<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(d)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 3)
------------------------
THE RIVAL COMPANY
(Name of Subject Company [Issuer])
MORIARTY ACQUISITION CORP.
A WHOLLY-OWNED SUBSIDIARY OF
HOLMES PRODUCTS CORP.
(Bidder)
COMMON STOCK, PAR VALUE $0.01 PER SHARE
(Title of Class of Securities)
768020109
(CUSIP Number of Class of Securities)
JORDAN A. KAHN
PRESIDENT
HOLMES PRODUCTS CORP.
233 FORTUNE BOULEVARD
MILFORD, MA 01757
(508) 634-8050
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications on Behalf of Bidder)
------------------------
WITH A COPY TO:
DONALD H. SIEGEL, P.C.
MICHAEL L. ANDRESINO, ESQ.
POSTERNAK, BLANKSTEIN & LUND, L.L.P.
100 CHARLES RIVER PLAZA
BOSTON, MASSACHUSETTS 02114
(617) 973-6100
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<PAGE> 2
Moriarty Acquisition Corp., a Delaware corporation ("Purchaser"), and
Holmes Products Corp., a Massachusetts corporation ("Parent"), hereby further
amend and supplement their Tender Offer Statement on Schedule 14D-1 (the
"Schedule 14D-1"), filed with the Securities and Exchange Commission on December
23, 1998, with respect to Purchaser's offer to purchase all of the outstanding
shares of Common Stock, par value $0.01 per share (the "Shares"), of The Rival
Company, a Delaware corporation (the "Company"), at a purchase price of $13.75
per Share, net to the seller in cash, without interest thereon. All capitalized
terms used herein shall have the meaning set forth in the Schedule 14D-1 and the
Offer to Purchase dated December 23, 1998, except as may otherwise be provided
herein.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
(a)-(b) The information set forth in Paragraphs (a)-(b) of Item 4 is hereby
amended and supplemented by the following:
On January 29, 1999, Parent entered into an agreement (the "Purchase
Agreement") for the sale to BancBoston Robertson Stephens Inc. and Lehman
Brothers Inc., as initial purchasers, of $31,250,000 principal amount of the New
Notes, at an offering price to investors of 96.0%. The sale of the New Notes is
being made to institutional investors in reliance on Rule 144A and other
registration exemptions under the Securities Act of 1933, as amended. A press
release relating to the foregoing is filed as Exhibit (a)(12) to the Schedule
14D-1 and is incorporated herein by reference.
A copy of the Purchase Agreement relating to the sale of the New Notes has
been filed as Exhibit (b)(1) to the Schedule 14D-1 and is incorporated herein by
reference. Reference is made to the Purchase Agreement for the actual terms and
conditions thereof.
ITEM 10. ADDITIONAL INFORMATION.
(b)-(c) The information set forth in Paragraphs (b) and (c) of Item 10 is
hereby amended and supplemented by the following:
The FTC has granted the request of affiliates of Berkshire Partners for
early termination of the waiting period under the HSR Act applicable to their
acquisition of additional common stock of Parent pursuant to the Equity
Commitment.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
Item 11 is hereby amended by adding thereto the following exhibits:
(a)(12) Text of Press Release issued by Parent on January 29, 1999.
(b)(1) Purchase Agreement dated as of January 29, 1999 among Parent,
BancBoston Robertson Stephens Inc. and Lehman Brothers Inc.
1
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SIGNATURES
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
HOLMES PRODUCTS CORP.
By: /s/ IRA B. MORGENSTERN
----------------------------------
IRA B. MORGENSTERN
SENIOR VICE PRESIDENT -- FINANCE
MORIARTY ACQUISITION CORP.
By: /s/ IRA B. MORGENSTERN
----------------------------------
IRA B. MORGENSTERN
TREASURER
Dated: February 1, 1999
2
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<C> <S>
(a)(12) Text of Press Release issued by Parent on January 29, 1999.
(b)(1) Purchase Agreement dated as of January 29, 1999 among
Parent, BancBoston Robertson Stephens Inc. and Lehman
Brothers Inc.
</TABLE>
<PAGE> 1
Exhibit 99(a)(12)
FOR IMMEDIATE RELEASE
- ---------------------
January 29, 1999
Contact:
Ira B. Morgenstern
Holmes Products Corp.
Senior Vice President - Finance
508/634-8050
HOLMES PRODUCTS CORP. ENTERS INTO PURCHASE
AGREEMENT FOR SALE OF SENIOR SUBORDINATED NOTES
Milford, Massachusetts -- January 29, 1999 -- Holmes Products Corp.
("Holmes") announced today that in connection with its acquisition of The Rival
Company ("Rival"), it has entered into a definitive purchase agreement for the
sale of $31,250,000 principal amount of Holmes' 9.875% Senior Subordinated Notes
due 2007 (the "Notes"), at an offering price to investors of 96.0%. The sale of
the Notes is being made to institutional investors in reliance on certain
exemptions from registration under the Securities Act of 1933, as amended.
This press release shall not be deemed to constitute an offer to sell
or a solicitation of an offer to buy any of the Notes.
Holmes is a leading developer, manufacturer and marketer of quality
branded home comfort products, including fans, heaters, humidifiers and air
purifiers. In addition, Holmes markets and distributes a variety of decorative
and home office lighting products, as well as various replacement filters and
accessories for its products.
Rival is a leading designer, manufacturer and marketer of a variety of
products including small kitchen and personal care appliances such as
Crock-Pot(R) slow cookers, can openers and massagers; products for the home
environment including space heaters, air purifiers, showerheads, utility pumps,
humidifiers and fans; and building supply and industrial products such as
household ventilation, door chimes, ceiling fans and industrial fans.
Some of the statements in this press release may be considered
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Forward-looking information is inherently
subject to risks and uncertainties, which include, but are not limited to, the
successful and timely completion of this transaction, the effective integration
of Rival into Holmes and the overall economic, market, and industry conditions,
as well as the risks described from time to time in reports filed by Holmes and
Rival with the Securities and Exchange Commission, including their most
recently filed Form 10-K, Form 10-Q and Form 8-K reports. Should any such risks
or uncertainties materialize, or underlying assumptions prove incorrect, actual
results or outcomes may vary materially from those anticipated.
<PAGE> 1
Exhibit 99(b)(1)
================================================================================
HOLMES PRODUCTS CORP.
AND
THE GUARANTORS NAMED ON THE SIGNATURE PAGES HERETO
$31,250,000
9 7/8% Senior Subordinated Notes due 2007
Purchase Agreement
January 29, 1999
BANCBOSTON ROBERTSON STEPHENS INC.
LEHMAN BROTHERS INC.
================================================================================
<PAGE> 2
Holmes Products Corp.
$31,250,000
9 7/8% Senior Subordinated Notes due 2007
PURCHASE AGREEMENT
January 29, 1999
New York, New York
BANCBOSTON ROBERTSON STEPHENS INC.
LEHMAN BROTHERS INC.
c/o BancBoston Robertson Stephens Inc.
100 Federal Street
Boston, Massachusetts 02110
Ladies & Gentlemen:
Holmes Products Corp., a Massachusetts corporation (the "COMPANY"),
proposes to issue and sell to BancBoston Robertson Stephens Inc. and Lehman
Brothers Inc. (together, the "INITIAL PURCHASERS") $31,250,000 in aggregate
principal amount of its 9 7/8% Series C Senior Subordinated Notes due 2007 (the
"SERIES C NOTES"), subject to the terms and conditions set forth herein. The
Notes (as defined) will be fully and unconditionally guaranteed (the
"GUARANTEES") as to payment of principal, interest, liquidated damages and
premium, if any, on an unsecured senior subordinated basis, jointly and
severally, by (i) each subsidiary of the Company listed as a "Holmes Guarantor"
on EXHIBIT A hereto (the "HOLMES GUARANTORS") and (ii) upon (A) the acceptance
in the offer (the "TENDER OFFER") by the Company's subsidiary, Moriarty
Acquisition Corp. ("MORIARTY"), to purchase all of the outstanding common stock
of The Rival Company ("RIVAL") of at least 70% of the shares of Rival common
stock then outstanding (the "MINIMUM TENDER AMOUNT") and (B) the execution of a
counterpart to this Agreement in substantially the form set forth in EXHIBIT B
hereto (the "PURCHASE AGREEMENT SUPPLEMENT") pursuant to Section 9(a) hereof, by
each additional domestic subsidiary of the Company acquired in the Tender Offer
and listed as a "Rival Guarantor" on EXHIBIT A hereto (the "RIVAL GUARANTORS"
and, together with the Holmes Guarantors, the "GUARANTORS"). Capitalized terms
used herein and not otherwise defined shall have the meanings assigned to such
terms in the Indenture (as defined). The Series C Notes will be issued pursuant
to an indenture (the "INDENTURE"), to be dated the Closing Date (as defined),
among the Company, the Guarantors and State Street Bank and Trust Company, as
trustee (the "TRUSTEE").
The offering of the Series C Notes is being made in connection with the
Tender Offer and related transactions contemplated by the Agreement and Plan of
Merger among the Company, Moriarty and Rival, dated December 17, 1998 (the
"MERGER AGREEMENT"). As used in this Agreement, (i) prior to the acceptance of
the Minimum Tender Amount in the Tender Offer, references to the "Issuers" shall
mean the Company and the Holmes Guarantors, references to the "Guarantors" shall
mean the Holmes Guarantors, and (ii) upon the acceptance and the due execution
and delivery of the Purchase Agreement Supplement by the Rival Guarantors in
connection therewith, references to the "Issuers" shall mean the Company, the
Holmes Guarantors and the Rival Guarantors, references to the "Guarantors" shall
mean the Holmes Guarantors and the Rival Guarantors, in each case as if all such
parties had executed this Agreement on the date hereof. In addition, (i) prior
to the acceptance of the Minimum Tender Amount in
<PAGE> 3
the Tender Offer, references to "Subsidiaries" shall mean the majority-owned
subsidiaries of Holmes and (ii) upon the acceptance and the due execution and
delivery of the Purchase Agreement Supplement by the Rival Guarantors,
references to "Subsidiaries" shall mean the majority-owned subsidiaries of
Holmes, Rival and the subsidiaries of Rival.
1. ISSUANCE OF SECURITIES. The Company proposes, upon the terms and
subject to the conditions set forth herein, to issue and sell to the Initial
Purchasers an aggregate of $31,250,000 in principal amount of Series C Notes.
The Series C Notes and the Series D Notes (as defined) issuable in exchange
therefor are collectively referred to herein as the "NOTES."
Upon original issuance thereof, and until such time as the same is no
longer required under the applicable requirements of the Securities Act of 1933,
as amended (the "Act"), the Series C Notes (and all securities issued in
exchange therefor or in substitution thereof) shall bear substantially the
following legend:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE
UNITED STATES SECURITIES ACT OF 1933 AS AMENDED (THE "SECURITIES ACT"),
AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE
EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS
HEREBY NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE RELYING ON THE
EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A AND REGULATION S. THE HOLDER OF THIS SECURITY
AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY MAY BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (1)(a) TO A PERSON WHO
THE SELLER REASONABLY BELIEVES IS A QIB IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT, (b) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES
ACT, (c) OUTSIDE THE UNITED STATES TO A NON-U.S. PERSON IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES
ACT OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF
COUNSEL IF THE COMPANY SO REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT, AND IN EACH CASE, IN ACCORDANCE
WITH ANY APPLICABLE SECURITIES LAW OF ANY STATE OF THE UNITED STATES OR
ANY OTHER APPLICABLE JURISDICTION AND (B) THE PURCHASER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY SUBSEQUENT PURCHASER FROM
IT OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE."
