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EXHIBIT 1.01
EXECUTION COPY
$125,000,000
CSK AUTO, INC.
11% Senior Subordinated Notes due 2006
PURCHASE AGREEMENT
October 23, 1996
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
XXXXXXX LYNCH, PIERCE, XXXXXX &
XXXXX INCORPORATED
c/x Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Northern Automotive Corporation, an Arizona corporation which on the
Closing Date will change its name to CSK Auto, Inc. (the "COMPANY"), proposes
to issue and sell to the several initial purchasers named above (the "INITIAL
PURCHASERS") $125,000,000 aggregate principal amount of its 11% Senior
Subordinated Notes due 2006 (the "NOTES"). The Company's payment obligations
under the Notes will be guaranteed by each of its subsidiaries and all of its
future U.S. subsidiaries (the "GUARANTORS"). The Notes are to be issued
pursuant to the provisions of an Indenture to be dated as of October 30, 1996
(the "INDENTURE") among the Company, the Guarantors and Xxxxx Fargo Bank,
National Association, as Trustee (the "TRUSTEE").
The Notes will be offered and sold to the Initial Purchasers without being
registered under the United States Securities Act
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of 1933, as amended (the "SECURITIES ACT"), in reliance on an exemption
therefrom. The Initial Purchasers have advised the Company that they will make
an offering of the Notes purchased by them hereunder in accordance with Section
4 hereof on the terms set forth in the Final Offering Memorandum (as defined
below) as soon as practicable after the date hereof as in their judgment is
advisable.
It is understood that on the Closing Date (as defined herein), following
the consummation of the Acquisition and the Financings (each as defined in the
Final Offering Memorandum), the Company will be a wholly-owned subsidiary of
CSK Group, Ltd., a Delaware corporation ("HOLDINGS"). In connection with the
Acquisition, Holdings, CSK Holdings, Ltd., a Delaware corporation that as of
the Closing Date will be merged with and into Holdings, The Carmel Trust, a
trust governed by the laws of Canada ("CARMEL") and certain entities listed as
"purchasers" on the signature pages thereto (the "INITIAL INVESTCORP GROUP"),
entered into a Stock Purchase Agreement (the "STOCK PURCHASE AGREEMENT") dated
as of September 29, 1996 pursuant to which the Initial Investcorp Group will,
on the Closing Date, among other things, acquire a 51% common equity interest
in Holdings, whereupon the Initial Investcorp Group shall acquire control of
the Company. Concurrent with the closing of the Acquisition, the parties
thereto, as well as the Company, will enter into a Stockholders' Agreement (the
"STOCKHOLDERS' AGREEMENT"). It is also understood that the Company will,
concurrently with the closing hereunder, enter into a Credit Agreement
(together with the related guarantees and collateral documents required to be
delivered by the CSK Parties on the Closing Date, the "SENIOR BANK FACILITY")
with certain lenders and The Chase Manhattan Bank, as administrative agent, as
part of the Financings. The Company, Holdings and the Guarantors are
hereinafter referred to collectively as the "CSK PARTIES".
In connection with the sale of the Notes, the Company has prepared a
preliminary Offering Memorandum dated October 9, 1996 (the "PRELIMINARY
OFFERING MEMORANDUM") and a final Offering Memorandum dated October 23, 1996
(the "FINAL OFFERING MEMORANDUM" and, with the Preliminary Offering Memorandum,
each an "OFFERING MEMORANDUM") setting forth or including a description of the
terms of the Notes, the Acquisition and Financings (including, the terms of the
offering), a description of the Company and any material developments relating
to the Company occurring after the date of the most recent financial statements
included therein.
The CSK Parties and the Initial Purchasers will enter into a Registration
Rights Agreement (the "REGISTRATION RIGHTS AGREEMENT") concurrently with the
issuance of the Notes. Pursuant to the Registration Rights Agreement, under
the circumstances and the terms set forth therein, the CSK Parties will agree
to file with the Securities and Exchange Commission
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(the "COMMISSION"): (i) a registration statement on Form S-1 or S-4 (the
"EXCHANGE OFFER REGISTRATION STATEMENT") relating to an offer (the "EXCHANGE
OFFER") to the holders of Notes to exchange their Notes for an issue of notes
(the "NEW NOTES") registered under the Securities Act and otherwise identical
in all material respects to the Notes or, alternatively, (ii) in certain
circumstances, a shelf registration statement (the "SHELF REGISTRATION
STATEMENT") to cover resales of Notes by holders who satisfy certain conditions
relating to the provision of information in connection with the Shelf
Registration Statement. This Agreement, the Indenture, the Notes and the
Registration Rights Agreement are hereinafter referred to collectively as the
"OPERATIVE DOCUMENTS".
1. Agreements to Sell and Purchase. On the basis of the representations
and warranties contained in this Purchase Agreement (this "AGREEMENT"), and
subject to its terms and conditions, the Company agrees to issue and sell, and
each Initial Purchaser agrees, severally and not jointly, to purchase from the
Company the principal amount of Notes set forth opposite the name of such
Initial Purchaser in Schedule I hereto, at 97% of the principal amount thereof
(the "PURCHASE PRICE").
2. Delivery and Payment. Delivery of and payment for the Notes shall be
made at 10:00 A.M., New York City time, on October 30, 1996 (the "CLOSING
DATE") in immediately available funds and at such place as the Initial
Purchasers shall designate. Certificates for the Notes shall be registered in
such names and issued in such denominations as the Initial Purchasers shall
request in writing not later than two business days prior to the Closing Date.
Such certificates shall be made available to the Initial Purchasers for
inspection not later than 9:30 A.M., New York City time, on the business day
next preceding the Closing Date. Certificates evidencing the Notes shall be
delivered on the Closing Date with any transfer taxes thereon duly paid by the
Company, against payment of the Purchase Price therefor in same day funds to
the order of the Company or as the Company may direct. The Closing Date and
the location of delivery of and the form of payment for the Notes may be varied
by agreement between the Initial Purchasers and the Company.
3. Agreements of the CSK Parties.
(a) The Company agrees to advise the Initial Purchasers promptly and, if
requested by them, to confirm such advice in writing of the happening of any
event during the period referred to in paragraph (d) below which makes any
statement of a material fact made in the Final Offering Memorandum untrue or
which requires the making of any additions to or changes in such Offering
Memorandum in order to make such statement not misleading.
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(b) The Company agrees to furnish to the Initial Purchasers during the
period referred to in paragraph (d) below as many copies of the Preliminary
Offering Memorandum, the Final Offering Memorandum and any supplements and
amendments thereto as they may reasonably request.
(c) The Company agrees not to make any amendment or supplement to either
Offering Memorandum of which the Initial Purchasers shall not previously have
been advised or to which they shall reasonably object and to prepare, promptly
upon their reasonable request, any amendment or supplement to either Offering
Memorandum which may be necessary or advisable in connection with the offering
of the Notes by the Initial Purchasers.
(d) The Company agrees that if, during such period as the Offering
Memorandum shall be required to be distributed by an Initial Purchaser in
connection with Exempt Resales (as defined herein) (the "OFFERING PERIOD"), any
event shall occur as a result of which, in the opinion of counsel for the
Initial Purchasers, it becomes necessary to amend or supplement the Final
Offering Memorandum in order to make the statements therein, in the light of
the circumstances when such Offering Memorandum is delivered to a purchaser,
not misleading, or if it is necessary to amend or supplement such Offering
Memorandum to comply with any law, forthwith to prepare an appropriate
amendment or supplement to such Offering Memorandum so that the statements in
such Offering Memorandum, as so amended or supplemented, will not, in the light
of the circumstances when it is so delivered, be misleading, or so that such
Offering Memorandum will comply with law, and to furnish to the Initial
Purchasers and to such dealers as the Initial Purchasers shall specify such
number of copies thereof as the Initial Purchasers or such dealers may
reasonably request.
