S&C Draft of May 10, 1996
EXHIBIT 1.1
ARMSTRONG WORLD INDUSTRIES, INC.
UNDERWRITING AGREEMENT
DEBT SECURITIES AND PREFERRED STOCK
, 1996
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From time to time, Armstrong World Industries, Inc., a Pennsylvania
corporation (the "Company"), may enter into one or more underwriting agreements
that provide for the sale of designated securities (the "Offered Securities") to
the several underwriters named therein. The standard provisions set forth
herein may be incorporated by reference in any such underwriting agreement (an
"Underwriting Agreement"). The Underwriting Agreement, including the provisions
incorporated therein by reference, is herein sometimes referred to as this
Agreement. Terms defined in the Underwriting Agreement are used herein as
therein defined.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement, including a prospectus, relating to,
among other securities, the Debt Securities and Preferred Stock and has filed
with, or transmitted for filing to, or shall promptly hereafter file with or
transmit for filing to, the Commission a prospectus supplement (the "Prospectus
Supplement") specifically relating to the Offered Securities pursuant to Rule
424 under the Securities Act of 1933, as amended (the "Securities Act"). The
term "Registration Statement" means the registration statement, including the
exhibits thereto, as amended to the date of this Agreement. The term "Basic
Prospectus" means the prospectus included in the Registration Statement. The
term "Prospectus" means the Basic Prospectus together with the Prospectus
Supplement. The term "preliminary prospectus" means a preliminary prospectus
supplement specifically relating to the Offered Securities, together with the
Basic Prospectus. As used herein, the terms "Basic Prospectus," "Prospectus"
and "preliminary prospectus" shall include in each case the documents, if any,
incorporated by reference therein. The terms "supplement," "amendment" and
"amend" as used herein shall include all documents deemed to be incorporated by
reference in the Prospectus that are filed subsequent to the date of the Basic
Prospectus by the Company with the Commission pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
The term "Contract Securities" means the Offered Securities that are
Debt Securities to be purchased pursuant to the delayed delivery contracts
substantially in the form of Schedule I hereto, with such changes therein as the
Company may approve (the "Delayed Delivery Contracts"). The term "Underwriters'
Securities" means the Offered Securities other than Contract Securities.
The term "Indenture" means the Indentures dated as of , 1996,
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and , 1996, by and between the Company and Mellon Bank, N.A., said
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Indentures governing the terms of the Senior Debt Securities and the
Subordinated Debt Securities, respectively. As used herein, the term "Indenture"
will apply to each Indenture both individually and collectively.
1. Representations and Warranties. The Company represents and
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warrants to and agrees with each of the Underwriters that:
(a) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect, and, to
the Company's knowledge after reasonable investigation, no proceedings for such
purpose are pending before or threatened by the Commission.
(b) (i) Each document, if any, filed or to be filed pursuant to the
Exchange Act and incorporated by reference in the Prospectus complied or will
comply when so filed in all material respects with the Exchange Act and the
applicable rules and regulations of the Commission thereunder, (ii) each part of
the Registration Statement, when such part became effective, did not contain,
and each such part, as amended or supplemented, if applicable, will not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, (iii) the Registration Statement and the Prospectus comply, and, as
amended or supplemented, if applicable, will comply in all material respects
with the Securities Act and the applicable rules and regulations of the
Commission thereunder and (iv) the Prospectus does not contain and, as amended
or supplemented, if applicable, will not contain any 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 representations and warranties set forth in this
Section 1(b) do not apply (A) to statements or omissions in the Registration
Statement or the Prospectus based upon information furnished to the Company in
writing by any such Underwriter through the Manager expressly for use therein or
(B) to that part of the Registration Statement that constitutes the Statement of
Eligibility (Form T-1) under the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"), of the Trustee.
(c) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property and to
conduct its business as described in the Prospectus and is duly qualified to
transact
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business and is in good standing in each jurisdiction in which the conduct
of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be in
good standing would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(d) Each "significant subsidiary" (as that term is used in Rule
1-02(w) of Regulation S-X under the Securities Act) (a "Material Subsidiary") of
the Company has been duly incorporated, is validly existing as a corporation in
good standing under the laws of the jurisdiction of its incorporation, has the
corporate power and authority to own its property and to conduct its business as
described in the Prospectus and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing would not have
a material adverse effect on the Company and its subsidiaries, taken as a whole.
(e) This Agreement has been duly authorized, executed and delivered by
the Company.
(f) The Indenture has been duly qualified under the Trust Indenture
Act and has been duly authorized, executed and delivered by the Company and is a
valid and binding agreement of the Company, enforceable in accordance with its
terms except as (i) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and (ii) rights
of acceleration and the availability of equitable remedies may be limited by
equitable principles of general applicability.
(g) The Delayed Delivery Contracts have been duly authorized,
executed and delivered by the Company and are valid and binding agreements of
the Company, enforceable in accordance with their respective terms except as (i)
the enforceability thereof may be limited by bankruptcy, insolvency or similar
laws affecting creditors' rights generally and (ii) the availability of
equitable remedies may be limited by equitable principles of general
applicability.
