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PREFERRED SECURITIES GUARANTEE AGREEMENT
HERCULES INCORPORATED
Dated as of ___________, ____
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TABLE OF CONTENTS
TABLE OF CONTENTS
PAGE
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ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation ................................ 2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application ............................... 5
SECTION 2.2 Lists of Holders of Securities ................................. 6
SECTION 2.3 Reports by the Preferred Securities Guarantee Trustee .......... 6
SECTION 2.4 Periodic Reports to Preferred Securities Guarantee Trustee ..... 6
SECTION 2.5 Evidence of Compliance with Conditions Precedent ............... 7
SECTION 2.6 Events of Default; Waiver ...................................... 7
SECTION 2.7 Event of Default; Notice ....................................... 7
SECTION 2.8 Conflicting Interests .......................................... 7
ARTICLE III
POWERS, DUTIES AND RIGHTS OF PREFERRED SECURITIES GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Securities Guarantee Trustee 8
SECTION 3.2 Certain Rights of Preferred Securities Guarantee Trustee ....... 10
SECTION 3.3 Not Responsible for Recitals or Issuance of Preferred Securities
Guarantee....................................................... 12
ARTICLE IV
PREFERRED SECURITIES GUARANTEE TRUSTEE
SECTION 4.1 Preferred Securities Guarantee Trustee; Eligibility ............ 12
SECTION 4.2 Appointment, Removal and Resignation of Preferred Securities
Guarantee Trustee............................................... 13
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ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee ....................................................... 14
SECTION 5.2 Waiver of Notice and Demand ..................................... 14
SECTION 5.3 Obligations Not Affected ........................................ 14
SECTION 5.4 Rights of Holders ............................................... 15
SECTION 5.5 Guarantee of Payment ............................................ 16
SECTION 5.6 Subrogation ..................................................... 16
SECTION 5.7 Independent Obligations ......................................... 16
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions ...................................... 16
SECTION 6.2 Ranking ......................................................... 17
ARTICLE VII
TERMINATION
SECTION 7.1 Termination ..................................................... 17
ARTICLE VIII
EXCULPATION, INDEMNIFICATION AND COMPENSATION
SECTION 8.1 Exculpation ..................................................... 18
SECTION 8.2 Indemnification ................................................. 18
SECTION 8.3 Compensation .................................................... 19
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns .......................................... 19
SECTION 9.2 Amendments ...................................................... 20
SECTION 9.3 Notices ......................................................... 20
SECTION 9.4 Benefit ......................................................... 21
SECTION 9.5 Governing Law ................................................... 21
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PREFERRED SECURITIES GUARANTEE AGREEMENT
THIS PREFERRED SECURITIES GUARANTEE AGREEMENT (the "Preferred
Securities Guarantee"), dated as of ___________, ____, is executed and delivered
by Hercules Incorporated, a Delaware corporation (the "Guarantor"), and The
Chase Manhattan Bank, a New York banking corporation, as trustee (the "Preferred
Securities Guarantee Trustee"), for the benefit of the Holders (as defined
herein) from time to time of the Preferred Securities (as defined herein) of
Hercules Trust III, a statutory business trust formed under the laws of the
State of Delaware (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Trust Agreement (the
"Agreement"), dated as of ___________, ____, among the trustees of the Issuer,
the Guarantor, as sponsor, and the holders from time to time of undivided
beneficial interests in the assets of the Issuer, the Issuer is issuing on the
date hereof _______ preferred securities, having an aggregate liquidation amount
of $___________, such preferred securities being designated the
___________________ Preferred Securities (collectively, the "Preferred
Securities").
WHEREAS, as an incentive for the Holders to purchase the Preferred
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Preferred Securities Guarantee, to pay to the
Holders of the Preferred Securities the Guarantee Payments (as defined herein)
and to make certain other payments on the terms and conditions set forth herein.
WHEREAS, the Guarantor is also executing and delivering a guarantee
agreement (the "Common Securities Guarantee") with substantially identical terms
to this Preferred Securities Guarantee, for the benefit of the holders of the
Common Securities (as defined herein), except that if an event of default under
the Agreement has occurred and is continuing, the rights of holders of the
Common Securities to receive Guarantee Payments under the Common Securities
Guarantee are subordinated, to the extent and in the manner set forth in the
Common Securities Guarantee, to the rights of holders of Preferred Securities to
receive Guarantee Payments under this Preferred Securities Guarantee.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby acknowledges shall
benefit the Guarantor, the Guarantor executes and delivers this Preferred
Securities Guarantee for the benefit of the Holders.
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ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
In this Preferred Securities Guarantee, unless the context otherwise
requires:
(a) capitalized terms used in this Preferred Securities Guarantee but
not defined in the preamble above have the respective meanings
assigned to them in this Section 1.1;
(b) terms defined in the Agreement as at the date of execution of this
Preferred Securities Guarantee have the same meaning when used in
this Preferred Securities Guarantee unless otherwise defined in this
Preferred Securities Guarantee;
(c) a term defined anywhere in this Preferred Securities Guarantee has
the same meaning throughout;
(d) all references to "the Preferred Securities Guarantee" or "this
Preferred Securities Guarantee" are to this Preferred Securities
Guarantee as modified, supplemented or amended from time to time;
(e) all references in this Preferred Securities Guarantee to Articles
and Sections are to Articles and Sections of this Preferred
Securities Guarantee, unless otherwise specified;
(f) a term defined in the Trust Indenture Act has the same meaning when
used in this Preferred Securities Guarantee, unless otherwise
defined in this Preferred Securities Guarantee or unless the context
otherwise requires; and
(g) a reference to the singular includes the plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule 405
under the Securities Act of 1933, as amended, or any successor rule thereunder.
