EXHIBIT 1.1
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CSK AUTO CORPORATION
(a Delaware corporation)
1,875,172 Shares of Common Stock
PURCHASE AGREEMENT
Dated: January 14, 2004
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TABLE OF CONTENTS
SECTION 1. Representations and Warranties..................................................................2
(a) Representations and Warranties by the Company...................................................2
(b) Representations and Warranties by the Selling Shareholder.......................................9
(c) Officer's Certificates.........................................................................11
SECTION 2. Sale and Delivery to Underwriter; Closing......................................................11
(a) Securities.....................................................................................11
(b) Payment........................................................................................11
(c) Denominations; Registration....................................................................11
SECTION 3. Covenants of the Company.......................................................................12
(a) Compliance with Securities Regulations and Commission Requests.................................12
(b) Filing of Amendments...........................................................................12
(c) Delivery of Registration Statements............................................................12
(d) Delivery of Prospectuses.......................................................................12
(e) Continued Compliance with Securities Laws......................................................13
(f) Blue Sky Qualifications........................................................................13
(g) Rule 158.......................................................................................13
(h) Restriction on Sale of Securities..............................................................13
(i) Reporting Requirements.........................................................................14
(j) Lock-up Agreements.............................................................................14
SECTION 4. Payment of Expenses............................................................................14
(a) Expenses.......................................................................................14
(b) Expenses of the Selling Shareholder............................................................15
(c) Termination of Agreement.......................................................................15
(d) Allocation of Expenses.........................................................................15
SECTION 5. Conditions of Underwriter's Obligations........................................................15
(a) Effectiveness of Registration Statement........................................................15
(b) Opinion of Counsel for Company.................................................................15
(c) Opinion of Counsel for the Selling Shareholder.................................................15
(d) Opinion of Counsel for Underwriter.............................................................16
(e) Officers' Certificate..........................................................................16
(f) Certificate of Selling Shareholder.............................................................16
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(g) Accountant's Comfort Letter....................................................................16
(h) Bringdown Comfort Letter.......................................................................16
(i) Approval of Listing............................................................................17
(j) Additional Documents...........................................................................17
(k) Termination of Agreement.......................................................................17
(l) Form W-9.......................................................................................17
SECTION 6. Indemnification................................................................................17
(a) Indemnification of Underwriter.................................................................17
(b) Indemnification of Company, Directors and Officers and Selling Shareholder.....................18
(c) Actions against Parties; Notification..........................................................19
(d) Settlement without Consent if Failure to Reimburse.............................................19
(e) Other Agreements with Respect to Indemnification...............................................20
SECTION 7. Contribution...................................................................................20
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.................................21
SECTION 9. Termination of Agreement.......................................................................21
(a) Termination; General...........................................................................21
(b) Liabilities....................................................................................22
SECTION 10. Default by the Selling Shareholder.............................................................22
SECTION 11. Notices........................................................................................22
SECTION 12. Parties........................................................................................22
SECTION 13. GOVERNING LAW AND TIME.........................................................................23
SECTION 14. Effect of Headings.............................................................................23
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SCHEDULES
Schedule A - List of Subsidiaries.................................................................Sch A-1
Schedule B - List of Agreements with Registration Rights..........................................Sch B-1
EXHIBITS
Exhibit A - Form of Opinion of Company's Counsel.......................................................A-1
Exhibit AA - Form of Opinion of General Counsel.......................................................AA-1
Exhibit B - Form of Opinion of Xxx Xxxxx-Xxxxx.........................................................B-1
Exhibit C - Form of Lock-up Letter.....................................................................C-1
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CSK AUTO CORPORATION
(a Delaware corporation)
1,875,172 Shares of Common Stock
(Par Value $.01 Per Share)
PURCHASE AGREEMENT
January 14, 2004
Xxxxxxx, Sachs & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
CSK Auto Corporation, a Delaware corporation (the "Company") and
Investcorp CSK Holdings L.P., a Cayman Islands limited partnership (the "Selling
Shareholder"), confirm their respective agreements with Xxxxxxx, Xxxxx & Co.
(the "Underwriter"), with respect to the sale by the Selling Shareholder and the
purchase by the Underwriter of 1,875,172 shares of Common Stock, par value $.01
per share, of the Company ("Common Stock"). The aforesaid 1,875,172 shares of
Common Stock to be purchased by the Underwriter are hereinafter called the
"Securities".
The Company and the Selling Shareholders understand that the
Underwriter proposes to make a public offering of the Securities as soon as the
Underwriter deems advisable after this Agreement has been executed and
delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-77008) covering the
registration of the Securities under the Securities Act of 1933, as amended (the
"1933 Act"), including a related prospectus, which has become effective (the
prospectus contained in such registration statement at the time it became
effective is herein called the "Base Prospectus"). Promptly after execution and
delivery of this Agreement, the Company will prepare and file a prospectus
supplement (the "Prospectus Supplement") to the Base Prospectus in accordance
with the provisions of paragraph (b) of Rule 424 ("Rule 424(b)") of the rules
and regulations of the Commission under the 1933 Act (the "1933 Act
Regulations"). The information included in such prospectus that was omitted from
such registration statement at the time it became effective but that is deemed
to be part of such registration statement at the time it became effective
pursuant to paragraph (b) of Rule 430A is referred to as "Rule 430A
Information." Each prospectus used before such registration statement became
effective, and any prospectus that omitted the Rule 430A Information that was
used after such effectiveness and prior to the execution and delivery of this
Agreement, is herein called a "preliminary prospectus." Such registration
statement, including the exhibits thereto, schedules thereto, if any, and the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the 1933 Act, at the time it became effective and including the Rule 430A
Information is herein called the "Registration Statement." Any registration
statement filed pursuant to Rule 462(b) of the 1933 Act Regulations is herein
referred to as the "Rule 462(b) Registration Statement," and after such filing
the term "Registration Statement" shall include the Rule 462(b) Registration
Statement. The Prospectus Supplement, together with the Base Prospectus,
including the documents incorporated by reference therein pursuant to Item 12 of
Form S-3 under the 1933 Act, in the form first furnished to the Underwriter for
use in connection with the offering of the Securities is herein called the
"Prospectus." For purposes of this Agreement, all references to the Registration
Statement, any preliminary prospectus, the Prospectus or any amendment or
supplement to any of the foregoing shall be deemed to include the copy filed
with the Commission pursuant to its Electronic Data Gathering, Analysis and
Retrieval system ("XXXXX").
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to mean and include the filing of
any document under the Securities Exchange Act of 1934 (the "1934 Act") which is
incorporated by reference in the Registration Statement, such preliminary
prospectus or the Prospectus, as the case may be.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company
represents and warrants to the Underwriter as of the date hereof, as of the
Closing Time referred to in Section 2(c) hereof, and agrees with the
Underwriter, as follows:
(i) Compliance with Registration Requirements. The Company meets the
requirements for use of Form S-3 under the 1933 Act. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or, to
the knowledge of the Company, are contemplated by the Commission, and
any request on the part of the Commission for additional information
has been complied with.