(h) If the Offered Securities are Debt Securities, such Debt
Securities have been duly authorized and, when executed and authenticated in
accordance with the provisions of the Indenture and delivered to and paid for by
the Underwriters in accordance with the terms of the Underwriting Agreement, in
the case of the Underwriters' Securities, or by institutional investors in
accordance with the terms of the Delayed Delivery Contracts, in the case of the
Contract Securities, will be entitled to the benefits
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of the Indenture and will be valid and binding obligations of the Company
enforceable in accordance with their terms except as (i) the enforceability
thereof may be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and (ii) rights of acceleration, if any, and the
availability of equitable remedies may be limited by equitable principles of
general applicability.
(i) If the Offered Securities are Preferred Stock, such Preferred
Stock has been duly authorized and, when delivered to and paid for by the
Underwriters in accordance with the terms of the Underwriting Agreement, will
have been validly issued, fully paid and nonassessable and the shareholders of
the Company have no preemptive rights with respect to the Preferred Stock.
(j) The execution and delivery by the Company of, and the performance
by the Company of its obligations under, this Agreement, the Indenture, the
Offered Securities, and the Delayed Delivery Contracts will not contravene any
provision of applicable law or the articles of incorporation or by-laws of the
Company or any agreement or other instrument binding upon the Company or any of
its subsidiaries that is material to the Company and its subsidiaries, taken as
a whole, or any judgment, order or decree of any governmental body, agency or
court having jurisdiction over the Company or any subsidiary, and no consent,
approval, authorization or order of, or qualification with, any governmental
body or agency is required for the performance by the Company of its obligations
under this Agreement, the Indenture, the Offered Securities, or the Delayed
Delivery Contracts, except such as may be required by Rule 424(b) under the
Securities Act or the securities or Blue Sky laws of the various states in
connection with the offer and sale of the Offered Securities.
(k) There has not occurred any material adverse change, or, to the
Company's knowledge, any development involving a prospective material adverse
change, in the condition, financial or otherwise, or in the earnings, business
or operations of the Company and its subsidiaries, taken as a whole, from that
set forth in the Prospectus (exclusive of any amendments or supplements thereto
subsequent to the date of this Agreement).
(l) There are no legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is a party or to
which any of the properties of the Company or any of its subsidiaries is subject
that are required to be described in the Registration Statement or the
Prospectus and are not so described or any statutes, regulations, contracts or
other documents that are required to be described in the Registration Statement
or the Prospectus or to be filed or incorporated by reference as exhibits to the
Registration Statement
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that are not described, filed or incorporated as required.
(m) Each preliminary prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the Securities Act, complied when so filed in all
material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder.
(n) The Company is not an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended.
(o) The Company has complied with all provisions of Section 517.075,
Florida Statutes relating to doing business with the Government of Cuba or with
any person or affiliate located in Cuba.
2. Delayed Delivery Contracts. If the Prospectus provides for sales
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of Offered Securities pursuant to Delayed Delivery Contracts, the Company hereby
authorizes the Underwriters to solicit offers to purchase Contract Securities on
the terms and subject to the conditions set forth in the Prospectus pursuant to
Delayed Delivery Contracts. Delayed Delivery Contracts may be entered into only
with institutional investors approved by the Company of the types set forth in
the Prospectus. On the Closing Date, the Company will pay to the Manager as
compensation for the accounts of the Underwriters the commission set forth in
the Underwriting Agreement in respect of the Contract Securities. The
Underwriters will not have any responsibility in respect of the validity or the
performance of any Delayed Delivery Contracts.
If the Company executes and delivers Delayed Delivery Contracts with
institutional investors, the aggregate amount of Offered Securities to be
purchased by the several Underwriters shall be reduced by the aggregate amount
of Contract Securities; such reduction shall be applied to the commitment of
each Underwriter pro rata in proportion to the amount of Offered Securities set
forth opposite such Underwriter's name in the Underwriting Agreement, except to
the extent that the Manager determines that such reduction shall be applied in
other proportions and so advises the Company; provided, however, that the total
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amount of Offered Securities to be purchased by all Underwriters shall be the
aggregate amount set forth above, less the aggregate amount of Contract
Securities.
3. Terms of Public Offering. The Company is advised by the Manager
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that the Underwriters propose to make a public offering of their respective
portions of the Underwriters' Securities as soon after this Agreement has been
entered into as in the Manager's
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judgment is advisable. The terms of the public offering of the Underwriters'
Securities are set forth in the Prospectus.
4. Payment and Delivery. Except as otherwise provided in this
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Section 4, payment for the Underwriters' Securities shall be made by check or
wire transfer payable to the order of the Company in federal (same day) funds at
the time and place set forth in the Underwriting Agreement, upon delivery to the
Manager for the respective accounts of the several Underwriters of the
Underwriters' Securities registered in such names and in such denominations as
the Manager shall request in writing not less than two full business days prior
to the date of delivery, with any transfer taxes payable in connection with the
transfer of the Underwriters' Securities to the Underwriters duly paid.
5. Conditions to the Underwriters' Obligations. The several
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obligations of the Underwriters are subject to the following conditions:
(a) Subsequent to the execution and delivery of the Underwriting
Agreement and prior to the Closing Date:
(i) there shall not have occurred any downgrading, nor shall
any notice have been given of any intended or potential downgrading or
of any review for a possible change that does not indicate the
direction of the possible change, in the rating accorded any of the
Company's securities by any "nationally recognized statistical rating
organization," as such term is defined for purposes of Rule 436(g)(2)
under the Securities Act; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or operations of
the Company and its subsidiaries, taken as a whole, from that set
forth in the Prospectus (exclusive of any amendments or supplements
thereto subsequent to the date of this Agreement) that, in the
reasonable judgment of the Manager, is material and adverse and that
makes it, in the reasonable judgment of the Manager, impracticable to
market the Offered Securities on the terms and in the manner
contemplated in the Prospectus.
