EXHIBIT 10.41
ADVANCE STORES COMPANY, INCORPORATED
$200,000,000
10-1/4% Senior Subordinated Notes due 2008
Purchase Agreement
------------------
October 24, 2001
X.X. Xxxxxx Securities Inc.
As Representative of the
several Initial Purchasers listed
in Schedule 1 hereto
c/o X.X. Xxxxxx Securities Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Advance Stores Company, Incorporated, a Virginia corporation (the
"Company"), proposes to issue and sell to the several Initial Purchasers listed
in Schedule 1 hereto (the "Initial Purchasers"), for whom you are acting as
representative (the "Representative"), $200,000,000 principal amount of its 10-
1/4% Senior Subordinated Notes due 2008 (the "Securities"). The Securities will
be issued pursuant to an Indenture to be dated as of October 31, 2001 (the
"Indenture"), initially among the Company, Advance Trucking Corporation, a
Virginia corporation, LARALEV, INC., a Delaware corporation and Western Auto
Supply Company, a Delaware corporation (collectively, the "Guarantors") and The
Bank of New York, as trustee (the "Trustee"), and will be guaranteed on an
unsecured senior subordinated basis by each of the Guarantors (the
"Guarantees").
The Securities will be sold to the Initial Purchasers without being
registered under the Securities Act of 1933, as amended (the "Securities Act"),
in reliance upon an exemption therefrom. The Company has prepared a preliminary
offering memorandum dated October 10, 2001 (the "Preliminary Offering
Memorandum") and will prepare an offering memorandum dated the date hereof (the
"Offering Memorandum") setting forth information concerning the Company and the
Securities. Copies of the Preliminary Offering Memorandum have been, and copies
of the Offering Memorandum will be, delivered by the Company to the Initial
Purchasers pursuant to the terms of this
Agreement. The Company hereby confirms that it has authorized the use (in
accordance with applicable laws) of the Preliminary Offering Memorandum and the
Offering Memorandum in connection with the offering and resale of the Securities
by the Initial Purchasers in the manner contemplated by this Agreement.
The Securities are being issued and sold in connection with the Company's
acquisition (the "Acquisition") of Discount Auto Parts, Inc. ("Discount")
pursuant to the Agreement and Plan of Merger dated as of August 7, 2001 (the
"Merger Agreement"), among Advance Holding Corporation ("Holding"), Advance Auto
Parts, Inc., AAP Acquisition Corporation, the Company and Discount. For the
purposes of this Agreement, the transactions contemplated by the Merger
Agreement and the other transactions described in the Offering Memorandum under
the caption "The Transactions" are referred to herein as the "Transactions".
Upon consummation of the Transactions, Discount will become a wholly-owned
subsidiary of the Company. The net proceeds of the offering of the Securities
will be used to fund a portion of the purchase price for the Acquisition. The
Acquisition is expected to be consummated following the Closing Date (as defined
in Section 2). Prior to the consummation of the Acquisition, the net proceeds
of the offering of the Securities, after deducting the Initial Purchasers'
discount, will be held in escrow pending the consummation of the Acquisition.
On or prior to the Closing Date, the Company will execute an Escrow Agreement,
substantially in the form attached hereto as Exhibit A (the "Escrow Agreement"),
and will deposit with The Bank of New York, as escrow agent (the "Escrow
Agent"), the net proceeds of the offering of the Securities, together with an
additional amount in Cash Equivalents or Treasury Securities (as each such term
is defined in the Escrow Agreement) such that the escrowed funds (the "Escrowed
Funds") are in an amount sufficient to redeem the Securities in cash at a
redemption price equal to 101% of the issue price of the Securities plus accrued
and unpaid interest thereon to January 15, 2002, in the event that (a) in the
sole judgment of the Company, the Acquisition will not be consummated on or
prior to December 31, 2001 or (b) the Acquisition is not consummated on or prior
to December 31, 2001. The Escrow Agreement shall provide that the Escrowed
Funds shall only be withdrawn and paid out pursuant to the terms of the Escrow
Agreement.
Upon consummation of the Acquisition, any subsidiary of the Company that is
formed or acquired after the Closing Date which is required to be a Guarantor
under the Indenture will enter into a joinder to this Agreement, the form of
which is attached hereto as Exhibit B (the "Joinder to the Purchase Agreement"),
pursuant to which it will become party to this Agreement.
Holders of the Securities (including the Initial Purchasers and their
direct and indirect transferees) will be entitled to the benefits of an Exchange
and Registration Rights Agreement, substantially in the form attached hereto as
Exhibit C (the "Registration Rights Agreement"), pursuant to which the Company
and the Guarantors will agree to file one or more registration statements with
the Securities and Exchange
2
Commission (the "Commission") providing for the registration under the
Securities Act of the Securities or the Exchange Securities referred to in (and
as defined in) the Registration Rights Agreement. Upon consummation of the
Acquisition, any subsidiary of the Company that is formed or acquired after the
Closing Date which is required to be a Guarantor under the Indenture will enter
into a joinder to the Registration Rights Agreement, the form of which is
attached to the Registration Rights Agreement (the "Joinder to the Registration
Rights Agreement"), pursuant to which it will become party to the Registration
Rights Agreement.
The Company hereby confirms its agreement with the several Initial
Purchasers concerning the purchase and resale of the Securities, as follows:
1. Purchase and Resale of the Securities. (a) The Company, on the basis of
-------------------------------------
the representations, warranties and agreements set forth herein, agrees to issue
and sell the Securities to the several Initial Purchasers as provided in this
Agreement, and each Initial Purchaser, on the basis of the representations,
warranties and agreements set forth herein and subject to the conditions set
forth herein, agrees to purchase from the Company, severally and not jointly,
the principal amount of Securities set forth opposite such Initial Purchaser's
name in Schedule 1 hereto at a price equal to 90.018% of the principal amount
------
thereof plus accrued interest, if any, from October 15, 2001 to the date of
payment and delivery. The Company will not be obligated to deliver any of the
Securities except upon payment for all the Securities to be purchased as
provided herein.
(b) The Company understands that the Initial Purchasers intend to offer
the Securities for resale on the terms set forth in the Offering Memorandum.
Each Initial Purchaser, severally and not jointly, represents, warrants and
agrees that:
(i) neither it nor any of its affiliates is acquiring the Securities
with any intention of offering or selling any of the Securities in a
transaction that would violate the Securities Act;
(ii) neither it nor any of its affiliates has solicited offers for, or
offered or sold, and neither it nor any of its affiliates will solicit
offers for, or offer or sell, the Securities by means of any form of
general solicitation or general advertising within the meaning of Rule
502(c) of Regulation D under the Securities Act ("Regulation D") or in any
manner involving a public offering within the meaning of Section 4(2) of
the Securities Act; and
3
(iii) neither it nor any of its affiliates has solicited offers for,
or offered or sold, and neither it nor any of its affiliates will solicit
offers for, or offer or sell, the Securities as part of their initial
offering except:
(A) within the United States to persons whom it reasonably
believes to be qualified institutional buyers, as defined in Rule 144A
under the Securities Act ("Rule 144A"), in transactions pursuant to
Rule 144A, and in connection with each such sale, it has taken or will
take reasonable steps to ensure that the purchaser of the Securities
is aware that such sale is being made in reliance on Rule 144A, except
in the case of the sale to Mozart One, L.L.C. ("Mozart One"), wholly-
owned by the Xxxxxx Xxxxxxx Trust Dated July 13, 1964 and an affiliate
of the Company, of $3,000,000 principal amount of Securities and the
sale to Mozart Investments Inc. ("Mozart Investments"), wholly-owned
by Xxxxxxxx X. Xxxxxxx and an affiliate of the Company, of $3,000,000
principal amount of Securities (which will be sold pursuant to another
exemption from registration under the Securities Act); or
(B) in accordance with the restrictions set forth in Annex A
hereto.
(c) Each Initial Purchaser acknowledges and agrees that the Company and,
for purposes of the opinions to be delivered to the Initial Purchasers pursuant
to Sections 5(f) and 5(g), counsel for the Company and for the Initial
Purchasers, respectively, may rely upon the accuracy of the representations and
warranties of the Initial Purchasers and their compliance with their agreements
contained in paragraph (b) above (including Annex A hereto), and each Initial
Purchaser hereby consents to such reliance.
(d) The Company acknowledges and agrees that the Initial Purchasers may
offer and sell Securities to or through any affiliate of an Initial Purchaser
and that any such affiliate may offer and sell Securities purchased by it to or
through any Initial Purchaser.
2. Payment and Delivery. (a) Payment for and delivery of the Securities
--------------------
will be made at the offices of Cravath, Swaine & Xxxxx at 10:00 A.M., New York
City time, on October 31, 2001, or at such other time on the same or such other
date, not later than the fifth Business Day thereafter, as the Representative
and the Company may agree upon in writing. The time and date of such payment and
delivery is referred to herein as the "Closing Date". As used herein, the term
"Business Day" means any day other than a day on which banks are permitted or
required to be closed in New York city.
4
(b) Payment for the Securities shall be made by wire transfer in
immediately available funds to the account specified by the Company to the
Representative against delivery to the nominee of The Depository Trust Company,
for the account of the Initial Purchasers, of one or more global notes
representing the Securities (collectively, the "Global Note"), with any transfer
taxes payable in connection with the sale of the Securities duly paid by the
Company. The Global Note will be made available for inspection by the
Representative not later than 1:00 P.M., New York City time, on the Business Day
prior to the Closing Date.
3. Representations and Warranties of the Company and the Guarantors. The
----------------------------------------------------------------
Company and the Guarantors jointly and severally represent and warrant to each
Initial Purchaser that:
(a) Offering Memorandum. The Preliminary Offering Memorandum, as of its
date, did not, and the Offering Memorandum, in the form first used by the
Initial Purchasers to confirm sales of the Securities and on the Closing Date,
will not, contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading; provided that the
--------
Company and the Guarantors make no representation or warranty with respect to
(i) pricing terms and other financial terms intentionally left blank in the
Preliminary Offering Memorandum or (ii) any statements or omissions made in
reliance upon and in conformity with information relating to any Initial
Purchaser furnished to the Company in writing by such Initial Purchaser through
the Representative expressly for use in the Preliminary Offering Memorandum and
the Offering Memorandum.
(b) Financial Statements. The financial statements and the related notes
thereto included in the Preliminary Offering Memorandum and the Offering
Memorandum present fairly, in all material respects, the respective consolidated
financial positions of (i) the Company and its subsidiaries and (ii) Discount
and its subsidiaries, as applicable, as of the dates indicated and the results
of their operations and the changes in their cash flows for the periods
specified, except that such financial statements that are unaudited were or are
subject to normal and recurring year-end adjustments; such financial statements
have been prepared in conformity with generally accepted accounting principles
applied on a consistent basis, except with respect to such financial statements
of Discount, as discussed in Ernst & Young LLP's accompanying report of
independent certified public accountants dated June 29, 2001 and with respect to
such financial statements that are unaudited, except as may be indicated in note
1 to the condensed consolidated financial statements of the Company and note 1
to the condensed consolidated financial statements of Discount in the
Preliminary Offering Memorandum and the Offering Memorandum; and the pro forma
--- -----
financial information and the related notes thereto included in the Preliminary
Offering Memorandum and the Offering Memorandum are based upon good faith
estimates and assumptions believed by the Company (as of the date of the
Preliminary Offering
5
Memorandum and the Offering Memorandum, as applicable) to have been reasonable;
and the assumptions underlying such pro forma financial information are set
--- -----
forth in the Preliminary Offering Memorandum and the Offering Memorandum.
