GLOBAL MARINE INC.
(Exact name of registrant as specified in its charter)
DELAWARE 1381 95-1849298
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or organization) Classification Code Number) Identification No.)
JAMES L. MCCULLOCH
777 N. ELDRIDGE PARKWAY VICE PRESIDENT AND GENERAL COUNSEL
HOUSTON, TEXAS 77079-4493 777 N. ELDRIDGE PARKWAY
(281) 596-5100 HOUSTON, TEXAS 77079-4493
(Address, including zip code, and telephone number, (281) 596-5100
including area code, of registrant's principal (Name, address, including zip code, and telephone number,
executive offices) including area code, of agent for service)
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Copy to:
J. DAVID KIRKLAND, JR.
BAKER & BOTTS, L.L.P.
3000 ONE SHELL PLAZA
HOUSTON, TEXAS 77002
(713) 229-1234
Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable following the effectiveness of this Registration Statement.
If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. [ ]
If this Form is filed to register additional securities for an offering pursuant to rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]
CALCULATION OF REGISTRATION FEE
=======================================================================================================================
PROPOSED PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE MAXIMUM AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED OFFERING PRICE PRICE (1) REGISTRATION FEE (2)
PER UNIT
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7 1/8% Notes Due 2007 . . . . . . . . $300,000,000 100% $300,000,000 $90,909.09
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(1) Estimated solely for purposes of calculating the registration fee.
(2) Calculated pursuant to Rule 457(f)(2).
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
Subject to Completion, Dated October 30, 1997
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
PRELIMINARY PROSPECTUS
GLOBAL MARINE INC.
OFFER TO EXCHANGE
7 1/8% NOTES DUE 2007
FOR ALL OUTSTANDING 7 1/8% NOTES DUE 2007
($300,000,000 IN PRINCIPAL AMOUNT OUTSTANDING)
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M.
NEW YORK CITY TIME, ON , 1997, UNLESS EXTENDED
Global Marine Inc., a Delaware corporation (the "Company"), hereby offers, upon the terms and subject to the conditions set forth in this Prospectus and the accompanying letter of transmittal (the "Letter of Transmittal," and together with this Prospectus, the "Exchange Offer"), to exchange $1,000 principal amount of its 7 1/8% Notes Due 2007 (the "Exchange Notes"), the issuance of which has been registered under the Securities Act of 1933, as amended (the "Securities Act"), pursuant to a registration statement of which this Prospectus constitutes a part (the "Registration Statement"), for each $1,000 principal amount of its outstanding 7 1/8% Notes Due 2007 (the "Old Notes"), of which $300,000,000 principal amount is outstanding. The form and terms of the Exchange Notes will be the same as the form and terms of the Old Notes, except that (i) the Exchange Notes will be registered under the Securities Act, and hence will not bear legends restricting the transfer thereof and (ii) the holders of the Exchange Notes will not be entitled to certain rights of holders of the Old Notes under the Registration Agreement (as defined herein), which rights will terminate upon the consummation of the Exchange Offer. The Exchange Notes will evidence the same debt as the Old Notes and will be entitled to the benefits of an indenture, dated as of September 1, 1997 (the "Indenture"), governing the Old Notes and the Exchange Notes. The Indenture provides for the issuance of both the Exchange Notes and the Old Notes. The Exchange Notes and the Old Notes are sometimes referred to herein collectively as the "Notes."
The Exchange Notes will be senior securities of the Company, ranking pari passu with all other unsubordinated and unsecured indebtedness of the Company.
Interest on the Notes will be payable semiannually on March 1 and September 1 of each year, commencing March 1, 1998. The Notes may be redeemed at any time at the option of the Company, in whole or from time to time in part, at a price equal to 100% of the principal amount thereof plus accrued and unpaid interest, if any, to the date of redemption, plus a Make-Whole Premium, if any, relating to the then prevailing Treasury Yield and the remaining life of the Notes. The Notes are not subject to any sinking fund. See "Description of Exchange Notes."
Prior to the Exchange Offer, there has been no public market for the Old Notes. The Company does not intend to list the Exchange Notes on any securities exchange or to seek approval for quotation through any automated quotation system. There can be no assurance that an active market for the Exchange Notes will develop. To the extent that a market for the Exchange Notes does develop, the market value of the Exchange Notes will depend on market conditions (such as yields on alternative investments), general economic conditions, the Company's financial condition and other conditions. Such conditions might cause the Exchange Notes, to the extent that they are actively traded, to trade at a significant discount from face value.
(cover continued on next page)
This Prospectus, together with the Letter of Transmittal, is first being sent on or about , 1997 to all Holders of Old Notes known to the Company.
SEE "RISK FACTORS" BEGINNING ON PAGE 17 FOR CERTAIN INFORMATION THAT SHOULD BE CONSIDERED BY HOLDERS IN DECIDING WHETHER TO TENDER OLD NOTES IN THE EXCHANGE OFFER.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is , 1997.
(Cover page continued)
Except as discussed below, the Exchange Notes will be available only in book-entry form. The Company expects that the Exchange Notes issued pursuant to the Exchange Offer will be issued in the form of one or more fully registered global notes that will be deposited with, or on behalf of, The Depository Trust Company ("DTC") and registered in its name or in the name of Cede & Co., as its nominee. Beneficial interests in the global notes representing the Exchange Notes will be shown on, and transfers thereof will be effected only through, records maintained by DTC and its participants. After the initial issuance of such global notes, Exchange Notes in certificated form will be issued in exchange for the global notes only in accordance with the terms and conditions set forth in the Indenture. See "Description of Exchange Notes--Book-Entry, Delivery and Form" and "Description of Exchange Notes--Certificated Securities."
The Company will accept for exchange any and all Old Notes which are properly tendered in the Exchange Offer prior to 5:00 p.m., New York City time, on , 1997 (unless extended) (such expiration date, as it may be extended, is referred to herein as the "Expiration Date"). Tenders of Old Notes may be withdrawn at any time prior to 5:00 p.m., New York City time, on the Expiration Date. The Exchange Offer is not conditioned upon any minimum principal amount of Old Notes being tendered for exchange. Old Notes may be tendered only in integral multiples of $1,000. The Company may terminate the Exchange Offer in certain circumstances described herein. See "The Exchange Offer." In the event the Company terminates the Exchange Offer and does not accept for exchange any of the Old Notes, the Company will promptly return all previously tendered Old Notes to the holders thereof.
Based on a previous interpretation by the staff of the Securities and Exchange Commission (the "Commission") set forth in no-action letters to third parties, including Exxon Capital Holdings Corporation (available May 13, 1988), Morgan Stanley & Co. Incorporated (available June 5, 1991), Shearman & Sterling (available July 2, 1993) and similar no-action letters (the "No-Action Letters"), the Company believes that the Exchange Notes issued pursuant to the Exchange Offer in exchange for Old Notes may be offered for resale, resold, and otherwise transferred by a holder thereof (other than (i) a broker-dealer who purchases such Exchange Notes directly from the Company to resell pursuant to Rule 144A or any other available exemption under the Securities Act or (ii) a person that is an affiliate of the Company (within the meaning of Rule 405 under the Securities Act)) without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that the holder is acquiring the Exchange Notes in such holder's ordinary course of business and is not participating, and has no arrangement or understanding with any person to participate, in the distribution of the Exchange Notes. Holders of Old Notes wishing to accept any or all of the Exchange Offer must represent to the Company that such conditions have been met.
Each broker-dealer that receives Exchange Notes for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Notes. The Letter of Transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. This Prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of Exchange Notes received in exchange for Old Notes where such Exchange Notes were acquired by such broker-dealer as a result of market-making activities or other trading activities. The Company has agreed that, starting on the Expiration Date and ending on the close of business on the 180th day following the Expiration Date, it will make this Prospectus available to any broker-dealer for use in connection with any such resale. See "Plan of Distribution."
The Company believes that none of the registered holders of the Old Notes is an affiliate (as such term is defined in Rule 405 under the Securities Act) of the Company. The Company has not entered into any arrangement or understanding with any person to distribute the Exchange Notes to be received in the Exchange Offer, and to the best of the Company's information and belief, each person participating in any or all of the Exchange Offer is acquiring the Exchange Notes in the ordinary course of business and has no arrangement or understanding with any person to participate in the distribution of the Exchange Notes to be received in any or all of the Exchange Offer.
(Cover continued on next page)
(Cover page continued)
The Company will not receive any proceeds from the Exchange Offer. The Company has agreed to bear the expenses of the Exchange Offer. No underwriter is being used in connection with the Exchange Offer.
THE EXCHANGE OFFER IS NOT BEING MADE TO, NOR WILL THE COMPANY ACCEPT SURRENDERS FOR EXCHANGE FROM, HOLDERS OF OLD NOTES IN ANY JURISDICTION IN WHICH THE EXCHANGE OFFER OR THE ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE WITH THE SECURITIES OR BLUE SKY LAWS OF SUCH JURISDICTION.
INCORPORATION BY REFERENCE
The following documents, which have been filed by the Company with the Commission pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange Act") (File No. 1-5471), are incorporated herein by reference and made a part of this Prospectus: (a) the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1996; (b) the Company's Quarterly Reports on Form 10-Q for the quarters ended March 31, 1997 and June 30, 1997; and (c) the Company's Current Reports on Form 8-K filed March 11, 1997, July 7, 1997 and August 4, 1997.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to the termination of the offering of the securities covered hereby shall be deemed to be incorporated by reference into this Prospectus and to be a part hereof from the date of filing of such documents.
Any statement herein or in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for the purposes of this Prospectus to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. As used herein, the terms "Prospectus" and "herein" mean this Prospectus, including the documents incorporated or deemed incorporated by reference, as the same may be amended, supplemented or otherwise modified from time to time. Statements contained in this Prospectus as to the contents of any contract or other document referred to herein do not purport to be complete and are qualified in all respects by reference to all of the provisions of such contract or other document.
THE COMPANY UNDERTAKES TO PROVIDE, WITHOUT CHARGE, TO EACH PERSON, INCLUDING ANY BENEFICIAL OWNER, TO WHOM A COPY OF THIS PROSPECTUS IS DELIVERED, UPON THE WRITTEN OR ORAL REQUEST OF SUCH PERSON, A COPY OF ANY OR ALL OF THE DOCUMENTS REFERRED TO ABOVE THAT HAVE BEEN OR MAY BE INCORPORATED BY REFERENCE IN THE PROSPECTUS (EXCLUDING EXHIBITS TO SUCH DOCUMENTS UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE). REQUESTS SHOULD BE DIRECTED TO THE CORPORATE SECRETARY, GLOBAL MARINE INC., 777 N. ELDRIDGE PARKWAY, HOUSTON, TEXAS 77079-4493, TELEPHONE NUMBER (281) 596- 5100.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Exchange Act, and in accordance therewith files reports, proxy statements and other information with the Commission. These reports, proxy statements and other information can be inspected and copied at the public reference facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, as well as the regional offices of the Commission at 500 West Madison Street, Suite 1400, Chicago, Illinois 60621-2511, and Room 1400, 75 Park Place, New York, New York 10007. Copies of such materials also can be obtained by mail from the Public Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. In addition, the Commission maintains a site on the World Wide Web at http://www.sec.gov that contains reports, proxy and information statements and other information regarding registrants that file electronically with the Commission. The Company's Common Stock is listed on the New York Stock Exchange, and such material also can be inspected at the offices of The New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005. In addition, so long as any of the Old Notes are "restricted securities" within the meaning of Rule 144(a)(3) under the Securities Act, the Company will, during any period that the Company is not subject to and in compliance with Section 13 or 15(d) of the Exchange Act, provide to each holder of such restricted securities and to each prospective purchaser (as designated by such holder) of such restricted securities, upon the request of such holder or prospective purchaser, any information required to be provided by Rule 144A(d)(4) under the Securities Act. Any such request and requests for the agreements summarized herein should be directed to the Corporate Secretary, at the address and telephone number listed above.
This Prospectus constitutes a part of the Registration Statement on Form S-4, as amended, filed by the Company with the Commission under the Securities Act. This Prospectus omits certain of the information contained in the Registration Statement in accordance with the rules and regulations of the Commission. Reference is hereby made to the Registration Statement and related exhibits for further information with respect to the Company and the Notes. Statements contained herein concerning the provisions of any documents are not necessarily complete and, in each instance, reference is made to the copy of such document filed as an exhibit to the Registration Statement or otherwise filed with the Commission. Each such statement is qualified in its entirety by such reference.
SUMMARY
The following summary is qualified in its entirety by the more detailed information and consolidated financial statements, including the notes thereto, appearing elsewhere in or incorporated by reference into this Prospectus. As used herein and unless the context requires otherwise, "Global Marine Inc." or the "Company" means Global Marine Inc. and its consolidated subsidiaries.
THE COMPANY
Global Marine Inc. is one of the largest offshore drilling contractors in the world, with a fleet of 31 mobile offshore drilling rigs worldwide, including two rigs undergoing conversion for deepwater drilling operations. In addition, the Company believes it is the industry's largest provider of offshore turnkey drilling services.
The Company provides offshore drilling services on a day rate basis in the U.S. Gulf of Mexico and internationally. The Company's active fleet consists of 23 cantilevered jackup rigs, four third-generation semisubmersible rigs, one moored drillship and one special-purpose mobile offshore rig designed for arctic operations. In addition, the Company has one fourth-generation semisubmersible and one dynamically-positioned drillship that are currently undergoing conversion to deepwater drilling operations. Each of the Company's rigs (other than the Glomar Beaufort Sea I) is equipped with a top drive, which increases drilling efficiency and safety while lowering costs. Of the Company's rigs, 11 currently operate in the U.S. Gulf of Mexico, 10 currently operate off the coast of West Africa, four currently operate in the North Sea, and one currently operates offshore in each of Trinidad, California and Argentina. In addition, the previously inactive Glomar Beaufort Sea I concrete island drilling system is preparing to drill offshore Alaska under a 30-day contract in late 1997. The Company conducts substantially all of its offshore contract drilling operations through Global Marine Drilling Company ("GMDC"), a wholly owned subsidiary, and is headquartered in Houston, Texas, with other offices in Lafayette, Louisiana; Aberdeen, Scotland; Anchorage, Alaska; Buenos Aires, Argentina; Douala, Cameroon; Lagos, Nigeria; London, England; Luanda, Angola; Malabo, Equitorial Guinea; New Orleans, Louisiana; Port Gentil, Gabon; Port Harcourt, Nigeria; Port Hueneme, California; and Trinidad, West Indies.
The Company also provides drilling management services on a turnkey basis through its wholly owned subsidiaries, Applied Drilling Technology Inc.("ADTI") and Global Marine Integrated Services-International Inc. ("GMIS-I"), and through a division of GMDC, Global Marine Integrated Services-Europe ("GMIS-E"). For a guaranteed price, the Company will assume responsibility for the design and execution of a specified offshore drilling program and the drilling of a loggable hole to an agreed depth. Compensation is determined on a well-by-well basis and is contingent upon satisfactory completion of the project. ADTI operates principally in the U.S. Gulf of Mexico, while GMIS-I and GMIS-E operate internationally.
INDUSTRY CONDITIONS
The condition of the offshore contract drilling industry, and resulting offshore drilling rig utilization and day rates, have improved substantially since the beginning of 1995. From the mid-1980s through the early 1990s, demand for offshore drilling rigs was declining or flat, and the industry fleet of offshore drilling rigs was reduced, primarily by attrition. In recent years demand for offshore rigs has improved, but the industry has not increased the supply of rigs. The industry has emphasized the upgrading and refurbishment of existing rigs rather than the construction of new rigs, due to the high capital costs and long lead times associated with new construction.
Several trends have increased the demand for offshore drilling rigs. Rising worldwide energy demand has helped improve fundamentals in the oil and natural gas markets. In addition, technological advancements, oil company downsizing, establishment of government-sponsored exploration, development and production sharing programs, and growing deepwater exploration have increased drilling activity and the demand for rigs. Consequently, oil companies have increased their capital expenditures to find and develop new oil and gas reserves.
Technological advances such as extended reach drilling, multilateral drilling techniques and new offshore development and production applications have reduced the costs of developing oil and gas fields. As a result, previously uneconomic discoveries have become viable, and the industry has placed increasing emphasis on exploiting existing resources using new applications. The development of three-dimensional seismic surveys has reduced exploration risks, thus placing increased emphasis on selective exploratory drilling. Government-sponsored exploration, development and production sharing programs are growing in number, and many of those programs require oil companies to commence drilling within specified time periods. All of these trends have increased the demand for high quality offshore rigs, and the Company believes the increased demand will be sustained over the next several years.
BUSINESS STRATEGY
The Company's strategy is to maximize its operating cash flow and increase return on capital employed through the following strategic elements:
Deepwater Rigs, Premium Jackup Fleet Focus. The Company seeks to improve and expand its high quality fleet by upgrading its currently owned rigs and by acquiring additional rigs, which may be upgraded before being placed in service. Over the past several years, the Company has focused on increasing its exposure to the deepwater market by expanding its deepwater fleet. In July 1997, the Company acquired two deepwater third-generation semisubmersible rigs, the Maersk Vinlander and the Maersk Jutlander, each of which is capable of being upgraded for operation in more than 3,000 feet of water, for an aggregate purchase price of $250 million. The Maersk Vinlander and Maersk Jutlander are both currently operating under pre-existing bareboat charters to third parties running through January 1998 and December 2000, respectively. In 1996, the Company purchased the Glomar Celtic Sea, a dynamically-positioned semisubmersible, which, following upgrade, will be a fourth-generation semisubmersible capable of drilling in 5,000 feet of water. Also in 1996, the Company entered into a 30-year lease with the U.S. Government for the use of the Glomar Explorer, which, following conversion, will be capable of drilling in 7,500 feet of water. The Glomar Celtic Sea and Glomar Explorer are expected to commence operations at year-end 1997 and in the first quarter of 1998, respectively. The Company has also focused on expanding its premium jackup fleet by acquiring additional Marathon LeTourneau 116-C class jackup drilling rigs. The Company believes that this class of rig is the preferred type of equipment for a substantial portion of wells drilled by jackup rigs worldwide. Since 1993, the Company has acquired six of these rigs at a total cost of approximately $175 million, making the Company's current fleet of 11 such rigs the largest in the industry.
Diverse Rig Fleet Operations. The diversity of the Company's fleet, ranging from its smallest jackups with a maximum water depth capability of 250 feet of water to a drillship that will have a maximum water depth capability of 7,500 feet of water, allows the Company to meet the needs of many operators in a variety of environments worldwide. At August 25, 1997, the Company had 11 rigs in the Gulf of Mexico, 10 rigs in West Africa, four rigs in the North Sea, one offshore Trinidad, one offshore California and one offshore Argentina. All of the Company's rigs have experienced significant day rate increases in the last two years. The Company believes that its presence in several major drilling markets affords it exposure to improving market conditions worldwide, while reducing the potential impact upon revenues of a major downturn in any single geographic market.
Balanced Long-Term and Short-Term Contract Portfolio. The Company seeks to maintain a mix of long-term and short-term contracts in an effort to provide for a certain amount of longer-term, more predictable cash flow, while maintaining exposure to increasing day rates worldwide. Over the past several months, the terms of deepwater drilling contracts for semisubmersibles and drillships have lengthened as operators have attempted to lock in the availability of rigs to carry out deepwater projects. The drilling market for jackup rigs in shallow waters, however, particularly in the U.S. Gulf of Mexico, continues to be characterized by short-term, well-to-well contracts. The Company's strategy has been to employ its rigs on short-term contracts in periods of rising day rates, enabling the Company to contract at higher day rates as existing contracts expire. The Company anticipates that contracts on 12 of the Company's 29 active rigs under contract as of August 25, 1997 will expire at varying times on or prior to December 31, 1997. The Company considers its upcoming contract expirations typical of prevailing market conditions and consistent with both the normal course of business and the Company's strategy. The Company has a three-year commitment on the Glomar Celtic Sea and a five-year commitment on the Glomar Explorer, which, as discussed above, are currently undergoing conversion to deepwater drilling capabilities and are scheduled to begin drilling under these commitments at year-end 1997 and in the first quarter of 1998, respectively. These longer-term contracts are typical in deepwater or international markets, offer higher day rates, and provide a hedge against market downturns.
Dominant Position in Turnkey Drilling Market. The Company believes it has a dominant position in turnkey operations worldwide and is the leading turnkey operator in the Gulf of Mexico. The Company believes turnkey operations can be quite attractive, as the capital investment required is minimal, although operating earnings as a percentage of revenues generated by the Company's turnkey operations are substantially lower than those of its contract drilling operations. In drilling a well under a turnkey contract, the Company typically plans the well and supervises the drilling, purchasing all equipment and services from third parties. Through August 25, 1997, the Company has drilled a total of 394 turnkey wells since entering the turnkey business in 1979. The Company drilled 53 turnkey wells during the first six months of 1997, as compared with 35 in the first six months of 1996. The Company believes that the market for turnkey operations will continue to improve as exploration and production companies continue to outsource drilling services and that it is strategically positioned to remain a dominant player in this market.
THE EXCHANGE
THE EXCHANGE OFFER . . . . . . . . . . The Company is offering to exchange
$1,000 principal amount of Exchange
Notes for each $1,000 principal
amount of Old Notes that are
properly tendered and accepted.
The Company will issue the Exchange
Notes on or promptly after the
Expiration Date. As of the date
hereof, $300,000,000 aggregate
principal amount of the Old Notes
is outstanding. See "The Exchange
Offer."
Based on an interpretation of the
staff of the Commission set forth
in the No-Action Letters, the
Company believes that Exchange
Notes issued pursuant to the
Exchange Offer in exchange for Old
Notes may be offered for resale,
resold and otherwise transferred by
any holder thereof (other than (i)
a broker-dealer who purchases such
Exchange Notes directly from the
Company to resell pursuant to Rule
144A or any other available
exemption under the Securities Act
or (ii) any such holder which is an
"affiliate" of the Company within
the meaning of Rule 405 under the
Securities Act) without compliance
with the registration and
prospectus delivery provisions of
the Securities Act, provided that
such Exchange Notes are acquired in
the ordinary course of such
holder's business and that such
holder has no arrangement or
understanding with any person to
participate in the distribution of
such Exchange Notes. In the event
that the Company's belief is
inaccurate, holders of Exchange
Notes who transfer Exchange Notes
in violation of the prospectus
delivery provisions of the
Securities Act and without an
exemption from registration
thereunder may incur liability
thereunder. The Company does not
assume, or indemnify holders
against, such liability. The
Exchange Offer is not being made
to, nor will the Company accept
surrenders for exchange from,
holders of Old Notes (i) in any
jurisdiction in which the Exchange
Offer or the acceptance thereof
would not be in compliance with the
securities or blue sky laws of such
jurisdiction or (ii) if any holder
is engaged or intends to engage in
a distribution of Exchange Notes.
Each broker-dealer that receives
Exchange Notes for its own account
in exchange for Old Notes, where
such Old Notes were acquired by
such broker-dealer as a result of
market-making activities or other
trading activities, must
acknowledge that it will deliver a
prospectus in connection with any
resale of such Exchange Notes. See
"Plan of Distribution."
EXPIRATION DATE . . . . . . . . . . . . The Exchange Offer will expire at
5:00 p.m., New York City time, on
, 1997, unless the Exchange Offer
is extended, in which case the term
"Expiration Date" shall mean, with
respect to the Exchange Offer, the
latest date and time to which the
Exchange Offer is extended. The
Company will accept for exchange
any and all Old Notes which are
properly tendered in the Exchange
Offer prior to 5:00 p.m., New York
City time, on the Expiration Date.
The Exchange Notes issued pursuant
to the Exchange Offer will be
delivered on or promptly after the
Expiration Date. See "The Exchange
Offer--General."
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CONDITIONS TO THE
EXCHANGE OFFER . . . . . . . . . . . . The Exchange Offer is not
conditioned on any minimum
principal amount of Old Notes being
tendered for exchange. The Company
may terminate the Exchange Offer if
it determines that its ability to
proceed with the Exchange Offer
could be materially impaired due to
any legal or governmental action,
any new law, statute, rule or
regulation, any interpretation by
the staff of the Commission of any
existing law, statute, rule or
regulation or the failure to obtain
any necessary approvals of
governmental agencies or holders of
the Old Notes. The Company does
not expect any of the foregoing
conditions to occur, although there
can be no assurances any such
conditions will not occur. The
Exchange Offer is subject to
certain other customary conditions,
each of which may be waived by the
Company. See "The Exchange
Offer--Certain Conditions to the
Exchange Offer."
PROCEDURES FOR TENDERING
OLD NOTES . . . . . . . . . . . . . . Each holder of Old Notes wishing to
accept the Exchange Offer must
complete, sign and date the Letter
of Transmittal, or a facsimile
thereof, in accordance with the
instructions contained herein and
therein, and mail or otherwise
deliver such Letter of Transmittal,
or such facsimile, together with
such Old Notes and any other
required documentation to
Wilmington Trust Company, as
Exchange Agent, at the address set
forth herein. By executing the
Letter of Transmittal or by
transmitting an Agent's Message (as
defined herein) in lieu thereof,
each holder will represent to the
Company that, among other things,
the Exchange Notes acquired
pursuant to the Exchange Offer are
being obtained in the ordinary
course of business of the person
receiving such Exchange Notes, such
person does not have an arrangement
or understanding with any other
person to participate in the
distribution of such Exchange Notes
and that neither the holder nor any
such other person receiving such
Exchange Notes is an "affiliate,"
as defined in Rule 405 under the
Securities Act, of the Company.
Certain brokers, dealers,
commercial banks, trust companies
and other nominees may also effect
tenders by book-entry transfer,
including an Agent's Message in
lieu of a Letter of Transmittal.
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BENEFICIAL OWNERS . . . . . . . . . . . Any beneficial owner whose Old
Notes are registered in the name of
a broker, dealer, commercial bank,
trust company or other nominee and
who wishes to tender such Old Notes
in the Exchange Offer should
contact such registered holder
promptly and instruct such
registered holder to tender on such
beneficial owner's behalf. If such
beneficial owner wishes to tender
on such owner's own behalf, such
owner must, prior to completing and
executing the Letter of Transmittal
and delivering such owner's Old
Notes, either make appropriate
arrangements to register ownership
of the Old Notes in such owner's
name or obtain a properly completed
bond power from the registered
holder. The transfer of registered
ownership may take considerable
time and may not be able to be
completed prior to the Expiration
Date.
GUARANTEED DELIVERY
PROCEDURES . . . . . . . . . . . . . . Holders of Old Notes who wish to
tender their Old Notes and who
cannot deliver their Old Notes or
the Letter of Transmittal to
Wilmington Trust Company, as
Exchange Agent, prior to the
Expiration Date, or the procedures
for book-entry transfer cannot be
completed on a timely basis, must
tender their Old Notes according to
the guaranteed delivery procedures
set forth in "The Exchange
Offer--Guaranteed Delivery
Procedures."
WITHDRAWAL RIGHTS . . . . . . . . . . . Tenders of Old Notes may be
withdrawn at any time prior to 5:00
p.m., New York City time, on the
Expiration Date.
CERTAIN FEDERAL INCOME
TAX CONSEQUENCES . . . . . . . . . . . For a discussion of certain federal
income tax consequences relating to
the exchange of Exchange Notes for
Old Notes, see "Certain Federal
Income Tax Consequences."
EXCHANGE AGENT . . . . . . . . . . . . Wilmington Trust Company is the
Exchange Agent. Its telephone
number is (302) 651-8869. The
address of the Exchange Agent is
set forth in "The Exchange
Offer--Exchange Agent." Wilmington
Trust Company also serves as
trustee (the "Trustee") under the
Indenture.
SHELF REGISTRATION
STATEMENT . . . . . . . . . . . . . . . Under certain circumstances
described in the registration
rights agreement entered into
between the Company and the Initial
Purchasers in connection with the
offering of the Old Notes (the
"Registration Agreement"), certain
holders of Notes (including holders
who are not permitted to
participate in the Exchange Offer
or who may not freely resell
Exchange Notes received in the
Exchange Offer) may require the
Company to file, and use its best
efforts to cause to become
effective, a shelf registration
statement (the "Shelf Registration
Statement") under the Securities
Act, which would cover resales of
Notes by such holders. See
"Registration Rights."
|
SUMMARY DESCRIPTION OF THE EXCHANGE NOTES
The terms of the Exchange Notes and the Old Notes are identical in all material respects, except for certain transfer restrictions and registration rights relating to the Old Notes. Whenever defined terms of the Indenture not otherwise defined herein are referred to, such defined terms are incorporated herein by reference. In the event that (i) by March 14, 1998, neither the Registration Statement of which this Prospectus is a part (sometimes referred to herein as the "Exchange Offer Registration Statement") is declared effective nor (if a Shelf Registration Statement is required as described above) the Shelf Registration Statement is filed with the Commission, or (ii) by April 13, 1998, the Exchange Offer is not consummated or the Shelf Registration Statement is not declared effective with respect thereto (each such event referred to in clauses (i) or (ii), a "Registration Default"), interest will accrue on the applicable Old Notes (in addition to stated interest on such Old Notes) from and including the next day following each such Registration Default. In each case such additional interest (the "Special Interest") will be payable in cash semiannually in arrears each March 1 and September 1, at a rate per annum equal to 0.25% of the principal amount of such Old Notes for each such Registration Default. The aggregate amount of Special Interest payable pursuant to the above provisions will in no event exceed 0.25% per annum of the principal amount of such Old Notes. Upon (a) the Exchange Offer Registration Statement being declared effective or the filing of the Shelf Registration Statement after the date set forth in clause (i) above or (b) the consummation of the Exchange Offer for such Old Notes or a Shelf Registration Statement being declared effective, as the case may be, after the date set forth in clause (ii) above, the Special Interest payable on such Old Notes as a result of the applicable Registration Default will cease to accrue.
The Exchange Notes will bear interest from the most recent date to which interest has been paid on the Old Notes or, if no interest has been paid on the Old Notes, from September 15, 1997. Accordingly, registered holders of Exchange Notes on the relevant record date for the first interest payment date following the consummation of the Exchange Offer will receive interest accruing from the most recent date to which interest has been paid on the Old Notes or, if no interest has been paid, from September 15, 1997. Old Notes accepted for exchange will cease to accrue interest from and after the date of consummation of the Exchange Offer. Holders whose Old Notes are accepted for exchange will not receive any payment in respect of interest on such Old Notes otherwise payable on any interest payment date, the record date for which occurs on or after consummation of the Exchange Offer.
THE EXCHANGE NOTES
EXCHANGE NOTES OFFERED . . . . . . . . . . $300,000,000 aggregate
principal amount of 7 1/8%
Notes Due 2007.
MATURITY . . . . . . . . . . . . . . . . . September 1, 2007.
INTEREST PAYMENT DATES . . . . . . . . . . March 1 and September 1 of
each year, commencing
March 1, 1998.
REDEMPTION . . . . . . . . . . . . . . . . The Exchange Notes may be
redeemed at any time at the
option of the Company, in
whole or from time to time in
part, at a price equal to
100% of the principal amount
thereof plus accrued and
unpaid interest, if any, to
the date of redemption, plus
a Make-Whole Premium, if
any, relating to the then
prevailing Treasury Yield and
the remaining life of the
Exchange Notes.
12
|
CERTAIN COVENANTS . . . . . . . . . . . . . The Indenture relating to the
Exchange Notes will contain
limitations on the Company's
ability to (1) incur
indebtedness for borrowed
money secured by certain
liens and (2) engage in
certain sale/leaseback
transactions. See
"Description of Exchange
Notes."
RANKING . . . . . . . . . . . . . . . . . . The Exchange Notes will be
senior securities of the
Company, ranking pari passu
with all other unsubordinated
and unsecured indebtedness of
the Company and senior in
right of payment to any
future subordinated
indebtedness of the Company.
The Company currently has
outstanding $223.9 million
principal amount of 12 3/4%
Senior Secured Notes Due 1999
(the "Senior Secured Notes"),
which are collateralized by
mortgages on 22 drilling rigs
owned by direct or indirect
subsidiaries of the Company
and all the capital stock of
most of the Company's direct
and indirect subsidiaries.
The Company has a $250
million unsecured revolving
bank credit facility (the
"Bank Credit Facility") that
ranks pari passu with the
Notes. See "Private
Placement" and
"Capitalization."
USE OF PROCEEDS . . . . . . . . . . . . . . The Company used
approximately $200 million of
the aggregate net proceeds
from the offering of the Old
Notes to repay all existing
indebtedness under the Bank
Credit Facility and invested
the balance of the proceeds
in short-term investments
pending its use for general
corporate purposes. In
December 1997, the Company
anticipates borrowing under
the Bank Credit Facility and
using the proceeds of such
borrowing, together with
available funds, to retire
all of the outstanding $223.9
million principal amount of
the Senior Secured Notes,
which become redeemable at
the option of the Company at
such time at 102% of the
principal amount thereof.
|
See "Private Placement."
EXCHANGE OFFER; REGISTRATION
RIGHTS . . . . . . . . . . . . . . . . . . Pursuant to the Registration
Agreement relating to the Old
Notes, the Company agreed to
use its reasonable best
efforts to (1) cause the
Exchange Offer Registration
Statement to become effective
not later than March 14, 1998
and (2) cause the Exchange
Offer to be consummated not
later than April 13, 1998.
In certain circumstances, the
Company will file a Shelf
Registration Statement with
respect to the Old Notes in
lieu of effecting the
Exchange Offer. See
"Registration Rights."
13
|
ABSENCE OF A PUBLIC MARKET
FOR THE EXCHANGE NOTES . . . . . . . . . . The Exchange Notes will be a
new issue of securities for
which there is currently no
market. Although the Initial
Purchasers have informed the
Company that they each
currently intend to make a
market in the Exchange Notes,
they are not obligated to do
so, and any such market
making may be discontinued at
any time without notice.
Accordingly, there can be no
assurance as to the
development or liquidity of
any market for the Exchange
Notes.
|
RISK FACTORS
See "Risk Factors" beginning on page 17 for a discussion of certain factors that should be considered by prospective investors in evaluating an investment in the Exchange Notes.
SUMMARY FINANCIAL AND OPERATING DATA
The following table sets forth certain summary financial and operating data relating to the Company which has been derived from and should be read in conjunction with the Company's consolidated financial statements and the notes thereto included in the Company's 1996 Annual Report on Form 10-K, the Company's Quarterly Reports on Form 10-Q for the quarters ended March 31, 1997 and June 30, 1997, and other information and data included herein or incorporated by reference herein. See "Incorporation by Reference."
SIX MONTHS
ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
------------------- -------------------------------------------------
1997 1996 1996 1995 1994 1993 1992
-------- -------- ------- -------- -------- ------- -------
(DOLLARS IN MILLIONS, EXCEPT OPERATIONAL DATA)
FINANCIAL PERFORMANCE
Revenues:
Contract drilling . . . . . . . . . . . . $ 237.8 $ 164.2 $ 362.5 $ 248.9 $ 211.4 $ 200.3 $ 214.1
Drilling management services . . . . . . 201.6 111.5 305.3 209.3 137.8 57.1 26.9
Oil and gas . . . . . . . . . . . . . . . 4.0 7.2 12.9 9.8 9.8 11.6 19.3
-------- -------- ------- ------- ------- ------- -------
Total revenues . . . . . . . . . . $ 443.4 $ 282.9 $ 680.7 $ 468.0 $ 359.0 $ 269.0 $ 260.3
======== ======== ======= ======= ======= ======= =======
Operating income:
Contract drilling . . . . . . . . . . . . $ 108.2 $ 50.0 $ 125.4 $ 54.6 $ 25.6 $4.5 $17.3
Drilling management services(1) . . . . . 24.9 8.9 27.9 17.3 10.8 7.6 (2.2)
Oil and gas . . . . . . . . . . . . . . . 1.6 3.8 6.8 3.4 3.7 5.3 3.2
Corporate expenses . . . . . . . . . . . (10.4) (9.3) (19.3) (15.0) (14.0) (14.2) (13.5)
-------- -------- ------- ------- ------- ------- -------
Total operating income . . . . . . . . 124.3 53.4 140.8 60.3 26.1 3.2 4.8
Total other income (expense) . . . . . . . (4.5) (11.6) (21.1) (5.2) (20.7) (29.4) 25.8
-------- -------- ------- ------- ------- ------- -------
Income (loss) before income taxes . . 119.8 41.8 119.7 55.1 5.4 (26.2) 30.6
Current tax provision . . . . . . . . . . . 11.9 2.8 9.6 3.2 0.6 0.3 3.1
Deferred tax benefit . . . . . . . . . . . (55.0) -- (70.0) -- -- -- --
-------- -------- ------- ------- ------- ------- -------
Income (loss) before extraordinary item
and cumulative effect of accounting
changes . . . . . . . . . . . . . . . . 162.9 39.0 180.1 51.9 4.8 (26.5) 27.5
Extraordinary gain on extinguishment
of debt . . . . . . . . . . . . . . . . -- -- -- -- -- -- 28.3
Cumulative effect of accounting
changes, net . . . . . . . . . . . . . -- -- -- -- (3.5) -- 1.4
-------- -------- ------- ------- ------- ------- -------
Net income (loss) . . . . . . . . . $ 162.9 $ 39.0 $ 180.1 $ 51.9 $ 1.3 $ (26.5) $ 57.2
======== ======== ======= ======= ======= ======= =======
Capital expenditures . . . . . . . . . . . $ 134.2 $ 27.7 $ 118.3 $ 73.5 $ 75.9 $ 40.6 $ 20.9
Depreciation and amortization . . . . . . . $ 21.4 $ 20.2 $ 40.9 $ 31.0 $ 37.4 $ 35.9 $ 47.1
EBITDA(2) . . . . . . . . . . . . . . . . . $ 145.7 $ 73.6 $ 181.7 $ 91.3 $ 63.5 $ 39.1 $ 51.9
Ratio of EBITDA to interest expense . . . . 9.05 4.87 5.88 3.02 2.10 1.22 1.19
Ratio of earnings to fixed charges(3) . . . 7.64 3.65 4.63 2.56 1.05 0.23 1.67
FINANCIAL POSITION (END OF PERIOD)
Working capital . . . . . . . . . . . . . . $ 161.0 $ 151.2 $ 158.9 $ 116.2 $ 93.4 $ 107.2 $ 30.7
Net properties . . . . . . . . . . . . . . $ 589.3 $ 392.2 $ 477.4 $ 386.6 $ 353.4 $ 314.6 $ 318.0
Total assets . . . . . . . . . . . . . . . $1,008.3 $ 619.1 $ 807.8 $ 563.0 $ 512.4 $ 492.9 $ 479.9
Long-term debt, including capital lease
obligation . . . . . . . . . . . . . . . $ 241.3 $ 225.0 $ 241.8 $ 225.0 $ 225.0 $ 225.0 $ 249.0
Shareholders' equity . . . . . . . . . . . $ 630.1 $ 312.4 $ 459.1 $ 269.0 $ 212.3 $ 205.4 $ 154.5
OPERATIONAL DATA
Average rig utilization(4)(5) . . . . . . . 98% 98% 98% 99% 94% 91% 81%
Fleet average day rate(6) . . . . . . . . . $ 50,300 $34,400 $38,000 $28,700 $25,600 $25,600 $27,600
Number of active rigs (end of period)(7) . 27 26 26 26 24 24 23
Turnkey wells completed . . . . . . . . . . 53 35 82 67 52 18 10
Number of employees (end of period) . . . . 2,200 2,100 2,100 2,100 1,700 1,500 1,500
|
SUMMARY QUARTERLY FINANCIAL AND OPERATING DATA
The following table sets forth certain unaudited summary quarterly financial and operating data relating to the Company which has been derived from and should be read in conjunction with the Company's consolidated financial statements and notes thereto and other information and data included herein or incorporated by reference herein. See "Incorporation by Reference."
Quarter Ended
-------------------------------------------------------------------------------
June 30, March 31, December 31, September 30, June 30, March 31,
1997 1997 1996 1996 1996 1996
-------- ------- ------- ------- ------- -------
(Dollars in millions, except operational data)
FINANCIAL PERFORMANCE
Revenues:
Contract drilling . . . . . . . . $ 129.1 $ 108.7 $ 100.1 $ 98.2 $ 85.7 $ 78.5
Drilling management services. . . 102.6 99.0 118.0 75.8 69.3 42.2
Oil and gas . . . . . . . . . . . 1.4 2.6 1.8 3.9 4.9 2.3
-------- ------- ------- ------- ------- -------
Total revenues . . . . . . $ 233.1 $ 210.3 $ 219.9 $ 177.9 $ 159.9 $ 123.0
======== ======= ======= ======= ======= =======
Operating income:
Contract drilling . . . . . . . . $ 61.0 $ 47.2 $ 39.3 $ 36.1 $ 26.7 $ 23.3
Drilling management services(1) . 11.0 13.9 13.7 5.3 8.1 0.8
Oil and gas . . . . . . . . . . . 0.3 1.3 0.9 2.1 3.0 0.8
Corporate expenses . . . . . . . (5.4) (5.0) (5.4) (4.6) (5.4) (3.9)
-------- ------- ------- ------- ------- -------
Total operating income . . 66.9 57.4 48.5 38.9 32.4 21.0
Total other income (expense) . . . (1.3) (3.2) (4.1) (5.4) (6.2) (5.4)
-------- ------- ------- ------- ------- -------
Income before income taxes . . . . $ 65.6 $ 54.2 $ 44.4 $ 33.5 $ 26.2 $ 15.6
======== ======= ======= ======= ======= =======
Net income . . . . . . . . . . . . $ 84.1 $ 78.8 $ 110.2 $ 30.9 $ 24.1 $ 14.9
======== ======= ======= ======= ======= =======
Capital expenditures . . . . . . . $ 78.7 $ 55.5 $ 81.4 $ 9.2 $ 18.5 $ 9.2
Depreciation and amortization . . . $ 10.8 $ 10.6 $ 10.1 $ 10.6 $ 10.5 $ 9.7
EBITDA(2) . . . . . . . . . . . . . $ 77.7 $ 68.0 $ 58.6 $ 49.5 $ 42.9 $ 30.7
OPERATIONAL DATA
Average rig utilization(3)(4) . . . 99% 98% 99% 98% 96% 100%
Fleet average day rate(5) . . . . . $53,100 $47,400 $42,600 $40,400 $36,400 $32,400
Number of active rigs
(end of quarter)(6) . . . . . . . 27 26 26 26 26 26
Turnkey wells completed . . . . . . 26 27 25 22 22 13
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RISK FACTORS
Holders of Old Notes should carefully review the information contained elsewhere in this Prospectus and should particularly consider the following matters.
CONSEQUENCES OF FAILURE TO EXCHANGE OLD NOTES
The Old Notes have not been registered under the Securities Act or any state securities laws and therefore may not be offered, sold or otherwise transferred except in compliance with the registration requirements of the Securities Act and any other applicable securities laws, or pursuant to an exemption therefrom or in a transaction not subject thereto, and in each case in compliance with certain other conditions and restrictions. Old Notes which remain outstanding after consummation of the Exchange Offer will continue to bear a legend reflecting such restrictions on transfer. In addition, upon consummation of the Exchange Offer, holders of Old Notes which remain outstanding will not be entitled to any rights to have such Old Notes registered under the Securities Act or to any similar rights under the Registration Agreement (subject to certain limited exceptions as described herein). See "Registration Rights." The Company does not intend to register under the Securities Act any Old Notes which remain outstanding after consummation of the Exchange Offer (subject to such limited exceptions, if applicable). To the extent that Old Notes are tendered and accepted in the Exchange Offer, a holder's ability to sell untendered Old Notes could be adversely affected. See "The Exchange Offer--Consequences of Failure to Exchange Old Notes."
ABSENCE OF PUBLIC MARKET
The Old Notes were issued to, and the Company believes are currently owned by, a relatively small number of beneficial owners. The Old Notes have not been registered under the Securities Act and will be subject to restrictions on transferability to the extent that they are not exchanged for the Exchange Notes. Although the Exchange Notes will generally be permitted to be resold or otherwise transferred by the holders (who are not affiliates of the Company) without compliance with the registration requirements under the Securities Act, they will constitute a new issue of securities with no established trading market. Any market-making activity will be subject to the limits imposed by the Securities Act and the Exchange Act and may be limited during the Exchange Offer. Accordingly, no assurance can be given that an active public or other market will develop for the Exchange Notes or the Old Notes or as to the liquidity of or the trading market for the Exchange Notes or the Old Notes. If an active public market does not develop, the market price and liquidity of the Exchange Notes may be adversely affected.
If a public trading market for the Exchange Notes develops, future trading prices of such securities will depend on many factors, including, among other things, prevailing interest rates, results of operations and the market for similar securities. Depending on prevailing interest rates, the market for similar securities and other factors, including the financial condition of the Company, the Exchange Notes may trade at a discount.
Notwithstanding the registration of the Exchange Notes in the Exchange Offer, holders who are "affiliates" (as defined under Rule 405 of the Securities Act) of the Company may publicly offer for sale or resell the Exchange Notes only in compliance with the provisions of Rule 144 under the Securities Act.
Each broker-dealer that receives Exchange Notes for its own account in exchange for Old Notes, where such Old Notes were acquired by such broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Notes. See "Plan of Distribution."
PRIVATE PLACEMENT
The initial placement of the Old Notes on September 10, 1997 was consummated on September 15, 1997, by the issuance and sale to the Initial Purchasers of $300,000,000 principal amount of the Old Notes at a price of 99.199% of the principal amount thereof in a private transaction not registered under the Securities Act in reliance upon Section 4(2) of the Securities Act. The Initial Purchasers thereupon offered and resold the Old Notes only to qualified institutional buyers at an initial price to such purchasers of 99.849% of the principal amount thereof.
The net proceeds of the offering of the Old Notes were approximately $297.3 million (after deduction of the discount and other expenses). The Company used approximately $200 million of such aggregate net proceeds to repay all existing indebtedness under the Bank Credit Facility (which had an interest rate of 6.375% at August 25, 1997) and will use the balance of the proceeds for general corporate purposes. Pending such use, the Company invested the balance of the proceeds in short-term investments. In December 1997, the Company anticipates borrowing under the Bank Credit Facility and using the proceeds of such borrowing, together with other available funds, to retire all of the outstanding $223.9 million principal amount of the Senior Secured Notes, which become redeemable at the option of the Company at such time at 102% of the principal amount thereof.
USE OF PROCEEDS
The Company will not receive any cash proceeds from the issuance of the Exchange Notes offered hereby. In consideration for issuing the Exchange Notes as contemplated in this Prospectus, the Company will receive in exchange a like principal amount of Old Notes, the terms of which are identical in all material respects to the Exchange Notes. The Old Notes surrendered in exchange for the Exchange Notes will be retired and canceled and cannot be reissued. Accordingly, issuance of the Exchange Notes will not result in any change in capitalization of the Company.
CAPITALIZATION
The following table sets forth the cash and cash equivalents, short-term borrowings and capitalization of the Company at September 30, 1997, which includes the Old Notes issued on September 15, 1997.
September 30,
1997
-------------
(in millions)
(unaudited)
Cash and cash equivalents . . . . . . . . . . . . . . . . . $ 190.6
==========
Short-term borrowings . . . . . . . . . . . . . . . . . . . $ --
==========
Long-term debt:
12 3/4% Senior Secured Notes Due 1999(1) . . . . . . . . $ 223.9
Bank Credit Facility(2) . . . . . . . . . . . . . . . . . --
7 1/8% Notes Due 2007 . . . . . . . . . . . . . . . . . . 299.3
Capital lease obligation . . . . . . . . . . . . . . . . 17.8
----------
Total long-term debt, including current
maturities . . . . . . . . . . . . . . . . . . 541.0
Shareholders' equity:
Preferred stock, $0.01 par value; 10 million shares
authorized, no shares issued or outstanding . . . . . --
Common stock, $0.10 par value; 300 million shares
authorized, 172,111,358 shares issued and
outstanding . . . . . . . . . . . . . . . . . . . . . 17.2
Additional paid-in capital . . . . . . . . . . . . . . . 287.0
Retained earnings . . . . . . . . . . . . . . . . . . . . 424.0
----------
Total shareholders' equity . . . . . . . . . . . 728.2
----------
Total capitalization . . . . . . . . . . . . . . $ 1,269.2
==========
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(1) The Senior Secured Notes are collateralized by mortgages on 22 drilling rigs owned by direct or indirect subsidiaries of the Company and all the capital stock of most of the Company's direct and indirect subsidiaries. The indenture governing the Senior Secured Notes contains various restrictive covenants.
(2) The Company's $250 million revolving Bank Credit Facility has a maturity date of February 15, 1999.
THE COMPANY
Global Marine Inc. is one of the largest offshore drilling contractors in the world, with a fleet of 31 mobile offshore drilling rigs worldwide, including two rigs undergoing conversion for deepwater drilling operations. In addition, the Company believes it is the industry's largest provider of offshore turnkey drilling services.
The Company provides offshore drilling services on a day rate basis in the U.S. Gulf of Mexico and internationally. The Company's active fleet consists of 23 cantilevered jackup rigs, four third-generation semisubmersible rigs, one moored drillship and one special-purpose mobile offshore rig designed for arctic operations. In addition, the Company has one fourth-generation semisubmersible and one dynamically-positioned drillship that are currently undergoing conversion to deepwater drilling operations. Each of the Company's rigs (other than the Glomar Beaufort Sea I) is equipped with a top drive, which increases drilling efficiency and safety while lowering costs. Of the Company's rigs, 11 currently operate in the U.S. Gulf of Mexico, 10 currently operate off the coast of West Africa, four currently operate in the North Sea, and one currently operates offshore in each of Trinidad, California and Argentina. In addition, the previously inactive Glomar Beaufort Sea I concrete island drilling system is preparing to drill offshore Alaska under a 30-day contract in late 1997. The Company conducts substantially all of its offshore contract drilling operations through GMDC, a wholly owned subsidiary, and is headquartered in Houston, Texas, with other offices in Lafayette, Louisiana; Aberdeen, Scotland; Anchorage, Alaska; Buenos Aires, Argentina; Douala, Cameroon; Lagos, Nigeria; London, England; Luanda, Angola; Malabo, Equitorial Guinea; New Orleans, Louisiana; Port Gentil, Gabon; Port Harcourt, Nigeria; Port Hueneme, California; and Trinidad, West Indies.
The Company also provides drilling management services on a turnkey basis through its wholly owned subsidiaries, ADTI and GMIS-I, and through GMIS-E, a division of GMDC. For a guaranteed price, the Company will assume responsibility for the design and execution of a specified offshore drilling program and the drilling of a loggable hole to an agreed depth. Compensation is determined on a well-by-well basis and is contingent upon satisfactory completion of the project. ADTI operates principally in the U.S. Gulf of Mexico, while GMIS-I and GMIS-E operate internationally.
The Company's principal executive offices are located at 777 N. Eldridge Parkway, Houston, Texas 77079-4493, and its telephone number is (281) 596-5100.
INDUSTRY CONDITIONS
The condition of the offshore contract drilling industry, and resulting offshore drilling rig utilization and day rates, have improved substantially since the beginning of 1995. From the mid-1980s through the early 1990s, demand for offshore drilling rigs was declining or flat, and the industry fleet of offshore drilling rigs was reduced, primarily by attrition. In recent years demand for offshore rigs has improved, but the industry has not increased the supply of rigs. The industry has emphasized the upgrading and refurbishment of existing rigs rather than the construction of new rigs, due to the high capital costs and long lead times associated with new construction.
Several trends have increased the demand for offshore drilling rigs. Rising worldwide energy demand has helped improve fundamentals in the oil and natural gas markets. In addition, technological advancements, oil company downsizing, establishment of government-sponsored exploration, development and production sharing programs, and growing deepwater exploration have increased drilling activity and the demand for rigs. Consequently, oil companies have increased their capital expenditures to find and develop new oil and gas reserves.
Technological advances such as extended reach drilling, multilateral drilling techniques and new offshore development and production applications have reduced the costs of developing oil and gas fields. As a result, previously uneconomic discoveries have become viable, and the industry has placed increasing
emphasis on exploiting existing resources using new applications. The development of three-dimensional seismic surveys has reduced exploration risks, thus placing increased emphasis on selective exploratory drilling. Government-sponsored exploration, development and production sharing programs are growing in number, and many of those programs require oil companies to commence drilling within specified time periods. All of these trends have increased the demand for high quality offshore rigs, and the Company believes the increased demand will be sustained over the next several years.
BUSINESS STRATEGY
The Company's strategy is to maximize its operating cash flow and increase return on capital employed through the following strategic elements:
Deepwater Rigs, Premium Jackup Fleet Focus. The Company seeks to improve and expand its high quality fleet by upgrading its currently owned rigs and by acquiring additional rigs, which may be upgraded before being placed in service. Over the past several years, the Company has focused on increasing its exposure to the deepwater market by expanding its deepwater fleet. In July 1997, the Company acquired two deepwater third-generation semisubmersible rigs, the Maersk Vinlander and the Maersk Jutlander, each of which is capable of being upgraded for operation in more than 3,000 feet of water, for an aggregate purchase price of $250 million. The Maersk Vinlander and Maersk Jutlander are both currently operating under pre-existing bareboat charters to third parties running through January 1998 and December 2000, respectively. In 1996, the Company purchased the Glomar Celtic Sea, a dynamically-positioned semisubmersible, which, following upgrade, will be a fourth-generation semisubmersible capable of drilling in 5,000 feet of water. Also in 1996, the Company that will have entered into a 30-year lease with the U.S. Government for the use of the Glomar Explorer, which, following conversion, will be capable of drilling in 7,500 feet of water. The Glomar Celtic Sea and Glomar Explorer are expected to commence operations at year-end 1997 and in the first quarter of 1998, respectively. The Company has also focused on expanding its premium jackup fleet by acquiring additional Marathon LeTourneau 116-C class jackup drilling rigs. The Company believes that this class of rig is the preferred type of equipment for a substantial portion of wells drilled by jackup rigs worldwide. Since 1993, the Company has acquired six of these rigs at a total cost of approximately $175 million, making the Company's current fleet of 11 such rigs the largest in the industry.
Diverse Rig Fleet Operations. The diversity of the Company's fleet, ranging from its smallest jackups with a maximum water depth capability of 250 feet of water to a drillship that will have a maximum water depth capability of 7,500 feet of water, allows the Company to meet the needs of many operators in a variety of environments worldwide. At August 25, 1997, the Company had 11 rigs in the Gulf of Mexico, 10 rigs in West Africa, four rigs in the North Sea, one offshore Trinidad, one offshore California and one offshore Argentina. All of the Company's rigs have experienced significant day rate increases in the last two years. The Company believes that its presence in several major drilling markets affords it exposure to improving market conditions worldwide, while reducing the potential impact upon revenues of a major downturn in any single geographic market.
Balanced Long-Term and Short-Term Contract Portfolio. The Company seeks to maintain a mix of long-term and short-term contracts in an effort to provide for a certain amount of longer-term, more predictable cash flow, while maintaining exposure to increasing day rates worldwide. Over the past several months, the terms of deepwater drilling contracts for semisubmersibles and drillships have lengthened as operators have attempted to lock in the availability of rigs to carry out deepwater projects. The drilling market for jackup rigs in shallow waters, however, particularly in the U.S. Gulf of Mexico, continues to be characterized by short-term, well-to-well contracts. The Company's strategy has been to employ its rigs on short-term contracts in periods of rising day rates, enabling the Company to contract at higher day rates as existing contracts expire. The Company anticipates that contracts on 12 of the Company's 29 active rigs under contract as of August 25, 1997 will expire at varying times on or prior to December 31, 1997. The Company considers its upcoming contract expirations typical of prevailing market conditions and consistent with both the normal course of business and the Company's strategy. The Company has a three-year
commitment on the Glomar Celtic Sea and a five-year commitment on the Glomar Explorer, which, as discussed above, are currently undergoing conversion to deepwater drilling capabilities and are scheduled to begin drilling under these commitments at year-end 1997 and in the first quarter of 1998, respectively. These longer-term contracts are typical in deepwater or international markets, offer higher day rates, and provide a hedge against market downturns.
Dominant Position in Turnkey Drilling Market. The Company believes it has a dominant position in turnkey operations worldwide and is the leading turnkey operator in the Gulf of Mexico. The Company believes turnkey operations can be quite attractive, as the capital investment required is minimal, although operating earnings as a percentage of revenues generated by the Company's turnkey operations are substantially lower than those of its contract drilling operations. In drilling a well under a turnkey contract, the Company typically plans the well and supervises the drilling, purchasing all equipment and services from third parties. Through August 25, 1997, the Company has drilled a total of 394 turnkey wells since entering the turnkey business in 1979. The Company drilled 53 turnkey wells during the first six months of 1997, as compared with 35 in the first six months of 1996. The Company believes that the market for turnkey operations will continue to improve as exploration and production companies continue to outsource drilling services and that it is strategically positioned to remain a dominant player in this market.
