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Exhibit 10.3
$100,000,000
SHOP VAC CORPORATION
10-5/8% Senior Secured Notes due 2003
PURCHASE AGREEMENT
September 25, 1996
▇▇▇▇▇▇ Brothers Inc.
First Union Capital Markets Corp.
c/▇ ▇▇▇▇▇▇ Brothers Inc.
Three World Financial Center
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
SHOP VAC CORPORATION, a New Jersey corporation (the
"Company"), proposes to issue and sell to you, as the initial purchasers (the
"Initial Purchasers"), $100,000,000 aggregate principal amount of its 10-5/8%
Senior Secured Notes Due 2003 (the "Notes"). The Notes will be issued pursuant
to an Indenture to be dated as of October 1, 1996 (the "Indenture"), between the
Company and Marine Midland Bank, as trustee.
The Notes will be offered and sold to you without being
registered under the Securities Act of 1933, as amended (the "Securities Act"),
in reliance on an exemption therefrom. The Company has prepared a preliminary
offering memorandum, dated September 25, 1996 the "Preliminary Offering
Memorandum"), and will prepare a final offering memorandum dated the date hereof
(the "Final Offering Memorandum" and, together with the Preliminary Offering
Memorandum, the "Offering Memorandum"), setting forth or including a description
of the terms of the Notes, the terms of the offering, a description of the
Company and any material developments relating to the Company occurring after
June 30, 1996. Copies of the Preliminary Offering Memorandum have been, and
copies of the Final Offering Memorandum will be, delivered by the Company to the
Initial Purchasers pursuant to the terms of this Agreement. Any references
herein to the Preliminary Offering Memorandum, the Final Offering Memorandum and
the Offering Memorandum shall be deemed to include all amendments and
supplements thereto and all documents incorporated therein by reference. The
Company hereby confirms that it has authorized the use of the Offering
Memorandum in connection with the offering and resale of the Notes by you in
accordance with Section 3 hereof.
The Initial Purchasers and their direct and indirect
transferees will be entitled to the benefits of the Registration
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Rights Agreement, substantially in the form attached hereto as Exhibit A,
pursuant to which the Company will agree to use its best efforts to commence an
offer to exchange the Notes for securities which have been registered under the
Securities Act, and which are identical in all material respects to the Notes,
or to cause a shelf registration statement to become effective under the
Securities Act and to remain effective for the period designated in such
Registration Rights Agreement.
In connection with the offering and sale of the Notes,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ together with certain family partnerships and
trusts will enter into a pledge agreement (the "Pledge Agreement") providing for
the first priority pledge by each such pledgor to the Collateral Agent of all of
their capital stock of the Company.
Section 1. Representations and Warranties. The
Company represents and warrants to you and agrees that:
(a) Each of the Preliminary Offering Memorandum and the Final
Offering Memorandum, as of its respective date, did not, and the Final Offering
Memorandum as of the Closing Date (as defined below), will not, contain any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein not misleading; provided, however, that
the Company makes no representation or warranty as to information contained in
or omitted from the Preliminary Offering Memorandum or the Final Offering
Memorandum, as amended or supplemented, in reliance upon and in conformity with
written information furnished to the Company by or on behalf of any of the
Initial Purchasers specifically for inclusion in the Preliminary Offering
Memorandum or the Final Offering Memorandum.
(b) It is not required by applicable law or regulation in
connection with the offer, sale and delivery of the Notes to you in the manner
contemplated by this Agreement to register the Notes under the Securities Act or
to qualify the Indenture in respect of the Notes under the Trust Indenture Act
of 1939, as amended (the "Trust Indenture Act").
(c) The Company and each of its subsidiaries (as defined in
Section 16 hereof) have been duly organized or duly formed, as the case may be,
and are validly existing as corporations in good standing under the laws of
their respective jurisdictions of organization, are duly qualified to do
business and are in good standing as foreign corporations in each jurisdiction
in which their respective ownership or lease of property or the conduct of their
respective businesses requires such qualification, and have all power and
authority necessary to own or hold their respective properties and to conduct
the businesses in which they are engaged in the manner described in the Final
Offering Memorandum, except where any failure to be so qualified or in good
standing would not reasonably be expected to have a material adverse effect on
the consolidated financial
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position, results of operations, business or prospects of the Company and its
subsidiaries taken as a whole ("Material Adverse Effect"); and (other than
Felchar Manufacturing Corporation ("Felchar"), Shop Vac Properties
International, Ltd., Goblin Ireland, Ltd. and Goblin Limited (UK)) none of the
subsidiaries of the Company is a "significant subsidiary", as such term is
defined in Rule 405 of the Rules and Regulations.
(d) The Company has an authorized capitalization as set forth
in the Final Offering Memorandum, and all of the issued shares of capital stock
of the Company have been duly and validly authorized and issued, are fully paid
and non-assessable, and all of the issued shares of capital stock of each
subsidiary of the Company have been duly and validly authorized and issued and
are fully paid and non-assessable and (except for directors' qualifying shares
or as set forth in the Final Offering Memorandum) are owned directly or
indirectly by the Company, free and clear of all liens, encumbrances, equities
or claims.
(e) The Company has all of the requisite corporate power and
authority to execute and deliver this Agreement, the Registration Rights
Agreement, the Indenture (collectively, the "Transaction Documents") and the
Notes and to perform its obligations thereunder.
(f) This Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and binding agreement of the
Company enforceable against the Company in accordance with its terms.
(g) The Registration Rights Agreement has been duly
authorized, and when duly executed by the proper officers of the Company and
delivered by the Company will constitute a valid and binding agreement of the
Company enforceable against the Company in accordance with its terms.
(h) The Indenture has been duly authorized, and when duly
executed by the proper officers of the Company (assuming due execution and
delivery by the Trustee) and delivered by the Company will constitute a valid
and binding agreement of the Company enforceable against the Company in
accordance with its terms.
(i) The Notes have been duly authorized, and, when duly
executed, authenticated, issued and delivered as provided in the Indenture and
paid for as provided herein, will be duly and validly issued and outstanding,
and will constitute valid and binding obligations of the Company entitled to the
benefits of the Indenture and enforceable in accordance with their terms.
(j) The Notes, the Indenture, the Registration Rights
Agreement and the Pledge Agreement conform in all material respects to the
descriptions thereof contained in the Final Offering Memorandum.
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(k) The execution, delivery and performance of each of the
Transaction Documents, the issuance, authentication, sale and delivery of the
Notes, and compliance with the terms thereof, and the consummation by the
Company of the transactions contemplated thereby will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries is
bound or to which any of the property or assets of the Company or any of its
subsidiaries is subject, except for such conflicts, breaches, violations or
defaults which have been cured or waived or which would not reasonably be
expected to have a Material Adverse Effect, nor will such actions result in any
violation of the provisions of the charter or by-laws of the Company or any of
its subsidiaries or any applicable statute or any order, rule or regulation of
any court or governmental agency or body having jurisdiction over the Company or
any of its subsidiaries or any of their properties or assets, except for such
violations that would not reasonably be expected to have a Material Adverse
Effect; and except such consents, approvals, authorizations, registrations or
qualifications as may be required under the applicable state securities laws in
connection with the purchase and distribution of the Notes by the Initial
Purchasers or as described in the Final Offering Memorandum, no consent,
approval, authorization or order of, or filing or registration with, any such
court or governmental agency or body is required for the execution, delivery and
performance of each of the Transaction Documents, the issuance, authentication,
sale and delivery of the Notes, and compliance with the terms thereof, and the
consummation by the Company of the transactions contemplated thereby.
