<PAGE>
As Filed with the Securities and Exchange Commission on January 11, 2000
Registration No. 333-92963
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT
Under
The Securities Act of 1933
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KEMET Corporation
(Exact name of registrant as specified in its charter)
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Delaware 57-0923789
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
2835 KEMET Way
Simpsonville, South Carolina 29681
Telephone: (864) 963-6300
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
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Glenn H. Spears
Executive Vice President and Secretary
KEMET Corporation
2835 KEMET Way
Simpsonville, South Carolina 29681
Telephone: (864) 963-6300
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies to:
H. Kurt von Moltke Alan Dean
Kirkland & Ellis Marlene Alva
200 East Randolph Drive Davis Polk & Wardwell
Chicago, Illinois 60601 450 Lexington Avenue
(312) 861-2000 New York, New York 10017
(212) 450-4000
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Approximate date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
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The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until this Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
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<PAGE>
EXPLANATORY NOTE
This Amendment No. 2 to Registration Statement is being filed with the
Securities and Exchange Commission for the sole purpose of filing Exhibits 1.1,
5, 23.1 and 23.2 included herein.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following is a statement of estimated expenses (other than
underwriting compensation) of the issuance and distribution of the securities
being registered:
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee............ $ 60,386
NASD Filing Fee................................................ 23,374
Blue Sky Fees and Expenses (including attorneys' fees and
expenses)..................................................... 3,000
Printing and Engraving Expenses................................ 150,000
Transfer Agent's Fees and Expenses............................. 5,000
Accounting Fees and Expenses................................... 50,000
Legal Fees and Expenses........................................ 150,000
Miscellaneous Expenses......................................... 8,240
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Total........................................................ $450,000
========
</TABLE>
Item 15. Indemnification of Directors and Officers.
The Company is incorporated under the laws of the State of Delaware.
Section 145 of the General Corporation Law of the State of Delaware (Section
145) provides that a Delaware corporation may indemnify any person who is, or
is threatened to be made, a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or as the right of such corporation), by
reason of the fact that such person was an officer, director, employee or agent
of such corporation, or is or was serving at the request of such corporation as
a director, officer, employee or agent of another corporation or enterprise.
The indemnity may include expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by such
person in connection with such action, suit or proceeding, provided such person
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the corporation's best interests and, with respect to any criminal
action or proceeding, had no reasonable cause to believe that his conduct was
illegal. A Delaware corporation may indemnify any person who is, or is
threatened to be made, a party to any threatened, pending or completed action
or suit by or in the right of the corporation by reason of the fact that such
person is or was a director, officer, employee or agent of such corporation, or
is or was serving at the request of such corporation as a director, officer,
employee or agent of another corporation or enterprise. The indemnity may
include expenses (including attorneys' fees) actually and reasonably incurred
by such person in connection with the defense or settlement of such action or
suit, provided such person acted in good faith and in a manner he reasonably
believed to be in or not opposed to the corporation's best interests except
that no indemnification is permitted without judicial approval if the officer
or director is adjudged to be liable to the corporation. Where a present or
former officer or director is successful on the merits or otherwise in the
defense of any action referred to above, the corporation must indemnify him
against the expenses which such officer or director has actually and reasonably
incurred.
The Company's Restated Certificate of Incorporation provides for the
indemnification of directors and officers of the Company to the fullest extent
permitted by Section 145.
In that regard, the Restated Certificate of Incorporation provides that
the Company shall indemnify any person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other
than an action by or in the right of the corporation) by reason of the fact
that he is or was a director or officer of such corporation, or is or was
serving at the request of such corporation as a director, officer or member of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith
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and in a manner he reasonably believed to be in or not opposed to the best
interests of such corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful.
Indemnification in connection with an action or suit by or in the right of such
corporation to procure a judgment in its favor is limited to payment of
settlement of such an action or suit except that no such indemnification may be
made in respect of any claim, cause or matter as to which such person shall
have been adjudged to be liable for negligence or misconduct in the performance
of his duty to the indemnifying corporation unless and only to the extent that
the Court of Chancery of Delaware or the court in which such action or suit was
brought shall determine that, despite the adjudication of liability but in
consideration of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which the court shall deem
proper.
Item 16. Exhibits.
(a) Exhibits:
<TABLE>
<C> <S>
1.1 Form of Purchase Agreement.
4. Certificate representing shares of common stock of the Company
(incorporated by reference to Exhibit 4.1 to the Company's
Registration Statement on Form S-1 (Reg. No. 33-48056)).
5. Opinion of Kirkland & Ellis.
23.1 Consent of KPMG LLP, independent certified public accountants.
23.2 Consent of Kirkland & Ellis (included in Exhibit 5).
24.* Power of Attorney (included in signature page).
</TABLE>
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*Previously filed.
Item 17. Undertakings.
The undersigned registrant hereby undertakes:
(1)To file, during any period in which offers or sales are being made of
the securities registered hereby, a post-effective amendment to this
registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in this registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered
(if the total value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form
of prospectus filed with the Commission pursuant to Rule 424(b) if,
in the aggregate, the changes in volume and price represent no more
than a 20% change in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in the effective
registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this registration statement
or any material change to such information in this registration
statement;
provided, however, that the undertakings set forth in paragraphs (i) and (ii)
above do not apply if the information required to be included in a post-
effective amendment by those paragraphs is contained in periodic reports filed
by the registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in this registration
statement.
(2)That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
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(3)To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of
the offering.
In addition, the Company hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
The undersigned registrant hereby undertakes that:
(1)For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 430(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(2)For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Amendment No. 2 to Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Simpsonville, State of South Carolina, on January 11, 2000.
KEMET Corporation
/s/ David E. Maguire
By: _____________________________
David E. Maguire
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Amendment No. 2 to Registration Statement has been signed on January 11, 2000,
by the following persons in the capacities indicated:
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ David E. Maguire Chairman, Chief Executive Officer and
___________________________________________ Director (principal executive officer)
David E. Maguire
/s/ D. Ray Cash* Senior Vice President of Administration and
___________________________________________ Treasurer (principal financial and
D. Ray Cash accounting officer)
/s/ Charles E. Volpe* Director
___________________________________________
Charles E. Volpe
/s/ Stewart A. Kohl* Director
___________________________________________
Stewart A. Kohl
/s/ E. Ewrin Maddrey, II* Director
___________________________________________
E. Erwin Maddrey, II
/s/ Paul C. Schorr IV* Director
___________________________________________
Paul C. Schorr IV
</TABLE>
/s/ Glenn H. Spears
*By: ___________________________________
Glenn H. Spears
Attorney-in-fact
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EXHIBIT 1.1
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KEMET CORPORATION
(a Delaware corporation)
5,000,000 Shares of Common Stock
Purchase Agreement
Dated: January 13, 2000
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<PAGE>
KEMET CORPORATION
(a Delaware corporation)
5,000,000 Shares of Common Stock, $0.01 par value
Purchase Agreement
January 13, 2000
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Salomon Smith Barney Inc.
as Representatives of the several Underwriters
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
KEMET Corporation, a Delaware corporation (the "Company"), and Citigroup
Foundation (the "Selling Shareholder"), confirm their respective agreements with
Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated
("Merrill Lynch") and each of the other Underwriters named in Schedule A hereto
(collectively, the "Underwriters," which term shall also include any underwriter
substituted as hereinafter provided in Section 11 hereof), for whom Merrill
Lynch and Salomon Smith Barney Inc. are acting as representatives (in such
capacity, the "Representatives"), with respect to (i) the sale by the Company
and the Selling Shareholder, acting severally and not jointly, and the purchase
by the Underwriters, acting severally and not jointly, of the respective numbers
of shares of Common Stock, par value $0.01 per share, of the Company ("Common
Stock") set forth in Schedules A and B hereto and (ii) the grant by the Company
to the Underwriters, acting severally and not jointly, of the option described
in Section 2(b) hereof to purchase all or any part of 750,000 additional shares
of Common Stock to cover over-allotments, if any. The aforesaid 5,000,000
shares of Common Stock (the "Initial Securities") to be purchased by the
Underwriters and all or any part of the 750,000 shares of Common Stock subject
to the option described in Section 2(b) hereof (the "Option Securities") are
hereinafter called, collectively, the "Securities."
<PAGE>
The Company and the Selling Shareholder understand that the Underwriters
propose to make a public offering of the Securities as soon as the
Representatives deem advisable after this Agreement has been executed and
delivered.
Prior to the purchase and public offering of the Securities by the several
Underwriters, the Company, the Selling Shareholder and the Representatives,
acting on behalf of the several Underwriters, shall enter into an agreement
substantially in the form of Exhibit A hereto (the "Pricing Agreement"). The
Pricing Agreement may take the form of an exchange of any standard form of
written telecommunication between the Company and the Selling Shareholder and
the Representatives and shall specify such applicable information as is
indicated in Exhibit A hereto. The offering of the Securities will be governed
by this Agreement, as supplemented by the Pricing Agreement. From and after the
date of the execution and delivery of the Pricing Agreement, this Agreement
shall be deemed to incorporate the Pricing Agreement.
The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (No. 333-
92963) and Amendments No. 1 and No. 2 thereto covering the registration of the
Securities under the Securities Act of 1933, as amended (the "1933 Act"),
including the related preliminary prospectus or prospectuses. Promptly after
execution and delivery of this Agreement, the Company will prepare and file a
prospectus in accordance with the provisions of Rule 430A ("Rule 430A") of the
rules and regulations of the Commission under the 1933 Act (the "1933 Act
Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of the 1933 Act
Regulations. The information included in such prospectus that was omitted from
such registration statement at the time it became effective but that is deemed
to be part of such registration statement at the time it became effective
pursuant to paragraph (b) of Rule 430A is referred to as "Rule 430A
Information." Each prospectus used before such registration statement became
effective, and any prospectus that omitted, as applicable, the Rule 430A
Information that was used after such effectiveness and prior to the execution
and delivery of this Agreement, is herein called a "preliminary prospectus."
