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Exhibit 10-R
EXECUTION COPY
FORWARD UNDERWRITING AGREEMENT
dated
November 12, 1998
between
NATIONSBANC XXXXXXXXXX SECURITIES LLC
and
HERCULES INCORPORATED
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November 12, 1998
NATIONSBANC XXXXXXXXXX SECURITIES LLC
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
INTRODUCTORY. Hercules Incorporated (the "COMPANY"), a Delaware
corporation, proposes to issue and sell to NationsBanc Xxxxxxxxxx Securities
LLC, as underwriter (the "UNDERWRITER"), an aggregate number of shares (the
"PURCHASE SHARES") of its common stock, no par value (the "COMMON STOCK"), with
an aggregate Public Offering Price (as defined herein) equal to $200,000,000
(the "AGGREGATE PUBLIC OFFERING PRICE").
The Company has filed with the Securities and Exchange Commission (the
"COMMISSION") a registration statement on Form S-3 (No. 333-63423) and
Pre-effective Amendment No. 1 thereto for the registration of, among other
securities, the Purchase Shares under the Securities Act of 1933, as amended
(the "1933 ACT"), and the offering thereof from time to time in accordance with
Rule 415 of the rules and regulations of the Commission under the 1933 Act (the
"1933 ACT REGULATIONS"). Such registration statement has been declared effective
by the Commission, and the Company has filed and will file such post-effective
amendments and supplements thereto as may be required prior to the sale of
Purchase Shares pursuant thereto, and each such post-effective amendment has
been or will be declared effective by the Commission. Such registration
statement (as so amended or supplemented, if applicable), including the
information, if any, deemed to be a part thereof pursuant to Rule 430A(b) of the
1933 Act Regulations (the "RULE 430A INFORMATION") or Rule 434(d) of the 1933
Act Regulations (the "RULE 434 INFORMATION"), is referred to herein as the
"REGISTRATION STATEMENT"; and the final prospectus and the final prospectus
supplement relating to the offering of the Purchase Shares, in the form
furnished to the Underwriter by the Company for use in connection with each
offering of the Purchase Shares, are collectively referred to herein as the
"PROSPECTUS"; provided, however, that all
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references to the "REGISTRATION STATEMENT" and the "PROSPECTUS" shall also be
deemed to include all documents incorporated therein by reference pursuant to
the Securities Exchange Act of 1934, as amended (the "1934 ACT"), prior to the
time the applicable final prospectus and the final prospectus supplement with
respect to the offering of Purchase Shares on each Pricing Date are furnished to
the Underwriter by the Company; provided, further, that if the Company files a
registration statement with the Commission pursuant to Rule 462(b) of the 1933
Act Regulations (the "RULE 462(B) REGISTRATION STATEMENT"), then, after such
filing, all references to "REGISTRATION STATEMENT" shall also be deemed to
include the Rule 462(b) Registration Statement; and provided, further, that if
the Company elects to rely upon Rule 434 of the 1933 Act Regulations, then all
references to "PROSPECTUS" shall also be deemed to include the final or
preliminary prospectus and the applicable term sheet or abbreviated term sheet
(the "TERM SHEET"), as the case may be, in the forms first furnished to the
Underwriter by the Company for use in connection with each offering of the
Purchase Shares in reliance upon Rule 434 of the 1933 Act Regulations, and all
references in this Forward Underwriting Agreement to the date of the Prospectus
shall mean the date of the Term Sheet. A "PRELIMINARY PROSPECTUS" shall be
deemed to refer to any prospectus used before the Registration Statement became
effective and any prospectus that omitted, as applicable, the Rule 430A
Information, the Rule 434 Information or other information to be included upon
pricing in a form of prospectus filed with the Commission pursuant to Rule
424(b) of the 1933 Act Regulations that was used after such effectiveness but
prior to the delivery of the applicable final prospectus and the final
prospectus supplement in the forms first furnished to the Underwriter by the
Company. For purposes of this Forward Underwriting Agreement, all references to
the Registration Statement, Prospectus, Term Sheet or preliminary prospectus or
to any amendment or supplement to any of the foregoing shall be deemed to
include any copy filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval system ("XXXXX").
All references in this Forward Underwriting Agreement to financial
statements and schedules and other information which is "contained," "included"
or "stated" (or other references of like import) in the Registration Statement,
Prospectus or preliminary prospectus shall be deemed to mean and include all
such financial statements and schedules and other information which are
incorporated by reference in the Registration Statement, Prospectus or
preliminary prospectus, as the case may be, prior to the delivery of the
applicable final prospectus and the final prospectus supplement in the forms
furnished to the Underwriter by the Company with respect to any sales hereunder;
and all references in this Forward Underwriting Agreement to amendments or
supplements to the Registration Statement, Prospectus or preliminary prospectus
shall be deemed to mean and include the filing of any document under the 1934
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Act which is incorporated by reference in the Registration Statement, Prospectus
or preliminary prospectus, as the case may be, after the delivery of the
applicable final prospectus and the final prospectus supplement in the forms
first furnished to the Underwriter by the Company with respect to each sale of
Purchase Shares hereunder.
The Company hereby confirms its agreement with the Underwriter as
follows:
SECTION 1. Certain Definitions.
As used in this Forward Underwriting Agreement, the following terms
shall have the following meanings:
"ADJUSTED EXTRAPOLATED AMOUNT" as of any Trading Day shall mean the
amount expressed in dollars obtained by dividing (x) the Settlement Balance as
of the Close of Business on the immediately preceding day by (y) the number of
scheduled Trading Days from and including such Trading Day to and including the
Completion Target Date.
"AGGREGATE NET SALE PRICE" shall mean, with respect to any Pricing
Date, the sum of the Net Sale Prices of all shares of Common Stock sold pursuant
to Section 2(b) on such Pricing Date.
"AGGREGATE PUBLIC OFFERING PRICE" shall mean $200,000,000.
"BLACKOUT DAY" shall have the meaning specified in Section 2(b)(i).
"BONUS DAY" means any Trading Day on which the difference obtained by
subtracting (x) the Extrapolated Amount from (y) $3,000,000 is greater than
zero.
"BRING-DOWN DATE" shall mean, collectively, each date during the
Dribble-out Period on which any amendment to the Registration Statement or the
Prospectus is declared effective by the Commission or any supplement to the
Registration Statement or the Prospectus is filed with the Commission and each
date on which the Company shall have filed with the Commission any report
required or permitted to be filed pursuant to Sections 13(a), 13(c), 14 or 15(d)
of the 1934 Act.
"BUSINESS DAY" means any day that is not a Saturday, a Sunday or a day
on which banking institutions or trust companies in The City of New York are
authorized or obligated by law or executive order to close.
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"CLOSE OF BUSINESS" on any day shall mean the later of (x) 5:00 P.M.,
New York City time, on such day and (y) if such day is a scheduled Trading Day,
the time of closing of regular trading on the Relevant Exchange on such day.
"CLOSING PRICE" of the Common Stock on any Trading Day shall mean the
reported last sale price on such day of such Common Stock as of the end of the
regular session on the NYSE or such other principal securities exchange on which
it is listed, or, in case no such sale takes place on such day, the average of
the reported last bid and asked prices on such day as of such time, in either
case, as reported on the Consolidated Tape maintained by the Consolidated Tape
Association or, if the Common Stock is not listed or admitted to trading on any
securities exchange which participates in the Consolidated Tape Association, the
average of the reported last bid and asked prices of Common Stock on the
over-the-counter market on such day as reported by the National Association of
Securities Dealers Automated Quotation System or a similar generally accepted
reporting service or, if not so reported, the average of the closing bid and
asked prices as furnished by any New York Stock Exchange member firm selected
from time to time by the Underwriter for that purpose or, if not so available in
such manner, as otherwise determined in good faith by the Underwriter.
"COMFORT BRING-DOWN DATE" shall mean, collectively, each date during
the Dribble-out Period on which any amendment to the Registration Statement or
the Prospectus is declared effective by the Commission or any supplement to the
Registration Statement or the Prospectus is filed with the Commission (which
amendment or supplement includes additional financial information) and each date
on which the Company shall have filed with the Commission any report required or
permitted to be filed pursuant to Sections 13(a), 13(c), 14 or 15(d) of the 1934
Act (which report includes additional financial information).
"COMMENCEMENT DATE" shall mean November 12, 1999, subject to
acceleration pursuant to the provisions of Section 7.
"COMMISSION" shall mean the Securities and Exchange Commission.
"COMMON STOCK" shall have the meaning set forth in the First
Introductory paragraph of this Agreement.
"COMPANY" shall have the meaning specified in the First Introductory
paragraph of this Agreement.
"COMPANY ACCELERATION" shall have the meaning set forth in Section
7(b).
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"COMPLETION TARGET DATE" shall mean the 67th consecutive scheduled
Trading Day from and including the Commencement Date.
"CREDIT AGREEMENT" shall mean the Credit Agreement dated as of October
15, 1998 among the Company, the subsidiaries of the Company from time to time
parties thereto, the several lenders from time to time parties thereto,
NationsBank, N.A., as Administrative Agent, and The Chase Manhattan Bank, Xxxxxx
Guaranty Trust Company of New York, and Citibank, N.A., as Co-Syndication
Agents, as amended, supplemented, modified or superseded from time to time.
"DAILY NUMBER" shall have the meaning specified in Section 2(b).
"DAILY QUOTA" shall mean, for any Trading Day, the greater of
$3,000,000 and the Extrapolated Amount as of such Trading Day, provided that if
the Adjusted Extrapolated Amount as of such Trading Day is less than $3,000,000,
then the Daily Quota for such day shall be such Adjusted Extrapolated Amount, or
any greater amount up to $3,000,000 as the Company may advise the Underwriter by
9:15 A.M., New York City time, on such day, provided, however, that,
notwithstanding any of the foregoing, if any such Trading Day is an Illiquidity
Day, then the Daily Quota for such day may be reduced by such amount as the
Underwriter in its reasonable discretion may determine.
"DEBT REPAYMENT TRIGGER EVENT" means any event or condition that gives,
or with the giving of notice or lapse of time would give, the holder of any
note, debenture or other evidence of indebtedness for borrowed money in excess
of $25,000,000 (or any person acting on such holder's behalf) the right to
require the repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company or any of its Material Subsidiaries.
"DEFAULT" shall have the meaning specified in Section 3(a)(iv).
"DRIBBLE-OUT PERIOD" shall mean the period consisting of 140
consecutive days, commencing on the Commencement Date.
"XXXXX" shall have the meaning set forth in the Second Introductory
paragraph of this Agreement.
"EFFECTIVENESS PERIOD" shall have the meaning specified in Section
5(a).
"ENVIRONMENTAL LAWS" shall mean any and all lawful and applicable
Federal, state, local and foreign statutes, laws, regulations, ordinances,
rules, judgments, orders, decrees, permits, concessions, grants, franchises,
licenses,
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agreements or other governmental restrictions relating to the environment or to
emissions, discharges, releases or threatened releases of pollutants,
contaminants, chemicals, or industrial, toxic or hazardous substances or wastes
into the environment including, without limitation, ambient air, surface water,
ground water, or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling of
pollutants, contaminants, chemicals, or industrial, toxic or hazardous
substances or wastes.
"EXTRAPOLATED AMOUNT" as of any Trading Day shall mean the amount
expressed in dollars obtained by dividing (x) the Settlement Balance as of the
Close of Business on the immediately preceding day by (y) the number of
scheduled Trading Days from and including such Trading Day to and including the
last day of the Dribble-Out Period.
"EXISTING INSTRUMENT" shall have the meaning specified in Section
3(a)(iv).
"GAAP" shall have the meaning specified in Section 3(d).
"GOVERNMENTAL LICENSES" shall have the meaning set forth in Section
3(m).
