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EXHIBIT 4.1
HERCULES INCORPORATED
Officers' Certificate
Pursuant to Sections 2.01 and 2.03 of Indenture
Hercules Trust I, a Delaware statutory business trust (the "Trust"),
has offered to the public in an underwritten offering $350,000,000 aggregate
liquidation amount of its 9.42% Trust Originated Preferred Securities (the
"Preferred Securities"), representing undivided beneficial interests in the
assets of the Trust and proposes to invest the proceeds from such offering,
together with the proceeds of the issuance and sale by the Trust to Hercules
Incorporated, a Delaware corporation (the "Company") of $10,824,750 aggregate
liquidation amount of its Common Securities (the "Common Securities" and,
together with the Preferred Securities, the "Trust Securities"), in $360,824,750
aggregate principal amount of the Subordinated Debentures referred to below
issued under the Junior Subordinated Debentures Indenture, dated as of March 17,
1999 (the "Indenture"), between the Company and The Chase Manhattan Bank, as
trustee (the "Trustee"). The Trust Securities will be issued pursuant to the
terms of an Amended and Restated Trust Agreement of the Trust, dated as of March
17, 1999 (the "Trust Agreement"), among the Administrative Trustees (as defined
therein), the Property Trustee (as defined therein) and the Delaware Trustee (as
defined therein), and the Company. Pursuant to the terms of the Underwriting
Agreement, dated as of March 12, 1999, by and among the Company, the Trust, and
Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, A.G.
Edwards & Sons, Inc., Morgan Stanley & Co. Incorporated, PaineWebber
Incorporated, Prudential Securities Incorporated and Salomon Smith Barney Inc.,
as representatives of the several underwriters (the "Underwriting Agreement"),
the underwriters have an option to purchase up to $12,500,000 aggregate
liquidation amount of additional Preferred Securities. Such over-allotment
option has been exercised in full and the aggregate liquidation amount of the
Preferred Securities will be $362,500,000, the aggregate liquidation amount of
the Common Securities will be $11,211,350 and the aggregate principal amount of
the Subordinated Debentures will be $373,711,350.
Capitalized terms used herein and not otherwise defined herein have the
meanings specified in the Indenture.
Pursuant to Section 2.01 and Section 2.03 of the Indenture, the
undersigned Chief Executive Officer and Assistant Treasurer of the Company
hereby certify on behalf of the Company as follows:
1. Authorization. The Board of Directors of the Company has approved
and authorized the establishment of a series of junior subordinated debentures
of the Company in accordance with the provisions of the Indenture pursuant to
resolutions adopted by the Board of Directors of the Company on February 3, 1993
(Standing Resolution for Empowered Persons), August 27, 1998 (and the related
Finance Committee Resolutions of the same date) and
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February 19, 1999 (and the Related Finance Committee Resolutions of the same
date). A copy of such resolutions has been delivered to the Trustee with the
Secretary's Certificate of the Company.
2. Compliance with Covenants and Conditions Precedent. The Company has
complied with all covenants and conditions precedent provided for in the
Indenture relating to the establishment of a series of junior subordinated
debentures thereunder.
3. Terms. The terms of the series of junior subordinated debentures
established pursuant to this Officers' Certificate shall be as follows:
(a) Title. The title of the series of Debentures is the 9.42%
Junior Subordinated Deferrable Interest Debentures due 2029 (the
"Subordinated Debentures").
(b) Aggregate Principal Amount. The aggregate principal amount
of the Subordinated Debentures which may be authenticated and delivered
under the Indenture (except for Subordinated Debentures authenticated
and delivered upon registration of transfer of, or in exchange for, or
in lieu of, other Subordinated Debentures of the same series pursuant
to Section 2.07, 2.08 or 2.10 of the Indenture, or pursuant to the
terms of such Subordinated Debentures) is $373,711,350. Such amount
includes the $12,886,600 that is issuable upon exercise of the
over-allotment option on March 17, 1999, and described in the
introductory paragraph to this Officers' Certificate.
