Exhibit 1.2
THE PEP BOYS -- MANNY, MOE & XXXX
Debt Securities
UNDERWRITING AGREEMENT
1. Introductory. The Pep Boys -- Manny, Moe & Xxxx, a
Pennsylvania corporation (the "Company"), proposes to issue and sell from time
to time certain of its unsecured debt securities registered under the
registration statement referred to in Section 2(a) ("Registered Securities").
The Registered Securities will be issued under a Senior Indenture, dated as of
________, 19__ ("Senior Indenture"), between the Company and __________, as
Trustee or a Subordinated Indenture, dated as of _________, 19__ ("Subordinated
Indenture," and together with the Senior Indenture, the "Indentures"), between
the Company and _________, as Trustee, in one or more series, which series may
vary as to interest rates, maturities, redemption provisions, selling prices and
other terms, with all such terms for any particular series of the Registered
Securities being determined at the time of sale. Particular series of the
Registered Securities will be sold pursuant to a Terms Agreement referred to in
Section 3, for resale in accordance with terms of offering determined at the
time of sale.
The Registered Securities involved in any such offering are
hereinafter referred to as the "Offered Securities." The firm or firms which
agree to purchase the Offered Securities are hereinafter referred to as the
"Underwriters" of such securities, and the representative or representatives of
the Underwriters, if any, specified in a Terms Agreement referred to in Section
3 are hereinafter referred to as the "Representatives"; provided, however, that
if the Terms Agreement does not specify any representative of the Underwriters,
the term "Representatives", as used in this Agreement (other than in Sections
2(ii), 5(c) and 6 and the second sentence of Section 3), shall mean the
Underwriters.
2. Representations and Warranties of the Company. The Company,
as of the date of each Terms Agreement referred to in Section 3, represents and
warrants to, and agrees with, each Underwriter that:
(i) A registration statement on Form S-3 (No.
333-______), including a prospectus, relating to the Registered
Securities has been filed with the Securities and Exchange Commission
("Commission") and has become effective. Such registration statement,
as amended at the time of any Terms Agreement referred to in Section 3,
is hereinafter referred to as the "Registration Statement," and the
prospectus included in such Registration Statement, as supplemented as
contemplated by Section 3 to reflect the terms of the Offered
Securities and the terms of offering thereof, as first filed with the
Commission pursuant to and in accordance with Rule 424(b) ("Rule
424(b)") under the Securities Act of 1933 ("Act"), including all
material incorporated by reference therein, is hereinafter referred to
as the "Prospectus." No document has been or will be prepared or
distributed in reliance on Rule 434 under the Act.
(ii) On the effective date of the registration statement
relating to the Registered Securities, such registration statement
conformed in all material respects to the requirements of the Act, the
Trust Indenture Act of 1939 ("Trust Indenture Act") and the rules and
regulations of the Commission ("Rules and Regulations") and did not
include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading, and on the date of each Terms
Agreement referred to in Section 3 and on each Closing Date specified
therein, the Registration Statement and the Prospectus will conform in
all material respects to the requirements of the Act, the Trust
Indenture Act and the Rules and Regulations, and neither of such
documents includes, or will include, any untrue statement of a material
fact or omits, or will omit, to state any material fact required to be
stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, except
that the foregoing does not apply to statements in or omissions from
any of such documents based upon written information furnished to the
Company by any Underwriter through the Representatives, if any,
specifically for use therein, it being understood that the only such
information furnished by any Underwriter consists of the information
described as such in the Terms Agreement. No stop order suspending the
effectiveness of the Registration Statement or any part thereof has
been issued and no proceeding for that purpose has been instituted or,
to the Company's knowledge, threatened by the Commission.
(iii) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
Commonwealth of Pennsylvania, and has the corporate power and authority
to own, lease and operate its properties and to conduct its business as
described in the Prospectus; and the Company is duly qualified to
transact business and is in good standing in each jurisdiction in which
the conduct of its business or its ownership, leasing or operation of
property requires such qualification, except to the extent that the
failure to be so qualified or in good standing would not have a
material adverse effect on the Company and its subsidiaries, taken as a
whole.
(iv) Each "Significant Subsidiary" (as such term is
defined in Rule 405 of the Act, except that for purposes of this
Agreement, each reference in such Rule 405 definition to "10 percent"
shall be replaced with "5 percent") is listed on Schedule A hereto.
Each Significant Subsidiary of the Company has been duly incorporated
and is validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, has the corporate power
and authority to own, lease and operate its properties and to conduct
its business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in which
the conduct of its business or its ownership, leasing or operation of
property requires such qualification, except to the extent that the
failure to be so qualified or in good standing would not have a
material adverse effect on the Company and its subsidiaries, taken as a
whole. All of the outstanding capital stock of each Significant
Subsidiary has been duly authorized and validly issued and is fully
paid and non-assessable and is owned by the Company, directly or
through subsidiaries, free and clear of any mortgage, pledge, lien,
perfected security interest, claim or encumbrance of any kind or, to
the knowledge of the Company, any unperfected security interest.
(v) The Indentures have been duly authorized and have
been duly qualified under the Trust Indenture Act; the Offered
Securities have been duly authorized; and when the Offered Securities
are delivered and paid for pursuant to the Terms Agreement on the
Closing Date (as defined below) or pursuant to Delayed Delivery
Contracts (as hereinafter defined), the Indentures will have been duly
executed and delivered, such Offered Securities will have been duly
executed, authenticated, issued and delivered and will conform in all
material respects to the description thereof contained in the
Prospectus and the Indentures and such Offered Securities will
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constitute valid and legally binding obligations of the Company,
enforceable against the Company in accordance with their terms, except
to the extent that enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating
to creditors' rights generally and by general principles of equity.
(vi) No consent, approval or authorization, and no order,
registration or qualification of or with any natural person,
corporation, partnership, trust, firm, association or other entity,
whether acting in an individual, fiduciary or other capacity
("Person"), or any court or government agency or body, is required for
the consummation of the transactions contemplated by the Terms
Agreement (including the provisions of this Agreement) in connection
with the issuance and sale of the Offered Securities by the Company,
except such as have been obtained and made under the Act, the Trust
Indenture Act or the Rules and Regulations and such as may be required
under state securities laws in connection with the offer and sale of
the Offered Securities.
