<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 20, 1998
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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GULFMARK OFFSHORE, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 4499 76-0526032
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code No.) Identification No.)
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5 POST OAK PARK, SUITE 1170
HOUSTON, TEXAS 77027
(713) 963-9522
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
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FRANK R. PIERCE
EXECUTIVE VICE PRESIDENT
GULFMARK OFFSHORE, INC.
5 POST OAK PARK, SUITE 1170
HOUSTON, TEXAS 77027
(713) 963-9522
(Address, including zip code, and telephone number, including area code, of
agent for service)
Copies to:
W. GARNEY GRIGGS, ESQ.
GRIGGS & HARRISON, P.C.
1301 MCKINNEY, SUITE 3200
HOUSTON, TEXAS 77010-3033
(713) 651-0600
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date 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
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<S> <C> <C> <C> <C>
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PROPOSED PROPOSED
MAXIMUM MAXIMUM
AMOUNT OFFERING AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF TO BE PRICE PER OFFERING REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED UNIT(1) PRICE(2) FEE
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8 3/4% Senior Notes due 2008...... $130,000,000 98% $127,400,000 $37,583
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(1) Pursuant to Rule 457(f) under the Securities Act of 1933, the registration
fee has been calculated based on the average of the bid price of 97.75% and
the ask price of 98.25% in the PORTAL market on July 14, 1998, of the 8 3/4%
Senior Notes due 2008 of the Company for which the securities registered
hereby will be exchanged.
(2) Estimated solely for the purpose of calculating the registration fee.
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.
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<PAGE> 2
EXPLANATORY NOTE
This Registration Statement covers the registration of an aggregate
principal amount of $130,000,000 of 8 3/4% Senior Notes due 2008 (the "Exchange
Notes") of GulfMark Offshore, Inc. that may be exchanged (the "Exchange Offer")
for equal principal amounts of the Company's outstanding 8 3/4% Senior Notes due
2008 (the "Old Notes"). This Registration Statement also covers the registration
of the Exchange Notes for resale by Lehman Brothers Inc. in market-making
transactions. The complete Prospectus relating to the Exchange Offer (the
"Exchange Offer Prospectus") follows immediately after this explanatory note.
Following the Exchange Offer Prospectus are certain pages of the Prospectus
relating solely to such market-making transactions by Lehman Brothers Inc. (the
"Market-Making Prospectus"), including alternate front and back cover pages, a
section entitled "Risk Factors -- Trading Market for the Exchange Notes" to be
used in lieu of the sections entitled "Risk Factors -- Absence of Public Market
for the Exchange Notes" and alternate sections entitled "Use of Proceeds,"
"Selling Securityholder" and "Plan of Distribution." In addition, the
Market-Making Prospectus will not include the following captions (or the
information set forth under such captions) in the Exchange Offer Prospectus:
"Prospectus Summary -- Summary of Terms of the Exchange Offer," "Risk
Factors -- Consequences of Failure to Exchange," "Private Placement," "The
Exchange Offer" and "Certain Federal Income Tax Considerations." All other
sections of the Exchange Offer Prospectus will be included in the Market-Making
Prospectus.
<PAGE> 3
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.
SUBJECT TO COMPLETION, DATED JULY 20, 1998
PROSPECTUS
GULFMARK OFFSHORE, INC.
OFFER TO EXCHANGE
8 3/4% SENIOR NOTES DUE 2008
FOR ALL OUTSTANDING 8 3/4% SENIOR NOTES DUE 2008
---------------------------
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M. NEW YORK CITY TIME
ON , 1998, UNLESS EXTENDED
---------------------------
[GULFMARK OFFSHORE LOGO]
GulfMark Offshore, 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, to exchange $1,000
principal amount of its 8 3/4% Senior Notes Due 2008, (the "Exchange Notes"), in
a transaction registered under the Securities Act of 1933, as amended (the
"Securities Act"), pursuant to a Registration Statement (as defined herein) of
which this Prospectus constitutes a part, for each $1,000 principal amount of
the outstanding 8 3/4% Senior Notes due 2008 (the "Old Notes"), of which
$130,000,000 aggregate principal amount is outstanding (the "Exchange Offer").
The Exchange Notes and the Old Notes are sometimes referred to herein
collectively as the "Notes."
The Notes will be general unsecured obligations of the Company and will be
pari passu in right of payment with all existing and future unsecured senior
Indebtedness (as defined herein) of the Company, which may include certain
borrowings under the New Credit Facility (as defined herein), and senior to all
future subordinated indebtedness of the Company. The Company conducts its
operations solely through its Subsidiaries (as defined herein) and, accordingly,
the Notes will be effectively subordinated to (i) all future secured obligations
of the Company to the extent of the assets securing such obligations and (ii)
all existing and future indebtedness and other obligations of the Company's
Subsidiaries and trade payables incurred in the ordinary course of business.
Under certain circumstances, the Company's payment obligations under the Notes
may in the future be jointly and severally guaranteed on a senior unsecured
basis by one or more of the Company's Subsidiaries. See "Description of the
Notes." As of March 31, 1998, on a pro forma basis, after giving effect to the
Offering (as defined herein) and the application of the net proceeds therefrom,
and excluding borrowings that are available under the New Credit Facility, the
Company (exclusive of its Subsidiaries) would have had no Indebtedness
outstanding other than the Notes, and the Company's Subsidiaries would have had
Indebtedness of $0.6 million outstanding. See "Prospectus Summary -- The Private
Placement" and "Description of Other Indebtedness -- New Credit Facility."
The Company will accept for exchange any and all Old Notes that are validly
tendered and not withdrawn prior to 5:00 p.m., New York City time, on the date
the Exchange Offer expires, which will be , 1998 unless the Exchange
Offer is extended (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 business day before
the Expiration Date. The Exchange Offer is not conditioned upon any minimum
principal amount of Old Notes being tendered for exchange. However, the Exchange
Offer is subject to the terms and provisions of the Registration Rights
Agreement (as defined herein). See "The Exchange Offer." Old Notes may be
tendered only in denominations of $1,000 and integral multiples thereof. The
Company has agreed to pay the expenses of the Exchange Offer. There will be no
cash proceeds to the Company from the Exchange Offer. See "Use of Proceeds."
The Exchange Notes will be obligations of the Company entitled to the
benefits of the Indenture (as defined herein) relating to the Notes. The form
and terms of the Exchange Notes are identical in all material respects to the
form and terms of the Old Notes, except that (i) the offering of the Exchange
Notes has been registered under the Securities Act, (ii) the Exchange Notes will
not be subject to transfer restrictions and (iii) the Exchange Notes will not be
entitled to registration or other rights under the Registration Rights Agreement
for payment of Liquidated Damages (as defined in the Registration Rights
Agreement (as defined herein)) upon failure by the Company to consummate the
Exchange Offer or the occurrence of certain other events. Following the Exchange
Offer, any holders of Old Notes will continue to be subject to the existing
restrictions on transfer thereof and, as a general matter, the Company will not
have any further obligation to such holders to provide for registration under
the Securities Act of transfers of the Old Notes held by them. To the extent
that Old Notes are tendered and accepted in the Exchange Offer, a holder's
ability to sell untendered and tendered but unaccepted Old Notes could be
adversely affected. See "Risk Factors -- Consequences of Failure to Exchange"
and "The Exchange Offer -- General."
The Old Notes were sold by the Company on June 8, 1998, to Lehman Brothers
Inc., Chase Securities Inc., Jefferies & Company, Inc. and The Robinson-Humphrey
Company (the "Initial Purchasers") in transactions not registered under the
Securities Act in reliance upon the exemption provided in Section 4(2) of the
Securities Act (the "Offering"). The Initial Purchasers placed the Old Notes
with qualified institutional buyers (as defined in Rule 144A under the
Securities Act) ("Qualified Institutional Buyers" or "QIBs"), each of whom
agreed to comply with certain transfer restrictions and other restrictions.
Accordingly, the Old Notes may not be reoffered, resold or otherwise transferred
in the United States unless such transaction is registered under the Securities
Act or an applicable exemption from the registration requirements of the
Securities Act is available. The Exchange Notes are being offered hereby in
order to satisfy the obligations of the Company under the Registration Rights
Agreement among the Company and the Initial Purchasers dated as of June 8, 1998
relating to the Old Notes (the "Registration Rights Agreement").
(Continued on next page)
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FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED IN CONNECTION
WITH AN INVESTMENT IN THE NOTES, SEE "RISK FACTORS," BEGINNING ON PAGE 14.
---------------------------
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 JULY , 1998
<PAGE> 4
The Exchange Notes will bear interest at a rate of 8 3/4% per annum,
payable semi-annually on June 1 and December 1 of each year, commencing December
1, 1998. Holders of Exchange Notes of record on November 15, 1998, will receive
on December 1, 1998, an interest payment in an amount equal to (x) the accrued
interest on such Exchange Notes from the date of issuance thereof to December 1,
1998, plus (y) the accrued interest on the previously held Old Notes from the
date of issuance of such Old Notes (June 8, 1998) to the date of exchange
thereof. Interest will not be paid on Old Notes that are accepted for exchange.
The Notes mature on June 1, 2008.
The Old Notes were initially represented by one global note in registered,
global form without interest coupons (the "Old Global Note") registered in the
name of Cede & Co., as nominee for The Depository Trust Company (the
"Depositary"), as depositary. The Exchange Notes exchanged for Old Notes
represented by the Old Global Note will also be initially represented by one
global note in registered, global form without interest coupons (the "Exchange
Global Note") registered in the name of Cede & Co. as nominee for the
Depositary. See "Description of the Notes -- Book-Entry; Delivery and Form." The
Old Global Note and the Exchange Global Note are sometimes referred to herein
collectively as the "Global Notes."
Based on interpretations of the Securities Act by the staff of the
Securities and Exchange Commission (the "Commission"), 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 purchased such Old Notes directly from the Company for resale
pursuant to Rule 144A or any other available exemption under the Securities Act
or (ii) a person that is an "affiliate" (within the meaning of Rule 405 of the
Securities Act) of the Company), without compliance with the registration and
prospectus delivery provisions of the Securities Act, provided that the holder
is acquiring the Exchange Notes in its ordinary course of business and is not
participating, and has no arrangement or understanding with any person to
participate, in the distribution of the Notes. Holders of Old Notes wishing to
accept 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 agree 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 date the Registration Statement has been declared effective by the
Commission, it will make this Prospectus available to any broker-dealer for use
in connection with any such resale. See "Plan of Distribution."
The Exchange Notes will be a new issue of securities for which there
currently is no market. The Company does not intend to list the Notes on any
national securities exchange or to seek admission thereof to trading on the
Nasdaq National Market. Although the Initial Purchasers have informed the
Company that they 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, liquidity or maintenance of any market for the Exchange Notes on
any securities exchange. See "Risk Factors -- Absence of a Public Market for the
Exchange Notes."
i
<PAGE> 5
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "Exchange Act"), and, in accordance therewith, files
reports, proxy statements and other information with the Commission. Such
reports, proxy statements and other information filed by the Company with the
Commission can be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549, and the regional offices of the Commission at
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511, and 7 World Trade Center, New York, New York 10048. Copies of such
material can also be obtained by writing to the Commission's Public Reference
Section, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. The Commission maintains a World Wide Web site on the Internet
at http://www.sec.gov that contains reports, proxy and information statements
and other information regarding registrants that file electronically with the
Commission. Such reports, proxy and information statements and other information
concerning the Company can also be inspected and copied at the offices of The
Nasdaq Stock Market, 1735 K Street, N.W., Washington, D.C., on which the
Company's common stock is traded.
This Prospectus constitutes part of a registration statement on Form S-4
(herein, together with all amendments and exhibits, referred to as the
"Registration Statement") filed by the Company with the Commission under the
Securities Act. This Prospectus omits certain of the information set forth in
the Registration Statement. Reference is hereby made to the Registration
Statement and to the exhibits relating thereto for further information with
respect to the Company and the securities offered hereby. Statements contained
herein concerning the provisions of contracts or other documents are not
necessarily complete, and each statement is qualified in its entirety by
reference to the copy of the applicable contract or other document filed with
the Commission. Copies of the Registration Statement and the exhibits thereto
are on file at the offices of the Commission and may be obtained upon payment of
the fee prescribed by the Commission, or may be examined without charge at the
public reference facilities of the Commission described above.
---------------------
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT PRESENTED
HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS ARE AVAILABLE UPON REQUEST FROM
GULFMARK OFFSHORE, INC., 5 POST OAK PARK, SUITE 1170, HOUSTON, TEXAS 77027,
ATTENTION: FRANK R. PIERCE, EXECUTIVE VICE PRESIDENT (713) 963-9522. IN ORDER TO
ENSURE TIMELY DELIVERY OF THE DOCUMENTS, ANY REQUEST SHOULD BE MADE
, 1998. SEE "INCORPORATION BY REFERENCE."
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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.
FORWARD-LOOKING STATEMENTS
This Prospectus includes "forward-looking statements" within the meaning of
Section 27A of the Securities Act and Section 21E of the Exchange Act. Such
forward-looking statements typically include words or phrases such as
"anticipate," "estimate," "projects," "believes," and words or phrases of
similar import. Such statements are subject to certain risks, uncertainties and
assumptions, including without limitation those set forth in the "Risk Factors"
section. All statements other than statements of historical fact included in
this Prospectus, including without limitation the statements under the captions
"Summary," "Risk Factors," "The Company," and elsewhere herein regarding
GulfMark's financial position and liquidity, its strategic alternatives, future
capital needs, exploration, development and production activities of the oil and
natural gas industry, business strategies, and other plans and objectives of
management of the Company for future operations and activities, are
forward-looking statements. These statements are based on certain assumptions
and analyses made by the Company in light of its experience and its perception
of historical trends, current conditions, expected future developments and other
factors it believes are appropriate under the circumstances. Such statements are
subject to risks and uncertainties, including the risk factors discussed
ii
<PAGE> 6
above, general economic and business conditions, the business opportunities that
may be presented to and pursued by the Company, changes in law or regulations
and other factors, many of which are beyond the control of the Company. Although
GulfMark believes that the expectations reflected in such forward-looking
statements are reasonable, it can give no assurance that such expectations will
prove to have been correct. Prospective investors are therefore cautioned that
any such statements are not guarantees of future performance and that actual
results or developments may differ materially from those projected in the
forward-looking statements. Important factors that could cause actual results to
differ materially from the Company's expectations ("Cautionary Statements") are
disclosed in this Prospectus, including, without limitation, in conjunction with
the forward-looking statements included in this Prospectus and under "Risk
Factors." All subsequent written forward-looking statements attributable to the
Company or persons acting on its behalf are expressly qualified in their
entirety by the Cautionary Statements.
iii
<PAGE> 7
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information and Consolidated Financial Statements (including the notes thereto)
included or incorporated by reference elsewhere in this Prospectus. Unless the
context otherwise indicates, references in this Prospectus to the "Company" or
"GulfMark" shall mean, for dates and periods after April 30, 1997, GulfMark
Offshore, Inc. and its subsidiaries and, for dates and periods prior to April
30, 1997, GulfMark International, Inc. and its subsidiaries. See "The Company."
Prospective investors should carefully consider the information set forth under
the heading "Risk Factors." See "Glossary" for the definition of certain
industry terminology used herein.
THE COMPANY
OVERVIEW
GulfMark provides marine support and transportation services to companies
involved in the offshore exploration and production of oil and natural gas. The
Company's vessels provide various services, including the transportation of
materials, supplies and personnel, and the positioning of drilling structures,
that support the construction and ongoing operation of offshore oil and natural
gas facilities and drilling rigs (collectively "Offshore Marine Services"). The
majority of the Company's operations are conducted in the North Sea and the
balance are conducted in Southeast Asia and offshore Brazil. After giving effect
for the Brovig Acquisition (as defined herein), the Company generated $29.8
million of pro forma EBITDA for the 12 months ended December 31, 1997. See
"-- Summary of Historical Condensed Consolidated Financial and Other Data."
The size, diversity and technologically advanced nature of GulfMark's fleet
enables it to provide offshore exploration and production operators with a broad
range of Offshore Marine Services in several key markets. The Company's fleet
has grown in size and capability from an original 11 vessels acquired in late
1990 to 34 vessels as of March 31, 1998, through strategic acquisitions and new
construction of technologically advanced vessels. Twenty-seven vessels in
GulfMark's fleet are owned, two vessels are bareboat chartered, and five vessels
are managed by the Company. The Company believes its fleet is among the youngest
in the industry, with an average age of 14 years. Excluding the six vessels
acquired by the Company from Maritime (Pte), Limited in August 1996, all of the
Company's owned vessels have been built or substantially refurbished since 1984.
The Company's North Sea fleet is comprised of vessels with a wide range of
technological capabilities and sizes. This fleet is heavily oriented toward
supply vessels, which tend to work in the more stable industry sub-segments of
platform supply and field development. The average age of the Company's North
Sea fleet is just over ten years.
On March 7, 1998, GulfMark took delivery of its most modern,
technologically sophisticated vessel to date, the Highland Rover, a modified and
extended (236(#)) UT 755 platform supply vessel. The Company also acquired five
vessels as part of the Brovig Acquisition during the first quarter of 1998. See
"-- Recent Developments." As a result of the delivery of the Highland Rover and
the Brovig Acquisition, the Company's fleet includes four owned UT 755s, the
Highland Rover, the Highland Drummer, the North Challenger, and the Highland
Piper, each built and delivered since 1996. These four vessels are currently
under contract in the North Sea.
The Company's Southeast Asia fleet consists of vessels that can
individually provide the greatest functional flexibility for the varied needs of
this geographically diverse region. Substantially all of the Company's vessels
in the Southeast Asia fleet have sufficient anchor handling and towing
capability to compete for work in areas such as Indonesia, where drilling and
production support are major users of offshore support vessels. Additionally,
the vessels are attractive as supply vessels in locales such as Thailand and
Malaysia because of their combination of on-deck and below-deck capacities and
relatively high horsepower.
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The Company plans to add six newly built vessels to the fleet during the
balance of 1998 and six additional newbuilds in 1999. Three of those 12 new
vessels will be owned by the Company. The Company has commenced construction in
the United Kingdom to complete an unfinished vessel hull (the "Gallant
Project"). The Company currently intends to complete the vessel as a
multi-purpose support vessel for the floating production, storage and offloading
("FPSO") market, although it still has the capacity and flexibility to complete
the vessel as a platform supply vessel ("PSV"). The Company anticipates that
delivery of the Gallant Project will occur in October 1998. The Company believes
that the comparatively low hull acquisition and completion cost (estimated at
$16.0 million, excluding capitalized interest), and the 1998 delivery of the
Gallant Project should provide the Company with a significant competitive
advantage in serving the rapidly growing FPSO market. In addition, two large
PSVs are currently under construction for the Company by Bender Shipbuilding and
Repair Co., Inc. ("Bender") in Mobile, Alabama. These vessels will be able to
operate in harsher climates and deeper water environments than traditional
supply vessels built in the U.S. for use in the Gulf of Mexico. The two Bender
vessels are scheduled for delivery in early and mid 1999, respectively, at an
estimated cost, excluding capitalized interest, of $11.0 million each. The
Company has an option with Bender to construct two additional vessels of similar
design, which, if such option is exercised, could be available in 2000.
The financial performance of the Company reflects both the growth of its
fleet and strong demand in its primary markets. GulfMark's average day rate for
its owned North Sea PSVs for the quarter ended March 31, 1998 was $10,511 per
day, compared to $9,575 per day for the quarter ended March 31, 1997. The
average day rate for its Southeast Asia fleet was $4,771 per day for the quarter
ended March 31, 1998 compared to $3,538 per day for the quarter ended March 31,
1997. The Company's owned vessels operating in the North Sea accounted for 70.6%
of the Company's vessel earnings (revenues less direct costs) in the quarter
ended March 31, 1998. The Company expects this percentage to increase as a
result of the Brovig Acquisition and the delivery of the Highland Rover.
The Company is a Delaware corporation with principal executive offices
located at 5 Post Oak Park, Suite 1170, Houston, Texas 77027-3414, and its
telephone number at that address is (713) 963-9522.
BUSINESS STRATEGY
GulfMark's goal is to enhance its position as a premier supplier of
Offshore Marine Services in international markets. The Company's strategy is to
profitably increase revenues and enhance shareholder value by (i) developing and
maintaining a large, diversified and technologically sophisticated fleet, (ii)
focusing on attractive international markets and (iii) managing its risk profile
through a balance of long-term and short-term charters. The Company believes
this strategy, coupled with an emphasis on providing dependable, high quality
services, will produce higher vessel utilization rates, relatively stable growth
rates and returns on investments that are superior to those of the Company's
competitors.
Developing and Maintaining a Large, Diversified and Technologically Advanced
Fleet
The Company regularly upgrades its fleet to improve capability, reliability
and customer satisfaction. The Company also seeks to take advantage of
attractive opportunities to acquire or build new vessels to expand its fleet.
With the delivery of the Highland Rover and the other planned 1998 and 1999
fleet additions, the Company will own and/or operate nine of the fourteen UT 755
design PSVs currently in service or on order worldwide. The UT 755 is a
technologically sophisticated design the Company helped introduce in the North
Sea with the construction of the Highland Piper and Highland Drummer, two of the
first three UT 755s built (in 1996 and 1997, respectively). The design has been
favorably received by the market and is now gaining wide acceptance.
Focusing on Attractive International Markets
GulfMark has elected to focus its current operations in the North Sea,
Southeast Asia and Brazil markets because the Company believes there are lower
levels of competition, higher barriers to entry, lower volatility of day rates
and greater potential for increasing day rates in those markets than in other
markets, such as in the
2
<PAGE> 9
Gulf of Mexico. Furthermore, the Company's operating experience in these markets
has enabled it to anticipate and profitably respond to trends in these markets,
such as the increasing demand for multi-function vessels met by the Company's
addition of UT 705s and UT 755s in its North Sea fleet. In addition, the Company
has the capacity, under appropriate market conditions, to alter the geographic
focus of its operations to a limited degree by shifting vessels between its
existing markets and by entering new ones as they develop economically and
become more profitable.
North Sea. Historically, this market has been the most demanding of all oil
and natural gas exploration frontiers due to harsh weather, erratic sea
conditions, significant water depths and long sailing distances. Exploration and
production operators in the North Sea market are typically large and well
capitalized entities (such as major oil companies and state-owned oil
companies), in large part because of the significant financial commitment
required for projects in this market. North Sea projects require comparatively
long planning horizons, and while still large compared to projects in other
markets, are becoming smaller in scale and greater in number due to the
reduction in breakeven economics encouraged by advancing technology.
Consequently, vessel demand in the North Sea tends to be relatively steady and
less susceptible to abrupt swings than vessel demand in other regions. The
Company's management has been active in this market since the mid-1970s.
Southeast Asia. Vessel requirements in this fragmented market are trending
towards higher quality, younger vessels as local certification standards have
generally become more demanding. As a result, vessel requirements in Southeast
Asia are now generally similar to the requirements in the Gulf of Mexico.
However, varying weather conditions (such as annual monsoons) and long distances
between supply centers and delivery locations demand more versatile vessel
designs than those used in the Gulf of Mexico. The Company believes that vessel
demand in this market will remain strong and potentially improve further as a
function of the number of major exploration and production projects currently in
the planning stages and the reliable supply of stable foreign currency generated
for the region's economies by the production of hydrocarbons. The Company's
management has been involved in Offshore Marine Services activities in this
market since the mid-1970s, and the Company maintains long-standing business
relationships with a number of local companies.
Brazil. Vessel requirements in this market are similar to those of the
North Sea due to the harsh operating environment. In addition, this market is
expected to expand at a rapid rate due to the privatization of Petroleo
Brasiliero S.A. ("Petrobras"), the Brazilian national oil company, and the
potential grant of concessions of Brazil's offshore acreage to international oil
companies. The Company's Brazil fleet currently consists of one vessel, the
Seapower, which has been operating in this market since 1995 and is currently
under charter to Petrobras through May 1999. Following its delivery in mid-1998,
the Leopard Bay will operate in this market under a three-year contract with
Petrobras. The Company believes that both its current vessel and the planned
vessel additions in 1998 and 1999 are well-suited to this market. The Company
expects that it will expand its presence in this market going forward.
Managing Its Risk Profile Through a Balance of Long-Term and Short-Term
Charters
The Company seeks to balance its portfolio of charters with both long-term
charters, which provide a significant degree of cash flow certainty, and
short-term charters and sharing arrangements, which provide the opportunity to
benefit when day rates are increasing. The Company utilizes its many years of
operating experience to apply this strategy within the markets in which it
operates. Approximately 63% of the Company's revenues for the first three months
of 1998 were derived from charters that will continue until at least the fourth
quarter of 1998. These contracts are typically associated with the Company's
newer vessels, predominantly in the North Sea. Moreover, certain of these
contracts include extension options. As of March 31, 1998, the Company estimates
that it will have $56.6 million and $39.2 million of revenues under such
contracts in 1999 and 2000, respectively, assuming that the options are
exercised.
The Company has also selectively employed sharing arrangements with its
customers to enhance its profitability on longer term charters. These innovative
charters provide the Company and its customers the opportunity to benefit from
rising charter rates by subchartering the contracted vessels to third parties at
prevailing market rates during any downtime in the customers' operations. If the
subcharter rate is below the
3
<PAGE> 10
original charter rate, the customer remains obligated for the contracted rate
shortfall. However, if the subcharter rate is higher than the original charter
rate, the Company and the customer share the additional revenues. These
arrangements permit both the customer and the Company to benefit from improving
market conditions and reduce any disincentive to customers from entering into
longer term charters by minimizing down time costs.
RECENT DEVELOPMENTS
The Brovig Acquisition
In February 1998, the Company acquired substantially all of Brovig Supply
ASA (renamed Gulf Offshore Norge AS) ("Brovig"), at the time a Norwegian-owned,
publicly traded company(the "Brovig Acquisition"). The Company completed the
Brovig Acquisition in March 1998. Brovig was formed through a spin-off from its
former parent on July 1, 1997 in connection with a new tax regime for
ship-owning companies in Norway. The Brovig fleet consists of four large PSVs,
including a UT 755 (the North Challenger) delivered in December 1997, and one
large anchor handling, towing and supply ("AHTS") vessel. All of these vessels
are currently operating in the North Sea. Four of the vessels are under charters
with expiration dates ranging from February 1999 to May 2000, and one vessel has
recently been awarded a construction support contract at premium rates for
summer 1998. The purchase consideration for the Brovig Acquisition was
approximately $73.0 million, including the assumption of approximately NOK 277
million ($37.4 million) of indebtedness.
Delivery of the Highland Rover
On March 7, 1998, the Company took delivery of the Highland Rover, a
modified, extended UT 755 PSV. The UT 755 is a technologically sophisticated
design that has been favorably received by the market and is now gaining wide
acceptance. Additionally, with increasing demand for use of subsea remotely
operated vehicles ("ROVs"), vessels such as the Highland Rover, with its
specialized "moon pool" ROV launching arrangement, are expected to be especially
attractive because they provide customers with increased launch certainty in
harsh and unpredictable weather, such as that experienced in the North Sea. Upon
delivery, the Company paid the balance of the construction cost, 93.4 million
Norwegian Kroner ("NOK") (or $14.0 million), with additional borrowings under an
existing credit facility. The Highland Rover was immediately employed under a
three-year charter at an attractive rate with a marine contractor.
New Credit Facility
The Company applied the net proceeds of the Offering to repay in full the
amounts owing at the time of the closing of the Offering under each of its
then-existing credit facilities and such facilities have since been terminated.
See "-- The Private Placement." In place of these multiple facilities, on June
8, 1998 the Company entered into a single multicurrency revolving loan agreement
(the "New Credit Facility"), initially in an aggregate principal amount of $50.0
million and potentially up to an aggregate principal amount of $75.0 million.
The New Credit Facility is available to provide financing for future
acquisitions, working capital and other general corporate purposes. See
"Description of Other Indebtedness -- New Credit Facility."
Sale of Interest in SeaMark Ltd.
On July 8, 1998 the Company sold for $3 million in cash, its interest in
its 51% owned joint venture, SeaMark Ltd., which operated two bareboat chartered
vessels in Southeast Asia. Gain from the transaction is expected to approximate
the proceeds of sale and will be included in the Company's results for the
quarter ended September 30, 1998.
4
<PAGE> 11
THE PRIVATE PLACEMENT
The Old Notes were sold by the Company on June 8, 1998 to the Initial
Purchasers and were thereupon offered and sold by the Initial Purchasers only to
certain Qualified Institutional Buyers. Of the $125.7 million net proceeds
received by the Company in connection with the sale of the Old Notes, $119.6
million was used to repay in full amounts owing at the time of the closing of
the Offering under each of the Company's then-existing credit facilities. The
remaining $6.1 million of such net proceeds will be used for general corporate
purposes, including a portion of the capital expenditures associated with
vessels currently under construction. As of March 31, 1998, on a pro forma
basis, after giving effect to the Offering and the application of the net
proceeds as just described, and excluding borrowings that are available under
the New Credit Facility, the Company (exclusive of its Subsidiaries) would have
had no Indebtedness outstanding other than the Notes, and the Company's
Subsidiaries would have had Indebtedness of $0.6 million outstanding. See
"Capitalization."
5
<PAGE> 12
SUMMARY OF TERMS OF THE EXCHANGE OFFER
The Exchange Offer relates to the exchange of up to $130,000,000 aggregate
principal amount of Exchange Notes for up to an equal aggregate principal amount
of Old Notes. The Exchange Notes will be obligations of the Company entitled to
the benefits of the Indenture. The form and terms of the Exchange Notes are
identical in all material respects to the form and terms of the Old Notes,
except that (i) the offering of the Exchange Notes has been registered under the
Securities Act, (ii) the Exchange Notes will not be subject to transfer
restrictions and (iii) the Exchange Notes will not be entitled to registration
or other rights under the Registration Rights Agreement including the provision
in the Registration Rights Agreement for payment of Liquidated Damages upon
failure by the Company to consummate the Exchange Offer or the occurrence of
certain other events. See "Description of the Notes." Capitalized terms followed
by the parenthetical "(as defined)" and not defined herein will have the
meanings given them in the Indenture.
REGISTRATION RIGHTS
AGREEMENT.................. The Old Notes were sold by the Company on June 8,
1998 to the Initial Purchasers pursuant to a
Purchase Agreement, dated June 2, 1998 (the
"Purchase Agreement"). Pursuant to the Purchase
Agreement, the Company and the Initial Purchasers
entered into the Registration Rights Agreement
which, among other things, grants the holders of
the Old Notes certain exchange and registration
rights. The Exchange Offer is intended to satisfy
certain obligations of the Company under the
Registration Rights Agreement.
THE EXCHANGE OFFER......... $1,000 principal amount of Exchange Notes will be
issued in exchange for each $1,000 principal amount
of Old Notes validly tendered and accepted pursuant
to the Exchange Offer. As of the date hereof,
$130,000,000 in aggregate principal amount of Old
Notes are outstanding. The Company will issue the
Exchange Notes to tendering holders of Old Notes
promptly following the Expiration Date. The terms
of the Exchange Notes are identical in all material
respects to the Old Notes except for certain
transfer restrictions and registration rights
relating to the Old Notes.
No federal or state regulatory requirements must be
complied with or approval obtained in connection
with the Exchange Offer, other than the
registration requirements under the Securities Act.
RESALE..................... Based on existing interpretations of the Securities
Act by the staff of the Commission set forth in
several no-action letters to third parties, and
subject to the immediately following sentence, 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 holder thereof (other than
(i) a broker-dealer who purchased such Old Notes
directly from the Company for resale pursuant to
Rule 144A or any other available exemption under
the Securities Act or (ii) a person that is an
"affiliate" (within the meaning of Rule 405 of the
Securities Act) of the Company), without compliance
with the registration and prospectus delivery
provisions of the Securities Act, provided that the
holder is acquiring the Exchange Notes in its
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. However,
any purchaser of Notes who is an affiliate of the
Company or who intends to participate in the
Exchange Offer for the purpose of distributing the
Exchange Notes, or any broker-dealer who purchased
the Old Notes from the Company to resell pursuant
to Rule 144A or any other available exemption under
the Securities Act,
6
<PAGE> 13
(i) will not be able to rely on the interpretations
by the staff of the Commission set forth in the
above-mentioned no-action letters, and (ii) must
comply with the registration and prospectus
delivery requirements of the Securities Act in
connection with any sale or transfer of the Notes
unless such sale or transfer is made pursuant to an
exemption from such requirements. The Company does
not intend to seek its own no-action letter and
there is no assurance that the staff of the
Commission would make a similar determination with
respect to the Exchange Notes as it has in such
no-action letters to third parties. See "The
Exchange Offer -- General" and "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. 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
Registration Statement has been declared effective
by the Commission, it will make this Prospectus
available to any broker-dealer for use in
connection with any such resale. See "Plan of
Distribution."
EXPIRATION DATE............ 5:00 p.m., New York City time, on August , 1998,
unless the Exchange Offer is extended, in which
case the term "Expiration Date" means the latest
date and time to which the Exchange Offer is
extended. See "The Exchange Offer -- Expiration
Date; Extensions; Amendments."
ACCRUED INTEREST ON THE
EXCHANGE NOTES AND THE
OLD NOTES................ The Exchange Notes will bear interest at a rate of
8 3/4% per annum, payable semiannually on June 1
and December 1 of each year, commencing December 1,
1998. Holders of Exchange Notes of record on
November 15, 1998 will receive on December 1, 1998,
an interest payment in an amount equal to (i) the
accrued interest on such Exchange Notes from the
date of issuance thereof to December 1, 1998, plus
(ii) the accrued interest on the previously held
Old Notes from the date of issuance of such Old
Notes (June 8, 1998) to the date of exchange
thereof. Interest will not be paid on Old Notes
that are accepted for exchange. The Notes mature on
June 1, 2008.
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 the Old Notes to be exchanged and any other
required documentation, to State Street Bank and
Trust Company, as Exchange Agent, at the address
set forth herein and therein or effect a tender of
Old Notes pursuant to the procedures for book-entry
transfer as provided for herein and therein. By
executing the Letter of Transmittal, each
7
<PAGE> 14
holder will represent to the Company that, among
other things, the Exchange Notes acquired pursuant
to the Exchange Offer are being acquired in the
ordinary course of business of the person receiving
such Exchange Notes, whether or not such person is
the holder, that neither the holder nor any such
other person has any arrangement or understanding
with any person to participate in the distribution
of such Exchange Notes and that neither the holder
nor any such other person is an "affiliate," as
defined in rule 405 under the Securities Act, of
the Company. See "The Exchange Offer -- Procedures
for Tendering."
Following consummation of the Exchange Offer,
holders of Old Notes not tendered as a general
matter will not have any further registration
rights, and the Old Notes will continue to be
subject to certain restrictions on transfer.
Accordingly, the liquidity of the market for the
Old Notes could be adversely affected. See "Risk
Factors -- Absence of Public Market for the
Exchange Notes" and "-- Consequences of Failure to
Exchange" and "The Exchange Offer -- Consequences
of Failure to Exchange."
SPECIAL PROCEDURES FOR
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 in the Exchange Offer should contact such
registered holder promptly and instruct such
registered holder to tender on his behalf. If such
beneficial owner wishes to tender on his own
behalf, such beneficial owner must, prior to
completing and executing the Letter of Transmittal
and delivering his Old Notes, either (a) make
appropriate arrangements to register ownership of
the Old Notes in such holder's name or (b) obtain a
properly completed bond power from the registered
holder or endorsed certificates representing the
Old Notes to be tendered. The transfer of record
ownership may take considerable time, and
completion of such transfer prior to the Expiration
Date may not be possible. See "The Exchange
Offer -- Procedures for Tendering."
GUARANTEED DELIVERY
PROCEDURES................. Holders of Old Notes who wish to tender their Old
Notes and whose Old Notes are not immediately
available, or who cannot deliver their Old Notes
(or complete the procedure for book-entry transfer)
and deliver a properly completed Letter of
Transmittal and any other documents required by the
Letter of Transmittal to the Exchange Agent prior
to the Expiration Date may 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
business day before the Expiration Date by
furnishing a written or facsimile transmission
notice of withdrawal to the Exchange Agent
containing the information set forth in "The
Exchange Offer -- Withdrawal of Tenders."
ACCEPTANCE OF OLD NOTES AND
DELIVERY OF EXCHANGE
NOTES.................... The Company will accept for exchange any and all
Old Notes that are properly tendered, and not
timely withdrawn, in the Exchange Offer prior to
the Expiration Date. See "The Exchange
Offer -- Procedures for
8
<PAGE> 15
Tendering." The Exchange Notes issued pursuant to
the Exchange Offer will be delivered promptly
following the Expiration Date.
EXCHANGE AGENT............. State Street Bank and Trust Company, the Trustee
under the Indenture, is serving as exchange agent
(the "Exchange Agent") in connection with the
Exchange Offer. The overnight courier and hand
delivery address for the Exchange Agent is State
Street Bank and Trust Company, Corporate Trust
Department, Fourth Floor, Two International Place,
Boston, Massachusetts 02110, and the mailing
address is State Street Bank and Trust Company,
Corporate Trust Department, P.O. Box 778, Boston,
Massachusetts 02102-0078. For assistance and
requests for additional copies of this Prospectus,
the Letter of Transmittal or the Notice of
Guaranteed Delivery, the telephone number for the
Exchange Agent is (617) 664-5456, and the facsimile
number for the Exchange Agent is (617) 664-5739.
See "The Exchange Offer -- The Exchange Agent."
EFFECT ON HOLDERS OF OLD
NOTES...................... Holders of Old Notes who do not tender their Old
Notes in the Exchange Offer will continue to hold
their Old Notes and will be entitled to all the
rights and limitations applicable thereto under the
Indenture. All untendered, and tendered but
unaccepted, Old Notes will continue to be subject
to the restrictions on transfer provided for in the
Old Notes and the Indenture. To the extent that Old
Notes are tendered and accepted in the Exchange
Offer, the trading market, if any, for the Old
Notes could be adversely affected. See "Risk
Factors -- Consequences of Exchange and Failure to
Exchange."
CERTAIN TAX CONSEQUENCES... The exchange pursuant to the Exchange Offer will
generally not be a taxable event for federal income
tax purposes. See "Certain Federal Income Tax
Considerations."
USE OF PROCEEDS............ There will be no cash proceeds payable to the
Company from the issuance of the Exchange Notes
pursuant to the Exchange Offer. See "Use of
Proceeds." For a discussion of the use of the net
proceeds received by the Company from the sale of
the Old Notes, see "Private Placement."
See "The Exchange Offer" for more detailed information concerning the terms
of the Exchange Offer.
9
<PAGE> 16
TERMS OF THE OLD NOTES AND THE EXCHANGE NOTES
SECURITIES OFFERED......... $130,000,000 aggregate principal amount of 8 3/4%
Senior Notes due 2008.
MATURITY DATE.............. June 1, 2008.
INTEREST PAYMENT DATES..... June 1 and December 1 commencing December 1, 1998.
MANDATORY REDEMPTION....... The Company will not be required to make mandatory
redemption or sinking fund payments with respect to
the Notes.
OPTIONAL REDEMPTION........ The Notes will be redeemable at the option of the
Company, in whole or in part, at any time on or
after June 1, 2003, at the redemption prices set
forth herein, plus accrued and unpaid interest and,
in the case of the Old Notes only, Liquidated
Damages, if any, to the date of redemption. In
addition, on or before June 1, 2001, the Company
may, at its option, redeem up to 35% of the
aggregate outstanding principal amount of the Notes
at a redemption price of 108.75% of the principal
amount thereof, in each case, plus accrued and
unpaid interest and, in the case of the Old Notes
only, Liquidated Damages, if any, through the
redemption date, with the net proceeds of one or
more underwritten public offerings of common stock
of the Company, provided at least 65% of the
original aggregate principal amount of the Notes
shall remain outstanding after the occurrence of
such redemption. See "Description of the Notes --
Optional Redemption."
CHANGE OF CONTROL.......... In the event of a Change of Control, each holder of
the Notes will have the right, at the holder's
option, to require the Company to purchase such
holder's Notes, in whole or in part, at a purchase
price equal to 101% of the principal amount
thereof, plus accrued and unpaid interest and, in
the case of the Old Notes only, Liquidated Damages,
if any, to the date of purchase. See "Description
of the Notes -- Repurchase at the Option of
Holders."
RANKING.................... The Notes will be general unsecured obligations of
the Company and will be pari passu in right of
payment to all existing and future senior
Indebtedness, including all obligations of the
Company under the New Credit Facility. The Company
conducts its operations solely through its
subsidiaries and, accordingly, the Notes will be
effectively subordinated to all existing and future
Indebtedness and other liabilities of its
subsidiaries. As of March 31, 1998, after giving
pro forma effect to the Offering and the
application of the net proceeds therefrom, and
excluding borrowings that are available under the
New Credit Facility, the Company (exclusive of its
Subsidiaries) would have had no Indebtedness
outstanding other than the Notes, and the Company's
Subsidiaries would have had Indebtedness of
approximately $0.6 million outstanding. See
"Prospectus Summary -- The Private Placement,"
"Capitalization" and "Description of the
Notes -- General."
SUBSIDIARY GUARANTEES...... Under certain circumstances, the Company's payment
obligations under the Notes may in the future be
jointly and severally guaranteed on a senior
unsecured basis by one or more of the Company's
Subsidiaries. See "Description of the
Notes -- Subsidiary Guarantees."
CERTAIN COVENANTS.......... The Indenture pursuant to which the Notes will be
issued (the "Indenture") contains certain covenants
that, among other things, limit the ability of the
Company and the Company's Subsidiaries to (i) incur
additional indebtedness, (ii) pay dividends or make
certain other re-
10
<PAGE> 17
stricted payments, (iii) enter into transactions
with affiliates, (iv) create certain liens, (v)
make certain asset dispositions and (vi) merge or
consolidate with, or transfer substantially all of
its assets to, another person. The Indenture also
limits the ability of the Company's Subsidiaries to
issue preferred stock and to create restrictions on
the ability of such Subsidiaries to pay dividends
or make any other distributions. In addition, the
Company is obligated, under certain circumstances,
to offer to purchase the Notes with the net cash
proceeds of certain sales and other dispositions of
assets at a purchase price of 101% of the principal
amount of the Notes, plus accrued and unpaid
interest and, in the case of the Old Notes only,
Liquidated Damages, if any, to the date of
purchase. See "Description of the
Notes -- Repurchase at the Option of Holders" and
"-- Certain Covenants."
EXCHANGE OFFER,
REGISTRATION RIGHTS........ Pursuant to the Registration Rights Agreement, the
Company agreed (i) to file a registration statement
(the "Exchange Offer Registration Statement") with
respect to the Exchange Offer to exchange the Old
Notes for Exchange Notes within 60 days after the
date of the original issuance of the Old Notes
(which was June 8, 1998) and (ii) to use their best
efforts to cause such registration statement to
become effective within 150 days after such issue
date. The Registration Statement of which this
Prospectus is a part constitutes such Exchange
Offer Registration Statement. If (i) the Exchange
Offer is not permitted by applicable law or (ii)
any holder of the Notes notifies the Company that
(A) it is prohibited by law or policy of the
Commission from participating in the Exchange
Offer, (B) it may not resell the Exchange Notes
acquired by it in the Exchange Offer to the public
without delivering a prospectus and the prospectus
contained in the Exchange Offer Registration
Statement is not appropriate or available for such
resales or (C) it is a broker-dealer and owns Notes
acquired directly from the Company or an affiliate
of the Company, the Company will use its best
efforts to cause to become effective a shelf
registration statement (the "Shelf Registration
Statement") to cover resales of the Notes by the
holders thereof. If the Company fails to satisfy
these registration obligations within prescribed
time periods, it may be required to pay Liquidated
Damages to holders of Old Notes under certain
circumstances. See "Description of the
Notes -- Registration Rights; Liquidated Damages."
TRANSFER RESTRICTIONS...... Following the Exchange Offer, any Old Notes not
exchanged for Exchange Notes will continue to be
subject to the existing restrictions on transfers
thereof and may not be offered or sold within the
U.S. or to, or for the benefit of, U.S. persons
except pursuant to an exemption from, or in a
transaction not subject to, the registration
requirements of the Securities Act. See "The
Exchange Offer -- Consequences of Failure to
Exchange." The Exchange Notes would, in general, be
freely tradable after the Exchange Offer. See
"Exchange Offer."
RISK FACTORS
For a discussion of certain risk factors that should be considered in
connection with an investment in the Notes, see "Risk Factors."
11
<PAGE> 18
SUMMARY OF HISTORICAL CONDENSED CONSOLIDATED FINANCIAL AND OTHER DATA
The summary historical financial information presented below under
Operating Data, for each of the three years in the period ended December 31,
1997, has been derived from the historical consolidated financial statements of
the Company, which have been audited by Arthur Andersen LLP, independent
auditors. The historical information for the three months ended March 31, 1997
and 1998 is unaudited. The unaudited historical information is taken from
unaudited financial statements that include all adjustments, which are of a
normal recurring nature, which the Company considers necessary for a fair
presentation of the results of operations for these periods. Operating results
for the three months ended March 31, 1998 are not necessarily indicative of the
results that may be expected for the entire year ending December 31, 1998. The
information presented should be read together with "Selected Consolidated
Financial Data" and the Consolidated Financial Statements including the notes
thereto incorporated by reference in this Prospectus. The Consolidated Financial
Statements included in this Prospectus, as well as the financial data presented
in the table below, present the net assets and results of operations of the
non-marine businesses of the Company's Predecessor as discontinued operations of
the Company for all periods presented. See "The Company."
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
YEAR ENDED DECEMBER 31, -------------------------
------------------------------- 1997 1998
1995 1996 1997 (UNAUDITED) (UNAUDITED)
------- -------- -------- ----------- -----------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
OPERATING DATA:
Revenues............................... $27,233 $ 34,749 $ 46,019 $ 9,679 $ 16,046
Direct operating expenses.............. 15,386 16,178 18,231 4,302 5,794
General and administrative expenses.... 3,483 4,523 5,364 1,281 1,369
Depreciation and amortization.......... 5,472 5,013 6,711 1,604 2,359
------- -------- -------- -------- --------
Operating income....................... 2,892 9,035 15,713 2,492 6,524
======= ======== ======== ======== ========
Interest expense, net.................. (2,613) (3,467) (3,819) (1,132) (1,382)
OTHER DATA:
EBITDA(a).............................. $ 8,364 $ 14,048 $ 22,424 $ 4,096 $ 8,883
Ratio of earnings to fixed
charges(b)........................... 1.1 2.3 3.1 2.0 3.3
BALANCE SHEET DATA:
Cash and cash equivalents.............. $ 5,136 $ 17,234 $ 25,885 $ 10,233 $ 14,903
Vessels and equipment, net............. 61,343 87,405 105,262 94,912 179,616
Total assets excluding discontinued
operations........................... 74,904 116,470 154,661 119,771 232,642
Total debt(c).......................... 37,576 60,152 53,424 63,845 120,274
Total stockholders' equity(d).......... 31,653 47,179 85,272 44,760 88,659
</TABLE>
- ---------------
(a) EBITDA represents operating income plus depreciation and amortization.
While EBITDA should not be construed as a substitute for operating income
or as a better indicator of liquidity than cash flows from operating
activities, which are determined in accordance with generally accepted
accounting principles, EBITDA is included herein to provide additional
information with respect to the ability of the Company to meet its future
debt service, capital expenditures and working capital requirements. EBITDA
is not necessarily a measure of the Company's ability to fund its cash
needs. EBITDA is included herein because the Company believes that certain
investors find it to be a useful tool for measuring the ability to service
debt.
(b) This computation is submitted in accordance with Item 503(d) of Regulation
S-K. Earnings are computed as income from continuing operations before
taxes and minority interest plus fixed charges and minority interest in
income of subsidiary. Fixed charges are computed as interest, whether
expensed or capitalized, amortization of debt discount and issuance costs
and the portion of rental expense representative of interest.
(c) Includes current portion of long-term debt.
(d) Excludes discontinued operations which were disposed of on May 1, 1997.
12
<PAGE> 19
SUMMARY FLEET INFORMATION
The following table sets forth certain information with respect to the
Company's fleet as of March 31, 1998. See "Glossary" for fleet definitions.
<TABLE>
<CAPTION>
NORTH SEA SOUTHEAST ASIA BRAZIL TOTAL
--------- -------------- ------ -----
<S> <C> <C> <C> <C>
Owned......................................... 15 11 1 27(a)
Managed....................................... 5 - - 5(b)
Chartered..................................... - 2(c) - 2(d)
---- ---- ---- ----
Total......................................... 20 13 1 34
==== ==== ==== ====
</TABLE>
- ---------------
(a) Does not include one additional vessel currently under construction and
scheduled for delivery in 1998 and two additional vessels currently under
construction and scheduled for delivery in 1999.
(b) Does not include two additional vessels currently under construction and
scheduled for delivery in 1998 and three additional vessels currently under
construction and scheduled for delivery in 1999.
(c) These vessels are chartered through August 1998 to SeaMark Ltd., a
Panamanian corporation owned, as of March 31, 1998, 51% by the Company and
49% by the vessels' owners. As of July 8, 1998, the Company sold its
interest in such joint venture. See "Prospectus Summary -- The
Company -- Recent Developments."
(d) Does not include three additional vessels currently under construction and
scheduled for delivery in 1998 and one additional vessel currently under
construction and scheduled for delivery in 1999.
SUMMARY HISTORICAL OPERATING INFORMATION
The following table sets forth certain summary operating information for
the Company relating to average day and utilization rates for the Company's
vessels and the average number of vessels owned or chartered during the periods
indicated.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
-------------------------- -------------------
1995 1996 1997 1997 1998
------ ------ ------ ------- --------
<S> <C> <C> <C> <C> <C>
Rates Per Day Worked(a)(b):
North Sea Fleet(c)...................... $7,840 $8,819 $9,930 $9,575 $10,511(d)
Southeast Asia Fleet(e)................. 3,146 3,347 3,986 3,538 4,771
Overall Utilization Rate(a)(b):
North Sea Fleet......................... 96.4% 95.1% 96.5% 92.9% 98.8%(d)
Southeast Asia Fleet(e)................. 80.5% 77.5% 75.2% 57.5% 85.9%
Average Owned/Chartered Vessels(a)(f):
North Sea Fleet......................... 7.0 7.8 9.0 8.9 12.0(d)
Southeast Asia Fleet(e)................. 7.0 9.5 13.0 13.0 13.0
------ ------ ------ ------ -------
Total................................ 14.0 17.3 22.0 21.9 25.0
====== ====== ====== ====== =======
</TABLE>
- ---------------
(a) Includes all owned or bareboat chartered PSV and AHTS vessels. The Company's
only crewboat and only standby rescue vessel (chartered until December 31,
1996) are excluded, as are all managed vessels.
(b) Rates per day worked is defined as total charter revenues divided by number
of days worked and utilization rate is defined as total days worked divided
by total days available.
(c) Revenues for vessels in the North Sea fleet are primarily earned in Sterling
(L) and have been converted to US Dollars (US$) at the average exchange rate
(US$/L) for the periods indicated. The average exchange rates were $1.6323
and $1.6460 for the periods ended March 31, 1997 and March 31, 1998,
respectively. The average exchange rates for the years ended December 31,
1995, 1996 and 1997 were $1.5778, $1.5623 and $1.6402, respectively.
(d) Includes the Brovig Acquisition calculated for the period from February 10,
1998 through March 31, 1998.
(e) Includes the vessel operating in Brazil.
(f) Adjusted for vessel additions and dispositions occurring during each period.
13
<PAGE> 20
RISK FACTORS
Prospective investors in the Notes should carefully review the information
contained elsewhere in this Prospectus and should particularly consider the
following matters:
DEPENDENCE ON OIL AND GAS INDUSTRY; MARKET VOLATILITY
The Company's operations are dependent on activity in the offshore oil and
natural gas exploration and production industry. The level of exploration and
development of offshore areas is affected by both short-term and long-term
trends in oil and natural gas prices which, in turn, are related to the demand
for petroleum products and the current availability of oil and natural gas
resources. The level of offshore activity is also related to local policies that
influence drilling activities. In recent years, oil and natural gas prices have
reacted to actual and perceived changes in the supply of and demand for oil and
natural gas, which has resulted in volatile levels of offshore exploration and
drilling activity. A significant or prolonged decline in future oil and natural
gas prices would likely result in reduced exploration and development of
offshore areas and a decline in the demand for Offshore Marine Services. Such
reduced activity could have a material adverse effect on the Company's financial
condition and results of operations.
Charter rates for the Company's vessels are also dependent on the supply of
offshore support vessels. Excess vessel capacity in the industry can result from
refurbishment of "mothballed" vessels, conversion of vessels formerly dedicated
to services other than Offshore Marine Services, construction of new vessels and
migration of vessels between markets. The continued recent additions of new
capacity to the worldwide offshore marine fleet could increase competition in
those markets where the Company presently operates, which in turn, could have a
material adverse effect on the Company's financial condition and results of
operations.
HIGHLY LEVERAGED POSITION
The Company is highly leveraged. As of March 31, 1998, after giving pro
forma effect to the Offering and the application of net proceeds therefrom, and
excluding borrowings that are available under the New Credit Facility, the
Company (exclusive of its Subsidiaries) would have no Indebtedness outstanding
other than the Notes, and the Company's Subsidiaries would have had Indebtedness
of $0.6 million outstanding. See "Capitalization" and "Selected Historical
Consolidated Financial Information." The Company's ability to make required
principal and interest payments on its indebtedness is dependent on the future
performance of the Company and its Subsidiaries. The Company's performance is
subject to a number of factors beyond its control, including the performance of
the global economy and financial markets, worldwide demand for oil and gas and
other factors affecting the Company and its Subsidiaries. Additionally, the
Indenture will impose certain operating and financial restrictions on the
Company and its Subsidiaries. Such restrictions will affect, and in many
respects will limit or prohibit, among other things, the ability of the Company
and its Subsidiaries to incur additional Indebtedness, pay dividends, permit
Subsidiaries to issue preferred stock, repay certain indebtedness prior to its
stated maturity, create liens, sell assets or engage in mergers or acquisitions
and make certain capital expenditures. These restrictions, in combination with
the leveraged nature of the Company, could limit the ability of the Company to
effect future financings or otherwise restrict corporate activity.
The Company's level of indebtedness and the restrictive covenants contained
in its debt instruments, including the Indenture, could significantly limit the
Company's ability to withstand competitive pressures or adverse economic
consequences, including the ability of the Company to make capital expenditures
for new vessel construction and other investments in its fleet. In addition,
borrowings under the New Credit Facility will be floating rate obligations of
the Company and its Subsidiaries, causing the Company and its Subsidiaries to be
sensitive to changes in prevailing interest rates. The Company currently
believes that, based on current levels of operations and anticipated growth, its
cash flow from operations, together with borrowings that are available from time
to time under the New Credit Facility, will be adequate to allow for anticipated
capital expenditures for vessel construction and fleet upgrades, to fund working
capital requirements and to make required payments of principal and interest on
its debt. However, if the Company is unable to generate sufficient cash flow
from operations in the future, it may be required to refinance all or a portion
of its debt or
14
<PAGE> 21
to obtain additional financing. There can be no assurance that any such
refinancing would be possible or that any additional financing would be
obtained.
HOLDING COMPANY STRUCTURE; RANKING OF THE NOTES; EFFECTIVE SUBORDINATION
The Company will be the sole obligor on the Notes. The Company's operations
are conducted through, and substantially all of the Company's assets are owned
by, its operating Subsidiaries, most of which are organized under foreign
jurisdictions. As a result, the Company will be dependent on the earnings and
cash flow from such Subsidiaries to meet its obligations under the Notes and to
pay its general expenses. It is expected that Subsidiary cash flow will be made
available to the Company through payments on Intercompany Loans (as defined
herein). The Notes will be general unsecured obligations of the Company ranking
pari passu with all existing and future unsecured senior Indebtedness of the
Company, which may include certain borrowings under the New Credit Facility, and
senior to all future Subordinated Indebtedness of the Company. The Notes will be
effectively subordinated, however, to all future secured obligations of the
Company to the extent of the assets securing such obligations. Furthermore,
because the Company's operations are conducted through, and substantially all of
the Company's assets are owned by, its operating Subsidiaries, the Notes will
also be effectively subordinated to all current and future obligations of such
Subsidiaries (including claims of the lenders under the New Credit Facility and
claims of trade creditors). In the event of liquidation or insolvency of the
Company or if any secured indebtedness is accelerated, the secured assets of the
Company will be available to pay obligations on the Notes only after such
secured indebtedness has been paid in full. At March 31, 1998, after giving pro
forma effect to the Offering and the application of the estimated net proceeds
therefrom, and excluding borrowings that are available under the New Credit
Facility, the Company (exclusive of its Subsidiaries) would have had no
Indebtedness outstanding other than the Notes and the Company's Subsidiaries
would have had Indebtedness of $0.6 million outstanding.
CONSTRAINTS TO REALIZING CASH FROM SUBSIDIARIES
As the Company's operations are conducted through its Subsidiaries, the
Company will be dependent upon the earnings and cash flow from such Subsidiaries
to meet its obligations under the Notes and to pay its general expenses. In
addition to the risks described above in "-- Holding Company Structure; Ranking
of the Notes; Effective Subordination," the ability of the Company's
Subsidiaries to make payments to the Company may be constrained by (i) the level
of taxation, particularly corporate profits and withholding taxes, in the
jurisdictions in which they operate, (ii) exchange controls and repatriation
restrictions in effect in the jurisdictions in which they operate, and (iii) the
ownership interests of other investors in the Company's Subsidiaries.
Substantially all of the Subsidiaries of the Company have issued
intercompany notes to the Company ("Intercompany Loans"). It is anticipated that
in connection with the application of net proceeds of the Offering, certain
Subsidiaries will issue additional Intercompany Loans to the Company. There can
be no assurance that any of the Intercompany Loans can be enforced easily, if at
all. Substantially all of the Subsidiary makers of the Intercompany Loans are
incorporated in jurisdictions outside the United States. In the event of a
default under an Intercompany Loan, any enforcement action in all likelihood
will have to occur in the jurisdiction where the maker's assets are located. The
limited jurisprudence and experience with such enforcement actions in the
relevant jurisdiction may significantly complicate, delay or limit the scope of
such enforcement action. The ability of a foreign claimant to enforce a judgment
or arbitral award obtained outside those jurisdictions may be limited.
RELIANCE ON CERTAIN CUSTOMERS
The Company's principal customers are major integrated oil companies and
large independent oil and natural gas exploration and production companies
operating in international markets, as well as foreign government owned or
controlled organizations and companies that provide logistics, construction and
other services to such oil companies and foreign government organizations. The
percentage of the Company's revenues attributable to a particular customer
varies from time to time depending on the level of oil and
15
<PAGE> 22
natural gas exploration undertaken by that customer, the suitability of the
Company's vessels for the customer's projects and other factors, many of which
are beyond the Company's control. For the year ended December 31, 1997,
approximately 16.5%, 15.4% and 13.2% of the Company's total revenues were
received from Aberdeen Services Company (North Sea) ("ASCO"), Shell U.K.
Exploration & Production ("Shell") and European Marine Contractors ("EMC"),
respectively. For the quarter ended March 31, 1998, approximately 17.5%, 14.0%
and 10.5% of the Company's total revenues were received from ASCO, Petronas
Caragali and Shell, respectively.
ENVIRONMENTAL AND GOVERNMENT REGULATION
The Company's operations are materially affected by government regulation
in the form of international conventions, federal and state laws and regulations
in jurisdictions where the Company's vessels operate and/or are registered.
These conventions, laws and regulations govern oil spills and other matters of
environmental protection, worker health and safety, as well as the manning,
construction and operation of vessels.
The Company believes that it is presently in material compliance with the
environmental laws and regulations to which the Company's operations are
subject. The Company is not a party to any pending environmental litigation or
other proceeding and is unaware of any threatened litigation or proceeding,
which, if adversely determined, would have a material adverse effect on the
financial condition or results of operations of the Company. However, the risk
of incurring substantial compliance costs, liabilities and penalties for
noncompliance are inherent in Offshore Marine Services operations. There can be
no assurance that significant costs, liabilities and penalties will not be
incurred by or imposed on the Company in the future.
OPERATIONAL RISKS AND INSURANCE
The Company's operations are subject to various risks, including
catastrophic marine disaster, adverse weather conditions, mechanical failure,
collision, oil and hazardous substance spills and navigation errors, all of
which represent a threat to the safety of personnel and to the Company's
vessels, cargo, equipment under tow and other property, as well as the
environment. The occurrence of any of the foregoing events could result in loss
of revenue and casualty loss, increased costs or significant liability of the
Company to third parties. Because a significant majority of the Company's vessel
earnings are produced by the 15 owned vessels in its North Sea fleet, the
occurrence of such events with respect to any of those vessels, could have a
disproportionate effect on the Company's revenues and earnings. The Company
maintains insurance coverage that it considers adequate against the casualty and
liability risks listed above, and it has not in the past experienced a loss in
excess of policy limits. There can be no assurance, however, that the Company's
existing insurance coverage can be renewed at commercially reasonable rates or
that such coverage will be adequate to cover future claims that may arise.
RELIANCE ON FOREIGN OPERATIONS
For each of the past five years, substantially all of the Company's
revenues from continuing operations were derived from foreign sources. The
Company's foreign operations are subject to various risks inherent in conducting
business in foreign nations. These risks include, among others, political
instability, potential vessel seizure, nationalization of assets, import-export
quotas and other forms of public and governmental regulation, all of which are
beyond the control of the Company. Although the Company's operations,
historically, have not been affected materially by such conditions or events, it
is not possible to predict whether any such conditions or events might develop
in the future. Also, the Company has organized its subsidiary structure and its
operations in part based on certain assumptions about various foreign and
domestic tax laws, currency exchange, and capital repatriation laws and other
relevant laws. While the Company believes that such assumptions are correct,
there can be no assurance that taxing or other authorities will reach the same
conclusion. If such assumptions are incorrect, or if the relevant countries were
to change or modify such laws or the current interpretation thereof, the Company
may suffer adverse tax and financial consequences, including the reduction of
cash flow available to meet required debt service and other obligations.
Finally, the Company conducts operations in the Southeast Asia market and has
significant customers located in
16
<PAGE> 23
Indonesia, Thailand and Malaysia. While to date the Company has not experienced
an adverse impact associated with the recent economic events in the region,
there can be no assurance that the recent volatility in Southeast Asian
economies will not adversely affect the Company's business, financial condition
or results of operations.
CURRENCY FLUCTUATIONS
Due to its foreign operations, the Company is exposed to foreign currency
exchange rate fluctuations and exchange rate risks. To minimize the Company's
exposure to these risks, the Company attempts to match the currency of the
vessel debt and operating costs with the currency of the charter revenue. For
financial statement reporting purposes, these accounts are translated into U.S.
Dollars at the weighted average exchange rates for the relevant period. From
time to time, the Company enters into forward foreign exchange contracts to
hedge specific exposures but does not engage in currency speculation. Because
the Company conducts a large portion of its operations in foreign currencies, to
the extent the U.S. Dollar appreciates in relation to applicable foreign
currencies, such appreciation could potentially adversely affect the Company's
operating revenues, cash flows and earnings when translated into U.S. Dollars.
To date, currency fluctuations have not had a material impact on the Company's
financial condition or results of operations.
ONGOING CAPITAL EXPENDITURE REQUIREMENTS
As of March 31, 1998, the average age of the Company's owned offshore
support vessel fleet was approximately 14 years. The Company believes that after
an offshore support vessel has been in service for approximately 25 years, the
amount of expenditures (which typically increase with vessel age) necessary to
satisfy required marine certification standards may not be economically
justifiable. Although the Company believes that available cash and projected
free cash flow from operations will provide funds sufficient to finance the
remaining cost of the vessels currently scheduled to be delivered, and that
borrowings available under the New Credit Facility will enable the Company to
add additional vessels to its fleet, there can be no assurance that the
Company's financial resources will be sufficient to enable it to maintain its
fleet by extending the economic life of existing vessels through major
refurbishment or by acquiring new or used vessels.
COMPETITION
The Company operates in a highly competitive industry. In addition to
price, service and reputation, the principal competitive factors for offshore
support vessel fleets include the existence of national flag preferences,
operating conditions and intended use (all of which determine the suitability of
vessel types), complexity of maintaining logistical support and the cost of
transferring equipment from one market to another. Some of the Company's
competitors have greater financial resources than the Company.
RISKS OF CONSTRUCTION DELAYS
The Company's vessel construction projects are subject to the risks of
delay and cost overruns inherent in any large construction project, including
shortages of equipment, unforeseen engineering problems, work stoppages, weather
interference, unanticipated cost increases and shortages of materials or skilled
labor. Significant cost overruns or delays would adversely affect the Company's
financial condition and results of operations. Significant delays could also
result in penalties under, or the termination of, most of the long-term
contracts under which the Company plans to operate these vessels.
INDEMNITY OBLIGATIONS TO EVI
See "The Company" for the definitions of certain of the following
capitalized terms.
The Company has agreed to indemnify Energy Ventures, Inc. (now known as
EVI, Inc. ("EVI")) against any tax liabilities in the event the Contribution,
Distribution or Merger is determined to be taxable. EVI and the Predecessor
received a tax opinion that the Contribution, Distribution and Merger would be
tax-free under the Internal Revenue Code of 1986, as amended. If, however,
contrary to the opinion, the
17
<PAGE> 24
Contribution, Distribution or Merger were ever determined to be taxable, the
potential tax liability to the Company has been estimated to be between $23
million and $36 million.
Additionally, pursuant to the Distribution Agreement, the Company has
agreed to indemnify the Predecessor, EVI and certain of their affiliates against
(i) liabilities for all past and future claims and litigation against EVI or the
Predecessor stemming from the Predecessor's or the Company's Offshore Marine
Services operations, and (ii) liabilities for claims and litigation against EVI
or the Predecessor and its current or past subsidiaries and affiliates,
including the Predecessor's erosion control business ("Ercon"), for periods
prior to May 1, 1997 (the "Distribution Indemnity"). Although the Company has
established a reserve on its Consolidated Balance Sheet which it believes to be
adequate to cover such contingencies, there can be no assurance that the reserve
is adequate.
FRAUDULENT CONVEYANCE CONSIDERATIONS
Although there are currently no Subsidiary Guarantees (as defined) with
respect to the Notes, the Company's obligations under the Notes may, under
certain circumstances, be guaranteed on a general unsecured basis in the future
by certain of the Company's domestic subsidiaries. Various fraudulent conveyance
laws have been enacted for the protection of creditors and may be utilized by a
court of competent jurisdiction to subordinate or avoid any Subsidiary Guarantee
issued by a Subsidiary Guarantor (as defined). It is also possible that under
certain circumstances a court could hold that the direct obligations of a
Subsidiary Guarantor could be superior to the obligations under the Subsidiary
Guarantee. In addition, to the extent any Subsidiary Guarantor is organized
under the laws of a foreign jurisdiction and the Subsidiary Guarantees were
determined to be subject to the laws of such jurisdiction, the laws of
fraudulent transfer and creditor's rights may be less developed and consequently
the enforcement of Subsidiary Guarantees may be more uncertain in such
jurisdictions.
Generally, to the extent that a United States court were to find that at
the time a Subsidiary Guarantor entered into a Subsidiary Guarantee either (x)
the Subsidiary Guarantee was incurred by a Subsidiary Guarantor with the intent
to hinder, delay or defraud any present or future creditor or that a Subsidiary
Guarantor contemplated insolvency with a design to favor one or more creditors
to the exclusion in whole or in part of others or (y) the Subsidiary Guarantor
did not receive fair consideration or reasonably equivalent value for issuing
the Subsidiary Guarantee and, at the time it issued the Subsidiary Guarantee,
the Subsidiary Guarantor (i) was insolvent or rendered insolvent by reason of
the issuance of the Subsidiary Guarantee, (ii) was engaged or about to engage in
a business or transaction for which the remaining assets of the Subsidiary
Guarantor constituted unreasonably small capital, or (iii) intended to incur, or
believed that it would incur, debts beyond its ability to pay such debts as they
matured, the court could avoid or subordinate the Subsidiary Guarantee in favor
of the Subsidiary Guarantor's other obligations. Among other things, a legal
challenge of a Subsidiary Guarantee on fraudulent conveyance grounds may focus
on the benefits, if any, realized by the Subsidiary Guarantor as a result of the
issuance by the Company of the Notes. To the extent a Subsidiary Guarantee is
avoided as a fraudulent conveyance or held unenforceable for any other reason,
the Holders of the Notes would cease to have any claim in respect of such
Subsidiary Guarantor and would be creditors solely of the Company.
POTENTIAL INABILITY TO REPURCHASE NOTES UPON CHANGE IN CONTROL
Upon a Change of Control, each holder of the Notes will have the right to
require the Company to repurchase all or any part of such holder's Notes at 101%
of the principal amount thereof, plus accrued and unpaid interest thereon to the
date of repurchase. However, there can be no assurance that sufficient funds
will be available to the Company at the time of any Change of Control to make
any required repurchases of Notes tendered. Moreover, restrictions in the New
Credit Facility prohibit the Company from making such required repurchases.
Therefore, any such repurchases would constitute an event of default under the
New Credit Facility. See "Description of Other Indebtedness -- New Credit
Facility."
18
<PAGE> 25
ABSENCE OF PUBLIC MARKET FOR THE EXCHANGE NOTES
The Exchange Notes will constitute a new class of securities with no
established trading market. The Company does not intend to list the Notes on any
national securities exchange or to seek the admission thereof to trading in the
Nasdaq National Market. The Exchange Notes are expected to be eligible for
trading in the PORTAL market. The Company has been advised by the Initial
Purchasers that the Initial Purchasers currently intend to make a market in the
Exchange Notes. The Initial Purchasers are not obligated to do so, however, and
any market-making activities with respect to the Exchange Notes may be
discontinued at any time without notice. In addition, such market-making
activity will be subject to the limits imposed by the Securities Act and the
Exchange Act. See "Description of the Notes -- Registration Rights; Liquidated
Damages." Accordingly, no assurance can be given that an active public or other
market will develop for the Exchange Notes or as to the liquidity of the trading
market for the Exchange Notes. If a trading market does not develop or is not
maintained, holders of the Exchange Notes may experience difficulty in reselling
the Exchange Notes or may be unable to sell them at all. If a market for the
Exchange Notes develops, any such market may be discontinued at any time. If a
public trading market develops for the Exchange Notes, future trading prices of
the Exchange Notes will depend on many factors, including among other things,
prevailing interest rates, the Company's financial condition and results of
operations, and the market for similar notes. Depending on those and other
factors, the Exchange Notes may trade at a discount from their principal amount.
CONSEQUENCES OF FAILURE TO EXCHANGE
The Old Notes have not been registered under the Securities Act or any
state securities laws and, unless so registered, may not be offered or sold
except pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act and applicable state securities
laws. Following the consummation of the Exchange Offer, holders who did not
exchange their Old Notes for Exchange Notes generally will not have any further
rights under the Registration Rights Agreement and will remain subject to the
existing restrictions upon transfer of such Old Notes. Because the Company
anticipates that most holders of Old Notes will elect to exchange such Old Notes
for Exchange Notes due to the general lack of restrictions on the resale of
Exchange Notes under the Securities Act, the Company anticipates that the
liquidity of the market for any Old Notes remaining after the consummation of
the Exchange Offer may be substantially limited. See "The Exchange
Offer -- Consequences of Failure to Exchange."
19
<PAGE> 26
THE COMPANY
The Company was incorporated in 1996 as "New GulfMark, Inc.", a wholly
owned subsidiary of the corporation then known as GulfMark International, Inc.
(the "Predecessor"). The Company was formed to facilitate the Predecessor's
separation of its international Offshore Marine Services business from its only
U.S. operations, an erosion control business, and its holdings of EVI common
stock. In order to accomplish this separation, the Predecessor agreed to
transfer the assets, liabilities and operations of its Offshore Marine Services
business to the Company (the "Contribution"). On April 30, 1997, stockholders of
the Predecessor approved the Contribution and the separation of the Offshore
Marine Services business which was accomplished through the distribution of all
the then outstanding Common Stock of the Company to the Predecessor's common
stockholders (the "Distribution") in accordance with the Agreement and Plan of
Distribution dated December 5, 1996 (the "Distribution Agreement") among the
Company, the Predecessor and EVI. Following the Distribution, on May 1, 1997, a
subsidiary of EVI was merged (the "Merger") with and into the Predecessor, whose
assets then consisted solely of Ercon and its investment in approximately 2.2
million shares of EVI common stock.
GulfMark provides marine support and transportation services to companies
involved in the offshore exploration and production of oil and natural gas. The
Company's vessels provide various services, including the transportation of
materials, supplies and personnel, and the positioning of drilling structures,
that support the construction and ongoing operation of offshore oil and natural
gas facilities and drilling rigs. The majority of the Company's operations are
conducted in the North Sea and the balance are conducted in Southeast Asia and
offshore Brazil.
The size, diversity and technologically advanced nature of GulfMark's fleet
enables it to provide offshore exploration and production operators with a broad
range of Offshore Marine Services in several key markets. The Company's fleet
has grown in size and capability from an original 11 vessels acquired in late
1990 to 34 vessels as of March 31, 1998 through strategic acquisitions and new
construction of technologically advanced vessels. Twenty-seven vessels in
GulfMark's fleet are owned, two vessels are bareboat chartered, and five vessels
are managed by the Company. The Company believes its fleet is among the youngest
in the industry, with an average age of 14 years. Excluding the six vessels
acquired by the Company from Maritime (Pte), Limited in August 1996, all of the
Company's owned vessels have been built or substantially refurbished since 1984.
GulfMark's goal is to enhance its position as a premier supplier of
Offshore Marine Services in international markets. The Company's strategy is to
profitably increase revenues and enhance shareholder value by (i) developing and
maintaining a large, diversified and technologically sophisticated fleet, (ii)
focusing on attractive international markets and (iii) managing its risk profile
through a balance of long-term and short-term charters. The Company believes
this strategy, coupled with an emphasis on providing dependable, high quality
services, will produce higher vessel utilization rates, relatively stable growth
rates and returns on investments that are superior to those of the Company's
competitors.
The Company is a Delaware corporation with principal executive offices
located at 5 Post Oak Park, Suite 1170, Houston, Texas 77027-3414, and its
telephone number at that address is (713) 963-9522.
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.
20
<PAGE> 27
PRIVATE PLACEMENT
On June 8, 1998, the Company completed the private sale to the Initial
Purchasers of $130,000,000 principal amount of the Old Notes in a 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 to Qualified Institutional Buyers. Of the $125.7 million net proceeds
received by the Company in connection with the sale of the Old Notes, $119.6
million was used to repay in full amounts owing at the time of the closing of
the Offering under the Company's then existing credit facilities. The remaining
$6.1 million of such net proceeds will be used for general corporate purposes,
including a portion of the capital expenditures associated with vessels
currently under construction. See "Capitalization."
CAPITALIZATION
The following table sets forth the consolidated unaudited capitalization of
the Company at March 31, 1998 and as adjusted to reflect the Offering, assuming
application of the net proceeds therefrom as described under "Prospectus
Summary -- The Private Placement." The Company will fund the remaining cost of
vessels under construction through (i) available cash, (ii) free cash flow from
operations, and (iii) to the extent any additional funds are required,
borrowings under the New Credit Facility. See "Description of Other
Indebtedness -- New Credit Facility." This table should be read in conjunction
with the Consolidated Financial Statements of the Company, including the notes
thereto, incorporated by reference in this Prospectus.
<TABLE>
<CAPTION>
AS OF MARCH 31, 1998
-----------------------
AS
ACTUAL ADJUSTED
-------- -----------
(IN THOUSANDS)
<S> <C> <C>
Cash and Cash Equivalents................................... $ 14,903 $ 20,369
Short-term borrowings and current portion of long-term
debt...................................................... $ 32,005 $ --
Long-term debt:
Existing Credit Facilities................................ 87,699 --
Other debt................................................ 570 570
8 3/4% Senior Notes due 2008.............................. -- 129,570
New Credit Facility....................................... -- --
-------- --------
Total debt........................................ $120,274 $130,140
Stockholders' equity:
Common Stock, $0.01 par value, 15,000,000 shares
authorized; 7,976,237 shares issued and outstanding.... $ 80 $ 80
Additional paid in capital................................ 60,609 60,609
Retained earnings......................................... 29,738 29,738
Cumulative foreign currency adjustment.................... (1,768) (1,768)
-------- --------
Total stockholders' equity........................ 88,659 88,659
-------- --------
Total capitalization.............................. $208,933 $218,799
======== ========
</TABLE>
21
<PAGE> 28
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA
The historical financial data presented in the table below for and at the
end of each of the years in the five-year period ended December 31, 1997 are
derived from the Consolidated Financial Statements of the Company audited by
Arthur Andersen LLP, independent public accountants. The historical financial
data presented in the table below for and at the end of each of the three-month
periods ended March 31, 1998 and March 31, 1997 are derived from the unaudited
consolidated condensed financial statements of the Company. In the opinion of
management of the Company, such unaudited consolidated condensed financial
statements include all adjustments (consisting of normal recurring adjustments)
necessary for a fair presentation of the financial data for such periods. The
results for the three months ended March 31, 1998 are not necessarily indicative
of the results to be achieved for the full year.
The Consolidated Financial Statements incorporated by reference in this
Prospectus, as well as the financial data presented in the table below, present
the net assets and results of operations of Ercon and the common stock of EVI
owned by the Predecessor as discontinued operations of the Company for all
periods presented. The data presented below should be read in conjunction with
the Company's Consolidated Financial Statements and the notes thereto
incorporated by reference in this Prospectus and "The Company."
