Exhibit 1.1
EXECUTION COPY
$250,000,000
THE PANTRY, INC.
7.75% Senior Subordinated Notes
due 2014
PURCHASE
AGREEMENT
February 13, 2004
C REDIT S UISSE F IRST B OSTON LLC
W ACHOVIA C APITAL M ARKETS ,
LLC
c/o Credit Suisse First Boston LLC
Eleven
Madison Avenue,
New
York, N.Y. 10010-3629
Dear Sirs and Madams:
1. Introductory. The Pantry,
Inc., a Delaware corporation (the “ Company ”),
proposes, subject to the terms and conditions stated herein, to
issue and sell to the several initial purchasers named in Schedule
A hereto (the “ Purchasers ”) U.S.$250,000,000
principal amount of its 7.75% Senior Subordinated Notes due 2014
(the “ Offered Securities ”). The Offered
Securities will be guaranteed by the existing and future domestic
subsidiaries of the Company (collectively, the “
Guarantors ”) pursuant to a guarantee (each, a “
Guarantee ”). The Offered Securities will be issued
under an indenture, dated as of February 19, 2004 (the “
Indenture ”), between the Company, the Guarantors and
Wachovia Bank, National Association, as Trustee. The United States
Securities Act of 1933 is herein referred to as the “
Securities Act .”
The holders of the Offered
Securities will be entitled to the benefits of a registration
rights agreement, dated the date hereof (the “
Registration Rights Agreement ”), between the Company
and the Purchasers, for so long as such Offered Securities
constitute “ Transfer Restricted Securities ”
(as defined in the Registration Rights Agreement). Pursuant to the
Registration Rights Agreement, the Company will agree to file with
the Securities and Exchange Commission (the “
Commission ”) under the circumstances set forth
therein, (i) a registration statement under the Securities Act (the
“ Exchange Offer Registration Statement ”)
relating to the Offered Securities in the same aggregate principal
amount as the Offered Securities originally issued under the
Indenture, identical in all material respects to the Offered
Securities and the Guarantees and registered under the Securities
Act (the “ Exchange Notes ” and the “
Exchange Guarantees ,” and together, the “
Exchange Securities ”) to be offered in exchange for
the Offered Securities (such offer to exchange being referred to as
the “ Exchange Offer ”) and (ii) a shelf
registration statement pursuant to Rule 415 under the Securities
Act (the “ Shelf Registration Statement ” and,
together with the Exchange Offer Registration Statement, the
“ Registration Statements ”) relating to the
resale by certain holders of the Offered Securities and to use all
commercially reasonable efforts to cause such Registration
Statements to be declared and remain effective and usable for the
periods specified in the Registration Rights Agreement and to
consummate the Exchange Offer.
The Company hereby agrees with the
several Purchasers as follows:
2. Representations and Warranties
of the Company. The Company represents and warrants to, and
agrees with, the several Purchasers that:
(a) A preliminary offering circular
and an offering circular relating to the Offered Securities to be
offered by the Purchasers have been prepared by the Company. Such
preliminary offering circular (the
“ Preliminary Offering
Circular ”) and offering circular (the “
Offering Circular ”), as supplemented as of the date
of this Agreement, are hereinafter collectively referred to as the
“ Offering Document ”. On the date of this
Agreement, the Offering Document does not include any untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. The
preceding sentence does not apply to statements in or omissions
from the Offering Document based upon written information furnished
to the Company by any Purchaser through Credit Suisse First Boston
LLC (“ CSFB ”) and/or Wachovia Capital Markets,
LLC (“ Wachovia ”) specifically for use therein,
it being understood and agreed that the only such information is
that described as such in Section 7(b) hereof. Except as disclosed
in the Offering Document, on the date of this Agreement, the
Company’s Annual Report on Form 10-K most recently filed with
the Securities and Exchange Commission (the “
Commission ”) and all subsequent reports
(collectively, the “ Exchange Act Reports ”)
which have been filed by the Company with the Commission or sent to
stockholders pursuant to the Securities Exchange Act of 1934 (the
“ Exchange Act ”) do not include any untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. Such
documents, when they were filed with the Commission, conformed in
all material respects to the requirements of the Exchange Act and
the rules and regulations of the Commission thereunder.