Such registration statement, including the exhibits thereto, schedules thereto,
if any, and the documents incorporated by reference therein pursuant to Item 12
of Form S-3 under the 1933 Act, at the time it became effective and including
the Rule 430A Information is herein called the "Registration Statement." Any
registration statement filed pursuant to Rule 462(b) of the 1933 Act Regulations
is herein referred to as the "Rule 462(b) Registration Statement," and after
such filing the term "Registration Statement" shall include the Rule 462(b)
Registration Statement. The final prospectus, including the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933
Act, in the form first furnished to
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the Underwriters for use in connection with the offering of the Securities is
herein called the "Prospectus." For purposes of this Agreement, all references
to the Registration Statement, any preliminary prospectus, the Prospectus or any
amendment or supplement to any of the foregoing shall be deemed to include the
copy filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval system ("EDGAR").
All references in this Agreement to financial statements and schedules and
other information that is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information that is incorporated by
reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to mean and include the filing of
any document under the Securities Exchange Act of 1934 (the "1934 Act") that is
incorporated by reference in the Registration Statement, such preliminary
prospectus or the Prospectus, as the case may be.
Section 1. Representations and Warranties.
(a) The Company represents and warrants to each Underwriter as of the
date hereof and as of the date of the Pricing Agreement (such latter date being
hereinafter referred to as the "Representation Date") as follows:
(i) At the time the Registration Statement becomes effective, the
Registration Statement will comply in all material respects with the
provisions of the 1933 Act and the 1933 Act Regulations, and will not
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading; and the Prospectus at the Representation Date and
at Closing Time (as hereinafter defined) referred to in Section 2 will not
contain an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; except that the
representations and warranties contained in this sentence shall not apply
to statements or omissions in the Registration Statement or the Prospectus
(or any supplement or amendment to them) based upon information relating to
any Underwriter furnished to the Company in writing by or on behalf of any
Underwriter through the Representatives expressly for use therein. The
documents incorporated or deemed to be incorporated by reference in the
Prospectus, at the time they were or
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hereafter are filed with the Commission, complied and will comply in all
material respects with the requirements of the 1934 Act and the rules and
regulations of the Commission under the 1934 Act (the "1934 Act
Regulations").
(ii) Each preliminary prospectus and the Prospectus filed as part
of the Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the 1933 Act,
complied when so filed in all material respects with the 1933 Act
Regulations and each preliminary prospectus and the Prospectus delivered to
the Underwriters for use in connection with this offering was identical to
the electronically transmitted copies thereof filed with the Commission
pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(iii) Each of the Company and its subsidiaries has been duly
incorporated, is validly existing as a corporation in good standing under
the laws of its jurisdiction of incorporation, and has the corporate power
and authority to carry on its business as described in the Prospectus and
to own, lease and operate its properties, and each is duly qualified and is
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 would not have a material adverse effect on the Company
and its subsidiaries, taken as a whole.
(iv) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, except as otherwise stated
therein, (A) there has been no material adverse change in the condition,
financial or otherwise, or in the earnings or business affairs of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business (a "Material Adverse Effect"),
(B) there have been no transactions entered into by the Company or any of
its subsidiaries, other than those in the ordinary course of business,
which are material with respect to the Company and its subsidiaries
considered as one enterprise, and (C) there has been no dividend or
distribution of any kind declared, paid or made by the Company on any class
of its capital stock.
(v) All of the outstanding shares of capital stock of, or other
ownership interests in, each of the Company's subsidiaries have been duly
authorized and validly issued and are fully paid and non-assessable, and
are owned, directly or indirectly, by the Company or a subsidiary, free and
clear of any security interest, claim, lien, encumbrance or adverse
interest
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of any nature other than liens in favor of the lenders under the Credit
Facility, as amended, and individually held qualifying shares of such
subsidiaries.
(vi) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectus in the column entitled "Actual"
under the caption "Capitalization" (except for subsequent issuances, if
any, pursuant to this Agreement, pursuant to reservations, agreements or
employee benefit plans referred to in the Prospectus pursuant to the
exercise of convertible securities or options referred to in the Prospectus
or pursuant to the Company's Employee Savings Plan). The shares of issued
and outstanding capital stock, including the Securities to be purchased by
the Underwriters from the Selling Shareholder, have been duly authorized
and validly issued and are fully paid and non-assessable; none of the
outstanding shares of capital stock, including the Securities to be
purchased by the Underwriters from the Selling Shareholder, was issued in
violation of the preemptive or other similar rights of any securityholder
of the Company.
(vii) Neither the Company nor any of its subsidiaries is in violation
of its respective charter or by-laws or in default in the performance of
any material obligation, agreement or condition contained in any bond,
debenture, note or any other evidence of indebtedness or in any other
agreement, indenture or instrument material to the conduct of the business
of the Company and its subsidiaries, taken as a whole, to which the Company
or any of its subsidiaries is a party or by which it or any of its
subsidiaries or their respective property is bound.
(viii) The execution, delivery and performance by the Company of this
Agreement, compliance by the Company with all the provisions hereof and the
consummation of the sale of the Securities hereunder will not require any
consent, approval, authorization or other order of any court, regulatory
body, administrative agency or other governmental body, except such as may
be required under the 1933 Act, the 1934 Act, the securities or Blue Sky
laws of the various states or the rules and regulations of the National
Association of Securities Dealers, Inc. (the "NASD") and except for such
consents, approvals, authorizations or other orders which, if not obtained,
would not have a Material Adverse Effect on the Company and its
subsidiaries, taken as a whole, or the sale of the Securities, and will not
conflict with or constitute a breach of any of the terms or provisions of,
or a default under, the charter or by-laws of the Company or any of its
subsidiaries or any material agreement, indenture or other instrument to
which it or any of its subsidiaries is a party or by which it or any of its
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subsidiaries or their respective property is bound, or violate or conflict
with any laws, administrative regulations or rulings or court decrees
applicable to the Company, any of its subsidiaries or their respective
property.
(ix) Except as otherwise set forth in the Prospectus, there are no
legal or governmental proceedings pending to which the Company or any of
its subsidiaries is a party or of which any of their respective property is
the subject, which are required to be described in the Prospectus and that
have not been so described and, to the best of the Company's knowledge, no
such proceedings are threatened. No contract or document of a character
required to be described in the Registration Statement, the Prospectus or
the documents incorporated by reference therein or to be filed as an
exhibit to the Registration Statement is not so described or filed as
required by the 1933 Act.
(x) Except as set forth in the Prospectus, neither the Company nor
any of its subsidiaries has violated any environmental or safety law
("Environmental Laws"), nor any federal or state law relating to
discrimination in the hiring, promotion or pay of employees nor any
applicable federal or state wages and hours laws, nor any provisions of the
Employee Retirement Income Security Act or the rules and regulations
promulgated thereunder, which in each case might result in any Material
Adverse Effect on the Company and its subsidiaries, taken as a whole.
(xi) The Company and each of its subsidiaries has 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 its
respective properties and to conduct its business except for any such
Permits, the failure of which to have, individually or in the aggregate,
would not have a Material Adverse Effect on the Company and its
subsidiaries, taken as a whole; the Company and each of its subsidiaries
has fulfilled and performed all of its material 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 Prospectus, such Permits contain no
restrictions that are materially burdensome to the Company and its
subsidiaries, taken as a whole.
(xii) The Company has reasonably concluded that costs and liabilities
associated with the impact of Environmental Laws as in effect
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on the date hereof on the business, operations and properties of the
Company and its subsidiaries (including, without limitation, any capital or
operating expenditures required for clean-up, closure of properties or
compliance with such Environmental Laws or any Permit, license or approval,
any related constraints on operating activities and any potential
liabilities to third parties) would not, singly or in the aggregate, have a
Material Adverse Effect on the Company and its subsidiaries, taken as a
whole.
(xiii) Except as otherwise set forth in the Prospectus or such as are
not material to the business, prospects, financial condition or results of
operation of the Company and its subsidiaries, taken as a whole, the
Company and each of its subsidiaries has good and marketable title, free
and clear of all liens, claims, encumbrances and restrictions, except liens
for taxes not yet due and payable and except liens in connection with the
Credit Facility, as amended, to all property and assets described in the
Registration Statement as being owned by it. All leases which are material
to the business, prospects, financial condition or results of operation of
the Company and its subsidiaries, taken as a whole, to which the Company or
any of its subsidiaries is a party are valid and binding and no default has
occurred or is continuing thereunder, which might result in any material
adverse change in the business, prospects, financial condition or results
of operation of the Company and its subsidiaries taken as a whole.
(xiv) To the best of the Company's knowledge, the Company and each of
its subsidiaries maintains reasonably adequate insurance.
(xv) To the best of the Company's knowledge, KPMG LLP are independent
public accountants with respect to the Company as required by the 1933 Act.
(xvi) The financial statements included in the Registration Statement
and the Prospectus, together with the related notes, present fairly the
financial position of the Company and its consolidated subsidiaries at the
dates indicated and the statement of operations, stockholders' equity and
cash flows of the Company and its consolidated subsidiaries for the periods
specified; said financial statements have been prepared in conformity with
generally accepted accounting principles ("GAAP") applied on a consistent
basis throughout the periods involved. The selected financial data and the
summary financial information included in the Prospectus present fairly the
information shown therein and have been compiled on a basis consistent with
that of the audited financial statements included in the Registration
Statement.
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(xvii) The Company is not, and upon the issuance and sale of the
Securities as herein contemplated and the application of the net proceeds
therefrom as described in the Prospectus will not be, an "investment
company" or an entity "controlled" by an "investment company" as such terms
are defined in the Investment Company Act of 1940, as amended (the "1940
Act").
(xviii) Except as provided for in the Registration Agreement dated
December 21, 1990, no holder of any security of the Company has any right
to require registration of shares of Common Stock or any other security of
the Company.
(xix) This Agreement and the Pricing Agreement have been duly
authorized, executed and delivered by the Company.
(b) The Selling Shareholder represents and warrants to, and agrees with,
each Underwriter as follows:
(i) The execution and delivery of this Agreement and the Pricing
Agreement and the consummation of the transactions herein contemplated will
not result in a breach by the Selling Shareholder of, or constitute a
default by the Selling Shareholder under, any indenture, deed of trust,
contract, or other agreement or instrument or any decree, judgment or order
to which the Selling Shareholder is a party or by which the Selling
Shareholder may be bound, or to which any of the property or assets of the
Selling Shareholder is subject, nor will such action result in any
violation of the provisions of the charter or by-laws or other
organizational instrument of the Selling Shareholder, if applicable, or any
applicable treaty, law, statute, rule, regulation, judgment, order, writ or
decree of any government, government instrumentality or court, domestic or
foreign, having jurisdiction over the Selling Shareholder or any of its
properties.