(vii) The execution, delivery and performance of the
Indentures, the Terms Agreement (including the provisions of this
Agreement) and any Delayed Delivery Contracts and the issuance and sale
of the Offered Securities and compliance with the terms and provisions
thereof will not (A) contravene any provision of the charter or by-laws
of the Company or any of its subsidiaries, or (B) conflict with or
result in a breach or violation of any of the terms and provisions of,
or constitute a default under, or result in the creation or imposition
of any lien, charge or encumbrance upon any assets or property of the
Company or any of its subsidiaries under, any statute, rule,
regulation, order or decree of any governmental agency or body or any
court having jurisdiction over the Company or any of its subsidiaries
or any of their properties or any indenture, mortgage, loan agreement,
note, lease, permit, license or other agreement or instrument to 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, except, in
the case of clause (B), as would not, singly or in the aggregate, have
a material adverse effect on the condition (financial or other),
business, prospects, results of operations or general affairs of the
Company and its subsidiaries, taken as a whole, or on the transactions
contemplated by the Terms Agreement (including the provisions of this
Agreement), the Indentures and any Delayed Delivery Contracts; and the
Company has full power and authority to authorize, issue and sell the
Offered Securities as contemplated by the Terms Agreement (including
the provisions of this Agreement).
(viii) The Terms Agreement (including the provisions of this
Agreement) and any Delayed Delivery Contracts have been duly
authorized, executed and delivered by the Company.
(ix) The Company and its Significant Subsidiaries have
good and marketable title to all properties (real and personal) owned
by the Company and its Significant Subsidiaries, free and clear of all
liens, claims, security interests or other encumbrances that are
material or that may interfere with the conduct of the business of the
Company and its subsidiaries, taken as a whole; all properties held
under lease or sublease by the Company and its Significant Subsidiaries
are held under valid, subsisting and enforceable leases or subleases
with such exceptions as are not material and do not interfere with the
use made or proposed to be made of such property by the Company and its
Significant Subsidiaries; neither the Company nor any of its
Significant Subsidiaries is in default under any such lease or
sublease, except for defaults which are not material and will not
interfere with the conduct of the business of the Company and its
subsidiaries, taken as a whole; and no material claim of any sort has
been asserted by anyone adverse to the rights of the Company or any
Significant Subsidiary under any such lease or sublease or affecting or
questioning the right of such entity to the continued possession of the
leased or subleased properties under any such lease or sublease.
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(x) The Company and its subsidiaries have such permits,
licenses, franchises, consents, approvals, authorizations and
clearances ("Licenses") and are in compliance with all applicable laws
and regulations of federal, state, local and foreign governmental or
regulatory authorities, as are necessary to own, lease or operate their
properties and to conduct their businesses in the manner described in
the Prospectus and all such Licenses are in full force and effect, in
each case except as would not, singly or in the aggregate, have a
material adverse effect on the condition (financial or other),
business, prospects, results of operations or general affairs of the
Company and its subsidiaries, taken as a whole.
(xi) No labor disturbance by the employees of the Company
exists, or to the knowledge of the Company, is threatened, that could,
singly or in the aggregate, have a material adverse effect on the
condition (financial or other), business, prospects, results of
operations or general affairs of the Company and its subsidiaries,
taken as a whole.
(xii) The Company and its subsidiaries own or possess all
the patents, trademarks, service marks, trade names, copyrights,
licenses and rights with respect thereto (collectively, "Intellectual
Property") necessary for the conduct of their businesses as described
in the Prospectus, except where the failure to own or possess the same
would not, singly or in the aggregate, have a material adverse effect
on the condition (financial or other), business, prospects, results of
operations or general affairs of the Company and its subsidiaries,
taken as a whole; and to the knowledge of the Company and its
subsidiaries, no conflict with the rights of others exists with respect
to any such Intellectual Property.
(xiii) The properties, assets and operations of the Company
and its subsidiaries are in compliance in all material respects with
all applicable federal, state, local and foreign laws, rules and
regulations, orders, decrees, judgments, permits and licenses relating
to public and worker health and safety and to the protection and
clean-up of the natural environment and activities or conditions
related thereto, including, without limitation, those relating to the
generation, handling, disposal, transportation or release of hazardous
materials (collectively, "Environmental Laws"). With respect to such
properties, assets and operations, including any previously owned,
leased or operated properties, assets or operations there are no past,
present or, to the knowledge of the Company or any of its subsidiaries,
reasonably anticipated future events, conditions, circumstances,
activities, practices, incidents, actions or plans of the Company or
any of its subsidiaries that may interfere with or prevent compliance
or continued compliance with applicable Environmental Laws in any
material respect. Neither the Company nor any of its subsidiaries is
the subject of any federal, state, local or foreign investigation, and
neither the Company nor any of its subsidiaries has received any notice
or claim (or is aware of any facts that would form a reasonable basis
for any claim), or entered into any negotiations or agreements with any
third party relating to any liability or remedial action or potential
liability or remedial action under Environmental Laws, nor are there
any pending, reasonably anticipated or, to the best knowledge of the
Company or any of its subsidiaries, threatened actions, suits or
proceedings against or affecting the Company, any of its subsidiaries
or their properties, assets or operations, in connection with any such
Environmental Laws. The term "hazardous materials" shall mean those
substances that are regulated by or form the basis for liability under
any applicable Environmental Laws.
(xiv) (A) Neither the Company nor any of its Significant
Subsidiaries is in violation of its charter or by-laws, (B) neither the
Company nor any of its subsidiaries is in violation of any applicable
law, ordinance, administrative or governmental rule or regulation, or
any order of any court or governmental agency or body having
jurisdiction over the Company or any subsidiary and (C) no event of
default or event that, but for the giving of notice or the lapse of
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time or both, would constitute an event of default exists, or upon the
use of proceeds from the sale of the Securities in the manner
contemplated by the Prospectus or upon the consummation of the other
transactions contemplated by the Prospectus will exist, under any
agreement or instrument for borrowed money, any guarantee of any
agreement or instrument for borrowed money or any lease, permit,
license or other agreement or instrument to which the Company or any of
its subsidiaries is a party or to which any of the properties or assets
of the Company or any such subsidiary is subject, except, in the case
of clauses (B) and (C), for such violations and defaults that would
not, singly or in the aggregate, have a material adverse effect on the
condition (financial or other), business, prospects, results of
operations or general affairs of the Company and its subsidiaries,
taken as a whole.
(xv) There are no pending actions, suits or proceedings
against or affecting the Company, any of its subsidiaries or any of
their properties that are required under the Act to be described in the
Registration Statement and the Prospectus (other than as described
therein) or that could, singly or in the aggregate, have a material
adverse effect on the condition (financial or other), business,
prospects, results of operations or general affairs of the Company and
its subsidiaries, taken as a whole, or could have a material adverse
effect on the ability of the Company to perform its obligations under
the Indentures, the Terms Agreement (including the provisions of this
Agreement) or any Delayed Delivery Contracts, or that 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.