"Business Day" means any day other than a Saturday or a Sunday, or a
day on which banking institutions in The City of New York or Wilmington,
Delaware are authorized or required by law, regulation or executive order to
close.
"Common Securities" means the securities representing common
undivided beneficial interests in the assets of the Issuer.
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"Corporate Trust Office" means the office of the Preferred
Securities Guarantee Trustee for the conduct of corporate trust business, at
which matters related to this Preferred Securities Guarantee Trustee shall, at
any particular time, be principally administered, which office at the date of
execution of this Agreement is located at Xxx Xxxxxxx Xxxxx, 00xx Xxxxx, 0000
Xxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000.
"Covered Person" means any Holder or beneficial owner of Preferred
Securities.
"Debentures" means the series of junior subordinated debt securities
of the Guarantor designated the _______________ Junior Subordinated Deferrable
Interest Debentures due ___________, held by the Property Trustee (as defined in
the Agreement) of the Issuer.
"Event of Default" means (i) a default by the Guarantor in respect
of any of its payment or other obligations under this Preferred Securities
Guarantee or (ii) if applicable, the failure of the Guarantor to deliver the
required securities upon an appropriate election by any Holder or Preferred
Securities to convert such Preferred Securities into such securities in
accordance with their terms.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the extent not
paid or made by the Issuer: (i) any accumulated and unpaid Distributions (as
defined in the Agreement) that are required to be paid on such Preferred
Securities, to the extent the Issuer has funds legally available therefor at
such time, (ii) the redemption price, including all accumulated and unpaid
Distributions to the date of redemption (the "Redemption Price"), to the extent
the Issuer has funds legally available therefor at such time, with respect to
any Preferred Securities called for redemption by the Issuer, and (iii) upon a
voluntary or involuntary dissolution and liquidation of the Issuer (other than
in connection with the distribution of the Debentures to holders of the
Preferred Securities or the redemption[, conversion or exchange] of the
Preferred Securities as provided in the Agreement), the lesser of (a) the
aggregate of the liquidation amount and all accumulated and unpaid Distributions
on the Preferred Securities to the date of payment, to the extent the Issuer has
funds legally available therefor at such time, and (b) the amount of assets of
the Issuer remaining available for distribution to Holders in liquidation of the
Issuer (in either case, the "Liquidation Distribution"). If an event of default
under the Agreement has occurred and is continuing, no Guarantee Payments under
the Common Securities Guarantee with respect to the Common Securities or any
guarantee payment under any Other Common Securities Guarantees shall be made
until the Holders of Preferred Securities shall be paid in full the Guarantee
Payments to which they are entitled under this Preferred Securities Guarantee.
"Holder" shall mean any holder, as registered on the books and
records of the Issuer, of any Preferred Securities; provided, however, that, in
determining whether the holders of the requisite percentage of Preferred
Securities have given any request, notice, consent or waiver hereunder, "Holder"
shall not include the Guarantor or any Affiliate of the Guarantor.
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"Indemnified Person" means the Preferred Securities Guarantee
Trustee, any Affiliate of the Preferred Securities Guarantee Trustee, or any
officers, directors, shareholders, members, partners, employees,
representatives, nominees, custodians or agents of the Preferred Securities
Guarantee Trustee.
"Indenture" means the Indenture dated as of ___________, _____,
between the Hercules Incorporated, as issuer (the "Debenture Issuer"), and The
Chase Manhattan Bank, as trustee, relating to the Junior Subordinated
Debentures, pursuant to which the Debentures are to be issued to the Property
Trustee of the Issuer.
"Majority in liquidation amount of the Preferred Securities" means,
except as provided by the Trust Indenture Act, a vote by Holder(s) of Preferred
Securities, voting separately as a class, of more than 50% of the aggregate
liquidation amount (including the amount payable on redemption, liquidation or
otherwise, plus accumulated and unpaid Distributions to the date upon which the
voting percentages are determined) of all Preferred Securities.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by the Chief Executive Officer, the President or a Vice
President, and by the Treasurer, an Assistant Treasurer, the Secretary or an
Assistant Secretary of the Guarantor. Any Officers' Certificate delivered with
respect to compliance with a condition or covenant provided for in this
Securities Guarantee shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
(b) a brief statement as to the nature and scope of the examination
or investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Other Common Securities Guarantees" shall have the same meaning as
"Other Guarantees" in the Common Securities Guarantee.
"Other Debentures" means all junior subordinated debentures issued
by the Guarantor from time to time and sold to trusts established by the
Guarantor, in each case similar to the Issuer.
"Other Guarantees" means all guarantees issued by the Guarantor with
respect to preferred securities similar to the Preferred Securities issued by
other trusts established by the Guarantor, in each case similar to the Issuer.