(l) Since June 30, 1996, neither the Company nor any of its
subsidiaries has sustained any material loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action, order or
decree, otherwise than as set forth or contemplated in the Final Offering
Memorandum; and, since such date, there has not been any material change in the
capital stock or long-term debt of the Company or any of its subsidiaries (other
than scheduled redemptions or payments) or any material adverse change, or any
development involving a prospective material adverse change, in or affecting the
management, financial position, stockholders' equity or results of operations of
the Company and its subsidiaries taken as a whole otherwise than as set forth or
contemplated in the Final Offering Memorandum.
(m) The financial statements (including the related notes)
included in the Final Offering Memorandum present fairly , in all material
respects, the financial condition and results of operations of the entities
purported to be shown thereby, at the dates and for the periods indicated, and
have been prepared in
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conformity with generally accepted accounting principles applied on a consistent
basis throughout the periods involved, except as otherwise disclosed therein.
(n) KPMG Peat Marwick LLP ("KPMG"), who has certified certain
financial statements of the Company, whose reports appear in the Offering
Memorandum and who have delivered the initial letters referred to in Section
7(i) hereof, is an independent public accountant with respect to the Company
under Rule 101 of AICPA's Code of Professional Conduct and its interpretations
and rulings.
(o) The Company and each of its subsidiaries have good and
marketable title in fee simple to all real property and good and marketable
title to all personal property owned by them, in each case free and clear of all
liens, encumbrances and defects except such as are described in the Final
Offering Memorandum or such as do not materially affect the value of such
property and do not materially interfere with the use made and proposed to be
made of such property by the Company and its subsidiaries or such as would not
reasonably be expected to have a Material Adverse Effect; and all real property
and buildings held under lease by the Company and its subsidiaries are held by
them under valid, subsisting and enforceable leases, with such exceptions as
would not reasonably be expected to have a Material Adverse Effect.
(p) The Company and each of its subsidiaries carry, or are
covered by, insurance in such amounts and covering such risks as is customary
for companies engaged in similar businesses in similar industries.
(q) Except as disclosed in the Final Offering Memorandum, the
Company possesses such certificates, authorizations or permits issued by the
appropriate state, federal or foreign regulatory agencies or bodies necessary to
conduct the business now operated by them, except where the failure to possess
such certificates, authorizations or permits would not be reasonably expected to
have a Material Adverse Effect and the Company has not received any notice of
proceedings relating to the revocation or modification of any such certificate,
authorization or permit which, singularly or in the aggregate, if the subject of
an unfavorable decision, ruling, or finding, would reasonably be expected to
have a Material Adverse Effect.
(r) Except as disclosed in the Final Offering Memorandum, the
Company and each of its subsidiaries own or possess adequate rights to use all
material patents, patent applications, trademarks, service marks, trade names,
trademark registrations, service ▇▇▇▇ registrations, copyrights and licenses
necessary for the conduct of their respective businesses and have no reason to
believe that the conduct of their respective businesses will conflict with, and
have not received any notice of any claim of conflict with, any such rights of
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others, except such as would not have a Material Adverse Effect.
(s) Except as described in the Final Offering Memorandum,
there are no legal or governmental proceedings pending to which the Company or
any of its subsidiaries is a party or of which any property or assets of the
Company or any of its subsidiaries is the subject which, if determined adversely
to the Company or any of its subsidiaries, individually or in the aggregate, is
reasonably likely to have a Material Adverse Effect; and to the best of the
Company's knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others.
(t) No labor disturbance by the employees of the Company or
any of its subsidiaries exists or, to the knowledge of the Company, is imminent
which might be expected to have a Material Adverse Effect.
(u) Except as disclosed in the Final Offering Memorandum, (i)
the Company and each of its domestic subsidiaries are in compliance in all
material respects with all presently applicable provisions of the Employee
Retirement Income Security Act of 1974, as amended, including the regulations
and published interpretations thereunder ("ERISA"); (ii) no "reportable event"
(as defined in ERISA) has occurred with respect to any "pension plan" (as
defined in ERISA) for which the Company would have any liability; (iii) the
Company and each of its domestic subsidiaries have not incurred and do not
expect to incur liability under (x) Title IV of ERISA with respect to
termination of, or withdrawal from, any "pension plan" or (y) Sections 412 or
4971 of the Internal Revenue Code of 1986, as amended, including the regulations
and published interpretations thereunder (the "Code"); and (iv) each "pension
plan" for which the Company or any of its domestic subsidiaries would have any
liability that is intended to be qualified under Section 401(a) of the Code is
so qualified in all material respects and nothing has occurred, whether by
action or by failure to act, which would cause the loss of such qualification.
(v) The Company has filed all federal, foreign, state and
local income and franchise tax returns required to be filed through the date
hereof and has paid all taxes due thereon, and no tax deficiency has been
determined adversely to the Company or any of its subsidiaries which has had
(nor does the Company have any knowledge of any tax deficiency which, if
determined adversely to the Company or any of its subsidiaries, might reasonably
be expected to have) a Material Adverse Effect.
(w) Since the date as of which information is given in the
Final Offering Memorandum through the date hereof, and except as may otherwise
be disclosed in the Final Offering Memorandum, the Company and its subsidiaries
have not (i) issued or granted any securities (other than under plans,
agreements and
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arrangements disclosed in, and in effect on the date of, the Final Offering
Memorandum), (ii) incurred any liability or obligation, direct or contingent,
other than liabilities and obligations which were incurred in the ordinary
course of business, (iii) entered into any transaction not in the ordinary
course of business or (iv) declared or paid any dividend on their respective
capital stock.
(x) Neither the Company nor any of its subsidiaries (i) is in
violation of its charter or by-laws, (ii) is in default in any material respect,
and no event has occurred which, with notice or lapse of time or both, would
constitute such a default, in the due performance or observance of any term,
covenant or condition contained in any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which it is a party or by which it
is bound or to which any of its properties or assets is subject or (iii) is in
violation in any material respect of any applicable law, ordinance, governmental
rule, regulation or court decree to which it or its property or assets may be
subject or has failed to obtain any license, permit, certificate, franchise or
other governmental authorization or permit necessary to the ownership of its
property or to the conduct of its business, except as may be described in the
Final Offering Memorandum or as would not reasonably be expected to have a
Material Adverse Effect.
(y) Neither the Company nor any of its subsidiaries, nor to
the best of the Company's knowledge, any director, officer, agent, employee or
other person associated with or acting on behalf of the Company or any of its
subsidiaries, has (i) used any corporate funds for any unlawful contribution,
gift, entertainment or other unlawful expense relating to political activity;
(ii) made any direct or indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds; (iii) violated or is in
violation of any provision of the Foreign Corrupt Practices Act of 1977; or (iv)
made any bribe, rebate, payoff, influence payment, kickback or other unlawful
payment.