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
YEAR ENDED DECEMBER 31, -------------------------
---------------------------------------------------- 1997 1998
1993 1994 1995 1996 1997 (UNAUDITED) (UNAUDITED)
-------- -------- -------- -------- -------- ----------- -----------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATING DATA:
Revenues............................... $ 22,564 $ 27,692 $ 27,233 $ 34,749 $ 46,019 $ 9,679 $ 16,046
Direct operating expenses.............. 12,060 15,171 15,386 16,178 18,231 4,302 5,794
General and administrative expenses.... 3,280 3,643 3,483 4,523 5,364 1,281 1,369
Depreciation and amortization.......... 3,752 5,065 5,472 5,013 6,711 1,604 2,359
-------- -------- -------- -------- -------- -------- --------
Operating income....................... 3,472 3,813 2,892 9,035 15,713 2,492 6,524
Gains on sale of vessel................ -- 842 -- -- -- -- --
Interest expense, net.................. (2,047) (2,179) (2,613) (3,467) (3,819) (1,132) (1,382)
Other income (expense), net............ 68 (12) 180 (86) (73) 82 (70)
Income tax provision................... (534) (981) (91) (1,839) (3,626) (398) (1,605)
-------- -------- -------- -------- -------- -------- --------
Income from continuing operations...... 959 1,483 368 3,643 8,195 1,044 3,467
Income (loss) from discontinued
operations, net of taxes............. 1,685 591 (2,270) 4,796 (648) (648) --
Loss on disposal of segment, net of
taxes................................ -- -- -- -- (1,426) (1,426) --
-------- -------- -------- -------- -------- -------- --------
Net income (loss)...................... $ 2,644 $ 2,074 $ (1,902) $ 8,439 $ 6,121 $ (1,030) $ 3,467
======== ======== ======== ======== ======== ======== ========
Earnings per share from continuing
operations (basic)................... $ 0.14 $ 0.22 $ 0.06 $ 0.55 $ 1.15 $ 0.16 $ 0.43
Weighted average common shares
(basic).............................. 6,624 6,640 6,644 6,676 7,155 6,680 7,976
Earnings per share from continuing
operations (diluted)(a).............. $ 0.14 $ 0.22 $ 0.06 $ 0.54 $ 1.11 $ 0.15 $ 0.42
Weighted average common shares
(diluted)(a)......................... 6,664 6,666 6,703 6,782 7,413 6,795 8,236
STATEMENT OF CASH FLOWS DATA:
Cash provided by (used in) operating
activities of continuing
operations........................... $ 2,653 $ 5,448 $ 6,389 $ 8,539 $ 19,112 $ 1,233 $ 2,595
Cash provided by (used in) investing
activities........................... (16,836) (258) (15,093) (24,493) (37,218) (12,844) (42,977)
Cash provided by (used in) financing
activities........................... 12,810 (7,970) 9,567 17,894 28,658 5,742 29,335
Effect of exchange rate changes on
cash................................. (56) 124 (160) 924 (541) (440) 65
OTHER DATA:
EBITDA(b).............................. $ 7,224 $ 8,878 $ 8,364 $ 14,048 $ 22,424 $ 4,096 $ 8,883
Ratio of earnings to fixed
charges(c)........................... 1.6 1.9 1.1 2.3 3.1 2.0 3.3
Cash dividends per common share........ -- -- -- -- -- -- --
Total vessels in fleet(d).............. 25 20 22 28 30 30 34
Average owned/chartered vessels(e)..... 14.4 15.2 14.0 17.3 22.0 21.9 25.0
</TABLE>
22
<PAGE> 29
<TABLE>
<CAPTION>
AS OF MARCH 31,
AS OF DECEMBER 31, -------------------------
------------------------------------------------- 1997 1998
1993 1994 1995 1996 1997 (UNAUDITED) (UNAUDITED)
------- ------- ------- -------- -------- ----------- -----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET:
Cash and cash equivalents..................... $ 5,195 $ 2,645 $ 5,136 $ 17,234 $ 25,885 $ 10,233 $ 14,903
Vessels and equipment, net.................... 53,002 51,175 61,343 87,405 105,262 94,912 179,616
Net assets of discontinued operations(f)...... 23,569 23,512 19,275 14,837 -- 14,881 --
Total assets including discontinued
operations.................................. 90,727 87,821 94,179 131,307 154,661 134,652 232,642
Total assets excluding discontinued
operations.................................. 67,158 64,309 74,904 116,470 154,661 119,771 232,642
Total debt(g)................................. 34,460 28,214 37,576 60,152 53,424 63,845 120,274
Total stockholders' equity.................... 50,388 53,025 50,928 62,016 85,272 59,641 88,659
Total stockholders' equity excluding
discontinued operations(h).................. 26,819 29,513 31,653 47,179 85,272 44,760 88,659
</TABLE>
- ---------------
(a) Earnings per share is based on the weighted average number of shares of
Common Stock and common stock equivalents outstanding.
(b) EBITDA represents operating income plus depreciation and amortization.
While EBITDA should not be construed as a substitute for operating income
or as a better indicator of liquidity than cash flows from operating
activities, which are determined in accordance with generally accepted
accounting principles, EBITDA is included herein to provide additional
information with respect to the ability of the Company to meet its future
debt service, capital expenditures and working capital requirements. EBITDA
is not necessarily a measure of the Company's ability to fund its cash
needs. EBITDA is included herein because the Company believes that certain
investors find it to be a useful tool for measuring the ability to service
debt.
(c) This computation is submitted in accordance with Item 503(d) of Regulation
S-K. Earnings are computed as income from continuing operations before
taxes and minority interest plus fixed charges and minority interest in
income of subsidiary. Fixed charges are computed as interest, whether
expensed or capitalized, amortization of debt discount and issuance costs
and the portion of rental expense representative of interest.
(d) Includes managed, in addition to owned and chartered, vessels. See
"Prospectus Summary -- Summary Fleet Information" for further information
concerning the Company's fleet.
(e) Includes owned and chartered PSVs and AHTS only. Adjusted for acquisitions
and dispositions occurring during each period. See "Prospectus
Summary -- Summary Fleet Information" for further information concerning
the Company's fleet.
(f) Reflects the financial statement information for the non-marine businesses
of the Company's Predecessor (as defined herein).
(g) Includes current portion of long-term debt.
(h) Discontinued operations were disposed of on May 1, 1997.
23
<PAGE> 30
THE EXCHANGE OFFER
GENERAL
The Old Notes were sold by the Company on June 8, 1998, to the Initial
Purchasers pursuant to the Purchase Agreement. The Initial Purchasers
subsequently resold the Old Notes to Qualified Institutional Buyers (as defined
in Rule 144A), each of whom agreed to comply with certain transfer restrictions
and other conditions. As a condition to the purchase of the Old Notes by the
Initial Purchasers, the Company entered into the Registration Rights Agreement
with the Initial Purchasers, which requires, among other things, that promptly
following the issuance and sale of the Old Notes, the Company file with the
Commission the Registration Statement with respect to the Exchange Notes, use
its best efforts to cause the Registration Statement to become effective under
the Securities Act and, upon the effectiveness of the Registration Statement,
offer to 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 subject to certain
exceptions described below. A copy of the Registration Rights Agreement has been
filed as an exhibit to the Registration Statement of which this Prospectus is a
part. The term "holder" with respect to the Exchange Offer means any person in
whose name Old Notes are registered on the Company's books or any other person
who has obtained a properly completed bond power from the registered holder or
any person whose Old Notes are held of record by the Depositary who desires to
deliver such Old Notes by book-entry transfer of the Depositary.
Based on existing interpretations of the Securities Act by the staff of the
Commission set forth in several no-action letters to third parties 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 a
holder thereof (other than a "Restricted Holder," being (i) a broker-dealer who
purchased such Old Notes directly from the Company for resale pursuant to Rule
144A or any other available exemption under the Securities Act or (ii) a person
that is an "affiliate" (within the meaning of Rule 405 of the Securities Act) of
the Company), without compliance with the registration and prospectus delivery
provisions of the Securities Act, provided that the holder is acquiring the
Exchange Notes in its ordinary course of business and is not participating, and
has no arrangement or understanding with any person to participate, in the
distribution (within the meaning of the Securities Act) of the Exchange Notes.
Eligible Holders wishing to accept the Exchange Offer must represent that the
conditions of the foregoing proviso have been met. However, any purchaser of Old
Notes who is an affiliate of the Company or who intends to participate in the
Exchange Offer for the purpose of distributing the Exchange Notes, or any
broker-dealer who purchased the Old Notes from the Company to resell pursuant to
Rule 144A or any other available exemption under the Securities Act, (i) will
not be able to rely on the interpretations by the staff of the Commission set
forth in such no-action letters and (ii) must comply with the registration and
prospectus delivery requirements of the Securities Act in connection with any
sale or transfer of the Old Notes unless such sale or transfer is made pursuant
to an exemption from such requirements. Accordingly, any holder who tenders in
the Exchange Offer with the intention to participate, or for the purpose of
participating, in a distribution of the Exchange Notes must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with a secondary resale transaction. See "Plan of Distribution."
As a result of the filing and effectiveness of the Registration Statement
of which this Prospectus is a part, the Company will not be required to pay an
increased interest rate on the Old Notes. Following the consummation of the
Exchange Offer, holders of Old Notes not tendered will not have any further
registration rights except in certain limited circumstances requiring the filing
of a Shelf Registration Statement (as defined), and the Old Notes will continue
to be subject to certain restrictions on transfer. See "Description of the
Notes -- Registration Rights; Liquidated Damages" and "The Exchange
Offer -- Consequences of Failure to Exchange." Accordingly, the liquidity of the
market for the Old Notes could be adversely affected.
This Prospectus, together with the accompanying Letter of Transmittal, is
being sent to all registered holders as of the date of this Prospectus.
24
<PAGE> 31
TERMS OF THE EXCHANGE OFFER
Upon the terms and subject to the conditions set forth in this Prospectus
and in the Letter of Transmittal, the Company will accept all Old Notes properly
tendered prior to 5:00 p.m. New York City time, on the Expiration Date and not
timely withdrawn. After authentication of the Exchange Notes by the Trustee or
an authenticating agent, the Company will issue and deliver $1,000 principal
amount of Exchange Notes in exchange for each $1,000 principal amount of
outstanding Old Notes accepted in the Exchange Offer. Holders may tender some or
all of their Old Notes pursuant to the Exchange Offer in denominations of $1,000
and integral multiples thereof.
Each holder of Old Notes who wishes to exchange Old Notes for Exchange
Notes in the Exchange Offer will be required to represent that (i) any Exchange
Notes to be received by it are being acquired in the ordinary course of its
business and (ii) it is not engaged in, and does not intend to engage in, and
has no arrangement or understanding with any person to participate in the
distribution (within the meaning of the Securities Act) of the Exchange Notes
and (iii) it is not an affiliate of the Company or, if it is an affiliate, that
it will comply with applicable registration and prospectus delivery requirements
of 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 (a
"Participating Broker-Dealer"), must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Notes. Under the
Registration Rights Agreement, the Company is required to allow Participating
Broker-Dealers to use this Prospectus, as it may be amended or supplemented from
time to time, in connection with the resale of such Exchange Notes. See "Plan of
Distribution."
The form and terms of the Exchange Notes are identical in all material
respects to the form and terms of the Old Notes, except that (i) the offering of
the Exchange Notes has been registered under the Securities Act, (ii) the
Exchange Notes will not be subject to transfer restrictions and (iii) the
holders of the Exchange Notes will not be entitled to registration or other
rights under the Registration Rights Agreement including payment of Liquidated
Damages upon failure by the Company to consummate the Exchange Offer or the
occurrence of certain other events. The Exchange Notes will evidence the same
debt as the Old Notes. The Exchange Notes will be issued under and entitled to
the benefits of the Indenture.
As of the date of this Prospectus, $130,000,000 aggregate principal amount
of the Old Notes is outstanding. In connection with the issuance of the Old
Notes, the Company arranged for the Old Notes to be issued and transferable in
book-entry form through the facilities of the Depositary, acting as depositary.
The Exchange Notes will also be issuable and transferable in book-entry form
through the Depositary.
This Prospectus, together with the accompanying Letter of Transmittal, is
initially being sent to all registered holders of the Old Notes as of the close
of business on the date of this Prospectus. The Company intends to conduct the
Exchange Offer in accordance with the applicable requirements of the Exchange
Act, and the rules and regulations of the Commission thereunder, including Rule
14e-1, to the extent applicable. The Exchange Offer is not conditioned upon any
minimum aggregate principal amount of Old Notes being tendered, and holders of
the Old Notes do not have any appraisal or dissenters' rights under the Delaware
General Corporation Law or under the Indenture in connection with the Exchange
Offer. The Company shall be deemed to have accepted validly tendered Old Notes
when, as and if the Company has given oral or written notice thereof to the
Exchange Agent. See "-- Exchange Agent." The Exchange Agent will act as agent
for the tendering holders for the purpose of receiving Exchange Notes from the
Company and delivering Exchange Notes to such holders.
If any tendered Old Notes are not accepted for exchange because of an
invalid tender or the occurrence of certain other events set forth herein,
certificates for any such unaccepted Old Notes will be returned, at the
Company's cost, to the tendering holder thereof as promptly as practicable after
the Expiration Date.
Holders who tender Old Notes in the Exchange Offer will not be required to
pay brokerage commissions or fees or, subject to the instructions in the Letter
of Transmittal, transfer taxes with respect to the exchange of Old Notes
pursuant to the Exchange Offer. The Company will pay all charges and expenses,
other than
25
<PAGE> 32
certain applicable taxes, in connection with the Exchange Offer. See
"-- Solicitation of Tenders; Fees and Expenses."
NEITHER THE BOARD OF DIRECTORS OF THE COMPANY NOR THE COMPANY MAKES ANY
RECOMMENDATION TO HOLDERS OF OLD NOTES AS TO WHETHER TO TENDER OR REFRAIN FROM
TENDERING ALL OR ANY PORTION OF THEIR OLD NOTES PURSUANT TO THE EXCHANGE OFFER.
MOREOVER, NO ONE HAS BEEN AUTHORIZED TO MAKE ANY SUCH RECOMMENDATION. HOLDERS OF
OLD NOTES MUST MAKE THEIR OWN DECISION WHETHER TO TENDER PURSUANT TO THE
EXCHANGE OFFER AND, IF SO, THE AGGREGATE AMOUNT OF OLD NOTES TO TENDER AFTER
READING THIS PROSPECTUS AND THE LETTER OF TRANSMITTAL AND CONSULTING WITH THEIR
ADVISORS, IF ANY, BASED ON THEIR OWN FINANCIAL POSITION AND REQUIREMENTS.
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term "Expiration Date" shall mean 5:00 p.m., New York City time, on
, 1998, unless the Company, in its sole discretion, extends the
Exchange Offer, in which case the term "Expiration Date" shall mean the latest
date to which the Exchange Offer is extended. The Company may extend the
Exchange Offer at any time and from time to time by giving oral or written
notice to the Exchange Agent and by timely public announcement.
The Company expressly reserves the right, in its sole discretion (i) to
delay acceptance of any Old Notes, to extend the Exchange Offer or to terminate
the Exchange Offer and to refuse to accept Old Notes not previously accepted, if
the conditions set forth herein under "-- Conditions of the Exchange Offer"
shall have occurred and shall not have been waived by the Company (if permitted
to be waived by the Company), by giving oral or written notice of such delay,
extension or termination to the Exchange Agent and (ii) to amend the terms of
the Exchange Offer in any manner. Any such delay in acceptance, extension,
termination or amendment will be followed as promptly as practicable by oral or
written notice thereof by the Company to the registered holders of the Old
Notes. If the Exchange Offer is amended in a manner determined by the Company to
constitute a material change, the Company will promptly disclose such amendment
in a manner reasonably calculated to inform the holders of such amendment and
the Company will extend the Exchange Offer to the extent required by law.
Without limiting the manner in which the Company may choose to make public
announcements of any delay in acceptance, extension, termination or amendment of
the Exchange Offer, the Company shall have no obligation to publish, advise or
otherwise communicate any such public announcement, other than by making a
timely release thereof to the Dow Jones News Service.
INTEREST ON THE EXCHANGE NOTES
The Exchange Notes will bear interest at a rate of 8 3/4% per annum,
payable semi-annually on June 1 and December 1 of each year, commencing December
1, 1998. Holders of Exchange Notes of record on November 15, 1998, will receive
on December 1, 1998, an interest payment in an amount equal to (i) the accrued
interest on such Exchange Notes from the date of issuance thereof to December 1,
1998, plus (ii) the accrued interest on the previously held Old Notes from the
date of issuance of such Old Notes (June 8, 1998) to the date of exchange
thereof. Interest will not be paid on Old Notes that are accepted for exchange.
The Notes mature on June 1, 2008.
PROCEDURES FOR TENDERING
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
the Old Notes (unless such tender is being effected pursuant to the procedure
for book-entry transfer, as provided for herein) to be exchanged and any other
required documentation, to State Street Bank and Trust Company, as Exchange
26
<PAGE> 33
Agent prior to 5:00 p.m. New York City time on the Expiration Date, at the
address set forth herein and in the Letter of Transmittal. Only a holder may
tender its Old Notes in the Exchange Offer.
Any financial institution that is a participant in the Depositary's
book-entry transfer facility system may make book-entry delivery of the Old
Notes by causing the Depositary to transfer such Old Notes into the Exchange
Agent's account in accordance with the Depositary's procedure for such transfer.
Although delivery of Old Notes may be effected through book-entry transfer into
the Exchange Agent's account at the Depositary, the Letter of Transmittal (or
facsimile thereof), with any required signature guarantees and any other
required documents, must, in any case, be transmitted to and received by the
Exchange Agent at its address set forth herein under "-- Exchange Agent" prior
to 5:00 p.m., New York City time, on the Expiration Date. DELIVERY OF DOCUMENTS
TO THE DEPOSITARY IN ACCORDANCE WITH ITS PROCEDURES DOES NOT CONSTITUTE DELIVERY
TO THE EXCHANGE AGENT. See "-- Book Entry Transfer."
Any beneficial owner whose Old Notes are registered in the name of his
broker, dealer, commercial bank, trust company or other nominee and who wishes
to tender should contact such registered holder promptly and instruct such
registered holder to tender on his behalf. If such beneficial owner wishes to
tender on his own behalf, such beneficial owner must, prior to completing and
executing the Letter of Transmittal and delivering his 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 record ownership may take considerable time.
If less than all of the Old Notes are tendered, a tendering holder should
fill in the amount of Old Notes being tendered in the appropriate box on the
Letter of Transmittal. The entire amount of Old Notes delivered to the Exchange
Agent will be deemed to have been tendered unless otherwise indicated.
Signatures on a Letter of Transmittal or a notice of withdrawal, as the
case may be, must be guaranteed by a member firm of a registered national
securities exchange or of the National Association of Securities Dealers, Inc.,
a commercial bank or 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 (each an "Eligible Institution"), unless the Old
Notes tendered pursuant thereto are tendered (i) by a registered holder who has
not completed the box entitled "Special Registration Instructions" or "Special
Delivery Instructions" of the Letter of Transmittal or (ii) for the account of
an Eligible Institution. If the Letter of Transmittal is signed by a person
other than the registered holder listed therein, such Old Notes must be endorsed
or accompanied by appropriate bond powers which authorize such person to tender
the Old Notes on behalf of the registered holder, in either case signed as the
name of the registered holder or holders appears on the Old Notes. If the Letter
of Transmittal or any Old Notes or bond powers are signed or endorsed 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,
evidence satisfactory to the Company of their authority to so act must be
submitted with the Letter of Transmittal.
BY EXECUTING THE LETTER OF TRANSMITTAL, EACH HOLDER WILL REPRESENT TO THE
COMPANY THAT, AMONG OTHER THINGS, (1) THE EXCHANGE NOTES ACQUIRED PURSUANT TO
THE EXCHANGE OFFER ARE BEING ACQUIRED IN THE ORDINARY COURSE OF BUSINESS OF THE
PERSON RECEIVING SUCH EXCHANGE NOTES (WHETHER OR NOT SUCH PERSON IS THE HOLDER),
(2) NEITHER THE HOLDER NOR ANY SUCH OTHER PERSON IS ENGAGED IN, INTENDS TO
ENGAGE IN OR HAS ANY ARRANGEMENT OR UNDERSTANDING WITH ANY PERSON TO PARTICIPATE
IN THE DISTRIBUTION OF SUCH EXCHANGE NOTES, (3) NEITHER THE HOLDER NOR ANY SUCH
OTHER PERSON IS AN "AFFILIATE" (AS DEFINED IN RULE 405 UNDER THE SECURITIES ACT)
OF THE COMPANY OR, IF IT IS AN AFFILIATE OF THE COMPANY, THAT IT WILL COMPLY
WITH THE APPLICABLE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF THE
SECURITIES ACT, AND (4) IF THE TENDERING HOLDER IS A BROKER OR DEALER (AS
DEFINED IN THE EXCHANGE ACT) (A) IT ACQUIRED THE OLD
27
<PAGE> 34
NOTES FOR ITS OWN ACCOUNT AS A RESULT OF MARKET-MAKING ACTIVITIES OR OTHER
TRADING ACTIVITIES AND (B) IT HAS NOT ENTERED INTO ANY ARRANGEMENT OR
UNDERSTANDING WITH THE COMPANY OR ANY "AFFILIATE" THEREOF TO DISTRIBUTE THE
EXCHANGE NOTES TO BE RECEIVED IN THE EXCHANGE OFFER. IN THE CASE OF A
BROKER-DEALER THAT RECEIVES EXCHANGE NOTES FOR ITS OWN ACCOUNT IN EXCHANGE FOR
OLD NOTES WHICH WERE ACQUIRED BY IT AS A RESULT OF MARKET-MAKING OR OTHER
TRADING ACTIVITIES, THE LETTER OF TRANSMITTAL WILL ALSO INCLUDE AN
ACKNOWLEDGMENT THAT THE BROKER-DEALER WILL DELIVER A COPY OF THIS PROSPECTUS IN
CONNECTION WITH THE RESALE BY IT OF EXCHANGE NOTES RECEIVED PURSUANT TO THE
EXCHANGE OFFER; HOWEVER, BY SO ACKNOWLEDGING AND BY DELIVERING A PROSPECTUS,
SUCH HOLDER WILL NOT BE DEEMED TO ADMIT THAT IT IS AN "UNDERWRITER" WITHIN THE
MEANING OF THE SECURITIES ACT. SEE "PLAN OF DISTRIBUTION." IN CONNECTION WITH
THE OFFERING OF OLD NOTES, THE COMPANY AGREED TO FILE AND MAINTAIN, SUBJECT TO
CERTAIN LIMITATIONS, A REGISTRATION STATEMENT THAT WOULD ALLOW LEHMAN BROTHERS
INC. TO ENGAGE IN MARKET-MAKING TRANSACTIONS WITH RESPECT TO THE NOTES.
THE METHOD OF DELIVERY OF OLD NOTES AND THE LETTER 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 ENSURE DELIVERY TO THE EXCHANGE AGENT PRIOR TO THE EXPIRATION DATE.
NO LETTER OF TRANSMITTAL OR OLD NOTES SHOULD BE SENT TO THE COMPANY. HOLDERS MAY
ALSO REQUEST THAT THEIR RESPECTIVE BROKERS, DEALERS, COMMERCIAL BANKS, TRUST
COMPANIES OR NOMINEES EFFECT SUCH TENDER FOR HOLDERS, IN EACH CASE AS SET FORTH
HEREIN AND IN THE LETTER OF TRANSMITTAL.
All questions as to the validity, form, eligibility (including time of
receipt), acceptance and withdrawal of the 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 counsel for the Company, be unlawful. The Company also
reserves the absolute right to waive irregularities or conditions of tender as
to particular Old Notes. The Company's interpretation of the terms, and
conditions of the Exchange Offer (including the instructions in the Letter of
Transmittal) will 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. Although the Company intends to
notify holders of defects or irregularities with respect to tenders of Old
Notes, neither the Company, the Exchange Agent nor any other person shall be
under any duty to give notification of defects or irregularities with respect to
tenders of Old Notes, nor shall any of them incur any liability for failure to
give such notification. Tenders of Old Notes will not be deemed to have been
made until such irregularities have been cured or waived. Any Old Notes received
by the Exchange Agent that the Company determines are not properly tendered or
the tender of which is otherwise rejected by the Company, and as to which the
defects or irregularities have not been cured or waived by the Company, will be
returned by the Exchange Agent to the tendering holder unless otherwise provided
in the Letter of Transmittal, as soon as practicable following the Expiration
Date.
In addition, the Company reserves the right in its sole discretion (i) to
purchase or make offers for any Old Notes that remain outstanding subsequent to
the Expiration Date, or, as set forth under "-- Conditions of the Exchange
Offer," terminate the Exchange Offer and (ii) to the extent permitted by
applicable law, to purchase Old Notes in the open market, in privately
negotiated transactions or otherwise. The terms of any such purchases or offers
may differ from the terms of the Exchange Offer.
28
<PAGE> 35
BOOK-ENTRY TRANSFER
The Company understands that the Exchange Agent will make a request
promptly after the date of this Prospectus to establish accounts with respect to
the Old Notes at the Depositary for the purpose of facilitating the Exchange
Offer, and subject to the establishment thereof, any financial institution that
is a participant in the Depositary's system may make book-entry delivery of Old
Notes by causing such Depositary to transfer such Old Notes into the Exchange
Agent's account with respect to the Old Notes in accordance with the
Depositary's procedures for such transfer. ALTHOUGH DELIVERY OF OLD NOTES MAY BE
EFFECTED THROUGH BOOK-ENTRY TRANSFER INTO THE EXCHANGE AGENT'S ACCOUNT AT THE
DTC, AN APPROPRIATE LETTER OF TRANSMITTAL PROPERLY COMPLETED AND DULY EXECUTED
WITH ANY REQUIRED SIGNATURE GUARANTEE AND ALL OTHER REQUIRED DOCUMENTS MUST IN
EACH CASE BE TRANSMITTED TO AND RECEIVED OR CONFIRMED BY THE EXCHANGE AGENT AT
ITS ADDRESS SET FORTH HEREIN ON OR PRIOR TO THE EXPIRATION DATE, OR, IF THE
GUARANTEED DELIVERY PROCEDURES DESCRIBED BELOW ARE COMPLIED WITH, WITHIN THE
TIME PERIOD PROVIDED UNDER SUCH PROCEDURES. DELIVERY OF DOCUMENTS TO THE BOOK-
ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT. All
references in the Prospectus to deposit or delivery of Old Notes shall be deemed
to include DTC's book-entry delivery method.
GUARANTEED DELIVERY PROCEDURES
Holders who wish to tender their Old Notes and (i) whose Old Notes are not
immediately available, or (ii) who cannot deliver their Old Notes, the Letter of
Transmittal or any other required documents to the Exchange Agent prior to the
Expiration Date, or who cannot complete the procedure for book-entry transfer on
a timely basis, may effect a tender if:
(a) the tender is made through an Eligible Institution;
(b) prior to the Expiration Date, the Exchange Agent receives from
such Eligible Institution a properly completed and duly executed Notice of
Guaranteed Delivery (by facsimile transmittal, mail or hand delivery)
setting forth the name and address of the holder, the certificate number or
numbers of such holder's Old Notes and the principal amount of such 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 Expiration Date, the Letter of Transmittal (or facsimile
thereof), together with the certificate(s) representing the Old Notes to be
tendered in proper form for transfer (or confirmation of a book-entry
transfer into the Exchange Agent's account at the Depositary of Old Notes
delivered electronically) and any other documents required by the Letter of
Transmittal, will be deposited by the Eligible Institution with the
Exchange Agent; and
(c) such properly completed and executed Letter of Transmittal (or
facsimile thereof), together with the certificate(s) representing all
tendered Old Notes in proper form for transfer (or confirmation of a
book-entry transfer into the Exchange Agent's account at the Depositary of
Old Notes delivered electronically) and all other documents required by the
Letter of Transmittal are received by the Exchange Agent within three NYSE
trading days after the Expiration Date.
Upon request to 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.
WITHDRAWAL OF TENDERS
Except as otherwise provided herein, tenders of Old Notes may be withdrawn
at any time prior to 5:00 p.m., New York City time, on the business day before
the Expiration Date.
For a withdrawal to be effective, a written or facsimile transmission
notice of withdrawal 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 business
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<PAGE> 36
day before the Expiration Date. Any such notice of withdrawal must (i) specify
the name of the person having deposited the Old Notes to be withdrawn (the
"Depositor"), (ii) identify the Old Notes to be withdrawn (including the
certificate number or numbers and principal amount of such Old Notes or, in the
case of Old Notes transferred by book-entry transfer, the name and number of the
account at the Depositary to be credited), (iii) be signed by the Depositor in
the same manner as the original signature on the Letter of Transmittal, by which
such Old Notes were tendered (including any required signature guarantee) or be
accompanied by documents of transfer sufficient to permit the Trustee with
respect to the Old Notes to register the transfer of such Old Notes into the
name of the Depositor withdrawing the tender and (iv) specify the name in which
any such Old Notes are to be registered, if different from that of the
Depositor. All questions as to the validity, form and eligibility (including
time of receipt) of such withdrawal notices will be determined by the Company,
whose determination shall be final and binding on all parties. Any Old Notes so
withdrawn will be deemed not to have been validly tendered for purposes of the
Exchange Offer, and no Exchange Notes will be issued with respect thereto unless
the Old Notes so withdrawn are validly retendered. Any Old Notes that have been
tendered but are not accepted for exchange will be returned to the holder
thereof without cost to such holder 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 above under "-- Procedures for Tendering" at any time prior
to the Expiration Date.
CONDITIONS TO THE EXCHANGE OFFER
Notwithstanding any other term of the Exchange Offer, the Company will not
be required to accept for exchange, or to issue Exchange Notes for, any Old
Notes, and may terminate the Exchange Offer before the acceptance of such Old
Notes if, in the Company's judgment, the Exchange Offer, or the making of any
exchange by a holder, violates applicable law or any applicable policy or
interpretation of the staff of the Commission.
If the Company determines that it may terminate the Exchange Offer for any
of the reasons set forth above, the Company may (i) refuse to accept any Old
Notes and return any Old Notes that have been tendered to the holders thereof,
(ii) extend the Exchange Offer and retain all Old Notes tendered prior to the
Expiration Date of the Exchange Offer, subject to the rights of such holders of
tendered Old Notes to withdraw their tendered Old Notes or (iii) waive such
termination event with respect to the Exchange Offer and accept all properly
tendered Old Notes that have not been withdrawn. If such waiver constitutes a
material change in the Exchange Offer, the Company will disclose such change by
means of a supplement to this Prospectus that will be distributed to each
registered holder, and the Company will extend the Exchange Offer for a period
of five to ten business days, depending upon the significance of the waiver and
the manner of disclosure to the registered holders, if the Exchange Offer would
otherwise expire during such period.
EXCHANGE AGENT
State Street Bank and Trust Company, the Trustee under the Indenture, has
been appointed as Exchange Agent for the Exchange Offer. In such capacity, the
Exchange Agent has no fiduciary duties and will be acting solely on the basis of
directions of the Company. Requests for assistance and requests for additional
copies of this Prospectus or of the Letter of Transmittal should be directed to
the Exchange Agent addressed as follows:
<TABLE>
<S> <C>
By Registered or Certified Mail: By Hand or Overnight Delivery:
State Street Bank and Trust Company State Street Bank and Trust Company
Corporate Trust Department Corporate Trust Department
P.O. Box 778 Fourth Floor
Boston, Massachusetts 02102-0078 Two International Place
Boston, Massachusetts 02110
Facsimile Transmission (for Eligible Institutions only): (617) 664-5739
Confirm by Telephone: (617) 664-5456
</TABLE>
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<PAGE> 37
DELIVERY OF THE LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE OTHER THAN AS SET FORTH
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY OF SUCH LETTER OF TRANSMITTAL.
SOLICITATION OF TENDERS; FEES AND EXPENSES
The expenses of soliciting tenders pursuant to the Exchange Offer will be
borne by the Company. The principal solicitation pursuant to the Exchange Offer
is being made by mail. Additional solicitations may be made by officers and
regular employees of the Company and its affiliates in person, by telegraph,
telephone or telecopier.
The Company has not retained any dealer-manager in connection with the
Exchange Offer and will not make any payments to brokers, dealers or other
persons soliciting acceptances of the Exchange Offer. The Company will, however,
pay the Exchange Agent reasonable and customary fees for its services, reimburse
the Exchange Agent for its reasonable out-of-pocket costs and expenses in
connection therewith and indemnify the Exchange Agent for all losses and claims
incurred by it as a result of the Exchange Offer. The Company may also pay
brokerage houses and other custodians, nominees and fiduciaries the reasonable
out-of-pocket expenses incurred by them in forwarding copies of this Prospectus,
the Letter of Transmittal and related documents to the beneficial owners of the
Old Notes and in handling or forwarding tenders for exchange.
The expenses to be incurred in connection with the Exchange Offer,
including fees and expenses of the Exchange Agent and Trustee and accounting and
legal fees and printing costs, will be paid by the Company.
The Company will pay all transfer taxes, if any, applicable to the exchange
of Old Notes pursuant to the Exchange Offer. If, however, certificates
representing 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, or if tendered Old Notes are registered in the name of any person
other than the person signing the 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 the Letter of Transmittal, the amount of such transfer
taxes will be billed by the Company directly to such tendering holder.
ACCOUNTING TREATMENT
The Exchange Notes will be recorded at the same carrying value as the Old
Notes, as reflected in the Company's accounting records on the date of the
exchange. Accordingly, no gain or loss for accounting purposes will be
recognized by the Company as a result of 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.
CONSEQUENCES OF FAILURE TO EXCHANGE
Participation in the Exchange Offer is voluntary. Holders of the Old Notes
are urged to consult their financial and tax advisors in making their own
decisions as to what action to take.
As a result of the making of, and upon acceptance for exchange of all
validly tendered Old Notes pursuant to the terms of, this Exchange Offer, the
Company will have fulfilled a covenant contained in the Registration Rights
Agreement. Holders of the Old Notes who do not tender their Old Notes in the
Exchange Offer will continue to hold such Old Notes and will be entitled to all
the rights, and subject to the limitations applicable thereto, under the
Indenture and the Registration Rights Agreement, except for any such rights
under the Registration Rights Agreement that by their terms terminate or cease
to have further effect as a result of the making of this Exchange Offer. See
"Description of the Notes." All untendered Old Notes will continue to be subject
to the restrictions on transfer set forth in the Indenture. The Old Notes may
not be offered, resold, pledged or otherwise transferred, except (i) to the
Company, (ii) pursuant to an effective
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<PAGE> 38
registration statement under the Securities Act, (iii) to Qualified
Institutional Buyers in reliance upon the exemption from the registration
requirements of the Securities Act provided by Rule 144A, (iv) in an offshore
transaction complying with Rule 903 or 904 of Regulation S under the Securities
Act, (v) pursuant to an exemption from registration under the Securities Act
provided by Rule 144 thereunder (if available) or (vi) in accordance with
another exemption from the registration requirements under the Securities Act
(and based upon an opinion of counsel) and, in each case, in accordance with any
applicable securities laws of any State of the United States or any other
applicable jurisdiction. To the extent that Old Notes are tendered and accepted
in the Exchange Offer, the liquidity of the trading market for untendered Old
Notes could be adversely affected.
The Company may in the future seek to acquire untendered Old Notes in the
open market or through privately negotiated transactions, through subsequent
exchange offers or otherwise. The Company intends to make any such acquisitions
of Old Notes in accordance with the applicable requirements of the Exchange Act
and the rules and regulations of the Commission thereunder, including Rule
14e-1, to the extent applicable. The Company has no present plan to acquire any
Old Notes that are not tendered in the Exchange Offer or to file a registration
statement to permit resales of any Old Notes that are not tendered in the
Exchange Offer.
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<PAGE> 39
DESCRIPTION OF OTHER INDEBTEDNESS
The following is a description of the principal terms of certain other
indebtedness of the Company:
NEW CREDIT FACILITY
On June 8, 1998, the Company entered into the New Credit Facility with
Christiania Bank og Kreditkasse ASA ("CBK") as Administrative Agent and Arranger
and The Chase Manhattan Bank, London Branch ("Chase") as Security and
Documentation Agent and Arranger (CBK and Chase collectively are referred to as
the "Lenders"). The Company will be the borrower under Tranche 1 of the New
Credit Facility, and the Company and certain of its subsidiaries ("Subsidiary
Borrowers") will be the borrowers under Tranche 2. The following is a summary of
the material terms and conditions of the New Credit Facility and is subject to
the detailed provisions of the New Credit Facility agreements and documents
entered into in connection therewith.
Loans; Interest Rates; Repayment. The New Credit Facility is structured as
a multicurrency revolving loan agreement, initially in an aggregate principal
amount of $50.0 million and potentially up to an aggregate principal amount of
$75.0 million, which is available in two tranches. The proceeds of the New
Credit Facility, together with proceeds of the Offering, provided the financing
to repay in full amounts owing at the time of the closing of the Offering under
the Company's then existing credit facilities and will provide financing for
future acquisitions, working capital and other general corporate purposes. See
"Prospectus Summary -- The Private Placement."
Both Tranches will fully amortize over a period of five years. Thirty-nine
months after the closing of the New Credit Facility, and quarterly thereafter
for 8 quarters until maturity, the amount of each Tranche of the New Credit
Facility will be ratably reduced so that in the last quarter prior to maturity
of the New Credit Facility, the facility amount available in each Tranche will
be one-eighth of the original principal amount of each Tranche. Both Tranche 1
and Tranche 2 are revolving loans which may be borrowed, repaid and reborrowed
from time to time until five years after the closing of the New Credit Facility,
subject to certain customary conditions on the date of any such borrowing.
Tranche 1, initially in the amount of $25.0 million, and potentially up to
$30.0 million, bears interest at LIBOR plus a margin ranging from 1.0% to 1.375%
per annum which margin will be determined by the Company's ratio of funded debt
to total capitalization ("Leverage Ratio"). Tranche 1 is available to the
Company for general corporate purposes. Tranche 2, initially in the amount of
$25.0 million and potentially up to $45.0 million, bears interest at LIBOR plus
a margin ranging from .80% to 1.25% per annum, which will be determined by the
Company's Leverage Ratio. Tranche 2 is available to finance acquisition of (i)
up to 50% of the acquisition cost of shares in companies operating within the
same industry as the Company ("Share Acquisition") or (ii) up to 65% of the
purchase price or cost of a vessel ("Vessel Acquisition").
Security. The obligations under Tranche 1 of the New Credit Facility are
obligations of the Company as Borrower and are unsecured. The obligations under
Tranche 2 of the New Credit Facility are obligations of either the Company or
the Subsidiary Borrowers and are secured as described below. If the facility
amount available under Tranche 2 is used for a Share Acquisition, then the
Company or a Subsidiary Borrower, as the case may be, will be required to pledge
all of the stock acquired or, if the stock being acquired represents ownership
in a foreign subsidiary not taxable in the United States (a "Foreign
Subsidiary"), 66% of the stock of the Foreign Subsidiary will be required. If
any of the facility amount available under Tranche 2 is used for a Vessel
Acquisition, then the Company, or the Subsidiary Borrower, as applicable, shall
be required to grant the Lenders on the vessel(s) acquired: (i) a first priority
mortgage, (ii) an assignment of earnings and insurance and (iii) an assignment
of charters over one year.
Guarantees. The obligations of the Company will be guaranteed by all
material Subsidiaries of the Company, excluding foreign Subsidiaries not taxable
in the United States. Initially, the obligations of the Company under the New
Credit Facility will not be guaranteed by any of the Company's Subsidiaries. The
obligations of Subsidiary Borrowers under Tranche 2 are guaranteed by the
Company.
Prepayments. The Company is required to make prepayments on Tranche 2
borrowings in the event of a sale or loss of a vessel, (i) if secured by a
single vessel, in an amount equal to the amount advanced on such
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<PAGE> 40
vessel or (ii) if secured by multiple vessels, the prepayment shall be in an
amount which corresponds to the ratio of the fair market value of the sold or
lost vessel divided by the aggregate fair market value of all vessels secured by
the advance. The Company is required to make a prepayment on a Tranche 2
borrowing for a Share Acquisition upon the sale of the shares in proportion to
the shares sold.
Conditions and Covenants. The obligations of the Lenders under the New
Credit Facility are subject to the satisfaction of certain conditions precedent
customary in similar credit facilities or otherwise appropriate under the
circumstances. The Company and each of its Subsidiaries are subject to certain
negative covenants contained in the New Credit Facility, including without
limitation covenants that restrict, subject to specified exceptions: (i) the
incurrence of additional indebtedness and other obligations, (ii) the granting
of any liens on the current or future assets of the Company or any of its
Subsidiaries, (iii) dispositions of assets, and (iv) dividends by the Company.
The New Credit Facility also contains customary affirmative covenants, including
compliance with environmental laws, reimbursement of increased costs of lenders,
financial reporting and the pledge of additional collateral under certain
circumstances. In addition, the New Credit Facility requires the Company to
maintain compliance with certain specified financial covenants including the
Leverage Ratio, a minimum interest coverage ratio, and a minimum net worth.
Certain of these financial, negative and affirmative covenants are more
restrictive than those set forth in the Indenture.
Events of Default. The New Credit Facility also includes events of default
that are typical for senior credit facilities, including without limitation,
nonpayment of principal, interest, or fees; violation of covenants; inaccuracy
of representations and warranties in any material respect; cross default to
certain other indebtedness and agreements; bankruptcy and insolvency events;
material judgments and liabilities; defaults and change of control. The
occurrence of any of such events of default could result in acceleration of the
Company's obligations under the New Credit Facility and foreclosure on any
collateral securing such obligations, which could have material adverse results
to the holders of the Notes.
As of June 30, 1998, the Company had no Indebtedness outstanding under the
New Credit Facility.
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<PAGE> 41
DESCRIPTION OF THE NOTES
GENERAL
The Exchange Notes will be issued, and the Old Notes were issued, pursuant
to an Indenture (the "Indenture") among the Company and State Street Bank and
Trust Company, as trustee (the "Trustee") dated as of June 8, 1998. References
to the Notes include the Old Notes and the Exchange Notes unless the context
indicates otherwise. The terms of the Notes include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (the "Trust Indenture Act"). The Notes are subject to all
such terms, and Holders of Notes are referred to the Indenture and the Trust
Indenture Act for a statement thereof. The following summary of the provisions
of the Indenture does not purport to be complete and is qualified in its
entirety by reference to the Indenture, including the definitions therein of
certain terms used below. Copies of the Indenture are available as set forth
below under "-- Additional Information." The definitions of certain terms used
in the following summary are set forth below under "-- Certain Definitions." For
purposes of this summary, the term "Company" refers only to GulfMark Offshore,
Inc. and not to any of its Subsidiaries.
The Notes are general unsecured obligations of the Company ranking pari
passu in right of payment with all current or future senior Indebtedness of the
Company, including borrowings under the Credit Facility, and senior in the right
of payment to all Subordinated Indebtedness of the Company issued in the future,
if any. The Company is a holding company that conducts substantially all of its
operations through its direct and indirect U.S. and foreign subsidiaries, and
substantially all of the Company's assets consist of equity in its direct
subsidiaries. The Notes are not guaranteed as of the Issue Date by any
Subsidiaries of the Company. The Indenture provides that the Notes will be
guaranteed by any existing or future Subsidiary of the Company that guarantees
any Indebtedness of the Company. As of March 31, 1998, on a pro forma basis
after giving effect to the Offering and the application of the net proceeds
therefrom, and excluding borrowings that are available under the New Credit
Facility, the Company (exclusive of its Subsidiaries) would have had no
Indebtedness outstanding other than the Notes, and the Company's Subsidiaries
would have had Indebtedness of $0.6 million outstanding. The Indenture limits,
subject to certain financial tests and exceptions, the amount of additional
Indebtedness that the Company and its Restricted Subsidiaries may incur. See
"-- Certain Covenants -- Incurrence of Indebtedness and Issuance of Preferred
Stock."
As of the Issue Date, all of the Company's Subsidiaries will be Restricted
Subsidiaries. Under certain circumstances, the Company will be able to designate
current or future Subsidiaries as Unrestricted Subsidiaries. Unrestricted
Subsidiaries will not be subject to any of the restrictive covenants set forth
in the Indenture.
PRINCIPAL, MATURITY AND INTEREST
The Notes will be limited in aggregate principal amount to $200 million,
$130 million of which were issued in the Offering, and will mature on June 1,
2008. Additional amounts may be issued after the date of the Indenture in one or
more series from time to time subject to the limitations set forth under the
caption "-- Certain Covenants -- Incurrence of Indebtedness and Issuance of
Preferred Stock" and restrictions contained in any Credit Facility, including
the New Credit Facility, and any other agreement to which the Company is a party
at the time of such issuance. The Company has agreed not to offer, issue or sell
any notes, bonds or other amounts under the Indenture other than the $130
million of Notes offered in the Offering and the Exchange Notes for a period of
180 days from the date of the Indenture without the prior written consent of
Lehman Brothers. Interest on the Notes will accrue at the rate of 8 3/4% per
annum and will be payable semi-annually in arrears on each June 1 and December
1, commencing on December 1, 1998, to Holders of record on the immediately
preceding May 15 and November 15. Interest on the Notes will accrue from the
most recent date to which interest and, in the case of the Old Notes only,
Liquidated Damages, if any, has been paid or, if no interest has been paid, from
the date of original issuance. Interest will be computed on the basis of a
360-day year comprised of twelve 30-day months. Principal, premium, if any, and
interest and, in the case of the Old Notes only, Liquidated Damages, if any, on
the Notes will be payable at the office or agency of the Company maintained for
such purpose within the City and State of New York or, at the option of the
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<PAGE> 42
Company, payment of interest and, in the case of the Old Notes only, Liquidated
Damages, if any, may be made by check mailed to the Holders of the Notes at
their respective addresses set forth in the register of Holders of Notes;
provided that all payments with respect to Notes the Holders of which have given
wire transfer instructions to the Company will be required to be made by wire
transfer of immediately available funds to the accounts specified by the Holders
thereof. Until otherwise designated by the Company, the Company's office or
agency in New York will be the office of the Trustee maintained for such
purpose. The Notes will be issued in denominations of $1,000 and integral
multiples thereof.
SUBSIDIARY GUARANTEES
As of the Issue Date the Company's payment obligations under the Notes were
not guaranteed by any of the Company's Subsidiaries. The Indenture provides that
if any Subsidiary of the Company, after the Issue Date, guarantees any
Indebtedness of the Company, including Indebtedness under any credit facility,
then such Subsidiary shall (i) execute a supplemental indenture in form and
substance satisfactory to the Trustee providing that such Subsidiary shall
become a Guarantor under the Indenture and (ii) deliver an opinion of counsel to
the effect that such supplemental indenture has been duly authorized and
executed by such Subsidiary. In the event a Subsidiary becomes a Guarantor in
the future, the obligations of such Guarantor under its Subsidiary Guarantee
will be a general unsecured obligation of the Guarantor ranking pari passu in
right of payment with all other current or future senior Indebtedness of such
Guarantor, and senior in the right of payment to any Subordinated Indebtedness
of such Guarantor. The obligations of each Guarantor under any future Subsidiary
Guarantee will be limited to the maximum amount the Guarantors are permitted to
guarantee under applicable law without creating a "fraudulent conveyance." See
"Risk Factors -- Fraudulent Conveyance Considerations."
The Indenture provides that no Guarantor may consolidate with or merge with
or into (whether or not such Guarantor is the surviving Person) another Person
whether or not affiliated with such Guarantor unless (i) subject to the
provisions of the following paragraph, the Person formed by or surviving any
such consolidation or merger (if other than such Guarantor) assumes all the
obligations of such Guarantor pursuant to a supplemental indenture in form and
substance reasonably satisfactory to the Trustee, under the Notes and the
Indenture; (ii) immediately after giving effect to such transaction, no Default
or Event of Default exists; (iii) such Guarantor, or any Person formed by or
surviving any such consolidation or merger, would have Consolidated Net Worth
(immediately after giving effect to such transaction) equal to or greater than
the Consolidated Net Worth of such Guarantor immediately preceding the
transaction; and (iv) the Company would be permitted by virtue of the Company's
pro forma Fixed Charge Coverage Ratio, immediately after giving effect to such
transaction, to incur at least $1.00 of additional Indebtedness pursuant to the
Fixed Charge Coverage Ratio test set forth in the first paragraph of the
covenant described above under the caption "-- Certain Covenants -- Incurrence
of Indebtedness and Issuance of Preferred Stock."
Notwithstanding the foregoing paragraph, (i) any Guarantor may consolidate
with, merge into or transfer all or a part of its properties and assets to the
Company or any other Guarantor and (ii) any Guarantor may merge with a Wholly
Owned Restricted Subsidiary of the Company that has no significant assets or
liabilities and was incorporated solely for purpose of reincorporating or
redomesticating such Guarantor in another State of the United States or, if such
Guarantor was organized under the laws of a jurisdiction other than a State of
the United States, in any foreign country that is a member of the Organization
for Economic Cooperation and Development; provided that, in each case, such
merged entity continues to be a Guarantor.
The Indenture provides that upon (i) the release by the lenders under all
Indebtedness of the Company of all guarantees of a Guarantor and all Liens on
the property and assets of such Guarantor relating to such Indebtedness, or (ii)
a sale or other disposition of all of the assets of any Guarantor, by way of
merger, consolidation or otherwise, or a sale or other disposition of all of the
capital stock of any Guarantor in compliance with the Indenture to any entity
that is not the Company or a Subsidiary, then such Guarantor (in the event of a
sale or other disposition, by way of such a merger, consolidation or otherwise,
of all of the capital stock of such Guarantor), or the Person acquiring the
property (in the event of such a sale or other disposition of all of the assets
of such Guarantor), will be released and relieved of any obligations under its
Subsidiary Guarantee; provided, however, that any such termination shall occur
only to the extent that all obligations of
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<PAGE> 43
such Guarantor under such Indebtedness and all of its guarantees of, and under
all of its pledges of assets or other security interests which secure,
Indebtedness of the Company shall also terminate upon such release, sale or
transfer and, in the event of any sale or other disposition, that the Net
Proceeds of such sale or other disposition are applied in accordance with the
applicable provisions of the Indenture. See "-- Repurchase at the Option of
Holders -- Asset Sales."
OPTIONAL REDEMPTION
The Notes are not redeemable at the Company's option prior to June 1, 2003.
Thereafter, the Notes are subject to redemption at any time at the option of the
Company, in whole or in part, upon not less than 30 nor more than 60 days'
notice, at the redemption prices (expressed as percentages of principal amount)
set forth below plus accrued and unpaid interest and, in the case of the Old
Notes only, Liquidated Damages, if any, thereon to the applicable redemption
date, if redeemed during the twelve-month period beginning on June 1 of the
years indicated below:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
---- ----------
<S> <C>
2003.............................................. 104.375%
2004.............................................. 102.917%
2005.............................................. 101.458%
2006 and thereafter............................... 100.000%
</TABLE>
Notwithstanding the foregoing, at any time before June 1, 2001, the Company
may on any one or more occasions redeem up to an aggregate of 35% of the
principal amount of Notes outstanding at a redemption price of 108.75% of the
principal amount thereof, plus accrued and unpaid interest, if any, and, in the
case of the Old Notes only, Liquidated Damages, if any, thereon, to the
redemption date, with the net cash proceeds of any Public Equity Offering;
provided that at least 65% of the aggregate principal amount of Notes
outstanding on the Issue Date remain outstanding immediately after each
occurrence of such redemption; and provided, further, that each such redemption
shall occur within 60 days of the date of the closing of such Public Equity
Offering.
SELECTION AND NOTICE
If less than all of the Notes are to be redeemed at any time, selection of
Notes for redemption will be made by the Trustee in compliance with the
requirements of the principal national securities exchange, if any, on which the
Notes are listed, or, if the Notes are not so listed, on a pro rata basis, by
lot or by such method as the Trustee shall deem fair and appropriate; provided
that no Notes of $1,000 or less shall be redeemed in part. Notices of redemption
shall be mailed by first class mail at least 30 but not more than 60 days before
the redemption date to each Holder of Notes to be redeemed at its registered
address. Notices of redemption may not be conditional. If any Note is to be
redeemed in part only, the notice of redemption that relates to such Note shall
state the portion of the principal amount thereof to be redeemed. A new Note in
principal amount equal to the unredeemed portion thereof will be issued in the
name of the Holder thereof upon cancellation of the original Note. Notes called
for redemption become due on the date fixed for redemption. On and after the
redemption date, interest and, in the case of the Old Notes only, Liquidated
Damages, if any, cease to accrue on Notes or portions of them called for
redemption.
MANDATORY REDEMPTION
Except as set forth below under "-- Repurchase at the Option of Holders,"
the Company is not required to make mandatory redemption or sinking fund
payments with respect to the Notes.
REPURCHASE AT THE OPTION OF HOLDERS
Change of Control. Upon the occurrence of a Change of Control, each Holder
of Notes will have the right to require the Company to repurchase all or any
part (equal to $1,000 or an integral multiple thereof) of such Holder's Notes
pursuant to the offer described below (the "Change of Control Offer") at an
offer price
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<PAGE> 44
in cash equal to 101% of the aggregate principal amount thereof plus accrued and
unpaid interest and, in the case of the Old Notes only, Liquidated Damages, if
any, thereon, to the date of purchase (the "Change of Control Payment"). Within
30 days following any Change of Control, the Company will mail a notice to each
Holder describing the transaction or transactions that constitute the Change of
Control and offering to repurchase Notes on the date specified in such notice,
which date shall be no earlier than 30 days and no later than 60 days from the
date such notice is mailed (the "Change of Control Payment Date"), pursuant to
the procedures required by the Indenture and described in such notice. The
Company will comply with the requirements of Rule 14e-1 under the Exchange Act
and any other securities laws and regulations thereunder to the extent such laws
and regulations are applicable in connection with the repurchase of the Notes as
a result of a Change of Control.
On the Change of Control Payment Date, the Company will, to the extent
lawful, (i) accept for payment all Notes or portions thereof properly tendered
pursuant to the Change of Control Offer, (ii) deposit with the Paying Agent an
amount equal to the Change of Control Payment in respect of all Notes or
portions thereof so tendered and (iii) deliver or cause to be delivered to the
Trustee the Notes so accepted together with an Officers' Certificate stating the
aggregate principal amount of Notes or portions thereof being purchased by the
Company. The Paying Agent will promptly mail to each Holder of Notes so tendered
the Change of Control Payment for such Notes, and the Trustee will promptly
authenticate and mail (or cause to be transferred by book entry) to each Holder
a new Note equal in principal amount to any unpurchased portion of the Notes
surrendered, if any; provided that each such new Note will be in a principal
amount of $1,000 or an integral multiple thereof. The Indenture will provide
that, prior to complying with the provisions of this covenant, but in any event
within 90 days following a Change of Control, the Company will either repay all
outstanding Indebtedness or obtain the requisite consents, if any, under all
agreements governing outstanding Indebtedness to permit the repurchase of Notes
required by this covenant. The Company will publicly announce the results of the
Change of Control Offer on or as soon as practicable after the Change of Control
Payment Date.
The Change of Control provisions described above will be applicable whether
or not any other provisions of the Indenture are applicable. Except as described
above with respect to a Change of Control, the Indenture does not contain
provisions that permit the Holders of the Notes to require that the Company
repurchase or redeem the Notes in the event of a takeover, recapitalization or
similar transaction. The definition of Change of Control includes a phrase
relating to the sale, lease, transfer, conveyance or other disposition of "all
or substantially all" of the assets of the Company. There is little case law
interpreting the phrase "all or substantially all" in the context of an
indenture. Because there is no precise established definition of this phrase,
the ability of a holder of Notes to require the Company to repurchase such Notes
as a result of a sale, lease, exchange or other transfer of all or substantially
all of the Company's assets to a Person or a Group may be uncertain.
The Credit Facility limits the ability of the Company to purchase any Notes
and provides that certain change of control events with respect to the Company
would constitute a default thereunder. Any future Credit Facilities or other
agreements relating to Indebtedness to which the Company becomes a party may
contain similar restrictions and provisions. In the event a Change of Control
occurs at a time when the Company is prohibited from purchasing Notes, the
Company could seek the consent of its lenders to the purchase of Notes or could
attempt to refinance the borrowings that contain such prohibition. If the
Company does not obtain such a consent or repay such borrowings, the Company
will remain prohibited from purchasing Notes. In such case, the Company's
failure to purchase tendered Notes would constitute an Event of Default under
the Indenture which would, in turn, constitute a default under the Credit
Facility. In such circumstances, the subordination provisions in the Indenture
would likely restrict payments to the Holders of Notes.
The Company will not be required to make a Change of Control Offer upon a
Change of Control if a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set forth
in the Indenture applicable to a Change of Control Offer made by the Company and
purchases all Notes validly tendered and not withdrawn under such Change of
Control Offer.
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Asset Sales. The Indenture provides that the Company will not, and will not
permit any of its Restricted Subsidiaries to, engage in an Asset Sale unless (i)
the Company or such Restricted Subsidiary, as the case may be, receives
consideration at the time of such Asset Sale at least equal to the fair market
value (which shall be determined in good faith by the Company's Board of
Directors) of the assets or Equity Interests issued or sold or otherwise
disposed of and (ii) at least 75% of the consideration therefor received by the
Company or such Restricted Subsidiary is in the form of cash or Cash
Equivalents; provided that the amount of (x) any liabilities (as shown on the
Company's or such Restricted Subsidiary's most recent balance sheet), of the
Company or any Restricted Subsidiary of the Company (other than contingent
liabilities and liabilities that are by their terms subordinated to the Notes or
any Subsidiary Guarantee) that are assumed by the transferee of any such assets
pursuant to a customary novation agreement that releases the Company or such
Restricted Subsidiary from further liability and (y) any securities, notes or
other obligations received by the Company or any such Restricted Subsidiary from
such transferee that are immediately converted by the Company or such Restricted
Subsidiary into cash (to the extent of the cash received), shall be deemed to be
cash for purposes of this provision and provided, further, that any Asset Sale
pursuant to a condemnation, appropriation or other similar taking, including by
deed in lieu of condemnation, or pursuant to the foreclosure or other
enforcement of a Permitted Lien or exercise by the related lienholder of rights
with respect thereto, including by deed or assignment in lieu of foreclosure
shall not be required to satisfy the conditions set forth in clauses (i) and
(ii) of this paragraph.
Within 270 days after the receipt of any Net Proceeds from an Asset Sale,
the Company or such Restricted Subsidiary, as the case may be, may apply such
Net Proceeds, at its option, (a) to permanently repay Indebtedness for borrowed
money other than Subordinated Indebtedness (and to correspondingly permanently
reduce the commitments with respect thereto in the case of revolving
borrowings), (b) to acquire a controlling interest in another business or all or
substantially all of the assets of a business, engaged in a Permitted Business,
or (c) to acquire other non-current assets to be used in a Permitted Business,
provided that the Company or such Restricted Subsidiary will have complied with
clause (b) or (c) if, within 270 days of such Asset Sale, the Company or such
Restricted Subsidiary shall have commenced and not completed or abandoned an
investment in compliance with clause (b) or (c) and such Investment is
substantially completed within 90 days after the first anniversary of such Asset
Sale. Pending the final application of any such Net Proceeds, the Company may
temporarily reduce Indebtedness under any Credit Facility or otherwise invest
such Net Proceeds in any manner that is not prohibited by the Indenture. Any Net
Proceeds from Asset Sales that are not applied or invested as provided in the
first sentence of this paragraph shall be deemed to constitute "Excess
Proceeds." When the aggregate amount of Excess Proceeds exceeds $10 million, the
Company shall be required to make an offer to all Holders of Notes and other
Indebtedness that ranks by its terms pari passu in right of payment with the
Notes and the terms of which contain substantially similar requirements with
respect to the application of net proceeds from asset sales as are contained in
the Indenture (an "Asset Sale Offer") to purchase on a pro rata basis the
maximum principal amount of the Notes, that is an integral multiple of $1,000,
that may be purchased out of the Excess Proceeds, at an offer price in cash in
an amount equal to 100% of the principal amount thereof plus accrued and unpaid
interest and, in the case of Old Notes only, Liquidated Damages, if any, to the
date of purchase, in accordance with the procedures set forth in the Indenture.
To the extent that the aggregate amount of Notes and other such Indebtedness
tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the
Company may use any remaining Excess Proceeds for general corporate purposes. If
the aggregate principal amount of Notes surrendered by Holders thereof exceeds
the amount of Excess Proceeds, the Trustee shall select the Notes to be
purchased on a pro rata basis. Upon completion of such offer to purchase, the
amount of Excess Proceeds shall be reset at zero.
CERTAIN COVENANTS
Restricted Payments. The Company will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly: (i) declare or pay any
dividend or make any other payment or distribution on account of the Company's
or any of its Restricted Subsidiaries' Equity Interests (including, without
limitation, any payment in connection with any merger or consolidation involving
the Company) or to the direct or indirect holders of the Company's or any of its
Restricted Subsidiaries' Equity Interests in their capacity as such
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<PAGE> 46
(other than dividends or distributions payable in Equity Interests (other than
Disqualified Stock) of the Company); (ii) purchase, redeem or otherwise acquire
or retire for value (including without limitation, in connection with any merger
or consolidation involving the Company) any Equity Interests of the Company
(other than any such Equity Interests owned by a Wholly Owned Restricted
Subsidiary of the Company); (iii) make any payment on or with respect to, or
purchase, redeem, defease or otherwise acquire or retire for value any
Indebtedness that is subordinated to the Notes, except a payment of interest or
principal at Stated Maturity; or (iv) make any Restricted Investment (all such
payments and other actions set forth in clauses (i) through (iv) above being
collectively referred to as "Restricted Payments"), unless, at the time of and
after giving effect to such Restricted Payment:
(a) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof; and
(b) the Company would, at the time of such Restricted Payment and
after giving pro forma effect thereto as if such Restricted Payment had
been made at the beginning of the applicable four-quarter period, have been
permitted to incur at least $1.00 of additional Indebtedness pursuant to
the Fixed Charge Coverage Ratio test set forth in the first paragraph of
the covenant described below under the caption "-- Incurrence of
Indebtedness and Issuance of Preferred Stock"; and
(c) such Restricted Payment, together with the aggregate amount of all
other Restricted Payments made by the Company or any of its Restricted
Subsidiaries after the Issue Date (excluding Restricted Payments permitted
by clauses (ii), (iii), (iv), (v), (vi) or (vii) of the next succeeding
paragraph), is less than the sum of (i) 50% of the Consolidated Net Income
of the Company for the period (taken as one accounting period) from the
beginning of the first fiscal quarter immediately following the Issue Date
to the end of the Company's most recently ended fiscal quarter for which
internal financial statements are available at the time of such Restricted
Payment (or, if such Consolidated Net Income for such period is a deficit,
less 100% of such deficit), plus (ii) 100% of the aggregate net proceeds
received by the Company (including the fair market value of non-cash
proceeds as determined in good faith by the Board of Directors of the
Company less issuance costs) from the issue or sale, in either case, since
the Issue Date of (A) Equity Interests of the Company (other than
Disqualified Stock), or (B) Disqualified Stock or debt securities of the
Company that have been converted into such Equity Interests (other than
Equity Interests (or Disqualified Stock or convertible or exchangeable debt
securities) sold to a Restricted Subsidiary of the Company and other than
Disqualified Stock or debt securities that have been converted or exchanged
into Disqualified Stock), plus (iii) in case any Unrestricted Subsidiary
has been redesignated a Restricted Subsidiary pursuant to the terms of the
Indenture or has been merged, consolidated or amalgamated with or into, or
transfers or conveys assets to or is liquidated into, the Company or a
Restricted Subsidiary and provided that no Default or Event of Default
shall have occurred and be continuing or would occur as a consequence
thereof, the lesser of (A) the book value (determined in accordance with
GAAP) at the date of such redesignation, combination or transfer of the
aggregate Investments made by the Company and its Restricted Subsidiaries
in such Unrestricted Subsidiary (or of the assets transferred or conveyed,
as applicable) and (B) the fair market value of such Investment in such
Unrestricted Subsidiary at the time of such redesignation, combination or
transfer (or of the assets transferred or conveyed, as applicable), in each
case as determined in good faith by the Board of Directors of the Company,
whose determination shall be conclusive and evidenced by a resolution of
such Board and, in each case, after deducting any Indebtedness associated
with the Unrestricted Subsidiary so designated or combined or with the
assets so transferred or conveyed, plus (iv) to the extent not already
included in Consolidated Net Income for such period, without duplication,
any Restricted Investment that was made after the Issue Date is sold for
cash or otherwise liquidated or repaid for cash, the lesser of (A) the cash
return of capital with respect to such Restricted Investment (less the cost
of disposition, if any) and (B) the initial amount of such Restricted
Investment, plus (v) $10 million.
The foregoing provisions shall not prohibit (i) the payment of any dividend
within 60 days after the date of declaration thereof, if at said date of
declaration such payment would have complied with the provisions of the
Indenture; (ii) the redemption, repurchase, retirement, defeasance or other
acquisition of any Indebted-
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ness which is subordinated to the Notes or Equity Interests of the Company in
exchange for, or out of the net cash proceeds of the substantially concurrent
sale (other than to a Restricted Subsidiary of the Company) of, Equity Interests
of the Company (other than any Disqualified Stock); provided that the amount of
any such net cash proceeds that are utilized for any such redemption,
repurchase, retirement, defeasance or other acquisition shall be excluded from
clause (c)(ii) of the preceding paragraph; (iii) the defeasance, redemption,
repurchase or other acquisition of Indebtedness which is subordinated to the
Notes with the net cash proceeds from an incurrence of Permitted Refinancing
Indebtedness; (iv) the payment of any dividend or distribution by a Restricted
Subsidiary of the Company to the holders of its common Equity Interests on a pro
rata basis; (v) the repurchase, redemption or other acquisition or retirement
for value of any Equity Interests of the Company or any Restricted Subsidiary of
the Company held by any employee or director of the Company (or any of its
Subsidiaries), or any former employee or director of the Company (or any of its
Subsidiaries) issued pursuant to any management equity plan or stock option plan
or any other management or employee benefit plan, agreement or trust; provided,
however, that the aggregate price paid for all such repurchased, redeemed,
acquired or retired Equity Interests pursuant to this clause (v) shall not
exceed $1 million in any twelve-month period; (vi) repurchases of Equity
Interests deemed to occur upon the cashless exercise of stock options; and (vii)
reasonable and customary directors' fees to the members of the Company's Board
of Directors, provided that such fees are consistent with past practice,
provided, further, that, with respect to clauses (ii), (iii), (v), (vi) and
(vii) above, no Default or Event of Default shall have occurred and be
continuing immediately after such transaction.
In determining whether any Restricted Payment is permitted by the foregoing
covenant, the Company may allocate or reallocate all or any portion of such
Restricted Payment among the clauses (i) through (vii) of the preceding
paragraph or among such clauses and the first paragraph of this covenant
including clauses (a), (b) and (c), provided that at the time of such allocation
or reallocation, all such Restricted Payments, or allocated portions thereof,
would be permitted under the various provisions of the foregoing covenant.
The amount of all Restricted Payments (other than cash) shall be the Fair
Market Value (as evidenced by a resolution of the Board of Directors of the
Company set forth in an Officers' Certificate delivered to the Trustee) on the
date of the Restricted Payment of the asset(s) or securities proposed to be
transferred or issued by the Company or such Restricted Subsidiary, as the case
may be, pursuant to the Restricted Payment, such determination to be based upon
an opinion or appraisal by an Independent Financial Advisor if the fair market
value of any Restricted Payment is greater than $10 million. Not later than (i)
the end of any calendar quarter in which any Restricted Payment is made or (ii)
the making of a Restricted Payment which, when added to the sum of all previous
Restricted Payments made in a calendar quarter, would cause the aggregate of all
Restricted Payments made in such quarter to exceed $5 million, the Company shall
deliver to the Trustee an Officers' Certificate stating that such Restricted
Payment is permitted and setting forth the basis upon which the calculations
required by this covenant were computed, which calculations may be based upon
the Company's latest available financial statements.
The Board of Directors may designate any Unrestricted Subsidiary to be a
Restricted Subsidiary only if (i) immediately after giving effect to such
designation, the Company is able to incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test under the first
paragraph of the covenant described below under the caption "-- Incurrence of
Indebtedness and Issuance of Preferred Stock", (ii) immediately before and
immediately after giving effect to such designation, no Default or Event of
Default shall have occurred and be continuing and (iii) the Company certifies
that such designation complies with this covenant. Any such designation by the
Board of Directors shall be evidenced to the Trustee by promptly filing with the
Trustee a copy of the resolution giving effect to such designation and an
Officers' Certificate certifying that such designation complied with the
foregoing provisions. Notwithstanding the foregoing, if, at any time, any
Unrestricted Subsidiary would fail to meet the requirements under the definition
of Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted
Subsidiary for purposes of the Indenture and any Indebtedness of such Subsidiary
shall be deemed to be incurred as of such date.
For purposes of making the determination as to whether such designation
would cause a Default or Event of Default, all outstanding Investments by the
Company and its Restricted Subsidiaries (except to the extent
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<PAGE> 48
repaid in cash) in the Subsidiary so designated will be deemed to be Restricted
Payments at the time of such designation and will reduce the amount available
for Restricted Payments under the first paragraph of this covenant. All such
outstanding Investments will be deemed to constitute Investments in an amount
equal to the greatest of (i) the net book value (determined in accordance with
GAAP) of such Investments at the time of such designation, (ii) the fair market
value of such Investments at the time of such designation and (iii) the original
fair market value of such Investments at the time they were made. Such
designation will only be permitted if such Restricted Payment would be permitted
at such time and if such Restricted Subsidiary otherwise meets the definition of
an Unrestricted Subsidiary.
Incurrence of Indebtedness and Issuance of Preferred Stock. The Indenture
provides that the Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable, contingently or otherwise,
with respect to (collectively, "incur") any Indebtedness (including Acquired
Debt) and that the Company shall not issue any Disqualified Stock and shall not
permit any of its Restricted Subsidiaries to issue any shares of preferred
stock; provided, however, that (a) the Company and any Guarantor may incur
Indebtedness (including Acquired Debt), (b) the Company may issue shares of
Disqualified Stock or (c) a Restricted Subsidiary may incur Acquired Debt, if,
in each case, the Company's Fixed Charge Coverage Ratio for the Company's most
recently ended four full fiscal quarters for which internal financial statements
are available immediately preceding the date on which such additional
Indebtedness is incurred or such Disqualified Stock is issued would have been at
least 2.25 to 1, determined on a pro forma basis (including a pro forma
application of the net proceeds therefrom), as if the additional Indebtedness
had been incurred, or the Disqualified Stock had been issued, as the case may
be, at the beginning of such four-quarter period.
The provisions of the first paragraph of this covenant shall not apply to
the incurrence of any of the following items of Indebtedness (collectively,
"Permitted Debt"):
(i) the incurrence by the Company and the Guarantors of Indebtedness
represented by the Notes and the Subsidiary Guarantees;
(ii) the incurrence by the Company of Indebtedness and letters of
credit pursuant to any Credit Facility (with letters of credit being deemed
to have a principal amount equal to the maximum potential liability of the
Company thereunder) in an aggregate principal amount not to exceed $75.0
million, less the sum of (a) the amount of Purchase Money Indebtedness
incurred by the Company or any of its Restricted Subsidiaries under clause
(vi) below and outstanding and (b) the aggregate amount of all proceeds of
Assets Sales that have been applied since the Issue Date to permanently
reduce the outstanding amount of such Indebtedness pursuant to the covenant
described above under the caption "-- Repurchase at the Option of
Holders -- Asset Sales";
(iii) the incurrence by the Company or any of its Restricted
Subsidiaries of Existing Indebtedness;
(iv) the incurrence by the Company or any of its Restricted
Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the
net proceeds of which are used to extend, refinance, renew, replace,
defease or refund, Indebtedness that was permitted by the Indenture to be
incurred;
(v) the incurrence by the Company or any of its Restricted
Subsidiaries of intercompany Indebtedness between or among the Company and
any of its Restricted Subsidiaries; provided, however, that (i) if the
Company or any Guarantor is the obligor on such Indebtedness, such
Indebtedness is expressly subordinate to the payment in full of all
Obligations with respect to the Notes and (ii) (A) any subsequent issuance
or transfer of Equity Interests that results in any such Indebtedness being
held by a Person other than the Company or a Restricted Subsidiary and (B)
any sale or other transfer of any such Indebtedness to a Person that is not
either the Company or a Restricted Subsidiary shall be deemed, in each
case, to constitute an incurrence of such Indebtedness by the Company or
such Restricted Subsidiary, as the case may be;
(vi) the incurrence by the Company or any of its Restricted
Subsidiaries of Purchase Money Indebtedness, in an aggregate principal
amount (or amount of Capital Lease Obligation), including all
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Permitted Refinancing Indebtedness incurred to refund, refinance or replace
Purchase Money Indebtedness incurred pursuant to this clause (vi), not to
exceed $45.0 million at any time outstanding.
(vii) the incurrence by the Company or any of its Restricted
Subsidiaries of obligations in the ordinary course of business under (A)
trade letters of credit which are to be repaid in full not more than one
year after the date on which such Indebtedness is originally incurred to
finance the purchase of goods by the Company or a Restricted Subsidiary of
the Company; (B) standby letters of credit issued for the purpose of
supporting (1) workers' compensation liabilities of the Company or any of
its Restricted Subsidiaries, or (2) performance, payment, deposit or surety
obligations of the Company or any of its Restricted Subsidiaries; and (C)
bid, advance payment and performance bonds and surety bonds of the Company
and its Restricted Subsidiaries, and refinancings thereof;
(viii) the incurrence by the Company or any of its Restricted
Subsidiaries of (x) Financial Hedging Obligations that are incurred for the
purpose of fixing or hedging interest rate risk (including with respect to
any floating rate Indebtedness that is permitted by the terms of the
Indenture to be outstanding), but only to the extent such obligations do
not exceed 105% of the aggregate principal amount of the Indebtedness to
which such obligations relate, and (y) Currency Hedging Obligations in
connection with the conduct of the Permitted Business in currencies other
than the United States Dollar, and, in the case of each of clauses (x) and
(y) not for speculative purposes and incurred in the ordinary course of
business consistent with prudent business practices;
(ix) the guarantee by the Company or any Restricted Subsidiary of the
Company of Indebtedness of the Company or a Restricted Subsidiary of the
Company that was permitted to be incurred by another provision of this
covenant; provided, that the guarantee of any Indebtedness under this
clause (ix) by a Restricted Subsidiary of the Company that ceases to be a
Restricted Subsidiary shall be deemed a Restricted Investment at the time
such Restricted Subsidiary's status terminates in an amount equal to the
maximum principal amount so guaranteed, for so long as, and to the extent
that, such guarantee remains outstanding;
(x) the issuance by a Restricted Subsidiary of the Company of
preferred stock to the Company or to any of its Wholly Owned Restricted
Subsidiaries; provided, however, that any subsequent event or issuance or
transfer of any Equity Interests that results in the owner of such
preferred stock ceasing to be the Company or any of its Wholly Owned
Restricted Subsidiaries or any subsequent transfer of such preferred stock
to a Person, other than the Company or one of its Restricted Subsidiaries,
shall be deemed to be an issuance of preferred stock by such Subsidiary
that was not permitted by this clause (x); and
(xi) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness (in addition to Indebtedness permitted by any
other clause of this paragraph) in an aggregate principal amount (or
accreted value, as applicable) at any time outstanding not to exceed $10
million.
For purposes of determining compliance with this covenant, in the event
that an item of Indebtedness meets the criteria of more than one of the
categories of Permitted Debt described in clauses (i) through (xi) above or is
entitled to be incurred pursuant to the first paragraph of this covenant, the
Company shall, in its sole discretion, classify such item of Indebtedness in any
manner that complies with this covenant and such item of Indebtedness shall be
treated as having been incurred pursuant to only one of such clauses or pursuant
to the first paragraph hereof. Accrual of interest, the accretion of accreted
value and the payment of interest in the form of additional Indebtedness will
not be deemed to be an incurrence of Indebtedness for purposes of this covenant.
Liens. The Indenture provides that the Company will not, and will not
permit any of its Restricted Subsidiaries to, directly or indirectly, create,
incur, assume or suffer to exist any Lien on any asset now owned or hereafter
acquired, or any income or profits therefrom or assign or convey any right to
receive income therefrom, except Permitted Liens, to secure (a) any Indebtedness
of the Company or such Restricted Subsidiary, unless prior to, or
contemporaneously therewith, the Notes are equally and ratably secured, or (b)
any Indebtedness of any Guarantor, unless prior to, or contemporaneously
therewith, the Subsidiary
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<PAGE> 50
Guarantees are equally and ratably secured; provided, however, that if such
Indebtedness is expressly subordinated to the Notes or any Subsidiary
Guarantees, the Lien securing such Indebtedness will be subordinated and junior
to the Lien securing the Notes or any Subsidiary Guarantees, as the case may be,
with the same relative priority as such Indebtedness has with respect to the
Notes or any Subsidiary Guarantees.
Dividend and Other Payment Restrictions Affecting Subsidiaries. The
Indenture provides that the Company will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or
suffer to exist or become effective any encumbrance or restriction on the
ability of any Restricted Subsidiary of the Company or the Company to (i)(x) pay
dividends or make any other distributions to the Company or any of its
Restricted Subsidiaries (1) on its Capital Stock or (2) with respect to any
other interest or participation in, or measured by, its profits, or (y) pay any
Indebtedness owed to the Company or any of its Restricted Subsidiaries, (ii)
make loans or advances to the Company or any of its Restricted Subsidiaries or
(iii) transfer any of its properties or assets to the Company or any of its
Restricted Subsidiaries, except for such encumbrances or restrictions existing
under or by reason of (a) the Indenture, the Notes, Existing Indebtedness and
the Credit Facility as in effect on the Issue Date and any future Liens that may
be permitted to be granted under any other provisions of the Indenture (provided
however, that if the New Credit Facility is established on or prior to the Issue
Date, the foregoing exception shall not apply thereto), (b) applicable law, (c)
any instrument governing Indebtedness or Capital Stock of a Person acquired by
the Company or any of its Restricted Subsidiaries as in effect at the time of
such acquisition (except with respect to Indebtedness incurred in connection
with or in contemplation of such acquisition), which encumbrance or restriction
is not applicable to any Person, or the properties or assets of any Person,
other than the Person, or the property or assets of the Person or such Person's
subsidiaries, so acquired, provided that, in the case of Indebtedness, such
Indebtedness was permitted by the terms of the Indenture to be incurred, (d)
restrictions of the nature described in clause (iii) above by reason of
customary non-assignment provisions in contracts, agreements, and leases entered
into in the ordinary course of business and consistent with past practices, (e)
purchase money obligations for property acquired in the ordinary course of
business that impose restrictions of the nature described in clause (iii) above
on the property so acquired, (f) any restriction with respect to a Restricted
Subsidiary imposed pursuant to an agreement entered into for the sale or
disposition of all or substantially all of the Capital Stock or assets of such
Restricted Subsidiary pending the closing of such sale or disposition, (g)
agreements relating to secured Indebtedness otherwise permitted to be incurred
pursuant to the covenants described under the Indebtedness otherwise permitted
to be incurred pursuant to the covenants described under the captions
"-- Incurrence of Indebtedness and Issuance of Preferred Stock" and "-- Liens"
that limit the right of the debtor to dispose of assets securing such
Indebtedness and (h) Permitted Refinancing Indebtedness in respect of
Indebtedness referred to in clause (a), (c) and (e) of this paragraph, provided
that the restrictions contained in the agreements governing such Permitted
Refinancing Indebtedness are no more restrictive than those contained in the
agreements governing the Indebtedness being refinanced.
Merger, Consolidation, or Sale of Assets. The Indenture provides that the
Company will not consolidate or merge with or into (whether or not the Company
is the surviving corporation), or sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all of its properties or assets in one
or more related transactions, to another corporation, Person or entity unless
(i) the Company is the surviving corporation or the entity or the Person formed
by or surviving any such consolidation or merger (if other than the Company) or
to which such sale, assignment, transfer, lease, conveyance or other disposition
shall have been made is a corporation organized or existing under the laws of
the United States, any state thereof or the District of Columbia; (ii) the
entity or Person formed by or surviving any such consolidation or merger (if
other than the Company) or the entity or Person to which such sale, assignment,
transfer, lease, conveyance or other disposition shall have been made assumes
all the obligations of the Company under the Notes and the Indenture pursuant to
a supplemental indenture in a form reasonably satisfactory to the Trustee; (iii)
immediately before and after such transaction no Default or Event of Default
shall have occurred; and (iv) except in the case of a merger of the Company with
or into a Wholly Owned Restricted Subsidiary, the Company or the entity or
Person formed by or surviving any such consolidation or merger (if other than
the Company), or to which such sale, assignment, transfer, lease, conveyance or
other disposition shall have been made (A) will have Consolidated Net Worth
immediately after the transaction equal to or greater than the
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Consolidated Net Worth of the Company immediately preceding the transaction and
(B) will, at the time of such transaction and after giving pro forma effect
thereto as if such transaction had occurred at the beginning of the applicable
four-quarter period, be permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the
first paragraph of covenant described above under the caption "-- Incurrence of
Indebtedness and Issuance of Preferred Stock."