At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments thereto
became effective and at the Closing Time, the Registration Statement,
the Rule 462(b) Registration Statement and any amendments and
supplements thereto complied and will comply in all material respects
with the requirements of the 1933 Act and the 1933 Act Regulations and
did not and will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading. Neither the
Base Prospectus nor the Prospectus Supplement nor any amendments or
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supplements thereto, at the time the Prospectus or any such amendment
or supplement was issued and at the Closing Time, included or will
include an untrue statement of a material fact or omitted or will 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. The representations and warranties in this subsection
shall not apply to statements in or omissions from the Registration
Statement or Prospectus made in reliance upon and in conformity with
information furnished to the Company in writing by the Underwriter
expressly for use in the Registration Statement or Prospectus.
Each preliminary prospectus and the prospectus filed as part
of the Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the 1933 Act,
complied when so filed in all material respects with the 1933 Act
Regulations and each preliminary prospectus and the Prospectus
delivered to the Underwriter for use in connection with this offering
was identical to the electronically transmitted copies thereof filed
with the Commission pursuant to XXXXX, except to the extent permitted
by Regulation S-T.
(ii) Incorporated Documents. The documents incorporated or deemed to be
incorporated by reference in the Registration Statement and the
Prospectus, when they became effective or at the time they were or
hereafter are filed with the Commission, complied and will comply in
all material respects with the requirements of the 1933 Act and the
1933 Act Regulations or the 1934 Act and the rules and regulations of
the Commission thereunder (the "1934 Act Regulations"), as applicable,
and, when read together with the other information in the Prospectus,
at the time the Registration Statement became effective, at the time
the Prospectus was issued and at the Closing Time, did not and will not
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading.
(iii) Independent Accountants. The accountants who certified the
financial statements and supporting schedules included in the
Registration Statement are independent public accountants as required
by the 1933 Act and the 1933 Act Regulations.
(iv) Financial Statements. The financial statements included in the
Registration Statement and the Prospectus, together with the related
schedules and notes, present fairly the financial position of the
Company and its consolidated subsidiaries at the dates indicated and
the statement of operations, stockholders' equity and cash flows of the
Company and its consolidated subsidiaries for the periods specified;
said financial statements have been prepared in conformity with
generally accepted accounting principles ("GAAP") applied on a
consistent basis throughout the periods involved. The supporting
schedules, if any, included in the Registration Statement present
fairly in accordance with GAAP the information required to be stated
therein. The selected financial data and the summary financial
information included in the Prospectus present fairly the information
shown therein and have been compiled on a basis consistent with that of
the audited financial statements included in the Registration
Statement. The pro forma financial statements and the related notes, if
any, included in the Registration Statement and the Prospectus present
fairly the information shown therein, the
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assumptions used in the preparation of the pro forma financial
statements provide a reasonable basis for presenting the significant
effects directly attributable to the transactions or events described
therein, the related pro forma adjustments give appropriate effect to
those assumptions, and the pro forma columns therein reflect the proper
application of those adjustments to the corresponding historical
financial statement amounts.
(v) No Material Adverse Change in Business. Since the respective dates
as of which information is given in the Registration Statement and the
Prospectus, except as otherwise stated therein, (A) there has been no
material adverse change in the condition, financial or otherwise, or in
the earnings or business of the Company and its subsidiaries considered
as one enterprise, whether or not arising in the ordinary course of
business (a "Material Adverse Effect"), (B) there have been no
transactions entered into by the Company or any of its subsidiaries,
other than those in the ordinary course of business, which are material
with respect to the Company and its subsidiaries considered as one
enterprise, and (C) there has been no dividend or distribution of any
kind declared, paid or made by the Company on any class of its capital
stock.
(vi) Good Standing of the Company. The Company has been duly organized
and is validly existing as a corporation in good standing under the
laws of the State of Delaware and has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectus and to enter into and perform its
obligations under this Agreement; and the Company is duly qualified as
a foreign corporation to transact business and is in good standing in
each other jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify or to be in
good standing would not result in a Material Adverse Effect.
(vii) Good Standing of Subsidiaries. Each "significant subsidiary" of
the Company (as such term is defined in Rule 1-02 of Regulation S-X)
(including CSK Auto, Inc., an Arizona Corporation, each a "Subsidiary"
and, collectively, the "Subsidiaries") has been duly organized and is
validly existing as a corporation in good standing under the laws of
the jurisdiction of its incorporation, has corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus and is duly qualified as a
foreign corporation to transact business and is in good standing in
each jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of
business, except where the failure so to qualify or to be in good
standing would not result in a Material Adverse Effect; except as
otherwise disclosed in the Registration Statement, all of the issued
and outstanding capital stock of each such Subsidiary has been duly
authorized and validly issued, is fully paid and non-assessable and is
owned by the Company, directly or through subsidiaries, free and clear
of any security interest, mortgage, pledge, lien, encumbrance, claim or
equity; none of the outstanding shares of capital stock of any
Subsidiary was issued in violation of the preemptive or similar rights
of any securityholder of such Subsidiary. The only subsidiaries of the
Company are the subsidiaries listed on Schedule A hereto.
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(viii) Capitalization. The authorized, issued and outstanding capital
stock of the Company is as set forth in the Prospectus (as of the dates
set forth therein) under the section entitled "Prospectus Summary--the
Offering" and "Description of Capital Stock" (except for subsequent
issuances, if any, pursuant to reservations, agreements or employee
benefit plans referred to in the Prospectus or pursuant to the exercise
of convertible securities, options or warrants referred to in the
Prospectus). The shares of issued and outstanding capital stock of the
Company, including the Securities to be purchased by the Underwriter
from the Selling Shareholders, have been duly authorized and validly
issued and are fully paid and non-assessable; none of the outstanding
shares of capital stock, including the Securities to be purchased by
the Underwriter from the Selling Shareholders, was issued in violation
of the preemptive or other similar rights of any securityholder of the
Company.
(ix) Authorization of Agreement. This Agreement has been duly
authorized, executed and delivered by the Company.
(x) Authorization and Description of Securities. The Common Stock
conforms to all statements relating thereto contained in the Prospectus
and such description conforms to the rights set forth in the
instruments defining the same; no holder of the Securities will be
subject to personal liability by reason of being such a holder.
(xi) Absence of Defaults and Conflicts. Neither the Company nor any of
its subsidiaries is in violation of its charter or by-laws or in
default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage,
deed of trust, loan or credit agreement, note, lease or other agreement
or instrument to which the Company or any of its subsidiaries is a
party or by which it or any of them may be bound, or to which any of
the property or assets of the Company or any subsidiary is subject
(collectively, "Agreements and Instruments") except for such defaults
that would not result in a Material Adverse Effect; and the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated herein and compliance by the Company with its
obligations hereunder have been duly authorized by all necessary
corporate action and do not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as defined
below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any
subsidiary pursuant to, the Agreements and Instruments (except for such
conflicts, breaches or defaults or liens, charges or encumbrances that
would not result in a Material Adverse Effect), nor will such action
result in any violation of the provisions of the charter or by-laws of
the Company or any subsidiary or any applicable law, statute, rule,
regulation, judgment, order, writ or decree of any government,
government instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any subsidiary or any of their assets,
properties or operations. As used herein, a "Repayment Event" means any
event or condition which gives the holder of any note, debenture or
other evidence of indebtedness (or any person acting on such holder's
behalf) the right to require the repurchase, redemption or repayment of
all or a portion of such indebtedness by the Company or any subsidiary.