(z) Except as otherwise disclosed in the Final Offering
Memorandum, (i) there has been no storage, disposal, generation, manufacture,
refinement, transportation, handling or treatment of toxic wastes, medical
wastes, hazardous wastes or hazardous substances by the Company or any of its
subsidiaries (or, to the knowledge of the Company, any of their predecessors in
interest) at, upon or from any of the property now or previously owned or leased
by the Company or its subsidiaries in violation of any applicable law,
ordinance, rule, regulation, order, judgment, decree or permit or which would
require remedial action under any applicable law, ordinance, rule, regulation,
order, judgment, decree or permit, except for any violation or remedial action
which would not have, or could not be reasonably likely to have, singularly or
in the aggregate with all such violations and remedial actions, a Material
Adverse Effect; and
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(ii) there has been no material spill, discharge, leak, emission, injection,
escape, dumping or release of any kind onto such property or into the
environment surrounding such property of any toxic wastes, medical wastes, solid
wastes, hazardous wastes or hazardous substances due to or caused by the Company
or any of its subsidiaries or with respect to which the Company or any of its
subsidiaries have knowledge, except for any such spill, discharge, leak,
emission, injection, escape, dumping or release which would not have or would
not be reasonably likely to have, singularly or in the aggregate with all such
spills, discharges, leaks, emissions, injections, escapes, dumpings and
releases, a Material Adverse Effect; and the terms "hazardous wastes," "toxic
wastes," "hazardous substances" and "medical wastes" shall have the meanings
specified in any applicable local, state, federal and foreign laws or
regulations with respect to environmental protection.
(aa) Neither the Company nor any subsidiary is an "investment
company" within the meaning of such term under the Investment Company Act of
1940, as amended (the "Investment Company Act") and the rules and regulations of
the Commission thereunder.
(ab) No securities of the same class (within the meaning of
Rule 144A(d)(3) under the Securities Act) as the Notes are listed on any
national securities exchange registered under Section 6 of the Exchange Act or
quoted on an automated inter-dealer quotation system.
(ac) Neither the Company nor any affiliate (as defined in Rule
501(b) of Regulation D under the Securities Act ("Regulation D")) of the Company
has directly, or through any agent (provided that no representation is made as
to the Initial Purchasers or any person acting on their behalf), (i) sold,
offered for sale, solicited offers to buy or otherwise negotiated in respect of,
any security (as defined in the Securities Act) which is or will be integrated
with the offering and sale of the Notes in a manner that would require the
registration of the Notes under the Securities Act or (ii) engaged in any form
of general solicitation or general advertising (within the meaning of Regulation
D) in connection with the offering of the Notes.
(ad) Neither the Company nor its affiliates has taken, and the
Company will not take, directly or indirectly, any action designed to, or that
might reasonably be expected to, cause or result in stabilization or
manipulation of the price of the Notes.
Section 2. Purchase of the Notes by the Initial Purchasers.
(a) On the basis of the representations and warranties herein contained, and
subject to the terms and conditions herein set forth, the Company agrees to sell
to you, and each of you, severally and not jointly, agrees to purchase from the
Company, the principal amount of the Notes as set forth
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opposite each Initial Purchaser's name in Schedule 1 hereto, at a purchase price
equal to 96.5% of their principal amount.
(b) The Company shall not be obligated to deliver any of the
Notes, except upon payment for all of the Notes to be purchased as hereinafter
provided.
Section 3. Sale and Resale of the Notes by the Initial
Purchasers. You have advised the Company that you propose to offer the Notes for
resale upon the terms and conditions set forth in this Agreement and in the
Final Offering Memorandum. You hereby represent and warrant to, and agree with,
the Company that you (i) are purchasing the Notes pursuant to a private sale
exempt from registration under the Securities Act, (ii) will not solicit offers
for, or offer or sell, the Notes by means of any form of general solicitation or
general advertising or in any manner involving a public offering within the
meaning of Section 4(2) of the Securities Act, and (iii) will solicit offers for
the Notes only from, and will offer, sell or deliver the Notes, as part of their
initial offering, only to (A) persons whom you reasonably believe to be
qualified institutional buyers ("Qualified Institutional Buyers") as defined in
Rule 144A under the Securities Act, as such rule may be amended from time to
time ("Rule 144A") or, if any such person is buying for one or more
institutional accounts for which such person is acting as fiduciary or agent,
only when such person has represented to you that each such account is a
Qualified Institutional Buyer, to whom notice has been given that such sale or
delivery is being made in reliance on Rule 144A and (B) in each case, in
transactions under Rule 144A and to a limited number of other institutional
accredited investors ("Accredited Investors") as defined in Rule 501(a)(1)(2),
(3) or (7) under Regulation D who execute letters of representation in the form
included as Annex A to the Final Offering Memorandum in private sales exempt
from registration under the Securities Act.
Section 4. Delivery of and Payment for the Notes. (a) Payment
of the purchase price for, and delivery of, the Notes shall be made at the
offices of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, New York, New York or at such other place
as shall be agreed upon by the Company and you, at 9:30 a.m. (New York time), on
October 1, 1996 or at such other time or date as you and the Company shall
determine (such date and time of payment and delivery being herein called the
"Closing Date").
(b) On the Closing Date, payment shall be made to the Company
in same-day funds by wire transfer to such account or accounts as the Company
shall specify prior to the Closing Date or by such means as the parties hereto
shall agree prior to the Closing Date against delivery to you of the
certificates evidencing the Notes. Upon delivery, the Notes shall be registered
in such names and in such denominations as the Initial Purchasers shall request
in writing not less than two full business days prior to the Closing Date. For
the purpose of
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expediting the checking and packaging of certificates evidencing the Notes, the
Company agrees to make such certificates available for inspection at least 24
hours prior to the Closing Date.
Section 5. Further Agreements of the Company. The
Company agrees:
(a) To furnish to you, without charge, as many copies of the
Offering Memorandum and any supplements and amendments thereto as you may
reasonably request.
(b) Prior to making any amendment or supplement to the
Offering Memorandum, the Company shall furnish a copy thereof to the Initial
Purchasers and counsel to the Initial Purchasers and will not effect any such
amendment or supplement to which the Initial Purchasers shall reasonably object
by notice to the Company after a reasonable period to review, which shall not in
any case be longer than five business days after receipt of such copy.
(c) If, at any time prior to completion of the distribution of
the Notes by you to purchasers, any event shall occur or condition exist as a
result of which it is necessary, in the opinion of counsel for you or counsel
for the Company, to amend or supplement the Offering Memorandum in order that
the Offering Memorandum will not include an untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
therein not misleading in light of the circumstances existing at the time it is
delivered to a purchaser, or if it is necessary to amend or supplement the
Offering Memorandum to comply with applicable law, to promptly prepare such
amendment or supplement as may be necessary to correct such untrue statement or
omission or so that the Offering Memorandum, as so amended or supplemented, will
comply with applicable law and to furnish you such number of copies as you may
reasonably request.
(d) So long as the Notes are outstanding and are "Restricted
Securities" within the meaning of Rule 144(a)(3) under the Securities Act, to
furnish to holders of the Notes and prospective purchasers of Notes designated
by such holders, upon request of such holders or such prospective purchasers,
the information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act.
(e) For a period of five years following the Closing Date, to
furnish to you copies of any annual reports, quarterly reports and current
reports filed with the Commission on Forms 10-K, 10-Q and 8-K, or such other
similar forms as may be designated by the Commission, and such other documents,
reports and information as shall be furnished by the Company to the Trustee or
to the holders of the Notes pursuant to the Indenture.