(e) The Company and the Guarantors agree to cooperate with the Initial
Purchasers and their counsel in connection with the registration or
qualification of the Notes for offer and sale by the Initial Purchasers and by
dealers under the state securities or Blue Sky laws of such jurisdictions as
the Initial Purchasers may request, to continue such qualification in effect so
long as required for distribution of the Notes and to file such consents to
service of process (except general consents to service of process) or other
documents as may be necessary in order to effect such registration or
qualification; provided, however, that in connection therewith neither the
Company nor the Guarantors shall be required to qualify as a foreign
corporation or to file a general consent to service of process in any
jurisdiction where it is not so qualified or so subject.
(f) The Company and the Guarantors agree during a period of five years
following the date of this Agreement, to deliver to each of you promptly upon
their becoming available, copies of all
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current, regular and periodic reports filed by the Company and the Guarantors
with the Commission or any securities exchange or with any governmental
authority succeeding to any of the Commission's functions.
(g) The Company and Holdings agree to use the proceeds from the sale of
the Notes and other Financings in the manner specified in the Final Offering
Memorandum under the caption "Use of Proceeds".
(h) The Company agrees to pay all costs, expenses, fees and taxes incident
to (i) the preparation, printing, filing and distribution of each Offering
Memorandum, Exchange Offer Registration Statement and any Shelf Registration
Statement (including financial statements and all amendments and supplements,
in the case of each Offering Memorandum, prior to or during the Offering Period
and, in the case of the Exchange Offer Registration Statement and any Shelf
Registration Statement, during the period such registration statement shall be
kept effective pursuant to the terms of the Registration Rights Agreement, but
not including fees and disbursements of counsel to the Initial Purchasers),
(ii) the delivery of this Agreement, the Indenture, the Registration Rights
Agreement and all other agreements, memoranda, correspondence and other
documents delivered in connection with the offering of the Notes or the New
Notes (including in each case any fees and disbursements of the Trustee and its
counsel relating to such delivery, but not including fees and disbursements of
counsel to the Initial Purchasers), (iii) the registration or qualification of
the Notes and the New Notes for offer and sale under the securities or Blue Sky
laws of the several states (including the reasonable fees and disbursements of
counsel for the Initial Purchasers relating to such registration or
qualification and memoranda relating thereto), (iv) furnishing such copies of
each Offering Memorandum and all amendments and supplements thereto as may be
requested for use in connection with the offering or sale of the Notes by the
Initial Purchasers or by dealers to whom Notes may be sold, (v) any fees
charged by rating agencies for the rating of the Notes and the New Notes, (vi)
the fees and expenses, if any, incurred in connection with the admission of the
Notes for trading on the PORTAL trading system and the deposit of the global
Notes with the Depository Trust Company, (vii) any stamp or transfer taxes
payable in connection with the sale of the Notes to the Initial Purchasers,
(viii) the issuance, transfer and delivery by the Company of the Notes and the
New Notes (including, without limitation, the fees of the Company's transfer
agent and the registrar, the cost of its personnel and other internal costs,
the costs of printing and engraving the certificates representing the Notes and
the New Notes and any stock and securities transfer taxes payable thereon),
(ix) the reasonable fees and expenses of the Trustee and the fees and
disbursements of counsel for the Trustee, (x) the costs and expenses of the
Company relating to investor presentations on any
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"road show" undertaken in connection with the marketing of the offering of the
Notes, including without limitation, expenses associated with the production of
road show slides and graphics, travel, meals and lodging expenses of officers
of the Company (provided that the costs of charter aircraft during the "road
show" to make investor presentations will be paid equally by the Company and
the Initial Purchasers and the cost of ground transportation, conference rooms
and other meeting places used on the "road show" to make investor presentations
will be paid by the Initial Purchasers) and (xi) the performance by each CSK
Party of their obligations under this Agreement; provided that, except as
otherwise provided in this Section 3(h) and Section 6, the Initial Purchasers
shall pay their own costs and expenses, including the fees and disbursements of
their counsel.
(i) The Company agrees, during the period beginning on the date hereof and
continuing to and including the Closing Date, not to offer, sell, contract to
sell or otherwise dispose of any debt securities or rights to purchase debt
securities of the Company substantially similar to the Notes (other than the
Notes) without the prior written consent of the Initial Purchasers.
(j) Each CSK Party agrees to use its reasonable best efforts (i) to do and
perform all things required or necessary to be done and performed under this
Agreement by it prior to the Closing Date and (ii) to satisfy or cause to be
satisfied all conditions precedent on its part to the delivery of the Notes.
(k) Each CSK Party agrees not to sell, offer for sale or solicit offers to
buy or otherwise negotiate, and not to permit its affiliates (as defined in
Regulation 501(b) of Regulation D under the Securities Act, "AFFILIATES") to
sell, offer for sale or solicit offers to buy or otherwise negotiate, directly
or through any agent, in respect of any security (as defined in the Securities
Act) the offering of which security will be integrated with the sale of the
Notes in a manner which would require the registration of the Notes under the
Securities Act and to take all action that is appropriate to assure that its
offerings of other securities will not be integrated for purposes of the
Securities Act with the offerings contemplated hereby.
(l) Each CSK Party agrees, except pursuant to the Exchange Offer or a
Shelf Registration Statement, not to solicit any offer to buy or sell the Notes
by means of any form of general solicitation or general advertising (as those
terms are used in Regulation D under the Securities Act ("REGULATION D")) in
any manner involving a public offering within the meaning of Section 4(2) of
the Securities Act, including: (i) any advertisement, article, notice or other
communication published in any newspaper, magazine or similar medium or
broadcast over television or radio and (ii) any seminar or meeting whose
attendees have been invited by any general solicitation or general advertising.
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(m) Each CSK Party agrees not to engage, or permit any person acting on
behalf of any CSK Party to engage, in any directed selling efforts within the
meaning of Regulation S under the Securities Act ("REGULATION S") with respect
to the Notes, and to comply, and cause each such person so acting to comply,
with the offering restrictions requirement of Regulation S.
(n) Each CSK Party agrees, so long as any of the Notes remain outstanding
and are "restricted securities" within the meaning of Rule 144(a)(3) under the
Securities Act, during any period in which it is not subject to Section 13 or
15(d) of the Exchange Act, to make available to any holder of Notes in
connection with any sale thereof and any prospective purchaser of Notes from
such holder, in each case upon request, the information specified in, and
meeting the requirements of, Rule 144A(d)(4) under the Securities Act.
(o) Each CSK Party agrees not to, and not to permit any of its affiliates
(as defined in Rule 144(a)(1)) to, (i) purchase any of the Notes unless such
Notes are held in the form of a Certificated Note (as defined in the Final
Offering Memorandum) and (ii) resell any of the Notes, except as permitted by
the Indenture.
4. Offering of Notes; Restrictions on Transfer.
Each Initial Purchaser, as to itself, represents, warrants and covenants
that:
(a) it is a qualified institutional buyer as defined in Rule 144A under
the Securities Act (a "QIB") with such knowledge and experience in financial
and business matters as are necessary to evaluate the merits and risks of an
investment in the Notes, and is not acquiring the Notes with a view to any
distribution thereof;
(b) it will not solicit offers for, or offer to sell, Notes by any
form of general solicitation or general advertising (as those terms are used in
Regulation D) or in any manner involving a public offering within the meaning
of Section 4(2) of the Securities Act;
(c) it will solicit offers for Notes only from, and will offer such Notes
only to (collectively, "EXEMPT RESALES"):
(i) in the case of offers inside the United States, persons that it
reasonably believes to be (A) QIBs or (B) other "institutional accredited
investors" (as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act) that, prior to their purchase of the Notes, deliver to the
Initial Purchasers a letter containing the representations
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and agreements set forth in Exhibit A to the Final Offering Memorandum and
(ii) in the case of offers outside the United States in reliance
upon Regulation S, persons other than U.S. persons ("foreign purchasers,"
which term shall include dealers or other professional fiduciaries in the
United States acting on a discretionary basis for foreign beneficial owners
(other than an estate or trust)), who, in each case, in purchasing such
Notes are deemed to have represented and agreed as provided in the Final
Offering Memorandum under the caption "Notice to Investors";
(d) it understands that the Notes have not been registered under the
Securities Act and may not be offered or sold within the United States or to,
or for the account or benefit of, U.S. persons except in accordance with Rule
144A or Regulation S under the Securities Act or pursuant to another exemption
from the registration requirements of the Securities Act;
(e) in connection with sales outside the United States, it has not offered
the Notes, and will not offer and sell the Notes to, or for the account or
benefit of U.S. persons (i) as part of their distribution at any time and (ii)
otherwise until 40 days after the later of the date hereof and the Closing Date
except, in either case, in accordance with Rule 903 of Regulation S or as
otherwise permitted in paragraph (c) above; neither it, nor its Affiliates nor
any person acting on its behalf has engaged or will engage in any directed
selling efforts (within the meaning of Regulation S) with respect to the Notes;
and it, its Affiliates and any such other persons have complied and will comply
with the offering restrictions requirement of Regulation S;
(f) it agrees that, at or prior to confirmation of sales of the Notes, it
will have sent to each distributor, dealer or person receiving a selling
concession, fee or other remuneration that purchases Notes from it during the
restricted period a confirmation or notice substantially to the following
effect:
The Securities covered hereby have not been registered under the U.S.
