
the Company or any Subsidiary of the Company or on behalf of the Selling
Shareholders delivered pursuant to the provisions hereof, to the performance by
the Company of its covenants and other obligations hereunder, and to the
following further conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective under the 1933 Act; and at Closing Time no stop order
suspending the effectiveness of the Registration Statement shall have
been issued under the 1933 Act or proceedings therefor initiated or
threatened by the Commission, and any request on the part of the
Commission for additional information shall have been complied with to
the reasonable satisfaction of counsel to the International Managers. A
prospectus containing the Rule 430A Information shall have been filed
with the Commission in accordance with Rule 424(b) (or a post-effective
amendment providing such information shall have been filed and declared
effective in accordance with the requirements of Rule 430A) or, if the
Company has elected to rely upon Rule 434, a Term Sheet shall have been
filed with the Commission in accordance with Rule 424(b).
(b) Opinion of Counsel for the Company and the Selling
Shareholders. At Closing Time, the Lead Managers shall have received
the favorable opinions, dated as of Closing Time, of (i) Dewitt, Ross &
Stevens s.c., counsel to the Company, relating to certain matters of
Wisconsin law, (ii) Skadden, Arps, Slate, Meagher & Flom LLP, special
counsel to the Company, (iii) Skadden, Arps, Slate, Meagher & Flom LLP,
special counsel for the Category 1 Selling Shareholders and special
counsel to the Category 2 Selling Shareholders with respect to certain
matters of New York law, and (iv) Dewitt, Ross & Stevens s.c. counsel
to the Category 2 Selling Shareholders, in each case in form and
substance reasonably satisfactory to counsel for the International
Managers together with signed or reproduced copies of such letter for
each of the other International Managers, dated such Date of Delivery,
to the effect set forth in Exhibits A-1, A-2, A-3 and A-4,
respectively, hereto.
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(c) Opinion of Counsel for International Managers. At Closing
Time, the Lead Managers shall have received the favorable opinion,
dated as of Closing Time, of Fried, Frank, Harris, Shriver & Jacobson,
counsel for the International Managers, together with signed or
reproduced copies of such letter for each of the other International
Managers with respect to the matters set forth in clauses (i), (ii)
(solely as to preemptive or other similar rights arising by operation
of law or under the charter or bylaws of the Company), (v) (solely as
to the information contained in or incorporated by reference therein in
the Prospectus with respect to the "Description of Capital Stock") and
(viii) of Exhibit A-1; and to the matters set forth in paragraph 3 and
the penultimate paragraph Exhibit A-2. In giving such opinion such
counsel may rely, as to all matters governed by the laws of
jurisdictions other than the law of the State of New York and the
federal law of the United States and the General Corporation Law of the
State of Delaware, upon the opinions of counsel satisfactory to the
Lead Managers. Such counsel may also state that, insofar as such
opinion involves factual matters, they have relied, to the extent they
deem proper, upon certificates of officers of the Company and its
Subsidiaries and of the Selling Shareholders and certificates of public
officials.
(d) Officers' Certificate. At Closing Time, there shall not
have been, since the date hereof or since the respective dates as of
which information is given in the Prospectuses, any material adverse
change in the condition (financial or otherwise), earnings, business
affairs or business prospects of the Company and its Subsidiaries
considered as one enterprise, whether or not arising in the ordinary
course of business, and the Lead Managers shall have received a
certificate of the President or a Vice President of the Company and of
the chief financial or chief accounting officer of the Company, dated
as of Closing Time, to the effect that (i) there has been no such
material adverse change, (ii) the representations and warranties in
Section 1(a) hereof are true and correct with the same force and effect
as though expressly made at and as of Closing Time, (iii) the Company
has complied with all agreements and satisfied all conditions on its
part to be performed or satisfied at or prior to Closing Time, and (iv)
no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or are pending or threatened by the Commission.
(e) Selling Shareholders' Certificate. At Closing Time, the
Lead Managers shall have received a certificate of each Selling
Shareholder (which may be executed on behalf of each Selling
Shareholder by the general partner or a duly authorized executive
officer of such Selling Shareholder), dated as of Closing Time, to the
effect that (i) the representations and warranties of such Selling
Shareholder contained in Section 1(b) hereof are true and correct with
the same force and effect as though expressly made at and as of the
Closing Time and (ii) such Selling Shareholder has complied with all
agreements and satisfied all conditions on its part to be performed or
satisfied under this Agreement at or prior to the Closing Time.
(f) Accountant's Comfort Letters. At the time of the execution
of this Agreement, the Lead Managers shall have received from KPMG Peat
Marwick LLP a letter in the form of Exhibit C-1 hereto and from Coopers
& Lybrand LLP a letter in the
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form of Exhibit C-2 hereto, dated such date, in form and substance
reasonably satisfactory to the Lead Managers, together with signed or
reproduced copies of such letter for each of the other International
Managers containing statements and information of the type ordinarily
included in accountants' "comfort letters" to underwriters with respect
to the financial statements and certain financial information contained
in the Registration Statement and the Prospectuses.
(g) Bring-down Comfort Letters. At Closing Time, the Lead
Managers shall have received letters from KPMG Peat Marwick LLP and
Coopers & Lybrand LLP, dated as of Closing Time, to the effect that
they reaffirm the statements made in the letter furnished pursuant to
subsection (e) of this Section, except that the specified date referred
to shall be a date not more than three business days prior to Closing
Time.
(h) No Objection. The NASD has confirmed that it has not
raised any objection with respect to the fairness and reasonableness of
the underwriting terms and arrangements.
(i) Lock-up Agreements. At the date of this Agreement, the
Lead Managers shall have received an agreement substantially in the
form of Exhibit B hereto signed by the persons listed on Schedule D
hereto.
(j) Purchase of Initial U.S. Securities. Contemporaneously
with the purchase by the International Managers of the Initial
International Securities under this Agreement, the U.S. Underwriters
shall have purchased the Initial U.S. Securities under the U.S.
Purchase Agreement.
(k) Custody Agreement. At the date of this Agreement the Lead
Managers shall have received copies of the Power of Attorney and
Custody Agreement executed by each of the Selling Shareholders.
(l) Conditions to Purchase of International Option Securities.
In the event that the International Managers exercise their option
provided in Section 2(b) hereof to purchase all or any portion of the
International Option Securities, the representations and warranties of
the Company contained herein and the statements in any certificates
furnished by the Company or any Subsidiary of the Company hereunder
shall be true and correct as of each Date of Delivery and, at the
relevant Date of Delivery, the Lead Managers shall have received:
(i) Officers' Certificate. A certificate, dated such Date of
Delivery, of the President or a Vice President of the
Company and of the chief financial or chief accounting
officer of the Company confirming that the certificate
delivered at the Closing Time pursuant to Section 5(d)
hereof remains true and correct as of such Date of
Delivery.
(ii) Selling Shareholder's Certificate. At the Date of
Delivery, the Lead Managers shall have received a
certificate of each Selling Shareholder
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(which may be executed on behalf of each Selling
Shareholder by the general partner or a duly authorized
executive officer of such Selling Shareholder or such
Selling Shareholder's Attorney-in-Fact), dated as of
Date of Delivery, to the effect that (x) the
representations and warranties of such Selling
Shareholder contained in Section 1(b) hereof are true
and correct with the same force and effect as though
expressly made at and as of Date of Delivery and (y)
such Selling Shareholder has complied with all
agreements and satisfied all conditions on their part to
be performed or satisfied under this Agreement at or
prior to Date of Delivery.
(iii) Opinion of Counsel for Company and the Selling
Shareholders. The favorable opinion of (w) Dewitt,
Ross & Stevens s.c., counsel to the Company, relating
to certain matters of Wisconsin law, (x) Skadden, Arps,
Slate, Meagher & Flom LLP, special counsel to the
Company, (y) Skadden, Arps, Slate, Meagher & Flom LLP,
special counsel to the Category 1 Selling Shareholders
and special counsel to the Category 2 Selling
Shareholders with respect to certain matters of New York
law, and (z) Dewitt, Ross & Stevens s.c. counsel to the
Category 2 Selling Shareholders, in each case in form
and substance reasonably satisfactory to counsel for the
International Managers together with signed or
reproduced copies of such letter for each of the other
International Managers, dated such Date of Delivery,
relating to the International Option Securities to be
purchased on such Date of Delivery and otherwise to the
same effect as the opinion required by Section 5(b).
(iv) Opinion of Counsel for International Managers. The
favorable opinion of Fried, Frank, Harris, Shriver &
Jacobson, counsel for the International Managers, dated
such Date of Delivery, relating to the International
Option Securities to be purchased on such Date of
Delivery and otherwise to the same effect as the opinion
required by Section 5(c) hereof.
(v) Bring-down Comfort Letters. Letters from Coopers &
Lybrand LLP and KPMG Peat Marwick LLP in form and
substance reasonably satisfactory to the Lead Managers
and dated such Date of Delivery, substantially in the
same form and substance as the letter furnished to the
Lead Managers pursuant to Section 5(g) hereof, except
that the "specified date" in the letter furnished
pursuant to this paragraph shall be a date not more than
five days prior to such Date of Delivery.
(m) Additional Documents. At Closing Time and at each Date of
Delivery, counsel for the International Managers shall have been
furnished with such documents and opinions as they may reasonably
require for the purpose of enabling them to pass upon the issuance and
sale of the Securities as herein contemplated, or in order to evidence
the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all
proceedings taken by the Company and the Selling Shareholders in
connection with the issuance and sale of the Securities as herein
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contemplated shall be reasonably satisfactory in form and substance to
the Lead Managers and counsel for the International Managers.