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(f) To use its best efforts to qualify the Notes for sale
under the securities or Blue Sky laws of such jurisdictions as you reasonably
designate and to continue such qualifications in effect so long as required for
the distribution of the Notes. The Company will also arrange for the
determination of the eligibility for investment of the Notes under the laws of
such jurisdictions as you reasonably request. Notwithstanding the foregoing, the
Company shall not be obligated to qualify as a foreign corporation in any
jurisdiction in which it is not so qualified or to file a general consent to
service of process in any jurisdiction.
(g) To use its best efforts to permit the Notes to be
designated Private Offerings, Resales and Trading through Automated Linkages
Market ("PORTAL") securities in accordance with the rules and regulations
adopted by the National Association of Securities Dealers, Inc. relating to
trading in the PORTAL Market and to permit the Notes to be eligible for
clearance and settlement through The Depository Trust Company (the "DTC").
(h) Except following the effectiveness of the Registration
Statement (as defined in the Registration Rights Agreement), not to, and will
cause its affiliates not to, solicit any offer to buy or offer to sell the Notes
by means of any form of general solicitation or general advertising (as those
terms are used in Regulation D under the Securities Act) or in any manner
involving a public offering within the meaning of Section 4(2) of the Securities
Act.
(i) Not to, and will cause its affiliates not to, sell, offer
for sale or solicit offers to buy or otherwise negotiate in respect of any
security (as defined in the Securities Act) in a transaction that could be
integrated with the sale of the Notes in a manner that would require the
registration under the Securities Act of the Notes.
(j) To apply the net proceeds from the sale of the
Notes as set forth in the Final Offering Memorandum.
(k) To use its best efforts to take such steps as shall be
necessary to ensure that neither the Company nor any subsidiary shall become an
"investment company" within the meaning of such term under the Investment
Company Act and the rules and regulations of the Commission thereunder.
Section 6. Payment of Expenses. The Company agrees to pay (a)
the costs in connection with the authorization, issuance, sale and delivery of
the Notes and any taxes payable in that connection, (b) the costs incident to
the preparation and printing of the Offering Memorandum and any amendments or
supplements thereto, (c) the costs of distributing the Offering Memorandum and
any amendments or supplements thereto, (d) the costs incident to the
preparation, printing and delivery of the
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certificates representing the Notes, including stamp duties and stock transfer
taxes, if any, payable upon issuance of any of the Notes, (e) the fees and
disbursements of the Company's counsel and accountants, (f) any fees charged by
rating agencies for rating the Notes, (g) the reasonable fees and expenses of
qualifying the Notes under securities laws of the several jurisdictions as
provided in Section 5(f) and of preparing, printing and distributing a Blue Sky
memorandum (including, without limitation, related legal fees of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
& ▇▇▇▇▇▇▇▇, counsel to the Initial Purchasers), (i) the fees and expenses of the
Trustee, the Collateral Agent and any paying agent, (including, without
limitation, related fees and expenses of any counsel for such parties), (h) all
expenses and listing fees incurred in connection with the application for
quotation of the Notes on the PORTAL Market and (j) all other reasonable costs
and expenses incident to the performance of the Company's obligations hereunder
which are not otherwise specifically provided for in this Section. In addition,
the Company shall reimburse the Initial Purchasers for the reasonable expenses
(other than related legal fees of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel to the
Initial Purchasers) as shall have been incurred by them in connection with the
purchase and the initial resale of the Notes, and upon demand the Company shall
pay the full amount thereof to the Initial Purchasers.
Section 7. Conditions of Initial Purchasers' Obligations. Your
respective obligations hereunder are subject to the accuracy, in all material
respects, when made and on the Closing Date, of the representations and
warranties of the Company contained herein, to the performance by the Company,
in all material respects, of its obligations hereunder, and to each of the
following additional terms and conditions:
(a) No Initial Purchaser shall have discovered and disclosed
to the Company on or prior to the Closing Date that the Final Offering
Memorandum or any amendment or supplement thereto contains an untrue statement
of a fact which, in the opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the
Initial Purchaser, is material or omits to state a fact which, in the opinion of
such counsel is material and is required to be stated therein or is necessary to
make the statements therein not misleading.
(b) All consents, waivers and approvals necessary for the
consummation of the transactions contemplated by the Transaction Documents shall
have been obtained and shall be in full force and effect on the Closing Date.
(c) All corporate proceedings and other legal matters incident
to the authorization, form and validity of each of the Transaction Documents,
the Notes and Offering Memorandum, and all other legal matters relating to the
Transaction Documents and the transactions contemplated thereby shall be
reasonably satisfactory in all material respects to counsel for the Initial
Purchasers, and the Company shall have furnished to such counsel
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all documents and information that they may reasonably request to enable them to
pass upon such matters.
(d) ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ shall have furnished to the Initial
Purchasers their written opinion, as counsel to the Company, addressed to you
and dated the Closing Date, in form and substance reasonably satisfactory to the
Initial Purchasers, to the effect that:
(i) The Company is validly existing as a corporation in
good standing under the laws of the State of New Jersey, and Felchar
Manufacturing Corporation is validly existing as a corporation in good
standing under the laws of the State of New York;
(ii) The Notes, the Indenture, the Registration Rights
Agreement and the Pledge Agreement conform in all material respects to
the descriptions thereof contained in the Final Offering Memorandum;
(iii) This Agreement has been duly authorized, executed
and delivered by the Company;
(iv) The Registration Rights Agreement has been duly
authorized, executed and delivered by the Company and constitutes a
valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms;
(v) Assuming that (i) each of the non-individual
Pledgors is duly organized, validly existing and in good standing under
the laws of the applicable jurisdictions, (ii) each of the Pledgors has
full power, authority and capacity to authorize, execute, deliver and
perform the Pledge Agreement, (iii) the execution, delivery and
performance of the Pledge Agreement has been duly authorized by all
necessary action on the part of each of the Pledgors and (iv) the
Pledge Agreement has been duly executed and delivered by each of the
Pledgors, the Pledge Agreement constitutes a valid and binding
obligation of each of such Pledgors, enforceable against each of them
in accordance with its terms;
(vi) Upon delivery pursuant to the Pledge Agreement to
the Collateral Agent of the certificates representing the shares of
common stock of the Company listed on Schedule I to the Pledge
Agreement (the "Pledged Shares"), along with stock powers duly indorsed
in blank, and assuming (i) the Collateral Agent took possession, and
continuously maintains possession, of the certificates representing the
Pledged Shares in the State of New York and (ii) the Collateral Agent
is taking such Pledged Shares in good faith without notice of any
adverse claim, the security interest created in favor of the Collateral
Agent under the Pledge Agreement
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in the Pledged Shares constitutes a valid and perfected security
interest as security for the Obligations (as defined in the Pledge
Agreement), subject to no equal or prior claim in favor of any other
person. No filings or recordings are required in order to perfect the
security interests created under the Pledge Agreement in such Pledged
Shares;
(vii) The Indenture has been duly authorized, executed
and delivered by the Company and constitutes a valid and binding
obligation of the Company enforceable against the Company in accordance
with its terms.