Securities Act of 1933 (the "SECURITIES ACT") and may not be offered and
sold within the United States or to, or for the account or benefit of, U.S.
persons (i) as part of their distribution at any time or (ii) otherwise
until 40 days after the later of the commencement of the offering and the
closing date, except in either case in accordance with Regulation S (or
Rule 144A if available) under the Securities Act.
(g) it will comply with all applicable laws and regulations in each
jurisdiction in which it acquires, offers, sells or delivers Notes or has in
its possession or distributes either
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Offering Memorandum or any such other material, in all cases at its own
expense;
(h) it has (i) not offered or sold and will not offer or sell any Notes to
persons in the United Kingdom except to persons whose ordinary activities
involve them in acquiring, holding, managing or disposing or investments (as
principal or agent) for the purposes of their businesses or otherwise in
circumstances which have not resulted and will not result in an offer to the
public in the United Kingdom within the meaning of the Public Offers of
Securities Regulations 1995 ("REGULATIONS"); (ii) complied and will comply with
all applicable provisions of the Financial Services Xxx 0000 and the
Regulations with respect to anything done by it in relation to the Notes in,
from or otherwise involving the U.K.; and (iii) only issued or passed on and
will only issue or pass on to any person in the U.K. any document received by
it in connection with the issue of the Notes if that person is of a kind
described in Article 11(3) of the Financial Services Xxx 0000 (Investment
Advertisements)(Exemptions) Order 1996 or is a person to whom such document may
otherwise lawfully be issued or passed on; and
(i) it understands that the Notes have not been and will not be registered
under the Securities and Exchange Law of Japan, and represents that it has not
offered or sold, and agrees that it will not offer or sell, any Notes, directly
or indirectly in Japan or to or from any resident of Japan, except (i) pursuant
to an exemption from the registration requirements of the Securities and
Exchange Law of Japan and (ii) in compliance with any other applicable
requirements of Japanese law.
Terms used but not otherwise defined in this Section 4 have the meanings
given to them by Regulation S.
5. Representations and Warranties of the CSK Parties. The CSK Parties
jointly and severally represent and warrant to the Initial Purchasers that:
(a) The Final Offering Memorandum (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) was, on the
date of its issuance, and is, at the date hereof, accurate in all material
respects and did not and does not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, and the Final Offering Memorandum (as amended or
supplemented as necessary) will be, as of the Closing Date, accurate in all
material respects and will not contain any untrue statement of a material fact
or omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances, existing at the Closing Date, not
misleading; provided that this representation and warranty shall not apply to
any statements or omissions made
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in reliance upon and in conformity with information relating to the Initial
Purchasers furnished to the Company in writing by or on behalf of such Initial
Purchasers expressly for use therein.
(b) The Preliminary Offering Memorandum was, on the date of its issuance,
accurate in all material respects and did not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in conformity
with information relating to the Initial Purchasers furnished to the Company in
writing by or on behalf of such Initial Purchasers expressly for use therein.
(c) Each CSK Party has been duly organized, is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation, has all requisite corporate power and authority to carry on its
business as it is currently being conducted and as described in each Offering
Memorandum and to own, lease and operate its properties, and is duly qualified
and in good standing as a foreign corporation authorized to do business in each
jurisdiction in which the nature of its business or its ownership or leasing of
property requires such qualification, except where the failure to be so
qualified or have such power or authority would not have a material adverse
effect on the financial condition, earnings, business or operations of the
Company and the Guarantors, taken as a whole ("MATERIAL ADVERSE EFFECT").
(d) Each CSK Party has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Agreement and the other
Operative Documents and, in the case of the Company, to issue, sell and deliver
the Notes to the Initial Purchasers as provided herein and consummate the
Financings, in the case of the Guarantors, to guarantee the Notes and in the
case of Holdings, to consummate the Acquisition and Financings.
(e) All of the outstanding shares of capital stock of, or other ownership
interests in, each of the Guarantors have been duly authorized and validly
issued and are fully paid and non-assessable, and are owned by the Company,
free and clear of any security interest, claim, lien, encumbrance or adverse
interest of any nature, other than (i) the lien under the Senior Bank Facility
to be in effect from and after the Closing Date, (ii) the lien under the Credit
Agreement dated February 15, 1995 (the "EXISTING CREDIT AGREEMENT") in effect
prior to its termination on the Closing Date or (iii) liens which would not
individually or in the aggregate (including the liens specified in (i) and
(ii)) have a Material Adverse Effect.
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(f) The execution, delivery and performance of each Operative Document by
each CSK Party which is a party thereto and compliance by each such CSK Party
with all the provisions thereof, the consummation by the CSK Parties of the
transactions contemplated thereby and the consummation by the CSK Parties of
the Acquisition and Financings will not require any CSK Party to obtain any
consent, approval, authorization or other order of any court, regulatory body,
administrative agency or other governmental body (except (i) such as have been
obtained, (ii) such as may be required under the securities or Blue Sky laws of
various states and (iii) such as may be required under federal securities laws
in connection with the Exchange Offer or the Shelf Registration Statement) 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 any CSK Party or, except
where such conflict or breach would not have a Material Adverse Effect, any
agreement, indenture or other instrument to which a CSK Party is a party or by
which a CSK Party or its property is bound, or violate or conflict with any
laws, administrative regulations or rulings or court decrees applicable to a
CSK Party or its property.
(g) This Agreement has been duly and validly authorized, executed and
delivered by each CSK Party.
(h) The Indenture has been duly and validly authorized by the Company and
the Guarantors and, when duly executed and delivered by the Company and the
Guarantors (assuming the due execution and delivery thereof by the Trustee),
will be the legally valid and binding obligation of the Company and the
Guarantors, enforceable against the Company and the Guarantors in accordance
with its terms, except for (i) the effect of bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and other similar laws relating
to or affecting the rights of creditors generally and (ii) limitations imposed
by federal or state law or equitable principles upon the specific
enforceability of any of the remedies, covenants or other provisions of the
Indenture and upon the availability of injunctive relief or other equitable
remedies. When executed and delivered, the Indenture will conform in all
material respects to the description thereof in the Final Offering Memorandum.
(i) The Notes have been duly and validly authorized for issuance and sale
by the Company to the Initial Purchasers pursuant to this Agreement and, when
issued and authenticated in accordance with the terms of the Indenture and
delivered against payment therefor in accordance with the terms hereof
(assuming the due authentication thereof by the Trustee), will be the legally
valid and binding obligations of the Company enforceable against the Company in
accordance with their terms and entitled to the benefits of the Indenture,
except that the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer or similar laws
affecting
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creditors' rights generally and the availability of equitable remedies may be
limited by equitable principles of general applicability. When issued,
authenticated and delivered, the Notes will conform in all material respects to
the description thereof in the Final Offering Memorandum.
