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Title: |
Purchase Agreement |
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Entities: |
Banc of America Securities LLC; Cede & Co.; FAA Holding Corp; Sonic Automotive, Inc.; Merrill Lynch & Co., Inc.; Fried, Frank, Harris, Shriver & Jacobson; Moore & Van Allen, PLLC |
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Date: |
2001 |
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Size: |
Preview shows 24KB of 133KB total |
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Price: |
$55 |
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ID: |
#1771791 |
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Start of Preview |
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SONIC AUTOMOTIVE, INC. (a Delaware corporation)
The Guarantors Listed on Schedule A
$75,000,000
11% Senior Subordinated Notes due 2008
PURCHASE AGREEMENT
------------------
Dated: November 8, 2001
================================================================================
{PAGE}
{TABLE}
{S} {C}
PURCHASE AGREEMENT ......................................................... 2
SECTION 1. Representations and Warranties................................ 3
------------------------------
(a) Representations and Warranties by the Company and the Guarantors .... 3
(i) Similar Offerings............................................. 4
-----------------
(ii) Offering Memorandum .......................................... 4
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(iii) Independent Accountants....................................... 4
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(iv) Financial Statements.......................................... 4
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(v) No Material Adverse Change in Business ....................... 4
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(vi) Good Standing of the Company ................................. 5
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(vii) Subsidiaries ................................................. 5
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(viii) Capitalization ............................................... 6
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(ix) Authorization of Agreements .................................. 6
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(x) Authorization of the Indenture ............................... 6
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(xi) Authorization of the Securities, the Guarantees and
---------------------------------------------------
the Exchange Securities ...................................... 6
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(xii) Description of the Securities, the Guarantees, the
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Indenture, the Registration Rights Agreement and the
----------------------------------------------------
Exchange Securities .......................................... 7
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(xiii) Absence of Defaults and Conflicts ............................ 7
---------------------------------
(xiv) Absence of Labor Disputes .................................... 8
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(xv) Absence of Proceedings ....................................... 8
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(xvi) Possession of Intellectual Property .......................... 9
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(xvii) Absence of Further Requirements .............................. 9
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(xviii) Possession of Licenses and Permits ........................... 9
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(xix) Title to Property ............................................ 10
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(xx) Tax Returns .................................................. 10
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(xxi) Insurance .................................................... 11
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(xxii) Solvency ..................................................... 11
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(xxiii) Stabilization or Manipulation ................................ 11
-----------------------------
{/TABLE}
-i-
{PAGE}
{TABLE}
{S} {C}
(xxiv) Related Party Transactions .................................. 11
--------------------------
(xxv) Suppliers.................................................... 11
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(xxvi) Environmental Laws .......................................... 12
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(xxvii) Registration Rights ......................................... 12
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(xxviii) Accounting Controls ......................................... 12
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(xxix) Investment Company Act ...................................... 13
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(xxx) Rule 144A Eligibility ....................................... 13
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(xxxi) No General Solicitation ..................................... 13
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(xxxii) No Registration Required .................................... 13
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(xxxiii) PORTAL ...................................................... 13
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(xxxiv) Franchise Agreements ........................................ 13
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(xxxv) Smith Subordination Agreement ............................... 14
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(b) Officer's Certificates ............................................... 14
SECTION 2. Sale and Delivery to Initial Purchasers; Closing ............ 14
------------------------------------------------
(a) Securities and Guarantees ............................................ 14
(b) Payment .............................................................. 14
(c) Qualified Institutional Buyer ........................................ 15
(d) Denominations; Registration .......................................... 15
SECTION 3. Covenants of the Company and the Guarantors ................. 15
-------------------------------------------
(a) Offering Memorandum .................................................. 15
(b) Notice and Effect of Material Events ................................. 15
(c) Amendment to Offering Memorandum and Supplements ..................... 16
(d) Qualification of Securities and Guarantees for Offer and Sale ........ 16
(e) Exchange Offer ....................................................... 16
(f) Integration .......................................................... 17
{/TABLE}
-ii-
{PAGE}
{TABLE}
{S} {C}
(g) Rating of Securities ............................................... 17