The consummation of the transactions contemplated in the Registration
Statement
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(including the sale of the Securities) do not and will not, whether
with or without the giving of notice or passage of time or both,
conflict with or constitute a breach of, or default or Repayment Event
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any
subsidiary pursuant to, the Agreements and Instruments (except for such
conflicts, breaches or defaults or liens, charges or encumbrances that
would not result in a Material Adverse Effect), nor will such action
result in any violation of the provisions of the charter or by-laws of
the Company or any subsidiary or any applicable law, statute, rule,
regulation, judgment, order, writ or decree of any government,
government instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any subsidiary or any of their assets,
properties or operations.
(xii) Absence of Labor Dispute. No labor dispute with the employees of
the Company or any subsidiary exists or, to the knowledge of the
Company, is imminent, which may reasonably be expected to result in a
Material Adverse Effect.
(xiii) Absence of Proceedings. There is no action, suit, proceeding or
investigation before or brought by any court or governmental agency or
body, domestic or foreign, now pending, or, to the knowledge of the
Company, threatened, against or affecting the Company or any
subsidiary, which is required to be disclosed in the Registration
Statement (other than as disclosed therein), or which might reasonably
be expected to result in a Material Adverse Effect, or which might
reasonably be expected to materially and adversely affect the
properties or assets thereof or the consummation of the transactions
contemplated in this Agreement or the performance by the Company of its
obligations hereunder; the aggregate of all pending legal or
governmental proceedings to which the Company or any subsidiary is a
party or of which any of their respective property or assets is the
subject which are not described in the Registration Statement,
including ordinary routine litigation incidental to the business, could
not reasonably be expected to result in a Material Adverse Effect.
(xiv) Accuracy of Exhibits. There are no contracts or documents which
are required to be described in the Registration Statement, the
Prospectus or the documents incorporated by reference therein or to be
filed as exhibits thereto which have not been so described and filed as
required.
(xv) Possession of Intellectual Property. The Company and its
subsidiaries own or possess, or can acquire on reasonable terms,
adequate patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks, trade names or other
intellectual property (collectively, "Intellectual Property") necessary
to carry on the business now operated by them, and neither the Company
nor any of its subsidiaries has received any notice of any infringement
of or conflict with asserted rights of others with respect to any
Intellectual Property or of any facts or circumstances which would
render any Intellectual Property invalid or inadequate to protect the
interest of the Company or any of its subsidiaries therein, and which
infringement or conflict (if the subject of any unfavorable decision,
ruling or finding) or
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invalidity or inadequacy, singly or in the aggregate, would result in a
Material Adverse Effect.
(xvi) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency is necessary or required for the performance by the Company of
its obligations hereunder, in connection with the offering or sale of
the Securities hereunder or the consummation of the transactions
contemplated by this Agreement, except such as have been already
obtained or as may be required under the 1933 Act or the 1933 Act
Regulations or state securities laws.
(xvii) Possession of Licenses and Permits. The Company and its
subsidiaries possess such permits, licenses, approvals, consents and
other authorizations (collectively, "Governmental Licenses") issued by
the appropriate federal, state, local or foreign regulatory agencies or
bodies necessary to conduct the business now operated by them; the
Company and its subsidiaries are in compliance with the terms and
conditions of all such Governmental Licenses, except where the failure
so to comply would not, singly or in the aggregate, have a Material
Adverse Effect; all of the Governmental Licenses are valid and in full
force and effect, except when the invalidity of such Governmental
Licenses or the failure of such Governmental Licenses to be in full
force and effect would not have a Material Adverse Effect; and neither
the Company nor any of its subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such
Governmental Licenses which, singly or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would result in a
Material Adverse Effect.
(xviii) Title to Property. The Company and its subsidiaries have good
and marketable title to all real property owned by the Company and its
subsidiaries and good title to all other properties owned by them, in
each case, free and clear of all mortgages, pledges, liens, security
interests, claims, restrictions or encumbrances of any kind except such
as (a) are described in the Prospectus or (b) do not, singly or in the
aggregate, materially affect the value of such property and do not
interfere with the primary uses made and proposed to be made of such
property by the Company or any of its subsidiaries; and all of the
leases and subleases material to the business of the Company and its
subsidiaries, considered as one enterprise, and under which the Company
or any of its subsidiaries holds properties described in the
Prospectus, are in full force and effect as of the dates set forth
therein, and neither the Company nor any of its subsidiaries has any
notice of any claim of any sort that has been asserted by anyone
adverse to the rights of the Company or any of its subsidiaries under
any of the leases or subleases mentioned above, or affecting or
questioning the rights of the Company or such subsidiary to the
continued possession of the leased or subleased premises under any such
lease or sublease which, singly or in the aggregate, if the subject of
an unfavorable decision, ruling or finding, would result in a Material
Adverse Effect.
(xix) Investment Company Act. The Company is not an open-end investment
company, unit investment trust or face-amount certificate company that
is or is required to be registered under Section 8 of the United States
Investment Company Act of 1940 (the "Investment Company Act"); and the
Company is not and, after giving effect to the
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offering and sale of the Securities and the application of the proceeds
thereof as described in the Prospectus, will not be required to
register as an "investment company" as defined in the Investment
Company Act.
(xx) Environmental Laws. Except as disclosed in the Registration
Statement or as would not, individually or in the aggregate, have a
Material Adverse Effect, (i) neither the Company nor any of its
subsidiaries has been or is in violation of any federal, state or local
laws and regulations relating to pollution or protection of human
health or the environment, including, without limitation, laws and
regulations relating to emissions, discharges, releases or threatened
releases of toxic or hazardous substances, materials or wastes, or
petroleum and petroleum products ("Materials of Environmental
Concern"), or otherwise relating to the protection of human health and
safety, or the use, treatment, storage, disposal, transport or handling
of Materials of Environmental Concern (collectively, "Environmental
Laws"), which violation includes, but is not limited to, noncompliance
with, or lack of, any permits or other environmental authorizations;
(ii) there are no circumstances, either past, present or that are
reasonably foreseeable, that may lead to any such violation in the
future; (iii) neither the Company nor any of its subsidiaries has
received any communication (written or oral), whether from a
governmental authority or otherwise, alleging any such violation; (iv)
there is no pending or threatened claim, action, investigation or
notice (written or oral) by any person or entity alleging potential
liability of the Company or any of its subsidiaries (or against any
person or entity for whose acts or omissions the Company or any of its
subsidiaries is or may reasonably be expected to be liable, either
contractually or by operation of law) for investigatory, cleanup, or
other response costs, or natural resources or property damages, or
personal injuries, attorney's fees or penalties relating to (A) the
presence, or release into the environment, of any Materials of
Environmental Concern at any location, or (B) circumstances forming the
basis of any violation or potential violation, of any Environmental Law
(collectively, "Environmental Claims"); and (v) there are no past or
present actions, activities, circumstances, conditions, events or
incidents that could form the basis of any Environmental Claim.
