<PAGE>
As filed with the Securities and Exchange Commission on April 9, 1998
REGISTRATION NO. 333- *
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------
GLOBAL MARINE INC.
(Exact name of registrant as specified in its charter)
DELAWARE 95-1849298
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
777 N. ELDRIDGE PARKWAY JAMES L. MCCULLOCH
HOUSTON, TEXAS 77079-4493 VICE PRESIDENT AND GENERAL COUNSEL
(281) 596-5100 777 N. ELDRIDGE PARKWAY
(Address, including zip code, and HOUSTON, TEXAS 77079-4493
telephone number including area code, (281) 596-5100
of registrant's principal executive (Name, address, including zip code,
offices) and telephone number, including area
code, of agent for service)
Copy to:
J. DAVID KIRKLAND, JR.
BAKER & BOTTS, L.L.P.
3000 ONE SHELL PLAZA
HOUSTON, TEXAS 77002
(713) 229-1234
---------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are to be offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended (the "Securities Act"), other than securities offered only in
connection with dividend or interest reinvestment plans, check the following
box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please 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(c)
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 delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
====================================================================================
TITLE OF EACH CLASS OF PROPOSED MAXIMUM AMOUNT OF
SECURITIES TO BE REGISTERED AGGREGATE OFFERING PRICE (1) REGISTRATION FEE
- ------------------------------------------------------------------------------------
<S> <C> <C>
Debt Securities(2)
- ------------------------------------------------------------------------------------
Preferred Stock, $.01 par value(3)
- ------------------------------------------------------------------------------------
Common Stock, $.10 par value(4)
- ------------------------------------------------------------------------------------
Total $425,000,000 $125,375
====================================================================================
(continued on next page)
</TABLE>
<PAGE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o). In no event will the aggregate initial offering
price of all securities issued from time to time pursuant to this
Registration Statement exceed $425,000,000 or the equivalent thereof in
foreign currencies, foreign currency units or composite currencies. Any
securities registered hereunder may be sold separately or as units with
other securities registered hereunder.
(2) There is also being registered hereunder an indeterminate principal amount
of Debt Securities as may be issuable upon conversion, redemption or
exchange of the Debt Securities or Preferred Stock registered hereunder.
(3) There is also being registered hereunder an indeterminate number of shares
of Preferred Stock as may be issuable upon conversion, redemption or
exchange of the Debt Securities or Preferred Stock registered hereunder.
(4) There is also being registered hereunder an indeterminate number of shares
of Common Stock as may be issuable upon conversion, redemption or exchange
of the Debt Securities or Preferred Stock registered hereunder.
*Pursuant to Rule 429 under the Securities Act of 1933, the Prospectus
included in this Registration Statement (which Prospectus relates to
securities of the Registrant having a proposed maximum aggregate offering
price of $500,000,000 as of the date of the filing of this Registration
Statement with the Commission) is a combined Prospectus and also relates to
Registration Statement No. 33-58577 previously filed by the Registrant and
declared effective on June 13, 1995, with respect to which a filing fee of
$25,862.07 was paid.
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, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE
ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY
DETERMINE.
===============================================================================
<PAGE>
SUBJECT TO COMPLETION DATED APRIL 9, 1998
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
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.
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
PROSPECTUS [LOGO]
$500,000,000
GLOBAL MARINE INC.
DEBT SECURITIES
PREFERRED STOCK
COMMON STOCK
Global Marine Inc. (the "Company") may offer from time to time, together or
separately, (i) its unsecured debt securities consisting of notes, debentures or
other evidences of indebtedness (the "Debt Securities"), (ii) shares of its
preferred stock, par value $.01 per share ("Preferred Stock"), and (iii) shares
of its common stock, par value $.10 per share ("Common Stock"). The aggregate
initial offering price of the Debt Securities, Preferred Stock and Common Stock
to be offered by the Company hereby (collectively, the "Securities") will not
exceed $500,000,000 or, if applicable, the equivalent thereof in any other
currency, currency unit or composite currency. The Securities may be offered as
separate series in amounts, at prices and on terms to be determined in light of
market conditions at or prior to the time of sale and set forth in a Prospectus
Supplement.
The terms of each series of Debt Securities, including, where applicable, the
specific designation, aggregate principal amount, ranking as senior debt or
subordinated debt, authorized denomination, maturity, rate (or method of
determining the same) and times of payment of any interest, any terms for
optional or mandatory redemption, which may include redemption at the option of
holders upon the occurrence of certain events or payment of additional amounts
or any sinking fund provisions, any provisions with respect to conversion or
exchangeability, the initial public offering price, the net proceeds to the
Company and any other specific terms in connection with the offering and sale of
such series will be set forth in a Prospectus Supplement. As used herein, the
Debt Securities shall include securities denominated in United States dollars
or, at the option of the Company if so specified in an applicable Prospectus
Supplement, in any other currency, currency unit or composite currency, or in
amounts determined by reference to an index or formula. In addition, all or a
portion of the Debt Securities of a series may be issuable in temporary or
permanent global form.
The terms of each series of Preferred Stock, including, where applicable, the
specific designation, number of shares, liquidation preference per share,
dividend or distribution rate (or method of determining the same) and dates on
which dividends or distributions shall be payable and dates from which dividends
or distributions shall accrue, any terms for optional or mandatory redemption,
which may include redemption at the option of holders upon the occurrence of
certain events or payment of additional amounts or any sinking fund provisions,
any provisions with respect to conversion or exchangeability, any voting rights,
any other relative rights or restrictions, preferences, limitations or
qualifications relating to the Preferred Stock of a specific series, the initial
public offering price, the net proceeds to the Company and any other specific
terms in connection with the offering and sale of such series will be set forth
in a Prospectus Supplement.
The Securities may be sold directly by the Company to investors, through
agents designated from time to time or to or through underwriters or dealers.
See "Plan of Distribution." If any agents of the Company or any underwriters
are involved in the sale of any Securities in respect of which this Prospectus
is being delivered, the names of such agents or underwriters and any applicable
commissions or discounts will be set forth in a Prospectus Supplement. The net
proceeds to the Company from such sale also will be set forth in a Prospectus
Supplement.
The Common Stock is traded on the New York Stock Exchange under the symbol
"GLM." Any Common Stock offered will be traded, subject to notice of issuance,
on the New York Stock Exchange.
This Prospectus may not be used to consummate sales of Securities unless
accompanied by a Prospectus Supplement.
SEE "RISK FACTORS" BEGINNING ON PAGE 4 FOR A DISCUSSION OF CERTAIN FACTORS
THAT PROSPECTIVE INVESTORS IN SECURITIES SHOULD CONSIDER.
-----------------------------
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 , 1998.
<PAGE>
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS OR THE ACCOMPANYING PROSPECTUS SUPPLEMENT IN
CONNECTION WITH THE OFFERING COVERED BY THIS PROSPECTUS AND THE ACCOMPANYING
PROSPECTUS SUPPLEMENT. IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. NEITHER THIS PROSPECTUS NOR
THE ACCOMPANYING PROSPECTUS SUPPLEMENT CONSTITUTES AN OFFER TO SELL, OR A
SOLICITATION OF AN OFFER TO BUY, ANY OF THE SECURITIES OFFERED HEREBY IN ANY
JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER
OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS OR THE ACCOMPANYING
PROSPECTUS SUPPLEMENT NOR ANY SALE OF SECURITIES 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 THE AFFAIRS OF THE COMPANY SINCE THE DATE
HEREOF OR THAT THE INFORMATION IN THIS PROSPECTUS OR THE ACCOMPANYING PROSPECTUS
SUPPLEMENT IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF OR THEREOF.
-----------------------------
TABLE OF CONTENTS
Available Information................................................... 3
Incorporation of Certain Documents by Reference......................... 3
The Company............................................................. 4
Risk Factors............................................................ 4
Use of Proceeds......................................................... 8
Ratio of Earnings to Fixed Charges...................................... 8
Description of Debt Securities.......................................... 9
Description of Capital Stock............................................ 18
Plan of Distribution.................................................... 21
Legal Matters........................................................... 22
Experts................................................................. 22
-----------------------------
IN CONNECTION WITH AN OFFERING THROUGH UNDERWRITERS, CERTAIN PERSONS
PARTICIPATING IN SUCH OFFERING MAY ENGAGE IN TRANSACTIONS THAT STABILIZE,
MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE SECURITIES OFFERED HEREBY, WHICH
MAY INCLUDE, AMONG OTHERS, OVERALLOTMENT, STABILIZING AND SHORT-COVERING
TRANSACTIONS IN THE SECURITIES, AND THE IMPOSITION OF A PENALTY BID, DURING AND
AFTER SUCH OFFERING. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "PLAN OF
DISTRIBUTION."
2
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"), which can be inspected
and copied at the public reference facilities maintained by the Commission at
450 Fifth Street, N.W., Judiciary Plaza, Room 1024, Washington, D.C. 20549; and
at the regional offices of the Commission at 500 West Madison Street, Suite
1400, Chicago, Illinois 60661 and at Seven World Trade Center, New York, New
York 10048. Copies of such material can be obtained from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Judiciary Plaza,
Washington, D.C. 20549 at prescribed rates. The Commission maintains an
Internet web site that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the
Commission (http://www.sec.gov). The Common Stock is listed on the New York
Stock Exchange, and such material also can be inspected at the offices of the
New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005.
This Prospectus, which constitutes part of a registration statement on Form
S-3 (the "Registration Statement") filed by the Company with the Commission
under the Securities Act of 1933, as amended (the "Securities Act"), omits
certain of the information contained in the Registration Statement. Reference
is hereby made to the Registration Statement and the exhibits thereto, which may
be obtained at the public reference facilities maintained by the Commission as
described in the preceding paragraph, for further information with respect to
the Company and the securities offered hereby. Statements contained herein
concerning the provisions of such documents are necessarily summaries of such
documents, and each such statement is qualified in its entirety by reference to
the copy of the applicable document filed with the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which the Company has filed with the Commission
pursuant to the Exchange Act (File No. 1-5471), are incorporated in this
Prospectus by reference and shall be deemed to be a part hereof:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997; and
(b) The description of the Common Stock contained in the Company's
Registration Statement on Form 8-A filed on March 6, 1989, as amended by
Amendment No. 1 thereto on Form 8 filed with the Commission on March 15,
1989 and as such Registration Statement may be amended from time to time
for the purpose of updating, changing or modifying such description.
All documents filed by the Company with the Commission pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offering made hereby shall be
deemed to be incorporated by reference in this Prospectus and to be a part
hereof from the date of filing of such document. 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 is delivered,
upon the written or oral request of such person, a copy of any or all documents
that have been incorporated herein by reference (not including exhibits to the
documents that have been incorporated herein by reference unless such exhibits
are specifically incorporated by reference in the documents this Prospectus
incorporates). Requests should be directed to Corporate Secretary, Global
Marine Inc., 777 N. Eldridge Parkway, Houston, Texas 77079-4493 (telephone
number: (281) 596-5100).
3
<PAGE>
THE COMPANY
Global Marine Inc. is one of the largest offshore drilling contractors in
the world, with an active fleet of 31 mobile offshore drilling rigs worldwide,
plus two deepwater drillships under construction. In addition, the Company
believes it is the industry's largest provider of offshore turnkey drilling
services.
The Company provides offshore drilling services on a day rate basis in the
U.S. Gulf of Mexico and internationally. The Company's fleet consists of 23
cantilevered jackup rigs, five third-generation semisubmersible rigs, one
fourth-generation semisubmersible, one moored drillship and one dynamically
positioned drillship that is nearing completion of its conversion to deepwater
drilling operations. Each of the Company's active rigs is equipped with a top
drive, which increases drilling efficiency and safety. Of the Company's rigs, as
of March 31, 1998, 12 operate in the U.S. Gulf of Mexico, 10 operate off the
coast of West Africa, five operate in the North Sea, and one operates offshore
in each of Trinidad, California and Argentina. In addition, the Company has one
concrete island drilling system designed for arctic operations which was
inactive as of March 31, 1998.
The Company conducts substantially all of its domestic offshore contract
drilling operations through Global Marine Drilling Company ("GMDC"), a wholly-
owned subsidiary, and conducts substantially all of its international offshore
contract drilling operations through Global Marine International Services
Corporation ("GMISC"), a wholly-owned subsidiary. The Company is headquartered
in Houston, Texas, with other offices in Lafayette, Louisiana; Aberdeen,
Scotland; Abidjan, Ivory Coast; Buenos Aires, Argentina; Cabinda, Angola;
Douala, Cameroon; London, England; Luanda, Angola; New Orleans, Louisiana; Port
Gentil, Gabon; Port Harcourt, Nigeria; Port Hueneme, California; Pointe Noire,
Republic of Congo; and Trinidad, West Indies.
The Company also provides drilling management services on a turnkey basis
through its wholly-owned subsidiaries, Applied Drilling Technology Inc. ("ADTI")
and Global Marine Integrated Services-International Inc. ("GMIS-I"), and through
Global Marine Integrated Services-Europe ("GMIS-E"), a division of one of the
Company's foreign subsidiaries. Each will assume responsibility for the design
and execution of specific offshore drilling programs and deliver a logged or
loggable hole to an agreed depth for a guaranteed price. Compensation is
contingent upon satisfactory completion of the drilling program. ADTI operates
principally in the U.S. Gulf of Mexico, while GMIS-I and GMIS-E operate
internationally.
The Company's principal executive offices are located at 777 N. Eldridge
Parkway, Houston, Texas 77079-4493, and its telephone number is (281) 596-5100.
RISK FACTORS
The following should be considered carefully with the information provided
elsewhere in this Prospectus and the accompanying Prospectus Supplement and the
documents incorporated by reference herein in reaching a decision regarding an
investment in the Securities offered hereby.
The statements regarding future performance and results, the dates the
Company's rigs being constructed or undergoing conversion to drilling operations
will enter service, and the other statements that are not historical facts
contained in this registration statement are forward-looking statements. The
words "anticipate," "expect," "project," "estimate," "predict," "plan" and
similar expressions are also intended to identify forward-looking statements.
Such statements involve risks and uncertainties including, but not limited to,
changes in the markets for oil and gas and for offshore drilling rigs and the
risks of doing business in changing markets, changes in the dates the Company's
rigs being constructed or undergoing conversion to drilling operations will
enter service, changes in applicable tax laws, regulations and interpretations
and the risk that tax rates to which the Company is subject could change from
those anticipated, the risks involved in dealing with other parties, including
the risk that other parties' commitments to the Company could be breached, and
changing costs and other factors discussed herein and in the Company's other
Securities and Exchange Commission filings. Should one or more risks or
uncertainties materialize, or should underlying assumptions prove incorrect,
actual outcomes may vary materially from those indicated.
4
<PAGE>
COMPETITION AND BUSINESS ENVIRONMENT
Offshore drilling is a highly competitive business with numerous industry
participants, none of which has a significant market share. Drilling contracts
are awarded on a competitive bid basis. An operator selecting a rig may
consider, among other things, rig availability, quality of service and
equipment, and price.
Offshore drilling is a highly cyclical business and may be affected by oil
and gas price levels and volatility. Worldwide military, political and economic
events have contributed to oil and gas price volatility, such as the oil and gas
price declines in early 1998, and are likely to continue to do so in the future.
Some other factors which have affected and are likely to continue affecting oil
and gas prices and, by extension, the level of demand for the Company's
services, include demand for oil and gas worldwide, the ability of the
Organization of Petroleum Exporting Countries ("OPEC") to set and maintain
production levels, the level of production by non-OPEC countries, domestic and
foreign tax policy, and government laws and regulations which restrict
exploration and development of oil and gas in various offshore jurisdictions.
Competition for the skilled labor required for offshore operations has
intensified as the level of activity in the offshore drilling industry has
increased in the last few years. Although such competition has not materially
affected the Company to date, the Company has found it more difficult to find
qualified individuals, and the possibility exists that competition for skilled
labor could limit the Company's results of operations.
The Company competes with other participants in the offshore drilling
industry, some of which have greater resources. In addition, the Company's
drilling management services business is subject to the usual risks associated
with having a limited number of customers for its services.
RISKS OF TURNKEY DRILLING OPERATIONS
Results of operations from the Company's drilling management services may
be limited by certain factors, in particular, the ability of the Company to
obtain and successfully perform turnkey drilling contracts based on competitive
bids. The Company's ability to obtain turnkey drilling contracts is largely
dependent on the number of such contracts available for bid. Accordingly,
results of the Company's drilling management service operations may vary widely
from quarter to quarter and from year to year. Furthermore, turnkey operations
may be constrained by the availability of rigs. In the U.S. Gulf of Mexico, ADTI
relied on third-party rigs for all of its rig time in 1997. At March 31, 1998,
the Company had 16 third-party rigs under contract for its turnkey operations,
with remaining terms ranging from five to eighteen months at market-adjusted
dayrates. The future level of turnkey activity in the U.S. Gulf of Mexico is
dependent on the continued availability of third-party rigs. In the North Sea
and West Africa, the market for turnkey drilling is not well established, and
growth in these markets also may be constrained by future rig availability.
Under turnkey contracts, the Company's compensation is contingent on
successfully drilling to a specified depth and, under certain contracts,
completing the well. The turnkey drilling contractor is responsible for making
all critical decisions, whereas under day rate contracts ultimate control is
exercised by the operator. The amount of the Company's compensation is fixed at
the amount bid by the Company to drill the well. Thus, if operational problems
prevent performance, the Company will not be paid unless it chooses to drill a
new well at its own expense, and if unforeseen problems arise that cause the
cost of performance to exceed the turnkey price, the Company must absorb the
loss. In contrast, in a day rate contract, those risks are retained by the
customer. Although the Company routinely budgets for contingencies in bidding
turnkey projects and believes that its experience and knowledge of drilling
operations permit it to calculate drilling risks within tolerable limits, there
can be no assurance that the cost of contingencies will not exceed budgeted
amounts. The Company carries insurance against certain other risks associated
with turnkey drilling operations.
RISK OF CAPITAL EXPANSION
The Company has made and expects to continue making substantial new-build,
upgrade and refurbishment expenditures. Such projects are subject to the risks
of delay or cost overruns inherent in any large construction project, including
shortages of materials or skilled labor, unforeseen engineering problems, work
stoppages, weather
5
<PAGE>
interference, unanticipated cost increases, and inability to obtain any of the
requisite permits or approvals. Significant cost overruns or delays would
adversely affect the Company's financial condition and results of operation.
In addition to new-builds, the Company has recently acquired existing rigs
and may acquire additional rigs in the future. Historically, the industry has
experienced prolonged periods of overcapacity, during which many rigs were idle
for long periods of time. While the Company has secured contracts for its
recent acquisitions, there can be no assurance that recent increases in demand
will be sustained long-term.
OPERATIONAL RISKS AND INSURANCE
The Company's operations are subject to the usual hazards incident to the
drilling of oil and gas wells, such as blowouts, explosions, oil spills and
fires, which can severely damage or destroy equipment or cause environmental
damage. The Company's activities are also subject to perils peculiar to marine
operations, such as collision, grounding, and damage or loss from severe
weather. These hazards can cause personal injury and loss of life, severe
damage to and destruction of property and equipment, pollution or environmental
damage, and suspension of operations.
The Company maintains insurance coverage against certain general and marine
public liability, including liability for personal injury, in the amount of $200
million, subject to self-insured retention generally of no more than $250,000
per occurrence. In addition, the Company's rigs and related equipment are
separately insured under hull and machinery policies against certain marine and
other perils, subject to a self-insured retention generally of no more than
$300,000 per occurrence. The Company's current practice is to insure each
active rig for its market value. Although each rig is insured for at least its
financial book value, the Company's insurance does not cover all costs that
would be required to replace each rig. In addition to hull and machinery
coverage, the Company purchases business interruption insurance with respect to
its operating rigs. Business interruption coverage applies only to business
interruptions as a result of losses insured under hull and machinery policies,
and is not available to the Company for interruptions arising from damages to
"spud cans," which are the bases of legs of jackup rigs. The deductible for
business interruption claims is 30 days. Although the Company currently
purchases business interruption insurance with respect to all of its operating
rigs, the decision to insure a rig against interruption risks is dependent on a
number of factors, including dayrate and utilization levels, and no assurance
can be made that the Company will continue to insure any or all of its operating
rigs against such risks. All of the Company's rigs that are operated
internationally are currently insured against loss due to war, including
terrorism.
Although the general and marine public liability policies cover liability
for pollution under most circumstances, they do not cover liability for bringing
a well under control following a blowout. In the case of turnkey drilling
operations, the Company maintains insurance covering the cost of controlling the
well, including any environmental damage resulting therefrom, the cost of
cleanup, and the cost of redrilling ("well control liabilities") in an amount
not less than $20 million per occurrence subject to a self-insured retention of
$200,000 per occurrence. Under turnkey drilling contracts, the Company
generally assumes the risk of the cost of well control, but on occasion the
Company receives indemnification from the customer for such risks in excess of
the $20 million insurance coverage. In many instances, however, the Company is
not indemnified by its customers for well-control liabilities. Furthermore, the
Company is not insured against certain drilling risks, such as stuck drill stem
and loss of in-hole equipment not arising from an insured peril, that could
result in delays or nonperformance of a turnkey drilling contract. In
connection with the Company's offshore contract drilling operations, the Company
is generally indemnified for any cost of well control by its customers. In any
event, however, the Company maintains insurance against such liabilities in the
amount of $50 million per occurrence subject to a self-insured retention of
$200,000 per occurrence.
The occurrence of a significant event, including pollution or environmental
damage, not fully insured or indemnified against or the failure of a customer to
meet its indemnification obligations, could materially and adversely affect the
Company's operations and financial condition. Moreover, no assurance can be
made that the Company will be able to maintain adequate insurance in the future
at rates it considers reasonable. See "--Governmental Regulations and
Environmental Matters."
6
<PAGE>
FOREIGN OPERATIONS
A significant portion of the Company's revenues is attributable to drilling
operations in foreign countries. Such activities accounted for 35 percent, 40
percent and 41 percent of the Company's consolidated revenues in 1997, 1996 and
1995, respectively. Risks associated with the Company's operations in foreign
areas include risks of war and civil disturbances or other risks that may limit
or disrupt markets, expropriation, nationalization, renegotiation or
nullification of existing contracts, foreign exchange restrictions and currency
fluctuations, foreign taxation, changing political conditions and foreign and
domestic monetary policies. To date, the Company has experienced no material
loss as a result of any of these factors. Additionally, the ability of the
Company to compete in the international drilling market may be adversely
affected by foreign governmental regulations favoring or requiring the awarding
of drilling contracts to local contractors, or by regulations requiring foreign
contractors to employ citizens of, or purchase supplies from, a particular
jurisdiction. Furthermore, foreign governmental regulations, which may in the
future become applicable to the oil and gas industry, could reduce demand for
the Company's services, or such regulations could directly affect the Company's
ability to compete for customers.
GOVERNMENTAL REGULATIONS AND ENVIRONMENTAL MATTERS
The Company's business is affected by changes in public policy and by
federal, state, foreign and local laws and regulations relating to the energy
industry. The adoption of laws and regulations curtailing exploration and
development drilling for oil and gas for economic, environmental and other
policy reasons adversely affects the Company's operations by limiting available
drilling and other opportunities in the energy service industry.
The Company's operations are subject to numerous federal, state and local
laws and regulations controlling the discharge of materials into the environment
or otherwise relating to the protection of the environment. For example, the
Company, as an operator of mobile offshore drilling units in navigable U.S.
waters and certain offshore areas, including the Outer Continental Shelf, is
liable for damages and for the cost of removing oil spills for which it may be
held responsible, subject to certain limitations. The Company's operations may
involve the use or handling of materials that may be classified as
environmentally hazardous substances. Laws and regulations protecting the
environment have generally become more stringent, and may in certain
circumstances impose "strict liability," rendering a person liable for
environmental damage without regard to negligence or fault. The Company does
not believe that environmental regulations have had any material adverse effect
on its capital expenditures, results of operations or competitive position to
date, and does not presently anticipate that any material expenditures will be
required to enable it to comply with existing laws and regulations. It is
possible, however, that modification of existing regulations or the adoption of
new regulations in the future, particularly with respect to environmental and
safety standards, could have such a material adverse effect on the Company's
operations.
The U.S. Oil Pollution Act of 1990 ("OPA '90") and similar legislation
enacted in Texas, Louisiana and other coastal states address oil spill
prevention and control and significantly expand liability exposure across all
spectrums of the oil and gas industry. The Company is of the opinion that it
maintains sufficient insurance coverage to respond to the added exposures.
OPA '90 also mandated increases in the amounts of financial responsibility
that must be certified with respect to mobile offshore drilling units and
offshore facilities (e.g., oil and gas production platforms, among others)
located in U.S. waters. Operators of mobile offshore drilling units, together
with operators of vessels, must provide evidence of financial responsibility
based on a tonnage formula, which in the Company's case, would not exceed $15
million for its largest rig located in U.S. waters. The Company has complied
with the requirement by providing evidence of adequate U.S.-based net worth.
The Company's inability to comply with the rule in the future, however, could
have a material adverse effect on its operations and financial condition.
During 1997, 45 percent of the Company's contract drilling revenues were
attributable to operations in U.S. waters, and, as of March 20, 1998, 14 of the
Company's 31 active rigs were located in U.S. waters.
OPA '90 requires lessees, permittees, or holders of a right of use for
offshore facilities (including mobile offshore drilling rigs while attached to
the ocean floor) to certify evidence of financial responsibility. This
financial responsibility requirement is $35 million for offshore facilities
located seaward of the state waters and $10 million for offshore facilities
within state waters. These amounts may be increased in the future based on
operational, health and
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other risks posed by the quantity and quality of oil being handled. The
Department of the Interior's Minerals Management Service is responsible for
promulgating regulations implementing the new financial responsibility
requirements with respect to offshore facilities. The Company's oil and gas
subsidiary, Challenger Minerals Inc., presently operates an offshore production
platform, and ADTI's business and GMDC's operations in the Gulf of Mexico are
largely dependent on oil and gas companies' drilling activities, which, in turn,
ultimately depend on their ability to meet the OPA '90 financial responsibility
requirements. The Company cannot predict the exact nature or effect of any
regulations promulgated to implement the revised responsibility requirements,
but notes that these lower limits in part correspond to existing requirements
for facilities on the Outer Continental Shelf.
AVAILABILITY OF FEDERAL INCOME TAX BENEFITS
As of December 31, 1997, the Company had approximately $413.1 million of
net operating loss carryforwards ("NOLs") for United States federal income tax
purposes, expiring from 2005 to 2009, and $9.1 million in investment tax credit
carryforwards ("Credits") expiring through the year 2000. The NOLs and the
Credits are subject to review and potential disallowance by the Internal Revenue
Service ("IRS") upon audit of the federal income tax returns of the Company.
Section 382 of the Internal Revenue Code of 1986, as amended, may impair the
future availability of the NOL's and the Credits if there is a change in
ownership of more than 50% of the Company's voting securities, including future
changes in the ownership of the voting securities. This limitation, if it
applied, would limit the utilization of the NOL's and the Credits in each
taxable year to an amount equal to the product of the federal long-term tax-
exempt bond rate prescribed monthly by the IRS and the fair market value of all
the Company's stock at the time of the ownership change. The interpretation of
Section 382 is subject to numerous uncertainties. Accordingly, while the
Company believes its loss carryforwards are available to it without limitation,
such availability is not certain, nor is it certain that such carryforwards, if
presently available without limitation, will continue to be available without
limitation.
USE OF PROCEEDS
Except as otherwise described in any Prospectus Supplement, the net
proceeds from the sale of Securities will be used for general corporate
purposes, which may include, but are not limited to, refinancings of
indebtedness, working capital, capital expenditures, acquisitions and
repurchases or redemptions of Securities.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the Company's ratio of earnings to fixed
charges for the periods indicated:
YEARS ENDED DECEMBER 31,
--------------------------------
1997 1996 1995 1994 1993
----- ----- ----- ----- ----
Ratio of Earnings to Fixed
Charges 4.05x 2.97x 2.12x 1.04x .30x
The ratio of earnings to fixed charges has been computed by dividing
earnings available for fixed charges (earnings before income taxes and
cumulative effect of accounting changes plus fixed charges less capitalized
interest) by fixed charges (interest expense plus capitalized interest and the
portion of operating lease rental expense that represents the interest factor).
The Company had no Preferred Stock outstanding for any period presented, and
accordingly, the ratio of earnings to combined fixed charges and Preferred Stock
dividends is the same as the ratio of earnings to fixed charges.