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"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Preferred Securities Guarantee Trustee" means The Chase Manhattan
Bank, a New York banking corporation, until a Successor Preferred Securities
Guarantee Trustee has been appointed and has accepted such appointment pursuant
to the terms of this Preferred Securities Guarantee and thereafter means each
such Successor Preferred Securities Guarantee Trustee.
"Responsible Officer" means, with respect to the Preferred
Securities Guarantee Trustee, any officer within the Corporate Trust Office of
the Preferred Securities Guarantee Trustee, including any vice-president, any
assistant vice-president, any assistant secretary, any assistant treasurer or
other officer of the Corporate Trust Office of the Preferred Securities
Guarantee Trustee customarily performing functions similar to those performed by
any of the above designated officers and also means, with respect to a
particular corporate trust matter, any other officer of the Preferred Securities
Guarantee Trustee to whom such matter is referred because of that officer's
knowledge of and familiarity with the particular subject.
"Successor Preferred Securities Guarantee Trustee" means a successor
Preferred Securities Guarantee Trustee possessing the qualifications to act as
Preferred Securities Guarantee Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
"Trust Securities" means, collectively, the Common Securities and
the Preferred Securities.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application
(a)This Preferred Securities Guarantee is subject to the provisions
of the Trust Indenture Act that are required to be part of this Preferred
Securities Guarantee and shall, to the extent applicable, be governed by such
provisions.
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(b)If and to the extent that any provision of this Preferred
Securities Guarantee limits, qualifies or conflicts with the duties imposed by
Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties
shall control.
SECTION 2.2 Lists of Holders of Securities
(a)The Guarantor shall provide the Preferred Securities Guarantee
Trustee (unless the Preferred Securities Guarantee Trustee is otherwise the
registrar of the Preferred Securities) with a list, in such form as the
Preferred Securities Guarantee Trustee may reasonably require, of the names and
addresses of the Holders of the Preferred Securities ("List of Holders"), (i)
within 14 days after each record date for payment of Distributions, as of such
record date and (ii) at any other time within 30 days of receipt by the
Guarantor of a written request for a List of Holders as of a date no more than
14 days before such List of Holders is given to the Preferred Securities
Guarantee Trustee, provided that the Guarantor shall not be obligated to provide
such List of Holders at any time the List of Holders does not differ from the
most recent List of Holders given to the Preferred Securities Guarantee Trustee
by the Guarantor. The Preferred Securities Guarantee Trustee may destroy any
List of Holders previously given to it on receipt of a new List of Holders.
(b)The Preferred Securities Guarantee Trustee shall comply with its
obligations under Sections 311(a), 311(b) and Section 312(b) of the Trust
Indenture Act.
SECTION 2.3 Reports by the Preferred Securities Guarantee Trustee
Within 60 days after September 1 of each year, commencing September
1, ____, the Preferred Securities Guarantee Trustee shall provide to the Holders
of the Preferred Securities such reports as are required by Section 313 of the
Trust Indenture Act, if any, in the form and in the manner provided by Section
313 of the Trust Indenture Act. The Preferred Securities Guarantee Trustee shall
also comply with the requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Preferred Securities Guarantee Trustee
The Guarantor shall provide to the Preferred Securities Guarantee
Trustee such documents, reports and information as required by Section 314 of
the Trust Indenture Act (if any) and the compliance certificate required by
Section 314 of the Trust Indenture Act in the form, in the manner and at the
times required by Section 314 of the Trust Indenture Act. Delivery of such
reports, information and documents to the Preferred Securities Guarantee Trustee
is for informational purposes only and the Preferred Securities Guarantee
Trustee's receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information contained
therein, including the Guarantor's compliance with any of its covenants
hereunder (as to which the Preferred Securities Guarantee Trustee is entitled to
rely exclusively on Officers' Certificates).
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SECTION 2.5 Evidence of Compliance with Conditions Precedent
The Guarantor shall provide to the Preferred Securities Guarantee
Trustee such evidence of compliance with any conditions precedent, if any,
provided for in this Preferred Securities Guarantee that relate to any of the
matters set forth in Section 314(c) of the Trust Indenture Act. Any certificate
or opinion required to be given by an officer pursuant to Section 314(c)(1) may
be given in the form of an Officers' Certificate.
SECTION 2.6 Events of Default; Waiver
The Holders of a Majority in liquidation amount of Preferred
Securities may, by vote, on behalf of the Holders of all of the Preferred
Securities, waive any past Event of Default and its consequences. Upon such
waiver, any such Event of Default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured, for every purpose of this
Preferred Securities Guarantee, but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.
SECTION 2.7 Event of Default; Notice
(a)The Preferred Securities Guarantee Trustee shall, within 90 days
after the occurrence of a default with respect to this Preferred Securities
Guarantee, mail by first class postage prepaid, to all Holders of the Preferred
Securities, notices of all defaults actually known to a Responsible Officer of
the Preferred Securities Guarantee Trustee, unless such defaults have been cured
before the giving of such notice, provided, that, except in the case of default
in the payment of any Guarantee Payment, the Preferred Securities Guarantee
Trustee shall be protected in withholding such notice if and so long as the
board of directors, the executive committee, or a trust committee of directors
and/or Responsible Officers of the Preferred Securities Guarantee Trustee in
good faith determines that the withholding of such notice is in the interests of
the Holders of the Preferred Securities.