(c) Stated Maturity. The principal amount of the Subordinated
Debentures will be payable on March 31, 2029 (the "Maturity Date"),
subject to earlier redemption as set forth in paragraph (j) below. The
Subordinated Debentures will not be entitled to the benefit of any
sinking fund prior to maturity.
(d) Interest and Payment of Interest.
(i) Interest will be payable to the Person in whose
name a Subordinated Debenture is registered in the Register at
the close of business (whether or not a Business Day) on the
Regular Record Date with respect to the relevant Interest
Payment Date, except for interest payable on a Subordinated
Debenture surrendered for redemption as set forth in paragraph
(j) below.
(ii) The Subordinated Debentures will bear interest at the
rate of 9.42% per annum (the "Interest Rate"). Interest on the
Subordinated Debentures will be payable quarterly in arrears on March
31, June 30, September 30 and December 31 of each year (each, an
"Interest Payment Date"), commencing on June 30, 1999. In respect of
any Subordinated Debentures of which the Property Trustee is the
registered holder or any Subordinated Debentures which are in
book-entry only form, the Regular Record Date shall be one (1) Business
Day before the relevant Interest Payment Date. Notwithstanding the
foregoing sentence, if the Preferred Securities are no longer in
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book-entry only form or if the Subordinated Debentures are no longer
held by the Property Trustee or in book-entry only form, the Regular
Record Date shall be the close of business on the 15th day of the
calendar month in which such Interest Payment Date occurs, whether or
not a Business Day. The Subordinated Debentures will bear interest from
March 17, 1999 or from the most recent Interest Payment Date to which
interest has been paid or duly provided for until the principal thereof
is paid or made available for payment. Interest payments shall be the
amount of interest accrued from and including the most recent Interest
Payment Date in respect of which interest has been paid or duly
provided for (or from and including March 17, 1999, if no interest has
been paid or duly provided for with respect to such Subordinated
Debenture), to but excluding the next succeeding Interest Payment Date.
(iii) The amount of interest payable for any period
will be computed on the basis of a 360-day year of twelve
30-day months. The interest payable for any partial period
will be computed on the basis of the actual number of days
elapsed in such period. In the event that any date on which
interest is payable on the Subordinated Debentures is not a
Business Day, then payment of interest payable on such date
will be made on the next succeeding day which is a Business
Day (and without any interest or other payment in respect of
any such delay), except that, if such Business Day is in the
next succeeding calendar year, such payment shall be made on
the immediately preceding Business Day, in each case with the
same force and effect as if made on such date.
(e) Additional Sums. If at any time while the Property Trustee
is the holder of any Subordinated Debentures, the Trust or the Property
Trustee is required to pay any taxes, duties, assessments or
governmental charges of whatever nature (other than withholding taxes
on payments made to holders of the Preferred Securities) imposed by the
United States, or any other taxing authority, then, in any such case,
the Company will pay additional amounts ("Additional Sums") on the
Subordinated Debentures as shall be required so that the net amounts
received and retained by the Trust and the Property Trustee after
paying such taxes, duties, assessments or other governmental charges
will be equal to the amounts the Trust and the Property Trustee would
have received had no such taxes, duties, assessments or other
governmental charges been imposed.
(f) Extension of Interest Payment Period.
(i) Right to Extend. The Company shall have the
right, at any time, and from time to time, during the term of
the Subordinated Debentures to extend the interest payment
period of such Subordinated Debentures for up to 20
consecutive quarterly periods (an "Extended Interest Payment
Period"), provided no Event of Default has occurred and is
continuing with respect to the Subordinated Debentures and
provided, further, that such Extended Interest Payment Period
must end on an Interest Payment Date and may not extend beyond
the Maturity Date or any Redemption Date. At the end of an
Extended
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Interest Payment Period, the Company shall pay all interest
then accrued and unpaid (together with interest thereon at the
rate specified for the Subordinated Debentures to the extent
that payment of such interest is enforceable under applicable
law). To the extent permitted by applicable law, interest, the
payment of which has been deferred because of the extension of
the Interest Payment Period pursuant to this paragraph, will
bear interest thereon at the Interest Rate for each quarterly
period of the Extended Interest Payment Period. At the end of
the Extended Interest Payment Period, the Company shall pay
all interest then accrued and unpaid on the Subordinated
Debentures including any Additional Sums which shall be
payable to the Holders of the Subordinated Debentures in whose
names the Subordinated Debentures are registered in the
Register on the first Regular Record Date after the end of the
Extended Interest Payment Period. Before the termination of
any Extended Interest Payment Period, the Company may shorten
or further extend such Extended Interest Payment Period,
provided, however, that such Extended Interest Payment Period,
together with all such previous further extensions thereof,
shall not exceed 20 consecutive quarterly periods. At the
termination of any Extended Interest Payment Period and upon
the payment of all accrued and unpaid interest and any
Additional Sums then due, the Company may elect a new Extended
Interest Payment Period, subject to the foregoing
requirements. No interest shall be due and payable during an
Extended Interest Payment Period, except at the end thereof.