(ii) The Selling Shareholder is, immediately prior to the closing for
the sale of the Securities pursuant to this Agreement, the sole registered
owner of the Securities to be sold by the Selling Shareholder; the Selling
Shareholder has full right, power and authority (A) to enter into this
Agreement and the Pricing Agreement and (B) to sell, transfer and deliver
the Securities to be sold by the Selling Shareholder under this Agreement.
(iii) Upon payment pursuant to this Agreement for the Securities to
be sold by the Selling Shareholders pursuant thereto, delivery of such
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Securities, as directed by the Underwriters, to Cede or such other nominee
as may be designated by DTC, registration of such Securities in the name of
Cede or such other nominee and crediting of such Securities on the books of
DTC to "securities accounts" (as defined in Section 8-501 of the UCC) of
the respective Underwriters (assuming that neither DTC nor any such
Underwriter has notice of any adverse claim (as such phrase is defined in
Section 8-105 of the UCC) to such Securities), (A) DTC shall be a
"protected purchaser" of such Securities within the meaning of Section 8-
303 of the UCC; and (B) under Section 8-501 of the UCC, each Underwriter
will acquire a valid "security entitlement" (as defined in Section 8-102 of
the UCC) to the Securities being so purchased by or on behalf of such
Underwriter, and, (C) to the extent governed by the UCC, no action based on
any "adverse claim" (as defined in Section 8-102 of the UCC) to such
Securities (or security entitlement with respect thereto) may properly be
asserted against such Underwriter with respect to such security
entitlement.
(iv) All authorizations, approvals and consents necessary for the
execution and delivery by or on behalf of the Selling Shareholder of this
Agreement, and the sale and delivery of the Securities to be sold by the
Selling Shareholder hereunder have been obtained and are in full force and
effect.
(v) The Selling Shareholder has not taken, and will not take,
directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Securities.
(vi) Such part of the Registration Statement under the caption
"Principal and Selling Stockholders" which was provided to the Company by
the Selling Shareholder for inclusion in the Prospectus and specifically
relates to the Selling Shareholder does not, and will not at the Closing
Time, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in the light of circumstances under which they were
made, not misleading.
(vii) At any time during the period described in paragraph 3(d)
hereof, if there is any material change in the information referred to in
paragraph 1(b)(vi) above, the Selling Shareholder will immediately notify
you of such change.
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(c) Any certificate signed by any officer of the Company and delivered in
connection with this Agreement and the Pricing Agreement to the Representatives
or to counsel for the Underwriters shall be deemed a representation and warranty
by the Company to each Underwriter as to the matters covered thereby. Any
certificate signed by any officer of the Selling Shareholder and delivered in
connection with this Agreement and the Pricing Agreement to the Representatives
or to counsel for the Underwriters shall be deemed a representation and warranty
by the Selling Shareholder to each Underwriter as to the matters covered
thereby.
Section 2. Sale and Delivery to Underwriters; Closing.
(a) On the basis of the representations and warranties herein contained
and subject to the terms and conditions herein set forth, the Company and the
Selling Shareholder, severally and not jointly, agree to sell to each
Underwriter the number of Initial Securities set forth opposite its name in
Schedule B, and each Underwriter, severally and not jointly, agrees to purchase
from the Company and the Selling Shareholder at the price per share set forth in
the Pricing Agreement, that proportion of the number of Initial Securities being
sold by the Company and the Selling Shareholder set forth in Schedule B opposite
the name of the Company or the Selling Shareholder which the number of Initial
Securities set forth in Schedule A opposite the name of such Underwriter (plus
any additional number of Initial Securities which such Underwriter may become
obligated to purchase pursuant to the provisions of Section 11 hereof) bears to
the total number of Initial Securities, subject, in each case, to such
adjustments as the Representatives in their discretion shall make to eliminate
any sales or purchases of fractional securities.
(i) The purchase price per share to be paid by the several
Underwriters for the Securities shall be an amount equal to the public
offering price, less an amount per share to be determined by agreement
between the Representatives, the Company and the Selling Shareholder. The
public offering price per share of the Securities shall be a fixed price to
be determined by agreement between the Representatives, the Company and the
Selling Shareholder. The public offering price and the purchase price, when
so determined, shall be set forth in the Pricing Agreement. In the event
that such prices have not been agreed upon and the Pricing Agreement has
not been executed and delivered by all parties thereto by the close of
business on the fifteenth business day following the date of this
Agreement, this Agreement shall terminate forthwith, without liability of
any party to any other party, unless otherwise agreed to by the
Representatives, the Company and the Selling Shareholder. For purposes
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of this Agreement, the term "business day" means a day on which the New
York Stock Exchange is open for business.
(b) In addition, on the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Company
hereby grants an option to the Underwriters, severally and not jointly, to
purchase up to an additional 750,000 shares of Common Stock at the price per
share set forth in the Pricing Agreement. The option hereby granted will expire
30 days after the Representation Date, and may be exercised in whole or in part
only one time and for the purpose of covering over-allotments that may be made
in connection with the offering and distribution of the Initial Securities upon
notice by the Representatives to the Company setting forth the number of Option
Securities as to which the several Underwriters are exercising the option and
the time and date of payment for and delivery of such Option Securities (a "Date
of Delivery"). Any Date of Delivery for the Option Securities shall be
determined by the Representatives, but shall not be, unless otherwise agreed
upon by the Representatives and the Company, later than seven full business days
after the exercise of said option, or earlier than two business days following
the receipt of such notice by the Company and in no event prior to Closing Time.
If the option is exercised as to all or any portion of the Option Securities,
each of the Underwriters, acting severally and not jointly, will purchase that
proportion of the number of Option Securities being purchased that the number of
Initial Securities set forth in Schedule A opposite the name of such
Underwriter, plus any additional number of Initial Securities which such
Underwriter may become obligated to purchase pursuant to the provision of
Section 11 hereof, bears to the total number of Initial Securities (except as
otherwise provided in the Pricing Agreement), subject in each case to such
adjustments as the Representatives in their discretion shall make to eliminate
any sales or purchases of fractional shares.
(c) Payment of the purchase price for, and delivery of certificates for,
the Initial Securities shall be made at the offices of Davis Polk & Wardwell,
450 Lexington Avenue, New York, New York 10017, or at such other place as shall
be agreed upon by the Company, the Selling Shareholder and the Representatives,
at 9:00 A.M. (Eastern Time) on the third business day (unless postponed in
accordance with the provisions of Section 11) after execution of the Pricing
Agreement, or such other time not later than ten business days after such date
as shall be agreed upon by the Representatives, the Company and the Selling
Shareholder (such time and date of payment and delivery being herein called
"Closing Time"). In addition, in the event that any or all of the Option
Securities are purchased by the Underwriters, payment of the purchase price, and
delivery of certificates, for such Option Securities shall be made at the above-
mentioned offices of Davis Polk & Wardwell, or at such other place as shall be
agreed upon by the Representatives and the Company, on the Date of Delivery as
specified in
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the notice from the Representatives to the Company. Payment shall be made to the
Company and to the Selling Shareholder of their respective aggregate purchase
price for the Securities being sold by the Company and the Selling Shareholder
by wire transfer of federal funds or similar same day funds, against delivery to
the Representatives for the respective accounts of the Underwriters of
certificates for such Initial Securities and Option Securities to be purchased
by them hereunder. Certificates for the Initial Securities and Option Securities
shall be in such denominations and registered in such names as the
Representatives may request in writing at least two business days before Closing
Time or the relevant Date of Delivery, as the case may be. It is understood that
each Underwriter has authorized the Representatives, for its account, to accept
delivery of, receipt for, and make payment of the purchase price for, the
Initial Securities and the Option Securities, if any, which it has agreed to
purchase. Merrill Lynch, individually and not as a representative of the
Underwriters, may (but shall not be obligated to) make payment of the purchase
price for the Initial Securities or the Option Securities, if any, to be
purchased by any Underwriter whose check has not been received by Closing Time
or the relevant Date of Delivery, as the case may be, but such payment shall not
relieve such Underwriter from its obligations hereunder. The certificates for
the Initial Securities and the Option Securities will be made available for
examination and packaging by the Representatives not later than l0:00 A.M. on
the last business day prior to the Closing Time or the relevant Date of
Delivery, as the case may be.
Section 3. Covenants of the Company. The Company covenants with each
Underwriter as follows:
(a) The Company, subject to Section 3(b), will comply with the
requirements of Rule 430A, and will notify the Representatives immediately, and
confirm the notice in writing, (i) of the effectiveness of the Registration
Statement and any amendment thereto (including any post-effective amendment),
(ii) of the receipt of any comments from the Commission, (iii) of any request by
the Commission for any amendment to the Registration Statement or any amendment
or supplement to the Prospectus or for additional information, and (iv) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or the initiation of any proceedings for that purpose.
The Company will make every reasonable effort to prevent the issuance of any
stop order and, if any stop order is issued, to obtain the lifting thereof at
the earliest possible moment.
(b) The Company will give the Representatives notice of its intention to
file or prepare any amendment to the Registration Statement (including any post-
effective amendment or Rule 462(b) Registration Statement) or any amendment or
supplement to the Prospectus (including any revised prospectus that the Company
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proposes for use by the Underwriters in connection with the offering of the
Securities which differs from the prospectus on file at the Commission at the
time the Registration Statement becomes effective, whether or not such revised
prospectus is required to be filed pursuant to Rule 424(b) of the 1933 Act
Regulations), will furnish the Representatives with copies of any such
amendment, Rule 462(b) Registration Statement or supplement a reasonable amount
of time prior to such proposed filing or use, as the case may be, and will not
file any such amendment, Rule 462(b) Registration Statement or supplement or use
any such prospectus to which the Representatives or counsel for the Underwriters
shall reasonably object.