Transactions with Affiliates. The Indenture provides that the Company will
not, and will not permit any of its Restricted Subsidiaries to, directly or
indirectly, make any payment to, or sell, lease, transfer or otherwise dispose
of any properties or assets to, or purchase any property or assets from, or
enter into or make or amend any transaction, contract, agreement, understanding,
loan, advance or guarantee with, or for the benefit of, any Affiliate of any
such Person (each of the foregoing, an "Affiliate Transaction"), unless (i) such
Affiliate Transaction is on terms that are no less favorable to the Company or
the relevant Restricted Subsidiary than those that would have been obtained in a
comparable transaction by the Company or such Restricted Subsidiary with an
unrelated Person and (ii) the Company delivers to the Trustee (a) with respect
to any Affiliate Transaction or series of related Affiliate Transactions
involving aggregate consideration in excess of $1 million, a resolution of its
Board of Directors set forth in an Officers' Certificate certifying that such
Affiliate Transaction complies with clause (i) above, (b) with respect to any
Affiliate Transaction or series of related Affiliate Transaction involving
aggregate consideration in excess of $5 million, a resolution of its Board of
Directors set forth in an Officers' Certificate certifying that such Affiliate
Transaction complies with clause (i) above and that such Affiliate Transaction
has been approved by a majority of the disinterested members of its Board of
Directors, and (c) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate consideration in excess of
$10 million, an opinion as to the fairness to the Holders of such Affiliate
Transaction from a financial point of view issued by an Independent Financial
Advisor; provided that none of the following shall be deemed to be Affiliate
Transactions: (1) any employment agreement entered into by the Company or any of
its Restricted Subsidiaries in the ordinary course of business and consistent
with the past practice of the Company or such Restricted Subsidiary, as the case
may be, (2) transactions between or among the Company and/or its Restricted
Subsidiaries, (3) Restricted Payments that are permitted by the covenant
described above under the caption "-- Restricted Payments", (4) fees and
compensation paid to, and indemnity provided on behalf of, officers, directors,
employees or consultants and of its Restricted Subsidiaries in their capacity as
such, to the extent such fees and compensation are reasonable and customary, (5)
advances to employees for moving, entertainment and travel expenses, drawing
accounts and similar expenditures in the ordinary course of business and
consistent with past practices, (6) maintenance in the ordinary course of
business of customary benefit programs or arrangements for employees, officers
or directors, including vacation plans, health and life insurance plans,
deferred compensation plans and retirement or savings plans and similar plans,
(7) fees and compensation paid to, and indemnity provided on behalf of,
officers, directors or employees of the Company or any of its Restricted
Subsidiaries, as determined by the Board of Directors of the Company or of any
such Restricted Subsidiary, to the extent such fees and compensation are
reasonable and customary as determined by the Board of Directors of the Company
or such Restricted Subsidiary, and (8) transactions between the Company and its
Restricted Subsidiaries, on the one hand, and any Permitted Holders, on the
other, for the purposes of providing investment banking, financial advisory,
banking and other financial services, to the extent such fees and compensation
to such Permitted Holders in such transactions are reasonable and customary as
determined by the Board of Directors of the Company or such Restricted
Subsidiary.
Sale-and-Leaseback Transactions. The Indenture provides that the Company
will not, and will not permit any of its Restricted Subsidiaries to, enter into
any sale-and-leaseback transaction; provided, however, that the Company or any
Restricted Subsidiary, as applicable, may enter into a sale-and-leaseback
transaction if (i) the Company or such Restricted Subsidiary could have (a)
incurred Indebtedness in an amount equal to the Attributable Indebtedness
relating to such sale-and-leaseback transaction pursuant to the covenant
described above under the caption "-- Incurrence of Indebtedness and Issuance of
Preferred Stock" and (b) incurred a Lien to secure such Indebtedness pursuant to
the covenant described under the caption "-- Liens," (ii) the gross cash
proceeds of such sale-and-leaseback transaction are at least equal to the Fair
Market Value (as determined in accordance with the definition of such term, the
results of which determination shall be set forth in an Officers' Certificate
delivered to the Trustee) of the property that is the
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subject of such sale-and-leaseback transaction and (iii) the transfer of assets
in such sale-and-leaseback transaction is permitted by, and the Company applies
the proceeds of such transaction in compliance with, the covenant described
above under the caption "-- Repurchase at the Option of Holders -- Asset Sales."
Business Activities. The Indenture provides that the Company will not, and
the Company will not permit any of its Restricted Subsidiaries to, directly or
indirectly, engage in any line of business other than a Permitted Business,
except to such extent as would not be material to the Company and its Restricted
Subsidiaries taken as a whole.
Payments for Consent. The Indenture provides that the Company will not, and
will not permit any of its Restricted Subsidiaries to, directly or indirectly,
pay or cause to be paid any consideration, whether by way of interest, fee or
otherwise, to any Holder of any Notes for or as an inducement to any consent,
waiver or amendment of any of the terms or provisions of the Indenture, the
Subsidiary Guarantees or the Notes unless such consideration is offered to be
paid or is paid to all Holders of the Notes that consent, waive or agree to
amend in the time frame set forth in the solicitation documents relating to such
consent, waiver or agreement.
Reports. The Indenture will provide that whether or not the Company is
required by the rules and regulations of the Commission, so long as any Notes
are outstanding, the Company will furnish to each of the Holders of Notes (i)
all quarterly and annual financial information that would be required to be
contained in a filing with the Commission on Forms 10-Q and 10-K if the Company
were required to file such financial information, including a "Management's
Discussion and Analysis of Financial Condition and Results of Operations" that
describes the financial condition and results of operations of the Company and
any consolidated Subsidiaries and, with respect to the annual information only,
reports thereon by the Company's independent public accountants (which shall be
firm(s) of established national reputation and (ii) all information that would
be required to be filed with the Commission on Form 8-K if the Company were
required to file such reports. All such information and reports shall be
delivered to the Holders of Notes on or prior to the dates on which such filings
would have been required to be made had the Company been subject to the rules
and regulations of the Commission. In addition, whether or not required by the
rules and regulations of the Commission, the Company shall file a copy of all
such information and reports with the Commission for public availability within
the time periods specified in the Commission's rules and regulations (unless the
Commission will not accept such a filing) and make such information available to
securities analysts and prospective investors upon request. In addition, the
Company has agreed that, for so long as any Old Notes remain outstanding, they
will furnish to the Holders and to securities analysts and prospective
investors, upon their request, the information required to be delivered pursuant
to Rule 144A(d)(4) under the Securities Act.
EVENTS OF DEFAULT AND REMEDIES
The Indenture provides that each of the following constitutes an Event of
Default: (i) default for 30 days in the payment when due of interest on, or, in
the case of the Old Notes only, Liquidated Damages with respect to, the Notes,
(ii) default in payment when due of the principal of or premium, if any, on the
Notes; (iii) failure by the Company or any of its Restricted Subsidiaries to
comply with the provisions described under the captions "-- Certain
Covenants -- Restricted Payments," "-- Certain Covenants -- Incurrence of
Indebtedness and Issuance of Preferred Stock," "-- Certain Covenants -- Merger,
Consolidation, or Sale of Assets," and "-- Repurchase at the Option of Holders";
(iv) failure by the Company or any of its Restricted Subsidiaries for 30 days
after notice to comply with any of its other agreements in the Indenture or the
Notes; (v) default under any mortgage, indenture or instrument under which there
may be issued or by which there may be secured or evidenced any Indebtedness for
money borrowed by the Company or any of its Restricted Subsidiaries (or the
payment of which is guaranteed by the Company or any of its Restricted
Subsidiaries) whether such Indebtedness or guarantee now exists, or is created
after the date of the Indenture, which default (a) is caused by a failure to pay
principal of or premium, if any, or interest on such Indebtedness prior to the
expiration of the grace period provided in such Indebtedness on the date of such
default (a "Payment Default") or (b) results in the acceleration of such
Indebtedness prior to its express maturity and, in each case, the principal
amount of any such Indebtedness, together with the principal amount of any other
such Indebtedness under which there has been a Payment Default or the maturity
of which has been so accelerated, aggregates without duplication $5 million or
more and such default shall not have been cured or acceleration
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rescinded within five business days after such occurrences; (vi) failure by the
Company or any of its Restricted Subsidiaries to pay final judgments aggregating
in excess of $5 million (excluding amounts covered by insurance), which
judgments are not paid, discharged or stayed for a period of 60 days; (vii)
certain events of bankruptcy or insolvency with respect to the Company or any of
its Restricted Subsidiaries or Significant Subsidiaries; and (viii) except as
permitted by the Indenture, any Subsidiary Guarantee shall be held in any
judicial proceeding to be unenforceable or invalid or shall cease for any reason
to be in full force and effect or any Guarantor, or any Person acting on behalf
of any Guarantor, shall deny or disaffirm its obligations under its Subsidiary
Guarantee (other than by reason of the termination of the Indenture or the
release of any such Subsidiary Guarantee in accordance with the Indenture).
If any Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the then outstanding Notes may
declare all the Notes to be due and payable immediately. Notwithstanding the
foregoing, in the case of an Event of Default arising from certain events of
bankruptcy or insolvency, with respect to the Company, any Significant
Subsidiary or any group of Subsidiaries that, taken together, would constitute a
Significant Subsidiary, all outstanding Notes will become due and payable
without further action or notice. Holders of the Notes may not enforce the
Indenture or the Notes except as provided in the Indenture. Subject to certain
limitations, Holders of a majority in principal amount of the then outstanding
Notes may direct the Trustee in its exercise of any trust or power. The Trustee
may withhold from Holders of the Notes notice of any continuing Default or Event
of Default (except a Default or Event of Default relating to the payment of
principal or interest or, in the case of the Old Notes only, Liquidated Damages)
if it determines that withholding notice is in their interest.
The Holders of a majority in aggregate principal amount of the Notes then
outstanding by notice to the Trustee may on behalf of the Holders of all of the
Notes waive any existing Default or Event of Default and its consequences under
the Indenture except a continuing Default or Event of Default in the payment of
interest and, in the case of the Old Notes only, Liquidated Damages, if any, on,
or the principal of, the Notes.
The Company is required to deliver to the Trustee annually a statement
regarding compliance with the Indenture, and the Company is required upon
becoming aware of any Default or Event of Default, to deliver to the Trustee a
statement specifying such Default or Event of Default.
NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS
No director, officer, employee, incorporator or stockholder of the Company
or the Guarantors, as such, shall have any liability for any obligations of the
Company under the Notes, the Subsidiary Guarantees or the Indenture or for any
claim based on, in respect of, or by reason of, such obligations or their
creation. Each Holder of Notes by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for issuance of
the Notes. Such waiver may not be effective to waive liabilities under the
federal securities laws and it is the view of the Commission that such a waiver
is against public policy.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
The Company may, at its option and at any time, elect to have all of its
obligations discharged with respect to the outstanding Notes ("Legal
Defeasance") except for (i) the rights of Holders of outstanding Notes to
receive payments in respect of the principal of, premium, if any, and interest
and, in the case of the Old Notes only, Liquidated Damages, if any, on such
Notes when such payments are due from the trust referred to below, (ii) the
Company's obligations with respect to the Notes concerning issuing temporary
Notes, registration of Notes, mutilated, destroyed, lost or stolen Notes and the
maintenance of an office or agency for payment and money for security payments
held in trust, (iii) the rights, powers, trusts, duties and immunities of the
Trustee, and the Company's obligations in connection therewith and (iv) the
Legal Defeasance provisions of the Indenture. In addition, the Company may, at
its option and at any time, elect to have the obligations of the Company
released with respect to certain covenants that are described in the Indenture
("Covenant Defeasance") and thereafter any omission to comply with such
obligations shall not constitute a Default or Event of Default with respect to
the Notes. In the event Covenant Defeasance occurs,
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<PAGE> 54
certain events (not including non-payment, bankruptcy, receivership,
rehabilitation and insolvency events) described under "Events of Default" will
no longer constitute an Event of Default with respect to the Notes.
In order to exercise either Legal Defeasance or Covenant Defeasance, (i)
the Company must irrevocably deposit with the Trustee, in trust, for the benefit
of the Holders of the Notes, cash in U.S. dollars, non-callable Government
Securities, or a combination thereof, in such amounts as will be sufficient, in
the opinion of a nationally recognized firm of independent public accountants,
to pay the principal of, premium, if any, and interest and, in the case of the
Old Notes only, Liquidated Damages, if any, on the outstanding Notes on the
stated maturity or on the applicable redemption date, as the case may be, and
the Company must specify whether the Notes are being defeased to maturity or to
a particular redemption date; (ii) in the case of Legal Defeasance, the Company
shall have delivered to the Trustee an opinion of counsel in the United States
reasonably acceptable to the Trustee confirming that (A) the Company has
received from, or there has been published by, the Internal Revenue Service a
ruling or (B) since the date of the Indenture, there has been a change in the
applicable federal income tax law, in either case to the effect that, and based
thereon such opinion of counsel shall confirm that, the Holders of the
outstanding Notes will not recognize income, gain or loss for federal income tax
purposes as a result of such Legal Defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same times as
would have been the case if such Legal Defeasance had not occurred; (iii) in the
case of Covenant Defeasance, the Company shall have delivered to the Trustee an
opinion of counsel in the United States reasonably acceptable to the Trustee
confirming that the Holders of the outstanding Notes will not recognize income,
gain or loss for federal income tax purposes as a result of such Covenant
Defeasance and will be subject to federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such Covenant
Defeasance had not occurred; (iv) no Default or Event of Default shall have
occurred and be continuing on the date of such deposit (other than a Default or
Event of Default resulting from the borrowing of funds to be applied to such
deposit) or insofar as Events of Default from bankruptcy or insolvency events
are concerned, at any time in the period ending on the 91st day after the date
of deposit; (v) such Legal Defeasance or Covenant Defeasance will not result in
a breach or violation of, or constitute a default under any material agreement
or instrument (other than the Indenture) to which the Company or any of its
Restricted Subsidiaries is a party or by which the Company or any of its
Restricted Subsidiaries is bound; (vi) the Company must have delivered to the
Trustee an opinion of counsel to the effect that after the 91st day following
the deposit, the trust funds will not be subject to the effect of any applicable
bankruptcy, insolvency, reorganization or similar laws affecting creditors'
rights generally; (vii) the Company must deliver to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the intent
of preferring the Holders of Notes over the other creditors of the Company with
the intent of defeating, hindering, delaying or defrauding creditors of the
Company or others; and (viii) the Company must deliver to the Trustee an
Officers' Certificate and an opinion of counsel, each stating that all
conditions precedent provided for relating to the Legal Defeasance or the
Covenant Defeasance have been complied with.
SATISFACTION AND DISCHARGE
The Indenture will be discharged and will cease to be of further effect as
to all Notes issued thereunder, when (a) either (i) all such Notes theretofore
authenticated and delivered (except lost, stolen or destroyed Notes which have
been replaced or paid and Notes for whose payment money has heretofore been
deposited in trust and thereafter repaid to the Company) have been delivered to
the Trustee for cancellation; or (ii) all such Notes not theretofore delivered
to such Trustee for cancellation have become due and payable by reason of the
making of a notice of redemption or otherwise or will become due and payable
within one year and the Company has irrevocably deposited or caused to be
deposited with such Trustee as trust funds in trust solely for the benefit of
the Holders, cash in U.S. dollars, non-callable Government Securities, or a
combination thereof, in such amounts as will be sufficient without consideration
of any reinvestment of interest, to pay and discharge the entire indebtedness on
such Notes not theretofore delivered to the Trustee for cancellation for
principal, premium, if any, and accrued interest to the date of maturity or
redemption; (b) no Default or Event of Default with respect to the Indenture or
the Notes shall have occurred and be continuing on the date of such deposit or
shall occur as a result of such deposit and such deposit will not result in a
breach or violation of, or constitute a default under, any other instrument to
which the Company is a party or by which the
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Company is bound; (c) the Company has paid or caused to be paid all sums payable
by it under the Indenture; and (d) the Company has delivered irrevocable
instructions to the Trustee under the Indenture to apply the deposited money
toward the payment of such Notes at maturity or the redemption date, as the case
may be. In addition, the Company must deliver an Officers' Certificate and an
opinion of counsel to the Trustee stating that all conditions precedent to
satisfaction and discharge have been satisfied.
TRANSFER AND EXCHANGE
A Holder may transfer or exchange Notes in accordance with the Indenture.
The Registrar and the Trustee may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and the Company may
require a Holder to pay any taxes and fees required by law or permitted by the
Indenture. The Company is not required to transfer or exchange any Note selected
for redemption. Also, the Company is not required to transfer or exchange any
Note for a period of 15 days before a selection of Notes to be redeemed.
The registered Holder of a Note will be treated as the owner of it for all
purposes.
AMENDMENT, SUPPLEMENT AND WAIVER
Except as provided in the next two succeeding paragraphs, the Indenture,
the Notes or the Subsidiary Guarantees may be amended or supplemented with the
consent of the Holders of at least a majority in principal amount of the Notes
then outstanding (including, without limitation, consents obtained in connection
with a purchase of, or tender offer or exchange offer for, Notes), and any
existing default or compliance with any provision of the Indenture or the Notes
may be waived with the consent of the Holders of a majority in principal amount
of the then outstanding Notes (including consents obtained in connection with a
tender offer or exchange offer for Notes).
Without the consent of each Holder affected, an amendment or waiver may not
(with respect to any Notes held by a non-consenting Holder): (i) reduce the
principal amount of Notes whose Holders must consent to an amendment, supplement
or waiver, (ii) reduce the principal of or change the fixed maturity of any Note
or alter the provisions with respect to the redemption of the Notes (other than
provisions relating to the covenants described above under the caption
"-- Repurchase at the Option of Holders"), (iii) reduce the rate of or change
the time for payment of interest or, in the case of the Old Notes only,
Liquidated Damages on any Note, (iv) waive a Default or Event of Default in the
payment of principal of or premium, if any, or interest or, in the case of the
Old Notes only, Liquidated Damages, if any, on the Notes (except a rescission of
acceleration of the Notes by the Holders of at least a majority in aggregate
principal amount of the Notes and a waiver of the payment default that resulted
from such acceleration), (v) make any Note payable in money other than that
stated in the Notes, (vi) make any change in the provisions of the Indenture
relating to waivers of past Defaults or the rights of Holders of Notes to
receive payments of principal of or premium, if any, or interest or, in the case
of the Old Notes only, Liquidated Damages, if any, on the Notes, (vii) waive a
redemption payment with respect to any Note (other than a payment required by
one of the covenants described above under the caption "-- Repurchase at the
Option of Holders") or (viii) make any change in the foregoing amendment and
waiver provisions.
Notwithstanding the foregoing, without the consent of any Holder of Notes,
the Company and the Trustee may amend or supplement the Indenture, the Notes or
the Subsidiary Guarantees to cure any ambiguity, defect or inconsistency, to
provide for uncertificated Notes in addition to or in place of certificated
Notes, to provide for the assumption of the Company's obligations to Holders of
Notes in the case of a merger or consolidation, to make any change that would
provide any additional rights or benefits to the Holders of Notes or that does
not adversely affect the legal rights under the Indenture of any such Holder, or
to comply with requirements of the Commission in order to effect or maintain the
qualification of the Indenture under the Trust Indenture Act or to allow any
Guarantor to guarantee the Notes.
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CONCERNING THE TRUSTEE
The Indenture contains certain limitations on the rights 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 will be permitted to engage in other
transactions; however, if it acquires any conflicting interest it must eliminate
such conflict within 90 days, apply to the Commission for permission to continue
or resign.
The Holders of a majority in principal amount of the then outstanding Notes
will have the right to direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee, subject to
certain exceptions. The Indenture provides that in case an Event of Default
shall occur (which shall not be cured), the Trustee will be required, in the
exercise of its power, to use the degree of care of a prudent man in the conduct
of his own affairs. Subject to such provisions, the Trustee will be under no
obligation to exercise any of its rights or powers under the Indenture at the
request of any Holder of Notes, unless such Holder shall have offered to the
Trustee security and indemnity satisfactory to it against any loss, liability or
expense.
ADDITIONAL INFORMATION
Anyone who receives this Prospectus may obtain a copy of the Indenture
without charge by writing to GulfMark Offshore, Inc., 5 Post Oak Park, Suite
1170, Houston, Texas 77027, Attention: Frank R. Pierce, Executive Vice
President.
BOOK-ENTRY, DELIVERY AND FORM
The Old Notes held by Qualified Institutional Buyers are represented by the
Old Global Note and the Exchange Notes will be represented by the Exchange
Global Note. The Old Global Note initially was deposited, and the Exchange
Global Note will be deposited, upon issuance with the Trustee as custodian for
the Depositary, in New York, New York, and registered in the name of the
Depositary or its nominee, in each case for credit to an account of a direct or
indirect participant as described below.
Except as set forth below, the Global Notes may be transferred, in whole
and not in part, only to another nominee of the Depositary or to a successor of
the Depositary or its nominee. Beneficial interests in the Global Notes may not
be exchanged for Notes in certificated form except in the limited circumstances
described below. See "-- Depositary Procedures -- Exchange of Book-Entry Notes
for Certificated Notes."
The Old Global Note (including beneficial interests in the Old Global
Notes) will bear a restrictive legend describing certain restrictions on
transfer to which it is subject. See "The Exchange Offer -- Consequences of
Failure to Exchange." In addition, transfer of beneficial interests in the
Global Notes will be subject to the applicable rules and procedures of the
Depositary and its direct or indirect participants (including, if applicable,
those of the Euroclear System ("Euroclear") and Cedel Bank, S.A. ("CEDEL")),
which may change from time to time.
The Notes may be presented for registration of transfer and exchange at the
offices of the Registrar.
DEPOSITARY PROCEDURES
The Depositary has advised the Company that the Depositary is a
limited-purpose trust company created to hold securities for its participating
organizations (collectively, the "Participants") and to facilitate the clearance
and settlement of transactions in those securities between Participants through
electronic book-entry changes in accounts of Participants. The Participants
include securities brokers and dealers (including the Initial Purchasers),
banks, 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 that clear through or maintain a
custodial relationship with a Participant, either directly or indirectly
(collectively, "Indirect Participants"). Persons who are not Participants may
beneficially own securities held by or on behalf of the Depositary only through
the Participants or Indirect Participants. The ownership interest
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and transfer of ownership interest of each actual purchaser of each security
held by or on behalf of the Depositary are recorded on the records of the
Participants and Indirect Participants.
The Depositary has also advised the Company that pursuant to procedures
established by it, (i) upon deposit of the Global Notes, the Depositary will
credit the accounts of Participants with portions of the principal amount of
Global Notes of the individual beneficial interests represented by such Global
Notes and (ii) ownership of such interests in the Global Notes will be shown on,
and the transfer of ownership thereof will be effected only through, records
maintained by the Depositary (with respect to Participants) or by Participants
and the Indirect Participants (with respect to other owners of beneficial
interests in the Global Notes).
Investors in the Global Notes may hold their interests therein directly
through the Depositary, if they are Participants in such system, or indirectly
through organizations (including Euroclear and CEDEL that are Participants in
such system.
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 beneficial interest in a Global Note to such persons may be limited to
that extent. Because the Depositary can act only on behalf of Participants,
which in turn act on behalf of Indirect Participants and certain banks, the
ability of a person having a beneficial interest in the Global Notes to pledge
such interest to persons or entities that do not participate in the Depositary
system, or otherwise take actions in respect of such interests, may be affected
by the lack of physical certificate evidencing such interest. For certain other
restrictions on the transferability of the Notes, see "-- Exchange of Book-Entry
Notes for Certificated Notes."
EXCEPT AS DESCRIBED BELOW, OWNERS OF INTERESTS IN THE GLOBAL NOTES WILL NOT
HAVE NOTES REGISTERED IN THEIR NAMES, WILL NOT RECEIVE PHYSICAL DELIVERY OF
NOTES IN CERTIFICATED FORM AND WILL NOT BE CONSIDERED THE REGISTERED OWNERS, OR
HOLDERS THEREOF UNDER THE INDENTURE FOR ANY PURPOSE.
Payments in respect of the principal and premium and, in the case of Old
Notes only, Liquidated Damages, if any, and interest on a Global Note registered
in the name of the Depositary or its nominee will be payable by the Trustee to
the Depositary or its nominee in its capacity as the registered Holder under the
Indenture. Under the terms of the Indenture, the Company and the Trustee will
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,
the Trustee nor any agent of the Company or the Trustee has or will have any
responsibility or liability for (i) any aspect of the Depositary's records or
any Participant's or Indirect Participant's records relating to or payments made
on account of beneficial ownership interests in the Global Notes, or for
maintaining, supervising or reviewing any of the Depositary's records or any
Participant's or Indirect Participant's records relating to the beneficial
ownership interests in the Global Notes or (ii) any other matter relating to the
actions and practices of the Depositary or any of its Participants or Indirect
Participants.
The Depositary has advised the Company that its current practices, upon
receipt of any payment in respect of securities such as the Notes (including
principal and interest and, in the case of Old Notes only, Liquidated Damages,
if any), is to credit the accounts of the relevant Participants with the payment
on the payment date, in amounts proportionate to their respective holdings in
principal amount of beneficial interests in the relevant security such as the
Global Notes as shown on the records of the Depositary. Payments by Participants
and the Indirect Participants to the beneficial owners of Notes will be governed
by standing instructions and customary practices and will not be the
responsibility of the Depositary, the Trustee or the Company. Neither the
Company nor the Trustee will be liable for any delay by the Depositary or its
Participants in identifying the beneficial owners of the Notes, and the Company
and the Trustee may conclusively rely on and will be protected in relying on
instructions from the Depositary or its nominee as the registered owner of the
Notes for all purposes.
Interests in the Global Notes will trade in the Depositary's Same-Day Funds
Settlement System and secondary market trading activity in such interests will,
therefore, settle in immediately available funds, subject in all cases to the
rules and procedures of the Depositary and its Participants. Transfers between
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Participants in the Depositary will be effective in accordance with the
Depositary's procedures, and will be settled in same-day funds.
The Depositary has advised the Company that it will take any action
permitted to be taken by a Holder of Notes only at the direction of one or more
Participants to whose account the Depositary interests in the Global Notes are
credited and only in respect of such portion of the aggregate principal amount
of the Notes as to which such Participant or Participants has or have given
direction. However, if there is an Event of Default under the Notes, the
Depositary reserves the right to exchange Global Notes for legend Notes in
certificated form, and to distribute such Notes to its Participants.
The information in this section concerning the Depositary, Euroclear and
CEDEL and their book-entry systems has been obtained from sources that the
Company believes to be reliable, but the Company takes no responsibility for the
accuracy thereof.
Although the Depositary has agreed to the foregoing procedures to
facilitate transfers of interests in the Global Notes among Participants in the
Depositary it is under no obligation to perform or to continue to perform such
procedures, and such procedures may be discontinued at any time. None of the
Company, the Initial Purchasers or the Trustee will have any responsibility for
the performance by the Depositary or its respective Participants or Indirect
Participants of their respective obligations under the rules and procedures
governing their operations.
Exchange of Book-Entry Notes for Certificated Notes. A Global Note is
exchangeable for definitive Notes in registered certificated form if (i) the
Depositary (A) notifies the Company that it is unwilling or unable to continue
as depository for the Global Note and the Company thereupon fails to appoint a
successor depository or (B) has ceased to be a clearing agency registered under
the Exchange Act or (ii) the Company, at its option, notifies the Trustee in
writing that it elects to cause issuance of the Notes in certificated form. In
addition, beneficial interests in a Global Note may be exchanged for
certificated Notes upon request but only upon at least 20 days prior written
notice given to the Trustee by or on behalf of the Depositary in accordance with
customary procedures. In all cases, certificated Notes delivered in exchange for
any Global Note or beneficial interest therein will be registered in names, and
issued in any approved denominations, requested by or on behalf of the
Depositary (in accordance with its customary procedures) and will bear, in the
case of the Old Global Note, a restrictive legend specifying certain
restrictions on transfer referred to in "The Exchange Offer -- Consequences of
Failure to Exchange", unless the Company determines otherwise in compliance with
applicable law.
Certificated Notes. Subject to certain conditions, any person having a
beneficial interest in the Global Note may, upon request to the Trustee,
exchange such beneficial interest for Notes in the form of certificated Notes.
Upon any such issuance, the Trustee is required to register such certificated
Notes in the name of, and cause the same to be delivered to, such person or
persons (or the nominee of any thereof). All such certificated Old Notes would
be subject to legend requirements specifying certain restrictions on transfer
described herein under "The Exchange Offer -- Consequences of Failure to
Exchange." In addition, if (i) the Company notifies the Trustee in writing that
the Depositary is no longer willing or able to act as a depository 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 Notes under the Indenture,
then, upon surrender by the Global Note Holder of its Global Note, Notes in such
form will be issued to each person that the Global Note Holder and the
Depositary identify as being the beneficial owner of the related Notes.
Neither the Company nor the Trustee will be liable for any delay by the
Global Note Holder or the Depositary in identifying the beneficial owners of
Notes and the Company and the Trustee may conclusively rely on, and will be
protected in relying on, instructions from the Global Note Holder or the
Depositary for all purposes.
Same Day Settlement and Payment. The Indenture will require that payments
in respect of the Notes represented by the Global Note (including principal,
premium, if any, interest and, in the case of the Old Notes only, Liquidated
Damages, if any) be made by wire transfer of immediately available funds to the
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accounts specified by the Global Note Holder. With respect to certificated
Notes, the Company will make all payments of principal, premium, if any,
interest and, in the case of the Old Notes only, Liquidated Damages, if any, by
wire transfer of immediately available funds to the accounts specified by the
Holders thereof or, if no such account is specified, by mailing a check to each
such Holder's registered address. The Company expects that secondary trading in
the certificated Notes will also be settled in immediately available funds.
REGISTRATION RIGHTS; LIQUIDATED DAMAGES
Pursuant to the Registration Rights Agreement, the Company has agreed to
file with the Commission the Exchange Offer Registration Statement on the
appropriate form under the Securities Act to allow the Holders of Transfer
Restricted Securities who are able to make certain representations the
opportunity to exchange their Transfer Restricted Securities for Exchange Notes
and thereafter, to allow Lehman Brothers Inc. to engage in market-making
transactions with respect to sales of the Exchange Notes. Accordingly, the
Company will prepare and include within the Exchange Offer Registration
Statement a prospectus relating to the Exchange Offer and a prospectus relating
solely to sales of Exchange Notes by Lehman Brothers Inc. in market-making
transactions (including Exchange Notes received in exchange for Old Notes
acquired by Lehman Brothers Inc. in market-making transactions). If (i) the
Company is not required to file the Exchange Offer Registration Statement or
permitted to consummate the Exchange Offer because the Exchange Offer is not
permitted by applicable law or Commission policy or (ii) any Holder of Transfer
Restricted Securities notifies the Company within 20 business days following
consummation of the Exchange Offer that (A) it is prohibited by law or
Commission policy from participating in the Exchange Offer or (B) it may not
resell the Exchange Notes acquired by it in the Exchange Offer to the public
without delivering a prospectus and the prospectus contained in the Exchange
Offer Registration Statement is not appropriate or available for such resales or
(C) that it is a broker-dealer and owns Notes acquired directly from the Company
or an affiliate of the Company, the Company will file with the Commission a
Shelf Registration Statement to cover resales of the Notes by the Holders
thereof who satisfy certain conditions relating to the provision of information
in connection with the Shelf Registration Statement. The Company will use its
best efforts to cause the applicable registration statement to be declared
effective as promptly as possible by the Commission. For purposes of the
foregoing, "Transfer Restricted Securities" means each Old Note until (i) the
date on which such Old Note has been exchanged by a person other than a
broker-dealer for a Exchange Note in the Exchange Offer, (ii) following the
exchange by a broker-dealer in the Exchange Offer of an Old Note for an Exchange
Note, the date on which such Exchange Note is sold to a purchaser who receives
from such broker-dealer on or prior to the date of such sale a copy of the
appropriate prospectus contained in the Exchange Offer Registration Statement,
(iii) the date on which such Old Note has been effectively registered under the
Securities Act and disposed of in accordance with the Shelf Registration
Statement or (iv) the date on which such Old Note is distributed to the public
pursuant to Rule 144 under the Securities Act.
The Registration Rights Agreement provides that (i) the Company will file
an Exchange Offer Registration Statement with the Commission on or prior to 60
days after the Closing Date, (ii) the Company will use its best efforts to have
the Exchange Offer Registration Statement declared effective by the Commission
on or prior to 150 days after the Closing Date, (iii) unless the Exchange Offer
would not be permitted by applicable law or Commission policy, the Company will
commence the Exchange Offer and use its best efforts to issue on or prior to 30
business days after the date on which the Exchange Offer Registration Statement
was declared effective by the Commission, Exchange Notes in exchange for all Old
Notes tendered prior thereto in the Exchange Offer and (iv) if obligated to file
the Shelf Registration Statement, the Company will use its best efforts to file
the Shelf Registration Statement with the Commission on or prior to 60 days
after such filing obligation arises (and in any event within 150 days after the
Closing Date) and to cause the Shelf Registration to be declared effective by
the Commission on or prior to 60 days after the date upon which the Company is
obligated to make such filing. If (a) the Company fails to file any of the
Registration Statements required by the Registration Rights Agreement on or
before the date specified for such filing, (b) any of such Registration
Statements is not declared effective by the Commission on or prior to the date
specified for such effectiveness (the "Effectiveness Target Date"), or (c) the
Company fails to consummate the Exchange Offer within 30 business days of the
Effectiveness Target Date with respect to the Exchange Offer Registration
Statement, or (d) the Shelf Registration Statement or the Exchange Offer
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Registration Statement is declared effective but thereafter ceases to be
effective or usable in connection with resales of Transfer Restricted Securities
during the periods specified in the Registration Rights Agreement (each such
event referred to in clauses (a) through (d) above a "Registration Default"),
then the Company will pay Liquidated Damages to each Holder of Old Notes, with
respect to the first 90-day period immediately following the occurrence of such
Registration Default in an amount equal to $0.05 per week per $1,000 principal
amount of Notes held by such Holder. The amount of the Liquidated Damages will
increase by an additional $0.05 per week per $1,000 principal amount of Notes
with respect to each subsequent 90-day period until all Registration Defaults
have been cured, up to a maximum amount of Liquidated Damages of $0.50 per week
per $1,000 principal amount of Notes. All accrued Liquidated Damages on the Old
Notes will be paid by the Company on each Damages Payment Date to the Old Global
Note Holder by wire transfer of immediately available funds or by federal funds
check and to Holders of Certificated Securities by wire transfer to the accounts
specified by them or by mailing checks to their registered addresses if no such
accounts have been specified. Following the cure of all Registration Defaults,
the accrual of Liquidated Damages on the Old Notes will cease.
Holders of Old Notes will be required to make certain representations to
the Company (as described in the Registration Rights Agreement) in order to
participate in the Exchange Offer and 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 Rights Agreement in order to have their Old Notes included
in the Shelf Registration Statement and benefit from the provisions regarding
Liquidated Damages with respect to the Old Notes set forth above.
CERTAIN DEFINITIONS
Set forth below are certain defined terms used in the Indenture. Reference
is made to the Indenture for a full disclosure of all such terms, as well as any
other capitalized terms used herein for which no definition is provided.
"Acquired Debt" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Restricted Subsidiary of such specified Person
or (ii) Indebtedness secured by a Lien encumbering any asset acquired by such
specified Person; provided that, in each case, such Indebtedness was not
incurred in connection with, or in contemplation of, such other Person merging
with or into or becoming a Restricted Subsidiary of such specified Person, or
such encumbered asset being acquired by such Person.
"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"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; provided that
beneficial ownership of 10% or more of the voting securities of a Person shall
be deemed to be control.
"Asset Sale" means (i) the sale, lease, conveyance or other disposition of
any assets or rights (including, without limitation, by way of a sale and
leaseback) other than in the ordinary course of business consistent with past
practices (provided that the sale, lease, conveyance or other disposition of all
or substantially all of the assets of the Company and its Restricted
Subsidiaries taken as a whole will be governed by the covenants described above
under the captions "-- Repurchase at the Option of Holders -- Change of Control"
and "-- Certain Covenants -- Merger, Consolidation, or Sale of Assets" and not
by the provisions of the covenant described above under the caption
"-- Repurchase at the Option of Holders -- Asset Sales"), and (ii) the issue or
sale by the Company or any of its Restricted Subsidiaries of Equity Interests of
any of the Company's Restricted Subsidiaries, in the case of either clause (i)
or (ii), whether in a single transaction or a series of related transactions (a)
that have a fair market value in excess of $2 million or (b) for Net Proceeds in
excess of $2 million; provided that the following will not be deemed to be Asset
Sales: (A) a transfer of assets by the Company to a Restricted Subsidiary of the
Company or by a Restricted Subsidiary of the Company to the
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Company or to another Restricted Subsidiary of the Company, (B) an issuance or
sale of Equity Interests by a Restricted Subsidiary of the Company to the
Company or to another Restricted Subsidiary of the Company, (C) (x) a Permitted
Investment or (y) a Restricted Payment that is permitted by the covenant
described above under the caption "-- Certain Covenants -- Restricted Payments",
(D) any disposition of assets resulting from the enforcement or foreclosure of
Liens permitted to be incurred under the covenant described above under the
caption "-- Certain Covenants -- Liens" and (E) any disposition of assets in
trade or exchange for assets of comparable Fair Market Value related to the
Permitted Business of the Company, provided that (x) in any such trade or
exchange with a Fair Market Value in excess of $10 million, the Company shall
obtain an opinion or report from a nationally recognized investment banking
firm, appraisal firm or other valuation expert confirming that the assets
received by the Company and the Restricted Subsidiaries in such trade or
exchange have a fair market value of at least the fair market value of the
assets so traded or exchanged and (y) any cash or Cash Equivalent received by
the Company or a Restricted Subsidiary in connection with such trade or exchange
(net of direct costs relating to such transaction) shall be treated as Net
Proceeds of an Asset Sale and shall be applied in the manner set forth in the
covenant described under the caption "-- Repurchase at the Option of
Holders -- Asset Sales."
"Attributable Indebtedness" in respect of a sale and leaseback transaction
means, as at the time of determination, the present value (discounted at the
interest rate implicit in such transaction, determined in accordance with GAAP)
of the total obligations of the lessee for net rental payments during the
remaining term of the lease included in such sale and leaseback transaction
(including any period for which such lease has been extended or may, at the
option of the lessor, be extended). As used in the preceding sentence, the "net
rental payment" under any lease for any such period shall mean the sum of rental
and other payments required to be paid with respect to such period by the lessee
thereunder, excluding any amounts required to be paid by such lessee on account
of maintenance and repairs, insurance, taxes, assessments, water rates or
similar charges. In the case of any lease which is terminable by the lessee upon
payment of a penalty, such net rental payment shall also include the amount of
such 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.
"Board of Directors" means the Board of Directors of the Company or any
committee thereof duly authorized to act on behalf of such Board.
"Capital Lease Obligation" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that would
at such time be required to be capitalized on a balance sheet in accordance with
GAAP.
"Capital Stock" means (i) in the case of a corporation, corporate stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participation, rights or other equivalents (however designated) of
corporate stock, (iii) in the case of a partnership or limited liability
company, partnership or membership interests (whether general or limited) and
(iv) any other interest or participation that confers on a Person the right to
receive a share of the profits and losses of, or distributions of assets of, the
issuing Person.
"Cash Equivalents" means (i) United States dollars, (ii) securities issued
or directly and fully guaranteed or insured by the United States government or
any agency or instrumentality thereof having maturities of not more than one
year from the date of acquisition, (iii) certificates of deposit and Eurodollar
time deposits with maturities of not more than one year from the date of
acquisition, bankers' acceptances with maturities of not more than one year from
the date of acquisition and overnight bank deposits, in each case with any
domestic commercial bank having capital and surplus in excess of $500.0 million
and a Thompson Bank Watch Rating of "B" or better or any commercial bank
organized under the laws of any other country that is a member of the
Organization for Economic Cooperation and Development ("OECD") and has total
assets in excess of $500 million, (iv) repurchase obligations with a term of not
more than seven days for underlying securities of the types described in clauses
(ii) and (iii) above entered into with any financial institution meeting the
qualifications specified in clause (iii) above, (v) commercial paper having the
highest rating obtainable from Moody's Investors Service, Inc. or Standard &
Poor's Rating Group with maturities of not more than one year from the date of
acquisition, (vi) deposits available for withdrawal on demand with any
commercial bank not meeting the qualifications specified in clause (iii) above
but which is organized
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under the laws of (a) any country that is a member if the OECD and has total
assets of $50 million or (b) any other country in which the Company or any
Restricted Subsidiary maintains an office or is engaged in any Permitted
Business, provided that, in either case, (A) all such deposits are required to
be made in such accounts in the ordinary course of business, (B) such deposits
do not exceed at any one time $2 million in the aggregate and (C) no funds so
deposited remain on deposit in such bank for more than 30 days, and (vii)
investments in money market funds substantially all of whose assets comprise
securities or deposits of the types described in clauses (i) through (v).
"Change of Control" means the occurrence of one or more of the following
events: (i) any sale, lease, exchange or other transfer (in one transaction or a
series of related transactions) of all or substantially all of the assets of the
Company to any Person or group of related Persons for purposes of Section 13(d)
of the Exchange Act (a "Group") together with any Affiliates thereof (whether or
not otherwise in compliance with the provisions of the Indenture), other than
Permitted Holders, unless immediately following such sale, lease, exchange or
other transfer in compliance with the Indenture such assets are owned, directly
or indirectly, by the Company or a Wholly Owned Restricted Subsidiary of the
Company; (ii) the approval by the holders of Capital Stock of the Company of any
plan or proposal for the liquidation or dissolution of the Company (whether or
not otherwise in compliance with the provisions of the Indenture); (iii) the
acquisition in one or more transactions, of beneficial ownership (within the
meaning of Rule 13d-3 under the Exchange Act) of Voting Securities of the
Company by any Person or Group, other than Permitted Holders, that either (A)
beneficially owns (within the meaning of Rule 13d-3 under the Exchange Act),
directly or indirectly, at least 50% of the Company's then outstanding voting
securities entitled to vote on a regular basis for the board of directors of the
Company, or (B) otherwise has the ability to elect, directly or indirectly, a
majority of the members of the Company's board of directors, including, without
limitation, by the acquisition of revocable proxies for the election of
directors; or (iv) the first day on which a majority of the members of the
Company's board of directors are not Continuing Directors.
"Consolidated Cash Flow" means, with respect to any Person for any period,
the Consolidated Net Income of such Person for such period plus (i) an amount
equal to any extraordinary, unusual or non-recurring expenses or losses
(including, whether or not otherwise includable as a separate item in the
statement of Consolidated Net Income for such period, losses on sales of assets
outside of the ordinary course of business) plus any net loss realized in
connection with an Asset Sale (to the extent such losses were deducted in
computing such Consolidated Net Income), plus (ii) provision for taxes based on
income or profits of such Person and its Restricted Subsidiaries for such
period, to the extent that such provision for taxes was included in computing
such Consolidated Net Income, plus (iii) consolidated interest expense of such
Person and its Restricted Subsidiaries for such period, whether paid or accrued
and whether or not capitalized (including, without limitation, amortization of
debt issuance costs and original issue discount, non-cash interest payments, the
interest component of any deferred payment obligations, the interest component
of all payments associated with Capital Lease Obligations, commissions,
discounts and other fees and charges incurred in respect of letter of credit or
bankers' acceptance financings, and net payments (if any) pursuant to Hedging
Obligations), to the extent that any such expense was deducted in computing such
Consolidated Net Income, plus (iv) depreciation and amortization (including
amortization of goodwill and other intangibles but excluding amortization of
prepaid cash expenses that were paid in a prior period) of such Person and its
Restricted Subsidiaries for such period to the extent that such depreciation and
amortization were deducted in computing such Consolidated Net Income, minus (v)
non-cash items increasing such Consolidated Net Income for such period, in each
case, on a consolidated basis and determined in accordance with GAAP.
Notwithstanding the foregoing, the provision for taxes on the income or profits
of, and the depreciation and amortization and other non-cash charges of, a
Restricted Subsidiary of the referent Person shall be added to Consolidated Net
Income to compute Consolidated Cash Flow only to the extent (and in same
proportion) that the Net Income of such Restricted Subsidiary was included in
calculating the Consolidated Net Income of such Person and only if a
corresponding amount would be permitted at the date of determination to be
dividended to the Company by such Restricted Subsidiary without prior
governmental approval (that has not been obtained), and without direct or
indirect restriction pursuant to the terms of its charter and all agreements,
instruments, judgments, decrees, orders, statutes, rules and governmental
regulations applicable to that Restricted Subsidiary or its stockholders.
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"Consolidated Net Income" means, with respect to any Person for any period,
the aggregate of the Net Income of such Person and its Restricted Subsidiaries
(for such period, on a consolidated basis, determined in accordance with GAAP);
provided that (i) the Net Income (but not loss) of any Person that is not a
Restricted Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends or
distributions paid in cash to the referent Person or a Restricted Subsidiary,
(ii) the Net Income of any Restricted Subsidiary shall be excluded to the extent
that the declaration or payment of dividends or similar distributions by that
Restricted Subsidiary of that Net Income is not at the date of determination
permitted without any prior governmental approval (that has not been obtained)
or, directly or indirectly, by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Restricted Subsidiary or its stockholders, (iii)
the Net Income of any Person acquired in a pooling of interests transaction for
any period prior to the date of such acquisition shall be excluded, and (iv) the
cumulative effect of a change in accounting principles shall be excluded.
"Consolidated Net Worth" means, with respect to any Person as of any date,
the sum of (i) the consolidated equity of the common stockholders of such Person
and its consolidated Restricted Subsidiaries as of such date plus (ii) the
respective amounts reported on such Person's balance sheet as of such date with
respect to any series of preferred stock (other than Disqualified Stock) that by
its terms is not entitled to the payment of dividends unless such dividends may
be declared and paid only out of net earnings in respect of the year of such
declaration and payment, but only to the extent of any cash received by such
Person upon issuance of such preferred stock, less (x) all write-ups (other than
write-ups resulting from foreign currency translations and write-ups of tangible
assets of a going concern business made within 12 months after the acquisition
of such business) subsequent to the Issue Date in the book value of any asset
owned by such Person or a consolidated Restricted Subsidiary of such Person, (y)
all investments as of such date in unconsolidated Restricted Subsidiaries and in
Persons that are not Restricted Subsidiaries (except, in each case, Permitted
Investments), and (z) all unamortized debt discount and expense and unamortized
deferred charges as of such date, all of the foregoing determined in accordance
with GAAP.
"Consolidated Tangible Assets" means, with respect to any Person as of any
date, the amount which, in accordance with GAAP, would be set forth under the
caption "Total Assets" (or any like caption) on a consolidated balance sheet of
such Person and its Restricted Subsidiaries, less all intangible assets,
including, without limitation, goodwill, organization costs, patents,
trademarks, copyrights, franchises and research and development costs.
"Continuing Director" means, as of any date of determination, any member of
the Company's board of directors who (i) was a member of the Company's board of
directors on the Issue Date or (ii) was nominated for election or elected to
such board of directors with the approval of a majority of the Continuing
Directors who were members of such board of directors at the time of such
nomination or election.
"Credit Facility" means, with respect to the Company, one or more debt
facilities, commercial paper facilities with banks or other institutional
lenders providing for revolving credit loans, other borrowings (including term
loans), receivables financing (including through the sale of receivables to such
lenders or to special purpose entities formed to borrow from such lenders
against such receivables) or letters of credit, in each case, as amended,
restated, modified, renewed, refunded, replaced or refinanced in whole or in
part from time to time. The New Credit Facility, described under "Description of
Other Indebtedness," will constitute a Credit Facility under the Indenture.
"Currency Hedging Obligations" means, with respect to any Person, the net
payment Obligations of such Person under agreements or arrangements designed to
protect such Person against fluctuations in the currency exchange rates incurred
or entered into in the ordinary course of its business and not for speculative
purposes.
"Default" means any event that is or with the passage of time or the giving
of notice (or both) would be an Event of Default.
"Disqualified Stock" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible or for which it is
exchangeable at the option of the holder thereof), or upon the
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happening of any event, matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or redeemable at the option of the Holder
thereof, in whole or in part, on or prior to the date that is 91 days after the
date on which the Notes mature, except to the extent that such Capital Stock is
solely redeemable with, or solely exchangeable for, any Capital Stock of such
Person that is not Disqualified Stock.
"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Exchange Notes" means notes registered under the Securities Act that are
issued under the Indenture in exchange for the Notes pursuant to the Exchange
Offer.
"Existing Indebtedness" means up to $0.6 million in aggregate principal
amount (or amount of Capital Lease Obligation) of Indebtedness of the Company
and its Restricted Subsidiaries (other than Indebtedness under any Credit
Facility and the Notes) in existence on the Issue Date, until such amounts are
repaid.
"Fair Market Value" means, with respect to consideration received or to be
received pursuant to any transaction by any Person, the fair market value of
such consideration as determined in good faith by the Board of Directors of the
Company.
"Financial Hedging Obligations" means, with respect to any Person, the net
payment Obligations of such Person under (i) interest rate swap agreements,
interest rate cap agreements and interest rate collar agreements and (ii) other
agreements or arrangements designed to protect such Person against fluctuations
in interest rates or currency exchange rates incurred or entered into in the
ordinary course of its business and not for speculative purposes.
"Fixed Charges" means, with respect to any Person for any period, the sum,
without duplication, of (i) the consolidated interest expense of such Person and
its Restricted Subsidiaries for such period, whether paid or accrued (including,
without limitation or duplication, amortization of debt issuance costs and
original issue discount, non-cash interest payments, the interest component of
any deferred payment obligations, the interest component of all payments
associated with Capital Lease Obligations, commissions, discounts and other fees
and charges incurred in respect of letter of credit or bankers' acceptance
financings, and net payments (if any) pursuant to Hedging Obligations), (ii) the
consolidated interest of such Person and its Restricted Subsidiaries that was
capitalized during such period, (iii) any interest expense on Indebtedness of
another Person that is guaranteed by such Person or one of its Restricted
Subsidiaries or secured by a Lien on assets of such Person or one of its
Restricted Subsidiaries (whether or not such guarantee or Lien is called upon)
and (iv) the product of (a) all dividend payments, whether or not in cash, on
any series of preferred stock of such Person or any of its Restricted
Subsidiaries, other than dividend payments on Equity Interests payable solely in
Equity Interests of the Company (other than Disqualified Stock), times (b) a
fraction, the numerator of which is one and the denominator of which is one
minus the then current combined federal, state and local statutory tax rate of
such Person, expressed as a decimal, in each case, on a consolidated basis and
in accordance with GAAP.
"Fixed Charge Coverage Ratio" means with respect to any Person for any
period, the ratio of the Consolidated Cash Flow of such Person for such period
to the Fixed Charges of such Person for such period. In the event that the
Company or any of its Restricted Subsidiaries incurs, assumes, guarantees or
redeems any Indebtedness (other than revolving credit borrowings under any
Credit Facility) or issues or redeems preferred stock subsequent to the
commencement of the period for which the Fixed Charge Coverage Ratio is being
calculated but on or prior to the date on which the event for which the
calculation of the Fixed Charge Coverage Ratio is made (the "Calculation Date"),
then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect
to such incurrence, assumption, guarantee or redemption of Indebtedness, or such
issuance or redemption of preferred stock, as if the same had occurred at the
beginning of the applicable four-quarter reference period. In addition, for
purposes of making the computation referred to above, (i) acquisitions that have
been made by the Company or any of its Restricted Subsidiaries, including
through mergers or consolidations and including any related financing
transactions, during the four-quarter reference period or subsequent to such
reference period and on or prior to the Calculation Date shall be deemed to have
occurred on the first day of the four-quarter reference period and Consolidated
Cash Flow for such reference
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period shall be calculated without giving effect to clause (iii) of the proviso
set forth in the definition of Consolidated Net Income, (ii) the Consolidated
Cash Flow attributable to discontinued operations, as determined in accordance
with GAAP, and operations or businesses disposed of prior to the Calculation
Date, shall be excluded, and (iii) the Fixed Charges attributable to
discontinued operations, as determined in accordance with GAAP, and operations
or businesses disposed of prior to the Calculation Date, shall be excluded, but
only to the extent that the obligations giving rise to such Fixed Charges will
not be obligations of the referent Person or any of its Restricted Subsidiaries
following the Calculation Date.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants, the statements and pronouncements of
the Financial Accounting Standards Board and such other statements by such other
entities as have been approved by a significant segment of the accounting
profession, which are applicable at the date of determination.
"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America for the payment of which guarantees
or obligations the full faith and credit of the United States is pledged.
"guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof or pledging assets to secure), of
all or any part of any Indebtedness.
"Guarantors" means (i) each of the Company's Restricted Subsidiaries that
becomes a guarantor of the Notes in accordance with the provisions of the
Indenture described above under "Subsidiary Guarantees" and (ii) each of the
Company's Restricted Subsidiaries executing a supplemental indenture in which
such Restricted Subsidiary agrees to be bound by the terms of the Indenture;
provided that any Person constituting a Guarantor as described above shall cease
to constitute a Guarantor when its respective Subsidiary Guarantee is released
in accordance with the terms thereof.
"Hedging Obligations" means, with respect to any Person, collectively, the
Currency Hedging Obligations of such Person and the Financial Hedging
Obligations of such Person.
"Indebtedness" means, with respect to any Person, any indebtedness of such
Person, whether or not contingent, in respect of borrowed money or evidenced by
bonds, notes, debentures or similar instruments or letters of credit (or
reimbursement agreements in respect thereof) or banker's acceptances or
representing Capital Lease Obligations or the balance deferred and unpaid of the
purchase price of any property or representing any Hedging Obligations, except
any such balance that constitutes an accrued expense or trade payable, if and to
the extent any of the foregoing indebtedness (other than letters of credit and
Hedging Obligations) would appear as a liability upon a balance sheet of such
Person prepared in accordance with GAAP, as well as all Indebtedness of others
secured by a Lien on any asset of such Person (whether or not such Indebtedness
is assumed by such Person) and, to the extent not otherwise included, the
guarantee by such Person of any Indebtedness or any other liability, whether or
not contingent, of any other Person, and whether or not it appears on the
balance sheet of such other Person. The amount of any Indebtedness outstanding
as of any date shall be (i) the accreted value thereof, in the case of any
Indebtedness that does not require current payments of interest, and (ii) the
principal amount thereof, together with any interest thereon that is more than
30 days past due, in the case of any other Indebtedness.
"Independent Financial Advisor" means a nationally recognized accounting,
appraisal or investment banking firm that is, in the reasonable judgment of the
Board of Directors, qualified to perform the task for which such firm has been
engaged hereunder and disinterested and independent with respect to the Company
and its Affiliates; provided, that providing accounting, appraisal or investment
banking services to the Company or any of its Affiliates or having an employee,
officer or other representative serving as a member of the Board of Directors of
the Company or any of its Affiliates will not disqualify any firm from being an
Independent Financial Advisor.
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"Investments" means, with respect to any Person, all investments by such
Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including guarantees of Indebtedness or other Obligations),
advances or capital contributions (excluding commission, travel and
entertainment, moving, and similar advances to officers and employees made in
the ordinary course of business), purchases or other acquisitions for
consideration of Indebtedness, Equity Interests or other securities, together
with all items that are or would be classified as investments on a balance sheet
prepared in accordance with GAAP. If the Company or any of its Restricted
Subsidiaries sells or otherwise disposes of any Equity Interests of any direct
or indirect Restricted Subsidiary of the Company such that, after giving effect
to any such sale or disposition, such Person is no longer a direct or indirect
Subsidiary of the Company, the Company, or such Restricted Subsidiary, as the
case may be, shall be deemed to have made an Investment on the date of any such
sale or disposition equal to the fair market value of the Equity Interests of
such Restricted Subsidiary not sold or disposed of in an amount determined as
provided in the fourth paragraph of the covenant described above under the
caption "-- Certain Covenants -- Restricted Payments."
"Issue Date" means the date on which the Notes are first authenticated and
delivered under the Indenture.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in any asset and any filing of or agreement to give any financing
statement under the Uniform Commercial Code (or equivalent statutes) of any
jurisdiction).
"Net Income" means, with respect to any Person, the net income (loss) of
such Person, determined in accordance with GAAP and before any reduction in
respect of preferred stock dividends, excluding, however, (i) any gain (but not
loss), together with any related provision for taxes on such gain (but not
loss), realized in connection with (a) any Asset Sale (including, without
limitation, dispositions pursuant to sale and leaseback transactions), or (b)
the disposition of any securities by such Person or any of its Restricted
Subsidiaries or the extinguishment of any Indebtedness of such Person or any of
its Restricted Subsidiaries and (ii) any extraordinary or nonrecurring gain (but
not loss), together with any related provision for taxes on such extraordinary
or nonrecurring gain (but not loss).
"Net Proceeds" means the aggregate cash proceeds or Cash Equivalents
received by the Company or any of its Restricted Subsidiaries in respect of any
Asset Sale (including, without limitation, any cash received upon the sale or
other disposition of any non-cash consideration received in any Asset Sale), net
of the direct costs relating to such Asset Sale (including, without limitation,
legal, accounting, investment banking and brokers fees, and sales and
underwriting commissions) and any relocation expenses incurred as a result
thereof, taxes paid or payable as a result thereof (after taking into account
any available tax credits or deductions and any tax sharing arrangements),
amounts required to be applied to the repayment of Indebtedness (other than
Indebtedness under any Credit Facility) secured by a Lien on the asset or assets
that were the subject of such Asset Sale and any reserve for adjustment in
respect of the sale price of such asset or assets established in accordance with
GAAP.
"Non-Recourse Indebtedness" means Indebtedness (i) as to which neither the
Company nor any of its Restricted Subsidiaries, (a) provides any guarantee or
credit support of any kind (including any undertaking, guarantee, indemnity,
agreement or instrument that would constitute Indebtedness) or (b) is directly
or indirectly liable (as a guarantor or otherwise), (ii) the incurrence of which
will not result in any recourse against any of the assets of the Company or its
Restricted Subsidiaries, and (iii) no default with respect to which (including
any rights that the holders thereof may have to take enforcement action against
an Unrestricted Subsidiary) would permit (upon notice, lapse of time or both)
any holder of any other Indebtedness of the Company or any of its Restricted
Subsidiaries to declare pursuant to the express terms governing such
Indebtedness a default on such other Indebtedness or cause the payment thereof
to be accelerated or payable prior to its stated maturity.
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"Obligations" means any principal, premium (if any), interest (including
interest accruing on or after the filing of any petition in bankruptcy or for
reorganization relating to the Company or its Restricted Subsidiaries whether or
not a claim for post-filing interest is allowed in such proceeding), penalties,
fees, charges, expenses, indemnifications, reimbursement obligations, damages
(including Liquidated Damages with respect to the Old Notes), guarantees
(including the Subsidiary Guarantees) and other liabilities or amounts payable
under the documentation governing any Indebtedness or in respect thereof.
"Permitted Business" means the lines of business conducted by the Company
on the Issue Date and businesses reasonably related or incidental thereto or
which is a reasonable extension thereof.
"Permitted Holders" means Lehman Brothers Holdings Inc., any direct or
indirect Subsidiary of Lehman Brothers Holdings Inc., or any other Person
directly or indirectly controlled by or under direct or indirect common control
with Lehman Brothers Holdings Inc. or any of its direct or indirect
Subsidiaries. For purposes of this definition, "control" (including, with
correlative meanings, the terms "controlled by" and "under common control
with"), as used with respect to any Person, shall mean the possession, directly
or indirectly, of the power to direct or cause the direction of the management
or policies of such Person, whether through the ownership of voting securities,
by agreement or otherwise.
"Permitted Investments" means (a) any Investment in the Company or in a
Restricted Subsidiary of the Company; (b) any Investment in Cash Equivalents or
deposit accounts maintained in the ordinary course of business consistent with
past practices; (c) any Investment by the Company or any Restricted Subsidiary
of the Company in a Person, if as a result of such Investment (i) such Person
becomes a Restricted Subsidiary of the Company or (ii) such Person is merged,
consolidated or amalgamated with or into, or transfers or conveys substantially
all of its assets to, or is liquidated into, the Company or a Restricted
Subsidiary of the Company; (d) any Restricted Investment made as a result of the
receipt of non-cash consideration from an Asset Sale that was made pursuant to
and in compliance with the covenant described above under the caption
"-- Repurchase at the Option of Holders -- Asset Sales"; (e) any acquisition of
assets solely in exchange for the issuance of Equity Interests (other than
Disqualified Stock) of the Company; (f) any Investment received in settlement of
debts, claims or disputes owed to the Company or any Restricted Subsidiary of
the Company that arose out of transactions in the ordinary course of business;
(g) any Investment received in connection with or as a result of a bankruptcy,
workout or reorganization of any Person; (h) advances and extensions of credit
in the nature of accounts receivable arising from the sale or lease of goods or
services or the licensing of property in the ordinary course of business; (i)
other Investments by the Company or any Restricted Subsidiary of the Company in
any Person having an aggregate fair market value (measured as of the date each
such Investment is made and without giving effect to subsequent changes in
value), when taken together with all other Investments made pursuant to this
clause (i) (net of returns of capital, dividends and interest paid on
Investments and sales, liquidations and redemptions of Investments), not to
exceed 5% of Consolidated Tangible Assets; (j) Investments in the form of
intercompany Indebtedness or Guarantees of Indebtedness of a Restricted
Subsidiary of the Company permitted under clauses (v) and (ix) of the covenant
described under the caption "-- Certain Covenants -- Incurrence of Indebtedness
and Issuance of Preferred Stock;" and (k) Investments arising in connection with
Financial Hedging Obligations or Currency Hedging Obligations that are incurred
in the ordinary course of business for the purpose of fixing or hedging currency
or interest rate risk (including with respect to any floating rate Indebtedness
that is permitted by the terms of the Indenture to be outstanding) in connection
with the conduct of the business of the Company and its Subsidiaries and not for
speculative purposes.
"Permitted Liens" means (i) Liens in favor of the Company or any Guarantor;
(ii) Liens on property of a Person existing at the time such Person is merged
into or consolidated with the Company or any Restricted Subsidiary of the
Company; provided that such Liens were in existence prior to the contemplation
of such merger or consolidation and do not extend to any assets other than those
of the Person merged into or consolidated with the Company; (iii) Liens on
property existing at the time of acquisition thereof by the Company or any
Restricted Subsidiary of the Company, provided that such Liens were in existence
prior to the contemplation of such acquisition; (iv) Liens existing on the Issue
Date of the Indenture and any extensions or renewals thereof, provided that such
extension or renewal of such Liens does not extend to or cover any other
property or assets of the Company or any Restricted Subsidiary; (v) statutory
Liens (other
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than any Lien imposed by ERISA) or landlords and carriers', warehouseman's,
mechanics', suppliers', materialmen's, repairmen's or other like Liens arising
in the ordinary course of business; (vi) Liens for taxes, assessments,
government charges or claims not yet due and payable or which are being
contested in good faith by appropriate proceedings promptly instituted and
diligently conducted and if a reserve or other appropriate provisions, if any,
as shall be required in conformity with GAAP shall have been made therefor;
(vii) Liens incurred or deposits made in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other types of
social security; (viii) Liens created or deposits made to secure the performance
of tenders, bids, leases, statutory obligations, surety and appeal bonds,
government contracts, performance and return-of-money bonds and other
obligations of a like nature incurred in the ordinary course of business
(exclusive of obligations for the payment of borrowed money); (ix) easements,
rights-of-way, licenses, covenants reservations, restrictions and other similar
charges or encumbrances not interfering in any material respect with the
business of the Company or any Restricted Subsidiary incurred in the ordinary
course of business; (x) any attachment or judgment Lien, unless the judgment it
secures shall not, within 60 days after the entry thereof, have been discharged
or execution thereof stayed pending appeal, or shall not have been discharged
within 60 days after the expiration of any such stay; (xi) any other Liens
imposed by operation of law which do not materially affect the Company's or any
Guarantor's ability to perform its obligations under the Notes, the Subsidiary
Guarantees and the Indenture; (xii) rights of banks to set off deposits against
debts owed to said bank; (xiii) Liens upon specific items of inventory or other
goods and proceeds of the Company or its Restricted Subsidiaries securing the
Company's or any Restricted Subsidiary's obligations in respect of bankers'
acceptances issued or created for the account of any such Person to facilitate
the purchase, shipment or storage of such inventory or other goods; (xiv) Liens
securing reimbursement obligations with respect to letters of credit which
encumber documents and other property relating to such letters of credit and the
products and proceeds thereof entered into in the ordinary course of business
consistent with past practices; (xv) Liens securing Indebtedness that is pari
passu in right of payment with the Notes, provided that the Notes are equally
and ratably secured; (xvi) Liens to secure Purchase Money Indebtedness or other
purchase money obligations incurred for the purpose of financing all or a part
of the purchase price or cost of construction or improvement of property, plant
or equipment used in the Permitted Business and acquired, constructed or
improved after the Issue Date, provided that (1) the principal amount of
Indebtedness secured by such Liens shall not exceed 100% of the lesser of cost
or Fair Market Value of the property or assets so acquired, constructed or
improved plus transaction costs related thereto, (2) such Liens shall not
encumber any other property or assets of the Company or any Restricted
Subsidiary (other than the charters or other contracts relating solely to such
property or assets, and the proceeds therefrom and accessions and upgrades
thereto) and (3) such Liens shall attach to such Property or assets within 120
days of the date of the completion of the construction or acquisition of such
Property or assets; (xvii) Liens to secure any Permitted Refinancing
Indebtedness incurred to refinance any Indebtedness secured by any Lien referred
to in the foregoing clauses (ii), (iii), (iv), (xv) and (xvi), provided,
however, that such new Lien shall be limited to all or part of the same property
that secured the original Lien (provided that such Liens may extend to
after-acquired property, including any assets or Capital Stock of any
subsequently formed or acquired Subsidiary, if such original Lien included such
property or assets as collateral); (xviii) Liens in favor of customs and revenue
authorities to secure payment of customs duties in connection with the
importation of goods in the ordinary course of business and other similar Liens
arising in the ordinary course of business; (xix) leases or subleases granted to
third Persons in ordinary course of business consistent with past practices not
interfering with the ordinary course of business of the Company or its
Restricted Subsidiaries; (xx) deposits made in the ordinary course of business
to secure liability to insurance carriers, and Liens on the proceeds of
insurance granted to insurance carriers solely to secure the payment of financed
premiums; (xxi) Liens in favor of a trustee under any indenture securing amounts
due to the trustee in connection with its services under such indenture; (xxii)
Liens under licensing agreements for use of intellectual property entered into
in the ordinary course of business; (xxiii) Liens incurred in the ordinary
course of business of the Company or any Subsidiary of the Company with respect
to obligations that do not exceed $10 million at any one time outstanding and
that (a) are not incurred in connection with the borrowing of money or the
obtaining of advances or credit (other than trade credit in the ordinary course
of business) and (b) do not in the aggregate materially detract from the value
of the property or materially impair the use thereof in the operation of
business by the Company or such Restricted Subsidiary and (xxiv) any attachment
or judgment
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Lien not constituting an Event of Default under clause (vi) of the first
paragraph of the section described under the caption "-- Events of Default and
Remedies."
"Permitted Refinancing Indebtedness" means any Indebtedness of the Company
or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or any of its Restricted Subsidiaries
(other than intercompany Indebtedness); provided that: (i) the principal amount
(or accreted value, if applicable) of such Permitted Refinancing Indebtedness
does not exceed the principal amount of (or accreted value, if applicable), plus
accrued and unpaid interest on, the Indebtedness so extended, refinanced,
renewed, replaced, defeased or refunded (plus the amount of reasonable expenses
incurred in connection therewith); (ii) such Permitted Refinancing Indebtedness
has a final maturity date later than the final maturity date of, and has a
Weighted Average Life to Maturity equal to or greater than the Weighted Average
Life to Maturity of, the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded; (iii) if the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded is subordinated in right of
payment to the Notes, such Permitted Refinancing Indebtedness has a final
maturity date later than the final maturity date of, and is subordinated in
right of payment to, the Notes on terms at least as favorable to the Holders of
Notes as those contained in the documentation governing the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded; and (iv) such
Indebtedness is incurred either by the Company or a Restricted Subsidiary who is
the obligor on the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded.
"Person" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, limited liability company,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
"Public Equity Offering" means any public underwritten offering by the
Company of Voting Stock (other than Disqualified Stock) of the Company pursuant
to registration under the Securities Act of 1933, as amended; provided, however,
that the proceeds net of any underwriting discount and commission and other
expenses to the Company from any such offering shall be at least $25 million.
"Purchase Money Indebtedness" of a Person means any Indebtedness
represented by Capital Lease Obligations, mortgage or construction financings,
purchase money obligations or Acquired Debt, in each case incurred for the
purpose of financing all or any part of (i) the purchase price, acquisition cost
or cost of construction or improvement of property, plant or equipment used in
the Permitted Business of such Person and acquired, constructed or improved
after the Issue Date, provided the aggregate principal amount (or Capital Lease
Obligation) of such Indebtedness (including the amount of any Acquired Debt
incurred in connection with such acquisition, construction, or improvement)
shall not exceed the lesser of the Fair Market Value or 70% of the purchase
price, acquisition cost or cost of construction or improvement with respect to
the property, plant or equipment for which such Indebtedness is being incurred
or (ii) the purchase price or acquisition cost for the purchase or acquisition
of all of the outstanding Capital Stock of a Person whose assets consist
substantially of property, plant or equipment used in the Permitted Business,
provided the aggregate principal amount of such Indebtedness (including the
amount of any Acquired Debt incurred in connection with, or as a result of, each
purchase) shall not exceed the lesser the Fair Market Value of, or 70% of that
portion of the purchase price or acquisition cost allocable to, the property,
plant or equipment of the Person acquired.
"Regulation S" means Regulation S promulgated under the Securities Act.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Subsidiary" of a Person means any Subsidiary of the referenced
Person that is not an Unrestricted Subsidiary; provided that, on the Issue Date,
all Subsidiaries of the Company shall be Restricted Subsidiaries of the Company.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
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"Significant Subsidiary" means any Subsidiary that would be a "significant
subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Securities Act, as such Regulation is in effect on the date of
the Indenture.
"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"Subordinated Indebtedness" means any Indebtedness of the Company which is
subordinated in right of payment to the Notes.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person and (ii) any partnership (a) the sole general partner or the managing
general partner of which is such Person or an entity described in clause (i) and
related to such Person or (b) the only general partners of which are such Person
or of one or more entities described in clause (i) and related to such Person
(or any combination thereof).
"Subsidiary Guarantee" means the guarantee of the Notes by any Guarantors
pursuant to Article 10 of the Indenture pursuant to the execution and delivery
of a supplemental indenture substantially in the form of Exhibit D to the
Indenture entered into in accordance with the covenant described above under the
caption "-- Subsidiary Guarantees."
"Unrestricted Subsidiary" means any Subsidiary of the Company (including
any newly acquired or newly formed Subsidiary of the Company) that is designated
by the Board of Directors as an Unrestricted Subsidiary pursuant to a resolution
of the Board of Directors as certified in an Officer's Certificate delivered to
the Trustee, but only to the extent that such Subsidiary at the time of
designation and thereafter, (a) has no Indebtedness other than Non-Recourse
Indebtedness; (b) is not party to any agreement, contract, arrangement or
understanding with the Company or any Restricted Subsidiary of the Company
unless the terms of any such agreement, contract, arrangement or understanding
are no less favorable to the Company or such Restricted Subsidiary than those
that might be obtained, in light of all the circumstances, at the time from
Persons who are not Affiliates of the Company; (c) is a Person with respect to
which neither the Company nor any of its Restricted Subsidiaries has any direct
or indirect obligation (x) to subscribe for additional Equity Interests or (y)
to maintain or preserve such Person's financial condition or to cause such
Persons to achieve any specified levels of operating results; (d) has not
guaranteed or otherwise directly or indirectly provided credit support for any
Indebtedness of the Company or any of its Restricted Subsidiaries; and (e) do
not own any Capital Stock of or own or hold any Lien on any property of, the
Company or any Restricted Subsidiary of the Company.
"Voting Stock" of any Person as of any date means the Capital Stock of such
Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing (i) the sum of the
products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (ii) the then outstanding principal
amount of such Indebtedness.
"Wholly Owned Restricted Subsidiary" means a Restricted Subsidiary (i) 100%
of the outstanding Capital Stock and other Equity Interests of which is directly
or indirectly owned by the Company or (ii) that is organized in a foreign
jurisdiction and is required by the applicable laws and regulations of such
jurisdiction to be partially owned by the government of such foreign
jurisdiction or individual or corporate citizens of such foreign jurisdiction in
order for such Restricted Subsidiary to transact business in such foreign
jurisdiction,
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provided that the Company, directly or indirectly, owns the remaining Capital
Stock or ownership interests in such Restricted Subsidiary and, by contract or
otherwise, controls the management and business of such Restricted Subsidiary
and derives the economic benefits of ownership of such Restricted Subsidiary to
substantially the same extent as if such Restricted Subsidiary were a wholly
owned Restricted Subsidiary.
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CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following sets forth a summary of the material anticipated federal
income tax consequences expected to result to holders from the Exchange Offer
and from the purchase, ownership and disposition of the Exchange Notes. The tax
consequences of these transactions are uncertain. The discussion of the federal
income tax consequences set forth below is based upon the Internal Revenue Code
of 1986, as amended (the "Code"), and judicial decisions and administrative
interpretations thereunder, as of the date hereof, and such authorities may be
repealed, revoked, modified or otherwise interpreted or applied so as to result
in federal income tax consequences different from those discussed below. There
can be no assurance that the Internal Revenue Service (the "IRS") will not
challenge one or more of the tax consequences described herein, and the Company
has not obtained, nor does it intend to obtain, a ruling from the IRS or an
opinion of counsel with respect to the United States federal income tax
consequences of acquiring or holding Exchange Notes. As used herein, United
States Holders means (i) citizens or residents (within the meaning of Section
7701(b) of the Code) of the United States, (ii) corporations, partnerships or
other entities created in or under the laws of the United States or any
political subdivision thereof, (iii) estates, the income of which is subject to
United States federal income taxation regardless of its source, and (iv) in
general, trusts subject to the primary supervision of a court within the United
States and the control of a United States person as described in Section
7701(a)(30) of the Code.
This discussion does not purport to deal with all aspects of United States
federal income taxation that may be relevant to a particular Holder in light of
the Holder's circumstances (for example, persons subject to the alternative
minimum tax provisions of the Code). Also, it is not intended to be wholly
applicable to all categories of investors, some of which (such as dealers in
securities, banks, insurance companies, tax-exempt organizations, and persons
holding Exchange Notes as part of a hedging or conversion transaction or
straddle or persons deemed to sell Exchange Notes under the constructive sale
provisions of the Code) may be subject to special rules. The discussion below is
premised upon the assumption that the Exchange Notes and Old Notes constitute
indebtedness for U.S. federal income tax purposes, and that the Old Notes and
Exchange Notes are held (or would be held if acquired) as capital assets within
the meaning of Section 1221 of the Code. This summary does not discuss the tax
considerations applicable to subsequent purchasers. The discussion also does not
discuss any aspect of state, local or foreign law, nor federal estate and gift
tax law.
EXCHANGE OF NOTES
The exchange of Old Notes for Exchange Notes pursuant to the Exchange Offer
should not be a taxable exchange for United States federal income tax purposes.
Accordingly, a holder should have the same adjusted issue price, adjusted basis
and holding period in the Exchange Notes as it had in the Old Notes immediately
before the exchange.
STATED INTEREST
The Exchange Notes will be issued without original issue discount. Stated
interest on the Old Notes and Existing Notes will be includable in the holder's
income under such holder's method of accounting.
The Company will annually furnish to certain record holders of Exchange
Notes and to the IRS information with respect to qualified stated interest paid
during the calendar year as may be required under applicable regulations.
BOND PREMIUM
Generally, if the Exchange Notes are purchased, or if the Old Notes were
purchased, for an amount in excess of the amount payable at the maturity date
(or a call date, if appropriate) of the Exchange Notes, such excess will
constitute amortizable bond premium that the holder may elect to amortize under
the constant interest method over the period from the date of acquisition to the
date of maturity (or until an earlier call date). If bond premium is amortized,
the amount required to be included in the holder's income each year with respect
to interest on the Note will be reduced by the amount of amortizable bond
premium allocable to such year. An election to amortize bond premium is
available only if the Exchange Notes are held as capital assets. This election
is revocable only with the consent of the IRS and applies to all obligations
owned or
66
<PAGE> 73
subsequently acquired by the holder. To the extent the excess is deducted as
amortizable bond premium, the holder's adjusted tax basis in the Exchange Notes
will be reduced.
MARKET DISCOUNT ON THE EXCHANGE NOTES
To the extent a holder had market discount with respect to an Old Note, the
holder generally will have market discount with respect to an Exchange Note. Any
principal payment or gain realized by a holder on disposition or retirement of
an Exchange Note will be treated as ordinary income to the extent that there is
accrued market discount on the Exchange Note. Unless a holder elects to accrue
under a constant-interest method, accrued market discount is the total market
discount multiplied by a fraction, the numerator of which is the number of days
the holder has held the obligation and the denominator of which is the number of
days from the date the holder acquired the obligation under its maturity. A
holder may be required to defer a portion of its interest deductions for the
taxable year attributable to any indebtedness incurred or continued to purchase
or carry an Exchange Note purchased with market discount. Any such deferred
interest expense would not exceed the market discount that accrues during such
taxable year and is, in general, allowed as a deduction not later than the year
in which such market discount is includable in income. If the holder elects to
include market discount in income currently as it accrues on all market discount
instruments acquired by the holder in that taxable year or thereafter, the
interest deferral rule described above will not apply.
SALE, EXCHANGE OR RETIREMENT OF THE EXCHANGE NOTES
Upon the sale, exchange or retirement of an Exchange Note, the holder
generally will recognize gain or loss equal to the difference between the amount
realized on the sale, exchange or retirement (which does not include any amount
attributable to accrued but unpaid interest) and the holder's adjusted tax basis
in the Exchange Note.
A holder's adjusted tax basis in an Exchange Note will generally equal the
holder's adjusted basis for the Old Note exchanged therefor increased by any
market discount previously included in income by such holder with respect to
such Exchange Note and decreased by any payments received thereon that are not
qualified stated interest and the amount of any amortizable bond premium applied
to reduce interest on the Exchange Note.
Gain or loss realized on the sale, exchange or retirement of an Exchange
Note will be capital gain or loss (subject to the market discount rules,
discussed above), and will be long-term if, at the time of sale, exchange or
retirement, the Exchange Note has been held or deemed held for more than one
year. On August 5, 1997, legislation was enacted which, among other things,
reduces to 20% the maximum rate of tax on long-term capital gains on most
capital assets held by an individual for more than 18 months, and under which
gain on most capital assets held by an individual more than one year and up to
18 months is subject to tax at a maximum rate of 28%. Holders are urged to
consult their tax advisor with respects to the effects of legislation. The
deductibility of capital losses is subject to limitations.
BACKUP WITHHOLDING
The backup withholding rules require a payor to deduct and withhold a tax
if (a) the payee fails to furnish a taxpayer identification number ("TIN") to
the payor, (b) the IRS notifies the payor that the TIN furnished by the payee is
incorrect, (c) the payee has failed to report properly the receipt of
"reportable payments" and the IRS has notified the payor that withholding is
required, or (d) there has been a failure of the payee to certify under the
penalty of perjury that a payee is not subject to withholding under Section 3405
of the Code. As a result, if any one of the events discussed above occurs with
respect to a holder of Notes, the Company, its paying agent or other withholding
agent will be required to withhold a tax equal to 31% of any "reportable
payment" made in connection with the Notes of such holder. A "reportable
payment" includes, among other things, amounts paid in respect of interest or
original issue discount and amounts paid through brokers in retirement of
securities. Any amounts withheld from a payment to a holder under the backup
withholding rules will be allowed as a refund or credit against such holder's
federal income tax, provided, that the required information is furnished to the
IRS. Certain holders (including, among others, corporations and certain
tax-exempt organizations) are not subject to the backup withholding rules.
67
<PAGE> 74
THE FOREGOING DISCUSSION OF CERTAIN FEDERAL INCOME TAX CONSEQUENCES IS FOR
GENERAL INFORMATION ONLY AND IS NOT TAX ADVICE. ACCORDINGLY, EACH HOLDER OF THE
OLD NOTES AND EACH PROSPECTIVE HOLDER AND, SUBSEQUENT TO THE EXCHANGE OFFER,
EACH HOLDER, OF EXCHANGE NOTES SHOULD CONSULT SUCH HOLDER'S OWN TAX ADVISOR WITH
RESPECT TO THE TAX CONSEQUENCES TO SUCH HOLDER OF THE ACQUISITION, OWNERSHIP AND
DISPOSITION OF THE EXCHANGE NOTES INCLUDING THE APPLICABILITY AND EFFECT OF
FEDERAL, STATE, LOCAL, FOREIGN AND OTHER TAX LAWS.