(xvi) The financial statements and related schedules and
notes included or incorporated by reference in the Registration
Statement and the Prospectus comply, in all material respects, with the
requirements of the Act and the Rules and Regulations, were prepared in
accordance with generally accepted accounting principles consistently
applied throughout the periods involved and fairly present the
financial condition and results of operations of the Company and its
subsidiaries, on a consolidated basis, at the dates and for the periods
presented. If financial information or statistical data are included in
the Prospectus under the captions "Selected Financial Data" and
"Capitalization" or similar captions, such data are fairly stated in
all material respects in relation to the consolidated financial
statements of the Company from which they have been derived. If pro
forma financial statements are included in the Prospectus: the
assumptions used in preparing the pro forma financial statements
included in the Prospectus 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.
(xvii) Since the dates as of which information is given in
the Prospectus, (A) neither the Company nor its subsidiaries has
incurred any material liability or obligation (indirect, direct or
contingent) or entered into any material verbal or written agreement or
other transaction that is not in the ordinary course of business or
that could result in a material reduction in the future earnings of the
Company; (B) neither the Company nor its subsidiaries has sustained any
material loss or interference with its business or properties from
fire, flood, windstorm, accident or other calamity (whether or not
covered by insurance); (C) there has been no change in the indebtedness
of the Company and, except as contemplated by the Prospectus, no change
in the capital stock of the Company and no dividend or distribution of
any kind declared, paid or made by the Company on any class of its
capital stock; and (D) there has been no material adverse change, nor
any development reasonably likely to result in a material adverse
change, in the condition (financial or other), business, prospects,
results of operations or general affairs of the Company and its
subsidiaries, taken as a whole.
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(xviii) The Company and its Significant Subsidiaries carry or
are entitled to the benefits of insurance, including, without
limitation, product liability and business interruption insurance, in
such amounts and covering such risks as the Company reasonably believes
is generally maintained by companies of established repute engaged in
the same or similar business, and all such insurance is in full force
and effect.
(xix) The Company and its subsidiaries have filed all
federal, state, local and foreign tax returns required to be filed,
such returns are complete and correct in all material respects, and all
taxes shown by such returns or otherwise assessed or due and payable
have been paid, except such taxes as are being contested in good faith
and as to which adequate reserves have been provided. The charges,
accruals and reserves on the books of the Company and its subsidiaries
in respect of any tax liability for any year not finally determined are
adequate to meet any assessments or reassessments for additional taxes,
and there has been no tax deficiency asserted and, to the knowledge of
the Company and its subsidiaries, no tax deficiency might be asserted
against the Company or any of its subsidiaries, except for such
inadequacies or deficiencies that could not, singly or in the
aggregate, have a material adverse effect on the condition (financial
or other), business, prospects, results of operations or general
affairs of the Company and its subsidiaries, taken as a whole.
(xx) 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 Prospectus, will not be an
"investment company" as defined in the Investment Company Act of 1940.
3. Purchase and Offering of Offered Securities. The obligation
of the Underwriters to purchase the Offered Securities will be evidenced by an
agreement or exchange of other written communications ("Terms Agreement") at the
time the Company determines to sell the Offered Securities. The Terms Agreement
will incorporate by reference the provisions of this Agreement, except as
otherwise provided therein, and will specify the firm or firms which will be
Underwriters, the names of any Representatives, the principal amount to be
purchased by each Underwriter, the purchase price to be paid by the Underwriters
and the terms of the Offered Securities not already specified in the Indentures,
including, but not limited to, interest rate, maturity, any redemption
provisions and any sinking fund requirements and whether any of the Offered
Securities may be sold to institutional investors pursuant to Delayed Delivery
Contracts (as defined below). The Terms Agreement will also specify the time and
date of delivery and payment (such time and date, or such other time not later
than seven full business days thereafter as the Underwriter first named in the
Terms Agreement (the "Lead Underwriter") and the Company agree as the time for
payment and delivery, being herein and in the Terms Agreement referred to as the
"Closing Date"), the place of delivery and payment and any details of the terms
of offering that should be reflected in the prospectus supplement relating to
the offering of the Offered Securities. For purposes of Rule 15c6-1 under the
Securities Exchange Act of 1934, the Closing Date (if later than the otherwise
applicable settlement date) shall be the date for payment of funds and delivery
of securities for all the Offered Securities sold pursuant to the offering,
other than Contract Securities (as hereinafter defined) for which payment of
funds and delivery of securities shall be as hereinafter provided. The
obligations of the Underwriters to purchase the Offered Securities will be
several and not joint. It is understood that the Underwriters propose to offer
the Offered Securities for sale as set forth in the Prospectus.
If the Terms Agreement provides for sales of Offered
Securities pursuant to delayed delivery contracts, the Company authorizes the
Underwriters to solicit offers to purchase Offered Securities pursuant to
delayed delivery contracts substantially in the form of Annex I attached hereto
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("Delayed Delivery Contracts") with such changes therein as the Company may
authorize or approve. Delayed Delivery Contracts are to be with institutional
investors, including commercial and savings banks, insurance companies, pension
funds, investment companies and educational and charitable institutions. On the
Closing Date the Company will pay, as compensation, to the Representatives for
the accounts of the Underwriters, the fee set forth in such Terms Agreement in
respect of the principal amount of Offered Securities to be sold pursuant to
Delayed Delivery Contracts ("Contract Securities"). The Underwriters will not
have any responsibility in respect of the validity or the performance of Delayed
Delivery Contracts. If the Company executes and delivers Delayed Delivery
Contracts, the Contract Securities will be deducted from the Offered Securities
to be purchased by the several Underwriters and the aggregate principal amount
of Offered Securities to be purchased by each Underwriter will be reduced pro
rata in proportion to the principal amount of Offered Securities set forth
opposite each Underwriter's name in such Terms Agreement, except to the extent
that the Lead Underwriter determines that such reduction shall be otherwise than
pro rata and so advise the Company. The Company will advise the Lead Underwriter
not later than the business day prior to the Closing Date of the principal
amount of Contract Securities.