(c) The Company will deliver to the Representatives five conformed copies
of the Registration Statement as originally filed and of each amendment thereto
(including exhibits filed therewith or incorporated by reference therein) and
will also deliver to the Representatives such number of conformed copies of the
Registration Statement as originally filed and of each amendment thereto
(without exhibits) for each of the Underwriters as the Representatives shall
reasonably request.
(d) As soon as reasonably practicable after the Registration Statement
becomes effective, and from time to time during the period when the Prospectus
is required to be delivered under the 1933 Act or the 1934 Act, the Company will
furnish to each Underwriter such number of copies of the Prospectus, any
documents incorporated therein by reference, and any amendments and supplements
thereto, as such Underwriter may reasonably request for the purposes
contemplated by the 1933 Act or the 1934 Act or the respective applicable rules
and regulations of the Commission thereunder.
(e) If, during the period specified in paragraph (d), any event shall
occur as a result of which it is necessary, in the opinion of counsel for the
Underwriters, to amend or supplement the Prospectus in order to make the
Prospectus not misleading in the light of the circumstances existing at the time
it is delivered to a purchaser, the Company will forthwith amend or supplement
the Prospectus so that, as so amended or supplemented, the Prospectus will not
include an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances existing at the time it is delivered to a purchaser, not
misleading, and the Company will furnish to the Underwriters a reasonable number
of copies of such amendment or supplement.
(f) The Company will endeavor, in cooperation with the Underwriters, to
qualify the Securities for offering and sale under the applicable securities
laws of such states and other jurisdictions of the United States and Canada as
the Representatives may designate; provided, however, that the Company shall not
be
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obligated to qualify as a foreign corporation in any jurisdiction in which it is
not so qualified. In each jurisdiction in which the Securities have been so
qualified, the Company will file such statements and reports as may be required
by the laws of such jurisdiction to continue such qualification in effect for a
period of not less than one year from the effective date of the Registration
Statement.
(g) The Company will make generally available to its security-holders as
soon as practicable, but not later than 50 days after the close of the period
covered thereby, an earnings statement (in form complying with the provisions of
Rule 158 of the 1933 Act Regulations) covering a twelve month period beginning
not later than the first day of the Company's fiscal quarter next following the
"effective date" (as defined in said Rule 158) of the Registration Statement.
(h) If, at the time that the Registration Statement becomes effective, any
information shall have been omitted therefrom in reliance upon Rule 430A of the
1933 Act Regulations, then promptly following the execution of the Pricing
Agreement, the Company will prepare, and file or transmit for filing with the
Commission in accordance with such Rule 430A and Rule 424(b) of the 1933 Act
Regulations, copies of an amended Prospectus, or, if required by such Rule 430A,
a post-effective amendment to the Registration Statement, containing all
information so omitted.
(i) The Company intends to use the net proceeds received by it from the
sale of the Securities in the manner specified in the Prospectus under "Use of
Proceeds."
(j) The Company will use its best efforts to effect the listing of the
Securities on the New York Stock Exchange.
(k) During a period of 90 days after the date of the Prospectus, the
Company will not, without Merrill Lynch's prior written consent, directly or
indirectly, sell, offer to sell, grant any option for the sale of, or otherwise
dispose of any common stock of the Company or any securities convertible into or
exercisable or exchangeable for such common stock, or warrants to purchase such
common stock owned by the Company or with respect to which the Company has the
power of disposition. The Company shall also, concurrently with the execution of
this Agreement, deliver an agreement executed by each of the executive officers
of the Company, and each of the directors of the Company and Citicorp Venture
Capital, Ltd., pursuant to which each such person or entity agrees, not to,
directly or indirectly, sell, offer to sell, grant any option for the sale of,
or otherwise dispose of any common stock of the Company or any securities
convertible into or exercisable or exchangeable for such common stock, or
warrants to purchase such common stock owned by such person or with respect to
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<PAGE>
which such person has the power of disposition for a period of 90 days after the
date of the Prospectus without the prior written consent of Merrill Lynch.
Notwithstanding the foregoing, during such period (i) the Company may grant
stock options pursuant to the Company's existing stock option plans, (ii) the
Company may issue shares of its common stock upon the exercise of any options or
warrants or the conversion of any convertible securities outstanding on the date
hereof and (iii) the Company's Employee Savings Plan. In addition, during such
90-day period Citicorp Venture Capital, Ltd. or any such executive officer or
director may transfer any securities of the Company held by such person pursuant
to applicable laws of descent and distribution or among such person's Family
Group or Affiliates (as defined below); provided that the restrictions contained
in this paragraph shall continue to be applicable to such securities after any
such transfer and provided further that the transferees of such securities shall
have agreed in writing delivered to the Representatives to be bound by the
provisions of this paragraph following any such transfer. "Family Group" means,
with respect to any individual, such person's spouse and descendants (whether
natural or adopted) and any trust solely for the benefit of such person and/or
such person's spouse and/or descendants and "Affiliate" means, with respect to
each holder of the Company's securities, any other person, entity or investment
fund controlling, controlled by or under common control with such person.
(l) The Company, during the period when the Prospectus is required to be
delivered under the 1933 Act or the 1934 Act, will file all documents required
to be filed with the Commission pursuant to the 1934 Act within the time periods
required by the 1934 Act and the 1934 Act Regulations.
Section 4. Payment of Expenses. The Company will pay or cause to be paid
all expenses incident to the performance of the obligations under this
Agreement, including (i) the preparation, printing and filing of the
Registration Statement (including financial statements and exhibits) as
originally filed and of each amendment thereto, (ii) the preparation, issuance
and delivery of the certificates for the Securities to the Underwriters,
including any stock or other transfer taxes and any stamp or other duties
payable upon the sale, issuance or delivery of the Securities to the
Underwriters, (iii) the fees and disbursements of the Company's counsel,
accountants and other advisors, (iv) the qualification of the Securities under
securities laws in accordance with the provisions of Section 3(f) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Underwriters in connection therewith (which shall not exceed $3,000) and in
connection with the preparation of the Blue Sky Survey and any supplement
thereto, (v) the printing and delivery to the Underwriters of copies of each
preliminary prospectus and of the Prospectus and any amendments or supplements
thereto, (vi) the preparation, printing and delivery to the Underwriters of
copies of the Blue Sky Survey and any supplement
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<PAGE>
thereto (which shall not exceed $3,000), (vii) the fees and expenses of any
transfer agent or registrar for the Securities, (viii) the filing fees incident
to the review by the NASD of the terms of the sale of the Securities, and (ix)
the fees and expenses incurred in connection with the listing of the Securities
on the New York Stock Exchange.
If this Agreement is terminated by the Representatives in accordance with
the provisions of Section 5 or Section 9(a)(i), the Company shall reimburse the
Underwriters for all of their reasonable out-of-pocket expenses, including the
reasonable fees and disbursements of counsel for the Underwriters.
The provisions of this Section shall not affect any agreement which the
Company and the Selling Shareholder may make for the allocation or sharing of
such expenses and costs.
Section 5. Conditions of the Underwriters' Obligations'. The several
obligations of the Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company and the Selling Shareholder herein
contained, to the performance by the Company and the Selling Shareholder of
their respective obligations hereunder, and to the following further conditions:
(a) The Registration Statement, including any Rule 462(b) Registration
Statement, has become effective and at Closing Time no stop order suspending the
effectiveness of the Registration Statement shall have been issued under the
1933 Act or proceedings therefor initiated or overtly threatened by the
Commission, and any request on the part of the Commission for additional
information shall have been complied with to the reasonable satisfaction of
counsel to the Underwriters. A prospectus containing the Rule 430A Information
shall have been filed with the Commission in accordance with Rule 424(b) (or a
post-effective amendment providing such information shall have been filed and
declared effective in accordance with the requirements of Rule 430A).
(b) At Closing Time the Representatives shall have received an opinion,
dated as of Closing Time, of Kirkland & Ellis, counsel for the Company, in
substantially the form of Exhibit B hereto.
(c) At Closing Time, the Representatives shall have received an opinion of
John R. Dye, Associate General Counsel of Citigroup Inc., counsel for the
Selling Shareholder (satisfactory to the Representatives and counsel for the
Underwriters), dated as of Closing Time, to the effect that:
(i) This Agreement and the Pricing Agreement have been duly executed
and delivered by or on behalf of the Selling Shareholder.
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(ii) The Selling Shareholder is the sole registered owner of the
Securities to be sold by the Selling Shareholder at such time pursuant to
this Agreement; the Selling Shareholder has corporate power and authority
(A) to enter into this Agreement and the Pricing Agreement and (B) to sell,
transfer and deliver the Securities to be sold by the Selling Shareholder
under this Agreement.
(iii) Upon payment pursuant to this Agreement for the Securities to
be sold by the Selling Shareholders pursuant thereto, delivery of such
Securities, as directed by the Underwriters, to Cede or such other nominee
as may be designated by DTC, registration of such Securities in the name of
Cede or such other nominee and crediting of such Securities on the books of
DTC to "securities accounts" (as defined in Section 8-501 of the UCC) of
the respective Underwriters (assuming that neither DTC nor any such
Underwriter has notice of any adverse claim (as such phrase is defined in
Section 8-105 of the UCC) to such Securities), (A) DTC shall be a
"protected purchaser" of such Securities within the meaning of Section 8-
303 of the UCC; and (B) under Section 8-501 of the UCC, each Underwriter
will acquire a valid "security entitlement" (as defined in Section 8-102 of
the UCC) to the Securities being so purchased by or on behalf of such
Underwriter, and, (C) to the extent governed by the UCC, no action based on
any "adverse claim" (as defined in Section 8-102 of the UCC) to such
Securities (or security entitlement with respect thereto) may properly be
asserted against such Underwriter with respect to such security
entitlement; it being understood that for the purpose of this opinion, such
counsel has assumed that when such payment, delivery, registration and
crediting occur, (x) such Securities will have been registered in the name
of Cede or another nominee designated by DTC, in each case on the Company's
share registry in accordance with its certificate of incorporation, by-laws
and applicable law, (y) appropriate entries to the securities accounts of
the several Underwriters on the records of DTC will have been made pursuant
to the UCC and (z) DTC is a "clearing corporation" (as defined in Section
8-102 of the UCC).