(b)The Preferred Securities Guarantee Trustee shall not be deemed to
have knowledge of any Event of Default unless the Preferred Securities Guarantee
Trustee shall have received written notice, or a Responsible Officer of the
Preferred Securities Guarantee Trustee shall have obtained actual knowledge, of
such Event of Default.
SECTION 2.8 Conflicting Interests
The Indenture shall be deemed to be specifically described in this
Preferred Securities Guarantee for the purposes of clause (i) of the first
proviso contained in Section 310(b) of the Trust Indenture Act.
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ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED SECURITIES GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Securities Guarantee Trustee
(a)This Preferred Securities Guarantee shall be held by the
Preferred Securities Guarantee Trustee for the benefit of the Holders of the
Preferred Securities, and the Preferred Securities Guarantee Trustee shall not
transfer this Preferred Securities Guarantee to any Person except a Holder of
Preferred Securities exercising his or her rights pursuant to Section 5.4(b) or
to a Successor Preferred Securities Guarantee Trustee on acceptance by such
Successor Preferred Securities Guarantee Trustee of its appointment to act as
Successor Preferred Securities Guarantee Trustee. The right, title and interest
of the Preferred Securities Guarantee Trustee shall automatically vest in any
Successor Preferred Securities Guarantee Trustee, and such vesting and
succession of title shall be effective whether or not conveyancing documents
have been executed and delivered pursuant to the appointment of such Successor
Preferred Securities Guarantee Trustee.
(b)If an Event of Default actually known to a Responsible Officer of
the Preferred Securities Guarantee Trustee has occurred and is continuing, the
Preferred Securities Guarantee Trustee shall enforce this Preferred Securities
Guarantee for the benefit of the Holders of the Preferred Securities. In such
event, any moneys collected shall first be paid to the Preferred Securities
Guarantee Trustee for amounts due under Section 8.3 and then to the Holders of
the Preferred Securities.
(c)The Preferred Securities Guarantee Trustee, before the occurrence
of any Event of Default and after the curing of all Events of Default that may
have occurred, shall undertake to perform only such duties as are specifically
set forth in this Preferred Securities Guarantee, and no implied covenants shall
be read into this Preferred Securities Guarantee against the Preferred
Securities Guarantee Trustee. In case an Event of Default has occurred (that has
not been cured or waived pursuant to Section 2.6) and is actually known to a
Responsible Officer of the Preferred Securities Guarantee Trustee, the Preferred
Securities Guarantee Trustee shall exercise such of the rights and powers vested
in it by this Preferred Securities Guarantee, and use the same degree of care
and skill in its exercise thereof, as a prudent person would exercise or use
under the circumstances in the conduct of his or her own affairs.
(d)No provision of this Preferred Securities Guarantee shall be
construed to relieve the Preferred Securities Guarantee Trustee from liability
for its own negligent action, its own negligent failure to act, or its own
willful misconduct, except that:
(i) prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Preferred Securities
Guarantee Trustee shall be determined solely by the express
provisions of this Preferred
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Securities Guarantee, and the Preferred Securities Guarantee Trustee
shall not be liable except for the performance of such duties and
obligations as are specifically set forth in this Preferred
Securities Guarantee, and no implied covenants or obligations shall
be read into this Preferred Securities Guarantee against the
Preferred Securities Guarantee Trustee; and
(B) in the absence of bad faith on the part of the Preferred
Securities Guarantee Trustee, the Preferred Securities Guarantee
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Preferred Securities
Guarantee Trustee and conforming to the requirements of this
Preferred Securities Guarantee; but in the case of any such
certificates or opinions that by any provision hereof are
specifically required to be furnished to the Preferred Securities
Guarantee Trustee, the Preferred Securities Guarantee Trustee shall
be under a duty to examine the same to determine whether or not they
conform to the requirements of this Preferred Securities Guarantee
(but shall not be required to confirm or investigate the accuracy of
mathematical calculations or other facts stated therein);
(ii) the Preferred Securities Guarantee Trustee shall not be liable
for any error of judgment made in good faith by a Responsible Officer of
the Preferred Securities Guarantee Trustee, unless it shall be proved that
the Preferred Securities Guarantee Trustee was negligent in ascertaining
the pertinent facts upon which such judgment was made;
(iii) the Preferred Securities Guarantee Trustee shall not be liable
with respect to any action taken or omitted to be taken by it in good
faith in accordance with the direction of the Holders of a Majority in
liquidation amount of the Preferred Securities relating to the time,
method and place of conducting any proceeding for any remedy available to
the Preferred Securities Guarantee Trustee, or exercising any trust or
power conferred upon the Preferred Securities Guarantee Trustee under this
Preferred Securities Guarantee; and
(iv) no provision of this Preferred Securities Guarantee shall
require the Preferred Securities Guarantee Trustee to expend or risk its
own funds or otherwise incur personal financial liability in the
performance of any of its duties or in the exercise of any of its rights
or powers, if the Preferred Securities Guarantee Trustee shall have
reasonable grounds for believing that the repayment of such funds or
liability is not reasonably assured to it under the terms of this
Preferred Securities Guarantee or indemnity, reasonably satisfactory to
the Preferred Securities Guarantee Trustee, against such risk or liability
is not reasonably assured to it.