(j) Each of the agreements and other documents comprising the Senior Bank
Facility has been duly authorized by the CSK Parties and, when executed and
delivered by the CSK Parties, will constitute a valid and binding agreement of
the CSK Parties, enforceable in accordance with its terms, except that the
enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or similar laws affecting
creditors' rights generally and the availability of equitable remedies may be
limited by equitable principles of general applicability.
(k) The Registration Rights Agreement has been duly and validly authorized
by the Company and the Guarantors and, when duly executed and delivered by the
Company and the Guarantors, will be the legally valid and binding agreement of
the Company and the Guarantors, enforceable against the Company and the
Guarantors in accordance with its terms, except for (i) the effect of
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and
other similar laws relating to or affecting the rights of creditors generally,
(ii) limitations imposed by federal or state law or equitable principles upon
the specific enforceability of any of the remedies, covenants or other
provisions of the Registration Rights Agreement and upon the availability of
injunctive relief or other equitable remedies and (iii) limitations imposed by
applicable laws and equitable consideration of public policy issues upon the
enforceability of rights to indemnification and contribution under the
Registration Rights Agreement. When executed and delivered, the Registration
Rights Agreement will conform in all material respects to the description
thereof in the Final Offering Memorandum.
(l) Since the respective dates as of which information is given in each
Offering Memorandum, except as otherwise stated therein or contemplated
thereby, (i) there has been no material adverse change, or any development that
is reasonably likely to result in a prospective material adverse change in the
financial condition, earnings, business or operations of the Company and the
Guarantors, taken as a whole, (ii) there have been no transactions entered into
by the Company or either Guarantor, other than those in the ordinary course of
business, that are material with respect to the Company and the Guarantors,
taken as a whole, (iii) there has not been any material change in the capital
stock, short- term debt or long-term debt of the Company and the Guarantors,
taken as a whole, except in each case as described in each Offering Memorandum
and (iv) except as contemplated by the Acquisition and Financings, there has
been no dividend or distribution of any kind declared, paid or made by
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the Company or either Guarantor on any class of its capital stock.
(m) No CSK Party is in violation of its charter or by-laws or in default
in the performance of any 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 the Guarantors, taken as a whole, to which any CSK Party is a
party or by which any CSK Party or its property is bound, except for any such
violation or default that would not have a Material Adverse Effect.
(n) Except as set forth in each Offering Memorandum, there is
(i) no action, suit or proceeding before or by any court, arbitrator
or governmental agency, body or official, domestic or foreign, or to the
knowledge of the Company or the Guarantors, now pending, threatened or
contemplated to which the Company or the Guarantors is or may be a party or
to which the business or property of the Company or the Guarantors is or
may be subject,
(ii) no statute, rule, regulation or order that has been enacted,
adopted or issued by any governmental agency or that, to the knowledge of
the Company or the Guarantors, has been proposed by any governmental body,
and
(iii) no injunction, restraining order or order of any nature by a
federal or state court of competent jurisdiction has been or, to the
knowledge of the Company or the Guarantors, may be issued,
that is required to be disclosed in the Final Offering Memorandum in order
to make the statements therein not misleading and that is not so disclosed or
would interfere with or adversely affect the issuance of the Notes or the
consummation of the Acquisition and Financings or in any manner draw into
question the validity of any Operative Document or could reasonably be expected
to have a Material Adverse Effect. No contract, agreement, instrument or
document of a character required to be described in the Final Offering
Memorandum in order to make the statements therein not misleading is not so
described.
(o) Except as disclosed in each Offering Memorandum, neither the Company
nor any Guarantor has violated any foreign, federal, state or local law or
regulation relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("ENVIRONMENTAL LAWS") nor any federal or state law relating to
discrimination in the hiring, promotion or pay of
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employees nor any applicable federal or state wages and hours laws nor any
provisions of the Employee Retirement Income Security Act of 1974, as amended,
or the rules and regulations promulgated thereunder, which in each case could
reasonably be expected to have a Material Adverse Effect.
(p) Except as described in each Offering Memorandum, the Company and the
Guarantors (i) have all permits, licenses, franchises and authorizations of
governmental or regulatory authorities ("PERMITS"), including, without
limitation, under any applicable Environmental Laws, material to the ownership,
leasing and operation of their properties and the conduct of their business and
(ii) have fulfilled and performed all of their 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,
except where the failure to have, fulfill or perform the same, and except where
any such revocation, termination or impairment, would not have a Material
Adverse Effect. Except as described in each Offering Memorandum, such permits
contain no restrictions that are materially burdensome to the Company and the
Guarantors, taken as a whole.
(q) The costs and liabilities associated with the effect of Environmental
Laws on the business, operations and properties of the Company and the
Guarantors (including without limitation any capital or operating expenditures
required for clean-up, closure of properties or compliance with 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.
(r) The Company has good and marketable title in fee simple to, or has
valid rights to lease or otherwise use, all items of real or personal property
which are material to the business of the Company and the Guarantors, taken as
a whole, in each case free and clear of all liens, encumbrances and defects
that would have a Material Adverse Effect, other than (i) Permitted Liens (as
defined in the Indenture) and (ii) liens pursuant to the Existing Credit
Agreement, which will be terminated as of the Closing Date upon consummation of
the Acquisition and the Financings. No default has occurred or is continuing
under any lease to which the Company is a party which could have a Material
Adverse Effect.
(s) Neither the Company nor any Guarantor is (i) an "investment company"
or a company "controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended (the "INVESTMENT COMPANY ACT") or
(ii) a "holding company" or a "subsidiary company" of a holding company or an
"affiliate" thereof within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
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(t) The financial statements, together with related schedules and notes
forming part of each Offering Memorandum (and any amendment or supplement
thereto), present fairly the financial position, results of operations and
changes in financial position of the Company and the Guarantors on the basis
stated in each Offering Memorandum at the respective dates or for the
respective periods to which they apply; such statements and related schedules
and notes have been prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods involved, except as
disclosed therein; and the other financial and statistical information and data
set forth in each Offering Memorandum (and any amendment or supplement thereto)
is, in all material respects, accurately presented and prepared on a basis
consistent with such financial statements and the books and records of the
relevant entity except to the extent stated therein.
(u) Upon consummation of the Acquisition and Financings (including the
issuance of the Notes), the present fair salable value of the assets of the
Company and the Guarantors, taken as a whole, will exceed the amount that will
be required to be paid on or in respect of its existing debts and other
liabilities (including contingent liabilities) as they become absolute and
matured. The assets of the Company and the Guarantors, taken as a whole, upon
the issuance of the Notes, will not constitute unreasonably small capital to
carry out their businesses as now conducted, including the capital needs of the
Company and the Guarantors, taking into account the projected capital
requirements and capital availability of the Company and the Guarantors.
Neither the Company nor the Guarantors (i) is entering into the Acquisition and
Financings with the intent to hinder, delay, or defraud any entity to which it
is or will become indebted or (ii) will receive less than reasonably equivalent
value in exchange for entering into the Acquisition and Financings.
(v) There are no holders of securities of the Company or the Guarantors
who, by reason of the execution by the Company and the Guarantors of this
Agreement or the consummation of the transactions contemplated hereby or by the
Acquisition and Financings, have the right to request or demand that the
Company or the Guarantors register under the Securities Act securities of the
Company or any Guarantor held by them, except pursuant to the Stockholders'
Agreement or Registration Rights Agreement.
(w) Except as disclosed in each Offering Memorandum, other than this
Agreement, there are no contracts, agreements or understandings between any CSK
Party and any person that would give rise to a valid claim against the Company
or either Guarantor or the Initial Purchasers for a brokerage commission,
finder's fee or like payment in connection with the issuance, purchase or sale
of the Notes.
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(x) The Company does not own any "margin securities" as that term is
defined in Regulations G and U of the Board of Governors of the Federal Reserve
System and none of the proceeds from the sale of the Securities will be used,
directly or indirectly, for the purpose of purchasing or carrying any margin
security, for the purpose of reducing or retiring any indebtedness that was
originally incurred to purchase or carry any margin security.