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DESCRIPTION OF DEBT SECURITIES
The following description of the Debt Securities sets forth certain general
terms and provisions of the Debt Securities to which any Prospectus Supplement
may relate (the "Offered Debt Securities"). The particular terms of the Offered
Debt Securities and the extent to which such general provisions may apply will
be described in a Prospectus Supplement relating to such Offered Debt
Securities.
The Debt Securities will be general unsecured obligations of the Company
and will constitute either senior debt securities or subordinated debt
securities. In the case of Debt Securities that will be senior debt securities
("Senior Debt Securities"), such Debt Securities will be issued under an
Indenture dated as of September 1, 1997 (the "Senior Indenture") between the
Company and Wilmington Trust Company, as trustee under the Senior Indenture (the
"Senior Trustee"), and will rank pari passu with all other unsecured and
unsubordinated debt of the Company. In the case of Debt Securities that will be
subordinated debt securities ("Subordinated Debt Securities"), such Debt
Securities will be issued under an Indenture (the "Subordinated Indenture") to
be executed by the Company and such trustee thereunder as shall be named in an
applicable Prospectus Supplement (the "Subordinated Trustee"), and will rank
junior to all Senior Indebtedness (as defined below) of the Company (including
any Senior Debt Securities) that may be outstanding from time to time. The
Senior Indenture and the Subordinated Indenture are sometimes hereinafter
referred to individually as an "Indenture" and collectively as the "Indentures,"
and the Senior Trustee and the Subordinated Trustee are sometimes hereinafter
referred to individually as a "Trustee" and collectively as the "Trustees." The
statements under this caption relating to the Debt Securities and the Indentures
are summaries only and do not purport to be complete. Such summaries make use
of terms defined in the Indentures. Wherever such terms are used herein or
particular provisions of the Indentures are referred to, such terms or
provisions, as the case may be, are incorporated by reference as part of the
statements made herein, and such statements are qualified in their entirety by
such reference. Certain defined terms in the Indentures are capitalized herein.
PROVISIONS APPLICABLE TO BOTH SENIOR AND SUBORDINATED DEBT SECURITIES
GENERAL
The Indentures do not limit the aggregate principal amount of Debt
Securities that can be issued thereunder and provide that Debt Securities may be
issued from time to time thereunder in one or more series, each in an aggregate
principal amount authorized by the Company prior to issuance. The Indentures do
not limit the amount of other unsecured indebtedness or securities that may be
issued by the Company.
Unless otherwise indicated in a Prospectus Supplement, the Debt Securities
will not benefit from any covenant or other provision that would afford Holders
of such Debt Securities special protection in the event of a highly leveraged
transaction involving the Company or that would give holders of the Debt
Securities the right to require the Company to repurchase their securities in
the event of a decline in the credit rating of the Company's debt securities
resulting from a takeover, recapitalization or similar restructuring or
otherwise.
Reference is made to the Prospectus Supplement for the following terms of
the Offered Debt Securities: (i) the title and aggregate principal amount of
the Offered Debt Securities; (ii) whether such Offered Debt Securities will be
issued in the form of one or more global securities and whether such global
securities are to be issuable in temporary global form or permanent global form,
and if so, whether beneficial owners of interests in any such global security
may exchange such interests for physical securities, and the initial depositary
for any global security; (iii) the date or dates on which the principal of and
premium, if any, on the Offered Debt Securities is payable or the method of
determination thereof; (iv) the rate or rates, or the method of determination
thereof, at which the Offered Debt Securities will bear interest, if any; (v)
whether and under what circumstances Additional Amounts with respect to the
Offered Debt Securities will be payable; (vi) the date or dates from which such
interest will accrue; (vii) the interest payment dates on which such interest
will be payable and the record date for the interest payable on any Offered Debt
Securities on any interest payment date; (viii) the place or places where the
principal of, premium (if any) and interest and any Additional Amounts with
respect to the Offered Debt Securities will be payable; (ix) the period or
periods within which, the price or prices at which and the terms and conditions
upon which Offered Debt Securities may be redeemed, in whole or in part, at the
option of the Company, if the Company is to have that option; (x) the
obligation, if any, of the Company to redeem, purchase or repay Offered Debt
Securities pursuant to any sinking fund or analogous provisions
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or at the option of a holder thereof and the period or periods within which, the
price or prices (whether denominated in cash, securities or otherwise) at which
and the terms and conditions upon which Offered Debt Securities will be
redeemed, purchased or repaid in whole or in part pursuant to such obligation;
(xi) if other than denominations of $1,000 and any integral multiple thereof,
the denomination in which the Offered Debt Securities will be issuable; (xii)
the currency or currencies (including composite currencies), if other than U.S.
dollars, in which payment of principal, premium (if any) and interest on and any
Additional Amounts with respect to the Offered Debt Securities will be payable;
(xiii) if such payments are to be payable, at the election of the Company or a
holder thereof, in a currency or currencies (including composite currencies)
other than that in which the Offered Debt Securities are stated to be payable,
the currency or currencies (including composite currencies) in which such
payments as to which such election is made will be payable, and the periods
within which and the terms and conditions upon which such election is to be
made; (xiv) if the amount of such payments may be determined with reference to
any commodities, currencies or indices, values, rates or prices or any other
index or formula, the manner in which such amounts will be determined; (xv) if
other than the entire principal amount thereof, the portion of the principal
amount of Offered Debt Securities that will be payable upon declaration of
acceleration of the maturity thereof; (xvi) any additional means of satisfaction
and discharge of the applicable Indenture and any additional conditions or
limitations to discharge with respect to Offered Debt Securities pursuant to the
applicable Indenture or any modifications of or deletions from such conditions
or limitations; (xvii) any deletions or modifications of or additions to the
Events of Default or covenants of the Company pertaining to the Offered Debt
Securities; (xviii) any restrictions or other provisions with respect to the
transfer or exchange of Offered Debt Securities; (xix) if the Offered Debt
Securities are to be convertible into or exchangeable for capital stock, other
debt securities (including Debt Securities), warrants, other equity securities
or any other securities or property of the Company or any other Person, at the
option of the Company or the holder or upon the occurrence of any condition or
event, the terms and conditions for such conversion or exchange; and (xx) any
other terms of the Offered Debt Securities.
The Debt Securities will be issued in registered form. No service charge
will be made for any registration of transfer or exchange of the Debt
Securities, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Substantially all of the Company's operating income and cash flow is
generated by its subsidiaries. As a result, funds necessary to meet the
Company's debt service obligations are provided in part by distributions or
advances from its subsidiaries. Under certain circumstances, contractual and
legal restrictions, as well as the financial condition and operating
requirements of the Company's subsidiaries, could limit the Company's ability to
obtain cash from its subsidiaries for the purpose of meeting its debt service
obligations, including the payment of principal and interest on Debt Securities.
The claims of creditors of the subsidiaries will effectively have priority with
respect to the assets and earnings of such companies over the claims of
creditors of the Company, including the holders of Debt Securities.
Offered Debt Securities may be sold at a discount (which may be
substantial) below their stated principal amount bearing no interest or interest
at a rate that at the time of issuance is below market rates. Any material
United States federal income tax consequences and other special considerations
applicable thereto will be described in the Prospectus Supplement relating to
any such Offered Debt Securities.
If any of the Offered Debt Securities are sold for any foreign currency or
currency unit (including a composite currency) or if the principal, premium (if
any) or interest on or any Additional Amounts with respect to any of the Offered
Debt Securities is payable in any foreign currency or currency unit, the
restrictions, elections, tax consequences, specific terms and other information
with respect to such Offered Debt Securities and such foreign currency or
currency unit will be set forth in the Prospectus Supplement relating thereto.
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Indentures provide that the Company will not, in any transaction or
series of transactions, consolidate with or merge into any Person, or sell,
lease, convey, transfer or otherwise dispose of all or substantially all of its
assets to any Person, unless: (i) either (a) the Company shall be the continuing
corporation or (b) the Person (if other than the Company) formed by such
consolidation or into which the Company is merged, or the Person which acquires,
by sale, lease, conveyance, transfer or other disposition, all or substantially
all of the assets of the Company, shall be organized
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and validly existing under the laws of the United States of America, any
political subdivision thereof or any state thereof or the District of Columbia,
and shall expressly assume, by a supplemental indenture, the due and punctual
payment of the principal of (and premium, if any) and interest on and Additional
Amounts with respect to all the Debt Securities and the performance of the
Company's covenants and obligations under such Indenture and the Debt
Securities; (ii) immediately after giving effect to such transaction or series
of transactions, no default or Event of Default shall have occurred and be
continuing or would result therefrom; and (iii) certain other conditions are
met.
EVENTS OF DEFAULT
Unless otherwise provided with respect to any series of Debt Securities,
the following are Events of Default under each Indenture with respect to the
Debt Securities of such series issued under such Indenture: (i) default by the
Company for 30 days in payment of any interest or any Additional Amounts with
respect to any Debt Securities of such series; (ii) default by the Company in
the payment of (A) any principal of any Debt Securities of such series at its
maturity or (B) of premium (if any) on any Debt Securities of such series when
the same becomes due and payable; (iii) default by the Company in the deposit of
any sinking fund payment, when and as due by the terms of a Debt Security of
such series, continued for 30 days; (iv) default by the Company in compliance
with any of its other covenants or agreements in, or provisions of, the Debt
Securities of such series or the applicable Indenture (other than an agreement,
covenant or provision that has expressly been included in such Indenture solely
for the benefit of one or more series of Debt Securities other than that series)
which shall not have been remedied within 90 days after written notice by the
Trustee or by the holders of at least 25% in principal amount of the then
outstanding Debt Securities affected by such default; (v) certain events
involving bankruptcy, insolvency or reorganization of the Company; and (vi) any
other Event of Default provided with respect to Debt Securities of that series.
The Indentures provide that the Trustee may withhold notice to the holders of
the Debt Securities of any default or Event of Default (except in payment of
principal of, premium (if any) and interest on and Additional Amounts or any
sinking fund installment with respect to Debt Securities of such series) if the
Trustee considers it in the interest of the holders of such Debt Securities to
do so.
Each Indenture provides that if an Event of Default with respect to any
Debt Securities of any series at the time outstanding (other than an Event of
Default specified in clause (v) above) occurs and is continuing, the applicable
Trustee or the holders of at least 25% in principal amount of the then
outstanding Debt Securities of the series affected by such default (or in the
event of a default pursuant to (iv) above, 25% in principal amount of the
securities affected) may declare the principal of and accrued and unpaid
interest on all then outstanding Debt Securities of such series or of all series
affected, as the case may be, to be due and payable. Upon such a declaration,
the amounts due and payable on such Debt Securities will be due and payable
immediately. If an Event of Default relating to certain events of bankruptcy,
insolvency or reorganization of the Company occurs, the principal of and
interest on all the Debt Securities will become and be immediately due and
payable without any declaration, notice or other act on the part of the Trustee
or any holder. Under certain circumstances, the holders of a majority in
principal amount of the outstanding Debt Securities of the series affected by
such default or all series, as the case may be, may rescind any such
acceleration and its consequences.
Each Indenture provides that no holder of a Debt Security of any series may
pursue any remedy under such Indenture unless (i) the holder gives the
applicable Trustee written notice of a continuing Event of Default with respect
to such series, (ii) the holders of at least 25% in principal amount of the then
outstanding Debt Securities of such series make a written request to the
applicable Trustee to pursue such remedy, (iii) such holder or holders offer to
the applicable Trustee indemnity reasonably satisfactory to such Trustee, (iv)
the Trustee shall have failed to act for a period of 60 days after receipt of
such notice and offer of indemnity and (v) during such 60-day period, the
holders of a majority in principal amount of the Debt Securities of that series
do not give such Trustee a direction inconsistent with the request; however,
such provision does not affect the right of a holder of a Debt Security to sue
for enforcement of any overdue payment thereon.
Each Indenture provides that, the holders of a majority in principal amount
of the then outstanding Debt Securities of a series or of all series affected,
as the case may be, may direct the time, method and place of conducting any
proceeding for any remedy available to the applicable Trustee or exercising any
trust or power conferred on it not relating to or arising under an Event of
Default, subject to certain limitations specified in such Indenture. Each
Indenture requires the annual filing by the Company with the applicable Trustee
of a written statement as to compliance with the covenants contained in such
Indenture.
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MODIFICATION AND WAIVER
Modifications and amendments of each Indenture or the Debt Securities may
be made by the Company and the applicable Trustee with the consent of the
Holders of a majority in principal amount of the outstanding Debt Securities of
all series affected by such amendment (acting as one class) under the applicable
Indenture; provided, however, that no such modification or amendment may,
without the consent of the Holder of each Debt Security then outstanding
affected thereby, (i) reduce the amount of Debt Securities whose holders must
consent to an amendment, supplement or waiver; (ii) reduce the rate of or change
the time for payment of interest, including default interest, on any Debt
Security; (iii) reduce the principal of or premium on, or change the stated
maturity of any Debt Security; (iv) reduce the premium, if any, payable upon the
redemption of any Debt Security or change the time at which any Debt Security
may or shall be redeemed; (v) change any obligation of the Company to pay
Additional Amounts with respect to any Debt Security; (vi) make any Debt
Security payable in money other than that stated in the Debt Security; (vii)
impair the right to institute suit for the enforcement of any payment of
principal of, premium (if any) or interest on or any Additional Amounts with
respect to any Debt Security; (vii) make any change in the percentage of
principal amount of Debt Securities necessary to waive compliance with certain
provisions of the applicable Indenture; or (viii) waive a continuing Default or
Event of Default in the payment of principal of, premium (if any) or interest on
or Additional Amounts with respect to the Debt Securities. In addition, in the
case of the Subordinated Debt Securities, no modification or amendment may be
made to the Subordinated Indenture with respect to the subordination of any
Subordinated Debt Security in a manner adverse to the Holder thereof without the
consent of the Holder of each Subordinated Debt Security then outstanding
affected thereby. The Indentures provide that amendments and supplements to, or
waivers of any provision of, such Indenture may be made by the Company and the
Trustee without the consent of any holders of Debt Securities in certain
circumstances, including (a) to cure any ambiguity, omission, defect or
inconsistency, (b) to provide for the assumption of the obligations of the
Company under such Indenture upon the merger, consolidation or sale or other
disposition of all or substantially all of the assets of the Company, (c) to
provide for uncertificated Debt Securities in addition to or in place of
certificated Debt Securities, (d) to secure any series of Debt Securities or
provide for guarantees of any series of Debt Securities, (e) to comply with any
requirement in order to effect or maintain the qualification of the Indenture
under the Trust Indenture Act of 1939, or (f) to make any change that does not
adversely affect any outstanding Debt Securities of any series in any material
respect.
The Indentures provide that the holders of a majority in principal amount
of the then outstanding Debt Securities of any series or of all series (acting
as one class) may waive any existing or past default or Event of Default with
respect to such series or all series, as the case may be, except (a) in the
payment of the principal of, or premium (if any) or interest on or any
Additional Amounts with respect to any Debt Securities or (b) in respect of a
provision that under the proviso to the prior paragraph cannot be amended or
supplemented without the consent of each Holder affected.
DEFEASANCE
The Indentures provide that the Company may, at its option, elect (a) to
have all of the obligations of the Company discharged with respect to the Debt
Securities (except for certain obligations to register the transfer or exchange
of Debt Securities, replace stolen, lost or mutilated Debt Securities or
maintain paying agencies and hold moneys for payment in trust) ("legal
defeasance") or (b) to have its obligations terminated with respect to certain
restrictive covenants of the Indenture ("covenant defeasance"), in which event
certain Events of Default will no longer constitute Events of Default with
respect to any Debt Securities, upon the deposit with the Trustee, in trust, of
money or U.S. Government Obligations, or a combination thereof, which through
the payment of interest thereon and principal thereof in accordance with their
terms will provide money in an amount sufficient to pay all the principal of
(and premium, if any, on) and interest on such Debt Securities on the dates such
payments are due in accordance with the terms of the Debt Securities on their
stated maturity or any redemption date. The Company is required to deliver to
the Trustee an Opinion of Counsel to the effect that the deposit and related
defeasance would not cause the Holders of the Debt Securities to recognize
income, gain or loss for federal income tax purposes and, in the case of a legal
defeasance pursuant to clause (a), such opinion must be based upon a ruling from
the United Stated Internal Revenue Service or a change in law to that effect.
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GOVERNING LAW
Each Indenture and the Debt Securities will be governed by and construed in
accordance with the laws of the State of New York, without giving effect to
applicable principles of conflicts of laws to the extent the laws of another
jurisdiction would be required thereby.
TRUSTEES
Each Indenture contains certain limitations on the right of the applicable
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. Each Trustee is permitted to engage in
other transactions, however, if it acquires any conflicting interest (as
defined), it must eliminate such conflict or resign.
FORM, EXCHANGE, REGISTRATION AND TRANSFER
Debt Securities of any series will be exchangeable for other Debt
Securities of the same series and of a like aggregate principal amount and tenor
of different authorized denominations in accordance with the applicable
Indenture. Debt Securities may be presented for registration of transfer (with
the form of transfer endorsed thereon duly executed), at the office of the
Security Registrar or at the office of any transfer agent designated by the
Company for such purpose with respect to any series of Debt Securities and
referred to in an applicable Prospectus Supplement, without service charge and
upon payment of any taxes and other governmental charges as described in the
applicable Indenture. Such transfer or exchange will be effected upon the
Security Registrar or such transfer agent, as the case may be, being satisfied
with the documents of title and identity of the Person making the request. The
Company has appointed the Trustee under each Indenture as Security Registrar for
Debt Securities issued thereunder. If a Prospectus Supplement refers to any
transfer agents (in addition to the Security Registrar) initially designated by
the Company with respect to any series of Debt Securities, the Company may at
any time rescind the designation of any such transfer agent or approve a change
in the location through which any such transfer agent acts. The Company is
required to maintain an office or agency (which may be the office of the
Trustee, the Security Registrar or the Paying Agent) in each Place of Payment
for such series. The Company may at any time designate additional transfer
agents with respect to any series of Debt Securities.
In the event of any redemption in part, the Company shall not be required
to (i) register the transfer or exchange of any Debt Security of any series
during a period beginning 15 Business Days prior to the mailing of the relevant
notice of redemption and ending on the close of business on the day of mailing
of such notice or (ii) register the transfer of or exchange any Debt Security
called for redemption in whole or in part, except the unredeemed portion of any
Debt Security being redeemed in part.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal, premium (if any) and interest on and any Additional Amounts with
respect to Debt Securities will be made in Dollars at the office of the
applicable Trustee, except that, at the option of the Company, payment of such
amounts may be made by check mailed to the holder's registered address or with
respect to Global Debt Securities, by wire transfer. Unless otherwise indicated
in an applicable Prospectus Supplement, payment of any installment of interest
on Debt Securities will be made to the Person in whose name such Debt Security
is registered at the close of business on the record date for such interest.
Unless otherwise indicated in an applicable Prospectus Supplement, the
Trustee will be designated as a Paying Agent for the Company for payments with
respect to Debt Securities issued under the applicable Indenture. The Company
may at any time designate additional Paying Agents or rescind the designation of
any Paying Agent or approve a change in the office through which any Paying
Agent acts.
Subject to the requirements of any applicable abandoned property laws, each
Trustee and Paying Agent shall pay to the Company upon written request any money
held by them for the payment of principal, premium (if any), interest or any
Additional Amounts that remains unclaimed for two years after the date upon
which such payment shall have become due. After payment to the Company, Holders
entitled to the money must look to the Company for
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payment as general creditors unless an applicable abandoned property law
designates another Person, and all liability of such Trustee or Paying Agent
with respect to such money shall cease.
BOOK-ENTRY DEBT SECURITIES
The Debt Securities of a series may be issued, in whole or in part, in the
form of one or more global Debt Securities that would be deposited with a
depositary or its nominee identified in the applicable Prospectus Supplement.
Global Debt Securities may be issued in either temporary or permanent form. The
specific terms of any depositary arrangement with respect to any portion of a
series of Debt Securities and the rights of, and limitations on, owners of
beneficial interests in any such global Debt Security representing all or a
portion of a series of Debt Securities will be described in the applicable
Prospectus Supplement.
PROVISIONS APPLICABLE SOLELY TO SENIOR DEBT SECURITIES
Limitation on Liens. The Senior Indenture provides that the Company will
not, and will not permit any of its Subsidiaries to, issue, assume or guarantee
any Indebtedness for borrowed money secured by any Lien upon any Principal
Property or any shares of stock or indebtedness of any Subsidiary that owns or
leases a Principal Property (whether such Principal Property, shares of stock or
indebtedness are now owned or hereafter acquired) without making effective
provision whereby the Senior Debt Securities (together with, if the Company
shall so determine, any other Indebtedness or other obligation of the Company)
shall be secured equally and ratably with (or, at the option of the Company,
prior to) the Indebtedness so secured for so long as such Indebtedness is so
secured. The foregoing restrictions do not, however, apply to Indebtedness
secured by Permitted Liens.
"Permitted Liens" means (i) Liens existing on the date of original issuance
of a series of Senior Debt Securities; (ii) Liens on property or assets of, or
any shares of stock of, or other equity interests in, or indebtedness of, any
Person existing at the time such Person becomes a Subsidiary of the Company or
at the time such Person is merged into or consolidated with the Company or any
of its Subsidiaries or at the time of a sale, lease or other disposition of the
properties of a Person (or a division thereof) as an entirety or substantially
as an entirety to the Company or a Subsidiary; (iii) Liens in favor of the
Company or any of its Subsidiaries; (iv) Liens in favor of governmental bodies
to secure progress or advance payments; (v) Liens securing industrial revenue or
pollution control bonds; (vi) Liens on assets existing at the time of
acquisition thereof, securing all or any portion of the cost of acquiring,
constructing, improving, developing or expanding such assets or securing
Indebtedness incurred prior to, at the time of, or within 24 months after, the
later of the acquisition, the completion of construction, improvement,
development or expansion or the commencement of commercial operation of such
assets, for the purpose of (a) financing all or any part of the purchase price
of such assets or (b) financing all or any part of the cost of construction,
improvement, development or expansion of any such assets; (vii) statutory liens
or landlords', carriers', warehouseman's, mechanics', suppliers', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business and
with respect to amounts not yet delinquent or being contested in good faith by
appropriate proceedings; (viii) Liens on current assets of the Company or any
Subsidiary securing Indebtedness of the Company or such Subsidiary,
respectively; (ix) Liens on the stock, partnership or other equity interest of
the Company or any Subsidiary in any Joint Venture or any Subsidiary that owns
an equity interest in such Joint Venture to secure Indebtedness, provided the
amount of such Indebtedness is contributed and/or advanced solely to such Joint
Venture; and (x) any extensions, substitutions, replacements or renewals in
whole or in part of a Lien enumerated in clauses (i) through (ix) above.
Notwithstanding the foregoing, the Company and its Subsidiaries may,
without securing the Senior Debt Securities, issue, assume or guarantee
Indebtedness that would otherwise be subject to the foregoing restrictions in an
aggregate principal amount that, together with all other such Indebtedness of
the Company and its Subsidiaries that would otherwise be subject to the
foregoing restrictions (not including Indebtedness permitted to be secured under
the definition of Permitted Liens) and the aggregate amount of Attributable
Indebtedness deemed outstanding with respect to Sale/Leaseback Transactions
(other than those in connection with which the Company has voluntarily retired
any of the Senior Debt Securities, any Pari Passu Indebtedness or any Funded
Indebtedness pursuant to clause (c) below under the heading "Limitation on
Sale/Leaseback Transactions") does not at any one time exceed 15% of
Consolidated Net Tangible Assets of the Company and its consolidated
subsidiaries.
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Limitation on Sale/Leaseback Transactions. The Senior Indenture provides
that the Company will not, and will not permit any Subsidiary to, enter into any
Sale/Leaseback Transaction with any person (other than the Company or a
Subsidiary) unless: (a) the Company or such Subsidiary would be entitled to
incur Indebtedness in a principal amount equal to the Attributable Indebtedness
with respect to such Sale/Leaseback Transaction secured by a Lien on the
property subject to such Sale/Leaseback Transaction pursuant to the covenant
described under "Limitation on Liens" above without equally and ratably securing
the Senior Debt Securities pursuant to such covenant; (b) after the date of the
first series of Senior Debt Securities issued under the Senior Indenture and
within a period commencing nine months prior to the consummation of such
Sale/Leaseback Transaction and ending nine months after the consummation
thereof, the Company or such Subsidiary shall have expended for property used or
to be used in the ordinary course of business of the Company and its
Subsidiaries an amount equal to all or a portion of the net proceeds of such
Sale/Leaseback Transaction and the Company shall have elected to designate such
amount as a credit against such Sale/Leaseback Transaction (with any such amount
not being so designated to be applied as set forth in clause (c) below or as
otherwise permitted); or (c) the Company, during the nine-month period after the
effective date of such Sale/Leaseback Transaction, shall have applied to either
(i) the voluntary defeasance or retirement of any Senior Debt Securities, any
Pari Passu Indebtedness or any Funded Indebtedness or (ii) the acquisition of
one or more Principal Properties at fair value, an amount equal to the greater
of the net proceeds of the sale or transfer of the property leased in such
Sale/Leaseback Transaction and the fair value, as determined by the Board of
Directors of the Company, of such property at the time of entering into such
Sale/Leaseback Transaction (in either case adjusted to reflect the remaining
term of the lease and any amount expended by the Company as set forth in clause
(b) above), less an amount equal to the sum of the principal amount of Senior
Debt Securities, Pari Passu Indebtedness and Funded Indebtedness voluntarily
defeased or retired by the Company plus any amount expended to acquire any
Principal Properties at fair value, within such nine-month period and not
designated as a credit against any other Sale/Leaseback Transaction entered into
by the Company or any Subsidiary during such period.
DEFINITIONS
"Attributable Indebtedness," when used with respect to any Sale/Leaseback
Transaction, means, as at the time of determination, the present value
(discounted at the rate set forth or implicit in the terms of the lease included
in such transaction) of the total obligations of the lessee for rental payments
(other than amounts required to be paid on account of taxes, maintenance,
repairs, insurance, assessments, utilities, operating and labor costs and other
items which do not constitute payments for property rights) during the remaining
term of the lease included in such Sale/Leaseback Transaction (including any
period for which such lease has been extended). In the case of any lease which
is terminable by the lessee upon the payment of a penalty, such net amount shall
be the lesser of the net amount determined assuming termination upon the first
date such lease may be terminated (in which case the net amount shall also
include the amount of the penalty, but no rent shall be considered as required
to be paid under such lease subsequent to the first date upon which it may be so
terminated) or the net amount determined assuming no such termination.
"Consolidated Net Tangible Assets" means the total amount of assets (less
applicable reserves and other properly deductible items) after deducting (1) all
current liabilities (excluding the amount of those which are by their terms
extendable or renewable at the option of the obligor to a date more than 12
months after the date as of which the amount is being determined and current
maturities of long-term debt) and (2) all goodwill, trade names, trademarks,
patents, unamortized debt discount and expense and other like intangible assets,
all as set forth on the most recent quarterly balance sheet of the Company and
its consolidated subsidiaries and determined in accordance with GAAP.
"Funded Indebtedness" means all Indebtedness (including Indebtedness
incurred under any revolving credit, letter of credit or working capital
facility) that matures by its terms, or that is renewable at the option of any
obligor thereon to a date more than one year after the date on which such
Indebtedness is originally incurred.
"Indebtedness" of any Person means, without duplication, (i) all
indebtedness of such Person for borrowed money (whether or not the recourse of
the lender is to the whole of the assets of such Person or only to a portion
thereof), (ii) all obligations of such Person evidenced by bonds, debentures,
notes or other similar instruments, (iii) all obligations of such Person in
respect of letters of credit or other similar instruments (or reimbursement
obligations with respect thereto), other than standby letters of credit,
performance bonds and other obligations issued by or for the account of such
Person in the ordinary course of business, to the extent not drawn or, to the
extent drawn, if such drawing is reimbursed not later than the third Business
Day following demand for reimbursement, (iv) all obligations
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of such Person to pay the deferred and unpaid purchase price of property or
services, except trade payables and accrued expenses incurred in the ordinary
course of business, (v) all Capitalized Lease Obligations of such Person, (vi)
all Indebtedness of others secured by a Lien on any asset of such Person,
whether or not such Indebtedness is assumed by such Person (provided that if the
obligations so secured have not been assumed in full by such Person or are not
otherwise such Person's legal liability in full, then such obligations shall be
deemed to be in an amount equal to the greater of (a) the lesser of (1) the full
amount of such obligations and (2) the fair market value of such assets, as
determined in good faith by the Board of Directors of such Person, which
determination shall be evidenced by a Board Resolution, and (b) the amount of
obligations as have been assumed by such Person or which are otherwise such
Person's legal liability), and (vii) all Indebtedness of others (other than
endorsements in the ordinary course of business) guaranteed by such Person to
the extent of such guarantee.