(c) No Material Adverse Change. Since the date of the most recent financial
statements of the Company and of Discount, as applicable, included in the
Preliminary Offering Memorandum and the Offering Memorandum, exclusive of any
amendments or supplements thereto subsequent to the date of this Agreement, (i)
there has not been any change in the capital stock or long-term debt of the
Company or any of its subsidiaries, or any dividend or distribution of any kind
declared, paid or made by the Company or any of its subsidiaries on any class of
capital stock, or any material adverse change, or any development involving a
prospective material adverse change, in or affecting the general affairs,
business, properties, management, financial position, stockholders' equity,
results of operations or prospects of the Company and its subsidiaries or of
Discount and its subsidiaries that is material for the Company and its
subsidiaries taken as a whole, after giving effect to the Transactions; (ii)
neither the Company nor any of its subsidiaries, nor Discount nor any of its
subsidiaries, has entered into any transaction or agreement that is material to
the Company and its subsidiaries taken as a whole (whether or not in the
ordinary course of business) or incurred any liability or obligation, direct or
contingent, that is material to the Company and its subsidiaries taken as a
whole (other than in the ordinary course of business), in each case after giving
effect to the Transactions, except as disclosed in the Preliminary Offering
Memorandum and the Offering Memorandum; and (iii) neither the Company nor any of
its subsidiaries, nor Discount nor any of its subsidiaries, has sustained any
loss or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or any
action, order or decree of any court or arbitrator or governmental or regulatory
authority, except in each case that would not, individually or in the aggregate,
have a Material Adverse Effect (as defined below), or as otherwise specifically
disclosed in the Preliminary Offering Memorandum and the Offering Memorandum or
any subsequent amendment or supplement thereto.
(d) Incorporation and Good Standing. The Company and each of its
subsidiaries and Discount and each of its subsidiaries have been duly
incorporated and are validly existing as corporations in good standing under the
laws of their respective jurisdictions of incorporation, are duly qualified to
do business and are in good standing as foreign corporations in each
jurisdiction in which their respective ownership or lease of property or the
conduct of their respective businesses requires such qualification, and have all
corporate power and authority necessary to own or hold their respective
properties and to conduct the businesses in which they are engaged, except where
the failure to be so qualified or have such power or authority would not,
individually or in the aggregate, have a material adverse effect on the general
affairs, business, properties, management, financial position, stockholders'
equity, results of operations or prospects of the Company and its subsidiaries
taken as a whole, after giving effect to the
6
Transactions, or on the performance by the Company of its obligations under the
Securities (a "Material Adverse Effect").
(e) Capitalization. The Company has an authorized capitalization as set
forth in the Preliminary Offering Memorandum and the Offering Memorandum under
the heading "Capitalization"; and all the outstanding shares of capital stock of
each subsidiary of the Company have been duly and validly authorized and issued,
are fully paid and nonassessable and are owned directly or indirectly by the
Company, free and clear of any lien, charge, encumbrance, security interest,
restriction on voting or transfer or any other claim of any third party, other
than as discussed in the Offering Memorandum (including the pledge of such
shares under (i) the Company's Credit Agreement dated as of April 15, 1998, as
amended and restated as of October 19, 1998, as amended, supplemented or
otherwise modified from time to time, among Holding, the Company, the lenders
party thereto and The Chase Manhattan Bank, as administrative agent (the
"Existing Credit Agreement") and (ii) the Company's Credit Agreement to be
entered into among Holding, the Company, the lenders party thereto, The Chase
Manhattan Bank, as administrative agent, Credit Suisse First Boston and Xxxxxx
Commercial Paper Inc., as co-syndication agents, concurrently with the
Acquisition (the "Senior Credit Agreement")).
(f) Due Authorization. The Company and each of the Guarantors have full
right, power and authority to execute and deliver this Agreement, the Joinder to
the Purchase Agreement, the Securities, the Indenture (including each Guarantee
set forth therein), the Exchange Securities, the Registration Rights Agreement,
the Joinder to the Registration Rights Agreement and the Escrow Agreement
(collectively, the "Transaction Documents") and to perform their respective
obligations hereunder and thereunder; and all action (corporate and other)
required to be taken for the due and proper authorization, execution and
delivery of each of the Transaction Documents and the consummation of the
transactions contemplated thereby have been duly and validly taken.
(g) The Indenture. The Indenture has been duly authorized by the Company
and each of the Guarantors and, when duly executed and delivered in accordance
with its terms by each of the parties thereto, will constitute a valid and
legally binding agreement of the Company and each of the Guarantors enforceable
against the Company and each of the Guarantors in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency or
similar laws affecting the enforcement of creditors' rights generally or by
equitable principles relating to enforceability (collectively, the
"Enforceability Exceptions"); and on the Closing Date, the Indenture will
conform in all material respects to the requirements of the Trust Indenture Act
of 1939, as amended (the "Trust Indenture Act"), and the rules and regulations
of the Commission applicable to an indenture that is qualified thereunder. A
supplemental indenture to the Indenture will be duly authorized by each
Guarantor party thereto and, when duly executed and delivered in accordance with
its terms by each of
7
the parties thereto, will constitute a valid and legally binding agreement of
each of the Guarantors party thereto enforceable against each of the Guarantors
party thereto in accordance with its terms, subject to the Enforceability
Exceptions.
(h) The Securities and the Guarantees. The Securities have been duly
authorized by the Company and, when duly executed, authenticated, issued and
delivered as provided in the Indenture and paid for as provided herein, will be
duly and validly issued and outstanding and will constitute valid and legally
binding obligations of the Company enforceable against the Company in accordance
with their terms, subject to the Enforceability Exceptions, and will be entitled
to the benefits of the Indenture; and the Guarantees have been duly authorized
by each of the Guarantors and, when the Securities have been duly executed,
authenticated, issued and delivered as provided in the Indenture and paid for as
provided herein, will be valid and legally binding obligations of each of the
Guarantors, enforceable against each of the Guarantors in accordance with their
terms, subject to the Enforceability Exceptions, and will be entitled to the
benefits of the Indenture.
(i) The Exchange Securities. On the Closing Date, the Exchange Securities
(including the related guarantees) will have been duly authorized by the Company
and each of the Guarantors and, when duly executed, authenticated, issued and
delivered as contemplated by the Registration Rights Agreement, will be duly and
validly issued and outstanding and will constitute valid and legally binding
obligations of the Company, as issuer, and each of the Guarantors, as guarantor,
enforceable against the Company and each of the Guarantors in accordance with
their terms, subject to the Enforceability Exceptions, and will be entitled to
the benefits of the Indenture.
(j) Purchase Agreement. This Agreement has been duly authorized, executed
and delivered by the Company and each of the Guarantors party hereto and
constitutes a valid and legally binding agreement of the Company and each of the
Guarantors enforceable against the Company and each of the Guarantors in
accordance with its terms, subject to the Enforceability Exceptions, and except
that rights to indemnity and contribution may be limited by applicable law and
public policy.
(k) Registration Rights Agreement. The Registration Rights Agreement has
been duly authorized by the Company and each of the Guarantors and, when duly
executed and delivered in accordance with its terms by each of the parties
thereto, will constitute a valid and legally binding agreement of the Company
and each of the Guarantors enforceable against the Company and each of the
Guarantors in accordance with its terms, subject to the Enforceability
Exceptions, and except that rights to indemnity and contribution may be limited
by applicable law and public policy.
(l) The Joinder to the Purchase Agreement. The Joinder to the Purchase
Agreement, when duly executed and delivered in accordance with its terms by each
of the parties thereto, will constitute a valid and legally binding agreement of
each of the
8
Guarantors party thereto enforceable against each of the Guarantors party
thereto in accordance with its terms, subject to the Enforceability Exceptions.
(m) The Joinder to the Registration Rights Agreement. The Joinder to the
Registration Rights Agreement, when duly executed and delivered in accordance
with its terms by each of the parties thereto, will constitute a valid and
legally binding agreement of each of the Guarantors party thereto enforceable
against each of the Guarantors party thereto in accordance with its terms,
subject to the Enforceability Exceptions.
(n) The Escrow Agreement. The Escrow Agreement has been duly authorized by
the Company and, when duly executed and delivered in accordance with its terms
by each of the parties thereto, will constitute a valid and legally binding
agreement of the Company enforceable against the Company in accordance with its
terms, subject to the Enforceability Exceptions.
(o) Descriptions of Transaction Documents. Each Transaction Document
conforms in all material respects to the description thereof contained in the
Preliminary Offering Memorandum and the Offering Memorandum.
(p) No Violation or Default. Neither the Company nor any of its
subsidiaries, nor Discount nor any of its subsidiaries, is (i) in violation of
its charter or by-laws; (ii) in default in any material respect, and no event
has occurred that, with notice or lapse of time or both, would constitute such a
default, in the due performance or observance of any term, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company or any of its subsidiaries or
Discount or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries or Discount or any of its subsidiaries is bound or to which any
of the property or assets of the Company or any of its subsidiaries or Discount
or any of its subsidiaries is subject; or (iii) in violation in any material
respect of any law or statute or any judgment, order or regulation of any court
or arbitrator or governmental or regulatory authority to which it or its
property or assets may be subject, except, in the case of clauses (ii) and (iii)
above, for any such default or violation that would not, individually or in the
aggregate, have a Material Adverse Effect.
(q) No Conflicts With Existing Instruments; No Consents Required. The
execution, delivery and performance by the Company and each of the Guarantors of
each of the Transaction Documents to which each is a party, the issuance and
sale of the Securities and compliance by the Company and each of the Guarantors
with the terms thereof and the consummation of the transactions contemplated by
the Transaction Documents will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default under,
or result in the creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Company or any of its subsidiaries pursuant to,
any indenture, mortgage, deed of trust,
9
loan agreement or other agreement or instrument to which the Company or any of
its subsidiaries is a party or by which the Company or any of its subsidiaries
is bound or to which any of the property or assets of the Company or any of its
subsidiaries is subject, nor will any such action result in any violation of the
provisions of the charter or by-laws of the Company or any of its subsidiaries
or any law or statute or any judgment, order or regulation of any court or
arbitrator or governmental or regulatory authority having jurisdiction over the
Company or any of its subsidiaries or any of their respective properties or
assets, except for any of the foregoing that would not, individually or in the
aggregate, result in a Material Adverse Effect; and no consent, approval,
authorization, order, registration or qualification of or with any such court or
arbitrator or governmental or regulatory authority is required for the
execution, delivery and performance by the Company and each of the Guarantors of
each of the Transaction Documents to which each is a party, the issuance and
sale of the Securities and compliance by the Company and each of the Guarantors
with the terms thereof and the consummation of the transactions contemplated by
the Transaction Documents, except for such consents, approvals, authorizations,
orders and registrations or qualifications as may be required (i) under
applicable state securities laws in connection with the purchase and resale of
the Securities by the Initial Purchasers and (ii) with respect to the Exchange
Securities under the Securities Act, the Trust Indenture Act and applicable
state securities laws as contemplated by the Registration Rights Agreement.