"HAZARDOUS MATERIALS" shall mean any substance, material or waste
defined or regulated in or under any Environmental Laws.
"ILLIQUIDITY DAY" shall mean any Trading Day with respect to which the
Underwriter, in its sole discretion, determines that there has been a material
decline in the liquidity of the Common Stock from the liquidity of the Common
Stock on the date hereof; provided that, without limiting the generality of the
foregoing, if at any time during the Dribble-out Period the Underwriter shall
have designated an aggregate of fifteen Trading Days to be Illiquidity Days, the
Underwriter shall consult with the Company prior to designating any additional
Trading Day to be an Illiquidity Day.
"INDENTURE" shall mean the Junior Subordinated Debenture Indenture
dated as of November 12, 1998 by and between the Company and The Chase Manhattan
Bank, as trustee, as supplemented by the First Supplemental Indenture dated as
of November 12, 1998, in each case as amended, supplemented, modified or
superseded from time to time.
"INITIAL PRICING DATE" shall mean the first Pricing Date to occur
hereunder.
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"INVESTMENT COMPANY ACT" shall have the meaning specified in Section
3(n).
"INTELLECTUAL PROPERTY" shall have the meaning specified in Section
3(l).
"MARKET-OUT DAY" shall mean any scheduled Trading Day during the
Dribble-out Period on which one or more of the following events occurs or is
continuing: (i) trading or quotation in any of the Company's securities shall
have been, or continue to be, suspended or limited by the Commission or by the
Relevant Exchange, or trading in securities generally on the New York Stock
Exchange, Inc. shall have been, or continue to be, suspended or limited, or
minimum or maximum prices shall have been generally established on the New York
Stock Exchange, Inc. by the Commission; (ii) a general banking moratorium shall
have been declared by federal, New York or Delaware authorities and continue to
be in effect; (iii) there shall have occurred, or continue to be, any outbreak
or escalation of national or international hostilities or any crisis or
calamity, or any change in the United States or international financial markets,
or any substantial change or development involving a prospective substantial
change in the United States' or international political, financial or economic
conditions affecting the securities markets generally, as in the reasonable
judgment of the Underwriter is material and adverse and makes it impracticable
to sell Purchase Shares in the manner and on the terms provided herein or to
enforce contracts for the sale of securities; (iv) since the most recent dates
as of which information is given in the Registration Statement and the
Prospectus, in the reasonable judgment of the Underwriter, there shall have
occurred any Material Adverse Change; or (v) the Company shall have sustained a
loss by strike, fire, flood, earthquake, accident or other calamity of such
character as in the reasonable judgment of the Underwriter may interfere
materially with the conduct of the business and operations of the Company
regardless of whether or not such loss shall have been insured.
"MARKET SALE" of Purchase Shares shall mean a sale of such Purchase
Shares made on the Relevant Exchange or in such other manner as may be agreed by
the Company and the Underwriter.
"MATERIAL ADVERSE CHANGE" shall have the meaning specified in Section
3(h).
"MATERIAL SUBSIDIARY" shall mean every subsidiary of the Company that
(i) is listed on Schedule I hereto, (ii) together with its subsidiaries on a
consolidated basis during the 12 months preceding the date hereof accounts for
(or to which may be attributed) 5% or more of the net income or assets
(determined
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on a consolidated basis) of the Company and its subsidiaries or (iii) is
otherwise necessary for the ongoing business operations of the Company or its
subsidiaries.
"NASD" shall mean the National Association of Securities Dealers, Inc.
"NATIONSBANK GROUP" shall mean the Underwriter and its Affiliates (as
such term is defined in Rule 405 under the 1933 Act).
"NET SALE PRICE" shall mean, with respect to each share of Common Stock
sold pursuant to Section 2 hereof, the sale price of such share, net of any
discounts or commissions payable to any persons outside the NationsBank Group
incurred in connection with such sale.
"NYSE" shall mean the New York Stock Exchange, Inc.
"POTENTIAL ADJUSTMENT EVENT" means any of the following:
(i) a subdivision, consolidation or reclassification of the
Common Stock (unless as a result of a merger or other similar event) or
a free distribution or dividend of any such Common Stock to existing
holders by way of bonus, capitalization or similar issue;
(ii) a distribution or dividend to existing holders of the
Common Stock of (A) shares of such Common Stock, (B) other share
capital or securities granting the right to payment of dividends and/or
the proceeds of liquidation of the Company equally or proportionately
with such payments to holders of such Common Stock or (C) any other
type of securities, rights or warrants or other assets, in any case for
payment (cash or other) at less than the prevailing market price as
determined by the Underwriter;
(iii) any dividend paid by the Company on the Common Stock
other than ordinary cash dividends (which ordinary cash dividends
include amounts, sometimes called "dividend equivalents", paid under
the Company's employee benefit and compensation plans on the Common
Stock grants (whether options, restricted stock or other) under such
plans, but only to the extent such amounts do not exceed the amounts of
ordinary cash dividends that would be payable were such Common Stock
grants treated as Common Stock);
(iv) a call by the Company in respect of shares of Common
Stock that are not fully paid;
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(v) a repurchase by the Company of shares of Common Stock
whether out of profits or capital and whether the consideration for
such repurchase is cash, securities or otherwise (excluding the
repurchase of up to 8,192,125 shares of Common Stock remaining under
the Company's stock repurchase program authorized by the Board of
Directors of the Company prior to the date hereof).
(vi) any other similar event that may have a diluting or
concentrative effect on the theoretical value of the Common Stock.
"PRELIMINARY PROSPECTUS" shall have the meaning set forth in the Second
Introductory paragraph of Agreement.
"PRICING DATE" shall have the meaning specified in Section 2(b)(i).
"PROSPECTUS" shall have the meaning set forth in the Second
Introductory paragraph of Agreement.
"PUBLIC OFFERING PRICE" shall have the meaning specified in Section
2(b)(ii).
"PURCHASE DATE" shall have the meaning specified in Section 2(c).
"PURCHASE PRICE" shall have the meaning specified in Section 2(a).
"PURCHASE SHARES" shall have the meaning specified in the First
Introductory paragraph of this Agreement.
"REGISTRATION STATEMENT" shall have the meaning set forth in the
Secondary Introductory paragraph of this Agreement.
"RELEVANT DATE" shall have the meaning specified in Section 3(r).
"RELEVANT EXCHANGE" shall have the meaning specified in Section 3(k).
"REMARKETING AGREEMENT" shall mean the Remarketing Agreement dated as
of November 12, 1998 among the Company, Hercules Trust V and NationsBanc
Xxxxxxxxxx Securities LLC.
"RESERVE NUMBER" shall have the meaning specified in Section 6(f).
"RULE 424(b) REGISTRATION STATEMENT" shall have the meaning set forth
in the Second Introductory paragraph of this Agreement.
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"RULE 430A INFORMATION" shall have the meaning set forth in the Second
Introductory paragraph of this Agreement.
"RULE 434 INFORMATION" shall have the meaning set forth in the Second
Introductory paragraph of this Agreement.
"SENIOR BANK DEBT ACCELERATION" shall mean an acceleration under the
Credit Agreement resulting in the obligations of the Company under the Credit
Agreement becoming or having been declared due and payable under Section 6 of
the Credit Agreement before such obligations would otherwise have been due and
payable.
"SETTLEMENT BALANCE" shall mean, initially, the Aggregate Public
Offering Price and shall be (x) reduced at the Close of Business on each Pricing
Date by an amount equal to the Aggregate Net Sale Price on such Pricing Date and
(y) increased at the Close of Business on each Purchase Date by the amount of
the purchase price of Purchase Shares (if any) that were to have been delivered
by the Company and paid for by the Underwriter on such Purchase Date but that
have not been so delivered or paid for, for any reason whatsoever.
"STOCK PRICE ACCELERATION EVENT" shall have the meaning specified in
Section 7(a).
"SUBORDINATED NOTES" shall mean the Auction Rate Reset Junior
Subordinated Notes Series A issued by the Company to Hercules Trust V.
"TERM SHEET" shall have the meaning specified in the Second
Introductory paragraph of this Agreement.
"TRADING DAY" shall mean any day, as reasonably determined by the
Underwriter, on which the Common Stock is not suspended from trading at any time
during such day and is traded at least once on the NYSE or, if not then admitted
for trading on the NYSE, on the principal securities exchange or quotation
system on which the Common Stock is then listed or admitted for trading.
"TRIGGER PRICE" shall mean, initially, $22 11/16 per share of Common
Stock, as adjusted from time to time pursuant to the provisions of Section 8.
"TRUST AGREEMENT" shall mean the Amended and Restated Trust Agreement
of Hercules Trust V dated and effective as of November 12, 1998 among the
Company, as sponsor, the trustees of Hercules Trust V and the holders, from time
to time, of undivided beneficial interest in the assets of the Trust.
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"TRUST PREFERRED SECURITIES" shall mean the Auction Rate Reset
Preferred Securities issued by Hercules Trust V.
"UNDERWRITER" shall have the meaning specified in the First
Introductory paragraph of this Agreement.
"UNDERWRITING COMMISSION" shall have the meaning specified in Section
2(a).
"1933 ACT" shall have the meaning specified in the Second Introductory
paragraph of this Agreement.
"1933 ACT REGULATIONS" shall have the meaning specified in the Second
Introductory paragraph of this Agreement.
"1934 ACT" shall have the meaning specified in the Second Introductory
paragraph of this Agreement.
SECTION 2. Purchase of Shares.
(a) Purchase and Sale. The Company agrees, upon the terms herein set
forth, to issue and sell to the Underwriter on each Pricing Date the Daily
Number of Purchase Shares. On the basis of the representations, warranties and
agreements herein contained, and upon the terms but subject to the conditions
herein set forth, the Underwriter agrees to purchase from the Company on each
Pricing Date such Daily Number of Purchase Shares. The purchase price per
Purchase Share to be paid by the Underwriter to the Company shall be the Public
Offering Price of such Purchase Share, as determined in the manner set forth in
Section 2(b)(ii), minus an amount (the "UNDERWRITING COMMISSION") equal to 0.75%
of such Public Offering Price per Purchase Share.
(b) Daily Number of Purchase Shares; Public Offering Prices.
(i) Subject to the provisions of Sections 4 and 12, on each
Trading Day during the Dribble-out Period, the Underwriter shall sell
in Market Sales, and the Company shall sell to the Underwriter, a
number (which may be increased or decreased by up to 10% of such number
by the Underwriter in its sole discretion) (the "DAILY NUMBER") of
Purchase Shares with an Aggregate Net Sale Price equal to the Daily
Quota (or such greater amount as the parties may agree) for such
Trading Day; provided that the Company may, by telephonic notice given
no later than 9:15 A.M., New York City time, on such Trading Day to the
Underwriter, confirmed in writing, designate any such Trading Day to be
a "BLACKOUT
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DAY" or, if the applicable requirements therefor are met, a Bonus Day,
provided that the total number of days designated as Blackout Days may
not exceed 18. On any Blackout Day, Market-Out Day, or Bonus Day, the
Underwriter shall not sell or purchase, and the Company shall not be
obligated to sell, Purchase Shares. Each Trading Day on which sales of
Purchase Shares have been made pursuant to the second immediately
preceding sentence shall be a "PRICING DATE."
(ii) The "PUBLIC OFFERING PRICE" with respect to Purchase
Shares sold on any Pricing Date shall be the amount obtained by
dividing the Aggregate Net Sale Price of Common Stock on such Pricing
Date by the Daily Number of Purchase Shares on such Pricing Date, each
as reported by the Underwriter in accordance with Section 2(b)(iii).