"Joint Venture" means (1) with respect to properties located in the United
States, any partnership, corporation or other entity, in which up to and
including 50% of the partnership interests, outstanding voting stock or other
equity interests is owned, directly or indirectly, by the Company and/or one or
more subsidiaries, and (2) with respect to properties located outside the United
States, any partnership, corporation or other entity, in which up to and
including 60% of the partnership interests, outstanding voting stock or other
equity interests is owned, directly or indirectly, by the Company and/or one or
more Subsidiaries. A Joint Venture shall not be a Subsidiary.
"Lien" means any mortgage, pledge, lien, encumbrance, charge or security
interest. For purposes of the Indenture, the Company or any Subsidiary of the
Company shall be deemed to own subject to a Lien any asset which it has acquired
or holds subject to the interest of a vendor or lessor under any conditional
sale agreement, Capitalized Lease Obligation or other title retention agreement
relating to such asset.
"Pari Passu Indebtedness" means any Indebtedness of the Company, whether
outstanding on the issue date of Senior Debt Securities or thereafter created,
incurred or assumed, unless, in the case of any particular Indebtedness, the
instrument creating or evidencing the same or pursuant to which the same is
outstanding expressly provides that such Indebtedness shall be subordinated in
right of payment to the Senior Debt Securities.
"Principal Property" means any drilling rig or drillship, or integral
portion thereof, owned or leased by the Company or any Subsidiary and used for
drilling offshore oil and gas wells, which, in the opinion of the Board of
Directors, is of material importance to the business of the Company and its
Subsidiaries taken as a whole, but no such drilling rig or drillship, or portion
thereof, shall be deemed of material importance if its net book value (after
deducting accumulated depreciation) is less than 2% of Consolidated Net Tangible
Assets.
"Sale/Leaseback Transaction" means any arrangement with any Person pursuant
to which the Company or any Subsidiary leases any Principal Property that has
been or is to be sold or transferred by the Company or the Subsidiary to such
Person, other than (1) temporary leases for a term, including renewals at the
option of the lessee, of not more than five years, (2) leases between the
Company and a Subsidiary or between Subsidiaries, (3) leases of Principal
Property executed by the time of, or within 12 months after the latest of, the
acquisition, the completion of construction or improvement, or the commencement
of commercial operation of the Principal Property, and (4) arrangements pursuant
to any provision of law with an effect similar to the former Section 168(f)(8)
of the Internal Revenue Code of 1954.
PROVISIONS APPLICABLE SOLELY TO SUBORDINATED DEBT SECURITIES
The payment of the principal of, premium, if any, and interest on and any
Additional Amounts with respect to the Subordinated Debt Securities is expressly
subordinated, to the extent and in the manner set forth in the Subordinated
Indenture, to the prior payment in full of all Senior Indebtedness of the
Company.
The Subordinated Indenture provides that no payment may be made by or on
behalf of the Company on account of the principal of, premium, if any, or
interest on or any Additional Amounts with respect to the Subordinated Debt
Securities, or to acquire any of the Subordinated Debt Securities (including
repurchases of Subordinated Debt Securities at the option of the Holder thereof)
for cash or property (other than certain junior securities of the Company), or
on account of the redemption provisions of the Subordinated Debt Securities, in
the event of (i) default in the payment of any principal of, premium, if any, or
interest on any Senior Indebtedness of the Company when it becomes due and
payable,
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whether at maturity or at a date fixed for prepayment or by declaration or
otherwise (a "Payment Default"), unless and until such Payment Default has been
cured or waived or otherwise has ceased to exist, or (ii) any other event of
default with respect to any Designated Senior Indebtedness permitting the
holders of such Designated Senior Indebtedness (or a trustee or other
representative on behalf of the holders thereof) to declare such Designated
Senior Indebtedness due and payable prior to the date on which it would
otherwise have become due and payable, upon written notice thereof to the
Company and the Subordinated Trustee by any holders of such Designated Senior
Indebtedness (or a trustee or other representative on behalf of the holders
thereof) (the "Default Notice"), unless and until such event of default shall
have been cured or waived or otherwise has ceased to exist, provided that such
payments may not be prevented under clause (ii) above for more than 179 days
after an applicable Default Notice has been received by the Subordinated Trustee
unless the Designated Senior Indebtedness in respect of which such event of
default exists has been declared due and payable in its entirety, in which case
no such payment may be made until such acceleration has been rescinded or
annulled or such Designated Senior Indebtedness has been paid in full. In the
case of (ii) above, no event of default that existed or was continuing on the
date of any Default Notice (whether or not such event of default is on the same
issue of Designated Senior Indebtedness) may be made the basis for the giving of
a second Default Notice, and only one such Default Notice may be given in any
365-day period.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company (other than certain junior securities of
the Company) is received by the Subordinated Trustee or the Holders of
Subordinated Debt Securities at a time when such payment or distribution is
prohibited by the foregoing provisions, then, unless such payment or
distribution is no longer prohibited by the foregoing provisions, such payment
or distribution shall be received and held in trust by the Subordinated Trustee
or such Holders or the Paying Agent for the benefit of the holders of Senior
Indebtedness of the Company, and shall be paid or delivered by the Subordinated
Trustee or such Holders or the Paying Agent, as the case may be, to the holders
of the Senior Indebtedness of the Company remaining unpaid or unprovided for or
their representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing such Senior Indebtedness
of the Company may have been issued, ratably according to the aggregate amounts
remaining unpaid on account of the Senior Indebtedness of the Company held or
represented by each, for application to the payment of all Senior Indebtedness
in full after giving effect to any concurrent payment or distribution to or for
the holders of such Senior Indebtedness.
Upon any distribution of assets of the Company or upon any dissolution,
winding up, total or partial liquidation or reorganization of the Company,
whether voluntary or involuntary, in bankruptcy, insolvency, receivership or a
similar proceeding or upon assignment for the benefit of creditors, (i) the
holders of all Senior Indebtedness of the Company will first be entitled to
receive payment in full before the Holders of Subordinated Debt Securities are
entitled to receive any payment on account of the principal of, premium, if any,
and interest on or any Additional Amounts with respect to the Subordinated Debt
Securities (other than certain junior securities of the Company) and (ii) any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities (other than certain junior securities of
the Company) to which the Holders of Subordinated Debt Securities or the
Subordinated Trustee on behalf of such Holders would be entitled, except for the
subordination provisions contained in the Subordinated Indenture, will be paid
by the liquidating trustee or agent or other person making such a payment or
distribution directly to the holders of Senior Indebtedness of the Company or
their representative, ratably according to the respective amounts of Senior
Indebtedness held or represented by each, to the extent necessary to make
payment in full of all such Senior Indebtedness remaining unpaid, after giving
effect to any concurrent payment or distribution to the holders of such Senior
Indebtedness.
No provision contained in the Subordinated Indenture or the Subordinated
Debt Securities affects the obligation of the Company, which is absolute and
unconditional, to pay, when due, principal of, premium, if any, and interest on
and any Additional Amounts with respect to the Subordinated Debt Securities.
The subordination provisions of the Subordinated Indenture and the Subordinated
Debt Securities do not prevent the occurrence of any default or Event of Default
under the Subordinated Indenture or limit the rights of the Subordinated Trustee
or any Holder of Subordinated Debt Securities, subject to the two preceding
paragraphs, to pursue any other rights or remedies with respect to the
Subordinated Debt Securities.
As a result of these subordination provisions, in the event of the
liquidation, bankruptcy, reorganization, insolvency, receivership or similar
proceeding or an assignment for the benefit of the creditors of the Company or
any
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of its subsidiaries or a marshaling of assets or liabilities of the Company and
its subsidiaries, Holders of Subordinated Debt Securities may receive ratably
less than other creditors.
The term "Senior Indebtedness" of the Company, unless otherwise provided
with respect to the Subordinated Debt Securities of a series and described in
the Prospectus Supplement relating thereto, is defined in the Subordinated
Indenture as (i) all Indebtedness (as described above under "--Provisions
Applicable Solely to Senior Debt Securities--Definitions") of the Company,
unless, by the terms of the instrument creating or evidencing such Indebtedness,
it is provided that such Indebtedness is not superior in right of payment to the
Subordinated Debt Securities or to other Indebtedness which is pari passu with
or subordinated to the Subordinated Debt Securities and (ii) any modifications,
refunding, deferrals, renewals or extensions of any such Indebtedness or
securities, notes or other evidences of Indebtedness issued in exchange for such
Indebtedness; provided that in no event shall "Senior Indebtedness" include (a)
Indebtedness of the Company owed or owing to any subsidiary of the Company or
any officer, director or employee of the Company or any subsidiary of the
Company, (b) Indebtedness to trade creditors or (c) any liability for taxes owed
or owing by the Company.
The term "Designated Senior Indebtedness," unless otherwise provided with
respect to the Subordinated Debt Securities of a series and described in the
Prospectus Supplement relating thereto, is defined in the Subordinated Indenture
to mean any Senior Indebtedness of the Company that (i) in the instrument
evidencing the same or the assumption or guarantee thereof (or related documents
to which the Company is a party) is expressly designated as "Designated Senior
Indebtedness" for purposes of the Subordinated Indenture and (ii) satisfies such
other conditions as may be provided with respect to the Subordinated Debt
Securities of such series (provided that such instrument or documents may place
limitations and conditions on the rights of the holders of such Senior
Indebtedness to exercise the rights of Designated Senior Indebtedness).
If Subordinated Debt Securities are issued under the Subordinated
Indenture, the aggregate principal amount of Senior Indebtedness outstanding as
of a recent date will be set forth in the Prospectus Supplement. The
Subordinated Indenture does not restrict the amount of Senior Indebtedness that
the Company may incur.
DESCRIPTION OF CAPITAL STOCK
GENERAL
The authorized capital stock of the Company consists of (a) 300,000,000
shares of Common Stock and (b) 10,000,000 shares of Preferred Stock issuable in
series. As of March 13, 1998, there were 172,688,994 shares of Common Stock
issued and outstanding. As of the date hereof, there are no shares of Preferred
Stock issued or outstanding. No class of capital stock of the Company entitles
the holder thereof to any preemptive rights to purchase or subscribe for shares
of any class or any other securities, other than as the Board of Directors may
fix.
The following description of certain terms of the capital stock of the
Company is only a summary of these terms of the capital stock considered by the
Company to be material to a prospective investor in the capital stock. This
description is subject to the detailed provisions of the Company's Restated
Certificate of Incorporation, as amended (the "Certificate"), and by-laws as in
effect (the "By-laws"). This description does not purport to be complete or to
give full effect to the terms of the provisions of statutory or common law and
is subject to, and qualified in its entirety by reference to, the Certificate
and the By-laws, each of which is filed as an exhibit to the Registration
Statement of which this Prospectus is a part.
COMMON STOCK
All issued and outstanding shares of Common Stock are fully paid and
nonassessable, and any shares of Common Stock offered hereby will, upon full
payment of the purchase price therefor, likewise be fully paid and
nonassessable. Each share of Common Stock is entitled to participate equally in
dividends, as and when declared by the Company's Board of Directors, and in the
distribution of assets in the event of liquidation, subject in all cases to any
prior rights of outstanding shares of Preferred Stock. The shares of Common
Stock have no preemptive or conversion rights, redemption rights, or sinking
fund provisions.
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The outstanding shares of Common Stock are listed on the New York Stock
Exchange and trade under the symbol "GLM."
PREFERRED STOCK
The following description of certain terms of the Preferred Stock is only a
summary of these terms of the Preferred Stock considered by the Company to be
material to a prospective investor in the Preferred Stock. This description
sets forth certain general terms and provisions of the Preferred Stock to which
a Prospectus Supplement may relate. Specific terms of any series of Preferred
Stock offered by a Prospectus Supplement will be described in the Prospectus
Supplement relating to such series. The description set forth below is subject
to and qualified in its entirety by reference to the certificate of designations
establishing a particular series of Preferred Stock, which will be filed with
the Commission in connection with the offering of such series.
Under the Certificate, the Board of Directors of the Company is authorized,
without further stockholder action, to provide for the issuance of up to
10,000,000 shares of Preferred Stock in one or more series. The rights,
preferences, privileges, and restrictions, including dividend rights, voting
rights, conversion rights, terms of redemption, and liquidation preferences, of
the Preferred Stock of each series will be fixed or designated by the Board of
Directors pursuant to a certificate of designations. The specific terms of a
particular series of Preferred Stock offered hereby will be described in a
Prospectus Supplement relating to such series and will include the following:
(a) the maximum number of shares to constitute the series and the distinctive
designation thereof; (b) the annual dividend rate, if any, on shares of the
series (or the method of calculating such rate), whether such rate is fixed or
variable or both, the date or dates from which dividends will begin to accrue or
accumulate, and whether dividends will be cumulative; (c) whether the shares of
the series will be redeemable and, if so, the price at and the terms and
conditions on which such shares may be redeemed, including the time during which
such shares may be redeemed and any accumulated dividends thereon that the
holders of such shares shall be entitled to receive upon the redemption thereof;
(d) the liquidation preference, if any, applicable to shares of the series; (e)
whether the shares of the series will be subject to operation of a retirement or
sinking fund and, if so, the extent and manner in which any such fund shall be
applied to the purchase or redemption of such shares for retirement or for other
corporate purposes, and the terms and provisions relating to the operation of
such fund; (f) the terms and conditions, if any, on which the shares of the
series will be convertible into, or exchangeable for, shares of any other class
or classes of capital stock of the Company or another corporation or any series
of any other class or classes, or of any other series of the same class,
including the price or rate of conversion or exchange and the method, if any, of
adjusting the same; (g) the voting rights, if any, on the shares of the series,
provided, however, that such voting rights cannot be other than one vote per
share; and (h) any other preferences and relative, participating, optional, or
other special rights or qualifications, limitations, or restrictions thereof.
The Preferred Stock will, when issued, be fully paid and nonassessable.
VOTING RIGHTS
Each holder of shares of Common Stock, except where otherwise provided by
law or the Company's Certificate, is entitled to one vote, in person or by
proxy, for each share of Common Stock standing in his, her or its name on the
books of the Company. Holders of the Preferred Stock, if any, will only be
entitled to vote upon the election of directors or upon any questions affecting
the Company if and to the extent that the holders of any series of Preferred
Stock are granted voting rights fixed for such series by the Board of Directors
in the resolution creating such series. In no event will a holder of Preferred
Stock be entitled to other than one vote, in person or by proxy, for each share
of Preferred Stock standing in his, her or its name on the books of the Company.
Certain Business Transactions, as defined in the Company's Certificate and
discussed under "Certain Business Transactions" below, require a vote greater
than a simple majority.
CLASSIFICATION OF BOARD OF DIRECTORS; CUMULATIVE VOTING
The Board of Directors of the Company is divided into three classes, as
nearly equal in number of directors as possible. The directors of each class
serve until the annual meeting of stockholders in the year in which the term of
their class expires and until their respective successors are elected and
qualified, subject to prior death, resignation, or removal from office.
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Classification of the Board of Directors potentially affects the ability of
a substantial stockholder to effect a rapid change in control of the Company,
could further the entrenchment of management, and could render it more difficult
to effect a merger or similar transaction even if such transaction is favored by
a majority of independent stockholders. The classification of the Board of
Directors may discourage actions to acquire control of the Company by extending
the time needed to effect a change in control of the Board of Directors because
only a minority of the directors are elected at each annual meeting.
At all elections of directors of the Company, each stockholder entitled to
vote has a number of votes equal to the number of votes to which such
stockholder's shares are entitled (without regard to the provision for
cumulative voting) multiplied by the number of directors to be elected. Such
stockholder may cast all such votes for a single director or may distribute them
among the number to be voted for or any two or more of them.
CERTAIN BUSINESS TRANSACTIONS
The affirmative vote of the holders of at least 75% of the voting power of
the then outstanding shares of capital stock of the Company eligible to vote
generally in the election of directors (as of the date of this Prospectus, the
shares of Common Stock) is required to approve certain Business Transactions (as
such term is defined in the Certificate). The transactions included in the
definition of Business Transaction are those between the Company and an
Interested Stockholder or an Affiliate of an Interested Stockholder (as such
terms are defined in the Certificate) or, in certain instances, proposed by an
Interested Stockholder or Affiliate of an Interested Stockholder and include (i)
any merger or consolidation of the Company or any subsidiary, (ii) any sale,
lease, exchange, mortgage, pledge, transfer or other disposition of any assets
of the Company with a fair market value of $10 million or more, (iii) with
certain exceptions, the issuance or transfer by the Company or any subsidiary of
any securities of the Company or any subsidiary in exchange for consideration of
$10 million or more, (iv) the adoption of any plan or proposal for liquidation
or dissolution of the Company, and (v) any reclassification of securities or
recapitalization of the Company which has the effect of increasing the
proportionate share of the outstanding shares of any class or series of equity
securities of the Company or any subsidiary which is directly or indirectly
beneficially owned by any Interested Stockholder or an Affiliate of an
Interested Stockholder.
The provisions of the Certificate described in the preceding paragraph may
have the effect of delaying, deferring or preventing a change in control of the
Company, could further the entrenchment of management, and could render it more
difficult to effect a business transaction even if such transaction is favored
by a majority of the independent stockholders. The special vote requirement of
such provisions may be waived if the Business Transaction is duly approved by
the Disinterested Directors (as such term is defined in the Certificate) or if
certain fair price, nature of consideration and procedural requirements are met.
There is no requirement that a Business Transaction duly approved by the
Disinterested Directors meet any minimum price, nature of consideration or
procedural requirements.
DELAWARE ANTI-TAKEOVER STATUTE
The Company is a Delaware corporation and is subject to Section 203 of the
General Corporation Law of Delaware ("Delaware Law"). In general, Section 203
prevents an "interested stockholder" (defined generally as a person owning 15%
or more of the Company's outstanding voting stock) from engaging in a "business
combination" (as defined in Section 203) with the Company for three years
following the date that person becomes an interested stockholder unless (a)
before that person became an interested stockholder, the Company's Board of
Directors approved the transaction in which the interested stockholder became an
interested stockholder or approved the business combination, (b) upon completion
of the transaction that resulted in the interested stockholder's becoming an
interested stockholder, the interested stockholder owns at least 85% of the
Company's voting stock outstanding at the time the transaction commenced
(excluding stock held by directors who are also officers of the Company and by
employee stock plans that do not provide employees with the right to determine
confidentially whether shares held subject to the plan will be tendered in a
tender or exchange offer), or (c) following the transaction in which that person
became an interested stockholder, the business combination is approved by the
Company's Board of Directors and authorized at a meeting of stockholders by the
affirmative vote of the holders of at least two-thirds of the outstanding
Company voting stock not owned by the interested stockholder.
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Under Section 203, these restrictions also do not apply to certain business
combinations proposed by an interested stockholder following the announcement or
notification of one of certain extraordinary transactions involving the Company
and a person who was not an interested stockholder during the previous three
years or who became an interested stockholder with the approval of a majority of
the Company's directors, if that extraordinary transaction is approved or not
opposed by a majority of the directors who were directors before any person
became an interested stockholder in the previous three years or who were
recommended for election or elected to succeed such directors by a majority of
such directors then in office.
POTENTIAL RESTRICTIONS ON SALES OF CAPITAL STOCK TO NON-U.S. CITIZENS
Pursuant to U.S. maritime laws, sales of interests in and control of U.S.
flag vessels owned by U.S. citizens to non-citizens (including through the sale
of stock) require the approval of the Secretary of Transportation, acting
through the United States Maritime Administration ("MARAD"). Such transfers
would include those resulting in a majority of the outstanding capital stock
being held by non-U.S. citizens. If a transfer is made in violation of U.S.
maritime laws without MARAD approval, to the extent such approval is required,
such transfer would be void, and the United States would have the power to seek
forfeiture of the Company's rigs, seek civil penalties (including fines) and
seek enforcement of certain criminal penalties.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the Common Stock is Harris Trust and
Savings Bank, Chicago, Illinois.
PLAN OF DISTRIBUTION
The Company may sell the Securities in and/or outside the United States:
(i) through underwriters or dealers, (ii) directly to purchasers or (iii)
through agents. The Prospectus Supplement with respect to the Securities
offered thereby (the "Offered Securities") will set forth the terms of the
offering of the Offered Securities, including the name or names of any
underwriters or agents, the purchase price of the Offered Securities and the
proceeds to the Company from such sale, any delayed delivery arrangements, any
underwriting discounts and other items constituting underwriters' compensation,
any initial public offering price and any discounts or concessions allowed or
reallowed or paid to dealers. Any initial public offering price and any
discounts or concessions allowed or reallowed or paid to dealers may be changed
from time to time.
If underwriters are used in the sale, the Offered Securities will be
acquired by the underwriters for their own account and may be resold from time
to time in one or more transactions, including negotiated transactions, at a
fixed public offering price or at varying prices determined at the time of sale.
The Securities may be offered to the public either through underwriting
syndicates represented by one or more managing underwriters or directly by one
or more firms acting as underwriters. The underwriter or underwriters with
respect to a particular underwritten offering of Securities to be named in the
Prospectus Supplement relating to such offering and, if an underwriting
syndicate is used, the managing underwriter or underwriters will be set forth on
the cover of such Prospectus Supplement. Unless otherwise set forth in the
Prospectus Supplement relating thereto, the obligations of the underwriters to
purchase the Offered Securities will be subject to conditions precedent, and the
underwriters will be obligated to purchase all the Offered Securities if any are
purchased.
During and after an offering through underwriters, such underwriters may
purchase and sell the Securities in the open market. These transactions may
include overallotment and stabilizing transactions and purchases to cover
syndicate short positions created in connection with the offering. The
underwriters may also impose a penalty bid, whereby selling concessions allowed
to syndicate members or other broker-dealers for the Offered Securities sold for
their account may be reclaimed by the syndicate if such Offered Securities are
repurchased by the syndicate in stabilizing or covering transactions. These
activities may stabilize, maintain or otherwise affect the market price of the
Offered Securities, which may be higher than the price that might otherwise
prevail in the open market, and, if commenced, may be discontinued at any time.
21
<PAGE>
If dealers are used in the sale of Offered Securities in respect of which
this Prospectus is delivered, the Company will sell such Offered Securities to
dealers as principals. The dealers may then resell such Offered Securities to
the public at varying prices to be determined by such dealers at the time of
resale. The names of the dealers and the terms of the transaction will be set
forth in the Prospectus Supplement relating thereto.
The Securities may be sold directly by the Company or through agents
designated by the Company from time to time. Any agent involved in the offer or
sale of the Offered Securities in respect to which this Prospectus is delivered
will be named, and any commissions payable by the Company to such agent will be
set forth, in the Prospectus Supplement relating thereto. Unless otherwise
indicated in the Prospectus Supplement, any such agent will be acting on a best
efforts basis for the period of its appointment.
The Securities may be sold directly by the Company to institutional
investors or others who may be deemed to be underwriters within the meaning of
the Securities Act with respect to any sale thereof. The terms of any such
sales will be described in the Prospectus Supplement relating thereto.
If so indicated in the applicable Prospectus Supplement, the Company will
authorize agents, underwriters or dealers to solicit offers from certain types
of institutions to purchase Offered Securities from the Company at the public
offering price set forth in the Prospectus Supplement pursuant to delayed
delivery contracts providing for payment and delivery on a specified date in the
future. Such contracts will be subject only to those conditions set forth in
the Prospectus Supplement, and the Prospectus Supplement will set forth the
commission payable for solicitation of such contracts.
Agents, dealers and underwriters may be entitled under agreements entered
into with the Company to indemnification by the Company against certain civil
liabilities, including liabilities under the Securities Act, or to contribution
with respect to payments that such agents, dealers or underwriters may be
required to make in respect thereof. Agents, dealers and underwriters may be
customers of, engage in transactions with, or perform services for the Company
in the ordinary course of business.
The Securities may or may not be listed on a national securities exchange.
No assurances can be given that there will be a market for the Securities.
LEGAL MATTERS
Certain legal matters in connection with the Securities offered hereby will
be passed upon for the Company by Baker & Botts, L.L.P., Houston, Texas.
EXPERTS
The consolidated balance sheet as of December 31, 1997 and 1996 and the
consolidated statements of operations, shareholders' equity, and cash flows for
each of the three years in the period ended December 31, 1997, incorporated by
reference in this Prospectus, have been incorporated herein in reliance on the
report of Coopers & Lybrand L.L.P., independent accountants, given on the
authority of that firm as experts in accounting and auditing.
22
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the estimated expenses payable by the
Company in connection with the offering described in this Registration
Statement.
Registration fee $125,375
Printing expenses 120,000
Accounting fees and expenses 75,000
Legal fees and expenses 140,000
Trustee fees and expenses 30,000
Rating agency fees 100,000
Miscellaneous 9,625
-------
Total $600,000
=======
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law empowers a Delaware
corporation to indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an action
by or in the right of such corporation) by reason of the fact that such person
is or was a director or officer, employee or agent of such corporation, or is or
was serving at the request of such corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise. The indemnity may include expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by such person in connection with such action, suit or proceeding, provided that
he acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. A Delaware corporation may indemnify directors, officers,
employees and others in an action by or in the right of the corporation under
the same conditions, except that no indemnification is permitted without
judicial approval if the person to be indemnified has been adjudged to be liable
to the corporation. Where a director or officer is successful on the merits or
otherwise in the defense of any action referred to above or in defense of any
claim, issue or matter therein, the corporation must indemnify such director or
officer against the expenses (including attorneys' fees) which he or she
actually and reasonably incurred in connection therewith.
Section III-11 of the By-laws of Global Marine Inc. provides for
indemnification of the directors and officers of Global Marine Inc. to the full
extent permitted by law, as now in effect or later amended. Section III-11 of
the By-laws provides that expenses incurred by a director or officer in
defending a suit or other similar proceeding shall be paid by the Company upon
receipt of an undertaking by or on behalf of the director or officer to repay
such amount if it is ultimately determined that such director or officer is not
entitled to be indemnified by the Company.
Additionally, the Company's Restated Certificate of Incorporation, as
amended, (the "Charter") contains a provision that limits the liability of the
Company's directors to the fullest extent permitted by the Delaware General
Corporation Law. The provision eliminates the personal liability of directors
to the Company or its stockholders for monetary damages for breach of the
director's fiduciary duty of care as a director. As a result, stockholders may
be unable to recover monetary damages against directors for negligent or grossly
negligent acts or omissions in violation of their duty of care. The provision
does not change the liability of a director for breach of his duty of loyalty to
the Company or to stockholders, for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, for the
declaration or payment of dividends in violation of Delaware law, or in respect
of any transaction from which a director receives an improper personal benefit.
II-1
<PAGE>
In addition to its Charter and By-law provisions, the Company has taken
such other steps as are reasonably necessary to effect its indemnification
policy. Included among such other steps is liability insurance provided by the
Company for its directors and officers for certain losses arising from claims or
charges made against them in their capacities as directors or officers of the
Company. The Company has also entered into indemnification agreements with
individual officers and directors. These agreements generally provide such
officers and directors with a contractual right to indemnification to the full
extent provided by applicable law and the By-laws of the Company as in effect at
the respective dates of such agreements.
The Company has placed in effect insurance which purports (a) to insure it
against certain costs of indemnification which may be incurred by it pursuant to
the aforementioned By-law provision or otherwise and (b) to insure the officers
and directors of the Company and of specified subsidiaries against certain
liabilities incurred by them in the discharge of their functions as officers and
directors except for liabilities arising from their own malfeasance.
Agreements which may be entered into with underwriters, dealers and agents
who participate in the distribution of securities of the Company may contain
provisions relating to the indemnification of the Company's officers and
directors.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF EXHIBIT
- ----------- ----------------------
<C> <S>
*1 Form of Underwriting Agreement
**4.1 Restated Certificate of Incorporation of the Company as filed with the Secretary of State of Delaware on
March 15, 1989, effective March 16, 1989. (Incorporated herein by this reference to Exhibit 3(i).1 of the
Registrant's Annual Report on Form 10-K for the year ended December 31, 1993.)