(y) To the best of the Company's knowledge, Price Waterhouse LLP is an
"independent public accountant", as defined in the Securities Act.
(z) The Company and the Guarantors have complied with all of the
provisions of Florida H.B. 1771, codified as Section 517.075 of the Florida
statutes, and all regulations promulgated thereunder relating to issuers doing
business with the Government of Cuba or with any person or any affiliate
located in Cuba.
(aa) No CSK Party nor any Affiliate of any CSK Party has directly, or
through any agent, (i) sold, offered for sale, solicited offers to buy or
otherwise negotiated in respect of, any security (as defined in the Securities
Act) the offering of which security is or will be integrated with the sale of
the Notes in a manner that would require the registration of the Notes under
the Securities Act or (ii) solicited any offer to buy or sell the Notes by any
form of general solicitation or general advertising (as those terms are used in
Regulation D) in any manner involving a public offering within the meaning of
Section 4(2) of the Securities Act.
(bb) No CSK Party, any Affiliate or any person acting on their behalf
has engaged in any directed selling efforts (as that term is defined in
Regulation S) with respect to the Notes.
(cc) Assuming (a) the accuracy of the Initial Purchasers'
representations and warranties set forth in this Agreement and (b) that the
purchasers who buy the Notes in Exempt Resales are either QIBs, "institutional
investors" or "foreign purchasers" (as each term is defined in Section 4(d) of
this Agreement), it is not necessary, in connection with the sale of the Notes
to the Initial Purchasers, to register the Notes under the Securities Act or to
qualify the Indenture under the Trust Indenture Act of 1939. The Notes satisfy
the eligibility requirements set forth in Rule 144A(d)(3) under the Securities
Act.
(dd) No CSK Party has taken and no CSK Party will take, directly or
indirectly, any action prohibited by Rule 10b-6 of the Securities Exchange Act
of 1934, as amended.
(ee) Except as disclosed in each Offering Memorandum, there are no
business relationships or related party transactions which would be required to
be disclosed by Item 404 of Regulation S-K
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of the Securities and Exchange Commission in a registration statement of the
Company and the Guarantors becoming effective on the date hereof.
(ff) The Acquisition and Financings have been duly authorized by all
requisite corporate action on the part of each CSK Party.
6. Indemnification. (a) Each of the Company and the Guarantors jointly
and severally agrees to indemnify and hold harmless the Initial Purchasers and
each person, if any, who controls each Initial Purchaser within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, and the
respective officers, directors, partners and employees of the Initial
Purchasers (each an "INDEMNIFIED PERSON") from and against any and all losses,
claims, damages, liabilities and judgments caused by any untrue statement or
alleged untrue statement of a material fact contained in either Offering
Memorandum (as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto), or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except (i) insofar as
such losses, claims, damages, liabilities or judgments are caused by any such
untrue statement or omission or alleged untrue statement or omission based upon
information relating to the Initial Purchasers furnished in writing to the
Company by or on behalf of any Initial Purchaser expressly for use therein and
(ii) that, with respect to any such untrue statement or omission or alleged
untrue statement or omission made in the Preliminary Offering Memorandum, the
indemnity agreement contained in this Section 6 shall not inure to the benefit
of the Initial Purchaser from whom the person asserting any such losses,
claims, damages, liabilities and judgments purchased the Notes if the untrue
statement or omission or alleged untrue statement or omission in the
Preliminary Offering Memorandum was corrected in the Final Offering Memorandum.
The Company and the Guarantors shall notify the Initial Purchasers promptly of
the institution, threat or assertion of any claim, proceeding (including
governmental or regulatory investigation) or litigation in connection with the
matters addressed by this Agreement which involve the Company or the Guarantors
or an Indemnified Person.
(b) If any action is brought against any Indemnified Person, based upon
either Offering Memorandum or any amendment or supplement thereto and with
respect to which indemnity may be sought against the Company or the Guarantors,
such Indemnified Person shall promptly notify the Company and the Guarantors,
in writing and the Company and the Guarantors shall assume the defense thereof,
including the employment of counsel reasonably satisfactory to such Indemnified
Person and payment of all fees and expenses. Any Indemnified Person shall have
the right to employ separate counsel in any such action and participate in the
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defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Indemnified Person unless (i) the employment of such counsel
shall have been specifically authorized in writing by the Company and the
Guarantors, (ii) the Company and the Guarantors shall have failed to assume the
defense and employ counsel or (iii) the named parties to any such action
(including any impleaded parties) include both such Indemnified Person and the
Company and the Guarantors, and such Indemnified Person shall have been advised
by such counsel that there may be one or more legal defenses available to it
which are different from or additional to those available to the Company and
the Guarantors (in which case the Company and the Guarantors shall not have the
right to assume the defense of such action on behalf of such Indemnified
Person, it being understood, however, that the Company and the Guarantors shall
not, in connection with any one such action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys (in addition to any local
counsel) for all such Indemnified Persons, which firm shall be designated in
writing by Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation, and that all
such reasonable fees and expenses shall be reimbursed as they are incurred).
(c) Neither the Company nor any Guarantor shall be liable for any
settlement of any such action effected without its written consent, but, if
settled with the written consent of the Company and the Guarantors, the Company
and the Guarantor agree to indemnify and hold harmless any Indemnified Person
from and against any loss or liability by reason of such settlement.
Notwithstanding the immediately preceding sentence, if in any case where the
fees and expenses of counsel are at the expense of the indemnifying party and
an Indemnified Person shall have requested the indemnifying party to reimburse
the Indemnified Person for such fees and expenses of counsel as incurred, such
indemnifying party agrees that it shall be liable for any settlement of any
action effected without its written consent if (i) such settlement is entered
into more than sixty business days after the receipt by such indemnifying party
of the aforesaid request and (ii) such indemnifying party shall have failed to
reimburse the Indemnified Person in accordance with such request for
reimbursement prior to the date of such settlement. No indemnifying party
shall, without the prior written consent of the Indemnified Person, effect any
settlement of any pending or threatened proceeding in respect of which any
Indemnified Person is or could have been a party and indemnity could have been
sought hereunder by such Indemnified Person, unless such settlement includes an
unconditional release of such Indemnified Person from all liability on claims
that are the subject matter of such proceeding.
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(d) Each Initial Purchaser agrees to indemnify and hold harmless the
Company, the Guarantors, each person controlling the Company within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act and their
respective officers, directors, partners and employees (the "CSK INDEMNIFIED
PERSONS"), to the same extent as the foregoing indemnity from the Company and
the Guarantors to such Initial Purchaser but only with reference to information
relating to such Initial Purchaser furnished in writing by or on behalf of such
Initial Purchaser to the Company, expressly for use in either Offering
Memorandum. If any action shall be brought against any CSK Indemnified Person
based on either Offering Memorandum and in respect of which indemnity may be
sought against any Initial Purchaser, such Initial Purchaser shall have the
rights and duties given to the Company and the Guarantors (except that if the
relevant CSK Indemnified Person shall not have assumed the defense thereof,
such Initial Purchaser shall be required to do so, but may employ separate
counsel therein and participate in the defense thereof but the fees and
expenses of such counsel shall be at such Initial Purchaser's expense), and the
CSK Indemnified Persons shall have the rights and duties given to the Initial
Purchasers by Sections 6(b) and (c).