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<PAGE> 75
PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Notes for its own account
pursuant to the Exchange Offer may be a statutory underwriter and 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 as a result of market-making activities or other trading activities.
The Company has agreed that it will make this Prospectus, as amended or
supplemented, available to any broker-dealer for use in connection with any such
resale for a period of 180 days after the Registration Statement is declared
effective by the Commission. A broker-dealer that delivers such a prospectus to
purchasers in connection with such resales will be subject to certain of the
civil liability provisions under the Securities Act and will be bound by the
provisions of the Registration Rights Agreement (including certain
indemnification rights and obligations).
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 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 on 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 Registration Statement is declared effective by
the Commission, 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 in the Registration Rights Agreement to indemnify such
broker-dealers against certain liabilities, including liabilities under the
Securities Act.
EXPERTS
The validity of the issuance of the Exchange Notes offered hereby will be
passed upon for the Company by Griggs & Harrison, P.C., Houston, Texas.
The Company's Consolidated Financial Statements as of December 31, 1997 and
1996 and for each of the three years in the period ended December 31, 1997,
incorporated by reference in this Prospectus and elsewhere in the Registration
Statement, have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their report with respect thereto, and are
incorporated herein by reference in reliance upon the authority of said firm as
experts in giving said reports. The consolidated financial statements of Brovig
Supply ASA (renamed Gulf Offshore Norge AS) as of and for the six months ended
December 31, 1997 and the Combined Statement of Revenues less Operating Expenses
for the twelve-month period ended December 31, 1996 and for the six-month period
ended June 30, 1997 appearing in the Company's Current Report on Form 8-K dated
February 25, 1998, as amended on April 24, 1998, have been audited by Coopers &
Lybrand ANS (PricewaterhouseCoopers DA, effective July 1, 1998), independent
accountants, as set forth in their reports thereon appearing therein. Such
Consolidated Financial Statements, are incorporated herein by reference in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
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<PAGE> 76
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company incorporates herein by reference the following documents
previously filed by the Company with the Commission pursuant to the Exchange
Act:
(a) Current Report of GulfMark Offshore, Inc. on Form 8-K dated June
23, 1998.
(b) Current Report of GulfMark Offshore, Inc. on Form 8-K dated May
12, 1998.
(c) Schedule 14A Proxy Statement of GulfMark Offshore, Inc. for the
Annual Meeting of Stockholders on May 14, 1998.
(d) Quarterly Report of GulfMark Offshore, Inc. on Form 10-Q for the
quarter ended March 31, 1998.
(e) Current Report of GulfMark Offshore, Inc. on Form 8-K dated
February 25, 1998, as amended on April 27, 1998.
(f) Annual Report of GulfMark Offshore, Inc. on Form 10-K for the
fiscal year ended December 31, 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 made by this Prospectus shall be deemed to be
incorporated by reference herein and to be a part hereof from the date of filing
thereof. Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein,
or in any other subsequently filed document that also is or is deemed to be
incorporated by reference herein, modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
The Company hereby undertakes to provide without charge to each person,
including any beneficial owner, to whom a copy of this Prospectus has been
delivered, upon the written or oral request of such person, a copy of any or all
of the information that has been incorporated by reference in this Prospectus
(not including exhibits to the information that is incorporated by reference
herein unless such exhibits are specifically incorporated by reference in such
information). Requests for such copies should be directed to GulfMark Offshore,
Inc. at 5 Post Oak Park, Suite 1170, Houston, Texas 77027, Attention: Frank R.
Pierce, Executive Vice President (713) 963-9522. In order to ensure timely
delivery of such documents prior to the Expiration Date, any request should be
made by August , 1998.
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GLOSSARY OF SELECTED INDUSTRY TERMS
AHTS. See Anchor Handling, Towing and Supply Vessels.
Anchor Handling, Towing and Supply Vessels. These vessels are typically
150' to 175' in length and are used to set anchors for the rigs and to tow
mobile drilling rigs and equipment from one location to another. In addition,
these vessels typically can be used as supply vessels when they are not
performing anchor handling and towing services.
Bareboat Charter. A charter contract whereby the vessel is chartered
without crew, stores or maintenance support, "the bare hull," for a fixed time
period. The contract results in the charterer being treated as the "disponet
owner" for the full duration of the charter.
Below Deck Capacity. The capacity of the tanks located below the deck of a
vessel which are used to carry various liquid and powdered products utilized in
production and drilling activities such as gas oil, potable water, drilling muds
and powdered cement.
BHP. See Brake Horsepower.
Brake Horsepower. The horsepower made available by an engine for driving
machinery other than itself. It is the highest continuous horsepower output an
engine develops.
Charter. A maritime contract for the hire of a vessel.
Classification Society. A member of the IACS (International Association of
Classification Societies) generally accepted for providing classification
services on behalf of governments. The societies are generally recognized as
establishing that ships classified are built and maintained within certain
established standards. The company has ships built under ABS (American Bureau of
Shipping), DNV (Det Norske Veritas) and LR (Lloyds Register of Shipping)
classification.
Construction Support Vessels. Can be vessels used in the actual
construction effort, such as pipe laying barges, or they can be specially
designed vessels, such as pipe carriers, used to transport the large cargos of
material and supplies required to support construction and installation of
offshore platforms and pipelines.
Crew. See Crewboats.
Crewboats. Crewboats transport personnel and cargo to and from production
platforms and rigs. Older crewboats, early 1980s built, are typically 100' to
120' ft. in length and are generally designed for speed to transport personnel.
Newer crewboat designs are generally larger, 130' to 165' ft. in length, and
have greater cargo carrying capacities. They are used primarily to transport
cargo on a time sensitive basis.
Day Rate. Total charter revenues divided by number of days worked.
Deadweight Tons. A measurement of the carrying capacity of a vessel,
calculated as the difference between the amount of water displaced by the
unloaded vessel and that displaced by the fully loaded vessel.
Drydocking. The process whereby a vessel is removed from the water to
accomplish repairs and complete classification inspection requirements. With the
exception of crewboats and vessels more than 20 years of age that are generally
drydocked more frequently, drydocks are required twice during the five-year
classification cycle. The time period of a drydocking differs based on type and
age of vessel and extent of survey and repairs needed.
DWT. See Deadweight Tons.
Dynamic Positioning. An enhanced maneuvering and control system that will
hold a vessel on station despite sea and weather conditions.
Floating Production, Storage and Offloading Vessels. Vessels (typically
converted crude oil tankers) configured and equipped to permit hydrocarbon
production to be processed, stored and offloaded, usually to ocean going tankers
for export but in some instances to local structures. These vessels are most
often used in
A-1
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areas where no pipelines or other infrastructure exists such as deep water
regions and offshore lesser-developed countries.
FPSO. See Floating Production, Storage and Offloading Vessels.
Full Production Horizon Contract. See Life of Field Contracts.
KMAR 404. An AHTS Vessel design developed by the Norwegian design and
construction firm Kvaerner-Maritime Engineering. The vessel is specifically
designed to have high BHP and winch equipment to handle advanced
semi-submersible and deepwater locations. The vessel has computer aided
navigation and support systems developed in the 1990's to meet the harsh demands
of the North Sea environment.
Large Platform Supply Vessels. These PSVs are well suited for large areas
with a concentration of offshore production platforms because of their large,
clear after deck and below deck capacities.
LgPSVs. See Large Platform Supply Vessels.
Life of Field Contract. A charter, the term of which is tied to a
production facility's lifespan.
Long-term Charter. A charter with an initial term exceeding six months.
Moon Pool. A structural modification in the hull of a vessel which provides
an opening allowing direct access to the sea. Moon pools are typically used to
launch and deploy ROVs or divers, or otherwise to allow entry and exit from the
water with some protection from wave action.
Oil Spill Response Vessels. Oil spill response vessels are specially
equipped to respond to oil spill emergencies.
On Deck Capacity. The amount of deck area on to which cargo can be loaded
on a vessel. The on deck capacity of a vessel is restricted by the weight and
dimensions of the total amount of cargo carried.
Petrobras. See Petroleo Brasiliero S.A.
Petroleo Brasiliero S.A. The Brazilian national oil company.
Platform Supply Vessels. These vessels are used to serve drilling and
production facilities and support offshore construction and maintenance work.
They are utilized for their cargo handling capabilities, particularly their
large capacity and versatility.
PSVs. See Platform Supply Vessels.
Rates Per Day. See Day Rate.
Remotely Operated Vehicle. An unmanned submersible craft which is used for
underwater construction, inspection and searches. It is controlled from the
launching vessel by umbilical controls and is "flown" through the water by a
trained technician who utilizes thrusters and cameras.
ROV. See Remotely Operated Vehicle.
Short-term Charter. A charter with an initial term of six months or less.
Specialty Vessels. These vessels generally have special features to meet
the requirements of specific jobs. The special features include large deck
spaces, high electrical generating capacities, slow controlled speed and varied
propulsion thruster configurations, extra berthing facilities and long range
capabilities. These vessels are primarily used for support of FPSOs, diving
operations, ROVs, survey operations and seismic data gathering, as well as well
stimulation oil recovery and oil pollution control.
SpV. See Speciality Vessels.
Stby. See Standby Rescue Vessels.
Standby Rescue Vessels. These vessels perform safety patrol functions for
an area and are equipped for all manned locations in the UK sector of the North
Sea. They typically remain on station to provide a safety
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<PAGE> 79
backup to offshore rigs and production facilities and carry special equipment to
rescue personnel, are equipped to provide first aid and shelter and, in some
cases, also function as supply vessels.
Time Charter. The hire of a fully operational ship for a specified period
of time; the shipowner provides the ship with crew, stores and provisions, ready
in all aspects to load cargo and proceed on a voyage.
Utility Vessels. These vessels are typically 90' to 150' in length and are
used to provide limited crew transportation, some transportation of oilfield
support equipment and, in some locations, standby functions.
Utilization. Total days for which charter hire is earned divided by
calendar days in the periods adjusted for part-year availability caused by
vessel additions or dispositions.
UT 705. A supply vessel design developed by the Norwegian design and
construction firm Ulstein and first constructed in 1974. The vessel was first
designed to haul pipe in support of offshore pipeline construction. Post-1990
versions of this vessel have been enhanced to emphasize improved cargo handling
systems and sophisticated positioning capabilities, both of which provide for
high productivity and versatility in supply roles.
UT 755. A supply vessel design developed by Norwegian design and
construction firm Ulstein. Defined in the North Sea as a medium sized vessel, it
fits the definition of a large supply vessel. Vessels built to this design
incorporate a number of environment drilling units and North Sea platforms. The
vessel has high cargo to size ratio, computer controlled pumping and delivery
systems, flexibility to add additional accommodation or specialty equipment,
circular product tanks for ease of cleaning, large product capacities and
improved maneuvering capability to maximize effective working periods alongside
installations.
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATIONS MUST NOT BE RELIED ON AS HAVING BEEN AUTHORIZED BY THE
COMPANY OR THE INITIAL PURCHASERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER
TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITY OTHER THAN THE NOTES
OFFERED HEREBY NOR DOES IT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN
OFFER TO BUY, ANY OF THE NOTES TO ANY PERSON IN ANY JURISDICTION IN WHICH IT
WOULD BE UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION TO SUCH PERSON. NEITHER
THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS NOT BEEN ANY CHANGE IN THE
FACTS SET FORTH IN THIS PROSPECTUS OR INCORPORATED BY REFERENCE HEREIN OR IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
Available Information................. ii
Forward-Looking Statements............ ii
Prospectus Summary.................... 1
Risk Factors.......................... 14
The Company........................... 20
Use of Proceeds....................... 20
Private Placement..................... 21
Capitalization........................ 21
Selected Historical Consolidated
Financial Data...................... 22
The Exchange Offer.................... 24
Description of Other Indebtedness..... 33
Description of the Notes.............. 35
Certain Federal Income Tax
Considerations...................... 66
Plan of Distribution.................. 69
Experts............................... 69
Incorporation of Certain Documents by
Reference........................... 70
Glossary.............................. A-1
</TABLE>
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$130,000,000
EXCHANGE OFFER
[GULFMARK OFFSHORE LOGO]
GULFMARK OFFSHORE, INC.
8 3/4% SENIOR NOTES DUE 2008
---------------------------
PROSPECTUS
JULY , 1998
---------------------------
- ------------------------------------------------------
- ------------------------------------------------------
<PAGE> 81
[ALTERNATE COVER FOR MARKET-MAKING PROSPECTUS]
PROSPECTUS
GULFMARK OFFSHORE, INC.
8 3/4% SENIOR NOTES DUE 2008
---------------------------
The 8 3/4% Senior Notes due 2008 (the "Exchange Notes") of GulfMark
Offshore, Inc. (the "Company") were issued in exchange for the previously
outstanding Senior Notes due 2008 (the "Old Notes" and together with the
Exchange Notes, the "Notes") by the Company.
Interest on the Exchange Notes is payable semi-annually on June 1 and
December 1 of each year, commencing December 1, 1998. The Exchange Notes are
redeemable at the option of the Company, in whole or in part, at any time on or
after June 1, 2003, at the redemption prices set forth herein, plus accrued and
unpaid interest to the date of redemption. At any time prior to June 1, 2001,
the Company may, at its option, redeem up to 35% of the aggregate principal
amount of the Notes outstanding with the net cash proceeds of one or more Public
Equity Offerings (as defined herein) at a redemption price equal to 108.75% of
the principal amount thereof, plus accrued and unpaid interest to the date of
redemption; provided that at least 65% of the aggregate original principal
amount of the Notes remains outstanding immediately after each such redemption.
See "Description of the Notes -- Optional Redemption." In the event of a Change
of Control (as defined herein), each holder of the Notes will have the right to
require the Company to purchase all or any part of such holder's notes at a
purchase price in cash equal to 101% of the aggregate principal amount thereof,
plus accrued and unpaid interest to the date of purchase. See "Description of
the Notes -- Repurchase at the Option of Holders -- Change of Control."
The Exchange Notes are general unsecured obligations of the Company and are
pari passu in right of payment with all existing and future unsecured senior
Indebtedness (as defined herein) of the Company, which may include certain
borrowings under the New Credit Facility (as defined herein) and senior to all
future subordinated indebtedness of the Company. The Company conducts its
operations solely through its Subsidiaries (as defined herein) and, accordingly,
the Exchange Notes are effectively subordinated to (i) all future secured
obligations of the Company to the extent of the assets securing such obligations
and (ii) all existing and future indebtedness and other obligations of the
Company's subsidiaries and trade payables incurred in the ordinary course of
business. Under certain circumstances, the Company's payment obligations under
the Exchange Notes may in the future be jointly and severally guaranteed on a
senior unsecured basis by one or more of the Company's Subsidiaries. See
"Description of the Notes." As of March 31, 1998, on a pro forma basis, after
giving effect to the Offering (as defined herein) and the application of the net
proceeds therefrom, and excluding borrowings that are available under the New
Credit Facility (as defined herein), the Company (exclusive of its
Subsidiaries), would have had no Indebtedness outstanding other than the Notes,
and the Company's Subsidiaries would have had Indebtedness of $0.6 million
outstanding. See "Prospectus Summary -- The Private Placement" and "Description
of Other Indebtedness -- New Credit Facility."
FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED IN CONNECTION
WITH AN INVESTMENT IN THE EXCHANGE NOTES, SEE "RISK FACTORS," BEGINNING ON PAGE
15.
---------------------------
THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
This Prospectus has been prepared for and is to be used by Lehman Brothers
Inc. in connection with offers and sales in market-making transactions of the
Exchange Notes. The Company will not receive any of the proceeds of such sales.
Lehman Brothers Inc. may act as a principal or agent in such transactions. The
Exchange Notes may be offered in negotiated transactions or otherwise.
---------------------------
LEHMAN BROTHERS INC.
The date of this Prospectus is , 1998
<PAGE> 82
[ALTERNATE PAGE FOR MARKET-MAKING PROSPECTUS]
TRADING MARKET FOR THE EXCHANGE NOTES
There is no existing trading market for the Exchange Notes, and there can
be no assurance regarding the future development of a market for the Exchange
Notes or the ability of the Holders of the Exchange Notes to sell their Exchange
Notes or the price at which such Holders may be able to sell their Exchange
Notes. If such market were to develop, the Exchange Notes could trade at prices
that may be higher or lower than their initial offering price depending on many
factors, including prevailing interest rates, the Company's operating results
and the market for similar securities. Although it is not obligated to do so,
Lehman Brothers Inc. intends to make a market in the Exchange Notes. Any such
market-making activity may be discontinued at any time, for any reason, without
notice at the sole discretion of Lehman Brothers Inc. No assurance can be given
as to the liquidity of or the trading market for the Exchange Notes.
Lehman Brothers Inc. may be deemed to be an affiliate of the Company and,
as such, may be required to deliver a prospectus in connection with its
market-making activities in the Exchange Notes. The Company has agreed to
maintain an effective registration statement that would allow Lehman Brothers
Inc. to engage in market-making transactions in the Exchange Notes for a period
of two years from the date of effectiveness of the Registration Statement of
which this Prospectus is a part. Thereafter, the Company may, but is not
required to, maintain the effectiveness of such registration statement to enable
Lehman Brothers Inc. to deliver a prospectus in connection with market-making
transactions in the Exchange Notes. If such registration statement ceases to
remain effective or ceases to contain the current information required therein,
Lehman Brothers Inc. may be precluded from continuing to engage in market-making
transactions in the Exchange Notes, which could adversely affect the market for
the Exchange Notes. The Company has agreed to bear substantially all the costs
and expenses related to such registration statement.
<PAGE> 83
[ALTERNATE PAGE FOR MARKET-MAKING PROSPECTUS]
USE OF PROCEEDS
This Prospectus is delivered in connection with the sale of the Exchange
Notes by Lehman Brothers Inc. in market-making transactions. The Company will
not receive any of the proceeds from such transactions.
<PAGE> 84
[ALTERNATE PAGE FOR MARKET-MAKING PROSPECTUS]
SELLING SECURITYHOLDER
This Prospectus has been prepared for and is to be used by Lehman Brothers
Inc. in connection with offers and sales of the Exchange Notes in market-making
transactions (including Exchange Notes received in exchange for Old Notes
acquired by Lehman Brothers Inc. in market-making transactions). As of the date
of this Prospectus, Lehman Brothers Inc. owned $13.6 million aggregate principal
amount of Exchange Notes, which were received in the Exchange Offer in exchange
for an equivalent amount of Old Notes originally acquired in market-making
transactions. Because Lehman Brothers Inc. may sell all or a portion of such
Exchange Notes pursuant to this Prospectus, and because this Prospectus may be
used by Lehman Brothers Inc. in connection with future offers and sales of
Exchange Notes in market-making transactions effected from time to time, no
estimate can be given as to the number and percentage of Exchange Notes that
will be held by Lehman Brothers Inc. upon termination of any such sales.
Affiliates of Lehman Brothers Inc. currently own approximately 25.5% of the
Company's Common Stock. David J. Butters, Chairman of the Board of Directors of
the Company, and Robert B. Millard, a Director of the Company, are Managing
Directors of Lehman Brothers Inc. The address of Lehman Brothers Inc. is 3 World
Financial Center, New York, New York 10285.
<PAGE> 85
[ALTERNATE PAGE FOR MARKET-MAKING PROSPECTUS]
PLAN OF DISTRIBUTION
This Prospectus is to be used by Lehman Brothers Inc. in connection with
offers and sales of the Exchange Notes in market-making transactions effected
from time to time. Lehman Brothers Inc. may act as a principal or agent in such
transactions, including as agent for the counterparty when acting as principal
or as agent for both counterparties, and may receive compensation in the form of
discounts and commissions, including from both counterparties when it acts as
agent for both. Such sales will be made at prevailing market prices at the time
of sale, at prices related thereto or at negotiated prices.
Affiliates of Lehman Brothers Inc. currently own approximately 25.5% of the
Company's Common Stock. David J. Butters, Chairman of the Board of Directors of
the Company, and Robert B. Millard, a Director of the Company, are Managing
Directors of Lehman Brothers Inc. Lehman Brothers Inc. has informed the Company
that it does not intend to confirm sales of the Exchange Notes to any accounts
over which it exercises discretionary authority without the prior specific
written approval of such transactions by the customer.
The Company has been advised by Lehman Brothers Inc. that, subject to
applicable laws and regulations, Lehman Brothers Inc. currently intends to make
a market in the Exchange Notes following completion of the Exchange Offer.
However, Lehman Brothers Inc. is not obligated to do so and any such
market-making may be interrupted or discontinued at any time without notice. In
addition, such market-making activity will be subject to the limits imposed by
the Securities Act and the Exchange Act. There can be no assurance that an
active trading market will develop or be sustained. See "Risk Factors -- Trading
Market for the Exchange Notes."
Lehman Brothers Inc. has provided investment banking, financial advisory
and other services to the Company in the past and may provide such services to
the Company in the future. Lehman Brothers Inc. acted as a purchaser in
connection with the initial sale of the Notes and received an underwriting
discount of approximately $1.95 million in connection therewith.
Lehman Brothers Inc. and the Company have entered into an agreement with
respect to the use by Lehman Brothers Inc. of this Prospectus. Pursuant to such
agreement, the Company agreed to bear all registration expenses incurred under
such agreement, and the Company agreed to indemnify Lehman Brothers Inc. against
certain liabilities, including liabilities under the Securities Act.
<PAGE> 86
[ALTERNATE BACK COVER PAGE FOR MARKET-MAKING PROSPECTUS]
- ------------------------------------------------------
- ------------------------------------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATIONS MUST NOT BE RELIED ON AS HAVING BEEN AUTHORIZED BY THE
COMPANY OR THE INITIAL PURCHASERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER
TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITY OTHER THAN THE NOTES
OFFERED HEREBY NOR DOES IT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN
OFFER TO BUY, ANY OF THE NOTES TO ANY PERSON IN ANY JURISDICTION IN WHICH IT
WOULD BE UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION TO SUCH PERSON. NEITHER
THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS NOT BEEN ANY CHANGE IN THE
FACTS SET FORTH IN THIS PROSPECTUS OR INCORPORATED BY REFERENCE HEREIN OR IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information................. ii
Forward-Looking Statements............ ii
Prospectus Summary.................... 1
Risk Factors.......................... 14
The Company........................... 20
Use of Proceeds....................... 20
Capitalization........................ 21
Selected Historical Consolidated
Financial Data...................... 22
Description of Other Indebtedness..... 24
Description of the Notes.............. 26
Selling Securityholder................ 57
Plan of Distribution.................. 58
Experts............................... 58
Incorporation of Certain Documents by
Reference........................... 59
Glossary.............................. A-1
</TABLE>
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
[GULFMARK OFFSHORE LOGO]
GULFMARK OFFSHORE, INC.
8 3/4% SENIOR NOTES DUE 2008
---------------------------
PROSPECTUS
, 1998
---------------------------
LEHMAN BROTHERS INC.
- ------------------------------------------------------
- ------------------------------------------------------
<PAGE> 87
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
General
Article Eighth of the Company's Certificate of Incorporation, as amended
("Article Eighth") requires the Company to indemnify its directors, officers and
certain other individuals to the full extent permitted by the Delaware General
Corporation Law ("Delaware GCL") or other applicable laws and allows the Company
to enter into agreements with any person to provide greater or different
indemnification than that provided in Article Eighth or the Delaware GCL.
Article Ninth of the Company's Certificate of Incorporation ("Article
Ninth") limits the personal liability of the Company's directors to the Company
or its shareholders to the full extent permitted by the Delaware GCL, which
currently permits directors to be protected from monetary damages for breach of
their fiduciary duty of care. This limitation has no effect on claims arising
under the federal securities laws.
Indemnification and Insurance
Under the Delaware GCL, directors and officers as well as other employees
and individuals may be indemnified against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement in connection with specified
actions, suits or proceedings, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation such
as a derivative action) if they acted in good faith and in a manner they
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 their conduct was unlawful. A similar standard of
care is applicable in the case of actions by or in the right of the corporation,
except that indemnification extends only to expenses (including attorneys' fees)
incurred in connection with defense or settlement of such an action, and the
Delaware GCL requires court approval before there can be any indemnification
where the person seeking indemnification has been found liable to the
corporation.
Article Eighth provides that each person who is or was or had agreed to
become a director or officer of the Company, and each such person who is or was
serving or who had agreed to serve at the request of the Board of Directors or
an officer of the Company as an employee or agent of the Company, or as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise (including the heirs, executors,
administrators or estate of such person) shall be indemnified by the Company to
the full extent permitted by the Delaware GCL or any other applicable laws as
presently or hereafter in effect. Under Article Eighth, subject to the
limitations on indemnification imposed by the Delaware GCL, a large award
against an officer or director or other appropriate individual could be paid by
the Company, which could materially reduce the assets of the Company.
Article Eighth provides that, without limiting the generality or effect of
the foregoing, the Company may enter into one or more agreements with any person
which provide for indemnification greater or different than that provided in
Article Eighth. Finally, Article Eighth and Article Ninth each provide that any
repeal or modification of such article shall not adversely affect any right or
protection existing thereunder immediately prior to such repeal or modification.
At present there is no pending litigation or proceeding involving a
director or officer of the Company in which indemnification would be required or
permitted by the indemnification agreements. The Board of Directors is not aware
of any threatened litigation or proceeding which may result in a claim for
indemnification under any such indemnification agreement.
Elimination of Liability in Certain Circumstances
Under the Delaware GCL, Article Ninth protects the Company's directors
against monetary damages for breaches of their duty of care, except as set forth
below. The inclusion of Article Ninth in the Company's
II-1
<PAGE> 88
Certificate of Incorporation means that the Company and its shareholders forego
the ability to bring a cause of action against a director for monetary damages
for certain breaches of fiduciary duty, including actions in connection with
proposals for the acquisition of control of the Company. Directors remain liable
for breaches of their duty of loyalty to the Company and its shareholders, as
well as acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law and transactions from which a director
derives improper personal benefit. Also, Article Ninth does not eliminate
director liability under Section 174 of the Delaware GCL, which makes directors
personally liable for unlawful dividends or unlawful stock repurchases or
redemptions and expressly sets forth a negligence standard with respect to such
liability.
Although Article Ninth provides directors with protection from awards of
monetary damages for breaches of the duty of care, it does not eliminate the
directors' duty of care. Accordingly, Article Ninth has no effect on the
availability of equitable remedies such as an injunction or rescission based
upon a director's breach of the duty of care. The provisions of Article Ninth
which eliminate liability as described above applies to officers of the Company
only if they are directors of the Company and are acting in their capacity as
directors, and does not apply to officers of the Company who are not directors.
The Purchase Agreement dated as of June 2, 1998 between the Company and the
Initial Purchasers contains reciprocal agreements of indemnity between the
Company and the Initial Purchasers as to certain liabilities, including
liabilities under the Securities Act of 1933, as amended (the "Securities Act"),
and in certain circumstances provides for indemnification of the Company's
directors and officers.
The Registration Rights Agreement dated as of June 8, 1998 between the
Company and the Initial Purchasers contains reciprocal agreements of indemnity
between the Company and Holders as to certain liabilities, including liabilities
under the Securities Act, and in certain circumstances provides for
indemnification of the Company's directors and officers.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
3.1 -- Certificate of Incorporation of the Company (incorporated
by reference to Exhibit No. 3.1 to the Registration
Statement on Form S-4 No. 333-24141).
3.2 -- Certificate of Amendment to Certificate of Incorporation
of the Company (incorporated by reference to Exhibit No.
3.2 to the Registration Statement on Form S-4 No.
333-24141).
3.3 -- By-laws of the Company (incorporated by reference to
Exhibit No. 3.3 to the Registration Statement on Form S-4
No. 333-24141).
4.1 -- See Exhibit Nos. 3.1 and 3.2 for provisions of the
Certificate of Incorporation and By-laws of the Company
defining the rights of the holders of Common Stock.
4.2 -- Specimen Certificate for the Company's Common Stock,
$0.01 par value (incorporated by reference to Exhibit 4.2
to the Registration Statement on Form S-1 No. 33-31139).
*4.3 -- Indenture dated as of June 8, 1998 among the Company, as
Issuer, and State Street Bank and Trust Company, as
Trustee, including a Form of the Company's 8 3/4% Senior
Notes due 2008.
*4.4 -- Registration Rights Agreement dated as of June 8, 1998
among the Company, Lehman Brothers, Chase Securities
Inc., Jefferies & Company, Inc. and the Robinson-Humphrey
Company.
*5.1 -- Opinion of Griggs & Harrison, P.C.
*12.1 -- Statement re Computation of Ratio of Earnings to Fixed
Charges.
23.1 -- Consent of Griggs & Harrison, P.C. (included in Exhibit
5.1).
</TABLE>
II-2
<PAGE> 89
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
*23.2 -- Consent of Arthur Andersen LLP.
*23.3 -- Consent of Coopers and Lybrand ANS
(PricewaterhouseCoopers DA, effective July 1, 1998).
24.1 -- Power of Attorney (contained on page II-5).
*25.1 -- Statement of Eligibility of State Street Bank and Trust
Company dated July 3, 1998.
*99.1 -- Form of Letter of Transmittal.
</TABLE>
- ---------------
* Filed herewith.
(b) Financial Statement Schedules
The following financial statement schedules are included in Part II of the
Registration Statement:
None
All other schedules are omitted because they are inapplicable or the
requested information is shown in the financial statements or noted therein.
ITEM 22. UNDERTAKINGS.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
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
of 1933 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 registrant 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 registrant 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 that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) 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.
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.
II-3
<PAGE> 90
SIGNATURES
Pursuant to the requirements of the Securities Act, 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, State of Texas,
on July 20, 1998.
GULFMARK OFFSHORE, INC.
By: /s/ FRANK R. PIERCE
----------------------------------
Frank R. Pierce
Executive Vice President and Chief
Financial Officer (Principal
Financial Officer)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints Frank R. Pierce, 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 pursuant to Rule 462(b)
of the Securities Act) to this Registration Statement, and to file the same and
all exhibits thereto, and all documents in connection therewith, with the
Securities and Exchange Commission, granting said attorney-in-fact and agent,
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 attorney-in-fact and agent, or his substitute, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ BRUCE A. STREETER President, Chief Operating July 20, 1998
- ----------------------------------------------------- Officer and Director
Bruce A. Streeter (Principal Executive
Officer)
/s/ FRANK R. PIERCE Executive Vice President and July 20, 1998
- ----------------------------------------------------- Chief Financial Officer
Frank R. Pierce (Principal Financial
Officer)
/s/ KEVIN D. MITCHELL Controller July 20, 1998
- ----------------------------------------------------- (Principal Accounting
Kevin D. Mitchell Officer)
/s/ DAVID J. BUTTERS Director and Chairman of the July 20, 1998
- ----------------------------------------------------- Board
David J. Butters
/s/ NORMAN G. COHEN Director July 20, 1998
- -----------------------------------------------------
Norman G. Cohen
</TABLE>
II-4
<PAGE> 91
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ MARSHALL A. CROWE Director July 20, 1998
- -----------------------------------------------------
Marshall A. Crowe
/s/ LOUIS S. GIMBEL, 3RD Director July 20, 1998
- -----------------------------------------------------
Louis S. Gimbel, 3rd
/s/ ROBERT B. MILLARD Director July 20, 1998
- -----------------------------------------------------
Robert B. Millard
</TABLE>
II-5
<PAGE> 92
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
3.1 -- Certificate of Incorporation of the Company (incorporated
by reference to Exhibit No. 3.1 to the Registration
Statement on Form S-4 No. 333-24141).
3.2 -- Certificate of Amendment to Certificate of Incorporation
of the Company (incorporated by reference to Exhibit No.
3.2 to the Registration Statement on Form S-4 No.
333-24141).
3.3 -- By-laws of the Company (incorporated by reference to
Exhibit No. 3.3 to the Registration Statement on Form S-4
No. 333-24141).
4.1 -- See Exhibit Nos. 3.1 and 3.2 for provisions of the
Certificate of Incorporation and By-laws of the Company
defining the rights of the holders of Common Stock.
4.2 -- Specimen Certificate for the Company's Common Stock,
$0.01 par value (incorporated by reference to Exhibit 4.2
to the Registration Statement on Form S-1 No. 33-31139).
*4.3 -- Indenture dated as of June 8, 1998 among the Company, as
Issuer, and State Street Bank and Trust Company, as
Trustee, including a Form of the Company's 8 3/4% Senior
Notes due 2008.
*4.4 -- Registration Rights Agreement dated as of June 8, 1998
among the Company, Lehman Brothers, Chase Securities
Inc., Jefferies & Company, Inc. and the Robinson-Humphrey
Company.
*5.1 -- Opinion of Griggs & Harrison, P.C.
*12.1 -- Statement re Computation of Ratio of Earnings to Fixed
Charges.
23.1 -- Consent of Griggs & Harrison, P.C. (included in Exhibit
5.1).
*23.2 -- Consent of Arthur Andersen LLP.
*23.3 -- Consent of Coopers and Lybrand ANS
(PricewaterhouseCoopers DA, effective July 1, 1998).
24.1 -- Power of Attorney (contained on page II-5).
*25.1 -- Statement of Eligibility of State Street Bank and Trust
Company dated July 3, 1998.
*99.1 -- Form of Letter of Transmittal.
</TABLE>
- ---------------
* Filed herewith.
II-6
<PAGE> 1
EXHIBIT 4.3
================================================================================
GULFMARK OFFSHORE, INC.
Issuer
8 3/4% SENIOR NOTES DUE 2008
INDENTURE
Dated as of June 8, 1998
State Street Bank and Trust Company
Trustee
================================================================================
<PAGE> 2
CROSS-REFERENCE TABLE(1)
<TABLE>
<CAPTION>
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
<S> <C> <C>
310 (a)(1)...................................................................................................7.10
(a)(2)...................................................................................................7.10
(a)(3)...................................................................................................N.A.
(a)(4)...................................................................................................N.A.
(a)(5)...................................................................................................7.10
(b)......................................................................................................7.10
(c)......................................................................................................N.A.
311 (a)......................................................................................................7.11
(b)......................................................................................................7.11
(c)......................................................................................................N.A.
312 (a)......................................................................................................2.05
(b).....................................................................................................11.03
(c).....................................................................................................11.03
313 (a)......................................................................................................7.06
(b)(2).............................................................................................7.06, 7.07
(c)...............................................................................................7.06, 11.02
(d)......................................................................................................7.06
314 (a)......................................................................................................4.03
(a)(4)..................................................................................................11.04
(c)(1)...................................................................................................N.A.
(c)(2)...................................................................................................N.A.
(c)(3)...................................................................................................N.A.
(e).....................................................................................................11.05
(f)......................................................................................................N.A.
315 (a)......................................................................................................7.01
(b)......................................................................................................7.05
(c)......................................................................................................7.01
(d)......................................................................................................7.01
(e)......................................................................................................6.11
316 (a)(last sentence).......................................................................................2.09
(a)(1)(A)................................................................................................6.05
(a)(1)(B)................................................................................................6.04
(a)(2)...................................................................................................N.A.
(b)......................................................................................................6.07
(c)......................................................................................................2.12
317 (a)(1)...................................................................................................6.09
(a)(2)...................................................................................................6.09
(b)......................................................................................................2.04
318 (a).....................................................................................................11.01
(b).....................................................................................................11.01
(c).....................................................................................................11.01
</TABLE>
N.A. means not applicable.
- --------------------
This Cross-Reference Table is not part of this Indenture.
i
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01 Definitions ...................................................... 1
SECTION 1.02 Other Definitions ................................................ 20
SECTION 1.03 Incorporation by Reference of Trust Indenture Act ................ 21
SECTION 1.04 Rules of Construction ............................................ 21
ARTICLE II
THE NOTES
SECTION 2.01 Form and Dating .................................................. 22
SECTION 2.02 Execution and Authentication ..................................... 23
SECTION 2.03 Registrar and Paying Agent ....................................... 24
SECTION 2.04 Paying Agent to Hold Money in Trust .............................. 24
SECTION 2.05 Holder Lists ..................................................... 24
SECTION 2.06 Transfer and Exchange ............................................ 25
SECTION 2.07 Replacement Notes ................................................ 38
SECTION 2.08 Outstanding Notes ................................................ 38
SECTION 2.09 Treasury Notes ................................................... 39
SECTION 2.10 Temporary Notes .................................................. 39
SECTION 2.11 Cancellation ..................................................... 39
SECTION 2.12 Defaulted Interest ............................................... 39
SECTION 2.13 CUSIP Numbers .................................................... 40
ARTICLE III
REDEMPTION AND PREPAYMENT
SECTION 3.01 Notices to Trustee ............................................... 40
SECTION 3.02 Selection of Notes to be Redeemed ................................ 40
SECTION 3.03 Notice of Redemption ............................................. 41
SECTION 3.04 Effect of Notice of Redemption ................................... 41
SECTION 3.05 Deposit of Redemption Price ...................................... 42
SECTION 3.06 Notes Redeemed in Part ........................................... 42
SECTION 3.07 Optional Redemption .............................................. 42
SECTION 3.08 Mandatory Redemption ............................................. 43
SECTION 3.09 Offer to Purchase by Application of Excess Proceeds .............. 43
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C> <C>
ARTICLE IV
COVENANTS
SECTION 4.01 Payment of Notes ................................................. 45
SECTION 4.02 Maintenance of Office or Agency .................................. 45
SECTION 4.03 Reports .......................................................... 46
SECTION 4.04 Compliance Certificate ........................................... 47
SECTION 4.05 Taxes ............................................................ 47
SECTION 4.06 Waiver of Stay, Extension and Usury Laws ......................... 48
SECTION 4.07 Restricted Payments .............................................. 48
SECTION 4.08 Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries ..................................................... 51
SECTION 4.09 Incurrence of Indebtedness and Issuance of Preferred Stock ....... 52
SECTION 4.10 Asset Sales ...................................................... 54
SECTION 4.11 Transactions with Affiliates ..................................... 56
SECTION 4.12 Liens ............................................................ 57
SECTION 4.13 Business Activities .............................................. 57
SECTION 4.14 Corporate Existence .............................................. 57
SECTION 4.15 Offer to Repurchase upon Change of Control ....................... 57
SECTION 4.16 Subsidiary Guarantees of Certain Indebtedness .................... 59
SECTION 4.17 Payments for Consent ............................................. 59
SECTION 4.18 Sale-and-Leaseback Transactions .................................. 59
ARTICLE V
SUCCESSORS
SECTION 5.01 Merger, Consolidation, or Sale of Assets ......................... 60
SECTION 5.02 Successor Corporation Substituted ................................ 60
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.01 Events of Default ................................................ 61
SECTION 6.02 Acceleration ..................................................... 63
SECTION 6.03 Other Remedies ................................................... 63
SECTION 6.04 Waiver of Past Defaults .......................................... 64
SECTION 6.05 Control by Majority .............................................. 64
SECTION 6.06 Limitation on Suits .............................................. 64
SECTION 6.07 Rights of Holders of Notes to Receive Payment .................... 65
SECTION 6.08 Collection Suit by Trustee ....................................... 65
SECTION 6.09 Trustee May File Proofs of Claim ................................. 65
</TABLE>
iii
<PAGE> 5
<TABLE>
<S> <C> <C>
SECTION 6.10 Priorities ....................................................... 66
SECTION 6.11 Undertaking for Costs ............................................ 66
ARTICLE VII
TRUSTEE
SECTION 7.01 Duties of Trustee ................................................ 67
SECTION 7.02 Rights of Trustee ................................................ 68
SECTION 7.03 Individual Rights of Trustee ..................................... 68
SECTION 7.04 Trustee's Disclaimer ............................................. 69
SECTION 7.05 Notice of Defaults ............................................... 69
SECTION 7.06 Reports by Trustee to Holders of the Notes ....................... 69
SECTION 7.07 Compensation and Indemnity ....................................... 69
SECTION 7.08 Replacement of Trustee ........................................... 70
SECTION 7.09 Successor Trustee by Merger, Etc.................................. 71
SECTION 7.10 Eligibility; Disqualification .................................... 72
SECTION 7.11 Preferential Collection of Claims Against Company ................ 72
ARTICLE VIII
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.01 Option to Effect Legal Defeasance or Covenant Defeasance ......... 72
SECTION 8.02 Legal Defeasance and Discharge ................................... 72
SECTION 8.03 Covenant Defeasance .............................................. 73
SECTION 8.04 Conditions to Legal or Covenant Defeasance ....................... 73
SECTION 8.05 Deposited Money and Government Securities to be Held in
Trust; Other Miscellaneous Provisions ............................ 75
SECTION 8.06 Repayment to Company ............................................. 75
SECTION 8.07 Reinstatement .................................................... 76
ARTICLE IX
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01 Without Consent of Holders of Notes .............................. 76
SECTION 9.02 With Consent of Holders of Notes ................................. 77
SECTION 9.03 Compliance with Trust Indenture Act .............................. 78
SECTION 9.04 Revocation and Effect of Consents ................................ 79
SECTION 9.05 Notation on or Exchange of Notes ................................. 79
SECTION 9.06 Trustee to Sign Amendments, Etc. ................................. 79
</TABLE>
iv
<PAGE> 6
<TABLE>
<S> <C> <C>
ARTICLE X
GUARANTEES
SECTION 10.01 Subsidiary Guarantees ........................................... 79
SECTION 10.02 Execution and Delivery of Subsidiary Guarantee .................. 81
SECTION 10.03 Guarantors May Consolidate, Etc., on Certain Terms .............. 81
SECTION 10.04 Releases Following Release Under All Indebtedness or Sale of
Assets .......................................................... 82
SECTION 10.05 Limitation on Guarantor Liability; Contribution ................. 83
SECTION 10.06 Trustee to Include Paying Agent ................................. 83
ARTICLE XI
MISCELLANEOUS
SECTION 11.01 Trust Indenture Act Controls .................................... 84
SECTION 11.02 Notices ......................................................... 84
SECTION 11.03 Communication by Holders of Notes with Other Holders of
Notes ........................................................... 85
SECTION 11.04 Certificate and Opinion as to Conditions Precedent .............. 85
SECTION 11.05 Statements Required in Certificate or Opinion ................... 85
SECTION 11.06 Rules by Trustee and Agents ..................................... 86
SECTION 11.07 No Personal Liability of Directors, Officers, Employees and
Stockholders .................................................... 86
SECTION 11.08 Governing Law ................................................... 86
SECTION 11.09 No Adverse Interpretation of Other Agreements ................... 86
SECTION 11.10 Successors ...................................................... 87
SECTION 11.11 Severability .................................................... 87
SECTION 11.12 Counterpart Originals ........................................... 87
SECTION 11.13 Table of Contents, Headings, Etc................................. 87
EXHIBITS
EXHIBIT A-1 Form of Note .................................................... A1-1
EXHIBIT A-2 Form of Regulation S Temporary Global Note ...................... A2-1
EXHIBIT B Form of Certificate of Transfer ................................. B-1
EXHIBIT C Form of Certificate of Exchange ................................. C-1
EXHIBIT D Form of Supplemental Indenture .................................. D-1
EXHIBIT E Registration Rights Agreement ................................... E-1
</TABLE>
v
<PAGE> 7
INDENTURE dated as of June 8, 1998 between GulfMark Offshore, Inc., a
Delaware corporation (the "Company"), and State Street Bank and Trust Company,
as trustee (the "Trustee").
The Company and the Trustee agree as follows for the benefit of each
other and for the equal and ratable benefit of the Holders of the 8 3/4% Senior
Notes due 2008 (the "Initial Notes") and the 8 3/4% Senior Notes due 2008 issued
in the Exchange Offer (the "Exchange Notes" and, together with the Initial
Notes, the "Notes"):
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01 Definitions.
"Acquired Debt" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Restricted Subsidiary of such specified Person
or (ii) Indebtedness secured by a Lien encumbering any asset acquired by such
specified Person; provided that, in each case, such Indebtedness was not
incurred in connection with, or in contemplation of, such other Person merging
with or into or becoming a Restricted Subsidiary of such specified Person, or
such encumbered asset being acquired by such Person.
"Adjusted Net Assets" of a Guarantor at any date means the lesser of
the amount by which (i) the fair value of the property of such Guarantor exceeds
the total amount of liabilities, including, without limitation, contingent
liabilities (after giving effect to all other fixed and contingent liabilities
incurred or assumed on such date), but excluding liabilities under its
Guarantee, of such Guarantor at such date and (ii) the present fair salable
value of the assets of such Guarantor at such date exceeds the amount that will
be required to pay the probable liability of such Guarantor on its debts (after
giving effect to all other fixed and contingent liabilities incurred or assumed
on such date and after giving effect to any collection from any Subsidiary of
such Guarantor in respect of the obligations of such Subsidiary under such
Subsidiary Guarantee), excluding debt in respect of such Subsidiary Guarantee,
as they become absolute and matured.
"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"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; provided that
beneficial ownership of 10% or more of the voting securities of a Person shall
be deemed to be control.
"Agent" means any Registrar, Paying Agent or co-registrar.
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"Applicable Procedures" means, with respect to any transfer or exchange
of or for beneficial interests in any Global Note, the rules and procedures of
the Depositary, Euroclear and CEDEL that apply to such transfer or exchange.
"Asset Sale" means (i) the sale, lease, conveyance or other disposition
of any assets or rights (including, without limitation, by way of a sale and
leaseback) other than in the ordinary course of business consistent with past
practices (provided that the sale, lease, conveyance or other disposition of all
or substantially all of the assets of the Company and its Restricted
Subsidiaries taken as a whole will be governed by the covenants described in
Sections 4.15 and 5.01 hereof and not by the provisions of the covenant
described in Section 4.10 hereof), and (ii) the issue or sale by the Company or
any of its Restricted Subsidiaries of Equity Interests of any of the Company's
Restricted Subsidiaries, in the case of either clause (i) or (ii), whether in a
single transaction or a series of related transactions (a) that have a fair
market value in excess of $2,000,000 or (b) for Net Proceeds in excess of
$2,000,000; provided that the following will not be deemed to be Asset Sales:
(A) a transfer of assets by the Company to a Restricted Subsidiary of the
Company or by a Restricted Subsidiary of the Company to the Company or to
another Restricted Subsidiary of the Company, (B) an issuance or sale of Equity
Interests by a Restricted Subsidiary of the Company to the Company or to another
Restricted Subsidiary of the Company, (C) (x) a Permitted Investment or (y) a
Restricted Payment that is permitted by the covenant described in Section 4.07
hereof, (D) any disposition of assets resulting from the enforcement or
foreclosure of Liens permitted to be incurred under the covenant described in
Section 4.12 hereof and (E) any disposition of assets in trade or exchange for
assets of comparable Fair Market Value related to the Permitted Business of the
Company, provided that (x) in any such trade or exchange with a Fair Market
Value in excess of $10,000,000, the Company shall obtain an opinion or report
from a nationally recognized investment banking firm, appraisal firm or other
valuation expert confirming that the assets received by the Company and the
Restricted Subsidiaries in such trade or exchange have a fair market value of at
least the fair market value of the assets so traded or exchanged and (y) any
cash or Cash Equivalent received by the Company or a Restricted Subsidiary in
connection with such trade or exchange (net of direct costs relating to such
transaction) shall be treated as Net Proceeds of an Asset Sale and shall be
applied in the manner set forth in the covenant described in Section 4.10
hereof.
"Attributable Indebtedness" in respect of a sale and leaseback
transaction means, as at the time of determination, the present value
(discounted at the interest rate implicit in such transaction, determined in
accordance with GAAP) of the total obligations of the lessee for net rental
payments during the remaining term of the lease included in such sale and
leaseback transaction (including any period for which such lease has been
extended or may, at the option of the lessor, be extended). As used in the
preceding sentence, the "net rental payment" under any lease for any such period
shall mean the sum of rental and other payments required to be paid with respect
to such period by the lessee thereunder, excluding any amounts required to be
paid by such lessee on account of maintenance and repairs, insurance, taxes,
assessments, water rates or similar charges. In the case of any lease which is
terminable by the lessee upon payment of a penalty, such net rental payment
shall also include the amount of such 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.
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"Bankruptcy Code" means Title 11, U.S. Code, as amended, or any similar
federal or state law for the relief of debtors.
"Board of Directors" means the Board of Directors of the Company or any
committee thereof duly authorized to act on behalf of such Board.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease Obligation" means, at the time any determination thereof
is to be made, the amount of the liability in respect of a capital lease that
would at such time be required to be capitalized on a balance sheet in
accordance with GAAP.
"Capital Stock" means (i) in the case of a corporation, corporate
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participation, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership or limited
liability company, partnership or membership interests (whether general or
limited) and (iv) any other interest or participation that confers on a Person
the right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person.
"Cash Equivalents" means (i) United States dollars, (ii) securities
issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality thereof having maturities of not
more than one year from the date of acquisition, (iii) certificates of deposit
and Eurodollar time deposits with maturities of not more than one year from the
date of acquisition, bankers' acceptances with maturities of not more than one
year from the date of acquisition and overnight bank deposits, in each case with
any domestic commercial bank having capital and surplus in excess of
$500,000,000 and a Thompson Bank Watch Rating of "B" or better or any commercial
bank organized under the laws of any other country that is a member of the
Organization for Economic Cooperation and Development ("OECD") and has total
assets in excess of $500,000,000, (iv) repurchase obligations with a term of not
more than seven days for underlying securities of the types described in clauses
(ii) and (iii) above entered into with any financial institution meeting the
qualifications specified in clause (iii) above, (v) commercial paper having the
highest rating obtainable from Moody's Investors Service, Inc. or Standard &
Poor's Rating Group with maturities of not more than one year from the date of
acquisition, (vi) deposits available for withdrawal on demand with any
commercial bank not meeting the qualifications specified in clause (iii) above
but which is organized under the laws of (a) any country that is a member of the
OECD and has total assets of $50,000,000 or (b) any other country in which the
Company or any Restricted Subsidiary maintains an office or is engaged in any
Permitted Business, provided that, in either case, (A) all such deposits are
required to be made in such accounts in the ordinary course of business, (B)
such deposits do not exceed at any one time $2,000,000 in the aggregate and (C)
no funds so deposited remain on deposit in such bank for more than 30 days, and
(vii) investments in money market funds substantially all of whose assets
comprise securities or deposits of the types described in clauses (i) through
(v).
"CEDEL" means Cedel Bank, societe anonyme.
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"Change of Control" means the occurrence of one or more of the
following events: (i) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or substantially all of
the assets of the Company to any Person or group of related Persons for purposes
of Section 13(d) of the Exchange Act (a "Group") together with any Affiliates
thereof (whether or not otherwise in compliance with the provisions of the
Indenture), other than Permitted Holders, unless immediately following such
sale, lease, exchange or other transfer in compliance with the Indenture such
assets are owned, directly or indirectly, by the Company or a Wholly Owned
Restricted Subsidiary of the Company; (ii) the approval by the holders of
Capital Stock of the Company of any plan or proposal for the liquidation or
dissolution of the Company (whether or not otherwise in compliance with the
provisions of the Indenture); (iii) the acquisition in one or more transactions,
of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange
Act) of Voting Securities of the Company by any Person or Group, other than
Permitted Holders, that either (A) beneficially owns (within the meaning of Rule
13d-3 under the Exchange Act), directly or indirectly, at least 50% of the
Company's then outstanding voting securities entitled to vote on a regular basis
for the board of directors of the Company, or (B) otherwise has the ability to
elect, directly or indirectly, a majority of the members of the Company's board
of directors, including, without limitation, by the acquisition of revocable
proxies for the election of directors; or (iv) the first day on which a majority
of the members of the Company's board of directors are not Continuing Directors.
"Consolidated Cash Flow" means, with respect to any Person for any
period, the Consolidated Net Income of such Person for such period plus (i) an
amount equal to any extraordinary, unusual or non-recurring expenses or losses
(including, whether or not otherwise includable as a separate item in the
statement of Consolidated Net Income for such period, losses on sales of assets
outside of the ordinary course of business) plus any net loss realized in
connection with an Asset Sale (to the extent such losses were deducted in
computing such Consolidated Net Income), plus (ii) provision for taxes based on
income or profits of such Person and its Restricted Subsidiaries for such
period, to the extent that such provision for taxes was included in computing
such Consolidated Net Income, plus (iii) consolidated interest expense of such
Person and its Restricted Subsidiaries for such period, whether paid or accrued
and whether or not capitalized (including, without limitation, amortization of
debt issuance costs and original issue discount, non-cash interest payments, the
interest component of any deferred payment obligations, the interest component
of all payments associated with Capital Lease Obligations, commissions,
discounts and other fees and charges incurred in respect of letter of credit or
bankers' acceptance financings, and net payments (if any) pursuant to Hedging
Obligations), to the extent that any such expense was deducted in computing such
Consolidated Net Income, plus (iv) depreciation and amortization (including
amortization of goodwill and other intangibles but excluding amortization of
prepaid cash expenses that were paid in a prior period) of such Person and its
Restricted Subsidiaries for such period to the extent that such depreciation and
amortization were deducted in computing such Consolidated Net Income, minus (v)
non-cash items increasing such Consolidated Net Income for such period, in each
case, on a consolidated basis and determined in accordance with GAAP.
Notwithstanding the foregoing, the provision for taxes on the income or profits
of, and the depreciation and amortization and other non-cash charges of, a
Restricted Subsidiary of the referent Person shall be added to Consolidated Net
Income to compute Consolidated Cash Flow only to the
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extent (and in same proportion) that the Net Income of such Restricted
Subsidiary was included in calculating the Consolidated Net Income of such
Person and only if a corresponding amount would be permitted at the date of
determination to be dividended to the Company by such Restricted Subsidiary
without prior governmental approval (that has not been obtained), and without
direct or indirect restriction pursuant to the terms of its charter and all
agreements, instruments, judgments, decrees, orders, statutes, rules and
governmental regulations applicable to that Restricted Subsidiary or its
stockholders.
"Consolidated Net Income" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries (for such period, on a consolidated basis, determined in accordance
with GAAP); provided that (i) the Net Income (but not loss) of any Person that
is not a Restricted Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends or
distributions paid in cash to the referent Person or a Restricted Subsidiary,
(ii) the Net Income of any Restricted Subsidiary shall be excluded to the extent
that the declaration or payment of dividends or similar distributions by that
Restricted Subsidiary of that Net Income is not at the date of determination
permitted without any prior governmental approval (that has not been obtained)
or, directly or indirectly, by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Restricted Subsidiary or its stockholders, (iii)
the Net Income of any Person acquired in a pooling of interests transaction for
any period prior to the date of such acquisition shall be excluded, and (iv) the
cumulative effect of a change in accounting principles shall be excluded.
"Consolidated Net Worth" means, with respect to any Person as of any
date, the sum of (i) the consolidated equity of the common stockholders of such
Person and its consolidated Restricted Subsidiaries as of such date plus (ii)
the respective amounts reported on such Person's balance sheet as of such date
with respect to any series of preferred stock (other than Disqualified Stock)
that by its terms is not entitled to the payment of dividends unless such
dividends may be declared and paid only out of net earnings in respect of the
year of such declaration and payment, but only to the extent of any cash
received by such Person upon issuance of such preferred stock, less (x) all
write-ups (other than write-ups resulting from foreign currency translations and
write-ups of tangible assets of a going concern business made within 12 months
after the acquisition of such business) subsequent to the Issue Date in the book
value of any asset owned by such Person or a consolidated Restricted Subsidiary
of such Person, (y) all investments as of such date in unconsolidated Restricted
Subsidiaries and in Persons that are not Restricted Subsidiaries (except, in
each case, Permitted Investments), and (z) all unamortized debt discount and
expense and unamortized deferred charges as of such date, all of the foregoing
determined in accordance with GAAP.
"Consolidated Tangible Assets" means, with respect to any Person as of
any date, the amount which, in accordance with GAAP, would be set forth under
the caption "Total Assets" (or any like caption) on a consolidated balance sheet
of such Person and its Restricted Subsidiaries, less all intangible assets,
including, without limitation, goodwill, organization costs, patents,
trademarks, copyrights, franchises and research and development costs.
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"Continuing Director" means, as of any date of determination, any
member of the Company's board of directors who (i) was a member of the Company's
board of directors on the Issue Date or (ii) was nominated for election or
elected to such board of directors with the approval of a majority of the
Continuing Directors who were members of such board of directors at the time of
such nomination or election.
"Corporate Trust Office of the Trustee" shall be at the address of the
Trustee specified in Section 11.02 hereof or such other address as to which the
Trustee may give notice to the Company.
"Credit Facility" means, with respect to the Company, one or more debt
facilities, commercial paper facilities with banks or other institutional
lenders providing for revolving credit loans, other borrowings (including term
loans), receivables financing (including through the sale of receivables to such
lenders or to special purpose entities formed to borrow from such lenders
against such receivables) or letters of credit, in each case, as amended,
restated, modified, renewed, refunded, replaced or refinanced in whole or in
part from time to time.
"Currency Hedging Obligations" means, with respect to any Person, the
net payment Obligations of such Person under agreements or arrangements designed
to protect such Person against fluctuations in the currency exchange rates
incurred or entered into in the ordinary course of its business and not for
speculative purposes.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequester or similar official under the Bankruptcy Code.
"Default" means any event that is or with the passage of time or the
giving of notice (or both) would be an Event of Default.
"Definitive Note" means a certificated Note registered in the name of
the Holder thereof and issued in accordance with Section 2.06 hereof, in the
form of Exhibit A-1 hereto except that such Note shall not bear the Global Note
Legend and shall not have the "Schedule of Exchanges of Interests in the Global
Note" attached thereto.
"Depositary" means, with respect to the Notes issuable or issued in
whole or in part in global form, the Person specified in Section 2.03 hereof as
the Depositary with respect to the Notes, and any and all successors thereto
appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.
"Disqualified Stock" means any Capital Stock that, by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable at the option of the holder thereof), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or redeemable at the option of the Holder thereof, in
whole or in part, on or prior to the date that is 91 days after the date on
which the Notes mature, except to the extent that such Capital Stock is solely
redeemable with, or solely exchangeable for, any Capital Stock of such Person
that is not Disqualified Stock.
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"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Euroclear" means Morgan Guaranty Trust Company of New York, Brussels
office, as operator of the Euroclear system.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Notes" means notes registered under the Securities Act that
are issued under Section 2.06 hereof in exchange for the Notes pursuant to the
Exchange Offer.
"Exchange Offer" has the meaning set forth in the Registration Rights
Agreement.
"Exchange Offer Registration Statement" has the meaning set forth in
the Registration Rights Agreement.
"Existing Indebtedness" means up to $600,000 in aggregate principal
amount (or amount of Capital Lease Obligation) of Indebtedness of the Company
and its Restricted Subsidiaries (other than Indebtedness under any Credit
Facility and the Notes) in existence on the Issue Date, until such amounts are
repaid.
"Fair Market Value" means, with respect to consideration received or to
be received pursuant to any transaction by any Person, the fair market value of
such consideration as determined in good faith by the Board of Directors of the
Company.
"Financial Hedging Obligations" means, with respect to any Person, the
net payment Obligations of such Person under (i) interest rate swap agreements,
interest rate cap agreements and interest rate collar agreements and (ii) other
agreements or arrangements designed to protect such Person against fluctuations
in interest rates or currency exchange rates incurred or entered into in the
ordinary course of its business and not for speculative purposes.
"Fixed Charges" means, with respect to any Person for any period, the
sum, without duplication, of (i) the consolidated interest expense of such
Person and its Restricted Subsidiaries for such period, whether paid or accrued
(including, without limitation or duplication, amortization of debt issuance
costs and original issue discount, non-cash interest payments, the interest
component of any deferred payment obligations, the interest component of all
payments associated with Capital Lease Obligations, commissions, discounts and
other fees and charges incurred in respect of letter of credit or bankers'
acceptance financings, and net payments (if any) pursuant to Hedging
Obligations), (ii) the consolidated interest of such Person and its Restricted
Subsidiaries that was capitalized during such period, (iii) any interest expense
on Indebtedness of another Person that is guaranteed by such Person or one of
its Restricted Subsidiaries or secured by a Lien on assets of such Person or one
of its Restricted Subsidiaries (whether or not such guarantee or Lien is called
upon) and (iv) the product of (a) all dividend payments, whether or not in cash,
on any series of
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preferred stock of such Person or any of its Restricted Subsidiaries, other than
dividend payments on Equity Interests payable solely in Equity Interests of the
Company (other than Disqualified Stock), times (b) a fraction, the numerator of
which is one and the denominator of which is one minus the then current combined
federal, state and local statutory tax rate of such Person, expressed as a
decimal, in each case, on a consolidated basis and in accordance with GAAP.
"Fixed Charge Coverage Ratio" means with respect to any Person for any
period, the ratio of the Consolidated Cash Flow of such Person for such period
to the Fixed Charges of such Person for such period. In the event that the
Company or any of its Restricted Subsidiaries incurs, assumes, guarantees or
redeems any Indebtedness (other than revolving credit borrowings under any
Credit Facility) or issues or redeems preferred stock subsequent to the
commencement of the period for which the Fixed Charge Coverage Ratio is being
calculated but on or prior to the date on which the event for which the
calculation of the Fixed Charge Coverage Ratio is made (the "Calculation Date"),
then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect
to such incurrence, assumption, guarantee or redemption of Indebtedness, or such
issuance or redemption of preferred stock, as if the same had occurred at the
beginning of the applicable four-quarter reference period. In addition, for
purposes of making the computation referred to above, (i) acquisitions that have
been made by the Company or any of its Restricted Subsidiaries, including
through mergers or consolidations and including any related financing
transactions, during the four-quarter reference period or subsequent to such
reference period and on or prior to the Calculation Date shall be deemed to have
occurred on the first day of the four-quarter reference period and Consolidated
Cash Flow for such reference period shall be calculated without giving effect to
clause (iii) of the proviso set forth in the definition of Consolidated Net
Income, (ii) the Consolidated Cash Flow attributable to discontinued operations,
as determined in accordance with GAAP, and operations or businesses disposed of
prior to the Calculation Date, shall be excluded, and (iii) the Fixed Charges
attributable to discontinued operations, as determined in accordance with GAAP,
and operations or businesses disposed of prior to the Calculation Date, shall be
excluded, but only to the extent that the obligations giving rise to such Fixed
Charges will not be obligations of the referent Person or any of its Restricted
Subsidiaries following the Calculation Date.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants, the statements and pronouncements of
the Financial Accounting Standards Board and such other statements by such other
entities as have been approved by a significant segment of the accounting
profession, which are applicable at the date of determination.
"Global Note Legend" means the legend set forth in Section 2.06(g)(ii)
hereof, which is required to be placed on all Global Notes issued under this
Indenture.
"Global Notes" means, individually and collectively, each of the
Restricted Global Notes and the Unrestricted Global Notes, in the form of
Exhibit A hereto issued in accordance with Section 2.01, 2.06(b)(iv),
2.06(d)(iv) or 2.06(f) hereof.
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"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America for the payment of which guarantees
or obligations the full faith and credit of the United States is pledged.
"guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof or pledging assets to secure), of
all or any part of any Indebtedness.
"Guarantors" means (i) each of the Company's Restricted Subsidiaries
that becomes a guarantor of the Notes in accordance with the provisions of
Section 10.01 hereof and (ii) each of the Company's Restricted Subsidiaries
executing a supplemental indenture in which such Restricted Subsidiary agrees to
be bound by the terms of the Indenture; provided that any Person constituting a
Guarantor as described above shall cease to constitute a Guarantor when its
respective Subsidiary Guarantee is released in accordance with the terms
thereof.
"Hedging Obligations" means, with respect to any Person, collectively,
the Currency Hedging Obligations of such Person and the Financial Hedging
Obligations of such Person.
"Holder" means a Person in whose name a Note is registered.
"Indebtedness" means, with respect to any Person, any indebtedness of
such Person, whether or not contingent, in respect of borrowed money or
evidenced by bonds, notes, debentures or similar instruments or letters of
credit (or reimbursement agreements in respect thereof) or banker's acceptances
or representing Capital Lease Obligations or the balance deferred and unpaid of
the purchase price of any property or representing any Hedging Obligations,
except any such balance that constitutes an accrued expense or trade payable, if
and to the extent any of the foregoing indebtedness (other than letters of
credit and Hedging Obligations) would appear as a liability upon a balance sheet
of such Person prepared in accordance with GAAP, as well as all Indebtedness of
others secured by a Lien on any asset of such Person (whether or not such
Indebtedness is assumed by such Person) and, to the extent not otherwise
included, the guarantee by such Person of any Indebtedness or any other
liability, whether or not contingent, of any other Person, and whether or not it
appears on the balance sheet of such other Person. The amount of any
Indebtedness outstanding as of any date shall be (i) the accreted value thereof,
in the case of any Indebtedness that does not require current payments of
interest, and (ii) the principal amount thereof, together with any interest
thereon that is more than 30 days past due, in the case of any other
Indebtedness.
"Indenture" means this Indenture, as amended or supplemented from time
to time.
"Independent Financial Advisor" means a nationally recognized
accounting, appraisal or investment banking firm that is, in the reasonable
judgment of the Board of Directors, qualified to perform the task for which such
firm has been engaged hereunder and disinterested and independent with respect
to the Company and its Affiliates; provided, that providing accounting,
appraisal or investment banking services to the Company or any of its Affiliates
or having an employee, officer
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or other representative serving as a member of the Board of Directors of the
Company or any of its Affiliates will not disqualify any firm from being an
Independent Financial Advisor.
"Indirect Participant" means a Person who holds a beneficial interest
in a Global Note through a Participant.
"Initial Notes" means the $130,000,000 in aggregate principal amount of
the Notes initially authenticated and delivered under the Indenture on the Issue
Date.
"Investments" means, with respect to any Person, all investments by
such Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including guarantees of Indebtedness or other Obligations),
advances or capital contributions (excluding commission, travel and
entertainment, moving, and similar advances to officers and employees made in
the ordinary course of business), purchases or other acquisitions for
consideration of Indebtedness, Equity Interests or other securities, together
with all items that are or would be classified as investments on a balance sheet
prepared in accordance with GAAP. If the Company or any of its Restricted
Subsidiaries sells or otherwise disposes of any Equity Interests of any direct
or indirect Restricted Subsidiary of the Company such that, after giving effect
to any such sale or disposition, such Person is no longer a direct or indirect
Subsidiary of the Company, the Company, or such Restricted Subsidiary, as the
case may be, shall be deemed to have made an Investment on the date of any such
sale or disposition equal to the fair market value of the Equity Interests of
such Restricted Subsidiary not sold or disposed of in an amount determined as
provided in the fourth paragraph of Section 4.07 hereof.
"Issue Date" means the date on which the Notes are first authenticated
and delivered under the Indenture.
"Legal Holiday" a Saturday, a Sunday or a day on which banking
institutions in the City of New York or at a place of payment are authorized by
law, regulation or executive order to remain closed. 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.
"Letter of Transmittal" means the letter of transmittal to be prepared
by the Company and sent to all Holders of the Notes for use by such Holders in
connection with the Exchange Offer.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in any asset and any filing of or agreement to give any financing
statement under the Uniform Commercial Code (or equivalent statutes) of any
jurisdiction).
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"Liquidated Damages" means all liquidated damages then owing pursuant
to Section 5 of the Registration Rights Agreement.
"Net Income" means, with respect to any Person, the net income (loss)
of such Person, determined in accordance with GAAP and before any reduction in
respect of preferred stock dividends, excluding, however, (i) any gain (but not
loss), together with any related provision for taxes on such gain (but not
loss), realized in connection with (a) any Asset Sale (including, without
limitation, dispositions pursuant to sale and leaseback transactions), or (b)
the disposition of any securities by such Person or any of its Restricted
Subsidiaries or the extinguishment of any Indebtedness of such Person or any of
its Restricted Subsidiaries and (ii) any extraordinary or nonrecurring gain (but
not loss), together with any related provision for taxes on such extraordinary
or nonrecurring gain (but not loss).
"Net Proceeds" means the aggregate cash proceeds or Cash Equivalents
received by the Company or any of its Restricted Subsidiaries in respect of any
Asset Sale (including, without limitation, any cash received upon the sale or
other disposition of any non-cash consideration received in any Asset Sale), net
of the direct costs relating to such Asset Sale (including, without limitation,
legal, accounting, investment banking and brokers fees, and sales and
underwriting commissions) and any relocation expenses incurred as a result
thereof, taxes paid or payable as a result thereof (after taking into account
any available tax credits or deductions and any tax sharing arrangements),
amounts required to be applied to the repayment of Indebtedness (other than
Indebtedness under any Credit Facility) secured by a Lien on the asset or assets
that were the subject of such Asset Sale and any reserve for adjustment in
respect of the sale price of such asset or assets established in accordance with
GAAP.
"Non-Recourse Indebtedness" means Indebtedness (i) as to which neither
the Company nor any of its Restricted Subsidiaries, (a) provides any guarantee
or credit support of any kind (including any undertaking, guarantee, indemnity,
agreement or instrument that would constitute Indebtedness) or (b) is directly
or indirectly liable (as a guarantor or otherwise), (ii) the incurrence of which
will not result in any recourse against any of the assets of the Company or its
Restricted Subsidiaries, and (iii) no default with respect to which (including
any rights that the holders thereof may have to take enforcement action against
an Unrestricted Subsidiary) would permit (upon notice, lapse of time or both)
any holder of any other Indebtedness of the Company or any of its Restricted
Subsidiaries to declare pursuant to the express terms governing such
Indebtedness a default on such other Indebtedness or cause the payment thereof
to be accelerated or payable prior to its stated maturity.
"Non-U.S. Person" means a person who is not a U.S. Person.
"Note Custodian" means the Trustee, as custodian with respect to the
Notes in global form, or any successor entity thereto.
"Notes" has the meaning assigned to it in the preamble to this
Indenture.
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<PAGE> 18
"Obligations" means any principal, premium (if any), interest
(including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Company or its Restricted
Subsidiaries whether or not a claim for post-filing interest is allowed in such
proceeding), penalties, fees, charges, expenses, indemnifications, reimbursement
obligations, damages (including Liquidated Damages), guarantees (including the
Subsidiary Guarantees) and other liabilities or amounts payable under the
documentation governing any Indebtedness or in respect thereof.
"Offering" means the offering of the Initial Notes by the Company.
"Offering Memorandum" means the Offering Memorandum of the Company
dated June 2, 1998 with respect to the Offering.
"Officer" means, with respect to any Person, the Chairman of the Board,
the Chief Executive Officer, the President, the Chief Operating Officer, the
Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller,
the Secretary or any Vice-President of such Person.
"Officers' Certificate" means a certificate signed on behalf of the
Company by two Officers of the Company, one of whom must be the principal
executive officer, the principal financial officer, the treasurer or the
principal accounting officer of the Company, that meets the requirements of
Section 11.05 hereof.
"Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of Section
11.05 hereof. The counsel may be an employee of or counsel to the Company or any
Subsidiary of the Company.
"Participant" means, with respect to DTC, Euroclear or CEDEL, a Person
who has an account with DTC, Euroclear or CEDEL, respectively (and, with respect
to DTC, shall include Euroclear and CEDEL).
"Participating Broker-Dealer" has the meaning set forth in the
Registration Rights Agreement.
"Permitted Business" means the lines of business conducted by the
Company on the Issue Date and businesses reasonably related or incidental
thereto or which is a reasonable extension thereof.
"Permitted Holders" means Lehman Brothers Holdings Inc., any direct or
indirect Subsidiary of Lehman Brothers Holdings Inc., or any other Person
directly or indirectly controlled by or under direct or indirect common control
with Lehman Brothers Holdings Inc. or any of its direct or indirect
Subsidiaries. For purposes of this definition, "control" (including, with
correlative meanings, the terms "controlled by" and "under common control
with"), as used with respect to any Person, shall mean the possession, directly
or indirectly, of the power to direct or cause the direction of the
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<PAGE> 19
management or policies of such Person, whether through the ownership of voting
securities, by agreement or otherwise.
"Permitted Investments" means (a) any Investment in the Company or in a
Restricted Subsidiary of the Company; (b) any Investment in Cash Equivalents or
deposit accounts maintained in the ordinary course of business consistent with
past practices; (c) any Investment by the Company or any Restricted Subsidiary
of the Company in a Person, if as a result of such Investment (i) such Person
becomes a Restricted Subsidiary of the Company or (ii) such Person is merged,
consolidated or amalgamated with or into, or transfers or conveys substantially
all of its assets to, or is liquidated into, the Company or a Restricted
Subsidiary of the Company; (d) any Restricted Investment made as a result of the
receipt of non-cash consideration from an Asset Sale that was made pursuant to
and in compliance with the covenant described in Section 4.10 hereof; (e) any
acquisition of assets solely in exchange for the issuance of Equity Interests
(other than Disqualified Stock) of the Company; (f) any Investment received in
settlement of debts, claims or disputes owed to the Company or any Restricted
Subsidiary of the Company that arose out of transactions in the ordinary course
of business; (g) any Investment received in connection with or as a result of a
bankruptcy, workout or reorganization of any Person; (h) advances and extensions
of credit in the nature of accounts receivable arising from the sale or lease of
goods or services or the licensing of property in the ordinary course of
business; (i) other Investments by the Company or any Restricted Subsidiary of
the Company in any Person having an aggregate fair market value (measured as of
the date each such Investment is made and without giving effect to subsequent
changes in value), when taken together with all other Investments made pursuant
to this clause (i) (net of returns of capital, dividends and interest paid on
Investments and sales, liquidations and redemptions of Investments), not to
exceed 5% of Consolidated Tangible Assets; (j) Investments in the form of
intercompany Indebtedness or Guarantees of Indebtedness of a Restricted
Subsidiary of the Company permitted under clauses (v) and (ix) of Section 4.09
hereof; and (k) Investments arising in connection with Financial Hedging
Obligations or Currency Hedging Obligations that are incurred in the ordinary
course of business for the purpose of fixing or hedging currency or interest
rate risk (including with respect to any floating rate Indebtedness that is
permitted by the terms of the Indenture to be outstanding) in connection with
the conduct of the business of the Company and its Subsidiaries and not for
speculative purposes.
"Permitted Liens" means (i) Liens in favor of the Company or any
Guarantor; (ii) Liens on property of a Person existing at the time such Person
is merged into or consolidated with the Company or any Restricted Subsidiary of
the Company; provided that such Liens were in existence prior to the
contemplation of such merger or consolidation and do not extend to any assets
other than those of the Person merged into or consolidated with the Company;
(iii) Liens on property existing at the time of acquisition thereof by the
Company or any Restricted Subsidiary of the Company, provided that such Liens
were in existence prior to the contemplation of such acquisition; (iv) Liens
existing on the Issue Date and any extensions or renewals thereof, provided that
such extension or renewal of such Liens does not extend to or cover any other
property or assets of the Company or any Restricted Subsidiary; (v) statutory
Liens (other than any Lien imposed by ERISA) or landlords and carriers',
warehouseman's, mechanics', suppliers', materialmen's, repairmen's or other like
Liens arising in the ordinary course of business; (vi) Liens for taxes,
assessments, government
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<PAGE> 20
charges or claims not yet due and payable or which are being contested in good
faith by appropriate proceedings promptly instituted and diligently conducted
and if a reserve or other appropriate provisions, if any, as shall be required
in conformity with GAAP shall have been made therefor; (vii) Liens incurred or
deposits made in the ordinary course of business in connection with workers'
compensation, unemployment insurance and other types of social security; (viii)
Liens created or deposits made to secure the performance of tenders, bids,
leases, statutory obligations, surety and appeal bonds, government contracts,
performance and return-of-money bonds and other obligations of a like nature
incurred in the ordinary course of business (exclusive of obligations for the
payment of borrowed money); (ix) easements, rights-of-way, licenses, covenants
reservations, restrictions and other similar charges or encumbrances not
interfering in any material respect with the business of the Company or any
Restricted Subsidiary incurred in the ordinary course of business; (x) any
attachment or judgment Lien, unless the judgment it secures shall not, within 60
days after the entry thereof, have been discharged or execution thereof stayed
pending appeal, or shall not have been discharged within 60 days after the
expiration of any such stay; (xi) any other Liens imposed by operation of law
which do not materially affect the Company's or any Guarantor's ability to
perform its obligations under the Notes, the Subsidiary Guarantees and the
Indenture; (xii) rights of banks to set off deposits against debts owed to said
bank; (xiii) Liens upon specific items of inventory or other goods and proceeds
of the Company or its Restricted Subsidiaries securing the Company's or any
Restricted Subsidiary's obligations in respect of bankers' acceptances issued or
created for the account of any such Person to facilitate the purchase, shipment
or storage of such inventory or other goods; (xiv) Liens securing reimbursement
obligations with respect to letters of credit which encumber documents and other
property relating to such letters of credit and the products and proceeds
thereof entered into in the ordinary course of business consistent with past
practices; (xv) Liens securing Indebtedness that is pari passu in right of
payment with the Notes, provided that the Notes are equally and ratably secured;
(xvi) Liens to secure Purchase Money Indebtedness or other purchase money
obligations incurred for the purpose of financing all or a part of the purchase
price or cost of construction or improvement of property, plant or equipment
used in the Permitted Business and acquired, constructed or improved after the
Issue Date, provided that (1) the principal amount of Indebtedness secured by
such Liens shall not exceed 100% of the lesser of cost or Fair Market Value of
the property or assets so acquired, constructed or improved plus transaction
costs related thereto, (2) such Liens shall not encumber any other property or
assets of the Company or any Restricted Subsidiary (other than the charters or
other contracts relating solely to such property or assets, and the proceeds
therefrom and accessions and upgrades thereto) and (3) such Liens shall attach
to such Property or assets within 120 days of the date of the completion of the
construction or acquisition of such Property or assets; (xvii) Liens to secure
any Permitted Refinancing Indebtedness incurred to refinance any Indebtedness
secured by any Lien referred to in the foregoing clauses (ii), (iii), (iv), (xv)
and (xvi), provided, however, that such new Lien shall be limited to all or part
of the same property that secured the original Lien (provided that such Liens
may extend to after-acquired property, including any assets or Capital Stock of
any subsequently formed or acquired Subsidiary, if such original Lien included
such property or assets as collateral); (xviii) Liens in favor of customs and
revenue authorities to secure payment of customs duties in connection with the
importation of goods in the ordinary course of business and other similar Liens
arising in the ordinary course of business; (xix) leases or subleases granted to
third Persons in ordinary course of business consistent with past practices not
interfering with the ordinary course
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<PAGE> 21
of business of the Company or its Restricted Subsidiaries; (xx) deposits made in
the ordinary course of business to secure liability to insurance carriers, and
Liens on the proceeds of insurance granted to insurance carriers solely to
secure the payment of financed premiums; (xxi) Liens in favor of a trustee under
any indenture securing amounts due to the trustee in connection with its
services under such indenture; (xxii) Liens under licensing agreements for use
of intellectual property entered into in the ordinary course of business;
(xxiii) Liens incurred in the ordinary course of business of the Company or any
Subsidiary of the Company with respect to obligations that do not exceed
$10,000,000 at any one time outstanding and that (a) are not incurred in
connection with the borrowing of money or the obtaining of advances or credit
(other than trade credit in the ordinary course of business) and (b) do not in
the aggregate materially detract from the value of the property or materially
impair the use thereof in the operation of business by the Company or such
Restricted Subsidiary and (xxiv) any attachment or judgment Lien not
constituting an Event of Default under clause (f) of the first paragraph of
Section 6.01 hereof.