(h) Rule 144A Information .............................................. 17
(i) Restriction on Resales ............................................. 17
(j) Use of Proceeds .................................................... 17
(k) Restriction on Sale of Securities .................................. 18
(l) DTC Clearance ...................................................... 18
(m) Legends. ........................................................... 18
(n) Interim Financial Statements ....................................... 18
(o) Periodic Reports ................................................... 18
SECTION 4. Payment of Expenses ............................................ 19
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(a) Expenses ........................................................... 19
(b) Termination of Agreement ........................................... 19
SECTION 5. Conditions of Initial Purchasers' Obligations ................. 19
---------------------------------------------
(a) Opinion of Counsel for the Company and the Guarantors .............. 20
(b) Opinion of Counsel for the Initial Purchasers ...................... 20
(c) Officers' Certificate .............................................. 20
(d) Accountants' Letters and Consents .................................. 21
(e) Maintenance of Rating .............................................. 21
(f) PORTAL ............................................................. 21
(g) Chief Financial Officer's Certificate .............................. 21
(h) Registration Rights Agreement and Indenture ........................ 21
(i) Manufacturers' Consents ............................................ 22
(j) Lenders' Consents .................................................. 22
{/TABLE}
-iii-
{PAGE}
{TABLE}
{S} {C}
(k) Additional Documents ........................................... 22
(l) Termination of Agreement ....................................... 22
SECTION 6. Indemnification ............................................. 22
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(a) Indemnification of Initial Purchasers .......................... 22
(b) Indemnification of Company, Guarantors, and Directors .......... 23
(c) Actions against Parties; Notification ......................... 24
(d) Settlement without Consent if Failure to Reimburse ............. 24
SECTION 7. Contribution ................................................ 24
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SECTION 8. Representations, Warranties and Agreements to Survive
-----------------------------------------------------
Delivery .................................................... 26
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SECTION 9. Termination of Agreement .................................... 26
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(a) Termination; General ............................................ 26
(b) Liabilities ..................................................... 27
SECTION 10. Default by One or More of the Initial Purchasers .............. 27
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SECTION 11. Notices ....................................................... 28
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SECTION 12. Parties ....................................................... 28
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SECTION 13. Governing Law and Time ........................................ 28
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SECTION 14. General Provisions ............................................ 29
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SECTION 15. Partial Unenforceability ...................................... 29
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SECTION 16. Effect of Headings ............................................ 29
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{/TABLE}
Schedule A--Subsidiaries which are Guarantors
Schedule B--Initial Purchaser Amounts
Schedule C--2% Subsidiaries
Schedule D--Securities
-iv-
{PAGE}
$75,000,000
11% Senior Subordinated Notes due 2008
SONIC AUTOMOTIVE, INC. (a Delaware corporation)
The Guarantors Listed on Schedule A
-1-
{PAGE}
PURCHASE AGREEMENT
November 8, 2001
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Banc of America Securities LLC
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281
Ladies and Gentlemen:
Sonic Automotive, Inc., a Delaware corporation (the "Company"), and
each of the Guarantors listed on Schedule A hereto (the "Guarantors") confirm
their respective agreements with Merrill Lynch, Pierce, Fenner & Smith
Incorporated ("Merrill Lynch") and Banc of America Securities LLC (the "Initial
Purchasers"), (which term shall also include any initial purchaser substituted
as hereinafter provided in Section 10 hereof), for whom Merrill Lynch is acting
as representative (in such capacity, the "Representative"), with respect to (i)
the issue and sale by the Company and the purchase by the Initial Purchasers,
acting severally and not jointly, of the respective principal amounts set forth
in Schedule B of $75,000,000 aggregate principal amount of the Company's 11%
Senior Subordinated Notes due 2008 (the "Securities") and (ii) the issue and
sale by the Guarantors and the purchase by the Initial Purchasers, acting
severally and not jointly of the guarantees (the "Guarantees") of the Company's
obligations under the Securities. The Securities and the Guarantees are to be
issued pursuant to an indenture dated as of November 19, 2001 (the "Indenture")
among the Company, the Guarantors and U.S. Bank Trust National Association, as
trustee (the "Trustee"). Securities issued in book-entry form will be issued to
Cede & Co. as nominee of The Depository Trust Company ("DTC") pursuant to a
letter agreement, to be dated as of the Closing Time (as defined in Section
2(b)) (the "DTC Agreement"), among the Company, the Trustee and DTC.
The Company and the Guarantors understand that the Initial Purchasers
propose to make an offering of the Securities (together with the related
Guarantees) on the terms and in the manner set forth herein and agree that the
Initial Purchasers may resell, subject to the conditions set forth herein, all
or a portion of the Securities and the Guarantees to purchasers ("Subsequent
Purchasers") at any time after the date of this Agreement. The Securities and
the Guarantees are to be offered and sold through the Initial Purchasers without
being registered under the Securities Act of 1933, as amended (the "1933 Act"),
in reliance upon exemptions therefrom. Pursuant to the terms of the Securities,
the Guarantees and the Indenture, investors that acquire Securities
-2-
{PAGE}
and Guarantees may only resell or otherwise transfer such Securities and
Guarantees if such Securities and Guarantees are hereafter registered under the
1933 Act or if an exemption from the registration requirements of the 1933 Act
is available (including the exemption afforded by Rule 144A ("Rule 144A")
pursuant to the rules and regulations promulgated under the 1933 Act by the
Securities and Exchange Commission (the "Commission")).
