Essential Utilities, Inc. 6,700,000 Shares Common Stock, Par Value $0.50 Per Share Underwriting Agreement August 11, 2020
Exhibit 1.2
EXECUTION VERSION
6,700,000 Shares
Common Stock, Par Value $0.50 Per Share
August 11, 2020
RBC Capital Markets, LLC (the “Underwriter” or “you”)
c/o RBC Capital Markets, LLC,
000 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000.
Ladies and Gentlemen:
Essential Utilities, Inc., a Pennsylvania corporation (the “Company”) and Royal Bank of Canada (acting through its agent, RBC Capital Markets, LLC) (in such capacity, the “Forward Seller”), at the Company’s request in connection with the letter agreement dated the date hereof between the Company and Royal Bank of Canada (acting through its agent, RBC Capital Markets, LLC) (in such capacity, the “Forward Purchaser”) (such letter agreement, the “Forward Sale Agreement”), relating to the forward sale by the Company, subject to the Company’s right to elect Cash Settlement or Net Share Settlement (as such terms are defined in the Forward Sale Agreement), of a number of shares of common stock, par value $0.50 per share, of the Company (“Stock”) equal to the number of Borrowed Securities (as defined below) contemplated to be sold by the Forward Seller pursuant to this Agreement, confirm their respective agreements with the Underwriter with respect to the sale by the Forward Seller and the purchase by the Underwriter of an aggregate of 6,700,000 shares of Stock (the “Borrowed Securities”). The Borrowed Securities and the Company Top-Up Securities (as defined in Section 12(a) hereof) are herein referred to collectively as the “Securities”.
On October 22, 2018, the Company entered into a Purchase Agreement (the “Acquisition Agreement”) with LDC Parent LLC, a Delaware limited liability company (“Seller”). Pursuant to the Acquisition Agreement, on the terms and subject to the conditions set forth therein, on March 16, 2020, the Company acquired (the “Acquisition”) from Seller all of the issued and outstanding limited liability company membership interests of LDC Funding LLC, a Delaware limited liability company (the “Acquired Company”), the parent of a group of natural gas public utility companies including Peoples Natural Gas Company, Peoples Gas Company, and Delta Natural Gas Co., Inc., as well as other operating subsidiaries. Except where otherwise indicated, references herein to “subsidiaries” or “affiliates” of the Company do not refer to or include the Acquired Company.
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1. The Company represents and warrants to, and agrees with, each of the Underwriter, the Forward Seller and the Forward Purchaser that:
(a) An “automatic shelf registration statement” as defined under Rule 405 under the Securities Act of 1933, as amended (the “Act”) on Form S-3 (File No. 333-223306) in respect of the Securities and other securities has been filed with the Securities and Exchange Commission (the “Commission”) not earlier than three years prior to the date hereof; such registration statement, and any post-effective amendment thereto, became effective on filing; and no stop order suspending the effectiveness of such registration statement or any part thereof has been issued and no proceeding for that purpose or pursuant to Section 8A of the Act has been initiated or, to the knowledge of the Company, threatened by the Commission, and no notice of objection of the Commission to the use of such registration statement or any post-effective amendment thereto pursuant to Rule 401(g)(2) under the Act has been received by the Company (the base prospectus filed as part of such registration statement, in the form in which it has most recently been filed with the Commission on or prior to the date of this Agreement, is hereinafter called the “Basic Prospectus”; any preliminary prospectus (including any preliminary prospectus supplement) relating to the Securities filed with the Commission pursuant to Rule 424(b) under the Act is hereinafter called a “Preliminary Prospectus”; the various parts of such registration statement, including all exhibits thereto but excluding Form T-1 and including any prospectus supplement relating to the Securities that is filed with the Commission and deemed by virtue of Rule 430B to be part of such registration statement, each as amended at the time such part of the registration statement became effective, are hereinafter collectively called the “Registration Statement”; the Basic Prospectus, as amended and supplemented immediately prior to the Applicable Time (as defined in Section 1(c) hereof), is hereinafter called the “Pricing Prospectus”; the form of the final prospectus relating to the Securities filed with the Commission pursuant to Rule 424(b) under the Act in accordance with Section 6(a) hereof is hereinafter called the “Prospectus”; any reference herein to the Basic Prospectus, the Pricing Prospectus, any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to Item 12 of Form S-3 under the Act, as of the date of such prospectus; any reference to any amendment or supplement to the Basic Prospectus, any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include any post-effective amendment to the Registration Statement, any prospectus supplement relating to the Securities filed with the Commission pursuant to Rule 424(b) under the Act and any documents filed under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and incorporated therein, in each case after the date of the Basic Prospectus, such Preliminary Prospectus, or the Prospectus, as the case may be; any reference to any amendment to the Registration Statement shall be deemed to refer to and include any annual report of the Company filed pursuant to Section 13(a) or 15(d) of the Exchange Act after the effective date of the Registration Statement that is incorporated by reference in the Registration Statement; and any “issuer free writing prospectus” as defined in Rule 433 under the Act relating to the Securities is hereinafter called an “Issuer Free Writing Prospectus”);
(b) (A) No order preventing or suspending the use of any Preliminary Prospectus or any Issuer Free Writing Prospectus has been issued by the Commission, and (B) each Preliminary Prospectus, at the time of filing thereof, conformed in all material respects to the requirements of the Act and the rules and regulations of the Commission thereunder, and did not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with the Underwriter Information (as defined in Section 10(b));
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(c) For the purposes of this Agreement, the “Applicable Time” is 9:00 a.m. (Eastern time) on the date of this Agreement. The Pricing Prospectus, as supplemented by the Issuer Free Writing Prospectus listed on Schedule II(c) hereto, if any, and the information set forth on Schedule II(d) hereto, taken together (collectively, the “Pricing Disclosure Package”), as of the Applicable Time did not, and as of the Time of Delivery (as defined in Section 5(a) of this Agreement) will not, include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; and each Issuer Free Writing Prospectus does not conflict with the information contained in the Registration Statement, the Pricing Prospectus or the Prospectus; and each Issuer Free Writing Prospectus, as supplemented by and taken together with the Pricing Disclosure Package as of the Applicable Time, did not, and as of the Time of Delivery will not, include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that this representation and warranty shall not apply to statements or omissions made in the Pricing Disclosure Package or in an Issuer Free Writing Prospectus in reliance upon and in conformity with the Underwriter Information;
(d) The documents incorporated by reference in the Registration Statement, the Pricing Prospectus and the Prospectus, when they became effective or were filed with the Commission, as the case may be, conformed in all material respects to the requirements of the Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder, and none of such documents contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading; any further documents so filed and incorporated by reference in the Registration Statement, the Pricing Prospectus and the Prospectus or any further amendment or supplement thereto, when such documents become effective or are filed with the Commission, as the case may be, will conform in all material respects to the requirements of the Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with the Underwriter Information; and no such documents were filed with the Commission since the Commission’s close of business on the business day immediately prior to the date of this Agreement and prior to the execution of this Agreement, except as listed on Schedule II(b) hereto;
(e) The Registration Statement conforms, and the Prospectus and any further amendments or supplements to the Registration Statement and the Prospectus will conform, in all material respects to the requirements of the Act and the rules and regulations of the Commission thereunder and do not and will not, as of the applicable effective date as to each part of the Registration Statement, as of the applicable filing date as to the Prospectus and any amendment or supplement thereto, and as of the Time of Delivery, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with the Underwriter Information;
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(f) Since the date of the Company’s or the Acquired Company’s, as applicable, latest audited financial statements included or incorporated by reference in the Pricing Prospectus, (i) none of the Company, any of its subsidiaries, the Acquired Company or any of the Acquired Company’s subsidiaries has sustained any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, (ii) there has been no adverse change in the condition, financial or otherwise, or in the earnings or business affairs of the Company, any of its subsidiaries, the Acquired Company or any of the Acquired Company’s subsidiaries, and (iii) none of the Company, any of its subsidiaries, the Acquired Company or any of the Acquired Company’s subsidiaries has entered into any transaction or agreement (whether or not in the ordinary course of business), or incurred any liability or obligation (direct or contingent), that, in the case of clause (i), (ii) and (iii), is material to the Company and its subsidiaries (including the Acquired Company and its subsidiaries), taken as a whole, otherwise than as set forth or contemplated in the Pricing Prospectus, including drawing under the Company’s revolving credit facility and term loan facilities and drawings under the Acquired Company’s term loan facility in each case as disclosed in the Pricing Prospectus (the “Post Balance Sheet Drawings”). Since the respective dates as of which information is given in the Registration Statement and the Pricing Prospectus and except as disclosed therein, there has not been (i) any change in the capital stock (other than as a result of (A) the exercise, if any, of stock options or the award, if any, of stock options or restricted stock in the ordinary course of business pursuant to the Company’s equity plans that are described in the Pricing Prospectus and the Prospectus or (B) the issuance, if any, of Stock, upon conversion of Company securities as described in the Pricing Prospectus and the Prospectus) or long term debt of the Company, any of its subsidiaries, the Acquired Company or any of the Acquired Company’s subsidiaries, or (ii) any Combined Company Material Adverse Effect (as defined below). As used in this Agreement, (i) “Combined Company Material Adverse Effect” shall mean any material adverse effect on the financial condition, business or results of operations of the Company and its subsidiaries (including the Acquired Company and its subsidiaries), taken as a whole except as set forth or contemplated in the Pricing Prospectus and (ii) “Material Adverse Effect” shall mean any material adverse effect on the financial condition, business or results of operations of the Company and its subsidiaries, taken as a whole except as set forth or contemplated in the Pricing Prospectus. Except as disclosed in the Pricing Prospectus, to the knowledge of the Company, there are no pending actions, suits or proceedings against or affecting the Acquired Company, or any of its subsidiaries or any of their respective properties that, if determined adversely to the Acquired Company or any of its subsidiaries, would have, or would reasonably be expected to have, individually or in the aggregate, a material adverse effect on the financial condition, business or results of operations of the Acquired Company and its subsidiaries, taken as a whole; and, to the knowledge of the Company, no such actions, suits or proceedings are threatened by governmental authorities or by others;