(xxi) Internal Accounting Controls. The Company and each subsidiary of
the Company maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability;
(iii) access is permitted only in accordance with management's general
or specific authorization; and (iv) the recorded accountability for
assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(xxii) Taxes. All material Tax returns required to be filed by the
Company and its Subsidiaries have been filed and all such returns are
true, complete, and correct in all material respects, subject only to
the matters disclosed in the Registration Statement. All material Taxes
that are due or claimed to be due from the Company and its Subsidiaries
have been paid other than those (i) currently payable without penalty
or interest or (ii) being contested in good faith and by appropriate
proceedings and for which, in the case
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of both clauses (i) and (ii), adequate reserves in accordance with GAAP
have been established on the books and records of the Company and its
Subsidiaries. Except as disclosed in the Registration Statement, there
are no proposed, material Tax assessments against the Company or any of
its Subsidiaries. The accruals and reserves required to be established
on the books and records of the Company and its Subsidiaries in
accordance with GAAP in respect of any material Tax liability for any
Taxable period not finally determined are reasonably adequate to meet
any assessments of Tax for any such period. For purposes of this
Purchase Agreement, the term "Tax" and "Taxes" shall mean all Federal,
state, local and foreign taxes, and other assessments of a similar
nature (whether imposed directly or through withholding), including any
interest, additions to tax, or penalties applicable thereto.
(xxiii) Registration Rights. Other than the agreements listed in
Schedule B hereto, there are no contracts, agreements or understandings
between the Company and any person granting such person the right to
require the Company to file a registration statement under the Act with
respect to any securities of the Company owned or to be owned by such
person or to require the Company to include such securities in the
securities registered pursuant to the Registration Statement or in any
securities being registered pursuant to any other registration
statement filed by the Company under the Act. No such person currently
has any rights to require the Company to include any additional
securities in the Registration Statement.
(b) Representations and Warranties by the Selling Shareholder. The
Selling Shareholder represents and warrants to the Underwriter as of the date
hereof and as of the Closing Time, and agrees with the Underwriter, as follows:
(i) Accurate Disclosure. The Selling Shareholder has reviewed the
Registration Statement, and the sale of the Securities by the Selling
Shareholder pursuant hereto is not prompted by any information
concerning the Company or any of its subsidiaries which is not set
forth in the Prospectus or any supplement thereto. The information in
the Base Prospectus under the caption "Selling Stockholders" and the
information in the Prospectus Supplement under the caption "Selling
Stockholder," in each case, which specifically relates to the Selling
Shareholder does not, and will not on the Closing Time, contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading.
(ii) Authorization of Agreements. The Selling Shareholder has the full
right, power and authority to enter into this Agreement and to sell,
transfer and deliver the Securities to be sold by the Selling
Shareholder hereunder. The execution and delivery of this Agreement and
the sale and delivery of the Securities to be sold by the Selling
Shareholder and the consummation of the transactions contemplated
herein and compliance by the Selling Shareholder with its obligations
hereunder have been duly authorized by the Selling Shareholder and do
not and will not, whether with or without the giving of notice or
passage of time or both, conflict with or constitute a breach of, or
default under, or result in the creation or imposition of any tax,
lien, charge or encumbrance upon the Securities to be sold by the
Selling Shareholder or any property
9
or assets of the Selling Shareholder pursuant to any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note,
license, lease or other agreement or instrument to which the Selling
Shareholder is a party or by which the Selling Shareholder may be
bound, or to which any of the property or assets of the Selling
Shareholder is subject, nor will such action result in any violation of
the provisions of the charter or by-laws or other organizational
instrument of the Selling Shareholder, if applicable, or any applicable
treaty, law, statute, rule, regulation, judgment, order, writ or decree
of any government, government instrumentality or court, domestic or
foreign, having jurisdiction over the Selling Shareholder or any of its
properties.
(iii) Good and Marketable Title. The Selling Shareholder has and will
at the Closing Time have valid and marketable title to the Securities
to be sold by the Selling Shareholder hereunder, free and clear of any
security interest, mortgage, pledge, lien, charge, claim, equity or
encumbrance of any kind, other than pursuant to this Agreement; and
upon delivery of such Securities and payment of the purchase price
therefor as herein contemplated, assuming the Underwriter has no notice
of any adverse claim, the Underwriter will receive good and marketable
title to the Securities purchased by it from the Selling Shareholder,
free and clear of any security interest, mortgage, pledge, lien,
charge, claim, equity or encumbrance of any kind.
(iv) Absence of Manipulation. The Selling Shareholder has not taken,
and will not take, directly or indirectly, any action which is designed
to or which has constituted or which might reasonably be expected to
cause or result in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Securities.
(v) Absence of Further Requirements. No filing with, or consent,
approval, authorization, license, order, registration, qualification or
decree of, any court or governmental authority or agency, domestic or
foreign, is necessary or required for the performance by each Selling
Shareholder of its obligations hereunder or in connection with the
offer, sale and delivery of the Securities hereunder or the
consummation of the transactions contemplated by this Agreement, except
such as may have previously been made or obtained or as may be required
under the 1933 Act or the 1933 Act Regulations or state securities
laws.
(vi) Certificates Suitable for Transfer. Certificates for all of the
Securities to be sold by the Selling Shareholder pursuant to this
Agreement, in suitable form for transfer by delivery or accompanied by
duly executed instruments of transfer or assignment in blank with
signatures guaranteed, will be delivered on the Closing Time to the
Underwriter pursuant to this Agreement.
(vii) No Association with NASD. Neither the Selling Shareholder nor any
of its affiliates directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common
control with, or has any other association with (within the meaning of
Article I, Section 1(m) of the By-laws of the National Association of
Securities Dealers, Inc.), any member firm of the National Association
of Securities Dealers, Inc.
10
(viii) Due Execution of Power of Attorney. The Selling Shareholder has
duly executed and delivered, in the form furnished to the Underwriter, the Power
of Attorney with Xxxxx Xxxxx and Xxxxx Xxxxxxx, each as attorney-in-fact (the
"Attorneys-in-Fact"); and (ii) each of the Attorneys-in-Fact is authorized to
execute and deliver this Agreement and the certificate referred to in Section
5(f) or that may be required pursuant to Section 5(j) on behalf of the Selling
Shareholder, to sell, assign, and transfer to the Underwriter the Securities to
be sold by the Selling Shareholder hereunder, to determine the purchase price to
be paid by the Underwriter to the Selling Shareholder, as provided in Section
2(a) hereof, to authorize the delivery of the Securities to be sold by the
Selling Shareholder hereunder, to accept payment therefor, and otherwise to act
on behalf of the Selling Shareholder in connection with this Agreement.
(c) Officer's Certificates. Any closing certificate signed by any
officer of the Company or any of its subsidiaries delivered to the Underwriter
or to counsel for the Underwriter pursuant to the terms of this Agreement shall
be deemed a representation and warranty by the Company to the Underwriter as to
the matters covered thereby; and any certificate signed by or on behalf of the
Selling Shareholder and delivered to the Underwriter or to counsel for the
Underwriter pursuant to the terms of this Agreement shall be deemed a
representation and warranty by the Selling Shareholder to the Underwriter as to
the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriter; Closing.