If the Terms Agreement specifies "Book-Entry Only" settlement
or otherwise states that the provisions of this paragraph shall apply, the
Company will deliver against payment of the purchase price the Offered
Securities in the form of one or more permanent global securities in definitive
form (the "Global Securities") deposited with the Trustee as custodian for The
Depository Trust Company ("DTC") and registered in the name of Cede & Co., as
nominee for DTC. Interests in any permanent global securities will be held only
in book-entry form through DTC, except in the limited circumstances described in
the Prospectus. Payment for the Offered Securities shall be made by the
Underwriters in Federal (same day) funds by official check or checks or wire
transfer to an account previously designated to the Lead Underwriter by the
Company at a bank acceptable to the Lead Underwriter, in each case drawn to the
order of the Company at the place of payment specified in the Terms Agreement on
the Closing Date, against delivery to the Trustee as custodian for DTC of the
Global Securities representing all of the Offered Securities.
4. Certain Agreements of the Company. The Company agrees with
the several Underwriters that it will furnish to counsel for the Underwriters,
one signed copy of the registration statement relating to the Registered
Securities, including all exhibits, in the form it became effective and of all
amendments thereto and that, in connection with each offering of Offered
Securities:
(a) The Company will file the Prospectus with the Commission
pursuant to and in accordance with Rule 424(b)(2) (or, if applicable
and if consented to by the Lead Underwriter, subparagraph (5)) not
later than the second business day following the execution and delivery
of the Terms Agreement.
(b) The Company will advise the Lead Underwriter promptly of
any proposal to amend or supplement the Registration Statement or the
Prospectus and will afford the Lead Underwriter a reasonable
opportunity to comment on any such proposed amendment or supplement;
and the Company will also advise the Lead Underwriter promptly of the
filing of any such amendment or supplement and of the institution by
the Commission of any stop order proceedings in respect of the
Registration Statement or of any part thereof and will use its best
efforts to prevent the issuance of any such stop order and to obtain as
soon as possible its lifting, if issued.
(c) If, at any time when a prospectus relating to the Offered
Securities is required to be delivered under the Act in connection with
sales by any Underwriter or dealer, any event occurs or a condition
exists as a result of which it is necessary, in the reasonable opinion
of counsel to the Underwriters or counsel to the Company, to amend the
Registration Statement or amend or supplement the Prospectus in order
that the Prospectus would not include an untrue statement of a material
fact or omit to state any material fact necessary to make the
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statements therein, in the light of the circumstances under which they
were made, not misleading, or if it is necessary, in the reasonable
opinion of either such counsel, at any time to amend the Registration
Statement or amend or supplement the Prospectus to comply with the Act,
the Company will promptly notify the Lead Underwriter of such event and
will promptly prepare and file with the Commission an amendment or
supplement that will correct such statement or omission or an amendment
that will effect such compliance. Neither the Lead Underwriter's
consent to, nor the Underwriters' delivery of, any such amendment or
supplement shall constitute a waiver of any of the conditions set forth
in Section 5 of this Agreement.
(d) As soon as practicable, but not later than 16 months after
the date of each Terms Agreement, the Company will make generally
available to its securityholders an earnings statement covering a
period of at least 12 months beginning after the later of (i) the
effective date of the registration statement relating to the Registered
Securities, (ii) the effective date of the most recent post-effective
amendment to the Registration Statement to become effective prior to
the date of such Terms Agreement and (iii) the date of the Company's
most recent Annual Report on Form 10-K filed with the Commission prior
to the date of such Terms Agreement, which will satisfy the provisions
of Section 11(a) of the Act.
(e) The Company will furnish to the Representatives copies of
the Registration Statement (at least two of which will be signed and
will include all exhibits and a signed accountant's report of Deloitte
& Touche), each related preliminary prospectus, the Prospectus and all
amendments and supplements to such documents, in each case as soon as
available and in such quantities as the Lead Underwriters reasonably
requests.
(f) The Company will arrange for the qualification of the
Offered Securities for sale and the determination of their eligibility
for investment under the laws of such jurisdictions as the Lead
Underwriter designates and will continue such qualifications in effect
so long as required for the distribution thereof.
(g) During the period of five years after the date of any
Terms Agreement, the Company will furnish to the Representatives and,
upon request, to each of the other Underwriters, if any, as soon as
practicable after the end of each fiscal year, a copy of its annual
report to stockholders for such year; and the Company will furnish to
the Representatives (i) as soon as available, a copy of each report or
definitive proxy statement of the Company filed with the Commission
under the Securities Exchange Act of 1934, as amended, or mailed to
stockholders and (ii) from time to time, such other information
concerning the Company as the Lead Underwriter may reasonably request.
(h) The Company agrees with the Underwriters that the Company
will pay all expenses incident to the performance of its obligations
under the Terms Agreement (including the provisions of this Agreement),
and will reimburse the Underwriters for any expenses (including
reasonable fees and disbursements of counsel) incurred by them in
connection with the qualification of the Registered Securities for sale
and determination of their eligibility for investment under the laws of
such jurisdictions as the Lead Underwriter designates and the printing
of memoranda relating thereto, for the filing fee of and the related
reasonable fees and expenses of counsel for the Underwriters in
connection with any filings required to be made with the National
Association of Securities Dealers, Inc. relating to the Registered
Securities, any fees charged by investment rating agencies for the
rating of the Offered Securities and for expenses incurred in printing
and distributing the Registration Statement, preliminary prospectuses
and the Prospectus (including any amendments and supplements thereto)
or related documents.
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(i) The Company will not offer, sell, contract to sell, pledge
or otherwise dispose of, directly or indirectly, or file with the
Commission a registration statement under the Act relating to United
States dollar-denominated debt securities issued or guaranteed by the
Company and having a maturity of more than one year from the date of
issue, or publicly disclose the intention to make any such offer, sale,
pledge, disposition or filing, without the prior written consent of the
Lead Underwriter for a period beginning at the time of execution of the
Terms Agreement and ending the number of days after the Closing Date
specified under "Blackout" in the Terms Agreement.