(e) If the indemnification provided for in this Section 6 is unavailable
to an indemnified party in respect of any losses, claims, damages, liabilities
or judgments referred to therein, then each indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages,
liabilities and judgments (i) in such proportion as is appropriate to reflect
the relative benefits received by the indemnifying party on the one hand and
the indemnified party on the other hand from the offering of the Notes or (ii)
if the allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
indemnifying parties and the indemnified party in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or judgments, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the
Guarantors, on the one hand, and the Initial Purchasers, on the other hand,
shall be deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Company and the Guarantors
bear to the total underwriting discounts and commissions received by the
Initial Purchasers, in each case as set forth on the cover page of the Final
Offering Memorandum. The relative fault of the Company and the Guarantors, on
the one hand, and the Initial Purchasers, on the other hand, shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a material fact
relates to information supplied by the Company and the
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Guarantors or an Initial Purchaser and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company and the Guarantors and the Initial Purchasers agree that it
would not be just and equitable if contribution pursuant to this Section 6(e)
were determined by pro rata allocation (even if the Initial Purchasers were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to in the
immediately preceding paragraph. The amount paid or payable by an indemnified
party as a result of the losses, claims, damages, liabilities or judgments
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 6, no Initial Purchaser shall be required to contribute any amount in
excess of the amount by which the total underwriting discount applicable to the
Notes purchased by such Initial Purchaser exceeds the amount of any damages
which such Initial Purchaser has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Initial
Purchasers' obligations to contribute pursuant to this subsection are several
and in proportion to the respective amount of Notes purchased by each Initial
Purchaser hereunder and not joint. No party shall be liable for contribution
with respect to any action or claim settled without its consent, provided that
such consent was not unreasonably withheld.
The indemnity and contribution agreements contained in this Section are in
addition to any liability which the indemnifying persons may otherwise have to
the indemnified persons referred to above.
7. Conditions of Several Obligations of the Initial Purchasers. The
several obligations of the Initial Purchasers under this Agreement are subject
to the satisfaction of each of the following conditions:
(a) All the representations and warranties of each CSK Party contained in
this Agreement shall be true and correct on the Closing Date with the same
force and effect as if made on and as of the Closing Date. The CSK Parties
shall have performed or complied with all of the agreements herein contained
and required to be performed or complied with by them at or prior to the
Closing Date.
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(b) Subsequent to the execution and delivery of this Agreement and prior
to the Closing Date, there shall not have been any downgrading, nor shall any
notice have been given of any intended or potential downgrading, or of any
review for a possible change that does not indicate the direction of the
possible change, in the rating accorded any securities of the Company or any of
the Guarantors by any "nationally recognized statistical rating organization",
as such term is defined for purposes of Rule 436(g)(2) under the Securities
Act.
(c) (i) Since the date of the latest balance sheet included in the Final
Offering Memorandum, there shall not have been any material adverse change, or
any development that is reasonably likely to result in a prospective material
adverse change, in the financial condition, earnings, business or operations of
the Company and the Guarantors, taken as a whole.
(ii) Since the date of the latest balance sheet included in the
Final Offering Memorandum there shall not have been any material adverse
change, or any development involving a prospective material adverse change,
in the capital stock or in the long-term debt of the Company and the
Guarantors from that set forth in the Final Offering Memorandum and, except
as contemplated by the Acquisition and Financings, no dividend or
distribution of any kind shall have been declared, paid or made by the
Company and the Guarantors on any class of their capital stock.
(iii) Neither the Company nor either Guarantor shall have incurred
any liabilities or obligations, direct or contingent, or entered into any
transactions, not in the ordinary course of business, that are material,
individually or in the aggregate, to the Company and the Guarantors, taken as a
whole, other than those reflected in the Final Offering Memorandum.
(d) On the Closing Date, the Initial Purchasers shall have received
certificates dated the Closing Date, signed by the President and the Treasurer
of the Company and Holdings, respectively, confirming the matters set forth in
paragraphs (a), (b) and (c) of this Section as they relate to the CSK Parties.
(e) No action shall have been taken and no statute, rule or regulation or
order shall have been enacted, adopted or issued by any governmental agency
that would as of the Closing Date prevent the issuance of the Notes or the
consummation of the Acquisition and other Financings. No injunction,
restraining order or order of any nature by a federal or state court of
competent jurisdiction shall have been issued as of the Closing Date that would
prevent or interfere with the issuance of the Notes or the consummation of the
Acquisition and other Financings. On the Closing Date, no action, suit or
proceeding shall be pending against or affecting or, to the best knowledge of
any CSK Party,
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threatened against, any CSK Party, before ANY court or arbitrator or any
governmental body, agency or official, except as disclosed in the Final
Offering Memorandum and except for such actions, suits or proceedings that if
adversely determined would not, either individually or in the aggregate, have a
material adverse effect on the issuance of the Notes or would not individually
or in the aggregate have a Material Adverse Effect or in any manner draw into
question the validity of any Operative Document or prevent the consummation of
the Acquisition and Financings.
(f) The Initial Purchasers shall have received on the Closing Date an
opinion (satisfactory to the Initial Purchasers and counsel to the Initial
Purchasers), dated the Closing Date, of Xxxxx Xxxx, Arizona counsel for the
Company and the Guarantors, substantially to the following effect:
(i) The Company is a corporation duly incorporated, validly existing
and in good standing under the laws of its jurisdiction of incorporation
and has the requisite corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Final Offering Memorandum, except where the failure to have such power or
authority would not have a Material Adverse Effect.
(ii) All of the outstanding shares of capital stock of, or other
ownership interests in, each of the Guarantors are owned by the Company,
free and clear of any security interest, claim, lien, encumbrance or
adverse interest of any nature other than the lien under the Senior Bank
Facility.
(iii) The execution, delivery and performance of each Operative
Document and compliance by the Company with all the provisions thereof, the
consummation of the transactions contemplated thereby and the consummation
of the Acquisition and Financings 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.
(iv) The Company has the requisite corporate power and authority to
execute, deliver and perform its obligations under the Operative Documents
and to consummate the Acquisition and Financings.
(v) Each of the Operative Documents to which the Company is a party
has been duly authorized, executed and delivered by the Company.
(vi) The Acquisition and Financings have been duly authorized by
all requisite corporate action on the part of the Company.
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(g) The Initial Purchasers shall have received on the Closing Date an
opinion (satisfactory to the Initial Purchasers and counsel to the Initial
Purchasers), dated the Closing Date, of Xxx Xxxxxx, General Counsel of the
Company, substantially to the following effect:
(i) Each of the Guarantors is a corporation duly incorporated, validly
existing and in good standing under the laws of its jurisdiction of
incorporation and has the requisite corporate power and authority to own,
lease and operate its properties and to conduct its business as described
in the Final Offering Memorandum, except where the failure to have such
power or authority would not have a Material Adverse Effect.
(ii) All of the outstanding shares of capital stock of, or other
ownership interests in, each of the Guarantors have been duly authorized
and validly issued and are fully paid and non-assessable.
(iii) The execution, delivery and performance of each Operative
Document and compliance by each of the Guarantors with all the provisions
thereof, the consummation of the transactions contemplated thereby and the
consummation of the Acquisition and Financings 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 any of the Guarantors.
(iv) Each of the Guarantors has the requisite corporate power and
authority to execute, deliver and perform its obligations under the
Operative Documents and to consummate the Acquisition and Financings.
(v) Each of the Operative Documents to which the Guarantors are a
party has been duly authorized, executed and delivered by such Guarantor;
and
(vi) The Acquisition and Financings have been duly authorized by
all requisite corporate action on the part of each of the Guarantors.
(h) The Initial Purchasers shall have received on the Closing Date an
opinion (satisfactory to the Initial Purchasers and counsel to the Initial
Purchasers), dated the Closing Date, of Xxxxxx Xxxxxx Flattau & Klimpl, LLP,
counsel for the Company and the Guarantors, substantially to the following
effect:
(i) Each of the Company and the Guarantors is duly qualified to do
business as a foreign corporation in good standing in all jurisdictions in
which the nature of the property owned or leased by such person or the
nature of the
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business transacted by such person makes such qualification necessary,
except where failure to be so qualified would not have a Material Adverse
Effect.