(r) Legal Proceedings. Except as specifically described in the Preliminary
Offering Memorandum and the Offering Memorandum, there are no legal,
governmental or regulatory investigations, actions, suits or proceedings pending
to which the Company or any of its subsidiaries or Discount or any of its
subsidiaries is or may be a party or to which any property of the Company or any
of its subsidiaries or Discount or any of its subsidiaries is or may be the
subject that, individually or in the aggregate, if determined adversely to the
Company or any of its subsidiaries or Discount or any of its subsidiaries, could
reasonably be expected to have a Material Adverse Effect; and to the knowledge
of the Company and each of the Guarantors, no such investigations, actions,
suits or proceedings are threatened or contemplated by any governmental or
regulatory authority or threatened by others.
(s) Independent Accountants. Xxxxxx Xxxxxxxx LLP, who have certified
certain financial statements of the Company and its subsidiaries, and Ernst &
Young LLP, who have certified certain financial statements of Discount and its
subsidiaries, are independent public accountants with respect to the Company and
its subsidiaries and Discount and its subsidiaries, respectively, within the
meaning of Rule 101 of the Code of Professional Conduct of the American
Institute of Certified Public Accountants and its interpretations and rulings
thereunder.
(t) Title to Real and Personal Property. The Company and its subsidiaries
and Discount and its subsidiaries have good and marketable title in fee simple
to, or have valid rights to lease or otherwise use, all items of real and
personal property that
10
are material to the respective businesses of the Company and its subsidiaries
and Discount and its subsidiaries, in each case free and clear of all liens,
encumbrances, claims and defects and imperfections of title except those that
(i) do not materially interfere with the use made and proposed to be made of
such property by the Company and its subsidiaries or Discount and its
subsidiaries, (ii) have been or will be granted pursuant to the Existing Credit
Agreement or the Senior Credit Agreement or (iii) could not reasonably be
expected, individually or in the aggregate, to have a Ma terial Adverse Effect.
(u) Title to Intellectual Property. The Company and its subsidiaries own or
possess adequate rights to use all material patents, patent applications,
trademarks, service marks, trade names, trademark registrations, service xxxx
registrations, copyrights, licenses and know-how (including trade secrets and
other unpatented and/or unpatentable proprietary or confidential information,
systems or procedures) currently employed by them in connection with their
respective businesses; and the Company and its subsidiaries have not received
any notice of any claim of conflict with, any such rights of others, which,
individually or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would have a Material Adverse Effect.
(v) Investment Company Act. Neither the Company nor any of its subsidiaries
is, and after giving effect to the offering and sale of the Securities and the
application of the proceeds thereof as described in the Preliminary Offering
Memorandum and the Offering Memorandum none of them will be, an "investment
company" or an entity "controlled" by an "investment company" within the meaning
of the Investment Company Act of 1940, as amended, and the rules and regulations
of the Commission thereunder (collectively, "Investment Company Act").
(w) Taxes. The Company and its subsidiaries have paid all material federal,
state, local and foreign taxes and filed all material tax returns required to be
paid or filed through the date hereof other than those filings being contested
in good faith; and except as otherwise specifically disclosed in the Preliminary
Offering Memorandum and the Offering Memorandum, there is no material tax
deficiency that has been, or could reasonably be expected to be, asserted
against the Company or any of its subsidiaries.
(x) Licenses and Permits. The Company and its subsidiaries and Discount and
its subsidiaries possess all licenses, certificates, permits and other
authorizations issued by, and have made all declarations and filings with, the
appropriate federal, state, local or foreign governmental or regulatory
authorities that are necessary for the ownership or lease of their respective
properties or the conduct of their respective businesses as described in the
Preliminary Offering Memorandum and the Offering Memorandum, except where the
failure to possess or make the same would not, individually or in the aggregate,
have a Material Adverse Effect; and except as specifically described in the
Preliminary Offering Memorandum and the Offering Memorandum, neither the Company
nor any of its subsidiaries nor Discount nor any of
11
its subsidiaries has received notice of any revocation or modification of any
such license, certificate, permit or authorization or has any reason to believe
that any such license, certificate, permit or authorization will not be renewed
in the ordinary course, except for any such revocation, modification or non-
renewal that would not, individually or in the aggregate, have a Material
Adverse Effect.
(y) Material Agreements. Schedule 2 to this Agreement lists (i) all
material agreements (within the meaning of Item 601(b)(10) of Regulation S-K
under the Exchange Act), after giving effect to the Transactions to which the
Company or any of its subsidiaries or Discount and its subsidiaries is a party
or by which the Company or any of its subsidiaries or Discount and its
subsidiaries is bound or to which any of the properties or assets of the Company
or any of its subsidiaries or Discount and its subsidiaries is subject and (ii)
all agreements and instruments required to be filed under Items 601(b)(2) and
(4) of Regulation S-K.
(z) No Labor Disputes. No labor disturbance by or material dispute with
employees of the Company or any of its subsidiaries exists or, to the knowledge
of the Company and each of the Guarantors, is contemplated or threatened.
(aa) Compliance With Environmental Laws. The Company and its subsidiaries
and Discount and its subsidiaries (i) are in compliance with any and all
applicable federal, state, local and foreign laws and regulations relating to
the protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants (collectively, "Environmental
Laws"), and none of them has received notice of any outstanding violations of
any Environmental Laws; (ii) have received all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct their
respective businesses; and (iii) are in compliance with all terms and conditions
of any such permit, license or approval, except in clauses (i), (ii) or (iii)
for any such failure to comply, or to receive required permits, licenses or
approvals as would not, individually or in the aggregate, have a Material
Adverse Effect.
(bb) Compliance With ERISA. Each employee benefit plan, within the meaning
of Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), that is maintained, administered or contributed to by the
Company or any of its affiliates for employees or former employees of the
Company and its affiliates has been maintained in compliance with its terms and
the requirements of any applicable statutes, orders, rules and regulations,
including but not limited to ERISA and the Internal Revenue Code of 1986, as
amended (the "Code"), except for any such failure to comply as would not,
individually or in the aggregate, have a Material Adverse Effect. No prohibited
transaction, within the meaning of Section 406 of ERISA or Section 4975 of the
Code, has occurred with respect to any such plan excluding transactions effected
pursuant to a statutory or administrative exemption. For each such plan that is
subject to the funding rules of Section 412 of the Code or Section 302 of ERISA,
no
12
"accumulated funding deficiency" as defined in Section 412 of the Code has been
incurred, whether or not waived, and the fair market value of the assets of each
such plan (excluding for these purposes accrued but unpaid contributions)
exceeds the present value of all benefits accrued under such plan determined
using reasonable actuarial assumptions.
(cc) Accounting Controls. The Company and its subsidiaries maintain systems
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 to
assets 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.
(dd) Insurance. The Company and its subsidiaries have insurance covering
their respective properties, operations, personnel and businesses, which
insurance is in amounts and insures against such losses and risks as are
adequate in the reasonable judgment of the Company to protect the Company and
its subsidiaries and their respective businesses; and neither the Company nor
any of its subsidiaries has (i) received notice from any insurer or agent of
such insurer that capital improvements or other expenditures are required or
necessary to be made in order to continue such insurance or (ii) any reason to
believe that it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage at reasonable cost from
similar insurers as may be necessary to continue its business.
(ee) No Unlawful Payments. Neither the Company nor any of its subsidiaries
nor, to the best knowledge of the Company and each of the Guarantors, any
director, officer, agent, employee or other person associated with or acting on
behalf of the Company or any of its subsidiaries has (i) used any corporate
funds for any unlawful contribution, gift, entertainment or other unlawful
expense relating to political activity; (ii) made any direct or indirect
unlawful payment to any foreign or domestic government official or employee from
corporate funds; (iii) violated or is in violation of any provision of the
Foreign Corrupt Practices Act of 1977; or (iv) made any bribe, unlawful rebate,
payoff, influence payment, kickback or other unlawful payment.
(ff) Margin Rules. Neither the issuance, sale and delivery of the
Securities nor the application of the proceeds thereof by the Company as
described in the Preliminary Offering Memorandum and the Offering Memorandum
will violate Regulation T, U or X of the Board of Governors of the Federal
Reserve System or any other regulation of such Board of Governors.
13
(gg) Solvency. On and immediately after the Closing Date and immediately
after the consummation of the Acquisition, the Company (after giving effect to
the issuance of the Securities and the other Transactions) will be Solvent. As
used in this paragraph, the term "Company" means, with respect to a particular
date, the Company and its subsidiaries as of such date, taken as a whole and the
term "Solvent" means, with respect to a particular date, that on such date (i)
the present fair market value (or present fair saleable value) of the assets of
the Company is not less than the total amount required to pay the liabilities of
the Company on its total existing debts and liabilities (including contingent
liabilities) as they become absolute and matured; (ii) the Company is able to
realize upon its assets and pay its debts and other liabilities, contingent
obligations and commitments as they mature and become due in the normal course
of business; (iii) assuming consummation of the issuance of the Securities as
contemplated by this Agreement and the Offering Memorandum, the Company is not
incurring debts or liabilities beyond its ability to pay as such debts and
liabilities mature; and (iv) the Company is not engaged in any business or
transaction, and does not propose to engage in any business or transaction, for
which its property would constitute unreasonably small capital after giving due
consideration to the prevailing practice in the industry in which the Company is
engaged; and (v) the Company is not a defendant in any civil action that would
result in a judgment that the Company is or would become unable to satisfy.
(hh) No Broker's Fees. Neither the Company nor any of its subsidiaries is a
party to any contract, agreement or understanding with any person (other than
this Agreement) that would give rise to a valid claim against the Company or any
of its subsidiaries or any Initial Purchaser for a brokerage commission,
finder's fee or like payment in connection with the offering and sale of the
Securities.
(ii) Rule 144A Eligibility. The Securities satisfy the eligibility
requirements of Rule 144A(d)(3) under the Securities Act, and each of the
Preliminary Offering Memorandum and the Offering Memorandum, as of its
respective date, contains or will contain all the information that, if requested
by a prospective purchaser of the Securities, would be required to be provided
to such prospective purchaser pursuant to Rule 144A(d)(4) under the Securities
Act.
(jj) No Integration. Neither the Company nor any of its affiliates (as
defined in Rule 501 (b) of Regulation D) has, directly or through any agent,
sold, offered for sale, solicited offers to buy or otherwise negotiated in
respect of, any security (as defined in the Securities Act), that is or will be
integrated with the sale of the Securities in a manner that would require
registration of the Securities under the Securities Act.