OFFSHORE RIG FLEET
The Company's three types of drilling rigs -- jackups, semisubmersibles and drillships -- are described below:
Jackup rigs have elevating legs which extend to the sea bottom, providing a stable platform for drilling, and are generally preferred in water depths of 300 feet or less. All of the Company's jackup units have drilling equipment that is mounted on cantilevers, which allow the equipment to extend outward from the rigs' hulls over fixed drilling platforms and enable operators to drill both exploratory and development wells. The Company's two largest jackup rigs, the Glomar Labrador I and Glomar Baltic I, are capable of operating in severe weather environments such as the North Sea and offshore Eastern Canada.
Semisubmersible rigs are floating offshore drilling units that have pontoons and columns that, when flooded with water, cause the unit to submerge to a predetermined depth. Most semisubmersibles are anchored to the sea bottom with mooring chains, but some are held in position solely by computer controlled propellers, known as thrusters. Semisubmersibles are divided into four generations, distinguished mainly by their age, environmental rating and water depth capability. The Company's Glomar Arctic I, Glomar Arctic III, Maersk Jutlander and Maersk Vinlander semisubmersibles are third-generation rigs, suitable for drilling in deepwater, harsh-weather environments. The Company's Glomar Celtic Sea, which is scheduled to begin operations at year-end 1997, will be equivalent to a fourth-generation semisubmersible, capable of drilling in water depths of up to 5,000 feet after it is converted.
Drillships are suitable for deepwater drilling in moderate weather environments and in remote locations because of their mobility and large load carrying capability. The Glomar Explorer, which is scheduled to begin operations in the first quarter of 1998, is being converted into a deepwater drillship capable of operating in water depths of up to 7,500 feet.
With the exception of the Glomar Explorer, which is leased under a 30-year agreement, all of the rigs in the fleet are owned by the Company. Twenty-two of the Company-owned rigs are currently subject to mortgages granted to collateralize the Senior Secured Notes. See "Private Placement" and "Capitalization."
The following table sets forth, as of August 25, 1997, certain information concerning the offshore rig fleet operated by the Company:
YEAR MAXIMUM
PLACED WATER DRILLING CONTRACT
IN DEPTH DEPTH CURRENT TERM
SERVICE CAPABILITY CAPABILITY LOCATION CUSTOMER EXPIRES(1)
------- ---------- ---------- ------------- -------------- ----------
CANTILEVERED JACKUP
Glomar High Island I . . . 1979 250 ft. 20,000 ft. Gulf of Mexico Vastar Resources 12/97
Glomar High Island II . . . 1979 270 ft. 20,000 ft. Gulf of Mexico Unocal 8/97
Glomar High Island III . . 1980 250 ft. 20,000 ft. West Africa Texaco 3/98
Glomar High Island IV . . . 1980 250 ft. 20,000 ft. Gulf of Mexico Amoco 8/97
Glomar High Island V . . . 1981 250 ft. 20,000 ft. West Africa Nomeco 9/99
Glomar High Island VII . . 1982 250 ft. 20,000 ft. West Africa Pecten Cameroon 11/98
Glomar High Island VIII . . 1982 250 ft. 20,000 ft. Gulf of Mexico Vastar Resources 12/97
Glomar High Island IX . . . 1983 250 ft. 20,000 ft. West Africa Total 3/98
Glomar Adriatic I . . . . . 1981 300 ft. 25,000 ft. West Africa Elf Serepca 12/97
Glomar Adriatic II . . . . 1981 350 ft. 25,000 ft. Gulf of Mexico Chevron 10/97
Glomar Adriatic III . . . . 1982 300 ft. 25,000 ft. Gulf of Mexico Forest Oil 12/97
Glomar Adriatic IV . . . . 1983 350 ft. 25,000 ft. California SWARS 7/98
Glomar Adriatic V . . . . . 1979 300 ft. 20,000 ft. West Africa Elf Gabon 1/99
Glomar Adriatic VI . . . . 1981 350 ft. 20,000 ft. Gulf of Mexico Shell 9/97
Glomar Adriatic VII . . . . 1983 325 ft. 20,000 ft. Trinidad Amoco 2/98
Glomar Adriatic VIII . . . 1983 300 ft. 25,000 ft. West Africa Texaco 2/98
Glomar Adriatic IX . . . . 1981 300 ft. 20,000 ft. West Africa Conoco 11/97
Glomar Adriatic X . . . . . 1982 300 ft. 20,000 ft. West Africa CABGOC 2/98
Glomar Adriatic XI . . . . 1983 225 ft. 25,000 ft. North Sea Total 3/99
Glomar Main Pass I . . . . 1982 300 ft. 25,000 ft. Gulf of Mexico Pennzoil 11/97
Glomar Main Pass IV . . . . 1982 300 ft. 25,000 ft. Gulf of Mexico Chevron 12/97
Glomar Labrador I . . . . . 1983 300 ft. 25,000 ft. Argentina Total 8/98
Glomar Baltic I . . . . . . 1983 375 ft. 25,000 ft. Gulf of Mexico Mobil 11/97
SEMISUBMERSIBLE
Glomar Arctic I . . . . . . 1983 3,000 ft. 25,000 ft. Gulf of Mexico British Petroleum 7/98
Glomar Arctic III . . . . . 1984 1,800 ft. 25,000 ft. North Sea Talisman 8/98
Maersk Jutlander . . . . . 1982 1,200 ft. 25,000 ft. North Sea Maersk 12/00
Maersk Vinlander . . . . . 1984 1,500 ft. 25,000 ft. North Sea Sedco 1/98
Glomar Celtic Sea (2) . . . -- 5,000 ft. 25,000 ft. Shipyard Elf Exploration 12/00
DRILLSHIP
Glomar Robert F. Bauer . . 1983 2,750 ft. 25,000 ft. West Africa Mobil 2/98
Glomar Explorer (3) . . . . -- 7,500 ft. 25,000 ft. Shipyard Texaco/Chevron 2/03
CONCRETE ISLAND DRILLING SYSTEM
Glomar Beaufort Sea I . . . 1984 55 ft. 25,000 ft. Alaska Fairweather 8/98(4)
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RECENT ACQUISITIONS
On July 22, 1997, the Company completed the acquisition of two deepwater third-generation semisubmersible drilling rigs, purchasing the Maersk Vinlander for $150 million and the Maersk Jutlander for $100 million.
The Maersk Vinlander is an Aker H-3.2 design rig currently equipped to drill in water depths to 1,500 feet and capable of being upgraded for operations in more than 3,000 feet of water. It was built in Canada at the Saint John Shipyard in 1984, is certified for operations in Canada, and is currently operating in the U.K. sector of the North Sea. The rig is currently operating under a pre-existing bareboat charter through January 1998.
The Maersk Jutlander, a Friede & Goldman L-907 design rig built in Gotaverken, Sweden, in 1982, is substantially similar to the Glomar Arctic I and Glomar Arctic III semisubmersibles. It is currently equipped to drill in water depths to 1,200 feet and is capable of being upgraded for operations in more than 3,000 feet of water. The Jutlander is currently operating in the Norwegian sector of the North Sea and is also certified for operations in the U.K. sector. Concurrent with the purchase, the seller entered into a bareboat charter with GMDC, under which the seller is continuing to use the rig to complete previous drilling commitments offshore Norway, agreeing to pay GMDC $71 million over three and one-half years.
To facilitate the purchase of the Maersk Vinlander and the Maersk Jutlander, the Bank Credit Facility was amended to increase the credit available thereunder from $100 million to $250 million. GMDC used $200 million available under the amended and restated Bank Credit Facility plus $50 million of cash on hand to acquire the rigs.
As part of upgrading and expanding its rig fleet and other assets, the Company considers and pursues the acquisition of suitable additional rigs and other assets on an ongoing basis. Although the industry has emphasized the upgrading and refurbishment of existing rigs, the Company would consider the construction of new rigs if drilling contracts for such rigs would make such a capital outlay economical. If the Company decides to undertake an acquisition or the construction of new rigs, the issuance of additional shares of stock or additional debt could be required.
FORWARD-LOOKING STATEMENTS
The statements regarding future performance and results and the other statements that are not historical facts contained in this Prospectus are forward-looking statements. The words "anticipate," "believe," "expect," "project," "estimate," "predict" and similar expressions are also intended to identify forward-looking statements. Such statements involve risks and uncertainties including, but not limited to, the risks involved in dealing with other parties, including the risk that other parties' commitments to the Company and its subsidiaries could be breached, changes in the markets for oil and gas and for offshore drilling rigs and the risks of doing business in changing markets, changes in the dates the Company's rigs undergoing conversion to drilling operations will commence drilling, and changing costs and other factors discussed herein and in the Company's filings with the Commission. Should one or more risks or uncertainties materialize or should underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated.
DESCRIPTION OF EXCHANGE NOTES
The Old Notes were issued under the Indenture and the Exchange Notes also will be issued under the Indenture. The following discussion of certain provisions of the Indenture and the terms of the Notes is a summary only and does not purport to be a complete discussion of the terms and provisions of the Indenture and the Notes. Accordingly, the following discussion is qualified in its entirety by reference to the provisions of the Indenture and the Notes including the definition therein of certain terms used below with their initial letters capitalized.
The Old Notes and the Exchange Notes will be treated as a single series of securities under the Indenture. If the Exchange Offer is consummated, Holders of Old Notes who do not exchange their Old Notes for Exchange Notes will vote together with Holders of Exchange Notes for all relevant purposes under the Indenture. In that regard, the Indenture requires that certain actions by the Holders thereunder (including acceleration following an Event of Default) must be taken, and certain rights must be exercised, by specified minimum percentages of the aggregate principal amount of the outstanding securities issued under the Indenture. In determining whether Holders of the requisite percentage in principal amount have given any notice, consent or waiver or taken any other action permitted under the Indenture, any Old Notes that remain outstanding after the Exchange Offer will be aggregated with the Exchange Notes, and the Holders of such Old Notes and the Exchange Notes will vote together as a single series for all such purposes. Accordingly, all references herein to specified percentages in aggregate principal amount of the outstanding Notes shall be deemed to mean, at any time after the Exchange Offer is consummated, such percentages in aggregate principal amount of the Old Notes and the Exchange Notes then outstanding.
The Indenture does not limit the aggregate principal amount of securities that can be issued thereunder. Securities may be issued in one or more series as may be authorized from time to time by the Company. The Old Notes are the only securities currently outstanding under the Indenture.
GENERAL
Each Note will mature on September 1, 2007 and will bear interest at the rate of 7 1/8% per annum and will be payable semiannually on March 1 and September 1 of each year, commencing March 1, 1998, to the person in whose name the Note is registered at the close of business on the February 15 or August 15 next preceding such interest payment date. Interest will be computed on the basis of a 360-day year of twelve 30-day months. Principal and interest will be payable at the offices of the Trustee, provided that, at the option of the Company, payment of interest will be made by check mailed to the address of the person entitled thereto as it appears in the register of the Notes (the "Register") maintained by the Registrar. The Notes will be transferable and exchangeable at the office of the Registrar and any co-registrar and will be issued in fully registered form, without coupons, in denominations of $1,000 and any integral multiple thereof. The Company may require payment of a sum sufficient to cover any transfer tax or other similar governmental charge payable in connection with certain transfers and exchanges.
The Notes will not be subject to any sinking fund, but are subject to redemption at the option of the Company.
REDEMPTION
The Notes will be redeemable, at the option of the Company, at any time in whole or from time to time in part, upon not less than 30 and not more than 60 days' notice as provided in the Indenture, on any date prior to maturity (the "Redemption Date") at a price (the "Redemption Price") equal to 100% of the principal amount thereof plus accrued interest to the Redemption Date (subject to the right of holders of record on the relevant record date to receive interest due on an interest payment date that is on or prior to the Redemption Date) plus a Make-Whole Premium, if any. In no event will the Redemption Price ever be less than 100% of the principal amount of the Notes plus accrued interest to the Redemption Date.
The amount of the Make-Whole Premium with respect to any Note (or portion thereof) to be redeemed will be equal to the excess, if any, of:
(i) the sum of the present values, calculated as of the Redemption Date, of:
(A) each interest payment that, but for such redemption, would have been payable on the Note (or portion thereof) being redeemed on each Interest Payment Date occurring after the Redemption Date (excluding any accrued interest for the period prior to the Redemption Date); and
(B) the principal amount that, but for such redemption, would have been payable at the final maturity of the Note (or portion thereof) being redeemed;
over
(ii) the principal amount of the Note (or portion thereof) being redeemed.
The present values of interest and principal payments referred to in clause (i) above will be determined in accordance with generally accepted principles of financial analysis. Such present values will be calculated by discounting the amount of each payment of interest or principal from the date that each such payment would have been payable, but for the redemption, to the Redemption Date at a discount rate equal to the Treasury Yield (as defined below) plus 20 basis points.
The Make-Whole Premium will be calculated by an independent investment banking institution of national standing appointed by the Company; provided, that if the Company fails to make such appointment at least 45 business days prior to the Redemption Date, or if the institution so appointed is unwilling or unable to make such calculation, such calculation will be made by Salomon Brothers Inc or, if such firm is unwilling or unable to make such calculation, by an independent investment banking institution of national standing appointed by the Trustee (in any such case, an "Independent Investment Banker").
For purposes of determining the Make-Whole Premium, "Treasury Yield" means a rate of interest per annum equal to the weekly average yield to maturity of United States Treasury Notes that have a constant maturity that corresponds to the remaining term to maturity of the Notes, calculated to the nearest 1/12th of a year (the "Remaining Term"). The Treasury Yield will be determined as of the third business day immediately preceding the applicable Redemption Date.
The weekly average yields of United States Treasury Notes will be determined by reference to the most recent statistical release published by the Federal Reserve Bank of New York and designated "H.15(519) Selected Interest Rates" or any successor release (the "H.15 Statistical Release"). If the H.15 Statistical Release sets forth a weekly average yield for United States Treasury Notes having a constant maturity that is the same as the Remaining Term, then the Treasury Yield will be equal to such weekly average yield. In all other cases, the Treasury Yield will be calculated by interpolation, on a straight-line basis, between the weekly average yields on the United States Treasury Notes that have a constant maturity closest to and greater than the Remaining Term and the United States Treasury Notes that have a constant maturity closest to and less than the Remaining Term (in each case as set forth in the H.15 Statistical Release). Any weekly average yields as calculated by interpolation will be rounded to the nearest 1/100th of 1%, with any figure of 1/200% or above being rounded upward. If weekly average yields for United States Treasury Notes are not available in the H.15 Statistical Release or otherwise, then the Treasury Yield will be calculated by interpolation of comparable rates selected by the Independent Investment Banker.
If less than all of the Notes are to be redeemed, the Trustee will select the Notes to be redeemed by such method as the Trustee shall deem fair and appropriate. The Trustee may select for redemption Notes and portions of Notes in amounts of whole multiples of $1,000.
RANKING
The Notes will be senior securities of the Company and the indebtedness evidenced thereby will rank pari passu with all other unsubordinated and unsecured indebtedness of the Company and senior in right of payment to any future subordinated indebtedness of the Company. As of September 30, 1997, the Company had outstanding $223.9 million principal amount of the Senior Secured Notes, which are collateralized by mortgages on 22 drilling rigs owned by direct or indirect subsidiaries of the Company and all the capital stock of most of the Company's direct and indirect subsidiaries. The Company's $250 million revolving Bank Credit Facility is unsecured. See "Private Placement" and "Capitalization."
Substantially all of the Company's operating income and cash flow is generated by its subsidiaries. As a result, funds necessary to meet the Company's debt service obligations are provided in part by distributions or advances from its subsidiaries. Under certain circumstances, contractual and legal restrictions, as well as the financial condition and operating requirements of the Company's subsidiaries, could limit the Company's ability to obtain cash from its subsidiaries for the purpose of meeting its debt service obligations, including the payment of principal and interest on the Notes. The claims of creditors of the subsidiaries (including holders of the Senior Secured Notes) will effectively have priority with respect to the assets and earnings of such companies over the claims of creditors of the Company, including the holders of the Notes.
CERTAIN COVENANTS
The Indenture does not limit the amount of indebtedness or other obligations that may be incurred by the Company and its subsidiaries. The Indenture does not contain provisions which would give holders of the Notes the right to require the Company to repurchase their Notes in the event of a decline in the credit rating of the Company's debt securities resulting from a takeover, recapitalization or similar restructuring.
Limitation on Liens. The Indenture provides that the Company will not, and will not permit any of its Subsidiaries to, issue, assume or guarantee any Indebtedness for borrowed money secured by any Lien upon any Principal Property or any shares of stock or indebtedness of any Subsidiary that owns or leases a Principal Property (whether such Principal Property, shares of stock or indebtedness are now owned or hereafter acquired) without making effective provision whereby the Notes (together with, if the Company shall so determine, any other Indebtedness or other obligation of the Company) shall be secured equally and ratably with (or, at the option of the Company, prior to) the Indebtedness so secured for so long as such Indebtedness is so secured. The foregoing restrictions do not, however, apply to Indebtedness secured by Permitted Liens.
"Permitted Liens" means (i) Liens existing on the date of original issuance of the Old Notes; (ii) Liens on property or assets of, or any shares of stock of, or other equity interests in, or indebtedness of, any Person existing at the time such Person becomes a Subsidiary of the Company or at the time such Person is merged into or consolidated with the Company or any of its Subsidiaries or at the time of a sale, lease or other disposition of the properties of a Person (or a division thereof) as an entirety or substantially as an entirety to the Company or a Subsidiary; (iii) Liens in favor of the Company or any of its Subsidiaries; (iv) Liens in favor of governmental bodies to secure progress or advance payments; (v) Liens securing industrial revenue or pollution control bonds; (vi) Liens on assets existing at the time of acquisition thereof, securing all or any portion of the cost of acquiring, constructing, improving, developing or expanding such assets or securing Indebtedness incurred prior to, at the time of, or within 24 months after, the later of the acquisition, the completion of construction, improvement, development or expansion or the commencement of commercial operation of such assets, for the purpose of (a) financing all or any part of the purchase price of such assets or (b) financing all or any part of the cost of construction, improvement, development or expansion of any such assets; (vii) statutory liens or landlords', carriers', warehouseman's, mechanics', suppliers', materialmen's, repairmen's or other like Liens arising in the ordinary course of business and with respect to amounts not yet delinquent or being contested in good faith by appropriate proceedings; (viii) Liens on current assets of the Company or any Subsidiary securing Indebtedness of the Company or such
Subsidiary, respectively; (ix) Liens on the stock, partnership or other equity
interest of the Company or any Subsidiary in any Joint Venture or any
Subsidiary that owns an equity interest in such Joint Venture to secure
Indebtedness, provided the amount of such Indebtedness is contributed and/or
advanced solely to such Joint Venture; and (x) any extensions, substitutions,
replacements or renewals in whole or in part of a Lien enumerated in clauses
(i) through (ix) above.
Notwithstanding the foregoing, the Company and its Subsidiaries may, without securing the Notes, issue, assume or guarantee Indebtedness that would otherwise be subject to the foregoing restrictions in an aggregate principal amount that, together with all other such Indebtedness of the Company and its Subsidiaries that would otherwise be subject to the foregoing restrictions (not including Indebtedness permitted to be secured under the definition of Permitted Liens) and the aggregate amount of Attributable Indebtedness deemed outstanding with respect to Sale/Leaseback Transactions (other than those in connection with which the Company has voluntarily retired any of the Notes, any Pari Passu Indebtedness or any Funded Indebtedness pursuant to clause (c) below under the heading "Limitation on Sale/Leaseback Transactions") does not at any one time exceed 15% of Consolidated Net Tangible Assets of the Company and its consolidated subsidiaries.
Limitation on Sale/Leaseback Transactions. The Indenture provides that the Company will not, and will not permit any Subsidiary to, enter into any Sale/Leaseback Transaction with any person (other than the Company or a Subsidiary) unless: (a) the Company or such Subsidiary would be entitled to incur Indebtedness in a principal amount equal to the Attributable Indebtedness with respect to such Sale/Leaseback Transaction secured by a Lien on the property subject to such Sale/Leaseback Transaction pursuant to the covenant described under "Limitation on Liens" above without equally and ratably securing the Notes pursuant to such covenant; (b) after the date on which the Notes are originally issued and within a period commencing nine months prior to the consummation of such Sale/Leaseback Transaction and ending nine months after the consummation thereof, the Company or such Subsidiary shall have expended for property used or to be used in the ordinary course of business of the Company and its Subsidiaries an amount equal to all or a portion of the net proceeds of such Sale/Leaseback Transaction and the Company shall have elected to designate such amount as a credit against such Sale/Leaseback Transaction (with any such amount not being so designated to be applied as set forth in clause (c) below or as otherwise permitted); or (c) the Company, during the nine-month period after the effective date of such Sale/Leaseback Transaction, shall have applied to either (i) the voluntary defeasance or retirement of any Notes, any Pari Passu Indebtedness or any Funded Indebtedness or (ii) the acquisition of one or more Principal Properties at fair value, an amount equal to the greater of the net proceeds of the sale or transfer of the property leased in such Sale/Leaseback Transaction and the fair value, as determined by the Board of Directors of the Company, of such property at the time of entering into such Sale/Leaseback Transaction (in either case adjusted to reflect the remaining term of the lease and any amount expended by the Company as set forth in clause (b) above), less an amount equal to the sum of the principal amount of Notes, Pari Passu Indebtedness and Funded Indebtedness voluntarily defeased or retired by the Company plus any amount expended to acquire any Principal Properties at fair value, within such nine-month period and not designated as a credit against any other Sale/Leaseback Transaction entered into by the Company or any Subsidiary during such period.
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company will not, in any transaction or series of transactions, consolidate with or merge into any Person, or sell, lease, convey, transfer or otherwise dispose of all or substantially all of its assets to any Person, unless: (i) either (a) the Company shall be the continuing corporation or (b) the Person (if other than the Company) formed by such consolidation or into which the Company is merged, or the Person which acquires, by sale, lease, conveyance, transfer or other disposition, all or substantially all of the assets of the Company shall be organized and validly existing under the laws of the United States of America, any political subdivision thereof or any state thereof or the District of Columbia, and shall expressly assume, by a supplemental indenture, the due and punctual payment of the principal of (and premium, if any) and interest on all the Notes and the performance of the Company's covenants and obligations under the Indenture; and
(ii) immediately after giving effect to such transaction or series of transactions, no Default or Event of Default shall have occurred and be continuing or would result therefrom.
DEFINITIONS
"Attributable Indebtedness," when used with respect to any Sale/Leaseback Transaction, means, as at the time of determination, the present value (discounted at the rate set forth or implicit in the terms of the lease included in such transaction) of the total obligations of the lessee for rental payments (other than amounts required to be paid on account of taxes, maintenance, repairs, insurance, assessments, utilities, operating and labor costs and other items which do not constitute payments for property rights) during the remaining term of the lease included in such Sale/Leaseback Transaction (including any period for which such lease has been extended). In the case of any lease which is terminable by the lessee upon the payment of a penalty, such net amount shall be the lesser of the net amount determined assuming termination upon the first date such lease may be terminated (in which case the net amount shall also include the amount of the penalty, but no rent shall be considered as required to be paid under such lease subsequent to the first date upon which it may be so terminated) or the net amount determined assuming no such termination.
"Consolidated Net Tangible Assets" means the total amount of assets
(less applicable reserves and other properly deductible items) after deducting
(1) all current liabilities (excluding the amount of those which are by their
terms extendable or renewable at the option of the obligor to a date more than
12 months after the date as of which the amount is being determined and current
maturities of long-term debt) and (2) all goodwill, trade names, trademarks,
patents, unamortized debt discount and expense and other like intangible
assets, all as set forth on the most recent quarterly balance sheet of the
Company and its consolidated subsidiaries and determined in accordance with
GAAP.
"Funded Indebtedness" means all Indebtedness (including Indebtedness incurred under any revolving credit, letter of credit or working capital facility) that matures by its terms, or that is renewable at the option of any obligor thereon to a date more than one year after the date on which such Indebtedness is originally incurred.
"Indebtedness" of any Person means, without duplication, (i) all indebtedness of such Person for borrowed money (whether or not the recourse of the lender is to the whole of the assets of such Person or only to a portion thereof), (ii) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (iii) all obligations of such Person in respect of letters of credit or other similar instruments (or reimbursement obligations with respect thereto), other than standby letters of credit, performance bonds and other obligations issued by or for the account of such Person in the ordinary course of business, to the extent not drawn or, to the extent drawn, if such drawing is reimbursed not later than the third Business Day following demand for reimbursement, (iv) all obligations of such Person to pay the deferred and unpaid purchase price of property or services, except trade payables and accrued expenses incurred in the ordinary course of business, (v) all Capitalized Lease Obligations of such Person, (vi) all Indebtedness of others secured by a Lien on any asset of such Person, whether or not such Indebtedness is assumed by such Person (provided that if the obligations so secured have not been assumed in full by such Person or are not otherwise such Person's legal liability in full, then such obligations shall be deemed to be in an amount equal to the greater of (a) the lesser of (1) the full amount of such obligations and (2) the fair market value of such assets, as determined in good faith by the Board of Directors of such Person, which determination shall be evidenced by a Board Resolution, and (b) the amount of obligations as have been assumed by such Person or which are otherwise such Person's legal liability), and (vii) all Indebtedness of others (other than endorsements in the ordinary course of business) guaranteed by such Person to the extent of such guarantee.
"Joint Venture" means (1) with respect to properties located in the United States, any partnership, corporation or other entity, in which up to and including 50% of the partnership interests, outstanding voting stock or other equity interests is owned, directly or indirectly, by the Company and/or one or more subsidiaries, and (2) with respect to properties located outside the United States, any partnership, corporation
or other entity, in which up to and including 60% of the partnership interests, outstanding voting stock or other equity interests is owned, directly or indirectly, by the Company and/or one or more Subsidiaries. A Joint Venture shall not be a Subsidiary.
"Lien" means any mortgage, pledge, lien, encumbrance, charge or security interest. For purposes of the Indenture, the Company or any Subsidiary of the Company shall be deemed to own subject to a Lien any asset which it has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, Capitalized Lease Obligation or other title retention agreement relating to such asset.
"Pari Passu Indebtedness" means any Indebtedness of the Company, whether outstanding on the date on which the Notes are originally issued or thereafter created, incurred or assumed, unless, in the case of any particular Indebtedness, the instrument creating or evidencing the same or pursuant to which the same is outstanding expressly provides that such Indebtedness shall be subordinated in right of payment to the Notes.
"Principal Property" means any drilling rig or drillship, or integral portion thereof, owned or leased by the Company or any Subsidiary and used for drilling offshore oil and gas wells, which, in the opinion of the Board of Directors, is of material importance to the business of the Company and its Subsidiaries taken as a whole, but no such drilling rig or drillship, or portion thereof, shall be deemed of material importance if its net book value (after deducting accumulated depreciation) is less than 2% of Consolidated Net Tangible Assets.
"Sale/Leaseback Transaction" means any arrangement with any Person pursuant to which the Company or any Subsidiary leases any Principal Property that has been or is to be sold or transferred by the Company or the Subsidiary to such Person, other than (1) temporary leases for a term, including renewals at the option of the lessee, of not more than five years, (2) leases between the Company and a Subsidiary or between Subsidiaries, (3) leases of Principal Property executed by the time of, or within 12 months after the latest of, the acquisition, the completion of construction or improvement, or the commencement of commercial operation of the Principal Property, and (4) arrangements pursuant to any provision of law with an effect similar to the former Section 168(f)(8) of the Internal Revenue Code of 1954.
EVENTS OF DEFAULT
An Event of Default is defined in the Indenture as being: (i) default
by the Company for 30 days in payment of any interest on the Notes; (ii)
default by the Company in any payment of principal of (and premium, if any, on)
the Notes; (iii) default by the Company in compliance with any of its other
covenants or agreements in, or provisions of, the Notes or the Indenture which
shall not have been remedied within 90 days after written notice by the Trustee
or by the holders of at least 25% in principal amount of the Notes then
outstanding (or, in the event that other securities issued under the Indenture
are also affected by the default, then 25% in principal amount of all
outstanding securities so affected); or (iv) certain events involving
bankruptcy, insolvency or reorganization of the Company. The Indenture provides
that the Trustee may withhold notice to the holders of the Notes of any default
(except in payment of principal of, premium, if any, or interest on the Notes)
if the Trustee considers it in the interest of the holders of the Notes to do
so.
The Indenture provides that if an Event of Default occurs and is continuing with respect to the Indenture, the Trustee or the holders of not less than 25% in principal amount of the Notes (or in the event of a default pursuant to (iii) above, 25% in principal amount of the securities affected) outstanding may declare the principal of and accrued but unpaid interest on all the Notes to be due and payable. Upon such a declaration, such principal and interest will be due and payable immediately. If an Event of Default relating to certain events of bankruptcy, insolvency or reorganization of the Company occurs and is continuing, the principal of and interest on all the Notes will become and be immediately due and payable without any declaration or other act on the part of the Trustee or any holders of the Notes. The amount due and payable on the acceleration of any Note will be equal to 100% of the principal amount of such Note, plus accrued
interest to the date of payment. Under certain circumstances, the holders of a majority in principal amount of the Notes may rescind any such acceleration with respect to the Notes and its consequences.
The Indenture provides that no holder of a Note may pursue any remedy under the Indenture unless (i) the Trustee shall have received from the holder written notice of a continuing Event of Default, (ii) the Trustee shall have received a written request from holders of at least 25% in principal amount of the then outstanding Notes to pursue such remedy, (iii) the Trustee shall have been offered indemnity reasonably satisfactory to it and (iv) the Trustee shall have failed to act for a period of 60 days after receipt of such notice and offer of indemnity; however, such provision does not affect the right of a holder of a Note to sue for enforcement of any overdue payment thereon.
The holders of a majority in principal amount of the Notes then outstanding will have the right to direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee under the Indenture, subject to certain limitations specified in the Indenture. The Indenture requires the annual filing by the Company with the Trustee of a written statement as to compliance with the covenants contained in the Indenture.
MODIFICATION AND WAIVER
The Indenture provides that modifications and amendments to the
Indenture or the Notes may be made by the Company and the Trustee with the
consent of the holders of a majority in principal amount of the Notes (or of
all securities under the Indenture affected thereby) then outstanding; provided
that no such modification or amendment may, without the consent of the holder
of each Note then outstanding affected thereby, (i) reduce the amount of Notes
(or such securities) whose holders must consent to an amendment, supplement or
waiver; (ii) reduce the rate of or change the time for payment of interest,
including default interest, on any Note; (iii) reduce the principal of or
premium on, or change the stated maturity of any Note; (iv) reduce the premium,
if any, payable upon the redemption of any Note or change the time at which any
Note may or shall be redeemed; (v) make any Note payable in money other than
that stated in the Note; (vi) impair the right to institute suit for the
enforcement of any payment of principal of (or premium if any) or interest on
any Note; (vii) make any change in the percentage of principal amount of Notes
necessary to waive compliance with certain provisions of the Indenture; or
(viii) waive a continuing Default or Event of Default in the payment of
principal of or premium on, or interest on the Notes. The Indenture provides
that amendments and supplements to, or waivers of any provision of, the
Indenture may be made by the Company and the Trustee without the consent of any
holders of Notes in certain circumstances, including (a) to cure any ambiguity,
omission, defect or inconsistency, (b) to provide for the assumption of the
obligations of the Company under the Indenture upon the merger, consolidation
or sale or other disposition of all or substantially all of the assets of the
Company, (c) to provide for uncertificated Notes in addition to or in place of
certificated Notes, (d) to secure the Notes or provide for guarantees of the
Notes, (e) to comply with any requirement in order to effect or maintain the
qualification of the Indenture under the Trust Indenture Act of 1939, or (f) to
make any change that does not adversely affect the rights of any holder of
Notes in any material respect.
The Indenture provides that the holders of a majority in aggregate principal amount of the Notes (or of all securities under the Indenture affected thereby) then outstanding may waive any existing or past default under the Indenture, except (a) in the payment of the principal of (or premium, if any) or interest on any Note or (b) in respect of a provision that under the proviso to the prior paragraph cannot be amended or supplemented without the consent of each Holder affected.
DEFEASANCE
The Company may, at its option, elect (a) to have all of the obligations of the Company discharged with respect to the Notes (except for certain obligations to register the transfer or exchange of Notes, replace stolen, lost or mutilated Notes or maintain paying agencies and hold moneys for payment in trust) ("legal
defeasance") or (b) to have its obligations terminated with respect to certain restrictive covenants of the Indenture ("covenant defeasance"), in which event certain Events of Default will no longer constitute Events of Default with respect to any Notes, upon the deposit with the Trustee, in trust, of money or U.S. Government Obligations, or a combination thereof, which through the payment of interest thereon and principal thereof in accordance with their terms will provide money in an amount sufficient to pay all the principal of (and premium, if any, on) and interest on such Notes on the dates such payments are due in accordance with the terms of the Notes on their stated maturity or any redemption date. The Company is required to deliver to the Trustee an Opinion of Counsel to the effect that the deposit and related defeasance would not cause the Holders of the Notes to recognize income, gain or loss for federal income tax purposes and, in the case of a legal defeasance pursuant to clause (a), such opinion must be based upon a ruling from the United Stated Internal Revenue Service or a change in law to that effect.
GOVERNING LAW
The Indenture and the Old Notes provide and the Exchange Notes will provide that they are governed by and construed in accordance with the laws of the State of New York, without giving effect to applicable principles of conflicts of laws to the extent the laws of another jurisdiction would be required thereby.
THE TRUSTEE
Wilmington Trust Company is the Trustee under the Indenture. The Company has also appointed the Trustee as the initial Registrar and as the initial Paying Agent under the Indenture with respect to the Notes. Wilmington Trust Company also serves as the trustee under the indenture for the Senior Secured Notes.
The Indenture contains certain limitations on the right of the Trustee, should it become a creditor of the Company, to obtain payment of claims in certain cases, or to realize on certain property received in respect of any such claim as security or otherwise. The Trustee is permitted to engage in other transactions; however, if it acquires any conflicting interest (as defined in the Trust Indenture Act of 1939), it must eliminate such conflict or resign.
The Indenture provides that in case an Event of Default shall occur (and be continuing), the Trustee will be required to use the degree of care and skill of a prudent man in the conduct of his own affairs. The Trustee is under no obligation to exercise any of its powers under the Indenture at the request of any of the holders of the Notes, unless such holders shall have offered the Trustee indemnity reasonably satisfactory to it.
BOOK ENTRY, DELIVERY AND FORM
The Old Notes were issued and the Exchange Notes will be issued in the form of one or more fully registered Global Notes (each a "Global Note"). Each Global Note will be deposited with, or on behalf of, the Depositary and registered in the name of Cede & Co., as nominee of the Depositary (such nominee being referred to herein as the "Global Note Holder").
Notes (i) transferred to institutional "accredited investors" who are not QIBS or (ii) except as described below, transferred to Persons outside the United States pursuant to sales in accordance with Regulation S under the Securities Act (collectively referred to herein as the "Non-Global Purchasers"), will be in registered form without interest coupons ("Certificated Notes"). Upon the transfer to a QIB of Certificated Notes held by a Non-Global Purchaser, such Certificated Notes will be exchanged for an interest in a Global Note.
The Depositary has advised the Company that it is a limited-purpose trust company which was created to hold securities for its participating organizations (collectively, the "Participants" or the "Depositary's Participants") and to facilitate the clearance and settlement of transactions in such securities between Participants through electronic book-entry changes in accounts of its Participants. The Depositary's
Participants include securities brokers and dealers (including the Initial Purchasers), banks and trust companies, clearing corporations and certain other organizations. Access to the Depositary's system is also available to other entities such as banks, brokers, dealers and trust companies (collectively, the "Indirect Participants" or the "Depositary's Indirect Participants") that clear through or maintain a custodial relationship with a participant, either directly or indirectly. Persons who are not Participants may beneficially own securities held by or on behalf of the Depositary only through the Depositary's Participants or the Depositary's Indirect Participants.
The Company expects that pursuant to procedures established by the Depositary (i) upon deposit of the Global Note, the Depositary will credit the accounts of Participants designated by the Initial Purchasers with portions of the principal amount of the Global Note and (ii) ownership of the Notes will be shown on, and the transfer of ownership thereof will be effected only through, records maintained by the Depositary (with respect to the interests of the Depositary's Participants), the Depositary's Participants and the Depositary's Indirect Participants. Holders are advised that the laws of some states require that certain Persons take physical delivery in definitive form of securities that they own. Consequently, the ability to transfer Notes will be limited to such extent.
So long as the Global Note Holder is the registered owner of any Notes, the Global Note Holder will be considered the sole owner or holder of such Notes outstanding under the Indenture. Except as provided below, owners of Notes will not be entitled to have Notes registered in their names, will not receive or be entitled to receive physical delivery of Notes in definitive form, and will not be considered the owners or holders thereof under the Indenture for any purpose, including with respect to the giving of any directions, instructions or approvals to the Trustee thereunder. As a result, the ability of a Person having a beneficial interest in Notes represented by the Global Note to pledge such interest to Persons or entities that do not participate in the Depositary's system or to otherwise take actions in respect of such interest may be affected by the lack of a physical certificate evidencing such interest.
Neither the Company, the Trustee, the Paying Agent nor the Notes Registrar will have any responsibility or liability for any aspect of the records relating to or payments made on account of Notes by the Depositary, or for maintaining, supervising or reviewing any records of the Depositary relating to such Notes.
Payments in respect of the principal, premium, if any, and interest on any Notes registered in the name of a Global Note Holder on the applicable record date will be payable by the Trustee to or at the direction of such Global Note Holder in its capacity as the registered holder under the Indenture. Under the terms of the Indenture, the Company and the Trustee may treat the Persons in whose names the Notes, including the Global Notes, are registered as the owners thereof for the purpose of receiving such payments and for any and all other purposes whatsoever. Consequently, neither the Company nor the Trustee has or will have any responsibility or liability for the payment of such amounts to beneficial owners of Notes (including principal, premium, if any, and interest).
The Company believes, however, that it is currently the policy of the Depositary to immediately credit the accounts of the relevant Participants with such payment, in amounts proportionate to their respective holdings in principal amount of beneficial interests in the relevant security as shown on the records of the Depositary. Payments by the Depositary's Participants and the Depositary's Indirect Participants to the beneficial owner of Notes will be governed by standing instructions and customary practice and will be the responsibility of the Depositary's Participants or the Depositary's Indirect Participants.
As long as the Notes are represented by a Global Note, the Depositary's nominee will be the holder of the Notes and therefore will be the only entity that can exercise a right to repayment or repurchase of the Notes. Notice by Participants or Indirect Participants or by owners of beneficial interests in a Global Note held through such Participants or Indirect Participants of the exercise of the option to elect repayment of beneficial interests in Notes represented by a Global Note must be transmitted to the Depositary in accordance with
its procedures on a form required by the Depositary and provided to Participants. In order to ensure that the Depositary's nominee will timely exercise a right to repayment with respect to a particular Note, the beneficial owner of such Note must instruct the broker or the Participant or Indirect Participant through which it holds an interest in such Note to notify the Depositary of its desire to exercise a right to repayment. Different firms have cut-off times for accepting instructions from their customers and, accordingly, each beneficial owner should consult the broker or other Participant or Indirect Participant through which it holds an interest in a Note in order to ascertain the cut-off time by which such an instruction must be given in order for timely notice to be delivered to the Depositary. The Company will not be liable for any delay in delivery of notices of the exercise of the option to elect repayment.
CERTIFICATED SECURITIES
Subject to certain conditions, any Person having a beneficial interest
in a Global Note may, upon request to the Company or the Trustee, exchange such
beneficial interest for Notes in the form of Certificated Securities. Upon any
such issuance, the Trustee is required to register such Notes in the name of,
and cause the same to be delivered to, such Person or Persons (or the nominee
of any thereof). In addition, if (i) the Company notifies the Trustee in
writing that the Depositary is no longer willing or able to act as a depositary
and the Company is unable to locate a qualified successor within 90 days or
(ii) the Company, at its option, notifies the Trustee in writing that it elects
to cause the issuance of Notes in the form of Certificated Securities under the
Indenture, then, upon surrender by the relevant Global Note Holder of its
Global Note, Notes in such form will be issued to each Person that such Global
Note Holder and the Depositary identify as the beneficial owner of the related
Notes.
Neither the Company nor the Trustee shall be liable for any delay by the related Global Note Holder or the Depositary in identifying the beneficial owners of Notes and each such Person may conclusively rely on and shall be protected in relying on, instructions from the Global Note Holder or of the Depositary for all purposes (including with respect to the registration and delivery, and the respective principal amounts, of the Notes to be issued).
SAME-DAY SETTLEMENT AND PAYMENT
The Indenture requires that payments in respect of the Notes (including principal, premium, if any, and interest) be made by wire transfer of immediately available funds to the accounts specified by the Global Note Holder. Secondary trading in long-term notes and debentures of corporate issuers is generally settled in clearing-house or next-day funds. In contrast, the Notes are expected to trade in the Depositary's Same-Day Funds Settlement System, and any permitted secondary market trading activity in the Notes will therefore be required by the Depositary to be settled in immediately available funds. The Company expects that secondary trading in the Certificated Notes also will be settled in immediately available funds.
TRANSFER AND EXCHANGE
A holder may transfer or exchange the Notes in accordance with the procedures set forth in the Indenture. The Registrar may require a holder, among other things, to furnish appropriate endorsements and transfer documents, and to pay any taxes and fees required by law or permitted by the Indenture. The Registrar is not required to transfer or exchange any Note selected for redemption. Also, the Registrar is not required to transfer or exchange any Note for a period of 15 days before a selection of the Notes to be redeemed.
The registered Holder of a Note will be treated as the owner of it for all purposes.
REGISTRATION RIGHTS
The Company entered into the Registration Agreement with the Initial Purchasers in connection with the sale of the Old Notes pursuant to which the Company agreed, for the benefit of the holders of the Old Notes, at the Company's cost, to (i) file the Exchange Offer Registration Statement, of which this Prospectus is a part, with the Commission with respect to the Exchange Offer, within 150 days after the date of original issuance of such Old Notes (September 15, 1997, the "Issue Date") and (ii) use its best efforts to cause the Exchange Offer Registration Statement to be declared effective under the Securities Act within 180 days after the Issue Date. Promptly after the Exchange Offer Registration Statement is declared effective, the Company will commence the Exchange Offer. The Company will keep the Exchange Offer open for not less than 30 days (or longer if required by applicable law) after the date notice of the Exchange Offer is mailed to the holders of Old Notes.
In the event that any changes in law or applicable interpretations of the staff of the Commission do not permit the Company to effect the Exchange Offer or if for any reason the Exchange Offer Registration Statement was not declared effective within 180 days following the Issue Date, or upon the request of the Initial Purchasers under certain circumstances, the Company will, in lieu of effecting the registration of the Exchange Notes pursuant to the Exchange Offer Registration Statement and at its cost, (i) as promptly as practicable, file with the Commission a Shelf Registration Statement covering resales of the Old Notes, (ii) use its best efforts to cause the Shelf Registration Statement to be declared effective under the Securities Act by the 210th day after the Issue Date (or promptly in the event of a request by the Initial Purchasers) and (iii) keep effective the Shelf Registration Statement until the earliest of (x) the second anniversary of the Issue Date (or the first anniversary of the effective date if such Shelf Registration Statement is filed at the request of the Initial Purchasers), (y) the time when the Old Notes registered thereunder can be sold by non-affiliates pursuant to Rule 144 under the Securities Act without limitation under clauses (c), (e), (f) and (h) of Rule 144, or (z) such time as all the Old Notes registered thereunder have been sold. During any consecutive 365-day period, the Company will have the ability to suspend the availability of the Shelf Registration Statement for up to two periods of up to 45 consecutive days, but no more than an aggregate of 60 days during any 365-day period. The Company will, in the event of the filing of a Shelf Registration Statement, provide to each holder of the Old Notes copies of the prospectus which is part of the Shelf Registration Statement, notify each such holder when the Shelf Registration Statement for the Old Notes has become effective and take certain other actions as are required to permit unrestricted resales of the Old Notes. A holder of the Old Notes that sells such Old Notes pursuant to the Shelf Registration Statement generally will be required to be named as a selling security holder in the related prospectus and to deliver a prospectus to the purchaser, will be subject to certain of the civil liability provisions under the Securities Act in connection with such sales and will be bound by the provisions of the Registration Agreement which are applicable to such a holder (including certain indemnification obligations). In addition, each Holder of such Old Notes will be required to deliver information to be used in connection with the Shelf Registration Statement and to provide comments on the Shelf Registration Statement within the time periods set forth in the Registration Agreement in order to have their Old Notes included in the Shelf Registration Statement and to benefit from the provisions regarding Special Interest set forth in the following paragraph. If the Company has consummated the Exchange Offer, then, subject to certain limited exceptions, the Company will have no obligation to file or to maintain the effectiveness of a Shelf Registration Statement with respect to any Old Notes that are not tendered in the Exchange Offer.
In the event that (i) by the 150th day following the Issue Date, the Exchange Offer Registration Statement was not filed with the Commission, (ii) by the 180th day following the Issue Date, neither the Exchange Offer Registration Statement is declared effective nor (if the Exchange Offer is not permitted as described above) the Shelf Registration Statement was filed with the Commission, or (iii) by the 210th day following the Issue Date, the Exchange Offer is not consummated or the Shelf Registration Statement is not declared effective (each such event referred to in clauses (i), (ii) or (iii), a "Registration Default"), interest will accrue on the Old Notes (in addition to stated interest on the Old Notes) from and including the next day following each such Registration Default. In each case such additional interest (the "Special Interest") will
be payable in cash semiannually in arrears each March 1 and September 1, at a
rate per annum equal to 0.25% of the principal amount of the Old Notes for each
such Registration Default. The aggregate amount of Special Interest payable
pursuant to the above provisions will, however, in no event exceed 0.25% per
annum of the principal amount of the Old Notes. Upon (a) the filing of the
Exchange Offer Registration Statement after the 150-day period described in
clause (i) above, (b) the effectiveness of the Exchange Offer Registration
Statement or the filing of the Shelf Registration Statement after the 180-day
period described in clause (ii) above or (c) the consummation of the Exchange
Offer for the Old Notes or the effectiveness of a Shelf Registration Statement,
as the case may be, after the 210-day period described in clause (iii) above,
the Special Interest payable on the Old Notes as a result of the applicable
Registration Default will cease to accrue. For purposes of the preceding
sentence, the curing of a Registration Default by the means described in clause
(b) above shall constitute the curing of a Registration Default by the means
described in clauses (i) and (ii) above, and the curing of a Registration
Default by the means described in clause (c) above shall constitute a cure of
the Registration Defaults described in clauses (i), (ii) and (iii) above.
In the event that a Shelf Registration Statement is declared effective pursuant to the paragraph preceding the immediately preceding paragraph, if the Company fails to keep such Registration Statement continuously effective for the period required by the Registration Agreement (except as specifically permitted therein), then from such time as the Shelf Registration Statement is no longer effective until the earlier of (i) the date that the Shelf Registration Statement is again deemed effective and (ii) the date that is the earliest of (x) the second anniversary of the Issue Date (or until the first anniversary of the effective date if the Shelf Registration Statement is filed at the request of the Initial Purchasers), (y) the time when the Old Notes registered thereunder can be sold by non-affiliates pursuant to Rule 144 under the Securities Act without any limitation under clauses (c), (e), (f) and (h) of Rule 144, or (z) the date as of which all the Old Notes are sold pursuant to the Shelf Registration Statement, Special Interest shall accrue at a rate per annum equal to 0.25% of the principal amount of the Old Notes and shall be payable in cash semiannually in arrears each March 1 and September 1.
The summary herein of certain provisions of the Registration Agreement does not purport to be complete and is subject to, and is qualified in its entirety by reference to, all the provisions of the Registration Agreement, a copy of which is available upon request to the Company.
THE EXCHANGE OFFER
GENERAL
The Old Notes were sold by the Company on September 15, 1997 to the Initial Purchasers, who in turn sold the Old Notes to a limited number of qualified institutional buyers pursuant to Rule 144A under the Securities Act. In connection with the sale of the Old Notes, the Company and the Initial Purchasers entered into the Registration Agreement, which requires the Company to file with the Commission a registration statement under the Securities Act with respect to the Exchange Notes, which are identical in all material respects to the Old Notes, and to use its best efforts to cause such registration statement to become effective under the Securities Act. The Company is further obligated, upon the Exchange Offer Registration Statement being declared effective, to offer the holders of the Old Notes the opportunity to exchange their Old Notes for a like principal amount of Exchange Notes, which will be issued without a restrictive legend and may be reoffered and resold by the holder without restrictions or limitations under the Securities Act. In the event certain circumstances occur which would result in either the Exchange Notes not becoming freely tradeable or certain holders of the Old Notes not being eligible to participate in the Exchange Offer, then the Company is required to file a Shelf Registration Statement and use its best efforts to cause the Old Notes to be registered under the Securities Act. A copy of the Registration Agreement has been filed as an exhibit to the Registration Statement of which this Prospectus is a part. The Exchange Offer is being made pursuant to the Registration Agreement to satisfy the Company's obligations thereunder. The term "Holder" with respect to the Exchange Offer means any person in whose name Old Notes are registered on the security registrar's books or any other person who has obtained a properly completed assignment from the registered
holder or any participant in the DTC system whose name appears on a security position listing as the holder of such Old Notes and who desires to deliver such Old Notes by book-entry transfer at DTC. See "Registration Rights."
Upon the terms and subject to the conditions set forth in this Prospectus and in the accompanying Letter of Transmittal (which together constitute the Exchange Offer), the Company will accept for exchange Old Notes which are properly tendered on or prior to the Expiration Date and not withdrawn as permitted below. As used herein, the term "Expiration Date" means 5:00 p.m., New York City time, on , 1997; provided, however, that if the Company, in its sole discretion, has extended the period of time during which the Exchange Offer is open, the term "Expiration Date" means the latest time and date to which the Exchange Offer is extended.
As of the date of this Prospectus, $300,000,000 aggregate principal amount of the Old Notes are outstanding. This Prospectus, together with the Letter of Transmittal, is first being sent on or about , 1997 to all Holders of Old Notes known to the Company. The Company's obligation to accept Old Notes for exchange pursuant to the Exchange Offer is subject to certain customary conditions as set forth under "--Certain Conditions to the Exchange Offer" below.
The Company expressly reserves the right, at any time or from time to time, to extend the period of time during which the Exchange Offer is open, and thereby delay acceptance for exchange of any Old Notes, by giving oral or written notice of such extension to the Holders thereof as described below. During any such extension, all Old Notes previously tendered will remain subject to the Exchange Offer and may be accepted for exchange by the Company. Any Old Notes not accepted for exchange for any reason will be returned without expense to the tendering Holder thereof as promptly as practicable after the expiration or termination of the Exchange Offer.
Old Notes tendered in the Exchange Offer must be in denominations of principal amount of $1,000 or any integral multiple thereof.
The Company expressly reserves the right to amend or terminate the
Exchange Offer, and not to accept for exchange any Old Notes not theretofore
accepted for exchange, upon the occurrence of any of the conditions of the
Exchange Offer specified below under "--Certain Conditions to the Exchange
Offer." The Company will give oral or written notice of any extension,
amendment, non-acceptance or termination to the Holders of the Old Notes as
promptly as practicable, such notice in the case of any extension to be issued
by means of a press release or other public announcement no later than 9:00
a.m., New York City time, on the next business day after the previously
scheduled Expiration Date.
PROCEDURES FOR TENDERING OLD NOTES
Only a Holder of Old Notes may tender such Old Notes in the Exchange Offer. The tender to the Company of Old Notes by a Holder thereof as set forth below and the acceptance thereof by the Company will constitute a binding agreement between the tendering Holder and the Company upon the terms and subject to the conditions set forth in this Prospectus and in the accompanying Letter of Transmittal. A Holder who wishes to tender Old Notes for exchange pursuant to the Exchange Offer must transmit a properly completed and duly executed Letter of Transmittal, including all other documents required by such Letter of Transmittal, to Wilmington Trust Company (the "Exchange Agent") at the address set forth below under "--Exchange Agent" or (in the case of a book-entry transfer) an Agent's Message in lieu of the Letter of Transmittal on or prior to the Expiration Date. In addition, either (i) certificates for such Old Notes must be received by the Exchange Agent along with the Letter of Transmittal, (ii) a timely confirmation of a book-entry transfer (a "Book-Entry Confirmation") of such Old Notes, if such procedure is available, into the Exchange Agent's account at DTC (the "Book-Entry Transfer Facility") pursuant to the procedure for book-entry transfer described below, must be received by the Exchange Agent prior to the Expiration Date, or (iii) the Holder must comply with the guaranteed delivery procedures described below (see "--Guaranteed Delivery Procedures").
THE METHOD OF DELIVERY OF OLD NOTES, LETTERS OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE ELECTION AND RISK OF THE HOLDERS. INSTEAD OF DELIVERY BY MAIL, IT IS RECOMMENDED THAT HOLDERS USE AN OVERNIGHT OR HAND DELIVERY SERVICE. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE TIMELY DELIVERY TO THE EXCHANGE AGENT BEFORE THE EXPIRATION DATE. NO LETTERS OF TRANSMITTAL OR CERTIFICATES FOR OLD NOTES SHOULD BE SENT TO THE COMPANY. HOLDERS MAY REQUEST THEIR RESPECTIVE BROKERS, DEALERS, COMMERCIAL BANKS, TRUST COMPANIES OF OTHER NOMINEES TO EFFECT THE ABOVE TRANSACTIONS FOR SUCH HOLDERS.
The term "Agent's Message" means a message, transmitted by the Book-Entry Transfer Facility to and received by the Exchange Agent and forming a part of a Book-Entry Confirmation, which states that DTC has received an express acknowledgment from the tendering participant, which acknowledgment states that such participant has received and agrees to be bound by the Letter of Transmittal and that the Company may enforce the Letter of Transmittal against such participant.
Any beneficial owner whose Old Notes are registered in the name of a broker, dealer, commercial bank, trust company, or other nominee and who wishes to tender should contact the registered Holder promptly and instruct such registered Holder to tender on such beneficial owner's behalf. If such beneficial owner wishes to tender on such owner's own behalf, such owner must, prior to completing and executing the Letter of Transmittal and delivering such owner's Old Notes, either make appropriate arrangements to register ownership of the Old Notes in such beneficial owner's name or obtain a properly completed bond power from the registered Holder. The transfer of registered ownership may take considerable time.
Signatures on a Letter of Transmittal or a notice of withdrawal described below (see "--Withdrawal Rights"), as the case may be, must be guaranteed (see "--Guaranteed Delivery Procedures") unless the Old Notes surrendered for exchange pursuant thereto are tendered (i) by a registered Holder of the Old Notes who has not completed the box entitled "Special Issuance Instructions" or "Special Delivery Instructions" on the Letter of Transmittal or (ii) for the account of an Eligible Institution (as defined below). In the event that signatures on a Letter of Transmittal or a notice of withdrawal, as the case may be, are required to be guaranteed, such guarantees must be by a financial institution (including most banks, savings and loan associations and brokerage houses) that is a participant in the Securities Transfer Agents Medallion Program, the New York Stock Exchange Medallion Program or the Stock Exchanges Medallion Program (collectively, "Eligible Institutions"). If Old Notes are registered in the name of a person other than a signer of the Letter of Transmittal, the Old Notes surrendered for exchange must be endorsed by or be accompanied by a written instrument or instruments of transfer or exchange, in satisfactory form as determined by the Company in its sole discretion, duly executed by the registered Holder exactly as the name or names of the registered Holder or Holders appear on the Old Notes with the signature thereon guaranteed by an Eligible Institution.
All questions as to the validity, form, eligibility (including time of receipt) and acceptance of Old Notes tendered for exchange will be determined by the Company in its sole discretion, which determination shall be final and binding. The Company reserves the absolute right to reject any and all tenders of any particular Old Notes not properly tendered or not to accept any particular Old Notes which acceptance might, in the judgment of the Company or its counsel, be unlawful. The Company also reserves the absolute right to waive any defects or irregularities or conditions of the Exchange Offer as to any particular Old Notes either before or after the Expiration Date (including the right to waive the ineligibility of any Holder who seeks to tender Old Notes in the Exchange Offer). The interpretation of the terms and conditions of the Exchange Offer as to any particular Old Notes either before or after the Expiration Date (including the Letter of Transmittal and the instructions thereto) by the Company shall be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of Old Notes for exchange must be cured within such reasonable period of time as the Company shall determine. None of the Company, the Exchange Agent or any other person shall be under any duty to give notification of any defect or irregularity with respect to any tender of Old Notes for exchange, nor shall any of them incur any liability for failure to give such notification.