(n) Termination of Agreement. If any condition specified in
this Section shall not have been fulfilled when and as required to be
fulfilled, this Agreement, or, in the case of any condition to the
purchase of International Option Securities on a Date of Delivery which
is after the Closing Time, the obligations of the several International
Managers to purchase the relevant Option Securities, may be terminated
by the Lead Managers by notice to the Company at any time at or prior
to Closing Time or such Date of Delivery, as the case may be, and such
termination shall be without liability of any party to any other party
except as provided in Section 4 and except that Sections 1, 6, 7 and 8
shall survive any such termination and remain in full force and effect.
SECTION 6. Indemnification.
(a) Indemnification of International Managers by the Company. The
Company agrees to indemnify and hold harmless each International Manager and
each person, if any, who controls any International Manager within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows to the
extent set forth below:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the Rule
430A Information and the Rule 434 Information, if applicable, or the
omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact included in any preliminary prospectus or
the Prospectuses (or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission; provided
that (subject to Section 6(d) below) any such settlement is effected
with the written consent of the indemnifying party; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by Merrill
Lynch), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
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provided, however, that this indemnity agreement shall not (i) apply to any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Company by any International Manager through the Lead Managers or any U.S.
Underwriter through the U.S. Representatives expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the International Prospectus or U.S. Prospectus, as the case may
be, (or any amendment or supplement thereto) or (ii) inure to the benefit of any
International Manager from whom the person asserting any loss, liability, claim,
damage or expense, purchased Securities, or any person controlling such
International Manager, if it shall be established that a copy of the Prospectus
(as then amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) was not sent or given by or on behalf of such
U.S. Underwriter to such person, if required by law to have been so delivered,
at or prior to the confirmation of the sale of such Securities to such person in
any case where the Company complied with its obligations under Sections 3(a),
3(b) and 3(d), and if the Prospectus (as so amended or supplemented) would have
cured any defect giving rise to such loss, liability, claim damage, or expense.
(b) Indemnification of the International Managers by the Selling
Shareholders. Each Selling Shareholder, severally and not jointly, agrees to
indemnify and hold harmless each International Manager and each person, if any,
who controls any International Manager within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act as follows to the extent set forth below:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the Rule
430A Information and the Rule 434 Information, if applicable, or the
omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact included in any preliminary prospectus or
the Prospectuses (or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission provided
that (subject to Section 6(d) below) any such settlement is effected
with the written consent of the indemnifying party; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by Merrill
Lynch), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
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governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission to the extent that any such
expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not (i) apply to any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Company by any International Manager through the Lead Managers or any U.S.
Underwriter through the U.S. Representative expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the International Prospectus or U.S. Prospectus, as the case may
be (or any amendment or supplement thereto) or (ii) inure to the benefit of any
International Manager from whom the person asserting any loss, liability, claim,
damage or expense, purchased Securities, or any person controlling such
International Manager, if it shall be established that a copy of the Prospectus
(as then amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) was not sent or given by or on behalf of such
International Manager to such person, if required by law to have been so
delivered, at or prior to the confirmation of the sale of such Securities to
such person in any case where the Company complied with its obligations under
Sections 3(a), 3(b) and 3(d), and if the Prospectus (as so amended or
supplemented) would have cured any defect giving rise to such loss, liability,
claim damage, or expense; provided, however, further, that with respect to each
Selling Shareholder, (x) the indemnification provision in this paragraph (b)
shall only apply to any loss, liability, claim, damage or expense to the extent
arising out of any untrue statement or omission, or alleged untrue statement or
omission, made in reliance upon and in conformity with written information
furnished to the Company by such Selling Shareholder expressly for use in the
Registration Statement (or any amendment thereto) including the Rule 430A
Information and the Rule 434 Information if applicable, or any such preliminary
International prospectus or the International Prospectus or the U.S. Prospectus,
as the case may be, (or any amendment or supplement thereto) and (y) each
Selling Shareholder's aggregate liability under this Section 6 shall be limited
to an amount equal to the net proceeds (after deducting the underwriting
discount but before deducting expenses) received by such Selling Shareholder
from the sale of Securities pursuant to this Agreement.
(c) Indemnification of Company, Directors and Officers and Selling
Shareholders. Each International Manager severally agrees to indemnify and hold
harmless the Company, its directors, each of its officers who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act and each
Selling Shareholder and each person, if any, who controls any Selling
Shareholder within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act against any and all loss, liability, claim, damage and expense
described in the indemnity contained in Section 6(a) and Section 6(b) hereof, as
incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment thereto), including the Rule 430A Information and the Rule 434
Information, if applicable, or any preliminary International Prospectus or the
International Prospectus (or any amendment or supplement thereto) in reliance
upon and in conformity with written information furnished to the Company by such
International Manager through the Lead
-25-
Managers expressly for use in the Registration Statement (or any amendment
thereto) or such preliminary prospectus or the International Prospectus (or any
amendment or supplement thereto).
(d) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) and
Section 6(b) above, counsel to the indemnified parties shall be selected by
Merrill Lynch, and, in the case of parties indemnified pursuant to Section 6(c)
above, counsel to the indemnified parties shall be selected by the Company or
the indemnified Selling Shareholder, as appropriate. An indemnifying party may
participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any necessary local counsel) separate from
their own counsel for all indemnified parties in connection with any one action
or separate but similar or related actions in the same jurisdiction arising out
of the same general allegations or circumstances; No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(e) Settlement without Consent if Failure to Reimburse. If at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel for which the indemnifying
party is responsible pursuant to the terms hereof, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(iii) or Section (6)(b)(iii) effected without its written consent if
(i) such settlement is entered into more than 60 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 45 days prior to
such settlement being entered into and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with such request prior to
the date of such settlement.
(f) Other Agreements with Respect to Indemnification. The provisions of
this Section shall not affect any agreement among the Company and the Selling
Shareholders with respect to indemnification.
-26-
SECTION 7. Contribution. If, although applicable in accordance with
its terms, the indemnification provided for in Section 6 hereof is for any
reason unavailable to or insufficient to hold harmless an indemnified party in
respect of any losses, liabilities, claims, damages or expenses referred to
therein, then each indemnifying party shall contribute to the aggregate amount
of such losses, liabilities, claims, damages and expenses incurred by such
indemnified party, as incurred, (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company and the Selling
Shareholders, collectively, on the one hand and the International Managers on
the other hand from the offering of the Securities pursuant to this Agreement or
(ii) if the allocation provided by clause (i) 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
Company and the Selling Shareholders on the one hand and of the International
Managers on the other hand in connection with the statements or omissions, which
resulted in such losses, liabilities, claims, damages or expenses, as well as
any other relevant equitable considerations.
The relative benefits received by the Company and the Selling
Shareholders on the one hand and the International Managers on the other hand in
connection with the offering of the International Securities pursuant to this
Agreement shall be deemed to be in the same respective proportions as the total
net proceeds from the offering of the International Securities pursuant to this
Agreement (before deducting expenses) received by the Company and the Selling
Shareholders and the total underwriting discount received by the International
Managers, in each case as set forth on the cover of the International
Prospectus, or, if Rule 434 is used, the corresponding location on the Term
Sheet, bear to the aggregate initial public offering price of the International
Securities as set forth on such cover.
The relative fault of the Company and the Selling Shareholders on the
one hand and the International Managers on the other hand shall be determined by
reference to, among other things, whether any such untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Company or the Selling Shareholders
or by the International Managers and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company, the Selling Shareholders and the International Managers
agree that it would not be just and equitable if contribution pursuant to this
Section 7 were determined by pro rata allocation (even if the International
Managers were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to above in this Section 7. The aggregate amount of losses, liabilities, claims,
damages and expenses incurred by an indemnified party and referred to above in
this Section 7 shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever based upon any
such untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no International
Manager shall be required to contribute any amount in excess of the amount by
which the total price at which the International Securities underwritten by it
and distributed to the public were offered to the public
-27-
exceeds the amount of any damages which such International Manager has otherwise
been required to pay by reason of any 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 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, (a) each person, if any, who controls a
International Manager within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as such
International Manager, (b) each director of the Company, each officer of the
Company who signed the Registration Statement, and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act shall have the same rights to contribution as the Company and
(c) each person, if any, who controls any Selling Shareholder within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same
rights to contribution as such Selling Shareholder. The International Managers
respective obligations to contribute pursuant to this Section 7 are several in
proportion to the number of Initial International Securities set forth opposite
their respective names in Schedule A hereto and not joint.
Notwithstanding the provisions of this Section 7, no Selling
Shareholder shall be required to contribute any amount in excess of the amount
equal to the net proceeds (after deducting the underwriting discount but before
deducting expenses) received by such Selling Shareholder from the sale of
International Securities pursuant to this Agreement.
The provisions of this Section shall not affect any agreement among the
Company and the Selling Shareholders with respect to contribution.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company or any of its
Subsidiaries or the Selling Shareholders submitted pursuant hereto, shall remain
operative and in full force and effect, regardless of any investigation made by
or on behalf of any International Manager or controlling person, or by or on
behalf of the Company or any Selling Shareholder, and shall survive delivery of
the International Option Securities to the International Managers.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Lead Managers may terminate this
Agreement, by notice to the Company and the Attorneys-in-Fact on behalf of the
Selling Shareholders, at any time at or prior to Closing Time (i) if there has
been, since the time of execution of this Agreement or since the respective
dates as of which information is given in the International Prospectus, any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
Subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) if there shall have occurred a downgrading
in the rating assigned to any of the Company's debt securities by
-28-
any nationally recognized securities rating agency, or if such securities rating
agency shall have publicly announced that it has under surveillance or review,
with possible negative implications, its rating of any of the Company's debt
securities, or (iii) if there has occurred any material adverse change in the
financial markets in the United States or the international financial markets,
any outbreak of hostilities or escalation thereof or other calamity or crisis or
any change or development involving a prospective change in national or
international political, financial or economic conditions, in each case the
effect of which is such as to make it, in the judgment of the Lead Managers,
impracticable to market the Securities or to enforce contracts for the sale of
the Securities, or (iv) if trading in any securities of the Company has been
suspended or materially limited by the Commission or the New York Stock
Exchange, or if trading generally on the American Stock Exchange or the New York
Stock Exchange or in the Nasdaq National Market has been suspended or materially
limited, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices have been required, by any of said exchanges or by such system
or by order of the Commission, the National Association of Securities Dealers,
Inc. or any other governmental authority, or (v) if a banking moratorium has
been declared by either Federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6, 7 and 8 shall survive such termination and remain in full force and
effect.