(b) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer of
the Company, to the effect set forth in clause (a)(i) above and to the
effect that the representations and warranties of the Company contained in
this Agreement are true and correct as of the Closing Date and that the
Company
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has complied with all of the agreements and satisfied all of the conditions
on its part to be performed or satisfied hereunder on or before the Closing
Date.
The officer signing and delivering such certificate may rely upon the
best of his or her knowledge as to proceedings threatened.
(c) The Underwriters shall have received on the Closing Date an
opinion of Buchanan Ingersoll Professional Corporation, outside counsel for
the Company, dated the Closing Date, substantially to the effect that:
(i) the Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as described
in the Prospectus.
(ii) this Agreement has been duly authorized, executed and
delivered by the Company;
(iii) the Indenture has been duly qualified under the Trust
Indenture Act and has been duly authorized, executed and delivered by
the Company and is a valid and binding agreement of the Company,
enforceable in accordance with its terms except as (a) the
enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (b) rights of
acceleration and the availability of equitable remedies may be limited
by equitable principles of general applicability;
(iv) the Delayed Delivery Contracts have been duly
authorized, executed and delivered by the Company and are valid and
binding agreements of the Company, enforceable in accordance with
their respective terms except as (a) the enforceability thereof may be
limited by bankruptcy, insolvency or similar laws affecting creditors'
rights generally and (b) the availability of equitable remedies may be
limited by equitable principles of general applicability;
(v) if the Offered Securities are Debt Securities, such Debt
Securities have been duly authorized and, when executed and
authenticated in accordance with the provisions of the Indenture and
delivered to and paid for by the Underwriters in accordance with the
terms of the Underwriting Agreement,
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in the case of Underwriters' Securities, or by institutional investors
in accordance with the terms of the Delayed Delivery Contracts, in the
case of the Contract Securities, will be entitled to the benefits of
the Indenture, will conform to the description thereof contained in
the Prospectus and the Indenture and will be valid and binding
obligations of the Company enforceable in accordance with their terms
except as (a) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and
(b) rights of acceleration, if any, and the availability of equitable
remedies may be limited by equitable principles of general
applicability;
(vi) if the Offered Securities are Preferred Stock, such
Preferred Stock has been duly authorized and, when delivered to and
paid for by the Underwriters in accordance with the terms of the
Underwriting Agreement, such Preferred Stock will have been validly
issued, fully paid and nonassessable, will conform to the description
thereof contained in the Prospectus and the shareholders of the
Company have no preemptive rights with respect to the Preferred Stock.
(vii) the statements in the Prospectus under the captions
"Description of Debt Securities", "Description of Depositary Shares",
and "Description of Preferred Stock" fairly present the information
called for and fairly summarize the matters referred to therein;
(viii) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement,
the Indenture, the Offered Securities and the Delayed Delivery
Contracts will not contravene any provision of applicable law (except
to the extent that the federal securities laws may limit or restrict
any indemnification provisions set forth in this Agreement) or the
articles of incorporation or by-laws of the Company, and no consent,
approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by the
Company of its obligations under this Agreement, the Indenture, the
Offered Securities or the Delayed Delivery Contract, except for the
registration of the Offered Securities under the Securities Act and
except such as may be required by Rule 424(b) under the Securities Act
or the securities or Blue Sky laws of the various states in connection
with the offer and sale of the Offered Securities;
(ix) such counsel is of the opinion ascribed to it in the
Prospectus under the caption "Taxation";
(x) the Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in
the Investment Company Act of
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1940, as amended; and
(xi) such counsel (A) is of the opinion that the
Registration Statement and the Prospectus and any further amendments
and supplements thereto made by the Company prior to the delivery of
the Offered Securities (other than the financial statements and
related schedules and other financial data therein) comply as to form
in all material respects with the requirements of the Securities Act
and the Exchange Act, as the case may be, and the rules and
regulations thereunder, and (B) is of the further opinion that,
although such counsel (i) is not passing upon and does not assume any
responsibility for the accuracy or completeness of the statements
contained in the Registration Statement or the Prospectus, and (ii)
has not made an independent investigation of facts for the purpose of
rendering its opinion, during the course of preparation of the
Registration Statement and the Prospectus, nothing came to such
counsel's attention which would cause them to believe that the
Registration Statement, at the time it became effective and as amended
or supplemented, contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or
necessary to make the statements therein not misleading or that the
Prospectus, as of the date of the Prospectus and as of the date such
opinion is delivered, contains any untrue statement of a material fact
or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that such counsel need
not express any opinion as to (1) that part of the Registration
Statement which constitutes the Statement of Eligibility (Form T-1
under the Trust Indenture Act) of the Trustee, (2) the financial
statements, including the notes and schedules thereto, and any
financial data contained or referred to in, or incorporated by
reference in, the Registration Statement or the Prospectus, or (3) the
information contained in or omitted from the Registration Statement or
Prospectus in reliance upon and in conformity with written information
furnished to the Company relating to any Underwriter by or on behalf
of any of the Underwriters for use in connection with the preparation
of the Registration Statement or the Prospectus.