(a) Securities. On the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Selling Shareholder agrees to sell to the Underwriter, and the Underwriter
agrees to purchase from the Selling Shareholder, the Securities at a price per
share of $18.77.
(b) Payment. Payment of the purchase price for, and delivery of
certificates for, the Securities shall be made at the offices of Skadden, Arps,
Slate, Xxxxxxx & Xxxx LLP, 000 Xxxxx Xxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx
00000, or at such other place as shall be agreed upon by the Underwriter and the
Company and the Selling Shareholders, at 7:00 A.M. (California time) on the
third (fourth, if the pricing occurs after 4:30 P.M. (Eastern time) on any given
day) business day after the date hereof (unless postponed in accordance with the
provisions of Section 10), or such other time not later than ten business days
after such date as shall be agreed upon by the Underwriter and the Company and
the Selling Shareholder (such time and date of payment and delivery being herein
called "Closing Time").
Payment shall be made to the Selling Shareholder by wire transfer of
immediately available funds to a bank account designated by the Selling
Shareholder against delivery to the Underwriter of certificates for the
Securities to be purchased by it.
(c) Denominations; Registration. Certificates for the Securities shall
be in such denominations and registered in such names as the Underwriter may
request in writing at least one full business day before the Closing Time. The
certificates for the Securities will be made available for examination and
packaging by the Underwriter in The City of New York not later than 10:00 A.M.
(Eastern time) on the business day prior to the Closing Time.
11
SECTION 3. Covenants of the Company and the Selling Shareholder. The
Company covenants with the Underwriter with respect to Sections 3(a) through
3(i), and the Selling Shareholder covenants with the Underwriter only with
respect to Section 3(j):
(a) Compliance with Securities Regulations and Commission Requests. The
Company, subject to Section 3(b), will comply with the requirements of Rule 430A
and will notify the Underwriter immediately, and confirm the notice in writing,
(i) when any post-effective amendment to the Registration Statement shall become
effective, or any supplement to the Prospectus or any amended Prospectus shall
have been filed, (ii) of the receipt of any comments from the Commission, (iii)
of any request by the Commission for any amendment to the Registration Statement
or any amendment or supplement to the Prospectus or for additional information,
and (iv) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing or
suspending the use of any preliminary prospectus, or of the suspension of the
qualification of the Securities for offering or sale in any jurisdiction, or of
the initiation or threatening of any proceedings for any of such purposes. The
Company will promptly effect the filings necessary pursuant to Rule 424(b) and
will take such steps as it deems necessary to ascertain promptly whether the
form of prospectus transmitted for filing under Rule 424(b) was received for
filing by the Commission and, in the event that it was not, it will promptly
file such prospectus. The Company will make every reasonable effort to prevent
the issuance of any stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible moment.
(b) Filing of Amendments. The Company will give the Underwriter notice
of its intention to file or prepare any amendment to the Registration Statement
(including any filing under Rule 462(b)), any Term Sheet or any amendment,
supplement or revision to either the prospectus included in the Registration
Statement at the time it became effective or to the Prospectus, whether pursuant
to the 1933 Act, the 1934 Act or otherwise, will furnish the Underwriter with
copies of any such documents a reasonable amount of time prior to such proposed
filing or use, as the case may be, and will not file or use any such document to
which the Underwriter or counsel for the Underwriter shall reasonably object.
(c) Delivery of Registration Statements. The Company has furnished or
will deliver to the Underwriter and counsel for the Underwriter, without charge,
signed copies of the Registration Statement as originally filed and of each
amendment thereto (including, if requested by the Underwriter, exhibits filed
therewith or incorporated by reference therein and documents incorporated or
deemed to be incorporated by reference therein) and signed copies of all
consents and certificates of experts, and will also deliver to the Underwriter,
without charge, a conformed copy of the Registration Statement as originally
filed and of each amendment thereto (without exhibits) for the Underwriter. The
copies of the Registration Statement and each amendment thereto furnished to the
Underwriter will be identical to the electronically transmitted copies thereof
filed with the Commission pursuant to XXXXX, except to the extent permitted by
Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered to the
Underwriter, without charge, as many copies of each preliminary prospectus as
the Underwriter reasonably requested, and the Company hereby consents to the use
of such copies for purposes permitted by the 1933 Act. The Company will furnish
to the Underwriter, without charge, during the period when the
12
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, such
number of copies of the Prospectus (as amended or supplemented) as the
Underwriter may reasonably request. The Prospectus and any amendments or
supplements thereto furnished to the Underwriter will be identical to the
electronically transmitted copies thereof filed with the Commission pursuant to
XXXXX, except to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will comply
with the 1933 Act and the 1933 Act Regulations and the 1934 Act and the 1934 Act
Regulations so as to permit the completion of the distribution of the Securities
as contemplated in this Agreement and in the Prospectus. If at any time when a
prospectus is required by the 1933 Act to be delivered in connection with sales
of the Securities, any event shall occur or condition shall exist as a result of
which it is necessary, in the opinion of counsel for the Underwriter or for the
Company, to amend the Registration Statement or amend or supplement the
Prospectus in order that the Prospectus will not include any untrue statements
of a material fact or omit to state a material fact necessary in order to make
the statements therein not misleading in the light of the circumstances existing
at the time it is delivered to a purchaser, or if it shall be necessary, in the
opinion of such counsel, at any such time to amend the Registration Statement or
amend or supplement the Prospectus in order to comply with the requirements of
the 1933 Act or the 1933 Act Regulations, the Company will promptly prepare and
file with the Commission, subject to Section 3(b), such amendment or supplement
as may be necessary to correct such statement or omission or to make the
Registration Statement or the Prospectus comply with such requirements, and the
Company will furnish to the Underwriter such number of copies of such amendment
or supplement as the Underwriter may reasonably request.
(f) Blue Sky Qualifications. The Company will use its best efforts, in
cooperation with the Underwriter, to qualify the Securities for offering and
sale under the applicable securities laws of such states and other jurisdictions
(domestic or foreign) as the Underwriter may designate and to maintain such
qualifications in effect for a period of not less than one year from the later
of the effective date of the Registration Statement and any Rule 462(b)
Registration Statement; provided, however, that the Company shall not be
obligated to file any general consent to service of process or to qualify as a
foreign corporation or as a dealer in securities in any jurisdiction in which it
is not so qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject. In each
jurisdiction in which the Securities have been so qualified, the Company will
file such statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for a period of not less
than one year from the effective date of the Registration Statement and any Rule
462(b) Registration Statement.
(g) Rule 158. The Company will timely file such reports pursuant to the
1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the purposes
of, and to provide the benefits contemplated by, the last paragraph of Section
11(a) of the 1933 Act.
(h) Restriction on Sale of Securities. During a period of 30 days from
the date of the Prospectus, the Company will not, without the prior written
consent of the Underwriter, (i) directly or indirectly, offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase or
13
otherwise transfer or dispose of any share of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock or file any
registration statement under the 1933 Act with respect to any of the foregoing
or (ii) enter into any swap or any other agreement or any transaction that
transfers, in whole or in part, directly or indirectly, the economic consequence
of ownership of the Common Stock, whether any such swap or transaction described
in clause (i) or (ii) above is to be settled by delivery of Common Stock or such
other securities, in cash or otherwise. The foregoing sentence shall not apply
to (A) the Securities to be sold hereunder, (B) any shares of Common Stock
issued by the Company upon the exercise of an option or warrant or the
conversion of a security outstanding on the date hereof and referred to in the
Prospectus, (C) any shares of Common Stock issued or options to purchase Common
Stock granted pursuant to existing employee benefit plans of the Company
referred to in the Prospectus or (D) any shares of Common Stock issued pursuant
to any non-employee director stock plan or dividend reinvestment plan.