The Company and the Guarantors have prepared and will deliver to each
Initial Purchaser by November 16, 2001 (by overnight courier), copies of a final
offering memorandum dated November 8, 2001 (the "Final Offering Memorandum"), to
be used by such Initial Purchaser in connection with its solicitation of,
purchases of, or offering of the Securities and the Guarantees. "Offering
Memorandum" means, with respect to any date or time referred to in this
Agreement, all offering memoranda (whether the Final Offering Memorandum, or any
amendment or supplement to such document), including exhibits thereto and any
documents incorporated therein by reference, which has been prepared and
delivered by the Company and the Guarantors to the Initial Purchasers in
connection with their solicitation of, purchases of, or offering of the
Securities and the Guarantees.
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Offering Memorandum (or other references of like import) shall be deemed to mean
and include all such financial statements and schedules and other information
which are incorporated by reference in the Offering Memorandum; and all
references in this Agreement to amendments or supplements to the Offering
Memorandum shall be deemed to mean and include the filing of any document under
the Securities Exchange Act of 1934, as amended (the "1934 Act"), which is
incorporated by reference in the Offering Memorandum.
The holders of the Securities and the Guarantees will be entitled to
the benefits of the registration rights agreement to be dated as of the Closing
Time (the "Registration Rights Agreement"), among the Company, the Guarantors
and the Initial Purchasers, pursuant to which the Company and the Guarantors
will agree among other things, to file, as soon as practicable after the Closing
Time but in any event within 60 days of the Closing Time, a registration
statement with the Commission registering the Exchange Securities (as defined in
the Registration Rights Agreement and including the securities exchanged for the
Original Securities (as defined below)) under the 1933 Act and to offer to
exchange the Company's existing $125,000,000 11% Senior Subordinated Notes due
2008 (the "Original Securities") for an equal principal amount of Exchange
Securities.
SECTION 1. Representations and Warranties.
------------------------------
(a) Representations and Warranties by the Company and the Guarantors.
The Company and each of the Guarantors, jointly and severally, represent and
warrant to the Initial Purchasers as of the date hereof and as of the Closing
Time referred to in Section 2(b) hereof, and agrees with each Initial Purchaser
as follows:
-3-
{PAGE}
(i) Similar Offerings. The Company and the Guarantors have
-----------------
not, directly or indirectly, solicited any offer to buy or offered to
sell, and will not, directly or indirectly, solicit any offer to buy or
offer to sell, in the United States or to any United States citizen or
resident, any security which is or would be integrated with the sale of
the Securities and the Guarantees in a manner that would require the
Securities or the Guarantees to be registered under the 1933 Act.
(ii) Offering Memorandum. The Offering Memorandum does not,
-------------------
and at the Closing Time will not, include an untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, that this
--------
representation, warranty and agreement shall not apply to statements in
or omissions from the Offering Memorandum made in reliance upon and in
conformity with information furnished to the Company and the Guarantors
in writing by any Initial Purchaser through Merrill Lynch expressly for
use in the Offering Memorandum.
(iii) Independent Accountants. The accountants who certified
-----------------------
the financial statements (which term as used in this Agreement includes
the notes related thereto) and supporting schedules (of (i) the Company
and (ii) its Subsidiaries (as defined below in Section (a)(vii))
included in the Offering Memorandum are independent certified public
accountants within the meaning of Regulation S-X under the 1933 Act
with respect to the Company, the Guarantors and their respective
Subsidiaries.
(iv) Financial Statements. The financial statements of the
--------------------
Company, together with the related schedules and notes, included in the
Offering Memorandum present fairly the financial position of the
Company and its consolidated Subsidiaries at the dates indicated and
the combined balance sheets, statements of income, statements of
stockholders' equity and statements of cash flows of the Company and
its consolidated Subsidiaries for the periods specified; said financial
statements have been prepared in conformity with United States
generally accepted accounting principles ("GAAP") applied on a
consistent basis throughout the periods involved. The summary financial
information included in the Offering Memorandum presents fairly the
information shown therein and have been compiled on a basis consistent
with that of the audited financial statements included in the Offering
Memorandum. There are no pro forma financial statements and other pro
forma financial information (including the summary pro forma financial
information) of the Company, its Subsidiaries and entities acquired or
to be acquired by the Company or its Subsidiaries and the related notes
thereto which would be required to be included in the Offering
Memorandum if the Offering Memorandum were required to comply with the
requirements of the 1933 Act for a Form S-3 registration statement and
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