In rendering its opinion, Buchanan Ingersoll Professional Corporation may
rely (i) as to matters of New York law, on the opinion of Sullivan &
Cromwell referred to in Section 5(e) hereof, and (ii) as to factual
matters, on certificates of
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officers of the Company and its subsidiaries and on certificates of public
officials.
(d) The Underwriters shall have received on the Closing Date an
opinion of the General Counsel of the Company, dated the Closing Date, to
the effect that:
(i) each Material Subsidiary is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its
property and to conduct its business as described in the Prospectus;
and each of the Company and each of its Material Subsidiaries is duly
qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent
that the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company and its subsidiaries,
taken as a whole;
(ii) the statements (A) in the Registration Statement
under Item 15, (B) in "Item 3 - Legal Proceedings" of the Company's
most recent annual report on Form 10-K incorporated by reference in
the Prospectus and (C) in "Item 1 - Legal Proceedings" of Part II of
the Company's quarterly reports on Form 10-Q, if any, filed since such
annual report, in each case insofar as such statements constitute
summaries of the legal matters, documents or proceedings referred to
therein, and, in each case, as modified by any subsequently filed
Current Report on Form 8-K, and in the Prospectus under "Recent
Developments", fairly present the information called for with respect
to such legal matters, documents and proceedings and fairly summarize
the matters referred to therein;
(iii) after due inquiry, such counsel does not know of any
legal or governmental proceedings pending or threatened to which the
Company or any of its Material Subsidiaries is a party or to which any
of the properties of the Company or any of its Material Subsidiaries
is subject that are required to be described in the Registration
Statement or the Prospectus and are not so described or of any
statutes, regulations, contracts or other documents that are required
to be described in the Registration Statement or the Prospectus or to
be filed or incorporated by reference as exhibits to the Registration
Statement that are not described, filed or incorporated as required;
and
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(iv) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement,
the Indenture, the Offered Securities and the Delayed Delivery
Contracts will not contravene any provision of the articles of
incorporation or by-laws of the Company or, to the best of such
counsel's knowledge, any agreement or other instrument binding upon
the Company or any of its subsidiaries that is material to the Company
and its subsidiaries, taken as a whole, or, to the best of such
counsel's knowledge, any judgment, order or decree of any governmental
body, agency or court having jurisdiction over the Company or any
subsidiary.
With respect to the subparagraph (xi) of paragraph (c) above,
Buchanan Ingersoll may state that their opinion and belief are based upon
their participation in the preparation of the Registration Statement and
Prospectus and any amendments or supplements thereto and documents
incorporated therein by reference and review and discussion of the contents
thereof, but are without independent check or verification, except as
specified.
The opinion of Buchanan Ingersoll described in paragraph (c)
above shall be rendered to the Underwriters at the request of the Company
and shall so state therein.
(e) The Underwriters shall have received on the Closing Date an
opinion of Sullivan & Cromwell, counsel for the Underwriters, dated the
Closing Date, covering the matters referred to in subparagraphs (ii),
(iii), (iv), (v) and (vi) of paragraph (c) above. In rendering such
opinion, Sullivan & Cromwell may rely as to the incorporation of the
Company and all other matters of Pennsylvania law upon the opinion of
Buchanan Ingersoll referred to in paragraph (c) above. The Underwriter
also shall have received a letter from Sullivan & Cromwell to the effect
that each part of the Registration Statement and the Prospectus, as of the
effective date of such part, appeared on its face to be appropriately
responsive in all material respects to the requirements of the Act, the
Trust Indenture Act and the applicable rules and regulations
11
of the Commission thereunder; and nothing that came to such counsel's
attention in the course of their review of the Registration Statement and
Prospectus has caused such counsel to believe that the Registration
Statement, as of its effective date, or the Prospectus, as of the date of
the Prospectus, contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or
necessary to make the statements therein not misleading; and nothing that
has come to such counsel's attention in the course of the limited
procedures described in such letter has caused them to believe that the
Prospectus, as of the date and time of delivery of such letter, contained
any untrue statement of a material fact or omitted to state any material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. Such counsel may
state that they do not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectus except for those made under the captions
"Description of Debt Securities" and "Description of Preferred Stock" in
the Prospectus insofar as they related to provisions of documents therein
described and that they do not express any opinion or belief as to the
financial statements or other financial data contained in the Registration
Statement or the Prospectus, or as to the statement of the eligibility of
the Trustee.
(f) The Underwriters shall have received on the Closing Date a
letter, dated the Closing Date, in form and substance satisfactory to the
Underwriters, from the Company's independent public accountants, containing
statements and information of the type ordinarily included in accountants'
"comfort letters" to underwriters with respect to the financial statements
and certain financial information contained in or incorporated by reference
into the Prospectus.
6. Covenants of the Company. In further consideration of the
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agreements of the Underwriters herein contained, the Company covenants with each
Underwriter as follows:
(a) To furnish the Manager, without charge, 2 signed copies of the
Registration Statement (including exhibits thereto) and for delivery to
each other Underwriter a conformed copy of the Registration Statement
(without exhibits thereto) and, during the period mentioned in paragraph
(c) below, as many copies of the Prospectus, any documents incorporated by
reference therein and any supplements and amendments thereto or to the
Registration Statement as the Manager may reasonably request.
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(b) Before amending or supplementing the Registration Statement or
the Prospectus with respect to the Offered Securities, to furnish to the
Manager a copy of each such proposed amendment or supplement and not to
file any such proposed amendment or supplement to which the Manager
reasonably objects.