SECTION 10. Default by One or More of the International Managers. If
one or more of the International Managers shall fail at Closing Time or a Date
of Delivery to purchase the Securities which it or they are obligated to
purchase under this Agreement (the "Defaulted Securities"), the Lead Managers
shall have the right, within 24 hours thereafter, to make arrangements for one
or more of the non-defaulting International Managers, or any other underwriters,
to purchase all, but not less than all, of the Defaulted Securities in such
amounts as may be agreed upon and upon the terms herein set forth; if, however,
the Lead Managers shall not have completed such arrangements within such 24-hour
period, then:
(a) if the number of Defaulted Securities does not exceed 10%
of the number of International Securities to be purchased on such date,
each of the non-defaulting International Managers shall be obligated,
severally and not jointly, to purchase the full amount thereof in the
proportions that their respective underwriting obligations hereunder
bear to the underwriting obligations of all non-defaulting
International Managers, or
(b) if the number of Defaulted Securities exceeds 10% of the
number of International Securities to be purchased on such date, this
Agreement or, with respect to any Date of Delivery which occurs after
the Closing Time, the obligation of the International Managers to
purchase the International Option Securities to be purchased and sold
on such Date of Delivery shall terminate without liability on the part
of any non-defaulting International Manager.
No action taken pursuant to this Section shall relieve any defaulting
International Manager from liability in respect of its default.
-29-
In the event of any such default which does not result in a termination
of this Agreement or, in the case of a Date of Delivery which is after the
Closing Time, which does not result in a termination of the obligation of the
International Managers to purchase and the Selling Shareholders to sell the
relevant International Securities, as the case may be, either (i) the Lead
Managers or (ii) the Selling Shareholders shall have the right to postpone the
Closing Time or the relevant Date of Delivery, as the case may be, for a period
not exceeding seven days in order to effect any required changes in the
Registration Statement or Prospectus or in any other documents or arrangements.
As used herein, the term "International Manager" includes any person substituted
for a International Manager under this Section 10.
SECTION 11. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
International Managers shall be directed to the Lead Managers at North Tower,
World Financial Center, New York, New York 10281-1201, attention of W. Gregg
Smart, with a copy to Fried, Frank, Harris, Shriver & Jacobson, 1 New York
Plaza, New York, New York 10004, attention of Valerie Ford Jacob, Esq.; and
notices to the Company shall be directed to it at Rayovac Corporation, 601
Rayovac Drive, Madison, Wisconsin 53711, attention of James A. Broderick, Esq.,
with a copy to Louis A. Goodman, Esq. Skadden, Arps, Slate, Meagher & Flom, LLP,
One Beacon Street, Boston, MA; notices to the Selling Shareholders shall be
delivered to them at the address for notices indicated on the Power of Attorney
and Custody Agreement.
SECTION 12. Parties. This Agreement shall each inure to the benefit of
and be binding upon the International Managers, the Company, and the Selling
Shareholders and, their respective successors. Nothing expressed or mentioned in
this Agreement is intended or shall be construed to give any person, firm or
corporation, other than the International Managers, the Company, and the Selling
Shareholders and, their respective successors and the controlling persons and
officers and directors referred to in Sections 6 and 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the International Managers, the Company, the Selling
Shareholders, and their respective successors, and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Securities from
any International Manager shall be deemed to be a successor by reason merely of
such purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED
TIMES OF DAY REFER TO NEW YORK CITY TIME. AS USED HEREIN, THE TERM "BUSINESS
DAY" MEANS ANY DAY ON WHICH THE NEW YORK STOCK EXCHANGE AND COMMERCIAL BANKS IN
NEW YORK CITY ARE REGULARLY OPEN FOR BUSINESS.
SECTION 14. Effect of Headings. The Article and Section headings herein
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
-30-
SECTION 15. Counterparts.. This Agreement may be executed in one or
more counterparts and, when a counterpart has been executed by each party
hereto, all such counterparts taken together shall constitute one and the same
agreement. The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof
-31-
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company and the Attorneys-in-Fact for
the Selling Shareholders a counterpart hereof, whereupon this instrument, along
with all counterparts, will become a binding agreement among the International
Managers, the Company and the Selling Shareholders in accordance with its terms.
Very truly yours,
RAYOVAC CORPORATION
By: ____________________________
Name: David A. Jones
Title: Chairman of the Board,
Chief Executive Officer and
President
SELLING SHAREHOLDERS LISTED IN
CATEGORY 1 ON SCHEDULE B HERETO
THOMAS H. LEE EQUITY FUND III, L.P.
By: THL Equity Advisors III Limited
Partnership, as General Partner
By: THL Equity Trust III,
as General Partner
By: ____________________________
Name:
Title:
THOMAS H. LEE FOREIGN FUND III, L.P.
By: THL Equity Advisors III Limited
Partnership, as General Partner
-1-
By: THL Equity Trust III,
as General Partner
By: ____________________________
Name:
Title:
THL-CCI LIMITED PARTNERSHIP
By: THL Investment Management Corp.
as General Partner
By: ____________________________
Name:
Title:
SELLING SHAREHOLDERS LISTED IN
CATEGORY 2 ON SCHEDULE B HERETO
By: ____________________________
Name:
Title: Attorney-in-Fact on behalf of
the Selling Shareholders
listed in Category 2 on
Schedule B hereto
CONFIRMED AND ACCEPTED, as of the date first above written:
MERRILL LYNCH INTERNATIONAL
BEAR, STEARNS INTERNATIONAL LIMITED
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
SMITH BARNEY INC.
By: MERRILL LYNCH INTERNATIONAL
By: _____________________________
Authorized Signatory
For themselves and as Lead Managers of the
other International Managers named in Schedule A hereto.
-2-
SCHEDULE A
Number of
Initial International
Name of International Manager Securities
----------------------------- ----------
Merrill Lynch International................................
Bear, Stearns International Limited........................
Donaldson, Lufkin & Jenrette Securities Corporation........
Smith Barney, Inc..........................................
Total...................................................... 1,300,000
=========
-1-
SCHEDULE B
Selling Shareholder Number of Initial International
Securities to be Sold*
Category 1
THOMAS H. LEE EQUITY FUND III, L.P.
THOMAS H. LEE FOREIGN FUND III, L.P.
THL-CCI Limited Partnership
Total Category 1
Category 2
Carter J. Balfour
Kevin Balfour
Kenneth V. Biller
James A. Broderick
Fred Christopher Brooks
Bernard T. Conner
David M. Darkoch
Kenneth Drescher
Fleming Trust
Mark G. Hines
John E. Hofkes
Kent J. Hussey
David A. Jones
Pamela A. Josheff
Robert K. Kloppenburg
Richard A. Kreutz
Trygve Lonnebotn
Terrence P. McGraw
Rayovac Corporation Deferred Compensation
Emil J. Ripley and Laverne M. Ripley
Stephen P. Salzieder
Stephen P. Shanesy
Shanesy Children's Trust f/b/o Kelsey Alice Shanesy
Shanesy Children's Trust f/b/o Nicholas Auster Shanesy
Dale R. Tetzlaff
Michael G. Thompson
Merrill Tomlin
Deborah L. Ulrich
Lucille Warren
Roger F. Warren
Andrew P. Warren Irrevocable Trust
Michael F. Warren Irrevocable Trust
Gary E. Wilson
Martin W. Wirt
Karl M. Wulf
Total Category 2
Total of Category 1 and Category 2......................... 1,300,000
=========
-2-
SCHEDULE B-1
Over allotment Number of International Option
Selling Shareholder Securities
to be Sold*
Category 1
THOMAS H. LEE EQUITY FUND III, L.P.
THOMAS H. LEE FOREIGN FUND III, L.P.
THL-CCI Limited Partnership
Total Category 1
Category 2
Carter J. Balfour
Kevin Balfour
Kenneth V. Biller
James A. Broderick
Fred Christopher Brooks
Bernard T. Conner
David M. Darkoch
Kenneth Drescher
Fleming Trust
Mark G. Hines
John E. Hofkes
Kent J. Hussey
David A. Jones
Pamela A. Josheff
Robert K. Kloppenburg
Richard A. Kreutz
Trygve Lonnebotn
Terrence P. McGraw
Rayovac Corporation Deferred Compensation
Emil J. Ripley and Laverne M. Ripley
Stephen P. Salzieder
Stephen P. Shanesy
Shanesy Children's Trust f/b/o Kelsey Alice Shanesy
Shanesy Children's Trust f/b/o Nicholas Auster Shanesy
Dale R. Tetzlaff
Michael G. Thompson
Merrill Tomlin
Deborah L. Ulrich
Lucille Warren
Roger F. Warren
Andrew P. Warren Irrevocable Trust
Michael F. Warren Irrevocable Trust
Gary E. Wilson
Martin W. Wirt
Karl M. Wulf
Total Category 2
Total of Category 1 and Category 2..................... 195,000
=======
SCHEDULE C
Rayovac Corporation.