**4.2 Certificate of Amendment of the Restated Certificate of Incorporation of the Company as filed with the
Secretary of State of Delaware on May 11. 1990. (Incorporated herein by this reference to Exhibit 3(i).2
of the Registrant's Annual Report on Form 10-K for the year ended December 31, 1993.)
**4.3 Certificate of Correction of the Restated Certificate of Incorporation of the Company as filed with the
Secretary of State of Delaware on September 25, 1990. (Incorporated herein by this reference to Exhibit
3(i).3 of the Registrant's Annual Report on Form 10-K for the year ended December 31, 1993.)
**4.4 Certificate of Amendment of the Restated Certificate of Incorporation of the Company as filed with the
Secretary of State of Delaware on May 11, 1992. (Incorporated herein by this reference to Exhibit 3(i)4
of the Registrant's Annual Report on Form 10-K for the year ended December 31, 1993.)
**4.5 Certificate of Amendment of the Restated Certificate of Incorporation of the Company as filed with the
Secretary of State of Delaware on May 12, 1994. (Incorporated herein by this reference to Exhibit 4.5 of
the Registrant's Registration Statement on Form S-3 (No. 33-53691) filed with the Commission on May
18, 1994.)
**4.6 Bylaws of the Company as amended through November 14, 1996. (Incorporated herein by this reference
to Exhibit 3(ii).2 of the Registrant's Annual Report on Form 10-K for the year ended December 31, 1996.)
**4.7 Indenture, dated as of September 1, 1997, between the Company and Wilmington Trust Company, as
Trustee, relating to Senior Debt Securities of the Registrant. (Incorporated herein by this reference to
Exhibit 4.1 of the Registrant's Registration Statement on Form S-4 (No. 333-39033) filed with the
Commission on October 30, 1997.)
4.8 Form of Indenture between the Company and the Subordinated Trustee relating to Subordinated Debt
Securities of the Registrant
*4.9 Form of Debt Securities
5 Opinion of Baker & Botts, L.L.P. as to the validity of the Securities
*8 Opinion of counsel to the Company as to certain tax matters relative to the Securities offered hereby
12 Computation of ratio of earnings to fixed charges
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF EXHIBIT
- ----------- ----------------------
<C> <S>
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Baker & Botts, L.L.P. (included in Exhibit 5.1)
24 Powers of Attorney (included on the signature page of the Registration Statement)
**25.1 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 of Wilmington Trust Company, as
trustee under the Indenture relating to Senior Debt Securities, on Form T-1 (Incorporated herein by this reference to
Exhibit 25 of the Registrant's Registration Statement on Form S-4 (No. 333-39033) filed with the Commission on
October 30, 1997.)
*25.2 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 of the Subordinated
Trustee, as trustee under the Indenture relating to Subordinated Debt Securities, on Form T-1
</TABLE>
_______________
* The Company will file as an exhibit to a Current Report on Form 8-K (i) any
underwriting agreement relating to Securities offered hereby, (ii) the
instruments setting forth the terms of any Debt Securities or Preferred
Stock, (iii) any required opinion of counsel to the Company as to certain
tax matters relative to Securities offered hereby or (iv) any Statement of
Eligibility and Qualification under the Trust Indenture Act of 1939 of the
applicable trustee.
** Incorporated by reference as indicated.
II-3
<PAGE>
ITEM 17. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) of the
Securities Act if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the
effective Registration Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed by the
registrant pursuant to section 13 or section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) 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.
(c) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 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 Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment
by the registrant of expenses incurred or paid by a director, officer or
controlling person of the 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 Act and will be governed by the final
adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Houston, the State of Texas, on April 9, 1998.
GLOBAL MARINE INC.
By: /s/ C. Russell Luigs
-------------------------------
C. Russell Luigs
Chairman of the Board and
Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below appoints Gary L. Kott, James L.
McCulloch and Alexander A. Krezel, and each of them, each of whom may act
without the joinder of the others, as his true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities to sign (i) any and all
amendments (including post-effective amendments) to this Registration Statement
and (ii) any Registration Statement of the type contemplated by Rule 462(b)
under the Securities Act of 1933, as amended, and to file the same, with all
exhibits thereto and all other documents in connection therewith, with the
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and necessary
to be done, as fully and for all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them or their substitutes, may lawfully do or cause to be done
by virtue hereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES INDICATED AND ON April 9, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ C. Russell Luigs Chairman of the Board and Chief Executive Officer
- --------------------------------------------
C. Russell Luigs
(Principal Executive Officer and Director)
/s/Gary L. Kott Senior Vice President and Chief Financial Officer
- --------------------------------------------
Gary L. Kott
(Principal Financial Officer)
/s/ Thomas R. Johnson Vice President and Corporate Controller
- --------------------------------------------
Thomas R. Johnson
(Principal Accounting Officer)
</TABLE>
II-5
<PAGE>
/s/ Donald B. Brown Director
- --------------------------------------------
Donald B. Brown
/s/ Edward J. Campbell Director
- --------------------------------------------
Edward J. Campell
/s/ Thomas W. Cason Director
- --------------------------------------------
Thomas W. Cason
/s/ John M. Galvin Director
- --------------------------------------------
John M. Galvin
/s/ Jerry C. Martin Director
- --------------------------------------------
Jerry C. Martin
/s/ Edward R. Muller Director
- --------------------------------------------
Edward R. Muller
Director
- --------------------------------------------
Paul J. Powers
/s/ John G. Ryan Director
- --------------------------------------------
John G. Ryan
/s/ Ben G. Streetman Director
- --------------------------------------------
Ben G. Streetman
II-6
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF EXHIBIT
- ----------- ----------------------
<C> <S>
*1. Form of Underwriting Agreement
**4.1 Restated Certificate of Incorporation of the Company as filed with the Secretary of State of Delaware on
March 15, 1989, effective March 16, 1989. (Incorporated herein by this reference to Exhibit 3(i).1 of the
Registrant's Annual Report on Form 10-K for the year ended December 31, 1993.)
**4.2 Certificate of Amendment of the Restated Certificate of Incorporation of the Company as filed with the
Secretary of State of Delaware on May 11. 1990. (Incorporated herein by this reference to Exhibit 3(i).2
of the Registrant's Annual Report on Form 10-K for the year ended December 31, 1993.)
**4.3 Certificate of Correction of the Restated Certificate of Incorporation of the Company as filed with the
Secretary of State of Delaware on September 25, 1990. (Incorporated herein by this reference to Exhibit
3(i).3 of the Registrant's Annual Report on Form 10-K for the year ended December 31, 1993.)
**4.4 Certificate of Amendment of the Restated Certificate of Incorporation of the Company as filed with the
Secretary of State of Delaware on May 11, 1992. (Incorporated herein by this reference to Exhibit 3(i)4
of the Registrant's Annual Report on Form 10-K for the year ended December 31, 1993.)
**4.5 Certificate of Amendment of the Restated Certificate of Incorporation of the Company as filed with the
Secretary of State of Delaware on May 12, 1994. (Incorporated herein by this reference to Exhibit 4.5 of
the Registrant's Registration Statement on Form S-3 (No. 33-53691) filed with the Commission on May
18, 1994.)
**4.6 Bylaws of the Company as amended through November 14, 1996. (Incorporated herein by this reference
to Exhibit 3(ii).2 of the Registrant's Annual Report on Form 10-K for the year ended December 31, 1996.)
**4.7 Indenture, dated as of September 1, 1997, between the Company and Wilmington Trust Company, as
Trustee, relating to Senior Debt Securities of the Registrant. (Incorporated herein by this reference to
Exhibit 4.1 of the Registrant's Registration Statement on Form S-4 (No. 333-39033) filed with the
Commission on October 30, 1997.)
4.8 Form of Indenture between the Company and the Subordinated Trustee relating to Subordinated Debt
Securities of the Registrant
*4.9 Form of Debt Securities
5 Opinion of Baker & Botts, L.L.P. as to the validity of the Securities
*8 Opinion of counsel to the Company as to certain tax matters relative to the Securities offered hereby
12 Computation of ratio of earnings to fixed charges
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Baker & Botts, L.L.P. (included in Exhibit 5.1)
24 Powers of Attorney (included on the signature page of the Registration Statement)
**25.1 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 of Wilmington Trust Company, as
trustee under the Indenture relating to Senior Debt Securities, on Form T-1 (Incorporated herein by this reference to
Exhibit 25 of the Registrant's Registration Statement on Form S-4 (No. 333-39033) filed with the Commission on
October 30, 1997.)
*25.2 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 of the Subordinated
Trustee, as trustee under the Indenture relating to Subordinated Debt Securities, on Form T-1
</TABLE>
_______________
* The Company will file as an exhibit to a Current Report on Form 8-K (i) any
underwriting agreement relating to Securities offered hereby, (ii) the
instruments setting forth the terms of any Debt Securities or Preferred
Stock, (iii) any required opinion of counsel to the Company as to certain
tax matters relative to Securities offered hereby or (iv) any Statement of
Eligibility and Qualification under the Trust Indenture Act of 1939 of the
applicable trustee.
** Incorporated by reference as indicated.
<PAGE>
EXHIBIT 4.8
FORM OF SUBORDINATED INDENTURE
=======================================================================
GLOBAL MARINE INC.
as Issuer
and
________________________
as Trustee
________________________
Indenture
Dated as of ______________, ____
________________________
Subordinated Debt Securities
=======================================================================
<PAGE>
GLOBAL MARINE INC.
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939
AND INDENTURE, DATED AS OF ___________________
---------------------------------
Section of
Trust Indenture Section(s) of
Act of 1939 Indenture
------------------ ---------
(S) 310 (a)(1)...................................... 7.10
(a)(2)...................................... 7.10
(a)(3)...................................... Not Applicable
(a)(4)...................................... Not Applicable
(a)(5)...................................... 7.10
(b)......................................... 7.08, 7.10
(S) 311 (a)......................................... 7.11
(b)......................................... 7.11
(c)......................................... Not Applicable
(S) 312 (a)......................................... 2.07
(b)......................................... 11.03
(c)......................................... 11.03
(S) 313 (a)......................................... 7.06
(b)......................................... 7.06
(c)......................................... 7.06
(d)......................................... 7.06
(S) 314 (a)......................................... 4.03, 4.04
(b)......................................... Not Applicable
(c)(1)...................................... 11.04
(c)(2)...................................... 11.04
(c)(3)...................................... Not Applicable
(d)......................................... Not Applicable
(e)......................................... 11.05
(S) 315 (a)......................................... 7.01(b)
(b)......................................... 7.05
(c)......................................... 7.01(a)
(d)......................................... 7.01(c)
(d)(1)...................................... 7.01(c)(1)
(d)(2)...................................... 7.01(c)(2)
(d)(3)...................................... 7.01(c)(3)
(e)......................................... 6.11
(S) 316 (a)(1)(A)................................... 6.05
(a)(1)(B)................................... 6.04
(a)(2)...................................... Not Applicable
(a)(last sentence).......................... 2.11
(b)......................................... 6.07
(S) 317 (a)(1)...................................... 6.08
(a)(2)...................................... 6.09
(b)......................................... 2.06
(S) 318 (a)......................................... 11.01
____________
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01 Definitions.................................................. 1
SECTION 1.02 Other Definitions............................................ 7
SECTION 1.03 Incorporation by Reference of Trust Indenture Act............ 7
SECTION 1.04 Rules of Construction........................................ 8
ARTICLE II
THE SECURITIES
SECTION 2.01 Amount Unlimited; Issuable in Series......................... 8
SECTION 2.02 Denominations................................................ 11
SECTION 2.03 Forms Generally.............................................. 11
SECTION 2.04 Execution, Authentication, Delivery and Dating............... 11
SECTION 2.05 Registrar and Paying Agent................................... 13
SECTION 2.06 Paying Agent to Hold Money in Trust.......................... 14
SECTION 2.07 Holder Lists................................................. 14
SECTION 2.08 Transfer and Exchange........................................ 14
SECTION 2.09 Replacement Securities....................................... 15
SECTION 2.10 Outstanding Securities....................................... 15
SECTION 2.11 Original Issue Discount, Foreign-Denominated and
Treasury Securities.......................................... 15
SECTION 2.12 Temporary Securities......................................... 16
SECTION 2.13 Cancellation................................................. 16
SECTION 2.14 Payments; Defaulted Interest................................. 16
SECTION 2.15 Persons Deemed Owners........................................ 17
SECTION 2.16 Computation of Interest...................................... 17
SECTION 2.17 Global Securities; Book-Entry Provisions..................... 17
ARTICLE III
REDEMPTION
SECTION 3.01 Applicability of Article..................................... 19
SECTION 3.02 Notice to the Trustee........................................ 19
SECTION 3.03 Selection of Securities To Be Redeemed....................... 20
SECTION 3.04 Notice of Redemption......................................... 20
SECTION 3.05 Effect of Notice of Redemption............................... 21
SECTION 3.06 Deposit of Redemption Price.................................. 21
SECTION 3.07 Securities Redeemed or Purchased in Part..................... 21
SECTION 3.08 Purchase of Securities....................................... 22
i
<PAGE>
SECTION 3.09 Mandatory and Optional Sinking Funds......................... 22
SECTION 3.10 Satisfaction of Sinking Fund Payments with Securities........ 22
SECTION 3.11 Redemption of Securities for Sinking Fund.................... 22
ARTICLE IV
COVENANTS
SECTION 4.01 Payment of Securities........................................ 23
SECTION 4.02 Maintenance of Office or Agency.............................. 24
SECTION 4.03 SEC Reports; Financial Statements............................ 24
SECTION 4.04 Compliance Certificate....................................... 24
SECTION 4.05 Corporate Existence.......................................... 25
SECTION 4.06 Waiver of Stay, Extension or Usury Laws...................... 25
SECTION 4.07 Additional Amounts........................................... 25
ARTICLE V
SUCCESSORS
SECTION 5.01 Limitations on Mergers and Consolidations.................... 26
SECTION 5.02 Successor Person Substituted................................. 27
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.01 Events of Default............................................ 27
SECTION 6.02 Acceleration................................................. 29
SECTION 6.03 Other Remedies............................................... 30
SECTION 6.04 Waiver of Existing Defaults.................................. 30
SECTION 6.05 Control by Majority.......................................... 30
SECTION 6.06 Limitations on Suits......................................... 31
SECTION 6.07 Rights of Holders to Receive Payment......................... 31
SECTION 6.08 Collection Suit by Trustee................................... 31
SECTION 6.09 Trustee May File Proofs of Claim............................. 32
SECTION 6.10 Priorities................................................... 32
SECTION 6.11 Undertaking for Costs........................................ 33
ARTICLE VII
TRUSTEE
SECTION 7.01 Duties of Trustee............................................ 33
SECTION 7.02 Rights of Trustee............................................ 34
SECTION 7.03 May Hold Securities.......................................... 35
SECTION 7.04 Trustee's Disclaimer......................................... 35
SECTION 7.05 Notice of Defaults........................................... 35
SECTION 7.06 Reports by Trustee to Holders................................ 35
ii
<PAGE>
SECTION 7.07 Compensation and Indemnity................................... 36
SECTION 7.08 Replacement of Trustee....................................... 36
SECTION 7.09 Successor Trustee by Merger, etc............................. 38
SECTION 7.10 Eligibility; Disqualification................................ 38
SECTION 7.11 Preferential Collection of Claims Against Company............ 39
ARTICLE VIII
DISCHARGE OF INDENTURE
SECTION 8.01 Termination of Company's Obligations......................... 39
SECTION 8.02 Application of Trust Money................................... 43
SECTION 8.03 Repayment to Company......................................... 43
SECTION 8.04 Reinstatement................................................ 43
ARTICLE IX
SUPPLEMENTAL INDENTURES AND AMENDMENTS
SECTION 9.01 Without Consent of Holders................................... 44
SECTION 9.02 With Consent of Holders...................................... 45
SECTION 9.03 Compliance with Trust Indenture Act.......................... 47
SECTION 9.04 Revocation and Effect of Consents............................ 47
SECTION 9.05 Notation on or Exchange of Securities........................ 47
SECTION 9.06 Trustee to Sign Amendments, etc.............................. 48
ARTICLE X
SUBORDINATION
SECTION 10.01 Securities Subordinated to Senior Indebtedness............... 48
SECTION 10.02 No Payment on Securities in Certain Circumstances............ 48
SECTION 10.03 Securities Subordinated to Prior Payment of All Senior
Indebtedness on Dissolution, Liquidation or Reorganization... 50
SECTION 10.04 Subrogation to Rights of Holders of Senior Indebtedness...... 51
SECTION 10.05 Obligations of the Company Unconditional..................... 51
SECTION 10.06 Trustee Entitled to Assume Payments Not Prohibited in
Absence of Notice............................................ 52
SECTION 10.07 Application by Trustee of Amounts Deposited with It.......... 52
SECTION 10.08 Subordination Rights Not Impaired by Acts or Omissions of the
Company or Holders of Senior Indebtedness.................... 52
SECTION 10.09 Trustee to Effectuate Subordination of Securities............ 53
SECTION 10.10 Right of Trustee to Hold Senior Indebtedness................. 53
SECTION 10.11 Article X Not to Prevent Events of Default................... 53
SECTION 10.12 No Fiduciary Duty of Trustee to Holders of Senior Indebtedness 53
SECTION 10.13 Article Applicable to Paying Agent........................... 54
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ARTICLE XI
MISCELLANEOUS
SECTION 11.01 Trust Indenture Act Controls................................ 54
SECTION 11.02 Notices..................................................... 54
SECTION 11.03 Communication by Holders with Other Holders................. 55
SECTION 11.04 Certificate and Opinion as to Conditions Precedent.......... 55
SECTION 11.05 Statements Required in Certificate or Opinion............... 56
SECTION 11.06 Rules by Trustee and Agents................................. 56
SECTION 11.07 Legal Holidays.............................................. 56
SECTION 11.08 No Recourse Against Others.................................. 56
SECTION 11.09 Governing Law............................................... 57
SECTION 11.10 No Adverse Interpretation of Other Agreements............... 57
SECTION 11.11 Successors.................................................. 57
SECTION 11.12 Severability................................................ 57
SECTION 11.13 Counterpart Originals....................................... 57
SECTION 11.14 Table of Contents, Headings, etc............................ 57
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INDENTURE dated as of _______________ between Global Marine Inc., a
Delaware corporation (the "Company"), and ____________________, as trustee (the
"Trustee").
Each party agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the Holders of the Company's unsecured
debentures, notes or other evidences of indebtedness (the "Securities") to be
issued from time to time in one or more series as provided in this Indenture:
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01 Definitions.
"Additional Amounts" means any additional amounts required by the
express terms of a Security or by or pursuant to a Board Resolution, under
circumstances specified therein or pursuant thereto, to be paid by the Company
with respect to certain taxes, assessments or other governmental charges imposed
on certain Holders and that are owing to such Holders.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by, or under direct or indirect common
control with, such specified Person. For purposes of this definition, "control"
of a Person shall mean the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise, and the terms "controlling" and
"controlled" shall have meanings correlative to the foregoing.
"Agent" means any Registrar or Paying Agent.
"Bankruptcy Law" means Title 11 of the United States Code or any
similar federal, state or foreign law for the relief of debtors.
"Board of Directors" means the Board of Directors of the Company or
any committee thereof duly authorized, with respect to any particular matter, to
act by or on behalf of the Board of Directors of the Company.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means any day that is not a Legal Holiday.
"Capital Stock" means, with respect to any corporation, any and all
shares, interests, rights to purchase (other than convertible or exchangeable
Indebtedness), warrants, options, participations or other equivalents of or
interests (however designated) in stock issued by that corporation.
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"Capitalized Lease Obligation" of any Person means any obligation of
such Person to pay rent or other amounts under a lease of property, real or
personal, that is required to be capitalized for financial reporting purposes in
accordance with GAAP; and the amount of such obligation shall be the capitalized
amount thereof determined in accordance with GAAP.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor corporation shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor corporation; provided, however, that for
purposes of any provision contained herein which is required by the TIA,
"Company" shall also mean each other obligor (if any) on the Securities of a
series.
"Company Order" and "Company Request" mean, respectively, a written
order or request signed in the name of the Company by two Officers of the
Company, and delivered to the Trustee.
"Corporate Trust Office" of the Trustee means the office of the
Trustee located at ____________________, and as may be located at such other
address as the Trustee may give notice to the Company.
"Default" means any event, act or condition that is, or after notice
or the passage of time or both would be, an Event of Default.
"Depositary" means, with respect to the Securities of any series
issuable or issued in whole or in part in global form, the Person specified
pursuant to Section 2.01 hereof as the initial Depositary with respect to the
Securities of such series, until a successor shall have been appointed and
become such pursuant to the applicable provision of this Indenture, and
thereafter "Depositary" shall mean or include such successor.
"Designated Senior Indebtedness," unless otherwise provided with
respect to the Securities of a series as contemplated by Section 2.01, means any
Senior Indebtedness that (i) in the instrument evidencing the same or the
assumption or guarantee thereof (or related documents to which the Company is a
party) is expressly designated as "Designated Senior Indebtedness" for purposes
of this Indenture and (ii) satisfies such other conditions as may be provided
with respect to the Securities of such series; provided that such instruments or
documents may place limitations and conditions on the right of such Senior
Indebtedness to exercise the rights of Designated Senior Indebtedness.
"Disqualified Capital Stock" means, when used with respect to the
Securities of any series, (a) except as set forth in (b), with respect to any
Person, Capital Stock of such Person that, by its terms or by the terms of any
security into which it is convertible, exercisable or exchangeable, is, or upon
the happening of an event or the passage of time would be, required to be
redeemed or repurchased (including at the option of the holder thereof) by such
Person or any Subsidiary of such Person, in whole or in part, on or prior to the
Stated Maturity of the Securities of such series, and (b) with respect to any
Subsidiary of such Person (including with respect to any Subsidiary of the
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Company), any Capital Stock other than any common stock with no preference,
privileges, or redemption or repayment provisions.
"Dollar" or "$" means a dollar or other equivalent unit in such coin
or currency of the United States as at the time shall be legal tender for the
payment of public and private debt.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and any successor statute.
"GAAP" means generally accepted accounting principles in the United
States set forth in the opinions and pronouncements of the Accounting Principles
Board of the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession of the United States, as in effect from time to time.
"Global Security" means a Security that is issued in global form in
the name of the Depositary with respect thereto or its nominee.
"Government Obligations" means, with respect to a series of
Securities, direct obligations of the government that issues the currency in
which the Securities of the series are payable for the payment of which the full
faith and credit of such government is pledged, or obligations of a person
controlled or supervised by and acting as an agency or instrumentality of such
government, the payment of which is unconditionally guaranteed as a full faith
and credit obligation by such government.
"Holder" means a Person in whose name a Security is registered.
"Indebtedness" of any Person means, without duplication, (i) all
indebtedness of such Person for borrowed money (whether or not the recourse of
the lender is to the whole of the assets of such Person or only to a portion
thereof), (ii) all obligations of such Person evidenced by bonds, debentures,
notes or other similar instruments, (iii) all obligations of such Person in
respect of letters of credit or other similar instruments (or reimbursement
obligations with respect thereto), other than standby letters of credit,
performance bonds and other obligations issued by or for the account of such
Person in the ordinary course of business, to the extent not drawn or, to the
extent drawn, if such drawing is reimbursed not later than the third Business
Day following demand for reimbursement, (iv) all obligations of such Person to
pay the deferred and unpaid purchase price of property or services, except trade
payables and accrued expenses incurred in the ordinary course of business, (v)
all Capitalized Lease Obligations of such Person, (vi) all Indebtedness of
others secured by a Lien on any asset of such Person, whether or not such
Indebtedness is assumed by such Person (provided that if the obligations so
secured have not been assumed in full by such Person or are not otherwise such
Person's legal liability in full, then such obligations shall be deemed to be in
an amount equal to the greater of (a) the lesser of (1) the full amount of such
obligations and (2) the fair market value of such assets, as determined in good
faith by the Board of Directors of such Person, which determination shall be
evidenced by a Board Resolution, and (b) the amount of obligations
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as have been assumed by such Person or which are otherwise such Person's legal
liability), and (vii) all Indebtedness of others (other than endorsements in the
ordinary course of business) guaranteed by such Person to the extent of such
guarantee.
"Indenture" means this Indenture as amended or supplemented from time
to time, and includes the terms of a particular series of Securities established
as contemplated by Section 2.01.
"interest" means, with respect to an Original Issue Discount Security
that by its terms bears interest only after Maturity, interest payable after
Maturity.
"Interest Payment Date," when used with respect to any Security,
shall have the meaning assigned to such term in the Security as contemplated by
Section 2.01.
"Issue Date" means, with respect to Securities of a series, the date
on which the Securities of such series are originally issued under this
Indenture.
"Junior security" of a Person means, when used with respect to the
Securities of any series, any Qualified Capital Stock of such Person or any
Indebtedness of such Person that is subordinated in right of payment to the
Securities of such series and has no scheduled installment of principal due, by
redemption, sinking fund payment or otherwise, on or prior to the Stated
Maturity of the Securities of such series.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in any of The City of New York, New York, _______________, Houston,
Texas or a Place of Payment are authorized or obligated by law, regulation or
executive order to remain closed.
"Maturity" means, with respect to any Security, the date on which the
principal of such Security or an installment of principal becomes due and
payable as therein or herein provided, whether at the stated maturity thereof,
or by declaration of acceleration, call for redemption or otherwise.
"Officer" means the Chairman of the Board, the President, any Vice
Chairman of the Board, any Vice President, the chief financial officer, the
Treasurer, any Assistant Treasurer, the Controller, the Secretary or any
Assistant Secretary of a Person.
"Officers' Certificate" means a certificate signed by two Officers of
a Person.
"Opinion of Counsel" means a written opinion from legal counsel who is
acceptable to the Trustee. Such counsel may be an employee of or counsel to the
Company or the Trustee.
"Original Issue Discount Security" means any Security that provides
for an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration of the Maturity thereof pursuant to Section 6.02.
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"Person" means any individual, corporation, partnership, limited
liability company, joint venture, incorporated or unincorporated association,
joint stock company, trust, unincorporated organization or government or other
agency or political subdivision thereof or other entity of any kind.
"Place of Payment" means, with respect to the Securities of any
series, the place or places where the principal of, premium (if any) on and
interest on the Securities of that series are payable as specified in accordance
with Section 2.01 subject to the provisions of Section 4.02.
"principal" of a Security means the principal of the Security plus,
when appropriate, the premium, if any, on the Security.
"Qualified Capital Stock" means any Capital Stock of the Company that
is not Disqualified Capital Stock.
"Redemption Date" means, with respect to any Security to be redeemed,
the date fixed for such redemption pursuant to this Indenture.
"Redemption Price" means, with respect to any Security to be redeemed,
the price at which it is to be redeemed pursuant to this Indenture.
"Rule 144A Securities" means Securities of a series designated
pursuant to Section 2.01 as entitled to the benefits of Section 4.03(b).
"SEC" means the Securities and Exchange Commission.
"Securities" has the meaning stated in the preamble of this Indenture
and more particularly means any Securities authenticated and delivered under
this Indenture.
"Security Custodian" means, with respect to Securities of a series,
the Trustee for Securities of such series, as custodian with respect to the
Securities of such series issued in global form, or any successor entity
thereto.
"Senior Indebtedness" of the Company, unless otherwise provided with
respect to the Securities of a series as contemplated by Section 2.01, means (i)
all Indebtedness of the Company, whether currently outstanding or hereafter
issued, unless, by the terms of the instrument creating or evidencing such
Indebtedness, it is provided that such Indebtedness is not superior in right of
payment to the Securities or to other Indebtedness which is pari passu with or
subordinated to the Securities, and (ii) any modifications, refunding,
deferrals, renewals or extensions of any such Indebtedness or securities, notes
or other evidences of Indebtedness issued in exchange for such Indebtedness;
provided that in no event shall "Senior Indebtedness" include (a) Indebtedness
of the Company owed or owing to any Subsidiary of the Company or any officer,
director or employee of the Company or any Subsidiary of the Company, (b)
Indebtedness to trade creditors or (c) any liability for taxes owed or owing by
the Company.
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"Stated Maturity" means, when used with respect to any Security or any
installment of principal thereof or interest thereon, the date specified in such
Security as the fixed date on which the principal of such Security or such
installment of principal or interest is due and payable.
