DRAFT 2/5/98
$200,000,000
THE PEP BOYS - MANNY, MOE & ▇▇▇▇
Medium-Term Notes
DISTRIBUTION AGREEMENT
, 1998
Credit Suisse First Boston Corporation,
Eleven ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇.
Ladies and Gentlemen:
1. Introduction. The Pep Boys - Manny, Moe & ▇▇▇▇, a
Pennsylvania corporation (the "Issuer"), confirms its agreement with you (the
"Distributor") with respect to the issue and sale from time to time by the
Issuer of its medium-term notes registered under the registration statement
referred to in Section 2(a) (any such medium-term notes being hereinafter
referred to as the "Securities," which expression shall, if the context so
admits, include any permanent global Security). Securities may be offered and
sold pursuant to Section 3 of this Agreement in an aggregate amount not to
exceed the amount of Registered Securities (as defined in Section 2(a) hereof)
registered pursuant to such registration statement reduced by the aggregate
amount of any other Registered Securities sold otherwise than pursuant to
Section 3 of this Agreement. The Securities will be issued under a Senior
Indenture (the "Senior Indenture"), between the Issuer and PNC Bank, National
Association, as trustee (the "Trustee") or a Subordinated Indenture
("Subordinated Indenture," and together with the Senior Indenture, the
"Indentures"), between the Issuer and PNC Bank, National Association, as
Trustee.
The Securities shall have the terms described in the
Prospectus referred to in Section 2(a) as it may be amended or supplemented from
time to time, including any supplement to the Prospectus that sets forth only
the terms of a particular issue of the Securities (a "Pricing Supplement").
Securities will be issued, and the terms thereof established, from time to time
by the Issuer in accordance with the Indentures and the Procedures (as defined
in Section 3(d) hereof).
2. Representations and Warranties of the Issuer. The Issuer
represents and warrants to, and agrees with, the Distributor as follows:
(a) A registration statement (No. 333- ), including a
prospectus, relating to $200,000,000 aggregate principal amount of debt
securities of the Issuer, including the Securities (together, the
"Registered Securities") (including a prospectus which, as supplemented
from time to time, shall be used in connection with sales of the
Securities) has been filed with the Securities and Exchange Commission
(the "Commission") and has been declared effective under the Securities
Act of 1933, as amended (the "Act"). Such registration statement, as
amended as of the Closing Date (as defined in Section 3(e) hereof), is
hereinafter referred to as the "Registration Statement", and the
prospectus included in such Registration Statement, as supplemented so
as generally to describe the Securities and the terms of the offering
of the Securities, including all material incorporated by reference
therein, is hereinafter referred to as the "Prospectus". Any reference
in this Agreement to amending or supplementing the Prospectus shall be
deemed to include the filing of materials incorporated by reference in
the Prospectus after the Closing Date and any reference in this
Agreement to any amendment or supplement to the Prospectus shall be
deemed to include any such materials incorporated by reference in the
Prospectus after the Closing Date. No document has been or will be
prepared or distributed in reliance on Rule 434 under the Act.
(b) On the effective date of the Registration Statement, such
Registration Statement conformed in all material respects to the
requirements of the Act, the Trust Indenture Act of 1939, as amended
(the "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 Closing Date, and at each of the
times of acceptance and of delivery referred to in Section 6(a) hereof
and at each of the times of amendment or supplementing referred to in
Section 6(b) hereof (the Closing Date and each such time being herein
sometimes referred to as a "Representation Date"), the Registration
Statement and the Prospectus as then amended or supplemented 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 will include any untrue statement of a material fact or will
omit to state any material fact required to be stated therein or
necessary to make the statements therein 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 Issuer
by the Distributor specifically for use therein, it being understood
that the only such information furnished by the Distributor consists of
the information described as such herein. 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 Issuer's knowledge, threatened by the Commission.
(c) The Issuer 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 Issuer 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
2
would not have a material adverse effect on the Issuer and its
subsidiaries, taken as a whole.
(d) 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 Issuer 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 Issuer 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 Issuer, 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 Issuer, any unperfected security interest.
(e) The Indentures have been duly authorized, executed and
delivered by the Issuer and duly qualified under the Trust Indenture
Act and constitute valid and binding obligations of the Issuer,
enforceable 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; the Securities
have been duly authorized by the Issuer, and when the Securities have
been delivered and paid for pursuant to this Agreement, the 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 will constitute valid and binding
obligations of the Issuer entitled to the benefits of the Indenture and
enforceable against the Issuer 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.
(f) 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 issuance of the Securities or for the consummation of the other
transactions contemplated by this Agreement, 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 Securities.
(g) The execution, delivery and performance of the Indentures
and this Agreement and the consummation of the transactions herein and
therein contemplated have been duly authorized by all necessary
corporate action on the part of the Issuer and its subsidiaries and
will not (A) contravene any provision of the charter or by-laws of the
Issuer or any of its subsidiaries, or (B) conflict with or result in a
breach or
3
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 Issuer 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 Issuer 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 Issuer or
any such subsidiary is bound or to which any of the properties of the
Issuer 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 Issuer and its
subsidiaries, taken as a whole, or on the transactions contemplated by
this Agreement and the Indentures; and the Issuer has full power and
authority to authorize, issue and sell the Securities as contemplated
by this Agreement.
(h) This Agreement (including any agreement with respect to
the offering and sale of particular Securities as contemplated by
Section 3) has been duly authorized, executed and delivered by the
Issuer.
(i) The Issuer and its Significant Subsidiaries have good and
marketable title to all properties (real and personal) owned by the
Issuer 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 Issuer and
its subsidiaries, taken as a whole; all properties held under lease or
sublease by the Issuer 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 Issuer and its
Significant Subsidiaries; neither the Issuer 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 Issuer 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 Issuer 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.
(j) The Issuer 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
Issuer and its subsidiaries, taken as a whole.
(k) No labor disturbance by the employees of the Issuer exists
or, to the knowledge of the Issuer, 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 Issuer and its subsidiaries, taken as a whole.
4
(l) The Issuer 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 Issuer and its subsidiaries, taken
as a whole; and to the knowledge of the Issuer and its subsidiaries, no
conflict with the rights of others exists with respect to any such
Intellectual Property.