(b) The Company has been duly
incorporated and is an existing corporation in good standing under
the laws of the State of Delaware, with power and authority
(corporate and other) to own its properties and conduct its
business as described in the Offering Document; and the Company is
duly qualified to do business as a foreign corporation in good
standing in all other jurisdictions in which its ownership or lease
of property or the conduct of its business requires such
qualification, except where the failure to be so qualified or in
good standing would not result in a material adverse effect in the
condition (financial or otherwise), business, properties or results
of operations of the Company and its subsidiaries taken as a whole
(a “ Material Adverse Effect ”).
(c) Each subsidiary of the Company
has been duly incorporated and is an existing corporation in good
standing under the laws of the jurisdiction of its incorporation,
with power and authority (corporate and other) to own its
properties and conduct its business; and each subsidiary of the
Company is duly qualified to do business as a foreign corporation
in good standing in all other jurisdictions in which its ownership
or lease of property or the conduct of its business requires such
qualification, except where the failure to be so qualified or in
good standing individually or in the aggregate would not result in
a Material Adverse Effect; except as otherwise disclosed in the
Offering Document, all of the issued and outstanding capital stock
of each subsidiary of the Company has been duly authorized and
validly issued and is fully paid and nonassessable; and except as
otherwise disclosed in the Offering Document, the capital stock of
each subsidiary owned by the Company, directly or through
subsidiaries, is owned free from liens, encumbrances and defects
(except for restrictions on transfer imposed by federal or state
securities laws).
(d) The entities listed on Schedule
B hereto are the only subsidiaries, direct or indirect, of the
Company.
(e) The Indenture has been duly
authorized by the Company and each Guarantor; the Offered
Securities have been duly authorized by the Company; and when the
Offered Securities are delivered and paid for pursuant to this
Agreement on the Closing Date (as defined below), the Indenture
will have been duly executed and delivered, such Offered Securities
will have been duly executed, authenticated, issued and delivered
and will conform to the description thereof contained in the
Offering Document and the Indenture and such Offered Securities
will constitute valid and legally binding obligations of the
Company, enforceable against the Company in accordance with their
terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors’ rights and
to general equity principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law)
.
(f) The Guarantee to be endorsed on
the Offered Securities by each Guarantor has been duly authorized
by such Guarantor; and, when issued, will have been duly executed
and delivered by each such Guarantor and will conform to the
description thereof contained in the Offering Document. When the
Offered
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Securities have been duly issued,
executed, authenticated and delivered in accordance with the terms
of the Indenture, the Guarantee of each Guarantor will constitute a
valid and legally binding obligation of such Guarantor, enforceable
against such Guarantor in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors’ rights and to general equity principles
(regardless of whether such enforceability is considered in a
proceeding in equity or at law).
(g) Except as disclosed in the
Offering Document, there are no contracts, agreements or
understandings between the Company and any person that would give
rise to a valid claim against the Company or any Purchaser for a
brokerage commission, finder’s fee or other like payment in
connection with the transactions contemplated by this Agreement and
the Registration Rights Agreement.
(h) No consent, approval,
authorization, or order of, or filing with, any governmental agency
or body or any court is required for the consummation of the
transactions contemplated by this Agreement and the Registration
Rights Agreement in connection with the issuance and sale of the
Offered Securities by the Company 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 sale of the
Offered Securities by the Purchasers and (ii) with respect to the
Exchange Securities (as defined in the Registration Rights
Agreement) under the Securities Act, the Trust Indenture Act of
1939, as amended (“ Trust Indenture Act” ), and
applicable state securities laws as contemplated by the
Registration Rights Agreement.
(i) In consultation with legal
counsel, the Company has determined that neither the Company nor
any of its subsidiaries is in violation of its respective charter
or by-laws or in default in the performance of any obligation,
agreement, covenant or condition contained in any indenture, loan
agreement, mortgage, lease or other agreement or instrument that is
material to the Company and its subsidiaries, taken as a whole, to
which the Company or any of its subsidiaries is a party or by which
the Company or any of its subsidiaries or their respective property
is bound, except for such violations or defaults that would not
result in a Material Adverse Effect.
