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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: (Date of earliest event reported):
October 26, 1999 (October 26, 1999)
VERITAS DGC INC.
(Exact name of Registrant as specified in its charter)
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<S> <C> <C>
DELAWARE 1-7427 76-0343152
(STATE OF INCORPORATION) (COMMISSION FILE NUMBER) (IRS EMPLOYER IDENTIFICATION NO.)
</TABLE>
3701 KIRBY DRIVE, SUITE 112
HOUSTON, TEXAS 77098
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(713) 512-8300
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
(NOT APPLICABLE)
(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
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ITEM 5. OTHER EVENTS
The Registrant filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (File No. 333-86247) on
August 31, 1999 (the "Registration Statement"), and a post-effective amendment
no. 1 to the Registration Statement on September 24, 1999, pursuant to which
the Registrant registered $200,000,000 aggregate principal amount of common
stock, preferred stock and debt securities for offer and sale in accordance
with Rule 415 and other applicable rules and provisions of the Securities Act
of 1933, as amended.
The Registrant proposes to publicly offer up to 2,000,000 shares (the
"Shares") of its common stock, from time to time, covered by the Registration
Statement. The form of the sales agency agreement to be used in connection with
this offering is filed herewith as Exhibit 1.1.
The sole purpose of this Form 8-K is to file the exhibits identified
in Item 7(c) below as part of the Registrant's Registration Statement.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits.
Exhibit No. Description
1.1 Sales Agency Agreement between Veritas DGC Inc. and
PaineWebber Incorporated, dated October 26, 1999.
5.1 Opinion of Porter & Hedges, L.L.P. with respect to the
legality of the Shares.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
VERITAS DGC INC.
Date: October 26, 1999 /s/ Anthony Tripodo
------------------------------------
Anthony Tripodo
Executive Vice President, Chief
Financial Officer and Treasurer
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INDEX TO EXHIBITS
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Exhibit No. Description
- ----------- -----------
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1.1 Sales Agency Agreement between Veritas DGC Inc. and
PaineWebber Incorporated, dated October 26, 1999.
5.1 Opinion of Porter & Hedges, L.L.P. with respect to the
legality of the Shares.
</TABLE>
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DRAFT
OCTOBER 25, 1999
VERITAS DGC INC.
2,000,000 SHARES OF COMMON STOCK
(PAR VALUE $0.01 PER SHARE)
SALES AGENCY AGREEMENT
October 26, 1999
PAINEWEBBER INCORPORATED
1285 Avenue of the Americas
New York, New York 10019
Ladies and Gentlemen:
Veritas DGC Inc., a Delaware corporation (the "Company"), confirms its
agreement with PaineWebber Incorporated (the "Agent"), as follows:
SECTION 1. Description of Securities. The Company proposes to issue
and sell through the Agent, as sales agent, up to 2,000,000 shares (the
"Shares") of its Common Stock, par value $0.01 per share ("Common Stock"), on
the terms set forth in Section 3 hereof.
SECTION 2. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the Agent that:
(a) The Company meets the requirements for use of Form S-3 under the
Securities Act of 1933 (the "Act") and the rules and regulations thereunder
("Rules and Regulations"). A registration statement on Form S-3 (Registration
No. 333-86247) with respect to the Shares, including a form of prospectus with
respect to the Shares, has been prepared by the Company in conformity with the
requirements of the Act and the Rules and Regulations, has been filed with the
Securities and Exchange Commission (the "Commission") and has become effective.
Such registration statement and prospectus may have been amended or
supplemented prior to the date of this Agreement. Any such amendment or
supplement was so prepared and filed, and any such amendment or supplement
filed after the effective date of such registration statement has become
effective. No stop order suspending the effectiveness of the registration
statement has been issued, and no proceeding for that purpose has been
instituted or threatened by the Commission. Copies of such registration
statement and prospectus, any such amendment or supplement and all documents
incorporated by reference therein that were filed with the Commission on or
prior to the date of this Agreement have been delivered to the Agent. Such
registration statement, as it may have heretofore been amended, is referred to
herein as the "Registration Statement," and the
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final form of prospectus with respect to the Shares included in the
Registration Statement, as amended or supplemented from time to time, is
referred to herein as the "Prospectus." Any reference herein to the
Registration Statement, the Prospectus, or any amendment or supplement thereto
shall be deemed to refer to and include the documents incorporated (or deemed
to be incorporated) by reference therein, and any reference herein to the terms
"amend," "amendment" or "supplement" with respect to the Registration Statement
or Prospectus shall be deemed to refer to and include the filing after the
execution hereof of any document with the Commission deemed to be incorporated
by reference therein.
(b) Each part of the Registration Statement, when such part became or
becomes effective, and the Prospectus and any amendment or supplement thereto,
on the date of filing thereof with the Commission and at each Closing Date (as
hereinafter defined), conformed or will conform in all material respects with
the requirements of the Act and the Rules and Regulations; each part of the
Registration Statement, when such part became or becomes effective, did not or
will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading; and the Prospectus and any amendment or supplement
thereto, on the date of filing thereof with the Commission and at each Closing
Date, did not or will not include an untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading; except
that the foregoing shall not apply to statements in or omissions from any such
document in reliance upon, and in conformity with, written information relating
to the Agent furnished to the Company by the Agent specifically for use in the
Registration Statement, the Prospectus or any amendment or supplement thereto.
(c) The documents incorporated by reference in the Registration
Statement or the Prospectus, or any amendment or supplement thereto, when they
became effective under the Act or were filed with the Commission under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), as the case
may be, conformed in all material respects with the requirements of the Act or
the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder, and none of such documents contained an untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; and any
further documents so filed and incorporated by reference in the Prospectus or
any further amendment or supplement thereto, when such documents become
effective or are filed with the Commission, as the case may be, will conform in
all material respects to the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission thereunder and will
not contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading.
(d) The consolidated financial statements of the Company and its
subsidiaries, together with the related notes set forth or incorporated by
reference in the Registration Statement and Prospectus, present fairly the
consolidated financial condition and the results of operations and cash flows
of the Company and its subsidiaries as of the dates indicated or for the
periods therein specified and were prepared in conformity with generally
accepted accounting principles consistently applied throughout the periods
involved (except as otherwise stated
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therein, or in the case of unaudited consolidated financial statements, as
permitted by Form 10-Q under the Exchange Act and the rules and regulations
thereunder).
(e) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the state of its incorporation
with full power and authority (corporate and other) to own, lease and operate
its properties and to conduct its business as described in the Registration
Statement and Prospectus; and the Company is duly qualified as a foreign
corporation to transact business and is in good standing in each jurisdiction
in which such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure,
individually or in the aggregate, to be so qualified and be in good standing
would not have a material adverse effect on the condition, financial or
otherwise, or the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise.
(f) Each "significant subsidiary" of the Company (as such term is
defined in Rule 1-02 of Regulation S-X under the Act) (the "Significant
Subsidiaries"), if any, has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own, lease and operate its
properties and conduct its business as described in the Registration Statement
and Prospectus and is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure to be so
qualified would not have a material adverse effect on the condition, financial
or otherwise, or the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise. The Significant
Subsidiaries (as defined in Section 1-02 of Regulation S-X) of the Company are
Digicon Geophysical Corp., Veritas DGC Land Inc., Euroseis, Inc., Veritas DGC
Australia (Pty) Ltd. and Veritas DGC Ltd.