(kk) No General Solicitation or Directed Selling Efforts. None of the
Company or any of its affiliates or any other person acting on its or their
behalf (other than the Initial Purchasers and their affiliates, as to whom the
Company makes no representation) has (i) solicited offers for, or offered or
sold, the Securities by means of
14
any form of general solicitation or general advertising within the meaning of
Rule 502(c) of Regulation D or in any manner involving a public offering within
the meaning of Section 4(2) of the Securities Act or (ii) engaged in any
directed selling efforts within the meaning of Regulation S under the Securities
Act ("Regulation S"), and all such persons have complied with the offering
restrictions requirement of Regulation S.
(ll) Securities Law Exemptions. Assuming the accuracy of the
representations and warranties of the Initial Purchasers contained in Section
1(b) (including Annex A hereto) and their compliance with their agreements set
forth therein, it is not necessary, in connection with the issuance and sale of
the Securities to the Initial Purchasers and the offer, resale and delivery of
the Securities by the Initial Purchasers in the manner contemplated by this
Agreement and the Offering Memorandum, to register the Securities under the
Securities Act or to qualify the Indenture under the Trust Indenture Act.
(mm) No Stabilization. Neither the Company nor any of the Guarantors has
taken, directly or indirectly, any action designed to or that could reasonably
be expected to cause or result in any stabilization or manipulation of the price
of the Securities.
(nn) Forward-Looking Statements. Each forward-looking statement (within the
meaning of Section 27A of the Securities Act and Section 21 E of the Exchange
Act) contained in the Preliminary Offering Memorandum and the Offering
Memorandum has been made or reaffirmed upon good faith estimates and assumptions
believed by the Company (as of the date of the Preliminary Offering Memorandum
and the Offering Memorandum, as applicable) to have been reasonable.
(oo) Each of Mozart Investments and Mozart One is an "accredited investor"
within the meaning of Rule 501 (a)(1), (2), (3) or (7) under the Securities Act.
4. Further Agreements of the Company and the Guarantors. The Company and
----------------------------------------------------
each of the Guarantors jointly and severally covenant and agree with each
Initial Purchaser that:
(a) Delivery of Copies. The Company will deliver to the Initial Purchasers
as many copies of the Preliminary Offering Memorandum and the Offering
Memorandum (including all amendments and supplements thereto) as the
Representative may reasonably request.
(b) Amendments or Supplements. Before distributing any amendment or
supplement to the Preliminary Offering Memorandum or the Offering Memorandum,
the Company will furnish to the Representative a copy of the proposed amendment
or supplement for review and will not distribute any such proposed amendment or
supplement to which the Representative reasonably objects promptly after being
advised.
15
(c) Notice to the Representative. The Company will advise the
Representative promptly, and confirm such advice in writing, (i) of the issuance
by any governmental or regulatory authority of any order preventing or
suspending the use of the Preliminary Offering Memorandum or the Offering
Memorandum or the initiation or threatening of any proceeding for that purpose;
(ii) of the occurrence of any event at any time prior to the completion of the
initial offering of the Securities as a result of which the Offering Memorandum
as then amended or supplemented would include any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances existing when the Offering Memorandum
is delivered to a purchaser, not misleading; and (iii) of the receipt by the
Company of any notice with respect to any suspension of the qualification of the
Securities for offer and sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; and the Company will use its
reasonable best efforts to prevent the issuance of any such order preventing or
suspending the use of the Preliminary Offering Memorandum or the Offering
Memorandum or suspending any such qualification of the Securities and, if
issued, will obtain as soon as reasonably possible the withdrawal thereof.
(d) Ongoing Compliance of the Offering Memorandum. If at any time prior to
the completion of the initial offering of the Securities (i) any event shall
occur or condition shall exist as a result of which it is necessary to amend or
supplement the Offering Memorandum in order to make the statements therein, in
the light of the circumstances when the Offering Memorandum is delivered to a
purchaser, not misleading or (ii) it is necessary to amend or supplement the
Offering Memorandum to comply with law, the Company will immediately notify the
Initial Purchasers thereof and promptly prepare and, subject to paragraph (b)
above, furnish to the Initial Purchasers such amendments or supplements to the
Offering Memorandum as may be necessary so that the statements in the Offering
Memorandum as so amended or supplemented will not, in the light of the
circumstances existing when the Offering Memorandum is delivered to a purchaser,
be misleading or so that the Offering Memorandum will comply with law.
(e) Blue Sky Compliance. The Company will cooperate with the Initial
Purchasers to qualify the Securities for offer and sale under the securities or
Blue Sky laws of such jurisdictions as the Representative shall reasonably
request and will continue such qualifications in effect so long as may be
reasonably required for the offering and resale of the Securities; provided that
neither the Company nor any of the Guarantors shall be required to (i) qualify
as a foreign corporation or other entity or as a dealer in securities in any
such jurisdiction where it would not otherwise be required to so qualify or (ii)
file any general consent to service of process in any such jurisdiction if it is
not so subject.
(f) Clear Market. During the period from the date hereof through and
including the date that is 45 days after the Closing Date, the Company and each
of the
16
Guarantors will not, without the prior written consent of the Representative,
offer, sell or contract to sell any debt securities (other than the Securities)
issued or guaranteed by the Company or any of the Guarantors and having a tenor
of more than one year.
(g) Use of Proceeds. The Company will apply the net proceeds from the sale
of the Securities as described in the Preliminary Offering Memorandum and the
Offering Memorandum.
(h) Supplying Information. For so long as the Securities remain outstanding
and are "restricted securities" within the meaning of Rule 144(a)(3) under the
Securities Act, the Company and each of the Guarantors will furnish to holders
of the Securities and prospective purchasers of the Securities designated by
such holders, upon the request of such holders or such prospective purchasers,
the information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act, unless the Company is then subject to and in compliance with
Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
(i) PORTAL and DTC. The Company will assist the Initial Purchasers in
arranging for the Securities to be designated Private Offerings, Resales and
Trading through Automated Linkages ("PORTAL") Market securities in accordance
with the rules and regulations adopted by the National Association of Securities
Dealers, Inc. ("NASD") relating to trading in the PORTAL Market and for the
Securities to be eligible for clearance and settlement through The Depository
Trust Company ("DTC").
(j) No Resales by the Company. Until the issuance of the Exchange
Securities, the Company will not, and will not permit any of its affiliates (as
defined in Rule 144 under the Securities Act) to, resell any of the Securities
that have been acquired by any of them, except for Securities purchased by the
Company or any of its affiliates and resold in a transaction registered under
the Securities Act.
(k) No Integration. Neither the Company nor any of its affiliates will,
directly or through any agent, sell, offer for sale, solicit offers to buy or
otherwise negotiate in respect of, any security (as defined in the Securities
Act), that is or will be integrated with the sale of the Securities in a manner
that would require registration of the Securities under the Securities Act.
(I) No General Solicitation or Directed Selling Efforts. None of the
Company or any of its affiliates or any other person acting on its or their
behalf will (i) solicit offers for, or offer or sell, the Securities by means of
any form of general solicitation or general advertising within the meaning of
Rule 502(c) of Regulation D or in any manner involving a public offering within
the meaning of Section 4(2) of the Securities Act or (ii) engage in any directed
selling efforts within the meaning of Regulation S, and all such persons will
comply with the offering restrictions requirement of Regulation S.
17
(m) No Stabilization. Neither the Company nor any of the Guarantors will
take, directly or indirectly, any action designed to or that could reasonably be
expected to cause or result in any stabilization or manipulation of the price of
the Securities.
(n) Joinder of Guarantors. Upon consummation of the Acquisition, any
subsidiary of the Company that is formed or acquired after the Closing Date
which is required to be a Guarantor under the Indenture shall become a party to
(i) this Agreement by executing and delivering a Joinder to the Purchase
Agreement, (ii) the Registration Rights Agreement by executing and delivering a
Joinder to the Registration Rights Agreement and (iii) the Indenture by
executing and delivering a supplemental indenture, the form of which is attached
to the Indenture (the "Supplemental Indenture").
(o) Guarantors' Opinion. Upon the consummation of the Acquisition, the
Company shall cause its counsel, Xxxxxxx & XxXxxxxx, a professional law
corporation, or other counsel reasonably acceptable to the Representative, to
furnish to the Initial Purchasers its written opinion substantially to the
effect set forth in Annex C hereto.
(p) Guarantors' Certificates. Upon the consummation of the Acquisition,
the Company shall cause each of its subsidiaries that is formed or acquired
after the Closing Date which is required to be a Guarantor under the Indenture
to deliver to the Initial Purchasers a secretary's certificate reasonably
satisfactory to the Initial Purchasers which shall include the following
documents with respect to such subsidiary: (i) certificates of incorporation or
due formation, (ii) by-laws, (iii) resolutions and (iv) certificates of valid
existence and good standing and/or due qualifications to do business as a
foreign corporation in such jurisdictions as the Initial Purchasers may
reasonably request.
(q) Solvency Letter. Upon consummation of the Acquisition, the
Representative shall have received a solvency letter, in form and substance
reasonably satisfactory to the Representative, from Valuation Research
Corporation, with respect to the solvency of the Company and its consolidated
subsidiaries after giving effect to the Transactions.
5. Conditions of Initial Purchasers' Obligations. The obligation of each
----------------------------------------------
Initial Purchaser to purchase Securities on the Closing Date as provided herein
is subject to the performance by the Company and each of the Guarantors of their
respective obligations hereunder and to the following additional conditions:
(a) Representations and Warranties. The representations and warranties of
the Company and the Guarantors contained herein shall be true and correct on the
date hereof and on and as of the Closing Date; the statements of the Company,
the Guarantors and their respective officers made in any certificates delivered
pursuant to
18
this Agreement shall be true and correct on and as of the Closing Date; and the
Company and the Guarantors shall have complied with all agreements and all
conditions to be performed or satisfied on their part hereunder at or prior to
the Closing Date.
(b) No Downgrading. Subsequent to the execution and delivery of this
Agreement, (i) no downgrading shall have occurred in the rating accorded the
Securities or any other debt securities or preferred stock issued or guaranteed
by the Company or any of the Guarantors by any "nationally recognized
statistical rating organization", as such term is defined by the Commission for
purposes of Rule 436(g)(2) under the Securities Act; and (ii) no such
organization shall have publicly announced that it has under surveillance or
review (other than an announcement with positive implications of a possible
upgrading) its rating of the Securities or of any other debt securities or
preferred stock issued or guaranteed by the Company or any of the Guarantors.
(c) No Material Adverse Change. Subsequent to the execution and delivery of
this Agreement, no event or condition of a type described in Section 3(c) hereof
shall have occurred or shall exist, which event or condition is not described in
the Offering Memorandum (prior to any amendment or supplement thereto subsequent
to the date hereof) and the effect of which in the reasonable judgment of the
Representative makes it impracticable or inadvisable to proceed with the
offering, resale and delivery of the Securities on the Closing Date on the terms
and in the manner contemplated by this Agreement and the Offering Memorandum.