(m) The properties, assets and operations of the Issuer 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 Issuer or any of its subsidiaries,
reasonably anticipated future events, conditions, circumstances,
activities, practices, incidents, actions or plans of the Issuer 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 Issuer nor any of its subsidiaries is the subject
of any federal, state, local or foreign investigation, and neither the
Issuer 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
Issuer or any of its subsidiaries, threatened actions, suits or
proceedings against or affecting the Issuer, 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.
(n) (A) Neither the Issuer nor any of its Significant
Subsidiaries is in violation of its charter or by-laws, (B) neither the
Issuer 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 Issuer or any subsidiary and (C) no event of
default or event that, but for the giving of notice or the lapse of
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 Issuer or any of
its subsidiaries is a party or to which any of the properties or assets
of the Issuer 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,
5
have a material adverse effect on the condition (financial or other),
business, prospects, results of operations or general affairs of the
Issuer and its subsidiaries, taken as a whole.
(o) There are no pending actions, suits or proceedings against
or affecting the Issuer, 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 Issuer and
its subsidiaries, taken as a whole, or could have a material adverse
effect on the ability of the Issuer to perform its obligations under
this Agreement, the Indentures or the Securities, or that are otherwise
material in the context of the sale of the Securities; and, to the
Issuer's knowledge, no such actions, suits or proceedings are
threatened or contemplated.
(p) 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 Issuer 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 Issuer 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 form 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 amounts.
(q) Since the dates as of which information is given in the
Prospectus, (A) neither the Issuer 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
Issuer; (B) neither the Issuer 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 Issuer and, except as contemplated by the Prospectus, no change
in the capital stock of the Issuer and no dividend or distribution of
any kind declared, paid or made by the Issuer 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 Issuer and its
subsidiaries, taken as a whole.
6
(r) The Issuer 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 Issuer 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.
(s) The Issuer 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 Issuer 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 Issuer
and its subsidiaries, no tax deficiency might be asserted against the
Issuer 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
Issuer and its subsidiaries, taken as a whole.
(t) The Issuer is not and, after giving effect to the offering
and sale of the Securities and the application of the proceeds thereof
as described in the Prospectus, will not be an "investment company," as
defined in the Investment Issuer Act of 1940.
(u) Immediately after any sale of Securities by the Issuer
hereunder or under any Terms Agreement (as hereinafter defined), the
aggregate amount of Securities which shall have been issued and sold by
the Issuer hereunder or under any Terms Agreement and of any debt
securities of the Issuer (other than such Securities) that shall have
been issued and sold pursuant to the Registration Statement will not
exceed the amount of debt securities registered under the Registration
Statement.
3. Appointment as Distributor; Agreement of Distributor;
Solicitations.
(a) (i) Subject to the terms and conditions stated herein, the
Issuer hereby appoints the Distributor as the agent of the Issuer for the
purpose of soliciting or receiving offers to purchase the Securities to be
issued by the Issuer during any Marketing Time. For purposes of this Agreement
"Marketing Time" shall mean any time when no suspension of solicitation of
offers to purchase Securities pursuant to Section 3(c) or Section 4(c) shall be
in effect or any time when either the Distributor shall own any Securities with
the intention of reselling them or the Issuer has accepted an offer to purchase
Securities but the related settlement has not occurred.
(ii) So long as this Agreement shall remain in effect, the
Issuer shall not, without the consent of the Distributor, solicit or accept
offers to purchase Securities otherwise than to or through the Distributor;
provided, however, that, subject to all of the terms and conditions of this
Agreement, the foregoing shall not be construed to prevent the Issuer from
selling at any time any Registered Securities in a firm commitment underwriting
pursuant to an underwriting agreement that does not provide for a continuous
offering of such Registered
7
Securities; and provided, further, that the Issuer reserves the right from time
to time (i) to sell Securities directly to an investor, and (ii) to accept a
specific offer to purchase Securities solicited by a dealer other than the
Distributor (each an "Other Dealer"), without obtaining the prior consent of the
Distributor, provided that (x) the Issuer shall give the Distributor notice of
its decision to accept such an offer to purchase Securities concurrently with
such acceptance, (y) any Other Dealer shall agree to be bound by and subject to
the terms and conditions of this Agreement binding on the Distributor (including
the commission schedule set forth on Exhibit B), and (z) so long as this
Agreement remains in effect, the Issuer shall not appoint any other agent or
dealer for the purpose of soliciting or receiving offers to purchase Securities
on a continuous basis.
(b) (i) On the basis of the representations and warranties
contained herein, but subject to the terms and conditions herein set forth, the
Distributor agrees, as the agent of the Issuer, to use reasonable efforts when
requested by the Issuer to solicit offers to purchase the Securities upon the
terms and conditions set forth in the Prospectus, as from time to time amended
or supplemented.
(ii) The Distributor shall not have any obligation to purchase
Securities from the Issuer; however, the Distributor may agree from time to time
to purchase Securities as principal for resale to investors and other purchasers
selected by the Distributor. Unless otherwise expressly agreed by the Issuer and
the Distributor as contemplated by clause (v) below, each offer to sell
Securities transmitted by the Distributor and accepted by the Issuer shall
constitute acceptance of an offer to sell such Securities to the Distributor for
resale. In addition, if so specified in a Terms Agreement (as defined in clause
(iii) below) executed by the Issuer and the Distributor, the Distributor shall
act as representative of the several underwriters named in such Terms Agreement
for resale of the Securities specified in such Terms Agreement upon the terms
and subject to the conditions specified in such Terms Agreement, this Agreement
and in the Prospectus, as supplemented by the applicable pricing supplement. It
is understood that the Distributor and any underwriters for which it may act as
representative propose that they will offer any Securities which they agree to
purchase as principal for sale as set forth in the Prospectus, as supplemented
by the applicable Pricing Supplement.
(iii) Upon acceptance by the Issuer of an offer by the
Distributor to purchase Securities as principal, unless the Issuer and the
Distributor execute a Terms Agreement substantially in the form of Exhibit A
hereto (a "Terms Agreement") or any written confirmation or communication
transmitted by the Distributor to the Issuer with respect to the terms of the
Securities and of their offer and sale evidenced by the offer communicated by
the Distributor and accepted by the Issuer, in each case together with the
provisions of this Agreement, shall constitute an agreement between the
Distributor and the Issuer for the sale and purchase of such Securities (whether
or not any Terms Agreement or other written confirmation or communication shall
have been executed by the Issuer or the Distributor). Each purchase of
Securities by the Distributor shall, unless otherwise agreed, be at a discount
from the principal amount of each such Security equivalent to the applicable
commission set forth in Exhibit B hereto.