(g) Each of the Company and its subsidiaries has (i) good and
marketable title to all of the properties and assets described in the
Prospectus as owned by it, free and clear of all liens, charges, encumbrances
or restrictions, except such as are described in the Prospectus or are not
material to the business, condition, financial or otherwise, or the earnings,
business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise, and (ii) peaceful and undisturbed possession
under all material leases to which it is party as lessee. All material leases
to which the Company or any of its subsidiaries is a party are valid and
binding and no default has occurred and is continuing thereunder, and, to the
best knowledge of the Company, no material defaults by the landlord are
existing under any such leases.
(h) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company have
been duly and validly authorized and issued and are fully paid and
non-assessable; and all of the issued shares of capital stock of each
Significant Subsidiary, if any, of the Company have been duly and validly
authorized and issued and are fully paid and non-assessable and (except for
directors' qualifying shares and as otherwise set forth in the Prospectus) are
owned directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims.
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(i) The Shares have been duly authorized and, when the Shares are
issued, delivered and paid for pursuant to this Agreement, the Shares will be
duly and validly issued and fully paid and non-assessable; the capital stock of
the Company, including the Shares, conforms in all material respects to the
description thereof contained in the Registration Statement and the Shares will
conform in all material respects to the description thereof contained in the
Prospectus as amended or supplemented with respect to the Shares. The
certificates for the Shares are in due and proper form and the holders of the
Shares will not be subject to personal liability by reason of being such
holders. The stockholders of the Company have no preemptive rights, rights of
first refusal with respect to the Shares or other rights to purchase any of the
Shares, and no person has the right, contractual or otherwise, to cause the
Company to issue to it, or register pursuant to the Act, any shares of capital
stock of the Company upon the issue of the Shares.
(j) Neither the Company nor any of its subsidiaries has sustained
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any material loss or interference
with the business of the Company and its subsidiaries, considered as one
enterprise, from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated in the
Prospectus; and except as contemplated in the Prospectus and for the Company's
offering of up to $115 million of convertible subordinated notes (the "Notes"),
subsequent to the respective dates as of which information is given in the
Registration Statement and the Prospectus, neither the Company nor any of its
subsidiaries has incurred any liabilities or obligations, direct or contingent,
or entered into any transactions, not in the ordinary course of business, that
are material to the Company and its subsidiaries considered as a whole, and
there has not been any material change, on a consolidated basis, in the capital
stock of the Company and its subsidiaries, any material increase in the
short-term debt or long-term debt of the Company and its subsidiaries, on a
consolidated basis, or any material adverse change, or any development
involving a prospective material adverse change, in the condition, financial or
otherwise, or the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise.
(k) Except as set forth in the Prospectus, there is not pending nor,
to the knowledge of the Company, threatened any action, suit or proceeding to
which the Company or any of its subsidiaries is a party, before or by any court
or governmental agency or body, that could reasonably be expected to result in
any material adverse change in the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, or that could reasonably be expected
to materially and adversely affect the properties or assets thereof considered
as a whole.
(l) There are no legal or governmental proceedings, contracts or
documents of the Company or any of its subsidiaries that are required to be
described in or filed as exhibits to the Registration Statement or any of the
documents incorporated by reference therein by the Act or the Exchange Act or
by the rules and regulations of the Commission thereunder that have not been so
described or filed as required.
(m) All necessary action has been duly and validly taken by the
Company to authorize the execution, delivery and performance of this Agreement.
This Agreement has been duly and validly authorized, executed and delivered by
the Company and constitutes the legal, valid and
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binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as the enforceability thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (whether applied in a proceeding in law or equity).
(n) Neither the Company nor any of its subsidiaries is in breach of,
or in default under (nor has any event occurred which with notice, lapse of
time, or both would constitute a breach of, or default under), its respective
charter or by-laws or in the performance or observance of any of the terms and
provisions of any material obligation, agreement, covenant or condition
contained in any indenture, mortgage, deed of trust, loan or credit agreement
or other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which any of them is bound.
(o) The issue and sale of the Shares and the compliance by the Company
with all of the provisions of this Agreement and the consummation of the
transactions contemplated herein will not result in a breach or violation of
any of the terms and provisions of, or constitute a default under, any
obligation, agreement, covenant or condition contained in any indenture,
mortgage, deed of trust, loan or credit agreement or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which any of them is bound or to which any of the property of the Company or
any of its subsidiaries is subject except for such breaches or defaults that
would not in the aggregate have a material adverse effect on the Company's
ability to perform its obligations under this Agreement or on the condition,
financial or otherwise, or the earnings, business affairs or business prospects
of the Company and its subsidiaries considered as one enterprise, nor will such
action result in the violation of the Company's charter or by-laws, or any
statute or any order, rule or regulation of any court or governmental agency or
body having jurisdiction over the Company or any of its subsidiaries or any of
its properties; no consent, approval, authorization or order of, or filing
with, any court or governmental agency or body is required for the issue and
sale of the Shares and the consummation by the Company of the transactions
contemplated by this Agreement, except registration of the Shares under the Act
and except such as may be required by state securities or blue sky laws.
(p) The Company and its subsidiaries have not violated and are in
compliance with all laws, statutes, ordinances, regulations, rules and orders
of any foreign, federal, state or local government and any other governmental
department or agency, and any judgment, decision, decree or order of any court
or governmental agency, department or authority, except for such violations or
noncompliance which, individually or in the aggregate, would not have a
material adverse effect on the condition, financial or otherwise, or on the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise.
(q) The Company and its subsidiaries possess such licenses, permits,
consents, orders, certificates or authorizations issued by the appropriate
federal, state, foreign or local regulatory agencies or bodies necessary to
conduct their business as described in the Prospectus except for licenses,
permits, consents, orders, certificates, authorizations, approvals, franchises
or rights, the absence of which, individually or in the aggregate, would not
have a material adverse effect on the condition, financial or otherwise, or on
the earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise; the Company and its subsidiaries
have not received any notice of proceedings relating to the revocation or
modification of any
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such licenses, permits, consents, orders, certificates, authorizations,
approvals, franchises or rights which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would have a material
adverse effect on the condition, financial or otherwise, or on the earnings,
business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise.
(r) Other than as set forth in the Prospectus, to the best of the
Company's knowledge, the Company carries, or is covered by, insurance in such
amounts and covering such risks as is customary for companies engaged in
similar businesses in similar industries.
(s) Other than as set forth in the Prospectus, the Company and each of
its subsidiaries have obtained all material environmental permits, licenses and
other authorizations required by federal, state, foreign and local law in order
to conduct their businesses as described in the Prospectus; the Company and
each of its subsidiaries are conducting their businesses in substantial
compliance with such permits, licenses and authorizations and with applicable
environmental laws, except where the failure to be in compliance would not have
a material adverse effect on results of operations or condition (financial or
otherwise), present or prospective, of the Company and its subsidiaries taken
as a whole; and, except as described in the Prospectus, the Company is not in
violation of any federal, state, foreign or local law or regulation relating to
the storage, handling, disposal, release or transportation of hazardous or
toxic materials except for such violations or noncompliance which, individually
or in the aggregate, would not have a material adverse effect on the condition,
financial or otherwise, or on the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise.
(t) PricewaterhouseCoopers LLP, which has audited the financial
statements of the Company and its subsidiaries included in the Prospectus, is
an independent public accountant as required by the Act and the rules and
regulations of the Commission thereunder.