(viii) The Notes have been duly authorized, executed and
issued by the Company and, when duly authenticated in accordance with
the Indenture and delivered to and paid for in accordance with this
Agreement, will constitute valid and binding obligations of the Company
enforceable against the Company in accordance with their terms and will
be entitled to the benefits of the Indenture.
(ix) The execution and delivery of each of the
Transaction Documents, the issuance, authentication, sale and delivery
of the Notes, the creation of a security interest pursuant to the
Pledge Agreement and the repayment of certain existing indebtedness as
contemplated by the Final Offering Memorandum (collectively, the
"Subject Transactions") will not result in a breach or violation of any
of the terms or provisions of, or constitute a default under, (x) any
of the agreements which have been identified to such counsel by the
Company as being all the agreements to which the Company or any of its
subsidiaries is party which are material to the financial condition or
results of operations of the Company or (y) orders, judgments and
decrees which have been identified to such counsel by the Company as
being all of the orders, judgments and decrees that are material to the
financial condition or results of operations of the Company, other than
breaches or violations that have been cured or waived or that would not
reasonably be expected to have a Material Adverse Effect, nor will such
actions result in any violation of the provisions of the charter or
by-laws of the Company or any applicable federal or New York statute,
rule or regulation. The opinion expressed in this paragraph (ix) may be
limited to those laws that in such counsel's experience are typically
applicable to transactions such as those contemplated by this
Agreement. In interpreting the specified agreements referred to above,
such counsel may assume that all such agreements are governed by the
laws of the State of New York.
(x) No consent, approval, authorization, order,
registration or qualification of or with any Federal or New York
governmental agency or body is required in connection
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with the Subject Transactions, except for such consents, approvals,
authorizations, registrations or qualifications as may be required
under federal, state securities or Blue Sky laws in connection with the
purchase and distribution of the Notes by the Initial Purchasers. The
opinion expressed in this paragraph (x) may be limited to those laws
that in such counsel's experience are typically applicable to
transactions such as those contemplated by this Agreement.
(xi) Neither the Company nor any subsidiary is an
"investment company" within the meaning of such term under the
Investment Company Act of 1940.
(xii) No registration under the Securities Act of the
Notes and no qualification of the Indenture under the Trust Indenture
Act of 1939, as amended, is required in connection with the sale of the
Notes to the Initial Purchases as contemplated by this Agreement or by
the Initial Purchasers in compliance with the conditions for initial
resales set forth in the Final Offering Memorandum.
In rendering such opinion, such counsel may state that their opinion is limited
to matters governed by the Federal laws of the United States of America and the
laws of the State of New York. In addition, with respect to clauses (iv), (v),
(vii), and (viii) of this subsection 7(d), such opinion may state that their
opinion is subject to the following exceptions, limitations and qualifications:
(u) the effects of bankruptcy, insolvency, reorganization, moratorium and other
similar laws now or hereafter in effect relating to or affecting the rights and
remedies of creditors; (v) the effect of general principles of equity, whether
enforcement is considered in a proceeding in equity or at law, and the
discretion of the court before which any proceeding therefor may be brought; (w)
state that they express no opinion concerning the enforceability of the waiver
rights and defenses contained in Section 4.06 of the Indenture; (x) state that
they express no opinion with respect to the specific performance provisions of
the Registration Rights Agreement; and (y) the unenforceability under certain
circumstances under law or court decisions of provisions providing for the
indemnification or contribution to a party with respect to a liability where
such indemnification or contribution is contrary to public policy. Such counsel
shall also have furnished to the Initial Purchasers a written statement,
addressed to the Initial Purchasers and dated the Closing Date, in form and
substance reasonably satisfactory to the Initial Purchasers, to the effect that
(x) such counsel has acted as counsel to the Company and in connection with the
preparation of the Offering Memorandum, and (y) based on the foregoing, no facts
have come to the attention of such counsel which lead them to believe that the
Final Offering Memorandum, as of its date and as of the Closing Date, contained
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in
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light of the circumstances under which they were made, not
misleading.
(e) ▇▇▇▇▇▇ & ▇▇▇▇▇ LLP shall have furnished to the Initial
Purchasers their written opinion, as counsel to the Company, addressed to you
and dated the Closing Date, in form and substance satisfactory to the Initial
Purchasers, to the effect that:
(i) The Company is validly existing as a corporation in
good standing under the laws of the State of New Jersey and it has all
corporate power and authority necessary to own or hold its property and
conduct the business in which it is engaged, and is duly qualified to
do business and is in good standing as a foreign corporation in the
Commonwealth of Pennsylvania, and, to our knowledge, in each other
state of the United States in which its ownership or lease of property
or the conduct of its business requires such qualification, except
where any failure to be so qualified or in good standing would not
reasonably be expected to have a Material Adverse Effect.
(ii) Shop Vac Properties International, Ltd. ("Shop Vac
Properties") is validly existing as a corporation in good standing
under the laws of the State of Delaware and it has all corporate power
and authority necessary to own or hold its property and conduct its
business in which it is currently engaged and, to our knowledge, is not
required to be qualified as a foreign corporation in any state of the
United States, except where any failure to be so qualified or in good
standing would not reasonably be expected to have a Material Adverse
Effect.
(iii) The authorized capital stock of the Company
consists of 20,000 shares of Class A Common Stock with no par value and
1,000,000 shares of Class B Common Stock with no par value, and all of
the issued and outstanding shares of the capital stock of the Company
have been duly and validly authorized and issued and are fully paid and
non-assessable.
(iv) The issued and outstanding shares of capital stock
of Shop Vac Properties and, to such counsel's knowledge, each other
United States subsidiary of the Company, have been duly and validly
authorized and issued and are fully paid and non-assessable.
(v) Each of the Transaction Documents has been duly
authorized, executed and delivered by the Company.
(vi) The Notes have been duly authorized, executed and
delivered by the Company.
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(vii) The Pledge Agreement has been duly authorized,
executed and delivered by the shareholders of the Company parties
thereto.
(viii) The execution and delivery by the Company of each
of the Transaction Documents, the issuance, authentication, sale and
delivery of the Notes pursuant to the Indenture, the creation of a
security interest pursuant to the Pledge Agreement and the repayment of
certain existing indebtedness as contemplated by the Final Offering
Memorandum (collectively, the "Subject Transactions") will not conflict
with or result in a breach or violation of the charter or bylaws of the
Company or, to such counsel's knowledge, any subsidiary of the Company,
or any applicable provision of the laws of the Commonwealth of
Pennsylvania, the New Jersey Business Corporation Act or the New Jersey
Revised Uniform Limited Partnership Law (1976), or, to our knowledge,
any order, rule or regulation known to such counsel of any Pennsylvania
court or government agency or body. The opinion expressed in this
paragraph may be limited to the laws that in such counsel's experience
are typically applicable to transactions such as those contemplated by
this Agreement.
(ix) No consent, approval, authorization, order,
registration or qualification of or with any Pennsylvania governmental
agency or body or, to such counsel's knowledge, any Pennsylvania court
is required in connection with the Subject Transactions, except such
consent, approvals, authorizations, registrations or qualifications as
may be required under state securities laws or Blue Sky laws in
connection with the purchase and distribution of the Notes by the
Initial Purchasers and such counsel may express no opinion on the
application or effect of such state securities laws or Blue Sky Laws in
connection with the transactions contemplated herein. The opinion
expressed in this paragraph (ix) may be limited to laws that in such
counsel's experience are typically applicable to transactions such as
those contemplated by the Purchase Agreement.
