CSK AUTO CORPORATION
(a Delaware corporation)
1,659,020 Shares of Common Stock
PURCHASE AGREEMENT
Dated: September 8, 2003
TABLE OF CONTENTS
SECTION 1. Representations and Warranties.......................................................... 2
(a) Representations and Warranties by the Company........................................... 2
(b) Representations and Warranties by the Selling Shareholders............................. 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............................................................... 11
(a) Compliance with Securities Regulations and Commission Requests......................... 11
(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 Shareholders................................................... 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 Shareholders........................................ 15
(d) Opinion of Counsel for Underwriter..................................................... 16
(e) Officers' Certificate.................................................................. 16
(f) Certificate of Selling Shareholders.................................................... 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 Shareholders............ 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 One or More of the Selling Shareholders..................................... 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 Selling Shareholders................................................. Sch A-1
Schedule B - Pricing Information.......................................................... Sch B-1
Schedule C - List of Subsidiaries......................................................... Sch C-1
Schedule D - List of Persons Subject to Lock-up........................................... Sch D-1
Schedule E - List of Agreements with Registration Rights.................................. Sch E-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 ▇▇▇ ▇▇▇▇▇-▇▇▇▇▇............................................. ▇-▇
▇▇▇▇▇▇▇ ▇▇ - ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ Counsel.............................................. BB-1
Exhibit C - Form of Lock-up Letter......................................................... C-1
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CSK AUTO CORPORATION
(a Delaware corporation)
1,659,020 Shares of Common Stock
(Par Value $.01 Per Share)
PURCHASE AGREEMENT
September 8, 2003
Credit Suisse First Boston LLC
Eleven ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
CSK Auto Corporation, a Delaware corporation (the "Company") and the
entities listed in Schedule A hereto (the "Selling Shareholders"), confirm their
respective agreements with Credit Suisse First Boston LLC (the "Underwriter"),
with respect to the sale by the Selling Shareholders, acting severally and not
jointly, and the purchase by the Underwriter of the respective numbers of shares
of Common Stock, par value $.01 per share, of the Company ("Common Stock") set
forth in Schedule A hereto. The aforesaid 1,659,020 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
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"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 ("▇▇▇▇▇").
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 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
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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 ▇▇▇▇▇,
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 assumptions used in the
preparation of the pro forma financial statements provide a
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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 C
hereto.
(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
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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
5
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 (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 invalidity or
inadequacy, singly or in the aggregate, would result in a Material Adverse
Effect.
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(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 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.
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(xx) Environmental Laws. Except as would not, individually or in the
aggregate, have a Material Adverse Effect or otherwise require disclosure
in the Registration Statement, (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. 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 of both clauses (i) and (ii),
adequate reserves have been established on the books and records of the
Company and its Subsidiaries in accordance with GAAP. There are no
proposed material Tax assessments against the Company or any of its
Subsidiaries as to which the Company has been notified. The accruals and
reserves on the books and records of the Company and its Subsidiaries in
8
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 E 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 Shareholders. Each
Selling Shareholder severally 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. Each Selling Shareholder has reviewed the
Registration Statement, and the sale of the Securities by such 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 Registration
Statement under the caption "Selling Stockholders" which specifically
relates to such 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. Each 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 such Selling Shareholder
hereunder. The execution and delivery of this Agreement and the sale and
delivery of the Securities to be sold by such Selling Shareholder and the
consummation of the transactions contemplated herein and compliance by
such Selling Shareholder with its obligations hereunder have been duly
authorized by such 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 such Selling Shareholder or any property or
assets of such 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 such Selling Shareholder is a party
or by which such Selling Shareholder may be bound, or to which any of the
property or assets of such 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 such Selling Shareholder, if
applicable, or any
9
applicable treaty, law, statute, rule, regulation, judgment, order, writ
or decree of any government, government instrumentality or court, domestic
or foreign, having jurisdiction over such Selling Shareholder or any of
its properties.
(iii) Good and Marketable Title. Such Selling Shareholder has and
will at the Closing Time have valid and marketable title to the Securities
to be sold by such 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 such Selling Shareholder, free and clear
of any security interest, mortgage, pledge, lien, charge, claim, equity or
encumbrance of any kind.
(iv) Absence of Manipulation. Such 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 such 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 such 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.