(g) Except as would not have, and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, the Company and its subsidiaries have good and marketable title to all real property or have good and valid leasehold title to or hold valid rights to lease or otherwise occupy, use, operate or access all real property and have good and marketable title to all personal property owned by them, in each case free and clear of all liens, encumbrances and defects except such as are described in the Pricing Prospectus or such as do not interfere with the use made and proposed to be made of such property by the Company and its subsidiaries;
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(h) Each of the Company and each of its “significant subsidiaries” (as defined in Rule 1-02 of Regulation S-X under the Exchange Act) (“Significant Subsidiaries”) has been (i) duly organized and is validly existing and in good standing under the laws of its jurisdiction of organization, with power and authority (corporate and other) to own its properties and conduct its business as described in the Pricing Prospectus, and (ii) duly qualified as a foreign corporation for the transaction of business and is in good standing under the laws of each other jurisdiction in which it owns or leases properties or conducts any business so as to require such qualification, except where the failure to be so qualified in any such jurisdiction would not have, and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect;
(i) The Company has an authorized capitalization as set forth in the Pricing Prospectus and all of the issued shares of capital stock of the Company have been duly and validly authorized and issued and are fully paid and non-assessable and conform to the description of the Stock contained in the Pricing Disclosure Package and the Prospectus; all of the issued options, warrants and other rights to purchase or exchange any securities for shares of the Company’s capital stock have been duly and validly authorized and issued and conform to the description thereof contained in the Pricing Disclosure Package and the Prospectus; and all of the issued shares of capital stock of each subsidiary of the Company have been duly and validly authorized and issued, are fully paid and non-assessable and (except for directors’ qualifying shares) are owned directly or indirectly by the Company, free and clear of all liens, encumbrances, equities or claims, except for such liens or encumbrances described in the Pricing Prospectus and the Prospectus; and the Company Top-Up Securities, if any, to be issued and sold by the Company hereunder have been duly and validly authorized and, when issued and delivered against payment therefor as provided herein, will be duly and validly issued and fully paid and non-assessable and will conform in all material respects to the description of the Stock contained in the Pricing Disclosure Package and the Prospectus; and the issuance of such Securities is not subject to any preemptive or similar rights. A number of shares of Stock equal to the Share Cap (as such term is defined in the Forward Sale Agreement) (the “Share Cap”), have been duly and validly authorized and, when issued and delivered by the Company to the Forward Purchaser pursuant to the Forward Sale Agreement against payment of any consideration required to be paid by the Forward Purchaser pursuant to the terms of the Forward Sale Agreement will be duly and validly issued and fully paid and non-assessable and will conform in all material respects to the description of the Stock contained in the Pricing Disclosure Package and the Prospectus; and the issuance of such Securities is not subject to any preemptive or similar rights;
(j) The issue and sale of the Securities and the compliance by the Company with this Agreement and the Forward Sale Agreement and the consummation of the transactions contemplated herein and therein and in the Pricing Prospectus will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, (A) any indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which the Company, any of its subsidiaries, the Acquired Company or any of the Acquired Company’s subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company, any of its subsidiaries, the Acquired Company or any of the Acquired
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Company’s subsidiaries is subject, (B) the certificate of incorporation or by-laws (or other applicable organizational document) of the Company, any of its subsidiaries, the Acquired Company or any of the Acquired Company’s subsidiaries, or (C) any statute or any judgment, order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company, any of its subsidiaries, the Acquired Company or any of the Acquired Company’s subsidiaries or any of their properties except, in the case of (A), for such defaults, breaches, or violations that would not have, and would not reasonably be expected to have, individually or in the aggregate, a Combined Company Material Adverse Effect; and no consent, approval, authorization, order, registration or qualification of or with any such court or governmental agency or body is required in connection with the execution, delivery and performance of this Agreement or the Forward Sale Agreement, nor the consummation of the transactions contemplated herein or therein, except (y) such as have been obtained under the Act and (z) for such consents, approvals, authorizations, orders, registrations or qualifications as may be required under state securities or Blue Sky laws in connection with the purchase and distribution of the Securities by the Underwriter;
(k) (i) Neither the Company nor any of its Significant Subsidiaries is in violation of its certificate of incorporation or by-laws (or other applicable organization document), and (ii) neither the Company nor any of its subsidiaries is (A) in violation of any statute or any judgment, order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company or any of its subsidiaries or any of their properties or (B) in default in the performance or observance of any obligation, agreement, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which it is a party or by which it or any of its properties may be bound, except, in the case of the foregoing clause (ii), for such defaults as would not have, and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect;
(l) The statements set forth in (i) the Pricing Prospectus and Prospectus under the caption “Description of Capital Stock”, insofar as they purport to constitute a summary of the terms of the Stock, and (ii) (A) the Pricing Prospectus and the Prospectus under the caption “Certain United States Federal Income and Estate Tax Considerations to Non-U.S. Holders” and under the caption “Underwriting (Conflicts of Interest)”, and (B) Parts I and II of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019 under the caption “Economic Regulation” (in each place that it appears) and under the caption “Environmental, Health and Safety Regulation”, insofar as they purport to describe the provisions of laws and documents, are accurate, complete and fair in all material respects;
(m) Other than as set forth in the Pricing Prospectus, there are no legal or governmental proceedings pending to which the Company or any of its subsidiaries is a party or of which any property or assets of the Company or any of its subsidiaries is the subject, which, if determined adversely to the Company or any of its respective subsidiaries, would have, or would reasonably be expected to have, individually or in the aggregate a Material Adverse Effect or have a material adverse effect on the ability of the Company to perform its obligations under this Agreement or the Forward Sale Agreement, including the issuance and sale of the Securities contemplated herein and therein; and, to the knowledge of the Company, no such proceedings are threatened by governmental authorities or by others;
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(n) The Company is not and, after giving effect to (i) the offering and sale of the Company Top-Up Securities, if any, and the application of the proceeds thereof and (ii) the issuance, sale and delivery of Stock upon settlement of the Forward Sale Agreement, if any, upon such settlement, will not be an “investment company”, as such term is defined in the Investment Company Act of 1940, as amended (the “Investment Company Act”);
(o) (i) (A) At the time of filing the Registration Statement, (B) at the time of the most recent amendment thereto for the purposes of complying with Section 10(a)(3) of the Act (whether such amendment was by post-effective amendment, incorporated report filed pursuant to Section 13 or 15(d) of the Exchange Act or form of prospectus), and (C) at the time the Company or any person acting on its behalf (within the meaning, for this clause only, of Rule 163(c) under the Act) made any offer relating to the Securities in reliance on the exemption of Rule 163 under the Act, the Company was a “well-known seasoned issuer” as defined in Rule 405 under the Act; and (ii) at the time of filing the Registration Statement and any post-effective amendment thereto, at the earliest time thereafter that the Company or any offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) under the Act) of the Securities, and at the date hereof, the Company was not and is not an “ineligible issuer,” as defined in Rule 405 under the Act;
(p) (i) PricewaterhouseCoopers LLP, who have certified certain financial statements of the Company and its subsidiaries, and have audited the Company’s internal control over financial reporting and management’s assessment thereof and (ii) to the knowledge of the Company, Deloitte & Touche LLP, who have certified certain financial statements of the Acquired Company and its subsidiaries are each independent public accountants as required by the Act and the rules and regulations of the Commission thereunder;
(q) The Company maintains a system of internal control and maintains disclosure controls and procedures, in each case that complies with the requirements of the Exchange Act and is otherwise in compliance in all material respects with the requirements of the Xxxxxxxx-Xxxxx Act of 2002 and the rules and regulations promulgated in connection therewith. The Company’s internal control over financial reporting and disclosure controls and procedures are each effective, and the Company is not aware of any material weaknesses in its internal control over financial reporting. The interactive data in eXtensible Business Reporting Language (“XBRL”) included or incorporated by reference in the Registration Statement, the Pricing Prospectus or the Prospectus presents fairly the information called for in all material respects and has been prepared in accordance with the Commission’s rules and guidelines applicable thereto.