(c) If, during such period after the first date of the public
offering of the Offered Securities as the Prospectus is required by law to
be delivered in connection with sales by an Underwriter or dealer, any
event shall occur or condition exist as a result of which it is necessary
to amend or supplement the Prospectus in order to make the statements
therein, in the light of the circumstances when the Prospectus is delivered
to a purchaser, not misleading, or if it is necessary to amend or
supplement the Prospectus to comply with applicable law, the Company will
forthwith prepare and file with the Commission and furnish, at its own
expense, to the Underwriters and to the dealers (whose names and addresses
the Manager will furnish to the Company) to which Offered Securities may
have been sold by the Manager on behalf of the Underwriters and to any
other dealers upon request, either amendments or supplements to the
Prospectus so that the statements in the Prospectus as so amended or
supplemented will not, in the light of the circumstances when the
Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus, as amended or supplemented, will comply with applicable law.
(d) To cooperate with Underwriter's counsel to qualify the Offered
Securities for offer and sale under the securities or Blue Sky laws of such
jurisdictions as the Manager shall reasonably request and to maintain such
qualification for as long as the Manager shall reasonably request; provided
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that in connection therewith the Company shall not be required to qualify
as a foreign corporation or file a general consent to service of process in
any jurisdiction.
(e) To make generally available to the Company's security holders and
to the Manager as soon as practicable an earning statement covering a
twelve month period beginning on the first day of the first full fiscal
quarter after the date of this Agreement, which earning statement shall
satisfy the provisions of Section 11(a) of the Securities Act and the rules
and regulations of the Commission thereunder. If such fiscal quarter is
the last fiscal quarter of the Company's fiscal year, such earning
statement shall be made available not later than 90 days after the close of
the period covered thereby and in all other cases shall be made available
not later than 45 days after the close of the period covered
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thereby.
(f) During the period beginning on the date of the Underwriting
Agreement and continuing to and including the Closing Date, not to offer,
sell, contract to sell or otherwise dispose of any preferred stock of the
Company (if the Offered Securities are preferred stock) or debt securities
of the Company (if the Offered Securities are Debt Securities) or warrants
to purchase preferred stock or debt securities of the Company, as the case
may be, substantially similar to the Offered Securities (other than (i) the
Offered Securities, (ii) commercial paper issued in the ordinary course of
business, and (iii) the Company's ESOP Preferred Stock and the Series One
Preferred Stock issuable pursuant to the Company's Rights Plan, as
defined), without the prior written consent of the Manager.
(g) To pay all expenses incident to the performance of its obligations
under this Agreement, including: (i) the preparation and filing of the
Registration Statement and the Prospectus and all amendments and
supplements thereto; (ii) the preparation, issuance and delivery of the
Offered Securities; (iii) the fees and disbursements of the Company's
counsel and accountants and of the Trustee and its counsel; (iv) the
qualification of the Offered Securities under state securities or Blue Sky
laws in accordance with the provisions of Section 6(d), including filing
fees and the fees and disbursements of counsel for the Underwriters in
connection therewith and in connection with the preparation of any Blue Sky
or Legal Investment Memoranda; (v) the printing and delivery to the
Underwriters in quantities as hereinabove stated of copies of the
Registration Statement and all amendments thereto and of any preliminary
prospectus and the Prospectus and any amendments or supplements thereto;
(vi) the printing and delivery to the Underwriters of copies of any Blue
Sky or Legal Investment Memoranda; (vii) any fees charged by rating
agencies for the rating of the Offered Securities; (viii) the filing fees
and expenses, if any, incurred with respect to any filing with the National
Association of Securities Dealers, Inc. made in connection with the Offered
Securities; (ix) all document production charges and expenses of counsel to
the Underwriters incurred in connection with the preparation of this
Agreement and the Indenture.
7. Indemnification and Contribution. (a) The Company agrees to
--------------------------------
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other
14
expenses reasonably incurred by any Underwriter or any such controlling person
in connection with defending or investigating any such action or claim) caused
by any untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement or any amendment thereof, any preliminary
prospectus or the Prospectus (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto), or caused by any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, (A) except
insofar as such losses, claims, damages or liabilities are caused by any such
untrue statement or omission or alleged untrue statement or omission based upon
information relating to any Underwriter furnished to the Company in writing by
such Underwriter through the Manager expressly for use therein, or (B) except
that the Company shall not be liable to any Underwriter under this Section 7 to
the extent that any such loss, claim, liability or judgment results solely from
an untrue statement of a material fact contained in, or the omission of a
material fact from, a preliminary Prospectus if such untrue statement or
omission was completely corrected in the applicable Prospectus Supplement prior
to the written confirmation of the sale of the Offered Securities giving rise to
such loss, claim, liability or judgment if the Company shall sustain the burden
of proving (x) that such Underwriter sold the Offered Securities to the person
alleging such loss, claim, damage or liability without sending or giving the
applicable Prospectus Supplement at or prior to the time of written confirmation
of the sale of the Offered Securities giving rise to such loss, claim, liability
or judgment, (y) that the Company had furnished copies of the applicable
Prospectus Supplement to such Underwriter reasonably prior to the written
confirmation of such sale, and (z) such Underwriter would not have been subject
to such liability if it had delivered the applicable Prospectus Supplement to
such person at or prior to the time of written confirmation of such sale.