(j) The execution, delivery and
performance of the Indenture, this Agreement and the Registration
Rights Agreement by the Company and the Guarantors, as applicable,
and the issuance and sale of the Offered Securities and compliance
with the terms and provisions thereof will not result in a breach
or violation of any of the terms and provisions of, or constitute a
default under, any statute, any rule, regulation or order of any
governmental agency or body or any court, domestic or foreign,
having jurisdiction over the Company or any subsidiary of the
Company or any of their properties, or any agreement or instrument
to which the Company or any such subsidiary is a party or by which
the Company or any such subsidiary is bound or to which any of the
properties of the Company or any such subsidiary is subject, or the
charter or by-laws of the Company or any such subsidiary, except
for such breaches, violations or defaults that would not result in
a Material Adverse Effect, and the Company has full power and
authority to authorize, issue and sell the Offered Securities as
contemplated by this Agreement.
(k) This Agreement and the
Registration Rights Agreement have been duly authorized, executed
and delivered by the Company.
(l) Except as disclosed in the
Offering Document, the Company and its subsidiaries have good title
to all real properties and all other properties and assets owned by
them, in each case free from liens, encumbrances and defects that
would materially affect the value thereof or materially interfere
with the use made or to be made thereof by them; and except as
disclosed in the Offering Document, the Company and its
subsidiaries hold such leased real or personal property under valid
and enforceable leases with no exceptions that would materially
interfere with the use made or to be made thereof by them or
result, singly or in the aggregate, in a Material Adverse
Effect.
(m) The Company and its subsidiaries
possess adequate certificates, authorities or permits issued by
appropriate governmental agencies or bodies (collectively, “
Governmental Licenses ”) necessary to conduct the
business now operated by them, except where the failure to possess
such Governmental Licenses would not
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have a Material Adverse Effect and
have not received any notice of proceedings relating to the
revocation or modification of any such certificate, authority or
permit that, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a
Material Adverse Effect.
(n) No labor dispute with the
employees of the Company or any subsidiary exists or, to the
knowledge of the Company, is imminent that may be reasonably
expected to have a Material Adverse Effect.
(o) The Company and its subsidiaries
own, possess or can acquire on reasonable terms, adequate
trademarks, trade names and other rights to inventions, know-how,
patents, copyrights, confidential information and other
intellectual property (collectively, “ intellectual
property rights ”) necessary to conduct the business now
operated by them, or presently employed by them, except where the
failure to own, possess, or have the ability to acquire such
intellectual property rights would not result in a Material Adverse
Effect and have not received any notice of infringement of or
conflict with asserted rights of others with respect to any
intellectual property rights that, if determined adversely to the
Company or any of its subsidiaries, would individually or in the
aggregate have a Material Adverse Effect.
(p) Except as disclosed in the
Offering Document, neither the Company nor any of its subsidiaries
is in violation of any statute, any rule, regulation, decision or
order of any governmental agency or body or any court, domestic or
foreign, relating to the use, disposal or release of hazardous or
toxic substances or relating to the protection or restoration of
the environment or human exposure to hazardous or toxic substances
(collectively, “ environmental laws ”), owns or
operates any real property contaminated with any substance that is
subject to any environmental laws, is liable for any off-site
disposal or contamination pursuant to any environmental laws, or is
subject to any claim relating to any environmental laws, which
violation, contamination, liability or claim would individually or
in the aggregate have a Material Adverse Effect; and the Company is
not aware of any pending investigation which might lead to such a
claim.
(q) Except as disclosed in the
Offering Document, there are no pending actions, suits or
proceedings against or affecting the Company, any of its
subsidiaries or any of their respective properties that, if
determined adversely to the Company or any of its subsidiaries,
would individually or in the aggregate have a Material Adverse
Effect, or would materially and adversely affect the ability of the
Company or the Guarantors to perform their obligations under the
Indenture, this Agreement or the Registration Rights Agreement, as
applicable, or which are otherwise material in the context of the
sale of the Offered Securities; and, to the Company’s
knowledge, no such actions, suits or proceedings are threatened or
contemplated.
(r) The historical financial
statements of the Company and its subsidiaries included in the
Offering Document together with their related schedules and notes
present fairly the financial position of the Company and its
consolidated subsidiaries as of the dates shown and their
statements of operations and cash flows for the periods shown, and
such financial statements have been prepared in conformity with the
generally accepted accounting principles in the United States
applied on a consistent basis and the assumptions used in preparing
the pro forma financial statements included in the Offering
Document provide a reasonable basis for presenting the significant
effects directly attributable to the transactions or events
described therein, the related pro forma adjustments give
appropriate effect to those assumptions, and the pro forma columns
therein reflect the proper application of those adjustments to the
corresponding historical financial statement amounts. To the
Company’s knowledge, the financial statements of the Golden
Gallon Group together with their related schedules and notes
incorporated by reference in the Offering Document present fairly
the financial position of the Golden Gallon Group at the dates
shown, its statements of income and cash flows for the periods
shown and Royal Ahold’s stated invested equity in Golden
Gallon Group as of the date shown and such financial statements
have been prepared in conformity with the generally accepted
accounting principles in the United States applied on a consistent
basis.