(u) The Rights Agreement dated as of May 15, 1997 (the "Rights
Agreement"), between the Company and ChaseMellon Shareholder Services, L.L.C.
has been duly authorized, executed and delivered by the Company and, except for
the dead hand and anti-dilution provisions contained therein, is a legal, valid
and binding agreement of the Company enforceable in accordance with its terms,
subject to applicable laws of bankruptcy, insolvency, or similar laws relating
to creditors' rights generally and to general principles of equity (whether
applied in a proceeding in law or equity); the preferred stock purchase rights
(the "Rights") issued and issuable under the Rights Agreement have been duly
authorized by the Company; each outstanding share of Common Stock is associated
with and entitled to one duly authorized and validly issued Right; and, when
the Common Stock to be sold by the Company hereunder is issued, each such share
will be associated with and entitled to one duly authorized and validly issued
Right.
(v) None of the assets, liabilities, revenues or expenses of the
Company's subsidiaries other than the significant subsidiaries, when each such
financial statement item is considered separately but aggregated for all such
subsidiaries, is material to the assets, liabilities, revenues or expenses,
respectively, of the Company and its subsidiaries, taken as a whole.
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(w) No forward looking statement within the meaning of Section 27A of
the Act and Section 21E of the Exchange Act contained in the Registration
Statement has been made or reaffirmed without a reasonable basis or has been
disclosed other than in good faith.
(x) The Company now meets the exemptive requirements set forth in Rule
101(c)(1) of Regulation M under the Exchange Act.
SECTION 3. Sale and Delivery of Securities. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to issue and sell
through the Agent, as exclusive sales agent, and the Agent agrees to sell, as
sales agent for the Company, on a reasonable efforts basis, up to 2,000,000
Shares (the "Maximum Amount") on the terms set forth herein.
The Shares, up to the Maximum Amount, are to be sold on a daily basis
or otherwise as shall be agreed to by the Company and the Agent. The Company
will designate the maximum amount of Shares to be sold by the Agent on a daily
or other basis as reasonably agreed to by the Agent and in any event not in
excess of the amount available for issuance under the currently effective
Registration Statement. Subject to the terms and conditions hereof, the Agent
shall use its reasonable efforts to sell all of the designated Shares up to the
Maximum Amount. The compensation to the Agent for sales of Shares shall be at a
fixed commission rate of 3.0% of the gross sales price per share for the first
1,800,000 Shares sold under this Agreement and 2.5% of the gross sales price
per share for the remainder of the Shares sold under this Agreement. The
remaining proceeds, after further deduction for any transaction fees imposed by
any governmental or self-regulatory organization in respect of such sales,
shall constitute the net proceeds to the Company for such Shares (the "Net
Proceeds").
Notwithstanding any provision in this Agreement to the contrary, the
Company is under no obligation to issue and sell any or all of the Shares
through the Agent pursuant to this Agreement. The Company or the Agent may,
upon notice to the other party by telephone (confirmed promptly by telecopy),
suspend the offering of Shares; provided, however, that such suspension shall
not affect or impair the parties' respective obligations with respect to any
Shares sold hereunder prior to the giving of such notice. The Company may also
instruct the Agent by telephone (confirmed promptly by telecopy) not to sell
Shares if such sales cannot be effected at or above the price designated by the
Company in such instruction. Notwithstanding the foregoing, under no
circumstances shall the number of Shares sold pursuant to this Agreement exceed
the Maximum Amount or the number of shares of Common Stock available for
issuance under the currently effective Registration Statement.
If either party has reason to believe that the exemptive provisions
set forth in Rule 101(c)(1) of Regulation M under the Exchange Act are not
satisfied with respect to the Shares, it shall promptly notify the other party
and sales of Shares under this Agreement shall be suspended until that or other
exemptive provisions have been satisfied in the judgment of each party. The
Agent shall sell the Shares only by means of ordinary brokers' transactions on
the New York Stock Exchange (the "NYSE").
The Agent shall provide written confirmation to the Company following
the close of trading on the NYSE each day in which Shares are sold under this
Agreement setting forth the
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number of Shares sold on such day, the Net Proceeds to the Company, and the
compensation payable by the Company to the Agent with respect to such sales.
Settlement for sales of Shares will occur on the third business day
(or such earlier day as is industry practice for regular-way trading) following
the date on which such sales are made (each a "Closing Date"). The amount of
proceeds for such sales to be delivered to the Company against the receipt of
the Shares sold shall be equal to the aggregate sales prices at which such
Shares were sold, net of the Agent's compensation for such sales and after
deduction for any transaction fees imposed by any governmental or
self-regulatory organization in respect of such sales. Settlement for all
Shares shall be effected by free delivery of Shares to the Agent's account at
The Depository Trust Company in return for payments in same day funds delivered
to the account designated by the Company. If the Company shall default on its
obligation to deliver Shares on any Closing Date, the Company shall (i) hold
the Agent harmless against any loss, claim or damage arising from or as a
result of such default by the Company and (ii) pay the Agent any commission to
which it would otherwise be entitled absent such default. If the Agent breaches
this Agreement by failing to deliver proceeds on any Closing Date for Shares
delivered by the Company, the Agent will pay the Company interest based on the
effective overnight Federal Funds rate.
On each Closing Date, the Company shall be deemed to have affirmed
each representation and warranty contained in this Agreement, and on each
Filing Date (as defined below), the Company shall affirm in writing each
representation and warranty contained in this Agreement. The Company covenants
and agrees with the Agent that on or prior to the second business day after the
end of each calendar week during which sales of Shares were made by the Agent
(each such week a "Reporting Period"), the Company will (i) file a prospectus
supplement with the Commission under the applicable paragraph of Rule 424(b)
(each a "Filing Date"), which prospectus supplement will set forth, with regard
to such Reporting Period, the dates included within the Reporting Period, the
amount of Shares sold through the Agent, the Net Proceeds to the Company and
the compensation payable by the Company to the Agent with respect to sales of
Shares pursuant to this Agreement and (ii) deliver such number of copies of
each such prospectus supplement to the NYSE as are required by such Exchange.
Any obligation of the Agent to use its reasonable efforts to sell the Shares
shall be subject to the continuing accuracy of the representations and
warranties of the Company herein, to the performance by the Company of its
obligations hereunder and to the continuing satisfaction of the additional
conditions specified in Section 5 of this Agreement.
SECTION 4. Covenants of the Company. The Company covenants and agrees
with the Agent that:
(a) During the period in which a prospectus relating to the Shares is
required to be delivered under the Act, the Company will notify the Agent
promptly of the time when any subsequent amendment to the Registration
Statement has become effective or any subsequent supplement to the Prospectus
has been filed and of any request by the Commission for any amendment or
supplement to the Registration Statement or Prospectus or for additional
information; it will prepare and file with the Commission, promptly upon the
Agent's request, any amendments or supplements to the Registration Statement or
Prospectus that, in the Agent's opinion, may be necessary or advisable in
connection with the distribution of the Shares by the
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Agent; the Company will not file any amendment or supplement to the
Registration Statement or Prospectus (other than any prospectus supplement
relating to the offering of other securities, including, without limitation,
common stock other than pursuant to this Agreement, registered under the
Registration Statement) unless a copy thereof has been submitted to the Agent a
reasonable period of time before the filing and the Agent has not reasonably
objected thereto; and it will furnish to the Agent at the time of filing
thereof a copy of any document that upon filing is deemed to be incorporated by
reference in the Registration Statement or Prospectus; and the Company will
cause each amendment or supplement to the Prospectus to be filed with the
Commission as required pursuant to the applicable paragraph of Rule 424(b) of
the Rules and Regulations or, in the case of any document to be incorporated
therein by reference, to be filed with the Commission as required pursuant to
the Exchange Act, within the time period prescribed.