1,300,000 Shares of Common Stock
(Par Value $0.01 Per Share)
1. The public offering price per share for the Securities, determined
as provided in said Section 2, shall be $ .
2. The purchase price per share for the International Securities to be
paid by the several International Managers shall be $ , being an amount equal to
the public offering price set forth above less $ per share; provided that the
purchase price per share for any International Option Securities purchased upon
the exercise of the over-allotment option described in Section 2(b) shall be
reduced by an amount per share equal to any dividends or distributions declared
by the Company and payable on the Initial International Securities but not
payable on the International Option Securities.
SCHEDULE D
List of Persons and Entities Subject to Lock-up
THOMAS H. LEE EQUITY FUND III, L.P.
THOMAS H. LEE FOREIGN FUND III, L.P.
THL-CCI Limited Partnership
Carter J. Balfour
Kevin Balfour
Kenneth V. Biller
James A. Broderick
Fred Christopher Brooks
Bernard T. Conner
David M. Darkoch
Kenneth Drescher
Fleming Trust
Mark G. Hines
John E. Hofkes
Kent J. Hussey
David A. Jones
Pamela A. Josheff
Robert K. Kloppenburg
Richard A. Kreutz
Trygve Lonnebotn
Terrence P. McGraw
Rayovac Corporation Deferred Compensation
Emil J. Ripley and Laverne M. Ripley
Stephen P. Salzieder
Stephen P. Shanesy
Shanesy Children's Trust f/b/o Kelsey Alice Shanesy
Shanesy Children's Trust f/b/o Nicholas Auster Shanesy
Dale R. Tetzlaff
Michael G. Thompson
Merrill Tomlin
Deborah L. Ulrich
Lucille Warren
Roger F. Warren
Andrew P. Warren Irrevocable Trust
Michael F. Warren Irrevocable Trust
Gary E. Wilson
Martin W. Wirt
Karl M. Wulf
Schedule E
Subsidiaries of the Company
Direct Power Plus, Inc., a New York corporation
Minera Vidaluz S.A. DE C.V., a Mexico corporation
ROV Holding, Inc., a Delaware corporation
Vidor Battery Company, a Wisconsin corporation
Rayovac Foreign Sales Corporation, a Barbados corporation
Rovcal, Inc., a California corporation
Rayovac (UK) Limited, an United Kingdom corporation
Rayovac Europe Limited, an United Kingdom corporation
Rayovac Canada, Inc., a Canada corporation
Rayovac Far East Limited, a Hong Kong corporation
Zoephos International N.V., a Netherlands Antilles corporation
Rayovac Europe, B.V., a Netherlands Antilles corporation
Brisco Electronics, B.V., a Netherlands Antilles corporation
Brisco GmbH, a German corporation
-1-
EXHIBIT A-1
FORM OF OPINION OF DEWITT, ROSS & STEVENS S.C., WISCONSIN COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Bear, Stearns & Co. Inc.
Donaldson, Lufkin & Jenrette Securities Corporation
Smith Barney Inc.
as U.S. Representatives of the several
U.S. Underwriters to be named in the
U.S. Purchase Agreement
Merrill Lynch International
Bear, Stearns International Limited
Donaldson, Lufkin & Jenrette Securities Corporation
Smith Barney Inc.
as representatives of the several
international managers to be named
in the International Purchase Agreement
c/o Merrill Lynch & Co.
North Tower
World Financial Center
New York, New York 10210-1209
Ladies and Gentlemen:
We have acted as special counsel to Rayovac Corporation, a Wisconsin
corporation (the "Company") in connection with (i) the registration and sale by
the Company of 5,200,000 shares of the Company's Common Stock, par value $0.01
per share (the "U.S. Shares"), pursuant to the terms of the U.S. Purchase
Agreement (the "U.S. Purchase Agreement"), dated April [ ], 1998, between the
Company, the persons listed on Schedule B thereto (the "Selling Shareholders")
and the U.S. Underwriters named in Schedule A thereto (the "U.S. Underwriters")
and (ii) the registration and sale by the company of 1,300,000 shares of Common
Stock (the "International Shares," and together with the U.S. Shares, the
"Shares"), pursuant to the terms of the International Purchase Agreement (the
"International Purchase Agreement"), dated April [ ], 1998, between the Company,
the persons listed on Schedule B thereto (the "Selling
-1-
Shareholders") and the international managers named in Schedule A thereto (the
"International Managers").
This opinion is being furnished pursuant to Section 5(b) of the U.S.
Purchase Agreement and Section 5(b) of the International Purchase Agreement.
Capitalized terms used but not otherwise defined herein shall have the
respective meanings set forth in the U.S. Purchase Agreement.
In connection with this opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of (i) the Registration
Statement on Form S-3 (File No. 333- ) relating to the Shares filed with the
Securities and Exchange Commission (the "Commission") on April 2, 1998, under
the Securities Act of 1933, as amended (the "Act"), including the information
deemed to be a part of the Registration Statement at the time of effectiveness
pursuant to Rule 430A of the General Rules and Regulations under the Act (the
"Rules and Regulations") (such registration statement, as so amended, being
hereinafter referred to as the "Registration Statement"); (ii) the final U.S.
prospectus dated [ ], 1998, relating to the U.S. Shares filed with the
Commission on [ ], 1998, pursuant to Rule 424(b) of the Rules and Regulations
(the "U.S. Prospectus"); (iii) the final International Prospectus dated [ ],
1998, pursuant to Rule 424(b) of the Rules and Regulations (the "International
Prospectus" and together with the U.S. Prospectus, the "Prospectuses"); (iv)
executed copies of the U.S. Purchase Agreement and the International Purchase
Agreement; (v) a specimen certificate representing the Common Stock (the
"Specimen Certificate"); and (vi) the certificate of James A. Broderick, General
Counsel to the Company, attached hereto as Exhibit A (the "Officer's
Certificate"). We have also examined originals or certified or otherwise
identified to our satisfaction, of all such records of the Company and all such
agreements, certificates of public officials, certificates of officers or other
representatives of the Company and others and such other documents, certificates
and records as we have deemed necessary or appropriate as a basis for the
opinions set forth herein.
In our examination, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified, conformed or photostatic copies and the
authenticity of the originals of such copies. In making our examination of
executed documents, we have assumed that the parties thereto (including the
Company) had the power, corporate or other, to enter into and perform all
obligations thereunder and have also assumed the due authorization by all
requisite action, corporate or other, and execution and delivery by such parties
of such documents and the validity and binding effect thereof. As to any facts
material to the opinions expressed herein that are not independently established
or verified, we have relied upon oral or written statements and representations
of officers and other representatives of the Company.
For purposes of the opinions set forth below, with respect to any
document which by its terms or otherwise is governed by the laws of any
jurisdiction other than the United States of America or the State of Wisconsin,
such opinions are based solely upon our understanding of the plain language of
such document, and we express no opinion as to the interpretation of any such
document or of any term or provisions thereof under applicable governing law or
as to the effect
2
on the opinions expressed herein of any interpretation hereof inconsistent with
such undertaking. For purposes of our opinion set forth in paragraph 4, we have
assumed that the certificates representing the shares referred to in such
paragraph conform to the Specimen Certificate. Our opinion set forth in
paragraph 12, is based solely upon the Officer's Certificate and our discussions
with James A. Broderick, General Counsel of the Company, we have not performed
any docket search in any jurisdiction, and have not done any other investigation
of any kind.
The opinions expressed herein are limited to the laws of the State of
Wisconsin and the federal laws of the United States of America to the extent
specifically referred to herein.
Based upon and subject to the foregoing and to the other qualifications
and limitations set forth herein, we are of the opinion that:
(i) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Wisconsin.
(ii) The issuance of the Shares is not subject to the preemptive or
other similar rights of any securityholder of the Company.
(iii) The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectuses and to enter into and perform its obligations under the U.S.
Purchase Agreement and the International Purchase Agreement.
(iv) The form of certificate used to evidence the Common Stock complies
in all material respects with all applicable statutory requirements, with any
applicable requirements of the charter and by-laws of the Company.
(v) The statements contained in or incorporated by reference therein,
in the Prospectuses, with respect to the "Description of Capital Stock," to the
extent that such statements constitute matters of law, summaries of legal
matters or legal conclusions are correct in all material respects.
(vi) The Company is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify or
to be in good standing would not result in a Material Adverse Effect.
(vii) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectuses under the caption "Capitalization"
(except for subsequent issuances, if any, pursuant to the U.S. Purchase
Agreement and the International Purchase Agreement); the shares of issued and
outstanding capital stock have been and will have been at the Closing Time duly
authorized and validly issued and are fully paid and non-assessable; except to
the extent such shares are assessable as provided in Section 180.0622 of the
Wisconsin Business Corporation Law, and none of the outstanding shares of
capital stock of the Company was or will have been at the Closing Time issued in
violation of the preemptive or other similar rights of any securityholder of the
Company.
3
(viii) The Shares to be purchased by the U.S. Underwriters and the
International Managers from the Selling Shareholders have duly authorized for
issuance and sale to the Underwriters pursuant to the U.S. Purchase Agreement or
the International Purchase Agreement and when delivered by the Selling
Shareholder pursuant thereto, will by validly issued, and fully paid and
non-assessable and no holder of the Shares is or will by subject to personal
liability by reason of being such a holder, except to the extent such shares are
assessable as provided in Section 180.0622 of the Wisconsin Business Corporation
Law.
(ix) Vidor Battery Company, the sole subsidiary is incorporated or
organized under the laws of the State of Wisconsin (a "Wisconsin Subsidiary")
has been duly incorporated and is validly existing as a corporation in good
standing under the laws of the State of Wisconsin, has corporate power and
authority to own, lease and operate its properties and to conduct its business
as described in the Prospectuses and is duly qualified as a foreign corporation
to transact business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify or
to be in good standing would not result in a Material Adverse Effect.