"Subsidiary" means a corporation more than 50% of the outstanding
voting stock of which is owned, directly or indirectly, by the Company or by one
or more other Subsidiaries, or by the Company and one or more other
Subsidiaries. For the purposes of this definition, "voting stock" means stock
that ordinarily has voting power for the election of directors, whether at all
times or only so long as no senior class of stock has such voting power by
reason of any contingency. A Joint Venture shall not be a Subsidiary.
"TIA" means the Trust Indenture Act of 1939, as amended (15 U.S.C.
(S)(S) 77aaa-77bbbb), as in effect on the date hereof.
"Trust Officer" means any officer or assistant officer of the Trustee
assigned by the Trustee to administer its corporate trust matters.
"Trustee" means the Person named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture, and
thereafter "Trustee" means each Person who is then a Trustee hereunder, and if
at any time there is more than one such Person, "Trustee" as used with respect
to the Securities of any series means the Trustee with respect to Securities of
that series.
"United States" means the United States of America (including the
States and the District of Columbia) and its "possessions," which include Puerto
Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the
Northern Mariana Islands.
"United States Alien" means any Person who, for United States federal
income tax purposes, is a foreign corporation, a nonresident alien individual, a
nonresident alien or foreign fiduciary of an estate or trust, or a foreign
partnership.
"U.S. Government Obligations" means Government Obligations with
respect to Securities payable in Dollars.
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SECTION 1.02 Other Definitions.
DEFINED
TERM IN SECTION
---- ----------
"Bankruptcy Custodian"........................ 6.01
"covenant defeasance"......................... 8.01
"Conversion Event"............................ 6.01
"Event of Default"............................ 6.01
"Exchange Rate"............................... 2.11
"Judgment Currency"........................... 6.10
"legal defeasance"............................ 8.01
"mandatory sinking fund payment".............. 3.09
"optional sinking fund payment"............... 3.09
"Paying Agent"................................ 2.05
"Payment Default"............................. 10.02
"Payment Notice".............................. 10.02
"Registrar"................................... 2.05
"Required Currency"........................... 6.10
"Successor"................................... 5.01
SECTION 1.03 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company or any other
obligor on the Securities.
All terms used in this Indenture that are defined by the TIA, defined
by a TIA reference to another statute or defined by an SEC rule under the TIA
have the meanings so assigned to them.
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SECTION 1.04 Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular;
(5) provisions apply to successive events and transactions; and
(6) all references in this Agreement to Articles and Sections are
references to the corresponding Articles and Sections in and of
this Indenture.
ARTICLE II
THE SECURITIES
SECTION 2.01 Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities that may be authenticated
and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution, and set forth in an Officers'
Certificate, or established in one or more indentures supplemental hereto, prior
to the issuance of Securities of any series:
(1) the title of the Securities of the series (which shall distinguish
the Securities of the series from the Securities all other series);
(2) any limit upon the aggregate principal amount of the Securities of
the series that may be authenticated and delivered under this Indenture
(except for Securities authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Securities of the
series pursuant to Section 2.08, 2.09, 2.12, 3.07 or 9.05);
(3) whether any Securities of the series are to be issuable initially
in temporary global form and whether any Securities of the series are to be
issuable in permanent global form, as Global Securities or otherwise, and,
if so, whether beneficial owners of interests in any such Global Security
may exchange such interests for Securities of such series and of like tenor
of any authorized form and denomination and the circumstances under which
any such exchanges may occur, if other than in the manner provided in
Section 2.17, and the initial Depositary for any Global Security or
Securities of such series;
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(4) the manner in which any interest payable on a temporary Global
Security on any Interest Payment Date will be paid if other than in the
manner provided in Section 2.14;
(5) the date or dates on which the principal of (and premium, if any,
on) the Securities of the series is payable or the method of determination
thereof;
(6) the rate or rates, or the method of determination thereof, at
which the Securities of the series shall bear interest, if any, whether and
under what circumstances Additional Amounts with respect to such Securities
shall be payable, the date or dates from which such interest shall accrue,
the Interest Payment Dates on which such interest shall be payable and the
record date for the interest payable on any Securities on any Interest
Payment Date, or if other than provided herein, the Person to whom any
interest on Securities of the series shall be payable;
(7) the place or places where, subject to the provisions of Section
4.02, the principal, premium (if any), interest and any Additional Amounts
with respect to the Securities of the series shall be payable;
(8) the period or periods within which, the price or prices (whether
denominated in cash, securities or otherwise) at which and the terms and
conditions upon which Securities of the series may be redeemed, in whole or
in part, at the option of the Company, if the Company is to have that
option, and the manner in which the Company must exercise any such option,
if different from those set forth herein;
(9) the obligation, if any, of the Company to redeem, purchase or
repay Securities of the series pursuant to any sinking fund or analogous
provisions or at the option of a Holder thereof and the period or periods
within which, the price or prices (whether denominated in cash, securities
or otherwise) at which and the terms and conditions upon which Securities
of the series shall be redeemed, purchased or repaid in whole or in part
pursuant to such obligation;
(10) if other than denominations of $1,000 and any integral multiple
thereof, the denomination in which any Securities of that series shall be
issuable;
(11) if other than Dollars, the currency or currencies (including
composite currencies) in which payment of the principal, premium (if any),
interest and any Additional Amounts with respect to the Securities of the
series shall be payable;
(12) if the principal of, premium (if any) or interest on or any
Additional Amounts with respect to the Securities of the series are to be
payable, at the election of the Company or a Holder thereof, in a currency
or currencies (including composite currencies) other than that in which the
Securities are stated to be payable, the currency or currencies (including
composite currencies) in which payment of the principal, premium (if any),
interest and any Additional Amounts with respect to Securities of such
series as to which such election is
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made shall be payable, and the periods within which and the terms and
conditions upon which such election is to be made;
(13) if the amount of payments of principal, premium (if any),
interest and any Additional Amounts with respect to the Securities of the
series may be determined with reference to any commodities, currencies or
indices, values, rates or prices or any other index or formula, the manner
in which such amounts shall be determined;
(14) if other than the entire principal amount thereof, the portion of
the principal amount of Securities of the series that shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section
6.02;
(15) any additional means of satisfaction and discharge of this
Indenture and any additional conditions or limitations to discharge with
respect to Securities of the series pursuant to Article VIII or any
modifications of or deletions from such conditions or limitations;
(16) any deletions or modifications of or additions to the Events of
Default set forth in Section 6.01 or covenants of the Company set forth in
Article IV pertaining to the Securities of the series;
(17) any restrictions or other provisions with respect to the transfer
or exchange of Securities of the series, which may amend, supplement,
modify or supersede those contained in this Article II;
(18) if the Securities of the series are to be convertible into or
exchangeable for capital stock, other debt securities (including
Securities), warrants, other equity securities or any other securities or
property of the Company or any other Person, at the option of the Company
or the Holder or upon the occurrence of any condition or event, the terms
and conditions for such conversion or exchange;
(19) if the Securities of the series are to be entitled to the benefit
of Section 4.03(b) (and accordingly constitute Rule 144A Securities); and
(20) any other terms of the series (which terms shall not be
prohibited by the provisions of this Indenture).
All Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided in or pursuant
to the Board Resolution referred to above and (subject to Section 2.03) set
forth, or determined in the manner provided, in the Officers' Certificate
referred to above or in any such indenture supplemental hereto.
If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such action
together with such Board Resolution shall
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be set forth in an Officers' Certificate and delivered to the Trustee at or
prior to the delivery of the Officers' Certificate setting forth the terms of
the series.
The Securities shall be subordinated in right of payment to Senior
Indebtedness as provided in Article X.
SECTION 2.02 Denominations.
The Securities of each series shall be issuable in such denominations
as shall be specified as contemplated by Section 2.01. In the absence of any
such provisions with respect to the Securities of any series, the Securities of
such series denominated in Dollars shall be issuable in denominations of $1,000
and any integral multiples thereof.
SECTION 2.03 Forms Generally.
The Securities of each series shall be in fully registered form and in
substantially such form or forms (including temporary or permanent global form)
established by or pursuant to a Board Resolution or in one or more indentures
supplemental hereto. The Securities may have notations, legends or endorsements
required by law, securities exchange rule, the Company's certificate of
incorporation, bylaws or other similar governing documents, agreements to which
the Company is subject, if any, or usage (provided that any such notation,
legend or endorsement is in a form acceptable to the Company). A copy of the
Board Resolution establishing the form or forms of Securities of any series
shall be delivered to the Trustee at or prior to the delivery of the Company
Order contemplated by Section 2.04 for the authentication and delivery of such
Securities.
The definitive Securities of each series shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers executing such Securities, as
evidenced by their execution thereof.
The Trustee's certificate of authentication shall be in substantially
the following form:
"This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
_________________________, as Trustee
By: _____________________________________
Authorized Officer".
SECTION 2.04 Execution, Authentication, Delivery and Dating.
Two Officers of the Company shall sign the Securities on behalf of the
Company by manual or facsimile signature. The Company's seal, if any, shall be
impressed, affixed, imprinted or reproduced on the Securities and may be in
facsimile form.
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If an Officer of the Company whose signature is on a Security no
longer holds that office at the time the Security is authenticated, the Security
shall be valid nevertheless.
A Security shall not be entitled to any benefit under this Indenture
or be valid or obligatory for any purpose until authenticated by the manual
signature of an authorized signatory of the Trustee, which signature shall be
conclusive evidence that the Security has been authenticated under this
Indenture. Notwithstanding the foregoing, if any Security has been
authenticated and delivered hereunder but never issued and sold by the Company,
and the Company delivers such Security to the Trustee for cancellation as
provided in Section 2.13 together with a written statement (which need not
comply with Section 11.05 and need not be accompanied by an Opinion of Counsel)
stating that such Security has never been issued and sold by the Company, for
all purposes of this Indenture such Security shall be deemed never to have been
authenticated and delivered hereunder and shall never be entitled to the
benefits of this Indenture.
The Trustee shall authenticate and deliver Securities of a series for
original issue upon a Company Order for the authentication and delivery of such
Securities or pursuant to such procedures acceptable to the Trustee as may be
specified from time to time by Company Order. Such order shall specify the
amount of the Securities to be authenticated, the date on which the original
issue of Securities is to be authenticated, the name or names of the initial
Holder or Holders and any other terms of the Securities of such series not
otherwise determined. If provided for in such procedures, such Company Order
may authorize (1) authentication and delivery of Securities of such series for
original issue from time to time, with certain terms (including, without
limitation, the Maturity dates or dates, original issue date or dates and
interest rate or rates) that differ from Security to Security and (2) may
authorize authentication and delivery pursuant to oral or electronic
instructions from the Company or its duly authorized agent, which instructions
shall be promptly confirmed in writing.
If the form or terms of the Securities of the series have been
established in or pursuant to one or more Board Resolutions as permitted by
Section 2.01, in authenticating such Securities, and accepting the additional
responsibilities under this Indenture in relation to such Securities, the
Trustee shall be entitled to receive (in addition to the Company Order referred
to above and the other documents required by Section 11.04), and (subject to
Section 7.01) shall be fully protected in relying upon,
(a) an Officers' Certificate certifying as to the Board Resolution and
an appropriate record of any action taken pursuant thereto, as contemplated
by the last paragraph of Section 2.01; and
(b) an Opinion of Counsel to the effect that:
(i) if the form of such Securities has been established by or
pursuant to Board Resolution, as is permitted by Section 2.01, that
such form has been established in conformity with the provisions of
this Indenture;
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(ii) if the terms of such Securities have been established by or
pursuant to Board Resolution, as is permitted by Section 2.01, that
such terms have been established in conformity with the provisions of
this Indenture; and
(iii) that such Securities, when authenticated and delivered by
the Trustee and issued by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute valid
and binding obligations of the Company, enforceable against the
Company in accordance with their terms, except as the enforceability
thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar
laws in effect from time to time affecting the rights of creditors
generally, and the application of general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law).
The Trustee shall not be required to authenticate such Securities if the
issuance of such Securities pursuant to this Indenture would affect the
Trustee's own rights, duties or immunities under the Securities and this
Indenture or otherwise in a manner not reasonably acceptable to the Trustee.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Securities. Unless limited by the terms of such
appointment, an authenticating agent may authenticate Securities whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with the Company or an Affiliate of the Company.
Each Security shall be dated the date of its authentication.
SECTION 2.05 Registrar and Paying Agent.
The Company shall maintain an office or agency for each series of
Securities where Securities of such series may be presented for registration of
transfer or exchange ("Registrar") and an office or agency where Securities of
such series may be presented for payment ("Paying Agent"). The Registrar shall
keep a register of the Securities of such series and of their transfer and
exchange. The Company may appoint one or more co-registrars and one or more
additional paying agents. The term "Registrar" includes any co-registrar and
the term "Paying Agent" includes any additional paying agent.
The Company shall enter into an appropriate agency agreement with any
Registrar or Paying Agent not a party to this Indenture. The agreement shall
implement the provisions of this Indenture that relate to such Agent. The
Company shall notify the Trustee of the name and address of any Agent not a
party to this Indenture. The Company may change any Paying Agent or Registrar
without notice to any Holder. If the Company fails to appoint or maintain
another entity as Registrar or Paying Agent, the Trustee shall act as such. The
Company or any of its Subsidiaries may act as Paying Agent or Registrar.
The Company initially appoints the Trustee as Registrar and Paying
Agent.
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SECTION 2.06 Paying Agent to Hold Money in Trust.
The Company shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent will hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal of, premium, if any, or interest on or any Additional Amounts with
respect to Securities and will notify the Trustee of any default by the Company
in making any such payment. While any such default continues, the Trustee may
require a Paying Agent to pay all money held by it to the Trustee and to account
for any funds disbursed. The Company at any time may require a Paying Agent to
pay all money held by it to the Trustee and to account for any funds disbursed.
Upon payment over to the Trustee and upon accounting for any funds disbursed,
the Paying Agent (if other than the Company or a Subsidiary of the Company)
shall have no further liability for the money. If the Company or a Subsidiary
of the Company acts as Paying Agent, it shall segregate and hold in a separate
trust fund for the benefit of the Holders all money held by it as Paying Agent.
Each Paying Agent shall otherwise comply with TIA (S) 317(b).
SECTION 2.07 Holder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders and shall otherwise comply with TIA (S) 312(a). If the Trustee is not
the Registrar with respect to a series of Securities, the Company shall furnish
to the Trustee at least five Business Days before each Interest Payment Date
with respect to a series of Securities, and at such other times as the Trustee
may request in writing, a list in such form and as of such date as the Trustee
may reasonably require of the names and addresses of Holders of such series, and
the Company shall otherwise comply with TIA (S) 312(a).
SECTION 2.08 Transfer and Exchange.
Except as set forth in Section 2.17 or as may be provided pursuant to
Section 2.01:
When Securities of any series are presented to the Registrar with the
request to register the transfer of such Securities or to exchange such
Securities for an equal principal amount of Securities of the same series of
like tenor and of other authorized denominations, the Registrar shall register
the transfer or make the exchange as requested if its requirements for such
transactions are met; provided, however, that the Securities presented or
surrendered for registration of transfer or exchange shall be duly endorsed or
accompanied by a written instruction of transfer in form reasonably satisfactory
to the Registrar duly executed by the Holder thereof or by his attorney, duly
authorized in writing, on which instruction the Registrar can rely.
To permit registrations of transfers and exchanges, the Company shall
execute and the Trustee shall authenticate Securities at the Registrar's written
request and submission of the Securities or Global Securities. No service
charge shall be made to a Holder for any registration of transfer or exchange
(except as otherwise expressly permitted herein), but the Company may require
payment of a sum sufficient to cover any transfer tax or similar governmental
charge payable in connection therewith (other than such transfer tax or similar
governmental charge payable upon exchanges pursuant to Section 2.12, 3.07 or
9.05). The Trustee shall authenticate Securities in
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accordance with the provisions of Section 2.04. Notwithstanding any other
provisions of this Indenture to the contrary, the Company shall not be required
to register the transfer or exchange of (a) any Security selected for redemption
in whole or in part pursuant to Article III, except the unredeemed portion of
any Security being redeemed in part or (b) any Security during the period
beginning 15 Business Days before the mailing of notice of any offer to
repurchase Securities of the series required pursuant to the terms thereof or of
redemption of Securities of a series to be redeemed and ending at the close of
business on the date of mailing.
SECTION 2.09 Replacement Securities.
If any mutilated Security is surrendered to the Trustee, or if the
Holder of a Security claims that the Security has been destroyed, lost or stolen
and the Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of such Security, the Company shall issue and the
Trustee shall authenticate a replacement Security of the same series if the
Trustee's requirements are met. If any such mutilated, destroyed, lost or
stolen Security has become or is about to become due and payable, the Company in
its discretion may, instead of issuing a new Security, pay such Security. If
required by the Trustee or the Company, such Holder must furnish an indemnity
bond that is sufficient in the judgment of the Trustee and the Company to
protect the Company, the Trustee, any Agent or any authenticating agent from any
loss that any of them may suffer if a Security is replaced. The Company and the
Trustee may charge a Holder for their expenses in replacing a Security.
Every replacement Security is an additional obligation of the Company.
SECTION 2.10 Outstanding Securities.
The Securities outstanding at any time are all the Securities
authenticated by the Trustee except for those canceled by it, those delivered to
it for cancellation, those reductions in the interest in a Global Security
effected by the Trustee hereunder and those described in this Section 2.10 as
not outstanding.
If a Security is replaced pursuant to Section 2.09, it ceases to be
outstanding unless the Company and the Trustee receive proof that the replaced
Security is held by a bona fide purchaser.
If the principal amount of any Security is considered paid under
Section 4.01, it ceases to be outstanding and interest on it ceases to accrue.
A Security does not cease to be outstanding because the Company or an
Affiliate of the Company holds the Security.
SECTION 2.11 Original Issue Discount, Foreign-Denominated and Treasury
Securities.
In determining whether the Holders of the required principal amount of
Securities have concurred in any direction, amendment, supplement, waiver or
consent, (a) the principal
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amount of an Original Issue Discount Security shall be the principal amount
thereof that would be due and payable as of the date of such determination upon
acceleration of the Maturity thereof pursuant to Section 6.02, (b) the principal
amount of a Security denominated in a foreign currency shall be the Dollar
equivalent, as determined by the Company by reference to the noon buying rate in
The City of New York for cable transfers for such currency, as such rate is
certified for customs purposes by the Federal Reserve Bank of New York (the
"Exchange Rate") on the date of original issuance of such Security, of the
principal amount (or, in the case of an Original Issue Discount Security, the
Dollar equivalent, as determined by the Company by reference to the Exchange
Rate on the date of original issuance of such Security, of the amount determined
as provided in (a) above), of such Security and (c) Securities owned by the
Company or any other obligor upon the Securities or any Affiliate of the Company
or of such other obligor shall be disregarded, except that, for the purpose of
determining whether the Trustee shall be protected in relying upon any such
direction, amendment, supplement, waiver or consent, only Securities that the
Trustee actually knows are so owned shall be so disregarded.
SECTION 2.12 Temporary Securities.
Until definitive Securities of any series are ready for delivery, the
Company may prepare and the Trustee shall authenticate temporary Securities.
Temporary Securities shall be substantially in the form of definitive
Securities, but may have variations that the Company considers appropriate for
temporary Securities. Without unreasonable delay, the Company shall prepare and
the Trustee shall authenticate definitive Securities in exchange for temporary
Securities. Until so exchanged, the temporary Securities shall in all respects
be entitled to the same benefits under this Indenture as definitive Securities.
SECTION 2.13 Cancellation.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Securities surrendered to them for registration of transfer, exchange,
payment or redemption or for credit against any sinking fund payment. The
Trustee shall cancel all Securities surrendered for registration of transfer,
exchange, payment, redemption, replacement or cancellation or for credit against
any sinking fund. Unless the Company shall direct in writing that canceled
Securities be returned to it, after written notice to the Company all canceled
Securities held by the Trustee shall be disposed of in accordance with the usual
disposal procedures of the Trustee, and the Trustee shall maintain a record of
their disposal. The Company may not issue new Securities to replace Securities
that have been paid or that have been delivered to the Trustee for cancellation.
SECTION 2.14 Payments; Defaulted Interest.
The Company will pay interest on the Securities (except defaulted
interest) to the Persons who are registered Holders of Securities at the close
of business on the record date next preceding the Interest Payment Date, even if
such Securities are canceled after such record date and on or before such
Interest Payment Date. The Holder must surrender this Security to a Paying
Agent to collect principal payments. Unless otherwise provided with respect to
the Securities of any series,
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the Company will pay the principal of, premium (if any) on, interest on or any
Additional Amounts on the Securities in Dollars. Such amounts shall be payable
at the offices of the Trustee, provided that at the option of the Company, the
Company may, however, pay such amounts (1) by wire transfer with respect to
Global Securities or (2) by check payable in such money mailed to a Holder's
registered address with respect to any Securities.
If the Company defaults in a payment of interest on the Securities, it
shall pay the defaulted interest in any lawful manner plus, to the extent
lawful, interest on the defaulted interest, in each case at the rate provided in
the Securities and in Section 4.01. The Company may pay the defaulted interest
to the Persons who are Holders on a subsequent special record date. At least 15
days before any special record date selected by the Company, the Company (or the
Trustee, in the name of and at the expense of the Company upon 20 days' prior
written notice from the Company setting forth such record date and the interest
amount to be paid) shall mail to Holders a notice that states the special record
date, the related payment date and the amount of such interest to be paid.
SECTION 2.15 Persons Deemed Owners.
The Company, the Trustee, any Agent and any authenticating agent may
treat the Person in whose name any Security is registered as the owner of such
Security for the purpose of receiving payments of principal of, premium (if any)
on, interest on or any Additional Amounts on such Security and for all other
purposes. None of the Company, the Trustee, any Agent or any authenticating
agent shall be affected by any notice to the contrary.
SECTION 2.16 Computation of Interest.
Except as otherwise specified as contemplated by Section 2.01 for
Securities of any series, interest on the Securities of each series shall be
computed on the basis of a year comprising twelve 30-day months.
SECTION 2.17 Global Securities; Book-Entry Provisions.
If Securities of a series are issuable in global form as a Global
Security, as contemplated by Section 2.01, then, notwithstanding clause (10) of
Section 2.01 and the provisions of Section 2.02, any such Global Security shall
represent such of the outstanding Securities of such series as shall be
specified therein and may provide that it shall represent the aggregate amount
of outstanding Securities from time to time endorsed thereon and that the
aggregate amount of outstanding Securities represented thereby may from time to
time be reduced to reflect exchanges. Any endorsement of a Global Security to
reflect the amount, or any increase or decrease in the amount, of outstanding
Securities represented thereby shall be made by the Trustee in such manner and
upon instructions given by such Person or Persons as shall be specified in such
Security or in a Company Order to be delivered to the Trustee pursuant to
Section 2.04. Subject to the provisions of Section 2.04 and, if applicable,
Section 2.12, the Trustee shall deliver and redeliver any Security in permanent
global form in the manner and upon instructions given by the Person or Persons
specified in such Security or in the applicable Company Order. With respect to
the Securities of any series that are represented by a Global Security, the
Company authorizes the execution and delivery
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by the Trustee of a letter of representations or other similar agreement or
instrument in the form customarily provided for by the Depositary appointed with
respect to such Global Security. Any Global Security may be deposited with the
Depositary or its nominee, or may remain in the custody of the Trustee pursuant
to a FAST Balance Certificate Agreement or similar agreement between the Trustee
and the Depositary. If a Company Order has been, or simultaneously is,
delivered, any instructions by the Company with respect to endorsement or
delivery or redelivery of a Security in global form shall be in writing but need
not comply with Section 11.05 and need not be accompanied by an Opinion of
Counsel.
Members of, or participants in, the Depositary ("Agent Members") shall
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depositary, or the Trustee as its custodian, or under such
Global Security and the Depositary may be treated by the Company, the Trustee
and any agent of the Company or the Trustee as the absolute owner of such Global
Security for all purposes whatsoever. Notwithstanding the foregoing, (i) the
registered holder of a Global Security may grant proxies and otherwise authorize
any Person, including Agent Members and Persons that may hold interests through
Agent Members, to take any action that a Holder is entitled to take under this
Indenture or the Securities and (ii) nothing herein shall prevent the Company,
the Trustee or any agent of the Company or the Trustee, from giving effect to
any written certification, proxy or other authorization furnished by the
Depositary or shall impair, as between the Depositary and its Agent Members, the
operation of customary practices governing the exercise of the rights of a
beneficial owner of any Security.
Notwithstanding Section 2.08, and except as otherwise provided
pursuant to Section 2.01: Transfers of a Global Security shall be limited to
transfers of such Global Security in whole, but not in part, to the Depositary,
its successors or their respective nominees. Interests of beneficial owners in
a Global Security may be transferred in accordance with the rules and procedures
of the Depositary. Securities shall be transferred to all beneficial owners in
exchange for their beneficial interests in a Global Security if, and only if,
either (1) the Depositary notifies the Company that it is unwilling or unable to
continue as Depositary for the Global Security and a successor Depositary is not
appointed by the Company within 90 days of such notice, (2) an Event of Default
has occurred with respect to such series and is continuing and the Registrar has
received a request from the Depositary to issue Securities in lieu of all or a
portion of the Global Security (in which case the Company shall deliver
Securities within 30 days of such request) or (3) the Company determines not to
have the Securities represented by a Global Security.
In connection with any transfer of a portion of the beneficial
interest in a Global Security to beneficial owners pursuant to this Section
2.17, the Registrar shall reflect on its books and records the date and a
decrease in the principal amount of the Global Security in an amount equal to
the principal amount of the beneficial interest in the Global Security to be
transferred, and the Company shall execute, and the Trustee upon receipt of a
Company Order for the authentication and delivery of Securities shall
authenticate and deliver, one or more Securities of the same series of like
tenor and amount.
In connection with the transfer of an entire Global Security to
beneficial owners pursuant to this Section 2.17, the Global Security shall be
deemed to be surrendered to the Trustee
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for cancellation, and the Company shall execute, and the Trustee shall
authenticate and deliver, to each beneficial owner identified by the Depositary
in exchange for its beneficial interest in the Global Security, an equal
aggregate principal amount of Securities of authorized denominations.
Neither the Company nor the Trustee will have any responsibility or
liability for any aspect of the records relating to, or payments made on account
of, Securities by the Depositary, or for maintaining, supervising or reviewing
any records of the Depositary relating to such Securities. Neither the Company
nor the Trustee shall be liable for any delay by the related Global Security
Holder or the Depositary in identifying the beneficial owners, and each such
Person may conclusively rely on, and shall be protected in relying on,
instructions from such Global Security Holder or the Depositary for all purposes
(including with respect to the registration and delivery, and the respective
principal amounts, of the Securities to be issued).
The provisions of the last sentence of the third paragraph of Section
2.04 shall apply to any Global Security if such Global Security was never issued
and sold by the Company and the Company delivers to the Trustee the Global
Security together with written instructions (which need not comply with Section
11.05 and need not be accompanied by an Opinion of Counsel) with regard to the
cancellation or reduction in the principal amount of Securities represented
thereby, together with the written statement contemplated by the last sentence
of the third paragraph of Section 2.04.
Notwithstanding the provisions of Sections 2.03 and 2.14, unless
otherwise specified as contemplated by Section 2.01, payment of principal of,
premium (if any) or interest on and any Additional Amounts with respect to any
Global Security shall be made to the Person or Persons specified therein.
ARTICLE III
REDEMPTION
SECTION 3.01 Applicability of Article.
Securities of any series that are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 2.01 for Securities of any
series) in accordance with this Article III.
SECTION 3.02 Notice to the Trustee.
If the Company elects to redeem Securities of any series pursuant to
this Indenture, it shall notify the Trustee of the Redemption Date and principal
amount of Securities of such series to be redeemed. The Company shall so notify
the Trustee at least 45 days before the Redemption Date (unless a shorter notice
shall be satisfactory to the Trustee) by delivering to the Trustee an Officers'
Certificate stating that such redemption will comply with the provisions of this
Indenture and of the Securities of such series. Any such notice may be canceled
at any time prior to the mailing of such notice of such redemption to any Holder
and shall thereupon be void and of no effect.
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SECTION 3.03 Selection of Securities To Be Redeemed.