(d) Officer's Certificate. The Representative shall have received on and as
of the Closing Date a certificate of an executive officer of the Company and of
each Guarantor who has specific knowledge of the Company's or such Guarantor's
financial matters and is reasonably satisfactory to the Representative (i)
confirming that such officer has carefully reviewed the Offering Memorandum, and
that to such officer's knowledge, the representations stated in Section 3(a)
hereof is true and correct and (ii) to the effect set forth in paragraphs (a)
through (c) above.
(e) Comfort Letters. On the date of this Agreement and on the Closing Date,
Xxxxxx Xxxxxxxx LLP shall have furnished to the Representative, at the request
of the Company, letters, dated the respective dates of delivery thereof and
addressed to the Initial Purchasers, in form and substance reasonably
satisfactory to the Representative, containing statements and information of the
type customarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information relating
to the Company and its subsidiaries and the pro forma financial information and
the related notes contained in the Preliminary Offering Memorandum and the
Offering Memorandum. On the date of this Agreement and on the Closing Date,
Ernst & Young LLP shall have furnished to the Representative, at the request of
the Company, letters, dated the respective dates of delivery thereof and
19
addressed to the Initial Purchasers, in form and substance reasonably
satisfactory to the Representative, containing statements and information of the
type customarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information relating
to Discount and its subsidiaries contained in the Preliminary Offering
Memorandum and the Offering Memorandum.
(f) Opinion of Counsel for the Company. Xxxxxxx & XxXxxxxx, a professional
law corporation, counsel for the Company, and other counsel reasonably
acceptable to the Representative, shall have furnished to the Representative, at
the request of the Company, their written opinion, dated the Closing Date and
addressed to the Initial Purchasers, in form and substance reasonably
satisfactory to the Representative, substantially to the effect set forth in
Annex B hereto.
(g) Opinion of Counsel for the Initial Purchasers. The Representative shall
have received on and as of the Closing Date an opinion of Cravath, Swaine &
Xxxxx, counsel for the Initial Purchasers, with respect to such matters as the
Representative may reasonably request, and such counsel shall have received such
documents and information as they may reasonably request to enable them to pass
upon such matters.
(h) No Legal Impediment to Issuance. No action shall have been taken and no
statute, rule, regulation or order shall have been enacted, adopted or issued by
any governmental or regulatory authority that would, as of the Closing Date,
prevent the issuance or sale of the Securities; and no injunction or order of
any federal, state or foreign court shall have been issued that would, as of the
Closing Date, prevent the issuance or sale of the Securities.
(i) Good Standing. The Representative shall have received on and as of the
Closing Date satisfactory evidence of the good standing of the Company and its
subsidiaries in their respective jurisdictions of incorporation and their good
standing as foreign corporations in such other jurisdictions as the
Representative may reasonably request, in each case in writing or any standard
form of telecommunication, from the appropriate governmental authorities of such
jurisdictions.
(j) Registration Rights Agreement. The Initial Purchasers shall have
received a counterpart of the Registration Rights Agreement that shall have been
executed and delivered by a duly authorized officer of the Company and each of
the Guarantors.
(k) Indenture. The Initial Purchasers shall have received a counterpart of
the Indenture that shall have been executed and delivered by a duly authorized
officer of the Company, each of the Guarantors and the Trustee.
(l) PORTAL and DTC. The Securities shall have been approved by the NASD for
trading in the PORTAL Market and shall be eligible for clearance and settlement
through DTC.
20
(m) Additional Documents. On or prior to the Closing Date, the Company and
the Guarantors shall have furnished to the Representative such further
certificates and documents as the Representative may reasonably request.
(n) Escrow Agreement. The Initial Purchasers shall have received a
counterpart of the Escrow Agreement that shall have been executed and delivered
by a duly authorized officer of the Company and each of the Guarantors.
(o) Consent to the Credit Agreement. The Representative shall have
received an executed copy of the Consent dated as of September 17, 2001, to the
Company's Existing Credit Agreement, which Consent shall be in full force and
effect.
All opinions, letters, certificates and evidence mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Initial Purchasers.
6. Indemnification and Contribution.
--------------------------------
(a) Indemnification of the Initial Purchasers. The Company and each of the
Guarantors jointly and severally agree to indemnify and hold harmless each
Initial Purchaser, its affiliates and each person, if any, who controls such
Initial Purchaser within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, from and against any and all losses, claims,
damages and liabilities (including, without limitation, legal fees and other
expenses reasonably incurred in connection with any suit, action or proceeding
or any claim asserted), joint or several, caused by any untrue statement or
alleged untrue statement of a material fact contained in the Preliminary
Offering Memorandum or the Offering Memorandum (or any amendment or supplement
thereto), or caused by any omission or alleged omission to state therein a
material fact or necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading, except insofar
as such losses, claims, damages or liabilities are caused by any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with any information relating to any Initial Purchaser
furnished to the Company in writing by such Initial Purchaser through the
Representative expressly for use therein; provided, that with respect to any
--------
such untrue statement in or omission from the Preliminary Offering Memorandum,
the indemnity agreement contained in this paragraph (a) shall not inure to the
benefit of any Initial Purchaser to the extent that the sale to the person
asserting any such loss, claim, damage or liability was an initial resale by
such Initial Purchaser and any such loss, claim, damage or liability of or with
respect to such Initial Purchaser results from the fact that both (i) a copy of
the Offering Memorandum (with any supplements or amendments thereto) was not
sent or given to such person at or prior to the written confirmation of the sale
of such Securities to such person and (ii) the untrue statement in or omission
from such Preliminary Offering Memorandum was
21
corrected in the Offering Memorandum (including any supplement or amendment
thereto) unless, in either case, such failure to deliver the Offering Memorandum
was a result of non-compliance by the Company with the provisions of Section 4
hereof.
(b) Indemnification of the Company. Each Initial Purchaser agrees,
severally and not jointly, to indemnify and hold harmless the Company, each of
the Guarantors and their respective directors and officers and each person, if
any, who controls the Company or any of the Guarantors within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act to the same
extent as the indemnity set forth in paragraph (a) above, but only with respect
to any losses, claims, damages or liabilities caused by any untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with any information relating to such Initial Purchaser furnished to
the Company in writing by such Initial Purchaser through the Representative
expressly for use in the Preliminary Offering Memorandum and the Offering
Memorandum (or any amendment or supplement thereto).
(c) Notice and Procedures. If any suit, action, proceeding (including any
governmental or regulatory investigation), claim or demand shall be brought or
asserted against any person in respect of which indemnification may be sought
pursuant to either paragraph (a) or (b) above, such person (the "Indemnified
Person") shall promptly notify the person against whom such indemnification may
be sought (the "Indemnifying Person") in writing; provided that the failure to
---------
notify the Indemnifying Person shall not relieve it from any liability that it
may have under this Section 6 except to the extent that it has been materially
prejudiced (through the forfeiture of substantive rights or defenses) by such
failure; and provided, further, that the failure to notify the Indemnifying
-------- -------
Person shall not relieve it from any liability that it may have to an
Indemnified Person otherwise than under this Section 6. If any such proceeding
shall be brought or asserted against an Indemnified Person and it shall have
notified the Indemnifying Person thereof, the Indemnifying Person shall retain
counsel reasonably satisfactory to the Indemnified Person to represent the
Indemnified Person and any others entitled to indemnification pursuant to this
Section 6 that the Indemnifying Person may designate in such proceeding and
shall pay the fees and expenses of such counsel related to such proceeding. In
any such proceeding, any Indemnified Person shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such Indemnified Person unless (i) the Indemnifying Person and the
Indemnified Person shall have mutually agreed to the contrary; (ii) the
Indemnifying Person has failed within a reasonable time to retain counsel
reasonably satisfactory to the Indemnified Person; (iii) the Indemnified Person
shall have reasonably concluded (based upon advice of counsel to the Indemnified
Person) that there may be legal defenses available to it that are different from
or in addition to those available to the Indemnifying Person; or (iv) the named
parties in any such proceeding (including any impleaded parties) include both
the Indemnifying Person and the Indemnified Person and the Indemnified Person
shall have reasonably concluded (based upon advice of counsel to the Indemnified
Person) that representation of both
22
parties by the same counsel would be inappropriate due to an actual or potential
conflict of interests between them. It is understood and agreed that the
Indemnifying Person shall not, in connection with any proceeding or related
proceeding in the same jurisdiction, be liable for the fees and expenses of more
than one separate firm (in addition to any local counsel) for all Indemnified
Persons, and that all such fees and expenses shall be reimbursed as they are
incurred. Any such separate firm for any Initial Purchaser, its affiliates and
any control persons of such Initial Purchaser shall be designated in writing by
X.X. Xxxxxx Securities Inc. and any such separate firm for the Company, the
Guarantors and any control persons of the Company and the Guarantors shall be
designated in writing by the Company. The Indemnifying Person shall not be
liable for any settlement of any proceeding effected without its written consent
(which consent shall not be unreasonably withheld), but if settled with such
consent or if there be a final judgment for the plaintiff, the Indemnifying
Person agrees to indemnify each Indemnified Person from and against any loss or
liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an Indemnified Person shall have requested
that an Indemnifying Person reimburse the Indemnified Person for fees and
expenses of counsel as contemplated by this paragraph, the Indemnifying Person
shall be liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than 45 days after
receipt by the Indemnifying Person of such request and (ii) the Indemnifying
Person shall not have reimbursed the Indemnified Person in accordance with such
request prior to the date of such settlement. No Indemnifying Person shall,
without the written consent of the Indemnified Person (which consent shall not
be unreasonably withheld), effect any settlement of any pending or threatened
proceeding in respect of which any Indemnified Person is or could have been a
party and indemnification could have been sought hereunder by such Indemnified
Person, unless such settlement (i) includes an unconditional release of such
Indemnified Person from all liability on claims that are the subject matter of
such proceeding and (ii) does not include any statement as to or any admission
of fault, culpability or a failure to act by or on behalf of any Indemnified
Person.
(d) Contribution. If the indemnification provided for in paragraphs (a) and
(b) above is unavailable to an Indemnified Person or insufficient in respect of
any losses, claims, damages or liabilities referred to therein, then each
Indemnifying Person under such paragraph, in lieu of indemnifying such
Indemnified Person thereunder, shall contribute to the amount paid or payable by
such Indemnified Person as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Guarantors on the one hand and the
Initial Purchasers on the other from the offering of the Securities 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) but also the relative fault of the Company and the
Guarantors on the one hand and the Initial Purchasers on the other in connection
with the statements or omissions that resulted in such losses, claims, damages
or liabilities, as well as any other relevant
23
equitable considerations. The relative benefits received by the Company and the
Guarantors on the one hand and the Initial Purchasers on the other shall be
deemed to be in the same respective proportions as the net proceeds (before
deducting expenses) received by the Company from the sale of the Securities and
the total discounts and commissions received by the Initial Purchasers in
connection therewith, as provided in this Agreement, bear to the aggregate
offering price of the Securities. The relative fault of the Company and the
Guarantors on the one hand and the Initial Purchasers on the other shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or any Guarantor
or by the Initial Purchasers and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
(e) Limitation on Liability. The Company, the Guarantors and the Initial
Purchasers agree that it would not be just and equitable if contribution
pursuant to this Section 6 were determined by pro rata allocation (even if the
Initial Purchasers were treated as one entity for such purpose) or by any other
method of allocation that does not take account of the equitable considerations
referred to in paragraph (d) above. The amount paid or payable by an Indemnified
Person as a result of the losses, claims, damages and liabilities referred to in
paragraph (d) above shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such Indemnified
Person in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 6, in no event shall an Initial
Purchaser be required to contribute any amount in excess of the amount by which
the total discounts and commissions received by such Initial Purchaser with
respect to the offering of the Securities exceeds the amount of any damages that
such Initial Purchaser has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11 (f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The Initial Purchasers'
obligations to contribute pursuant to this Section 6 are several in proportion
to their respective purchase obligations hereunder and not joint.