"Permitted Refinancing Indebtedness" means any Indebtedness of the
Company or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or any of its Restricted Subsidiaries
(other than intercompany Indebtedness); provided that: (i) the principal amount
(or accreted value, if applicable) of such Permitted Refinancing Indebtedness
does not exceed the principal amount of (or accreted value, if applicable), plus
accrued and unpaid interest on, the Indebtedness so extended, refinanced,
renewed, replaced, defeased or refunded (plus the amount of reasonable expenses
incurred in connection therewith); (ii) such Permitted Refinancing Indebtedness
has a final maturity date later than the final maturity date of, and has a
Weighted Average Life to Maturity equal to or greater than the Weighted Average
Life to Maturity of, the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded; (iii) if the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded is subordinated in right of
payment to the Notes, such Permitted Refinancing Indebtedness has a final
maturity date later than the final maturity date of, and is subordinated in
right of payment to, the Notes on terms at least as favorable to the Holders of
Notes as those contained in the documentation governing the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded; and (iv) such
Indebtedness is incurred either by the Company or a Restricted Subsidiary who is
the obligor on the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded.
"Person" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, limited liability company,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
"Preferred Stock" means any Capital Stock of a Person, however
designated, which entitles the holder thereof to a preference with respect to
dividends, distributions or liquidation proceeds of such Person over the holders
of the other Capital Stock issued by such Person.
"Private Placement Legend" means the legend set forth in Section
2.06(g)(i) hereof to be placed on all Notes issued under this Indenture except
where otherwise permitted by the provisions of this Indenture.
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<PAGE> 22
"Proceeding" means any voluntary or involuntary insolvency, bankruptcy,
receivership, custodianship, liquidation, dissolution, reorganization,
assignment for the benefit of creditors, appointment of a custodian, receiver,
trustee or other officer with similar powers or any other proceeding for the
liquidation, dissolution or other winding up of a Person (including, without
limitation, any such proceeding under Bankruptcy Code).
"Public Equity Offering" means any public underwritten offering by the
Company of Voting Stock (other than Disqualified Stock) of the Company pursuant
to registration under the Securities Act of 1933, as amended; provided, however,
that the proceeds net of any underwriting discount and commission and other
expenses to the Company from any such offering shall be at least $25,000,000.
"Purchase Agreement" means the Purchase Agreement dated June 2, 1998
among the Company and the Initial Purchasers (as defined therein.)
"Purchase Money Indebtedness" of a Person means any Indebtedness
represented by Capital Lease Obligations, mortgage or construction financings,
purchase money obligations or Acquired Debt, in each case incurred for the
purpose of financing all or any part of (i) the purchase price, acquisition cost
or cost of construction or improvement of property, plant or equipment used in
the Permitted Business of such Person and acquired, constructed or improved
after the Issue Date, provided the aggregate principal amount (or Capital Lease
Obligation) of such Indebtedness (including the amount of any Acquired Debt
incurred in connection with such acquisition, construction, or improvement)
shall not exceed the lesser of the Fair Market Value or 70% of the purchase
price, acquisition cost or cost of construction or improvement with respect to
the property, plant or equipment for which such Indebtedness is being incurred
or (ii) the purchase price or acquisition cost for the purchase or acquisition
of all of the outstanding Capital Stock of a Person whose assets consist
substantially of property, plant or equipment used in the Permitted Business,
provided the aggregate principal amount of such Indebtedness (including the
amount of any Acquired Debt incurred in connection with, or as a result of, each
purchase) shall not exceed the lesser the Fair Market Value of, or 70% of that
portion of the purchase price or acquisition cost allocable to, the property,
plant or equipment of the Person acquired.
"QIB" means a "qualified institution buyer" as defined in Rule 144A.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of June 8, 1998, by and among the Company and the other
parties named on the signature pages thereof, attached hereto as Exhibit E, as
such agreement may be amended, modified or supplemented from time to time.
"Regulation S" means Regulation S promulgated under the Securities Act.
"Regulation S Global Note" means a Regulation S Temporary Global Note
or Regulation S Permanent Global Note, as appropriate.
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<PAGE> 23
"Regulation S Permanent Global Note" means a permanent global Note in
the form of Exhibit A-1 hereto bearing the Global Note Legend and the Private
Placement Legend and deposited with or on behalf of and registered in the name
of the Depositary or its nominee, issued in a denomination equal to the
outstanding principal amount of the Regulation S Temporary Global Note upon
expiration of the Restricted Period.
"Regulation S Temporary Global Note" means a temporary global Note in
the form of Exhibit A-2 hereto bearing the Private Placement Legend and
deposited with or on behalf of and registered in the name of the Depositary or
its nominee, issued in a denomination equal to the outstanding principal amount
of the Notes initially sold in reliance on Rule 903 of Regulation S.
"Responsible Officer," when used with respect to the Trustee, means any
officer, including, without limitation, any vice president, assistant vice
president, assistant treasurer or secretary within the Corporate Trust
Administration of the Trustee (or any successor group of the Trustee) or any
other officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to particular corporate trust matter, any other officer or employee to whom such
matter is referred because of his knowledge of and familiarity with the
particular subject.
"Restricted Definitive Note" means a Definitive Note bearing the
Private Placement Legend.
"Restricted Global Note" means a Global Note bearing the Private
Placement Legend.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Period" means the 40-day distribution compliance period as
set forth in Regulation S.
"Restricted Subsidiary" of a Person means any Subsidiary of the
referenced Person that is not an Unrestricted Subsidiary; provided that, on the
Issue Date, all Subsidiaries of the Company shall be Restricted Subsidiaries of
the Company.
"Rule 144" means Rule 144 promulgated under the Securities Act.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 144A Global Note" means the Global Note in the form of Exhibit
A-1 hereto bearing the Global Note Legend and the Private Placement Legend and
deposited with and registered in the name of the Depositary or its nominee that
will be issued in a denomination equal to the outstanding principal amount of
the Notes sold in reliance on Rule 144A.
"Rule 903" means Rule 903 promulgated under the Securities Act.
"Rule 904" means Rule 904 promulgated under the Securities Act.
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<PAGE> 24
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Shelf Registration Statement" has the meaning set forth in the
Registration Rights Agreement.
"Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date of this Indenture.
"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"Subordinated Indebtedness" means any Indebtedness of the Company which
is subordinated in right of payment to the Notes.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person and (ii) any partnership (a) the sole general partner or the managing
general partner of which is such Person or an entity described in clause (i) and
related to such Person or (b) the only general partners of which are such Person
or of one or more entities described in clause (i) and related to such Person
(or any combination thereof).
"Subsidiary Guarantee" means the guarantee of the Notes by any
Guarantor pursuant to Article 10 hereof pursuant to the execution and delivery
of a supplemental indenture substantially in the form of Exhibit D hereof
entered into in accordance with Section 4.16 hereof.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the date on which this Indenture is qualified
under the TIA.
"Trustee" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture and
thereafter means the successor serving hereunder.
"Unrestricted Definitive Note" means one or more Definitive Notes that
do not bear and are not required to bear the Private Placement Legend.
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<PAGE> 25
"Unrestricted Global Note" means a permanent global Note in the form of
Exhibit A-1 attached hereto that bears the Global Note Legend and that has the
"Schedule of Exchanges of Interests in the Global Note" attached thereto, and
that is deposited with or on behalf of and registered in the name of the
Depositary, representing a series of Notes that do not bear the Private
Placement Legend.
"Unrestricted Subsidiary" means any Subsidiary of the Company
(including any newly acquired or newly formed Subsidiary of the Company) that is
designated by the Board of Directors as an Unrestricted Subsidiary pursuant to a
resolution of the Board of Directors as certified in an Officer's Certificate
delivered to the Trustee, but only to the extent that such Subsidiary at the
time of designation and thereafter, (a) has no Indebtedness other than
Non-Recourse Indebtedness; (b) is not party to any agreement, contract,
arrangement or understanding with the Company or any Restricted Subsidiary of
the Company unless the terms of any such agreement, contract, arrangement or
understanding are no less favorable to the Company or such Restricted Subsidiary
than those that might be obtained, in light of all the circumstances, at the
time from Persons who are not Affiliates of the Company; (c) is a Person with
respect to which neither the Company nor any of its Restricted Subsidiaries has
any direct or indirect obligation (x) to subscribe for additional Equity
Interests or (y) to maintain or preserve such Person's financial condition or to
cause such Persons to achieve any specified levels of operating results; (d) has
not guaranteed or otherwise directly or indirectly provided credit support for
any Indebtedness of the Company or any of its Restricted Subsidiaries; and (e)
do not own any Capital Stock of or own or hold any Lien on any property of, the
Company or any Restricted Subsidiary of the Company.
"U.S. Person" means a U.S. person as defined in Rule 902(o) under the
Securities Act.
"Voting Stock" of any Person as of any date means the Capital Stock of
such Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the sum
of the products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (ii) the then outstanding principal
amount of such Indebtedness.
"Wholly Owned Restricted Subsidiary" means a Restricted Subsidiary (i)
100% of the outstanding Capital Stock and other Equity Interests of which is
directly or indirectly owned by the Company or (ii) that is organized in a
foreign jurisdiction and is required by the applicable laws and regulations of
such jurisdiction to be partially owned by the government of such foreign
jurisdiction or individual or corporate citizens of such foreign jurisdiction in
order for such Restricted Subsidiary to transact business in such foreign
jurisdiction, provided that the Company, directly or indirectly, owns the
remaining Capital Stock or ownership interests in such Restricted Subsidiary
and, by contract or otherwise, controls the management and business of such
Restricted Subsidiary and
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<PAGE> 26
derives the economic benefits of ownership of such Restricted Subsidiary to
substantially the same extent as if such Restricted Subsidiary were a wholly
owned Restricted Subsidiary.
SECTION 1.02 Other Definitions.
<TABLE>
<CAPTION>
DEFINED IN
TERM SECTION
---------------------------------------------------------
<S> <C>
"Affiliate Transaction" ................ 4.11
"Asset Sale Offer" ..................... 3.09
"Change of Control Offer" .............. 4.15
"Change of Control Payment" ............ 4.15
"Change of Control Payment Date" ....... 4.15
"Covenant Defeasance" .................. 8.03
"DTC" .................................. 2.03
"Event of Default" ..................... 6.01
"Excess Proceeds" ...................... 4.10
"Funding Guarantor" .................... 10.05
"incur" ................................ 4.09
"Legal Defeasance" ..................... 8.02
"Offer Amount" ......................... 3.09
"Offer Period" ......................... 3.09
"Paying Agent" ......................... 2.03
"Payment Default" ...................... 6.01
"Permitted Debt" ....................... 4.09
"Purchase Date" ........................ 3.09
"Registrar" ............................ 2.03
"Restricted Payments" .................. 4.07
</TABLE>
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:
"indenture securities" means the Notes;
"indenture security Holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
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<PAGE> 27
"obligor" on the Notes means the Company and any successor obligor upon
the Notes.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by 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) references to sections of or rules under the Securities Act shall
be deemed to include substitute, replacement of successor sections or rules
adopted by the SEC from time to time.
ARTICLE II
THE NOTES
SECTION 2.01 Form and Dating.
The Notes and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A hereto. The Notes may have notations,
legends or endorsements required by law, stock exchange rule or usage. Each Note
shall be dated the date of its authentication. The Notes shall be in
denominations of $1,000 and integral multiples thereof. Subject to Section 4.16,
the Notes may bear notations of Subsidiary Guarantees.
The terms and provisions contained in the Notes shall constitute, and
are hereby expressly made, a part of this Indenture and the Company and the
Trustee, by their execution and delivery of this Indenture, expressly agree to
such terms and provisions and to be bound thereby. However, to the extent any
provision of any Note conflicts with the express provisions of this Indenture,
the provisions of this Indenture shall govern and be controlling.
Notes issued in global form shall be substantially in the form of
Exhibit A-1 or A-2 attached hereto (including the Global Note Legend and the
"Schedule of Exchanges in the Global Note"
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<PAGE> 28
attached thereto). Notes issued in definitive form shall be substantially in the
form of Exhibit A-1 attached hereto (but without the Global Note Legend and
without the "Schedule of Exchanges of Interests in the Global Note" attached
thereto). Each Global Note shall represent such of the outstanding Notes as
shall be specified therein and each shall provide that it shall represent the
aggregate principal amount of outstanding Notes from time to time endorsed
thereon and that the aggregate principal amount of outstanding Notes represented
thereby may from time to time be reduced or increased, as appropriate, to
reflect exchanges and redemptions. Any endorsement of a Global Note to reflect
the amount of any increase or decrease in the aggregate principal amount of
outstanding Notes represented thereby shall be made by the Trustee, the
Depositary or the Note Custodian, at the direction of the Trustee, in accordance
with instructions given by the Holder thereof as required by Section 2.06
hereof.
Notes offered and sold in reliance on Regulation S shall be issued
initially in the form of the Regulation S Temporary Global Note, which shall be
deposited on behalf of the purchasers of the Notes represented thereby with the
Trustee, at its New York office, as custodian for the Depositary, and registered
in the name of the nominee of the Depository for credit to the accounts of
designated agents holding on behalf of Euroclear or CEDEL, duly executed by the
Company and authenticated by the Trustee as hereinafter provided. The Restricted
Period shall be terminated upon the receipt by the Trustee of (i) a written
certificate from the Depositary, together with copies of certificates from
Euroclear and CEDEL certifying that they have received certification of
non-United States beneficial ownership of 100% of the aggregate principal amount
of the Regulation S Temporary Global Note (except to the extent of any
beneficial owners thereof who acquired an interest therein during the Restricted
Period pursuant to another exemption from registration under the Securities Act
and who will take delivery of a beneficial ownership interest in a 144A Global
Note bearing a Private Placement Legend, all as contemplated by Section 2.06(b)
hereof), and (ii) an Officers' Certificate from the Company. Following the
termination of the Restricted Period, beneficial interests in the Regulation S
Temporary Global Note shall be exchanged for beneficial interests in Regulation
S Permanent Global Notes pursuant to the Applicable Procedures. Simultaneously
with the authentication of Regulation S Permanent Global Notes, the Trustee
shall cancel the Regulation S Temporary Global Note. The aggregate principal
amount of the Regulation S Temporary Global Note and the Regulation S Permanent
Global Notes may from time to time be increased or decreased by adjustments made
on the records of the Trustee and the Depositary or its nominee, as the case may
be, in connection with transfers of interest as hereinafter provided.
The provisions of the "Operating Procedures of the Euroclear System"
and "Terms and Conditions Governing Use of Euroclear" and the "General Terms and
Conditions of Cedel Bank" and "Customer Handbook" of CEDEL shall be applicable
to transfers of beneficial interests in the Regulation S Temporary Global Note
and the Regulation S Permanent Global Notes that are held by members of, or
Participants, in DTC through Euroclear or CEDEL.
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SECTION 2.02 Execution and Authentication.
Two Officers shall sign the Notes for the Company by manual or
facsimile signature.
If an Officer whose signature is on a Note no longer holds that office
at the time a Note is authenticated, the Note shall nevertheless be valid.
A Note shall not be valid until authenticated by the manual signature
of the Trustee. The signature shall be conclusive evidence that the Note has
been authenticated under this Indenture.
The Trustee shall, upon a written order of the Company signed by two
Officers, authenticate Notes for original issue on the Issue Date up to
$130,000,000 aggregate principal amount of the Notes. The aggregate principal
amount of Notes outstanding at any time may not exceed $200,000,000 except as
provided in Section 2.07 hereof. Additional amounts may be issued after the
Issue Date in one or more series from time to time subject to the limitations
set forth under Section 4.09 hereof.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. An authenticating agent may authenticate Notes
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 Holders or an
Affiliate of the Company.
SECTION 2.03 Registrar and Paying Agent.
The Company shall maintain an office or agency within the City and
State of New York where Notes may be presented for registration of transfer or
for exchange ("Registrar") and an office or agency where Notes may be presented
for payment ("Paying Agent"). The Registrar shall keep a register of the Notes
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 may change any Paying Agent or Registrar without
notice to any Holder. The Company shall promptly notify the Trustee in writing
of the name and address of any Agent not a party to this Indenture. 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 Depository Trust Company ("DTC") to
act as Depositary with respect to the Global Notes.
The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Note Custodian with respect to the Global Notes.
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SECTION 2.04 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 or Liquidated Damages, if any, or interest on the Notes, 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. The Company at any time may require a
Paying Agent to pay all money held by it to the Trustee. Upon payment over to
the Trustee, the Paying Agent (if other than the Company or a Subsidiary) shall
have no further liability for the money. If the Company or a Subsidiary 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. Upon any bankruptcy
or reorganization proceedings relating to the Company, the Trustee shall serve
as Paying Agent for the Notes.
SECTION 2.05 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
all Holders and shall otherwise comply with TIA Section 312(a). If the Trustee
is not the Registrar, the Company shall provide to a Responsible Officer of the
Trustee at least seven Business Days before each interest payment date 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 the Holders of Notes and the Company shall otherwise comply with TIA Section
312(a).
SECTION 2.06 Transfer and Exchange.
(a) Transfer and Exchange of Global Notes. A Global Note may
not be transferred as a whole except by the Depositary to a nominee of the
Depositary, by a nominee of the Depositary to the Depositary or to another
nominee of the Depositary, or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary. All Global Notes
will be exchanged by the Company for Definitive Notes if (i) the Company
delivers to the Trustee notice from the Depositary that it is unwilling or
unable to continue to act as Depositary for the Global Notes or that it is no
longer a clearing agency registered under the Exchange Act and, in either case,
a successor Depositary is not appointed by the Company within 90 days after the
date of such notice from the Depositary or (ii) the Company in its sole
discretion notifies the Trustee in writing that it elects to cause issuance of
the Notes in certificated form; provided that in no event shall the Regulation S
Temporary Global Note be exchanged by the Company for Definitive Notes prior to
(x) the expiration of the Restricted Period and (y) the receipt by the Registrar
of any certificates required pursuant to Rule 903 under the Securities Act. Upon
the occurrence of either of the preceding events in (i) or (ii) above,
Definitive Notes shall be issued in such names as the Depositary shall instruct
the Trustee. Global Notes also may be exchanged or replaced, in whole or in
part, as provided in Sections 2.07 and 2.11 hereof. Every Note authenticated and
delivered in exchange for, or in lieu of, a Global Note or any portion thereof,
pursuant to Section 2.07 or 2.11 hereof, shall be authenticated and delivered in
the form of, and shall be, a Global Note. A Global
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Note may not be exchanged for another Note other than as provided in this
Section 2.06(a), however, beneficial interests in a Global Note may be
transferred and exchanged as provided in Section 2.06(b), (c) or (f) hereof.
(b) Transfer and Exchange of Beneficial Interests in the
Global Notes. The transfer and exchange of beneficial interests in the Global
Notes shall be effected through the Depositary, in accordance with the
provisions of this Indenture and the Applicable Procedures. Beneficial interests
in the Restricted Global Notes shall be subject to restrictions on transfer
comparable to those set forth herein to the extent required by the Securities
Act. Transfers of beneficial interests in the Global Notes also shall require
compliance with either subparagraph (i) or (ii) below, as applicable, as well as
one or more of the other following subparagraphs as applicable:
(i) Transfer of Beneficial Interests in the Same
Global Note. Beneficial interests in any Restricted Global
Note may be transferred to Persons who take delivery thereof
in the form of a beneficial interest in the same Restricted
Global Note in accordance with the transfer restrictions set
forth in the Private Placement Legend; provided, however, that
prior to the expiration of the Restricted Period transfers of
beneficial interests in the Temporary Regulation S Global Note
may not be made to a U.S. Person or for the account or benefit
of a U.S. Person (other than an Initial Purchaser). Beneficial
interests in any Unrestricted Global Note may be transferred
only to Persons who take delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note. No written
orders or instructions shall be required to be delivered to
the Registrar to effect the transfers described in this
Section 2.06(b)(i).
(ii) All Other Transfers and Exchanges of Beneficial
Interests in Global Notes. In connection with all transfers
and exchanges of beneficial interests (other than a transfer
of a beneficial interest in a Global Note to a Person who
takes delivery thereof in the form of a beneficial interest in
the same Global Note), the transferor of such beneficial
interest must deliver to the Registrar (A) (1) a written order
from a Participant or an Indirect Participant given to the
Depositary in accordance with the Applicable Procedures
directing the Depositary to credit or cause to be credited a
beneficial interest in another Global Note in an amount equal
to the beneficial interest to be transferred or exchanged and
(2) instructions given in accordance with the Applicable
Procedures containing information regarding the Participant
account to be credited with such increase or (B) (1) a written
order from a Participant or an Indirect Participant given to
the Depositary in accordance with the Applicable Procedures
directing the Depositary to cause to be issued a Definitive
Note in an amount equal to the beneficial interest to be
transferred or exchanged and (2) instructions given by the
Depositary to the Registrar containing information regarding
the Person in whose name such Definitive Note shall be
registered to effect the transfer or exchange referred to in
(1) above; provided that in no event shall Definitive Notes be
issued upon the transfer or exchange of beneficial interests
in the Regulation S Temporary Global Note prior to (x) the
expiration of the Restricted Period and (y) the receipt by the
Registrar of any certificates required pursuant to Rule 903
under the Securities Act. Upon an Exchange Offer
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by the Company in accordance with Section 2.06(f) hereof, the
requirements of this Section 2.06(b)(ii) shall be deemed to
have been satisfied upon receipt by the Registrar of the
instructions contained in the Letter of Transmittal delivered
by the Holder of such beneficial interests in the Restricted
Global Notes. Upon satisfaction of all of the requirements for
transfer or exchange of beneficial interests in Global Notes
contained in this Indenture, the Notes and otherwise
applicable under the Securities Act, the Trustee shall adjust
the principal amount of the relevant Global Note(s) pursuant
to Section 2.06(h) hereof.
(iii) Transfer of Beneficial Interests to Another
Restricted Global Note. A beneficial interest in any
Restricted Global Note may be transferred to a Person who
takes delivery thereof in the form of a beneficial interest in
another Restricted Global Note if the transfer complies with
the requirements of clause (ii) above and the Registrar
receives the following:
(A) if the transferee will take delivery in
the form of a beneficial interest in the 144A Global
Note, then the transferor must deliver a certificate
in the form of Exhibit B hereto, including the
certifications in Item (1) thereof; or
(B) if the transferee will take delivery in
the form of the Regulation S Temporary Global Note or
the Regulation S Global Note, then the transferor
must deliver a certificate in the form of Exhibit B
hereto, including the certifications in Item (2)
thereof.
(iv) Transfer and Exchange of Beneficial Interests in
a Restricted Global Note for Beneficial Interests in the
Unrestricted Global Note. A beneficial interest in any
Restricted Global Note may be exchanged by any holder thereof
for a beneficial interest in an Unrestricted Global Note or
transferred to a Person who takes delivery thereof in the form
of a beneficial interest in an Unrestricted Global Note if the
exchange or transfer complies with the requirements of clause
(ii) above and:
(A) such exchange or transfer is effected
pursuant to the Exchange Offer in accordance with the
Registration Rights Agreement and the holder of the
beneficial interest to be transferred, in the case of
an exchange, or the transferee, in the case of a
transfer, is not (1) a broker-dealer, (2) a Person
participating in the distribution of the Exchange
Notes or (3) a Person who is an affiliate (as defined
in Rule 144) of the Company;
(B) any such transfer is effected pursuant
to the Shelf Registration Statement in accordance
with the Registration Rights Agreement;
(C) any such transfer is effected by a
Participating Broker-Dealer pursuant to the Exchange
Offer Registration Statement in accordance with the
Registration Rights Agreement; or
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(D) the Registrar receives the following:
(1) if the holder of such beneficial
interest in a Restricted Global Note proposes to exchange such
beneficial interest for a beneficial interest in an
Unrestricted Global Note, a certificate from such holder in
the form of Exhibit C hereto, including the certifications in
Item (1)(a) thereof;
(2) if the holder of such beneficial
interest in a Restricted Global Note proposes to transfer such
beneficial interest to a Person who shall take delivery
thereof in the form of a beneficial interest in an
Unrestricted Global Note, a certificate from such holder in
the form of Exhibit B hereto, including the certifications in
Item (4) thereof; and
(3) in each such case set forth in this
subparagraph (D), an Opinion of Counsel in form reasonably
acceptable to the Registrar to the effect that such exchange
or transfer is in compliance with the Securities Act and that
the restrictions on transfer contained herein and in the
Private Placement Legend are not required in order to maintain
compliance with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B) or (D)
above at a time when an Unrestricted Global Note has not yet been issued, the
Company shall issue and, upon receipt of an authentication order in accordance
with Section 2.02 hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
principal amount of beneficial interests transferred pursuant to subparagraph
(B) or (D) above.
Beneficial interests in an Unrestricted Global Note cannot be exchanged
for, or transferred to Persons who take delivery thereof in the form of, a
beneficial interest in a Restricted Global Note.
(c) Transfer or Exchange of Beneficial Interests for Definitive Notes.
(i) If any holder of a beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a
Definitive Note or to transfer such beneficial interest to a Person who
takes delivery thereof in the form of a Definitive Note, then, upon
receipt by the Registrar of the following documentation:
(A) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a Definitive Note, a certificate from such holder
in the form of Exhibit C hereto, including the certifications
in Item (2)(a) thereof;
(B) if such beneficial interest is being transferred
to a QIB in accordance with Rule 144A under the Securities
Act, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in Item (1) thereof;
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(C) if such beneficial interest is being transferred
to a Non-U.S. Person in an offshore transaction in accordance
with Rule 903 or Rule 904 under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in Item (2) thereof;
(D) if such beneficial interest is being transferred
pursuant to an exemption from the registration requirements of
the Securities Act in accordance with Rule 144 under the
Securities Act, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in Item (3)(a)
thereof;
(E) if such beneficial interest is being transferred
pursuant to any other exemption from the registration
requirements of the Securities Act, then the transferor must
deliver a certificate in the form of Exhibit B hereto,
including the certifications, certificates and Opinion of
Counsel required by Item (3) thereof, if applicable;
(F) if such beneficial interest is being transferred
to the Company or any of its Subsidiaries, a certificate to
the effect set forth in Exhibit B hereto, including the
certifications in Item (3)(b) thereof; or
(G) if such beneficial interest is being transferred
pursuant to an effective registration statement under the
Securities Act, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in Item (3)(c)
thereof,
the Trustee shall cause the aggregate principal amount of the applicable Global
Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the
Company shall execute and the Trustee shall authenticate and make available for
delivery to the Person designated in the instructions a Definitive Note in the
appropriate principal amount. Any Definitive Note issued in exchange for a
beneficial interest in a Restricted Global Note pursuant to this Section 2.06(c)
shall be registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall instruct the
Registrar through instructions from the Depositary and the Participant or
Indirect Participant. The Trustee shall make available for delivery such
Definitive Notes to the Persons in whose names such Notes are so registered. Any
Definitive Note issued in exchange for a beneficial interest in a Restricted
Global Note pursuant to this Section 2.06(c)(i) shall bear the Private Placement
Legend and shall be subject to all restrictions on transfer contained therein.
(ii) Notwithstanding Sections 2.06(c)(i)(A) and (C) hereof, a
beneficial interest in the Regulation S Temporary Global Note may not
be (A) exchanged for a Definitive Note prior to (x) the expiration of
the Restricted Period and (y) the receipt by the Registrar of any
certificates required pursuant to Rule 903(c)(3)(B) under the
Securities Act or (B) transferred to a Person who takes delivery
thereof in the form of a Definitive Note prior to the conditions set
forth in clause (A) above or unless the transfer is pursuant to an
exemption from the registration requirements of the Securities Act
other than Rule 903 or Rule 904.
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(iii) Notwithstanding 2.06(c)(i) hereof, a holder of a
beneficial interest in a Restricted Global Note may exchange such
beneficial interest for an Unrestricted Definitive Note or may transfer
such beneficial interest to a Person who takes delivery thereof in the
form of an Unrestricted Definitive Note only if:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration Rights
Agreement and the holder of such beneficial interest, in the
case of an exchange, or the transferee, in the case of a
transfer, is not (1) a broker-dealer, (2) a Person
participating in the distribution of the Exchange Notes or (3)
a Person who is an affiliate (as defined in Rule 144) of the
Company;
(B) any such transfer is effected pursuant to the
Shelf Registration Statement in accordance with the
Registration Rights Agreement;
(C) any such transfer is effected by a Participating
Broker-Dealer pursuant to the Exchange Offer Registration
Statement in accordance with the Registration Rights
Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial
interest in a Restricted Global Note proposes to exchange such
beneficial interest for a Definitive Note that does not bear
the Private Placement Legend, a certificate from such holder
in the form of Exhibit C hereto, including the certifications
in Item (1)(b) thereof;
(2) if the holder of such beneficial
interest in a Restricted Global Note proposes to transfer such
beneficial interest to a Person who shall take delivery
thereof in the form of a Definitive Note that does not bear
the Private Placement Legend, a certificate from such holder
in the form of Exhibit B hereto, including the certifications
in Item (4) thereof; and
(3) in each such case set forth in this
subparagraph (D), an Opinion of Counsel in form reasonably
acceptable to the Company, to the effect that such exchange or
transfer is in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the Private
Placement Legend are not required in order to maintain
compliance with the Securities Act.
(iv) If any holder of a beneficial interest in an Unrestricted
Global Note proposes to exchange such beneficial interest for a
Definitive Note or to transfer such beneficial interest to a Person who
takes delivery thereof in the form of a Definitive Note, then, upon
satisfaction of the conditions set forth in Section 2.06(b)(ii) hereof,
the Trustee shall cause the aggregate principal amount of the
applicable Global Note to be reduced accordingly pursuant to Section
2.06(h) hereof, and the Company shall execute and the
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<PAGE> 36
Trustee shall authenticate and make available for delivery to the Person
designated in the instructions a Definitive Note in the appropriate principal
amount. Any Definitive Note issued in exchange for a beneficial interest
pursuant to this Section 2.06(c)(iv) shall be registered in such name or names
and in such authorized denomination or denominations as the holder of such
beneficial interest shall instruct the Registrar through instructions from the
Depositary and the Participant or Indirect Participant. The Trustee shall make
available for delivery such Definitive Notes to the Persons in whose names such
Notes are so registered. Any Definitive Note issued in exchange for a beneficial
interest pursuant to this Section 2.06(c)(iv) shall not bear the Private
Placement Legend. A beneficial interest in an Unrestricted Global Note cannot be
exchanged for a Definitive Note bearing the Private Placement Legend or
transferred to a Person who takes delivery thereof in the form of a Definitive
Note bearing the Private Placement Legend.
(d) Transfer and Exchange of Definitive Notes for Beneficial Interests.
(i) If any Holder of a Restricted Definitive Note proposes to
exchange such Note for a beneficial interest in a Restricted Global Note or to
transfer such Definitive Notes to a Person who takes delivery thereof in the
form of a beneficial interest in a Restricted Global Note, then, upon receipt by
the Registrar of the following documentation:
(A) if the Holder of such Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a
Restricted Global Note, a certificate from such Holder in the form of
Exhibit C hereto, including the certifications in Item (2)(b) thereof;
(B) if such Definitive Note is being transferred to a
QIB in accordance with Rule 144A under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in Item (1) thereof;
(C) if such Definitive Note is being transferred to a
Non-U.S. Person in an offshore transaction in accordance with Rule 903
or Rule 904 under the Securities Act, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in Item (2)
thereof;
(D) if such Definitive Note is being transferred
pursuant to an exemption from the registration requirements of the
Securities Act in accordance with Rule 144 under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in Item (3)(a) thereof;
(E) if such Definitive Note is being transferred to
the Company or any of its subsidiaries, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in Item (3)(b)
thereof; or
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(F) if such Definitive Note is being transferred
pursuant to an effective registration statement under the Securities
Act, a certificate to the effect set forth in Exhibit B hereto,
including the certifications in Item (3)(c) thereof,
the Trustee shall cancel the Definitive Note, increase or cause to be increased
the aggregate principal amount of, in the case of subparagraph (A) above, the
appropriate Restricted Global Note and, in the case of subparagraph (B) above,
the 144A Global Note, and, in the case of subparagraph (C) above, the Regulation
S Global Note.
(ii) A Holder of a Restricted Definitive Note may exchange
such Note for a beneficial interest in an Unrestricted Global Note or transfer
such Restricted Definitive Note to a Person who takes delivery thereof in the
form of a beneficial interest in an Unrestricted Global Note only if:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration Rights Agreement
and the Holder, in the case of an exchange, or the transferee, in the
case of a transfer, is not (1) a broker-dealer, (2) a Person
participating in the distribution of the Exchange Notes or (3) a Person
who is an affiliate (as defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the
Shelf Registration Statement in accordance with the Registration Rights
Agreement;
(C) any such transfer is effected by a Participating
Broker-Dealer pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Definitive Notes
proposes to exchange such Notes for a beneficial interest in
the Unrestricted Global Note, a certificate from such Holder
in the form of Exhibit C hereto, including the certifications
in Item (1)(c) thereof;
(2) if the Holder of such Definitive Notes
proposes to transfer such Notes to a Person who shall take
delivery thereof in the form of a beneficial interest in the
Unrestricted Global Note, a certificate from such Holder in
the form of Exhibit B hereto, including the certifications in
Item (4) thereof; and
(3) in each such case set forth in this
subparagraph (D), an Opinion of Counsel in form reasonably
acceptable to the Company to the effect that such exchange or
transfer is in compliance with the Securities Act, that the
restrictions on transfer contained herein and in the Private
Placement Legend are not required in order to maintain
compliance with the Securities Act, and such Definitive
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Notes are being exchanged or transferred in compliance with
any applicable blue sky securities laws of any State of the
United States.
Upon satisfaction of the conditions of any of the subparagraphs in this Section
2.06(d)(ii), the Trustee shall cancel the Definitive Notes and increase or cause
to be increased the aggregate principal amount of the Unrestricted Global Note.
(iii) A Holder of an Unrestricted Definitive Note may exchange
such Note for a beneficial interest in an Unrestricted Global Note or
transfer such Definitive Notes to a Person who takes delivery thereof
in the form of a beneficial interest in an Unrestricted Global Note at
any time. Upon receipt of a request for such an exchange or transfer,
the Trustee shall cancel the applicable Unrestricted Definitive Note
and increase or cause to be increased the aggregate principal amount of
one of the Unrestricted Global Notes.
(iv) If any such exchange or transfer from a Definitive Note
to a beneficial interest is effected pursuant to subparagraphs (ii)(B),
(ii)(D) or (iii) above at a time when an Unrestricted Global Note has
not yet been issued, the Company shall issue and, upon receipt of an
authentication order in accordance with Section 2.02 hereof, the
Trustee shall authenticate one or more Unrestricted Global Notes in an
aggregate principal amount equal to the principal amount of beneficial
interests transferred pursuant to subparagraphs (ii)(B), (ii)(D) or
(iii) above.
(e) Transfer and Exchange of Definitive Notes for Definitive Notes.
Upon request by a Holder of Definitive Notes and such Holder's compliance with
the provisions of this Section 2.06(e), the Registrar shall register the
transfer or exchange of Definitive Notes. Prior to such registration of transfer
or exchange, the requesting Holder shall present or surrender to the Registrar
the Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by his attorney, duly authorized in writing. In addition, the requesting Holder
shall provide any additional certifications, documents and information, as
applicable, pursuant to the provisions of this Section 2.06(e).
(i) Restricted Definitive Notes may be transferred to and
registered in the name of Persons who take delivery thereof if the
Registrar receives the following:
(A) if the transfer will be made pursuant to Rule
144A under the Securities Act, then the transferor must
deliver a certificate in the form of Exhibit B hereto,
including the certifications in Item (1) thereof;
(B) if the transfer will be made pursuant to Rule 903
or Rule 904 of the Securities Act, then the transferor must
deliver a certificate in the form of Exhibit B hereto,
including the certifications in Item (2) thereof; and
(C) if the transfer will be made pursuant to any
other exemption from the registration requirements of the
Securities Act, then the transferor must
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deliver a certificate in the form of Exhibit B hereto,
including the certifications, certificates and Opinion of
Counsel required by Item (3) thereof, if applicable.
(ii) Any Restricted Definitive Note may be exchanged
by the Holder thereof for an Unrestricted Definitive Note or
transferred to a Person or Persons who take delivery thereof in the
form of an Unrestricted Definitive Note if:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration Rights
Agreement and the Holder, in the case of an exchange, or the
transferee, in the case of a transfer, is not (1) a
broker-dealer, (2) a Person participating in the distribution
of the Exchange Notes or (3) a Person who is an affiliate (as
defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the
Shelf Registration Statement in accordance with the
Registration Rights Agreement;
(C) any such transfer is effected by a Participating
Broker-Dealer pursuant to the Exchange Offer Registration
Statement in accordance with the Registration Rights
Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Restricted
Definitive Notes proposes to exchange such Notes for an
Unrestricted Definitive Note, a certificate from such Holder
in the form of Exhibit C hereto, including the certifications
in Item (1)(b) thereof;
(2) if the Holder of such Restricted
Definitive Notes proposes to transfer such Notes to a Person
who shall take delivery thereof in the form of an Unrestricted
Definitive Note, a certificate from such Holder in the form of
Exhibit B hereto, including the certifications in Item (4)
thereof; and
(3) in each such case set forth in this
subparagraph (D), an Opinion of Counsel in form reasonably
acceptable to the Company to the effect that such exchange or
transfer is in compliance with the Securities Act, that the
restrictions on transfer contained herein and in the Private
Placement Legend are not required in order to maintain
compliance with the Securities Act, and such Restricted
Definitive Note is being exchanged or transferred in
compliance with any applicable blue sky securities laws of any
State of the United States.
(iii) A Holder of Unrestricted Definitive Notes may
transfer such Notes to a Person who takes delivery thereof in the form
of an Unrestricted Definitive Note. Upon receipt of a request for such
a transfer, the Registrar shall register the Unrestricted Definitive
Notes pursuant to the instructions from the Holder thereof.
Unrestricted Definitive Notes
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<PAGE> 40
cannot be exchanged for or transferred to Persons who take delivery
thereof in the form of a Restricted Definitive Note.
(f) Exchange Offer. Upon the occurrence of the Exchange Offer in
accordance with the Registration Rights Agreement, the Company shall issue and,
upon receipt of (A) an authentication order in accordance with Section 2.02
hereof and (B) an Opinion of Counsel opining as to the enforceability of the
Exchange Notes and the guarantees thereof, the Trustee shall authenticate (i)
one or more Unrestricted Global Notes in an aggregate principal amount equal to
the principal amount of the beneficial interests in the Restricted Global Notes
tendered for acceptance by persons that are not (x) broker-dealers, (y) Persons
participating in the distribution of the Exchange Notes or (z) Persons who are
affiliates (as defined in Rule 144) of the Company and accepted for exchange in
the Exchange Offer and (ii) Definitive Notes in an aggregate principal amount
equal to the principal amount of the Restricted Definitive Notes accepted for
exchange in the Exchange Offer. Concurrent with the issuance of such Notes, the
Trustee shall cause the aggregate principal amount of the applicable Restricted
Global Notes to be reduced accordingly, and the Company shall execute and the
Trustee shall authenticate and make available for delivery to the Persons
designated by the Holders of Definitive Notes so accepted Definitive Notes in
the appropriate principal amount.
(g) Legends. The following legends shall appear on the face of all
Global Notes and Definitive Notes issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this Indenture.
(i) Private Placement Legend.
(A) Except as permitted by subparagraph (B) below,
each Global Note and each Definitive Note (and all Notes
issued in exchange therefor or substitution thereof) shall
bear the legend in substantially the following form:
"THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY
NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES
OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS PERMITTED BY
REGULATION S UNDER THE SECURITIES ACT. BY ITS ACQUISITION HEREOF OR OF A
BENEFICIAL INTEREST HEREIN, THE HOLDER (1) REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) (A "QIB"), (B) IT IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT OR (C) IT IS A PERSON
ELIGIBLE TO BE TRANSFERRED THE NOTE IN ACCORDANCE WITH CLAUSE (2)(D) OF THIS
LEGEND, (2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS NOTE
EXCEPT (A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) TO A PERSON WHOM THE
SELLER REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QIB IN A TRANSACTION MEETING THE
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<PAGE> 41
REQUIREMENTS OF RULE 144A, (C) IN AN OFFSHORE TRANSACTION MEETING THE
REQUIREMENTS OF RULE 903 OR 904 OF THE SECURITIES ACT, (D) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (E) IN ACCORDANCE
WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
(AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY) OR (F) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO
WHOM THIS NOTE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND
"UNITED STATES" HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S
UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE
TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE
FOREGOING."
(B) Notwithstanding the foregoing, any Global Note or
Definitive Note issued pursuant to subparagraph (b)(iv),
(c)(ii), (c)(iii), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f)
of this Section 2.06 (and all Notes issued in exchange
therefor or substitution thereof) shall not bear the Private
Placement Legend.
(ii) Global Note Legend. Each Global Note shall bear a legend
in substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO ARTICLE 2 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED
IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III)
THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO
SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A
SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY."
(iii) Regulation S Temporary Global Note Legend. The
Regulation S Temporary Global Note shall bear a legend in substantially
the following form:
"THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE AS
SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE
BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED
TO RECEIVE PAYMENT OF INTEREST HEREON."
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<PAGE> 42
(h) Cancellation and/or Adjustment of Global Notes. At such time as all
beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
canceled in whole and not in part, each such Global Note shall be returned to or
retained and canceled by the Trustee in accordance with Section 2.11 hereof. At
any time prior to such cancellation, if any beneficial interest in a Global Note
is exchanged for or transferred to a Person who will take delivery thereof in
the form of a beneficial interest in another Global Note or for Definitive
Notes, the principal amount of Notes represented by such Global Note shall be
reduced accordingly and an endorsement shall be made on such Global Note, by the
Trustee, the Note Custodian or the Depositary at the direction of the Trustee,
to reflect such reduction; and if the beneficial interest is being exchanged for
or transferred to a Person who will take delivery thereof in the form of a
beneficial interest in another Global Note, such other Global Note shall be
increased accordingly and an endorsement shall be made on such Global Note, by
the Trustee, the Note Custodian or by the Depositary at the direction of the
Trustee, to reflect such increase.
(i) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate Global Notes
and Definitive Notes upon the Company's order or at the Registrar's
request.
(ii) No service charge shall be made to a holder of a
beneficial interest in a Global Note or to a Holder of a Definitive
Note for any registration of transfer or exchange, 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
any such transfer taxes or similar governmental charge payable upon
exchange or transfer pursuant to Sections 2.10, 3.06, 4.10, 4.15 and
9.05 hereof).
(iii) The Registrar shall not be required to register the
transfer or exchange of any Note selected for redemption in whole or in
part, except the unredeemed portion of any Note being redeemed in part.
(iv) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive
Notes shall be the valid obligations of the Company, evidencing the
same debt, and entitled to the same benefits under this Indenture, as
the Global Notes or Definitive Notes surrendered upon such registration
of transfer or exchange.
(v) The Company shall not be required (A) to issue, to
register the transfer of or to exchange Notes during a period beginning
at the opening of business 15 days before the day of any selection of
Notes for redemption under Section 3.02 hereof and ending at the close
of business on the day of selection, (B) to register the transfer of or
to exchange any Note so selected for redemption in whole or in part,
except the unredeemed portion of any
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<PAGE> 43
Note being redeemed in part or (C) to register the transfer of or to
exchange a Note between a record date and the next succeeding Interest
Payment Date.
(vi) Prior to due presentment for the registration of
a transfer of any Note, the Trustee, any Agent and the Company may deem
and treat the Person in whose name any Note is registered as the
absolute owner of such Note for the purpose of receiving payment of
principal of and interest on such Notes and for all other purposes, and
none of the Trustee, any Agent or the Company shall be affected by
notice to the contrary.
(vii) The Trustee shall authenticate Global Notes and
Definitive Notes in accordance with the provisions of Section 2.02
hereof.
(viii) All certifications, certificates and Opinions
of Counsel required to be submitted to the Registrar pursuant to this
Section 2.06 to effect a transfer or exchange may be submitted by
facsimile.
SECTION 2.07 Replacement Notes.
If any mutilated Note is surrendered to the Trustee or the Company and
the Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Note, the Company shall issue and the Trustee, upon the written
order of the Company signed by two Officers of the Company, shall authenticate a
replacement Note if the Trustee's requirements are met. If required by the
Trustee or the Company, an indemnity bond must be supplied by the Holder that is
sufficient in the judgment of the Trustee and the Company to protect the
Company, the Trustee, any Agent and any authenticating agent from any loss that
any of them may suffer if a Note is replaced. The Company may charge for its
expenses in replacing a Note.
Every replacement Note is an additional obligation of the Company and
shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
SECTION 2.08 Outstanding Notes.
The Notes outstanding at any time are all the Notes authenticated by
the Trustee except for those canceled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by the
Trustee in accordance with the provisions hereof, and those described in this
Section as not outstanding. Except as set forth in Section 2.09 hereof, a Note
does not cease to be outstanding because the Company or an Affiliate of the
Company holds the Note.
If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under Section
4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.
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If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay Notes payable on that date, then on and after that date such
Notes shall be deemed to be no longer outstanding and shall cease to accrue
interest.
SECTION 2.09 Treasury Notes.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Company, or by any Person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Company, shall be considered as
though not outstanding, except that for the purposes of determining whether the
Trustee shall be protected in relying on any such direction, waiver or consent,
only Notes that a Responsible Officer of the Trustee actually knows are so owned
shall be so disregarded.
SECTION 2.10 Temporary Notes.
Until Definitive Notes are ready for delivery, the Company may prepare
and the Trustee shall authenticate temporary Notes upon a written order of the
Company signed by two Officers of the Company. Temporary Notes shall be
substantially in the form of Definitive Notes but may have variations that the
Company considers appropriate for temporary Notes and as shall be reasonably
acceptable to the Trustee. Without unreasonable delay, the Company shall prepare
and the Trustee shall authenticate Definitive Notes in exchange for temporary
Notes.
Holders of temporary Notes shall be entitled to all of the benefits of
this Indenture.
SECTION 2.11 Cancellation.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall return such
canceled Notes to the Company. The Company may not issue new Notes to replace
Notes that it has paid or that have been delivered to the Trustee for
cancellation.
SECTION 2.12 Defaulted Interest.
If the Company defaults in a payment of interest on the Notes, it shall
pay the defaulted interest in any lawful manner plus, to the extent lawful,
interest payable on the defaulted interest, to the Persons who are Holders on a
subsequent special record date, in each case at the rate provided in the Notes
and in Section 4.01 hereof. The Company shall promptly notify the Trustee in
writing of the amount of defaulted interest proposed to be paid on each Note and
the date of the proposed payment. The Company shall fix or cause to be fixed
each such special record date and payment date, provided that no such special
record date shall be less than 10 days prior to the related payment
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<PAGE> 45
date for such defaulted interest. At least 15 days before the special record
date, the Company (or, upon the written request of the Company, the Trustee in
the name and at the expense of the Company) shall mail or cause to be mailed to
Holders a notice that states the special record date, the related payment date
and the amount of such interest to be paid.
SECTION 2.13 CUSIP Numbers.
The Company in issuing the Notes may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Holders; provided that any such notice may
state that no representation is made as to the correctness of such numbers
either as printed on the Notes or as contained in any notice of a redemption and
that reliance may be placed only on the other identification numbers printed on
the Notes, and any such redemption shall not be affected by any defect in or
omission of such numbers. The Company will promptly notify the Trustee of any
change in the "CUSIP" numbers.
ARTICLE III
REDEMPTION AND PREPAYMENT
SECTION 3.01 Notices to Trustee.
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, it shall furnish to the Trustee,
at least 30 days but not more than 60 days before a redemption date, an
Officers' Certificate setting forth (i) the clause of this Indenture pursuant to
which the redemption shall occur, (ii) the redemption date, (iii) the principal
amount of Notes to be redeemed and (iv) the redemption price.
SECTION 3.02 Selection of Notes to be Redeemed.
If less than all of the Notes are to be redeemed at any time, selection
of Notes for redemption shall be made by the Trustee in compliance with the
requirements of the principal national securities exchange, if any, on which the
Notes are listed or, if the Notes are not so listed, on a pro rata basis, by lot
or in accordance with any other method the Trustee considers fair and
appropriate; provided that no Notes of $1,000 or less shall be redeemed in part.
In the event of partial redemption by lot, the particular Notes to be redeemed
shall be selected, unless otherwise provided herein, not less than 30 nor more
than 60 days prior to the redemption date by the Trustee from the outstanding
Notes not previously called for redemption.
The Trustee shall promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions of
Notes selected shall be in amounts of $1,000 or whole multiples of $1,000.
Except as provided in the preceding sentence, provisions of this Indenture that
apply to Notes called for redemption also apply to portions of Notes called for
redemption.
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<PAGE> 46
SECTION 3.03 Notice of Redemption.
Subject to the provisions of Section 3.09 hereof, at least 30 days but
not more than 60 days before a redemption date, the Company shall mail or cause
to be mailed, by first class mail, a notice of redemption to each Holder whose
Notes are to be redeemed at its registered address.
The notice shall identify the Notes (including CUSIP numbers) to be
redeemed and shall state:
(a) the redemption date;
(b) the redemption price;
(c) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the redemption date
upon surrender of such Note, a new Note or Notes in principal amount equal to
the unredeemed portion shall be issued upon cancellation of the original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to
the Paying Agent to collect the redemption price;
(f) that, unless the Company defaults in making such
redemption payment, interest on Notes called for redemption ceases to accrue on
and after the redemption date;
(g) the paragraph of the Notes and/or Section of this
Indenture pursuant to which the Notes called for redemption are being redeemed;
and
(h) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed on the
Notes.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company shall have delivered to the Trustee, at least 30 days prior to the
redemption date, an Officers' Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in such notice as provided
in the preceding paragraph.
SECTION 3.04 Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.03
hereof, Notes called for redemption become irrevocably due and payable on the
redemption date at the redemption price. A notice of redemption may not be
conditional.
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SECTION 3.05 Deposit of Redemption Price.
No later than 10:00 a.m. New York City Time on the redemption date, the
Company shall deposit with the Trustee or with the Paying Agent money sufficient
to pay the redemption price of and accrued interest and Liquidated Damages, if
any, on all Notes to be redeemed on that date. The Trustee or the Paying Agent
shall promptly return to the Company any money deposited with the Trustee or the
Paying Agent by the Company in excess of the amounts necessary to pay the
redemption price of, and accrued interest and Liquidated Damages, if any, on,
all Notes to be redeemed.
If the Company complies with the provisions of the preceding paragraph,
on and after the redemption date, interest shall cease to accrue on the Notes or
the portions of Notes called for redemption. If a Note is redeemed on or after
an interest record date but on or prior to the related interest payment date,
then any accrued and unpaid interest and Liquidated Damages, if any, shall be
paid to the Person in whose name such Note was registered at the close of
business on such record date. If any Note called for redemption shall not be so
paid upon surrender for redemption because of the failure of the Company to
comply with the preceding paragraph, interest shall be paid on the unpaid
principal, from the redemption date until such principal is paid, and to the
extent lawful on any interest not paid on such unpaid principal, in each case at
the rate provided in the Notes and in Section 4.01 hereof.
SECTION 3.06 Notes Redeemed in Part.
Upon surrender of a Note that is redeemed in part, the Company shall
issue and, upon the Company's written request, the Trustee shall authenticate
for the Holder at the expense of the Company a new Note equal in principal
amount to the unredeemed portion of the Note surrendered.
SECTION 3.07 Optional Redemption.
(a) Except as set forth in clause (b) of this Section 3.07,
the Notes shall not be redeemable at the Company's option prior to June 1, 2003.
Thereafter, the Notes will be subject to redemption at any time at the option of
the Company in whole or in part, upon not less than 30 nor more than 60 days'
notice, at the redemption prices (expressed as percentages of principal amount)
set forth below plus accrued and unpaid interest and Liquidated Damages, if any,
thereon, if any, to the applicable redemption date, if redeemed during the
twelve-month period beginning on June 1 of the years indicated below:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
<S> <C>
2003 ...................................... 104.375%
2004 ...................................... 102.917%
2005 ...................................... 101.458%
2006 and thereafter ....................... 100.000%
</TABLE>
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(b) Notwithstanding the foregoing, at any time before June 1,
2001, the Company may on any one or more occasions redeem up to an aggregate of
35% of the principal amount of Notes outstanding at a redemption price of
108.75% of the principal amount thereof, plus accrued and unpaid interest, if
any, and Liquidated Damages, if any, thereon, to the redemption date, with the
net cash proceeds of any Public Equity Offering; provided that at least 65% of
the aggregate principal amount of Notes outstanding on the Issue Date remain
outstanding immediately after each occurrence of such redemption; and provided,
further, that each such redemption shall occur within 60 days of the date of the
closing of such Public Equity Offering.
(c) Any redemption pursuant to this Section 3.07 shall be made
pursuant to the provisions of Sections 3.01 through 3.06 hereof.
SECTION 3.08 Mandatory Redemption.
Except as set forth under Sections 3.09, 4.10 and 4.15 hereof, the
Company shall not be required to make mandatory redemption or sinking fund
payments with respect to the Notes.
SECTION 3.09 Offer to Purchase by Application of Excess Proceeds.
In the event that, pursuant to Section 4.10 hereof, the Company shall
be required to commence an offer to all Holders to purchase Notes (an "Asset
Sale Offer"), it shall follow the procedures specified below.
The Asset Sale Offer shall remain open for a period of 20 Business Days
following its commencement and no longer, except to the extent that a longer
period is required by applicable law (the "Offer Period"). No later than five
Business Days after the termination of the Offer Period (the "Purchase Date"),
the Company shall purchase the principal amount of Notes required to be
purchased pursuant to Section 4.10 hereof (the "Offer Amount") or, if less than
the Offer Amount has been tendered, all Notes tendered in response to the Asset
Sale Offer. Payment for any Notes so purchased shall be made in the same manner
as interest payments are made.
If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued and unpaid interest and
Liquidated Damages, if any, shall be paid to the Person in whose name a Note is
registered at the close of business on such record date, and no additional
interest or Liquidated Damages shall be payable to Holders who tender Notes
pursuant to the Asset Sale Offer.
Upon the commencement of an Asset Sale Offer, the Company shall send,
by first class mail, a notice to the Trustee and each of the Holders, with a
copy to the Trustee. The notice shall contain all instructions and materials
necessary to enable such Holders to tender Notes pursuant to the Asset Sale
Offer. The Asset Sale Offer shall be made to all Holders. The notice, which
shall govern the terms of the Asset Sale Offer, shall state:
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<PAGE> 49
(a) that the Asset Sale Offer is being made pursuant to this
Section 3.09 and Section 4.10 hereof and the length of time the Asset Sale Offer
shall remain open;
(b) the Offer Amount, the purchase price and the Purchase
Date;
(c) that any Note not tendered or accepted for payment shall
continue to accrete or accrue interest;
(d) that, unless the Company defaults in making such payment,
any Note accepted for payment pursuant to the Asset Sale Offer shall cease to
accrete or accrue interest after the Purchase Date;
(e) that Holders electing to have a Note purchased pursuant to
an Asset Sale Offer may only elect to have all of such Note purchased and may
not elect to have only a portion of such Note purchased;
(f) that Holders electing to have a Note purchased pursuant to
any Asset Sale Offer shall be required to surrender the Note, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of the Note
completed, or transfer by book-entry transfer, to the Company, a depositary, if
appointed by the Company, or a Paying Agent at the address specified in the
notice at least three days before the Purchase Date;
(g) that Holders shall be entitled to withdraw their election
if the Company, the depositary or the Paying Agent, as the case may be,
receives, not later than the expiration of the Offer Period, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of the Note the Holder delivered for purchase and a statement
that such Holder is withdrawing his election to have such Note purchased;
(h) that, if the aggregate principal amount of Notes
surrendered by Holders and holders of any other Indebtedness (including the
Seller Note) entitled to participate in such Asset Sale Offer, if any, exceeds
the Offer Amount, the Company shall select the Notes to be purchased on a pro
rata basis (with such adjustments as may be deemed appropriate by the Company so
that only Notes in denominations of $1,000, or integral multiples thereof, shall
be purchased); and
(i) that Holders whose Notes were purchased only in part shall
be issued new Notes equal in principal amount to the unpurchased portion of the
Notes surrendered (or transferred by book-entry transfer).
On or before the Purchase Date, the Company shall, to the extent
lawful, accept for payment, on a pro rata basis to, the extent necessary, the
Offer Amount of Notes or portions thereof tendered pursuant to the Asset Sale
Offer, or if less than the Offer Amount has been tendered, all Notes tendered,
and shall deliver to the Trustee an Officers' Certificate stating that such
Notes or portions thereof were accepted for payment by the Company in accordance
with the terms of this Section 3.09. The Company, the Depositary or the Paying
Agent, as the case may be, shall promptly (but in
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<PAGE> 50
any case not later than five days after the Purchase Date) mail or deliver to
each tendering Holder an amount equal to the purchase price of the Notes
tendered by such Holder and accepted by the Company for purchase, and the
Company shall promptly issue a new Note, and the Trustee, upon written request
from the Company shall authenticate and make available for delivery such new
Note to such Holder, in a principal amount equal to any unpurchased portion of
the Note surrendered. Any Note not so accepted shall be promptly mailed or
delivered by the Company to the Holder thereof. The Company shall publicly
announce the results of the Asset Sale Offer on the Purchase Date.
Other than as specifically provided in this Section 3.09, any purchase
pursuant to this Section 3.09 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 hereof.
ARTICLE IV
COVENANTS
SECTION 4.01 Payment of Notes.
The Company shall pay or cause to be paid the principal of, premium, if
any, and interest and Liquidated Damages, if any, on the Notes on the dates and
in the manner provided in the Notes. Principal, interest and Liquidated Damages,
if any, shall be considered paid on the date due if the Paying Agent, if other
than the Company or a Subsidiary thereof, holds as of 10:00 a.m. New York City
Time on the due date money deposited by the Company in immediately available
funds and designated for and sufficient to pay all principal and interest then
due. The Company shall pay all Liquidated Damages, if any, in the same manner on
the dates and in the amounts set forth in the Registration Rights Agreement.
The Company shall pay interest (including post-petition interest in any
proceeding under the Bankruptcy Code) on overdue principal at the rate borne on
the Notes to the extent lawful; it shall pay interest (including post-petition
interest in any proceeding under the Bankruptcy Code) on overdue installments of
interest and Liquidated Damages (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 shall maintain in the Borough of Manhattan, the City of New
York, an office or agency (which may be an office of the Trustee or an affiliate
of the Trustee, Registrar or co-registrar) where Notes may be surrendered for
registration of transfer or for exchange and where notices and demands to or
upon the Company in respect of the Notes and this Indenture may be served. The
Company shall 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.
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The Company may also from time to time designate one or more other
offices or agencies where the Notes 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 the Borough of
Manhattan, the City of New York for such purposes. The Company shall 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.
The Company hereby designates the office of the Trustee at 61 Broadway,
15th Floor, New York, New York, 10006, as one such office or agency of the
Company in accordance with Section 2.03 hereof.
SECTION 4.03 Reports.
(a) Whether or not required by the rules and regulations of
the SEC, so long as any Notes are outstanding, the Company shall furnish to each
of the Holders of Notes within the time periods specified in the SEC's rules and
regulations, beginning with annual financial information for the year ended
December 31, 1998, (i) all quarterly and annual financial information that would
be required to be contained in a filing with the SEC on Forms 10-Q and 10-K if
the Company were required to file such financial information, including a
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" that describes the financial condition and results of operations of
the Company and any consolidated Subsidiaries and, with respect to the annual
information only, reports thereon by the Company's independent public
accountants (which shall be firm(s) of established national reputation) and (ii)
all information that would be required to be filed with the SEC on Form 8-K if
the Company were required to file such reports. All such information and reports
shall be delivered to the Holders of Notes on or prior to the dates on which
such filings would have been required to be made had the Company been subject to
the rules and regulations of the SEC. All such information and reports shall be
filed with the SEC on or prior to the dates on which such filings would have
been required to be made had the Company been subject to the rules and
regulations of the SEC. In addition, whether or not required by the rules and
regulations of the SEC, the Company shall file a copy of all such information
and reports with the SEC for public availability within the time periods
specified in the SEC's rules and regulations (unless the SEC will not accept
such a filing) and make such information available to securities analysts and
prospective investors upon request. The Company shall at all times comply with
TIA Section 314(a).
(b) For so long as any Notes remain outstanding, the Company
shall furnish to the Holders and to securities analysts and prospective
investors, upon their request, the information required to be delivered pursuant
to Rule 144A(d)(4) under the Securities Act.
(c) Delivery of such reports, information and documents to the
Trustee is for informational purposes only and the Trustee's receipt of such
shall not constitute constructive notice of any information contained therein or
determinable from information contained therein, including
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the Company's compliance with any of its covenants hereunder (as to which the
Trustee is entitled to rely exclusively on Officers' Certificates).
SECTION 4.04 Compliance Certificate.
(a) The Company shall deliver to the Trustee, within 90 days
after the end of each fiscal year, an Officers' Certificate stating that a
review of the activities of the Company and its Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Company has kept, observed,
performed and fulfilled its obligations under this Indenture, and further
stating, as to each such Officer signing such certificate, that to the best of
his or her 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 of this
Indenture (or, if a Default or Event of Default shall have occurred, describing
all such Defaults or Events of Default of which he or she may have knowledge and
what action the Company is taking or proposes to take with respect thereto) and
that to the best of his or her knowledge no event has occurred and remains in
existence by reason of which payments on account of the principal of or
interest, if any, on the Notes is prohibited or if such event has occurred, a
description of the event and what action the Company is taking or proposes to
take with respect thereto.
(b) So long as not contrary to the then current
recommendations of the American Institute of Certified Public Accountants, the
year-end financial statements delivered pursuant to Section 4.03(a) above shall
be accompanied by a written statement of the Company's independent public
accountants (who shall be a firm of established national reputation) that in
making the examination necessary for certification of such financial statements,
nothing has come to their attention that would lead them to believe that the
Company has violated any provisions of Article 4 or Article 5 hereof or, if any
such violation has occurred, specifying the nature and period of existence
thereof, it being understood that such accountants shall not be liable directly
or indirectly to any Person for any future knowledge of any such violation.
(c) The Company shall, so long as any of the Notes are
outstanding, deliver to the Trustee, forthwith upon any Officer becoming aware
of any Default or Event of Default, 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 Taxes.
The Company shall pay, and shall cause each of its Subsidiaries to pay,
prior to delinquency, all material taxes, charges, assessments, and governmental
levies except such as are contested in good faith and by appropriate proceedings
or where the failure to effect such payment is not adverse in any material
respect to the Holders of the Notes.
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SECTION 4.06 Waiver of Stay, Extension and Usury Laws.
Each of the Company and the Subsidiaries covenants (to the extent that
it may lawfully do so) that it shall not at any time insist upon, plead, or in
any manner whatsoever claim or take the benefit or advantage of, any stay,
extension or usury law wherever enacted, now or at any time hereafter in force,
that may affect the covenants or the performance of this Indenture; and each of
the Company and the Subsidiaries (to the extent that it may lawfully do so)
hereby expressly waives all benefit or advantage of any such law, and covenants
that it shall not, by resort to any such law, hinder, delay or impede the
execution of any power herein granted to the Trustee, but shall suffer and
permit the execution of every such power as though no such law had been enacted.
SECTION 4.07 Restricted Payments.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly: (i) declare or pay any dividend or make
any other payment or distribution on account of the Company's or any of its
Restricted Subsidiaries' Equity Interests (including, without limitation, any
payment in connection with any merger or consolidation involving the Company) or
to the direct or indirect holders of the Company's or any of its Restricted
Subsidiaries' Equity Interests in their capacity as such (other than dividends
or distributions payable in Equity Interests (other than Disqualified Stock) of
the Company); (ii) purchase, redeem or otherwise acquire or retire for value
(including without limitation, in connection with any merger or consolidation
involving the Company) any Equity Interests of the Company (other than any such
Equity Interests owned by a Wholly Owned Restricted Subsidiary of the Company);
(iii) make any payment on or with respect to, or purchase, redeem, defease or
otherwise acquire or retire for value any Indebtedness that is subordinated to
the Notes, except a payment of interest or principal at Stated Maturity; or (iv)
make any Restricted Investment (all such payments and other actions set forth in
clauses (i) through (iv) above being collectively referred to as "Restricted
Payments"), unless, at the time of and after giving effect to such Restricted
Payment:
(a) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof;
(b) the Company would, at the time of such Restricted Payment
and after giving pro forma effect thereto as if such Restricted Payment had been
made at the beginning of the applicable four-quarter period, have been permitted
to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge
Coverage Ratio test set forth in the first paragraph of Section 4.09 hereof; and
(c) such Restricted Payment, together with the aggregate
amount of all other Restricted Payments made by the Company or any of its
Restricted Subsidiaries after the Issue Date (excluding Restricted Payments
permitted by clauses (ii), (iii), (iv), (v), (vi) or (vii) of the next
succeeding paragraph), is less than the sum of (i) 50% of the Consolidated Net
Income of the Company for the period (taken as one accounting period) from the
beginning of the first fiscal quarter immediately following the Issue Date to
the end of the Company's most recently ended fiscal
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quarter for which internal financial statements are available at the time of
such Restricted Payment (or, if such Consolidated Net Income for such period is
a deficit, less 100% of such deficit), plus (ii) 100% of the aggregate net
proceeds received by the Company (including the fair market value of non-cash
proceeds as determined in good faith by the Board of Directors of the Company
less issuance costs) from the issue or sale, in either case, since the Issue
Date of (A) Equity Interests of the Company (other than Disqualified Stock), or
(B) Disqualified Stock or debt securities of the Company that have been
converted into such Equity Interests (other than Equity Interests (or
Disqualified Stock or convertible or exchangeable debt securities) sold to a
Restricted Subsidiary of the Company and other than Disqualified Stock or debt
securities that have been converted or exchanged into Disqualified Stock), plus
(iii) in case any Unrestricted Subsidiary has been redesignated a Restricted
Subsidiary pursuant to the terms of the Indenture or has been merged,
consolidated or amalgamated with or into, or transfers or conveys assets to or
is liquidated into, the Company or a Restricted Subsidiary and provided that no
Default or Event of Default shall have occurred and be continuing or would occur
as a consequence thereof, the lesser of (A) the book value (determined in
accordance with GAAP) at the date of such redesignation, combination or transfer
of the aggregate Investments made by the Company and its Restricted Subsidiaries
in such Unrestricted Subsidiary (or of the assets transferred or conveyed, as
applicable) and (B) the fair market value of such Investment in such
Unrestricted Subsidiary at the time of such redesignation, combination or
transfer (or of the assets transferred or conveyed, as applicable), in each case
as determined in good faith by the Board of Directors of the Company, whose
determination shall be conclusive and evidenced by a resolution of such Board
and, in each case, after deducting any Indebtedness associated with the
Unrestricted Subsidiary so designated or combined or with the assets so
transferred or conveyed, plus (iv) to the extent not already included in
Consolidated Net Income for such period, without duplication, any Restricted
Investment that was made after the Issue Date is sold for cash or otherwise
liquidated or repaid for cash, the lesser of (A) the cash return of capital with
respect to such Restricted Investment (less the cost of disposition, if any) and
(B) the initial amount of such Restricted Investment, plus (v) $10,000,000.
The foregoing provisions shall not prohibit (i) the payment of any
dividend within 60 days after the date of declaration thereof, if at said date
of declaration such payment would have complied with the provisions of the
Indenture; (ii) the redemption, repurchase, retirement, defeasance, or other
acquisition of any Indebtedness which is subordinated to the Notes or Equity
Interests of the Company in exchange for, or out of the net cash proceeds of the
substantially concurrent sale (other than to a Restricted Subsidiary of the
Company) of, Equity Interests of the Company (other than any Disqualified
Stock); provided that the amount of any such net cash proceeds that are utilized
for any such redemption, repurchase, retirement, defeasance or other acquisition
shall be excluded from clause (c) (ii) of the preceding paragraph; (iii) the
defeasance, redemption, repurchase or other acquisition of Indebtedness which is
subordinated to the Notes with the net cash proceeds from an incurrence of
Permitted Refinancing Indebtedness; (iv) the payment of any dividend or
distribution by a Restricted Subsidiary of the Company to the holders of its
common Equity Interests on a pro rata basis; (v) the repurchase, redemption or
other acquisition or retirement for value of any Equity Interests of the Company
or any Restricted Subsidiary of the Company held by any employee or director of
the Company (or any of its Subsidiaries), or any former employee or director of
the Company (or any of its Subsidiaries) issued pursuant to any management
equity plan or stock option
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plan or any other management or employee benefit plan, agreement or trust;
provided, however, that the aggregate price paid for all such repurchased,
redeemed, acquired or retired Equity Interests pursuant to this clause (v) shall
not exceed $1,000,000 in any twelve-month period; (vi) repurchases of Equity
Interests deemed to occur upon the cashless exercise of stock options; and (vii)
reasonable and customary directors' fees to the members of the Company's Board
of Directors, provided that such fees are consistent with past practice,
provided, further, that, with respect to clauses (ii), (iii), (v), (vi) and
(vii) above, no Default or Event of Default shall have occurred and be
continuing immediately after such transaction.
In determining whether any Restricted Payment is permitted by the
foregoing covenant, the Company may allocate or reallocate all or any portion of
such Restricted Payment among the clauses (i) through (vii) of the preceding
paragraph or among such clauses and the first paragraph of this covenant
including clauses (a), (b) and (c), provided that at the time of such allocation
or reallocation, all such Restricted Payments, or allocated portions thereof,
would be permitted under the various provisions of the foregoing covenant.
The amount of all Restricted Payments (other than cash) shall be the
Fair Market Value (as determined by the Board of Directors of the Company and as
evidenced by a resolution of the Board of Directors of the Company set forth in
an Officers' Certificate delivered to the Trustee) on the date of the Restricted
Payment of the asset(s) or securities proposed to be transferred or issued by
the Company or such Restricted Subsidiary, as the case may be, pursuant to the
Restricted Payment, such determination to be based upon an opinion or appraisal
by an Independent Financial Advisor if the fair market value of any Restricted
Payment is greater than $10,000,000. Not later than (i) the end of any calendar
quarter in which any Restricted Payment is made or (ii) the making of a
Restricted Payment which, when added to the sum of all previous Restricted
Payments made in a calendar quarter, would cause the aggregate of all Restricted
Payments made in such quarter to exceed $5,000,000, the Company shall deliver to
the Trustee an Officers' Certificate stating that such Restricted Payment is
permitted and setting forth the basis upon which the calculations required by
this covenant were computed, which calculations may be based upon the Company's
latest available financial statements.
The Board of Directors may designate any Unrestricted Subsidiary to be
a Restricted Subsidiary only if (i) immediately after giving effect to such
designation, the Company is able to incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the
first paragraph of Section 4.09, (ii) immediately before and immediately after
giving effect to such designation, no Default or Event of Default shall have
occurred and be continuing and (iii) the Company certifies that such designation
complies with this covenant. Any such designation by the Board of Directors
shall be evidenced to the Trustee by promptly filing with the Trustee a copy of
the resolution giving effect to such designation and an Officers' Certificate
certifying that such designation complied with the foregoing provisions.
For purposes of making the determination as to whether such designation
would cause a Default or Event of Default, all outstanding Investments by the
Company and its Restricted Subsidiaries (except to the extent repaid in cash) in
the Subsidiary so designated will be deemed to
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be Restricted Payments at the time of such designation and will reduce the
amount available for Restricted Payments under the first paragraph of this
covenant. All such outstanding Investments will be deemed to constitute
Investments in an amount equal to the greatest of (i) the net book value
(determined in accordance with GAAP) of such Investments at the time of such
designation, (ii) the fair market value of such Investments at the time of such
designation and (iii) the original fair market value of such Investments at the
time they were made. Such designation will only be permitted if such Restricted
Payment would be permitted at such time and if such Restricted Subsidiary
otherwise meets the definition of an Unrestricted Subsidiary.
Any such designation by the Board of Directors shall be evidenced to
the Trustee by filing with the Trustee a certified copy of the resolution of the
Board of Directors of the Company giving effect to such designation and an
Officers' Certificate certifying that such designation complied with the
foregoing conditions.
If, at any time, any Unrestricted Subsidiary would fail to meet the
foregoing requirements as an Unrestricted Subsidiary, it shall thereafter cease
to be an Unrestricted Subsidiary for purposes of the Indenture and any
Indebtedness of such Subsidiary shall be deemed to be incurred as of such date.
SECTION 4.08 Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary of the Company or the Company to (i)(x) pay dividends or
make any other distributions to the Company or any of its Restricted
Subsidiaries (1) on its Capital Stock or (2) with respect to any other interest
or participation in, or measured by, its profits, or (y) pay any Indebtedness
owed to the Company or any of its Restricted Subsidiaries, (ii) make loans or
advances to the Company or any of its Restricted Subsidiaries or (iii) transfer
any of its properties or assets to the Company or any of its Restricted
Subsidiaries, except for such encumbrances or restrictions existing under or by
reason of (a) the Indenture, the Notes, Existing Indebtedness and the Credit
Facility as in effect on the Issue Date and any future Liens that may be
permitted to be granted under any other provisions of the Indenture, (b)
applicable law, (c) any instrument governing Indebtedness or Capital Stock of a
Person acquired by the Company or any of its Restricted Subsidiaries as in
effect at the time of such acquisition (except with respect to Indebtedness
incurred in connection with or in contemplation of such acquisition), which
encumbrance or restriction is not applicable to any Person, or the properties or
assets of any Person, other than the Person, or the property or assets of the
Person or such Person's subsidiaries, so acquired, provided that, in the case of
Indebtedness, such Indebtedness was permitted by the terms of the Indenture to
be incurred, (d) restrictions of the nature described in clause (iii) above by
reason of customary non-assignment provisions in contracts, agreements, and
leases entered into in the ordinary course of business and consistent with past
practices, (e) purchase money obligations for property acquired in the ordinary
course of business that impose restrictions of the nature described in clause
(iii) above on the property so acquired, (f) any restriction with respect to a
Restricted
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Subsidiary imposed pursuant to an agreement entered into for the sale or
disposition of all or substantially all of the Capital Stock or assets of such
Restricted Subsidiary pending the closing of such sale or disposition, (g)
agreements relating to secured Indebtedness otherwise permitted to be incurred
pursuant to Sections 4.09 and 4.12 hereof that limit the right of the debtor to
dispose of assets securing such Indebtedness and (h) Permitted Refinancing
Indebtedness in respect of Indebtedness referred to in clause (a), (c) and (e)
of this paragraph, provided that the restrictions contained in the agreements
governing such Permitted Refinancing Indebtedness are no more restrictive than
those contained in the agreements governing the Indebtedness being refinanced.
SECTION 4.09 Incurrence of Indebtedness and Issuance of Preferred Stock.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable, contingently or otherwise,
with respect to (collectively, "incur") any Indebtedness (including Acquired
Debt) and that the Company shall not issue any Disqualified Stock and shall not
permit any of its Restricted Subsidiaries to issue any shares of preferred
stock; provided, however, that (a) the Company and any Guarantor may incur
Indebtedness (including Acquired Debt), (b) the Company may issue shares of
Disqualified Stock or (c) a Restricted Subsidiary may incur Acquired Debt, if,
in each case, the Company's Fixed Charge Coverage Ratio for the Company's most
recently ended four full fiscal quarters for which internal financial statements
are available immediately preceding the date on which such additional
Indebtedness is incurred or such Disqualified Stock is issued would have been at
least 2.25 to 1, determined on a pro forma basis (including a pro forma
application of the net proceeds therefrom), as if the additional Indebtedness
had been incurred, or the Disqualified Stock had been issued, as the case may
be, at the beginning of such four-quarter period.
The provisions of the first paragraph of this covenant shall not apply
to the incurrence of any of the following items of Indebtedness (collectively,
"Permitted Debt"):
(i) the incurrence by the Company and the Guarantors
of Indebtedness represented by the Notes and the Subsidiary Guarantees;
(ii) the incurrence by the Company of Indebtedness
and letters of credit pursuant to any Credit Facility (with letters of
credit being deemed to have a principal amount equal to the maximum
potential liability of the Company thereunder) in an aggregate
principal amount not to exceed $75,000,000, less the sum of (a) the
amount of Purchase Money Indebtedness incurred by the Company or any of
its Restricted Subsidiaries under clause (vi) below and outstanding and
(b) the aggregate amount of all proceeds of Assets Sales that have been
applied since the Issue Date to permanently reduce the outstanding
amount of such Indebtedness pursuant to Section 4.10 hereof;
(iii) the incurrence by the Company or any of its
Restricted Subsidiaries of Existing Indebtedness;
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(iv) the incurrence by the Company or any of its
Restricted Subsidiaries of Permitted Refinancing Indebtedness in
exchange for, or the net proceeds of which are used to extend,
refinance, renew, replace, defease or refund, Indebtedness that was
permitted by the Indenture to be incurred;
(v) the incurrence by the Company or any of its
Restricted Subsidiaries of intercompany Indebtedness between or among
the Company and any of its Restricted Subsidiaries; provided, however,
that (i) if the Company or any Guarantor is the obligor on such
Indebtedness, such Indebtedness is expressly subordinate to the payment
in full of all Obligations with respect to the Notes and (ii) (A) any
subsequent issuance or transfer of Equity Interests that results in any
such Indebtedness being held by a Person other than the Company or a
Restricted Subsidiary and (B) any sale or other transfer of any such
Indebtedness to a Person that is not either the Company or a Restricted
Subsidiary shall be deemed, in each case, to constitute an incurrence
of such Indebtedness by the Company or such Restricted Subsidiary, as
the case may be;
(vi) the incurrence by the Company or any of its
Restricted Subsidiaries of Purchase Money Indebtedness, in an aggregate
principal amount (or amount of Capital Lease Obligations), including
all Permitted Refinancing Indebtedness incurred to refund, refinance or
replace Purchase Money Indebtedness incurred pursuant to this clause
(vi), not to exceed $45,000,000 at any time outstanding;
(vii) the incurrence by the Company or any of its
Restricted Subsidiaries of obligations in the ordinary course of
business under (A) trade letters of credit which are to be repaid in
full not more than one year after the date on which such Indebtedness
is originally incurred to finance the purchase of goods by the Company
or a Restricted Subsidiary of the Company; (B) standby letters of
credit issued for the purpose of supporting (1) workers' compensation
liabilities of the Company or any of its Restricted Subsidiaries, or
(2) performance, payment, deposit or surety obligations of the Company
or any of its Restricted Subsidiaries; and (C) bid, advance payment and
performance bonds and surety bonds of the Company and its Restricted
Subsidiaries, and refinancings thereof;
(viii) the incurrence by the Company or any of its
Restricted Subsidiaries of (x) Financial Hedging Obligations that are
incurred for the purpose of fixing or hedging interest rate risk
(including with respect to any floating rate Indebtedness that is
permitted by the terms of the Indenture to be outstanding), but only to
the extent such obligations do not exceed 105% of the aggregate
principal amount of the Indebtedness to which such obligations relate,
and (y) Currency Hedging Obligations in connection with the conduct of
the Permitted Business in currencies other than the United States
Dollar, and, in the case of clauses (x) and (y) not for speculative
purposes and incurred in the ordinary course of business consistent
with prudent business practices;
(ix) the guarantee by the Company or any Restricted
Subsidiary of the Company or a Restricted Subsidiary of the Company
that was permitted to be incurred by
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another provision of this covenant; provided, that the guarantee of any
Indebtedness under this clause (ix) by a Restricted Subsidiary of the
Company that ceases to be a Restricted Subsidiary shall be deemed a
Restricted Investment at the time such Restricted Subsidiary's status
terminates in an amount equal to the maximum principal amount so
guaranteed, for so long as, and to the extent that, such guarantee
remains outstanding;
(x) the issuance by a Restricted Subsidiary of the
Company of preferred stock to the Company or to any of its Wholly Owned
Restricted Subsidiaries; provided, however, that any subsequent event
or issuance or transfer of any Equity Interests that results in the
owner of such preferred stock ceasing to be the Company or any of its
Wholly Owned Restricted Subsidiaries or any subsequent transfer of such
preferred stock to a Person, other than the Company or one of its
Restricted Subsidiaries, shall be deemed to be an issuance of preferred
stock by such Subsidiary that was not permitted by this clause (x); or
(xi) the incurrence by the Company or any of its
Restricted Subsidiaries of Indebtedness (in addition to Indebtedness
permitted by any other clause of this paragraph) in an aggregate
principal amount (or accreted value, as applicable) at any time
outstanding not to exceed $10,000,000.