(viii) Due Execution of Power of Attorney. Each Selling Shareholder
has duly executed and delivered, in the form furnished to the Underwriter,
the Power of Attorney with ▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, 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
10
to Section 5(j) on behalf of such Selling Shareholder, to sell, assign,
and transfer to the Underwriter the Securities to be sold by such Selling
Shareholder hereunder, to determine the purchase price to be paid by the
Underwriter to such Selling Shareholder, as provided in Section 2(a)
hereof, to authorize the delivery of the Securities to be sold by such
Selling Shareholder hereunder, to accept payment therefor, and otherwise
to act on behalf of such 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 Shareholders as such 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 such 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, each Selling
Shareholder, severally and not jointly, agrees to sell to the Underwriter, and
the Underwriter agrees to purchase from each Selling Shareholder, at the price
per share set forth in Schedule B, that number of Securities set forth in
Schedule A opposite the name of such Selling Shareholder.
(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, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, 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 Shareholders (such time and date of payment and delivery being
herein called "Closing Time").
Payment shall be made to the Selling Shareholders by wire transfer of
immediately available funds to bank accounts designated by each 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.
SECTION 3. Covenants of the Company. The Company covenants with the
Underwriter as follows:
(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
11
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 ▇▇▇▇▇, 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 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 ▇▇▇▇▇, except to the extent
permitted by Regulation S-T.
12
(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 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
13
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 Company will use its reasonable best efforts
to obtain agreements substantially in the form of Exhibit C hereto signed by the
persons and entities listed on Schedule D hereto.
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 Shareholders 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 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 each Selling
Shareholder, in proportion to the number of shares sold by each such party.
14
(b) Expenses of the Selling Shareholders. The Selling Shareholders will
pay all expenses incident to the performance of their respective 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 owned by each of them to the Underwriter
and (ii) the fees and disbursements of their respective 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 one or
more Selling Shareholders as referred to in Section 10 of this Agreement, or the
failure of one or more Selling Shareholders to comply with its requirements
under Section 5 of this Agreement, then such 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 Shareholders 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 Shareholders contained in Section 1
hereof or in certificates of any officer of the Company or any subsidiary of the
Company or on behalf of any 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 therefor
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 ▇▇▇▇▇▇,
▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel for the Company, and ▇▇▇ ▇▇▇▇▇▇, 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 Shareholders. At Closing Time,
the Underwriter shall have received the favorable opinions, dated as of Closing
Time, of (i) ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ and (ii) ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, in each case, in form
and substance reasonably satisfactory to counsel for the Underwriter, to the
effect set forth in Exhibits B and BB, respectively.
15
(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, ▇▇▇▇▇▇▇ and ▇▇▇▇ 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 Shareholders. At Closing Time, the
Underwriter shall have received a certificate of an Attorney-in-Fact on behalf
of or an executive officer of each Selling Shareholder, dated as of Closing
Time, to the effect that (i) the representations and warranties of each 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) each 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. On the date immediately following the
date hereof, the Underwriter shall have received from PricewaterhouseCoopers,
LLP a letter dated as of the date immediately following 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, except that the specified
date referred to shall be a date not more than three business days prior to
Closing Time.
16
(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. Each 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, each Selling Shareholder, severally and not jointly,
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
17
threatened, or 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
Shareholders; 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 Shareholders 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 such Selling
Shareholder or contained in a representation or warranty given by such Selling
Shareholder in this Agreement or the Power of Attorney; and provided, further,
that the liability under this subsection of each Selling Shareholder shall be
limited to an amount equal to 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 hereunder.
(b) Indemnification of Company, Directors and Officers and Selling
Shareholders. 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 each Selling
Shareholder and each person, if any, who controls any Selling Shareholder
18
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 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
19
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 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
Shareholders 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 Shareholders 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 Shareholders 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 Shareholders
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 Shareholders 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 Shareholders 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 Shareholders 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 Shareholders 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, no Selling Shareholder shall 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 ▇▇▇▇ ▇▇▇) 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 any
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
such Selling Shareholder, as the case may be.
The provisions of this Section shall not affect any agreement among the
Company and the Selling Shareholders 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 Shareholders 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 Shareholders, 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 Shareholders, 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 One or More of the Selling Shareholders. If a
Selling Shareholder shall fail at Closing Time to sell and deliver the number of
Securities which such Selling Shareholder or Selling Shareholders are obligated
to sell hereunder, then the Underwriter may, by notice from the Underwriter to
the Company and the non-defaulting Selling Shareholders, either (i) 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 or elect to purchase the Securities which the non-defaulting
Selling Shareholders have agreed to sell hereunder. No action taken pursuant to
this Section 10 shall relieve any Selling Shareholder so defaulting from
liability, if any, in respect of such default.