If the Letter of Transmittal or any Old Notes or powers of attorney are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such person should so indicate when signing and, unless waived by the Company, proper evidence satisfactory to the Company of their authority to so act must be submitted with the Letter of Transmittal.
By tendering, each Holder will represent to the Company that, among other things, the Exchange Notes acquired pursuant to the Exchange Offer are being obtained in the ordinary course of business of the person receiving such Exchange Notes, whether or not such person is the Holder, and that neither the Holder nor such other person has any arrangement or understanding with any person to participate in the distribution of the Exchange Notes. If any Holder or any such other person receiving such Exchange Notes is an "affiliate," as defined under Rule 405 of the Securities Act, of the Company or is engaged in or intends to engage in, or has an arrangement or understanding with any person to participate in, a distribution of such Exchange Notes to be acquired pursuant to the Exchange Offer, such Holder or any such other person receiving such Exchange Notes (i) may not rely on the applicable interpretation of the staff of the Commission set forth in the No-Action Letters and (ii) must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction unless such resale is made pursuant to an exemption from such requirements. Each broker-dealer that receives Exchange Notes for its own account in exchange for Old Notes, where such Old Notes were acquired by such broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Notes. See "Plan of Distribution." The Letter of Transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act.
ACCEPTANCE OF OLD NOTES FOR EXCHANGE; DELIVERY OF EXCHANGE NOTES
Upon satisfaction or waiver of all of the conditions to the Exchange Offer, the Company will accept on, or promptly after, the Expiration Date, all Old Notes properly tendered and will issue the Exchange Notes promptly after acceptance of the Old Notes. See "--Certain Conditions to the Exchange Offer" below. For purposes of the Exchange Offer, the Company will be deemed to have accepted properly tendered Old Notes for exchange when, as and if the Company has given oral (promptly confirmed in writing) or written notice thereof to the Exchange Agent.
For each Old Note accepted for exchange, the Holder of such Old Note will receive as set forth under "Description of Exchange Notes--Book Entry, Delivery and Form" an Exchange Note having a principal amount equal to that of the surrendered Old Note. Accordingly, registered Holders of Exchange Notes on the relevant record date for the first interest payment date following the consummation of the Exchange Offer will receive interest accruing from the most recent date to which interest has been paid on the Old Notes or, if no interest has been paid, from September 15, 1997. Old Notes accepted for exchange will cease to accrue interest from and after the date of consummation of the Exchange Offer. Holders whose Old Notes are accepted for exchange will not receive any payment in respect of accrued interest on such Old Notes otherwise payable on any interest payment date the record date for which occurs on or after consummation of the Exchange Offer. In the event that (i) by March 14, 1998, neither the Exchange Offer Registration Statement is declared effective nor (if the Exchange Offer is not permitted as described above) the Shelf Registration Statement is filed with the Commission, or (ii) by April 13, 1998, the Exchange Offer is not consummated or the Shelf Registration Statement is not declared effective (each such event referred to in clauses (i) or (ii), a "Registration Default"), interest will accrue on the Old Notes (in addition to stated interest on the Old Notes) from and including the next day following each such Registration Default. In each case such additional interest (the "Special Interest") will be payable in cash semiannually in arrears each March 1 and September 1, at a rate per annum equal to 0.25% of the principal amount of the Old Notes. The aggregate amount of Special Interest payable pursuant to the above provisions will in no event exceed 0.25% per annum of the principal amount of such Old Notes. Upon (a) the effectiveness of the Exchange Offer Registration Statement or the filing of the Shelf Registration Statement after the date set forth in clause (i)
above or (b) the consummation of the Exchange Offer or the effectiveness of a Shelf Registration Statement, as the case may be, after the date set forth in clause (ii) above, the Special Interest payable on the Old Notes as a result of the applicable Registration Default will cease to accrue.
In all cases, issuance of Exchange Notes for Old Notes that are accepted for exchange pursuant to the Exchange Offer will be made only after timely receipt by the Exchange Agent of certificates for such Old Notes or a timely Book-Entry Confirmation of such Old Notes into the Exchange Agent's account at the Book-Entry Transfer Facility, a properly completed and duly executed Letter of Transmittal or an Agent's Message in lieu thereof and all other required documents. If any tendered Old Notes are not accepted for any reason set forth in the terms and conditions of the Exchange Offer or if Old Notes are submitted for a greater principal amount than the Holder desires to exchange, such unaccepted or non-exchanged Old Notes will be returned without expense to the tendering Holder thereof (or, in the cases of Old Notes tendered by book-entry transfer into the Exchange Agent's account at the Book-Entry Transfer Facility pursuant to the book-entry procedures described below, such non-exchanged Old Notes will be credited to an account maintained with such Book-Entry Transfer Facility) as promptly as practicable after the expiration or termination of the Exchange Offer.
BOOK-ENTRY TRANSFER
The Exchange Agent will make a request to establish an account with respect to the Old Notes at the Book-Entry Transfer Facility for purposes of the Exchange Offer within two business days after the date of this Prospectus unless the Exchange Agent already has established an account with the Book-Entry Transfer Facility suitable for the Exchange Offer, and any financial institution that is a participant in the Book-Entry Transfer Facility's systems may make book-entry delivery of Old Notes by causing the Book-Entry Transfer Facility to transfer such Old Notes into the Exchange Agent's account at the Book-Entry Transfer Facility in accordance with such Book-Entry Transfer Facility's procedures for transfer. However, although delivery of Old Notes may be effected through book-entry transfer at the Book-Entry Transfer Facility, the Letter of Transmittal or a facsimile thereof, with any required signature guarantees or an Agent's Message in lieu thereof and any other required documents, must, in any case, be transmitted to and received by the Exchange Agent at the address set forth below under "--Exchange Agent" on or prior to the Expiration Date or the guaranteed procedures described below must be complied with.
GUARANTEED DELIVERY PROCEDURES
If a registered Holder of the Old Notes desires to tender such Old Notes and time will not permit such Holder's Old Notes or other required documents to reach the Exchange Agent before the Expiration Date, or the procedure for book- entry transfer cannot be completed on a timely basis, a tender may be effected if (i) the tender is made through an Eligible Institution, (ii) on or prior to 5:00 p.m., New York City time, on the Expiration Date, the Exchange Agent receives from such Eligible Institution a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form provided by the Company (by telegram, telex, facsimile transmission, mail or hand delivery), setting forth the name and address of the Holder of Old Notes and the amount of Old Notes tendered, stating that the tender is being made thereby and guaranteeing that within three New York Stock Exchange ("NYSE") trading days after the date of execution of the Notice of Guaranteed Delivery, the certificates for all physically tendered Old Notes, in proper form for transfer, or a Book-Entry Confirmation, as the case may be, together with a properly completed and duly executed Letter of Transmittal (or facsimile thereof or Agent's Message in lieu thereof) with any required signature guarantees and any other documents required by the Letter of Transmittal will be deposited by the Eligible Institution with the Exchange Agent, and (iii) the certificates for all physically tendered Old Notes, in proper form for transfer, or a Book-Entry Confirmation, as the case may be, together with a properly completed and duly executed Letter of Transmittal (or facsimile thereof or Agent's Message in lieu thereof) with any required signature guarantees, and any other documents required by the Letter of Transmittal are deposited by the Eligible Institution within three NYSE trading days after the date of execution of the Notice of Guaranteed Delivery.
WITHDRAWAL RIGHTS
Tenders of Old Notes may be withdrawn at any time prior to 5:00 p.m., New York City time, on the Expiration Date. For a withdrawal to be effective, a written notice or facsimile transmission notice of withdrawal must be received by the Exchange Agent at the address set forth below under "--Exchange Agent." Any such notice of withdrawal must specify the name of the person having tendered the Old Notes to be withdrawn, identify the Old Notes to be withdrawn (including the principal amount of such Old Notes), and (where certificates for Old Notes have been transmitted) specify the name in which such Old Notes are registered, if different from that of the withdrawing Holder. If certificates for Old Notes have been delivered or otherwise identified to the Exchange Agent, then, prior to the release of such certificates the withdrawing Holder must also submit the serial numbers of the particular certificates to be withdrawn and a signed notice of withdrawal with signatures guaranteed by an Eligible Institution unless such Holder is an Eligible Institution in which case such guarantee will not be required. If Old Notes have been tendered pursuant to the procedure for book-entry transfer described above, any notice of withdrawal must specify the name and number of the account at the Book-Entry Transfer Facility to be credited with the withdrawn Old Notes and otherwise comply with the procedures of such facility. All questions as to the validity, form and eligibility (including time of receipt) of such notices will be determined by the Company, whose determination will be final and binding on all parties. Any Old Notes so withdrawn will be deemed not to have been validly tendered for exchange for purposes of the Exchange Offer. Any Old Notes which have been tendered for exchange but which are not exchanged for any reason will be returned to the Holder thereof without cost to such Holder (or, in the case of Old Notes tendered by book-entry transfer into the Exchange Agent's account at the Book-Entry Transfer Facility pursuant to the book-entry transfer procedures described above, such Old Notes will be credited to an account maintained with such Book-Entry Transfer Facility for the Old Notes) as soon as practicable after withdrawal, rejection of tender or termination of the Exchange Offer. Properly withdrawn Old Notes may be retendered by following one of the procedures described under "--Procedures for Tendering Old Notes" above at any time on or prior to the Expiration Date.
CERTAIN CONDITIONS TO THE EXCHANGE OFFER
Notwithstanding any other provisions of the Exchange Offer, and subject to its obligations pursuant to the Registration Agreement, the Company shall not be required to accept for exchange, or to issue Exchange Notes in exchange for, any Old Notes and may terminate or amend any or all of the Exchange Offer, if at any time before the acceptance of such Exchange Notes for exchange, any of the following events shall occur:
(i) any injunction, order or decree shall have been issued by any court or any governmental agency that would prohibit, prevent or otherwise materially impair the ability of the Company to proceed with the Exchange Offer; or
(ii) the Exchange Offer will violate any applicable law or any applicable interpretation of the staff of the Commission.
The foregoing conditions are for the sole benefit of the Company and may be asserted by the Company in whole or in part at any time and from time to time upon advice of counsel. The failure by the Company at any time to exercise any of the foregoing rights shall not be deemed a waiver of any such right and such right shall be deemed an ongoing right which may be asserted at any time and from time to time.
In addition, the Company will not accept for exchange any Old Notes tendered and no Exchange Notes will be issued in exchange for any such Old Notes, if at such time any stop order is threatened by the Commission or in effect with respect to the Registration Statement of which this Prospectus is a part or the qualification of the Indenture with respect to the Exchange Notes under the Trust Indenture Act of 1939, as amended.
The Exchange Offer is not conditioned on any minimum principal amount of Old Notes being tendered for exchange.
EXCHANGE AGENT
Wilmington Trust Company has been appointed as the Exchange Agent for the Exchange Offer. All executed Letters of Transmittal should be directed to the Exchange Agent at the address set forth below. Questions and requests for assistance, requests for additional copies of this Prospectus or of the Letter of Transmittal and requests for Notices of Guaranteed Delivery should be directed to the Exchange Agent addressed as follows:
Wilmington Trust Company, Exchange Agent
By Mail, Overnight Courier or Hand Delivery:
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Attn: Corporate Trust Operations
By Facsimile:
(302) 651-1079
Confirm by Telephone:
(302) 651-8869
DELIVERY OF THE LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION VIA FACSIMILE OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY OF SUCH LETTER OF TRANSMITTAL.
FEES AND EXPENSES
The Company will not make any payment to brokers, dealers or others soliciting acceptances of the Exchange Offer.
The expenses to be incurred in connection with the Exchange Offer will be paid by the Company. Such expenses include registration fees, fees and expenses of the Exchange Agent and Trustee, accounting and legal fees and printing costs, among others.
TRANSFER TAXES
Holders who tender their Old Notes for exchange will not be obligated to pay any transfer taxes in connection therewith, except that Holders who instruct the Company to register Exchange Notes in the name of, or request that Old Notes not tendered or not accepted in the Exchange Offer be returned to, a person other than the registered tendering Holder will be responsible for the payment of any applicable transfer tax thereon.
CONSEQUENCES OF FAILURE TO EXCHANGE OLD NOTES
Holders of Old Notes who do not exchange their Old Notes for Exchange Notes pursuant to the Exchange Offer will continue to be subject to the provisions in the Old Notes regarding transfer and exchange of the Old Notes and the restrictions on transfer of such Old Notes as set forth in the legend thereon as a consequence of the issuance of the Old Notes pursuant to exemptions from, or in transactions not subject to, the registration requirements of the Securities Act and applicable state securities laws. In general, the Old Notes may not be offered or sold unless registered under the Securities Act and applicable state securities laws. The Company does not currently anticipate that it will register under the Securities Act Old Notes not tendered. See "Registration Rights."
Based on interpretations by the staff of the Commission, as set forth in the No-Action Letters, the Company believes that Exchange Notes issued pursuant to the Exchange Offer in exchange for Old Notes may be offered for resale, resold or otherwise transferred by Holders thereof (other than any such Holder which
is an "affiliate" of the Company within the meaning of Rule 405 under the Securities Act) without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that such Exchange Notes are acquired in the ordinary course of such Holders' business and such Holders, other than broker-dealers, have no arrangement or understanding with any person to participate in the distribution of such Exchange Notes. However, the Commission has not considered the Exchange Offer in the context of a no-action letter and there can be no assurance that the staff of the Commission would make a similar determination with respect to the Exchange Offer as in such other circumstances. Each Holder, other than a broker-dealer, must acknowledge that it is not engaged in, and does not intend to engage in, a distribution of such Exchange Notes and has no arrangement or understanding to participate in a distribution of Exchange Notes. If any Holder is an affiliate of the Company or is engaged in or intends to engage in or has any arrangement or understanding with respect to the distribution of the Exchange Notes to be acquired pursuant to the Exchange Offer, such Holder (i) may not rely on the applicable interpretations of the staff of the Commission set forth in the No-Action Letters and (ii) must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction. Each broker-dealer that receives Exchange Notes for its own account in exchange for Old Notes pursuant to the Exchange Offer must acknowledge that such Old Notes were acquired by such broker-dealer as a result of market-making activities or other trading activities and that it will deliver a prospectus in connection with any resale of such Exchange Notes. The Letter of Transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. This Prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of Exchange Notes received in exchange for Old Notes where such Old Notes were acquired by such broker-dealer as a result of market-making activities or other trading activities. The Company has agreed that for a period of 180 days after the Expiration Date, it will make this Prospectus available to any broker-dealer for use in connection with any such laws of certain jurisdictions, if applicable, where the Exchange Notes may not be offered or sold unless they have been registered or qualified for sale in such jurisdictions or any exemption from registration or qualification is available and is complied with. The Company has agreed, pursuant to the Registration Agreement, subject to certain limitations specified therein, to register or qualify the Exchange Notes for offer or sale under the securities laws of such jurisdictions as any Holder reasonably requests in writing. Unless a Holder so requests, the Company does not currently intend to register or qualify the sale of the Exchange Notes in any such jurisdictions.
In addition, information set forth above concerning certain interpretations of and positions taken by the staff of the Commission is not intended to constitute legal advice and prospective investors should consult their own legal advisors with respect to such matters.
ACCOUNTING TREATMENT
No gain or loss for accounting purposes will be recognized by the Company upon the consummation of the Exchange Offer. The expenses of the Exchange Offer will be amortized by the Company over the term of the Exchange Notes under generally accepted accounting principles.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following summary fairly describes the material United States federal income tax consequences expected to apply to the exchange of Old Notes for Exchange Notes and is based upon the provisions of the Internal Revenue Code of 1986, as amended, the final, temporary and proposed regulations promulgated thereunder, and administrative rulings and judicial decisions now in effect, all of which are subject to change or different interpretations (possibly with retroactive effect). This discussion is for general information only and does not purport to address all of the possible federal income tax consequences or any state, local or foreign tax consequences of the acquisition, ownership and disposition of the Old Notes or Exchange Notes. It is limited to investors who hold the Old Notes and the Exchange Notes as capital assets and does not address the federal income tax consequences that may be relevant to particular investors in light of their unique circumstances or to certain types of investors (such as dealers in securities, insurance companies, financial institutions, foreign corporations, partnerships or trusts, nonresident individuals, and tax-exempt entities) who may be subject to special treatment under the federal income tax law.
An exchange of the Old Notes for the Exchange Notes pursuant to the Exchange Offer will not constitute a taxable event for federal income tax purposes. As a result, holders who exchange their Old Notes for Exchange Notes will not recognize any income, gain or loss for federal income tax purposes with
respect to such exchange. A cash-basis holder will not recognize in income any accrued and unpaid interest on the Old Notes by reason of the exchange. An exchanging holder will have the same adjusted basis and holding period in the Exchange Notes as it had in the Old Notes immediately before the exchange.
HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISOR AS TO THE PARTICULAR TAX CONSEQUENCES TO THEM OF EXCHANGING OLD NOTES FOR EXCHANGE NOTES IN THE EXCHANGE OFFER, INCLUDING THE APPLICABILITY AND EFFECT OF ANY STATE, LOCAL, OR FOREIGN TAX LAWS.
PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Notes for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Notes. This Prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of Exchange Notes received in exchange for Old Notes where such Old Notes were acquired by such broker-dealer as a result of market-making activities or other trading activities. The Company has agreed that, starting on the Expiration Date and ending on the close of business on the 180th day following the Expiration Date, it will make this Prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any such resale.
The Company will not receive any proceeds from any sale of Exchange Notes by broker-dealers. Exchange Notes received by broker-dealers for their own account pursuant to the Exchange Offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the Exchange Notes or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or at negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker-dealer and/or the purchasers of any such Exchange Notes. Any broker-dealer that resells Exchange Notes that were received by it for its own account pursuant to the Exchange Offer and any broker or dealer that participates in a distribution of such Exchange Notes may be deemed to be an "underwriter" within the meaning of the Securities Act and any profit of any such resale of Exchange Notes and any commissions or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. The Letter of Transmittal states that by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act.
For a period of 180 days after the Expiration Date, the Company will promptly send additional copies of this Prospectus and any amendment or supplement to this Prospectus to any broker-dealer that requests such documents in the Letter of Transmittal. The Company has agreed to pay all expenses incident to the Exchange Offer (including the expenses of one counsel for the holders of the Old Notes) other than commissions or concessions of any brokers or dealers and will indemnify the holders of the Old Notes (including any broker-dealers) against certain liabilities, including liabilities under the Securities Act.
TRANSFER RESTRICTIONS ON OLD NOTES
OFFERS AND SALES BY THE INITIAL PURCHASERS
The Old Notes were not registered under the Securities Act and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons except in accordance with an applicable exemption from the registration requirements thereof. Accordingly, the Old Notes were offered and sold only in the United States to QIBs under Rule 144A under the Securities Act.
LEGAL MATTERS
Certain legal matters in connection with the Exchange Notes offered hereby will be passed upon for the Company by Baker & Botts, L.L.P., Houston, Texas.
EXPERTS
The consolidated balance sheet as of December 31, 1996 and 1995 and the consolidated statements of operations, shareholders' equity, and cash flows for each of the three years in the period ended December 31,1996, incorporated by reference in this registration statement, have been incorporated herein in reliance on the report of Coopers & Lybrand L.L.P., independent accountants, given on the authority of that firm as experts in accounting and auditing.
With respect to the unaudited interim financial information included in the Company's quarterly reports on Form 10-Q for the quarters ended March 31, 1997 and June 30, 1997, filed pursuant to the Exchange Act and incorporated in this Prospectus by reference, the Company's independent accountants have reported that they have applied limited procedures in accordance with professional standards for a review of such information. However, their separate reports included in the Company's quarterly reports on Form 10-Q for said quarters and incorporated by reference herein state that they did not audit and that they do not express an opinion on that interim financial information. With respect to the unaudited interim financial information included in the Company's quarterly reports on Form 10-Q subsequently filed pursuant to the Exchange Act and deemed to be incorporated in this Prospectus by reference, it is anticipated that the Company's independent accountants will report that they have applied limited procedures in accordance with professional standards for a review of such information. However, their separate reports included in the Company's subsequent quarterly reports on Form 10-Q and incorporated by reference herein will state that they did not audit and do not express an opinion on that interim financial information. Accordingly, the degree of reliance on their reports on interim financial information should be restricted in light of the limited nature of the review procedures applied. The accountants are not subject to the liability provisions of Section 11 of the Securities Act of 1933 for their reports on unaudited interim financial information because these reports are not a "report" or a "part" of a registration statement prepared or certified by the accountants within the meaning of Sections 7 and 11 of the Securities Act.
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THE OFFER MADE HEREBY EXCEPT AS CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS AND THE ACCOMPANYING LETTER OF TRANSMITTAL, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY, EXCHANGE AGENT, THE INITIAL PURCHASERS OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE INFORMATION SET FORTH OR INCORPORATED BY REFERENCE HEREIN OR IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF. NEITHER THIS PROSPECTUS NOR THE ACCOMPANYING LETTER OF TRANSMITTAL CONSTITUTES AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
TABLE OF CONTENTS
PAGE
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Incorporation by Reference . . . . . . . . . . . . . . . . . . . . . . . 4
Available Information . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Private Placement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
The Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Description of Exchange Notes . . . . . . . . . . . . . . . . . . . . . . 23
Registration Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
The Exchange Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Certain Federal Income Tax Consequences . . . . . . . . . . . . . . . . . 41
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Transfer Restrictions on Old Notes . . . . . . . . . . . . . . . . . . . 42
Legal Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
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$300,000,000
EXCHANGE OFFER
GLOBAL MARINE INC.
7 1/8% NOTES DUE 2007
PROSPECTUS
Dated , 1997
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law empowers a Delaware corporation to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of such corporation) by reason of the fact that such person is or was a director or officer, employee or agent of such corporation, or is or was serving at the request of such corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise. The indemnity may include expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, provided that he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. A Delaware corporation may indemnify directors, officers, employees and others in an action by or in the right of the corporation under the same conditions, except that no indemnification is permitted without judicial approval if the person to be indemnified has been adjudged to be liable to the corporation. Where a director or officer is successful on the merits or otherwise in the defense of any action referred to above or in defense of any claim, issue or matter therein, the corporation must indemnify such director or officer against the expenses (including attorneys' fees) which he or she actually and reasonably incurred in connection therewith.
Section III-11 of the By-laws of Global Marine Inc. provides for indemnification of the directors and officers of Global Marine Inc. to the full extent permitted by law, as now in effect or later amended. Section III-11 of the By- laws provides that expenses incurred by a director or officer in defending a suit or other similar proceeding shall be paid by the Company upon receipt of an undertaking by or on behalf of the director or officer to repay such amount if it is ultimately determined that such director or officer is not entitled to be indemnified by the Company.
Additionally, the Company's Restated Certificate of Incorporation (the "Charter") contains a provision that limits the liability of the Company's directors to the fullest extent permitted by the Delaware General Corporation Law. The provision eliminates the personal liability of directors to the Company or its stockholders for monetary damages for breach of the director's fiduciary duty of care as a director. As a result, stockholders may be unable to recover monetary damages against directors for negligent or grossly negligent acts or omissions in violation of their duty of care. The provision does not change the liability of a director for breach of his duty of loyalty to the Company or to stockholders, for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, for the declaration or payment of dividends in violation of Delaware law, or in respect of any transaction from which a director receives an improper personal benefit.
In addition to its Charter and By-law provisions, the Company has taken such other steps as are reasonably necessary to effect its indemnification policy. Included among such other steps is liability insurance provided by the Company for its directors and officers for certain losses arising from claims or charges made against them in their capacities as directors or officers of the Company. The Company has also entered into indemnification agreements with individual officers and directors. These agreements generally provide such officers and directors with a contractual right to indemnification to the full extent provided by applicable law and the By-laws of the Company as in effect at the respective dates of such agreements.
Agreements which may be entered into with underwriters, dealers and agents who participate in the distribution of securities of the Company may contain provisions relating to the indemnification of the Company's officers and directors.
The Company has placed in effect insurance which purports (a) to insure it against certain costs of indemnification which may be incurred by it pursuant to the aforementioned By-law provision or otherwise and (b) to insure the officers and directors of the Company and of specified subsidiaries against certain liabilities incurred by them in the discharge of their functions as officers and directors except for liabilities arising from their own malfeasance.
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ITEM 21. EXHIBITS AND FINANCIAL SCHEDULES
The following instruments and documents are included as Exhibits to this Registration Statement. Exhibits incorporated by reference are so indicated by parenthetical information.
Exhibit No. Exhibit
4.1 -- Indenture dated as of September 1, 1997,
between Global Marine Inc. and Wilmington
Trust Company, as Trustee.
4.2 -- Purchase Agreement, dated as of September
10, 1997, between Global Marine Inc. and
Salomon Brothers Inc individually and as
representative of the Initial Purchasers.
4.3 -- Registration Rights Agreement dated
September 15, 1997, between Global Marine
Inc. and Salomon Brothers Inc, individually
and as representative of the Initial
Purchasers.
4.4 -- Form of 7 1/8% Exchange Note Due 2007.
4.5 -- Terms of 7 1/8% Notes Due 2007.
5* -- Opinion of Baker & Botts, L.L.P.
12 -- Computation of ratio of earnings to fixed
charges.
15 -- Awareness Letter of Coopers & Lybrand L.L.P.
23.1 -- Consent of Coopers & Lybrand L.L.P.
23.2* -- Consent of Baker & Botts, L.L.P.
(contained in the opinion filed as
Exhibit 5).
24 -- Powers of Attorney (included on the
signature page contained in Part II of the
Registration Statement).
25 -- Form T-1 Statement of Eligibility of
Wilmington Trust Company to act as trustee
under the Indenture.
99.1 -- Form of Letter of Transmittal.
99.2 -- Form of Notice of Guaranteed Delivery.
------------------------------
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* To be filed by amendment
ITEM 22. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar
II-2
value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) under the Securities Act if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement.
(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement:
Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 or Section 15(d) of the Exchange Act that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
The Company hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the Company's annual report pursuant to section 13(a) or section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan's annual report pursuant to section 15(d) of the Exchange Act) that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Company pursuant to the provisions described under Item 20 above, or otherwise, the Company has been advised that, in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the Company in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Company will, unless, in the opinion of its counsel, the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes to respond to requests for information that is incorporated by reference into the Prospectus pursuant to Item 4, 10(b), 11, or 13 of this Form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the Registration Statement through the date of responding to the request.
The undersigned registrant hereby undertakes to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the Registration Statement when it became effective.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Houston, the State of Texas on October 29, 1997.
GLOBAL MARINE INC.
By: /s/ C. Russell Luigs
---------------------------------
C. Russell Luigs
Chairman of the Board and
Chief Executive Officer
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KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Gary L. Kott, James L. McCulloch and Alexander A. Krezel, and each or any one of them, his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Registration Statement, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of the, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of the, or their or his substitutes or substitute, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
Name Title Date
---- ----- ----
/s/ C. Russell Luigs Chairman of the Board and Chief October 29, 1997
------------------------------------------ Executive Officer (Principal Executive
C. Russell Luigs Officer and Director)
/s/ Gary L. Kott Senior Vice President and Chief October 29, 1997
------------------------------------------ Financial Officer
Gary L. Kott (Principal Financial Officer)
/s/ Thomas R. Johnson Vice President and Corporate Controller October 29, 1997
------------------------------------------ (Principal Accounting Officer)
Thomas R. Johnson
/s/ Donald B. Brown Director October 29, 1997
------------------------------------------
Donald B. Brown
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/s/ Edward J. Campbell Director October 29, 1997
------------------------------------------
Edward J. Campbell
/s/ Thomas W. Cason Director October 29, 1997
------------------------------------------
Thomas W. Cason
/s/ John M. Galvin Director October 29, 1997
------------------------------------------
John M. Galvin
/s/ Jerry C. Martin Director October 29, 1997
------------------------------------------
Jerry C. Martin
/s/ Edward R. Muller Director October 29, 1997
------------------------------------------
Edward R. Muller
Director
------------------------------------------
Paul J. Powers
/s/ Ben G. Streetman Director October 29, 1997
------------------------------------------
Ben G. Streetman
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Exhibit No. Exhibit
----------- -------
4.1 -- Indenture dated as of September 1, 1997, between Global Marine Inc. and
Wilmington Trust Company, as Trustee.
4.2 -- Purchase Agreement, dated as of September 10, 1997, between Global Marine
Inc. and Salomon Brothers Inc individually and as representative of the
Initial Purchasers.
4.3 -- Registration Rights Agreement dated September 15, 1997, between Global
Marine Inc. and Salomon Brothers Inc, individually and as representative
of the Initial Purchasers.
4.4 -- Form of 7 1/8% Exchange Note Due 2007.
4.5 -- Terms of 7 1/8% Notes Due 2007.
5* -- Opinion of Baker & Botts, L.L.P.
12 -- Computation of ratio of earnings to fixed charges.
15 -- Awareness Letter of Coopers & Lybrand L.L.P.
23.1 -- Consent of Coopers & Lybrand L.L.P.
23.2* -- Consent of Baker & Botts, L.L.P. (contained in the opinion filed as
Exhibit 5).
24 -- Powers of Attorney (included on the signature page contained in Part II
of the Registration Statement).
25 -- Form T-1 Statement of Eligibility of Wilmington Trust Company to act as
trustee under the Indenture.
99.1 -- Form of Letter of Transmittal.
99.2 -- Form of Notice of Guaranteed Delivery.
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* To be filed by amendment
EXHIBIT 4.1
GLOBAL MARINE INC.
as Issuer
and
WILMINGTON TRUST COMPANY
as Trustee
Indenture
Dated as of September 1, 1997
Debt Securities
GLOBAL MARINE INC.
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939
AND INDENTURE, DATED AS OF SEPTEMBER 1, 1997
Section of
Trust Indenture Section(s) of
Act of 1939 Indenture
----------- ---------
Section 310 (a)(1) . . . . . . . . . . . . . . . 7.10
(a)(2) . . . . . . . . . . . . . . . 7.10
(a)(3) . . . . . . . . . . . . . . . Not Applicable
(a)(4) . . . . . . . . . . . . . . . Not Applicable
(a)(5) . . . . . . . . . . . . . . . 7.10
(b) . . . . . . . . . . . . . . . . 7.08, 7.10
Section 311 (a) . . . . . . . . . . . . . . . . 7.11
(b) . . . . . . . . . . . . . . . . 7.11
(c) . . . . . . . . . . . . . . . . Not Applicable
Section 312 (a) . . . . . . . . . . . . . . . . 2.07
(b) . . . . . . . . . . . . . . . . 10.03
(c) . . . . . . . . . . . . . . . . 10.03
Section 313 (a) . . . . . . . . . . . . . . . . 7.06
(b) . . . . . . . . . . . . . . . . 7.06
(c) . . . . . . . . . . . . . . . . 7.06
(d) . . . . . . . . . . . . . . . . 7.06
Section 314 (a) . . . . . . . . . . . . . . . . 4.03, 4.04
(b) . . . . . . . . . . . . . . . . Not Applicable
(c)(1) . . . . . . . . . . . . . . . 10.04
(c)(2) . . . . . . . . . . . . . . . 10.04
(c)(3) . . . . . . . . . . . . . . . Not Applicable
(d) . . . . . . . . . . . . . . . . Not Applicable
(e) . . . . . . . . . . . . . . . . 10.05
Section 315 (a) . . . . . . . . . . . . . . . . 7.01(b)
(b) . . . . . . . . . . . . . . . . 7.05
(c) . . . . . . . . . . . . . . . . 7.01(a)
(d) . . . . . . . . . . . . . . . . 7.01(c)
(d)(1) . . . . . . . . . . . . . . . 7.01(c)(1)
(d)(2) . . . . . . . . . . . . . . . 7.01(c)(2)
(d)(3) . . . . . . . . . . . . . . . 7.01(c)(3)
(e) . . . . . . . . . . . . . . . . 6.11
Section 316 (a)(1)(A) . . . . . . . . . . . . . 6.05
(a)(1)(B) . . . . . . . . . . . . . 6.04
(a)(2) . . . . . . . . . . . . . . . Not Applicable
(a)(last sentence) . . . . . . . . . 2.11
(b) . . . . . . . . . . . . . . . . 6.07
Section 317 (a)(1) . . . . . . . . . . . . . . . 6.08
(a)(2) . . . . . . . . . . . . . . . 6.09
(b) . . . . . . . . . . . . . . . . 2.06
Section 318 (a) . . . . . . . . . . . . . . . . 10.01
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Note: This reconciliation and tie shall not, for any purpose, be deemed to be a part of the Indenture.
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01 Definitions . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02 Other Definitions . . . . . . . . . . . . . . . . . 8
SECTION 1.03 Incorporation by Reference of Trust Indenture Act . 8
SECTION 1.04 Rules of Construction . . . . . . . . . . . . . . . 9
ARTICLE II
THE SECURITIES
SECTION 2.01 Amount Unlimited; Issuable in Series . . . . . . . 9
SECTION 2.02 Denominations . . . . . . . . . . . . . . . . . . . 12
SECTION 2.03 Forms Generally . . . . . . . . . . . . . . . . . . 12
SECTION 2.04 Execution, Authentication, Delivery and Dating . . 12
SECTION 2.05 Registrar and Paying Agent . . . . . . . . . . . . 14
SECTION 2.06 Paying Agent to Hold Money in Trust . . . . . . . . 15
SECTION 2.07 Holder Lists . . . . . . . . . . . . . . . . . . . 15
SECTION 2.08 Transfer and Exchange . . . . . . . . . . . . . . . 15
SECTION 2.09 Replacement Securities . . . . . . . . . . . . . . 16
SECTION 2.10 Outstanding Securities . . . . . . . . . . . . . . 16
SECTION 2.11 Original Issue Discount, Foreign-Denominated and
Treasury Securities . . . . . . . . . . . . . . . . 17
SECTION 2.12 Temporary Securities . . . . . . . . . . . . . . . 17
SECTION 2.13 Cancellation . . . . . . . . . . . . . . . . . . . 17
SECTION 2.14 Payments; Defaulted Interest . . . . . . . . . . . 18
SECTION 2.15 Persons Deemed Owners . . . . . . . . . . . . . . . 18
SECTION 2.16 Computation of Interest . . . . . . . . . . . . . . 18
SECTION 2.17 Global Securities; Book-Entry Provisions. . . . . . 18
ARTICLE III
REDEMPTION
SECTION 3.01 Applicability of Article . . . . . . . . . . . . . 20
SECTION 3.02 Notice to the Trustee . . . . . . . . . . . . . . . 21
SECTION 3.03 Selection of Securities To Be Redeemed . . . . . . 21
SECTION 3.04 Notice of Redemption . . . . . . . . . . . . . . . 21
SECTION 3.05 Effect of Notice of Redemption . . . . . . . . . . 22
SECTION 3.06 Deposit of Redemption Price . . . . . . . . . . . . 22
SECTION 3.07 Securities Redeemed or Purchased in Part . . . . . 23
SECTION 3.08 Purchase of Securities . . . . . . . . . . . . . . 23
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SECTION 3.09 Mandatory and Optional Sinking Funds. . . . . . . . 23
SECTION 3.10 Satisfaction of Sinking Fund Payments
with Securities . . . . . . . . . . . . . . . . . 23
SECTION 3.11 Redemption of Securities for Sinking Fund . . . . . 24
ARTICLE IV
COVENANTS
SECTION 4.01 Payment of Securities . . . . . . . . . . . . . . . 24
SECTION 4.02 Maintenance of Office or Agency . . . . . . . . . . 25
SECTION 4.03 SEC Reports; Financial Statements . . . . . . . . . 25
SECTION 4.04 Compliance Certificate . . . . . . . . . . . . . . 26
SECTION 4.05 Corporate Existence . . . . . . . . . . . . . . . . 26
SECTION 4.06 Waiver of Stay, Extension or Usury Laws . . . . . . 26
SECTION 4.07 Additional Amounts . . . . . . . . . . . . . . . . 27
SECTION 4.08 Limitation on Liens. . . . . . . . . . . . . . . . 27
SECTION 4.09 Limitation on Sale/Leaseback Transactions. . . . . 28
ARTICLE V
SUCCESSORS
SECTION 5.01 Limitations on Mergers and Consolidations . . . . . 29
SECTION 5.02 Successor Person Substituted . . . . . . . . . . . 29
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.01 Events of Default . . . . . . . . . . . . . . . . . 30
SECTION 6.02 Acceleration . . . . . . . . . . . . . . . . . . . 32
SECTION 6.03 Other Remedies . . . . . . . . . . . . . . . . . . 32
SECTION 6.04 Waiver of Existing Defaults . . . . . . . . . . . . 32
SECTION 6.05 Control by Majority . . . . . . . . . . . . . . . . 33
SECTION 6.06 Limitations on Suits . . . . . . . . . . . . . . . 33
SECTION 6.07 Rights of Holders to Receive Payment . . . . . . . 34
SECTION 6.08 Collection Suit by Trustee . . . . . . . . . . . . 34
SECTION 6.09 Trustee May File Proofs of Claim . . . . . . . . . 34
SECTION 6.10 Priorities . . . . . . . . . . . . . . . . . . . . 35
SECTION 6.11 Undertaking for Costs . . . . . . . . . . . . . . . 35
ARTICLE VII
TRUSTEE
SECTION 7.01 Duties of Trustee . . . . . . . . . . . . . . . . . 36
SECTION 7.02 Rights of Trustee . . . . . . . . . . . . . . . . . 37
SECTION 7.03 May Hold Securities . . . . . . . . . . . . . . . . 37
SECTION 7.04 Trustee's Disclaimer . . . . . . . . . . . . . . . 38
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SECTION 7.05 Notice of Defaults . . . . . . . . . . . . . . . . 38
SECTION 7.06 Reports by Trustee to Holders . . . . . . . . . . . 38
SECTION 7.07 Compensation and Indemnity . . . . . . . . . . . . 38
SECTION 7.08 Replacement of Trustee . . . . . . . . . . . . . . 39
SECTION 7.09 Successor Trustee by Merger, etc. . . . . . . . . . 41
SECTION 7.10 Eligibility; Disqualification . . . . . . . . . . . 41
SECTION 7.11 Preferential Collection of Claims Against Company . 41
ARTICLE VIII
DISCHARGE OF INDENTURE
SECTION 8.01 Termination of Company's Obligations . . . . . . . 42
SECTION 8.02 Application of Trust Money . . . . . . . . . . . . 45
SECTION 8.03 Repayment to Company . . . . . . . . . . . . . . . 46
SECTION 8.04 Reinstatement . . . . . . . . . . . . . . . . . . . 46
ARTICLE IX
SUPPLEMENTAL INDENTURES AND AMENDMENTS
SECTION 9.01 Without Consent of Holders . . . . . . . . . . . . 46
SECTION 9.02 With Consent of Holders . . . . . . . . . . . . . . 48
SECTION 9.03 Compliance with Trust Indenture Act . . . . . . . . 49
SECTION 9.04 Revocation and Effect of Consents . . . . . . . . . 49
SECTION 9.05 Notation on or Exchange of Securities . . . . . . . 50
SECTION 9.06 Trustee to Sign Amendments, etc. . . . . . . . . . 50
ARTICLE X
MISCELLANEOUS
SECTION 10.01 Trust Indenture Act Controls . . . . . . . . . . . 51
SECTION 10.02 Notices . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 10.03 Communication by Holders with Other Holders . . . . 52
SECTION 10.04 Certificate and Opinion as to Conditions Precedent. 52
SECTION 10.05 Statements Required in Certificate or Opinion . . . 52
SECTION 10.06 Rules by Trustee and Agents . . . . . . . . . . . . 53
SECTION 10.07 Legal Holidays . . . . . . . . . . . . . . . . . . 53
SECTION 10.08 No Recourse Against Others . . . . . . . . . . . . 53
SECTION 10.09 Governing Law . . . . . . . . . . . . . . . . . . . 53
SECTION 10.10 No Adverse Interpretation of Other Agreements . . . 53
SECTION 10.11 Successors . . . . . . . . . . . . . . . . . . . . 54
SECTION 10.12 Severability . . . . . . . . . . . . . . . . . . . 54
SECTION 10.13 Counterpart Originals . . . . . . . . . . . . . . . 54
SECTION 10.14 Table of Contents, Headings, etc. . . . . . . . . . 54
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INDENTURE dated as of September 1, 1997 between Global Marine Inc., a Delaware corporation (the "Company"), and Wilmington Trust Company, as trustee (the "Trustee").
Each party agrees as follows for the benefit of the other party and for the equal and ratable benefit of the Holders of the Company's unsecured debentures, notes or other evidences of indebtedness (the "Securities") to be issued from time to time in one or more series as provided in this Indenture:
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01 Definitions.
"Additional Amounts" means any additional amounts required by the express terms of a Security or by or pursuant to a Board Resolution, under circumstances specified therein or pursuant thereto, to be paid by the Company with respect to certain taxes, assessments or other governmental charges imposed on certain Holders and that are owing to such Holders.
"Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by, or under direct or indirect common control with, such specified Person. For purposes of this definition, "control" of a Person shall mean the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, and the terms "controlling" and "controlled" shall have meanings correlative to the foregoing.
"Agent" means any Registrar or Paying Agent.
"Attributable Indebtedness," when used with respect to any Sale/Leaseback Transaction, means, as at the time of determination, the present value (discounted at the rate set forth or implicit in the terms of the lease included in such transaction) of the total obligations of the lessee for rental payments (other than amounts required to be paid on account of taxes, maintenance, repairs, insurance, assessments, utilities, operating and labor costs and other items which do not constitute payments for property rights) during the remaining term of the lease included in such Sale/Leaseback Transaction (including any period for which such lease has been extended). In the case of any lease which is terminable by the lessee upon the payment of a penalty, such net amount shall be the lesser of the net amount determined assuming termination upon the first date such lease may be terminated (in which case the net amount shall also include the amount of the penalty, but no rent shall be considered as required to be paid under such lease subsequent to the first date upon which it may be so terminated) or the net amount determined assuming no such termination.
"Bankruptcy Law" means Title 11 of the United States Code or any similar federal, state or foreign law for the relief of debtors.
"Board of Directors" means the Board of Directors of the Company or any committee thereof duly authorized, with respect to any particular matter, to act by or on behalf of the Board of Directors of the Company.
"Board Resolution" means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification, and delivered to the Trustee.
"Business Day" means any day that is not a Legal Holiday.
"Capitalized Lease Obligation" of any Person means any obligation of such Person to pay rent or other amounts under a lease of property, real or personal, that is required to be capitalized for financial reporting purposes in accordance with GAAP; and the amount of such obligation shall be the capitalized amount thereof determined in accordance with GAAP.
"Company" means the Person named as the "Company" in the first paragraph of this instrument until a successor corporation shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Company" shall mean such successor corporation; provided, however, that for purposes of any provision contained herein which is required by the TIA, "Company" shall also mean each other obligor (if any) on the Securities of a series.
"Company Order" and "Company Request" mean, respectively, a written order or request signed in the name of the Company by two Officers of the Company, and delivered to the Trustee.
"Consolidated Net Tangible Assets" means the total amount of assets (less applicable reserves and other properly deductible items) after deducting (1) all current liabilities (excluding the amount of those which are by their terms extendable or renewable at the option of the obligor to a date more than 12 months after the date as of which the amount is being determined and current maturities of long-term debt) and (2) all goodwill, tradenames, trademarks, patents, unamortized debt discount and expense and other like intangible assets, all as set forth on the most recent quarterly balance sheet of the Company and its consolidated subsidiaries and determined in accordance with GAAP.
"Corporate Trust Office" of the Trustee means the office of the Trustee located at Rodney Square North, 1100 North Market Street, Wilmington, Delaware 19890, and as may be located at such other address as the Trustee may give notice to the Company.
"Default" means any event, act or condition that is, or after notice or the passage of time or both would be, an Event of Default.
"Depositary" means, with respect to the Securities of any series issuable or issued in whole or in part in global form, the Person specified pursuant to Section 2.01 hereof as the initial Depositary with respect to the Securities of such series, until a successor shall have been appointed
and become such pursuant to the applicable provision of this Indenture, and thereafter "Depositary" shall mean or include such successor.
"Dollar" or "$" means a dollar or other equivalent unit in such coin or currency of the United States as at the time shall be legal tender for the payment of public and private debt.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and any successor statute.
"Funded Indebtedness" means all Indebtedness (including Indebtedness incurred under any revolving credit, letter of credit or working capital facility) that matures by its terms, or that is renewable at the option of any obligor thereon to a date more than one year after the date on which such Indebtedness is originally incurred.
"GAAP" means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as may be approved by a significant segment of the accounting profession of the United States, as in effect from time to time.
"Global Security" means a Security that is issued in global form in the name of the Depositary with respect thereto or its nominee.
"Government Obligations" means, with respect to a series of Securities, direct obligations of the government that issues the currency in which the Securities of the series are payable for the payment of which the full faith and credit of such government is pledged, or obligations of a person controlled or supervised by and acting as an agency or instrumentality of such government, the payment of which is unconditionally guaranteed as a full faith and credit obligation by such government.
"Holder" means a Person in whose name a Security is registered.
"Indebtedness" of any Person means, without duplication, (i) all indebtedness of such Person for borrowed money (whether or not the recourse of the lender is to the whole of the assets of such Person or only to a portion thereof), (ii) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (iii) all obligations of such Person in respect of letters of credit or other similar instruments (or reimbursement obligations with respect thereto), other than standby letters of credit, performance bonds and other obligations issued by or for the account of such Person in the ordinary course of business, to the extent not drawn or, to the extent drawn, if such drawing is reimbursed not later than the third Business Day following demand for reimbursement, (iv) all obligations of such Person to pay the deferred and unpaid purchase price of property or services, except trade payables and accrued expenses incurred in the ordinary course of business, (v) all Capitalized Lease Obligations of such Person, (vi) all Indebtedness of others secured by a Lien on any asset of such Person, whether or not such Indebtedness is assumed by such Person
(provided that if the obligations so secured have not been assumed in full by
such Person or are not otherwise such Person's legal liability in full, then
such obligations shall be deemed to be in an amount equal to the greater of (a)
the lesser of (1) the full amount of such obligations and (2) the fair market
value of such assets, as determined in good faith by the Board of Directors of
such Person, which determination shall be evidenced by a Board Resolution, and
(b) the amount of obligations as have been assumed by such Person or which are
otherwise such Person's legal liability), and (vii) all Indebtedness of others
(other than endorsements in the ordinary course of business) guaranteed by such
Person to the extent of such guarantee.
"Indenture" means this Indenture as amended or supplemented from time to time, and includes the terms of a particular series of Securities established as contemplated by Section 2.01.
"interest" means, with respect to an Original Issue Discount Security that by its terms bears interest only after Maturity, interest payable after Maturity.
"Interest Payment Date," when used with respect to any Security, shall have the meaning assigned to such term in the Security as contemplated by Section 2.01.
"Issue Date" means, with respect to Securities of a series, the date on which the Securities of such series are originally issued under this Indenture.
"Joint Venture" means (1) with respect to properties located in the United States, any partnership, corporation or other entity, in which up to and including 50% of the partnership interests, outstanding voting stock or other equity interests is owned, directly or indirectly, by the Company and/or one or more subsidiaries, and (2) with respect to properties located outside the United States, any partnership, corporation or other entity, in which up to and including 60% of the partnership interests, outstanding voting stock or other equity interests is owned, directly or indirectly, by the Company and/or one or more Subsidiaries. A Joint Venture shall not be a Subsidiary.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking institutions in any of The City of New York, New York, Wilmington, Delaware, Houston, Texas or a Place of Payment are authorized or obligated by law, regulation or executive order to remain closed.
"Lien" means any mortgage, pledge, lien, encumbrance, charge or security interest. For purposes of this Indenture, the Company or any Subsidiary of the Company shall be deemed to own subject to a Lien any asset which it has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, Capitalized Lease Obligation or other title retention agreement relating to such asset.
"Maturity" means, with respect to any Security, the date on which the principal of such Security or an installment of principal becomes due and payable as therein or herein provided, whether at the stated maturity thereof, or by declaration of acceleration, call for redemption or otherwise.
"Officer" means the Chairman of the Board, the President, any Vice Chairman of the Board, any Vice President, the chief financial officer, the Treasurer, any Assistant Treasurer, the Controller, the Secretary or any Assistant Secretary of a Person.
"Officers' Certificate" means a certificate signed by two Officers of a Person.
"Opinion of Counsel" means a written opinion from legal counsel who is acceptable to the Trustee. Such counsel may be an employee of or counsel to the Company or the Trustee.
"Original Issue Discount Security" means any Security that
provides for an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration of the Maturity thereof pursuant to
Section 6.02.
"Pari Passu Indebtedness" means any Indebtedness of the Company, whether outstanding on the Issue Date or thereafter created, incurred or assumed, unless, in the case of any particular Indebtedness, the instrument creating or evidencing the same or pursuant to which the same is outstanding expressly provides that such Indebtedness shall be subordinated in right of payment to the Securities.
"Permitted Liens" shall mean (i) Liens existing on the Issue
Date of a series of Securities; (ii) Liens on property or assets of, or any
shares of stock of, or other equity interests in, or indebtedness of, any
Person existing at the time such Person becomes a Subsidiary of the Company or
at the time such Person is merged into or consolidated with the Company or any
of its Subsidiaries or at the time of a sale, lease or other disposition of the
properties of a Person (or a division thereof) as an entirety or substantially
as an entirety to the Company or a Subsidiary; (iii) Liens in favor of the
Company or any of its Subsidiaries; (iv) Liens in favor of governmental bodies
to secure progress or advance payments; (v) Liens securing industrial revenue
or pollution control bonds; (vi) Liens on assets existing at the time of
acquisition thereof, securing all or any portion of the cost of acquiring,
constructing, improving, developing or expanding such assets or securing
Indebtedness incurred prior to, at the time of, or within 24 months after, the
later of the acquisition, the completion of construction, improvement,
development or expansion or the commencement of commercial operation of such
assets, for the purpose of (a) financing all or any part of the purchase price
of such assets or (b) financing all or any part of the cost of construction,
improvement, development or expansion of any such assets; (vii) statutory liens
or landlords', carriers', warehouseman's, mechanics', suppliers',
materialmen's, repairmen's or other like Liens arising in the ordinary course
of business and with respect to amounts not yet delinquent or being contested
in good faith by appropriate proceedings; (viii) Liens on current assets of the
Company or any Subsidiary securing Indebtedness of the Company or such
Subsidiary, respectively; (ix) Liens on the stock, partnership or other equity
interest of the Company or any Subsidiary in any Joint Venture or any
Subsidiary that owns an equity interest in such Joint Venture to secure
Indebtedness, provided the amount of such Indebtedness is contributed and/or
advanced solely to such Joint Venture; and (x) any extensions, substitutions,
replacements or renewals in whole or in part of a Lien enumerated in clauses
(i) through (ix) above.
"Person" means any individual, corporation, partnership, limited liability company, joint venture, incorporated or unincorporated association, joint stock company, trust, unincorporated organization or government or other agency or political subdivision thereof or other entity of any kind.
"Place of Payment" means, with respect to the Securities of any series, the place or places where the principal of, premium (if any) on and interest on the Securities of that series are payable as specified in accordance with Section 2.01 subject to the provisions of Section 4.02.
"principal" of a Security means the principal of the Security plus, when appropriate, the premium, if any, on the Security.
"Principal Property" means any drilling rig or drillship, or integral portion thereof, owned or leased by the Company or any Subsidiary and used for drilling offshore oil and gas wells, which, in the opinion of the Board of Directors, is of material importance to the business of the Company and its Subsidiaries taken as a whole, but no such drilling rig or drillship, or portion thereof, shall be deemed of material importance if its net book value (after deducting accumulated depreciation) is less than 2% of Consolidated Net Tangible Assets.
"Redemption Date" means, with respect to any Security to be redeemed, the date fixed for such redemption pursuant to this Indenture.
"Redemption Price" means, with respect to any Security to be redeemed, the price at which it is to be redeemed pursuant to this Indenture.
"Rule 144A Securities" means Securities of a series designated pursuant to Section 2.01 as entitled to the benefits of Section 4.03(b).
"Sale/Leaseback Transaction" means any arrangement with any
Person pursuant to which the Company or any Subsidiary leases any Principal
Property that has been or is to be sold or transferred by the Company or the
Subsidiary to such Person, other than (1) temporary leases for a term,
including renewals at the option of the lessee, of not more than five years,
(2) leases between the Company and a Subsidiary or between Subsidiaries, (3)
leases of Principal Property executed by the time of, or within 12 months after
the latest of, the acquisition, the completion of construction or improvement,
or the commencement of commercial operation of the Principal Property, and (4)
arrangements pursuant to any provision of law with an effect similar to the
former Section 168(f)(8) of the Internal Revenue Code of 1954.
"SEC" means the Securities and Exchange Commission.
"Securities" has the meaning stated in the preamble of this Indenture and more particularly means any Securities authenticated and delivered under this Indenture.
"Security Custodian" means, with respect to Securities of a series, the Trustee for Securities of such series, as custodian with respect to the Securities of such series issued in global form, or any successor entity thereto.
"Stated Maturity" means, when used with respect to any Security or any installment of principal thereof or interest thereon, the date specified in such Security as the fixed date on which the principal of such Security or such installment of principal or interest is due and payable.
"Subsidiary" means a corporation more than 50% of the outstanding voting stock of which is owned, directly or indirectly, by the Company or by one or more other Subsidiaries, or by the Company and one or more other Subsidiaries. For the purposes of this definition, "voting stock" means stock that ordinarily has voting power for the election of directors, whether at all times or only so long as no senior class of stock has such voting power by reason of any contingency. A Joint Venture shall not be a Subsidiary.
"TIA" means the Trust Indenture Act of 1939, as amended (15 U.S.C. Sections 77aaa-77bbbb), as in effect on the date hereof.
"Trust Officer" means any officer or assistant officer of the Trustee assigned by the Trustee to administer its corporate trust matters.
"Trustee" means the Person, not in its individual capacity but solely as Trustee, named as such above until a successor replaces it in accordance with the applicable provisions of this Indenture, and thereafter "Trustee" means each Person who is then a Trustee hereunder, and if at any time there is more than one such Person, "Trustee" as used with respect to the Securities of any series means the Trustee with respect to Securities of that series.
"United States" means the United States of America (including the States and the District of Columbia) and its "possessions," which include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana Islands.
"United States Alien" means any Person who, for United States federal income tax purposes, is a foreign corporation, a nonresident alien individual, a nonresident alien or foreign fiduciary of an estate or trust, or a foreign partnership.
"U.S. Government Obligations" means Government Obligations with respect to Securities payable in Dollars.
SECTION 1.02 Other Definitions.
DEFINED
TERM IN SECTION
---- ----------
"Bankruptcy Custodian" . . . . . . . . . . . . . . . . . . . . . . 6.01
"covenant defeasance" . . . . . . . . . . . . . . . . . . . . . . . 8.01
"Conversion Event" . . . . . . . . . . . . . . . . . . . . . . . . 6.01
"Event of Default" . . . . . . . . . . . . . . . . . . . . . . . . 6.01
"Exchange Rate" . . . . . . . . . . . . . . . . . . . . . . . . . . 2.11
"Judgment Currency" . . . . . . . . . . . . . . . . . . . . . . . . 6.10
"legal defeasance" . . . . . . . . . . . . . . . . . . . . . . . . 8.01
"mandatory sinking fund payment" . . . . . . . . . . . . . . . . . 3.09
"optional sinking fund payment" . . . . . . . . . . . . . . . . . . 3.09
"Paying Agent" . . . . . . . . . . . . . . . . . . . . . . . . . . 2.05
"Registrar" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.05
"Required Currency" . . . . . . . . . . . . . . . . . . . . . . . . 6.10
"Successor" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.01
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SECTION 1.03 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture. The following TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company or any other obligor on the Securities.
All terms used in this Indenture that are defined by the TIA, defined by a TIA reference to another statute or defined by an SEC rule under the TIA have the meanings so assigned to them.
SECTION 1.04 Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural include the singular;
(5) provisions apply to successive events and transactions; and
(6) all references in this Agreement to Articles and Sections are references to the corresponding Articles and Sections in and of this Indenture.