(b) The Company will advise the Agent, promptly after it shall receive
notice or obtain knowledge thereof, of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement, of the
suspension of the qualification of the Shares for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceeding for any
such purpose; and it will promptly use its best efforts to prevent the issuance
of any stop order or to obtain its withdrawal if such a stop order should be
issued.
(c) Within the time during which a prospectus relating to the Shares
is required to be delivered under the Act, the Company will comply as far as it
is able with all requirements imposed upon it by the Act and by the Rules and
Regulations, as from time to time in force, so far as necessary to permit the
continuance of sales of or dealings in the Shares as contemplated by the
provisions hereof and the Prospectus and will file on or before their due date
all reports and any definitive proxy or information statements required to be
filed by the Company with the Commission pursuant to Sections 13(a), 13(c), 14
or 15(d) of the Exchange Act for so long as the delivery of a prospectus is
required in connection with the offering or sale of such Shares. If during such
period any event occurs as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in the light of
the circumstances then existing, not misleading, or if during such period it is
necessary to amend or supplement the Registration Statement or Prospectus to
comply with the Act, the Company will promptly notify the Agent to suspend the
offering of Shares during such period and the Company will amend or supplement
the Registration Statement or Prospectus (at the expense of the Company, unless
the misstatements or omissions in question were made solely in reliance on
written information relating to the Agent furnished to the Company by the Agent
expressly for use in the Registration Statement or Prospectus in which case
such amendment or supplement shall be at the expense of the Agent) so as to
correct such statement or omission or effect such compliance.
(d) The Company will use its best efforts to cause the Shares to be
listed on the New York Stock Exchange and to qualify the Shares for sale under
the securities laws of such jurisdictions as the Agent designates and to
continue such qualifications in effect so long as required for the distribution
of the Shares, except that the Company shall not be required in connection
therewith to qualify as a foreign corporation or to execute a general consent
to service of process in any jurisdiction.
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(e) The Company will furnish to the Agent and its counsel (at the
expense of the Company) copies of the Registration Statement, the Prospectus
(including all documents incorporated by reference therein) and all amendments
and supplements to the Registration Statement or Prospectus that are filed with
the Commission during the period in which a prospectus relating to the Shares
is required to be delivered under the Act (including all documents filed with
the Commission during such period that are deemed to be incorporated by
reference therein), in each case as soon as available and in such quantities as
the Agent may from time to time reasonably request and will also furnish copies
of the Prospectus to the NYSE in accordance with Rule 153 of the Rules and
Regulations.
(f) The Company will furnish to the Agent for a period of five years
from the date of this Agreement such information as reasonably requested by the
Agent regarding the Company or its subsidiaries.
(g) The Company will make generally available to its security holders
as soon as practicable, but in any event not later than 15 months after the end
of the Company's current fiscal quarter, an earnings statement (which will
satisfy the provisions of Section 11(a) of the Act) covering a 12-month period
that satisfies the provisions of Section 11(a) of the Act and Rule 158 of the
Rules and Regulations.
(h) The Company, whether or not the transactions contemplated
hereunder are consummated or this Agreement is terminated, will pay all
expenses incident to the performance of its obligations hereunder, including,
but not limited to, expenses relating to (i) the preparation, printing and
filing of the Registration Statement as originally filed, of each prospectus
and of each amendment thereto, (ii) the preparation, issuance and delivery of
the Shares, (iii) the reasonable fees and disbursements of the Company's
counsel and accountants, (iv) the qualification of the Shares under securities
laws in accordance with the provisions of Section 4(d) of this Agreement,
including filing fees and any reasonable fees or disbursements of counsel for
the Agent in connection therewith and in connection with the determination of
the eligibility of the Shares for investment under state law, (v) the printing
and delivery to the Agent of copies of the Prospectus and any amendments or
supplements thereto, and of this Agreement, (vi) the fees and expenses incurred
in connection with the listing of the Shares on the NYSE and (vii) filing fees,
if any, of the Commission and the National Association of Securities Dealers,
Inc. In addition to any fees that may be payable to the Agent under this
Agreement, the Company will promptly, upon the request of the Agent, reimburse
the Agent for the fees and disbursements of the Agent's legal counsel incurred
in connection with the establishment of the structured equity shelf program
established by this Agreement.
(i) The Company will apply the net proceeds from the sale of the
Shares as set forth in the Prospectus.
(j) The Company will not, directly or indirectly, offer to sell, sell,
contract to sell, grant any option to sell or otherwise dispose of any shares
of Common Stock (other than the Shares offered pursuant to the provisions of
this Agreement) or securities convertible into or exchangeable for Common
Stock, warrants or any rights to purchase or acquire, Common Stock during the
period from the date of this Agreement through the final Closing Date for the
sale of Shares hereunder without giving the Agent at least five business days'
prior written notice
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<PAGE> 11
specifying the nature of the proposed sale and the date of such proposed sale
and suspending activity under this program for such period of time as may
reasonably be determined by agreement of the Company and the Agent; provided,
however, that no such notice and suspension shall be required in connection
with the Company's issuance or sale of (i) shares of Common Stock, options to
purchase shares of Common Stock or Common Stock issuable upon the exercise of
options pursuant to any employee or director stock option or benefits plan,
stock ownership plan or dividend reinvestment plan of the Company now in
effect, (ii) Common Stock issuable upon conversion of securities or the
exercise of warrants, options or other rights in effect or outstanding on the
date hereof or upon conversion of the Notes and (iii) issuances of shares of
Common Stock (including without limitation Rights) pursuant to the Rights
Agreement, or issuances of shares of Capital Stock upon the exercise of Rights
pursuant thereto.
(k) The Company will, at any time during the term of this Agreement,
as supplemented from time to time, advise the Agent immediately after it shall
have received notice or obtain knowledge thereof, of any information or fact
that would alter or affect any opinion, certificate, letter and other document
provided to the Agent pursuant to Section 5 herein.
(l) Each time that (i) the Registration Statement shall be amended or
the Prospectus supplemented (other than a supplement filed pursuant to Rule
424(b) under the Act that contains solely the information set forth in the
final paragraph of Section 3 of this Agreement) or (ii) there is filed with the
Commission any document incorporated by reference into the Prospectus (other
than a Current Report on Form 8-K, unless the Agent shall otherwise reasonably
request), the Company shall furnish or cause to be furnished to the Agent
forthwith a certificate dated the date of filing with the Commission of such
amendment, supplement or other document, the date of effectiveness of
amendment, as the case may be, in form and substance satisfactory to the Agent
to the effect that the statements contained in the certificate referred to in
Section 5(f) hereof which were last furnished to the Agent are true and correct
at the time of such amendment, supplement, filing, as the case may be, as
though made at and as of such time (except that such statements shall be deemed
to relate to the Registration Statement and the Prospectus as amended and
supplemented to such time) or, in lieu of such certificate, a certificate of
the same tenor as the certificate referred to in said Section 5(f), modified as
necessary to relate to the Registration Statement and the Prospectus as amended
and supplemented to the time of delivery of such certificate.
(m) Each time that (i) the Registration Statement is amended or the
Prospectus supplemented (other than a supplement filed pursuant to Rule 424(b)
under the Act that contains solely the information set forth in the final
paragraph of Section 3 of this Agreement) or (ii) there is filed with the
Commission any document incorporated by reference into the Prospectus (other
than a Current Report on Form 8-K, unless the Agent shall otherwise reasonably
request), the Company shall furnish or cause to be furnished forthwith to the
Agent and to counsel to the Agent a written opinion of Porter & Hedges, L.L.P.,
counsel to the Company ("Company Counsel"), or other counsel satisfactory to
the Agent, dated the date of filing with the Commission of such amendment,
supplement or other document and the date of effectiveness of such amendment,
as the case may be, in form and substance satisfactory to the Agent, of the
same tenor as the opinion referred to in Section 5(d) hereof, but modified as
necessary to relate to the Registration Statement and the Prospectus as amended
and supplemented to the time of delivery of such opinion.