5. Conditions of the Obligations of the Underwriters. The
obligations of the several Underwriters to purchase and pay for the Offered
Securities will be subject to the accuracy of the representations and warranties
on the part of the Company herein, to the accuracy of the statements of Company
officers made pursuant to the provisions hereof, to the performance by the
Company of its obligations hereunder and to the following additional conditions
precedent:
(a) On or prior to the date of the Terms Agreement, the
Representatives shall have received a letter, dated the date of
delivery thereof, of Deloitte & Touche LLP confirming that they are
independent public accountants within the meaning of the Act and the
applicable published Rules and Regulations thereunder and stating in
effect that:
(i) in their opinion the financial statements and
schedules examined by them and included or incorporated by
reference in the Prospectus comply as to form in all material
respects with the applicable accounting requirements of the
Act and the related published Rules and Regulations;
(ii) they have made a review of the unaudited
financial statements included or incorporated by reference in
the Prospectus in accordance with standards established by the
American Institute of Certified Public Accountants, as
indicated in their report attached to such letter;
(iii) on the basis of the review referred to in
clause (ii) above, a reading of the latest available interim
financial statements of the Company, a reading of the minutes
of all meetings of the stockholders and directors (including
each committee thereof) of the Company and its subsidiaries,
inquiries of officials of the Company who have responsibility
for financial and accounting matters and other specified
procedures, nothing came to their attention that caused them
to believe that:
(A) the unaudited financial statements
included or incorporated by reference in the
Prospectus do not comply as to form in all material
respects with the applicable accounting requirements
of the Act and the related published Rules and
Regulations or are not in conformity with generally
accepted accounting principles applied on a basis
substantially consistent with that of the audited
financial statements included or incorporated by
reference in the Prospectus;
(B) if any unaudited "capsule" information
is contained in the Prospectus, the unaudited
consolidated net sales, net operating income, net
income and net income per share amounts or other
amounts constituting such "capsule" information and
described in such letter do not agree with the
corresponding amounts set forth in the unaudited
consolidated financial statements or were not
determined on a basis substantially consistent with
that of the corresponding amounts in the audited
statements of income;
9
(C) at the date of the latest available
balance sheet read by such accountants, and at a
subsequent specified date not more than three
business days prior to the date of such letter, there
was any decrease in stockholders' equity or change in
the capital stock or any increase in short-term
indebtedness or long-term debt of the Company and its
consolidated subsidiaries or, at the date of the
latest available balance sheet read by such
accountants, there was any decrease in consolidated
net current assets or total assets, as compared with
amounts shown on the latest balance sheet included in
the Prospectus; or
(D) for the period from the closing date of
the latest income statement included or incorporated
by reference in the Prospectus to the closing date of
the latest available income statement read by such
accountants there were any decreases, as compared
with the corresponding period of the previous year
and with the period of corresponding length ended the
date of the latest income statement included or
incorporated by reference in the Prospectus, in
merchandise sales, service revenue, total gross
profit or operating profit or in the total or per
share amounts of net earnings, or any increases or
decreases, as the case may be, in other items
specified by the Underwriters;
except in all cases set forth in clauses (C) and (D) above for changes,
increases or decreases which the Prospectus discloses have occurred or
may occur or which are described in such letter;
(iv) they have compared specified dollar amounts (or
percentages derived from such dollar amounts), numerical data
and other financial information contained in the Prospectus
(in each case to the extent that such dollar amounts,
percentages, numerical data and other financial information
are derived from the general accounting records of the Company
and its subsidiaries subject to the internal controls of the
Company's accounting system or are derived directly from such
records by analysis or computation) with the results obtained
from inquiries, a reading of such general accounting records
and other procedures specified in such letter and have found
such dollar amounts, percentages, numerical data and other
financial information to be in agreement with such results.
All financial statements and schedules included in material
incorporated by reference into the Prospectus shall be deemed included in the
Prospectus for purposes of this subsection.
(b) The Prospectus shall have been filed with the Commission
in accordance with the Rules and Regulations and Section 4(a) of this
Agreement. No stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued and
no proceedings for that purpose shall have been instituted or, to the
knowledge of the Company or any Underwriter, shall be contemplated by
the Commission.
(c) Subsequent to the execution of the Terms Agreement, there
shall not have occurred (i) any change, or any development involving a
prospective change, in or affecting particularly the business or
properties of the Company or any of its subsidiaries that, in the
judgment of a majority in interest of the Underwriters including any
Representatives, materially impairs the investment quality of the
Offered Securities; (ii) any downgrading in the rating of any debt
securities of the Company by any "nationally recognized statistical
rating organization" (as defined for purposes of Rule 436(g) under the
Act), or any public announcement that any such organization has under
10
surveillance or review its rating of any debt securities of the Company
(other than an announcement with positive implications of a possible
upgrading, and no implications of a possible downgrading, of such
rating); (iii) any suspension or limitation of trading in securities
generally on the New York Stock Exchange, or any setting of minimum
prices for trading on such exchange, or any suspension of trading of
any securities of the Company on any exchange or in the
over-the-counter market; (iv) any banking moratorium declared by U.S.
Federal or New York authorities; or (v) any outbreak or escalation of
major hostilities in which the United States is involved, any
declaration of war by Congress or any other substantial national or
international calamity or emergency if, in the judgment of a majority
in interest of the Underwriters including any Representatives, the
effect of any such outbreak, escalation, declaration, calamity or
emergency makes it impractical or inadvisable to proceed with
completion of the sale of and payment for the Offered Securities.
(d) The Representatives shall have received an opinion, dated
the Closing Date, of Xxxxxxx Xxxx & Xxxxxxxxx, counsel for the Company,
to the effect that:
(i) Each of the Company and its Significant Subsidiaries
has been duly incorporated and is a validly existing
corporation in good standing under the laws of the
jurisdiction of its incorporation, with corporate
power and authority to own, lease and operate its
properties and conduct its business as described in
the Prospectus; and each of the Company and its
Significant Subsidiaries is duly qualified to
transact business as a foreign corporation in good
standing in all other jurisdictions in which it owns,
leases or operates property or in which the conduct
of its business requires such qualification, except
to the extent that the failure to be so qualified or
in good standing would not have a material adverse
effect on the Company and its subsidiaries, taken as
a whole; and all of the outstanding shares of capital
stock of the Company's Significant Subsidiaries have
been duly authorized and validly issued, are fully
paid and non-assessable and are owned by the Company,
directly or through subsidiaries, free and clear, to
the knowledge of such counsel after reasonable
inquiry, of any mortgage, pledge, lien, claim,
security interest or other encumbrance.
(ii) The Indentures have been duly authorized, executed
and delivered by the Company and have been duly
qualified under the Trust Indenture Act; the Offered
Securities have been duly authorized; the Offered
Securities other than any Contract Securities have
been duly executed and (assuming they have been
authenticated in accordance with the terms of the
Indentures) issued and delivered; the Indentures and
the Offered Securities other than any Contract
Securities constitute, and any Contract Securities,
when executed, authenticated, issued and delivered in
the manner provided in the Indentures and sold
pursuant to Delayed Delivery Contracts, will
constitute, 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;
and the Offered Securities other than any Contract
Securities conform, and any Contract Securities, when
so issued and delivered and sold will conform, in all
material respects, to the description thereof
contained in the Prospectus.