(iii) At the Close of Business on each Pricing Date, the
Underwriter shall deliver to the Company, by telecopy (with telephonic
confirmation), a certificate (in the form of Exhibit C), setting forth
the Aggregate Net Sale Price and the Daily Number of Purchase Shares
for such Pricing Date.
(c) Purchase Date; Payment and Delivery. By 9:00 A.M., New York City
time, on the third Trading Day immediately succeeding each Pricing Date, or such
later time and date as the Underwriter shall designate by notice to the Company
(the time and date of each such closing, together, a "PURCHASE DATE"), the
Company shall deliver, or cause to be delivered, through the Depository Trust
Company to the Underwriter, certificates for the Purchase Shares sold by the
Company to the Underwriter on such Pricing Date (or security entitlements in
respect thereof) against the irrevocable release of a wire transfer of
immediately available funds to the order of the Company for the amount of the
purchase price therefor.
SECTION 3. Representations, Warranties and Agreements.
The Company represents and warrants to and agrees with the Underwriter
as follows:
(a) Basic Representations. (i) The Company is a duly and validly
existing corporation in good standing under the laws of the State of
Delaware. The Company is duly qualified as a foreign entity and is in
good standing under the laws of each other jurisdiction where its
ownership, lease, licensing or operation of property or the conduct of
its business requires such qualification, other than in such
jurisdiction or
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jurisdictions where the failure to be so qualified and in good standing
could not reasonably be expected to result in a Material Adverse
Change.
(ii) The Company has all corporate power and authority and the
legal right to (A) own, lease, license and operate its properties, (B)
conduct the business in which it is currently engaged and (C) enter
into, and perform its obligations under, or as contemplated under, this
Forward Underwriting Agreement and consummate the transactions
contemplated hereby.
(iii) This Forward Underwriting Agreement has been duly
authorized, executed and delivered by, and is a valid and binding
agreement of, the Company, enforceable in accordance with its terms,
except as rights to indemnification hereunder may be limited by
applicable law and except as the enforcement hereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other laws of
general application relating to or affecting the enforcement of
creditors' rights or by general equitable principles.
(iv) Neither the Company nor any of its Material Subsidiaries
is in default or, with the giving of notice or lapse of time, would be
in default ("DEFAULT") under any indenture, mortgage, loan or credit
agreement, note, contract, franchise, lease or other instrument to
which the Company or any of its Material Subsidiaries is a party or by
which it or any of them may be bound, or to which any of the property
or assets of the Company or any of its Material Subsidiaries is subject
(each, an "EXISTING INSTRUMENT"), except for such Defaults as could
not, individually or in the aggregate, reasonably be expected to result
in a Material Adverse Change. The execution, delivery and performance
by the Company of this Forward Underwriting Agreement, the consummation
of the transactions herein contemplated and the compliance by the
Company with its obligations hereunder (A) do not and will not result
in any violation of the provisions of the Certificate of Incorporation
or By-laws or other constitutive documents of the Company or any
Material Subsidiary, (B) do not and will not conflict with or
constitute a breach of, Default or a Debt Repayment Trigger Event (as
defined below) under, or result in the creation or imposition of any
lien, charge or encumbrance upon any assets, properties or operations
of the Company or any of its Material Subsidiaries pursuant to, or
require the consent of any other party to, any Existing Instrument,
except for such conflicts, breaches, Defaults, liens (other than liens
created by or contemplated in the Credit Agreement as in effect on the
date hereof), charges or encumbrances or failure to obtain consent as
would not, individually or in the aggregate, result in a Material
Adverse
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Change and (C) will not result in any violation of any applicable law
or statute or any order, rule, regulation or judgment of any court or
governmental agency or governmental body having jurisdiction over the
Company or any of its Material Subsidiaries or any of their respective
assets, properties or operations the result of which could be a
Material Adverse Change.
(v) No consent, approval, authorization, order, registration,
qualification or filing of or with any court or governmental agency or
body having jurisdiction over the Company or any of its Material
Subsidiaries or any of their respective properties is required for the
due authorization, execution and delivery by the Company of, and the
compliance by the Company with all the terms of, this Forward
Underwriting Agreement or the consummation by the Company of the
transactions contemplated hereby except such as have been obtained or
made by the Company, as may be required by the securities or Blue Sky
laws of the various States in connection with the offer and sale of the
Purchase Shares or where the failure to obtain such consent, approval,
authorization, order, registration, qualification or make such filing
will not adversely affect such authorization, execution or delivery of
this Forward Underwriting Agreement, the compliance with the terms
hereof or the consummation by the Company of the transactions
contemplated hereby.
(b) Compliance with Registration Requirements. (i) The Company meets
the requirements for use of Form S-3 under the 1933 Act. The Registration
Statement has been declared effective by the Commission under the 1933 Act. The
Company has complied to the Commission's satisfaction with all requests of the
Commission for additional or supplemental information. No stop order suspending
the effectiveness of the Registration Statement is in effect and no proceedings
for such purpose have been instituted or are pending or, to the best knowledge
of the Company, are contemplated or threatened by the Commission.
(ii) Each preliminary prospectus and each Prospectus when
filed complied in all material respects with the 1933 Act, and each
preliminary prospectus and each Prospectus delivered to the Underwriter
for use in connection with the offering of the Purchase Shares pursuant
to this Forward Underwriting Agreement will, at the time of such
delivery, be identical to any electronically transmitted copies thereof
filed with the Commission pursuant to XXXXX, except such variation as
may be permitted or required by Regulation S-T under the 1933 Act. The
Registration Statement and any post-effective amendment thereto, at the
time it became effective and at all subsequent times, complied and will
comply in all material respects with the 1933 Act and the 1933 Act
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Regulations and did not and will not contain any 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. The
Prospectus, as amended or supplemented, as of its date and at all
subsequent times, did not and will not contain any untrue statement of
a material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading. If the Company elects to rely
upon Rule 434 of the 1933 Act Regulations, the Company will comply with
the requirements of Rule 434. Notwithstanding the foregoing, the
representations and warranties set forth in this subsection do not
apply to statements in or omissions from any Registration Statement or
any post-effective amendment thereto or any Prospectus or any
amendments or supplements thereto made in reliance upon and in
conformity with information furnished to the Company in writing by the
Underwriter expressly for use therein.
(iii) The documents incorporated or deemed to be incorporated
by reference in the Registration Statement and the Prospectus, at the
time they were or hereafter are filed with the Commission, complied and
will comply in all material respects with the requirements of the 1934
Act and the rules and regulations of the Commission thereunder (the
"1934 ACT REGULATIONS").
(iv) There are no actions, suits, proceedings, inquiries or
investigations before or brought by any legal or governmental agency or
body, now pending, or to the knowledge of the Company threatened,
against or affecting the Company or any of its Material Subsidiaries
that are required to be disclosed in the Registration Statement and the
Prospectus (other than as stated therein), or which could reasonably be
expected to result in a Material Adverse Change, or adversely affect
the consummation of the transactions contemplated under this Forward
Underwriting Agreement. The aggregate of all pending legal or
governmental proceedings to which the Company or any of its Material
Subsidiaries is a party or of which any of their respective assets,
properties or operations is the subject, which are not described in the
Registration Statement and the Prospectus, including ordinary routine
litigation incidental to the business, could not reasonably be expected
to result in a Material Adverse Change.
(c) Offering Materials Furnished to Underwriters. The Company has
delivered to the Underwriter one complete manually signed copy of the
Registration Statement and of each consent and certificate of experts filed as a
part thereof, and conformed copies of such Registration Statement (without
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exhibits) and preliminary prospectuses and the related Prospectus, as amended or
supplemented, in such quantities and at such places as the Underwriter has
reasonably requested.
(d) Financial Statements. The financial statements of the Company
included in the Registration Statement and the Prospectus, together with the
related schedules and notes, as well as those financial statements, schedules
and notes of any other entity included therein, present fairly the financial
position of the Company and its consolidated subsidiaries, or such other entity
as the case may be as of and at the dates indicated and the statement of
operations, stockholders' equity and cash flows of the Company and its
consolidated subsidiaries, or such other entity, as the case may be, for the
periods specified. Such financial statements have been prepared in conformity
with generally accepted accounting principles ("GAAP") applied on a consistent
basis throughout the periods involved. The supporting schedules, if any,
included in the Registration Statement and the Prospectus present fairly in
accordance with GAAP the information required to be stated therein. The selected
financial data and the summary financial information included in the Prospectus
present fairly the information shown therein and have been compiled on a basis
consistent with that of the audited financial statements included in the
Registration Statement and the Prospectus. In addition, any pro forma financial
statements of the Company and its consolidated subsidiaries and the related
notes thereto included in the Registration Statement and the Prospectus have
been prepared in accordance with the Commission's rules and guidelines with
respect to pro forma financial statements and have been properly compiled on the
bases described therein, and the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate to give effect to
the transactions and circumstances referred to therein but the pro forma
financial statements may differ from actual results. The financial data, if any,
set forth in the Prospectus under the captions "Prospectus Summary--Summary
Selected Financial Data," "Selected Financial Data" and "Capitalization" (or
similar captions) fairly present the information set forth therein on a basis
consistent with that of the audited financial statements contained in the
related Registration Statement.
(e) Authorization of the Common Stock. Any shares of Common Stock to
be delivered by the Company under this Forward Underwriting Agreement have been
or, prior to such delivery, will be duly authorized for issuance and delivery
pursuant to this Forward Underwriting Agreement and, when issued and delivered
by the Company pursuant to this Forward Underwriting Agreement, will be validly
issued, fully paid and non-assessable.
(f) No Applicable Registration or Other Similar Rights. There are no
persons with registration or other similar rights to have any equity or debt
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securities registered for sale under the Registration Statement, except for such
rights as have been duly waived.
(g) Independent Accountants. Each of the accountants who certified
financial statements and any supporting schedules thereto filed as part of the
Registration Statement and included in the Prospectus are independent public or
certified public accountants as required by the 1933 Act, the 1933 Act
Regulations, the 1934 Act and the 1934 Act Regulations.
(h) No Material Adverse Change in Business. Since the respective dates
as of which information is given in the Registration Statement and the
Prospectus, except as otherwise stated therein, (A) there has been no material
adverse change, any development that could reasonably be expected to result in a
material adverse change in the condition, financial or otherwise, in or
affecting the earnings, business, operations, financial position or prospects,
whether or not arising from transactions in the ordinary course of business, of
the Company and its subsidiaries, considered as one entity (a "MATERIAL ADVERSE
CHANGE"), (B) there have been no transactions entered into by the Company or any
of its Material Subsidiaries, other than those arising in the ordinary course of
business, which are, individually or in the aggregate, material with respect to
the Company and its subsidiaries, considered as one enterprise and (C) except
for regular dividends on the Company's Common Stock or preferred stock (which
dividends include amounts, sometimes called "dividend equivalents," paid under
the Company's employee benefit and compensation plans on the Common Stock grants
(whether options, restricted stocks or other) under such plans on the Common
Stock, but only to the extent such amounts do not exceed the amounts of ordinary
cash dividends that would be payable were such Common Stock grants treated as
Common Stock) in amounts per share that are consistent with past practice or the
applicable charter document or supplement thereto, respectively, there has been
no dividend or distribution of any kind declared, paid or made by the Company on
any class of its capital stock.
(i) Good Standing of Material Subsidiaries. Each Material Subsidiary
is a duly and validly existing corporation or entity and is in good standing
under the laws of the jurisdiction of its incorporation or organization, has all
corporate power and authority to own, lease, license and operate its properties
and to conduct its business as currently conducted and is duly qualified as a
foreign entity in good standing in each other jurisdiction where its ownership,
lease, license or operation of property or the conduct of its business requires
such qualification, other than in such jurisdiction or jurisdictions where the
failure to be so qualified and in good standing could not reasonably be expected
to result in a Material Adverse Change. All of the issued and outstanding
capital stock of each Material Subsidiary have been duly authorized and validly
issued, is fully paid
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and non-assessable and is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge, lien
(other than those created by or contemplated in the Credit Agreement as in
effect on the date hereof), encumbrance or claim. None of the outstanding shares
of capital stock of any Material Subsidiary were issued in violation of
preemptive or other similar rights of any securityholder of such Material
Subsidiary.