(x) The information in Part II of the Registration Statement under Item
15, "Indemnification of Officers and Directors," to the extent that it
constitutes matters of law, summaries of legal matters, the Company's charter
and bylaws or legal proceedings, or legal conclusions, has been reviewed by us
and is correct in all material respects.
(xi) The U.S. Purchase Agreement and the International Purchase
Agreement have been duly authorized, executed and delivered by the Company.
(xii) To the best of our knowledge, neither the Company nor its sole
Wisconsin Subsidiary is in violation of its charter or by-laws and no default by
the Company or its Wisconsin Subsidiary exists in the due performance or
observance of any material obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan agreement, note, lease or
other agreement or instrument that is described or referred to in the
Registration Statement or the Prospectuses or filed or incorporated by reference
as an exhibit to the Registration Statement.
(xiii) The execution, delivery and performance of the U.S. Purchase
Agreement and the International Purchase Agreement and the consummation of the
transactions contemplated in the U.S. Purchase Agreement, the International
Purchase Agreement and in the Registration Statement and compliance by the
Company with its obligations under the U.S. Purchase Agreement and the
International Purchase Agreement have been duly authorized by all necessary
corporate action and do not and will not, whether with or without the giving of
notice or lapse of time or both, conflict with or constitute a breach of, or
default or Repayment Event (as defined in Section 1(a)(x) of the Purchase
Agreements) under, or result in the creation or imposition of any lien, charge
or encumbrance upon any property or assets of the Company or any Wisconsin
Subsidiary pursuant to any contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, lease or any other agreement or instrument to which the
Company or its Wisconsin Subsidiary is a party or by which it or any of them may
be bound, or to which any of the property or assets of the Company or its
Wisconsin Subsidiary is subject (except for such conflicts,
4
breaches or defaults or liens, charges or encumbrances that would not have a
Material Adverse Effect), nor will such action result in any violation of the
provisions of the charter or by-laws of the Company or any Wisconsin Subsidiary,
or any applicable law, statute, rule, regulation, judgment, order, writ or
decree, known to us, of any government, government instrumentality or court,
domestic or foreign, having jurisdiction over the Company or any Wisconsin
Subsidiary or any of their respective properties, assets or operations.
5
EXHIBIT A-2
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Bear, Stearns & Co. Inc.
Donaldson, Lufkin & Jenrette Securities Corporation
Smith Barney Inc.
as U.S. Representatives of the several
U.S. Underwriters to be named in the
U.S. Purchase Agreement
Merrill Lynch International
Bear, Stearns International Limited
Donaldson, Lufkin & Jenrette Securities Corporation
Smith Barney Inc.
as representatives of the several
international managers to be named
in the International Purchase Agreement
c/o Merrill Lynch & Co.
North Tower
World Financial Center
New York, New York 10210-1209
Re: Public Offering of 6,700,000 Shares
of Common Stock of Rayovac Corporation
Ladies and Gentlemen:
We have acted as special counsel to Rayovac Corporation, a Wisconsin
corporation (the "Company"), in connection with (i) the registration by the
Company and sale by certain shareholders of 5,200,000 shares of the Company's
Common Stock, par value $0.01 per share (the "U.S. Shares"), pursuant to the
terms of the U.S. Purchase Agreement (the "U.S. Purchase Agreement"), dated
April [ ], 1998, among the Company, the U.S. Underwriters named in Schedule A
thereto (the "U.S. Underwriters") and the shareholders of the Company named in
Schedule B thereto (the "Selling Shareholders") and (ii) the registration by the
Company and sale by the Selling Shareholders of 1,300,000 shares of Common Stock
(the "International Shares,"
1
and together with the U.S. Shares, the "Shares"), pursuant to the terms of the
International Purchase Agreement (the "International Purchase Agreement"), dated
April [ ], 1998, between the Company, and the international managers named in
Schedule A thereto (the "International Managers") and the Selling Shareholders.
This opinion is being furnished pursuant to Section 5(b) of each of the
U.S. Purchase Agreement and the International Purchase Agreement. Capitalized
terms used but not otherwise defined herein shall have the respective meanings
set forth in the U.S. Purchase Agreement.
In connection with this opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of (i) the Registration
Statement on Form S-3 (File No. 333- ) relating to the Shares filed with the
Securities and Exchange Commission (the "Commission") on April 2, 1998 under the
Securities Act of 1933, as amended (the "Act"), including the information deemed
to be a part of the Registration Statement at the time of effectiveness pursuant
to Rule 430A of the General Rules and Regulations under the Act (the "Rules and
Regulations") (such registration statement, as so amended, being hereinafter
referred to as the "Registration Statement"); (ii) the final U.S. prospectus
dated April [ ], 1998, relating to the U.S. Shares filed with the Commission on
April [ ], 1998, pursuant to Rule 424(b) of the Rules and Regulations (the
""U.S. Prospectus"); (iii) the final International Prospectus dated April [ ],
1998, relating to the International Shares filed with the Commission on April [
], 1998, pursuant to Rule 424(b) of the Rules and Regulations (the
"International Prospectus" and together with the U.S. Prospectus, the
"Prospectuses"); (iv) executed copies of the U.S. Purchase Agreement and the
International Purchase Agreement; (v) a specimen certificate representing the
Common Stock (the "Specimen Certificate"); and (vi) the certificate of James A.
Broderick, General Counsel to the Company, attached hereto as Exhibit A (the
"Officer's Certificate"). We have also examined originals or copies certified or
otherwise identified to our satisfaction, of all such records of the Company and
all such agreements, certificates of public officials, certificates of officers
or other representatives of the Company and others and such other documents,
certificates and records as we have deemed necessary or appropriate as a basis
for the opinions set forth herein.
In our examination, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified, conformed or Photostat copies and the
authenticity of the originals of such copies. In making our examination of
executed documents, we have assumed that the parties thereto (including the
Company) had the power, corporate or other, to enter into and perform all
obligations thereunder and have also assumed the due authorization by all
requisite action, corporate or other, and execution and delivery by such parties
of such documents and the validity and binding effect thereof. As to any facts
material to the opinions expressed herein that were not independently
established or verified, we have relied upon oral or written statements and
representations of officers and other representatives of the Company.
For purposes of the opinions set forth below, with respect to any
document which by its terms or otherwise is governed by the laws of any
jurisdiction other than the United States of
2
America or the State of New York, such opinions are based solely upon our
understanding of the plain language of such document, and we express no opinion
as to the interpretation of any such document or of any term or provisions
thereof under applicable governing law or as to the effect on the opinions
expressed herein of any interpretation hereof inconsistent with such
understanding. For purposes of our opinion set forth in paragraph 4, we have
assumed that the certificates representing the shares referred to in such
paragraph conform to the Specimen Certificate. Our opinion set forth in
paragraph 5, is based solely upon the Officer's Certificate and our discussions
with James A. Broderick, General Counsel of the Company; we have not performed
any docket search in any jurisdiction, and have not done any other investigation
of any kind.
The opinions expressed herein are limited to the laws of the State of
New York, the General Corporation Law of the State of Delaware and the federal
laws of the United States of America to the extent specifically referred to
herein.
As used herein, (i) the term "Applicable Laws" means the General
Corporation Law of the state of Delaware and those laws, rules and regulations
of the State of New York and of the United States of America that, in our
experience, are normally applicable to transactions of the type contemplated by
the U.S. Purchase Agreement, but without our having made any special
investigation concerning the applicability of any other law, rule or regulation;
provided, that such term does not include any federal or state securities or
other antifraud laws or the rules and regulations of the National Association of
Securities Dealers, Inc.; (ii) the term "Applicable Contracts" means those
contracts and agreements listed on Annex A to the Officer's Certificate; and
(iii) the term "Governmental Approval" means any consent, approval, license,
authorization or validation of, or filing, recording or registration with, any
United States Federal or New York executive, legislative, judicial,
administrative or regulatory body (a "Governmental Entity"), pursuant to
Applicable Laws.
Based upon and subject to the foregoing and to the other qualifications
and limitations set forth herein, we are of the opinion that:
1. All of the issued and outstanding capital stock of ROV
Holding, Inc. has been duly authorized and validly issued and is fully paid and
nonassessable. None of the outstanding shares of capital stock of ROV Holding,
Inc. was issued in violation of the preemptive rights of any security holder of
ROV Holding, Inc. arising under the Certificate of Incorporation or By-laws of
ROV Holding Inc. or any other similar rights arising under any Applicable
Contract.
2. To our knowledge, based solely on our examination of the
stock record book of ROV Holding, Inc., the issued and outstanding capital stock
of ROV Holding, Inc. is owned of record by the Company, free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or equity arising
under any Applicable contract, except for the pledge of the capital stock of ROV
Holding, Inc. by the Company pursuant to a Company Pledge Agreement dated as of
September 12, 1996 between the Company and Bank of America National Trust and
Savings Association in its capacity as administrative agent fore the lenders
referred to therein.
3
3. The Registration Statement, as of its effective date, and
the Prospectuses, as of their date, appeared on their face to be appropriately
responsive in all material respects to the requirements of the Securities Act
and the Rules and Regulations, except that, in each case, we express no opinion
as to the financial statements, schedules and other financial data included
therein or excluded therefrom or the exhibits to the Registration Statement, and
we do not assume any responsibility for the accuracy, completeness or fairness
of the statements contained in the Registration Statement except to the extent
indicated in paragraph 6 below.
4. The Specimen Certificate complies in all material respects
with any requirements of the New York Stock Exchange applicable to companies
whose securities are listed thereon.