2. OFFERING. The Series C Notes will be offered and sold to the Initial
Purchasers pursuant to an exemption from the registration requirements under the
Act. The Company has prepared an offering memorandum, dated the date hereof,
relating to the Company, its Subsidiaries and the Series C Notes (with any
amendments and supplements thereto, the "OFFERING MEMORANDUM").
2
<PAGE> 4
The Initial Purchasers have advised the Company that the Initial
Purchasers will make offers (the "EXEMPT RESALES") of the Series C Notes on the
terms set forth in the Offering Memorandum, as amended or supplemented, solely
to (i) persons whom the Initial Purchasers reasonably believe to be "qualified
institutional buyers," as defined in Rule 144A under the Act ("QIBS") and (ii)
non-U.S. persons outside the United States in reliance upon Regulation S
("REGULATION S") under the Act (each, a "REG S INVESTOR"). The QIBs and Reg S
Investors are collectively referred to herein as the "ELIGIBLE PURCHASERS." The
Initial Purchasers will offer the Series C Notes to such Eligible Purchasers
initially at a price equal to 96% of the principal amount thereof. Such price
may be changed at any time without notice.
Holders (including subsequent transferees) of the Series C Notes will
have the registration rights set forth in the registration rights agreement
relating thereto (the "REGISTRATION RIGHTS AGREEMENT"), to be dated the Closing
Date, in substantially the form of EXHIBIT C hereto, for so long as such Series
C Notes constitute "TRANSFER RESTRICTED SECURITIES" (as defined in the
Registration Rights Agreement). Pursuant to the Registration Rights Agreement,
the Issuers will agree to file with the Securities and Exchange Commission (the
"COMMISSION"), under the circumstances set forth therein, (i) a registration
statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENT") relating
to the 9 7/8% Series D Notes due 2007 (the "SERIES D NOTES") to be offered in
exchange for the Series C Notes (the "EXCHANGE OFFER") and (ii) a shelf
registration statement pursuant to Rule 415 under the Act (the "SHELF
REGISTRATION STATEMENT" and, together with the Exchange Offer Registration
Statement, the "REGISTRATION STATEMENTS") relating to the resale by certain
holders of the Series C Notes, and to use their best efforts to cause such
Registration Statements to be declared effective and to consummate the Exchange
Offer. This Agreement, the Purchase Agreement Supplement, the Notes, the
Guarantees, the Indenture, the Registration Rights Agreement, the Registration
Rights Agreement Supplement (as defined herein) the Merger Agreement and the
Credit Facility (as defined in the Offering Memorandum) are hereinafter referred
to collectively as the "OPERATIVE DOCUMENTS."
3. PURCHASE, SALE AND DELIVERY. (a) On the basis of the representations,
warranties and covenants contained in this Agreement, and subject to its terms
and conditions, the Company agrees to issue and sell to each Initial Purchaser,
and each Initial Purchaser agrees, severally and not jointly, to purchase from
the Company, the principal amount of Series C Notes set forth opposite its name
on SCHEDULE I hereto. The aggregate purchase price for the Series C Notes will
be $29,250,000.
(b) Delivery of the Series C Notes shall be made against payment of the
purchase price therefor, at the offices of Posternak, Blankstein & Lund, L.L.P.,
Boston, Massachusetts or such other location as may be mutually acceptable. Such
delivery and payment shall be made at 9:00 a.m., New York City time, on February
5, 1999 or at such other time as shall be agreed upon by the Initial Purchasers
and the Company. The time and date of such delivery and payment are herein
called the "CLOSING DATE."
(c) On the Closing Date, one or more Series C Notes in definitive form,
registered in the name of Cede & Co., as nominee of The Depository Trust Company
("DTC"), having an aggregate amount corresponding to the aggregate amount of the
Series C Notes sold pursuant to Exempt Resales to Eligible Purchasers (the
"GLOBAL NOTES") shall be delivered by the Company to the Initial Purchasers (or
as the Initial Purchasers direct), against payment by the Initial Purchasers of
the purchase price therefor, by wire transfer of same day funds, to an account
designated by the Company, provided that the Company shall give at least one
business day's prior written notice to the Initial Purchasers of the information
required to effect such wire transfer. The Global Notes shall be made available
to the Initial Purchasers for inspection not later than 9:30 am, on the business
day immediately preceding the Closing Date.
3
<PAGE> 5
4. AGREEMENTS OF THE ISSUERS. The Issuers, jointly and severally, covenant
and agree with the Initial Purchasers as follows:
(a) To advise the Initial Purchasers promptly and, if requested by
the Initial Purchasers, confirm such advice in writing, (i) of the
issuance by any state securities commission of any stop order
suspending the qualification or exemption from qualification of any
Notes for offering or sale in any jurisdiction, or the initiation of
any proceeding for such purpose by any state securities commission or
other regulatory authority and (ii) of the happening of any event that
makes any statement of a material fact made in the Offering Memorandum
untrue or that requires the making of any additions to or changes in
the Preliminary Offering Memorandum or the Offering Memorandum in order
to make the statements therein, in the light of the circumstances under
which they are made, not misleading. The Issuers shall use their
reasonable best efforts to prevent the issuance of any stop order or
order suspending the qualification or exemption of any Notes under any
state securities or Blue Sky laws and, if at any time any state
securities commission or other regulatory authority shall issue an
order suspending the qualification or exemption of any Notes or
Guarantees of Notes under any state securities or Blue Sky laws, the
Issuers shall use their reasonable best efforts to obtain the
withdrawal or lifting of such order at the earliest possible time.
(b) To furnish the Initial Purchasers, without charge, as many
copies of the Offering Memorandum, including all documents incorporated
therein by reference, and any amendments or supplements thereto, as the
Initial Purchasers may reasonably request. The Issuers consent to the
use of the Offering Memorandum, and any amendments and supplements
thereto required pursuant hereto, by the Initial Purchasers in
connection with Exempt Resales.
(c) Not to amend or supplement the Offering Memorandum prior to
the Closing Date unless the Initial Purchasers shall previously have
been advised thereof and shall not have objected thereto within a
reasonable time after being furnished a copy thereof. The Issuers shall
promptly prepare, upon the Initial Purchasers' request, any amendment
or supplement to the Offering Memorandum that may be necessary or
advisable in connection with Exempt Resales.
(d) If, after the date hereof and prior to consummation of any
Exempt Resale, any event shall occur as a result of which, in the
judgment of the Issuers or in the reasonable opinion of counsel for the
Issuers or counsel for the Initial Purchasers, it becomes necessary or
advisable to amend or supplement the Offering Memorandum in order to
make the statements therein, in the light of the circumstances when
such Offering Memorandum is delivered to an Eligible Purchaser which is
a prospective purchaser, not misleading, or if it is necessary or
advisable to amend or supplement the Offering Memorandum to comply with
applicable law, (i) to notify the Initial Purchasers and (ii) forthwith
to prepare an appropriate amendment or supplement to such Offering
Memorandum so that the statements therein as so amended or supplemented
will not, in the light of the circumstances when it is so delivered, be
misleading, or so that such Offering Memorandum will comply with
applicable law. Each Initial Purchaser agrees, severally and not
jointly, that, upon its receipt of any written notice from the Company
of the existence of any fact or the happening of any event that
requires the making of any additions to or changes in the Offering
Memorandum (or amendment or supplement thereto, as applicable) referred
to in this Section 4(d) in order that such document will not contain
any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the light of
the circumstances existing as of the date such document was delivered,
not misleading, such Initial Purchaser shall forthwith discontinue
disposition of the applicable Notes pursuant to such
4
<PAGE> 6
document until (A) such Initial Purchaser receives from the Company
copies of an amended or supplemented document that the Company states
in writing may be used by such Initial Purchaser or (B) such Initial
Purchaser is advised in writing by the Company that the use of such
document may be resumed.
(e) To cooperate with the Initial Purchasers and counsel for the
Initial Purchasers in connection with the qualification or registration
of the Series C Notes under the securities or Blue Sky laws of such
jurisdictions as the Initial Purchasers may reasonably request and to
continue such qualification in effect so long as required for the
Exempt Resales; provided, however, that none of the Issuers shall be
required in connection therewith to register or qualify as a foreign
corporation where it is not now so qualified or to take any action that
would subject it to service of process in suits or taxation, in each
case, other than as to matters and transactions relating to the
Offering Memorandum or Exempt Resales, in any jurisdiction where it is
not now so subject.
(f) Whether or not the transactions contemplated by this Agreement
are consummated or this Agreement becomes effective or is terminated,
to pay all costs, expenses, fees and taxes incident to the performance
of the obligations of the Issuers hereunder, including in connection
with: (i) the preparation, printing, filing and distribution of the
Offering Memorandum (including, without limitation, financial
statements) and all amendments and supplements thereto required
pursuant hereto, (ii) the issuance, transfer and delivery of the Notes
and the Guarantees to the Initial Purchasers, (iii) the qualification
or registration of the Notes and the Guarantees for offer and sale
under the securities or Blue Sky laws of the several states (including,
without limitation, the cost of printing and mailing a preliminary and
final Blue Sky Memorandum and the reasonable fees and disbursements of
counsel for the Initial Purchasers relating thereto), (iv) furnishing
such copies of the Offering Memorandum, and all amendments and
supplements thereto, as may be requested for use in connection with
Exempt Resales, (v) the preparation of certificates for the Notes and
the Guarantees (including, without limitation, printing and engraving
thereof), (vi) the fees, disbursements and expenses of the Issuers'
counsel and accountants, (vii) all fees and expenses (including fees
and expenses of counsel) of the Company in connection with the approval
of the Notes by DTC for "book-entry" transfer, (viii) rating the Notes
by rating agencies, (ix) the reasonable fees and expenses of the
Trustee and its counsel, (x) the performance by the Issuers of their
other obligations under this Agreement and the other Operative
Documents and (xi) "roadshow" travel and other expenses incurred by the
Company in connection with the marketing and sale of the Notes.
(g) To use the proceeds from the sale of the Series C Notes in the
manner described in the Offering Memorandum under the caption " The
Transactions; Use of Proceeds."
(h) Not to voluntarily claim, and to resist actively any attempts
to claim, the benefit of any usury laws against the holders of any
Notes.
(i) To do and perform all things required to be done and performed
under this Agreement by them prior to or after the Closing Date and to
satisfy all conditions precedent on their part to the delivery of the
Series C Notes and the Guarantees.
(j) Not to sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any security (as defined in the Act)
that would be integrated with the sale of the Series C Notes in a
manner that would require the registration under the Act of the sale to
the Initial Purchasers or
5
<PAGE> 7
the Eligible Purchasers of the Series C Notes or to take any other
action that would result in the Exempt Resales not being exempt from
registration under the Act.
(k) For so long as any of the Notes remain outstanding and during
any period in which the Issuers are not subject to Section 13 or 15(d)
of the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT"), to make available to any holder or beneficial owner of Series C
Notes in connection with any sale thereof and any prospective purchaser
of such Notes from such holder or beneficial owner, the information
required by Rule 144A(d)(4) under the Act.