If less than all the Securities of any series are to be redeemed, the
particular Securities to be redeemed shall be selected not more than 60 days
prior to the Redemption Date by the Trustee, from the outstanding Securities of
such series not previously called for redemption, pro rata, by lot or by such
other method as the Trustee shall deem fair and appropriate and that may provide
for the selection for redemption of portions (equal to the minimum authorized
denomination for Securities of that series or any integral multiple thereof) of
the principal amount of Securities of such series of a denomination larger than
the minimum authorized denomination for Securities of that series or of the
principal amount of global Securities of such series.
The Trustee shall promptly notify the Company and the Registrar in
writing of the Securities selected for redemption and, in the case of any
Securities selected for partial redemption, the principal amount thereof to be
redeemed.
For purposes of this Indenture, unless the context otherwise requires,
all provisions relating to redemption of Securities shall relate, in the case of
any of the Securities redeemed or to be redeemed only in part, to the portion of
the principal amount thereof which has been or is to be redeemed.
SECTION 3.04 Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption
Date, to each Holder of Securities to be redeemed, at the address of such Holder
appearing in the register of Securities maintained by the Registrar.
All notices of redemption shall identify the Securities to be redeemed
and shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) that, unless the Company defaults in making the redemption
payment, interest on Securities called for redemption ceases to accrue on
and after the Redemption Date, and the only remaining right of the Holders
of such Securities is to receive payment of the Redemption Price upon
surrender to the Paying Agent of the Securities redeemed;
(4) if any Security is to be redeemed in part, the portion of the
principal amount thereof to be redeemed and that on and after the
Redemption Date, upon surrender for cancellation of such Security to the
Paying Agent, a new Security or Securities in the aggregate principal
amount equal to the unredeemed portion thereof will be issued without
charge to the Holder;
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(5) that Securities called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price and the name and address of
the Paying Agent;
(6) that the redemption is for a sinking or analogous fund, if such is
the case; and
(7) the CUSIP number, if any, relating to such Securities.
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's written request,
by the Trustee in the name and at the expense of the Company.
SECTION 3.05 Effect of Notice of Redemption.
Once notice of redemption is mailed, Securities called for redemption
become due and payable on the Redemption Date and at the Redemption Price. Upon
surrender to the Paying Agent, such Securities called for redemption shall be
paid at the Redemption Price, but interest installments whose maturity is on or
prior to such Redemption Date will be payable on the relevant Interest Payment
Dates to the Holders of record at the close of business on the relevant record
dates specified pursuant to Section 2.01.
SECTION 3.06 Deposit of Redemption Price.
On or prior to any Redemption Date, the Company shall deposit with the
Trustee or the Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 2.06) an amount of
money in same day funds sufficient to pay the Redemption Price of, and (except
if the Redemption Date shall be an Interest Payment Date) accrued interest on
and any Additional Amounts with respect to, the Securities or portions thereof
which are to be redeemed on that date, other than Securities or portions thereof
called for redemption on that date which have been delivered by the Company to
the Trustee for cancellation.
If the Company complies with the preceding paragraph, then, unless the
Company defaults in the payment of such Redemption Price, interest on the
Securities to be redeemed will cease to accrue on and after the applicable
Redemption Date, whether or not such Securities are presented for payment, and
the Holders of such Securities shall have no further rights with respect to such
Securities except for the right to receive the Redemption Price upon surrender
of such Securities. If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the principal, premium, if any, any
Additional Amounts, and, to the extent lawful, accrued interest thereon shall,
until paid, bear interest from the Redemption Date at the rate specified
pursuant to Section 2.01 or, in the case of Original Issue Discount Securities,
such Securities' yield to maturity.
SECTION 3.07 Securities Redeemed or Purchased in Part.
Upon surrender to the Paying Agent of a Security to be redeemed in
part, the Company shall execute and the Trustee shall authenticate and deliver
to the Holder of such Security
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without service charge a new Security or Securities, of the same series and of
any authorized denomination as requested by such Holder in aggregate principal
amount equal to, and in exchange for, the unredeemed portion of the principal of
the Security so surrendered that is not redeemed.
SECTION 3.08 Purchase of Securities.
Unless otherwise specified as contemplated by Section 2.01, the
Company and any Affiliate of the Company may at any time purchase or otherwise
acquire Securities in the open market or by private agreement. Such acquisition
shall not operate as or be deemed for any purpose to be a redemption of the
indebtedness represented by such Securities. Any Securities purchased or
acquired by the Company may be delivered to the Trustee and, upon such delivery,
the indebtedness represented thereby shall be deemed to be satisfied. Section
2.13 shall apply to all Securities so delivered.
SECTION 3.09 Mandatory and Optional Sinking Funds.
The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series is herein referred to as a "mandatory sinking
fund payment," and any payment in excess of such minimum amount provided for by
the terms of Securities of any series is herein referred to as an "optional
sinking fund payment." Unless otherwise provided by the terms of Securities of
any series, the cash amount of any sinking fund payment may be subject to
reduction as provided in Section 3.10. Each sinking fund payment shall be
applied to the redemption of Securities of any series as provided for by the
terms of Securities of such series and by this Article III.
SECTION 3.10 Satisfaction of Sinking Fund Payments with Securities.
The Company may deliver outstanding Securities of a series (other than
any previously called for redemption) and may apply as a credit Securities of a
series that have been redeemed either at the election of the Company pursuant to
the terms of such Securities or through the application of permitted optional
sinking fund payments pursuant to the terms of such Securities, in each case in
satisfaction of all or any part of any sinking fund payment with respect to the
Securities of such series required to be made pursuant to the terms of such
series of Securities; provided that such Securities have not been previously so
credited. Such Securities shall be received and credited for such purpose by
the Trustee at the Redemption Price specified in such Securities for redemption
through operation of the sinking fund and the amount of such sinking fund
payment shall be reduced accordingly.
SECTION 3.11 Redemption of Securities for Sinking Fund.
Not less than 45 days prior (unless a shorter period shall be
satisfactory to the Trustee) to each sinking fund payment date for any series of
Securities, the Company will deliver to the Trustee an Officers' Certificate
specifying the amount of the next ensuing sinking fund payment for that series
pursuant to the terms of that series, the portion thereof, if any, which is to
be satisfied by payment of cash and the portion thereof, if any, which is to be
satisfied by delivery of
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or by crediting Securities of that series pursuant to Section 3.10 and will also
deliver to the Trustee any Securities to be so delivered. Failure of the Company
to timely deliver such Officers' Certificate and Securities specified in this
paragraph, if any, shall not constitute a default but shall constitute the
election of the Company (i) that the mandatory sinking fund payment for such
series due on the next succeeding sinking fund payment date shall be paid
entirely in cash without the option to deliver or credit Securities of such
series in respect thereof and (ii) that the Company will make no optional
sinking fund payment with respect to such series as provided in this Section.
If the sinking fund payment or payments (mandatory or optional or
both) to be made in cash on the next succeeding sinking fund payment date plus
any unused balance of any preceding sinking fund payments made in cash shall
exceed $100,000 (or the Dollar equivalent thereof based on the applicable
Exchange Rate on the date of original issue of the applicable Securities) or a
lesser sum if the Company shall so request with respect to the Securities of any
particular series, such cash shall be applied on the next succeeding sinking
fund payment date to the redemption of Securities of such series at the sinking
fund redemption price together with accrued interest to the date fixed for
redemption. If such amount shall be $100,000 (or the Dollar equivalent thereof
as aforesaid) or less and the Issuer makes no such request then it shall be
carried over until a sum in excess of $100,000 (or the Dollar equivalent thereof
as aforesaid) is available. Not less than 30 days before each such sinking fund
payment date, the Trustee shall select the Securities to be redeemed upon such
sinking fund payment date in the manner specified in Section 3.03 and cause
notice of the redemption thereof to be given in the name of and at the expense
of the Company in the manner provided in Section 3.04. Such notice having been
duly given, the redemption of such Securities shall be made upon the terms and
in the manner stated in Sections 3.05, 3.06 and 3.07.
ARTICLE IV
COVENANTS
SECTION 4.01 Payment of Securities.
The Company shall pay the principal of, premium (if any) and interest
on and any Additional Amounts with respect to the Securities of each series on
the dates and in the manner provided in the Securities of such series and in
this Indenture. Principal, premium, interest and any Additional Amounts shall
be considered paid on the date due if the Paying Agent, other than the Company
or a Subsidiary of the Company, holds on that date money deposited by the
Company designated for and sufficient to pay all principal, premium, interest
and any Additional Amounts then due.
The Company shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue principal and premium (if
any), at a rate equal to the then applicable interest rate on the Securities to
the extent lawful; and it shall pay interest (including post-petition interest
in any proceeding under any Bankruptcy Law) on overdue installments of interest
and any Additional Amount (without regard to any applicable grace period) at the
same rate to the extent lawful.
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SECTION 4.02 Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for any series of
Securities an office or agency (which may be an office of the Trustee, the
Registrar or the Paying Agent) where Securities of that series may be presented
for registration of transfer or exchange, where Securities of that series may be
presented for payment and where notices and demands to or upon the Company in
respect of the Securities of that series and this Indenture may be served.
Unless otherwise designated by the Company by written notice to the Trustee,
such office or agency shall be the office of the Trustee in The City of New
York, which on the date hereof, is located at ____________________. The Company
will give prompt written notice to the Trustee of the location, and any change
in the location, of such office or agency. If at any time the Company shall
fail to maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more other
offices or agencies where the Securities of one or more series may be presented
or surrendered for any or all such purposes and may from time to time rescind
such designations; provided, however, that no such designation or rescission
shall in any manner relieve the Company of its obligation to maintain an office
or agency in each Place of Payment for Securities of any series for such
purposes. The Company will give prompt written notice to the Trustee of any
such designation or rescission and of any change in the location of any such
other office or agency.
SECTION 4.03 SEC Reports; Financial Statements.
(a) The Company shall file with the Trustee, within 15 days after it
files the same with the SEC, copies of the annual reports and the information,
documents and other reports (or copies of such portions of any of the foregoing
as the SEC may by rules and regulations prescribe) that the Company is required
to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act. The
Company shall also comply with the provisions of TIA (S) 314(a).
(b) If the Company is not subject to the requirements of Section 13 or
15(d) of the Exchange Act, the Company shall furnish to all Holders of Rule 144A
Securities and prospective purchasers of Rule 144A Securities designated by the
Holders of Rule 144A Securities, promptly upon their request, the information
required to be delivered pursuant to Rule 144A(d)(4) promulgated under the
Securities Act of 1933, as amended.
SECTION 4.04 Compliance Certificate.
(a) The Company shall deliver to the Trustee, within 120 days after
the end of each fiscal year of the Company, a statement signed by two Officers
of the Company, which need not constitute an Officers' Certificate, complying
with TIA (S) 314(a)(4) and stating that in the course of performance by the
signing Officers of the Company of their duties as such Officers of the Company
they would normally obtain knowledge of the keeping, observing, performing and
fulfilling by the Company of its obligations under this Indenture, and further
stating, as to each such
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Officer signing such statement, that to the best of his knowledge the Company
has kept, observed, performed and fulfilled each and every covenant contained in
this Indenture and is not in default in the performance or observance of any of
the terms, provisions and conditions hereof (or, if a Default or Event of
Default shall have occurred, describing all such Defaults or Events of Default
of which such Officer may have knowledge and what action the Company is taking
or proposes to take with respect thereto).
(b) The Company shall, so long as Securities of any series are
outstanding, deliver to the Trustee, forthwith upon any Officer of the Company
becoming aware of any Default or Event of Default under this Indenture, an
Officers' Certificate specifying such Default or Event of Default and what
action the Company is taking or proposes to take with respect thereto.
SECTION 4.05 Corporate Existence.
Subject to Article V hereof, the Company shall do or cause to be done
all things necessary to preserve and keep in full force and effect its corporate
existence and the corporate, partnership and other existence of each of its
Subsidiaries and all rights (charter and statutory) and franchises of the
Company and its Subsidiaries, provided that the Company shall not be required to
preserve the corporate existence of any Subsidiary of the Company or any such
right or franchise if the Board of Directors shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company and its Subsidiaries taken as a whole and that the loss thereof
would not have a material adverse effect on the business, prospects, assets or
financial condition of the Company and its Subsidiaries taken as a whole and
would not have any material adverse effect on the payment and performance of the
obligations of the Company under the Securities and this Indenture.
SECTION 4.06 Waiver of Stay, Extension or Usury Laws.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law or any usury law
or other law that would prohibit or forgive the Company from paying all or any
portion of the principal of or interest on the Securities as contemplated
herein, wherever enacted, now or at any time hereafter in force, or which may
affect the covenants or the performance of this Indenture; and (to the extent
that it may lawfully do so) the Company hereby expressly waives all benefit or
advantage of any such law, and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will suffer
and permit the execution of every such power as though no such law had been
enacted.
SECTION 4.07 Additional Amounts.
If the Securities of a series expressly provide for the payment of
Additional Amounts, the Company will pay to the Holder of any Security of such
series Additional Amounts as expressly provided therein. Whenever in this
Indenture there is mentioned, in any context, the payment of the principal of or
any premium or interest on, or in respect of, any Security of any series or the
net proceeds received from the sale or exchange of any Security of any series,
such mention shall be
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deemed to include mention of the payment of Additional Amounts provided for in
this Section 4.07 to the extent that, in such context, Additional Amounts are,
were or would be payable in respect thereof pursuant to the provisions of this
Section 4.07 and express mention of the payment of Additional Amounts (if
applicable) in any provisions hereof shall not be construed as excluding
Additional Amounts in those provisions hereof where such express mention is not
made.
Unless otherwise provided pursuant to Section 2.01 with respect to
Securities of any series: If the Securities of a series provide for the payment
of Additional Amounts, at least ten days prior to the first Interest Payment
Date with respect to that series of Securities (or if the Securities of that
series will not bear interest prior to Maturity, the first day on which a
payment of principal and any premium is made), and at least ten days prior to
each date of payment of principal and any premium or interest if there has been
any change with respect to the matters set forth in the below-mentioned
Officers' Certificate, the Company shall furnish the Trustee and the Company's
principal Paying Agent or Paying Agents, if other than the Trustee, with an
Officers' Certificate instructing the Trustee and such Paying Agent or Paying
Agents whether such payment of principal of and any premium or interest on the
Securities of that series shall be made to Holders of Securities of that series
who are United States Aliens without withholding for or on account of any tax,
assessment or other governmental charge described in the Securities of that
series. If any such withholding shall be required, then such Officers'
Certificate shall specify by country the amount, if any, required to be withheld
on such payments to such Holders of Securities and the Company will pay to such
Paying Agent the Additional Amounts required by this Section. The Company
covenants to indemnify the Trustee and any Paying Agent for and to hold them
harmless against any loss, liability or expense reasonably incurred without
negligence or bad faith on their part arising out of or in connection with
actions taken or omitted by any of them in reliance on any Officers' Certificate
furnished pursuant to this Section 4.07.
ARTICLE V
SUCCESSORS
SECTION 5.01 Limitations on Mergers and Consolidations.
The Company shall not, in any transaction or series of transactions,
consolidate with or merge into any Person, or sell, lease, convey, transfer or
otherwise dispose of all or substantially all of its assets to any Person,
unless:
(1) either (a) the Company shall be the continuing corporation or (b)
the Person (if other than the Company) formed by such consolidation or into
which the Company is merged, or to which such sale, lease, conveyance,
transfer or other disposition shall be made (collectively, the
"Successor"), is organized and validly existing under the laws of the
United States, any political subdivision thereof or any State thereof or
the District of Columbia, and expressly assumes by supplemental indenture
the due and punctual payment of the principal of (and premium, if any) and
interest on and Additional Amounts with respect to all the Securities and
the performance of the Company's covenants and obligations under this
Indenture and the Securities;
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(2) immediately after giving effect to such transaction or series of
transactions, no Default or Event of Default shall have occurred and be
continuing or would result therefrom; and
(3) the Company delivers to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that the transaction and such
supplemental indenture comply with this Indenture.
SECTION 5.02 Successor Person Substituted.
Upon any consolidation or merger of the Company or any sale, lease,
conveyance, transfer or other disposition of all or substantially all of the
assets of the Company in accordance with Section 5.01, the Successor formed by
such consolidation or into or with which the Company is merged or to which such
sale, lease, conveyance, transfer or other disposition is made shall succeed to,
and be substituted for, and may exercise every right and power of the Company
under this Indenture and the Securities with the same effect as if such
Successor had been named as the Company herein and the predecessor Company, in
the case of a sale, conveyance, transfer or other disposition, shall be released
from all obligations under this Indenture and the Securities.
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.01 Events of Default.
Unless either inapplicable to a particular series or specifically
deleted or modified in or pursuant to the supplemental indenture or Board
Resolution establishing such series of Securities or in the form of Security for
such series, an "Event of Default," wherever used herein with respect to
Securities of any series, occurs if:
(1) the Company defaults in the payment of interest on or any
Additional Amounts with respect to any Security of that series when the
same becomes due and payable and such default continues for a period of 30
days;
(2) the Company defaults in the payment of (A) the principal of
any Security of that series at its Maturity or (B) premium (if any) on any
Security of that series when the same becomes due and payable;
(3) the Company defaults in the deposit of any sinking fund
payment, when and as due by the terms of a Security of that series, and
such default continues for a period of 30 days;
(4) the Company fails to comply with any of its other covenants
or agreements in, or provisions of, the Securities of such series or this
Indenture (other than an agreement, covenant or provision that has
expressly been included in this Indenture solely for the benefit of one or
more series of Securities other than that series) which shall not have
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been remedied within the specified period after written notice, as
specified in the last paragraph of this Section 6.01;
(5) the Company pursuant to or within the meaning of any
Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it in an
involuntary case,
(C) consents to the appointment of a Bankruptcy Custodian of it
or for all or substantially all of its property, or
(D) makes a general assignment for the benefit of its creditors;
(6) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that remains unstayed and in effect for 90 days
and that:
(A) is for relief against the Company as debtor in an involuntary
case,
(B) appoints a Bankruptcy Custodian of the Company or a
Bankruptcy Custodian for all or substantially all of the property of
the Company, or
(C) orders the liquidation of the Company; or
(7) any other Event of Default provided with respect to
Securities of that series occurs.
The term "Bankruptcy Custodian" means any receiver, trustee, assignee,
liquidator or similar official under any Bankruptcy Law.
The Trustee shall not be deemed to know or have notice of a Default
unless a Trust Officer at the Corporate Trust Office of the Trustee receives
written notice at the Corporate Trust Office of the Trustee of such Default with
specific reference to such Default.
When a Default is cured, it ceases.
Notwithstanding the foregoing provisions of this Section 6.01, if the
principal of, premium or interest on or Additional Amounts with respect to any
Security is payable in a currency or currencies (including a composite currency)
other than Dollars and such currency or currencies are not available to the
Company for making payment thereof due to the imposition of exchange controls or
other circumstances beyond the control of the Company (a "Conversion Event"),
the Company will be entitled to satisfy its obligations to Holders of the
Securities by making such payment in Dollars in an amount equal to the Dollar
equivalent of the amount payable in such other
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currency, as determined by the Company by reference to the Exchange Rate on the
date of such payment, or, if such rate is not then available, on the basis of
the most recently available Exchange Rate. Notwithstanding the foregoing
provisions of this Section 6.01, any payment made under such circumstances in
Dollars where the required payment is in a currency other than Dollars will not
constitute an Event of Default under this Indenture.
Promptly after the occurrence of a Conversion Event, the Company shall
give written notice thereof in the manner provided in Section 11.02 to the
Holders. Promptly after the making of any payment in Dollars as a result of a
Conversion Event, the Company shall give notice in the manner provided in
Section 11.02 to the Holders, setting forth the applicable Exchange Rate and
describing the calculation of such payments.
A Default under clause (4) or (7) of this Section 6.01 is not an Event
of Default until the Trustee notifies the Company, or the Holders of at least
25% in principal amount of the then outstanding Securities of the series
affected by such Default (or, in the case of a Default under clause (4) of this
Section 6.01, if outstanding Securities of other series are affected by such
Default, then at least 25% in principal amount of the then outstanding
Securities so affected) notify the Company and the Trustee, of the Default, and
the Company fails to cure the Default within 90 days after receipt of the
notice. The notice must specify the Default, demand that it be remedied and
state that the notice is a "Notice of Default."
SECTION 6.02 Acceleration.
If an Event of Default with respect to any Securities of any series at
the time outstanding (other than an Event of Default specified in clause (5) or
(6) of Section 6.01) occurs and is continuing, the Trustee by notice to the
Company, or the Holders of at least 25% in principal amount of the then
outstanding Securities of the series affected by such default (or, in the case
of an Event of Default described in clause (4) of Section 6.01, if outstanding
Securities of other series are affected by such Default, then at least 25% in
principal amount of the then outstanding Securities so affected) by notice to
the Company and the Trustee, may declare the principal of (or, if any such
Securities are Original Issue Discount Securities, such portion of the principal
amount as may be specified in the terms of that series) and accrued and unpaid
interest on all then outstanding Securities of such series or of all series, as
the case may be, to be due and payable. Upon any such declaration the amounts
due and payable on the Securities shall be due and payable immediately. If an
Event of Default specified in clause (5) or (6) of Section 6.01 hereof occurs,
such amounts shall ipso facto become and be immediately due and payable without
any declaration, notice or other act on the part of the Trustee or any Holder.
The Holders of a majority in principal amount of the then outstanding Securities
of the series affected by such default or all series, as the case may be, by
written notice to the Trustee may rescind an acceleration and its consequences
(other than nonpayment of principal of or premium or interest on or any
Additional Amounts with respect to the Securities) if the rescission would not
conflict with any judgment or decree and if all existing Events of Default with
respect to Securities of that series (or of all series, as the case may be) have
been cured or waived, except nonpayment of principal, premium, interest or any
Additional Amounts that has become due solely because of the acceleration.
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SECTION 6.03 Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy to collect the payment of principal of, or premium,
if any, or interest on the Securities or to enforce the performance of any
provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder in exercising any right or remedy accruing
upon an Event of Default shall not impair the right or remedy or constitute a
waiver of or acquiescence in the Event of Default. All remedies are cumulative
to the extent permitted by law.
SECTION 6.04 Waiver of Existing Defaults.
Subject to Sections 6.07 and 9.02, the Holders of a majority in
principal amount of the then outstanding Securities of any series or of all
series (acting as one class) by notice to the Trustee may waive an existing or
past Default or Event of Default with respect to such series or all series, as
the case may be, and its consequences (including waivers obtained in connection
with a tender offer or exchange offer for Securities of such series or all
series or a solicitation of consents in respect of Securities of such series or
all series, provided that in each case such offer or solicitation is made to all
Holders of then outstanding Securities of such series or all series (but the
terms of such offer or solicitation may vary from series to series)), except (1)
a continuing Default or Event of Default in the payment of the principal of, or
premium, if any, or interest on or any Additional Amounts with respect to any
Security or (2) a continued Default in respect of a provision that under Section
9.02 cannot be amended or supplemented without the consent of each Holder
affected. Upon any such waiver, such Default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereon.
SECTION 6.05 Control by Majority.
With respect to Securities of any series, the Holders of a majority in
principal amount of the then outstanding Securities of such series may direct in
writing the time, method and place of conducting any proceeding for any remedy
available to the Trustee or exercising any trust or power conferred on it
relating to or arising under an Event of Default described in clause (1), (2),
(3) or (7) of Section 6.01, and with respect to all Securities, the Holders of a
majority in principal amount of all the then outstanding Securities affected may
direct in writing the time, method and place of conducting any proceeding for
any remedy available to the Trustee or exercising any trust or power conferred
on it not relating to or arising under such an Event of Default. However, the
Trustee may refuse to follow any direction that conflicts with applicable law or
this Indenture, that the Trustee determines may be unduly prejudicial to the
rights of other Holders, or that may involve the Trustee in personal liability;
provided, however, that (i) the Trustee may take any other action deemed proper
by the Trustee that is not inconsistent with such direction and (ii) the Trustee
shall have no obligation to make such a determination. Prior to taking any
action hereunder, the Trustee
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shall be entitled to indemnification satisfactory to it in its sole discretion
from Holders directing the Trustee against all losses and expenses caused by
taking or not taking such action.
SECTION 6.06 Limitations on Suits.
Subject to Section 6.07 hereof, a Holder of a Security of any series
may pursue a remedy with respect to this Indenture or the Securities of such
series only if:
(1) the Holder gives to the Trustee written notice of a continuing
Event of Default with respect to such series;
(2) the Holders of at least 25% in principal amount of the then
outstanding Securities of such series make a written request to the Trustee
to pursue the remedy;
(3) such Holder or Holders offer to the Trustee indemnity reasonably
satisfactory to the Trustee against any loss, liability or expense;
(4) the Trustee does not comply with respect to the request within 60
days after receipt of the notice and the offer of indemnity; and
(5) during such 60-day period the Holders of a majority in principal
amount of the Securities of that series do not give the Trustee a direction
inconsistent with the request.
A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over another Holder.
SECTION 6.07 Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of
any Holder of a Security to receive payment of principal of and premium, if any,
interest on and any Additional Amounts with respect to the Security, on or after
the respective due dates expressed in the Security, or to bring suit for the
enforcement of any such payment on or after such respective dates, is absolute
and unconditional and shall not be impaired or affected without the consent of
the Holder.
SECTION 6.08 Collection Suit by Trustee.
If an Event of Default specified in clause (1) or (2) of Section 6.01
hereof occurs and is continuing, the Trustee is authorized to recover judgment
in its own name and as trustee of an express trust against the Company for the
amount of principal, premium (if any), interest and any Additional Amounts
remaining unpaid on the Securities of the series affected by the Event of
Default, and interest on overdue principal and premium, if any, and, to the
extent lawful, interest on overdue interest, and such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
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SECTION 6.09 Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and other
papers or documents and to take such actions, including participating as a
member, voting or otherwise, of any committee of creditors, as may be necessary
or advisable to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel) and the Holders allowed in any judicial proceedings
relative to the Company or its creditors or properties and shall be entitled and
empowered to collect, receive and distribute any money or other property payable
or deliverable on any such claims and any Bankruptcy Custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07. To the extent that the payment of any such compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.07 out of the estate in any such
proceeding, shall be denied for any reason, payment of the same shall be secured
by a lien on, and shall be paid out of, any and all distributions, dividends,
money, securities and other properties which the Holders of the Securities may
be entitled to receive in such proceeding whether in liquidation or under any
plan of reorganization or arrangement or otherwise. Nothing herein contained
shall be deemed to authorize the Trustee to authorize or consent to or accept or
adopt on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Securities or the rights of any Holder
thereof, or to authorize the Trustee to vote in respect of the claim of any
Holder in any such proceeding.
SECTION 6.10 Priorities.
If the Trustee collects any money pursuant to this Article VI, subject
to Article X, it shall pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: to Holders for amounts due and unpaid on the Securities in
respect of which or for the benefit of which such money has been collected,
for principal, premium (if any), interest and any Additional Amounts
ratably, without preference or priority of any kind, according to the
amounts due and payable on such Securities for principal, premium (if any),
interest and any Additional Amounts, respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee, upon prior written notice to the Company, may fix record
dates and payment dates for any payment to Holders pursuant to this Article VI.
To the fullest extent allowed under applicable law, if for the purpose
of obtaining a judgment against the Company in any court it is necessary to
convert the sum due in respect of the
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principal of, premium (if any) or interest on or Additional Amounts with respect
to the Securities of any series (the "Required Currency") into a currency in
which a judgment will be rendered (the "Judgment Currency"), the rate of
exchange used shall be the rate at which in accordance with normal banking
procedures the Trustee could purchase in The City of New York the Required
Currency with the Judgment Currency on the New York Business Day next preceding
that on which final judgment is given. Neither the Company nor the Trustee shall
be liable for any shortfall nor shall it benefit from any windfall in payments
to Holders of Securities under this Section 6.10 caused by a change in exchange
rates between the time the amount of a judgment against it is calculated as
above and the time the Trustee converts the Judgment Currency into the Required
Currency to make payments under this Section to Holders of Securities, but
payment of such judgment shall discharge all amounts owed by the Company on the
claim or claims underlying such judgment.
SECTION 6.11 Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 6.07, or a suit by a Holder or Holders of more than 10% in
principal amount of the then outstanding Securities of any series.
ARTICLE VII
TRUSTEE
SECTION 7.01 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in such exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default with respect
to the Securities of any series:
(1) the Trustee need perform only those duties that are specifically
set forth in this Indenture and no others, unless expressly provided
herein, the Trustee shall not be responsible for tax filings, other filings
or reports, and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this
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Indenture. However, the Trustee shall examine such certificates and
opinions to determine whether, on their face, they appear to conform to the
requirements of this Indenture.