5. To our knowledge, except as set forth in the Registration
Statement or the Prospectuses, there are no legal, regulatory or governmental
proceedings pending in any New York State or federal court to which the Company
or any subsidiary of the Company listed on Exhibit 21 to the Registration
Statement (each, a "Subsidiary") is a party, or to which the property of the
Company or any Subsidiary is subject, which might reasonably be expected to
result in a Material Adverse Effect, or which might reasonably be expected to
materially and adversely affect the transactions contemplated by the U.S.
Purchase Agreement or the International Purchase Agreement or the performance by
the Company of its obligations thereunder.
6. The statements in the Prospectuses(or incorporated by
reference therein) under the captions "Description of Certain Indebtedness,"
"Shares Eligible for Future Sale," "Underwriting" and "Certain Federal Income
Tax Considerations," to the extent that such statements constitute matters of
law, summaries of legal matters or legal conclusions, are correct in all
material respects.
7. No Governmental Approval is required under Applicable Laws
in connection with the consummation by the Company of the transactions
contemplated by the U.S. Purchase Agreement or the International Purchase
Agreement except that we do not express any opinion as to any consent or
authorization which may have become applicable to the Company as a result of the
involvement of the U.S. Underwriters or of the International Managers in the
transactions contemplated by the U.S. Purchase Agreement or the International
Purchase Agreement, because of their legal or regulatory status or because of
any other facts specifically pertaining to them.
8. Neither the execution and delivery of the U.S. Purchase
Agreement or the International Purchase Agreement nor the consummation of the
transactions contemplated therein will contravene any Applicable Laws.
9. To our knowledge, based solely upon a review of the
Applicable Contracts, there are no Applicable Contracts of a character required
to be filed as exhibits to the Registration Statement which are not filed as
required.
4
10. The execution, delivery and performance of the U.S.
Purchase Agreement and the International Purchase Agreement and the consummation
of the transactions contemplated thereby and the use of the proceeds from the
sale of the Shares as described in the Prospectuses under the caption "Use of
Proceeds" do not and will not, either by itself or the giving of notice or the
lapse of time or both, conflict with or constitute a breach of or a default or
Repayment Event (as defined in Section 1(a)(x) of the Purchase Agreements) under
any Applicable Contract, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any
Subsidiary pursuant to any Applicable Contract to which the Company or any
Subsidiary is a party or by which it or any of them may be bound, or to which
any of the property or assets of the Company or any Subsidiary is subject, or
any Applicable Law or Governmental Approval having jurisdiction over the Company
or any Subsidiary or any of their respective properties, assets or operations
except in any such case for any such conflicts, breaches or defaults which would
not have a Material Adverse Effect), nor will such action result in any
violation of the provisions of the charter or by-laws of the Company or any
Subsidiary
11. Except as disclosed in the Registration Statement, to our
knowledge, there are no persons with registration rights or other similar rights
under any Applicable Contract to have any shares of Common Stock registered
pursuant to the Registration Statement or otherwise registered by the Company
pursuant to the 1933 Act.
12. The Company is not subject to registration as an
investment company under the Investment Company Act of 1940, as amended.
We have been orally advised by the Commission that the
Registration Statement was declared effective under the Act at [ ], Washington,
D.C. time, April [ ], 1998; the required filing of the Prospectuses pursuant to
Rule 424(b) has been made in the manner and within the time period required by
Rule 424(b); and, to our knowledge, no stop order suspending the effectiveness
of the Registration Statement has been issued and no proceedings for that
purpose have been instituted or are pending or threatened by the Commission.
In addition, we have participated in conferences with officers
and other representatives of the Company, representatives of the independent
public accountants for the Company, and you and your counsel, at which the
contents of the Registration Statement, the Prospectuses and related matters
were discussed and, although we are not passing upon, and do not assume any
responsibility for, the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectuses and have made no
independent check or verification thereof, on the basis of the foregoing, no
facts have come to our attention that have led us to believe that the
Registration Statement, at the time it became effective, contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading or
that the Prospectuses, as of their dates and as of the date hereof, contained or
contains an untrue statement of a material fact or omitted or omit to state a
material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, except that we express
no opinion or belief with respect to the financial statements, schedules and
other financial data included therein or excluded therefrom or the exhibits to
the Registration Statement.
5
This opinion is furnished to you solely for your benefit in
connection with the closings under the U.S. Purchase Agreement and the
International Purchase Agreement occurring today and is not to be used,
circulated, quoted or otherwise referred to for any other purpose or relied upon
by any other person without our prior express written permission.
Very truly yours,
6
EXHIBIT A-3
FORM OF OPINION OF COUNSEL OF SELLING SHAREHOLDERS
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Bear, Stearns & Co., Inc.
Donaldson, Lufkin & Jenrette Securities Corporation
Smith Barney Inc.
as U.S. Representatives of the several
U.S. Underwriters
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
MERRILL LYNCH INTERNATIONAL
Bear, Stearns International Limited
Donaldson, Lufkin & Jenrette Securities Corporation
Smith Barney Inc.
as Lead Managers for the several International
Managers
c/o Merrill Lynch International
25 Ropemaker Place
London EC2Y 9LY
England
Re: Selling Shareholder Opinion pursuant
to Section 5(b) of the Purchase Agreement
Ladies and Gentlemen:
We have acted as special counsel to Thomas H. Lee Equity Fund
III, L.P., THL-CCI Limited Partnership, Thomas H. Lee Foreign Fund III, L.P.,
and the shareholders listed on Schedule B (each a Selling Shareholder") in
connection with the execution and delivery by the Selling Shareholders of (i)
the U.S. Purchase Agreement dated as of April ___, 1998 (the "U.S. Purchase
Agreement") among Rayovac Corporation, a Wisconsin corporation (the "Company"),
the Selling Shareholders, and Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Donaldson, Lufkin & Jenrette Securities Corporation, Bear Stearns
& Co., Inc., and Smith Barney Inc. as representatives (the "U.S.
Representatives") of the U.S. Underwriters listed in Schedule A thereto
1
and (ii) the International Purchase Agreement dated as of April ___, 1998 (the
"International Purchase Agreement") among the Company, the Selling Shareholders,
and Merrill Lynch, Pierce, Fenner & Smith Incorporated, Donaldson, Lufkin &
Jenrette Securities Corporation, Bear Stearns International Limited, and Smith
Barney Inc. as lead managers (the "Lead Managers") on behalf of the
International Managers listed in Schedule A thereto, and the sale by the Selling
Shareholders to the U.S. Underwriters (as defined in the U.S. Purchase
Agreement) and the International Managers (as defined in the International
Purchase Agreement) of an aggregate of 6,500,000 shares of Common Stock, par
value $0.01 per share, of the Company (the "Common Stock"), acting severally and
not jointly, to (i) the U.S. Underwriters, acting severally and not jointly, to
purchase 5,200,000 shares of Common Stock (the "U.S. Securities") and (ii) the
International Managers, acting severally and not jointly, to purchase 1,300,000
additional shares of Common Stock (the "International Securities," and together
with the U.S. Securities, the "Securities"). This opinion is delivered to you
pursuant to Section 5(b) of each of the U.S. Purchase Agreement and the
International Purchase Agreement. Capitalized terms used herein but not
otherwise defined herein shall have the same meaning ascribed to them in the
U.S. Purchase Agreement.
In connection with this opinion, we have examined or are familiar with
originals or copies, certified or otherwise identified to our satisfaction, of
(i) the U.S. Purchase Agreement; (ii) the International Purchase Agreement;
(iii) the Power of Attorney and Custody Agreement dated as of April ___, 1998
among each Selling Shareholder and ________________________, each acting as
Attorney-in-Fact (each, an "Attorney-in-Fact" and together, the
"Attorneys-in-Fact"), and [Firstar Trust Bank], as Custodian (the "Custodian")
(the "Custody Agreement" and together with the U.S. Purchase Agreement and the
International Purchase Agreement, the "Transaction Documents"), (iv) the Limited
Partnership Agreement of Thomas H. Lee Foreign Fund III, L.P. (the "Foreign
Fund"), dated as of February 6, 1996, by and among THL Equity Advisors III
Limited Partnership, a Massachusetts limited partnership ("Advisors"), and the
limited partners listed on Exhibit A thereto; (v) the Second Amended and
Restated Limited Partnership Agreement of Thomas H. Lee Equity Fund III, L.P.
(the "Equity Fund" and together with the Foreign Fund, the "Funds"), dated as of
December 22, 1995, by and among Advisors and the limited partners listed on
Exhibit A thereto; (vi) the Thirteenth Amended and Restated Agreement of Limited
Partnership of THL-CCI Limited Partnership ("CCI", and together with the Funds,
the "Partnerships"), dated as of January 17, 1997, by and among THL Investment
Management Corp. and the persons and entities admitted as limited partners;
(vii) the Certificate of Limited Partnership of the Foreign Fund, dated as of
January 23, 1996; (viii) the Certificate of Limited Partnership of the Equity
Fund, dated as of February 14, 1995; (ix) the Certificate of Limited Partnership
of CCI, dated as of July 10, 1992, as amended November 30, 1993 and March 13,
1996; (x) the First Amended and Restated Agreement of Limited Partnership of
Advisors, dated as of August 15, 1995 by and among THL Equity Trust III, a
Massachusetts business trust ("Equity Trust"), and the limited partners
signatories thereto; (xi) the Certificate of Limited Partnership of Advisors,
dated as of February 16, 1995; (xii) the Declaration of Trust of Equity Trust,
made as of February 14, 1995, by and between Thomas H. Lee, as grantor, and the
trustees signatories thereto; (xiii) the Consent of Trustees of Equity Trust,
dated as of January 17, 1997; (xiv) the Articles of Organization and By-laws of
THL Investment Management Corp., each as in effect as of the date hereof; (xv)
the Consent of Sole Director of THL Investment
2
Management Corp., dated as of January 17, 1997; (xvi) the Certificate of
Advisors, as general partner of the Equity Fund, dated as of January 17, 1997;
(xvii) the Certificate of Advisors, as general partner of the Foreign Fund,
dated as of November 26, 1997; (xviii) the Certificate of Equity Trust, as
general partner of Advisors, dated as of November 26, 1997; (xix) the
Certificate of THL Investment Management Corp., as general partner of CCI, dated
as of November 26, 1997; (xx) the Officer's Certificate of THL Investment
Management Corp., dated as of November 26, 1997; (xxi) the Certificate of Equity
Trust, dated as of November 26, 1997 and (xxii) certificates representing the
Securities. We have also examined originals or copies, certified or otherwise
identified to our satisfaction, of such records of each of the Partnerships and
others and such agreements, certificates of public officials, certificates of
officers or other representatives of each of the Partnerships and others and
such other documents, certificates and records as we have deemed necessary or
appropriate as a basis for the opinions set forth herein.