(iv) The Distributor is authorized to engage the services of
any other brokers or dealers in connection with the offer or sale of Securities
purchased by the
8
Distributor as principal for resale to others and may reallow any portion of the
discount received from the Issuer to such brokers or dealers.
(v) If expressly agreed by the Distributor and the Issuer, the
Distributor will solicit offers to purchase Securities from the Issuer through
the Distributor, acting as agent, in accordance with the provisions of this
Agreement. In such event, the Distributor shall communicate to the Issuer,
orally or in writing, each reasonable offer to purchase Securities received by
it as agent; and the Issuer shall have the sole right to accept offers to
purchase the Securities and may reject any such offer, in whole or in part. The
Distributor shall have the right, in its discretion reasonably exercised,
without notice to the Issuer, to reject any offer to purchase Securities
received by it as such agent, in whole or in part, and any such rejection shall
not be deemed a breach of its agreement contained herein. At the time of
delivery of, and payment for, any Securities sold by the Issuer as a result of a
solicitation made by, or offer to purchase received by, the Distributor, acting
on an agency basis, the Issuer agrees to pay the Distributor a commission in
accordance with the schedule set forth in Exhibit B hereto.
(vi) The Distributor shall not have any responsibility for
maintaining records with respect to the aggregate principal amount of Securities
sold, or otherwise monitoring the availability of Securities for sale under the
Registration Statement.
(vii) No Security which the Issuer has agreed to sell pursuant
to this Agreement shall be deemed to have been purchased and paid for, or sold
by the Issuer, until such Security shall have been delivered to the purchaser
thereof against payment by such purchaser.
(c) Upon receipt of notice from the Issuer as contemplated by
Section 4(c) hereof, the Distributor shall suspend its solicitation of offers to
purchase Securities until such time as the Issuer shall have furnished it with
an amendment or supplement to the Registration Statement or the Prospectus, as
the case may be, contemplated by Section 4(c) and shall have advised the
Distributor that such solicitation may be resumed.
The Issuer reserves the right, in its sole discretion, to
suspend solicitation of offers to purchase the Securities commencing at any time
for any period of time or permanently. Upon receipt of at least one Business
Day's prior notice from the Issuer, the Distributor will forthwith suspend
solicitation of offers to purchase Securities from the Issuer until such time as
the Issuer has advised the Distributor that such solicitation may be resumed.
For the purpose of the foregoing sentence, "Business Day" shall mean any day
that is not a Saturday or Sunday, and that in The City of New York is not a day
on which banking institutions generally are authorized or obligated by law or
executive order to close.
(d) Administrative procedures respecting the sale of
Securities (the "Procedures") shall be agreed upon from time to time by the
Distributor and the Issuer. The initial Procedures, which are set forth in
Exhibit C hereto, shall remain in effect until changed by agreement among the
Issuer and the Distributor. The Distributor and the Issuer agree to perform the
respective duties and obligations specifically provided to be performed by each
of them herein and in the Procedures. The Issuer will furnish to the Trustee a
copy of the Procedures as from time to time in effect.
9
(e) The documents required to be delivered by Section 5 hereof
shall be delivered at the office of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP, 1301 Avenue of the
Americas, New York, New York, not later than 10:00 A.M., New York City time, on
the date of this Agreement or at such later time as may be mutually agreed by
the Issuer and the Distributor, which in no event shall be later than the time
at which the Distributor commences solicitation of purchases of Securities
hereunder, such time and date being herein called the "Closing Date". For
purposes of Rule 15c6-1 under the Securities Exchange Act of 1934, the
settlement date (if later than the otherwise applicable settlement date) shall
be the date for payment of funds and delivery of securities for all the
Securities sold pursuant to an offering of Securities having identical terms
(including the issue date) and terms of sale (whether or not set forth in a
single Terms Agreement).
4. Certain Agreements of the Issuer. The Issuer agrees with
the Distributor that it will furnish to ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP, counsel for the
Distributor, one signed copy of the Registration Statement, including all
exhibits, in the form it became effective and of all amendments thereto and
that, in connection with each offering of Securities,
(a) The Issuer will prepare a Pricing Supplement with respect
to any Securities to be offered and sold to or through the Distributor
pursuant to this Agreement and, after approval of such Pricing
Supplement by the Distributor, will file such Pricing Supplement with
the Commission pursuant to and in accordance with Rule 424(b) under the
Act.
(b) The Issuer will advise the Distributor promptly of any
proposal to amend or supplement the Registration Statement or the
Prospectus and will afford the Distributor a reasonable opportunity to
comment on any such proposed amendment or supplement (other than any
Pricing Supplement that relates to Securities not purchased through or
by such Distributor), and if the Issuer affects any amendment or
supplementation of the Registration Statement or the Prospectus to
which the Distributor objects, the Distributor shall be relieved of its
obligations under Section 3(b) to solicit offers to purchase Securities
until such time as the Issuer shall have filed such further amendments
or supplements such that the Distributor is reasonably satisfied with
the Registration Statement and the Prospectus, as then amended or
supplemented; and the Issuer will also advise the Distributor promptly
of the filing and effectiveness 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
Securities is required to be delivered under the Act, any event occurs
or a condition exists as a result of which the Prospectus, as then
amended or supplemented, would include an 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 when such Prospectus is delivered, not misleading, or if it
is necessary at any such time to amend the Prospectus to comply with
the Act, the Issuer will promptly notify the Distributor by telephone
(with confirmation in writing) to suspend solicitation of offers to
purchase the Securities and to cease making offers or sales of
Securities which a Distributor may then own as principal; and if the
Issuer shall decide to amend or
10
supplement the Registration Statement or the Prospectus, it will
promptly advise the Distributor by telephone (with confirmation in
writing) and, subject to the provisions of subsection (a) of this
Section, will promptly prepare and file with the Commission an
amendment or supplement which will correct such statement or omission
or an amendment which will effect such compliance. Notwithstanding the
foregoing, if, at the time any such event occurs or it becomes
necessary to amend the Prospectus to comply with the Act, the
Distributor shall own any of the Securities with the intention of
reselling them, or the Issuer has accepted an offer to purchase
Securities but the related settlement has not occurred, the Issuer,
subject to the provisions of subsection (a) of this Section, will
promptly prepare and file with the Commission an amendment or
supplement which will correct such statement or omission or an
amendment which will effect such compliance. Neither the Distributor's
consent to, nor its delivery of, any such amendment or supplement shall
constitute a waiver of any of the conditions set forth in Section 5.
(d) The Issuer will file promptly all documents required to be
filed with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act. In addition, on the date on which the Issuer makes
any announcement to the general public concerning earnings or
concerning any other event which is required to be described, or which
the Issuer proposes to describe, in a document filed pursuant to the
Exchange Act, the Issuer will furnish the information contained or to
be contained in such announcement to the Distributor, confirmed in
writing and, subject to the provisions of subsections (a) and (b) of
this Section, will cause the Prospectus to be amended or supplemented
to reflect the information contained in such announcement. The Issuer
also will furnish the Distributor with copies of all material press
releases or announcements to the general public.
(e) The Issuer will immediately notify the Distributor of any
downgrading in the rating of any debt securities of the Issuer or any
proposal to downgrade the rating of any debt securities of the Issuer
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 surveillance or
review its rating of any debt securities of the Issuer (other than an
announcement with positive implications of a possible upgrading, and no
implication of a possible downgrading of such rating), as soon as the
Issuer learns of such downgrading, proposal to downgrade or public
announcement.
(f) As soon as practicable, but not later than 16 months,
after the date of each acceptance by the Issuer of an offer to purchase
Securities hereunder, the Issuer 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
acceptance and (iii) the date of the Issuer's most recent Annual Report
on Form 10-K filed with the Commission prior to the date of such
acceptance, which will satisfy the provisions of Section 11(a) of the
Act.
(g) The Issuer will furnish to the Distributor copies of the
Registration Statement, including all exhibits, any related preliminary
prospectus, any related
11
preliminary prospectus supplement, the Prospectus and all amendments
and supplements to such documents (including any Pricing Supplement),
in each case as soon as available and in such quantities as are
reasonably requested.
(h) The Issuer will arrange for the qualification of the
Securities for sale and the determination of their eligibility for
investment under the laws of such jurisdictions as the Distributor
designates and will continue such qualifications in effect so long as
required for the distribution thereof.
(i) So long as any Securities are outstanding, the Issuer will
furnish to the Distributor, (i) as soon as practicable after the end of
each fiscal year, a copy of its annual report to stockholders for such
year, (ii) as soon as available, a copy of each report or definitive
proxy statement of the Issuer filed with the Commission under the
Exchange Act or mailed to stockholders, and (iii) from time to time,
such other information concerning the Issuer as the Distributor may
reasonably request.
(j) The Issuer will pay, or reimburse the Distributor for, all
reasonable expenses incident to the performance of its obligations
under this Agreement and will reimburse the Distributor for any
reasonable expenses (including reasonable fees and disbursements of
counsel) incurred by it in connection with qualification of the
Securities for sale and determination of their eligibility for
investment under the laws of such jurisdictions as the Distributor may
designate and the printing of memoranda relating thereto, for any fees
charged by investment rating agencies for the rating of the Securities,
for any filing fee incident to, and the reasonable fees and
disbursements of counsel to the Distributor in connection with, review
by the National Association of Securities Dealers, Inc. relating to the
Securities, for expenses incurred by the Distributor in distributing
the Prospectus and all supplements thereto (including any Pricing
Supplement), any preliminary prospectuses and any preliminary
prospectus supplements to the Distributor, for costs incurred by the
Distributor in advertising any offering of Securities and for the
Distributor's reasonable expenses (including the reasonable fees and
disbursements of counsel to the Distributor) incurred in connection
with the establishment or maintenance of the program contemplated by
this Agreement or otherwise in connection with the activities of the
Distributor under this Agreement.
(k) Between the date on which the Distributor agrees to
purchase Securities from the Issuer as principal for resale and the
date of delivery of such Securities, the Issuer will not offer or sell,
or enter into any agreement to sell, pledge, or otherwise dispose of,
directly or indirectly, or file with the Commission a registration
statement under the Act relating to any of its debt securities (other
than such Securities) in the United States, other than borrowings under
the Issuer's revolving credit agreements and lines of credit, the
private placement of securities and issuances of its commercial paper,
or publicly disclose the intention to make any such offer, sale, pledge
or disposition or filing.
5. Conditions of Obligations. The obligations of the
Distributor, as agent of the Issuer, under this Agreement at any time to solicit
offers to purchase the Securities and to purchase Securities from the Issuer as
principal is subject to the accuracy, on the date hereof, on each Representation
Date and on the date of each such solicitation, of the representations and
warranties of the Issuer herein, to the accuracy, on each such date, of the
12
statements of the Issuer's officers made pursuant to the provisions hereof, to
the performance, on or prior to each such date, by the Issuer of its obligation
hereunder, and to each of the following additional conditions precedent:
(a) The Prospectus, as amended or supplemented as of any
Representation Date or date of such solicitation, as the case may be,
shall have been filed with the Commission in accordance with the Rules
and Regulations and no stop order suspending the effectiveness of the
Registration Statement or of any part thereof shall have been issued
and no proceedings for that purpose shall have been instituted or, to
the knowledge of the Issuer or the Distributor, shall be contemplated
by the Commission.
(b) Neither the Registration Statement nor the Prospectus, as
amended or supplemented as of any Representation Date or date of such
solicitation, as the case may be, shall contain any untrue statement of
fact which, in the opinion of the Distributor, is material or omits to
state a fact which, in the opinion of the Distributor, is material and
is required to be stated therein or is necessary to make the statements
therein in light of the circumstances under which they were made not
misleading.
(c) There shall not have occurred (i) any change, or any
development or event involving a prospective change, in or affecting
particularly the business or properties of the Issuer or any of its
subsidiaries that, in the judgment of the Distributor, materially
impairs the investment quality of the Securities; (ii) any downgrading
in the rating of any debt securities of the Issuer 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 surveillance or review its rating of any debt
securities of the Issuer (other than an announcement with positive
implications of a possible upgrading, and no implication 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 Issuer 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 the
Distributor, the effect of any such outbreak, escalation, declaration,
calamity or emergency makes it impractical or inadvisable to proceed
with solicitations of offers to purchase, or sales of and payment for
the Securities.
(d) With respect to any Security denominated in a currency
other than the U.S. dollar, more than one currency or a composite
currency or any Security the principal or interest of which is indexed
to such currency, currencies or composite currency, there shall not
have occurred a suspension or material limitation in foreign exchange
trading in such currency, currencies or composite currency by a major
international bank, a general moratorium on commercial banking
activities in the country or countries issuing such currency,
currencies or composite currency, the outbreak or escalation of
hostilities involving, the occurrence of any material adverse change in
the existing financial, political or economic conditions of, or the
declaration
13
of war or a national emergency by, the country or countries issuing
such currency, currencies or composite currency or the imposition or
proposal of exchange controls by any governmental authority in the
country or countries issuing such currency, currencies or composite
currency.
(e) At the Closing Date and, if specified in a Terms
Agreement, if any, at the time of delivery of the Securities described
in such Terms Agreement, the Distributor shall have received an
opinion, dated the Closing Date, or such date of delivery, as the case
may be, of ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, counsel for the Issuer, to the
effect that:
(i) Each of the Issuer 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
Issuer 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 Issuer and its subsidiaries, taken as a
whole; and all of the outstanding shares of capital stock of
the Issuer's Significant Subsidiaries have been duly
authorized and validly issued, are fully paid and
non-assessable and are owned by the Issuer, 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 Issuer and have been duly
qualified under the Trust Indenture Act and, assuming due
authorization, execution and delivery by the Trustee,
constitute valid and legally binding obligations of the
Issuer, enforceable against the Issuer 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
or by general principles of equity.
(iii) Any series of Securities established on or
prior to the date of such opinion has been duly authorized and
established in conformity with the Indentures, and, when the
terms of a particular Security and of its issuance and sale
have been duly authorized and established by all necessary
corporate action in conformity with the Indentures, and such
Security has been duly completed, executed, authenticated and
issued in accordance with the Indentures and delivered against
payment as contemplated by this Agreement, such Security will
constitute a valid and legally binding obligation of the
Issuer enforceable against the Issuer 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, it being understood that such
counsel may (a)
14
assume that at the time of the issuance, sale and delivery of
each Security the authorization of such series will not have
been modified or rescinded and there will not have occurred
any change in law affecting the validity, legally binding
character or enforceability of such Security, (b) assume that
neither the issuance, sale and delivery of any Security, nor
any of the terms of such Security, nor compliance by the
Issuer with such terms, will violate any applicable law, any
agreement or instrument then binding upon the Issuer or any
restriction imposed by any court or governmental body having
jurisdiction over the Issuer, and (c) state that as of the
date of such opinion a judgment for money in an action based
on Securities denominated in foreign currencies or currency
units in a Federal or State court in the United States
ordinarily would be enforced in the United States only in
United States dollars, and that the date used to determine the
rate of conversion of the foreign currency or currency unit in
which a particular Security is denominated into United States
dollars will depend upon various factors, including which
court renders the judgment.
(iv) The Registration Statement has become effective
under the Act, the Prospectus was filed with the Commission
pursuant to the subparagraph of Rule 424(b) under the Act
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 of any part thereof has been issued and no
proceedings for that purpose have been instituted or are
pending or contemplated under the Act.
(v) The registration statement relating to the
Registered Securities, as of its effective date, the
Registration Statement and the Prospectus, as of the Closing
Date, 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.
(vi) The descriptions in the Registration Statement
and the Prospectus (including those incorporated by reference)
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 (including
those incorporated by reference) as required or of any
contracts or documents of a character required to be described
in the Registration Statement or the Prospectus or to be filed
as exhibits to the Registration Statement which are not
described (including those incorporated by reference) 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.
(vii) 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 contemplated by this
Agreement in connection with the issuance and sale of the
Securities by the Issuer, except such as have been obtained
and made under the Act, the Trust Indenture Act or the Rules
and Regulations and
15
such as may be required under state securities laws (it being
understood that such counsel may assume with respect to each
particular Security that the inclusion of any alternative or
additional terms in such Security that are not currently
specified in the form of Securities examined by such counsel
would not require the Issuer to obtain any regulatory consent,
authorization or approval or make any regulatory filing in
order for the Issuer to issue, sell and deliver such
Security).
(viii) The execution, delivery and performance of the
Indentures and this Agreement and the consummation of the
transactions herein and therein contemplated have been duly
authorized by all necessary corporate action on the part of
the Issuer and its Significant Subsidiaries and will not (A)
contravene any provision of the charter or by-laws of the
Issuer or any of its Significant 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 Issuer 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
Issuer 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 Issuer or any
such Significant Subsidiary is bound or to which any of the
properties of the Issuer or any such Significant 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 Issuer and its
subsidiaries, taken as a whole, or on the transactions
contemplated by this Agreement and the Indentures; and the
Issuer has full power and authority to authorize, issue and
sell the Securities as contemplated by this Agreement (it
being understood that such counsel may assume with respect to
each particular Security that the inclusion of any alternative
or additional terms in such Security that are not currently
specified in he form of Securities examined by such counsel
will not cause the issuance, sale or delivery of such
Security, the terms of such Security, or the compliance by the
Issuer with such terms, to violate any of the court orders or
laws specified in this paragraph or to result in a default
under or a breach of any of the agreements specified in this
paragraph).
(ix) Neither the Issuer 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 Issuer 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 Issuer or any of
its Significant Subsidiaries is a party or to which any of the
properties or assets of the Issuer or any such Significant
Subsidiary is subject.
16
(x) To the knowledge of such counsel after reasonable
inquiry, there are no pending or threatened actions, suits or
proceedings against or affecting the Issuer, any of the
Significant 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
Issuer to perform its obligations under this Agreement, the
Indentures or the Securities, or that are otherwise material
in the context of the sale of the Securities.
(xi) To the knowledge of such counsel after
reasonable inquiry, there are no contracts, agreements or
understandings between the Issuer and any third party granting
such third party the right to require the Issuer to file a
registration statement under the Act with respect to any
securities of the Issuer owned or to be owned by such third
party or to require the Issuer 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 Issuer under
the Act.
(xii) This Agreement has been duly authorized,
executed and delivered by the Issuer.
provided, however, that, in the case of each such opinion delivered pursuant to
a Terms Agreement, (w) the statements contained in such opinion relating to the
Registration Statement or the Prospectus shall relate to the Registration
Statement or the Prospectus, as the case may be, as amended or supplemented as
of the date of the Issuer's acceptance of the offer to purchase such Securities
and as of the time of delivery of such Securities; (x) such opinion shall relate
to the Securities being delivered on the date of such opinion and not to other
Securities as well; (y) in lieu of the opinion described in clause (iii), such
opinion shall state that the Securities being delivered on the date of such
opinion, when delivered against payment therefor as contemplated by this
Agreement, will have been duly authorized, executed, authenticated, issued and
delivered and will constitute valid and legally binding obligations of the
Issuer enforceable in accordance with their terms, subject only to the
exceptions set forth in clause (iii) as to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and general equity principles, and
will conform to the description thereof contained in the Prospectus as amended
or supplemented at such date of delivery; and (z) the opinions described in
clauses (vii) and (viii) shall be rendered without making the assumptions
described in the parantheticals set forth at the end of each such clause.
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, 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 thereof
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
17
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.
(f) At the Closing Date and, if specified in a Terms
Agreement, if any, at the time of delivery of the Securities described
in such Terms Agreement, the Distributor shall have received a
certificate, dated the Closing Date or such date of delivery, as the
case may be, of the President and the principal financial officer of
the Issuer in which such officers, to the best of their knowledge after
reasonable investigation, shall state that (A) the representations and
warranties of the Issuer in this Agreement are true and correct in all
material respects, (B) the Issuer has complied in all material respects
with all agreements and satisfied in all material respects all
conditions on its part to be performed or satisfied hereunder at or
prior to the Closing Date or such date of delivery, as the case may be,
(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
Issuer and its subsidiaries, taken as a whole. In the case of each such
certificate delivered pursuant to a Terms Agreement, the statements
contained in such certificate relating to the Registration Statement or
the Prospectus shall relate to the Registration Statement or the
Prospectus, as the case may be, as amended or supplemented as of the
date of the Issuer's acceptance of the offer to purchase such
Securities and as of the time of delivery of such Securities.
(g) At the Closing Date and, if specified in a Terms
Agreement, if any, at the time of delivery of the Securities described
in such Terms Agreement, the Distributor shall have received a letter,
dated the Closing Date or such date of delivery, as the case may be, 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 to the 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 Issuer, a reading of the minutes
of all meetings of the stockholders and directors (including
each committee thereof) of the Issuer and its subsidiaries,
inquiries of officials of the Issuer who have responsibility
for financial and accounting
18
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 for those same
periods or were not determined on a basis
substantially consistent with that of the
corresponding amounts in the audited statements of
income;
(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 Issuer 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 Distributor;
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; and
(iv) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other
financial information contained in
19
the Prospectus (in each case to the extent that such dollar
amounts, percentages and other financial information are
derived from the general accounting records of the Issuer and
its subsidiaries subject to the internal controls of the
Issuer'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 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.
In the case of each such letter delivered pursuant to
a Terms Agreement, the statements contained in such letter
relating to the Registration Statement or the Prospectus shall
relate to the Registration Statement or the Prospectus, as the
case may be, as amended or supplemented as of the date of the
Issuer's acceptance of the offer to purchase such Securities
and as of the time of delivery of such Securities.
(h) At the Closing Date and, if specified in a Terms
Agreement, if any, at the time of delivery of the Securities described
in such Terms Agreement, the Distributor shall have received from ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ LLP, counsel for the Distributor, such opinion or opinions,
dated the Closing Date or such date of delivery, as the case may be,
with respect to the validity of the Securities, the Registration
Statement, the Prospectus and other related matters as the Distributor
may require, and the Issuer shall have furnished to such counsel such
documents as they request for the purpose of enabling them to pass upon
such matters.
(i) The Issuer shall have furnished to the Distributor or its
counsel such further certificates and documents as the Distributor or
such counsel reasonably request.
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 Distributor and its counsel. The
Issuer will furnish the Distributor with such conformed copies of such opinions,
certificates, letters and documents as they reasonably request.
6. Additional Covenants of the Issuer. The Issuer
agrees that:
(a) Each acceptance by the Issuer of an offer for the purchase
of Securities shall be deemed to be an affirmation that its
representations and warranties contained in this Agreement are true and
correct at the time of such acceptance and a covenant that such
representations and warranties will be true and correct at the time of
delivery to the purchaser of the Securities as though made at and as of
each such time, it being understood that such representations and
warranties shall relate to the Registration Statement and the
Prospectus as amended or supplemented at each such time. Each such
acceptance by the Issuer of an offer to purchase Securities shall be
20
deemed to constitute an additional representation, warranty and
agreement by the Issuer that, as of the date of delivery of such
Securities to the purchaser thereof, after giving effect to the
issuance of such Securities, of any other Securities to be issued on or
prior to such delivery date and of any other Registered Securities to
be issued and sold by the Issuer on or prior to such delivery date, the
aggregate amount of Registered Securities (including any Securities)
which have been issued and sold by the Issuer will not exceed the
amount of Registered Securities registered pursuant to the Registration
Statement.
(b) Each time that the Registration Statement or the
Prospectus shall be amended or supplemented (other than by a Pricing
Supplement), the Issuer shall, (A) concurrently with such amendment or
supplement, if such amendment or supplement shall occur at a Marketing
Time, or (B) immediately at the next Marketing Time if such amendment
or supplement shall not occur at a Marketing Time, furnish the
Distributor with a certificate, dated the date of delivery thereof, of
the President or any Vice President and a principal financial or
accounting officer of the Issuer, in form satisfactory to the
Distributor, to the effect that the statements contained in the
certificate covering the matters set forth in Section 5(f) hereof which
was last furnished to the Distributor pursuant to this Section 6(b) are
true and correct at the time of such amendment or supplement, as though
made at and as of such time or, in lieu of such certificate, a
certificate of the same tenor as the certificate referred to in Section
5(f); provided, however, that any certificate furnished under this
Section 6(b) shall relate to the Registration Statement and the
Prospectus as amended or supplemented at the time of delivery of such
certificate and, in the case of the matters set forth in Section 5(f),
to the time of delivery of such certificate.
(c) At each Representation Date referred to in Section 6(b),
the Issuer shall, (A) concurrently if such Representation Date shall
occur at a Marketing Time, or (B) immediately at the next Marketing
Time if such Representation Date shall not occur at a Marketing Time,
furnish the Distributor with a written opinion or opinions, dated the
date of such Representation Date, of counsel for the Issuer, in form
satisfactory to the Distributor, to the effect set forth in Section
5(e) hereof; provided; however, that to the extent appropriate such
opinion or opinions may reconfirm matters set forth in a prior opinion
delivered at the Closing Date or under this Section 6(c); provided
further, however, that any opinion or opinions furnished under this
Section 6(c) shall relate to the Registration Statement and the
Prospectus as amended or supplemented at such Representation Date and
shall state that the Securities sold in the relevant Applicable Period
(as defined below) have been duly authorized, executed, authenticated,
issued and delivered and constitute valid and legally binding
obligations of the Issuer enforceable in accordance with their terms,
subject only to the exceptions set forth in clause (iii) of Section
5(e) hereof as to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and general equity
principles, and conform in all material respects to the description
thereof contained in the Prospectus as amended or supplemented at the
relevant date or dates for the delivery of such Securities to the
purchaser or purchasers thereof. For the purpose of this Section 6(c),
"Applicable Period" shall mean with respect to any opinion delivered on
a Representation Date the period commencing on the date as of which the
most
21
recent prior opinion delivered at the Closing Date or under this
Section 6(c) speaks and ending on such Representation Date.
(d) At each Representation Date referred to in Section 6(b) on
which the Registration Statement or the Prospectus shall be amended or
supplemented to include additional financial information, the Issuer
shall cause Deloitte & Touche, (A) concurrently if such Representation
Date shall occur at a Marketing Time, or (B) immediately at the next
Marketing Time if such Representation Date shall not occur at a
Marketing Time, to furnish the Distributor with a letter, addressed
jointly to the Issuer and the Distributor and dated the date of such
Representation Date, in form and substance satisfactory to the
Distributor, to the effect set forth in Section 5(g) hereof; provided,
however, that to the extent appropriate such letter may reconfirm
matters set forth in a prior letter delivered at the Closing Date or
pursuant to this Section 6(d); provided further, however, that any
letter furnished under this Section 6(d) shall relate to the
Registration Statement and the Prospectus as amended or supplemented at
such Representation Date, with such changes as may be necessary to
reflect changes in the financial statements and other information
derived from the accounting records of the Issuer.
(e) The Issuer agrees that any obligation of a person who has
agreed to purchase Securities to make payment for and take delivery of
such Securities shall be subject to (i) the accuracy, on the related
settlement date fixed pursuant to the Procedures, of the Issuer's
representation and warranty deemed to be made to the Distributor
pursuant to the last sentence of subsection (a) of this Section 6, and
(ii) the satisfaction, on such settlement date, of each of the
conditions set forth in Sections 5(a), (b) and (c), it being understood
that under no circumstance shall the Distributor have any duty or
obligation to exercise the judgment permitted under Section 5(b) or (c)
on behalf of any such person.
7. Indemnification and Contribution.
(a) The Issuer will indemnify and hold harmless the
Distributor against any losses, claims, damages or liabilities, joint or
several, to which the Distributor 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 the Distributor for any legal or other expenses
reasonably incurred by the Distributor in connection with investigating or
defending any such loss, claim, damage, liability or action as such expenses are
incurred; provided, however, that the Issuer 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 or omission or
alleged omission made in any of such documents in reliance upon and in
conformity with written information furnished to the Issuer by the Distributor
specifically for use therein, unless such loss, claim, damage or liability
arises out of the offer or sale of Securities occurring after the Distributor
has notified the Issuer in writing that such information should no longer be
used therein, it being understood and agreed that the only
22
such information furnished by the Distributor consists of the information
described as such in subsection (b) below; 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 the Distributor to the extent that any such loss, claim,
damage or liability of the Distributor 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 herein) if the Issuer had previously
furnished copies thereof in requisite quantities to the Distributor.
(b) The Distributor will indemnify and hold harmless the
Issuer against any losses, claims, damages or liabilities to which the Issuer
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 Issuer by the Distributor
specifically for use therein, and will reimburse any legal or other expenses
reasonably incurred by the Issuer in connection with investigating or defending
any such loss, claim, damage, liability or action as such expenses are incurred,
unless such loss, claim, damage or liability arises out of the offer or sale of
Securities occurring after the Distributor has notified the Issuer in writing
that such information should no longer be used therein, it being understood and
agreed that the only such information furnished by the Distributor consists of
the following information in a supplement to the Prospectus furnished on behalf
of the Distributor: the legend concerning stabilization and over-allotment on
the inside front cover page and the seventh paragraph under the caption
"Supplemental Plan of Distribution of the Notes."
(c) Promptly after receipt by an indemnified party under this
Section 7 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the 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 the 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 7 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
23
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 7 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each 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 Issuer on the one hand and the Distributor on the other from the offering
pursuant to this Agreement of the Securities which are the subject of the action
or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Issuer on the one hand and the Distributor 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 Issuer on the one hand and the Distributor on the other
shall be deemed to be in the same proportions as the total net proceeds from the
offering pursuant to this Agreement of the Securities which are the subject of
the action (before deducting expenses) received by the Issuer bear to the total
discounts and commissions received by the Distributor from the offering of such
Securities pursuant to this Agreement. 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 Issuer or the Distributor 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), the Distributor shall not be required to contribute any amount
in excess of the amount by which the total price at which the Securities which
are the subject of the action and which were distributed to the public through
it pursuant to this Agreement or upon resale of Securities purchased by it from
the Issuer exceeds the amount of any damages which the Distributor 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.
(e) The obligations of the Issuer under this Section 7 shall
be in addition to any liability which the Issuer may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who controls
the Distributor within the meaning of the Act; and the obligations of the
Distributor under this Section 7 shall be in addition to any liability which the
Distributor may otherwise have and shall extend, upon the same terms and
conditions, to each director of the Issuer, to each officer of the Issuer who
has signed the Registration Statement and to each person, if any, who controls
the Issuer within the meaning of the Act.
24
8. Status of The Distributor. In soliciting offers to purchase
the Securities from the Issuer pursuant to this Agreement and in assuming its
other obligations hereunder (other than any obligation to purchase Securities
pursuant to Section 3 hereof), the Distributor is acting solely as agent for the
Issuer and not as principal. In connection with the placement of any Securities
by a Distributor, acting as agent, (a) the Distributor will make reasonable
efforts to assist the Issuer in obtaining performance by each purchaser whose
offer to purchase Securities from the Issuer has been solicited by the
Distributor and accepted by the Issuer, but the Distributor shall have no
liability to the Issuer in the event any such purchase is not consummated for
any reason; and (b) if the Issuer shall default on its obligations to deliver
Securities to a purchaser whose offer it has accepted, the Issuer (i) shall hold
the Distributor harmless against any loss, claim or damage arising from or as a
result of such default by the Issuer, and (ii) in particular, shall pay to the
Distributor any commission to which they would be entitled in connection with
such sale.
9. Survival of Certain Representations and Obligations. The
respective indemnities, agreements, representations, warranties and other
statements of the Issuer or its officers and of the Distributor set forth in or
made pursuant to 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 the Distributor, the Issuer or any of their respective
representatives, officers or directors or any controlling person and will
survive delivery of and payment for the Securities. If this Agreement is
terminated pursuant to Section 10 or for any other reason or if for any reason
the sale of Securities described in a confirmation or Terms Agreement referred
to in Section 3 by the Issuer to the Distributor is not consummated, the Issuer
shall remain responsible for the expenses to be paid or reimbursed by it
pursuant to Section 4(j) and the respective obligations of the Issuer and the
Distributor pursuant to Section 7 shall remain in effect and, to the extent
Securities remain outstanding, the obligations of the Issuer under Sections 4(f)
and 4(i) shall also remain outstanding. In addition, if any such termination of
this Agreement shall occur either (i) at a time when the Distributor shall own
any of the Securities with the intention of reselling them or (ii) after the
Issuer has accepted an offer to purchase Securities and prior to the related
settlement, the obligations of the Issuer under the second sentence of Section
4(c), under Sections 4(a), 4(b), 4(d), 4(e), 4(g), 4(h) and 4(k) and, in the
case of a termination occurring as described in (ii) above, under Sections 3(c),
6(a) and 6(e) and under the last sentence of Section 8, shall also remain in
effect.
10. Termination. This Agreement may be terminated for any
reason at any time by the Issuer or by the Distributor upon the giving of one
day's written notice of such termination to the other parties hereto; provided,
however, that this Agreement may not be terminated by the giving of such notice
following receipt by the Issuer of a confirmation or Terms Agreement referred to
in Section 3 relating to the purchase of Securities by the Distributor and prior
to delivery of the Securities described in such confirmation or Terms Agreement,
unless the sale and purchase of Securities contemplated thereby is rejected by
the Issuer in accordance with Section 3. Any settlement with respect to
Securities placed by the Distributor on an agency basis occurring after
termination of this Agreement shall be made in accordance with the Procedures
and the Distributor agrees, if requested by the Issuer, to take the steps
therein provided to be taken by such Distributor in connection with such
settlement.
11. Sales of Securities Denominated in a Currency other than
U.S. Dollars or of Indexed Securities. If at any time the Issuer and the
Distributor shall determine to issue and sell Securities denominated in a
currency other than U.S. dollars, which other currency
25
may include a currency unit, or with respect to which an index is used to
determine the amounts of payments of principal and any premium and interest, the
Issuer and any the Distributor may execute and deliver a supplement to this
Agreement for the purpose of making any appropriate additions to and
modifications of the terms of this Agreement (and the Procedures) applicable to
such Securities and the offer and sale thereof. The Issuer will not issue
Securities denominated in Yen otherwise than in compliance with applicable
Japanese laws, regulations and policies. In particular, the Issuer or its
designated agent shall submit such reports or information as may be required
from time to time by applicable law, regulations and guidelines promulgated by
Japanese governmental and regulatory authorities in the case of the issue and
purchase of the Securities and the Issuer shall ensure that each such Security
shall have a minimum denomination of (Y)1,000,000 and a minimum maturity of one
year or such other minimum denomination and maturity as may be allowed from time
to time by Japanese governmental and regulatory authorities.
12. Notices. Except as otherwise provided herein, all notices
and other communications hereunder shall be in writing and shall be deemed to
have been duly given if mailed or transmitted by any standard form of
telecommunication. Notices to Credit Suisse First Boston Corporation shall be
directed to it at Eleven ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
Attention: Short and Medium Term Finance Department (Facsimile No. (212)
325-8183); and notices to the Issuer shall be directed to it at The Pep Boys -
Manny, Moe & ▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇, Attention: Chief Financial Officer (Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇); or in
the case of any party hereto, to such other address or person as such party
shall specify to each other party by a notice given in accordance with the
provisions of this Section 12. Any such notice shall take effect at the time of
receipt.
13. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto, their respective successors, the
officers and directors and controlling persons referred to in Section 7 and, to
the extent provided in Section 6(f), any person who has agreed to purchase
Securities from the Issuer, and no other person will have any right or
obligation hereunder.
14. Counterparts. This Agreement and any 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.
15. Applicable Law. This Agreement and any 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 Issuer 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 this Agreement or any
Terms Agreement or the transactions contemplated hereby or thereby.
26
If the foregoing correctly sets forth our agreement, please
indicate your acceptance hereof in the space provided for that purpose below.
Very truly yours,
THE PEP BOYS - MANNY, MOE & ▇▇▇▇
By:
--------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Chairman & CEO
CONFIRMED AND ACCEPTED, as of the date first above written:
CREDIT SUISSE FIRST BOSTON CORPORATION
By:
--------------------------
Name:
Title:
SCHEDULE A
Significant Subsidiaries of the Issuer
PBY Corporation
The Pep Boys -- Manny, Moe & ▇▇▇▇ of California
Pep Boys - Manny, Moe & ▇▇▇▇ of Delaware, Inc.
Pep Boys - Manny, Moe & ▇▇▇▇ of Puerto Rico, Inc.