(ii) Notice of Extension.
(1) If the Property Trustee is the only
registered holder of the Subordinated Debentures at
the time the Company selects an Extended Interest
Payment Period, the Company shall give written notice
to both the Administrative Trustees and the Property
Trustee of its selection of such Extended Interest
Payment Period in accordance with the notice
provisions of Section 4.01 of the Indenture.
(2) If the Property Trustee is not the only
holder of the Subordinated Debentures at the time the
Company selects an Extended Interest Payment Period,
the Company shall give the holders of the
Subordinated Debenture's written notice of its
selection of such Extended Interest Payment Period in
accordance with the notice provisions of Section 4.01
of the Indenture.
(3) The quarterly period in which any notice
is given pursuant to paragraphs (1) or (2) of this
subparagraph (ii) shall be counted as one of the 20
quarterly periods permitted in the maximum Extended
Interest Payment Period permitted under this
paragraph (f).
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(g) Issue Date. The issue date for the Subordinated Debentures
is March 17, 1999.
(h) Denominations. The Subordinated Debentures are issuable in
denominations of $25 and integral multiples thereof.
(i) Place of Payment; Registration of Transfer and Exchange;
Notices to Company. Payment of the principal of and interest on the
Subordinated Debentures will be made at the Capital Markets Fiduciary
Services office of the Trustee maintained for that purpose in
Philadelphia, Pennsylvania, or at any other office or agency designated
by the Company for such purpose in such coin or currency of the United
States of America as at the time of payment is legal tender for the
payment of public and private debts. Payment of interest on an Interest
Payment Date may be made by check mailed to the address of the Person
entitled thereto as such address shall appear in the Register;
provided, however, that a Holder of the Subordinated Debentures shall
be entitled to receive payments of interest on the Subordinated
Debentures by wire transfer of immediately available funds if such
Holder owns at least $10,000,000 aggregate principal amount of the
Subordinated Debentures and if appropriate wire transfer instructions
have been received in writing by the Trustee not less than l5 days
prior to the applicable Interest Payment Date; and provided, further,
that so long as the registered Holder of any Subordinated Debentures is
the Property Trustee, the payment of the principal of and interest
(including Additional Sums, if any) on such Subordinated Debentures
held by the Property Trustee will be made at such place and to such
account as may be designated by the Property Trustee. The Subordinated
Debentures may be presented for exchange and registration of transfer
at the Corporate Trust Office of the Company in the Borough of
Manhattan, The City of New York, or at the office of any transfer agent
hereafter designated by the Company for such purpose. Notices and
demands to or upon the Company in respect of the Subordinated
Debentures and the Indenture may be served at Hercules Incorporated,
Hercules Plaza, 1313 North Market Street, Wilmington, Delaware,
19894-0001, Attention: Vice President and Treasurer.
(j) Redemption. The Subordinated Debentures are not entitled
to any mandatory redemption or sinking fund payments.
(i) Optional Redemption: The Subordinated Debentures
will be redeemable at the option of the Company, in whole or,
on or after March 17, 2004, in part, before their maturity:
(A) on one or more occasions any time on or after March 17,
2004; or (B) before March 17, 2004, upon the occurrence of a
Special Event (as defined below). If Hercules decides to
redeem Subordinated Debentures in these circumstances, the
redemption price of each Subordinated Debenture redeemed will
be equal to 100% of the principal amount of such Subordinated
Debenture plus accrued and unpaid interest on such
Subordinated Debenture to the date of redemption (the
"Redemption Price").