(x) To the best of such counsel's knowledge, except as
set forth in the Final Offering Memorandum (including, without
limitation, under the caption "Environmental") there are no legal or
governmental proceedings pending or threatened to which the Company or
any of its subsidiaries is a party or of which any property or assets
of the Company or any of its subsidiaries is subject which, if
determined adversely to the Company or its subsidiaries, is expected to
have a Material Adverse Effect. As to judgements concerning
materiality, such counsel may rely on representations of the Company.
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In rendering such opinion, such counsel may (i) state that their opinion is
limited to matters governed by the corporation and limited partnership laws of
the State of New Jersey, the corporate law of the State of Delaware and the
Commonwealth of Pennsylvania; (ii) rely as to matters of fact upon statements,
representations and certificates of officers or other representatives of the
Company; and (iii) representations and certificates of the Pledgors or
representatives of the Pledgors.
(f) A. & ▇. ▇▇▇▇▇▇▇▇ shall have furnished to the Initial
Purchasers their written opinion, as Irish counsel to the Company, addressed to
you and dated the Closing Date, in form and substance satisfactory to the
Initial Purchasers, to the effect that: (i) Goblin Ireland, Ltd. ("Goblin"),
which is a subsidiary of the Company, has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the Republic of
Ireland, and is currently registered as a private company limited by shares on
the register maintained by the Registrar of Companies in Dublin and (ii) no
license, permit or other authority is required to be issued by the Government of
the Republic of Ireland or any local authority in the Republic of Ireland to
enable Goblin to conduct the business in which it is engaged.
(g) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ shall have furnished to the
Initial Purchasers their written opinion, as counsel to the Initial Purchasers
and dated the Closing Date, in form and substance reasonably satisfactory to the
Initial Purchasers, with respect to the validity of the Notes and the Indenture,
to the Offering Memorandum and to other related matters as the Initial
Purchasers may reasonably require, and the Company shall have furnished to such
counsel such documents and information as they reasonably request for the
purpose of enabling them to pass upon such matters.
(h) The Company shall have furnished to the Initial Purchasers
a certificate, dated the Closing Date, of its Chairman of the Board, its
President or a Vice President and its Chief Financial Officer stating that:
(i) The representations, warranties and agreements of
the Company in Section 1 are true and correct in all material respects
as of the Closing Date; the Company has complied in all material
respects with all its agreements contained herein to be satisfied on or
prior to the Closing Date; and the conditions set forth in Section 7
have been fulfilled; and
(ii) They have carefully examined the Final Offering
Memorandum and, in their opinion (A) as of the date hereof, the Final
Offering Memorandum did not include any untrue statement of a material
fact and did not omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, and
(B) since
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such date no event has occurred which should have been set forth in a
supplement or amendment to the Final Offering Memorandum.
(i) With respect to the letter of KPMG delivered to the
Initial Purchasers concurrently with the execution of this Agreement (the
"initial letter"), the Company shall have furnished to the Initial Purchasers
the letter (the "bring-down letter") of such accountant, addressed to the
Initial Purchasers and dated the Closing Date (i) confirming that it is an
independent public accountant within the meaning of the Securities Act and is in
compliance with the applicable requirements relating to the qualification of
accountants under Rule 2-01 of Regulation S-X of the Commission, (ii) stating,
as of the date of the bring-down letter (or, with respect to matters involving
changes or developments since the respective dates as of which specified
financial information is given in the Final Offering Memorandum, as of a date
not more than five days prior to the date of such bring-down letter), the
conclusions and findings of such firm with respect to the financial information
and other matters covered by its initial letter and (iii) confirming in all
material respects the conclusions and findings set forth in its initial letter.
(j) The Initial Purchasers shall have received on the date
hereof the Registration Rights Agreement executed by the Company.
(k) The Collateral Agent shall have received on or prior to
the Closing Date the Pledge Agreement and related documents, each dated on or
about such day and each executed by the parties thereto, substantially in the
form of Exhibit C to the Indenture and in sufficient copies for the Initial
Purchasers.
(l) The Initial Purchasers shall have received payoff letters,
in form and substance satisfactory to them, from (i) the lenders under the Old
Revolving Credit Facility (as defined in the Preliminary Offering Memorandum)
and (ii) the holders of the Old Senior Notes (as defined in the Preliminary
Offering Memorandum).
(m) The Company shall have entered into the New Revolving
Credit Facility (as defined in the Preliminary Offering Memorandum) and the
Initial Purchasers shall have received all documents entered into in connection
with such credit facility, which documents shall be in form and substance
satisfactory to the Initial Purchasers.
(n) (i) Neither the Company nor any of its subsidiaries shall
have sustained since the date of the latest audited financial statements
included in the Final Offering Memorandum any loss or interference with its
business from fire, explosion, flood or other calamity, whether or not covered
by
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insurance, or from any labor dispute or court or governmental action, order or
decree, otherwise than as set forth or contemplated in the Final Offering
Memorandum as of the date hereof or (ii) since such date there shall not have
been any change in the capital stock or long-term debt of the Company or any of
its subsidiaries or any change, or any development involving a prospective
change, in or affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries taken as a whole, otherwise than as set forth or contemplated in
the Final Offering Memorandum as of the date hereof, the effect of which, in any
case described in clause (i) or (ii), is, in the judgment of the Initial
Purchasers, so material and adverse as to make it impracticable or inadvisable
to proceed with the offering of the delivery of the Notes on the terms and in
the manner contemplated in the Final Offering Memorandum.
(o) Subsequent to the execution and delivery of this Agreement
(i) no downgrading shall have occurred in the rating accorded the Company's debt
securities by any "nationally recognized statistical rating organization", as
that term is defined by the Commission for purposes of Rule 436(g)(2) of the
Rules and Regulations and (ii) no such organization 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.
(p) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (a) trading in securities
generally on the New York Stock Exchange or the American Stock Exchange or in
the over-the-counter market, or trading in any securities of the Company on any
exchange or in the over-the-counter market, shall have been suspended or minimum
prices shall have been established on any such exchange or such market by the
Commission, by such exchange or by any other regulatory body or governmental
authority having jurisdiction, (b) a banking moratorium shall have been declared
by Federal or state authorities, (c) the United States shall have become engaged
in hostilities, there shall have been an escalation in hostilities involving the
United States or there shall have been a declaration of a national emergency or
war by the United States or (d) there shall have occurred such a material
adverse change in general economic, political or financial conditions (or the
effect of international conditions on the financial markets in the United States
shall be such) as to make it, in the judgment of a majority in interest of the
several Initial Purchasers, impracticable or inadvisable to proceed with the
public offering or delivery of the Notes on the terms and in the manner
contemplated in the Final Offering Memorandum.
All opinions, letters, evidence and certificates mentioned
above or elsewhere in this Agreement shall be deemed to be in compliance with
the provisions hereof only if they are in
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form and substance reasonably satisfactory to counsel of the
Initial Purchasers.