(d) At Closing Time, the Representatives shall have received an opinion,
dated as of Closing Time, of Davis Polk & Wardwell, counsel for the
Underwriters, opining that (i) this Agreement and the Pricing Agreement have
been duly authorized, executed and delivered by the Company; (ii) to such
counsel's knowledge, the Registration Statement has become effective under the
1933 Act, no stop order suspending its effectiveness has been issued and no
proceedings for that purpose are pending before or contemplated by the
Commission; and (iii) the Registration Statement and the Prospectus and any
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supplement or amendment thereto (except for financial statements and other
financial data contained or incorporated by reference therein as to which no
opinion need be expressed) comply as to form in all material respects with the
1933 Act. In giving such opinion, such counsel may state that their opinion and
belief are based upon their participation in the preparation of the Registration
Statement and Prospectus and any amendments or supplements thereto (other than
the documents incorporated by reference) and review and discussion of the
contents thereof (including documents incorporated therein by reference), but
are without independent check or verification except as specified.
(e) At Closing Time there shall not have been, since the date hereof or
since the respective dates as of which information is given in the Prospectus,
any material adverse change in the condition, financial or otherwise, or in the
earnings or business affairs of the Company and its Subsidiaries considered as
one enterprise, whether or not arising in the ordinary course of business (a
"Material Adverse Change"), and the Representatives shall have received a
certificate on behalf of the Company and signed by the Chief Executive Officer,
President, Executive Vice President or a Vice President of the Company and the
chief financial or chief accounting officer of the Company, dated as of Closing
Time, to the effect that (i) there has been no such Material Adverse Change,
(ii) the representations and warranties in Section 1(a) hereof are true and
correct in all material respects with the same force and effect as though
expressly made at and as of Closing Time, (iii) the Company has complied with
all material agreements and satisfied all conditions on its part to be performed
or satisfied at or prior to Closing Time, and (iv) no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceedings
for that purpose have been initiated or overtly threatened by the Commission. As
used in this Section 5(e), the term "Prospectus" means Prospectus in the form
first used to confirm sales of the Securities.
(f) At Closing Time the Representatives shall have received a certificate
from the Selling Shareholder, dated as of Closing Time, to the effect that (i)
the representations and warranties of the Selling Shareholder contained in
Section 1(b) are true and correct in all material respects with the same force
and effect as though expressly made at and as of Closing Time and (ii) the
Selling Shareholder has complied with all material agreements pursuant to this
Agreement and the Pricing Agreement and satisfied all conditions on its part to
be performed or satisfied at or prior to Closing Time.
(g) The Representatives shall have received a letter on and as of the
Closing Time, in form and substance satisfactory to the Representatives from
KPMG LLP, independent public accountants, with respect to the financial
statements and certain financial information contained in or incorporated by
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reference into the Registration Statement and the Prospectus and substantially
confirming the substance of the letter delivered to you by KPMG LLP on the date
of the Pricing Agreement.
(h) At Closing Time and at each Date of Delivery, if any, counsel for the
Underwriters shall have been furnished with such documents as they may
reasonably require for the purpose of enabling them to pass upon the issuance
and sale of the Securities as contemplated herein, or in order to evidence the
accuracy of any of the representations or warranties, or the fulfillment of any
of the conditions, herein contained; and all proceedings taken by the Company
and the Selling Shareholder in connection with the issuance and sale of the
Securities as herein contemplated shall be reasonably satisfactory in form and
substance to the Representatives and counsel for the Underwriters.
(i) At Closing Time, the Securities shall have been approved for listing
on the New York Stock Exchange, subject only to official notice of issuance.
(j) At Closing Time the Representatives shall have received a properly
completed and accurate U.S. Internal Revenue Service Form W-9, in accordance
with the instructions thereto, to establish to the satisfaction of the
Underwriters that the Selling Shareholder is exempt from backup withholding of
U.S. federal income tax.
(k) In the event that the Underwriters exercise their option provided in
Section 2(b) hereof to purchase all or any portion of the Option Securities, the
representations and warranties of the Company contained herein and the
statements in any certificates furnished by the Company hereunder shall be true
and correct as of each Date of Delivery and, at the relevant Date of Delivery,
the Representatives shall have received:
(i) A certificate, dated such Date of Delivery, of the Chief
Executive Officer, President, Executive Vice President or a Vice President
of the Company and of the chief financial or chief accounting officer of
the Company confirming that the certificate delivered at the Closing Time
pursuant to Section 5(e) hereof remains true and correct as of such Date of
Delivery.
(ii) The favorable opinion of counsel for the Company, in form
satisfactory to counsel for the Underwriters, dated such Date of Delivery,
relating to the Option Securities to be purchased on such Date of Delivery
and otherwise to the same effect as the opinion required by Section 5(b)
hereof.
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(iii) The favorable opinion of Davis Polk & Wardwell, counsel for
the Underwriters, dated such Date of Delivery, to the same effect as the
opinion required by Section 5(d) hereof.
(iv) A letter from KPMG LLP, in form and substance satisfactory to
the Representatives and dated such Date of Delivery, substantially the same
in form and substance as the letter furnished to the Representatives
pursuant to Section 5(g) hereof.
If any condition specified in this Section shall not have been fulfilled
when and as required to be fulfilled, this Agreement may be terminated by the
Representatives by notice to the Company and the Selling Shareholder at any time
at or prior to Closing Time, and such termination shall be without liability of
any party to any other party except as provided in Section 4 hereof.
Section 6. Indemnification.
(a) The Company agrees to indemnify and hold harmless each Underwriter
and each person, if any, who controls any Underwriter within the meaning of
Section 15 of the 1933 Act to the extent and in the manner set forth in clauses
(i), (ii) and (iii) below. In addition, the Selling Shareholder agrees,
severally and not jointly, with the Company to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the 1933 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), including the information deemed to be part of
the Registration Statement pursuant to Rule 430A(b) or Rule 434 of the 1933
Act Regulations, if applicable, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the foregoing indemnity agreement with respect to any
preliminary prospectus shall not inure to the benefit of any Underwriter
from whom the person asserting any such losses, claims, damages or
liabilities purchased Securities, or any person controlling such
Underwriter, if a copy of the relevant Prospectus (as then amended or
20
<PAGE>
supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such
Underwriter to such person, if required by law so to have been delivered,
at or prior to the written confirmation of the sale of the Securities to
such person, and if such Prospectus (as so amended or supplemented) would
have cured the defect giving rise to such losses, claims, damages or
liabilities;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any untrue statement or omission, or any such alleged
untrue statement or omission, if, and only if, such settlement, relating to
an untrue statement or omission of the Company, is effected with the
written consent of the Company or if such settlement, relating to an untrue
statement or omission of the Selling Shareholder, is effected with the
written consent of the Selling Shareholder; and
(iii) against any and all expense whatsoever, as incurred (including,
subject to Section 6(c) hereof, the fees and disbursements of counsel
chosen by Merrill Lynch), reasonably incurred in investigating, preparing
or defending against any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission described in
(i) above, or any such alleged untrue statement or omission, to the extent
that any such expense is not paid under (i) or (ii) above and is otherwise
required to be paid by the terms of (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through Merrill Lynch expressly for use in the Registration
Statement (or any amendment thereto) or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto); and provided further, that
the Selling Shareholder shall have no obligation or liability under this Section
6 except with respect to loss, liability, claim, charge or expense arising out
of information relating to the Selling Shareholder furnished in writing by or on
behalf of the Selling Shareholder expressly for use in the Registration
Statement (or any amendment thereto) or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto).
21
<PAGE>
(b) Each Underwriter severally agrees to indemnify and hold harmless the
Company, its directors, each of its officers who signed the Registration
Statement, each person, if any, who controls the Company within the meaning of
Section 15 of the 1933 Act, the Selling Shareholder and each person, if any, who
controls the Selling Shareholder within the meaning of Section 15 of the 1933
Act against any and all loss, liability, claim, damage and expense described in
the indemnity contained in subsection (a) of this Section, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in the Registration Statement (or any amendment thereto) or any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company by such Underwriter through Merrill Lynch expressly for use in
the Registration Statement (or any amendment thereto) or such preliminary
prospectus or the Prospectus (or any amendment or supplement thereto).
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
which it may have otherwise than on account of this indemnity agreement. An
indemnifying party may participate at its own expense in the defense of any such
action. In no event shall the indemnifying parties be liable for fees and
expenses of more than one counsel (in addition to one local counsel) separate
from their own counsel for all indemnified parties in connection with any one
action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances.
(d) The liability of the Selling Shareholder under the indemnity
provisions contained in this Section 6, the contribution provisions contained in
Section 7 and for any breach of warranty set forth in Section 1 shall be limited
to an amount equal to the proceeds received by the Selling Shareholder from the
Underwriters in the offering.
Section 7. Contribution. If the indemnification provided for in Section 6
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Selling Shareholder on the one hand and the Underwriters on the other hand from
the offering of the Securities pursuant to this Agreement or (ii) if the
allocation provided by clause (i) is not permitted by applicable law, in such
proportion as is appropriate to
22
<PAGE>
reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the Company and the Selling Shareholder on the one hand
and of the Underwriters on the other hand in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company and the Selling Shareholder
on the one hand and the Underwriters on the other hand in connection with the
offering of the Securities pursuant to this Agreement shall be deemed to be in
the same respective proportions as the total net proceeds from the offering of
the Securities pursuant to this Agreement (before deducting expenses) received
by the Company and the Selling Shareholder and the total underwriting discount
received by the Underwriters, in each case as set forth on the cover of the
Prospectus.
The relative fault of the Company and the Selling Shareholder on the one
hand and the Underwriters on the other hand shall be determined by reference to,
among other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company or the Selling Shareholder or by the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The Company, the Selling Shareholder and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this Section 7 were
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this Section
7. The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section 7 shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission.
23
<PAGE>
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company or the
Selling Shareholder within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act shall have the same rights to contribution as the Company or
the Selling Shareholder, as the case may be. The Underwriters' respective
obligations to contribute pursuant to this Section 7 are several in proportion
to the number of Initial Securities set forth opposite their respective names in
Schedule A hereto and not joint.
The provisions of this Section shall not affect any agreement between the
Company and the Selling Shareholder with respect to contribution.