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SECTION 3.2 Certain Rights of Preferred Securities Guarantee Trustee
(a)Subject to the provisions of Section 3.1:
(i) the Preferred Securities Guarantee Trustee may conclusively
rely, and shall be fully protected in acting or refraining from acting,
upon any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document believed by it to be
genuine and to have been signed, sent or presented by the proper party or
parties;
(ii) any direction or act of the Guarantor contemplated by this
Preferred Securities Guarantee may be sufficiently evidenced by an
Officers' Certificate;
(iii) whenever, in the administration of this Preferred Securities
Guarantee, the Preferred Securities Guarantee Trustee shall deem it
desirable that a matter be proved or established before taking, suffering
or omitting any action hereunder, the Preferred Securities Guarantee
Trustee (unless other evidence is herein specifically prescribed) may, in
the absence of bad faith on its part, request and conclusively rely upon
an Officers' Certificate which, upon receipt of such request, shall be
promptly delivered by the Guarantor;
(iv) the Preferred Securities Guarantee Trustee may consult with
counsel of its selection, and the advice or opinion of such counsel with
respect to legal matters shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in accordance with such advice or opinion.
Such counsel may be counsel to the Guarantor or any of its Affiliates and
may include any of its employees. The Preferred Securities Guarantee
Trustee shall have the right at any time to seek instructions concerning
the administration of this Preferred Securities Guarantee from any court
of competent jurisdiction;
(v) the Preferred Securities Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by this
Preferred Securities Guarantee at the request or direction of any Holder,
unless such Holder shall have provided to the Preferred Securities
Guarantee Trustee such security and indemnity, reasonably satisfactory to
the Preferred Securities Guarantee Trustee, against the costs, expenses
(including attorneys' fees and expenses and the expenses of the Preferred
Securities Guarantee Trustee's agents, nominees or custodians) and
liabilities that might be incurred by it in complying with such request or
direction, including such reasonable advances as may be requested by the
Preferred Securities Guarantee Trustee; provided that, nothing contained
in this Section 3.2(a)(v) shall be taken to relieve the Preferred
Securities Guarantee Trustee, upon the occurrence of an Event of Default,
of its obligation to exercise the rights and powers vested in it by the
terms of this Preferred Securities Guarantee;
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(vi) the Preferred Securities Guarantee Trustee shall not be bound
to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence
of indebtedness or other paper or document, but the Preferred Securities
Guarantee Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit;
(vii) the Preferred Securities Guarantee Trustee may execute any of
the trusts or powers hereunder or perform any duties hereunder either
directly or by or through agents, nominees, custodians or attorneys, and
the Preferred Securities Guarantee Trustee shall not be responsible for
any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder;
(viii) any action taken by the Preferred Securities Guarantee
Trustee or its agents hereunder shall bind the Holders of the Preferred
Securities, and the signature of the Preferred Securities Guarantee
Trustee or its agents alone shall be sufficient and effective to perform
any such action. No third party shall be required to inquire as to the
authority of the Preferred Securities Guarantee Trustee to so act or as to
its compliance with any of the terms and provisions of this Preferred
Securities Guarantee, both of which shall be conclusively evidenced by the
Preferred Securities Guarantee Trustee's or its agent's taking such
action;
(ix) whenever in the administration of this Preferred Securities
Guarantee the Preferred Securities Guarantee Trustee shall deem it
desirable to receive instructions with respect to enforcing any remedy or
right or taking any other action hereunder, the Preferred Securities
Guarantee Trustee (A) may request instructions from the Holders of a
Majority in liquidation amount of the Preferred Securities, (B) may
refrain from enforcing such remedy or right or taking such other action
until such instructions are received, and (C) shall be protected in
conclusively relying on or acting in accordance with such instructions;
and
(x) the Preferred Securities Guarantee Trustee shall not be liable
for any action taken, suffered, or omitted to be taken by it in good
faith, without negligence, and reasonably believed by it to be authorized
or within the discretion or rights or powers conferred upon it by this
Preferred Securities Guarantee.
(b)No provision of this Preferred Securities Guarantee shall be
deemed to impose any duty or obligation on the Preferred Securities Guarantee
Trustee to perform any act or acts or exercise any right, power, duty or
obligation conferred or imposed on it in any jurisdiction in which it shall be
illegal, or in which the Preferred Securities Guarantee Trustee shall be
unqualified or incompetent in accordance with applicable law, to perform any
such act or acts or to exercise any such right, power, duty or obligation. No
permissive power or authority available to the Preferred Securities Guarantee
Trustee shall be construed to be a duty.
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SECTION 3.3 Not Responsible for Recitals or Issuance of Preferred Securities
Guarantee
The recitals contained in this Preferred Securities Guarantee shall
be taken as the statements of the Guarantor, and the Preferred Securities
Guarantee Trustee does not assume any responsibility for their correctness. The
Preferred Securities Guarantee Trustee makes no representation as to the
validity or sufficiency of this Preferred Securities Guarantee.
ARTICLE IV
PREFERRED SECURITIES GUARANTEE TRUSTEE
SECTION 4.1 Preferred Securities Guarantee Trustee; Eligibility
(a)There shall at all times be a Preferred Securities Guarantee
Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Securities and Exchange Commission to act as an institutional trustee
under the Trust Indenture Act, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
50 million U.S. dollars ($50,000,000), and subject to supervision or
examination by Federal, State, Territorial or District of Columbia
authority. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the supervising or
examining authority referred to above, then, for the purposes of this
Section 4.1(a)(ii), the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its
most recent report of condition so published.