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(ii) Special Event Redemption: If a Tax Event or an
Investment Company Event (each as defined below, and each a
"Special Event") shall occur before March 17, 2004, the
Company shall have the right to redeem the Subordinated
Debentures in whole, but not in part, within 90 days following
the occurrence of such Special Event, at the Redemption Price.
(A) "Investment Company Event" means that
the Administrative Trustees and the Company shall
have received an opinion of independent counsel
experienced in such matters under the Investment
Company Act of 1940, as amended to the effect that,
as a result of any amendment to, or change (including
any announced prospective change) in, the laws or
regulations thereunder of the United States, or as a
result of any official administrative pronouncement
or judicial decision interpreting or applying such
laws or regulations, which amendment or change is
effective or which pronouncement or decision is
announced on or after March 17, 1999, there is more
than an insubstantial risk that the Trust is or will
be considered an "Investment Company" which is
required to be registered under the Investment
Company Act and such risk cannot be and could not
have been avoided either (1) by dissolution of the
Trust and distribution of the Subordinated Debentures
to Holders in accordance with Section 8.1(a)(iii) of
the Trust Agreement or (2) by the Trust or the
Sponsor taking some ministerial action, such as
filing a form or making an election, or pursuing some
other similar reasonable measure that has no adverse
effect on the Trust, the Sponsor or the Holders.
(B) "Tax Event" means that the
Administrative Trustees and the Company shall have
received an opinion of independent counsel
experienced in such matters to the effect that, (1)
as a result of any amendment to, or change (including
any announced prospective change) in, the laws or any
regulations thereunder of the United States or as a
result of any official administrative pronouncement
or judicial decision interpreting or applying such
laws or regulations, which amendment or change is
effective or which pronouncement or decision is
announced on or after March 17, 1999, there is more
than an insubstantial risk that (x) the Trust is, or
will be within 90 days of the date of such opinion,
subject to United States Federal income tax with
respect to income received or accrued on the
Subordinated Debentures, (y) the interest payable by
the Company on the Subordinated Debentures is not, or
within 90 days of the date of such opinion will not
be, deductible by the Company, in whole or in part,
for United States Federal income tax purposes, or (z)
the Trust is, or will be within 90 days of the date
of such opinion, subject to more than a de minimis
amount of other taxes, duties or other governmental
charges; and (2) such risk cannot be and could not
have been avoided either (a) by dissolution of the
Trust and distribution of the Subordinated Debentures
to
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Holders in accordance with Section 8.1(a)(iii) of the
Trust Agreement or (b) by the Trust or the Sponsor
taking some ministerial action, such as filing a form
or making an election, or pursuing some other similar
reasonable measure that has no adverse effect on the
Trust, the Sponsor or the Holders.
(iii) Notice of any redemption will be mailed at
least 30 days but not more than 60 days before the Redemption
Date to each Holder of the Subordinated Debentures to be
redeemed. Unless the Company defaults in payment of the
Redemption Price, on and after the Redemption Date, interest
will cease to accrue on the Subordinated Debentures or
portions thereof called for redemption. If less than all of
the Subordinated Debentures are to be redeemed, the
Subordinated Debentures (or portions thereof) to be redeemed
shall be selected by the Trustee by such method as the Trustee
shall deem fair and appropriate, provided that if, at the time
of redemption, the Subordinated Debentures are registered as a
Global Debenture, the Depositary shall determine the principal
amount of such Subordinated Debentures held by each Holder to
be redeemed in accordance with its procedures.
(k) Form. Attached hereto as Exhibit A is a specimen form of
the Subordinated Debentures, including the Certificate of
Authentication. The terms of the Subordinated Debentures are specified
therein as well as in this Officers' Certificate.