(f) Non-Exclusive Remedies. The remedies provided for in this Section 6 are
not exclusive and shall not limit any rights or remedies that may otherwise be
available to any Indemnified Person at law or in equity.
7. Termination. This Agreement may be terminated in the absolute
-----------
discretion of the Representative, by notice to the Company, if after the
execution and delivery of this Agreement and prior to the Closing Date (i)
trading generally shall have been suspended or materially limited on or by any
of the New York Stock Exchange, the American Stock Exchange or the over-the-
counter market; (ii) trading of any securities issued or guaranteed by the
Company or any of the Guarantors shall have been
24
suspended on any exchange or in any over-the-counter market; (iii) a general
moratorium on commercial banking activities shall have been declared by federal
or New York State authorities; or (iv) there shall have occurred any outbreak or
escalation of hostilities or any change in financial markets or any calamity or
crisis, either within or outside the United States, that in the judgment of the
Representative is material and adverse and makes it impracticable or inadvisable
to proceed with the offer, sale or delivery of the Securities on the terms and
in the manner contemplated by this Agreement and the Offering Memorandum.
8. Defaulting Initial Purchaser. (a) If, on the Closing Date, any Initial
----------------------------
Purchaser defaults on its obligation to purchase the Securities that it has
agreed to purchase hereunder, the non-defaulting Initial Purchasers may in their
discretion arrange for the purchase of such Securities by other persons
satisfactory to the Company on the terms contained in this Agreement. If, within
36 hours after any such default by any Initial Purchaser, the non-defaulting
Initial Purchasers do not arrange for the purchase of such Securities, then the
Company shall be entitled to a further period of 36 hours within which to
procure other persons satisfactory to the non-defaulting Initial Purchasers to
purchase such Securities on such terms. If other persons become obligated or
agree to purchase the Securities of a defaulting Initial Purchaser, either the
non-defaulting Initial Purchasers or the Company may postpone the Closing Date
for up to five full Business Days in order to effect any changes that in the
opinion of counsel for the Company or counsel for the Initial Purchasers may be
necessary in the Offering Memorandum or in any other document or arrangement,
and the Company agrees to promptly prepare any amendment or supplement to the
Offering Memorandum that effects any such changes. As used in this Agreement,
the term "Initial Purchaser" includes, for all purposes of this Agreement unless
the context otherwise requires, any person not listed in Schedule 1 hereto that,
pursuant to this Section 8, purchases Securities that a defaulting Initial
Purchaser agreed but failed to purchase.
(b) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Initial Purchaser or Initial Purchasers by the non-
defaulting Initial Purchasers and the Company as provided in paragraph (a)
above, the aggregate principal amount of such Securities that remains
unpurchased does not exceed one-eleventh of the aggregate principal amount of
all the Securities, then the Company shall have the right to require each non-
defaulting Initial Purchaser to purchase the principal amount of Securities that
such Initial Purchaser agreed to purchase hereunder plus such Initial
Purchaser's pro rata share (based on the principal amount of Securities that
such Initial Purchaser agreed to purchase hereunder) of the Securities of such
defaulting Initial Purchaser or Initial Purchasers for which such arrangements
have not been made.
(c) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Initial Purchaser or Initial Purchasers by the non-
defaulting Initial Purchasers and the Company as provided in paragraph (a)
above, the aggregate
25
principal amount of such Securities that remains unpurchased exceeds one-
eleventh of the aggregate principal amount of all the Securities, or if the
Company shall not exercise the right described in paragraph (b) above, then this
Agreement shall terminate without liability on the part of the non-defaulting
Initial Purchasers, the Company or the Guarantors, except that the Company and
each of the Guarantors will continue to be liable for the payment of expenses as
set forth in Section 9 hereof and except that the provisions of Section 6 hereof
shall not terminate and shall remain in effect.
(d) Nothing contained herein shall relieve a defaulting Initial Purchaser
of any liability it may have to the Company, the Guarantors or any non-
defaulting Initial Purchaser for damages caused by its default.
9. Payment of Expenses. (a) Whether or not the transactions contemplated
-------------------
by this Agreement are consummated or this Agreement is terminated, the Company
and each of the Guarantors jointly and severally agree to pay or cause to be
paid all costs and expenses incident to the performance of their respective
obligations hereunder, including without limitation, (i) the costs incident to
the authorization, issuance, sale, preparation and delivery of the Securities
and any taxes payable in that connection; (ii) the costs incident to the
preparation and printing of the Preliminary Offering Memorandum and the Offering
Memorandum (including any amendment or supplement thereto) and the distribution
thereof to the Initial Purchasers; (iii) the costs of reproducing and
distributing each of the Transaction Documents; (iv) the fees and expenses of
the Company's and the Guarantors' counsel and independent accountants; (v) the
fees and expenses incurred in connection with the registration or qualification
and determination of eligibility for investment of the Securities under the laws
of such jurisdictions as the Representative may designate and the preparation,
printing and distribution of a Blue Sky Memorandum (including the related fees
and expenses of counsel for the Initial Purchasers); (vi) any fees charged by
rating agencies for rating the Securities; (vii) the fees and expenses of the
Trustee and any paying agent (including related fees and expenses of any counsel
to such parties); (viii) all expenses and application fees incurred in
connection with the application for the inclusion of the Securities on the
PORTAL Market and the approval of the Securities for book-entry transfer by DTC;
and (ix) all expenses incurred by the Company in connection with any "road show"
presentation to potential investors.
(b) If (i) this Agreement is terminated pursuant to Section 7, (ii) the
Company for any reason fails to tender the Securities for delivery to the
Initial Purchasers or (iii) the Initial Purchasers decline to purchase the
Securities for any reason permitted under this Agreement, the Company and each
of the Guarantors jointly and severally agrees to reimburse the Initial
Purchasers for all out-of-pocket costs and expenses (including the fees and
expenses of their counsel) reasonably incurred by the Initial Purchasers in
connection with this Agreement and the offering contemplated hereby.
26
10. Persons Entitled to Benefit of Agreement. This Agreement shall inure
----------------------------------------
to the benefit of and be binding upon the Company, the Guarantors and any
controlling persons referred to herein, the Initial Purchasers, their respective
affiliates and any controlling persons referred to herein, and their respective
successors. Nothing in this Agreement is intended or shall be construed to give
any other person any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision contained herein. No purchaser of
Securities from any Initial Purchaser shall be deemed to be a successor merely
by reason of such purchase.
11. Survival. The respective indemnities, rights of contribution,
--------
representations, warranties and agreements of the Company, the Guarantors and
the Initial Purchasers contained in this Agreement or made by or on behalf of
the Company, the Guarantors or the Initial Purchasers pursuant to this Agreement
or any certificate delivered pursuant hereto shall survive the delivery of and
payment for the Securities and shall remain in full force and effect, regardless
of any termination of this Agreement or any investigation made by or on behalf
of the Company, the Guarantors or the Initial Purchasers.
12. Initial Purchasers' Information. The Company, the Guarantors and the
-------------------------------
Initial Purchasers acknowledge and agree that the only information relating to
any Initial Purchaser that has been furnished to the Company in writing by any
Initial Purchaser through the Representative expressly for use in the
Preliminary Offering Memorandum and the Offering Memorandum (or any amendment or
supplement thereto) consists of the following: (i) the last paragraph on the
front cover page concerning the terms of the offering by the Initial Purchasers;
and (ii) the statements concerning the Initial Purchasers contained in the
third, eighth, tenth and eleventh paragraphs under the heading "Plan of
Distribution".
13. Miscellaneous. (a) Authority of the Representative. Any action by the
-------------
Initial Purchasers hereunder may be taken by X.X. Xxxxxx Securities Inc. on
behalf of the Initial Purchasers, and any such action taken by X.X. Xxxxxx
Securities Inc. shall be binding upon the Initial Purchasers.
(b) Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed or transmitted and
confirmed by any standard form of telecommunication. Notices to the Initial
Purchasers shall be given to the Representative c/o X.X. Xxxxxx Securities Inc.,
000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (fax: (000) 000-0000; Attention: Xxxxx
Xxxxxx). Notices to the Company and the Guarantors shall be given to them at
Advance Stores Company, Incorporated, 0000 Xxxxxxx Xxxx, Xxxxxxx, Xxxxxxxx 00000
(fax: (000) 000-0000; Attention: Xxxx X. Xxxxxxxx).
(c) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
27
(d) Counterparts. This Agreement may be signed in counterparts (which may
include counterparts delivered by any standard form of telecommunication), each
of which shall be an original and all of which together shall constitute one and
the same instrument.
(e) Amendments or Waivers. No amendment or waiver of any provision of this
Agreement, nor any consent or approval to any departure therefrom, shall in any
event be effective unless the same shall be in writing and signed by the parties
hereto.
(f) Headings. The headings herein are included for convenience of reference
only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
28
If the foregoing is in accordance with your understanding, please indicate your
acceptance of this Agreement by signing in the space provided below.
Very truly yours,
ADVANCE STORES COMPANY,
INCORPORATED,
By /s/ Xxxxxxx X. Xxxx
------------------------
Name: Xxxxxxx X. Xxxx
Title: Senior Vice President
Controller
ADVANCE TRUCKING
CORPORATION,
By /s/ Xxxxxxx X. Xxxx
-----------------------
Name: Xxxxxxx X. Xxxx
Title: Senior Vice President
Controller
LARALEV, INC.,
By /s/ Xxxxxx Xxxxxxxxxx
------------------------
Name: Xxxxxx Xxxxxxxxxx
Title: President
WESTERN AUTO SUPPLY COMPANY,
By /s/ Xxxxxxx X. Xxxx
------------------------
Name: Xxxxxxx X. Xxxx
Title: Senior Vice President
Controller
29
Accepted: October 24, 2001
X.X. XXXXXX SECURITIES INC.
For itself and on behalf of the
several Initial Purchasers listed
in Schedule 1 hereto.