ARTICLE II
THE SECURITIES
SECTION 2.01 Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities that may be authenticated and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be established in or pursuant to a Board Resolution, and set forth in an Officers' Certificate, or established in one or more indentures supplemental hereto, prior to the issuance of Securities of any series:
(1) the title of the Securities of the series (which shall distinguish the Securities of the series from the Securities all other series);
(2) any limit upon the aggregate principal amount of the Securities of the series that may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of the series pursuant to Section 2.08, 2.09, 2.12, 3.07 or 9.05);
(3) whether any Securities of the series are to be issuable initially in temporary global form and whether any Securities of the series are to be issuable in permanent global form, as Global Securities or otherwise, and, if so, whether beneficial owners of interests in any such Global Security may exchange such interests for Securities of such series and of like tenor of any authorized form and denomination and the circumstances under which any such exchanges may occur, if other than in the manner provided in Section 2.17, and the initial Depositary for any Global Security or Securities of such series;
(4) the manner in which any interest payable on a temporary Global Security on any Interest Payment Date will be paid if other than in the manner provided in Section 2.14;
(5) the date or dates on which the principal of (and premium, if any, on) the Securities of the series is payable or the method of determination thereof;
(6) the rate or rates, or the method of determination thereof, at which the Securities of the series shall bear interest, if any, whether and under what circumstances Additional Amounts with respect to such Securities shall be payable, the date or dates from which such interest shall accrue, the Interest Payment Dates on which such interest shall be payable and the record date for the interest payable on any Securities on any Interest Payment Date, or if other than provided herein, the Person to whom any interest on Securities of the series shall be payable;
(7) the place or places where, subject to the provisions of Section 4.02, the principal, premium (if any), interest and any Additional Amounts with respect to the Securities of the series shall be payable;
(8) the period or periods within which, the price or prices (whether denominated in cash, securities or otherwise) at which and the terms and conditions upon which Securities of the series may be redeemed, in whole or in part, at the option of the Company, if the Company is to have that option, and the manner in which the Company must exercise any such option, if different from those set forth herein;
(9) the obligation, if any, of the Company to redeem, purchase or repay Securities of the series pursuant to any sinking fund or analogous provisions or at the option of a Holder thereof and the period or periods within which, the price or prices (whether denominated in cash, securities or otherwise) at which and the terms and conditions upon which Securities of the series shall be redeemed, purchased or repaid in whole or in part pursuant to such obligation;
(10) if other than denominations of $1,000 and any integral multiple thereof, the denomination in which any Securities of that series shall be issuable;
(11) if other than Dollars, the currency or currencies (including composite currencies) in which payment of the principal, premium (if any), interest and any Additional Amounts with respect to the Securities of the series shall be payable;
(12) if the principal of, premium (if any) or interest on or any Additional Amounts with respect to the Securities of the series are to be payable, at the election of the Company or a Holder thereof, in a currency or currencies (including composite currencies) other than that in which the Securities are stated to be payable, the currency or currencies (including composite currencies) in which payment of the principal, premium (if any), interest and any Additional Amounts with respect to Securities of such series as to which such election is
made shall be payable, and the periods within which and the terms and conditions upon which such election is to be made;
(13) if the amount of payments of principal, premium (if any), interest and any Additional Amounts with respect to the Securities of the series may be determined with reference to any commodities, currencies or indices, values, rates or prices or any other index or formula, the manner in which such amounts shall be determined;
(14) if other than the entire principal amount thereof, the portion of the principal amount of Securities of the series that shall be payable upon declaration of acceleration of the Maturity thereof pursuant to Section 6.02;
(15) any additional means of satisfaction and discharge of this Indenture and any additional conditions or limitations to discharge with respect to Securities of the series pursuant to Article VIII or any modifications of or deletions from such conditions or limitations;
(16) any deletions or modifications of or additions to the Events of Default set forth in Section 6.01 or covenants of the Company set forth in Article IV pertaining to the Securities of the series;
(17) any restrictions or other provisions with respect to the transfer or exchange of Securities of the series, which may amend, supplement, modify or supersede those contained in this Article II;
(18) if the Securities of the series are to be convertible into or exchangeable for capital stock, other debt securities (including Securities), warrants, other equity securities or any other securities or property of the Company or any other Person, at the option of the Company or the Holder or upon the occurrence of any condition or event, the terms and conditions for such conversion or exchange;
(19) if the Securities of the series are to be entitled to the benefit of Section 4.03(b) (and accordingly constitute Rule 144A Securities); and
(20) any other terms of the series (which terms shall not be prohibited by the provisions of this Indenture).
All Securities of any one series shall be substantially identical except as to denomination and except as may otherwise be provided in or pursuant to the Board Resolution referred to above and (subject to Section 2.03) set forth, or determined in the manner provided, in the Officers' Certificate referred to above or in any such indenture supplemental hereto.
If any of the terms of the series are established by action taken pursuant to a Board Resolution, a copy of an appropriate record of such action together with such Board Resolution shall
be set forth in an Officers' Certificate and delivered to the Trustee at or prior to the delivery of the Officers' Certificate setting forth the terms of the series.
SECTION 2.02 Denominations.
The Securities of each series shall be issuable in such denominations as shall be specified as contemplated by Section 2.01. In the absence of any such provisions with respect to the Securities of any series, the Securities of such series denominated in Dollars shall be issuable in denominations of $1,000 and any integral multiples thereof.
SECTION 2.03 Forms Generally.
The Securities of each series shall be in fully registered form and in substantially such form or forms (including temporary or permanent global form) established by or pursuant to a Board Resolution or in one or more indentures supplemental hereto. The Securities may have notations, legends or endorsements required by law, securities exchange rule, the Company's certificate of incorporation, bylaws or other similar governing documents, agreements to which the Company is subject, if any, or usage (provided that any such notation, legend or endorsement is in a form acceptable to the Company). A copy of the Board Resolution establishing the form or forms of Securities of any series shall be delivered to the Trustee at or prior to the delivery of the Company Order contemplated by Section 2.04 for the authentication and delivery of such Securities.
The definitive Securities of each series shall be printed, lithographed or engraved on steel engraved borders or may be produced in any other manner, all as determined by the officers executing such Securities, as evidenced by their execution thereof.
The Trustee's certificate of authentication shall be in substantially the following form:
"This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.
WILMINGTON TRUST COMPANY, not in its individual capacity but solely as Trustee
SECTION 2.04 Execution, Authentication, Delivery and Dating.
Two Officers of the Company shall sign the Securities on behalf of the Company by manual or facsimile signature. The Company's seal, if any, shall be impressed, affixed, imprinted or reproduced on the Securities and may be in facsimile form.
If an Officer of the Company whose signature is on a Security no longer holds that office at the time the Security is authenticated, the Security shall be valid nevertheless.
A Security shall not be entitled to any benefit under this Indenture or be valid or obligatory for any purpose until authenticated by the manual signature of an authorized signatory of the Trustee, which signature shall be conclusive evidence that the Security has been authenticated under this Indenture. Notwithstanding the foregoing, if any Security has been authenticated and delivered hereunder but never issued and sold by the Company, and the Company delivers such Security to the Trustee for cancellation as provided in Section 2.13 together with a written statement (which need not comply with Section 10.05 and need not be accompanied by an Opinion of Counsel) stating that such Security has never been issued and sold by the Company, for all purposes of this Indenture such Security shall be deemed never to have been authenticated and delivered hereunder and shall never be entitled to the benefits of this Indenture.
The Trustee shall authenticate and deliver Securities of a series for original issue upon a Company Order for the authentication and delivery of such Securities or pursuant to such procedures acceptable to the Trustee as may be specified from time to time by Company Order. Such order shall specify the amount of the Securities to be authenticated, the date on which the original issue of Securities is to be authenticated, the name or names of the initial Holder or Holders and any other terms of the Securities of such series not otherwise determined. If provided for in such procedures, such Company Order may authorize (1) authentication and delivery of Securities of such series for original issue from time to time, with certain terms (including, without limitation, the Maturity dates or dates, original issue date or dates and interest rate or rates) that differ from Security to Security and (2) may authorize authentication and delivery pursuant to oral or electronic instructions from the Company or its duly authorized agent, which instructions shall be promptly confirmed in writing.
If the form or terms of the Securities of the series have been
established in or pursuant to one or more Board Resolutions as permitted by
Section 2.01, in authenticating such Securities, and accepting the additional
responsibilities under this Indenture in relation to such Securities, the
Trustee shall be entitled to receive (in addition to the Company Order referred
to above and the other documents required by Section 10.04), and (subject to
Section 7.01) shall be fully protected in relying upon,
(a) an Officers' Certificate certifying as to the Board Resolution and an appropriate record of any action taken pursuant thereto, as contemplated by the last paragraph of Section 2.01; and
(b) an Opinion of Counsel to the effect that:
(i) if the form of such Securities has been established by or pursuant to Board Resolution, as is permitted by Section 2.01, that such form has been established in conformity with the provisions of this Indenture;
(ii) if the terms of such Securities have been established by or pursuant to Board Resolution, as is permitted by Section 2.01, that such terms have been established in conformity with the provisions of this Indenture; and
(iii) that such Securities, when authenticated and delivered by the Trustee and issued by the Company in the manner and subject to any conditions specified in such Opinion of Counsel, will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except as the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar laws in effect from time to time affecting the rights of creditors generally, and the application of general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).
The Trustee shall not be required to authenticate such Securities if the issuance of such Securities pursuant to this Indenture would affect the Trustee's own rights, duties or immunities under the Securities and this Indenture or otherwise in a manner not reasonably acceptable to the Trustee.
The Trustee may appoint an authenticating agent acceptable to the Company to authenticate Securities. Unless limited by the terms of such appointment, an authenticating agent may authenticate Securities whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as an Agent to deal with the Company or an Affiliate of the Company.
Each Security shall be dated the date of its authentication.
SECTION 2.05 Registrar and Paying Agent.
The Company shall maintain an office or agency for each series of Securities where Securities of such series may be presented for registration of transfer or exchange ("Registrar") and an office or agency where Securities of such series may be presented for payment ("Paying Agent"). The Registrar shall keep a register of the Securities of such series and of their transfer and exchange. The Company may appoint one or more co-registrars and one or more additional paying agents. The term "Registrar" includes any co-registrar and the term "Paying Agent" includes any additional paying agent.
The Company shall enter into an appropriate agency agreement with any Registrar or Paying Agent not a party to this Indenture. The agreement shall implement the provisions of this Indenture that relate to such Agent. The Company shall notify the Trustee of the name and address of any Agent not a party to this Indenture. The Company may change any Paying Agent or Registrar without notice to any Holder. If the Company fails to appoint or maintain another entity as Registrar or Paying Agent, the Trustee shall act as such. The Company or any of its Subsidiaries may act as Paying Agent or Registrar.
The Company initially appoints the Trustee as Registrar and Paying Agent.
SECTION 2.06 Paying Agent to Hold Money in Trust.
The Company shall require each Paying Agent other than the Trustee to agree in writing that the Paying Agent will hold in trust for the benefit of Holders or the Trustee all money held by the Paying Agent for the payment of principal of, premium, if any, or interest on or any Additional Amounts with respect to Securities and will notify the Trustee of any default by the Company in making any such payment. While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee and to account for any funds disbursed. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee and to account for any funds disbursed. Upon payment over to the Trustee and upon accounting for any funds disbursed, the Paying Agent (if other than the Company or a Subsidiary of the Company) shall have no further liability for the money. If the Company or a Subsidiary of the Company acts as Paying Agent, it shall segregate and hold in a separate trust fund for the benefit of the Holders all money held by it as Paying Agent. Each Paying Agent shall otherwise comply with TIA Section 317(b).
SECTION 2.07 Holder Lists.
The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Holders and shall otherwise comply with TIA Section 312(a). If the Trustee is not the Registrar with respect to a series of Securities, the Company shall furnish to the Trustee at least five Business Days before each Interest Payment Date with respect to a series of Securities, and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of Holders of such series, and the Company shall otherwise comply with TIA Section 312(a).
SECTION 2.08 Transfer and Exchange.
Except as set forth in Section 2.17 or as may be provided pursuant to Section 2.01:
When Securities of any series are presented to the Registrar with the request to register the transfer of such Securities or to exchange such Securities for an equal principal amount of Securities of the same series of like tenor and of other authorized denominations, the Registrar shall register the transfer or make the exchange as requested if its requirements for such transactions are met; provided, however, that the Securities presented or surrendered for registration of transfer or exchange shall be duly endorsed or accompanied by a written instruction of transfer in form reasonably satisfactory to the Registrar duly executed by the Holder thereof or by his attorney, duly authorized in writing, on which instruction the Registrar can rely.
To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate Securities at the
Registrar's written request and submission of the Securities or Global
Securities. No service charge shall be made to a Holder for any registration
of transfer or exchange (except as otherwise expressly permitted herein), but
the Company may require payment of a sum sufficient to cover any transfer tax
or similar governmental charge payable in connection therewith (other than such
transfer tax or similar governmental charge payable upon exchanges pursuant to
Section 2.12, 3.07 or 9.05). The Trustee shall authenticate Securities in
accordance with the provisions of Section 2.04. Notwithstanding any other provisions of this Indenture to the contrary, the Company shall not be required to register the transfer or exchange of (a) any Security selected for redemption in whole or in part pursuant to Article III, except the unredeemed portion of any Security being redeemed in part or (b) any Security during the period beginning 15 Business Days before the mailing of notice of any offer to repurchase Securities of the series required pursuant to the terms thereof or of redemption of Securities of a series to be redeemed and ending at the close of business on the date of mailing.
SECTION 2.09 Replacement Securities.
If any mutilated Security is surrendered to the Trustee, or if the Holder of a Security claims that the Security has been destroyed, lost or stolen and the Company and the Trustee receive evidence to their satisfaction of the destruction, loss or theft of such Security, the Company shall issue and the Trustee shall authenticate a replacement Security of the same series if the Trustee's requirements are met. If any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Security, pay such Security. If required by the Trustee or the Company, such Holder must furnish an indemnity bond that is sufficient in the judgment of the Trustee and the Company to protect the Company, the Trustee, any Agent or any authenticating agent from any loss that any of them may suffer if a Security is replaced. The Company and the Trustee may charge a Holder for their expenses in replacing a Security.
Every replacement Security is an additional obligation of the Company.
SECTION 2.10 Outstanding Securities.
The Securities outstanding at any time are all the Securities authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation, those reductions in the interest in a Global Security effected by the Trustee hereunder and those described in this Section 2.10 as not outstanding.
If a Security is replaced pursuant to Section 2.09, it ceases to be outstanding unless the Company and the Trustee receive proof that the replaced Security is held by a bona fide purchaser.
If the principal amount of any Security is considered paid under Section 4.01, it ceases to be outstanding and interest on it ceases to accrue.
A Security does not cease to be outstanding because the Company or an Affiliate of the Company holds the Security.
SECTION 2.11 Original Issue Discount, Foreign-Denominated and Treasury Securities.
In determining whether the Holders of the required principal amount of Securities have concurred in any direction, amendment, supplement, waiver or consent, (a) the principal amount of an Original Issue Discount Security shall be the principal amount thereof that would be due and payable as of the date of such determination upon acceleration of the Maturity thereof pursuant to Section 6.02, (b) the principal amount of a Security denominated in a foreign currency shall be the Dollar equivalent, as determined by the Company by reference to the noon buying rate in The City of New York for cable transfers for such currency, as such rate is certified for customs purposes by the Federal Reserve Bank of New York (the "Exchange Rate") on the date of original issuance of such Security, of the principal amount (or, in the case of an Original Issue Discount Security, the Dollar equivalent, as determined by the Company by reference to the Exchange Rate on the date of original issuance of such Security, of the amount determined as provided in (a) above), of such Security and (c) Securities owned by the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor shall be disregarded, except that, for the purpose of determining whether the Trustee shall be protected in relying upon any such direction, amendment, supplement, waiver or consent, only Securities that the Trustee actually knows are so owned shall be so disregarded.
SECTION 2.12 Temporary Securities.
Until definitive Securities of any series are ready for delivery, the Company may prepare and the Trustee shall authenticate temporary Securities. Temporary Securities shall be substantially in the form of definitive Securities, but may have variations that the Company considers appropriate for temporary Securities. Without unreasonable delay, the Company shall prepare and the Trustee shall authenticate definitive Securities in exchange for temporary Securities. Until so exchanged, the temporary Securities shall in all respects be entitled to the same benefits under this Indenture as definitive Securities.
SECTION 2.13 Cancellation.
The Company at any time may deliver Securities to the Trustee for cancellation. The Registrar and the Paying Agent shall forward to the Trustee any Securities surrendered to them for registration of transfer, exchange, payment or redemption or for credit against any sinking fund payment. The Trustee shall cancel all Securities surrendered for registration of transfer, exchange, payment, redemption, replacement or cancellation or for credit against any sinking fund. Unless the Company shall direct in writing that canceled Securities be returned to it, after written notice to the Company all canceled Securities held by the Trustee shall be disposed of in accordance with the usual disposal procedures of the Trustee, and the Trustee shall maintain a record of their disposal. The Company may not issue new Securities to replace Securities that have been paid or that have been delivered to the Trustee for cancellation.
SECTION 2.14 Payments; Defaulted Interest.
The Company will pay interest on the Securities (except
defaulted interest) to the Persons who are registered Holders of Securities at
the close of business on the record date next preceding the Interest Payment
Date, even if such Securities are canceled after such record date and on or
before such Interest Payment Date. The Holder must surrender this Security to
a Paying Agent to collect principal payments. Unless otherwise provided with
respect to the Securities of any series, the Company will pay the principal of,
premium (if any) on, interest on or any Additional Amounts on the Securities in
Dollars. Such amounts shall be payable at the offices of the Trustee, provided
that at the option of the Company, the Company may, however, pay such amounts
(1) by wire transfer with respect to Global Securities or (2) by check payable
in such money mailed to a Holder's registered address with respect to any
Securities.
If the Company defaults in a payment of interest on the Securities, it shall pay the defaulted interest in any lawful manner plus, to the extent lawful, interest on the defaulted interest, in each case at the rate provided in the Securities and in Section 4.01. The Company may pay the defaulted interest to the Persons who are Holders on a subsequent special record date. At least 15 days before any special record date selected by the Company, the Company (or the Trustee, in the name of and at the expense of the Company upon 20 days' prior written notice from the Company setting forth such record date and the interest amount to be paid) shall mail to Holders a notice that states the special record date, the related payment date and the amount of such interest to be paid.
SECTION 2.15 Persons Deemed Owners.
The Company, the Trustee, any Agent and any authenticating agent may treat the Person in whose name any Security is registered as the owner of such Security for the purpose of receiving payments of principal of, premium (if any) on, interest on or any Additional Amounts on such Security and for all other purposes. None of the Company, the Trustee, any Agent or any authenticating agent shall be affected by any notice to the contrary.
SECTION 2.16 Computation of Interest.
Except as otherwise specified as contemplated by Section 2.01 for Securities of any series, interest on the Securities of each series shall be computed on the basis of a year comprising twelve 30-day months.
SECTION 2.17 Global Securities; Book-Entry Provisions.
If Securities of a series are issuable in global form as a
Global Security, as contemplated by Section 2.01, then, notwithstanding clause
(10) of Section 2.01 and the provisions of Section 2.02, any such Global
Security shall represent such of the outstanding Securities of such series as
shall be specified therein and may provide that it shall represent the
aggregate amount of outstanding Securities from time to time endorsed thereon
and that the aggregate amount of outstanding Securities represented thereby may
from time to time be reduced to reflect exchanges. Any endorsement of a Global
Security to reflect the amount, or any increase or decrease in the
amount, of outstanding Securities represented thereby shall be made by the Trustee in such manner and upon instructions given by such Person or Persons as shall be specified in such Security or in a Company Order to be delivered to the Trustee pursuant to Section 2.04. Subject to the provisions of Section 2.04 and, if applicable, Section 2.12, the Trustee shall deliver and redeliver any Security in permanent global form in the manner and upon instructions given by the Person or Persons specified in such Security or in the applicable Company Order. With respect to the Securities of any series that are represented by a Global Security, the Company authorizes the execution and delivery by the Trustee of a letter of representations or other similar agreement or instrument in the form customarily provided for by the Depositary appointed with respect to such Global Security. Any Global Security may be deposited with the Depositary or its nominee, or may remain in the custody of the Trustee pursuant to a FAST Balance Certificate Agreement or similar agreement between the Trustee and the Depositary. If a Company Order has been, or simultaneously is, delivered, any instructions by the Company with respect to endorsement or delivery or redelivery of a Security in global form shall be in writing but need not comply with Section 10.05 and need not be accompanied by an Opinion of Counsel.
Members of, or participants in, the Depositary ("Agent
Members") shall have no rights under this Indenture with respect to any Global
Security held on their behalf by the Depositary, or the Trustee as its
custodian, or under such Global Security and the Depositary may be treated by
the Company, the Trustee and any agent of the Company or the Trustee as the
absolute owner of such Global Security for all purposes whatsoever.
Notwithstanding the foregoing, (i) the registered holder of a Global Security
may grant proxies and otherwise authorize any Person, including Agent Members
and Persons that may hold interests through Agent Members, to take any action
that a Holder is entitled to take under this Indenture or the Securities and
(ii) nothing herein shall prevent the Company, the Trustee or any agent of the
Company or the Trustee, from giving effect to any written certification, proxy
or other authorization furnished by the Depositary or shall impair, as between
the Depositary and its Agent Members, the operation of customary practices
governing the exercise of the rights of a beneficial owner of any Security.
Notwithstanding Section 2.08, and except as otherwise provided
pursuant to Section 2.01: Transfers of a Global Security shall be limited to
transfers of such Global Security in whole, but not in part, to the Depositary,
its successors or their respective nominees. Interests of beneficial owners in
a Global Security may be transferred in accordance with the rules and
procedures of the Depositary. Securities shall be transferred to all
beneficial owners in exchange for their beneficial interests in a Global
Security if, and only if, either (1) the Depositary notifies the Company that
it is unwilling or unable to continue as Depositary for the Global Security and
a successor Depositary is not appointed by the Company within 90 days of such
notice, (2) an Event of Default has occurred with respect to such series and is
continuing and the Registrar has received a request from the Depositary to
issue Securities in lieu of all or a portion of the Global Security (in which
case the Company shall deliver Securities within 30 days of such request) or
(3) the Company determines not to have the Securities represented by a Global
Security.
In connection with any transfer of a portion of the beneficial interest in a Global Security to beneficial owners pursuant to this Section 2.17, the Registrar shall reflect on its books and records the date and a decrease in the principal amount of the Global Security in an amount
equal to the principal amount of the beneficial interest in the Global Security to be transferred, and the Company shall execute, and the Trustee upon receipt of a Company Order for the authentication and delivery of Securities shall authenticate and deliver, one or more Securities of the same series of like tenor and amount.
In connection with the transfer of an entire Global Security to beneficial owners pursuant to this Section 2.17, the Global Security shall be deemed to be surrendered to the Trustee for cancellation, and the Company shall execute, and the Trustee shall authenticate and deliver, to each beneficial owner identified by the Depositary in exchange for its beneficial interest in the Global Security, an equal aggregate principal amount of Securities of authorized denominations.
Neither the Company nor the Trustee will have any responsibility or liability for any aspect of the records relating to, or payments made on account of, Securities by the Depositary, or for maintaining, supervising or reviewing any records of the Depositary relating to such Securities. Neither the Company nor the Trustee shall be liable for any delay by the related Global Security Holder or the Depositary in identifying the beneficial owners, and each such Person may conclusively rely on, and shall be protected in relying on, instructions from such Global Security Holder or the Depositary for all purposes (including with respect to the registration and delivery, and the respective principal amounts, of the Securities to be issued).
The provisions of the last sentence of the third paragraph of
Section 2.04 shall apply to any Global Security if such Global Security was
never issued and sold by the Company and the Company delivers to the Trustee
the Global Security together with written instructions (which need not comply
with Section 10.05 and need not be accompanied by an Opinion of Counsel) with
regard to the cancellation or reduction in the principal amount of Securities
represented thereby, together with the written statement contemplated by the
last sentence of the third paragraph of Section 2.04.
Notwithstanding the provisions of Sections 2.03 and 2.14, unless otherwise specified as contemplated by Section 2.01, payment of principal of, premium (if any) or interest on and any Additional Amounts with respect to any Global Security shall be made to the Person or Persons specified therein.
ARTICLE III
REDEMPTION
SECTION 3.01 Applicability of Article.
Securities of any series that are redeemable before their Stated Maturity shall be redeemable in accordance with their terms and (except as otherwise specified as contemplated by Section 2.01 for Securities of any series) in accordance with this Article III.
SECTION 3.02 Notice to the Trustee.
If the Company elects to redeem Securities of any series pursuant to this Indenture, it shall notify the Trustee of the Redemption Date and principal amount of Securities of such series to be redeemed. The Company shall so notify the Trustee at least 45 days before the Redemption Date (unless a shorter notice shall be satisfactory to the Trustee) by delivering to the Trustee an Officers' Certificate stating that such redemption will comply with the provisions of this Indenture and of the Securities of such series. Any such notice may be canceled at any time prior to the mailing of such notice of such redemption to any Holder and shall thereupon be void and of no effect.
SECTION 3.03 Selection of Securities To Be Redeemed.
If less than all the Securities of any series are to be redeemed, the particular Securities to be redeemed shall be selected not more than 60 days prior to the Redemption Date by the Trustee, from the outstanding Securities of such series not previously called for redemption, pro rata, by lot or by such other method as the Trustee shall deem fair and appropriate and that may provide for the selection for redemption of portions (equal to the minimum authorized denomination for Securities of that series or any integral multiple thereof) of the principal amount of Securities of such series of a denomination larger than the minimum authorized denomination for Securities of that series or of the principal amount of global Securities of such series.
The Trustee shall promptly notify the Company and the Registrar in writing of the Securities selected for redemption and, in the case of any Securities selected for partial redemption, the principal amount thereof to be redeemed.
For purposes of this Indenture, unless the context otherwise requires, all provisions relating to redemption of Securities shall relate, in the case of any of the Securities redeemed or to be redeemed only in part, to the portion of the principal amount thereof which has been or is to be redeemed.
SECTION 3.04 Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption Date, to each Holder of Securities to be redeemed, at the address of such Holder appearing in the register of Securities maintained by the Registrar.
All notices of redemption shall identify the Securities to be redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) that, unless the Company defaults in making the redemption payment, interest on Securities called for redemption ceases to accrue on and after the Redemption Date, and the only remaining right of the Holders of such Securities is to receive payment of the Redemption Price upon surrender to the Paying Agent of the Securities redeemed;
(4) if any Security is to be redeemed in part, the portion of the principal amount thereof to be redeemed and that on and after the Redemption Date, upon surrender for cancellation of such Security to the Paying Agent, a new Security or Securities in the aggregate principal amount equal to the unredeemed portion thereof will be issued without charge to the Holder;
(5) that Securities called for redemption must be surrendered to the Paying Agent to collect the Redemption Price and the name and address of the Paying Agent;
(6) that the redemption is for a sinking or analogous fund, if such is the case; and
(7) the CUSIP number, if any, relating to such Securities.
Notice of redemption of Securities to be redeemed at the election of the Company shall be given by the Company or, at the Company's written request, by the Trustee in the name and at the expense of the Company.
SECTION 3.05 Effect of Notice of Redemption.
Once notice of redemption is mailed, Securities called for redemption become due and payable on the Redemption Date and at the Redemption Price. Upon surrender to the Paying Agent, such Securities called for redemption shall be paid at the Redemption Price, but interest installments whose maturity is on or prior to such Redemption Date will be payable on the relevant Interest Payment Dates to the Holders of record at the close of business on the relevant record dates specified pursuant to Section 2.01.
SECTION 3.06 Deposit of Redemption Price.
On or prior to any Redemption Date, the Company shall deposit with the Trustee or the Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and hold in trust as provided in Section 2.06) an amount of money in same day funds sufficient to pay the Redemption Price of, and (except if the Redemption Date shall be an Interest Payment Date) accrued interest on and any Additional Amounts with respect to, the Securities or portions thereof which are to be redeemed on that date, other than Securities or portions thereof called for redemption on that date which have been delivered by the Company to the Trustee for cancellation.
If the Company complies with the preceding paragraph, then, unless the Company defaults in the payment of such Redemption Price, interest on the Securities to be redeemed will cease to accrue on and after the applicable Redemption Date, whether or not such Securities are presented for payment, and the Holders of such Securities shall have no further rights with respect
to such Securities except for the right to receive the Redemption Price upon surrender of such Securities. If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the principal, premium, if any, any Additional Amounts, and, to the extent lawful, accrued interest thereon shall, until paid, bear interest from the Redemption Date at the rate specified pursuant to Section 2.01 or, in the case of Original Issue Discount Securities, such Securities' yield to maturity.
SECTION 3.07 Securities Redeemed or Purchased in Part.
Upon surrender to the Paying Agent of a Security to be redeemed in part, the Company shall execute and the Trustee shall authenticate and deliver to the Holder of such Security without service charge a new Security or Securities, of the same series and of any authorized denomination as requested by such Holder in aggregate principal amount equal to, and in exchange for, the unredeemed portion of the principal of the Security so surrendered that is not redeemed.
SECTION 3.08 Purchase of Securities.
Unless otherwise specified as contemplated by Section 2.01, the Company and any Affiliate of the Company may at any time purchase or otherwise acquire Securities in the open market or by private agreement. Such acquisition shall not operate as or be deemed for any purpose to be a redemption of the indebtedness represented by such Securities. Any Securities purchased or acquired by the Company may be delivered to the Trustee and, upon such delivery, the indebtedness represented thereby shall be deemed to be satisfied. Section 2.13 shall apply to all Securities so delivered.
SECTION 3.09 Mandatory and Optional Sinking Funds.
The minimum amount of any sinking fund payment provided for by the terms of Securities of any series is herein referred to as a "mandatory sinking fund payment," and any payment in excess of such minimum amount provided for by the terms of Securities of any series is herein referred to as an "optional sinking fund payment." Unless otherwise provided by the terms of Securities of any series, the cash amount of any sinking fund payment may be subject to reduction as provided in Section 3.10. Each sinking fund payment shall be applied to the redemption of Securities of any series as provided for by the terms of Securities of such series and by this Article III.
SECTION 3.10 Satisfaction of Sinking Fund Payments with Securities.
The Company may deliver outstanding Securities of a series (other than any previously called for redemption) and may apply as a credit Securities of a series that have been redeemed either at the election of the Company pursuant to the terms of such Securities or through the application of permitted optional sinking fund payments pursuant to the terms of such Securities, in each case in satisfaction of all or any part of any sinking fund payment with respect to the Securities of such series required to be made pursuant to the terms of such series of Securities; provided that such Securities have not been previously so credited. Such Securities shall be received
and credited for such purpose by the Trustee at the Redemption Price specified in such Securities for redemption through operation of the sinking fund and the amount of such sinking fund payment shall be reduced accordingly.
SECTION 3.11 Redemption of Securities for Sinking Fund.
Not less than 45 days prior (unless a shorter period shall be
satisfactory to the Trustee) to each sinking fund payment date for any series
of Securities, the Company will deliver to the Trustee an Officers' Certificate
specifying the amount of the next ensuing sinking fund payment for that series
pursuant to the terms of that series, the portion thereof, if any, which is to
be satisfied by payment of cash and the portion thereof, if any, which is to be
satisfied by delivery of or by crediting Securities of that series pursuant to
Section 3.10 and will also deliver to the Trustee any Securities to be so
delivered. Failure of the Company to timely deliver such Officers' Certificate
and Securities specified in this paragraph, if any, shall not constitute a
default but shall constitute the election of the Company (i) that the mandatory
sinking fund payment for such series due on the next succeeding sinking fund
payment date shall be paid entirely in cash without the option to deliver or
credit Securities of such series in respect thereof and (ii) that the Company
will make no optional sinking fund payment with respect to such series as
provided in this Section.
If the sinking fund payment or payments (mandatory or optional
or both) to be made in cash on the next succeeding sinking fund payment date
plus any unused balance of any preceding sinking fund payments made in cash
shall exceed $100,000 (or the Dollar equivalent thereof based on the applicable
Exchange Rate on the date of original issue of the applicable Securities) or a
lesser sum if the Company shall so request with respect to the Securities of
any particular series, such cash shall be applied on the next succeeding
sinking fund payment date to the redemption of Securities of such series at the
sinking fund redemption price together with accrued interest to the date fixed
for redemption. If such amount shall be $100,000 (or the Dollar equivalent
thereof as aforesaid) or less and the Issuer makes no such request then it
shall be carried over until a sum in excess of $100,000 (or the Dollar
equivalent thereof as aforesaid) is available. Not less than 30 days before
each such sinking fund payment date, the Trustee shall select the Securities to
be redeemed upon such sinking fund payment date in the manner specified in
Section 3.03 and cause notice of the redemption thereof to be given in the name
of and at the expense of the Company in the manner provided in Section 3.04.
Such notice having been duly given, the redemption of such Securities shall be
made upon the terms and in the manner stated in Sections 3.05, 3.06 and 3.07.
ARTICLE IV
COVENANTS
SECTION 4.01 Payment of Securities.
The Company shall pay the principal of, premium (if any) and interest on and any Additional Amounts with respect to the Securities of each series on the dates and in the manner provided in the Securities of such series and in this Indenture. Principal, premium, interest and any Additional Amounts shall be considered paid on the date due if the Paying Agent, other than the Company or a Subsidiary of the Company, holds on that date money deposited by the Company
designated for and sufficient to pay all principal, premium, interest and any Additional Amounts then due.
The Company shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal and premium (if any), at a rate equal to the then applicable interest rate on the Securities to the extent lawful; and it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest and any Additional Amount (without regard to any applicable grace period) at the same rate to the extent lawful.
SECTION 4.02 Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for any series of Securities an office or agency (which may be an office of the Trustee, the Registrar or the Paying Agent) where Securities of that series may be presented for registration of transfer or exchange, where Securities of that series may be presented for payment and where notices and demands to or upon the Company in respect of the Securities of that series and this Indenture may be served. The Company will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more other offices or agencies where the Securities of one or more series may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in each Place of Payment for Securities of any series for such purposes. The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.
SECTION 4.03 SEC Reports; Financial Statements.
(a) The Company shall file with the Trustee, within 15 days after it files the same with the SEC, copies of the annual reports and the information, documents and other reports (or copies of such portions of any of the foregoing as the SEC may by rules and regulations prescribe) that the Company is required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act. The Company shall also comply with the provisions of TIA Section 314(a).
(b) If the Company is not subject to the requirements of
Section 13 or 15(d) of the Exchange Act, the Company shall furnish to all
Holders of Rule 144A Securities and prospective purchasers of Rule 144A
Securities designated by the Holders of Rule 144A Securities, promptly upon
their request, the information required to be delivered pursuant to Rule
144A(d)(4) promulgated under the Securities Act of 1933, as amended.
SECTION 4.04 Compliance Certificate.
(a) The Company shall deliver to the Trustee, within 120 days after the end of each fiscal year of the Company, a statement signed by two Officers of the Company, which need not constitute an Officers' Certificate, complying with TIA Section 314(a)(4) and stating that in the course of performance by the signing Officers of the Company of their duties as such Officers of the Company they would normally obtain knowledge of the keeping, observing, performing and fulfilling by the Company of its obligations under this Indenture, and further stating, as to each such Officer signing such statement, that to the best of his knowledge the Company has kept, observed, performed and fulfilled each and every covenant contained in this Indenture and is not in default in the performance or observance of any of the terms, provisions and conditions hereof (or, if a Default or Event of Default shall have occurred, describing all such Defaults or Events of Default of which such Officer may have knowledge and what action the Company is taking or proposes to take with respect thereto).
(b) The Company shall, so long as Securities of any series are outstanding, deliver to the Trustee, forthwith upon any Officer of the Company becoming aware of any Default or Event of Default under this Indenture, an Officers' Certificate specifying such Default or Event of Default and what action the Company is taking or proposes to take with respect thereto.
SECTION 4.05 Corporate Existence.
Subject to Article V hereof, the Company shall do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence and the corporate, partnership and other existence of each of its Subsidiaries and all rights (charter and statutory) and franchises of the Company and its Subsidiaries, provided that the Company shall not be required to preserve the corporate existence of any Subsidiary of the Company or any such right or franchise if the Board of Directors shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company and its Subsidiaries taken as a whole and that the loss thereof would not have a material adverse effect on the business, prospects, assets or financial condition of the Company and its Subsidiaries taken as a whole and would not have any material adverse effect on the payment and performance of the obligations of the Company under the Securities and this Indenture.
SECTION 4.06 Waiver of Stay, Extension or Usury Laws.
The Company covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law or any usury law or other law that would prohibit or forgive the Company from paying all or any portion of the principal of or interest on the Securities as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this Indenture; and (to the extent that it may lawfully do so) the Company hereby expressly waives all benefit or advantage of any such law, and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.
SECTION 4.07 Additional Amounts.
If the Securities of a series expressly provide for the payment of Additional Amounts, the Company will pay to the Holder of any Security of such series Additional Amounts as expressly provided therein. Whenever in this Indenture there is mentioned, in any context, the payment of the principal of or any premium or interest on, or in respect of, any Security of any series or the net proceeds received from the sale or exchange of any Security of any series, such mention shall be deemed to include mention of the payment of Additional Amounts provided for in this Section 4.07 to the extent that, in such context, Additional Amounts are, were or would be payable in respect thereof pursuant to the provisions of this Section 4.07 and express mention of the payment of Additional Amounts (if applicable) in any provisions hereof shall not be construed as excluding Additional Amounts in those provisions hereof where such express mention is not made.
Unless otherwise provided pursuant to Section 2.01 with respect to Securities of any series: If the Securities of a series provide for the payment of Additional Amounts, at least ten days prior to the first Interest Payment Date with respect to that series of Securities (or if the Securities of that series will not bear interest prior to Maturity, the first day on which a payment of principal and any premium is made), and at least ten days prior to each date of payment of principal and any premium or interest if there has been any change with respect to the matters set forth in the below-mentioned Officers' Certificate, the Company shall furnish the Trustee and the Company's principal Paying Agent or Paying Agents, if other than the Trustee, with an Officers' Certificate instructing the Trustee and such Paying Agent or Paying Agents whether such payment of principal of and any premium or interest on the Securities of that series shall be made to Holders of Securities of that series who are United States Aliens without withholding for or on account of any tax, assessment or other governmental charge described in the Securities of that series. If any such withholding shall be required, then such Officers' Certificate shall specify by country the amount, if any, required to be withheld on such payments to such Holders of Securities and the Company will pay to such Paying Agent the Additional Amounts required by this Section. The Company covenants to indemnify the Trustee and any Paying Agent for and to hold them harmless against any loss, liability or expense reasonably incurred without negligence or bad faith on their part arising out of or in connection with actions taken or omitted by any of them in reliance on any Officers' Certificate furnished pursuant to this Section 4.07.
SECTION 4.08 Limitation on Liens.
The Company shall not, and shall not permit any of its Subsidiaries to, issue, assume or guarantee any Indebtedness for borrowed money secured by any Lien upon any Principal Property or any shares of stock or indebtedness of any Subsidiary that owns or leases a Principal Property (whether such Principal Property, shares of stock or indebtedness are now owned or hereafter acquired) without making effective provision whereby the Securities (together with, if the Company shall so determine, any other Indebtedness or other obligation of the Company) shall be secured equally and ratably with (or, at the option of the Company, prior to) the Indebtedness so secured for so long as such Indebtedness is so secured. The foregoing restrictions will not, however, apply to Indebtedness secured by Permitted Liens.
Notwithstanding the foregoing, the Company and its Subsidiaries may, without securing the Securities, issue, assume or guarantee Indebtedness that would otherwise be subject to the foregoing restrictions in an aggregate principal amount that, together with all other such Indebtedness of the Company and its Subsidiaries that would otherwise be subject to the foregoing restrictions (not including Indebtedness permitted to be secured under the definition of Permitted Liens) and the aggregate amount of Attributable Indebtedness deemed outstanding with respect to Sale/Leaseback Transactions (other than those in connection with which the Company has voluntarily retired any of the Securities, any Pari Passu Indebtedness or any Funded Indebtedness pursuant to Section 4.09(c)) does not at any one time exceed 15% of Consolidated Net Tangible Assets of the Company and its consolidated subsidiaries.
SECTION 4.09 Limitation on Sale/Leaseback Transactions.
The Company shall not, and shall not permit any Subsidiary to, enter into any Sale/Leaseback Transaction with any person (other than the Company or a Subsidiary) unless:
(a) the Company or such Subsidiary would be entitled to incur Indebtedness in a principal amount equal to the Attributable Indebtedness with respect to such Sale/Leaseback Transaction secured by a Lien on the property subject to such Sale/Leaseback Transaction pursuant to Section 4.08 without equally and ratably securing the Securities pursuant to such covenant;
(b) after the Issue Date of the first series of Securities issued and within a period commencing nine months prior to the consummation of such Sale/Leaseback Transaction and ending nine months after the consummation thereof, the Company or such Subsidiary shall have expended for property used or to be used in the ordinary course of business of the Company and its Subsidiaries an amount equal to all or a portion of the net proceeds of such Sale/Leaseback Transaction and the Company shall have elected to designate such amount as a credit against such Sale/Leaseback Transaction (with any such amount not being so designated to be applied as set forth in clause (c) below or as otherwise permitted); or
(c) the Company, during the nine-month period after the effective date of such Sale/Leaseback Transaction, shall have applied to either (i) the voluntary defeasance or retirement of any Securities, any Pari Passu Indebtedness or any Funded Indebtedness or (ii) the acquisition of one or more Principal Properties at fair value, an amount equal to the greater of the net proceeds of the sale or transfer of the property leased in such Sale/Leaseback Transaction and the fair value, as determined by the Board of Directors of the Company and evidenced by a Board Resolution, of such property at the time of entering into such Sale/Leaseback Transaction (in either case adjusted to reflect the remaining term of the lease and any amount expended by the Company as set forth in clause (b) above), less an amount equal to the sum of the principal amount of Securities, Pari Passu Indebtedness and Funded Indebtedness voluntarily defeased or retired by the Company plus any amount expended to acquire any Principal Properties at fair value, within such nine-month period and not designated as a credit against any other Sale/Leaseback Transaction entered into by the Company or any Subsidiary during such period.
ARTICLE V
SUCCESSORS
SECTION 5.01 Limitations on Mergers and Consolidations.
The Company shall not, in any transaction or series of transactions, consolidate with or merge into any Person, or sell, lease, convey, transfer or otherwise dispose of all or substantially all of its assets to any Person, unless:
(1) either (a) the Company shall be the continuing corporation or (b) the Person (if other than the Company) formed by such consolidation or into which the Company is merged, or to which such sale, lease, conveyance, transfer or other disposition shall be made (collectively, the "Successor"), is organized and validly existing under the laws of the United States, any political subdivision thereof or any State thereof or the District of Columbia, and expressly assumes by supplemental indenture the due and punctual payment of the principal of (and premium, if any) and interest on and Additional Amounts with respect to all the Securities and the performance of the Company's covenants and obligations under this Indenture and the Securities;
(2) immediately after giving effect to such transaction or series of transactions, no Default or Event of Default shall have occurred and be continuing or would result therefrom; and
(3) the Company delivers to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that the transaction and such supplemental indenture comply with this Indenture.
SECTION 5.02 Successor Person Substituted.
Upon any consolidation or merger of the Company or any sale, lease, conveyance, transfer or other disposition of all or substantially all of the assets of the Company in accordance with Section 5.01, the Successor formed by such consolidation or into or with which the Company is merged or to which such sale, lease, conveyance, transfer or other disposition is made shall succeed to, and be substituted for, and may exercise every right and power of the Company under this Indenture and the Securities with the same effect as if such Successor had been named as the Company herein and the predecessor Company, in the case of a sale, conveyance, transfer or other disposition, shall be released from all obligations under this Indenture and the Securities.
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.01 Events of Default.
Unless either inapplicable to a particular series or specifically deleted or modified in or pursuant to the supplemental indenture or Board Resolution establishing such series of Securities or in the form of Security for such series, an "Event of Default," wherever used herein with respect to Securities of any series, occurs if:
(1) the Company defaults in the payment of interest on or any Additional Amounts with respect to any Security of that series when the same becomes due and payable and such default continues for a period of 30 days;
(2) the Company defaults in the payment of (A) the principal of any Security of that series at its Maturity or (B) premium (if any) on any Security of that series when the same becomes due and payable;
(3) the Company defaults in the deposit of any sinking fund payment, when and as due by the terms of a Security of that series, and such default continues for a period of 30 days;
(4) the Company fails to comply with any of its
other covenants or agreements in, or provisions of, the Securities of
such series or this Indenture (other than an agreement, covenant or
provision that has expressly been included in this Indenture solely
for the benefit of one or more series of Securities other than that
series) which shall not have been remedied within the specified period
after written notice, as specified in the last paragraph of this
Section 6.01;
(5) the Company pursuant to or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it in an involuntary case,
(C) consents to the appointment of a Bankruptcy Custodian of it or for all or substantially all of its property, or
(D) makes a general assignment for the benefit of its creditors;
(6) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that remains unstayed and in effect for 90 days and that:
(A) is for relief against the Company as debtor in an involuntary case,
(B) appoints a Bankruptcy Custodian of the Company or a Bankruptcy Custodian for all or substantially all of the property of the Company, or
(C) orders the liquidation of the Company; or
(7) any other Event of Default provided with respect to Securities of that series occurs.
The term "Bankruptcy Custodian" means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law.
The Trustee shall not be deemed to know or have notice of a Default unless a Trust Officer at the Corporate Trust Office of the Trustee receives written notice at the Corporate Trust Office of the Trustee of such Default with specific reference to such Default.
When a Default is cured, it ceases.
Notwithstanding the foregoing provisions of this Section 6.01, if the principal of, premium or interest on or Additional Amounts with respect to any Security is payable in a currency or currencies (including a composite currency) other than Dollars and such currency or currencies are not available to the Company for making payment thereof due to the imposition of exchange controls or other circumstances beyond the control of the Company (a "Conversion Event"), the Company will be entitled to satisfy its obligations to Holders of the Securities by making such payment in Dollars in an amount equal to the Dollar equivalent of the amount payable in such other currency, as determined by the Company by reference to the Exchange Rate on the date of such payment, or, if such rate is not then available, on the basis of the most recently available Exchange Rate. Notwithstanding the foregoing provisions of this Section 6.01, any payment made under such circumstances in Dollars where the required payment is in a currency other than Dollars will not constitute an Event of Default under this Indenture.
Promptly after the occurrence of a Conversion Event, the Company shall give written notice thereof in the manner provided in Section 10.02 to the Holders. Promptly after the making of any payment in Dollars as a result of a Conversion Event, the Company shall give notice in the manner provided in Section 10.02 to the Holders, setting forth the applicable Exchange Rate and describing the calculation of such payments.
A Default under clause (4) or (7) of this Section 6.01 is not an Event of Default until the Trustee notifies the Company, or the Holders of at least 25% in principal amount of the then outstanding Securities of the series affected by such Default (or, in the case of a Default under clause (4) of this Section 6.01, if outstanding Securities of other series are affected by such Default, then at least 25% in principal amount of the then outstanding Securities so affected) notify the Company and the Trustee, of the Default, and the Company fails to cure the Default within 90 days after
receipt of the notice. The notice must specify the Default, demand that it be remedied and state that the notice is a "Notice of Default."
SECTION 6.02 Acceleration.
If an Event of Default with respect to any Securities of any series at the time outstanding (other than an Event of Default specified in clause (5) or (6) of Section 6.01) occurs and is continuing, the Trustee by notice to the Company, or the Holders of at least 25% in principal amount of the then outstanding Securities of the series affected by such default (or, in the case of an Event of Default described in clause (4) of Section 6.01, if outstanding Securities of other series are affected by such Default, then at least 25% in principal amount of the then outstanding Securities so affected) by notice to the Company and the Trustee, may declare the principal of (or, if any such Securities are Original Issue Discount Securities, such portion of the principal amount as may be specified in the terms of that series) and accrued and unpaid interest on all then outstanding Securities of such series or of all series, as the case may be, to be due and payable. Upon any such declaration the amounts due and payable on the Securities shall be due and payable immediately. If an Event of Default specified in clause (5) or (6) of Section 6.01 hereof occurs, such amounts shall ipso facto become and be immediately due and payable without any declaration, notice or other act on the part of the Trustee or any Holder. The Holders of a majority in principal amount of the then outstanding Securities of the series affected by such default or all series, as the case may be, by written notice to the Trustee may rescind an acceleration and its consequences (other than nonpayment of principal of or premium or interest on or any Additional Amounts with respect to the Securities) if the rescission would not conflict with any judgment or decree and if all existing Events of Default with respect to Securities of that series (or of all series, as the case may be) have been cured or waived, except nonpayment of principal, premium, interest or any Additional Amounts that has become due solely because of the acceleration.
SECTION 6.03 Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal of, or premium, if any, or interest on the Securities or to enforce the performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of the Securities or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. All remedies are cumulative to the extent permitted by law.
SECTION 6.04 Waiver of Existing Defaults.
Subject to Sections 6.07 and 9.02, the Holders of a majority in principal amount of the then outstanding Securities of any series or of all series (acting as one class) by notice to the Trustee may waive an existing or past Default or Event of Default with respect to such series or all series, as the case may be, and its consequences (including waivers obtained in connection with a
tender offer or exchange offer for Securities of such series or all series or a
solicitation of consents in respect of Securities of such series or all series,
provided that in each case such offer or solicitation is made to all Holders of
then outstanding Securities of such series or all series (but the terms of such
offer or solicitation may vary from series to series)), except (1) a continuing
Default or Event of Default in the payment of the principal of, or premium, if
any, or interest on or any Additional Amounts with respect to any Security or
(2) a continued Default in respect of a provision that under Section 9.02
cannot be amended or supplemented without the consent of each Holder affected.
Upon any such waiver, such Default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
Default or impair any right consequent thereon.
SECTION 6.05 Control by Majority.
With respect to Securities of any series, the Holders of a majority in principal amount of the then outstanding Securities of such series may direct in writing the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on it relating to or arising under an Event of Default described in clause (1), (2), (3) or (7) of Section 6.01, and with respect to all Securities, the Holders of a majority in principal amount of all the then outstanding Securities affected may direct in writing the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on it not relating to or arising under such an Event of Default. However, the Trustee may refuse to follow any direction that conflicts with applicable law or this Indenture, that the Trustee determines may be unduly prejudicial to the rights of other Holders, or that may involve the Trustee in personal liability; provided, however, that (i) the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction and (ii) the Trustee shall have no obligation to make such a determination. Prior to taking any action hereunder, the Trustee shall be entitled to indemnification satisfactory to it in its sole discretion from Holders directing the Trustee against all losses and expenses caused by taking or not taking such action.
SECTION 6.06 Limitations on Suits.
Subject to Section 6.07 hereof, a Holder of a Security of any series may pursue a remedy with respect to this Indenture or the Securities of such series only if:
(1) the Holder gives to the Trustee written notice of a continuing Event of Default with respect to such series;
(2) the Holders of at least 25% in principal amount of the then outstanding Securities of such series make a written request to the Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee indemnity reasonably satisfactory to the Trustee against any loss, liability or expense;
(4) the Trustee does not comply with respect to the request within 60 days after receipt of the notice and the offer of indemnity; and
(5) during such 60-day period the Holders of a majority in principal amount of the Securities of that series do not give the Trustee a direction inconsistent with the request.
A Holder may not use this Indenture to prejudice the rights of another Holder or to obtain a preference or priority over another Holder.
SECTION 6.07 Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any Holder of a Security to receive payment of principal of and premium, if any, interest on and any Additional Amounts with respect to the Security, on or after the respective due dates expressed in the Security, or to bring suit for the enforcement of any such payment on or after such respective dates, is absolute and unconditional and shall not be impaired or affected without the consent of the Holder.
SECTION 6.08 Collection Suit by Trustee.
If an Event of Default specified in clause (1) or (2) of
Section 6.01 hereof occurs and is continuing, the Trustee is authorized to
recover judgment in its own name and as trustee of an express trust against the
Company for the amount of principal, premium (if any), interest and any
Additional Amounts remaining unpaid on the Securities of the series affected by
the Event of Default, and interest on overdue principal and premium, if any,
and, to the extent lawful, interest on overdue interest, and such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.
SECTION 6.09 Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and other papers or documents and to take such actions, including participating as a member, voting or otherwise, of any committee of creditors, as may be necessary or advisable to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Holders allowed in any judicial proceedings relative to the Company or its creditors or properties and shall be entitled and empowered to collect, receive and distribute any money or other property payable or deliverable on any such claims and any Bankruptcy Custodian in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee, and in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 out of the estate in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties which the Holders of the Securities may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise. Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.
SECTION 6.10 Priorities.
If the Trustee collects any money pursuant to this Article VI, it shall pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: to Holders for amounts due and unpaid on the Securities in respect of which or for the benefit of which such money has been collected, for principal, premium (if any), interest and any Additional Amounts ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal, premium (if any), interest and any Additional Amounts, respectively; and
Third: to the Company or to such party as a court of competent jurisdiction shall direct.
The Trustee, upon prior written notice to the Company, may fix record dates and payment dates for any payment to Holders pursuant to this Article VI.
To the fullest extent allowed under applicable law, if for the purpose of obtaining a judgment against the Company in any court it is necessary to convert the sum due in respect of the principal of, premium (if any) or interest on or Additional Amounts with respect to the Securities of any series (the "Required Currency") into a currency in which a judgment will be rendered (the "Judgment Currency"), the rate of exchange used shall be the rate at which in accordance with normal banking procedures the Trustee could purchase in The City of New York the Required Currency with the Judgment Currency on the New York Business Day next preceding that on which final judgment is given. Neither the Company nor the Trustee shall be liable for any shortfall nor shall it benefit from any windfall in payments to Holders of Securities under this Section 6.10 caused by a change in exchange rates between the time the amount of a judgment against it is calculated as above and the time the Trustee converts the Judgment Currency into the Required Currency to make payments under this Section to Holders of Securities, but payment of such judgment shall discharge all amounts owed by the Company on the claim or claims underlying such judgment.
SECTION 6.11 Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as a trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys' fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by a
Holder pursuant to Section 6.07, or a suit by a Holder or Holders of more than 10% in principal amount of the then outstanding Securities of any series.
ARTICLE VII
TRUSTEE
SECTION 7.01 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in such exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default with respect to the Securities of any series:
(1) the Trustee need perform only those duties that are specifically set forth in this Indenture and no others, unless expressly provided herein, the Trustee shall not be responsible for tax filings, other filings or reports, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, the Trustee shall examine such certificates and opinions to determine whether, on their face, they appear to conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liabilities for its own negligent action, its own negligent failure to act or its own willful misconduct, except that:
(1) this paragraph does not limit the effect of Section 7.01(b);
(2) the Trustee shall not be liable for any error of judgment made in good faith by a Trust Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05.
(d) Whether or not therein expressly so provided, every provision of this Indenture that in any way relates to the Trustee is subject to the provisions of this Section 7.01.
(e) No provision of this Indenture shall require the Trustee to expend or risk its own funds or incur any liability. The Trustee may refuse to perform any duty or exercise any right
or power unless it receives indemnity reasonably satisfactory to it against any loss, liability or expense.
(f) The Trustee shall not be liable for interest on or loss on investments in connection with any money received by it except as the Trustee may agree in writing with the Company. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law. All money received by the Trustee shall, until applied as herein provided, be held in trust for the payment of the principal of, premium (if any) and interest on and Additional Amounts with respect to the Securities.
SECTION 7.02 Rights of Trustee.
(a) The Trustee may rely on any document believed by it to be genuine and to have been signed or presented by the proper Person. The Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require instruction, an Officers' Certificate or an Opinion of Counsel or both to be provided. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such instruction, Officers' Certificate or Opinion of Counsel. The Trustee may consult at the Company's expense with counsel and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon.
(c) The Trustee may act through agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Company shall be sufficient if signed by an Officer of the Company.
SECTION 7.03 May Hold Securities.
The Trustee in its individual or any other capacity may become the owner or pledgee of Securities and may otherwise deal with the Company or any of its Affiliates with the same rights it would have if it were not Trustee. However, in the event that the Trustee acquires any conflicting interest (within the meaning of TIA Section 310(b)), it must eliminate such conflict within 90 days, apply to the SEC for permission to continue as trustee or resign. Any Agent may do the same with like rights and duties. However, the Trustee is subject to Sections 7.10 and 7.11.
SECTION 7.04 Trustee's Disclaimer.
The Trustee makes no representation as to the validity or adequacy of this Indenture or the Securities, it shall not be accountable for the Company's use of the proceeds from the Securities or any money paid to the Company or upon the Company's direction under any provision hereof, it shall not be responsible for the use or application of any money received by any Paying Agent other than the Trustee and it shall not be responsible for any statement or recital herein or any statement in the Securities other than its certificate of authentication.
SECTION 7.05 Notice of Defaults.
If a Default or Event of Default with respect to the Securities of any series occurs and is continuing and it is actually known to the Trustee, the Trustee shall mail to Holders of Securities of such series a notice of the Default or Event of Default within 90 days after it occurs. Except in the case of a Default or Event of Default in payment of principal of, premium (if any) and interest on and Additional Amounts or any sinking fund installment with respect to the Securities of such series, the Trustee may withhold the notice if and so long as a committee of its Trust Officers in good faith determines that withholding the notice is in the interests of Holders of Securities of such series.