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers who sign the
Registration Statement and each person, if any, who controls the Company within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act to the same extent as the foregoing indemnity from the Company to
such Underwriter, but only with reference to information relating to such
Underwriter furnished to the Company in writing by such Underwriter through the
Manager expressly for use in the Registration Statement, any preliminary
prospectus, the Prospectus or any amendments or supplements thereto.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to either paragraph (a)
15
or (b) of this Section 7, such person (the "indemnified party") shall promptly
notify the person against whom such indemnity may be sought (the "indemnifying
party") in writing and the indemnifying party, upon request of the indemnified
party, shall retain counsel reasonably satisfactory to the indemnified party to
represent the indemnified party and any others the indemnifying party may
designate in such proceeding and shall pay the fees and disbursements of such
counsel related to such proceeding. In any such proceeding, any indemnified
party shall have the right to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to the
retention of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them.
It is understood that the indemnifying party shall not, in respect of the legal
expenses of any indemnified party in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the fees and expenses of
more than one separate firm (in addition to any local counsel) for all such
indemnified parties and that all such fees and expenses shall be reimbursed as
they are incurred. Such firm shall be designated in writing by the Manager, in
the case of parties indemnified pursuant to paragraph (a) above, and by the
Company, in the case of parties indemnified pursuant to paragraph (b) above.
The indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any pending
or threatened proceeding in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such proceeding.
(d) To the extent the indemnification provided for in paragraph (a)
or (b) of this Section 7 is unavailable to an indemnified party or insufficient
in respect of any losses, claims, damages or liabilities referred to therein,
then each indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the
16
Company on the one hand and the Underwriters on the other hand from the offering
of the Offered Securities or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the Company on the one hand and of the Underwriters on the
other hand in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Underwriters on the other hand in connection with the offering of the
Offered Securities shall be deemed to be in the same respective proportions as
the net proceeds from the offering of such Offered Securities (before deducting
expenses) received by the Company and the total underwriting discounts and
commissions received by the Underwriters, in each case as set forth in the table
on the cover of the Prospectus Supplement, bear to the aggregate public offering
price of the Offered Securities. The relative fault of the Company on the one
hand and the Underwriters on the other hand shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Underwriters' respective obligations to
contribute pursuant to this Section 7 are several in proportion to the
respective principal amounts of Offered Securities they have purchased
hereunder, and not joint.
(e) The Company and the Underwriters agree that it would not be just
or equitable if contribution pursuant to this Section 7 were determined by pro
---
rata allocation (even if the Underwriters were treated as one entity for such
- ----
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in paragraph (d) of this Section 7. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Offered Securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages that such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning
17
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
remedies provided for in this Section 7 are not exclusive and shall not limit
any rights or remedies which may otherwise be available to any indemnified party
at law or in equity.
(f) The indemnity and contribution provisions contained in this
Section 7 and the representations, warranties and other statements of the
Company contained in this Agreement shall remain operative and in full force and
effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of any Underwriter or any person controlling
any Underwriter or the Company, its officers or directors or any person
controlling the Company and (iii) acceptance of and payment for any of the
Offered Securities.
8. Termination. This Agreement shall be subject to termination by
-----------
notice given by the Manager to the Company, if (a) after the execution and
delivery of the Underwriting Agreement and prior to the Closing Date (i) trading
generally shall have been suspended or materially limited on or by, as the case
may be, any of the New York Stock Exchange, the American Stock Exchange or the
National Association of Securities Dealers, Inc., (ii) trading of any securities
of the Company shall have been suspended on any exchange or in any over-the-
counter market, (iii) a general moratorium on commercial banking activities in
New York shall have been declared by either Federal or New York State
authorities or (iv) there shall have occurred any outbreak or escalation of
hostilities or any change in financial markets or any calamity or crisis that,
in the reasonable judgment of the Manager, is material and adverse and (b) in
the case of any of the events specified in clauses (a)(i) through (iv), such
event, singly or together with any other such event, makes it, in the reasonable
judgment of the Manager, impracticable to market the Offered Securities on the
terms and in the manner contemplated in the Prospectus.
9. Defaulting Underwriters. If, on the Closing Date, any one or more
-----------------------
of the Underwriters shall fail or refuse to purchase Underwriters' Securities
that it has or they have agreed to purchase hereunder on such date, and the
aggregate principal amount (if Debt Securities) or number of shares (if
Preferred Stock) of Underwriters' Securities which such defaulting Underwriter
or Underwriters agreed but failed or refused to purchase is not more than one-
tenth of the aggregate principal amount (if Debt Securities) or number of shares
(if Preferred Stock) of the Underwriters' Securities to be purchased on such
date, the other Underwriters shall be obligated severally in the proportions
that the principal amount (if Debt Securities) or number of shares (if Preferred
Stock) of Underwriters' Securities
18
set forth opposite their respective names in the Underwriting Agreement bears to
the aggregate principal amount (if Debt Securities) or number of shares (if
Preferred Stock) of Underwriters' Securities set forth opposite the names of all
such non-defaulting Underwriters, or in such other proportions as the Manager
may specify, to purchase the Underwriters' Securities which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase on such
date; provided that in no event shall the principal amount (if Debt Securities)
--------
or number of shares (if Preferred Stock) of Underwriters' Securities that any
Underwriter has agreed to purchase pursuant to this Agreement be increased
pursuant to this Section 9 by an amount in excess of one-ninth of such principal
amount (if Debt Securities) or number of shares (if Preferred Stock) of
Underwriters' Securities without the written consent of such Underwriter. If,
on the Closing Date, any Underwriter or Underwriters shall fail or refuse to
purchase Underwriters' Securities and the aggregate principal amount (if Debt
Securities) or number of shares (if Preferred Stock) of Underwriters' Securities
with respect to which such default occurs is more than one-tenth of the
aggregate principal amount (if Debt Securities) or number of shares (if
Preferred Stock) of Underwriters' Securities to be purchased on such date, and
arrangements satisfactory to the Manager and the Company for the purchase of
such Underwriters' Securities are not made within 36 hours after such default,
this Agreement shall terminate without liability on the part of any non-
defaulting Underwriter or the Company. In any such case either the Manager or
the Company shall have the right to postpone the Closing Date, but in no event
for longer than seven days, in order that the required changes, if any, in the
Registration Statement and in the Prospectus or in any other documents or
arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder.