(iii) No consent, approval or authorization, and no order,
registration or qualification of or with any Person
or any court or governmental agency or body is
required for the consummation of the transactions
11
contemplated by the Terms Agreement (including the
provisions of this Agreement) in connection with the
issuance or sale of the Offered Securities by the
Company, except such as have been obtained and made
under the Act, the Trust Indenture Act or the Rules
and Regulations and such as may be required under
state securities laws.
(iv) The execution, delivery and performance of the
Indentures, the Terms Agreement (including the
provisions of this Agreement) and any Delayed
Delivery Contracts and the issuance and sale of the
Offered Securities and compliance with the terms and
provisions thereof have been duly authorized by all
necessary corporate action on the part of the Company
and its subsidiaries and will not (A) contravene any
provision of the charter or by- laws of the Company
or any of its subsidiaries, or (B) conflict with or
result in a breach or violation of any of the terms
and provisions of, or constitute a default under, or
result in the creation or imposition or encumbrance
upon any assets or property of the Company or any of
its subsidiaries under, any statute, rule,
regulation, order or decree of any governmental
agency or body or any court having jurisdiction over
the Company or any of its subsidiaries or any of
their properties, or any indenture, mortgage, loan
agreement, note, lease, permit, license or other
agreement or instrument known to such counsel after
reasonable inquiry to 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,
except, in the case of clause (B), as would not,
singly or in the aggregate, have a material adverse
effect on the condition (financial or other),
business, prospects, results of operations or general
affairs of the Company and its subsidiaries, taken as
a whole, or on the transactions contemplated by the
Terms Agreement (including the provisions of this
Agreement) and the Indentures; and the Company has
full power and authority to authorize, issue and sell
the Offered Securities as contemplated by the Terms
Agreement (including the provisions of this
Agreement).
(v) Neither the Company nor any of its Significant
Subsidiaries is in violation of its charter or
by-laws or, to the knowledge of such counsel after
reasonable inquiry, any applicable law, ordinance,
administrative or governmental rule or regulation, or
any order of any court or governmental agency or body
having jurisdiction over the Company or any
Significant Subsidiary or, to the knowledge of such
counsel after reasonable inquiry, in default in the
performance or observance of any material obligation,
agreement or condition in any agreement or instrument
to which the Company or any of its Significant
Subsidiaries is a party or to which any of the
properties or assets of the Company or any such
Significant Subsidiary is subject.
(vi) To the knowledge of such counsel after reasonable
inquiry, there are no pending or threatened actions,
suits or proceedings against or affecting the
Company, any of the subsidiaries or any of their
properties that are required under the Act to be
described in the Registration Statement and the
Prospectus (other than as described therein) or that
could have a material effect on the ability of the
Company to perform its obligations under the Terms
Agreement (including the provisions of this
Agreement), the Indentures or the Offered Securities,
or that are otherwise material in the context of the
sale of the Offered Securities.
12
(vii) To the knowledge of such counsel after reasonable
inquiry, there are no contracts, agreements or
understandings between the Company and any third
party granting such third party the right to require
the Company to file a registration statement under
the Act with respect to any securities of the Company
owned or to be owned by such third party or to
require the Company to include such securities in the
securities registered pursuant to the Registration
Statement or in any other securities being registered
pursuant to any other registration statement filed by
the Company under the Act.
(viii) The Registration Statement has become effective under
the Act as of the date and time specified in such
opinion, the Prospectus either was filed with the
Commission pursuant to the subparagraph of Rule
424(b) specified in such opinion on the date
specified therein and, to the knowledge of such
counsel after reasonable inquiry, no stop order
suspending the effectiveness of the Registration
Statement or any part thereof has been issued and no
proceedings for that purpose have been instituted or
are pending or contemplated under the Act.
(ix) The registration statement relating to the Registered
Securities, as of its effective date, the
Registration Statement and the Prospectus, as of the
date of the Terms Agreement, and any amendment or
supplement thereto, as of its date, complied as to
form in all material respects with the requirements
of the Act, the Trust Indenture Act and the Rules and
Regulations.
(x) The descriptions in the Registration Statement and
Prospectus of statutes, legal and governmental
proceedings and contracts and other documents are
accurate and fairly present the information required
to be shown; and such counsel do not know of any
legal or governmental proceedings required to be
described in the Prospectus which are not described
as required or of any contracts of documents of a
character required to be described in the
Registration Statement or Prospectus or to be filed
as exhibits to the Registration Statement which are
not described and filed as required; it being
understood that such counsel need express no opinion
as to the financial statements or other financial
data contained in the Registration Statement or the
Prospectus.
(xi) The Terms Agreement (including the provisions of this
Agreement) and any Delayed Delivery Contracts have
been duly authorized, executed and delivered by the
Company.
Such counsel shall also state that such counsel have
no reason to believe that the registration statement
relating to the Registered Securities, as of its
effective date, the Registration Statement as of the
date of the Terms Agreement or as of the Closing Date
contained an untrue statement of a material fact or
omitted to state any material fact required to be
stated therein or necessary to make the statements
therein not misleading, or that the Prospectus as of
the date of the Terms Agreement or as of the Closing
Date, or any amendment or supplement thereto, as of
its date or as of the Closing Date, contained any
untrue statement of a material fact or omitted to
state a material fact required to be stated in the
Prospectus or necessary in order to make the
statements therein, in light of the circumstances
under which they were made, not misleading; it being
understood that such counsel need express no view as
to the financial statements or other financial data
contained in the Registration Statement or the
Prospectus.
13
(e) The Representatives shall have received from Xxxxx
Xxxxxxxxxx LLP, counsel for the Underwriters, such opinion or opinions,
dated the Closing Date, with respect to the validity of the Offered
Securities, the Registration Statement, the Prospectus and other
related matters as the Representatives may require, and the Company
shall have furnished to such counsel such documents or certificates as
they reasonably request for the purpose of enabling them to pass upon
such matters.
(f) The Representatives shall have received a certificate,
dated the Closing Date, of the President and the principal financial
officer of the Company in which such officers, to the best of their
knowledge after reasonable investigation, shall state that (A) the
representations and warranties of the Company in this Agreement are
true and correct, (B) the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied
hereunder at or prior to the Closing Date, (C) no stop order suspending
the effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or are contemplated
by the Commission and (D) subsequent to the date as of which
information is given in the Registration Statement and the Prospectus,
there has been no material adverse change, nor any development
reasonably likely, singly or in the aggregate, to result in a material
adverse change, in the condition (financial or other), business,
prospects, results of operations or general affairs of the Company and
its subsidiaries, taken as a whole.