(r) Except as disclosed in the Pricing Prospectus, since the date of the latest audited financial statements of the Company, included or incorporated by reference in the Pricing Prospectus, there has been no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting;
(s) Neither the Company nor any of its subsidiaries nor, to the knowledge of the Company, any director, officer, agent, employee, affiliate or other person associated with or acting on behalf of the Company or any of its subsidiaries has (A) made, offered, promised or authorized any contribution, gift, entertainment or other expense (or taken any act in furtherance thereof) in violation of an applicable anti-bribery or anti-corruption
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law; (B) made, offered, promised or authorized any direct or indirect payment in violation of an applicable anti-bribery or anti-corruption law; or (C) violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977, the Xxxxxxx Xxx 0000 of the United Kingdom or any other applicable anti-bribery or anti-corruption law;
(t) The operations of the Company and its subsidiaries are and have been conducted at all times in compliance in all material respects with the requirements of applicable anti-money laundering laws, including, but not limited to, the Bank Secrecy Act of 1970, as amended by the USA PATRIOT ACT of 2001, and the rules and regulations promulgated thereunder, and the anti-money laundering laws of the various jurisdictions in which the Company and its subsidiaries conduct business (collectively, the “Money Laundering Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its subsidiaries with respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened;
(u) Neither the Company nor any of its subsidiaries nor, to the knowledge of the Company, any director, officer, agent, employee or affiliate of the Company or any of its subsidiaries, is currently the subject or the target of any sanctions administered or enforced by the U.S. Government, including, the Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”), or the U.S. Department of State and including, without limitation, the designation as a “specially designated national” or “blocked person,” the European Union, Her Majesty’s Treasury, or the United Nations Security Council (collectively, “Sanctions”), nor is the Company or any of its subsidiaries located, organized or resident in a country or territory that is the subject or target of Sanctions (including, without limitation, Crimea, Cuba, Iran, North Korea, and Syria), and the Company will not directly or knowingly indirectly use the proceeds of the sale of the Securities hereunder or from the settlement of the Forward Sale Agreement, as the case may be, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity (A) for the purpose of funding or facilitating any unlawful activities of or business with any person, or in any country or territory, that, at the time of such funding, is the subject or the target of Sanctions or (B) in any other manner that will result in a violation by any person (including any person participating in the transaction, whether as underwriter, advisor, investor or otherwise) of Sanctions;
(v) This Agreement has been duly authorized, executed and delivered by the Company;
(w) The Forward Sale Agreement has been duly authorized, executed and delivered by the Company and is a valid and legally binding agreement of the Company enforceable against the Company in accordance with its terms, except as enforceability thereof may be limited by considerations of public policy, bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors’ rights and to general equity principles;
(x) Each of this Agreement, the Forward Sale Agreement and the other transaction documents contemplated to be executed in connection herewith or therewith (collectively, the “Transaction Documents”) conforms or, when and if duly executed and delivered in accordance with its terms, will conform in all material respects to the description thereof (if any) contained in the Pricing Prospectus and the Prospectus;
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(y) The financial statements of the Company included or incorporated by reference in the Registration Statement, the Pricing Prospectus and the Prospectus present fairly, in all material respects, the financial position of the Company and its subsidiaries at the dates indicated and the statement of operations, stockholders’ equity and cash flows of the Company and its subsidiaries for the periods specified; and said financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) applied on a consistent basis throughout the periods involved. The pro forma financial information of the Company, and the related notes thereto, included or incorporated by reference in the Registration Statement, the Pricing Prospectus and the Prospectus fairly represent in all material respects the information therein, has been prepared in accordance with Regulation S-X under the Exchange Act and provide a reasonable basis for presenting the significant effects of the transactions and circumstances referred to therein, and the assumptions used in preparation thereof, in the reasonable judgment of the Company’s management and subject to the qualifications therein, are reasonable; the related pro forma adjustments are directly attributable to the transactions or events described therein and give appropriate effect to those assumptions in all material respects; and the pro forma columns therein reflect the proper application of those adjustments to the corresponding historical financial statement in all material respects;
(z) To the knowledge of the Company, the financial statements of the Acquired Company included or incorporated by reference in the Registration Statement, the Pricing Prospectus and the Prospectus, together with the related schedules and notes, present fairly, in all material respects, the financial position of the Acquired Company and its subsidiaries at the dates indicated and the statement of operations, stockholders’ equity and cash flows of the Acquired Company and its subsidiaries for the periods specified; and said financial statements have been prepared in conformity with GAAP applied on a consistent basis throughout the periods involved. To the knowledge of the Company, the supporting schedules of the Acquired Company, if any, present fairly, in all material respects, in accordance with GAAP the information required to be stated therein;
(aa) Except with respect to taxes that are being contested in good faith or as otherwise disclosed in the Pricing Prospectus, (i) each of the Company and its subsidiaries have paid all federal, state, local and foreign taxes required to be paid and filed all tax returns required to be filed, in each case, through the date hereof, except for such failures to pay or file as would not have, and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, and (ii) there is no tax deficiency that has been asserted against the Company, any of its subsidiaries or any of their respective properties or assets that would have, or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect;
(bb) The Company and its subsidiaries possess all licenses, certificates, permits and other authorizations issued by, and have made all declarations and filings with, the appropriate federal, state, local or foreign governmental or regulatory authorities that are necessary for the ownership or lease of their respective properties or the conduct of their respective businesses as described in the Registration Statement, Pricing Prospectus and the Prospectus, except where the failure to possess or make the same would not have, and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect; and, except as described in the Registration Statement, the Pricing Prospectus and the Prospectus, neither the Company nor any of its subsidiaries has received notice of any revocation or modification of any material license, certificate, permit or authorization or has any reason to believe that any material license, certificate, permit or authorization will not be renewed in the ordinary course;
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(cc) Except as otherwise disclosed in the Pricing Prospectus, (i) the Company and its subsidiaries (A) are, and at all prior times were, in compliance with any and all applicable federal, state, local and foreign laws, rules, regulations, legally binding requirements or judicial or administrative decisions and orders relating to the protection of the environment or natural resources, or human health or safety, to the extent relating to exposure to hazardous or toxic substances or wastes, pollutants or contaminants (collectively, “Environmental Laws”), including with respect to any real property currently or formerly owned or operated by the Company or any of its subsidiaries that is known or reasonably anticipated to be contaminated with any hazardous or toxic substances or wastes, pollutants or contaminants, (B) have received and are in compliance with all permits, licenses, or other legal authorizations or approvals required of them under applicable Environmental Laws to conduct their respective businesses as currently conducted and (C) have not received written notice of any liability, violation or claim under or relating to any Environmental Laws, including for human exposure to, or the investigation or remediation of any disposal or release of, hazardous or toxic substances or wastes, pollutants or contaminants, and have no knowledge of any event or condition that would reasonably be expected to result in any such notice, and (ii) to the knowledge of the Company, there are no costs or liabilities associated with Environmental Laws of or relating to the Company or any of its subsidiaries, except in the case of each of (i) and (ii) above, as would not have, and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect; and (iii) (A) there are no judicial or administrative proceedings that are pending against the Company or any of its subsidiaries under any Environmental Laws in which a governmental entity is also a party, and, to the knowledge of the Company, no such proceedings are threatened, in each case other than such proceedings regarding which it is reasonably believed no monetary sanctions of $100,000 or more will be imposed, and (B) the Company and its subsidiaries are not aware of any issues regarding compliance with Environmental Laws, or liabilities or other obligations under Environmental Laws or concerning hazardous or toxic substances or wastes, pollutants or contaminants, that would have, or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect;
(dd) Except as disclosed in the Registration Statement, the Pricing Prospectus and the Prospectus, (i) the Company, its subsidiaries and any “employee benefit plan” (as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended, and the regulations and published interpretations thereunder (collectively, “ERISA”)) established or maintained by the Company, its subsidiaries or their ERISA Affiliates (as defined below) are in compliance with ERISA, and (ii) no “reportable event” (as defined under ERISA) has occurred or is reasonably expected to occur with respect to any “employee benefit plan” established or maintained by the Company, any of its subsidiaries or any of their ERISA Affiliates, in either case, other than as would not have, and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. “ERISA Affiliate” means, with respect to the Company and its subsidiaries, any member of any group of organizations described in Sections 414(b), (c), (m) or (o) of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), of which the Company or such subsidiary is a member;
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(ee) Except as described in the Pricing Prospectus and except as would not have, and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, (i) no material labor dispute with the employees of the Company or any of its subsidiaries exists or, to the knowledge of the Company, is contemplated or threatened and (ii) the Company is not aware of any existing or imminent labor disturbance by the employees of any of principal suppliers or contractors;
(ff) The Company and its subsidiaries have insurance covering their properties, operations, personnel and businesses, including business interruption insurance, which insurance is in amounts and insures against such losses and risks as the Company believes are adequate to protect the Company and its subsidiaries; and neither the Company nor any of its subsidiaries has (i) received notice from any insurer under a material insurance policy or agent of such insurer that material capital improvements or other expenditures are required or necessary to be made in order to continue such insurance or (ii) any reason to believe that it will not be able to renew its existing material insurance coverage as and when such coverage expires or to obtain similar coverage at reasonable cost from similar insurers as may be necessary to continue its business;
(gg) Except as would not have, and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, the Company and each of its subsidiaries owns or possesses, or can acquire on reasonable terms, adequate patents, patent licenses, trademarks, service marks and trade names necessary to carry on its business as presently conducted, and neither the Company nor any of its subsidiaries has received any notice of infringement of or conflict with asserted rights of others with respect to any patents, patent licenses, trademarks, service marks or trade names that in the aggregate, if the subject of an unfavorable decision, ruling or finding, would have, or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect;
(hh) The Company and its subsidiaries (i) have implemented and maintain commercially reasonable controls, policies, procedures, and safeguards to maintain and protect their material confidential information and the integrity, continuous operation, redundancy and security of all information technology assets and equipment, computers, systems, networks, hardware, software, websites, applications, and databases (collectively, “IT Systems”) and data (including all personal, personally identifiable, sensitive, confidential or regulated data (“Personal Data”)) used in connection with their respective businesses, and there have been no breaches, violations, outages or unauthorized uses of or accesses to the same, except for those that have been remedied without material cost or liability or the duty to notify any other person, except as would not, have, and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect and (ii) are in material compliance with all applicable laws or statutes and all judgments, orders, rules and regulations of any court or arbitrator or governmental or regulatory authority relating to the privacy and security of IT Systems and Personal Data and to the protection of such IT Systems and Personal Data from unauthorized use, access, misappropriation or modification;
(ii) The Company has not taken, directly or indirectly, any action designed to or that could reasonably be expected to cause or result in any stabilization or manipulation of the price of the Securities;
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(jj) To the knowledge of the Company, since the date of the latest financial statements of the Acquired Company included or incorporated by reference in the Pricing Prospectus, and except as disclosed in the Pricing Prospectus, there has not been any material adverse change in the business, financial condition, or results of operations of Acquired Company and its subsidiaries, taken as a whole;
(kk) To the knowledge of the Company, (i) each party to the Acquisition Agreement was, prior to the Acquisition, in compliance in all material respects with its respective covenants and agreements contained in the Acquisition Agreement and required to be performed or complied with by such party prior to the Acquisition and (ii) all representations and warranties made by the Seller in the Acquisition Agreement are, treating such Acquisition Agreement as still in effect, true and correct (for the avoidance of doubt, giving effect to any limitation as to “materiality” or “Material Adverse Effect” (as defined in the Acquisition Agreement) or similar limitation as set forth in such representations and warranties); and
(ll) Immediately after any sale of Stock by the Company or the Forward Seller hereunder, the aggregate amount of Stock that has been issued and sold by the Company or the Forward Seller hereunder shall not exceed the aggregate amount of Stock registered under the Registration Statement (in this regard, the Company acknowledges and agrees that the Underwriter shall have no responsibility for maintaining records with respect to the aggregate amount of Stock sold, or of otherwise monitoring the availability of the Stock for sale, under the Registration Statement).