SECTION 7.06 Reports by Trustee to Holders.
Within 60 days after each May 15, beginning with May 15, 1998, the Trustee shall mail to Holders of a series and the Company a brief report dated as of such reporting date that complies with TIA Section 313(a); provided, however, that if no event described in TIA Section 313(a) has occurred within the twelve months preceding the reporting date with respect to a series, no report need be transmitted to Holders of such series. The Trustee also shall comply with TIA Section 313(b). The Trustee shall also transmit by mail all reports if and as required by TIA Sections 313(c) and 313(d).
A copy of each report shall be filed by the Company with the SEC and each securities exchange, if any, on which the Securities of such series are listed. The Company shall notify the Trustee if and when any series of Securities is listed on any stock exchange.
SECTION 7.07 Compensation and Indemnity.
The Company agrees to pay to the Person acting as Trustee hereunder compensation for its acceptance of this Indenture and services hereunder as agreed upon in a separate fee agreement. The Trustee's compensation shall not be limited by any law on compensation of a trustee of an express trust. The Company agrees to reimburse the Trustee upon request for all reasonable disbursements, advances and expenses incurred by it. Such expenses shall include the reasonable compensation, disbursements and expenses of the Trustee's agents and counsel.
The Company hereby indemnifies the Trustee (including in its individual capacity) against any loss, liability or expense incurred by it arising out of or in connection with the acceptance or administration of its duties under this Indenture, except as set forth in the next
paragraph. The Trustee shall notify the Company promptly of any claim for which it may seek indemnity. The Company shall defend the claim and the Trustee shall cooperate in the defense. The Trustee may have separate counsel and the Company shall pay the reasonable fees and expenses of such counsel. The Company need not pay for any settlement made without its consent.
The Company shall not be obligated to reimburse any expense or indemnify against any loss or liability incurred by the Trustee through negligence or bad faith.
To secure the payment obligations of the Company in this
Section 7.07, the Trustee shall have a lien prior to the Securities on all
money or property held or collected by the Trustee, except that held in trust
to pay principal of, premium (if any) and interest on and any Additional
Amounts with respect to Securities of series. Such lien and the indemnity
obligation under this Section 7.07 shall survive the satisfaction and discharge
of this Indenture.
When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(5) or (6) occurs, the expenses and the compensation for the services are intended to constitute expenses of administration under any Bankruptcy Law.
SECTION 7.08 Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee's acceptance of appointment as provided in this Section 7.08.
The Trustee may resign and be discharged at any time with respect to the Securities of one or more series by so notifying the Company. The Holders of a majority in principal amount of the then outstanding Securities of any series may remove the Trustee with respect to the Securities of such series by so notifying the Trustee and the Company. The Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law;
(3) a Bankruptcy Custodian or public officer takes charge of the Trustee or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, with respect to the Securities of one or more series, the Company shall promptly appoint a successor Trustee or Trustees with respect to the Securities of that or those series (it being understood that any such successor Trustee may be appointed with respect to the Securities of one or more or all of such series and that at any time there shall be only one Trustee with respect to the
Securities of any particular series). Within one year after the successor Trustee with respect to the Securities of any series takes office, the Holders of a majority in principal amount of the Securities of such series may appoint a successor Trustee to replace the successor Trustee appointed by the Company.
If a successor Trustee with respect to the Securities of any series does not take office within 30 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company or the Holders of at least 10% in principal amount of the then outstanding Securities of such series may petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series.
If the Trustee with respect to the Securities of a series fails to comply with Section 7.10, any Holder of Securities of such series may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee with respect to the Securities of such series.
In case of the appointment of a successor Trustee with respect to all Securities, each such successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Thereupon the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the retiring Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to Holders. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, subject to the lien provided for in Section 7.07.
In case of the appointment of a successor Trustee with respect to the Securities of one or more (but not all) series, the Company, the retiring Trustee and each successor Trustee with respect to the Securities of one or more (but not all) series shall execute and deliver an indenture supplemental hereto in which each successor Trustee shall accept such appointment and that (1) shall confer to each successor Trustee all the rights, powers and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates, (2) if the retiring Trustee is not retiring with respect to all Securities, shall confirm that all the rights, powers and duties of the retiring Trustee with respect to the Securities of that or those series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee and (3) shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee. Nothing herein or in such supplemental indenture shall constitute such Trustees co-trustees of the same trust, and each such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee. Upon the execution and delivery of such supplemental indenture, the resignation or removal of the retiring Trustee shall become effective to the extent provided therein and each such successor Trustee shall have all the rights, powers and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates. On request of the Company or any successor Trustee, such retiring Trustee shall transfer to such successor Trustee all property held by such retiring Trustee as Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates.
Notwithstanding replacement of the Trustee or Trustees pursuant to this Section 7.08, the obligations of the Company under Section 7.07 shall continue for the benefit of the retiring Trustee or Trustees.
SECTION 7.09 Successor Trustee by Merger, etc.
Subject to Section 7.10, if the Trustee consolidates, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, the successor corporation without any further act shall be the successor Trustee; provided, however, that in the case of a transfer of all or substantially all of its corporate trust business to another corporation, the transferee corporation expressly assumes all of the Trustee's liabilities hereunder.
In case any Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated; and in case at that time any of the Securities shall not have been authenticated, any successor to the Trustee may authenticate such Securities either in the name of any predecessor hereunder or in the name of the successor to the Trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Securities or in this Indenture provided that the certificate of the Trustee shall have.
SECTION 7.10 Eligibility; Disqualification.
There shall at all times be a Trustee hereunder which shall be a corporation organized and doing business under the laws of the United States, any State thereof or the District of Columbia and authorized under such laws to exercise corporate trust power, shall be subject to supervision or examination by Federal or State (or the District of Columbia) authority and shall have, or be a Subsidiary of a bank or bank holding company having, a combined capital and surplus of at least $50 million as set forth in its most recent published annual report of condition.
The Indenture shall always have a Trustee who satisfies the requirements of TIA Sections 310(a)(1), 310(a)(2) and 310(a)(5). The Trustee is subject to and shall comply with the provisions of TIA Section 310(b) during the period of time required by this Indenture.
SECTION 7.11 Preferential Collection of Claims Against Company.
The Trustee is subject to and shall comply with the provisions
of TIA Section 311(a), excluding any creditor relationship listed in TIA
Section 311(b). A Trustee who has resigned or been removed shall be subject
to TIA Section 311(a) to the extent indicated therein.
ARTICLE VIII
DISCHARGE OF INDENTURE
SECTION 8.01 Termination of Company's Obligations.
(a) This Indenture shall cease to be of further effect with respect to the Securities of a series (except that the Company's obligations under Section 7.07, the Trustee's and Paying Agent's obligations under Section 8.03 and the rights, powers, protections and privileges accorded the Trustee under Article VII shall survive), and the Trustee, on demand of the Company, shall execute proper instruments acknowledging the satisfaction and discharge of this Indenture with respect to the Securities of such series, when:
(1) either
(A) all outstanding Securities of such series theretofore authenticated and issued (other than destroyed, lost or stolen Securities that have been replaced or paid) have been delivered to the Trustee for cancellation; or
(B) all outstanding Securities of such series not theretofore delivered to the Trustee for cancellation:
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity within one year, or
(iii) are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company,
and, in the case of clause (i), (ii) or (iii) above, the
Company has irrevocably deposited or caused to be deposited
with the Trustee as funds (immediately available to the
Holders in the case of clause (i)) in trust for such purpose
(x) cash in an amount, or (y) U.S. Government Obligations,
maturing as to principal and interest at such times and in
such amounts as will insure the availability of cash in an
amount or (z) a combination thereof, which will be sufficient,
in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification
thereof delivered to the Trustee, to pay and discharge the
entire indebtedness on the Securities of such series for
principal and interest to the date of such deposit (in the
case of Securities which have become due and payable) or for
principal, premium, if any, and interest to the Stated
Maturity or Redemption Date, as the case may be; or
(C) the Company has properly fulfilled such other means of satisfaction and discharge as is specified, as contemplated by Section 2.01, to be applicable to the Securities of such series;
(2) the Company has paid or caused to be paid all other sums payable by it hereunder with respect to the Securities of such series; and
(3) the Company has delivered to the Trustee an Officers' Certificate stating that all conditions precedent to satisfaction and discharge of this Indenture with respect to the Securities of such series have been complied with, together with an Opinion of Counsel to the same effect.
(b) Unless this Section 8.01(b) is specified as not being applicable to Securities of a series as contemplated by Section 2.01, the Company may terminate certain of its obligations under this Indenture ("covenant defeasance") with respect to the Securities of a series if:
(1) the Company has irrevocably deposited or caused to be irrevocably deposited with the Trustee as trust funds in trust for the purpose of making the following payments, specifically pledged as security for and dedicated solely to the benefit of the Holders of Securities of such series, (i) money in the currency in which payment of the Securities of such series is to be made in an amount, or (ii) Government Obligations with respect to such series, maturing as to principal and interest at such times and in such amounts as will insure the availability of money in the currency in which payment of the Securities of such series is to be made in an amount or (iii) a combination thereof, that is sufficient, in the opinion (in the case of (ii) and (iii)) of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay, without consideration of the reinvestment of any such amounts and after payment of all taxes or other charges or assessments in respect thereof payable by the Trustee, the principal of and premium (if any) and interest on Securities of such series on each date that such principal, premium (if any) or interest is due and payable and (at the Stated Maturity thereof or upon redemption as provided in Section 8.01(e)) to pay all other sums payable by it hereunder; provided that the Trustee shall have been irrevocably instructed to apply such money and/or the proceeds of such U.S. Government Obligations to the payment of said principal, premium (if any) and interest with respect to the Securities of such series as the same shall become due;
(2) the Company has delivered to the Trustee an Officers' Certificate stating that all conditions precedent to satisfaction and discharge of this Indenture with respect to the Securities of such series have been complied with, and an Opinion of Counsel to the same effect;
(3) no Default or Event of Default with respect to the Securities of such series shall have occurred and be continuing on the date of such deposit;
(4) the Company shall have delivered to the Trustee an Opinion of Counsel from a nationally recognized counsel acceptable to the Trustee or a tax ruling to the effect that the Holders will not recognize income, gain or loss for Federal income tax purposes as a result of the Company's exercise of its option under this Section 8.01(b) and will be subject to Federal income tax on the same amount and in the same manner and at the same times as would have been the case if such option had not been exercised;
(5) the Company has complied with any additional conditions specified pursuant to Section 2.01 to be applicable to the discharge of Securities of such series pursuant to this Section 8.01; and
(6) such deposit and discharge shall not cause the Trustee to have a conflicting interest as defined in TIA Section 310(b).
In such event, this Indenture shall cease to be of further effect (except as set forth in this paragraph), and the Trustee, on demand of the Company, shall execute proper instruments acknowledging satisfaction and discharge under this Indenture. However, the Company's obligations in Sections 2.05, 2.06, 2.07, 2.08, 2.09, 4.01, 4.02, 5.01, 7.07, 7.08 and 8.04, the Trustee's and Paying Agent's obligations in Section 8.03 and the rights, powers, protections and privileges accorded the Trustee under Article VII shall survive until all Securities of such series are no longer outstanding. Thereafter, only the Company's obligations in Section 7.07 and the Trustee's and Paying Agent's obligations in Section 8.03 shall survive with respect to Securities of such series.
After such irrevocable deposit made pursuant to this Section 8.01(b) and satisfaction of the other conditions set forth herein, the Trustee upon request shall acknowledge in writing the discharge of the Company's obligations under this Indenture with respect to the Securities of such series except for those surviving obligations specified above.
In order to have money available on a payment date to pay principal of or premium (if any) or interest on the Securities, the Government Obligations shall be payable as to principal or interest on or before such payment date in such amounts as will provide the necessary money. Government Obligations shall not be callable at the issuer's option.
(c) If the Company has previously complied or is concurrently complying with Section 8.01(b) (other than any additional conditions specified pursuant to Section 2.01 that are expressly applicable only to covenant defeasance) with respect to Securities of a series, then, unless this Section 8.01(c) is specified as not being applicable to Securities of such series as contemplated by Section 2.01, the Company may elect to be discharged ("legal defeasance") from its obligations to make payments with respect to Securities of such series, if:
(1) no Default or Event of Default under clauses (5) and
(6) of Section 6.01 hereof shall have occurred at any time during the
period ending on the 91st day after the date of deposit contemplated
by Section 8.01(b) (it being understood that this condition shall not
be deemed satisfied until the expiration of such period);
(2) unless otherwise specified with respect to Securities of such series as contemplated by Section 2.01, the Company has delivered to the Trustee an Opinion of Counsel from a nationally recognized counsel acceptable to the Trustee to the effect referred to in Section 8.01(b)(4) with respect to such legal defeasance, which opinion is based on (i) a private ruling of the Internal Revenue Service addressed to the Company, (ii) a published ruling of the Internal Revenue Service or (iii) a change in the applicable federal income tax law (including regulations) after the date of this Indenture;
(3) the Company has complied with any other conditions specified pursuant to Section 2.01 to be applicable to the legal defeasance of Securities of such series pursuant to this Section 8.01(c); and
(4) the Company has delivered to the Trustee a Company Request requesting such legal defeasance of the Securities of such series and an Officers' Certificate stating that all conditions precedent to with respect to such legal defeasance of the Securities of such series have been complied with, together with an Opinion of Counsel to the same effect.
In such event, the Company will be discharged from its obligations under this Indenture and the Securities of such series to pay principal of, premium (if any) and interest on, and Additional Amounts with respect to, Securities of such series, the Company's obligations under Sections 4.01, 4.02 and 5.01 shall terminate with respect to such Securities, and the entire indebtedness of the Company evidenced by such Securities shall be deemed paid and discharged.
(d) If and to the extent additional or alternative means of satisfaction, discharge or defeasance of Securities of a series are specified to be applicable to such series as contemplated by Section 2.01, the Company may terminate any or all of its obligations under this Indenture with respect to Securities of a series and any or all of its obligations under the Securities of such series if it fulfills such other means of satisfaction and discharge as may be so specified, as contemplated by Section 2.01, to be applicable to the Securities of such series.
(e) If Securities of any series subject to subsections
(a), (b), (c) or (d) of this Section 8.01 are to be redeemed prior to their
Stated Maturity, whether pursuant to any optional redemption provisions or in
accordance with any mandatory or optional sinking fund provisions, the terms of
the applicable trust arrangement shall provide for such redemption, and the
Company shall make such arrangements as are reasonably satisfactory to the
Trustee for the giving of notice of redemption by the Trustee in the name, and
at the expense, of the Company.
SECTION 8.02 Application of Trust Money.
The Trustee or a trustee satisfactory to the Trustee and the Company shall hold in trust money or U.S. Government Obligations deposited with it pursuant to Section 8.01 hereof. It shall apply the deposited money and the money from U.S. Government Obligations through the Paying Agent and in accordance with this Indenture to the payment of principal of, premium (if any) and interest on and any Additional Amounts with respect to the Securities of the series with respect to which the deposit was made.
SECTION 8.03 Repayment to Company.
The Trustee and the Paying Agent shall promptly pay to the Company upon written request any excess money or U.S. Government Obligations (or proceeds therefrom) held by them at any time upon the written request of the Company.
Subject to the requirements of any applicable abandoned property laws, the Trustee and the Paying Agent shall pay to the Company upon written request any money held by them for the payment of principal, premium (if any), interest or any Additional Amounts that remains unclaimed for two years after the date upon which such payment shall have become due. After payment to the Company, Holders entitled to the money must look to the Company for payment as general creditors unless an applicable abandoned property law designates another Person, and all liability of the Trustee and the Paying Agent with respect to such money shall cease.
SECTION 8.04 Reinstatement.
If the Trustee or the Paying Agent is unable to apply any money or U.S. Government Obligations deposited with respect to Securities of any series in accordance with Section 8.01 by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the obligations of the Company under this Indenture with respect to the Securities of such series and under the Securities of such series shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.01 hereof until such time as the Trustee or the Paying Agent is permitted to apply all such money or U.S. Government Obligations in accordance with Section 8.01; provided, however, that if the Company has made any payment of principal of, premium (if any) or interest on or any Additional Amounts with respect to any Securities because of the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Securities to receive such payment from the money or U.S. Government Obligations held by the Trustee or the Paying Agent.
ARTICLE IX
SUPPLEMENTAL INDENTURES AND AMENDMENTS
SECTION 9.01 Without Consent of Holders.
The Company and the Trustee may amend or supplement this Indenture or the Securities or waive any provision hereof or thereof without the consent of any Holder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Section 5.01;
(3) to provide for uncertificated Securities in addition to or in place of certificated Securities, or to provide for the issuance of bearer Securities (with or without coupons);
(4) to provide any security for any series of Securities or to add guarantees of any series of Securities;
(5) to comply with any requirement in order to effect or maintain the qualification of this Indenture under the TIA;
(6) to add to the covenants of the Company for the benefit of the Holders of all or any series of Securities (and if such covenants are to be for the benefit of less than all series of Securities, stating that such covenants are expressly being included solely for the benefit of such series), or to surrender any right or power herein conferred upon the Company;
(7) to add any additional Events of Default with respect to all or any series of the Securities (and, if such Event of Default is applicable to less than all series of Securities, specifying the series to which such Event of Default is applicable);
(8) to change or eliminate any of the provisions of this Indenture; provided that any such change or elimination shall become effective only when there is no outstanding Security of any series created prior to the execution of such amendment or supplemental indenture that is adversely affected in any material respect by such change in or elimination of such provision;
(9) to establish the form or terms of Securities of any series as permitted by Section 2.01;
(10) to supplement any of the provisions of this Indenture
to such extent as shall be necessary to permit or facilitate the
defeasance and discharge of any series of Securities pursuant to
Section 8.01; provided, however, that any such action shall not
adversely affect the interest of the Holders of Securities of such
series or any other series of Securities in any material respect; or
(11) to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Securities of one or more series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of Section 7.08.
Upon the request of the Company, accompanied by a Board
Resolution, and upon receipt by the Trustee of the documents described in
Section 9.06, the Trustee shall join with the Company in the execution of any
supplemental indenture authorized or permitted by the terms of this Indenture
and make any further appropriate agreements and stipulations that may be
therein contained.
SECTION 9.02 With Consent of Holders.
Except as provided below in this Section 9.02, the Company and the Trustee may amend or supplement this Indenture with the written consent (including consents obtained in connection with a tender offer or exchange offer for Securities of any one or more series or all series or a solicitation of consents in respect of Securities of any one or more series or all series, provided that in each case such offer or solicitation is made to all Holders of then outstanding Securities of each such series (but the terms of such offer or solicitation may vary from series to series)) of the Holders of at least a majority in principal amount of the then outstanding Securities of all series affected by such amendment or supplement (acting as one class).
Upon the request of the Company, accompanied by a Board Resolution, and upon the filing with the Trustee of evidence of the consent of the Holders as aforesaid, and upon receipt by the Trustee of the documents described in Section 9.06, the Trustee shall join with the Company in the execution of such amendment or supplemental indenture.
It shall not be necessary for the consent of the Holders under this Section 9.02 to approve the particular form of any proposed amendment, supplement or waiver, but it shall be sufficient if such consent approves the substance thereof.
The Holders of a majority in principal amount of the then outstanding Securities of one or more series or of all series may waive compliance in a particular instance by the Company with any provision of this Indenture with respect to Securities of such series (including waivers obtained in connection with a tender offer or exchange offer for Securities of such series or a solicitation of consents in respect of Securities of such series, provided that in each case such offer or solicitation is made to all Holders of then outstanding Securities of such series (but the terms of such offer or solicitation may vary from series to series)).
However, without the consent of each Holder affected, an amendment, supplement or waiver under this Section 9.02 may not:
(1) reduce the amount of Securities whose Holders must consent to an amendment, supplement or waiver;
(2) reduce the rate of or change the time for payment of interest, including default interest, on any Security;
(3) reduce the principal of or premium on, or change the Stated Maturity of, any Security;
(4) reduce the premium, if any, payable upon the redemption of any Security or change the time at which any Security may or shall be redeemed;
(5) change any obligation of the Company to pay Additional Amounts with respect to any Security;
(6) change the coin or currency or currencies (including composite currencies) in which any Security or any premium, interest or Additional Amounts with respect thereto are payable;
(7) impair the right to institute suit for the enforcement of any payment of principal of, premium (if any) or interest on or any Additional Amounts with respect to any Security pursuant to Sections 6.07 and 6.08, except as limited by Section 6.06;
(8) make any change in the percentage of principal amount of Securities necessary to waive compliance with certain provisions of this Indenture pursuant to Section 6.04 or 6.07 or make any change in this sentence of Section 9.02; or
(9) waive a continuing Default or Event of Default in the payment of principal of, premium (if any) or interest on or Additional Amounts with respect to the Securities.
A supplemental indenture that changes or eliminates any covenant or other provision of this Indenture which has expressly been included solely for the benefit of one or more particular series of Securities, or which modifies the rights of the Holders of Securities of such series with respect to such covenant or other provision, shall be deemed not to affect the rights under this Indenture of the Holders of Securities of any other series.
The right of any Holder to participate in any consent required or sought pursuant to any provision of this Indenture (and the obligation of the Company to obtain any such consent otherwise required from such Holder) may be subject to the requirement that such Holder shall have been the Holder of record of any Securities with respect to which such consent is required or sought as of a date identified by the Company in a notice furnished to Holders in accordance with the terms of this Indenture.
After an amendment, supplement or waiver under this Section 9.02 becomes effective, the Company shall mail to the Holders of each Security affected thereby a notice briefly describing the amendment, supplement or waiver. Any failure of the Company to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such amendment, supplement or waiver.
SECTION 9.03 Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the Securities shall comply in form and substance with the TIA as then in effect.
SECTION 9.04 Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder is a continuing consent by the Holder and every subsequent Holder of a Security or portion of a Security that evidences the same debt as the consenting Holder's Security, even if notation of
the consent is not made on any Security. However, any such Holder or subsequent Holder may revoke the consent as to his or her Security or portion of a Security if the Trustee receives written notice of revocation before the date the amendment, supplement or waiver becomes effective. An amendment, supplement or waiver becomes effective in accordance with its terms and thereafter binds every Holder.
The Company may, but shall not be obligated to, fix a record date (which need not comply with Section 316(c) of the TIA) for the purpose of determining the Holders entitled to consent to any amendment, supplement or waiver or to take any other action under this Indenture. If a record date is fixed, then notwithstanding the provisions of the immediately preceding paragraph, those Persons who were Holders at such record date (or their duly designated proxies), and only those Persons, shall be entitled to consent to such amendment, supplement or waiver or to revoke any consent previously given, whether or not such Persons continue to be Holders after such record date. No consent shall be valid or effective for more than 90 days after such record date unless consents from Holders of the principal amount of Securities required hereunder for such amendment or waiver to be effective shall have also been given and not revoked within such 90-day period.
After an amendment, supplement or waiver becomes effective, it
shall bind every Holder, unless it is of the type described in any of clauses
(1) through (9) of Section 9.02 hereof. In such case, the amendment,
supplement or waiver shall bind each Holder who has consented to it and every
subsequent Holder that evidences the same debt as the consenting Holder's
Security.
SECTION 9.05 Notation on or Exchange of Securities.
If an amendment or supplement changes the terms of an outstanding Security, the Company may require the Holder of the Security to deliver it to the Trustee. The Trustee may place an appropriate notation on the Security at the request of the Company regarding the changed terms and return it to the Holder. Alternatively, if the Company so determines, the Company in exchange for the Security shall issue and the Trustee shall authenticate a new Security that reflects the changed terms. Failure to make the appropriate notation or to issue a new Security shall not affect the validity of such amendment or supplement.
Securities of any series authenticated and delivered after the execution of any amendment or supplement may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any matter provided for in such amendment or supplement.
SECTION 9.06 Trustee to Sign Amendments, etc.
The Trustee shall sign any amendment or supplement authorized pursuant to this Article if the amendment or supplement does not adversely affect the rights, duties, liabilities or immunities of the Trustee. If it does, the Trustee may, but need not, sign it. In signing or refusing to sign such amendment or supplement, the Trustee shall be entitled to receive, and, subject to Section 7.01 hereof, shall be fully protected in relying upon, an Opinion of Counsel provided at the expense of the Company as conclusive evidence that such amendment or supplement is authorized
or permitted by this Indenture, that it is not inconsistent herewith, and that it will be valid and binding upon the Company in accordance with its terms.
ARTICLE X
MISCELLANEOUS
SECTION 10.1 Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with the duties imposed by operation of TIA Section 318(c), the imposed duties shall control.
SECTION 10.2 Notices.
Any notice or communication by the Company or the Trustee to the other is duly given if in writing and delivered in person or mailed by first-class mail (registered or certified, return receipt requested), telex, facsimile or overnight air courier guaranteeing next day delivery, to the other's address:
If to the Company:
Global Marine Inc.
777 N. Eldridge Parkway
Houston, Texas 77079-4493
If to the Trustee:
Wilmington Trust Company
Rodney Square North
1100 N. Market Street
Wilmington, Delaware 19890
The Company or the Trustee by notice to the other may designate additional or different addresses for subsequent notices or communications.
All notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when answered back, if telexed; when receipt acknowledged, if by facsimile; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first-class mail, postage prepaid, to the Holder's address shown on the register kept by the Registrar. Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it, except in the case of notice to the Trustee, it is duly given only when received.
If the Company mails a notice or communication to Holders, it shall mail a copy to the Trustee and each Agent at the same time.
All notices or communications, including without limitation notices to the Trustee or the Company by Holders, shall be in writing, except as otherwise set forth herein.
In case by reason of the suspension of regular mail service, or by reason of any other cause, it shall be impossible to mail any notice required by this Indenture, then such method of notification as shall be made with the approval of the Trustee shall constitute a sufficient mailing of such notice.
SECTION 10.3 Communication by Holders with Other Holders.
Holders may communicate pursuant to TIA Section 312(b) with other Holders with respect to their rights under this Indenture or the Securities. The Company, the Trustee, the Registrar and anyone else shall have the protection of TIA Section 312(c).
SECTION 10.4 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take any action under this Indenture, the Company shall, if requested by the Trustee, furnish to the Trustee at the expense of the Company:
(1) an Officers' Certificate (which shall include the statements set forth in Section 10.05) stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been complied with; and
(2) an Opinion of Counsel (which shall include the statements set forth in Section 10.05 hereof) stating that, in the opinion of such counsel, all such conditions precedent and covenants have been complied with.
SECTION 10.5 Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than a certificate provided pursuant to TIA Section 314(a)(4)) shall comply with the provisions of TIA Section 314(e) and shall include:
(1) a statement that the Person making such certificate or opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he or she has made such examination or investigation as is necessary to enable him or her to express an informed opinion as to whether or not such covenant or condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such Person, such condition or covenant has been complied with.
SECTION 10.06 Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a meeting of Holders. The Registrar or the Paying Agent may make reasonable rules and set reasonable requirements for its functions.
SECTION 10.07 Legal Holidays.
If a payment date is a Legal Holiday at a Place of Payment, payment may be made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period.
SECTION 10.08 No Recourse Against Others.
A director, officer, employee, stockholder, partner or other owner of the Company or the Trustee, as such, shall not have any liability for any obligations of the Company under the Securities or for any obligations of the Company or the Trustee under this Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. Each Holder by accepting a Security waives and releases all such liability. The waiver and release shall be part of the consideration for the issue of Securities.
SECTION 10.09 Governing Law.
THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS TO THE EXTENT THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
SECTION 10.10 No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or debt agreement of the Company or any other Subsidiary. Any such indenture, loan or debt agreement may not be used to interpret this Indenture.
SECTION 10.11 Successors.
All agreements of the Company in this Indenture and the Securities shall bind its successors. All agreements of the Trustee in this Indenture shall bind its successors.
SECTION 10.12 Severability.
In case any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall, to the fullest extent permitted by applicable law, not in any way be affected or impaired thereby.
SECTION 10.13 Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.
SECTION 10.14 Table of Contents, Headings, etc.
The table of contents, cross-reference table and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part hereof and shall in no way modify or restrict any of the terms or provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed as of the day and year first above written.
GLOBAL MARINE INC.
By: /s/ JAMES L. MCCULLOCH
---------------------------------------------------
Name: James L. McCulloch
Title: Vice President and
General Counsel
|
WILMINGTON TRUST COMPANY
as Trustee
By: /s/ PATRICIA A. EVANS
---------------------------------------------------
Name: Patricia A. Evans
Title: Financial Services Officer
|
EXHIBIT 4.2
GLOBAL MARINE INC.
$300,000,000 7 1/8% NOTES DUE 2007
PURCHASE AGREEMENT
New York, New York
September 10, 1997
Salomon Brothers Inc
BT Alex. Brown Incorporated
Donaldson, Lufkin & Jenrette Securities Corporation
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Morgan Stanley & Co. Incorporated
c/o Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Ladies and Gentlemen:
Global Marine Inc., a Delaware corporation (the "Company"), proposes to issue and sell to you (the "Initial Purchasers") $300,000,000 principal amount of its 7 1/8% Notes Due 2007 (the "Securities"), to be issued under an indenture (the "Indenture") to be dated as of September 1, 1997, between the Company and Wilmington Trust Company, as trustee (the "Trustee").
The sale of the Securities to you will be made without registration of the Securities under the Securities Act of 1933, as amended (the "Securities Act"), in reliance upon exemptions from the registration requirements of the Securities Act. You have advised the Company that you will offer and sell the Securities purchased by you hereunder in accordance with Section 4 hereof on the terms set forth in the Final Memorandum (as defined below), as soon as you deem advisable after this Agreement has been executed and delivered.
In connection with the sale of the Securities, the Company has prepared a preliminary offering memorandum, dated September 1, 1997 (the "Preliminary Memorandum"), and a final offering memorandum, dated September 10, 1997 (the "Final Memorandum"). Each of the Preliminary Memorandum and the Final Memorandum sets forth certain information concerning the Company and the Securities. The Company hereby confirms that it has authorized the use of the Preliminary Memorandum and the Final Memorandum, and any amendment or supplement thereto, in connection with the offer and sale of the Securities by the Initial Purchasers. Any references herein to the Preliminary Memorandum or the Final Memorandum shall be deemed to include all exhibits thereto and all documents incorporated by reference therein which were filed under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), on or before the Execution Time (as defined below); and any reference herein to the terms "amend", "amendment" or "supplement" with respect to the Final Memorandum shall be deemed to refer to and include the filing of any document under the Exchange Act after the Execution Time which is incorporated by reference therein. Unless stated to the contrary, all references herein to the Final Memorandum are to
the Final Memorandum at the Execution Time (as defined below) and are not meant to include any amendment or supplement subsequent to the Execution Time.
1. Representations and Warranties. The Company represents and warrants
to, and agrees with, each of the Initial Purchasers as set forth below in this
Section 1.
(a) Each of the Preliminary Memorandum and the Final Memorandum as of its date did not, and the Final Memorandum (as the same may have been amended or supplemented) as of the Closing Date (as defined below) will not, contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the Company makes no representations or warranties as to the information contained in or omitted from the Preliminary Memorandum or the Final Memorandum, or any amendment or supplement thereto, in reliance upon and in conformity with information furnished in writing to the Company by or on behalf of the Initial Purchasers specifically for inclusion in the Preliminary Memorandum or the Final Memorandum (and any amendment or supplement thereof or thereto). All documents incorporated by reference in the Preliminary Memorandum or the Final Memorandum that were filed under the Exchange Act on or before the Execution Time complied, and all such documents that are filed under the Exchange Act after the Execution Time and on or before the Closing Date will comply, in all material respects with the applicable requirements of the Exchange Act and the rules thereunder.
(b) The Company has not taken and will not take, directly or indirectly, any action prohibited by Regulation M promulgated under the Exchange Act in connection with the offering of the Securities.
(c) Neither the Company nor any or its affiliates (as defined in Rule 501(b) of Regulation D promulgated under the Securities Act ("Regulation D")), nor any person acting on its or their behalf (excluding the Initial Purchasers and any affiliates thereof) has, directly or indirectly, (i) sold, offered for sale, solicited offers to buy or otherwise negotiated in respect of, any security (as defined in the Securities Act) that is or will be integrated with the sale of the Securities in a manner that would require the registration of the Securities under the Securities Act or (ii) engaged in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with the offering of the Securities.
(d) Subject to the compliance by the Initial Purchasers with the representations, warranties and agreements set forth in Section 4, it is not necessary in connection with the offer, sale and delivery of the Securities in the manner contemplated by this Agreement and the Final Memorandum to register the Securities under the Securities Act or to qualify the Indenture under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act").
(e) The Company is subject to the reporting requirements of Section 13 or Section 15(d) of the Exchange Act.
(f) The Securities satisfy the requirements set forth in Rule 144A(d)(3) promulgated under the Securities Act.
(g) None of the Company or its subsidiaries (as defined in Section 1-02(w) of Regulation S-X promulgated under the Securities Act), ("Subsidiaries") is required to be
registered or regulated as an "investment company" within the meaning of the Investment Company Act of 1940, as amended (the "Investment Company Act"), and after giving effect to the offer and sale of the Securities and the application of the proceeds thereof as described in the Final Memorandum, none of the Company or its Subsidiaries be required to be registered or regulated as an "investment company" as defined in the Investment Company Act.
(h) The Company has not paid or agreed to pay to any person any compensation for soliciting another to purchase any Securities (except as contemplated by this Agreement).
(i) Except as set forth in the Final Memorandum, the Company and its Subsidiaries possess and are in compliance with all approvals, certificates, authorizations, licenses and permits issued by the appropriate state, Federal or foreign regulatory agencies or bodies necessary to conduct the business now being operated by them, except where the failure to possess such approvals, certificates, authorizations, licenses and permits or be in compliance therewith is not reasonably likely to have a material adverse effect on the condition, financial or otherwise, earnings, business or prospects of the Company and its Subsidiaries, taken as a whole (a "Material Adverse Effect"), and none of the Company or its Subsidiaries has received any notice of proceedings relating to the revocation or modification of any such approval, certificate, authorization, license or permit that individually or in the aggregate, is likely to have a Material Adverse Effect.
(j) Except as set forth in the Final Memorandum, there is no action, suit or proceeding before or by any court or governmental agency or body, domestic or foreign, now pending or, to the knowledge of the Company and its Subsidiaries threatened against the Company or any of its Subsidiaries that is likely to result in any Material Adverse Effect or materially and adversely affect the offering of the Securities in the manner contemplated by the Final Memorandum.
(k) This Agreement has been duly authorized, executed and delivered by the Company.
2. Purchase and Sale. Subject to the terms and conditions and in reliance upon the representations and warranties herein set forth, the Company agrees to sell to each Initial Purchaser, and each Initial Purchaser agrees, severally and not jointly, to purchase from the Company, at a purchase price of 99.849% of the principal amount thereof, plus accrued interest, if any, from September 15, 1997, to the Closing Date, the principal amount of the Securities set forth opposite each Initial Purchaser's name on Schedule I attached hereto.
3. Delivery and Payment. Delivery of and payment for the Securities shall be made at 10:00 a.m., New York City time, on September 15, 1997, which date and time may be postponed by agreement between the Initial Purchasers and the Company or as provided in Section 9 hereof (such date and time of delivery and payment for the Securities being herein called the "Closing Date"). Delivery of the Securities shall be made to the Initial Purchasers against payment by the Initial Purchasers of the purchase price thereof to or upon the order of the Company by wire transfer of same day funds to an account specified by the Company or such other manner of payment as may be agreed upon by the Company and the Initial Purchasers. Delivery of the Securities shall be made at such location as the Initial Purchasers shall reasonably designate at least one business day in advance of the Closing Date and payment for the Securities shall be made at the office of Fulbright & Jaworski L.L.P. ("Counsel for the Initial Purchasers"), 1301 McKinney, Suite 5100, Houston, Texas 77010-3095. Certificates for the Securities shall be registered in
such names and in such denominations as the Initial Purchasers may request not less than three full business days in advance of the Closing Date.
The Company agrees to have the Securities available for inspection, checking and packaging by the Initial Purchasers in New York, New York, not later than 1:00 p.m. on the business day prior to the Closing Date.
4. Offering of Securities. Each Initial Purchaser, severally and not jointly, represents and warrants to and agrees with the Company that (with respect to clauses (a) and (b) below, with respect to both itself and each of its affiliates):
(a) it has not solicited and will not solicit any offer to buy or offer to sell the Securities by means of any form of general solicitation or general advertising (within the meaning of Regulation D) or under circumstances that would require the registration of the Securities under the Securities Act;
(b) it has solicited and will solicit offers to buy the Securities
only from, and has offered and will offer, sell or deliver the Securities
only to, (i) persons who it reasonably believes to be qualified
institutional buyers (as defined in Rule 144A promulgated under the
Securities Act ("Rule 144A")) or, if any such person is buying for one or
more institutional accounts for which such person is acting as fiduciary or
agent, only when such person has represented to it that each such account
is a qualified institutional buyer, to whom notice has been given that such
sale or delivery is being made in reliance on Rule 144A, and, in each case,
in transactions under Rule 144A or (ii) persons who it reasonably believes
to be institutional "accredited investors" (as defined in Rule 501(a)(1),
(2), (3) or (7) of Regulation D), and who provide to it a letter in the
form of Exhibit A to the Final Memorandum; and
(c) such Initial Purchaser is a qualified institutional buyer (as defined in Rule 144A) and an accredited investor (as defined in Rule 501(c) of Regulation D).
5. Agreements. The Company agrees with each of the Initial Purchasers that:
(a) The Company will furnish to each Initial Purchaser and to Counsel for the Initial Purchasers, without charge, during the period referred to in Section 5(c) hereof, as many copies of the Final Memorandum and any supplements and amendments thereof or thereto as it may reasonably request. The Company will pay the expenses of printing or other production of all documents relating to the offering of the Securities.
(b) The Company will not amend or supplement the Final Memorandum, other than by filing documents under the Exchange Act that are incorporated by reference therein, without prior consent of the Initial Purchasers, such consent not to be unreasonably withheld or delayed. Prior to the completion of the sale of the Securities by the Initial Purchasers, the Company will not file any document under the Exchange Act that is incorporated by reference in the Final Memorandum unless the Company has furnished you a copy for your review prior to filing and will not file any such document to which you reasonably object.
(c) The Company will promptly advise the Initial Purchasers when, prior to the completion of the sale of the Securities by the Initial Purchasers, any document filed under the
Exchange Act that is incorporated by reference in the Final Memorandum shall have been filed with the Securities and Exchange Commission (the "Commission").
(d) If at any time prior to the earliest of (i) the completion of the
initial resale of the Securities by the Initial Purchasers, (ii) the
effective date of the registration statement to be filed pursuant and in
accordance with the Registration Rights Agreement dated the date hereof by
and between the Company and the Initial Purchasers and (iii) six months
after the Closing Date, any event occurs as a result of which the Final
Memorandum, as then amended or supplemented, would include any untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein in the light of the circumstances under
which they were made not misleading, or if it shall be necessary to amend
or supplement the Final Memorandum (including any document incorporated by
reference therein that was filed under the Exchange Act) to comply with the
Exchange Act or the rules thereunder or other applicable law, the Company
promptly will notify the Initial Purchasers of the same and, subject to
Section 5(b) hereof, will prepare and provide to the Initial Purchasers
pursuant to Section 5(a) hereof an amendment or supplement that will
correct such statement or omission or effect such compliance and, in the
case of such an amendment or supplement that is to be filed under the
Exchange Act and that is incorporated by reference in the Final Memorandum,
will file such amendment or supplement with the Commission.
(e) The Company will cooperate with the Initial Purchasers and Counsel for the Initial Purchasers in connection with the qualification of the Securities for sale by the Initial Purchasers under the laws of such jurisdictions as the Initial Purchasers may designate and will maintain such qualifications in effect so long as required for the sale of the Securities; provided, however, that the Company shall not be required in connection therewith to register or qualify as a foreign corporation where it is not now so qualified or to execute a general consent to service of process in any jurisdiction or subject itself to taxation in any jurisdiction where it is not then so subject. The Company will promptly advise the Initial Purchasers of the receipt by the Company of any notification with respect to the suspension of the qualification of the Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose.
(f) Neither the Company nor any of its affiliates (as defined in Rule 501(b) of Regulation D), nor any person acting on its or their behalf will solicit any offer to buy or offer or sell the Securities by means of any form of general solicitation or general advertising (within the meaning of Regulation D).
(g) So long as any of the Securities are "restricted securities" within the meaning of Rule 144(a)(3) promulgated under the Securities Act, the Company will, unless it is subject to and complies with Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), provide to each holder of such restricted securities and to each prospective purchaser (as designated by such holder) of such restricted securities, upon the request of such holder or prospective purchaser, any information ("Rule 144A Information") required to be provided by Rule 144A(d)(4) or a successor provision under the Securities Act. This covenant is intended to be for the benefit of the holders, and the prospective purchasers designated by such holders, from time to time of such restricted securities.
(h) The Company will not, and will not permit any of its affiliates (as defined in Rule 501(b) of Regulation D) to, resell any Securities that have been acquired by any of them
other than pursuant to a registration statement filed with the Commission or an exemption from the registration requirements of the Securities Act.
(i) Neither the Company, nor any of its affiliates (as defined in Rule 501(b) of Regulation D), nor any person acting on its or their behalf (other than the Initial Purchasers or any affiliates thereof, as to which the Company is not responsible) will, directly or indirectly, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in the Securities Act) under circumstances that would require the registration of the Securities under the Securities Act.
(j) The Company shall use its best efforts in cooperation with the Initial Purchasers to permit the Securities to be eligible for clearance and settlement through The Depository Trust Company.
6. Conditions to the Obligations of the Initial Purchasers. The obligations of the Initial Purchasers to purchase the Securities shall be subject to the accuracy of the representations and warranties on the part of the Company contained herein as of the date and time that this Agreement is executed and delivered by the parties hereto (the "Execution Time") and the Closing Date, to the accuracy of the statements of the Company made in any certificates pursuant to the provisions hereof, to the performance by the Company of its obligations hereunder and to the following additional conditions:
(a) The Company shall have furnished to the Initial Purchasers the opinion of Baker & Botts, L.L.P., counsel for the Company, dated the Closing Date, to the effect that:
(i) the Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Delaware, with corporate power and authority to own its properties and conduct its business as described in the Final Memorandum;
(ii) the Company's authorized equity capitalization is as set forth in the Final Memorandum under the caption "Capitalization"; and the Securities conform to the description thereof contained in the Final Memorandum;
(iii) the Indenture has been duly authorized, executed and delivered by the Company, and (assuming the due authorization, execution and delivery thereof by the Trustee) is a legal, valid and binding agreement of the Company enforceable against the Company in accordance with its terms (subject, as to enforcement of remedies, to applicable bankruptcy, reorganization, insolvency, moratorium, fraudulent conveyance or other laws affecting creditors' rights generally from time to time in effect and general principles of equity (regardless of whether considered in a proceeding in equity or at law)); and the issuance and the sale of the Securities have been duly authorized by the Company and, the Securities, when executed and authenticated in accordance with the provisions of the Indenture and delivered to and paid for by the Initial Purchasers in accordance with the terms of this Agreement and in accordance with the terms of the Indenture, will constitute legal, valid and binding obligations of the Company entitled to the benefits of the Indenture (subject, as to enforcement of remedies, to applicable bankruptcy, reorganization, insolvency, moratorium, fraudulent conveyance or other laws affecting creditors' rights generally from time to time in effect and general principles (regardless of whether considered in a proceeding in equity or at law));
(iv) this Agreement has been duly authorized, executed and delivered by the Company;
(v) to the knowledge of such counsel, no consent, approval, authorization or order of any court or governmental agency or body is required for the consummation of the transactions contemplated herein, except such as may be required under the blue sky or securities laws of any jurisdiction in connection with the purchase and distribution of the Securities by the Initial Purchasers (as to which such counsel need express no opinion) and such other approvals (specified in such opinion) as have been obtained;
(vi) neither the issue and sale of the Securities by the Company, the execution and delivery by the Company of the Indenture, the consummation of any other of the transactions herein or therein contemplated nor the fulfillment of the terms hereof will conflict with, result in a breach or violation of, or constitute a default under (A) any law, (B) the certificate of incorporation or by-laws of the Company or (C) the terms of any indenture or other agreement or instrument providing for the borrowing of money known to such counsel and to which the Company or any of its subsidiaries is a party or bound except in the case of clauses (A) and (C) above, such conflict, breach, violation or default that is not, individually or in the aggregate reasonably likely to have a Material Adverse Effect;
(vii) assuming (A) the accuracy of the representations and warranties and compliance with the agreements of the Company and the Initial Purchasers contained herein, (B) the compliance by the Initial Purchasers with the offering and transfer procedures and restrictions described in the Final Memorandum, (C) the accuracy of the representations and warranties made in accordance with this Agreement and the Final Memorandum by the purchasers to whom you initially resell Securities and (D) that purchasers to whom you initially resell Securities receive a copy of the Final Memorandum prior to such sale, it is not necessary in connection with the offer, sale and delivery of the Securities in the manner contemplated by this Agreement to register the Securities under the Securities Act or to qualify the Indenture under the Trust Indenture Act of 1939; and
(viii) the Company is not required to be registered or regulated as an "investment company" within the meaning of the Investment Company Act.
Such counsel shall also state that such counsel has participated in conferences with officers and other representatives of the Company, representatives of the independent public accountants of the Company, your representatives and your counsel at which the contents of the Final Memorandum were discussed and, although such counsel did not independently verify such information and is not passing upon and does not assume any responsibility for the accuracy, completeness or fairness of the statements contained in the Final Memorandum, on the basis of the foregoing (relying as to factual matters upon statements of officers and other representatives of the Company and as to materiality to a large degree on officers and other representatives of the Company and your representatives) no facts came to such counsel's attention that led such counsel to believe that at the Execution Time the Final Memorandum (other than the financial statements, the notes thereto and the auditor's report thereon and the other financial, numerical, statistical and accounting data included or incorporated by reference therein, or omitted therefrom, as to which such counsel need express no belief)
contained an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading or that the Final Memorandum (other than the financial statements, the notes thereto and the auditor's report thereon and the other financial, numerical, statistical and accounting data included or incorporated by reference therein, or omitted therefrom, as to which such counsel need express no belief) includes an 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.
In rendering such opinion, such counsel may rely (A) as to matters involving the application of laws of any jurisdiction other than the State of Delaware, the State of New York, the State of Texas or the United States, to the extent they deem proper and specified in such opinion, upon the opinion of other counsel of good standing provided such opinions are also addressed to the Initial Purchasers and are in form and substance satisfactory to them and (B) as to matters of fact, to the extent they deem proper, on certificates of responsible officers of the Company and public officials.
All references in this Section 6(a) to the Final Memorandum shall be deemed to include any amendment or supplement thereto at the Closing Date.
(b) The Company shall have furnished to the Initial Purchasers the opinion of James L. McCulloch, general counsel of the Company, dated the Closing Date, to the effect that:
(i) each of Global Marine Drilling Company, Applied Drilling Technology Inc. and Global Marine Integrated Services - International Inc. (individually a "Subsidiary" and collectively the "Subsidiaries") has been duly incorporated and is validly existing as a corporation in good standing under the laws of the jurisdiction in which it is chartered or organized, with corporate power and authority to own its properties and conduct its business as described in the Final Memorandum, and the Company and each of the Subsidiaries is duly qualified to do business as a foreign corporation and is in good standing under the laws of each jurisdiction which requires such qualification wherein it owns or leases material properties or conducts material business, except as would not have a Material Adverse Effect;
(ii) all the outstanding shares of capital stock of each Subsidiary have been duly and validly authorized and issued and are fully paid and nonassessable, and, except as otherwise set forth in the Final Memorandum, all outstanding shares of capital stock of the Subsidiaries are owned by the Company either directly or through wholly owned subsidiaries free and clear of any perfected security interest and, to the knowledge of such counsel, any other security interests, claims, liens or encumbrances;
(iii) the Company's authorized equity capitalization is as set forth in the Final Memorandum; and the Securities conform to the description thereof contained in the Final Memorandum;
(iv) no consent, approval, authorization or order of any court or governmental agency or body is required for the consummation of the transactions contemplated herein, except such as may be required under the blue sky or securities laws of any jurisdiction in connection with the purchase and distribution of the
Securities by the Initial Purchasers, as to which such counsel need express no opinion, and such other approvals (specified in such opinion) as have been obtained;
(v) neither the issue and sale of the Securities by the Company, the execution and delivery by the Company of the Indenture, the consummation of any other of the transactions herein or therein contemplated nor the fulfillment of the terms hereof, will conflict with, result in a breach or violation of, or constitute a default under (A) any law, (B) the certificate of incorporation or by-laws of the Company, (C) the terms of any indenture or other agreement or instrument known to such counsel and to which the Company or any of its subsidiaries is a party or bound or (D) any judgment, order or decree known to such counsel to be applicable to the Company or its Subsidiaries of any court, regulatory body, administrative agency, governmental body or arbitrator having jurisdiction over the Company or its Subsidiaries except in the case of clauses (A), (C) and (D) above, such conflict, breach, violation or default that is not, individually or in the aggregate reasonably likely to have a Material Adverse Effect;
(vi) except as set forth in the Final Memorandum, the Company and its Subsidiaries possess and are in compliance with all approvals, certificates, authorizations, licenses and permits issued by the appropriate state, Federal or foreign regulatory agencies or bodies necessary to conduct their business as described in the Final Memorandum, except where the failure to possess such approvals, certificates, authorizations, licenses and permits or be in compliance therewith would not be reasonably likely to have a Material Adverse Effect and to the knowledge of such counsel, none of the Company or its Subsidiaries, has received any notice of proceedings relating to the revocation or modification of any such approval, certificate, authorization, license or permit which, individually or in the aggregate, if it became the subject of an unfavorable decision, ruling or finding, would be reasonably likely to have a Material Adverse Effect; and
(vii) to the knowledge of such counsel, there is no pending or threatened action, suit or proceeding before any court or government agency, authority or body or any arbitrator to which the Company or its Subsidiaries is a party which is of a character that would be required to be disclosed in the Final Memorandum if it were filed as a registration statement on Form S-1 with the Commission under the Securities Act, which is not disclosed in the Final Memorandum.
Such counsel shall also state that such counsel has participated in conferences with officers and other representatives of the Company, representatives of the independent public accountants of the Company, your representatives and your counsel at which the contents of the Final Memorandum were discussed and, although such counsel did not independently verify such information and is not passing upon and does not assume any responsibility for the accuracy, completeness or fairness of the statements contained in the Final Memorandum, on the basis of the foregoing (relying as to factual matters upon statements of officers and other representatives of the Company and as to materiality to a large degree on officers and other representatives of the Company and your representatives) no facts came to such counsel's attention that led such counsel to believe that at the Execution Time the Final Memorandum (other than the financial statements, the notes thereto and the auditor's report thereon and the other financial, numerical, statistical and accounting data included or incorporated by reference therein, or omitted therefrom, as to which such counsel need express no belief)
contained an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading or that the Final Memorandum (other than the financial statements, the notes thereto and the auditor's report thereon and the other financial, numerical, statistical and accounting data included or incorporated by reference therein, or omitted therefrom, as to which such counsel need express no belief) includes an 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.
In rendering such opinion, such counsel may rely (A) as to matters involving the application of laws of any jurisdiction other than the State of Delaware, the State of Texas or the United States, to the extent he deems proper and specified in such opinion, upon the opinion of other counsel of good standing provided such opinions are also addressed to the Initial Purchasers and are in form and substance satisfactorily to them and (B) as to matters of fact, to the extent he deems proper, on certificates of responsible officers of the Company and public officials.
All references in this Section 6(b) to the Final Memorandum shall be deemed to include any amendment or supplement thereto at the Closing Date.
(c) The Initial Purchasers shall have received from Counsel for the Initial Purchasers such opinion or opinions, dated the Closing Date, with respect to the issuance and sale of the Securities, the Indenture, the Final Memorandum (together with any amendment or supplement thereof or thereto) and other related matters as the Initial Purchasers may reasonably require, and the Company shall have furnished to such counsel such documents as they request for the purpose of enabling them to pass upon such matters.
(d) The Company shall have furnished to the Initial Purchasers a certificate of the Company, signed by the Chairman of the Board or the President or any Vice President and the principal financial or accounting officer of the Company, dated the Closing Date, to the effect that the signers of such certificate have carefully examined the Final Memorandum, any amendment or supplement to the Final Memorandum and this Agreement and that:
(i) the representations and warranties of the Company in this Agreement are true and correct in all material respects on and as of the Closing Date with the same effect as if made on the Closing Date and the Company has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to the Closing Date; and
(ii) since the date of the most recent financial statements included in the Final Memorandum (exclusive of any amendment or supplement thereof or thereto), there has been no material adverse change in the condition (financial or other), earnings, business or properties of the Company and its subsidiaries, whether or not arising from transactions in the ordinary course of business, except as set forth in or contemplated in the Final Memorandum (exclusive of any amendment or supplement thereof or thereto).
(e) At the Execution Time and at the Closing Date, Coopers & Lybrand L.L.P. shall have furnished to the Initial Purchasers a letter or letters, dated, respectively, as of the Execu-
tion Time and as of the Closing Date, in form and substance satisfactory to the Initial Purchasers, confirming that they are independent certified public accountants with respect to the Company under Rule 101 of the Code of Professional Conduct of the American Institute of Certified Public Accountants (the "AICPA"), and its interpretations and rulings, and stating in effect that:
(i) in their opinion the audited financial statements incorporated by reference in the Final Memorandum and reported on by them comply in form in all material respects with the applicable accounting requirements of the Exchange Act and the related published rules and regulations thereunder;
(ii) on the basis of performing procedures specified by the AICPA for a review of interim financial information as described in SAS No. 71, Interim Financial Information, on the unaudited condensed consolidated financial statements; a reading of the minutes of the meetings of the directors and audit committee of the Company; and inquiries of certain officials of the Company who have responsibility for financial and accounting matters of the Company and its subsidiaries as to transactions and events subsequent to December 31, 1996, nothing came to their attention that caused them to believe that:
(1) any material modification should be made to the unaudited condensed consolidated financial statements incorporated by reference in the Final Memorandum for them to be in conformity with generally accepted accounting principles;
(2) the unaudited condensed consolidated financial statements incorporated by reference in the Final Memorandum do not comply as to form in all material respects with the applicable accounting requirements of the Exchange Act and related published rules and regulations of the Commission;
(3) there were, at July 31, 1997, any changes in the capital stock, increases in the long-term debt, or decreases in net current assets or shareholders' equity of the Company as compared with the amounts shown in the June 30, 1997 unaudited condensed consolidated balance sheet incorporated by reference in the Final Memorandum, or for the period from July 1, 1997 to July 31, 1997, there were any decreases, as compared to the corresponding period in the preceding year, in consolidated revenues or in total or per-share amounts of net income except in all instances for changes, increases, or decreases that the Final Memorandum discloses have occurred or may occur; or
(4) with respect to the period subsequent to July 31, 1997, there was, at a specified date not more than five business days prior to the date of the letter, any change in the capital stock, increase in long-term debt or any decrease in consolidated net current assets or shareholders' equity of the Company as compared with amounts shown on the June 30, 1997 unaudited condensed consolidated balance sheet incorporated by reference in the Final Memorandum; or for the period from August 1, 1997 to such specified date, there were any decreases, as compared with the corresponding period in the
preceding year, in consolidated revenues or in the total or per- share amounts of net income, except or changes, increases, or decreases that the Final Memorandum or documents incorporated by reference therein discloses have occurred or may occur; and
(iii) they have performed certain other specified procedures as a result of which they determined that certain information of an accounting, financial or statistical nature (which is limited to accounting, financial or statistical information derived from the general accounting records of the Company and its subsidiaries) set forth in the Final Memorandum, including the information set forth under the captions "Summary Financial and Operating Data" and "Summary Quarterly Financial and Operating Data" in the Final Memorandum, the information included or incorporated in Items 1, 2, 6, 7, and 11 of the Company's Annual Report on Form 10-K, incorporated in the Final Memorandum, and the information included in the "Management's Discussion and Analysis of Financial Condition and Results of Operations" included or incorporated in the Company's Quarterly Reports on Form 10-Q, incorporated in the Final Memorandum, agrees with the accounting records of the Company and its subsidiaries, excluding any questions of legal interpretation.
References to the Final Memorandum in this Section 6(e) include any amendment or supplement thereof or thereto at the date of the letter.