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<PAGE> 12
(n) Each time that the Registration Statement shall be amended or the
Prospectus supplemented to include additional amended financial information or
there is filed with the Commission any document incorporated by reference into
the Prospectus which contains additional amended financial information, the
Company shall cause PricewaterhouseCoopers LLP or other independent accountants
satisfactory to the Agent, forthwith to furnish the Agent letters, dated the
date of effectiveness of such amendment, or the date of filing of such
supplement or other document with the Commission, as the case may be, in form
and substance satisfactory to the Agent, of the same tenor as the letter
referred to in Section 5(e) hereof but modified to relate to the Registration
Statement and the Prospectus, as amended and supplemented to the date of such
letter.
(o) The Company hereby consents to the Agent trading in the Company's
Common Stock for its own account on the same side of the market and at the same
time as the Company's sales pursuant to this Agreement.
(p) The Company will not, directly or indirectly, (i) take any action
designed to cause or result in, or that constitutes or might reasonably be
expected to constitute, the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Shares or (ii)
sell, bid for, or purchase the Shares, or pay anyone any compensation for
soliciting purchases of the Shares other than the Agent.
SECTION 5. Conditions of Agent's Obligations. The obligations of the
Agent to sell the Shares as provided herein shall be subject to the accuracy,
as of the date hereof and as of each Closing Date, of the representations and
warranties of the Company herein, to the performance by the Company of its
obligations hereunder and to the following additional conditions:
(a) The Registration Statement shall have become effective and no stop
order suspending the effectiveness of the Registration Statement shall have
been issued and no proceeding for that purpose shall have been instituted or,
to the knowledge of the Company, threatened by the Commission, and any request
of the Commission for additional information (to be included in the
Registration Statement or the Prospectus or otherwise) shall have been complied
with.
(b) The Agent shall not have advised the Company that the Registration
Statement or Prospectus, or any amendment or supplement thereto, contains an
untrue statement of fact that in the Agent's opinion is material, or omits to
state a fact that in the Agent's opinion is material and is required to be
stated therein or is necessary to make the statements therein not misleading.
(c) Except as contemplated in the Prospectus, subsequent to the
respective dates as of which information is given in the Registration Statement
and the Prospectus, there shall not have been any material change, on a
consolidated basis, in the capital stock of the Company and its subsidiaries,
or any material adverse change, or any development that may reasonably be
expected to cause a material adverse change, in the condition (financial or
other), business, prospects, net worth or results of operations of the Company
and its subsidiaries, or a downgrading in or withdrawal of the rating assigned
to any of the Company's securities by any rating organization or a public
announcement by any rating organization that it has under
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<PAGE> 13
surveillance or review its rating of any of the Company's securities, the
effect of which, in the case of any such action by a rating organization
described above, in the sole judgment of the Agent, is so material as to make
it impracticable or inadvisable to proceed with the offering of the Shares on
the terms and in the manner contemplated in the Prospectus.
(d) The Agent shall have received on the date hereof and at every
other date specified in Section 4(m) hereof, opinions of Company Counsel, dated
as of such dates, respectively, 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 its
jurisdiction of incorporation and has full corporate power and
authority to own its properties and conduct its business as described
in the Registration Statement and Prospectus, to execute and deliver
this Agreement and to issue, sell and deliver the shares as herein
contemplated;
(ii) Each Significant Subsidiary has been duly incorporated
and is validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, has full corporate
power and authority to own, lease and operate its properties and to
conduct its business as presently conducted;
(iii) The Company and its significant subsidiaries are duly
qualified or licensed by each jurisdiction in which they conduct their
respective businesses and in which the failure, individually or in the
aggregate, to be so licensed or qualified could have a material
adverse effect on the operations, business or condition of the Company
and its significant subsidiaries taken as a whole, and the Company and
its significant subsidiaries are duly qualified, and are in good
standing, in each jurisdiction in which they own or lease real
property or maintain an office and in which such qualification is
necessary;
(iv) The Company has full corporate power and authority to
enter into this Agreement, and this Agreement has been duly
authorized, executed and delivered by the Company;
(v) The Company has authorized capital stock as set forth in
the Registration Statement and the Prospectus, and the outstanding
shares of capital stock of the Company have been duly and validly
authorized and issued, and are fully paid, nonassessable and free of
preemptive rights pursuant to the General Corporation Law of the State
of Delaware, the Company's certificate of incorporation or any
agreement known to such counsel. The Shares have been duly and validly
authorized, and, when issued and delivered to and paid for by the
purchasers thereof pursuant to this Agreement, will be fully paid and
nonassessable and the stockholders of the Company have no preemptive
rights with respect to the Shares pursuant to the General Corporation
Law of the State of Delaware, the Company's certificate of
incorporation or any agreement known to such counsel, and the
certificates for the Shares are in due and proper form and the holders
of the Shares will not be subject to personal liability by reason of
being such holders;
(vi) The capital stock of the Company, including the Shares,
conforms in all material respects to the description thereof contained
in the Registration Statement and
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<PAGE> 14
Prospectus, and the Rights Agreement has been duly authorized,
executed and delivered by the Company and, except with respect to the
dead hand and anti-dilution provisions of the Rights Agreement as to
which no opinion is expressed, is a legal, valid and binding agreement
of the Company enforceable in accordance with its terms, subject to
applicable laws of bankruptcy, insolvency or similar laws relating to
creditors' rights generally and to general principles of equity
(whether applied in a proceeding in law or equity); and each
outstanding share of Common Stock is associated with and entitled to
one duly authorized and issued Right; and, when the Common Stock to be
sold by the Company hereunder is issued, each such share will be
associated with and entitled to one duly authorized and issued Right;
(vii) The Registration Statement has become effective under
the Act and has registered under the Act the offer and sale of the
Shares in the manner contemplated by this Agreement; to the best of
such counsel's knowledge, no stop order suspending the effectiveness
of the Registration Statement has been issued and no proceeding for
that purpose has been instituted or threatened by the Commission;
(viii) The Registration Statement, when it became effective,
and the Prospectus and any amendment or supplement thereto, on the
date of filing thereof with the Commission (and at each Closing Date
on or prior to the date of the opinion) (other than the financial
statements and other financial and statistical data contained or
incorporated by reference therein, as to which such counsel need
express no opinion), complied as to form in all material respects with
the requirements of the Act and the Rules and Regulations; and the
documents incorporated by reference in the Registration Statement or
Prospectus or any amendment or supplement thereto (other than the
financial statements and other financial and statistical data
contained or incorporated by reference therein, as to which such
counsel need express no opinion), when filed with the Commission under
the Act or the Exchange Act, complied as to form in all material
respects with the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission
thereunder;
(ix) The description in the Registration Statement and
Prospectus of any statutes, legal and governmental proceedings,
contracts and other documents included therein are accurate in all
material respects; and to the best of such counsel's knowledge, there
are no: (1) statutes or legal or governmental proceedings required to
be described in the Prospectus that are not described as required, or
(2) contracts, licenses, agreements, leases or documents of a
character required to be described in the Registration Statement or
Prospectus (or required to be filed under the Exchange Act if upon
such filing they would be incorporated by reference therein) or to be
filed as exhibits to the Registration Statement that are not described
and filed as required;
(x) The statements set forth in the Prospectus under the
caption "Plan of Distribution," insofar as they purport to describe
the provisions of the laws and documents referred to therein, are
accurate in all material respects;
(xi) The execution, delivery and performance of this
Agreement by the Company and the consummation of the transactions