(l) To comply with all of their agreements set forth in the
Registration Rights Agreement and the Registration Rights Agreement
Supplement and all agreements set forth in the representation letters
of the Company to DTC relating to the approval of the Notes by DTC for
"book-entry" transfer.
(m) To use their reasonable best efforts to effect the inclusion
of the Notes in PORTAL and to obtain approval of the Series C Notes by
DTC for "book-entry" transfer.
(n) During a period of five years following the Closing Date, to
deliver without charge to the Initial Purchasers, as they may
reasonably request, promptly upon their becoming available, copies of
(i) all reports or other publicly available information that the
Company shall mail or otherwise make available to its public security
holders and (ii) all reports, financial statements and proxy or
information statements filed by the Company with the Commission or any
national securities exchange and such other publicly available
information concerning the Company or any of its Subsidiaries,
including without limitation, press releases.
(o) Prior to the Closing Date, to furnish to the Initial
Purchasers, as soon as they have been prepared in the ordinary course
by the Issuers, copies of any unaudited interim financial statements
for any period subsequent to the periods covered by the financial
statements appearing in the Offering Memorandum.
(p) Not to 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 any security of the
Issuers to facilitate the sale or resale of the Notes. Except as
permitted by the Act, none of the Issuers will distribute any (i)
preliminary offering memorandum, (ii) offering memorandum, including,
without limitation, the Offering Memorandum, or (iii) other offering
material in connection with the offering and sale of the Notes.
(q) To use their best efforts to do and perform all things
required or necessary to be done and performed under this Agreement
prior to the Closing Date and to satisfy all conditions precedent to
the delivery of the Series C Notes and the Guarantees.
5. REPRESENTATIONS AND WARRANTIES. (a) The Issuers, jointly and severally,
represent and warrant to the Initial Purchasers that:
(i) All of the representations and warranties of Holmes and Moriarty made
in the Merger Agreement are true and correct in all material respects as if made
on and as of the date hereof and the Closing Date.
(ii) The Offering Memorandum as of its date and (as amended or supplemented,
if applicable) as of the Closing Date does not and will not, and any supplement
or amendment to them will not, contain any
6
<PAGE> 8
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading,
except that the representations and warranties contained in this paragraph shall
not apply to statements in or omissions from the Offering Memorandum (or any
supplement or amendment thereto) made in reliance upon and in conformity with
information relating to either Initial Purchaser furnished to the Company in
writing by such Initial Purchaser expressly for use therein. No stop order
preventing the use of the Offering Memorandum, or any amendment or supplement
thereto, or any order asserting that any of the transactions contemplated by
this Agreement are subject to the registration requirements of the Act, has been
issued.
(iii) Each of the Issuers (A) has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its jurisdiction of
incorporation, (B) has all requisite corporate power and authority to carry on
its business as it is currently being conducted and as described in the Offering
Memorandum and to own, lease and operate its properties, and (C) is duly
qualified and in good standing as a foreign corporation, authorized to do
business in each jurisdiction in which the nature of its business or its
ownership or leasing of property requires such qualification, except where the
failure to be so qualified could not reasonably be expected to (x) result,
individually or in the aggregate, in a material adverse effect on the
properties, business, results of operations, condition (financial or otherwise),
affairs or prospects of the Issuers, taken as a whole, (y) interfere with or
adversely affect the issuance or marketability of the Notes or the issuance of
the Guarantees pursuant hereto or (z) in any manner draw into question the
validity of this Agreement or any other Operative Document or the transactions
described in the Offering Memorandum under the caption " The Transactions; Use
of Proceeds" (any of the events set forth in clauses (x), (y) or (z), a
"MATERIAL ADVERSE EFFECT").
(iv) The Company has no Subsidiaries other than the Guarantors and each of
the entities listed on EXHIBIT D hereto;
(v) All of the outstanding capital stock of each of the Issuers is owned
directly or indirectly by the Company or another Subsidiary of the Company, free
and clear of any security interest, claim, lien, limitation on voting rights or
encumbrance, except for any such security interest, claim, lien, limitation on
voting rights or encumbrance pursuant to the Credit Facility; and all such
securities have been duly authorized, validly issued, and are fully paid and
nonassessable and were not issued in violation of any preemptive or similar
rights.
(vi) There are not currently any outstanding subscriptions, rights,
warrants, calls, commitments of sale or options to acquire, or instruments
convertible into or exchangeable for, any capital stock or other equity interest
of the Company's Subsidiaries.
(vii) When the Series C Notes and the Guarantees are issued and delivered
pursuant to this Agreement, no Series C Note or Guarantee will be of the same
class (within the meaning of Rule 144A under the Act) as securities of the
Company or of any of the Guarantors that are listed on a national securities
exchange registered under Section 6 of the Exchange Act or that are quoted in a
United States automated inter-dealer quotation system.
(viii) Each of the Issuers has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Agreement and each of
the other Operative Documents to which it is a party and to consummate the
transactions contemplated hereby and thereby, including, without limitation, the
corporate power and authority to issue, sell and deliver the Notes (in the case
of the
7
<PAGE> 9
Company) and to issue and deliver the Guarantees (in the case of the Guarantors)
as provided herein and therein.
(ix) This Agreement has been duly and validly authorized, executed and
delivered by each of the Company and the Holmes Guarantors and is the legal,
valid and binding agreement of each of the Company and the Holmes Guarantors,
enforceable against each of them in accordance with its terms, subject to (a)
applicable bankruptcy, insolvency, moratorium, fraudulent conveyance,
reorganization or similar laws affecting the rights of creditors generally and
to general principles of equity and (b) securities laws prohibiting or limiting
the availability of, and public policy against, indemnification or contribution.
When the Merger (as such term is defined in the Offering Memorandum) is
consummated, the Purchase Agreement Supplement will be duly authorized by the
Rival Guarantors and will be duly executed and delivered by the Rival
Guarantors.
(x) The Indenture (i) has been duly and validly authorized by each of the
Company and the Holmes Guarantors and (ii) as of the consummation of the Merger
(as such term is defined in the Offering Memorandum) will have been duly and
validly authorized by each Rival Guarantor and, when duly executed and delivered
by each of the Issuers, assuming the due authorization, execution and delivery
thereof by the Trustee, will be the legal, valid and binding obligation of each
of the Issuers, enforceable against each of them in accordance with its terms,
subject to applicable bankruptcy, insolvency, moratorium, fraudulent conveyance,
reorganization or similar laws affecting the rights of creditors generally and
subject to general principles of equity. On the Closing Date, the Indenture will
conform in all material respects to the requirements of the Trust Indenture Act
of 1939, as amended (the "TRUST INDENTURE ACT"), and the rules and regulations
of the Commission applicable to an indenture which is qualified thereunder. The
Offering Memorandum contains a summary of the material terms of the Indenture,
which is accurate in all material respects.
(xi) The Registration Rights Agreement (i) has been duly and validly
authorized by each of the Company and the Holmes Guarantors and (ii) as of the
consummation of the Merger (as such term is defined in the Offering Memorandum)
will have been duly and validly authorized by each Rival Guarantor and, when
duly executed and delivered by each of the Issuers, will be the legal, valid and
binding obligation of each of the Issuers, enforceable against each of them in
accordance with its terms, subject to applicable bankruptcy, insolvency,
moratorium, fraudulent conveyance, reorganization or similar laws affecting the
rights of creditors generally and subject to general principles of equity. When
the Merger (as such term is defined in the Offering Memorandum) is consummated,
the Registration Rights Agreement Supplement will be duly authorized by the
Rival Guarantors and will be duly executed and delivered by the Rival
Guarantors. The Offering Memorandum contains a summary of the material terms of
the Registration Rights Agreement, which is accurate in all material respects.
(xii) The Credit Facility (i) has been duly and validly authorized by each of
the Company and its Subsidiaries party thereto and (ii) as of the consummation
of the Merger (as such term is defined in the Offering Memorandum) will have
been duly and validly authorized by each of The Rival Company and its
Subsidiaries and, when duly executed and delivered by each of the Issuers, will
be the legal, valid and binding obligation of each of the Issuers, enforceable
against each of them in accordance with its terms, subject to (A) applicable
bankruptcy, insolvency, moratorium, fraudulent conveyance, reorganization or
similar laws affecting the rights of creditors generally and subject to general
principles of equity and (B) securities laws prohibiting or limiting the
availability of, and public policy against, indemnification or contribution. The
Offering Memorandum contains a summary of the material terms of the Credit
Facility, which is accurate in all material respects.
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<PAGE> 10
(xiii) The Merger Agreement has been duly and validly authorized, executed and
delivered by the each of the Issuers (to the extent that each is a party
thereto) and is the legal, valid and binding obligation of each of the Issuers
(to the extent that each is a party thereto), enforceable against each of them
in accordance with its terms, subject to applicable bankruptcy, insolvency,
moratorium, fraudulent conveyance, reorganization or similar laws affecting the
rights of creditors generally and subject to general principles of equity.
(xiv) The Series C Notes have been duly and validly authorized by the Company
for issuance and sale to the Initial Purchasers pursuant to this Agreement and,
when issued and authenticated in accordance with the terms of the Indenture and
delivered against payment therefor in accordance with the terms hereof and
thereof, will be the legal, valid and binding obligations of the Company,
enforceable against it in accordance with their terms and entitled to the
benefits of the Indenture, subject to applicable bankruptcy, insolvency,
moratorium, fraudulent conveyance, reorganization or similar laws affecting the
rights of creditors generally and subject to general principles of equity. The
Offering Memorandum contains a summary of the material terms of the Notes, which
is accurate in all material respects.
(xv) The Series D Notes have been duly and validly authorized for issuance
by the Company and, when issued and authenticated in accordance with the terms
of the Exchange Offer and the Indenture, will be the legal, valid and binding
obligations of the Company, enforceable against it in accordance with their
terms and entitled to the benefits of the Indenture, subject to applicable
bankruptcy, insolvency, moratorium, fraudulent conveyance, reorganization or
similar laws affecting the rights of creditors generally and subject to general
principles of equity.
(xvi) The Guarantees of the Series C Notes (i) have been duly and validly
authorized by each of the Holmes Guarantors and (ii) as of the consummation of
the Merger (as such term is defined in the Offering Memorandum) will have been
duly and validly authorized by each Rival Guarantor and, when executed and
delivered in accordance with the terms of the Indenture and when the Series C
Notes have been issued and authenticated in accordance with the terms of the
Indenture and delivered against payment therefor in accordance with the terms
hereof and thereof, will be the legal, valid and binding obligations of each of
the Guarantors enforceable against each of them in accordance with their terms
and entitled to the benefits of the Indenture, subject to applicable bankruptcy,
insolvency, moratorium, fraudulent conveyance, reorganization or similar laws
affecting the rights of creditors generally and subject to general principles of
equity. The Offering Memorandum contains a summary of the material terms of the
Guarantees, which is accurate in all material respects.
(xvii) The Guarantees of the Series D Notes (i) have been duly and validly
authorized by each of the Holmes Guarantors and (ii) as of the consummation of
the Merger (as such term is defined in the Offering Memorandum) will have been
duly and validly authorized by each Rival Guarantor and, when executed and
delivered in accordance with the terms of the Indenture and when the Series D
Notes have been issued and authenticated in accordance with the terms of the
Exchange Offer and the Indenture, will be the legal, valid and binding
obligations of each of the Guarantors, enforceable against each of them in
accordance with their terms and entitled to the benefits of the Indenture,
subject to applicable bankruptcy, insolvency, moratorium, fraudulent conveyance,
reorganization or similar laws affecting the rights of creditors generally and
subject to general principles of equity.
(xviii) The statistical and market-related data included in the Offering
Memorandum are based on or derived from sources which the Company believes to be
reliable in all material respects.
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<PAGE> 11
(xix) Each of the Issuers is not and, after giving effect to the Transactions
(as such term is defined in the Offering Memorandum) as a whole, will not be,
(A) in violation of its charter or bylaws, (B) in default in the performance of
any bond, debenture, note, indenture, mortgage, deed of trust or other agreement
or instrument to which it is a party or by which it is bound or to which any of
its properties is subject, which singly or in the aggregate, could reasonably be
expected to have a Material Adverse Effect, or (C) in violation of any local,
state, federal or foreign law, statute, ordinance, rule, regulation,
requirement, judgment or court decree (including, without limitation,
environmental laws, statutes, ordinances, rules, regulations, judgments or court
decrees) applicable to it or any of its Subsidiaries or any of its or their
assets or properties (whether owned or leased), which singly or in the
aggregate, could reasonably be expected to have a Material Adverse Effect. To
the best knowledge of the Issuers, there exists no condition that, with notice,
the passage of time or otherwise, would constitute a default under any such
document or instrument.
(xx) None of (A) the execution, delivery or performance by the Issuers of
this Agreement or any of the other Operative Documents to which it is a party,
(B) the issuance and sale of the Notes and the issuance of the Guarantees and
(C) consummation by the Company of the transactions described in the Offering
Memorandum under the caption "The Transactions; Use of Proceeds," violates,
conflicts with or constitutes a breach of any of the terms or provisions of, or,
after giving effect to the Transactions (as such term is defined in the Offering
Memorandum) taken as a whole, will violate, conflict with or constitute a breach
of any of the terms or provisions of, or a default under (or an event that with
notice or the lapse of time, or both, would constitute a default), or require
consent under, or result in the imposition of a lien or encumbrance on any
properties of the Company or any of its Subsidiaries, or an acceleration of any
indebtedness of the Company or any of its Subsidiaries pursuant to, (1) the
charter or bylaws of the Company or any of its Subsidiaries, (2) any bond,
debenture, note, indenture, mortgage, deed of trust or other agreement or
instrument to which the Company or any of its Subsidiaries is a party or by
which any of them or their property is or may be bound, (3) any statute, rule or
regulation applicable to the Company or any of its Subsidiaries or any of their
assets or properties or (4) any judgment, order or decree of any court or
governmental agency or authority having jurisdiction over the Company or any of
its Subsidiaries or any of their assets or properties. No consent, approval,
authorization or order of, or filing, registration, qualification, license or
permit of or with, (A) any court or governmental agency, body or administrative
agency or (B) any other person is required for (1) the execution, delivery and
performance by the Issuers of this Agreement or any of the other Operative
Documents to which it is a party, (2) the consummation of the Transactions (as
such term is defined in the Offering Memorandum) or (3) the issuance and sale of
the Notes and the issuance of the Guarantees and the transactions contemplated
hereby and thereby, except such as have been or will be obtained and made on or
prior to the Closing Date (or, in the case of the Registration Rights Agreement,
will be obtained and made under the Act, the Trust Indenture Act, and state
securities or Blue Sky laws and regulations).
(xxi) There is and, after giving effect to the Transactions (as such term is
defined in the Offering Memorandum), except as could not reasonably be expected
to result in a Material Adverse Effect, will be (A) no action, suit,
investigation or proceeding before or by any court, arbitrator or governmental
agency, body or official, domestic or foreign, now pending or, to the best
knowledge of the Issuers, threatened or contemplated to which the Company or any
of its Subsidiaries is or may be a party or to which the business or property of
the Company or any of its Subsidiaries, is or, after giving effect to the
Transactions (as such term is defined in the Offering Memorandum) may be
subject, (B) no statute, rule, regulation or order that has been enacted,
adopted or issued by any governmental agency or that has been proposed by any
governmental body and (C) no injunction, restraining order or order of any
nature by a federal or state court or foreign court of competent jurisdiction to
which the Company or any of its
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<PAGE> 12
Subsidiaries is or may be subject or to which the business, assets or property
of the Company or any of its Subsidiaries is or may be subject, that, in the
case of clauses (A), (B) and (C) above, (1) is required to be disclosed in the
Offering Memorandum and is not so disclosed or (2) could reasonably be expected
to result in a Material Adverse Effect.
(xxii) No action has been taken and no statute, rule, regulation or order has
been enacted, adopted or issued by any governmental agency that prevents the
issuance of the Notes or the Guarantees or prevents or suspends the use of the
Offering Memorandum; no injunction, restraining order or order of any nature by
a federal or state court of competent jurisdiction has been issued that prevents
the issuance of the Notes or the Guarantees or prevents or suspends the sale of
the Notes in any jurisdiction referred to in Section 4(e) hereof; and every
request of any securities authority or agency of any jurisdiction for additional
information has been complied with in all material respects.
(xxiii) The Company has delivered to the Initial Purchasers or their counsel
true and correct copies of all documents and agreements related to the
Transactions (as such term is defined in the Offering Memorandum) and the Credit
Facility, including all amendments, alterations, modifications or waivers
thereto and all exhibits or schedules thereto.
(xxiv) There is and, after giving effect to the Transactions (as such term is
defined in the Offering Memorandum), except as could not be reasonably expected
to have a Material Adverse Effect, will be (A) no significant unfair labor
practice complaint pending against the Company or any of its Subsidiaries nor,
to the best knowledge of the Issuers, threatened against any of them, before the
National Labor Relations Board, any state or local labor relations board or any
foreign labor relations board, and no significant grievance or significant
arbitration proceeding arising out of or under any collective bargaining
agreement is so pending against the Company or any of its Subsidiaries or, to
the best knowledge of the Issuers, threatened against any of them, (B) no
significant strike, labor dispute, slowdown or stoppage pending against the
Company or any of its Subsidiaries nor, to the best knowledge of the Issuers,
threatened against the Company or any of its Subsidiaries and (C) to the best
knowledge of the Issuers, no union representation question existing with respect
to the employees of the Company or any of its Subsidiaries. To the best
knowledge of the Issuers, no collective bargaining organizing activities are
taking place with respect to the Company or any of its Subsidiaries, except for
ongoing union activity at Rival's facility in Flowood, Mississippi. None of the
Company or any of its Subsidiaries has violated (A) any federal, state or local
law or foreign law relating to discrimination in hiring, promotion or pay of
employees, (B) any applicable wage or hour laws or (C) any provision of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or the
rules and regulations thereunder, except those violations that could not
reasonably be expected to have a Material Adverse Effect.
(xxv) None of the Company or any of its Subsidiaries, other than Dongguan
Huixin Electrical Products, Co., Ltd., a China corporation, and Dongguan Raider
Motor Corporation Ltd., a China corporation, has violated any foreign, federal,
state or local law or regulation relating to the protection of human health and
safety, the environment or hazardous or toxic substances or wastes, pollutants
or contaminants ("ENVIRONMENTAL LAWS"), which violation could reasonably be
expected to have a Material Adverse Effect. To the Company's best knowledge,
neither Dongguan Huixin Electrical Products, Co., Ltd. nor Dongguan Raider Motor
Corporation Ltd. has violated any Environmental Laws, which violation could
reasonably be expected to have a Material Adverse Effect.
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(xxvi) There is no alleged liability, nor to the best knowledge of the
Issuers, any reasonable basis for liability (including, without limitation,
alleged or potential liability for investigatory costs, cleanup costs,
governmental response costs, natural resource damages, property damages,
personal injuries or penalties) of the Company or any of its Subsidiaries
arising out of, based on or resulting from (A) the presence or release into the
environment of any Hazardous Material (as defined) at any location, whether or
not owned by the Company or such Subsidiary, as the case may be, or (B) any
violation or alleged violation of any Environmental Law, which alleged or
potential liability is required to be disclosed in the Offering Memorandum,
other than as disclosed therein, or could reasonably be expected to have a
Material Adverse Effect. The term "HAZARDOUS MATERIAL" means (A) any "hazardous
substance" as defined by the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended, (B) any "hazardous waste" as defined by
the Resource Conservation and Recovery Act, as amended, (C) any petroleum or
petroleum product, (D) any polychlorinated biphenyl and (E) any pollutant or
contaminant or hazardous, dangerous or toxic chemical, material, waste or
substance regulated under or within the meaning of any other law relating to
protection of human health or the environment or imposing liability or standards
of conduct concerning any such chemical material, waste or substance.
(xxvii) Each of the Company and its Subsidiaries has and, after giving effect
to the Transactions (as such term is defined in the Offering Memorandum), will
have such permits, licenses, franchises and authorizations of governmental or
regulatory authorities ("PERMITS"), including, without limitation, under any
applicable Environmental Laws, as are necessary to own, lease and operate their
respective properties and to conduct their businesses except where the failure
to have such permits could not reasonably be expected to result in a Material
Adverse Effect; each of the Company and its Subsidiaries has fulfilled and
performed all of its obligations with respect to such permits and no event has
occurred which allows, or after notice or lapse of time would allow, revocation
or termination thereof or results in any other material impairment of the rights
of the holder of any such permit; and, except as described in the Offering
Memorandum, such permits contain no restrictions that are materially burdensome
to the Company or such Subsidiary, as the case may be.
(xxviii) Each of the Company and its Subsidiaries has and, after giving effect
to the Transactions (as such term is defined in the Offering Memorandum) will
have (A) good and marketable title to all of the properties and assets described
in the Offering Memorandum as owned by it, free and clear of all liens, charges,
encumbrances and restrictions (except for Permitted Liens (as defined in the
Indenture) and taxes not yet payable), (B) peaceful and undisturbed possession
under all material leases to which any of them is a party as lessee and each of
which lease is valid and binding and no default exists thereunder, except for
defaults that could not reasonably be expected to have a Material Adverse
Effect, (C) all licenses, certificates, permits, authorizations, approvals,
franchises and other rights from, and has made all declarations and filings
with, all federal, state and local authorities, all self-regulatory authorities
and all courts and other tribunals (each, an "AUTHORIZATION") necessary to
engage in the business conducted by any of them in the manner described in the
Offering Memorandum, except as could not reasonably be expected to have a
Material Adverse Effect and (D) no reason to believe that any governmental body
or agency is considering limiting, suspending or revoking any such
Authorization, except as could not reasonably be expected to have a Material
Adverse Effect. All such Authorizations are and, after giving effect to the
Recapitalization, will be valid and in full force and effect and each of the
Company and its Subsidiaries is in compliance in all material respects with the
terms and conditions of all such Authorizations and with the rules and
regulations of the regulatory authorities having jurisdiction with respect
thereto. All material leases to which the Company or any of its Subsidiaries is
a party are valid and binding and no default by the Company or such Subsidiary,
as the case may be, has occurred and is continuing thereunder and, to the best
knowledge of the Issuers, no material defaults by the landlord are
12
<PAGE> 14
existing under any such lease, except those defaults that could not reasonably
be expected to have a Material Adverse Effect.