In our examination, we have assumed the genuineness of all signatures,
the legal capacity of natural persons, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such latter documents. As to any facts material
to the opinions set forth herein which we did not independently establish or
verify, we have relied upon statements and representations of officers and other
representatives of each of the Partnerships and others.
As used herein, (i) the term "Applicable Laws" means the General
Corporation Law and Revised Uniform Limited Partnership Act of the State of
Delaware, the Business Corporation Law and the Uniform Limited Partnership Act
of the Commonwealth of Massachusetts and those laws, rules and regulations of
the State of New York and of the United States of America that, in our
experience, are normally applicable to transaction of the type contemplated by
the Transaction Documents, but without our having made any special investigation
concerning the applicability of any other law, rule or regulation; provided,
that such term does not include any federal or state securities or other
antifraud laws or the rules and regulations of the National Association of
Securities Dealers, Inc.; (ii) the term "Applicable Contracts" means those
contracts and agreements listed on Annex A hereto; and (iii) the term
"Governmental Approval" means any consent, approval, license, authorization or
validation of, or filing, recording or registration with, any United States
Federal or Delaware, Massachusetts or New York executive, legislative, judicial,
administrative or regulatory body (a "Governmental Entity"), pursuant to
Applicable Laws.
The opinions expressed herein are limited to (i) the General
Corporation Law and the Revised Uniform Limited Partnership Act of the State of
Delaware; (ii) the Business Corporation Law and the Uniform Limited Partnership
Act of the Commonwealth of Massachusetts; (iii) the laws of the State of New
York; and (iv) the federal laws of the United States of America to the extent
specifically referred to herein.
Based upon and subject to the foregoing, and to the limitations,
qualifications, exceptions and assumptions set forth herein, we are of the
opinion that:
3
1. No Governmental Approval is required under Applicable Laws in
connection with the offer, sale or delivery of the Securities by the Selling
Shareholders under the U.S. Purchase Agreement and the International Purchase
Agreement or the performance by each of the Selling Shareholders of its
obligations under any of the Transaction Documents; provided, that we express no
opinion as to any Governmental Approval which may be required under state
securities laws or that may have become applicable to any Selling Shareholder as
a result of your involvement in the U.S. Purchase Agreement or the International
Purchase Agreement because of your legal or regulatory status or because of any
other facts specifically pertaining to you.
2. Each of the Custody Agreements, the U.S. Purchase Agreement and the
International Purchase Agreement has been duly executed and delivered by each
Selling Shareholder. The Custody Agreement to which each Selling Shareholder is
a party constitutes the valid and binding agreement of such Selling Shareholder
enforceable against such Selling Shareholder in accordance with its terms,
except that enforcement may be limited by applicable bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium or other similar laws nor or
hereinafter in effect relating to or affecting creditors' rights generally and
by general principals of equity (regardless of whether enforceability is
considered in a proceeding at law or in equity).
3. The Attorney-in-Fact has been duly authorized by each Selling
Shareholder to deliver and sell the U.S. Securities and the International
Securities on behalf of each Selling Shareholder in accordance with the terms of
each of the U.S. Purchase Agreement and the International Purchase Agreement.
4. The execution, delivery and performance of each of the Transaction
Documents and the sale and delivery of the U.S. Securities and the International
Securities and the consummation of the transactions contemplated in each of the
U.S. Purchase Agreement and the International Purchase Agreement and compliance
by each Selling Shareholder with its obligations under each of the U.S. Purchase
Agreement and the International Purchase Agreement have been duly authorized by
all necessary partnership action on the part of each Selling Shareholder and do
not and will not, whether with or without the giving of notice or passage of
time or both, conflict with or constitute a breach of, or default under any
Applicable Law or Governmental Approval of any Governmental Entity having
jurisdiction over any Selling Shareholder or any of their properties, or under
any indenture, mortgage, deed of trust, loan, credit agreement, note or other
debt instrument to which any Selling Shareholder is a party or pursuant to which
any of them is bound or any of their assets is subject and pursuant to which any
Selling Shareholder has incurred indebtedness (except for such conflicts,
breaches or defaults or liens, charges or encumbrances which would not have a
material adverse effect on the condition (financial or otherwise), earnings,
business affairs or business prospects of any Selling Shareholder, whether or
not arising in the ordinary course of business) nor will such action result in
any violation of the provisions of the partnership agreements of any of the
Selling Shareholders.
5. To our knowledge, each Selling Shareholder has the power and
authority, as a limited partnership, to sell, transfer and deliver the U.S.
Securities and the International Securities pursuant to each of the U.S.
Purchase Agreement and the International Purchase Agreement. Assuming that
neither any U.S. Representatives nor any U.S. Underwriter has notice
4
of adverse claims with respect to the certificates identified on Schedule B as
representing the U.S. Securities, then upon physical delivery to Merrill Lynch &
Co. as designee of the U.S. Representatives in the State of New York of such
certificates indorsed to the U.S. Representatives or indorsed in blank, the U.S.
Representatives will acquire such certificates (and the shares of Common Stock
represented thereby) free of any adverse claims within the meaning of the
Uniform Commercial Code in effect in the State of New York. Assuming that
neither any Lead Manager nor any International Manager has notice of adverse
claims with respect to the certificates identified on Schedule B as representing
the International Securities, then upon physical delivery to Merrill Lynch & Co.
as designee of the Lead Managers in the State of New York of such certificates
indorsed to the Lead Managers or indorsed in blank, the Lead Managers will
acquire such certificates (and the shares of Common Stock represented thereby)
free of any adverse claims within the meaning of the Uniform Commercial Code in
effect in the State of New York.
This opinion is furnished to you solely for your benefit in connection
with the closings under the U.S. Purchase Agreement and the International
Purchase Agreement occurring today and is not to be used, circulated, quoted or
otherwise referred to for any other purpose or relied upon by any other person
without our prior express written permission.
Very truly yours,
5
EXHIBIT A-4
FORM OF OPINION OF COUNSEL OF CATEGORY 2 SELLING SHAREHOLDERS
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Bear, Stearns & Co., Inc.
Donaldson, Lufkin & Jenrette Securities Corporation
Smith Barney Inc.
as U.S. Representatives of the several
U.S. Underwriters
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
MERRILL LYNCH INTERNATIONAL
Bear, Stearns International Limited
Donaldson, Lufkin & Jenrette Securities Corporation
Smith Barney Inc.
as Lead Managers for the several International
Managers
c/o Merrill Lynch International
25 Ropemaker Place
London EC2Y 9LY
England
Re: Selling Shareholder Opinion pursuant
to Section 5(b) of the Purchase Agreement
-----------------------------------------
Ladies and Gentlemen:
We have acted as special counsel to __________________________
(the "Selling Shareholder") in connection with the execution and delivery by the
Selling Shareholders of (i) the U.S. Purchase Agreement dated as of April ___,
1998 (the "U.S. Purchase Agreement") among Rayovac Corporation, a Wisconsin
corporation (the "Company"), the Selling Shareholders, and Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Donaldson, Lufkin & Jenrette Securities
Corporation, Bear Stearns & Co., Inc., and Smith Barney Inc. as representatives
(the "U.S. Representatives") of the U.S. Underwriters listed in Schedule A
thereto and (ii) the International Purchase Agreement dated as of April ___,
1998 (the "International Purchase Agreement") among the Company, the Selling
Shareholders, and Merrill Lynch, Pierce, Fenner & Smith Incorporated, Donaldson,
Lufkin & Jenrette Securities Corporation, Bear Stearns
1
International Limited, and Smith Barney Inc. as lead managers (the "Lead
Managers") on behalf of the International Managers listed in Schedule A thereto,
and the sale by the Selling Shareholders to the U.S. Underwriters (as defined in
the U.S. Purchase Agreement) and the International Managers (as defined in the
International Purchase Agreement) of an aggregate of 6,500,000 shares of Common
Stock, par value $0.01 per share, of the Company (the "Common Stock"), acting
severally and not jointly, to (i) the U.S. Underwriters, acting severally and
not jointly, to purchase 5,200,000 shares of Common Stock (the "U.S.
Securities") and (ii) the International Managers, acting severally and not
jointly, to purchase 1,300,000 additional shares of Common Stock (the
"International Securities," and together with the U.S. Securities, the
"Securities"). This opinion is delivered to you pursuant to Section 5(b) of each
of the U.S. Purchase Agreement and the International Purchase Agreement.
Capitalized terms used herein but not otherwise defined herein shall have the
same meaning ascribed to them in the U.S. Purchase Agreement.