In the event of a default by any 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 Credit Suisse First Boston
LLC, Eleven Madison Avenue, New York, N.Y. 10010-3629, Attention: Transactions
Advisory Group; notices to the Company shall be directed to it at ▇▇▇ ▇.
▇▇▇▇▇▇▇▇ ▇▇▇. ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, attention of Chief Financial
Officer; and notices to the Selling Shareholders shall be directed to the
address set forth below such Selling Shareholders' names on Schedule A hereto.
SECTION 12. Parties. This Agreement shall inure to the benefit of and be
binding upon the Underwriter, the Company and the Selling Shareholders 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 Shareholders 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
22
sole and exclusive benefit of the Underwriter, the Company and the Selling
Shareholders and their 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 Attorney-in-Fact for
the Selling Shareholders a counterpart hereof, whereupon this instrument, along
with all counterparts, will become a binding agreement among the Underwriter,
the Company and the Selling Shareholders in accordance with its terms.
Very truly yours,
CSK AUTO CORPORATION
By /s/ ▇▇▇ ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇
Title: Senior Vice President
INVESTCORP CSK HOLDINGS, L.P.
EQUITY CSKA LIMITED
EQUITY CSKB LIMITED
EQUITY CSKC LIMITED
SOUTH BAY LIMITED
INVESTCORP INVESTMENT EQUITY LIMITED
BALLET LIMITED
DENARY LIMITED
GLEAM LIMITED
HIGHLANDS LIMITED
NOBLE LIMITED
OUTRIGGER LIMITED
QUILL LIMITED
RADIAL LIMITED
SHORELINE LIMITED
ZINNIA LIMITED
▇.▇. ▇▇▇▇▇▇ (SUISSE) SA
By /s/ ▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------
▇▇▇▇▇ ▇▇▇▇▇, as Attorney-in-Fact
The foregoing Purchase Agreement is hereby confirmed and accepted as of the date
first above written:
CREDIT SUISSE FIRST BOSTON LLC
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Director
SCHEDULE A
Number of
Securities to be
Sold
----
Investcorp CSK Holdings, L.P. 1,285,674
Equity CSKA Limited 128,479
Equity CSKB Limited 128,479
Equity CSKC Limited 27,457
South Bay Limited 38,237
▇.▇. ▇▇▇▇▇▇ (Suisse) SA 33,792
Investcorp Investment Equity Limited 1,352
Ballet Limited 1,555
Denary Limited 1,555
Gleam Limited 1,555
Highlands Limited 1,555
Noble Limited 1,555
Outrigger Limited 1,555
Quill Limited 1,555
Radial Limited 1,555
Shoreline Limited 1,555
Zinnia Limited 1,555
---------
Total............... 1,659,020
=========
A-1
SCHEDULE B
CSK AUTO CORPORATION
1,659,020 Shares of Common Stock
(Par Value $.01 Per Share)
The purchase price per share for the Securities to be paid by the
Underwriter shall be $15.85 per share.
B-1
SCHEDULE C
List of Subsidiaries
CSK Auto, Inc.
Automotive Information Systems, Inc.
▇▇▇▇▇▇▇.▇▇▇, Inc.
C-1
SCHEDULE D
List of persons and entities subject to lock-up
Equity CSKA Limited
Equity CSKB Limited
Equity CSKC Limited
Auto Equity Limited
Auto Parts Limited
Auto Investments Limited
CSK Investments Limited
CSK Equity Limited
New CSK Equity Limited
Investcorp CSK Holdings L.P.
CSK International Limited
▇.▇. ▇▇▇▇▇▇ (Suisse) SA, as successor to Chase Bank (C.I.) Nominees Limited
South Bay Limited
Investcorp Investment Equity Limited
Ballet Limited
Denary Limited
Highlands Limited
Noble Limited
Outrigger Limited
Quill Limited
Radial Limited
Shoreline Limited
Zinnia Limited
The JAB Trust
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
D-1
SCHEDULE E
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 ▇▇▇▇▇▇▇▇▇▇▇ Capital Investment Fund (relating to $30MM
7% convertible note).
E-1