2. The Forward Seller represents and warrants to, and agrees with, the Underwriter and the Company that:
(a) This Agreement has been duly authorized, executed and delivered by the Forward Seller and, at the Time of Delivery, the Forward Seller will have full right, power and authority to sell, transfer and deliver the Borrowed Securities;
(b) The Forward Sale Agreement has been duly authorized, executed and delivered by the Forward Purchaser and constitutes a valid and legally binding agreement of the Forward Purchaser, enforceable against the Forward Purchaser in accordance with its terms, except as enforceability thereof may be limited by considerations of public policy, bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors’ rights and to general equity principles; and
(c) The Forward Seller shall, at the Time of Delivery, have the free and unqualified right to transfer any Borrowed Securities, to the extent that it is required to transfer such Borrowed Securities hereunder, free and clear of any security interest, mortgage, pledge, lien, charge, claim, equity or encumbrance of any kind; and upon delivery of such Borrowed Securities and payment of the purchase price therefor as herein contemplated, assuming the Underwriter has no notice of any adverse claim, such Underwriter shall have the free and unqualified right to transfer the Borrowed Securities purchased by it from the Forward Seller, free and clear of any security interest, mortgage, pledge, lien, charge, claim, equity or encumbrance of any kind.
3. (a) Subject to the terms and conditions herein set forth, each of the Forward Seller (with respect to the Borrowed Securities) and the Company (with respect to any Company Top-Up Securities), severally and not jointly, agrees to sell to the Underwriter, and the Underwriter agrees to purchase from the Forward Seller (with respect to the Borrowed Securities) and the Company (with respect to any Company Top-Up Securities) such Securities at a purchase price per share of $46.00.
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(b) If (i) any of the conditions set forth in Section 9 hereof have not been satisfied at or prior to the Time of Delivery or (ii) any of the conditions to effectiveness set forth in the Forward Sale Agreement shall not have been satisfied at or prior to the Time of Delivery (together, the “Conditions”), the Forward Seller, in its sole discretion, may elect not to borrow and deliver for sale to the Underwriter the Borrowed Securities. In addition, in the event that, in the Forward Purchaser determines in good faith, after using commercially reasonable efforts, that (A) the Forward Seller or an affiliate thereof is unable to borrow and deliver for sale under this Agreement a number of shares of Stock equal to the number of Borrowed Securities or (B) the Forward Seller or its affiliate would incur a stock loan cost of more than a rate equal to 200 basis points per annum to do so, in each case, the Forward Seller shall only be require to deliver for sale to the Underwriter at the Time of Delivery the aggregate number of shares of Stock that the Forward Seller is able to so borrow at or below such cost.
(c) If the Forward Seller elects, pursuant to Section 3(b) hereof, not to borrow and deliver for sale to the Underwriter at the Time of Delivery the total number of Borrowed Securities, the Forward Seller will notify the Company no later than 5:00 p.m., New York City time, on the business day prior to the Time of Delivery.
4. It is understood that the Underwriter proposes to offer the Securities for sale upon the terms and conditions set forth in the Pricing Prospectus and the Prospectus.
5. (a) Payment for the Securities shall be made in federal or other funds immediately available in New York City to the account specified to the Underwriter by the Forward Seller (with respect to any Borrowed Securities) and to the account specified to the Underwriter by the Company (with respect to any Company Top-Up Securities) against delivery of such Securities for the account of the Underwriter through the facilities of the Depository Trust Company (“DTC”). Such Securities shall be made available for checking at least twenty-four hours prior to the Time of Delivery with respect thereto at the office of DTC or its designated custodian (the “Designated Office”). The time and date of such delivery and payment shall be 9:30 a.m., New York City time, on August 13, 2020, or such other time and date as the Underwriter and the Company may agree upon in writing. Such time and date for delivery of the Securities is herein called the “Time of Delivery”.
(b) The documents to be delivered at the Time of Delivery by or on behalf of the parties hereto pursuant to Section 9 hereof, including the cross-receipt for the Securities and any additional documents requested by the Underwriter pursuant to Section 9(l) hereof, will be delivered at the offices of Cravath, Swaine & Xxxxx LLP, 000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000 (the “Closing Location”), and the Securities will be delivered at the Designated Office, all at the Time of Delivery. A meeting will be held at the Closing Location at 5:00 p.m., New York City time, on the New York Business Day next preceding the Time of Delivery, at which meeting the final drafts of the documents to be delivered pursuant to the preceding sentence will be available for review by the parties hereto. For the purposes of this Agreement, “New York Business Day” shall mean each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in New York City are generally authorized or obligated by law or executive order to close.
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6. The Company agrees with the Forward Seller, the Forward Purchaser and the Underwriter:
(a) To prepare the Prospectus in a form approved by you and to file such Prospectus pursuant to Rule 424(b) under the Act not later than the Commission’s close of business on the second business day following the date of this Agreement; to make no further amendment or any supplement to the Registration Statement, the Basic Prospectus or the Prospectus prior to the Time of Delivery which shall be reasonably disapproved by you promptly after reasonable notice thereof; to advise you, promptly after it receives notice thereof, of the time when any amendment to the Registration Statement has been filed or becomes effective or any amendment or supplement to the Prospectus has been filed and to furnish you with copies thereof; to file promptly all other material required to be filed by the Company with the Commission pursuant to Rule 433(d) under the Act; to file promptly all reports and any definitive proxy or information statements required to be filed by the Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of the Prospectus and for so long as the delivery of a prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under the Act) is required in connection with the offering or sale of the Securities; to advise you, promptly after it receives notice thereof, of the issuance by the Commission of any stop order or of any order preventing or suspending the use of any Preliminary Prospectus or other prospectus in respect of the Securities, of any notice of objection of the Commission to the use of the Registration Statement or any post-effective amendment thereto pursuant to Rule 401(g)(2) under the Act, of the suspension of the qualification of the Securities for offering or sale in any jurisdiction, of the initiation or threatening of any proceeding for any such purpose or pursuant to Section 8A of the Act, or of any request by the Commission for the amending or supplementing of the Registration Statement or the Prospectus or for additional information; and, in the event of the issuance of any stop order or of any order preventing or suspending the use of any Preliminary Prospectus or other prospectus or suspending any such qualification, to promptly use its best efforts to obtain the withdrawal of such order; and in the event of any such issuance of a notice of objection, promptly to take such steps including, without limitation, amending the Registration Statement or filing a new registration statement, at its own expense, as may be necessary to permit offers and sales of the Securities by the Underwriter (references herein to the Registration Statement shall include any such amendment or new registration statement);
(b) If required by Rule 430B(h) under the Act, to prepare a form of prospectus in a form approved by you and to file such form of prospectus pursuant to Rule 424(b) under the Act not later than may be required by Rule 424(b) under the Act; and to make no further amendment or supplement to such form of prospectus which shall be disapproved by you promptly after reasonable notice thereof;
(c) If by the third anniversary (the “Renewal Deadline”) of the initial effective date of the Registration Statement, any of the Securities remain unsold by the Underwriter, the Company will file, if it has not already done so and is eligible to do so, a new automatic shelf registration statement relating to the Securities, in a form satisfactory to you. If at the Renewal Deadline the Company is no longer eligible to file an automatic shelf registration statement, the Company will, if it has not already done so, file a new shelf registration statement relating to the Securities, in a form satisfactory to you and will use its best efforts to cause such registration statement to be declared effective within 180 days after the Renewal Deadline. The Company will take all other action necessary or appropriate to permit the public offering and sale of the Securities to continue as contemplated in the expired registration statement relating to the Securities. References herein to the Registration Statement shall include such new automatic shelf registration statement or such new shelf registration statement, as the case may be;
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(d) Promptly from time to time to take such action as you may reasonably request to qualify the Securities for offering and sale under the securities laws of such jurisdictions as you may reasonably request and to comply with such laws so as to permit the continuance of sales and dealings therein in such jurisdictions for as long as may be necessary to complete the distribution of the Securities, provided that in connection therewith the Company shall not be required to qualify as a foreign corporation or to file a general consent to service of process in any jurisdiction;
(e) Prior to 10:00 a.m., New York City time, on the New York Business Day next succeeding the date of this Agreement and from time to time, to furnish the Underwriter with written and electronic copies of the Prospectus in New York City in such quantities as the Underwriter may reasonably request, and, if the delivery of a prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under the Act) is required at any time prior to the expiration of nine months after the time of issue of the Prospectus in connection with the offering or sale of the Securities and if at such time any event shall have occurred 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 in order to make the statements therein, in the light of the circumstances under which they were made when such Prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under the Act) is delivered, not misleading, or, if for any other reason it shall be necessary during such same period to amend or supplement the Prospectus or to file under the Exchange Act any document incorporated by reference in the Prospectus in order to comply with the Act or the Exchange Act, to notify you and upon your request to file such document and to prepare and furnish without charge to the Underwriter and to any dealer in securities as many written and electronic copies as you may from time to time reasonably request of an amended Prospectus or a supplement to the Prospectus which will correct such statement or omission or effect such compliance; and in case the Underwriter is required to deliver a prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under the Act) in connection with sales of any of the Securities at any time nine months or more after the time of issue of the Prospectus, upon your request but at the expense of the Underwriter, to prepare and deliver to the Underwriter as many written and electronic copies as the Underwriter may request of an amended or supplemented Prospectus complying with Section 10(a)(3) of the Act;
(f) To the extent not otherwise provided in the Company’s Exchange Act filings to make generally available to its securityholders as soon as practicable, but in any event not later than sixteen months after the effective date of the Registration Statement (as defined in Rule 158(c) under the Act), an earnings statement of the Company and its subsidiaries (including the Acquired Company and its subsidiaries) (which need not be audited) complying with Section 11(a) of the Act and the rules and regulations of the Commission thereunder (including, at the option of the Company, Rule 158);