(i) Reporting Requirements. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will
file all documents required to be filed with the Commission pursuant to the 1934
Act within the time periods required by the 1934 Act and the 1934 Act
Regulations.
(j) Lock-up Agreements. The Selling Shareholder will sign the agreement
substantially in the form of Exhibit C hereto and will use its reasonable best
efforts to obtain an agreement substantially in the form of Exhibit C hereto
signed by Gila Limited.
SECTION 4. Payment of Expenses.
(a) Expenses. Except as otherwise set forth herein, the Company will
pay or cause to be paid all expenses incident to the performance of its
obligations and the obligations of the Selling Shareholder under this Agreement,
including (i) the preparation, printing and filing of the Registration Statement
(including financial statements and exhibits) as originally filed and of each
amendment thereto, (ii) the preparation, printing and delivery to the
Underwriter of this Agreement, any Agreement among Underwriters and such other
documents as may be required in connection with the offering, purchase, sale,
issuance or delivery of the Securities, (iii) the preparation, issuance and
delivery of the certificates for the Securities to the Underwriter, including
any stock or other transfer taxes and any stamp or other duties payable upon the
sale, issuance or delivery of the Securities to the Underwriter, (iv) the fees
and disbursements of the Company's counsel, accountants and other advisors, (v)
the qualification of the Securities under securities laws in accordance with the
provisions of Section 3(f) hereof, including filing fees and the reasonable fees
and disbursements of counsel for the Underwriter in connection therewith and in
connection with the preparation of the Blue Sky Survey and any supplement
thereto, (vi) the printing and delivery to the Underwriter of copies of each
preliminary prospectus, any Term Sheets and of the Prospectus and any amendments
or supplements thereto, (vii) the preparation, printing and delivery to the
Underwriter of copies of the Blue Sky Survey and any supplement thereto, (viii)
the fees and expenses of any transfer agent or registrar for the Securities,
(ix) the filing fees incident to, and the reasonable fees and disbursements of
counsel to the Underwriter in connection with, the review by the National
Association of Securities Dealers, Inc. (the "NASD") of the terms of the sale of
the Securities and (x) the fees and expenses incurred in connection with the
listing of the Securities on the New York Stock
14
Exchange. Notwithstanding anything to the contrary in this Section 4, the cost
or expense of all underwriting discounts and selling commissions applicable to
the sale of Securities pursuant to this Agreement shall be borne by the Selling
Shareholder.
(b) Expenses of the Selling Shareholder. The Selling Shareholder will
pay all expenses incident to the performance of its obligations under, and the
consummation of the transactions contemplated by this Agreement, including (i)
any stamp duties, capital duties and stock transfer taxes, if any, payable upon
the sale of the Securities to the Underwriter and (ii) the fees and
disbursements of its counsel and accountants.
(c) Termination of Agreement. If this Agreement is terminated by the
Underwriter in accordance with the provisions of Section 5, Section 9(a)(i) or
Section 10 hereof, the Company shall reimburse the Underwriter for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriter; provided, however, that if any such termination of
this Agreement is solely caused by, or based solely upon, a default by the
Selling Shareholder as referred to in Section 10 of this Agreement, or the
failure of the Selling Shareholder to comply with its requirements under Section
5 of this Agreement, then the Selling Shareholder shall reimburse the
Underwriter for such expenses. (d) Allocation of Expenses. The provisions of
this Section shall not affect any agreement that the Company and the Selling
Shareholder may make for the sharing of such costs and expenses.
SECTION 5. Conditions of Underwriter's Obligations. The obligations of
the Underwriter hereunder are subject to the accuracy of the representations and
warranties of the Company and the Selling Shareholder contained in Section 1
hereof or in certificates of any officer of the Company or any subsidiary of the
Company or on behalf of the Selling Shareholder delivered pursuant to the
provisions hereof, to the performance by the Company of its covenants and other
obligations hereunder, and to the following further conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at Closing Time no stop order suspending the effectiveness of the
Registration Statement shall have been issued under the 1933 Act or proceedings
therefore initiated or threatened by the Commission, and any request on the part
of the Commission for additional information shall have been complied with to
the reasonable satisfaction of counsel to the Underwriter. A prospectus
containing the Rule 430A Information shall have been filed with the Commission
in accordance with Rule 424(b) (or a post-effective amendment providing such
information shall have been filed and declared effective in accordance with the
requirements of Rule 430A).
(b) Opinion of Counsel for Company. At Closing Time, the Underwriter
shall have received the favorable opinions, dated as of Closing Time, of Xxxxxx,
Xxxx & Xxxxxxxx LLP, counsel for the Company, and Xxx Xxxxxx, General Counsel of
the Company, in each case, in form and substance satisfactory to counsel for the
Underwriter, to the effect set forth in Exhibits A and AA hereto.
(c) Opinion of Counsel for the Selling Shareholder. At Closing Time,
the Underwriter shall have received the favorable opinions, dated as of Closing
Time, of Xxx Xxxxx Xxxxx, in
15
form and substance reasonably satisfactory to counsel for the Underwriter, to
the effect set forth in Exhibit B.
(d) Opinion of Counsel for Underwriter. At Closing Time, the
Underwriter shall have received the favorable opinion, dated as of Closing Time,
of Skadden, Arps, Slate, Xxxxxxx and Xxxx LLP, counsel for the Underwriter, with
respect to the matters set forth in clauses (i), (ii), (iv) through (vi),
inclusive, the paragraph immediately following clause (xii) (solely as to the
information in the Prospectus under "Description of Capital Stock") and the
penultimate paragraph of Exhibit A hereto. In giving such opinion such counsel
may rely, as to all matters governed by the laws of jurisdictions other than the
law of the State of New York, the federal law of the United States and the
General Corporation Law of the State of Delaware, upon the opinions of counsel
satisfactory to the Underwriter. Such counsel may also state that, insofar as
such opinion involves factual matters, they have relied, to the extent they deem
proper, upon certificates of officers of the Company and its subsidiaries and
certificates of public officials.
(e) Officers' Certificate. At Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the Prospectus, any material adverse change in the condition, financial
or otherwise, or in the earnings or business of the Company and its subsidiaries
considered as one enterprise, whether or not arising in the ordinary course of
business, and the Underwriter shall have received a certificate of the President
or a Vice President of the Company and of the chief financial or chief
accounting officer of each of the Company, dated as of Closing Time, to the
effect that (i) there has been no such material adverse change, (ii) the
representations and warranties in Section 1(a) hereof are true and correct with
the same force and effect as though expressly made at and as of Closing Time,
(iii) the Company has complied with all agreements and satisfied all conditions
on its part to be performed or satisfied at or prior to Closing Time, and (iv)
no stop order suspending the effectiveness of the Registration Statement has
been issued and no proceedings for that purpose have been instituted or are
pending or are contemplated by the Commission.
(f) Certificate of Selling Shareholder. At Closing Time, the
Underwriter shall have received a certificate of an Attorney-in-Fact on behalf
of or an executive officer of the Selling Shareholder, dated as of Closing Time,
to the effect that (i) the representations and warranties of the Selling
Shareholder contained in Section 1(b) hereof are true and correct in all
respects with the same force and effect as though expressly made at and as of
Closing Time and (ii) the Selling Shareholder has complied in all material
respects with all agreements and all conditions on its part to be performed
under this Agreement at or prior to Closing Time.
(g) Accountant's Comfort Letter. No later than January 16, 2004, the
Underwriter shall have received from PricewaterhouseCoopers, LLP a letter dated
as of the date hereof, in form and substance satisfactory to the Underwriter
containing statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters with respect to the financial
statements and certain financial information contained in the Registration
Statement and the Prospectus.
(h) Bringdown Comfort Letter. At Closing Time, the Underwriter shall
have received from PricewaterhouseCoopers, LLP a letter, dated as of Closing
Time, to the effect that they reaffirm the statements made in the letter
furnished pursuant to subsection (g) of this Section,
16
except that the specified date referred to shall be a date not more than three
business days prior to Closing Time.
(i) Approval of Listing. At Closing Time, the Securities shall have
been approved for listing on the New York Stock Exchange.
(j) Additional Documents. At Closing Time counsel for the Underwriter
shall have been furnished with such documents and opinions as they may
reasonably require for the purpose of enabling them to pass upon the issuance
and sale of the Securities as herein contemplated, or in order to evidence the
accuracy of any of the representations or warranties, or the fulfillment of any
of the conditions, herein contained; and all proceedings taken by the Company
and the Selling Shareholders in connection with the sale of the Securities as
herein contemplated shall be satisfactory in form and substance to the
Underwriter and counsel for the Underwriter.
(k) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled, this
Agreement may be terminated by the Underwriter by notice to the Company at any
time at or prior to Closing Time, and such termination shall be without
liability of any party to any other party except as provided in Section 4 and
except that Sections 1, 6, 7 and 8 shall survive any such termination and remain
in full force and effect.
(l) Form W-9. The Selling Shareholder shall have delivered to the
Company at Closing Time a properly completed and executed United States Treasury
Department Form W-9 (or other applicable form or statement specified by Treasury
Department regulations in lieu thereof).
SECTION 6.Indemnification.
(a) Indemnification of Underwriter. The Company agrees to indemnify and
hold harmless the Underwriter and each person, if any, who controls the
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act to the extent and in the manner set forth in clauses (i), (ii) and
(iii) below. In addition, the Selling Shareholder agrees to indemnify and hold
harmless the Underwriter and each person, if any, who controls the Underwriter
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (or any
amendment thereto), including the Rule 430A Information, or the omission or
alleged omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading or arising out of any
untrue statement or alleged untrue statement of a material fact included in any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto), or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or
17
of any claim whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission; provided that (subject to Section
6(d) below) any such settlement is effected with the written consent of the
Company and the Selling Shareholder; and
(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by the Underwriter), reasonably
incurred in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, to the extent that
any such expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by the
Underwriter expressly for use in the Registration Statement (or any amendment
thereto), including the Rule 430A Information, or any preliminary prospectus or
the Prospectus (or any amendment or supplement thereto); and, provided, further,
that the Company will not be liable to the Underwriter with respect to any
prospectus to the extent that the Company shall sustain the burden of proving
that any such loss, liability, claim, damage or expense resulted from the fact
that the Underwriter, in contravention of a requirement of this Agreement or
applicable law, sold Securities to a person to whom the Underwriter failed to
send or give, at or prior to the Closing Time, a copy of the Prospectus, as then
amended or supplemented if: (i) the Company has previously furnished copies
thereof (sufficiently in advance of the Closing Time to allow for distribution
by the Closing Time) to the Underwriter and the loss, liability, claim, damage
or expense of the Underwriter resulted from an untrue statement or omission of a
material fact contained in or omitted from the preliminary Prospectus which was
corrected in the Prospectus as, if applicable, amended or supplemented prior to
the Closing Time and such Prospectus was required by law to be delivered at or
prior to the written confirmation of sale to such person and (ii) such failure
to give or send such Prospectus by the Closing Time to the party or parties
asserting such loss, liability, claim, damage or expense would have constituted
the sole defense to the claim asserted by such person; provided, further that
the Selling Shareholder shall only be subject to such liability to the extent
that the untrue statement or alleged untrue statement or omission or alleged
omission is based upon information provided in writing by the Selling
Shareholder or contained in a representation or warranty given by the Selling
Shareholder in this Agreement or the Power of Attorney; and provided, further,
that the liability under this subsection of the Selling Shareholder shall be
limited to an amount equal to the gross proceeds after underwriting commissions
and discounts, but before expenses, to the Selling Shareholder from the sale of
Securities sold by the Selling Shareholder hereunder.
(b) Indemnification of Company, Directors and Officers and Selling
Shareholder. Each Underwriter severally agrees to indemnify and hold harmless
the Company, its directors, each of its officers who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act, and the Selling
Shareholder and each person, if any, who controls the Selling Shareholder within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act against
any and all loss, liability, claim, damage and expense described in the
indemnity contained in this Section 6, as incurred, but only with respect to
untrue statements or omissions, or alleged untrue statements or
18
omissions, made in the Registration Statement (or any amendment thereto),
including the Rule 430A Information, or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by the Underwriter
expressly for use in the Registration Statement (or any amendment thereto) or
such preliminary prospectus or the Prospectus (or any amendment or supplement
thereto).
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by the Underwriter, and, in
the case of parties indemnified pursuant to Section 6(b) above, counsel to the
indemnified parties shall be selected by the Company. An indemnifying party may
participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding 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) Settlement without Consent if Failure to Reimburse. If at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into, and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement; provided that an indemnifying party shall not be liable for any such
settlement effected without its consent if such indemnifying party, prior to the
date of such settlement, (1) reimburses such indemnified party in accordance
with such request for the amount of such fees and expenses of counsel as the
indemnifying party believes in good faith to be reasonable, and (2) provides
written notice to the indemnified party that the
19
indemnifying party disputes in good faith the reasonableness of the unpaid
balance of such fees and expenses.
(e) Other Agreements with Respect to Indemnification. The provisions of
this Section shall not affect any agreement among the Company and the Selling
Shareholder with respect to indemnification.
SECTION 7. Contribution. If the indemnification provided for in Section
6 hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Selling Shareholder on the one hand and the Underwriter on the other hand from
the offering of the Securities pursuant to this Agreement or (ii) if the
allocation provided by clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company and the
Selling Shareholder on the one hand and of the Underwriter on the other hand in
connection with the statements or omissions which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Company and the Selling
Shareholder on the one hand and the Underwriter on the other hand in connection
with the offering of the Securities pursuant to this Agreement shall be deemed
to be in the same respective proportions as the total net proceeds from the
offering of the Securities pursuant to this Agreement (before deducting
expenses) received by the Company and the Selling Shareholder and the total
underwriting discount received by the Underwriter, in each case as set forth on
the cover of the Prospectus.