Section 8. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement and
the Pricing Agreement, or contained in certificates of officers of the Company
or the Selling Shareholder submitted pursuant hereto, shall remain operative and
in full force and effect, regardless of any investigation made by or on behalf
of any Underwriter or controlling person, or by or on behalf of the Company or
the Selling Shareholder and shall survive delivery of the Securities to the
Underwriters.
Section 9. Termination of Agreement. (a) The Representatives may terminate
this Agreement, by notice to the Company and the Selling Shareholder, at any
time at or prior to Closing Time (i) if there has been, since the date of this
Agreement or since the respective dates as of which information is given in the
Prospectus, any Material Adverse Change in the condition, financial or
otherwise, or in the earnings or business affairs of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) if there has occurred any material adverse
change in the financial markets in the United States or internationally or any
outbreak of hostilities or escalation of any existing hostilities or other
calamity or crisis, the effect of which is such as to make it, in the judgment
of the Representatives, impracticable to market the Securities or to enforce
contracts for the sale of the Securities, or (iii) if trading in the Common
Stock has been suspended by the Commission, or if trading generally on either
the American Stock Exchange, the New York Stock Exchange or the Nasdaq National
Market has been suspended, or minimum or
24
<PAGE>
maximum prices for trading have been fixed, or maximum ranges for prices for
securities have been required, by either of said Exchanges, by the NASD or by
order of the Commission or any other governmental authority, or if a banking
moratorium has been declared by either Federal or New York State authorities. As
used in this Section 9(a), the term "Prospectus" means the Prospectus in the
form first used to confirm sales of Securities.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party except as
provided in Section 4 hereof. Notwithstanding any such termination, the
provisions of Sections 1, 6, 7 and 8 shall remain in effect.
Section 10. Agreements of the Selling Shareholder. The Selling
Shareholder agrees with the Representatives and the Company:
(a) To pay or to cause to be paid all transfer taxes, if any, with respect
to the transfer to the several Underwriters of the Securities to be purchased by
them from the Selling Shareholders, and the Representative of the Underwriters
will pay or cause to be paid any additional stock transfer taxes resulting from
any further transfers;
(b) To do and perform all things to be done and performed under this
Agreement applicable to such Selling Shareholder prior to Closing Time and to
satisfy all conditions precedent to the delivery of the Securities applicable to
such Selling Shareholders pursuant to this Agreement; and
(c) Not to offer to sell, grant any option for the sale of, or otherwise
dispose of any common stock of the Company or any securities convertible into or
exercisable or exchangeable for such common stock, or warrants to purchase such
common stock owned by the Selling Shareholder or with respect to which the
Selling Shareholder has the power of disposition, other than to the Underwriters
pursuant to this Agreement, for a period of 90 days after the date of the
Prospectus without the prior written consent of Merrill Lynch. In addition,
during such 90-day period the Selling Shareholder may transfer any securities of
the Company held by the Selling Shareholder to its Affiliates; provided that the
restrictions contained in this paragraph shall continue to be applicable to such
securities after any such transfer and provided further that the transferees of
such securities shall have agreed in writing delivered to the Representatives to
be bound by the provisions of this paragraph following any such transfer.
Section 11. Default by One or More of the Underwriters. If one or more of
the Underwriters shall fail at Closing Time to purchase the Initial Securities
which it is obligated to purchase under this Agreement and the Pricing Agreement
25
<PAGE>
(the "Defaulted Securities"), the Representatives shall have the right, within
24 hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth. If, however, the Representatives shall not have
completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
Initial Securities, each of the non-defaulting Underwriters shall be obligated,
severally and not jointly, to purchase the full amount thereof in the
proportions that their respective underwriting obligations hereunder bear to the
underwriting obligations of all non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the Initial
Securities, this Agreement shall terminate without liability on the part of any
non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default that does not result in a termination of
this Agreement, either the Representatives or the Company or the Selling
Shareholder shall have the right to postpone Closing Time for a period not
exceeding seven days in order to effect any required changes in the Registration
Statement or the Prospectus or in any other documents or arrangements.
Section 12. Default by the Company or the Selling Shareholder. If the
Company or the Selling Shareholder shall fail at Closing Time or at any Date of
Delivery to sell and deliver the number of Securities which it is obligated to
sell hereunder, then this Agreement shall terminate without liability on the
part of any non-defaulting party.
No action taken pursuant to this Section 12 shall relieve the Company or
the Selling Shareholder from its respective liability, if any, in respect of
such default.
Section 13. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representatives c/o Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner and Smith Incorporated at North Tower, World
Financial Center, New York, New York 10281-1201, attention of . (fax # );
notices to the Company shall be directed to it at 2835 KEMET Way,
26
<PAGE>
Simpsonville, South Carolina 29681, attention of Glenn H. Spears (fax # 864-963-
6493) with a copy (which shall not constitute notice) to: H. Kurt von Moltke,
Kirkland & Ellis, 200 E. Randolph, Chicago, Illinois 60601 (fax # 312-861-2200);
and notices to the Selling Shareholder shall be directed to ., attention of .
(fax #).
Section 14. Parties. This Agreement and the Pricing Agreement shall each
inure to the benefit of and be binding upon the Underwriters, the Company and
the Selling Shareholder and their respective successors. Nothing expressed or
mentioned in this Agreement or the Pricing Agreement is intended or shall be
construed to give any person, firm or corporation, other than the Underwriters,
the Company and the Selling Shareholder and their respective successors and the
controlling persons and officers and directors referred to in Sections 6 and 7
and their respective successors, heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this Agreement or the
Pricing Agreement or any provision herein or therein contained. This Agreement
and the Pricing Agreement and all conditions and provisions hereof and thereof
are intended to be for the sole and exclusive benefit of the Underwriters, the
Company and the Selling Shareholder and their respective successors, and said
controlling persons and officers and directors and their respective successors,
heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Securities from any Underwriter shall be deemed to
be a successor by reason merely of such purchase.
Section 15. Governing Law and Time. This Agreement and the Pricing
Agreement shall be governed by and construed in accordance with the laws of the
State of New York applicable to agreements made and to be performed in said
State. Specified times of day refer to New York City time.
27
<PAGE>
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company and the Selling Shareholder a counterpart
hereof, whereupon this instrument, along with all counterparts, will become a
binding agreement among the Underwriters, the Company and the Selling
Shareholder in accordance with its terms.
Very truly yours,
KEMET CORPORATION
By: _____________________
Name:
Title:
CITIGROUP FOUNDATION
By: _____________________
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
SALOMON SMITH BARNEY INC.
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: _________________________
Authorized Signatory
For themselves and as Representatives of the other Underwriters named in
Schedule A hereto.
28
<PAGE>
SCHEDULE A
<TABLE>
<CAPTION>
Number of
Underwriter Initial Securities
- ----------- ------------------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith Incorporated........
Salomon Smith Barney Inc..................................
---------
Total.................................................... 5,000,000
=========
</TABLE>
Sch A-1
<PAGE>
SCHEDULE B
<TABLE>
<CAPTION>
Maximum
Number of Number of
Initial Securities Option Securities
Name to be Sold to be Sold
- ---- ------------------- ------------------
<S> <C> <C>
KEMET Corporation................. 2,500,000 750,000
Citigroup Foundation.............. 2,500,000 --
--------- ----------
Total............................. 5,000,000 750,000
========= ==========
</TABLE>
Sch B-1
<PAGE>
EXHIBIT A
KEMET CORPORATION
(a Delaware corporation)
5,000,000 Shares of Common Stock, $0.01 par value
Pricing Agreement
January 13, 2000
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Salomon Smith Barney Inc.
as Representatives of the several Underwriters
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
Reference is made to the Purchase Agreement, dated January 13, 2000 (the
"Purchase Agreement"), relating to the purchase by the several Underwriters
named in Schedule A thereto, for whom Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated and Salomon Smith Barney Inc. are acting as
representatives (the "Representatives"), of the above shares of Common Stock
(the "Initial Securities"), of KEMET Corporation (the "Company").
Pursuant to Section 2 of the Purchase Agreement, the Company and Citigroup
Foundation (the "Selling Shareholder") agree with each Underwriter as follows:
1. The public offering price per share for the Initial Securities,
determined as provided in said Section 2, shall be $..
2. The purchase price per share for the Initial Securities to be
paid by the several Underwriters shall be $. (the "Purchase Price"),
A-1
<PAGE>
being an amount equal to the public offering price set forth above less $.
per share.
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company and the Selling Shareholder a counterpart
hereof, whereupon this instrument, along with all counterparts, will become a
binding agreement among the Underwriters, the Company and the Selling
Shareholder in accordance with its terms.
Very truly yours,
KEMET CORPORATION
By: _____________________
Name:
Title:
CITIGROUP FOUNDATION
By: _____________________
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
SALOMON SMITH BARNEY INC.
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: _________________________
Authorized Signatory
For themselves and as Representatives of the other Underwriters named in
Schedule A to the Purchase Agreement.
A-2
<PAGE>
EXHIBIT B
January ., 2000
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Salomon Smith Barney Inc.
as Representatives of the Several Underwriters
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
We are issuing this opinion letter in our capacity as special legal counsel
to KEMET Corporation (the "Company") in response to the requirement in Section
5(b) of the Purchase Agreement dated January ., 2000 (the "Purchase Agreement")
among the Company, Citigroup Foundation and the underwriters named in Schedule A
thereto (the "Underwriters"). All capitalized terms used herein and not defined
herein shall have the meanings given to such terms in the Purchase Agreement.
In arriving at the opinions expressed herein, among other things, we have
examined the following:
(a) the registration statement on Form S-3 (Registration No. 333-92963)
filed by the Company with the Securities and Exchange Commission (the
"Commission") on December 17, 1999 for the purpose of registering the
offering of the Securities under the Securities Act of 1933, as
amended (the "Securities Act") (which registration statement, as
amended by pre-effective Amendment No. 1 and pre-effective Amendment
No. 2 and as constituted at the time pre-effective Amendment No. .
became effective, is herein called the "Registration Statement");
(b) the Company's prospectus dated January ., 2000, covering the offering
of the Securities through the Underwriters, in the form which includes
the initial public offering price and related terms (the
"Prospectus");
B-1
<PAGE>
Merrill Lynch & Co., et. al.