(g) During the period beginning from the date hereof and continuing to and including the date 60 days after the date of the Prospectus, not to (i) offer, sell, contract to sell, pledge, grant any option to purchase, make any short sale or otherwise transfer or dispose of, directly or indirectly, or publicly file with the Commission a registration statement under the Act relating to, any Stock, any options, rights or warrants to purchase Stock or any securities convertible into or exchangeable for, or substantially similar to, Stock, (ii) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the Stock or any such other securities, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Stock or such other securities, in cash or otherwise, or (iii) publicly disclose the intention to take any of the actions contemplated by clause (i) or (ii) above, in each case without the prior written consent of the Underwriter; provided, however, that the foregoing restrictions shall not apply to (A) the issuance of shares of Stock, or any securities convertible into or exchangeable for Stock, pursuant to employee equity or equity-based incentive plans, employee stock purchase
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plans or dividend reinvestment plans existing on, or upon the conversion or exchange of convertible or exchangeable securities outstanding as of, the date of this Agreement and described in the Pricing Prospectus and the Prospectus, (B) the filing of a registration statement on Form S-8 in connection with the registration of shares of Stock issuable under any employee equity or equity-based plans or employee stock purchase plans existing on the date of this Agreement and described in the Pricing Prospectus and the Prospectus, (C) the Securities to be sold hereunder, (D) any shares of Stock issued and delivered pursuant to the Forward Sale Agreement, (E) the issuance of shares of Stock in connection with the acquisition of the assets of, or a majority of controlling portion of the equity of, or a business combination or a joint venture with, another entity in connection with such business combination or a joint venture with, another entity in connection with such business combination or such acquisition by the Company or any of its subsidiaries of such entity and (F) the issuance of shares of Stock (including without limitation, restricted stock or restricted stock awards) in connection with joint ventures, commercial relationships or other strategic transactions, provided that the aggregate number of shares issued or issuable pursuant to clauses (E) and (F) does not exceed 10% of the number of shares of Stock contemplated to be outstanding immediately after the offering of the Securities to be issued and sold to the Underwriter pursuant to this Agreement and the Forward Sale Agreement (assuming full physical settlement of the Forward Sale Agreement applies), and prior to such issuance, each recipient of any such securities shall execute and deliver to the Underwriter an agreement substantially in the form of Annex III hereto;
(h) To pay the required Commission filing fees relating to the Securities within the time required by Rule 456(b)(1) under the Act without regard to the proviso therein and otherwise in accordance with Rules 456(b) and 457(r) under the Act;
(i) To use the net proceeds received by it from the sale of the Securities pursuant to this Agreement, if any, and the net proceeds, if any, due upon settlement of the Forward Sale Agreement, in each case, in the manner specified in the Pricing Prospectus under the caption “Use of Proceeds”;
(j) To use its best efforts to list, subject to notice of issuance, (i) the Company Top-Up Securities to be issued and sold by the Company hereunder, if any, and (ii) the a number of shares of Stock equal to the Share Cap to be issued to the Forward Purchaser pursuant to the Forward Sale Agreement, whether pursuant to Physical Settlement, Net Share Settlement or as a result of an ISDA Event (as such terms are defined in the Forward Sale Agreement), or otherwise, on the New York Stock Exchange (the “NYSE”); and
(k) Upon request of the Underwriter, to furnish, or cause to be furnished, to the Underwriter an electronic version of the Company’s trademarks, servicemarks and corporate logo for use on the website, if any, operated by the Underwriter for the purpose of facilitating the on-line offering of the Securities (the “License”); provided, however, that the License shall be used solely for the purpose described above, is granted without any fee and may not be assigned or transferred.
7. (a) (i) The Company represents and agrees that, without the prior consent of the Underwriter, it has not made and will not make any offer relating to the Securities that would constitute a “free writing prospectus” as defined in Rule 405 under the Act; (ii) the Underwriter represents and agrees that, without the prior consent of the Company, it has not made and will not make any offer relating to the Securities that would constitute a free writing prospectus required to be filed with the Commission; (iii) any such free writing prospectus the use of which has been consented to by the Company and the Underwriter is listed on Schedule II(a) or Schedule II(c) hereto;
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(b) The Company has complied and will comply with the requirements of Rule 433 under the Act applicable to any Issuer Free Writing Prospectus, including timely filing with the Commission or retention where required and legending; and
(c) The Company agrees that if at any time following issuance of an Issuer Free Writing Prospectus any event occurred or occurs as a result of which such Issuer Free Writing Prospectus would conflict with the information in the Registration Statement, the Pricing Prospectus or the Prospectus or would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances then prevailing, not misleading, the Company will give prompt notice thereof to the Underwriter and, if requested by the Underwriter, will prepare and furnish without charge to the Underwriter an Issuer Free Writing Prospectus or other document which will correct such conflict, statement or omission; provided, however, that this representation and warranty shall not apply to any statements or omissions in an Issuer Free Writing Prospectus made in reliance upon and in conformity with the Underwriter Information.
8. The Company covenants and agrees with the Underwriter that the Company will pay or cause to be paid the following: (i) the fees, disbursements and expenses of the Company’s counsel and accountants and the Acquired Company’s accountants in connection with the registration of the Securities under the Act and all other expenses in connection with the preparation, printing, reproduction and filing of the Registration Statement, the Basic Prospectus, any Preliminary Prospectus, any Issuer Free Writing Prospectus and the Prospectus and amendments and supplements thereto and the mailing and delivering of copies thereof to the Underwriter and dealers; (ii) the cost of printing or producing any of the Transaction Documents (including any compilations thereof), the Blue Sky Memorandum, and any other documents in connection with the offering, purchase, sale and delivery of the Securities; (iii) all expenses in connection with the qualification of the Securities for offering and sale under state securities laws as provided in Section 6(d) hereof, including the fees and disbursements of counsel for the Underwriter in connection with such qualification and in connection with the Blue Sky survey; (iv) all fees and expenses in connection with listing the Securities on the NYSE; (v) the filing fees incident to, and the fees and disbursements of counsel for the Underwriter in connection with, any required review by the Financial Industry Regulatory Authority (“FINRA”) of the terms of the sale of the Securities; (vi) the cost of preparing the Securities; (vii) the costs and expenses of the Company in connection with any “road show” presentation to potential investors; provided that the expenses related to the chartering of any airplanes shall be paid 50% by the Company and 50% by the Underwriter; (viii) the cost and charges of any transfer agent or registrar; and (ix) all other costs and expenses incident to the performance of its obligations hereunder and under the Forward Sale Agreement which are not otherwise specifically provided for in this Section. It is understood, however, that, except as provided in this Section, and Sections 10 and 13 hereof, the Underwriter will pay all of its own costs and expenses, including the fees of its counsel, transfer taxes on resale of any of the Securities by them, and any advertising expenses connected with any offers it may make.
9. The obligations of the Underwriter hereunder to purchase the Securities at the Time of Delivery, and the obligations of the Forward Seller to deliver and sell the Borrowed Securities at the Time of Delivery, shall be subject, in the Underwriter’s and the Forward Seller’s discretion, to the condition that all representations and warranties and other statements of the Company herein are, at and as of the Applicable Time and the Time of Delivery, true and correct, the condition that the Company shall have performed all of its obligations hereunder theretofore to be performed, and the following additional conditions:
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(a) The Prospectus shall have been filed with the Commission pursuant to Rule 424(b) under the Act within the applicable time period prescribed for such filing by the rules and regulations under the Act and in accordance with Section 6(a) hereof; all material required to be filed by the Company pursuant to Rule 433(d) under the Act shall have been filed with the Commission within the applicable time period prescribed for such filings by Rule 433; no stop order suspending the effectiveness of the Registration Statement or any part thereof shall have been issued and no proceeding for that purpose or pursuant to Section 8A of the Act shall have been initiated or threatened by the Commission and no notice of objection of the Commission to the use of the Registration Statement or any post-effective amendment thereto pursuant to Rule 401(g)(2) under the Act shall have been received; no stop order suspending or preventing the use of the Preliminary Prospectus, Prospectus or any Issuer Free Writing Prospectus shall have been initiated or threatened by the Commission; and all requests for additional information on the part of the Commission shall have been complied with to the reasonable satisfaction of the Underwriter and the Forward Seller;
(b) Cravath, Swaine & Xxxxx LLP, counsel for the Underwriter, the Forward Seller and the Forward Purchaser, shall have furnished to the Underwriter, the Forward Seller and the Forward Purchaser their written opinion and negative assurance letter, dated the Time of Delivery and addressed to the Underwriter, the Forward Seller and the Forward Purchaser, in form and substance reasonably satisfactory to you, with respect to such matters as you may reasonably request, and such counsel shall have received such papers and information as they may reasonably request to enable them to pass upon such matters;
(c) Xxxxxxx Xxxxxxx & Xxxxxxxx LLP, counsel for the Company, shall have furnished to the Underwriter, the Forward Seller and the Forward Purchaser their written opinion and negative assurance letter, dated the Time of Delivery and addressed to the Underwriter, the Forward Seller and the Forward Purchaser, in form and substance reasonably satisfactory to you;
(d) Xxxxxxx Xxxxx LLP, special Pennsylvania counsel for the Company, shall have furnished to the Underwriter, the Forward Seller and the Forward Purchaser their written opinion, dated the Time of Delivery and addressed to the Underwriter, the Forward Seller and the Forward Purchaser, in form and substance reasonably satisfactory to you;
(e) Xxxxxxxxxxx X. Xxxxxx, Executive Vice President, General Counsel and Secretary for the Company (or his successor), shall have furnished to the Underwriter, the Forward Seller and the Forward Purchaser his written opinion, dated the Time of Delivery and addressed to the Underwriter, the Forward Seller and the Forward Purchaser, in form and substance reasonably satisfactory to you;
(f) On the date of the Prospectus at a time prior to the execution of this Agreement, at 9:30 a.m., New York City time, on the effective date of any post-effective amendment to the Registration Statement filed subsequent to the date of this Agreement and also at the Time of Delivery, each of (i) PricewaterhouseCoopers LLP and (ii) Deloitte & Touche LLP shall have furnished to the Underwriter their respective letter or letters, dated the respective dates of delivery thereof, in form and substance reasonably satisfactory to you, containing statements and information of the type customarily included in accountants’ “comfort letters” to underwriters with respect to financial statements and certain financial information contained or incorporated by reference in each of the Registration Statement, the Pricing Prospectus and the Prospectus; provided, however, that the letters delivered at the Time of Delivery shall, in each case, use a “cut-off” date no more than three business days prior to the Time of Delivery;