(b)If at any time the Preferred Securities Guarantee Trustee shall
cease to be eligible to so act under Section 4.1(a), the Preferred Securities
Guarantee Trustee shall immediately resign in the manner and with the effect set
out in Section 4.2(c).
(c)If the Preferred Securities Guarantee Trustee has or shall
acquire any "conflicting interest" within the meaning of Section 310(b) of the
Trust Indenture Act, the Preferred Securities Guarantee Trustee and Guarantor
shall in all respects comply with the provisions of Section 310(b) of the Trust
Indenture Act.
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SECTION 4.2 Appointment, Removal and Resignation of Preferred Securities
Guarantee Trustee
(a)Subject to Section 4.2(b), the Preferred Securities Guarantee
Trustee may be appointed or removed without cause at any time by the Guarantor
except during the occurrence and continuance of an Event of Default.
(b)The Preferred Securities Guarantee Trustee shall not be removed
in accordance with Section 4.2(a) until a Successor Preferred Securities
Guarantee Trustee has been appointed and has accepted such appointment by
written instrument executed by such Successor Preferred Securities Guarantee
Trustee and delivered to the Guarantor.
(c)The Preferred Securities Guarantee Trustee shall hold office
until a Successor Preferred Securities Guarantee Trustee shall have been
appointed or until its removal or resignation. The Preferred Securities
Guarantee Trustee may resign from office (without need for prior or subsequent
accounting) by an instrument in writing executed by the Preferred Securities
Guarantee Trustee and delivered to the Guarantor, which resignation shall not
take effect until a Successor Preferred Securities Guarantee Trustee has been
appointed and has accepted such appointment by instrument in writing executed by
such Successor Preferred Securities Guarantee Trustee and delivered to the
Guarantor and the resigning Preferred Securities Guarantee Trustee.
(d)If no Successor Preferred Securities Guarantee Trustee shall have
been appointed and accepted appointment as provided in this Section 4.2 within
60 days after delivery of an instrument of removal or resignation, the Preferred
Securities Guarantee Trustee resigning or being removed may petition any court
of competent jurisdiction for appointment of a Successor Preferred Securities
Guarantee Trustee. Such court may thereupon, after prescribing such notice, if
any, as it may deem proper, appoint a Successor Preferred Securities Guarantee
Trustee.
(e)No Preferred Securities Guarantee Trustee shall be liable for the
acts or omissions to act of any Successor Preferred Securities Guarantee
Trustee.
(f)Upon termination of this Preferred Securities Guarantee or
removal or resignation of the Preferred Securities Guarantee Trustee pursuant to
this Section 4.2, the Guarantor shall pay to the Preferred Securities Guarantee
Trustee all amounts due to the Preferred Securities Guarantee Trustee accrued to
the date of such termination, removal or resignation.
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ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee
The Guarantor irrevocably and unconditionally agrees to pay in full
to the Holders the Guarantee Payments (without duplication of amounts
theretofore paid by the Issuer), as and when due, regardless of any defense,
right of set-off or counterclaim that the Issuer may have or assert. The
Guarantor's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holders or by causing
the Issuer to pay such amounts to the Holders. The Guarantor will honor all
obligations, if any, relating to the conversion of the Preferred Securities into
securities of the Guarantor as set forth in the Agreement and the Indenture.
SECTION 5.2 Waiver of Notice and Demand
The Guarantor hereby waives notice of acceptance of this Preferred
Securities Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first against
the Issuer or any other Person before proceeding against the Guarantor, protest,
notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.
SECTION 5.3 Obligations Not Affected
The obligations, covenants, agreements and duties of the Guarantor
under this Preferred Securities Guarantee shall in no way be affected or
impaired by reason of the happening from time to time of any of the following:
(a)the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the Preferred Securities to be performed
or observed by the Issuer;
(b)the extension of time for the payment by the Issuer of all or any
portion of the Distributions, Redemption Price, Liquidation Distribution or any
other sums payable under the terms of the Preferred Securities or the extension
of time for the performance of any other obligation under, arising out of, or in
connection with, the Preferred Securities (other than an extension of time for
payment of Distributions, Redemption Price, Liquidation Distribution or other
sum payable that results from the extension of any interest payment period on
the Debentures permitted by the Indenture);
(c)any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders
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pursuant to the terms of the Preferred Securities, or any action on the part of
the Issuer granting indulgence or extension of any kind;
(d)the voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for the benefit
of creditors, reorganization, arrangement, composition or readjustment of debt
of, or other similar proceedings affecting, the Issuer or any of the assets of
the Issuer;
(e)any invalidity of, or defect or deficiency in, the Preferred
Securities;
(f)the settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or
(g)any other circumstance whatsoever that might otherwise constitute
a legal or equitable discharge or defense of a guarantor;
it being the intent of this Section 5.3 that the obligations of the Guarantor
with respect to the Guarantee Payments shall be absolute and unconditional under
any and all circumstances.
There shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
Section 5.4 Rights of Holders
(a)The Holders of a Majority in liquidation amount of the Preferred
Securities have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Preferred Securities Guarantee
Trustee in respect of this Preferred Securities Guarantee or exercising any
trust or power conferred upon the Preferred Securities Guarantee Trustee under
this Preferred Securities Guarantee.