(ii) Except as set forth in each Offering Memorandum, there is (a)
no action, suit or proceeding before or by any court, arbitrator or
governmental agency, body or official, domestic or foreign, now pending,
or, to such counsel's knowledge, threatened or contemplated to which any
CSK Party is or may be a party or to which the business or property of any
CSK Party is or may be subject, (b) no statute, rule, regulation or order
that has been enacted, adopted or issued by any governmental agency or, to
such counsel's knowledge, that has been proposed by any governmental body
and (c) no injunction, restraining order or order of any nature by a
federal or state court of competent jurisdiction has been or, to such
counsel's knowledge, may be issued that is required to be disclosed in the
Final Offering Memorandum in order to make the statements therein not
misleading and that is not so disclosed or could reasonably be expected to
have a Material Adverse Effect. No contract, agreement, instrument or
document known to such counsel of a character required to be described in
the Final Offering Memorandum in order to make the statements therein not
misleading is not so described.
(iii) The statements (other than financial, statistical and
accounting data) in the second paragraph under the caption "Management's
Discussion and Analysis of Results of Operation and Financial Condition -
Liquidity and Capital Resources" in the first seven paragraphs under the
caption "Certain Transactions", and under the caption "Business-Legal
Proceedings" in the Final Offering Memorandum, insofar as such statements
constitute a summary of legal matters, documents or proceedings referred to
therein, fairly present the information required with respect to such legal
matters, documents and proceedings in order to make the statements therein
not materially misleading.
(iv) Neither the Company nor either Guarantor is an "investment
company" or a company "controlled" by an investment company within the
meaning of the Investment Company Act of 1940, as amended.
(v) Except as disclosed in each Offering Memorandum, there are no
business relationships or related party transactions known to such counsel
which would be required to be disclosed by Item 404 of Regulation S-K of
the Securities and Exchange Commission in a registration statement of the
Company and the Guarantors becoming effective on the date hereof.
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(vi) In the course of the preparation by the Company of the
Offering Memorandum, such counsel has participated in conferences and
discussions with officers and other representatives of the Company and
others at which the contents of the Final Offering Memorandum were
discussed. Although such counsel has not independently verified and is not
passing upon and does not assume responsibility for the accuracy,
completeness or fairness of the statements and information included in the
Final Offering Memorandum, no facts have come to such counsel's attention
which cause such counsel to believe that the Final Offering Memorandum
(except for any financial statements and notes and schedules thereto, pro
forma financial information, other financial, statistical or accounting
data contained or incorporated by reference therein or information under
the captions "Description of Senior Subordinated Notes", "The Acquisition
and Financings" and "Credit Agreement", as to all of which such counsel
makes no comment), as of the date thereof and as of the date hereof,
contained any untrue statement of a material fact or omitted to state any
material fact necessary to make the statements made therein, in light of
the circumstances under which they are made, not misleading.
(i) The Initial Purchasers shall have received on the Closing Date a copy
of the opinion dated the Closing Date, of Xxxxxx Xxxx & Xxxxxxxx, special
counsel for the Company and the Guarantors, substantially to the following
effect:
(i) Holdings is a corporation duly incorporated, validly existing and
in good standing in the State of Delaware.
(ii) Holdings has the requisite corporate power and authority to
execute, deliver and perform its obligations under this Agreement and to
consummate the Acquisition and Financings.
(iii) The Acquisition and Financings have been duly authorized by all
requisite corporate action on the part of Holdings.
(iv) This Agreement has been duly and validly authorized, executed
and delivered by Holdings.
(v) Assuming that the Indenture and the Registration Rights Agreement
have been duly and validly authorized by each CSK Party which is a party
thereto and, validly executed and delivered by the other parties thereto,
such agreements will be the legally valid and binding agreement of each CSK
Party enforceable against each CSK Party in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer and other similar laws now or hereafter in effect
relating
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to or affecting creditors' rights and remedies generally and to general
principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity) and except to the extent that
indemnification and contribution may be unenforceable.
(vi) Assuming the Notes have been duly authorized and executed by
the Company, when authenticated in accordance with the terms of the
Indenture and delivered to and paid for by the Initial Purchasers in
accordance with the terms of this Agreement (assuming due authentication
thereof by the Trustee), will constitute valid and legally binding
obligations of the Company enforceable against the Company in accordance
with their terms and entitled to the benefits of the Indenture, subject to
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer and other similar laws now or hereafter in effect relating to or
affecting creditors' rights and remedies generally and to general
principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity).
(vii) The execution, delivery and performance of each Operative
Document by each CSK Party which is a party thereto and compliance by each
such CSK Party with all the provisions thereof, and the consummation by the
CSK Parties of the transactions contemplated thereby and the consummation
by the CSK Parties of the Acquisition and Financings will not require any
CSK Party to obtain any consent, approval, authorization or other order of
any court, regulatory body, administrative agency or other governmental
body (except (x) such as have been obtained, (y) such as may be required
under the securities or Blue Sky laws of various states and (z) such as may
be required under federal securities laws in connection with the Exchange
Offer or the Shelf Registration Statement) and will not, to the knowledge
of such counsel, conflict with or constitute a breach of any of the terms
or provisions of, or a default under any agreement, indenture or other
instrument to which a CSK Party is a party or by which a CSK Party or its
property is bound (identified to such counsel in a certificate of a
responsible officer of the Company as being a material agreement, indenture
or other instrument), or violate or conflict with any laws, administrative
regulations or, to the knowledge of such counsel after due inquiry of
responsible officers of the Company, rulings or court decrees applicable to
a CSK Party.
(viii) Except as set forth in each Offering Memorandum, to such
counsel's actual knowledge without independent investigation, no
injunction, restraining order or order of any nature by a federal or state
court of competent jurisdiction has been or, to such counsel's knowledge,
may be issued that would interfere with or adversely affect the issuance of
the Notes or the
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consummation of Acquisition and other Financings or in any manner draw into
question the validity of any Operative Document or other Financings or in
any manner draw into question the validity of any Operative Document.
(ix) The Indenture, the Notes and the Registration Rights Agreement
conform in all material respects to the descriptions thereof contained in
the Final Offering Memorandum.
(x) To the best of such counsel's knowledge, the statements contained
under the captions "Acquisition and Financings", "Credit Agreement",
"Management -1996 Stock Incentive Plan of the Company", the eighth, ninth
and tenth paragraphs of "Certain Transactions", "-Stockholders' Agreement",
"Description of the Senior Subordinated Notes", "ERISA Considerations" and
"Notice to Investors" in the Final Offering Memorandum, insofar as such
statements constitute a summary of legal matters, documents or proceedings
referred to therein, fairly present, taken together in their entirety, the
information provided with respect to such legal matters, documents or
proceedings.
(xi) Assuming the accuracy of the representations and warranties of
the CSK Parties contained in paragraphs (aa),(bb) and (cc) of Section 5
hereof and of the Initial Purchasers contained in Section 4 hereof and
assuming compliance with the covenants of the CSK Parties contained in
Section 3 hereof and with the representations and covenants referred to
under the captions "Private Placement" and "Notice to Investors" in the
Final Offering Memorandum, the issuance and sale of the Notes to the
Initial Purchasers and the initial offering, resale and delivery of the
Notes by the Initial Purchasers, in each case in the manner contemplated in
the Final Offering Memorandum and this Agreement, are exempt from the
registration requirements of the Securities Act of 1933, as amended,
provided that no opinion need be expressed as to any subsequent resales of
the Notes.
Such counsel may state in such opinion that as to certain matters relating
to the Company and the Guarantors they are relying on the opinions of Xxxxx
Xxxx and Xxx Xxxxxx set forth in paragraphs (f) and (g).
(j) All proceedings taken in connection with the sale of the Notes as
herein contemplated shall be reasonably satisfactory in form and substance to
the Initial Purchasers and to Xxxxx Xxxx & Xxxxxxxx, counsel for the Initial
Purchasers, and the Initial Purchasers shall have received on the Closing Date
an opinion, dated the Closing Date, of Xxxxx Xxxx & Xxxxxxxx in form and
substance reasonably satisfactory to the Initial Purchasers.
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(k) At the time this Agreement is executed and delivered by the CSK
Parties and on the Closing Date, the Initial Purchasers shall have received
letters, substantially in the form previously approved by the Initial
Purchasers, from Price Waterhouse LLP, independent public accountants, with
respect to the financial statements and certain financial information contained
in each Offering Memorandum.