(xxix) Each of the Company and its Subsidiaries owns, possesses or has the
right to employ all patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, software, systems or procedures),
trademarks, service marks and trade names, inventions, computer programs,
technical data and information (collectively, the "INTELLECTUAL PROPERTY")
presently employed by it in connection with the businesses now operated by it or
that are proposed to be operated by it free and clear of and without violating
any right, claimed right, charge, encumbrance, pledge, security interest,
restriction or lien of any kind of any other person (except for Permitted Liens
(as such term is defined in the Indenture)), and none of the Company or any of
its Subsidiaries has received any notice of infringement of or conflict with
asserted rights of others with respect to any of the foregoing, except, in each
case, for violations or notices that could not reasonably be expected to have a
Material Adverse Effect. The use of the Intellectual Property in connection with
the business and operations of the Company or any of its Subsidiaries does not
infringe on the rights of any person, except as could not reasonably be expected
to have a Material Adverse Effect.
(xxx) All material tax returns required to be filed by the Company or any of
its Subsidiaries in all jurisdictions have been so filed. All material taxes,
including withholding taxes, penalties and interest, assessments, fees and other
charges due or claimed to be due from such entities or that are due and payable
have been paid, other than those being contested in good faith and for which
adequate reserves have been provided or those currently payable without penalty
or interest. To the knowledge of the Issuers, there are no material proposed
additional tax assessments against the Company or any of its Subsidiaries, or
the assets or property of the Company or any of its Subsidiaries, except those
tax assessments for which adequate reserves have been established.
(xxxi) None of the Company or any of its Subsidiaries is and, after giving
effect to the Transactions will be an "investment company" or a company
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended (the "INVESTMENT COMPANY ACT").
(xxxii) There are no holders of securities of the Company or any of its
Subsidiaries who, by reason of the execution by the Issuers of this Agreement or
any other Operative Document or the consummation by the Issuers of the
transactions contemplated hereby and thereby, have the right to request or
demand that the Company or any of its Subsidiaries register under the Act or
analogous foreign laws and regulations securities held by them, other than
pursuant to the Registration Rights Agreement, and other than holders of common
stock of the Company who have been or will be granted certain registration
rights with respect to such common stock in connection with the Transactions and
the 1997 Transactions (as such term is defined in the Offering Memorandum).
(xxxiii) Each of the Company and its Subsidiaries maintains a system of internal
accounting controls sufficient to provide reasonable assurance that: (A)
transactions are executed in accordance with management's general or specific
authorizations; (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 thereto.
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(xxxiv) Each of the Company and its Subsidiaries maintains insurance covering
its properties, operations, personnel and businesses, insuring against such
losses and risks as are consistent with industry practice to protect the Company
and its Subsidiaries and their respective businesses. None of the Company or any
of its Subsidiaries has received notice from any insurer or agent of such
insurer that substantial capital improvements or other expenditures will have to
be made in order to continue such insurance.
(xxxv) None of the Company or any of its Subsidiaries has (A) taken, 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 any security of
the Company or any of its Subsidiaries to facilitate the sale or resale of the
Notes or (B) (1) sold, bid for, purchased or paid any person any compensation
for soliciting purchases of the Notes (other than the Initial Purchasers) or (2)
paid or agreed to pay to any person any compensation for soliciting another to
purchase any other securities of the Company or any of its Subsidiaries (other
than the Initial Purchasers).
(xxxvi) No registration under the Act of the Series C Notes is required for the
sale of the Series C Notes to the Initial Purchasers as contemplated hereby or
for the Exempt Resales assuming (A) that the purchasers who buy the Series C
Notes in the Exempt Resales are Eligible Purchasers and (B) the accuracy of the
Initial Purchasers' representations regarding the absence of general
solicitation in connection with the sale of Series C Notes to the Initial
Purchasers and the Exempt Resales contained herein. No form of general
solicitation or general advertising (as defined in Regulation D under the Act)
was used by the Company, any of the Guarantors or any of their respective
representatives (other than the Initial Purchasers, as to which the Issuers make
no representation or warranty) in connection with the offer and sale of any of
the Series C Notes or in connection with Exempt Resales, including, but not
limited to, articles, notices or other communications published in any
newspaper, magazine, or similar medium or broadcast over television or radio, or
any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising. No securities of the same class as the
Notes or the Guarantees have been issued and sold by the Company or any of its
Subsidiaries within the six-month period immediately prior to the date hereof.
(xxxvii) The execution and delivery of this Agreement, the other Operative
Documents and the sale of the Series C Notes to be purchased by Eligible
Purchasers will not involve any prohibited transaction within the meaning of
Section 406 of ERISA or Section 4975 of the Internal Revenue Code of 1986. The
representation made by the Issuers in the preceding sentence is made in reliance
upon and subject to the accuracy of, and compliance with, the representations
and covenants made or deemed made by Eligible Purchasers as set forth in the
Offering Memorandum under the caption "Notice to Investors.
(xxxviii) The Offering Memorandum, as of its date, and each amendment or
supplement thereto, as of its date, contains the information specified in, and
meets the requirements of, Rule 144A(d)(4) under the Act.
(xxxix) Prior to the effectiveness of any Registration Statement, the Indenture
is not required to be qualified under the Trust Indenture Act.
(xl) None of the Issuers or any of their respective affiliates or any person
acting on its or their behalf (other than the Initial Purchasers, as to whom the
Issuers make no representation) has engaged or will engage in any directed
selling efforts within the meaning of Regulation S with respect to the Series C
Notes or the Guarantees.
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(xli) The Series C Notes offered and sold in reliance on Regulation S have
been and will be offered and sold by the Company only in offshore transactions .
(xlii) The sale of the Series C Notes pursuant to Regulation S is not part of
a plan or scheme by the Company to evade the registration provisions of the Act.
(xliii) The Issuers and their respective affiliates and all persons acting on
their behalf (other than the Initial Purchasers, as to whom the Issuers make no
representation) have complied with and will comply with the offering
restrictions requirements of Regulation S in connection with the offering of the
Series C Notes outside the United States and, in connection therewith, the
Offering Memorandum contains or will contain the disclosure required by Rule
902(h).
(xliv) The Series C Notes sold in reliance on Regulation S will be represented
upon issuance by a temporary global securities that may not be exchanged for
definitive securities until the expiration of the 40-day distribution compliance
period referred to in Rule 903(c)(3) of the Act and only upon certification of
beneficial ownership of such Series C Notes by non-U.S. persons or U.S. persons
who purchased such Series C Notes in transactions that were exempt from the
registration requirements of the Act.
(xlv) Subsequent to the respective dates as of which information is given in
the Offering Memorandum and up to the Closing Date, except as set forth in the
Offering Memorandum, (A) none of the Company or any of its Subsidiaries has
incurred any liabilities or obligations, direct or contingent, which are or,
after giving effect to the Transactions (as such term is defined in the Offering
Memorandum), will be material, individually or in the aggregate, to the Company
and its Subsidiaries, taken as a whole, nor entered into any transaction not in
the ordinary course of business, (B) there has not been any change or
development which, singly or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect 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.
(xlvi) None of the execution, delivery and performance of this Agreement, the
Purchase Agreement Supplement, the issuance and sale of the Notes, the issuance
of the Guarantees, the application of the proceeds from the issuance and sale of
the Notes and the consummation of the transactions contemplated thereby as set
forth in the Offering Memorandum, will violate Regulations T, U or X promulgated
by the Board of Governors of the Federal Reserve System or analogous foreign
laws and regulations.
(xlvii) The accountants who have certified or will certify the financial
statements included or to be included as part of the Offering Memorandum are
independent accountants as required by the Act. The historical financial
statements, together with related schedules and notes thereto, comply as to form
in all material respects with the requirements applicable to registration
statements on Form S-1 under the Act and present fairly in all material respects
the financial position and results of operations of the respective entities
issuing such financial statements at the dates and for the periods indicated.
Such financial statements have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis throughout the
periods presented, except as to the omission of footnotes from unaudited
financial statements. The pro forma financial statements included in the
Offering Memorandum have been prepared on a basis consistent with such
historical statements of Holmes except for the pro forma adjustments specified
therein, and give effect to assumptions made on a reasonable basis and present
fairly in all material respects the historical and proposed transactions
contemplated by this Agreement and the other Operative Documents; and such pro
forma financial statements comply as to form in all material respects with the
requirements applicable to pro forma financial statements included in
15
<PAGE> 17
registration statements on Form S-1 under the Act, except as expressly stated
therein. The other financial and statistical information and data included in
the Offering Memorandum derived from the historical and pro forma financial
statements, are accurately presented in all material respects and prepared on a
basis consistent with the financial statements, historical and pro forma,
included in the Offering Memorandum and the books and records of the Company and
its Subsidiaries.
(xlviii) None of the Issuers intends to, nor does it believe that it will, incur
debts beyond its ability to pay such debts as they mature. The present fair
saleable value of the assets of each of the Issuers exceeds the amount that will
be required to be paid on or in respect of its existing debts and other
liabilities (including contingent liabilities) as they become absolute and
matured. The assets of each of the Issuers do not constitute unreasonably small
capital to carry out its business as conducted or as proposed to be conducted.
Upon the issuance of the Notes and consummation of the Transactions (as such
term is defined in the Offering Memorandum), the present fair saleable value of
the assets of each of the Issuers will exceed the amount that will be required
to be paid on or in respect of its existing debts and other liabilities
(including contingent liabilities) as they become absolute and matured. Upon the
issuance of the Notes and the consummation of the Transactions (as such term is
defined in the Offering Memorandum), the assets of each of the Issuers will not
constitute unreasonably small capital to carry out its business as now
conducted, including the capital needs of each of the Issuers, taking into
account the projected capital requirements and capital availability. In
computing the amount of any such contingent liabilities at any time, it is
intended that such liabilities will be computed at the amount that, in light of
all the facts and circumstances existing at such time, represents that amount
that can reasonably be expected to become an actual or matured liability.
(xlix) Except pursuant to this Agreement, there are no contracts, agreements
or understandings between the Company and its Subsidiaries and any other person
that would give rise to a valid claim against the Company or any of its
Subsidiaries or the Initial Purchasers for a brokerage commission, finder's fee
or like payment in connection with the issuance, purchase and sale of the Notes
or the issuance of the Guarantees.
(l) There exist no conditions that would constitute a default (or an event
which with notice or the lapse of time, or both, would constitute a default)
under any of the Operative Documents.
(li) Each certificate signed by any officer of the Issuers and delivered to
the Initial Purchasers or counsel for the Initial Purchasers shall be deemed to
be a representation and warranty by the Issuers, as the case may be, to the
Initial Purchasers as to the matters covered thereby.
The Issuers acknowledge that the Initial Purchasers and, for purposes
of the opinions to be delivered to the Initial Purchasers pursuant to Section 8
hereof, counsel for the Issuers and counsel for the Initial Purchasers, will
rely upon the accuracy and truth of the foregoing representations and hereby
consent to such reliance.
(b) Each of the Initial Purchasers, severally and not jointly, represents,
warrants and covenants to the Company and agrees that:
(i) Such Initial Purchaser is a QIB, with such knowledge and experience in
financial and business matters as are necessary in order to evaluate the merits
and risks of an investment in the Series C Notes.