Section 8. Indemnification and Contribution. (a) The Company
shall indemnify and hold harmless each Initial Purchaser, its officers and
employees and each person, if any, who controls any Initial Purchaser within the
meaning of the Securities Act, from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof (including, but
not limited to, any loss, claim, damage, liability or action relating to
purchases and sales of Notes), to which such Initial Purchaser, officer,
employee or controlling person may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or action arises out
of, or is based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained (A) in any Preliminary Offering Memorandum or the Final
Offering Memorandum, or in any amendment or supplement thereto, or (B) in any
blue sky application or other document prepared or executed by the Company (or
based upon any written information furnished by the Company) specifically for
the purpose of qualifying any or all of the Notes under the securities laws of
any state or other jurisdiction (any such application, document or information
being hereinafter called a "Blue Sky Application"), (ii) the omission or alleged
omission to state in any Preliminary Offering Memorandum or the Final Offering
Memorandum, or in any amendment or supplement thereto, or in any Blue Sky
Application any material fact required to be stated therein or necessary to make
the statements therein not misleading, and shall reimburse each Initial
Purchaser and each such officer, employee and controlling person promptly upon
demand for any legal or other expenses reasonably incurred by that Initial
Purchaser, officer, employee or controlling person in connection with
investigating or defending or preparing to defend against any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that the Company shall not be liable in any such case to the extent that any
such loss, claim, damage, liability or action arises out of, or is based upon,
any untrue statement or alleged untrue statement or omission or alleged omission
made in any Preliminary Offering Memorandum or the Final Offering Memorandum, or
in any such amendment or supplement, or in any Blue Sky Application in reliance
upon and in conformity with the written information furnished to the Company by
or on behalf of any Initial Purchaser specifically for inclusion therein; and
provided further that as to any Preliminary Offering Memorandum this indemnity
agreement shall not inure to the benefit of any Initial Purchaser, its officers
or employees or any person controlling such Initial Purchaser on account of any
loss, claim, damage, liability or action arising from the sale of the Notes to
any person by such Initial Purchaser if such Initial Purchaser failed to send or
give a copy of the Final Offering Memorandum, as the same may be amended or
supplemented, to that person within the time required by the Securities Act, and
the untrue statement or alleged untrue statement of any material fact or
omission or alleged omission to
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state a material fact in such Preliminary Offering Memorandum was corrected in
the Final Offering Memorandum, unless such failure resulted from non-compliance
by the Company with Section . The foregoing indemnity agreement is in addition
to any liability which the Company may otherwise have to any Initial Purchaser
or to any officer, employee or controlling person of that Initial Purchaser.
(b) Each Initial Purchaser, severally and not jointly, shall
indemnify and hold harmless the Company, its officers and employees, each of its
directors (including any person who, with his or her consent is named in the
Final Offering Memorandum as about to become a director of the Company) and each
person, if any, who controls the Company within the meaning of the Securities
Act, from and against any loss, claim, damage or liability, joint or several, or
any action in respect thereof, to which the Company or any such director,
officer or controlling person may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or action arises out
of, or is based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained (A) in any Preliminary Offering Memorandum or the Final
Offering Memorandum, or in any amendment or supplement thereto, or (B) in any
Blue Sky Application or (ii) the omission or alleged omission to state in any
Preliminary Offering Memorandum or the Final Offering Memorandum, or in any
amendment or supplement thereto, or in any Blue Sky Application any material
fact required to be stated therein or necessary to make the statements therein
not misleading, but in each case only to the extent that the untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with the written information furnished to the Company by
or on behalf of that Initial Purchaser specifically for inclusion therein, and
shall reimburse the Company and any such director, officer or controlling person
for any legal or other expenses reasonably incurred by the Company or any such
director, officer or controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage, liability
or action as such expenses are incurred. The foregoing indemnity agreement is in
addition to any liability which any Initial Purchaser may otherwise have to the
Company or any such director, officer or controlling person.
(c) Promptly after receipt by an indemnified party under this
Section of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 8 except to the extent it has
been materially prejudiced by such failure and, provided further, that the
failure to notify the indemnifying party shall not relieve it from any liability
which
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it may have to an indemnified party otherwise than under this Section 8. If any
such claim or action shall be brought against an indemnified party, and it shall
notify the indemnifying party thereof, the indemnifying party shall be entitled
to participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
the Initial Purchasers shall have the right to employ counsel to represent
jointly the Initial Purchasers and their respective officers, employees and
controlling persons who may be subject to liability arising out of any claim in
respect of which indemnity may be sought by the Initial Purchasers against the
Company under this Section 8 if, in the reasonable judgment of the Initial
Purchasers, it is advisable for the Initial Purchasers, officers, employees and
controlling persons to be jointly represented by separate counsel, and in that
event the fees and expenses of such separate counsel shall be paid by the
Company, it being understood however, that the indemnifying party shall not, in
connection with any one such action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
more than one separate firm of attorneys (other than the reasonable fees and
expenses of local counsel retained in connection with such action or actions) at
any one time for all such indemnified parties. Each indemnified party, as a
condition of the indemnity agreements contained in Section 8, shall use its best
efforts to cooperate with the indemnifying party in the defense of any such
action or claim. No indemnifying party shall (i) without the prior written
consent of the indemnified parties (which consent shall not be unreasonably
withheld), settle or compromise or consent to the entry of any judgment with
respect to any pending or threatened claim, action, suit or proceeding in
respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified parties are actual or potential parties to such
claim or action) unless such settlement, compromise or consent includes an
appropriate release of each indemnified party from all liability arising out of
such claim, action, suit or proceeding, which release shall be in form and
substance satisfactory to each indemnified party, or (ii) be liable for any
settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with its written
consent or if there be a final judgment of the plaintiff in any such action, the
indemnifying party agrees to indemnify and hold harmless any indemnified party
from and against any loss of liability by reason of such settlement or judgment.
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(d) If the indemnification provided for in this Section 8
shall for any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 8(a) or 8(b) in respect of any loss, claim,
damage or liability, or any action in respect thereof, referred to therein, then
each indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Company on the one hand and the Initial Purchasers on the other
from the offering of the Notes or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company on the one hand and the Initial
Purchasers on the other with respect to the statements or omissions which
resulted in such loss, claim, damage or liability, or action in respect thereof,
as well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Initial Purchasers on the other
with respect to such offering shall be deemed to be in the same proportion as
the total net proceeds from the offering of the Notes purchased under this
Agreement (before deducting expenses) received by the Company, on the one hand,
and the total discounts and commissions received by the Initial Purchasers with
respect to the Notes purchased under this Agreement, on the other hand, bear to
the total gross proceeds from the offering of the Notes under this Agreement, in
each case as set forth in the table on the cover page of the Final Offering
Memorandum. The relative fault shall be determined by reference to whether the
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 Initial Purchasers, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Initial Purchasers agree that it
would not be just and equitable if contributions pursuant to this Section 8(d)
were to be determined by pro rata allocation (even if the Initial Purchasers
were treated as one entity for such purpose) or by any other method of
allocation which does not take into account the equitable considerations
referred to herein. The amount paid or payable by an indemnified party as a
result of the loss, claim, damage or liability, or action in respect thereof,
referred to above in this Section 8(d) shall be deemed to include, for purposes
of this Section 8(d), any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 8(d), no Initial
Purchaser shall be required to contribute any amount in excess of the amount by
which the total price at which the Notes sold and distributed by it was offered
to purchasers exceeds the amount of any damages which such Initial Purchaser has
otherwise paid or become liable to pay by reason of any untrue or alleged untrue
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statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Initial Purchasers' obligations to contribute
as provided in this Section 8(d) are several in proportion to their respective
obligations and not joint.