The relative fault of the Company and the Selling Shareholder on the
one hand and the Underwriter on the other hand shall be determined by reference
to, among other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company or the Selling Shareholder or by the
Underwriter and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The Company, the Selling Shareholder and the Underwriter agree that it
would not be just and equitable if contribution pursuant to this Section 7 were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to above in this
Section 7. The aggregate amount of losses, liabilities, claims, damages and
expenses incurred by an indemnified party and referred to above in this Section
7 shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
20
Notwithstanding the provisions of this Section 7, no Underwriter shall
be required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission. Notwithstanding the
provisions of this Section 7, the Selling Shareholder shall not be required to
contribute any amount in excess of the aggregate gross proceeds after
underwriting commissions and discounts, but before expenses, to such Selling
Shareholder from the sale of Securities sold by such Selling Shareholder.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 0000 Xxx) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls the
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company or the
Selling Shareholder within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act shall have the same rights to contribution as the Company or
the Selling Shareholder, as the case may be.
The provisions of this Section shall not affect any agreement among the
Company and the Selling Shareholder with respect to contribution.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company or any of its
subsidiaries or the Selling Shareholder submitted pursuant hereto, shall remain
operative and in full force and effect, regardless of any investigation made by
or on behalf of the Underwriter or any controlling person, or by or on behalf of
the Company or the Selling Shareholder, and shall survive delivery of the
Securities to the Underwriter.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Underwriter may terminate this Agreement,
by notice to the Company and the Selling Shareholder, at any time at or prior to
Closing Time (i) if there has been, since the time of execution of this
Agreement or since the respective dates as of which information is given in the
Prospectus (exclusive of any supplement thereto), any material adverse change in
the condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, or (ii)
if there has occurred any material adverse change in the financial markets in
the United States or in the international financial markets, any outbreak of
hostilities or escalation thereof or other calamity or crisis or any change or
development involving a prospective change in national or international
political, financial or economic conditions, in each case the effect of which is
such as to make it, in the judgment of the Underwriter, impracticable or
inadvisable to market the Securities or to enforce contracts for the sale of the
Securities, or (iii) if trading in any securities of the Company has been
suspended
21
or materially limited by the Commission or the New York Stock Exchange, or if
trading generally on the American Stock Exchange or the New York Stock Exchange
or in the Nasdaq National Market has been suspended or materially limited, or
minimum or maximum prices for trading have been fixed, or maximum ranges for
prices have been required, by any of said exchanges or by such system or by
order of the Commission, the National Association of Securities Dealers, Inc. or
any other governmental authority, or a material disruption has occurred in
commercial banking or securities settlement or clearance services in the United
States, or (iv) if a banking moratorium has been declared by either Federal or
New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6, 7 and 8 shall survive such termination and remain in full force and
effect.
SECTION 10. Default by the Selling Shareholder. If the Selling
Shareholder shall fail at Closing Time to sell and deliver the number of
Securities which the Selling Shareholder is obligated to sell hereunder, then
the Underwriter may, by notice from the Underwriter to the Company, terminate
this Agreement without any liability on the fault of any non-defaulting party
except that the provisions of Sections 1, 4, 6, 7 and 8 shall remain in full
force and effect. No action taken pursuant to this Section 10 shall relieve the
Selling Shareholder so defaulting from liability, if any, in respect of such
default.
In the event of a default by the Selling Shareholder as referred to in
this Section 10, each of the Underwriter and the Company shall have the right to
postpone Closing Time for a period not exceeding seven days in order to effect
any required change in the Registration Statement or Prospectus or in any other
documents or arrangements.
SECTION 11. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriter shall be directed to the Underwriter at Xxxxxxx, Xxxxx & Co., 00
Xxxxx Xxxxxx, Xxx Xxxx, XX 00000, Attention: Registration Department; notices to
the Company shall be directed to it at 000 X. Xxxxxxxx Xxx. Xxxxx 000, Xxxxxxx,
Xxxxxxx 00000, attention of Chief Financial Officer; and notices to the Selling
Shareholder shall be directed to the Selling Shareholder at West Wind Building,
P.O. Box 1111, Harbour Drive, Grand Cayman, Cayman Islands, B.W.I., Attention:
Xxxxx-Xxxxx & Company Ltd.
SECTION 12. Parties. This Agreement shall inure to the benefit of and
be binding upon the Underwriter, the Company and the Selling Shareholder and
their respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the Underwriter, the Company and the Selling Shareholder and their
respective successors and the controlling persons and officers and directors
referred to in Sections 6 and 7 and their heirs and legal representatives, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision herein contained. This Agreement and all conditions and
provisions hereof are intended to be for the sole and exclusive benefit of the
Underwriter, the Company and the Selling Shareholder and their
22
respective successors, and said controlling persons and officers and directors
and their heirs and legal representatives, and for the benefit of no other
person, firm or corporation. No purchaser of Securities from the Underwriter
shall be deemed to be a successor by reason merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD TO THE CONFLICTS OF LAW PRINCIPLES THAT WOULD APPLY THE LAW OF ANY OTHER
STATE. UNLESS OTHERWISE INDICATED, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY
TIME.
SECTION 14. Effect of Headings. The Article and Section headings herein
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
23
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company and the Selling Shareholder a
counterpart hereof, whereupon this instrument, along with all counterparts, will
become a binding agreement among the Underwriter, the Company and the Selling
Shareholder in accordance with its terms.
Very truly yours,
CSK AUTO CORPORATION
By /s/ Lon Novalt
--------------------------------
Name:
Title:
INVESTCORP CSK HOLDINGS L.P.
By /s/ Xxxxxxx Xxxxxxx
--------------------------------
Name:
Title:
Theforegoing Purchase Agreement is hereby confirmed
and accepted as of the date first above written:
XXXXXXX, SACHS & CO.
By /s/ Xxxxxxx, Xxxxx & Co.
------------------------------------------
Name:
Title:
SCHEDULE A
List of Subsidiaries
CSK Auto, Inc.
Automotive Information Systems, Inc.
XXXXXXX.XXX, Inc.
A-1
SCHEDULE B
List of Agreements with Registration Rights
1) Stockholders' Agreement dated as of October 30, 1996, as thereafter
amended and supplemented, by and between the Investcorp Group (as defined
therein), the Carmel Group (as defined therein), the Company and other named
stockholders.
2) Amended and Restated Registration Rights Agreement dated as of May
16, 2002, by and between CSK Auto Corporation and LBI Group Inc. and Investcorp
CSK Holdings L.P. (relating to $50MM 7% convertible debentures).
3) Registration Rights Agreement dated August 14, 2001, by and between
CSK Auto Corporation and Xxxxxxxxxxx Capital Investment Fund (relating to $30MM
7% convertible note).
4) Registration Rights Agreement to be entered into on January 16,
2004, by and among CSK Auto Corporation, the subsidiaries of CSK Auto
Corporation, and Credit Suisse First Boston LLC, as representative of the
initial purchasers (relating to sale of $225MM of senior subordinated notes of
CSK Auto, Inc. scheduled to close on January 16, 2004).
C-1