(ii) Such Initial Purchaser (A) is not acquiring the Series C Notes with a
view to any distribution thereof or with any present intention of offering or
selling any of the Series C Notes in a fashion that
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<PAGE> 18
would violate the Act or the securities laws of any state of the United States
or any other applicable jurisdiction and (B) will be reoffering and reselling
the Series C Notes only to QIBs in reliance on the exemption from the
registration requirements of the Act provided by Rule 144A and in offshore
transactions in reliance upon Regulation S under the Act.
(iii) No form of general solicitation or general advertising (within the
meaning of Regulation D under the Act) has been or will be used by such Initial
Purchaser or any of its representatives in connection with the offer and sale of
any of the Series C Notes, including, but not limited to, articles, notices or
other communications published in any newspaper, magazine, or similar medium or
broadcast over television or radio, or any seminar or meeting whose attendees
have been invited by any general solicitation or general advertising.
(iv) Each of the Initial Purchasers agrees that, in connection with the
Exempt Resales, it will solicit offers to buy the Series C Notes only from, and
will offer to sell the Series C Notes only to, Eligible Purchasers. Each of the
Initial Purchasers further (A) agrees that it will offer to sell the Series C
Notes only to, and will solicit offers to buy the Series C Notes only from (1)
Eligible Purchasers that the Initial Purchasers reasonably believes are QIBs and
(2) Reg S Investors, (B) acknowledges and agrees that, in the case of such QIBs
and such Reg S Investors, such Series C Notes will not have been registered
under the Act and may be resold, pledged or otherwise transferred only (x)(I) to
a person whom the seller reasonably believes is a QIB purchasing for its own
account or for the account of a QIB in a transaction meeting the requirements of
Rule 144A, (II) in an offshore transaction (as defined in Rule 902 under the
Act) meeting the requirements of Rule 904 under the Act, (III) in a transaction
meeting the requirements of Rule 144 under the Act, (IV) to an Accredited
Investor that, prior to such transfer, furnishes the Trustee a signed letter
containing certain representations and agreements relating to the registration
of transfer of such Series C Notes and, if such transfer is in respect of an
aggregate principal amount of Series C Notes less than $250,000, an opinion of
counsel acceptable to the Company that such transfer is in compliance with the
Act or (V) in accordance with another exemption from the registration
requirements of the Act (and based upon an opinion of counsel if the Company so
requests), (y) to the Company or any of its Subsidiaries, (z) pursuant to an
effective registration statement under the Act and, in each case, in accordance
with any applicable securities laws of any state of the United States or any
other applicable jurisdiction and (C) acknowledges that it will, and will notify
each subsequent holder that it is required to, notify any purchaser of the
security evidenced thereby of the resale restrictions set forth in (B) above.
(v) Such Initial Purchaser agrees that it has offered the Series C Notes
and will offer and sell the Series C Notes (A) as part of its distribution at
any time and (B) otherwise until 40 days after the later of the commencement of
the offering of the Series C Notes pursuant hereto and the Closing Date, only in
accordance with Rule 903 of Regulation S or another exemption from the
registration requirements of the Act. Such Initial Purchaser agrees that, during
such 40-day restricted period, it will not cause any advertisement with respect
to the Series C Notes (including any "tombstone" advertisement") to be published
in any newspaper or periodical or posted in any public place and will not issue
any circular relating to the Series C Notes, except such advertisements as are
permitted by and include the statements required by Regulation S.
(vi) Such Initial Purchaser agrees that it has not offered or sold and will
not offer or sell the Series C Notes sold pursuant hereto in reliance on
Regulation S (A) as part of its distribution at any time and (B) otherwise until
40 days after the later of the commencement of the offering of the Series C
Notes pursuant hereto and the Closing Date, to a U.S. person (as defined in Rule
902 under the Act) or for the account or benefit of a U.S. person (other than a
distributor (as defined in Rule 902 under the Act)).
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<PAGE> 19
(vii) Such Initial Purchaser agrees that, at or prior to confirmation of a
sale of Series C Notes by it to any distributor, dealer or person receiving a
selling concession, fee or other remuneration during the 40-day distribution
compliance period referred to in Rule 903(c)(3) under the Act, it will send to
such distributor, dealer or person receiving a selling concession, fee or other
remuneration a confirmation or notice to substantially the following effect:
"The Series C Notes covered hereby have not been registered
under the U.S. Securities Act of 1933, as amended (the
"Securities Act"), and may not be offered and sold within the
United States or to, or for the account or benefit of, U.S.
persons (i) as part of your distribution at any time or (ii)
otherwise until 40 days after the later of the commencement of
the offering and the Closing Date, except in either case in
accordance with Regulation S under the Securities Act (or Rule
144A or to Accredited Investors in transactions that are
exempt from the registration requirements of the Securities
Act), and in connection with any subsequent sale by you of the
Series C Notes covered hereby in reliance on Regulation S
during the period referred to above to any distributor, dealer
or person receiving a selling concession, fee or other
remuneration, you must deliver a notice to substantially the
foregoing effect. Terms used above have the meanings assigned
to them in Regulation S."
(viii) Such Initial Purchaser agrees that the Series C Notes offered and sold
in reliance on Regulation S will be represented upon issuance by a global
security that may not be exchanged for definitive securities until the
expiration of the 40-day distribution compliance period referred to in Rule
903(c)(3) under the Act and only upon certification of beneficial ownership of
such Series C Notes by non-U.S. persons or U.S. persons who purchased such
Series C Notes in transactions that were exempt from the registration
requirements of the Act.
The Initial Purchasers understand that the Company and, for purposes of
the opinions to be delivered to the Initial Purchasers pursuant to Section 8
hereof, counsel for the Issuers and counsel for the Initial Purchasers will rely
upon the accuracy and truth of the foregoing representations and hereby consent
to such reliance.
6. INDEMNIFICATION.
(a) The Issuers, jointly and severally, agree to indemnify and
hold harmless (i) each of the Initial Purchasers, (ii) each person, if
any, who controls either of the Initial Purchasers within the meaning
of Section 15 of the Act or Section 20(a) of the Exchange Act and (iii)
the respective officers, directors, partners, employees,
representatives and agents of each of the Initial Purchasers or any
controlling person to the fullest extent lawful, from and against any
and all losses, liabilities, claims, damages and expenses whatsoever
(including, but not limited to, reasonable attorneys' fees and any and
all expenses whatsoever incurred in investigating, preparing or
defending against any investigation or litigation, commenced or
threatened, or any claim whatsoever, and any and all amounts paid in
settlement of any claim or litigation), joint or several, to which they
or any of them may become subject under the Act, the Exchange Act or
otherwise, insofar as such losses, liabilities, claims, damages or
expenses (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact
contained in the Offering Memorandum, or in any supplement thereto or
amendment thereof, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading; provided,
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<PAGE> 20
however, that the Issuers will not be liable in any such case to the
extent, but only to the extent, that any such loss, liability, claim,
damage or expense arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission
made therein in reliance upon and in conformity with information
relating to either of the Initial Purchasers furnished to the Company
in writing by or on behalf of such Initial Purchaser expressly for use
therein. This indemnity agreement will be in addition to any liability
which the Issuers may otherwise have, including under this Agreement.
(b) Each of the Initial Purchasers, severally and not jointly,
agrees to indemnify and hold harmless (i) the Issuers, (ii) each
person, if any, who controls the Issuers within the meaning of Section
15 of the Act or Section 20(a) of the Exchange Act, and (iii) the
respective officers, directors, partners, employees, representatives
and agents of the Issuers, or any controlling person, against any
losses, liabilities, claims, damages and expenses whatsoever
(including, but not limited to, reasonable attorneys' fees and any and
all expenses whatsoever incurred in investigating, preparing or
defending against any investigation or litigation, commenced or
threatened, or any claim whatsoever and any and all amounts paid in
settlement of any claim or litigation), joint or several, to which they
or any of them may become subject under the Act, the Exchange Act or
otherwise, insofar as such losses, liabilities, claims, damages or
expenses (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact
contained in the Offering Memorandum, or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, in each
case to the extent, but only to the extent, that any such loss,
liability, claim, damage or expense arises out of or is based upon any
untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with
information relating to such Initial Purchaser furnished to the Company
in writing by or on behalf of such Initial Purchaser expressly for use
therein; provided, however, that in no case shall either of the Initial
Purchasers be liable or responsible for any amount in excess of the
discounts and commissions received by such Initial Purchaser, as set
forth herein. This indemnity will be in addition to any liability which
the Initial Purchasers may otherwise have, including under this
Agreement.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any
action, such indemnified party shall, if a claim in respect thereof is
to be made against the indemnifying party under such subsection, notify
each party against whom indemnification is to be sought in writing of
the commencement thereof (but the failure so to notify an indemnifying
party shall not relieve it from any liability which it may have under
this Section 6 except to the extent that it has been prejudiced in any
material respect by such failure or from any liability which it may
otherwise have). In case any such action is brought against any
indemnified party, and it notifies an indemnifying party of the
commencement thereof, the indemnifying party will be entitled to
participate therein, and to the extent it may elect by written notice
delivered to the indemnified party promptly after receiving the
aforesaid notice from such indemnified party, to assume the defense
thereof with counsel reasonably satisfactory to such indemnified party.
Notwithstanding the foregoing, the indemnified party or parties shall
have the right to employ its or their own counsel in any such case, but
the fees and expenses of such counsel shall be at the expense of such
indemnified party or parties unless (i) the employment of such counsel
shall have been authorized in writing by the indemnifying parties in
connection with the defense of such action, (ii) the indemnifying
parties shall not have employed counsel to take charge of the defense
of such action within a reasonable
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<PAGE> 21
time after notice of commencement of the action or (iii) such
indemnified party or parties shall have reasonably concluded based upon
the advice of counsel that there may be defenses available to it or
them which are different from or additional to those available to one
or all of the indemnifying parties (in which case the indemnifying
party or parties shall not have the right to direct the defense of such
action on behalf of the indemnified party or parties), in any of which
events such fees and expenses of counsel shall be borne by the
indemnifying parties; provided, however, that the indemnifying party
under subsection (a) or (b) above shall only be liable for the legal
expenses of one counsel (in addition to any local counsel) for all
indemnified parties in each jurisdiction in which any claim or action
is brought. Anything in this subsection to the contrary
notwithstanding, an indemnifying party shall not be liable for any
settlement of any claim or action effected without its prior written
consent, provided that such consent was not unreasonably withheld.