For purposes of determining compliance with this covenant, in the event
that an item of Indebtedness meets the criteria of more than one of the
categories of Permitted Debt described in clauses (i) through (xi) above or is
entitled to be incurred pursuant to the first paragraph of this covenant, the
Company shall, in its sole discretion, classify such item of Indebtedness in any
manner that complies with this covenant and such item of Indebtedness shall be
treated as having been incurred pursuant to only one of such clauses or pursuant
to the first paragraph hereof. Accrual of interest, the accretion of accreted
value and the payment of interest in the form of additional Indebtedness will
not be deemed to be an incurrence of Indebtedness for purposes of this covenant.
SECTION 4.10 Asset Sales.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, engage in an Asset Sale unless (i) the Company or such
Restricted Subsidiary, as the case may be, receives consideration at the time of
such Asset Sale at least equal to the fair market value (which shall be
determined in good faith by the Company's Board of Directors) of the assets or
Equity Interests issued or sold or otherwise disposed of and (ii) at least 75%
of the consideration therefor received by the Company or such Restricted
Subsidiary is in the form of cash or Cash Equivalents; provided that the amount
of (x) any liabilities (as shown on the Company's or such Restricted
Subsidiary's most recent balance sheet), of the Company or any Restricted
Subsidiary of the Company (other than contingent liabilities and liabilities
that are by their terms subordinated to the Notes or any Subsidiary Guarantee)
that are assumed by the transferee of any such assets pursuant to a customary
novation agreement that releases the Company or such Restricted Subsidiary from
further liability and (y) any securities, notes or other obligations received by
the Company or any such Restricted Subsidiary from such transferee that are
immediately converted by the Company or such Restricted Subsidiary into cash (to
the extent of the cash received), shall be deemed to be cash for purposes of
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this provision and provided, further, that any Asset Sale pursuant to a
condemnation, appropriation or other similar taking, including by deed in lieu
of condemnation, or pursuant to the foreclosure or other enforcement of a
Permitted Lien or exercise by the related lienholder of rights with respect
thereto, including by deed or assignment in lieu of foreclosure shall not be
required to satisfy the conditions set forth in clauses (i) and (ii) of this
paragraph.
Within 270 days after the receipt of any Net Proceeds from an Asset
Sale, the Company or such Restricted Subsidiary, as the case may be, may apply
such Net Proceeds, at its option, (a) to permanently repay Indebtedness for
borrowed money other than Subordinated Indebtedness (and to correspondingly
permanently reduce the commitments with respect thereto in the case of revolving
borrowings), (b) to acquire a controlling interest in another business or all or
substantially all of the assets of a business, engaged in a Permitted Business,
or (c) to acquire other non-current assets to be used in a Permitted Business,
provided that the Company or such Restricted Subsidiary will have complied with
clause (b) or (c) if, within 270 days of such Asset Sale, the Company or such
Restricted Subsidiary shall have commenced and not completed or abandoned an
investment in compliance with clause (b) or (c) and such Investment is
substantially completed within 90 days after the first anniversary of such Asset
Sale. Pending the final application of any such Net Proceeds, the Company may
temporarily reduce Indebtedness under any Credit Facility or otherwise invest
such Net Proceeds in any manner that is not prohibited by the Indenture. Any Net
Proceeds from Asset Sales that are not applied or invested as provided in the
first sentence of this paragraph shall be deemed to constitute "Excess
Proceeds." When the aggregate amount of Excess Proceeds exceeds $10,000,000, the
Company shall be required to make an offer to all Holders of Notes and other
Indebtedness that ranks by its terms pari passu in right of payment with the
Notes and the terms of which contain substantially similar requirements with
respect to the application of net proceeds from asset sales as are contained in
the Indenture (an "Asset Sale Offer") to purchase on a pro rata basis the
maximum principal amount of Notes, that is an integral multiple of $1,000, that
may be purchased out of the Excess Proceeds, at an offer price in cash in an
amount equal to 100% of the principal amount thereof plus accrued and unpaid
interest and Liquidated Damages thereon, if any, to the date of purchase, in
accordance with the procedures set forth in Section 3.09 hereof. To the extent
that the aggregate amount of Notes and other such Indebtedness tendered pursuant
to an Asset Sale Offer is less than the Excess Proceeds, the Company may use any
remaining Excess Proceeds for general corporate purposes. If the aggregate
principal amount of Notes surrendered by Holders thereof exceeds the amount of
Excess Proceeds, the Trustee shall select the Notes to be purchased on a pro
rata basis. Upon completion of such offer to purchase, the amount of Excess
Proceeds shall be reset at zero.
SECTION 4.11 Transactions with Affiliates.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, make any payment to, or sell, lease,
transfer or otherwise dispose of any properties or assets to, or purchase any
property or assets from, or enter into or make or amend any transaction,
contract, agreement, understanding, loan, advance or guarantee with, or for the
benefit of, any Affiliate of any such Person (each of the foregoing, an
"Affiliate Transaction"), unless (i) such Affiliate Transaction is on terms that
are no less favorable to the Company or the relevant Restricted
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Subsidiary than those that would have been obtained in a comparable transaction
by the Company or such Restricted Subsidiary with an unrelated Person and (ii)
the Company delivers to the Trustee (a) with respect to any Affiliate
Transaction or series of related Affiliate Transactions involving aggregate
consideration in excess of $1,000,000, a resolution of its Board of Directors
set forth in an Officers' Certificate certifying that such Affiliate Transaction
complies with clause (i) above, (b) with respect to any Affiliate Transaction or
series of related Affiliate Transaction involving aggregate consideration in
excess of $5,000,000, a resolution of its Board of Directors set forth in an
Officers' Certificate certifying that such Affiliate Transaction complies with
clause (i) above and that such Affiliate Transaction has been approved by a
majority of the disinterested members of its Board of Directors, and (c) with
respect to any Affiliate Transaction or series of related Affiliate Transactions
involving aggregate consideration in excess of $10,000,000, an opinion as to the
fairness to the Holders of such Affiliate Transaction from a financial point of
view issued by an Independent Financial Advisor; provided that none of the
following shall be deemed to be Affiliate Transactions: (1) any employment
agreement entered into by the Company or any of its Restricted Subsidiaries in
the ordinary course of business and consistent with the past practice of the
Company or such Restricted Subsidiary, as the case may be, (2) transactions
between or among the Company and/or its Restricted Subsidiaries, (3) Restricted
Payments that are permitted by Section 4.07 hereof, (4) fees and compensation
paid to, and indemnity provided on behalf of, officers, directors, employees or
consultants of the Company and of its Restricted Subsidiaries in their capacity
as such, to the extent such fees and compensation are reasonable and customary,
(5) advances to employees for moving, entertainment and travel expenses, drawing
accounts and similar expenditures in the ordinary course of business and
consistent with past practices, (6) maintenance in the ordinary course of
business of customary benefit programs or arrangements for employees, officers
or directors, including vacation plans, health and life insurance plans,
deferred compensation plans and retirement or savings plans and similar plans,
(7) fees and compensation paid to, and indemnity provided on behalf of,
officers, directors or employees of the Company or any of its Restricted
Subsidiaries, as determined by the Board of Directors of the Company or of any
such Restricted Subsidiary, to the extent such fees and compensation are
reasonable and customary as determined by the Board of Directors of the Company
or such Restricted Subsidiary, and (8) transactions between the Company and its
Restricted Subsidiaries, on the one hand, and any Permitted Holders, on the
other, for the purposes of providing investment banking, financial advisory,
banking and other financial services, to the extent such fees and compensation
to such Permitted Holders in such transactions are reasonable and customary as
determined by the Board of Directors of the Company or such Restricted
Subsidiary.
SECTION 4.12 Liens.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or suffer to
exist any Lien on any asset now owned or hereafter acquired, or any income or
profits therefrom or assign or convey any right to receive income therefrom,
except Permitted Liens, to secure (a) any Indebtedness of the Company or such
Restricted Subsidiary, unless prior to, or contemporaneously therewith, the
Notes are equally and ratably secured, or (b) any Indebtedness of any Guarantor,
unless prior to, or contemporaneously therewith, the Subsidiary Guarantees are
equally and ratably secured; provided, however, that if such
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Indebtedness is expressly subordinated to the Notes or any Subsidiary
Guarantees, the Lien securing such Indebtedness will be subordinated and junior
to the Lien securing the Notes or any Subsidiary Guarantees, as the case may be,
with the same relative priority as such Indebtedness has with respect to the
Notes or any Subsidiary Guarantees.
SECTION 4.13 Business Activities.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, engage in any line of business other
than a Permitted Business, except to such extent as would not be material to the
Company and its Restricted Subsidiaries taken as a whole.
SECTION 4.14 Corporate Existence.
Subject to Articles 5 and 10 hereof, the Company shall do or cause to
be done all things necessary to preserve and keep in full force and effect (i)
its corporate existence, and the corporate, partnership or other existence of
each of its Restricted Subsidiaries, in accordance with the respective
organizational documents (as the same may be amended from time to time) of the
Company or any such Restricted Subsidiary and (ii) the rights (charter and
statutory), licenses and franchises of the Company and its Restricted
Subsidiaries; provided, however, that the Company shall not be required to
preserve any such right, license or franchise, or the corporate, partnership or
other existence of any of its Restricted Subsidiaries, 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 Restricted Subsidiaries, taken as
a whole, and that the loss thereof is not adverse in any material respect to the
Holders of the Notes.
SECTION 4.15 Offer to Repurchase upon Change of Control.
(a) Upon the occurrence of a Change of Control, each Holder of
Notes will have the right to require the Company to repurchase all or any part
(equal to $1,000 or an integral multiple thereof) of such Holder's Notes
pursuant to the offer described below (the "Change of Control Offer") at an
offer price in cash equal to 101% of the aggregate principal amount thereof plus
accrued and unpaid interest and Liquidated Damages, if any, thereon, to the date
of purchase (the "Change of Control Payment").
Within 30 days following any Change of Control, the Company will mail a
notice to each Holder stating: (i) the description of the transaction or
transactions that constitute the Change of Control and that the Change of
Control Offer is being made pursuant to this Section 4.15 and that all Notes
tendered will be accepted for payment; (ii) the purchase price and the purchase
date, which shall be no earlier than 30 days and no later than 60 days from the
date such notice is mailed (the "Change of Control Payment Date"); (iii) that
any Note not tendered will continue to accrue interest and Liquidated Damages,
if any; (iv) that, unless the Company defaults in the payment of the Change of
Control Payment, all Notes accepted for payment pursuant to the Change of
Control Offer shall cease to accrue interest after the Change of Control Payment
Date; (v) that Holders electing to have any Notes purchased pursuant to a Change
of Control Offer will be required to surrender the
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Notes, with the form entitled "Option of Holder to Elect Purchase" on the
reverse of the Notes completed, to the Paying Agent at the address specified in
the notice prior to the close of business on the third Business Day preceding
the Change of Control Payment Date; (vi) that Holders will be entitled to
withdraw their election if the Paying Agent receives, not later than the close
of business on the second Business Day preceding the Change of Control Payment
Date, a telegram, telex, facsimile transmission or letter setting forth the name
of the Holder, the principal amount of Notes delivered for purchase, and a
statement that such Holder is withdrawing his election to have the Notes
purchased; and (vii) that Holders whose Notes are being purchased only in part
will be issued new Notes equal in principal amount to the unpurchased portion of
the Notes surrendered, which unpurchased portion must be equal to $1,000 in
principal amount or an integral multiple thereof. The Company shall comply with
the requirements of Rule 14e-1 under the Exchange Act and any other securities
laws and regulations thereunder to the extent such laws and regulations are
applicable in connection with the repurchase of Notes as a result of a Change of
Control.
(b) On the Change of Control Payment Date, the Company will,
to the extent lawful, (i) accept for payment all Notes or portions thereof
properly tendered pursuant to the Change of Control Offer, (ii) deposit with the
Paying Agent an amount equal to the Change of Control Payment in respect of all
Notes or portions thereof so tendered and (iii) deliver or cause to be delivered
to the Trustee the Notes so accepted together with an Officers' Certificate
stating the aggregate principal amount of Notes or portions thereof being
purchased by the Company. The Paying Agent will promptly mail to each Holder of
Notes so tendered the Change of Control Payment for such Notes, and the Trustee
will promptly authenticate and mail (or cause to be transferred by book entry)
to each Holder a new Note equal in principal amount to any unpurchased portion
of the Notes surrendered, if any; provided that each such new Note will be in a
principal amount of $1,000 or an integral multiple thereof. Prior to complying
with the provisions of this Section 4.15, but in any event within 90 days
following a Change of Control, the Company will either repay all outstanding
Indebtedness or obtain the requisite consents, if any, under all agreements
governing outstanding Indebtedness to permit the repurchase of Notes required by
this covenant. The Company will publicly announce the results of the Change of
Control Offer on or as soon as practicable after the Change of Control Payment
Date.
(c) The Company will not be required to make a Change of
Control Offer upon a Change of Control if a third party makes the Change of
Control Offer in the manner, at the times and otherwise in compliance with the
requirements set forth herein applicable to a Change of Control Offer made by
the Company and purchases all Notes validly tendered and not withdrawn under
such Change of Control Offer.
SECTION 4.16 Subsidiary Guarantees of Certain Indebtedness.
No Subsidiary of the Company may guarantee any Indebtedness of the
Company, unless such Subsidiary (i) executes and delivers to the Trustee a
supplemental indenture in form and substance satisfactory to the Trustee
providing that such Subsidiary shall become a Guarantor under the Indenture and
evidencing such Subsidiary Guarantee of the Notes in accordance with Article 10
hereof, such Subsidiary Guarantee to be a general unsecured obligation of the
Guarantor ranking
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pari passu in right of payment with all other current or future senior
Indebtedness of such Guarantor, and senior in right of payment to any
Subordinated Indebtedness of such Guarantor and (ii) delivers an opinion of
counsel to the effect, inter alia, that such supplemental indenture has been
duly authorized and executed by such Subsidiary. Neither the Company nor any
Guarantor shall be required to make a notation on the Notes to reflect any such
subsequent Subsidiary Guarantee. Nothing in this Section 4.16 shall be construed
to permit any Restricted Subsidiary of the Company to incur Indebtedness
otherwise prohibited by Section 4.09 hereof.
SECTION 4.17 Payments for Consent.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, pay or cause to be paid any
consideration, whether by way of interest, fee or otherwise, to any Holder of
any Notes for or as an inducement to any consent, waiver or amendment of any of
the terms or provisions of this Indenture, the Subsidiary Guarantees or the
Notes unless such consideration is offered to be paid or is paid to all Holders
of the Notes that consent, waive or agree to amend in the time frame set forth
in the solicitation documents relating to such consent, waiver or agreement.
SECTION 4.18 Sale-and-Leaseback Transactions.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, enter into any sale-and-leaseback transaction; provided,
however, that the Company or any Restricted Subsidiary, as applicable, may enter
into a sale-and-leaseback transaction if (i) the Company or such Restricted
Subsidiary could have (a) incurred Indebtedness in an amount equal to the
Attributable Indebtedness relating to such sale-and-leaseback transaction
pursuant to Section 4.09 hereof and (b) incurred a Lien to secure such
Indebtedness pursuant to Section 4.12 hereof, (ii) the gross cash proceeds of
such sale-and-leaseback transaction are at least equal to the Fair Market Value
(as determined in accordance with the definition of such term, the results of
which determination shall be set forth in an Officers' Certificate delivered to
the Trustee) of the property that is the subject of such sale-and-leaseback
transaction and (iii) the transfer of assets in such sale-and-leaseback
transaction is permitted by, and the Company applies the proceeds of such
transaction in compliance with Section 4.10 hereof.
ARTICLE V
SUCCESSORS
SECTION 5.01 Merger, Consolidation, or Sale of Assets.
The Company will not consolidate or merge with or into (whether or not
the Company is the surviving corporation), or sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of its properties or
assets in one or more related transactions, to another corporation, Person or
entity unless (i) the Company is the surviving corporation or the entity or the
Person formed by or surviving any such consolidation or merger (if other than
the Company) or to which
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such sale, assignment, transfer, lease, conveyance or other disposition shall
have been made is a corporation organized or existing under the laws of the
United States, any state thereof or the District of Columbia; (ii) the entity or
Person formed by or surviving any such consolidation or merger (if other than
the Company) or the entity or Person to which such sale, assignment, transfer,
lease, conveyance or other disposition shall have been made assumes all the
obligations of the Company under the Notes and the Indenture pursuant to a
supplemental indenture in a form reasonably satisfactory to the Trustee; (iii)
immediately before and after such transaction no Default or Event of Default
shall have occurred; and (iv) except in the case of a merger of the Company with
or into a Wholly Owned Restricted Subsidiary, the Company or the entity or
Person formed by or surviving any such consolidation or merger (if other than
the Company), or to which such sale, assignment, transfer, lease, conveyance or
other disposition shall have been made (A) will have Consolidated Net Worth
immediately after the transaction equal to or greater than the Consolidated Net
Worth of the Company immediately preceding the transaction and (B) will, at the
time of such transaction and after giving pro forma effect thereto as if such
transaction had occurred at the beginning of the applicable four-quarter period,
be permitted to incur at least $1.00 of additional Indebtedness pursuant to the
Fixed Charge Coverage Ratio test set forth in the first paragraph of Section
4.09.
SECTION 5.02 Successor Corporation Substituted.
Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the assets
of the Company in accordance with Section 5.01 hereof, the successor corporation
formed by such consolidation or into or with which the Company is merged or to
which such sale, assignment, transfer, lease, conveyance or other disposition is
made shall succeed to, and be substituted for (so that from and after the date
of such consolidation, merger, sale, lease, conveyance or other disposition, the
provisions of this Indenture referring to the "Company" shall refer instead to
the successor corporation and not to the Company), and may exercise every right
and power of the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein.
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.01 Events of Default.
An "Event of Default" occurs if:
(a) the Company defaults in the payment when due of interest
on, or Liquidated Damages with respect to, the Notes and such default continues
for a period of 30 days;
(b) the Company defaults in the payment when due of principal
of or premium, if any, on the Notes;
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(c) the Company or any of its Restricted Subsidiaries fails to
comply with any of the provisions of Sections 4.07, 4.09, 4.10, 4.15 or 5.01
hereof;
(d) the Company or any of its Restricted Subsidiaries fails to
observe or perform any covenant, representation, warranty or other agreement in
this Indenture or the Notes (other than the provisions expressly set forth in
clause (c) above) for 30 days after notice to the Company by the Trustee or the
Holders of at least 25% in aggregate principal amount of the Notes then
outstanding;
(e) a default occurs under any mortgage, indenture or
instrument under which there may be issued or by which there may be secured or
evidenced any Indebtedness for money borrowed by the Company or any of its
Restricted Subsidiaries (or the payment of which is guaranteed by the Company or
any of its Restricted Subsidiaries) whether such Indebtedness or guarantee now
exists, or is created after the Issue Date, which default (a) is caused by a
failure to pay principal of or premium, if any, or interest on such Indebtedness
prior to the expiration of the grace period provided in such Indebtedness on the
date of such default (a "Payment Default") or (b) results in the acceleration of
such Indebtedness prior to its express maturity and, in each case, the principal
amount of any such Indebtedness, together with the principal amount of any other
such Indebtedness under which there has been a Payment Default or the maturity
of which has been so accelerated, aggregates without duplication $5,000,000 or
more and such default shall not have been cured or acceleration rescinded within
five Business Days after such occurrence;
(f) a final judgment or final judgments for the payment of
money are entered by a court or courts of competent jurisdiction against the
Company or any of its Restricted Subsidiaries or any of its Significant
Subsidiaries and such judgment or judgments remain unpaid or undischarged for a
period (during which execution shall not be effectively stayed) of 60 days,
provided that the aggregate of all such unpaid or undischarged judgments exceeds
$5,000,000 (excluding amounts covered by insurance);
(g) the Company or any of its Restricted Subsidiaries or any
of its Significant Subsidiaries or any group of Subsidiaries that, when taken
together, would constitute a Significant Subsidiary pursuant to or within the
meaning of the Bankruptcy Code:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief
against it in an involuntary case,
(iii) consents to the appointment of a custodian of
it or for all or substantially all of its property,
(iv) makes a general assignment for the benefit of
its creditors, or
(v) generally is not paying its debts as they become
due;
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(h) a court of competent jurisdiction enters an order or
decree under the Bankruptcy Code that:
(i) is for relief against the Company or any
of its Restricted Subsidiaries or any of its Significant
Subsidiaries or any group of Subsidiaries that, when taken
together, would constitute a Significant Subsidiary, in an
involuntary case;
(ii) appoints a Custodian of the Company or
any of its Restricted Subsidiaries or any of its Significant
Subsidiaries or any group of Subsidiaries that, when taken
together, would constitute a Significant Subsidiary, or for
all or substantially all of the property of the Company or any
of its Restricted Subsidiaries or any of its Significant
Subsidiaries or any group of Subsidiaries that, when taken
together, would constitute a Significant Subsidiary; or
(iii) orders the liquidation of the Company
or any of its Restricted Subsidiaries or any of its
Significant Subsidiaries or any group of Subsidiaries that,
when taken together, would constitute a Significant
Subsidiary;
and the order or decree remains unstayed and in effect for 60
consecutive days; or
(i) except as permitted herein, any Subsidiary Guarantee shall
be held in any judicial proceeding to be unenforceable or invalid or shall cease
for any reason to be in full force and effect or any Guarantor, or any Person
acting on behalf of any Guarantor, shall deny or disaffirm its obligations under
its Subsidiary Guarantee (other than by reason of the termination of this
Indenture or the release of any such Subsidiary Guarantee in accordance with
this Indenture).
In the case of any Event of Default occurring by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Company with
the intention of avoiding payment of the premium that the Company would have had
to pay if the Company then had elected to redeem the Notes pursuant to Section
3.07 hereof, an equivalent premium shall also become and be immediately due and
payable, to the extent permitted by law upon the acceleration of the Notes. If
an Event of Default occurs prior to June 1, 2003 by reason of any willful action
(or inaction) taken (or not taken) by or on behalf of the Company with the
intention of avoiding the prohibition on redemption of the Notes prior to June
1, 2003, then the premium, as discussed below, will become immediately due and
payable to the extent permitted by law upon the acceleration of the Notes. The
premium payable for purposes of this paragraph for each of the years beginning
on June 1, of the years set forth below shall be as set forth in the following
table expressed as a percentage of the amount that would otherwise be due but
for the provisions of this sentence, plus accrued interest, if any, to the date
of payment:
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<TABLE>
<CAPTION>
YEAR PERCENTAGE
---- ----------
<S> <C>
1998 ......... 108.750%
1999 ......... 107.875%
2000 ......... 107.000%
2001 ......... 106.125%
2002 ......... 105.250%
</TABLE>
SECTION 6.02 Acceleration.
If any Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the then outstanding Notes may
declare all the Notes to be due and payable immediately. Upon any such
declaration, the Notes shall become due and payable immediately. Notwithstanding
the foregoing, if an Event of Default specified in clause (g) or (h) of Section
6.01 hereof occurs with respect to the Company or any Significant Subsidiary or
any group of Subsidiaries that, taken together, would constitute a Significant
Subsidiary, all outstanding Notes shall be due and payable immediately without
further action or notice. The Holders of at least a majority in aggregate
principal amount of the then outstanding Notes by written notice to the Trustee
may on behalf of all of the Holders rescind an acceleration and its consequences
if the rescission would not conflict with any judgment or decree and if all
existing Events of Default (except nonpayment of principal, interest or
Liquidated Damages that has become due solely because of the acceleration) have
been cured or waived.
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, interest and
Liquidated Damages, if any, on the Notes or to enforce the performance of any
provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Note 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 Past Defaults.
Holders of not less than a majority in aggregate principal amount of
the then outstanding Notes by notice to the Trustee may on behalf of the Holders
of all of the Notes waive an existing Default or Event of Default and its
consequences hereunder, except a continuing Default or Event of Default in the
payment of interest or Liquidated Damages, if any, on, or the principal of, the
Notes including in connection with an offer to purchase; provided, however, that
the Holders of a majority in aggregate principal amount of then outstanding
Notes may rescind an acceleration and its consequences, including any related
payment default that resulted from such acceleration, to the extent permitted by
applicable law. Upon any such waiver, such Default shall cease to exist, and
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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.
Holders of a majority in principal amount of the then outstanding Notes
may direct the time, method and place of conducting any proceeding for
exercising any remedy available to the Trustee or exercising any trust or power
conferred on it. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture that the Trustee determines may be unduly
prejudicial to the rights of other Holders of Notes or that may involve the
Trustee in personal liability.
SECTION 6.06 Limitation on Suits.
A Holder of a Note may pursue a remedy with respect to this Indenture
or the Notes only if:
(a) the Holder of a Note has previously given to the Trustee
written notice of a continuing Event of Default;
(b) the Holders of at least 25% in principal amount of the
then outstanding Notes make a written request to the Trustee to pursue the
remedy;
(c) such Holder of a Note or Holders of Notes offer and, if
requested, provide to the Trustee indemnity satisfactory to the Trustee against
any loss, liability or expense to be incurred in compliance with such request;
(d) the Trustee does not comply with the request within 60
days after receipt of the request and the offer and, if requested, the provision
of indemnity; and
(e) during such 60-day period the Holders of a majority in
principal amount of the then outstanding Notes do not give the Trustee a
direction inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights of another
Holder of a Note or to obtain a preference or priority over another Holder of a
Note or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all of such Holders.
SECTION 6.07 Rights of Holders of Notes to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal, premium and Liquidated
Damages, if any, and interest on the Note, on or after the respective due dates
expressed in the Note (including in connection with an offer to
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purchase), or to bring suit for the enforcement of any such payment on or after
such respective dates, shall not be impaired or affected without the consent of
such Holder.
SECTION 6.08 Collection Suit by Trustee.
If an Event of Default specified in Section 6.01(a) or (b) 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 whole
amount of principal of, premium and Liquidated Damages, if any, and interest
remaining unpaid on the Notes and interest on overdue principal and, to the
extent lawful, 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 as may be necessary or advisable in order 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 of the Notes allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Notes), its creditors or its property 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 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 hereof. 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 hereof 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 that the Holders 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 Notes or the rights of any Holder, 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, it shall
pay out the money in the following order:
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First: to the Trustee, its agents and attorneys for amounts due under
Section 7.07 hereof, including payment of all compensation, expense, and
liabilities incurred, and all advances made, by the Trustee and the costs and
expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the Notes for
principal, premium and Liquidated Damages, if any, and interest, ratably,
without preference or priority of any kind, according to the amounts due and
payable on the Notes for principal, premium and Liquidated Damages, if any and
interest, respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.10.
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 cost of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees and expenses, 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 does not apply to a suit by the Trustee, a suit by a
Holder of a Note pursuant to Section 6.07 hereof, or a suit by Holders of more
than 10% in principal amount of the then outstanding Notes.
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 its 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:
(i) The Trustee need perform only those duties that
are specifically set forth in this Indenture and the TIA and no others,
and no implied covenants or obligations shall be read into this
Indenture against the Trustee. To the extent of any conflict between
the duties of the Trustee hereunder and under the TIA, the TIA shall
control.
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(ii) 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 the certificates and
opinions to determine whether or not they conform to the requirements
of this Indenture (but need not confirm or investigate the accuracy of
mathematical calculations or other facts stated therein).
(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:
(i) this paragraph does not limit the effect of
paragraph (b) of this Section;
(ii) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it is
proved that the Trustee was negligent in ascertaining the pertinent
facts; and
(iii) 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 hereof.
(d) Whether or not therein expressly so provided, every
provision of this Indenture that in any way relates to the Trustee is subject to
paragraphs (a), (b), and (c) of this Section.
(e) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or incur any liability. The Trustee shall be
under no obligation to exercise any of its rights and powers under this
Indenture at the request of any Holders, unless such Holder shall have offered
to the Trustee security and indemnity satisfactory to it against any loss,
liability or expense.
(f) The Trustee shall not be liable for interest on 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.
SECTION 7.02 Rights of Trustee.
(a) The Trustee may conclusively rely upon any document
(whether in its original or facsimile form) 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 an Officers' Certificate or an Opinion of Counsel or both. The Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on such Officers' Certificate or Opinion of Counsel. The
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Trustee may consult with counsel of its selection and the advice of such counsel
or any Opinion of Counsel shall be full and complete authorization and
protection from liability 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 its attorneys and 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 that it believes to be authorized or within the
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.
(f) The Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders unless such Holders shall have offered to the
Trustee reasonable security or indemnity against the costs, expenses and
liabilities (including fees and expenses of its agents and counsel) that might
be incurred by it in compliance with such request or direction.
SECTION 7.03 Individual Rights of Trustee.
The Trustee, any Paying Agent, any authenticating agent or registrar in
its individual or any other capacity may become the owner or pledgee of Notes
and may otherwise deal with the Company or any Affiliate of the Company with the
same rights it would have if it were not Trustee. However, in the event that the
Trustee acquires any conflicting interest 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. The Trustee is also subject
to Sections 7.10 and 7.11 hereof.
SECTION 7.04 Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no representation as
to the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Company's use of the proceeds from the Notes or any money
paid to the Company or upon the Company's direction under any provision of this
Indenture, 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 Notes or
any other document in connection with the sale of the Notes or pursuant to this
Indenture other than its certificate of authentication.
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SECTION 7.05 Notice of Defaults.
If a Default or Event of Default occurs and is continuing and if it is
actually known to a Responsible Officer of the Trustee, the Trustee shall mail
to Holders of Notes 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, or interest or Liquidated Damages, if any, on any Note, the
Trustee may withhold the notice if and so long as a committee of its Responsible
Officers in good faith determines that withholding the notice is in the
interests of the Holders of the Notes.
SECTION 7.06 Reports by Trustee to Holders of the Notes.
Within 60 days after each May 15 beginning with the May 15 following
the date of this Indenture, and for so long as Notes remain outstanding, the
Trustee shall mail to the Holders of the Notes a brief report dated as of such
reporting date that complies with TIA Section 313(a) (but if no event described
in TIA Section 313(a) has occurred within the twelve months preceding the
reporting date, no report need be transmitted). The Trustee also shall comply
with TIA Section 313(b)(2). The Trustee shall also transmit by mail all reports
as required by TIA Section 313(c).
A copy of each report at the time of its mailing to the Holders of
Notes shall be mailed to the Company and filed with the SEC and each stock
exchange on which the Notes are listed in accordance with TIA Section 313(d).
The Company shall promptly notify the Trustee when the Notes are listed on any
stock exchange or delisted therefrom.
SECTION 7.07 Compensation and Indemnity.
The Company shall pay to the Trustee from time to time such
compensation for its acceptance of this Indenture and services hereunder as the
parties shall agree from time to time. The Trustee's compensation shall not be
limited by any law on compensation of a trustee of an express trust. The Company
shall reimburse the Trustee promptly upon request for all reasonable
disbursements, advances and expenses incurred or made by it in addition to the
compensation for its services. Such expenses shall include the reasonable
compensation, disbursements and expenses of the Trustee's agents and counsel.
The Company shall indemnify each of the Trustee and any predecessor Trustee
against any and all losses, liabilities, claims, damages or expenses (including
taxes other than taxes based upon the income or gross receipts of the Trustee)
incurred by it arising out of or in connection with the acceptance or
administration of its duties under this Indenture, including the costs and
expenses of enforcing this Indenture against the Company (including this Section
7.07) and defending itself against any claim (whether asserted by the Company or
any Holder or any other person) or liability in connection with the exercise or
performance of any of its powers or duties hereunder, except to the extent any
such loss, liability, claim, damage or expense may be attributable to its
negligence or bad faith. The Trustee shall notify the Company promptly of any
claim for which it may seek indemnity. Failure by the Trustee to so notify the
Company shall not relieve the Company of its obligations hereunder. The Company
shall defend the claim and the Trustee shall cooperate in the
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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, which consent shall not be unreasonably
withheld.
The obligations of the Company under this Section 7.07 shall survive
the satisfaction and discharge of this Indenture.
To secure the Company's payment obligations in this Section, the
Trustee shall have a Lien prior to the Notes on all money or property held or
collected by the Trustee, except that held in trust to pay principal and
interest on particular Notes. Such Lien 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(g) or (h) hereof occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under the
Bankruptcy Code.
The Trustee shall comply with the provisions of TIA Section 313(b)(2)
to the extent applicable.
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.
The Trustee may resign in writing at any time and be discharged from
the trust hereby created by so notifying the Company. The Holders of Notes of a
majority in principal amount of the then outstanding Notes may remove the
Trustee by so notifying the Trustee and the Company in writing. The Company may
remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof,
(b) the Trustee is adjudged a bankrupt or an insolvent or
an order for relief is entered with respect to the Trustee under the Bankruptcy
Code;
(c) a custodian or public officer takes charge of the
Trustee or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
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If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of Notes of at least 10% in principal amount of the then outstanding
Notes may, at the expense of the Company, petition any court of competent
jurisdiction for the appointment of a successor Trustee.
If the Trustee, after written request by any Holder of a Note who has
been a Holder of a Note for at least six months, fails to comply with Section
7.10 hereof, such Holder of a Note may, at the expense of the Company, petition
any court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee.
A 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 Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders of the Notes. The retiring Trustee shall promptly transfer
all property held by it as Trustee to the successor Trustee, provided all sums
owing to the Trustee hereunder have been paid and subject to the Lien provided
for in Section 7.07 hereof. Notwithstanding replacement of the Trustee pursuant
to this Section 7.08, the Company's obligations under Section 7.07 hereof shall
continue for the benefit of the retiring Trustee.
SECTION 7.09 Successor Trustee by Merger, Etc.
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.
SECTION 7.10 Eligibility; Disqualification.
There shall at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and that has a combined capital and surplus of at least $50,000,000
as set forth in its most recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Sections 310(a)(1), (2) and (5). The Trustee is subject to
TIA Section 310(b).
SECTION 7.11 Preferential Collection of Claims Against Company.
The Trustee is subject to 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.
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ARTICLE VIII
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.01 Option to Effect Legal Defeasance or Covenant Defeasance.
The Company may, at the option of its Board of Directors evidenced by a
resolution set forth in an Officers' Certificate, at any time, elect to have
either Section 8.02 or 8.03 hereof be applied to all outstanding Notes upon
compliance with the conditions set forth below in this Article 8.
SECTION 8.02 Legal Defeasance and Discharge.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Company shall, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be deemed to have been
discharged from its obligations with respect to all outstanding Notes on the
date the conditions set forth below are satisfied (hereinafter, "Legal
Defeasance") except for (i) the rights of Holders of outstanding Notes to
receive payments in respect of the principal of, premium, if any, and interest
and Liquidated Damages, if any, on such Notes when such payments are due from
the trust referred to below, (ii) the Company's obligations with respect to the
Notes concerning issuing temporary Notes, registration of Notes, mutilated,
destroyed, lost or stolen Notes and the maintenance of an office or agency for
payment and money for security payments held in trust, (iii) the rights, powers,
trusts, duties and immunities of the Trustee, and the Company's obligations in
connection therewith and (iv) the Legal Defeasance provisions of this Indenture.
For this purpose, Legal Defeasance means that the Company shall be deemed to
have paid and discharged the entire Indebtedness represented by the outstanding
Notes, which shall thereafter be deemed to be "outstanding" only for the
purposes of Section 8.05 hereof and the other Sections of this Indenture
referred to in (a) and (b) below, and to have satisfied all its other
obligations under such Notes and this Indenture (and the Trustee, on demand of
and at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following provisions which shall survive
until otherwise terminated or discharged hereunder: (a) the rights of Holders of
outstanding Notes to receive solely from the trust fund described in Section
8.04 hereof, and as more fully set forth in such Section, payments in respect of
the principal of, premium, if any, and interest and Liquidated Damages, if any,
on such Notes when such payments are due, (b) the Company's obligations with
respect to such Notes under Article 2 and Section 4.02 hereof, (c) the rights,
powers, trusts, duties and immunities of the Trustee hereunder and the Company's
obligations in connection therewith and (d) this Article 8. Subject to
compliance with this Article 8, the Company may exercise its option under this
Section 8.02 notwithstanding the prior exercise of its option under Section 8.03
hereof.
SECTION 8.03 Covenant Defeasance.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Company shall, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be released from its
obligations under the covenants contained in Sections 4.03, 4.04, 4.05,
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4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.15, 4.16, 4.17 and 4.18 hereof,
Article 5 hereof and Section 10.03 hereof with respect to the outstanding Notes
on and after the date the conditions set forth below are satisfied (hereinafter,
"Covenant Defeasance"), and the Notes shall thereafter be deemed not
"outstanding" for the purposes of any direction, waiver, consent or declaration
or act of Holders (and the consequences of any thereof) in connection with such
covenants, but shall continue to be deemed "outstanding" for all other purposes
hereunder (it being understood that such Notes shall not be deemed outstanding
for accounting purposes). For this purpose, Covenant Defeasance means that, with
respect to the outstanding Notes, the Company may omit to comply with and shall
have no liability in respect of any term, condition or limitation set forth in
any such covenant, whether directly or indirectly, by reason of any reference
elsewhere herein to any such covenant or by reason of any reference in any such
covenant to any other provision herein or in any other document and such
omission to comply shall not constitute a Default or an Event of Default under
Section 6.01 hereof, but, except as specified above, the remainder of this
Indenture and such Notes shall be unaffected thereby. In addition, upon the
Company's exercise under Section 8.01 hereof of the option applicable to this
Section 8.03 hereof, subject to the satisfaction of the conditions set forth in
Section 8.04 hereof, Sections 6.01(c) through 6.01(g) hereof and 6.01(i) hereof
shall not constitute Events of Default.
SECTION 8.04 Conditions to Legal or Covenant Defeasance.
The following shall be the conditions to the application of either
Section 8.02 or 8.03 hereof to the outstanding Notes:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company must irrevocably deposit with the Trustee, in
trust, for the benefit of the Holders, cash in U.S. dollars, non-callable
Government Securities, or a combination thereof, in such amounts as will be
sufficient, in the opinion of a nationally recognized firm of independent public
accountants, to pay the principal of, premium, if any, and interest and
Liquidated Damages, if any, on the outstanding Notes on the stated maturity or
on the applicable redemption date, as the case may be, and the Company must
specify whether the Notes are being defeased to maturity or to a particular
redemption date;
(b) in the case of an election under Section 8.02 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee confirming that (A) the Company has
received from, or there has been published by, the Internal Revenue Service a
ruling or (B) since the date of this Indenture, there has been a change in the
applicable federal income tax law, in either case to the effect that, and based
thereon such Opinion of Counsel shall confirm that, the Holders of the
outstanding Notes will not recognize income, gain or loss for federal income tax
purposes as a result of such Legal Defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same times as
would have been the case if such Legal Defeasance had not occurred;
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(c) in the case of an election under Section 8.03 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee confirming that the Holders of the
outstanding Notes will not recognize income, gain or loss for federal income tax
purposes as a result of such Covenant Defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same times as
would have been the case if such Covenant Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of Default
resulting from the borrowing of funds to be applied to such deposit) or insofar
as Section 6.01(g) or 6.01(h) hereof is concerned, at any time in the period
ending on the 91st day after the date of deposit;
(e) such Legal Defeasance or Covenant Defeasance will not
result in a breach or violation of, or constitute a default under, any material
agreement or instrument (other than this Indenture) to which the Company or any
of its Restricted Subsidiaries is a party or by which the Company or any of its
Restricted Subsidiaries is bound;
(f) the Company shall have delivered to the Trustee an Opinion
of Counsel to the effect that on the 91st day following the deposit, the trust
funds will not be subject to the effect of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally;
(g) the Company shall have delivered to the Trustee an
Officers' Certificate stating that the deposit was not made by the Company with
the intent of preferring the Holders of Notes over the other creditors of the
Company with the intent of defeating, hindering, delaying or defrauding
creditors of the Company or others; and
(h) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for or relating to the Legal Defeasance or the
Covenant Defeasance have been complied with.
SECTION 8.05 Deposited Money and Government Securities to be Held in
Trust; Other Miscellaneous Provisions.
Subject to Section 8.06 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this Section 8.05, the
"Trustee") pursuant to Section 8.04 hereof in respect of the outstanding Notes
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as Paying Agent) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal, premium, if any, and interest and
Liquidated Damages, if any, but such money need not be segregated from other
funds except to the extent required by law.
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The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or non-callable Government
Securities deposited pursuant to Section 8.04 hereof or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.
Anything in this Article 8 to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon the request of the
Company any money or non-callable Government Securities held by it as provided
in Section 8.04 hereof which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under Section
8.04(a) hereof), are in excess of the amount thereof that would then be required
to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.
SECTION 8.06 Repayment to Company.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of, premium, if any,
or interest and Liquidated Damages, if any, on any Note and remaining unclaimed
for two years after such principal, and premium, if any, or interest and
Liquidated Damages, if any, has become due and payable shall be paid to the
Company on its request or (if then held by the Company) shall be discharged from
such trust; and the Holder of such Note shall thereafter, as a secured creditor,
look only to the Company for payment thereof, and all liability of the Trustee
or such Paying Agent with respect to such trust money, and all liability of the
Company as trustee thereof, shall thereupon cease; provided, however, that the
Trustee or such Paying Agent, before being required to make any such repayment,
may at the expense of the Company cause to be published once, in the New York
Times and The Wall Street Journal (national edition), notice that such money
remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such notification or publication, any
unclaimed balance of such money then remaining will be repaid to the Company.
SECTION 8.07 Reinstatement.
If the Trustee or Paying Agent is unable to apply any U.S. dollars or
non-callable Government Securities in accordance with Section 8.02 or 8.03
hereof, as the case may be, by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is
permitted to apply all such money in accordance with Section 8.02 or 8.03
hereof, as the case may be; provided, however, that, if the Company makes any
payment of principal of, premium, if any, or interest and Liquidated Damages, if
any, on any Note following the reinstatement of its obligations, the Company
shall be subrogated to the rights of the Holders of such Notes to receive such
payment from the money held by the Trustee or Paying Agent.
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ARTICLE IX
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01 Without Consent of Holders of Notes.
Notwithstanding Section 9.02 hereof, the Company and the Trustee may
amend or supplement this Indenture or the Notes without the consent of any
Holder of a Note:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or in
place of certificated Notes or to alter the provisions of Article 2 hereof
(including the related definitions) in a manner that does not materially
adversely affect any Holder;
(c) to provide for the assumption of the Company's obligations
to the Holders of the Notes in the case of a merger, consolidation or sale of
assets of the Company pursuant to Article 5 hereof or of any Guarantor pursuant
to Article 10 hereof or to add any Person as a Guarantor hereunder;
(d) to make any change that would provide any additional
rights or benefits to the Holders of the Notes or that does not adversely affect
the legal rights hereunder of any such Holder; or
(e) to comply with requirements of the SEC in order to effect
or maintain the qualification of this Indenture under the TIA or to allow any
Guarantor to guarantee the Notes.
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon receipt by the Trustee of the documents described in Section
7.02 hereof, the Trustee shall join with the Company in the execution of any
amended or supplemental Indenture authorized or permitted by the terms of this
Indenture and to make any further appropriate agreements and stipulations that
may be therein contained, but the Trustee shall not be obligated to enter into
such amended or supplemental Indenture that affects its own rights, duties,
liabilities or immunities under this Indenture or otherwise.
SECTION 9.02 With Consent of Holders of Notes.
Except as provided below in this Section 9.02, the Company and the
Trustee may amend or supplement this Indenture (including Sections 3.09, 4.10
and 4.15 hereof) and the Notes may be amended or supplemented with the consent
of the Holders of at least a majority in principal amount of the Notes then
outstanding (including, without limitation, consents obtained in connection with
a tender offer or exchange offer for the Notes), and, subject to Sections 6.04
and 6.07 hereof, any existing Default or Event of Default (other than a Default
or Event of Default in the payment of the
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principal of, premium, if any, or interest and Liquidated Damages, if any, on
the Notes, except a payment default resulting from an acceleration that has been
rescinded) or compliance with any provision of this Indenture or the Notes may
be waived with the consent of the Holders of a majority in principal amount of
the then outstanding Notes (including consents obtained in connection with a
tender offer or exchange offer for the Notes).
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by
a Responsible Officer of the Trustee of the documents described in Section 7.02
hereof, the Trustee shall join with the Company in the execution of such amended
or supplemental Indenture unless such amended or supplemental Indenture affects
the Trustee's own rights, duties, liabilities or immunities under this Indenture
or otherwise, in which case the Trustee may in its discretion, but shall not be
obligated to, enter into such amended or supplemental Indenture.
It shall not be necessary for the consent of the Holders of Notes under
this Section 9.02 to approve the particular form of any proposed amendment or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to the Holders of Notes 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 amended or supplemental
Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the Holders of a
majority in aggregate principal amount of the Notes then outstanding may waive
compliance in a particular instance by the Company with any provision of this
Indenture or the Notes. However, without the consent of each Holder affected, an
amendment or waiver may not (with respect to any Notes held by a nonconsenting
Holder):
(a) reduce the principal amount of Notes whose Holders must
consent to an amendment, supplement or waiver of any provision of this
Indenture, the Notes or any Subsidiary Guarantee;
(b) reduce the principal of or change the fixed maturity of
any Note or alter or waive in any manner that adversely affects the rights of
any Holder of Notes any of the provisions with respect to the redemption of the
Notes except as provided above with respect to Sections 3.09, 4.10 and 4.15
hereof and the related definitions;
(c) reduce the rate of or change the time for payment of
interest, including default interest, or Liquidated Damages, if any, on any
Note;
(d) waive a Default or Event of Default in the payment of
principal of or premium, if any, or interest or Liquidated Damages, if any, on
the Notes (except a rescission of
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acceleration of the Notes by the Holders of at least a majority in aggregate
principal amount of the then outstanding Notes and a waiver of the payment
default that resulted from such acceleration);
(e) make any Note payable in money other than that stated in
the Notes;
(f) make any change that adversely affects the rights of any
Holder of Notes in the provisions of this Indenture relating to waivers of past
Defaults or make any change to the rights of Holders of Notes to receive
payments of principal of or interest or Liquidated Damages, if any, on the
Notes;
(g) waive a redemption payment with respect to any Note (other
than a payment required by Sections 3.09, 4.10 and 4.15 hereof).
(h) make any change in Section 6.04 or 6.07 hereof or in the
foregoing amendment and waiver provisions; or
SECTION 9.03 Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the Notes shall be
set forth in a amended or supplemental Indenture that complies 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 of a Note is a continuing consent by the Holder of a Note and
every subsequent Holder of a Note or portion of a Note that evidences the same
debt as the consenting Holder's Note, even if notation of the consent is not
made on any Note. However, any such Holder of a Note or subsequent Holder of a
Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
SECTION 9.05 Notation on or Exchange of Notes.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company, in
exchange for all Notes, may issue and the Trustee shall authenticate new Notes
that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment, supplement or waiver.
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<PAGE> 84
SECTION 9.06 Trustee to Sign Amendments, Etc.
The Trustee shall sign any amended or supplemental Indenture authorized
pursuant to this Article 9 if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. The Trustee
may, but shall not be obligated to, enter into any such supplemental indenture
which affects the Trustee's own rights, duties, liabilities or immunities under
this Indenture or otherwise. The Company may not sign an amendment or
supplemental Indenture until the Board of Directors approves it. In executing
any amended or supplemental indenture, the Trustee shall be entitled to receive
and (subject to Section 7.01 hereof) shall be fully protected in relying upon,
an Officers' Certificate and an Opinion of Counsel stating that the execution of
such amended or supplemental indenture is authorized or permitted by this
Indenture.
ARTICLE X
GUARANTEES
SECTION 10.01 Subsidiary Guarantees.
Subject to Section 10.05 hereof, any Restricted Subsidiary that becomes
a Guarantor shall, jointly and severally, unconditionally guarantee to each
Holder of a Note authenticated and delivered by the Trustee and to the Trustee
and its successors and assigns, the Notes and the Obligations of the Company
hereunder and thereunder, that:
(a) the principal of, premium, if any, interest and Liquidated
Damages, if any, on the Notes will be promptly paid in full when due, subject to
any applicable grace period, whether at maturity, by acceleration, redemption or
otherwise, and interest on the overdue principal, premium, if any (to the extent
permitted by law), interest on any interest, if any, and Liquidated Damages, if
any, on the Notes, and all other payment Obligations of the Company to the
Holders or the Trustee hereunder or thereunder will be promptly paid in full and
performed, all in accordance with the terms hereof and thereof; and
(b) in case of any extension of time of payment or renewal of
any Notes or any of such other Obligations, the same will be promptly paid in
full when due or performed in accordance with the terms of the extension or
renewal, subject to any applicable grace period, whether at stated maturity, by
acceleration, redemption or otherwise.
Failing payment when so due of any amount so guaranteed or any
performance so guaranteed for whatever reason, the Guarantors will be jointly
and severally obligated to pay the same immediately. An Event of Default under
this Indenture or the Notes shall constitute an event of default under the
Subsidiary Guarantees, and shall entitle the Holders to accelerate the
Obligations of the Guarantors hereunder in the same manner and to the same
extent as the Obligations of the Company. The Guarantors shall agree that their
Obligations hereunder shall be unconditional, irrespective of the validity or
enforceability of the Notes or this Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder with respect to any
provisions hereof or
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<PAGE> 85
thereof, the recovery of any judgment against the Company, any action to enforce
the same or any other circumstance which might otherwise constitute a legal or
equitable discharge or defense of a Guarantor. Each Guarantor shall waive
diligence, presentment, demand of payment, filing of claims with a court in the
event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands whatsoever
and shall covenant that its Subsidiary Guarantee will not be discharged except
by complete performance of the Obligations contained in the Notes and this
Indenture. If any Holder or the Trustee is required by any court or otherwise to
return to the Company, the Guarantors, or any Note Custodian, Trustee,
liquidator or other similar official acting in relation to either the Company or
the Guarantors, any amount paid by the Company or any Guarantor to the Trustee
or such Holder, the Subsidiary Guarantee, to the extent theretofore discharged,
shall be reinstated in full force and effect. Each Guarantor shall agree that it
shall not be entitled to, and shall waive, any right to exercise any right of
subrogation in relation to the Holders in respect of any Obligations guaranteed
by the Subsidiary Guarantee, except as provided under Section 10.05 hereof. Each
Guarantor shall further agree that, as between the Guarantors, on the one hand,
and the Holders and the Trustee, on the other hand, (x) the maturity of the
Obligations guaranteed by the Subsidiary Guarantee may be accelerated as
provided in Article 6 hereof for the purposes of its Subsidiary Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the Obligations guaranteed thereby, and (y) in the
event of any declaration of acceleration of such Obligations as provided in
Article 6 hereof, such Obligations (whether or not due and payable) shall
forthwith become due and payable by each Guarantor for the purpose of its
Subsidiary Guarantee. The Guarantors shall have the right to seek contribution
from any non-paying Guarantor pursuant to Section 10.05 after the Notes and the
Obligations hereunder shall have been paid in full to the Holders under the
Subsidiary Guarantees.
SECTION 10.02 Execution and Delivery of Subsidiary Guarantee.
To evidence its Subsidiary Guarantee set forth in Section 10.01 hereof,
each Guarantor shall execute and deliver a supplemental indenture substantially
in the form of Exhibit D hereto, which supplemental indenture shall be entered
into in accordance with Section 4.16 hereof and shall be executed on behalf of
such Guarantor, by manual or facsimile signature, by an Officer of such
Guarantor.
Each Guarantor shall agree that its Subsidiary Guarantee set forth in
Section 10.01 hereof shall remain in full force and effect notwithstanding any
failure to endorse on each Note a notation of such Subsidiary Guarantee.
If an officer who shall have signed this Indenture or a supplemental
indenture no longer holds that office at the time the Trustee authenticates the
Note on which a Subsidiary Guarantee is endorsed, the Subsidiary Guarantee shall
be valid nevertheless.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Subsidiary Guarantee set
forth in this Indenture on behalf of the Guarantors.
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SECTION 10.03 Guarantors May Consolidate, Etc., on Certain Terms.
(a) Except as set forth in Articles 4 and 5 hereof, nothing
contained in this Indenture shall prohibit a merger between a Guarantor and
another Guarantor or a merger between a Guarantor and the Company.
(b) No Guarantor shall consolidate with or merge with or into
(whether or not such Guarantor is the surviving Person) or sell all or
substantially all of its assets to, another corporation, Person or entity
whether or not affiliated with such Guarantor unless, subject to the following
paragraph, (i) the Person formed by or surviving any such merger or
consolidation, or to which such sale of assets shall have been made (if other
than such Guarantor) assumes all the Obligations of such Guarantor, pursuant to
a supplemental indenture substantially in the form of Exhibit D hereto, under
this Indenture; (ii) immediately after giving effect to such transaction, no
Default or Event of Default exists; (iii) such Guarantor, or any Person formed
by or surviving any such consolidation or merger, would have Consolidated Net
Worth (immediately after giving effect to such transaction) equal to or greater
than the Consolidated Net Worth of such Guarantor immediately preceding the
transaction; and (iv) except in the case of the merger of a Guarantor with or
into another Guarantor or the Company, the Company would be permitted by virtue
of the Company's pro forma Fixed Charge Coverage Ratio, immediately after giving
effect to such transaction, to incur at least $1.00 of additional Indebtedness
pursuant to the Fixed Charge Coverage Ratio test set forth in the first
paragraph of Section 4.09 hereof.
Notwithstanding the foregoing paragraph, (i) any Guarantor may
consolidate with, merge into or transfer all or a part of its properties and
assets to the Company or any other Guarantor and (ii) any Guarantor may merge
with a Wholly Owned Restricted Subsidiary of the Company that has no significant
assets or liabilities and was incorporated solely for the purpose of
reincorporating or redomesticating such Guarantor in another State of the United
States or, if such Guarantor was organized under the laws of a jurisdiction
other than a State of the United States, in any foreign country that is a member
of the OECD; provided that, in each case, such merged entity continues to be a
Guarantor.
(c) In the case of any such consolidation, merger, sale or
conveyance and upon the assumption by the successor Person, by supplemental
indenture, executed and delivered to the Trustee and substantially in the form
of Exhibit D hereto, of the Subsidiary Guarantee endorsed upon the Notes and the
due and punctual performance of all of the covenants and conditions of this
Indenture to be performed by the Guarantor, such successor Person shall succeed
to and be substituted for the Guarantor with the same effect as if it had been
named herein as a Guarantor. Such successor Person thereupon may cause to be
signed any or all of the Subsidiary Guarantees to be endorsed upon all of the
Notes issuable hereunder which theretofore shall not have been signed by the
Company and delivered to the Trustee. All of the Subsidiary Guarantees so issued
shall in all respects have the same legal rank and benefit under this Indenture
as the Subsidiary Guarantees theretofore and thereafter issued in accordance
with the terms of this Indenture as though all of such Subsidiary Guarantees had
been issued at the date of the execution hereof.
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SECTION 10.04 Releases Following Release Under All Indebtedness or Sale of
Assets.
In the event of (i) the release by the lenders under all Indebtedness
of the Company of all guarantees of a Guarantor and all Liens on the property
and assets of such Guarantor relating to such Indebtedness, or (ii) a sale or
other disposition of all of the assets of any Guarantor, by way of merger,
consolidation or otherwise, or a sale or other disposition of all of the capital
stock of any Guarantor in compliance with the Indenture to any entity that is
not the Company or a Subsidiary, then such Guarantor (in the event of a sale or
other disposition, by way of such a merger, consolidation or otherwise, of all
of the capital stock of such Guarantor), or the Person acquiring the property
(in the event of such a sale or other disposition of all of the assets of such
Guarantor), will be released and relieved of any obligations under its
Subsidiary Guarantee; provided, however, that any such termination shall occur
only to the extent that all obligations of such Guarantor under such
Indebtedness and all of its guarantees of, and under all of its pledges of
assets or other security interests which secure, Indebtedness of the Company
shall also terminate upon such release, sale or transfer and, in the event of
any sale or other disposition, that the Net Proceeds of such sale or other
disposition are applied in accordance with Section 4.10 hereof. Upon delivery by
the Company to the Trustee of an Officers' Certificate to the effect of the
foregoing, the Trustee shall execute any documents reasonably required in order
to evidence the release of any Guarantor from its Obligation under its
Subsidiary Guarantee. Any Guarantor not released from its Obligations under its
Subsidiary Guarantee shall remain liable for the full amount of principal of,
premium, if any, interest and Liquidated Damages, if any, on the Notes and for
the other Obligations of such Guarantor under this Indenture as provided in this
Article 10.
SECTION 10.05 Limitation on Guarantor Liability; Contribution.
For purposes hereof, each Guarantor's liability shall be limited to the
lesser of (i) the aggregate amount of the Obligations of the Company under the
Notes and this Indenture and (ii) the amount, if any, which would not have (A)
rendered such Guarantor "insolvent" (as such term is defined in the Bankruptcy
Code and in the Debtor and Creditor Law of the State of New York) or (B) left
such Guarantor with unreasonably small capital at the time its Subsidiary
Guarantee of the Notes was entered into; provided that, it will be a presumption
in any lawsuit or other proceeding in which a Guarantor is a party that the
amount guaranteed pursuant to the Subsidiary Guarantee is the amount set forth
in clause (i) above unless any creditor, or representative of creditors of such
Guarantor, or debtor in possession or trustee in bankruptcy of the Guarantor,
otherwise proves in such a lawsuit that the aggregate liability of the Guarantor
is the amount set forth in clause (ii) above. In making any determination as to
solvency or sufficiency of capital of a Guarantor in accordance with the
previous sentence, the right of such Guarantor to contribution from other
Guarantors as set forth below, and any other rights such Guarantor may have,
contractual or otherwise, shall be taken into account.
In order to provide for just and equitable contribution among the
Guarantors, the Guarantors shall agree, inter se, that in the event any payment
or distribution is made by any Guarantor (a "Funding Guarantor") under its
Subsidiary Guarantee, such Funding Guarantor shall be entitled to a contribution
from all other Guarantors in a pro rata amount based on the Adjusted Net Assets
of
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each Guarantor (including the Funding Guarantor) for all payments, damages
and expenses incurred by that Funding Guarantor in discharging the Company's
obligations with respect to the Notes or any other Guarantor's Obligations with
respect to its Subsidiary Guarantee.
SECTION 10.06 Trustee to Include Paying Agent.
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article 10 shall in each case (unless the context shall
otherwise require) be construed as extending to and including such Paying Agent
within its meaning as fully and for all intents and purposes as if such Paying
Agent were named in this Article 10 in place of the Trustee.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01 Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by TIA Section 318(c), the imposed duties shall control.
SECTION 11.02 Notices.
Any notice or communication by the Company or the Trustee to the others
is duly given if in writing and delivered in Person or mailed by first class
mail (registered or certified, return receipt requested), telecopier or
overnight air courier guaranteeing next day delivery, to the others' address:
If to the Company:
GulfMark Offshore, Inc.
5 Post Oak Park
Suite 1170
Houston, Texas 77027
Telecopier No.: (713) 963-9796
Attention: Frank R. Pierce, Executive Vice President
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If to the Trustee:
State Street Bank and Trust Company
Goodwin Square
225 Asylum Street
Hartford, Connecticut 06103
Telecopier No.: (860) 244-1889
Attention: Corporate Trust Administration
Ref: GulfMark Offshore
The Company or the Trustee, by notice to the others may designate
additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders) 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; when receipt acknowledged, if
telecopied; 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, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the register kept
by the Registrar. Any notice or communication shall also be so mailed to any
Person described in TIA Section 313(c), to the extent required by the TIA.
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.
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.
SECTION 11.03 Communication by Holders of Notes with Other Holders of
Notes.
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Notes. The
Company, the Trustee, the Registrar and anyone else shall have the protection of
TIA Section 312(c).
SECTION 11.04 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 furnish to the Trustee:
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<PAGE> 90
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 11.05 hereof) 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 satisfied; and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 11.05 hereof) stating that, in the opinion of such counsel, all such
conditions precedent and covenants have been satisfied.
SECTION 11.05 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:
(a) a statement that the Person making such certificate or
opinion has read such covenant or condition;
(b) 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;
(c) a statement that, in the opinion of such Person, he or she
has made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition has
been satisfied; and
(d) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been satisfied.
SECTION 11.06 Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
SECTION 11.07 No Personal Liability of Directors, Officers, Employees and
Stockholders.
No past, present or future director, officer, employee, incorporator,
partner, member or stockholder of the Company or any Guarantor, or of any
member, partner or stockholder of any such entity, as such, shall have any
liability for any obligations of the Company under the Notes, this Indenture or
the Subsidiary Guarantees or for any claim based on, in respect of, or by reason
of, such obligations or their creation. Each Holder by accepting a Note waives
and releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes. Such waiver may not
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be effective to waive liabilities under the federal securities laws and it is
the view of the SEC that such a waiver is against public policy.
SECTION 11.08 Governing Law.
THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES THEREOF, SHALL GOVERN AND BE USED TO CONSTRUE THIS INDENTURE,
THE NOTES AND THE SUBSIDIARY GUARANTEES.
SECTION 11.09 No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret any other indenture, loan
or debt agreement of the Company or its Subsidiaries or of any other Person. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.
SECTION 11.10 Successors.
All agreements of the Company in this Indenture and the Notes shall
bind its successors. All agreements of the Trustee in this Indenture shall bind
its successors.
SECTION 11.11 Severability.
In case any provision in this Indenture or in the Notes shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 11.12 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 11.13 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 of this Indenture and shall in
no way modify or restrict any of the terms or provisions hereof.
[Signatures Page(s) Follow]
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SIGNATURES
Dated as of June 8, 1998
Issuer:
GULFMARK OFFSHORE, INC.
By: /s/ Frank R. Pierce
-----------------------------------
Name: Frank R. Pierce
Title: Executive Vice President and
Chief Financial Officer
Trustee:
STATE STREET BANK AND TRUST COMPANY
By: /s/ Susan C. Merker
-----------------------------------
Name: Susan C. Merker
Title: Vice President
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EXHIBIT A-1
(FACE OF NOTE)
CUSIP/CINS 402629AA7
8 3/4% Senior Notes due 2008
No. _____ $__________
GULFMARK OFFSHORE, INC.
promises to pay to
or registered assigns,
the principal sum of
Dollars on June 1, 2008.
Interest Payment Dates: June 1 and December 1
Record Dates: May 15 and November 15
GULFMARK OFFSHORE, INC.
By:
-------------------------------
Name:
Title:
By:
-------------------------------
Name:
Title:
This is one of the Global
Notes referred to in the
within-mentioned Indenture:
STATE STREET BANK AND TRUST COMPANY
as Trustee
By: Dated:
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<PAGE> 94
(Back of Note)
8 3/4% Senior Notes due 2008
[Insert the Global Note Legend, if applicable,
pursuant to the provisions of the
Indenture]
[Insert the Private Placement Legend, if applicable,
pursuant to the provisions of the Indenture]
Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.
1. Interest. GulfMark Offshore, Inc., a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of this Note at
8 3/4% per annum, from June 8, 1998 until maturity and shall pay the Liquidated
Damages payable pursuant to Section 5 of the Registration Rights Agreement
referred to below. The Company will pay interest and Liquidated Damages
semi-annually in arrears on June 1 and December 1 of each year, or if any such
day is not a Business Day, on the next succeeding Business Day (each an
"Interest Payment Date"). Interest on the Notes will accrue from the most recent
date to which interest has been paid or, if no interest has been paid, from the
date of issuance; provided that if there is no existing Default in the payment
of interest, and if this Note 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 December 1, 1998. The Company shall pay
interest (including postpetition interest in any proceeding under the Bankruptcy
Code) on overdue principal and premium, if any, from time to time on demand at
the rate borne on the Notes; it shall pay interest (including post-petition
interest in any proceeding under the Bankruptcy Code) on overdue installments of
interest and Liquidated Damages (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 Notes
(except defaulted interest) and Liquidated Damages to the Persons who are
registered Holders of Notes at the close of business on the May 15 or November
15 next preceding the Interest Payment Date, even if such Notes are canceled
after such record date and on or before such Interest Payment Date, except as
provided in Section 2.12 of the Indenture with respect to defaulted interest.
The Notes will be payable as to principal, premium and Liquidated Damages, if
any, and interest at the office or agency of the Company maintained for such
purpose within the City and State of New York, or, at the option of the Company,
payment of interest and Liquidated Damages may be made by check mailed to the
Holders at their addresses set forth in the register of Holders, and provided
that payment by wire transfer of immediately available funds will be required
with respect to principal of and interest, premium and Liquidated Damages on,
all Global Notes and all other Notes the Holders of which shall have provided
wire transfer instructions to the Company or the Paying Agent. Such payment
shall be in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts.
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3. Paying Agent and Registrar. Initially, State Street Bank and Trust
Company, the Trustee under the Indenture, will act as Paying Agent and
Registrar. The Company may change any Paying Agent or Registrar without notice
to any Holder. The Company or any of its Subsidiaries may act in any such
capacity.
4. Indenture. The Company issued the Notes under an Indenture dated as
of June 8, 1998 ("Indenture") between the Company and the Trustee. The terms of
the Notes 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 Notes are subject to all such terms, and
Holders are referred to the Indenture and such Act for a statement of such
terms. To the extent any provision of this Note conflicts with the express
provisions of the Indenture, the provisions of the Indenture shall govern and be
controlling. The Notes are obligations of the Company limited to $200,000,000 in
aggregate principal amount, $130,000,000 of which will be issued in the
Offering.
5. Optional Redemption.
(a) Except as set forth in subparagraph (b) of this paragraph
5 and paragraph 8 below, the Notes shall not be redeemable at the Company's
option prior to June 1, 2003. Thereafter, the Notes will be subject to
redemption at any time at the option of the Company in whole or in part, at the
redemption prices (expressed as percentages of principal amount) set forth below
plus accrued and unpaid interest and Liquidated Damages thereon, if any, to the
applicable redemption date, if redeemed during the twelve-month period beginning
on June 1 of the years indicated below:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
- ---- ----------
<S> <C>
2003...................................... 104.375%
2004...................................... 102.917%
2005...................................... 101.458%
2006 and thereafter....................... 100.000%
</TABLE>
(b) Notwithstanding the foregoing, at any time prior to June
1, 2001, the Company may on any one or more occasions redeem an aggregate of up
to 35% of the original aggregate principal amount of Notes at a redemption price
of 108.75% of the principal amount thereof, plus accrued and unpaid interest and
Liquidated Damages thereon, if any, to the redemption date, with the net cash
proceeds of any Public Equity Offering; provided that at least 65% of the
original aggregate principal amount of Notes originally issued on the Issue Date
remain outstanding immediately after each occurrence of such redemption; and
provided, further, that each such redemption shall occur within 60 days of the
date of the closing of such Public Equity Offering.
6. Mandatory Redemption. Except as set forth in paragraph 7 below, the
Company shall not be required to make mandatory redemption payments with respect
to the Notes.
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7. Repurchase at Option of Holder.
(a) Upon the occurrence of a Change of Control, each Holder of
Notes will have the right to require the Company to repurchase all or any part
(equal to $1,000 or an integral multiple thereof) of such Holder's Notes
pursuant to the offer described below (the "Change of Control Offer") at an
offer price in cash equal to 101% of the aggregate principal amount thereof plus
accrued and unpaid interest and Liquidated Damages thereon, if any, to the date
of purchase (the "Change of Control Payment"). Within 10 days following any
Change of Control, the Company shall mail a notice to each Holder setting forth
the procedures governing the Change of Control Offer as by the Indenture.
(b) If the Company or a Restricted Subsidiary consummates any
Asset Sales and the aggregate amount of Excess Proceeds exceeds $10,000,000, the
Company shall commence an offer to all Holders of Notes (an "Asset Sale Offer")
pursuant to Section 3.09 of the Indenture (pro rata in proportion to outstanding
Indebtedness that is pari passu with the Notes that require asset sale offers)
to purchase the maximum principal amount of Notes that may be purchased out of
the Excess Proceeds, at an offer price in cash in an amount equal to 100% of the
principal amount thereof plus accrued and unpaid interest and Liquidated Damages
thereon, if any, to the date of purchase, in accordance with the procedures set
forth in the Indenture. To the extent that the aggregate amount of Notes
tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the
Company (or such Restricted Subsidiary) may use such deficiency for general
corporate purposes. If the aggregate principal amount of Notes surrendered by
Holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select
the Notes to be purchased on a pro rata basis. Holders of Notes that are the
subject of an offer to purchase will receive an Asset Sale Offer from the
Company prior to any related purchase date and may elect to have such Notes
purchased by completing the form entitled "Option of Holder to Elect Purchase"
on the reverse of the Notes.
8. Notice of Redemption. Notice of redemption will be mailed at least
30 days but not more than 60 days before the redemption date to each Holder
whose Notes are to be redeemed at its registered address. Notes in denominations
larger than $1,000 may be redeemed in part but only in whole multiples of
$1,000, unless all of the Notes held by a Holder are to be redeemed. On and
after the redemption date, interest and Liquidated Damages, if any, cease to
accrue on Notes or portions thereof called for redemption.
9. Denominations, Transfer, Exchange. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000. The
transfer of Notes may be registered and Notes 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 the
Company may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, it need not
exchange or register the transfer of any Notes for a period of 15
A1-4
<PAGE> 97
days before a selection of Notes to be redeemed or during the period between a
record date and the corresponding Interest Payment Date.
10. Persons Deemed Owners. The registered Holder of a Note may be
treated as its owner for all purposes.
11. Amendment, Supplement and Waiver. Subject to certain exceptions,
the Indenture or the Notes may be amended or supplemented with the consent of
the Holders of at least a majority in principal amount of the then outstanding
Notes, and any existing default or compliance with any provision of the
Indenture or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes. Without the consent
of any Holder of a Note, the Indenture or the Notes may be amended or
supplemented to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Notes in addition to or in place of certificated Notes, to
provide for the assumption of the Company's obligations to Holders of the Notes
in case of a merger or consolidation or to add any Person as a Guarantor, to
make any change that would provide any additional rights or benefits to the
Holders of the Notes or that does not adversely affect the legal rights under
the Indenture of any such Holder, or to comply with the requirements of the SEC
in order to effect or maintain the qualification of the Indenture under the TIA.
12. Defaults and Remedies. Events of Default include: (a) default in
the payment when due of interest on, or Liquidated Damages with respect to, the
Notes and such default continues for a period of 30 days; (b) default in the
payment when due of principal of or premium, if any, on the Notes when the same
becomes due and payable at maturity, upon redemption (including in connection
with an offer to purchase) or otherwise; (c) failure by the Company to comply
with any of the provisions of Section 5.01 of the Indenture; (d) failure by the
Company or any of its Restricted Subsidiaries to comply with any of the
provisions of Section 4.07, 4.09, 4.10 or 4.15 of the Indenture; (e) failure by
the Company or any of its Restricted Subsidiaries to observe or perform any
other covenant, representation, warranty or other agreement in the Indenture or
the Notes for 30 days after notice to the Company by the Trustee or the Holders
of at least 25% in aggregate principal amount of the Notes then outstanding; (f)
a default occurs under any mortgage, indenture or instrument under which there
may be issued or by which there may be secured or evidenced any Indebtedness for
money borrowed by the Company or any of its Restricted Subsidiaries (or the
payment of which is guaranteed by the Company or any of its Restricted
Subsidiaries), whether such Indebtedness or guarantee now exists, or is created
after the Issue Date (a) is caused by a failure to pay principal of or premium,
if any, or interest on such Indebtedness prior to the expiration of the grace
period provided in such Indebtedness on the date of such default (a "Payment
Default") or (b) results in the acceleration of such Indebtedness prior to its
express maturity and, in each case, the principal amount of any such
Indebtedness, together with the principal amount of any other such Indebtedness
under which there has been a Payment Default or the maturity of which has been
so accelerated, aggregates without duplication $5,000,000 or more and such
default shall not have been cured or acceleration rescinded within five Business
Days after such occurrences; (g) a final judgment or final judgments for the
payment of money are entered by a court or courts of competent jurisdiction
against the Company or any of its Restricted Subsidiaries or any of its
Significant Subsidiaries and such judgment or judgments remain unpaid or
undischarged for a period (during
A1-5
<PAGE> 98
which execution shall not be effectively stayed) of 60 days, provided that the
aggregate of all such unpaid or undischarged judgments exceeds $5,000,000
(excluding amounts covered by insurance); (h) certain events of bankruptcy or
insolvency with respect to the Company or any of its Restricted Subsidiaries or
any of its Significant Subsidiaries; or (i) except as permitted in the
Indenture, any Subsidiary Guarantee shall be held in any judicial proceeding to
be unenforceable or invalid or shall cease for any reason to be in full force
and effect or any Guarantor, or any Person acting on behalf of any Guarantor,
shall deny or disaffirm its obligations under its Subsidiary Guarantee. If any
Event of Default occurs and is continuing, the Trustee or the Holders of at
least 25% in principal amount of the then outstanding Notes may declare all the
Notes to be due and payable immediately. Notwithstanding the foregoing, in the
case of an Event of Default arising from certain events of bankruptcy or
insolvency, all outstanding Notes will become due and payable without further
action or notice. Holders may not enforce the Indenture or the Notes except as
provided in the Indenture. Subject to certain limitations, Holders of a majority
in principal amount of the then outstanding Notes may direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Holders of the
Notes notice of any continuing Default or Event of Default (except a Default or
Event of Default relating to the payment of principal or interest) if it
determines that withholding notice is in their interest. The Holders of a
majority in aggregate principal amount of the Notes then outstanding by notice
to the Trustee may on behalf of the Holders of all of the Notes waive any
existing Default or Event of Default and its consequences under the Indenture
except a continuing Default or Event of Default in the payment of interest on,
or the principal of, the Notes. The Company is required to deliver to the
Trustee annually a statement regarding compliance with the Indenture, and the
Company is required upon becoming aware of any Default or Event of Default, to
deliver to the Trustee a statement specifying such Default or Event of Default.
In the case of any Event of Default occurring by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Company with
the intention of avoiding payment of the premium that the Company would have had
to pay if the Company then had elected to redeem the Notes pursuant to Section
3.07 of the Indenture, an equivalent premium shall also become and be
immediately due and payable, to the extent permitted by law upon the
acceleration of the Notes. If an Event of Default occurs prior to June 1, 2003
by reason of any willful action ( or inaction) taken (or not taken) by or on
behalf of the Company with the intention of avoiding the prohibition on
redemption of the Notes prior to June 1, 2003, then the premium, as discussed
below, will become immediately due and payable to the extent permitted by law
upon the acceleration of the Notes. The premium payable for purposes of this
paragraph for each of the years beginning on June 1, of the years set forth
below shall be as set forth in the following table expressed as a percentage of
the amount that would otherwise be due but for the provisions of this sentence,
plus accrued interest, if any, to the date of payment:
A1-6
<PAGE> 99
<TABLE>
<CAPTION>
YEAR PERCENTAGE
- ---- ----------
<S> <C>
1998........................................................ 108.750%
1999........................................................ 107.875%
2000........................................................ 107.000%
2001........................................................ 106.125%
2002........................................................ 105.250%
</TABLE>
13. 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 the Trustee.
14. No Recourse Against Others. A director, officer, employee,
incorporator, partner, member or stockholder, of the Company or any Subsidiary
of the Company or any Guarantor, as such, shall not have any liability for any
obligations of the Company under the Notes, the Subsidiary Guarantees 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 Note waives and
releases all such liability. The waiver and release are part of the
consideration for the issuance of the Notes.
15. Authentication. This Note shall not be valid until authenticated by
the manual signature of a Responsible Officer of the Trustee or an
authenticating agent.
16. 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).
17. Additional Rights of Holders of Restricted Global Notes and
Restricted Definitive Notes. In addition to the rights provided to Holders of
Notes under the Indenture, Holders of Restricted Global Notes and Restricted
Definitive Notes shall have all the rights set forth in the Registration Rights
Agreement dated as of June 8, 1998, between the Company and the parties named on
the signature pages thereof (the "Registration Rights Agreement").
18. 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 Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
GulfMark Offshore, Inc.
5 Post Oak Park
Suite 1170
Houston, Texas 77027
Telecopier No.: (713) 963-9796
Attention: Frank R. Pierce, Executive Vice President
A1-7
<PAGE> 100
ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to
- --------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
---------------------------------------------------------
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
- --------------------------------------------------------------------------------
Date:
Your Signature:
-----------------------------------------------------------------
(Sign exactly as your name appears on the face of this Note)
SIGNATURE GUARANTEE
- --------------------------------------------------------------------------------
Signatures must be guaranteed by an
"eligible guarantor institution"
meeting the requirements of the
Registrar, which requirements
include membership or participation
in the Security Transfer Agent
Medallion Program ("STAMP") or such
other "signature guarantee program"
as may be determined by the
Registrar in addition to, or in
substitution for, STAMP, all in
accordance with the Securities
Exchange Act of 1934, as amended.
A1-8
<PAGE> 101
OPINION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.10 or 4.15 of the Indenture, check the box below:
[ ] Section 4.10 [ ] Section 4.15
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state the
amount you elect to have purchased:
$
-----------
Date:
Your Signature:
-----------------------------------------------------------------
(Sign exactly as your name appears on the face of the Note)
Tax Identification No.:
--------------------------------------------------------
SIGNATURE GUARANTEE
- --------------------------------------------------------------------------------
Signatures must be guaranteed by an
"eligible guarantor institution"
meeting the requirements of the
Registrar, which requirements
include membership or participation
in the Security Transfer Agent
Medallion Program ("STAMP") or such
other "signature guarantee program"
as may be determined by the
Registrar in addition to, or in
substitution for, STAMP, all in
accordance with the Securities
Exchange Act of 1934, as amended.
A1-9
<PAGE> 102
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL
NOTE***
The following exchanges of a part of this Global Note for an interest
in another Global Note or for a Definitive Note, or exchanges of a part of
another Global Note or Definitive Note for an interest in this Global Note, have
been made:
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT SIGNATURE OF
AMOUNT OF AMOUNT OF OF THIS GLOBAL NOTE AUTHORIZED
DECREASE IN INCREASE IN FOLLOWING SUCH SIGNATORY OF
PRINCIPAL AMOUNT PRINCIPAL AMOUNT DECREASE (OR TRUSTEE OR NOTE
DATE OF EXCHANGE OF THIS GLOBAL NOTE OF THIS GLOBAL NOTE INCREASE) CUSTODIAN
---------------- ------------------- ------------------- -------------------- ----------------------
<S> <C> <C> <C> <C>
- ------------------------------
This should be included only if the Note is issued in global form.
</TABLE>
A-10
<PAGE> 103
EXHIBIT A-2
(FACE OF REGULATION S TEMPORARY GLOBAL NOTE)
CUSIP/CINS U40302AA6
8 3/4% Senior Notes due 2008
No. _____ $__________
GULFMARK OFFSHORE, INC.
promises to pay to
or registered assigns,
the principal sum of
Dollars on June 1, 2008.
Interest Payment Dates: June 1 and December 1
Record Dates: May 15 and November 15.
GULFMARK CORPORATION
By:
------------------------------------
Name:
Title:
By:
------------------------------------
Name:
Title:
This is one of the Global
Notes referred to in the
within-mentioned Indenture:
STATE STREET BANK AND TRUST COMPANY
as Trustee
By: Dated:
A2-1
<PAGE> 104
(BACK OF REGULATION S TEMPORARY GLOBAL NOTE)
8 3/4% SENIOR NOTES DUE 2008
THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE AS
SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE
BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED
TO RECEIVE PAYMENT OF INTEREST HEREON.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE 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. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 WATER STREET, NEW YORK, NEW YORK) ("DTC"), TO THE COMPANY 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.