(f) Subsequent to the Execution Time or, if earlier, the dates as of which information is given in the Final Memorandum, there shall not have been (i) any increase or decrease specified in the letter or letters referred to in Section 6(e) hereof or (ii) any change, or any development involving a prospective change, in or affecting the business or properties of the Company and its subsidiaries the effect of which, in any case referred to in clause (i) or (ii) above, is, in the judgment of the Initial Purchasers, so material and adverse as to make it impractical or inadvisable to market the Securities as contemplated by the Final Memorandum.
(g) As of the Closing Date the Securities shall be rated not lower than BBB- by Standard & Poor's Corporation and Baa2 by Moody's Investors Service, Inc. Subsequent to the Execution Time, there shall not have been any decrease in the rating of any of the Company's debt securities by any "nationally recognized statistical rating organization" (as defined for purposes of Rule 436(g) promulgated under the Securities Act) or any notice given of any intended or potential decrease in any such rating or of a possible change in any such rating that does not indicate the direction of the possible change.
(h) Prior to the Closing Date, the Company shall have furnished to the Initial Purchasers such further information, certificates and documents as the Initial Purchasers may reasonably request.
If any of the conditions specified in this Section 6 shall not have been fulfilled in all material respects when and as provided in this Agreement, or if any of the opinions and certificates mentioned above or elsewhere in this Agreement shall not be in all material respects reasonably satisfactory in form and substance to the Initial Purchasers and Counsel for the Initial Purchasers, this Agreement and all obligations of the Initial Purchasers hereunder may be canceled at, or at any time prior to, the Closing Date by the Initial Purchasers. Notice of such cancellation shall be given to the Company in writing or by telephone, facsimile or telegraph confirmed in writing.
The documents required to be delivered by this Section 6 shall be delivered at the office of Fulbright & Jaworski L.L.P., 1301 McKinney, Suite 5100, Houston, Texas 77010-3095, on the Closing Date.
7. Reimbursement of Initial Purchasers' Expenses. If the sale of the Securities provided for herein is not consummated because any condition to the obligations of the Initial Purchasers set forth in Section 6 hereof is not satisfied, because of any termination pursuant to Section 10 hereof or because of any refusal, inability or failure on the part of the Company to perform any agreement herein or comply with any provision hereof other than by reason of a default by the Initial Purchasers in the payment for the Securities on the Closing Date, the Company will reimburse the Initial Purchasers severally upon demand for all out-of-pocket expenses (including reasonable fees and disbursements of counsel) that shall have been incurred by them in connection with the proposed purchase and sale of the Securities.
8. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each Initial Purchaser, the directors, officers, employees and agents of each Initial Purchaser and each person who controls any Initial Purchaser within the meaning of either the Securities Act or the Exchange Act against any and all losses, claims, damages or liabilities, joint or several, to which they or any of them may become subject under the Securities Act, the Exchange Act or other Federal or state statutory law or regulation, at common law or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Preliminary Memorandum, the Final Memorandum or any Rule 144A Information provided by the Company to any holder or prospective purchaser of Securities pursuant to Section 5(g), or in any amendment thereof or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and agrees to reimburse each such indemnified party, as incurred, for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the Company will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made in the Preliminary Memorandum or the Final Memorandum, or in any amendment thereof or supplement thereto, in reliance upon and in conformity with written information furnished to the Company by or on behalf of the Initial Purchasers specifically for inclusion therein; provided further, that with respect to any untrue statement or omission of material fact made in the Preliminary Memorandum, the indemnity agreement contained in this Section 8(a) shall not inure to the benefit of any Initial Purchaser from whom the person asserting any such loss, claim, damage or liability purchased the Securities concerned, to the extent that any such loss, claim, damage or liability of such Initial Purchaser occurs under the circumstance where it shall have been determined by a court of competent jurisdiction by final and nonappealable judgment that (w) the Company had previously furnished copies of the Final Memorandum to the Initial Purchasers, (x) delivery of the Final Memorandum was required to be made to such person, (y) the untrue statement or omission of a material fact contained in the Preliminary Memorandum was corrected in the Final Memorandum and (z) there was not sent or given to such person, at or prior to the written confirmation of the sale of such Securities to such person, a copy of the Final Memorandum. This indemnity agreement will be in addition to any liability that the Company may otherwise have.
(b) Each Initial Purchaser agrees to severally indemnify and hold harmless the Company, its directors, its officers and each person who controls the Company within the meaning of either the Securities Act or the Exchange Act, to the same extent as the foregoing indemnity from the Company to each Initial Purchaser, but only with reference to written information relating to such Initial Purchaser furnished to the Company by or on behalf of such Initial Purchaser specifically for inclusion in the Preliminary Memorandum or the Final Memorandum (or in any amendment or supplement thereof or thereto). This indemnity agreement will be in addition to any liability that any Initial Purchaser may otherwise have. The Company acknowledges that the statements set forth in the last paragraph of the cover page and under the heading "Plan of Distribution" in the Preliminary Memorandum and the Final Memorandum constitute the only information furnished in writing by or on behalf of the Initial Purchasers for inclusion in the Preliminary Memorandum or the Final Memorandum (or in any amendment or supplement thereof or thereto).
(c) Promptly after receipt by an indemnified party under this Section
8 of notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party
(i) will not relieve it from liability under Section 8(a) or 8(b) hereof
unless and to the extent it did not otherwise learn of such action and such
failure results in the forfeiture by the indemnifying party of substantial
rights and defenses and (ii) will not, in any event, relieve the
indemnifying party from any obligations to any indemnified party other than
the indemnification obligation provided in Section 8(a) or 8(b) hereof.
The indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to
represent the indemnified party in any action for which indemnification is
sought (in which case the indemnifying party shall not thereafter be
responsible for the fees and expenses of any separate counsel retained by
the indemnified party or parties except as set forth below); provided,
however, that such counsel shall be reasonably satisfactory to the
indemnified party. Notwithstanding the indemnifying party's election to
appoint counsel to represent the indemnified party in an action, the
indemnified party shall have the right to employ separate counsel
(including local counsel), and the indemnifying party shall bear the
reasonable fees, costs and expenses of such separate counsel if (i) the use
of counsel chosen by the indemnifying party to represent the indemnified
party would present such counsel with a conflict of interest, (ii) the
actual or potential defendants in, or targets of, any such action include
both the indemnified party and the indemnifying party and the indemnified
party shall have reasonably concluded that there may be legal defenses
available to it and/or other indemnified parties that are different from or
additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel reasonably satisfactory
to the indemnified party to represent the indemnified party within a
reasonable time after notice of the institution of such action or (iv) the
indemnifying party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party, it being understood that
the indemnifying party shall not be liable for more than one separate firm
(in addition to one local counsel in each jurisdiction) for all indemnified
parties in each jurisdiction in which any claim or action arising out of
the same general allegations or circumstances is brought. An indemnifying
party will not, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with
respect to any pending or threatened claim, action, suit or proceeding in
respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified parties are actual or potential parties to
such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party
from all liability arising out of such claim, action, suit or proceeding. An indemnifying party will not, without its prior consent, be liable for any settlement or compromise or consent to the entry of any judgment.
(d) In the event that the indemnity provided in Section 8(a) or 8(b) hereof is unavailable to or insufficient for any reason to hold harmless an indemnified party (other than as set forth therein), the Company and the Initial Purchasers agree to contribute to the aggregate losses, claims, damages and liabilities (including legal or other expenses reasonably incurred in connection with investigating or defending same) (collectively "Losses") to which the Company and the Initial Purchasers may be subject in such proportion as is appropriate to reflect the relative benefits received by the Company and by the Initial Purchasers from the offering of the Securities; provided, however, that in no case shall any Initial Purchaser (except as may be provided in any agreement among the Initial Purchasers relating to the offering of the Securities) be responsible for any amount in excess of the purchase discount or commission applicable to the Securities purchased by such Initial Purchaser hereunder. If the allocation provided by the immediately preceding sentence is unavailable for any reason, the Company and the Initial Purchasers shall contribute in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company and of the Initial Purchasers in connection with the statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. Benefits received by the Company shall be deemed to be equal to the total net proceeds from the offering of the Securities (before deducting expenses), and benefits received by the Initial Purchasers shall be deemed to be equal to the total purchase discounts and commissions, in each case as set forth on the cover page of the Final Memorandum. Relative fault shall be determined by reference to whether any alleged untrue statement or omission relates to information provided by the Company or the Initial Purchasers. The Company and the Initial Purchasers agree that it would not be just and equitable if contribution were determined by pro rata allocation or any other method of allocation that does not take account of the equitable considerations referred to above. Notwithstanding the provisions of this Section 8(d), no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 8, each person who controls any Initial Purchaser within the meaning of either the Securities Act or the Exchange Act and each director, officer, employee and agent of an Initial Purchaser shall have the same rights to contribution as such Initial Purchaser, and each person who controls the Company within the meaning of either the Securities Act or the Exchange Act and each officer and director of the Company shall have the same rights to contribution as the Company, subject in each case to the applicable terms and conditions of this Section 8(d).
9. Default by an Initial Purchaser. If any one or more Initial Purchasers shall fail to purchase and pay for any of the Securities agreed to be purchased by such Initial Purchaser hereunder and such failure to purchase shall constitute a default in the performance of its or their obligations under this Agreement, the remaining Initial Purchasers shall be obligated severally to take up and pay for (in the respective proportions that the principal amount of Securities set forth opposite their names in Schedule I hereto bears to the aggregate principal amount of Securities set forth opposite the names of all the remaining Initial Purchasers) the Securities that the defaulting Initial Purchaser or Initial Purchasers agreed but failed to purchase; provided, however, that in the event that the aggregate principal amount of Securities that the defaulting Initial Purchaser or Initial Purchasers agreed but failed to purchase shall exceed 10% of the aggregate principal amount of Securities set forth in Schedule I hereto, the remaining Initial Purchasers shall have the right to purchase all, but shall not be under any obligation to purchase any, of the Securities,
and if such non-defaulting Initial Purchasers do not purchase all the Securities, this Agreement will terminate without liability to any non-defaulting Initial Purchaser or the Company. In the event of a default by any Initial Purchaser as set forth in this Section 9, the Closing Date shall be postponed for such period, not exceeding seven days, as the Initial Purchasers shall determine in order that the required changes in the Final Memorandum or in any other documents or arrangements may be effected. Nothing contained in this Agreement shall relieve any defaulting Initial Purchaser of its liability, if any, to the Company or any non-defaulting Initial Purchaser for damages occasioned by its default hereunder.
10. Termination. This Agreement shall be subject to termination in the
absolute discretion of the Initial Purchasers, by notice given to the Company
prior to delivery of and payment for the Securities, if prior to such time (i)
trading in the Company's Common Stock shall have been suspended by the
Commission or the New York Stock Exchange or trading in securities generally on
the New York Stock Exchange shall have been suspended, limited or minimum
prices shall have been established on such exchange, (ii) a banking moratorium
shall have been declared either by Federal or New York State authorities or
(iii) there shall have occurred any outbreak or escalation of hostilities,
declaration by the United States of a national emergency or war or other
calamity or crisis the effect of which on financial markets is such as to make
it, in the judgment of the Initial Purchasers, impracticable or inadvisable to
proceed with the offering or delivery of the Securities as contemplated by the
Final Memorandum.
11. Representations and Indemnities to Survive. The respective agreements, representations, warranties, indemnities and other statements of the Company or its officers and of the Initial Purchasers set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation made by or on behalf of the Initial Purchasers or the Company or any of the officers, directors or controlling persons referred to in Section 8 hereof, and will survive delivery of and payment for the Securities. The provisions of Sections 7 and 8 hereof shall survive the termination or cancellation of this Agreement.
12. Notices. All communications hereunder will be in writing and effective only on receipt, and, if sent to the Initial Purchasers, will be mailed, delivered, telegraphed or sent by facsimile and confirmed to them, care of Salomon Brothers Inc, at Seven World Trade Center, New York, New York, 10048; or, if sent to the Company, will be mailed, delivered, telegraphed or sent by facsimile and confirmed to it at 777 North Eldridge Parkway, Houston, Texas 77079-4493, attention of General Counsel.
13. Successors. This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors and the officers and directors and controlling persons referred to in Section 8 hereof, and, except as expressly set forth in Section 5(g) hereof, no other person will have any right or obligation hereunder.
14. Applicable Law. This Agreement will be governed by and construed in accordance with the laws of the State of New York.
15. Business Day. For purposes of this Agreement, "business day" means each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which banking institutions in The City of New York, New York are authorized or obligated by law, executive order or regulation to close.
16. Counterparts. This Agreement may be executed in two or more counterparts, each of which will be deemed to be an original, but all such counterparts will together constitute one and the same instrument.
If the foregoing is in accordance with your understanding of our agreement, please sign and return to us the enclosed duplicate hereof, whereupon this letter and your acceptance shall represent a binding agreement between the Company and the Initial Purchasers.
Very truly yours,
GLOBAL MARINE INC.
By: /s/ J.L. MCCULLOCH
--------------------------------------------
Name: J.L. McCulloch
-------------------------------------
Title: Vice President
------------------------------------
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The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
SALOMON BROTHERS INC
BT ALEX. BROWN INCORPORATED
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
MORGAN STANLEY & CO. INCORPORATED
By: SALOMON BROTHERS INC
By: /s/ JAMES C.V. ROGERS
-----------------------------------------
Name: James C.V. Rogers
-----------------------------
Title: Vice President
----------------------------
|
SCHEDULE I
Principal Amount
of Securities
Initial Purchasers to be Purchased
---------------------------------------------------------------------- ---------------
Salomon Brothers Inc $ 60,000,000
BT Alex. Brown Incorporated 60,000,000
Donaldson, Lufkin & Jenrette Securities Corporation 60,000,000
Merrill Lynch, Pierce, Fenner & Smith 60,000,000
Incorporated
Morgan Stanley & Co. Incorporated 60,000,000
------------
TOTAL $300,000,000
============
|
EXHIBIT 4.3
GLOBAL MARINE INC.
$300,000,000 7 1/8% NOTES DUE 2007
REGISTRATION RIGHTS AGREEMENT
New York, New York
September 15, 1997
Salomon Brothers Inc
BT Alex. Brown Incorporated
Donaldson, Lufkin & Jenrette Securities Corporation
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Morgan Stanley & Co. Incorporated
c/o Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Ladies and Gentlemen:
Global Marine Inc., a Delaware corporation (the "Company"), proposes to issue and sell to certain purchasers (the "Initial Purchasers"), upon the terms set forth in a purchase agreement of even date herewith (the "Purchase Agreement"), its 7 1/8% Notes Due 2007 (the "Securities") (the "Initial Placement"). As an inducement to the Initial Purchasers to enter into the Purchase Agreement and in satisfaction of a condition to your obligations thereunder, the Company agrees with you, (i) for your benefit and the benefit of the other Initial Purchasers and (ii) for the benefit of the holders from time to time of the Transfer Restricted Securities (as defined herein) (each of the foregoing a "Holder" and together the "Holders"), as follows:
1. Definitions. Capitalized terms used herein without definition shall have their respective meanings set forth in the Purchase Agreement. As used in this Agreement, the following capitalized defined terms shall have the following meanings:
"Act" means the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder.
"Affiliate" of any specified person means any other person which, directly or indirectly, is in control of, is controlled by, or is under common control with, such specified person. For purposes of this definition, control of a person means the power, direct or indirect, to direct or cause the direction of the management and policies of such person whether by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing.
"Closing Date" has the meaning set forth in the Purchase Agreement.
"Commission" means the Securities and Exchange Commission.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder.
"Exchange Offer Registration Period" means the 180-day period following the expiration date of the Registered Exchange Offer, exclusive of any period during which any stop order shall be in effect suspending the effectiveness of the Exchange Offer Registration Statement.
"Exchange Offer Registration Statement" means a registration statement of the Company on an appropriate form under the Act with respect to the Registered Exchange Offer, all amendments and supplements to such registration statement, including post-effective amendments, in each case including the Prospectus contained therein, all exhibits thereto and all material incorporated by reference therein.
"Exchanging Dealer" means any Holder (which may include the Initial Purchasers) that is a broker-dealer, electing to exchange Securities acquired for its own account as a result of market-making activities or other trading activities for New Securities.
"Holder" has the meaning set forth in the preamble hereto.
"Indenture" means the Indenture relating to the Securities dated as of September , 1997, between the Company and Wilmington Trust Company, as trustee, as the same may be amended from time to time in accordance with the terms thereof.
"Initial Placement" has the meaning set forth in the preamble hereto.
"Majority Holders" means the Holders of a majority of the aggregate principal amount of securities registered under a Registration Statement.
"Managing Underwriters" means the investment banker or investment bankers and manager or managers that shall administer an underwritten offering.
"New Securities" means debt securities of the Company identical in all material respects to the Securities (except that the interest rate step-up provisions and the transfer restrictions will be modified or eliminated, as described herein), to be issued under the Indenture.
"Prospectus" means the prospectus included in any Registration Statement (including, without limitation, a prospectus that discloses information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A under the Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Securities or the New Securities, covered by such Registration Statement, and all amendments and supplements to the Prospectus, including post-effective amendments, and in each case including all material incorporated by reference therein.
"Registered Exchange Offer" means the proposed offer to the Holders to issue and deliver to such Holders, in exchange for the Securities, a like principal amount of the New Securities.
"Registration Default" has the meaning set forth in Section 4 hereof.
"Registration Statement" means any Exchange Offer Registration Statement or Shelf Registration Statement that covers any of the Securities or the New Securities pursuant to the provisions of this Agreement, amendments and supplements to such registration statement, including post-effective amendments, in each case including the Prospectus contained therein, all exhibits thereto and all material incorporated by reference therein.
"Securities" has the meaning set forth in the preamble hereto.
"Shelf Registration" means a registration effected pursuant to
Section 3 hereof.
"Shelf Registration Period" has the meaning set forth in Section 3(b) hereof.
"Shelf Registration Statement" means a "shelf" registration statement of the Company pursuant to the provisions of Section 3 hereof which covers some or all of the Securities or New Securities, as applicable, on an appropriate form under Rule 415 under the Act, or any similar rule that may be adopted by the Commission, amendments and supplements to such registration statement, including post-effective amendments, in each case including the Prospectus contained therein, all exhibits thereto and all material incorporated by reference therein.
"Transfer Restricted Security" means each Security or New Security until (i) the date on which such Transfer Restricted Security has been exchanged by a person other than a broker dealer for a New Security in the Registered Exchange Offer that is freely transferable under the Act, (ii) following the exchange by a broker dealer in the Registered Exchange Offer of a Transfer Restricted Security for a New Security, the date on which such New Security is sold to a purchaser who receives from such broker dealer on or prior to the date of such sale a copy of the prospectus contained in the Exchange Offer Registration Statement, (iii) the date on which such Transfer Restricted Security has been effectively registered under the Act and disposed of in accordance with the Shelf Registration Statement or (iv) the date on which such Transfer Restricted Security is distributed to the public pursuant to Rule 144 under the Act or is saleable pursuant to Rule 144(k) under the Act.
"Trustee" means the trustee with respect to the Securities under the Indenture.
"underwriter" means any underwriter of Securities in connection with an offering thereof under a Shelf Registration Statement.
2. Registered Exchange Offer; Resales of New Securities by Exchanging Dealers; Private Exchange.
(a) To the extent not prohibited by law (including any applicable interpretations of the staff of the Commission), the Company shall prepare and, not later than 150 days following the Closing Date, shall file with the Commission the Exchange Offer Registration Statement with respect to the Registered Exchange Offer. The Company shall use its best efforts to cause the Exchange Offer Registration Statement to become effective under the Act within 180 days of the Closing Date.
(b) Upon the effectiveness of the Exchange Offer Registration Statement, the Company shall promptly commence the Registered Exchange Offer, it being the objective of such Registered Exchange Offer to enable each Holder electing to exchange Securities for New Securities (assuming that such Holder is not an affiliate of the Company within the meaning of
the Act, acquires the New Securities in the ordinary course of such Holder's business and has no arrangements with any person to participate in the distribution of the New Securities) to trade such New Securities from and after their receipt without any limitations or restrictions under the Act and without material restrictions under the securities laws of a substantial proportion of the several states of the United States.
(c) In connection with the Registered Exchange Offer, the Company shall:
(i) mail to each Holder a copy of the Prospectus forming part of the Exchange Offer Registration Statement, together with an appropriate letter of transmittal and related documents;
(ii) keep the Registered Exchange Offer open for not less than 30 days after the date notice thereof is mailed to the Holders (or longer if required by applicable law);
(iii) utilize the services of a depositary for the Registered Exchange Offer with an address in the Borough of Manhattan, The City of New York; and
(iv) comply in all respects with all applicable laws.
(d) As soon as practicable after the close of the Registered Exchange Offer, the Company shall:
(i) accept for exchange all Securities tendered and not validly withdrawn pursuant to the Registered Exchange Offer;
(ii) deliver to the Trustee for cancellation all Securities so accepted for exchange; and
(iii) cause the Trustee promptly to authenticate and deliver to each Holder of Securities New Securities equal in principal amount to the Securities of such Holder so accepted for exchange.
(e) The Initial Purchasers and the Company acknowledge that, pursuant to interpretations by the Commission's staff of Section 5 of the Act, and in the absence of an applicable exemption therefrom, each Exchanging Dealer is required to deliver a Prospectus in connection with a sale of any New Securities received by such Exchanging Dealer pursuant to the Registered Exchange Offer in exchange for Securities acquired for its own account as a result of market-making activities or other trading activities. Accordingly, the Company shall:
(i) include the information set forth in Annex A hereto on the cover of the Exchange Offer Registration Statement, in Annex B hereto in the forepart of the Exchange Offer Registration Statement in a section setting forth details of the Exchange Offer, and in Annex C hereto in the underwriting or plan of distribution section of the Prospectus forming a part of the Exchange Offer Registration Statement, and include the information set forth in Annex D hereto in the Letter of Transmittal delivered pursuant to the Registered Exchange Offer; and
(ii) use its best efforts to keep the Exchange Offer Registration Statement continuously effective under the Act during the Exchange Offer Registration Period for delivery by Exchanging Dealers in connection with sales of New Securities received pursuant to the Registered Exchange Offer, as contemplated by Section 5(i) hereof.
(f) In the event that any Initial Purchaser determines that it is not eligible to participate in the Registered Exchange Offer with respect to the exchange of Securities constituting any portion of an unsold allotment, at the request of such Initial Purchaser, the Company shall issue and deliver to such Initial Purchaser or the party purchasing New Securities registered under a Shelf Registration Statement as contemplated by Section 3 hereof from such Initial Purchaser, in exchange for such Securities, a like principal amount of New Securities. The Company shall seek to cause the CUSIP Service Bureau to issue the same CUSIP number for such New Securities as for New Securities issued pursuant to the Registered Exchange Offer.
3. Shelf Registration. If, (i) because of any change in law
or applicable interpretations thereof by the Commission's staff, the Company
determines upon advice of its outside counsel that it is not permitted to
effect the Registered Exchange Offer as contemplated by Section 2 hereof, (ii)
if for any other reason the Exchange Offer Registration Statement is not
declared effective within 180 days of the Closing Date, (iii) if any Initial
Purchaser so requests with respect to Securities not eligible to be exchanged
for New Securities in the Registered Exchange Offer and held by it following
consummation of the Registered Exchange Offer, (iv) if in the reasonable
opinion of Fulbright & Jaworski L.L.P. any Holder (other than an Initial
Purchaser) is not eligible to participate in the Registered Exchange Offer or
(v) in the case of any Initial Purchaser that participates in the Registered
Exchange Offer or acquires New Securities pursuant to Section 2(f) hereof, such
Initial Purchaser does not receive freely tradeable New Securities in exchange
for Securities constituting any portion of an unsold allotment (it being
understood that, for purposes of this Section 3, (x) the requirement that an
Initial Purchaser deliver a Prospectus containing the information required by
Items 507 and/or 508 of Regulation S-K promulgated under the Act in connection
with sales of New Securities acquired in exchange for such Securities shall
result in such New Securities being not "freely tradeable" but (y) the
requirement that an Exchanging Dealer deliver a Prospectus in connection with
sales of New Securities acquired in the Registered Exchange Offer in exchange
for Securities acquired as a result of market-making activities or other
trading activities shall not result in such New Securities being not "freely
tradeable"), the following provisions shall apply:
(a) The Company shall as promptly as practicable (but in no event more than 30 days after so required or requested pursuant to this Section 3), file with the Commission and thereafter shall use its best efforts to cause to be declared effective under the Act by the 210th day after the Closing Date (or promptly in the event of a request by an Initial Purchaser), a Shelf Registration Statement relating to the offer and sale of the Securities or the New Securities, as applicable, by the Holders from time to time in accordance with the methods of distribution elected by such Holders and set forth in such Shelf Registration Statement; provided, that with respect to New Securities received by an Initial Purchaser in exchange for Securities constituting any portion of an unsold allotment, the Company may, if permitted by current interpretations by the Commission's staff, file a post-effective amendment to the Exchange Offer Registration Statement containing the information required by Regulation S-K Items 507 and/or 508, as applicable, in satisfaction of its obligations under this Section 3(a) with respect thereto, and any such Exchange Offer Registration Statement, as so amended, shall be referred to herein as, and governed by the provisions herein applicable to, a Shelf Registration Statement.
(b) The Company shall use its best efforts to keep
the Shelf Registration Statement continuously effective to permit
the Prospectus forming part thereof to be usable by Holders until
the earliest of (i) the second anniversary of the Closing Date (or
the first anniversary of the date the Shelf Registration Statement
is declared effective by the Commission if the Shelf Registration
Statement is filed at the request of an Initial Purchaser), (ii)
the time when the Securities or New Securities, as applicable,
covered by the Shelf Registration Statement can be sold by
non-affiliates pursuant to Rule 144 promulgated under the Act
without limitation under clauses (c), (e), (f) and (h) of Rule 144
or (iii) when all the Securities or New Securities, as applicable,
covered by the Shelf Registration Statement have been sold
pursuant to the Shelf Registration Statement (in any such case,
such period being called the "Shelf Registration Period"). During
any consecutive 365-day period, the Company will have the ability
to suspend the availability of the Shelf Registration Statement
for up to two periods of up to 45 consecutive days each, but no
more than an aggregate of 60 days during any 365-day period. The
Company shall be deemed not to have used its best efforts to keep
the Shelf Registration Statement effective during the requisite
period if it voluntarily takes any action that would result in
Holders of securities covered thereby not being able to offer and
sell such securities during that period, unless (i) such action is
required by applicable law or (ii) such action is taken by the
Company in good faith and for valid business reasons (not
including avoidance of the Company's obligations hereunder),
including the acquisition or divestiture of assets, so long as the
Company promptly thereafter complies with the requirements of
Section 5(l) hereof, if applicable.
4. Special Interest. In the event that either (i) the
Exchange Offer Registration Statement is not filed with the Commission on or
prior to the 150th day following the Closing Date, (ii) the Exchange Offer
Registration Statement is not declared effective nor (if the Registered
Exchange Offer is not permitted as described in Section 3 hereof) a Shelf
Registration Statement is filed with the Commission with respect to the
Securities on or prior to the 180th day following the Closing Date or (iii) the
Registered Exchange Offer is not consummated or a Shelf Registration Statement
with respect to the Securities is not declared effective on or prior to the
210th day following the date of original issuance of the Securities (each such
event referred to in clause (i), (ii) or (iii), a "Registration Default"),
interest will accrue (in addition to stated interest on the Securities) from
and including the next day following each such Registration Default. In each
case such additional interest (the "Special Interest") will be payable in cash
semiannually in arrears each March 1 and September 1, commencing March 1, 1998,
at a rate per annum equal to 0.25% of the principal amount of the Securities
for each such Registration Default. The aggregate amount of Special Interest
payable pursuant to the above provisions will in no event exceed 0.25% per
annum of the principal amount of the Securities. Upon (1) the filing of the
Exchange Offer Registration Statement after the 150-day period described in
clause (i) above, (2) the effectiveness of the Exchange Offer Registration
Statement after the 180-day period described in clause (ii) above or (3) the
consummation of the Exchange Offer or the effectiveness of a Shelf Registration
Statement, as the case may be, after the 210-day period described in clause
(iii) above, the Special Interest payable as result of the applicable
Registration Default on the Securities from the date of such filing,
effectiveness or consummation, as the case may be, will cease to accrue and all
accrued and unpaid Special Interest as of the occurrence of clause (1), (2) or
(3) shall be paid to the holders of the Securities on the relevant payment date
referred to above. For purposes of the preceding sentence, the curing of a
Registration Default by the means described in clause (2) above shall
constitute a cure of the Registration Defaults described in clauses (i) and
(ii) above, and the curing of a Registration Default by the means described in
clause (3) above shall constitute a cure of the Registration Defaults described
in clauses (i), (ii) and (iii) above.
In the event that a Shelf Registration Statement is declared
effective pursuant to Section 3, if the Company fails to keep such Registration
Statement continuously effective for the period required by this Agreement
(except as specifically permitted herein), then from such time as the Shelf
Registration Statement is no longer effective until the earlier of (i) the date
that the Shelf Registration Statement is again deemed effective and (ii) the
date that is the earliest of (x) the second anniversary of the original
issuance of the Securities (or the first anniversary of the date the Shelf
Registration Statement is declared effective by the Commission if the Shelf
Registration Statement is filed at the request of an Initial Purchaser), (y)
the time when the Securities or New Securities, as applicable, covered by the
Shelf Registration Statement can be sold by non-affiliates pursuant to Rule 144
promulgated under the Act without limitation under clauses (c), (e), (f) and
(h) of Rule 144 or (z) when all the Securities or New Securities, as
applicable, covered by the Shelf Registration Statement have been sold pursuant
to the Shelf Registration Statement, Special Interest shall accrue at a rate
per annum equal to 0.25% of the principal amount of the Securities and shall be
payable in cash semiannually in arrears each March 1 and September 1.
5. Registration Procedures. In connection with any Shelf Registration Statement and, to the extent applicable, any Exchange Offer Registration Statement, the following provisions shall apply:
(a) The Company shall furnish to you and each Holder named therein, prior to the filing thereof with the Commission, a copy of any Shelf Registration Statement and any Exchange Offer Registration Statement, and each amendment thereof and each amendment or supplement, if any, to the Prospectus included therein and shall use its best efforts to reflect in each such document, when so filed with the Commission, such comments as you or such Holder reasonably may propose.
(b) The Company shall use its best efforts to ensure that (i) any Registration Statement and any amendment thereto and any Prospectus forming a part thereof and any amendment or supplement thereto complies in all material respects with the Act and the rules and regulations thereunder, (ii) any Registration Statement and any amendment thereto does not, when it becomes effective, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading and (iii) any Prospectus forming part of any Registration Statement, and any amendment or supplement to such Prospectus, does not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements, in the light of the circumstances under which they were made, not misleading.
(c) The Company shall advise you and, in the case of a Shelf Registration Statement, the Holders of securities covered thereby, and, if requested by you or any such Holder, confirm such advice in writing:
(i) when a Registration Statement and any amendment thereto has been filed with the Commission and when the Registration Statement or any post-effective amendment thereto has become effective; and
(ii) of any request by the Commission for amendments or supplements to the Registration Statement or the Prospectus included therein or for additional information.
(d) The Company shall advise you and, in the case of a Shelf Registration Statement, the Holders of securities covered thereby, and, in the case of an Exchange Offer
Registration Statement, any Exchanging Dealer that has provided in writing to the Company a telephone or facsimile number and address for notices, and, if requested by you or any such Holder or Exchanging Dealer, confirm such advice in writing:
(i) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose;
(ii) of the receipt by the Company of any notification with respect to the suspension of the qualification of the securities included therein for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; and
(iii) of the happening of any event that requires the making of any changes in the Registration Statement or the Prospectus so that, as of such date, the statements therein are not misleading and do not omit to state a material fact required to be stated therein or necessary to make the statements therein (in the case of the Prospectus, in light of the circumstances under which they were made) not misleading (which advice shall be accompanied by an instruction to suspend the use of the Prospectus until the requisite changes have been made).
(e) The Company shall use its best efforts to obtain the withdrawal of any order suspending the effectiveness of any Registration Statement at the earliest possible time.
(f) The Company shall furnish to each Holder of securities included within the coverage of any Shelf Registration Statement, without charge, at least one copy of such Shelf Registration Statement and any post-effective amendment thereto, including financial statements and schedules, and, if the Holder so requests in writing, any documents incorporated by reference therein and all exhibits (including those incorporated by reference).
(g) The Company shall, during the Shelf Registration Period, deliver to each Holder of securities included within the coverage of any Shelf Registration Statement, without charge, as many copies of the Prospectus (including each preliminary Prospectus) included in such Shelf Registration Statement and any amendment or supplement thereto as such Holder may reasonably request; and the Company consents to the use of the Prospectus or any amendment or supplement thereto by each of the selling Holders of securities in connection with the offering and sale of the securities covered by the Prospectus or any amendment or supplement thereto.
(h) The Company shall furnish to each Exchanging Dealer that so requests, without charge, at least one copy of the Exchange Offer Registration Statement and any post-effective amendment thereto, including financial statements and schedules, any documents incorporated by reference therein, and, if the Exchanging Dealer so requests in writing, any documents incorporated by reference therein and all exhibits (including those incorporated by reference).
(i) The Company shall, during the Exchange Offer Registration Period, promptly deliver to each Exchanging Dealer, without charge, as many copies of the Prospectus included in such Exchange Offer Registration Statement and any amendment or supplement thereto as such Exchanging Dealer may reasonably request for delivery by such Exchanging Dealer in connection with a sale of New Securities received by it pursuant to the Registered Exchange
Offer; and the Company consents to the use of the Prospectus or any amendment or supplement thereto by any such Exchanging Dealer, as aforesaid.
(j) Prior to the Registered Exchange Offer or any other offering of securities pursuant to any Registration Statement, the Company shall register or qualify or cooperate with the Holders of securities named therein and their respective counsel in connection with the registration or qualification of such securities for offer and sale under the securities or blue sky laws of such jurisdictions as any such Holder reasonably requests in writing and do any and all other acts or things necessary or advisable to enable the offer and sale in such jurisdictions of the securities covered by such Registration Statement; provided, however, that the Company will not be required to qualify generally to do business in any jurisdiction where it is not then so qualified or to take any action that would subject it to general service of process or to taxation in any such jurisdiction where it is not then so subject.
(k) Unless the applicable Securities shall be in book-entry only form, the Company shall cooperate with the Holders of Securities to facilitate the timely preparation and delivery of certificates representing Securities to be sold pursuant to any Registration Statement free of any restrictive legends and in such denominations and registered in such names as Holders may request prior to sales of securities pursuant to such Registration Statement.
(l) Upon the occurrence of any event contemplated by
Section 5(d)(iii) hereof, the Company shall promptly prepare a
post-effective amendment to any Registration Statement or an
amendment or supplement to the related Prospectus or file any
other required document so that, as thereafter delivered to
purchasers of the securities included therein, the Prospectus will
not include an untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading.
(m) Not later than the effective date of any such Registration Statement hereunder, the Company shall provide a CUSIP number for the Securities or New Securities, as the case may be, registered under such Registration Statement, and provide the applicable trustee with certificates for such Securities or New Securities, in a form eligible for deposit with The Depository Trust Company.
(n) The Company shall use its best efforts to comply with all applicable rules and regulations of the Commission and shall make generally available to its security holders as soon as practicable after the effective date of the applicable Registration Statement an earnings statement satisfying the provisions of Section 11(a) of the Act.
(o) The Company shall cause the Indenture to be qualified under the Trust Indenture Act in a timely manner.
(p) The Company may require each Holder of securities to be sold pursuant to any Shelf Registration Statement to furnish to the Company such information regarding the holder and the distribution of such securities as the Company may from time to time reasonably require for inclusion in such Registration Statement and the Company may exclude from such registration the Securities of any Holder that fails to furnish such information within a reasonable time after receiving such request.
(q) The Company shall, if requested, promptly incorporate in a Prospectus supplement or post- effective amendment to a Shelf Registration Statement, such information with respect to the Managing Underwriters and Majority Holders as they shall reasonably agree should be included therein and shall make all required filings of such Prospectus supplement or post-effective amendment as soon as notified of the matters to be incorporated in such Prospectus supplement or post-effective amendment.
(r) In the case of any Shelf Registration Statement, the Company shall enter into such agreements (including underwriting agreements) and take all other appropriate actions to expedite or facilitate the registration or the disposition of the Securities, and in connection therewith, if an underwriting agreement is entered into, cause the same to contain indemnification provisions and procedures no less favorable than those set forth in Section 7 hereof (or such other provisions and procedures acceptable to the Majority Holders and the Managing Underwriters, if any) with respect to all parties to be indemnified pursuant to Section 7 from Holders of Securities to the Company.
(s) In the case of any Shelf Registration Statement,
the Company shall (i) make reasonably available for inspection by
the Holders of securities to be registered thereunder, any
underwriter participating in any disposition pursuant to such
Registration Statement, and any attorney, accountant or other
agent retained by the Holders or any such underwriter, at the
offices where normally kept, during reasonable business hours, all
relevant financial and other records, pertinent corporate
documents and properties of the Company and its subsidiaries; (ii)
cause the Company's officers, directors and employees to supply
all relevant information reasonably requested by the Holders or
any such underwriter, attorney, accountant or agent in connection
with any such Registration Statement as is customary for similar
due diligence examinations; provided, however, that any
information that is designated in writing by the Company, in good
faith, as confidential at the time of delivery of such information
shall be kept confidential by the Holders or any such underwriter,
attorney, accountant or agent, unless such disclosure is made in
connection with a court proceeding or required by law, or such
information becomes available to the public generally or through a
third party without an accompanying obligation of confidentiality;
(iii) make such representations and warranties to the Holders of
securities registered thereunder and the underwriters, if any, in
form, substance and scope as are customarily made by issuers to
underwriters in primary underwritten offerings and covering
matters generally consistent with those set forth in the Purchase
Agreement; (iv) use its best efforts to obtain opinions of counsel
to the Company and updates thereof (which counsel and opinions (in
form, scope and substance) shall be reasonably satisfactory to the
Managing Underwriters, if any) addressed to the underwriters, if
any, covering such matters as are customarily covered in opinions
requested in underwritten offerings and such other matters as may
be reasonably requested by such underwriters; (v) use its best
efforts to obtain "cold comfort" letters and updates thereof from
the independent certified public accountants of the Company (and,
if necessary, any other independent certified public accountants
of any subsidiary of the Company or of any business acquired by
the Company for which financial statements and financial data are,
or are required to be, included in the Registration Statement),
addressed to the underwriters, if any, in customary form and
covering matters of the type customarily covered in "cold comfort"
letters in connection with primary underwritten offerings; and
(vi) deliver such documents and certificates as may be reasonably
requested by the Majority Holders and the Managing Underwriters,
if any, including those to evidence compliance with Section 5(l)
hereof and with any customary conditions contained in the
underwriting agreement or other agreement entered into by the
Company. The foregoing actions set forth in clauses (iii),
(iv), (v) and (vi) of this Section 5(s) shall be performed at (A) the effectiveness of such Registration Statement and each post-effective amendment thereto and (B) each closing under any underwriting or similar agreement as and to the extent required thereunder.
(t) In the case of any Exchange Offer Registration
Statement, the Company shall (i) make reasonably available for
inspection by such Initial Purchaser, and any attorney, accountant
or other agent retained by such Initial Purchaser, at the offices
where normally kept, during reasonable business hours, all
relevant financial and other records, pertinent corporate
documents and properties of the Company and its subsidiaries; (ii)
cause the Company's officers, directors and employees to supply
all relevant information reasonably requested by such Initial
Purchaser or any such attorney, accountant or agent in connection
with any such Registration Statement as is customary for similar
due diligence examinations; provided, however, that any
information that is designated in writing by the Company, in good
faith, as confidential at the time of delivery of such information
shall be kept confidential by such Initial Purchaser or any such
attorney, accountant or agent, unless such disclosure is made in
connection with a court proceeding or required by law, or such
information becomes available to the public generally or through a
third party without an accompanying obligation of confidentiality;
(iii) make such representations and warranties to such Initial
Purchaser, in form, substance and scope as are customarily made by
issuers to underwriters in primary underwritten offerings and
covering matters generally consistent with those set forth in the
Purchase Agreement; (iv) use its best efforts to obtain opinions
of counsel to the Company and updates thereof (which counsel and
opinions (in form, scope and substance) shall be reasonably
satisfactory to such Initial Purchaser and its counsel, addressed
to such Initial Purchaser, covering such matters as are
customarily covered in opinions requested in underwritten
offerings and such other matters as may be reasonably requested by
such Initial Purchaser or its counsel; (v) use its best efforts to
obtain "cold comfort" letters and updates thereof from the
independent certified public accountants of the Company (and, if
necessary, any other independent certified public accountants of
any subsidiary of the Company or of any business acquired by the
Company for which financial statements and financial data are, or
are required to be, included in the Registration Statement),
addressed to such Initial Purchaser, in customary form and
covering matters of the type customarily covered in "cold comfort"
letters in connection with primary underwritten offerings, or if
requested by such Initial Purchaser or its counsel in lieu of a
"cold comfort" letter, an agreed-upon procedures letter under
Statement on Auditing Standards No. 35, covering matters requested
by such Initial Purchaser or its counsel; and (vi) deliver such
documents and certificates as may be reasonably requested by such
Initial Purchaser or its counsel, including those to evidence
compliance with Section 5(l) hereof and with conditions
customarily contained in underwriting agreements. The foregoing
actions set forth in clauses (iii), (iv), (v), and (vi) of this
Section 5(t) shall be performed at the close of the Registered
Exchange Offer and the effective date of any post-effective
amendment to the Exchange Offer Registration Statement.
6. Registration Expenses. The Company shall bear all expenses incurred in connection with the performance of its obligations under Sections 2, 3, 4 and 5 hereof and, in the event of any Shelf Registration Statement, will reimburse the Holders for the reasonable fees and disbursements of one firm or counsel, reasonably satisfactory to the Company, designated by the Majority Holders to act as counsel for the Holders in connection therewith, and, in the case of any Exchange Offer Registration Statement, will reimburse the Initial Purchasers for the reasonable fees and disbursements of one counsel, reasonably satisfactory to the Company, acting in connection therewith.
7. Indemnification and Contribution.
(a) In connection with any Registration Statement, the
Company agrees to indemnify and hold harmless each Holder of
securities covered thereby (including each Initial Purchaser and,
with respect to any Prospectus delivery as contemplated in Section
5(i) hereof, each Exchanging Dealer), the directors, officers,
employees and agents of each such Holder and each person who
controls any such Holder within the meaning of either the Act or
the Exchange Act against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may
become subject under the Act, the Exchange Act or other Federal or
state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained
in the Registration Statement as originally filed or in any
amendment thereof, or in any preliminary Prospectus or Prospectus,
or in any amendment thereof or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, and agrees to
reimburse each such indemnified party, as incurred, for any legal
or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability
or action; provided, however, that the Company will not be liable
in any case to the extent that any such loss, claim, damage or
liability arises out of or is based upon any such untrue statement
or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any such
Holder specifically for inclusion therein; provided further, that
with respect to any untrue statement or omission of material fact
made in the Registration Statement, any amendment thereto or the
preliminary Prospectus, the indemnity agreement contained in this
Section 7(a) shall not inure to the benefit of any Holder from
whom the person asserting any such loss, claim, damage or
liability purchased the securities concerned, to the extent that
any such loss, claim, damage or liability of such Holder occurs
under the circumstance where it shall have been determined by a
court of competent jurisdiction by final and nonappealable
judgment that (w) the Company had previously furnished copies of
the preliminary Prospectus to the Holder, (x) delivery of the
Prospectus was required to be made to such person, (y) the untrue
statement or omission of a material fact contained in the
preliminary Prospectus was corrected in the Prospectus and (z)
there was not sent or given to such person, at or prior to the
written confirmation of the sale of such securities to such
person, a copy of the Prospectus. This indemnity agreement will
be in addition to any liability that the Company may otherwise
have.
The Company also agrees to indemnify or contribute to Losses of, as provided in Section 7(d) hereof, any underwriters of Securities registered under a Shelf Registration Statement, their officers and directors and each person who controls such underwriters on substantially the same basis as that of the indemnification of the Initial Purchaser and the selling Holders provided in this Section 7(a) and shall, if requested by any Holder, enter into an underwriting agreement reflecting such agreement, as provided in Section 5(r) hereof.
(b) Each Holder of securities covered by a
Registration Statement (including each Initial Purchaser and, with
respect to any Prospectus delivery as contemplated in Section 5(i)
hereof, each Exchanging Dealer) severally agrees to indemnify and
hold harmless (i) the Company, (ii) each of its directors, (iii)
each of its officers who signs such Registration Statement and
(iv) each person who controls the Company within the meaning of
either the Act or the Exchange Act to the same extent as the
foregoing indemnity from the Company to each
such Holder, but only with reference to written information relating to such Holder furnished to the Company by or on behalf of such Holder specifically for inclusion in the documents referred to in the foregoing indemnity. This indemnity agreement will be in addition to any liability that any such Holder may otherwise have.
(c) Promptly after receipt by an indemnified party
under this Section 7 of notice of the commencement of any action,
such indemnified party will, if a claim in respect thereof is to
be made against the indemnifying party under this Section 7,
notify the indemnifying party in writing of the commencement
thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under Section 7(a) or 7(b)
hereof unless and to the extent it did not otherwise learn of such
action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii)
will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the
indemnification obligation provided in Section 7(a) or 7(b)
hereof. The indemnifying party shall be entitled to appoint
counsel of the indemnifying party's choice at the indemnifying
party's expense to represent the indemnified party in any action
for which indemnification is sought (in which case the
indemnifying party shall not thereafter be responsible for the
fees and expenses of any separate counsel retained by the
indemnified party or parties except as set forth below); provided,
however, that such counsel shall be reasonably satisfactory to the
indemnified party. Notwithstanding the indemnifying party's
election to appoint counsel to represent the indemnified party in
an action, the indemnified party shall have the right to employ
separate counsel (including local counsel), and the indemnifying
party shall bear the reasonable fees, costs and expenses of such
separate counsel (and local counsel) if (i) the use of counsel
chosen by the indemnifying party to represent the indemnified
party would present such counsel with a conflict of interest, (ii)
the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying
party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other
indemnified parties that are different from or additional to those
available to the indemnifying party, (iii) the indemnifying party
shall not have employed counsel reasonably satisfactory to the
indemnified party to represent the indemnified party within a
reasonable time after notice of the institution of such action or
(iv) the indemnifying party shall authorize the indemnified party
to employ separate counsel at the expense of the indemnifying
party, it being understood that the indemnifying party shall not
be liable for more than one separate firm (in addition to one
local counsel in each jurisdiction) for all indemnified parties in
each jurisdiction in which any claim or action arising out of the
same general allegations or circumstances is brought. An
indemnifying party will not, without the prior written consent of
the indemnified parties, settle or compromise or consent to the
entry of any judgment with respect to any pending or threatened
claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether
or not the indemnified parties are actual or potential parties to
such claim or action) unless such settlement, compromise or
consent includes an unconditional release of each indemnified
party from all liability arising out of such claim, action, suit
or proceeding. An indemnifying party will not, without its prior
written consent, be liable for any settlement or compromise or
consent to the entry of any judgment.
(d) In the event that the indemnity provided in
Section 7(a) or 7(b) hereof is unavailable to or insufficient to
hold harmless an indemnified party for any reason (other than as
set forth therein), then each applicable indemnifying party, in
lieu of indemnifying such indemnified party, shall have a joint
and several obligation to contribute to the aggregate losses,
claims, damages and liabilities (including legal or other expenses
reasonably incurred
in connection with investigating or defending same) (collectively
"Losses") to which such indemnified party may be subject in such
proportion as is appropriate to reflect the relative benefits
received by such indemnifying party, on the one hand, and such
indemnified party, on the other hand, from the Initial Placement
and the Registration Statement that resulted in such Losses;
provided, however, that in no case shall any Initial Purchaser or
any subsequent Holder of any Security or New Security be
responsible, in the aggregate, for any amount in excess of the
purchase discount or commission applicable to such Security, or in
the case of a New Security, applicable to the Security that was
exchangeable into such New Security, as set forth on the cover
page of the Final Memorandum (except as may be provided in any
agreement among the Initial Purchasers relating to the offering of
the Securities), nor shall any underwriter be responsible for any
amount in excess of the underwriting discount or commission
applicable to the securities purchased by such underwriter under
the Registration Statement that resulted in such Losses. If the
allocation provided by the immediately preceding sentence is
unavailable for any reason, the indemnifying party and the
indemnified party shall contribute in such proportion as is
appropriate to reflect not only such relative benefits but also
the relative fault of such indemnifying party, on the one hand,
and such indemnified party, on the other hand, in connection with
the statements or omissions that resulted in such Losses as well
as any other relevant equitable considerations. Benefits received
by the Company shall be deemed to be equal to the sum of (x) the
total net proceeds from the Initial Placement (before deducting
expenses) as set forth on the cover page of the Final Memorandum
and (y) the total amount of additional interest that the Company
was not required to pay as a result of registering the securities
covered by the Registration Statement that resulted in such
Losses. Benefits received by the Initial Purchasers shall be
deemed to be equal to the total purchase discounts and commissions
as set forth on the cover page of the Final Memorandum, and
benefits received by any other Holders shall be deemed to be equal
to the value of receiving Securities or New Securities, as
applicable, registered under the Act. Benefits received by any
underwriter shall be deemed to be equal to the total underwriting
discounts and commissions, as set forth on the cover page of the
Prospectus forming a part of the Registration Statement that
resulted in such Losses. Relative fault shall be determined by
reference to whether any alleged untrue statement or omission
relates to information provided by the indemnifying party, on the
one hand, or by the indemnified party, on the other hand. The
parties agree that it would not be just and equitable if
contribution were determined by pro rata allocation or any other
method of allocation that does not take account of the equitable
considerations referred to above. Notwithstanding the provisions
of this Section 7(d), no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this
Section 7, each person who controls a Holder within the meaning of
either the Act or the Exchange Act and each director, officer,
employee and agent of such Holder shall have the same rights to
contribution as such Holder, and each person who controls the
Company within the meaning of either the Act or the Exchange Act,
each officer of the Company who shall have signed the Registration
Statement and each director of the Company shall have the same
rights to contribution as the Company, subject in each case to the
applicable terms and conditions of this Section 7(d).
(e) The provisions of this Section 7 will remain in full force and effect, regardless of any investigation made by or on behalf of any Holder or the Company or any of the officers, directors or controlling persons referred to in this Section 7, and will survive the sale by a Holder of securities covered by a Registration Statement.
8. Miscellaneous.
(a) No Inconsistent Agreements. The Company has not, as of the date hereof, entered into, nor shall it, on or after the date hereof, enter into, any agreement with respect to its securities that is inconsistent with the rights granted to the Holders herein or otherwise conflicts with the provisions hereof.
(b) Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, qualified, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the Company has obtained the written consent of the Holders of at least a majority of the then outstanding aggregate principal amount of Securities (or, after the consummation of any Exchange Offer in accordance with Section 2 hereof, of New Securities); provided that, with respect to any matter that directly or indirectly affects the rights of any Initial Purchaser hereunder, the Company shall obtain the written consent of each such Initial Purchaser against which such amendment, qualification, supplement, waiver or consent is to be effective. Notwithstanding the foregoing (except the foregoing proviso), a waiver or consent to departure from the provisions hereof with respect to a matter that relates exclusively to the rights of Holders whose securities are being sold pursuant to a Registration Statement and that does not directly or indirectly affect the rights of other Holders may be given by the Majority Holders, determined on the basis of securities being sold rather than registered under such Registration Statement.
(c) Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand-delivery, first-class mail, telex, facsimile, or air courier guaranteeing overnight delivery:
(1) if to a Holder, at the most current address given by such holder to the Company in accordance with the provisions of this Section 8(c), which address initially is, with respect to each Holder, the address of such Holder maintained by the Registrar under the Indenture, with a copy in like manner to Salomon Brothers Inc;
(2) if to you, initially at the respective addresses set forth in the Purchase Agreement; and
(3) if to the Company, initially at its address set forth in the Purchase Agreement.
All such notices and communications shall be deemed to have been duly given when received.
The Initial Purchasers or the Company by notice to the other may designate additional or different addresses for subsequent notices or communications.
(d) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties, including, without the need for an express assignment or any consent by the Company thereto, subsequent Holders of Securities and/or New Securities. The Company hereby agrees to extend the benefits of this Agreement to any Holder of Securities and/or New Securities and any such Holder may specifically enforce the provisions of this Agreement as if an original party hereto.
(e) Counterparts. This agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.
(f) Headings. The headings in this agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.
(g) Governing Law. This agreement shall be governed by and construed in accordance with the internal laws of the State of New York (without regard to the conflict of law provisions thereof).
(h) Severability. In the event that any one of more of the provisions contained herein, or the application thereof in any circumstances, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions hereof shall not be in any way impaired or affected thereby, it being intended that all of the rights and privileges of the parties shall be enforceable to the fullest extent permitted by law.
(i) Securities Held by the Company, etc. Whenever the consent or approval of Holders of a specified percentage of principal amount of Securities or New Securities is required hereunder, Securities or New Securities, as applicable, held by the Company or its Affiliates (other than subsequent Holders of Securities or New Securities if such subsequent Holders are deemed to be Affiliates solely by reason of their holdings of such Securities or New Securities) shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage.
Please confirm that the foregoing correctly sets forth the agreement between the Company and you.
Very truly yours,
GLOBAL MARINE INC.
By: /s/ J.L. MCCULLOCH
-------------------------------
Name: J.L. McCulloch
Title: Vice President
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The foregoing Agreement is
hereby accepted as of the
date first above written.
SALOMON BROTHERS INC
BT ALEX. BROWN INCORPORATED
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
MORGAN STANLEY & CO. INCORPORATED
By: SALOMON BROTHERS INC
By: /s/ DANIEL J. WARD
-----------------------------------
Name: Daniel J. Ward
Title: Associate
|
ANNEX A
Each broker-dealer that receives New Securities for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such New Securities. The Letter of Transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. This Prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of New Securities received in exchange for Securities where such New Securities were acquired by such broker-dealer as a result of market-making activities or other trading activities. The Company has agreed that, starting on the Expiration Date (as defined herein) and ending on the close of business on the 180th day following the Expiration Date, it will make this Prospectus available to any broker-dealer for use in connection with any such resale. See "Plan of Distribution."
ANNEX B
Each broker-dealer that receives New Securities for its own account in exchange for Securities, where such Securities were acquired by such broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such New Securities. See "Plan of Distribution."
ANNEX C
PLAN OF DISTRIBUTION
Each broker-dealer that receives New Securities for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such New Securities. The Prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of New Securities received in exchange for Securities where such Securities were acquired as a result of market-making activities or other trading activities. The Company has agreed that, starting on the Expiration Date and ending on the close of business on the 180th day following the Expiration Date, it will make this Prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any such resale.
The Company will not receive any proceeds from any sale of New Securities by broker-dealers. New Securities received by broker-dealers for their own account pursuant to the Exchange Offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the New Securities or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker-dealer and/or the purchasers of any such New Securities. Any broker-dealer that resells New Securities that were received by it for its own account pursuant to the Exchange Offer and any broker or dealer that participates in a distribution of such New Securities may be deemed to be an "underwriter" within the meaning of the Securities Act and any profit of any such resale of New Securities and any commissions or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. The Letter of Transmittal states that by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act.
For a period of [ ] days after the Expiration Date, the Company will promptly send additional copies of this Prospectus and any amendment or supplement to this Prospectus to any broker-dealer that requests such documents in the Letter of Transmittal. The Company has agreed to pay all expenses incident to the Exchange Offer (including the expenses of one counsel for the holders of the Securities) other than commissions or concessions of any brokers or dealers and will indemnify the holders of the Securities (including any broker-dealers) against certain liabilities, including liabilities under the Securities Act.
[If applicable, add information required by Regulation S-K Items 507 and/or 508.]
ANNEX D
Rider A
[ ] CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE
10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY
AMENDMENTS OR SUPPLEMENTS THERETO.
Rider B
The undersigned represents that it is not an affiliate of the Company, that any New Securities to be received by it will be acquired in the ordinary course of business and that at the time of the commencement of the Registered Exchange Offer it had no arrangement with any person to participate in a distribution of the New Securities.
If the undersigned is not a broker-dealer, the undersigned represents that it is not engaged in, and does not intend to engage in, a distribution of New Securities. If the undersigned is a broker-dealer that will receive New Securities for its own account in exchange for Securities that were acquired as a result of market-making activities or other trading activities, it acknowledges that it will deliver a prospectus in connection with any resale of such New Securities; however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act.
EXHIBIT 4.4
[FACE OF SECURITY]
GLOBAL MARINE INC.