(j) Capitalization. The authorized, issued and outstanding capital
stock of the Company is as set forth in the Prospectus under the caption,
"Capitalization" (or any other similar caption) (other than for subsequent
issuances, if any, pursuant to employee benefit plans described in the
Prospectus or upon exercise of outstanding options or warrants described in the
Prospectus). Such shares of capital stock have been duly authorized and validly
issued by the Company and are fully paid and non-assessable and have been issued
in compliance with federal and state securities laws. The Common Stock
(including the Purchase Shares) conforms in all material respects to the
description thereof contained in the Prospectus. None of the outstanding shares
of Common Stock was issued in violation of preemptive rights, rights of first
refusal or other similar rights to subscribe for or purchase securities of the
Company. There are no authorized or outstanding options, warrants, preemptive
rights, rights of first refusal or other rights to purchase, or equity or debt
securities convertible into or exchangeable or exercisable for, any capital
stock of the Company or any of its subsidiaries other than those accurately
described in the Registration Statement and the Prospectus.
(k) Stock Exchange Listing. All shares of Common Stock to be issued
hereunder have been or, prior to such issuance, will be approved for inclusion
or listing on the principal national securities exchange or automated quotation
system on which the Common Stock is listed or quoted (the "RELEVANT EXCHANGE"),
subject only to official notice of issuance.
(l) Intellectual Property Rights. Except as otherwise disclosed in the
Prospectus, the Company and each Material Subsidiary owns, leases, licenses or
otherwise possesses adequate trademarks, service marks, trade names, patents,
patent rights, copyrights, licenses, inventions, approvals and other
intellectual property (collectively, "INTELLECTUAL PROPERTY") necessary to
conduct its business as now conducted. Neither the Company nor any of its
Material Subsidiaries has received any written notice of any infringement of or
conflict with asserted rights of others with respect to any Intellectual
Property which infringement or conflict, individually or in the aggregate, could
be reasonably expected to result in a Material Adverse Change.
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(m) Possession of Licenses and Permits. Each of the Company and its
Material Subsidiaries possesses such permits, licenses, approvals, consents and
other authorizations (collectively, "GOVERNMENTAL LICENSES") issued by the
appropriate federal, state, local or foreign regulatory agencies or bodies as
are necessary to conduct the business now operated by it except as could not,
individually or in the aggregate, reasonably be expected to result in a Material
Adverse Change. The Company and its Material Subsidiaries are in compliance with
the terms and conditions of all such Governmental Licenses, except where the
failure so to comply could not, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Change. All of the Governmental
Licenses are valid and in full force and effect, except where the invalidity of
such Governmental Licenses or the failure of such Governmental Licenses to be in
full force and effect could not, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Change. Neither the Company nor any of
its Material Subsidiaries has received any written notice of proceedings
relating to the revocation or modification of any such Governmental Licenses
which, individually or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, could reasonably be expected to result in a
Material Adverse Change.
(n) Company Not an "Investment Company." The Company is not, and upon
the issuance and sale of the Purchase Shares as herein contemplated and the
application of the net proceeds therefrom as described in the Prospectus will
not be, an "investment company" within the meaning of the Investment Company Act
of 1940, as amended (the "INVESTMENT COMPANY ACT") and the rules and regulations
of the Commission thereunder.
(o) Price Stabilization or Manipulation. The Company has not taken and
will not take, directly or indirectly, any action designed to or that could be
reasonably expected to cause or result in stabilization or manipulation of the
price of the Common Stock to facilitate the sale or resale of any shares of
Common Stock delivered hereunder. Notwithstanding the foregoing, the repurchase
by the Company from time to time pursuant to a share repurchase program
authorized by the Board of Directors of the Company, if conducted in accordance
with applicable law (including without limitation Regulation M under the 1934
Act), shall not be deemed or considered to be such stabilization or
manipulation.
(p) Related Party Transactions. There are no business relationships or
related party transactions involving the Company or any subsidiary or any other
person required to be described in the Prospectus that have not been described
as required.
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(q) Environmental Laws.
(i) Except as would not have or could not be reasonably expected to
result in a Material Adverse Change, or as is not otherwise disclosed in the
Prospectus:
(A) Each of the real properties owned by the Company or any of its
Material Subsidiaries (the "REAL PROPERTIES") and all operations at the
Real Properties are in compliance with all applicable Environmental
Laws, and there is no violation of any Environmental Law with respect
to the Real Properties or the businesses operated by the Company or any
of its Material Subsidiaries (the "BUSINESSES"), and there are no
conditions relating to the Businesses or Real Properties that could be
reasonably expected to give rise to liability under any applicable
Environmental Laws.
(B) Neither the Company nor any of its Material Subsidiaries has
received any written notice of, or inquiry from any governmental
authority regarding, any violation, alleged violation, non-compliance,
liability or potential liability regarding Hazardous Materials or
compliance with Environmental Laws with regard to any of the Real
Properties or the Businesses, nor does the Company or any of its
Material Subsidiaries have knowledge or reason to believe that any such
notice is being threatened.
(C) Hazardous Materials have not been transported or disposed of from
the Real Properties, or generated, treated, stored or disposed of at,
on or under any of the Real Properties or any other location, in each
case by, or on behalf or with the permission of, the Company or any of
its Material Subsidiaries.
(D) No judicial proceeding or governmental or administrative action is
pending or, to the knowledge of the Company, threatened, under any
Environmental Law to which the Company or any Material Subsidiary, is
or, to the best knowledge of the Company, will be named as a party, nor
are there any consent decrees or other decrees, consent orders,
administrative orders or other orders, or other administrative or
judicial requirements outstanding under any Environmental Law with
respect to the Company or any of its Material Subsidiaries, the Real
Properties or the Businesses.
(E) There has been no release or, to the best knowledge of the Company
or any Material Subsidiary, threat of release of Hazardous Materials at
or from the Real Properties, or arising from or related to the
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operations (including, without limitation, disposal) of the Company or
any of its Material Subsidiaries in connection with the Real Properties
or otherwise in connection with the Businesses, in violation of, or in
amounts or in a manner that could give rise to liability under,
Environmental Laws.
(F) None of the Real Properties contains, or has previously contained,
any Hazardous Materials at, on or under the Real Properties in amounts
or concentrations that, if released, constitute or constituted a
violation of, or would give rise to liability under, Environmental
Laws.
(G) Neither the Company nor any of its Material Subsidiaries, has
assumed any liability of any Person (other than the Company or one of
its Material Subsidiaries) under any Environmental Law.
(ii) The Company has adopted procedures that are designed to
(A) ensure that for the Company and each of the its Material
Subsidiaries, each of their respective operations and each of the
properties owned or leased by each such entity remains in compliance
with applicable Environmental Laws, to the extent that the failure to
comply with such Environmental Laws would result in or could be
reasonably expected to result in a Material Adverse Change and (B)
manage, to the same extent as and in accordance with the practices of
companies engaged in the same or a similar business, any liabilities or
potential liabilities that each such entity, any of its respective
operations and each of the properties owned or leased by such entity
may have under applicable Environmental Laws.
(r) Bring-Down of Representations. The Company shall reaffirm the
representations and warranties set forth in this Section 3 as of each Pricing
Date and Purchase Date (each such day, a "RELEVANT DATE").
SECTION 4. Conditions to Pricing and Purchase.
The obligations of the Underwriter to purchase and pay for Purchase
Shares as provided herein on any Pricing Date or Purchase Date, respectively,
shall be subject to the accuracy of the representations and warranties on such
date on the part of the Company referred to in Section 3(r), to the timely
performance by the Company of its covenants and other obligations hereunder, and
to each of the following additional conditions:
(a) Opinion of Company Counsel. The Company shall have caused to be
delivered to the Underwriter by the General Counsel of the Company or the
Assistant Counsel of the Company and Xxxxxxx Xxxxx Xxxxxxx & Ingersoll, LLP,
Special Counsel for the Company (or such other counsel for the Company as shall
be designated by the Company and shall be reasonably acceptable to the
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Underwriter), on the date hereof, the Initial Pricing Date and each Bring-down
Date, the opinions of such counsel for the Company, dated as of the date hereof,
and the Initial Pricing Date and each Bring-down Date, respectively, to the
effect set forth in Exhibits A and B, respectively, provided that, in his
opinion to be delivered on the date hereof, Xxxxxx X. Xxxxx need express no
opinion with respect to the matters referred to in paragraph (vii) of Exhibit A,
and in its opinion to be delivered on the date, hereof Xxxxxxx Xxxxx Xxxxxxx &
Ingersoll, LLP (x) need express no opinion with respect to the matters referred
to in paragraph (vi) of Exhibit B and (y) with respect to the opinion called for
in paragraph (v) of Exhibit B, need express no opinion with respect to the
captions, "Risk Factors," "Description of Capital Stock," "Shares Eligible for
Future Sale," "Certain United States Income Tax Considerations," or
"Underwriting.".
(b) Opinion of Underwriter's Counsel. The Underwriter shall have
received the opinion or opinions of counsel for the Underwriter (x) on the date
hereof, dated as of the date hereof, covering the matters set forth in paragraph
(i) of Exhibit A and paragraph (i) of Exhibit B and (ii) on the Initial Pricing
Date and each Bring-down Date, dated as of such date, covering the matters set
forth in paragraphs (i) (vi) (with respect to subparagraph (E)(i) only) and
(vii) of Exhibit A and paragraphs (ii) and (v) (with respect to the captions
"Description of Capital Stock" and "Underwriting" under subparagraph (A) only)
and the penultimate paragraph of Exhibit B.
(c) Officer's Certificate. As of the date hereof, the Initial Pricing
Date and each Bring-down Date, the Underwriter shall have received a certificate
of any Co-Chief Executive Officer, President or Senior Vice President of the
Company, dated on or prior to such date, to the effect that
(i) since the respective dates as of which information is
given in the Prospectus, (A) there has been no Material Adverse Change
and (B) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted, are pending or, to the best of such officer's knowledge,
are threatened by the Commission;
(ii) the representations and warranties of the Company set
forth in this Forward Underwriting Agreement are true and correct as of
such date; and
(iii) the Company has complied with all the agreements and
satisfied all the conditions on its part to be performed or satisfied
at or prior to such date.
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(d) Effectiveness of Registration Statement. As of each Relevant Date,
the Registration Statement shall be effective under the 1933 Act and no stop
order suspending the effectiveness of the Registration Statement shall have been
issued under the 1933 Act and no proceedings for that purpose shall have been
instituted or be pending or threatened by the Commission, and any request on the
part of the Commission for additional information shall have been complied with
to the reasonable satisfaction of the Underwriter. The Prospectus shall contain
information relating to the description of the Common Stock, the specific method
of distribution and similar matters and shall be filed with the Commission in
accordance with Rule 424(b)(1), (2), (3), (4) or (5), as applicable (or any
required post-effective amendment providing such information shall have been
filed and declared effective), or, if the Company has elected to rely upon Rule
434 of the 1933 Act Regulations, a Term Sheet including the Rule 434 Information
shall have been filed with the Commission in accordance with Rule 424(b)(7).
(e) Opportunity for Due Diligence. As of each Relevant Date, the
Underwriter shall have been afforded a reasonable opportunity to conduct a due
diligence investigation with respect to the Company customary in scope for
underwritten offerings of equity securities and the results of such
investigation shall be satisfactory to the Underwriter, in its sole discretion.