January ., 2000
Page 2
(c) an executed original of the Purchase Agreement;
(d) an executed original of the Pricing Agreement dated January ., 2000
(the "Pricing Agreement") among the Company, Citigroup Foundation and
Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated and Salomon Smith Barney Inc., for themselves and as
representatives of the other Underwriters;
(e) a specimen certificate for the Securities issued by the Company;
(f) a certified copy of resolutions adopted by the Company's Board of
Directors on October 20, 1999 and a certified copy of resolutions
adopted on January ., 2000 by the Pricing Committee appointed in those
Board resolutions; and
(g) copies of all certificates and other documents delivered in connection
with the purchase and sale of the Securities issued by the Company
under the Purchase Agreement and the Pricing Agreement on the date
hereof.
Subject to the assumptions, qualifications, exclusions and other
limitations which are identified in this letter, we advise you that:
Each of the Company and KEMET Electronics Corporation ("KEMET Electronics") was
duly incorporated under the General Corporation Law of the State of Delaware.
1. Each of the Company, KEMET Electronics and KEMET Services Corporation
("KEMET Services") is a corporation existing and in good standing under the
General Corporation Law of the State of Delaware.
2. Each of the Company, KEMET Electronics and KEMET Services is qualified to
do business as a foreign corporation and is in good standing in the
jurisdictions set forth on Schedule A hereto.
3. The issuance of the Securities to be sold by the Company on the date hereof
pursuant to the Purchase Agreement and the Pricing Agreement has been duly
authorized and when appropriate certificates representing those
B-2
<PAGE>
Merrill Lynch & Co., et. al.
January ., 2000
Page 3
Securities are duly countersigned by the Company's transfer agent/registrar
and delivered to the Underwriters against payment of the agreed
consideration therefor in accordance with the Purchase Agreement and the
Pricing Agreement, those Securities will be validly issued, fully paid and
non-assessable. The issuance of those Securities is not subject to any
preemptive rights under the terms of the General Corporation Law of the
State of Delaware or under the Company's Certificate of Incorporation or
any similar rights under any contractual provision of which we have actual
knowledge.
4. The shares of capital stock of the Company outstanding prior to the
issuance of the Securities on the date hereof have been duly authorized and
are validly issued, fully paid and non-assessable. The shares of capital
stock of each of KEMET Electronics and KEMET Services outstanding on the
date hereof have been duly authorized and are validly issued, fully paid
and non-assessable. Based solely upon our review of the stock ledgers of
each of KEMET Electronics and KEMET Services, the Company is the record
holder of all of the outstanding shares of capital stock of each of KEMET
Electronics and KEMET Services. To our actual knowledge, there is no
currently outstanding security interest that may be perfected by possession
and which has been granted by the Company or any of its direct or indirect
subsidiaries in any of the outstanding shares of capital stock of KEMET
Electronics or KEMET Services except in connection with that Credit
Agreement, dated as of October 18, 1996, among the Company, as borrower,
Wachovia Bank of Georgia, N.A., as agent, ABN AMRO Bank N.V. Atlanta
Agency, as co-agent, and the Banks named therein, as amended.
5. The Company's authorized capital stock is as set forth under the heading
"Capitalization" in the Prospectus and conforms in all material respects to
the description of the terms thereof contained under the heading
"Description of Capital Stock" in the Prospectus.
6. The Company has the corporate power to enter into and perform its
obligations under the Purchase Agreement and the Pricing Agreement,
including without limitation the corporate power to issue, sell and deliver
the Securities, as contemplated by the Purchase Agreement and the Pricing
Agreement. Each of the Company, KEMET Electronics and KEMET
B-3
<PAGE>
Merrill Lynch & Co., et. al.
January ., 2000
Page 4
Services has the corporate power to own and lease its properties and to
conduct its business as described in the Prospectus.
7. The Company has duly authorized the Purchase Agreement and the Pricing
Agreement. No approval by the stockholders of the Company is required.
8. The Company has duly executed and delivered the Purchase Agreement and the
Pricing Agreement.
9. The information in the Prospectus and Registration Statement under the
heading "Description of Capital Stock" to the extent that it summarizes
laws, governmental rules or regulations or documents is correct in all
material respects.
10. The Company's execution and delivery of the Purchase Agreement and the
Pricing Agreement, the Company's performance of its obligations under the
Purchase Agreement and the Pricing Agreement and the Company's sale of the
Securities to you in accordance with the Purchase Agreement and the Pricing
Agreement do not and will not (i) violate the certificate of incorporation
or bylaws of the Company, (ii) constitute a violation by the Company of any
applicable provision of any law, statute or regulation (except that we
express no opinion in this paragraph with respect to compliance with any
disclosure requirement or any prohibition against fraud or
misrepresentation or as to whether performance of the indemnification or
contribution provisions in the Purchase Agreement would be permitted) or
(iii) breach, or result in a default under, or result in the creation or
imposition of any lien upon or with respect to any of the properties of the
Company, KEMET Electronics or KEMET Services pursuant to any of the
agreements set forth on Schedule B hereto (except for such breaches or
defaults which have been previously waived, and provided that we express no
opinion as to compliance with any financial test or cross-default provision
in any such agreement).
11. The Company was not required to obtain any consent, waiver, approval,
authorization or order of any court or governmental authority for the
issuance, delivery and sale of the Securities under the Purchase Agreement
and the Pricing Agreement except for the order by the Commission declaring
the Registration Statement effective.
B-4
<PAGE>
Merrill Lynch & Co., et. al
January ., 2000
Page 5
12. To our actual knowledge, no legal or governmental proceedings are pending
or overtly threatened to which the Company or any of its subsidiaries is a
party or to which the property or assets of the Company or any of its
subsidiaries is subject that are required under Item 103 of Regulation S-K
under the Act to be disclosed in the Prospectus but that are not so
disclosed. We have no actual knowledge of any contract to which the Company
or any of its subsidiaries is a party or to which any of its property is
subject that has caused us to conclude that such contract is required to be
described in the Prospectus but is not so described or is required to be
filed as an exhibit to the Registration Statement but has not been so
filed.
13. A member of the Commission's staff has advised us by telephone that the
Commission's Division of Corporation Finance, pursuant to authority
delegated to it by the Commission, has entered an order declaring the
Registration Statement effective under the Securities Act on January .,
2000 (the "effective date") and we have no actual knowledge that any stop
order suspending its effectiveness has been issued or that any proceedings
for that purpose are pending before, or overtly threatened by, the
Commission. The Prospectus was transmitted on January ., 2000 for filing
with the Commission pursuant to Rule 424(b)( ) promulgated under the
Securities Act.
14. To our knowledge, no holder of any security of the Company has any right to
require registration of shares of Common Stock or any other security of the
Company, except for any rights under the Registration Agreement, dated
December 21, 1990, as amended, between the Company, Citicorp Venture
Capital, Ltd. and certain other investors and senior managers of the
Company, which rights in connection with the public offering of the
Securities have either been waived, exercised or allowed to lapse.
..........
The purpose of our professional engagement was not to establish factual
matters, and preparation of the Registration Statement involved many
determinations of a wholly or partially nonlegal character. We make no
representation that we have independently verified the accuracy, completeness or
fairness of the Prospectus or Registration Statement or that the actions taken
in connection with the preparation of the Registration Statement or Prospectus
B-5
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Merrill Lynch & Co., et. al
January ., 2000
Page 6
(including the actions described in the next paragraph) were sufficient to cause
the Prospectus or Registration Statement to be accurate, complete or fair. We
are not passing upon and do not assume any responsibility for the accuracy,
completeness or fairness of the Prospectus or the Registration Statement except
to the extent otherwise explicitly indicated in numbered paragraphs 5 and 9
above.
We can however confirm that we have participated in conferences with
representatives of the Company, representatives of the Underwriters, counsel for
the Underwriters and representatives of the independent accountants for the
Company during which disclosures in the Registration Statement and Prospectus
and related matters were discussed. In addition, we have reviewed certain
corporate records furnished to us by the Company. We were not retained by the
Company to prepare the periodic reports, proxy statements, or other materials
incorporated in the Prospectus or Registration Statement, and our knowledge
about these materials is limited.
Based upon our participation in the conferences and our document review
identified in the preceding paragraph, our understanding of applicable law and
the experience we have gained in our practice thereunder and relying as to
matters of fact on statements of officers and other representatives of the
Company, we can, however, advise you that nothing has come to our attention that
has caused us to conclude that (i) the Registration Statement at its effective
date contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading or (ii) the Prospectus at the date it bears or on the
date of this letter contained an untrue statement of a material fact or omitted
to state a material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading or (iii)
as of the effective date, either the Registration Statement or the Prospectus
appeared on its face not to be responsive in all material respects to the
requirements of Form S-3.
..........
Except for the activities described in the immediately preceding section of
this letter, we have not undertaken any investigation to determine the facts
upon which the advice in this letter is based.
We have assumed for purposes of this letter: each document we have reviewed
for purposes of this letter is accurate and complete, each such document
B-6
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Merrill Lynch & Co., et. al.
January ., 2000
Page 7
that is an original is authentic, each such document that is a copy conforms to
an authentic original, and all signatures on each such document are genuine;
that the Purchase Agreement, the Pricing Agreement and every other agreement we
have examined for purposes of this letter constitutes a valid and binding
obligation of each party to that document and that each such party has satisfied
all legal requirements that are applicable to such party to the extent necessary
to entitle such party to enforce such agreement (except that we make no such
assumption with respect to the Company); and that you have acted in good faith
and without notice of any fact which has caused you to reach any conclusion
contrary to any of the advice provided in this letter. We have also made other
assumptions which we believe to be appropriate for purposes of this letter.
In preparing this letter we have relied without independent verification
upon: (i) information contained in certificates obtained from governmental
authorities; (ii) factual information represented to be true in the Purchase
Agreement and other documents specifically identified at the beginning of this
letter as having been read by us; (iii) factual information provided to us by
the Company or its representatives; and (iv) factual information we have
obtained from such other sources as we have deemed reasonable. We have assumed
that there has been no relevant change or development between the dates as of
which the information cited in the preceding sentence was given and the date of
this letter and that the information upon which we have relied is accurate and
does not omit disclosures necessary to prevent such information from being
misleading. For purposes of numbered paragraph (2), we have relied exclusively
upon certificates issued by governmental authorities in the relevant
jurisdictions and such opinion is not intended to provide any conclusion or
assurance beyond that conveyed by those certificates.