By /s/ Xxxxxxxx Xxx-Xxxxx
--------------------------------
Vice President
30
Schedule 1
Initial Purchasers Principal Amount
------------------ ----------------
X.X. Xxxxxx Securities Inc. $100,000,000
Credit Suisse First Boston $ 50,000,000
Xxxxxx Brothers Inc. $ 50,000,000
----------------
Total $200,000,000
Schedule 2
Material Agreements of Advance Stores Company, Incorporated
-----------------------------------------------------------
1. Amended and Restated Credit Agreement dated as of October 19, 1998 among
Advance Holding Corporation ("Holding"), Advance Stores Company,
Incorporated (the "Company"), the lenders party thereto, The Chase
Manhattan Bank ("Chase"), Chase Securities Inc., DLJ Capital Funding, Inc.
and First Union National Bank.
2. Pledge Agreement dated as of April 15, 1998, as amended and restated as of
November 2, 1998, among the Company, Holding, the Subsidiary Pledgors
listed therein and Chase, as collateral agent.
3. Guarantee Agreement dated as of April 15, 1998, as amended and restated as
of November 2, 1998, among Holding, the Subsidiary Guarantors listed
therein and Chase, as collateral agent.
4. Indemnity, Subrogation and Contribution Agreement dated as of April 15,
1998, as amended and restated as of November 2, 1998, among the Company,
Holding, the Guarantors listed therein and Chase, as collateral agent.
5. Security Agreement dated as of April 15, 1998, as amended and restated as
of November 2, 1998, among the Company, Holding, the Subsidiary Guarantors
listed therein and Chase, as collateral agent.
6. Lease Agreement dated as of March 16, 1995 between Ki, L.C. and the Company
for the Company's headquarters located at 0000 Xxxxxxx Xxxx, Xxxxxxx,
Xxxxxxxx, as amended.
7. Lease Agreement dated as of January 1, 1997 between Xxxxxxxx X. Xxxxxxx and
the Company for the distribution center located at 0000 Xxxx Xxxxx Xxxxx,
X.X., Xxxxxxx, Xxxxxxxx, as amended.
8. Trust Indenture dated as of December 1, 1997 among XxXxxxxx County
Development Authority, First Union National Bank, as trustee, and Branch
Banking and Trust Company, as credit facility trustee, relating to the
$10,000,000 Taxable Industrial Development Revenue Bonds (Advance Stores
Company, Incorporated Project) Series 1997 (the "IRB").
9. Lease Agreement dated as of December 1, 1997 between Development Authority
of XxXxxxxx County and the Company relating to the IRB.
10. Letter of Credit and Reimbursement Agreement dated as of December 1, 1997
among the Company, Holding and First Union National Bank relating to the
IRB.
11. Holding 1998 Senior Executive Stock Option Plan.
12. Form of Holding 1998 Senior Executive Stock Option Agreement.
13. Holding 1998 Executive Stock Option Plan.
14. Form of Holding 1998 Stock Option Agreement.
15. Holding 1998 Senior Executive Stock Subscription Plan.
16. Form of Holding Senior Executive Stock Subscription Agreement.
17. Holding 1998 Employee Stock Subscription Plan.
18. Form of Holding Employee Stock Subscription Agreement.
19. Form of Secured Promissory Note.
20. Form of Stock Pledge Agreement.
21. Form of Employment and Non-Competition Agreement between Childs, Cox,
Gearheart, Gerald, Gray, Gregory, Hale, Helms, Jeter, Xxxxxxxx, Xxxx,
Livesay, McDaniel, Miley, Quinn, Richardson, Smith, Xxxxxx and Xxxxxxxx and
the Company (one-year agreement).
22. Form of Employment and Non-Competition Agreement between Bigoney, Buskirk,
Felts, Fralin, Haan, Klasing, Reid, Stevens, Vaughn, Wade, Xxxxxxxxx and
Xxxxx and the Company (two-year agreement).
23. Form of Indemnity Agreement between certain directors of Holding (other
than Xxxxxxxx X. Xxxxxxx) and Holding.
24. Form of Consulting and Non-Competition Agreement among Xxxxxxxx X. Xxxxxxx,
Holding and the Company.
25. Indemnity Agreement dated as of April 15, 1998 between Xxxxxxxx X. Xxxxxxx
and Holding.
26. Option Agreement dated as of April 15, 1998 between Xxxxxxxx X. Xxxxxxx and
Holding.
27. Option Agreement dated as of April 15, 1998 between Xxxxxx Xxxxxxx Trust
dated July 13, 1968 and Holding.
2
28. Form of Employment and Non-Competition Agreement among Xxxxxxx X. Xxxxx,
Holding and the Company.
29. Form of Series B Debenture.
30. First Amendment dated as of June 30, 1999, to the Credit Agreement dated as
of April 15, 1998 as amended and restated as of October 19, 1998, among
Holding, the Company, the lenders party thereto and Chase, as
administrative agent.
31. Supplement No. 1 dated as of June 30, 1999, to the Guarantee Agreement
dated as of April 15, 1998 as amended and restated as of November 2, 1998,
among Holding, the Subsidiary Guarantors listed therein and Chase, as
collateral agent.
32. Supplement No. 1 dated as of June 30, 1999, to the Pledge Agreement dated
as of April 15, 1998 as amended and restated as of November 2, 1998, among
the Company, Holding, the Subsidiary Pledgors listed therein and Chase, as
collateral agent.
33. Supplement No. 1 dated as of June 30, 1999, to the Security Agreement dated
as of April 15, 1998 as amended and restated as of November 2, 1998, among
the Company, Holding, the Subsidiary Guarantors listed therein and Chase,
as collateral agent.
34. Supplement No. 1 dated as of June 30, 1999, to the Indemnity, Subrogation
and Contribution Agreement dated as of April 15, 1998 as amended and
restated as of November 2, 1998 among the Company, Holding, the Guarantors
listed therein and Chase, as collateral agent.
35. Employment and Noncompetition Agreement dated as of February 1, 2000 among
the Company, Holding and Xxxxxxxx X. Xxxxxxxxxx.
36. Senior Executive Stock Subscription Agreement dated as of February 1, 2000,
between Holding and Xxxxxxxx X. Xxxxxxxxxx.
37. Restricted Stock Agreement dated as of February 1, 2000, between Holding
and Xxxxxxxx X. Xxxxxxxxxx.
38. Second Amendment and Consent, dated as of December 1, 1999, to the Credit
Agreement dated as of April 15, 1998, among Holding, the Company, the
lenders party thereto and Chase, as Administrative Agent.
3
39. Third Amendment, dated as of February 11, 2000, to the Credit Amendment
dated as of April 15, 1998, among Holding, the Company and Chase, as
Administrative Agent.
40. Amended and Restated Stockholders Agreement dated November 2, 1998 among FS
Equity Parts IV., L.P., Ripplewood Partners, L.P., Ripplewood Advance Auto
Parts Employee Fund I L.L.C., Xxxxxxxx X. Xxxxxxx, The Xxxxxx Xxxxxxx Trust
dated July 13, 1964, WA Holding Co. and Holding (including the Terms of the
Registration Rights of Common Stock).
41. Indenture dated as of April 15, 0000 xxxxxxx Xxxxxxx xxx Xxxxxx Xxxxxx
Trust Company of New York, as Trustee, with respect to the 12.875% Senior
Discount Debentures due 2009 (including the form of 12.875% Senior Discount
Debenture due 2009).
42. Indenture dated as of April 15, 1998 among the Company, LARALEV, INC., as
guarantor, and United States Trust Company of New York, as Trustee, with
respect to the 10.25% Senior Subordinated Notes due 2008 (including the
form of 10.25% Senior Subordinated Note due 1008).
43. Supplemental Indenture dated as of November 2, 0000 xxxxxxx Xxxxxxx Xxxx
xxx Xxxxxx Xxxxxx Trust Company of New York, as trustee.
44. Agreement and Plan of Merger dated as of August 7, 2001 among Holding,
Advance Auto Parts, Inc., the Company, AAP Acquisition Corporation and
Discount Auto Parts, Inc.
45. Agreement and Plan of Merger date as of August 7, 2001 among Holding and
Advance Auto Parts, Inc.
46. Irrevocable proxy and Voting Agreement Dated as of August 7, 2001 among
Holding, the Company, Xxxxxxxx Industries Limited Partnership, the Xxxxx X.
Xxxxxxxx Revocable Trust and Xxxxx X. Xxxxxxxx.
47. Stock Option Agreement dated as of August 7, 2001 among Holding, the
Company, Xxxxxxxx Industries Limited Partnership, the Xxxxx X. Xxxxxxxx
Revocable Trust and Xxxxx X. Xxxxxxxx.
4
Material Agreements of Discount Auto Parts, Inc.
------------------------------------------------
1. Revolving Credit Agreement dated as of July 29, 1999 by and among Discount
Auto Parts, Inc. ("Discount") and SunTrust Bank, Central Florida, National
Association, individually and as Administrative Agent, SunTrust Equitable
Securities Corporation, as Arranger and Book Manager, Bank of America,
N.A., individually and as Syndication Agent, The First National Bank of
Chicago, individually and as Documentation Agent, SouthTrust Bank, National
Association, Amsouth Bank, First Union National Bank, Banque Nationale de
Paris, Regions Bank, and Hibernia National Bank.
2. First Amendment to Revolving Credit Agreement dated as of January 12, 2000
by and among Discount, the Lenders, and SunTrust Bank.
3. Second Amendment to Revolving Credit Agreement dated as of August 29, 2000
by and among Discount, the Lenders, and SunTrust Bank.
4. Amendment and Restatement of the Discount Auto Parts Team Members' Profit
Sharing Plan and Trust dated May 31, 1994.
5. Discount Supplemental Executive Profit Sharing Plan.
6. First Amendment and Restatement of the Discount Supplemental Executive
Profit Sharing Plan.
7. Incentive compensation plans for Xxxxx X. Xxxxxxxx, C. Xxxxxxx Xxxxx,
Xxxxxxx X. Xxxxxx, Xxxxxxx X. Xxxxxxx, Xxxxx X. Xxxxx and C. Xxx Xxxxxx for
fiscal year 2002.
8. Discount 1992 Stock Option Plan.
9. Discount Amended and Restated 1992 Team Member Stock Purchase Plan.
10 Discount Non-Employee Directors' Stock Option Plan.
11. First Amendment to Discount Non-Employee Directors' Stock Option Plan.
12. Discount Amended and Restated 1995 Stock Option Plan.
13. 1999 Amendment to the Discount Amended and Restated 1995 Stock Option Plan
5
14. Indemnification Agreements for Xxxxx X. Xxxxxxxx, Xxxxxxx X. Xxxxxxx, and
X.X. Xxxxxxx.
15. Indemnification Agreement for Xxxxx X. Xxxxxxx.
16. Indemnification Agreement for Xxxxxxx X. Xxxxxxx, Xx.
17. Indemnification Agreements for Xxxxxxx X. Xxxxxxx, Xxxxxxx X. Xxxxxx,
Xxxxxx Xxxx and Xxxxx X. Xxxxx.
18. Indemnification Agreement for Xxxxxx X. Xxxxx.
19. Change of Control Employment Agreement with Xxxxxxx X. Xxxxxxx dated
January 17, 2000.
20. Change of Control Employment Agreement with C. Xxxxxxx Xxxxx dated January
17, 2000.