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(g) (i) None of the Company, any of its subsidiaries, the Acquired Company or any of the Acquired Company’s subsidiaries shall have sustained since the date of the Company’s or the Acquired Company’s, as applicable, latest audited financial statements included or incorporated by reference in the Pricing Prospectus any loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Pricing Prospectus, and (ii) since the respective dates as of which information is given in the Pricing Prospectus, there shall not have been any change in or affecting the business, financial position, prospects or results of operations of (A) the Company and its subsidiaries, taken as a whole, or (B) the Company and its subsidiaries (including the Acquired Company and its subsidiaries), taken as a whole, otherwise than as set forth or contemplated in the Pricing Prospectus and the Prospectus, the effect of which, in any such case described in clause (i) or (ii), is in your or the Forward Seller’s judgment so material and adverse as to make it impracticable or inadvisable to proceed with the public offering or the delivery of the Securities being delivered at the Time of Delivery on the terms and in the manner contemplated in the Pricing Prospectus and the Prospectus;
(h) On or after the Applicable Time (i) no downgrading shall have occurred in the rating accorded the Company or any of the Company’s securities, or in the rating outlook for the Company, by any “nationally recognized statistical rating organization”, as that term is defined in Section 3(a)(62) of the Exchange Act, and (ii) no such organization shall have publicly announced that it has under surveillance or review, with possible negative implications, its rating of any of the Company’s debt securities;
(i) On or after the Applicable Time there shall not have occurred any of the following: (i) a suspension or material limitation in trading in securities generally on the NYSE; (ii) a suspension or material limitation in trading in the Company’s securities on the NYSE; (iii) a general moratorium on commercial banking activities declared by either Federal or New York State authorities or a material disruption in commercial banking or securities settlement or clearance services in the United States; (iv) the outbreak or escalation of hostilities involving the United States or the declaration by the United States of a national emergency or war or (v) the occurrence of any other calamity or crisis or any change in financial, political or economic conditions in the United States or elsewhere, if the effect of any such event specified in clause (iv) or (v) in your or the Forward Seller’s judgment makes it impracticable or inadvisable to proceed with the public offering or the delivery of the Securities being delivered at the Time of Delivery on the terms and in the manner contemplated in the Pricing Prospectus and the Prospectus;
(j) The Company Top-Up Securities, if any, to be issued and sold by the Company hereunder at the Time of Delivery, and a number of shares of Stock equal to the Share Cap to be issued to the Forward Purchaser pursuant to the Forward Sale Agreement, whether pursuant to Physical Settlement, Net Share Settlement, as a result of an ISDA Event (as such terms are defined in the Forward Sale Agreement) or otherwise, in each case, shall have been duly listed, subject to notice of issuance, on the NYSE;
(k) The executed agreements from each of the officers and directors of the Company set forth in Annex II hereof, in each case to the effect set forth in Annex III hereof, were delivered to the Underwriter on the date hereof; and
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(l) The Company shall have furnished or caused to be furnished to the Underwriter, the Forward Seller and the Forward Purchaser at the Time of Delivery, certificates reasonably satisfactory to you of the President or any Vice President and a principal financial or accounting officer of the Company, in their capacity as such and not personally, to the effect that (A) the representations and warranties of the Company in this Agreement are, at and as of the Applicable Time and the Time of Delivery, true and correct in all respects, (B) the Company has complied in all respects with all agreements and satisfied all conditions on its part to be performed or satisfied hereunder at or prior to the Time of Delivery and (C) subsequent to the date of the most recent financial statements of the Company in the Pricing Disclosure Package and the Prospectus, there has been no material adverse change in the business, financial condition, prospects or results of operations of the Company and its subsidiaries (including the Acquired Company and its subsidiaries), taken as a whole, except as set forth or contemplated by the Pricing Disclosure Package and the Prospectus.
(m) On the date of the Prospectus at a time prior to the execution of this Agreement, at 9:30 a.m., New York City time, on the effective date of any post-effective amendment to the Registration Statement filed subsequent to the date of this Agreement and also at the Time of Delivery, the Company shall have furnished or caused to be furnished to the Underwriter, the Forward Seller and the Forward Purchaser a certificate in form and substance reasonably satisfactory to you signed by the principal financial officer of the Company certifying certain financial information of the Acquired Company incorporated by reference in the Prospectus.
10. (a) The Company will indemnify and hold harmless the Underwriter, the Forward Seller and the Forward Purchaser against any losses, claims, damages or liabilities, joint or several, to which the Underwriter, the Forward Seller and the Forward Purchaser 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 an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, the Basic Prospectus, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or any amendment or supplement thereto, any Issuer Free Writing Prospectus, any “roadshow” as defined in Rule 433(h) under the Act (a “roadshow”) or any “issuer information” filed or required to be filed pursuant to Rule 433(d) under the Act, 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 Underwriter, the Forward Seller and the Forward Purchaser for any legal or other expenses reasonably incurred by any of them in connection with investigating or defending any such action or claim as such expenses are incurred; provided, however, that the Company shall 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 the Registration Statement, the Basic Prospectus, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or any amendment or supplement thereto, or any Issuer Free Writing Prospectus, in reliance upon and in conformity with the Underwriter Information.
(b) The Underwriter, the Forward Seller and the Forward Purchaser will, severally and not jointly, indemnify and hold harmless the Company against any losses, claims, damages or liabilities to which the Company may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, the Basic Prospectus, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or any amendment or supplement thereto, or any Issuer Free Writing Prospectus, or any roadshow, or arise out of or are based upon the omission or alleged omission to state therein
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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 the Registration Statement, the Basic Prospectus, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus or any such amendment or supplement thereto, or any Issuer Free Writing Prospectus, or any roadshow in reliance upon and in conformity with the Underwriter Information; and will reimburse the Company for any legal or other expenses reasonably incurred by the Company in connection with investigating or defending any such action or claim as such expenses are incurred. As used in this Agreement, “Underwriter Information” shall mean (x) with respect to the Underwriter and an applicable document, the written information furnished to the Company by the Underwriter expressly for use therein; it being understood and agreed upon that the only such information furnished by the Underwriter consists of the following information in the Prospectus furnished on behalf of the Underwriter: the information contained in the first sentence of the third paragraph and twenty-first paragraph under the caption “Underwriting (Conflicts of Interest)” and (y) with respect to each of the Forward Seller and the Forward Purchaser and an applicable document, the written information furnished to the Company by the Forward Seller and the Forward Purchaser expressly for use therein; it being understood and agreed upon that the only such information furnished by the Forward Seller and the Forward Purchaser consists of the Forward Purchaser’s and Forward Seller’s name on the cover of the Prospectus under the caption “Underwriting (Conflicts of Interest)–Forward Sale Agreement” in the Prospectus.
(c) Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify the indemnifying party in writing of the commencement thereof; provided that the failure to notify the indemnifying party shall not relieve it from any liability that it may have under the preceding paragraphs of this Section 10 except to the extent that it has been materially prejudiced (through the forfeiture of substantive rights or defenses) by such failure; and provided further that the failure to notify the indemnifying party shall not relieve it from any liability that it may have to an indemnified party otherwise than under the preceding paragraphs of this Section 10. In case any such action shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, 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 shall not be liable to such indemnified party under such subsection for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by such indemnified party, in connection with the defense thereof other than reasonable costs of investigation. No indemnifying party shall, without the written consent of the indemnified party, effect the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or claim in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified party is an actual or potential party to such action or claim) unless such settlement, compromise or judgment (i) includes an unconditional release of the indemnified party from all liability arising out of such action or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of any indemnified party.
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(d) If the indemnification provided for in this Section 10 is unavailable to or insufficient to hold harmless an indemnified party under subsection (a) or (b) above in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriter, the Forward Purchaser and the Forward Seller, on the other, from the offering of the Securities. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law or if the indemnified party failed to give the notice required under subsection (c) above, then each indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company on the one hand and the Underwriter, the Forward Purchaser and the Forward Seller, on the other, in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Underwriter, the Forward Purchaser and the Forward Seller, on the other, shall be deemed to be in the same respective proportions as the total net proceeds from the offering (before deducting expenses) received by the Company (which shall include the proceeds to be received by the Company pursuant to the Forward Sale Agreement assuming Physical Settlement (as such term is defined in the Forward Sale Agreement) of the Forward Sale Agreement on the Effective Date (as such term is defined in the Forward Sale Agreement)), the total underwriting discounts and commissions received by the Underwriter, and the aggregate Spread (as defined in the Forward Sale Agreement) retained by the Forward Purchaser under the Forward Sale Agreement, net of any costs associated therewith, as reasonably determined by the Forward Seller, in each case bear to the aggregate public offering price of the Securities. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company on the one hand or the Underwriter, the Forward Purchaser and the Forward Seller, on the other, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company, the Underwriter, the Forward Purchaser and the Forward Seller agree that it would not be just and equitable if contribution pursuant to this subsection (d) were determined by pro rata allocation (even if the Underwriter, the Forward Purchaser and the Forward Seller were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this subsection (d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to above in 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 such action or claim. Notwithstanding the provisions of this subsection (d), (x) the Underwriter shall not be required to contribute any amount in excess of the amount by which the total price at which the Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which the Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission and (y) the Forward Seller shall not be required to contribute an amount in excess of the aggregate Spread (as defined in the Forward Sale Agreement) retained by the Forward Purchaser under the Forward Sale Agreement. 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 Company under this Section 10 shall be in addition to any liability which the Company may otherwise have and shall extend, upon the same terms and conditions, to each officer and director of the Underwriter, the Forward Purchaser and the Forward Seller, each person, if any, who controls the Underwriter, the Forward Purchaser and the Forward Seller within the meaning of the Act and each broker-dealer affiliate of the Underwriter; and the obligations of the Underwriter, the Forward Purchaser and the Forward Seller under this Section 10 shall be in addition to any liability which any of them may otherwise have and shall extend, upon the same terms and conditions, to each officer and director of the Company and to each person, if any, who controls the Company within the meaning of the Act.
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11. [Reserved.]
12. (a) In the event that the Conditions are not satisfied at or prior to the Time of Delivery, and the Forward Seller elects, pursuant to Section 3(b) hereof, not to deliver the total number of Borrowed Securities deliverable by the Forward Seller hereunder, (ii) the Forward Purchaser determines in good faith, after using commercially reasonable efforts, that, the Forward Seller is unable to borrow and deliver for sale under this Agreement a number of shares of Stock equal to the total number of the Borrowed Securities, or (iii) the Forward Purchaser determines in good faith, after using commercially reasonable efforts, that the Forward Seller or an affiliate thereof would incur a stock loan cost of more than a rate equal to 200 basis points per annum to borrow and deliver for sale under this Agreement the total number of the Borrowed Securities, then the Company shall issue and sell to the Underwriter at the Time of Delivery, pursuant to Section 3 hereof, in whole but not in part, an aggregate number of shares of Stock equal to the number of Borrowed Securities that the Forward Seller does not so deliver and sell to the Underwriter. In connection with any such issuance and sale by the Company, the Company or the Underwriter shall have the right to postpone the Time of Delivery for a period not exceeding three business days in order to effect any required changes in any documents or arrangements. The shares of Stock sold by the Company to the Underwriter pursuant to this Section 12(a) in lieu of any Borrowed Securities are referred to herein as the “Company Top-Up Securities”.
(b) Neither the Forward Purchaser nor the Forward Seller shall have any liability whatsoever for any Borrowed Securities that the Forward Seller does not deliver and sell to the Underwriter or any other party if (i) the Conditions are not satisfied at or prior to the Time of Delivery, and the Forward Seller elects, pursuant to Section 3(b) hereof, not to deliver and sell to the Underwriter the Borrowed Securities, (ii) the Forward Purchaser determines in good faith, after using commercially reasonable efforts, that the Forward Seller or an affiliate thereof is unable to borrow and deliver for sale under this Agreement at the Time of Delivery, a number of shares of Stock equal to the number of the Borrowed Securities, or (iii) the Forward Purchaser determines in good faith, after using commercially reasonable efforts, that the Forward Seller or its affiliate would incur a stock loan cost of more than a rate equal to 200 basis points per annum to borrow and deliver for sale under this Agreement the total number of Borrowed Securities.
13. The respective indemnities, agreements, representations, warranties and other statements of the Company, the Underwriter, the Forward Seller and the Forward Purchaser, as set forth in this Agreement or made by or on behalf of them, respectively, pursuant to this Agreement, shall remain in full force and effect, regardless of any investigation (or any statement as to the results thereof) made by or on behalf of the Underwriter, the Forward Seller, the Forward Purchaser, or any officer or director or controlling person of any of the foregoing or any broker-dealer affiliate of the Underwriter, or the Company, or any officer or director or controlling person of the Company, and shall survive delivery of and payment for the Securities.
14. If (i) the Company for any reason fails to tender the Company Top-Up Securities, if any, for delivery to the Underwriter as required by this Agreement or (ii) the Underwriter declines to purchase such Securities for any reason permitted under this Agreement, the Company will reimburse the Underwriter, the Forward Purchaser and the Forward Seller for all out of pocket expenses reasonably incurred by them in connection with this Agreement, the Forward Sale
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Agreement and the transactions contemplated hereby and thereby, including fees and disbursements of counsel, reasonably incurred by the Underwriter in making preparations for the purchase, sale and delivery of the Securities not so delivered, but the Company shall then be under no further liability to the Underwriter except as provided in Sections 8 and 10 hereof.
15. All statements, requests, notices and agreements hereunder shall be in writing, and (x) if to the Underwriter, shall be delivered or sent by mail, telex or facsimile transmission to RBC Capital Markets, LLC, 000 Xxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Fax: (000) 000-0000, Attention: Equity Syndicate; (y) if to the Forward Seller or Forward Purchaser, shall be delivered or sent by mail, telex or email transmission to Royal Bank of Canada, Brookfield Place, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: ECM, Email: XXXXXXXxxxxxxxxXxxxxxXxxxxxXxxxxxxxxxxxx@xxx.xxx; and (z) if to the Company, shall be delivered or sent by mail, telex or facsimile transmission to the address of the Company set forth in the Registration Statement, Attention: Secretary. Any such statements, requests, notices or agreements shall take effect upon receipt thereof.
In accordance with the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)), the Underwriter is required to obtain, verify and record information that identifies its clients, including the Company, which information may include the name and address of its clients, as well as other information that will allow the underwriter to properly identify its clients.
16. This Agreement shall be binding upon, and inure solely to the benefit of, the Underwriter, the Forward Seller, the Forward Purchaser and the Company and, to the extent provided in Sections 10 and 12 hereof, the officers and directors of the Company or the Underwriter, the Forward Seller or the Forward Purchaser, each person who controls the Company or the Underwriter, the Forward Seller or the Forward Purchaser and any broker-dealer affiliate of the Underwriter, and their respective heirs, executors, administrators, successors and assigns, and no other person shall acquire or have any right under or by virtue of this Agreement. No purchaser of any of the Securities from the Underwriter shall be deemed a successor or assign by reason merely of such purchase.
17. Time shall be of the essence of this Agreement. As used herein, the term “business day” shall mean any day when the Commission’s office in Washington, D.C. is open for business.
18. Each of the Company and the Forward Seller acknowledges and agrees that (i) the Underwriter is acting solely in the capacity of an arm’s length contractual counterparty to the Company and the Forward Seller with respect to the offering of Securities contemplated hereby, (ii) in connection therewith and with the process leading to such transaction the Underwriter is acting solely as a principal and not the agent or fiduciary of the Company, (iii) the Underwriter has not assumed an advisory or fiduciary responsibility in favor of the Company or the Forward Seller with respect to the offering contemplated hereby or the process leading thereto (irrespective of whether the Underwriter has advised or is currently advising the Company or the Forward Seller on other matters) or any other obligation to the Company or the Forward Seller except the obligations expressly set forth in this Agreement and (iv) each of the Company and the Forward Seller has consulted its own legal and financial advisors to the extent it deemed appropriate. Each of the Company and the Forward Seller agrees that it will not claim that the Underwriter has rendered advisory services of any nature or respect, or owes a fiduciary or similar duty to the Company or the Forward Seller, as the case may be, in connection with such transaction or the process leading thereto.
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19. This Agreement supersedes all prior agreements and understandings (whether written or oral) between the parties hereto, or any of them, with respect to the subject matter hereof.
20. This Agreement and any transaction contemplated by this Agreement shall be governed by and construed in accordance with the laws of the State of New York. The Company agrees that any suit or proceeding arising in respect of this Agreement or any transaction contemplated by this Agreement will be tried exclusively in the U.S. District Court for the Southern District of New York or, if that court does not have subject matter jurisdiction, in any state court located in The City and County of New York and the Company agrees to submit to the jurisdiction of, and to venue in, such courts.
21. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.
22. This Agreement may be executed by any one or more of the parties hereto in any number of counterparts, each of which shall be deemed to be an original, but all such respective counterparts shall together constitute one and the same instrument.
23. Notwithstanding anything herein to the contrary, the Company is authorized to disclose to any persons the U.S. federal and state income tax treatment and tax structure of the potential transaction and all materials of any kind (including tax opinions and other tax analyses) provided to the Company relating to that treatment and structure, without the Underwriter’s imposing any limitation of any kind. However, any information relating to the tax treatment and tax structure shall remain confidential (and the foregoing sentence shall not apply) to the extent necessary to enable any person to comply with securities laws. For this purpose, “tax structure” is limited to any facts that may be relevant to that treatment.
24. Recognition of the U.S. Special Resolution Regimes.
(a) In the event that the Underwriter is a Covered Entity and becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer from the Underwriter of this Agreement, and any interest and obligation in or under this Agreement, will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Agreement, and any such interest and obligation, were governed by the laws of the United States or a state of the United States.
(b) In the event that the Underwriter is a Covered Entity or a BHC Act Affiliate of the Underwriter becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under this Agreement that may be exercised against the Underwriter are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Agreement were governed by the laws of the United States or a state of the United States.
(c) As used in this section:
“BHC Act Affiliate” has the meaning assigned to the term “affiliate” in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k).
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“Covered Entity” means any of the following:
(i) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b);
(ii) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or
(iii) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).
“Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.
“U.S. Special Resolution Regime” means each of (i) the Federal Deposit Insurance Act and the regulations promulgated thereunder and (ii) Title II of the Xxxx-Xxxxx Xxxx Street Reform and Consumer Protection Act and the regulations promulgated thereunder.
25. The words “execution,” “signed,” “signature,” “delivery,” and words of like import in or relating to this Agreement or any document to be signed in connection with this Agreement shall be deemed to include electronic signatures, deliveries or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper-based recordkeeping system, as the case may be, and the parties hereto consent to conduct the transactions contemplated hereunder by electronic means.
[Signature Page Follows]
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If the foregoing is in accordance with your understanding, please indicate your acceptance of this Agreement by signing and returning to us a counterpart hereof.
| Very truly yours, | ||
| Essential Utilities, Inc. | ||
| By: | /s/ Xxxxxxxxxxx Xxxxxx | |
| Name: | Xxxxxxxxxxx Xxxxxx | |
| Title: | Executive Vice President, General Counsel, and Secretary | |
RBC Capital Markets, LLC, as Underwriter
| By: | /s/ Xxxxxxx Xxxxxxx | |
| Name: | Xxxxxxx Xxxxxxx | |
| Title: | Managing Director |
RBC Capital Markets, LLC, as agent for Royal Bank of Canada, acting in its capacity as Forward Seller
| By: | /s/ Xxxxxxx Xxxxxxx | |
| Name: | Xxxxxxx Xxxxxxx | |
| Title: | Managing Director |
RBC Capital Markets, LLC, as agent for Royal Bank of Canada, acting in its capacity as Forward Purchaser, solely as the recipient and/or beneficiary of certain representations, warranties, agreements and indemnities set forth in this Agreement
| By: | /s/ Xxxxx Xxxx | |
| Name: | Xxxxx Xxxx | |
| Title: | Managing Director |
[Signature Page to Underwriting Agreement (Common Stock)]
SCHEDULE I
[Reserved.]
Schedule I – 1
SCHEDULE II
(a) Issuer Free Writing Prospectuses not included in the Pricing Disclosure Package: None.
(b) Additional Documents Incorporated by Reference: The Company’s Current Report on Form 8-K/A, filed on August 10, 2020.
(c) Issuer Free Writing Prospectus included in the Pricing Disclosure Package: None.
(d) Pricing Information
Number of Securities: 6,700,000
Price to Public: Variable
Schedule II – 2
ANNEX I
[Reserved.]
Annex I – 1
ANNEX II
DIRECTORS AND OFFICERS SUBJECT TO LOCK-UPS
1. Xxxxxxxxxxx X. Xxxxxxxx
2. Xxxxxxxxx X. Xxxxx
3. Xxxxxxxx XxXxxxxxxxxx
4. Xxxxx X. Xxxxxx
5. Xxxxxx X. Xxxxxxxx
6. Xxxxxxx X. Xxxxxx
7. Xxxxx X. Xxxx
8. Xxx X. Xxxxxxx
9. Xxxxxxxxxxx X. Xxxxxx
10. Xxxxxxx X. Xxx
11. Xxxxxxxxxxx X. Xxxxxx
12. Xxxxxx X. Xxxxxxxx
13. Xxxxxxx Xxxxxx
14. Xxxxxx Xxxxx
Annex II – 1
ANNEX III
FORM OF LOCK-UP AGREEMENT
August [•], 2020
RBC Capital Markets, LLC
c/o RBC Capital Markets, LLC,
000 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000.
Ladies and Gentlemen:
The undersigned understands that RBC Capital Markets(the “Underwriter”) proposes to enter into an underwriting agreement (the “Underwriting Agreement”) with Essential Utilities, Inc., a Pennsylvania corporation (the “Company”), providing for the public offering (the “Offering”) by the Underwriter of shares (the “Securities”) of common stock, par value $0.50 per share, of the Company (the “Stock”). Capitalized terms used and not defined herein shall have the meanings set forth in the Underwriting Agreement.
To induce the potential underwriters that may participate in the Offering to continue their efforts in connection with the Offering, the undersigned agrees, during the period beginning from the date hereof and continuing to and including the date 60 days after the date of the final prospectus used to sell the Securities (the “Restricted Period”), not to (a) offer, sell, contract to sell, pledge, grant any option to purchase, make any short sale or otherwise transfer or dispose of, including by entry into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the Stock, directly or indirectly, any securities of the Company that are substantially similar to the Securities, including but not limited to any options, rights or warrants to purchase shares of Stock or any securities that are convertible into or exchangeable for, or that represent the right to receive, Stock or any such other securities, whether any such transaction is to be settled by delivery of Stock, in cash or otherwise (collectively, “Restricted Securities”), whether now owned or hereinafter acquired and whether owned directly by the undersigned or with respect to which the undersigned otherwise has beneficial ownership (as such term is used in Rule 13d-3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or (b) publicly disclose the intention to take any of the actions contemplated by clause (a) above, in each case without the prior written consent of RBC Capital Markets, LLC. The foregoing sentence shall not apply to:
(i) receipt by the undersigned from the Company of Stock, or any securities convertible into or exchangeable for Stock, pursuant to employee equity or equity-based incentive plans, employee stock purchase plans or dividend reinvestment plans existing on, or upon the conversion or exchange of convertible or exchangeable securities outstanding as of, the date of this Agreement and described in the Pricing Prospectus and the Prospectus; provided that, for the avoidance of doubt, any such Stock or securities received by the undersigned shall be subject to all of the restrictions set forth in this agreement;
Annex III – 1
(ii) transfers of Stock, or any securities convertible into or exchangeable for Stock, as a bona fide gift to immediate family members of the undersigned or to a trust the beneficiaries of which are exclusively the undersigned or immediate family members of the undersigned;
(iii) transfers of Stock, or any securities convertible into or exchangeable for Stock, by will or intestacy or by operation of law pursuant to a qualified domestic order or in connection with a divorce settlement;
(iv) the establishment of a trading plan pursuant to Rule 10b5-1 under the Exchange Act for the transfer of Stock, provided that such plan does not provide for the transfer of Stock during the Restricted Period;
(v) transfers (including following the exercise of Company stock options) made in accordance with the terms of a 10b5-1 Plan in existence as of the date hereof without any further amendment or modification, provided that no filing under Section 16(a) of the Exchange Act or other public announcement shall be required or shall be made voluntarily in connection with such transfers, other than a filing on Form 4 which shall indicate that the sale was made pursuant to such a 10b5-1 Plan;
(vi) transfers resulting from the sales of the undersigned’s shares held as of the date hereof through the Company’s 401(k) plan existing on the date of this Agreement and described in the Pricing Prospectus and the Prospectus pursuant to portfolio balancing opportunities provided by the terms of such 401(k) plan, provided that no filing under Section 16(a) of the Exchange Act or other public announcement shall be required or shall be made voluntarily in connection with such transfers, other than a filing on Form 4 that indicates that the transfer was of shares held through such 401(k) plan pursuant to such portfolio balancing opportunities;
(vii) transfers to the Company resulting from the forfeiture, cancellation, withholding, surrender or delivery of the undersigned’s shares of Stock to satisfy any income, employment or social security tax withholding or remittance obligations in connection with the vesting during the period of the agreement above of any restricted stock unit, restricted shares, performance share unit or phantom shares, provided that no filing under Section 16(a) of the Exchange Act or other public announcement shall be required or shall be made voluntarily in connection with such forfeiture, cancellation, withholding, surrender or delivery, other than a filing on Form 4 that indicates that the transfer was made to satisfy such income, employment or social security tax withholding or remittance obligations;
(viii) to a nominee or custodian of a person or entity to whom a disposition or transfer would be permissible under clauses (ii) and (iii);
(ix) to the Company in connection with the repurchase of the undersigned’s Stock upon termination of service of the undersigned;
(x) to the Company or its subsidiaries upon death, disability or termination of employment, in each case, of the undersigned;
(xi) to the Company or its subsidiaries (a) in the exercise of outstanding options, warrants, restricted stock units or other equity interests, including transfers deemed to occur upon the “net” or “cashless” exercise of options or (b) for the sole purpose of paying the exercise price of such options, warrants, restricted stock units or other equity interests or for paying taxes (including estimated taxes) due as a result of the exercise of such options, warrants, restricted
Annex III – 2
stock units or other equity interests or as a result of the vesting of Stock under restricted stock awards pursuant to employee benefit plans disclosed in the Prospectus relating to this public offering, in each case on a “cashless” or “net exercise” basis, provided that any such Stock received upon such exercise shall be subject to the terms of this Lock-Up Agreement;
(xii) the repurchase of the undersigned’s Stock by the Company;
(xiii) pursuant to tenders, sales or other transfers pursuant to a bona fide third-party tender offer, merger, consolidation or other similar transaction made to all holders of Stock involving a “change of control” of the Company (provided that if such transaction is not consummated, the undersigned’s Restricted Securities shall remain subject to the restrictions set forth herein);
(xiv) pursuant to the exercise for cash of options to purchase Stock disclosed as outstanding in the Registration Statement and the Prospectus, provided that any such Stock received upon such exercise shall be subject to the terms of this Lock-Up Agreement;
(xv) the disposition of Stock acquired by the undersigned in this public offering or in open market transactions after completion of this public offering; and/or
(xvi) transfers of Stock or other Company securities pursuant to an order of a court or regulatory agency (for purposes of this Lock-Up Agreement, a “court or regulatory agency” means any domestic or foreign, federal, state or local government, including any political subdivision thereof, any governmental or quasi-governmental authority, department, agency or official, any court or administrative body, and any national securities exchange or similar self-regulatory body or organization, in each case of competent jurisdiction) or to comply with any regulations related to ownership by the undersigned of the undersigned’s Stock.
provided that, (A) in the case of any transfer pursuant to clause (ii) or (iii), each donee or transferee shall sign and deliver a lock-up letter, substantially in the form of this letter, with respect to such Stock and securities and (B) in the case of any transfer pursuant to clause (ii) or any establishment pursuant to clause (iv), no public filing or other public announcement related thereto shall be required or shall be voluntarily made during the Restricted Period.
In addition, the undersigned agrees, during the Restricted Period, not to make any demand for or exercise any right with respect to, the registration of any Restricted Securities. The undersigned also agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar against the transfer of the undersigned’s Restricted Securities except in compliance with the foregoing restrictions.
The undersigned understands that the Company and the Underwriters are relying upon this agreement in proceeding toward consummation of the Offering. The undersigned further understands that this agreement is irrevocable and shall be binding upon the undersigned’s heirs, legal representatives, successors and assigns. The undersigned represents and warrants that it has the full power and authority to enter this agreement.
Whether or not the Offering actually occurs depends on a number of factors, including market conditions. Any Offering will only be made pursuant to an Underwriting Agreement, the terms of which are subject to negotiation between the Company and the Underwriters. The undersign understands that, if the Underwriting Agreement shall terminate or be terminated prior to payment for and delivery of the Securities to be sold thereunder, the undersigned shall automatically be released from all obligations under this agreement.
Annex III – 3
This Agreement shall be governed by and construed in accordance with the laws of the State of New York.
[Signature page follows]
Annex III – 4
| Very truly yours, |
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| (Name) |
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| (Address) |
Annex III – 5