(g) The Representatives shall have received a letter, dated
the Closing Date, of Deloitte & Touche LLP that meets the requirements
of subsection (a) of this Section, except that the specified date
referred to in such subsection will be a date not more than three
business days prior to the Closing Date for the purposes of this
subsection.
All such opinions, certificates, letters and other documents
will be in compliance with the provisions hereof only if they are reasonably
satisfactory in form and substance to the Representatives and counsel for the
Underwriters. The Company will furnish the Representatives with such conformed
copies of such opinions, certificates, letters and documents as the
Representatives reasonably requests. The Lead Underwriter may in its sole
discretion waive on behalf of the Underwriters compliance with any conditions to
the obligations of the Underwriters under this Agreement and the Terms
Agreement.
6. Indemnification and Contribution. (a) The Company will
indemnify and hold harmless each Underwriter against any losses, claims, damages
or liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus or preliminary prospectus
supplement, or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, and will reimburse each Underwriter
for any legal or other expenses reasonably incurred by such Underwriter in
connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred; provided, however, that the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement in or omission or alleged omission from any of such
documents in reliance upon and in conformity with written information furnished
to the Company by any Underwriter through the Representatives specifically for
use therein, it being understood and agreed that the only such information
14
furnished by any Underwriter consists of the information described as such in
the Terms Agreement; and provided, further, that with respect to any untrue
statement or omission or alleged untrue statement or omission made in any
preliminary prospectus or preliminary prospectus supplement, the indemnity
agreement contained in this subsection (a) shall not inure to the benefit of any
Underwriter to the extent that any such loss, claim, damage or liability of such
Underwriter results from the fact that there was not sent or given to such
person, if required by law, at or prior to the written confirmation of the sale
of such Securities to the person asserting any such loss, claim, damage or
liability, a copy of the Prospectus (exclusive of material incorporated by
reference therein) if the Company had previously furnished copies thereof in
requisite quantities to such Underwriter.
(b) Each Underwriter will severally and not jointly indemnify and hold
harmless the Company against any losses, claims, damages or liabilities to which
the Company may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, the Prospectus, or any
amendment or supplement thereto, or any related preliminary prospectus or
preliminary prospectus supplement, or arise out of or are based upon the
omission or the alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Company by such
Underwriter through the Representatives specifically for use therein, and will
reimburse any legal or other expenses reasonably incurred by the Company in
connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred, it being understood and
agreed that the only such information furnished by any Underwriter consists of
the information described as such in the Terms Agreement.
(c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying party under
subsection (a) or (b) above, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
under subsection (a) or (b) above, except to the extent that the omission so to
notify the indemnifying party actually prejudices the indemnifying party's
ability to defend the action. In case any such action is brought against any
indemnified party and it notifies an indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may wish, to assume the defense thereof, with counsel
satisfactory to such indemnified party (who shall not, except with the consent
of the indemnified party, be counsel to the indemnifying party), and after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party will not be liable to such
indemnified party under this Section for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened action in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party unless such settlement includes an
unconditional release of such indemnified party from all liability on any claims
that are the subject matter of such action.
(d) If the indemnification provided for in this Section is unavailable
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above, then the indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company on the
one hand and the Underwriters on the other from the offering of the Offered
Securities or (ii) if the allocation provided by clause (i) above is not
15
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Underwriters on the other shall be deemed to be in the same proportion
as the total net proceeds from the offering (before deducting expenses) received
by the Company bear to the total underwriting discounts and commissions received
by the Underwriters. The relative fault 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 the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. The amount paid by an indemnified
party as a result of the losses, claims, damages or liabilities referred to in
the first sentence of this subsection (d) shall be deemed to include any legal
or other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any action or claim which is the subject of this
subsection (d). Notwithstanding the provisions of this subsection (d), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Offered Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
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 Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations in
this subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(e) The obligations of the Company under this Section shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section shall be in addition to any liability which the
respective Underwriters may otherwise have and shall extend, upon the same terms
and conditions, to each director of the Company, to each officer of the Company
who has signed the Registration Statement and to each person, if any, who
controls the Company within the meaning of the Act.
7. Default of Underwriters. If any Underwriter or Underwriters
default in their obligations to purchase Offered Securities under the Terms
Agreement and the aggregate principal amount of Offered Securities that such
defaulting Underwriter or Underwriters agreed but failed to purchase does not
exceed 10% of the total principal amount of Offered Securities, the Lead
Underwriter may make arrangements satisfactory to the Company for the purchase
of such Offered Securities by other persons, including any of the Underwriters,
but if no such arrangements are made by the Closing Date, the non-defaulting
Underwriters shall be obligated severally, in proportion to their respective
commitments under the Terms Agreement (including the provisions of this
Agreement), to purchase the Offered Securities that such defaulting Underwriters
agreed but failed to purchase. If any Underwriter or Underwriters so default and
the aggregate principal amount of Offered Securities with respect to which such
default or defaults occur exceeds 10% of the total principal amount of Offered
Securities and arrangements satisfactory to the Lead Underwriter and the Company
for the purchase of such Offered Securities by other persons are not made within
36 hours after such default, the Terms Agreement will terminate without
liability on the part of any non-defaulting Underwriter or the Company, except
as provided in Section 8. As used in this Agreement, the term "Underwriter"
includes any person substituted for an Underwriter under this Section. Nothing
herein will relieve a defaulting Underwriter from liability for its default. The
respective commitments of the several Underwriters for the purposes of this
Section shall be determined without regard to reduction in the respective
Underwriters' obligations to purchase the principal amounts of the Offered
Securities set forth opposite their names in the Terms Agreement as a result of
Delayed Delivery Contracts entered into by the Company.
16
8. Survival of Certain Representations and Obligations. The
respective indemnities, agreements, representations, warranties and other
statements of the Company or its officers and of the several Underwriters set
forth in or made pursuant to the Terms Agreement (including the provisions of
this Agreement) will remain in full force and effect, regardless of any
investigation, or statement as to the results thereof, made by or on behalf of
any Underwriter, the Company or any of their respective representatives,
officers or directors or any controlling person, and will survive delivery of
and payment for the Offered Securities. If the Terms Agreement is terminated
pursuant to Section 7 or if for any reason the purchase of the Offered
Securities by the Underwriters is not consummated, the Company shall remain
responsible for the expenses to be paid or reimbursed by it pursuant to Section
4 and the respective obligations of the Company and the Underwriters under
Section 6 shall remain in effect. If the purchase of the Offered Securities by
the Underwriters is not consummated for any reason other than solely because of
the termination of the Terms Agreement pursuant to Section 7 or the occurrence
of any event specified in clause (iii), (iv) or (v) of Section 5(c), the Company
will reimburse the Underwriters for all out-of-pocket expenses (including fees
and disbursements of counsel) reasonably incurred by them in connection with the
offering of the Offered Securities.