7. CONTRIBUTION. In order to provide for contribution in circumstances in
which the indemnification provided for in Section 6 is for any reason held to be
unavailable or is insufficient to hold harmless a party indemnified thereunder,
the Issuers, on the one hand, and each Initial Purchaser, on the other hand,
shall contribute to the aggregate losses, claims, damages, liabilities and
expenses of the nature contemplated by such indemnification provision (including
any investigation, legal and other expenses incurred in connection with, and any
amount paid in settlement of, any action, suit or proceeding or any claims
asserted, but after deducting in the case of losses, claims, damages,
liabilities and expenses suffered by the Issuers, any contribution received by
the Issuers from persons, other than the Initial Purchasers, who may also be
liable for contribution, including persons who control the Issuers within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act) to which
the Issuers and such Initial Purchaser may be subject, in such proportion as is
appropriate to reflect the relative benefits received by the Issuers, on one
hand, and such Initial Purchaser, on the other hand, from the offering of the
Series C Notes or, if such allocation is not permitted by applicable law or
indemnification is not available as a result of the indemnifying party not
having received notice as provided in Section 6, in such proportion as is
appropriate to reflect not only the relative benefits referred to above but also
the relative fault of the Issuers, on one hand, and such Initial Purchaser, on
the other hand, in connection with the statements or omissions which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative benefits received by the
Issuers, on one hand, and each Initial Purchaser, on the other hand, shall be
deemed to be in the same proportion as (i) the total proceeds from the offering
of Series C Notes (net of discounts but before deducting expenses) received by
the Issuers and (ii) the discounts and commissions received by such Initial
Purchaser, respectively, in each case as set forth herein. The relative fault of
the Issuers, on one hand, and of each Initial Purchaser, on the other hand,
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Issuers or such
Initial Purchaser and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Issuers and the Initial Purchasers agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation or by any other method of allocation which does not take into account
the equitable considerations referred to above. Notwithstanding the provisions
of this Section 7, (i) in no case shall either of the Initial Purchasers be
required to contribute any amount in excess of the amount by which the discounts
and commissions applicable to the Series C Notes purchased by such Initial
Purchaser pursuant to this Agreement exceeds the amount of any damages which
such Initial Purchaser has otherwise been required to pay by reason of any
untrue or alleged untrue statement or omission or alleged omission and (ii) no
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For
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<PAGE> 22
purposes of this Section 7, (A) each person, if any, who controls either of the
Initial Purchasers within the meaning of Section 15 of the Act or Section 20(a)
of the Exchange Act and (B) the respective officers, directors, partners,
employees, representatives and agents of each of the Initial Purchasers or any
controlling person shall have the same rights to contribution as such Initial
Purchaser, and (A) each person, if any, who controls the Issuers within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act and (B)
the respective officers, directors, partners, employees, representatives and
agents of the Issuers shall have the same rights to contribution as the Issuers,
subject in each case to clauses (i) and (ii) of this Section 7. Any party
entitled to contribution will, promptly after receipt of notice of commencement
of any action, suit or proceeding against such party in respect of which a claim
for contribution may be made against another party or parties under this Section
7, notify such party or parties from whom contribution may be sought, but the
failure to so notify such party or parties shall not relieve the party or
parties from whom contribution may be sought from any obligation it or they may
have under this Section 7 or otherwise. No party shall be liable for
contribution with respect to any action or claim settled without its prior
written consent, provided that such written consent was not unreasonably
withheld.
8. CONDITIONS OF INITIAL PURCHASERS' OBLIGATIONS. The obligations of the
Initial Purchasers to purchase and pay for the Series C Notes, as provided
herein, shall be subject to the satisfaction of the following conditions:
(a) All of the representations and warranties of the Issuers
contained in this Agreement shall be true and correct on the date
hereof and on the Closing Date (after giving effect to the Transactions
(as such term is defined in the Offering Memorandum)) with the same
force and effect as if made on and as of the date hereof and the
Closing Date, respectively. Each of the Issuers shall have performed or
complied with all of the agreements herein contained and required to be
performed or complied with by it at or prior to the Closing Date.
(b) The Offering Memorandum shall have been printed and copies
distributed to the Initial Purchasers not later than 10:00 a.m., New
York City time, on the second business day following the date of this
Agreement or at such later date and time as to which the Initial
Purchasers may agree, and no stop order suspending the qualification or
exemption from qualification of the Series C Notes in any jurisdiction
referred to in Section 4(e) shall have been issued and no proceeding
for that purpose shall have been commenced or shall be pending or
threatened.
(c) No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any
governmental agency which would, as of the Closing Date, prevent the
issuance of the Series C Notes or the Guarantees or the consummation of
the Transactions (as such term is defined in the Offering Memorandum);
no action, suit or proceeding shall have been commenced and be pending
against or affecting or, to the best knowledge of the Issuers,
threatened against, the Company or any of its Subsidiaries before any
court or arbitrator or any governmental body, agency or official that,
if adversely determined, could reasonably be expected to adversely
affect the issuance of the Series C Notes or the Guarantees or the
consummation of the Transactions; and no stop order shall have been
issued preventing the use of the Offering Memorandum, or any amendment
or supplement thereto, or which could reasonably be expected to have a
Material Adverse Effect.
(d) Since the dates as of which information is given in the
Offering Memorandum, (i) there shall not have been any material adverse
change, or any development that is reasonably likely to result in a
material adverse change, in the capital stock or the long-term debt, or
material
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<PAGE> 23
increase in the short-term debt, of the Company or any of its
Subsidiaries from that set forth in the Offering Memorandum, (ii) no
dividend or distribution of any kind shall have been declared, paid or
made by the Company or any of its Subsidiaries on any class of its
capital stock and (iii) none of the Company or any of its Subsidiaries
shall have incurred any liabilities or obligations, direct or
contingent, that are or, after giving effect to the Transactions (as
such term is defined in the Offering Memorandum), will be material,
individually or in the aggregate, to the Company and its Subsidiaries,
taken as a whole, and that are required to be disclosed on a balance
sheet or notes thereto in accordance with generally accepted accounting
principles and are not disclosed on the latest balance sheet or notes
thereto included in the Offering Memorandum. Since the date hereof and
since the dates as of which information is given in the Offering
Memorandum, there shall not have occurred any material adverse change
in the business, prospects, financial condition or results of operation
of the Company and its Subsidiaries, taken as a whole.
(e) The Initial Purchasers shall have received certificates, dated
the Closing Date, signed on behalf of the Company and the Holmes
Guarantors, in form and substance satisfactory to the Initial
Purchasers, confirming, as of the Closing Date, the matters set forth
in paragraphs (a), (b), (c) and (d) of this Section 8 and that, as of
the Closing Date, the obligations of the Company, the Holmes Guarantors
and the Rival Guarantors to be performed hereunder on or prior thereto
have been duly performed.
(f) The Initial Purchasers shall have received on the Closing Date
an opinion, dated the Closing Date, in form and substance satisfactory
to the Initial Purchasers and counsel for the Initial Purchasers, of
Posternak, Blankstein & Lund, L.L.P., counsel for the Company and the
Guarantors, covering such matters as shall be reasonably requested by
them (or "as are customarily covered").
(g) At the time this Agreement is executed and at the Closing
Date, the Initial Purchasers shall have received from
PricewaterhouseCoopers LLP and KPMG LLP, independent public
accountants, dated as of the date of this Agreement and as of the
Closing Date, customary comfort letters addressed to the Initial
Purchasers and in form and substance satisfactory to the Initial
Purchasers and counsel for the Initial Purchasers with respect to the
consolidated financial statements and certain financial information of
Holmes and its subsidiaries, and of Rival and its subsidiaries,
contained in the Offering Memorandum.
(h) The Initial Purchasers shall have received an opinion, dated
the Closing Date, in form and substance reasonably satisfactory to the
Initial Purchasers, of Latham & Watkins, counsel for the Initial
Purchasers, covering such matters as are customarily covered in such
opinions. (i) Latham & Watkins shall have been furnished with such
documents, in addition to those set forth above, as they may reasonably
require for the purpose of enabling them to review or pass upon the
matters referred to in this Section 8 and in order to evidence the
accuracy, completeness or satisfaction in all material respects of any
of the representations, warranties or conditions herein contained.
(j) Prior to the Closing Date, the Issuers shall have furnished to
the Initial Purchasers such further information, certificates and
documents as the Initial Purchasers may reasonably request.
(k) The Issuers and the Trustee shall have entered into the
Indenture and the Initial Purchasers shall have received counterparts,
conformed as executed, thereof.
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<PAGE> 24
(l) The Issuers shall have entered into the Registration Rights
Agreement and the Initial Purchasers shall have received counterparts,
conformed as executed, thereof.
(m) The Credit Facility shall be consummated prior to, or
simultaneously with, the Closing of the Offering on substantially the
terms described in the Offering Memorandum and the Initial Purchasers
shall have received counterparts, conformed as executed, of the Credit
Facility and such other documentation as they deem necessary to
evidence the consummation thereof.
(n) Any applicable waiting period under the Hart Scott Rodino act
shall have been expired or terminated.
(o) All of the opinions to be delivered by the Issuers pursuant to
the Credit Facility shall be addressed and delivered to the Initial
Purchasers, or appropriate reliance letters satisfactory to the Initial
Purchasers' counsel shall have been delivered to the Initial
Purchasers.
(p) Since the date of this Agreement, there shall not have been
any announcement by any "nationally recognized statistical rating
organization," as defined for purposes of Rule 463(g) under the
Securities Act, that (i) it is downgrading its rating assigned to any
class of securities of the Company or (ii) it is reviewing its ratings
assigned to any class of securities of the Company with a view to
possible downgrading, or with negative implications, or direction not
determined.
(q) The Notes shall have been approved for trading on PORTAL.
All opinions, certificates, letters and other documents required by
this Section 8 to be delivered by the Company and the Guarantors will be in
compliance with the provisions hereof only if they are reasonably satisfactory
in form and substance to the Initial Purchasers. The Company and the Guarantors
shall furnish the Initial Purchasers with such conformed copies of such
opinions, certificates, letters and other documents as they shall reasonably
request.
9. ADDITIONAL COVENANTS. Upon (a) the acceptance in the Tender Offer by
Moriarty of the Minimum Tender Amount and (b) the consummation of the Merger (as
such term is defined in the Offering Memorandum):
(a) Rival and the Rival Guarantors shall enter into the Purchase
Agreement Supplement and the Initial Purchasers shall receive counterparts,
conformed as executed, thereof.
(b) Rival and the Rival Guarantors shall enter into the
Registration Rights Agreement Supplement in substantially the form attached as
EXHIBIT A to the Registration Rights Agreement (the "REGISTRATION RIGHTS
AGREEMENT SUPPLEMENT") and the Initial Purchasers shall receive counterparts,
conformed as executed, thereof.
(c) The Initial Purchasers shall receive an opinion, dated the
date of the consummation of the Merger (as such term is defined in the Offering
Memorandum), in form and substance satisfactory to the Initial Purchasers and
counsel for the Initial Purchasers, of Morrison & Hecker L.L.P., counsel for
certain of the Rival Guarantors.
10. INITIAL PURCHASERS' INFORMATION. The Company and the Guarantors
acknowledge that the statements with respect to the offering of the Series C
Notes set forth in the last paragraph of the cover page and the third paragraph
and the fifth sentence of the fourth paragraph under the caption "Plan of
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<PAGE> 25
Distribution" in the Offering Memorandum constitute the only information
relating to any of the Initial Purchasers furnished to the Company in writing by
or on behalf of any of the Initial Purchasers expressly for use in the Offering
Memorandum.
11. SURVIVAL OF REPRESENTATIONS AND AGREEMENTS. All representations and
warranties, covenants and agreements of the Initial Purchasers, the Company and
the Guarantors contained in this Agreement, including the agreements contained
in Sections 4(f) and 12(d), the indemnity agreements contained in Section 6 and
the contribution agreements contained in Section 7, shall remain operative and
in full force and effect regardless of any investigation made by or on behalf of
either of the Initial Purchasers, any controlling person thereof, or by or on
behalf of the Company and the Guarantors or any controlling person thereof, and
shall survive delivery of and payment for the Series C Notes to and by the
Initial Purchasers. The representations contained in Section 5 and the
agreements contained in Sections 4(f), 6, 7 and 12(d) shall survive the
termination of this Agreement, including any termination pursuant to Section 12.