(s) Except as disclosed in the
Offering Document, since the date of the latest audited financial
statements included in the Offering Document there has been no
Material Adverse Effect and, except as disclosed in or contemplated
by the Offering Document, there has been no dividend or
distribution of any kind declared, paid or made by the Company on
any class of its capital stock.
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(t) The Company is subject to the
reporting requirements of either Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 and files reports with the
Commission on the Electronic Data Gathering, Analysis, and
Retrieval (EDGAR) system.
(u) The Company is not an open-end
investment company, unit investment trust or face-amount
certificate company that is or is required to be registered under
Section 8 of the United States Investment Company Act of 1940 (the
“ Investment Company Act ”) ; and the Company is
not and, after giving effect to the offering and sale of the
Offered Securities and the application of the proceeds thereof as
described in the Offering Document, will not be an
“investment company” as defined in the Investment
Company Act.
(v) No securities of the same class
(within the meaning of Rule 144A(d)(3) under the Securities Act) as
the Offered Securities are listed on any national securities
exchange registered under Section 6 of the Exchange Act or quoted
in a U.S. automated inter-dealer quotation system.
(w) Neither the Company, nor any of
its affiliates, nor, assuming the accuracy of the Purchasers’
representations set forth in Section 4 hereof, any person acting on
the Company’s or its affiliates’ behalf (i) has, within
the six-month period prior to the date hereof, offered or sold in
the United States or to any U.S. person (as such terms are defined
in Regulation S under the Securities Act ( “Regulation
S” )) the Offered Securities, or any security of the same
class or series as the Offered Securities or (ii) has offered or
will offer or sell the Offered Securities (A) in the United States
by means of any form of general solicitation or general advertising
within the meaning of Rule 502(c) under the Securities Act or (B)
with respect to any such securities sold in reliance on Rule 903 of
Regulation S, by means of any directed selling efforts within the
meaning of Rule 902(c) of Regulation S. The Company, its affiliates
and any person acting on its or their behalf have complied and will
comply with the offering restrictions requirement of Regulation S.
The Company has not entered and will not enter into any contractual
arrangement with respect to the distribution of the Offered
Securities except for this Agreement.
(x) On the Closing Date, the
Indenture will conform in all material respects to the requirements
of the Trust Indenture Act and the rules and regulations of the
Commission applicable to an indenture which is qualified
thereunder.
(y) On the Closing Date, the
Exchange Securities (as defined in the Registration Rights
Agreement) will have been duly authorized by the Company; and when
the Exchange Securities are issued, executed, authenticated and
delivered in accordance with the terms of the Exchange Offer (as
defined in the Registration Rights Agreement) and the Indenture,
the Exchange Securities will be entitled to the benefits of the
Indenture and will be the valid and legally binding obligations of
the Company, enforceable in accordance with their terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors’ rights and to general equity principles
(regardless of whether such enforceability is considered in a
proceeding at law or in equity).
(z) The Guarantee to be endorsed on
the Exchange Securities by each Guarantor has been duly authorized
by such Guarantor; and, when duly issued, will have been duly
executed and delivered by each such Guarantor and will conform to
the description thereof contained in the Offering Document. When
the Exchange Securities have been issued, executed authenticated
and delivered in accordance with the terms of the Exchange Offer
and the Indenture, the Guarantee of each Guarantor endorsed thereon
will constitute valid and legally binding obligations of such
Guarantor, enforceable against such Guarantor in accordance with
its terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors’ rights and
to general equity principles (regardless of whether such
enforceability is considered in a proceeding at law or in
equity).