10. Counterparts. This Agreement may be signed in two or more
------------
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the
19
same instrument.
11. Applicable Law. This Agreement shall be governed by and
--------------
construed in accordance with the internal laws of the State of New York.
12. Headings. The headings of the sections of this Agreement have
--------
been inserted for convenience of reference only and shall not be deemed a part
of this Agreement.
20
UNDERWRITING AGREEMENT
, 1996
-----------
Armstrong World Industries, Inc.
313 West Liberty Street
Lancaster, Pennsylvania 17603
Dear Sirs and Mesdames:
We (the "Manager") are acting on behalf of the underwriter or
underwriters (including ourselves) named below (such underwriter or underwriters
being herein called the "Underwriters"), and we understand that Armstrong World
Industries, Inc., a Pennsylvania corporation (the "Company"), proposes to issue
and sell [[Currency and Principal Amount] aggregate initial offering price of
[Full title of Debt Securities]] [No. of Shares of [Full Title of Preferred
Stock ("Preferred Stock")]] the "Offered Securities.") [The Debt Securities
will be issued pursuant to the provisions of an Indenture dated as of
, 199 (the "Indenture") between the Company and [NAME OF
- ------------------- -
TRUSTEE], as Trustee (the "Trustee").]
Subject to the terms and conditions set forth or incorporated by
reference herein, the Company hereby agrees to sell to the several Underwriters,
and each Underwriter agrees, severally and not jointly, to purchase from the
Company the principal amount of Debt Securities set forth below opposite their
names at a purchase price of [ % of the principal amount of Debt Securities]
----
[ , plus accrued interest, if any, from [Date of Offered Securities] to the
----
date of payment and delivery]* [the number of shares of Preferred Stock set
forth below opposite their names at a purchase price of per share]:
--------
- ---------------
* To be added only if the transaction does not close "flat" (i.e., when the
purchaser pays accrued interest on the debt security at closing). Unless
otherwise provided in the Debt Securities, accrued interest, if any, will
be computed on the basis of a 360-day year of twelve 30-day months.
[Principal Amount of Debt Securities]
Name [Number of Shares of Preferred Stock]
---- ------------------------------------
Morgan Stanley & Co.
Incorporated
Morgan Stanley & Co. International Limited
[Insert syndicate list]
Total . . . . . . . .
[The principal amount of Debt Securities to be purchased by the
several Underwriters shall be reduced by the aggregate principal amount of Debt
Securities sold pursuant to delayed delivery contracts.]**
The Underwriters will pay for the Offered Securities [(less any
Offered Securities sold pursuant to delayed delivery contracts)] upon delivery
thereof at [office] at a.m. (New York time) on , 199 , or at
------ ---------- -
such other time, not later than 5:00 p.m. (New York time) on , 199 ,
--------- -
as shall be designated by the Manager. The time and date of such payment and
delivery are hereinafter referred to as the Closing Date.***
- -----------------
** To be added only if delayed delivery contracts are contemplated in the case
of Debt Securities.
*** This paragraph would have to be modified for any Offered Securities that
are to be issued in bearer form.
2
The Offered Securities shall have the terms set forth in the
Prospectus dated , 199 , and the Prospectus Supplement dated
----------- -
, 199 , including the following:
- ------------ -
[Terms of Debt Securities
Maturity Date:
Interest Rate:
Redemption Provisions:
Interest Payment Dates: and
------------ --
commencing
------------ --
,
------------ -- ----
[(Interest accrues from
, )]****
-------- -- ----
Form and Denomination:
[Other Terms:]]
[Terms of Preferred Stock
Title:
Number of Shares:
Dividend Rate:
Optional Redemption:
Sinking Fund:
Listing: [None.] [ Stock Exchange.]]
[The commission to be paid to the Underwriters in respect of the
Offered Securities purchased pursuant to delayed delivery contracts arranged by
the Underwriters shall be % of the principal amount of the Debt Securities so
---
purchased.]*****
All provisions contained in the document entitled Armstrong World
Industries, Inc. Underwriting Agreement Standard Provisions
- ---------------
**** To be added only if the transaction does not close flat.
***** To be added only if delayed delivery contracts are contemplated.
3
(Debt Securities and Preferred Stock) dated _______, 1996, a copy of which is
attached hereto, are herein incorporated by reference in their entirety and
shall be deemed to be a part of this Agreement to the same extent as if such
provisions had been set forth in full herein, except that (i) if any term
defined in such document is otherwise defined herein, the definition set forth
herein shall control, (ii) all references in such document to a type of security
that is not an Offered Security shall not be deemed to be a part of this
Agreement, and (iii) all references in such document to a type of agreement that
has not been entered into in connection with the transactions contemplated
hereby shall not be deemed to be a part of this Agreement.