12. EFFECTIVE DATE OF AGREEMENT; TERMINATION.
(a) This Agreement shall become effective upon execution and
delivery of a counterpart hereof by each of the parties hereto.
(b) The Initial Purchasers shall have the right to terminate this
Agreement at any time prior to the Closing Date by notice to the
Company from the Initial Purchasers, without liability (other than with
respect to Sections 6 and 7) on the Initial Purchasers' part to the
Company or any of the Guarantors if, on or prior to such date, (i) the
Company or any of the Guarantors shall have failed, refused or been
unable to perform in any material respect any agreement on their part
to be performed hereunder, (ii) any other condition to the obligations
of the Initial Purchasers hereunder as provided in Section 8 is not
fulfilled when and as required in any material respect, (iii) in the
reasonable judgment of the Initial Purchasers, any material adverse
change shall have occurred since the respective dates as of which
information is given in the Offering Memorandum in the condition
(financial or otherwise), business, properties, assets, liabilities,
prospects, net worth, results of operations or cash flows of the
Company and its Subsidiaries, taken as a whole, other than as set forth
in the Offering Memorandum, or (iv)(A) any domestic or international
event or act or occurrence has materially disrupted, or in the opinion
of the Initial Purchasers will in the immediate future materially
disrupt, the market for the Company's securities or for securities in
general; or (B) trading in securities generally on the New York or
American Stock Exchange shall have been suspended or materially
limited, or minimum or maximum prices for trading shall have been
established, or maximum ranges for prices for securities shall have
been required, on such exchange, or by such exchange or other
regulatory body or governmental authority having jurisdiction; or (C) a
banking moratorium shall have been declared by federal or state
authorities, or a moratorium in foreign exchange trading by major
international banks shall have been declared; or (D) there is an
outbreak or escalation of armed hostilities involving the United States
on or after the date hereof, or if there has been a declaration by the
United States of a national emergency or war, the effect of which shall
be, in the Initial Purchasers' judgment, to make it inadvisable or
impracticable to proceed with the offering or delivery of the Series C
Notes on the terms and in the manner contemplated in the Offering
Memorandum; or (E) there shall have been such a material adverse change
in general economic, political or financial conditions or if the effect
of international conditions on the financial markets in the United
States shall be such as, in the Initial Purchasers' judgment, makes
24
<PAGE> 26
it inadvisable or impracticable to proceed with the delivery of the
Series C Notes as contemplated hereby.
(c) Any notice of termination pursuant to this Section 12 shall be
by telephone or telephonic facsimile and, in either case, confirmed in
writing by letter.
(d) If this Agreement shall be terminated pursuant to any of the
provisions hereof (otherwise than pursuant to clause (iv) of Section
12(b), in which case each party will be responsible for its own
expenses), or if the sale of the Series C Notes provided for herein is
not consummated because any condition to the obligations of the Initial
Purchasers set forth herein is not satisfied or because of any refusal,
inability or failure on the part of the Company or any of the
Guarantors to perform any agreement herein or comply with any provision
hereof, the Company and the Guarantors shall reimburse the Initial
Purchasers for all out-of-pocket expenses (including the reasonable
fees and expenses of the Initial Purchasers' counsel), incurred by the
Initial Purchasers in connection herewith.
13. NOTICE. All communications hereunder, except as may be otherwise
specifically provided herein, shall be in writing and, if sent to the Initial
Purchasers shall be mailed, delivered, telecopied and confirmed in writing or
sent by a nationally recognized overnight courier service guaranteeing delivery
on the next business day to BancBoston Robertson Stephens Inc., 100 Federal
Street, Boston, Massachusetts 02110, Attention: Corporate Finance Department,
telecopy number: (617) 434-0624, with a copy to Latham & Watkins, 885 Third
Avenue, Suite 1000, New York, New York 10022, Attention: Roger H. Kimmel,
telecopy number: (212) 751-4864; and if sent to the Company or any of the
Guarantors, shall be mailed, delivered, telecopied and confirmed in writing or
sent by a nationally recognized overnight courier service guaranteeing delivery
on the next business day to Holmes Products Corp., 233 Fortune Boulevard,
Milford, Massachusetts 01757, Attention: Chief Financial Officer, telecopy
number: (508) 634-1847, with copies to Posternak, Blankstein & Lund, L.L.P., 100
Charles River Plaza, Boston, Massachusetts 02114, Attention: Donald H. Siegel
P.C., telecopy number: (617) 367-2315.
14. PARTIES. This Agreement shall inure solely to the benefit of, and shall
be binding upon, the Initial Purchasers, the Company and the Guarantors and the
controlling persons and agents referred to in Sections 6 and 7, and their
respective successors and assigns, and no other person shall have or be
construed to have any legal or equitable right, remedy or claim under or in
respect of or by virtue of this Agreement or any provision herein contained. The
term "successors and assigns" shall not include a purchaser, in its capacity as
such, of Notes from the Initial Purchasers.
15. CONSTRUCTION. This Agreement shall be construed in accordance with the
internal laws of the State of New York. TIME IS OF THE ESSENCE IN THIS
AGREEMENT.
16. CAPTIONS. The captions included in this Agreement are included solely
for convenience of reference and are not to be considered a part of this
Agreement.
17. COUNTERPARTS. This Agreement may be executed in various counterparts
which together shall constitute one and the same instrument.
[Signature page to follow]
25
<PAGE> 27
If the foregoing correctly sets forth the understanding among the
Initial Purchasers, the Company and the Guarantors please so indicate in the
space provided below for that purpose, whereupon this letter shall constitute a
binding agreement among us.
Very truly yours,
HOLMES PRODUCTS CORP.
By: /s/ Ira B. Morgenstern
--------------------------------------
Name: Ira B. Morgenstern
Title: Senior Vice President - Finance
HOLMES MANUFACTURING CORP.
By: /s/ Jordan A. Kahn
--------------------------------------
Name: Jordan A. Kahn
Title: President
HOLMES AIR (TAIWAN) CORP.
By: /s/ Jordan A. Kahn
--------------------------------------
Name: Jordan A. Kahn
Title: President
HOLMES MOTOR CORPORATION
By: /s/ Jordan A. Kahn
--------------------------------------
Name: Jordan A. Kahn
Title: President
MORIARTY ACQUISITION CORP.
By: /s/ Ira B. Morgenstern
--------------------------------------
Name: Ira B. Morgenstern
Title: Senior Vice President - Finance
<PAGE> 28
Accepted and agreed to as of
the date first above written:
BANCBOSTON ROBERTSON STEPHENS INC.
By: /s/ Ian B. Blumenstein
------------------------------------
Name: Ian B. Blumenstein
Title: Managing Director
LEHMAN BROTHERS INC.
By: /s/ John Russell
------------------------------------
Name: John Russell
Title: Managing Director
<PAGE> 29
SCHEDULE I
<TABLE>
<CAPTION>
Principal Amount
Initial Purchaser of Series C Notes
- ----------------- -----------------
<S> <C>
BancBoston Robertson Stephens Inc. $18,750,000
Lehman Brothers Inc. $12,500,000
Total $31,250,000
===========
</TABLE>
<PAGE> 30
EXHIBIT A
LIST OF GUARANTORS
HOLMES GUARANTORS
- -----------------
Holmes Manufacturing Corp., a Massachusetts corporation.
Holmes Air (Taiwan) Corp., a Massachusetts corporation.
Moriarty Acquisition Corp., a Delaware corporation.*
Holmes Motor Corporation, a Delaware corporation.
RIVAL GUARANTORS
- ----------------
The Rival Company, a Delaware corporation.
Patton Electric Company, Inc., an Indiana corporation.
Patton Building Products, Inc., a Delaware corporation.
Rival Consumer Sales Corporation, a Missouri corporation.
- ----------
* It being understood that Moriarty will not become a Guarantor under the
Indenture in the event that it is merged with and into Rival as of the
Closing Date, in which case Rival shall assume all of Moriarty's
obligations hereunder.
A-1
<PAGE> 31
EXHIBIT B
PURCHASE AGREEMENT SUPPLEMENT
THIS PURCHASE AGREEMENT SUPPLEMENT is a supplement to that certain
Purchase Agreement, dated as of February , 1999 (the "Purchase Agreement"),
among Holmes Products Corp., a Massachusetts corporation, the Guarantors listed
on the signature page thereto, and BancBoston Robertson Stephens Inc. and Lehman
Brothers Inc.
As a result of the acceptance of the Minimum Tender Amount in the
Tender Offer, each of the Rival Guarantors has become a direct or indirect
subsidiary of the Company and hereby agrees to be bound by the terms and
provisions applicable to the Guarantors under the Purchase Agreement, including
but not limited to the representation in Section 4 thereof and the agreements in
Section 5 thereof, as if each of the undersigned had executed the Purchase
Agreement on the date thereof.
This Purchase Agreement Supplement does not cancel or extinguish any
right or obligation of the parties to the Purchase Agreement. The parties hereto
agree that the Purchase Agreement shall be supplemented only with respect to the
matters referred to herein and the provisions of the Purchase Agreement are
otherwise in full force and effect.
Terms used but not defined herein shall have the meanings given to them
in the Purchase Agreement. This Purchase Agreement Supplement may be executed in
one or more counterparts and, if executed in more that one counterpart, the
executed counterparts shall each be deemed to be an original and all such
counterparts shall together constitute one and the same instrument.
THIS PURCHASE AGREEMENT SUPPLEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF NEW YORK, WITHOUT REGARD TO THE CONFLICT OF LAW
RULES THEREOF.
B-1
<PAGE> 32
IN WITNESS WHEREOF, each of the undersigned has executed this Purchase
Agreement Supplement as of February , 1999.
RIVAL GUARANTORS:
THE RIVAL COMPANY
PATTON ELECTRIC COMPANY, INC.
PATTON BUILDING PRODUCTS, INC.
RIVAL CONSUMER SALES CORPORATION
By:
-----------------------------------
Name:
Title:
B-2
<PAGE> 33
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
BancBoston Robertson Stephens Inc.
By:
--------------------------------------
Name:
Title:
Lehman Brothers Inc.
By:
--------------------------------------
Name:
Title:
B-3
<PAGE> 34
EXHIBIT C
REGISTRATION RIGHTS AGREEMENT
[SEE ATTACHED]
C-1
<PAGE> 35
EXHIBIT D
LIST OF SUBSIDIARIES OF THE COMPANY OTHER THAN THE GUARANTORS
Holmes Air (Canada) Corp., an Ontario corporation.
Holmes Products (Far East) Limited, a Bahamas corporation.
Esteem Industries Limited, a Hong Kong corporation.
Raider Motor Corporation, a Bahamas corporation.
Dongguan Huixin Electrical Products Co., Ltd., a China corporation.
Dongguan Raider Motor Corporation Ltd., a China corporation.
The Rival Company of Canada, Ltd., a Canadian corporation.
Bionaire International, B.V., a Netherlands corporation.
Patton Electric Hong Kong Limited, a Hong Kong corporation.
Waverly Products Company, Ltd., a Jamaican corporation.
Rival De Mexico S.A. de C.V., a Mexican corporation.
D-1