(e) The Initial Purchasers severally confirm that the
statements with respect to the offering of the Notes set forth on the cover page
of, and under the caption "Plan of Distribution" in, the Final Offering
Memorandum are correct and constitute the only information furnished in writing
to the Company by or on behalf of the Initial Purchasers specifically for
inclusion in the Final Offering Memorandum.
Section 9. Termination.
(a) The obligations of the Initial Purchasers hereunder may be
terminated by them by notice given to and received by the Company prior to
delivery of and payment for the Notes if, prior to that time, any of the events
described in Sections 7(n), 7(o) or 7(p) shall have occurred or if the Initial
Purchasers shall decline to purchase the Notes for any reason permitted under
this Agreement.
(b) If the Company shall fail to tender the Notes for delivery
to the Initial Purchasers for any reason permitted under this Agreement or the
Initial Purchasers shall decline to purchase the Notes for any reason permitted
under this Agreement (other than pursuant to Section 7(p)), the Company shall
reimburse the Initial Purchasers for the reasonable fees and expenses of their
counsel and for such other out-of-pocket expenses as shall have been incurred by
them in connection with this Agreement and the proposed purchase of the Notes,
and upon demand the Company shall pay the full amount thereof to the Initial
Purchasers.
Section 10. Notices. All statements, requests,
notices and agreements hereunder shall be in writing, and:
(a) if to the Initial Purchasers, shall be
delivered or sent by mail, telex or facsimile
transmission to them c/▇ ▇▇▇▇▇▇ Brothers Inc., Three
World Financial Center, New York, New York 10285,
Attention: Syndicate Registration Department;
(b) if to the Company, shall be delivered or sent
by mail, telex or facsimile transmission to the address
of the Company set forth in the Final Offering
Memorandum, Attention: W. ▇▇▇▇ ▇▇▇▇▇▇▇, Executive Vice
President and Chief Financial Officer (Fax: (717) 326-
0422), with a copy to ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, 885 Third
▇▇
▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇ ▇▇.
provided, however, that any notice to an Initial Purchaser pursuant to Section
8(c) shall be delivered or sent by mail, telex or facsimile transmission to such
Initial Purchaser at, if to ▇▇▇▇▇▇ Brothers Inc., Three World Financial Center,
New York, New York 10285, Attention: Syndicate Registration Department; and if
to First Union Capital Markets Corp., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: High Yield Origination. Any such
statements, requests, notices or agreements shall take effect at the time of
receipt thereof. The Company shall be entitled to act and rely upon any request,
consent, notice or agreement given or made on behalf of the Initial Purchasers
by ▇▇▇▇▇▇ Brothers Inc.
Section 11. Persons Entitled to Benefit of Agreement. This
Agreement shall inure to the benefit of and be binding upon the Initial
Purchasers, the Company and their respective successors. This Agreement and the
terms and provisions hereof are for the sole benefit of only those persons,
except that (a) the representations, warranties, indemnities and agreements of
the Company contained in this Agreement shall also be deemed to be for the
benefit of any affiliates of the Initial Purchaser participating in an offering
made pursuant to Regulation S and the person or persons, if any, who control any
Initial Purchaser within the meaning of Section 15 of the Securities Act and
each director, officer, employee or agent of the Initial Purchasers and (b) the
indemnity agreement of the Initial Purchasers contained in Section 8(b) of this
Agreement shall be deemed to be for the benefit of directors of the Company,
officers of the Company and any person controlling the Company within the
meaning of Section 15 of the Securities Act. Nothing in this Agreement is
intended or shall be construed to give any person, other than the persons
referred to in this Section 11, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision contained herein.
Section 12. Survival. The respective indemnities,
representations, warranties and agreements of the Company and the Initial
Purchasers contained in this Agreement or made by or on behalf on them,
respectively, pursuant to this Agreement, shall survive the delivery of and
payment for the Notes and shall remain in full force and effect, regardless of
any investigation made by or on behalf of any of them or any person controlling
any of them.
Section 13. Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the
State of New York without regard to the principles of conflicts
of laws thereof.
Section 14. Amendments. No amendment or waiver of any
provision of this Agreement, nor any consent or approval to any
27
27
departure therefrom, shall in any event be effective unless the same shall be in
writing and signed by the parties hereto.
Section 15. Submission To Jurisdiction. The Company
hereby irrevocably and unconditionally:
(a) submits itself and its property in any legal action or
proceeding relating to this Agreement, or for recognition and enforcement of any
judgment in respect thereof, to the non-exclusive jurisdiction of the courts of
the State of New York and the courts of the United States of America for the
Southern District of New York, and appellate courts thereof, and consents and
agrees to such action or proceeding being brought in such courts as you may
elect;
(b) waives any objection that it may now or hereafter have to
the venue of any such action or proceeding in any such court or that such action
or proceeding was brought in an inconvenient court and agrees not to plead or
claim the same;
(c) agrees to notify the Initial Purchasers promptly by
registered or certified mail if any such agent in the city of New York shall
cease to act as agent, and, in such event, promptly to designate another agent
in the City of New York to receive service in place of such agent and deliver to
the Initial Purchasers written evidence of such substitute agent's acceptance of
such designation;
(d) agrees as an alternate means of service to service of
process in any such legal action or proceeding by mailing of copies thereof (by
registered or certified mail, if practicable) postage prepaid, or by telex, to
the then active agent or the Company at the address of the Company as set forth
in Section 9 or at such other address of which you shall have been notified
pursuant thereto, and agrees that failure to receive such copy or notice shall
not affect or impair the validity of such service or of any judgment rendered in
any action or proceeding based thereon except to the extent that the Company has
been materially prejudiced by such failure; and
(e) agrees that nothing herein shall affect your right to
effect service of process in any other manner permitted by law, and that you
shall have the right to bring any legal proceedings (including a proceeding for
enforcement of a judgment entered by any of the aforementioned courts) against
the Company in such courts or in any other court or jurisdiction in accordance
with applicable law.
Section 16. Definition of Terms. For purposes of this
Agreement, (a) "business day" means any day on which the New York
Stock Exchange, Inc. is open for trading, and (b) "subsidiary"
has the meaning set forth in Rule 405 under the Securities Act.
28
Section 17. Counterparts. This Agreement may be executed in
one or more counterparts and, if executed in more than one counterpart, the
executed counterparts shall each be deemed to be an original but all such
counterparts shall together constitute one and the same instrument.
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument will become a binding agreement among the Company and
you in accordance with its terms.
Very truly yours,
SHOP VAC CORPORATION
By: /s/ W. ▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------
Name: W. ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Executive Vice President and
Chief Financial Officer
Confirmed and accepted as of
the date first above
written:
▇▇▇▇▇▇ BROTHERS INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
______________________________
Name:▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
FIRST UNION CAPITAL MARKETS CORP.
By: /s/ R. ▇▇▇▇ ▇▇▇▇▇▇▇▇
______________________________
Name:R. ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Managing Director
29
Schedule 1
Principal Amount
of Notes to
Initial Purchasers Be Purchased
------------------ ------------
▇▇▇▇▇▇ Brothers Inc. $ 70,000,000
First Union Capital Markets Corp. $ 30,000,000
------------
$100,000,000
============