(l) Registered Debentures in Book-Entry Form. The Subordinated
Debentures will be issuable and transferable in fully registered form,
without coupons, in denominations of $25 and integral multiples
thereof. The Subordinated Debentures may be issued in book-entry form
("Book-Entry Debentures") and represented by one or more global
Debentures (the "Global Debentures") in fully registered form, without
coupons. The initial Depository with respect to the Global Debentures
will be The Depository Trust Company, as Depository for the accounts of
its participants. So long as the Depository for a Global Debenture, or
its nominee, is the registered owner of the Global Debenture, the
Depositary or its nominee, as the case may be, will be considered the
sole owner or holder of the Subordinated Debentures in book-entry form
represented by such Global Debenture for all purposes under the
Indenture. Book-Entry Debentures will not be exchangeable for
Subordinated Debentures in definitive form ("Definitive Debentures")
except as provided in Section 2.11 of the Indenture.
(m) Limitation of Transactions. If Subordinated Debentures are
issued to the Trust or a trustee of the Trust and (i) there shall have
occurred any event that would constitute an Event of Default or (ii)
the Company shall be in default with respect of its payment or other
obligations under the Preferred Securities Guarantee Agreement, dated
as of March 17, 1999, between the Company and The Chase Manhattan Bank,
as Preferred Securities Guarantee Trustee, or (iii) the Company shall
have given notice of its election to defer payments of interest on the
Subordinated Debentures by extending the
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interest payment period as provided in paragraph (f), then the Company
will not (A) declare or pay any dividend on, or make any distributions
with respect to, or redeem, purchase, acquire or make a liquidation
payment with respect to, any of its capital stock, (B) make any payment
of principal of or premium, if any, or interest on, or repay,
repurchase or redeem any debt securities of the Company which rank pari
passu with or junior to the Subordinated Debentures or (C) make any
guarantee payments with respect to any guarantee by the Company of the
debt securities of any subsidiary of the Company if such guarantee
ranks pari passu with or junior to the Subordinated Debentures;
provided, that, none of the foregoing limitations apply to restrict the
Company's ability to take the certain permitted actions specified in
Section 4.02 of the Indenture.
(n) Agreement to Subordinate. The Company covenants and
agrees, and each Holder of Subordinated Debentures issued under the
Indenture by such Holder's acceptance thereof likewise covenants and
agrees, that all Subordinated Debentures shall be issued subject to the
provisions of Article 10 of the Indenture; and each Holder of a
Subordinated Debenture, whether upon original issue or upon transfer or
assignment thereof, accepts and agrees to be bound by such provisions.
(o) Register; Paying Agent. The Register for the Subordinated
Debentures will be initially maintained at the Capital Markets
Fiduciary Services office of the Trustee. The Company hereby appoints
the Trustee as the initial Paying Agent.
(p) Covenants as to the Trust. For so long as the Trust
Securities remain outstanding, the Company will (i) maintain 100%
direct or indirect ownership of the Common Securities of the Trust;
provided, however, that any permitted successor of the Company under
the Indenture may succeed to the Company's ownership of the Common
Securities, (ii) use its best efforts to cause the Trust (A) to remain
a statutory business trust, except in connection with a distribution of
Subordinated Debentures as provided in the Trust Agreement, the
redemption of all of the Trust Securities or certain mergers,
consolidations or amalgamations, each as permitted by the Trust
Agreement, (B) to continue to be treated as a grantor trust for United
States federal income tax purposes (C) to use its best efforts to cause
each Holder of the Trust Securities to be treated as owning an
undivided beneficial interest in the Subordinated Debentures and (D)
not to cause, as sponsor of the Trust, or to permit, as Holder of the
Common Securities, the dissolution, liquidation or winding-up of the
Trust, except as provided in the Trust Agreement.
(q) Listing on an Exchange. If the Subordinated Debentures are
to be issued as a Global Debenture in connection with the distribution
of the Subordinated Debentures to the Holders of the Preferred
Securities upon a Dissolution Event (as hereinafter defined), the
Company will use its best efforts to list such Subordinated Debentures
on the New York Stock Exchange or on such other exchange as the
Preferred Securities are then listed.