We confirm that we do not have knowledge that has caused us to conclude
that our reliance and assumptions cited in the two immediately preceding
paragraphs are unwarranted. Whenever this letter provides advice about (or based
upon) our knowledge of any particular information or about any information which
has or has not come to our attention such advice is based entirely on the actual
awareness at the time this letter is delivered on the date it bears by the
lawyers with Kirkland & Ellis at that time who represented the Company in
connection with the offering effected pursuant to the Prospectus and by lawyers
with Kirkland & Ellis who have principal responsibility for representing the
Company on other significant matters.
B-7
<PAGE>
Merrill Lynch & Co., et. al.
January ., 2000
Page 8
Our advice on every legal issue addressed in this letter is based
exclusively on the internal law of New York, the General Corporation Law of the
State of Delaware, or the federal law of the United States, and represents our
opinion as to how that issue would be resolved were it to be considered by the
highest court in the jurisdiction which enacted such law. None of the opinions
or other advice contained in this letter considers or covers: (i) any state
securities (or "blue sky") laws or regulations, (ii) any financial statements or
supporting schedules (or any notes to any such statements or schedules) or other
financial or statistical information set forth or incorporated by reference in
(or omitted from) the Registration Statement or the Prospectus or (iii) any
rules and regulations of the National Association of Securities Dealers, Inc.
relating to the compensation of underwriters. This letter does not cover any
other laws, statutes, governmental rules or regulations or decisions which in
our experience are not usually considered for or covered by opinions like those
contained in this letter or are not generally applicable to transactions of the
kind covered by the Purchase Agreement and the Pricing Agreement.
This letter speaks as of the time of its delivery on the date it bears. We
do not assume any obligation to provide you with any subsequent opinion or
advice by reason of any fact about which we did not have knowledge at the time,
by reason of any change subsequent to that time in any law, other governmental
requirement or interpretation thereof covered by any of our opinions or advice,
or for any other reason.
This letter may be relied upon by the Underwriters only for the purpose
served by the provision in the Purchase Agreement cited in the initial paragraph
of this letter in response to which it has been delivered. Without our written
consent: (i) no person other than the Underwriters may rely on this letter for
any purpose; (ii) this letter may not be cited or quoted in any financial
statement, prospectus, private placement memorandum or other similar document;
(iii) this letter may not be cited or quoted in any other document or
communication which might encourage reliance upon this letter by any person or
for any purposes excluded by
B-8
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Merrill Lynch & Co., et. al.
January ., 2000
Page 9
the restrictions in this paragraph; and (iv) copies of this letter may not be
furnished to anyone for purposes of encouraging such reliance.
Sincerely,
Kirkland & Ellis
B-9
<PAGE>
SCHEDULE A
Foreign Qualifications
<TABLE>
<CAPTION>
Name of Entity States of Foreign Qualification
<S> <C>
KEMET Corporation Alabama, Arizona, California,
Colorado, Florida, Georgia, Illinois,
Indiana, Massachusetts, Maryland,
Michigan, Minnesota, New Jersey, New
York, North Carolina, Ohio,
Pennsylvania, South Carolina, Texas
and Washington
KEMET Electronics Corporation California, New Jersey, North
Carolina, Ohio, South Carolina and
Texas
KEMET Services Corporation Texas
</TABLE>
<PAGE>
SCHEDULE B
Agreements
Credit Agreement, dated as of October 18, 1996, among KEMET Corporation, as
borrower, Wachovia Bank of Georgia, N.A., as agent, ABN AMRO Bank N.V. Atlanta
Agency, as co-agent, and the Banks named therein, as amended by the First
Amendment, Second Amendment, Third Amendment, Fourth Amendment, Fifth Amendment
and Sixth Amendment thereto.
Note Purchase Agreement, dated as of May 1, 1998, among KEMET Corporation and
the eleven purchasers of the Senior Notes named therein.
Demand Note, dated as of November 12, 1997, between KEMET Corporation, as
borrower, and SunTrust Bank, Atlanta, as lender.
<PAGE>
Exhibit 5
---------
[LETTERHEAD OF KIRKLAND & ELLIS]
January 10, 2000
KEMET Corporation
2835 KEMET Way
Simpsonville, South Carolina 29681
Ladies and Gentlemen:
We are acting as special counsel to KEMET Corporation, a Delaware
corporation (the "Company"), in connection with the proposed registration by the
Company of 5,750,000 shares of its Common Stock, par value $0.01 per share (the
"Common Stock"), including 750,000 shares of its Common Stock to cover over-
allotments, if any, pursuant to a Registration Statement on Form S-3, originally
filed with the Securities and Exchange Commission (the "Commission") on December
17, 1999 under the Securities Act of 1933, as amended (the "Act") (such
Registration Statement, as amended or supplemented, is hereinafter referred to
as the "Registration Statement"). Of the shares of Common Stock to be registered
pursuant to the Registration Statement, up to 3,250,000 shares (including
750,000 shares to cover over-allotments, if any) are being offered by the
Company (the "Primary Shares") and up to 2,500,000 shares are being offered by a
certain selling stockholder (the "Secondary Shares").
In that connection, we have examined originals, or copies certified or
otherwise identified to our satisfaction, of such documents, corporate records
and other instruments as we have deemed necessary for the purposes of this
opinion, including (i) the corporate and organizational documents of the Company
and (ii) minutes and records of the corporate proceedings of the Company with
respect to the issuance and sale of the Primary Shares and the original issuance
of the Secondary Shares.
For purposes of this opinion, we have assumed the authenticity of all
documents submitted to us as originals, the conformity to the originals of all
documents submitted to us as copies and the authenticity of the originals of all
documents submitted to us as copies. We have also assumed the legal capacity of
all natural persons, the genuineness of the signatures of persons signing all
documents in connection with which this opinion is rendered, the authority of
such persons signing on behalf of the parties thereto other than the Company and
the due authorization, execution and delivery of all documents by the parties
thereto other than the Company. As to any facts material to the opinions
expressed herein which we have not independently established or verified, we
have relied upon statements and representations of officers and other
representatives of the Company and others.
<PAGE>
KEMET Corporation
January 10, 2000
Page 2
Based upon and subject to the foregoing qualifications, assumptions
and limitations and the further limitations set forth below, we are of the
opinion that:
(1) The Company is a corporation existing and in good standing under
the General Corporation Law of the State of Delaware.
(2) The issuance of the Primary Shares has been duly authorized. When
the Registration Statement becomes effective under the Act, when the Board
of Directors of the Company has taken all necessary action to approve the
issuance and sale of the Primary Shares and when appropriate certificates
representing the Primary Shares are duly countersigned and registered by
the Company's transfer agent/registrar and delivered to the Company's
underwriters against payment of the agreed consideration therefor in
accordance with the underwriting agreement to be executed in connection
with the offering, the Primary Shares will be validly issued, fully paid
and nonassessable.
(3) When the Registration Statement becomes effective under the Act
and when appropriate certificates representing the Secondary Shares are
duly countersigned and registered by the Company's transfer agent/registrar
and delivered to the Company's underwriters against payment of the agreed
consideration therefor in accordance with the underwriting agreement to be
executed in connection with the offering, the Secondary Shares will be
validly issued, fully paid and nonassessable.
Our opinions expressed above are subject to the qualifications that we
express no opinion as to the applicability of, compliance with, or effect of (i)
any bankruptcy, insolvency, reorganization, fraudulent transfer, fraudulent
conveyance, moratorium or other similar law affecting the enforcement of
creditors' rights generally, (ii) general principles of equity (regardless of
whether enforcement is considered in a proceeding in equity or at law), (iii)
public policy considerations which may limit the rights of parties to obtain
certain remedies and (iv) any laws except the General Corporation Law of the
State of Delaware. We advise you that issues addressed by this letter may be
governed in whole or in part by other laws, but we express no opinion as to
whether any relevant difference exists between the laws upon which our opinions
are based and any other laws which may actually govern. For purposes of the
opinion in numbered paragraph (1), we have relied exclusively upon a recent
certificate issued by the Delaware Secretary of State and such opinion is not
intended to provide any conclusion or assurance beyond that conveyed by such
certificate. We have assumed without investigation that there has been no
relevant change or development between the date of such certificate and the date
of this letter.
We hereby consent to the filing of this opinion with the Commission as
Exhibit 5.1 to the Registration Statement. We also consent to the reference to
our firm under the heading "Legal Matters" in the Registration Statement. In
giving this consent, we do not thereby admit that we are
<PAGE>
KEMET Corporation
January 10, 2000
Page 3
in the category of persons whose consent is required under Section 7 of the Act
or the rules and regulations of the Commission. This opinion and consent may be
incorporated by reference in a subsequent registration statement on Form S-3
filed pursuant to Rule 462(b) under the Act with respect to the registration of
additional securities for sale in the offering or offerings contemplated by the
Registration Statement.
We do not find it necessary for the purposes of this opinion, and
accordingly we do not purport to cover herein, the application of the securities
or "Blue Sky" laws of the various states to the issuance and sale of the Primary
Shares and the sale of the Secondary Shares.
This opinion is limited to the specific issues addressed herein, and
no opinion may be inferred or implied beyond that expressly stated herein. We
assume no obligation to revise or supplement this opinion should the General
Corporation Law of the State of Delaware be changed by legislative action,
judicial decision or otherwise.
This opinion is furnished to you in connection with the filing of the
Registration Statement, and is not to be used, circulated, quoted or otherwise
relied upon for any other purposes.
Sincerely,
/s/ Kirkland & Ellis
Kirkland & Ellis
<PAGE>
Exhibit 23.1
The Board of Directors
KEMET Corporation
We consent to the use of our report dated April 30, 1999 on the consolidated
financial statements of KEMET Corporation and subsidiaries as of March 31, 1998
and March 31, 1999, and for each of the years in the three year period then
ended included or incorporated herein by reference and to the reference to our
firm under the heading "Experts" in the prospectus.
KPMG LLP
Greenville, South Carolina
January 11, 2000