7 1/8% NOTE DUE 2007
CUSIP
No. $
Global Marine Inc., a Delaware corporation (the "Company," which term includes any successor Person under the Indenture hereinafter referred to), for value received promises to pay to _____________ or registered assigns, the principal sum of ______________________ Dollars [or such lesser amount as indicated on the schedule of exchanges of definitive Securities,](1) on September 1, 2007.
Interest Payment Dates: March 1 and September 1
Record Dates: February 15 and August 15
Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.
IN WITNESS WHEREOF, the Company has caused this Security to be signed manually or by facsimile by its duly authorized officers and its corporate seal or a facsimile thereof to be affixed hereto or imprinted hereon.
Dated: September 15, 1997
[SEAL] GLOBAL MARINE INC.
By:
--------------------------------------
Name:
Title:
By:
--------------------------------------
Name:
|
Title:
(1) This phrase to be included only if the Security is a Global Security.
Certificate of Authentication:
This is one of the Securities of the series designated therein referred to in the within- mentioned Indenture.
WILMINGTON TRUST COMPANY, not in
its individual capacity but solely as Trustee
[Unless and until it is exchanged in whole or in part for Securities in definitive form, this Security may not be transferred except as a whole by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary. The Depository Trust Company (55 Water Street, New York, New York) ("DTC"), shall act as the Depositary until a successor shall be appointed by the Company and the Registrar. Unless this certificate is presented by an authorized representative of DTC to the issuer or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or such other name as may be requested by an authorized representative of DTC (and any payment is made to Cede & Co. or such other entity as may be requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein.] (2)
(2) This paragraph should be included only if the Security is a Global Security.
[REVERSE OF SECURITY]
GLOBAL MARINE INC.
7 1/8% NOTE DUE 2007
This Security is one of a duly authorized issue of 7 1/8% Notes Due 2007 (the "Securities") of Global Marine Inc., a Delaware corporation (the "Company").
1. Interest. The Company promises to pay interest on the principal amount of this Security at 7 1/8% per annum from September 15, 1997 until maturity. The Company will pay interest semiannually on March 1 and September 1 of each year (each an "Interest Payment Date"), or if any such day is not a Business Day, on the next succeeding Business Day. Interest on the Securities will accrue from the most recent Interest Payment Date on which interest has been paid or, if no interest has been paid, from September 15, 1997; provided that if there is no existing Default in the payment of interest, and if this Security is authenticated between a record date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such next succeeding Interest Payment Date; provided, further, that the first Interest Payment Date shall be March 1, 1998. The Company shall pay interest on overdue principal from time to time on demand at a rate equal to the interest rate then in effect; it shall pay interest on overdue installments of interest (without regard to any applicable grace periods) from time to time on demand at the same rate to the extent lawful. Interest will be computed on the basis of a 360-day year of twelve 30-day months.
2. Method of Payment. The Company will pay interest on the Securities (except defaulted interest) to the Persons who are registered Holders of Securities at the close of business on the record date next preceding the Interest Payment Date, even if such Securities are canceled after such record date and on or before such Interest Payment Date. The Holder must surrender this Security to a Paying Agent to collect principal payments. The Company will pay the principal of and interest on the Securities in money of the United States of America that at the time of payment is legal tender for payment of public and private debts. The Company, however, may pay such amounts by check payable in such money. Payments in respect of the Securities evidenced by a Global Security (including principal, premium, if any, and interest) shall be made by wire transfer of immediately available funds to the accounts specified by the Holder of the Global Security. In all other cases, payment of interest may be made at the option of the Company by check to a Holder's registered address.
3. Paying Agent and Registrar. Initially, Wilmington Trust Company (the "Trustee"), the Trustee under the Indenture, will act as Paying Agent and Registrar. The Company may change any Paying Agent, Registrar, co-registrar or additional paying agent without notice to any Holder. The Company may act in any such capacity.
4. Indenture. The Company issued the Securities under an Indenture dated as of September 1, 1997 (the "Indenture") between the Company and the Trustee. The terms of the Securities include those stated in the Indenture and those made part of the Indenture by reference to
the Trust Indenture Act of 1939, as amended (15 U.S. Code Sections 77aaa-77bbbb) (the "TIA"), as in effect on the date of execution of the Indenture. The Securities are subject to all such terms, and Holders are referred to the Indenture and such Act for a statement of such terms. The Securities are unsecured general obligations of the Company limited to $300,000,000 in aggregate principal amount. The Indenture provides for the issuance of other series of debt securities (including the Securities, the "Debt Securities") thereunder.
5. Denominations, Transfer, Exchange. The Securities are in registered form without coupons in denominations of $1,000 and integral multiples of $1,000. The transfer of Securities may be registered and Securities may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and to pay any taxes and fees required by law or permitted by the Indenture. The Registrar need not exchange or register the transfer of any Securities during the period between a record date and the corresponding Interest Payment Date or of any Security selected for redemption, except the unredeemed portion of any Security being redeemed in part.
6. Persons Deemed Owners. The registered Holder of a Security shall be treated as its owner for all purposes.
7. Redemption. The Securities will be redeemable, at the option of the Company, at any time in whole or from time to time in part, upon not less than 30 and not more than 60 days' notice as provided in the Indenture, on any date prior to maturity (the "Redemption Date") at a price (the "Redemption Price") equal to 100% of the principal amount thereof plus accrued and unpaid interest, if any, to the Redemption Date (subject to the right of holders of record on the relevant record date to receive interest due on an Interest Payment Date that is on or prior to the Redemption Date) plus the Make-Whole Premium, if any. In no event will the Redemption Price ever be less than 100% of the principal amount of the Securities plus accrued interest to the Redemption Date.
The amount of the Make-Whole Premium with respect to any Security (or portion thereof) to be redeemed will be equal to the excess, if any, of:
(i) the sum of the present values, calculated as of the Redemption Date, of:
(A) each interest payment that, but for such redemption, would have been payable on the Security (or portion thereof) being redeemed on each Interest Payment Date occurring after the Redemption Date (excluding any accrued interest for the period prior to the Redemption Date); and
(B) the principal amount that, but for such redemption, would have been payable at the final maturity of the Securities (or portion thereof) being redeemed;
over
(ii) the principal amount of the Security (or portion thereof) being redeemed.
The present values of interest and principal payments referred to in clause (i) above will be determined in accordance with generally accepted principles of financial analysis. Such present values will be calculated by discounting the amount of each payment of interest or principal from the date that each such payment would have been payable, but for the redemption, to the Redemption Date at a discount rate equal to the Treasury Yield plus 20 basis points.
The Make-Whole Premium shall be calculated by an independent investment banking institution of national standing appointed by the Company; provided, that if the Company fails to make such appointment at least 45 business days prior to the Redemption Date, or if the institution so appointed is unwilling or unable to make such calculation, such calculation shall be made by Salomon Brothers Inc or, if such firm is unwilling or unable to make such calculation, by an independent investment banking institution of national standing appointed by the Trustee (in any such case, an "Independent Investment Banker").
For purposes of determining the Make-Whole Premium, "Treasury Yield" means a rate of interest per annum equal to the weekly average yield to maturity of United States Treasury Notes that have a constant maturity that corresponds to the remaining term to maturity of the Securities, calculated to the nearest 1/12th of a year (the "Remaining Term"). The Treasury Yield shall be determined as of the third Business Day (as defined in the Indenture) immediately preceding the applicable Redemption Date. The weekly average yields of United States Treasury Notes shall be determined by reference to the most recent statistical release published by the Federal Reserve Bank of New York and designated "H.15 (519) Selected Interest Rates" or any successor release (the "H.15 Statistical Release"). If the H.15 Statistical Release sets forth a weekly average yield for United States Treasury Notes having a constant maturity that is the same as the Remaining Term, then the Treasury Yield shall be equal to such weekly average yield. In all other cases, the Treasury Yield shall be calculated by interpolation, on a straight-line basis, between the weekly average yields on the United States Treasury Notes that have a constant maturity closest to and greater than the Remaining Term and the United States Treasury Notes that have a constant maturity closest to and less than the Remaining Term (in each case as set forth in the H.15 Statistical Release). Any weekly average yields as calculated by interpolation shall be rounded to the nearest 1/100th of 1%, with any figure of 1/200% or above being rounded upward. If weekly average yields for United States Treasury Notes are not available in the H.15 Statistical Release or otherwise, then the Treasury Yield shall be calculated by interpolation of comparable rates selected by the Independent Investment Banker.
8. Amendments and Waivers. Subject to certain exceptions and limitations, the Indenture or the Securities may be amended or supplemented with the consent of the Holders of at least a majority in principal amount of the then outstanding Debt Securities of all series of Debt Securities affected by such amendment or supplement (acting as one class), and any existing or past Default or Event of Default under, or compliance with any provision of, the Indenture may be waived (other than any continuing Default or Event of Default in the payment of the principal of or interest on the Securities) by the Holders of at least a majority in principal amount of the then outstanding Debt Securities of any series or of all series (acting as one class) in accordance with the terms of the Indenture. Without the consent of any Holder, the Company and the Trustee may amend or supplement the Indenture or the Securities or waive any provision of either, to cure any
ambiguity, omission, defect or inconsistency; to comply with the provisions of the Indenture relating to merger, consolidation and certain other transactions; to provide for uncertificated Securities in addition to or in place of certificated Securities; to provide any security for the Securities or to add guarantees of the Securities; to comply with any requirement in order to effect or maintain the qualification of the Indenture under the TIA; to add to the covenants of the Company for the benefit of the Holders of the Securities, or to surrender any right or power conferred by the Indenture upon the Company; to add any additional Events of Default with respect to all or any series of the Debt Securities; to change or eliminate any of the provisions of the Indenture, provided that no Security is adversely affected in any material respect; to supplement any of the provisions of the Indenture to such extent as shall be necessary to permit or facilitate the defeasance and discharge of the Securities pursuant to the Indenture; or to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Securities and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts thereunder by more than one Trustee, pursuant to the requirements of the Indenture.
The right of any Holder to participate in any consent required or sought pursuant to any provision of the Indenture (and the obligation of the Company to obtain any such consent otherwise required from such Holder) may be subject to the requirement that such Holder shall have been the Holder of record of any Securities with respect to which such consent is required or sought as of a date fixed in accordance with the terms of the Indenture.
Without the consent of each Holder affected, the Company may
not (i) reduce the amount of Debt Securities whose Holders must consent to an
amendment, supplement or waiver, (ii) reduce the rate of or change the time for
payment of interest, including default interest, on any Security, (iii) reduce
the principal of or premium on, or change the Stated Maturity of, any Security,
(iv) reduce the premium, if any, payable upon the redemption of any Security or
change the time at which any Security may or shall be redeemed, (v) change the
coin or currency in which any Security or any premium or interest with respect
thereto are payable, (vi) impair the right to institute suit for the
enforcement of any payment of principal of or premium (if any) or interest on
any Security, (vii) make any change in the percentage of principal amount of
Debt Securities necessary to waive compliance with certain provisions of the
Indenture or (viii) waive a continuing Default or Event of Default in the
payment of principal of or premium (if any) or interest on the Securities.
A supplemental indenture that changes or eliminates any covenant or other provision of the Indenture which has expressly been included solely for the benefit of one or more particular series of Debt Securities under the Indenture, or which modifies the rights of the Holders of Debt Securities of such series with respect to such covenant or other provision, shall be deemed not to affect the rights under the Indenture of the Holders of Debt Securities of any other series.
9. Defaults and Remedies. Events of Default are defined in the Indenture and generally include: (i) default by the Company for 30 days in payment of any interest on the Securities; (ii) default by the Company in any payment of principal of (or premium, if any, on) the Securities; (iii) default by the Company in compliance with any of its other covenants or agreements in, or provisions of, the Securities or in the Indenture which shall not have been remedied within 90 days after written notice by the Trustee or by the holders of at least 25% in principal amount of the
Securities then outstanding (or, in the event that other Debt Securities issued
under the Indenture are also affected by the default, then 25% in principal
amount of all outstanding Debt Securities so affected); or (iv) certain events
involving bankruptcy, insolvency or reorganization of the Company. If an Event
of Default occurs and is continuing, the Trustee or the Holders of at least 25%
in principal amount of the then outstanding Securities of the series affected
by such default (or, in the case of an Event of Default described in clause
(iii) above, if outstanding Debt Securities of other series are affected by
such Default, then at least 25% in principal amount of the then outstanding
Debt Securities so affected), may declare the principal of and interest on all
the Securities to be immediately due and payable, except that in the case of an
Event of Default arising from certain events of bankruptcy, insolvency or
reorganization of the Company, all outstanding Securities become due and
payable immediately without further action or notice. The amount due and
payable upon the acceleration of any Security is equal to 100% of the principal
amount thereof plus accrued interest to the date of payment. Holders may not
enforce the Indenture or the Securities except as provided in the Indenture.
The Trustee may require indemnity reasonably satisfactory to it before it
enforces the Indenture or the Securities. Subject to certain limitations,
Holders of a majority in principal amount of the then outstanding Securities
(or affected Debt Securities) may direct the Trustee in its exercise of any
trust or power. The Trustee may withhold from Holders notice of any continuing
default (except a default in payment of principal or interest) if it determines
that withholding notice is in their interests. The Company must furnish an
annual compliance certificate to the Trustee.
10. Discharge Prior to Maturity. The Indenture with respect to the Securities shall be discharged and canceled upon the payment of all of the Securities and shall be discharged except for certain obligations upon the irrevocable deposit with the Trustee of funds or U.S. Government Obligations sufficient for such payment.
11. Trustee Dealings with Company. The Trustee, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Company or its Affiliates, and may otherwise deal with the Company or its Affiliates, as if it were not Trustee.
12. No Recourse Against Others. A director, officer, employee or stockholder, as such, of the Company shall not have any liability for any obligations of the Company under the Securities or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. Each Holder by accepting a Security waives and releases all such liability. The waiver and release are part of the consideration for the issuance of the Securities.
13. Authentication. This Security shall not be valid until authenticated by the manual signature of the Trustee or an authenticating agent.
14. CUSIP Numbers. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP numbers to be printed on the Securities as a convenience to the Holders of the Securities. No representation is made as to the accuracy of such numbers as printed on the Securities and reliance may be placed only on the other identification numbers printed thereon.
15. Abbreviations. Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
16. Restrictions on Transfer; Additional Rights of Holders of Transfer Restricted Securities. By its acceptance of any Security bearing a legend restricting transfer, each Holder of such a Security acknowledges the restrictions on transfer of such Security set forth in the officers' certificate executed pursuant to Section 2.04 of the Indenture in respect of the Securities and such legend and agrees that it will transfer such Security only as provided in such officers' certificate and in the Indenture. In addition to the rights provided by Holders of Securities under the Indenture, Holders shall have all the rights set forth in the Registration Rights Agreement, dated as of the Issue Date, among the Company and the Initial Purchasers.
THE COMPANY WILL FURNISH TO ANY HOLDER UPON WRITTEN REQUEST
AND WITHOUT CHARGE A COPY OF THE INDENTURE. REQUEST MAY BE MADE TO:
GLOBAL MARINE INC.
777 N. ELDRIDGE PARKWAY
HOUSTON, TEXAS 77079-4493
TELEPHONE: (281) 596-5100
ATTENTION: GENERAL COUNSEL
SCHEDULE OF EXCHANGES OF DEFINITIVE SECURITY
The following exchanges of a part of this Global Security for Definitive Securities have been made:
Principal Amount
Amount of Amount of of this Global Signature of
decrease in increase in Security following authorized officer
Principal Amount Principal Amount such decrease of Trustee or
Date of Exchange of this Global Security of this Global Security (or increase) Security Custodian
---------------- ----------------------- ----------------------- ---------------------- ------------------
|
ASSIGNMENT FORM
(Insert assignee's social security or tax I.D. number)
Date: Your Signature:
-------------- -------------------------------
(Sign exactly as your name
appears on the face of this
Security)
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EXHIBIT 4.5
GLOBAL MARINE INC.
7 1/8% Notes Due 2007
A series of Securities is hereby established pursuant to Section 2.01 of the Indenture dated as of September 1, 1997 between Global Marine Inc. (the "Company") and Wilmington Trust Company (the "Trustee"), as follows:
1. The title of the Securities of the series shall be "7 1/8% Notes Due 2007" (the "Notes").
2. The limit upon the aggregate principal amount of the Notes that may be authenticated and delivered under the Indenture (except for Notes authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of other Notes pursuant to Sections 2.08, 2.09, 2.12, 3.07 or 9.05 of the Indenture) is $300,000,000.
3. The Notes shall be issued as permanent Global Securities (as defined in the Indenture) under the Indenture. The Depository Trust Company is hereby designated as the Depositary for the Global Securities under the Indenture.
4. The date on which the principal of the Notes is payable shall be September 1, 2007.
5. The rate at which each of the Notes shall bear interest shall be 7 1/8% per annum. Interest will be computed on the basis of a 360-day year of twelve 30-day months. The date from which interest shall accrue for each of the Notes shall be September 15, 1997. The Interest Payment Dates (as defined in the Indenture) on which interest on the Notes shall be payable are March 1 and September 1, commencing March 1, 1998. Interest on the Notes shall be payable to the persons in whose name the Notes are registered at the close of business on the Record Date (as defined below) for such interest payment. The record dates (each a "Record Date") for the interest payable on the Notes on any Interest Payment Date shall be the February 15 and August 15, as the case may be, immediately preceding such interest payment date.
6. The place or places where the principal of, premium (if any) on and interest on the Notes shall be payable is at the office or agency of the Trustee in New York, New York. Payments in respect of the Notes evidenced by a Global Security (including principal, premium, if any, and interest) shall be made by wire transfer of immediately available funds to the accounts specified by the Holder (as defined in the Indenture) of the Global Note. In all other cases, payment of interest may be made at the option of the Company by check mailed to the address of the person entitled thereto as such address shall appear in the register of the Notes maintained by the Registrar (as defined in the Indenture).
7. The Notes will be redeemable, at the option of the Company, at any time, in whole or from time to time in part, upon not less than 30 and not more than 60 days' notice as provided in the Indenture, on any date prior to maturity (the "Redemption Date") at a price (the "Redemption Price") equal to 100% of the principal amount thereof plus accrued and unpaid interest, if any, to the Redemption Date (subject to the right of holders of record on the relevant record date to receive interest due on an Interest Payment Date that is on or prior to the Redemption Date) plus the Make-Whole Premium, if any. In no event will the Redemption Price ever be less than 100% of the principal amount of the Notes plus accrued interest to the Redemption Date.
The amount of the Make-Whole Premium with respect to any Note (or portion thereof) to be redeemed will be equal to the excess, if any, of:
(i) the sum of the present values, calculated as of the Redemption Date, of:
(A) each interest payment that, but for such redemption, would have been payable on the Note (or portion thereof) being redeemed on each Interest Payment Date occurring after the Redemption Date (excluding any accrued interest for the period prior to the Redemption Date); and
(B) the principal amount that, but for such redemption, would have been payable at the final maturity of the Notes (or portion thereof) being redeemed;
over
(ii) the principal amount of the Note (or portion thereof) being redeemed.
The present values of interest and principal payments referred to in clause (i) above will be determined in accordance with generally accepted principles of financial analysis. Such present values will be calculated by discounting the amount of each payment of interest or principal from the date that each such payment would have been payable, but for the redemption, to the Redemption Date at a discount rate equal to the Treasury Yield (as defined below) plus 20 basis points.
The Make-Whole Premium shall be calculated by an independent investment banking institution of national standing appointed by the Company; provided, that if the Company fails to make such appointment at least 45 business days prior to the Redemption Date, or if the institution so appointed is unwilling or unable to make such calculation, such calculation shall be made by Salomon Brothers Inc or, if such firm is unwilling or unable to make such calculation, by an independent investment banking institution of national standing appointed by the Trustee (in any such case, an "Independent Investment Banker").
For purposes of determining the Make-Whole Premium, "Treasury Yield" means a rate of interest per annum equal to the weekly average yield to maturity of United States Treasury Notes that have a constant maturity that corresponds to the remaining term to maturity of the Notes, calculated to the nearest 1/12th of a year (the "Remaining Term"). The Treasury Yield shall be
determined as of the third Business Day (as defined in the Indenture) immediately preceding the applicable Redemption Date. The weekly average yields of United States Treasury Notes shall be determined by reference to the most recent statistical release published by the Federal Reserve Bank of New York and designated "H.15 (519) Selected Interest Rates" or any successor release (the "H.15 Statistical Release"). If the H.15 Statistical Release sets forth a weekly average yield for United States Treasury Notes having a constant maturity that is the same as the Remaining Term, then the Treasury Yield shall be equal to such weekly average yield. In all other cases, the Treasury Yield shall be calculated by interpolation, on a straight-line basis, between the weekly average yields on the United States Treasury Notes that have a constant maturity closest to and greater than the Remaining Term and the United States Treasury Notes that have a constant maturity closest to and less than the Remaining Term (in each case as set forth in the H.15 Statistical Release). Any weekly average yields as calculated by interpolation shall be rounded to the nearest 1/100th of 1%, with any figure of 1/200% or above being rounded upward. If weekly average yields for United States Treasury Notes are not available in the H.15 Statistical Release or otherwise, then the Treasury Yield shall be calculated by interpolation of comparable rates selected by the Independent Investment Banker.
8. The Notes shall not be entitled to the benefit of any sinking fund or other mandatory redemption provisions.
9. The Notes shall constitute Rule 144A Securities (as defined in the Indenture).
10. The Notes shall be in substantially the form of Annex A hereto (the "Form of Note").
11. Unless and until, pursuant to the Registration Rights Agreement dated as of September 15, 1997 between the Company and the Initial Purchasers named therein (the "Registration Rights Agreement"), (i) a Note is sold under an effective Registration Statement (as defined in the Registration Rights Agreement) or (ii) a Note is exchanged for a New Security (as defined in the Registration Rights Agreement) in connection with an effective Registration Statement, each Note shall bear the first legend (the "Private Placement Legend") set forth on the face of the Form of Note.
12. Each Note that is a Global Security shall bear the second legend set forth on the face of the Form of Note.
13. Unless and until, pursuant to the Registration Rights Agreement,
(i) a Note is sold under an effective Registration Statement or (ii) a Note is
exchanged for a New Security in connection with an effective Registration
Statement, the following provisions shall apply:
(a) Transfers to Non-QIB Institutional Accredited Investors
and Non-U.S. Persons. The following provisions shall apply with respect
to the registration of any proposed transfer of a Note to (1) any
institutional "accredited investor" (as defined in Rule 501(a)(1), (2),
(3) or (7) of Regulation D under the Securities Act) that is not a
qualified
institutional buyer as defined in Rule 144 (a "QIB") or (2) any person who is not a United States person (a "Non-U.S. Person"), as defined in Regulation S under the Securities Act of 1933, as amended ("Regulation S"):
(i) The Registrar shall register the transfer of any Note, whether or not such Note bears the Private Placement Legend, if (x) the requested transfer is at least two years after the original issue date of the Note or (y) a certificate substantially in the form of Exhibit A to the Note has been delivered to the Registrar and a letter substantially in the form of Exhibit B or C, as applicable, to the Note, has been delivered to the Registrar.
(ii) If the proposed transferor is an Agent Member (as defined in the Indenture) holding a beneficial interest in the Global Security, upon receipt by the Registrar of (x) the documents, if any, required by paragraph (i) and (y) instructions given in accordance with the Depositary's and the Registrar's procedures therefor, the Registrar shall reflect on its books and records the date and a decrease in the principal amount of the Global Security in an amount equal to the principal amount of the beneficial interest in the Global Security to be transferred, and the Company shall execute, and the Trustee shall authenticate and deliver, one or more Notes not represented by a Global Security of like tenor and amount.
(b) Transfers to QIBs. The following provisions shall apply with respect to the registration of any proposed transfer of a Note to a QIB (excluding a Non-U.S. Person who elects not to hold a beneficial interest in a Global Security):
(i) If the Note to be transferred is not represented by a Global Security, the Registrar shall register the transfer if such transfer is being made by a proposed transferor who has checked the box provided for on a certificate substantially in the form of Exhibit A to the Note stating, or has otherwise advised the Company and the Registrar in writing, that the sale has been made in compliance with the provisions of Rule 144A to a transferee who has signed the certification provided for on such certificate stating, or has otherwise advised the Company and the Registrar in writing, that it is purchasing the Note for its own account or an account with respect to which it exercises sole investment discretion and that it, or the person on whose behalf it is acting with respect to any such account, is a QIB within the meaning of Rule 144A, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Company as it has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon its foregoing representations in order to claim the exemption from registration provided by Rule 144A.
(ii) If the proposed transferee is an Agent Member and the Note to be transferred is not represented by a Global Security, upon receipt by the Registrar of instructions given in accordance with the Depositary's and the Registrar's procedures therefor, the Registrar shall reflect on its books and records the date and an increase in the principal amount of the Global Security in an amount equal to the principal amount of such Note to be transferred, and the Trustee shall cancel the Note so transferred.
(c) Private Placement Legend. Upon the transfer, exchange or replacement of a Note not bearing the Private Placement Legend, the Registrar shall deliver Notes that do not bear the Private Placement Legend. Upon the transfer, exchange or replacement of Notes bearing the Private Placement Legend, the Registrar shall deliver only Notes that bear the Private Placement Legend unless either (i) the circumstances contemplated by (a) (i) (x) of this section have been satisfied or (ii) there is delivered to the Registrar an Opinion of Counsel reasonably satisfactory to the Company and the Trustee to the effect that neither such legend nor the related restrictions on transfer are required in order to maintain compliance with the provisions of the Securities Act.
(d) General. By its acceptance of any Note bearing the Private Placement Legend, each Holder of such a Note acknowledges the restrictions on transfer of such Note set forth herein and in the Private Placement Legend and agrees that it will transfer such Note only as provided herein and in the Indenture.
EXHIBIT 12
COMPUTATION OF RATIO OF EARNINGS BEFORE FIXED CHARGES TO FIXED CHARGES
Six Months Ended
June 30, Year Ended December 31,
-------------------- -------------------------------------------------------------
1997 1996 1996 1995 1994 1993 1992
-------------------- -------------------------------------------------------------
Fixed charges:
Interest expense $ 16.1 $ 15.1 $ 30.9 $ 30.2 $ 30.2 $ 32.1 $ 43.6
Portion of rental expense
representative of an
interest factor .07 0.7 1.4 1.6 2.3 2.0 2.3
------ ------ ------ ------ ------ ------ ------
A. Total fixed charges 16.8 15.8 32.3 31.8 32.5 34.1 45.9
Add: Income before taxes 119.8 41.8 119.7 55.1 5.4 (26.2) 30.6
Less: Capitalized interest (8.2) - (2.6) (5.6) (3.7) - -
------ ------ ------ ------ ------ ------ ------
B. Earnings before
fixed charges $128.4 $ 57.6 $149.4 $ 81.3 $ 34.2 $ 7.9 $ 76.5
====== ====== ====== ====== ====== ====== ======
Ratio of earnings before
fixed charges to fixed
charges (B/A) 7.64 3.65 4.63 2.56 1.05 0.23 1.67
====== ====== ====== ====== ====== ====== ======
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EXHIBIT 15
ACCOUNTANTS' AWARENESS LETTER
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549
RE: Global Marine Inc. Registration Statement on Form S-4
We are aware that our reports dated May 7 and August 6, 1997, on our reviews of the consolidated interim financial information of Global Marine Inc. and subsidiaries for the periods ended March 31 and June 30, 1997, respectively, and included in the Quarterly Reports on Form 10-Q of Global Marine Inc. (File No. 1-5471) for the quarters ended March 31 and June 30, 1997, respectively, are incorporated by reference in the Prospectus constituting part of the Company's Registration Statement on Form S-4 pertaining to the exchange offer of 7 1/8% Notes of the Company. Pursuant to Rule 436(c) under the Securities Act of 1933, said reports should not be considered a part of said Registration Statement prepared or certified by us within the meaning of Sections 7 and 11 of that Act.
/s/ COOPERS & LYBRAND L.L.P. Houston, Texas October 28, 1997 |
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement on Form S-4 of our report dated February 7, 1997, on our audits of the consolidated financial statements and the consolidated financial statement schedules of Global Marine Inc. and subsidiaries. We also consent to the reference to our firm under the caption "Experts."
/s/ Coopers & Lybrand L.L.P. Houston, Texas October 28, 1997 |
EXHIBIT 25
Registration No.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(B)(2) ___
WILMINGTON TRUST COMPANY
(Exact name of trustee as specified in its charter)
Delaware 51-0055023
(State of incorporation) (I.R.S. employer identification no.)
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
(Address of principal executive offices)
Cynthia L. Corliss
Vice President and Trust Counsel
Wilmington Trust Company
Rodney Square North
Wilmington, Delaware 19890
(302) 651-8516
(Name, address and telephone number of agent for service)
|
GLOBAL MARINE, INC.
(Exact name of obligor as specified in its charter)
Delaware 95-1849298
(State of incorporation) (I.R.S. employer identification no.)
777 N. Eldridge Parkway
Houston, Texas 77079-4493
(Address of principal executive offices) (Zip Code)
|
7 1/8% Notes Due 2007
(Title of the indenture securities)
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which it is subject.
Federal Deposit Insurance Co. State Bank Commissioner Five Penn Center Dover, Delaware Suite #2901 Philadelphia, PA |
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each affiliation:
Based upon an examination of the books and records of the trustee and upon information furnished by the obligor, the obligor is not an affiliate of the trustee.
ITEM 3. LIST OF EXHIBITS.
List below all exhibits filed as part of this Statement of Eligibility and Qualification.
A. Copy of the Charter of Wilmington Trust Company, which includes the certificate of authority of Wilmington Trust Company to commence business and the authorization of Wilmington Trust Company to exercise corporate trust powers.
B. Copy of By-Laws of Wilmington Trust Company.
C. Consent of Wilmington Trust Company required by Section 321(b) of Trust Indenture Act.
D. Copy of most recent Report of Condition of Wilmington Trust Company.
Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the trustee, Wilmington Trust Company, a corporation organized and existing under the laws of Delaware, has duly caused this Statement of Eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of Wilmington and State of Delaware on the 17th day of October, 1997.
WILMINGTON TRUST COMPANY
[SEAL]
Attest: /s/ PATRICIA A. EVANS By:/s/ EMMETT R. HARMON
----------------------------- ---------------------
Assistant Secretary Name: Emmett R. Harmon
Title: Vice President
|
EXHIBIT A
AMENDED CHARTER
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON MAY 9, 1987
AMENDED CHARTER
OR
ACT OF INCORPORATION
OF
WILMINGTON TRUST COMPANY
WILMINGTON TRUST COMPANY, originally incorporated by an Act of the General Assembly of the State of Delaware, entitled "An Act to Incorporate the Delaware Guarantee and Trust Company", approved March 2, A.D. 1901, and the name of which company was changed to "WILMINGTON TRUST COMPANY" by an amendment filed in the Office of the Secretary of State on March 18, A.D. 1903, and the Charter or Act of Incorporation of which company has been from time to time amended and changed by merger agreements pursuant to the corporation law for state banks and trust companies of the State of Delaware, does hereby alter and amend its Charter or Act of Incorporation so that the same as so altered and amended shall in its entirety read as follows:
FIRST: - The name of this corporation is WILMINGTON TRUST COMPANY.
SECOND: - The location of its principal office in the State of Delaware is at Rodney Square North, in the City of Wilmington, County of New Castle; the name of its resident agent is WILMINGTON TRUST COMPANY whose address is Rodney Square North, in said City. In addition to such principal office, the said corporation maintains and operates branch offices in the City of Newark, New Castle County, Delaware, the Town of Newport, New Castle County, Delaware, at Claymont, New Castle County, Delaware, at Greenville, New Castle County Delaware, and at Milford Cross Roads, New Castle County, Delaware, and shall be empowered to open, maintain and operate branch offices at Ninth and Shipley Streets, 418 Delaware Avenue, 2120 Market Street, and 3605 Market Street, all in the City of Wilmington, New Castle County, Delaware, and such other branch offices or places of business as may be authorized from time to time by the agency or agencies of the government of the State of Delaware empowered to confer such authority.
THIRD: - (a) The nature of the business and the objects and purposes proposed to be transacted, promoted or carried on by this Corporation are to do any or all of the things herein mentioned as fully and to the same extent as natural persons might or could do and in any part of the world, viz.:
(1) To sue and be sued, complain and defend in any Court of law or equity and to make and use a common seal, and alter the seal at pleasure, to hold, purchase, convey, mortgage or otherwise deal in real and personal estate and property, and to appoint such officers and agents as the business of the
Corporation shall require, to make by-laws not inconsistent with the Constitution or laws of the United States or of this State, to discount bills, notes or other evidences of debt, to receive deposits of money, or securities for money, to buy gold and silver bullion and foreign coins, to buy and sell bills of exchange, and generally to use, exercise and enjoy all the powers, rights, privileges and franchises incident to a corporation which are proper or necessary for the transaction of the business of the Corporation hereby created.
(2) To insure titles to real and personal property, or any estate or interests therein, and to guarantee the holder of such property, real or personal, against any claim or claims, adverse to his interest therein, and to prepare and give certificates of title for any lands or premises in the State of Delaware, or elsewhere.
(3) To act as factor, agent, broker or attorney in the receipt, collection, custody, investment and management of funds, and the purchase, sale, management and disposal of property of all descriptions, and to prepare and execute all papers which may be necessary or proper in such business.
(4) To prepare and draw agreements, contracts, deeds, leases, conveyances, mortgages, bonds and legal papers of every description, and to carry on the business of conveyancing in all its branches.
(5) To receive upon deposit for safekeeping money, jewelry, plate, deeds, bonds and any and all other personal property of every sort and kind, from executors, administrators, guardians, public officers, courts, receivers, assignees, trustees, and from all fiduciaries, and from all other persons and individuals, and from all corporations whether state, municipal, corporate or private, and to rent boxes, safes, vaults and other receptacles for such property.
(6) To act as agent or otherwise for the purpose of registering, issuing, certificating, countersigning, transferring or underwriting the stock, bonds or other obligations of any corporation, association, state or municipality, and may receive and manage any sinking fund therefor on such terms as may be agreed upon between the two parties, and in like manner may act as Treasurer of any corporation or municipality.
(7) To act as Trustee under any deed of trust, mortgage, bond or other instrument issued by any state, municipality, body politic, corporation, association or person, either alone or in conjunction with any other person or persons, corporation or corporations.
(8) To guarantee the validity, performance or effect of any contract or agreement, and the fidelity of persons holding places of responsibility or trust; to become surety for any person, or persons, for the faithful performance of any trust, office, duty, contract or agreement, either by itself or in conjunction with any other person, or persons, corporation, or corporations, or in like manner become surety upon any bond, recognizance, obligation, judgment, suit, order, or decree to be entered in any court of record within the State of Delaware or elsewhere, or which may now or hereafter be required by any law, judge, officer or court in the State of Delaware or elsewhere.
(9) To act by any and every method of appointment as trustee, trustee in bankruptcy, receiver, assignee, assignee in bankruptcy, executor, administrator, guardian, bailee, or in any other trust capacity in the receiving, holding, managing, and disposing of any and all estates and property, real, personal or mixed, and to be appointed as such trustee, trustee in bankruptcy, receiver, assignee, assignee in bankruptcy, executor, administrator, guardian or bailee by any persons, corporations, court, officer, or authority, in the State of Delaware or elsewhere; and whenever this Corporation is so appointed by any person, corporation, court, officer or authority such trustee, trustee in bankruptcy, receiver, assignee, assignee in bankruptcy, executor, administrator, guardian, bailee, or in any other trust capacity, it shall not be required to give bond with surety, but its capital stock shall be taken and held as security for the performance of the duties devolving upon it by such appointment.
(10) And for its care, management and trouble, and the exercise of any of its powers hereby given, or for the performance of any of the duties which it may undertake or be called upon to perform, or for the assumption of any responsibility the said Corporation may be entitled to receive a proper compensation.
(11) To purchase, receive, hold and own bonds, mortgages, debentures, shares of capital stock, and other securities, obligations, contracts and evidences of indebtedness, of any private, public or municipal corporation within and without the State of Delaware, or of the Government of the United States, or of any state, territory, colony, or possession thereof, or of any foreign government or country; to receive, collect, receipt for, and dispose of interest, dividends and income upon and from any of the bonds, mortgages, debentures, notes, shares of capital stock, securities, obligations, contracts, evidences of indebtedness and other property held and owned by it, and to exercise in respect of all such bonds, mortgages, debentures, notes, shares of capital stock, securities, obligations, contracts, evidences of indebtedness and other property, any and all the rights, powers and privileges of individual
owners thereof, including the right to vote thereon; to invest and deal in and with any of the moneys of the Corporation upon such securities and in such manner as it may think fit and proper, and from time to time to vary or realize such investments; to issue bonds and secure the same by pledges or deeds of trust or mortgages of or upon the whole or any part of the property held or owned by the Corporation, and to sell and pledge such bonds, as and when the Board of Directors shall determine, and in the promotion of its said corporate business of investment and to the extent authorized by law, to lease, purchase, hold, sell, assign, transfer, pledge, mortgage and convey real and personal property of any name and nature and any estate or interest therein.
(b) In furtherance of, and not in limitation, of the powers conferred by the laws of the State of Delaware, it is hereby expressly provided that the said Corporation shall also have the following powers:
(1) To do any or all of the things herein set forth, to the same extent as natural persons might or could do, and in any part of the world.
(2) To acquire the good will, rights, property and franchises and to undertake the whole or any part of the assets and liabilities of any person, firm, association or corporation, and to pay for the same in cash, stock of this Corporation, bonds or otherwise; to hold or in any manner to dispose of the whole or any part of the property so purchased; to conduct in any lawful manner the whole or any part of any business so acquired, and to exercise all the powers necessary or convenient in and about the conduct and management of such business.
(3) To take, hold, own, deal in, mortgage or otherwise lien, and to lease, sell, exchange, transfer, or in any manner whatever dispose of property, real, personal or mixed, wherever situated.
(4) To enter into, make, perform and carry out contracts of every kind with any person, firm, association or corporation, and, without limit as to amount, to draw, make, accept, endorse, discount, execute and issue promissory notes, drafts, bills of exchange, warrants, bonds, debentures, and other negotiable or transferable instruments.
(5) To have one or more offices, to carry on all or any of its operations and businesses, without restriction to the same extent as natural persons might or could do, to purchase or otherwise acquire, to hold, own, to mortgage, sell, convey or otherwise dispose of, real and personal property, of every class and description, in any State, District, Territory or Colony of the United States, and in any foreign country or place.
(6) It is the intention that the objects, purposes and powers specified and clauses contained in this paragraph shall (except where otherwise expressed in said paragraph) be nowise limited or restricted by reference to or inference from the terms of any other clause of this or any other paragraph in this charter, but that the objects, purposes and powers specified in each of the clauses of this paragraph shall be regarded as independent objects, purposes and powers.
FOURTH: - (a) The total number of shares of all classes of stock which the Corporation shall have authority to issue is forty-one million (41,000,000) shares, consisting of:
(1) One million (1,000,000) shares of Preferred stock, par value $10.00 per share (hereinafter referred to as "Preferred Stock"); and
(2) Forty million (40,000,000) shares of Common Stock, par value $1.00 per share (hereinafter referred to as "Common Stock").
(b) Shares of Preferred Stock may be issued from time to time in one or more series as may from time to time be determined by the Board of Directors each of said series to be distinctly designated. All shares of any one series of Preferred Stock shall be alike in every particular, except that there may be different dates from which dividends, if any, thereon shall be cumulative, if made cumulative. The voting powers and the preferences and relative, participating, optional and other special rights of each such series, and the qualifications, limitations or restrictions thereof, if any, may differ from those of any and all other series at any time outstanding; and, subject to the provisions of subparagraph 1 of Paragraph (c) of this Article FOURTH, the Board of Directors of the Corporation is hereby expressly granted authority to fix by resolution or resolutions adopted prior to the issuance of any shares of a particular series of Preferred Stock, the voting powers and the designations, preferences and relative, optional and other special rights, and the qualifications, limitations and restrictions of such series, including, but without limiting the generality of the foregoing, the following:
(1) The distinctive designation of, and the number of shares of Preferred Stock which shall constitute such series, which number may be increased (except where otherwise provided by the Board of Directors) or decreased (but not below the number of shares thereof then outstanding) from time to time by like action of the Board of Directors;
(2) The rate and times at which, and the terms and conditions on which, dividends, if any, on Preferred Stock of such series shall be paid, the extent of the preference or relation, if any, of such dividends to the dividends payable on any other class or classes, or series of the same or other class of
stock and whether such dividends shall be cumulative or non-cumulative;
(3) The right, if any, of the holders of Preferred Stock of such series to convert the same into or exchange the same for, shares of any other class or classes or of any series of the same or any other class or classes of stock of the Corporation and the terms and conditions of such conversion or exchange;
(4) Whether or not Preferred Stock of such series shall be subject to redemption, and the redemption price or prices and the time or times at which, and the terms and conditions on which, Preferred Stock of such series may be redeemed.
(5) The rights, if any, of the holders of Preferred Stock of such series upon the voluntary or involuntary liquidation, merger, consolidation, distribution or sale of assets, dissolution or winding-up, of the Corporation.
(6) The terms of the sinking fund or redemption or purchase account, if any, to be provided for the Preferred Stock of such series; and
(7) The voting powers, if any, of the holders of such series of Preferred Stock which may, without limiting the generality of the foregoing include the right, voting as a series or by itself or together with other series of Preferred Stock or all series of Preferred Stock as a class, to elect one or more directors of the Corporation if there shall have been a default in the payment of dividends on any one or more series of Preferred Stock or under such circumstances and on such conditions as the Board of Directors may determine.
(c) (1) After the requirements with respect to preferential dividends on the Preferred Stock (fixed in accordance with the provisions of section (b) of this Article FOURTH), if any, shall have been met and after the Corporation shall have complied with all the requirements, if any, with respect to the setting aside of sums as sinking funds or redemption or purchase accounts (fixed in accordance with the provisions of section (b) of this Article FOURTH), and subject further to any conditions which may be fixed in accordance with the provisions of section (b) of this Article FOURTH, then and not otherwise the holders of Common Stock shall be entitled to receive such dividends as may be declared from time to time by the Board of Directors.
(2) After distribution in full of the preferential amount,
if any, (fixed in accordance with the provisions of section
(b) of this Article FOURTH), to be distributed to the holders
of Preferred Stock in the event of voluntary or involuntary
liquidation, distribution or sale of assets, dissolution or
winding-up, of the Corporation, the holders of the Common
Stock shall be entitled to
receive all of the remaining assets of the Corporation, tangible and intangible, of whatever kind available for distribution to stockholders ratably in proportion to the number of shares of Common Stock held by them respectively.
(3) Except as may otherwise be required by law or by the provisions of such resolution or resolutions as may be adopted by the Board of Directors pursuant to section (b) of this Article FOURTH, each holder of Common Stock shall have one vote in respect of each share of Common Stock held on all matters voted upon by the stockholders.
(d) No holder of any of the shares of any class or series of stock or of options, warrants or other rights to purchase shares of any class or series of stock or of other securities of the Corporation shall have any preemptive right to purchase or subscribe for any unissued stock of any class or series or any additional shares of any class or series to be issued by reason of any increase of the authorized capital stock of the Corporation of any class or series, or bonds, certificates of indebtedness, debentures or other securities convertible into or exchangeable for stock of the Corporation of any class or series, or carrying any right to purchase stock of any class or series, but any such unissued stock, additional authorized issue of shares of any class or series of stock or securities convertible into or exchangeable for stock, or carrying any right to purchase stock, may be issued and disposed of pursuant to resolution of the Board of Directors to such persons, firms, corporations or associations, whether such holders or others, and upon such terms as may be deemed advisable by the Board of Directors in the exercise of its sole discretion.
(e) The relative powers, preferences and rights of each series of Preferred Stock in relation to the relative powers, preferences and rights of each other series of Preferred Stock shall, in each case, be as fixed from time to time by the Board of Directors in the resolution or resolutions adopted pursuant to authority granted in section (b) of this Article FOURTH and the consent, by class or series vote or otherwise, of the holders of such of the series of Preferred Stock as are from time to time outstanding shall not be required for the issuance by the Board of Directors of any other series of Preferred Stock whether or not the powers, preferences and rights of such other series shall be fixed by the Board of Directors as senior to, or on a parity with, the powers, preferences and rights of such outstanding series, or any of them; provided, however, that the Board of Directors may provide in the resolution or resolutions as to any series of Preferred Stock adopted pursuant to section (b) of this Article FOURTH that the consent of the holders of a majority (or such greater proportion as shall be therein fixed) of the outstanding shares of such series voting thereon shall be required for the issuance of any or all other series of Preferred Stock.
(f) Subject to the provisions of section (e), shares of any series of Preferred Stock may be issued from time to time as the Board of Directors of the Corporation shall determine and on such terms and for such consideration as shall be fixed by the Board of Directors.
(g) Shares of Common Stock may be issued from time to time as the Board of Directors of the Corporation shall determine and on such terms and for such consideration as shall be fixed by the Board of Directors.
(h) The authorized amount of shares of Common Stock and of Preferred Stock may, without a class or series vote, be increased or decreased from time to time by the affirmative vote of the holders of a majority of the stock of the Corporation entitled to vote thereon.
FIFTH: - (a) The business and affairs of the Corporation shall be conducted and managed by a Board of Directors. The number of directors constituting the entire Board shall be not less than five nor more than twenty-five as fixed from time to time by vote of a majority of the whole Board, provided, however, that the number of directors shall not be reduced so as to shorten the term of any director at the time in office, and provided further, that the number of directors constituting the whole Board shall be twenty-four until otherwise fixed by a majority of the whole Board.
(b) The Board of Directors shall be divided into three classes, as nearly equal in number as the then total number of directors constituting the whole Board permits, with the term of office of one class expiring each year. At the annual meeting of stockholders in 1982, directors of the first class shall be elected to hold office for a term expiring at the next succeeding annual meeting, directors of the second class shall be elected to hold office for a term expiring at the second succeeding annual meeting and directors of the third class shall be elected to hold office for a term expiring at the third succeeding annual meeting. Any vacancies in the Board of Directors for any reason, and any newly created directorships resulting from any increase in the directors, may be filled by the Board of Directors, acting by a majority of the directors then in office, although less than a quorum, and any directors so chosen shall hold office until the next annual election of directors. At such election, the stockholders shall elect a successor to such director to hold office until the next election of the class for which such director shall have been chosen and until his successor shall be elected and qualified. No decrease in the number of directors shall shorten the term of any incumbent director.
(c) Notwithstanding any other provisions of this Charter or Act of Incorporation or the By-Laws of the Corporation (and notwithstanding the fact that some lesser percentage may be specified by law, this Charter or Act of Incorporation or the By-Laws of the Corporation), any director or the entire Board of Directors of the
Corporation may be removed at any time without cause, but only by the affirmative vote of the holders of two- thirds or more of the outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors (considered for this purpose as one class) cast at a meeting of the stockholders called for that purpose.
(d) Nominations for the election of directors may be made by the Board of Directors or by any stockholder entitled to vote for the election of directors. Such nominations shall be made by notice in writing, delivered or mailed by first class United States mail, postage prepaid, to the Secretary of the Corporation not less than 14 days nor more than 50 days prior to any meeting of the stockholders called for the election of directors; provided, however, that if less than 21 days' notice of the meeting is given to stockholders, such written notice shall be delivered or mailed, as prescribed, to the Secretary of the Corporation not later than the close of the seventh day following the day on which notice of the meeting was mailed to stockholders. Notice of nominations which are proposed by the Board of Directors shall be given by the Chairman on behalf of the Board.
(e) Each notice under subsection (d) shall set forth (i) the name, age, business address and, if known, residence address of each nominee proposed in such notice, (ii) the principal occupation or employment of such nominee and (iii) the number of shares of stock of the Corporation which are beneficially owned by each such nominee.
(f) The Chairman of the meeting may, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance with the foregoing procedure, and if he should so determine, he shall so declare to the meeting and the defective nomination shall be disregarded.
(g) No action required to be taken or which may be taken at any annual or special meeting of stockholders of the Corporation may be taken without a meeting, and the power of stockholders to consent in writing, without a meeting, to the taking of any action is specifically denied.
SIXTH: - The Directors shall choose such officers, agent and servants as may be provided in the By-Laws as they may from time to time find necessary or proper.
SEVENTH: - The Corporation hereby created is hereby given the same powers, rights and privileges as may be conferred upon corporations organized under the Act entitled "An Act Providing a General Corporation Law", approved March 10, 1899, as from time to time amended.
EIGHTH: - This Act shall be deemed and taken to be a private Act.
NINTH: - This Corporation is to have perpetual existence.
TENTH: - The Board of Directors, by resolution passed by a majority of the whole Board, may designate any of their number to constitute an Executive Committee, which Committee, to the extent provided in said resolution, or in the By-Laws of the Company, shall have and may exercise all of the powers of the Board of Directors in the management of the business and affairs of the Corporation, and shall have power to authorize the seal of the Corporation to be affixed to all papers which may require it.
ELEVENTH: - The private property of the stockholders shall not be liable for the payment of corporate debts to any extent whatever.
TWELFTH: - The Corporation may transact business in any part of the world.
THIRTEENTH: - The Board of Directors of the Corporation is expressly authorized to make, alter or repeal the By-Laws of the Corporation by a vote of the majority of the entire Board. The stockholders may make, alter or repeal any By-Law whether or not adopted by them, provided however, that any such additional By-Laws, alterations or repeal may be adopted only by the affirmative vote of the holders of two-thirds or more of the outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors (considered for this purpose as one class).
FOURTEENTH: - Meetings of the Directors may be held outside of the State of Delaware at such places as may be from time to time designated by the Board, and the Directors may keep the books of the Company outside of the State of Delaware at such places as may be from time to time designated by them.
FIFTEENTH: - (a) In addition to any affirmative vote required by
law, and except as otherwise expressly provided in sections (b) and
(c) of this Article FIFTEENTH:
(A) any merger or consolidation of the Corporation or any Subsidiary (as hereinafter defined) with or into (i) any Interested Stockholder (as hereinafter defined) or (ii) any other corporation (whether or not itself an Interested Stockholder), which, after such merger or consolidation, would be an Affiliate (as hereinafter defined) of an Interested Stockholder, or
(B) any sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of related transactions) to or with any Interested Stockholder or any Affiliate of any Interested Stockholder of any assets of the Corporation or any Subsidiary having an aggregate fair market value of $1,000,000 or more, or
(C) the issuance or transfer by the Corporation or any Subsidiary (in one transaction or a series of related transactions) of any securities of the Corporation or any Subsidiary to any Interested Stockholder or any Affiliate of any Interested Stockholder in exchange for cash, securities or other property (or a combination thereof) having an aggregate fair market value of $1,000,000 or more, or
(D) the adoption of any plan or proposal for the liquidation or dissolution of the Corporation, or
(E) any reclassification of securities (including any reverse stock split), or recapitalization of the Corporation, or any merger or consolidation of the Corporation with any of its Subsidiaries or any similar transaction (whether or not with or into or otherwise involving an Interested Stockholder) which has the effect, directly or indirectly, of increasing the proportionate share of the outstanding shares of any class of equity or convertible securities of the Corporation or any Subsidiary which is directly or indirectly owned by any Interested Stockholder, or any Affiliate of any Interested Stockholder,
shall require the affirmative vote of the holders of at least two-thirds of the outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors, considered for the purpose of this Article FIFTEENTH as one class ("Voting Shares"). Such affirmative vote shall be required notwithstanding the fact that no vote may be required, or that some lesser percentage may be specified, by law or in any agreement with any national securities exchange or otherwise.
(2) The term "business combination" as used in this Article FIFTEENTH shall mean any transaction which is referred to any one or more of clauses (A) through (E) of paragraph 1 of the section (a).
(b) The provisions of section (a) of this Article FIFTEENTH shall not be applicable to any particular business combination and such business combination shall require only such affirmative vote as is required by law and any other provisions of the Charter or Act of Incorporation of By-Laws if such business combination has been approved by a majority of the whole Board.
(c) For the purposes of this Article FIFTEENTH:
(1) A "person" shall mean any individual firm, corporation or other entity.
(2) "Interested Stockholder" shall mean, in respect of any business combination, any person (other than the Corporation or any Subsidiary) who or which as of the record date for the determination of stockholders entitled to notice of and to vote on
such business combination, or immediately prior to the consummation of any such transaction:
(A) is the beneficial owner, directly or indirectly, of more than 10% of the Voting Shares, or
(B) is an Affiliate of the Corporation and at any time within two years prior thereto was the beneficial owner, directly or indirectly, of not less than 10% of the then outstanding voting Shares, or
(C) is an assignee of or has otherwise succeeded in any share of capital stock of the Corporation which were at any time within two years prior thereto beneficially owned by any Interested Stockholder, and such assignment or succession shall have occurred in the course of a transaction or series of transactions not involving a public offering within the meaning of the Securities Act of 1933.
(3) A person shall be the "beneficial owner" of any Voting Shares:
(A) which such person or any of its Affiliates and Associates (as hereafter defined) beneficially own, directly or indirectly, or
(B) which such person or any of its Affiliates or Associates has (i) the right to acquire (whether such right is exercisable immediately or only after the passage of time), pursuant to any agreement, arrangement or understanding or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise, or (ii) the right to vote pursuant to any agreement, arrangement or understanding, or
(C) which are beneficially owned, directly or indirectly, by any other person with which such first mentioned person or any of its Affiliates or Associates has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting or disposing of any shares of capital stock of the Corporation.
(4) The outstanding Voting Shares shall include shares deemed owned through application of paragraph (3) above but shall not include any other Voting Shares which may be issuable pursuant to any agreement, or upon exercise of conversion rights, warrants or options or otherwise.
(5) "Affiliate" and "Associate" shall have the respective meanings given those terms in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as in effect on December 31, 1981.
(6) "Subsidiary" shall mean any corporation of which a majority of any class of equity security (as defined in Rule 3a11-1 of the General Rules and Regulations under the Securities Exchange Act of 1934, as in effect in December 31, 1981) is owned, directly or indirectly, by the Corporation; provided, however, that for the purposes of the definition of Investment Stockholder set forth in paragraph (2) of this section (c), the term "Subsidiary" shall mean only a corporation of which a majority of each class of equity security is owned, directly or indirectly, by the Corporation.
(d) majority of the directors shall have the power and duty to determine for the purposes of this Article FIFTEENTH on the basis of information known to them, (1) the number of Voting Shares beneficially owned by any person (2) whether a person is an Affiliate or Associate of another, (3) whether a person has an agreement, arrangement or understanding with another as to the matters referred to in paragraph (3) of section (c), or (4) whether the assets subject to any business combination or the consideration received for the issuance or transfer of securities by the Corporation, or any Subsidiary has an aggregate fair market value of $1,00,000 or more.
(e) Nothing contained in this Article FIFTEENTH shall be construed to relieve any Interested Stockholder from any fiduciary obligation imposed by law.
SIXTEENTH: Notwithstanding any other provision of this Charter or Act of Incorporation or the By-Laws of the Corporation (and in addition to any other vote that may be required by law, this Charter or Act of Incorporation by the By-Laws), the affirmative vote of the holders of at least two-thirds of the outstanding shares of the capital stock of the Corporation entitled to vote generally in the election of directors (considered for this purpose as one class) shall be required to amend, alter or repeal any provision of Articles FIFTH, THIRTEENTH, FIFTEENTH or SIXTEENTH of this Charter or Act of Incorporation.
SEVENTEENTH: (a) a Director of this Corporation shall not be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a Director, except to the extent such exemption from liability or limitation thereof is not permitted under the Delaware General Corporation Laws as the same exists or may hereafter be amended.
(b) Any repeal or modification of the foregoing paragraph shall not adversely affect any right or protection of a Director of the Corporation existing hereunder with respect to any act or omission occurring prior to the time of such repeal or modification."
EXHIBIT B
BY-LAWS
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON JANUARY 16, 1997
BY-LAWS OF WILMINGTON TRUST COMPANY
ARTICLE I
STOCKHOLDERS' MEETINGS
Section 1. The Annual Meeting of Stockholders shall be held on the third Thursday in April each year at the principal office at the Company or at such other date, time, or place as may be designated by resolution by the Board of Directors.
Section 2. Special meetings of all stockholders may be called at any time by the Board of Directors, the Chairman of the Board or the President.
Section 3. Notice of all meetings of the stockholders shall be given by mailing to each stockholder at least ten (10) days before said meeting, at his last known address, a written or printed notice fixing the time and place of such meeting.
Section 4. A majority in the amount of the capital stock of the Company issued and outstanding on the record date, as herein determined, shall constitute a quorum at all meetings of stockholders for the transaction of any business, but the holders of a small number of shares may adjourn, from time to time, without further notice, until a quorum is secured. At each annual or special meeting of stockholders, each stockholder shall be entitled to one vote, either in person or by proxy, for each shares of stock registered in the stockholder's name on the books of the Company on the record date for any such meeting as determined herein.