THE NOTE (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE NOTE
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE NOTE EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE
RELYING ON THE EXEMPTION PROVIDED BY RULE 144A UNDER THE SECURITIES ACT. THE
HOLDER OF THE NOTE EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT
(A) SUCH NOTE MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1) (a) TO A
PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT
OR (d) IN ACCORDANCE WITH ANOTHER
A2-2
<PAGE> 105
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED
UPON AN OPINION OF COUNSEL IF THE COMPANY SO REQUESTS), (2) TO THE COMPANY OR
(3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN
ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES
OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THE NOTE EVIDENCED
HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (1) ABOVE.
Capitalized terms used herein shall have the meanings assigned to them
in the indenture referred to below unless otherwise indicated.
1. Interest. GulfMark Offshore, Inc., a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of this Note at
8 3/4% per annum from June 8, 1998 until maturity and shall pay the Liquidated
Damages payable pursuant to Section 5 of the Registration Rights Agreement
referred to below. The Company will pay interest and Liquidated Damages
semi-annually in arrears on June 1 and December 1 of each year, or if any such
day is not a Business Day, on the next succeeding Business Day (each an
"Interest Payment Date"). Interest on the Notes will accrue from the most recent
date to which interest has been paid or, if no interest has been paid, from the
date of issuance; provided that if there is no existing Default in the payment
of interest, and if this Note 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 December 1, 1998. The Company shall pay
interest (including postpetition interest in any proceeding under the Bankruptcy
Code) on overdue principal and premium, if any, from time to time on demand at
the rate borne on the Notes; it shall pay interest (including post-petition
interest in any proceeding under the Bankruptcy Code) on overdue installments of
interest and Liquidated Damages (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.
Until this Regulation S Temporary Global Note is exchanged for one or
more Regulation S Permanent Global Notes, the Holder hereof shall not be
entitled to receive payments of interest hereon; until so exchanged in full,
this Regulation S Temporary Global Note shall in all other respects be entitled
to the same benefits as other Notes under the Indenture.
2. Method of Payment. The Company will pay interest on the Notes
(except defaulted interest) and Liquidated Damages to the Persons who are
registered Holders of Notes at the close of business on the May 15 or November
15 next preceding the Interest Payment Date, even if such Notes are canceled
after such record date and on or before such Interest Payment Date, except as
provided in Section 2.12 of the Indenture with respect to defaulted interest.
The Notes will be payable as to principal, premium and Liquidated Damages, if
any, and interest at the office or agency of the Company maintained for such
purpose within the City and State of New York, or, at the option of the Company,
payment of interest and Liquidated Damages may be made by check mailed to the
Holders at their addresses set forth in the register of Holders, and provided
that
A2-3
<PAGE> 106
payment by wire transfer of immediately available funds will be required with
respect to principal of and interest, premium and Liquidated Damages on, all
Global Notes and all other Notes the Holders of which shall have provided wire
transfer instructions to the Company or the Paying Agent. Such payment shall be
in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts.
3. Paying Agent and Registrar. Initially, State Street Bank and Trust
Company, the Trustee under the Indenture, will act as Paying Agent and
Registrar. The Company may change any Paying Agent or Registrar without notice
to any Holder. The Company or any of its Subsidiaries may act in any such
capacity.
4. Indenture. The Company issued the Notes under an Indenture dated as
of June 8, 1998 ("Indenture") between the Company and the Trustee. The terms of
the Notes 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 Notes are subject to all such terms, and
Holders are referred to the Indenture and such Act for a statement of such
terms. To the extent any provision of this Note conflicts with the express
provisions of the Indenture, the provisions of the Indenture shall govern and be
controlling. The Notes are obligations of the Company limited to $200,000,000 in
aggregate principal amount, $130,000,000 of which will be issued in the
Offering.
5. Optional Redemption.
(a) Except as set forth in subparagraph (b) of this paragraph
5 and paragraph 8 below, the Notes shall not be redeemable at the Company's
option prior to June 1, 2003. Thereafter, the Notes will be subject to
redemption at any time at the option of the Company in whole or in part, at the
redemption prices (expressed as percentages of principal amount) set forth below
plus accrued and unpaid interest and Liquidated Damages thereon, if any, to the
applicable redemption date, if redeemed during the twelve-month period beginning
on June 1 of the years indicated below:
<TABLE>
<CAPTION>
<S> <C>
YEAR PERCENTAGE
2003................................. 104.375%
2004................................. 102.917%
2005................................. 101.458%
2006 and thereafter.................. 100.000%
</TABLE>
(b) Notwithstanding the foregoing, at any time prior to June
1, 2001, the Company may on any one or more occasions redeem an aggregate of up
to 35% of the original aggregate principal amount of Notes at a redemption price
of 108.75% of the principal amount thereof, plus accrued and unpaid interest and
Liquidated Damages thereon, if any, to the redemption date, with the net cash
proceeds of any Public Equity Offering; provided that at least 65% of the
original aggregate principal amount of Notes originally issued on the Issue Date
remain outstanding immediately after each occurrence of such redemption; and
provided, further, that each such redemption shall occur within 60 days of the
date of the closing of such Public Equity Offering.
A2-4
<PAGE> 107
6. Mandatory Redemption. Except as set forth in paragraph 7 below, the
Company shall not be required to make mandatory redemption payments with respect
to the Notes.
7. Repurchase at Option of Holder.
(a) Upon the occurrence of a Change of Control, each Holder of
Notes will have the right to require the Company to repurchase all or any part
(equal to $1,000 or an integral multiple thereof) of such Holder's Notes
pursuant to the offer described below (the "Change of Control Offer") at an
offer price in cash equal to 101% of the aggregate principal amount thereof plus
accrued and unpaid interest and Liquidated Damages thereon, if any, to the date
of purchase (the "Change of Control Payment"). Within 10 days following any
Change of Control, the Company shall mail a notice to each Holder setting forth
the procedures governing the Change of Control Offer as by the Indenture.
(b) If the Company or a Restricted Subsidiary consummates any
Asset Sales and the aggregate amount of Excess Proceeds exceeds $10,000,000, the
Company shall commence an offer to all Holders of Notes (an "Asset Sale Offer")
pursuant to Section 3.09 of the Indenture (pro rata in proportion to outstanding
Indebtedness that is pari passu with the Notes that require asset sales offers)
to purchase the maximum principal amount of Notes that may be purchased out of
the Excess Proceeds, at an offer price in cash in an amount equal to 100% of the
principal amount thereof plus accrued and unpaid interest and Liquidated Damages
thereon, if any, to the date of purchase, in accordance with the procedures set
forth in the Indenture. To the extent that the aggregate amount of Notes
tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the
Company (or such Restricted Subsidiary) may use such deficiency for general
corporate purposes. If the aggregate principal amount of Notes surrendered by
Holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select
the Notes to be purchased on a pro rata basis. Holders of Notes that are the
subject of an offer to purchase will receive an Asset Sale Offer from the
Company prior to any related purchase date and may elect to have such Notes
purchased by completing the form entitled "Option of Holder to Elect Purchase"
on the reverse of the Notes.
8. Notice of Redemption. Notice of redemption will be mailed at least
30 days but not more than 60 days before the redemption date (other than in
connection with a Special Redemption) to each Holder whose Notes are to be
redeemed at its registered address. Notes in denominations larger than $1,000
may be redeemed in part but only in whole multiples of $1,000, unless all of the
Notes held by a Holder are to be redeemed. On and after the redemption date,
interest and Liquidated Damages, if any, cease to accrue on Notes or portions
thereof called for redemption.
9. Denominations, Transfer, Exchange. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000. The
transfer of Notes may be registered and Notes 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 the
Company may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Company need not exchange or register the
transfer of any Note
A2-5
<PAGE> 108
or portion of a Note selected for redemption, except for the unredeemed portion
of any Note being redeemed in part. Also, it need not exchange or register the
transfer of any Notes for a period of 15 days before a selection of Notes to be
redeemed or during the period between a record date and the corresponding
Interest Payment Date.
This Regulation S Temporary Global Note is exchangeable in whole or in
part for one or more Global Notes only (i) on or after the termination of the
40-day restricted period (as defined in Regulation S) and (ii) upon presentation
of certificates (accompanied by an Opinion of Counsel, if applicable) required
by Article 2 of the Indenture. Upon exchange of this Regulation S Temporary
Global Note for one or more Global Notes, the Trustee shall cancel this
Regulation S Temporary Global Note.
10. Persons Deemed Owners. The registered Holder of a Note may be
treated as its owner for all purposes.
11. Amendment, Supplement and Waiver. Subject to certain exceptions,
the Indenture or the Notes may be amended or supplemented with the consent of
the Holders of at least a majority in principal amount of the then outstanding
Notes, and any existing default or compliance with any provision of the
Indenture or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes. Without the consent
of any Holder of a Note, the Indenture or the Notes may be amended or
supplemented to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Notes in addition to or in place of certificated Notes, to
provide for the assumption of the Company's obligations to Holders of the Notes
in case of a merger or consolidation or to add any Person as a Guarantor, to
make any change that would provide any additional rights or benefits to the
Holders of the Notes or that does not adversely affect the legal rights under
the Indenture of any such Holder, or to comply with the requirements of the SEC
in order to effect or maintain the qualification of the Indenture under the TIA.
12. Defaults and Remedies. Events of Default include: (a) default in
the payment when due of interest on, or Liquidated Damages with respect to, the
Notes and such default continues for a period of 30 days; (b) default in the
payment when due of principal of or premium, if any, on the Notes when the same
becomes due and payable at maturity, upon redemption (including in connection
with an offer to purchase) or otherwise; (c) failure by the Company to comply
with any of the provisions of Section 5.01 of the Indenture; (d) failure by the
Company or any of its Restricted Subsidiaries to comply with any of the
provisions of Sections 4.07, 4.09, 4.10 or 4.15 of the Indenture; (e) failure by
the Company or any of its Restricted Subsidiaries to observe or perform any
other covenant, representation, warranty or other agreement in the Indenture or
the Notes for 30 days after notice to the Company by the Trustee or the Holders
of at least 25% in aggregate principal amount of the Notes then outstanding; (f)
a default occurs under any mortgage, indenture or instrument under which there
may be issued or by which there may be secured or evidenced any Indebtedness for
money borrowed by the Company or any of its Restricted Subsidiaries (or the
payment of which is guaranteed by the Company or any of its Restricted
Subsidiaries), whether such Indebtedness or guarantee now exists, or is created
after the Issue Date (a) is caused by a failure to pay principal of or premium,
if any, or interest on such Indebtedness prior to the expiration of the
A2-6
<PAGE> 109
grace period provided in such Indebtedness on the date of such default (a
"Payment Default") or results in the acceleration of such Indebtedness prior to
its express maturity and, in each case, the principal amount of any such
Indebtedness, together with the principal amount of any other such Indebtedness
under which there has been a Payment Default or the maturity of which has been
so accelerated, aggregates without duplication $5,000,000 or more and such
default shall not have been cured or acceleration rescinded within five Business
Days after such occurrences; (g) a final judgment or final judgments for the
payment of money are entered by a court or courts of competent jurisdiction
against the Company or any of its Restricted Subsidiaries or any of its
Significant Subsidiaries and such judgment or judgments remain undischarged for
a period (during which execution shall not be effectively stayed) of 60 days,
provided that the aggregate of all such unpaid or undischarged judgments exceeds
$5,000,000 (excluding amounts covered by insurance); (h) certain events of
bankruptcy or insolvency with respect to the Company or any of its Restricted
Subsidiaries or any of its Significant Subsidiaries; or (i) except as permitted
in the Indenture, any Subsidiary Guarantee shall be held in any judicial
proceeding to be unenforceable or invalid or shall cease for any reason to be in
full force and effect or any Guarantor, or any Person acting on behalf of any
Guarantor, shall deny or disaffirm its obligations under its Subsidiary
Guarantee. If any Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the then outstanding Notes may
declare all the Notes to be due and payable immediately. Notwithstanding the
foregoing, in the case of an Event of Default arising from certain events of
bankruptcy or insolvency, all outstanding Notes will become due and payable
without further action or notice. Holders may not enforce the Indenture or the
Notes except as provided in the Indenture. Subject to certain limitations,
Holders of a majority in principal amount of the then outstanding Notes may
direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Holders of the Notes notice of any continuing Default or Event of
Default (except a Default or Event of Default relating to the payment of
principal or interest) if it determines that withholding notice is in their
interest. The Holders of a majority in aggregate principal amount of the Notes
then outstanding by notice to the Trustee may on behalf of the Holders of all of
the Notes waive any existing Default or Event of Default and its consequences
under the Indenture except a continuing Default or Event of Default in the
payment of interest on, or the principal of, the Notes. The Company is required
to deliver to the Trustee annually a statement regarding compliance with the
Indenture, and the Company is required upon becoming aware of any Default or
Event of Default, to deliver to the Trustee a statement specifying such Default
or Event of Default.
In the case of any Event of Default occurring by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Company with
the intention of avoiding payment of the premium that the Company would have had
to pay if the Company then had elected to redeem the Notes pursuant to Section
3.07 of the Indenture, an equivalent premium shall also become and be
immediately due and payable, to the extent permitted by law upon the
acceleration of the Notes. If an Event of Default occurs prior to June 1, 2003
by reason of any willful action (or inaction) taken (or not taken) by or on
behalf of the Company with the intention of avoiding the prohibition on
redemption of the Notes prior to June 1, 2003, then the premium, as discussed
below, will become immediately due and payable to the extent permitted by law
upon the acceleration of the Notes. The premium payable for purposes of this
paragraph for each of the years beginning on June 1, of the years set forth
below shall be as set forth in the following table expressed as a percentage of
the
A2-7
<PAGE> 110
amount that would otherwise be due but for the provisions of this sentence, plus
accrued interest, if any, to the date of payment:
<TABLE>
<CAPTION>
<S> <C>
YEAR PERCENTAGE
- ---- ----------
1998...................................................... 108.750%
1999...................................................... 107.875%
2000...................................................... 107.000%
2001...................................................... 106.125%
2002...................................................... 105.520%
</TABLE>
13. 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 the Trustee.
14. No Recourse Against Others. A director, officer, employee,
incorporator, partner, member or stockholder, of the Company or any Subsidiary
of the Company or any Guarantor, as such, shall not have any liability for any
obligations of the Company under the Notes, the Subsidiary Guarantees 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 Note waives and
releases all such liability. The waiver and release are part of the
consideration for the issuance of the Notes.
15. Authentication. This Note shall not be valid until authenticated by
the manual signature of a Responsible Officer of the Trustee or an
authenticating agent.
16. 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).
17. Additional Rights of Holders of Restricted Global Notes and
Restricted Definitive Notes. In addition to the rights provided to Holders of
Notes under the Indenture, Holders of Restricted Global Notes and Restricted
Definitive Notes shall have all the rights set forth in the Registration Rights
Agreement dated as of June 8, 1998, between the Company and the parties named on
the signature pages thereof (the "Registration Rights Agreement").
18. 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 Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
A2-8
<PAGE> 111
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
GulfMark Offshore, Inc.
5 Post Oak Park
Suite 1170
Houston, Texas 77027
Telecopier No.: (713) 963-9796
Attention: Frank R. Pierce, Executive Vice President
A2-9
<PAGE> 112
ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to
- --------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
---------------------------------------------------------
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
- --------------------------------------------------------------------------------
Date:
Your Signature:
-----------------------------------------------------------------
(Sign exactly as your name appears on the face of this Note)
SIGNATURE GUARANTEE
- --------------------------------------------------------------------------------
Signatures must be guaranteed by an
"eligible guarantor institution"
meeting the requirements of the
Registrar, which requirements
include membership or participation
in the Security Transfer Agent
Medallion Program ("STAMP") or such
other "signature guarantee program"
as may be determined by the
Registrar in addition to, or in
substitution for, STAMP, all in
accordance with the Securities
Exchange Act of 1934, as amended.
A2-10
<PAGE> 113
OPINION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.10 or 4.15 of the Indenture, check the box below:
[ ] Section 4.10 [ ] Section 4.15
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state the
amount you elect to have purchased:
$
--------
Date:
Your Signature:
----------------------------------------------------------------
(Sign exactly as your name appears on the face of the Note)
Tax Identification No.:
--------------------------------------------------------
SIGNATURE GUARANTEE
- --------------------------------------------------------------------------------
Signatures must be guaranteed by an
"eligible guarantor institution"
meeting the requirements of the
Registrar, which requirements
include membership or participation
in the Security Transfer Agent
Medallion Program ("STAMP") or such
other "signature guarantee program"
as may be determined by the
Registrar in addition to, or in
substitution for, STAMP, all in
accordance with the Securities
Exchange Act of 1934, as amended.
A2-11
<PAGE> 114
SCHEDULE OF EXCHANGES OF REGULATION S TEMPORARY
GLOBAL NOTE
The following exchanges of a part of this Regulation S Temporary Global
Note for an interest in another Global Note, or of other Restricted Global Notes
for an interest in this Regulation S Temporary Global Note, have been made:
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT SIGNATURE OF
AMOUNT OF AMOUNT OF OF THIS GLOBAL NOTE AUTHORIZED
DECREASE IN INCREASE IN FOLLOWING SUCH SIGNATORY OF
PRINCIPAL AMOUNT PRINCIPAL AMOUNT DECREASE (OR TRUSTEE OR NOTE
DATE OF EXCHANGE OF THIS GLOBAL NOTE OF THIS GLOBAL NOTE INCREASE) CUSTODIAN
---------------- ------------------- ------------------- -------------------- ----------------------
<S> <C> <C> <C> <C>
</TABLE>
A2-12
<PAGE> 115
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
GulfMark Offshore, Inc.
5 Post Oak Park
Suite 1170
Houston, Texas 77027
Attention: Frank R. Pierce, Executive Vice President
State Street Bank and Trust Company
Goodwin Square
225 Asylum Street
Hartford, Connecticut 06103
Telecopier No.: (860) 244-1889
Attention: Corporate Trust Administration
Re: 8 3/4% Senior Notes due 2008
Reference is hereby made to the Indenture, dated as of June 8, 1998
(the "Indenture"), between GulfMark Offshore, Inc., as issuer (the "Company")
and State Street Bank and Trust Company, as trustee. Capitalized terms used but
not defined herein shall have the meanings given to them in the Indenture.
____________________, (the "Transferor") owns and proposes to transfer
the Note[s] or interest in such in such Note[s] specified in Annex A hereto, in
the principal amount of $__________ in such Note[s] or interests (the
"Transfer"), to ____________________ (the "Transferee"), as further specified in
Annex A hereto. In connection with the Transfer, the Transferor hereby certifies
that:
[CHECK ALL THAT APPLY]
1. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST
IN THE 144A GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO RULE 144A. The Transfer
is being effected pursuant to and in accordance with Rule 144A under the United
States Securities Act of 1933, as amended (the "Securities Act"), and,
accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Note is being transferred to a Person that the Transferor
reasonably believed and believes is purchasing the beneficial interest or
Definitive Note for its own account, or for one or more accounts with respect to
which such Person exercises sole investment discretion, and such Person and each
such account is a "qualified institutional buyer" within the meaning of Rule
144A in a transaction meeting the requirements of Rule 144A and such Transfer is
in compliance with any applicable blue sky securities laws of any state of the
United States. Upon consummation of the
B-1
<PAGE> 116
proposed Transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note will be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the 144A Global
Note and/or the Definitive Note and in the Indenture and the Securities Act.
2. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST
IN THE TEMPORARY REGULATION S GLOBAL NOTE, THE REGULATION S GLOBAL NOTE OR A
DEFINITIVE NOTE PURSUANT TO REGULATION S. The Transfer is being effected
pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act
and, accordingly, the Transferor hereby further certifies that (i) the Transfer
is not being made to a person in the United States and (x) at the time the buy
order was originated, the Transferee was outside the United States or such
Transferor and any Person acting on its behalf reasonably believed and believes
that the Transferee was outside the United States or (y) the transaction was
executed in, on or through the facilities of a designated offshore securities
market and neither such Transferor nor any Person acting on its behalf knows
that the transaction was prearranged with a buyer in the United States, (ii) no
directed selling efforts have been made in contravention of the requirements of
Rule 903(b) or Rule 904(b) of Regulation S under the Securities Act and (iii)
the transaction is not part of a plan or scheme to evade the registration
requirements of the Securities Act and (iv) if the proposed transfer is being
made prior to the expiration of the Restricted Period, the transfer is not being
made to a U.S. Person or for the account or benefit of a U.S. Person (other than
an Initial Purchaser). Upon consummation of the proposed transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Note will be subject to the restrictions on Transfer enumerated in
the Private Placement Legend printed on the Regulation S Global Note, the
Temporary Regulation S Global Note and/or the Definitive Note and in the
Indenture and the Securities Act.
3. [ ] CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A
DEFINITIVE NOTE PURSUANT TO ANY PROVISION OF THE SECURITIES ACT OTHER THAN RULE
144A OR REGULATION S. The Transfer is being effected in compliance with the
transfer restrictions applicable to beneficial interests in Restricted Global
Notes and Restricted Definitive Notes and pursuant to and in accordance with the
Securities Act and any applicable blue sky securities laws of any state of the
United States, and accordingly the Transferor hereby further certifies that
(check one):
(a) [ ] such Transfer is being effected pursuant to and in
accordance with Rule 144 under the Securities Act;
or
(b) [ ] such Transfer is being effected to the Company or a
subsidiary thereof;
or
(c) [ ] such Transfer is being effected pursuant to an
effective registration statement under the Securities Act and in compliance with
the prospectus delivery requirements of the Securities Act.
B-2
<PAGE> 117
4. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST
IN AN UNRESTRICTED GLOBAL NOTE OR OF AN UNRESTRICTED DEFINITIVE NOTE.
(a) [ ] CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The
Transfer is being effected pursuant to and in accordance with Rule 144 under the
Securities Act and in compliance with the transfer restrictions contained in the
Indenture and any applicable blue sky securities laws of any state of the United
States and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Note will no longer be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes, on Restricted Definitive Notes and in the Indenture.
(b) [ ] CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The
transfer is being effected pursuant to and in accordance with Rule 903 or Rule
904 under the Securities Act and in compliance with the transfer restrictions
contained in the Indenture and any applicable blue sky securities laws of any
state of the United States and (ii) the restrictions on transfer contained in
the Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act. Upon consummation of the proposed
Transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note will no longer be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the Restricted Global Notes, on Restricted Definitive Notes and in the
Indenture.
(c) [ ] CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i)
The Transfer is being effected pursuant to and in compliance with an exemption
from the registration requirements of the Securities Act other than Rule 144,
Rule 903 or Rule 904 and in compliance with the transfer restrictions contained
in the Indenture and any applicable blue sky securities laws of any State of the
United States and (ii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will not be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes or Restricted Definitive Notes and in the Indenture.
B-3
<PAGE> 118
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
- --------------------------------------
[Insert Name of Transferor]
By:
------------------------------
Name:
Title:
Dated:
B-4
<PAGE> 119
<TABLE>
<CAPTION>
ANNEX A TO CERTIFICATE OF TRANSFER
<S> <C>
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) [ ] a beneficial interest in the:
(i) [ ] 144A Global Note (CUSIP __________), or
(ii) [ ] Regulation S Global Note (CUSIP _________); or
(b) [ ] a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) [ ] a beneficial interest in the:
(i) [ ] 144A Global Note (CUSIP __________), or
(ii) [ ] Regulation S Global Note (CUSIP __________), or
(iii) [ ] Unrestricted Global Note (CUSIP __________); or
(b) [ ] a Restricted Definitive Note.
(c) [ ] an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
</TABLE>
B-5
<PAGE> 120
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
GulfMark Offshore, Inc.
5 Post Oak Park
Suite 1170
Houston, Texas 77027
Attention: Frank R. Pierce, Executive Vice President
State Street Bank and Trust Company
Goodwin Square
225 Asylum Street
Hartford, Connecticut 06103
Telecopier No.: (860) 244-1889
Attention: Corporate Trust Administration
Re: 8 3/4% Senior Notes due 2008
(CUSIP __________)
Reference is hereby made to the Indenture, dated as of June 8, 1998
(the "Indenture"), between GulfMark Offshore, Inc., as issuer (the "Company"),
and State Street Bank and Trust Company, as trustee. Capitalized terms used but
not defined herein shall have the meanings given to them in the Indenture.
____________________ (the "Owner") owns and proposes to exchange the
Note[s] or interest in such Note[s] specified herein, in the principal amount of
$__________ in such Note[s] or interests (the "Exchange"). In connection with
the Exchange, the Owner hereby certifies that:
1. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN A
RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
IN AN UNRESTRICTED GLOBAL NOTE
(a) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In
connection with the Exchange of the Owner's beneficial interest in a Restricted
Global Note for a beneficial interest in an Unrestricted Global Note in an equal
principal amount, the Owner hereby certifies (i) the beneficial interest is
being acquired for the Owner's own account without transfer, (ii) such Exchange
has been effected in compliance with the transfer restrictions applicable to the
Global Notes and pursuant to and in accordance with the United States Securities
Act of 1933, as amended (the "Securities Act"), (iii)
C-1
<PAGE> 121
the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act and (iv) the beneficial interest in an Unrestricted Global Note
is being acquired in compliance with any applicable blue sky securities laws of
any state of the United States.
(b) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the
Exchange of the Owner's beneficial interest in a Restricted Global Note for an
Unrestricted Definitive Note, the Owner hereby certifies (i) the Definitive Note
is being acquired for the Owner's own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Notes and pursuant to and in accordance with
the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the Definitive Note is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.
(c) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE
TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with the
Owner's Exchange of a Restricted Definitive Note for a beneficiary interest in
an Unrestricted Global Note, the Owner hereby certifies (i) the beneficial
interest is being acquired for the Owner's own account without transfer, (ii)
such Exchange has been effected in compliance with the transfer restrictions
applicable to Restricted Definitive Notes and pursuant to and in accordance with
the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.
(d) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE
TO UNRESTRICTED DEFINITIVE NOTE. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
2. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN
RESTRICTED GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
IN RESTRICTED GLOBAL NOTES
(a) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. In connection with the
Exchange of the Owner's beneficial interest in a Restricted Global Note for a
Restricted Definitive Note with an equal principal amount, the Owner hereby
certifies that the Restricted Definitive Note is being acquired for the Owner's
own account without transfer. Upon consummation of the proposed Exchange in
accordance with the terms of the Indenture, the Restricted Definitive Note
issued will continue to be subject to the
C-2
<PAGE> 122
restrictions on transfer enumerated in the Private Placement Legend printed on
the Restricted Definitive Note and in the Indenture and the Securities Act.
(b) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE
TO BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE. In connection with the
Exchange of the Owner's Restricted Definitive Note for a beneficial interest in
the
[CHECK ONE]
[ ] 144A Global Note [ ] Regulation S Global Note
with an equal principal amount, the Owner hereby certifies (i) the beneficial
interest is being acquired for the Owner's own account without transfer and (ii)
such Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Notes and pursuant to and in accordance with
the Securities Act, and in compliance with any applicable blue sky securities
laws of any state of the United States. Upon consummation of the proposed
Exchange in accordance with the terms of the Indenture, the beneficial interest
issued will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the relevant Restricted Global Note and in the
Indenture and the Securities Act.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
[Insert Name of Owner]
By:
--------------------------------
Name:
Title:
Dated:_______________, _____
C-3
<PAGE> 123
EXHIBIT D
FORM OF SUPPLEMENTAL INDENTURE
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of
_______________, _____ among GulfMark Offshore, Inc., a Delaware corporation
(the "Company"), [Guarantor] (the "Guarantor"), and State Street Bank and Trust
Company, as trustee under the indenture referred to below (the "Trustee").
Capitalized terms used herein and not defined herein shall have the meaning
ascribed to them in the Indenture (as defined below).
W I T N E S S E T H
WHEREAS, the Company has heretofore executed and delivered to the
Trustee an indenture (the "Indenture"), dated as of June 8, 1998, providing for
the issuance of an aggregate principal amount of $130,000,000 of 8 3/4% Senior
Notes due 2008 (the "Notes");
WHEREAS, Article 10 of the Indenture provides that under certain
circumstances the Company may or must cause certain of its subsidiaries to
execute and deliver to the Trustee a supplemental indenture pursuant to which
such subsidiaries shall unconditionally guarantee all of the Company's
Obligations under the Notes pursuant to a Subsidiary Guarantee on the terms and
conditions set forth herein; and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Company, the Guarantor and the Trustee mutually covenant and agree for the equal
and ratable benefit of the Holders of the Notes as follows:
1. Agreement to Guarantee. Subject to Section 10.05 of the Indenture,
each Guarantor hereby, jointly and severally, unconditionally guarantees to each
Holder of a Note authenticated and delivered by the Trustee and to the Trustee
and its successors and assigns, the Notes and the Obligations of the Company
under the Notes or under the Indenture, that: (a) the principal of, premium, if
any, interest and Liquidated Damages, if any, on the Notes will be promptly paid
in full when due, subject to any applicable grace period, whether at maturity,
by acceleration, redemption or otherwise, and interest on overdue principal,
premium, if any, (to the extent permitted by law) interest on any interest, if
any, and Liquidated Damages, if any, on the Notes and all other payment
Obligations of the Company to the Holders or the Trustee under the Indenture or
under the Notes will be promptly paid in full and performed, all in accordance
with the terms thereof; and (b) in case of any extension of time of payment or
renewal of any Notes or any of such other payment Obligations, the same will be
promptly paid in full when due or performed in accordance with the terms of the
extension or renewal, subject to any applicable grace period, whether at stated
maturity, by acceleration, redemption or otherwise. Failing payment when so due
of any amount so
D-1
<PAGE> 124
guaranteed or any performance so guaranteed for whatever reason, the Guarantors
will be jointly and severally obligated to pay the same immediately.
The obligations of the Guarantors to the Holders and to the Trustee
pursuant to this Supplemental Indenture and the Indenture are expressly set
forth in Article 10 of the Indenture, and reference is hereby made to such
Indenture for the precise terms of this Subsidiary Guarantee. The terms of
Article 10 of the Indenture are incorporated herein by reference. This
Subsidiary Guarantee is subject to release as and to the extent provided in
Section 10.04 of the Indenture.
This is a continuing Subsidiary Guarantee and shall remain in full
force and effect and shall be binding upon each Guarantor and its respective
successors and assigns to the extent set forth in the Indenture until full and
final payment of all of the Company's Obligations under the Notes and the
Indenture and shall inure to the benefit of the successors and assigns of the
Trustee and the Holders and, in the event of any transfer or assignment of
rights by any Holder or the Trustee, the rights and privileges herein conferred
upon that party shall automatically extend to and be vested in such transferee
or assignee, all subject to the terms and conditions hereof. This is a
Subsidiary Guarantee of payment and not a guarantee of collection.
Each Guarantor hereby waives diligence, presentment, demand of payment,
filing of claims with a court in the event of insolvency or bankruptcy of the
Company, any right to require a proceeding first against the Company, protest,
notice and all demands whatsoever and covenants that this Subsidiary Guarantee
will not be discharged except by complete performance of the Obligations
contained in the Notes and the Indenture.
This Subsidiary Guarantee shall not be valid or obligatory for any
purpose until the certificate of authentication on the Note upon which this
Subsidiary Guarantee is noted shall have been executed by the Trustee under the
Indenture by the manual signature of one of its authorized officers.
For purposes hereof, each Guarantor's liability shall be limited to the
lesser of (i) the aggregate amount of the Obligations of the Company under the
Notes and the Indenture and (ii) the amount, if any, which would not have (A)
rendered such Guarantor "insolvent" (as such term is defined in the Bankruptcy
Code and in the Debtor and Creditor Law of the State of New York) or (B) left
such Guarantor with unreasonably small capital at the time its Subsidiary
Guarantee of the Notes was entered into; provided that, it will be a presumption
in any lawsuit or other proceeding in which a Guarantor is a party that the
amount guaranteed pursuant to the Subsidiary Guarantee is the amount set forth
in clause (i) above unless any creditor, or representative of creditors of such
Guarantor, or debtor in possession or trustee in bankruptcy of such Guarantor,
or proves in such a lawsuit that the aggregate liability of the Guarantor is
limited to the amount set forth in clause (ii) above. The Indenture provides
that, in making any determination as to the solvency or sufficiency of capital
of a Guarantor in accordance with the previous sentence, the right of such
Guarantors to contribution from other Guarantors as set forth in the Indentures
and any other rights such Guarantors may have, contractual or otherwise, shall
be taken into account.
D-2
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2. No Recourse Against Others. No past, present or future director,
officer, employee, incorporator, partner, member, shareholder or agent of any
Guarantor, as such, shall have any liability for any obligations of the Company
or any Guarantor under the Notes, any Subsidiary Guarantees, the Indenture or
this Supplemental Indenture or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder by accepting a Note
waives and releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes.
3. New York Law to Govern. THE INTERNAL LAW OF THE STATE OF NEW YORK
SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE.
4. Counterparts. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
5. Effect of Headings. The Section headings herein are for convenience
only and shall not affect the construction hereof.
6. The Trustee. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this Supplemental
Indenture or for or in respect of the correctness of the recitals of fact
contained herein, all of which recitals are made solely by the New Guarantor.
D-3
<PAGE> 126
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.
Dated:
GULFMARK OFFSHORE, INC.
By:
-----------------------------
Name:
Title:
[GUARANTOR]
By:
-----------------------------
Name:
Title:
By:
------------------------------
Name:
Title:
By:
-----------------------------
Name:
Title:
STATE STREET BANK AND TRUST
COMPANY, as Trustee
By:
-----------------------------
Name:
Title:
D-4
<PAGE> 127
EXHIBITS
Exhibit A FORM OF NOTE
Exhibit B FORM OF CERTIFICATE OF TRANSFER
Exhibit C FORM OF CERTIFICATE OF EXCHANGE
Exhibit D FORM OF SUPPLEMENTAL INDENTURE
Exhibit E REGISTRATION RIGHTS AGREEMENT
<PAGE> 1
EXHIBIT 4.4
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made and
entered into as of June 8, 1998 by and among GulfMark Offshore, Inc., a
Delaware corporation (the "Company") and Lehman Brothers Inc., Chase Securities
Inc., Jefferies & Company, Inc. and The Robinson-Humphrey Company, LLC (the
"Initial Purchasers"), who have agreed to purchase the Company's 8 3/4% Senior
Notes due 2008 (the "Senior Notes") pursuant to and subject to the terms and
conditions of a certain Purchase Agreement, dated June 2, 1998 (the "Purchase
Agreement"), by and among the Company and the Initial Purchasers. In order to
induce the Initial Purchasers to purchase the Senior Notes, the Company has
agreed to provide the registration rights set forth in this Agreement. The
execution and delivery of this Agreement is a condition to the obligation of
the Initial Purchasers to purchase the Senior Notes pursuant to the Purchase
Agreement.
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have
the following meanings:
Advice: As defined in Section 6(d) hereof.
Affiliate: With respect to any specified person, "Affiliate" shall
mean any other person directly or indirectly controlling or controlled by or
under direct or indirect common control with such specified person. For the
purposes of this definition, "control," when used with respect to any person,
means 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 "affiliated," "controlling" and "controlled" have
meanings correlative to the foregoing.
Broker-Dealer: Any broker or dealer registered under the Exchange
Act.
Broker-Dealer Transfer Restricted Securities: New Senior Notes that
are acquired by a Broker-Dealer in the Exchange Offer in exchange for Senior
Notes that such Broker-Dealer acquired for its own account as a result of
market- making activities or other trading activities (other than Senior Notes
acquired directly from the Company or any of its Affiliates).
Business Day: Any day except a Saturday, Sunday or other day in the
City of New York, or in the city of the corporate trust office of the Trustee,
on which banks are authorized to close.
Closing Date: The date of this Agreement.
Commission: The Securities and Exchange Commission.
<PAGE> 2
Consummate: An Exchange Offer shall be deemed "Consummated" for
purposes of this Agreement upon the occurrence of (i) the filing and
effectiveness under the Securities Act of the Exchange Offer Registration
Statement relating to the New Senior Notes to be issued in the Exchange Offer,
(ii) the maintenance of such Exchange Offer Registration Statement continuously
effective and the keeping of the Exchange Offer open for a period not less than
the minimum period required pursuant to Section 3(b) hereof, and (iii) the
delivery by the Company to the Trustee under the Indenture of New Senior Notes
in the same aggregate principal amount as the aggregate principal amount of
Senior Notes that were tendered by Holders thereof pursuant to the Exchange
Offer.
Damages Payment Date: With respect to the Transfer Restricted
Securities, each Interest Payment Date.
Definitive Notes: As defined in the Indenture.
Effectiveness Target Date: As defined in Section 5.
Exchange Act: The Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
Exchange Offer: The registration by the Company under the Securities
Act of the New Senior Notes pursuant to an Exchange Offer Registration
Statement pursuant to which the Company offers the Holders of all outstanding
Transfer Restricted Securities the opportunity to exchange all such outstanding
Transfer Restricted Securities held by such Holders for New Senior Notes in an
aggregate principal amount equal to the aggregate principal amount of the
Transfer Restricted Securities tendered in such exchange offer by such Holders.
Exchange Offer Registration Statement: The Registration Statement
relating to the Exchange Offer, including the related Prospectus.
Exempt Resales: The transactions in which the Initial Purchasers
propose to sell the Senior Notes (a) to certain "qualified institutional
buyers," as such term is defined in Rule 144A under the Securities Act, and (b)
outside the United States to certain persons in reliance on Regulation S under
the Securities Act.
Global Note Holder: As defined in the Indenture.
Holders: As defined in Section 2(b) hereof.
Indemnified Party: As defined in Section 8(c) hereof.
Indemnifying Party: As defined in Section 8(c) hereof.
Indenture: The Indenture, dated as of the Closing Date, among the
Company and State Street Bank and Trust Company, as trustee (the "Trustee"),
pursuant to which the Notes are to be issued,
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<PAGE> 3
as such Indenture is amended or supplemented from time to time in accordance
with the terms thereof.
Initial Purchasers: As defined in the preamble hereto.
Interest Payment Date: As defined in the Indenture and the Notes.
NASD: National Association of Securities Dealers, Inc.
Notes: The Senior Notes and the New Senior Notes.
New Senior Notes: The Company's New 8 3/4% Senior Notes due 2008 to
be issued pursuant to the Indenture (i) in the Exchange Offer or (ii) upon the
request of any holder of Senior Notes covered by a Shelf Registration
Statement, in exchange for such Senior Notes.
Offering Memorandum: As defined in the Purchase Agreement.
Person: An individual, partnership, corporation, limited liability
Company, joint venture, association, joint- stock Company, trust or
unincorporated organization, or a government or agency or political subdivision
thereof or any other entity.
Prospectus: The prospectus included in a Registration Statement at
the time such Registration Statement is declared effective, as amended or
supplemented by any prospectus supplement and by all other amendments thereto,
including post-effective amendments, and all material incorporated by reference
into such Prospectus.
Record Holder: With respect to any Damages Payment Date relating to
Notes, each Person who is a Holder of Notes on the record date with respect to
the Interest Payment Date on which such Damages Payment Date shall occur.
Registration Default: As defined in Section 5 hereof.
Registration Statement: Any registration statement of the Company
relating to (a) an offering of New Senior Notes pursuant to an Exchange Offer
or (b) the registration for resale of Transfer Restricted Securities pursuant
to the Shelf Registration Statement, in each case (i) which is filed pursuant
to the provisions of this Agreement, and (ii) including the Prospectus included
therein, all amendments and supplements thereto (including post-effective
amendments) and all exhibits and material incorporated by reference therein.
Restricted Broker-Dealer: Any Broker-Dealer which holds Broker-Dealer
Transfer Restricted Securities.
Securities Act: The Securities Act of 1933, as amended, and the rules
and regulations promulgated thereunder.
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<PAGE> 4
Shelf Filing Deadline: As defined in Section 4 hereof.
Shelf Registration Statement: As defined in Section 4 hereof.
TIA: The Trust Indenture Act of 1939, as amended (15 U.S.C. Section
77aaa-77bbbb), as in effect on the date of the Indenture.
Transfer Restricted Securities: Each Senior Note, until the earliest
to occur of (a) the date on which such Senior Note is exchanged in the Exchange
Offer and entitled to be resold to the public by the Holder thereof without
complying with the prospectus delivery requirements of the Securities Act, (b)
the date on which such Senior Note has been effectively registered under the
Securities Act and disposed of in accordance with a Shelf Registration
Statement, (c) the date on which such Senior Note is distributed to the public
pursuant to Rule 144 or is saleable pursuant to Rule 144(k) under the
Securities Act and (d) the date on which such Senior Note is distributed by a
Broker-Dealer pursuant to the "Plan of Distribution" contemplated by the
Exchange Offer Registration Statement (including delivery of the Prospectus
contained therein).
Underwritten Registration or Underwritten Offering: A registration in
which securities of the Company are sold to an underwriter for reoffering to
the public.
SECTION 2. SECURITIES SUBJECT TO THIS AGREEMENT
(a) Transfer Restricted Securities. The securities entitled to
the benefits of this Agreement are the Transfer Restricted Securities.
(b) Holders of Transfer Restricted Securities. A Person is deemed
to be a holder of Transfer Restricted Securities (each, a "Holder") whenever
such Person owns Transfer Restricted Securities.
SECTION 3. REGISTERED EXCHANGE OFFER
(a) Unless the Exchange Offer shall not be permissible under
applicable law or Commission policy (after the procedures set forth in Section
6(a) below have been complied with), the Company shall (i) cause to be filed
with the Commission as soon as practicable after the Closing Date, but in no
event later than 60 days after the Closing Date, the Exchange Offer
Registration Statement under the Securities Act relating to the New Senior
Notes and the Exchange Offer, (ii) use its best efforts to cause such Exchange
Offer Registration Statement to become effective at the earliest possible time,
but in no event later than 150 days after the Closing Date, (iii) in connection
with the foregoing, (A) file all pre-effective amendments to such Exchange
Offer Registration Statement as may be necessary in order to cause such
Exchange Offer Registration Statement to become effective, (B) if applicable,
file a post-effective amendment to such Exchange Offer Registration Statement
pursuant to Rule 430A under the Securities Act and (C) cause all necessary
filings, if any, in connection with the registration and qualification of the
New Senior Notes to be made under the Blue Sky laws of such jurisdictions as
are necessary to permit Consummation of the
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<PAGE> 5
Exchange Offer and (iv) upon the effectiveness of such Exchange Offer
Registration Statement, commence and Consummate the Exchange Offer. The
Exchange Offer shall be on the appropriate form permitting registration of the
New Senior Notes to be offered in exchange for the Transfer Restricted
Securities and to permit sales of Broker-Dealer Transfer Restricted Securities
by Broker-Dealers as contemplated by Section 3(c) below.
(b) The Company shall use its best efforts to cause the Exchange
Offer Registration Statement to be effective continuously for a period of 180
days from the date on which the Exchange Offer Registration Statement is
declared effective and shall keep the Exchange Offer open for a period of not
less than the minimum period required under applicable federal and state
securities laws to Consummate the Exchange Offer; provided, however, that in no
event shall such period be less than twenty (20) Business Days. The Company
shall cause the Exchange Offer to comply with all applicable federal and state
securities laws. No securities other than the Notes shall be included in the
Exchange Offer Registration Statement. The Company shall use its best efforts
to cause the Exchange Offer to be Consummated on the earliest practicable date
after the Exchange Offer Registration Statement has become effective, but in no
event later than thirty (30) Business Days thereafter.
(c) The Company shall include a "Plan of Distribution" section in
the Prospectus contained in the Exchange Offer Registration Statement and
indicate that any Broker-Dealer who holds Senior Notes that are Transfer
Restricted Securities and that were acquired for the account of such
Broker-Dealer as a result of market-making activities or other trading
activities (other than Transfer Restricted Securities acquired directly from
the Company or one of its Affiliates) may exchange such Senior Notes pursuant
to the Exchange Offer; however, such Broker-Dealer may be deemed to be an
"underwriter" within the meaning of the Securities Act and must, therefore,
deliver a prospectus meeting the requirements of the Securities Act in
connection with its initial sale of the New Senior Notes received by such
Broker-Dealer in the Exchange Offer, which prospectus delivery requirement may
be satisfied by the delivery by such Broker-Dealer of the Prospectus contained
in the Exchange Offer Registration Statement. Such "Plan of Distribution"
section shall also contain all other information with respect to such resales
of Broker-Dealer Transfer Restricted Securities that the Commission may require
in order to permit such sales pursuant thereto but such "Plan of Distribution"
shall not name any such Broker-Dealer or disclose the amount of Notes held by
any such Broker-Dealer except to the extent required by the Commission as a
result of a change in policy after the date of this Agreement.
The Company shall use its best efforts to keep the Exchange Offer
Registration Statement continuously effective, supplemented and amended as
required by the provisions of Section 6(c) below to the extent necessary to
ensure that it is available for resales of Broker-Dealer Transfer Restricted
Securities acquired by Restricted Broker-Dealers and to ensure that it
conforms with the requirements of this Agreement, the Securities Act and the
policies, rules and regulations of the Commission as announced from time to
time, for a period of 180 days from the date on which the Exchange Offer
Registration Statement is declared effective.
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<PAGE> 6
The Company shall provide sufficient copies of the latest version of
such Prospectus to such Restricted Broker-Dealers promptly upon request at any
time during such 180 day period in order to facilitate such sales.
SECTION 4. SHELF REGISTRATION
(a) Shelf Registration. If (i) the Company is not required to
file an Exchange Offer Registration Statement or to consummate the Exchange
Offer because the Exchange Offer is not permitted by applicable law or
Commission policy (after the procedures set forth in Section 6(a) below have
been complied with) or (ii) if any Holder of Transfer Restricted Securities
shall notify the Company within twenty (20) Business Days of the Consummation
of the Exchange Offer that (A) such Holder is prohibited by applicable law or
Commission policy from participating in the Exchange Offer, or (B) such Holder
may not resell the New Senior Notes acquired by it in the Exchange Offer to the
public without delivering a prospectus and that the Prospectus contained in the
Exchange Offer Registration Statement is not appropriate or available for such
resales by such Holder, or (C) such Holder is a Broker-Dealer and holds Senior
Notes acquired directly from the Company or one of its Affiliates, then the
Company shall:
(x) cause to be filed a shelf registration statement
pursuant to Rule 415 under the Securities Act, which may be an
amendment to the Exchange Offer Registration Statement (in either
event, the "Shelf Registration Statement") on or prior to the earliest
to occur of (1) the 60th day after the date on which the Company
receives notice from the Commission or determines that it is not
required to file the Exchange Offer Registration Statement pursuant to
clause (i) above, (2) the 60th day after the date on which the Company
receives notice from a Holder of Transfer Restricted Securities as
contemplated by clause (ii) above, and (3) the 150th day after the
Closing Date (such earliest date being the "Shelf Filing Deadline"),
which Shelf Registration Statement shall provide for resales of all
Transfer Restricted Securities the Holders of which shall have
provided the information required pursuant to Section 4(b) hereof; and
(y) use its best efforts to cause such Shelf Registration
Statement to be declared effective by the Commission on or before the
60th day after the Shelf Filing Deadline.
The Company shall use its best efforts to keep such Shelf Registration
Statement continuously effective, supplemented and amended as required by and
subject to the provisions of Sections 6(b) and (c) hereof to the extent
necessary to ensure that it is available for sales of Transfer Restricted
Securities by the Holders thereof entitled to the benefit of this Section 4(a),
and to ensure that it conforms with the requirements of this Agreement, the
Securities Act and the policies, rules and regulations of the Commission as
announced from time to time, for a period of at least two years (as extended
pursuant to Section 6(c)(i)) following the date on which such Shelf
Registration Statement first becomes effective under the Securities Act or such
shorter period ending when all of the Transfer Restricted Securities available
for sale thereunder have been sold pursuant thereto.
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<PAGE> 7
(b) Provision by Holders of Certain Information in Connection with
the Shelf Registration Statement. No Holder of Transfer Restricted Securities
may include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Company in writing, within 20 Business Days after receipt of a request
therefor, such information as the Company may reasonably request for use in
connection with any Shelf Registration Statement or Prospectus or preliminary
Prospectus included therein. No Holder of Transfer Restricted Securities shall
be entitled to Liquidated Damages pursuant to Section 5 hereof unless and until
such Holder shall have provided all such reasonably requested information.
Each Holder as to which any Shelf Registration Statement is being effected
agrees to furnish promptly to the Company all information required to be
disclosed in order to make the information previously furnished to the Company
by such Holder not materially misleading.
SECTION 5. LIQUIDATED DAMAGES
If (i) any of the Registration Statements required by this Agreement
are not filed with the Commission on or prior to the date specified for such
filing in this Agreement, (ii) any of such Registration Statements have not
been declared effective by the Commission on or prior to the date specified for
such effectiveness in this Agreement (the "Effectiveness Target Date"), (iii)
the Exchange Offer has not been Consummated within 30 Business Days after the
Effectiveness Target Date with respect to the Exchange Offer Registration
Statement or (iv) any Registration Statement required by this Agreement is
filed and declared effective but shall thereafter cease to be effective or fail
to be usable for its intended purpose without being succeeded within 30 days by
a post-effective amendment to such Registration Statement, the effectiveness of
another Registration Statement or the use of the Prospectus (as amended or
supplemented) is again permitted that cures such failure (each such event
referred to in clauses (i) through (iv), a "Registration Default"), the Company
hereby agrees to pay Liquidated Damages to each Holder of Transfer Restricted
Securities with respect to the first 90-day period immediately following the
occurrence of such Registration Default, in an amount equal to $0.05 per week
per $1,000 principal amount of Transfer Restricted Securities held by such
Holder for each week or portion thereof that the Registration Default
continues. The amount of the Liquidated Damages shall increase by an
additional $0.05 per week per $1,000 in principal amount of Transfer Restricted
Securities with respect to each subsequent 90-day period until all Registration
Defaults have been cured, up to a maximum amount of Liquidated Damages of $0.50
per week per $1,000 principal amount of Transfer Restricted Securities. All
accrued Liquidated Damages shall be paid to the Global Note Holder by the
Company by wire transfer of immediately available funds or by federal funds
check and to Holders of Definitive Notes by wire transfer to the accounts
specified by them or by mailing checks to their registered addresses if no such
accounts have been specified on each Damages Payment Date, as provided in the
Indenture. Notwithstanding anything to the contrary set forth herein, (1) upon
filing of the Exchange Offer Registration Statement (and/or, if applicable, the
Shelf Registration Statement), in the case of (i) above, (2) upon the
effectiveness of the Exchange Offer Registration Statement (and/or, if
applicable, the Shelf Registration Statement), in the case of (ii) above, (3)
upon Consummation of the Exchange Offer, in the case of (iii) above, or (4)
upon the filing of a post-effective amendment to the Registration Statement or
an additional Registration Statement that causes the Exchange Offer
Registration Statement (and/or, if applicable, the Shelf Registration
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<PAGE> 8
Statement) to again be declared effective or the Prospectus to be made usable
in the case of (iv) above, the Liquidated Damages payable with respect to the
Transfer Restricted Securities as a result of such clause (i), (ii), (iii) or
(iv), as applicable, shall cease.
All obligations of the Company set forth in the preceding paragraph
that are outstanding with respect to any Transfer Restricted Security at the
time such security ceases to be a Transfer Restricted Security shall survive
until such time as all such obligations with respect to such security shall
have been satisfied in full.
SECTION 6. REGISTRATION PROCEDURES
(a) Exchange Offer Registration Statement. In connection with the
Exchange Offer, the Company shall comply with all applicable provisions of
Section 6(c) below, shall use its best efforts to effect such exchange to
permit the sale of Broker-Dealer Transfer Restricted Securities being sold in
accordance with the intended method or methods of distribution thereof (which
shall be in a manner consistent with the terms of this Agreement), and shall
comply with all of the following provisions:
(i) If, following the date hereof and prior to the
Consummation of the Exchange Offer, there has been published a change
in Commission policy with respect to exchange offers such as the
Exchange Offer, such that in the reasonable opinion of counsel to the
Company there is a substantial question as to whether the Exchange
Offer is permitted by applicable law or Commission policy, the Company
hereby agrees to seek a no- action letter or other favorable decision
from the Commission allowing the Company to Consummate an Exchange
Offer for such Senior Notes. The Company hereby agrees to pursue the
issuance of such a decision to the Commission staff level but shall
not be required to take commercially unreasonable action to effect a
change of Commission policy. The Company hereby agrees, however, to
take all such other actions as are reasonably requested by the
Commission or otherwise required in connection with the issuance of
such decision, including without limitation, to (A) participate in
telephonic conferences with the Commission, (B) deliver to the
Commission staff an analysis prepared by counsel to the Company
setting forth the legal bases, if any, upon which such counsel has
concluded that such an Exchange Offer should be permitted and (C)
diligently pursue a resolution (which need not be favorable) by the
Commission staff of such submission.
(ii) As a condition to its participation in the Exchange
Offer pursuant to the terms of this Agreement, each Holder of Transfer
Restricted Securities shall furnish, upon the request of the Company,
prior to the Consummation thereof, a written representation to the
Company (which may be contained in the letter of transmittal
contemplated by the Exchange Offer Registration Statement) to the
effect that (A) it is not an Affiliate of the Company, (B) it is not
engaged in, and does not intend to engage in, and has no arrangement
or understanding with any person to participate in, a distribution of
the New Senior Notes to be issued in the Exchange Offer and (C) it is
acquiring the New Senior Notes in its ordinary course of business. In
addition, all such Holders of Transfer Restricted Securities shall
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<PAGE> 9
otherwise reasonably cooperate in the Company's preparations for the
Exchange Offer. Each Holder hereby acknowledges and agrees that any
Broker-Dealer and any such Holder using the Exchange Offer to
participate in a distribution of the securities to be acquired in the
Exchange Offer (1) could not under Commission policy as in effect on
the date of this Agreement rely on the position of the Commission
enunciated in Morgan Stanley and Co., Inc. (available June 5, 1991)
and Exxon Capital Holdings Corporation (available May 13, 1988), as
interpreted in the Commission's letter to Sherman & Sterling dated
July 2, 1993, and similar no-action letters (including any no-action
letter obtained pursuant to clause (i) above), and (2) must comply
with the registration and prospectus delivery requirements of the
Securities Act in connection with a secondary resale transaction and
that such a secondary resale transaction should be covered by an
effective registration statement containing the selling security
holder information required by Item 507 or 508, as applicable, of
Regulation S-K if the resales are of New Senior Notes obtained by such
Holder in exchange for Senior Notes acquired by such Holder directly
from the Company or an Affiliate thereof.
(iii) Prior to effectiveness of the Exchange Offer
Registration Statement, the Company shall provide a supplemental
letter to the Commission (A) stating that the Company is registering
the Exchange Offer in reliance on the position of the Commission
enunciated in Exxon Capital Holdings Corporation (available May 13,
1988), Morgan Stanley and Co., Inc. (available June 5, 1991) and, if
applicable, any no-action letter obtained pursuant to clause (i)
above, (B) including a representation that the Company has not entered
into any arrangement or understanding with any Person to distribute
the New Senior Notes to be received in the Exchange Offer and that, to
the best of the Company's information and belief, each Holder
participating in the Exchange Offer is acquiring the New Senior Notes
in its ordinary course of business and has no arrangement or
understanding with any Person to participate in the distribution of
the New Senior Notes received in the Exchange Offer and (C) any other
undertaking or representation required by the Commission as set forth
in any no-action letter obtained pursuant to clause (i) above.
(b) Shelf Registration Statement. In connection with the Shelf
Registration Statement, the Company shall comply with all the provisions of
Section 6(c) below and shall use its best efforts to effect such registration
to permit the sale of the Transfer Restricted Securities being sold in
accordance with the intended method or methods of distribution thereof, and
pursuant thereto the Company will as expeditiously as possible, and in any
event within the time periods and otherwise in accordance with the provisions
hereof, prepare and file with the Commission a Registration Statement relating
to the registration on any appropriate form under the Securities Act, which
form shall be available for the sale of the Transfer Restricted Securities in
accordance with the intended method or methods of distribution thereof.
(c) General Provisions. In connection with any Registration
Statement and any Prospectus required by this Agreement to permit the sale or
resale of Transfer Restricted Securities (including, without limitation, any
Exchange Offer Registration Statement and the related Prospectus
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<PAGE> 10
required to permit resales of Transfer Restricted Securities by Restricted
Broker-Dealers), the Company shall:
(i) use its best efforts to keep such Registration
Statement continuously effective and provide all requisite financial
statements for the period specified in Section 3 or 4 of this
Agreement, as applicable; upon the occurrence of any event that would
cause any such Registration Statement or the Prospectus contained
therein (A) to contain a material misstatement or omission or (B) not
to be effective and usable for resale of Transfer Restricted
Securities during the period required by this Agreement, the Company
shall file promptly an appropriate amendment to such Registration
Statement, (1) in the case of clause (A), correcting any such
misstatement or omission, and (2) in the case of either clause (A) or
(B), use its best efforts to cause such amendment to be declared
effective and such Registration Statement and the related Prospectus
to become usable for their intended purpose(s) as soon as practicable
thereafter;
(ii) prepare and file with the Commission such amendments
and post-effective amendments to the Registration Statement as may be
necessary to keep the Registration Statement effective for the
applicable period set forth in Section 3 or 4 hereof, as applicable,
or such shorter period as will terminate when all Transfer Restricted
Securities covered by such Registration Statement have been sold;
cause the Prospectus to be supplemented by any required Prospectus
supplement, and as so supplemented to be filed pursuant to Rule 424
under the Securities Act, and to comply fully with the applicable
provisions of Rules 424, 430A and 462, as applicable under the
Securities Act in a timely manner; and comply with the provisions of
the Securities Act with respect to the disposition of all securities
covered by such Registration Statement during the applicable period in
accordance with the intended method or methods of distribution by the
sellers thereof set forth in such Registration Statement or supplement
to the Prospectus;
(iii) advise the underwriter(s), if any, and selling
Holders promptly and, if requested by such Persons, to confirm such
advice in writing, (A) when the Prospectus or any Prospectus supplement
or post-effective amendment thereto has been filed, and, with respect
to any Registration Statement or any post-effective amendment thereto,
when the same has become effective, (B) of any request by the
Commission for amendments to the Registration Statement or amendments
or supplements to the Prospectus or for additional information relating
thereto, (C) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement under the
Securities Act or of the suspension by any state securities commission
of the qualification of the Transfer Restricted Securities for offering
or sale in any jurisdiction, or the initiation of any proceeding for
any of the preceding purposes, (D) of the existence of any fact or the
happening of any event that makes any statement of a material fact made
in the Registration Statement, the Prospectus, any amendment or
supplement thereto, or any document incorporated by reference therein
untrue in any material respect, or that requires the making of any
additions to or changes in the Registration Statement or the Prospectus
in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. If at any time the
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<PAGE> 11
Commission shall issue any stop order suspending the effectiveness of
the Registration Statement, or any state securities commission or
other regulatory authority shall issue an order suspending the
qualification or exemption from qualification of the Transfer
Restricted Securities under state securities or Blue Sky laws, the
Company shall use its best efforts to obtain the withdrawal or lifting
of such order at the earliest practicable time;
(iv) upon written request, furnish to the Initial
Purchasers, and, upon written request, to each of the selling Holders
and each of the underwriter(s) in connection with such sale, if any,
before filing with the Commission, copies of any Registration
Statement or any Prospectus included therein or any amendments or
supplements to any such Registration Statement or Prospectus, which
documents will be subject to the review of such Holders and
underwriter(s) in connection with such sale, if any, for a period of
at least five Business Days, and the Company will not file any such
Registration Statement or Prospectus or any amendment or supplement to
any such Registration Statement or Prospectus to which a selling
Holder of Transfer Restricted Securities covered by such Registration
Statement or the underwriter(s) in connection with such sale, if any,
shall reasonably object within five Business Days after the receipt
thereof. A selling Holder or underwriter in connection with such
sale, if any, shall be deemed to have reasonably objected to such
filing (A) if such Registration Statement, amendment, Prospectus or
supplement, as applicable, as proposed to be filed, contains a
material misstatement or omission or fails to comply with the
applicable requirements of the Securities Act or (B) if any of the
information furnished to the Company by such selling Holder or
underwriter in connection with such sale, if any, and included in such
Registration statement, amendment, Prospectus or supplement, as
applicable, as proposed to be filed is incorrect in any respect;
(v) upon written request, promptly prior to the filing of
any document that is to be incorporated by reference into a
Registration Statement or Prospectus, provide copies of such document
to the selling Holders and to the underwriter(s) in connection with
such sale, if any, make the Company's representatives available for
discussion of such document and other customary due diligence matters,
and include such information in such document prior to the filing
thereof as such selling Holders or underwriters, if any, reasonably
may request;
(vi) in the case of a shelf registration, make available
at reasonable times for inspection by the selling Holders, any
underwriter participating in any disposition pursuant to such
Registration Statement, and any attorney or accountant retained by
such selling Holders or any of the underwriter(s), all relevant
financial and other records, pertinent corporate documents and
properties of the Company and cause the Company's officers, directors
and employees to supply all information reasonably requested by any
such Holder, underwriter, attorney or accountant in connection with
such Registration Statement or any post-effective amendment thereto
subsequent to the filing thereof and prior to its effectiveness;
provided, however, that such persons shall first agree in writing with
the Company that any information that is reasonably and in good faith
designated by the Company in writing as confidential at the time of
delivery of such information shall be kept confidential by such
persons, unless (i) disclosure of such information is required by
court
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<PAGE> 12
or administrative order or is necessary to respond to inquiries of
regulatory authorities, (ii) disclosure of such information is
required by law (including any disclosure requirements pursuant to
Federal securities laws in connection with the filing of the Shelf
Registration Statement or the use of any Prospectus), (iii) such
information becomes generally available to the public other than as a
result of a disclosure or failure to safeguard such information by
such person or (iv) such information becomes available to such person
from a source other than the Company and its subsidiaries and such
source is not bound by a confidentiality agreement; and provided,
further, that the foregoing inspection and information gathering shall
be coordinated on behalf of the Initial Purchasers by Lehman Brothers
Inc., and on behalf of any other persons, by one counsel designated by
and on behalf of such other persons;
(vii) if requested by any selling Holders or the
underwriter(s) in connection with such sale, if any, promptly
incorporate in any Registration Statement or Prospectus, pursuant to a
supplement or post-effective amendment if necessary, such information
as such selling Holders and underwriter(s), if any, may reasonably
request to have included therein, including, without limitation,
information relating to the "Plan of Distribution" of the Transfer
Restricted Securities, information with respect to the principal
amount of Transfer Restricted Securities being sold to such
underwriter(s), the purchase price being paid therefor and any other
terms of the offering of the Transfer Restricted Securities to be sold
in such offering; and make all required filings of such Prospectus
supplement or post-effective amendment as soon as practicable after
the Company is notified of the matters to be incorporated in such
Prospectus supplement or post-effective amendment;
(viii) cause the Transfer Restricted Securities covered by
the Registration Statement to be rated with the appropriate rating
agencies, if so requested by the Holders of a majority in aggregate
principal amount of Notes covered thereby or the underwriter(s) in
connection with such sale, if any, unless such Transfer Restricted
Securities are already so rated;
(ix) furnish to each selling Holder and each of the
underwriter(s) in connection with such sale, if any, without charge,
at least one copy of the Registration Statement, as first filed with
the Commission, and of each amendment thereto, including all documents
incorporated by reference therein and all exhibits (including exhibits
incorporated therein by reference);
(x) deliver to each selling Holder and each of the
underwriter(s), if any, without charge, as many copies of the
Prospectus (including each preliminary prospectus) and any amendment
or supplement thereto as such Persons reasonably may request; the
Company hereby consents to the use of the Prospectus and any amendment
or supplement thereto by each of the selling Holders and each of the
underwriter(s), if any, in connection with the offering and the sale
of the Transfer Restricted Securities covered by the Prospectus or any
amendment or supplement thereto;
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<PAGE> 13
(xi) enter into such agreements (including an underwriting
agreement), and make such representations and warranties with respect
to the business of the Company as are customarily addressed in
representations and warranties made by issuers to underwriters in
underwritten offerings, and take all such other actions in connection
therewith in order to expedite or facilitate the disposition of the
Transfer Restricted Securities pursuant to any Registration Statement
contemplated by this Agreement, all to such extent as may be
reasonably requested by the Initial Purchasers or by any Holder of
Transfer Restricted Securities or underwriter in connection with any
sale or resale pursuant to any Registration Statement contemplated by
this Agreement; and whether or not an underwriting agreement is
entered into and whether or not the registration is an Underwritten
Registration, the Company shall:
(A) furnish to each Initial Purchaser, each
selling Holder and each underwriter, if any, in such substance
and scope as they may reasonably request and as are
customarily made by issuers to underwriters in primary
underwritten offerings, upon the date of the Consummation of
the Exchange Offer and, if applicable, the effectiveness of
the Shelf Registration Statement:
(1) a certificate, dated the date of Consummation
of the Exchange Offer or the date of effectiveness of the
Shelf Registration Statement, as the case may be, signed on
behalf of the Company by the Chairman of the Board, President
or any Vice President and Treasurer or Chief Financial Officer
of the Company, confirming, as of the date thereof, the
matters set forth in paragraph (g) of Section 7 of the
Purchase Agreement and such other matters as such parties may
reasonably request;
(2) opinions, dated the date of Consummation of
the Exchange Offer or the date of effectiveness of the Shelf
Registration Statement, as the case may be, of counsel or
counsels for the Company and its Principal Subsidiaries (as
defined in the Purchase Agreement), covering the matters set
forth in paragraphs (c) and (d) of Section 7 of the Purchase
Agreement and such other matter as such parties may reasonably
request, and in any event including a statement to the effect
that such counsel for the Company has participated in
conferences with officers and other representatives of the
Company, representatives of the independent public accountants
for the Company and representatives of and counsel to the
Initial Purchasers at which the contents of such Registration
Statement and the related Prospectus were discussed and,
although such counsel is not passing upon and does not assume
any responsibility for the accuracy, completeness or fairness
of the statements contained therein (except as specifically
stated in such opinion), on the basis of the foregoing, no
facts have come to the attention of such counsel that have
caused such counsel to believe that the applicable
Registration Statement, at the time such Registration
Statement or any post-effective amendment thereto became
effective, and, in the case of the Exchange Offer Registration
Statement, as of the date of Consummation, contained an untrue
statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the
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<PAGE> 14
statements therein, in light of the circumstances under which
they were made, not misleading, or that the Prospectus
contained in such Registration Statement as of its date and,
in the case of the opinion dated the date of Consummation of
the Exchange Offer, as of the date of Consummation, contained
an untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements
therein, in light of the circumstances under which they were
made, not misleading (it being understood that such counsel
need make no comment as to the financial statements and
related statistical or financial information and schedules
included in any Registration Statement contemplated by this
Agreement or the related Prospectus); and
(3) customary comfort letters, dated as of the
date of Consummation of the Exchange Offer or the date of
effectiveness of the Shelf Registration Statement, as the case
may be, from the Company's independent accountants, in the
customary form and covering matters of the type customarily
covered in comfort letters by underwriters in connection with
Underwritten Offerings, and affirming the matters set forth in
the comfort letters delivered pursuant to Section 7(e) and (f)
of the Purchase Agreement, without exception;
(B) set forth in full or incorporate by reference
in the underwriting agreement, if any, the indemnification
provisions and procedures of Section 8 hereof with respect to
all parties to be indemnified pursuant to said Section; and
(C) deliver such other documents and certificates
as may be reasonably requested by such parties to evidence
compliance with clause (A) above and with any customary
conditions contained in the underwriting agreement or other
agreement entered into by the Company pursuant to this clause
(xi), if any.
The above shall be done at each closing under such
underwriting or similar agreement, as and to the extent required
thereunder, and, if at any time the representations and warranties of
the Company contemplated in clause (A)(1) above cease to be true and
correct in any material respect, the Company shall so advise the
Initial Purchasers and the underwriter(s), if any, each selling Holder
and each Restricted Broker-Dealer promptly and, if requested by such
Persons, shall confirm such advice in writing;
(xii) prior to any public offering of Transfer Restricted
Securities, cooperate with the selling Holders, the underwriter(s), if
any, and its counsel in connection with the registration and
qualification of the Transfer Restricted Securities under the
securities or Blue Sky laws of such jurisdictions as the selling
Holders or underwriter(s), if any, may request and do any and all
other acts or things necessary or advisable to enable the disposition
in such jurisdictions of the Transfer Restricted Securities covered by
the applicable Registration Statement; provided, however, that the
Company shall not be required to register or qualify as a foreign
corporation where it is not now so qualified or to take any action
that would subject it to the service of process in suits or to
taxation, other
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<PAGE> 15
than as to matters and transactions relating to the Registration
Statement, in any jurisdiction where it is not now so subject;
(xiii) shall issue, upon the request of any Holder of Senior
Notes covered by any Shelf Registration Statement contemplated by this
Agreement, New Senior Notes, having an aggregate principal amount
equal to the aggregate principal amount of the Senior Notes
surrendered to the Company by such Holder in exchange therefor or
being sold by such Holder; such New Senior Notes to be registered in
the name of such Holder or in the name of the purchaser(s) of such
Notes, as the case may be; in return, the Senior Notes held by such
Holder shall be surrendered to the Company for cancellation;
(xiv) cooperate with the selling Holders and the
underwriter(s), if any, to facilitate the timely preparation and
delivery of certificates representing Transfer Restricted Securities
to be sold and not bearing any restrictive legends; and enable such
Transfer Restricted Securities to be in such denominations and
registered in such names as the Holders or the underwriter(s), if any,
may request at least two Business Days prior to any sale of Transfer
Restricted Securities made by such underwriter(s);
(xv) use its best efforts to cause the disposition of the
Transfer Restricted Securities covered by the Registration Statement
to be registered with or approved by such other governmental agencies
or authorities as may be necessary to enable the seller or sellers
thereof or the underwriter(s), if any, to consummate the disposition
of such Transfer Restricted Securities, subject to the proviso
contained in clause (xii) above;
(xvi) subject to Section 6(c)(i), if any fact or event
contemplated by clause 6(c)(iii)(D) above shall exist or have
occurred, prepare a supplement or post-effective amendment to the
Registration Statement or related Prospectus or any document
incorporated therein by reference or file any other required document
so that, as thereafter delivered to the purchasers of Transfer
Restricted Securities, the Prospectus will not contain 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;
(xvii) provide a CUSIP number for all Transfer Restricted
Securities not later than the effective date of the Registration
Statement covering such Transfer Restricted Securities and provide the
Trustee under the indenture with printed certificates for the Transfer
Restricted Securities which are in a form eligible for deposit with
the Depositary Trust Company;
(xviii) cooperate and assist in any filings required to be
made with the NASD and in the performance of any due diligence
investigation by any underwriter (including any "qualified independent
underwriter" that is required to be retained in accordance with the
rules and regulations of the NASD), and use its best efforts to cause
such Registration Statement to become effective and approved by such
governmental agencies or authorities
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<PAGE> 16
as may be necessary to enable the Holders selling Transfer Restricted
Securities to consummate the disposition of such Transfer Restricted
Securities;
(xix) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make generally
available to its security holders, as soon as practicable, a
consolidated earnings statement meeting the requirements of Rule 158
(which need not be audited) for the twelve-month period (A) commencing
at the end of any fiscal quarter in which Transfer Restricted
Securities are sold to underwriters in a firm or best efforts
Underwritten Offering or (B) if not sold to underwriters in such an
offering, beginning with the first month of the Company's first fiscal
quarter commencing after the effective date of the Registration
Statement;
(xx) cause the Indenture to be qualified under the TIA not
later than the effective date of the first Registration Statement
required by this Agreement, and, in connection therewith, cooperate
with the Trustee and the Holders of Notes to effect such changes to
the Indenture as may be required for such Indenture to be so qualified
in accordance with the terms of the TIA; and execute and use its best
efforts to cause the Trustee to execute, all documents that may be
required to effect such changes and all other forms and documents
required to be filed with the Commission to enable such Indenture to
be so qualified in a timely manner;
(xxi) cause all Transfer Restricted Securities covered by
the Registration Statement to be listed on each securities exchange on
which similar securities issued by the Company are then listed if
requested by the Holders of a majority in aggregate principal amount
of Senior Notes or the managing underwriter(s), if any; and
(xxii) provide promptly to each Holder upon request each
document filed with the Commission pursuant to the requirements of
Section 13 and Section 15(d) of the Exchange Act.
(d) Restrictions on Holders. (i) Each Holder agrees by
acquisition of a Transfer Restricted Security that, upon receipt of the notice
referred to in Section 6(c)(i) or any notice from the Company of the existence
of any fact of the kind described in Section 6(c)(iii)(D) hereof, such Holder
will forthwith discontinue disposition of Transfer Restricted Securities
pursuant to the applicable Registration Statement until such Holder's receipt
of the copies of the supplemented or amended Prospectus contemplated by Section
6(c)(xvi) hereof, or until it is advised in writing (the "Advice") by the
Company that the use of the Prospectus may be resumed, and has received copies
of any additional or supplemental filings that are incorporated by reference in
the Prospectus. If so directed by the Company, each Holder will deliver to the
Company (at the Company's expense) all copies, other than permanent file copies
then in such Holder's possession, of the Prospectus covering such Transfer
Restricted Securities that was current at the time of receipt of such notice.
In the event the Company shall give any such notice, the time period regarding
the effectiveness of such Registration Statement set forth in Section 3 or 4
hereof, as applicable, shall be extended by the number of days during the
period from and including the date of the giving of such notice pursuant
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<PAGE> 17
to Section 6(c)(i) or Section 6(c)(iii)(D) hereof to and including the date
when each selling Holder covered by such Registration Statement shall have
received the copies of the supplemented or amended Prospectus contemplated by
Section 6(c)(xvi) hereof or shall have received the Advice.
(ii) The Company may require a Holder of Transfer Restricted
Securities to be included in a Registration Statement to furnish to the Company
such information as required by law to be disclosed by such Holder in such
Registration Statement, and the Company may exclude from such Registration
Statement the Transfer Restricted Securities of any Holder who unreasonably
fails to furnish such information within a reasonable time after receiving such
request.
SECTION 7. REGISTRATION EXPENSES
All expenses incident to the Company's performance of or compliance
with this Agreement will be borne by the Company, regardless of whether a
Registration Statement becomes effective, including, without limitation: (i)
all registration and filing fees and expenses (including filings made by any
Initial Purchaser or Holder with the NASD (and, if applicable, the fees and
expenses of any "qualified independent underwriter") and its counsel that may
be required by the rules and regulations of the NASD); (ii) all fees and
expenses of compliance with federal securities and state Blue Sky or securities
laws; (iii) all expenses of printing (including printing certificates for the
New Senior Notes to be issued in the Exchange Offer and printing of
Prospectuses); (iv) all fees and disbursements of counsel for the Company; (v)
all messenger and delivery services and telephone expenses of the Company; (vi)
all application and filing fees in connection with listing Notes on a national
securities exchange or automated quotation system pursuant to the requirements
hereof; and (vii) all fees and disbursements of independent certified public
accountants of the Company (including the expenses of any special audit and
comfort letters required by or incident to such performance).
The Company will, in any event, bear its internal expenses (including,
without limitation, all salaries and expenses of any of its officers and
employees performing legal or accounting duties), the expenses of any annual
audit and the fees and expenses of any Person, including special experts,
retained by the Company.
SECTION 8. INDEMNIFICATION
(a) The Company, jointly and severally, shall indemnify and hold
harmless each Holder, its directors, officers and employees and each person, if
any, who controls such Holder within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, damages, liabilities, judgments and actions, joint or several,
or any action in respect thereof (including, but not limited to, any loss,
claim, damage, liability, judgment or action relating to purchases and sales of
Notes), to which that Holder, its directors, officers, employees or controlling
persons may become subject, under the Securities Act or otherwise, insofar as
such loss, claim, damage, liability, judgment or action arises out of, or is
based upon, (i) any untrue statement or alleged untrue statement of a material
fact contained in any Registration Statement, Preliminary Prospectus or
Prospectus or in any amendment or supplement thereto or (ii) the omission or
alleged omission to state in any Registration Statement, Preliminary Prospectus
or Prospectus, or in any
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<PAGE> 18
amendment or supplement thereto, any material fact required to be stated
therein or necessary to make the statements therein not misleading, and shall
reimburse such Holder and each such director, officer, employee or controlling
person promptly upon demand for any legal or other expenses reasonably incurred
by such Holder, director, officer, employee or controlling person in connection
with investigating or defending or preparing to defend against any such loss,
claim, damage, liability, judgment or action as such expenses are incurred;
provided, however, that the Company shall not be liable in any such case to the
extent that any such loss, claim, damage, liability, judgment or action arises
out of, or is based upon, any untrue statement or alleged untrue statement or
omission or alleged omission made in any Registration Statement, Preliminary
Prospectus or Prospectus, or in any such amendment or supplement in reliance
upon and in conformity with written information concerning such Holder
furnished to the Company by or on behalf of such Holder specifically for
inclusion therein; provided further, that the indemnity agreement provided in
this Section 8(a) with respect to any Preliminary Prospectus shall not inure to
the benefit of any Holder in any case in which a subsequent purchaser asserts
that its losses, claims, damages, liabilities, or actions was based upon any
untrue statement or alleged untrue statement of material fact or omission or
alleged omission to state therein a material fact in the Preliminary
Prospectus, if a copy of the Prospectus in which such untrue statement or
alleged untrue statement or omission or alleged omission was corrected had not
been sent or given to such subsequent purchaser by such Holder, provided that
the Company delivered such Prospectus to such Holder in requisite quantity and
on a timely basis to permit such delivery or sending. The foregoing indemnity
agreement is in addition to any liability which the Company may otherwise have
to any Holder or to any director, officer, employee or controlling person of
such Holder.
(b) Each Holder, severally and not jointly, shall indemnify and
hold harmless the Company, and its directors, officers and employees and each
person, if any, who controls the Company within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act, from and against any and
all losses, claims, damages, liabilities, judgments or actions, joint or
several, or any action in respect thereof, to which the Company, or any such
director, officer or controlling person may become subject, under the
Securities Act or otherwise, insofar as such loss, claim, damage, liability,
judgment or action arises out of, or is based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained in any Registration
Statement, Preliminary Prospectus or Prospectus or in any amendment or
supplement thereto or (ii) the omission or alleged omission to state in any
Registration Statement, Preliminary Prospectus or Prospectus, or in any
amendment or supplement thereto, any material fact required to be stated
therein or necessary to make the statements therein not misleading, but in each
case only to the extent that the untrue statement or alleged untrue statement
or omission or alleged omission was made in reliance upon and in conformity
with written information concerning such Holder furnished to the Company by or
on behalf of such Holder specifically for inclusion therein, and shall
reimburse the Company and any such director, officer or controlling person for
any legal or other expenses reasonably incurred by the Company, or any such
director, officer or controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage,
liability, judgment or action as such expenses are incurred. The foregoing
indemnity agreement is in addition to any liability which any Holder may
otherwise have to the Company, or any such director, officer, employee or
controlling person.