(b)If the Preferred Securities Guarantee Trustee fails to enforce
this Preferred Securities Guarantee, any Holder of Preferred Securities may
institute a legal proceeding directly against the Guarantor to enforce the
rights of such Holder under this Preferred Securities Guarantee, without first
instituting a legal proceeding against the Issuer, the Preferred Securities
Guarantee Trustee or any other person or entity. The Guarantor waives any right
or remedy to require that any action be brought first against the Issuer or any
other person or entity before proceeding directly against the Guarantor.
If the Guarantor has failed to make a required Guarantee Payment, a
Holder of Preferred Securities may directly institute a proceeding against the
Guarantor for enforcement of this Preferred Securities Guarantee for such
Guarantee Payment.
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SECTION 5.5 Guarantee of Payment
This Preferred Securities Guarantee creates a guarantee of payment
and not of collection.
SECTION 5.6 Subrogation
The Guarantor shall be subrogated to all (if any) rights of the
Holders of Preferred Securities against the Issuer in respect of any amounts
paid to such Holders by the Guarantor under this Preferred Securities Guarantee;
provided, however, that the Guarantor shall not (except to the extent required
by mandatory provisions of law) be entitled to enforce or exercise any right
that it may acquire by way of subrogation or any indemnity, reimbursement or
other agreement, in all cases as a result of payment under this Preferred
Securities Guarantee, if, at the time of any such payment, any amounts are due
and unpaid under this Preferred Securities Guarantee. If any amount shall be
paid to the Guarantor in violation of the preceding sentence, the Guarantor
agrees to hold such amount in trust for the Holders and to pay over such amount
to the Holders.
SECTION 5.7 Independent Obligations
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Preferred
Securities, and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Preferred
Securities Guarantee notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions
So long as any Preferred Securities remain outstanding, the
Guarantor shall not (i) declare or pay any dividends or distributions on, or
redeem, purchase, acquire, or make a liquidation payment with respect to, any of
the Guarantor's capital stock (which includes common and preferred stock) or
(ii) make any payment of principal, interest or premium, if any, on or repay or
repurchase or redeem any debt securities of the Guarantor (including any Other
Debentures) that rank pari passu with or junior in right of payment to the
Debentures or (iii) make any guarantee payments with respect to any guarantee by
the Guarantor of the debt securities of any subsidiary of the Guarantor
(including Other Guarantees) if such guarantee ranks pari passu or junior in
right of payment to the Debentures (other than (a) dividends or distributions in
shares of, or options, warrants or rights to subscribe for or purchase shares
of, common stock of the Guarantor, (b) any declaration of a dividend in
connection with the implementation of a stockholders' rights plan, or the
issuance of stock under any such plan in the
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future, or the redemption or repurchase of any such rights pursuant thereto, (c)
payments under the Preferred Securities Guarantee, (d) as a result of a
reclassification of the Guarantor's capital stock or the exchange or the
conversion of one class or series of the Guarantor's capital stock for another
class or series of the Guarantor's capital stock, (e) the purchase of fractional
interests in shares of the Guarantor's capital stock pursuant to the conversion
or exchange provisions of such capital stock or the security being converted or
exchanged, and (f) purchases of common stock related to the issuance of common
stock or rights under any of the Guarantor's benefit plans for its directors,
officers or employees or any of the Guarantor's dividend reinvestment plans) if
at such time (i) there shall have occurred any event of which the Guarantor has
actual knowledge that is, or with the giving of notice or the lapse of time, or
both, would be an Event of Default, (ii) the Guarantor shall be in default with
respect to its payment obligations under this Preferred Securities Guarantee or
(iii) the Guarantor shall have given notice of its election of the exercise of
its right to extend the interest payment period pursuant to Section 4.01(b) of
the Indenture and shall not have rescinded such notice, and any such extension
shall have commenced and be continuing.
SECTION 6.2 Ranking
This Preferred Securities Guarantee will constitute an unsecured
obligation of the Guarantor and will rank (i) subordinate and junior in right of
payment to all other liabilities of the Guarantor except any liabilities
(including the Other Guarantees, the Common Securities Guarantee and the Other
Common Securities Guarantees) that may be pari passu or junior expressly by
their terms, and (ii) senior to the Guarantor's capital stock now or hereafter
issued by the Guarantor, if any, and with any guarantee now or hereafter entered
into by the Guarantor in respect of any preferred or preference stock of any
Affiliate of the Guarantor. The foregoing subordination shall not apply to
amounts payable under Article VIII.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination
This Preferred Securities Guarantee shall terminate upon (i)
[conversion of the Preferred Securities into securities of an entity other than
the Issuer, (ii)] full payment of the Redemption Price of all Preferred
Securities, or (ii) [iii] liquidation of the Issuer, the full payment of the
amounts payable in accordance with the Agreement or the distribution of the
Debentures to the Holders of all of the Preferred Securities. Notwithstanding
the foregoing, this Preferred Securities Guarantee will continue to be effective
or will be reinstated, as the case may be, if at any time any Holder of
Preferred Securities must restore payment of any sums paid under the Preferred
Securities or under this Preferred Securities Guarantee.