9. Notices. All communications hereunder will be in writing
and, if sent to the Underwriters, will be mailed, delivered or telegraphed and
confirmed to them at their address furnished to the Company in writing for the
purpose of communications hereunder or, if sent to the Company, will be mailed,
delivered or telegraphed and confirmed to it at The Pep Boys -- Manny, Moe &
Xxxx, 0000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx, 00000, Attention:
Chief Financial Officer; provided, however, that any notice to an Underwriter
pursuant to Section 6 will be mailed, delivered or telegraphed and confirmed to
such Underwriter.
10. Successors. The Terms Agreement (including the provisions
of this Agreement) will inure to the benefit of and be binding upon the parties
hereto and their respective personal representatives and successors and the
officers and directors and controlling persons referred to in Section 6, and no
other person will have any right or obligation hereunder.
11. Representation of Underwriters. Any Representatives will
act for the several Underwriters in connection with the financing described in
the Terms Agreement, and any action under such Terms Agreement (including the
provisions of this Agreement) taken by the Representatives jointly or by the
Lead Underwriter will be binding upon all the Underwriters.
12. Counterparts. The Terms Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, but all
such counterparts shall together constitute one and the same Agreement.
13. Applicable Law; Consent to Jurisdiction. This Agreement
and the Terms Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York, without regard to principles of conflicts of
laws.
The Company hereby submits to the non-exclusive jurisdiction
of the Federal and state courts in the Borough of Manhattan in The City of New
York in any suit or proceeding arising out of or relating to the Terms Agreement
(including the provisions of this Agreement) or the transactions contemplated
hereby.
17
SCHEDULE A
Significant Subsidiaries of the Company
---------------------------------------
PBY Corporation
The Pep Boys -- Manny, Moe & Xxxx of California
Pep Boys - Manny, Moe & Xxxx of Delaware, Inc.
Pep Boys - Manny, Moe & Xxxx of Puerto Rico, Inc.
18
ANNEX I
(Three copies of this Delayed Delivery Contract should be signed and returned
to the address shown below so as to arrive not later than 9:00 A.M.,
New York time, on ...................................., 19...(1))
DELAYED DELIVERY CONTRACT
-------------------------
[Insert date of initial public offering]
THE PEP BOYS - MANNY, MOE & XXXX
c/o CREDIT SUISSE FIRST BOSTON CORPORATION
Eleven Madison Avenue
New York, N.Y. 10010-3629
Attention: Investment Banking Department - Transactions Advisory Group
Gentlemen:
The undersigned hereby agrees to purchase from The Pep Boys - Manny,
Moe & Xxxx, a Pennsylvania corporation ("Company"), and the Company agrees to
sell to the undersigned, [If one delayed closing, insert--as of the date hereof,
for delivery on ______________, 19__ ("Delivery Date"),]
$..............
principal amount of the Company's [Insert title of securities] ("Securities"),
offered by the Company's Prospectus dated __________, 19__ and a Prospectus
Supplement dated _____________________, 19__ relating thereto, receipt of copies
of which is hereby acknowledged, at ___% of the principal amount thereof plus
accrued interest, if any, $_____ per share plus accrued dividends, if any, and
on the further terms and conditions set forth in this Delayed Delivery Contract
("Contract").
[If two or more delayed closings, insert the following:
The undersigned will purchase from the Company as of the date hereof,
for delivery on the dates set forth below, Securities in the principal amounts
set forth below:
--------
(1) Insert date which is third full business day prior to Closing Date
under the Terms Agreement.
19
Delivery Date Principal Amount
------------- ----------------
.............................................. .............
.............................................. .............
Each of such delivery dates is hereinafter referred to as a Delivery Date.]
Payment for the Securities that the undersigned has agreed to purchase
for delivery on--the--each--Delivery Date shall be made to the Company or its
order by certified or official bank check in New York Clearing House (next day)
funds at the office of ____________________ at _____A.M. on--the--such--Delivery
Date upon delivery to the undersigned of the Securities to be purchased by the
undersigned--for delivery on such Delivery Date in definitive fully registered
form and in such denominations and registered in such names as the undersigned
may designate by written or telegraphic communication addressed to the Company
not less than five full business days prior to--the--such--Delivery Date.
It is expressly agreed that the provisions for delayed delivery and
payment are for the sole convenience of the undersigned; that the purchase
hereunder of Securities is to be regarded in all respects as a purchase as of
the date of this Contract; that the obligation of the Company to make delivery
of and accept payment for, and the obligation of the undersigned to take
delivery of and make payment for, Securities on--the--each--Delivery Date shall
be subject only to the conditions that (1) investment in the Securities shall
not at--the--such--Delivery Date be prohibited under the laws of any
jurisdiction in the United States to which the undersigned is subject and (2)
the Company shall have sold to the Underwriters the total principal amount of
the Securities less the principal amount thereof covered by this and other
similar Contracts. The undersigned represents that its investment in the
Securities is not, as of the date hereof, prohibited under the laws of any
jurisdiction to which the undersigned is subject and which governs such
investment.
Promptly after completion of the sale to the Underwriters the Company
will mail or deliver to the undersigned at its address set forth below notice to
such effect, accompanied by--a--copy--copies--of the opinion[s] of counsel for
the Company delivered to the Underwriters in connection therewith.
This Contract will inure to the benefit of and be binding upon the
parties hereto and their respective successors, but will not be assignable by
either party hereto without the written consent of the other.
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It is understood that the acceptance of any such Contract is in the
Company's sole discretion and, without limiting the foregoing, need not be on a
first come, first served basis. If this Contract is acceptable to the Company,
it is requested that the Company sign the form of acceptance below and mail or
deliver one of the counterparts hereof to the undersigned at its address set
forth below. This will become a binding contract between the Company and the
undersigned when such counterpart is so mailed or delivered.
Yours very truly,
.......................................
(Name of Purchaser)
By.....................................
.......................................
(Title of Signatory)
.......................................
.......................................
(Address of Purchaser)
Accepted, as of the above date.
THE PEP BOYS - MANNY, MOE & XXXX
By ...............................
[Insert Title]
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