4
[SIGNATURE PAGE WHERE MORGAN STANLEY & CO. INCORPORATED
-------------------------------------------------------
OR MORGAN STANLEY & CO. INTERNATIONAL LIMITED
---------------------------------------------
IS A CO-LEAD MANAGER]
---------------------
Please confirm your agreement by having an authorized officer sign a
copy of this Agreement in the space set forth below.
Very truly yours,
[MORGAN STANLEY & CO. INCORPORATED]
[MORGAN STANLEY & CO. INTERNATIONAL LIMITED]
[Name of Other Lead Managers]
Acting severally on behalf of themselves
and the several Underwriters named herein
By: [MORGAN STANLEY & CO. INCORPORATED]
[MORGAN STANLEY & CO. INTERNATIONAL LIMITED]
By:
--------------------------------
Name:
Title:
Accepted:
Armstrong World Industries, Inc.
By:
-------------------------------
Name:
Title:
5
SIGNATURE PAGE WHERE MORGAN STANLEY & CO. INCORPORATED
------------------------------------------------------
OR MORGAN STANLEY & CO. INTERNATIONAL LIMITED
---------------------------------------------
IS SOLE MANAGER]
----------------
Please confirm your agreement by having an authorized officer sign a
copy of this Agreement in the space set forth below.
Very truly yours,
[MORGAN STANLEY & CO. INCORPORATED]
[MORGAN STANLEY & CO. INTERNATIONAL LIMITED]
Acting severally on behalf of itself
and the several Underwriters named herein
By:
------------------------------
Name:
Title:
Accepted:
Armstrong World Industries, Inc.
By:
-----------------------------
Name:
Title:
6
Schedule I
DELAYED DELIVERY CONTRACT
, 199
-------- -
Dear Sirs and Mesdames:
The undersigned hereby agrees to purchase from Armstrong World
Industries, Inc., a Pennsylvania corporation (the "Company"), and the Company
agrees to sell to the undersigned the Company's securities described in Schedule
A annexed hereto (the "Securities"), offered by the Company's Prospectus dated
, 19 and Prospectus Supplement dated , 19 ,
- ------------------ -- ---------------- --
receipt of copies of which are hereby acknowledged, at a purchase price stated
in Schedule A and on the further terms and conditions set forth in this
Agreement. The undersigned does not contemplate selling Securities prior to
making payment therefor.
The undersigned will purchase from the Company Securities in the
principal amount and numbers on the delivery dates set forth in Schedule A.
Each such date on which Securities are to be purchased hereunder is hereinafter
referred to as a "Delivery Date."
Payment for the Securities which the undersigned has agreed to
purchase on each Delivery Date shall be made to the Company or its order by
certified or official bank check in New York Clearing House funds at the office
of , New York, N.Y., at 10:00 A.M. (New York time)
------------------------------
on the Delivery Date, upon delivery to the undersigned of the Securities to be
purchased by the undersigned on the Delivery Date, in such denominations and
registered in such names as the undersigned may designate by written or
telegraphic communication addressed to the Company not less than five full
business days prior to the Delivery Date.
The obligation of the undersigned to take delivery of and make payment
for the Securities on the Delivery Date shall be subject to the conditions that
(1) the purchase of Securities to be
1
made by the undersigned shall not at the time of delivery be prohibited under
the laws of the jurisdiction to which the undersigned is subject and (2) the
Company shall have sold, and delivery shall have taken place to the underwriters
(the "Underwriters") named in the Prospectus Supplement referred to above of,
such part of the Securities as is to be sold to them. Promptly after completion
of sale and delivery to the Underwriters, the Company will mail or deliver to
the undersigned as its address set forth below notice to such effect,
accompanied by a copy of the opinion of counsel for the Company delivered to the
Underwriters in connection therewith.
Failure to take delivery of and make payment for Securities by any
purchaser under any other Delayed Delivery Contract shall not relieve the
undersigned of its obligations under this agreement.
This Agreement will inure to the benefit of and be binding upon the
parties hereto and their respective successors, but will not be assignable by
either party hereto without the written consent of the other.
If this Agreement is acceptable to the Company, it is requested that
the Company sign the form of acceptance below and mail or deliver one of the
counterparts hereof to the undersigned at its address set forth below. This
will become a binding agreement, as of the date first above written, between the
Company and the undersigned when such counterpart is so mailed or delivered.
2
This Agreement shall be governed by and construed in accordance with
the internal laws of the State of New York.
Yours very truly,
---------------------------
(Purchaser)
By
------------------------
-------------------------
(Title)
-------------------------
-------------------------
(Address)
Accepted:
Armstrong World Industries, Inc.
By
-----------------------------
3
PURCHASER --- PLEASE COMPLETE AT TIME OF SIGNING
The name and telephone and department of the representative of the
Purchaser with whom details of delivery on the Delivery Date may be discussed is
as follows: (Please print.)
Telephone No.
Name (Including Area Code) Department
---- --------------------- ----------
- ---------------------- ----------------------------- ------------------
4
SCHEDULE A
----------
Securities:
- ----------
Principal Amounts or Numbers to be Purchased:
- --------------------------------------------
Purchase Price:
- --------------
Delivery
- --------