In connection with this opinion, we have examined or are familiar with
originals or copies, certified or otherwise identified to our satisfaction, of
(i) the U.S. Purchase Agreement; (ii) the International Purchase Agreement;
(iii) the Power of Attorney and Custody Agreement dated as of April ___, 1998
among each Selling Shareholder and _______________________, each acting as
Attorney-in-Fact (each, an "Attorney-in-Fact" and together, the
"Attorneys-in-Fact"), and [Firstar Trust Bank], as Custodian (the "Custodian")
(the "Custody Agreement" and together with the U.S. Purchase Agreement and the
International Purchase Agreement, the "Transaction Documents"), and (iv)
certificates representing the Securities. We have also examined originals or
copies, certified or otherwise identified to our satisfaction, of such
agreements, certificates of public officials, certificates of officers or other
representatives of the Selling Shareholders and such other documents,
certificates and records as we have deemed necessary or appropriate as a basis
for the opinions set forth herein.
In our examination, we have assumed the genuineness of all signatures,
the legal capacity of natural persons, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such latter documents. As to any facts material
to the opinions set forth herein which we did not independently establish or
verify, we have relied upon statements and representations of the Selling
Shareholder.
As used herein, (i) the term "Applicable Laws" means the General
Corporation Law and Revised Uniform Limited Partnership Act of the State of
Delaware, the Business Corporation Law and the Uniform Limited Partnership Act
of the Commonwealth of Massachusetts and those laws, rules and regulations of
the State of New York and of the United States of America that, in our
experience, are normally applicable to transaction of the type contemplated by
the Transaction Documents, but without our having made any special investigation
concerning the applicability of any other law, rule or regulation; provided,
that such term does not include any federal or state securities or other
antifraud laws or the rules and regulations of the National Association of
Securities Dealers, Inc.; (ii) the term "Applicable Contracts" means those
contracts and agreements listed on Annex A hereto; and (iii) the term
"Governmental Approval" means any consent, approval, license, authorization or
validation of, or filing, recording or registration with, any United States
Federal or Delaware, Massachusetts or
2
New York executive, legislative, judicial, administrative or regulatory body (a
"Governmental Entity"), pursuant to Applicable Laws.
The opinions expressed herein are limited to (i) the General
Corporation Law of the State of Delaware; (ii) the Business Corporation Law of
the Commonwealth of Massachusetts; (iii) the laws of the State of New York; and
(iv) the federal laws of the United States of America to the extent specifically
referred to herein.
Based upon and subject to the foregoing, and to the limitations,
qualifications, exceptions and assumptions set forth herein, we are of the
opinion that:
1. No Governmental Approval is required under Applicable Laws in
connection with the offer, sale or delivery of the Securities by the Selling
Shareholder under the U.S. Purchase Agreement and the International Purchase
Agreement or the performance by such Selling Shareholders of its obligations
under any of the Transaction Documents; provided, that we express no opinion as
to any Governmental Approval which may be required under state securities laws
or that may have become applicable to the Selling Shareholder as a result of
your involvement in the U.S. Purchase Agreement or the International Purchase
Agreement because of your legal or regulatory status or because of any other
facts specifically pertaining to you.
2. Each of the Custody Agreements, the U.S. Purchase Agreement and the
International Purchase Agreement has been duly executed and delivered by the
Selling Shareholder. The Custody Agreement to which such Selling Shareholder is
a party constitutes the valid and binding agreement of such Selling Shareholder
enforceable against such Selling Shareholder in accordance with its terms,
except that enforcement may be limited by applicable bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium or other similar laws nor or
hereinafter in effect relating to or affecting creditors' rights generally and
by general principals of equity (regardless of whether enforceability is
considered in a proceeding at law or in equity).
3. The Attorney-in-Fact has been duly authorized by such Selling
Shareholder to deliver and sell the U.S. Securities and the International
Securities on behalf of such Selling Shareholder in accordance with the terms of
each of the U.S. Purchase Agreement and the International Purchase Agreement.
4. The execution, delivery and performance of each of the Transaction
Documents and the sale and delivery of the U.S. Securities and the International
Securities and the consummation of the transactions contemplated in each of the
U.S. Purchase Agreement and the International Purchase Agreement and compliance
by such Selling Shareholder with its obligations under each of the U.S. Purchase
Agreement and the International Purchase Agreement have been duly authorized on
the part of such Selling Shareholder and do not and will not, whether with or
without the giving of notice or passage of time or both, conflict with or
constitute a breach of, or default under any Applicable Law or Governmental
Approval of any Governmental Entity having jurisdiction over such Selling
Shareholder or any of its properties or any material contract known to us to
which the Seller is a party or to which any of its properties are subject.
3
5. To our knowledge, such Selling Shareholder has the power and
authority to sell, transfer and deliver the U.S. Securities and the
International Securities pursuant to each of the U.S. Purchase Agreement and the
International Purchase Agreement. Assuming that neither any U.S. Representatives
nor any U.S. Underwriter has notice of adverse claims with respect to the
certificates identified on Schedule B as representing the U.S. Securities, then
upon physical delivery to Merrill Lynch & Co. as designee of the U.S.
Representatives in the State of New York of such certificates indorsed to the
U.S. Representatives or indorsed in blank, the U.S. Representatives will acquire
such certificates (and the shares of Common Stock represented thereby) free of
any adverse claims within the meaning of the Uniform Commercial Code in effect
in the State of New York. Assuming that neither any Lead Manager nor any
International Manager has notice of adverse claims with respect to the
certificates identified on Schedule B as representing the International
Securities, then upon physical delivery to Merrill Lynch & Co. as designee of
the Lead Managers in the State of New York of such certificates indorsed to the
Lead Managers or indorsed in blank, the Lead Managers will acquire such
certificates (and the shares of Common Stock represented thereby) free of any
adverse claims within the meaning of the Uniform Commercial Code in effect in
the State of New York.
This opinion is furnished to you solely for your benefit in connection
with the closings under the U.S. Purchase Agreement and the International
Purchase Agreement occurring today and is not to be used, circulated, quoted or
otherwise referred to for any other purpose or relied upon by any other person
without our prior express written permission.
Very truly yours,
4
EXHIBIT B
_________________, 1998
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Bear, Stearns & Co. Inc.
Donaldson, Lufkin & Jenrette Securities Corporation
Smith Barney Inc.
as U.S. Representatives of the several
U.S. Underwriters to be named in the
within-mentioned U.S. Purchase Agreement
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Re: Proposed Public Offering by Rayovac Corporation
Dear Sirs:
The undersigned, a stockholder of Rayovac Corporation, a Wisconsin
Corporation (the "Company") understands that Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated ("Merrill Lynch"), Bear, Stearns & Co. Inc.,
Donaldson, Lufkin & Jenrette Securities Corporation and Smith Barney Inc.
propose to enter into a U.S. Purchase Agreement (the "U.S. Purchase Agreement")
with the Company providing for the public offering of shares (the "Securities")
of the Company's common stock, par value $0.01 per share (the "Common Stock").
In recognition of the benefit that such an offering will confer upon the
undersigned as a stockholder of the Company, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
undersigned agrees with each underwriter to be named in the U.S. Purchase
Agreement that, during a period of 90 days from the date of the U.S. Purchase
Agreement, the undersigned will not, without the prior written consent of
Merrill Lynch, directly or indirectly, (i) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant for the sale of, or otherwise
dispose of or transfer any shares of the Company's Common Stock or any
securities convertible into or exchangeable or exercisable for Common Stock,
whether now owned or hereafter acquired by the undersigned or with respect to
which the undersigned has or hereafter acquires the power of disposition, or
file any registration statement under the Securities Act of 1933, as amended,
with respect to any of the foregoing or (ii) enter into any swap or any other
agreement or any transaction that transfers, in whole or in part, directly or
indirectly, the
1
economic consequence of ownership of the Common Stock, whether any such swap or
transaction is to be settled by delivery of Common Stock or other securities, in
cash or otherwise.
Notwithstanding the foregoing, the undersigned may transfer any or all
of its shares of Company Common Stock (i) by gift, will or intestacy, (ii) to
its affiliates, as such term is defined in Rule 405 promulgated under the
Securities Act of 1933, as amended, or (iii) in the event the undersigned is an
individual, to his or her immediate family or to a trust the beneficiaries of
which are exclusively the undersigned and/or a member or members of his or her
immediate family; provided, however, that in any such case it shall be a
condition to any such transfer that the transferee execute an agreement stating
that the transferee is receiving and holding the shares subject to the
provisions of this letter agreement and there shall be no further transfer of
such shares except in accordance with the provisions of this letter agreement.
Very truly yours,
Signature: ___________________________
Print Name: __________________________
2
EXHIBIT C-1
FORM OF COMFORT LETTER OF
KPMG PEAT MARWICK LLP PURSUANT TO SECTION 5(f)
attached hereto
EXHIBIT C-2
FORM OF COMFORT LETTER OF
COOPERS & LYBRAND LLP PURSUANT TO SECTION 5(f)
Attached hereto
Consent of KPMG Peat Marwick LLP
The Board of Directors
Rayovac Corporation:
We consent to the use of our reports included or incorporated by reference
herein and to the reference to our firm under the heading "Experts" in the
prospectus.
/s/ KPMG Peat Marwick LLP
Milwaukee, Wisconsin
May 12, 1998
Exhibit 23.3
[Letterhead of Coopers & Lybrand L.L.P.]
Consent of Independent Auditors
We consent to the incorporation in Amendment No. 1 to this registration
statement on Form S-3 (File No. 333-49281) of our report dated November 22,
1996, except for Notes 2n and 2r as to which the date is April 1, 1998, on our
audits of the consolidated financial statements of Rayovac Corporation as of
June 30, 1996 and September 30, 1996 and for each of the two years in the period
ended June 30, 1996 and the period July 1, 1996 to September 30, 1996. We also
consent to the references to our firm under the captions "Experts".
/s/ Coopers & Lybrand L.L.P.
Milwaukee, Wisconsin
May 11, 1998