(f) No Senior Bank Debt Default. As of each Relevant Date, no Event of
Default (as defined in the Credit Agreement) shall have occurred and be
continuing.
(g) The Company shall cause to be delivered to the Underwriter on the
Initial Pricing Date and each Comfort Bring-down Date letters from the
independent public accountants for the Company and any independent public
accountants who reported or performed other procedures (in any relevant prior
period) on the financial statements of the Company or any company acquired by
the Company for which financial statements are required under the applicable
1933 Act or 1934 Act Regulations, each dated such date, in form and substance
satisfactory to the Underwriter, containing statements and information of the
type ordinarily included in accountants' "comfort letters" to underwriters,
delivered according to Statement of Auditing Standards No. 72 (or any successor
bulletin), with respect to the financial statements and certain financial
information (including without limitation any pro forma financial information)
contained in the Registration Statement and the Prospectus and with a "cut-off
date" referred to therein, a date not more than three Business Days prior to
such date.
(h) Successful Remarketing or Redemption of Trust Preferred
Securities. On or prior to the Initial Pricing Date, the Trust Preferred
Securities (or, if Subordinated Notes shall have been distributed with respect
to the Trust Preferred
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Securities, such Subordinated Notes) shall have been either (i) remarketed
pursuant to the terms of the Remarketing Agreement or (ii) mandatorily redeemed
or matured in accordance with their terms pursuant to the applicable provisions
of the Trust Agreement and Indenture and, in each case, the holders of the Trust
Preferred Securities or Subordinated Notes, as the case may be, shall have
received the proceeds of such remarketing or mandatory redemption (or maturity),
as the case may be.
(i) Effect of Failure of Conditions. If any condition specified in
this Section 4 is not satisfied with respect to the purchase and settlement of
Purchase Shares on any Pricing Date or Purchase Date when and as required to be
satisfied, the Underwriter shall be released from its obligations hereunder with
respect thereto.
(j) Ratification. The Board of Directors of the Company shall have
ratified this Agreement and actions to be taken by the Company in connection
herewith.
SECTION 5. Registration Agreements.
The Company covenants and agrees with the Underwriter as follows:
(a) Without limiting the generality of the provisions of Sections 4(d)
and 5(c), during the period beginning on the date hereof and ending on the date
all Purchase Shares have been sold pursuant to the Registration Statement (the
"EFFECTIVENESS PERIOD"), prior to amending or supplementing the Registration
Statement or the Prospectus, the Company shall furnish to the Underwriter for
review a copy of each such proposed amendment or supplement that could
reasonably relate to the offer and sale of Purchase Shares, and the Company
shall not file any such proposed amendment or supplement to which the
Underwriter reasonably objects within 5 days of receipt thereof.
(b) During the Effectiveness Period, the Company shall promptly advise
the Underwriter in writing (A) of the receipt of any comments of, or requests
for additional or supplemental information from, the Commission regarding the
Registration Statement, (B) of the time and date of any filing of any
post-effective amendment to the Registration Statement or any amendment or
supplement to any related preliminary prospectus or the Prospectus, (C) of the
time and date that any post-effective amendment to the Registration Statement
becomes effective, (D) of the occurrence of any event or the existence of any
condition as a result of which it is necessary to amend or supplement the
Prospectus so that such Prospectus does not include an untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the
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circumstances when the Prospectus is delivered to a purchaser of Common Stock,
not misleading, and (E) of the issuance by the Commission of any stop order
suspending the effectiveness of such Registration Statement or any
post-effective amendment thereto or of any order preventing or suspending the
use of any related preliminary prospectus or the Prospectus, or of any
proceedings to remove, suspend or terminate from listing or quotation the Common
Stock from the Relevant Exchange, or, to the best knowledge of the Company, of
the threatening or initiation of any proceedings for any of such purposes. If
the Commission shall enter any such stop order at any time, the Company shall
use its best efforts to obtain the lifting of such order at the earliest
possible moment. Additionally, the Company agrees that it shall comply with the
provisions of Rules 424(b), 430A and 434, as applicable, under the 1933 Act and
will use its reasonable efforts to confirm that any filings made by the Company
under such Rule 424(b) were received in a timely manner by the Commission.
(c) If, during the Effectiveness Period for any Registration
Statement, any event shall occur or condition exist as a result of which it is
necessary to amend or supplement the related Prospectus so that such Prospectus
does not include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances when the Prospectus is delivered to a purchaser of Common
Stock, not misleading, or if in the opinion of the Underwriter it is otherwise
necessary to amend or supplement such Prospectus to comply with law, the Company
agrees to prepare promptly, file (subject to Section 5(a)) with the Commission
and furnish at its own expense to the Underwriter, amendments or supplements to
such Prospectus so that the Prospectus as so amended or supplemented will not
include an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser of Common Stock,
not misleading or so that such Prospectus, as so amended or supplemented, will
comply with law.
(d) The Company agrees to furnish the Underwriter, without charge,
during the Effectiveness Period, as many copies of the Prospectus and any
amendments and supplements thereto as the Underwriter may reasonably request.
(e) The Company shall cooperate with the Underwriter to qualify or
register the Purchase Shares registered pursuant to the Registration Statement
for sale under (or obtain exemptions from the application of) the state
securities or blue sky laws of those jurisdictions designated by the
Underwriter, shall comply with such laws and shall continue such qualifications,
registrations and exemptions in effect so long as required for the distribution
of the Purchase Shares. The Company shall not be required to qualify as a
foreign corporation or to take any action that would subject it to general
service of process in any such
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jurisdiction where it is not presently qualified or where it would as a result
of such action be subject to taxation as a foreign corporation. The Company will
advise the Underwriter promptly of the suspension of the qualification or
registration of (or any exemption therefrom with respect to) such Purchase
Shares for offering, sale or trading in any jurisdiction or any initiation or
threat of any proceeding for any such purpose, and in the event of the issuance
of any order suspending such qualification, registration or exemption, the
Company shall use its best efforts to obtain the withdrawal thereof at the
earliest possible moment.
SECTION 6. Additional Covenants of the Company.
The Company further covenants and agrees with the Underwriter as
follows:
(a) During the Effectiveness Period, the Company shall continue to
engage and maintain, at its expense, a registrar and transfer agent for the
Common Stock.
(b) During the Effectiveness Period, the Company will timely file such
reports pursuant to the 1934 Act as are necessary in order to make generally
available to its securityholders as soon as practicable an earnings statement
for the purposes of, and to provide the benefits contemplated by, the last
paragraph of Section 11(a) of the 1933 Act.
(c) During the Effectiveness Period, the Company shall file, on a
timely basis, with the Commission and the Relevant Exchange all reports and
documents required to be filed under the 1934 Act or the rules of the Relevant
Exchange.
(d) During the Effectiveness Period, the Company shall furnish to the
Underwriter (A) at the time delivered to stockholders, copies of the Annual
Report of the Company containing the balance sheet of the Company as of the
close of such fiscal year and statements of income, stockholders' equity and
cash flows for the year then ended and the opinion thereon of the Company's
independent public or certified public accountants; (B) as soon as practicable
after the filing thereof, unless available to the Underwriter on XXXXX or the
Company's website, copies of each proxy statement, Annual Report on Form 10- K,
Quarterly Report on Form 10-Q, Current Report on Form 8-K or other report filed
by the Company with the Commission or any securities exchange or automated
quotation system; and (C) as soon as available, copies of any report or
communication of the Company mailed generally to holders of its capital stock.
(e) At all times during the Effectiveness Period, if requested by the
Underwriter, the Company shall cause to be delivered to the Underwriter such
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information, documents and opinions as they may reasonably require for the
purposes of enabling it to pass upon the issuance and delivery of the Purchase
Shares as contemplated herein or in order to evidence the accuracy of any of the
representations and warranties, or the satisfaction of any of the conditions or
agreements herein contained.
(f) The Company will reserve and keep available at all times, free of
preemptive or other similar rights, a sufficient number (the "RESERVE NUMBER")
of shares (which, in any event, shall not be less than 20,000,000 (as may be
adjusted from time to time pursuant to Section 8)) of Common Stock and capacity
on the Registration Statement for the purpose of enabling the Company to satisfy
its obligations to issue and deliver the Purchase Shares hereunder.
(g) During the period from the date hereof until the earlier of the
final day of the Dribble-out Period or any earlier termination of this Forward
Underwriting Agreement, the Company will not, without the prior written consent
of the Underwriter (which consent may be withheld at the reasonable discretion
of the Underwriter) sell or offer or announce the offering of, or file any
registration statement under the 1933 Act in respect of, or enter into any
agreement or arrangement providing for the offer or sale of, any shares of
Common Stock, except in the case of a merger of the Company; provided, however,
that the Company may issue shares of its Common Stock pursuant to any stock
option, stock bonus or other stock plan or arrangement described in the
Prospectus and may issue securities convertible into Common Stock and the Common
Stock underlying such securities.
SECTION 7. Acceleration of Commencement Date.
(a) Subject to Section 4(h), if the Closing Price of the Common Stock,
as determined by the Underwriter, on any day prior to the Commencement Date is
less than the Trigger Price (a "STOCK PRICE ACCELERATION EVENT"), then
Commencement Date shall be accelerated to the date that is the earliest to occur
of (x) the nineteenth day immediately succeeding the date on which such Stock
Price Acceleration Event shall have occurred, (y) the Trading Day immediately
following the Remarketing Settlement Date, (as defined in the Remarketing
Agreement) on which the Remarketing Agent (as defined in the Remarketing
Agreement) shall have received the proceeds of the related Remarketing (as
defined in the Remarketing Agreement), but in no event later than the third
Scheduled Trading Day prior to November 10, 1999.
(b) If the Company shall redeem the Subordinated Notes as a result of
a Failed Remarketing (as defined in the Remarketing Agreement) prior to the
Commencement Date, then the Commencement Date shall be accelerated to the
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Trading Day immediately following the date of such redemption (a "COMPANY
ACCELERATION").
(c) The Company may, upon three Business Days' written notice to the
Underwriter, elect to accelerate the Commencement Date to any scheduled Trading
Day after the conditions set forth in Section 4(h) have been satisfied.
This Section 7 shall be subject in all respects to the provisions of Section 12.
SECTION 8. Adjustments to Trigger Price and Reserve Number.
Following the declaration of any Potential Adjustment Event, the
Underwriter shall determine (after consultation with the Company) whether such
Potential Adjustment Event has a diluting or concentrative effect on the
theoretical value of the Common Stock and, if so, shall make the corresponding
adjustment(s), if any, to the Trigger Price and the Reserve Number. The
Underwriter may, but need not, determine the appropriate adjustment(s) by
reference to the adjustment(s) in respect of such Potential Adjustment Event
made by an options exchange to options on the Common Stock traded on that
options exchange. In the event of any merger, consolidation or reorganization of
the Company, the Underwriter shall determine the appropriate Trigger Price and
Reserve Number as a result of such event.
SECTION 9. Expenses.