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(r) Payment of Expenses. In connection with the offering, sale
and issuance of the Subordinated Debentures to the Property Trustee in
connection with the sale of the Trust Securities by the Trust, and the
operation of the Trust, the Company shall:
(i) pay all costs and expenses relating to the
offering, sale and issuance of the Subordinated Debentures,
including commissions to the underwriters payable pursuant to
the Underwriting Agreement dated March 12, 1999, among the
Company, the Trust and the underwriters named therein and
compensation of the Trustee under the Indenture in accordance
with the provisions of Section 7.06 of the Indenture;
(ii) pay all costs and expenses of the Trust
(including, but not limited to, costs and expenses relating to
the offering, sale and issuance of the Trust Securities
(including commissions to the underwriters in connection
therewith), the fees and expenses of the trustees of the
Trust, the costs and expenses relating to the operation of the
Trust; and
(iii) pay any and all taxes (other than United States
withholding taxes on payments made to holders of the Preferred
Securities) and all liabilities, costs and expenses with
respect to such taxes of the Trust.
(s) Dissolution Event. "Dissolution Event" means that as a
result of an election by the Company, the Trust is to be dissolved in
accordance with the Trust Agreement and the Subordinated Debentures
held by the Property Trustee are to be distributed to the Holders of
the Trust Securities pro rata in accordance with the Trust Agreement.
In connection with a Dissolution Event:
(i) Definitive Debentures may be presented to the
Trustee by the Property Trustee in exchange for a Global
Debenture in an aggregate principal amount equal to all
Definitive Debentures outstanding to be registered in the name
of the Depositary, or its nominee, and delivered by the
Trustee to the Depositary for crediting to the accounts of its
participants pursuant to the instructions of the
Administrative Trustees. The Company upon any such
presentation shall execute a Global Debenture in such
aggregate principal amount and deliver the same to the Trustee
for authentication and delivery in accordance with the
Indenture and this Officers' Certificate. Payments on the
Subordinated Debentures issued as a Global Debenture will be
made to the Depositary; and
(ii) if any Preferred Securities are held in non
book-entry certificated form, Definitive Debentures may be
presented to the Trustee by the Property Trustee and any
Preferred Security Certificate which represents Preferred
Securities other than Preferred Securities held by the
Depositary or its nominee ("Non Book-Entry Preferred
Securities") will be deemed to represent beneficial interests
in Subordinated Debentures presented to the Trustee by the
Property
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Trustee having an aggregate principal amount equal to the aggregate
liquidation amount of the Non Book-Entry Preferred Securities until
such Preferred Security Certificate is presented to the Registrar
for transfer or reissuance at which time such Preferred Security
Certificate will be canceled and a Subordinated Debenture registered
in the name of the Holder of the Preferred Security Certificate or
the transferee of the Holder of such Preferred Security Certificate
as the case may be, with an aggregate principal amount equal to the
aggregate liquidation amount of the Preferred Security Certificate
canceled will be executed by the Company and delivered to the
Trustee for authentication and delivery in accordance with the
Indenture and this Officers' Certificate. On issue of such
Subordinated Debentures, Subordinated Debentures with an equivalent
aggregate principal amount that were presented by the Property
Trustee to the Trustee will be deemed to have been canceled.
4. No Default. No Default or Event of Default has occurred and is
continuing.
Pursuant to Section 13.05 of the Indenture, we hereby state: that we
have read the covenants and conditions (and the definitions relating thereto) in
the Indenture with respect to the proposed action of the Trustee in
authenticating and delivering the Subordinated Debentures; that we have examined
such documents relating to the issuance of the Subordinated Debentures and have
made such other examination or investigation as is necessary to enable each of
us to express an informed opinion as to whether such covenants or conditions
have been complied with; and that in our opinion all such covenants and
conditions have been complied with.
[Signatures on the following page.]
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IN WITNESS WHEREOF, the undersigned have hereunto signed this
certificate on behalf of the Company as of this 17th day of March, 1999.
By: /s/ R. Keith Elliott
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Name: R. Keith Elliott
Title: Chief Executive Officer
By: /s/ Stuart C. Shears
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Name: Stuart C. Shears
Title: Assistant Treasurer