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<PAGE> 19
(c) Promptly after receipt by any person in respect of which
indemnity may be sought pursuant to Section 8(a) or 8(b) (the "indemnified
party") of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against
any person against whom indemnity may be sought pursuant to Section 8(a) or
8(b) (the "indemnifying party"), notify the indemnifying party in writing of
the claim or the commencement of that action; provided, however, that the
failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 8 except to the extent it has
been materially prejudiced by such failure and, provided further, that the
failure to notify the indemnifying party shall not relieve it from any
liability which it may have to an indemnified party otherwise than under this
Section 8. If any such claim or action shall be brought against an indemnified
party, and it shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party, to assume
the defense thereof with counsel reasonably satisfactory to the indemnified
party and the payment of all fees and expenses of such counsel shall be the
responsibility of the indemnifying party. After notice from the indemnifying
party to the indemnified party of its election to assume the defense of such
claim or action, the indemnifying party shall not be liable to the indemnified
party under this Section 8 for any legal or other expenses subsequently
incurred by the indemnified party in connection with the defense thereof other
than reasonable costs of investigation. In addition, an indemnified party
shall have the right to employ separate counsel in any such action and
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of the indemnified party unless (i) the employment of
such counsel shall have been specifically authorized in writing by the
indemnifying party, (ii) the indemnifying party shall have failed to assume the
defense of such action or employ counsel reasonably satisfactory to the
indemnified party or (iii) the named parties to any such action (including any
impleaded parties) include both the indemnified party and the indemnifying
party, and the indemnified party shall have been advised by such counsel that
there may be one or more legal defenses available to it which are different
from or additional to those available to the indemnifying party (in which case
the indemnifying party shall not have the right to assume the defense of such
action on behalf of the indemnified party). In any such case, the indemnifying
party shall not, in connection with any one action or separate but
substantially similar or related actions in the same jurisdiction arising out
of the same general allegations or circumstances, be liable for the fees and
expenses of more than one separate firm of attorneys (in addition to any local
counsel) of all indemnified parties, and all such fees and expenses shall be
reimbursed as they are incurred. Such firm shall be designated in writing by
Lehman Brothers Inc. in the case of the parties indemnified pursuant to Section
8(a) and by the Company, in the case of parties indemnified pursuant to Section
8(b). No indemnifying party shall (i) without the prior written consent of the
indemnified parties (which consent shall not be unreasonably withheld), 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, or (ii) be liable for any settlement of any such action
effected without its written consent (which consent shall not be unreasonably
withheld), but if settled with the consent of the indemnifying party or if
there be a final judgment
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<PAGE> 20
of the plaintiff in any such action, the indemnifying party agrees to indemnify
and hold harmless any indemnified party from and against any loss or liability
by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 8 shall
for any reason be unavailable or insufficient to hold harmless an indemnified
party under Section 8(a) or 8(b) in respect of any loss, claim, damage,
liability, judgment or any action in respect thereof, referred to therein, then
each indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage, liability, judgment or action in respect thereof,
(i) in such proportion as shall be appropriate to reflect the relative benefits
received by the Company, on the one hand, and the Holders, on the other, from
the offering of the Notes or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company, on the one hand, and the Holders, on
the other, with respect to the statements or omissions which resulted in such
loss, claim, damage, liability, judgment or action in respect thereof, as well
as any other relevant equitable considerations. The relative benefits received
by the Company, on the one hand, and the Holders, on the other, with respect to
such offering shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Senior Notes purchased under the Purchase
Agreement (before deducting expenses) received by the Company as set forth in
the table on the cover page of the Offering Memorandum, on the one hand, and
the total net proceeds received by such Holder upon its resale of Notes less
the amount paid by such Holder for such Notes, on the other hand, bear to the
total sum of such amounts. The relative fault shall be determined by reference
to whether the untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Company or such Holder, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company and the Holders agree that it would
not be just and equitable if contributions pursuant to this Section 8 were to
be determined by pro rata allocation or by any other method of allocation which
does not take into account the equitable considerations referred to herein.
The amount paid or payable by an indemnified party as a result of the loss,
claim, damage, liability, judgment or action in respect thereof, referred to
above in this Section 8 shall be deemed to include, for purposes of this
Section 8(d), any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 8(d), no Holder, and
none of its directors, officers, employees or controlling persons, shall be
required to contribute, in the aggregate, any amount in excess of the amount by
which the total net proceeds received by such Holder upon its resale of Notes
exceeds the sum of the amount paid by such Holder for such Notes and the amount
of any damages which such Holder has otherwise paid or become liable to pay by
reason of any untrue or alleged untrue statement or omission or alleged
omission. 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. The
Holders' obligations to contribute as provided in this Section 8(d) are several
in proportion to the respective principal amount of Notes held by each of the
Holders hereunder and not joint.
-20-
<PAGE> 21
(e) The remedies provided for in this Section 8 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity.
SECTION 9. RULE 144A
The Company hereby agrees with each Holder, for so long as any
Transfer Restricted Securities remain outstanding and during any period in
which the Company is subject to Section 13 or 15(d) of the Exchange Act, to
make available to any Holder or beneficial owner of Transfer Restricted
Securities in connection with any sale thereof and any prospective purchaser of
such Transfer Restricted Securities from such Holder or beneficial owner, the
information required by Rule 144A(d)(4) under the Securities Act in order to
permit resales of such Transfer Restricted Securities pursuant to Rule 144A.
Notwithstanding the foregoing, nothing in this Section 9 shall be deemed to
require the Company to register any of its securities pursuant to the Exchange
Act.
SECTION 10. PARTICIPATION IN UNDERWRITTEN REGISTRATION
No Holder may participate in any Underwritten Registration hereunder
unless such Holder (a) agrees to sell such Holder's Transfer Restricted
Securities on the basis provided in any underwriting arrangements approved by
the Persons entitled hereunder to approve such arrangements and (b) completes
and executes all reasonable questionnaires, powers of attorney, indemnities,
underwriting agreements, lock-up letters and other documents required under the
terms of such underwriting arrangements.
SECTION 11. SELECTION OF UNDERWRITERS
For any Underwritten Offering, the investment banker or investment
bankers and manager or managers that will administer such offering will be
selected by the Holders of a majority in aggregate principal amount of the
Transfer Restricted Securities included in such offering; provided, that such
investment bankers and managers must be reasonably satisfactory to the Company.
Such investment bankers and managers are referred to herein as the
"underwriters."
SECTION 12. MISCELLANEOUS
(a) Remedies. Each Holder, in addition to being entitled to
exercise all rights provided herein, in the Indenture, the Purchase Agreement
or granted by law, including recovery of liquidated or other damages, will be
entitled to specific performance of its rights under this Agreement. The
Company agrees that monetary damages (including the Liquidated Damages
contemplated hereby) would not be adequate compensation for any loss incurred
by reason of a breach by them of the provisions of this Agreement and hereby
agree to waive the defense in any action for specific performance that a remedy
at law would be adequate.
(b) No Inconsistent Agreements. The Company will not on or after
the date of this Agreement, enter into any agreement with respect to its
securities that is inconsistent with the rights granted to the Holders in this
Agreement or otherwise conflicts with the provisions hereof. The
-21-
<PAGE> 22
Company is not currently bound by any agreement granting registration rights
with respect to its securities that conflicts with the registration rights set
forth herein.
(c) Adjustments Affecting the Notes. The Company will not take
any action, or permit any change to occur, with respect to the Notes that would
materially and adversely affect the ability of the Holders to Consummate any
Exchange Offer.
(d) Amendments and Waivers. The provisions of this Agreement may
not be amended, modified or supplemented, and waivers or consents to or
departures from the provisions hereof may not be given unless (i) in the case
of Section 5 hereof and this Section 12(d), the Holders of all outstanding
Transfer Restricted Securities and (ii) in the case of all other provisions
hereof, the Company has obtained the written consent of Holders of a majority
of the outstanding principal amount of Transfer Restricted Securities.
Notwithstanding the foregoing, a waiver or consent to departure from the
provisions hereof that relates exclusively to the rights of Holders whose
securities are being tendered pursuant to the Exchange Offer and that does not
affect directly or indirectly the rights of other Holders whose securities are
not being tendered pursuant to such Exchange Offer may be given by the Holders
of a majority of the outstanding principal amount of Transfer Restricted
Securities being tendered or registered.
(e) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier, or air
courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the
records of the Registrar under the Indenture, with a copy to the
Registrar under the Indenture; and
With a copy to:
Lehman Brothers Inc.
3 World Financial Center
New York, New York 10285-1600
Attention: Syndicate Registration
Telecopy No.: (212) 528-8822
(ii) if to the Initial Purchasers, to the Initial
Purchasers' address specified in Section 12(a) of the Purchase
Agreement.
-22-
<PAGE> 23
(iii) if to the Company:
GulfMark Offshore, Inc.
5 Post Oak Park, Suite 1170
Houston, Texas 77027
Telephone No.: (713) 963-9522
Attention: Secretary
All such 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 telecopied; and on the
next Business Day, if timely delivered to an air courier guaranteeing overnight
delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.
(f) 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 limitation and without the need for an express
assignment, subsequent Holders of Transfer Restricted Securities; provided,
however, that nothing herein shall be deemed to permit any assignment, transfer
or other disposition of Transfer Restricted Securities in violation of the
terms hereof or of the Purchase Agreement or the Indenture. If any transferee
of any Holder shall acquire Transfer Restricted Securities in any manner,
whether by operation of law or otherwise, such Transfer Restricted Securities
shall be held subject to all of the terms of this Agreement, and by owning and
holding such Transfer Restricted Securities such person shall be conclusively
deemed to have agreed to be bound by and to perform all of the terms and
provisions of this Agreement, including the restrictions on resale set forth in
this Agreement and, if applicable, the Purchase Agreement, and such Person
shall be entitled to receive the benefits hereof.
(g) 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.
(h) Headings. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, AS
APPLIED TO CONTRACTS MADE AND PERFORMED ENTIRELY WITHIN THE STATE OF NEW YORK.
-23-
<PAGE> 24
(j) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable by a court of competent jurisdiction,
the validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions contained herein shall not be affected
or impaired thereby.
(k) Entire Agreement. This Agreement is intended by the parties
as a final expression of their agreement and intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein with respect to the registration rights granted by the Company with
respect to the Transfer Restricted Securities. This Agreement supersedes all
prior agreements and understandings between the parties with respect to such
subject matter.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
GULFMARK OFFSHORE, INC.
By: /s/ FRANK R. PIERCE
--------------------------------
Name: Frank R. Pierce
Title: Executive Vice President
LEHMAN BROTHERS INC.
CHASE SECURITIES INC.
JEFFERIES & COMPANY, INC.
THE ROBINSON-HUMPHREY COMPANY
By: LEHMAN BROTHERS INC.
By: /s/ JAMIE SAXTON
--------------------------------
Authorized Representative
<PAGE> 1
EXHIBIT 5.1
[GRIGGS & HARRISON, P.C. LETTERHEAD]
July 20, 1998
980252
Board of Directors
GulfMark Offshore, Inc.
5 Post Oak Park, Suite 1170
Houston, Texas 77027
Re: 8.75% Senior Notes due 2008
Gentlemen:
Reference is made to (i) the proposed issuance under the Securities
Act of 1933, as amended (the "Securities Act") by GulfMark Offshore, Inc., a
Delaware corporation (the "Company"), of up to $130,000,000 aggregate principal
amount of its 8.75% Senior Notes due 2008 (the "Debt Securities") in exchange
for its outstanding 8.75% Senior Notes due 2008 (the "Old Notes") and (ii) the
Company's Registration Statement on Form S-4 (the "Registration Statement")
with respect to such Debt Securities to be filed with the Securities and
Exchange Commission under the Securities Act. The Debt Securities are to be
issued in accordance with resolutions of the Company's Board of Directors duly
adopted on May 14, 1998 and under and pursuant to the provisions of the
Indenture dated as of June 8, 1998 between the Company and State Street
Bank and Trust Company, as trustee (the "Trustee") (the "Indenture").
We have examined the Indenture, the global note issued under the
Indenture relating to the Old Notes and such statutes, corporate records and
documents, certificates of corporate and public officials and such other
instruments and documents as we have deemed necessary or appropriate for the
purposes of the opinions expressed herein.
Based upon the foregoing and subject to the qualifications,
limitations, assumptions and other statements set forth herein, we are of the
opinion that:
(1) the Company is a validly existing corporation under the laws of
the State of Delaware; and
(2) the Debt Securities when issued in exchange for the Old Notes
will be validly issued and will constitute valid and binding
obligations of the Company, enforceable against the Company in
accordance with their terms (subject to applicable bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or other
similar laws
<PAGE> 2
Board of Directors
July 20, 1998
Page 2
affecting creditors' rights generally from time to time in effect and
subject to general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law).
The opinion expressed in paragraph (2) assumes that the Debt
Securities issued under the Indenture have been duly executed, authenticated,
issued and delivered in accordance with the provisions of the Indenture upon
exchange for the Old Notes as provided for therein.
Except as otherwise stated below, the opinions expressed herein are
based upon, and limited to, the laws of the State of Texas, the State of New
York and the United States and the Delaware General Corporation Law, and to
case decisions reported as of this date under such laws, and to facts known to
us on this date, and we do not undertake to provide any opinion as to any
matter or to advise any person with respect to any events or changes occurring
subsequent to the date of this letter.
The opinions expressed in this letter are provided as legal opinions
only and not as any guaranties or warranties of the matters discussed herein,
and such opinions are strictly limited to the matters stated herein, and no
other opinions may be implied. This opinion letter is intended solely for your
benefit. Without our prior written consent, the opinions expressed herein may
not be published or relied upon by you other than in connection with the
Registration Statement or the transactions contemplated therein, or published
or relied upon by any other person in connection with any matter or in any
manner whatsoever.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to this firm under the heading
"Experts" in the Prospectus constituting part of the Registration Statement.
Very truly yours,
/s/ GRIGGS & HARRISON, P.C.
Griggs & Harrison, P.C.
<PAGE> 1
EXHIBIT 12.1
GULFMARK OFFSHORE, INC.
Computation of the Ratio of Earnings to Fixed Charges
(Amounts in thousands, except ratios)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
------------------------------------------------ -------------------
1993 1994 1995 1996 1997 1997 1998
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Income before tax from
continuing operations $1,493 $2,464 $ 459 $5,482 $11,821 $ 1,442 $5,072
Interest Expense 2,237 2,408 2,801 3,936 4,803 1,226 1,638
Amortized Debt Expense 97 172 170 229 257 66 184
Minority Interest -- -- (154) -- -- (92) --
Interest Factor in Rent 73 82 110 95 106 24 26
------ ------ ------ ------ ------- ------- ------
Earnings available for
fixed charges $3,900 $5,126 $ 3,386 $9,742 $16,987 $ 2,666 $6,920
====== ====== ======= ====== ======= ======= ======
Interest expense $2,237 $2,408 $ 2,801 $3,936 $ 4,803 $ 1,226 $1,638
Capitalized Interest -- -- -- -- 249 18 265
Amortized Debt Expense 97 172 170 229 257 66 184
Interest Factor in Rent 73 82 110 95 106 24 26
------ ------ ------- ------ ------- ------- ------
Total fixed charges $2,407 $2,662 $ 3,081 $4,260 $ 5,415 $ 1,334 $2,113
====== ====== ======= ====== ======= ======= ======
Ratio of earnings to
fixed charges $ 1.6 $ 1.9 $ 1.1 $ 2.3 $ 3.1 $ 2.0 $ 3.3
====== ====== ======= ====== ======= ======= ======
</TABLE>
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this Registration Statement of our report dated February 23,
1998 included in GulfMark Offshore, Inc.'s Form 10-K for the year ended December
31, 1997, and to all references to our Firm included in this Registration
Statement.
/s/ ARTHUR ANDERSEN LLP
Houston, Texas
July 17, 1998
<PAGE> 1
EXHIBIT 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement
of GulfMark Offshore, Inc. on Form S-4 (File No. 333- ) of our reports
dated April 23, 1998 on the consolidated financial statements of Brovig Supply
ASA and subsidiaries as of and for the six months ended December 31, 1997 and on
the combined statements of operating revenues less operating expenses of Brovig
Supply ASA and subsidiaries for the twelve month period ended December 31, 1996
and for the six month period ended June 30, 1997, which reports are included in
the amended Form 8-K of GulfMark Offshore, Inc., dated April 24, 1998. We also
consent to the reference to our firm under the caption "Experts".
PricewaterhouseCoopers DA
Oslo, Norway
July 14, 1998
<PAGE> 1
EXHIBIT 25.1
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)
STATE STREET BANK AND TRUST COMPANY
(Exact name of trustee as specified in its charter)
Massachusetts 04-1867445
(Jurisdiction of incorporation or (I.R.S. Employer
organization if not a U.S. national bank) Identification No.)
225 Franklin Street, Boston, Massachusetts 02110
(Address of principal executive offices) (Zip Code)
Maureen Scannell Bateman, Esq. Executive Vice President and General Counsel
225 Franklin Street, Boston, Massachusetts 02110
(617) 654-3253
(Name, address and telephone number of agent for service)
GULFMARK OFFSHORE, INC.
(Exact name of obligor as specified in its charter)
DELAWARE (65-0612435)
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5 POST OAK PARK, SUITE 1170
HOUSTON, TX 77027
(713) 963-9522
(Address of principal executive offices) (Zip Code)
8 3/4% SENIOR NOTES DUE 2008
(Title of indenture securities)
<PAGE> 2
GENERAL
ITEM 1. GENERAL INFORMATION.
FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISORY AUTHORITY TO
WHICH IT IS SUBJECT.
Department of Banking and Insurance of The Commonwealth of
Massachusetts, 100 Cambridge Street, Boston, Massachusetts.
Board of Governors of the Federal Reserve System, Washington,
D.C., Federal Deposit Insurance Corporation, Washington, D.C.
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
The obligor is not an affiliate of the trustee or of its parent,
State Street Corporation.
(See note on page 2.)
ITEM 3. THROUGH ITEM 15. NOT APPLICABLE.
ITEM 16. LIST OF EXHIBITS.
LIST BELOW ALL EXHIBITS FILED AS PART OF THIS STATEMENT OF
ELIGIBILITY.
1. A COPY OF THE ARTICLES OF ASSOCIATION OF THE TRUSTEE AS NOW IN
EFFECT.
A copy of the Articles of Association of the trustee, as now in
effect, is on file with the Securities and Exchange Commission as
Exhibit 1 to Amendment No. 1 to the Statement of Eligibility and
Qualification of Trustee (Form T-1) filed with the Registration
Statement of Morse Shoe, Inc. (File No. 22-17940) and is incorporated
herein by reference thereto.
2. A COPY OF THE CERTIFICATE OF AUTHORITY OF THE TRUSTEE TO COMMENCE
BUSINESS, IF NOT CONTAINED IN THE ARTICLES OF ASSOCIATION.
A copy of a Statement from the Commissioner of Banks of
Massachusetts that no certificate of authority for the trustee to
commence business was necessary or issued is on file with the
Securities and Exchange Commission as Exhibit 2 to Amendment No. 1 to
the Statement of Eligibility and Qualification of Trustee (Form T-1)
filed with the Registration Statement of Morse Shoe, Inc. (File No.
22-17940) and is incorporated herein by reference thereto.
3. A COPY OF THE AUTHORIZATION OF THE TRUSTEE TO EXERCISE CORPORATE
TRUST POWERS, IF SUCH AUTHORIZATION IS NOT CONTAINED IN THE DOCUMENTS
SPECIFIED IN PARAGRAPH (1) OR (2), ABOVE.
A copy of the authorization of the trustee to exercise corporate
trust powers is on file with the Securities and Exchange Commission as
Exhibit 3 to Amendment No. 1 to the Statement of Eligibility and
Qualification of Trustee (Form T-1) filed with the Registration
Statement of Morse Shoe, Inc. (File No. 22-17940) and is incorporated
herein by reference thereto.
4. A COPY OF THE EXISTING BY-LAWS OF THE TRUSTEE, OR INSTRUMENTS
CORRESPONDING THERETO.
A copy of the by-laws of the trustee, as now in effect, is on
file with the Securities and Exchange Commission as Exhibit 4 to the
Statement of Eligibility and Qualification of Trustee (Form T-1) filed
with the Registration Statement of Eastern Edison Company (File No.
33-37823) and is incorporated herein by reference thereto.
2
<PAGE> 3
5. A COPY OF EACH INDENTURE REFERRED TO IN ITEM 4. IF THE OBLIGOR IS
IN DEFAULT.
Not applicable.
6. THE CONSENTS OF UNITED STATES INSTITUTIONAL TRUSTEES REQUIRED BY
SECTION 321(b) OF THE ACT.
The consent of the trustee required by Section 321(b) of the Act
is annexed hereto as Exhibit 6 and made a part hereof.
7. A COPY OF THE LATEST REPORT OF CONDITION OF THE TRUSTEE PUBLISHED
PURSUANT TO LAW OR THE REQUIREMENTS OF ITS SUPERVISING OR EXAMINING
AUTHORITY.
A copy of the latest report of condition of the trustee published
pursuant to law or the requirements of its supervising or examining
authority is annexed hereto as Exhibit 7 and made a part hereof.
NOTES
In answering any item of this Statement of Eligibility which relates to
matters peculiarly within the knowledge of the obligor or any underwriter for
the obligor, the trustee has relied upon information furnished to it by the
obligor and the underwriters, and the trustee disclaims responsibility for the
accuracy or completeness of such information.
The answer furnished to Item 2. of this statement will be amended, if
necessary, to reflect any facts which differ from those stated and which would
have been required to be stated if known at the date hereof.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, State Street Bank and Trust Company, a corporation
organized and existing under the laws of The Commonwealth of Massachusetts, has
duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of Hartford and the
State of Connecticut, on the 3rd day of July, 1998.
STATE STREET BANK AND TRUST COMPANY
By: /s/ Susan C. Merker
-----------------------------------
SUSAN C. MERKER
VICE PRESIDENT
3
<PAGE> 4
EXHIBIT 6
CONSENT OF THE TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture
Act of 1939, as amended, in connection with the proposed issuance by GulfMark
Offshore, Inc.. of its 8 3/4% SENIOR NOTES DUE 2008, we hereby consent that
reports of examination by Federal, State, Territorial or District authorities
may be furnished by such authorities to the Securities and Exchange Commission
upon request therefor.
STATE STREET BANK AND TRUST COMPANY
By: /s/ Susan C. Merker
-----------------------------------
SUSAN C. MERKER
VICE PRESIDENT
DATED: JULY 3, 1998
4
<PAGE> 5
EXHIBIT 7
Consolidated Report of Condition of State Street Bank and Trust Company,
Massachusetts and foreign and domestic subsidiaries, a state banking institution
organized and operating under the banking laws of this commonwealth and a member
of the Federal Reserve System, at the close of business March 31, 1998,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act and in accordance
with a call made by the Commissioner of Banks under General Laws, Chapter 172,
Section 22(a).
<TABLE>
<CAPTION>
Thousands of
ASSETS Dollars
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin ......................... 1,144,309
Interest-bearing balances .................................................. 9,914,704
Securities .......................................................................... 10,062,052
Federal funds sold and securities purchased
under agreements to resell in domestic offices
of the bank and its Edge subsidiary ........................................ 8,073,970
Loans and lease financing receivables:
Loans and leases, net of unearned income ................................... 6,433,627
Allowance for loan and lease losses ........................................ 88,820
Allocated transfer risk reserve ............................................ 0
Loans and leases, net of unearned income and allowances .................... 6,344,807
Assets held in trading accounts ..................................................... 1,117,547
Premises and fixed assets ........................................................... 453,576
Other real estate owned ............................................................. 100
Investments in unconsolidated subsidiaries .......................................... 44,985
Customers' liability to this bank on acceptances outstanding ........................ 66,149
Intangible assets ................................................................... 263,249
Other assets ........................................................................ 1,066,572
-----------
Total assets ........................................................................ 38,552,020
===========
LIABILITIES
Deposits:
In domestic offices ........................................................ 9,266,492
Noninterest-bearing ............................................... 6,824,432
Interest-bearing .................................................. 2,442,060
In foreign offices and Edge subsidiary ..................................... 14,385,048
Noninterest-bearing ............................................... 75,909
Interest-bearing .................................................. 14,309,139
Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of
the bank and of its Edge subsidiary ........................................ 9,949,994
Demand notes issued to the U.S. Treasury and Trading Liabilities .................... 171,783
Trading liabilities ................................................................. 1,078,189
Other borrowed money ................................................................ 406,583
Subordinated notes and debentures ................................................... 0
Bank's liability on acceptances executed and outstanding ............................ 66,149
Other liabilities ................................................................... 878,947
Total liabilities ................................................................... 36,203,185
-----------
EQUITY CAPITAL
Perpetual preferred stock and related surplus ....................................... 0
Common stock ........................................................................ 29,931
Surplus ............................................................................. 450,003
Undivided profits and capital reserves/Net unrealized holding gains (losses) ........ 1,857,021
Net unrealized holding gains (losses) on available-for-sale securities .............. 18,136
Cumulative foreign currency translation adjustments ................................. (6,256)
Total equity capital ................................................................ 2,348,835
-----------
Total liabilities and equity capital ................................................ 38,552,020
-----------
</TABLE>
5
<PAGE> 6
I, Rex S. Schuette, Senior Vice President and Comptroller of the above named
bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Rex S. Schuette
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
David A. Spina
Marshall N. Carter
Truman S. Casner
6
<PAGE> 1
EXHIBIT 99.1
GULFMARK OFFSHORE, INC.
LETTER OF TRANSMITTAL
FOR TENDER OF ALL OUTSTANDING
8 3/4% SENIOR NOTES DUE 2008
IN EXCHANGE FOR
8 3/4% SENIOR NOTES DUE 2008
THAT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
PURSUANT TO THE PROSPECTUS DATED JULY ___, 1998
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON AUGUST ___ 1998, UNLESS THE EXCHANGE OFFER IS EXTENDED.
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
BUSINESS DAY PRIOR TO THE EXPIRATION DATE
TO: STATE STREET BANK AND TRUST COMPANY (THE "EXCHANGE AGENT")
<TABLE>
<S> <C> <C>
By Hand or Overnight Delivery: Facsimile Transmissions: By Registered or Certified Mail:
(Eligible Institutions Only)
State Street Bank and Trust Company (617) 664-5739 State Street Bank and Trust Company
Corporate Trust Department Corporate Trust Department
Fourth Floor Facsimile Confirmation P. O. Box 778
Two International Place (617) 664-5456 Boston, MA 02102-0078
Boston, MA 02110
</TABLE>
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OR TRANSMISSION TO A
FACSIMILE NUMBER OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID
DELIVERY. THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING CERTIFICATES, IS AT
THE RISK OF THE HOLDER. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN
RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. THE INSTRUCTIONS
ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS
LETTER OF TRANSMITTAL IS COMPLETED.
The undersigned acknowledges that he or she has received the
Prospectus, dated July ___, 1998 (the "Prospectus") of GulfMark Offshore, Inc.,
a Delaware corporation (the "Company"), and this Letter of Transmittal and the
instructions hereto (the "Letter of Transmittal"), which together constitute the
Company's offer (the "Exchange Offer") to exchange $1,000 principal amount of 8
3/4% Senior Notes due 2008 (the "Exchange Notes") that 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 each $1,000
principal amount of its outstanding 8 3/4% Senior Notes due 2008, (the "Old
Notes"), of which $130,000,000 aggregate principal amount is outstanding, upon
the terms and subject to the conditions set forth in the Prospectus. The term
"Expiration Date" shall mean 5:00 p.m., New York City time, on August ___, 1998,
unless the Company, in its sole discretion, extends the Exchange Offer, in which
case the term shall mean the latest date and time to which the Exchange Offer is
extended by the Company. Capitalized terms used but not defined herein shall
have the meaning given to them in the Prospectus.
- 1 -
<PAGE> 2
The Letter of Transmittal is to be used if (i) certificates
representing Old Notes are to be physically delivered to the Exchange Agent
herewith by Holders, (ii) tender of Old Notes is to be made by book-entry
transfer to an account maintained by the Exchange Agent at The Depository Trust
Company ("DTC"), pursuant to the procedures set forth in "The Exchange Offer
- ---- Procedures for Tendering" in the Prospectus by any financial institution
that is a participant in DTC and whose name appears on a security position
listing as the owner of Old Notes or (iii) tender of Old Notes is to be made
according to the guaranteed delivery procedures set forth in the Prospectus
under "The Exchange Offer -- of Transmittal and any other required documents
must be made to the Exchange Agent. Delivery of documents to DTC does not
constitute delivery to the Exchange Agent.
The term "Holder" as used herein 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, or any
person whose Old Notes are held of record by the DTC who desires to deliver such
Old Notes by book-entry transfer of the DTC.
All Holders of Old Notes who wish to tender their Old Notes must, prior
to the Expiration Date: (i) complete, sign, and deliver this Letter of
Transmittal, or a facsimile thereof, to the Exchange Agent, in person or to the
address set forth above; and (2) tender (and not withdraw) his or her Old Notes
or, if a tender of Old Notes is to be made by book-entry transfer to the account
maintained by the Exchange Agent at DTC, confirm such book-entry transfer (a
"Book-Entry Confirmation"), in each case in accordance with the procedures for
tendering described in the Instructions to this Letter of Transmittal. Holders
of Old Notes whose certificates are not immediately available, or who are unable
to deliver their certificates or Book-Entry Confirmation and all other documents
required by this Letter of Transmittal to be delivered to the Exchange Agent on
or prior to the Expiration Date, must tender their Old Notes according to the
guaranteed delivery procedures set forth under the caption "The Exchange Offer
- -- Guaranteed Delivery Procedures" in the Prospectus. (See Instruction 2.)
Upon the terms and subject to the conditions of the Exchange Offer, the
acceptance for exchange of the Old Notes validly tendered and not withdrawn and
the issuance of the Exchange Notes will be made promptly following the
Expiration Date. For the 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 has given written notice thereof to the Exchange Agent.
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.
Please read the entire Letter of Transmittal and the Prospectus
carefully before checking any box below. The instructions included in this
Letter of Transmittal must be followed. Questions and requests for assistance or
for additional copies of the Prospectus, this Letter of Transmittal and the
Notice of Guaranteed Delivery may be directed to the Exchange Agent. (See
Instruction 12 herein.)
Holders who wish to accept the Exchange Offer and tender their Old
Notes must complete this Letter of Transmittal in its entirety and comply with
all of its terms.
List below the Old Notes to which this Letter of Transmittal relates.
If the space provided below is inadequate, the certificate numbers and principal
amounts should be listed on a separate signed schedule and attached hereto. The
minimum permitted tender is $1,000 in principal amount of 8 3/4% Senior Notes
due 2008. All other tenders must be in integral multiples of $1,000.
- 2 -
<PAGE> 3
DESCRIPTION OF 8 3/4% SENIOR NOTES DUE 2008
<TABLE>
<CAPTION>
Box I
===================================================================================================================
Name(s) and Address(es) of Registered Holder(s)* Old Notes Tendered
Exactly as Name(s) Appear(s) on Old Notes
(Please fill in, if blank)
- -------------------------------------------------------------------------------------------------------------------
(A) (B)
Aggregate Principal
Amount Tendered
Certificate Number(s) (if less than all)**
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
Total Principal Amount
of Old Notes Tendered
===================================================================================================================
</TABLE>
* Need not be completed by book-entry Holders.
** Need not be completed by Holders who wish to tender the entire
aggregate principal amount represented by all Old Notes listed. All
tenders must be in integral multiples of $1,000.
- 3 -
<PAGE> 4
PLEASE READ CAREFULLY THE ACCOMPANYING INSTRUCTIONS
<TABLE>
<S> <C>
Box II Box III
- ---------------------------------------------------------------------------------------------------------------------
SPECIAL REGISTRATION INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 4, 5 and 6) (See Instructions 4, 5 and 6)
To be completed ONLY if certificates for Old To be completed ONLY if certificates for Old Notes
Notes in a principal amount not tendered, or Exchange in a principal amount not tendered, or Exchange Notes
Notes issued in exchange for Old Notes accepted for issued in exchange for Old Notes accepted for exchange,
exchange, are to be issued in the name of someone other are to be delivered to someone other than the
than the undersigned. undersigned
Issue certificates to: Deliver certificates to:
Name Name
----------------------------------------- -----------------------------------------
(Please Print) (Please Print)
- ---------------------------------------------- ---------------------------------------------
(Please Print) (Please Print)
Address Address
--------------------------------------- --------------------------------------
- ---------------------------------------------- ---------------------------------------------
(Including Zip Code) (Including Zip Code)
- ---------------------------------------------- ---------------------------------------------
(Tax Identification or Social Security Number) (Tax Identification or Social Security Number)
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
IMPORTANT: THIS LETTER OF TRANSMITTAL OR A FACSIMILE HEREOF (TOGETHER WITH
THE CERTIFICATES(S) FOR OLD NOTES OR A BOOK-ENTRY CONFIRMATION OF SUCH OLD NOTES
AND ALL OTHER REQUIRED DOCUMENTS) OR, IF GUARANTEED DELIVERY PROCEDURES ARE TO
BE COMPLIED WITH, A NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE
EXCHANGE AGENT PRIOR TO THE EXPIRATION DATE.
[ ] CHECK HERE IF OLD NOTES ARE BEING DELIVERED BY DTC TO AN ACCOUNT
MAINTAINED BY THE EXCHANGE AGENT WITH DTC AND COMPLETE THE FOLLOWING:
<TABLE>
<S> <C>
Name of Tendering Institution __________________________________ [ ] The Depository Trust Company
Account Number____________________________________________________________________________________________
Transaction Code Number___________________________________________________________________________________
</TABLE>
Holders whose Old Notes are not immediately available or who cannot
deliver their Old Notes and all other documents required hereby to the Exchange
Agent on or prior to the Expiration Date may tender their Old Notes according to
the guaranteed delivery procedures set forth in the Prospectus under the caption
"The Exchange Offer -- Guaranteed Delivery Procedures." (See Instruction 2.)
- 4 -
<PAGE> 5
[ ] CHECK HERE IF OLD NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE
THE FOLLOWING:
Name(s) of Registered Holder(s) of Old Notes______________________________
Date of Execution of Notice of Guaranteed Delivery________________________
Name of Institution which Guaranteed Delivery_____________________________
Transaction Code Number___________________________________________________
[ ] 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.
Name:_____________________________________________________________________
Address:__________________________________________________________________
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 will receive 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.
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
Subject to the terms and conditions of the Exchange Offer, the undersigned
hereby tenders to GulfMark Offshore, Inc. (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 hereby in accordance with this Letter of
Transmittal, the undersigned sells, assigns and transfers to, or upon the order
of, the Company all right, title and interest in and to the Old Notes tendered
hereby. The undersigned hereby irrevocably constitutes and appoints the Exchange
Agent as its agent and attorney-in-fact (with full knowledge that the Exchange
Agent also acts as the agent of the Company and as Trustee and Registrar under
the Indenture for the Old Notes and the Exchange Notes) with respect to the
tendered Old Notes with full power of substitution (such power of attorney being
deemed an irrevocable power coupled with an interest), subject only to the right
of withdrawal described in the Prospectus, to (i) deliver certificates for such
Old Notes to the Company or transfer ownership of such Old Notes on the account
books maintained by DTC, together, in either such case, with all accompanying
evidences of transfer and authenticity to, or upon the order of, the Company 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 undersigned acknowledges that the Exchange Offer is being made in
reliance upon interpretative advice given by the staff of the Securities and
Exchange Commission to third parties in connection with transactions similar to
the Exchange Offer, so 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 a broker-dealer who
purchased
- 5 -
<PAGE> 6
such Old Notes directly from the Company for resale pursuant to Rule 144A or any
other available exemption under the Securities Act or 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 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 the distribution of such Exchange Notes.
The undersigned 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
Rights Agreement, (as defined in the Prospectus) and that, upon the issuance of
the Exchange Notes, the Company will have no further obligations or liabilities
thereunder (except in certain limited circumstances).
The undersigned represents and warrants that (i) the Exchange Notes
acquired pursuant to the Exchange Offer are being acquired in the ordinary
course of business of the person receiving Exchange Notes (which shall be the
undersigned unless otherwise indicated in the box entitled "Special Delivery
Instructions" above) (the "Recipient"), (ii) neither the undersigned nor the
Recipient (if different) is engaged in, intends to engage in or has any
arrangement or understanding with any person to participate in the distribution
of such Exchange Notes and (iii) neither the undersigned nor the Recipient (if
different) is an "affiliate" of the Company as defined in Rule 405 under the
Securities Act. If the undersigned is not a broker-dealer, the undersigned
further represents that it is not engaged in, and does not intend to engage in,
a distribution of the Exchange Notes. If the undersigned is a broker-dealer, the
undersigned further (x) represents that it acquired Old Notes for the
undersigned's own account as a result of market making activities or other
trading activities, (y) represents that it has not entered into any arrangement
or understanding with the Company or any "affiliate" of the Company (within the
meaning of Rule 405 under the Securities Act) to distribute the Exchange Notes
to be received in the Exchange Offer and (z) acknowledges that it will deliver a
prospectus meeting the requirements of the Securities Act (for which purposes
delivery of the Prospectus, as the same may be hereafter supplemented or
amended, shall be sufficient) in connection with any resale of Exchange Notes
received in the Exchange Offer. Such a broker-dealer will not be deemed, solely
by reason of such acknowledgment and prospectus delivery, to admit that it is an
"underwriter" within the meaning of the Securities Act.
The undersigned understands and agrees that the Company reserves the right
not to accept tendered Old Notes from any tendering Holder if the Company
determines, in its sole and absolute discretion, that such acceptance could
result in a violation of applicable securities laws.
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 Exchange Notes issuable upon the exchange of such
tendered Old Notes, and that, when the same are accepted for exchange, 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. The undersigned also warrants that it will, upon request, execute and
deliver any additional documents deemed to be necessary or desirable by the
Exchange Agent or the Company in order to complete the exchange, assignment and
transfer of tendered Old Notes or transfer of ownership of such Old Notes on the
account books maintained by a book-entry transfer facility.
The undersigned understands and acknowledges that the Company reserves the
right in its sole discretion to purchase or make offers for any Old Notes that
remain outstanding subsequent to the Expiration Date or, as set forth in the
Prospectus under the caption "The Exchange Offer -- Procedures for Tendering,"
to terminate the Exchange Offer and, to the extent permitted by applicable law,
purchase Old Notes in the open market, in privately negotiated transactions or
otherwise. The terms of any such purchases or offers could differ from the terms
of the Exchange Offer.
The undersigned understands that the Company may accept the undersigned's
tender by delivering notice of acceptance, as provided below, to the Exchange
Agent, at which time the undersigned's right to withdraw such tender will
terminate. For purposes of the Exchange Offer, the Company shall be deemed to
have accepted validly tendered Old Notes when, as and if the Company has given
oral (which shall be confirmed in writing) or written notice thereof to the
Exchange Agent.
- 6 -
<PAGE> 7
The undersigned understands that the first interest payment following the
Expiration Date will include unpaid interest on the Old Notes accrued through
the date of issuance of the Exchange Notes.
The undersigned understands that tenders of 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 acknowledges that the Exchange Offer is subject to the
more detailed terms set forth in the Prospectus and, in case of any conflict
between the terms of the Prospectus and this Letter of Transmittal, the
Prospectus shall prevail.
If any tendered Old Notes are not accepted for exchange pursuant to the
Exchange Offer for any reason, certificates for any such unaccepted Old Notes
will be returned (except as noted below with respect to tenders through DTC) at
the Company's cost and 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 undersigned's heirs, personal
representatives, successors and assigns. This tender may be withdrawn only in
accordance with the procedures set forth in this Letter of Transmittal.
By acceptance of the Exchange Offer, each broker-dealer that receives
Exchange Notes pursuant to the Exchange Offer hereby acknowledges and agrees
that upon the receipt of notice by the Company of the happening of any event
which makes any statement in the Prospectus untrue in any material respect or
which requires the making of any changes in the Prospectus in order to make the
statements therein not misleading (which notice the Company agrees to deliver
promptly to such broker-dealer), such broker-dealer will suspend use of the
Prospectus until the Company has amended or supplemented the Prospectus to
correct such misstatement or omission and has furnished copies of the amended or
supplemented prospectus to such broker-dealer.
Unless otherwise indicated under "Special Registration Instructions,"
please issue the certificates representing the Exchange Notes issued in exchange
for the Old Notes accepted for exchange and return any certificates for Old
Notes not tendered or not exchanged, in the name(s) of the undersigned (or, in
either such event in the case of Old Notes tendered by DTC, by credit to the
account at DTC). Similarly, unless otherwise indicated under "Special Delivery
Instructions," please send the certificates representing the Exchange Notes
issued in exchange for the Old Notes accepted for exchange and any certificates
for Old Notes not tendered or not exchanged (and accompanying documents, as
appropriate) to the undersigned at the address shown below the undersign's
signature(s), unless, in either event, tender is being made through DTC. In the
event that both "Special Registration Instructions" and "Special Delivery
Instructions" are completed, please issue the certificates representing the
Exchange Notes issued in exchange for the Old Notes accepted for exchange in the
name(s) of, and return any certificates for Old Notes not tendered or not
exchanged to, the person(s) so indicated. The undersigned understands that the
Company has no obligations pursuant to the "Special Registration Instructions"
or "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.
Holders who wish to tender the Old Notes and (i) whose Old Notes are not
immediately available or (ii) who cannot delivery their Old Notes, this Letter
of Transmittal or any other documents required hereby to the Exchange Agent
prior to the Expiration Date, may tender their Old Notes according to the
guaranteed delivery procedures set forth in the Prospectus under the caption
"The Exchange Offer -- Guaranteed Delivery Procedures."
- 7 -
<PAGE> 8
PLEASE SIGN HERE WHETHER OR NOT
OLD NOTES ARE BEING PHYSICALLY TENDERED HEREBY
AND WHETHER OR NOT TENDER IS TO BE MADE
PURSUANT TO THE GUARANTEED DELIVERY PROCEDURES
This Letter of Transmittal must be signed by the registered Holder(s) as
their name(s) appear on the Old Notes or, if tendered by a participant in DTC,
exactly as such participant's name appears on a security listing as the owner of
Old Notes, 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 Instructions 4 and 6.)
<TABLE>
<S> <C>
x__________________________________________________ _________________________________________
Date
x__________________________________________________ _________________________________________
Date
Signature(s) of Holder(s) of
Authorized Signatory
Name(s): __________________________________________ Address:_________________________________
__________________________________________ _________________________________________
(Please Print) (Including Zip Code)
Capacity: __________________________________________ Area Code and Telephone Number:__________
Social Security No.:________________________________
</TABLE>
PLEASE COMPLETE SUBSTITUTE FORM W-9 INCLUDED HEREIN
- 8 -
<PAGE> 9
<TABLE>
<S> <C>
Box IV
================================================================================================================================
SIGNATURE GUARANTEE (See Instruction 1)
Certain Signatures Must Be Guaranteed by an Eligible Institution
- --------------------------------------------------------------------------------------------------------------------------------
(Name of Eligible Institution Guaranteeing Signatures)
- --------------------------------------------------------------------------------------------------------------------------------
(Address (including zip code) and Telephone Number (including area code) of Firm)
- --------------------------------------------------------------------------------------------------------------------------------
(Authorized Signature)
- --------------------------------------------------------------------------------------------------------------------------------
(Printed Name)
- --------------------------------------------------------------------------------------------------------------------------------
(Title)
Date:
--------------------------
================================================================================================================================
</TABLE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. Guarantee of Signatures. Signatures on this Letter of Transmittal
need not be guaranteed if (a) this Letter of Transmittal is signed by the
registered Holder(s) of the Old Notes tendered herewith and such Holder(s) have
not completed the box set forth herein entitled "Special Registration
Instructions" or the box entitled "Special Delivery Instructions" or (b) such
Old Notes are tendered for the account of an Eligible Institution. (See
Instruction 6.) Otherwise, all signatures on this Letter of Transmittal or a
notice of withdrawal, as the case may be, must be guaranteed by a member firm of
a registered national securities exchange or of the National Association of
Securities Dealers, Inc., a commercial bank or 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").
All signatures on bond powers and endorsements on certificates must also be
guaranteed by an Eligible Institution.
2. Delivery of this Letter of Transmittal and Old Notes.
Certificates for all physically delivered Old Notes or confirmation of any
book-entry transfer to the Exchange Agent at DTC of Old Notes tendered by
book-entry transfer, as well as, in each case (including cases where tender is
affected by book-entry transfer), 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 the delivery will be deemed made only when
actually received by the Exchange Agent. If Old Notes are sent by mail,
certified or registered mail with return receipt requested, properly insured, is
recommended. In all cases, sufficient time should be allowed to ensure timely
delivery. No Letter of Transmittal or Old Notes should be sent to the Company.
- 9 -
<PAGE> 10
The Exchange Agent will make a request to establish an account with
respect to the Old Notes at the DTC for purposes of the Exchange Offer promptly
after the date of the Prospectus, and any financial institution that is a
participant in the DTC may make book-entry delivery of Old Notes by causing the
DTC to transfer such Old Notes into the Exchange Agent's account at the DTC in
accordance with the DTC's procedures for transfer. However, although delivery of
Old Notes may be effected through book-entry transfer at the DTC, the Letter of
Transmittal, with any required signature guarantees or an Agent's Message (as
defined below) in connection with a book-entry transfer and any other required
documents, must, in any case, be transmitted to and received by the Exchange
Agent at the address specified on the cover page of the Letter of Transmittal on
or prior to the Expiration Date or the guaranteed delivery procedures described
below must be complied with.
A Holder may tender Old Notes that are held through the DTC by
transmitting its acceptance through the DTC's Automatic Tender Offer Program,
for which the transaction will be eligible, and the DTC will then edit and
verify the acceptance and send an Agent's Message to the Exchange Agent for its
acceptance. The term "Agent's Message" means a message transmitted by the DTC
to, and received by, the Exchange Agent and forming part of the Book-Entry
Confirmation, which states that the DTC has received an express acknowledgment
from each participant in the DTC tendering the Old Notes and that such
participant has received the Letter of Transmittal and agrees to be bound by the
terms of the Letter of Transmittal and the Company may enforce such agreement
against such participant.
Holders who wish to tender their Old Notes and (i) whose Old Notes are
not immediately available, or (ii) 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 comply with book-entry transfer procedures
on a timely basis must tender their Old Notes according to the guaranteed
delivery procedures set forth in the Prospectus. See "Exchange Offer --
Guaranteed Delivery Procedures." Pursuant to such procedure: (i) such tender
must be made by or through 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, overnight courier, mail or hand delivery) setting forth the name
and address of the Holder of the Old Notes, the certificate number or numbers of
such Old Notes and the principal amount of Old Notes tendered, stating that the
tender is being made thereby and guaranteeing that, within three New York Stock
Exchange trading days after the Expiration Date, this Letter of Transmittal (or
facsimile hereof) together with the certificate(s) representing the Old Notes
and any other required documents will be deposited by the Eligible Institution
with the Exchange Agent; and (iii) such properly completed and executed Letter
of Transmittal (or facsimile hereof), as well as all other documents required by
this Letter of Transmittal and the certificate(s) representing all tendered Old
Notes in proper form for transfer (or a confirmation of book-entry transfer of
such Old Notes into the Exchange Agent's account at DTC), must be received by
the Exchange Agent within three New York Stock Exchange trading days after the
Expiration Date, all in the manner provided in the Prospectus under the caption
"The Exchange Offer -- Any Holder who wishes to tender his 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 to 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.
All questions as to the validity, form, eligibility (including time of
receipt), acceptance of tendered Old Notes, and withdrawal of tendered Old Notes
will be determined by the Company in its sole discretion, which determination
will be final and binding. All tendering Holders, by execution of this Letter of
Transmittal (or facsimile thereof), shall waive any right to receive notice of
the acceptance of the Old Notes for exchange. 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 counsel for the Company,
be unlawful. The Company also reserves the right to waive any irregularities or
conditions of tender as to particular Old Notes. The Company's interpretation of
the terms and conditions of the Exchange Offer (including the instructions in
this Letter of Transmittal) 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 other person shall be under any duty to give
notification of defects or irregularities with respect to tenders of Old Notes,
nor shall any of them incur any liability for failure to give such notification.
Tenders of Old Notes will not be deemed to have been made until such defects or
irregularities have been cured to the Company's satisfaction or waived. Any Old
- 10 -
<PAGE> 11
Notes received by the Exchange Agent that are not properly tendered and as to
which the defects or irregularities have not been cured or waived shall be
returned by the Exchange Agent to the tendering Holders pursuant to the
Company's determination, unless otherwise provided in this Letter of Transmittal
as soon as practicable following the Expiration Date. The Exchange Agent has no
fiduciary duties to the Holders with respect to the Exchange Offer and is acting
solely on the basis of directions of the Company.
3. Inadequate Space. If the space provided is inadequate, the
certificate numbers and/or the number of Old Notes should be listed on a
separate signed schedule and attached hereto.
4. Tender by Holder. Only a Holder of Old Notes may tender such Old
Notes in the Exchange Offer. Any beneficial owner of Old Notes who is not the
registered Holder and who wishes to tender should arrange with such registered
Holder to execute and deliver this Letter of Transmittal on such beneficial
owner's 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 beneficial owner's name or obtain
a properly completed bond power from the registered Holder or properly endorsed
certificates representing such Old Notes.
5. Partial Tenders; Withdrawals. 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 8 3/4% Senior Notes due 2008" above. The entire principal amount of any 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 a certificate or certificates representing 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 "Special Delivery
Instructions" box above on this Letter of Transmittal or unless tender is made
through DTC, promptly after the Old Notes are accepted for exchange.
Except as otherwise provided herein, tenders of Old Notes may be
withdrawn at any time prior to 5:00 p.m., New York City time, on the business
day prior to the Expiration Date. To withdraw a tender of Old Notes in the
Exchange Offer, a written or facsimile transmission notice of withdrawal 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 business day prior to the Expiration Date. Any
such notice of withdrawal must (i) specify the name of the person having
deposited the Old Notes to be withdrawn (the "Depositor"), (ii) identify the Old
Notes to be withdrawn (including the certificate number or numbers and principal
amount of such Old Notes, or, in the case of Old Notes transferred by book-entry
transfer, the name and number of the account at DTC to be credited), (iii) be
signed by the Depositor in the same manner as the original signature on the
Letter of Transmittal by which such Old Notes were tendered (including any
required signature guarantees) or be accompanied by documents of transfer
sufficient to have the Trustee, with respect to the Old Notes, register the
transfer of such Old Notes into the name of the person withdrawing the tender
and (iv) specify the name in which any such Old Notes are to be registered, if
different from that of the Depositor. All questions as to the validity, form and
eligibility (including time of receipt) of such notices will be determined by
the Company, whose determination shall be final and binding on all parties. Any
Old Notes so withdrawn will be deemed not to have been validly tendered for
purposes of the Exchange Offer and no Exchange Notes will be issued with respect
thereto unless the Old Notes so withdrawn are validly retendered. Any Old Notes
which have been tendered but which are not accepted for exchange by the Company
will be returned to the Holder thereof without cost to such Holder 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 in the Prospectus under "The Exchange Offer -- Procedures
for Tendering" at any time prior to the Expiration Date.
6. Signatures on the Letter of Transmittal; Bond Powers and
Endorsements. If this Letter of Transmittal (or facsimile hereof) is signed by
the registered Holder(s) of the Old Notes tendered hereby, the signature must
correspond with the name(s) as written on the face of the Old Note without
alteration, enlargement or any change whatsoever.
- 11 -
<PAGE> 12
If any of the Old Notes tendered hereby are owned of record by two or
more joint owners, all such owners must
sign this Letter of Transmittal.
If a number of Old Notes registered in different names are tendered, it
will be necessary to complete, sign and submit as many copies of this Letter of
Transmittal as there are different registrations of Old Notes.
If this Letter of Transmittal (or facsimile hereof) is signed by the
registered Holder or Holders (which term, for the purposes described herein,
shall include a book-entry transfer facility whose name appears on a security
listing as the owner of the Old Notes) of Old Notes tendered and the certificate
or certificates for Exchange Notes issued in exchange therefor is to be issued
(or any untendered principal amount of Old Notes to be reissued) to the
registered Holder, then such 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, or 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 so to act must be submitted with this Letter of Transmittal.
Endorsements on Old Notes or signatures on bond powers required by this
Instruction 6 must be guaranteed by an Eligible Institution.
7. Special Registration and Delivery Instructions. Tendering Holders
should indicate, in the applicable box or boxes, the name and address 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.
8. Backup Federal Income Tax Withholding and Substitute Form W-9.
Under the federal income tax laws, payments that may be made by the Company on
account of Exchange Notes issued pursuant to the Exchange Offer may be subject
to backup withholding at the rate of 31%. In order to avoid such backup
withholding, each tendering Holder should complete and sign the Substitute Form
W-9 included in this Letter of Transmittal and either (a) provide the correct
taxpayer identification number ("TIN") and certify, under penalties of perjury,
that the TIN provided is correct and that (i) the Holder has not been notified
by the Internal Revenue Service (the "IRS") that the Holder is subject to backup
withholding as a result of failure to report all interest or dividends or (ii)
the IRS has notified the Holder that the Holder is no longer subject to backup
withholding; or (b) provide an adequate basis for exemption. If the tendering
Holder has not been issued a TIN and has applied for one, or intends to apply
for one in the near future, such Holder should write "Applied For" in the space
provided for the TIN in Part I of the Substitute Form W-9, sign and date the
Substitute Form W-9 and sign the Certificate of Payee Awaiting Taxpayer
Identification Number. If "Applied For" is written in Part 1, the Company (or
the Paying Agent under the Indenture governing the Exchange Notes) shall retain
31% of payments made to the tendering Holder during the sixty-day period
following the date of the Substitute Form W-9. If the Holder furnishes the
Exchange Agent or the Company with its TIN within sixty days after the date of
the Substitute Form W-9, the Company (or the Paying Agent) shall remit such
amounts retained during the sixty-day period to the Holder and no further
amounts shall be retained or withheld from payments made to the Holder
thereafter. If, however, the Holder has not provided the Exchange Agent or the
Company with its TIN within such sixty-day period, the Company shall remit such
previously retained amounts to the IRS as backup withholding. In general, if a
Holder is an individual, the TIN is the Social Security number of said
individual. If the Exchange Agent or the Company are not provided with the
correct TIN, the Holder may be subject to a $50 penalty
- 12 -
<PAGE> 13
imposed by the Internal Revenue Service. Certain Holders (including, among
others, all corporations and certain foreign individuals) are not subject to
these backup withholding and reporting requirements. In order for a foreign
individual to qualify as an exempt recipient, such Holder must submit a
statement (generally, IRS Form W-8), signed under penalties of perjury,
attesting to that individual's exempt status. Such statements can be obtained
from the Exchange Agent. For further information concerning backup withholding
and instructions for completing the Substitute Form W-9 (including how to obtain
a taxpayer identification number if you do not have one and how to complete the
Substitute For W-9 if Old Notes are registered in more than one name), consult
the enclosed "Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9."
Failure to complete the Substitute Form W-9 will not, by itself, cause
Old Notes to be deemed invalidly tendered, but may require the Company (or the
Paying Agent) to withhold 31% of the amount of any payments made on account of
the Exchange Notes. Backup withholding is not an additional income tax. Rather,
the federal income tax liability of a person subject to backup withholding will
be reduced by the amount of tax withheld. If withholding results in an
overpayment of taxes, a refund may be obtained from the IRS.
9. 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, certificates representing Exchange Notes or Old Notes for principal
amounts not tendered or accepted for exchange are to be delivered to, or are to
be registered 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 a 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 on 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. See the Prospectus under "The Exchange Offer -- Solicitation of
Tenders; Fees and Expenses."
Except as provided in this Instruction 9, it will not be necessary for
transfer tax stamps to be affixed to the Old Notes listed in this Letter of
Transmittal.
10. Waiver of Conditions. The Company reserves the right, in its sole
discretion, to amend, waive or modify specified conditions in the Exchange Offer
in the case of any Old Notes tendered.
11. Mutilated, Lost, Stolen or Destroyed Old Notes. Any tendering
Holder whose Old Notes have been mutilated, lost, stolen or destroyed should
contact the Exchange Agent at the address indicated herein for further
instructions.
12. Requests for Assistance or Additional Copies. Requests for
assistance and requests for additional copies of the Prospectus or this Letter
of Transmittal may be directed to the Exchange Agent at the address specified in
the Prospectus or on the first page hereof. Holders may also contact their
broker, dealer, commercial bank, trust company or other nominee for assistance
concerning the Exchange Offer.
(DO NOT WRITE IN SPACE BELOW)
<TABLE>
<CAPTION>
CERTIFICATE SURRENDERED OLD NOTES TENDERED OLD NOTES ACCEPTED
<S> <C> <C> <C>
--------------------- ------------------- ------------------
--------------------- ------------------- ------------------
Date Received _________________________ Accepted by_______ Checked by____________
Delivery Prepared by ___________________ Checked by________ Date__________________
</TABLE>
- 13 -
<PAGE> 14
IMPORTANT TAX INFORMATION
Under federal income tax laws, a Holder whose tendered Old Notes are
accepted for payment is required to provide the Exchange Agent (as payer) with
such Holder's correct TIN on Substitute Form W-9 below or otherwise establish a
basis for exemption from backup withholding. If such Holder is an individual,
the TIN is his or her social security number. If the Exchange Agent is not
provided with the correct TIN, a $50 penalty may be imposed by the Internal
Revenue Service, and payments made pursuant to the Exchange Offer may be subject
to backup withholding.
Certain Holders (including, among others, all corporations and certain
foreign persons) are not subject to these backup withholding and reporting
requirements. Exempt Holders should indicate their exempt status on Substitute
Form W-9. A foreign person may qualify as an exempt recipient by submitting to
the Exchange Agent a properly completed Internal Revenue Service Form W-8,
signed under penalties of perjury, attesting to that Holder's exempt status. A
Form W-8 can be obtained from the Exchange Agent. See the enclosed "Guidelines
for Certification of Taxpayer Identification Number on Substitute Form W-9" for
additional instructions.
If backup withholding applies, the Exchange Agent is required to
withhold 31% of any payments made to the Holder or other payee. Backup
withholding is not an additional federal income tax. Rather, the federal income
tax liability of persons subject to backup withholding will be reduced by the
amount of tax withheld. If withholding results in an overpayment of taxes, a
refund may be obtained from the Internal Revenue Service.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments made with respect to the
Exchange Offer, the Holder is required to provide the Exchange Agent with
either: (i) the Holder's correct TIN by completing the form below, certifying
that the TIN provided on Substitute Form W-9 is correct (or that such Holder is
awaiting a TIN) and that (A) the Holder has not been notified by the Internal
Revenue Service that the Holder is subject to backup withholding as a result of
failure to report all interest or dividends of (B) the Internal Revenue Service
has notified the Holder that the Holder is no longer subject to backup
withholding or (ii) an adequate basis for exemption.
WHAT NUMBER TO GIVE THE EXCHANGE AGENT
The Holder is required to give the Exchange Agent the TIN (e.g., social
security number or employer identification number) of the registered Holder of
the Old Notes. If the Old Notes are held in more than one name or are not held
in the name of the actual owner, consult the enclosed "Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9" for
additional guidance on which number to report.
- 14 -
<PAGE> 15
- --------------------------------------------------------------------------------
CERTIFICATION OF PAYEE AWAITING TAXPAYER INDEMNIFICATION NUMBER
I certify, under penalties of perjury, that a Taxpayer Identification
Number has not been issued to me, and that I mailed or delivered an application
to receive a Taxpayer Identification Number to the appropriate Internal Revenue
Service Center or Social Security Administration Office (or 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 payer, 31% of all payments made
to me on account of the Exchange Notes shall be retained until I provide a
Taxpayer Identification Number to the payer and that, if I do not provide my
Taxpayer Identification Number within sixty days, such retained amounts shall be
remitted to the Internal Revenue Service as backup withholding and 31% of all
reportable payments made to me thereafter will be withheld and remitted to the
Internal Revenue Service until I provide a Taxpayer Identification Number.
SIGNATURE
-------------------------------------------------
DATE
--------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU ON ACCOUNT OF THE
EXCHANGE NOTES. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION
OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL
DETAILS.
- --------------------------------------------------------------------------------
- 15 -
<PAGE> 16
TO BE COMPLETED BY ALL TENDERING HOLDERS
(See Instruction 5)
PAYER'S NAME: GULFMARK OFFSHORE, INC.
<TABLE>
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
SUBSTITUTE Part I -- TAXPAYER IDENTIFICATION NUMBER (TIN) SOCIAL SECURITY NUMBER
Form W-9 Enter your TIN in the appropriate box. For ------------------------------
individuals, this is your social security number (SSN). OR
Department of the Treasury For sole proprietors, see the instructions in the
Internal Revenue Service enclosed Guidelines. For other entities, it is your EMPLOYEE IDENTIFICATION NUMBER
employer identification number (EIN). If you do not
REQUEST FOR TAXPAYER have a number, see How to Get a TIN in the enclosed ------------------------------
IDENTIFICATION NUMBER Guidelines.
AND CERTIFICATION
NOTE: If the account is in more than one name, see
the chart on page 2 of the enclosed Guidelines on
whose number to enter.
------------------------------------------------------------------------------------------------
PART II -- FOR PAYEES EXEMPT FROM BACKUP WITHHOLDING
(See Part II instructions in the enclosed Guidelines.)
- ------------------------------------------------------------------------------------------------------------------------------------
Part III -- CERTIFICATION -- UNDER PENALTIES OF PERJURY, I CERTIFY THAT:
(1) The number shown on this form is my correct Taxpayer Identification Number (or I am waiting for a number to be issued to me),
and
(2) I am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I have not been notified by
the Internal Revenue Service (IRS) that I am subject to backup withholding as a result of a failure to report all interest or
dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding.
Signature Date , 1998
----------------------------------------------------------- --------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
CERTIFICATION INSTRUCTIONS -- You must cross out item 2 above if you have
been notified by the IRS that you are currently subject to backup withholding
because of under reporting interest or dividends on your tax return. For real
estate transactions, item 2 does not apply. For mortgage interest paid, the
acquisition or abandonment of secured property, cancellation of debt,
contributions to an individual retirement arrangement (IRA), and generally
payments other than interest and dividends, you are not required to sign the
Certification, but you must provide your correct TIN.
- 16 -
<PAGE> 17
GULFMARK OFFSHORE, INC.
OFFER TO EXCHANGE
ITS
8 3/4% SENIOR NOTES DUE 2008
FOR ANY AND ALL OF ITS
8 3/4% SENIOR NOTES DUE 2008
To Brokers, Dealers, Commercial
Banks, Trust Companies and
Other Nominees:
We are enclosing an offer by GulfMark Offshore, Inc., a Delaware
corporation (the "Company"), to exchange its 8 3/4% Senior Notes due 2008 (the
"Exchange Notes") for any and all of its outstanding 8 3/4% Senior Notes due
2008 (the "Old Notes"), upon the terms and subject to the conditions set forth
in the accompanying Prospectus, dated July ____, 1998 (the "Prospectus"), and
related Letter of Transmittal (which together with the Prospectus constitute the
"Exchange Offer").
The Exchange Offer provides a procedure for holders to tender the Old
Notes by means of guaranteed delivery.
The Exchange Offer will expire at 5:00 p.m., New York City time, on
August _____, 1998, unless extended (the "Expiration Date"). Tendered Old Notes
may be withdrawn at any time prior to 5:00 p.m., New York City time, on the
business day before the Expiration Date.
Based on an interpretation by the staff of the Securities and Exchange
Commission, Exchange Notes issued pursuant to the Exchange Offer in exchange for
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 or a "broker" or
"dealer" registered under the Securities Exchange Act of 1934, as amended)
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 the distribution of such Exchange Notes. See
the discussion in the Prospectus under "The Exchange Offer--General."
The Exchange Offer is not conditioned on any minimum principal amount
of Old Notes being tendered.
Notwithstanding any other term of the Exchange Offer, the Company will
not be required to accept for exchange, or exchange Exchange Notes for, any Old
Notes not theretofore accepted for exchange and may terminate or amend the
Exchange Offer before the acceptance of such Old Notes, if the conditions
described in the Prospectus under "The Exchange Offer--Conditions to the
Exchange Offer" exist.
The Company reserves the right not to accept tendered Old Notes from
any tendering holder if the Company determines, in its sole and absolute
discretion, that such acceptance could result in a violation of applicable
securities laws.
For your information and for forwarding to your clients for whom you
hold Old Notes registered in your name or in the name of your nominee, we are
enclosing the following documents:
<PAGE> 18
1. A Prospectus dated July ____, 1998;
2. A Letter of Transmittal for your use and for the information
of your clients (together with Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 of the Internal Revenue Service);
3. Notice of Guaranteed Delivery; and
4. A printed form of letter which may be sent to your clients for
whose account you hold Old Notes registered in your name or in the name of your
nominee, with an instruction letter for obtaining such clients' instructions to
you with regard to the Exchange Offer.
WE URGE YOU TO CONTACT YOUR
CLIENTS AS PROMPTLY AS POSSIBLE.
Any inquiries you may have with respect to the Exchange Offer may be
addressed to, and additional copies of the enclosed materials may be obtained
from, the Corporate Trust Department of the Exchange Agent at the following
telephone number: (617) 664-5456
Very truly yours,
GULFMARK OFFSHORE, INC.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU AS
THE AGENT OF THE COMPANY, THE EXCHANGE AGENT OR ANY OTHER PERSON OR AUTHORIZE
YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENT ON BEHALF OF
ANY OF THEM IN CONNECTION WITH THE EXCHANGE OFFER OTHER THAN THE DOCUMENTS
ENCLOSED HEREWITH AND THE STATEMENTS CONTAINED THEREIN.
-2-
<PAGE> 19
GULFMARK OFFSHORE, INC.
OFFER TO EXCHANGE
ITS
8 3/4% SENIOR NOTES DUE 2008
FOR ANY AND ALL OF ITS
8 3/4% SENIOR NOTES DUE 2008
To Our Clients:
Enclosed for your consideration are the Prospectus, dated July ___,
1998 (the "Prospectus") and the related Letter of Transmittal (which together
with the Prospectus constitute the "Exchange Offer") in connection with the
offer by GulfMark Offshore, Inc., a Delaware corporation (the "Company"), to
exchange its outstanding 8 3/4% Senior Notes due 2008 (the "Exchange Notes") for
any and all of the outstanding 8 3/4% Senior Notes due 2008 of the Company (the
"Old Notes"), upon the terms and subject to the conditions set forth in the
Exchange Offer.
We are the registered holders of Old Notes held for your account. An
exchange of the Old Notes can be made only by us as the registered holders and
pursuant to your instructions. The Letter of Transmittal is furnished to you for
your information only and cannot be used by you to exchange the Old Notes held
by us for your account. The Exchange Offer provides a procedure for holders to
tender by means of guaranteed delivery.
We request information as to whether you wish us to exchange any or all
of the Old Notes held by us for your account upon the terms and subject to the
conditions of the Exchange Offer.
Your attention is directed to the following:
1. The Exchange Notes will be exchanged for the Old Notes at the
rate of $1,000 principal amount of Exchange Notes for each $1,000 principal
amount of Old Notes. The Exchange Notes will bear interest (as do the Old Notes)
at a rate equal to 8 3/4% per annum, payable semi-annually on June 1 and
December 1 of each year, commencing December 1, 1998 to holders of record on the
immediately preceding May 15 and November 15 respectively. Holders of Exchange
Notes of record on November 15, 1998, will receive on December 1, 1998, an
interest payment in an amount equal to (x) the accrued interest on such Exchange
Notes from the date of issuance thereof to December 1, 1998, plus (y) the
accrued interest on the previously held Old Notes from the date of issuance of
such Old Notes (June 8, 1998) to the date of exchange thereof. Interest will not
be paid on Old Notes that are accepted for exchange. The Notes mature on June 1,
2008. The form and terms of the Exchange Notes are identical in all material
respects to the form and terms of the Old Notes, except that (i) the offering of
the Exchange Notes has been registered under the Securities Act of 1933, as
amended (the "Securities Act"), (ii) the Exchange Notes will not be subject to
transfer restrictions and (iii) the Exchange Notes will not be entitled to
registration or other rights under the Registration Rights Agreement (as defined
in the Prospectus) including payment of liquidated damages upon failure of the
Company to consummate the Exchange Offer or the occurrence of certain other
events.
2. Based on existing interpretations by the staff of the Securities
and Exchange Commission, Exchange Notes issued pursuant to the Exchange Offer in
exchange for 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 or a "broker" or "dealer" registered under the Securities Exchange Act of
1934, as amended) 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 or understanding with any person to participate in the
distribution of such Exchange Notes. See the discussion in the Prospectus under
"The Exchange Offer--General."
<PAGE> 20
3. The Exchange Offer is not conditioned on any minimum principal
amount of Old Notes being tendered.
4. Notwithstanding any other term of the Exchange Offer, the Company
will not be required to accept for exchange, or exchange Exchange Notes for, any
Old Notes not theretofore accepted for exchange, and may terminate or amend the
Exchange Offer as provided herein before the acceptance of such Old Notes, if
any of the conditions described in the Prospectus under "The Exchange
Offer--Conditions to the Exchange Offer" exist.
5. The Exchange Offer will expire at 5:00 p.m., New York City time,
on August ____, 1998, unless extended as provided in the Prospectus and the
Letter of Transmittal (the "Expiration Date"). Tendered Old Notes may be
withdrawn at any time prior to 5:00 p.m., New York City time, on the business
day before the Expiration Date.
6. Any transfer taxes applicable to the exchange of the Old Notes
pursuant to the Offer will be paid by the Company, except as otherwise provided
in the Prospectus under "The Exchange Offer--Solicitation of Tenders; Fees and
Expenses" and in Instruction 9 of the Letter of Transmittal.
If you wish to have us tender any or all of your Old Notes, please so
instruct us by completing, detaching and returning to us the instruction form
attached hereto. An envelope to return your instructions is enclosed. If you
authorize a tender of your Old Notes, the entire principal amount of Old Notes
held for your account will be tendered unless otherwise specified on the
instruction form. Your instructions should be forwarded to us in ample time to
permit us to submit a tender on your behalf by the Expiration Date.
The Exchange Offer is not being made to, nor will tenders be accepted
from or on behalf of, holders of the Old Notes in any jurisdiction in which the
making of the Exchange Offer or acceptance thereof would not be in compliance
with the laws of such jurisdiction or would otherwise not be in compliance with
any provision of any applicable securities law.
-2-
<PAGE> 21
GULFMARK OFFSHORE, INC.
OFFER TO EXCHANGE
ITS
8 3/4% SENIOR NOTES DUE 2008
FOR ANY AND ALL OF ITS
8 3/4% SENIOR NOTES DUE 2008
INSTRUCTION TO REGISTERED HOLDER FROM BENEFICIAL OWNER
The undersigned acknowledge(s) receipt of your letter and the enclosed
Prospectus and the related Letter of Transmittal, in connection with the offer
by GulfMark Offshore, Inc. (the "Company") to exchange its 8 3/4% Senior Notes
Due 2008 (the "Exchange Notes") for any and all of its outstanding 8 3/4% Senior
Notes Due 2008 (the "Old Notes").
This will instruct you to tender the principal amount of Old Notes
indicated below held by you for the account of the undersigned, upon the terms
and subject to the conditions set forth in the Prospectus and the related Letter
of Transmittal.
The undersigned represents that (i) the Exchange Notes to be acquired
pursuant to the Exchange Offer in exchange for the Old Notes designated below
are being obtained in the ordinary course of business of the person receiving
such Exchange Notes, (ii) neither the undersigned nor any other person receiving
such Exchange Notes is engaged in, intends to engage in, or has any arrangement
or understanding with any person to participate in the distribution of such
Exchange Notes, and (iii) it is not an "affiliate," as defined under Rule 405 of
the Securities Act of 1933 (the "Securities Act"), of the Company or, if it is
an affiliate, that it will comply with the registration and prospectus delivery
requirements of the Securities Act to the extent applicable.
If the undersigned is a "broker" or "dealer" registered under the
Securities Exchange Act of 1934 that acquired Old Notes for its own account
pursuant to its market-making or other trading activities (other than Old Notes
acquired directly from the Company), the undersigned understands and
acknowledges that it may be deemed to be an "underwriter" within the meaning of
the Securities Act and, therefore, must deliver a prospectus relating to the
Exchange Notes in connection with any resales by it of Exchange Notes acquired
for its own account in the Exchange Offer. Notwithstanding the foregoing, the
undersigned does not thereby admit that it is an "underwriter" within the
meaning of the Securities Act.
YOU ARE HEREBY INSTRUCTED TO TENDER ALL OLD NOTES HELD FOR THE ACCOUNT OF THE
UNDERSIGNED UNLESS OTHERWISE INDICATED BELOW.
[ ] DO NOT TENDER ANY OLD NOTES
[ ] TENDER OLD NOTES IN THE AGGREGATE PRINCIPAL AMOUNT OF $
----------------
SIGNATURE:
- ---------------------------------------------------------
NAME OF BENEFICIAL OWNER (PLEASE PRINT)
BY
-------------------------------------------------------
SIGNATURE
- ---------------------------------------------------------
ADDRESS
- ---------------------------------------------------------
AREA CODE AND TELEPHONE NUMBER
DATED: , 1998
---------------------
<PAGE> 22
NOTICE OF GUARANTEED DELIVERY
FOR 8 3/4% SENIOR NOTES DUE 2008
OF GULFMARK OFFSHORE, INC.
As set forth in the Prospectus dated July ___ , 1998 (the "Prospectus")
of GulfMark Offshore, Inc. (the "Company") and in the Letter of Transmittal (the
"Letter of Transmittal"), this form or a form substantially equivalent to this
form must be used to accept the Exchange Offer (as defined below) if the
certificates for the outstanding 8 3/4% Senior Notes due 2008 (the "Old Notes")
of the Company and all other documents required by the Letter of Transmittal
cannot be delivered to the Exchange Agent by the expiration of the Exchange
Offer or compliance with book-entry transfer procedures cannot be effected on a
timely basis. This form may be delivered by hand or transmitted by facsimile
transmission, telex or mail to the Exchange Agent no later than the Expiration
Date, and must include a signature guarantee by an Eligible Institution as set
forth below. Capitalized terms used herein but not defined herein have the
meanings ascribed thereto in the Prospectus.
To: State Street Bank and Trust Company (the "Exchange Agent")
<TABLE>
<S> <C> <C>
By Hand or Overnight Delivery: Facsimile Transmissions: By Registered or Certified Mail:
State Street Bank (Eligible Institutions Only) State Street Bank
and Trust Company (617) 664-5739 and Trust Company
Corporate Trust Department Corporate Trust Department
Fourth Floor P. O. Box 778
Two International Place Facsimile Confirmation Boston, MA 02102-0078
Boston, MA 02110 (617) 664-5456
</TABLE>
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE
DOES NOT CONSTITUTE A VALID DELIVERY. THE METHOD OF DELIVERY OF ALL DOCUMENTS,
INCLUDING CERTIFICATES, IS AT THE RISK OF THE HOLDER. IF DELIVERY IS BY MAIL,
REGISTERED OR CERTIFIED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED. THE INSTRUCTIONS ACCOMPANYING THE LETTER OF TRANSMITTAL SHOULD BE
READ CAREFULLY BEFORE THIS NOTICE OF GUARANTEED DELIVERY IS COMPLETED.
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 instruction thereto, such
signatures must appear in the applicable space provided on the Letter of
Transmittal for Guarantee of Signature(s).
<PAGE> 23
Ladies and Gentlemen:
The undersigned acknowledges receipt of the Prospectus and the related
Letter of Transmittal which describes the Company's offer (the "Exchange Offer")
to exchange $1,000 in principal amount of a new series of 8 3/4% Senior Notes
due 2008 (the "Exchange Notes") for each $1,000 in principal amount of the Old
Notes.
The undersigned hereby tenders to the Company the aggregate principal
amount of Old Notes set forth below on the terms and conditions set forth in the
Prospectus and the related Letter of Transmittal pursuant to the guaranteed
delivery procedure set forth in the "The Exchange Offer--Guaranteed Delivery
Procedures" section in the Prospectus and the accompanying Letter of
Transmittal.
The undersigned understands that no withdrawal of a tender of Old Notes
may be made on or after 5:00 p.m., New York City time, on the business day
before the Expiration Date. The undersigned understands that for a withdrawal of
a tender of Old Notes to be effective, a written notice of withdrawal that
complies with the requirements of the Exchange Offer must be timely received by
the Exchange Agent at one of its addresses specified on the cover of this Notice
of Guaranteed Delivery prior to the Expiration Date.
The undersigned understands that the exchange of Old Notes for Exchange
Notes pursuant to the Exchange Offer will be made only after timely receipt by
the Exchange Agent of (i) such Old Notes (or Book-Entry Confirmation of the
transfer of such Old Notes into the Exchange Agent's account at The Depository
Trust Company (the "Depositary" or "DTC")) and (ii) a Letter of Transmittal (or
facsimile thereof) with respect to such Old Notes, properly completed and duly
executed, with any required signature guarantees, the Notice of Guaranteed
Delivery and any other documents required by the Letter of Transmittal or a
properly transmitted Agent's Message. The term "Agent's Message" means a message
transmitted by the Depositary to, and received by, the Exchange Agent and
forming part of the confirmation of a book-entry transfer, which states that the
Depository has received an express acknowledgment from each participant in the
Depositary tendering the Old Notes and that such participant has received the
Letter of Transmittal and agrees to be bound by the terms of the Letter of
Transmittal and the Company may enforce such agreement against such participant.
All authority conferred or agreed to be conferred by this Notice of
Guaranteed Delivery shall not be affected by, and shall survive, the death or
incapacity of the undersigned, and every obligation of the undersigned under
this Notice of Guaranteed Delivery shall be binding upon the heirs, executors,
administrators, trustees in bankruptcy, personal and legal representatives,
successors and assigns of the undersigned.
-2-
<PAGE> 24
PLEASE SIGN AND COMPLETE
Signature(s) of Registered Owner(s) or Authorized Name(s) of Registered
Holder(s)
<TABLE>
<S> <C>
Signatory:
--------------------------------------------------- ---------------------------------------------------------
- ------------------------------------------------------------- ---------------------------------------------------------
- ------------------------------------------------------------- ---------------------------------------------------------
Principal Amount of Old Notes Tendered: Address:
------------------------------------------------
- ------------------------------------------------------------- ---------------------------------------------------------
Certificate No(s). of Old Notes (if available): Area Code and Telephone No.:
- ------------------------------------------------------------- If Old Notes will be delivered by book-entry
transfer at The Depository Trust Company, insert
- -------------------------------------------------------------
Depository Account No.:
Date: ---------------------------------
--------------------------------------------------------
</TABLE>
This Notice of Guaranteed Delivery must be signed by the registered Holder(s) of
Old Notes exactly as its (their) name(s) appears on certificates for Old Notes
or on a security position listing as the owner of Old Notes, or by person(s)
authorized to become registered 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:
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Address(es):
-----------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
DO NOT SEND OLD NOTES WITH THIS FORM. OLD NOTES SHOULD BE SENT TO THE EXCHANGE
AGENT TOGETHER WITH A PROPERLY COMPLETED AND DULY EXECUTED LETTER OF
TRANSMITTAL.
-3-
<PAGE> 25
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a member firm of a registered national securities
exchange or of the National Association of Securities Dealers, Inc. or a
commercial bank or trust company having an office or a correspondent in the
United States, or otherwise an "eligible guarantor institution" within the
meaning of Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended,
hereby (a) represents that each holder of Old Notes on whose behalf this tender
is being made "own(s)" the Old Notes covered hereby within the meaning of Rule
13d-3 under the Securities Exchange Act of 1934, as amended (the "Exchange Act")
and (b) guarantees that, within three New York Stock Exchange trading days from
the expiration date of the Exchange Offer, a properly completed and duly
executed Letter of Transmittal (or a facsimile thereof), together with
certificates representing the Old Notes covered 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 Depository Trust Company, pursuant to the
procedure for book-entry transfer set forth in the Prospectus) and required
documents will be deposited by the undersigned with the Exchange Agent.
The undersigned acknowledges that it must deliver the Letter of
Transmittal and Old Notes tendered hereby to the Exchange Agent within the time
period set forth above and that failure to do so could result in financial loss
to the undersigned.
<TABLE>
<S> <C>
Name of Firm:
------------------------------------------ -----------------------------------------------
Authorized Signature
Address: Name:
----------------------------------------------- ------------------------------------------
Title:
- ------------------------------------------------------- -----------------------------------------
Area Code and Telephone No.: Date:
-------------------------- -----------------------------------------
</TABLE>
-4-