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(1) this paragraph does not limit the effect of Section 7.01(b);
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to the
provisions of this Section 7.01.
(e) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or incur any liability. The Trustee may refuse to perform
any duty or exercise any right or power unless it receives indemnity reasonably
satisfactory to it against any loss, liability or expense.
(f) The Trustee shall not be liable for interest on or loss on
investments in connection with any money received by it except as the Trustee
may agree in writing with the Company. Money held in trust by the Trustee need
not be segregated from other funds except to the extent required by law. All
money received by the Trustee shall, until applied as herein provided, be held
in trust for the payment of the principal of, premium (if any) and interest on
and Additional Amounts with respect to the Securities.
SECTION 7.02 Rights of Trustee.
(a) The Trustee may rely on any document believed by it to be genuine
and to have been signed or presented by the proper Person. The Trustee need not
investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require
instruction, an Officers' Certificate or an Opinion of Counsel or both to be
provided. The Trustee shall not be liable for any action it takes or omits to
take in good faith in reliance on such instruction, Officers' Certificate or
Opinion of Counsel. The Trustee may consult at the Company's expense with
counsel and the written advice of such counsel or any Opinion of Counsel shall
be full and complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and in reliance
thereon.
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(c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
SECTION 7.03 May Hold Securities.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company or any of
its Affiliates with the same rights it would have if it were not Trustee.
However, in the event that the Trustee acquires any conflicting interest (within
the meaning of TIA (S) 310(b)), it must eliminate such conflict within 90 days,
apply to the SEC for permission to continue as trustee or resign. Any Agent may
do the same with like rights and duties. However, the Trustee is subject to
Sections 7.10 and 7.11.
SECTION 7.04 Trustee's Disclaimer.
The Trustee makes no representation as to the validity or adequacy of
this Indenture or the Securities, it shall not be accountable for the Company's
use of the proceeds from the Securities or any money paid to the Company or upon
the Company's direction under any provision hereof, it shall not be responsible
for the use or application of any money received by any Paying Agent other than
the Trustee and it shall not be responsible for any statement or recital herein
or any statement in the Securities other than its certificate of authentication.
SECTION 7.05 Notice of Defaults.
If a Default or Event of Default with respect to the Securities of any
series occurs and is continuing and it is actually known to the Trustee, the
Trustee shall mail to Holders of Securities of such series a notice of the
Default or Event of Default within 90 days after it occurs. Except in the case
of a Default or Event of Default in payment of principal of, premium (if any)
and interest on and Additional Amounts or any sinking fund installment with
respect to the Securities of such series, the Trustee may withhold the notice if
and so long as a committee of its Trust Officers in good faith determines that
withholding the notice is in the interests of Holders of Securities of such
series.
SECTION 7.06 Reports by Trustee to Holders.
Within 60 days after each May 15 of each year after the execution of
this Indenture, the Trustee shall mail to Holders of a series and the Company a
brief report dated as of such reporting date that complies with TIA (S) 313(a);
provided, however, that if no event described in TIA (S) 313(a) has occurred
within the twelve months preceding the reporting date with respect to a series,
no report
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need be transmitted to Holders of such series. The Trustee also shall comply
with TIA (S) 313(b). The Trustee shall also transmit by mail all reports if and
as required by TIA (S)(S) 313(c) and 313(d).
A copy of each report shall be filed by the Company with the SEC and
each securities exchange, if any, on which the Securities of such series are
listed. The Company shall notify the Trustee if and when any series of
Securities is listed on any stock exchange.
SECTION 7.07 Compensation and Indemnity.
The Company agrees to pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services hereunder. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company agrees to reimburse the Trustee upon
request for all reasonable disbursements, advances and expenses incurred by it.
Such expenses shall include the reasonable compensation, disbursements and
expenses of the Trustee's agents and counsel.
The Company hereby indemnifies the Trustee against any loss, liability
or expense incurred by it arising out of or in connection with the acceptance or
administration of its duties under this Indenture, except as set forth in the
next paragraph. The Trustee shall notify the Company promptly of any claim for
which it may seek indemnity. The Company shall defend the claim and the Trustee
shall cooperate in the defense. The Trustee may have separate counsel and the
Company shall pay the reasonable fees and expenses of such counsel. The Company
need not pay for any settlement made without its consent.
The Company shall not be obligated to reimburse any expense or
indemnify against any loss or liability incurred by the Trustee through
negligence or bad faith.
To secure the payment obligations of the Company in this Section 7.07,
the Trustee shall have a lien prior to the Securities on all money or property
held or collected by the Trustee, except that held in trust to pay principal of,
premium (if any) and interest on and any Additional Amounts with respect to
Securities of series. Such lien and the indemnity obligation under this Section
7.07 shall survive the satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(5) or (6) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
SECTION 7.08 Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section 7.08.
The Trustee may resign and be discharged at any time with respect to
the Securities of one or more series by so notifying the Company. The Holders
of a majority in principal amount
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of the then outstanding Securities of any series may remove the Trustee with
respect to the Securities of such series by so notifying the Trustee and the
Company. The Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or an insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;
(3) a Bankruptcy Custodian or public officer takes charge of the
Trustee or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, with respect to the Securities of one or more
series, the Company shall promptly appoint a successor Trustee or Trustees with
respect to the Securities of that or those series (it being understood that any
such successor Trustee may be appointed with respect to the Securities of one or
more or all of such series and that at any time there shall be only one Trustee
with respect to the Securities of any particular series). Within one year after
the successor Trustee with respect to the Securities of any series takes office,
the Holders of a majority in principal amount of the Securities of such series
may appoint a successor Trustee to replace the successor Trustee appointed by
the Company.
If a successor Trustee with respect to the Securities of any series
does not take office within 30 days after the retiring Trustee resigns or is
removed, the retiring Trustee, the Company or the Holders of at least 10% in
principal amount of the then outstanding Securities of such series may petition
any court of competent jurisdiction for the appointment of a successor Trustee
with respect to the Securities of such series.
If the Trustee with respect to the Securities of a series fails to
comply with Section 7.10, any Holder of Securities of such series may petition
any court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee with respect to the Securities of such
series.
In case of the appointment of a successor Trustee with respect to all
Securities, each such successor Trustee shall deliver a written acceptance of
its appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the retiring
Trustee under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 7.07.
In case of the appointment of a successor Trustee with respect to the
Securities of one or more (but not all) series, the Company, the retiring
Trustee and each successor Trustee with
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respect to the Securities of one or more (but not all) series shall execute and
deliver an indenture supplemental hereto in which each successor Trustee shall
accept such appointment and that (1) shall confer to each successor Trustee all
the rights, powers and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates, (2) if the retiring Trustee is not retiring with respect to all
Securities, shall confirm that all the rights, powers and duties of the retiring
Trustee with respect to the Securities of that or those series as to which the
retiring Trustee is not retiring shall continue to be vested in the retiring
Trustee and (3) shall add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the administration of the
trusts hereunder by more than one Trustee. Nothing herein or in such
supplemental indenture shall constitute such Trustees co-trustees of the same
trust, and each such Trustee shall be trustee of a trust or trusts hereunder
separate and apart from any trust or trusts hereunder administered by any other
such Trustee. Upon the execution and delivery of such supplemental indenture,
the resignation or removal of the retiring Trustee shall become effective to the
extent provided therein and each such successor Trustee shall have all the
rights, powers and duties of the retiring Trustee with respect to the Securities
of that or those series to which the appointment of such successor Trustee
relates. On request of the Company or any successor Trustee, such retiring
Trustee shall transfer to such successor Trustee all property held by such
retiring Trustee as Trustee with respect to the Securities of that or those
series to which the appointment of such successor Trustee relates.
Notwithstanding replacement of the Trustee or Trustees pursuant to
this Section 7.08, the obligations of the Company under Section 7.07 shall
continue for the benefit of the retiring Trustee or Trustees.
SECTION 7.09 Successor Trustee by Merger, etc.
Subject to Section 7.10, if the Trustee consolidates, merges or
converts into, or transfers all or substantially all of its corporate trust
business to, another corporation, the successor corporation without any further
act shall be the successor Trustee; provided, however, that in the case of a
transfer of all or substantially all of its corporate trust business to another
corporation, the transferee corporation expressly assumes all of the Trustee's
liabilities hereunder.
In case any Securities shall have been authenticated, but not
delivered, by the Trustee then in office, any successor by merger, conversion or
consolidation to such authenticating Trustee may adopt such authentication and
deliver the Securities so authenticated; and in case at that time any of the
Securities shall not have been authenticated, any successor to the Trustee may
authenticate such Securities either in the name of any predecessor hereunder or
in the name of the successor to the Trustee; and in all such cases such
certificates shall have the full force which it is anywhere in the Securities or
in this Indenture provided that the certificate of the Trustee shall have.
SECTION 7.10 Eligibility; Disqualification.
There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the laws of the United States,
any State thereof or the District of Columbia and authorized under such laws to
exercise corporate trust power, shall be subject to supervision or
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examination by Federal or State (or the District of Columbia) authority and
shall have, or be a Subsidiary of a bank or bank holding company having, a
combined capital and surplus of at least $50 million as set forth in its most
recent published annual report of condition.
The Indenture shall always have a Trustee who satisfies the
requirements of TIA (S)(S) 310(a)(1), 310(a)(2) and 310(a)(5). The Trustee is
subject to and shall comply with the provisions of TIA (S) 310(b) during the
period of time required by this Indenture.
SECTION 7.11 Preferential Collection of Claims Against Company.
The Trustee is subject to and shall comply with the provisions of TIA
(S) 311(a), excluding any creditor relationship listed in TIA (S) 311(b). A
Trustee who has resigned or been removed shall be subject to TIA (S) 311(a) to
the extent indicated therein.
ARTICLE VII
DISCHARGE OF INDENTURE
SECTION 8.01 Termination of Company's Obligations.
(a) This Indenture shall cease to be of further effect with respect to
the Securities of a series (except that the Company's obligations under Section
7.07, the Trustee's and Paying Agent's obligations under Section 8.03 and the
rights, powers, protections and privileges accorded the Trustee under Article
VII shall survive), and the Trustee, on demand of the Company, shall execute
proper instruments acknowledging the satisfaction and discharge of this
Indenture with respect to the Securities of such series, when:
(1) either
(A) all outstanding Securities of such series theretofore
authenticated and issued (other than destroyed, lost or stolen
Securities that have been replaced or paid) have been delivered to the
Trustee for cancellation; or
(B) all outstanding Securities of such series not theretofore
delivered to the Trustee for cancellation:
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity
within one year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving
of notice of redemption by the Trustee in the name, and
at the expense, of the Company,
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and, in the case of clause (i), (ii) or (iii) above, the Company has
irrevocably deposited or caused to be deposited with the Trustee as
funds (immediately available to the Holders in the case of clause (i))
in trust for such purpose (x) cash in an amount, or (y) U.S.
Government Obligations, maturing as to principal and interest at such
times and in such amounts as will insure the availability of cash in
an amount or (z) a combination thereof, which will be sufficient, in
the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to
the Trustee, to pay and discharge the entire indebtedness on the
Securities of such series for principal and interest to the date of
such deposit (in the case of Securities which have become due and
payable) or for principal, premium, if any, and interest to the
Stated Maturity or Redemption Date, as the case may be; or
(C) the Company has properly fulfilled such other means of
satisfaction and discharge as is specified, as contemplated by Section
2.01, to be applicable to the Securities of such series;
(2) the Company has paid or caused to be paid all other sums payable
by it hereunder with respect to the Securities of such series; and
(3) the Company has delivered to the Trustee an Officers' Certificate
stating that all conditions precedent to satisfaction and discharge of this
Indenture with respect to the Securities of such series have been complied
with, together with an Opinion of Counsel to the same effect.
(b) Unless this Section 8.01(b) is specified as not being applicable
to Securities of a series as contemplated by Section 2.01, the Company may
terminate certain of its obligations under this Indenture ("covenant
defeasance") with respect to the Securities of a series if:
(1) the Company has irrevocably deposited or caused to be irrevocably
deposited with the Trustee as trust funds in trust for the purpose of
making the following payments, specifically pledged as security for and
dedicated solely to the benefit of the Holders of Securities of such
series, (i) money in the currency in which payment of the Securities of
such series is to be made in an amount, or (ii) Government Obligations with
respect to such series, maturing as to principal and interest at such times
and in such amounts as will insure the availability of money in the
currency in which payment of the Securities of such series is to be made in
an amount or (iii) a combination thereof, that is sufficient, in the
opinion (in the case of (ii) and (iii)) of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, to pay, without consideration of the reinvestment
of any such amounts and after payment of all taxes or other charges or
assessments in respect thereof payable by the Trustee, the principal of and
premium (if any) and interest on Securities of such series on each date
that such principal, premium (if any) or interest is due and payable and
(at the Stated Maturity thereof or upon redemption as provided in Section
8.01(e)) to pay all other sums payable by it hereunder; provided that the
Trustee shall have been irrevocably instructed to apply such money and/or
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the proceeds of such U.S. Government Obligations to the payment of said
principal, premium (if any) and interest with respect to the Securities of
such series as the same shall become due;
(2) the Company has delivered to the Trustee an Officers' Certificate
stating that all conditions precedent to satisfaction and discharge of this
Indenture with respect to the Securities of such series have been complied
with, and an Opinion of Counsel to the same effect;
(3) no Default or Event of Default with respect to the Securities of
such series shall have occurred and be continuing on the date of such
deposit;
(4) the Company shall have delivered to the Trustee an Opinion of
Counsel from a nationally recognized counsel acceptable to the Trustee or a
tax ruling to the effect that the Holders will not recognize income, gain
or loss for Federal income tax purposes as a result of the Company's
exercise of its option under this Section 8.01(b) and will be subject to
Federal income tax on the same amount and in the same manner and at the
same times as would have been the case if such option had not been
exercised;
(5) the Company has complied with any additional conditions specified
pursuant to Section 2.01 to be applicable to the discharge of Securities of
such series pursuant to this Section 8.01; and
(6) such deposit and discharge shall not cause the Trustee to have a
conflicting interest as defined in TIA (S) 310(b).
In such event, this Indenture shall cease to be of further effect
(except as set forth in this paragraph), and the Trustee, on demand of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge under this Indenture. However, the Company's obligations in Sections
2.05, 2.06, 2.07, 2.08, 2.09, 4.01, 4.02, 5.01, 7.07, 7.08 and 8.04, the
Trustee's and Paying Agent's obligations in Section 8.03 and the rights, powers,
protections and privileges accorded the Trustee under Article VII shall survive
until all Securities of such series are no longer outstanding. Thereafter, only
the Company's obligations in Section 7.07 and the Trustee's and Paying Agent's
obligations in Section 8.03 shall survive with respect to Securities of such
series.
After such irrevocable deposit made pursuant to this Section 8.01(b)
and satisfaction of the other conditions set forth herein, the Trustee upon
request shall acknowledge in writing the discharge of the Company's obligations
under this Indenture with respect to the Securities of such series except for
those surviving obligations specified above.
In order to have money available on a payment date to pay principal of
or premium (if any) or interest on the Securities, the Government Obligations
shall be payable as to principal or interest on or before such payment date in
such amounts as will provide the necessary money. Government Obligations shall
not be callable at the issuer's option.
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(c) If the Company has previously complied or is concurrently
complying with Section 8.01(b) (other than any additional conditions specified
pursuant to Section 2.01 that are expressly applicable only to covenant
defeasance) with respect to Securities of a series, then, unless this Section
8.01(c) is specified as not being applicable to Securities of such series as
contemplated by Section 2.01, the Company may elect to be discharged ("legal
defeasance") from its obligations to make payments with respect to Securities of
such series, if:
(1) no Default or Event of Default under clauses (5) and (6) of
Section 6.01 hereof shall have occurred at any time during the period
ending on the 91st day after the date of deposit contemplated by Section
8.01(b) (it being understood that this condition shall not be deemed
satisfied until the expiration of such period);
(2) unless otherwise specified with respect to Securities of such
series as contemplated by Section 2.01, the Company has delivered to the
Trustee an Opinion of Counsel from a nationally recognized counsel
acceptable to the Trustee to the effect referred to in Section 8.01(b)(4)
with respect to such legal defeasance, which opinion is based on (i) a
private ruling of the Internal Revenue Service addressed to the Company,
(ii) a published ruling of the Internal Revenue Service or (iii) a change
in the applicable federal income tax law (including regulations) after the
date of this Indenture;
(3) the Company has complied with any other conditions specified
pursuant to Section 2.01 to be applicable to the legal defeasance of
Securities of such series pursuant to this Section 8.01(c); and
(4) the Company has delivered to the Trustee a Company Request
requesting such legal defeasance of the Securities of such series and an
Officers' Certificate stating that all conditions precedent to with respect
to such legal defeasance of the Securities of such series have been
complied with, together with an Opinion of Counsel to the same effect.
In such event, the Company will be discharged from its obligations
under this Indenture and the Securities of such series to pay principal of,
premium (if any) and interest on, and Additional Amounts with respect to,
Securities of such series, the Company's obligations under Sections 4.01, 4.02
and 5.01 shall terminate with respect to such Securities, and the entire
indebtedness of the Company evidenced by such Securities shall be deemed paid
and discharged.
(d) If and to the extent additional or alternative means of
satisfaction, discharge or defeasance of Securities of a series are specified to
be applicable to such series as contemplated by Section 2.01, the Company may
terminate any or all of its obligations under this Indenture with respect to
Securities of a series and any or all of its obligations under the Securities of
such series if it fulfills such other means of satisfaction and discharge as may
be so specified, as contemplated by Section 2.01, to be applicable to the
Securities of such series.
(e) If Securities of any series subject to subsections (a), (b), (c)
or (d) of this Section 8.01 are to be redeemed prior to their Stated Maturity,
whether pursuant to any optional redemption provisions or in accordance with any
mandatory or optional sinking fund provisions, the
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terms of the applicable trust arrangement shall provide for such redemption, and
the Company shall make such arrangements as are reasonably satisfactory to the
Trustee for the giving of notice of redemption by the Trustee in the name, and
at the expense, of the Company.
SECTION 8.02 Application of Trust Money.
The Trustee or a trustee satisfactory to the Trustee and the Company
shall hold in trust money or U.S. Government Obligations deposited with it
pursuant to Section 8.01 hereof. It shall apply the deposited money and the
money from U.S. Government Obligations through the Paying Agent and in
accordance with this Indenture to the payment of principal of, premium (if any)
and interest on and any Additional Amounts with respect to the Securities of the
series with respect to which the deposit was made. Money and securities held in
trust are not subject to Article X.
SECTION 8.03 Repayment to Company.
The Trustee and the Paying Agent shall promptly pay to the Company
upon written request any excess money or U.S. Government Obligations (or
proceeds therefrom) held by them at any time upon the written request of the
Company.
Subject to the requirements of any applicable abandoned property laws,
the Trustee and the Paying Agent shall pay to the Company upon written request
any money held by them for the payment of principal, premium (if any), interest
or any Additional Amounts that remains unclaimed for two years after the date
upon which such payment shall have become due. After payment to the Company,
Holders entitled to the money must look to the Company for payment as general
creditors unless an applicable abandoned property law designates another Person,
and all liability of the Trustee and the Paying Agent with respect to such money
shall cease.
SECTION 8.04 Reinstatement.
If the Trustee or the Paying Agent is unable to apply any money or
U.S. Government Obligations deposited with respect to Securities of any series
in accordance with Section 8.01 by reason of any legal proceeding or by reason
of any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, the obligations of the
Company under this Indenture with respect to the Securities of such series and
under the Securities of such series shall be revived and reinstated as though no
deposit had occurred pursuant to Section 8.01 hereof until such time as the
Trustee or the Paying Agent is permitted to apply all such money or U.S.
Government Obligations in accordance with Section 8.01; provided, however, that
if the Company has made any payment of principal of, premium (if any) or
interest on or any Additional Amounts with respect to any Securities because of
the reinstatement of its obligations, the Company shall be subrogated to the
rights of the Holders of such Securities to receive such payment from the money
or U.S. Government Obligations held by the Trustee or the Paying Agent.
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ARTICLE IX
SUPPLEMENTAL INDENTURES AND AMENDMENTS
SECTION 9.01 Without Consent of Holders.
The Company and the Trustee may amend or supplement this Indenture or
the Securities or waive any provision hereof or thereof without the consent of
any Holder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Section 5.01;
(3) to provide for uncertificated Securities in addition to or in
place of certificated Securities, or to provide for the issuance of bearer
Securities (with or without coupons);
(4) to provide any security for any series of Securities or to add
guarantees of any series of Securities;
(5) to comply with any requirement in order to effect or maintain the
qualification of this Indenture under the TIA;
(6) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Securities (and if such covenants are to be
for the benefit of less than all series of Securities, stating that such
covenants are expressly being included solely for the benefit of such
series), or to surrender any right or power herein conferred upon the
Company;
(7) to add any additional Events of Default with respect to all or any
series of the Securities (and, if such Event of Default is applicable to
less than all series of Securities, specifying the series to which such
Event of Default is applicable);
(8) to change or eliminate any of the provisions of this Indenture;
provided that any such change or elimination shall become effective only
when there is no outstanding Security of any series created prior to the
execution of such amendment or supplemental indenture that is adversely
affected in any material respect by such change in or elimination of such
provision;
(9) to establish the form or terms of Securities of any series as
permitted by Section 2.01;
(10) to supplement any of the provisions of this Indenture to such
extent as shall be necessary to permit or facilitate the defeasance and
discharge of any series of Securities pursuant to Section 8.01; provided,
however, that any such action shall not adversely affect the interest of
the Holders of Securities of such series or any other series of Securities
in any material respect; or
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(11) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or
more series and to add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the administration of
the trusts hereunder by more than one Trustee, pursuant to the requirements
of Section 7.08.
Upon the request of the Company, accompanied by a Board Resolution,
and upon receipt by the Trustee of the documents described in Section 9.06, the
Trustee shall join with the Company in the execution of any supplemental
indenture authorized or permitted by the terms of this Indenture and make any
further appropriate agreements and stipulations that may be therein contained.
SECTION 9.02 With Consent of Holders.
Except as provided below in this Section 9.02, the Company and the
Trustee may amend or supplement this Indenture with the written consent
(including consents obtained in connection with a tender offer or exchange offer
for Securities of any one or more series or all series or a solicitation of
consents in respect of Securities of any one or more series or all series,
provided that in each case such offer or solicitation is made to all Holders of
then outstanding Securities of each such series (but the terms of such offer or
solicitation may vary from series to series)) of the Holders of at least a
majority in principal amount of the then outstanding Securities of all series
affected by such amendment or supplement (acting as one class).
Upon the request of the Company, accompanied by a Board Resolution,
and upon the filing with the Trustee of evidence of the consent of the Holders
as aforesaid, and upon receipt by the Trustee of the documents described in
Section 9.06, the Trustee shall join with the Company in the execution of such
amendment or supplemental indenture.
It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
The Holders of a majority in principal amount of the then outstanding
Securities of one or more series or of all series may waive compliance in a
particular instance by the Company with any provision of this Indenture with
respect to Securities of such series (including waivers obtained in connection
with a tender offer or exchange offer for Securities of such series or a
solicitation of consents in respect of Securities of such series, provided that
in each case such offer or solicitation is made to all Holders of then
outstanding Securities of such series (but the terms of such offer or
solicitation may vary from series to series)).
However, without the consent of each Holder affected, an amendment,
supplement or waiver under this Section 9.02 may not:
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(1) reduce the amount of Securities whose Holders must consent to an
amendment, supplement or waiver;
(2) reduce the rate of or change the time for payment of interest,
including default interest, on any Security;
(3) reduce the principal of or premium on, or change the Stated
Maturity of, any Security;
(4) reduce the premium, if any, payable upon the redemption of any
Security or change the time at which any Security may or shall be redeemed;
(5) change any obligation of the Company to pay Additional Amounts
with respect to any Security;
(6) change the coin or currency or currencies (including composite
currencies) in which any Security or any premium, interest or Additional
Amounts with respect thereto are payable;
(7) impair the right to institute suit for the enforcement of any
payment of principal of, premium (if any) or interest on or any Additional
Amounts with respect to any Security pursuant to Sections 6.07 and 6.08,
except as limited by Section 6.06;
(8) make any change in the percentage of principal amount of
Securities necessary to waive compliance with certain provisions of this
Indenture pursuant to Section 6.04 or 6.07 or make any change in this
sentence of Section 9.02;
(9) modify the provisions of this Indenture with respect to the
subordination of any Security in a manner adverse to the Holder thereof; or
(10) waive a continuing Default or Event of Default in the payment of
principal of, premium (if any) or interest on or Additional Amounts with
respect to the Securities.
An amendment under this Section may not make any change that adversely
affects the rights under Article X of any holder of an issue of Senior
Indebtedness unless the holders of the issue pursuant to its terms consent to
the change.
A supplemental indenture that changes or eliminates any covenant or
other provision of this Indenture which has expressly been included solely for
the benefit of one or more particular series of Securities, or which modifies
the rights of the Holders of Securities of such series with respect to such
covenant or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
The right of any Holder to participate in any consent required or
sought pursuant to any provision of this Indenture (and the obligation of the
Company to obtain any such consent otherwise required from such Holder) may be
subject to the requirement that such Holder shall have been the Holder of record
of any Securities with respect to which such consent is required or sought as of
a date identified by the Company in a notice furnished to Holders in accordance
with the terms of this Indenture.
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After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company shall mail to the Holders of each Security
affected thereby a notice briefly describing the amendment, supplement or
waiver. Any failure of the Company to mail such notice, or any defect therein,
shall not, however, in any way impair or affect the validity of any such
amendment, supplement or waiver.
SECTION 9.03 Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the Securities
shall comply in form and substance with the TIA as then in effect.
SECTION 9.04 Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder is a continuing consent by the Holder and every subsequent
Holder of a Security or portion of a Security that evidences the same debt as
the consenting Holder's Security, even if notation of the consent is not made on
any Security. However, any such Holder or subsequent Holder may revoke the
consent as to his or her Security or portion of a Security if the Trustee
receives written notice of revocation before the date the amendment, supplement
or waiver becomes effective. An amendment, supplement or waiver becomes
effective in accordance with its terms and thereafter binds every Holder.
The Company may, but shall not be obligated to, fix a record date
(which need not comply with Section 316(c) of the TIA) for the purpose of
determining the Holders entitled to consent to any amendment, supplement or
waiver or to take any other action under this Indenture. If a record date is
fixed, then notwithstanding the provisions of the immediately preceding
paragraph, those Persons who were Holders at such record date (or their duly
designated proxies), and only those Persons, shall be entitled to consent to
such amendment, supplement or waiver or to revoke any consent previously given,
whether or not such Persons continue to be Holders after such record date. No
consent shall be valid or effective for more than 90 days after such record date
unless consents from Holders of the principal amount of Securities required
hereunder for such amendment or waiver to be effective shall have also been
given and not revoked within such 90-day period.
After an amendment, supplement or waiver becomes effective, it shall
bind every Holder, unless it is of the type described in any of clauses (1)
through (9) of Section 9.02 hereof. In such case, the amendment, supplement or
waiver shall bind each Holder who has consented to it and every subsequent
Holder that evidences the same debt as the consenting Holder's Security.
SECTION 9.05 Notation on or Exchange of Securities.
If an amendment or supplement changes the terms of an outstanding
Security, the Company may require the Holder of the Security to deliver it to
the Trustee. The Trustee may place an appropriate notation on the Security at
the request of the Company regarding the changed terms and return it to the
Holder. Alternatively, if the Company so determines, the Company in exchange
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for the Security shall issue and the Trustee shall authenticate a new Security
that reflects the changed terms. Failure to make the appropriate notation or to
issue a new Security shall not affect the validity of such amendment or
supplement.
Securities of any series authenticated and delivered after the
execution of any amendment or supplement may, and shall if required by the
Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such amendment or supplement.
SECTION 9.06 Trustee to Sign Amendments, etc.
The Trustee shall sign any amendment or supplement authorized pursuant
to this Article if the amendment or supplement does not adversely affect the
rights, duties, liabilities or immunities of the Trustee. If it does, the
Trustee may, but need not, sign it. In signing or refusing to sign such
amendment or supplement, the Trustee shall be entitled to receive, and, subject
to Section 7.01 hereof, shall be fully protected in relying upon, an Opinion of
Counsel provided at the expense of the Company as conclusive evidence that such
amendment or supplement is authorized or permitted by this Indenture, that it is
not inconsistent herewith, and that it will be valid and binding upon the
Company in accordance with its terms.