21. First Amendment to Change of Control Employment Agreement with C. Xxxxxxx
Xxxxx dated March 17, 2001.
22. Second Amendment to Change of Control Employment Agreement with C. Xxxxxxx
Xxxxx dated July 3, 2001.
23. Form of Change of Control Employment Agreement with each of Xxxxxxx
Xxxxxxx, Xxx Xxxxx, Xxxxxxx X. Xxxxxx, Xxxxx Xxxxx and Xxxxxx Xxxxxx.
24. Form of Change of Control Employment Agreement with C. Xxx Xxxxxx.
25. Stock Option Agreement with Xxxxxx X. Xxxx dated March 1, 2000.
26. Stock Option Agreement with Xxxxxxx X. Xxxxxxx dated January 18, 2001.
27. Stock Option Agreement with Xxxxxxx X. Xxxxxxx dated January 18, 2001.
28. Severance Protection and Change of Control Benefits Program.
29. Agreement and General Release with Xxxxxx X. Xxxx dated March 1, 2000.
30. Agreement and General Release with Xxxxxxx X. Xxxxxxx dated January 17,
2001.
6
31. Form of Master Agreement dated as of May 30, 2000 among Discount, Discount
Auto Parts Distribution Center, Inc., Atlantic Financial Group, Ltd.,
SunTrust Bank and others with Appendix A.
32. First Amendment to Master Agreement between Atlantic Financial Group, Ltd.
and Discount Auto Parts Distribution Center, Inc. and others dated August
29, 2000.
33. Second Amendment to Master Agreement between Atlantic Financial Group, Ltd.
and Discount Auto Parts Distribution Center, Inc. and others dated February
16, 2001.
34. Form of Master Lease Agreement dated as of May 30, 2000 between Atlantic
Financial Group, Ltd. and Discount Auto Parts Distribution Center, Inc. and
others.
35. Form of Mississippi Lease Supplement and Memorandum of Lease effective as
of May 30, 2000 between Atlantic Financial Group, Ltd. And Discount Auto
Parts Distribution Center, Inc.
36. Form of Guaranty Agreement from Discount dated as of May 30, 2000.
37. Form of Master Lease between DAPPER Properties I, II and III, LLC and
Discount Auto Parts, Inc. dated as of February 27, 2001.
38. Form of Sale-Leaseback Agreement between DAPPER Properties I, II and III,
LLC and Discount dated as of February 27, 2001.
39. Agreement and Plan of Recapitalization dated August 20, 1992.
40. Agreement and Plan of Merger dated as of August 7, 2001 among Discount
Holding, the Company, Advance Auto Parts, Inc., and AAP Acquisition
Corporation.
41. Amended and Restated Articles of Incorporation of Discount, as amended.
42. Amended and Restated Bylaws of Discount.
43. Note Agreement dated as of October 30, 1989 between Discount and
Massachusetts Mutual Life Insurance Company.
44. Amendment Agreement to Note Agreement effective as of August 26, 1992
between Discount and Massachusetts Mutual Life Insurance Company.
7
45. Note Purchase Agreement dated as of July 15, 1997 between Discount and the
Identified Purchasers.
46. Stockholder Rights Agreement dated as of November 21, 2000, between
Discount and ChaseMellon Shareholders Services, L.L.C. (now known as Mellon
Investor Services LLC).
47. Amendment No. 1, dated as of August 7, 2001, to the Stockholder Rights
Agreement dated as of November 21, 2000, between Discount and Mellon
Investor Services LLC (formerly known as ChaseMellon Shareholder Services,
L.L.C.).
48. Form of Certificate for Common Stock of Discount.
8
ANNEX A
Restrictions on Offers and Sales Outside the United States
----------------------------------------------------------
In connection with offers and sales of Securities outside the United
States:
(a) Each Initial Purchaser acknowledges that the Securities have not been
registered under the Securities Act and may not be offered or sold within the
United States or to, or for the account or benefit of, U.S. persons except
pursuant to an exemption from, or in transactions not subject to, the
registration requirements of the Securities Act.
(b) Each Initial Purchaser, severally and not jointly, represents,
warrants and agrees that:
(i) Such Initial Purchaser has offered and sold the Securities, and
will offer and sell the Securities, (A) as part of their distribution at
any time and (B) otherwise until 40 days after the later of the
commencement of the offering of the Securities and the Closing Date, only
in accordance with Regulation S under the Securities Act ("Regulation S")
or Rule 144A or any other available exemption from registration under the
Securities Act.
(ii) None of such Initial Purchaser or any of its affiliates or any
other person acting on its or their behalf has engaged or will engage in
any directed selling efforts with respect to the Securities, and all such
persons have complied and will comply with the offering restrictions
requirement of Regulation S.
(iii) At or prior to the confirmation of sale of any Securities sold
in reliance on Regulation S, such Initial Purchaser will have sent to each
distributor, dealer or other person receiving a selling concession, fee or
other remuneration that purchase Securities from it during the distribution
compliance period a confirmation or notice to substantially the following
effect:
"The Securities covered hereby have not been registered under the U.S.
Securities Act of 1933, as amended (the "Securities Act"), and may not
be offered or sold within the United States or to, or for the account
or benefit of, U.S. persons (i) as part of their distribution at any
time or (ii) otherwise until 40 days after the later of the
commencement of the offering of the Securities and the date of
original issuance of the Securities, except in accordance with
Regulation S or Rule 144A or any other available exemption from
registration under the Securities Act. Terms used above have the
meanings given to them by Regulation S."
(iv) Such Initial Purchaser has not and will not enter into any
contractual arrangement with any distributor with respect to the
distribution of the
Securities, except with its affiliates or with the prior written consent of
the Company.
Terms used in paragraph (a) and this paragraph (b) have the meanings given to
them by Regulation S.
(c) Each Initial Purchaser, severally and not jointly, represents, warrants
and agrees that (i) it has not offered or sold and prior to the date six months
after the Closing Date will not offer or sell any Securities to persons in the
United Kingdom except to persons whose ordinary activities involve them in
acquiring, holding, managing or disposing of investments (as principal or agent)
for the purposes of their businesses or otherwise in circumstances which have
not resulted and will not result in an offer to the public in the United Kingdom
within the meaning of the Public Offers of Securities Regulations 1995; (ii) it
has complied and will comply with all applicable provisions of the Financial
Services Xxx 0000 and the Public Offers of Securities Regulations 1995 with
respect to anything done by it in relation to the Securities in, from or
otherwise involving the United Kingdom; and (iii) it has only issued or passed
on and will only issue or pass on in the United Kingdom any document received by
it in connection with the issue of the Securities to a person who is of a kind
described in Article 11(3) of the Financial Services Xxx 0000 (Investment
Advertisements) (Exemptions) Order 1996 or is a person to whom such document may
otherwise lawfully be issued or passed on.
(d) Each Initial Purchaser acknowledges that no action has been or
will be taken by the Company that would permit a public offering of the
Securities, or possession or distribution of the Preliminary Offering
Memorandum, the Offering Memorandum or any other offering or publicity material
relating to the Securities, in any country or jurisdiction where action for that
purpose is required.
2
ANNEX B
[Opinion of Counsel for the Company in form and substance reasonably
satisfactory to the Representative]
ANNEX C
[Opinion of Counsel for the New Guarantors in form and substance reasonably
satisfactory to the Representative]
Exhibit A
[Form of Escrow Agreement]
Exhibit B
ADVANCE STORES COMPANY, INCORPORATED
$200,000,000
10-1/4% Senior Subordinated Notes due 2008
[Form Of]
JOINDER TO THE PURCHASE AGREEMENT
---------------------------------
________, 2001
X.X. Xxxxxx Securities Inc.
Credit Suisse First Boston
Xxxxxx Brothers Inc.
c/o X.X. Xxxxxx Securities Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Reference is made to the Purchase Agreement (the "Purchase Agreement")
------------------
dated October 24, 2001, initially among Advance Stores Company, Incorporated, a
Virginia corporation (the "Company"), Advance Trucking Corporation, LARALEV,
INC. and Western Auto Supply Company (collectively, the "Guarantors") and X.X.
Xxxxxx Securities Inc., Credit Suisse First Boston and Xxxxxx Brothers Inc. (the
"Initial Purchasers") concerning the purchase of the Securities (as defined in
the Purchase Agreement) from the Company by the several Initial Purchasers.
Capitalized terms used herein but not defined herein shall have the meanings
assigned to such terms in the Purchase Agreement. This is the agreement
referred to in Section 4(n) of the Purchase Agreement.
The Company and each of the Guarantors listed on Schedule I hereto
agree that this letter agreement is being executed and delivered in connection
with the issue and sale of the Securities pursuant to the Purchase Agreement and
to induce the Initial Purchasers to purchase the Securities thereunder and is
being executed concurrently with the consummation of the Acquisition.
1. Joinder. Each of the parties hereto hereby agrees to become bound
-------
by the terms, conditions and other provisions of the Purchase Agreement with all
attendant rights, duties and obligations stated therein, with the same force and
effect as if originally named as a Guarantor therein and as if such party
executed the Purchase Agreement on the date thereof.
2. Representations, Warranties and Agreements of the Guarantors.
------------------------------------------------------------
Each of the Guarantors represent and warrant to, and agree with, the several
Initial Purchasers on and as of the date hereof that:
(a) such Guarantor has the corporate power to execute and deliver this
letter agreement and all corporate action required to be taken by each of
them for the due and proper authorization, execution, delivery and
performance of this letter agreement and the consummation of the
transactions contemplated hereby has been duly and validly taken; this
letter agreement has been duly authorized, executed and delivered by such
Guarantor.
(b) the representations, warranties and agreements of such Guarantor
set forth in Section 3 of the Purchase Agreement are true and correct on
and as of the date hereof.
3. GOVERNING LAW. THIS LETTER AGREEMENT SHALL BE GOVERNED BY AND
-------------
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
4. Counterparts. This letter agreement may be executed in one or
------------
more counterparts (which may include counterparts delivered by telecopier) and,
if executed in more than one counterpart, the executed counterparts shall each
be deemed to be an original, but all such counterparts shall together constitute
one and the same instrument.
5. Amendments. No amendment or waiver of any provision of this
----------
letter agreement, nor any consent or approval to any departure therefrom, shall
in any event be effective unless the same shall be in writing and signed by the
parties hereto.
6. Headings. The headings herein are inserted for the convenience
--------
of reference only and are not intended to be part of, or to affect the meaning
or interpretation of, this letter agreement.
2
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us a counterpart hereof, whereupon this
letter agreement will become a binding agreement between the Company, the
Guarantors party hereto and the several Initial Purchasers in accordance with
its terms.
Very truly yours,
[GUARANTOR]
By: ________________________
Name:
Title:
Accepted: [ ], 2001
X.X. XXXXXX SECURITIES INC.
CREDIT SUISSE FIRST BOSTON
XXXXXX BROTHERS INC.
By: X.X. XXXXXX SECURITIES INC.
By: _____________________________
Title:
3
Exhibit C
[Form of Registration Rights Agreement]