contemplated herein by the
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<PAGE> 15
Company do not and will not result in a breach or violation of any of
the terms and provisions of, or constitute a default under (nor
constitute any event which with notice, lapse of time, or both, would
constitute a breach of or default under), or result in the creation of
any lien, charge or encumbrance on any property, or assets of the
Company or any of its subsidiaries pursuant to any provisions of any
license, indenture, mortgage, deed of trust, loan agreement, credit
agreement or other agreement or instrument known to such counsel to
which the Company or any of its subsidiaries is a party or by which it
is bound or to which any of the property of the Company or any of its
subsidiaries is subject, except for such breaches or defaults that
would not in the aggregate have a material adverse effect on the
Company's ability to perform its obligations under this Agreement or
on the condition, financial or otherwise, or earnings, business
affairs or business prospects of the Company and its subsidiaries
considered as one enterprise, nor will such action result in the
violation of the charter or by-laws of the Company or any of its
subsidiaries, or any statute, order, rule or regulation known to such
counsel of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of its
properties (except that such counsel need express no opinion with
respect to federal or state securities or Blue Sky laws); and no
consent, approval, authorization or order of, or filing with, any
court or governmental agency or regulatory body is required in
connection with the issuance or sale of the Shares as contemplated by
this Agreement, except such as have been obtained under the Act
(except that such counsel need express no opinion with respect to
state securities or Blue Sky laws);
(xii) To the best of counsel's knowledge, neither the Company
nor any of its subsidiaries is in breach of, or in default under (nor
has any event occurred which with notice, lapse of time, or both would
constitute a breach of or default under), any license, indenture,
mortgage, deed of trust, bank loan or any other agreement or
instrument to which the Company or any of its subsidiaries is a party
or by which any of them or their respective properties may be bound or
affected or under any law, regulation or rule or any decree, judgment
or order applicable to the Company or any of its subsidiaries; and
(xiii) To the best of counsel's knowledge, other than as set
forth in the Prospectus, there are no legal or governmental
proceedings pending to which the Company or any of its subsidiaries is
a party or of which any property of the Company or any of its
subsidiaries is the subject that, if determined adversely to the
Company or any of its subsidiaries, would individually or in the
aggregate, have a material adverse effect on the condition, financial
or otherwise, or the results of operations, stockholders' equity or
business of the Company and its subsidiaries considered as one
enterprise; and, to such counsel's knowledge, no such proceedings are
threatened.
In addition, such counsel shall state that such counsel has no reason
to believe that either the Registration Statement, at the time it (including
each Post-Effective Amendment thereto) 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 and any amendments or supplements thereto, on the date of
such opinion and at each Filing Date on or prior to the date of the opinion,
included an untrue statement of a material fact or omitted to state a material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; it being understood
that
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<PAGE> 16
such counsel need express no opinion as to the financial statements or other
financial data included in any of the documents mentioned in this paragraph.
(e) On the date hereof and at such other dates specified in Section
4(n) hereof, the Agent shall have received from PricewaterhouseCoopers LLP or
other independent accountants satisfactory to the Agent, a letter dated the
date of delivery thereof, in form and substance satisfactory to Agent.
(f) The Agent shall have received from the Company a certificate, or
certificates, signed by the Chairman of the Board, the Vice Chairman of the
Board, the President or a Vice President and by the principal financial or
accounting officer of the Company, dated as of the date hereof and dated as of
each Filing Date contemplated by this Agreement, to the effect that, to the
best of their knowledge based upon reasonable investigation:
(i) The representations and warranties of the Company in this
Agreement are true and correct, as if made at and as of the date
hereof or the Filing Date, and 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 the date hereof and each such
Filing Date (as the case may be);
(ii) No stop order suspending the effectiveness of the
Registration Statement has been issued, and no proceeding for that
purpose has been instituted or, to the knowledge of such officer after
due inquiry, is threatened, by the Commission;
(iii) Since the date of this Agreement there has occurred no
event required to be set forth in an amendment or supplement to the
Registration Statement or Prospectus that has not been so set forth
and there has been no document required to be filed under the Exchange
Act and the rules and regulations of the Commission thereunder that
upon such filing would be deemed to be incorporated by reference in
the Prospectus that has not been so filed; and
(iv) Neither the Company nor any of its subsidiaries has
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus any loss or
interference with the business of the Company and its subsidiaries
from fire, explosion, flood or other calamity, whether or not covered
by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated
in the Prospectus that has had or could reasonably be expected to have
a material adverse effect on the condition, financial or otherwise, on
the earnings, business affairs or business prospects of the Company
and its subsidiaries, considered as one enterprise; and since the date
of this Agreement, there has not been any material adverse change, on
a consolidated basis, in the business, financial condition or results
of operations of the Company and its subsidiaries considered as one
enterprise which has not been described in an amendment or supplement
to the Registration Statement or Prospectus (directly or by
incorporation).
(g) The Shares shall have been duly listed, subject to notice of
issuance, on the New York Stock Exchange.
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<PAGE> 17
(h) On the date hereof and on each Filing Date, the Company shall have
furnished to the Agent such appropriate further information, certificates and
documents as the Agent may reasonably request.
All such opinions, certificates, letters and other documents will be
in compliance with the provisions hereof only if they are satisfactory in form
and substance to the Agent. The Company will furnish the Agent with such
conformed copies of such opinions, certificates, letters and other documents as
the Agent shall reasonably request.
SECTION 6. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless the Agent, the
directors, officers, employees and agents of the Agent and each person, if any,
who controls the Agent within the meaning of Section 15 of the Act or Section
20 of the Exchange Act, from and against any and all losses, claims,
liabilities, expenses and damages (including, but not limited to, any and all
investigative, legal and other expenses reasonably incurred in connection with,
and any and all amounts paid in settlement of, any action, suit or proceeding
between any of the indemnified parties and any indemnifying parties or between
any indemnified party and any third party, or otherwise, or any claim
asserted), as and when incurred, to which the Agent, or any such person, may
become subject under the Act, the Exchange Act or other Federal or state
statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, liabilities, expenses or damages arise out of or are based on
(i) any untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus, the Registration Statement or the
Prospectus or any amendment or supplement to the Registration Statement or the
Prospectus, or in any application or other document executed by or on behalf of
the Company or based on written information furnished by or on behalf of the
Company filed in any jurisdiction in order to qualify the Shares under the
securities laws thereof or filed with the Commission, (ii) the omission or
alleged omission to state in such document a material fact required to be
stated in it or necessary to make the statements in it not misleading or (iii)
any breach by any of the indemnifying parties of any of their respective
representations, warranties and agreements contained in this Agreement, or (iv)
the engagement of the Agent pursuant to, and the performance by the Agent of
the services contemplated by, this Agreement; provided that this indemnity
agreement shall not apply to the extent that such loss, claim, liability,
expense or damage (1) arises from the sale of the Shares pursuant to this
Agreement and is based on an untrue statement or omission or alleged untrue
statement or omission made in reliance on and in conformity with information
relating to the Agent furnished in writing to the Company by the Agent
expressly for inclusion in any document described in clause (a)(i) above, or
(2) is found in a final judgment by a court of competent jurisdiction to have
resulted from the bad faith, willful misconduct or gross negligence of the
Agent or the reckless disregard by the Agent of its duties and obligations
hereunder. This indemnity agreement will be in addition to any liability that
the Company might otherwise have.