(l) The Initial Purchasers shall have received on or before the Closing
Date a copy of a letter from each of Standard & Poor's Ratings Services, a
division of The XxXxxx-Xxxx Companies, Inc., and Xxxxx'x Investors Services
assigning to the Notes ratings of B- and B3, respectively. Such ratings shall
have been confirmed on the Closing Date by the applicable rating agency and
neither of such rating agencies shall have announced that it has its rating of
the Notes under surveillance or review.
(m) The Notes shall be eligible for inclusion in the PORTAL trading
system.
(n) Counsel for the Initial Purchasers shall have been furnished with such
documents as they may reasonably require for the purpose of enabling them to
review or pass upon the matters referred to in this Section 7 in order to
evidence the accuracy, completeness or satisfaction in all material respects of
any of the representations, warranties or conditions herein contained.
(o) Each Operative Document shall have been executed and delivered by each
party thereto and a true and complete copy of each shall have been delivered to
the Initial Purchasers.
(p) No CSK Party shall have failed at or prior to the Closing Date to
perform or comply with any of the agreements contained in any Operative
Document and required to be performed or complied with by such CSK Party at or
prior to the Closing Date.
(q) The Operative Documents, the Stock Purchase Agreement and the
Stockholders' Agreement shall be in full force and effect on the Closing Date.
No waiver, amendment or modification of any provision of the Stock Purchase
Agreement shall have occurred other than any waiver, amendment or modification
which in the Initial Purchasers' reasonable judgment does not make it
impracticable to market the Notes on the terms and in the manner contemplated
in the Final Offering Memorandum.
(r) The Senior Bank Facility shall be in full force and effect on the
Closing Date, and prior to or contemporaneously with the Closing Date, each of
the actions contemplated or required to occur and each of the conditions
contemplated or required to be satisfied on or prior to the closing of the
Senior Bank Facility, shall have occurred or been satisfied and no waiver,
amendment or modification of any provision of the Senior
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Bank Facility shall have occurred, other than any such action or condition or
any such waiver, amendment or modification which in the Initial Purchasers'
reasonable judgment does not make it impracticable to market the Notes on the
terms and in the manner contemplated in the Final Offering Memorandum; and the
Company shall have received the proceeds of the borrowings under the Senior
Bank Facility and the Acquisition and other Financings shall have occurred
prior to or simultaneously with the closing hereunder in the manner described
in the Final Offering Memorandum.
All opinions, certificates, letters and other documents required by this
Section to be delivered by any CSK Party will be in compliance with the
provisions thereof only if they are reasonably satisfactory in form and
substance to the Initial Purchasers. The Company will furnish the Initial
Purchasers with such conformed copies of such opinions, certificates, letters
and other documents as it shall reasonably request.
8. Termination. This Agreement may be terminated at any time prior to
the Closing Date by the Initial Purchasers by notice to the Company if any of
the following has occurred: (i) any CSK Party shall have failed, refused or
been unable to perform in any material respect any agreement on its part then
to be performed under any Operative Document, (ii) since the respective dates
as of which information is given in either Offering Memorandum, any adverse
change in the condition (financial or otherwise), earnings, business,
operations or prospects of the Company and the Guarantors, whether or not
arising in the ordinary course of business, which would, in the Initial
Purchasers' judgment, make it impracticable to market the Notes on the terms
and in the manner contemplated in the Final Offering Memorandum, (iii) any
outbreak or escalation of hostilities or other national or international
calamity or crisis involving the United States or change in economic conditions
or in the financial markets of the United States that, in the Initial
Purchasers' judgment, is material and adverse and would, in the Initial
Purchasers' judgment, make it impracticable to market the Notes on the terms
and in the manner contemplated in the Final Offering Memorandum, (iv) the
suspension or material limitation of trading in securities on the New York
Stock Exchange, the American Stock Exchange or the Nasdaq National Market
System or limitation on prices for securities on any such exchange or national
market system, (v) the enactment, publication, decree or other promulgation of
any federal or state statute, regulation, rule or order of any court or other
governmental authority which in the Initial Purchasers' opinion materially and
adversely affects, or will materially and adversely affect, the financial
condition, earnings, business, operations or prospects of the Company and the
Guarantors, taken as a whole, (vi) the declaration of a banking moratorium by
either federal or New York State authorities or (vii) the taking of any action
by any federal, state or local government or agency
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in respect of its monetary or fiscal affairs which in the Initial Purchasers'
opinion has a material adverse effect on the financial markets in the United
States.
Notwithstanding any termination of this Agreement, the Company shall be
liable for all expenses which it has agreed to pay pursuant to Section 3
hereof. 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 3 hereof
9. Defaulting Initial Purchaser. If either Initial Purchaser shall
default in its obligation to purchase Notes hereunder, the non-defaulting
Initial Purchaser may in its discretion arrange for it or for another party or
parties to purchase such Notes to which such default relates on the terms
contained herein. In the event that within five calendar days after such a
default the non-defaulting Initial Purchaser does not arrange for the purchase
of the Notes to which such default relates as provided in this Section 10, this
Agreement shall terminate without liability of the Company with respect
thereto, but nothing in this Agreement shall relieve a defaulting Initial
Purchaser of its liability, if any, to the other Initial Purchaser and the
Company for damages occasioned by its default hereunder.
10. Miscellaneous. Notices given pursuant to any provision of this
Agreement shall be addressed as follows: (a) if to any CSK Party, to the
Company, 000 Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx Xxxxxxx 00000 , Attention:
Chief Financial Officer, with a copy to Xxxxxx, Xxxx & Xxxxxxxx, 000 Xxxx
Xxxxxx, Xxx Xxxx, XX 00000, Attention: Xxxxxxx X. Xxxxxxx and (b) if to the
Initial Purchasers, to Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation, 000
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: High Yield Group, or in any
case to such other address as the person to be notified may have requested in
writing.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the CSK Parties and their respective
officers and directors and of the Initial Purchasers set forth in or made
pursuant to this Agreement shall remain operative and in full force and effect,
and will survive delivery of and payment for the Notes, regardless of (i) any
investigation, or statement as to the results thereof, made by the Initial
Purchasers or on the Initial Purchasers behalf or by or on behalf of any CSK
Party or their respective officers or directors or any controlling person of
any such CSK Party, (ii) acceptance of and payment for the Notes hereunder or
(iii) termination of this Agreement.
Except as otherwise provided, this Agreement has been and is made solely
for the benefit of and shall be binding upon the CSK
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Parties, the Initial Purchasers, any Indemnified Persons or CSK Indemnified
Persons referred to herein and their respective successors and assigns, all as
and to the extent provided in this Agreement, and no other person shall acquire
or have any right under or by virtue of this Agreement. The term "successors
and assigns" shall not include a purchaser of any of the Notes from the Initial
Purchasers merely because of such purchase.
THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK.
This Agreement may be signed in various counterparts which together shall
constitute one and the same instrument.
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Please confirm that the foregoing correctly sets forth the agreement among the
CSK Parties and the Initial Purchasers.
Very truly yours,
CSK GROUP, LTD.
By:
-------------------------------
Name:
Title:
NORTHERN AUTOMOTIVE CORPORATION
By:
-------------------------------
Name:
Title:
KRAGEN AUTO SUPPLY CO.
By:
-------------------------------
Name:
Title:
XXXXXX'X DISTRIBUTION CO.
By:
-------------------------------
Name:
Title:
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Accepted and agreed to as of the date
first above written.
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
By:
--------------------------------
Name:
Title:
XXXXXXX LYNCH, PIERCE, XXXXXX
& XXXXX INCORPORATED
By:
--------------------------------
Name:
Title:
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SCHEDULE I
INITIAL PURCHASERS PRINCIPAL AMOUNT OF NOTES TO
BE PURCHASED
Xxxxxxxxx, Lufkin & $62,500,000
Xxxxxxxx Securities
Corporation
Xxxxxxx Lynch, Pierce, 62,500,000
Xxxxxx & Xxxxx
Incorporated
Total $125,000,000
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