The Company agrees to pay all costs, fees and expenses incurred in
connection with the performance of its obligations hereunder and in connection
with the transactions contemplated hereby, including without limitation (a) all
costs and expenses incident to the authorization, issuance, sale and delivery of
the Purchase Shares (including all printing and engraving costs), (b) all fees
and expenses of the registrar and transfer agent of the Common Stock, (c) all
necessary issue, transfer and other stamp taxes in connection with the issuance
and delivery of the Purchase Shares to the Underwriter, (d) all fees and
expenses of the Company's counsel, independent public or certified public
accountants and other advisors, (e) all costs and expenses incurred in
connection with the preparation, printing, filing, shipping and distribution of
any Registration Statement (including financial statements, exhibits, schedules,
consents and certificates of experts), each related preliminary prospectus and
the related Prospectus, and all amendments and supplements thereto, and this
Forward Underwriting Agreement, (f) all filing fees and other expenses incurred
by the Company or the Underwriter in connection with qualifying or registering
(or obtaining exemptions from the qualification or registration of) any Common
Stock delivered hereunder for offer and sale under the state securities or blue
sky
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laws and, if requested by the Underwriter, preparing and printing a "BLUE SKY
SURVEY" or memorandum, and any supplements thereto, advising the Underwriter of
such qualifications, registrations and exemptions, (g) the fees and expenses
associated with listing or including any shares of Common Stock delivered
hereunder on the Relevant Exchange, (h) the fees and expenses of counsel for the
Underwriter and its Affiliates incurred in connection with the transactions
contemplated by this Forward Underwriting Agreement and (i) all other fees,
costs and expenses referred to in Item 13 or Item 14, as the case may be, of
Part II of the Registration Statement.
SECTION 10. Indemnification.
(a) Indemnification of the Underwriter. The Company agrees to
indemnify and hold harmless the Underwriter, its officers and employees, and
each person, if any, who controls the Underwriter within the meaning of the 1933
Act and the 1934 Act against any loss, claim, damage, liability or expense, as
incurred, to which the Underwriter or such controlling person may become
subject, under the 1933 Act, the 1934 Act or other federal or state statutory
law or regulation, or at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of the
Company), insofar as such loss, claim, damage, liability or expense (or actions
in respect thereof as contemplated below) arises out of or is based (i) upon any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement, or any amendment thereto, including any information
deemed to be a part thereof pursuant to Rule 430A or Rule 434 under the 1933
Act, or the omission or alleged omission therefrom of a material fact required
to be stated therein or necessary to make the statements therein not misleading;
or (ii) upon any untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto), or the omission or alleged omission therefrom of a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; or (iii) in whole or
in part upon any inaccuracy in the representations and warranties of the Company
contained herein; or (iv) in whole or in part upon any failure of the Company to
perform its obligations hereunder or under law; or (v) any act or failure to act
or any alleged act or failure to act by the Underwriter in connection with, or
relating in any manner to, the Common Stock or the offerings contemplated
hereby, and which is included as part of or referred to in any loss, claim,
damage, liability or action arising out of or based upon any matter covered by
clause (i) or (ii) above, provided that the Company shall not be liable under
this clause (v) to the extent that a court of competent jurisdiction shall have
determined by a final judgment that such loss, claim, damage, liability or
action resulted directly from any such acts or failures to act undertaken or
omitted to be taken by the Underwriter
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through its bad faith, gross negligence or willful misconduct; and to reimburse
the Underwriter and each such controlling person for any and all expenses
(including the fees and disbursements of counsel chosen by the Underwriter) as
such expenses are reasonably incurred by the Underwriter or such controlling
person in connection with investigating, defending, settling, compromising or
paying any such loss, claim, damage, liability, expense or action; provided,
however, that the foregoing indemnity agreement shall not apply to any loss,
claim, damage, liability or expense to the extent, but only to the extent,
arising out of or based upon any untrue statement or alleged untrue statement or
omission or alleged omission made in reliance upon and in conformity with
written information furnished to the Company by the Underwriter expressly for
use in the Registration Statement, any preliminary prospectus or the Prospectus
(or any amendment or supplement thereto); and provided, further, that with
respect to any preliminary prospectus, the foregoing indemnity agreement shall
not inure to the benefit of the Underwriter from whom the person asserting any
loss, claim, damage, liability or expense purchased Purchase Shares, or any
person controlling the Underwriter, if copies of the Prospectus were timely
delivered to the Underwriter pursuant to Section 5(d) and a copy of the
Prospectus (as then amended or supplemented if the Company shall have furnished
any amendments or supplements thereto) was not sent or given by or on behalf of
the Underwriter to such person, if required by law so to have been delivered, at
or prior to the written confirmation of the sale of the Purchase Shares to such
person, and if the Prospectus (as so amended or supplemented) would have cured
the defect giving rise to such loss, claim, damage, liability or expense. The
indemnity agreement set forth in this Section 10 shall be in addition to any
liabilities that the Company may otherwise have.
(b) Indemnification of the Company, its Directors and Officers. The
Underwriter agrees to indemnify and hold harmless the Company, each of its
directors, each of its officers who signed the Registration Statement and each
person, if any, who controls the Company within the meaning of the 1933 Act or
the 1934 Act, against any loss, claim, damage, liability or expense, as
incurred, to which the Company, or any such director, officer or controlling
person may become subject, under the 1933 Act, the 1934 Act, or other federal or
state statutory law or regulation, or at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the written
consent of the Underwriter), insofar as such loss, claim, damage, liability or
expense (or actions in respect thereof as contemplated below) arises out of or
is based upon any untrue or alleged untrue statement of a material fact
contained in the Registration Statement, any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto), or arises out of or is
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, in each case to the
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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, any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto), in reliance upon and in conformity with written information
furnished to the Company by the Underwriter expressly for use therein; and to
reimburse the Company, or any such director, officer or controlling person for
any and all expenses (including the fees and disbursements of counsel chosen by
any such person) as such expenses are reasonably incurred by the Company, or any
such director, officer or controlling person in connection with investigating,
defending, settling, compromising or paying any such loss, claim, damage,
liability, expense or action. The indemnity agreement set forth in this Section
10 shall be in addition to any liabilities that the Underwriter may otherwise
have.
(c) Notifications and Other Indemnification Procedures. Promptly after
receipt by an indemnified party under this Section 10 of notice of the
commencement of any action, such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party under this Section 10,
notify the indemnifying party in writing of the commencement thereof, but the
omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party for contribution or
otherwise than under the indemnity agreement contained in this Section 10 or to
the extent it is not prejudiced as a proximate result of such failure. In case
any such action is brought against any indemnified party and such indemnified
party seeks or intends to seek indemnity from an indemnifying party, the
indemnifying party will be entitled to participate in, and, to the extent that
it shall elect, jointly with all other indemnifying parties similarly notified,
by written notice delivered to the indemnified party promptly after receiving
the aforesaid notice from such indemnified party, to assume the defense thereof
with counsel reasonably satisfactory to such indemnified party; provided,
however, if the defendants in any such action include both the indemnified party
and the indemnifying party and the indemnified party shall have reasonably
concluded that a conflict may arise between the positions of the indemnifying
party and the indemnified party in conducting the defense of any such action or
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, the indemnified party or parties shall have the right to
select separate counsel reasonably acceptable to the indemnifying party to
assume such legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties. Upon receipt of notice
from the indemnifying party to such indemnified party of such indemnifying
party's election so to assume the defense of such action and approval by the
indemnified party of counsel, the indemnifying party will not be liable to such
indemnified party under this Section 10 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the
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defense thereof unless (i) the indemnified party shall have employed separate
counsel in accordance with the proviso to the next preceding sentence (it being
understood, however, that the indemnifying party shall not be liable for the
expenses of more than one separate counsel (together with local counsel),
approved by the indemnifying party, or (ii) the indemnifying party shall not
have employed counsel satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of commencement of the
action, in each of which cases the fees and expenses of counsel shall be at the
expense of the indemnifying party.
(d) Settlements. The indemnifying party under this Section 10 shall
not be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
against any loss, claim, damage, liability or expense by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by Section
10(c) hereof, the indemnifying party agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 60 days after receipt by such indemnifying
party of the aforesaid request and (ii) such indemnifying party shall not have
reimbursed the indemnified party in accordance with such request prior to the
date of such settlement. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement, compromise or consent
to the entry of judgment in any pending or threatened action, suit or proceeding
in respect of which any indemnified party is or could have been a party and
indemnity was or could have been sought hereunder by such indemnified party,
unless such settlement, compromise or consent includes an unconditional release
of such indemnified party from all liability on claims that are the subject
matter of such action, suit or proceeding.
SECTION 11. Contribution.
If the indemnification provided for in Section 10 is for any reason
held to be unavailable to or otherwise insufficient to hold harmless an
indemnified party in respect of any losses, claims, damages, liabilities or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount paid or payable by such indemnified party, as incurred, as
a result of any losses, claims, damages, liabilities or expenses referred to
therein (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company, on the one hand, and the Underwriter, on the
other hand, from the offering of the Purchase Shares pursuant to this Agreement
or (ii) if the allocation provided by
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clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company, on the one hand, and the
Underwriter, on the other hand, in connection with the statements or omissions
or inaccuracies in the representations and warranties herein which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative benefits received by the
Company, on the one hand, and the Underwriter, on the other hand, in connection
with the offering of the Common Stock pursuant to this Agreement shall be deemed
to be in the same respective proportions as the total net proceeds from the
offering of the Purchase Shares pursuant to this Agreement (before deducting
expenses) received by the Company, and the total Underwriting Commission
received by the Underwriter, bear to the Aggregate Public Offering Price. The
relative fault of the Company, on the one hand, and the Underwriter, on the
other hand, shall be determined by reference to, among other things, whether any
such untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact or any such inaccurate or alleged
inaccurate representation or warranty relates to information supplied by the
Company, on the one hand, or the Underwriter, on the other hand, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses,
claims, damages, liabilities and expenses referred to above shall be deemed to
include, subject to the limitations set forth in Section 10, any legal or other
fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim. The provisions set forth in
Section 10 with respect to notice of commencement of any action shall apply if a
claim for contribution is to be made under this Section 11; provided, however,
that no additional notice shall be required with respect to any action for which
notice has been given under Section 10 for purposes of indemnification.
The Company and the Underwriter agree that it would not be just and
equitable if contribution pursuant to this Section 11 were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to in this Section 11.
Notwithstanding the provisions of this Section 11, the Underwriter
shall not be required to contribute any amount in excess of the Underwriting
Commissions received by the Underwriter in connection with the Purchase Shares
underwritten by it and distributed to the public. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 0000 Xxx) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 11, each officer and employee of
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the Underwriter and each person, if any, who controls the Underwriter within the
meaning of the 1933 Act and the Exchange Act shall have the same rights to
contribution as the Underwriter, and each director of the Company, each officer
of the Company who signed the Registration Statement, and each person, if any,
who controls the Company with the meaning of the 1933 Act and the 1934 Act shall
have the same rights to contribution as the Company.
SECTION 12. Termination of this Forward Underwriting Agreement.
(a) Execution of Terms Agreement. If at any time the parties enter
into a firm commitment underwriting agreement, with respect to Purchase Shares
(whether evidenced by a written agreement substantially in the form of a Terms
Agreement (as defined in the Underwriting Agreement between the Company and
NationsBanc Xxxxxxxxxx Securities, LLC attached as an exhibit to, or
incorporated by reference in, the Registration Statement) or any other form of
underwriting agreement) at an aggregate public offering price equal to the
Settlement Balance as of the date of such underwriting agreement, then this
Forward Underwriting Agreement shall terminate without any liability (except as
provided in Section 12(f)) on the part of either party, except that all
obligations of the parties with respect to any Purchase Shares purchased and
sold on any Pricing Date prior to the date of such termination shall remain in
effect.
(b) Cross Acceleration Termination Event. Notwithstanding anything
herein to the contrary, if at any time a Senior Bank Debt Acceleration has
occurred, then this Forward Underwriting Agreement shall terminate and the
parties shall have no liability hereunder (except as provided in Section 12(f))
including any obligation of the Underwriter or the Company to pay for and
deliver, as the case may be, Purchase Shares sold on any Pricing Date prior to
the date of such Senior Bank Debt Acceleration.