ARTICLE II
DIRECTORS
Section 1. The number and classification of the Board of Directors shall be as set forth in the Charter of the Bank.
Section 2. No person who has attained the age of seventy-two (72) years shall be nominated for election to the Board of Directors of the Company, provided, however, that this limitation shall not apply to any person who was serving as director of the Company on September 16, 1971.
Section 3. The class of Directors so elected shall hold office for three years or until their successors are elected and qualified.
Section 4. The affairs and business of the Company shall be managed and conducted by the Board of Directors.
Section 5. The Board of Directors shall meet at the principal office of the Company or elsewhere in its discretion at such times to be determined by a majority of its
members, or at the call of the Chairman of the Board of Directors or the President.
Section 6. Special meetings of the Board of Directors may be called at any time by the Chairman of the Board of Directors or by the President, and shall be called upon the written request of a majority of the directors.
Section 7. A majority of the directors elected and qualified shall be necessary to constitute a quorum for the transaction of business at any meeting of the Board of Directors.
Section 8. Written notice shall be sent by mail to each director of any special meeting of the Board of Directors, and of any change in the time or place of any regular meeting, stating the time and place of such meeting, which shall be mailed not less than two days before the time of holding such meeting.
Section 9. In the event of the death, resignation, removal, inability to act, or disqualification of any director, the Board of Directors, although less than a quorum, shall have the right to elect the successor who shall hold office for the remainder of the full term of the class of directors in which the vacancy occurred, and until such director's successor shall have been duly elected and qualified.
Section 10. The Board of Directors at its first meeting after its election by the stockholders shall appoint an Executive Committee, a Trust Committee, an Audit Committee and a Compensation Committee, and shall elect from its own members a Chairman of the Board of Directors and a President who may be the same person. The Board of Directors shall also elect at such meeting a Secretary and a Treasurer, who may be the same person, may appoint at any time such other committees and elect or appoint such other officers as it may deem advisable. The Board of Directors may also elect at such meeting one or more Associate Directors.
Section 11. The Board of Directors may at any time remove, with or without cause, any member of any Committee appointed by it or any associate director or officer elected by it and may appoint or elect his successor.
Section 12. The Board of Directors may designate an officer to be in charge of such of the departments or division of the Company as it may deem advisable.
ARTICLE III
COMMITTEES
Section 1. Executive Committee
(A) The Executive Committee shall be composed of not more than nine members who shall be selected by the Board of Directors from its own members and who
shall hold office during the pleasure of the Board.
(B) The Executive Committee shall have all the powers of the Board of Directors when it is not in session to transact all business for and in behalf of the Company that may be brought before it.
(C) The Executive Committee shall meet at the principal office of the Company or elsewhere in its discretion at such times to be determined by a majority of its members, or at the call of the Chairman of the Executive Committee or at the call of the Chairman of the Board of Directors. The majority of its members shall be necessary to constitute a quorum for the transaction of business. Special meetings of the Executive Committee may be held at any time when a quorum is present.
(D) Minutes of each meeting of the Executive Committee shall be kept and submitted to the Board of Directors at its next meeting.
(E) The Executive Committee shall advise and superintend all investments that may be made of the funds of the Company, and shall direct the disposal of the same, in accordance with such rules and regulations as the Board of Directors from time to time make.
(F) In the event of a state of disaster of sufficient severity to prevent the conduct and management of the affairs and business of the Company by its directors and officers as contemplated by these By-Laws any two available members of the Executive Committee as constituted immediately prior to such disaster shall constitute a quorum of that Committee for the full conduct and management of the affairs and business of the Company in accordance with the provisions of Article III of these By-Laws; and if less than three members of the Trust Committee is constituted immediately prior to such disaster shall be available for the transaction of its business, such Executive Committee shall also be empowered to exercise all of the powers reserved to the Trust Committee under Article III Section 2 hereof. In the event of the unavailability, at such time, of a minimum of two members of such Executive Committee, any three available directors shall constitute the Executive Committee for the full conduct and management of the affairs and business of the Company in accordance with the foregoing provisions of this Section. This By-Law shall be subject to implementation by Resolutions of the Board of Directors presently existing or hereafter passed from time to time for that purpose, and any provisions of these By-Laws (other than this Section) and any resolutions which are contrary to the provisions of this Section or to the provisions of any such implementary Resolutions shall be suspended during such a disaster period until it shall be determined by any interim Executive Committee acting under this section that it shall be to the advantage of the Company to resume the conduct and management of its affairs and business under all of the other provisions of these By-Laws.
Section 2. Trust Committee
(A) The Trust Committee shall be composed of not more than thirteen members who shall be selected by the Board of Directors, a majority of whom shall be members of the Board of Directors and who shall hold office during the pleasure of the Board.
(B) The Trust Committee shall have general supervision over the Trust Department and the investment of trust funds, in all matters, however, being subject to the approval of the Board of Directors.
(C) The Trust Committee shall meet at the principal office of the Company or elsewhere in its discretion at such times to be determined by a majority of its members or at the call of its chairman. A majority of its members shall be necessary to constitute a quorum for the transaction of business.
(D) Minutes of each meeting of the Trust Committee shall be kept and promptly submitted to the Board of Directors.
(E) The Trust Committee shall have the power to appoint Committees and/or designate officers or employees of the Company to whom supervision over the investment of trust funds may be delegated when the Trust Committee is not in session.
Section 3. Audit Committee
(A) The Audit Committee shall be composed of five members who shall be selected by the Board of Directors from its own members, none of whom shall be an officer of the Company, and shall hold office at the pleasure of the Board.
(B) The Audit Committee shall have general supervision over the Audit Division in all matters however subject to the approval of the Board of Directors; it shall consider all matters brought to its attention by the officer in charge of the Audit Division, review all reports of examination of the Company made by any governmental agency or such independent auditor employed for that purpose, and make such recommendations to the Board of Directors with respect thereto or with respect to any other matters pertaining to auditing the Company as it shall deem desirable.
(C) The Audit Committee shall meet whenever and wherever the majority of its members shall deem it to be proper for the transaction of its business, and a majority of its Committee shall constitute a quorum.
Section 4. Compensation Committee
(A) The Compensation Committee shall be composed of not more than
five (5) members who shall be selected by the Board of Directors from its own members who are not officers of the Company and who shall hold office during the pleasure of the Board.
(B) The Compensation Committee shall in general advise upon all matters of policy concerning the Company brought to its attention by the management and from time to time review the management of the Company, major organizational matters, including salaries and employee benefits and specifically shall administer the Executive Incentive Compensation Plan.
(C) Meetings of the Compensation Committee may be called at any time by the Chairman of the Compensation Committee, the Chairman of the Board of Directors, or the President of the Company.
Section 5. Associate Directors
(A) Any person who has served as a director may be elected by the Board of Directors as an associate director, to serve during the pleasure of the Board.
(B) An associate director shall be entitled to attend all directors meetings and participate in the discussion of all matters brought to the Board, with the exception that he would have no right to vote. An associate director will be eligible for appointment to Committees of the Company, with the exception of the Executive Committee, Audit Committee and Compensation Committee, which must be comprised solely of active directors.
Section 6. Absence or Disqualification of Any Member of a Committee
(A) In the absence or disqualification of any member of any Committee created under Article III of the By-Laws of this Company, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absence or disqualified member.
ARTICLE IV
OFFICERS
Section 1. The Chairman of the Board of Directors shall preside at all meetings of the Board and shall have such further authority and powers and shall perform such duties as the Board of Directors may from time to time confer and direct. He shall also exercise such powers and perform such duties as may from time to time be agreed upon between himself and the President of the Company.
Section 2. The Vice Chairman of the Board. The Vice Chairman of the Board of
Directors shall preside at all meetings of the Board of Directors at which the Chairman of the Board shall not be present and shall have such further authority and powers and shall perform such duties as the Board of Directors or the Chairman of the Board may from time to time confer and direct.
Section 3. The President shall have the powers and duties pertaining to the office of the President conferred or imposed upon him by statute or assigned to him by the Board of Directors in the absence of the Chairman of the Board the President shall have the powers and duties of the Chairman of the Board.
Section 4. The Chairman of the Board of Directors or the President as designated by the Board of Directors, shall carry into effect all legal directions of the Executive Committee and of the Board of Directors, and shall at all times exercise general supervision over the interest, affairs and operations of the Company and perform all duties incident to his office.
Section 5. There may be one or more Vice Presidents, however denominated by the Board of Directors, who may at any time perform all the duties of the Chairman of the Board of Directors and/or the President and such other powers and duties as may from time to time be assigned to them by the Board of Directors, the Executive Committee, the Chairman of the Board or the President and by the officer in charge of the department or division to which they are assigned.
Section 6. The Secretary shall attend to the giving of notice of meetings of the stockholders and the Board of Directors, as well as the Committees thereof, to the keeping of accurate minutes of all such meetings and to recording the same in the minute books of the Company. In addition to the other notice requirements of these By-Laws and as may be practicable under the circumstances, all such notices shall be in writing and mailed well in advance of the scheduled date of any other meeting. He shall have custody of the corporate seal and shall affix the same to any documents requiring such corporate seal and to attest the same.
Section 7. The Treasurer shall have general supervision over all assets and liabilities of the Company. He shall be custodian of and responsible for all monies, funds and valuables of the Company and for the keeping of proper records of the evidence of property or indebtedness and of all the transactions of the Company. He shall have general supervision of the expenditures of the Company and shall report to the Board of Directors at each regular meeting of the condition of the Company, and perform such other duties as may be assigned to him from time to time by the Board of Directors of the Executive Committee.
Section 8. There may be a Controller who shall exercise general supervision over the internal operations of the Company, including accounting, and shall render to the Board of Directors at appropriate times a report relating to the general condition and internal operations of the Company.
There may be one or more subordinate accounting or controller officers however denominated, who may perform the duties of the Controller and such duties as may be prescribed by the Controller.
Section 9. The officer designated by the Board of Directors to be in charge of the Audit Division of the Company with such title as the Board of Directors shall prescribe, shall report to and be directly responsible only to the Board of Directors.
There shall be an Auditor and there may be one or more Audit Officers, however denominated, who may perform all the duties of the Auditor and such duties as may be prescribed by the officer in charge of the Audit Division.
Section 10. There may be one or more officers, subordinate in rank to all Vice Presidents with such functional titles as shall be determined from time to time by the Board of Directors, who shall ex officio hold the office Assistant Secretary of this Company and who may perform such duties as may be prescribed by the officer in charge of the department or division to whom they are assigned.
Section 11. The powers and duties of all other officers of the Company shall be those usually pertaining to their respective offices, subject to the direction of the Board of Directors, the Executive Committee, Chairman of the Board of Directors or the President and the officer in charge of the department or division to which they are assigned.
ARTICLE V
STOCK AND STOCK CERTIFICATES
Section 1. Shares of stock shall be transferrable on the books of the Company and a transfer book shall be kept in which all transfers of stock shall be recorded.
Section 2. Certificate of stock shall bear the signature of the President or any Vice President, however denominated by the Board of Directors and countersigned by the Secretary or Treasurer or an Assistant Secretary, and the seal of the corporation shall be engraved thereon. Each certificate shall recite that the stock represented thereby is transferrable only upon the books of the Company by the holder thereof or his attorney, upon surrender of the certificate properly endorsed. Any certificate of stock surrendered to the Company shall be cancelled at the time of transfer, and before a new certificate or certificates shall be issued in lieu thereof. Duplicate certificates of stock shall be issued only upon giving such security as may be satisfactory to the Board of Directors or the Executive Committee.
Section 3. The Board of Directors of the Company is authorized to fix in advance a record date for the determination of the stockholders entitled to notice of, and to vote at, any meeting of stockholders and any adjournment thereof, or entitled to receive payment of
any dividend, or to any allotment or rights, or to exercise any rights in respect of any change, conversion or exchange of capital stock, or in connection with obtaining the consent of stockholders for any purpose, which record date shall not be more than 60 nor less than 10 days proceeding the date of any meeting of stockholders or the date for the payment of any dividend, or the date for the allotment of rights, or the date when any change or conversion or exchange of capital stock shall go into effect, or a date in connection with obtaining such consent.
ARTICLE VI
SEAL
Section 1. The corporate seal of the Company shall be in the following form:
Between two concentric circles the words "Wilmington Trust Company" within the inner circle the words "Wilmington, Delaware."
ARTICLE VII
FISCAL YEAR
Section 1. The fiscal year of the Company shall be the calendar year.
ARTICLE VIII
EXECUTION OF INSTRUMENTS OF THE COMPANY
Section 1. The Chairman of the Board, the President or any Vice President, however denominated by the Board of Directors, shall have full power and authority to enter into, make, sign, execute, acknowledge and/or deliver and the Secretary or any Assistant Secretary shall have full power and authority to attest and affix the corporate seal of the Company to any and all deeds, conveyances, assignments, releases, contracts, agreements, bonds, notes, mortgages and all other instruments incident to the business of this Company or in acting as executor, administrator, guardian, trustee, agent or in any other fiduciary or representative capacity by any and every method of appointment or by whatever person, corporation, court officer or authority in the State of Delaware, or elsewhere, without any specific authority, ratification, approval or confirmation by the Board of Directors or the Executive Committee, and any and all such instruments shall have the same force and validity as though expressly authorized by the Board of Directors and/or the Executive Committee.
ARTICLE IX
COMPENSATION OF DIRECTORS AND MEMBERS OF COMMITTEES
Section 1. Directors and associate directors of the Company, other than salaried officers of the Company, shall be paid such reasonable honoraria or fees for attending meetings of the Board of Directors as the Board of Directors may from time to time determine. Directors and associate directors who serve as members of committees, other than salaried employees of the Company, shall be paid such reasonable honoraria or fees for services as members of committees as the Board of Directors shall from time to time determine and directors and associate directors may be employed by the Company for such special services as the Board of Directors may from time to time determine and shall be paid for such special services so performed reasonable compensation as may be determined by the Board of Directors.
ARTICLE X
INDEMNIFICATION
Section 1. (A) The Corporation shall indemnify and hold harmless, to the fullest extent permitted by applicable law as it presently exists or may hereafter be amended, any person who was or is made or is threatened to be made a party or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a "proceeding") by reason of the fact that he, or a person for whom he is the legal representative, is or was a director, officer, employee or agent of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee, fiduciary or agent of another corporation or of a partnership, joint venture, trust, enterprise or non-profit entity, including service with respect to employee benefit plans, against all liability and loss suffered and expenses reasonably incurred by such person. The Corporation shall indemnify a person in connection with a proceeding initiated by such person only if the proceeding was authorized by the Board of Directors of the Corporation.
(B) The Corporation shall pay the expenses incurred in defending any proceeding in advance of its final disposition, provided, however, that the payment of expenses incurred by a Director officer in his capacity as a Director or officer in advance of the final disposition of the proceeding shall be made only upon receipt of an undertaking by the Director or officer to repay all amounts advanced if it should be ultimately determined that the Director or officer is not entitled to be indemnified under this Article or otherwise.
(C) If a claim for indemnification or payment of expenses, under this Article X is not paid in full within ninety days after a written claim therefor has been received by the Corporation the claimant may file suit to recover the unpaid amount of such claim and, if successful in whole or in part, shall be entitled to be paid the expense of prosecuting such claim. In any such action the Corporation shall have the burden of proving that the claimant was not entitled to the requested indemnification of payment of expenses
under applicable law.
(D) The rights conferred on any person by this Article X shall not be exclusive of any other rights which such person may have or hereafter acquire under any statute, provision of the Charter or Act of Incorporation, these By-Laws, agreement, vote of stockholders or disinterested Directors or otherwise.
(E) Any repeal or modification of the foregoing provisions of this Article X shall not adversely affect any right or protection hereunder of any person in respect of any act or omission occurring prior to the time of such repeal or modification.
ARTICLE XI
AMENDMENTS TO THE BY-LAWS
Section 1. These By-Laws may be altered, amended or repealed, in whole or in part, and any new By-Law or By-Laws adopted at any regular or special meeting of the Board of Directors by a vote of the majority of all the members of the Board of Directors then in office.
EXHIBIT C
SECTION 321(B) CONSENT
Pursuant to Section 321(b) of the Trust Indenture Act of 1939, as amended, Wilmington Trust Company hereby consents that reports of examinations by Federal, State, Territorial or District authorities may be furnished by such authorities to the Securities and Exchange Commission upon requests therefor.
WILMINGTON TRUST COMPANY
Dated: October 17, 1997 By: /s/ EMMETT R. HARMON
---------------------
Name: Emmett R. Harmon
Title: Vice President
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EXHIBIT D
NOTICE
This form is intended to assist state nonmember banks and savings banks with state publication requirements. It has not been approved by any state banking authorities. Refer to your appropriate state banking authorities for your state publication requirements.
R E P O R T O F C O N D I T I O N
Consolidating domestic subsidiaries of the
ASSETS
Thousands of dollars
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coins . . . . . . . . . . . . . . . . . . . . . . . . 208,942
Interest-bearing balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
Held-to-maturity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 403,700
Available-for-sale securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 905,200
Federal funds sold and securities purchased under agreements to resell . . . . . . . . . . . . . . . . . . . . 151,700
Loans and lease financing receivables:
Loans and leases, net of unearned income. . . . . . . 3,816,484
LESS: Allowance for loan and lease losses. . . . . . 54,535
LESS: Allocated transfer risk reserve. . . . . . . . 0
Loans and leases, net of unearned income, allowance, and reserve . . . . . . . . . . . . . . . . 3,761,949
Assets held in trading accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
Premises and fixed assets (including capitalized leases) . . . . . . . . . . . . . . . . . . . . . . . . . . 95,762
Other real estate owned . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,751
Investments in unconsolidated subsidiaries and associated companies . . . . . . . . . . . . . . . . . . . . . 42
Customers' liability to this bank on acceptances outstanding . . . . . . . . . . . . . . . . . . . . . . . . 0
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,572
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108,295
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,640,913
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LIABILITIES
Deposits:
In domestic offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,864,774
Noninterest-bearing . . . . . . . . 875,081
Interest-bearing. . . . . . . . . . 2,989,693
Federal funds purchased and Securities sold under agreements to repurchase . . . . . . . . . . . . . . . . . . 337,784
Demand notes issued to the U.S. Treasury . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95,000
Trading liabilities (from Schedule RC-D) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
Other borrowed money: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ///////
With original maturity of one year or less . . . . . . . . . . . . . . . . . . . . . . . . . . . . 775,000
With original maturity of more than one year . . . . . . . . . . . . . . . . . . . . . . . . . . . 43,000
Bank's liability on acceptances executed and outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
Subordinated notes and debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
Other liabilities (from Schedule RC-G) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84,197
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,199,755
EQUITY CAPITAL
Perpetual preferred stock and related surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 500
Surplus (exclude all surplus related to preferred stock) . . . . . . . . . . . . . . . . . . . . . . . . . . . 62,118
Undivided profits and capital reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 376,212
Net unrealized holding gains (losses) on available-for-sale securities . . . . . . . . . . . . . . . . . . . . (2,328)
Total equity capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 441,158
Total liabilities, limited-life preferred stock, and equity capital . . . . . . . . . . . . . . . . . . . . . 5,640,913
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EXHIBIT 99.1
GLOBAL MARINE INC.
LETTER OF TRANSMITTAL
FOR
TENDER OF ALL OUTSTANDING
7 1/8% NOTES DUE 2007
IN EXCHANGE FOR REGISTERED
7 1/8% NOTES DUE 2007
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME,
ON ____________, 1997, UNLESS EXTENDED (THE "EXPIRATION DATE")
OLD NOTES TENDERED IN THE EXCHANGE OFFER MAY BE WITHDRAWN
AT ANY TIME PRIOR TO 5:00 P.M., NEW YORK CITY TIME,
ON THE EXPIRATION DATE
DELIVER TO THE EXCHANGE AGENT:
WILMINGTON TRUST COMPANY
By Mail: By Facsimile Transmission: By Hand/Overnight Delivery:
Rodney Square North (for Eligible Institutions Only) Rodney Square North
1100 North Market Street (302) 651-1079 1100 North Market Street
Wilmington, Delaware 19890 Confirm by telephone: Wilmington, Delaware 19890
ATTN: CORPORATE TRUST OPERATIONS (302) 651-8869 ATTN: CORPORATE TRUST OPERATIONS
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DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN THE ONE LISTED ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
The undersigned hereby acknowledges receipt and review of the Prospectus dated _________, 1997 (the "Prospectus") of Global Marine Inc., a Delaware corporation (the "Company"), and this Letter of Transmittal (the "Letter of Transmittal"), which together constitute the Company's offer (the "Exchange Offer") to exchange its 7 1/8% Notes Due 2007 (the "Exchange Notes"), which have been registered under the Securities Act of 1933, as amended (the "Securities Act"), pursuant to a Registration Statement of which the Prospectus is a part, for a like principal amount of its issued and outstanding 7 1/8% Notes Due 2007 (the "Old Notes"). Capitalized terms used but not defined herein have the respective meaning given to them in the Prospectus.
The Company reserves the right, at any time or from time to time, to extend the Exchange Offer at its discretion, in which event the term "Expiration Date" shall mean the latest date to which the Exchange Offer is extended. The Company shall notify the Exchange Agent of any extension by oral or written notice and will make a public announcement thereof, each prior to 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date.
Registered Holders of Exchange Notes on the relevant record date for the first interest payment date following the consummation of the Exchange Offer will receive interest accruing from the most recent date to which interest has been paid on the Old Notes or, if no interest has been paid, from September 15, 1997. Old Notes accepted for exchange will cease to accrue interest from and after the date of consummation of the Exchange Offer. Holders whose Old Notes are accepted for exchange will not receive any payment in respect of accrued interest on such Old Notes otherwise payable on any interest payment date the record date for which occurs on or after consummation of the Exchange Offer.
This Letter of Transmittal is to be completed by a Holder of Old Notes either if certificates for such Old Notes are to be forwarded herewith or if a tender of Old Notes is to be made by book-entry transfer to the account maintained by Wilmington Trust Company (the "Exchange Agent") at The Depository Trust Company (the "Book-Entry Transfer Facility" or "DTC") pursuant to the procedures set forth in "The Exchange Offer -- Book-Entry Transfer" section of the Prospectus and an Agent's Message is not delivered. Tenders by book-entry transfer may also be made by delivering an Agent's Message in lieu of this Letter of Transmittal. The term "Agent's Message" means a message, transmitted by the Book-Entry Transfer Facility to and received by the Exchange Agent and forming a part of a Book-Entry Confirmation (as defined below), which states that the Book-Entry Transfer Facility has received an express acknowledgment from the tendering participant, which acknowledgment states that such participant has received and agrees to be bound by the Letter of Transmittal and that the Company may enforce the Letter of Transmittal against such participant. Holders of Old Notes whose certificates for such Old Notes are not immediately available, or who are unable to deliver their certificates or confirmation of the book-entry tender of their Old Notes into the Exchange Agent's account at the Book-Entry Transfer Facility (a "Book-Entry Confirmation") and all other documents required by this Letter of Transmittal to the Exchange Agent on or prior to the Expiration Date, must tender their Old Notes according to the guaranteed delivery procedures set forth in "The Exchange Offer -- Guaranteed Delivery Procedures" section of the Prospectus. See Instruction 1.
DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY
DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
The term "Holder" with respect to the Exchange Offer means any person in whose name Old Notes are registered on the books of the Company or any other person who has obtained a properly completed bond power from the registered holder. The undersigned has completed, executed and delivered this Letter of Transmittal to indicate the action the undersigned desires to take with respect to the Exchange Offer. Holders who wish to tender their Old Notes must complete this Letter of Transmittal in its entirety.
PLEASE READ THE ENTIRE LETTER OF TRANSMITTAL AND THE PROSPECTUS
CAREFULLY BEFORE CHECKING ANY BOX BELOW.
THE INSTRUCTIONS INCLUDED WITH THIS LETTER OF TRANSMITTAL MUST BE FOLLOWED. QUESTIONS AND REQUESTS FOR ASSISTANCE OR FOR ADDITIONAL COPIES OF THE PROSPECTUS AND THIS LETTER OF TRANSMITTAL MAY BE DIRECTED TO THE EXCHANGE AGENT.
List below the Old Notes to which this Letter of Transmittal relates. If the space below is inadequate, list the registered numbers and principal amounts on a separate signed schedule and affix the list to this Letter of Transmittal.
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DESCRIPTION OF OLD NOTES TENDERED
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Name(s) and Address(es) of Registered Old Note(s) Tendered
Holder(s) Exactly as Name(s) ---------------------------------------------------------
Appear(s) on Old Notes Aggregate Principal Principal
(Please Fill In, If Blank) Registered Amount Represented Amount
Number(s)* by Note(s) Tendered**
-----------------------------------------------------------------------------------------------------------
---------------------------------------------------------
---------------------------------------------------------
Total
---------------------------------------------------------
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* Need not be completed by book-entry holders. ** Unless otherwise indicated, any tendering holder of Old Notes will be deemed to have tendered the entire aggregate principal amount represented by such Old Notes. All tenders must be in integral multiples of $1,000.
[ ] CHECK HERE IF TENDERED OLD NOTES ARE ENCLOSED HEREWITH.
[ ] CHECK HERE AND COMPLETE THE FOLLOWING IF TENDERED OLD NOTES ARE BEING
DELIVERED BY BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE
EXCHANGE AGENT WITH THE BOOK-ENTRY TRANSFER FACILITY (FOR USE BY
ELIGIBLE INSTITUTIONS (AS HEREINAFTER DEFINED) ONLY):
[ ] CHECK HERE AND COMPLETE THE FOLLOWING IF TENDERED OLD NOTES ARE BEING
DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY ENCLOSED
HEREWITH (FOR USE BY ELIGIBLE INSTITUTIONS ONLY):
[ ] CHECK HERE IF TENDERED BY BOOK-ENTRY TRANSFER AND NON-EXCHANGED OLD
NOTES ARE TO BE RETURNED BY CREDITING THE DTC ACCOUNT NUMBER SET FORTH
ABOVE (FOR USE BY ELIGIBLE INSTITUTIONS ONLY).
[ ] CHECK HERE AND COMPLETE THE FOLLOWING IF YOU ARE A BROKER-DEALER AND
WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES
OF ANY AMENDMENTS OR SUPPLEMENTS THERETO:
SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
Subject to the terms and conditions of the Exchange Offer, the undersigned hereby tenders to the Company for exchange the principal amount of Old Notes indicated above. Subject to and effective upon the acceptance for exchange of the principal amount of Old Notes tendered in accordance with this Letter of Transmittal, the undersigned hereby exchanges, assigns and transfers to, or upon the order of, the Company all right, title and interest in and to the Old Notes tendered for exchange hereby, including all rights to accrued and unpaid interest thereon as of the Expiration Date. The undersigned hereby irrevocably constitutes and appoints the Exchange Agent the true and lawful agent and attorney-in-fact for the undersigned (with full knowledge that said Exchange Agent also acts as the agent for the Company in connection with the Exchange Offer) with respect to the tendered Old Notes with full power of substitution to (i) deliver such Old Notes, or transfer ownership of such Old Notes on the account books maintained by the Book-Entry Transfer Facility, to the Company and deliver all accompanying evidences of transfer and authenticity, and (ii) present such Old Notes for transfer on the books of the Company and receive all benefits and otherwise exercise all rights of beneficial ownership of such Old Notes, all in accordance with the terms of the Exchange Offer. The power of attorney granted in this paragraph shall be deemed to be irrevocable and coupled with an interest.
The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, exchange, assign and transfer the Old Notes tendered hereby and to acquire the Exchange Notes issuable upon the exchange of such tendered Old Notes, and that the Company will acquire good and unencumbered title thereto, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claim, when the same are accepted for exchange by the Company. The undersigned hereby further represents that it is not an "affiliate," as defined in Rule 405 under the Securities Act of 1933, as amended (the "Securities Act"), of the Company, that any Exchange Notes to be received by it will be acquired in the ordinary course of business and that at the time of the commencement of the Exchange Offer it had no arrangement with any person to participate in a distribution of the Exchange Notes.
The undersigned also acknowledges that the Exchange Offer is being made in reliance on interpretations by the staff of the Securities and Exchange Commission (the "SEC"), as set forth in no-action letters issued to third parties, including Exxon Capital Holdings Corporation (available May 13, 1988), Morgan Stanley & Co. Incorporated (available June 5, 1991), Sherman & Sterling (available July 2, 1993) and similar no-action letters (the "Prior No-Action Letters"), that the Exchange Notes issued pursuant to the Exchange Offer in exchange for the Old Notes may be offered for resale, resold and otherwise transferred by Holders thereof (other than any such Holder which is an "affiliate" of the Company within the meaning of Rule 405 under the Securities Act), without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that such Exchange Notes are acquired in the ordinary course of such Holders' business and such Holders have no arrangement with any person to participate in a distribution of such Exchange Notes. However, the SEC has not considered the Exchange Offer in the context of a no-action letter and there can be no assurance that the staff of the SEC would make a similar determination with respect to the Exchange Offer as in other circumstances. If the undersigned is not a broker-dealer, the undersigned represents that it is not engaged in, and does not intend to engage in, a distribution of Exchange Notes. If the undersigned is a broker-dealer that is receiving the Exchange Notes for its own account in exchange for Old Notes that were acquired as a result of market-making activities or other trading activities, it acknowledges that it will deliver a prospectus in connection with any resale of such Exchange Notes; however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. The undersigned and any such other person acknowledge that, if they are participating in the Exchange Offer for the purpose of distributing the Exchange Notes, they cannot rely on the position of the staff of the SEC enunciated in the Prior No-Action Letters and, in the absence of an exemption therefrom, must comply with the registration and prospectus delivery requirements of the Securities Act in connection with the resale transaction. If the undersigned or the person receiving the Exchange Notes covered by this letter is an "affiliate" (as defined under Rule 405 of the Securities Act) of the Company, the
undersigned represents to the Company that the undersigned understands and acknowledges that neither the undersigned nor any such other person may rely on the position of the staff of the SEC enunciated in the Prior No-Action Letters, and that such Exchange Notes may not be offered for resale, resold or otherwise transferred by the undersigned or such other person without registration under the Securities Act or an exemption therefrom.
The undersigned will, upon request, execute and deliver any additional documents deemed by the Exchange Agent or the Company to be necessary or desirable to complete the exchange, assignment and transfer of the Old Notes tendered hereby, including the transfer of such Old Notes on the account books maintained by the Book-Entry Transfer Facility.
For purposes of the Exchange Offer, the Company shall be deemed to have accepted for exchange validly tendered Old Notes when, as and if the Company gives oral or written notice thereof to the Exchange Agent. Any tendered Old Notes that are not accepted for exchange pursuant to the Exchange Offer for any reason will be returned, without expense, to the undersigned at the address shown below or at a different address as may be indicated herein under "Special Delivery Instructions" as promptly as practicable after the Expiration Date.
All authority conferred or agreed to be conferred by this Letter of Transmittal shall survive the death, incapacity or dissolution of the undersigned, and every obligation of the undersigned under this Letter of Transmittal shall be binding upon the successors, assigns, heirs, executors, administrators, trustees in bankruptcy and legal representatives of the undersigned and shall not be affected by, and shall survive, the death or incapacity of the undersigned. This tender may be withdrawn only in accordance with the procedures set forth in "The Exchange Offer -- Withdrawal Rights" section of the Prospectus.
The undersigned acknowledges that the Company's acceptance of properly tendered Old Notes pursuant to the procedures described under the caption "The Exchange Offer -- Procedures for Tendering" in the Prospectus and in the instructions hereto will constitute a binding agreement between the undersigned and the Company upon the terms and subject to the conditions of the Exchange Offer. The undersigned further agrees that acceptance of any tendered Old Notes by the Company and the issuance of Exchange Notes in exchange therefor shall constitute performance in full by the Company of its obligations under the Registration Agreement and that the Company shall have no further obligations or liabilities thereunder for the registration of the Old Notes or the Exchange Notes.
Unless otherwise indicated under "Special Issuance Instructions," please issue the Exchange Notes issued in exchange for the Old Notes accepted for exchange and return any Old Notes not tendered or not exchanged, in the name(s) of the undersigned. Similarly, unless otherwise indicated under "Special Delivery Instructions," please mail or deliver the Exchange Notes issued in exchange for the Old Notes accepted for exchange and any Old Notes not tendered or not exchanged (and accompanying documents, as appropriate) to the undersigned at the address shown below the undersigned's signature(s). In the event that both "Special Issuance Instructions" and "Special Delivery Instructions" are completed, please issue the Exchange Notes issued in exchange for the Old Notes accepted for exchange in the name(s) of, and return any Old Notes not tendered or not exchanged to, the person(s) so indicated. The undersigned recognizes that the Company has no obligation pursuant to the "Special Issuance Instructions" and "Special Delivery Instructions" to transfer any Old Notes from the name of the registered holder(s) thereof if the Company does not accept for exchange any of the Old Notes so tendered for exchange.
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SPECIAL ISSUANCE INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTION 6) (SEE INSTRUCTION 6)
To be completed ONLY (i) if Old Notes in a To be completed ONLY if Old Notes in a principal
principal amount not tendered, or Exchange Notes amount not tendered, or Exchange Notes issued, in
issued in exchange for Old Notes accepted for exchange for Old Notes accepted for exchange, are
exchange, are to be issued in the name of someone to be mailed or delivered to someone other than the
other than the undersigned, or (ii) if Old Notes undersigned, or to the undersigned at an address
tendered by book-entry transfer which are not other than that shown below the undersigned's
exchanged are to be returned by credit to an signature.
account maintained at the Book-Entry Transfer
Facility other than the DTC Account Number set
forth above. Issue Exchange Notes and/or Old Mail or deliver Exchange Notes and/or Old Notes to:
Notes to:
Name: Name:
---------------------------------------------- ----------------------------------------------
Address: Address:
------------------------------------------- -------------------------------------------
--------------------------------------------------- ---------------------------------------------------
(include Zip Code) (include Zip Code)
--------------------------------------------------- ---------------------------------------------------
(Tax Identification or Social Security Number) (Tax Identification or Social Security Number)
(Please Type or Print) (Please Type or Print)
---------------------------------------------------- ---------------------------------------------------
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[ ] Credit unexchanged Old Notes delivered by book-entry transfer to the Book-Entry Transfer Facility set forth below:
Book-Entry Transfer Facility Account Number:
IMPORTANT
PLEASE SIGN HERE WHETHER OR NOT
OLD NOTES ARE BEING PHYSICALLY TENDERED HEREBY
(Complete Accompanying Substitute Form W-9 Below)
(The above lines must be signed by the registered holder(s) of Old Notes as your name(s) appear(s) on the Old Notes or on a security position listing, or by person(s) authorized to become registered holder(s) by a properly completed bond power from the registered holder(s), a copy of which must be transmitted with this Letter of Transmittal. If Old Notes to which this Letter of Transmittal relate are held of record by two or more joint holders, then all such holders must sign this Letter of Transmittal. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, then such person must (i) set forth his or her full title below and (ii) unless waived by the Company, submit evidence satisfactory to the Company of such person's authority so to act. See Instruction 5 regarding the completion of this Letter of Transmittal, printed below.)
Certain signatures must be Guaranteed by an Eligible Institution.
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND OLD NOTES OR BOOK-ENTRY CONFIRMATIONS. All physically delivered Old Notes or any Book-Entry Confirmation, as well as a properly completed and duly executed copy of this Letter of Transmittal or facsimile hereof, and any other documents required by this Letter of Transmittal, must be received by the Exchange Agent at its address set forth herein prior to 5:00 p.m., New York City time, on the Expiration Date. THE METHOD OF DELIVERY OF THE TENDERED OLD NOTES, THIS LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE ELECTION AND RISK OF THE HOLDER AND, EXCEPT AS OTHERWISE PROVIDED BELOW, THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED OR CONFIRMED BY THE EXCHANGE AGENT. INSTEAD OF DELIVERY BY MAIL, IT IS RECOMMENDED THAT THE HOLDER USE AN OVERNIGHT OR HAND DELIVERY SERVICE. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE DELIVERY TO THE EXCHANGE AGENT BEFORE THE EXPIRATION DATE. NO LETTER OF TRANSMITTAL OR OLD NOTES SHOULD BE SENT TO THE COMPANY.
2. GUARANTEED DELIVERY PROCEDURES. Holders who wish to tender their Old Notes and whose Old Notes are not immediately available or who cannot deliver their Old Notes, this Letter of Transmittal or any other documents required hereby to the Exchange Agent prior to the Expiration Date or who cannot complete the procedure for book-entry transfer on a timely basis, must tender their Old Notes according to the guaranteed delivery procedures set forth in the Prospectus. Pursuant to such procedures: (i) such tender must be made by or through a firm which is a member of a registered national securities exchange or of the National Association of Securities Dealers, Inc., a commercial bank or a trust company having an office or correspondent in the United States or an "eligible guarantor institution" within the meaning of Rule 17Ad-15 under the Exchange Act (an "Eligible Institution"); (ii) prior to the Expiration Date, the Exchange Agent must have received from the Eligible Institution a properly completed and duly executed Notice of Guaranteed Delivery (by facsimile transmission, mail or hand delivery) setting forth the name and address of the holder of the Old Notes, the registration number(s) of such Old Notes and the total principal amount of Old Notes tendered, stating that the tender is being made thereby and guaranteeing that, within five business days after the Expiration Date, this Letter of Transmittal (or facsimile hereof) together with the Old Notes in proper form for transfer (or a Book-Entry Confirmation) and any other documents required hereby, will be deposited by the Eligible Institution with the Exchange Agent; and (iii) the certificates for all physically tendered shares of Old Notes, in proper form for transfer (or Book-Entry Confirmation, as the case may be) and all other documents required hereby are received by the Exchange Agent within five business days after the Expiration Date.
Any holder of Old Notes who wishes to tender Old Notes pursuant to the guaranteed delivery procedures described above must ensure that the Exchange Agent receives the Notice of Guaranteed Delivery prior to 5:00 p.m., New York City time, on the Expiration Date. Upon request of the Exchange Agent, a Notice of Guaranteed Delivery will be sent to holders who wish to tender their Old Notes according to the guaranteed delivery procedures set forth above.
See "The Exchange Offer -- Guaranteed Delivery Procedures" section of the Prospectus.
3. TENDER BY HOLDER. Only a holder of Old Notes may tender such Old Notes in the Exchange Offer. Any beneficial holder of Old Notes who is not the registered holder and who wishes to tender should arrange with the registered holder to execute and deliver this Letter of Transmittal on his behalf or must, prior to completing and executing this Letter of Transmittal and delivering his Old Notes, either make appropriate arrangements to register ownership of the Old Notes in such holder's name or obtain a properly completed bond power from the registered holder.
4. PARTIAL TENDERS. Tenders of Old Notes will be accepted only in integral multiples of $1,000. If less than the entire principal amount of any Old Notes is tendered, the tendering holder should fill in the principal amount tendered in the third column of the box entitled "Description of Old Notes Tendered" above. The entire principal
amount of Old Notes delivered to the Exchange Agent will be deemed to have been tendered unless otherwise indicated. If the entire principal amount of all Old Notes is not tendered, then Old Notes for the principal amount of Old Notes not tendered and Exchange Notes issued in exchange for any Old Notes accepted will be sent to the holder at his or her registered address, unless a different address is provided in the appropriate box on this Letter of Transmittal, promptly after the Old Notes are accepted for exchange.
5. SIGNATURES ON THIS LETTER OF TRANSMITTAL; BOND POWERS AND ENDORSEMENTS; MEDALLION GUARANTEE OF SIGNATURES. If this Letter of Transmittal (or facsimile hereof) is signed by the record holder(s) of the Old Notes tendered hereby, the signature must correspond with the name(s) as written on the face of the Old Notes without alteration, enlargement or any change whatsoever. If this Letter of Transmittal (or facsimile hereof) is signed by a participant in the Book-Entry Transfer Facility, the signature must correspond with the name as it appears on the security position listing as the holder of the Old Notes.
If this Letter of Transmittal (or facsimile hereof) is signed by the registered holder or holders of Old Notes listed and tendered hereby and the Exchange Notes issued in exchange therefor are to be issued (or any untendered principal amount of Old Notes is to be reissued) to the registered holder, the said holder need not and should not endorse any tendered Old Notes, nor provide a separate bond power. In any other case, such holder must either properly endorse the Old Notes tendered or transmit a properly completed separate bond power with this Letter of Transmittal, with the signatures on the endorsement or bond power guaranteed by an Eligible Institution.
If this Letter of Transmittal (or facsimile hereof) is signed by a person other than the registered holder or holders of any Old Notes listed, such Old Notes must be endorsed or accompanied by appropriate bond powers, in each case signed as the name of the registered holder or holders appears on the Old Notes.
If this Letter of Transmittal (or facsimile hereof) or any Old Notes or bond powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and, unless waived by the Company, evidence satisfactory to the Company of their authority to act must be submitted with this Letter of Transmittal.
Endorsements on Old Notes or signatures on bond powers required by this Instruction 5 must be guaranteed by an Eligible Institution.
NO SIGNATURE GUARANTEE IS REQUIRED IF (I) THIS LETTER OF TRANSMITTAL (OR FACSIMILE HEREOF) IS SIGNED BY THE REGISTERED HOLDER(S) OF THE OLD NOTES TENDERED HEREIN (OR BY A PARTICIPANT IN THE BOOK-ENTRY TRANSFER FACILITY WHOSE NAME APPEARS ON A SECURITY POSITION LISTING AS THE OWNER OF THE TENDERED OLD NOTES) AND THE EXCHANGE NOTES ARE TO BE ISSUED DIRECTLY TO SUCH REGISTERED HOLDER(S) (OR, IF SIGNED BY A PARTICIPANT IN THE BOOK-ENTRY TRANSFER FACILITY, DEPOSITED TO SUCH PARTICIPANT'S ACCOUNT AT SUCH BOOK-ENTRY TRANSFER FACILITY) AND NEITHER THE BOX ENTITLED "SPECIAL DELIVERY INSTRUCTIONS" NOR THE BOX ENTITLED "SPECIAL REGISTRATION INSTRUCTIONS" HAS BEEN COMPLETED, OR (II) SUCH OLD NOTES ARE TENDERED FOR THE ACCOUNT OF AN ELIGIBLE INSTITUTION. IN ALL OTHER CASES, ALL SIGNATURES ON THIS LETTER OF TRANSMITTAL (OR FACSIMILE HEREOF) MUST BE GUARANTEED BY AN ELIGIBLE INSTITUTION.
6. SPECIAL REGISTRATION AND DELIVERY INSTRUCTIONS. Tendering holders should indicate, in the applicable box or boxes, the name and address (or account at the Book-Entry Transfer Facility) to which Exchange Notes or substitute Old Notes for principal amounts not tendered or not accepted for exchange are to be issued or sent, if different from the name and address of the person signing this Letter of Transmittal. In the case of issuance in a different name, the taxpayer identification or social security number of the person named must also be indicated.
7. TRANSFER TAXES. The Company will pay all transfer taxes, if any, applicable to the exchange of Old Notes pursuant to the Exchange Offer. If, however, Exchange Notes or Old Notes for principal amounts not tendered or accepted for exchange are to be delivered to, or are to be registered or issued in the name of, any person other than the registered holder of the Old Notes tendered hereby, or if tendered Old Notes are registered in the name of any person
other than the person signing this Letter of Transmittal, or if a transfer tax is imposed for any reason other than the exchange of Old Notes pursuant to the Exchange Offer, then the amount of any such transfer taxes (whether imposed on the registered holder or any other persons) will be payable by the tendering holder. If satisfactory evidence of payment of such taxes or exemption therefrom is not submitted with this Letter of Transmittal, the amount of such transfer taxes will be billed directly to such tendering holder.
8. TAX IDENTIFICATION NUMBER. Federal income tax law requires that a holder of any Old Notes or Exchange Notes must provide the Company (as payor) with its correct taxpayer identification number ("TIN"), which, in the case of a holder who is an individual is his or her social security number. If the Company is not provided with the correct TIN, the holder may be subject to a $50 penalty imposed by Internal Revenue Service and backup withholding of 31% on interest payments on the Exchange Notes.
To prevent backup withholding, each tendering holder must provide such holder's correct TIN by completing the Substitute Form W-9 set forth herein, certifying that the TIN provided is correct (or that such holder is awaiting a TIN), and that (i) the holder has not been notified by the Internal Revenue Service that such holder is subject to backup withholding as a result of failure to report all interest or dividends or (ii) the Internal Revenue Service has notified the holder that such holder is no longer subject to backup withholding. If the Exchange Notes will be registered in more than one name or will not be in the name of the actual owner, consult the instructions on Internal Revenue Service Form W-9, which may be obtained from the Exchange Agent, for information on which TIN to report.
Certain foreign individuals and entities will not be subject to backup withholding or information reporting if they submit a Form W-8, signed under penalties of perjury, attesting to their foreign status. A Form W-8 can be obtained from the Exchange Agent.
The Company reserves the right in its sole discretion to take whatever steps are necessary to comply with the Company's obligations regarding backup withholding.
9. VALIDITY OF TENDERS. All questions as to the validity, form, eligibility (including time of receipt), acceptance and withdrawal of tendered Old Notes will be determined by the Company in its sole discretion, which determination will be final and binding. The Company reserves the absolute right to reject any and all Old Notes not properly tendered or any Old Notes the Company's acceptance of which would, in the opinion of the Company or its counsel, be unlawful. The Company also reserves the absolute right to waive any conditions of the Exchange Offer or defects or irregularities in tenders as to particular Old Notes. The Company's interpretation of the terms and conditions of the Exchange Offer (including this Letter of Transmittal and the instructions hereto) shall be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of Old Notes must be cured within such time as the Company shall determine. Neither the Company, the Exchange Agent nor any person shall be under any duty to give notification of defects or irregularities with regard to tenders of Old Notes nor shall any of them incur any liability for failure to give such notification.
10. WAIVER OF CONDITIONS. The Company reserves the absolute right to waive, in whole or part, any of the conditions to the Exchange Offer set forth in the Prospectus.
11. NO CONDITIONAL TENDER. No alternative, conditional, irregular or contingent tender of Old Notes on transmittal of this Letter of Transmittal will be accepted.
12. MUTILATED, LOST, STOLEN OR DESTROYED OLD NOTES. Any holder whose Old Notes have been mutilated, lost, stolen or destroyed should contact the Exchange Agent at the address indicated above for further instructions.
13. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Requests for assistance or for additional copies of the Prospectus or this Letter of Transmittal may be directed to the Exchange Agent at the address or telephone number
set forth on the cover page of this Letter of Transmittal. Holders may also contact their broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Exchange Offer.
14. WITHDRAWAL. Tenders may be withdrawn only pursuant to the limited withdrawal rights set forth in the Prospectus under the caption "The Exchange Offer -- Withdrawal Rights."
IMPORTANT: THIS LETTER OF TRANSMITTAL OR A MANUALLY SIGNED FACSIMILE HEREOF (TOGETHER WITH THE OLD NOTES DELIVERED BY BOOK-ENTRY TRANSFER OR IN ORIGINAL HARD COPY FORM) MUST BE RECEIVED BY THE EXCHANGE AGENT, OR THE NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE EXCHANGE AGENT, PRIOR TO THE EXPIRATION DATE.
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SUBSTITUTE PART 1 -- PLEASE PROVIDE YOUR TIN IN THE BOX -------------------------------
FORM W-9 AT RIGHT AND CERTIFY BY SIGNING AND DATING SOCIAL SECURITY NUMBER
BELOW OR
-------------------------------
EMPLOYER IDENTIFICATION NUMBER
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PART 2 -- CERTIFICATION -- UNDER PENALTIES OF PART 3 --
PERJURY, I CERTIFY THAT:
(1) THE NUMBER SHOWN ON THIS FORM IS MY AWAITING TIN [ ]
CORRECT TAXPAYER IDENTIFICATION
NUMBER (OR I HAVE CHECKED THE BOX IN
PART 3 AND EXECUTED THE CERTIFICATE
OF AWAITING TAXPAYER IDENTIFICATION
NUMBER BELOW) AND
(2) I AM NOT SUBJECT TO BACK WITHHOLDING PLEASE COMPLETE THE CERTIFICATE OF
------------------------------------- EITHER BECAUSE I HAVE NOT BEEN AWAITING TAXPAYER IDENTIFICATION
NAME NOTIFIED BY THE INTERNAL REVENUE NUMBER BELOW.
SERVICE ("IRS") THAT I AM SUBJECT TO
------------------------------------- BACKUP WITHHOLDING AS A RESULT OF
ADDRESS (NUMBER AND STREET) FAILURE TO REPORT ALL INTEREST OR
DIVIDENDS, OR THE IRS HAS NOTIFIED ME
------------------------------------- THAT I AM NO LONGER SUBJECT TO BACKUP
CITY, STATE AND ZIP CODE WITHHOLDING.
-----------------------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE
PAYOR'S REQUEST FOR TAXPAYER CERTIFICATE INSTRUCTIONS -- YOU MUST CROSS OUT ITEM (2) IN PART 2 ABOVE IF YOU HAVE
IDENTIFICATION NUMBER (TIN) BEEN NOTIFIED BY THE IRS THAT YOU ARE SUBJECT TO BACKUP WITHHOLDING BECAUSE OF
UNDERREPORTING INTEREST OR DIVIDENDS ON YOUR TAX RETURN. HOWEVER, IF AFTER BEING
NOTIFIED BY THE IRS THAT YOU ARE SUBJECT TO BACKUP WITHHOLDING YOU RECEIVED ANOTHER
NOTIFICATION FROM THE IRS STATING THAT YOU ARE NO LONGER SUBJECT TO BACKUP
WITHHOLDING, DO NOT CROSS OUT ITEM (2).
SIGNATURE_________________________________ DATE ________________________, 1997
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NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU WITH RESPECT TO THE EXCHANGE NOTES.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED
THE BOX IN PART 3 OF THE SUBSTITUTE FORM W-9
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I CERTIFY UNDER PENALTIES OF PERJURY THAT A TAXPAYER IDENTIFICATION NUMBER HAS NOT BEEN ISSUED TO ME, AND EITHER (A) I HAVE MAILED OR DELIVERED AN APPLICATION TO RECEIVE A TAXPAYER IDENTIFICATION NUMBER TO THE APPROPRIATE INTERNAL REVENUE SERVICE CENTER OR SOCIAL SECURITY ADMINISTRATION OFFICE OR (B) I INTEND TO MAIL OR DELIVER AN APPLICATION IN THE NEAR FUTURE. I UNDERSTAND THAT IF I DO NOT PROVIDE A TAXPAYER IDENTIFICATION NUMBER TO THE PAYOR WITHIN 60 DAYS, 31% OF ALL REPORTABLE PAYMENTS MADE TO ME THEREAFTER WILL BE WITHHELD UNTIL I PROVIDE A NUMBER.
, 1997
--------------------------------- ---------------------------
SIGNATURE DATE
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EXHIBIT 99.2
GLOBAL MARINE INC.
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF
7 1/8% NOTES DUE 2007
IN EXCHANGE FOR REGISTERED
7 1/8% NOTES DUE 2007
This form, or one substantially equivalent hereto, must be used by a holder of the 7 1/8% Notes Due 2007 (the "Old Notes") of Global Marine Inc., a Delaware corporation (the "Company"), who wishes to tender the Old Notes pursuant to the guaranteed delivery procedures described in "The Exchange Offer -- Guaranteed Delivery Procedures" of the Company's Prospectus, dated , 1997 (the "Prospectus"), relating to the Exchange Offer and in Instruction 2 to the related Letter of Transmittal. Any holder who wishes to tender Old Notes pursuant to such guaranteed delivery procedures must ensure that Wilmington Trust Company, as exchange agent (the "Exchange Agent"), receives this Notice of Guaranteed Delivery prior to 5:00 p.m., New York City time, on , 1997, unless extended (the "Expiration Date"). This form, properly completed and executed, may be delivered by telegram, telex, facsimile transmission, mail or hand delivery to the Exchange Agent. In addition, to use the guaranteed delivery procedures to tender Old Notes pursuant to the Exchange Offer, tender must be made through an Eligible Institution and a properly completed and duly executed Notice of Guaranteed Delivery must be received prior to the Expiration Date. Thereafter, the certificates for all physically tendered Old Notes, in proper form for transfer, or a Book-Entry Confirmation, as the case may be, together with a properly completed and duly executed Letter of Transmittal (or facsimile thereof or Agent's Message in lieu thereof) with any required signature guarantees, and any other documents required by the Letter of Transmittal, must be deposited by the Eligible Institution with the Exchange Agent within three New York Stock Exchange trading days after the date of execution of the Notice of Guaranteed Delivery. Capitalized terms used but not defined herein have the meanings ascribed to them in the Prospectus or the Letter of Transmittal.
To Wilmington Trust Company
By Mail or Hand/Overnight Delivery: By Facsimile Transmission:
Rodney Square North (for Eligible Institutions only)
1100 North Market Street (302) 651-1079
Wilmington, Delaware 19890 Confirm by telephone:
Attn: Corporate Trust Operations (302) 651-8869
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DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TO A NUMBER OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.
This Notice of Guaranteed Delivery is not to be used to guarantee signatures. If a signature on a Letter of Transmittal is required to be guaranteed by an Eligible Institution under the instructions thereto, such signature guarantee must appear in the applicable space in the box provided on the Letter of Transmittal for guarantee of signatures.
Ladies and Gentlemen:
The undersigned hereby tenders to the Company, in accordance with the Company's offer, upon the terms and subject to the conditions set forth in the Prospectus and the related Letter of Transmittal, receipt of which is hereby acknowledged, the principal amount of Old Notes set forth below pursuant to the guaranteed delivery procedures set forth in the Prospectus and in Instruction 2 of the Letter of Transmittal.
All authority herein conferred or agreed to be conferred shall survive the death or incapacity of the undersigned and every obligation of the undersigned hereunder shall be binding upon the heirs, personal representatives, successors and assigns of the undersigned.
THIS NOTICE OF GUARANTEED DELIVERY MUST BE SIGNED BY THE HOLDER(S) OF OLD NOTES EXACTLY AS THE NAME(S) OF SUCH PERSON(S) APPEAR(S) ON CERTIFICATES OR BOOK-ENTRY ACCOUNTS FOR OLD NOTES OR ON A SECURITY POSITION LISTING AS THE OWNER OF OLD NOTES, OR BY PERSON(S) AUTHORIZED TO BECOME HOLDER(S) BY ENDORSEMENTS AND DOCUMENTS TRANSMITTED WITH THIS NOTICE OF GUARANTEED DELIVERY. IF SIGNATURE IS BY A TRUSTEE, EXECUTOR, ADMINISTRATOR, GUARDIAN, ATTORNEY-IN-FACT, OFFICER OR OTHER PERSON ACTING IN A FIDUCIARY OR REPRESENTATIVE CAPACITY, SUCH PERSON MUST PROVIDE THE FOLLOWING INFORMATION.
PLEASE PRINT NAME(S) AND ADDRESS(ES)
Name(s):
Capacity:
Address(es):
[ ] The Depository Trust Company
(Check if Old Notes will be tendered by book-entry transfer)
THE GUARANTEE ON THE FOLLOWING PAGE MUST BE COMPLETED
GUARANTEE
(Not to be used for signature guarantee)
The undersigned, a firm that is a member of a registered national securities exchange or of the National Association of Securities Dealers, Inc., or is a commercial bank or trust company having an office or correspondent in the United States, or is otherwise an "eligible guarantor institution" within the meaning of Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended, hereby guarantees deposit with the Exchange Agent of the Letter of Transmittal (or facsimile thereof), together with the Old Notes tendered hereby in proper form for transfer (or confirmation of the book-entry transfer of such Old Notes into the Exchange Agent's account at the Book-Entry Transfer Facility described in the Prospectus under the caption "The Exchange Offer -- Book-Entry Transfer" and in the Letter of Transmittal) and any other required documents, all by 5:00 p.m., New York City time, within three New York Stock Exchange trading days after the date of execution of this Notice of Guaranteed Delivery.
Name of Firm:
-------------------- --------------------------------
(AUTHORIZED SIGNATURE)
Address:
-------------------------
(INCLUDE ZIP CODE) Name:
--------------------------
Area Code and Tel. Number: Title:
-------------------------
---------------------------------- (PLEASE TYPE OR PRINT)
Date: , 1997
--------------------
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DO NOT SEND CERTIFICATES FOR OLD NOTES WITH THIS FORM. ACTUAL SURRENDER OF OLD NOTES MUST BE MADE PURSUANT TO, AND BE ACCOMPANIED BY, A PROPERLY COMPLETED AND DULY EXECUTED LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS.