1
EXHIBIT NO. 1.1
RadioShack Corporation
7 3/8% Notes due 2011
----------
Purchase Agreement
May 8, 2001
Xxxxxxx, Xxxxx & Co.,
Xxxxxxx Xxxxx Barney Inc.
As representatives of the several Purchasers
named in Schedule I hereto,
c/o Goldman, Xxxxx & Co.,
00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000.
Ladies and Gentlemen:
RadioShack Corporation, a Delaware corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to the Purchasers named in Schedule I hereto (the "Purchasers") an aggregate of
$350,000,000 principal amount of the Notes specified above (the "Securities").
1. The Company represents and warrants to, and agrees with, each of the
Purchasers that:
(a) A preliminary offering circular, dated April 30, 2001 (the
"Preliminary Offering Circular") and an offering circular, dated May 8, 2001
(the "Offering Circular"), have been prepared in connection with the offering of
the Securities. Any reference to the Preliminary Offering Circular or the
Offering Circular shall be deemed to refer to and include the Company's most
recent Annual Report on Form 10-K and all subsequent documents filed with the
United States Securities and Exchange Commission (the "Commission") pursuant to
Section 13(a), 13(c) or 15(d) of the United States Securities Exchange Act of
1934, as amended (the "Exchange Act") on or prior to the date of the Preliminary
Offering Circular or the Offering Circular, as the case may be, and any
reference to the Preliminary Offering Circular or the Offering Circular, as the
case may be, as amended or supplemented, as of any specified date, shall be
deemed to include (i) any documents filed with the Commission pursuant to
Section 13(a), 13(c) or 15(d) of the Exchange Act after the date of the
Preliminary Offering Circular or the Offering Circular, as the case may be, and
prior to such specified date and (ii) any Additional Issuer Information (as
defined in Section 5(f)) furnished by the Company prior to the completion of the
distribution of the Securities; and all documents filed under the Exchange Act
and so deemed to be included in the Preliminary Offering Circular or the
Offering Circular, as the case may be, or any amendment or supplement thereto
are hereinafter called the "Exchange Act Reports". The Exchange Act Reports,
when they were or are filed with the
2
Commission, conformed or will conform in all material respects to the applicable
requirements of the Exchange Act and the applicable rules and regulations of the
Commission thereunder. The Preliminary Offering Circular or the Offering
Circular and any amendments or supplements thereto and the Exchange Act Reports
did not and will not, as of their respective dates, 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; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by a Purchaser
through Xxxxxxx, Sachs & Co. expressly for use therein;
(b) Neither the Company nor any of its subsidiaries has sustained since
the date of the latest audited financial statements included in the Offering
Circular any loss or interference with its business (taken as a whole) from
fire, explosion, flood or other calamity, whether or not covered by insurance,
or from any labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Offering Circular and except
for any such loss or interference that has not had and would not reasonably be
expected to have a material adverse effect on the Company and its subsidiaries,
taken as a whole; and, since the respective dates as of which information is
given in the Offering Circular, there has not been any material change in the
capital stock or long-term debt of the Company or any material adverse change,
or any development involving a prospective material adverse change, in or
affecting the general affairs, management, financial position, stockholders'
equity or results of operations of the Company and its subsidiaries taken as a
whole, otherwise than as set forth or contemplated in the Offering Circular;
(c) The Company is a corporation duly incorporated and is validly
existing as a corporation in good standing under the laws of the Delaware, with
power and authority to own its properties and conduct its business as described
in the Offering Circular, and has been duly qualified as a foreign corporation
for the transaction of business and is in good standing under the laws of each
other jurisdiction in which it owns or leases properties or conducts any
business so as to require such qualification, or is subject to no material
liability or disability by reason of the failure to be so qualified in any such
jurisdiction. The Company has no significant subsidiaries ("Significant
Subsidiaries") as such term is defined in Rule 1-02(w) of Regulation S-X of the
Commission;
(d) The Company has an authorized capitalization as set forth in the
Offering Circular, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued and are fully paid and
non-assessable;
(e) The Securities have been duly authorized and, when issued and
delivered by the Company and paid for by the Purchasers pursuant to this
Agreement, will have been duly executed, issued and delivered by the Company and
will constitute valid and legally binding obligations of the Company (assuming
due authentication by the Trustee) entitled to the benefits provided by the
indenture to be dated as of May 11, 2001 (the "Indenture") between the Company
and The Bank of New York, as Trustee (the "Trustee"), under which they are to be
issued, which will be substantially in the form previously delivered to you; the
Indenture has been duly authorized and, when executed and delivered by the
Company and the Trustee, the Indenture will constitute a valid and legally
binding obligation of the Company, enforceable in accordance with its terms,
except as such enforcement may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar laws now or
hereafter in effect relating to or affecting creditors' rights generally and
(ii) general principles of equity (regardless of whether enforceability is
considered in a proceeding at
2
3
law or in equity); the Indenture, when executed and delivered by the Company and
the Trustee, will be in a form which meets the requirements for qualification
under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act");
and the Securities and the Indenture will conform to the descriptions thereof in
the Offering Circular and will be in substantially the form previously delivered
to you;
(f) The Exchange and Registration Rights Agreement among the Company
and the Purchasers to be dated as of May 11, 2001 (the "Registration Rights
Agreement"), which shall be substantially in the form of the draft of the date
hereof, has been duly authorized, and, when executed and delivered by the
Company (assuming due authorization, execution and delivery by the Purchasers),
will constitute a valid and legally binding agreement of the Company enforceable
in accordance with its terms, except as rights to indemnity and contribution may
be limited by applicable law and subject, as to enforcement, to bankruptcy,
insolvency, moratorium, fraudulent conveyance or other similar laws relating to
the enforcement of creditors' rights and general principles of equity
(regardless of whether such enforceability is considered in a proceeding in law
or at equity), and will conform in all material respects to the description
thereof in the Offering Circular;
(g) Prior to the date hereof, neither the Company nor any of its
affiliates has directly or indirectly bid for, purchased or attempted to induce
any person to bid for or purchase, a security in a manner designed to or which
has constituted or which might have been expected to cause or result in
stabilization or manipulation of the price of any long-term debt security of the
Company in connection with the offering of the Securities;
(h) The issuance and sale of the Securities by the Company, the
application of the net proceeds thereof as contemplated by the Offering Circular
and the compliance by the Company with all of the provisions of the Securities,
the Indenture, the Registration Rights Agreement and this Agreement and the
consummation by the Company of the transactions herein and therein contemplated
will not conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any material indenture, mortgage,
deed of trust, loan agreement or other material agreement or instrument to which
the Company is a party or by which the Company is bound or to which any of the
property or assets of the Company is subject, nor will such action result in any
violation of the provisions of the Certificate of Incorporation, as amended (the
"Certificate of Incorporation"), or Bylaws, as amended (the "Bylaws"), of the
Company or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any of its
properties; and no consent, approval, authorization or order of or registration
or qualification with any such court or governmental agency or body is required
for the issuance and sale of the Securities by the Company or the consummation
by the Company of the transactions contemplated by this Agreement, the
Registration Rights Agreement or the Indenture, except for the filing of a
registration statement by the Company with the Commission pursuant to the United
States Securities Act of 1933, as amended (the "Securities Act") pursuant to the
Registration Rights Agreement and Section 5(h) hereof and such consents,
approvals, authorizations, registrations or qualifications as may be required
under (i) state securities or Blue Sky laws or (ii) the Trust Indenture Act of
1939;
(i) The Company is not in violation of its Certificate of Incorporation
or Bylaws or in default in the performance or observance of any material
obligation, covenant or condition contained in any indenture, mortgage, deed of
trust, loan agreement, lease or other agreement or instrument to which it is a
party or by which it or any of its properties may be bound, except where the
default would not
3
4
be reasonably likely to have a material adverse effect on the Company and its
subsidiaries taken as a whole;
(j) The statements set forth in the Offering Circular under the caption
"Description of Notes", insofar as such statements constitute a summary of the
terms of the Securities and the Registration Rights Agreement fairly summarize
in all material respects the matters referred to therein;
(k) Other than as set forth in the Offering Circular, there are no
legal or governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which the property of the Company or any of its
subsidiaries is the subject which, if determined adversely to the Company or any
of its subsidiaries, would individually or in the aggregate have a material
adverse effect on the current or future consolidated financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries, taken as a whole; and, the Company is not aware of any such
proceedings that are threatened or contemplated by governmental authorities or
threatened by others;
(l) When the Securities are issued and delivered pursuant to this
Agreement, the Securities will not be of the same class (within the meaning of
Rule 144A under the Securities Act) as securities which are listed on a national
securities exchange registered under Section 6 of the Exchange Act or quoted in
a U.S. automated inter-dealer quotation system;
(m) The Company is subject to Section 13 or 15(d) of the Exchange Act;
(n) The Company is not, and after giving effect to the offering and
sale of the Securities, will not be, an "investment company", as such term is
defined in the United States Investment Company Act of 1940, as amended (the
"Investment Company Act");
(o) Neither the Company nor any person acting on its behalf has offered
or sold the Securities by means of any general solicitation or general
advertising within the meaning of Rule 502(c) under the Securities Act, provided
that the Company makes no representation with respect to any actions undertaken
by the Purchasers;
(p) Within the preceding six months, except for sales of short-term
(less than 365 days) notes, neither the Company nor any other person acting on
behalf of the Company has offered or sold to any person any Securities, or any
securities of the same or a similar class as the Securities, other than
Securities offered or sold to the Purchasers hereunder. The Company will take
reasonable precautions designed to ensure that any offer or sale, direct or
indirect, in the United States of any Securities or any substantially similar
security issued by the Company, within six months subsequent to the date on
which the distribution of the Securities has been completed (as notified to the
Company by Xxxxxxx, Xxxxx & Co.), is made under restrictions and other
circumstances reasonably designed not to affect the status of the offer and sale
of the Securities in the United States contemplated by this Agreement as
transactions exempt from the registration provisions of the Securities Act; and
(q) PricewaterhouseCoopers LLP, who have certified certain financial
statements of the Company and its subsidiaries, are independent public
accountants as required by the Securities Act and the rules and regulations of
the Commission thereunder.
4
5
2. Subject to the terms and conditions herein set forth, the Company
agrees to issue and sell to each of the Purchasers, and each of the Purchasers
agrees, severally and not jointly, to purchase from the Company, at a purchase
price of 99.083% of the principal amount thereof, plus accrued interest, if any,
from May 11, 2001 to the Time of Delivery hereunder, the principal amount of
Securities set forth opposite the name of such Purchaser in Schedule I hereto.
3. Upon the authorization by you of the release of the Securities, the
several Purchasers propose to offer the Securities for sale upon the terms and
conditions set forth in this Agreement and the Offering Circular and each
Purchaser hereby represents and warrants to, and agrees with the Company that:
(a) It will offer and sell the Securities only to persons who it
reasonably believes are "qualified institutional buyers" ("QIBs") within the
meaning of Rule 144A under the Securities Act in transactions meeting the
requirements of Rule 144A;
(b) It is a QIB; and
(c) It will not offer or sell the Securities by any form of general
solicitation or general advertising, including but not limited to the methods
described in Rule 502(c) under the Securities Act.
4. (a) The Securities to be purchased by each Purchaser hereunder will
be represented by one or more definitive global Securities in book-entry form
which will be deposited by or on behalf of the Company with The Depository Trust
Company ("DTC") or its designated custodian. The Company will deliver the
Securities to Xxxxxxx, Sachs & Co., for the account of each Purchaser, against
payment by or on behalf of such Purchaser of the purchase price therefor by wire
transfer, payable to the order of the Company in Federal (same day) funds, by
causing DTC to credit the Securities to the account of Xxxxxxx, Xxxxx & Co. at
DTC. The Company will cause the certificates representing the Securities to be
made available to Xxxxxxx, Sachs & Co. for checking at least twenty-four hours
prior to the Time of Delivery (as defined below) at the office of DTC or its
designated custodian (the "Designated Office"). The time and date of such
delivery and payment shall be 9:30 a.m., New York City time, on May 11, 2001 or
such other time and date as Xxxxxxx, Xxxxx & Co. and the Company may agree upon
in writing. Such time and date are herein called the "Time of Delivery".
(b) The documents to be delivered at the Time of Delivery by or on
behalf of the parties hereto pursuant to Section 7 hereof, including the
cross-receipt for the Securities and any additional documents requested by the
Purchasers pursuant to Section 7(h) hereof, will be delivered at such time and
date at the offices of Xxxxxxxx & Xxxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000
(the "Closing Location"), and the Securities will be delivered at the Designated
Office, all at the Time of Delivery. A meeting will be held at the Closing
Location at 3:00 p.m., New York City time, on the New York Business Day next
preceding the Time of Delivery, at which meeting the final drafts of the
documents to be delivered pursuant to the preceding sentence will be available
for review by the parties hereto. For the purposes of this Section 4, "New York
Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in New York are generally
authorized or obligated by law or executive order to close.
5
6
5. The Company agrees with each of the Purchasers:
(a) To prepare the Offering Circular in a form approved by you; to make
no amendment or any supplement to the Offering Circular which shall be
disapproved by you promptly after reasonable notice thereof; and to furnish you
with copies thereof;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Securities for offering and sale under the
securities laws of such jurisdictions as you may request and to comply with such
laws so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution of
the Securities, provided that in connection therewith the Company shall not be
required to qualify as a foreign corporation or to file a general consent to
service of process in any jurisdiction;
(c) To furnish the Purchasers with copies of the Offering Circular and
each amendment or supplement thereto in such quantities as you may from time to
time reasonably request, and if, at any time prior to the expiration of nine
months after the date of the Offering Circular, any event shall have occurred as
a result of which the Offering Circular as then amended or supplemented would
include an 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 when such Offering Circular is
delivered, not misleading, or, if for any other reason it shall be necessary or
desirable during such same period to amend or supplement the Offering Circular,
to notify you and upon your request to prepare and furnish without charge to
each Purchaser and to any dealer in securities as many copies as you may from
time to time reasonably request of an amended Offering Circular or a supplement
to the Offering Circular which will correct such statement or omission or effect
such compliance;
(d) Not to be or become, at any time prior to the expiration of two
years after the Time of Delivery, an open-end investment company, unit
investment trust, closed-end investment company or face-amount certificate
company that is or is required to be registered under Section 8 of the
Investment Company Act;
(e) At any time when the Company is not subject to Section 13 or 15(d)
of the Exchange Act, for the benefit of holders from time to time of Securities,
to furnish at its expense, upon request, to holders of Securities and
prospective purchasers of securities information (the "Additional Issuer
Information") satisfying the requirements of subsection (d)(4)(i) of Rule 144A
under the Securities Act;
(f) During a period of three years from the date of the Offering
Circular, to furnish to you copies of all reports or other communications
(financial or other) furnished to stockholders of the Company, and to deliver to
you such publicly available information concerning the business and financial
condition of the Company as you may from time to time reasonably request (such
financial statements to be on a consolidated basis to the extent the accounts of
the Company and its subsidiaries are consolidated in reports furnished to its
stockholders generally or to the Commission);
(g) During the period of two years after the Time of Delivery, the
Company will not, and will not permit any of its "affiliates" (as defined in
Rule 144 under the Securities Act) to, resell any of the Securities which
constitute "restricted securities" under Rule 144 that have been reacquired by
any of them;
6
7
(h) The Company shall execute and deliver the Registration Rights
Agreement prior to the Time of Delivery and pursuant thereto shall file and use
its reasonable best efforts to cause to be declared or become effective under
the Securities Act, on or prior to 90 days after the Time of Delivery, a
registration statement on Form S-4 providing for the registration of (i) another
series of debt securities of the Company, with terms identical to the Securities
(the "Exchange Securities"), and the exchange of the Securities for the Exchange
Securities, all in a manner which will permit persons who acquire the Exchange
Securities to resell the Exchange Securities pursuant to Section 4(1) of the
Securities Act or (ii) if prior to consummation of such exchange offer certain
existing Commission interpretations are changed such that the Exchange
Securities received by holders of Securities other than certain restricted
holders are not or would not be, upon receipt, transferable by each such holder
without restriction under the Securities Act, in lieu thereof, to file and use
its reasonable best efforts to cause to be declared or become effective under
the Securities Act, as soon as practicable but no later than 180 days after the
Time of Delivery, a "shelf" registration statement relating to the resale of the
Securities; and
(i) To use the net proceeds received by it from the sale of the
Securities pursuant to this Agreement in the manner specified in the Offering
Circular under the caption "Use of Proceeds".
6. The Company covenants and agrees with the several Purchasers that
the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the issuance of the Securities and all other expenses in
connection with the preparation and printing of the Preliminary Offering
Circular and the Offering Circular and any amendments and supplements thereto
and the mailing and delivering of copies thereof to the Purchasers and dealers;
(ii) the cost of printing or producing any Agreement among Purchasers, this
Agreement, the Registration Rights Agreement, the Indenture, the Blue Sky and
Legal Investment Memoranda, closing documents (including any compilations
thereof) and any other documents in connection with the offering, purchase, sale
and delivery of the Securities; (iii) all expenses in connection with the
qualification of the Securities for offering and sale under state securities
laws as provided in Section 5(b) hereof, including the fees and disbursements of
counsel for the Purchasers in connection with such qualification and in
connection with the Blue Sky and legal investment surveys; (iv) any fees charged
by securities rating services for rating the Securities; (v) the cost of
preparing the Securities; (vi) the fees and expenses of the Trustee and any
agent of the Trustee and the fees and disbursements of counsel for the Trustee
in connection with the Indenture and the Securities; and (vii) all other costs
and expenses incident to the performance of its obligations hereunder which are
not otherwise specifically provided for in this Section. It is understood,
however, that, except as provided in this Section, and Sections 8 and 11 hereof,
the Purchasers will pay all of their own costs and expenses, including the fees
of their counsel, transfer taxes on resale of any of the Securities by them, and
any advertising expenses connected with any offers they may make.
7. The obligations of the Purchasers hereunder shall be subject, in
their discretion, to the condition that all representations and warranties and
other statements of the Company herein are, at and as of the Time of Delivery,
true and correct, the condition that the Company shall have performed all of its
obligations hereunder theretofore to be performed, and the following additional
conditions:
(a) Xxxxxxxx & Xxxxxxxx, counsel for the Purchasers, shall have
furnished to you such opinion or opinions, dated the Time of Delivery, with
respect to the matters covered in paragraphs (i), (ii), (iii), (iv), (v), (ix)
and (x) of subsection (b) below and paragraph (i) of subsection (c) below as
well as such other related matters as you may reasonably request, and such
counsel shall have received
7
8
such papers and information as they may reasonably request to enable them to
pass upon such matters;
(b) Xxxxxx & Xxxxx, LLP, special counsel for the Company, shall have
furnished to you their written opinion, dated the Time of Delivery, in form and
substance satisfactory to you, to the effect that:
(i) The Company is a corporation duly incorporated and is
validly existing as a corporation in good standing under the laws of
the State of Delaware, with corporate power and authority to own its
properties and conduct its business as described in the Offering
Circular;
(ii) Each of this Agreement and the Indenture has been duly
authorized, executed and delivered by the Company;
(iii) The Securities, when duly executed and authenticated by
the Trustee in accordance with the terms of the Indenture, and when
delivered to and paid for by the Purchasers pursuant to this Agreement,
will be valid and legally binding obligations of the Company entitled
to the benefits of the Indenture, enforceable against the Company in
accordance with their terms, except to the extent that enforcement
thereof may be limited by (i) bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or other similar laws now or
hereafter in effect relating to or affecting creditors' rights
generally and (ii) general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity);
(iv) The Registration Rights Agreement has been duly authorized,
executed and delivered by the Company and (assuming due authorization,
execution and delivery by the Purchasers) constitutes a valid and
legally binding obligation of the Company;
(v) Assuming the due authorization, execution and delivery of
the Indenture by the Trustee, the Indenture constitutes a valid and
legally binding obligation of the Company, enforceable against the
Company in accordance with its terms, except as such enforcement may be
limited by (i) bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or other similar laws now or hereafter in effect
relating to or affecting creditors' rights generally and (ii) general
principles of equity (regardless of whether enforceability is
considered in a proceeding at law or in equity);
(vi) The issue and sale of the Securities by the Company and
the compliance by the Company with all of the provisions of the
Securities, the Indenture, the Registration Rights Agreement and this
Agreement and the consummation by the Company of the transactions
herein and therein contemplated will not breach or violate (i) any
provisions of the Certificate or Incorporation or Bylaws of the Company
or (ii) any applicable law, except in the case of this clause (ii) as
would not have a material adverse effect on the business, properties,
financial position or results of operations of the Company and its
subsidiaries and affiliates taken as a whole;
(vii) No consent, approval, authorization or order of or
registration or qualification with any governmental agency or body is
required for the performance by the Company of its
8
9
obligations under this Agreement or the Indenture, except such
consents, approvals, authorizations, registrations or qualifications as
may be required under federal or state securities or Blue Sky laws or
the Trust Indenture Act;
(viii) The statements set forth in the Offering Circular under
the caption "Description of Notes", insofar as such statements
constitute a summary of the terms of the Securities and the
Registration Rights Agreement, fairly summarize in all material
respects the matters referred to therein;
(ix) Assuming the accuracy of the representations and
warranties, and compliance with the agreements and covenants, contained
in this Agreement and the Indenture, and in the Offering Circular under
the caption "Plan of Distribution", it is not necessary, in connection
with the offer, sale and delivery of the Notes to the Purchasers under
this Agreement or in connection with the initial resale of such Notes
by the Purchasers in the manner contemplated by this Agreement and the
Offering Circular, to register the Notes under the Securities Act, or
to qualify the Indenture under the Trust Indenture Act, it being
understood that no opinion need be expressed as to any subsequent
resale of any Note; and
(x) Although such counsel has not undertaken, except with
respect to "Description of Notes" (but only to the extent as otherwise
set forth in paragraph 8 above), to determine independently, and does
not assume any responsibility for, the accuracy or completeness of the
statements in the Preliminary Offering Circular and the Offering
Circular, we have participated in the preparation of the Preliminary
Offering Circular and the Offering Circular, including review and
discussion of the contents thereof, and nothing has come to such
counsel attention that has caused us to believe that the Preliminary
Offering Circular as of April 30, 2001 or the Offering Circular, in
each case including documents incorporated by reference therein, as of
its date or as of the Closing 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, in
the light of the circumstances under which they were made (it being
understood, that such counsel need not express any belief with respect
to the historical financial statements and notes thereto and other
financial data included or incorporated by reference therein or omitted
therefrom);
(c) Xxxx Xxxx, Senior Vice President, Corporate Secretary and General
Counsel of the Company, shall have furnished to you his written opinion, dated
the Time of Delivery, in form and substance satisfactory to you, to the effect
that:
(i) The Company has an authorized capitalization as set forth
in the Offering Circular, and all of the issued shares of capital stock
of the Company have been duly and validly authorized and issued and are
fully paid and non-assessable;
(ii) The Company has been duly qualified as a foreign
corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
properties or conducts any business so as to require such
qualification, except where the failure to have such power and
authority or be so qualified in any such jurisdiction would not be
reasonably likely to have a Material Adverse Effect;
9
10
(iii) Other than as set forth in the Offering Circular, such
counsel is not aware of any legal or governmental proceedings pending
to which the Company or any of its subsidiaries is a party or of which
any property of the Company or any of its subsidiaries is the subject
which, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate be reasonably
likely to have a material adverse effect on the current or future
consolidated financial position, stockholders' equity or results of
operations of the Company and its subsidiaries taken as a whole; and
such counsel is not aware of any such proceedings that are threatened
or contemplated by governmental authorities or threatened by others;
(iv) The Company is not in violation of its Certificate of
Incorporation or Bylaws or in default in the performance or observance
of any material obligation, covenant or condition contained in any
indenture, mortgage, deed of trust or loan agreement, lease or other
agreement or instrument to which it is a party or by which it or any of
its properties may be bound, except where the default would not be
reasonably likely to have a material adverse effect on the Company and
its subsidiaries taken as a whole;
(v) The issue and sale of the Securities by the Company and
the compliance by the Company with all of the provisions of the
Securities, the Indenture, the Registration Rights Agreement and this
Agreement and the consummation by the Company of the transactions
herein and therein contemplated will not breach or violate (i) any
order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Company or any of its properties or (ii)
any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which the Company is a party or by which the Company
is bound or to which any of the property or assets of the Company is
subject, except as would not have a material adverse effect on the
business, properties, financial position or results of operations of
the Company and its subsidiaries and affiliates taken as a whole;
(vi) The Exchange Act Reports (other than the financial
statements and related schedules therein, as to which such counsel need
express no opinion), when they were filed with the Commission, complied
as to form in all material respects with the requirements of the
Exchange Act, and the rules and regulations of the Commission
thereunder; and nothing has come to such Counsel's attention to cause
me to believe that any of such documents (other than the financial
statements and related schedules therein, as to which such counsel need
express no opinion), when they were so filed, contained an untrue
statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such documents were so
filed, not misleading; and
(vii) No consent, approval, authorization or order of or
registration or qualification with any court or governmental agency or
body is required for the performance by the Company of its obligations
under this Agreement or the Indenture;
(d) On the date of the Offering Circular prior to the execution of this
Agreement and also at the Time of Delivery, PricewaterhouseCoopers LLP shall
have furnished to you a letter or letters, dated the respective dates of
delivery thereof, in form and substance satisfactory to you, to the effect set
forth in Annex I hereto;
10
11
(e) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included in
the Offering Circular any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Offering Circular, and (ii) since the
respective dates as of which information is given in the Offering Circular there
shall not have been any change in the capital stock or long-term debt of the
Company or any of its subsidiaries or any change, or any development involving a
prospective change, in or affecting the general affairs, management, financial
position, stockholders' equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the Offering
Circular, the effect of which, in any such case described in clause (i) or (ii),
is in the judgment of the Representatives so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Securities on the terms and in the manner contemplated in this Agreement
and in the Offering Circular;
(f) On or after the date hereof (i) no downgrading shall have occurred
in the rating accorded the Company's debt securities by any "nationally
recognized statistical rating organization", as that term is defined by the
Commission for purposes of Rule 436(g)(2) under the Securities Act, and (ii) no
such organization shall have publicly announced that it has under surveillance
or review, with possible negative implications, its rating of any of the
Company's debt securities;
(g) On or after the date hereof there shall not have occurred any of
the following: (i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange; (ii) a suspension or material
limitation in trading in the Company's securities on the New York Stock
Exchange; (iii) a general moratorium on commercial banking activities declared
by either Federal or New York State authorities; or (iv) the outbreak or
escalation of hostilities involving the United States or the declaration by the
United States of a national emergency or war, if the effect of any such event
specified in clause (iv) in the judgment of the Representatives makes it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Securities on the terms and in the manner contemplated in the Offering
Circular; and
(h) The Company shall have furnished or caused to be furnished to you
at the Time of Delivery certificates of officers of the Company satisfactory to
you as to the accuracy of the representations and warranties of the Company
herein at and as of such Time of Delivery, as to the performance by the Company
of all of its obligations hereunder to be performed at or prior to such Time of
Delivery, as to the matters set forth in subsections (e) and (f) of this Section
and as to such other matters as you may reasonably request.
8. (a) The Company will indemnify and hold harmless each Purchaser
against any losses, claims, damages or liabilities, joint or several, to which
such Purchaser may become subject, under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Offering Circular or
the Offering Circular, or any amendment or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact necessary to make the statements therein not misleading, and will reimburse
each Purchaser for any legal or other expenses reasonably incurred by such
Purchaser in connection with investigating or defending any such action or claim
as such expenses are incurred; provided, however, that the Company shall not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or
11
12
alleged untrue statement or omission or alleged omission made in any Preliminary
Offering Circular or the Offering Circular or any such amendment or supplement
in reliance upon and in conformity with written information furnished to the
Company by any Purchaser through Xxxxxxx, Sachs & Co. expressly for use therein.
(b) Each Purchaser will indemnify and hold harmless the Company against
any losses, claims, damages or liabilities to which the Company may become
subject, under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Offering Circular or the Offering Circular, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in any Preliminary Offering Circular or the Offering
Circular or any such amendment or supplement in reliance upon and in conformity
with written information furnished to the Company by such Purchaser through
Xxxxxxx, Xxxxx & Co. expressly for use therein; and will reimburse the Company
for any legal or other expenses reasonably incurred by the Company in connection
with investigating or defending any such action or claim as such expenses are
incurred.
(c) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the written consent
of the indemnified party, effect the settlement or compromise of, or consent to
the entry of any judgment with respect to, any pending or threatened action or
claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or potential party
to such action or claim) unless such settlement, compromise or judgment (i)
includes an unconditional release of the indemnified party from all liability
arising out of such action or claim and (ii) does not include a statement as to,
or an admission of, fault, culpability or a failure to act, by or on behalf of
any indemnified party.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Purchasers on
the
12
13
other from the offering of the Securities. If, however, the allocation provided
by the immediately preceding sentence is not permitted by applicable law or if
the indemnified party failed to give the notice required under subsection (c)
above, then each indemnifying party shall contribute to such amount paid or
payable by such indemnified party in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Company on the one hand and the Purchasers on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and the Purchasers on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company bear to the total underwriting discounts and
commissions received by the Purchasers, in each case as set forth in the
Offering Circular. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company on the one hand or the Purchasers on the
other and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
the Purchasers agree that it would not be just and equitable if contribution
pursuant to this subsection (d) were determined by pro rata allocation (even if
the 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 above in this subsection (d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this subsection (d) shall be
deemed to include 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 subsection (d), no Purchaser
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
investors were offered to investors exceeds the amount of any damages which such
Purchaser has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. The Purchasers' obligations in
this subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Purchaser within the meaning of the Securities Act; and the obligations of the
Purchasers under this Section 8 shall be in addition to any liability which the
respective Purchasers may otherwise have and shall extend, upon the same terms
and conditions, to each officer and director of the Company and to each person,
if any, who controls the Company within the meaning of the Securities Act.
9. (a) If any Purchaser shall default in its obligation to purchase the
Securities which it has agreed to purchase hereunder, you may in your discretion
arrange for you or another party or other parties to purchase such Securities on
the terms contained herein. If within thirty-six hours after such default by any
Purchaser you do not arrange for the purchase of such Securities, then the
Company shall be entitled to a further period of thirty-six hours within which
to procure another party or other parties satisfactory to you to purchase such
Securities on such terms. In the event that, within the respective prescribed
periods, you notify the Company that you have so arranged for the purchase of
such Securities, or the Company notifies you that it has so arranged for the
purchase of such Securities, you or the Company shall have the right to postpone
the Time of Delivery for a period of not more than seven days, in order to
effect whatever changes may thereby be made necessary in
13
14
the Offering Circular, or in any other documents or arrangements, and the
Company agrees to prepare promptly any amendments to the Offering Circular which
in your opinion may thereby be made necessary. The term "Purchaser" as used in
this Agreement shall include any person substituted under this Section with like
effect as if such person had originally been a party to this Agreement with
respect to such Securities.
(b) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Purchaser or Purchasers by you and the Company as
provided in subsection (a) above, the aggregate principal amount of such
Securities which remains unpurchased does not exceed one-eleventh of the
aggregate principal amount of all the Securities, then the Company shall have
the right to require each non-defaulting Purchaser to purchase the principal
amount of Securities which such Purchaser agreed to purchase hereunder and, in
addition, to require each non-defaulting Purchaser to purchase its pro rata
share (based on the principal amount of Securities which such Purchaser agreed
to purchase hereunder) of the Securities of such defaulting Purchaser or
Purchasers for which such arrangements have not been made; but nothing herein
shall relieve a defaulting Purchaser from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Purchaser or Purchasers by you and the Company as
provided in subsection (a) above, the aggregate principal amount of Securities
which remains unpurchased exceeds one-eleventh of the aggregate principal amount
of all the Securities, or if the Company shall not exercise the right described
in subsection (b) above to require non-defaulting Purchasers to purchase
Securities of a defaulting Purchaser or Purchasers, then this Agreement shall
thereupon terminate, without liability on the part of any non-defaulting
Purchaser or the Company, except for the expenses to be borne by the Company and
the Purchasers as provided in Section 6 hereof and the indemnity and
contribution agreements in Section 8 hereof; but nothing herein shall relieve a
defaulting Purchaser from liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company and the several Purchasers, as set forth in
this Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Purchaser or any controlling person of any Purchaser, or the Company, or
any officer or director or controlling person of the Company, and shall survive
delivery of and payment for the Securities.
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
the Company shall not then be under any liability to any Purchaser except as
provided in Sections 6 and 8 hereof; but, if for any other reason, the
Securities are not delivered by or on behalf of the Company as provided herein,
the Company will reimburse the Purchasers through you for all out-of-pocket
expenses approved in writing by you, including fees and disbursements of
counsel, reasonably incurred by the Purchasers in making preparations for the
purchase, sale and delivery of the Securities, but the Company shall then be
under no further liability to any Purchaser except as provided in Sections 6 and
8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Purchasers, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Purchaser made or given
by you jointly or by Xxxxxxx, Sachs & Co. on behalf of you as the
representatives.
14
15
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Purchasers shall be delivered or sent by mail, telex or
facsimile transmission to you as the representatives in care of Xxxxxxx, Xxxxx &
Co., 00 Xxx Xxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Registration
Department; and if to the Company shall be delivered or sent by mail, telex or
facsimile transmission to: RadioShack Corporation; 000 Xxxxxxxxxxxx Xxxxxx;
Xxxxx 0000; Xxxx Xxxxx, Xxxxx 00000; Attn: Vice President - Law; provided,
however, that any notice to a Purchaser pursuant to Section 8(c) hereof shall be
delivered or sent by mail, telex or facsimile transmission to such Purchaser at
its address set forth in its Purchasers' Questionnaire, or telex constituting
such Questionnaire, which address will be supplied to the Company by you upon
request. Any such statements, requests, notices or agreements shall take effect
upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the
benefit of, the Purchasers, the Company and, to the extent provided in Sections
8 and 10 hereof, the officers and directors of the Company and each person who
controls the Company or any Purchaser, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. No purchaser of any of the
Securities from any Purchaser shall be deemed a successor or assign by reason
merely of such purchase.
14. Time shall be of the essence of this Agreement.
15. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such respective counterparts shall together constitute one and
the same instrument.
17. The Company is authorized, subject to applicable law, to disclose
any and all aspects of this potential transaction that are necessary to support
any U.S. federal income tax benefits expected to be claimed with respect to such
transaction, without the Purchasers imposing any limitation of any kind.
If the foregoing is in accordance with your understanding, please sign
and return to us counterparts hereof, and upon the acceptance hereof by you, on
behalf of each of the Purchasers, this letter and such acceptance hereof shall
constitute a binding agreement between each of the Purchasers and the Company.
It is understood that your acceptance of this letter on behalf of each of the
Purchasers is pursuant to the authority set forth in a form of Agreement among
Purchasers, the form of which shall be submitted to the Company for examination
upon request, but without warranty on your part as to the authority of the
signers thereof.
Very truly yours,
RadioShack Corporation
By: /s/ Xxxx X. Xxxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxxx
Title: Assistant Corporate Secretary
15
16
Accepted as of the date hereof:
Xxxxxxx, Xxxxx & Co.
By: /s/ Xxxxxxx, Sachs & Co.
----------------------------
Name:
Title:
Xxxxxxx Xxxxx Xxxxxx Inc.
By: /s/ Xxxxx X. [Illegible]
------------------------
Name: Xxxxx X. [Illegible]
Title:
On behalf of each of the Purchasers
16
17
SCHEDULE I
Principal
Amount of
Securities
to be
Purchaser Purchased
--------- ---------
Xxxxxxx, Sachs & Co......................................................................... $ 122,500,000
Xxxxxxx Xxxxx Xxxxxx Inc.................................................................... 122,500,000
Banc of America Securities LLC.............................................................. 35,000,000
Bear, Xxxxxxx & Co. Inc..................................................................... 35,000,000
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated.......................................... 35,000,000
-------------
Total..................................................................... $ 350,000,000
=============
17
18
ANNEX I
Pursuant to Section 7(d) of the Purchase Agreement, the accountants
shall furnish letters to the Purchasers to the effect that:
(i) They are independent certified public accountants with
respect to the Company and its subsidiaries within the meaning of the
Securities Exchange Act of 1934 (the "Exchange Act") and the applicable
published rules and regulations thereunder;
(ii) In our opinion, the consolidated financial statements and
financial statement schedules audited by us and included in the
Offering Circular comply as to form in all material respects with the
applicable requirements of the Exchange Act and the related published
rules and regulations;
(iii) The selected financial information with respect to the
consolidated results of operations and financial position of the
Company for the five most recent fiscal years included in the Offering
Circular agrees with the corresponding amounts (after restatements
where applicable) in the audited consolidated financial statements for
such five fiscal years;
(iv) On the basis of limited procedures not constituting an
audit in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available
interim financial statements of the Company and its subsidiaries,
inspection of the minute books of the Company and its subsidiaries
since the date of the latest audited financial statements included in
the Offering Circular, inquiries of officials of the Company and its
subsidiaries responsible for financial and accounting matters and such
other inquiries and procedures as may be specified in such letter,
nothing came to their attention that caused them to believe that:
(A) as of a specified date not more than five days
prior to the date of such letter, there have been any changes
in the consolidated capital stock (other than issuances of
capital stock upon exercise of options and stock appreciation
rights, upon earn-outs of performance shares and upon
conversions of convertible securities, in each case which were
outstanding on the date of the latest financial statements
included in the Offering Circular) or any increase in the
consolidated long-term debt of the Company and its
subsidiaries, or any decreases in stockholders' equity or
other items specified by the Representatives, or any increases
in any items specified by the Representatives, in each case as
compared with amounts shown in the latest balance sheet
included in the Offering Circular except in each case for
changes, increases or decreases which the Offering Circular
discloses have occurred or may occur or which are described in
such letter; and
(B) for the period from the date of the latest
financial statements included in the Offering Circular to the
specified date referred to in clause (A) there were any
decreases in consolidated net sales and operating revenues or
operating profit or the total or per share amounts of
consolidated net income or other items specified by the
Representatives, or any increases in any items specified by
the Representatives, in each case as compared with the
comparable period of the preceding year and with any
19
other period of corresponding length specified by the
Representatives, except in each case for decreases or
increases which the Offering Circular discloses have occurred
or may occur or which are described in such letter; and
(v) In addition to the examination referred to in their report
included in the Offering Circular and the limited procedures,
inspection of minute books, inquiries and other procedures referred to
in paragraphs (iii) and (iv) above, they have carried out certain
specified procedures, not constituting an audit in accordance with
generally accepted auditing standards, with respect to certain amounts,
percentages and financial information specified by the Representatives,
which are derived from the general accounting records of the Company
and its subsidiaries, which appear in the Offering Circular, and have
compared certain of such amounts, percentages and financial information
with the accounting records of the Company and its subsidiaries and
have found them to be in agreement.
A-2