(b) The Agent agrees to indemnify and hold harmless the Company and
its directors and each officer of the Company who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act against any and all
loss, liability, claim, damage and expense described in the indemnity contained
in subsection (a) of this Section, as incurred, but only with respect to untrue
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<PAGE> 18
statements or omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendments thereto) or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written information relating to the Agent
furnished to the Company by the Agent expressly for use in the Registration
Statement (or any amendment thereto) or such preliminary prospectus or the
Prospectus (or any amendment or supplement thereto).
(c) Any party that proposes to assert the right to be indemnified
under this Section 6 will, promptly after receipt of notice of commencement of
any action against such party in respect of which a claim is to be made against
an indemnifying party or parties under this Section 6, notify each such
indemnifying party of the commencement of such action, enclosing a copy of all
papers served, but the omission so to notify such indemnifying party will not
relieve the indemnifying party from (i) any liability that it might have to any
indemnified party otherwise than under this Section 6 and (ii) any liability
that it may have to any indemnified party under the foregoing provision of this
Section 6 unless, and only to the extent that, such omission results in the
forfeiture of substantive rights or defenses by the indemnifying party. If any
such action is brought against any indemnified party and it notifies the
indemnifying party of its commencement, the indemnifying party will be entitled
to participate in and, to the extent that it elects by delivering written
notice to the indemnified party promptly after receiving notice of the
commencement of the action from the indemnified party, jointly with any other
indemnifying party similarly notified, to assume the defense of the action,
with counsel satisfactory to the indemnified party, and after notice from the
indemnifying party to the indemnified party of its election to assume the
defense, the indemnifying party will not be liable to the indemnified party for
any legal or other expenses except as provided below and except for the
reasonable costs of investigation subsequently incurred by the indemnified
party in connection with the defense. The indemnified party will have the right
to employ its own counsel in any such action, but the fees, expenses and other
charges of such counsel will be at the expense of such indemnified party unless
(1) the employment of counsel by the indemnified party has been authorized in
writing by the indemnifying party, (2) the indemnified party has reasonably
concluded (based on advice of counsel) that there may be legal defenses
available to it or other indemnified parties that are different from or in
addition to those available to the indemnifying party, (3) a conflict or
potential conflict exists (based on advice of counsel to the indemnified party)
between the indemnified party and the indemnifying party (in which case the
indemnifying party will not have the right to direct the defense of such action
on behalf of the indemnified party) or (4) the indemnifying party has not in
fact employed counsel to assume the defense of such action within a reasonable
time after receiving notice of the commencement of the action, in each of which
cases the reasonable fees, disbursements and other charges of counsel will be
at the expense of the indemnifying party or parties. It is understood that the
indemnifying party or parties shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable
fees, disbursements and other charges of more than one separate firm admitted
to practice in such jurisdiction at any one time for all such indemnified party
or parties. All such fees, disbursements and other charges will be reimbursed
by the indemnifying party promptly as they are incurred. An indemnifying party
will not be liable for any settlement of any action or claim effected without
its written consent (which consent will not be unreasonably withheld). No
indemnifying party shall, without the prior written consent of each indemnified
party, settle or compromise or consent to the entry of any judgment in any
pending or threatened claim, action or proceeding relating to the matters
contemplated by this Section 6 (whether or not any
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<PAGE> 19
indemnified party is a party thereto), unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all
liability arising or that may arise out of such claim, action or proceeding.
Notwithstanding any other provision of this Section 6(c), if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement effected without its written
consent if (i) such settlement is entered into more than 45 days after receipt
by such indemnifying party of the aforesaid request, (ii) such indemnifying
party shall have received notice of the terms of such settlement at least 30
days prior to such settlement being entered into and (iii) such indemnifying
party shall not have reimbursed such indemnified party in accordance with such
request prior to the date of such settlement; provided that an indemnifying
party shall not be liable for any such settlement effected without its consent
if such indemnifying party, prior to the date of such settlement, (1)
reimburses such indemnified party in accordance with such request for the
amount of such fees and expenses of counsel as the indemnifying party believes
in good faith to be reasonable and (2) provides written notice to the
indemnified party that the indemnifying party disputes in good faith the
reasonableness of the unpaid balance of such fees and expenses.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in the foregoing
paragraphs of this Section 6 is applicable in accordance with its terms but for
any reason is held to be unavailable from the Company or the Agent, the Company
and the Agent will contribute to the total losses, claims, liabilities,
expenses and damages (including any investigative, legal and other expenses
reasonably incurred in connection with, and any amount paid in settlement of,
any action, suit or proceeding or any claim asserted, but after deducting any
contribution received by the Company from persons other than the Agent, such as
persons who control the Company within the meaning of the Act, officers of the
Company who signed the Registration Statement and directors of the Company, who
also may be liable for contribution) to which the Company and the Agent may be
subject in such proportion as shall be appropriate to reflect the relative
benefits received by the Company on the one hand and the Agent on the other.
The relative benefits received by the Company on the one hand and the Agent on
the other hand shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received by the Company
bear to the total compensation (before deducting expenses) received by the
Agent from the sale of Shares on behalf of the Company. If, but only if, the
allocation provided by the foregoing sentence is not permitted by applicable
law, the allocation of contribution shall be made in such proportion as is
appropriate to reflect not only the relative benefits referred to in the
foregoing sentence but also the relative fault of the Company, on the one hand,
and the Agent, on the other, with respect to the statements or omission which
resulted in such loss, claim, liability, expense or damage, or action in
respect thereof, as well as any other relevant equitable considerations with
respect to such offering. Such relative fault shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company or the Agent, the intent of the parties
and their relative knowledge, access to information and opportunity to correct
or prevent such statement or omission. The Company and the Agent agree that it
would not be just and equitable if contributions pursuant to this Section 6(d)
were to be determined by pro rata allocation or by any other method of
allocation which does not take into account the equitable considerations
referred to herein. The amount paid or payable by an indemnified party as a
result of the loss, claim, liability, expense or damage, or action in respect
thereof, referred to
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above in this Section 6(d) shall be deemed to include, for the purpose of this
Section 6(d), any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the foregoing provisions of this Section 6(d), the
Agent shall not be required to contribute any amount in excess of the
commissions received by it under this Agreement and no person found guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
will be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 6(d), any person who
controls a party to this Agreement within the meaning of the Act, and any
officers, directors, employees or agents of the Agent, will have the same
rights to contribution as that party, and each officer of the Company who
signed the Registration Statement will have the same rights to contribution as
the Company, subject in each case to the provisions hereof. Any party entitled
to contribution, promptly after receipt of notice of commencement of any action
against such party in respect of which a claim for contribution may be made
under this Section 6(d), will notify any such party or parties from whom
contribution may be sought, but the omission to so notify will not relieve that
party or parties from whom contribution may be sought from any other obligation
it or they may have under this Section 6(d). Except for a settlement entered
into pursuant to the last sentence of Section 6(c) hereof, no party will be
liable for contribution with respect to any action or claim settled without its
written consent (which consent will not be unreasonably withheld).
SECTION 7. Representations and Agreements to Survive Delivery. All
representations, warranties and agreements of the Company herein or in
certificates delivered pursuant hereto, and the agreements of the Agent
contained in Section 6 hereof, shall remain operative and in full force and
effect regardless of (i) any investigation made by or on behalf of the Agent,
any controlling persons, or the Company (or any of their officers, directors or
controlling persons), (ii) acceptance of the Shares and payment therefor or
(iii) any termination of this Agreement and shall survive delivery of and
payment for the Shares.
SECTION 8. Termination.
(a) The Agent shall have the right by giving notice as hereinafter
specified at any time at or prior to any Closing Date, to terminate this
Agreement if (i) any material adverse change, or any development that has
actually occurred and that is reasonably expected to cause a material adverse
change, in the business, financial condition or results of operations of the
Company and its subsidiaries has occurred which, in the judgment of such Agent,
materially impairs the investment quality of the Shares, (ii) the Company shall
have failed, refused or been unable, at or prior to the Closing Date, to
perform any agreement on its part to be performed hereunder, (iii) any other
condition of the Agent's obligations hereunder is not fulfilled, (iv) any
suspension or limitation of trading in the Shares or in securities generally on
the NYSE, or any setting of minimum prices for trading of the Shares or in
securities generally on such exchange, shall have occurred, (v) any banking
moratorium shall have been declared by Federal or New York authorities or (vi)
an outbreak or material escalation of major hostilities in which the United
States is involved, a declaration of war by Congress, any other substantial
national or international calamity or any other event or occurrence of a
similar character shall have occurred since the execution of this Agreement
that, in the judgment of the Agent, makes it impractical or inadvisable to
proceed with the completion of the sale of and payment for the Shares to be
sold by the Agent on behalf of the Company. Any such termination shall be
without liability of any
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party to any other party except that the provisions of Section 4(g), Section 6
and Section 7 hereof shall remain in full force and effect notwithstanding such
termination. If the Agent elects to terminate this Agreement as provided in
this Section, the Agent shall provide the required notice as specified herein.
(b) The Company shall have the right, by giving notice as hereinafter
specified, to terminate this Agreement in its sole discretion at any time on or
after the first anniversary of the date of this Agreement. Any such termination
shall be without liability of any party to any other party except that the
provisions of Section 4(g), Section 6 and Section 7 hereof shall remain in full
force and effect notwithstanding such termination.
(c) The Agent shall have the right, by giving notice as hereinafter
specified, to terminate this Agreement in its sole discretion at any time. Any
such termination shall be without liability of any party to any other party
except that the provisions of Section 4(g), Section 6 and Section 7 hereof
shall remain in full force and effect notwithstanding such termination.
(d) This Agreement shall remain in full force and effect unless
terminated pursuant to Sections 8(a), (b) or (c) above or otherwise by mutual
agreement of the parties; provided that any such termination by mutual
agreement shall in all cases be deemed to provide that Section 4(g), Section 6
and Section 7 shall remain in full force and effect.
(e) Any termination of this Agreement shall be effective on the date
specified in such notice of termination; provided that such termination shall
not be effective until the close of business on the date of receipt of such
notice by the Agent or the Company, as the case may be. If such termination
shall occur prior to the Closing Date for any sale of Shares, such Shares shall
settle in accordance with the provisions of the second to last paragraph of
Section 3 hereof.
SECTION 9. Notices. All notices or communications hereunder shall be
in writing and if sent to the Agent shall be mailed, delivered, telexed or
telecopied and confirmed to the Agent at PaineWebber Incorporated, 1285 Avenue
of the Americas, New York, New York 10019, telecopy no. (212) 713-4205,
Attention: Corporate Finance Department, or if sent to the Company, shall be
mailed, delivered, telexed or telecopied and confirmed to the Company at 3701
Kirby Drive, Suite #112, Houston, Texas 77098, telecopy no. (713) 512-8701,
attention: Anthony Tripodo. Each party to this Agreement may change such
address for notices by sending to the parties to this Agreement written notice
of a new address for such purpose.
SECTION 10. Parties. This Agreement shall inure to the benefit of and
be binding upon the Company and the Agent and their respective successors and
the controlling persons, officers and directors referred to in Section 6
hereof, and no other person will have any right or obligation hereunder.
SECTION 11. Adjustments for Stock Splits. The parties acknowledge and
agree that all share related numbers contained in this Agreement (including,
without limitation, the Maximum Amount) shall be adjusted to take into account
any stock split effected with respect to the Shares.
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SECTION 12. Entire Agreement. This Agreement constitutes the entire
agreement and supersedes all other prior and contemporaneous agreements and
undertakings, both written and oral, among the parties hereto with regard to
the subject matter hereof.
SECTION 13. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS.
SECTION 14. Waiver of Jury Trial. The Company and the Agent each
hereby irrevocably waive any right they may have to a trial by jury in respect
of any claim based upon or arising out of this agreement or any transaction
contemplated hereby.
SECTION 15. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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If the foregoing correctly sets forth the understanding between the
Company and the Agent, please so indicate in the space provided below for that
purpose, whereupon this letter shall constitute a binding agreement between the
Company and the Agent. Alternatively, the execution of this Agreement by the
Company and its acceptance by or on behalf of the Agent may be evidenced by an
exchange of telegraphic or other written communications.
Very truly yours,
VERITAS DGC INC.
By: /s/ Anthony Tripodo
-----------------------------------
Name: Anthony Tripodo
Title: Executive Vice President,
Chief Financial Officer,
and Treasurer
ACCEPTED as of the date
first above written
PAINEWEBBER INCORPORATED
By: /s/ Charles H. Prioleau
-------------------------------
Name: Charles H. Prioleau
Title: Managing Director
23
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[PORTER & HEDGES, L.L.P. LETTERHEAD]
October 26, 1999
Veritas DGC Inc.
3701 Kirby Drive
Houston, Texas 77098
Re: Opinion as to legality of 2,000,000 shares of common stock to
be issued pursuant to the Sales Agency Agreement
Gentlemen:
We have acted as counsel to Veritas DGC Inc., a Delaware corporation
(the "Company"), in connection with the preparation for filing with the
Securities and Exchange Commission of a registration statement on Form S-3, No.
333-86247 (the "Registration Statement"), and a related prospectus supplement
(the "Prospectus Supplement") under the Securities Act of 1933, as amended. The
Prospectus Supplement relates to the issuance of an aggregate of 2,000,000
shares (the "Shares") of the Company's common stock, $.01 par value (the
"Common Stock"), pursuant to a Sales Agency Agreement (the "Agreement") dated
as of October 26, 1999, between the Company and PaineWebber Incorporated, for
the purpose of sale from time to time to the public.
We have examined the Agreement and such corporate records, documents,
instruments and certificates of the Company, and have reviewed such questions
of law as we have deemed necessary, relevant or appropriate to enable us to
render the opinion expressed herein. In such examination, we have assumed
without independent investigation the authenticity of all documents submitted
to us as originals, the genuineness of all signatures, the legal capacity of
all natural persons, and the conformity of any documents submitted to us as
copies to their respective originals. As to certain questions of fact material
to this opinion, we have relied without independent investigation upon
statements or certificates of public officials and officers of the Company.
Based upon such examination and review, we are of the opinion that the
Shares issued pursuant to the Agreement have been duly authorized, and upon
issuance and delivery as described in the Prospectus Supplement, will be
validly issued, fully paid, and nonassessable shares of Common Stock of the
Company.
<PAGE> 2
Veritas DGC Inc.
October 26, 1999
Page 2
We consent to the reference to our firm under the caption "Legal
Matters" in Registration Statement No. 333-86247 and the related prospectus and
the Prospectus Supplement relating to the Shares.
Very truly yours,
/s/ PORTER & HEDGES, L.L.P.
PORTER & HEDGES, L.L.P.