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ARTICLE VIII
EXCULPATION, INDEMNIFICATION AND COMPENSATION
SECTION 8.1 Exculpation
(a)No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Guarantor or any Covered Person for any loss,
damage, liability, expense or claim incurred by reason of any act or omission
performed or omitted by such Indemnified Person in good faith in accordance with
this Preferred Securities Guarantee and in a manner that such Indemnified Person
reasonably believed to be within the scope of the authority conferred on such
Indemnified Person by this Preferred Securities Guarantee or by law, except that
this provision shall not be deemed to modify Section 3.1(d).
(b)An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Guarantor and upon such information, opinions,
reports or statements presented to the Guarantor by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Guarantor, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders of Preferred Securities might properly be paid.
SECTION 8.2 Indemnification
The Guarantor agrees to indemnify each Indemnified Person for, and
to hold each Indemnified Person harmless against, any and all loss, liability,
damage, claim or expense incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration of the
trust or trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against, or
investigating, any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder. The obligation to
indemnify as set forth in this Section 8.2 shall survive the termination of this
Preferred Securities Guarantee or the resignation or removal of the Preferred
Securities Guarantee Trustee.
The Preferred Securities Guarantee Trustee will not claim or exact
any lien or charge on any Guarantee Payments as a result of any amount due to it
under this Preferred Securities Guarantee.
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SECTION 8.3 Compensation
The Guarantor agrees:
(a)to pay to the Preferred Securities Guarantee Trustee from time to
time such compensation as shall be agreed in writing between the Company and the
Preferred Securities Guarantee Trustee for all services rendered by it hereunder
(which compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust); and
(b)to reimburse the Preferred Securities Guarantee Trustee upon its
request for reasonable expenses, disbursements and advances incurred or made by
the Preferred Securities Guarantee Trustee in accordance with any provision of
this Preferred Securities Guarantee (including the reasonable compensation and
the expenses and advances of its agents and counsel), except any such expense or
advance as may be attributable to its negligence or bad faith.
Subject to Section 8.2, the Preferred Securities Guarantee Trustee
shall have a claim and lien prior to the Holders as to all property and funds
held by it hereunder for any amount owing to it or any predecessor Preferred
Securities Guarantee Trustee for fees and expenses pursuant to this Article.
ARTICLE VIII
MISCELLANEOUS
SECTION 9.1 Successors and Assigns
All guarantees and agreements contained in this Preferred Securities
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Preferred Securities then outstanding.
Except in connection with any merger or consolidation of the
Guarantor with or into another entity permitted by the Indenture or any sale,
transfer or lease of the Guarantor's assets to another entity permitted by the
Indenture, the Guarantor may not assign its rights or delegate its obligations
under this Preferred Securities Guarantee.
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SECTION 9.2 Amendments
Except with respect to any changes that do not materially adversely
affect the rights of Holders (in which case no approval of Holders will be
required), this Preferred Securities Guarantee may only be amended with the
prior approval of the Holders of a Majority in liquidation amount of the
outstanding Preferred Securities (including the amount payable on redemption,
liquidation or otherwise, plus accumulated and unpaid Distributions to the date
upon which the voting percentages are determined). The provisions of Section
12.2 of the Agreement with respect to meetings of Holders of the Securities
apply to the giving of such approval.
SECTION 9.3 Notices
All notices provided for in this Preferred Securities Guarantee
shall be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by first class mail, as follows:
(a)If given to the Issuer, in care of the Administrative Trustee at
the Issuer's mailing address set forth below (or such other address as the
Issuer may give notice of to the Holders of the Common Securities):
Hercules Trust IV
c/o Hercules Incorporated
Hercules Plaza
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxx,
Administrative Trustee
Telecopy: (000) 000-0000
(b)If given to the Preferred Securities Guarantee Trustee, at the
Preferred Securities Guarantee Trustee's mailing address set forth below (or
such other address as the Preferred Securities Guarantee Trustee may give notice
of to the Holders of the Preferred Securities):
The Chase Manhattan Bank
One Xxxxxxx Xxxxx, 00xx Xxxxx
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Corporate Trust Department
Telecopy: (000) 000-0000
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(c)If given to the Guarantor, at the Guarantor's mailing address set
forth below (or such other address as the Guarantor may give notice of to the
Holders of the Preferred Securities):
Hercules Incorporated
Hercules Plaza
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Vice President and Treasurer, and Corporate
Secretary
Telecopy: (000) 000-0000
(d)If given to any Holder of Preferred Securities, at the address
set forth on the books and records of the Issuer.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 9.4 Benefit
This Preferred Securities Guarantee is solely for the benefit of the
Holders of the Preferred Securities and, subject to Section 3.1(a), is not
separately transferable from the Preferred Securities.
SECTION 9.5 Governing Law
THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE,
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF EXCEPT THAT THE RIGHTS,
LIMITATIONS OF RIGHTS, OBLIGATIONS, DUTIES AND IMMUNITIES OF THE PREFERRED
SECURITIES GUARANTEE TRUSTEE SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK.
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THIS PREFERRED SECURITIES GUARANTEE is executed as of the day and
year first above written.
HERCULES INCORPORATED,
as Guarantor
By:_____________________________________
Name:
Title:
The Chase Manhattan Bank, as Preferred
Securities Guarantee Trustee
By:_____________________________________
Name:
Title:
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