(aa) No “nationally recognized
statistical rating organization” as such term is defined for
purposes of Rule 436(g)(2) under the Securities Act (i) has imposed
(or has informed the Company or any Guarantor that it is
considering imposing) any condition (financial or otherwise) on the
Company’s or any Guarantor’s
5
retaining any rating assigned to the
Company or any Guarantor, any securities of the Company or any
Guarantor or (ii) has indicated to the Company or any Guarantor
that it is considering (a) the downgrading, suspension, or
withdrawal of, or any review for a possible change that does not
indicate the direction of the possible change in, any rating so
assigned or (b) any change in the outlook for any rating of the
Company, any Guarantor or any securities of the Company or any
Guarantor.
(bb) Assuming the accuracy of the
Purchasers’ representations set forth in Section 4 hereof, no
registration under the Securities Act of the Offered Securities or
the Guarantees is required for the sale of the Offered Securities
and the Guarantees to the Purchasers as contemplated hereby or for
the resale of the Notes by the Purchasers in the manner
contemplated by this Agreement, and it is not necessary to qualify
an indenture in respect of the Offered Securities under the United
States Trust Indenture Act.
(cc) The Company maintains and will
maintain disclosure controls and procedures (as defined as Rule
13a-14 of the Exchange Act) designed to ensure that information
required to be disclosed by the Company in the reports that it
files or submits under the Exchange Act is recorded, processed,
summarized and reported in accordance with the Exchange Act and the
rules and regulations thereunder. The Company has carried out and
will carry out evaluations, under the supervision and with the
participation of the Company’s management, of the
effectiveness of the design and operation of the Company’s
disclosure controls and procedures in accordance with Rule 13a-15
of the Exchange Act.
3. Purchase, Sale and Delivery of
Offered Securities. On the basis of the representations,
warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to sell
to the Purchasers, and the Purchasers agree, severally and not
jointly, to purchase from the Company, at a purchase price of
97.75% of the principal amount thereof plus accrued interest from
February 19, 2004 to the Closing Date (as hereinafter defined), the
respective principal amounts of Offered Securities set forth
opposite the names of the several Purchasers in Schedule A hereto.
The Company will not be obligated to deliver any of the securities
to be delivered hereunder except upon payment for all of the
securities to be purchased as provided herein.
The Company will deliver against
payment of the purchase price the Offered Securities to be offered
and sold by the Purchasers in reliance on Regulation S (the “
Regulation S Securities ”) in the form of one or more
permanent global Securities in registered form without interest
coupons (the “ Regulation S Global securities ”)
which will be deposited with the Trustee as custodian for The
Depository Trust Company (“ DTC ”) for the
respective accounts of the DTC participants for Morgan Guaranty
Trust Company of New York, Brussels office, as operator of the
Euroclear System (“ Euroclear ”), and
Clearstream Banking, société anonyme (“
Clearstream, Luxembourg ”) and registered in the name
of Cede & Co., as nominee for DTC. The Company will deliver
against payment of the purchase price the Offered Securities to be
purchased by each Purchaser hereunder and to be offered and sold by
each Purchaser in reliance on Rule 144A under the Securities Act
(the “ 144A Securities ”) in the form of one
permanent global security in definitive form without interest
coupons (the “ Restricted Global Securities ”)
deposited with the Trustee as custodian for DTC and registered in
the name of Cede & Co., as nominee for DTC. The Regulation S
Global Securities and the Restricted Global Securities shall be
assigned separate CUSIP numbers. The Restricted Global Securities
shall include the legend regarding restrictions on transfer set
forth under “Transfer Restrictions” in the Offering
Document. Until the termination of the distribution compliance
period (as defined in Regulation S) with respect to the offering of
the Offered Securities, interests in the Regulation S Global
Securities may only be held by the DTC participants for Euroclear
and Clearstream, Luxembourg. Interests in any permanent global
Securities will be held only in book-entry form through Euroclear,
Clearstream, Luxembourg or DTC, as the case may be, except in the
limited circumstances described in the Offering
Document.
Payment for the Regulation S
Securities and the 144A Securities shall be made by the Purchasers
in Federal (same day) funds by official check or checks or wire
transfer to the Company or as otherwise directed in writing by the
Company at the office of King & Spalding LLP at 10:00 A.M.,
(New York time), on February 19, 2004, or at such other time not
later than seven full business days thereafter as CSFB and the
Company determine, such time being herein referred to as the
“ Closing Date ,” against delivery to the
Trustee as custodian for DTC of (i) the Regulation S Global
Securities representing all of the Regulation S Securities for the
re