ARTICLE X
SUBORDINATION
SECTION 10.01 Securities Subordinated to Senior Indebtedness.
The Company and each Holder of a Security, by his acceptance thereof,
agree that (a) the payment of the principal of, premium (if any) and interest on
and any Additional Amounts with respect to each and all the Securities and (b)
any other payment in respect of the Securities, including on account of the
acquisition or redemption of Securities by the Company, is subordinated, to the
extent and in the manner provided in this Article X, to the prior payment in
full of all Senior Indebtedness of the Company, whether outstanding at the date
of this Indenture or thereafter created, incurred, assumed or guaranteed, and
that these subordination provisions are for the benefit of the holders of Senior
Indebtedness.
This Article X shall constitute a continuing offer to all Persons who,
in reliance upon such provisions, become holders of, or continue to hold, Senior
Indebtedness, and such provisions are made for the benefit of the holders of
Senior Indebtedness, and such holders are made obligees hereunder and any one or
more of them may enforce such provisions.
SECTION 10.02 No Payment on Securities in Certain Circumstances.
(a) No payment shall be made by or on behalf of the Company on
account of the principal of, premium (if any) or interest on or any Additional
Amounts with respect to the Securities of any series or to acquire any of such
Securities (including any repurchases of such Securities pursuant to the
provisions thereof at the option of the Holder of such Securities) for cash or
property (other than Junior securities of the Company), or on account of any
redemption provisions of such
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Securities, in the event of default in payment of any principal of, premium (if
any) or interest on any Senior Indebtedness of the Company when the same becomes
due and payable, whether at maturity or at a date fixed for prepayment or by
declaration or otherwise (a "Payment Default"), unless and until such Payment
Default has been cured or waived or otherwise has ceased to exist.
(b) No payment shall be made by or on behalf of the Company on
account of the principal of, premium (if any) or interest on or any Additional
Amounts with respect to the Securities of any series or to acquire any of such
Securities (including any repurchases of such Securities pursuant to the
provisions thereof at the option of the Holder of such Securities) for cash or
property (other than Junior securities of the Company), or on account of the
redemption provisions of such Securities, in the event of any event of default
(other than a Payment Default) with respect to any Designated Senior
Indebtedness permitting the holders of such Designated Senior Indebtedness (or a
trustee or other representative on behalf of the holders thereof) to declare
such Designated Senior Indebtedness due and payable prior to the date on which
it would otherwise have become due and payable, upon written notice thereof to
the Company and the Trustee by any holders of Designated Senior Indebtedness (or
a trustee or other representative on behalf of the holders thereof) (the
"Payment Notice"), unless and until such event of default shall have been cured
or waived or otherwise has ceased to exist; provided, that such payments may not
be prevented pursuant to this Section 10.02(b) for more than 179 days after an
applicable Payment Notice has been received by the Trustee unless the Designated
Senior Indebtedness in respect of which such event of default exists has been
declared due and payable in its entirety, in which case no such payment may be
made until such acceleration has been rescinded or annulled or such Designated
Senior Indebtedness has been paid in full. No event of default that existed or
was continuing on the date of any Payment Notice (whether or not such event of
default is on the same issue of Designated Senior Indebtedness) may be made the
basis for the giving of a second Payment Notice, and only one such Payment
Notice may be given in any 365-day period.
(c) In furtherance of the provisions of Section 10.01, in the event
that, notwithstanding the foregoing provisions of this Section 10.02, any
payment or distribution of assets of the Company (other than Junior securities
of the Company) shall be received by the Trustee or the Holders of Securities of
any series at a time when such payment or distribution was prohibited by the
provisions of this Section 10.02, then, unless such payment or distribution is
no longer prohibited by this Section 10.02, such payment or distribution
(subject to the provisions of Section 10.07) shall be received and held in trust
by the Trustee or such Holder or Paying Agent for the benefit of the holders of
Senior Indebtedness of the Company, and shall be paid or delivered by the
Trustee or such Holders or such Paying Agent, as the case may be, to the holders
of Senior Indebtedness of the Company remaining unpaid or unprovided for or
their representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing such Senior Indebtedness
of the Company may have been issued, ratably, according to the aggregate amounts
remaining unpaid on account of such Senior Indebtedness of the Company held or
represented by each, for application to the payment of all Senior Indebtedness
in full after giving effect to all concurrent payments and distributions to or
for the holders of such Senior Indebtedness.
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SECTION 10.03 Securities Subordinated to Prior Payment of All Senior
Indebtedness on Dissolution, Liquidation or Reorganization.
Upon any distribution of assets of the Company or upon any
dissolution, winding up, total or partial liquidation or reorganization of the
Company, whether voluntary or involuntary, in bankruptcy, insolvency,
receivership or similar proceeding or upon assignment for the benefit of
creditors:
(a) the holders of all Senior Indebtedness of the Company shall first
be entitled to receive payments in full before the Holders of Securities of
any series are entitled to receive any payment on account of the principal
of, premium (if any) or interest on or any Additional Amounts with respect
to such Securities (other than Junior securities of the Company);
(b) any payment or distribution of assets of the Company of any kind
or character, whether in cash, property or securities (other than Junior
securities of the Company), to which the Holders of Securities of any
series or the Trustee on behalf of such Holders would be entitled, except
for the provisions of this Article X, shall be paid by the liquidating
trustee or agent or other Person making such a payment or distribution
directly to the holders of such Senior Indebtedness or their
representative, ratably according to the respective amounts of Senior
Indebtedness held or represented by each, to the extent necessary to make
payment in full of all such Senior Indebtedness remaining unpaid after
giving effect to all concurrent payments and distributions to the holders
of such Senior Indebtedness; and
(c) in the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in
cash, property or securities (other than Junior securities of the Company),
shall be received by the Trustee or the Holders of Securities of any series
or any Paying Agent (or, if the Company or any Affiliate of the Company is
acting as its own Paying Agent, money for any such payment or distribution
shall be segregated or held in trust) on account of the principal of,
premium (if any) or interest on or any Additional Amounts with respect to
the Securities of such series before all Senior Indebtedness of the Company
is paid in full, such payment or distribution (subject to the provisions of
Section 10.07) shall be received and held in trust by the Trustee or such
Holder or Paying Agent for the benefit of the holders of such Senior
Indebtedness, or their respective representatives, ratably according to the
respective amounts of such Senior Indebtedness held or represented by each,
to the extent necessary to make payment as provided herein of all such
Senior Indebtedness remaining unpaid after giving effect to all concurrent
payments and distributions and all provisions therefor to or for the
holders of such Senior Indebtedness, but only to the extent that as to any
holder of such Senior Indebtedness, as promptly as practical following
notice from the Trustee to the holders of such Senior Indebtedness that
such prohibited payment has been received by the Trustee, Holder(s) or
Paying Agent (or has been segregated as provided above), such holder (or a
representative therefor) notifies the Trustee of the amounts then due and
owing on such Senior Indebtedness, if any, held by such holder and only the
amounts specified in such notices to the Trustee shall be paid to the
holders of such Senior Indebtedness.
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SECTION 10.04 Subrogation to Rights of Holders of Senior Indebtedness.
Subject to the payment in full of all Senior Indebtedness of the
Company as provided herein, the Holders of the Securities shall be subrogated
(to the extent of the payments or distributions made to the holders of such
Senior Indebtedness pursuant to the provisions of this Article) to the rights of
the holders of such Senior Indebtedness to receive payments or distributions of
assets of the Company applicable to the Senior Indebtedness until all amounts
owing on the Securities shall be paid in full. For the purpose of such
subrogation, no such payments or distributions to the holders of such Senior
Indebtedness by the Company, or by or on behalf of the Holders of the Securities
by virtue of this Article X, which otherwise would have been made to such
Holders shall, as between the Company and such Holders, be deemed to be payment
by the Company or on account of such Senior Indebtedness, it being understood
that the provisions of this Article X are and are intended solely for the
purpose of defining the relative rights of the Holders of the Securities, on the
one hand, and the holders of such Senior Indebtedness, on the other hand.
If any payment or distribution to which the Holders of the Securities
would otherwise have been entitled but for the provisions of this Article X
shall have been applied, pursuant to the provisions of this Article X, to the
payment of amounts payable under Senior Indebtedness of the Company, then such
Holders shall be entitled to receive from the holders of such Senior
Indebtedness any payments or distributions received by such holders of Senior
Indebtedness in excess of the amount sufficient to pay all amounts payable under
or in respect of such Senior Indebtedness in full.
SECTION 10.05 Obligations of the Company Unconditional.
Nothing contained in this Article X or elsewhere in this Indenture or
in the Securities is intended to or shall impair, as between the Company and the
Holders of the Securities of any series, the obligation of the Company, which is
absolute and unconditional, to pay to such Holders the principal of, premium (if
any) and interest on and any Additional Amounts with respect to the Securities
of such series as and when the same shall become due and payable in accordance
with their terms, or is intended to or shall affect the relative rights of such
Holders and creditors of the Company other than the holders of the Senior
Indebtedness, nor shall anything herein or therein prevent the Trustee or any
Holder from exercising all remedies otherwise permitted by applicable law upon
default under this Indenture, subject to the rights, if any, under this Article
X, of the holders of Senior Indebtedness in respect of cash, property or
securities of the Company received upon the exercise of any such remedy.
Notwithstanding anything to the contrary in this Article X or elsewhere in this
Indenture or in the Securities, upon any distribution of assets of the Company
referred to in this Article X, the Trustee, subject to the provisions of
Sections 7.01 and 7.02, and the Holders of the Securities shall be entitled to
rely upon any order or decree made by any court of competent jurisdiction in
which such dissolution, winding up, liquidation or reorganization proceedings
are pending, or a certificate of the liquidating trustee or agent or other
Person making any distribution to the Trustee or to such Holders for the purpose
of ascertaining the Persons entitled to participate in such distribution, the
holders of the Senior Indebtedness and other Indebtedness of the Company, the
amount thereof or payable thereon, the amount or amounts paid or distributed
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thereon and all other facts pertinent thereto or to this Article X so long as
such court has been apprised of the provisions of, or the order, decree or
certificate makes reference to, the provisions of this Article X.
SECTION 10.06 Trustee Entitled to Assume Payments Not Prohibited in Absence of
Notice.
The Trustee shall not at any time be charged with knowledge of the
existence of any facts that would prohibit the making of any payment to or by
the Trustee unless and until a Responsible Officer of the Trustee or any Paying
Agent shall have received, no later than two Business Days prior to such
payment, written notice thereof from the Company or from one or more holders of
Senior Indebtedness or from any representative therefor and, prior to the
receipt of any such written notice, the Trustee, subject to the provisions of
Sections 7.01 and 7.02, shall be entitled in all respects conclusively to assume
that no such fact exists.
SECTION 10.07 Application by Trustee of Amounts Deposited with It.
Amounts deposited in trust with the Trustee pursuant to and in
accordance with Article VIII shall be for the sole benefit of Holders of the
Securities of series for the benefit of which such amounts were deposited, and,
to the extent allocated for the payment of Securities of such series, shall not
be subject to the subordination provisions of this Article X. Otherwise, any
deposit of assets with the Trustee or the Paying Agent (whether or not in trust)
for the payment of principal of, premium (if any) or interest on or any
Additional Amounts with respect to any Securities shall be subject to the
provisions of Sections 10.01, 10.02, 10.03 and 10.04; provided that if prior to
two Business Days preceding the date on which by the terms of this Indenture any
such assets may become distributable for any purpose (including without
limitation, the payment of either principal of, premium (if any) or interest on
or any Additional Amounts with respect to any Security), the Trustee or such
Paying Agent shall not have received with respect to such assets the written
notice provided for in Section 10.06, then the Trustee or such Paying Agent
shall have full power and authority to receive such assets and to apply the same
to the purpose for which they were received, and shall not be affected by any
notice to the contrary that may be received by it on or after such date; and
provided further that nothing contained in this Article X shall prevent the
Company from making, or the Trustee from receiving or applying, any payment in
connection with the redemption of Securities if the first publication of notice
of such redemption (whether by mail or otherwise in accordance with this
Indenture) has been made, and the Trustee has received such payment from the
Company, prior to the occurrence of any of the contingencies specified in
Section 10.02 or 10.03.
SECTION 10.08 Subordination Rights Not Impaired by Acts or Omissions of the
Company or Holders of Senior Indebtedness.
No right of any present or future holders of any Senior Indebtedness
to enforce subordination provisions contained in this Article X shall at any
time in any way be prejudiced or impaired by any act or failure to act on the
part of the Company or by any act or failure to act, in good faith, by any such
holder, or by any noncompliance by the Company with the terms of this Indenture,
regardless of any knowledge thereof that any such holder may have or be
otherwise charged with. The holders of Senior Indebtedness may extend, renew,
modify or amend the terms
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of the Senior Indebtedness or any security therefor and release, sell or
exchange such security and otherwise deal freely with the Company, all without
affecting the liabilities and obligations of the parties to this Indenture or
the Holders of the Securities.
SECTION 10.09 Trustee to Effectuate Subordination of Securities.
Each Holder of a Security by his acceptance thereof authorizes and
expressly directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination provisions contained in
this Article X and to protect the rights of the Holders of the Securities
pursuant to this Indenture, and appoints the Trustee his attorney-in-fact for
such purpose, including, in the event of any dissolution, winding up,
liquidation or reorganization of the Company (whether in bankruptcy, insolvency
or receivership proceedings or upon an assignment for the benefit of creditors
of the Company), the filing of a claim for the unpaid balance of his Securities
in the form required in said proceedings and cause said claim to be approved.
If the Trustee does not file a proper claim or proof of debt in the form
required in such proceeding prior to 30 days before the expiration of the time
to file such claim or claims, then the holders of the Senior Indebtedness or
their representative is hereby authorized to have the right to file and is
hereby authorized to file an appropriate claim for and on behalf of the Holders
of said Securities. Nothing herein contained shall be deemed to authorize the
Trustee or the holders of Senior Indebtedness or their representative to
authorize or consent to or accept or adopt on behalf of any Holder of Securities
any plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof, or to authorize the Trustee or
the holders of Senior Indebtedness or their representative to vote in respect of
the claim of any Holder of the Securities in any such proceeding.
SECTION 10.10 Right of Trustee to Hold Senior Indebtedness.
The Trustee in its individual capacity shall be entitled to all of the
rights set forth in this Article X in respect of any Senior Indebtedness at any
time held by it to the same extent as any other holder of Senior Indebtedness,
and nothing in this Indenture shall be construed to deprive the Trustee of any
of its rights as such holder.
SECTION 10.11 Article X Not to Prevent Events of Default.
The failure to make a payment on account of principal of or premium
(if any) or interest on the Securities by reason of any provision of this
Article X shall not be construed as preventing the occurrence of a Default or an
Event of Default under Section 6.01 or in any way prevent the Holders of the
Securities from exercising any right hereunder other than the right to receive
payment on the Securities.
SECTION 10.12 No Fiduciary Duty of Trustee to Holders of Senior Indebtedness.
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness, and shall not be liable to any such holders
(other than for its willful misconduct or negligence) if it shall in good faith
mistakenly pay over or distribute to the Holders of the Securities
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or the Company or any other Person, cash, property or securities to which any
holders of Senior Indebtedness shall be entitled by virtue of this Article X or
otherwise. Nothing in this Section 10.12 shall affect the obligation of any
other such Person to hold such payment for the benefit of, and to pay such
payment over to, the holders of Senior Indebtedness or their representative.
SECTION 10.13 Article Applicable to Paying Agent.
In case at any time any Payment 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 X shall in such case (unless the context shall
otherwise require) be construed as extending to and including such Payment Agent
within its meaning as fully for all intents and purposes as if such Paying Agent
were named in this Article in addition to or in place of the Trustee; provided,
however, that this Section 10.13 shall not apply to the Company or any Affiliate
of the Company if it or such Affiliate acts as Paying Agent.
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 operation of TIA (S) 318(c), the imposed duties shall
control.
SECTION 11.02 Notices.
Any notice or communication by the Company or the Trustee to the other
is duly given if in writing and delivered in person or mailed by first-class
mail (registered or certified, return receipt requested), telex, facsimile or
overnight air courier guaranteeing next day delivery, to the other's address:
If to the Company:
Global Marine Inc.
777 N. Eldridge Parkway
Houston, Texas 77079-4493
If to the Trustee:
______________________________
______________________________
______________________________
______________________________
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The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
All notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt acknowledged, if by facsimile; and the
next Business Day after timely delivery to the courier, if sent by overnight air
courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first-class
mail, postage prepaid, to the Holder's address shown on the register kept by the
Registrar. Failure to mail a notice or communication to a Holder or any defect
in it shall not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it, except in the case of notice to the Trustee, it is duly given only
when received.
If the Company mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.
All notices or communications, including without limitation notices to
the Trustee or the Company by Holders, shall be in writing, except as otherwise
set forth herein.
In case by reason of the suspension of regular mail service, or by
reason of any other cause, it shall be impossible to mail any notice required by
this Indenture, then such method of notification as shall be made with the
approval of the Trustee shall constitute a sufficient mailing of such notice.
SECTION 11.03 Communication by Holders with Other Holders.
Holders may communicate pursuant to TIA (S) 312(b) with other Holders
with respect to their rights under this Indenture or the Securities. The
Company, the Trustee, the Registrar and anyone else shall have the protection of
TIA (S) 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, if requested by the Trustee,
furnish to the Trustee at the expense of the Company:
(1) an Officers' Certificate (which shall include the statements set
forth in Section 11.05) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
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(2) an Opinion of Counsel (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 complied
with.
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 (S) 314(a)(4)) shall comply with the provisions of TIA
(S) 314(e) and shall include:
(1) a statement that the Person making such certificate or opinion has
read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he or she has
made such examination or investigation as is necessary to enable him or her
to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been complied with.
SECTION 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 the Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
SECTION 11.07 Legal Holidays.
If a payment date is a Legal Holiday at a Place of Payment, payment
may be made at that place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period.
SECTION 11.08 No Recourse Against Others.
A director, officer, employee, stockholder, partner or other owner of
the Company or the Trustee, as such, shall not have any liability for any
obligations of the Company under the Securities or for any obligations of the
Company or the Trustee under this Indenture or for any claim based on, in
respect of or by reason of such obligations or their creation. Each Holder by
accepting a Security waives and releases all such liability. The waiver and
release shall be part of the consideration for the issue of Securities.
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SECTION 11.09 Governing Law.
THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS TO THE EXTENT THE LAWS OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY.
SECTION 11.10 No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or any other Subsidiary. Any such indenture, loan
or debt agreement may not be used to interpret this Indenture.
SECTIOON 11.11 Successors.
All agreements of the Company in this Indenture and the Securities
shall bind its successors. All agreements of the Trustee in this Indenture
shall bind its successors.
SECTION 11.12 Severability.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall, to the fullest extent permitted by applicable
law, not in any way be affected or impaired thereby.
SECTION 11.13 Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
SECTION 11.14 Table of Contents, Headings, etc.
The table of contents, cross-reference table and headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof and shall in no way
modify or restrict any of the terms or provisions hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the day and year first above written.
GLOBAL MARINE INC.
By:
-------------------------------------
Name:
Title:
----------------------------------------
as Trustee
By:
-------------------------------------
Name:
Title:
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EXHIBIT 5
Baker & Botts, L.L.P.
One Shell Plaza
910 Louisiana
Houston, Texas 77002-4995
April 9, 1998
Global Marine Inc.
777 N. Eldridge Parkway
Houston, Texas 77079-4493
Gentlemen:
As set forth in the Registration Statement on Form S-3 to be filed
with the Securities and Exchange Commission (the "Commission") on April 9, 1998
(the "Registration Statement") by Global Marine Inc., a Delaware corporation
(the "Company"), under the Securities Act of 1933, as amended (the "Act"),
relating to (i) unsecured debt securities of the Company ("Debt Securities"),
(ii) shares of preferred stock, par value $.01 per share, of the Company
("Preferred Stock") and (iii) shares of common stock, par value $.01 per share,
of the Company ("Common Stock," and together with the Debt Securities and
Preferred Stock, the "Securities"), to be issued and sold by the Company from
time to time pursuant to Rule 415 under the Act for an aggregate initial
offering price not to exceed $500,000,000, certain legal matters in connection
with the Securities are being passed upon for you by us.
In our capacity as your counsel in the connection referred to above,
we have examined (i) the Restated Certificate of Incorporation and By-Laws of
the Company, each as amended to date (together, the "Charter Documents"), (ii)
the Indenture dated as September 10, 1997 between the Company and Wilmington
Trust Company, as trustee (the "Senior Debt Indenture"), pursuant to which
senior Debt Securities may be issued, (iii) the form of the Indenture to be
filed as Exhibit 4.8 to the Registration Statement to be executed by the Company
and the trustee thereunder (the "Subordinated Debt Indenture"), pursuant to
which subordinated Debt Securities may be issued, and (iv) the originals, or
copies certified or otherwise identified, of corporate records of the Company,
certificates of public officials and of representatives of the Company, statutes
and other instruments and documents as a basis for the opinions hereafter
expressed.
In connection with this opinion, we have assumed that (i) the
Registration Statement, and any amendments thereto (including post-effective
amendments), will have become effective; (ii) a Prospectus Supplement will have
been prepared and filed with the Commission describing the Securities offered
thereby; (iii) all Securities will be issued and sold in compliance with
applicable
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federal and state securities laws and in the manner stated in the Registration
Statement and the appropriate Prospectus Supplement; (iv) a definitive purchase,
underwriting or similar agreement with respect to any Securities offered will
have been duly authorized and validly executed and delivered by the Company and
the other parties thereto; (v) any securities issuable upon conversion,
exchange, redemption or exercise of any Securities being offered will be duly
authorized, created and, if appropriate, reserved for issuance upon such
conversion, exchange, redemption or exercise and (vi) with respect to shares of
Common Stock or Preferred Stock offered, there will be sufficient shares of
Common Stock or Preferred Stock authorized under the Company's Charter Documents
and not otherwise reserved for issuance.
Based upon and subject to the foregoing, we are of the opinion that:
1. The Company is a corporation duly organized and validly existing
in good standing under the laws of the State of Delaware.
2. With respect to shares of Common Stock, when (i) the Board of
Directors of the Company or, to the extent permitted by the General Corporation
Law of the State of Delaware and the Company's Charter Documents, a duly
constituted and acting committee thereof (such Board of Directors or committee
being hereinafter referred to as the "Board") has taken all necessary corporate
action to approve the issuance thereof and the terms of the offering of shares
of Common Stock and related matters, and (ii) certificates representing the
shares of Common Stock have been duly executed, countersigned, registered and
delivered either (a) in accordance with the applicable definitive purchase,
underwriting or similar agreement approved by the Board upon payment of the
consideration therefor (not less than the par value of the Common Stock)
provided for therein, or (b) upon conversion, exchange, redemption or exercise
of any other Security, in accordance with the terms of such Security or the
instrument governing such Security providing for such conversion, exchange,
redemption or exercise as approved by the Board, for the consideration approved
by the Board (not less than the par value of the Common Stock), the shares of
Common Stock will be duly authorized, validly issued, fully paid and non-
assessable.
3. With respect to shares of Preferred Stock, when (i) the Board has
taken all necessary corporate action to approve and establish the terms of the
shares of Preferred Stock, to approve the issuance thereof and the terms of the
offering thereof and related matters, including the adoption of a Certificate of
Designations relating to such Preferred Stock (a "Certificate of Designations")
and the filing of such Certificate of Designations with the Secretary of State
of the State of Delaware, and (ii) certificates representing the shares of
Preferred Stock have been duly executed, countersigned, registered and delivered
either (a) in accordance with the applicable definitive purchase, underwriting
or similar agreement approved by the Board upon payment of the consideration
therefor (not less than the par value of the Preferred Stock) provided for
therein, or (b) upon conversion, exchange, redemption or exercise of any other
Security, in accordance with the terms of such Security or the instrument
governing such Security providing for such conversion, exchange, redemption or
exercise as approved by the Board, for the consideration approved by the
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Board (not less than the par value of the Preferred Stock), the shares of
Preferred Stock will be duly authorized, validly issued, fully paid and non-
assessable.
4. With respect to Debt Securities to be issued under the Senior Debt
Indenture, when (i) the Board has taken all necessary corporate action to
approve and establish the terms of such Debt Securities, to approve the issuance
thereof and the terms of the offering thereof and related matters, and (ii) such
Debt Securities have been duly executed, authenticated, issued and delivered in
accordance with both the provisions of the Senior Debt Indenture and either (a)
the provisions of the applicable definitive purchase, underwriting or similar
agreement approved by the Board upon payment of the consideration therefor
provided for therein or (b) upon conversion, exchange, redemption or exercise of
any other Security, in accordance with the terms of such Security or the
instrument governing such Security providing for such conversion, exchange,
redemption or exercise as approved by the Board, for the consideration approved
by the Board, such Debt Securities will constitute legal, valid and binding
obligations of the Company, enforceable against the Company, except as the
enforceability thereof is subject to the effect of (i) bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other laws relating to or
affecting creditors' rights generally and (ii) general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
5. With respect to Debt Securities to be issued under the
Subordinated Debt Indenture, when (i) the Subordinated Debt Indenture has been
duly authorized and validly executed and delivered by the Company to the
trustee; (ii) the Subordinated Debt Indenture has been duly qualified under the
Trust Indenture Act of 1939, as amended; (iii) the Board has taken all necessary
corporate action to approve and establish the terms of such Debt Securities, to
approve the issuance thereof and the terms of the offering thereof and related
matters; and (iv) such Debt Securities have been duly executed, authenticated,
issued and delivered in accordance with both the provisions of the Subordinated
Debt Indenture and either (a) the provisions of the applicable definitive
purchase, underwriting or similar agreement approved by the Board upon payment
of the consideration therefor provided for therein or (b) upon conversion,
exchange, redemption or exercise of any other Security, in accordance with the
terms of such Security or the instrument governing such Security providing for
such conversion, exchange, redemption or exercise as approved by the Board, for
the consideration approved by the Board; such Debt Securities will constitute
legal, valid and binding obligations of the Company, enforceable against the
Company, except as the enforceability thereof is subject to the effect of (i)
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
other laws relating to or affecting creditors' rights generally and (ii)
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
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We hereby consent to the filing of this opinion of counsel as Exhibit
5 to the Registration Statement. We also consent to the reference to our Firm
under the heading "Legal Matters" in the Prospectus forming a part of the
Registration Statement. In giving this consent, we do not hereby admit that we
are in the category of persons whose consent is required under Section 7 of the
Act.
Very truly yours,
BAKER & BOTTS, L.L.P.
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EXHIBIT 12
GLOBAL MARINE INC. AND SUBSIDIARIES
RATIO OF EARNINGS BEFORE FIXED CHARGES TO FIXED CHARGES
($ in millions)
<TABLE>
<CAPTION>
1997 1996 1995 1994 1993
----------- ----------- ---------- ---------- -----------
EARNINGS BEFORE FIXED CHARGES:
<S> <C> <C> <C> <C> <C>
Earnings before taxes $294.0 $119.7 $55.1 $ 5.4 (26.2)
Plus fixed charges (per 89.4 59.5 44.2 44.3 37.6
computation below)
Less capitalized interest (20.9) (2.6) (5.6) (3.7) --
--------------------------------------------------------------
A $362.5 $176.6 $93.7 $46.0 11.4
==============================================================
FIXED CHARGES:
Interest expense $ 39.7 $ 30.9 $30.2 $30.2 $ 32.1
Interest component and rental 49.7 28.6 14.0 14.1 5.5
expense --------------------------------------------------------------
B $ 89.4 $ 59.5 $44.2 $44.3 $ 37.6
==============================================================
RATIO OF EARNINGS BEFORE FIXED
CHARGES TO FIXED CHARGES A/B 4.05 2.97 2.12 1.04 0.30
==============================================================
</TABLE>
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement on
Form S-3 of our report dated March 11, 1998, on our audits of the consolidated
financial statements and the consolidated financial statement schedule of Global
Marine Inc. and subsidiaries. We also consent to the reference to our firm
under the caption "Experts."
/s/ Coopers & Lybrand L.L.P.
Houston, Texas
April 8, 1998