(c) Failure of Company to Sell and Deliver Purchase Shares. If the
Company shall fail to deliver to the Underwriter the Purchase Shares to be
delivered by the Company on any Purchase Date pursuant to this Forward
Underwriting Agreement (except as permitted hereby), then the Underwriter may at
its option, by written notice to the Company, terminate this Forward
Underwriting Agreement without any liability on the part of the Underwriter,
except that all obligations of the parties with respect to any Purchase Shares
purchased and sold prior to the date of such failure shall remain in effect.
(d) The obligations of the Underwriter to purchase and pay for
Purchase Shares on any Purchase Date may be terminated by the Underwriter by
notice given to the Company if at any time since the corresponding Pricing Date
(i) trading or quotation in any of the Company's securities shall have been, or
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continue to be suspended or limited by the Commission or by the Relevant
Exchange, or trading in securities generally on the New York Stock Exchange,
Inc. shall have been, or continue to be, suspended or limited, or minimum or
maximum prices shall have been generally established on the New York Stock
Exchange, Inc. by the Commission; (ii) a general banking moratorium shall have
been declared by federal, New York or, Delaware authorities and continues to be
in effect; (iii) there shall have occurred, or continue to be, any outbreak or
escalation of national or international hostilities or any crisis or calamity,
or any change in the United States or international financial markets, or any
substantial change or development involving a prospective substantial change in
United States' or international political, financial or economic conditions
affecting the securities markets generally, as in the reasonable judgment of the
Underwriter is material and adverse and makes it impracticable to sell the
Purchase Shares in the manner and on the terms described in the Prospectus or to
enforce contracts for the sale of securities; (iv) in the reasonable judgment of
the Underwriter there shall have occurred any Material Adverse Change; or (v)
the Company shall have sustained a loss by strike, fire, flood, earthquake,
accident or other calamity of such character as in the reasonable judgment of
the Underwriter may interfere materially with the conduct of the business and
operations of the Company regardless of whether or not such loss shall have been
insured.
(e) Unless otherwise terminated pursuant to the terms hereof, this
Forward Underwriting Agreement will terminate on the third Business Day
immediately following the final day of the Dribble-out Period.
(f) Liability on Termination. Any termination pursuant to this Section
12 shall be without liability, other than as expressly provided herein, on the
part of (i) the Company to the Underwriter, except that the Company shall be
obligated to reimburse the expenses of the Underwriter pursuant to Section 13,
(ii) the Underwriter to the Company, or (iii) of any party hereto to any other
party except that the provisions of Section 10 and Section 11 shall at all times
be effective and shall survive such termination.
SECTION 13. Reimbursement of Underwriter's Expense. If this Forward
Underwriting Agreement is terminated by the Underwriter pursuant to paragraphs
(b), (c) or (d) (except for (d)(i) with respect to minimum or maximum prices or
(d)(v) of Section 12), the Company agrees to reimburse the Underwriter, upon
demand for all out-of-pocket expenses that shall have been reasonably incurred
by the Underwriter in connection with the proposed purchase and the offering and
sale of the Purchase Shares, including but not limited to travel expenses,
postage, facsimile and telephone charges.
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SECTION 14. Representations and Indemnities to Survive Delivery. The
respective indemnities, agreements, representations, warranties and other
statements of the Company and of its officers and of the Underwriter set forth
in or made pursuant to this Forward Underwriting Agreement will remain in full
force and effect, regardless of any investigation made by or on behalf of the
Underwriter or the Company or any of its partners, officers or directors or any
controlling person, as the case may be, and will survive delivery of and payment
for the Purchase Shares and any termination of this Forward Underwriting
Agreement.
SECTION 15. Governing Law.
THIS PURCHASE AGREEMENT SHALL BE GOVERNED BY THE LAW OF THE STATE OF
NEW YORK WITHOUT REFERENCE TO THE CHOICE OF LAW RULES THEREOF.
SECTION 16. Assignment and Transfer.
The rights and duties under this Forward Underwriting Agreement may not
be assigned or transferred by either party hereto without the prior written
consent of the other party hereto; provided that the Underwriter may assign any
of its rights or duties hereunder to any of its Affiliates without the prior
written consent of the Company but with prompt notice of the identity, addresses
and contact person of the assignee to the Company.
SECTION 17. Confidentiality.
Except as required by law (including the public announcement of this
transaction following its consummation) or judicial or administrative process,
or as requested by a regulatory authority or self-regulatory organization, each
party hereto agrees to keep this Forward Underwriting Agreement and the
transactions contemplated hereby and thereby confidential. The Underwriter
acknowledges that the Company intends to publish a press release describing the
principal terms of the transactions described in this Agreement, the Remarketing
Agreement and a Purchase Agreement dated the date hereof among the Company,
Hercules Trust V and NMS Services, Inc. (the "PURCHASE AGREEMENT"). Such press
release may be filed with the Commission in the sole discretion of the Company.
In addition, the Underwriter acknowledges that the Company intends to file this
Agreement, the Remarketing Agreement, the Purchase Agreement, the Trust
Agreement, the Indenture, as supplemented, as well as any other agreements
related thereto as exhibits to its next annual report on Form 10-K. The
Underwriter hereby agrees that the foregoing do not constitute violations of
this Section 17.
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In the event disclosure is permitted pursuant to the immediately
preceding sentence, the disclosing party shall (i) provide prior notice of such
disclosure to the other party, (ii) use its best efforts to minimize the extent
of such disclosure and (iii) comply with all reasonable requests of the other
party to minimize the extent of such disclosure. This Section 17 shall not
prevent either party from disclosing information as necessary to third-party
advisors in connection with the transactions contemplated hereby; provided that
such advisors agree in writing (unless obligated by its professional
responsibilities to do so) to be bound by this Section 17 as if a party hereto.
SECTION 18. Notices.
Unless otherwise specified, notices under this Forward Underwriting
Agreement may be made by telephone, to be confirmed in writing to the address
below. Changes to the information below must be made in writing.
(a) If to the Company:
Hercules Incorporated
Hercules Plaza
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
Attn: Vice President and Treasurer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with copy to each of the following:
Hercules Incorporated
Hercules Plaza
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
Attn: Corporate Secretary
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx, LLP
0000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxxxx, XX
Attn: Xxxxxx X. Xxxxx, Partner
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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(b) If to the Underwriter:
NationsBanc Xxxxxxxxxx Securities LLC
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
SECTION 19. Change in Law.
The parties agree that if there shall occur any amendment to, or change
in, the federal securities laws, or any regulations thereunder, relating to the
content, filing or delivery of the Registration Statement or the Prospectus,
including any change in the 1933 Act, the 1933 Act Regulations, the 1934 Act or
the 1934 Act Regulations, that has an effect on the obligations of the parties
hereunder, then the parties shall negotiate in good faith to modify the terms of
this Forward Underwriting Agreement to preserve the ability of the Company to
issue and sell to the Underwriter, and the Underwriter to sell in Market Sales,
the Purchase Shares in the manner contemplated hereby.
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Please confirm your agreement to the foregoing by signing and returning
to us the enclosed duplicate of this Forward Underwriting Agreement.
Very truly yours,
NATIONSBANC XXXXXXXXXX SECURITIES LLC
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Principal
Acknowledged and agreed to as of
the date first above written,
HERCULES INCORPORATED
By: /s/ R. K Xxxxxxx
---------------------
Name: R. Xxxxx Xxxxxxx
Title: Chairman and Co-Chief
Executive Officer
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EXHIBIT A
FORM OF OPINION OF COMPANY COUNSEL
Opinion of Company Counsel to be delivered pursuant to Section 4(a) of
the Forward Underwriting Agreement shall be to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware.
(ii) The Company is duly qualified as a foreign corporation
and is in good standing under the laws of each other jurisdiction where
its ownership, lease, licensing or operation of property or the conduct
of business requires such qualification, other than in such
jurisdiction or jurisdictions where the failure to be so qualified and
be in good standing could not reasonably be expected to result in a
Material Adverse Change.
(iii) The Company has all corporate power and authority and
the legal right to (x) own, lease and operate its properties, (y)
conduct the business in which it is currently engaged and (z) enter
into, and perform its obligations under, or as contemplated under, the
Forward Underwriting Agreement and consummate the transactions
contemplated thereby.
(iv) Neither the Company nor any of its Material Subsidiaries
is in violation of its charter or by-laws or is in default or, with the
giving of notice or lapse of time, would be in default ("DEFAULT")
under any indenture, mortgage, loan or credit agreement, note,
contract, franchise, lease or other instrument to which the Company or
any of its Material Subsidiaries is a party or by which it or any of
them may be bound, or to which any of the property or assets of the
Company or any of its Material Subsidiaries is subject (each, an
"EXISTING INSTRUMENT"), except for such Defaults as could not,
individually or in the aggregate, reasonably be expected to result in a
Material Adverse Change. The execution, delivery and performance by the
Company of this Forward Underwriting Agreement, the consummation of the
transactions herein contemplated and the compliance by the Company with
its obligations hereunder do not and will not result in any violation
of the provisions of the Certificate of Incorporation or By-Laws or
other constitutive documents of the Company or any Material Subsidiary,
do not and will not conflict with or constitute a breach of, Default or
a Debt Repayment Trigger Event under, or result in the creation or
imposition of any lien, charge or encumbrance upon any
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assets, properties or operations of the Company or any of its Material
Subsidiaries pursuant to, or require the consent of any other party to,
any Existing Instrument, except for such conflicts, breaches, Defaults,
liens (other than liens created by or contemplated in the Credit
Agreement as in effect of the date hereof), charges or encumbrances or
failure to obtain consent as would not, individually or in the
aggregate, result in a Material Adverse Change and will not result in
any violation of any applicable law or statute or any order, rule,
regulation or judgment of any court or governmental agency or
governmental body having jurisdiction over the Company or any of its
Material Subsidiaries or any of their respective assets, properties or
operations the result of which could be a Material Adverse Change.
(v) Each Material Subsidiary of the Company is a duly and
validly existing entity and is in good standing under the laws of the
jurisdiction of its incorporation, has all corporate power and
authority to own, lease, license and operate its properties and conduct
its business as currently conducted and is duly qualified as a foreign
entity in good standing in each other jurisdiction, where its
ownership, lease, license or operation of property or the conduct of
its business requires such qualification, other than in such
jurisdiction or jurisdictions where the failure to be so qualified and
or be in good standing could not reasonably be expected to result in
Material Adverse Change. All of the issued and outstanding capital
stock of each Material Subsidiary has been duly authorized and validly
issued, is fully paid and non-assessable and is owned by the Company,
directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien (other than those created by or
contemplated in the Credit Agreement as on November 12, 1998),
encumbrance or claim, to the best of such counsel's knowledge. None of
the outstanding shares of capital stock of any Material Subsidiary was
issued in violation of preemptive or other similar rights of any
securityholder of such Material Subsidiary.
(vi) (A) The authorized, issued and outstanding capital stock
of the Company is set forth in the Prospectus under the caption
"Capitalization" (other than for subsequent issuances, if any, pursuant
to employee benefit plans described in the Prospectus or upon exercise
of outstanding options or warrants described in the Prospectus). (B)
Such shares of capital stock have been duly authorized and validly
issued by the Company and are fully paid and non-assessable and, to the
best of such counsel's knowledge, have been issued in compliance with
federal and state securities laws. (C) The Common Stock (including the
Purchase Shares) conforms in all material respects to the description
thereof
X-0
00
xxxxxxxxx xx xxx Xxxxxxxxxx. (X) Xxxx of the outstanding shares of
Common Stock was issued in violation of preemptive rights, rights of
first refusal or other similar rights to subscribe for or purchase
securities of the Company. (E) No stockholder of the Company or any
other person has any preemptive right, right of first refusal or other
rights to subscribe for or purchase, securities of the Company (except
for any such rights granted pursuant to the Credit Agreement as in
effect on November 12, 1998) arising (i) by operation of the
Certificate of Incorporation or By-Laws of the Company or the General
Corporation Law of the State of Delaware or (ii) to the best of such
counsel's knowledge, otherwise.
(vii) No holder of the Common Stock is or will be subject to
personal liability by reason of being such a holder. The form of
certificate used to evidence the Purchase Shares is in due and proper
form and complies with all applicable requirements of the charter and
By-Laws of the Company and the General Corporation Law of the State of
Delaware.
(viii) The Company meets the requirements for use of Form S-3
under the 1933 Act. The Registration Statement (including any Rule
462(b) Registration Statement, if any) has been declared effective by
the Commission under the 1933 Act. To the best knowledge of such
counsel, the Company has complied to the Commission's satisfaction with
all requests of the Commission for additional or supplemental
information. No stop order suspending the effectiveness of the
Registration Statement is in effect and no proceedings for such purpose
have been instituted or are pending or, to the best of such counsel's
knowledge are contemplated or threatened by the Commission. Based on
the advice of the Division of Corporation Finance of the Commission,
any required filing of the Prospectus and any supplement thereto
pursuant to Rule 424(b) under the 1933 Act has been made in the manner
and within the time period required by such Rule 424(b).
(ix) The documents incorporated or deemed to be incorporated
by reference in the Registration Statement and the Prospectus, at the
time they were filed with the Commission, complied in all material
respects with the requirements of the 1934 Act and the 1934 Act
Regulations.
(x) To the best knowledge of such counsel, there are no
actions, suits, proceedings, inquiries or investigations before or
brought by any legal or governmental agency or body now pending or, to
the best of such counsel's knowledge, threatened against or affecting
the Company or any of its Material Subsidiaries which are required to
be disclosed in the
X-0
00
Xxxxxxxxxxxx Xxxxxxxxx and the Prospectus, other than those disclosed
therein.
(xi) To the best knowledge of such counsel, there are no
Existing Instruments required to be described or referred to in the
Registration Statement or the Prospectus or to be filed as exhibits
thereto other than those described or referred to therein or filed or
incorporated by reference as exhibits thereto; and the descriptions
thereof and references thereto are correct in all material respects.
(xii) No consent, approval, authorization, order registration
qualification, of or with filing any court or governmental agency or
body having jurisdiction over the Company or any of its Material
Subsidiaries or any of their respective properties is required for the
due authorization, execution and delivery by the Company of, and the
compliance by the Company with, all the terms of this Forward
Underwriting Agreement and the consummation by the Company of the
transactions contemplated thereby except such as have been obtained or
made by the Company, as may be required by the securities or Blue Sky
laws of the various States in connection with the offer and sale of the
Purchase Shares or where the failure to obtain such consent, approval,
authorization, order, registration, qualification, or make such filing
will not adversely affect such authorization, execution or delivery of
the Forward Underwriting Agreement, the compliance with the terms
thereof or the consummation by the Company of the transactions
contemplated hereby.
(xiii) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as
otherwise stated therein, (A) there has been no material adverse
change, or development that could reasonably be expected to result in a
material adverse change in the condition, financial or otherwise, in or
affecting the earnings, business, operations, financial position or
prospects, whether or not arising from transactions in the ordinary
course of business, of the Company and its subsidiaries, considered as
one entity, (B) there have been no transactions entered into by the
Company or any of its Material Subsidiaries, other than those arising
in the ordinary course of business, which are, individually or in the
aggregate, material with respect to the Company and its subsidiaries,
considered as one enterprise and (C) except for regular dividends on
the Company's Common Stock or preferred stock (which dividends include
amounts, sometimes called "dividend equivalents," paid under the
Company's employment benefit compensation plans on the Common Stock
grants (whether options, restricted stock or other) under such plans,
but only to the extent such amounts do not exceed the amounts of
ordinary
A-4
45
cash dividends that would be payable were such Common Stock grants
treated as Common Stock) or the applicable charter document or
supplement thereto, respectively, there has been no dividend or
distribution of any kind declared, paid or made by the Company on any
class of its capital stock.
(xiv) There are no persons with registration or other similar
rights to have any equity or debt securities registered for sale under
the Registration Statement, except for such rights as have been duly
waived.
(xv) The statements (A) in the Prospectus under the caption
(or analagous caption) "Business-Litigation", insofar as such
statements constitute matters of law, summaries of legal matters, the
Company's charter or By-Law provisions, documents or legal proceedings,
or legal conclusions, has been reviewed by such counsel and fairly
present and summarize, in all material respects, the matters referred
to therein.
In addition, such counsel shall state that he has participated in
conferences with officers and other representatives of the Company,
representatives of the independent public or certified public accountants for
the Company and with representatives of the Underwriter at which the contents of
the Registration Statement and the Prospectus, and any supplements or amendments
thereto, and related matters were discussed and, although such counsel is not
passing upon and does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectus (other than as specified above), and any supplements
or amendments thereto, on the basis of the foregoing, nothing has come to his
attention which would lead him to believe that either the Registration Statement
or any amendments thereto, at the time the Registration Statement or such
amendments became effective, 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 or that the Prospectus, as of its
date or as of the date of such opinion contained an untrue statement of a
material fact or omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading (it being understood that such counsel need express no
belief as to the financial statements or schedules or other financial or
statistical data derived therefrom, included or incorporated by reference in the
Registration Statement or the Prospectus or any amendments or supplements
thereto).
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the State of
Delaware, or the federal law of the United States, to the extent he deems proper
A-5
46
and specified in such opinion, upon the opinion (which shall be dated the date
of such opinion, shall be satisfactory in form and substance to the Underwriter,
shall expressly state that the Underwriter may rely on such opinion as if it
were addressed to the Underwriter and shall be furnished to the Underwriter) of
other counsel of good standing whom he believes to be reliable and who are
satisfactory to the Underwriter; provided, however, that such counsel shall
further state that he believes that he and the Underwriter are justified in
relying upon such opinion of other counsel, and (B) as to matters of fact, to
the extent they deem proper, on certificates of responsible officers of the
Company and public officials.
A-6
47
EXHIBIT B
FORM OF OPINION OF SPECIAL COUNSEL TO THE COMPANY
Opinion of Special Counsel to the Company to be delivered pursuant to
Section 4(a) of the Forward Underwriting Agreement shall be to the effect that:
(i) The Forward Underwriting Agreement has been duly
authorized, executed and delivered by, and is a valid and binding
agreement of, the Company, enforceable in accordance with its terms,
except as rights to indemnification thereunder may be limited by
applicable law and except as the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other laws of
general application relating to or affecting the enforcement of
creditors' rights or by general equitable principles (except that the
opinion to be delivered on the date hereof may state that they are
subject to ratification of this Agreement and of actions to be taken by
the Company in connection therewith by the Board of Directors of the
Company).
(ii) The Purchase Shares to be purchased by the Underwriter
from the Company have been duly authorized for issuance and sale
pursuant to the Forward Underwriting Agreement (except that the opinion
to be delivered on the date hereof may state that they are subject to
ratification of this Agreement and of actions to be taken by the
Company in connection therewith by the Board of Directors of the
Company) and, when issued and delivered by the Company pursuant to the
Forward Underwriting Agreement against payment of the consideration set
forth therein, will be validly issued, fully paid and non-assessable.
(iii) The Company meets the requirements for use of Form S-3
under the 1933 Act. The Registration Statement (including any Rule
462(b) Registration Statement, if any) has been declared effective by
the Commission under the 1933 Act. To the best knowledge of such
counsel, the Company has complied to the Commission's satisfaction with
all requests of the Commission for additional or supplemental
information. No stop order suspending the effectiveness of the
Registration Statement is in effect and no proceedings for such purpose
have been instituted or are pending or, to the best of such counsel's
knowledge are contemplated or threatened by the Commission. To the
extent related to the offer and sale of Purchase Shares, each required
filing, if any, of the Prospectus and any supplement thereto pursuant
to Rule 424(b) under the 1933 Act has been
B-1
48
made in the manner and within the time period required by such Rule
424(b).
(iv) Based on advice from the Division of Corporate Finance of
the Commission, the Registration Statement, the Prospectus therein and
each amendment or supplement to the Registration Statement and the
Prospectus as of its effective or issue date, as applicable, (other
than the financial statements and supporting schedules included or
incorporated by reference therein or in exhibits to or excluded from
the Registration Statement, as to which no opinion need be expressed)
comply as to form in all material respects with the applicable
requirements of the 1933 Act and the 1933 Act Regulations.
(v) The statements (A) in the Prospectus under the captions
"Risk Factors--[___]," "Description of Capital Stock," "Management's
Discussion and Analysis and Results of Operations--Liquidity," "Certain
Relationships and Related Transactions," "Shares Eligible for Future
Sale," "Certain United States Income Tax Considerations" and
"Underwriting" or analogous captions and (B) in Item 14 and Item 15] of
the Registration Statement, insofar as such statements constitute
matters of law, summaries of legal matters, the Company's charter or
By-Law provisions, documents or legal proceedings, or legal
conclusions, has been reviewed by such counsel and fairly present and
summarize, in all material respects, the matters referred to therein.
(vi) The Company is not, and upon the issuance and sale of the
Purchase Shares as herein contemplated and the application of the net
proceeds therefrom as described in the Prospectus will not be, an
"investment company" within the meaning of the Investment Company Act
of 1940, as amended.
In addition, such counsel shall state that they have participated in
conferences with officers and other representatives of the Company,
representatives of the independent public or certified public accountants for
the Company and with representatives of the Underwriter at which the contents of
the Registration Statement and the Prospectus, and any supplements or amendments
thereto, and related matters were discussed and, although such counsel is not
passing upon and does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectus (other than as specified above), and any supplements
or amendments thereto, on the basis of the foregoing, nothing has come to their
attention which would lead them to believe that either the Registration
Statement
B-2
49
or any amendments thereto, at the time the Registration Statement or such
amendments became effective, 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 or that the Prospectus, as of its
date or as of the date of such opinion contained an untrue statement of a
material fact or omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading (it being understood that such counsel need express no
belief as to the financial statements or schedules or other financial or
statistical data derived therefrom, included or incorporated by reference in the
Registration Statement or the Prospectus or any amendments or supplements
thereto).
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the General
Corporation Law of the State of Delaware, the State of New York or the federal
law of the United States, to the extent they deem proper and specified in such
opinion, upon the opinion (which shall be dated the date of such opinion, shall
be satisfactory in form and substance to the Underwriter, shall expressly state
that the Underwriter may rely on such opinion as if it were addressed to the
Underwriter and shall be furnished to the Underwriter) of other counsel of good
standing whom they believe to be reliable and who are satisfactory to the
Underwriter; provided, however, that such counsel shall further state that they
believe that they and the Underwriter are justified in relying upon such opinion
of other counsel, and (B) as to matters of fact, to the extent they deem proper,
on certificates of responsible officers of the Company and public officials.
B-3
50
EXHIBIT C
[FORM OF] PRICING CERTIFICATE
Date of Certificate
-----------------------------------------------
Settlement Balance as of Close of Business
on day immediately preceding the date hereof
-----------------------
Aggregate Net Sale Price*
------------------------------------------
Daily Number of Purchase Shares
------------------------------------
Settlement Balance as of the Close of Business
on the date hereof
-------------------------------------------------
*Net of Commissions paid to persons outside the NationsBank Group
Capitalized terms used herein have the meaning set forth in the Forward
Underwriting Agreement, dated as of November 12, 1998, between Hercules
Incorporated and NationsBanc Xxxxxxxxxx Securities LLC.
--------------------------------------
Authorized Signatory of
NationsBanc Xxxxxxxxxx Securities LLC
C-1
